APPRAISAL OF REAL PROPERTY SUMMARY REPORT … · APPRAISAL OF REAL PROPERTY SUMMARY REPORT...

APPRAISAL OF REAL PROPERTY SUMMARY REPORT

Brookhollow Industrial Park Property

Located at: 8901 Directors Row, Dallas TX 75247

As of:

December 9, 2006

Prepared For: Dr. Andrew Hansz

University of Texas at Arlington P.O. Box 19449

Arlington, TX 76019

Prepared By: Tu Le, Ofelia Garcia, Leonard Garcia

TOS Appraisal

December 9, 2006

Dr. Andrew Hansz, Ph.D.

College of Business Administration

University of Texas at Arlington

UTA Box 19449

Arlington, TX 76019 Dear Dr. Hansz,

This appraisal is in response to your request to prepare an appraisal of the commercial property located at 8901 Directors Row Dallas, Texas 75247. We have personally made an inspection of the subject property. This inspection was made for the purpose of estimating the market value, as defined in this report, of the leased fee interest in the subject property as of September 20, 2006, the effective date of the appraisal. The accompanying report, which comprises 50 pages, describes the three approaches to value and the conclusions derived by application of the approaches. Please note the assumptions and limiting conditions on page 48. The appraisal is intended to conform with the Uniform Standards of Professional Appraisal Practice (USPAP), the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, and the appraisal guidelines of the University of Texas at Arlington. The appraisal is also prepared in accordance with the appraisal regulations issued in connection with the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). Based upon our investigation and analysis of the data gathered with respect to this assignment, we have formed the opinion that market value of the lease fee interest in the subject property was, as of September 20, 2006, measured in the amount of

Value Conclusion Appraised Premise Interest Appraised Date of Value Value Conclusion Prospective Market Value

Leased Fee September 20, 2006 $550,000

If you have any questions or comments, please contact the undersigned. Thank you for the opportunity to be of service.

Respectfully submitted, TOS Appraisal

8901 Directors Row Dallas, TX 75247

TABLE OF CONTENTS

Summary of Salient Facts and Conclusions…………………………………………………..5 General Information……………………………………………………………………………6

Identification of Subject………………………………………………………………....6 Current Ownership and Sales History…………………………………………………...6 Purpose, Property Rights and Effective Date…………………………………………....6 Definition of Market Value……………………………………………………………...6 Definition of Property Rights Appraised………………………………………………..6 Scope of Work…………………………………………………………………………..7

Economic Analysis……………………………………………………………………………….8 The Dallas/Fort Worth Metropolitan Area Analysis…………………………………….8 Surrounding Area Analysis……………………………………………………………..15

Property Analysis………………………………………………………………………………..17 Land Description Analysis..……………………………………………………………..17 Improvements Description and Analysis………………………………………………..20 Real Estate Tax Analysis………………………………………………………………..24 Highest and Best Use Analysis………………………………………………………….26

Valuation Analysis……………………………………………………………………………….27 Valuation Methodology………………………………………………………………….27 Sales Comparison Approach…………………………………………………………….28 Cost Approach…………………………………………………………………………..33 Income Capitalization Approach………………………………………………………..38 Reconciliation and Conclusion of Value………………………………………………..46

Certification……………………………………………………………………………………...47 Assumptions and Limiting Conditions…………………………………………………………48

Addenda Definitions…………………………………………………………………………Addendum A Subject Photographs……………………………………………………………….Addendum B Financials and Property Information………………………………………………Addendum C

Comparable Data…………………………………………………………………...Addendum D

SUMMARY OF FACTS AND CONCLUSIONS

Property Type Storage warehouse building Location 8901 Directors Row Dallas, TX 75247 Date of Value Estimate September 20, 2006 Property rights appraised Leased Fee interest Site A 1.123 acre lot with 150 ft

frontage that is fully improved and conforms to all appropriate ordinances

Improvements A 46 year old warehouse with

16,000 square feet lease area; building is 81’x 200’ with bricks over blocks; A 25x15 shed in the back separated by a cement curb

Zoning Industrial/Research District Highest and Best Use Industrial Use Site Value $65,000 Cost Approach $400,000 Sales Comparison Approach $545,000 Income Capitalization Approach $600,000 Final Value Conclusion $550,000

GENERAL INFORMATION

Identification of Subject The subject is an existing industrial property containing 16,000 square feet of rentable area. The improvements were constructed in 1960. The site area is 1.123 acres, or 48,896 square feet. The street address is 8901 Directors Row, Dallas County, Texas 75247. It is identified by the tax assessment office as follows: 77923. A legal description of the property is in the addenda. Current Ownership and Sales History The owner of record is English O B. This party has owned the property for a period exceeding three years. To the best of our knowledge, no sale or transfer of ownership has occurred within the past three years, and as of the effective date of this appraisal, the property is not subject to an agreement of sale or option to buy, nor is it listed for sale. Purpose, Property Rights and Effective Date The purpose of the appraisal is to develop an opinion of the prospective market value of the leased fee interest in the property as of the effective date of the appraisal, September 20, 2006. Definition of Market Value Market value is defined as: “The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of the title from seller to buyer under conditions whereby: • Buyer and seller are typically motivated; • Both parties are well informed or well advised, and acting in what they consider their best interests; • A reasonable time is allowed for exposure in the open market; • Payment is made in terms of cash in United States dollars or in terms of financial arrangements

comparable thereto; and • The price represents the normal consideration for the property sold unaffected by special or creative

financing or sales concessions granted by anyone associated with the sale.” (Source: 12 C.F. R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994)

Definition of Property Rights Appraised Fee simple estate is defined as an: “Absolute ownership interest unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.” (Source: The Dictionary of Real Estate Appraisal, Fourth Edition, 2002.) Leased fee interest is defined as: “An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease.” (Source: The Dictionary of Real Estate Appraisal, Fourth Edition, 2002.)

Leasehold interest is defined as: “The interest held by the lessee (tenant or renter) through a lease transferring the rights of use and occupancy for a stated term under certain conditions.” (Source: The Dictionary of Real Estate Appraisal, Fourth Edition, 2002.) Scope of Work To determine the appropriate scope of work for the assignment, we considered the complexity of the property, the needs of the user, and other pertinent factors. Our concluded scope of work is described below. Valuation Methodology Appraisers usually consider the use of the three approaches to value when developing a market value opinion for real property. These are the cost approach, sales comparison approach, and income capitalization approach. Use of the approaches in this assignment is summarized as follows:

APPROACHES TO VALUE

Approach Applicable to Subject Use in Assignment Sales Comparison Approach Applicable Utilized

Cost Approach Not applicable Utilized Income Capitalization Approach Applicable Utilized

The sales comparison approach is the most reliable valuation method for the subject property due to the following:

• There is an active market for similar properties, and sufficient sales data is available for analysis. • This approach directly considers the prices of alternative properties having similar utility.

The income capitalization approach is an applicable valuation method because:

• The probable buyer of the subject would base a purchase price decision primarily on the income generating potential of the property and an anticipated rate of return.

• There is sufficient market data regarding income, expenses, and rates o return, is available for analysis.

The cost approach is applicable to the assignment considering the following:

• There is an active land market, making estimates of underlying land value reasonably reliable. • The user wanted this approach to be used.

Other Research and Analysis Additional steps taken to gather, confirm, and analyze relevant data, are detailed in individual sections of the report. Property Inspection We have conducted an interior and exterior inspection of the property on September 20, 2006. Report Format This report is prepared under the self-contained report option of Standards Rule 2-2 of USPAP. Accordingly, the report contains all information significant to the solution of the appraisal problem.

ECONOMIC ANALYSIS

Dallas/Fort Worth Metropolitan Area Analysis

Location – DFW The subject property is located in the Dallas/Fort Worth Metropolitan Area. The Dallas-Fort Worth Metroplex is located in North Central Texas, approximately 250 miles north of the Gulf of Mexico. The Dallas/Fort Worth Metroplex is the fifth largest metro area in the country. MAJOR HIGHWAYS - DFW

The Dallas/Fort Worth Metroplex is served by seven interstate. IH-35E (North/South) – Dallas IH-45 (North/South) – Dallas IH-635 (Loop) – Dallas IH-30 (East/West) – Dallas/Fort Worth IH-20 (East/West) – Dallas/Fort Worth IH-35W (North/South) – Fort Worth IH-820 (Loop) – Fort Worth

Various U.S. & state highways also serve the Dallas/Fort Worth Metroplex. Dallas

US-67 – (Northeast/Southwest) merges with IH-30 in downtown area US-75 – (North) from downtown area US-77 – (North/South) follows IH-35E SH-180 - (East/West) South of IH-30

Dallas/Fort Worth SH-183 - (East/West)between Dallas & Fort Worth(access to South end of DFW International Airport) SH-114 - (East/West)between Dallas & Grapevine (access to North end of DFW International Airport) SH-360 – (North/South) between Dallas and Forth Worth

Fort Worth US-377 – (Northeast/Southwest) US-287 – (Northwest/Southeast) SH-26 – (North) from SH-183 SH-121 – (North) from SH-183 SH-199 – Northwest from downtown area

