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The MarvelousReturn HomeARGUS UNIVERSIT Y CHALLENGE 2019

Prepared by:UNIVERSIT Y OF SAN DIEGOJohannes Hummel Alexander Dow Theodore KavichTyler Jenkins Shane Isdaner

Proposal Issued:March 25, 2019

ARGUS UNIVERSITY CHALLENGE 20192

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Broad Economic Outlook

Market Analysis

Property Description

Financial Underwriting

Special Consideration

Final Recommendation

Appendix / ARGUS Models

Table of Contents

Executive Summary

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›Sources

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Biographies

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Torero Real Estate Advisors has been hired to conduct an investment analysis of the subject property described below. Our client is a high net worth real estate investor interested in value-add investment opportunities and is interested in purchasing a mixed-use property in a prominent New York suburban market. Our client is a native of the city where the subject property is located and is excited to have the opportunity to invest in their hometown.

BackgroundThe unincorporated area of Northeasternville is in the midst of an economic resurgence and has injected several million dollars of renovations into its main business district near the Strange Urban Railroad station (SURR). The subject property is located within this redevelopment zone.

Northeasternville is a desirable community that is home to a diverse population with a rich history. There is a significant need to improve and increase housing, as well as expand the school system, in order to accommodate the influx of people migrating from nearby metro areas into Northeasternville. The homes in Northeasternville are inexpensive relative to the large metropolitan areas nearby.

Many young couples have been purchasing these homes to escape the high prices in the city and to start families of their own. Northeasternville is a transit hub that sits about 45 minutes outside of New York City; however, approximately half of its working population works close to home.

Executive Summary

SUBJECT PROPERTYCity Northeasternville (unincorporated Golden County)

Type Mixed-Use: Office and Retail

Size 3,835 Square Feet

Office Square Feet 9,390 Square Feet (67.9%)

Retail Square Feet 4,445 Square Feet (32.1%)

Lot Size 21,780 Square Feet (0.5 Acres)

Floor Area Ratio 0.635

Lot Coverage 20%

The ProblemIn order to best serve our client we have conducted thorough, unbiased analysis of the current state of the national economy, the driving forces behind the regional and local real estate markets, and the emerging trends that will shape tomorrow’s utilization of real estate. Our analysis will conclude with a detailed financial analysis of this unique investment opportunity utilizing the ARGUS Enterprise software.

The general consensus within the national real estate industry is that we are currently at the peak of the real estate cycle and we are headed for a correction in the markets. Although Northeasternville is in the midst of a growth cycle, the national economy is believed to be late in the cycle and investors need to take that into account when making an investment decision.

Our client has the opportunity to purchase a 13,835 square foot mixed-use retail and office building. The ground floor is retail space with two stories of office space above it. The building is located at the corner of Main Street and Railroad Avenue, which is in the heart of the community surrounded by neighborhood retail shops and restaurants, a local grocery store, a house of worship, the community’s railroad station, and a small urban park that residents enjoy.

The in-place retail leases at the subject property are short-term, with two of the three leases expiring in the next two years. Three of the six office tenant leases expire in the next two years, while the remaining leases will expire in years 3, 4, and 5. The expiring leases give the potential buyer the opportunity to upgrade the newly vacant suites in order to attract new tenants and boost the rents.


Scenario A Buy & HoldInvest in the subject property, hold the investment through a potential downturn, and then sell it at a profit after the market rebounds.

Investment ScenariosOur client has approached our firm to analyze three potential investment scenarios for the mixed-use property in Northeasternville. After concluding our analysis for the three scenarios, we decided to offer a fourth scenario for consideration that we believe will maximize the value of the property over time and provide the best overall returns for our client. The scenarios are as follows:

Market SummaryThe subject property is well located within the New York metropolitan area and is approximately 30-45 minutes from the downtown and midtown business districts of New York City. The region is the largest metropolitan area in the country and is the financial epicenter of the United States. Although New York was severely affected during the Great Recession, its existing infrastructure and economic importance to the United States allowed it to recover faster than many other regions in the country. Golden County, and specifically Northeasternville, will continue to benefit from the aging millennial population as they continue to settle down and start families of their own. Northeasternville provides the comforting hometown lifestyle that many young families desire. Its affordability relative to other parts of the region and its small town charm will continue to place the city on the shortlist of many young families as they migrate from the city into the suburbs. Approximately 50% of Northeasternville’s current residents commute locally to work and as young families continue to move into the area, that number will likely rise, placing the subject property in high demand.

Special ConsiderationsSustainability

Improving the subject property to meet LEED Silver standards will increase demand in the market and lower operating expenses. Many companies across the country are adopting sustainability initiatives and are willing to lease space deemed environmentally friendly at a premium to meet their sustainability goals. Increasing the property’s energy efficiency will positively impact the building’s operating expenses, which will benefit the triple net retail tenants of the building. Data suggests tenants are willing to pay higher base rents for properties with lower operating expenses. Investors also value energy efficient buildings because of the ability to accurately forecast operating expenses.

Potential Entitlement Opportunity

The gross building square footage of the subject property currently occupies approximately 20% of the parcel, meaning approximately 17,200 square feet of the parcel is surface parking and outdoor common area. As ridesharing and autonomous vehicles become more prevalent, many cities are beginning to ease parking requirements for multifamily and commercial properties. We feel there is value that can be added to the property if a section of the parking lot was entitled to build a multifamily development or expand the retail and office footprint.

Scenario A Buy & HoldInvest in the subject property, hold the investment through a potential downturn, and then sell it at a profit after the market rebounds.

Scenario B Quick Value-AddInvest in the subject property, make improvements as necessary before selling at a profit prior to a market downtown.

Scenario C RejectDecline this investment opportunity.

Scenario D Hold & ImproveInvest in the subject property, make improvements to the tenant suites as leases expire, achieve LEED certification, and position the asset to be more competitive in tomorrow’s economy before selling it at a profit.


Scenario Outcomes

Scenario D Hold & ImproveTorero Real Estate Advisors believes this is the best course of action for our client given the state of the market and the pride our client has for Northeasternville. We are confident our client will realize a strong return on investment and deliver an exceptional product to this expanding region that will be in high demand by office and retail tenants for many years to come.

Leveraged Net Present Value: $457,722

Leveraged Internal Rate of Return: 12.69%

Scenario C RejectMarket fundamentals are strong in New York City and the surrounding markets. Considering the high per square foot cost to lease in New York City, and the noticeable uptick in office demand within secondary markets, we don’t believe this is an advisable option for our client. The buy & hold as well as the hold & improve strategy outperform the current market and provide attractive yields in a low yield environment.

Leveraged Net Present Value: N/A

Leveraged Internal Rate of Return: N/A

Scenario B Quick Value-AddAt this stage in the cycle it would be very risky to attempt a quick value-add and sale. Given the current costs of construction and uncertainty surrounding how interest rates may affect cap rates in the short-term, we don’t forecast an appreciation in value high enough to justify this option. Additionally, the in-place leases would make it challenging to reposition the asset on such a short timeline.

Leveraged Net Present Value: -$374,030

Leveraged Internal Rate of Return: -21.52%

Scenario A Buy & HoldAlthough the property provides acceptable cash flows with the leases currently in place, a simple buy & hold strategy would provide for mediocre overall returns. Option A would not be a bad strategy but the capital used to purchase the property could be better utilized.

Leveraged Net Present Value: $4,305

Leveraged Internal Rate of Return: 8.58%

Recommendation

We recommend that our client purchases the subject property, update the exterior and common areas, make improvements to the tenant spaces as leases expire, and achieve LEED Silver certification to position the asset to be relevant in tomorrow’s economy before selling at a profit. The hold & improve strategy provides the value-add investor with an attractive risk-return tradeoff in a low yield environment.

Scenario D - Hold & Improve Strategy


Current State of the EconomyJune 2019 will mark the 120th consecutive month of economic expansion for the national economy. The Trump administration’s tax and deregulation policies have added additional stimulus to many real estate sectors. The unemployment rate has fallen to a 48-year low and labor market indicators suggest one of the strongest job markets in decades. Although many worry that these policies have the potential to overheat the economy, we have yet to realize those fears. Alan Binder, a professor of Economics and Affairs at Princeton University and former vice chairman of the Federal Reserve, stated in a recent editorial that “expansions don’t die of old age, something kills them”.

When analyzing the end of notable economic expansions, there are a few things to keep an eye on as we move forward. Perhaps the biggest potential expansion killer will be monetary restrictions initiated by the Federal Reserve in response to inflation fears. After anxiety about “lowflation” last year, core inflation has been remarkably close to the Fed´s 2% target. Although Fed Chairman Jerome Powell has stated that rates will not rise again in 2019, it doesn’t mean they won’t be raised over the next few years. Oil price surges have historically had a significant impact on the national economy, however prices have remained relatively stable since 2014 and that trend is likely to continue as U.S. production has increased dramatically in the last decade increasing global competition for oil. A potential stock market crash would certainly impact financial markets, but that does not necessarily mean the economy will come to a screeching halt. The market crash of 1987 almost went unrecognized by the national economy and the fourth quarter correction of 2018 occurred in a year where national GDP nearly hit 3% for the first time since 2005.

Public rhetoric warning of the impending downturn is growing, both in volume and frequency. Memory of the Great Recession haunts investors. While it is nearly impossible to pinpoint a market turn, there are specific economic indicators that have proven to provide insight into the market’s current position in the cycle: real GDP growth, labor market strength, inflation rates, interest rates, and monetary policy.

2. Broad Economic Outlook2.1 Overview of the National Economy Real RDP Growth.

Labor Market.

Inflation Rates.

Interest Rates.

Monetary Policy.

How long will the good times last?

“Expansions don’t die of old age, something kills them”


Real GDP GrowthAs Q1 2019 ends, real GDP growth rate is currently hovering around 3.00%. Moving into 2020 the growth rate is expect to decelerate to roughly 1.75%. This deceleration is due largely to the fading of fiscal stimulus measures stemming from the Great Recession and an overall constriction within the financial markets. We expect the slowdown should come gradually, with growth remaining above trend in the first half of 2019 before slowing later in the year. Moving into 2020 and 2021, the Fed expects real GDP growth of approximately 1.50% with the likelihood that normal fluctuations may result in negative growth. It is unreasonable to expect GDP to grow into perpetuity but we see strong indications that we are headed for a plateau in growth and not another Great Recession.

Labor MarketIndicators suggest one of the strongest labor markets in history. The number of job openings per unemployed worker, the quit rate, household reports of the ease of finding a job, and employer reports of the difficulty in finding workers all suggest that workers’ bargaining power has increased. Based on these factors, recent acceleration in the highest-quality wage indicators, and the large increase in wage growth in the more cyclically-sensitive lower half of the income distribution lead to an expected overall wage growth of 3.25-3.50% in 2019. With unemployment rates expected to fall to 3.00% in 2020, below estimated full unemployment, a further sustainable wage growth is expected in the long run. This can be seen in the news as companies nationwide rue universal talent shortages.

There are potential business headwinds that result from such a strong labor market. First, the employers are not always able to find always find the staff they need. The likely result of this will be a slowdown in the growth of many companies initially, but as technology increases workplace efficiency this isn’t expected to be a long-term issue.

“Expansion is on course to become the longest in US history”


“With No Obvious Trigger on the Horizon, Recession Risk Still Looks Low”

Inflation RatesInflation is expected to reach nearly 2.50% by Q4 2019 with projected slowdown in the years after and a stabilized inflation rate around 2.25%. Firmer wage growth, bottlenecks and capacity constraints in product markets, and additional tariff rounds with a greater focus on consumer goods put upward pressure on last year’s core inflation. With tariffs and trade wars expected to be resolved in the following years, a 25 bps rate reduction is projected. Potential new trade war escalation, such as the imposition of import tariffs or a further tightening of the labor markets could push inflation notably above the projected long-term rates. However it is worth highlighting that inflation is still historically low and even a long-term worst case prediction of 2.50% or slightly above should not cause any significant shift in capital markets.

Interest RatesIn 2017 investor skepticism about rate hikes centered on the “lowflation” narrative and the level of the neutral rate (3%). In 2018 investor skepticism centered on the idea of the neutral rate as a barrier, an assumed fear of yield curve inversion, and concern about foreign vulnerability to Fed hikes. As we enter the home stretch of the hiking cycle in 2019, investor skepticism has so far centered on whether four hikes are really necessary for an economy already on a trajectory to decelerate. The next hike up to the Fed’s 3% estimate of the neutral rate appears to be fairly uncontroversial but what does the future hold? Recent commentary by Fed officials indicate that most think that an accommodative stance is inappropriate at a time when the economy is past the Fed’s labor market target.

The question of when the hiking cycle ends largely hinges on when Fed officials can be confident that the overshoot of full employment already underway is not continuing to grow. The recent tightening in financial conditions has made it more plausible that this point could be reached earlier than the end of next year, but it is more likely that job growth will not slow sufficiently until early 2020. If so, the Federal Open Market Committee (FOMC) will likely deem it prudent to continue tightening gradually, for fear of having to tighten more abruptly down the road. If GDP growth and job creation slow earlier than expected, the Fed could stop after two hikes next year at approximately 2.75-3.00%. Conversely, if job growth remains stronger for longer, or inflation rises to 2.50% or higher, the path of least resistance would likely be to continue leading to a hike of interest rates once per quarter into 2020. By slowly increasing interest rates now, the Fed is giving itself the option to drop them if the economy over corrects moving into 2020.

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Monetary PolicyBeyond the number of rate hikes, three other monetary policy issues will be important in 2019.

First, the end of balance sheet normalization will come into sharper focus. Consensus remains that runoff will end with bank reserves at roughly $1 trillion and a total balance sheet of about $3.6 trillion in early 2020, though a wide range of outcomes is possible. While experts sympathize with arguments that the benefits of keeping the balance sheet somewhat larger than its minimum possible size exceed the costs, the Fed’s standing guidance, reiterated in Congressional testimony by Chairman Powell in July 2018, is that the “balance sheet will return to a size that’s no larger than it needs to be for us to affect monetary policy in our chosen framework,” and that point looks a bit further off.

Second, the FOMC will likely have to make further Interest Rate on Excess Reserves realignments. With the effective fed funds rate end of 2018 just 5bps below the top of the target range for the funds rate, the rates are expected to rise once or twice in 2019.

Third, a press release from the Fed issued on November 19th, 2018 announced that the debate on alternative monetary policy frameworks has resumed. The key event in 2019 will then be a conference on June 4th and 5th, 2019 that will invite discussion from both within and outside of the Federal Reserve.

History suggests two typical causes of U.S. recessions: overheating and financial imbalances. While overheating risks could present themselves down the road, that looks unlikely given the current conditions. Both core inflation and trend unit labor cost are around 2% while and household inflation expectations and market-implied inflation compensation are below average. Additionally, there is low risk of financial imbalances at the moment. At a high-level, the private sector financial balance—a very good predictor of recession risk—looks quite healthy.


How worried should we be about recession risk today?


“Recession risk is a mundane and technical one”

These two classic recession risks are complementary—overheating and the associated risk of a more abrupt shift in monetary policy is more threatening when financial imbalances are elevated and less threatening when they are limited. With neither risk looking worrisome at the moment, it would be preemptive to characterize the economy as “late cycle” at this point. History may repeat itself in generality, but no two cycles have been identical in size, shape, or tenure, so it should not be assumed that this long expansion cycle will equate to a looming Global Financial Crisis. The most prominent recession risk beyond 2019 is a mundane and technical one. With a low potential growth rate and a possible need to operate the economy a touch below potential to gradually unwind the overshoot—1.5% growth in 2020 and 2021 forecasted—the likelihood that normal fluctuations will tip growth negative is mechanically somewhat higher. This highlights the arbitrary nature of defining recessions as negative growth, rather than as a material rise in the unemployment rate. Accounting for these and other considerations, the recession risk in the following years is low and the current expansion is on course to become the longest in U.S. history.


2.2 Overview of the Real Estate MarketWith the current expansion of the U.S. economy on course to become the longest in history, and the real estate cycle now entering its tenth year of expansion many investors are questioning how long the good times will last – because the expansion can’t last forever. Although history is used as a guide to predict potential downturns. It is important to keep in mind that no previous real estate downturns have been the same. However, downturns of the past remind us of factors that must be considered when attempting to forecast the future even though the upcoming downturn will most likely be not as easy to detect.

Real estate demand is heavily driven by economic growth as a function of long-term demographic trends, labor market conditions, and government policy. The balance between supply and demand and the rate of inflation drives growth in rents and net operating income (NOI). Finally, capital flows, movement in interest rates, and the compression of risk premiums determine the trajectory of real estate valuations. As discussed, today’s market suggests an encouraging future. Job growth remains robust, wages are rising, and consumer spending is healthy. Supply growth has peaked in most property types and markets, and expectations of future supply growth continue to moderate as the cost of construction rises. Capital market conditions appear healthy as well, with total transaction volume in 2018 surpassing that of the prior year. The spread between cap rates and the ten-year Treasury has narrowed considerably, but a recent compression in Treasury yields has returned that spread to a healthy level. Additionally, underwriting standards seem disciplined but capital is still being deployed and there is a healthy transaction volume across most markets. According to data from NCREIF, underwriters continue to moderate future rent growth projections, while indications from life insurers and the CMBS market suggest lenders have kept loan-to-value (LTV) and debt service coverage (DSC) ratios relatively stable in recent years.

“Real estate’s past is rarely prologue”

While the ultimate cause of the end of the current expansion cycle remains unclear, the economy seems most likely to play a primary role in the next real estate market correction – unlike in the past when excessive supply, debt bubble or liquidity crisis was the cause. The main impact an economic slowdown has on real estate is the potential reduction of NOI growth, and consequently a reduction in real estate values. Adding capital market factors could lead to temporary disconnection of values and NOI growth as shown in past crises. The difference of the last crisis in mid-2000s was mainly driven by a combination of extreme leverage and irresponsible underwriting. Neither of those problems are occuring on any widespread basis today. Predatory lenders do not present the same risk as they did in the mid-2000s. Some point to the emergence of non-bank hard money lenders in a similar light, but they hold a very small share of the market. Instead, values have been supported by robust capital flows from a variety of domestic and foreign sources. These new foreign investors have broadly enhanced liquidity and stability across markets. Foreign investors in particular have had a stabilizing influence, focusing their investments on core, institutional-quality assets with the intention of holding for multiple decades. This broadened capital base makes values less susceptible to shocks to both national and regional economies. In addition, markets have become more efficient due to an increase in information transparency leading to lower real estate risk-premiums which is reflected in the spread between cap rates and treasury rates. Compared to the 20-year average of approximately 270 bps, the spread at the end of Q3 of 2018 implies that values are likely to fall as much as 20% in the event of a downturn, but even a 50 bps spread adjustment to reflect the maturation of the asset class lowers this potential decline to only 12%. The potential market decrease is also backed by MetLife´s proprietary model that analyzes historical real estate IRR series, which takes current income, expectations of the future income growth, risk free rate and risk premium into account.

