208 bloor street west toronto, ontario · appraisal group inc. 1 agi appraisal group inc. suite...

Appraisal Group Inc. 0

Appraisal Report

Of The Real Property Located At:

208 Bloor Street West Toronto, Ontario.

Prepared For:

208 Bloor Street West Inc. c/o Esbin Property Management

Suite No. 300 162 Cumberland Street

Toronto, Ontario. M5R 3N5

Attention: Mr. Ross Lyndon, ASO

Prepared By:

Appraisal Group Inc. Suite #201

5620 Finch Avenue East Toronto, Ontario.

M1B 1T1


AGI Appraisal Group Inc.

Suite #201 5620 Finch Avenue East Toronto, Ontario. M1B 1T1 Cell: (416) 871-0922 Bus: (416) 444-0454 Fax: (905) 403-0547

June 15, 2012

Esbin Property Management Suite No. 300 162 Cumberland Street Toronto, Ontario. M5R 3N5 Attention: Mr. Ross Lyndon, ASO Re: 208 Bloor Street West Toronto, Ontario ___________________ Dear Mr. Lyndon: As requested we have completed our appraisal of the above referenced real property in order to provide an estimate of Market Value for internal accounting purposes. After investigation and valuation analysis, it is our opinion, that the estimated Market Value of the real property, subject to the leased fee estate, any outstanding realty taxes, hydro charges, liens, work orders or special assessments, as of May 24, 2012 is:

TEN MILLION DOLLARS ($10,000,000.00)


The subject property is located on the north side of Bloor Street West between Avenue Road and Bedford Road within Toronto’s “Mid-Town” commercial-retail core. Bloor Street West is a major east-west traffic artery that transects the City and there are two subway stations within a short walk from the property. Both pedestrian and vehicular traffic flow in the area is above average. The neighbourhood is dominated by the sprawling campus of the University of Toronto and Queen’s Park south of Bloor Street West. Properties along the north side of Bloor Street West are high density developments and include two hotels and two apartment condominium complexes. The Royal Ontario Museum and Varsity Stadium are located on the south side of Bloor Street in close proximity to the subject. According to a recent survey conducted by CB Richard Ellis the vacancy rate for the mid-town Class “B” office space is 7.2% and is expected to trend downward. The subject site is an irregular-shaped, interior parcel having a frontage of 44.9 feet on the north side of Bloor Street West and an average depth of 130.0 feet. According to Land Registry records the total site area is .13 acres or 5,748 square feet more or less. There is no on-site parking however, the owner leases the lands to the immediate north owned by the City of Toronto. The subject site is improved with a nine-storey office building that was constructed in the late 1960’s or early 1970’s. According to a current rent roll the total above grade net rentable area of the building is 34,856 square feet plus 4,800 square feet of finished basement space. The main and second floors contain a small pharmacy, a restaurant with an outdoor patio and a bar-tavern. The remaining upper levels are leased primarily to medical office users. At the time of our inspection 6.8% of the net rentable was vacant. Given the good condition of the improvements and location in close proximity to subway transit unusual vacancies are not anticipated. Both the Direct Comparison and Income Approaches were employed in our estimate of the subject’s current Market Value. Considering the investment nature of the real estate as a rental office building, full


reliance was placed on the latter methodology to arrive at our final value estimate. We have relied on lease documentation and operating statements provided by the Property Manager which is assumed to be factual and accurate. In the event our assumption proves incorrect or additional information becomes available we reserve the right to amend our value accordingly. An environmental audit was not available for our review and this report assumes that the property complies with all requirements of the authorities having jurisdiction over these matters. All comments, opinions and conclusions are outlined in this report to the extent felt necessary in support of the final value estimate. Specific attention should be given to the Assumptions and Limiting Conditions contained herein which form an integral part of this analysis. The undersigned certify that they have no present or contemplated interest in this property of any kind whatsoever and that this valuation has been performed in accordance with the Canadian Uniform Standards of Professional Appraisal Practice (“The Standard”) adopted by the Appraisal Institute of Canada and effective January 1, 2001. Yours truly,

Appraisal Group Inc.

Karl Young ICI Real Estate Analyst

Wayne Crawford AACI, P. App


TABLE OF CONTENTS

TITLE PAGE LETTER OF TRANSMITTAL TABLE OF CONTENTS SUMMARY OF SALIENT FACTS AND CONCLUSIONS PART 1 – PREFACE PURPOSE OF APPRAISAL 8 DEFINITION OF VALUE 8 EFFECTIVE DATE OF APPRAISAL 8 PROPERTY APPRAISED 8 LEGAL DESCRIPTION 9 SCOPE OF WORK 10 PART 2 – ANALYSIS AND CONCLUSIONS NEIGHBOURHOOD ANALYSIS 12 SITE DESCRIPTION 13 DESCRIPTION OF IMPROVEMENTS 15 HIGHEST AND BEST USE ESTIMATE 17 DIRECT COMPARISON APPROACH 22 INCOME APPROACH 24 CORRELATION AND FINAL ESTIMATE OF VALUE 28 CERTIFICATE OF VALUE 30 ASSUMPTIONS AND LIMITING CONDITIONS 32 PART 3 – ADDENDA SUBJECT AND AREA PHOTOGRAPHS


SUPPORTING MARKET DATA SCHEDULES LOCATION MAPS SITE PLAN OFFICIAL PLAN

SUMMARY OF SALIENT FACTS AND CONCLUSIONS Effective Date of Valuation: May 24, 2012 Purpose of Valuation: To estimate the current Market Value of the

within described real property subject to the Assumptions and Limiting Conditions contained herein.

