RE: Appraisals For 111 Fulton Street, New York, NY and For 176 Columbia Turnpike, Florham Park NJ - Consent To Publication

November 27, 2018
To: Klein International Group Limited
C/O Maples Corporate Services (BVI) Limited
Kingston Chamers
PO Box 173, Road Town
Tortola, British Virgin Islands
To Whom It May Concern:
RE: Appraisals for 111 Fulton Street, New York, NY and for 176 Columbia Turnpike, Florham
Park, NJ – Consent to Publication
At your request, we the undersigned, hereby give our consent to Klein International Group Limited to
the inclusion of the appraisals carried out by our firm dated September 30, 2018 ("Appraisal Reports")
which will be attached to the financial statements of Klein International Group Limited as September
30, 2018, to be included, in Klein International Group Limited's periodic report for the year 2018
expected to be published on November 27, 2018 (the "2018 Periodic Report").
In addition, we hereby give our consent to the inclusion of this letter in the 2018 Periodic Report
expected to be published in November 2018.
Respectfully submitted,
BBG, Inc.
Michelle Zell, MAI
Senior Appraiser
Appraiser consent
AN APPRAISAL REPORT OF
FLORHAM PARK PLAZA

AN EXISTING 64,683 SF GLA NEIGHBORHOOD
SHOPPING CENTER
176 COLUMBIA TURNPIKE
FLORHAM PARK, MORRIS COUNTY, NEW JERSEY
07932
FOR
THE KLEIN GROUP

MR. JACOB KLEIN
25-A HANOVER ROAD
FLORHAM PARK, NEW JERSEY 07932
Date of Valuation “As Is”: September 30, 2018

Date of Report: November 13, 2018
BY
BBG, INC.
112 MADISON AVENUE, 11TH FLOOR
NEW YORK, NY 10016
November 13, 2018
Mr. Jacob Klein

The Klein Group
25-A Hanover Road
Florham Park, New Jersey 07932
Re: BBG File No. 0118009565

Florham Park Plaza
An Existing 64,683 SF GLA Neighborhood Shopping Center
176 Columbia Turnpike
Florham Park, Morris County, New Jersey 07932
Dear Mr. Klein:
We have performed an appraisal on the above referenced property, the conclusions of which are set forth in
the attached Appraisal Report. The type of value sought in our appraisal of the subject was an “as is” Fair
Value opinion for the Leased Fee interest in the property as of September 30, 2018, subject to the
extraordinary and general underlying assumptions and limiting conditions cited herein.
The subject of this appraisal is a multi-tenant neighborhood shopping center located in Florham Park, New
Jersey. The improvements consist of two concrete block with brick veneer buildings that were constructed in
1977 and renovated in 2010. According to the provided rent roll, the buildings have + 64,683 square feet of
gross leasable area. The subject is situated on a 7.52 acre parcel that is located on the northeast corner of
Columbia Turnpike and James Street in the Borough of Florham Park, New Jersey.
The subject neighborhood is located in an outer portion of the northern New Jersey suburbs of New York City.
The market is a developed and established suburban area that exhibits commercial and residential density
characteristics typical of the northeast region. The subject is located in Florham Park, a smaller suburb with a
tranquil atmosphere and an upper income population.
According to information provided by the borough assessor, the subject property is owned by Klein Florham
Park, LLC. The center is 100.00% leased to 15 tenants paying an average of $36.71/SF on NNN leases. The
subject has a significant national tenant base, with Walgreens at 13,101 SF, Trader Joe’s at 11,266 SF, The
Dress Barn at 7,034 SF, and McDonald’s at 4,362 SF on an outparcel, among others. Local tenants include
Nonna’s restaurant, BOM Nails, and Modern Acupuncture.
Mr. Jacob Klein
November 13, 2018
Page 2
Overall, area brokers and market participants noted that the subject property has an outstanding location
within the subject market as it benefits from the strong demographics and the favorable location on a well-
traveled thoroughfare.
We have appraised the above referenced property, the conclusions of which are set forth in the attached
appraisal report. This is an Appraisal Report that is intended to comply with the reporting requirements set
forth under Standards Rule 2-2 of USPAP and the Code of Professional Ethics and the Standards of
Professional Appraisal Practice of the Appraisal Institute. In addition, this appraisal has been prepared in
compliance with IFRS 13 (International Financial Reporting Standards 13-fair value measurement). The depth
of analysis discussed in this report is specific to the needs of the client and for the intended use stated in the
report. The report is intended for use only by The Klein Group, its successors, assigns, and affiliates. The
report is intended only for use in The Klein Group’s financial statements. The use by others is not intended by
BBG, Inc.
In view of the following data and analysis in conjunction with this appraisal, the “as is” Fair Value of the
Leased Fee Interest in the subject properties, as of September 30, 2018, subject to the extraordinary and
general underlying assumptions and limiting conditions, will be:
$45,900,000
Extraordinary Assumptions/Hypothetical Conditions

• The subject property has one signed lease currently in buildout. It is assumed that Modern
Acupuncture will commence rent in its expanded space on or near February 1st, 2019.
• The subject property was previously inspected on December 11, 2017. A subsequent inspection was
not made. It is an extraordinary assumption of this appraisal that no significant physical changes have
occurred which would significantly impact the value of the subject.
The use of Extraordinary Assumptions might have affected assignment results.

Mr. Jacob Klein
November 13, 2018
Page 3
Exposure Time/Marketing Period

Based on exposure times of comparable sales and interviews with active participants in the local retail
market, the above Fair Value conclusion could be achieved with an exposure time of twelve months.
Furthermore, it is our opinion that a sale could be consummated at the Fair Value conclusion stated herein
within a twelve-month marketing period of the effective date of appraisal.
Demand for credit occupied retail buildings is evident in the northeastern United States and other regions of
the country. The market for net lease properties is dynamic and is still a desirable market sector. Exposure
times are generally less than one year. The subject’s excellent exposure and location, coupled with strong,
national credit tenants in the rent roll, make this an attractive investment. Because of the national scope of the
market for net lease properties and the emphasis on the credit of the tenant over the underlying real estate,
there is little differentiation between primary and secondary markets.
Ronald K. Owens, Jr., MAI, MRICS, ASA performed prior appraisals of the subject property in appraisal
reports dated September 18, 2015, October 17, 2016, and February 9, 2018.
This letter must remain attached to the report, which contains 84 pages plus related exhibits, in order for the
value opinions set forth to be considered valid.
Our firm appreciates the opportunity to have performed this appraisal assignment on your behalf. If we may
be of further service, please contact us.
Respectfully submitted,
BBG, Inc.
Ronald K. Owens, Jr., MAI, MRICS, ASA

New Jersey State Certified
General Real Estate Appraiser
License # 42RG00217000
TABLE OF CONTENTS
SUBJECT AT A GLANCE ............................................................................................................... 1

SUMMARY OF SALIENT FACTS.................................................................................................... 2
CERTIFICATION ............................................................................................................................. 4
INTRODUCTION ............................................................................................................................. 6
ASSUMPTIONS AND LIMITING CONDITIONS ............................................................................ 10
NEW YORK CITY METROPOLITAN ANALYSIS .......................................................................... 13
RETAIL MARKET OVERVIEW ...................................................................................................... 24
TRADE AREA/ANCHOR PROFILE ANALYSIS ............................................................................ 30
NEIGHBORHOOD ANALYSIS ...................................................................................................... 38
SITE ANALYSIS ............................................................................................................................ 42
IMPROVEMENT ANALYSIS ......................................................................................................... 47
ZONING ANALYSIS ...................................................................................................................... 52
HIGHEST AND BEST USE............................................................................................................ 53
REAL ESTATE TAX ANALYSIS ................................................................................................... 55
APPRAISAL PROCESS ................................................................................................................ 56
SALES COMPARISON APPROACH ............................................................................................ 57
INCOME CAPITALIZATION APPROACH ..................................................................................... 62
RECONCILIATION AND FINAL VALUE CONCLUSION............................................................... 83
EXHIBITS ...................................................................................................................................... 85
FLORHAM PARK PLAZA

SUBJECT AT A GLANCE
Additional photos can be found in the Exhibits Section of this report.
FLORHAM PARK PLAZA PAGE 1

SUMMARY OF SALIENT FACTS
Property Florham Park Plaza

An Existing 64,683 SF GLA Shopping Center
Florham Park, Morris, New Jersey 07932
Date of Inspection December 11, 2017
Date of Valuation
“As Is” September 30, 2018
Date of Report November 13, 2018
Interest Appraised Leased Fee
Physical Data
Land Area: 7.52 Acres (327,484 SF)
Floodplain Zone X, Panel 3403420017E, December 20, 2002
Utilities All available
Year of Construction 1977, renovated 2010
Gross Leasable Area (GLA) 64,683 SF
Gross Building Area (GBA) 64,683 SF
Parking 312 Spaces
Ratio 1 Space/207 SF
Land to Building Ratio 5.06:1
Floor Area Ratio 0.20:1
Type of Construction The improvements consist of concrete block with brick
veneer.
Building Class C
Zoning Classification "B-1" - Business
Status Legally conforming
Highest and Best Use

“As Vacant” Multi-tenant shopping center development.
“As Improved” Continued utilization of the existing improvements until their
economic life is realized

SUMMARY OF SALIENT FACTS
Income & Expense Data

Contract Rent $36.71/SF NNN - Average
Market Rent
Market Rent Summary

Market Market Lease
Rent/SF Rent/SF Term
Space Type Range Average (Yrs.)
Small In-Line $20.00 - $50.00 $40.00 5
Large In-Line $17.00 - $23.00 $30.00 10
Pad / End Cap $30.00 - $48.00 $45.00 20
Stabilized Occupancy 95% (includes 1% collection loss) – Vacancy excluded from

credit tenants.
Occupancy at Inspection 100.00%
Net Operating Income $2,261,948; $34.97/SF
Overall Capitalization Rate
Going-In 5.00%
Terminal 5.50%
Discount Rate 6.25%
Value Indications of Subject – “As Is”

Sales Comparison Approach $45,900,000
Income Capitalization Approach $45,900,000
Cost Approach N/A
Fair Value Conclusion

“As Is” $45,900,000
Units of Comparison
Value/SF (GLA) $709.61
Ro 4.93%
Marketing/Estimated Exposure Period 12 months

CERTIFICATION
I certify that, to the best of 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 my personal, impartial, and unbiased professional analyses, opinions, and
conclusion.
- I have no present or prospective interest in the property that is the subject of this report and no personal
interest with respect to the parties involved.
- I have no bias with respect to the property that is the subject of this report or to the parties involved with
this assignment.
- My engagement in this assignment was not contingent upon developing or reporting predetermined
results.
- 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.
- My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity
with the Uniform Standards of Professional Appraisal Practice.
- Ronald K. Owens, Jr., MAI, MRICS, ASA inspected the interior and exterior of the subject property on
December 11, 2017.
- Michael J. Mattair provided research assistance to the person signing this certification, including
gathering and confirmation of comps, market research, tax and zoning research, and drafting of the
report.
- Ronald K. Owens, Jr., MAI, MRICS, ASA performed prior appraisals of the subject property in appraisal
reports dated September 18, 2015, October 17, 2016, and February 9, 2018. The undersigned has
provided no other services, as an appraiser or in any other capacity, regarding the property that is the
subject of this report within the three-year period immediately preceding acceptance of this assignment.
- The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the requirements of the Code of Professional Ethics and the Standards of Professional
Appraisal Practice of the Appraisal Institute and the minimum appraisal standards cited in Section 323.4
of Title XI of FIRREA and subsequent updates and the December 2010 Interagency Appraisal and
Valuation Guidelines.
- The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representatives.

CERTIFICATION
- As of the date of this report, Ronald K. Owens, Jr., MAI, MRICS, ASA has completed the continuing
education program for Designated Members of the Appraisal Institute.
- As of the date of this report, Ronald K. Owens, Jr., MAI, MRICS, ASA is a general certified appraiser in
the State of New Jersey.

New Jersey State Certified
General Real Estate Appraiser
License # 42RG00217000

INTRODUCTION
Property Appraised
Florham Park Plaza
An Existing 64,683 SF GLA Neighborhood Shopping Center
Florham Park, Morris County, New Jersey 07932
Property Identification
The subject of this appraisal is a multi-tenant neighborhood shopping center located in Florham Park,
New Jersey. The improvements consist of two concrete block with brick veneer buildings that were
constructed in 1977 and renovated in 2010. According to the provided rent roll, the buildings have +
64,683 square feet of gross leasable area. The subject is situated on an 7.52 acre parcel that is located
on the northeast corner of Columbia Turnpike and James Street in the Borough of Florham Park, New
Jersey.
The subject neighborhood is located in an outer portion of the northern New Jersey suburbs of New York
City. The market is a developed and established suburban area that exhibits commercial and residential
density characteristics typical of the northeast region. The subject is located in Florham Park, a smaller
suburb with a tranquil atmosphere and an upper income population.
The property is currently 100.00% occupied with the previously mentioned tenants. The property is
located on 7.52 acres and contains 312 parking spaces, which meets the minimum number of spaces
mandated by the borough planning department.
The neighborhood is dominated by retail and other commercial development along the primary
commercial corridors, and is also provided with abundant residential development properties located in
subdivisions scattered throughout the market area.
Market conditions in the area appear to support the use of the subject property and there appears to be
experienced property management in place. The subject property should continue to be successful if
properly managed, operated, and marketed. The following are considered some of the advantages and
challenges of the subject property:
ADVANTAGES:
• Subject is located in a well performing commercial corridor with very good visibility.
• The subject is perceived by local brokers to be a well located center in Florham Park.
• Subject lies in the major New York City/Northern New Jersey metro area.
CHALLENGES:
• Regional economic expansion is slowing.

INTRODUCTION
Legal Description
The subject consists of Block 804, Lot 2 in the Borough of Florham Park, County of Morris, State of New
Jersey. A full legal description with metes and bounds is provided in the Exhibits section of the report.
Purpose of Appraisal
The purpose of the appraisal is to estimate the fair value as of September 30, 2018, in accordance with
IFRS 13.
Function Of The Appraisal/Intended User

The type and definition of value sought in the appraisal of the subject was an “as is” Fair Value opinion for
the Leased Fee interest in the property as of September 30, 2018, subject to the extraordinary and
general underlying assumptions and limiting conditions cited herein, and in compliance with IFRS 13
(International Financial Reporting Standards 13-fair value measurement). According to the International
Financial Reporting Standard 13, Fair Value is defined as: “The price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date.”
This report is intended for use only by The Klein Group’s financial statements.
Property Rights Appraised

The Fair Value conclusion for the property reflects the Leased Fee interest in the subject.
Definition of Fair Value

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date (i.e. an exit price). That
definition of fair value emphasis that fair value is a market-based measurement, not an entity-specific
measurement. When measuring fair value, an entity uses the assumptions that market participants would
use when pricing the asset or liability under current market conditions, including assumptions about risk.
As a result, an entity’s intention to hold an asset or to settle or otherwise fulfil a liability is not relevant
when measuring fair value. The IFRS explains that a fair value measurement requires an entity to
determine the following:
(a) the particular asset or liability being measured;
(b) for a non-financial asset, the highest and best use of the asset and whether the asset is used in
combination with other assets or on a stand-alone basis;
(c) the market in which an orderly transaction would take place for the asset or liability; and
(d) the appropriate valuation technique(s) to use when measuring fair value. The valuation technique(s)
used should maximize the use of relevant observable inputs and minimize unobservable inputs. Those
inputs should be consistent with the inputs a market participant would use when pricing the asset or
liability.

INTRODUCTION
History of the Subject Property

The subject of this appraisal is a multi-tenant neighborhood shopping center located in Florham Park,
New Jersey. The improvements consist of two concrete block with brick veneer buildings that were
constructed in 1977 and renovated in 2010. According to the provided rent roll, the buildings have +
64,683 square feet of gross leasable area. The subject is situated on an 7.52 acre parcel that is located
on the northeast corner of Columbia Turnpike and James Street in the Borough of Florham Park, New
Jersey.
According to information provided by the borough assessor, the subject property is owned by Klein
Florham Park, LLC. The center is 100.00% leased to 15 tenants paying an average of $36.71/SF on NNN
leases. The subject has a significant national tenant base, with Walgreens at 13,101 SF, Trader Joe’s at
11,266 SF, The Dress Barn at 7,034 SF, and McDonald’s at 4,362 SF on an outparcel, among others.
Local tenants include Nonna’s restaurant, BOM Nails, and Modern Acupuncture.
Based on the rent roll provided, the building has a monthly rental income of $197,895.65, which averages
$36.71 per square foot annually on current space leased. The current lease rates are between $26.28
and $45.39, with an average of $36.71 per square foot.
According to the borough assessor, the current owners have held title to the subject property since
December 23, 2005. To the best of the appraiser’s knowledge, the subject is not currently being offered
for sale or affected by a pending contract of sale.
Ronald K. Owens, Jr., MAI, MRICS, ASA performed prior appraisals of the subject property in appraisal
reports dated September 18, 2015, October 17, 2016, and February 9, 2018.
Scope of Appraisal/Extent the Data Collection Process

The scope of this assignment was to complete an appraisal and provide a Fair Value conclusion for the
subject property “as is”. The value conclusions are reported herein in an Appraisal Report format that
follows generally accepted appraisal procedures as set forth in the Uniform Standards of Professional
Appraisal Practice (USPAP). This appraisal utilized two of the three accepted approaches to value:
(1) Sales Comparison Approach and the (2) Income Capitalization Approach. The procedures and
methodologies employed in these approaches are outlined in the Appraisal Process section of this report.
The following steps were completed by the appraisers.
1. Ronald K. Owens Jr., MAI, MRICS, ASA inspected the interior and exterior of the subject property
on December 11, 2017 as part of the original appraisal assignment. A re-inspection for this
appraisal report was not performed. Specific information relative to the subject property was
provided by the representatives from The Klein Group. A thorough inspection of the subject
property was made along with the general and immediate neighborhoods.
2. Gathered information from various secondary data sources regarding regional and local
economic and demographic data specifically relating to the regional, city and neighborhood
analyses.

INTRODUCTION
3. Analyzed trends in the retail market utilizing data compiled through confirmation of the
comparable rents. Numerous retail brokers and developers active in this market were also
interviewed relative to new construction and projects in the planning stages.
4. Researched the flood plain reference relative to the survey provided.
5. Analyzed the highest and best use of the site “as if vacant” and the property “as improved”.
Supply, demand and absorption potential as well as construction costs and required yields were
analyzed relative to the subject market and specifically the subject property. Alternative uses
were also analyzed relative to their financial feasibility.
6. Confirmed sales of similar centers to compare to the subject.
7. Researched and analyzed comparable rentals in the market area by interviewing the leasing
agents at each respective property as well as on a regional basis. These data and the subject
leases were utilized to estimate market rent in the Income Capitalization Approach. An exterior
inspection of each rental comparable was made.
8. Estimated the operating expenses applicable to the lease structure of the subject utilizing its
historical expenses and the 2018 IREM Report.
9. Analyzed the data to arrive at conclusions of value via the Sales Comparison and Income
Capitalization Approaches to value.
10. Reconciled the results of these analyses into a probable range of value, and finally, an “as is”
value conclusion.
11. Estimated the reasonable exposure time and marketing period inherent in the Fair Value
conclusion.
12. Prepared an appraisal report.
The client or property owner provided the appraisers with the following information with which to complete
the appraisal assignment:
• Survey;
• Leases;
• Operating history, 2011-2018;
• Rent rolls 2011-2018.
Competency
The appraisers involved in this assignment have, collectively, considerable experience in appraising retail
properties in the State of New Jersey and nation-wide. The appraisers have historically been engaged in
appraisal work in the geographical area of the subject property. The company maintains a database on
this area for similar properties. We believe we have adequate knowledge of the property type and location
to meet the competency requirements of USPAP.

ASSUMPTIONS AND LIMITING CONDITIONS
1. Any legal description or plats reported herein are assumed to be accurate. Any sketches, surveys, plats,
photographs, drawings or other exhibits are included only to assist the intended user to better understand and
visualize the subject property, the environs, and the competitive data. We have made no survey of the property and
assume no responsibility in connection with such matters.
2. The appraiser has not conducted any engineering or architectural surveys in connection with this appraisal
assignment. Information reported pertaining to dimensions, sizes, and areas is either based on measurements taken
by the appraiser or the appraiser’s staff or was obtained or taken from referenced sources and is considered reliable.
No responsibility is assumed for the costs of preparation or for arranging geotechnical engineering, architectural, or
other types of studies, surveys, or inspections that require the expertise of a qualified professional.
3. No responsibility is assumed for matters legal in nature. Title is assumed to be good and marketable and in fee
simple unless otherwise stated in the report. The property is considered to be free and clear of existing liens,
easements, restrictions, and encumbrances, except as stated.
4. Unless otherwise stated herein, it is assumed there are no encroachments or violations of any zoning or other
regulations affecting the subject property and the utilization of the land and improvements is within the boundaries or
property lines of the property described and that there are no trespasses or encroachments.
5. BBG, Inc. assumes there are no private deed restrictions affecting the property which would limit the use of the
subject property in any way.
6. It is assumed the subject property is not adversely affected by the potential of floods; unless otherwise stated herein.
7. It is assumed all water and sewer facilities (existing and proposed) are or will be in good working order and are or will
be of sufficient size to adequately serve any proposed buildings.
8. Unless otherwise stated within the report, the depiction of the physical condition of the improvements described
herein is based on visual inspection. No liability is assumed for the soundness of structural members since no
engineering tests were conducted. No liability is assumed for the condition of mechanical equipment, plumbing, or
electrical components, as complete tests were not made. No responsibility is assumed for hidden, unapparent or
masked property conditions or characteristics that were not clearly apparent during our inspection.
9. If building improvements are present on the site, no significant evidence of termite damage or infestation was
observed during our physical inspection, unless so stated in the report. No termite inspection report was available,
unless so stated in the report. No responsibility is assumed for hidden damages or infestation.
10. Any proposed or incomplete improvements included in this report are assumed to be satisfactorily completed in a
workmanlike manner or will be thus completed within a reasonable length of time according to plans and
specifications submitted.
11. No responsibility is assumed for hidden defects or for conformity to specific governmental requirements, such as fire,
building, safety, earthquake, or occupancy codes, except where specific professional or governmental inspections
have been completed and reported in the appraisal report.
12. Responsible ownership and competent property management are assumed.
13. The appraisers assume no responsibility for any changes in economic or physical conditions which occur following
the effective date of value within this report that would influence or potentially affect the analyses, opinions, or
conclusions in the report. Any subsequent changes are beyond the scope of the report.
14. The value estimates reported herein apply to the entire property. Any proration or division of the total into fractional
interests will invalidate the value estimates, unless such proration or division of interests is set forth in the report.
15. Any division of the land and improvement values estimated herein is applicable only under the program of utilization
shown. These separate valuations are invalidated by any other application.
16. Unless otherwise stated in the report, only the real property is considered, so no consideration is given to the value of
personal property or equipment located on the premises or the costs of moving or relocating such personal property
or equipment.
17. Unless otherwise stated, it is assumed that there are no subsurface oil, gas or other mineral deposits or subsurface
rights of value involved in this appraisal, whether they are gas, liquid, or solid. Nor are the rights associated with
extraction or exploration of such elements considered; unless otherwise stated. Unless otherwise stated it is also
assumed that there are no air or development rights of value that may be transferred.
18. Any projections of income and expenses, including the reversion at time of resale, are not predictions of the future.
Rather, they are our best estimate of current market thinking of what future trends will be. No warranty or
representation is made that these projections will materialize. The real estate market is constantly fluctuating and
changing. It is not the task of an appraiser to estimate the conditions of a future real estate market, but rather to

reflect what the investment community envisions for the future in terms of expectations of growth in rental rates,
expenses, and supply and demand. The forecasts, projections, or operating estimates contained herein are based
on current market conditions, anticipated short-term supply and demand factors, and a continued stable economy.
These forecasts are, therefore, subject to changes with future conditions.
19. Unless subsoil opinions based upon engineering core borings were furnished, it is assumed there are no subsoil
defects present, which would impair development of the land to its maximum permitted use or would render it more or
less valuable. No responsibility is assumed for such conditions or for engineering which may be required to discover
them.
20. BBG, Inc. representatives are not experts in determining the presence or absence of hazardous substances, defined
as all hazardous or toxic materials, wastes, pollutants or contaminants (including, but not limited to, asbestos, PCB,
UFFI, or other raw materials or chemicals) used in construction or otherwise present on the property. We assume no
responsibility for the studies or analyses which would be required to determine the presence or absence of such
substances or for loss as a result of the presence of such substances. Appraisers are not qualified to detect such
substances. The client is urged to retain an expert in this field.
21. We are not experts in determining the habitat for protected or endangered species, including, but not limited to,
animal or plant life (such as bald eagles, gophers, tortoises, etc.) that may be present on the property. We assume no
responsibility for the studies or analyses which would be required to determine the presence or absence of such
species or for loss as a result of the presence of such species. The appraiser hereby reserves the right to alter,
amend, revise, or rescind any of the value opinions based upon any subsequent endangered species impact studies,
research, and investigation that may be provided.
22. No environmental impact studies were either requested or made in conjunction with this analysis. The appraiser
hereby reserves the right to alter, amend, revise, or rescind any of the value opinions based upon any subsequent
environmental impact studies, research, and investigation that may be provided.
23. The appraisal is based on the premise that there is full compliance with all applicable federal, state, and local
environmental regulations and laws unless otherwise stated in the report; further, that all applicable zoning, building,
and use regulations and restrictions of all types have been complied with unless otherwise stated in the report;
further, it is assumed that all required licenses, consents, permits, or other legislative or administrative authority,
local, state, federal and/or private entity or organization have been or can be obtained or renewed for any use
considered in the value estimate.
24. Neither all nor any part of the contents of this report or copy thereof, shall be conveyed to the public through
advertising, public relations, news, sales, or any other media, without the prior written consent and approval of the
appraisers. This limitation pertains to any valuation conclusions, the identity of the analyst or the firm and any
reference to the professional organization of which the appraiser is affiliated or to the designations thereof.
25. Although the appraiser has made, insofar as is practical, every effort to verify as factual and true all information and
data set forth in this report, no responsibility is assumed for the accuracy of any information furnished the appraiser
either by the client or others. If for any reason, future investigations should prove any data to be in substantial
variance with that presented in this report, the appraiser reserves the right to alter or change any or all analyses,
opinions, or conclusions and/or estimates of value.
26. If this report has been prepared in a so-called “public non-disclosure” state, real estate sales prices and other data,
such as rents, prices, and financing, are not a matter of public record. If this is such a “non-disclosure” state, although
extensive effort has been expended to verify pertinent data with buyers, sellers, brokers, lenders, lessors, lessees,
and other sources considered reliable, it has not always been possible to independently verify all significant facts. In
these instances, the appraiser may have relied on verification obtained and reported by appraisers outside of our
office. Also, as necessary, assumptions and adjustments have been made based on comparisons and analyses
using data in the report and on interviews with market participants. The information furnished by others is believed to
be reliable, but no warranty is given for its accuracy.
27. The American Disabilities Act (ADA) became effective January 26, 1992. The appraiser has not made a specific
compliance survey or analysis of the property to determine whether or not it is in conformity with e various detailed
requirements of ADA. It is possible that a compliance survey of the property and a detailed analysis of the
requirements of the ADA would reveal that the property is not in compliance with one or more of the requirements of
the act. If so, this fact could have a negative impact upon the value of the property. Since the appraiser has no direct
evidence relating to this issue, possible noncompliance with the requirements of ADA was not considered in
estimating the value of the property.
28. This appraisal report has been prepared for the exclusive benefit of the client. It may not be used or relied upon by
any other party. Any other party who is not the identified client within this report who uses or relies upon any
information in this report does so at their own risk.
29. The dollar amount of any value opinion herein rendered is based upon the purchasing power and price of the United
States Dollar as of the effective date of value. This appraisal is based on market conditions existing as of the date of
this appraisal.

30. The right is reserved by the appraiser to make adjustments to the analyses, opinions, and conclusions set forth in this
report as may be required by consideration of additional or more reliable data that may become available. No change
of this report shall be made by anyone other than the appraiser or appraisers. The appraiser(s) shall have no
responsibility for any unauthorized change(s) to the report.
31. If the client instructions to the appraiser were to inspect only the exterior of the improvements in the appraisal
process, the physical attributes of the property were observed from the street(s) as of the inspection date of the
appraisal. Physical characteristics of the property were obtained from tax assessment records, available plans, if any,
descriptive information, and interviewing the client and other knowledgeable persons. It is assumed the interior of the
subject property is consistent with the exterior conditions as observed and that other information relied upon is
accurate.
32. The submission of this report constitutes completion of the services authorized. It is submitted on the condition the
client will provide reasonable notice and customary compensation, including expert witness fees, relating to any
subsequent required attendance at conferences, depositions, and judicial or administrative proceedings. In the event
the appraiser is subpoenaed for either an appearance or a request to produce documents, a best effort will be made
to notify the client immediately.
33. Use of this appraisal report constitutes acknowledgement and acceptance of the general assumptions and limiting
conditions, special assumptions (if any), extraordinary assumptions (if any), and hypothetical conditions (if any) on
which this estimate of market value is based.
34. If provided, the estimated insurable value is included at the request of the client and has not been performed by a
qualified insurance agent or risk management underwriter. This cost estimate should not be solely relied upon for
insurable value purposes. The appraisers are not familiar with the definition of insurable value from the insurance
provider, the local governmental underwriting regulations, or the types of insurance coverage available. These factors
can impact cost estimates and are beyond the scope of the intended use of this appraisal. The appraisers are not
cost experts in cost estimating for insurance purposes.


NEW YORK CITY METROPOLITAN ANALYSIS
Introduction
The subject property is located in Florham Park Borough, Morris County, New Jersey, which is located in
the New York City Metropolitan Statistical Area. The New York City Metropolitan Statistical Area is a
metropolitan area located on the Atlantic Ocean, and in the northeast region of the country. As of the
2010 census, the MSA had a population of approximately 18,897,000.
Figure 1 – Regional Map (Subject denoted by pin)
The dynamic nature of economic relationships within a market area has a direct bearing on real estate
values and the long-term quality of a real estate investment. In the market, the value of a property is not
based on the price paid for it in the past or the cost of its creation, but on what buyers and sellers
perceive it will provide in the future. Consequently, the attitude of the market toward a property within a
specific neighborhood or market area reflects the probable future trend of that area.
Since real estate is an immobile asset, economic trends affecting its location quality in relation to other
competing properties within its market area will also have a direct effect on its value as an investment. To
accurately reflect such influences, it is necessary to examine the past and probable future trends, which
may affect the economic structure of the market and evaluate their impact on the market potential of the
subject. This section of the report is designed to isolate and examine the discernible economic trends in
the region, which influence and create value for the subject property.

Economy
Federal Reserve Board Districts
The subject is located in Federal Reserve Board’s Beige Book’s Second District. According to the
Federal Reserve Board’s Beige Book dated September 12, 2018, Economic activity in the Second District
expanded at a moderate pace in the latest reporting period. The labor market has continued to be tight,
while wage growth has remained steady. Widespread increases in input prices persisted, but there have
been signs of a slight deceleration in selling prices. Manufacturing activity continued to grow briskly, while
businesses in most service and distribution industries reported more modest growth. Consumer spending
was generally steady in recent weeks. Housing markets have softened somewhat, on balance, while
commercial real estate markets have firmed slightly. Finally, banks reported continued growth in loan
demand and little change in delinquency rates.
Employment and Wages

The labor market has remained tight across the District. Employers continued to note trouble filling senior
positions and finding technically skilled workers--particularly IT workers and engineers, as well as truck
drivers and construction workers. One retail contact also noted difficulty in finding cashiers and sales
associates. Some business contacts in upstate New York have faced challenges attracting skilled and
specialized workers to rural areas and even smaller cities. A New York City employment agency noted
that the labor market has remained tight, and anticipates brisk hiring to resume after Labor Day, following
the usual summer lull.
Hiring activity has been steady overall but mixed by industry. Business contacts in manufacturing,
wholesale trade, and finance continued to report fairly brisk hiring activity. In contrast, firms in retail trade,
leisure & hospitality, and transportation indicated steady to slightly declining staffing levels, though they
plan to add workers in the months ahead. A payroll service firm observed some further slowing in job
growth at small businesses.
Businesses in most service industries indicated that wage pressures remain fairly widespread, though
they have not intensified.

A major New York State employer noted success in using non-wage benefits (e.g., vacation, flexible
hours) to attract younger workers. Looking ahead, fewer businesses indicated planned wage increases
than had been the case in recent months.
Prices
Businesses continued to report widespread hikes in input prices--particularly in manufacturing, wholesale
trade, and education & health. Contacts in almost all sectors anticipated further increases in the months
ahead, with a sizable number of contacts indicating that tariffs were driving up costs, particularly in the
manufacturing sector.
As for selling prices, however, fewer businesses than in recent months said they were raising their prices-
-particularly in the wholesale trade sector. One notable exception was in the education & health industry,
where contacts noted some acceleration in prices received. Retailers generally indicated that selling
prices have remained stable, with one contact noting widespread discounting on remaining summer
merchandise. A number of wholesale trade and transportation contacts said they planned to hike prices in
the months ahead.
Consumer Spending
Retail sales were mostly steady in July and August. While somewhat more retail contacts indicated
declining than increasing sales, a major retail chain noted that sales rose and were above plan in both
months, running 2-4 percent ahead of comparable 2017 levels. Sales at New York City stores slowed
slightly, but were still up moderately from a year earlier. Retailers in upstate New York reported that sales
were mostly soft in July but picked up in August.
Auto dealers in upstate New York reported that new vehicle sales were fairly soft in July, running below
year-ago levels, but showed signs of picking up in August. New vehicle inventories remained at or above
desired levels. Meanwhile, sales of used vehicles strengthened further. Dealers generally characterized
retail and wholesale credit conditions as being in good shape, though one contact reported some pullback
toward the lower end of the retail credit market.
Consumer confidence in the Middle Atlantic states (NY, NJ, PA) retreated from a cyclical high, based on
the Conference Board's survey, though the public's assessment of the job market climbed to new highs.
Manufacturing and Distribution

Manufacturers indicated that activity continued to expand at a brisk pace since the last report.
Transportation firms reported modest growth, while wholesale distributors noted a typical seasonal
slowdown in growth. Regarding the near-term business outlook, wholesale distributors and manufacturers
expressed ongoing optimism, while transportation industry contacts have become less upbeat. A sizable
number of contacts in these sectors noted that recent hikes in tariffs have raised their overall input costs,
and some have expressed concern about the effects of changes in trade policy on various aspects of
their business. One utility firm noted that tariffs on some construction materials may force them to scale
back capital investment a bit.

Services
Service-sector firms reported mixed results in the latest reporting period. Businesses in the education &
health service sector noted a pickup in activity, whereas contacts in information and professional &
business services indicated that activity continued to expand at a subdued pace. Businesses in leisure &
hospitality reported a slight dip in activity, though tourism in New York showed continued strength, as
both hotels and Broadway theaters reported brisk business. Looking ahead, leisure & hospitality
businesses expressed growing optimism about the near-term outlook, and contacts in the service sector
generally remained sanguine. Information industry contacts were noticeably less upbeat than in the prior
report.
Real Estate and Construction

Housing markets across the District have been mixed but, on balance, softer since the last report. Home
sales activity dropped off sharply in New York City--especially in Manhattan. Selling prices have remained
mostly flat, though one real estate expert interpreted the drop-off in sales as suggesting a decline in
underlying values and partly attributes this to the new federal tax law. In contrast, housing markets in
parts of upstate New York have shown continued strength. One contact reported growing interest among
homebuyers in neighborhoods of Buffalo and Niagara Falls previously considered less desirable. There
was also said to be rising interest in renovating abandoned buildings in Albany, Troy, and Schenectady
for both homeownership and mixed-use development. The inventory of unsold homes has remained very
low across the District, though it has risen in New York City.
The apartment rental market has been mixed but generally steady. Rents have continued to drift down in
Manhattan but have been steady to somewhat higher in Brooklyn and Queens. Vacancy rates have
remained very low, as landlord concessions have remained widespread but not risen. Outside New York
City, apartment rents have continued to trend up modestly, running 2-3 percent ahead of a year earlier.
Commercial real estate markets have firmed slightly. Office availability rates declined modestly in
northern New Jersey, Westchester, and Fairfield counties. Office markets were steady in Manhattan and
upstate New York, but slackened modestly in Long Island. The market for industrial space continued to
strengthen, particularly in northern New Jersey, where availability rates fell to multi-year lows and rents
continued to climb, posting double-digit percentage gains from a year ago.
New multi-family construction starts reportedly slipped in recent weeks. New office construction has
picked up slightly but remains subdued, while there has been very little new industrial construction. In all
these categories, however, there continues to be a good deal of ongoing construction in progress.
Banking and Finance

Financial services firms reported increasingly robust growth in activity but were somewhat less optimistic
regarding the near-term outlook. Small to medium-sized banks reported higher demand for consumer
loans and residential mortgages, but flat demand for commercial mortgages and C&I loans. Refinancing
activity was reported to be steady. Bankers reported tighter credit standards for C&I loans, lower loan
spreads across all categories, and widespread increases in average deposit rates. Delinquency rates fell
across all loan categories.

Moody’s Economy.com Metropolitan Summary

The subject is located within the New York Metropolitan Statistical Area (MSA). The following pages are
taken from Moody’s Economy.com May 2018 Metropolitan Summary of the MSA.





Education
The public schools of New York City are under the management of the New York City Department of
Education, which serves over 1 million students, the most of any city in the nation. The school system is
made up of over 1,700 primary and secondary schools, as well as nine specialized high schools, which
were created to serve those students who are academically and artistically gifted.
New York City also holds the most students enrolled in a higher education institution, with over 120
colleges and universities providing education for over 600,000 students, of which over 500,000 are
enrolled in the City University of New York (CUNY) System as of 2014. The CUNY is a public system with
over 24 campuses in the 5 New York City Boroughs, with many different specialization opportunities.
Noteworthy private institutions that call New York City home are Barnard College, Columbia University,
Cooper Union, Fordham University, New York University, New York Institute of Technology, Pace
University, and Yeshiva University. Notable specialized institutions and religious universities include St.
John’s University, The Juilliard School, Manhattan College, The College of Mount Saint Vincent, The New
School, Pratt Institute, The School of Visual Arts, and Wagner College.
Government
New York City has had a mayor-council form of government since it became officially consolidated in
1898. The city government holds much more responsibility than most other American cities. The city
government is responsible for overseeing public education, correctional institutions, libraries, public
safety, recreational facilities, sanitation, water supply, and welfare services. Both the mayor and the
council members that serve the city are elected to four-year terms. The unicameral council is made up of
51 members elected by their respective districts.
The New York City Administrative Code explains the local laws. The Rules of the City of New York
explains local regulations established by the governing agencies.
Each borough in the city is its own district in the New York Supreme Court. Manhattan is host to the
Supreme Court Appellate Division, First Department, and Brooklyn is home to the Supreme Court
Appellate Division, Second Department.
Climate
New York City is considered to be a humid subtropical climate, making it the northernmost city in the
United States with this designation. It averages 57% of possible sunshine. Low temperatures are around
10 degrees Fahrenheit and high temperatures are around 50 degrees Fahrenheit in the winters, with an
average of 32.6 degrees Fahrenheit in January. Average summertime temperature is 76.5 degrees
Fahrenheit. The record low temperature is -15 degrees Fahrenheit recorded on February 9, 1934 and the
record high temperature was 106 degrees Fahrenheit recorded on July 9, 1936. The rainfall in the city is
generally spread throughout the year, with average annual precipitation of almost 50 inches.

Summary
According to Moody’s Economy.com, the best days of the expansion are behind New York-Jersey City-
White Plains. As financial markets and commercial property prices come back to Earth, incomes will take
a hit. This will put further downward pressure on consumer industries and city finances. In the long run,
slowing population gains and extremely high costs will keep growth in check.

RETAIL MARKET OVERVIEW
Introduction
The subject is located in Florham Park, New Jersey which is located within the overall Northern New
Jersey retail market. The subject property is specifically located in the Morristown Region Submarket
according to CoStar. The following analysis is based upon primary data obtained from conversations with
individuals active in the market and the Costar Mid-Year 2018 report. All data utilized within this analysis
are based upon the most recent data available from the respective sources.
Figure 2 – Northern New Jersey Market Overview
Overview
The Northern New Jersey retail market did not experience much change in market conditions in the
second quarter 2018. The vacancy rate remained at 4.5% in the current quarter from the previous quarter.
Net absorption was positive 207,610 square feet, and vacant sublease space decreased by (425) square
feet. Quoted rental rates increased from first quarter 2018 levels, ending at $21.51 per square foot per
year. A total of 10 retail buildings with 202,275 square feet of retail space were delivered to the market in
the quarter, with 3,975,674 square feet still under construction at the end of the quarter.

Net Absorption
Retail net absorption was slightly positive in Northern New Jersey second quarter 2018, with positive
207,610 square feet absorbed in the quarter. In first quarter 2018, net absorption was positive 1,131,009
square feet, while in fourth quarter 2017, absorption came in at positive 515,805 square feet. In third
quarter 2017, positive 1,008,257 square feet was absorbed in the market.
Tenants moving out of large blocks of space in 2018 include: Sears moving out of 109,745 square feet at
Phillipsburg Mall; Bergner’s moving out of 75,000 square feet at Phillipsburg Mall; and Toys “R” Us
moving out of 70,468 square feet at The Elizabeth Center at 13A.
Tenants moving into large blocks of space in 2018 include: At Home moving into 82,149 square feet at 77
Willowbrook Blvd; and Target moving into 65,106 square feet at Troy Hills Shopping Center for their
second small-format location; and Whole Foods moving into 50,000 square feet at 100 Chimney Rock Rd.
Vacancy
Northern New Jersey’s retail vacancy rate changed in the second quarter 2018, ending the quarter at
4.5%. Over the past four quarters, the market has seen an overall decrease in the vacancy rate, with the
rate going from 4.7% in the third quarter 2017, to 4.6% at the end of the fourth quarter 2017, 4.5% at the
end of the first quarter 2018 to the current quarter. The amount of vacant sublease space in the Northern
New Jersey market has trended down over the past four quarters. At the end of the third quarter 2017,
there were 284,448 square feet of vacant sublease space. Currently, there are 277,244 square feet
vacant in the market.
Largest Lease Signings

The largest lease signings occurring in 2018 included: the 94,500-square-foot-deal signed by At Home at
1930 Route 88; the 50,000-square-foot-lease signed by Dick’s Sporting Goods at Stafford Park - Phase I;
and the 49,757 square-foot-deal signed by SuperFresh at Tano Mall.

Rental Rates
Average quoted asking rental rates in the Northern New Jersey retail market are up over previous quarter
levels, and up from their levels four quarters ago. Quoted rents ended the second quarter 2018 at $21.51
per square foot per year. That compares to $21.29 per square foot in the first quarter 2018, and $20.71
per square foot at the end of the third quarter 2017. This represents a 1.0% increase in rental rates in the
current quarter, and a 3.72% increase from four quarters ago.
Inventory & Construction

During the second quarter 2018, 10 buildings totaling 202,275 square feet were completed in the
Northern New Jersey retail market. Over the past four quarters, a total of 1,431,669 square feet of retail
space has been built in Northern New Jersey. In addition to the current quarter, 33 buildings with 698,245
square feet were completed in first quarter 2018, 13 buildings totaling 97,110 square feet completed in
fourth quarter 2017, and 434,039 square feet in 11 buildings completed in third quarter 2017.
There were 3,975,674 square feet of retail space under construction at the end of the second quarter
2018.
Some of the notable 2018 deliveries include: 319 Chimney Rock Rd, a 121,850-square-foot facility that
delivered in first quarter 2018 and is now 84% occupied, and 1235 W Chestnut St, a 111,250-square-foot
building that delivered in first quarter 2018 and is now 74% occupied.
Total retail inventory in the Northern New Jersey market area amounted to 411,832,655 square feet in
41,221 buildings and 2236 centers as of the end of the second quarter 2018.
Shopping Center Market

The Shopping Center market in Northern New Jersey currently consists of 2121 projects with
101,886,646 square feet of retail space in 3,137 buildings. In this report the Shopping Center market is
comprised of all Community Center, Neighborhood Center, and Strip Centers.
After absorbing 164,300 square feet and delivering 30,917 square feet in the current quarter, the
Shopping Center sector saw the vacancy rate go from 7.7% at the end of the first quarter 2018 to 7.5%
this quarter.
Over the past four quarters, the Shopping Center vacancy rate has gone from 8.1% at the end of the third
quarter 2017, to 7.8% at the end of the fourth quarter 2017, to 7.7% at the end of the first quarter 2018,
and finally to 7.5% at the end of the current quarter.
Rental rates ended the second quarter 2018 at $20.77 per square foot, up from the $20.63 they were at
the end of first quarter 2018. Rental rates have trended up over the past year, going from $19.81 per
square foot a year ago to their current levels.
Net absorption in the Shopping Center sector has totaled 1,153,046 square feet over the past four
quarters. In addition to the positive 164,300 square feet absorbed this quarter, positive 557,581 square
feet was absorbed in the first quarter 2018, positive 264,587 square feet was absorbed in the fourth
quarter 2017, and positive 166,578 square feet was absorbed in the third quarter 2017.

Power Centers
The Power Center average vacancy rate was 4.1% in the second quarter 2018. With negative (33,250)
square feet of net absorption and no new deliveries, the vacancy rate went from 4.0% at the end of last
quarter to 4.1% at the end of the second quarter.
In the first quarter 2018, Power Centers absorbed positive 123,809 square feet, delivered no new space,
and the vacancy rate went from 4.4% to 4.0% over the course of the quarter. Rental started the quarter at
$18.54 per square foot and ended the quarter at $21.45 per square foot.
A year ago, in second quarter 2017, the vacancy rate was 4.5%. Over the past four quarters, Power
Centers have absorbed a cumulative 104,516 square feet of space with no deliveries. There was no
sublease space over that same period, and rental rates have gone from $20.23 to $19.11.
At the end of the second quarter 2018, there was no space under construction in the Northern New
Jersey market. The total stock of Power Center space in Northern New Jersey currently sits at 31,418,079
square feet in 75 centers comprised of 424 buildings.
No space was under construction at the end of the second quarter 2018.
General Retail Properties

The General Retail sector of the market, which includes all freestanding retail buildings, except those
contained within a center, reported a vacancy rate of 3.8% at the end of second quarter 2018. There was
a total of 9,316,987 square feet vacant at that time. The General Retail sector in Northern New Jersey
currently has average rental rates of $22.09 per square foot per year. There are 1,009,762 square feet of
space under construction in this sector, with 171,358 square feet having been completed in the second
quarter. In all, there are a total of 37,531 buildings with 245,435,909 square feet of General Retail space
in Northern New Jersey.
Sales Activity
Tallying retail building sales of 15,000 square feet or larger, Northern New Jersey retail sales figures fell
during the first quarter 2018 in terms of dollar volume compared to the fourth quarter of 2017.
In the first quarter, 25 retail transactions closed with a total volume of $167,806,750. The 25 buildings
totaled 1,112,948 square feet and the average price per square foot equated to $150.78 per square foot.
That compares to 28 transactions totaling $212,296,333 in the fourth quarter 2017. The total square
footage in the fourth quarter was 1,531,897 square feet for an average price per square foot of $138.58.
Total retail center sales activity in 2018 was down compared to 2017. In the first three months of 2018,
the market saw 25 retail sales transactions with a total volume of $167,806,750. The price per square foot
averaged $150.78. In the same first three months of 2017, the market posted 34 transactions with a total
volume of $326,902,200. The price per square foot averaged $164.10.
Cap rates have been lower in 2018, averaging 6.66% compared to the same period in 2017 when they
averaged 7.00%.

One of the largest transactions that has occurred within the last four quarters in the Northern New Jersey
market is the sale of Mall at Mill Creek, 1-31 Mill Creek Dr, in Secaucus. This 312,457 square foot retail
center sold for $76,000,000, or $243.23 per square foot. The property sold on 9/12/2017, at a 6.35% cap
rate.
Figure 3 – Submarket Map
The Morristown Region Submarket – Shopping Centers

According the to the CoStar Mid-Year 2018 report, the subject is situated within the Morristown Region
Submarket. As of the current quarter, the subject market has 20 retail centers containing a total of
1,056,859 SF NRA. Overall vacancy was 6.1% with a total of 64,369 SF of unoccupied space. Year to
date net absorption has been positive at 6,340 SF. No shopping center space was delivered to this
submarket year-to-date, and there are currently no shopping centers under construction in this
submarket. The average quoted rental rate for shopping centers in the subject market is $33.89/SF which
is higher than the overall Northern New Jersey rental rate of $20.77/SF.

Conclusion
The Northern New Jersey retail market did not experience much change in market conditions in the
second quarter 2018. The vacancy rate remained at 4.5% in the current quarter from the previous quarter.
Net absorption was positive 207,610 square feet, and vacant sublease space decreased by (425) square
feet. Quoted rental rates increased from first quarter 2018 levels, ending at $21.51 per square foot per
year. A total of 10 retail buildings with 202,275 square feet of retail space were delivered to the market in
the quarter, with 3,975,674 square feet still under construction at the end of the quarter.
The subject is located in the Morristown Region submarket, which, according to the Costar Mid-Year 2018
report, has a total of 387 retail projects containing a total of 3,498,018 SF of space including shopping
centers, power centers, malls, and all freestanding retail buildings. The overall vacancy for this submarket
is 4.2% for all retail types and 6.1% for shopping centers.
Local Rental Analysis

Summary of Comparable Rentals
Distance Relation to YOC/ Rent/ Lease
No. Name - Location Anchor Tenants from Subject Subject Size (SF) YOR Occup. SF ($) Type
Village Town Center King's Supermarket, CVS, Starbucks, Kids Across Street Similar 56,600 1961/2018 66% $32.00-40.00 NNN
1
Florham Park Plus
416-420 State Route 10 Party City, Amazing Savings, Carpet Mill, 1.75 Inferior 35,000 1970/2004 100% $17.00-50.00 NNN
2
East Hanover Planet Fitness
West Caldwell Plaza TJ Maxx, ShopRite, CVS, Radio Shack, 6.48 Similar 141,302 1959/1995 92% $30.00-34.00 NNN
3
West Caldwell Starbucks, KFC
The Corner at Livingston Center Starbucks, Shake Shack 2.40 Similar 13,000 2017 100% $48.00-50.00 NNN
4
Livingston
The Shoppes at Livingston Circle The Fresh Market, GameStop, Olive 2.49 Similar 101,000 1993 78% $23.00-33.00 NNN
5
Livingston Garden
Castle Ridge Plaza Best Buy, Michael's, Dollar Tree, Chipotle, 1.60 Similar 150,000 1984/2004 100% $30.00-33.00 NNN
6
East Hanover Smashburger
Florham Park Plaza 64,683 1977/2010 100% $36.71 NNN
Based on discussions with local listing brokers, the subject is well located and well configured in the
subject submarket with adequate frontage and exposure along the fronting roadways. According to local
brokers, the subject has historically been able to command among the highest rental rates in the area.
The subject is currently 100% occupied, with rental rates above the average for shopping centers in the
submarket at $36.71/SF vs. $33.89/SF. The outlook for this market is one of continued commercial
growth that will be supported by the growing population base.