CLIMATE - DFW

The Dallas-Fort Worth climate is humid subtropical with hot summers. There is a wide range of annual temperature and precipitation varies from less than 20 to 50 inches. Mild winters have sudden drop in temperature when northers occur a few times a month. Brief intervals of severe cold temperatures due to sudden drops in temperature occur periodically when northers come through. The average last occurrence of 32°F or below is mid March and the average first occurrence of 32°F or below is in late November. Windstorms occurring during thunderstorm activity are sometimes destructive and snowfall is rare. The average length of the warm season (freeze-free period) in the Dallas-Fort Worth Metroplex is about 249 days. Summer daytime temperatures frequently approach and exceed 100°F. Air conditioners are recommended for maximum comfort indoors and while traveling via automobile. Periods of rainy weather last for only a day or two, and are followed by several days with fair skies. Thunderstorms occur throughout the year, but are most frequent in the spring. Hail falls on about two or three days a year, ordinarily with only slight and scattered damage. PUBLIC TRANSPORTATION

The Dallas Area Rapid Transit authority (or DART) is the transit agency in the city of Dallas that operates buses, light rail (including an underground station), commuter rail, and HOV (High-occupancy vehicle) lanes in Dallas and 12 of its suburbs. As of 2005, DART provides a network covering 700 square miles in Dallas, 13 surrounding suburban communities and serves 2.1 million passengers. There are 687 buses, 95 light rail cars, 6 locomotives, 100 lift-equipped vans, and 77 sedans in service for DART. The Fort Worth Transportation Authority (or T) is the operator of the bus system of the city of Fort Worth. The T partners with DART through the Trinity Railway Express (TRE) to offer commuter rail service between Fort Worth, DFW International airport and downtown Dallas. The T has 36 bus routes and offers vanpool/carpool service to groups of at least seven people who can share the cost of getting to and from work. Greyhound Lines is the largest North American provider of intercity bus transportation, serving more than 3,100 destinations with 16,000 daily departures across North America. As of 2005, Dallas is the seventh busiest terminal based on total number of customers. Dallas/Fort Worth International Airport (DFW) is the busiest airport in Texas, the third busiest airport in the world in terms of aircraft movement, and sixth busiest airport in terms of passenger traffic with 59,064,360 passengers in 2005. DFW Airport is the largest airport in Texas in terms of land area with almost 18,000 acres, the second largest in the United States, and fourth largest in the world. Dallas/Fort Worth International Airport has five terminals and could one day accommodate up to thirteen. The DFW Airport serves 129 domestic and 36 international destinations. Dallas/Fort Worth International Airport is the largest hub for American Airlines and American Eagle. Dallas/Fort Worth International Airport handles sixty percent of all air cargo in Texas. DFW Airport is within a four-hour flight time of 95% of U.S. population. DFW has an annual impact on the North Texas economy of over $14.3 billion and supports nearly 268,500 jobs. Dallas Love Field (DAL) is a public airport located five miles northwest of the central business district of Dallas. The airport has three runways and the land area is approximately 1,300 acres. Love Field is a secondary airport since the completion of Dallas/Fort Worth International Airport in 1974. DAL is primarily served by Southwest Air Lines, a low-fair airline. The Wright Amendment of 1979 governed the air traffic at DAL and limited most nonstop flights to Texas and neighboring states. In June 2006, a law repealing the Wright Amendment was established. Dallas Love Field is also home a number of charter flight companies. Fort Worth Meacham International Airport (Meacham Field) is an airport in the city of Fort Worth near the downtown business district. Meacham Field is used for corporate aircraft, commuter flights and student pilot training. It has three runways, two parallel and a crosswind runway.

Fort Worth Alliance Airport (AFW) is located 14 miles north of Fort Worth. AFW is the world’s first purely industrial airport. The airport is owned by the City of Fort Worth and managed by Alliance Air Services. AFW covers almost 1200 acres and has two runways. POPULATION

The Dallas/Fort Worth Consolidated Metropolitan Statistical Area (CMSA) in north central Texas is embodies a couple of Metropolitan Statistical Areas (MSA). The Dallas Metropolitan Statistical Area contains six counties (Dallas, Denton, Collin, Rockwall, Kaufman, and Ellis).

Dallas Metropolitan Statistical Area Population by County

1970

Percent Change 1970 to 1980 1980




Percent Change 2005 to 2006 Est. 2006

Dallas 1,327,696 17.23% 1,556,419 19.04% 1,852,810 19.76% 2,218,899 6.31% 2,358,850 1.04% 2,383,300Denton 75,633 89.24% 143,126 91.28% 273,775 58.49% 433,897 29.11% 560,200 3.27% 578,500Collin 66,920 116.04% 144,576 82.63% 264,036 86.22% 491,675 32.81% 653,000 5.74% 690,500Rockwall 7,046 106.19% 14,528 76.24% 25,604 68.25% 43,080 46.12% 62,950 9.29% 68,800Kaufman 32,392 20.45% 39,015 33.85% 52,220 36.56% 71,313 29.85% 92,600 3.29% 95,650Ellis 46,638 28.10% 59,743 42.56% 85,167 30.75% 111,360 20.29% 133,950 3.14% 138,150

The Fort Worth Metropolitan Statistical Area contains three counties (Tarrant, Parker and Johnson).

Fort Worth Metropolitan Statistical Area Population by County

1970





Percent Change 2005 to 2006 Est. 2006

Tarrant 715,587 20.30% 860,880 35.92% 1,170,103 23.60% 1,446,219 13.60% 1,642,950 3.61% 1,702,250Johnson 45,769 47.81% 67,649 43.63% 97,165 31.52% 127,793 16.99% 149,500 2.37% 153,050Parker 33,888 31.64% 44,609 45.23% 64,785 36.60% 88,495 21.81% 107,800 3.90% 112,000

EMPLOYMENT

Texas is a right-to-work state with approximately 6.3 percent of all workers covered by union or similar employee contracts in 2004. Dallas/Fort Worth has 5.3% of the unionized workers. Texas is #1 state and DFW is the #2 metro for relocations in 2005. In the North Central Texas region, there are 1,294 companies with 250 or more employees combined to employ 896,607 persons.

North Central Texas Top 10 Employers

Rank Name City Employees Industry 1 LOCKHEED MARTIN CORP FORT WORTH 16,000 MANUFACTURING 2 AMERICAN AIRLINES/AMR DFW AIRPORT 12,000 TRANSPORTATION 3 TEXAS INSTRUMENTS HQ DALLAS 11,300 MANUFACTURING 4 UNIVERSITY OF NORTH TEXAS DENTON 7,400 EDUCATION 5 PARKLAND MEMORIAL HOSPITAL DALLAS 6,857 HEALTH CARE 6 UT SOUTHWESTERN MED CENTER DALLAS 6,000 HEALTH CARE 7 NAS FORT WORTH JOINT RESERVE BASE FORT WORTH 5,361 PUBLIC ADMINISTRATION 8 COMPUCOM CAMPUS DALLAS 5,300 WHOLESALE 9 BAYLOR UNIVERSITY MEDICAL CENTER DALLAS 5,225 HEALTH CARE 10 CITIGROUP IRVING 5,000 FINANCE

HOUSEHOLD UNITS AND SIZE

Income The state of Texas has no personal or corporate income tax and no state property or unitary tax. The median income for a household in the city was $37,628 and the median income for a family was $40,921. Males had a median income of $31,149 versus $28,235 for females. The per capita income for the city was $22,183.

Real Estate The median price for a house was $123,800 in 2006. There has been a steady increase in the cost of homes over the past six years.

Income Per Capita Comparison State of Texas Dallas MSA

Year Income/Capita % Change Income/Capita % Change 2001 $ 27,796 $ 33,993 2002 $ 28,076 1.0% $ 34,456 1.4% 2003 $ 27,365 -2.5% $ 36,165 5.0% 2004 $ 29,477 7.7% $ 37,953 4.9%

Historical

2005 $ 30,559 3.7% $ 39,837 5.0% Current 2006 $ 31,479 3.0% $ 41,189 3.4%

2007 $ 32,381 2.9% $ 42,478 3.1% 2008 $ 33,205 2.5% $ 43,702 2.9% 2009 $ 33,962 2.3% $ 44,778 2.5% 2010 $ 34,693 2.2% $ 45,764 2.2%

Projected

2011 $ 35,353 1.9% $ 46,767 2.2%

Education According to the Census Bureau, 2.9 million residents in DFW hold high school diplomas and more than 1.3 million have completed at least four years of college. Two Education Service Regions serve DFW and surrounding counties with more than 1800 schools in 205 Independent School Districts (ISDs) enrolling over 1 million students in 2004-2005. Over 240 accredited schools (private and parochial) in Dallas/Fort Worth Metroplex are enrolling more than 90,000 primary and secondary students. The DFW area is home to five community college districts, several of which offer multiple campuses, enrolling 130,514 students. Dallas/Fort Worth enrollment in both public and private 4-year institutions is 149,758.