Municipal Address: 208 Bloor Street West, Toronto, Ontario. Location: The north side of Bloor Street West, west of

Avenue Road. Lot Area: 5,748 square feet or .13 acres more or less. Frontage: 44.19 feet Zoning Classification: CR T3.0 C2.0 R2.5 Existing Improvements: An existing nine-storey, professional office

building with main and second floor retail uses. The total net rentable area of the building including finished basement space is 39,656 square feet.

Highest and Best Use: The continuation of the existing use as a

professional office building. Direct Comparison Approach: $10,700,000. Income Approach: $10,000,000. Final Market Value Estimate: $10,000,000.


Part 1 - Preface Property Owner:


208 Bloor Street West Inc. c/o Esbin Property Management Suite No. 300 162 Cumberland Street Toronto, Ontario. M5R 3N5

Purpose of Appraisal:

To estimate the current Market Value of the rights associated with ownership of the herein described real property for internal accounting purposes. Definition of Value:

For the purpose of this valuation Market Value may be described as follows:

“The most probable price which a specified interest in real property is likely to bring under all of the following conditions: consummation of a sale occurs as of a specific date; an open and competitive market exists for the property interest appraised; the buyer and seller are each acting prudently and knowledgeably; the price is not affected by undue stimulus; the buyer and seller are typically motivated; both parties are acting in what they consider their best interest; market efforts were adequate and a reasonable time was allowed for exposure in the open market; payment was made in cash in Canadian dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sale concessions granted by anyone associated with the sale.”

Effective Date of Valuation: This valuation applies as of May 24, 2012. Civic Address:

The subject property is known municipally as:

208 Bloor Street West Toronto, Ontario


Brief Legal Description: Plan 289, Lot 1, Part RP 66R 5868, Part 1 together with a ROW over Parts 2 and 3, 66R5868 and a ROW over Part 4, 66R5865. City of Toronto Province of Ontario All of which may be more particularly illustrated on the maps and sketches provided herein.

SCOPE OF WORK


The scope of the work encompasses the necessary research and analysis to

prepare a report in accordance with the intended use, and the Canadian

Uniform Standards of Professional Appraisal Practice (CUSPAP) adopted by

the Appraisal Institute of Canada on January 1, 2001. In regard to the subject

property, this involved the following steps:

1. The property was inspected by Karl Young, ICI Real Estate Analyst on May 24, 2012. The photographs included in this report were taken over the ensuing week. Karl Young has the requisite expertise to inspect a property of this type. Wayne Crawford, AACI, P. App did not inspect the property nor review the leases and has acted in a review capacity only.

2. The neighbourhood section of the report was

based upon a physical inspection of the area.

3. The site dimensions utilized in the report were extracted from a Plan of Survey as well as Land Registry and Assessment records.

4. Most leases and extension agreements were

provided and reviewed.

5. In estimating the Highest and Best Use for the property, an analysis was made of data compiled in the three steps noted above.

6. In developing approaches to value, the market

data used was collected from the Appraisal Group Inc. office files, Land Registry Office records, Geo-Warehouse, Toronto Real Estate Board MLS and other appraisers, Realtors, or persons knowledgeable of the subject property marketplace.

7. After assembling and analysing the data defined

in this scope of the work, a Final Estimate of Market Value was made.


Part 2 – Analysis & Conclusions


Neighbourhood Analysis: The location maps included in the addenda of this report show that the subject property is situated on the north side of Bloor Street West between Avenue Road and Bedford Road within an established mixed-use area west of Yonge Street. Bloor Street is a major east-west traffic artery and is considered to be the focal point of Toronto’s mid-town business core. The neighbourhood may be generally defined by the connective boundaries of Bathurst Street to the west, Yonge Street to the east, Davenport Road to the north and College Street to the south. Land Uses: The neighbourhood is dominated by the sprawling campus of the University of Toronto and Queen’s Park south of Bloor Street West as well as the Yorkville Fashion District east of Avenue Road. Residential development including low and high density rental properties and apartment condominiums are primarily west of Avenue Road and north of Bloor Street West in a neighbourhood known as The Annex. Development along both sides of Bloor Street West in the vicinity of the subject consist of high-density commercial and institutional buildings,two apartment condominiums, two hotels, the Royal Ontario Museum and Varsity Stadium. Photographs of the subject and surrounding land uses are included in the addenda of this report. Municipal Services: Full municipal services together with most amenities associated with established urban areas including paved roads, sanitary and storm sewers, water mains, hydro and telephone lines, curbs, gutters, street lights, natural gas and fire-police protection are available throughout the neighbourhood.

Transportation:

Vehicular access to the area is considered to be good with a network of main arterial roads in four directions. Bloor Street transects the City and is a direct link to the Don Valley Parkway in the east and Highway 427 to the west. The Gardiner Expressway is approximately three miles to the south via Avenue Road-University Avenue.


Public transportation in the neighbourhood is excellent with bus service provided by Toronto Transit along all major routes. Two Yonge-Bloor subway stations are within a short walk from the subject property.

New Construction Activity: There was no new construction activity along Bloor Street West in the vicinity of the property at the time of our inspection. Most construction now underway in the downtown and mid-town core is primarily high-rise apartment condominiums. Conclusions:

The subject property is situated on a major traffic artery in Toronto’s “Mid-Town” in very close proximity to subway transit. Vehicular and public transit access to the property is very good and there is no on-site parking which is not unusual within the downtown core. Surface and underground public parking are available directly behind the property with access from Bedford Road and metered parking is permitted along both sides of Bloor Street West during non rush-hour periods. We have concluded that the location of the subject site for a professional office building with public transit access and nearby parking facilities is very good and unusual long-term vacancies are not anticipated.