TRADE AREA/ANCHOR PROFILE ANALYSIS
Introduction
A retail center's trade area contains people who are likely to patronize that particular center, and its ability
to draw these people comes from the strength of the anchor tenants, complemented by regional and local
tenants. Customers are drawn by a given class of goods and services, and a successful combination of
these elements creates a destination for customers seeking both variety and the comfort and
convenience of an integrated shopping environment.
To define and analyze the market potential for Florham Park Plaza, we must first establish the boundaries
of the trade area from which customers will be drawn. In some cases, defining the trade area may be
complicated by the existence of other retail facilities on main thoroughfares in trade areas that are not
clearly defined or whose trade areas overlap with that of the subject.
Once the trade area is defined, the area's demographics and economic profile can be analyzed, providing
key insight into the area's potential for the subject.
Scope of Trade Area

To define trade area we must thoroughly review the retail market and the competitive structure of the
general marketplace, as well as the subject's position within that marketplace. The subject property’s
position within the area’s retail structure will be further examined by profiling the stores that anchor the
subject.
Anchor Profiles
Below are profiles of the primary stores that anchor the subject development:
Trader Joe’s
Trader Joe's is an American privately held chain of specialty grocery stores headquartered in Monrovia,
California, in Greater Los Angeles. As of 22 April 2015, Trader Joe's had a total of 457 stores.
Approximately half of its stores are in California, with the heaviest concentration in Southern California,
but the company also has locations in 38 other states and Washington, D.C. It is a market leader in
organic and fresh food groceries in the United States.
Trader Joe's was founded by Joe Coulombe and has been owned since 1979 by a German family trust
established by Aldi Nord's owner Theo Albrecht. The chain has over 10,000 employees with 2014
revenues of $12 billion.
Trader Joe’s is not rated by Standard & Poor’s.
Walgreens
Walgreens Co. is represented on the New York Stock Exchange by ticker WAG. Walgreens was founded
in 1901 and is headquartered in Deerfield, Illinois. Walgreens Co. is the largest drug retailing chain in the

TRADE AREA /ANCHOR PROFILE ANALYSIS
United States of America. As of April 30th, 2014, the company operates 8,699 locations across all 50
states, the District of Columbia and Puerto Rico. Founded in Chicago, Illinois in 1901, it has since
expanded throughout the United States. Walgreens is currently headquartered in the nearby suburb of
Deerfield, Illinois. Most stores offer drive-through pharmacies and almost all offer one-hour photo
processing. In a strategy switch, Walgreen recently bought online retailer drugstore.com in 2011 and
Duane Reade in 2010. Walgreen Co. employs 248,000 full-time.
Walgreens is rated BBB, Outlook Stable, by Standard & Poor’s.
Dress Barn
Dress Barn is an American retailer of women’s clothing based in Mahwah, New Jersey. Founded in
Stamford, Connecticut in 1962 by Roslyn Jaffe, the chain had approximately 3,900 locations in 2014. In
2011 the company was reorganized as Ascena Retail Group, Inc., which also owns the Maurices, Justice,
Lane Bryant, and Catherines clothing store brands.
The Dress Barn brand targets women ages 35–50. Dress Barn, Dress Barn Woman (larger sizes), and
combination stores sell in-season women's apparel and accessories at value prices and cater to
professional women. Chairman Elliot Jaffe and his wife and co-founder, Roslyn, own about 25% of The
Dress Barn. The company employs 14,000.
The Ascena Group is rated B, Outlook Negative by Standard & Poor’s.
Quality and Duration of Tenancy

Several tenants have been in this center for over a decade. An overview of each tenant’s tenure is
provided below:
Years at
Tenant Location Total SF
Walgreens 8 13,101
Trader Joe's 8 11,835
The Dress Barn 11 7,034
Chop't 1.5 2,911
McDonald's 7 4,362
Kyoto 24 4,300
Nonna's 10 4,187
Dunkin' Donuts 14 2,731
Qdoba 8 2,430
Firehouse Subs 2 2,200
Your Verizon 6 2,139
BOM Nails 7 2,000
Modern Acupuncture 0 2,000
North Jersey Lash 1.5 2,053
Sport Clips 1 1,400

Co-Tenancy Clauses
The subject has one tenant whose lease includes a co-tenancy clause, as summarized below.
Co-Tenancy/Go Dark Clauses
If 65% of the gross leasable area of the Shopping Center

(excluding tenant's premises) is not open and operating, such
condition shall be considered an "Ongoing Co-Tenancy Violation,"
and Tenant shall have the right to pay an amount equal to the
greater of 50% of Annual Minimum Rent and Annual Charges
Dress Barn then due, or 5% of Gross Sales, in lieu of Annual Minimum Rent,
Percentage Rent, and Additional Charges. If said violation
continues for a period of 12 consecutive months or more, Tenant
shall have the right to cancel and terminate this Lease upon 30
days notice; otherwise Tenant shall recommence payment of
Annual Minimum Rent, Percentage Rent, and Additional Charges
after the end of the 12 month period.
Retail Sales
Two tenants in this shopping center, Dress Barn and Walgreens, have percentage rent clauses requiring
them to report retail sales. Data on these sales was not provided to the appraiser; however, it was
reported that the two tenants have not historically paid percentage rent.
Credit Ratings
The tenant credit ratings for the subject’s credit-rated tenants are presented below:
S&P Credit Rates

Walgreens BBB/Stable
Dress Barn B/Negative
Citibank A+/Stable
McDonald's BBB+/Stable
Trade Area Analysis

According to Moody’s Economy.com, New York-Jersey City-White Plains is at cruising altitude, and it is
not time for the landing gear to drop just yet. Upward revisions pushed job growth ahead of the national
pace last year, and the unemployment rate has fallen below that of the state for the first time since the
Great Recession. While white-collar industries are growing, thanks in part to surging tech investment,
healthcare is setting the pace, moving low-wage industries to the fore. The housing market is mixed. A
glut of high-end condos has slowed multifamily construction, but single-family is strengthening. In fact, the
single-family Case-Shiller index outpaced the condo index last year for the first time since 2009.

Trending Forward
The best days of the expansion are behind New York-Jersey City-White Plains. As financial markets and
commercial property prices come back to Earth, incomes will take a hit. This will put further downward
pressure on consumer industries and city finances. In the long run, slowing population gains and
extremely high costs will keep growth in check.
Market Considerations
We considered several factors in defining boundaries for the subject's trade area. First, the property's
location with respect to transportation provides the basis for regional access to the area. Second,
competition and geographic boundaries help to define the potential size of the trade area as a measure of
distance from the property. Third, the merchandising mix and anchor alignment provides the basic draw
of customers that are likely to patronize the property.
Florham Park Plaza is located in the New York City metro area and benefits from good regional and local
accessibility, as well as the proliferation of peripheral draws. Major roadway proximity to the center
provides the necessary access to more regional destinations throughout the area while the property’s
long established anchor stores provide the necessary drawing power for the property.
The subject property is located in the central portion of Florham Park and has very good visibility and
access from Columbia Turnpike, a strong commercial corridor in the market area.
The property is currently 100.00% occupied with the previously mentioned national tenants, as well as
numerous other national and local credit tenants. The property is located on 7.52 acres and contains 312
parking spaces, which meets the minimum number of spaces mandated by the town planning
department.
The subject location affords good population density and is sufficiently developed with a mixture of
commercial properties, and single family residential developments. Columbia Turnpike is one of the
stronger commercial traffic carriers in Florham Park, with very good traffic exposure.
We analyzed the subject's trade area based on the following:
• Highway accessibility, including area traffic patterns, geographical constraints, and nodes of
residential development;
• The position and nature of the area's retail structure, including the location of destination retail
centers which compete with the subject and the strength and composition of the retail infill; and
• The size, anchor tenancy, and merchandising composition of the subject property's tenants.
Given all of the above, we believe the subject property’s primary trade area would likely span an area up
to 5 miles around the subject. The subject's secondary trade area might span up to 10 miles from the site
given its accessibility, location of competitive properties, and based on the opinion of local brokers.

Using these observations, we analyzed a primary demographic profile for the subject based on a radius of
approximately one mile from the property. To add perspective to this analysis, we segregated our survey
into one, three, and five mile concentric circles. This data is presented on the following page.
COMPARATIVE DEMOGRAPHIC ANALYSIS FOR PRIMARY TRADE AREA
1 Mile Radius 3 Mile Radius 5 Mile Radius

Description Totals Totals Totals
Population
2023 Projection 5,335 47,729 148,601
2018 Estimate 5,261 47,221 146,647
2010 Census 5,148 46,426 143,580
2000 Census 4,505 42,607 135,273
2018 Est. Median Age 43.67 41.98 42.41
2018 Est. Average Age 42.47 41.11 41.02
Households
2023 Projection 2,119 16,887 54,029
2018 Estimate 2,089 16,685 53,157
2010 Census 2,051 16,394 51,752
2000 Census 1,833 14,946 48,839
2018 Est. Average Household Size 2.50 2.61 2.66
2018 Est. Households by Household Income
Income Less than $15,000 4.6 4.3 4.1
Income $15,000 - $24,999 5.6 5.6 4.9
Income $25,000 - $34,999 3.6 4.0 4.1
Income $35,000 - $49,999 6.3 5.4 5.8
Income $50,000 - $74,999 7.0 10.4 10.7
Income $75,000 - $99,999 11.7 9.8 9.8
Income $100,000 - $124,999 10.4 9.2 9.1
Income $125,000 - $149,999 6.9 7.8 7.8
Income $150,000 - $199,999 10.2 12.5 11.8
Income $200,000 - $249,999 6.8 7.5 7.1
Income $250,000 - $499,999 12.7 12.2 12.5
Income $500,000 and more 14.3 11.5 12.3
2018 Est. Average Household Income $198,296 $186,133 $190,127
2018 Est. Median Household Income $127,654 $129,054 $129,594
2018 Est. Tenure of Occupied Housing Units
Owner Occupied 73.5 76.4 75.0
Renter Occupied 26.5 23.6 25.1
2018 Est. Median All Owner-Occupied Housing Value $634,889 $612,632 $612,641
Source: 2018 Claritas, Inc.
Population
Having established the subject’s trade area, our analysis focuses on the trade area's population. Claritas,
Inc. provides historical, current and forecasted population estimates for the total trade area. Patterns of
development density and migration are reflected in the current levels of population estimates.
Between 2000 and 2018, Claritas, Inc., reports that the population within the 1-mile radius increased by
16.78 percent. The population growth within the primary trade area (5-miles radius) was 8.41 percent
between 2000 and 2018. This is characteristic of strong, established suburban areas across the US. This
trend is expected to continue into the foreseeable future. Looking forward, population in the 5-mile radius
is expected to increase by only 1.33 percent over the next five years.
The graphic on the following page illustrates the 1, 3, and 5 mile radii.

Households
A household consists of a person or group of people occupying a single housing unit, and is not
necessarily a family unit. When an individual purchases goods and services, these purchases are a
reflection of the entire household’s needs and decisions, making the household a critical unit to be
considered when reviewing market data and forming conclusions about the trade area as it impacts the
retail center.
Figures provided by Claritas, Inc. indicate that the number of households is increasing at a faster rate
than the growth of the population. Several changes in the way households are being formed have caused
this acceleration, specifically:
• The population is living longer on average. This results in an increase of single- and two-person
households;
• Higher divorce rates have resulted in an increase in single-person households; and
• Many individuals have postponed marriage, also resulting in more single-person households.
According to Claritas, Inc., the number of households in the Primary Trade Area (5-mile radius) increased
by 8.84 percent between 2000 and 2018. Consistent with national trends, the trade area is experiencing
household changes at a rate that varies from population changes. That pattern is expected to continue
through 2023, with an estimated growth of 1.64 percent over 5 years.

According to the latest demographic figures, the subject market (within a 5-mile radius) is primarily
comprised of a white collar workforce with 80.20% of the community engaged in
Office/Professional/Business employment, 12.12% in the Service and Farm industries, and 7.68% in Blue
Collar professions. Among the community, 62.06% possesses a Bachelor’s degree or higher, 15.04%
have “some college” experience, 17.48% are high school graduates, and 5.43% have received no high
school diploma. The income of the 5 mile radius reveals a community of upper income earners with an
average household income of $190,127, and a median household income of $129,594.
Correspondingly, a greater number of smaller households with fewer children generally indicates more
disposable income. In 2018, it’s estimated that there are 2.66 persons per household in the Primary
Trade Area.
Trade Area Income

Income levels either on a per capita, per family or household basis indicates that the economic level of
the residents of the trade area form an important component of this total analysis. Average household
income, when combined with the number of households, is a major determinant of an area's retail sales
potential. Trade area income figures for the subject support the profile of a broad upper-income market.
According to Claritas, Inc., average household income in the primary trade area (5-mile radius) in 2018
was $190,127. During the same time frame, the average household income in the 1-mile radius was
$198,296.
Further analysis shows a distribution that is predominantly in the mid to upper income brackets. This
information is summarized as follows:

Income Less than $15,000 4.6 4.3 4.1
Income $15,000 - $24,999 5.6 5.6 4.9
Income $25,000 - $34,999 3.6 4.0 4.1
Income $35,000 - $49,999 6.3 5.4 5.8
Income $50,000 - $74,999 7.0 10.4 10.7
Income $75,000 - $99,999 11.7 9.8 9.8
Income $100,000 - $124,999 10.4 9.2 9.1
Income $125,000 - $149,999 6.9 7.8 7.8
Income $150,000 - $199,999 10.2 12.5 11.8
Income $200,000 - $249,999 6.8 7.5 7.1
Income $250,000 - $499,999 12.7 12.2 12.5
The previous chart makes it clear that the distribution of income is concentrated in the mid-high level
range for the trade area. The average household income in the 5-mile radius was $190,127 according to
the Claritas 2018 report.
Conclusion
We analyzed the retail trade history and profile of the subject's region and primary trade area in order to
make reasonable assumptions regarding the continued performance of the property.

A metro and locational overview was presented which highlighted important points about the study area.
Demographic and economic data specific to the trade area were also presented. Marketing information
relating to these sectors was presented and analyzed in order to determine patterns of change and
growth as it impacts Florham Park Plaza.
The data quantifies the dimensions of the total trade area, while our comments provide qualitative insight
into this market. A compilation of this data forms the basis for our projections and forecasts for the subject
property. The following are our key conclusions.
• The better located and well configured shopping centers in the Northern New Jersey market tend
to have high occupancy rates and higher rental rates. The subject is considered to be in a highly
desirable location as reflected by the current occupancy level.
• The subject neighborhood is a developed and established suburban area that exhibits
commercial and residential density characteristics typical of the northeast region. The subject is
specifically located at the northeast corner of Columbia Turnpike and James Street, in an area
that is home to several retail developments. Competing shopping centers within the immediate
area include the 56,600 SF Florham Park Village Shopping Center, which is located across the
street from the subject at the southwest corner of Columbia Turnpike and Ridgedale Avenue. This
center was constructed in 1961 and renovated in 2007. Major tenants include CVS, Starbucks,
and Kids Plus. The remaining center is occupied by a mixture of national and local credit retailers.
Recent leasing at this center has been done at $32 to $36/SF for inline space.
• The subject’s tenant alignment is perceived with overall positive ratings. The property benefits
from the draw of the anchors coexisting in one center for the benefit of the customer.
• As such, we believe the property will serve a market encompassing a radius of 5 miles and up to
10 miles. Over the next five years, both the population and number of households in the subject’s
trade area are projected to increase. Household income levels are more than sufficient to support
the center and the surrounding regional anchor tenants.
• The subject has good accessibility via the metro highway network and local arterials that provide
linkages throughout the greater New York area.
• Based on our analysis we concluded that the subject is well positioned within its market area and
the prospect for net appreciation in real estate values is expected to be very good.

NEIGHBORHOOD ANALYSIS
Introduction
A neighborhood is “the defined geographic area in which the subject property competes for the attentions
of market participants; the term broadly defines an area containing diverse land uses.” Neighborhood
areas are defined by a combination of factors including physical features the demographic and
socioeconomic characteristics of the residents or tenants, the condition of the improvements, and land
use trends. Neighborhood analysis focuses on the identification of a neighborhood’s boundaries and the
social, economic, governmental and environmental influences that affect the value of real property within
those boundaries. In conducting neighborhood analysis, the competitive supply and demand for the
subject property is more directly addressed.
The purpose of a neighborhood analysis is to provide a bridge between the study of general influences on
all property values and the analysis of a particular subject. Neighborhood boundaries are identified by
determining the area in which the four forces that affect value (social, economic, governmental and
environmental) operate in the same way they affect the subject property. Interaction of the various
components influencing these four forces often results in the dissimilarities regarding the length of time
between the stages of a neighborhood’s life cycle.
Figure 4: Neighborhood Map
General Description
The property is located in the Route 10/South Parsippany neighborhood, a suburban area of low
population density in the outer suburbs of Northern New Jersey.

For the purposes of analysis, the neighborhood can be considered to be bounded by Interstate 280 to the
north, State Route 24 to the south, Interstate 287 to the west, and Route 649 to the east. The area
includes the boroughs of Florham Park, Hanover, East Hanover, and portions of Livingston and
Roseland.
The area is characterized by upscale residential development. Commercial facilities including a wide
range of retail developments concentrated along Route 10, with scattered other centers. There are no
detrimental land uses in the neighborhood.
Access And Major Roadways

Major east/west access to the area is provided by Interstate 280 which runs east to Newark and
Manhattan via the Holland Tunnel, and west to Interstates 80 and 287, which form parts of a western ring
around the metro area. Interstate 80 continues westward to Cleveland and Chicago, and runs east to its
junction with Interstate 95 and the George Washington Bridge to Manhattan. Additional east/west access
is provided by Route 24, which runs west to Interstate 287 and east via Interstate 78 to Newark Airport.
North/south access is provided by the aforementioned Interstate 287, which heads south to Bridgewater
where it connects with Interstate 78 and northeast to the Hudson River and White Plains, New York.
Intra-neighborhood access is provided chiefly by Route 10 running east/west and Route 649 running
north/south on the east side of the neighborhood. Additional access is provided by a web of roadways
that interconnect in seemingly random fashion, including Routes 622, 607, 609, and 632.
Additional access is provided by tertiary roadways in residential neighborhoods and business parks.
Land Use Patterns

The primary land use in the area is single-family residential located in subdivisions across the
neighborhood. Multi-family developments are infrequent and generally in close proximity to highways.
Retail development is focused along Route 10, with additional retail centers on the Columbia Turnpike,
Eisenhower Parkway, and Jefferson Road on the west side of the neighborhood. Office development is
represented by office parks located heavily along Interstate 287 and Jefferson Road, as well as along
Route 10 and scattered elsewhere. Industrial development is typified by light manufacturing facilities and
distribution centers, again concentrated along Jefferson Road and Route 10. Additional uses in the area
include schools, an airport, and multiple golf courses.
Life Stages and Trends

The neighborhood is at a stable stage of its life cycle, with growth projections at the 1 and 3 mile radii
(most relevant to the neighborhood) being minimal for the next five years. Growth is slow due to a lack of
available land supply, with the neighborhood having largely reached maturity a decade ago and zoning
and development restrictions limiting densification, although growth continues at a modest rate. The area
represents for many of its residents a low-density alternative to larger cities surrounding, especially to the
east.

COMPARATIVE DEMOGRAPHIC ANALYSIS FOR PRIMARY TRADE AREA

Population
2023 Projection 5,335 47,729 148,601
2018 Estimate 5,261 47,221 146,647
2010 Census 5,148 46,426 143,580
2000 Census 4,505 42,607 135,273
2018 Est. Median Age 43.67 41.98 42.41
2018 Est. Average Age 42.47 41.11 41.02
Households
2023 Projection 2,119 16,887 54,029
2018 Estimate 2,089 16,685 53,157
2010 Census 2,051 16,394 51,752
2000 Census 1,833 14,946 48,839
2018 Est. Average Household Size 2.50 2.61 2.66
Income Less than $15,000 4.6 4.3 4.1
Income $15,000 - $24,999 5.6 5.6 4.9
Income $25,000 - $34,999 3.6 4.0 4.1
Income $35,000 - $49,999 6.3 5.4 5.8
Income $50,000 - $74,999 7.0 10.4 10.7
Income $75,000 - $99,999 11.7 9.8 9.8
Income $100,000 - $124,999 10.4 9.2 9.1
Income $125,000 - $149,999 6.9 7.8 7.8
Income $150,000 - $199,999 10.2 12.5 11.8
Income $200,000 - $249,999 6.8 7.5 7.1
Income $250,000 - $499,999 12.7 12.2 12.5
Income $500,000 and more 14.3 11.5 12.3
2018 Est. Average Household Income $198,296 $186,133 $190,127
2018 Est. Median Household Income $127,654 $129,054 $129,594
2018 Est. Tenure of Occupied Housing Units
Owner Occupied 73.5 76.4 75.0
Renter Occupied 26.5 23.6 25.1
2018 Est. Median All Owner-Occupied Housing Value $634,889 $612,632 $612,641
Source: 2018 Claritas, Inc.
Public Facilities/Services
The neighborhood is adequately serviced by all public utilities and services, as summarized in the
following table.
Utility / Service Providers

Sewer/Water Florham Park Borough
Telephone AT&T/Verizon/Various
Electricity PSE&G
Gas PSE&G
Police/Fire Florham Park Borough
Education Florham Park School District

Conclusions
The subject neighborhood is the Route 10/South Parsippany area, a low-density residential area in the
outer suburbs of Northern New Jersey with a significant commercial presence. After analyzing the various
factors affecting the surrounding areas, it appears that the neighborhood will remain a suburban
community with a stable population base for the foreseeable future. Growth and development for the
neighborhood will be influenced by the ongoing national economic recovery.

SITE ANALYSIS
Figure 5: Survey
Physical Characteristics
General Description
The subject property is located at 176 Columbia Turnpike, on the northeast corner of Columbia Turnpike
and James Street, in the Borough of Florham Park, Morris County, New Jersey. It includes a shopping
center located on a single tax parcel. The subject is anchored by Walgreens and Trader Joe’s. The
remaining portions of the center are occupied by a mix of national and local credit retailers and service
providers.

SITE ANALYSIS
Figure 6: Aerial
Size/Shape/Dimensions
Based upon information provided to this office, the subject site contains a total of 7.52 acres (327,484
SF). According to our site inspection, the site has frontage along the north side of Columbia Turnpike and
the east side of James Street. The site is irregular in shape. For a graphical illustration of the subject site,
please refer to the preceding aerial and site plan.
Access/Visibility
Primary access to the shopping center is provided by two un-signalized curb cuts located on the north line
of Columbia Turnpike and three additional un-signalized curb cuts along the east line of James Street.
Columbia Turnpike is a four-lane, divided, east/west asphalt roadway with center lane that provides
access for motorists in the westward direction. James Street is a two-lane, undivided, north/south asphalt
roadway with direct access in both directions. Visibility to the site is considered to be good as it fronts
Columbia Turnpike and James Street. In addition, traffic capacity appears adequate; it is summarized as
follows:

SITE ANALYSIS
Traffic Count Summary

Daily
Location Date Count
Columbia Turnpike, W of Ridgedale Ave 2017 30,355
Columbia Turnpike, E of Ridgedale Ave 2017 21,676
Topography/Drainage
The topography of the site is characterized as level to gently sloping. Drainage of the site appears
adequate. The subject site is at level grade with the fronting roadways.
Floodplain
According to the Federal Emergency Management Agency, the subject is located on flood panel
3403420017E dated December 20, 2002. According to the flood map, the subject is located within Flood
Insurance Zone X. Zone X states that the property is located outside a known flood hazard area.
Figure 7: Flood Plain Map
Soil/Subsoil Conditions
A geo-technical analysis describing the soil and subsoil conditions at the site was not furnished to BBG,
Inc.; however, based on surrounding development, it appears that soil/subsoil stability is adequate for
development.

SITE ANALYSIS
Seismic Activity
A geological survey was not provided or obtained. BBG, Inc. is not qualified to determine if fault lines do
or do not affect the subject, and we recommend the acquisition of an engineering study relating to the
geological stability of the site and surrounding areas, if concerns are present.
Utilities/Services
All public utilities and services are currently available to the site. They are sufficient to support any new
and existing development. Utility providers were outlined within the Neighborhood Analysis section of this
report.
Manmade Improvements
The subject parcels is currently improved with a 64,683 square foot shopping center with asphalt drives
and 312 paved and lighted parking spaces.
Hazards/Nuisances
No major nuisances such as noise, smoke or other nuisances were observed on or near the subject
property.
Legal-Government Factors
Development Restrictions/Easements
Based upon a review of the survey provided to this office and a physical inspection of the site, the subject
property does not appear to be detrimentally impacted by easements or deed restrictions. Those that are
present constitute typical utility and access easements.
Locational Factors
Surrounding Land Uses
The neighborhood is an upper-income residential area in the outer portion of the New York/Northern New
Jersey MSA. The average home value in the 1-mile radius is $198,296, and the average home value in
the 5-mile radius is $190,127, which suggests a market comprised of relatively high income earners.
The subject property is located near other commercial properties. The subject is surrounded by a
shopping centers to the west, single family residential and an office building to the north, a restaurant to
the east, and shopping centers to the south. The neighborhood becomes predominantly single family
residential beyond this small retail cluster.
Competing shopping centers within the immediate area include the 56,600 SF Florham Park Village
Shopping Center, which is located across the street from the subject at the southwest corner of Columbia
Turnpike and Ridgedale Avenue, and the 101,000 SF Village at Livingston located on the west side of
Eisenhower Parkway near the rotary in Livingston.

SITE ANALYSIS
Transportation Facilities
Private vehicular transportation remains the most prevalent form of transportation within the
neighborhood.
Conclusion
The subject site is considered to have good locational characteristics due to its location at the northeast
corner of Columbia Turnpike and James Street and is well located in the overall Northern New Jersey
area. In addition, the subject has good visibility from the fronting roadways. Access to the subject site is
good and is provided by several curb cuts on both fronting roadways. Columbia Turnpike is a strong
commercial arterial within the immediate Florham Park neighborhood.

IMPROVEMENT ANALYSIS
Figure 8: Typical View of Improvements

General Description
The subject is known as Florham Park Plaza. The property includes an existing open neighborhood
shopping center with 64,683 square feet of gross leasable area (GLA).The center was constructed in
1977 with a renovation in 2010. A detailed description of the improvements follows.
A summary of the subject’s space allocation is presented within the following table.
Space Allocation Summary

Space
Occupied
Tenant (SF)
Walgreens 13,101
Trader Joe's 11,835
The Dress Barn 7,034
Chop't 2,911
McDonald's 4,362
Kyoto 4,300
Nonna's 4,187
Dunkin' Donuts 2,731
Qdoba 2,430
Firehouse Subs 2,200
Your Verizon 2,139
BOM Nails 2,000
Modern Acupuncture 2,000
North Jersey Lash 2,053
Sport Clips 1,400
Total 64,683

Figure 9 Site Plan
Legal Uses and Ratios

The improvements total 64,683 SF GLA, which results in a land to building ratio of 5.06:1 based on the
development site area of 7.52 acres.
Approximately 68.6% of the GLA is leased by the national credit tenants, 6.5% by regional tenants, and
the remainder by local credit tenants. The surface parking area provides 312 spaces resulting in a ratio of
1 Space/207 SF of gross leasable area, according to the site plan.
Construction Components
BBG, Inc. was not provided building plans for the subject. The construction components referenced
herein are based upon our inspection of the subject, a review of the site plan, and our experience with
similar retail buildings. The subject’s basic construction components are outlined as follows.
Exterior Description
Foundation The foundation is poured concrete slab floor.

Structural System Masonry block wall with open webbed steel truss system with steel joists
and girders. The column spacing varies by suite. Painted metal
downspouts and overflow openings.
Exterior Walls The exterior walls are brick with exposed concrete block in the rear.
Roof Flat rubber membrane, metal frame with metal deck.
Doors Entry doors are predominantly glass with metal frames. Rear service
doors are insulated metal in metal frames.
Storefront System All of the tenants have double glazed insulated storefront windows, wide
stile, aluminum entry doors with glass and hollow metal service doors in
the rear of the building. Large tenants are equipped with truck wells for
loading and unloading.
Height 1 story
Interior Description
Interior Walls Metal stud construction (typically 16” OC) with painted, tape and bedded
5/8” gypsum board construction; varying finishes include wallpaper,
wood paneling, vinyl, and ceramic tile.
Floor Covering Floors are a combination of finished concrete, ceramic and vinyl tile as
well as wood laminate and carpeting.
Ceilings Range from exposed web joists to suspended acoustical tiles in the well-
finished spaces.
Doors Glass, wood veneer, laminates and/or painted metal in metal frames.
Restrooms At least one restroom is provided for each suite.
Mechanical Systems
Heating/Cooling Roof-mounted, package electric air-conditioning and electric and/or gas
heating systems with exposed ducting and vents throughout.
Electrical Electrical is above-ground and is assumed to meet all applicable building

codes; average commercial quality assumed.
Plumbing Assumed to meet all applicable building codes; average commercial

quality assumed.

Miscellaneous
Quality Class C (Marshall Valuation)
Parking The parking curbs, gutters and drive/apron areas are concrete; the
parking areas are asphalt. The parking areas provide efficient traffic flow
and ample site drainage. The surface parking provides a total of 312
spaces (1 Space/207 SF).
Life Safety Several fire extinguishers and heat and smoke detection alarms are
located throughout the project. The building has a sprinkler system. Each
tenant is responsible for its security alarm system.
Landscaping Above average landscaping is located on-site.
Lighting Site lighting involves wall-mounted light packs on the buildings; wall-
washers on some sidewalks, and metal, monopole light fixtures in the
parking area.
Signage Street monument signage and building mounted internally illuminated

signs.
Quality/Condition
The subject is rated as good in regard to quality of construction for retail centers within the immediate
area. The subject improvements are constructed in a manner that is consistent with alternative, directly
competitive, substitute properties. Access is good due to the center’s location along the northeast corner
of Columbia Turnpike and James Street within the Northern New Jersey retail market. The improvements
were completed in 1977 with a 2010 renovation and are considered to be in good overall condition. No
deferred maintenance that requires capital expenditures is present. The overall condition of the
improvements is average compared to competing retail properties within the immediate area.
Depreciation Estimate
The subject improvements were originally completed in 1977, with a renovation in 2010. As such, the
improvements are impacted by physical deterioration, incurable. No functional or external obsolescence
is considered to be present. The subject has an estimated effective age of approximately 25 years with a
remaining economic life of 25 years.
Conclusion
The functional utility and design of the subject building is rated as good and suitable for market conditions
within the immediate retail market. The layout and design of the improvements on the sites are average
and are conducive to occupancy by retail tenants.

ZONING ANALYSIS
Introduction
Zoning, the regulation of the use of real property by local government, restricts a particular territory to
residential, commercial, industrial, or other uses. The local governing body considers the character of the
property as well as its fitness for particular uses. It must enact the regulations in accordance with a well-
considered and comprehensive plan intended to avoid arbitrary exercise of government power. A
comprehensive plan is a general design to control the use of properties in the entire municipality, or at
least in a large portion of it.
Specifications
The subject is zoned "B-1" - Business by Florham Park Borough, as verified by Marlene Rawson of the
borough zoning office. The intent of the Business Zone is to facilitate commercial uses of a modest scale
compatible with surrounding neighborhoods. Shopping centers are a permitted use in this district.
The primary building restrictions under the "B-1" - Business zoning classification are located within the
following table. All new construction in this designation is subject to site approval by the Florham Park
Borough planning office.
"B-1" - Business
Minimum Width: 150'
Maximum Building Coverage: 20%
Minimum Front Yard: 20'
Minimum Side Yard: 20' external, 10' internal
Minimum Rear Yard: 10'
Maximum Building Height: 35'
Parking 1 space per 200 SF of GFA for retail,
1 space per 3 seats for restaurant
According to our inspection, 312 spaces are provided including handicapped spaces. Based on the retail
square footage of 44,473 SF, the resulting requirement for retail space is 223 spaces. As the remaining
space is restaurant, where space requirements are based on number of seats, it is believed that the
provided parking is sufficient for current parking requirements, with a total of 267 seats allowable in the
center’s 6 restaurants before the limit is exceeded.
Conclusion
As the subject meets all use, parking, and dimensional regulations, the subject property appears to
represent a legal conforming use.

HIGHEST AND BEST USE
Analysis of Site as Vacant

Legally Permissible
Except for a legally nonconforming property, the first step in determining what is legally permissible is to
analyze private restrictions, zoning, building codes, historic district controls, and environmental
regulations.
The current zoning of the subject site in the "B-1" - Business district is conducive to a range of
commercial and retail uses. No restrictive covenants are known to exist that might preclude or limit use of
the site in a retail capacity. Additionally, there are no known restrictions, historic district controls, or
environmental regulations that restrict the subject in any unreasonable manner.
Physically Possible
The physical characteristics of a site can affect the uses. These characteristics include: (1) size;
(2) shape; (3) terrain or topography; (4) soil condition; (5) utilities; (6) access characteristics; and
(7) surrounding land uses. Each of these site characteristics was described and discussed in the Site
Analysis section of this report.
A number of uses are physically possible on the subject site. The 7.52 acre development site is level to
gently sloping and is at level grade with the fronting roadways. Soil and subsoil conditions appear
adequate for development as evidenced by area construction. Surrounding land uses include retail and
office developments. From a development standpoint, the location and visibility of the site are very good.
The subject’s proximity to other commercial uses in a strong retail corridor suggests its utility for retail
uses. Public utilities and traffic carriers are provided and are adequate in capacity. The subject site is of
ample size and configuration to support multiple users, and is apt to be developed as such.
Financially Feasible
In determining which uses are legally permissible and physically possible, an appraiser eliminates some
uses from consideration. Then the uses that meet the first two criteria are analyzed further. If the uses are
income-producing, the analysis will study which are likely to produce an income, or return equal to or
greater than the amount needed to satisfy operating expenses, financial obligations, and capital
amortization. All uses that are expected to produce a positive return are regarded as financially feasible.
Based upon the area’s high occupancy levels and strong rental rates, development of the site with an
anchored, multi-tenant shopping center is considered to be a financially feasible use.
Maximally Productive
Among financially feasible uses, the use that provides the highest rate of return or value (given a constant
rate of return) is the highest and best use. Given the legally permissible and physically possible
discussions set forth above, development of the site with an anchored, multi-tenant shopping center is
considered to be the maximally productive and highest and best use of the site as vacant.

Analysis as Improved
Legally Permissible
The subject improvements contain a total area of 64,683 SF GLA. Based upon the land area of 7.52
acres, a land-to-building ratio of 5.06:1 is indicated (FAR of 0.20:1). Parking is provided by 312 spaces,
which result in a ratio of 1 Space/207 SF GLA. The construction density and parking ratio exhibited by the
improvements are compatible with similar competitive properties in the immediate neighborhood.
Physically Possible
The subject improvements were originally completed in 1977 and are in good condition and of good
quality construction. Although the subject is showing some signs of wear, the subject improvements
represent a physically possible use of the site as improved.
Financially Feasible
The improvements contribute a financial return to the site that is far greater than that which would be
generated if the land were vacant. Since the return to the land and improvements is greater than the
expenses associated with maintaining them, utilization of the improvements through their economic life is
suggested.
Maximally Productive
The subject is anticipated to remain at stabilized occupancy for the foreseeable future. There are no
obvious alternative uses for the property at this time. Therefore, the existing improvements are
representative of the highest and best use of the property as improved.
Given the subject’s location, size and tenant mix, the most likely buyer would most likely be a mid-size to
large investor. This could be either an individual or entity.

REAL ESTATE TAX ANALYSIS
The subject is located on one tax parcel as presented in the chart below. Properties in Florham Park
Borough are assessed at 100% of the market or appraised value.
The subject property is located within the following taxing jurisdictions and was subject to the following
2018 tax rates.
Tax Rate Summary

2018
Taxing Entity Tax Rate/$100
County 0.261
County Open Space 0.381
District School 0.554
Regular School 0.272
Municipal Library 0.010
Municipal 0.033
Total 1.511
A summary of the resulting tax liabilities, based upon the current assessment, is included within the
following table.
2018 Taxes
Account Number Block 804 Lot 1
Appraised Land Value $2,379,500
Appraised Improvements Value $14,081,000
Total Appraised Value $16,460,500
Assessed Value (100%) $16,460,500
2018 Tax Rate per $100 $1.511
Total Tax Liability $248,718.16
Tax comparables from area properties are presented within the following table. The subject is within the
range indicated by the comparables.
Summary of Tax Comparables

Appraised
No. Name - Location Size (SF) YOC Value PSF
1 Florham Village - Florham Park 56,600 1961/2007 $16,884,800 $298.32
2 Pine Plaza - Hanover 103,970 1985 $16,450,000 $158.22
3 Castle Ridge Plaza - East Hanover 150,000 1984/2004 $18,500,000 $123.33
Subject 64,683 1977/2010 $16,460,500 $254.48
According to the officials with the Florham Park tax collector’s office, the subject property taxes are
currently paid in full.

APPRAISAL PROCESS
Overview
The three traditional approaches to valuing improved properties are,
1. Sales Comparison Approach - a comparison of the property appraised with reasonable similar,
recently conveyed properties for which the price, terms and conditions of sale are known.
2. Income Approach - the processing of a projected net income into a valuation estimate via one or
more capitalization techniques.
3. Cost Approach - an estimate of the replacement cost of all structural improvements as if new,
less loss in value attributable to depreciation from all causes plus the value of the land as if
vacant.
The Sales Comparison Approach is founded upon the principle of substitution that holds that the cost to
acquire an equally desirable substitute property without undue delay ordinarily sets the upper limit of
value. At any given time prices paid for comparable properties are construed by many to reflect the value
of the property appraised. The validity of a value indication derived by this approach is heavily dependent
upon the availability of data on recent sales of properties similar in location, size, and utility to the
appraised property.
The Income Capitalization Approach is based on the principle of anticipation that recognizes the present
value of the future income benefits to be derived from ownership in a particular property. The Income
Approach is most applicable to properties that are bought and sold for investment purposes, and is
considered very reliable when adequate income and expense data are available. Since, income-
producing real estate is most often purchased by investors, this approach is valid and is generally
considered the most applicable when the property being appraised was designed for, or is easily capable
of producing a rental income.
The Cost Approach is based on the premise that the value of a property can be indicated by the current
cost to construct a reproduction or replacement for the improvements minus the amount of depreciation
evident in the structures from all causes plus the value of the land and entrepreneurial profit. This
approach to value is particularly useful for appraising new or nearly new improvements. Due to the age of
the improvements and the resulting difficulty in accurately estimating accrued depreciation, the cost
approach was deemed inapplicable.
The Appraisal Process is concluded by a review and re-examination of each of the approaches to value
that was employed. Consideration is given to the type and reliability of data used, the applicability of each
approach to the type of property being appraised and the value being sought.

SALES COMPARISON APPROACH
Introduction
The Sales Comparison Approach is premised upon the Principle of Substitution - a valuation principle that
states that a prudent purchaser would pay no more for real property than the cost of acquiring an equally
desirable substitute on the open market. The principle of substitution presumes that the purchaser will
consider the alternatives available to him, that he will act rationally or prudently on the basis of his
information about those alternatives, and that time is not a significant factor. Substitution may assume the
form of the purchase of an existing property with the same utility, or of acquiring an investment, which will
produce an income stream of the same size with the same risk as that involved in the property in
question.
The applicability of this approach is based upon the assemblage of similar market sales and offering for
comparison to the subject. Considerations for such factors as market condition, location, size, quality,
age-condition, and amenities, as well as the terms of the transaction, are all significant to the subject
property. Any adjustments to the sale price of market sales to provide indications of market value for the
subject must be derived from the market; therefore, the actions of typical buyers and sellers are reflected
in the comparison process. Preferably, all properties are located in the same competitive area as the
property being appraised or in an area that has very similar characteristics.
The Sales Price per Square Foot (SP/SF) is obtained by dividing the sales price by the Gross Leasable
Area of the property. The sales price per square foot involves a comparison of physical attributes where
adjustments must be made for any differences that affect sales prices. These differences include
financing conditions, date of sale, location, quality of construction, age/condition, quality of construction
and occupancy, among others. This is a reliable unit of comparison assuming a high degree of
comparability. However, when somewhat dissimilar properties are compared, the Sales Price per Square
Foot does not directly differentiate between their respective income producing capabilities.
The sales utilized herein are considered to be the most comparable transactions available as of
the date of this appraisal.

Summary of Comparable Shopping Center Sales

Size Occ. NOI/SF SP/SF Ro
No. Name/Location DOS (SF) YOC (%) ($) ($) (%)
1 Wall Towne Center Jun-18 99,070 1997 100 22.01 419.40 5.25
Manasquan, NJ
2 New Hyde Park Plaza Jan-18 130,000 1967 90 25.77 573.08 4.50
New Hyde Park, NY
3 Hewlett Crossing Jan-18 32,000 1954 100 33.52 609.38 5.50
Hewlett, NY
4 District at Metuchen Jan-18 66,547 2017 98 25.92 508.36 5.10
Metuchen, NJ
5 1600 Marcus Avenue Jul-17 32,300 1964 96 41.01 683.44 6.00
New Hyde Park, NY
Subj Florham Park Plaza - Florham Park, New 64,683 1977/2010 100 34.97
Jersey
Min Jul-17 32,000 1954 22.01 419.40 4.50
Max Jun-18 130,000 2017 41.01 683.44 6.00
Mean Dec-17 71,983 1988 29.65 558.73 5.27
Median Jan-18 66,547 1997 25.92 573.08 5.25

Figure 10: Improved Sales Map
Active Listings/Pending Sales

In addition to the closed sales presented, we researched active listings throughout the market area. We
uncovered no listings that could be confirmed or pending sales of similar shopping centers other than
what is presented herein.
Discussion of Sales
Sale 1
Wall Towne Center is a 99,070 SF shopping center in Manasquan, NJ. Constructed in 1997, this center
was 100% occupied at the time of sale. This shopping center is located in a residential area with little
nearby competition in an affluent coastal town. Tenants include ShopRite which reported strong sales,
Great Clips, AT&T, GNC, and Allstate Insurance. This property sold on June 4, 2018 for $41,550,000, or
$419.40/SF at a 5.25% overall rate.
Sale 2
New Hyde Park Plaza is a 130,000 SF shopping center located in New Hyde Park, NY, near Interstate
495. Constructed in 1967, this center was 90% occupied at the time of sale. The property is anchored by
ShopRite on a long-term lease, with Chipotle, T.J. Maxx, and Party City among other tenants. This
property sold December 27, 2016 at a consideration of $74,500,000 or $573.08 per square foot at an
overall rate of 4.50%.

Sale 3
Hewlett Crossing is a 32,000 SF shopping center located in Hewlett, NY. Constructed in 1954, this center
was 100% occupied at time of sale. The center is shadow-anchored by Trader Joe’s and occupies a key
retail intersection in a dense area. Tenants at the center include Petco, Chase Bank, and Citibank. This
property sold January 8, 2018 at a consideration of $19,500,000, or $609.38/SF at a 5.50% overall rate.
Sale 4
The District at Metuchen is a 66,547 SF grocer-anchored shopping center in Metuchen, NJ. Constructed
in 2017, this center was 90% occupied at the time of sale. This shopping center features Whole Foods on
a new long-term lease, with other national and local credit retailers and service providers. This property
sold January 5, 2018 for $33,830,000 or $508.36 per square foot at an overall rate of 5.10%.
Sale 5
1600 Marcus Avenue is a 32,300 SF shopping center in New Hyde Park, NY. Constructed in 1964, this
center was 96% occupied at the time of sale. This shopping center is located at the busy corner of
Marcus Avenue and New Hyde Park Boulevard. Tenants include Petsmart, Smashburger, Chop’t
Creative Salad, European Wax Center, and NEFCU. This property sold on July 6, 2017 for $22,075,000,
or $683.44/SF at a 6.00% overall rate.
A summary of the applicable adjustments and the resulting adjusted sales prices per square foot are
included within the following adjustment grid. All sales were sold Leased Fee with typical financing and no
unusual sale conditions. No expenditures were required immediately after sale and no adjustments for
market conditions were deemed necessary.

Comparable Sales Adjustment Grid

Comparable Sale Number Subject Data 1 2 3 4 5
Type of Transaction Sale Sale Sale Sale Sale

Property Rights Conveyed Leased Fee Leased Fee Leased Fee Leased Fee Leased Fee Leased Fee
Date of Sale Jun-18 Jan-18 Jan-18 Jan-18 Jul-17
Location Suburban Inferior Inferior Similar Inferior Superior
Building Size (SF) 64,683 99,070 130,000 32,000 66,547 32,300
Year Built 1977/2010 1997 1967 1954 2017 1964
Quality Class B Class B Class B Class B Class B Class B
Condition Above Average Above Average Above Average Above Average Above Average Average
Land to Building Ratio 5.06:1 16.07:1 2.59:1 1.74:1 3.57:1 3.53:1
Occupancy at Time of Sale (%) 100% 100 90 100 98 96
Tenant Base Multi Multi Multi Multi Multi Multi
Sales Price $41,550,000 $74,500,000 $19,500,000 $33,830,000 $22,075,000
UnAdjusted Price Per Square Foot $419.40 $573.08 $609.38 $508.36 $683.44
Transactional Adjustments
Price / SF $419.40 $573.08 $609.38 $508.36 $683.44
Property Rights Conveyed Leased Fee 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted Price $419.40 $573.08 $609.38 $508.36 $683.44
Financing Terms Conventional 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted Price $419.40 $573.08 $609.38 $508.36 $683.44
Conditions of Sale None 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted Price $419.40 $573.08 $609.38 $508.36 $683.44
Expenditures Imm. After Sale 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted Price $419.40 $573.08 $609.38 $508.36 $683.44
Market Conditions 9/30/2018 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted $/SF - With Transactional Adjustments $419.40 $573.08 $609.38 $508.36 $683.44
Physical Adjustments
Location Suburban 60.0% 10.0% 0.0% 60.0% -10.0%
Building Size (SF) 64,683 0.0% 5.0% -5.0% 0.0% -5.0%
Actual Age 1977/2010 -5.0% 0.0% 5.0% -15.0% 0.0%
Quality /Condition Class B 15.0% 5.0% 5.0% -5.0% 10.0%
Land to Building Ratio 5.06:1 -5.0% 5.0% 10.0% 5.0% 5.0%
Occupancy at Time of Sale 100% 0.0% 5.0% 0.0% 0.0% 0.0%
Total Physical Adjustments 65.0% 30.0% 15.0% 45.0% 0.0%
Value Indication Per Square Foot $692.01 $745.00 $700.78 $737.13 $683.44
Before After
Value Ranges
Adjustment Adjustment
Minimum Price $419.40 $683.44

Maximum Price $683.44 $745.00
Mean Price $558.73 $711.67
Median Price $573.08 $700.78
Standard Deviation $100.34 $27.66
The adjusted sales prices range from $683.44/SF to $745.00/SF with a mean of $711.67/SF and a
median of $700.78/SF. As a result of the adjustments made herein, the standard deviation decreased
from $100.34/SF before adjustment to $27.66/SF after adjustment. This reduction in the standard
deviation indicates a tightening in the sales prices about the mean, lending credence to the adjustments
made herein. Considering the central tendency of the adjusted sales, it is our opinion that a SP/SF of
$710.00/SF is appropriate for the subject. Utilizing this per unit value conclusion, the total value of the
subject is calculated as follows:
SP/SF Analysis - As Is
GLA (SF) x Value/SF = Value Indication
64,683 SF x $710.00/SF = $45,924,930
Rounded: $45,900,000

INCOME CAPITALIZATION APPROACH
Introduction
The Income Capitalization Approach is a process of estimating the value of real estate based upon the
principle that the value is directly related to the present value of all future net income attributable to the
property. The value of the real property is therefore derived by capitalizing net income either by direct
capitalization or a discounted cash flow analysis. Regardless of the capitalization technique employed,
one must attempt to estimate a reasonable net operating income based upon the best available market
data; therefore, the derivation of this estimate requires the appraiser to: (1) project potential gross income
(PGI) based upon a comparison of the subject to competing properties; (2) project income loss from
vacancy and collection loss based primarily upon supply and demand relationships in the subject’s
market; (3) derive effective gross income (EGI) by subtracting the vacancy and collection income loss
from PGI; (4) project the operating expenses associated with the production of the income stream by
comparison of the subject to similar competing properties; and (5) derive Net Operating Income (NOI) by
subtracting the operating expenses from EGI.
Existing Leases
The center is 100.00% leased to 15 tenants paying an average of $36.71/SF on NNN leases. The subject
has a significant national tenant base, with Walgreens at 13,101 SF, Trader Joe’s at 11,266 SF, The
Dress Barn at 7,034 SF, and McDonald’s at 4,362 SF on an outparcel, among others. Local tenants
include Nonna’s restaurant, BOM Nails, and Modern Acupuncture.
Summary of Existing Tenants

Start End Size Monthly Annual Ann.
Tenant Name Date Date (SF) Rent Rent Rent/SF
Walgreens 7/1/10 6/30/35 13,101 $47,083.33 $564,999.96 $43.13
Trader Joe's 11/1/10 1/31/26 11,835 $31,165.90 $373,990.80 $31.60
The Dress Barn 6/1/07 12/31/22 7,034 $16,119.58 $193,434.96 $27.50
Chop't 6/1/17 5/31/27 2,911 $9,218.17 $110,618.04 $38.00
McDonald's 2/21/12 2/20/34 4,362 $16,500.00 $198,000.00 $45.39
Kyoto 3/20/95 3/31/20 4,300 $9,416.67 $113,000.04 $26.28
Nonna's 1/10/09 4/30/28 4,187 $13,209.99 $158,519.88 $37.86
Dunkin' Donuts 12/1/04 6/30/25 2,731 $9,103.33 $109,239.96 $40.00
Qdoba 4/1/11 3/31/21 2,430 $7,796.25 $93,555.00 $38.50
Firehouse Subs 3/1/17 2/28/27 2,200 $7,150.00 $85,800.00 $39.00
Your Verizon 2/1/13 1/31/23 2,139 $6,762.43 $81,149.16 $37.94
BOM Nails 11/1/11 10/31/21 2,000 $6,193.33 $74,319.96 $37.16
Modern Acupuncture 2/1/19 1/31/29 2,000 $6,666.67 $80,000.04 $40.00
North Jersey Lash 6/1/17 4/30/27 2,053 $6,843.33 $82,119.96 $40.00
Sport Clips 8/1/18 7/31/28 1,400 $4,666.67 $56,000.04 $40.00
Total 64,683 $197,895.65 $2,374,747.80 $36.71

Quality and Duration of Tenancy

Several tenants have maintained long-term occupancy within the subject property. An overview of each
tenant’s tenure is provided below. It should be noted that, although major tenants Trader Joe’s and Dress
Barn are both expiring during the holding period, each of these tenants has 3 five year renewal options,
lowering risk
Years at
Tenant Location Total SF
Walgreens 8 13,101
Trader Joe's 8 11,835
The Dress Barn 11 7,034
Chop't 1.5 2,911
McDonald's 7 4,362
Kyoto 24 4,300
Nonna's 10 4,187
Dunkin' Donuts 14 2,731
Qdoba 8 2,430
Firehouse Subs 2 2,200
Your Verizon 6 2,139
BOM Nails 7 2,000
Modern Acupuncture 0 2,000
North Jersey Lash 1.5 2,053
Sport Clips 1 1,400
Co-Tenancy Clauses
The subject has one tenant whose lease includes a co-tenancy clause, as summarized below.
Co-Tenancy/Go Dark Clauses
If 65% of the gross leasable area of the Shopping Center

(excluding tenant's premises) is not open and operating, such
condition shall be considered an "Ongoing Co-Tenancy Violation,"
and Tenant shall have the right to pay an amount equal to the
greater of 50% of Annual Minimum Rent and Annual Charges
Dress Barn then due, or 5% of Gross Sales, in lieu of Annual Minimum Rent,
Percentage Rent, and Additional Charges. If said violation
continues for a period of 12 consecutive months or more, Tenant
shall have the right to cancel and terminate this Lease upon 30
days notice; otherwise Tenant shall recommence payment of
Annual Minimum Rent, Percentage Rent, and Additional Charges
after the end of the 12 month period.
Discussion of Recent Subject Leases

Two new leases have been signed or commenced within the subject since January 2018. Sport Clips
signed in November 2017 with commencement in August 2018 at $40/SF for 1,400 SF for 10 years with a
10% increase in year 6.

Modern Acupuncture signed in June 2018 with commencement expected for February 2019 at $40/SF for
2,000 SF for 10 years with a 10% increase in year 6. Both of these leases support the market rent
conclusion for small in-line space.
Competing Retail Centers

To estimate the market rental rate of the retail space in the subject, the rental rates of similar centers in
the subject and surrounding areas have been analyzed. These rental rates are summarized below, and
the pertinent details of each are located in the Exhibits section of this report.
Figure 11 : Comparable Retail Center Map
Summary of Comparable Rentals

Distance Relation to YOC/ Rent/ Lease
No. Name - Location Anchor Tenants from Subject Subject Size (SF) YOR Occup. SF ($) Type
Village Town Center King's Supermarket, CVS, Starbucks, Kids Across Street Similar 56,600 1961/2018 66% $32.00-40.00 NNN
1
Florham Park Plus
416-420 State Route 10 Party City, Amazing Savings, Carpet Mill, 1.75 Inferior 35,000 1970/2004 100% $17.00-50.00 NNN
2
East Hanover Planet Fitness
West Caldwell Plaza TJ Maxx, ShopRite, CVS, Radio Shack, 6.48 Similar 141,302 1959/1995 92% $30.00-34.00 NNN
3
West Caldwell Starbucks, KFC
The Corner at Livingston Center Starbucks, Shake Shack 2.40 Similar 13,000 2017 100% $48.00-50.00 NNN
4
Livingston
The Shoppes at Livingston Circle The Fresh Market, GameStop, Olive 2.49 Similar 101,000 1993 78% $23.00-33.00 NNN
5
Livingston Garden
Castle Ridge Plaza Best Buy, Michael's, Dollar Tree, Chipotle, 1.60 Similar 150,000 1984/2004 100% $30.00-33.00 NNN
6
East Hanover Smashburger
Florham Park Plaza 64,683 1977/2010 100% $36.71 NNN

The preceding comparables indicate asking rates within the market. These rates generally bracket the
contract rent for the subject and support the contract rates relative to market.
Broker Survey
Leasing Survey
Contact Neal Richards Adam Kushin Michael Gartenberg James Aug
Company Vanguard Realty Jeffery Realty Garden Commercial Jeffery Realty
Market Rent:
Small Space (<5,000 SF) $36.00-40.00 $25.00-33.00 $35.00-43.00 $40.00
Larger Space (>5,000 SF) $20.00-25.00 $20.00 $30.00-35.00 Varies
$1.00-2.00 more than
Pad/End Cap Space $100,000-150,000 annual $40.00-45.00 -
small
Leasing Commissions: 5% 5% 4-5% -
$100,000 for national credit (no
Tenant Improvements: None None $20.00 for AAA credit
concessions)
Concessions 1-2 months buildout 2 months for local credit (no TI) 3-4 months outside term Minimal
Marketing Period 6-12 months 3-6 months 6 months small, 1 year large -
Rollover Very low Very low Low Low
Leases Village Town

Center across the street.
Comments - - -
Very good area, high
income, leasing is strong.
.
The subject is considered to be a strong center within the subject neighborhood in terms of occupancy.
Due to its location and high occupancy, its rental rates set the upper end of the market for this
community.
Market Rent Analysis

Actual leases from the area, allocated by space type, are presented in the following tables as well as a
discussion of the subject space types and conclusions relative to market rent for each space type.
Summary of Actual Leases - Small In-Line Space

Distance Space Start Lease
From Size Date Rate
Center Name City/State Subject (Mi) Tenant (SF) (Yr) ($/SF)
West Caldwell Plaza West Caldwell 6.48 Undisclosed 1,225 2018 $33.00
Village Town Center Florham Park Across Street Jewelry store 1,300 2018 $40.00
The Shoppes at Livingston Circle Livingston 2.49 Restaurant 3,165 2018 $32.00
The Shoppes at Livingston Circle Livingston 2.49 Cycle Bar 3,200 2017 $30.00
The Corner at Livingston Center Livingston 2.69 The Simple Greek 1,600 2017 $50.00
The Corner at Livingston Center Livingston 2.69 Starbucks - 2017 $48.00
Village Town Center Florham Park Across Street Lucy's 1,400 2016 $32.00
West Caldwell Plaza West Caldwell 6.48 Asian restaurant 1,700 2016 $30.00
136 Route 10 East Hanover 1.47 Undisclosed national credit 2,000 2015 $28.00
Chadwell Plaza East Hanover 1.63 Bridal shop 2,400 2015 $20.00
West Caldwell Plaza West Caldwell 6.48 Honey Baked Ham 1,710 2014 $34.00
Village Town Center Florham Park Across Street Letsyo 2,014 2014 $32.00
Village Town Center Florham Park Across Street Modern Ear 2,000 2014 $35.00
In-Line Space
The subject property has 13 tenants that are considered to be in-line retail space. In-line rental rates
range from $26.28/SF to $40.00/SF. The in-line retail leases summarized above indicate a range of
$20.00/SF to $50.00/SF, NNN.