Largest School Districts 2004-2005 Enrollment

1. Dallas ISD 158,027 students2. Fort Worth ISD 79,769 students3. Arlington ISD 62,267 students4. Garland ISD 56,236 students5. Plano ISD 52,406 students6. Lewisville ISD 45,527 students7. Mesquite ISD 34,815 students8. Richardson ISD 34,139 students9. Irving ISD 31,917 students10. Carrollton-Farmers Branch ISD 25,860 students

Fastest-Growing School Districts

1999-2000 to 2004-05 Enrollment Change 1. Frisco ISD 188.60%2. Little Elm ISD 141.60%3. Argyle ISD 87.20%4. Wylie ISD 80.60%5. Forney ISD 78.20%6. Prosper ISD 76.10%7. Mansfield ISD 71.50%8. Melissa ISD 66.80%9. McKinney ISD 64.50%10. Lovejoy ISD 58.70%

GOVERNMENT

The City of Dallas has a mayor/city council system of government, and is split into 14 different council districts. The current structure operates as a mayor-council government. The city’s total budget for the fiscal year 2006-2007 was $2,344,314,114. This has been a steady increase over the last several years.

UTILITIES

Water supply is maintained by Dallas Water Utilities, which runs many waste treatment plants. TXU Electric Delivery (parent company TXU) is a main provider of electricity. The Sanitation Services department of the City of Dallas provides garbage pickup and recycling service. Many companies offer telephone networks, broadband Internet and cable/television services. RECREATION

The City of Dallas maintains 406 parks on 21,000 acres of land. There are 17 lakes spanning 4,400 acres that are contained with the parks. There are 47 community and neighborhood recreation centers that offer an assortment of activities such as sports fields, swimming pools, playgrounds, basketball courts, volleyball courts, tennis courts, picnic areas, gold courses, driving ranges and athletic fields. The City of Dallas is home to the first and largest zoo in the state of Texas, the Dallas Zoo with 95 acres. Six Flags Over Texas is the largest theme park in the country and is located west of Dallas in Arlington. Hurricane Harbor is the largest water park and also located in Arlington. The American Airlines Center located adjacent to downtown Dallas is home to the Dallas Desperados, (Arena Football League), Dallas Mavericks (National Basketball Association) and the Dallas Stars (National Hockey League). The Dallas Cowboys play at Texas Stadium located in Irving, TX and the Texas Rangers play at the Ballpark in Arlington. TOURISM

DFW’s central US location is equally close to North America’s five largest business centers: New York, Chicago, Los Angeles, Mexico City and Toronto.

Dallas has several momentous events during the year. The annual State Fair of Texas held at Fair Park brings $350 million to the city’s economy with about 22 million people. This event includes the Red River Shootout game at the Cotton Bowl. Other events include Cinco de Mayo celebrations, Independence Day activities, Saint Patrick’s Day parades, Juneteenth festivities and the annual Halloween parade on Oak Lawn. HOSPITAL

There are many medical research facilities and hospital within the City of Dallas. One of the major research centers is UT Southwestern Medical Center and UT Southwestern Medical School that includes Parkland Memorial Hospital and Children’s Medical Center Dallas. Other hospitals located in different areas throughout Dallas include Baylor University Medical Center, Central Methodist Hospital, Charlton Methodist Hospital, Medical City Dallas, Presbyterian Hospital and the Texas Scottish Rite Hospital for Children. The Dallas Veterans Affairs Medical Center, a VA hospital, is in south Dallas. The Consolidated Mail Outpatient Pharmacy, a new initiative by the Department of Veteran Affairs to provide mail order prescriptions.

SURROUNDING AREA ANALYSIS

Location – Dallas The subject property is located in the northwest portion of the City of Dallas. This area is located within a quadrant that is bounded by SH-183 on the North, IH-30 on the South, Dallas North Tollay/IH-35E on the East and Tarrant County Line on the West. Dallas is the ninth largest city in the nation and the third largest in the state of Texas. Dallas is in the midst of the fastest growing metropolitan area in the United States and headquarters to 22 Fortune 500 companies.

DEMOGRAPHIC PROFILE

Demographic Factors 5 Mile Radius Population # of Households Median Income

1990 203,319 76,304 $ 26,957 2000 246,919 84,940 $ 39,133 2005 260,456 83,229 $ 42,441

2010 (proj.) 271,221 80,432 $ 47,354 As of Census 2000, there were 1,188,580 people, 451,833 households, and 266,581 families residing in the city. The population density was 3,469.9 people per square mile. The racial makeup of the city was 50.83%, 25.91% Black or African American, 0.54% Native American, 2.70% Asian, 0.05% Pacific Islander, 17.24% from other races and 2.72% from two or more races. Hispanics outnumbered African-Americans for the first time in the 2000 Census as the largest minority group in Dallas with 35.55% of the population. There were 451,833 households out of which 30.3% had children under the age of 18 living with them. 38.8% were married couples living together, 14.9% had a female householder with no husband present, and 41.0% are classified as non-families by the United States Census Bureau. The average size of a household was 2.58 and the average family size was 3.37.

PROPERTY ANALYSIS

Land Description Analysis Location The property is located Southwest side of Directors Row, Southeast of Regal Row. Land Area The following table summarizes the subject’s land area. The source of the land area is the survey provided.

Land Area Summary Tax Id Sf Acres

7724 48,896 1.123 Shape and Dimension The site is rectangular in shape, with dimensions of approximately 200 ft in with and 80 ft in depth. Site utility base on shape and dimensions is average.

Topography The site is level. The topography does not result in any particular development limitations. Drainage No particular drainage problems were observed or disclosed at the time of field inspection. This appraisal assumes that surface water Collection, both on-site and in public streets adjacent to the subject, is adequate.

Flood Hazard Status The following table provides flood hazard information:

Flood hazard status

Community panel Number 1611111515156

Date August 23 2001

Zone X

Description FEMA Zone X: Area Determined to be outside the 500 YearFloodPlain.

Environmental Hazards

The concrete on the site appears to be discolored in the in the photographs. The potential exists for impacted soil to exist in areas of historical staining on the property. However based on the use of the site as mix of several large trucks and cars are visible on the subject property on the tenants and commercial facility, the stains are probably oil, diesel, or radiator coolant which has leaked from trucks. Because of the concrete the materials likely have not significantly impacted the underlying soils, and therefore would not present a significant concern. Based on this we are not recommending an investigation of potential impacts of the site from this source.

Ground Stability

Soils report was not provided for our review. Based on our inspection of the subject and observation of nearby sites, there are no apparent ground stability problems. However, we are not experts in soils analysis. We assume that the subject’s soil bearing capacity is sufficient to support the existing improvements. Streets Access and Frontage

Details pertaining to street access and frontage are provided in the following table.

Street, Access and Frontage Streets Ambassador

Frontage Feet 150 Paving Asphalt Curbs Yes Sidewalks No Lanes Two Direction of traffic Northwest/Southwest Condition Average Traffic Levels Low Signals/ traffic control Stop signs at Profit Access/Curb Cuts One Visibility Average

Utilities The availability of utilities to the subject property is summarized in the following table.

Utilities

Service Provider Water Sewer Electricity NaturalGas Local Phone

City of Dallas City of Dallas, TXU, others Atmos Energy Southwestern Bell

Zoning The Subject is zone IR, Industrial research, by City of Dallas. The IR zone is intended to provide for a variety of commercial industrial uses. Specific zoning requirements are summarized in the following table:

Zoning Summary

Zoning Jurisdiction Zoning Designation Description Legally Conforming? Zoning change Likely? Permitted Uses

City of Dallas IR Industrial Research Yes No Industrial and Manufacturing

Category Zoning Requirements

Minimum Lot Area Minimum Front setback Maximum building Height Maximum site coverage Maximum Floor Area Ratio Parking Requirement Source: City of Dallas

None 150 30 feet where adjacent to or directly across an alley from a residential or multifamily district; none otherwise. However, if a rear or side yard is provided, it must be a minimum of 10 feet. 200 feet 80% 2.0 1 space per 500 square feet of building Area (140 required /167 provided

According to the local planning department, there are no pending or prospective zoning changes. It appears that the current use of the site is a legal and conforming use.

Other Land Use Regulations We are not aware of any other land uses that would affect the property.

Easements, Encroachments and Restrictions

We are not provided a current title report to review. We are not aware of any easements, encumbrances, or restrictions that would adversely affect value. Our valuation assumes no adverse easements, Encroachments or restrictions and that the subject has a clear and marketable title. Conclusion of Site Analysis

Overall the physical characteristics of the site and the availability of utilities suitable for a variety of uses including those permitted by zoning. Uses permitted by zoning include industrial and manufacturing. There are no other particular restrictions of development noted in the analysis.

Improvement Description and Analysis Overview

The subject is an existing industrial property containing 16,000 square feet of rentable area. The improvements were constructed in 1985 and are 100 % leased as of the effective appraisal date. The site area is 1.123 acres, or 48,896 square feet. The following description is based on our inspection of the property and discussions with ownership.