Site Description:

The subject site is a rectangular-shaped, interior parcel on the north side of Bloor Street West between Avenue Road and Bedford Road. According to Land Registry records the lot has a frontage of 44.19 feet and a depth of 130.0 feet. The total site area is reported to be 5,748 square feet or .13 acres more or less. Except for a narrow strip along the rear lot line which houses disposal bins the lot is improved with a nine-storey office building that was likely constructed in the late 1960’s or early 1970’s. The subject has a Right-of Way (ROW) over the lands behind the property identified as parts 2, 3, and 4 on the enclosed plan of survey. The lands in question are owned by the City of Toronto who has agreed to extend the lease for a further 5 years from January 1, 2011 to December 31, 2015. The


current rent paid by the owner of 208 Bloor Street West is $45,900 per annum increasing to $46,818 in January 2013, $47,754 in January 2014 and $48,709 in January 2015. The lease indicates that there will be no further right of renewal. A site plan and a Plan of Survey dated December 19, 2005 illustrating the location of the improvement on the lot are included in the addenda section of this analysis. Assessment & Taxes:

The MPAC property assessment of the subject property as of January 1, 2012 was $7,678,000 and tax rates for 2012 are estimated to be $244,285. The 2011 CVA Taxes were $236,983.88 which equates to $5.99 per square foot of the improvement’s net rentable area. Assessed Property: 208 Bloor Street West, Toronto Roll Number: 190405208003200 PIN: 212130016 Actual Taxes (2011): $236,983.88 Assessed Area: .13 acres Official Plan and Zoning:

Under the City of Toronto’s Official Plan the property is located within a “Mixed-Use Area” which runs along the Bloor Street West corridor. The subject is zoned CR T3.0 C2.0 R2.5 which permits a wide variety of retail, commercial, institutional and residential uses. It should be noted that the permitted density under the By-law is 3 times the lot area and commercial uses are not to exceed 2 times the lot area. Based on the net rentable area of the building the actual density is 6.9 times the lot area. We were unable to determine if there was a site specific zoning amendment or the building was constructed prior to the Zoning By-law’s implementation. We note that newer neighbouring properties to the immediate east and west of the subject are also built-out above the permitted density. Businesses in the building include a pharmacy, a restaurant, a bar, a Yoga fitness club and upper level medical and general offices.


Although not confirmed by the City in writing it appears that the existing uses in the subject property are in compliance with the zoning By-law. Sales History Report:

A transfer of ownership to 208 Bloor Street West Inc. was registered on title on October 16, 1986 for a consideration of $0.00. Current Status: It is understood that the property is not under a current agreement or option and is not offered for sale on the open market. According to the Toronto Real Estate Board (TREB) and Land Registry records there have not been any transfers of the subject property during the past ten years other than the transaction noted above.

MLS Activity:

The property has not been listed for sale or lease on MLS during the past fifteen years. Description of Improvements: The subject property is an older, nine-storey office building that was likely constructed in the late 1960’s or early 1970’s. 1975-1976. The structure is steel frame with decorative concrete block, precast concrete panel and metal exterior wall claddings. There are large, glass window openings on the north and south elevations that appear to be original. The roof is flat and covered with built-up tar and gravel which was replaced 11 years ago. In addition to HVAC units that were essentially re-built in 2006 the roof contains an elevator penthouse. The power supply is a 2,500 ampere/600 volt service. According to lease documentation provided the building has a net rentable area (NRA) of 39,656 square feet including finished basement space containing 4,800 square feet of NRA. In addition to two stairwells the building is equipped with two 2,500 lb., 16-person passenger elevators. The elevator cars and mechanical systems were replaced 4 years ago. The basement is mostly finished and includes a small lab operated by the main floor pharmacy and a fitness club. The club includes two 6-pc washrooms with showers and features a large, heated classroom for yoga


exercises. The clear ceiling height in this area is at least 10 feet and the leasehold improvements were found to be in pristine condition and completed with quality materials and workmanship. In addition to a small lobby the ground floor is demised into a small pharmacy and a restaurant with a front, out-door canopy covered patio. The second floor houses the Museum Tavern which also has a covered outdoor seating area and can be directly accessed from a staircase at the front of the building. The upper levels contain general and medical related offices with suite sizes ranging from 203 to 4,080 square feet. Individual unit sizes and uses are summarized on the enclosed Schedule “C”. Common areas are finished with ceramic tile floor coverings, painted gypsum walls and either drywall or tile ceiling enclosures. Lighting is supplied by pot and fluorescent fixtures and the building is not sprinklered. The condition and housekeeping of the common areas were found to be very good. Each floor is equipped with shared washroom facilities. Interior office finish is standard with vinyl tile, wall-to-wall carpeting, hardwood veneer and ceramic tile floor coverings. Interior walls and partitions are painted gypsum and the drop ceilings are enclosed with acoustic tile panels supported by a T-bar metal framework. Lighting is supplied by pot and recessed fluorescent fixtures. Conclusions: The subject property is an older office building within a vibrant, mixed use neighbourhood with exposure on one of Toronto’s busiest traffic arteries. Subway transit is close by and both vehicular and pedestrian traffic flow is above average. The improvements were found to be in very good condition considering their chronological age with no evidence of any major items of deferred maintenance. The majority of office uses are medical related and may tenants have been in occupancy for five or more years. Given the above positive locational features and good condition of the improvements unusual vacancies in the property are not anticipated and after considering all relevant factors the subject represents in our view, a quality investment or security to a prospective purchaser or mortgage lender.


Highest and Best Use:

Fundamental to the concept of value in real estate is the principle

of highest and best use. It is generally defined as that use which

is most likely to produce the greatest net return over a given

period of time. Net return may not always be limited to monetary

gains and may take the form of amenities.