Real estate values are ultimately determined by a wide array of factors, many of which are exogenous to the real estate sector itself. Regardless of when the current cycle of expansion ends, it seems reasonable to believe that it will not be nearly as severe as the last recession. While real estate demand will weaken, supply growth and undeployed capital will provide a counterbalance. Based on these factors and analyses of historical real estate downturns, it appears likely that values could decline by 10% to 15% were a downturn to begin today. Investors can take comfort in the knowledge that if the next downturn occurs in the near future, it is unlikely to be deep.


“New investors from abroad have broadly enhanced liquidity and stability across markets”


2.3 Capital MarketsReal estate is capital intensive investment class, making debt markets key to success for investors. Positive leverage lowers the investor’s equity requirement and increases returns, when used correctly. With increasing competition on the provider side, the main sources of debt capital are seeing the volume of funds available for placement rising incrementally. In addition, market participants are likely to experience increasing LTV´s and a more favorable underwriting paired with slowly increasing interest rates due to expected Fed rate hikes. With plenty of debt capital available, the main challenge for investors has shifted to finding worthy projects that can be executed using the available funds.

“$266 billion of private investor ‘dry powder’ targeting real estate”

While a pattern of convergence can be discerned among lenders, equity capital providers are looking to identify their particular strengths and play to them. Thus, a pattern of selectivity, focus, and specialization paints a somewhat similar picture. Equity investors around the world have plenty of capital to invest, however core properties in major markets are scarcer to identify as acquisition targets and, when found, are priced out of range. Low returns do not meet yield targets, especially for investors like pension funds and insurers’ equity portfolios looking to match long-term liabilities. This dilemma creates investment pressure that will remain high for the next few years, putting current and future owners with high quality property in a favorable position.

Figure: Closed-End Private Real Estate Dry Powder, by Strategy, December 2007–March 2018


Retail is in the midst of a transformation as traditional “big box” business models continue to lose favor and business focused on the complete, multi-channel consumer experience are primed to succeed. Large scale closures caused caution in 2018, as retail net absorption was only 2.3%, down over 50% from 2017. Rents grew 5.7% over the 12-month period, with location and “best of the best” spaces driving a large part of that growth. Despite many highly-publicized closures, total vacancy remained flat, with only a 4 basis point decline.

Retail is in the midst of a transformation as traditional “big box” business models continue to lose favor and business focused on the complete, multi-channel consumer experience are primed to succeed. Large scale closures caused caution in 2018, as retail net absorption was only 2.3%, down over 50% from 2017. Rents grew 5.7% over the 12-month period, with location and “best of the best” spaces driving a large part of that growth. Despite many highly-publicized closures, total vacancy remained flat, with only a 4 basis point decline.

Per the CBRE Global Retail Real Estate Market Outlook 2019, “Retail stakeholders need to focus on offering consumers an experience that drives foot traffic and sales. For retailers, building an omnichannel platform that is seamless both on the back-end (supply chain and logistics) and front-end (consumer experience) will be vital. For owners, updating the customer experience and re-evaluating tenant mix will be key, especially in second- and third-tier locations”. As successful retailers develop their omnichannel strategies, more capital is being put into physical stores which obtain higher profit margins than online sales and can be used as pick-up and drop-off points for online orders and returns. Technology will also shape the retail world, as companies like Sam’s Club and Amazon are piloting mobile checkout, cashier-less stores, electronic shelf labels, and artificial intelligence.

2.4 National Retail Market Overview


While the term of this recovery has anecdotally prompted tales of caution, the national office market remained robust in 2018. Transaction volumes totaled $132.0 billion, an increase of 5% from 2017, with 78% of volume made up by single-asset transactions as investors worry about exit pricing assumptions in portfolio activity. Additionally, primary market investment saw a 2.5% increase over 2017 as a flight back to secure and liquid markets drove activity, versus an 11% decrease in secondary markets.

Leasing activity was also strong in 2018, despite a year in which headlines about hiring and talent shortages dominated the news cycle. Office leasing surpassed 36 million square feet in the Q4 2018, while rents grew 2.8% nationally over 12-months and total vacancy decreased 40 bps over the same period.

Looking ahead, both supply and demand growth look healthy but well below peak levels. Approximately 54 million square feet of new office space will be delivered in 2019, roughly equal to 2018 levels. However, the effects of ever increasing construction costs that caused a 2018 pullback will start to hit the market beginning in 2020. This slowdown, coupled with moderate rent growth, has constrained development in a number of markets, while construction is concentrated in cities such as New York, Washington, D.C., San Francisco, Seattle, and San Jose.

On the demand side, office-using employment is expected to grow by 1.6%, roughly 300,000 jobs, driven by a tight labor market. Primary markets including San Francisco, Dallas/Ft. Worth, Houston, New York, and Chicago are projected to add the largest numbers of jobs in 2019, between 15,000 and 25,000 each. Flexible space providers (including co-working) saw their share of major leasing activity double over the past year with no signs of slowing. Workplace environments are rapidly shifting as businesses look for productivity, efficiency, and flexibility for employees. CBRE’s 2018 Americas Occupier Survey found that the next iteration of design for traditional core space will focus on an activity-based workplace and an unassigned seating format to allow flexibility in movement of employees and reconfiguration of space. Additionally, the amount of square-footage per employee continues to decrease, and the experiential office atmosphere gains steam. One increasingly common design element focuses on biophilic office design as companies like Etsy, Airbnb, Amazon, and Microsoft are bringing “green” office design and employee well being to the forefront of their real estate strategies.

2.5 National Office Market Overview


3. Market Analysis3.1 New York Metropolitan Area OverviewThe New York metropolitan area is the largest metro area in the United States and is among the largest in the world. It’s ideal location, natural harbor, various waterways, and entrepreneurial spirit has allowed the area to cultivate and maintain one of the world’s greatest economies. The region is home to some of the world’s most renowned attractions and is the most recognizable skyline in the world. It is truly symbolic of the American Dream.

Demographics

PopulationThe New York-Newark-Jersey City, NY-NJ-PA Metropolitan Statistical Area (MSA) is comprised of twenty-five counties across three state boundaries and contains nearly 20.5 million people according to 2018 U.S. Census estimates. By comparison, Los Angeles is the second most populated MSA with approximately 13.4 million people. Since 2010, the region has grown on average by approximately 110,000 people every year, an annual rate of 0.56%, and it is projected to maintain this growth pattern through 2023.

The median age for the region is 36.8 and trending upward. This is occurring for a number of reasons. Overall, people are living longer, baby boomers are aging, and millennials are waiting longer to start families.

Household size, defined as the number of people who occupy a housing unit, is also trending upward slightly but not necessarily because of growing family sizes. In today’s market, single millennials are more likely to have roommates to share the cost burden of living in an exciting metro area. A different story can be drawn from suburban data, discussed in subsequent sections of this report.

Worth mentioning is the nominal difference between owner-occupied housing units and renter-occupied housing units. In 2010, owner-occupied units outnumbered renter-occupied units by 235,022. By 2018, that gap decreased to less than 6,000, as renter occupied units grew by 7.17% over the eight years, while owner-occupied units only grew by 0.52%. However, economists predict that owner-occupied units will surge 4.82% over the next five years and increase the delta to 188,240. New York City alone accounts for approximately 44% of the metropolitan area’s housing stock but only 30% of the housing units are owner-occupied, suggesting that homeowners primarily reside in neighboring suburban areas. The growth in homeownership therefore should occur in areas like Golden County and Northeasternville.


New York MSA Population EstimateNew York Metro Area

Difference Between Owner-Occupied Units & Renter Occupied Units

EconomyThe New York metro economy is the largest in the United States and is second only to Tokyo worldwide. The MSA GDP in 2017 was approximately $1.71 trillion, which accounted for 8.8% of U.S. GDP. Per capita GDP was $84,547 in 2017, 42% higher than U.S. GDP per capita. It is one of the most dynamic economies ever cultivated and is considered by many to be the most powerful regional economy in the world.

The New York-New Jersey port is the busiest port on the east coast and the third busiest seaport in the United States by measure of twenty-foot equivalent units (TEUs), only Long Beach and Los Angeles had more TEU activity. The port is a vital component to the region’s economy and supports thousands of jobs to the area.

New York’s financial industry dominates the region in regards to economic importance. Wall Street accounts for one-fifth of the private sector wages, although it makes up less than 10% of the region’s jobs. Over 38% percent of the employees in the industry commute from outside New York City, placing them in areas similar to Northeasternville. This is a trend shared by a number of other industries, as professionals tied to the New York economy look outside the city to start families or find more affordable cost of living.

The biotech industry is thriving in New York and is home to the largest bioscience workforce in the nation. The region is home to many of the top medical research universities in the nation including Columbia University, NYU, and The Rockefeller University and was awarded $1.8 billion in National Institute of Health grants, second in the nation.

The tech industry is making its presence felt in the Big Apple as well. New York is home to approximately 134,000 tech sector employees, 53,000 of which have come since 2010. Google announced in December that they plan on creating a $1 billion campus south of West Village in Lower Manhattan and doubling their current employment base to 14,000 over the next decade. In addition to name brands like Google and Facebook, many financial companies such as Goldman Sachs, JP Morgan Chase, and Morgan Stanley are hiring internal app developers, data analysts, and digital security experts. The region ranks second behind the Bay Area in regards to venture capital raised and will continue to attract more young tech talent to the region.


“The New York MSA GDP in 2017 was approximately $1.71 trillion, which accounted for 8.8% of U.S. GDP”

EmploymentAs of December 2018, the New York-Newark-Jersey City MSA employed approximately 9,842,500 people. The Global Financial Crisis severely affected New York because of the size of its financial industry. The region lost nearly a half million jobs over two years as its unemployment rate increased from 4.2% in March 2007 to 9.3% in October 2009. The national unemployment rate peaked at 10.2% in the same month.

Between 2011 and 2013, the region’s employment rate increased slightly in percentage terms, but there was simultaneously a significant increase in total employment numbers, as seen in the table below. This reflects a massive influx of people to the region in search of work. When the economy is poor people seek the areas of greatest possible opportunity.

Since the bottom of the recession, New York has added an average of 164,000 jobs annually resulting in upwards of 9.5 million current jobs, a number approximately 1.3 million higher than its previous peak in 2007. Employment growth has tapered in recent months as the country approaches full employment, with the unemployment rate reaching 3.6% in October 2018, the lowest in recent history.


New York MSA:Total Employment & Unemployment Rate


Research MethodologyAs our client noted, information provided by Old-Fashioned Forecasts (OFF) tends to be inaccurate and inconsistent, so our firm gathered additional data from the U.S. Census Bureau, Bureau of Labor Statistics, and CoStar to verify a strong database.

Using the information provided about Golden County and Northeasternville, we identified a comparable county to use in our analysis. Nassau County, NY possesses very similar characteristics to Golden County based on demographics, history, statistics, proximity to New York City, and overall description. We feel that Nassau County properly represents the subject property, town, and county for purposes of this report. However, to avoid confusion case specific county and city names are used in the report.

Northeast of New York

1.5-million Residents

Railroad Connection to New York


3.2 Long Island Office MarketRentsIn 2018 rents grew 0.5% to an average of $28.10 per square foot ($4.50 lower than the national average). Since 2012, rents have grown at an average annual rate of 1.55%. Although the growth rate declined from 1.2% in 2017 to 0.5% in 2018, rents are expected to again rise at a rate of 1.4% through 2019, reaching average rates of $28.50 per square foot.

Long Island office rent growth trails the national average and has even been one of the slowest areas in the country this cycle. This is primarily due to a lack of new construction and an abundance of Class C space. The lowest vacancy rates in years support demand dynamics and could lead to an increased growth rate should better product come to market.

Leasing and VacancyThe vacancy rate in 2018 of 6.9% percent is in line with the average of 7.0% since 2012 and is expected to drop slightly to 6.7% in 2019.

Vacancy rates are well below the historical average locally and nationally. Long Island has proven to be stable in lean times, with vacancy in the early part of the cycle remaining flat while other markets experienced a rise in vacancy. This should boost the confidence of long-term investors worried about a potential downturn.


Development PipelineNew construction in the area has been rather slow this cycle, with most new office space being added in nearby New York City. In 2018, only five properties were delivered and the largest was 11,000 square feet.

As of Q1 2019, seven properties with 470,732 square feet of new space are under construction throughout the region. However, 92.5% of this product is already pre-leased and the market is expected to continue to absorb new development.

SalesWhile Long Island is not typically known for a high volume of sales, low vacancy rates and stable income has attracted a higher number of investors. Sales volume averaged over $600 million the last three years, and 2019 is on pace to continue the trend. In the past 12 months, there have been 283 transactions at an average cap rate of 7.1%.


3.3 Long Island Retail MarketRentsIn 2018 rents grew 0.9% to an average of $30 per square foot ($9.42 higher than the national average). Since 2012, rents have grown at an average annual rate of 1.7%. Despite the minor slowdown in 2018, rents are expected to rise again at a rate of 1.7% through 2019, reaching an average rate of $31 per square foot. Something to note is that growth rates have been impacted by the shift away from big box malls and power centers. Excluding those from the data set demonstrates even stronger retail growth for smaller centers, like the subject property.

Leasing and VacancyThe vacancy rate in 2018 of 4.2% percent is in line with the average of 4.3% since 2012 and is expected to drop to 3.8% in 2019.

Net absorption picked up in 2018 after a slow 2017 that saw a high number of new deliveries. With a limited amount of new properties coming online and income in the area continuing to grow, it is projected that demand for space in the area will remain strong.


Development PipelineOver the past two years, 2 million square feet of new retail space has hit the market, which is a record over a two year stretch in this cycle.

At the beginning of 2019, 35 properties with 680,871 square feet of new space are under construction throughout the region. However, 81.5% of this product is already pre-leased, leaving plenty of room for further absorption.

SalesAs vacancy has steadily decreased, investor interest in the area has been high. The increasing strength in fundamentals combined with higher cap rates than nearby New York has bolstered sales activity, in both volume and deal velocity. In the past 12 months, there have been 475 transactions at an average cap rate of 6.5%. The top trades since the start of 2018 largely consist of stabilized assets in the Golden County submarkets.


3.4 Northeasternville / Golden County Office MarketRentsRents in Golden County are some of the most expensive on Long Island due to the proximity to New York City and access to transportation like the SURR and major highways. In 2018 rents grew 1.2% to $29.05 per square foot, almost a full dollar higher than the Long Island average. Rents are expected to continue this positive momentum in 2019 at a 1.6% growth rate.

Leasing and VacancyThe vacancy rate in 2018 of 7% percent is equivalent to the region but is expected to drop to 6.0% in 2019. Vacancy rates have been cut nearly in half since the end of the last recession and demand is still strong. Net absorption has been around 100,000 square feet the last five years with activity from of a diverse tenant makeup of insurance, government, law firms, healthcare, and more.


Development PipelineDevelopment this cycle has been limited, with almost every new project being built-to-suit. There have been no new deliveries in the last 12 months, but 8,219 square feet is in the pipeline for the next year. Businesses have been less attracted to the area due to a lack of a centralized urban core to attract young talent, which makes recent redevelopment efforts in places like Northeasternville so promising.

SalesPositive rent growth and stable occupancy has attracted investment to Golden County recently. Sales volume has topped $100 million in two of the past three years after never reaching $50 million prior to 2016. In the past 12 months, there have been 28 transactions at an average cap rate of 7.4%.


3.5 Northeasternville / Golden County Retail MarketRentsIn 2018 rents went down for the first time since 2011 at a rate of -0.2% to $28.45 per square foot. This only resulted in a one cent loss overall and should not be a concern going forward. In 2019 rent growth is expected to move back into the positive numbers at a 1.2% rate to $28.90 per square foot.

Leasing and VacancyThe Golden County vacancy rate in 2018 climbed slightly from 2017 and ended at 4.5%. Due to still strong fundamentals such as high median income and employment the vacancy rate is projected to drop 1.2% in 2019 to the very low rate of 3.3%.


Development Pipeline2018 saw the highest number of deliveries in Golden County since 2013 with over 150,000 square feet coming to the market. However, the future looks to be returning to the norm with only 55,062 square feet in the pipeline over the next four quarters. The lack of new supply combined with the already low vacancy rate bodes well for existing space going forward.

SalesConsistently high and stable occupancy continues to attract investors to Golden County. Sales volume reached nearly $200 million in 2018, by far the largest number since 2014. In the past 12 months, there have been 36 transactions at an average cap rate of 6.2%.


3.6 Future Trends

Green Building Strategy.Why Sustainability?

• The world population in 50 years is expected to be 9 billion.

• Growing by 200,000 people a day.

Demographics

• Americans now use an average of 80-100 gallons of water each day, enough to fill 1,600 drinking glasses.

Water

• 1 second to manufacture.• 100-400 years to degrade naturally.

Waste

• In 2001 humanity’s ecological footprint was 2.5 times larger than 1961.

• Stabilization requires annual greenhouse gas emissions, 80% below current levels.

Climate Change

• 84% of energy used in the U.S. is from fossil fuels.

• If everyone in the world lived as Americans do, we would need 5 Earths to support humanity.

Energy↓2-5

Less sick days annually.

↑4.8%-5.5% Productivity gains.

↑27% Higher employee

satisfaction.

↓44-52% Energy savings due

to daylighting.

↑10X Higher employee

productivity than the amount gained from operational savings.

Sustainability by the Numbers


Creating Value Through SustainabilityGreen building strategies decrease operating expenses, improve building marketability, contribute to a stronger return on investment and generate significant social and environmental benefits. According to the U.S. Green Building Council (USGBC), on average, owners who invest in green building strategies see approximately a 6.2% increase in rents, an 8.5% decrease in operating costs and a 6.4% increased occupancy. The reduction of operating costs will increase the building’s NOI which will have a positive effect on the asset value – for every $10,000 saved through energy efficiency, asset value increases by $153,846, assuming a 6.5% cap rate. Therefore additional upfront costs for sustainable improvements are usually offset in a foreseeable period by a decrease in long-term life cycle costs and increase in rents and values.

“U.S. Department of Energy study analyzed roughly 131 office properties, found 28% higher NOI 17% lower operating expenditures in green certified buildings (LEED or ENERGY STAR)”

Sale Premiums of Green Commercial

Buildings in the U.S.

Rental Premiums of Green Commercial

Buildings in the U.S.


The pool of capital interested in green projects is growing as well. Institutional investors in particular are beginning to finance new development, the retrofitting of existing structures, adaptive reuse of older buildings, and the purchase of stabilized projects. One key driver is the Responsible Property Investing (RPI) movement, supported by academic and major institutions such as the United Nations. With a motto of “doing well while doing good,” advocates of RPI stress triple bottom line accounting that tracks environmental and social impacts, as well as the traditional financial returns. RPI is becoming especially common with public pension funds, which account for a large share of real estate ownership in the country. Capital flows from foreign countries is another force for change. The real estate community has been more proactive on environmental issues in many western countries outside the U.S., in part due to stricter regulations.