Improvements Description

Name of Property General Property Type Property Sub type Occupancy Percent Leased Tenant Size Range (SF) Number of Tenants

8901 Directors Row Industrial Warehouse Single tenant 100.0 % 16000 1

Number of buildings Stories Building Shape Construction Class Construction Type Construction Quality Condition

1 1 Rectangular C Masonry Average Average

Gross Building Area (SF) Rentable Area Percent Office Space Building Efficiency Ratio Land Area Ratio (SF) Floor Area Ratio (RA/Land SF) Floor Area Ratio (GBA/Land SF) Building Area Source

16000 5000 30% 100.0% 48,896 2.0 0.75 Lease

Year built Actual Age (Yrs.) Estimated Effective Age (Yrs.) Estimated Economic Life ((Yrs.) Remaining Economic Life (Yrs.)

1960 46 35 45 29

Number of Parking Spaces Source of parking count Parking Type Parking Spaces /1000 SF GBA Landscaping Special Features

13 Site plan Concrete 2.38 Minimal 2/2 dock high/floor level

CONSTRUCTION DETAILS

Foundation Basement Structural Frame Exterior Walls Windows Roof

Reinforced Concrete Slab None Frame is wood above ceiling with basic shoehorn layout Block on block interior/ brick exterior Insulated, aluminum framed glass in office areas Built up tar and gravel and rubber membrane

Ceiling Height Dock height Loading doors

16 2/grade level 2/high doors with levelers.

Interior Finishes Floors Walls Ceiling Lighting

Exposed treated concrete for warehouse areas with vinyl and/or carpeting in offices Painted masonry in warehouse. Painted drywall with variations to tenant specifications in office area Exposed in warehouse area, 2’4 acoustic tile in office area Suspended and recessed florescent and incandescent lighting to tenant specifications.

HVAC Electrical Plumbing Elevators Rests Rooms Sprinklers Fence

30% office, HVAC/ gas heat, 70% warehouse ceiling Heat units (2) 1 closet dead storage Adequate and to City code None 1.5 none 8 ft across east/rear and n/w perimeters.

Occupancy Status The property is100% leased to a total of 1 tenant

Improvements Analysis Quality and conditions

The improvements are of average quality construction and are in average condition. The quality of the subject is considered to be consistent with that of competing properties, and maintenance appears to have been consistent with that of competing properties. Overall, the market appeal of the subject is consistent with that of competing properties. Functional Utility The improvements appear to be adequately suited to their current use. The subject offers an adequate site layout, overhead doors and clear ceiling height to accommodate a variety of flex/warehouse space tenants. Based on our inspection and consideration of the foregoing, there do not appear to be any significant items of functional obsolescence. Deferred maintenance No deferred maintenance is apparent from our inspection and none is identified based on the budget provided and discussions with management. ADA Compliance Based on our inspection and performance provided there do not appear to be any ADA issues. However, we are not experts in ADA matters and Further study would be recommended to assess ADA compliance. Hazardous Substance A phase I environmental report was prepared for the subject by Dames & Moore Group, Dated January 13, 1998. Dames & Moore revealed a potential Recognized Environmental Condition in connection with the property as described below: The concrete on the site appears to be discolored in the in the photographs. The potential exists for impacted soil to exist in areas of historical staining on the property. However based on the use of the site as mix of several large trucks and cars are visible on the subject property on the tenants and commercial facility, the stains are probably oil, diesel, or radiator coolant which has leaked from trucks. Because of the concrete the materials likely have not significantly impacted the underlying soils, and therefore would not present a significant concern. Based on this we are not recommending an investigation of potential impacts of the site from this source.

Personal Property There are non-reality items that would be significant to overall valuation. Conclusion of Improvement Analysis In comparison to other competitive properties in the region, the subject improvements are rated as follows:

IMPROVEMENTS RATINGS

VISIBILITY DESIGN AND APPEARANCE AGE/CONDITION % OFFICE LOADING DOCKS CLEAR CEILING HEIGHTS

Average Average Average Average Average

Overall the quality of, condition, and functional utility of the improvements are typical for their age and location.

REAL ESTATE TAX ANALYSIS

The assessed value of the subject property is determined by the Dallas County Appraisal District and is estimated by jurisdiction on a county basis for the subject. The commercial account # is 77923. Real estate taxes in this state and this jurisdiction represent ad valorem taxes, meaning a tax applied in proportion to value. The real estate taxes for an individual property may be determined by dividing the assessed value for a property by $100, then multiplying the estimate by the composite rate. The composite rate is based on the tax rates of the local taxing districts for this market area and is shown below in the following table.

Taxing Entity 2006 2005 2004 2003 2002

City of Dallas .7292 .7417 .7197 .6998 .6998 Dallas ISD 1.50264 1.68836 1.6694 1.6395 1.58753

Dallas County .553934 .5548 .54366 .54116 .5155 Dallas Community College

.081 .0816 .0803 .0778 .06

Parkland Hospital .254 .254 .254 .254 .254 Total Tax Rate 3.120774 3.32046 3.26386 3.21226 3.11683 Annual Change 6.4% -1.704% -1.58% -2.97%

The 2006 assessed value for the subject property is $480,000, divided by 100, then multiplied by the

composite rate of $3.120774 per $100 of valuation for a total of $14,979.72 which reflects $0.94 per square foot of Rentable Area.

The historical assessments of the subject are presented below.

Year Improvement Land Total Market Homestead Capped

2006 $333,310 $146,690 $480,000 N/A

2005 $229,800 $135,000 $364,800 N/A

2004 $229,800 $135,000 $364,800 N/A

2003 $229,800 $135,000 $364,800 N/A

2002 $215,000 $135,000 $350,000 N/A

2001 $215,000 $135,000 $350,000 N/A

2000 $215,000 $135,000 $350,000 N/A

1999 $303,170 $135,000 $438,170 N/A

In order to thoroughly analyze the appropriate real estate tax expense associated with the subject, we surveyed and compared several competitive warehouse properties, summarized below:

Tax assessments for comparable properties range from $23.46 to $30.00 per square foot, as compared with the subject of $30 per square foot. On balance, the subject seems to be under assessed. We anticipate if the subject were to sell the assessment could increased substantially. The governor of Texas, Rick Perry, signed a bill (HB 1) into law on May 12, 2006 which decreased school taxes in the State of Texas by $0.17 for 2007 and $0.33 for 2008. However, schools maybe permitted to add an additional of $0.04 enrichment tax, which creates a net $0.13 potential school tax reduction in 2007 and $0.29 in 2008.

Property Address Preliminary Assessed Value

SF per TAD

Assessed Value / SF

Total Taxes Taxes/SF

Brook hollow Industrial Park

8516 Directors Row $301,500 10,050 $30.00 $8,999.35 $0.895

Brook Hollow 535 Regal Row $735,000 31,335 $23.46 $21,938.72 $0.70

Brook Hollow 7800 Sovereign Row $715,000 25,544 $27.99 $21,345.71 $0.835 Brook Hollow 7300 Ambassador Row $561,420 18,714 $30.00 $16,757.60 $0.895

Subject 8901 Directors Row $480,000 16,000 $30.00 $14,979.72 $0.837

Highest and Best Use Analysis

Process A subject property must be analyzed as if vacant and as improved in order to prepare an assessment of highest and best use. The highest and best use of a subject property must be:

• Physically possible • Legally permissible • Financially feasible • Maximally productive

Highest and Best Use as if Vacant Physically Possible The existing aspects of the subject property do not seem to establish abnormal limitations on development. In general, the physical characteristics of the property and the possibility of utilities result in practical utility suitable for an assortment of uses.

Legally Permissible There are no legal restrictions such as easements or deed restrictions that would limit the use of the property. The property area is zoned IR (Industrial Research), which allows for industrial, manufacturing, wholesale distribution and storage uses. Based on the current land use pattern, industrial uses are given more consideration in determining highest and best use of land. Financially Feasible There is sufficient demand of industrial use in the vicinity of the subject area. The industrial use of the property is thought to be financially feasible. Given anticipated population and employment growth in the subject’s area, we expect rents and improved property values to increase to a level at which industrial use would be financially feasible in the future.

Maximally Productive There is not another probable use of the land perceived that would create a higher land value than industrial use. The industrial use that is allowed by zoning laws is the maximally productive use of the property.

Conclusion The highest and best use of the property would be development of the site for industrial use.

Improved The subject property is developed with an industrial type building but currently vacant.

The subject property would exceed its value, as if vacant, with the existing improvements. Therefore, this subject property would be maximally productive and at its highest and best use as improved.

Based on our analysis, there does not appear to be any alternative use that could reasonably be expected to provide a higher present value than the current use, and the value of the existing improved property exceeds the value of the site, as if vacant. For these reasons, continued industrial use is concluded to be maximally productive, and the highest and best use of the property as improved.

Most Probable Buyer Based on the characteristics of the property, the most probable buyer would be a regional investor.