According to the publication entitled The Dictionary of Real

Estate Appraisal (Third Edition), published in 1993 by the

American Institute of Real Estate Appraisers, highest and best

use is defined therein as follows:

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

The definition immediately above indicated the highest and best use of land or a site as though vacant represents among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labour, capital, and coordination. The use of the property based on the assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements.

However, when a site is improved consideration must be given to the use that should be made of the property as it exists. An existing property should be renovated or retained as is so long as it continues to contribute to the total market value of the property, or until the return from a new improvement would more


than offset the cost of demolishing the existing building and constructing a new one.

Implied within these definitions is recognition of the contribution of that specific use of community environment or to community development goals in addition to wealth maximization of individual property owners.

In appraisal practice, the concept of highest and best use represents the premise upon which value is based. In the context of most probable selling price (Market Value) another appropriate term to reflect highest and best use would be; most probable use. In the context of investment value, an alternative term would be; most profitable use."

As stipulated in the preceding definition there are four tests that a

development must embrace to satisfy the Principle of Highest and

Best Use and they are as follows:

1) Legal Permissibility - The appraiser must consider the possible uses of the site, or those uses which would be legally permissible under the present zoning or the Official Plan; the feasible use which includes those possible and permissible uses producing any net return to the site; and finally the Highest and Best use among the feasible uses which would produce the highest net return or highest present worth to the site.

2) Physical Possibility- In consideration of Highest and Best Use the appraiser must consider the size of the site, location, topography, soil and sub-soil conditions without the benefits of soil test results, availability of utilities, street improvements, property access, surrounding neighbourhood, and presence or absence of nuisances or hazards.

3) Financial Feasibility- In reconciling which uses are physically possible and legally permissible, the appraiser must eliminate some uses from consideration. The uses that meet the first two criteria are analysed further to determine which are likely to produce an income or return, equal to or greater than the amount needed to satisfy the operating expenses, financial obligations and


capital amortization. All the uses that are expected to produce a positive return are regarded as financially feasible.

4) Maximum Profitability- Of the financially feasible uses, the use that produces the highest price, or value, consistent with the rate of return warranted by the marketplace for that use is the Highest and Best use. This procedure is appropriate if all competing uses have similar risk characteristics.

The Subject Property:

The Official Plan is a policy document that provides a direction for both planning and development for the best long-term interests of a municipality. As previously mentioned the subject property is within an area designated as a “Mixed-Use Area” along the Bloor Street corridor.

The subject parcel is zoned CR T3.0 C2.0 R2.5, a classification

that allows a variety of retail, commercial, institutional and residential uses. The current businesses in the property appear to be in compliance with the current land use controls however, we note that the actual density is over 2 times the permitted coverage under the By-law.

The site is a rectangular shaped, interior parcel having exposure

along a major traffic artery in close proximity to subway transit. Road. Property uses in the immediate vicinity of the subject include hotels, offices, residential apartment condominiums, retail and institutions.

The subject site is developed with an older, nine-storey office

building. The improvements were found to be in good condition, well maintained and the occupancy level is currently over 93%.

Other than a new commercial and residential condominium

complex to the immediate east there was no other re-development activity underway in the vicinity of the subject at the time of our inspection.

In view of the above, the existing use of the subject parcel as an

office building is considered to be the highest and best use of the site.


If the site was vacant it is expected that it would be developed with a similar commercial office facility up to the maximum density permitted under the current Zoning By-law.

Applications of the Approaches to Value: The valuation process is applied to develop a well-supported

opinion of a defined value based on an analysis of pertinent general and specific data. The development of an opinion of value is based on three specific appraisal procedures that reflect three distinct methods of data analysis:

• Cost • Direct Comparison • Income

One or more of the above approaches are utilized in all estimations of value. The methodologies employed depend on the type of property, the intended use of the appraisal, the scope of work and the quality and quantity of data available for analysis. The alternative value indications derived can either support or refute another. Cost Approach: The Cost Approach is based on the understanding that market participants relate value to cost. In the Cost Approach, the value of a property is derived by adding the estimated value of the land if vacant, to the current cost of constructing a reproduction of the improvements and then deducting the amount of depreciation from all causes. This method is useful in the valuation of new or recently constructed properties and real estate that is not frequently exchanged in the market. Direct Comparison Approach: This methodology is most useful when a number of similar properties have recently been sold or listed in within the subject neighbourhood. The sale prices of the properties that are judged to be the most relevant tend to indicate a range in which the value of the subject property would fall. The degree of similarity or differences between the subject property and the sales using dollar or percentage adjustments are applied. Various elements of


comparison are as follows: real property rights conveyed, financing terms, conditions of sale, expenditures made immediately after purchase, market conditions, location, physical characteristics, economic factors, property use/zoning and non-realty components of value. Income Approach: In the Income Approach, the present value of the future benefits of property ownership is estimated. A property’s income and re-sale value upon reversion is capitalized into a current lump-sum value. In direct capitalization the relationship between one year’s income and value is reflected in either a capitalization rate or income multiplier. The gross income expectancy of a property is estimated and allowances are deducted for vacancy, collection loss and anticipated operating expenses including management. The resulting net income is capitalized by utilizing a rate from an acceptable rate of return for similar properties. Final Estimate of Value: The above outlined appraisal techniques result in three estimates of value which is seldom identical. Each methodology, through a process of correlation and reconciliation is weighted based on the accuracy, importance and relevancy of the market data available. The conclusion is referred to as the Final Estimate of Value.