In a competitive real estate market, a sustainable strategy is becoming increasingly important in order to stay competitive and increase value for tenants and owners alike. Sustainable design and construction will continue to be differentiator in new construction and existing building improvements.

• Improved well-being for occupants• Regulatory & climate change risk

mitigation• Tenant attraction & retention• Lower energy cost risk• Healthier buildings• Lower liability & risks• Reduced obsolescence• Market differentiation & reputation

General Benefits

FinancialBenefits

• Any upfront additional investment costs are usually offset by a decrease in long-term life cycle costs

• 6.2% Increase in rent• 6.4% Increased occupancy• 8.5% Lower operating costs• 6.8% Increase in building values• 9.2% Increase in return on investment

Green Building Rent Premiums


Market Analysis - Driverless CarsRidesharing and self-driving cars have moved from fantasy to reality. Services like Uber, Lyft, Snappcar, and Blablacar are rapidly changing the perception of car ownership and car usage. Combined with the emergence of autonomous vehicles, which are already operating in some places, this may be the next game-changer in real estate and area development. According to Deloitte research the success of shared and autonomous vehicles depend on how quickly the technologies are adopted by users. According to research conducted, major changes in mobility could already occur by 2020 and continue to change dramatically over the next 20 years. Deloitte predicts that by 2030 shared vehicles could overtake personally-owned vehicles in core urban markets. Shared driver-driven vehicles will likely grow quickly until 2030 before losing market share to shared autonomous vehicles.

Figure: Forecasts of new vehicle sales distribution in urban areas in the United States.


Decreasing car ownership and increasing reliance on shared or autonomous vehicles has significant implications for city street grids, building design and future development. An analysis by the Organization for Economic Co-operation and Development suggests that fleets of self-driving cars will completely remove the need for on-street parking freeing valuable space for alternative uses. In addition, the decreasing demand for parking due to shared and autonomous vehicles has interesting policy implications as well. Municipalities generally require real estate developers to provide a certain parking ratio depending on the size of the building. Parking requirements have a significant impact on the financial returns for the developer. However, due to the increasing share on citizens using public transportation or ride sharing, municipalities have started to rethink their parking policies.

Mobility’s Impact on Real Estate• Reduction of commercial/residential parking ratios

• Redevelopment of commercial and residential for pickup and drop off lanes

• Downtown parking lots available for redevelopment

• Some urban parking lanes becoming sidewalk cafés

• Less highway expansion, but more money for repairs

The shift in personal transportation has already had an affect on public policy and real estate development. Investors need to consider how this will impact their investments in the future in order to make the proper investment decisions today.


E-Commerce and Last Mile DeliveryThere has been plenty written about the impact of e-commerce on retail infrastructure. Store closings and malls struggling to redefine their purpose have been the subject of major stories in a variety of mainstream media outlets. Reading those stories, it’s easy to get the impression that e-commerce is cratering real estate markets and creating ghost towns.

That’s hardly the case, at least not in many major cities where e-commerce has actually had the opposite effect by increasing the demand for real estate. That may seem counterintuitive until exploring the dynamics of the e-commerce market. First is the consistent, strong growth that shows no sign of peaking. According to Statista, U.S. retail e-commerce sales grew from $298 billion in 2014 to $447 billion in 2017, an average of better than 13 percent growth per year.

Figure: Retail e-commerce sales in the United States from 2017 to 2023 (in million U.S. dollars).

“The rise of e-commerce is a primary reason for the growing demand for new warehouse space, strategically located within closer proximity to consumers”

But, if accommodating growth was the only issue, retailers would simply expand existing regional distribution centers in areas where land is relatively inexpensive and readily available. That’s not a viable strategy because the e-commerce market is dominated by a few major players who essnetially control the market. First, it was two-day delivery, then next-day delivery, and now same-day delivery. Almost 25% of consumers are willing to pay a premium for same-day delivery and millennials are expected to bring this number up over time, as they list speed as their main concern about online shopping.

Everyone in the market must adapt to these changing expectations or risk losing market share. It simply isn’t possible to consistently provide next-day or same-day delivery from regional warehouses. The only way to meet these expectations is to move products closer to large groups of consumers. Many retailers are building smaller last-mile distribution centers and transforming their existing retail stores to places where customers can see and purchase a product and then have it delivered from a smaller warehouse. This creates potential opportunities for obsolete urban retail stores to transform as the market shifts.

E-commerce is only expected to grow, causing threats to traditional retail but also offering tremendous opportunities for those who wisely navigate through changing times. We do not feel the subject property will suffer from the growing e-commerce market.


4. Property Description

4.1 Physical DescriptionThe subject property sits on a half acre site at the intersection of Main Street and Railroad Avenue in Northeasternville. It is within walking distance to the SURR, which is how many of the workers who live outside of the city commute to work. The local businesses around the property include a grocery store, a small condo complex, a house of worship, a small park, and a few culturally diverse restaurants. The condo units range between 700-1200 square feet and are between one and three bedrooms. The first level contains three local retailers with an average suite size of 1,482 square feet. The second and third floor are office suites with six tenants. The average office suite size is 1,565 square feet. In addition to the three story building there is a parking lot on the property.

4.2 Current ConditionsThe property was built approximately five years ago. There are no issues with the property or capex other than routine maintenance.

4.3 Proposed Capital ProjectsThe overall condition of the property is good and we do not believe there to be any deferred maintenance or structural issues that need to be addressed. We recommend that the exterior of the building and common areas receive updated color palette, fixtures, and finishes. The individual tenant suites will be upgraded to meet modern demands as new tenants move in or existing tenants renew leases.

The biggest capital project will be upgrading the building to LEED Silver standards. By conforming to LEED standards we expect operating costs to decrease approximately 8% and per square foot rents to increase by $1-$1.50, depending on the tenant. Additionally, many tenants have been seeking out LEED Certified buildings and we feel this will help keep existing tenants longer and attract new tenants faster when vacancy occurs.

Although LEED Silver Certification is not easy to attain, the subject property holds a significant advantage that makes the task achievable. The proximity to the SURR station in Northeasternville earns the project high marks in the alternative transport category as nearly 50% of people can commute to the building without driving a traditional gas vehicle. By adding electric vehicle charging stations in the parking lot, bicycle storage on-site, and hosting carpool matching events the property can earn enough points (13) in one category to get 26% of the way to Silver Certification. Another improvement that will earn the building a block of points is the addition of a green roof. In doing so points are earned in the rainwater management, heat island reduction, and outdoor water use reduction categories. The rest of the required improvements will be relatively easy and sensible upgrades as part of the capital improvement plan. For example, installing reduced water use toilets, energy efficient light fixtures that also limit light pollution, and only utilizing green cleaning supplies. These are just a few examples of improvements that will not only help to achieve LEED Silver Certification, but also create expense savings for the building.


Due to the central downtown location of the property we suggest the parking lot be reconfigured to allow for an outdoor market or similar use. Considering the majority of the building is office space the parking lot is likely underutilized on weekends and therefore perfectly suitable for a farmers market.

An Amazon Locker will be a good addition to the property that will come at a very low cost. The central location of the property and its proximity to a transit center will make it an ideal candidate for a package pickup location.

LEED v4 for Operations & Maintenance: Existing BuildingsProject Checklist Project Name: Mixed-Use Property Northeasternville

Y ? N

13 0 0 15 10 0 0 Indoor Environmental Quality 1713 Credit 15 Prereq Required

Prereq Required

7 0 0 Sustainable Sites 10 Prereq RequiredPrereq Required 2 Credit 2Credit 2 Credit 2

2 Credit 3 1 Credit 1


1 Credit 1 Credit 4


1 Credit 1 1 Credit 1Credit 1

6 0 0 Water Efficiency 12 2 Credit 2Prereq Required 1 Credit Occupant Comfort Survey 1Prereq Required

1 Credit 2 1 0 0 Innovation 63 Credit 5 Credit 5

Credit 3 1 Credit 1

2 Credit 2

0 0 0 Regional Priority 412 0 0 Energy and Atmosphere 38 Credit Regional Priority: Specific Credit 1

Prereq Required Credit Regional Priority: Specific Credit 1Prereq Required Credit Regional Priority: Specific Credit 1Prereq Required Credit Regional Priority: Specific Credit 1Prereq Required

2 Credit 2 51 0 0 TOTALS Possible Points: 1102 Credit 2 Certified: 40-49 points, Silver: 50-59 points, Gold: 60-79 points, Platinum: 80+ points

Credit 3

5 Credit 20

2 Credit 2

1 Credit 3Credit 5Credit 1

2 0 0 Materials and Resources 8Prereq RequiredPrereq Required

1 Credit 1

1 Credit 1Credit 2Credit 2

Existing Building Commissioning— Analysis

Building-Level Energy Metering

Advanced Energy Metering

Site Management Policy

Indoor Water Use Reduction

Site Management

Site Improvement Plan

Location and TransportationAlternative Transportation

Site Development-Protect or Restore Habitat

Rainwater Management

Heat Island Reduction

Light Pollution Reduction

Indoor Water Use Reduction

Building-Level Water Metering

Outdoor Water Use Reduction

Solid Waste Management- Ongoing

LEED Accredited Professional

Integrated Pest Management

Enhanced Indoor Air Quality Strategies

Ongoing Purchasing and Waste Policy

Purchasing- Facility Management and Renovation

Innovation

Green Cleaning- Equipment

Green Cleaning- Custodial Effectiveness Assessment

Enhanced Refrigerant Management

Renewable Energy and Carbon Offsets

Purchasing- Ongoing

Demand Response

Fundamental Refrigerant Management

Optimize Energy Performance

Indoor Air Quality Management Program

Purchasing- Lamps

Minimum Indoor Air Quality Performance

Environmental Tobacco Smoke Control

Thermal Comfort

Green Cleaning- Products and Materials

Interior Lighting

Green Cleaning Policy

Daylight and Quality Views

Facility Maintenance and Renovations Policy

Energy Efficiency Best Management Practices

Cooling Tower Water Use

Minimum Energy Performance

Ongoing Commissioning

Existing Building Commissioning—Implementation

Water Metering


4.4 Site Plan

4.5 Stacking Plan


13,835 Total Square Feet of Gross Leasable Area

Tenant Name Level Use Area (SF) Lease End DateTitan Fine Gems 1 Retail 1,250 2023

Banner’s Green Machine Juices 1 Retail 1,500 2021

Stark Bank & Trust 1 Retail 1,695 2020

Knowhere To Go 2 Office 1,565 2024

Bifrost Transit Services 2 Office 1,850 2023

Plant Your Groots Real Estate Agents 2 Office 1,280 2021

Shield Strategies, Ltd. 3 Office 1,565 2022

Visionary Vanguard 3 Office 1,252 2020

Mjolnir Renovations 3 Office 1,878 2021

68% Office

32% Retail

4.6 Rent Roll

SCENARIO

Scenario A Buy & HoldScenario B Quick Value-AddScenario C RejectScenario D Hold & Improve

HOLDING PERIOD

Ten YearsTwo YearsN/ATen Years


5. Financial Underwriting5.1 Timing Assumption

Analysis Start Date - July 1st, 2019

The client will receive our report in April 2019. After factoring in the time it takes to make the final investment decision, contract execution, due diligence, and closing, it’s reasonable to expect the client to take control of the property in Q3 2019.

Projected Holding Period The projected holding period depends on the scenario:

In Scenario A and Scenario D, the property is being held through any potential market downturn. Our research indicates a market correction is likely to take place in between 2021 and 2022. Looking back historically, it is reasonable to expect a 7-10 year market cycle. For our analysis we assume the property will be held for 10 years. Market conditions may shift the holding period.

In Scenario B the property is purchased, improved, and sold before a market slowdown. With a correction estimated to take place in the next two years a very short holding period of 2 years was assumed.


5.2 Revenue Assumptions

Current Rent RollThe subject property has roughly 14,000 square feet of rentable area occupied by nine tenants. The lease details are as follows:

Rollover ExposureIt is important to analyze the lease rollover exposure in order to determine the risk of tenants not renewing their leases. The bar chart below shows that 50% of tenants may move out within the next two years.

Tenant Name Suite Use Area (SF)

% of Total Area

Lease End Date

Potential Base Rent

Expense Recoveries

Potential Gross

Revenue

Titan Fine Gems 1 Retail 1,250 9.04% 2023 $43,750 $3,763 $47,513

Banner’s Green Machine Juices 2 Retail 1,500 10.84% 2021 $49,500 $4,515 $54,015

Stark Bank & Trust 3 Retail 1,695 12.25% 2020 $47,460 $5,102 $52,562

Knowhere To Go 1 Office 1,565 11.31% 2024 $38,358 $0 $38,358

Bifrost Transit Services 2 Office 1,850 13.37% 2023 $42,920 $0 $42,920

Plant Your Groots Real Estate

Agents

3 Office 1,280 9.25% 2021 $40,832 $0 $40,832

Shield Strategies, Ltd. 4 Office 1,565 11.31% 2022 $45,385 $0 $45,385

Visionary Vanguard 5 Office 1,252 9.05% 2020 $43,570 $0 $43,570

Mjolnir Renovations 6 Office 1,878 13.57% 2021 $49,016 $0 $49,016

TOTAL 13,835 100% $400,791 $13,379 $414,170

Lease Rollover Exposure (% of Leasable Area)

Property Type Class B Class B+ Class B+ with LEED

Class A Class A with LEED

Office $30.00 / SF $31.00 / SF $32.00 / SF $33.00 / SF $34.00 / SF

Retail $34.00 / SF $35.00 / SF $36.00 / SF $37.00 / SF $38.50 / SF

SCENARIO

Scenario A Class B Quality SpaceScenario B Class B+ Quality SpaceScenario C N/AScenario D Class A Quality Space


During due diligence the investor should approach the current tenants to discuss the potential of an early lease renewal that would mitigate any potential vacancy risk and income loss. An early renewal will create certainty for the owner as well as the tenant. Due to the great location, the economic strength, and growth of the New York metro lease renewals are very likely.

Market Rent AssumptionDuring due diligence the investor should approach the current tenants to discuss the potential of an early lease renewal that would mitigate any potential vacancy risk and income loss. An early renewal will create certainty for the owner as well as the tenant. Due to the great location, the economic strength, and growth of the New York metro lease renewals are very likely.

The subject property is currently classified as a Class B mixed-use building. Through extensive remodeling measures and LEED certification in Scenario D, the project quality will be improved significantly, transforming the property to a Class A building. Sustainability measures lead to increased productivity and worker satisfaction as well as better health standards for building tenants. This leads to an increased attractiveness for tenants and is reflected in higher rents. In addition to increased rents LEED also lowers operating expenses (primarily in utilities and maintenance). The NNN retail lease structure results in expense savings for the retail tenants. In order to recapture the initial investment made by the owner to meet LEED standards, retail rents are expected to be at a premium. In Scenario B minor improvements are suggested resulting in a Class B+ building.

In order to estimate current market rental rates, market reports as well as trends in the local rental market have been reviewed. Further, active leasing brokers in the New York MSA have been surveyed leading to the following market rents:


General VacancyCommon market practice of risk-averse investors is to include allowances in their underwriting to account for potential loss of revenue resulting from both physical vacancy and non-payment of rent by existing tenants. Based on conducted analysis of current underwriting in the market as well as the current market vacancy for office (6.0%) and retail (3.3%) properties in Golden County the financial model includes a 5.0% general vacancy rate, grossed up for absorption and turnover, and reduced by actual absorption and turnover vacancy.

Potential Other IncomeThe subject property has a building coverage ratio (BCR) of roughly 20%, meaning that only 20% of the land parcel is covered by the building when looking from above. Consequently, it can be inferred that the building has plenty of on-site parking spaces with most of the spots not being used over the weekend when offices are closed. This available space on the weekend is promising because it is well suited for a weekly farmers market. With people wanting to know where their food is coming from, farmers markets are a growing trend and perfectly suited to supplement rental income.

The cost of retrofitting the parking lot is expected to be $15,000. When taking vendor space and parking requirements into consideration, approximately 40 vendor stalls can be placed on the parking lot every weekend. At a reasonable price of $25 per stall the farmers market, at full occupancy, creates an additional income of $48,000 annually.

In addition to the monetary incentive, a farmers market also creates value and benefits for the surrounding community. These benefits include neighborhood camaraderie, supporting the local economy, and buying products from a direct food source.


5.3 Operating Expenses AssumptionsBased on the review of historical operating expenses and capital reserves as well as comparable properties, we project the operating and capital expenses as follows:

As already mentioned, pursuing LEED certification by implementing sustainable measures will reduce the operating expenses. According to our research, sustainability features reduce controllable operating expenses by roughly 8.0%. At the subject property the savings rate is being applied to the utilities/heat, management, and leasing expenses. These savings become active after sustainable measures have been implemented in 2020. Due to the office full-service leases, this will significantly reduce the expenses paid by the owner.

Value increase of $97,200

due to LEED Certification *assuming 7% CAP Rate

OPERATING EXPENSESOperating Expenses Annual Expenses % Fixed Comments

Insurance $0.46 / SF 100%

Utilities / Heat $4.30 / SF 100%

Common Area Maintenance $1.84 / SF 100%

Structural Repairs & Maintenance $1.22 / SF 100% Recovery Items Retail

Management & Leasing 5% of Effective Gross Income 100% Recovery Items Retail

Legal & Professional $0.27 / SF 100%

Reserves $0.34 / SF 100% Recovery Items Retail

Real Estate Taxes $9.25 / SF 100% Projected increases:2022 to $9.50 / SF2024 to $9.75 / SF

2026 to $10.00 / SF


5.4 Capital Expenditure AssumptionsThe estimated capital expenditures strongly depend on the selected scenario. By pursuing Scenario A, a buy & hold strategy, no capital expenditures other than tenant improvement allowances are projected.

In Scenario B, a quick value-add of the building is anticipated. This strategy results in a short holding period that does not provide enough time to fully renovate the tenant spaces. Therefore, minor improvement of the tenant spaces occurs which leads to the following projected capital expenditures:

Scenario B - Quick Value-AddImprovement of Tenant Space Improvement Costs

Estimated Costs Office $30.00 / sf

Estimated Costs Retail $25.00 / sf

Three month improvement period will take place directly after purchase.

Construction costs will be distributed via bell curve.

In Scenario D, the hold & improve strategy, a longer holding period is being estimated that provides enough time to renovate the tenant spaces in order to bring them up to modern standards, achieve LEED certification, and establish a farmers market as an additional income source. The extensive upgrades of the tenant spaces will be pursued step-by-step after leases expire, leading to the following estimated capital expenditures:

Scenario D - Hold & ImproveLEED Certification LEED Certification Fee: Building Operations and Maintenance

Registration Fee $1,500

Precertification Flat Fee $5,000

Certification Review $1,350

---------------------------------------------

Total $7,850

Estimated costs per square foot to improve to LEED Standards $15.00 / sf

Extensive Remodeling of Tenant Space Remodeling Costs

Estimated Costs Office $55.00 / sf

Estimated Costs Retail $50.00 / sf

Remodeling will take place once the tenant’s current lease has expired.