VALUATION ANALYSIS Valuation Methodology Appraisers usually consider the use of the three approaches to value when developing a market value opinion for real property. These are the cost approach, sales comparison approach, and income capitalization approach. The sales comparison approach assumes that an informed purchaser would pay no more for a property than the cost of acquiring another existing property with the same utility. This approach is especially appropriate when an active market provides sufficient reliable data. The sales comparison approach is less reliable in an inactive market, or when estimating the value of properties for which no directly comparable sales data is available. The sales comparison approach is often relied upon for owner-user properties. The cost approach assumes that the informed purchaser would pay no more than he cost of producing a substitute property with the same utility. This approach is particularly applicable when the improvements being appraised are relatively new and represent the highest and best use of the land, or when the property has unique or specialized improvements for which there is little or no sales data from comparable properties. The income capitalization approach reflects the market’s perception of a relationship between a property’s potential income and its market value. This approach converts the anticipated net income from ownership of a property into a value indication through capitalization. The primary methods are direct capitalization and discount cash flow analysis, with one or both methods applied, as appropriate. This approach is widely used in appraising income-producing properties. Reconciliation of the various indications into a conclusion of value is based on an evaluation of the quantity of available data in each approach and the applicability of each approach to the property type.

Sale Comparison Approach

The sales comparison approach develops an indication of value by comparing the subject to sales of similar properties. The steps taken to apply the sales comparison approach are: • Identify property sales; • Research and assemble pertinent data for the most relevant sales; • Analyze the sales for material differences compared with the subject; • Reconcile the analysis of the sales into a value indication for the subject.

Our search for comparable sales focused on transactions most relevant to the subject in terms of property type, size, location, age, quality, and transaction date. For this analysis, we use price per square foot of rentable area as the appropriate unit of comparison because market participants typically compare sale prices and property values on this basis. The sales considered most relevant are summarized in the following table.

Summary of comparable improved sales No. Name address

Sales date

Yr. built; # Stories % Occ

Acres; FAR; Parking ratio

Clear height; % Office; Prop Rights

Sales Price

Rentable

SF

$/Rentable

SF

Cap rate

Rory E. Sterling 535 regal Dallas TX 75247

May-05 1959 1 100%

1.242 .47 3.52/1,000

16’ 10% Leased Fee

$700,000 25,575

27.37 10%

Bunzl USA 7800 sovereign row Dallas TX 75247

Jan- 05

1956 1 100%

1.24 .47 n/a

16 18% Leased Fee

$725,000

25,544 28.38 7.2%

Group 701 LLC. 7300 Ambassador row Dallas TX 75247

Feb 05

1975 1 100%

1.80 .24 2.31/1000

14 39% Leased Fee

$560,000 18,714

29.92 5.7%

7300 Ambassador Row

535 Regal Row

7800 Sovereign Row

Comparative Properties Locations

Subject Comparable 1 Comparable 2 Comparable 3 Address City State Sale Date Sale Price Rentable Area Year Built % Office % HVAC Ceiling Height

8901 Directors row Dallas Texas

480,000

16,000 1960 30% 70% 18’

535 regal row Dallas

TX May-05 700,000

25,575 1959 10% 10% 16’

7800 Sovereign Dallas

TX Jan-05

725,000 25,544

1956 18% 18% 16’

7300 Ambassador row Dallas

TX Feb-05

560,000 18,714

1975 40% 40% 14’

Price per SF of rentable area 27.37 28.38 29.92 Property rights

% Adjustment Leased fee

0% Leased fee

0% Leased fee

0% Financing Terms

% Adjustment Cash to seller

0% Cash to seller

0% Cash to seller

0% Conditions of Sales

% Adjustment

0%

0%

0% Market Conditions 9/30/2006 Annual % Adjustments 2%

May-05 3%

Jan-05 4%

Feb-05 4%

Cumulative Adjusted Price 28.19 29.51 31.11 Location

% Adjustment Similar

0% Similar

0% Similar

0% Access/Exposure


0% Similar

0% Similar

0% Size

% Adjustment Inferior

10% Inferior

10% Similar

0% Parking


0% Similar

0% Similar

0% Land to Building ratio


0% Similar

0% Similar

0% Building Quality % Adjustment

Similar 0%

Similar 0%

Similar 0%

Age condition % Adjustment

Similar 0%

Similar 0%

Similar 0%

Economic characteristics % Adjustment

Similar 0%

Similar 0%

Similar 0%

Office and HVAC area Inferior 15%

Inferior 10%

Similar 0%

Utility Characteristics % Adjustment

Similar 0%

Similar 0%

Inferior 5%

Net$ Adjustment Net % Adjustment

$7.04 25%

$5.00 20%

$1.55 5%

Final Adjusted Price Overall Adjustment

$35.23 28%

34.51 24%

32.66 9%

Range of Adjusted Prices Average Indicated Value

$32.66 - $35.23 $34.00 $34.00

Prior to adjustments the sales reflect a range of $27.37 to $29.92 per square foot. After adjustment, the adjusted range is $32.66 to $35.23 per square foot, with an average of $34.13 per square foot. To arrive at the indicated value, we place primary emphasis on sales 2 and 3 due to their minimal adjustments.

Value Indication Sales Comparison Approach

Adjustment Factors

The sales are compared to the subject and adjusted to account for material differences that affect value. Adjustments are considered for the following factors, in the sequence shown below.

ADJUSTMENT FACTORS

Effective Sales Price Accounts for atypical economics of transaction, such as excess land non reality components, Expenditures by the buyer at the time of purchase, or other similar factors. Usually applied directly to sale price on a lump sum basis

Real Property Rights Leased fee, Fee simple, leasehold, partial interest, etc

Financing Terms Seller Financing, or assumption of existing financing, at non market terms

Condition of Sales Extraordinary motivation of buyer or seller, such as 1031 exchanges transaction, assemblage, or forced sale.

Market Conditions Changes in the economic environment over time that affect the appreciation and depreciation of real estate.

Location Market or Submarket area influences on sale price; surrounding land use influences.

Access/ Exposure Convenience to transportation facilities; ease of site access; visibility from main thoroughfares; traffic counts.

Size Inverse relationship that often exists between building size and unit value.

Parking Ratio of parking area to land area; also known as floor area ratio (FAR)

Building to Land Area Ratio

Ratio of building area to land area; also known as floor area ratio(FAR)

Building Quality Construction Quality, amenities, market appeal, functional utility.

Age/Condition Effective Age/ Physical Condition

Economic Characteristics Non-stabilized occupancy, above below market rents, and other economic factors, Excludes differences in rent levels that are already considered in previous adjustments, such as for location or quality.

Issues requiring elaboration are addressed in the following paragraph.

Market Conditions

The sales took place from January 2005- May 2005. Market conditions have generally been strengthening over this period through the effective date of value. As a result we apply upward adjustments of 2% per year to account for this trend. Analysis and Adjustments of Sale The analysis and adjustment of comparable sales is discussed in the following paragraphs Location- The following chart illustrates the submarket occupancy rates and flex space rental rates of the comparables.

LOCATION ADJUSTMENT (FLEX SPACE)

Comp. Submarket Submarket Occupancy

Submarket Rental Rate

1-3 West Brook hollow 88% 4.00

Access/Exposure- Access and exposure characteristics of the comparables are similar to the subject with no adjustment required.

Size – all relatively were similar in size. Sale 1 and 2 were smaller in size and were adjusted upward. Sale 3 require no adjustment.

Parking-Each of the comparables had similar parking characteristics and no adjustment was necessary.

Land to building ratio- The subject has a land to building ratio of .38. The comparables have similar land to building ratios with no adjustment warranted.

Building quality- building quality of the comparables to subjects with no adjustments required.

Age/ condition- Each of the comparables was constructed from 1956-1984 and represent similar age/condition characteristics in comparison t the subject.

Economic characteristics- No adjustments for economic characteristics was warranted

Office and HVAC AREA- Sales 1 and 2 were inferior in office and HVAC area and were adjusted upward. Sales 3 required no adjustment.

Utility characteristics- The utility characteristics of comparable 3 (clear ceiling height and loading doors) were inferior similar to the subject and upward adjustment was warranted. Based on the preceding analysis, we arrive at a value indication by the sales comparison approach as follows:

Sales comparison approach Indicated value

Indicated value per SF Subject Square Feet Indicated Value Rounded

$34.00 16,000 $545,000 $545,000

Cost Approach

The cost approach develops an indication of value by estimating the cost to reproduce (or replace) a property, as if it were new, less any depreciation, plus the land value produces the estimate of market value. The steps taken to apply the cost approach are:

1. Estimate the land value assuming it is vacant and will be put to its highest and best use using comparable sales data.

2. Estimate the reproduction (or replacement) cost of the building including hard costs, soft costs,

and developers’ profit. There are three methods to do the cost estimation. • The methods are comparative unit, unit in place, and quantity survey. • Comparative unit- this is based on the dollar cost per unit of area or volume • Unit in place- this is based on using unit costs for various building components or

(building units). • Quantity survey- this method is the most detailed of the three methods. It breaks down

the individual materials and labor costs. The primary sources of building cost data is either from local professional builders or cost data services or published manuals such as the Marshall Valuation Service.

3. Estimate the accrued depreciation costs and deduct it from its reproduction (or replacement) cost. There are four techniques to use to depreciate a building. The techniques are the breakdown method and lump-sum age/life method.