Approaches Utilized:

The Cost Approach: A formal Cost Approach was not developed primarily because a value derived by this methodology is seldom synonymous with Market Value. It is often difficult to find current relevant land sales in developed neighbourhoods or smaller communities and there are inherent problems in the estimation of accrued depreciation for older improvements.


In addition, most investors and lenders do not rely on this method of valuation when assessing the real estate for acquisition or long-term financing.

Direct Comparison Approach (Refer to Schedule “A”): In the course of our market overview we examined ten sales of small to mid-sized office buildings with prices ranging from $4,254,000 to $17,504,000. On a price per square foot of building size comparison the price range was calculated to be $127.94 to $408.65 and the salient details of each transaction are summarized on the attached Schedule “A”. It should be noted that half of the transactions were part of portfolio sales involving several properties and it could not always be readily determined how individual sale prices and capitalization rates were assigned. Generally there is an inverse relationship between the sale price of an office building and its size with smaller properties tending to trade at a higher price per unit of comparison. Other important factors to consider include the age, condition, building coverage, utility, market conditions, tenant mix, leasing and the location of the real estate. National or chain anchor tenants occupying a high percentage of the overall NRA and paying rents below typical office rates can also impact on the price paid per square foot of building. Office buildings are investment properties and there is a very strong correlation between the sale price and potential net income. Developments with a significant percentage leased to national and chain tenants at market rents attract the lowest capitalization rates which often translate into a higher price per square foot of building size. The quality, quantity and durability of an office building’s income stream are paramount to its potential sale price. The subject is an older office building with retail uses on the first and second floors. The majority of office uses in the building are medical related and vacancy at 6.8% is not considered to be excessive at this time. The improvements were found to be in very good condition and well maintained. Lease rates are mostly fully net except for the finished basement space and all tenants paying rent on a net basis appear to pay costs associated with the management of the property. Contract rents for


both the retail and office space are considered to be within a reasonable market range. The property has exposure on one of Toronto’s busiest traffic arteries and has direct access to subway transit. The lack of on-site parking is not unusual in the inner city and in our opinion, does not detract from the property’s market appeal for either re-sale or lease. Sale No.8 at the upper end of the price indicator range involved a similar sized office building in close proximity to subway transit. It was part of a five property portfolio sale and four of the properties had Yonge Street exposure and included apartment space. It appears that an overall capitalization or going-in yield rate of 4.8% was applied to the income stream to arrive at the allocated sale price which indicates an overall average rental rate of $19.61 per square foot net. Given the uncertainties surrounding the sale and residential uses in the portfolio it has been discounted in our analysis. Sale No.2 at the low end of the indicator range involved a slightly smaller, converted, loft industrial building that was 50% vacant at the time of sale. Given its age, vacancy and inferior location significant upward adjustments were applied. Sale No.3 also at the lower end of the price indicator range was an older office building on College Street in close proximity to subway transit. Although smaller than the subject the property was completely vacant at the time of sale requiring upward adjustments. Sale No.10 involved a similar sized office building with ground floor retail uses. The improvements are older and the location without direct subway access is considered to be inferior. Upward adjustments were considered to be appropriate. Sale No.6 is a newer office building constructed in 1984 and is located within the financial core and enjoys close proximity to subway transit. Although part of a portfolio sale involving 29 commercial properties located across Canada it was slightly smaller than the subject and was fully leased at the time of sale. Downward adjustments were deemed necessary. Sale No.1 was a newer and smaller office building with no exposure on a main traffic artery and no direct subway access. Its average rent was considered to be below average and suffered from 62% vacancy at the time of sale. Consequently upward adjustments were applied.


Sale Nos.4, 5 and 7 were older and larger office buildings located in the core of Toronto’s financial district. All of the transactions were part of a portfolio sale involving 29 properties located across Canada and we were unable to determine how individual sale prices and capitalization rates were allocated. Only Sale No.7 had unusual vacancies. Sale prices ranged from $266.47 to $299.31 per square foot and Sale No. 5 at the lower end of the above range appeared to be in superior condition and had no vacancy. Difference in age, size and location suggest that minimal adjustments were required. Sale No.9 is an older office building that was substantially renovated in 1991. Although similar in size the property is located outside of the downtown business-retail core. The property has high vacancy however, the building is anchored by the Bank of Montreal and the average rental rate is above average for Class “B” office space. Minimal adjustments were deemed to be necessary. After considering all relevant factors we have estimated the current Market Value of the subject property as follows:

$270.00 per square foot X 39,656 square feet =

$10,707,120 or $10,700,000 rounded. The Market Value of the property indicated by the Direct Comparison Approach is therefore estimated at:

$10,700,000.00 The Income Approach:

Market Rents (Refer to Schedule “B”): The Income Approach includes an analysis of contract rents as well as an estimate of economic rent for vacant space. Adjustments may be made if landlord inducements such as leasehold improvements or extended rent-free periods were granted that would unduly inflate contract rents. We have examined office rental rates negotiated through the Toronto MLS as well as information retained in our files. It should be noted that rental rates indicated on MLS do not comprise the entire market as many Developers and landlords negotiate directly with prospective tenants (especially chain and national businesses) without utilizing this service.