Construction costs will be distributed via bell curve.

Farmers Market Cost to incorporate Farmers Market

Estimated Costs $15,000

Costs to incorporate the market will be distributed via bell curve.


5.5 Capital Market Assumptions

Inflation RatesOur market research estimated the following inflation rates:

As previously mentioned, a slow-down of the market in the coming years is expected. This is taken into consideration with a decrease in inflation rates until 2022, followed by continuous rate hikes until 2029.


Discount and Capitalization RatesThe following table summarizes current going-in and exit capitalization rates as well as discount rates for the different property types and classes of the New York market. The rates are based on reviews of capital markets publications and statistics as well as interviews with brokers and investors:

Generally speaking terminal/exit/going out capitalization rate assuming a 10 year holding period are usually about 50 basis points higher than the going in capitalization rate because it takes market risks as well as additional age of the building into account. An estimated short holding period therefore leads to a tighter spread. In addition, major improvements of the building result in a decrease of going out capitalization rates leading to the following assumed rates:

Selling CostsCosts of sale are typically paid by the seller and include broker fees, legal costs, transfer taxes, and escrow agent costs. They vary as a percentage of the sales price. Based on our research and in consideration of the projected sales price of the property, we conservatively estimate selling cost of 6%.

• Real Estate Commissions: 4% Fury Management & Leasing Co.

• NYC Real Property Transfer Tax: 1.425%

• New York State Real Property Transfer Tax: 0.40%

• Additional Closing Costs: 0.20%

Total: 6%

Class B Class B+ Class B+ with LEED

Class A Class A with LEED

Going In 7.00% 6.75% 6.60% 6.50% 6.35%

Going Out 7.50% 7.25% 7.10% 7.00% 6.85%

Discount Rate 8.00% 8.00% 8.00% 8.00% 8.00%

ASSUMPTIONS

Scenario Date of Sale Property Class

Going In Cap Rate

Exit Cap Rate Discount Rate

A - Buy & Hold June 2026 B 7.00% 7.50% 8.00%

B - Quick Value-Add June 2021 B+ 7.00% 7.00% 8.00%

D - Hold & Improve June 2026 A 7.00% 6.85% 8.00%


Real estate is an extremely capital intensive sector. In order to acquire real assets, many investors use debt financing to reduce the required equity in investment deals. This procedure is called leveraging and beyond lowering capital requirements it also increases potential returns, assuming that the return on the investment is greater than the cost of borrowing.

The mixed-use investment in Northeasternville will be subject to an assumable mortgage from First Northeasternville Bank (FNB), a well known real estate lender in the area, upon its purchase. A traditional 75% LTV mortgage based on the appraised value at the current interest rate of approximately 4.75% amortized over 25-years is being applied.

Debt Financing

Due to the projected increase in interest rates in the coming years the mortgage rate is locked-in during its term. Locking in interest rates when rates are projected to increase is highly advisable because of two reasons.

1. It takes away the interest rate risk for the current owner.

2. The spread between the locked-in interest rate and a future higher interest rate creates value for the current mortgage holder.

The spread can be monetized when the property is sold because by taking over the mortgage the future owner receives access to a lower than the current market interest rate, which will lead to lower interest payments and higher returns.

Therefore, it can be expected that the assumable mortgage will be taken over by the future buyer and will not trigger any prepayment penalties if selling before the end of the term. Usually, in order to transfer the mortgage the lender charges a service fee of 0.5% of the outstanding loan balance which must be paid by either the original owner, or the buyer, depending on the agreement. Because of likely rising interest rates, service fees will be paid by the future buyer.

Lender Loan Amount ($) LTV (%) Origination Term (Years) Interest (%) Amortization (Years)

First Northeasternville Bank (FNB)

$1,541,334 75% July 1, 2019 10 4.75% 25


$2,140,000* $2,351,950** $2,100,000

Direct Cap Market Comparables Discounted Cash Flow

*Based on provided NOI **Assuming $170 per square foot

Purchase Price / Appraised ValueAccording to conducted research, mixed-use buildings in the city of Northeasternville, with special emphasis on the Downtown area, have ranged from approximately $150 to over $200 per square foot over the past few years. Some of these buildings have been newly constructed, with others being approximately 20 years old. In addition, retail cap rates in Northeasternville average 6.2% and office cap rates are at 7.4%, leading to a weighted-average blended cap rate of 7.0% for the subject property.

Taking the market condition, location, and future potential into consideration the purchase price should be between $2.1MM and $2.3MM. The final purchase price hinders heavily on the negotiating power of the buyer and potential competition from other investors. For modeling purposes the lower end of the price range is taken into consideration, leading to an assumed appraised value/purchase price of $2.1MM.

5.6 Discounted Cash Flow ResultsWe conducted a discounted cash flow analysis using ARGUS Enterprise Software:

CASH FLOW RESULT

Scenario A Scenario B Scenario D

Buy & Hold Quick Value-Add Hold & Improve

Unleveraged Net Present Value (NPV) -$284,790 -$462,138 $209,438

Unleveraged Internal Rate of Return (IRR) 6.14% -3.51% 8.98%

Leveraged Net Present Value (NPV) $4,305 -$374,030 $457,722

Leveraged Internal Rate of Return (IRR) 8.58% -21.52% 12.69%

In capital budgeting, there are a number of different approaches that can be used to evaluate a project or an investment. In real estate, the most common figures used in investment decision making are the net present value (NPV) and the internal rate of return (IRR). Both indicators should lead to the same investment decision. However, IRR results can be inefficient if the investment produces a mixture of multiple positive and negative cash flows during the holding period. It is therefore highly recommended to use the NPV for final decision making.

When comparing introduced cash flow results it becomes quite clear that the hold and improve strategy is providing the highest NPV and is the most advantageous for an investor seeking stable, long-term cash flow.


Analysis 1: Change in Purchase Price +/- $100,000

Scenario A Buy & Hold

Scenario BQuick Value-Add

Scenario DHold & Improve

Worst Case +$100,000Leveraged Net Present Value (NPV) -$78,674 -$469,037 $374,742


Best Case -$100,000Leveraged Net Present Value (NPV) $87,285 -$279,023 $540,702


Conducting a sensitivity analysis is mandatory in order to find out how different values of each independent variable affect a particular dependent variable under a given set of assumptions. Through conducting sensitivity analysis an investor is able to investigate the robustness of an investment and make a more sound decision. For the subject property in Northeasternville four analyses focusing on the levered output have been conducted:

5.7 Sensitivity Analysis

Analysis 2: Change in Exit Capitalization Rate +/- 0.5%




Worst Case +0.5%Leveraged Net Present Value (NPV) -$62,691 -$497,158 $357,786


Best Case -0.5%Leveraged Net Present Value (NPV) $80,872 -$231,958 $600,347


Analysis 3: Change in Rental Market +/- 5%




Worst Case -5%Leveraged Net Present Value (NPV) -$201,991 -$433,405 $209,333


Best Case +5%

Leveraged Net Present Value (NPV) $210,601 -$314,652 $706,585


Analysis 4: Combination of 1, 2 & 3




Worst CaseLeveraged Net Present Value (NPV) -$344,212 -$647,750 $34,901


Best Case Leveraged Net Present Value (NPV) $378,998 -$73,201 $944,319

Leveraged Internal Rate of Return (IRR) 14.61% 3.16% 16.48%


6. Special ConsiderationFuture Potential DevelopmentThe subject property has a building coverage ratio (BCR) of roughly 20%. Consequently, it can be inferred that the building has ample on-site parking. Due to the changes in personal transportation methods we foresee parking requirements to be further reduced in the coming years. This will likely have a positive effect on commercial parking ratios, meaning that obsolete parking can be used for other, more productive income producing usages. Our client could pursue the entitlement of a future freestanding building addition. The corner location, on Railroad Avenue and Main Street, is highly visible and well exposed to traffic. Both factors are very important for retailers and restaurants making this site more than suitable for a potential future development. In development, the greatest value is created in the pre-development and construction phase. For our client this creates a great opportunity. By pursuing the entitlement and approval process for a potential future development additional value is being created. Once entitled the project can be either sold as a separate parcel or included in the sale of the existing building which would greatly increase the future sale price.


Strip Center

Restaurant

Strip Center

Asking Price

$2,000,000Property Type: Retail

Cap Rate: 6.00% Lot Size: 0.30 AC

GLA: 3,860 SF Price per SF: $520

Year Built: 1972

Available free standing, retail properties in Northeasternville are marketed as follows:

Restaurant

Asking Price

$2,600,000Property Type: Retail

Cap Rate: 5.08% Lot Size: 0.38 AC

GLA: 1,690 SF Price per SF: $1,500

Year Built: 1993

*Price strongly depends on individual circumstance (tenant, lease contract, NOI, etc.)

Numbers should serve the investor as a rough guideline of potential future value in case parts of the site get developed.


Our analysis concludes that current market conditions warrant a hold & improve strategy. This is the recommended strategy because it provides the highest net present value.

Additionally, our sensitivity analysis indicates that Scenario D’s worst case underwriting would still result in a higher NPV than the best case underwriting of the other three scenarios, making the hold & improve strategy clearly the most attractive investment strategy.

7.1 Final Recommendation

7. Final Recommendation

Hold & Improve Leveraged NPV

$457,722


Appendix / ARGUS Model Reports


Buy & Hold - ARGUS Cash Flow ReportBuy & Hold - Argus Cash Flow Report

Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Quarter 5 Quarter 6 Quarter 7 Quarter 8 TotalFor the Quarters Ending Sep-2019 Dec-2019 Mar-2020 Jun-2020 Jun-2020 Sep-2020 Dec-2020 Mar-2021 Jun-2021 Jun-2021

Rental Revenue Potential Base Rent 100,198 100,198 100,198 100,198 400,791 103,918 103,918 103,918 103,918 415,672 Absorption & Turnover Vacancy 0 0 0 0 0 -8,051 0 0 0 -8,051 Free Rent 0 0 0 0 0 -5,784 0 0 0 -5,784 Scheduled Base Rent 100,198 100,198 100,198 100,198 400,791 90,082 103,918 103,918 103,918 401,836Total Rental Revenue 100,198 100,198 100,198 100,198 400,791 90,082 103,918 103,918 103,918 401,836

Other Tenant Revenue Total Expense Recoveries 3,345 3,345 3,345 3,345 13,379 3,348 3,782 3,782 3,782 14,692Total Other Tenant Revenue 3,345 3,345 3,345 3,345 13,379 3,348 3,782 3,782 3,782 14,692

Total Tenant Revenue 103,543 103,543 103,543 103,543 414,170 93,430 107,699 107,699 107,699 416,529

Potential Gross Revenue 103,543 103,543 103,543 103,543 414,170 93,430 107,699 107,699 107,699 416,529

Vacancy & Credit Loss Vacancy Allowance -5,010 -5,010 -5,010 -5,010 -20,040 -3,175 -5,196 -5,196 -5,196 -18,762Total Vacancy & Credit Loss -5,010 -5,010 -5,010 -5,010 -20,040 -3,175 -5,196 -5,196 -5,196 -18,762

Effective Gross Revenue 98,533 98,533 98,533 98,533 394,130 90,256 102,504 102,504 102,504 397,766

Operating Expenses Common Area Maintenance 6,364 6,364 6,364 6,364 25,456 6,491 6,491 6,491 6,491 25,966 Insurance 1,591 1,591 1,591 1,591 6,364 1,623 1,623 1,623 1,623 6,491 Legal & Professional 934 934 934 934 3,735 953 953 953 953 3,810 Management & Leasing 4,927 4,927 4,927 4,927 19,707 4,513 5,125 5,125 5,125 19,888 Real Estate Tax 0 63,987 0 63,987 127,974 0 63,987 0 63,987 127,974 Reserves 1,176 1,176 1,176 1,176 4,704 1,199 1,199 1,199 1,199 4,798 Structural Repairs & Maintenance 4,220 4,220 4,220 4,220 16,879 4,304 4,304 4,304 4,304 17,216 Utilities/Heat 14,873 14,873 14,873 14,873 59,491 15,170 15,170 15,170 15,170 60,680Total Operating Expenses 34,084 98,071 34,084 98,071 264,309 34,253 98,852 34,866 98,852 266,824

Net Operating Income 64,449 462 64,449 462 129,821 56,002 3,651 67,638 3,651 130,942

Leasing Costs Tenant Improvements 0 0 0 0 0 28,011 0 0 0 28,011 Leasing Commissions 0 0 0 0 0 17,267 0 0 0 17,267 Total Leasing Costs 0 0 0 0 0 45,278 0 0 0 45,278

Total Leasing & Capital Costs 0 0 0 0 0 45,278 0 0 0 45,278

Cash Flow Before Debt Service 64,449 462 64,449 462 129,821 10,725 3,651 67,638 3,651 85,665

Debt Service Interest First Northeasternville Bank Loan 18,670 18,572 18,473 18,371 74,086 18,269 18,166 18,061 17,955 72,451 Total Interest 18,670 18,572 18,473 18,371 74,086 18,269 18,166 18,061 17,955 72,451

Principal First Northeasternville Bank Loan 8,268 8,366 8,465 8,567 33,666 8,669 8,772 8,877 8,983 35,301 Total Principal 8,268 8,366 8,465 8,567 33,666 8,669 8,772 8,877 8,983 35,301

Total Debt Service 26,938 26,938 26,938 26,938 107,752 26,938 26,938 26,938 26,938 107,752

Cash Flow After Debt Service 37,511 -26,476 37,511 -26,476 22,069 -16,213 -23,287 40,700 -23,287 -22,087

Financing Proceeds First Northeasternville Bank Loan 1,575,000 0 0 0 1,575,000 0 0 0 0 0 Total Proceeds 1,575,000 0 0 0 1,575,000 0 0 0 0 0

Total Financing (Net) 1,575,000 0 0 0 1,575,000 0 0 0 0 0Cash Flow Available for Distribution 1,612,511 -26,476 37,511 -26,476 1,597,069 -16,213 -23,287 40,700 -23,287 -22,087


Buy & Hold - ARGUS Cash Flow Report (cont.)Buy & Hold - Argus Cash Flow Report



Rental Revenue Potential Base Rent 106,889 106,889 106,889 106,889 427,554 108,144 108,144 108,144 108,144 432,576 Absorption & Turnover Vacancy -12,512 0 0 0 -12,512 -4,099 0 0 0 -4,099 Free Rent -9,947 0 0 0 -9,947 -3,689 0 0 0 -3,689 Scheduled Base Rent 84,429 106,889 106,889 106,889 405,095 100,355 108,144 108,144 108,144 424,787Total Rental Revenue 84,429 106,889 106,889 106,889 405,095 100,355 108,144 108,144 108,144 424,787







Net Operating Income 50,370 5,927 69,914 5,927 132,139 65,303 6,828 70,815 6,828 149,773

Leasing Costs Tenant Improvements 46,125 0 0 0 46,125 16,240 0 0 0 16,240 Leasing Commissions 29,769 0 0 0 29,769 11,071 0 0 0 11,071 Total Leasing Costs 75,894 0 0 0 75,894 27,311 0 0 0 27,311

Total Leasing & Capital Costs 75,894 0 0 0 75,894 27,311 0 0 0 27,311

Cash Flow Before Debt Service -25,524 5,927 69,914 5,927 56,245 37,991 6,828 70,815 6,828 122,462




Cash Flow After Debt Service -52,462 -21,011 42,976 -21,012 -51,508 11,053 -20,110 43,877 -20,110 14,710

Financing Proceeds First Northeasternville Bank Loan 0 0 0 0 0 0 0 0 0 0 Total Proceeds 0 0 0 0 0 0 0 0 0 0

Total Financing (Net) 0 0 0 0 0 0 0 0 0 0Cash Flow Available for Distribution -52,462 -21,011 42,976 -21,012 -51,508 11,053 -20,110 43,877 -20,110 14,710



Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Quarter 17 Quarter 18 Quarter 19 Quarter 20 Total Quarter 21 Quarter 22 Quarter 23 Quarter 24 Total Quarter 25For the Quarters Ending Sep-2023 Dec-2023 Mar-2024 Jun-2024 Jun-2024 Sep-2024 Dec-2024 Mar-2025 Jun-2025 Jun-2025 Sep-2025

Rental Revenue Potential Base Rent 110,939 110,939 110,939 110,939 443,756 112,941 112,941 112,941 112,941 451,762 113,902 Absorption & Turnover -8,719 0 0 0 -8,719 -4,265 0 0 0 -4,265 -5,355 Free Rent -6,713 0 0 0 -6,713 -3,838 0 0 0 -3,838 -3,213 Scheduled Base Rent 95,507 110,939 110,939 110,939 428,324 104,837 112,941 112,941 112,941 443,659 105,334Total Rental Revenue 95,507 110,939 110,939 110,939 428,324 104,837 112,941 112,941 112,941 443,659 105,334

Other Tenant Revenue Total Expense Recoveries 4,326 4,668 4,668 4,668 18,329 4,940 4,940 4,940 4,940 19,762 5,105Total Other Tenant Revenue 4,326 4,668 4,668 4,668 18,329 4,940 4,940 4,940 4,940 19,762 5,105

Total Tenant Revenue 99,833 115,607 115,607 115,607 446,653 109,778 117,881 117,881 117,881 463,421 110,439

Potential Gross Revenue 99,833 115,607 115,607 115,607 446,653 109,778 117,881 117,881 117,881 463,421 110,439

Vacancy & Credit Loss Vacancy Allowance -3,362 -5,547 -5,547 -5,547 -20,003 -3,573 -5,647 -5,647 -5,647 -20,514 -3,628Total Vacancy & Credit Loss -3,362 -5,547 -5,547 -5,547 -20,003 -3,573 -5,647 -5,647 -5,647 -20,514 -3,628

Effective Gross Revenue 96,471 110,060 110,060 110,060 426,650 106,205 112,234 112,234 112,234 442,907 106,811

Operating Expenses Common Area Maintenance 6,929 6,929 6,929 6,929 27,717 7,089 7,089 7,089 7,089 28,355 7,252 Insurance 1,732 1,732 1,732 1,732 6,929 1,772 1,772 1,772 1,772 7,089 1,813 Legal & Professional 1,017 1,017 1,017 1,017 4,067 1,040 1,040 1,040 1,040 4,161 1,064 Management & Leasing 4,824 5,503 5,503 5,503 21,332 5,310 5,612 5,612 5,612 22,145 5,341 Real Estate Tax 0 63,987 0 63,987 127,974 0 63,987 0 63,987 127,974 0 Reserves 1,280 1,280 1,280 1,280 5,122 1,310 1,310 1,310 1,310 5,239 1,340 Structural Repairs & 4,594 4,594 4,594 4,594 18,378 4,700 4,700 4,700 4,700 18,800 4,808 Utilities/Heat 16,193 16,193 16,193 16,193 64,774 16,566 16,566 16,566 16,566 66,264 16,947Total Operating Expenses 36,570 101,237 37,250 101,237 276,293 37,787 102,075 38,089 102,075 280,027 38,564