• The breakdown method uses these three categories to identified depreciation and is attached in the financial information of the addenda.

o The first category is physical deterioration. Physical deterioration is the wear and tear over time which can be breakdown into curable or incurable.

o Curable is a deferred maintenance that can be an easy fix such as peeling paint. o The incurable has short lived and long lived life. The short lived incurable items

are things that need periodical replacement such as carpet. The long lived incurables are items such as the frame and foundation fixes.

o The second category is functional obsolescence. o Functional obsolescence is lost of property value due to the function of the

building such as poor design layout. o Functional obsolescence is break down into curable and incurable. o Curable functional obsolescence is subcategorized into deficiencies, defects, and

super adequacies. o Deficiencies are the lack of items or components such as no A/C in a house. o Defect is the items or components which are there but not enough of it is there

such as an outdated A/C. o Super adequacy is the excess of items or components such as a commercial A/C

in a house. o Incurable functional obsolescence depreciation value is determined by if the

costs of the item to be cured exceeding the resulting increase in the property’s value then it is incurable.

o The third category is external obsolescence. External obsolescence is something that is located off the subject property but affect the value of the subject property.

o External obsolescence divides into two subcategories which is locational or economic.

o Locational is something near your neighborhood such as a sewer treatment plant built in the neighborhood. Economic is like mortgage rates going up or value of house sale price going down.

• The age/ life method to estimate accrued depreciation using lump sum based on a ratio of the property’s age to its economic life. The formula is:

Accrued depreciation = (Effective age/Economic life) x reproduction cost new 4. Add the estimated land value to the depreciated cost of the improvements and building to arrive at

the estimate of the property’s market value. LAND VALUE ANALYSIS

The first step of the cost approach is to develop an opinion of the subject’s land value. To accomplish this, we analyze four sales of vacant land parcels on a price per square foot basis. The sales took place between March 2001 and January 2004, and reflect a range of unadjusted unit prices of $0.69 to $4.32 per square foot, summarized as follows:

subject 1 2 3 4 LOCATION 8901 Directors

Row Hansboro Ave.

Sea Harbor Rd. Gardner Rd. Wildlife Blvd.

CITY Dallas Dallas Dallas Dallas Grand Prairie STATE TX TX TX TX TX DATE OF SALE N/A 1/9/2004 4/10/2001 3/14/2001 8/14/2002 SALE PRICE N/A $79,087 $203,500 $250,000 $90,000 CASH EQUIV/AMT N/A $79,087 $203,500 $250,000 $90,000 LAND SIZE (SF) 48,896 79,088 155,104 57,935 130,680 LAND SIZE (ACRES) 1.123 1.82 3.56 1.33 3 ZONING IR LI IR IR PD-39 TOPOGRAPHY level level level level level PRICE PER SQ FT $1.00 $1.31 $4.32 $0.69 Time/Market condition %adjustments 8% 0% 12% 0% TIME ADJ PRICE PER SQ FT

$1.08 $1.31 $4.83 $0.69

Location %amount 0.00% 0.00% -25.00% 5.00% Site Size %adjustment 7.00% 15.00% 5.00% 12.00% Availability of Utilities dollar amt. $0.00 $0.00 $0.00 $0.00 Net Percent Adjustment 7.00% 15.00% -20.00% 17.00% Adjusted Price $1.16 $1.51 $3.87 $0.81

SUMMARY OF COMPARABLE LAND SALES

No.1 Address Sale Date Sale Price Square Feet

Price per SF

1 Hansboro Ave. Dallas, TX 75233 1/9/2004 $79,087 79,088 $1.00

2 10127 Gardner Rd. Dallas, TX 75220 3/14/2001 $250,000 57,935 $4.32

3 652 Wildlife Blvd. Grand Prairie, TX 75050 8/14/2002 $90,000 130,680 $0.69

4 Sea Harbor Rd. Dallas, TX 75212 4/10/2001 $203,500 155,104 $1.31

Subject 8901 Directors Row Dallas, TX 75247 48,896

We compare each sale to the subject and adjust its unit price to compensate for all significant differences that affect value. Size adjustments were required to all sales. Based on this analysis, the sales provide a range of values from $0.81 to $3.87 per square foot with an average of $1.84 per SF. Placing more weight on Comparable No. 2 as it is requiring minimal adjustment, with consideration of Comparable No. 1, it is our opinion that the applicable unit value is $1.33 per square foot. This results in an indicated land value as follows:

…..INDICATED LAND VALUE….. 48,896 SQ FT @ $1.33 PER SQ FT = $65,032

ROUNDED TO: $65,000

Analysis and Adjustment of Sales

Our rating of each comparable sale in relation to the subject is the basis for the adjustments. If the comparable is superior to the subject, its sales price is adjusted downward to reflect subject’s relative inferiority; if the comparable is inferior, its prices are adjusted upward. The elements of comparison are:

Time- Market Conditions

Real estate values normally change over time. The rate of this change fluctuates due to investors’ perceptions of prevailing market conditions. This adjustment category reflects value changes, if any, that have occurred between the date of sale and the effective date of the appraisal. According to the market, commercial land has an annual appreciation rate of 4% and it has been applied to the comparables 1 and 3. Sale comparables 2 and 4 were not on the market.

Location

Location has a great impact on property values. This adjustment category considers general market influences as well as a property’s accessibility and visibility from a main thoroughfare. Land Sale 4 is located in Grand Prairie with limited access when compared to the subject. A positive adjustment of 5% was made. Land Sale 3 has better access when compared to subject property therefore a negative adjustment of 25% was made.

Physical Characteristics

This adjustment category generally reflects difference such as site size and availability of utilities.

Utilities

This adjustment category generally addresses any differences between available utilities. For this analysis, all sales are similar to the subject and no adjustments were made.

Site Size

This adjustment addresses the differences between the sizes of the land. As square footage increases, $/SF will go downward. All comparables has a positive adjustment because the comparables has more square footage than the subject property.

COST ESTIMATION

We estimate the replacement cost new of the subject’s improvements using Marshall Valuation Service (“MVS”). MVS includes all direct costs as well as some – but not all – indirect costs. For this reason, we add a 24% allowance for additional indirect costs over and above those included in MVS and an allowance for entrepreneurial incentive. As shown in the calculations below, we estimate the total replacement cost new of the improvements to be $871,819.

Replacement Cost Estimate MARSHALL VALUATION SERVICE BASE COST $38.15 SECTION 14 PAGE 6 CLASS C

TYPE Distribution

building Quality Average Current Cost Multiplier 1.05 Year Built 1960 Local Cost Multiplier .90 Effective Age 30 Economic Life 45 Actual Age 46 ADJUSTED BASE COST $36.05 DIRECT COSTS BUILDING IMPROVEMENTS Distribution Building 16,000 SF @ $36.05 = $576,800 Site Improvements Parking 38,080 SF @ $3.25 = $ 123,760 Fenced 150 linear ft @ $16.80 $2,520 TOTAL DIRECT COSTS $703,080 Overall Property Replacement Cost New- Building Improvements $576,800 Replacement Cost New- Site Improvements $ 126,280 Subtotal Replacement Cost New $703,080 Indirect Costs and Entrepreneurial profit (24%) $168,739 Total Cost New $871,819

To estimate accrued depreciation for the subject, we make no deductions for deferred maintenance. Utilizing the age-life method, we estimate accrued depreciation for building improvement costs at 66.67% based on a 30-year effective age and a 45-year economic life. We use 66.67% depreciation for the site improvements, which have shorter lives and depreciate more rapidly. In our opinion, additional deductions for functional or external obsolescence are not necessary.

ESTIMATING ACCRUED DEPRECIATION

Combining the land value conclusion of $65,000 with the depreciated replacement cost of the improvements of $301,387, we arrive at an overall property value indication as follows:

Value Indication By Cost Approach

Replacement Cost New $871,819

Less Accrued Depreciation -$570,432

Depreciation Replacement Cost $301,387

Plus Land Value $65,000

Final Indicated Property Value $366,387

Rounded $400,000

BUILDING IMPROVEMENTS Replacement Cost New $ 576,800 Age/Life Depreciation 30/45= 66.67% - $ 384,533 Depreciated Replacement Cost $ 192,267 Replacement Cost New Improvement $ 126,280 Age/Life Depreciation 10/15= 66.67% -$84,191 Depreciated Replacement Cost $42,089 Overall Property Replacement Cost New- Building Improvements $871,819 Age/Life Depreciation -$570,432 Depreciated Replacement Cost $301,387

Income Capitalization Approach The income capitalization approach converts anticipated economic benefits of owning real property into a value estimate for a subject property through capitalization. • Analyze revenue potential • Consider appropriate allowances for vacancy, collection loss, and operating expenses • Calculate net operating income by deducting vacancy, collection loss, and operating expense from

potential income • Apply the most appropriate capitalization methods to convert anticipated net income to an indication of

value

Leased Status of the Property There is one current tenant that is leasing and occupying 100% of the subject property. The rental rate is $4.50 per square foot with 16,000 total square feet in the subject property. The monthly rent is $6,000 and annually $72,000. Expense Structure

The expenses of the subject property are divided between Owner and Tenant as detailed in table.