Our investigation revealed fully net going-in office rental rates in the City of Toronto ranging from $12.00 per square foot to $21.96 per square foot net. According to CB Richard Ellis the average rent for Class “B” office space in Mid-town Toronto is $16.95 per square foot net. Ground level retail rents ranged from $18.00 to $38.00 per square foot net. Restaurant users especially with outdoor patio facilities and retailers in locations with a high pedestrian traffic flow and in close proximity to subway transit typically pay rents in excess of the general retail market. Labs and pharmacies located in medical buildings usually pay rents based on potential internal referrals which can be somewhat distorted when expressed as a rental rate per square foot. Contract Rent (Refer to Schedule “C” & “E”):

A summary of the contract rents in the subject office building is recorded on the enclosed Schedule “C”. Most of the leases are on a fully net basis with the tenants responsible for realty taxes and all operating expenses. It would appear that all tenants except for the basement users contribute to the costs associated with the property’s management expenses. The leases for the most part, feature renewal options however, we could not determine from the extension agreements reviewed that additional renewal options were available. Most rental rates were fixed for the lease or extension terms and a significant number of tenants have been operating out of the premises for five or more years. The restaurant tenant sub-lets their second floor space to a tavern operator and the leasing details are not known. Operating statements for the past two years were provided (refer to Schedule “E”) and the expense ratios at an average of 59% appear to be unusually high relative to the effective gross revenue. This may be because of non recoverable expenditures during the period and the land lease with the City of Toronto for ROW’s over the lands to the rear of the property. We have estimated an overall, stabilized TMI expense for the property including management based on $19.00 per square foot. Economic rent has been estimated for the vacant space.


We have concluded that the contract rents as reported by the Property Manager and supported by executed leases and extension agreements are within an acceptable market range and they have been utilized in the development of the Income Approach without adjustments. Vacancy and Credit Loss:

The Ontario economy continues to perform reasonably well as evidenced by new construction activity in most real estate sectors throughout the GTA. The subject is an older office building in very good condition and well located in Toronto’s Mid-Town in close proximity to subway transit. According to CB Richard Ellis the overall vacancy rate for Class “B” office space in this local is 7.3%. They expect a downward trend in the vacancy rate as there are no new projects coming on stream in the near future. Actual vacancy in the subject is 6.8% as three tenants moved out early this year. In our opinion, a prudent and informed investor and/or mortgage lender would allocate a long term allowance for vacancy and bad debt of not less than 5.0% for the subject property.

Capitalization Rates (Refer to Schedule “D”):

While six of the sales utilized in the Direct Comparison Approach had sufficient leasing information to calculate going-in-yield or capitalization rates for office properties five of the transactions involved portfolio sales and some of the properties were not located in the City of Toronto or had residential uses. Accordingly we conducted a survey of other office building sales within the City to obtain additional market data which included sales other than portfolio acquisitions. The results of our market investigation are summarized on the attached Schedule “D” indicating rates ranging from 5.0% to 8.4%. It should be noted that reported capitalization rates are often interchanged with going-in yield rates and the latter does not always include allowances for vacancy, bad debt, management and structural reserves. Accordingly some of the capitalization rates as reported in our survey may be over-stated.


The subject property is an older, high-rise office building that is in good condition and well located with direct access to subway transit. The improvements are in good condition considering their chronological age and no major items of deferred maintenance were evident. There continues to be a downward pressure on capitalization rates especially for quality commercial properties fueled by investor demand and relatively low borrowing costs. After considering all of the above relevant factors we have estimated an appropriate capitalization rate for the subject at 6.25%. Potential Gross Income (Refer to Schedule “C”): Revenue: $ 768,385 Recoveries ( 34,856 SF x $19.00/SF): $ 662,264

Total Potential Gross Income: $1,430,649 Vacancy and Bad Debt (5.0%): $ 71,532 Effective Gross Income: $1,359,117 Operating Expenses & Reserves TMI Recoverable Expenses: $ 662,264 Non-recoverable Expenses: $ 57,000


Management (0.0%): $ 0

Structural (1.0%): $ 13,591 Total (53.9%): $ 732,855 Net Operating Income: $ 626,262 The Direct Capitalization Method employs an overall rate derived from market sales and the formula for converting income to value is as follows: V=I/R Where V = value, I = net income and R = the overall capitalization rate. The income value of the subject property is therefore calculated to be:

$626,262/.0625 = $10,020,185 or $10,000,000 rounded. The Market Value of the subject property indicated by the Income Approach is estimated at:

$10,000,000.00 Exposure Period: On the basis of market activity generally it is our opinion, that an exposure period of two to six months would be necessary to facilitate the sale of the subject property in the open market if competitively priced. It is important to note however, that the duration of the marketing period is highly sensitive to the listing price. Correlation and Final Estimate of Value: The two methods utilized in this report produced the following estimated values: Direct Comparison Approach: $10,700,000.00

Income Approach: $10,000,000.00


The Direct Comparison Approach utilized ten sales of small to mid-sized office buildings located in City of Toronto. Five of the transactions were part of portfolio acquisitions and it could not be readily determined how individual sale prices and capitalization or going-in yield rates had been allocated. Adjustments were applied to reflect differences in size, age, condition, tenant mix and location. The Income Approach employed contract rent which was deemed to be within an acceptable range and our estimate of market rent for the vacant space. Allowances were deducted for vacancy, bad debt, estimated TMI expenses, non-recoverable expenses and structural reserves. In our opinion, administration fees paid by the tenants offset typical management costs associated with the operation of the property. A reserve based on 1.0% of the EGI was allocated for structural repairs. The overall expense estimate represents 53.9% of the property’s potential effective gross income. The capitalization rate was derived from market sales and adjusted to reflect the subject’s age, condition, location, utility, tenant mix and leasing. Both methods were developed using market elements based on relatively current data and produced slightly different values. As the subject is considered to be an investment property full weight was accorded to the Income Approach to arrive at the final value estimate. It is therefore our opinion, that the estimated Market Value of the property as of May 24, 2012 is:



CERTIFICATION AND FINAL ESTIMATE OF VALUE

The undersigned hereby certify on the 24th day of May, 2012 that:

• A personal inspection of the real property identified as 208 Bloor Street West, Toronto Ontario was performed by Karl Young on May 24, 2012. Karl Young has the knowledge and experience to complete the assignment competently. Wayne Crawford, AACI, P. App did not inspect the property nor review the leases and extension agreements and has acted solely in a review capacity for the preparation of this report;

• All relevant factors affecting the value of were considered;

• The appraiser has no past, present or contemplated interest

in the property appraised, no personal interest with respect to the parties involved and has no bias with respect to the subject property or to the parties involved with this assignment;

• To the best of the appraiser’s knowledge, the information

reported is true and factual and has been verified where possible;

• The report has been made in conformance with the Code of

Ethics and the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) adopted by the Appraisal Institute of Canada;

• The report is subject only to the Assumptions and Limiting

Conditions listed in the report, and the report identifies all of the limiting conditions (whether imposed by the terms of the assignment or by the appraiser), represent our personal impartial and unbiased professional analyses, opinions and conclusions, and no one provided significant professional assistance to the person or persons signing this report unless otherwise stated;

• Neither the employment to make the appraisal nor the

compensation is contingent upon developing or reporting predetermined results, the amount of the value estimate or a conclusion favouring the client;


• After carefully weighing and analyzing all available data, it is our considered opinion, that the estimated Market Value, that is the present worth of all future rights and benefits, which would accrue to typical users or persons through long term ownership of the within described Real Property, subject to the leased fee estate, any outstanding realty taxes, special assessments, liens, claims or work orders as of the 24th day of May, 2012 is:


---------------------------------------------- Karl Young, ICI Real Estate Analyst

--------------------------------------------- Wayne Crawford, AACI, P. App

I certify I have reviewed this report and concur in the value estimated herein. The Appraisal Institute of Canada has a Continuing Professional Development program for designated members. As of the date of this report Wayne Crawford, AACI, P. App has fulfilled the requirements of the program.


ASSUMPTIONS AND LIMITING CONDITIONS

1. This report is prepared at the request of 208 Bloor Street West Inc. c/o Esbin Property Management Inc. to assist in estimating the current Market Value of the property for internal accounting purposes. It is not reasonable for any person other than the client to rely upon this appraisal without first obtaining written authorization from Appraisal Group Inc. There may be qualifications, assumptions or limiting conditions in addition to those set out below relevant to that person's identity or his intended use. The report is prepared on the assumption that no other person will rely on it for any other purpose and that all liability to all such persons is denied. 2. While expert in appraisal matters, the author is not qualified and does not purport to give legal advice. It is assumed that:

(a) the legal description as furnished is correct;

(b) title to the property is good and marketable;

(c) there are no encroachments, encumbrances, restrictions, leases or covenants that would in any way affect the valuation, except as expressly noted herein;

(d) the existing use is a legally conforming use which may

be continued by any purchaser from the existing owner;

(e) rights-of-way, easements or encroachments over

other real property and leases or other covenants noted herein are legally enforceable.

Being these assumptions have been made, no investigation, legal or otherwise, has been undertaken which would verify these assumptions except as expressly noted herein. 3. The author is not a qualified surveyor (and no legal survey concerning the subject property has been provided). Sketches, drawings, diagrams schedules, photographs, etc. are presented in this report for the limited purpose of illustration and are not to be relied upon in them.


4. The author is not qualified to give engineering advice. It is assumed that there are no patent or latent defects in the subject improvements that no objectionable materials such as Urea Formaldehyde foam are present, that they are structurally sound and in need of no immediate repairs, unless expressly noted within this report. No soil tests have been done, nor have tests been done of the heating, plumbing, electrical, air-conditioning or other systems and, for the purpose of this opinion, they are assumed to be in good working order. 5. No investigation has been undertaken with the local zoning office, the fire department, the building inspector, the health department or any other government regulatory agency unless such investigations are expressly represented to have been made in this report. The subject property must comply with such government regulations and, if it does not comply, its non-compliance may affect market value. To be certain of compliance, further investigation may be necessary. 6. Neither possession of this report nor a copy of it carries with it the right of publication. Normally, the authors retain copyright and seek to restrict the circulation and unauthorized use of the report by parties not holding a registered interest in the property(ies). The appraisers do not accept responsibility for damages resulting from the inappropriate use of the appraisal by parties not holding a registered interest in the subject property(ies). 7. Market data has been obtained, in part, from documents at the land registry office, or as reported by the real estate board. As well as using such documented and generally reliable evidence of market transactions, it was also necessary to rely on hearsay evidence. Except as noted herein, a reasonable attempt has been made to verify all such information. 8. Because market conditions, including economic, social and political factors change rapidly and, on occasion, without warning, the market value expressed as of the date of this appraisal cannot be relied upon to estimate the market value as of any other date except with further advice of the appraiser.


9. The compensation for services rendered in this report does not include a fee for court preparation or court appearance, which must be negotiated separately. However, neither this nor any other of these limiting conditions is an attempt to limit the use that might be made of this report, should it properly become evidence in a judicial proceeding. In such a case, it is acknowledged that it is the judicial body which will decide the use of the report which best serves the administration of justice. 10. Should perilous, toxic or other potentially hazardous materials exist in the buildings, the soils of the subject property or abutting lands, such could cause a loss in value. The appraiser is not qualified to detect, test for, investigate or otherwise ascertain the existence of such substances, and assumes no responsibility relative to the possible presence of such. Further, it is beyond the scope of the appraisal to address the matter of any costs that might be associated with the detection, removal, correction or treatment in the event such substances exist on the subject or adjacent lands. No steps have been taken to retain experts or other qualified persons to ascertain the possible existence of such materials, as such engineering fact finding is not part of the appraiser's mandate, and no funds have been provided for such an undertaking. It is respectfully suggested that the client retain appropriate experts or qualified persons to address such matters. 11. The only party who may rely on the opinion expressed in this report is the client, even where the report is for financing purposes. Where the client is a lender, its borrower and the loan insurer may also rely on this report. This report assumes that only the addressee will reply upon it, and only for the intended use stated herein. No one else may rely on this report without the written consent of the appraiser, which we may not provide retroactively. We expressly deny any legal liability for unauthorized reliance and for any other use. 12. Recent legislative changes may impact on the amount of realty taxes payable and any adjustments to the value consequent on changes in realty tax have not been reflected in this report. 13. When preparing an appraisal for lending purposes, appraisers do not investigate if the prospective loan and applicant satisfy prudent loan underwriting criteria. Correspondingly, we assume no responsibility for loans made where the borrower lacks the ability or