Based upon the actual leases presented herein and contract rates within the subject, market rent was
concluded at $40.00/SF for small space (<5,000 SF) and $30.00/SF for large in-line space. Both of these
market rent conclusions is based upon a NNN lease structure with the tenant paying all operating
expenses. All leases are based upon a 10-year term with 3% annual CPI increases. Tenant
improvements for these categories were concluded at $20.00/SF for new leases and $2.00/SF for
renewals. Leasing commissions were concluded at 6% for new leases and 4% for renewals.
Outparcel/Endcap Space
Outparcel Rents - Restaurant
Tenant Address YOC Size Lease Date Lease $/SF Lease Term Details
Burger King Cedar Grove, NJ 1971 2,307 2013 $33.81 5 years remaining current term
Friendly's Morris Plains, NJ 1968 2,428 2011 $33.45 2 years remaining, 10% increase 2016
Wendy's Millville, NJ 1994 2,414 2007 $47.61 Includes percentage rent
Wendy's Eatontown, NJ 1987 2,806 2005 $38.88 20 year term, 1.5% annual increases
The outparcel space, McDonald’s, is superior to that of the in-line space due to its being a stand-alone
building located near the front of the parking lot. Likewise the endcap Walgreens space is considered
equivalent to outparcel space due to its prominent position facing the roadway. Based upon the actual
leases presented herein and the contract rents for the subject space, market rent was concluded at
$45.00/SF for this space. This lease rate is consistent with subject contract and lease rates within the
market. This market rent conclusion is based upon a NNN lease structure with the tenant paying all
operating expenses. The conclusion is based upon a 20-year term with 3% annual CPI increases. Tenant
improvements were concluded at $20.00/SF for new leases and $2.00/SF for renewals. Leasing
commissions were concluded at 6% for new leases and 4% for renewals.
Market Rent Summary

Based upon the preceding data and analysis, a summary of the concluded market rent ranges and the
average market rent utilized within the DCF analysis for each space type and tenant space as well as a
comparison of contract to market rent are presented within the following tables.
Market Rent Summary

Market Market Lease
Rent/SF Rent/SF Term
Space Type Range Average (Yrs.)
Small In-Line $20.00 - $50.00 $40.00 5
Large In-Line $17.00 - $23.00 $30.00 10
Pad / End Cap $30.00 - $48.00 $45.00 20

Subject Tenant Classification

Tenant Name Size Space Classification
Walgreens 13,101 Pad/End Cap
Trader Joe's 11,835 Large In-Line
The Dress Barn 7,034 Large In-Line
Chop't 2,911 Small In-Line
McDonald's 4,362 Pad/End Cap
Kyoto 4,300 Small In-Line
Nonna's 4,187 Small In-Line
Dunkin' Donuts 2,731 Small In-Line
Qdoba 2,430 Small In-Line
Firehouse Subs 2,200 Small In-Line
Your Verizon 2,139 Small In-Line
BOM Nails 2,000 Small In-Line
Modern Acupuncture 2,000 Small In-Line
North Jersey Lash 2,053 Small In-Line
Sport Clips 1,400 Small In-Line
Market Reimbursement (Billback Income)

In addition to the subject’s base rent, additional rental is charged in the form of CAM charges, or expense
reimbursements. This lease type is common within the subject market and requires the tenant to pay their
pro rata share of all common area maintenance, real estate taxes and insurance. The landlord is
responsible for management and structural reserves, as well as those reimbursable expenses incurred on
vacant space. Year 1 reimbursements were calculated at $698,638.
Percentage Rents
Two tenants in this shopping center, Dress Barn and Walgreens, have percentage rent clauses requiring
them to report retail sales. Data on these sales was not provided to the appraiser; however, it was
reported that the two tenants have not historically paid percentage rent.
Vacancy and Collection Loss

The subject is currently 100.00% leased. Occupancy rates reported within the market range from 66% to
100%, although two of these comparables are still in lease-up following renovation. Due to its location,
configuration and strong tenant mix, the subject’s occupancy rate is anticipated to remain strong into the
foreseeable future.
The subject has had strong historical occupancies. Although submarket vacancy for shopping centers is
6.1%, the subject is considered a superior property within its submarket. The overall occupancy for the
subject property has been projected at 96% with a 1% collection loss factor, resulting in a total vacancy
and collection loss of 5%. This vacancy and collection loss factor is considered reasonable relative to
overall occupancy within the market coupled with the subject's location and market demand as exhibited
by occupancies in the immediate area. Vacancy was not calculated against the subject’s credit tenants.
Those tenants excluded are McDonalds, The Dress Barn, Trader Joe’s and Walgreens.

Expense Analysis
This section of the report analyzes the cost of operation for the subject property. Typically, operating
expense can be classified as real estate taxes, insurance, management, common area maintenance, and
miscellaneous expenses.
In estimating the operating expenses for the subject property, we relied on the 2018 IREM Shopping
Center Report published by the Institute of Real Estate Management, as well as the comparables provide
herein and the subject’s historical operating expense and budget. We have utilized the expenses reported
for Region II in which the subject is located. Note that Regions I, II and III are counted as a single region
with Pennsylvania Delaware, Maryland, West Virginian, Virginia and the District of Columbia all contained
in Region III, New York and New Jersey in Region II, and Maine, Vermont, New Hampshire Connecticut
and Massachusetts in Region I.
2018 IREM Report

Open Shopping Centers - Region I, II & III
Range
Category Median Low High
Real Estate Taxes 1.47 1.01 3.68
Insurance 0.22 0.13 0.26
Management 0.68 0.45 1.08
Common Area Maintenance 2.46 1.53 4.37
Total 5.84 3.52 9.75
Expense comparables are presented within the following table.
Expenses Comparables
Location North Bergen, NJ Warren, NJ Freehold, NJ
Year Built 2008 2004 1964
GLA 410,015 11,488 25,495
Year of Operations 2016 2015 2016
Item PSF PSF PSF
Real Estate Taxes $7.48 $3.00 $3.58
Insurance $0.36 $0.62 $0.69
Management $0.82 - -
Common Area Maintenance $1.20 $6.05 $3.17
Total Expenses $9.86 $9.67 $7.44

The subject’s historical and budgeted operating statements are presented below.
Historical Operating Data
Year 2015 2016 2017 2018 Annlzd

Total PSF Total PSF Total PSF Total PSF
Income
Net Rental Income 2,734,583 42.27 2,734,259 42.77 2,766,550 42.77 2,884,946 44.60
Effective Gross Income 2,734,583 42.27 2,734,259 42.77 2,766,550 42.77 2,884,946 44.60
Expenses
Real Estate Taxes 231,764 3.75 235,879 3.75 242,463 3.75 242,464 3.75
Insurance 20,250 0.36 18,903 0.29 18,512 0.29 22,990 0.36
Common Area Maintenance 176,691 3.34 182,558 3.09 199,973 3.09 215,734 3.34
Management 241,547 2.60 212,890 2.54 164,222 2.54 168,098 2.60
General & Administrative 40,043 0.20 83,310 0.68 43,975 0.68 12,902 0.20
Total Expenses 710,295 10.24 733,540 10.34 669,145 10.34 662,188 10.24
Net Operating Income 2,024,288 34.36 2,000,719 32.43 2,097,405 32.43 2,222,758 34.36
A discussion of each of the expense categories is as follows:
1. Real Estate Taxes: Within the Real Estate Tax Analysis section of this report, Year 1 real estate taxes
were estimated at $248,718 ($3.85/SF). This amount is above the range indicated by the IREM
Report but is supported by the analysis contained within the Real Estate Tax Analysis section of this
report.
2. Insurance: The subject will be insured against casualty loss with additional coverage for property
liability. The IREM Report indicated an insurance expense ranging from $0.13/SF to $0.26/SF with a
median expense of $0.22/SF. Based upon the subject’s actual insurance premium, the Year 1
insurance expense was estimated at $0.35/SF, or $22,639. This, although above the IREM range, is
similar to the budgeted figure.
3. Common Area Maintenance: Shopping centers typically have a CAM charge in order to provide for
routine maintenance of the landscaping, parking lot repair, cleaning, and other items associated with
maintaining the subject improvements. Other miscellaneous charges are also included. The IREM
Report indicates common area maintenance expenses ranging from $1.53/SF to $4.37/SF with a
median of $2.46/SF. Based on the historical and budgeted figures, we have reconciled the Year 1
expense at $3.25/SF, or $210,220 for analysis.
4. Management: Management fees are typically based upon a percentage of the effective gross income,
otherwise known as collections. Management includes a contract with a management firm for
operating the property. Based upon conversations with management firms in the area, it was
indicated that the cost of management ranges from 2% to 6% of the gross effective income. Based
upon historical expenses, the management expense was estimated at 6.00% of effective gross
income. The concluded management expense is similar to historical levels and is reasonable relative
to market norms.
5. General & Administrative: This category includes all other operating expenses. Historical figures have
ranged from $0.20/SF to $0.68/SF. Based upon historical figures, the Year 1 expense was concluded
at $0.70/SF or $45,278.
6. Structural Reserves: This account accrues funds for the eventual repair and replacement of building
components that are not included in the CAM charge. Such charges typically include capital
expenditures for parking lots, roof replacement, and other miscellaneous expenditures necessary to
maintain the integrity of the structural shell. The IREM Report does not report structural reserves.
However, the Third Quarter 2018 PwC Investor Survey indicates a range of $0.10/SF to $0.75/SF for
this expense. Considering the subject’s average condition, we have estimated the Year 1 structural

reserves for the subject property at $0.15/SF, or $9,702, in our analysis. Reserves were only
considered within the DCF Analysis.
Based upon the preceding discussion, the Year 1 operating expenses are summarized as follows:
Expense Summary
Item PSF
Real Estate Taxes $3.85
Insurance $0.35
Common Area Maintenance $3.25
Management 6.0% $2.75
General & Administrative $0.70
Structural/Reserves $0.15
Total Expenses $11.05
The total projected expenses (excluding reserves) is within the range of historical figures. Total expenses
are above the range indicated by the IREM report and the expense comparables presented herein. The
subject is however a superior property within the market and expenses are considered reasonable on this
basis.
Net Operating Schedule

The Net Operating Income (NOI) Schedule is estimated for the subject center in this section. The Gross
Potential Rental Income was calculated within the Rental Analysis section of this report and will be
utilized herein. The expenses as determined within the Expense Analysis section of this report for the
subject building will be utilized within the Direct Capitalization Technique. Following is the subject’s
reconstructed operating statement.

Reconstructed Operating Statement

Year 1
For the Years Ending Sep-2019
Rental Revenue
Potential Base Rent 2,351,331
Absorption & Turnover Vacancy 0
Scheduled Base Rent 2,351,331
CPI Increases 0
Total Rental Revenue 2,351,331
Other Tenant Revenue

Total Expense Recoveries 698,638
Total Other Tenant Revenue 698,638
Total Tenant Revenue 3,049,969
Potential Gross Revenue 3,049,969
Vacancy & Credit Loss

Vacancy Allowance -52,657
Credit Loss -30,500
Total Vacancy & Credit Loss -83,157
Effective Gross Revenue 2,966,812
Operating Expenses
RE Tax 248,718
Insurance 22,639
CAM 210,220
Management 178,009
G&A 45,278
Total Operating Expenses 704,864
Net Operating Income 2,261,948
Direct Capitalization Technique

Capitalization is a process of converting a net income stream into an indication of value. This approach to
valuation can be accomplished by the following methods: 1) by dividing a single year’s net operating
income by an appropriate overall capitalization rate, i.e. Direct Capitalization, or 2) by discounting to
present value a net income stream and property reversion over a projected holding periods, i.e.
Discounted Cash Flow Analysis. The selection of the most appropriate overall rate (Ro) in Direct
Capitalization can be accomplished by several methods. Extraction from comparable sales, and a real
estate investment survey were employed to determine an appropriate overall rate.

Derivation from Comparable Sales

In deriving an overall rate, the improved sales were analyzed with regard to the subject property. A
summary of each of these transactions with regard to the Income Capitalization Technique is as follows:
Summary of Comparable Shopping Center Sales

NOI/SF Ro
No. DOS YOC ($) (%)
1 Jun-18 1997 22.01 5.25
2 Jan-18 1967 25.77 4.50
3 Jan-18 1954 33.52 5.50
4 Jan-18 2017 25.92 5.10
5 Jul-17 1964 41.01 6.00
Minimum Jul-17 1954 22.01 4.50
Maximum Jun-18 2017 41.01 6.00
Mean Dec-17 1988 29.65 5.27
Median Jan-18 1997 25.92 5.25
There appears to be no relationship between NOI/SF, occupancy, and the overall rate. The comparable
sales’ overall rates range from 4.50% to 6.00% with a mean of 5.27% and a median of 5.25%. Taking into
consideration the subject’s 100% occupancy and location and strong national and regional tenant mix, an
overall rate near the lower end of the range indicated by the comparables is considered reasonable.
Investor Survey
As additional support, we have included the data for National Neighborhood Shopping Centers from the
PwC Real Estate Investor Survey, 3rd Quarter 2018. A summary of the overall rates for neighborhood
centers is located in the following table.
SURVEY SUMMARY (OVERALL RATES)

Current Quarter Last Quarter Prior Year
National Strip Shopping Center
Range 4.00% - 9.50% 4.00% - 9.50% 4.50% - 9.50%
Average 6.27% 6.36% 6.19%
Change (Basis Points) --- -9 +8
Source: PwC Real Estate Investor Survey, 3rd Quarter 2018
Broker Survey
Local brokers were asked to provide an applicable cap rate for the subject property. The opinions are
presented within the following table.

Broker Survey
Cap Rate Range
Name Company Low High General Market Comments
David Gavin CBRE 5.00% 6.00% This is a great location in a high demographic area.
This broker is involved in asset management for the

Kevin O'Hearn HFF 4.50% 5.00%
subject.
This cap rate is driven by the anchor, which is high end
Brian Whitmer Cushman & Wakefield 5.00% 5.25% although not national.
Source: Broker Survey
Based upon the comparable sales and responses from brokers active in the market and considering the
age and location of the subject and the remaining lease term for the anchors, an overall rate of 5.00%
was deemed appropriate. This conclusion considers the strength of the subject market area as exhibited
by the area demographics as well as the strength of the subject tenant mix anchored by Trader Joe’s. A
rate at the lower end of the range of comparable sales and broker interviews was deemed reasonable
due to the subject’s exception lineup of national tenants on long remaining lease terms, its strong grocery
anchor, and its minimal exposure to online shopping which has softened rates for other shopping centers.
This concluded rate is well within the range indicated by the PwC Survey, is bracketed by the comparable
sales, and is considered reasonable given the locational and economic characteristics of the subject.
Direct Capitalization Technique

NOI / Ro = Value Indication
$2,261,948 / 5.00% = $45,238,960
Rounded: $45,200,000
Discounted Cash Flow Method

Another technique associated with the Income Capitalization Approach is the Discounted Cash Flow
Analysis (DCF). The DCF is a highly significant measure of investment performance and its
understanding is important in analyzing properties such as the subject.
The purpose of the Discounted Cash Flow Analysis is to bring together all factors, which affect the return
from a real estate investment. It is the process by which all cash flows are reduced to a single figure, the
present value. These cash flows include all cash inflows, such as rents and proceeds of sale, as well as
all cash outflows, such as operating expenses and vacancy and collection losses. The underlying
objective of the DCF is to account for the entire flow of cash in and out of the project with respect to time
so that the time value of money is property recognized in the analysis.
A DCF is developed by projecting cash flows for the project over a ten-year holding period. Various
assumptions are made, including increases in income and expense estimates, lease terms, and sales
price of the investment at the end of the projected holding period. Actual leases on the property are also
included as they affect the value of the property if different from market rents. All assumptions included in
the DCF are based on actual market history and are consistent with the assumptions typically made by
investors analyzing properties of this type in the southwestern United States Region.

In performing the Discounted Cash Flow Analysis, we have utilized the lease-by-lease and cash flow
analysis program ARGUS.
Following are the assumptions utilized within the Discounted Cash Flow Analysis:
1. The typical holding period is 10 years with resale at the end of the 9th year.
2. The “going out” or “terminal” overall rate is used by most investors to estimate the reversionary
value of an asset. In a stabilized market, the terminal overall rate is usually 0.5% to 1.0% higher
than current going in rates. This is because the terminal rate reflects additional risks inherent in
projecting ten years into the future and the fact buildings will be ten years older. However, current
market conditions do not reflect this spread. This is due to the un-stabilized nature of the market
and future anticipated corrections. The terminal overall rate utilized in analyzing the subject
was 5.50%. This rate is supported by the 3rd Quarter 2018 PwC Real Estate Investor Survey,
which indicates terminal capitalization rates ranging from 4.50% to 9.75% with an average of
6.84%.
3. The existing leases have been entered into the DCF according to the terms provided to this
office.
4. Inflation for expenses has been estimated at 3.0% for the entire holding period. Income inflation is
also projected to increase at 3.0% for the projection period. This is supported by the 3rd Quarter
2018 PwC report, which indicates that investors utilize an inflation rate of 0.00% to 3.00% with a
mean of 1.71% for income and 0.00% to 3.00% with a mean of 2.61% for expenses. CPI was
projected to increase at 3%, which is similar to historical levels.
5. Given the limited amount of comparable retail space available within the subject’s market, it is
assumed that 70% of the existing tenants will renew their leases, with the remaining 30%
vacating the space upon expiration. A 6-month re-leasing period was utilized.
6. Tenant improvements were concluded at $20.00/SF for new leases and $2.00/SF for renewals.
7. Leasing commissions were estimated at 6% for new leases and 4% for renewals for retail space.
This is consistent with market levels.
8. Within our analysis, we have utilized a collection loss of 1%. A 4% vacancy factor has been
applied. This vacancy loss is adjusted to reflect tenant turnover due to lease expiration. Credit
tenants were excluded from the vacancy calculation.
9. Selling and marketing expenses have been estimated at 2.0% of the gross proceeds from sale.
This expense includes sales commissions and closing costs incurred during the sale of the
property and will be incurred at the end of the tenth year of our projection term.
Derivation of Discount Rate

The rate used to discount projected cash flows and eventual property reversion reflects the acceptable
yields that investors dealing in similar properties expect to achieve.
A yield rate differs from a direct capitalization rate (such as an equity dividend rate) in that it takes into
consideration all equity benefits, including the equity reversion at time of resale, in addition to annual cash
flow. The yield rate (discount rate) is the single rate that discounts all of the future equity benefits to the
original equity investment. Factors to consider when selecting a yield rate are the alternative non-real es-
tate returns available to investors, the quality of the investment considered, current market activity for fi-

nancing, the relationship of contract rents to market rents for the property considered, and the tax shelter
potential. A summary of alternative investment returns are shown in the following table.
(1) (2) (3) (4) (5) (6)

Reserve Prime Corporate Corporate
Bank Rate Bonds Bonds US 5 Yr *US 30 Yr
Period Rate (Mo. Avg) (Aaa) (Baa) Bonds Bonds
Feb-09 0.50 3.25 5.35 8.18 1.75 3.49
Ma y-09 0.50 3.25 4.26 8.06 2.13 4.23
Oct-09 0.50 3.25 5.15 6.29 2.33 4.19
Ja n-10 0.50 3.25 5.26 6.25 2.48 4.60
Apr-10 0.75 3.25 5.29 6.25 2.58 4.69
Jul -10 0.75 3.25 3.69 6.01 1.76 3.99
Oct-10 0.75 3.25 4.68 5.72 1.18 3.87
Ja n-11 0.75 3.25 4.86 6.09 1.99 4.52
Apr-11 0.75 3.25 4.93 6.02 2.17 4.50
Jul -11 0.75 3.25 4.93 5.76 1.54 4.27
Sep-11 0.75 3.25 4.09 5.27 0.90 3.18
Dec-11 0.75 3.25 3.93 5.25 0.89 2.98
Ma r-12 0.75 3.25 3.99 5.23 1.02 3.28
Sep-12 0.75 3.25 3.49 4.84 0.67 2.88
Dec-12 0.75 3.25 3.65 4.63 0.70 2.88
Jun-13 0.75 3.25 4.27 5.19 1.20 3.40
Sep-13 0.75 3.25 4.64 5.47 1.60 3.79
Dec-13 0.75 3.25 4.62 5.38 1.58 3.89
Ma r-14 0.75 3.25 4.38 5.06 1.64 3.62
Jun-14 0.75 3.25 4.24 4.81 1.68 3.42
Sep-14 0.75 3.25 4.11 4.80 1.77 3.26
Dec-14 0.75 3.25 3.79 4.74 1.64 2.83
Ma r-15 0.75 3.25 3.64 4.54 1.52 2.63
Sep-15 0.75 3.25 4.07 5.34 1.49 2.95
Dec-15 0.87 3.37 4.03 5.48 1.70 2.97
Ma r-16 1.00 3.50 3.82 5.13 1.38 2.68
Jun-16 1.00 3.50 3.50 4.53 1.17 2.45
Sep-16 1.00 3.50 3.41 4.31 1.30 2.50
Dec-16 1.25 3.75 4.06 4.83 1.93 3.06
Ma r-17 1.50 4.00 4.01 4.68 1.93 3.02
Jun-17 1.75 4.25 3.68 4.37 1.92 2.85
Dec-17 1.90 4.40 3.51 4.22 2.18 2.77
Ma r-18 2.25 4.75 N/A N/A 2.70 3.07
Source: Valuation Magazine, Appraisal Institure
*As of April 2006, the Fed went back to reporting 30-yr rates; the historical data is 20+ year rates. A factor for
adjusting the daily nominal 20-year constant maturity in order to estimate a 30-year nominal rate can be found
at www.treas.gov/offices/domestic-finance/debt-management/interest-rate/ltcompositeindex.html.
The Fed uses the discount rate to control the supply of available funds, which in turn influences inflation
and overall interest rates. The more money available, the more likely inflation will occur. Raising the rate
makes it more expensive to borrow from the Fed. That lowers the supply of available money, which in-
creases the short-term interest rates. Lowering the rate has the opposite effect, bringing short-term inter-
est rates down.
Real estate differs from these rates as it has more risk and is not as liquid an investment. From these
rates, the premiums for risk and liquidity can be estimated. The following chart analyzes these factors.

Prime Rate Baa Bonds 30 yr.

vs. Reserve vs. Aaa Bonds Vs.
Bank Rate Bonds 5 yr. Bonds
Period (2) - (1) (4) - (3) (6) - (5)
Feb-09 2.75 2.83 1.74
Ma y-09 2.75 3.80 2.10
Oct-09 2.75 1.14 1.86
Ja n-10 2.75 0.99 2.12
Apr-10 2.50 0.96 2.11
Jul -10 2.50 2.32 2.23
Oct-10 2.50 1.04 2.69
Ja n-11 2.50 1.23 2.53
Apr-11 2.50 1.09 2.33
Jul -11 2.50 0.83 2.73
Sep-11 2.50 1.18 2.28
Dec-11 2.50 1.32 2.09
Ma r-12 2.50 1.24 2.26
Sep-12 2.50 1.35 2.21
Dec-12 2.50 0.98 2.18
Jun-13 2.50 0.92 2.20
Sep-13 2.50 0.83 2.19
Dec-13 2.50 0.76 2.31
Ma r-14 2.50 0.68 1.98
Jun-14 2.50 0.57 1.74
Sep-14 2.50 0.69 1.49
Dec-14 2.50 0.95 1.19
Ma r-15 2.50 0.90 1.11
Sep-15 2.50 1.27 1.46
Dec-15 2.50 1.45 1.27
Ma r-16 2.50 1.31 1.30
Jun-16 2.50 1.03 1.28
Sep-16 2.50 0.90 1.20
Dec-16 2.50 0.77 1.13
Ma r-17 2.50 0.67 1.09
Jun-17 2.50 0.69 0.93
Dec-17 2.50 0.71 0.59
Ma r-18 2.50 0.37
Mea n 2.53 1.17 1.77
Sta nda rd Devi a ti on 0.08 0.65 0.60
Mi ni mum of Ra nge 2.50 0.57 0.37
Using these rates as a guideline, we can build up a discount rate for real estate investments, the basis for
which can be Aaa and Baa bonds, since real estate investors could easily invest in that alternative. The
premium for risk can be supported by the difference between the Reserve Bank Discount Rate and the
Prime Rate and the difference between Aaa and Baa bonds, since these differences are entirely related
to risk. The premium for the illiquidity of real estate can be supported by the difference between US 5-
Year Taxable Bonds and US 30-Year Taxable Bonds; in the case of these bonds, the difference is not il-
liquidity per se, since both can be easily sold, but the length of time the investors dollars are committed
and the risk of a long term investment versus a short term investment. However, for our purposes, we can
use this as a barometer of illiquidity.

As indicated previously, two premiums were extracted for risk and one premium was extracted for illiquidi-
ty of real estate. Due to the incomplete data for March 2018, the following example uses the December
2017 bond rates to illustrate the technique used to build the discount rate ranges, shown as follows:
Risk 0.00 2.50

Liquidity 0.37 0.37
Indicated Rates 0.37 2.87
Baa Bonds March 1, 2018 N/A N/A
Risk 0.00 2.50
Liquidity 0.37 0.37
Indicated Rates 0.37 2.87
The historical changes in the derived rates over the past several years are shown in the following table.
Based on Aaa Bonds Based on Baa Bonds

Indicated Discount Rate Indicated Discount Rate
Period Minimum Maximum Minimum Maximum
Sep-13 7.66 9.33 8.49 10.16
Dec-13 7.69 9.43 8.45 10.19
Ma r-14 7.04 8.86 7.72 9.54
Jun-14 6.55 8.48 7.12 9.05
Sep-14 6.29 8.10 6.98 8.79
Dec-14 5.93 7.48 6.88 8.43
Ma r-15 5.65 7.25 6.55 8.15
Sep-15 6.80 8.03 8.07 9.30
Dec-15 6.75 7.80 8.20 9.25
Ma r-16 6.43 7.62 7.74 8.93
Jun-16 5.81 7.28 6.84 8.31
Sep-16 5.51 7.11 6.41 8.01
Dec-16 5.96 7.69 6.73 8.46
Ma r-17 5.77 7.60 6.44 8.27
Jun-17 5.30 7.11 5.99 7.80
Ma r-18 N/A N/A N/A N/A
Support for these indicated discount rates can be found in the Real Estate Investor Survey, published by
PwC Real Estate Investor Survey.

Following is a summary of pre-tax yields by property type for the past several years.
PRE-TAX YIELD (IRR%) BY PROPERTY TYPE

Retail Office
Industrial Regional Power Apt.
Peri od Warehouse Mall Centers Strip CBD Suburb All
1Q/16 Range 5.50-9.25 5.00-12.00 6.00-10.00 6.00-10.75 5.50-10.00 5.75-10.00 5.00-10.00
Avg. 6.94 7.63 7.75 7.66 6.88 7.52 7.28
2Q/16 Range 5.50-9.25 5.00-11.50 6.00-10.00 6.00-10.75 5.50-10.00 5.75-10.00 5.00-10.00
Avg. 6.90 7.65 7.79 7.54 7.18 7.59 7.28
3Q/16 Range 5.50-9.25 5.00-11.50 6.00-10.00 5.50-10.75 5.50-10.00 5.75-10.00 5.50-10.00
Avg. 6.88 7.75 7.67 7.46 7.23 7.59 7.25
4Q/16 Range 5.50-9.25 5.00-11.50 6.00-10.00 5.50-10.75 5.50-10.00 6.00-10.50 5.50-10.00
Avg. 6.84 7.75 7.67 7.39 7.16 7.86 7.30
1Q/17 Range 5.50-9.00 5.50-11.50 6.00-10.00 5.00-10.50 5.50-9.50 6.00-10.50 5.50-10.00
Avg. 6.74 7.70 7.69 7.39 7.09 7.88 7.24
2Q/17 Range 5.50-9.00 5.50-11.50 6.00-10.00 5.50-10.50 5.50-9.50 6.00-11.50 5.50-10.00
Avg. 6.66 7.60 7.56 7.32 7.05 7.97 7.28
3Q/17 Range 5.50-9.00 5.00-11.50 6.00-10.00 5.50-10.50 5.50-9.50 6.00-11.50 5.00-10.00
Avg. 6.65 7.60 7.53 7.25 7.13 8.03 7.28
4Q/17 Range 5.50-9.00 5.00-11.50 6.00-10.00 5.50-10.50 5.50-9.50 6.00-12.00 5.50-10.00
Avg. 6.60 7.60 7.62 7.50 7.05 8.34 7.26
Range 5.50-9.00 5.00-11.50 6.00-10.00 5.50-10.50 5.25-9.00 6.00-12.00 5.25-10.00
1Q/18
Avg. 6.55 7.60 7.45 7.46 6.95 8.32 7.23
Range 5.50-9.00 5.00-11.50 6.00-10.00 5.50-10.50 5.25-9.00 6.00-12.00 5.25-10.00
2Q/18
Avg. 6.36 7.55 7.63 7.43 6.91 8.29 7.20
So urces: P wC, Quarterly Survey o f Real Estate Investo rs
The discount rates calculated previously based on a comparison of Aaa and Baa Bonds fall within the
range found in the study above. Changes in the average IRR indications were mixed but generally lower
over the past quarter and lower over the past year as reported in PwC. Apartments (-3 basis points),
Warehouse (-19 basis points), Suburban Office (-3 basis points), CBD Office (-4 basis points), Strip Retail
(-3 basis points), Power Center (+18 basis points), and Regional Mall (-5 basis points). Additionally, rates
are generally lower over the past year. Apartments (-8 basis points), Warehouse (-30 basis points), Sub-
urban Office (+32 basis points), CBD Office (-14 basis points), Strip Retail (+11 basis points), Power Cen-
ter (+7 basis points), and Regional Mall (-5 basis points).
Based upon the preceding discussion, a discount rate of 6.25% is considered appropriate for the subject
taking into consideration its age and the long-term nature of a majority of the rental revenue, as well as
the step rent built into the leases.
The major DCF assumptions are summarized within the following table.

Summary of Major DCF Assumptions

Holding Period (Yrs) 10
Residual Rate 5.50%
Discount Rate 6.25%
Inflation Rates
Income 3.00%
Expenses 3.00%
CPI 3.00%
Market Rent
Small In-Line $40.00
Large In-Line $30.00
Pad/End Cap $45.00
Tenant Finish $20.00/$2.00
Leasing Commissions (New/Renewal) 6%/4%
Vacancy 4.00%
Credit Loss 1.00%
Selling Costs 2.00%
Value Conclusion by DCF

Based upon the foregoing assumptions, the indicated value via the Discounted Cash Flow Analysis is
$45,900,000. The Discounted Cash Flow Analysis is presented on the following pages.

Cash Flow Report
Florham Park Plaza (Amounts in USD)
Oct, 2018 through Sep, 2029
9/27/2018 4:04:32 PM
Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
For the Years Ending Sep-2019 Sep-2020 Sep-2021 Sep-2022 Sep-2023 Sep-2024 Sep-2025 Sep-2026 Sep-2027 Sep-2028 Sep-2029 Total
Rental Revenue
Potential Base Rent 2,351,331 2,417,028 2,512,687 2,592,478 2,642,934 2,662,929 2,680,942 2,720,081 2,763,306 2,807,378 2,845,053 28,996,146
Absorption & Turnover Vacancy 0 -29,527 -17,187 -14,570 -55,634 0 -21,740 -72,778 -60,501 -48,598 -17,919 -338,453
Scheduled Base Rent 2,351,331 2,387,501 2,495,500 2,577,909 2,587,300 2,662,929 2,659,202 2,647,303 2,702,805 2,758,779 2,827,134 28,657,694
CPI Increases 0 0 1,772 8,171 18,791 35,987 58,111 81,226 115,171 159,595 214,970 693,793
Total Rental Revenue 2,351,331 2,387,501 2,497,272 2,586,079 2,606,091 2,698,916 2,717,314 2,728,529 2,817,976 2,918,374 3,042,104 29,351,487

Total Expense Recoveries 698,638 717,743 743,603 768,757 773,017 815,013 831,446 831,239 868,468 899,329 935,923 8,883,177
Total Other Tenant Revenue 698,638 717,743 743,603 768,757 773,017 815,013 831,446 831,239 868,468 899,329 935,923 8,883,177
Total Tenant Revenue 3,049,969 3,105,245 3,240,875 3,354,836 3,379,108 3,513,929 3,548,759 3,559,768 3,686,444 3,817,704 3,978,027 38,234,664
Potential Gross Revenue 3,049,969 3,105,245 3,240,875 3,354,836 3,379,108 3,513,929 3,548,759 3,559,768 3,686,444 3,817,704 3,978,027 38,234,664

Vacancy Allowance -52,657 -26,072 -40,884 -46,147 -46,632 -64,320 -44,051 -67,628 -8,574 -23,782 -58,138 -478,887
Credit Loss -30,500 -31,052 -32,409 -33,548 -33,791 -35,139 -35,488 -35,598 -36,864 -38,177 -39,780 -382,347
Total Vacancy & Credit Loss -83,157 -57,125 -73,293 -79,696 -80,423 -99,460 -79,539 -103,226 -45,439 -61,959 -97,918 -861,234
Effective Gross Revenue 2,966,812 3,048,120 3,167,582 3,275,140 3,298,685 3,414,469 3,469,220 3,456,542 3,641,005 3,755,745 3,880,109 37,373,430
Operating Expenses
RE Tax 248,718 256,180 263,865 271,781 279,934 288,332 296,982 305,892 315,069 324,521 334,256 3,185,529
Insurance 22,639 23,318 24,018 24,738 25,480 26,245 27,032 27,843 28,678 29,539 30,425 289,956
CAM 210,220 216,526 223,022 229,713 236,604 243,702 251,013 258,544 266,300 274,289 282,518 2,692,452
Management 178,009 182,887 190,055 196,508 197,921 204,868 208,153 207,393 218,460 225,345 232,807 2,242,406
G&A 45,278 46,636 48,036 49,477 50,961 52,490 54,064 55,686 57,357 59,078 60,850 579,913
Total Operating Expenses 704,864 725,548 748,995 772,217 790,901 815,637 837,246 855,358 885,864 912,771 940,856 8,990,256
Net Operating Income 2,261,948 2,322,572 2,418,587 2,502,923 2,507,784 2,598,832 2,631,975 2,601,185 2,755,141 2,842,974 2,939,254 28,383,174
Leasing Costs
Tenant Improvements 25,000 32,775 19,077 16,172 76,400 0 24,131 107,711 67,156 40,427 33,813 442,662
Leasing Commissions 0 81,494 47,435 40,212 153,550 0 60,002 200,867 166,983 100,521 84,075 935,138
Total Leasing Costs 25,000 114,268 66,512 56,385 229,949 0 84,133 308,578 234,139 140,948 117,888 1,377,799
Capital Expenditures
reserves 9,702 9,994 10,293 10,602 10,920 11,248 11,585 11,933 12,291 12,659 13,039 124,267
Total Capital Expenditures 9,702 9,994 10,293 10,602 10,920 11,248 11,585 11,933 12,291 12,659 13,039 124,267
Total Leasing & Capital Costs 34,702 124,262 76,805 66,987 240,870 11,248 95,718 320,511 246,429 153,607 130,928 1,502,066
Cash Flow Before Debt Service 2,227,246 2,198,310 2,341,782 2,435,936 2,266,914 2,587,584 2,536,257 2,280,674 2,508,711 2,689,367 2,808,326 26,881,107
Cash Flow Available for Distribution 2,227,246 2,198,310 2,341,782 2,435,936 2,266,914 2,587,584 2,536,257 2,280,674 2,508,711 2,689,367 2,808,326 26,881,107

Present Value Report
9/27/2018 4:05:07 PM
Valuation (PV/IRR) Date: Oct, 2018
Discount Method: Annual
P.V. of P.V. of P.V. of P.V. of P.V. of NOI to

Analysis Period Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Book
Period Ending Before Debt Service @ 5.75 % @ 6.00 % @ 6.25 % @ 6.50 % @ 6.75 % Value
Year 1 Sep-2019 2,227,246 2,106,142 2,101,175 2,096,231 2,091,310 2,086,413 6518.12%
Year 2 Sep-2020 2,198,310 1,965,750 1,956,488 1,947,292 1,938,161 1,929,093 1461.07%
Year 3 Sep-2021 2,341,782 1,980,183 1,966,205 1,952,359 1,938,642 1,925,053 1025.83%
Year 4 Sep-2022 2,435,936 1,947,800 1,929,490 1,911,394 1,893,509 1,875,834 826.71%
Year 5 Sep-2023 2,266,914 1,714,089 1,693,970 1,674,135 1,654,577 1,635,293 461.31%
Year 6 Sep-2024 2,587,584 1,850,172 1,824,144 1,798,543 1,773,359 1,748,587 468.36%
Year 7 Sep-2025 2,536,257 1,714,868 1,686,756 1,659,169 1,632,097 1,605,529 404.55%
Year 8 Sep-2026 2,280,674 1,458,210 1,430,923 1,404,209 1,378,054 1,352,447 267.86%
Year 9 Sep-2027 2,508,711 1,516,797 1,484,902 1,453,752 1,423,326 1,393,605 226.29%
Year 10 Sep-2028 2,689,367 1,537,611 1,501,729 1,466,766 1,432,696 1,399,495 207.34%
Totals 24,072,782 17,791,621 17,575,783 17,363,849 17,155,732 16,951,348
Property Resale @ 5.50 % Cap Rate 52,372,154 29,943,094 29,244,337 28,563,476 27,900,010 27,253,457
Total Unleveraged Present Value 47,734,715 46,820,120 45,927,324 45,055,742 44,204,806
Percentage Value Distribution

Income 37.27% 37.54% 37.81% 38.08% 38.35%
Net Sale Price 62.73% 62.46% 62.19% 61.92% 61.65%
100.00% 100.00% 100.00% 100.00% 100.00%
* Results displayed are based on Forecast data only

Conclusion
The Direct Capitalization Approach utilized the projected Year One income and applied a capitalization
rate of 5.00%. Within the Discounted Cash Flow Analysis, a 10-year holding period was utilized with an
11-year projection period. A discount rate of 6.25%, a terminal capitalization rate of 5.50% was indicated.
The value conclusions of each of these methods are included in the following table. Due to the stabilized
nature of the subject, both techniques were given consideration within this analysis.
Income Capitalization Approach Summary

Technique As Is
Direct Capitalization $45,200,000
Discounted Cash Flow Analysis $45,900,000
Reconciled Value $45,900,000

RECONCILIATION AND FINAL VALUE CONCLUSION
Reconciliation
Reconciliation and correlation of Fair Value is performed when more than one approach to value is used
to value real property and weighs the relative significance, applicability, and defensibility of each value
indication and relies most heavily on the one that is most appropriate to the purpose of the appraisal. The
conclusion drawn in the reconciliation is based on the appropriateness, the accuracy, and the quantity of
the evidence in the entire appraisal.
The reconciled values for the subject, via the applicable approaches to value, are as follows.
Sales Comparison Approach $45,900,000

Income Capitalization Approach $45,900,000
Cost Approach N/A
The Sale Price per Square Foot comparison, recognized and used by potential purchasers, was
employed in this analysis. The sales included sales of similar shopping centers from throughout the
region. The Sales Comparison Approach is a good indicator of value, and serves as secondary support to
the Income Capitalization Approach.
In the Income Capitalization Approach, the Direct Capitalization technique and Discounted Cash Flow
Analysis were employed. The net operating income of the subject is derived through market driven
income and expense estimates. The subject’s contract rents are well supported by the actual leases and
are in line with the complexes in the immediate area. The capitalization rate was extracted from the sales
data and is well supported by the PwC investor survey and broker interviews. The overall rate is
appropriate considering the risk and future expectation of this area. Most weight was given to this
approach due to its reliance on current market data in terms of rent and expense levels.
Therefore, it is our opinion that the “as is” Fair Value of the Leased Fee interest in the subject property, as
of September 30, 2018, subject to the extraordinary and general underlying assumptions and limiting
conditions, will be
$45,900,000


RECONCILIATION AND FINAL VALUE CONCLUSION
Exposure Time
Per the Appraisal Standards Board (ASB) of the Appraisal Foundation, “reasonable marketing time” is an
estimate of the amount of time it might take to sell a property interest at the estimated Fair Value during
the period immediately after the effective date of the appraisal. It is not intended to be a prediction of a
specific date of sale and, therefore, may be expressed as a range. Exposure time is defined as 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 Fair Value on the effective date of appraisal.
The demand for quality retail properties as real estate investments has improved over the past several
years. The 3rd Quarter 2018 PwC Real Estate Investor Survey indicates a 6.8-month average marketing
time for shopping centers. This is the same as the 6.8 months indicated for the past quarter but more than
6.1 months indicated for the prior year. This is supported by our discussions with brokers and investors.
Therefore, it is our opinion that the subject could be sold within twelve months at the Fair Value
conclusion depicted herein. A marketing period of 12 months or less is also appropriate for the subject.

EXHIBITS
GLOSSARY ..................................................................................................................................... A
CLIENT ENGAGEMENT LETTER ................................................................................................... B
SUBJECT PICTURES ..................................................................................................................... C
LEGAL DESCRIPTION ................................................................................................................... D
RENT ROLL .................................................................................................................................... E
OPERATING STATEMENTS ........................................................................................................... F
COMPARABLE IMPROVED SALES .............................................................................................. G
COMPARABLE RENTALS.............................................................................................................. H
ARGUS INPUT ASSUMPTIONS AND SUPPORTING REPORTS ................................................... I
PROFESSIONAL QUALIFICATIONS .............................................................................................. J

GLOSSARY
FLORHAM PARK PLAZA TAB A

Assessed Value: The value of a property according to the tax rolls in ad Economic Life: The period over which improvements to real property
valorem taxation; may be higher or lower than market value, or based on an contribute to property value. 1
assessment ratio that is a percentage of market value. 1
Effective Date: 1) The date on which the analyses, opinions, and advice in an
Asset: appraisal, review, or consulting service apply. 2) In a lease document, the date
1. Any item, the rights to which may have economic value, including upon which the lease goes into effect.1
financial assets (cash or bonds), business interests, intangible assets
(copyrights and trademarks), and physical assets (real estate and Effective Gross Income Multiplier (EGIM): The ratio between the sale price
personal property). (or value) of a property and its effective gross income. 1
2.
In general business usage, something owned by a business and
reflected in the owner’s business sheet. Effective Rent: Total base rent, or minimum rent stipulated in a lease, over the
specified lease term minus rent concessions, the rent that is effectively paid by a
Asset: A resource controlled by the entity as a result of past events and from tenant net of financial concessions provided by a landlord. 1
which future economic benefits are expected to flow to the entity. 2
Exposure Time: 1) The time a property remains on the market. 2) The
Capital Expenditure: Investments of cash (or the creation of liability) to estimated length of time the property interest being appraised would have been
acquire or improve an asset, e.g., land, buildings, building additions, site offered on the market prior to the hypothetical consummation of a sale at
improvements, machinery, equipment; as distinguished from cash outflows for market value on the effective date of the appraisal. Comment: Exposure time
expense items that are normally considered part of the current period’s is a retrospective opinion based on an analysis of past events assuming a
operations. 1 competitive and open market (USPAP 2016-2017-ed). 1
Cash Equivalency: An analytical process in which the sale price of a
transaction with nonmarket financing or financing with unusual conditions or Extraordinary Assumptions: An assumption, directly related to a specific
incentives is converted into a price expressed in terms of cash or its equivalent.1 assignment, as of the effective date of the assignment results, which, if found to
be false, could alter the appraiser’s opinions or conclusions. Comment:
Client: Extraordinary assumptions presume as fact otherwise uncertain information
about physical, legal, or economic characteristics of the subject property, or
1. The individual, group, or entity who engages a valuer to perform a about conditions external to the property, such as market conditions or trends;
service (USPAP) or about the integrity of data used in an analysis. (USPAP, 2016-2017 ed). 1
2. The party or parties who engage, by employment or contract, an
appraiser in a specific assignment. Comment: The client may be Fair Market Value: In nontechnical usage, a term that is equivalent to the
an individual, group, or entity, and may engage and communicate contemporary usage of market value. 1
with the appraiser directly or through an agent (USPAP,
2016-17-ed). Fair Share: That portion of total market supply accounted for by a subject
3. Generally the party or parties ordering the appraisal report. It does property. For example, a 100-key hotel in 1,000-key market has a fair share of
not matter who pays for the work (CUSPAP, 2014-ed).1 10%. 1
Condominium Ownership: A form of fee ownership of separate units or Fair Value:

portions of multiunit buildings that provides for formal filing and recording of a
divided interest in real property.3 1. The price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
Cost Approach: A set of procedures through which a value indication is measurement date. (FASB)
derived for the fee simple interest in a property by estimating the current cost to 2. The estimated price for the transfer of an asset or liability between
construct a reproduction of (or replacement for) the existing structure, identified knowledgeable and willing parties that reflects the
including an entrepreneurial incentive, deducting depreciation from the total respective interests of those parties. (This does not apply to
cost, and adding the estimated land value. Adjustments may then be made to the valuations for financial reporting.) (IVS).1
indicated fee simple value of the subject property to reflect the value of the
property interest being appraised. 1 Fair Value: The price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the
Credible: measurement date.2
1. Worthy of belief, supported by analysis of relevant information. Fee Simple Estate: Absolute ownership unencumbered by any other interest or
Creditability is always measured in the context of intended use. estate, subject only to the limitations imposed by the governmental powers of
(SVP) taxation, eminent domain, police power, and escheat. 1
2. Worthy of belief. Comment: Creditable assignment results
require support, by relevant evidence and logic, to the degree Floor Area Ratio (FAR): The relationship between the above-ground floor
necessary for the intended use. (USPAP, 2016-2017-ed.).1 area of a building, as described by the zoning or building code, and the area of
the plot on which it stands; in planning and zoning, often expressed as a
Deferred Maintenance: Needed repairs or replacement of items that should decimal, e.g., a ratio of 2.0 indicates that the permissible floor area of a building
have taken place during the course of normal maintenance. 1 is twice the total land area. 1
Disposition Value: The most probable price that a specified interest in real Going-Concern Value: 1) 73. An established and operating business having
property should bring under the following conditions: 1) Consummation of a an indefinite future life. 2) 74. An organization with an indefinite life that is
sale within a specific time, which is short than the typical exposure time for sufficiently long that, over time, all currently incomplete transformations
such a property in that market. 2) The property is subjected to market [transforming resources from one form to a different, more valuable form] will
conditions prevailing as of the date of valuation. 3) Both the buyer and seller are be completed. 1
acting prudently and knowledgeably. 4) The seller is under compulsion to sell.
5) The buyer is typically motivated. 6) Both parties are acting in what they Gross Building Area (GBA): 1) Total floor area of a building, excluding
consider to be their best interests. 7) An adequate marketing effort will be made unenclosed areas, measured from the exterior of the walls of the above-grade
during the exposure time. 8) Payment will be made in cash in U.S. dollars (or area. This includes mezzanines and basements if and when typically included in
the local currency) or in terms of financial arrangements comparable thereto. 9) the market area of the type of property involved. 2) Gross leasable area plus all
The price represents the normal consideration of the property sold, unaffected common areas. 3) 16. For residential space, the total area of all floor levels
by special or creative financing or sales concessions granted by anyone measured from the exterior of the walls and including the super structure and
associated with the sale. This definition can also be modified to provide for substructure basement; typically does not include garage space. 1
valuation with specified financing terms. 1
Glossary Page 1
Highest and Best Use: 1) The reasonably probable use of property that results patterns is a proper method for developing market discount rates for use in
in the highest value. The four criteria that the highest and best use must meet are valuations to arrive at Market Value. Used in discounted cash flow analysis to
legal permissibility, physical possibility, financial feasibility, and maximum find the implied or expected rate of return of the project, the IRR is the rate of
productivity. 2) The use of an asset that maximizes its potential and that is return which gives a zero net present value (NPV). See also equity yield rate
possible, legally permissible, and financially feasible. The highest and best use (YE); financial management rate of return (FMRR); modified internal rate of
may be for continuation of an asset’s existing use or for some alternative use. return (MIRR); yield rate (Y). 1
This is determined by the use that a market participant would have in mind for
the asset when formulating the price that it would be willing to bid. (IVS). 3) Investment Value: 1) The value of a property to a particular investor or class
[The] highest and most profitable use for which the property is adaptable and of investors based on the investor’s specific requirements. Investment value
needed or likely to be needed in the reasonably near future. (Uniform Appraisal may be different from market value because it depends on a set of investment
Standards for Federal Land Acquisitions) 1 criteria that are not necessarily typical of the market. 2) The value of an asset to
the owner or a prospective owner for individual investment or operational
Hypothetical Condition: 1) 117. A condition that is presumed to be true when objectives. (IVS) 1
it is known to be false. (SVP). 2) A condition, directly related to a specific
assignment, which is contrary to what is known by the appraiser to exist on the Leasehold Interest: The right held by the lessee to use and occupy real estate
effective date of the assignment results, but is used for the purpose of analysis. for a stated term and under the conditions specified in the lease. 1
Comment: Hypothetical conditions are contrary to known facts about
physical, legal, or economic characteristics of the subject property; or about Leased Fee Interest: The ownership interest held by the lessor, which includes
conditions external to the property, such as market conditions or trends; or the right to receive the contract rent specified in the lease plus the reversionary
about the integrity of data used in an analysis. (USPAP, 2016-2017 ed.) 1 right when the lease expires. 1
Income Capitalization Approach: Specific appraisal techniques applied to Liquidation Value: The most probable price that a specified interest in real
develop a value indication for a property based on its earning capability and property should bring under the following conditions: 1) Consummation of a
calculated by the capitalization of property income. 1 sale within a short time period; 2) The property is subjected to market
conditions prevailing as of the date of valuation; 3) Both the buyer and seller
Inspection: Personal observation of the exterior or interior of the real estate are acting prudently and knowledgeably; 4) The seller is under extreme
that is the subject of an assignment performed to identify the property compulsion to sell; 5) The buyer is typically motivated. 6) Both parties are
characteristics that are relevant to the assignment, such as amenities, general acting in what they consider to be their best interests. 7) A normal marketing
physical condition, and functional utility. Note that this is not the inspection effort is not possible due to the brief exposure time 8) Payment will be made in
process performed by a licensed or certified building inspector. 1 cash in U.S. dollars or in terms of financial arrangements comparable thereto.
9) The price represents the normal consideration for the property sold,
Insurable Value: A type of value for insurance purposes. 1 unaffected by special or creative financing or sales concessions granted by
anyone associated with the sale. This definition can also be modified to
Intangible Assets: 1) A nonmonetary asset that manifests itself by its provide for valuation with specified financing terms. 1
economic properties. It does not have physical substance but grants rights and
economic benefits to its owner. (IVS). 2) A nonphysical asset such as a Load Factor: A measure of the relationship of common area to useable area
franchise, trademark, patent, copyright, goodwill, equity, mineral right, and therefore the quality and efficiency of building area layout, with higher
security, and contract (as distinguished from physical assets) that grant rights load factors indicating a higher percentage of common area to overall rentable
and privileges, and have value for the owner. (ASA). 3) An identifiable space than lower load factors; calculated by subtracting the amount of usable
nonmonetary asset without physical substance. An asset is a resource that is area from the rentable area and then dividing the difference by the usable area: 1
controlled by the entity as a result of past events (for ex-ample, purchase or Load Factor =
self-creation) and from which future economic benefits (inflows of cash or
other assets) are expected. [IAS 38.8] Thus, the three critical attributes of an (Rentable Area – Useable Area)
intangible asset are: identifiability, control (power to obtain benefits from the Usable Area
asset), ·future economic benefits (such as revenues or reduced future costs).
(IAS 38) 1 Market Value. The major focus of most real property appraisal assignments.
Both economic and legal definitions of market value have been developed and
Intangible property: Nonphysical assets, including but not limited to refined.*
franchises, trademarks, patents, copyrights, goodwill, equities, securities, and
contracts as distinguished from physical assets such as facilities and equipment. 1. The most widely accepted components of market value are incorporated in
(USPAP, 2016-2017 ed.) 1 the following definition: The most probable price that the specified property
interest should sell for in a competitive market after a reasonable exposure time,
Intended Use: 1) The valuer’s intent as to how the re-port will be used. (SVP) as of a specified date, in cash, or in terms equivalent to cash, under all
2) The use or uses of an appraiser’s reported appraisal or appraisal review conditions requisite to a fair sale, with the buyer and seller each acting
assignment opinions and conclusions, as identified by the appraiser based on prudently, knowledgeably, for self-interest, and assuming that neither is under
communication with the client at the time of the assignment. (USPAP, duress.
2016-2017 ed.) 1`
2. Market value is described, not defined, in the Uniform Standards of
Intended User: 1) The party or parties the valuer intends will use the report. Professional Appraisal Practice (USPAP) as follows: A type of value, stated as
(SVP) 2) The client and any other party as identified, by name or type, as users an opinion, that presumes the transfer of a property (i.e., a right of ownership or
of the appraisal or appraisal review report by the appraiser on the basis of a bundle of such rights), as of a certain date, under specific conditions set forth
communication with the client at the time of the assignment. (USPAP, in the definition of the term identified by the appraiser as applicable in an
2016-2017 ed.) 1` appraisal. Comment: Forming an opinion of market value is the purpose of
many real property appraisal assignments, particularly when the client’s
Internal Rate of Return (“IRR”): The annualized yield rate or rate of return intended use includes more than one intended user. The conditions included in
on capital that is generated or capable of being generalized within an market value definitions establish market perspectives for development of the
investment of portfolio over a period of ownership. Alternatively, the opinion. These conditions may vary from definition to definition but generally
indicated return of capital associated with a projected or pro forma income fall into three categories:
stream. The discount rate that equates the present value of the net cash
flows of a project with the present value of the capital investment. It is the rate - the relationship, knowledge, and motivation of the parties (i.e., seller and
at which the Net Present Value (NPV) equals zero. The IRR reflects both the buyer);
return on invested capital and the return of the original investment, which are - the terms of sale (e.g., cash, cash equivalent, or other terms); and
basic considerations of potential investors. Therefore, deriving the IRR from - the conditions of sale (e.g., exposure in a competitive market for a
analysis of market transactions of similar properties having comparable income reasonable time prior to sale).
Glossary Page 2
USPAP also requires that certain items be included in every appraisal report. Market Value of the Total Assets of the Business: The market value of the
Among these items, the following are directly related to the definition of market total assets of the business is the market value of all of the tangible and
value: intangible assets of a business as if sold in aggregate as a going concern. This
- Identifications of the specific property rights to be appraised. assumes that the business is expected to continue operations well into the
- Statement of the effective date of the value opinion. future. 4
- Specification as to whether cash, terms equivalent to cash, or other
precisely described financing terms are assumed as the basis of the Marketing Time: An opinion of the amount of time it might take to sell a real
appraisal. or personal property interest at the concluded market value level during the
- If the appraisal is conditioned upon financing or other terms, period immediately after the effective date of an appraisal. Marketing time
specification as to whether the financing or terms are at, below, or differs from exposure time, which is always presumed to precede the effective
above market interest rates and/or contain unusual conditions or date of an appraisal. (Advisory Opinion 7 of the Appraisal Standards Board of
incentives. The terms of above- or below-market interest rates and/or The Appraisal Foundation and Statement on Appraisal Standards No. 6,
other special incentives must be clearly set forth; their contribution to, “Reasonable Exposure Time in Real Property Market Value Opinions” address
or negative influence on, value must be described and estimated; and the determination of reasonable exposure and marketing time.). 3
the market data supporting the opinion of value must be described and
explained. Net Lease: A lease in which the landlord passes on all expenses to the tenant.
3. The following definition of market See also lease. 1
value is used by agencies that regulate federally insured financial institutions in
the United States: The most probable price that a property should bring in a Net Rentable Area (NRA): 1) The area on which rent is computed. 2) The
competitive and open market under all conditions requisite to a fair sale, the Rentable Area of a floor shall be computed by measuring to the inside finished
buyer and seller each acting prudently and knowledgeably, and assuming the surface of the dominant portion of the permanent outer building walls,
price is not affected by undue stimulus. Implicit in this definition is the excluding any major vertical penetrations of the floor. No deductions shall be
consummation of a sale as of a specified date and the passing of title from seller made for columns and projections necessary to the building. Include space such
to buyer under conditions whereby: as mechanical room, janitorial room, restrooms, and lobby of the floor. 5
Buyer and seller are typically motivated;
Both parties are well informed or well advised, and each acting in what they Penetration Ratio (Rate): The rate at which stores obtain sales from within a
consider their own best interests; trade area or sector relative to the number of potential sales generated; usually
A reasonable time is allowed for exposure in the open market; applied to existing facilities. Also called: penetration factor.1
Payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and Prospective opinion of value. A value opinion effective as of a specified
· The price represents the normal consideration for the property sold future date. The term does not define a type of value. Instead it identifies a
unaffected by special or creative financing or sales concessions granted by value opinion as being effective at some specific future date. An opinion of
anyone associated with the sale. value as of a prospective date is frequently sought in connection with projects
(12 C.F.R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as that are proposed, under construction, or under conversion to a new use, or
amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register those that have not yet achieved sellout or a stabilized level of long-term
29499, June 7, 1994) occupancy. 1
4. The International Valuation Standards Council defines market value for the
purpose of international standards as follows: The estimated amount for which Reconciliation: A phase of a valuation assignment in which two or more value
an asset or liability should exchange on the valuation date between a willing indications are processed into a value opinion, which may be a range of value, a
buyer and a willing seller in an arm’s length transaction, after proper marketing single point estimate, or a reference to a benchmark value. 1
and where the parties had each acted knowledgeably, prudently and without
compulsion. (IVS) Reliable Measurement: [The IAS/IFRS framework requires that] neither an
asset nor a liability is recognized in the financial statements unless it has a cost
5. The Uniform Standards for Federal Land Acquisitions defines market value or value that can be measured reliably.2
as follows: Market value is the amount in cash, or on terms reason ably
equivalent to cash, for which in all probability the property would have sold on Remaining Economic Life: The estimated period over which existing
the effective date of the appraisal, after a reasonable exposure time on the open improvements are expected to contribute eco-nomically to a property; an
competitive market, from a willing and reasonably knowledgeable seller to a estimate of the number of years remaining in the economic life of a structure or
willing and reasonably knowledgeable buyer, with neither acting under any structural components as of the effective date of the appraisal; used in the
compulsion to buy or sell, giving due consideration to all available economic economic age-life method of estimating depreciation. 1
uses of the property at the time of the appraisal. (Uniform Appraisal Standards
for Federal Land Acquisitions) 1 Replacement Cost: The estimated cost to construct, at current prices as of the
effective appraisal date, a substitute for the building being appraised, using
Market Value "As If Complete" On The Appraisal Date: modern materials and current standards, design, and layout. 1
Market value as if complete on the effective date of the appraisal is an estimate
of the market value of a property with all construction, conversion, or Retrospective Value Opinion: A value opinion effective as of a specified
rehabilitation hypothetically completed, or under other specified hypothetical historical date. The term retrospective does not define a type of value. Instead,
conditions as of the date of the appraisal. With regard to properties wherein it identifies a value opinion as being effective at some specific prior date. Value
anticipated market conditions indicate that stabilized occupancy is not likely as as of a historical date is frequently sought in connection with property tax
of the date of completion, this estimate of value should reflect the market value appeals, damage models, lease renegotiation, deficiency judgments, estate tax,
of the property as if complete and prepared for occupancy by tenants. and condemnation. Inclusion of the type of value with this term is appropriate,
e.g., “retrospective market value opinion.” 1
Market Value "As Is" On The Appraisal Date: 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. See also effective date; prospective value opinion.
Glossary Page 3
Sales Comparison Approach: The process of deriving a value indication for
the subject property by comparing sales of similar properties to the property
being appraised, identifying appropriate units of comparison, and making
adjustments to the sale prices (or unit prices, as appropriate) of the comparable
properties based on relevant, market-derived elements of comparison. The sales
comparison approach may be used to value improved properties, vacant land, or
land being considered as though vacant when an adequate supply of
comparable sales is available. 1
Scope of Work: 1) The type of data and the extent of research and analyses.
(SVP). 2) The type and extent of research and analyses in an appraisal or
appraisal review assignment. (USPAP, 2016¬2017 ed.) 1
Stabilized value: A value opinion that excludes from consideration any
abnormal relationship between supply and demand such as is experienced in
boom periods when cost and sale price may exceed the long-term value, or
during periods of depression, when cost and sale price may fall short of
long-term value. It is also a value opinion that excludes from consideration any
transitory condition that may cause excessive construction costs, e.g., a
premium paid due to a temporary shortage of supply.
Substitution: The principle of substitution states that when several similar or

commensurate commodities, goods, services are available, the one with the
lowest price will attract the greatest demand and widest distribution. This is the
primary principle upon which the cost and sales comparison approaches are
based. 3
Total Assets of a Business: Total assets of a business is defined by the