Net Operating Income 59,901 8,823 72,810 8,823 150,357 68,418 10,158 74,145 10,158 162,880 68,246

Leasing Costs Tenant Improvements 31,889 0 0 0 31,889 16,996 0 0 0 16,996 17,383 Leasing Commissions 20,074 0 0 0 20,074 11,518 0 0 0 11,518 9,543 Total Leasing Costs 51,963 0 0 0 51,963 28,514 0 0 0 28,514 26,926

Total Leasing & Capital Costs 51,963 0 0 0 51,963 28,514 0 0 0 28,514 26,926

Cash Flow Before Debt Service 7,938 8,823 72,810 8,823 98,394 39,903 10,158 74,145 10,158 134,366 41,320

Debt Service Interest First Northeasternville Bank 16,945 16,825 16,704 16,583 67,057 16,459 16,334 16,208 16,080 65,081 15,950 Total Interest 16,945 16,825 16,704 16,583 67,057 16,459 16,334 16,208 16,080 65,081 15,950

Principal First Northeasternville Bank 9,993 10,113 10,234 10,355 40,695 10,479 10,604 10,730 10,858 42,671 10,988 Total Principal 9,993 10,113 10,234 10,355 40,695 10,479 10,604 10,730 10,858 42,671 10,988

Total Debt Service 26,938 26,938 26,938 26,938 107,752 26,938 26,938 26,938 26,938 107,752 26,938

Cash Flow After Debt Service -19,000 -18,115 45,872 -18,115 -9,358 12,965 -16,780 47,207 -16,780 26,614 14,382

Financing Proceeds First Northeasternville Bank 0 0 0 0 0 0 0 0 0 0 0 Total Proceeds 0 0 0 0 0 0 0 0 0 0 0

Total Financing (Net) 0 0 0 0 0 0 0 0 0 0 0Cash Flow Available for -19,000 -18,115 45,872 -18,115 -9,358 12,965 -16,780 47,207 -16,780 26,614 14,382



Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Quarter 26 Quarter 27 Quarter 28 Total Quarter 29 Quarter 30 Quarter 31 Quarter 32 Total Quarter 33 Quarter 34For the Quarters Ending Dec-2025 Mar-2026 Jun-2026 Jun-2026 Sep-2026 Dec-2026 Mar-2027 Jun-2027 Jun-2027 Sep-2027 Dec-2027

Rental Revenue Potential Base Rent 114,383 114,383 114,383 457,052 115,333 115,807 115,807 115,807 462,754 116,780 117,267 Absorption & Turnover Vacancy 0 0 0 -5,355 -4,853 0 0 0 -4,853 -3,664 0 Free Rent 0 0 0 -3,213 -2,912 0 0 0 -2,912 -3,297 0 Scheduled Base Rent 114,383 114,383 114,383 448,483 107,568 115,807 115,807 115,807 454,989 109,820 117,267Total Rental Revenue 114,383 114,383 114,383 448,483 107,568 115,807 115,807 115,807 454,989 109,820 117,267

Other Tenant Revenue Total Expense Recoveries 5,590 5,590 5,590 21,874 5,834 6,272 6,272 6,272 24,651 6,602 6,425Total Other Tenant Revenue 5,590 5,590 5,590 21,874 5,834 6,272 6,272 6,272 24,651 6,602 6,425

Total Tenant Revenue 119,973 119,973 119,973 470,357 113,401 122,079 122,079 122,079 479,640 116,422 123,691

Potential Gross Revenue 119,973 119,973 119,973 470,357 113,401 122,079 122,079 122,079 479,640 116,422 123,691

Vacancy & Credit Loss Vacancy Allowance -5,719 -5,719 -5,719 -20,786 -3,691 -5,790 -5,790 -5,790 -21,062 -3,720 -5,863Total Vacancy & Credit Loss -5,719 -5,719 -5,719 -20,786 -3,691 -5,790 -5,790 -5,790 -21,062 -3,720 -5,863

Effective Gross Revenue 114,254 114,254 114,254 449,572 109,710 116,289 116,289 116,289 458,578 112,702 117,828

Operating Expenses Common Area Maintenance 7,252 7,252 7,252 29,007 7,419 7,419 7,419 7,419 29,674 7,589 7,589 Insurance 1,813 1,813 1,813 7,252 1,855 1,855 1,855 1,855 7,419 1,897 1,897 Legal & Professional 1,064 1,064 1,064 4,256 1,089 1,089 1,089 1,089 4,354 1,114 1,114 Management & Leasing 5,713 5,713 5,713 22,479 5,486 5,814 5,814 5,814 22,929 5,635 5,891 Real Estate Tax 63,987 0 63,987 127,974 0 63,987 0 63,987 127,974 0 63,987 Reserves 1,340 1,340 1,340 5,360 1,371 1,371 1,371 1,371 5,483 1,402 1,402 Structural Repairs & 4,808 4,808 4,808 19,233 4,919 4,919 4,919 4,919 19,675 5,032 5,032 Utilities/Heat 16,947 16,947 16,947 67,788 17,337 17,337 17,337 17,337 69,347 17,735 17,735Total Operating Expenses 102,923 38,937 102,923 283,348 39,474 103,789 39,802 103,789 286,855 40,405 104,648

Net Operating Income 11,330 75,317 11,330 166,224 70,237 12,500 76,487 12,500 171,723 72,297 13,180

Leasing Costs Tenant Improvements 0 0 0 17,383 15,737 0 0 0 15,737 14,557 0 Leasing Commissions 0 0 0 9,543 8,648 0 0 0 8,648 9,894 0 Total Leasing Costs 0 0 0 26,926 24,385 0 0 0 24,385 24,451 0

Total Leasing & Capital Costs 0 0 0 26,926 24,385 0 0 0 24,385 24,451 0

Cash Flow Before Debt Service 11,330 75,317 11,330 139,298 45,852 12,500 76,487 12,500 147,338 47,846 13,180

Debt Service Interest First Northeasternville Bank 15,819 15,687 15,553 63,009 15,417 15,279 15,141 15,000 60,837 14,857 14,714 Total Interest 15,819 15,687 15,553 63,009 15,417 15,279 15,141 15,000 60,837 14,857 14,714

Principal First Northeasternville Bank 11,119 11,251 11,385 44,743 11,521 11,659 11,797 11,938 46,915 12,081 12,225 Total Principal 11,119 11,251 11,385 44,743 11,521 11,659 11,797 11,938 46,915 12,081 12,225

Total Debt Service 26,938 26,938 26,938 107,752 26,938 26,938 26,938 26,938 107,752 26,938 26,939

Cash Flow After Debt Service -15,608 48,379 -15,608 31,546 18,914 -14,438 49,549 -14,438 39,586 20,908 -13,759

Financing Proceeds First Northeasternville Bank 0 0 0 0 0 0 0 0 0 0 0 Total Proceeds 0 0 0 0 0 0 0 0 0 0 0

Total Financing (Net) 0 0 0 0 0 0 0 0 0 0 0Cash Flow Available for -15,608 48,379 -15,608 31,546 18,914 -14,438 49,549 -14,438 39,586 20,908 -13,759




Quarter 35 Quarter 36 Total Quarter 37 Quarter 38 Quarter 39 Quarter 40 Total Quarter 41 Quarter 42For the Quarters Ending Mar-2028 Jun-2028 Jun-2028 Sep-2028 Dec-2028 Mar-2029 Jun-2029 Jun-2029 Sep-2029 Dec-2029

Rental Revenue Potential Base Rent 117,267 117,267 468,581 120,878 122,684 122,684 122,684 488,931 124,108 124,820 Absorption & Turnover Vacancy 0 0 -3,664 -13,721 0 0 0 -13,721 -4,811 0 Free Rent 0 0 -3,297 -11,074 0 0 0 -11,074 -4,330 0 Scheduled Base Rent 117,267 117,267 461,620 96,084 122,684 122,684 122,684 464,137 114,967 124,820Total Rental Revenue 117,267 117,267 461,620 96,084 122,684 122,684 122,684 464,137 114,967 124,820






Operating Expenses Common Area Maintenance 7,589 7,589 30,357 7,764 7,764 7,764 7,764 31,055 7,942 7,942 Insurance 1,897 1,897 7,589 1,941 1,941 1,941 1,941 7,764 1,986 1,986 Legal & Professional 1,114 1,114 4,454 1,139 1,139 1,139 1,139 4,557 1,165 1,165 Management & Leasing 5,891 5,891 23,309 4,920 6,112 6,112 6,112 23,254 5,857 6,221 Real Estate Tax 0 63,987 127,974 0 63,987 0 63,987 127,974 0 63,987 Reserves 1,402 1,402 5,609 1,435 1,435 1,435 1,435 5,738 1,468 1,468 Structural Repairs & Maintenance 5,032 5,032 20,128 5,148 5,148 5,148 5,148 20,591 5,266 5,266 Utilities/Heat 17,735 17,735 70,942 18,143 18,143 18,143 18,143 72,574 18,561 18,561Total Operating Expenses 40,661 104,648 290,362 40,489 105,668 41,681 105,668 293,506 42,244 106,596

Net Operating Income 77,167 13,180 175,824 57,904 16,563 80,550 16,563 171,580 74,891 17,827

Leasing Costs Tenant Improvements 0 0 14,557 51,286 0 0 0 51,286 19,043 0 Leasing Commissions 0 0 9,894 33,152 0 0 0 33,152 12,994 0 Total Leasing Costs 0 0 24,451 84,438 0 0 0 84,438 32,036 0

Total Leasing & Capital Costs 0 0 24,451 84,438 0 0 0 84,438 32,036 0

Cash Flow Before Debt Service 77,167 13,180 151,373 -26,535 16,563 80,550 16,563 87,141 42,855 17,827

Debt Service Interest First Northeasternville Bank Loan 14,568 14,420 58,559 14,271 14,120 13,967 13,813 56,171 0 0 Total Interest 14,568 14,420 58,559 14,271 14,120 13,967 13,813 56,171 0 0

Principal First Northeasternville Bank Loan 12,370 12,518 49,194 12,667 12,818 12,971 13,125 51,581 0 0 Total Principal 12,370 12,518 49,194 12,667 12,818 12,971 13,125 51,581 0 0

Total Debt Service 26,938 26,938 107,753 26,938 26,938 26,938 26,938 107,752 0 0

Cash Flow After Debt Service 50,229 -13,758 43,620 -53,473 -10,375 53,612 -10,375 -20,611 42,855 17,827

Financing Proceeds First Northeasternville Bank Loan 0 0 0 0 0 0 0 0 0 0 Total Proceeds 0 0 0 0 0 0 0 0 0 0

Total Financing (Net) 0 0 0 0 0 0 0 0 0 0Cash Flow Available for Distribution 50,229 -13,758 43,620 -53,473 -10,375 53,612 -10,375 -20,611 42,855 17,827



Forecast Forecast Forecast Forecast

Quarter 43 Quarter 44 TotalFor the Quarters Ending Mar-2030 Jun-2030 Jun-2030 Total

Rental Revenue Potential Base Rent 124,820 124,820 498,568 4,947,996 Absorption & Turnover Vacancy 0 0 -4,811 -70,051 Free Rent 0 0 -4,330 -54,798 Scheduled Base Rent 124,820 124,820 489,427 4,823,147Total Rental Revenue 124,820 124,820 489,427 4,823,147

Other Tenant Revenue Total Expense Recoveries 5,844 5,844 23,609 218,514Total Other Tenant Revenue 5,844 5,844 23,609 218,514

Total Tenant Revenue 130,664 130,664 513,036 5,041,661

Potential Gross Revenue 130,664 130,664 513,036 5,041,661

Vacancy & Credit Loss Vacancy Allowance -6,241 -6,241 -22,632 -225,697Total Vacancy & Credit Loss -6,241 -6,241 -22,632 -225,697

Effective Gross Revenue 124,423 124,423 490,404 4,815,964

Operating Expenses Common Area Maintenance 7,942 7,942 31,769 312,960 Insurance 1,986 1,986 7,942 78,240 Legal & Professional 1,165 1,165 4,662 45,923 Management & Leasing 6,221 6,221 24,520 240,798 Real Estate Tax 0 63,987 127,974 1,407,711 Reserves 1,468 1,468 5,870 57,830 Structural Repairs & Maintenance 5,266 5,266 21,064 207,506 Utilities/Heat 18,561 18,561 74,243 731,373Total Operating Expenses 42,609 106,596 298,044 3,082,341

Net Operating Income 81,814 17,827 192,360 1,733,623

Leasing Costs Tenant Improvements 0 0 19,043 257,266 Leasing Commissions 0 0 12,994 163,932 Total Leasing Costs 0 0 32,036 421,197

Total Leasing & Capital Costs 0 0 32,036 421,197

Cash Flow Before Debt Service 81,814 17,827 160,323 1,312,426

Debt Service Interest First Northeasternville Bank Loan 0 0 0 656,929 Total Interest 0 0 0 656,929

Principal First Northeasternville Bank Loan 0 0 0 420,593 Total Principal 0 0 0 420,593

Total Debt Service 0 0 0 1,077,522

Cash Flow After Debt Service 81,814 17,827 160,323 234,904

Financing Proceeds First Northeasternville Bank Loan 0 0 0 1,575,000 Total Proceeds 0 0 0 1,575,000

Total Financing (Net) 0 0 0 1,575,000Cash Flow Available for Distribution 81,814 17,827 160,323 1,809,904


Buy & Hold - PV ReportBuy & Hold – PV Report

P.V. of P.V. of P.V. of P.V. of P.V. of NOI toAnalysis Period Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow BookPeriod Ending Before Debt Service @ 7,00 % @ 7,50 % @ 8,00 % @ 8,50 % @ 9,00 % ValueQuarter 1 Sep-2019 64,449 60,232 59,952 59,675 59,400 59,127 2.98%Quarter 2 Dec-2019 462 432 430 428 426 424 0.02%Quarter 3 Mar-2020 64,449 60,232 59,952 59,675 59,400 59,127 2.98%Quarter 4 Jun-2020 462 432 430 428 426 424 0.02%Quarter 5 Sep-2020 10,725 9,367 9,280 9,195 9,110 9,027 2.54%Quarter 6 Dec-2020 3,651 3,189 3,159 3,130 3,101 3,073 0.17%Quarter 7 Mar-2021 67,638 59,078 58,529 57,989 57,455 56,929 3.06%Quarter 8 Jun-2021 3,651 3,189 3,159 3,130 3,101 3,073 0.17%Quarter 9 Sep-2021 -25,524 -20,835 -20,546 -20,262 -19,983 -19,709 2.21%Quarter 10 Dec-2021 5,927 4,838 4,771 4,705 4,641 4,577 0.26%Quarter 11 Mar-2022 69,914 57,071 56,278 55,500 54,736 53,987 3.06%Quarter 12 Jun-2022 5,927 4,838 4,771 4,705 4,641 4,577 0.26%Quarter 13 Sep-2022 37,991 28,983 28,448 27,925 27,414 26,914 2.83%Quarter 14 Dec-2022 6,828 5,209 5,113 5,019 4,927 4,837 0.30%Quarter 15 Mar-2023 70,815 54,024 53,026 52,051 51,098 50,167 3.06%Quarter 16 Jun-2023 6,828 5,209 5,113 5,019 4,927 4,837 0.30%Quarter 17 Sep-2023 7,938 5,660 5,529 5,402 5,279 5,159 2.53%Quarter 18 Dec-2023 8,823 6,291 6,146 6,005 5,868 5,734 0.37%Quarter 19 Mar-2024 72,810 51,912 50,716 49,553 48,422 47,321 3.08%Quarter 20 Jun-2024 8,823 6,291 6,146 6,005 5,868 5,734 0.37%Quarter 21 Sep-2024 39,903 26,589 25,856 25,146 24,459 23,793 2.86%Quarter 22 Dec-2024 10,158 6,769 6,582 6,402 6,227 6,057 0.42%Quarter 23 Mar-2025 74,145 49,406 48,043 46,724 45,447 44,210 3.10%Quarter 24 Jun-2025 10,158 6,769 6,582 6,402 6,227 6,057 0.42%Quarter 25 Sep-2025 41,320 25,732 24,906 24,110 23,343 22,604 2.82%Quarter 26 Dec-2025 11,330 7,056 6,829 6,611 6,401 6,198 0.47%Quarter 27 Mar-2026 75,317 46,904 45,398 43,947 42,549 41,201 3.11%Quarter 28 Jun-2026 11,330 7,056 6,829 6,611 6,401 6,198 0.47%Quarter 29 Sep-2026 45,852 26,686 25,709 24,772 23,874 23,012 2.87%Quarter 30 Dec-2026 12,500 7,275 7,009 6,753 6,508 6,273 0.51%Quarter 31 Mar-2027 76,487 44,516 42,886 41,323 39,824 38,386 3.13%Quarter 32 Jun-2027 12,500 7,275 7,009 6,753 6,508 6,273 0.51%Quarter 33 Sep-2027 47,846 26,025 24,956 23,935 22,960 22,030 2.93%Quarter 34 Dec-2027 13,180 7,169 6,874 6,593 6,325 6,068 0.53%Quarter 35 Mar-2028 77,167 41,974 40,249 38,603 37,031 35,530 3.13%Quarter 36 Jun-2028 13,180 7,169 6,874 6,593 6,325 6,068 0.53%Quarter 37 Sep-2028 -26,535 -13,489 -12,874 -12,291 -11,736 -11,208 2.27%Quarter 38 Dec-2028 16,563 8,420 8,036 7,672 7,326 6,996 0.65%Quarter 39 Mar-2029 80,550 40,947 39,082 37,310 35,626 34,025 3.16%Quarter 40 Jun-2029 16,563 8,420 8,036 7,672 7,326 6,996 0.65%Totals 1,152,102 794,311 775,277 756,918 739,204 722,108

2,420,787 1,230,605 1,174,551 1,121,293 1,070,679 1,022,566

2,024,916 1,949,828 1,878,210 1,809,882 1,744,675

39.23% 39.76% 40.30% 40.84% 41.39%60.77% 60.24% 59.70% 59.16% 58.61%

100.00% 100.00% 100.00% 100.00% 100.00%

Total Unleveraged Present Value

Percentage Value Distribution Income Net Sale Price

* Results displayed are based on Forecast data only

Property Resale @ 7,50 % Cap Rate


Buy & Hold - IRR MatrixBuy & Hold – IRR Matrix Report

Valuation (PV/IRR) Date: July, 2019Date of Sale: June, 2029Discount Method: AnnualPeriod to Cap (at Sale): 12 Months After Sale

Table Shows: 1) IRR (Unleveraged)2) IRR (Leveraged) 2,793,651 2,593,902 2,420,786 2,269,310