Subject Expense Structures Expense type Owner Tenant

Real Estate Taxes x Insurance x Utilities x Repairs x x Maintenance x General Administrative x Management x

Market Rent Analysis Contact rents usually determine income for leased space and market rent is the foundation for computing income for current vacant space and future theoretical re-leasing of space. It is important to compare current contract rent levels with market rent levels. To estimate market rent, we analyze comparable rentals most relevant to the subject in terms of location, building class, size, and transaction date. The subject property exist in the Brookhollow Industrial District that is composed of mainly older office warehouse properties.

Rent 1 – 3000 Irving Blvd.

Rent 2 – 4930 Cash Road

Rent 3 – 2959 Irving Blvd.

Rent 4 – 8740 Diplomacy Road

Rent 5 – 8617 Ambassador Row (photo – not available) Rental Analysis Factors

Market conditions – changes in the environment over time that affect the value of the land Location – influence of surrounding land use Access/Exposure – accessibility to transportation facilities; ease of site access Size – differences in rental price that is often dependent on size of space Building quality – construction quality Age/Condition – Effective age and/or physical condition Office and HVAC area – office space and a/c areas Utility characteristics – characteristics of the comparables

Analysis of Comparable Rentals

Location – location of comparables similar to subject property and no adjustment was necessary Access/Exposure – locations of comparables are in the same vicinity and all have access to the same roads, so no adjustment was necessary Size – adjustment to size was necessary due to differences in sizes of comparable properties to subject property Building Quality – comparables have similar building quality to subject property and no adjustment was necessary Age/Condition – comparable 1 and 3 were similar to subject property and no adjustment was necessary; Comparable 2, 4 and 5 were superior and a negative adjustment was required

Office/HVAC Areas – comparables had varying size of office space and HVAC area, adjustments were made accordingly Utility characteristic – comparables were similar to subject property and no adjustment was necessary

Analysis of Operating Expenses The following summarizes our analysis.

Capitalization Rate Selection A capitalization rate is used to convert net income into an indication of value. Selection of an appropriate capitalization rate considers the future income pattern of the property and investment risk associated with ownership. Analysis of Comparable Sales Capitalization rates from comparable sales are shown in the following table.

The capitalization range falls within the range of 5.7% to 10% for these sales with an average of 8.2%. National Investor Surveys Data from Korpacz, ACLI, and Viewpoint are summarized below in regards to investment grade properties.

INDUSTRIAL CAPITALIZATION RATE TRENDS

6.50

7.00

7.50

8.00

8.50

9.00

9.50

Quarter/Year

Rat

e

ACLI 8.20 8.50 8.30 7.70 8.40 7.90 8.00 8.00 8.00 7.40

WHSE 8.51 8.45 8.35 8.27 8.12 7.88 7.83 7.50 7.29 7.25 7.04

FLEX 9.19 9.02 8.81 8.77 8.76 8.69 8.63 8.39 8.08 8.13 8.08

4Q-03 1Q-04 2Q-04 3Q-04 4Q-04 1Q-05 2Q-05 3Q-05 4Q-05 1Q-06 2Q-06

The Korpacz survey shows capitalization rates for national flex warehouse markets fall into a range 6.25% to 10.0% with an average of 8.08%.

Band of Investment The band of investment derives a capitalization rate from the weighted average of the mortgage and equity demands on net income generated from the property. This method uses and estimate of standard financing terms and an estimate rate of return on equity capital. This should be sufficient to attract investors.

Capitalization Rate Conclusion Going-in Capitalization Rate 8.00% Direct Capitalization Analysis Net operating income is divided by the capitalization rate to indicate the stabilized value of the subject. Valuation of the subject by direct capitalization is shown below.

Reconciliation and Conclusion of Value Reconciliation involves the weighting of alternative value indications, based on the judged reliability and applicability of each approach to value, to arrive at a final value conclusion. Reconciliation is required because different value indications result from the use of multiple approaches and within the application of a single approach. The values indicated by our analyses are as follows:

SUMMARY OF VALUE INDICATIONS

Cost Approach $400,000 Sales Comparison Approach $545,000 Income Capitalization Approach $600,000 Reconciled $550,000

Cost Approach The cost approach is most reliable for newer properties that have no significant amount of accrued depreciation. As previously discussed, the Cost Approach is judged to be inapplicable but we will use it in our analysis. Sales Comparison Approach The sales comparison approach is most reliable in an active market when an adequate quantity and quality of comparable sales data are available. In addition, it is typically the most relevant method for owner-user properties, because it directly considers the prices of alternative properties with similar utility for which potential buyers would be competing. The analysis and adjustment of the sales provides a reasonably narrow range of value indications. Nonetheless, it does not directly account for the income characteristics of the subject. Therefore, this approach is providing support to the Income Capitalization Approach in the conclusion of the value. Income Capitalization Approach The income capitalization approach is usually given greatest weight when evaluating investment properties. The value indication from the income capitalization approach is supported by market data regarding income and expenses. An investor is the most likely purchaser of the appraised property, and a typical investor would place greatest reliance on the income capitalization approach. For these reasons, the income capitalization approach is given greatest weight in the conclusion of value. Final Value Estimate Based on the preceding valuation analysis, and subject to the definitions, assumptions, and limiting conditions expressed in the report, our opinion of value is as follows:

Value Conclusion

Appraised Premise Interest Appraised Date of Value Value Conclusion Prospective Market Value

Leased Fee September 20, 2006 $550,000

CERTIFICATION We certify that to the best of our knowledge and belief:

1. The statement of fact contained in this report is true and correct. 2. The statements of fact to this report analysis, opinions, and conclusions are limited only by the

reported assumptions and limiting conditions, and is our personal, impartial, and unbiased professional analysis, opinion, and conclusions.

3. We have no present or prospective interest in the property that is subject of this report and no personal interest with respect to the parties involved.

4. We have no bias with respect to the property that sis the subject of this report or the parties involved with these assignment.

5. Our engagement in this assignment was not contingent upon developing or reporting predetermined results.

6. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of subsequent event directly related to the intended use of this appraisal.

7. Our analysis, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, which includes the uniform Standard of Professional Appraisal Proactive) USPAP) and also in conformity with the appraisal regulations issued in connection with the Financial Institutions Reform, Recovery, and Enforcement Act of 1989(FIRREA).

8. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

9. Made a personal inspection of the property that is subject to this report. Has personally inspected the subject.

10. No one provided significant real property appraisal assistance to the person signing this certification.

11. This appraisal is not based on request minimum valuation, a specific valuation, or the approval of a loan.

12. we have not relied on unsupported conclusions relating to characteristics such as race, color religion national origin, gender, marital status, familial status, age, receipt of public assistance income, handicap or and unsupported conclusion that homogeneity of such characteristics is necessary to maximize value.

13. We have experienced in appraising properties similar to the subject and are in compliance with the Competency rule of USPAP.

14. As of the date of this report has completed the continuing education program of Appraisal institute.

General Assumptions and Limitations

This appraisal report has been made with the following assumptions and limiting conditions: 1. No responsibility is assumed for the legal description of for matters including legal or title

considerations. Title to the property is assumed to be good and marketable unless otherwise stated.

2. The property is appraised free and clear of any or all liens or encumbrances unless otherwise stated.

3. Responsible ownership and competent property management are assumed. 4. The information furnished by others is believed to be reliable. No warranty, however, is given for

its accuracy. 5. All engineering is assumed to be correct. The plot plans and illustrative material in this report are

included only to assist the reader in visualizing the property. 6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or

structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them.

7. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report.

8. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless nonconformity has been stated, defined, and considered in the appraisal report.

9. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any us on which the value estimate contained in this report is based.

10. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report.

11. There are no existing judgments or pending or threatened litigation that could affect the value of the property.

12. The revenue stamps placed on any deed referenced herein to indicate the sale price are in correct relation to the actual dollar amount of the transaction.

13. An appraisal is inherently subjective and represents our opinion as to the value of the property appraised.

14. The conclusions stated in our appraisal apply only as of the effective date of the appraisal, and no representation is made as to the effect of subsequent events.

15. No changes in federal, state or local laws, regulations or codes (including, without limitation, the Internal Revenue Code) are anticipated.

16. No environmental impact studies were either requested or made in conjunction with this appraisal, and we reserve the right to revise or rescind any of the value opinions based upon subsequent environmental impact studies. If any environmental impact statement is required by law, the appraisal assumes that such statement will be favorable and will be approved by the appropriate regulatory bodies.

17. Unless otherwise agreed to in writing, we are not required to give testimony, respond to any subpoena or attend any court, governmental or other hearing with reference to the property without compensation relative to such additional employment.

18. We have made no survey of the property and assume no responsibility in connection with such matters. Any sketch or survey of the property included in this report is for illustrative purposes only and should not be considered to be scaled accurately for size. The appraisal covers the property as described in this report, and the areas and dimensions set forth are assumed to be correct.

19. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any, and we have assumed that the property is not subject to surface entry for the exploration or removal of such materials, unless otherwise noted in our appraisal.

20. We accept no responsibility for considerations requiring expertise in other fields. Such considerations include, but are not limited to, legal descriptions and other legal matters such as

legal title, geologic considerations such as soils and seismic stability, and civil, mechanical, electrical, structural and other engineering and environmental matters.

21. The distribution of the total valuation in the report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. The appraisal report shall be considered only in its entirety. No part of the appraisal report shall be utilized separately or out of context.

22. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or any reference to the Appraisal Institute) shall be disseminated through advertising media, public relations media, new media or any other means of communication (including without limitation prospectuses, private offering memoranda and other offering material provided to prospective investors) without the prior written consent of the person signing the report.

23. Information, estimates and opinions contained in the report, obtained from third-party sources are assumed to be reliable and have not been independently verified.

24. Any income and expense estimates contained in the appraisal report are used only for the purpose of estimating value and do not constitute predictions of future operating results.

25. If the property is subject to one or more leases, any estimate of residual value contained in the appraisal may be particularly affected by significant changes in the condition of the economy, of the real estate industry, or of the appraised property at the time these leases expire or otherwise terminate.

26. No consideration has been given to personal property located on the premises or to the cost of moving or relocating such personal property; only the real property at the time these lease expire or otherwise terminate.

27. The current purchasing power of the dollar is the basis for the value stated in our appraisal; we have assumed that no extreme fluctuations in economic cycles will occur.

28. The value found herein is subject to these and to any other assumptions or conditions set forth in the body of this report but which may have been omitted from this list of Assumptions and Limiting Conditions.

29. The analyses contained in the report necessarily incorporate numerous estimates and assumptions regarding property performance, general and local business and economic conditions, the absence of material changes in the competitive environment and other matters. Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis will vary from our estimates, and the variations may be material.

30. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific survey or analysis of any property to determine whether the physical aspects of the improvements meet the ADA accessibility guidelines. In as much as compliance matches each owner’s financial ability with the cost to cure the non-conforming physical characteristics of a property, we cannot comment on compliance to ADA. Given that compliance can change with each owner’s financial ability to cure non-accessibility, the value of the subject does not consider possible non-compliance. A specific study of both the owner’s financial ability and the cost to cure any deficiencies would be needed for the Department of Justice to determine compliance.

31. The appraisal report is prepared for the exclusive benefit of the Client, its subsidiaries and/or affiliates. It may not be used or relied upon by any other party. All parties who use or rely upon any information in the report without our written consent do so at their own risk.

32. No studies have been provided to us indicating the presence or absence of hazardous materials on the subject property or in the improvements, and our valuation is predicated upon the assumption that the subject property is free and clear of any environment hazards including, without limitation, hazardous wastes, toxic substances and mold. No representations or warranties are made regarding the environmental condition of the subject property and the person signing the report shall not be responsible for any such environmental conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because we are not experts in the field of environmental conditions, the appraisal report cannot be considered as an environmental assessment of the subject property.

33. The person signing the report may have reviewed flood maps and may have noted in the appraisal report whether the subject property is located in an identified Special Flood Hazard Area. We are not qualified to detect such areas and therefore do not guarantee such determinations. The presence of flood plain areas and/or wetlands may affect the value of the property, and the value conclusion is predicated on the assumption that wetlands are non-existent or minimal.

34. The appraisal report and value conclusion for an appraisal assumes the satisfactory completion of construction, repairs or alterations in a workmanlike manner.

35. All prospective value estimates presented in this report are estimates and forecasts which are prospective in nature and are subject to considerable risk and uncertainty. In addition to the contingencies noted in the preceding paragraph, several events may occur that could substantially alter the outcome of our estimates such as, but not limited to changes in the economy, interest rates, and capitalization rates, behavior of consumers, investors and lenders, fire and other physical destruction, changes in title or conveyances of easements and deed restriction, etc. It is assumed that conditions reasonably foreseeable at the present time are consistent or similar with the future.

36. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used.

37. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event it may be used only with proper written qualification and only in its entirety.

38. The appraiser herein by reason of this appraisal is not required to give further consultation or testimony or be in attendance in court with reference to the property in question unless arrangements have been previously made.

39. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news, sales, or other media without the prior written consent and approval of the appraiser.

ADDENDUM A

DEFINITIONS

DEFINITIONS

These definitions have been extracted, solely or in combination, from definitions and descriptions printed in:

• The Dictionary of Real Estate Appraisal, Fourth Edition, Appraisal Institute, Chicago, Illinois, 2002 (Dictionary)

• The Appraisal of Real Estate, Twelfth Edition, Appraisal Institute, Chicago, Illinois, 2001 (Twelfth).

• Marshall Valuation Service, Marshall & Swift, Los Angeles, California, (MVS). Accrued Depreciation

The difference between the reproduction or replacement cost of the improvements on the effective date of the appraisal and the market value of the improvements on the same date. (Dictionary)

Deferred Maintenance

Curable, physical deterioration that should be corrected immediately, although work has not commenced; denotes the need for immediate expenditures, but does not necessarily suggest inadequate maintenance in the past. (Dictionary)

Effective Date

The date at which the analyses, opinions, and advice in an appraisal, review, or consulting service apply. (Dictionary)

Entrepreneurial Profit

A market-derived figure that represents the amount an entrepreneur receives for his or her contribution to a project and risk; the difference between the development cost of a property and its market value upon completion and stabilization, which represents the entrepreneur’s compensation for the risk and expertise associated with development. Entrepreneurial profit is an amount earned, estimated after completion, while entrepreneurial incentive is an amount anticipated, prior to development. (Twelfth)

Exposure Time

The time a property remains on the market. A retrospective estimate based on an analysis of past events assuming a competitive and open market. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. Exposure time is different for various types of real estate and value ranges and under various market conditions. (Dictionary)

Floor Area Ratio (FAR)

The relationship between the above-ground floor area of a building, as described by the building code, and the area of the plot on which it stands; in planning and zoning, often expressed as a decimal, e.g., a ratio of 2.0 indicates that the permissible floor area of a building is twice the total land area. (Dictionary)

Gross Building Area (GBA)

The total floor area of a building, including below-grade space but excluding unenclosed areas, measured from the exterior of the walls. All enclosed floors of the building including basements, mechanical equipment floors, penthouses, and the like are included in the measurement. Parking spaces and parking garages are excluded. (Dictionary)

Highest and Best Use

The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability. (Dictionary)

Leased Fee Interest An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease. (Dictionary)

Leasehold Interest

The interest held by the lessee (the tenant or renter) through a lease transferring the rights of use and occupancy for a stated term under certain conditions. (Dictionary)

Market Rent

The rental income a property would probably command in the open market; indicated by the current rents that are either paid or asked for comparable space as of the date of the appraisal. (Twelfth)

Market Value

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of the title from seller to buyer under conditions whereby:

• Buyer and seller are typically motivated; • Both parties are well informed or well advised, and acting in what they consider their best

interests; • A reasonable time is allowed for exposure in the open market; • Payment is made in terms of cash in United States dollars or in terms of financial

arrangements comparable thereto; and • The price represents the normal consideration for the property sold unaffected by special

or creative financing or sales concessions granted by anyone associated with the sale.” (Source: 12 C.F. R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994)

Net Net Net Lease A net lease under which the lessee assumes all expenses of operating a property, including both fixed and variable expenses and any common area maintenance that might apply, but the landlord is responsible for structural repairs. Also called triple net lease or NNN but better stated as a fully net lease. (Dictionary)

Prospective Value Opinion

A forecast of the value expected at a specified future date. A prospective value opinion is most frequently sought in connection with real estate projects that are proposed, under construction, or under construction to a new use, or those that have achieved sellout or a stabilized level of long-term occupancy at the time the appraisal report is written. (Dictionary)

Rentable Area (RA)

The amount of space on which rent is based, calculated according to local practice. (Dictionary) Replacement Cost

The estimated cost to construct, at current prices as of the effective appraisal date, a building with utility equivalent to the building being appraised, using modern materials and current standards, design and layout. (Dictionary)

Reproduction Cost

The estimated cost to construct , at current prices as of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same materials, construction

standards, design, layout, and quality of workmanship and embodying all the deficiencies, superadequacies, and obsolescence of the subject building. (Dictionary)

Usable Area

The are available for assignment or rental to an occupant, including every type of usable apace; measured from the inside finish of outer walls to the office side of corridors or permanent partitions and form the centerline of adjacent spaces; includes subdivided occupant space, but no deductions are made for columns and projections. (Dictionary)

Value As Is

The value of specific ownership rights to an identified parcel of real estate as 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. (Dictionary)

ADDENDUM B

SUBJECT PHOTOGRAPHS

FRONT REAR

WAREHOUSE SECTION OFFICE/RECEPTION AREA

REAR OF BLDG FACING DIRECTORS ROW FRONT OF BLDG FACING INTERSECTION

ADDENDUM C

FINANCIALS AND PROPERTY INFORMATION

ADDENDUM D

COMPARABLE DATA

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