Appraisal Institute as “the tangible property (real property and personal
property, including inventory and furniture, fixtures and equipment) and
intangible property (cash, workforce, contracts, name, patents, copyrights, and
other residual intangible assets, to include capitalized economic profit).”
Use Value:
The value of a property assuming a specific use, which may or may not be the
property’s highest and best use on the effective date of the appraisal. Use value
may or may not be equal to market value but is different conceptually. 1
1
Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago:
Appraisal Institute 2010). 2Appraisal Institute, International Financial
Reporting Standards for Real Property Appraiser, IFRS Website,
www.ifrs-ebooks.com/index.html. 3Appraisal Institute, The Appraisal of Real
Estate, 13th ed. (Chicago: Appraisal Institute 2008). 4 This definition is taken
from “Allocation of Business Assets Into Tangible and Intangible Components:
A New Lexicon,” Journal of Real Estate Appraisal, January 2002, Volume
LXX, Number 1. This terminology is to replace former phrases such as: value
of the going concern. 5Financial Publishing Company, The Real Estate
th
Dictionary, 7 ed. 6 U.S. Treasury Regulations
Glossary Page 4
CLIENT ENGAGEMENT LETTER
FLORHAM PARK PLAZA TAB B

SUBJECT PICTURES
FLORHAM PARK PLAZA TAB C

Subject Photo
West Wing
BBG, Inc. Florham Park Plaza – Florham Park, NJ

Southwest Corner of West Wing
West End of West Wing

Southwest Corner of South Wing
Outparcel

Columbia Turnpike Looking West
James Street Looking North

James Street Looking South
Tenant Space

Tenant Space
Tenant Space

Tenant Space
Tenant Space

Tenant Space
Tenant Space

Tenant Space

LEGAL DESCRIPTION
FLORHAM PARK PLAZA TAB D

Legal Description
RENT ROLL
FLORHAM PARK PLAZA TAB E

Date: 9/14/2018
Rent Roll Time: 10:44:06AM
06 - Klein Florham Park, LLC As of 9/14/2018 Reported Sales Volume Date: 9/14/2018
Total Deposit Information

Unit Square Market Current Primary Actual Intended Available Dep/Int
Unit Footage Rent Tenant Lease (Rev) Move In MoveOut Date Lease (Rev) Deposit Type Ref. Balance
01 2,731.00 0.00 Dunkin Donuts DUNKI-06 (0) 8/16/2004 6/30/2025

Retail
Sales Volume: 0.00 Effective Annual Annual Next Next
Lease (Rev) Charge Type Date Frequency Amount $/Sq.Ft. Amount $/Sq.Ft. Increase Amount
Sales Base:
DUNKI-06 (0) CAM 3/1/2018 Monthly 1,899.00 0.70 22,788.00 8.34
DUNKI-06 (0) RENT 12/1/2017 Monthly 9,103.33 3.33 109,239.96 40.00 12/1/2018 9,330.92
Unit Totals: 11,002.33 132,027.96
02 11,835.00 0.00 Trader Joe's TRADE-06 (0) 7/11/2010 1/31/2026

Retail
Sales Base:
TRADE-06 (0) CAM 3/1/2018 Monthly 6,882.00 0.58 82,584.00 6.98
TRADE-06 (0) RENT 12/1/2015 Monthly 31,165.90 2.63 373,990.80 31.60 2/1/2021 34,282.19
Unit Totals: 38,047.90 456,574.80
03 2,139.00 0.00 Your Wireless Verizon WirelessVERIZ-06 (0) 10/18/2012 1/31/2022 VERIZ-06 (0) Refundable Security R 11,667.77
Retail
Sales Base:
VERIZ-06 (0) CAM 3/1/2018 Monthly 1,857.00 0.87 22,284.00 10.42
VERIZ-06 (0) RENT 12/1/2017 Monthly 6,762.43 3.16 81,149.16 37.94 12/1/2018 6,965.31
Unit Totals: 8,619.43 103,433.16
04 2,911.00 0.00 Chop't Creative Salad Co CHOPT-06 (0) 2/6/2017 5/31/2027 CHOPT-06 (0) Refundable Security R 23,955.00
Retail
Sales Base:
CHOPT-06 (0) CAM 4/1/2018 Monthly 2,428.38 0.83 29,140.56 10.01
CHOPT-06 (0) RENT 6/1/2017 Monthly 9,218.17 3.17 110,618.04 38.00 6/1/2022 10,370.44
Unit Totals: 11,646.55 139,758.60
The Klein Group Page 1 of 4

Date: 9/14/2018

05 7,034.00 0.00 The Dress Barn DRESS-06 (0) 9/1/2007 12/31/2022

Retail
Sales Base:
DRESS-06 (0) CAM 3/1/2018 Monthly 4,172.00 0.59 50,064.00 7.12
DRESS-06 (0) RENT 1/1/2013 Monthly 16,119.58 2.29 193,434.96 27.50 1/1/2021 17,585.00
Unit Totals: 20,291.58 243,498.96
06 2,000.00 0.00 Park Avenue Cleaners PARKA-06 (0)

Retail
Sales Base:
Unit Totals: 0.00 0.00
07 2,430.00 0.00 Qdoba Mexican Grill QDOBA-06 (0) 12/15/2010 3/31/2021

Retail
Sales Base:
QDOBA-06 (0) CAM 3/1/2018 Monthly 2,055.00 0.85 24,660.00 10.15
QDOBA-06 (0) RENT 4/1/2016 Monthly 7,796.25 3.21 93,555.00 38.50 4/1/2021 8,770.28
Unit Totals: 9,851.25 118,215.00
08 2,000.00 0.00 BOM Nails BOM-06 (0) 7/1/2013 10/31/2021 BOM-06 (0) Refundable Security R 30,574.00
Retail
Sales Base:
BOM-06 (0) CAM 3/1/2018 Monthly 1,579.00 0.79 18,948.00 9.47
BOM-06 (0) RENT 11/1/2016 Monthly 6,193.33 3.10 74,319.96 37.16 11/1/2021 6,962.16
Unit Totals: 7,772.33 93,267.96
09 4,300.00 0.00 Kyoto KYOTO-06 (0) 3/20/1995 3/31/2020 KYOTO-06 (0) Refundable Security R 10,750.00
Retail
Sales Base:
KYOTO-06 (0) RENT 11/1/2016 Monthly 9,416.67 2.19 113,000.04 26.28
Unit Totals: 9,416.67 113,000.04

Date: 9/14/2018

10 4,187.00 0.00 Nonna's NONNA-06 (0) 10/12/2008 4/30/2018 NONNA-06 (0) Refundable Security R 23,616.66
Retail
Sales Base:
NONNA-06 (0) CAM 5/1/2018 Monthly 3,587.87 0.86 43,054.44 10.28
NONNA-06 (0) RENT 5/1/2018 Monthly 13,209.99 3.16 158,519.88 37.86 5/1/2022 13,782.21
Unit Totals: 16,797.86 201,574.32
11 1,400.00 0.00 Sport Clips SPORTCL-06 (0) 4/12/2018 12/31/2025 SPORTCL-06 (0) Refundable Security R 12,175.00
Retail
Sales Base:
SPORTCL-06 (0) CAM 8/1/2018 Monthly 1,187.67 0.85 14,252.04 10.18
SPORTCL-06 (0) RENT 8/1/2018 Monthly 4,666.67 3.33 56,000.04 40.00 8/1/2023 5,133.33
Unit Totals: 5,854.34 70,252.08
12 2,200.00 0.00 FIREHSE-06 FIREHSE-06 (0) 11/23/2016 2/28/2027 FIREHSE-06 (0) Refundable Security R 26,400.00
Retail
Sales Base:
FIREHSE-06 (0) CAM 4/1/2018 Monthly 1,785.43 0.81 21,425.16 9.74
FIREHSE-06 (0) RENT 3/1/2017 Monthly 7,150.00 3.25 85,800.00 39.00 3/1/2019 7,293.00
Unit Totals: 8,935.43 107,225.16
13 13,101.00 0.00 Walgreen #12563 WALGR-06 (0) 12/1/2010 11/30/2050

Retail
Sales Base:
WALGR-06 (0) CAM 3/1/2018 Monthly 3,577.83 0.27 42,933.96 3.28
WALGR-06 (0) INS 4/1/2018 Monthly 318.71 0.02 3,824.52 0.29
WALGR-06 (0) PTAX 4/1/2018 Monthly 4,174.41 0.32 50,092.92 3.82
WALGR-06 (0) RENT 12/1/2010 Monthly 47,083.33 3.59 564,999.96 43.13 12/1/2030 59,491.67
Unit Totals: 55,154.28 661,851.36

Date: 9/14/2018

14 4,362.00 0.00 McDonald's MCDON-06 (0) 1/26/2012 2/20/2034

Retail
Sales Base:
MCDON-06 (0) CAM 3/1/2018 Monthly 4,729.00 1.08 56,748.00 13.01
MCDON-06 (0) RENT 5/24/2016 Monthly 16,500.00 3.78 198,000.00 45.39 5/24/2021 18,562.00
Unit Totals: 21,229.00 254,748.00
15 2,053.00 0.00 North Jersey Lash 1 NJLASH-06 (0) 12/22/2016 4/30/2027 NJLASH-06 (0) Refundable Security R 16,833.33
Retail
Sales Base:
NJLASH-06 (0) CAM 4/1/2018 Monthly 1,773.64 0.86 21,283.68 10.37
NJLASH-06 (0) RENT 6/1/2017 Monthly 6,843.33 3.33 82,119.96 40.00 5/1/2022 7,527.67
Unit Totals: 8,616.97 103,403.64
Klein Florham Park, LLC Totals

Amount % of Property
Total Property Charges: 233,235.92 Occupied Units: 15 100.00 %

Vacant Units: 0 0.00 %
Total Units: 15
Occupied Sq. Ft.: 64,683.00 100.00 %

Vacant Sq. Ft.: 0.00 0.00 %
Total Unit Sq. Ft. 64,683.00

OPERATING STATEMENTS
FLORHAM PARK PLAZA TAB F

Klein Florham Park, LLC
Income Statement
For the Period Ended June 30, 2018
Accrual
Current Current
Account Title Activity Balance
Income
06-40010 GPR - Retail $ 186,562 $ 1,149,796
06-41000 CAM Recovery 36,326 274,705
06-41200 Insurance Recovery 319 1,274
06-41300 Property Tax Recovery 4,175 16,698
Total Income $ 227,382 $ 1,442,473
Cost of Sales
Total Cost of Sales
Gross Margin $ 227,382 $ 1,442,473
Expenses
06-60040 Postage $ 10
06-60050 Legal 2,340
06-60055 Professional Fees 2,315
06-60080 Bank Charges 100 400
06-60100 Insurance 1,682 11,495
06-62070 Permits 1,386
06-64000 Interest Expense 84,781 510,962
06-64010 Interest Expense-JK Investors 14
06-65000 Utilities Expense 225 1,436
06-65010 Gas 15 90
06-65020 Electric 657 3,742
06-65030 Water/Sewer 661 1,725
06-65050 Filing Fees - State of NJ 101
06-67000 Management Fee Expense 13,969 84,049
06-68000 Depreciation Expense 85,241 170,482
06-68500 Amortization Expense 21,249 42,498
06-68501 Accumulated Amort Mortgage Cos 6,036 12,072
06-69000 Property Taxes 121,232
06-69040 State Tax 1,200
06-71010 Landscaping Service 320
06-71030 Parking Lot Sweeping 3,471 24,303
06-71035 Snow Removal 36,924
06-71280 On Site Expense 1,248 5,808
06-71500 General Repairs 307 33,508
06-71505 Materials & Supplies 11 11
Total Expenses $ 219,653 $ 1,068,423
Other Income
Total Other Income
Net Income (Loss) $ 7,729 $ 374,050
Confidential: For Internal Use Only

Income Statement
For the Period Ended December 31, 2017
Accrual
Current Current
Income
06-40010 GPR - Retail $ 191,373 $ 2,218,393
06-40015 Water and Sewr Reimbursement 36
06-40125 Loss to Lease 75,000
06-41000 CAM Recovery 39,692 473,121
Total Income $ 231,065 $ 2,766,550
Cost of Sales
Total Cost of Sales
Gross Margin $ 231,065 $ 2,766,550
Expenses
06-60050 Legal $ 2,005 $ 16,730
06-60060 Accounting 12,500
06-60065 Commission (15,379)
06-60080 Bank Charges 60 799
06-60100 Insurance 18,512
06-64000 Interest Expense 80,687 1,032,914
06-65010 Gas 15 443
06-65020 Electric 657 14,288
06-65030 Water/Sewer 248 3,652
06-69040 State Tax 525
06-71010 Landscaping Service 2,128
06-71030 Parking Lot Sweeping 41,757
06-71035 Snow Removal 14,247 57,043
06-71280 On Site Expense 1,438 11,061
06-71500 General Repairs (13,525) 67,483
Total Expenses $ 248,539 $ 2,210,601
Other Income
Total Other Income
Net Income (Loss) $ (17,474) $ 555,949

Income Statement
Accrual
Current Current
Income
06-40010 GPR - Retail $ 175,412 $ 2,164,502
06-40125 Loss to Lease 106,949
06-41000 CAM Recovery 35,694 459,835
06-41200 Insurance Recovery (2,130)
06-41300 Property Tax Recovery 4,103
06-41600 Miscellaneous Income 1,000
Total Income $ 211,106 $ 2,734,259
Cost of Sales
Total Cost of Sales
Gross Margin $ 211,106 $ 2,734,259
Expenses
06-60040 Postage $ 27
06-60050 Legal 33,266
06-60060 Accounting 15,000 25,000
06-60080 Bank Charges 60 715
06-60100 Insurance 18,903
06-62070 Permits 2,299
06-62200 Miscellaneous Expense 10
06-64000 Interest Expense 131,073 1,101,935
06-65010 Gas 13 437
06-65020 Electric 23 8,839
06-65030 Water/Sewer 2,398
06-69040 State Tax 3,945
06-71010 Landscaping Service 4,590
06-71020 Landscaping Supplies 1,741
06-71030 Parking Lot Sweeping 3,483 30,461
06-71035 Snow Removal 7,375 46,150
06-71090 Waste Disposal 829
06-71280 On Site Expense 1,027 10,192
06-71500 General Repairs 33,645 74,877
06-71501 Section 481 (a) Adjustment (372) (372)
06-71505 Materials & Supplies 373
Total Expenses $ 275,771 $ 2,284,729

Income Statement
Accrual
Current Current
Other Income
Total Other Income
Net Income (Loss) $ (64,665) $ 449,530

COMPARABLE IMPROVED SALES
FLORHAM PARK PLAZA TAB G

Wall Towne Center - Manasquan, NJ
Retail Building
Sale Comparable #1
PROPERTY INFORMATION
PROPERTY TYPE
Property #: 705047
Property Type: Retail Building
Property Use: Neighborhood/ Community
Center
PROPERTY LOCATION
Address: 2433 State Route 34
City, St., Zip: Manasquan, NJ 08736
County: Monmouth
Tax Accounts: 52-00874-0000-00003
PROPERTY SIZE BUILDING ATTRIBUTES

Gross Net Year of Construction: 1997
Land Area: 36.54 Acres (1,591,682 SF) 36.54 Acres (1,591,682 SF) Quality: Good
Building Area: 99,070 SF 99,070 SF Condition: Good
Land/ Building Ratio: 16.07 : 1
# of Stories: 1
# of Buildings: 1
PROPERTY ATTRIBUTES
Site
Utilities: All to site
Zoning: Commercial
Terrain: Generally level
Easements: None detrimental
Floodplain: None noted
Road Frontage: State Route 34
Lakewood Road
Improvements
Construction Date: 1997
Construction Details: Brick
Tenant Mix: Multi
9/25/2018 10:07:55 AM BBG

Wall Towne Center - Manasquan, NJ
SALE INFORMATION
Consideration: $41,550,000 Grantor: AEW Capital Management

Adjustments: $0 Grantee: DWS
Cash Equivalent Price: $41,550,000 Date of Sale: 06-04-18
1st Mortgage: $0 Sale Status: Closed
2nd Mortgage: $0 Record info: 9290-8045
Equity: $0
Sales Price ($/SF): $419.40
Sales Price/Unit: $41,550,000
SALE ATTRIBUTES
Occupancy At Sale: 100%
SALE INCOME SUMMARY - ACTUAL
Total $/SF $/Unit Indicators

Gross Rental Income $0 $0.00 $0 Effective Gross Income Multiplier 0.00
Other Income $0 $0.00 $0 Gross Income Multiplier 0.00
Gross Annual Income $0 $0.00 $0 Overall Rate 5.25%
Vacancy Expense $0 $0.00 $0 Equity Dividend Rate 0%
Effective Gross Income $0 $0.00 $0 Operating Expense Ratio 0.00%
Expenses $0 $0.00 $0
Reserves $0 $0.00 $0
Net Operating Income $2,181,000 $22.01 $2,181,000
Debt Service
Cash Flow $2,181,000 $22.01 $2,181,000
SALE TRANSACTION INFORMATION
Verified On: 9/20/2018

Verified By: Kevin O'Hearn/HFF/973.549.2018/MJM
Comments: Sold with 4-5 years remaining on ShopRite lease, however store was reporting
$1,000/SF sales and had just expanded by 8,000 SF, strengthening renewal probability.
Other tenants include Great Clips, AT&T, GNC, Allstate Insurance, Cherry Blow Dry
Bar, OceanFirst Bank, Lubrano's Trattoria and PetValu.
9/25/2018 10:07:55 AM BBG

New Hyde Park Plaza - New Hyde Park, NY
Retail Building
Sale Comparable #2
PROPERTY TYPE
Property #: 705044
Property Use: Strip Center
PROPERTY LOCATION
Address: 2335 New Hyde Park Road
City, St., Zip: New Hyde Park, NY 11042
County: Nassau
Tax Accounts: 2289-08-G-00-0160-0, 0413-0,
0911-0, -0917-0, -0918-0

Land Area: 7.72 Acres (336,283 SF) 7.72 Acres (336,283 SF) Quality: Good
# of Stories: 1
# of Buildings: 2
PROPERTY ATTRIBUTES
Site
Utilities:All to site
Zoning: Commercial
Road Frontage: New Hyde Park Road
Marcus Avenue
Improvements
Construction Details: Concrete block, stucco
Tenant Mix: Multi
9/25/2018 10:07:55 AM BBG

New Hyde Park Plaza - New Hyde Park, NY
SALE INFORMATION
Consideration: $74,500,000 Grantor: The Blackstone Group, LP

Adjustments: $0 Grantee: Clarion Partners, Deutsche Asset
Cash Equivalent Price: $74,500,000 Management
1st Mortgage: $0 Date of Sale: 01-10-18
2nd Mortgage: $0 Sale Status: Closed
Equity: $0 Record info: 13622-539
SALE ATTRIBUTES

Debt Service
Cash Flow $3,350,000 $25.77 $3,350,000

Verified By: Stephanie McAllen/The Blackstone
Group/646.482.6185/MJM
Comments: Tenants include ShopRite on a long term lease, Chipotle, T.J. Maxx, and Party City.
9/25/2018 10:07:55 AM BBG

Hewlett Crossing - Hewlett, NY
Retail Building
Sale Comparable #3
PROPERTY TYPE
Property #: 705048
PROPERTY LOCATION
Address: 1296 Broadway
City, St., Zip: Hewlett, NY 11557
County: Nassau
Tax Accounts: 2089-39-077-00-0603-0

# of Stories: 1
PROPERTY ATTRIBUTES
Site
Road Frontage: Broadway
Zoning: Commercial
Improvements
Tenant Mix: Multi
9/25/2018 10:07:55 AM BBG

Hewlett Crossing - Hewlett, NY
SALE INFORMATION
Consideration: $19,500,000 Grantor: MFI Realty, LLC

Adjustments: $0 Grantee: Regency Centers Corporation
Equity: $0
SALE ATTRIBUTES

Debt Service
Cash Flow $1,072,500 $33.52 $1,072,500

Verified By: Scott Cherry/MFI Realty/410.308.0700/MJM
Comments: Sold with 8 years remaining on Petco lease, 9 years on Chase Bank and 4 years on
Citibank. Purchased along with an adjacent shopping center from a separate seller.
Same broker represented both sellers but said that the books were poor on the other
property and hence no cap rate was reported, but probably equated to a 6. Both
centers shadow-anchored by Trader Joe's.
9/25/2018 10:07:55 AM BBG

District at Metuchen - Metuchen, NJ
Retail Building
Sale Comparable #4
PROPERTY TYPE
Property #: 705128
Property Use: Neighborhood/ Community
Center
PROPERTY LOCATION
Address: 657 Middlesex Avenue
City, St., Zip: Metuchen, NJ 08840
County: Middlesex
Tax Accounts: 09-00110-0000-00039-01, 09-
00110-0000-00039-01, 09-00111-
0000-00002-01

PROPERTY ATTRIBUTES
Site
Zoning: Commercial
Road Frontage: Middlesex Avenue
Central Avenue
Improvements
Construction Details: Brick, simulated wood
Tenant Mix: Multi
9/25/2018 10:07:55 AM BBG

District at Metuchen - Metuchen, NJ
SALE INFORMATION
Consideration: $33,830,000 Grantor: Renaissance Properties

Adjustments: $0 Grantee: Regency Centers Corporation
Equity: $0
SALE ATTRIBUTES

Net Operating Income $1,725,000 $25.92 $0
Debt Service
Cash Flow $1,725,000 $25.92 $0

Verified By: Kevin O'Hearn/HFF/973.549.2018/MJM
Comments: Sold with new long-term lease to Whole Foods.
9/25/2018 10:07:55 AM BBG

1600 Marcus Avenue - New Hyde Park Shopping Center
Retail Building
Sale Comparable #5
PROPERTY TYPE
Property #: 611037
PROPERTY LOCATION
Address: 1600 Marcus Avenue
City, St., Zip: New Hyde Park, NY 11042
County: Nassau
Tax Accounts: 2289-08-302-00-0027-0

PROPERTY ATTRIBUTES
Site
Zoning: Commercial
Road Frontage: Marcus Avenue
New Hyde Park Road
Improvements
Tenant Mix: Multi
9/25/2018 10:07:55 AM BBG

1600 Marcus Avenue - New Hyde Park Shopping Center
SALE INFORMATION
Consideration: $22,075,000 Grantor: Acadia Marcus Avenue, LLC

Adjustments: $0 Grantee: 3503 RP New Hyde Park Marcus, LLC
Equity: $0
SALE ATTRIBUTES

Net Operating Income $1,324,500 $41.01 $0
Debt Service
Cash Flow $1,324,500 $41.01 $0

Verified By: SEC filings/MJM
Comments: Sold with 8 tenants including Chop't Creative Salad, European Wax Center, NEFCU,
PetSmart, and Smashburger.
9/25/2018 10:07:55 AM BBG

COMPARABLE RENTALS
FLORHAM PARK PLAZA TAB H

Village Town Center - Florham Park
Retail Building
Rental Comparable #1
PROPERTY TYPE
Property #: 357762
Property Use: Power Center
PROPERTY LOCATION
Address: 187 Columbia Turnpike
City, St., Zip: Florham Park, NJ 07932
County: Morris
Tax Accounts: Block 1901 Lot 2

Land/ Building Ratio: 4.70 : 1 Year of Latest 2007
Remodel:
PROPERTY ATTRIBUTES
Site
Road Frontage: Columbia Turnpike
Route 608
Easements: None detrimental known
Improvements
Construction Date: 1961 renov. 2007
Construction Details: Brick, EIFS
Tenant Mix: Kings Supermarket, CVS, Starbucks, Kids Plus
9/24/2018 1:15:32 PM BBG

Village Town Center - Florham Park
RENTAL ATTRIBUTES
Rental Rate: $32.00 - $40.00

Lease Type: NNN
Common Area Maint.: Tenant
Taxes: Tenant
Insurance: Tenant
Finish Allowance: None
Typical Lease Term: 5 -10 years
Occupancy Rate: 66%
RENTAL TRANSACTION INFORMATION

Verified By: Neal Richards/Vanguard Realty,
Inc./973.443.9700x15/MJM
Comments: Lease renewal to jewelry store at $40/SF for 1,300 SF, 5 year term commenced 1Q
2018, 3% annual escalations, no TI.
Lease to Lucy's, a gift shop, at $32/SF for 1,400 SF, 5 year term commenced 9/2016.
Lease to Letsyo at $32/SF for 2,014 SF, 5 year term commenced 8/17/2014.
Lease to Modern Ear at $35/SF for 2,000 SF, 5 year term commenced 1/1/2014.
9/24/2018 1:15:32 PM BBG

416-420 State Route 10 - East Hanover
Retail Building
PROPERTY TYPE
Property #: 357770
PROPERTY LOCATION
Address: 416 Route 10
City, St., Zip: East Hanover, NJ 07936
County: Morris
Tax Accounts: Block 103 Lot 3.01

Land Area: 4.00 Acres (174,240 SF) 4.00 Acres (174,240 SF) Quality: Average
Building Area: 35,000 SF 35,000 SF Condition: Average
Remodel:
PROPERTY ATTRIBUTES
Site
Road Frontage: Route 10
Improvements
Construction Details: 2004
Tenant Mix: Party City, Amazing Savings, Carpet Mill
9/24/2018 1:15:32 PM BBG

416-420 State Route 10 - East Hanover
RENTAL ATTRIBUTES
Rental Rate: $17.00 - $50.00

Lease Type: NNN
Taxes: Tenant
Insurance: Tenant
Finish Allowance: $10/SF
Typical Lease Term: 10 years
Occupancy Rate: 100%
Escalator Clause: 10% every 3 years

Verified By: James Aug/Sabre Real Estate
Group/201.249.8911/MJM
Comments: Lease to Planet Fitness at $17/SF for 17,500 SF, 10 year term commencing 1Q 2017.
First 6 months free.
Lease to Amazing Savings at $23/SF for 10,000 SF, commenced 2005.
Currently asking $50.00/SF for inline space on Route 10, $35.00/SF for inline space on
River Road.
9/24/2018 1:15:32 PM BBG

West Caldwell Plaza - West Caldwell
Retail Building
PROPERTY TYPE
Property #: 357760
PROPERTY LOCATION
Address: 790 Bloomfield Avenue
City, St., Zip: West Caldwell, NJ 07006
County: Essex

Remodel:
PROPERTY ATTRIBUTES
Site
Road Frontage: Bloomfield Avenue
Passaic Avenue
Improvements
Construction Details: Concrete block, stucco
Tenant Mix: TJ Maxx, Shop Rite, CVS, Radio Shack, Starbucks, KFC, Panera Bread
9/24/2018 1:15:32 PM BBG

West Caldwell Plaza - West Caldwell
RENTAL ATTRIBUTES
Rental Rate: $30.00 - $34.00

Lease Type: NNN
Taxes: Tenant
Insurance: Tenant
Finish Allowance: None
Typical Lease Term: 5 year minimum
Occupancy Rate: 92%

Verified By: Neal Richards/Vanguard Realty,
Inc./973.443.9700/MJM
Comments: Lease to non-food tenant "close to signing" at $33/SF for 1,225 SF, 5 year term.
Lease to Asian restaurant at $30/SF for 1,700 SF, signed 9/2016. 5 year term, 2-3%
annual increases.
Lease to Honey Baked Ham at $34/SF for 1,710 SF, commenced 9/18/2014.
9/24/2018 1:15:32 PM BBG

The Corner at Livingston Center - Livingston
Retail Building
PROPERTY TYPE
Property #: 439980
PROPERTY LOCATION
Address: 276 Eisenhower Parkway
City, St., Zip: Livingston, NJ 07039
County: Essex
Tax Accounts: multiple to be combined

Land Area: 2.22 Acres (96,703 SF) 2.22 Acres (96,703 SF) Quality: Excellent
Building Area: 13,000 SF 13,000 SF Condition: Excellent
PROPERTY ATTRIBUTES
Site
Zoning: Commercial
Road Frontage: Eisenhower Parkway
Improvements
Construction Details: Brick, stucco, aluminum
Tenant Mix: Multi
9/24/2018 1:15:32 PM BBG

The Corner at Livingston Center - Livingston
RENTAL ATTRIBUTES
Rental Rate: $48.00 - $50.00

Lease Type: NNN
Taxes: Tenant
Insurance: Tenant
Finish Allowance: $10.00/SF
Escalator Clause: 10% every 3 years

Verified By: James Aug/Sabre Real Estate
Group/201.249.8911/MJM
Comments: Lease of 1,600 SF to The Simple Greek at $50.00/SF NNN for 10 years, signed 10/2017.
10% increase every 3 years, $10.00/SF given in TI, one five-year option.
Starbucks leased at $48.00/SF NNN for 10 years, commencing 1Q 2017. Includes drive
thru.
Other tenants leased at $48/SF to $50/SF.
9/24/2018 1:15:32 PM BBG

The Shoppes at the Livingston Circle - Livingston
Retail Building
PROPERTY TYPE
Property #: 357765
PROPERTY LOCATION
Address: 277 Eisenhower Parkway
City, St., Zip: Livingston, NJ 07039
County: Essex

Land Area: 16.00 Acres (696,960 SF) 16.00 Acres (696,960 SF) Quality: Average
Building Area: 101,000 SF 101,000 SF Condition: Average
PROPERTY ATTRIBUTES
Site
Road Frontage: Eisenhower Parkway
Improvements
Construction Details: Masonry, brick
Tenant Mix: The Fresh Market, GameStop, Olive Garden
RENTAL ATTRIBUTES
Rental Rate: $23.00 - $33.00

Lease Type: NNN
Taxes: Tenant
Insurance: Tenant
Typical Lease Term: 5-10 years
Occupancy Rate: 78%
9/24/2018 1:15:32 PM BBG

The Shoppes at the Livingston Circle - Livingston

Verified By: Stephanie Harris/Ripco Real
Estate/201.777.2300/MJM
Comments: Lease of 3,165 SF for a restaurant at $32.00/SF with $23.00/SF in TI. Commences
1/1/2018.
Lease of 3,200 SF to Cycle Bar at $30.00/SF, commenced 9/2017.
8,200 SF space likely to lease at $23.00/SF.
Operating expenses are $8.85/SF.
9/24/2018 1:15:32 PM BBG

Castle Ridge Plaza - East Hanover
Retail Building
PROPERTY TYPE
Property #: 357882
PROPERTY LOCATION
Address: 354 Route 10
City, St., Zip: East Hanover, NJ 07936
County: Morris
Tax Accounts: Block 103 Lot 3.02

Remodel:
PROPERTY ATTRIBUTES
Site
Road Frontage: Route 10
River Road
Improvements
Tenant Mix: Best Buy, Michael's, Dollar Tree, Chipotle, Smashburger
Construction Details: Concrete tiltup
9/24/2018 1:15:32 PM BBG

Castle Ridge Plaza - East Hanover
RENTAL ATTRIBUTES
Rental Rate: $30.00 - $33.00

Lease Type: NNN
Taxes: Tenant
Insurance: Tenant
Finish Allowance: Negotiable
Escalator Clause: 10% increase after 5 years

Verified By: Michael Gartenberg/Garden Commercial
Properties/973.467.5000/MJM
Comments: Rents currently in the low $30's for in-line spaces averaging 1,500 SF.
9/24/2018 1:15:32 PM BBG

ARGUS INPUT ASSUMPTIONS AND SUPPORTING REPORTS
FLORHAM PARK PLAZA TAB I

Cash Flow Report
9/27/2018 4:04:32 PM
Rental Revenue
CPI Increases 0 0 1,772 8,171 18,791 35,987 58,111 81,226 115,171 159,595 214,970 693,793


Credit Loss -30,500 -31,052 -32,409 -33,548 -33,791 -35,139 -35,488 -35,598 -36,864 -38,177 -39,780 -382,347
Operating Expenses
RE Tax 248,718 256,180 263,865 271,781 279,934 288,332 296,982 305,892 315,069 324,521 334,256 3,185,529
Insurance 22,639 23,318 24,018 24,738 25,480 26,245 27,032 27,843 28,678 29,539 30,425 289,956
CAM 210,220 216,526 223,022 229,713 236,604 243,702 251,013 258,544 266,300 274,289 282,518 2,692,452
Management 178,009 182,887 190,055 196,508 197,921 204,868 208,153 207,393 218,460 225,345 232,807 2,242,406
G&A 45,278 46,636 48,036 49,477 50,961 52,490 54,064 55,686 57,357 59,078 60,850 579,913
Leasing Costs
reserves 9,702 9,994 10,293 10,602 10,920 11,248 11,585 11,933 12,291 12,659 13,039 124,267
Sources and Uses
9/27/2018 4:04:40 PM
Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
For the Years Ending Sep-2019 Sep-2020 Sep-2021 Sep-2022 Sep-2023 Sep-2024 Sep-2025 Sep-2026 Sep-2027 Sep-2028 Total
Sources Of Capital
Net Operating Gains 2,261,948 2,322,572 2,418,587 2,502,923 2,507,784 2,598,832 2,631,975 2,601,185 2,755,141 2,842,974 25,443,920
Net Proceeds From Sale 0 0 0 0 0 0 0 0 0 52,372,154 52,372,154
Defined Sources Of Capital 2,261,948 2,322,572 2,418,587 2,502,923 2,507,784 2,598,832 2,631,975 2,601,185 2,755,141 55,215,129 77,816,075
Required Equity Contributions 0 0 0 0 0 0 0 0 0 0 0
Total Sources Of Capital 2,261,948 2,322,572 2,418,587 2,502,923 2,507,784 2,598,832 2,631,975 2,601,185 2,755,141 55,215,129 77,816,075
Uses Of Capital
Tenant Improvements 25,000 32,775 19,077 16,172 76,400 0 24,131 107,711 67,156 40,427 408,849
Leasing Commissions 0 81,494 47,435 40,212 153,550 0 60,002 200,867 166,983 100,521 851,062
Capital Expenditures 9,702 9,994 10,293 10,602 10,920 11,248 11,585 11,933 12,291 12,659 111,228
Defined Uses Of Capital 34,702 124,262 76,805 66,987 240,870 11,248 95,718 320,511 246,429 153,607 1,371,139
Cash Flow Distributions 2,227,246 2,198,310 2,341,782 2,435,936 2,266,914 2,587,584 2,536,257 2,280,674 2,508,711 55,061,521 76,444,936
Total Uses Of Capital 2,261,948 2,322,572 2,418,587 2,502,923 2,507,784 2,598,832 2,631,975 2,601,185 2,755,141 55,215,129 77,816,075
Unleveraged Cash on Cash Return

Cash to Purchase Price 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
NOI to Book Value 6518.12% 1461.07% 1025.83% 826.71% 461.31% 468.36% 404.55% 267.86% 226.29% 207.34% 1855.68%
Leveraged Cash on Cash Return
Cash to Initial Equity N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Unleveraged Annual IRR N/A

Leveraged Annual IRR N/A
Lease Expiration Report
Florham Park Plaza (Amounts in USD, Measures in SF)
As of Jul, 2017
All Tenants/ All Lease Periods
9/27/2018 4:04:50 PM
Lease Lease Expiration Remaining Expiring Building Base Base Market Rent vs. Effective Effective Effective Rent vs.
Tenants Suite Period Status Date Term Area Share % Rent Rent/SF Rent/SF Market Rent Rent/SF Market/SF Effective Market Rent
2020 Expirations
9. Kyoto 9 Base Contract 3/31/2020 2 Years 9 Months 4,300.00 6.65% 113,000.00 26.28 41.20 63.78% 37.35 52.65 70.94%
Total 2020 Expirations 4,300.00 6.65% 113,000.00 26.28 41.20 63.78% 37.35 52.65 70.94%
2021 Expirations
7. Qdoba 7 Base Contract 3/31/2021 3 Years 9 Months 2,430.00 3.76% 93,555.00 38.50 42.44 90.72% 49.89 54.25 91.95%
8. BOM Nails 8 Base Contract 10/31/2021 4 Years 4 Months 2,000.00 3.09% 66,000.00 33.00 43.71 75.50% 44.60 55.75 80.00%
2022 Expirations
5. The Dress Barn 5 Base Contract 12/31/2022 5 Years 6 Months 7,034.00 10.87% 211,020.00 30.00 33.77 88.85% 42.04 46.14 91.12%
2023 Expirations
3. Your Verizon 3 Base Contract 1/31/2023 5 Years 7 Months 2,139.00 3.31% 91,334.12 42.70 45.02 94.84% 54.76 57.43 95.36%
2025 Expirations
1. Dunkin Donuts 1 Base Contract 6/30/2025 8 Years 2,731.00 4.22% 127,219.08 46.58 47.76 97.53% 59.45 60.99 97.46%
2026 Expirations
2. Trader Joe's 2 Base Contract 1/31/2026 8 Years 7 Months 11,835.00 18.30% 418,727.03 35.38 36.90 95.89% 48.43 50.35 96.20%
2027 Expirations
4. Chop't 4 Base Contract 5/31/2027 9 Years 11 Months 2,911.00 4.50% 124,445.25 42.75 50.67 84.37% 56.28 64.71 86.97%
11. Firehouse Subs 12 Base Contract 2/28/2027 9 Years 8 Months 2,200.00 3.40% 98,557.23 44.80 50.67 88.41% 58.21 64.61 90.10%
12. North Jersey Lash 4.1 Base Contract 4/30/2027 9 Years 10 Months 2,053.00 3.17% 90,332.00 44.00 50.67 86.84% 57.49 64.68 88.89%
2028 Expirations
10. Nonna's 10 Base Contract 4/30/2028 10 Years 10 Months 4,187.00 6.47% 186,321.48 44.50 52.19 85.26% 58.44 66.62 87.71%
13. SportClips 11 Base Contract 7/31/2028 1,400.00 2.16% 61,599.96 44.00 52.19 84.31% 58.04 68.30 84.97%
2029 Expirations
6. Modern Acupuncture 6 Base Contract 1/31/2029 2,000.00 3.09% 96,800.04 48.40 53.76 90.04% 62.65 68.53 91.42%
Final Totals 7 Years 3 Months 13 Days 47,220.00 73.00% 1,778,911.20 37.67 43.01 87.60% 50.41 56.21 89.68%
* Weighted Average Leases expiration is calculated as of report date, and weighted by area. Remaining term includes contract renewals
Recovery Structures Detail
9/27/2018 4:04:56 PM
Structure Expense/Group Reimburse After Admin Fee Recovery Type Allocation Type

Tenant Rent Roll
Grouped By - None
9/27/2018 4:05:00 PM
Tenant Lease Lease Potential Absorption & Free Scheduled Miscellaneous CPI Percentage Expense Potential Tenant Leasing Tenant Net
Tenant Name Suite Lease Type Lease Status Classifications Area Start Date End Date Base Rent Turnover Rent Rent Base Rent Rent Increases Rent Recoveries Gross Revenue Improvements Commissions Incentives Cash Flow
Dunkin Donuts 1 Retail Contract 2,731 11/1/2004 6/30/2025 111,516 0 0 111,516 0 0 0 29,800 141,316 0 0 0 141,316
Trader Joe's 2 Retail Contract 11,835 11/1/2010 1/31/2026 380,661 0 0 380,661 0 0 0 129,140 509,801 0 0 0 509,801
Your Verizon 3 Retail Contract 2,139 2/1/2013 1/31/2023 82,772 0 0 82,772 0 0 0 23,340 106,112 0 0 0 106,112
Chop't 4 Retail Contract 2,911 6/1/2017 5/31/2027 110,618 0 0 110,618 0 0 0 31,764 142,382 0 0 0 142,382
The Dress Barn 5 Retail Contract 7,034 9/1/2007 12/31/2022 193,435 0 0 193,435 0 0 0 76,753 270,188 0 0 0 270,188
Modern Acupuncture 6 Retail Contract 2,000 2/1/2019 1/31/2029 53,333 0 0 53,333 0 0 0 14,659 67,993 25,000 0 0 42,993
Qdoba 7 Retail Contract 2,430 4/1/2011 3/31/2021 93,555 0 0 93,555 0 0 0 26,515 120,070 0 0 0 120,070
BOM Nails 8 Retail Contract 2,000 11/1/2011 10/31/2021 66,000 0 0 66,000 0 0 0 21,823 87,823 0 0 0 87,823
Kyoto 9 Retail Contract 4,300 3/1/1995 3/31/2020 113,000 0 0 113,000 0 0 0 46,920 159,920 0 0 0 159,920
Nonna's 10 Retail Contract 4,187 1/1/2009 4/30/2028 158,520 0 0 158,520 0 0 0 45,687 204,207 0 0 0 204,207
Firehouse Subs 12 Retail Contract 2,200 3/1/2017 2/28/2027 86,801 0 0 86,801 0 0 0 24,006 110,807 0 0 0 110,807
North Jersey Lash 4.1 Retail Contract 2,053 6/1/2017 4/30/2027 82,120 0 0 82,120 0 0 0 22,402 104,522 0 0 0 104,522
SportClips 11 Retail Contract 1,400 8/1/2018 7/31/2028 56,000 0 0 56,000 0 0 0 15,276 71,276 0 0 0 71,276
Walgreens 14 Retail Contract 13,101 7/1/2010 6/30/2035 565,000 0 0 565,000 0 0 0 142,954 707,954 0 0 0 707,954
McDonalds 15 Retail Contract 4,362 2/1/2012 2/20/2034 198,000 0 0 198,000 0 0 0 47,597 245,597 0 0 0 245,597
Total 64,683 2,351,331 0 0 2,351,331 0 0 0 698,638 3,049,969 25,000 0 0 3,024,969

Present Value Report
9/27/2018 4:05:07 PM
Valuation (PV/IRR) Date: Oct, 2018

Year 1 Sep-2019 2,227,246 2,106,142 2,101,175 2,096,231 2,091,310 2,086,413 6518.12%
Year 2 Sep-2020 2,198,310 1,965,750 1,956,488 1,947,292 1,938,161 1,929,093 1461.07%
Year 3 Sep-2021 2,341,782 1,980,183 1,966,205 1,952,359 1,938,642 1,925,053 1025.83%
Year 4 Sep-2022 2,435,936 1,947,800 1,929,490 1,911,394 1,893,509 1,875,834 826.71%
Year 5 Sep-2023 2,266,914 1,714,089 1,693,970 1,674,135 1,654,577 1,635,293 461.31%
Year 6 Sep-2024 2,587,584 1,850,172 1,824,144 1,798,543 1,773,359 1,748,587 468.36%
Year 7 Sep-2025 2,536,257 1,714,868 1,686,756 1,659,169 1,632,097 1,605,529 404.55%
Year 8 Sep-2026 2,280,674 1,458,210 1,430,923 1,404,209 1,378,054 1,352,447 267.86%
Year 9 Sep-2027 2,508,711 1,516,797 1,484,902 1,453,752 1,423,326 1,393,605 226.29%
Year 10 Sep-2028 2,689,367 1,537,611 1,501,729 1,466,766 1,432,696 1,399,495 207.34%
Totals 24,072,782 17,791,621 17,575,783 17,363,849 17,155,732 16,951,348

Income 37.27% 37.54% 37.81% 38.08% 38.35%
Net Sale Price 62.73% 62.46% 62.19% 61.92% 61.65%
100.00% 100.00% 100.00% 100.00% 100.00%
Resale Matrix Report
9/27/2018 4:05:12 PM
Key Valuation Policies

Valuation (PV/IRR) Date: October, 2018
Date of Sale: September, 2028
Period to Cap (at Sale): 12 Months After Sale
Resale Matrix
Table Shows: IRR (Unleveraged)
1. Required Net Sale Price 9.50% 9.75% 10.00% 10.25% 10.50%
2. Corresponding Exit Cap
0 -36,993,307 -37,427,116 -37,866,575 -38,311,753 -38,762,723

N/A -7.95% -7.85% -7.76% -7.67% -7.58%
0 -36,993,307 -37,427,116 -37,866,575 -38,311,753 -38,762,723

N/A -7.95% -7.85% -7.76% -7.67% -7.58%
1) Purchase Price
2) Going In Cap Rate 0 -36,993,307 -37,427,116 -37,866,575 -38,311,753 -38,762,723
N/A -7.95% -7.85% -7.76% -7.67% -7.58%
50,000 -36,869,396 -37,300,347 -37,736,888 -38,179,088 -38,627,019

4523.90% -7.97% -7.88% -7.79% -7.70% -7.61%
100,000 -36,745,485 -37,173,577 -37,607,200 -38,046,423 -38,491,315

2261.95% -8.00% -7.91% -7.82% -7.73% -7.64%

Cash Flow As Of Report
9/27/2018 4:05:17 PM
Rental Revenue
CPI Increases 0 0 1,772 8,171 18,791 35,987 58,111 81,226 115,171 159,595 214,970 693,793


Credit Loss -30,500 -31,052 -32,409 -33,548 -33,791 -35,139 -35,488 -35,598 -36,864 -38,177 -39,780 -382,347
Operating Expenses
RE Tax 248,718 256,180 263,865 271,781 279,934 288,332 296,982 305,892 315,069 324,521 334,256 3,185,529
Insurance 22,639 23,318 24,018 24,738 25,480 26,245 27,032 27,843 28,678 29,539 30,425 289,956
CAM 210,220 216,526 223,022 229,713 236,604 243,702 251,013 258,544 266,300 274,289 282,518 2,692,452
Management 178,009 182,887 190,055 196,508 197,921 204,868 208,153 207,393 218,460 225,345 232,807 2,242,406
G&A 45,278 46,636 48,036 49,477 50,961 52,490 54,064 55,686 57,357 59,078 60,850 579,913
Leasing Costs
reserves 9,702 9,994 10,293 10,602 10,920 11,248 11,585 11,933 12,291 12,659 13,039 124,267
Present Value As Of Report
9/27/2018 4:05:22 PM
Secondary Valuation (PV/IRR) Date: Oct, 2018