1,639,244 1,439,495 1,266,379 1,114,9036,50% 7,00% 7,50% 8,00%

2,063,000 7,92% 7,31% 6,76% 6,24%488,000 13,34% 11,95% 10,61% 9,30%6,29%

2,113,000 7,61% 7,00% 6,44% 5,93%538,000 12,25% 10,87% 9,54% 8,24%

1) Purchase Price 6,14%2) Equity 2,163,000 7,30% 6,70% 6,14% 5,63%3) Going In Cap Rate 588,000 11,26% 9,90% 8,58% 7,29%

6,00%2,213,000 7,01% 6,40% 5,84% 5,33%638,000 10,36% 9,01% 7,70% 6,42%5,87%

2,263,000 6,72% 6,11% 5,56% 5,05%688,000 9,54% 8,20% 6,90% 5,63%5,74%

NOI To Capitalize 192,360 192,360 192,360 192,360 Divided by Cap Rate 6,50% 7,00% 7,50% 8,00%Gross Sales Price 2,959,381 2,747,996 2,564,797 2,404,497 Adjustments to Sale 0 0 0 0Adjusted Gross Sales Price 2,959,381 2,747,996 2,564,797 2,404,497 Cost of Sales -165,730 -154,095 -144,011 -135,187Net Sale Price 2,793,651 2,593,902 2,420,786 2,269,310 Loan Balance -1,154,407 -1,154,407 -1,154,407 -1,154,407Net Sale Proceeds 1,639,244 1,439,495 1,266,379 1,114,903

-1,154,407981,247


8,50%2,263,056

02,263,056

-127,4022,135,654

192,360

5,15%6,02%

4,86%5,17%

4,57%4,38%

Sales Price Calculation

6,97%

IRR Matrix1) Net Sale Price 2) Net Sale Proceeds 3) Exit Cap Rate

2,135,654981,2478,50%5,77%8,01%

5,46%

Key Valuation Policies


Buy & Hold - Loan Amortization ReportBuy & Hold – Loan Amortization Report

Loan NameLoan TypeLoan Start DateLoan TermAmortization Term

Beginning Interest Amortized Interest Principal Balloon EndingDate Balance Proceeds Rate Payments Payments Payments Payment Balance

Qtr Ended: Sep - 2019 0 1,575,000 4.75% 26,938 18,670 8,268 0 1,566,732Qtr Ended: Dec - 2019 1,566,732 0 4.75% 26,938 18,572 8,366 0 1,558,366Qtr Ended: Mar - 2020 1,558,366 0 4.75% 26,938 18,473 8,465 0 1,549,901Qtr Ended: Jun - 2020 1,549,901 0 4.75% 26,938 18,371 8,567 0 1,541,334

Total Jun - 2020 0 1,575,000 4.75% 107,752 74,086 33,666 0 1,541,334

Qtr Ended: Sep - 2020 1,541,334 0 4.75% 26,938 18,269 8,669 0 1,532,665Qtr Ended: Dec - 2020 1,532,665 0 4.75% 26,938 18,166 8,772 0 1,523,893Qtr Ended: Mar - 2021 1,523,893 0 4.75% 26,938 18,061 8,877 0 1,515,016Qtr Ended: Jun - 2021 1,515,016 0 4.75% 26,938 17,955 8,983 0 1,506,033

Total Jun - 2021 1,541,334 0 4.75% 107,752 72,451 35,301 0 1,506,033


Total Jun - 2022 1,506,033 0 4.75% 107,753 70,738 37,015 0 1,469,018


Total Jun - 2023 1,469,018 0 4.75% 107,752 68,940 38,812 0 1,430,206


Total Jun - 2024 1,430,206 0 4.75% 107,752 67,057 40,695 0 1,389,511


Total Jun - 2025 1,389,511 0 4.75% 107,752 65,081 42,671 0 1,346,840


Total Jun - 2026 1,346,840 0 4.75% 107,752 63,009 44,743 0 1,302,097


Total Jun - 2027 1,302,097 0 4.75% 107,752 60,837 46,915 0 1,255,182


Total Jun - 2028 1,255,182 0 4.75% 107,753 58,559 49,194 0 1,205,988

Qtr Ended: Sep - 2028 1,205,988 0 4.75% 26,938 14,271 12,667 0 1,193,321Qtr Ended: Dec - 2028 1,193,321 0 4.75% 26,938 14,120 12,818 0 1,180,503Qtr Ended: Mar - 2029 1,180,503 0 4.75% 26,938 13,967 12,971 0 1,167,532Qtr Ended: Jun - 2029 1,167,532 0 4.75% 26,938 13,813 13,125 1,154,407 0

Total Jun - 2029 1,205,988 0 4.75% 107,752 56,171 51,581 1,154,407 0

Final Totals 0 * Results displayed are based on Forecast data only

7/1/2019 300 Months 300 Months

1,575,000 4.75% 1,077,522 656,929 420,593 1,154,407 0

Amortizing First Northeasternville Bank Loan


Quick Value-Add - ARGUS Cash Flow ReportQuick Value-Add - Argus Cash Flow Report



Rental Revenue Potential Base Rent 100,198 100,198 100,198 100,198 400,791 104,666 104,666 104,666 104,666 418,663 Absorption & Turnover Vacancy 0 0 0 0 0 -8,301 0 0 0 -8,301 Free Rent 0 0 0 0 0 -5,965 0 0 0 -5,965 Scheduled Base Rent 100,198 100,198 100,198 100,198 400,791 90,400 104,666 104,666 104,666 404,397Total Rental Revenue 100,198 100,198 100,198 100,198 400,791 90,400 104,666 104,666 104,666 404,397







Net Operating Income 64,449 462 66,131 2,144 133,185 57,610 5,701 69,688 5,701 138,701

Leasing Costs Tenant Improvements 0 0 0 0 0 28,011 0 0 0 28,011 Leasing Commissions 0 0 0 0 0 17,808 0 0 0 17,808 Total Leasing Costs 0 0 0 0 0 45,819 0 0 0 45,819

Capital Expenditures Improvement Retail / 3 months 111,125 0 0 0 111,125 0 0 0 0 0 Improvement Office / 3 months 281,700 0 0 0 281,700 0 0 0 0 0 Total Capital Expenditures 392,825 0 0 0 392,825 0 0 0 0 0

Total Leasing & Capital Costs 392,825 0 0 0 392,825 45,819 0 0 0 45,819

Cash Flow Before Debt Service -328,376 462 66,131 2,144 -259,640 11,791 5,701 69,688 5,701 92,881




Cash Flow After Debt Service -355,314 -26,476 39,193 -24,794 -367,392 -15,147 -21,237 42,750 -21,237 -14,871

Financing Proceeds First Northeasternville Bank Loan 1,575,000 0 0 0 1,575,000 0 0 0 0 0 Total Proceeds 1,575,000 0 0 0 1,575,000 0 0 0 0 0

Total Financing (Net) 1,575,000 0 0 0 1,575,000 0 0 0 0 0

Cash Flow Available for Distribution 1,219,686 -26,476 39,193 -24,794 1,207,608 -15,147 -21,237 42,750 -21,237 -14,871


Quick Value-Add - ARGUS Cash Flow Report (cont.)Quick Value-Add - Argus Cash Flow Report

Forecast Forecast Forecast Forecast Forecast Forecast

Quarter 9 Quarter 10 Quarter 11 Quarter 12 TotalFor the Quarters Ending Sep-2021 Dec-2021 Mar-2022 Jun-2022 Jun-2022 Total

Rental Revenue Potential Base Rent 108,836 108,836 108,836 108,836 435,344 1,254,798 Absorption & Turnover Vacancy -12,912 0 0 0 -12,912 -21,213 Free Rent -10,269 0 0 0 -10,269 -16,234 Scheduled Base Rent 85,655 108,836 108,836 108,836 412,164 1,217,351Total Rental Revenue 85,655 108,836 108,836 108,836 412,164 1,217,351

Other Tenant Revenue Total Expense Recoveries 3,321 3,713 3,713 3,713 14,459 41,052Total Other Tenant Revenue 3,321 3,713 3,713 3,713 14,459 41,052

Total Tenant Revenue 88,976 112,549 112,549 112,549 426,623 1,258,403

Potential Gross Revenue 88,976 112,549 112,549 112,549 426,623 1,258,403

Vacancy & Credit Loss Vacancy Allowance -3,114 -5,442 -5,442 -5,442 -19,440 -58,370Total Vacancy & Credit Loss -3,114 -5,442 -5,442 -5,442 -19,440 -58,370

Effective Gross Revenue 85,862 107,107 107,107 107,107 407,183 1,200,033

Operating Expenses Common Area Maintenance 6,628 6,628 6,628 6,628 26,511 77,933 Insurance 1,657 1,657 1,657 1,657 6,628 19,483 Legal & Professional 973 973 973 973 3,890 11,436 Management & Leasing 3,928 4,900 4,900 4,900 18,629 55,739 Real Estate Tax 0 63,987 0 63,987 127,974 383,921 Reserves 1,225 1,225 1,225 1,225 4,899 14,401 Structural Repairs & Maintenance 4,394 4,394 4,394 4,394 17,578 51,673 Utilities/Heat 14,172 14,172 14,172 14,172 56,688 169,175Total Operating Expenses 32,977 97,935 33,949 97,935 262,796 783,761

Net Operating Income 52,885 9,172 73,158 9,172 144,387 416,273

Leasing Costs Tenant Improvements 46,125 0 0 0 46,125 74,136 Leasing Commissions 30,731 0 0 0 30,731 48,539 Total Leasing Costs 76,856 0 0 0 76,856 122,675

Capital Expenditures Improvement Retail / 3 months 0 0 0 0 0 111,125 Improvement Office / 3 months 0 0 0 0 0 281,700 Total Capital Expenditures 0 0 0 0 0 392,825

Total Leasing & Capital Costs 76,856 0 0 0 76,856 515,500

Cash Flow Before Debt Service -23,971 9,172 73,158 9,172 67,531 -99,228

Debt Service Interest First Northeasternville Bank Loan 0 0 0 0 0 146,537 Total Interest 0 0 0 0 0 146,537

Principal First Northeasternville Bank Loan 0 0 0 0 0 68,967 Total Principal 0 0 0 0 0 68,967

Total Debt Service 0 0 0 0 0 215,504

Cash Flow After Debt Service -23,971 9,172 73,158 9,172 67,531 -314,732

Financing Proceeds First Northeasternville Bank Loan 0 0 0 0 0 1,575,000 Total Proceeds 0 0 0 0 0 1,575,000

Total Financing (Net) 0 0 0 0 0 1,575,000

Cash Flow Available for Distribution 9,172 67,531 1,260,268-23,971 9,172 73,158


Quick Value-Add - PV ReportQuick Value-Add – PV Report

P.V. of P.V. of P.V. of P.V. of P.V. of NOI toAnalysis Period Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow BookPeriod Ending Before Debt Service @ 7,00 % @ 7,50 % @ 8,00 % @ 8,50 % @ 9,00 % ValueQuarter 1 Sep-2019 -328,376 -306,894 -305,466 -304,052 -302,651 -301,263 2.52%Quarter 2 Dec-2019 462 432 430 428 426 424 0.02%Quarter 3 Mar-2020 66,131 61,804 61,517 61,232 60,950 60,670 2.59%Quarter 4 Jun-2020 2,144 2,004 1,994 1,985 1,976 1,967 0.08%Quarter 5 Sep-2020 11,791 10,299 10,203 10,109 10,016 9,924 2.21%Quarter 6 Dec-2020 5,701 4,980 4,933 4,888 4,843 4,799 0.22%Quarter 7 Mar-2021 69,688 60,868 60,303 59,746 59,197 58,655 2.68%Quarter 8 Jun-2021 5,701 4,980 4,933 4,888 4,843 4,799 0.22%Totals -166,759 -161,528 -161,152 -160,777 -160,401 -160,025

2,171,415 1,896,598 1,878,996 1,861,638 1,844,520 1,827,6361,735,070 1,717,844 1,700,862 1,684,119 1,667,611

-9.31% -9.38% -9.45% -9.52% -9.60%109.31% 109.38% 109.45% 109.52% 109.60%100.00% 100.00% 100.00% 100.00% 100.00%

Total Unleveraged Present Value

Percentage Value Distribution Income Net Sale Price




Quick Value-Add - IRR MatrixQuick Value-Add – IRR Matrix

Valuation (PV/IRR) Date: July, 2019Date of Sale: June, 2021Discount Method: AnnualStabilized Income Begin July, 2021Stabilized Income End July, 2021

Table Shows: 1) IRR (Unleveraged)2) IRR (Leveraged) 2,533,791 2,338,666 2,171,416 2,026,466 1,899,634

1,027,758 832,633 665,383 520,433 393,6016,00% 6,50% 7,00% 7,50% 8,00%

1,963,000 9,25% 4,88% 0,99% -2,50% -5,65%388,000 21,02% 5,36% -9,48% -23,77% N/A6,78%

2,063,000 6,72% 2,45% -1,34% -4,74% -7,81%488,000 11,26% -2,83% -16,20% -29,12% -233,44%

1) Purchase Price 6,46%2) Equity 2,163,000 4,36% 0,19% -3,51% -6,83% -9,84%3) Going In Cap Rate 588,000 3,67% -9,24% -21,52% -33,39% -217,36%

6,16%2,263,000 2,15% -1,92% -5,54% -8,79% -11,73%688,000 -2,46% -14,45% -25,86% -36,92% -205,55%5,89%

2,363,000 0,08% -3,91% -7,45% -10,63% -13,50%788,000 -7,56% -18,81% -29,51% -206,73% -196,45%5,64%

Stabilized Income 161,063 161,063 161,063 161,063 161,063 Divided by Cap Rate 6,00% 6,50% 7,00% 7,50% 8,00%Gross Sales Price 2,684,384 2,477,893 2,300,901 2,147,507 2,013,288 Adjustments to Sale 0 0 0 0 0Adjusted Gross Sales Price 2,684,384 2,477,893 2,300,901 2,147,507 2,013,288 Cost of Sales -150,593 -139,227 -129,485 -121,042 -113,654Net Sale Price 2,533,791 2,338,666 2,171,416 2,026,466 1,899,634 Loan Balance -1,506,033 -1,506,033 -1,506,033 -1,506,033 -1,506,033Net Sale Proceeds 1,027,758 832,633 665,383 520,433 393,601






Quick Value-Add - Loan Amortization ReportQuick Value-Add – Loan Amortization Report




Total Jun - 2020 0 1,575,000 4.75% 107,752 74,086 33,666 0 1,541,334


Total Jun - 2021 1,541,334 0 4.75% 107,752 72,451 35,301 1,506,033 0

Final Totals 0



1,575,000 4.75% 215,504 146,537 68,967 1,506,033 0



Hold & Improve - Cash Flow ReportHold & Improve – Cash Flow Report


Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Quarter 5 Quarter 6 Quarter 7 Quarter 8 TotalFor the Quarters Ending Sep-2019 Dec-2019 Mar-2020 Jun-2020 Jun-2020 Sep-2020 Dec-2020 Mar-2021 Jun-2021 Jun-2021Rental Revenue Potential Base Rent 100,198 100,198 100,198 100,198 400,791 107,124 107,124 107,124 107,124 428,497 Absorption & Turnover Vacancy 0 0 0 0 0 -3,601 0 0 0 -3,601 Free Rent 0 0 0 0 0 -5,184 0 0 0 -5,184 Scheduled Base Rent 100,198 100,198 100,198 100,198 400,791 98,339 107,124 107,124 107,124 419,712Total Rental Revenue 100,198 100,198 100,198 100,198 400,791 98,339 107,124 107,124 107,124 419,712Other Tenant Revenue Total Expense Recoveries 3,345 3,345 3,345 3,345 13,379 3,709 3,709 3,709 3,709 14,836Total Other Tenant Revenue 3,345 3,345 3,345 3,345 13,379 3,709 3,709 3,709 3,709 14,836Total Tenant Revenue 103,543 103,543 103,543 103,543 414,170 102,048 110,833 110,833 110,833 434,548Other Revenue Farmers Market 0 0 10,500 12,000 22,500 12,000 12,000 12,000 12,000 48,000Total Other Revenue 0 0 10,500 12,000 22,500 12,000 12,000 12,000 12,000 48,000

Potential Gross Revenue 103,543 103,543 114,043 115,543 436,670 114,048 122,833 122,833 122,833 482,548Vacancy & Credit Loss Vacancy Allowance -5,010 -5,010 -5,010 -5,010 -20,040 -3,436 -5,356 -5,356 -5,356 -19,504Total Vacancy & Credit Loss -5,010 -5,010 -5,010 -5,010 -20,040 -3,436 -5,356 -5,356 -5,356 -19,504

Effective Gross Revenue 98,533 98,533 109,033 110,533 416,630 110,613 117,477 117,477 117,477 463,044Operating Expenses Common Area Maintenance 6,364 6,364 6,364 6,364 25,456 6,491 6,491 6,491 6,491 25,966 Insurance 1,591 1,591 1,591 1,591 6,364 1,623 1,623 1,623 1,623 6,491 Legal & Professional 934 934 934 934 3,735 953 953 953 953 3,810 Management & Leasing 4,927 4,927 5,452 5,527 20,832 5,531 5,874 5,874 5,874 23,152 Real Estate Tax 0 63,987 0 63,987 127,974 0 63,987 0 63,987 127,974 Reserves 1,176 1,176 1,176 1,176 4,704 1,199 1,199 1,199 1,199 4,798 Structural Repairs & Maintenance 4,220 4,220 4,220 4,220 16,879 4,304 4,304 4,304 4,304 17,216 Utilities/Heat 14,873 14,873 13,609 13,609 56,964 13,881 13,881 13,881 13,881 55,522Total Operating Expenses 34,084 98,071 33,346 97,408 262,908 33,982 98,312 34,325 98,312 264,930