Year 1 Sep-2019 2,227,246 2,106,142 2,101,175 2,096,231 2,091,310 2,086,413 6518.12%
Year 2 Sep-2020 2,198,310 1,965,750 1,956,488 1,947,292 1,938,161 1,929,093 1461.07%
Year 3 Sep-2021 2,341,782 1,980,183 1,966,205 1,952,359 1,938,642 1,925,053 1025.83%
Year 4 Sep-2022 2,435,936 1,947,800 1,929,490 1,911,394 1,893,509 1,875,834 826.71%
Year 5 Sep-2023 2,266,914 1,714,089 1,693,970 1,674,135 1,654,577 1,635,293 461.31%
Year 6 Sep-2024 2,587,584 1,850,172 1,824,144 1,798,543 1,773,359 1,748,587 468.36%
Year 7 Sep-2025 2,536,257 1,714,868 1,686,756 1,659,169 1,632,097 1,605,529 404.55%
Year 8 Sep-2026 2,280,674 1,458,210 1,430,923 1,404,209 1,378,054 1,352,447 267.86%
Year 9 Sep-2027 2,508,711 1,516,797 1,484,902 1,453,752 1,423,326 1,393,605 226.29%
Year 10 Sep-2028 2,689,367 1,537,611 1,501,729 1,466,766 1,432,696 1,399,495 207.34%
Totals 24,072,782 17,791,621 17,575,783 17,363,849 17,155,732 16,951,348

Income 37.27% 37.54% 37.81% 38.08% 38.35%
Net Sale Price 62.73% 62.46% 62.19% 61.92% 61.65%
100.00% 100.00% 100.00% 100.00% 100.00%
Lease Audit Report
9/27/2018 4:05:27 PM
For the Years Ending Suite Sep-2019 Sep-2020 Sep-2021 Sep-2022 Sep-2023 Sep-2024 Sep-2025 Sep-2026 Sep-2027 Sep-2028 Sep-2029 Total
Area
1. Dunkin Donuts 1 2,731 2,731 2,731 2,731 2,731 2,731 2,276 2,731 2,731 2,731 2,731
2. Trader Joe's 2 11,835 11,835 11,835 11,835 11,835 11,835 11,835 9,863 11,835 11,835 11,835
3. Your Verizon 3 2,139 2,139 2,139 2,139 1,783 2,139 2,139 2,139 2,139 2,139 2,139
4. Chop't 4 2,911 2,911 2,911 2,911 2,911 2,911 2,911 2,911 2,426 2,911 2,911
5. The Dress Barn 5 7,034 7,034 7,034 7,034 5,862 7,034 7,034 7,034 7,034 7,034 7,034
6. Modern Acupuncture 6 1,333 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 1,667
7. Qdoba 7 2,430 2,430 2,025 2,430 2,430 2,430 2,430 2,430 2,430 2,430 2,430
8. BOM Nails 8 2,000 2,000 2,000 1,667 2,000 2,000 2,000 2,000 2,000 2,000 2,000
9. Kyoto 9 4,300 3,583 4,300 4,300 4,300 4,300 4,300 4,300 4,300 4,300 4,300
10. Nonna's 10 4,187 4,187 4,187 4,187 4,187 4,187 4,187 4,187 4,187 3,489 4,187
11. Firehouse Subs 12 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 1,833 2,200 2,200
12. North Jersey Lash 4.1 2,053 2,053 2,053 2,053 2,053 2,053 2,053 2,053 1,711 2,053 2,053
13. SportClips 11 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,167 1,400
14. Walgreens 14 13,101 13,101 13,101 13,101 13,101 13,101 13,101 13,101 13,101 13,101 13,101
15. McDonalds 15 4,362 4,362 4,362 4,362 4,362 4,362 4,362 4,362 4,362 4,362 4,362
Total Area 64,016 63,966 64,278 64,350 63,154 64,683 64,228 62,711 63,489 63,752 64,350
Total Occupancy % 98.97% 98.89% 99.37% 99.48% 97.64% 100.00% 99.30% 96.95% 98.15% 98.56% 99.48%
Potential Base Rent

1. Dunkin Donuts 1 111,516 114,247 116,978 119,709 122,440 125,171 128,422 130,438 130,438 130,438 130,438 1,360,235
2. Trader Joe's 2 380,661 380,661 406,038 418,727 418,727 418,727 418,727 430,687 436,667 436,667 436,667 4,582,955
3. Your Verizon 3 82,772 85,255 87,813 90,447 94,644 96,299 96,299 96,299 96,299 96,299 96,299 1,018,723
4. Chop't 4 110,618 110,618 110,618 115,227 124,445 124,445 124,445 124,445 132,131 147,503 147,503 1,371,999
5. The Dress Barn 5 193,435 193,435 206,624 211,020 230,884 237,505 237,505 237,505 237,505 237,505 237,505 2,460,427
6. Modern Acupuncture 6 53,333 80,000 80,000 85,333 88,000 88,000 93,867 96,800 96,800 96,800 103,942 962,876
7. Qdoba 7 93,555 93,555 98,337 103,119 103,119 103,119 103,119 103,119 103,119 103,119 103,119 1,110,403
8. BOM Nails 8 66,000 66,000 66,000 85,633 87,418 87,418 87,418 87,418 87,418 87,418 87,418 895,560
9. Kyoto 9 113,000 145,080 177,160 177,160 177,160 177,160 177,160 177,160 177,160 177,160 177,160 1,852,520
10. Nonna's 10 158,520 158,520 161,381 165,387 167,131 169,574 176,552 186,321 186,321 199,739 218,523 1,947,969
11. Firehouse Subs 12 86,801 88,537 90,308 92,114 93,956 95,835 97,752 98,557 106,093 111,476 111,476 1,072,905
12. North Jersey Lash 4.1 82,120 82,120 82,120 84,857 90,332 90,332 90,332 90,332 96,038 104,027 104,027 996,638
13. SportClips 11 56,000 56,000 56,000 56,000 56,933 61,600 61,600 61,600 61,600 63,511 75,259 666,104
14. Walgreens 14 565,000 565,000 565,000 565,000 565,000 565,000 565,000 565,000 565,000 565,000 565,000 6,215,000
15. McDonalds 15 198,000 198,000 208,310 222,744 222,744 222,744 222,744 234,399 250,716 250,716 250,716 2,481,833
Total Potential Base Rent 2,351,331 2,417,028 2,512,687 2,592,478 2,642,934 2,662,929 2,680,942 2,720,081 2,763,306 2,807,378 2,845,053 28,996,146
Lost Absorption / Turnover Rent

1. Dunkin Donuts 1 0 0 0 0 0 0 -21,740 0 0 0 0 -21,740
2. Trader Joe's 2 0 0 0 0 0 0 0 -72,778 0 0 0 -72,778
3. Your Verizon 3 0 0 0 0 -16,050 0 0 0 0 0 0 -16,050
4. Chop't 4 0 0 0 0 0 0 0 0 -24,584 0 0 -24,584
5. The Dress Barn 5 0 0 0 0 -39,584 0 0 0 0 0 0 -39,584
6. Modern Acupuncture 6 0 0 0 0 0 0 0 0 0 0 -17,919 -17,919
7. Qdoba 7 0 0 -17,187 0 0 0 0 0 0 0 0 -17,187
8. BOM Nails 8 0 0 0 -14,570 0 0 0 0 0 0 0 -14,570
9. Kyoto 9 0 -29,527 0 0 0 0 0 0 0 0 0 -29,527
10. Nonna's 10 0 0 0 0 0 0 0 0 0 -36,421 0 -36,421
11. Firehouse Subs 12 0 0 0 0 0 0 0 0 -18,579 0 0 -18,579
12. North Jersey Lash 4.1 0 0 0 0 0 0 0 0 -17,338 0 0 -17,338
13. SportClips 11 0 0 0 0 0 0 0 0 0 -12,178 0 -12,178
Total Lost Absorption / Turnover Rent 0 -29,527 -17,187 -14,570 -55,634 0 -21,740 -72,778 -60,501 -48,598 -17,919 -338,453
Scheduled Base Rent

1. Dunkin Donuts 1 111,516 114,247 116,978 119,709 122,440 125,171 106,682 130,438 130,438 130,438 130,438 1,338,496
2. Trader Joe's 2 380,661 380,661 406,038 418,727 418,727 418,727 418,727 357,909 436,667 436,667 436,667 4,510,178
3. Your Verizon 3 82,772 85,255 87,813 90,447 78,594 96,299 96,299 96,299 96,299 96,299 96,299 1,002,673
4. Chop't 4 110,618 110,618 110,618 115,227 124,445 124,445 124,445 124,445 107,547 147,503 147,503 1,347,415
5. The Dress Barn 5 193,435 193,435 206,624 211,020 191,300 237,505 237,505 237,505 237,505 237,505 237,505 2,420,842
7. Qdoba 7 93,555 93,555 81,151 103,119 103,119 103,119 103,119 103,119 103,119 103,119 103,119 1,093,217
8. BOM Nails 8 66,000 66,000 66,000 71,064 87,418 87,418 87,418 87,418 87,418 87,418 87,418 880,991
9. Kyoto 9 113,000 115,553 177,160 177,160 177,160 177,160 177,160 177,160 177,160 177,160 177,160 1,822,993
10. Nonna's 10 158,520 158,520 161,381 165,387 167,131 169,574 176,552 186,321 186,321 163,318 218,523 1,911,549
11. Firehouse Subs 12 86,801 88,537 90,308 92,114 93,956 95,835 97,752 98,557 87,514 111,476 111,476 1,054,326
13. SportClips 11 56,000 56,000 56,000 56,000 56,933 61,600 61,600 61,600 61,600 51,333 75,259 653,926
14. Walgreens 14 565,000 565,000 565,000 565,000 565,000 565,000 565,000 565,000 565,000 565,000 565,000 6,215,000
15. McDonalds 15 198,000 198,000 208,310 222,744 222,744 222,744 222,744 234,399 250,716 250,716 250,716 2,481,833
Total Scheduled Base Rent 2,351,331 2,387,501 2,495,500 2,577,909 2,587,300 2,662,929 2,659,202 2,647,303 2,702,805 2,758,779 2,827,134 28,657,694
CPI Increases
1. Dunkin Donuts 1 0 0 0 0 0 0 0 326 4,249 8,290 12,451 25,316
2. Trader Joe's 2 0 0 0 0 0 0 0 0 6,550 19,847 33,542 59,938
3. Your Verizon 3 0 0 0 0 0 1,444 4,377 7,397 10,508 13,712 17,012 54,451
4. Chop't 4 0 0 0 0 0 0 0 0 0 738 5,185 5,922
5. The Dress Barn 5 0 0 0 0 0 4,156 11,406 18,874 26,565 34,487 42,647 138,135
7. Qdoba 7 0 0 0 1,031 4,156 7,374 10,689 14,103 17,620 21,242 24,973 101,187
8. BOM Nails 8 0 0 0 0 1,967 4,648 7,410 10,255 13,186 16,204 19,312 72,983
9. Kyoto 9 0 0 1,772 7,140 12,669 18,363 24,229 30,271 36,494 42,903 49,505 223,345
10. Nonna's 10 0 0 0 0 0 0 0 0 0 0 1,639 1,639
11. Firehouse Subs 12 0 0 0 0 0 0 0 0 0 1,393 4,780 6,173
12. North Jersey Lash 4.1 0 0 0 0 0 0 0 0 0 780 3,924 4,705
Total CPI Increases 0 0 1,772 8,171 18,791 35,987 58,111 81,226 115,171 159,595 214,970 693,793
Recoveries
1. Dunkin Donuts 1 29,800 30,646 31,595 32,622 33,432 34,411 29,425 36,206 37,363 38,530 39,722 373,753
2. Trader Joe's 2 129,140 132,806 136,921 141,370 144,882 149,122 153,214 130,602 161,917 166,971 172,139 1,619,084
3. Your Verizon 3 23,340 24,003 24,746 25,551 21,797 26,952 27,691 28,358 29,264 30,178 31,112 292,991
4. Chop't 4 31,764 32,666 33,678 34,772 35,636 36,679 37,685 38,593 33,132 41,069 42,340 398,014
5. The Dress Barn 5 76,753 78,932 81,377 84,022 71,679 88,629 91,061 93,254 96,234 99,237 102,309 963,486
7. Qdoba 7 26,515 27,268 23,391 29,027 29,748 30,618 31,458 32,216 33,245 34,283 35,344 333,114
8. BOM Nails 8 21,823 22,443 23,138 20,004 24,484 25,200 25,892 26,515 27,362 28,216 29,090 274,168
9. Kyoto 9 46,920 40,156 49,747 51,364 52,640 54,180 55,667 57,008 58,829 60,665 62,543 589,720
10. Nonna's 10 45,687 46,984 48,440 50,014 51,256 52,757 54,204 55,510 57,283 49,154 60,900 572,189
11. Firehouse Subs 12 24,006 24,687 25,452 26,279 26,932 27,720 28,481 29,167 25,040 31,038 31,999 300,801
13. SportClips 11 15,276 15,710 16,197 16,723 17,139 17,640 18,124 18,561 19,154 16,435 20,363 191,322
14. Walgreens 14 142,954 147,013 151,567 156,492 160,380 165,074 169,603 173,688 179,238 184,832 190,553 1,821,394
15. McDonalds 15 47,597 48,948 50,465 52,104 53,399 54,962 56,470 57,830 59,677 61,540 63,445 606,436
Total Recoveries 698,638 717,743 743,603 768,757 773,017 815,013 831,446 831,239 868,468 899,329 935,923 8,883,177
Tenant Income
1. Dunkin Donuts 1 141,316 144,893 148,573 152,331 155,872 159,582 136,107 166,971 172,051 177,258 182,612 1,737,564
2. Trader Joe's 2 509,801 513,467 542,959 560,097 563,609 567,849 571,941 488,512 605,134 623,484 642,348 6,189,200
3. Your Verizon 3 106,112 109,258 112,559 115,998 100,391 124,695 128,366 132,054 136,071 140,188 144,423 1,350,114
4. Chop't 4 142,382 143,284 144,296 149,999 160,081 161,124 162,131 163,038 140,679 189,309 195,028 1,751,351
5. The Dress Barn 5 270,188 272,367 288,001 295,042 262,978 330,290 339,972 349,632 360,303 371,229 382,461 3,522,463
6. Modern Acupuncture 6 67,993 102,443 103,138 109,223 112,484 113,200 119,758 123,315 124,162 125,017 110,228 1,210,961
7. Qdoba 7 120,070 120,823 104,541 133,177 137,023 141,112 145,267 149,438 153,985 158,644 163,436 1,527,517
8. BOM Nails 8 87,823 88,443 89,138 91,067 113,869 117,267 120,720 124,189 127,966 131,838 135,820 1,228,141
9. Kyoto 9 159,920 155,709 228,679 235,663 242,468 249,704 257,056 264,438 272,483 280,729 289,208 2,636,059
10. Nonna's 10 204,207 205,504 209,821 215,401 218,387 222,330 230,756 241,831 243,605 212,472 281,062 2,485,376
11. Firehouse Subs 12 110,807 113,224 115,760 118,393 120,888 123,556 126,233 127,724 112,554 143,907 148,254 1,361,299
12. North Jersey Lash 4.1 104,522 105,158 105,871 109,381 115,464 116,200 116,910 117,550 102,067 133,772 137,812 1,264,706
13. SportClips 11 71,276 71,710 72,197 72,723 74,072 79,240 79,724 80,161 80,754 67,769 95,622 845,248
14. Walgreens 14 707,954 712,013 716,567 721,492 725,380 730,074 734,603 738,688 744,238 749,832 755,553 8,036,393
15. McDonalds 15 245,597 246,948 258,775 274,848 276,143 277,706 279,214 292,229 310,393 312,256 314,161 3,088,269
Total Tenant Income 3,049,969 3,105,245 3,240,875 3,354,836 3,379,108 3,513,929 3,548,759 3,559,768 3,686,444 3,817,704 3,978,027 38,234,664
Tenant Improvements
1. Dunkin Donuts 1 0 0 0 0 0 0 -24,131 0 0 0 0 -24,131
2. Trader Joe's 2 0 0 0 0 0 0 0 -107,711 0 0 0 -107,711
3. Your Verizon 3 0 0 0 0 -17,815 0 0 0 0 0 0 -17,815
4. Chop't 4 0 0 0 0 0 0 0 0 -27,288 0 0 -27,288
5. The Dress Barn 5 0 0 0 0 -58,585 0 0 0 0 0 0 -58,585
6. Modern Acupuncture 6 -25,000 0 0 0 0 0 0 0 0 0 -19,890 -44,890
7. Qdoba 7 0 0 -19,077 0 0 0 0 0 0 0 0 -19,077
8. BOM Nails 8 0 0 0 -16,172 0 0 0 0 0 0 0 -16,172
9. Kyoto 9 0 -32,775 0 0 0 0 0 0 0 0 0 -32,775
10. Nonna's 10 0 0 0 0 0 0 0 0 0 -40,427 0 -40,427
11. Firehouse Subs 12 0 0 0 0 0 0 0 0 -20,623 0 0 -20,623
13. SportClips 11 0 0 0 0 0 0 0 0 0 0 -13,923 -13,923
Total Tenant Improvements -25,000 -32,775 -19,077 -16,172 -76,400 0 -24,131 -107,711 -67,156 -40,427 -33,813 -442,662
Leasing Commissions
1. Dunkin Donuts 1 0 0 0 0 0 0 -60,002 0 0 0 0 -60,002
2. Trader Joe's 2 0 0 0 0 0 0 0 -200,867 0 0 0 -200,867
3. Your Verizon 3 0 0 0 0 -44,297 0 0 0 0 0 0 -44,297
4. Chop't 4 0 0 0 0 0 0 0 0 -67,851 0 0 -67,851
5. The Dress Barn 5 0 0 0 0 -109,252 0 0 0 0 0 0 -109,252
6. Modern Acupuncture 6 0 0 0 0 0 0 0 0 0 0 -49,456 -49,456
7. Qdoba 7 0 0 -47,435 0 0 0 0 0 0 0 0 -47,435
8. BOM Nails 8 0 0 0 -40,212 0 0 0 0 0 0 0 -40,212
9. Kyoto 9 0 -81,494 0 0 0 0 0 0 0 0 0 -81,494
10. Nonna's 10 0 0 0 0 0 0 0 0 0 -100,521 0 -100,521
11. Firehouse Subs 12 0 0 0 0 0 0 0 0 -51,279 0 0 -51,279
13. SportClips 11 0 0 0 0 0 0 0 0 0 0 -34,619 -34,619
Total Leasing Commissions 0 -81,494 -47,435 -40,212 -153,550 0 -60,002 -200,867 -166,983 -100,521 -84,075 -935,138
Market Rent
1. Dunkin Donuts 1 109,240 112,517 115,893 119,369 122,951 126,639 130,438 134,351 138,382 142,533 146,809 1,399,124
2. Trader Joe's 2 355,050 365,702 376,673 387,973 399,612 411,600 423,948 436,667 449,767 463,260 477,158 4,547,408
3. Your Verizon 3 85,560 88,127 90,771 93,494 96,299 99,187 102,163 105,228 108,385 111,636 114,985 1,095,835
4. Chop't 4 116,440 119,933 123,531 127,237 131,054 134,986 139,035 143,207 147,503 151,928 156,486 1,491,340
5. The Dress Barn 5 211,020 217,351 223,871 230,587 237,505 244,630 251,969 259,528 267,314 275,333 283,593 2,702,701
7. Qdoba 7 97,200 100,116 103,119 106,213 109,399 112,681 116,062 119,544 123,130 126,824 130,629 1,244,918
8. BOM Nails 8 80,000 82,400 84,872 87,418 90,041 92,742 95,524 98,390 101,342 104,382 107,513 1,024,624
9. Kyoto 9 172,000 177,160 182,475 187,949 193,588 199,395 205,377 211,538 217,884 224,421 231,154 2,202,941
10. Nonna's 10 167,480 172,504 177,680 183,010 188,500 194,155 199,980 205,979 212,159 218,523 225,079 2,145,050
11. Firehouse Subs 12 88,000 90,640 93,359 96,160 99,045 102,016 105,077 108,229 111,476 114,820 118,265 1,127,086
12. North Jersey Lash 4.1 82,120 84,584 87,121 89,735 92,427 95,200 98,056 100,997 104,027 107,148 110,362 1,051,776
13. SportClips 11 56,000 57,680 59,410 61,193 63,028 64,919 66,867 68,873 70,939 73,067 75,259 717,237
14. Walgreens 14 589,545 607,231 625,448 644,212 663,538 683,444 703,948 725,066 746,818 769,223 792,299 7,550,772
15. McDonalds 15 196,290 202,179 208,244 214,491 220,926 227,554 234,381 241,412 248,654 256,114 263,797 2,514,042
Total Market Rent 2,459,278 2,560,523 2,637,339 2,716,459 2,797,953 2,881,892 2,968,348 3,057,399 3,149,121 3,243,594 3,340,902 31,812,809

PROFESSIONAL QUALIFICATIONS
FLORHAM PARK PLAZA TAB J

Managing Director
Work: 214.269.0542
[email protected]
PROFILE
Ronald is a Managing Director of BBG with extensive experience in commercial real estate and business
valuation. He started with Butler Burgher, Inc. in 1996 and has significant expertise with valuation of a
wide range of retail and credit net lease properties. His experience also includes analysis of hotels and
motels; industrial properties; office buildings; multi-family properties; and vacant land. Ronald also has
significant experience in the valuation of complex special purpose and mixed-use properties. A sampling
of these includes marinas, bowling and entertainment facilities; healthcare properties and various athletic
facilities.
Prior to joining Butler Burgher, Inc., Ronald was President of Ronald K. Owens & Associates, Inc., his
own commercial real estate consulting and appraisal firm based in Mineral Wells, Texas. For three years,
Ronald served as a consultant, developing commercial appraisals for many clients, ranging from
individuals to national financial institutions.
Ronald has vast experience in commercial real estate appraisal at many firms in the Texas region. He
was Senior Associate at Realty Counselors of Texas, Inc. in Houston and Michael L. Murphy &
Associates, Inc. in Dallas. Earlier in his career, Ronald was an Associate at Alliance Appraisal Group, Inc.
in Dallas, First American Real Estate Appraisers, Inc. in Austin and Michael B. O’Connell & Associates in
Houston.
PROFESSIONAL AFFILIATIONS & LICENSES

Appraisal Institute
MAI Designation, 2013
Royal International Charter of Surveyors (MRICS #0082677)
American Society of Appraisers (ASA)

Designated Member - 2015
General Certified Appraiser:

State of Texas (License # TX-1324625-G) State of New Jersey (License # 42RG00217000)
State of Georgia (License # 319499) State of Oklahoma (License # 11637CGA)
State of New York (License # 46000048277) Commonwealth of Massachusetts (License # 103084)
State of New Mexico (License # 02832-G) State of Louisiana (License # G2592)
State of Pennsylvania (License # GA003630) State of South Carolina (License # CG6470)
State of Arkansas (License # CG3079N) State of Tennessee (License # 4327)
State of California (License # AG043668) State of Alabama (License # G00862)
State of Arizona (License # 31606) State of Colorado (License # 100023969)
State of Ohio (License # 2007003824) State of Illinois (License # 553002005)
State of Kansas (License # G 2787) State of Michigan (License # 120173863)
State of Minnesota (License # 40183884) State of Mississippi (License # GA-915)
State of Missouri (License # 200835903) State of Nebraska (License # CG211005R)
State of Nevada (License # A0206082) State of North Carolina (License # A6871)
State of Virginia (License # 4001015305) State of Washington (License # 1102061)
State of Idaho (License # CGA 3310) State of Indiana (License #CG41100029)
State of Iowa (License #CG03166) State of Kentucky (License #4632)
State of West Virginia (License #CG428) State of Maryland (License #31461)
State of New Hampshire (License #NHCG 824) State of Rhode Island (License # CGA 0020004)
State of Connecticut (License #RCG 0001370) State of Utah (License # 6356000 – CG00)
State of Maine (License #CG3289) State of Alaska (License #984)
State of North Dakota (License #214110) District of Columbia (License #GA12176)
State of Oregon (License #C001192) State of Florida (License #RZ3806)
State of Montana (License #8505) State of Delaware (License #X1-0000695)
State of South Dakota (License #1485CG) State of Wisconsin (License #1403)
EDUCATION
Bachelor of Business Administration in Real Estate & Finance
University of Texas - Austin, 1985
COURSEWORK
Appraisal Institute Courses
Real Estate Appraisal Principles Capitalization Theory & Techniques Part A
Capitalization Theory & Techniques Part B Residential Case Studies
National USPAP Update Standards of Professional Practice, Part A
Standards of Professional Practice, Part B Business Practices and Ethics
Highest and Best Use and Market Analysis Advanced Sales Comparison and Cost Approaches
APPRAISAL REPORT
4 Retail Condominiums
111 Fulton Street
New York, NY 10038
REQUESTED BY
Mr. Jacob Klein

The Klein Group, LLC
Florham Park, NJ 07932
PREPARED BY
BBG, Inc.
112 Madison Avenue, 11th Floor
New York, NY 10016
DATE OF VALUE OPINION
September 30, 2018
June 30, 2015

October 12, 2018
Mr. Jacob Klein

The Klein Group, LLC
Florham Park, NJ 07932
Re: Appraisal File No. 0118009559

4 Retail Condominiums
111 Fulton Street
New York, NY 10038
Dear Mr. Klein:
In accordance with your request, the undersigned have prepared an appraisal of the above-
captioned property for the purpose of estimating the fair value of the subject property in
accordance with IFRS-13.
We have appraised the above referenced property, the conclusions of which are set forth in the
attached appraisal report. This is an Appraisal Report that is intended to comply with the
reporting requirements set forth under Standards Rule 2-2 of USPAP and the Code of
Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal
Institute. In addition, this appraisal has been prepared in compliance with IFRS 13 (International
Financial Reporting Standards 13-fair value measurement). The depth of analysis discussed in
this report is specific to the needs of the client and for the intended use stated in the report. The
report is intended for use only by The Klein Group LLC, its successors, assigns, and affiliates.
The report is intended only for use in The Klein Group LLC’s financial statements. The use by
others is not intended by BBG, Inc.
Mr. Klein
Page 2
October 12, 2018
The subject property is four commercial condominiums within a larger mixed use residential and
retail condominium building known as 111 Fulton Street. The leasable area is 21,109± square
feet, distributed between 16,479 square feet of retail space at grade and 4,630 square feet of
below grade selling space. Prominent tenants include 7-Eleven, Hale and Hearty, and
Bareburger. There is one vacant retail unit for which there is a LOI.
The subject is located on the northwest corner of Fulton Street and William Street, through to
Ann Street within the Financial District, in the Borough of Manhattan, City and State of New
York. It is identified on the New York County tax map as Block 91, Lots 1201,1202,1203,1368.
The underlying site is zoned as a C6-4 Zoning District and contains 23,246± square feet. The
subject was completed in 1940, converted in 2007 according to public record.
Our analyses, opinions and conclusions were developed, and this report has been prepared, in
conformance with the Standards of Professional Practice and Code of Professional Ethics of the
American Institute of Real Estate Appraisers, the Uniform Standard of Professional Appraisal
Practice (USPAP), and Title XI (with amendments) of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 (FIRREA).
The highest and best use of the subject property is as a retail property. This conclusion is based
on historical and current trends, the nature of the subject location, and the conformity of the
subject to neighboring uses.
After carefully considering all available information concerning the subject and all apparent
factors, our opinion of the value is as follows:
Fair Value Date Conclusion
"As Is" September 30, 2018 $55,150,000

Mr. Klein
Page 3
October 12, 2018
The opinions of value expressed herein are subject to the certification, assumptions and limiting
conditions, and all other information contained in the following written appraisal report.
Thank you for the opportunity to serve you.
Sincerely,
Michelle Zell, MAI

Senior Appraiser
(212) 682-8293
[email protected]
State Certified General Appraiser #46-49921
TABLE OF CONTENTS
SUMMARY OF FACTS AND CONCLUSIONS ............................................................................ 1

INTRODUCTION ........................................................................................................................ 1
IDENTIFICATION OF THE SUBJECT PROPERTY .............................................................1
PURPOSE OF THE APPRAISAL .........................................................................................1
FUNCTION OF THE APPRAISAL/INTENDED USER ..........................................................1
DEFINITION OF FAIR VALUE .............................................................................................2
PROPERTY RIGHTS APPRAISED......................................................................................2
DATE OF VALUE ESTIMATE ..............................................................................................2
SUBJECT PROPERTY HISTORY .......................................................................................3
EXPOSURE TIME ................................................................................................................3
ESTIMATE OF REASONABLE MARKETING TIME ............................................................3
LIMITING CONDITIONS AND SPECIAL ASSUMPTIONS ...................................................3
EXTRAORDINARY ASSUMPTIONS ...................................................................................3
SCOPE OF THE APPRAISAL ..............................................................................................4
CURRENT ECONOMIC CONDITIONS ....................................................................................... 5
AREA ECONOMIC ANALYSIS - NEW YORK CITY .................................................................. 16
MANHATTAN PROPERTY SALES REPORT – 1H 2018 .......................................................... 24
MANHATTAN RETAIL MARKET ANALYSIS ............................................................................ 28
CUSHMAN & WAKEFIELD’S Q2 2018 MARKET REPORT ..............................................34
NEIGHBORHOOD DESCRIPTION ........................................................................................... 36
LOWER MANHATTAN OVERVIEW ...................................................................................39
DEMOGRAPHIC OVERVIEW ............................................................................................53
ZONING SUMMARY ................................................................................................................. 59
ASSESSED VALUE AND REAL ESTATE TAXES .................................................................... 62
421(G) TAX BENEFITS ......................................................................................................64
SITE DESCRIPTION................................................................................................................. 71
FLOOD MAP ............................................................................................................................. 72
SUBJECT PROPERTY PHOTOS ............................................................................................. 73
HIGHEST AND BEST USE ....................................................................................................... 87
APPRAISAL VALUATION PROCESS ....................................................................................... 90
INCOME APPROACH............................................................................................................... 91
RETAIL RENTAL REVENUE .............................................................................................92
COMPARABLE RETAIL SPACE ........................................................................................94
SUMMARY OF DISCOUNTED CASH FLOW ASSUMPTIONS .......................................105
SALES COMPARISON APPROACH ...................................................................................... 111
SALES ADJUSTMENT GRID ...........................................................................................120
RECONCILIATION AND FINAL VALUE OPINION .................................................................. 121
ADDENDA .............................................................................................................................. 122
HISTORICAL VALUES .....................................................................................................123
RENT ROLL .....................................................................................................................124
OPERATING STATEMENTS ...........................................................................................126
ASSUMPTIONS AND LIMITING CONDITIONS ...............................................................128
CERTIFICATION ..............................................................................................................134
QUALIFICATIONS............................................................................................................136
LICENSES ........................................................................................................................137
SUMMARY OF FACTS AND CONCLUSIONS
Subject Property: 4 Retail Condominiums
111 Fulton Street
New York, NY
Description: The subject property was built in 1940 as an office

building and was converted to residential and retail
condominiums in 2007. The subject of this appraisal is
the 4 retail condominiums at the base of the residential
building. The leasable area is 21,109± square feet,
distributed between 16,479 square feet of retail space
at grade and 4,630 square feet of below grade selling
space. Prominent tenants include 7-Eleven, Hale and
Hearty, and Bareburger. There is one vacant retail unit
for which there is a LOI.
Location: The subject is located on the northwest corner of Fulton

Street and William Street, through to Ann Street within
the Financial District, in the Borough of Manhattan,
City and State of New York.
Legal Address: Block 91, Lots 1201,1202,1203,1368
Net Leasable Area: 21,109± Square Feet (Grade: 16,479 square feet; Below
Grade: 4,630 square feet)
Site Area: 23,246 SF
Zoning: C6-4
Highest And Best Use: As a retail property.
Flood Zone: According to FEMA, the subject property is located

within Zone "X", which is a not flood zone (Panel
#360497-0184F / 9/05/07).
Property Rights Appraised: Leased Fee
Fair Value Conclusion Value Date Conclusion
"As Is" September 30, 2018 $55,150,000

INTRODUCTION
INTRODUCTION
IDENTIFICATION OF THE SUBJECT PROPERTY
The subject property is four commercial condominiums within a larger mixed use residential and
Bareburger. There is one vacant retail unit for which there is a LOI.
The site is located on the northwest corner of Fulton Street and William Street, through to Ann
Street within the Financial District, in the Borough of Manhattan, City and State of New York.
The subject is identified on New York tax map as Block 91, Lots 1201,1202,1203,1368. The
underlying site is zoned a C6-4 Zoning District and contains 23,246± square feet. A metes and
bounds description for the subject is:
PURPOSE OF THE APPRAISAL
To estimate the “as is” fair value of the subject property’s leased fee interest. The purpose of the
appraisal is to estimate the fair value as of September 30, 2018, in accordance with IFRS 13.
FUNCTION OF THE APPRAISAL/INTENDED USER
The type and definition of value sought in the appraisal of the subject was an “as is” Fair Value
opinion for the leased fee interest in the property as of September 30, 2018, subject to the general
underlying assumptions and limiting conditions cited herein, and in compliance with IFRS 13
(International Financial Reporting Standards 13-fair value measurement). According to the
International Financial Reporting Standard 13, Fair Value is defined as: “The price that would be
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INTRODUCTION
received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.”
This report is intended for use only by The Klein Group LLC’s financial statements.
DEFINITION OF FAIR VALUE
IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date (ie an exit
price). That definition of fair value emphasis that fair value is a market-based measurement, not an
entity-specific measurement. When measuring fair value, an entity uses the assumptions that
market participants would use when pricing the asset or liability under current market conditions,
including assumptions about risk. As a result, an entity’s intention to hold an asset or to settle or
otherwise fulfil a liability is not relevant when measuring fair value. The IFRS explains that a fair
value measurement requires an entity to determine the following:
(a) the particular asset or liability being measured;

(b) for a non-financial asset, the highest and best use of the asset and whether the asset is used in
combination with other assets or on a stand-alone basis;
(c) the market in which an orderly transaction would take place for the asset or liability; and
(d) the appropriate valuation technique(s) to use when measuring fair value. The valuation
technique(s) used should maximise the use of relevant observable inputs and minimize
unobservable inputs. Those inputs should be consistent with the inputs a market participant would
use when pricing the asset or liability.
PROPERTY RIGHTS APPRAISED
For the subject property, we have appraised the leased fee interest, described:
The existence of leases within the subject property indicates that the property should be
appraised on the basis of a leased fee estate (encumbered). A leased fee estate is created by a
lease (or several leases) on a property and reflects the lessor's (landlord's) ownership interest in
the real estate. The lessor's interest consists of the right to receive contract rental payments
during the term of the lease and the ultimate return of the rights of use and possession of the
property at lease expiration. According to the Dictionary of Real Estate Appraisal, "A leased fee
estate is an ownership interest held by a landlord with the right of use and occupancy conveyed
by lease to others; the rights of the lessor (the leased fee owner) and leased fee are specified by
contract terms contained within the lease."
DATE OF VALUE ESTIMATE
The date of our “as is” valuation is September 30, 2018. Michelle Zell, MAI, inspected the
property and its environs on September 28, 2018.
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INTRODUCTION
SUBJECT PROPERTY HISTORY
The subject property, which is known as 111 Fulton Street was acquired by the current owners
(111 Fulton Street Investors, LLC) on 11/10/2011 for $20,000,000. The property was acquired
non-stabilized, at approximately 32% occupancy. Ownership was proactive in leasing up the
majority of the property, bringing it to 100% occupancy. The last vacant space was leased in the
Summer of 2015. Currently there is one vacant space, as Au Bon Pain terminated their lease
early. There is a LOI for this unit at market rent. We have appraised the subject previously. The
historical values can be found in the addenda.
EXPOSURE TIME
Exposure time has been defined as the estimated length of time the real property interest
appraised would have been offered in the market prior to the hypothetical consummation of a
sale at fair value on the effective date of appraisal; a retrospective estimate based on an analysis
of past events assuming a competitive and open market.
Exposure time is always presumed to precede the effective date of appraisal. It is our opinion
that a normal exposure time for the subject property is 12 months. This conclusion is predicated
on interviews with brokers and other real estate industry sources and on information obtained in
the verification process. The value reported herein presumes such an exposure time.
ESTIMATE OF REASONABLE MARKETING TIME
Given the subject's location and the marketing times for similar properties in the area, we
estimate the marketing time for the subject to be within one year.
LIMITING CONDITIONS AND SPECIAL ASSUMPTIONS
Information, estimates and opinions furnished to us and contained in the report were obtained
from sources considered reliable. However, no responsibility for accuracy of such items
furnished by secondary parties can be assumed.
EXTRAORDINARY ASSUMPTIONS
According to The Dictionary of Real Estate Appraisal (6th Edition), an Extraordinary

Assumption is "An assumption, directly related to a specific assignment, as of the effective date
of the assignment results, 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." This appraisal is subject to the following extraordinary assumptions: None.
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INTRODUCTION
HYPOTHETICAL CONDITION
According to The Dictionary of Real Estate Appraisal (6th Edition), a Hypothetical Condition is
1. A condition that is presumed to be true when it is known to be false; 2. A condition, directly
related to a specific assignment, which is contrary to what is known by the appraiser to exist on
the effective date of the assignment results, but is used for the purpose of analysis. Hypothetical
conditions are 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." In the development of our opinions of
value, we have applied the following Hypothetical Condition: None.
General Assumption
Information, estimates and opinions furnished to us and contained in the report were obtained
from sources considered reliable. Details regarding the development including buildable area,
gross building area, net sellable/rentable area, etc. were furnished by the client. While we have
attempted to verify information when possible, no responsibility for the accuracy of such items
furnished can be assumed. Any opinions of value stated herein are based on the assumption that
project has the appropriate governmental approvals, licenses, and is ultimately completed as
proposed.
SCOPE OF THE APPRAISAL
BBG, Inc. has been retained by The Klein Group, LLC to prepare a fair valuation of the subject
property. Our analysis and conclusions regarding the subject property are based, in part, on
interviews conducted with real estate brokers, appraisers, developers, and government officials.
Within the course of this assignment the following were prepared:
Analyzed various population, labor, and economic growth statistics, development patterns, and
recent real estate activity and competition and related these factors to their impact on the
subject retail property market.
Researched and investigated the subject's location in terms of its economic activity,
development patterns, and future trends.
Determined the Highest and Best Use of the subject property based on an analysis of all
relevant factors.
Researched and ascertained various support information (e.g., rental data, improved
comparables, market and area demographics, etc.) in deriving a current fair value estimate.
Analyzed the current contract rent of the subject's occupancy lease, projected occupancy,
forecasted operating expenses, and determined competitive discount and capitalization
rates applicable to the subject property from both the local and national markets.
Utilized market-derived information including rental data and improved comparable sales in
deriving a current Fair value estimate.
Advanced an opinion of the fair value of the subject property “as is” as of September 30, 2018.
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MARKET AREA ANALYSIS
CURRENT ECONOMIC CONDITIONS
U.S. Economy – GDP growth accelerated in the second quarter due to strong agricultural export
demand from China, ahead of tariff deadlines and a rebound of consumption spending from a
sluggish first quarter. Non-residential business investment and government spending also added
to growth while the national labor market remained robust. The only wavering sector is housing,
which was a drag on first and second quarter growth.
Financial Markets – Equity markets struggled through the second quarter and only recently
surpassed their prior highs set in February. However, fundamentals remain positive including
the fiscal stimulus and tax cut, strong corporate profits, and record share buybacks. Wall Street
profits were up strongly in the first half of the year.
Monetary Policy & Inflation – The Fed continued to tighten with measured rate hikes and has
begun trimming its balance sheet, citing a strengthening labor market and an approaching
inflation target. The higher short-term rates resulted in a flatter yield curve. The Fed also
announced that nearly all banks passed the annual stress test exercise.
New York City Labor Market - While the City’s labor market continued to grow moderately, the
pace has slowed in the first half of the year. Although the unemployment rate is near records
lows and the labor force participation rate has increased, wage growth remains muted. Most of
the new jobs this year have come in education & health and professional & business services.
New York City Residential Market – Activity in the residential market downshifted in the first
half of the year with condo sales and prices dropping. Financing has become more expensive as
mortgage rates climbed half a percentage point in 2018. The growth of City rental rates slowed
at the end of 2017 but have rebounded modestly this year.
New York City Office Market – The demand for office space remained robust with first half
leasing totals up from the first half of 2017. Midtown leasing was particularly strong with major
deals signed by Pfizer and JPMorgan. Downtown leasing was slower, and the opening of 3
World Trade Center added over a million and a half square feet of new inventory to the market.
New York City Tourism – Tourism in New York maintained momentum in the first half of the
year. Hotel occupancy, prices, and Broadway attendance all rose through the start of 2018, and it
is expected that the annual tally of visitors—both domestic and international—will set another
record this year.
The U.S. Economy
The release of the comprehensive update to national GDP data revealed a stronger economy than
earlier estimated, and the second quarter received an (expected) boost from booming agricultural
exports as Chinese buyers stockpiled grain ahead of tariff deadlines. BEA’s estimates of second
quarter annualized growth was 4.2% while first quarter growth was revised to 2.2%, up 0.2
percentage points from the prior estimate. The slow first quarter was due partly to a weak
contribution from consumption, which accounted for just 0.36 percentage points of growth, well
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under the 2 percentage point average over the last 5 years. Consumption spending on goods
subtracted 0.13 percentage point from first quarter growth, the first negative contribution in
nearly 7 years, while spending on services was also slow. However, consumption rebounded in
the second quarter, contributing about 2.6 percentage points to total growth.
Investment spending continues to provide a tailwind with non-residential business investment

providing approximately 1.5% and 1.1% to growth in the first and second quarters, respectively,
well above the 5-year average of 0.5 percentage points. This boost was evident in other
measures of business spending. Manufacturers’ new orders of non-defense capital goods
excluding aircraft—a proxy for business investment—strengthened through 2017 and grew 7.2%
(year over year) in the second quarter, up from 6.8% in the first.
However, the other two major investment components—housing and inventories—were a

headwind. The contribution from residential investment was negative in the first half of the year,
subtracting an average of about 0.1 percentage points per quarter from growth. Housing has
been a drag in 6 of the last 10 quarters, and most indicators continue to signal subdued growth.
Housing starts in the first quarter declined 4.2% (quarter over quarter), down from a 4.6% gain
the first quarter. Likewise, over the same period, new home sales slumped, falling 1.5% from
the first. While not as significant from a GDP standpoint, existing home sales also faded,
dropping 1.7% in the second quarter after shedding 1.5% in the first. Mortgage rates have
climbed half a percentage point in the first half of the year (to 4.5% as of July) and are expected
to continue rising, which will constrain real estate sales. Likewise, change in private inventories
was a large drag in the second quarter, subtracting a full percentage point from growth as
producers ran down their stockpiles. Removing this volatile component yields an annualized
growth rate of 5.3%, the highest since 2006.
Net exports provided nearly 1.2 percentage points to growth in the second quarter, up from a
modest drag in the first. This was widely anticipated due to a surge in purchases of U.S.
agricultural products in advance of regulatory tariffs. In April, China announced a 25% duty on
U.S. soybeans triggered by the implementation of U.S. tariffs on Chinese goods, which
ultimately occurred on July 6th. In anticipation of a price hike, Chinese soybean purchases
boomed, with the value of U.S. exports more than doubling in May and June to $8.4 billion,
115% higher than the same year-ago period. The impact is expected to be transitory as China
shifts its orders to other exporters, primarily Brazil and Argentina. Preliminary trade data
supports this view. Exports of food, feeds, and beverages soared 14.1% in May (month over
month) but contracted in June and July.
Government spending provided a boost in the first half of the year, due largely to robust defense
expenditures. Federal spending in the second quarter provided 0.24 percentage points of growth,
up from 0.17 percentage points in the first quarter and well above the 5-year average of about
-0.1 percentage point (drag). This is likely a result of the 2-year increase in federal spending
caps enacted in the Bipartisan Budget Act signed in February and, as such, will be temporary
unless extended by Congress.
The advance GDP estimate released in July included the 5-year comprehensive update which
revised data back to 1929, altered the base year for the GDP deflator, and incorporated a new
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seasonal adjustment methodology. Annual growth rates show only small changes. For example,
real GDP for 2017 was revised down by 0.1 percentage point to 2.2% while 2016 growth was
revised up slightly. Adjustments nominal GDP levels were relatively large, however. The 2017
level increased by $94.8 billion (or 0.5%). One of the elements of this increase was a substantial
boost to estimates of personal income, due largely to increases to proprietors’ income and
compensation levels. This, in turn, resulted in a large increase in the personal savings rate which
was revised up from 3.5% to 6.7% in 2017. This significantly changes the view of consumer
behavior. Prior to the revision, personal savings rates declined from 6.1% in 2015 to 3.4% in
2017. After the revisions, this drop has been significantly muted with savings rates now falling
from 7.6% to 6.7% over the same period and remaining around 7% in the first half of 2018.
From a growth standpoint, that implies that the current levels of consumption spending are likely
sustainable in the near future.
The national labor market shows no signs of slowing. Through the first half of the year, the pace
of job creation averaged 215,000 per month, up from 182,000 in 2017. With the unemployment
rate near 18-year lows, the only way to maintain this pace is for the labor force participation to
increase. Starting in March, the number of available openings has exceeded the number of
workers searching for jobs. Driven by demographic trends, labor force participation has dropped
steadily since 2000, hitting a low of 62.3% in 2015. Since then, it has been roughly flat, moving
in a narrow band between 62.5% and 63%. There is some evidence that there are still some
available workers on the sidelines. The last time the national unemployment rate fell below 4%
(April 2000), the broadest measure of unemployment—including total unemployed, marginally
attached workers, and total part-time workers who want full-time work—fell to 6.9%. Currently,
this measure is still a half percentage point higher at 7.4% in August.
Except for housing, nearly all economic cylinders are firing in sync and growth in the near term
seems assured. However, the biggest risk is the building trade conflict between the U.S. and its
major partners. While the scale of U.S. tariffs on Chinese goods started small, affecting $50
billion of products (about 10% of total U.S. imports from China in 2017), the Trump
administration recently announced further levies on an additional $200 billion worth of Chinese
goods. Aside from the impact on prices, the scrambling of investment decisions will lead to
many unintended consequences such as the announcement that Harley-Davidson would move
some of its production to Europe to avoid retaliatory tariffs from the EU. Should protectionism
escalate, the realignment of global supply chains will ultimately impede global growth. A recent
paper by the St. Louis Fed analyzes the macro performance of countries that raised tariffs and
find that, on average, per capita GDP, wages, and investment to GDP ratios fall relative to trend
after tariff actions. Moreover, as of September, the current economic expansion has entered its
111th month, the second longest run in the post-WWII period. While it is possible that the U.S.
economy will surpass the record of 120 months set during the tech boom, the uncertainty created
by the current trade frictions may constitute a significant headwind.
Financial Markets
After achieving a record high at the end of January, equity markets slumped heavily in February
and struggled this year to regain their prior peaks. The S&P 500 and Dow hit all-time highs on
January 26th, only to shed over 10% over the next 2 weeks. The S&P 500 slowly recovered and
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finally recouped the losses by the end of August. The Dow, however, remained below the prior
peak. The second quarter was volatile with equity markets buffeted by escalating trade frictions
as the administration announced tariffs on an array of products from steel and aluminum to
washing machines and solar panels. Predictably, these drew tit-for-tat responses from trading
partners which scrambled investment plans and supply chains. Despite the uncertainty, equity
prices managed modest increases in the second quarter with the S&P up 2.9% while the Dow
eked out a 0.7% gain. Subsequently, the market strengthened through July and August with the
S&P and Dow both advancing by nearly 7%.
Retail investors reacted predictably to the uncertainty. According to ICI data, investors pulled
money out of equity mutual and equity ETF funds in 5 of 6 months ending in July, the longest
stretch of outflows since the period just prior to the presidential election. Through the first 7
months of 2018, equity funds grew by $14 billion, just 10% of the inflows over the same period
last year. By contrast, bond funds attracted $156 billion year to date through July.
Nevertheless, most market fundamentals are still strong. The fiscal stimulus from the tax cut and
robust labor markets are helping to mitigate the negative impact of the trade spat. Corporate
profits have grown for 5 consecutive quarters to $2.25 trillion (seasonally adjusted annual rate),
surpassing the prior $2.19 trillion record set in third quarter 2014. Likewise, earnings growth for
firms in the S&P 500 accelerated to nearly 27% (year over year) in the first and second quarters.
In addition, firms have been repurchasing their shares at a record pace. S&P 500 firms bought
back $190 billion of shares in the first quarter, surpassing the prior quarterly record of $172
billion in third quarter 2007.
There is evidence that a large portion of the buyback financing is coming from repatriated
overseas profits. Moody’s Investors Service estimates that total offshore cash held by U.S. non-
financial firms was about $1.4 trillion in 2017, and the Tax Cut and Jobs Act (“TCJA”)
significantly lowered the incentives for U.S. firms to continue holding these profits overseas. As
a result, BEA’s international transactions data for the first half of 2018 showed a massive jump
in direct investment dividends which soared to $464 billion, up from just $73 billion in the first
half of 2017. Since the benefit of delaying the repatriation of overseas profits has been
effectively eliminated by the TCJA, at the current pace, this boost is likely to continue for a year
or more as firms return cash from offshore. One ancillary impact is that firms are relying less on
debt markets. Over the past 5 years, the value of corporate bond issuance has grown an average
of 3.8% per year and set new records from 2012 through 2017. This streak appears to be ending
with issuance down 13% in the first half of 2018.
Record low interest rates were also an important factor driving the robust corporate borrowing
over the past 5 years. However, interest rates have been climbing, particularly at shorter
durations, with 2-year treasury yields rising 63 basis points in the first half of 2018. Over the
same period, 10-year yields gained just 45 basis points, bringing the 10-year less 2-year spread to
below a quarter percentage point for the first time since 2007. The concern is that an inverted
yield curve—with longer yields below shorter rates—is a fairly dependable harbinger of an
economic downturn. While the spreads have not yet become negative, the Fed intends to
continue tightening which is expected to result in a flattening yield curve through the rest of the
year.
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Interest rate swings have consequences for Wall Street profits. A steep yield curve is generally
good for banks since they borrower short and lend long. As a result, rising short rates have
become a minor drag on profits. While NYSE member firms earned a robust $13.7 billion in the
first half of 2018 (up 11% year over year), their interest expenses were up 83%.
Monetary Policy & Inflation
The Federal Reserve continues to gradually raise interest rates despite fears of an intensifying
trade war. In the first half of the year, the Fed executed 2 quarter point hikes with the June
tightening marking the sixth hike since 2015. The current target range is between 1.75% and
2%, and the current Effective Federal Funds Rate (“EFFR”) is standing at 1.91% as of early July.
The majority (76%) of respondents to the Blue Chip survey expect two more hikes by year end
which would bring the benchmark to a range of 2.25% to 2.50%. In response to heightened risks
from trade frictions, the Fed claims that its monetary stance remains accommodative despite
recent tightening. In addition, the Fed has continued to urge large banks to maintain a significant
level of capital through the annual stress test in case of financial volatility.
The paths of inflation and employment are 2 key factors for determining the number of rate hikes
this year. On a year over year basis, the core personal consumption expenditures price index
(“PCE”), the Fed’s preferred inflation measure, hit the FOMC’s longer term objective of 2% in
May for the first time since April 2012. Citing faster economic growth driven by a tight labor
market, tax cuts, and an increase in government spending, Fed officials expected the annual PCE
price indexes to accelerate. However, inflation has remained relatively low by historical
standards.
The June unemployment data bolstered the Fed’s case for further hikes. The report showed
employers added 213,000 jobs in June; meanwhile, the unemployment rate bounded back to 4%
from 3.8% a month earlier. However, labor force participation grew by 601,000 as workers who
were not actively looking for jobs are now re-entering the job market due to a more positive
outlook. The right labor market raised concerns about potential risks to inflation and financial
stability, which reinforced the direction of the current Fed rate policy.
The Fed has also begun to reduce its balance sheet by cutting back on the number of maturing
bonds it reinvests in the market. The total assets held by the Fed have dropped from a peak of
$4.5 trillion to $4.3 trillion in June. The reduction of its total asset holdings has been slow. On a
monthly average, total assets held by the Fed fell at a rate of -0.5% for 2018. It would take the
Fed decades to reach normalization at this current pace. The Fed held an average of $800 billion
in total assets before the recession with data going back to 2002.
The behavior of the EFFR has recently become an issue as it approaches the upper boundary of
the Fed’s target. Fed Chairman Powell acknowledged this concern and announced measures to
keep the rate “closer to the middle.” One of the Fed’s measures to exert control over the EFFR is
the “interest on excess reserves” rate (“IOER”), which was kept at 1.95 despite the federal fund
target ceiling rising to 2%. This set the interest rate paid on reserve balances 5 basis points
below the upper bound of the target range. Due to the large amount of surplus in the financial
system from the crisis-era quantitative-easing program, the Fed has been effectively controlling
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the target EFFR by influencing the IOER and the “overnight reserve repurchase” (“RRP”).
As mentioned, another noticeable concern is the flattened yield curve, driven largely by the Fed’s
short-term rate hikes. The gap between the 2- and 10-year treasury yields has been declining
steeply. If this continues, long-term interest rates will fall below short-term rates. Historically,
an “inverted” yield curve has been a reliable harbinger of an impending recession. However, the
interval between inversion and recession has been variable and, according to researchers at the
San Francisco Fed, this could be somewhere between 6 months and 2 years.
As the interest rate gains momentum, the Congressional Budget Office (“CBO”) has examined
its effect on the growing federal debt. The forecasts in the CBO’s recent annual long-term report
reveal that borrowing costs and the growing levels of federal debt would make federal debt
payments 3.1% of the gross domestic product in 2028 and reach 6.3% by 2048. If this trend
continues, interest payments on national debt would equal Social Security expenses by 2048.
The CBO claimed that the rising interest rate and rising government debt would reinforce each
other in a vicious cycle. The CBO forecasts that the Federal Reserve will raise its benchmark
interest rate to 4% in 2021. However, the Fed’s March economic projection shows a more
modest median rate of only 3.4% for 2020, below the CBO’s estimation.
In its role as bank regulator, the Fed recently concluded its annual stress test exercise. Under the
Dodd-Frank Wall Street Reform and Consumer Protection Act (i.e., “Dodd-Frank”), state non-
member banks and state savings institutions with total consolidated assets of $10 billion or more
are required to conduct annual stress tests. Dodd-Frank stress testing directed by the Fed
evaluates whether banks have enough capital under adverse economic conditions. Banks were
also faced with a severely adverse scenario, including a deep global recession, accompanied by a
steepening yield curve in which U.S. real GDP dropped 7.5% from its pre-recession peak,
unemployment reached 10%, and a financial meltdown occurred in Asia. In addition, the severe
scenario projected banks would lose $578 billion during the recession.
The Fed announced in June that all 35 banks met the regulatory minimums for capital, which
means that all would be able to keep lending in the severe recession scenario. However, only 34
banks could pay dividends and buy back their own shares—the lone outlier was the U.S. branch
of Deutsche Bank. Meanwhile, two Wall Street giants—Goldman Sachs and Morgan Stanley—
were given “conditional approval” to payouts under the conditions that they will keep their
shareholders’ payouts near last year’s levels and increase capital cushions over the next year.
Goldman Sachs and Morgan Stanley both reported one-time accounting losses due to the new tax
law. Financial institutions that announced they had voluntarily scaled back planned payouts to
win the Fed’s approval were American Express, JPMorgan Chase, KeyCorp, and M&T Bank.
New York Labor Market
Private sector job growth remains solid but continues to decelerate from 2014’s record high 3.8%
annual average growth rate (an addition of 130,100 positions on an annual average basis). Since
then, private job growth slowed to a 2.1% pace (81,000 jobs) in 2017. With public sector jobs
contracting slightly in 2017, total unemployment grew just 1.9%, the first sub-2% pace in 7
years.
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The New York City labor market slowed further in 2018; on an annual average basis, private
employment through the first half of the year increased 1.9%. Forty-five percent of new jobs
were created in education & health services while 22% came from professional & business
services. The breakdown was similar for full year 2017 when these two sectors accounted for
67% of private job growth. This was the highest proportion since 2010 during the rebound from
the recession when they comprised over 90% of job growth.
Based on the seasonally adjusted monthly data, financial activities increased 2,300 positions
through the first 6 months of 2018. This gain reflects strength in the financial and insurance
subsector, which added 4,100 jobs and offset 1,800 job losses in real estate. Real estate
employment, despite its recent slump, stands 8.7% above its pre-recession peak. The banking
sector added 1,500 jobs while the insurance industry reduced its payrolls by 400. The highly
compensated securities sector posted 2,900 new positions but is still 5.9% below its prior peak.
Several other sectors have been performing well. Retail trade has delivered 5,900 jobs through
the first half of 2018, the most through this period since 2013. Meanwhile, leisure & hospitality
employment advanced with 3,300 jobs. The information sector, which encompasses media such
as newspapers, motion pictures, and sound recording as well as communications and many tech
firms, added 1,100 positions through June and exceeded its pre-recession peak by 17.1%, or
29,100 jobs.
The slower job growth over the past few years is a result of the tightening labor market. The
annual average unemployment rate in 2017 hit 4.6%, and hourly wages registered an annual
average of $35.14 in 2017, representing 3.6% year over year growth, the strongest since 2008.
As of June, the unemployment rate fell to a new record low of 4.3% while the labor force
participation rate has been hovering near historic highs between 60% and 61%. However,
despite a tight labor market, wage pressures are muted: hourly wages in the first half of 2018
averaged $35.89—2.4% higher than the same period a year ago.
Private sector wage earnings grew 7% in 2017 (the highest annual increase since 2014), driven
by growth in the financial sector. The finance and insurance industry saw wage earnings jump
10.7% from the prior year, exceeding OMB’s forecast. Earnings in the securities subsector grew
by 12.7%. Excluding finance, private sector earnings grew 5.5%. Other sectors with notable
earnings growth in 2017 were health care (6.6%--the highest since 2003) and retail trade (4.9%--
the strongest since 2014).
New York City Residential Market
Residential market activity picked up in 2017 but revealed early signs of reversal this year.
According to data from the Department of Finance (“DOF”), the total number of residential
transactions, which include single-family homes, co-ops, and condominiums, grew 2.6% in
2017—bouncing back from the slight 0.2% decline in the prior year. The condominium market
was particularly strong, registering 9.8% growth (strongest in 4 years) in transactions over the
year. Through the first quarter of 2018, however, the sales count and average price of condos
plummeted 16.3% and 17.8%, respectively, from the prior year. Manhattan condos were
particularly affected; the sales count fell 23.9% for the worst decline since 2009, and the average
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price decreased by 15.3%, the worst since 2003.
Data from Douglas-Elliman Real Estate also indicates a downturn in higher end properties.
According to the first quarter report, the average sale price for a condo in Manhattan fell 10.9%
from the prior year while the number of sales plummeted 33%. In the second quarter, the price
and sale count were down by 4.9% and 20.5% annually, respectively. Also, in the second
quarter, the absorption rate (estimated months required to sell all listings at the current rate of
sales) for condos increased from 7.2 months in the prior year to 9.5 months. Meanwhile, luxury
properties (above $4 million) registered nearly flat average prices (0.2% increase) and an 18.6%
decline in sales. The absorption rate for these properties jumped by 4 months.
Meanwhile, mortgage rates have been rising. In 2017, a 30-year fixed rate mortgage average
3.99%--the highest in 3 years. The payment on a mortgage for an average priced (of all
residential transactions) New York City home in 2017 (assuming 20% down payment and tax
liabilities) would require annual interest payments of approximately $20,000 along with a
$27,000 principal. That’s about an extra $2,500 in annual interest and $900 in principal than for
an average priced home in 2016 when the mortgage rate was at a more favorable 3.65%.
Affordability has deteriorated further in 2018 with the 30-year fixed mortgage rate increasing by
50 basis points through the first half.
According to the StreetEasy Rent Index, the City’s rental rates grew 0.3% on an annual average
basis, the slowest since the Great Recession. Growth resumed in the first half of 2018 with the
rent index growing by 0.8% from the same period last year. The StreetEasy rental index uses a
Case-Shiller repeat sales approach in that it tracks price changes using the asking rents for units
with more than one recorded transaction in the StreetEasy system, thus controlling for
composition changes in the rental inventory. Coverage includes Manhattan, Brooklyn, and
Queens.
The issuance of building permits, a measure of future housing supply, remains robust albeit
slower than the prior year. Through the first half of 2018, the City issued permits for 10,927
units—down from 12,023 through the same period last year. So far this year, Brooklyn has been
the top contributor of building permits with an issuance of 3,502 followed by the Bronx (2,865),
Queens (2,259), and Manhattan (1,999). Staten Island saw the issuance of permits for 299 units.
New York City Office Market
Manhattan office demand remains robust. In 2017, leasing activity totaled 30.5 million square
feet, up 16% from the prior year. Downtown leasing was especially active, rising 63.6%, while
Midtown leasing grew 8.6%. The average rental rate by the end of 2017 was $72.25 per square
foot, which was 0.8% lower than it was the previous year. Meanwhile, the total vacancy rate
was down annually by 0.4 percentage points at 8.9%.
Work places are consolidating and using space more efficiently. Even though occupied office
space in 2017 hits its highest level since 2008, there was less space allocated for each employee
than even a year ago. In 2017, there was 257 square feet of occupied space for every office
using employee vs. 261 square feet in 2016. This downward trend has been evident for many
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years, starting from the 1995 peak of 315 square feet per employee.
The office market is off to a solid start in 2018. Through the first half, leasing activity totaled
16.1 million square feet—up from 15.4 million square feet last year. Midtown leasing accounted
for 13.4 million square feet, up 9.2% year over year, while Downtown activity was down 11.7%.
A 7% rental rate jump Downtown accompanied its slump in leasing activity, due most likely to
the relatively high rents in the new World Trade Center buildings. The overall vacancy rate was
9.2% in June—same as last year—due to the opening of 3 World Trade Center which added 1.6
million square feet of new inventory to the market.
Several major deals have fueled activity in Midtown. The largest lease in the first half of the
year was Pfizer’s nearly 800,000 square foot lease at 66 Hudson Boulevard. JPMorgan Chase,
while planning to demolish and rebuild its 52-story headquarters at 270 Park Avenue, took on a
418,000 square foot lease at 390 Madison Avenue. In the next few years, Midtown activity will
likely remain robust, and vacancy rates will increase as major ongoing projects such as One
Manhattan West, One Vanderbilt, and 30 Hudson Yards enter the market.
Commercial sales have been mixed this year; through the first quarter, the sales count of
commercial transactions declined 1% from the prior year. However, the average price jumped
65.2% year over year which, in turn, pushed the total transaction value for the first quarter up
63.6%. Sales of large commercial properties (valued at $100+ million) has also been
outperforming. Through the first quarter of 2018, 12 large buildings changed hands with a total
value of $6.5 billion, more than double than in the same period last year. The jump is
attributable largely to Google’s purchase of the Chelsea Market building for $2.4 billion.
New York City Tourism
Tourism in New York has also had a good start in 2018, and NYC & Company is forecasting
strength for the full year. Hotel occupancy, room rates, and Broadway attendance all rose
through the start of 2018. According to the NYC & Company forecast, the number of visitors
will increase form 62.8 million in 2017 to 65.1 million in 2017, a 3.7% year over year growth.
The gains will be driven by both domestic and international visitors. NYC & Company
projections indicate that better economic conditions will boost domestic visitors to 3.6% (to 51.4
million) while it is expected that international visitors will increase 4.1% (to 13.7 million) if
global economic and political condition hold. This would be the first time since 2013 that
international markets outpace domestic travel growth.
Broadway, a major City attraction, reflected a strong first half in 2018. In the first 25 weeks of
the year, Broadway shows reported gross revenue of $849.1 million, up 10.5% from $768.4
million in 2017. Attendance also grew by 1.1% (to 6.8 million), implying that much of the
revenue growth was due to higher ticket prices.
Hotel inventory continues to expand in 2018, but at a slower pace than 2017. After a 4% jump
from 112,000 rooms in 2016 to 116,500 in 2017, the active room inventory has grown in 2018,
to 117,300 through April. However, this improvement was due to big jumps in January followed
by declining inventory in the subsequent 3 months. Hotel room nights sold in first quarter 2018
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increased 6.5% from the same period last year, the highest growth rate since first quarter 2014.
Furthermore, the occupancy rate was 78.9%, the highest first quarter rate in 4 years. Room rates
averaged about $224 in first quarter 2018, up from $215 in first quarter 2017.
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AREA MAP
AREA MAP
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AREA ECONOMIC ANALYSIS - NEW YORK CITY
The New York Metropolitan Statistical Area (MSA) consists of the City of New York's five
counties and the counties of Westchester and Rockland. The subject property is located in the
City of New York, New York County (Manhattan). New York City's five boroughs cover 309
square miles. New York City is the nation’s center for finance, the arts, media, fashion, and
telecommunications.
The borough of Manhattan, or New York County, forms the central political, financial, and
cultural core of the City and is the economic growth engine for the Greater New York region.
Seventy-five percent of the City’s employees work in Manhattan, which is home to the Midtown
and Downtown business districts. The City’s other boroughs are the Bronx, Brooklyn, Queens,
and Staten Island (otherwise known as Bronx, Kings, Queens, and Richmond Counties). They
also have strong, albeit significantly smaller, economies than Manhattan. Brooklyn and Queens
have the largest behind Manhattan.
Population
1980 1990 2000 2010 2018 Est 2023
Overall 7,071,639 7,322,564 8,008,278 8,175,133 8,598,697 8,816,703
% Change 3.55% 9.36% 2.08% 5.18% 2.54%
Bronx 1,168,972 1,203,789 1,332,648 1,385,108 1,470,151 1,514,767
% Change 2.98% 10.70% 3.94% 6.14% 3.03%
Brooklyn 2,230,936 2,300,664 2,465,323 2,504,700 2,647,777 2,717,521
% Change 3.13% 7.16% 1.60% 5.71% 2.63%
Manhattan 1,428,285 1,487,536 1,529,252 1,585,873 1,651,786 1,686,012
% Change 4.15% 2.80% 3.70% 4.16% 2.07%
Queens 1,891,325 1,951,598 2,229,379 2,230,722 2,350,974 2,413,050
% Change 3.19% 14.23% 0.06% 5.39% 2.64%
Staten Island 352,121 378,977 443,728 468,730 478,009 485,353
% Change 7.63% 17.09% 5.63% 1.98% 1.54%
Source: 1980-2010, US Census; 2017 The Nielsen Company
New York City is home to more than 8 million people in over 3 million households. Brooklyn is
the most populous borough with 31% of the City's population. Manhattan's 1.6 million residents,
at 49,100 residents per square mile, make it one the most densely populated residential area in
the nation. While the 1980's and 1990's saw the continuing trend of migration of city residents to
neighboring suburbs, due primarily to high housing costs and density of living, the total
population was bolstered by the large number of immigrants arriving in the city each year.
The 5.18% increase in the City’s census population from 2010 to 2018 can be attributed to the
decrease in unemployment rate as well as increasing appeal of the City. In addition, more
accurate Census counts may have benefited New York during this Census period. The City’s
population now totals 42% of the state’s total population. Except for Staten Island, each of New
York City’s five boroughs has a population greater than 1,400,000. The city’s population is
expected to continue growth over the next 5 years.
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Manhattan Population Trends, 2010-2023

2018 % Change 2023 % Change
Description 2010 Census
Estim ate 2010-2018 Projection 2018-2023
Population 1,585,873 1,651,786 4.16% 1,686,012 2.07%
Households 763,846 799,879 4.72% 818,508 2.33%
Family Households 308,828 322,663 4.48% 329,829 2.22%
Source: The Nielsen Company
Claritas estimates the 2018 population for Manhattan at 1,651,786 and projects a small increase
by 2023. The number of households in Manhattan is also projected to increase 2.33% between
2018 and 2023 from 799,879 to 818,508. These statistics are reflective of stable, mature market.
Manhattan Economy and Employment
New York City has a thriving diversified economy which explains its economic resiliency and
ability to recover from economic downturns at a faster than national average rate. As the single
largest regional urban economy in the country, New York City is the leading job hub for finance,
communication, real estate and hospitality industries in the U.S. New York is also a major
manufacturing center and shipping port and has a thriving technological sector. The city’s
comprehensive economic diversification strategy has proven to be effective.
The traditional core sectors of the city’s economy—finance and real estate—remain the
foundation of the city’s economic strength. The importance of financial service industry to the
overall wellbeing of the city cannot be overstated. At 20% of the city’s economic output, the
contribution of financial services is at least twice that of the next top-grossing industry. Although
the industry represents only 9% of the city’s private sector jobs, it accounts for nearly a third of
the private sector payroll. It also pays at least $8 billion, or 18%, of the city’s annual tax
revenues. The financial services industry generates even greater economic impact due to what is
known as the economic multiplier effect, which is a standard economic measure of the additional
indirect and induced jobs, wages and demand in non-financial services industries resulting from
an increase or decrease in financial services industry employment.
Real estate is a significant component of the New York City economy. A booming real estate
market has also brought tremendous growth to the value of construction projects across the city.
One notable example is the entirely new neighborhood of Hudson Yards, the single largest
private real estate development in the history of the United States. When complete, the new west
side neighborhood will provide over 25 million square feet of new office, retail, and residential
space. Significant public investment has already gone into the recently-opened 7 subway
extension and Hudson Park, reflecting a historic step towards delivering critical infrastructure
and beautiful green open space to the West Side. Additionally, the first section of the 2nd Avenue
subway was opened.
The City also demonstrated its commitment to working with the private sector to bring online 60
million square feet of new commercial office space citywide. Much of that will come out of the
East Midtown rezoning, which will bring state-of-the-art, high rise commercial buildings to the
73-block area around Grand Central Station.
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Employment
As of June 2018, Manhattan’s unemployment rate was 3.8%, below 4.0% of the national rate,
and also below the New York State’s unemployment rate of 4.2%. These statistics indicate a
decrease in unemployment since 2012 as a result of the moderate recovery from the recession.
The following table illustrates historical and current unemployment rates:
Unemployment Rates
Year Brooklyn Bronx Queens Manhattan NYC NYS USA
2003 9.1% 10.6% 7.4% 7.5% 8.3% 6.4% 6.0%
2004 7.6% 9.2% 6.3% 6.2% 7.1% 5.8% 5.5%
2005 6.2% 7.6% 5.2% 5.1% 5.8% 5.0% 5.1%
2006 5.4% 6.7% 4.5% 4.3% 5.0% 4.5% 4.6%
2007 5.4% 6.8% 4.5% 4.3% 5.0% 4.6% 4.6%
2008 6.0% 7.6% 5.0% 4.9% 5.6% 5.4% 5.8%
2009 9.9% 12.0% 8.4% 8.4% 9.3% 8.3% 9.3%
2010 9.9% 12.0% 8.6% 8.6% 9.5% 8.6% 9.6%
2011 9.6% 11.9% 8.1% 7.8% 9.1% 8.3% 8.9%
2012 9.8% 12.4% 8.3% 8.0% 9.3% 8.5% 8.1%
2013 9.3% 11.7% 7.7% 7.5% 8.8% 7.7% 7.4%
2014 7.6% 9.7% 6.3% 6.1% 7.2% 6.3% 6.2%
2015 5.9% 7.7% 5.0% 4.8% 5.7% 5.3% 5.5%
2016 4.5% 6.2% 3.9% 3.9% 5.2% 4.5% 4.5%
2017 4.0% 5.5% 3.4% 3.5% 3.9% 4.4% 4.1%
2018 (June) 4.4% 5.7% 3.7% 3.8% 4.3% 4.2% 4.0%
Source: NYS Department of Labor, Bureau of Labor Statistics
Unemployment Trends
14.0%
12.0%
10.0%
Brooklyn
8.0% Bronx
Queens
6.0% Manhattan
NYC
4.0%
NYS
USA
2.0%
0.0%
New York City’s employment base has historically enjoyed the distinction as an international
center of business, commerce, tourism, and culture. The FIRE (finance, insurance, and real
estate) and services (including the professions of legal, engineering services, consulting, tourism,
recreation, health care, computers and data processing) segments are considered the primary
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sources of “white collar,” or office prone, employment in the region.

Top Non-Government Employers New York City (Employees)
Em ployer # of Em ployees Firm w ide
Verizon Communications, Inc. (VZ) 177,300
J.P.Morgan Chase & Co. (JPM) 241,359
International Business Machines Corp. (IBM) 379,592
Citigroup Inc. (C) 241,000
Philip Morris International (PM) 82,500
MetLife Inc. (MET) 68,000
PepsiCo Inc. (PEP) 271,000
American International Group Inc. (AIG) 65,000
Prudential Financial Inc. (PRU) 48,331
Pfizer Inc. (PFE) 78,300
Source: Crains Book of Lists 2016
New York City is also the center of media (journalism and publishing), arts, fashion, and design.
Businesses in New York City can capitalize on the synergy created from the presence of more
than 200,000 companies, the access to investment capital and consumers, and the City’s
attractive quality of life. Companies in New York City include headquarters and regional offices
of leading world companies including 52 Fortune 500 firms—the highest of any city in the
United States—making New York the nation’s headquarters capital.
NYC Employment by Industry (2000’s)

2 0 18
2007 2008 2009 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17
( J une )
Co nstructio n 118.5 119.7 124.4 118.1 107.4 104.4 120.8 133.6 138.3 146.3 158.2 149.7
M anufacturing 101.0 89.1 81.8 79.9 73.3 74.2 76.0 76.5 78.0 76.3 74.5 72.3
Trade, Transpo rtatio n, and
576.6 562.5 578.8 556.8 584.5 584.1 593.7 622.4 629.0 629.4 644.5 642.3
Utilities
Info rmatio n 165.9 160.1 168.8 159.3 160.6 174.8 178.6 185.1 189.1 192.6 189.6 201.3
Financial A ctivities 467.9 430.4 456.7 434.2 434.9 444.6 434.0 450.4 459.7 465.8 477.3 478.2
P ro fessio nal and B usiness
591.4 578.7 600.9 583.5 606.1 639.3 639.4 672.4 699.8 723.4 757.6 761.9
Services
Educatio n and Health
707.0 756.4 738.5 764.1 781.9 763.9 819.9 845.3 869.4 930.2 991.0 984.0
Services
Leisure and Ho spitality 297.0 310.8 307.0 320.5 339.3 365.9 379.6 413.6 425.7 437.6 449.0 473.8
Other Services 158.1 162.3 164.0 167.0 157.5 171.1 174.1 179.8 184.8 187.3 194.3 194.2
Go vernment 559.2 557.1 564.6 538.2 544.4 585.0 545.5 540.5 549.9 552.4 559.2 545.0
To tal 3,742.6 3,727.1 3,785.5 3,721.6 3,789.9 3,907.3 3,961.6 4,119.6 4,223.7 4,341.3 4,495.2 4,502.7
Source: New York State Department of Labor
From 2007 to June 2018, decreases in private employment in the city were seen in only a few of
the sectors. There were increases in most sectors, which include Education and Health Services,
Professional and Business Services, Leisure and Hospitality, and Government. The remaining
sectors of employment have remained relatively stable.
Office-using employment amounts to approximately 30% of total New York City employment,
reflective of the financial and services orientation of the local economy. New York City’s prime
office inventory is concentrated in Manhattan south of Central Park within the two major
submarkets of Downtown and Midtown.
Brooklyn’s central business district in Downtown Brooklyn is anchored by Brooklyn Borough

Hall and MetroTech Center, a 16-acre urban corporate campus. Long Island City in Queens is
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REGIONAL ANALYSIS
located across the East River from Midtown Manhattan and has long been a center of
manufacturing, distribution, and industrial services.
Manhattan Economy and Employment
Total private sector employment in Manhattan was over 2,000,000 in the past year, the highest
level of any borough, representing 60.0% of the City’s total. Private sector employment
increased by 16.5% in the past decade and is now 7.0% above its pre-crisis level in 2008. The
biggest employers in 2018 are Education and Health Services, Professional and Business
Services, Leisure and Hospitality, and Trade, Transportation, and Utilities. In the past decade,
average private sector wages rose by 7.0%, after adjusting for inflation, compared to an increase
of 3.3% citywide. Manhattan was the only borough to see wages rise over this time period, with
wages falling in the other boroughs between 1% and 8%. The strongest wage growth over this
period occurred in Finance and Insurance. 2018 estimate of average household income in New
York City is $97,040 and median household income of $60,916.
Manhattan had the second lowest unemployment rate across the five boroughs, with a 3.5%
average in the past year and 3.8% unemployment rate as of June 2018. During the financial
crisis, the annual average unemployment rate in Manhattan peaked at 8.6% in 2010 and has
continued a strong decline since then. Over 80% of individuals between the ages of 24-65 were
in the labor force in the past year, the highest across the five boroughs. Big business is dominant
in the borough: 20.1% of workers are employed in a firm with more than 500 employees, and
22.5% of workers are employed in a firm with less than 20 employees. These are the highest and
lowest shares respectively amongst the five boroughs. Manhattan has more Fortune 1000
company headquarters than any county in the country. Manhattan is also home to the City’s
creative sector, accounting for 92.5% of all ‘creative economy’ employees. This share is even
higher within certain subsectors, such as Television and Broadcasting and Advertising and
Marketing. Three out of Manhattan’s five fastest growing businesses are in Advertising and
Marketing. Manhattan dominates the City’s patent activity which has increased 198.8% since
2005.
June 2018 Labor Force Data
Labor Force Em ployed Unem ployed Unem ploym ent
(000’s) (000’s) (000’s) Rate
Bronx County (Bronx) 621.5 585.8 35.7 5.7%
Kings County (Brooklyn) 1,248.0 1,193.6 54.4 4.4%
New York County (Manhattan) 941.8 905.9 35.9 3.8%
Queens County (Queens) 1,192.8 1,148.3 44.5 3.7%
Richmond County (Staten Island) 227.3 217.6 9.7 4.3%
New York City 4,246.1 4,068.2 178.0 5.0%
Source: NYS Department of Labor
New York City Personal Income
Average household income in New York City increased by 68.3% between 2000 and 2018 from
$57,645 to $97,040. This is higher than the 58.8% increase experienced by New York State.
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NYC & State Household Income

New York City New York State
2000 Census 2018 Estim ate 2000 Census 2018 Estim ate
Average Household Income $57,645 $97,040 $61,489 $97,619
Median Household Income $38,846 $60,916 $44,138 $65,700
Source: The Nielsen Company
Manhattan is the most affluent borough in New York City with a 2018 estimated average
household income level of $143,098. The next highest borough in terms of average household
income is Staten Island at $100,457. The following table illustrates per capita income figures for
New York City and the various boroughs.
NYC Household Income

Average Household Average Household % Change
Incom e 2000 Incom e 2018 (est) 2000-2018
Bronx $38,885 $56,345 44.90%
Brooklyn $46,279 $87,148 88.31%
Manhattan $83,976 $143,098 70.40%
Queens $54,663 $88,850 62.54%
Staten Island $67,698 $100,457 48.39%
New York City $57,645 $97,040 68.34%
Source: The Nielsen Company, U.S. Census
As evident, Manhattan exhibits the highest average income among the New York City boroughs
and is nearly twice the level of the United States overall. Manhattan accounts for nearly 20% of
New York State’s total income. The borough is home to nine of the wealthiest big city
neighborhoods in the nation, testifying to its affluence. Nearly all of Manhattan’s zip codes
below 96th Street have median household incomes well above the national median. The most
affluent concentrations of households’ border Central Park on Manhattan’s West Side between
77th and 91st Streets and on the East Side along Fifth, Park, and Madison Avenues between 60th
and 96th Streets. Other affluent pockets include the southern tip of Manhattan at Battery Park
City and the communities surrounding Lower Manhattan’s Financial District such as TriBeCa. In
contrast, the area north of Central Park, as well as portions of the Lower East Side, is where
residents with the lowest median household incomes reside.
Culture and Recreation
New York City offers an unsurpassed variety of cultural activities. New York is a world
renowned center of culture, entertainment, and shopping. New York contains hundreds of
museums, art galleries, theaters, restaurants, and retail stores.
The City is home to such musical institutions as the New York City Symphony, Carnegie Hall,
Lincoln Center, Brooklyn Academy of Music, and Metropolitan Opera and, with its many
Broadway and off-Broadway plays and musicals, is the performing arts capital of the world.
Several world famous dance troupes are located in New York including the Alvin Ailey
Company and Dance Theater of Harlem.
World class museums include the Metropolitan Museum of Art, Museum of Modern Art, The
Guggenheim, and Museum of Natural History. Other attractions include the Statue of Liberty,
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New York Aquarium, Bronx Zoo, Brooklyn Botanical Gardens, Empire State Building, United
Nations, New York Stock Exchange, and many others, which draw millions of visitors each year.
New York City has significant parkland including Central Park, an 843-acre oasis in Manhattan;
Prospect Park in Brooklyn; and Jamaica Bay National Wildlife Refuge in Queens. New York
City has teams in every major professional sport.
Educational and Professional Facilities
New York City has 173 schools of higher education including 21 two-year colleges, 45 four-year
colleges, professional schools, law schools, and vocational schools. Manhattan is home to some
of the most prominent educational institutions in the nation including Columbia University, New
York University, The Juilliard School, and Manhattan School of Music. The CUNY (City
University of New York) system offers an affordable education in its 6 community colleges and
11 campuses with 4-year and graduate programs across all 5 boroughs. Notable colleges and
universities located outside Manhattan include Pratt Institute in Brooklyn—a well-recognized
school of art and architecture; St. John’s University and Queens College in Queens; and
Fordham University in the Bronx. New York City also has two of the most highly regarded
public high schools in the nation—Stuyvesant and Bronx Science. As in most urban areas, the
City’s public primary and secondary education system is considered only fair overall with a wide
range in quality of education from district to district.
New York City has 75 short-term general hospitals, many of which are affiliated with local
professional universities. World famous research hospitals include NYU-Cornell, Rockefeller,
Columbia, and New York Hospital. Other highly ranked hospitals include Memorial Sloan-
Kettering Cancer Center, Mount Sinai Hospital, New York Eye and Ear Infirmary, and New
York Presbyterian Hospital.
Transportation
New York City is served by the most diverse transportation system in the United States. The
region’s transportation network links the area to the regional, national, and global commerce and
trade. A brief synopsis of the area’s transportation system follows:
RAIL SYSTEM
 NYC Subway System: a 660-mile subway line servicing approximately 5.0 million
passengers on an average weekday and approximately 1.6 billion passengers a year. NYC
Transit operates approximately 6,485 cars 24 hours a day throughout Manhattan, Queens,
Brooklyn, and the Bronx. The 26 subway routes are interconnected, and many lines feature
express trains, across-the-platform transfers to local trains, and "skip-stop" express service.
 Metro North: Based in the landmark Grand Central Terminal in Midtown Manhattan, the
MTA Metro North Railroad is the second largest commuter line in the United States,
providing approximately 270,000 customer trips each weekday and some 80 million trips per
year. With 384 route miles and 775 miles of track, Metro North goes to 120 stations
distributed in seven counties in New York State--Dutchess, Putnam, Westchester, Bronx,
New York (Manhattan), Rockland, and Orange--and two counties in the state of
Connecticut--New Haven and Fairfield.
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 Long Island Railroad: This commuter line runs from the eastern tip of Long Island to
Pennsylvania Station in Manhattan and to Atlantic Terminal in Brooklyn. The MTA Long
Island Rail Road is the busiest commuter railroad in North America, carrying an average of
288,000 customers each weekday on 728 daily trains. Annual ridership is approximately 82
million persons per year. In 1998, the LIRR completed a 10-year, $2.1 billion investment in
improvements including the transformation of Penn Station into a modern, safe and
attractive facility with a new 34th Street entrance.
 (PATH) Port Authority Trans-Hudson Subway System: The PATH carries 70% of all
passengers entering New York City from New Jersey. Approximately 242,000 commuters
use the PATH each weekday. The annual passenger trips for 2007 were 71.6 million.
BUS SYSTEM
 New York City Transit: Regularly scheduled bus service in New York City’s five boroughs
handles 2.4 million riders daily and 738 million annually. 208 local and 36 express bus
routes operate in the five boroughs, covering 2,109 miles.
 Port Authority Bus Terminal: Regional bus lines serve approximately 57 million
passengers a year, with most service to and from New Jersey.
AIRPORTS
 Newark Airport: The Port Authority of New York and New Jersey has operated Newark
Liberty International Airport (EWR) under a lease with the City of Newark since March 22,
1948. EWR is located in Essex and Union Counties between the New Jersey Turnpike
(accessible from Exits 13A and 14), U.S. Routes 1 & 9, and I-78. The airport is about 16
miles from Midtown Manhattan. EWR consists of about 2,027 acres.
 LaGuardia Airport (LGA) has been operated by The Port Authority of New York and New
Jersey under a lease with the City of New York since June 1, 1947. LGA consists of 680
acres and 72 aircraft gates. By the end of 2000, the combined Port Authority and airline
investment for LaGuardia's Redevelopment Program was $830 million. The redevelopment
program includes expanding and modernizing the Central Terminal Building, reconfiguring
and widening roadways, improving runways and taxiways, a passenger terminal in the east
end, airline modernization of gate areas and passenger service areas, and other
rehabilitation projects.
 John F. Kennedy Airport (JFK) is operated by The Port Authority of New York and New
Jersey under a lease with the City of New York since June 1, 1947. JFK is located in the
southeastern section of Queens County, New York City, on Jamaica Bay. It is 15 miles by
highway from midtown Manhattan. JFK consists of 4,930 acres, including 880 acres in the
Central Terminal Area (CTA). The airport has more than 30 miles of roadway.
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MANHATTAN PROPERTY SALES REPORT – 1H 20181
The downturn in New York City’s investment sales market began to level off and show signs of
recouping demand during the first half of 2018. Transactional velocity is on pace to reach 3,626
properties sold this year, a 2.3% decline from 2017, while dollar volume is projected to hit $45.0
billion, a 23.4% increase over last year’s total. The healthy spike in dollar volume has been
spurred on by demand for institutional product. Both trophy office assets and large multifamily
properties, such as the sale of Brooklyn’s Starrett City portfolio for $905 million and
Manhattan’s The Vogue apartment building for $315 million, have fueled the market. Despite
the returning appetite for big-ticket transactions, property values corrected downwards in the first
half, down 2.3% from year-end 2017 to $532 per square foot. Citywide average cap rates rose to
4.60% from a year-end 2017 average of 4.56%, the second consecutive increase over the
previous year.
PROPERTY SALES VOLUME AND TURNOVER
In the first half of 2018, the Manhattan property sales market (south of 96th Street east of Central
Park and south of 110th Street west of Central Park) recorded 316 property sales, a 2.5%
decrease from the first half of 2017. Excluding 1-4 family properties, mixed- use properties
accounted for the most sales with 54 properties sold in the first half, followed by development
with 38 sites sold. The turnover rate for Manhattan is 2.29% for commercial properties—the
lowest level since 2010.
DOLLAR VOLUME
The aggregate sales consideration in the first half of 2018 was $14.3 billion, a 42.4% increase
from the first half of 2017. Office properties led the way in the first half of 2018 with $6.95
billion in dollar volume, followed by elevator apartment buildings with $1.94 billion in
aggregate sales. The average price per property in Manhattan was $45.4 million in the first half,
up 34.0% from year-end 2017.
1
Source: Cushman & Wakefield
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MANHATTAN RETAIL MARKET ANALYSIS
The New York City retail market did not experience much change in market conditions in the
second quarter 2018. The vacancy rate went from 4.1% in the previous quarter to 4.0% in the
current quarter. Net absorption was positive 128,312 square feet, and vacant sublease space
increased by 38,535 square feet. Quoted rental rates decreased from first quarter 2018 levels,
ending at $101.35 per square foot per year. One retail building with 96,300 square feet of retail
space was delivered to the market in the quarter, with 2,490,153 square feet still under
construction at the end of the quarter.
NET ABSORPTION
Retail net absorption was moderate in New York City second quarter 2018, with positive
128,312 square feet absorbed in the quarter. In first quarter 2018, net absorption was positive
58,192 square feet, while in fourth quarter 2017, absorption came in at positive 58,914 square
feet. In third quarter 2017, negative (45,390) square feet was absorbed in the market. Tenants
moving into large blocks of space in 2018 include: Morton Williams Supermarket moving into
29,535 square feet of new space at 1 West End Ave; and ESPN moving into 19,000 square feet at
South Street Seaport aka Pier 17. There were no large retail move-outs.
VACANCY
New York City’s retail vacancy rate decreased in the second quarter 2018, ending the quarter at
4.0%. Over the past four quarters, the market has seen an overall increase in the vacancy rate,
with the rate going from 3.6% in the third quarter 2017, to 3.9% at the end of the fourth quarter
2017, 4.1% at the end of the first quarter 2018, to 4.0% in the current quarter. The amount of
vacant sublease space in the New York City market has trended up over the past four quarters. At
the end of the third quarter 2017, there were 82,912 square feet of vacant sublease space.
Currently, there are 120,955 square feet vacant in the market.
LARGEST LEASE SIGNINGS
The largest lease signings occurring in 2018 included: 75,000-square-foot lease signed by Glass
Houses at 660 12th Avenue, the 45,000-square-foot-lease signed by Alamo Drafthouse Cinema
at 28 Liberty St; and the 43,000-square-foot-deal signed by Forever 21 at 435 Seventh Avenue.
RENTAL RATES
Average quoted asking rental rates in the New York City retail market are down over previous
quarter levels, and up from their levels four quarters ago. Quoted rents ended the second quarter
2018 at $101.35 per square foot per year. That compares to $102.52 per square foot in the first
quarter 2018, and $98.86 per square foot at the end of the third quarter 2017. This represents a
1.1% decrease in rental rates in the current quarter, and a 2.46% increase from four quarters ago.
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INVENTORY & CONSTRUCTION

During the second quarter 2018, one building totaling 96,300 square feet was completed in the
New York City retail market. Over the past four quarters, a total of 507,629 square feet of retail
space has been built in New York City. In addition to the current quarter, three buildings with
137,025 square feet were completed in first quarter 2018, one building totaling 249,394 square
feet completed in fourth quarter 2017, and 23,910 square feet in three buildings completed in
third quarter 2017. There were 2,490,153 square feet of retail space under construction at the end
of the second quarter 2018.
Some of the notable 2018 deliveries include: 432 Park Ave S, a 109,625-square-foot facility that
delivered in first quarter 2018 and is now 100% occupied, and 1 West End Ave, a 96,300-square-
foot building that delivered in second quarter 2018 and is now 100% occupied.
GENERAL RETAIL PROPERTIES
The General Retail sector of the market, which includes all freestanding retail buildings, except
those contained within a center, reported a vacancy rate of 4.1% at the end of second quarter
2018. There was a total of 2,131,251 square feet vacant at that time. The General Retail sector in
New York City currently has average rental rates of $101.35 per square foot per year. There are
2,490,153 square feet of space under construction in this sector, with 234,325 square feet having
been completed in the first quarter. In all, there are a total of 4,457 buildings with 52,334,727
square feet of General Retail space in New York City.
SALES ACTIVITY
Tallying retail building sales of 15,000 square feet or larger, New York City retail sales figures
rose during the first quarter 2018 in terms of dollar volume compared to fourth quarter 2017. In
the first quarter, three retail transactions closed with a total volume of $40,850,000. The three
buildings totaled 67,93 square feet and the average price per square foot equated to $601.33 per
square foot. That compares to two transactions totaling $22,000,000 in the fourth quarter 2017.
The total square footage in the fourth quarter was 41,573 square feet for an average price per
square foot of $529.19.
Total retail center sales activity in 2018 was down compared to 2017. In the first three months of
2018, the market saw three retail sales transactions with a total volume of $40,850,000. The price
per square foot averaged $601.33. In the same first three months of 2017, the market posted two
transactions with a total volume of $60,500,000. The price per square foot averaged $1,996.44.
Cap rates have been higher in 2018, averaging 3.75% compared to the same period in 2017 when
they averaged 2.34%.
One of the largest transactions that has occurred within the last four quarters in the New York
City market is the sale of 169 Chrystie Street in New York. This 9,475 square foot retail center
sold for $175,000,000, or $18,470 per square foot on 12/8/2017.
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SUBMARKET ANALYSIS
The REBNY (Real Estate Board of New York) Spring 2018 Retail Report, the most recent report
published, summarizes the state of the market as follows:
Asking rents in the Manhattan retail leasing market are continuing to adjust, in addition to
landlord concessions which affect net effective rents. While declines have continued across
Manhattan’s top retail corridors into spring 2018, the Manhattan Retail Report Advisory Group
stated that there have been developments in the market that offer reasons for optimism.
Owners’ flexibility on lease terms have become more consistent since the fall and retailers, who
paused their search for brick-and-mortar space through transitioning market conditions, have
returned to explore new opportunities. Transactions and offer volume have increased, and there
have also been reports of competitive bidding for spaces priced appropriately in key retail
locations.
A major theme in the transition of the Manhattan retail landscape, has been the shift from retail
brands occupying numerous locations around the city to fewer, but more impactful locations.
Retailers of food, apparel, and service providers, are all attempting to market their product
though the enhanced use of technology. Retailers have employed the use of artificial
intelligence, robotics, and data mining to provide a personalized shopping experience that
provides brand empathy and is also social media friendly. Their physical retail spaces are
designed as an extension of these marketing efforts to create a sense of “belonging” and
shareable moments for the customer.
These innovative retailers are finding formulas to make stores work in the new urban retail
paradigm. During previous market cycles, retailers were drawn to major Manhattan shopping
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corridors and reliable foot traffic. The appeal of these streets remains while tenant interest has
partially shifted to locations slightly off the main shopping corridors, as creative retailers seek
nearby locations whose cachet is on the rise. Through personal branding, creative promotion, and
an inventive use of space, quality retailers create their own foot traffic.
This process can transform retail corridors and shift retail boundaries. Over the past few years in
the Meatpacking District, brands shifted their sights to Washington Street, which they viewed as
more fashionable than West 14th Street. Washington Street now commands the highest ground
floor retail rents in the district. A similar situation is currently playing out in SoHo where
Lafayette Street and its neighboring side streets are competing with the established Broadway
corridor.
Rent and repositioning are not the only current concerns for Manhattan retailers. Establishments
are also dealing with heightened challenges from legislation, most notably mandated labor cost
increases. The $15 per hour minimum wage law will fully vest at the end of 2018, which poses
an additional cost uncertainty for retailers, especially labor-intensive restaurants. This law, as
well as the expensive cost of restaurant build outs, has the potential to impede retail leases with
food tenants. These deals have thrived during the retail adjustment period and are very important
to neighborhood development.
EXECUTIVE SUMMARY
The Manhattan retail market’s orderly correction continued this spring with per square foot (psf)
ground floor retail average asking rents declining year-over-year in 9 of the 17 high-profile
corridors that REBNY surveys bi-annually.
The few corridors with year-over-year increases were: Midtown South’s Flatiron Broadway
corridor, between 14th and 23rd Streets, where the ground floor retail average asking rent rose
three percent to $360 psf year-over-year; the West Side’s Broadway corridor, between West
72nd and West 86th Streets, where the average asking rent increased three percent year-over-
year to $325 psf; and Lower Manhattan’s Broadway corridor, between Battery Park and
Chambers Street, where the average asking rent increased two percent year-over-year to $368 psf
in spring 2018.
Midtown’s Upper Fifth Avenue, between 49th and 59th Streets, also registered a higher average
asking rent this spring compared to last spring. The spring 2018 average of $3,900 psf was 17
percent greater than last spring. Very limited ground floor retail availability along this corridor
made market conditions more difficult to discern.
Similarly, we were unable to determine if the $975 psf average asking rent this spring on
Midtown’s East 57th Street, between Fifth Avenue and Park Avenue, was an increase or
decrease from last spring due to insufficient availabilities for that period.
SoHo’s Broadway corridor, between Houston Street and Broome Street, saw the biggest average
asking rent drop this spring compared to last year; a 27 percent decline to $595 psf. The
Manhattan Retail Report Advisory Group noted that the corridor is undergoing a major transition
in rents due to nearby competition and a changing perception of the corridor by major brands.
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Average asking rents on the East Side’s Third Avenue, between East 60th and East 72nd Streets,
fell 26 percent to $264 this spring compared to last spring. After reaching a record high average
asking rent of $371 psf in spring 2016, the corridor then began to experience high availability
and low demand. Retail property owners have adjusted rents accordingly and there has been
more deal-making and renewed retailer interest in the corridor.
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CUSHMAN & WAKEFIELD’S Q2 2018 MARKET REPORT
ECONOMY
The New York City economy continued to grow at a healthy pace in the second quarter. As of
May, total employment stood at a record 4,496,400 jobs, up 13,200 from March and 80,000 from
one year ago. Steady New York City tourism, a critical driver of retail activity, continued to
grow as a record 61.8 million tourists visited the city in 2017, a 2.5% increase over 2016 and
another 2.9% increase in tourism is forecasted for this year. More international visitors flocked to
the Big Apple in 2017, a 13.6% jump to 13.1 million, up from 12.6 million in 2016. This record
tourism, combined with rising employment and increased year-over-year income, should boost
shopping activity and alleviate store closures. According to Moody’s Analytics, Manhattan retail
sales increased by 2.9% in 2017, up from a 1.9% gain recorded in 2016. Retail sales are
projected to grow by 3.4% in 2018.
MARKET OVERVIEW
Luxury brand corridors, such as Madison Avenue and Upper Fifth Avenue, are recording limited
retail leasing activity. The lavish shopping corridor of Upper Fifth Avenue, 49th-60th Streets,
has an equal number of stores offering retail space for lease on both a direct and a sublease basis.
And with asking rents down 10.9% here, it is indicative of landlords eager to fill the potentially
vacant and available boutique storefronts on this world-known avenue.
At midyear, almost all retail statistical submarkets, including the high markets of Fifth Avenue,
SoHo, Third Avenue, Meatpacking, Madison Avenue, Upper West Side, Flatiron, Herald
Square/West 34th Street, and Lower Manhattan registered reduced asking rents due to stores
continually coming to market at lower asking rents. In Midtown South, the coveted SoHo
submarket continued its asking rent descent, closing the second quarter at $418 per square foot
(psf), a significant 12.6% decrease from the same time period last year and its sixth consecutive
quarter posting a decline. The top-tier market, Upper Fifth Avenue (49th Street-60th Streets),
continued to command the highest asking retail rent locally for direct and sublease space, closing
the first quarter at $2,775 psf. The Times Square Bowtie (Broadway and Seventh Avenue, West
42nd–West 47th Streets) posted the only year-over-year average asking rent increase—rising
0.8% from $1,977 psf to $1,993 psf, although rents remain down 8.2% from five years ago. The
Lower Manhattan asking retail rent closed the second quarter with the highest five-year growth
rate of 55.8% at $391 psf.
Availability rates continued to increase in almost all retail high markets during the second
quarter. The Herald Square/West 34th Street corridor (Fifth Avenue to Seventh Avenue)
recorded the highest availability rate at 32.8%, due mainly to three stores coming to market;
American Eagle at 40 West 34th Street and the large Gap and Forever 21 stores at Herald
Towers, off of Broadway. On Fifth Avenue (42nd-49th Streets), the availability rate decreased
from the first quarter when sports brand Puma signed a long-term 24,000-square-foot (-sf) retail
lease at 609 Fifth Avenue and when discount retailer Five Below committed to 11,437 sf at 530
Fifth Avenue. Flatiron/Union Square West also posted a reduction in its availability rate due to
healthy leasing in the Broadway corridor. Meanwhile the Upper West Side registered the lowest
availability rate at 12.2%.
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OUTLOOK
Although overall deal velocity has slowed year-over-year, including quick service restaurants,
eateries have taken advantage of landlord concessions during this opportune time. The long-term
outlook for the Manhattan retail market continues to be cautiously optimistic however, with
healthy consumer spending and bustling city streets driven by steady income growth as New
York City continues to dominate in commerce, culture, and tourism.
The Subject’s Competitive Position
Per the REBNY report, the Financial District is one of the brighter spots in the retail market, as
the average asking rent decreased 2% from Fall 2017 but increased 2% since Spring 2017. The
average asking rent is $368 psf.
The subject benefits from good visibility and curb appeal. While individual build-out is the
responsibility of the tenant, the subject has good functional utility, with high ceilings and access
to below grade space for storage.
In conclusion, the subject property is well located in a good commercial area of Manhattan.
Therefore, we conclude that the subject should be able to achieve high retail sales and related
rentals rates and occupancy levels for the foreseeable future.
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NEIGHBORHOOD DESCRIPTION
NEIGHBORHOOD MAP
The subject property is located in the Financial District area of the Borough of Manhattan, City and
State of New York. The Downtown area can be subdivided into the following districts: City Hall,
World Trade, Financial West, Financial East, and Insurance. The geographical boundary for each
district is described below:
 City Hall: The City Hall District is bounded by the Brooklyn Bridge, Park Row and Vesey
Street to the south, Canal Street to the north, and the Hudson and East Rivers.
 Insurance District: The Insurance district is bounded by Liberty Street and Maiden Lane
to the south, Broadway to the west, Park Row and the Brooklyn Bridge to the north.
 World Trade: The World Trade district is bounded by Albany Street to the south, the
Hudson River to the west, Chambers Street to the north, and Broadway to the east.
 Financial East: The Financial East district is bounded by Battery Park to the south,
Broadway to the west, Liberty Street to the north, and the East River to the east.
 Financial West: The Financial West district is bounded by Battery Park to the south, the
Hudson River to the west, Liberty Street to the north, and Broadway to the east.
The Financial District is within Manhattan's Community District 1. This district includes TriBeCa,
the Financial District, the City Hall area, and Battery Park City. The residential population of
District 1 is small but has grown significantly over the past 20 years. Between 1970 and 1980,
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the population of Community District 1 more than doubled, increasing by 134%. Over the next
10-year period between 1980 and 1990, the population increased by an additional 59%. Between
1990 and 2000 the population increased 36%, and between 2000 and 2010 the population
increased 77%.
District 1 contains 1.5 square miles. The majority of land within Community District 1 is used
for institutions followed by commercial purposes. Approximately 28% of the land area in
District 1 is utilized for institutional uses, with 22.9% allocated for commercial and office uses.
Multi-family residential uses comprise only 5.5% of the total land use, and mixed
residential/commercial uses comprise an additional 9.3%. Recreation accounts for only 3.7%.
Four public schools are located in Community District 1. Houses of worship can be found
throughout the area. District 1 offers several parks and recreation areas including the newly
developed park and greenway along the Hudson River, Memorial Park (home of the September
11th memorial), Battery Park as well as Ellis Island and the Statue of Liberty. There is one
public library located on Murray Street. District 1 is served by two police precincts, five fire
department houses, and a marine company. One senior citizen center serves the elderly
population of this area at City Hall Center. The major medical facility in the district is New
York Downtown Hospital at 170 William Street.
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Transportation
Lower Manhattan has one of the greatest concentrations of mass transit links in the world. The
area is served by 15 subway lines, over 30 local and express bus routes, 20 ferry routes, and the
recently reopened PATH transit system. Nearly a half-million individuals travel to Lower
Manhattan daily from New York City’s five boroughs as well as from New Jersey, Westchester,
Connecticut and Long Island. Lower Manhattan’s subway network alone boasts the highest
percentage of transit ridership in the nation.
The Brooklyn-Battery tunnel and the Brooklyn and Manhattan bridges connect Lower Manhattan
with Brooklyn, Queens and Long Island, while the Holland Tunnel, directly north of the district,
connects Lower Manhattan to New Jersey. Two major highways serve the area: FDR Drive on
the east side of the district and Route 9A/West Side Highway on the west side.
Significant enhancements to Lower Manhattan’s transportation network are underway. A