Net Operating Income 64,449 462 75,687 13,125 153,722 76,631 19,165 83,152 19,165 198,114Leasing Costs Tenant Improvements 0 0 0 0 0 26,884 0 0 0 26,884 Leasing Commissions 0 0 0 0 0 18,817 0 0 0 18,817 Total Leasing Costs 0 0 0 0 0 45,701 0 0 0 45,701Capital Expenditures Set Up Costs Farmers Market 7,500 7,500 0 0 15,000 0 0 0 0 0 LEED Registration Fee 1,500 0 0 0 1,500 0 0 0 0 0 LEED Precertification Flat Fee 0 5,000 0 0 5,000 0 0 0 0 0 Certification Review 0 1,350 0 0 1,350 0 0 0 0 0 LEED Capital Expenses 103,763 103,763 0 0 207,525 0 0 0 0 0 Remodelling Knowhere to Go 0 0 0 0 0 0 0 0 0 0 Remodelling Bifrost 0 0 0 0 0 0 0 0 0 0 Remodelling Plant Your Groots 0 0 0 0 0 0 0 71,808 0 71,808 Remodelling Shield Strategies 0 0 0 0 0 0 0 0 0 0 RemodellingVisionary Vanguard 0 0 68,860 0 68,860 0 0 0 0 0 Remodelling Mjolnir 0 0 0 0 0 0 0 105,356 0 105,356 Remodelling Titan Fine 0 0 0 0 0 0 0 0 0 0 Remodelling Banner`s Green 0 0 0 0 0 0 0 76,500 0 76,500 Remodelling Bank & Trust 0 0 84,750 0 84,750 0 0 0 0 0 Total Capital Expenditures 112,763 117,613 153,610 0 383,985 0 0 253,664 0 253,664Total Leasing & Capital Costs 112,763 117,613 153,610 0 383,985 45,701 0 253,664 0 299,365Cash Flow Before Debt Service -48,314 -117,151 -77,923 13,125 -230,263 30,930 19,165 -170,512 19,165 -101,251Debt Service Interest First Northeasternville Bank Loan 18,670 18,572 18,473 18,371 74,086 18,269 18,166 18,061 17,955 72,451 Total Interest 18,670 18,572 18,473 18,371 74,086 18,269 18,166 18,061 17,955 72,451 Principal First Northeasternville Bank Loan 8,268 8,366 8,465 8,567 33,666 8,669 8,772 8,877 8,983 35,301 Total Principal 8,268 8,366 8,465 8,567 33,666 8,669 8,772 8,877 8,983 35,301Total Debt Service 26,938 26,938 26,938 26,938 107,752 26,938 26,938 26,938 26,938 107,752Cash Flow After Debt Service -75,252 -144,089 -104,861 -13,813 -338,015 3,992 -7,773 -197,450 -7,773 -209,003Financing Proceeds First Northeasternville Bank Loan 1,575,000 0 0 0 1,575,000 0 0 0 0 0 Total Proceeds 1,575,000 0 0 0 1,575,000 0 0 0 0 0Total Financing (Net) 1,575,000 0 0 0 1,575,000 0 0 0 0 0Cash Flow Available for Distribution -209,0031,499,748 -144,089 -104,861 -13,813 1,236,985 3,992 -7,773 -197,450 -7,773


Hold & Improve - Cash Flow Report (cont.)Hold & Improve – Cash Flow Report


Quarter 9 Quarter 10 Quarter 11 Quarter 12 Total Quarter 13 Quarter 14 Quarter 15 Quarter 16 TotalFor the Quarters Ending Sep-2021 Dec-2021 Mar-2022 Jun-2022 Jun-2022 Sep-2022 Dec-2022 Mar-2023 Jun-2023 Jun-2023Rental Revenue Potential Base Rent 115,087 115,087 115,087 115,087 460,347 117,982 117,982 117,982 117,982 471,928 Absorption & Turnover Vacancy -9,218 0 0 0 -9,218 -4,646 0 0 0 -4,646 Free Rent -9,145 0 0 0 -9,145 -3,484 0 0 0 -3,484 Scheduled Base Rent 96,724 115,087 115,087 115,087 441,984 109,852 117,982 117,982 117,982 463,797Total Rental Revenue 96,724 115,087 115,087 115,087 441,984 109,852 117,982 117,982 117,982 463,797Other Tenant Revenue Total Expense Recoveries 4,459 4,459 4,459 4,459 17,837 4,800 4,800 4,800 4,800 19,199Total Other Tenant Revenue 4,459 4,459 4,459 4,459 17,837 4,800 4,800 4,800 4,800 19,199Total Tenant Revenue 101,183 119,546 119,546 119,546 459,821 114,651 122,782 122,782 122,782 482,996Other Revenue Farmers Market 12,000 12,000 12,000 12,000 48,000 12,000 12,000 12,000 12,000 48,000Total Other Revenue 12,000 12,000 12,000 12,000 48,000 12,000 12,000 12,000 12,000 48,000


Effective Gross Revenue 109,693 125,792 125,792 125,792 487,068 122,893 128,882 128,882 128,882 509,540Operating Expenses Common Area Maintenance 6,628 6,628 6,628 6,628 26,511 6,774 6,774 6,774 6,774 27,094 Insurance 1,657 1,657 1,657 1,657 6,628 1,693 1,693 1,693 1,693 6,774 Legal & Professional 973 973 973 973 3,890 994 994 994 994 3,976 Management & Leasing 5,485 6,290 6,290 6,290 24,353 6,145 6,444 6,444 6,444 25,477 Real Estate Tax 0 65,716 0 65,716 131,433 0 65,716 0 65,716 131,433 Reserves 1,225 1,225 1,225 1,225 4,899 1,252 1,252 1,252 1,252 5,007 Structural Repairs & Maintenance 4,394 4,394 4,394 4,394 17,578 4,491 4,491 4,491 4,491 17,965 Utilities/Heat 14,172 14,172 14,172 14,172 56,688 14,484 14,484 14,484 14,484 57,936Total Operating Expenses 34,533 101,054 35,338 101,054 271,980 35,832 101,848 36,132 101,848 275,659

Net Operating Income 75,160 24,737 90,454 24,737 215,088 87,061 27,035 92,751 27,035 233,881Leasing Costs Tenant Improvements 44,306 0 0 0 44,306 15,616 0 0 0 15,616 Leasing Commissions 32,470 0 0 0 32,470 12,086 0 0 0 12,086 Total Leasing Costs 76,776 0 0 0 76,776 27,702 0 0 0 27,702Capital Expenditures Set Up Costs Farmers Market 0 0 0 0 0 0 0 0 0 0 LEED Registration Fee 0 0 0 0 0 0 0 0 0 0 LEED Precertification Flat Fee 0 0 0 0 0 0 0 0 0 0 Certification Review 0 0 0 0 0 0 0 0 0 0 LEED Capital Expenses 0 0 0 0 0 0 0 0 0 0 Remodelling Knowhere to Go 0 0 0 0 0 0 0 0 0 0 Remodelling Bifrost 0 0 0 0 0 0 0 108,296 0 108,296 Remodelling Plant Your Groots 0 0 0 0 0 0 0 0 0 0 Remodelling Shield Strategies 0 0 89,640 0 89,640 0 0 0 0 0 RemodellingVisionary Vanguard 0 0 0 0 0 0 0 0 0 0 Remodelling Mjolnir 0 0 0 0 0 0 0 0 0 0 Remodelling Titan Fine 0 0 0 0 0 0 0 66,521 0 66,521 Remodelling Banner`s Green 0 0 0 0 0 0 0 0 0 0 Remodelling Bank & Trust 0 0 0 0 0 0 0 0 0 0 Total Capital Expenditures 0 0 89,640 0 89,640 0 0 174,816 0 174,816Total Leasing & Capital Costs 76,776 0 89,640 0 166,416 27,702 0 174,816 0 202,519Cash Flow Before Debt Service -1,616 24,737 813 24,737 48,672 59,358 27,035 -82,066 27,035 31,362Debt Service Interest First Northeasternville Bank Loan 17,848 17,740 17,631 17,519 70,738 17,407 17,293 17,179 17,061 68,940 Total Interest 17,848 17,740 17,631 17,519 70,738 17,407 17,293 17,179 17,061 68,940 Principal First Northeasternville Bank Loan 9,090 9,198 9,307 9,420 37,015 9,531 9,645 9,759 9,877 38,812 Total Principal 9,090 9,198 9,307 9,420 37,015 9,531 9,645 9,759 9,877 38,812Total Debt Service 26,938 26,938 26,938 26,939 107,753 26,938 26,938 26,938 26,938 107,752Cash Flow After Debt Service -28,554 -2,201 -26,125 -2,202 -59,081 32,420 97 -109,004 97 -76,390Financing Proceeds First Northeasternville Bank Loan 0 0 0 0 0 0 0 0 0 0 Total Proceeds 0 0 0 0 0 0 0 0 0 0Total Financing (Net) 0 0 0 0 0 0 0 0 0 0Cash Flow Available for Distribution -76,390-59,081 32,420 97 -109,004 97-28,554 -2,201 -26,125 -2,202






Effective Gross Revenue 126,057 135,496 135,496 135,496 532,545 132,908 139,053 139,053 139,053 550,066Operating Expenses Common Area Maintenance 6,929 6,929 6,929 6,929 27,717 7,089 7,089 7,089 7,089 28,355 Insurance 1,732 1,732 1,732 1,732 6,929 1,772 1,772 1,772 1,772 7,089 Legal & Professional 1,017 1,017 1,017 1,017 4,067 1,040 1,040 1,040 1,040 4,161 Management & Leasing 6,303 6,775 6,775 6,775 26,627 6,645 6,953 6,953 6,953 27,503 Real Estate Tax 0 67,446 0 67,446 134,891 0 67,446 0 67,446 134,891 Reserves 1,280 1,280 1,280 1,280 5,122 1,310 1,310 1,310 1,310 5,239 Structural Repairs & Maintenance 4,594 4,594 4,594 4,594 18,378 4,700 4,700 4,700 4,700 18,800 Utilities/Heat 14,817 14,817 14,817 14,817 59,268 15,158 15,158 15,158 15,158 60,631Total Operating Expenses 36,673 104,591 37,145 104,591 283,000 37,714 105,467 38,021 105,467 286,670

Net Operating Income 89,384 30,905 98,351 30,905 249,545 95,194 33,586 101,031 33,586 263,397Leasing Costs Tenant Improvements 30,623 0 0 0 30,623 16,342 0 0 0 16,342 Leasing Commissions 21,890 0 0 0 21,890 12,575 0 0 0 12,575 Total Leasing Costs 52,512 0 0 0 52,512 28,917 0 0 0 28,917Capital Expenditures Set Up Costs Farmers Market 0 0 0 0 0 0 0 0 0 0 LEED Registration Fee 0 0 0 0 0 0 0 0 0 0 LEED Precertification Flat Fee 0 0 0 0 0 0 0 0 0 0 Certification Review 0 0 0 0 0 0 0 0 0 0 LEED Capital Expenses 0 0 0 0 0 0 0 0 0 0 Remodelling Knowhere to Go 0 0 93,719 0 93,719 0 0 0 0 0 Remodelling Bifrost 0 0 0 0 0 0 0 0 0 0 Remodelling Plant Your Groots 0 0 0 0 0 0 0 0 0 0 Remodelling Shield Strategies 0 0 0 0 0 0 0 0 0 0 RemodellingVisionary Vanguard 0 0 0 0 0 0 0 0 0 0 Remodelling Mjolnir 0 0 0 0 0 0 0 0 0 0 Remodelling Titan Fine 0 0 0 0 0 0 0 0 0 0 Remodelling Banner`s Green 0 0 0 0 0 0 0 0 0 0 Remodelling Bank & Trust 0 0 0 0 0 0 0 0 0 0 Total Capital Expenditures 0 0 93,719 0 93,719 0 0 0 0 0Total Leasing & Capital Costs 52,512 0 93,719 0 146,232 28,917 0 0 0 28,917Cash Flow Before Debt Service 36,871 30,905 4,632 30,905 103,314 66,277 33,586 101,031 33,586 234,479Debt Service Interest First Northeasternville Bank Loan 16,945 16,825 16,704 16,583 67,057 16,459 16,334 16,208 16,080 65,081 Total Interest 16,945 16,825 16,704 16,583 67,057 16,459 16,334 16,208 16,080 65,081 Principal First Northeasternville Bank Loan 9,993 10,113 10,234 10,355 40,695 10,479 10,604 10,730 10,858 42,671 Total Principal 9,993 10,113 10,234 10,355 40,695 10,479 10,604 10,730 10,858 42,671Total Debt Service 26,938 26,938 26,938 26,938 107,752 26,938 26,938 26,938 26,938 107,752Cash Flow After Debt Service 9,933 3,967 -22,306 3,967 -4,438 39,339 6,648 74,093 6,648 126,727Financing Proceeds First Northeasternville Bank Loan 0 0 0 0 0 0 0 0 0 0 Total Proceeds 0 0 0 0 0 0 0 0 0 0Total Financing (Net) 0 0 0 0 0 0 0 0 0 0Cash Flow Available for Distribution 126,727-4,438 39,339 6,648 74,093 6,6489,933 3,967 -22,306 3,967




Quarter 25 Quarter 26 Quarter 27 Quarter 28 Total Quarter 29 Quarter 30 Quarter 31 Quarter 32 TotalFor the Quarters Ending Sep-2025 Dec-2025 Mar-2026 Jun-2026 Jun-2026 Sep-2026 Dec-2026 Mar-2027 Jun-2027 Jun-2027Rental Revenue Potential Base Rent 129,595 129,595 129,595 129,595 518,378 131,207 131,207 131,207 131,207 524,828 Absorption & Turnover Vacancy 0 0 0 0 0 0 0 0 0 0 Free Rent -2,729 0 0 0 -2,729 -2,473 0 0 0 -2,473 Scheduled Base Rent 126,866 129,595 129,595 129,595 515,650 128,734 131,207 131,207 131,207 522,355Total Rental Revenue 126,866 129,595 129,595 129,595 515,650 128,734 131,207 131,207 131,207 522,355Other Tenant Revenue Total Expense Recoveries 6,166 6,166 6,166 6,166 24,665 6,827 6,827 6,827 6,827 27,306Total Other Tenant Revenue 6,166 6,166 6,166 6,166 24,665 6,827 6,827 6,827 6,827 27,306Total Tenant Revenue 133,032 135,761 135,761 135,761 540,315 135,561 138,034 138,034 138,034 549,661Other Revenue Farmers Market 12,000 12,000 12,000 12,000 48,000 12,000 12,000 12,000 12,000 48,000Total Other Revenue 12,000 12,000 12,000 12,000 48,000 12,000 12,000 12,000 12,000 48,000



Net Operating Income 99,971 34,988 102,434 34,988 272,381 101,553 36,340 103,785 36,340 278,017Leasing Costs Tenant Improvements 16,658 0 0 0 16,658 15,081 0 0 0 15,081 Leasing Commissions 10,382 0 0 0 10,382 9,408 0 0 0 9,408 Total Leasing Costs 27,041 0 0 0 27,041 24,489 0 0 0 24,489Capital Expenditures Set Up Costs Farmers Market 0 0 0 0 0 0 0 0 0 0 LEED Registration Fee 0 0 0 0 0 0 0 0 0 0 LEED Precertification Flat Fee 0 0 0 0 0 0 0 0 0 0 Certification Review 0 0 0 0 0 0 0 0 0 0 LEED Capital Expenses 0 0 0 0 0 0 0 0 0 0 Remodelling Knowhere to Go 0 0 0 0 0 0 0 0 0 0 Remodelling Bifrost 0 0 0 0 0 0 0 0 0 0 Remodelling Plant Your Groots 0 0 0 0 0 0 0 0 0 0 Remodelling Shield Strategies 0 0 0 0 0 0 0 0 0 0 RemodellingVisionary Vanguard 0 0 0 0 0 0 0 0 0 0 Remodelling Mjolnir 0 0 0 0 0 0 0 0 0 0 Remodelling Titan Fine 0 0 0 0 0 0 0 0 0 0 Remodelling Banner`s Green 0 0 0 0 0 0 0 0 0 0 Remodelling Bank & Trust 0 0 0 0 0 0 0 0 0 0 Total Capital Expenditures 0 0 0 0 0 0 0 0 0 0Total Leasing & Capital Costs 27,041 0 0 0 27,041 24,489 0 0 0 24,489Cash Flow Before Debt Service 72,930 34,988 102,434 34,988 245,340 77,064 36,340 103,785 36,340 253,528Debt Service Interest First Northeasternville Bank Loan 15,950 15,819 15,687 15,553 63,009 15,417 15,279 15,141 15,000 60,837 Total Interest 15,950 15,819 15,687 15,553 63,009 15,417 15,279 15,141 15,000 60,837 Principal First Northeasternville Bank Loan 10,988 11,119 11,251 11,385 44,743 11,521 11,659 11,797 11,938 46,915 Total Principal 10,988 11,119 11,251 11,385 44,743 11,521 11,659 11,797 11,938 46,915Total Debt Service 26,938 26,938 26,938 26,938 107,752 26,938 26,938 26,938 26,938 107,752Cash Flow After Debt Service 45,992 8,050 75,496 8,050 137,588 50,126 9,402 76,847 9,402 145,776Financing Proceeds First Northeasternville Bank Loan 0 0 0 0 0 0 0 0 0 0 Total Proceeds 0 0 0 0 0 0 0 0 0 0Total Financing (Net) 0 0 0 0 0 0 0 0 0 0Cash Flow Available for Distribution 145,776137,588 50,126 9,402 76,847 9,40245,992 8,050 75,496 8,050







Net Operating Income 99,519 36,995 104,440 36,995 277,948 90,243 40,876 108,322 40,876 280,316Leasing Costs Tenant Improvements 13,997 0 0 0 13,997 49,269 0 0 0 49,269 Leasing Commissions 10,802 0 0 0 10,802 36,164 0 0 0 36,164 Total Leasing Costs 24,798 0 0 0 24,798 85,433 0 0 0 85,433Capital Expenditures Set Up Costs Farmers Market 0 0 0 0 0 0 0 0 0 0 LEED Registration Fee 0 0 0 0 0 0 0 0 0 0 LEED Precertification Flat Fee 0 0 0 0 0 0 0 0 0 0 Certification Review 0 0 0 0 0 0 0 0 0 0 LEED Capital Expenses 0 0 0 0 0 0 0 0 0 0 Remodelling Knowhere to Go 0 0 0 0 0 0 0 0 0 0 Remodelling Bifrost 0 0 0 0 0 0 0 0 0 0 Remodelling Plant Your Groots 0 0 0 0 0 0 0 0 0 0 Remodelling Shield Strategies 0 0 0 0 0 0 0 0 0 0 RemodellingVisionary Vanguard 0 0 0 0 0 0 0 0 0 0 Remodelling Mjolnir 0 0 0 0 0 0 0 0 0 0 Remodelling Titan Fine 0 0 0 0 0 0 0 0 0 0 Remodelling Banner`s Green 0 0 0 0 0 0 0 0 0 0 Remodelling Bank & Trust 0 0 0 0 0 0 0 0 0 0 Total Capital Expenditures 0 0 0 0 0 0 0 0 0 0Total Leasing & Capital Costs 24,798 0 0 0 24,798 85,433 0 0 0 85,433Cash Flow Before Debt Service 74,720 36,995 104,440 36,995 253,150 4,809 40,876 108,322 40,876 194,883Debt Service Interest First Northeasternville Bank Loan 14,857 14,714 14,568 14,420 58,559 14,271 14,120 13,967 13,813 56,171 Total Interest 14,857 14,714 14,568 14,420 58,559 14,271 14,120 13,967 13,813 56,171 Principal First Northeasternville Bank Loan 12,081 12,225 12,370 12,518 49,194 12,667 12,818 12,971 13,125 51,581 Total Principal 12,081 12,225 12,370 12,518 49,194 12,667 12,818 12,971 13,125 51,581Total Debt Service 26,938 26,939 26,938 26,938 107,753 26,938 26,938 26,938 26,938 107,752Cash Flow After Debt Service 47,782 10,056 77,502 10,057 145,397 -22,129 13,938 81,384 13,938 87,131Financing Proceeds First Northeasternville Bank Loan 0 0 0 0 0 0 0 0 0 0 Total Proceeds 0 0 0 0 0 0 0 0 0 0Total Financing (Net) 0 0 0 0 0 0 0 0 0 0Cash Flow Available for Distribution 87,131145,397 -22,129 13,938 81,384 13,93847,782 10,056 77,502 10,057