Downtown Alliance survey of Lower Manhattan’s largest companies conducted in 2003 made it
clear that transportation is the primary concern of large companies. While a number of
worthwhile projects are competing for the $4.5 billion in federal funds available, executives from
these companies outlined three key priorities: building of the new PATH station; Fulton Street
Transit Center, connecting 14 subway lines to the new PATH station; and direct rail connection
from Long Island and JFK Airport to Lower Manhattan.
The Fulton Street Reconstruction which began in 2009 is now complete. Encased in a glass and
steel shell, the bright and modern facility dramatically improves the commuter experience and
accommodates up to 300,000 daily riders using the 2, 3, 4, 5, A, C, J, Z, and R subway lines.
Construction of the Fulton Center includes restoration of the 125-year-old Corbin Building,
which will provide additional public access to the facility. The Fulton Center houses nearly
66,000-square-feet of revenue generating retail and commercial space and the MTA’s largest
digital media program, both of which are being managed and operated by Westfield Corp., an
international developer and operator of iconic retail properties and a leader in digital sales and
sponsorship. In addition, the modernized South Ferry Subway Station opened in March 2009.
Education
Numerous colleges and universities have a presence in Lower Manhattan, including Pace
University, New York University’s School of Continuing and Professional Studies, St. John’s
University, and the Borough of Manhattan Community College. Additionally, the district is
home to more than a dozen trade and technical schools. Pace University, the New School
University, and NYU offer housing for their students in Lower Manhattan. The universities also
provide professional educational classes serving the growing residential population and the
workers in Lower Manhattan as well as numerous working professionals from the surrounding
area who wish to further their education.
The district is home to New York City’s best elementary, middle and high schools, including
P.S. 234, I.S. 89, and Stuyvesant High School. Over 7,900 students attend Lower Manhattan
schools. In 2003, a long sought-after high school opened at 75 Broad Street, Millennium High
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School, in the fall of 2005, a new private elementary school opened at 41 Broad Street, and in
2011, a new elementary school opened in the new Frank Gehry designed Beekman Tower.
Parks and Open Spaces
Lower Manhattan is surrounded by water on three sides and has over 100 parks, open spaces, and
indoor plazas covering 88 acres. Some spaces are public parks maintained by the New York City
Parks Department and the Alliance for Downtown New York while others are officially
designated a Privately Owned Public Space or POPS. POPS are privately owned and maintained,
but open to the public. Few business districts provide the opportunity for employees to take a
break from their workday and enjoy a walk or run along a beautiful waterfront esplanade or
enjoy music as the sun sets over the Hudson. In a recent survey, businesses identified this access
to parks and the waterfront as a key reason for being Downtown.
Rebuilding and Memorial at Trade Center Site
One World Trade center was designed by architect David Childs of Skidmore, Owings &
Merrill. Under development by the Port Authority of New York and New Jersey since spring
2006, the $3.9 billion Freedom Tower is being built to some of the world’s most rigorous
construction standards in terms of both safety and “green” features. Its design directly addresses
New York Police Department security standards, including a 200-foot-square base (the same size
as the original twin towers’ footprints) that creates a larger public plaza along its perimeter and
more room for at-grade security. The 3 million square foot, 104-story property has tenants
including Condé Nast, Beijing Vantone China Center and the U.S. General Services
Administration. 3.8 million visitors are expected annually.
The National September 11 Memorial & Museum at the World Trade Center, a 110,000-square-
foot museum officially opened to the public in May 2014. The museum plans to allow 5,000 to
8,000 visitors per day.
LOWER MANHATTAN OVERVIEW
The following information was compiled from reports prepared by the Alliance for Downtown
New York (2Q2018), the most recent report published.
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The Specific Subject Location
The subject is located on the northwest corner of Fulton Street and William Street, through to
Ann Street within the Financial District, in the Borough of Manhattan, City and State of New
York. The immediate area surrounding the property is improved with Class A and B office
buildings and former office buildings, many of which have been converted to luxury residential
rental and condominium apartment buildings.
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Access to public transportation from the subject's location is excellent. The subject is within
three blocks of the 2, 3, 4, 5, A, C, N, R, J, and Z trains. These subway lines provide direct
access to Brooklyn, Queens and the East and West Sides of Manhattan. By car, access to the
subject property is from the Brooklyn Bridge and Park Row.
In addition, bus service is available along primary thoroughfares such as Church Street,
Broadway and Water Street. Highway access is via West Street which has access to the Upper
West Side of Manhattan. Traveling south, West Street connects with the South Street Viaduct
which becomes the FDR Drive. Both of these roadways connect with all of the major roadways
throughout Manhattan and bridges heading to the outer boroughs of New York and New Jersey.
Conclusion
Lower Manhattan is the neighborhood with the fastest growing residential population in
Manhattan. Downtown is emerging as a vibrant mixed-use neighborhood, active 24 hours a day,
7 days a week based on the efforts and funds of private and public entities. The neighborhood is
expected to exhibit continuing rehabilitation and property value improvement based on its
popularity. Thus, the subject location should remain a viable mixed use location for the
foreseeable future.
DEMOGRAPHIC OVERVIEW
The following demographic profile, assembled by Environics Analytics, a nationally recognized

compiler of demographic data, reflects the subject’s zip code (10038) and market (New York
City). The area is projected to have a 2018 population of 23,468 in 10,651 household units. The
current projections, as forecasted by Environics Analytics, are as follows:
Universe Totals
10038 New York City
2018 % Change % Change 2018 % Change % Change
Description Estim ate 2010-2018 2018-2023 Estim ate 2010-2018 2018-2023
Universe Totals
Population 23,468 14.51% 5.50% 8,598,697 5.18% 2.54%
Households 10,651 15.75% 5.76% 3,287,344 5.71% 2.74%
Families 4,295 12.38% 4.75% 1,950,879 5.44% 2.65%
Housing Units 11,508 3,564,201
HOUSEHOLD INCOME
The estimated average household income is $142,155, while the median income is $92,285.
Approximately 23.5% of households have an income of less than $25,000, while 31.5% of the
households earn over $150,000 per year.
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Household Income
% of New York % of
Households by Household Incom e 10038 Total City Total
2018 Est. Households by Household Income 10,651 3,287,344
Income < $15,000 1,671 15.7% 478,297 14.5%
Income $15,000 - $24,999 831 7.8% 315,583 9.6%
Income $25,000 - $34,999 549 5.2% 265,437 8.1%
Income $35,000 - $49,999 658 6.2% 360,207 11.0%
Income $50,000 - $74,999 984 9.2% 474,263 14.4%
Income $75,000 - $99,999 912 8.6% 355,824 10.8%
Income $100,000 - $124,999 924 8.7% 272,279 8.3%
Income $125,000 - $149,999 771 7.2% 196,588 6.0%
Income $150,000 - $199,999 1,024 9.6% 218,626 6.7%
Income $200,000 - $249,999 620 5.8% 114,720 3.5%
Income $250,000 - $499,999 863 8.1% 132,844 4.0%
Income $500,000+ 844 7.9% 102,676 3.1%
2018 Est. Average Household Income $142,155 $97,040
2018 Est. Median Household Income $92,285 $60,916
POPULATION CHARACTERISTICS
The neighborhood has an average age of 39 and a median age near 34. 24.62% of the area
population is aged 54 and over, while 11.72% is younger than 18 years old.
Age Characteristics
% of New York % of
2018 Est. Population by Age 10038 Total City Total
Age 0-17 2,752 11.72% 1,840,206 21.40%
Age 18-34 9,451 40.27% 2,215,434 25.76%
Age 35-54 5,487 23.38% 2,323,708 27.03%
54 and above 5,778 24.62% 2,219,349 25.81%
2018 Est. Median Age 34 37
2018 Est. Average Age 39 39
In terms of household size, 39.4% of households are single persons, 36.3% have two persons,
and 13.3% have 3 persons. Only 4.0% of households have five or more.
Households by Size
% of New York % of
2018 Est. Households by Household Size 10038 Total City Total
1-person 4,198 39.4% 1,062,346 32.3%
2-person 3,866 36.3% 903,261 27.5%
3-person 1,420 13.3% 527,334 16.0%
4-person 742 7.0% 392,569 11.9%
5-person 248 2.3% 208,620 6.4%
6-person 87 0.8% 101,038 3.1%
7-or-more-person 90 0.8% 92,176 2.8%
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EDUCATIONAL ATTAINMENT
The population is relatively well educated. 16.7% have not earned a high school diploma in
contrast to 37.93% with a bachelor's degree and 24.3% with advanced degrees.
% of New York % of
Educational Attainm ent 10038 Total City Total
2018 Est. Pop Age 25+ by Edu. Attainment 17,480 6,029,154
Less than 9th grade 1,828 10.46% 605,067 10.04%
Some High School, no diploma 1,093 6.25% 551,262 9.14%
High School Graduate (or GED) 1,886 10.79% 1,451,220 24.07%
Some College, no degree 1,455 8.32% 843,312 13.99%
Associate Degree 335 1.92% 379,528 6.29%
Bachelor's Degree 6,631 37.93% 1,303,936 21.63%
Master's Degree 2,789 15.96% 627,689 10.41%
Professional School Degree 1,171 6.70% 179,286 2.97%
Doctorate Degree 292 1.67% 87,854 1.46%
EMPLOYMENT DYNAMICS
According to Environics Analytics, 83.11% of workers are characterized as "white collar," while
4.96% are engaged in "blue collar" activities. 11.93% of the employed population works in the
service and farm sectors. Within these broad categories, the largest employment sectors in the city
are Management (17.6%), Business/Financial Operations (15.1%), and Sales/Related (11.1%).
Occupation Classification
% of New York % of
Occupation Classification 10038 Total City Total
2018 Est. Pop 16+ by Occupation Classification 12,947 3,996,146
White Collar 10,760 83.11% 2,493,041 62.39%
Blue Collar 642 4.96% 582,776 14.58%
Service and Farm 1,545 11.93% 920,329 23.03%
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Occupation Breakdown
% of New York % of
Occupation 10038 Total City Total
2018 Est. Civ. Employed Pop 16+ by Occupation 12,947 100.0% 3,996,146
Architect/Engineer 206 1.59% 36,644 0.92%
Arts/Entertainment/Sports 774 5.98% 189,916 4.75%
Building Grounds Maintenance 217 1.68% 180,799 4.52%
Business/Financial Operations 1,956 15.11% 227,087 5.68%
Community/Social Services 244 1.88% 82,074 2.05%
Computer/Mathematical 731 5.65% 100,844 2.52%
Construction/Extraction 34 0.26% 169,372 4.24%
Education/Training/Library 536 4.14% 255,535 6.39%
Farming/Fishing/Forestry 3 0.02% 3,080 0.08%
Food Prep/Serving 562 4.34% 243,559 6.09%
Health Practitioner/Technician 519 4.01% 205,094 5.13%
Healthcare Support 127 0.98% 187,899 4.70%
Maintenance Repair 113 0.87% 74,658 1.87%
Legal 758 5.85% 80,181 2.01%
Life/Physical/Social Science 164 1.27% 34,585 0.87%
Management 2,282 17.63% 400,738 10.03%
Office/Admin. Support 1,149 8.87% 487,959 12.21%
Production 111 0.86% 103,462 2.59%
Protective Services 168 1.30% 109,603 2.74%
Sales/Related 1,441 11.13% 392,384 9.82%
Personal Care/Service 468 3.61% 195,389 4.89%
Transportation/Moving 384 2.97% 235,284 5.89%
TRANSIT DYNAMICS
There are good links to employment centers via public transport and the local highway network.
Based on its urban location, roughly 3.70% of the employed drove alone to work. Given strong
public transit service, 58.55% traveled by public transportation. The average travel time is roughly
29 minutes. Within this, roughly 21.1% of workers travel less than 15 minutes, while 60% live
within 30 minutes of their jobs. The remaining workers travel in excess of a half hour. 6.8% work
an hour or more away from home.
Transportation to Work
% of New York % of
Transportation To Work 10038 Total City Total
2018 Est. Workers Age 16+ by Transp. to Work 12,736 3,904,839
Drove Alone 471 3.70% 845,227 21.65%
Car Pooled 71 0.56% 174,304 4.46%
Public Transportation 7,457 58.55% 2,233,495 57.20%
Walked 3,746 29.41% 391,463 10.03%
Bicycle 306 2.40% 44,881 1.15%
Other Means 154 1.21% 60,940 1.56%
Worked at Home 531 4.17% 154,529 3.96%
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Travel Time to Work

% of New York % of
Travel Tim e to Work 10038 Total City Total
2018 Est. Workers Age 16+ by Travel Time to Work 12,147 3,750,601
Less than 15 Minutes 2,566 21.1% 351,175 9.4%
15 - 29 Minutes 4,745 39.1% 795,040 21.2%
30 - 44 Minutes 3,176 26.1% 1,029,785 27.5%
45 - 59 Minutes 834 6.9% 607,485 16.2%
60 or more Minutes 826 6.8% 967,116 25.8%
2018 Est. Avg Travel Time to Work in Minutes 29 45
HOUSING DYNAMICS
Housing units are mostly renter occupied (74.21%), with 25.79% owner occupied. Reflecting
this dynamic, the distribution of housing units is skewed towards multi-unit residential housing
which makes up 96.7% of the total.
Tenure of Occupied Housing Units

% of New York % of
Occupied Housing Units By Tenure 10038 Total City Total
2018 Est. Occupied Housing Units by Tenure 10,651 3,287,344
Ow ner Occupied 2,747 25.79% 1,008,270 30.67%
Renter Occupied 7,904 74.21% 2,279,074 69.33%
Housing by Units in Structure

% of New York % of
Houring Units by Units in Structure 10038 Total City Total
2018 Est. Housing Units by Units in Structure 11,508 3,561,622
1 Unit Attached 54 0.47% 243,456 6.84%
1 Unit Detached 85 0.74% 321,933 9.04%
2 Units 36 0.31% 473,623 13.30%
3 or 4 Units 189 1.64% 365,794 10.27%
5 to 19 Units 875 7.60% 461,548 12.96%
20 to 49 Units 1,131 9.83% 563,818 15.83%
50 or More Units 9,125 79.29% 1,126,405 31.63%
Mobile Home or Trailer 13 0.11% 5,045 0.14%
Boat, RV, Van, etc. 0 0.00% 2,579 0.07%
New development in the neighborhood represents 10.75% of the total stock added in this period.
Given the overwhelming presence of older housing stock, the median year built is 1968.
Housing by Year Structure Built

% of New York % of
Housing Units by Year Structure Built 10038 Total City Total
2018 Est. Housing Units by Year Structure Built 11,508 3,564,201
Housing Units Built 2014 or Later 1,237 10.75% 179,905 5.05%
Housing Units Built 2010 to 2013 218 1.89% 29,810 0.84%
Housing Units Built 2000 to 2009 1,506 13.09% 224,476 6.30%
Housing Unit Built 1939 or Earlier 3,009 26.15% 1,358,504 38.12%
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The median owner-occupied home value is $651,317, with 28% of homes valued at $1,000,000
or more.
Owner Occupied Housing Values

% of New York % of
Ow ner-Occupied Housing Units by Value 10038 Total City Total
2018 Est. Ow ner-Occupied Housing Units by Value 2,747 1,008,270
Value Less than $20,000 112 4.08% 15,836 1.57%
Value $20,000 - $39,999 142 5.17% 11,744 1.16%
Value $40,000 - $59,999 89 3.24% 7,933 0.79%
Value $60,000 - $79,999 0 0.00% 5,806 0.58%
Value $80,000 - $99,999 0 0.00% 6,157 0.61%
Value $100,000 - $149,999 27 0.98% 22,135 2.20%
Value $150,000 - $199,999 10 0.36% 28,598 2.84%
Value $200,000 - $299,999 73 2.66% 74,944 7.43%
Value $300,000 - $399,999 374 13.61% 122,074 12.11%
Value $400,000 - $499,999 154 5.61% 147,571 14.64%
Value $500,000 - $749,999 644 23.44% 264,086 26.19%
Value $750,000 - $999,999 350 12.74% 134,937 13.38%
Value $1,000,000 - $1,499,999 330 12.01% 76,850 7.62%
Value $1,500,000 - $1,999,999 87 3.17% 28,711 2.85%
Value $2,000,000 or more 355 12.92% 60,888 6.04%
2018 Est. Median All Ow ner-Occupied Housing Value $651,317 $547,689
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ZONING SUMMARY
ZONING MAP
The subject property is zoned "C6-4" Commercial. C6 districts permit a wide range of high-bulk
commercial uses requiring a central -location. Most C6 districts are in Manhattan, Downtown
Brooklyn and Downtown Jamaica; a C6-3D district is mapped in the Civic Center area of the
Bronx. Corporate headquarters, large hotels, department stores and entertainment facilities in
high-rise mixed buildings are permitted in C6 districts.
C6-1, C6-2 and most C6-3 districts, typically mapped in areas outside central business cores,
such as the Lower East Side and Chelsea, have a commercial floor area ratio (FAR) of 6.0; the
C6-3D district has an FAR of 9.0. C6-4 through C6-9 districts, typically mapped within the city’s
major business districts, have a maximum FAR of 10.0 or 15.0, exclusive of any applicable
bonus. Floor area may be increased by a bonus for a public plaza or Inclusionary Housing.
C6-2A, C6-3A, C6-3X and C6-4A are contextual districts with maximum building heights. C6-
3D and C6-4X districts allow towers above a building base; special rules determine the tower’s
height and articulation. All other C6 districts allow towers to penetrate a sky exposure plane and
do not require a contextual base.
C6 districts are widely mapped within special districts. C6-4.5, C6-5.5, C6-6.5 and C6-7T
districts are mapped only within the Special Midtown District and have unique floor area ratios
and bonus rules. C6-1G, C6-2G, C6-2M and C6-4M districts are mapped in Chinatown and
Chelsea and in the Special Garment Center District, and have rules for the conversion of non-
residential space to residential use.
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C6 districts are well served by mass transit, and off-street parking is generally not required,
except within the C6-3D district.
Special Lower Manhattan District
The subject property is located within the Special Lower Manhattan (LM) district, as amended
November 15, 2007. The "Special Lower Manhattan District" is designed to promote and protect
public health, safety, general welfare and amenity. These general goals include, among others,
the following specific purposes:
 (a) encourage development of a 24-hour community through the conversion of older

commercial buildings to residential use;
 (b) facilitate maximum design flexibility of buildings and enhance the distinctive skyline and
streetscape of Lower Manhattan;
 c) improve public use and enjoyment of the East River waterfront by creating a better
physical and visual relationship between development along the East River and the
waterfront area, public access areas and the adjoining upland community;
 (d) enhance the pedestrian environment by relieving sidewalk congestion and providing
pedestrian amenities;
 (e) restore, preserve and assure the use of the South Street Seaport Subdistrict as an area
of small historic and restored buildings, open to the waterfront and having a high proportion
of public spaces and amenities, including a South Street Seaport Environmental Museum,
with associated cultural, recreational and retail activities;
 (f) establish the Historic and Commercial Core to protect the existing character of this
landmarked area by promoting development that is harmonious with the existing scale and
street configuration; and
 (g) promote the most desirable use of land and thus conserve and enhance the value of
land and buildings, and thereby protect the City's tax revenues.
Summary of Regulations
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Summary of Use Regulations
The following uses are permitted:
Category Permitted Uses
Use Group 1 Single-family detached residences.
Use Group 2 Residences of all kinds including apartment hotels and non-profit residences for the elderly.
Community facilities which include colleges or universities, libraries, museums, non-commercial art
Use Group 3
galleries, trade schools, nursing homes, and health related facilities.
Use Group 4 Churches, medical offices.
Retail and commercial uses including retail stores and eating and drinking establishments, entertainment
Use Groups 5-13
facilities, repair shops.
Summary of Zoning
The site contains a total land area of 23,246± square feet. The C6-4 zoning district has an
allowable floor area ratio of 10 yielding an allowable "as of right" development (10 x 23,246±
square feet) of 232,460± square feet. According to City records, the larger building of which the
subject is a part of contains a gross building area of 176,599 square foot. The subject is within
the allowable FAR. However, the subject was constructed prior to the existing zoning
regulations. Therefore, the subject represents a legal, pre-existing, conforming structure. In
terms of age, size, condition, and construction, the subject building conforms with surrounding
structures in its immediate neighborhood.
It should be noted that we are not experts in the interpretation of complex zoning ordinances and
we recommend that an attorney or architect be consulted for a definitive interpretation of the
Zoning Resolution.
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ASSESSED VALUE AND REAL ESTATE TAXES
The subject property is designated on the New York County tax maps as Block 91, Lots
1201,1202,1203,1368. The 2018/19 assessed valuation is:
Lot 1201 Actual Transitional

Land $321,950 $321,950
Building + 1,497,916 1,246,871
Total $1,819,866 $1,568,821
Less Exemption -$892,627 -$892,627
Taxable A.V. $927,239 $676,194
Land $794,985 $794,985
Building + 3,698,784 3,078,886
Total $4,493,769 $3,873,871
Less Exemption -$2,204,160 -$2,204,160
Taxable A.V. $2,289,609 $1,669,711
Land $53,727 $53,727
Building + 249,974 208,074
Total $303,701 $261,801
Less Exemption -$148,960 -$148,960
Taxable A.V. $154,741 $112,841
Land $48,088 $48,088
Building + 223,738 186,232
Total $271,826 $234,320
Less Exemption -$178,059 -$178,059
Taxable A.V. $93,767 $56,261
Since 1981/82, increases in assessed value for real properties have been phased in over a five
year period. The actual assessed value represents the future or target assessment when the
transitional or phase-in period is over, and the transitional assessed value, therefore, represents
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the current assessment. Taxes in any year are based upon the lower of the actual or transitional
assessed value.
Tax Rates
The current Class 4 rate is $10.514 per $100 of assessed value.

Real Estate Tax Rates, New York City 2006/07 to 2017/18
Year Class 1 Class 2 Class 3 Class 4
2006/2007 16.118 12.737 12.007 10.997
2007/2008 15.434 11.928 11.577 10.059
2008/2009 16.196 12.596 12.137 10.241
2009/2010 17.088 13.241 12.743 10.426
2010/2011 17.364 13.353 12.631 10.312
2011/2012 18.205 13.433 12.473 10.152
2012/2013 18.569 13.181 12.477 10.288
2013/2014 19.191 13.145 11.902 10.323
2014/2015 19.157 12.855 11.125 10.684
2015/2016 19.554 12.883 10.813 10.656
2016/2017 19.991 12.892 10.934 10.574
2017/2018 20.385 12.719 11.891 10.514
Source: New York City Department of Finance
Given such, we have forecasted taxes in 2018/19, based on the assessment:
Tax Liability Based Final Assessment

Lot Taxable AV Tax Rate Tax Liability GLA Taxes / SF
Lot 1201 $1,568,821 x 10.514% = $164,946 5,711 $28.88
Lot 1202 $3,873,871 x 10.514% = $407,299 14,102 $28.88
Lot 1203 $261,801 x 10.514% = $27,526 953 $28.88
Lot 1368 $234,320 x 10.514% = $24,636 853 $28.88
Total $5,938,813 x 10.514% = $624,407 $28.88
The total tax liability (not subject to 421 (G) benefits) for the property according to our analysis
is $624,407 or $28.88 per square foot.
Tax Comparables
To advance an opinion with regard to the reasonableness of the forecasted tax liability, we have
analyzed that of comparable buildings around our subject:
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Tax Comparables
Address Block / Lot Square Feet Taxes / SF
15 Broad Street 26/1001 12,228 $36.00
15 William Street 25/1721 6,092 $25.39
82 Beaver Street 28/1002 7,092 $26.25
164 Pearl Street 39/1001 8,173 $38.34
125 Maiden Lane 70/1020 5,346 $34.25
Min: $25.39
Max: $38.34
Average: $32.05
The indicated range of the comparable tax liabilities is between $25.39 and $38.34 per square
foot, with an average of $32.05 per square foot. The subject's forecasted total tax liability
unencumbered is within the market range. Thus, it is our view that the property is reasonably
assessed.
421(G) TAX BENEFITS
The 421(g) tax exemption and abatement program applies to conversions of commercial buildings
or portions of buildings to multiple dwellings in most of the area in Manhattan south of Murray
Street/City Hall/the Brooklyn Bridge.
Typically exemption periods are 12-years (8-years full + 4-year phase out) with exemption from
the increase in real estate taxes resulting from the work. Landmark projects get one additional
year of full benefits. The exemption consists of all increases in assessed value attributed to the
physical improvement of property. Equalization increases are taxable. In addition, the first year
taxes after the exemption are fully abated. The amount of the first year abatement applies for a
period of ten years, with 20% phase-outs for four additional years (Years 11-14).
The current status of each tax lot’s 421(g) exemption and abatement are presented on the following
pages.
Note that Lots 1201-1203 are in year 10 of the exemption and abatement. Typically, exemptions
begin to phase out by 20% per year starting in year 9.
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Lot 1201
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Lot 1202
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Lot 1203
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LOT 1368
Our calculation of the value of the 421(g) benefits is presented on the following page. As we have
used a discounted cash flow in our analysis, we have applied the actual tax phase in for each Lot.
Our analysis is based upon the following assumptions:
1) The 421(g) began in 2009/10. Lots 1201-1203 are in year 10 of 12 for the exemption
and year 10 of 14 for the abatement. Note the subject is in year 9 for Lot 1368.
2) The tax projections are based on a 1% increase annually in the tax rate and a 2%
increase annually in the assessment.
3) The property will be fully exempted from increases over the base assessment due to
physical improvements for a period of eight years. This exemption will phase out in
20% increments in Years 9-12.
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4) The abatement is equal to the taxes due in the first 8 years. The tax abatement will
remain flat through year 8 then phase out in 20% increments in Years 11-14. The
property will revert to full taxes in Year 15.
5) The actual tax burden will be applied in our DCF. The NPV of the tax benefit, using
a 5% discount rate, is added to the sales comparison approach. Most tenants reimburse pro rata
portions of taxes. As such, we have applied the net taxes in our cash flow, which internalizes the
value over the holding period and have provided the above calculation for informational
purposes and to add in our Sales Comparison Approach. Though we value this separately, since
the net taxes are applied in the model the value is implicit in the DCF value for the Income
Approach.
The 421G totals $879,999.

421(G) TAX BENEFIT
Lot 1201 EXEMPTION $1,154,590
START DATE: 2009/2010
LENGTH OF TERM: 12 YEARS
ABATEMENT BASE $24,002

Allowable
% of % of
Exemption Net Taxes
Exemption Abatement Abatement
Year Projected A.V. (Increase in Taxable A.V. Tax Rate Full Taxes After Tax Payable Tax Savings
Allowed (Phase Allowed Amount
A.V. Over Exemption
Out) (Phase Out)
Base)
2017/18 9 $1,476,540 80% $923,672 $552,868 0.10514 $155,243 $58,129 100% $24,002 $34,127 $121,117
2018/19 10 $1,568,821 60% $892,627 $676,194 0.10514 $164,946 $71,095 100% $24,002 $47,093 $117,853
2019/20 11 $1,600,197 40% $461,836 $1,138,361 0.10619 $169,927 $120,884 80% $19,202 $101,683 $68,245
2020/21 12 $1,632,201 20% $230,918 $1,401,283 0.10725 $175,059 $150,292 60% $14,401 $135,891 $39,168
2021/22 13 $1,664,845 0% $0 $1,664,845 0.10833 $180,346 $180,346 40% $9,601 $170,745 $9,601
2022/23 14 $1,698,142 0% $0 $1,698,142 0.10941 $185,792 $185,792 20% $4,800 $180,992 $4,800
2022/23 15 $1,732,105 0% $0 $1,732,105 0.11050 $191,403 $191,403 0% $0 $191,403 $0
PROSPECTIVE VALUE OF TOTAL TAX SAVINGS YEAR 10-15 @ 5% RATE $219,635
ROUNDED $200,000
421(G) TAX BENEFIT

Lot 1202 EXEMPTION $2,851,013

Allowable
% of % of
Exemption Net Taxes
A.V. Over Exemption
Out) (Phase Out)
Base)
2017/18 9 $3,645,998 80% $2,280,810 $1,365,188 0.10514 $383,340 $143,536 100% $72,016 $71,520 $311,820
2018/19 10 $3,873,871 60% $2,204,160 $1,669,711 0.10514 $407,299 $175,553 100% $72,016 $103,537 $303,761
2019/20 11 $3,951,348 40% $1,140,405 $2,810,943 0.10619 $419,599 $298,498 80% $57,613 $240,885 $178,714
2020/21 12 $4,030,375 20% $570,203 $3,460,173 0.10725 $432,271 $371,115 60% $43,210 $327,905 $104,366
2021/22 13 $4,110,983 0% $0 $4,110,983 0.10833 $445,326 $445,326 40% $28,806 $416,519 $28,806
2022/23 14 $4,193,203 0% $0 $4,193,203 0.10941 $458,775 $458,775 20% $14,403 $444,371 $14,403
2022/23 15 $4,277,067 0% $0 $4,277,067 0.11050 $472,630 $472,630 0% $0 $472,630 $0
ROUNDED $580,000
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421(G) TAX BENEFIT

Lot 1203 EXEMPTION $192,675

Allowable
% of % of
Exemption Net Taxes
A.V. Over Exemption
Out) (Phase Out)
Base)
2017/18 9 $246,402 80% $154,140 $92,262 0.10514 $25,907 $9,700 100% $4,005 $5,695 $20,211
2018/19 10 $261,801 60% $148,960 $112,841 0.10514 $27,526 $11,864 100% $4,005 $7,859 $19,667
2019/20 11 $267,037 40% $77,070 $189,967 0.10619 $28,357 $20,173 80% $3,204 $16,969 $11,388
2020/21 12 $272,378 20% $38,535 $233,843 0.10725 $29,213 $25,080 60% $2,403 $22,677 $6,536
2021/22 13 $277,825 0% $0 $277,825 0.10833 $30,096 $30,096 40% $1,602 $28,494 $1,602
2022/23 14 $283,382 0% $0 $283,382 0.10941 $31,005 $31,005 20% $801 $30,204 $801
2022/23 15 $289,049 0% $0 $289,049 0.11050 $31,941 $31,941 0% $0 $31,941 $0
ROUNDED $40,000
421(G) TAX BENEFIT

Lot 1368 EXEMPTION $172,450

Allowable
% of % of
Exemption Net Taxes
A.V. Over Exemption
Out) (Phase Out)
Base)
2017/18 8 $220,538 100% $172,450 $48,088 0.10514 $23,187 $5,056 100% $2,828 $2,228 $20,959
2018/19 9 $234,320 80% $178,059 $56,261 0.10514 $24,636 $5,915 100% $2,828 $3,087 $21,549
2019/20 10 $239,006 60% $103,470 $135,536 0.10619 $25,380 $14,393 100% $2,828 $11,565 $13,816
2020/21 11 $243,787 40% $68,980 $174,807 0.10725 $26,147 $18,749 80% $2,262 $16,486 $9,661
2021/22 12 $248,662 20% $34,490 $214,172 0.10833 $26,937 $23,200 60% $1,697 $21,504 $5,433
2022/23 13 $253,636 0% $0 $253,636 0.10941 $27,750 $27,750 40% $1,131 $26,619 $1,131
2022/23 14 $258,708 0% $0 $258,708 0.11050 $28,588 $28,588 20% $566 $28,022 $566
ROUNDED $50,000
Total $879,999
LOWER MANHATTAN BID TAXES
The subject must pay Lower Manhattan BID taxes. The BID taxes are included in our
miscellaneous expense. The taxes for each lot are as follows:
BID Taxes
Lot 1201 $1,712
Lot 1202 $4,226
Lot 1203 $286
Lot 1368 $256
Total $6,480
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PROPERTY DATA
SITE DESCRIPTION
Address: 111 Fulton Street
Legal Identification: Block 91, Lots 1201,1202,1203,1368
Size: 23,246± square feet
Shape: Rectangular.
Frontage: 196± feet along the northeast side of Fulton Street, 118.5
feet on the northwest side of William Street, 196± feet on
the southwest side of Ann Street.
Topography: The site is generally level.
Drainage: Appears adequate
Street Orientation: Fulton Street is a primary one-way roadway traveling in

a westerly direction.
Site Access: All of the retail spaces have good access from the street.
Street Improvements: Streets are paved with asphalt and have concrete curbing.
Streets are drained with catch basins emptying into the
town's storm sewers.
Parking: Parking is extremely limited.
Utilities: Electric, gas, water, and sewer
Sub-Soil Conditions: Unknown; assumed adequate.
Conclusion: The site is well laid-out and supports its current use.
There is street parking, and it is situated appropriately.
Retail frontage, access and visibility are good. Overall,
the site is functionally adequate.
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FLOOD MAP
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SUBJECT PROPERTY PHOTOS
FULTON STREET FRONTAGE
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FULTON STREET FRONTAGE
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PROPERTY DATA
VACANT STOREFRONT
SUBJECT PROPERTY-WILLIAM/ANN STREET FRONTAGE
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PROPERTY DATA
TYPICAL SPACE – RED MANGO
TYPICAL SPACE – HALE AND HEARTY
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PROPERTY DATA
Typical Space – Meltshop
TYPICAL SPACE – SEVEN ELEVEN
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PROPERTY DATA
ENTRANCE- CROSSFIT
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PROPERTY DATA
CROSSFIT SPACE
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PROPERTY DATA
METERS
MECHANICALS
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PROPERTY DATA
FULTON STREET
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PROPERTY DATA
WILLIAM STREET
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PROPERTY DATA
ANN STREET
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PROPERTY DATA
BUILDING DESCRIPTION
The subject consists of four commercial condominiums within a larger mixed use residential and
Bareburger. It should be noted that square footage was provided by the owner.
The following is a brief description of the subject's salient construction features:
Foundation: The building foundation is poured with reinforced concrete columns,

beams and slabs. Foundation walls consist of cast-in-place concrete.
The superstructure is composed of concrete encased structural steel
and masonry.
Exterior walls: Masonry and Glass.
Entrances: The retail tenant spaces have their own separate entrances consisting
of full length swing out glass doors.
Commercial Spaces: All improvements are the tenant's responsibility.
Pedestrian Doors: Manual tempered-glass doors in steel frames.
Windows: Tempered-glass in aluminum frames.
Heating/Cooling: Heat is provided by building systems (Con Ed steam).
Plumbing: Copper with cast iron waste plumbing.
Electricity: Standard commercial electric service metered individually.
Fire Protection: Spaces are fully sprinklered and alarmed in compliance (assumed) with
local regulations.
Condition: As recent renovation, the improvements are in good condition.
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PROPERTY DATA
RETAIL FINISHES: Retail space finishes vary and include tiled and/or carpeted flooring,
painted sheetrock walls (marble coverings in the bank space) and
exposed, sheetrocked or acoustic ceilings with recessed, attached and
suspended fluorescent lighting. Ceilings are generally 10-12’.
BASEMENT: The basement of the property contains building mechanicals and

storage. A portion of the basement is occupied by CrossFit.
LAVATORIES: Most stores feature one men’s and one women’s restroom.
LAYOUT
Address Floor Size (Sq Feet) Uses
111 Fulton Street Below Grade 4,630 Retail/Storage
111 Fulton Street Grade 16,479 Retail
Total 21,109
Functional Utility
From a utility standpoint, the subject is well laid out and adequately accommodates its present
utilization. The subject benefits from its desirable location in an active residential and
commercial area. The subject property is able to accommodate its existing retail related tenants
Flood Hazards
According to FEMA, the subject property is located within Zone "X", which is a not flood zone
(Panel #360497-0184F / 9/05/07).
Management
The subject is managed by the owner.
Conclusion
The subject components were recently renovated, and conform to modern design standards. The
leased retail space improvements are the responsibility of the lessee. The site is well-situated along
a primary commercial corridor within the Financial District, a growing mixed use neighborhood in
Manhattan. The project was well-planned, and the existing configuration is suitable to meet market
demand.
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PROPERTY DATA
Summary
The information contained in the Property Data Section was obtained from the following
sources:
1. Formal field inspection, September 28, 2018.
2. The subject property owner's.
3. Local planning, zoning, and assessment records.
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The following definition of Highest and Best Use is set forth in The Dictionary of Real Estate
Appraisal 6th edition sponsored by the Appraisal Institute. Highest and Best Use is:
1. The reasonably probable use of property that results in the highest value. The four criteria
that the highest and best use must meet are legal permissibility, physical possibility, financial
feasibility, and maximum productivity.
2. The use of an asset that maximizes its potential and that is possible, legally permissible, and
financially feasible. The highest and best use may be for continuation of an asset’s existing use
or for some alternative use. This is determined by the use that a market participant would have
in mind for the asset when formulating the price that it would be willing to bid.
3. The highest and most profitable use for which the property is adaptable and needed or likely
to be needed in the reasonably near future.
In determining highest and best use, we have considered the following:
The current trends of supply and demand on the market.
Current zoning regulations and other possible restrictions.
Neighboring land uses.
It is to be recognized that in cases where a site has existing improvements on it, the highest and
best use may very well be determined to be different from the existing use. The existing use will
continue, however, unless and until land value in its highest and best use exceeds the total value
of the property in its existing use.
In estimating highest and best use, alternative uses are considered and tested for the subject site.
Possible Use - An analysis to determine those uses of the subject which can be deemed
physically possible;
Permissible Use - An investigation into existing zoning regulations, lease terms, and deed
restrictions on the site to determine which uses are legally permitted;
Feasibility - An analysis to determine which of those uses deemed possible and legal can
provide a net return to the owner of the site;
Highest and Best Use - Among the feasible uses, which use will provide the highest net return
or highest present worth.
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As Vacant
Legally permissible The subject property is situated within a C6-4. The principal
legal uses for new construction are commercial and
residential. The mixed-use nature of the area, combined
with the generally good condition of the area's improvements
and the current and expected trends in supply and demand,
all support the current zoning. It is our opinion that the site,
if vacant, could be developed for the legally permitted uses
noted above.
Physically possible The site is mid-sized, generally level and regularly shaped.
There is good street access and exposure, good street
improvements, all necessary utilities available. Further there
are no apparent easements or encroachments that would
hinder development. Drainage for the site appears to be
adequate.
Though we have not been supplied with a physical analysis

of the site, the presence of improvements on neighboring
sites leads us to conclude mixed-use commercial and
residential development is physically possible.
Financially feasible When considering whether a certain use is financially

feasible, the most important criteria is whether the return on
such use would support the cost required to build. In
addition, risks and related rates of return are applied to arrive
at the total development cost. This indication is then
compared to the forecasted value of such an improvement. If
the value is higher than the cost, the use is feasible.
Given the central location of the site, any one of the above
permissible uses would generate the maximum market rent
obtained in the area. After considering the risk and correlated
returns required to stabilize each the respective uses, the
value of development exceeds the development cost.
Therefore, mixed use (residential with ground floor retail) is
financially feasible.
Maximally productive/ All legally permissible, physically possible, and financially

highest and best use feasible uses of the subject property, as vacant, have been
presented and examined. Based on our analysis of the
zoning, physical and economic conditions surrounding the
site, it is our view that the Highest and Best use of the parcel
as for residential development with ground floor retail.
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As Improved
Legally permissible The subject property is a legal use in the C6-4. In terms of
age, condition, size and construction, the subject property
conforms to surrounding improvements within the
immediate neighborhood.
Physically possible The subject improvement is physically possible as a result of

its existence. In addition, the presence of similar
improvements in the immediate area attests to the physical
possibility of such improvements.
Financially feasible The viable options for feasible uses are continued operation
of the property, and demolition of the existing improvements
to make way for a new use. Without a complete analysis, it
is unclear as to whether this is a feasible option. However,
our experience and the actions of market participants leads
us to conclude that that it is not, as most buildings of similar
vintage are renovated and reconfigured as opposed to
demolished. In this regard, a several properties in the market
have been gut renovated as opposed to demolished. Thus, it
is our view that demolition is not feasible.
Based on our limited inspection and analysis of the existing

improvements, they contribute to the productivity on the site.
Further, the cost to demolish and construct new
improvements is less productive than ensuring that the
existing structures are functionally adequate. Thus, it is our
view that maintaining the existing buildings and continuing
their operation is a feasible use.
Maximally productive/ All legally permissible, physically possible, and financially

highest and best use feasible uses of the subject property, as vacant, have been
examined. Based on our analysis, it is our view that the
Highest and Best use of the site is continued operation
residential and retail building with periodic renovations as
required.
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APPRAISAL VALUATION PROCESS
APPRAISAL VALUATION PROCESS
In deriving the value of the subject, we considered the three primary approaches to real estate
valuation: the Cost Approach, the Income Approach and the Sales Comparison Approach.
The subject consists of four commercial condominiums within a larger mixed use residential and
Bareburger.
The Cost Approach is traditionally a good indicator of value when properties being appraised are
new or close to new. The subject building was constructed in 1940 and converted to a residential
and retail building in 2007. The subject property is a rehabilitation of a building that is
approximately 80± years old, making it difficult to estimate construction costs, accrued physical
depreciation and functional obsolescence. This fact tends to make the Cost Approach a less
effective and unreliable tool for estimating fair value. The Cost Approach has not been applied
to this analysis.
The Income Approach consists of two methods of valuation: Direct Capitalization and
Discounted Cash Flow. Direct capitalization measures a single year's anticipated income in
order to determine its capital sum by means of an overall capitalization rate. This appropriate
rate considers risk, debt, and equity goal requirements. This analysis relies on existing (or
projected) income and market expenses in order to determine annual net operating income levels.
The net operating income is capitalized to a present fair value. Direct Capitalization is especially
useful when valuing properties with market level leases, when a property is owner occupied in
which case a market rent is ascribed to the property or when the income stream is stable.
In a situation where a property is encumbered by a lease that is above market, or below market
and expiring within the next few years, or where a property is encumbered by several leases that
will expire within a typical holding period of 10-years, a DCF analysis is considered appropriate
because this analysis considers fluctuations in the income stream over the holding period.
The commercial components will be encumbered by several mid to long-term commercial leases.
Based on the variability of the subject's cash flow, it is our view that a Discounted Cash Flow
Analysis will produce the most credible value indication.
In the Sales Comparison Approach, an opinion of fair value is developed by comparing the
subject property to similar properties that have been sold recently. This approach is based on the
principle of substitution, which states that a knowledgeable investor will pay no more for a
property than the amount that would be paid for a comparable substitute property.
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INCOME APPROACH
INCOME APPROACH
In the Income Capitalization Approach, a property's capacity to generate future benefits is

analyzed; the forecasted income is then capitalized into an indication of present value.
Commonly used measures of anticipated benefits are:
 Potential Gross Income: the total potential income attributable to the real property at full
occupancy before operating expenses are deducted. It may refer to the level of rental
income prevailing in the market or that contractually determined by existing leases.
 Effective Gross Income: the anticipated income from all operations of real property
adjusted for vacancy and collection losses.
 Net Operating Income: the anticipated net income remaining after all operating expenses
are deducted from effective gross income.
 Equity Dividend: the portion of net income that remains after debt service is paid; this is
returned to the equity position.
 Reversion: A lump-sum benefit an investor expects to receive upon the termination of the
investment.
Direct vs. Yield Capitalization
The income capitalization approach supports two methodologies: direct and yield capitalization.
 Direct capitalization: A method used to convert an estimate of a single year's income

expectancy into an indication of value in one direct step, either by dividing the income
estimate by an appropriate rate or by multiplying the income estimate by an appropriate
factor. This technique employs capitalization rates and multipliers extracted from sales.
Only the first year's income is considered. Yield and value change are implied, but not
identified overall. This method is most useful when the property is already operating on a
stabilized basis.2
 Yield Capitalization: The capitalization method used to convert future benefits into present
value by discounting each future benefit at an appropriate yield rate. This method explicitly
considers a series of cash flows (net income over a holding period) over time together with
any reversion value or resale proceeds. Since this technique explicitly reflects the
investment's income pattern, it is especially suited to multi-tenant properties with varying
leasing schedules as well as properties that are not operating at stabilized occupancy.3
Conclusion
The subject is 4 retail condominiums with 21,109± square feet of net leasable area. The unit has
been subdivided into 4 retail units. As such, it is our opinion that the Discounted Cash Flow
2
The Appraisal of Real Estate, 14th edition (Chicago, IL: Appraisal Institute): 493
3
The Appraisal of Real Estate, 14th edition (Chicago, IL: Appraisal Institute): 493
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INCOME APPROACH
method is applicable, since this method explicitly accounts for the variation in net operating
income over a typical holding period.
Given the variability of the cash flow in this asset class, the direct capitalization is not applied by
investors of the same. Therefore, we have not given weight to this method and analyzed the
implied “going in” cap rate as secondary support for the DCF.
RETAIL RENTAL REVENUE
The subject property contains 21,109± square feet of leasable space. We note this includes both
grade and below grade space. All units are occupied based on the leases and our inspection.
The layout is summarized below.
Address Floor Size (Sq Feet) Uses

111 Fulton Street Below Grade 4,630 Retail/Storage
111 Fulton Street Grade 16,479 Retail
Total 21,109
We will forecast the lease renewal conditions of the subject based on the data gathered in our
market analysis including the comparable retail rentals in the next section. Further, we will
analyze the encumbered spaces to determine the reasonableness of the contract rents. Leases for
all spaces are semi-net, whereby each tenant is responsible for their own pro-rata portion of tax
increases and common area expenses. The in place leases are summarized:
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INCOME APPROACH
RENT ROLL
Lease Current Annual Rent
# Tenant Frontage Location Lease Start Expiration Rent Area (SF) PSF Escalations Options Comments
1 Hale and Hearty Fulton St. Grade 11/1/2011 10/31/2021 $232,840 2,187 $106 3% annually 5 Year Option Tenant pays 41.78% of taxes above a 11/12
base year for unit 1201, all utilties. Water
reimbursement is $3,834.
2 Greek Restaurant Fulton St. Grade 1/1/2012 12/31/2023 $385,680 3,400 $113 3% annually (rent changes 3 year option 58.22% of taxes above a 11/12 base year
Jan.) (1201). Water reimbursement is $5,136.
3 Red Mango Fulton St. Grade 3/23/2011 3/31/2021 $110,687 953 $116 3% annually (rent changes 5 Year Option 100% of taxes above a 10/11 base year
March) (1203). Water reimbursement is $3,351.
4 Above Net Ann St. Grade 11/1/2018 11/30/2028 $106,625 853 $125 3% annually (changes Two, 5 year 5.95% of taxes above a 2009/2010 base
November) options year (1368). Ann Street frontage.
5 Meltshop Fulton St. Grade 4/10/2014 1/31/2029 $264,647 1,271 $208 3% annually None 15.9% of taxes above a 2014/15 base year
(1202) and 15.9% of operating expenses.
CAM reimbursement is $11,844.
6 LOI Fulton St. Grade early 2019 10 YRS $494,950 2,605 $190 Rent is $190 psf years 1-5, Two 5 Year 33.33% of taxes above base year (all units)
$210 psf years 6-10, $231 psf Options and 15.81% CAM. CAM capped at 4%
first option, FMV (not less than increases. Taxes/CAM not to exceed 15%
110% last rent) 2nd option. above $9 psf for first year. $75 TI
7 Seven Eleven Fulton St. Grade 5/17/2013 3/31/2023 $398,133 2,609 $153 3/1/16 -$398,133, 3/1/19- 5 year option 33.38% of taxes above a 12/13 base year
$433,965, 3/1/22 - $473,022.28 (1202), 15.83% of common charges. CAM
8 Bareburger Corner William Grade 1/1/2014 1/1/2024 $250,538 2,107 $119 3% annually None 33.28% of taxes above a 13/14 base year
and Ann St. (1202), 13.20% of Common Charges. CAM
9 CrossFit William St. Grade, Lower Level 9/1/2015 12/31/2024 $104,000 5,124 $20 Rent for 2018 is 104K, 2019 is None Lease signed 6/14/14. 4 months free rent.
$168K, 2020 is $180K, 2021 is Tenant pays 19.59% of taxes over 2015
$185,400, followed by 3% taxes and 12.5% of Common Charges.
annual increases. Additional Space is distributed between 494 square
rent (CAM) is $857 per month. feet at grade and 4,630 square feet on a
lower selling level. William Street frontage.
CAM is $10,286. Lease was assigned to
Oculus Fitness in January 2018.
Total $2,348,100 21,109 $128 Total CAM $64,967
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INCOME APPROACH
Leased rents based on total square footage range from $20 per square foot (for the Crossfit
space) to $208 per square foot with a non-weighted average of $128 per square foot. Excluding
Crossfit which is largely below grade space, the units range from $106 to $208 with an average
of $141 per square foot. Spaces range in size from 853 square feet to 5,124 square feet with an
average of 2,345 square feet. Terms are primarily modified gross with tenants paying a pro rata
share of taxes over a base year, CAM, and sub or direct metered utilities for their spaces.
Recent Leasing Activity
There is a LOI for the former Au Bon Pain space at $190 per square foot. The previous rent was
$355K annually ($136 per square foot), thus the new rent is significantly higher than the
previous rent. As this is market oriented, it will be applied in our proforma. In addition, one
tenant, Above Net, extended the lease for 10 years at a rent of $125 per square foot. This unit is
located on Ann Street which is inferior to Fulton Street. The Crossfit space was reassigned to
Oculus Fitness in January 2018. The rent for 2018 is $20 per square foot, and increases to $33
psf in January 2019 and $35 psf in January 2020, followed by 3% annual increases.
COMPARABLE RETAIL SPACE
To determine the reasonableness of the subject’s leases and advance a forecast of market rent for
the future, we canvassed the immediate area for vacancies, conducted an interview of the leasing
agent of neighboring projects, and surveyed local brokers and property managers. The
comparable rentals are analyzed on the basis of rent per square foot which is the most commonly
used unit of comparison for retail space.
COMPARABLE GRADE LEVEL RETAIL M AP
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INCOME APPROACH
COMPARABLE GRADE LEVEL RETAIL RENTALS

Area (Sq. Base
Address Tenant Start Date Ft.) Rent Comments
1 147 Fulton Street Pret A Manger 1Q2017 2,169 $277 Located one block west of the subject.
2 222 Broadway Verts 2Q2016 2,387 $247 Located one block west of the subject.
8,500 SF total. 2,600 SF at grade at $250 psf. 2,700 SF on bsmt and
3 138 Fulton Street CityMD 2Q2016 2,600 $250 sub-basement at $25 psf and 600 SF mezz at $30 psf. Annual rent is
$800K.
4 70 Pine Street Confidential Oct-18 650 $197 License agreement for retail tenant.
Min 650 $197
Max 2,600 $277
Avg 1,952 $243
Source: BBG, Inc. field Survey
The indicated range of the comparable rentals is between $197 and $277 per square foot, with an
average of $243 per square foot. Three of the comparables are located along Fulton Street,
within one block of the subject. These comparables exhibit a range from $247 to $277 per square
foot.
Adjustments
Time: The market rents were signed in 2016-2018. While retail rents
have suffered in Manhattan in the past year, the Financial District is
a bright spot in the market due to the tremendous amount of
development occurring in the neighborhood. No adjustments are
warranted.
Location: The subject property and all comparables are located in the
Financial District. Three of the comparables (1-3) are located
along Fulton Street, within one block of the subject. Comparable 4
is located on Pine Street which is an inferior location. This
comparable is adjusted upward.
Condition: The subject was recently renovated from an office building to a

residential and retail building. The comparables are of similar
condition, so no adjustments are necessary.
Size: The comparables range from 650 to 2,600 square feet. Comparable
4 which measures 650 SF warrants a downward adjustment.
Utility: The subject’s spaces are of good utility, with individual build outs
the responsibility of the tenant. The subject has good visibility and
frontage along one of the best retail locations in the neighborhood.
All of the comparable retail properties have good access, exposure,
and street frontage.
Leasing Terms All of the comparables are semi-net. The subject’s leases are all
also semi-net, so no adjustments are necessary.
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ADJUSTMENT GRID
Leasing Adjusted
Rent PSF Time Time Adj. Location Condition Size Utility Terms Total Adj. Rent PSF
$277 0% $277 0% 0% 0% 0% 0% 0% $277
$247 0% $247 0% 0% 0% 0% 0% 0% $247
$250 0% $250 0% 0% 0% 0% 0% 0% $250
$197 0% $197 10% 0% -10% 0% 0% 0% $197
Min: $197 Min: $197
Average: $243 Average: $243
Max: $277 Max: $277
Market Rent Opinion
Terms are semi-net, whereby the tenants pay taxes over the base year or their share of the total
liability. In terms of size, the spaces range from 650 square feet to 2,600 square feet; the average
is 1,952 square feet. It is our experience that price per square foot tends to vary inversely with
size whereby a smaller store will rent for a higher price per square foot. After adjustment, the
comparables range from $197 to $277 with an average of $243.
The subject is located on one of the local market’s premier retail thoroughfares, and has excellent
frontage, visibility and curb appeal. The spaces are built to suit by the tenants, and feature high-
quality, attractive finishes. Likewise, strong increases in rents have occurred in the local market
along primary thoroughfares. The most recently signed lease for a unit with Fulton Street
frontage was Melt, with current rent of $208 per foot. This lease was signed in 2014.
Bareburger, which is at the corner of William and Ann, was signed at $119 per square foot,
demonstrating the premium associated with Fulton Street frontage.
There is a LOI for the subject’s vacant unit at $190 per square foot. This unit measures 2,605
square feet. As this is a current LOI, it represents the best indication of market rent for the larger
Fulton Street frontage units. Thus, we apply a market rent of $190 psf to the units which measure
greater than 2,000 SF along Fulton Street.
There are 2 smaller units with Fulton Street frontage. Based on the most current lease (Melt, at
$208 psf currently), we apply a market rent of $225 to the units that measure 953 SF and 1,271
SF.
The subject has 6 stores that front on Fulton Street. The subject’s 6 stores with Fulton Street
frontage are currently paying an average of $148 per square foot which is 73% of market rent,
indicating substantial upside potential. These leases expire in 2021 (2), 2023 (2), 2029 (2).
The subject has three additional spaces that front on William and Ann Streets. While these
remain good locations, they have less foot traffic than Fulton Street. Therefore, we project
market rent at $125 per square foot (grade level only) for the non-Fulton spaces. This is towards
the low end of the comparable range and is well supported by the 2014 Bareburger lease at $111
per square foot (currently $119 psf). Above Net renewed their lease beginning in November
2018 at $125 per square foot, which is an excellent indicator of market rent for the Ann Street
fronting stores.
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INCOME APPROACH
The CrossFit space is distributed between 494 square feet at grade and 4,630 square feet on a
lower selling level. This 15 year lease was signed in 2015 at $39 per square foot. The Crossfit
space was reassigned to Oculus Fitness in January 2018. The rent for 2018 is $20 per square
foot, and increases to $33 psf in January 2019 and $35 psf in January 2020, followed by 3%
annual increases. Based on the recent lease, we project market rent of $40 for this unit. Below
we present several below grade space lease comparables which support our projection.
Comparable Below Grade Retail Rentals
Address Tenant Start Date Area Base Rent Reimbursements Comments
Quality Imaging
1 225 Broadway Feb-06 2,466 $24 Semi-net lease Tenant pays increases over base year RE taxes.
Services
Jewish Women's
2 234 West 74 Street Jun-04 1,200 $43 No reimbursements. Rent is flat.
Club Inc.
Utilities directly metered; Tenant responsible for RE tax

3 125 East 54 Street The Volstead Aug-08 3,900 $40 Semi-net lease
over base year amount.
Min 1,200 $24

Max 3,900 $43
Avg 2,522 $36
Source: BBG, Inc. Field Survey
Correlation with Contract Rents (Retail)
The subject’s current retail rents are generally below our market projections (73% of market for
Fulton Street frontage and close to market for Ann and William Street frontage and Crossfit).
However, as some of the leases are seasoned, it is reasonable they would trail the market.
Therefore, they will be applied in our analysis, and any upside on releasing will be considered in
our discount and terminal capitalization rates. Based on market conditions reported earlier, we
have forecast 3% annual increases in market rent.
Market Rent Summary

Market Rent Assumptions # Units Market Rent In place Average % of Market
Fulton Street Frontage Large 4 $190 $141 74%
Fulton Street Frontage Small 2 $225 $162 72%
Ann Street Frontage 2 $125 $122 98%
CrossFit 1 $40 $20 51%
Reimbursement Income
All of the tenants reimburse for taxes and some for common charges (see summary of in place
leases above). We apply the existing reimbursements as written.
Market Leasing Assumptions
We assume 6 months between leases, 6 months free rent, and a $10 TI for new leases.
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Leasing Commissions
Conversations with New York real estate brokers have revealed that they receive 30% leasing
commissions on a 10-year lease as follows: Year 1, 5%; Year 2, 5%; Year 3, 4%; Year 4, 4%;
and Years 5-10, 2% per annum. There are half commissions on renewal leases. The leasing
expenditures were analyzed on a lease-by-lease basis. Commissions are to be paid in the year of
occupancy.
Tenant Improvement Allowance
Retail leases in this market do not generally include significant allowances for tenant
improvements. However, we have applied a $10 per square foot TI for new leases.
Vacancy Factor
There is one vacant retail unit for which there is a LOI. Our market leasing assumptions include
a lag vacancy period of 6 months. Costar noted current retail vacancy for Manhattan at 4%. The
Financial District submarket has a vacancy rate of 37%. However, there is a significant amount
of retail space under construction in this market in the new Fulton Street subway station, and
Westfield Mall, indicating a higher than normal vacancy rate. To account for unanticipated
vacancies and collection losses above absorption, based on our market analysis, we will apply a
4% general vacancy and 1% collection loss factor. This value is in line with investor
expectations for properties of this type. Argus will reduce general vacancy by turnover and
absorption vacancy.
Historical Operating Expenses
We were provided several years of operating expenses. Therefore, in developing a forecast of

operating expenses, we have analyzed the historicals in conjunction with our experience of
comparable retail condos. The data, analyzed on an expense per square foot basis (of leasable
area), is presented below:
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Historical Operating Expenses

2Q2018
Operating Expenses 2015 2016 2017 Annualized BBG Proforma
Real Estate Taxes $25,274 $23,459 $29,556 $29,122 $161,576
Insurance $4,644 $4,294 $4,238 $5,242 $5,277
Utiities $0 -$4,976 $618 $8,940 $0
Common Charges $75,069 $68,338 $354,519 $274,470 $115,000
Repairs and Maintenance $3,007 $45,331 $12,105 $0 $0
Miscellaneous $4,723 $4,333 $3,535 $7,072 $5,277
Legal and Professional $50,117 $125,181 $77,759 $22,426 $21,109
Management Fees and Admininstrative Expenses $78,885 $85,963 $88,861 $90,432 $69,734
Total Operating Expenses $241,719 $351,923 $571,191 $428,764 $377,973
2Q2018
2015 2016 2017 Annualized BBG Proforma
Operating Expenses PSF
Real Estate Taxes $1.20 $1.11 $1.40 $1.38 $7.65
Insurance $0.22 $0.20 $0.20 $0.25 $0.25
Utiities $0.00 -$0.24 $0.03 $0.42 $0.00
Common Charges $3.56 $3.24 $16.79 $13.00 $5.45
Repairs and Maintenance $0.14 $2.15 $0.57 $0.00 $0.00
Miscellaneous $0.22 $0.21 $0.17 $0.34 $0.25
Legal and Professional $2.37 $5.93 $3.68 $1.06 $1.00
Management Fees and Admininstrative Expenses $3.74 $4.07 $4.21 $4.28 $3.30
Total Operating Expenses PSF (Ex. Taxes) $10.25 $15.56 $25.66 $19.36 $10.25
2Q2018
Income 2015 2016 2017 Annualized BBG Proforma
Total Income $1,996,741 $2,227,813 $2,233,184 $2,270,578 $2,324,474
Net Operating Income $1,755,022 $1,875,890 $1,661,993 $1,841,814 $1,946,501
Estimated Operating Expenses
The subject is encumbered by semi-net leases, whereby taxes and common charges are paid by
the tenants. We have applied the contract terms in our analysis. Tenants are separately metered
for utilities. We have included the following reimbursements in our analysis:
Reimbursable Expenses:
Real Estate Taxes: The taxes will increase over the next several years due to the
expiration of the 421g tax abatement and exemption. We
apply the actual tax burden in our DCF.
Common Charges: This category includes the commercial unit's share of common
project expenses including payroll, landscaping, utilities,
insurance and other LL responsibilities. The historical expense
was $75,069 in 2015, $68,338 in 2016, $354,519 in 2017 and
$274,470 for 2018 annualized. According to ownership, the
2017 and 2018 expenses are artificially high because the condo
was overcharging the retail units. There is a lawsuit to recover
the overcharges. Ownership expects CAM to be
approximately $115K going forward. We apply a common
charge of $115,000 which is $5.45 psf.
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Utilities: The historical utility expense is minimal. As noted, all utilities

are direct metered and paid for by the tenants. We do not apply
any utility expense in our analysis. Ownership reported a
small utility expense in 2018 due to the vacant retail space.
Non-Reimbursable Expenses:
Landlord Insurance: Insurance tends to vary by property size. This item is

projected to be $0.25 per square foot of leasable area, or
$5,277. The historical expense was $4,644 in 2015, $4,294 in
2016, $4,238 in 2017 and $5,242 in 2018 (annualized).
Repairs and Maintenance: The historical R&M expense was $3,007 in 2015, $45,331 in
2016, $12,105 in 2017 and $0 in 2018 (annualized). All
tenants are responsible for interior maintenance of their
spaces. However, we will account for any structural
maintenance in our allocation for reserves.
Miscellaneous: This expense includes any other charges to the landlord for the
operation of the property. The historical expense ranged from
$0.17 to $0.34 in 2015-2018. We have applied a value of
$5,277 which equates to $0.25 psf in year 1, to our analysis.
Legal and Professional Fees: The subject had extensive legal and professional fees in 2013-
2017 due to the stabilization of the property and the lawsuit
regarding the common charges. As these issues have been
settled, $21,109, which is $1.00 per square foot and is
consistent with the 2018 projection of annualized expense of
$22,426.
Capital Reserves: Reserves are forecasted to be $0.25 of leasable area, or

$5,277 annually.
Management Fee: 3% of EGI which equates to $69,734 in year 1.
Expense Growth Rates
With the exception of the management expense, which is a percentage of effective gross income,
and real estate taxes, operating expenses are forecasted to escalate at a rate of 3.0% per annum.
Holding Period
Both the Korpacz and RERC investor surveys report that institutional and non-institutional
holding periods for commercial property average 10 years. The in place leases expire between
2021 and 2029. We apply a 10 year holding period.
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Discount Rate
In order to develop an indication of value by the Income Approach, it is necessary to establish an

acceptable yield rate to discount the annual cash flows and the reversion value.
Typical investors require a rate of return for investment quality property such as the subject
which is greater than the safe or "riskless" rates offered for long term treasury notes and bonds or
high grade corporate bonds. The difference between an investor's required rate of return and the
safe rate is basically the premium necessary to compensate the investor for the added risks of
inflation, management, and lack of liquidity offered by a real estate investment. The following
rates have been used as market indicators.
Key Rates
Federal Funds Rate 1.91%
Prime Rate 5.00%
10-year Treasury Bond 2.85%
30-year Treasury Bond 2.96%
Corporate Bonds (AAA) 2.24%
Municipal Bonds (AAA) 1.89%
Source: Federal Reserve Statistical Release September 2018
 The Federal Funds Rate is a foundational rate determining the cost of funds by Federal
Reserve banks to depository institutions.
 The Prime Rate is a base rate posted by large banks for loans to corporations. It is a rate
for business loans to banks' most creditworthy customers. It is no longer a lending rate, per
se but a base rate, from which other rates are adjusted.
 The 10, 20 and the 30-Year Treasury Bonds are long-term obligations that are guaranteed
by the federal government. We note that yields are near all-time lows, reflecting strong
demand for the perceived surety in the U.S. Government's ability to repay these securities.
 Corporate Bonds offered by Aaa credit rated organization are priced roughly 100 bps over
Treasuries, indicating the market's perception of minimal risk. Baa debt is issued by weaker
corporate borrowers and exhibits corresponding risk, liquidity, and pricing characteristics
compared to higher-grade obligations.
 Municipal Bonds are generally tax exempt, and as such offer a lower yield to reflect the
effective rate of return. The credit strength of the issuing local municipalities and the
security of the cash flow and/or guaranties by state or federal revenue affect the overall
yield.
Another source of anticipatory yield rates is provided by the Real Estate Research Corporation's
and PricewaterhouseCoopers' investment surveys, which summarize expected rates of return,
including capitalization rates and income and expense growth rates, from a representative sample
of institutional investors. R.E.R.C. and PwC report pre-tax yields for retail properties ranging
from 5.5% to 10.5% with a central tendency near 7.1% to 7.43%.
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Survey Property Type Discount Rate (IRR)
PricewaterhouseCoopers Retail 5.5% to 10.5%
2Q2018 7.43% average

Change since 3Q2017 18 bps
R.E.R.C. Retail 6% to 8%
2Q2018 7.1% average
Change since 3Q2017 0
In selecting an appropriate discount rate, we have considered the foregoing yields as well as the
subject property's leasing schedule, location, and productivity relative to competing properties.
Consideration was also given to the risk, liquidity, and the time and expense of asset
management inherent with income-producing property investment. These factors are
exemplified in the table below, which indicates typical spreads for real estate investments over
other Capital Market asset returns:
The consensus of those actively engaged in the marketplace for commercial properties is that
internal rates of return (based upon forecasting techniques and assumptions similar to those
utilized herein) fall within a broad range depending upon numerous risk factors including, among
others:
 Location: the better the location, the lower the IRR. The subject is on Fulton Street, a
prime retail corridor. This has a downward impact on the IRR.
 Leasing Schedule: the subject's spaces are leased at and below market rent. While the
diversity of tenancy leads us to opine that there is average risk to cash flow.
 Tenant Credit Quality: The subject is leased to a variety of tenants, some of which are
rated. Due to its location, there is strong demand from tenants and the credit quality of the
in-place tenants is strong.
 Physical Characteristics of the Subject Property: the newer the property, the higher the
quality of construction and finishes, and the better the design and layout of the physical
plant, the lower the IRR. The subject is recently renovated and is rated above the average
commercial space in the market.
 Degree of Forecasted Cash Flow Growth: the greater the growth forecasted, the higher
the IRR. The degree of cash flow growth is based on well-documented historic trends and
current economic conditions. The subject is encumbered by market level (and below
market) leases with periodic increases. Therefore, we have significant cash flow growth as
when the current leases expire in our analysis the rents will be at market rate.
 Amount of Equity Investment Required: the greater the required equity investment (that
portion of the total acquisition cost not typically funded by conventional financing), the higher
the IRR. Acquisition of commercial units typically requires 25% equity, offering the
opportunity to use significant leverage to increase investment return.
 Length of Projection Period: the longer the projection period, the higher the IRR. The
holding period is forecast to be 10 years, which is consistent with the typical hold reported
by investor surveys.
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 Type of Investment: the riskier the perceived return on investment for a particular type of
real estate, the higher the IRR. Developed retail corridor investors typically require average
returns as compared to other asset classes.
The summation approach was applied to account for yield expectations associated with these
investment considerations. A 3% basic rate was used based on the return exhibited by corporate
and utility bonds. The basic rate is increased by 100 basis points for liquidity, 100 for asset
management, and 100 basis points for risk. This results in a 6% discount rate. Based on the
foregoing, it is our opinion that this pre-tax discount or yield rate would be required by a typical
investor for a prime retail property like the subject.
Terminal Capitalization Rate and Estimated Reversion
Survey Type of Product Terminal Cap. Rate

PricewaterhouseCoopers Retail 4.5% to 9.75%
3Q Quarter 2018 6.87% average
Change YOY +27
R.E.R.C. Retail 5.8% to 7.5%

2Q Quarter 2018 6.5% average
Change since 3Q2017 -10
As indicated in the investment survey, the terminal capitalization rates for retail properties range
from 4.5% to 9.75% for institutional quality investments with the predominant rate near 6.6%.
We have used a 5% reversionary rate to capitalize the 11th year's projected net operating income
as this is in line with the investor surveys and as the property is currently leased at or below
market levels in a good location. We expect the immediate neighborhood to continue to improve
throughout our holding period.
The subject has frontage on 3 streets, and has a well curated mix of restaurants and neighborhood
amenities that serve the employment centers and neighborhood residents well. Based on the
improvements in the Lower Manhattan retail market and the influx of new residential
development directly across the street from the subject, we conclude to a discount rate of 6% and
a terminal cap rate of 5%.
The table below summarizes the discount rate and terminal cap rate used in 2017 abstracted from
in house appraisals of retail condos in Manhattan. The discount rates range from 5% to 7% with
an average of 6.3%. The terminal cap rates range from 3.75% to 5.5% with an average of 5.05%.
We note that 2 of the sales were occupied by above market rent leases in Soho, a neighborhood
that has seen dramatic decreases in rent in 2017. Based on the quality of the tenants and the
market (and below market) rents in place in the subject, our discount rate and terminal cap rate
are supported by these market comparables.
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Address Discount Rate Terminal Cap Rate Description

10,595 SF retail condo with grade, bsmt
and mezz space. Leased to Zumiez
15 West 34 Street 5.00% 3.75% through 2025.
7,000 SF retail building consisting of
basement, grade, and mezz space.
Leased through 2021 at above market
382 West Broadway 7.00% 5.50% rent.
1,373 SF at grade and 364 SF mezz.
Leased through 2019 at above market
91 Greene St 7.00% 5.50% rent.
3,500 SF at grade and 4,000 SF bsmt.

49 Mercer Street 6.00% 5.00% Leased through 2019 at market rent.
7,580 SF retail condo unit located on

grade and basement. Leased through
208 Canal Street 6.50% 5.50% 2021
Avg 6.30% 5.05%
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SUMMARY OF DISCOUNTED CASH FLOW ASSUMPTIONS
Holding Period: 10 years
Discount Rate: 6%
Terminal Capitalization Rate: 5%
Net Leasable Area: 21,109± square feet
Market Rent Growth Rate: 3%
Lease Conditions: Existing leases will be entered as written. Renewal leases

have semi net structure and have 3% increases annually.
Market Leasing Assumptions: Market rents are as follows:
Market Rent Assumptions # Units Market Rent

Fulton Street Frontage Large 4 $190
Fulton Street Frontage Small 2 $225
Ann Street Frontage 2 $125
CrossFit 1 $40
Free Rent: We will apply 6 months of free rent for new tenants. We
project 6 months of downtime.
LC and TI: 30% LC for new tenants. $10 TI for new leases.
Vacancy & Collection Loss: 5%
Expenses: Tenant pays a share of taxes over base. See above expense
analysis. 3% management fee.
Expense Growth Rate: 3.0%
Cost of Sale: 4.0%
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Discounted Cash Flow

Schedule Of Prospective Cash Flow
In Inflated Dollars for the Fiscal Year Beginning 10/1/18
For the Years Ending Sep-2019 Sep-2020 Sep-2021 Sep-2022 Sep-2023 Sep-2024 Sep-2025 Sep-2026 Sep-2027 Sep-2028 Sep-2029
___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________
Potential Gross Revenue
Base Rental Revenue $2,193,115 $2,523,002 $2,625,830 $2,927,343 $3,059,070 $3,199,944 $3,556,574 $3,724,439 $3,819,760 $3,917,941 $4,060,196
Absorption & Turnover Vacancy (37,914) (75,677) (92,988) (50,887) (189,743) (87,937)
Base Rent Abatements (28,435) (227,030) (69,741) (38,165) (218,786) (65,953)
___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________
Scheduled Base Rental Revenue 2,193,115 2,523,002 2,559,481 2,624,636 2,896,341 3,110,892 3,148,045 3,724,439 3,819,760 3,917,941 3,906,306
Expense Reimbursement Revenue

Taxes-1201 47,093 120,629 166,329 200,916 226,573 240,470 162,023 141,194 149,297 157,642 166,238
Taxes - 1202 101,786 286,968 404,425 524,098 487,692 425,427 400,751 397,137 417,467 438,406 445,791
Taxes - 1203 7,859 20,131 16,417 12,836 15,134 17,452 18,726 20,039 21,392 22,784 24,218
Taxes - 1368 184 2,843 4,674 6,576 8,288 8,851 9,178 9,516 9,863 10,221 8,978
Common Charges 76,913 87,906 90,026 100,455 101,116 99,042 120,366 146,663 151,064 155,596 157,612
Total Reimbursement Revenue 233,835 518,477 681,871 844,881 838,803 791,242 711,044 714,549 749,083 784,649 802,837
__________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________
Total Potential Gross Revenue 2,426,950 3,041,479 3,241,352 3,469,517 3,735,144 3,902,134 3,859,089 4,438,988 4,568,843 4,702,590 4,709,143
General Vacancy (78,206) (100,334) (70,747) (41,504) (131,706) (83,657) (152,186) (156,441) (160,823) (75,669)
Collection Loss (24,270) (30,415) (32,414) (34,695) (37,351) (39,021) (38,591) (44,390) (45,688) (47,026) (47,091)
___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________
Effective Gross Revenue 2,324,474 2,910,730 3,138,191 3,393,318 3,566,087 3,779,456 3,820,498 4,242,412 4,366,714 4,494,741 4,586,383
__________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________
Operating Expenses
Taxes - 1201 47,093 101,683 135,891 170,745 180,992 191,403 197,145 203,059 209,151 215,426 221,889
Taxes - 1202 103,537 240,885 327,905 416,519 444,371 472,630 486,809 501,413 516,456 531,949 547,908
Taxes - 1203 7,859 16,969 22,677 28,494 30,204 31,941 32,899 33,886 34,903 35,950 37,028
Taxes - 1368 3,087 11,565 16,486 21,504 26,619 28,022 28,863 29,729 30,620 31,539 32,485
Common Charges 115,000 118,450 122,004 125,664 129,434 133,317 137,316 141,435 145,679 150,049 154,550
Insurance 5,277 5,436 5,599 5,767 5,940 6,118 6,301 6,490 6,685 6,886 7,092
Miscellaneous 5,277 5,436 5,599 5,767 5,940 6,118 6,301 6,490 6,685 6,886 7,092
Management 69,734 87,322 94,146 101,800 106,983 113,384 114,615 127,272 131,001 134,842 137,591
Legal and Professional 21,109 21,742 22,395 23,066 23,758 24,471 25,205 25,961 26,740 27,542 28,369
__________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________
Total Operating Expenses 377,973 609,488 752,702 899,326 954,241 1,007,404 1,035,454 1,075,735 1,107,920 1,141,069 1,174,004
__________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________
Net Operating Income 1,946,501 2,301,242 2,385,489 2,493,992 2,611,846 2,772,052 2,785,044 3,166,677 3,258,794 3,353,672 3,412,379
__________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________
Leasing & Capital Costs
Tenant Improvements 195,375 5,956 13,669 16,306 13,169 82,433 13,275
Leasing Commissions 153,695 46,492 87,478 114,026 62,401 214,225 107,833
Reserves 5,277 5,436 5,599 5,767 5,940 6,118 6,301 6,490 6,685 6,886 7,092
___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________
Total Leasing & Capital Costs 354,347 5,436 58,047 106,914 136,272 81,688 302,959 6,490 6,685 6,886 128,200
___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________
Cash Flow Before Debt Service $1,592,154 $2,295,806 $2,327,442 $2,387,078 $2,475,574 $2,690,364 $2,482,085 $3,160,187 $3,252,109 $3,346,786 $3,284,179
& Taxes ========== ========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
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Present Value Summary "As Is"

Prospective Present Value
Cash Flow Before Debt Service plus Property Resale
Discounted Annually (Endpoint on Cash Flow & Resale) over a 10-Year Period
For the P.V. of P.V. of P.V. of
Analysis Year Annual Cash Flow Cash Flow Cash Flow
Period Ending Cash Flow @ 5.75% @ 6.00% @ 6.25%
________ ________ ___________ ___________ ___________ ___________
Year 1 Sep-2019 $1,592,154 $1,505,583 $1,502,032 $1,498,498

Year 2 Sep-2020 2,295,806 2,052,931 2,043,259 2,033,655
Year 3 Sep-2021 2,327,442 1,968,058 1,954,165 1,940,404
Year 4 Sep-2022 2,387,078 1,908,732 1,890,790 1,873,056
Year 5 Sep-2023 2,475,574 1,871,863 1,849,893 1,828,232
Year 6 Sep-2024 2,690,364 1,923,662 1,896,600 1,869,982
Year 7 Sep-2025 2,482,085 1,678,240 1,650,728 1,623,730
Year 8 Sep-2026 3,160,187 2,020,551 1,982,741 1,945,725
Year 9 Sep-2027 3,252,109 1,966,263 1,924,918 1,884,537
Year 10 Sep-2028 3,346,786 1,913,481 1,868,828 1,825,318
___________ ___________ ___________ ___________
Total Cash Flow 26,009,585 18,809,364 18,563,954 18,323,137
Property Resale @ 5% Cap Rate 65,517,677 37,458,875 36,584,729 35,732,969
___________ ___________ ___________
Total Property Present Value $56,268,239 $55,148,683 $54,056,106
Rounded to Thousands $56,300,000 $55,150,000 $54,100,000
VALUE OPINION "AS IS"

DISCOUNTED CASH FLOW
SEPTEMBER 30, 2018
$55,150,000
Reconciliation of DCF Method
To test the reasonableness of our value opinion developed with the Discounted Cash Flow
Method, we have analyzed "going in" capitalization rates indicated by the
PricewaterhouseCoopers' and Real Estate Research Corporation's investment surveys, which
reflect the investment expectations of institutional investors.
Survey Overall Cap Rate

PwC 4.00% to 9.00%
Change since 3Q2017 17 bps
R.E.R.C. 5.00% to 7.00%
Change since 3Q2017 -20 bps
Comparable Sales 3.50% to 6.00%
4.30% average
Developed Rate 3.00%
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Market Derived Capitalization Rates
We have also researched the wider market for capitalization rate comparables. While these sales
are not directly competitive with the subject property, they provide a good indication of the
return an investor would require for an investment like the subject property. Our findings are
detailed below
Address SF Sale Date Capitalization Rate Comments
Mid block retail condo on West Broadway between

460 West Broadway 2,272 U/C 5.00% Price and West Houston. Currently occupied by a
camera store, which is leased until 2027.
Corner retail condo that includes 5,324 SF at grade

900 1st Avenue 7,039 Jan-18 6.00% and 1,715 SF on LL in the Plaza District
neighborhood. Fully leased to 3 tenants.
806-808 Broadway 29,147 Jul-17 4.20% Unit on 3 floors. Acquired by tenant.
1,391 SF at grade and 1,632 SF in bsmt. Corner of
Leonard and Church St. New double height glass
249 Church Street 3,023 May-17 4.00%
storefront. 16' ceiling. Property sold vacant and in
shell condition.
2 retail condos. Leased to Flywheel ($92 PSF) and

415 Greenwich Street 4,971 May-17 3.62%
Juice Press ($127 PSF). Leased through 6/23.
259 Bowery 2,900 Apr-17 3.50% Mid block Retail condo leased to art gallery.
Grade (4,000 SF) and lower level (1,650 SF).
29 John Street 5,650 Jan-17 4.25% Leased to 12 small tenants. Leases expire between
2019 and 2026.
2 newly constructed retail condo units. 9' ceiling.
959 1st Avenue 2,713 Jan-17 5.50%
Vacant.
Ground floor retail condo leased to 2 tenants.
125 West 21st Street 6,956 Sep-16 3.70%
Building completed in 2008.
9 unit retail condo with basement storage. Unit

262-272 Mott Street 10,444 Aug-16 4.46%
sizes range from 371 to 2,526 SF.
Grade level retail with 16' ceilings. Lease expires

45 Greene Street 3,600 Apr-16 3.63%
2020.
2 retail condos. 6,485 SF grade, 5,707 SF bsmt.

66 Pearl Street 12,192 Apr-16 3.50% Leased to 5 tenants. Avg rent is $130 psf. Leases
expire between 2019 and 2026.
4 West 19th Street 1,574 Feb-16 4.55% Retail condo. Purchased for owner occupancy.
Min: 3.50%
Max: 6.00%
Average: 4.30%
The local comparables range from 3.50% to 6.00% with an average of 4.30%. However, upon
further analysis, we note that the properties that were acquired vacant or for owner occupancy
(249 Church St, 959 1 Ave, 4 West 19 St, and 806 Broadway) sold with cap rates at the high end
of the comparable range (4%, 5.5%, 4.55% and 4.2%, respectively). This is appropriate
considering the limited upside potential and/or the risk associated with having to lease a vacant
space. The remaining sales average 4.18%, and have some level of below market leases in place.
Overall, the 2017 and 2018 sales average 4.51%.
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INCOME APPROACH
In addition, according to Cushman & Wakefield’s 1HQ2018 Investment report, retail cap rates
averaged 4.98%, up 57 bps from YE17. However, the price per square foot was down only 2%
from YE 2017 and the sales activity was up dramatically. Thus, we would not expect the cap
rate for the subject which is a stabilized asset leased to high quality tenants to increase from last
year.
The subject has a significant number of below market rents in place, and the subject is well
located in an active retail corridor which was recently renovated. Further, the Crossfit lease is
below market for the next several years. The implied cap rate of 3.00% is below the range of the
comparables, but reasonable considering the rents are below market and are set to expire in the
next few years.
The Discounted Cash Flow method most accurately accounts for the variation in net operating
income over a typical holding period. However, Income Capitalization will be used as support for
the value derived via discounted cash flow. As the subject has a 421g tax abatement, we have
recreated the year 1 summary applying full taxes. We add the NPV of the tax benefits to our final
value conclusion. The first year of the cash flow is presented as follows.
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INCOME APPROACH
Direct Capitalization Value Summary

In Inflated Dollars for the Fiscal Year Beginning 10/1/18 Full Taxes
Potential Gross Revenue

Base Rental Revenue $2,193,115
Reimb Income $376,913
Scheduled Base Rental Revenue $2,570,028
General Vacancy -$78,206
Collection Loss -$24,270
Effective Gross Revenue $2,467,552
___________
Operating Expenses
Common
Real Estate Tax $624,407
Miscellaneous $5,277
CAM $115,000
Management Fee $69,734
Landlord Insurance $5,277
Legal and Professional $21,109
Total Operating Expenses $840,804
___________
Net Operating Income $1,626,748
Capitalization Rate 3.00%

Capitalized Value $54,224,940
Rounded $54,200,000
Add Tax Benefit $879,999
Total Value $55,100,000
CORRELATION OF INCOME VALUES
A capitalization rate of 3.00% applied to our year 1 NOI of results in a value conclusion of
$55,100,000. This is similar to the value concluded to by the Discounted Cash Flow method. As
described above, we applied the Discounted Cash Flow method over the Direct Capitalization
method, since the Discounted Cash Flow method most closely approximates the investment
criteria and motivations of an investor for an income-producing building such as the subject.
VALUE VIA THE INCOME APPROACH

"AS IS"
SEPTEMBER 30, 2018
$55,150,000
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The Sales Comparison Approach is defined as:
"A set of procedures in which a value indication is derived by comparing the property being
appraised to similar properties that have been sold recently, then applying appropriate units
of comparison and making adjustments to the sale prices of the comparables based on the
elements of comparison. The sales comparison approach may be used to value improved
properties, vacant land, or land being considered as though vacant; it is the most common
and preferred method of land valuation when an adequate supply of comparable sales are
available."4
The Sales Comparison Approach is based on the principle of substitution. This principle implies
that a knowledgeable investor will pay no more for a property than the price that would be paid for a
substitute property of similar utility and desirability. The procedure involved in this approach is to
research the market for sales of properties which are comparable to the subject, select appropriate
units of comparison, adjust the sale prices to the subject, and then reconcile the range of adjusted
sale prices into a single indication of value for the subject property.
Unit of Comparison
To analyze the comparable sales, it is generally considered necessary to convert the sales prices into
an appropriate unit of comparison. The effect of this process is to adjust for differences among the
sales and make the sale prices more similar to the subject property.
The comparable sales will be analyzed on the basis of price per square foot of building area, the
unit of comparison most commonly used to analyze sales of retail buildings in the subject’s
market area. The subject building contains 21,109 square feet of which 16,479 SF of above
grade (78%). Our valuation via the Sales Comparison Approach will consider the value of the
subject building “As Is”. Five commercial sales that are similar to the subject are described on
the following pages, along with a picture of each sale and a map of the sales' locations.
4
Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed., s.v. “sales comparison approach” (Chicago: Appraisal Institute, 2002).
CD-ROM
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MAP OF COMPARABLE SALES
SUMMARY OF COMPARABLE SALES

Address Sale Date Square Feet Sale Price Sale Price Per Square Foot
1 249 Church Street May-17 3,023 $6,000,000 $1,985
2 347 Bowery Jun-17 8,439 $20,302,500 $2,406
3 415 Greenwich Street May-17 4,971 $11,500,000 $2,313
4 29 John Street Jan-17 5,650 $19,550,000 $3,460
5 199-201 Amsterdam Avenue Feb-18 19,705 $39,000,000 $1,979
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Comparable Sale No. 1
249 Church Street
SALE NO: 1
LOCATION: 249 Church Street
New York, NY
BLOCK/LOT: 174 / 1001
TOTAL AREA (SF): 3,023
AREA AT GRADE: 1,391
PROPERTY DESCRIPTION: This is the sale of a single tenant retail condo unit with 1,632 square feet in the basement and
1,391 square feet at grade. The property was sold vacant and in shell condition. The property is
located on the northeast corner of Church Street and Leonard Street in Tribeca. Based on our in
house appraisal, the property sold at a 4% cap rate.
SALE DATE: May 25, 2017

GRANTOR: 249 Church Retail Owner LLC
GRANTEE: Premier 249 Church, LLC
SALE PRICE: $6,000,000
PRICE PER SQUARE FOOT: $1,985
DOCUMENT NO.: 2017000210765
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347 Bowery
SALE NO: 2
LOCATION: 347 Bowery
New York, NY
BLOCK/LOT: 459 / 1201, 1202
PROPERTY DESCRIPTION: This is the sale of a 8,439 square foot retail condo located on the northeast corner of
Bowery and East 3 Street in the East Village. The retail unit includes 3,088 square feet at
grade, 3,940 square feet on the second floor and 1,411 square feet on the lower level.
The unit has 13'3" ceilings on the ground floor and 11' 7" ceilings on the second floor.
SALE DATE: June 15, 2017

GRANTOR: Urban Muse Management
GRANTEE: 347 Bowery Commercial Holdings LLC
SALE PRICE: $20,302,500
DOCUMENT NO.: 2017000256322
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415 Greenwich Street
SALE NO: 3
LOCATION: 415 Greenwich Street
New York, NY
BLOCK/LOT: 215/1101 and 1102
PROPERTY DESCRIPTION: This is sale of 2 retail condos located in a residential building on the entire blockfront of Greenwich
Street between Hubert and Laight Streets in Tribeca. The 2 units are leased to FlyWheel (3,395 SF
at $92 psf) and Juice Press (1,576 SF at $127 psf). The average in place rent is $103 psf which is
below market. The leases expire in June 2023 and both tenants have a 5 year renewal option at
FMV. In place NOI is $416,753 which equates to a cap rate of 3.62%. Asking price was $14M.
SALE DATE: May 10, 2017

GRANTOR: Ashkenazy Acquisition Corporation
GRANTEE: KLM Construction Corporation
SALE PRICE: $11,500,000
DOCUMENT NO.: 2017000183840
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29 John Street
SALE NO: 4
LOCATION: 29 John Street
New York, NY
BLOCK/LOT: 79 / 1101
PROPERTY DESCRIPTION: This is the sale of a retail condo located on the corner of Nassau and John
Streets in Lower Manhattan. There is a total of 5,650 SF of which 4,000 is at
grade and 1,650 is on the selling lower level. There are 12 units and the
property was fully occupied. The in place leases expire between 2019 and
2026. The cap rate was reported to be 4.25%. Asking price was $22m.
SALE DATE: January 20, 2017

GRANTOR: Y L Real Estate Developers
GRANTEE: HUBB NYC Properties
SALE PRICE: $19,550,000
DOCUMENT NO.: 2017000050233
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199-201 Amsterdam Avenue
SALE NO: 5
LOCATION: 199-201 Amsterdam Avenue
New York, NY
BLOCK/LOT: 1141 / 1101
PROPERTY DESCRIPTION: This is the sale of a 19,705 square foot retail condo located on the street and
lower level of the Nevada Towers on the Upper West Side. At the time of
sale, all spaces were fully leased. According to CoStar, this was a private
deal as there were not any brokers involved and the property was not on the
market prior to the sale. This sale was verified by CoStar and public records.
SALE DATE: February 12, 2018

GRANTOR: Harvey Schussler
GRANTEE: HUBB NYC Properties
SALE PRICE: $39,000,000
DOCUMENT NO.: 2018000059172
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Adjustments
Adjustments to the comparable sales have been considered based on comparison to the subject
for property rights, financing terms, conditions of sale, market conditions (time), location, size,
corner, and utility.
Property Rights Appraised: The purpose of this adjustment is to account for differences in
the property rights which were transferred with the sale. All the
sales were acquired by investors and did not require
adjustments.
Financing: The purpose of adjusting for financing terms is to determine

cash equivalent sale prices for any special or atypical
financing involved in the acquisition. All the comparables
involved market-rate financing and are not adjusted.
Conditions of Sale: This adjustment refers to the motivations of the buyer and seller
involved in a particular transaction. All sales appear to be arm's
length transactions and did not require adjustments.
Market Conditions: The comparable sales transacted since May 2017. No

adjustments are warranted.
Location: The subject property is located on Fulton Street, an active

and desirable retail corridor which benefits from its
proximity to the new Fulton Street subway hub. Sales 1 and
3 are in Tribeca. While these are high quality retail streets,
the subject’s location is superior based on its proximity to
the Fulton Street subway hub. These sales warrant upward
adjustments. Sale 2 is located on the Bowery, along a trendy
retail corridor. This sale is adjusted downward. Sale 4 is
similarly located in the Financial District and thus does not
warrant an adjustment. Sale 5 is located on a prime retail
corridor on the Upper West Side which is a similar location.
Size: This adjustment accounts for the difference in size between

each of the comparables and the subject property. Typically,
a smaller building will sell at a higher price per square foot
level than a similar larger sized building. The sales range in
size from 3,023 to 19,705 square feet. The subject property
contains 21,109 square feet of leasable space divided into 4
separate condo units. As such, no adjustments are warranted.
Corner: The subject and all the sales have corner frontage. No
adjustments are warranted
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Utility: This adjustment reflects building height or number of stories,

land to building ratio, views, exterior appeal, and the interior
finishes, design and layout of each comparable as compared
to the subject property. The subject has 78% of its leasable
area at grade. The remaining square footage is below grade
space.
Comparable 1 is 46% above grade and warrants an upward

adjustment.
Comparable 2 is 37% above grade and warrants an upward

adjustment.
Comparable 3 is located entirely at grade and warrants a

downward adjustment.
Comparable 4 contains 71% above grade. No adjustment is

warranted.
Comparable 5 contains 50% above grade and warrants an

upward adjustment.
Age / Condition: As mentioned, the subject property was recently renovated

and is in good condition. Comparable 2 is new construction
and warrants a downward adjustment. Sale 1 was sold in
shell condition and warrants an upward adjustment.
The following table illustrates the adjustment grid.
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SALES ADJUSTMENT GRID

Sale No. 1 2 3 4 5
Address: 249 Church Street 347 Bowery 415 Greenwich 29 John Street 199-201 Amsterdam
Street Avenue
Sale Date: 5/25/2017 6/15/2017 5/10/2017 1/20/2017 2/12/2018

Square Feet: 3,023 8,439 4,971 5,650 19,705
Sale Price: $6,000,000 $20,302,500 $11,500,000 $19,550,000 $39,000,000
Sale Price Per Square Feet: $1,985 $2,406 $2,313 $3,460 $1,979
Property Rights: 0% 0% 0% 0% 0%
Financing Terms: 0% 0% 0% 0% 0%
Conditions of Sale: 0% 0% 0% 0% 0%
Market Conditions (Time): 0% 0% 0% 0% 0%
Trended Price PSF: $1,985 $2,406 $2,313 $3,460 $1,979
Location: 15% -5% 15% 0% 0%
Size: 0% 0% 0% 0% 0%
Corner: 0% 0% 0% 0% 0%
Utility: 5% 5% -3% 0% 5%
Condition: 10% -5% 0% 0% 0%
Total Adjustments: 30% -5% 12% 0% 5%
Adjusted Price PSF: $2,580 $2,286 $2,591 $3,460 $2,078
UNADJUSTED ADJUSTED
LOW $1,979 LOW $2,078
HIGH $3,460 HIGH $3,460
AVERAGE $2,429 AVERAGE $2,599
MEDIAN $2,313 MEDIAN $2,580
Before adjustments, the comparable sales show a price range from $1,979 to $3,460 per square
foot After adjustments, the comparable sales show a price range from $2,078 to $3,460 per
square foot with an average of $2,599 per square foot and a median of $2,580 per square foot.
Sales 1-3 and 5 exhibit a tight range of $2,078 to $2,591 with an adjusted average of $2,384 per
square foot. Sales 1 through 4 are the most proximate to the subject and traded for $2,580,
$2,286, $2,591 and $3,460 per square foot.
Based on the comparables and considering the subject’s well curated tenant mix, we conclude to
a value indicator of $2,600 per square foot, which results in the following value conclusion.
Concluded Value PSF $2,600

Square Feet 21,109
Value $54,883,400
Add Tax Benefit $879,999
Total Value $55,763,399
Rounded $55,800,000
Therefore, the ‘as is’ value indicator, via the Sales Comparison Approach, as of September 30,
2018, is $55,800,000:
VALUE VIA THE SALES COMPARISON APPROACH

"AS IS"
SEPTEMBER 30, 2018
$55,800,000
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RECONCILIATION AND FINAL VALUE OPINION
RECONCILIATION AND FINAL VALUE OPINION
Approach Interest Date Fair Value

Cost Approach Leased Fee 9/30/2018 N/A
Income Approach "As Is" Leased Fee 9/30/2018 $55,150,000
Sales Approach "As Is" Leased Fee 9/30/2018 $55,800,000
The Cost Approach is traditionally a good indicator of value when properties being appraised are
new or close to new. The subject building was constructed in 1904 and converted to residential
use in 2007. Real estate investors today give little consideration to the Cost method of
estimating value for investment-type properties such as the appraised property. Therefore, we
have not applied the Cost Approach.
The Income Approach consists of two methods of valuation: Direct Capitalization and
Discounted Cash Flow. Direct capitalization measures a single year's anticipated income in
order to determine its capital sum by means of an overall capitalization rate. This appropriate
rate considers risk, debt, and equity goal requirements. This analysis relies on existing (or
projected) income and market expenses in order to determine annual net operating income levels.
The net operating income is capitalized to a present fair value. Direct Capitalization is useful
when valuing properties with market level leases, when a property is owner occupied in which
case a market rent is ascribed to the property or when the income stream is stable.
In a situation where a property is encumbered by a lease that is above market, or below market
and expiring within the next few years, or where a property is encumbered by several leases that
will expire within a typical holding period of 10-years, a DCF analysis is appropriate because
this analysis considers fluctuations in the income stream over the holding period.
The commercial units are encumbered by several long-term commercial leases, and the taxes are
phased in over time due to the 421g. Therefore, based on the variability of the cash flow, it is
our view that a Discounted Cash Flow Analysis will produce the most credible value indication.
In the Sales Comparison Approach, an opinion of fair value is developed by comparing the
subject property to similar properties that have been sold recently. This approach is based on the
principle of substitution, which states that a knowledgeable investor will pay no more for a
property than the amount that would be paid for a comparable substitute property. Given the
variable leasing schedules of the comparable sales, this approach is not a primary concern of
investors.
Therefore, with greatest consideration given to the Income Approach our opinion the fair value
of the subject property’s leased fee interest is:
Approach Value Date Conclusion
Income Approach "As Is" September 30, 2018 $55,150,000
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ADDENDA
ADDENDA
1. HISTORICAL VALUES
2. INFORMATION PROVIDED BY OWNER
3. CONTINGENT AND LIMITING CONDITIONS
4. CERTIFICATION
5. QUALIFICATIONS
6. APPRAISER LICENSES
ADDENDA
HISTORICAL VALUES
9/30/2018 12/31/2017 9/30/2016 6/30/2015 12/31/2014 6/30/2014 12/31/2013 12/31/2012

111 Fulton St $55,150,000 $54,900,000 $51,400,000 $50,100,000 $42,100,000 $35,800,000 $34,500,000 $24,700,000
Terminal Cap Rate 5.00% 5.00% 5.00% 5.00% 5.50% 5.50% 5.75% 6.00%
Discount Rate 6.00% 6.00% 6.00% 6.00% 6.50% 7.50% 7.00% 8.00%
12/31/2011 Acquisition 11/25/11

$20,000,000 $20,000,000
ADDENDA
RENT ROLL
ADDENDA
ADDENDA
OPERATING STATEMENTS
ADDENDA
ADDENDA
ADDENDA
This appraisal report has been made with the following general assumptions:
1. Any legal description or plats reported herein are assumed to be accurate. Any sketches,
surveys, plats, photographs, drawings or other exhibits are included only to assist the
intended user to better understand and visualize the subject property, the environs, and the
competitive data. We have made no survey of the property and assume no responsibility in
connection with such matters.
2. The appraiser has not conducted any engineering or architectural surveys in connection with
this appraisal assignment. Information reported pertaining to dimensions, sizes, and areas is
either based on measurements taken by the appraiser or the appraiser’s staff or was obtained
or taken from referenced sources and is considered reliable. No responsibility is assumed for
the costs of preparation or for arranging geotechnical engineering, architectural, or other
types of studies, surveys, or inspections that require the expertise of a qualified professional.
3. No responsibility is assumed for matters legal in nature. Title is assumed to be good and
marketable and in fee simple unless otherwise stated in the report. The property is considered
to be free and clear of existing liens, easements, restrictions, and encumbrances, except as
stated.
4. Unless otherwise stated herein, it is assumed there are no encroachments or violations of any
zoning or other regulations affecting the subject property and the utilization of the land and
improvements is within the boundaries or property lines of the property described and that
there are no trespasses or encroachments.
5. BBG, Inc. assumes there are no private deed restrictions affecting the property which would
limit the use of the subject property in any way.
6. It is assumed the subject property is not adversely affected by the potential of floods; unless
otherwise stated herein.
7. It is assumed all water and sewer facilities (existing and proposed) are or will be in good
working order and are or will be of sufficient size to adequately serve any proposed buildings.
8. Unless otherwise stated within the report, the depiction of the physical condition of the
improvements described herein is based on visual inspection. No liability is assumed for the
soundness of structural members since no engineering tests were conducted. No liability is
assumed for the condition of mechanical equipment, plumbing, or electrical components, as
complete tests were not made. No responsibility is assumed for hidden, unapparent or masked
property conditions or characteristics that were not clearly apparent during our inspection.
9. If building improvements are present on the site, no significant evidence of termite damage or
infestation was observed during our physical inspection, unless so stated in the report. No
termite inspection report was available, unless so stated in the report. No responsibility is
assumed for hidden damages or infestation.
10. Any proposed or incomplete improvements included in this report are assumed to be
satisfactorily completed in a workmanlike manner or will be thus completed within a
reasonable length of time according to plans and specifications submitted.
ADDENDA
11. No responsibility is assumed for hidden defects or for conformity to specific governmental
requirements, such as fire, building, safety, earthquake, or occupancy codes, except where
specific professional or governmental inspections have been completed and reported in the
appraisal report.
12. Responsible ownership and competent property management are assumed.
13. The appraisers assume no responsibility for any changes in economic or physical conditions
which occur following the effective date of value within this report that would influence or
potentially affect the analyses, opinions, or conclusions in the report. Any subsequent changes
are beyond the scope of the report.
14. The value estimates reported herein apply to the entire property. Any proration or division of
the total into fractional interests will invalidate the value estimates, unless such proration or
division of interests is set forth in the report.
15. Any division of the land and improvement values estimated herein is applicable only under the
program of utilization shown. These separate valuations are invalidated by any other
application.
16. Unless otherwise stated in the report, only the real property is considered, so no consideration
is given to the value of personal property or equipment located on the premises or the costs of
moving or relocating such personal property or equipment.
17. Unless otherwise stated, it is assumed that there are no subsurface oil, gas or other mineral
deposits or subsurface rights of value involved in this appraisal, whether they are gas, liquid, or
solid. Nor are the rights associated with extraction or exploration of such elements considered;
unless otherwise stated. Unless otherwise stated it is also assumed that there are no air or
development rights of value that may be transferred.
18. Any projections of income and expenses, including the reversion at time of resale, are not
predictions of the future. Rather, they are our best estimate of current market thinking of what
future trends will be. No warranty or representation is made that these projections will
materialize. The real estate market is constantly fluctuating and changing. It is not the task of
an appraiser to estimate the conditions of a future real estate market, but rather to reflect what
the investment community envisions for the future in terms of expectations of growth in
rental rates, expenses, and supply and demand. The forecasts, projections, or operating
estimates contained herein are based on current market conditions, anticipated short-term
supply and demand factors, and a continued stable economy. These forecasts are, therefore,
subject to changes with future conditions.
19. Unless subsoil opinions based upon engineering core borings were furnished, it is assumed
there are no subsoil defects present, which would impair development of the land to its
maximum permitted use or would render it more or less valuable. No responsibility is assumed
for such conditions or for engineering which may be required to discover them.
20. BBG, Inc. representatives are not experts in determining the presence or absence of hazardous
substances, defined as all hazardous or toxic materials, wastes, pollutants or contaminants
(including, but not limited to, asbestos, PCB, UFFI, or other raw materials or chemicals) used
in construction or otherwise present on the property. We assume no responsibility for the
studies or analyses which would be required to determine the presence or absence of such
substances or for loss as a result of the presence of such substances. Appraisers are not
qualified to detect such substances. The client is urged to retain an expert in this field.
ADDENDA
21. We are not experts in determining the habitat for protected or endangered species, including,
but not limited to, animal or plant life (such as bald eagles, gophers, tortoises, etc.) that may
be present on the property. We assume no responsibility for the studies or analyses which
would be required to determine the presence or absence of such species or for loss as a
result of the presence of such species. The appraiser hereby reserves the right to alter,
amend, revise, or rescind any of the value opinions based upon any subsequent endangered
species impact studies, research, and investigation that may be provided.
22. No environmental impact studies were either requested or made in conjunction with this
analysis. The appraiser hereby reserves the right to alter, amend, revise, or rescind any of the
value opinions based upon any subsequent environmental impact studies, research, and
investigation that may be provided.
23. The appraisal is based on the premise that there is full compliance with all applicable federal,
state, and local environmental regulations and laws unless otherwise stated in the report;
further, that all applicable zoning, building, and use regulations and restrictions of all types
have been complied with unless otherwise stated in the report; further, it is assumed that all
required licenses, consents, permits, or other legislative or administrative authority, local, state,
federal and/or private entity or organization have been or can be obtained or renewed for any
use considered in the value estimate.
24. Neither all nor any part of the contents of this report or copy thereof, shall be conveyed to the
public through advertising, public relations, news, sales, or any other media, without the prior
written consent and approval of the appraisers. This limitation pertains to any valuation
conclusions, the identity of the analyst or the firm and any reference to the professional
organization of which the appraiser is affiliated or to the designations thereof.
25. Although the appraiser has made, insofar as is practical, every effort to verify as factual and
true all information and data set forth in this report, no responsibility is assumed for the
accuracy of any information furnished the appraiser either by the client or others. If for any
reason, future investigations should prove any data to be in substantial variance with that
presented in this report, the appraiser reserves the right to alter or change any or all analyses,
opinions, or conclusions and/or estimates of value.
26. If this report has been prepared in a so-called “public non-disclosure” state, real estate sales
prices and other data, such as rents, prices, and financing, are not a matter of public record. If
this is such a “non-disclosure” state, although extensive effort has been expended to verify
pertinent data with buyers, sellers, brokers, lenders, lessors, lessees, and other sources
considered reliable, it has not always been possible to independently verify all significant facts.
In these instances, the appraiser may have relied on verification obtained and reported by
appraisers outside of our office. Also, as necessary, assumptions and adjustments have been
made based on comparisons and analyses using data in the report and on interviews with
market participants. The information furnished by others is believed to be reliable, but no
warranty is given for its accuracy.
ADDENDA
27. The American Disabilities Act (ADA) became effective January 26, 1992. The appraiser has
not made a specific compliance survey or analysis of the property to determine whether or not
it is in conformity with the various detailed requirements of ADA. It is possible that a
compliance survey of the property and a detailed analysis of the requirements of the ADA
would reveal that the property is not in compliance with one or more of the requirements of
the act. If so, this fact could have a negative impact upon the value of the property. Since the
appraiser has no direct evidence relating to this issue, possible noncompliance with the
requirements of ADA was not considered in estimating the value of the property.
28. This appraisal report has been prepared for the exclusive benefit of the client. It may not be
used or relied upon by any other party. Any other party who is not the identified client within
this report who uses or relies upon any information in this report does so at their own risk.
29. The dollar amount of any value opinion herein rendered is based upon the purchasing power
and price of the United States Dollar as of the effective date of value. This appraisal is based on
market conditions existing as of the date of this appraisal.
30. The right is reserved by the appraiser to make adjustments to the analyses, opinions, and
conclusions set forth in this report as may be required by consideration of additional or more
reliable data that may become available. No change of this report shall be made by anyone other
than the appraiser or appraisers. The appraiser(s) shall have no responsibility for any
unauthorized change(s) to the report.
31. If the client instructions to the appraiser were to inspect only the exterior of the improvements
in the appraisal process, the physical attributes of the property were observed from the street(s)
as of the inspection date of the appraisal. Physical characteristics of the property were obtained
from tax assessment records, available plans, if any, descriptive information, and interviewing
the client and other knowledgeable persons. It is assumed the interior of the subject property is
consistent with the exterior conditions as observed and that other information relied upon is
accurate.
32. The submission of this report constitutes completion of the services authorized. It is submitted
on the condition the client will provide reasonable notice and customary compensation,
including expert witness fees, relating to any subsequent required attendance at conferences,
depositions, and judicial or administrative proceedings. In the event the appraiser is subpoenaed
for either an appearance or a request to produce documents, a best effort will be made to notify
the client immediately. The client has the sole responsibility for obtaining a protective order,
providing legal instruction not to appear with the appraisal report and related work files and will
answer all questions pertaining to the assignment, the preparation of the report, and the
reasoning used to formulate the estimate of value. Unless paid in whole or in part by the party
issuing the subpoena or by another party of interest in the matter, the client is responsible for all
unpaid fees resulting from the appearance or production of documents regardless of who
orders the work.
33. Use of this appraisal report constitutes acknowledgement and acceptance of the general
assumptions and limiting conditions, special assumptions (if any), extraordinary assumptions
(if any), and hypothetical conditions (if any) on which this estimate of market value is based.
34. If provided, the estimated insurable value is included at the request of the client and has not
been performed by a qualified insurance agent or risk management underwriter. This cost
estimate should not be solely relied upon for insurable value purposes. The appraisers are not
ADDENDA
familiar with the definition of insurable value from the insurance provider, the local
governmental underwriting regulations, or the types of insurance coverage available. These
factors can impact cost estimates and are beyond the scope of the intended use of this
appraisal. The appraisers are not cost experts in cost estimating for insurance purposes.
ADDENDA
CERTIFICATION
The appraisers certify that:
 Michelle Zell, MAI has personally inspected and prepared the analysis concerning the real estate
that is the subject of this appraisal report.
 The appraisal assignment was not based on a requested minimum valuation, a specific valuation,
or the approval of a loan.
 The reported analysis, opinions and conclusions are limited only by the reported assumptions and
limiting conditions and are our personal, unbiased professional analyses, opinions and
conclusions.
 I have no present or prospective interest in the property that is the subject of this report and no
personal interest with respect to the parties involved.
 The undersigned have no bias with respect to the property that is the subject of this report or to
the parties involved with this assignment.
 Our compensation is not contingent on an action or event resulting from the analysis, opinions or
conclusions in, or the use of, this report.
 Our analyses, opinions and conclusions were developed and this report has been prepared in
conformity with the requirements of the Code of Professional Ethics and the Standards of
Professional Practice of the Appraisal Institute, the Uniform Standard of Professional Appraisal
Practice (USPAP), and Title XI (with amendments) of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 (FIRREA).
 The undersigned have performed services as an appraiser regarding the property that is the
subject of this report within the 3-year period immediately preceding acceptance of this
assignment.
 The use of this report is subject to the requirements of the Appraisal Institute relating to review by
its duly authorized representatives.
 The undersigned’s engagement in this assignment was not contingent upon developing or
reporting pre-determined results.
 Our compensation for completing this assignment is not contingent upon the development or
reporting of a pre-determined 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.
 Michelle Zell is currently certified under the continuing education program of the Appraisal
Institute. She is also certified by the State of New York as a General Real Estate Appraiser.
 As of the date of this report, Michelle Zell has completed the continuing education program for
Designated Members of the Appraisal Institute.
ADDENDA
 As of the date of this report, Michelle Zell has completed the Standards and Ethics Education
Requirements for Practicing Affiliates of the Appraisal Institute.
Michelle Zell, MAI

Senior Appraiser
State Certified General Appraiser #46-49921
ADDENDA
QUALIFICATIONS
ADDENDA
LICENSES

RE: Appraisals For 111 Fulton Street, New York, NY and For 176 Columbia Turnpike, Florham Park NJ - Consent To Publication

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RE: Appraisals For 111 Fulton Street, New York, NY and For 176 Columbia Turnpike, Florham Park NJ - Consent To Publication

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November 27, 2018

To: Klein International Group Limited

C/O Maples Corporate Services (BVI) Limited

PO Box 173, Road Town

Tortola, British Virgin Islands

To Whom It May Concern:

Michelle Zell, MAI

FLORHAM PARK PLAZA

THE KLEIN GROUP

Date of Valuation “As Is”: September 30, 2018

Mr. Jacob Klein

Re: BBG File No. 0118009565

Dear Mr. Klein:

Extraordinary Assumptions/Hypothetical Conditions

The use of Extraordinary Assumptions might have affected assignment results.

Exposure Time/Marketing Period

Ronald K. Owens, Jr., MAI, MRICS, ASA

SUBJECT AT A GLANCE ............................................................................................................... 1

FLORHAM PARK PLAZA

Additional photos can be found in the Exhibits Section of this report.

FLORHAM PARK PLAZA PAGE 1

Property Florham Park Plaza

Interest Appraised Leased Fee

Status Legally conforming

Highest and Best Use

FLORHAM PARK PLAZA PAGE 2

Income & Expense Data

Market Rent Summary

Stabilized Occupancy 95% (includes 1% collection loss) – Vacancy excluded from

Value Indications of Subject – “As Is”

Fair Value Conclusion

FLORHAM PARK PLAZA PAGE 3

I certify that, to the best of my knowledge and belief:

FLORHAM PARK PLAZA PAGE 4

Ronald K. Owens, Jr., MAI, MRICS, ASA

FLORHAM PARK PLAZA PAGE 5

FLORHAM PARK PLAZA PAGE 6

Function Of The Appraisal/Intended User

Property Rights Appraised

Definition of Fair Value

(a) the particular asset or liability being measured;

FLORHAM PARK PLAZA PAGE 7

History of the Subject Property

Scope of Appraisal/Extent the Data Collection Process

FLORHAM PARK PLAZA PAGE 8

4. Researched the flood plain reference relative to the survey provided.

6. Confirmed sales of similar centers to compare to the subject.

12. Prepared an appraisal report.

FLORHAM PARK PLAZA PAGE 9

FLORHAM PARK PLAZA PAGE 10

FLORHAM PARK PLAZA PAGE 11

Extraordinary Assumptions/Hypothetical Conditions

The use of Extraordinary Assumptions might have affected assignment results.

FLORHAM PARK PLAZA PAGE 12

Figure 1 – Regional Map (Subject denoted by pin)

FLORHAM PARK PLAZA PAGE 13

Federal Reserve Board Districts

Employment and Wages

FLORHAM PARK PLAZA PAGE 14