Forecast Forecast Forecast Forecast Forecast Forecast

Quarter 41 Quarter 42 Quarter 43 Quarter 44 TotalFor the Quarters Ending Sep-2029 Dec-2029 Mar-2030 Jun-2030 Jun-2030 TotalRental Revenue Potential Base Rent 140,613 141,420 141,420 141,420 564,874 5,463,875 Absorption & Turnover Vacancy -5,453 0 0 0 -5,453 -48,234 Free Rent -4,090 0 0 0 -4,090 -50,184 Scheduled Base Rent 131,071 141,420 141,420 141,420 555,332 5,365,457Total Rental Revenue 131,071 141,420 141,420 141,420 555,332 5,365,457Other Tenant Revenue Total Expense Recoveries 6,054 5,786 5,786 5,786 23,411 235,281Total Other Tenant Revenue 6,054 5,786 5,786 5,786 23,411 235,281Total Tenant Revenue 137,126 147,206 147,206 147,206 578,743 5,600,738Other Revenue Farmers Market 12,000 12,000 12,000 12,000 48,000 502,500Total Other Revenue 12,000 12,000 12,000 12,000 48,000 502,500

Potential Gross Revenue 149,126 159,206 159,206 159,206 626,743 6,103,238Vacancy & Credit Loss Vacancy Allowance -4,469 -7,071 -7,071 -7,071 -25,682 -254,255Total Vacancy & Credit Loss -4,469 -7,071 -7,071 -7,071 -25,682 -254,255

Effective Gross Revenue 144,656 152,135 152,135 152,135 601,060 5,848,983Operating Expenses Common Area Maintenance 7,942 7,942 7,942 7,942 31,769 312,960 Insurance 1,986 1,986 1,986 1,986 7,942 78,240 Legal & Professional 1,165 1,165 1,165 1,165 4,662 45,923 Management & Leasing 7,233 7,607 7,607 7,607 30,053 292,449 Real Estate Tax 0 67,446 0 67,446 134,891 1,463,051 Reserves 1,468 1,468 1,468 1,468 5,870 57,830 Structural Repairs & Maintenance 5,266 5,266 5,266 5,266 21,064 207,506 Utilities/Heat 16,983 16,983 16,983 16,983 67,932 671,737Total Operating Expenses 42,043 109,862 42,417 109,862 304,184 3,129,696

Net Operating Income 102,614 42,272 109,718 42,272 296,877 2,719,287Leasing Costs Tenant Improvements 18,310 0 0 0 18,310 247,087 Leasing Commissions 14,186 0 0 0 14,186 178,780 Total Leasing Costs 32,496 0 0 0 32,496 425,866Capital Expenditures Set Up Costs Farmers Market 0 0 0 0 0 15,000 LEED Registration Fee 0 0 0 0 0 1,500 LEED Precertification Flat Fee 0 0 0 0 0 5,000 Certification Review 0 0 0 0 0 1,350 LEED Capital Expenses 0 0 0 0 0 207,525 Remodelling Knowhere to Go 0 0 0 0 0 93,719 Remodelling Bifrost 0 0 0 0 0 108,296 Remodelling Plant Your Groots 0 0 0 0 0 71,808 Remodelling Shield Strategies 0 0 0 0 0 89,640 RemodellingVisionary Vanguard 0 0 0 0 0 68,860 Remodelling Mjolnir 0 0 0 0 0 105,356 Remodelling Titan Fine 0 0 0 0 0 66,521 Remodelling Banner`s Green 0 0 0 0 0 76,500 Remodelling Bank & Trust 0 0 0 0 0 84,750 Total Capital Expenditures 0 0 0 0 0 995,825Total Leasing & Capital Costs 32,496 0 0 0 32,496 1,421,691Cash Flow Before Debt Service 70,118 42,272 109,718 42,272 264,381 1,297,595Debt Service Interest First Northeasternville Bank Loan 0 0 0 0 0 656,929 Total Interest 0 0 0 0 0 656,929 Principal First Northeasternville Bank Loan 0 0 0 0 0 420,593 Total Principal 0 0 0 0 0 420,593Total Debt Service 0 0 0 0 0 1,077,522Cash Flow After Debt Service 70,118 42,272 109,718 42,272 264,381 220,073Financing Proceeds First Northeasternville Bank Loan 0 0 0 0 0 1,575,000 Total Proceeds 0 0 0 0 0 1,575,000Total Financing (Net) 0 0 0 0 0 1,575,000Cash Flow Available for Distribution 1,795,07370,118 42,272 109,718 42,272 264,381


Hold & Improve - IRR ReportHold & Improve – IRR Report

P.V. of P.V. of P.V. of P.V. of P.V. of NOI toAnalysis Period Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow BookPeriod Ending Before Debt Service @ 7,00 % @ 7,50 % @ 8,00 % @ 8,50 % @ 9,00 % ValueQuarter 1 Sep-2019 -48,314 -45,153 -44,943 -44,735 -44,529 -44,325 2.83%Quarter 2 Dec-2019 -117,151 -109,487 -108,977 -108,473 -107,973 -107,478 0.02%Quarter 3 Mar-2020 -77,923 -72,825 -72,487 -72,151 -71,819 -71,489 2.97%Quarter 4 Jun-2020 13,125 12,266 12,209 12,153 12,097 12,041 0.52%Quarter 5 Sep-2020 30,930 27,015 26,765 26,517 26,274 26,033 2.96%Quarter 6 Dec-2020 19,165 16,740 16,584 16,431 16,280 16,131 0.74%Quarter 7 Mar-2021 -170,512 -148,931 -147,549 -146,186 -144,842 -143,516 2.92%Quarter 8 Jun-2021 19,165 16,740 16,584 16,431 16,280 16,131 0.67%Quarter 9 Sep-2021 -1,616 -1,319 -1,301 -1,283 -1,265 -1,248 2.57%Quarter 10 Dec-2021 24,737 20,193 19,913 19,637 19,367 19,102 0.85%Quarter 11 Mar-2022 813 664 655 646 637 628 3.00%Quarter 12 Jun-2022 24,737 20,193 19,913 19,637 19,367 19,102 0.82%Quarter 13 Sep-2022 59,358 45,284 44,448 43,630 42,832 42,051 2.86%Quarter 14 Dec-2022 27,035 20,625 20,244 19,871 19,507 19,152 0.89%Quarter 15 Mar-2023 -82,066 -62,607 -61,451 -60,321 -59,216 -58,137 2.88%Quarter 16 Jun-2023 27,035 20,625 20,244 19,871 19,507 19,152 0.84%Quarter 17 Sep-2023 36,871 26,289 25,683 25,094 24,521 23,964 2.74%Quarter 18 Dec-2023 30,905 22,035 21,527 21,034 20,553 20,086 0.95%Quarter 19 Mar-2024 4,632 3,302 3,226 3,152 3,080 3,010 2.93%Quarter 20 Jun-2024 30,905 22,035 21,527 21,034 20,553 20,086 0.92%Quarter 21 Sep-2024 66,277 44,163 42,945 41,766 40,624 39,519 2.81%Quarter 22 Dec-2024 33,586 22,380 21,762 21,165 20,586 20,026 0.99%Quarter 23 Mar-2025 101,031 67,321 65,464 63,667 61,927 60,242 2.98%Quarter 24 Jun-2025 33,586 22,380 21,762 21,165 20,586 20,026 0.99%Quarter 25 Sep-2025 72,930 45,417 43,959 42,554 41,200 39,895 2.93%Quarter 26 Dec-2025 34,988 21,789 21,089 20,415 19,766 19,140 1.02%Quarter 27 Mar-2026 102,434 63,791 61,742 59,769 57,868 56,035 3.00%Quarter 28 Jun-2026 34,988 21,789 21,089 20,415 19,766 19,140 1.02%Quarter 29 Sep-2026 77,064 44,852 43,210 41,635 40,125 38,676 2.95%Quarter 30 Dec-2026 36,340 21,150 20,376 19,633 18,921 18,238 1.06%Quarter 31 Mar-2027 103,785 60,404 58,193 56,072 54,038 52,086 3.02%Quarter 32 Jun-2027 36,340 21,150 20,376 19,633 18,921 18,238 1.06%Quarter 33 Sep-2027 74,720 40,643 38,973 37,379 35,857 34,403 2.87%Quarter 34 Dec-2027 36,995 20,123 19,296 18,507 17,753 17,033 1.07%Quarter 35 Mar-2028 104,440 56,809 54,474 52,246 50,119 48,087 3.01%Quarter 36 Jun-2028 36,995 20,123 19,296 18,507 17,753 17,033 1.07%Quarter 37 Sep-2028 4,809 2,445 2,333 2,228 2,127 2,031 2.54%Quarter 38 Dec-2028 40,876 20,779 19,833 18,933 18,079 17,266 1.15%Quarter 39 Mar-2029 108,322 55,065 52,557 50,174 47,909 45,756 3.05%Quarter 40 Jun-2029 40,876 20,779 19,833 18,933 18,079 17,266 1.15%Totals 1,033,215 527,033 501,376 476,786 453,214 430,614

4,092,572 2,080,456 1,985,691 1,895,653 1,810,085 1,728,7472,607,489 2,487,067 2,372,438 2,263,299 2,159,361Total Unleveraged Present Value



Hold & Improve - PV ReportHold & Improve – PV Report

Valuation (PV/IRR) Date: July, 2019Date of Sale: June, 2029Discount Method: AnnualPeriod to Cap (at Sale): 12 Months After Sale

Table Shows: 1) IRR (Unleveraged)2) IRR (Leveraged) 4,792,641 4,415,045 4,092,572 3,813,972 3,570,864

3,638,234 3,260,638 2,938,165 2,659,565 2,416,4575,85% 6,35% 6,85% 7,35% 7,85%

2,063,000 10,86% 10,14% 9,49% 8,89% 8,34%488,000 16,14% 14,98% 13,89% 12,88% 11,93%7,45%

2,113,000 10,61% 9,88% 9,23% 8,64% 8,09%538,000 15,50% 14,35% 13,27% 12,27% 11,32%

1) Purchase Price 7,28%2) Equity 2,163,000 10,36% 9,63% 8,98% 8,39% 7,84%3) Going In Cap Rate 588,000 14,90% 13,75% 12,69% 11,69% 10,75%

7,11%2,213,000 10,11% 9,39% 8,74% 8,14% 7,60%638,000 14,33% 13,19% 12,13% 11,14% 10,21%6,95%

2,263,000 9,87% 9,15% 8,50% 7,91% 7,36%688,000 13,80% 12,66% 11,61% 10,62% 9,69%6,79%

NOI To Capitalize 296,877 296,877 296,877 296,877 296,877 Divided by Cap Rate 5,85% 6,35% 6,85% 7,35% 7,85%Gross Sales Price 5,074,812 4,675,221 4,333,964 4,039,136 3,781,867 Adjustments to Sale 0 0 0 0 0Adjusted Gross Sales Price 5,074,812 4,675,221 4,333,964 4,039,136 3,781,867 Cost of Sales -282,171 -260,176 -241,392 -225,164 -211,003Net Sale Price 4,792,641 4,415,045 4,092,572 3,813,972 3,570,864 Loan Balance -1,154,407 -1,154,407 -1,154,407 -1,154,407 -1,154,407Net Sale Proceeds 3,638,234 3,260,638 2,938,165 2,659,565 2,416,457






Hold & Improve - Loan Amortization ReportHold & Improve – Loan Amortization Report




Total Jun - 2020 0 1,575,000 4.75% 107,752 74,086 33,666 0 1,541,334


Total Jun - 2021 1,541,334 0 4.75% 107,752 72,451 35,301 0 1,506,033


Total Jun - 2022 1,506,033 0 4.75% 107,753 70,738 37,015 0 1,469,018


Total Jun - 2023 1,469,018 0 4.75% 107,752 68,940 38,812 0 1,430,206


Total Jun - 2024 1,430,206 0 4.75% 107,752 67,057 40,695 0 1,389,511


Total Jun - 2025 1,389,511 0 4.75% 107,752 65,081 42,671 0 1,346,840


Total Jun - 2026 1,346,840 0 4.75% 107,752 63,009 44,743 0 1,302,097


Total Jun - 2027 1,302,097 0 4.75% 107,752 60,837 46,915 0 1,255,182


Total Jun - 2028 1,255,182 0 4.75% 107,753 58,559 49,194 0 1,205,988


Total Jun - 2029 1,205,988 0 4.75% 107,752 56,171 51,581 1,154,407 0

Final Totals 0 * Results displayed are based on Forecast data only


1,575,000 4.75% 1,077,522 656,929 420,593 1,154,407 0



SourcesBroad Economic Outlook

US Economics Analyst; 2019 Outlook: The Home Stretch; Goldman Sachs Economics Research; 2018 https://www.goldmansachs.com/insights/pages/outlook-2019/us-outlook/report.pdf.

Real Estate Market Outlook 2019;CBRE;http://cbre.vo.llnwd.net/grgservices/secure/2019%20US%20Real%20sta

te%20Market%20Outlook%20_ECONOMY__G3rK.pdf?e=1550782744&h=1c3ca91c9c7c303eede5e0dd1baa54af.

The Outlook for the U.S. Economy; Chairman Jerome H. Powell; At The Economic Club of Chicago, Chicago, Illinois; 2018 https://www.federalreserve.gov/newsevents/speech/powell20180406a.htm.

United States Economic Forecast; 2018 https://www2.deloitte.com/insights/us/en/ economy/us-economic-forecast/united-states-outlook-analysis.html.

Adam Ruggiero (2019); Real Estate’s Past Is Rarely Prologue; https://docs.prea.org/pub/D43561A6-010D-6242-30C4-0FAAF989CCC9.

PWC (2018); PWC Emerging Trends in Real Estate 2019; https://www.pwc.com/us/en/industries/asset-wealth-management/real-estate/emerging-trends-in-real-estate.html.

JLL (2018); JLL Q418 Retail Overview.

CBRE (2019); Global Real Estate Market Outlook 2019; Retail, Page 6; https://www.cbre.us/research-and-reports/2019-Global-Real-Estate-Market-Outlook.

CBRE (2018); 2019 U.S. Real Estate Market Outlook Retail; https://www.cbre.us/research-and-reports/2019-US-Real-Estate-Market-Outlook-Retail.

CBRE (2018); 2019 U.S. Real Estate Market Outlook Office; https://www.cbre.us/research-and-reports/2019-US-Real-Estate-Market-Outlook-Office.

Jeff Pochepan (2018); What’s the Big Deal With Biophilic Office Design?; https://www.inc.com/jeff-pochepan/put-mother-nature-to-work-with-biophilic-design.html.


Market Analysis

CoStar Realty Information Inc.

RREEF Research; The Greening of U.S. Investment Real Estate – Market Fundamentals, Prospects and Opportunities; http://mts.sustainableproducts.com/Capital_Markets_Partnership/ BusinessCase/SO_57_Greening_of_US_Investment_RE.pdf.

Deloitte; Shared and self-driving cars A game changer in real estate and area development? https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/realestate/reflexions/lu_shared-self-driving-cars-real-estate.pdf.

University of Denver; Rutt Bridges;

Driverless cars revolution and its impact on the Real Estate Industry; http://daniels-pull.universityofdenv.netdna-cdn.com/assets/presentations-erer-rutt-bridges.pdf.

The Future of Last Mile (2016) McKinsey.

Joe Mikes (2018); The Surprising Impact of E-Commerce on Urban Real Estate Markets; http://www.areadevelopment.com/logisticsInfrastructure/Q4-2018/impact-of-e-commerce-on-urban-real-estate-markets.shtml.

Rocio Budetta (2019); I want it and I want it now: The last portion of the delivery process; https://www.globalrealestateexperts.com/2019/01/the-last-portion-delivery-process/.

Statista (2018);Retail e-commerce sales in the United States from 2017 to 2023 (in million U.S. dollars); https://www.statista.com/outlook/243/109/ecommerce/united-states#market-revenue.

Financial Underwriting

California Farmers` Market Association; Open A Farmers` Market; http://www.cafarmersmkts.com/about#open-a-farmers-market.

Farmers` Market Federation of New York; Growing Connections; http://www.nyfarmersmarket.com/2016-annual-report/.

hap; Worksite Farmers’ Market How-To Guide; https://www.hap.org/~/media/files/hap/for-employer/farmers-market.pdf.

Prevu; Seller Closing Costs NYC - What You Can Expect in 2019; https://www.prevu.com/blog/seller-closing-costs-nyc.


JOHANNES HUMMELJohannes Hummel was born and raised in Munich, Germany. He graduated from the University of Applied Science in Munich with a Bachelor of Arts in Business Administration, majoring in Banking, Finance and Risk Management. Prior to participating in the double program recently set up by the University of San Diego and the University of Regensburg, Johannes completed one year of real estate graduate studies in Germany. During his studies, Johannes worked for UniCredit Bank AG, WealthCap Management and BNP Paribas Investment Management gaining real estate exposure.

Biographies

ALEX ANDER DOWAlexander Dow grew up in Sacramento, California. He attended Seattle University where he earned a Bachelor of Arts in Communications and competed on the golf team. Since graduating in 2015 he has focused on multifamily real estate while living in Seattle, San Francisco, and now San Diego. Alexander is a full-time MSRE student at the University of San Diego and is also responsible for California business development at a national third-party property management company.

T YLER JENKINSTyler Jenkins was born and raised in the San Francisco Bay Area. He currently serves as the Acquisitions Associate for KirE Builders, Inc. in San Diego, a local housing developer. Prior to KirE Builders, Tyler spent three years as an Associate for Transwestern Commercial Services where he specialized in industrial leasing and sales in the East Bay’s I-880 corridor. He is a part-time student in the Master of Science in Real Estate (MSRE) program at the University of San Diego and will be joining Sunroad Asset Management in San Diego as a Senior Analyst in April.

THEODORE K AVICHTheodore Kavich was born in Los Angeles, California and has lived in Southern California for most of his life. He served four years in the United States Marine Corps as an Infantryman. After completing his service he attended Chapman University earning his B.S. in Business Administration. He is a full-time MSRE student at the University of San Diego and currently works for a large private real estate investment company where he is responsible for multi-family acquisitions.

SHANE ISDANERShane Isdaner is an Associate at IDS Real Estate Group and part-time student at the University of San Diego’s Master of Science in Real Estate (MSRE) program. In his role at IDS, Shane is involved in the management, leasing, and acquisition efforts of a portfolio of properties. Prior to IDS, Shane spent five years managing divisions of a large commercial contractor in San Diego. His professional career also includes experience in investment banking with Nomura Securities in New York City.

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