motivation to repay the loan, or where the lender has not followed prudent lending practices. When we authorize a lender to rely on this report, we grant such authorization subject to the lender completing a thorough due diligence investigation that reasonably concludes that the borrower has the intention and capacity to repay the loan. 14. It is assumed that any income and expense documentation provided to us pertaining to the property is accurate and factually correct. We reserve the right to amend our estimate of market value if information provided is found to be inaccurate or if additional information becomes available. 15. This report is only valid if it bears the original or electronic signatures of the author(s).


Part 3 - Addenda

Subject Exterior Photographs

Photo 1

Photo 2

Front & West Elevations

Rear & West Elevations


Photo 3

Photo 4

Lower Front Elevation

Lower Rear Elevation


Photo 5

Photo 6

Roof Finish & HVAC Units

Roof Finish

Subject Interior Photographs

Photo 1

Photo 2

Basement Mechanical Room

Power Supply


Photo 3

Photo 4

Basement Finish

Basement Finish (Hot Yoga Classroom)


Photo 5

Photo 6

Basement Washroom Finish

Main Floor Lobby


Photo 7

Photo 8

Typical Hallway Finish

Vacant Office Finish


Photo 9

Photo 10

Typical Stairwell Finish

Typical Office Finish

Area Photographs

Photo 1

Photo 2

Properties Opposite The Subject

Properties To The Rear Of Subject

Area Photographs

Photo 3

Photo 4

Properties To The Immediate East

Properties To The Immediate West

Area Photographs

Photo 5

Photo 6

Looking East Along Bloor Street West

Looking West Along Bloor Street West

Schedule "A" - Relevant Office Building Sales

No. Property Address Registered Sale Building Lot Lot Lot Density Number Year Number Sale Price Average TMI Months Cap Comments

Municipality Date of Price Area Area Area Frontage of Built of Parking Per Rent Per Per on Rate

(General Location) Sale (Sq. Ft.) (Sq. Ft.) (Acres) (Ft.) Stories Spaces Sq. Ft. Sq. Ft. Sq. Ft. Market

1 30 Soudan Avenue Mar-10 $7,000,000 29,265 7,841 0.18 65.0 373.2% 6 1982 27 $239.19 $11.00 $17.00 2 N/K Modern office building with some underground parking

Toronto, Ontario and ground floor retail space. 62% vacant at time of sale

(Yonge & Eglinton) Purchased for part owner occupancy

2 720 Bathurst Street May-10 $4,254,000 33,250 9,148 0.21 70.0 363.5% 5 1900 0 $127.94 N/K N/K N/K N/K Loft industrial building converted to office uses in 1986

Toronto, Ontario 50% vacant at time of sale

(South of Bloor) Purchased for part owner occupancy

3 14 College Street Jul-11 $5,689,300 25,000 4,356 0.10 42.7 573.9% 6 1910 0 $227.57 N/K N/K N/K N/K Older office building

Toronto, Ontario Completely vacant at time of sale

(West of Yonge)

4 350 Bay Street Aug-11 $15,798,000 52,782 5,227 0.12 48.6 1009.8% 13 1928 0 $299.31 N/K N/K N/K 7.0% Older office building renovated in 1986

Toronto, Ontario 8% vacancy at time of sale

(North of Adelaide) Part of a portfolio sale involving 29 properties located

across Canada

5 360 Bay Street Aug-11 $15,172,000 56,937 6,098 0.14 68.9 933.6% 10 1955 0 $266.47 N/K N/K N/K 7.0% Older office building leased to local businesses

Toronto, Ontario No vacancy at time of sale

(North of Adelaide) Part of a portfolio sale involving 29 properties located

across Canada

6 56 Temperance Street Aug-11 $9,871,000 32,145 4,356 0.10 54.7 737.9% 10 1984 0 $307.08 N/K N/K N/K 7.0% Modern office building leased to local businesses

Toronto, Ontario No vacancy at time of sale

(Bay & Richmond) Part of a portfolio sale involving 29 properties located

across Canada

7 353-357 Bay Street Aug-11 $17,504,000 62,932 7,405 0.17 87.5 849.8% 10 1922 0 $278.14 N/K N/K N/K 7.0% Older office building leased to local businesses


(South of Richmond) Part of a portfolio sale involving 29 properties located

across Canada

8 22 College Street Sep-11 $15,937,185 39,000 6,534 0.15 65.5 596.9% 5 1970 0 $408.65 N/K N/K N/K 4.8% Older office building leased to local businesses and

Toronto, Ontario government institutions. Fully occupied

(West of Yonge) Part of a portfolio sale involving 5 properties including

residential uses

9 1670 Bayview Avenue Nov-11 $11,900,000 41,133 20,038 0.46 104.0 205.3% 5 1957 54 $289.31 $18.50 N/K N/K 6.4% Older office building renovated in 1991


(South of Eglinton) Bank of Montreal Branch on main floor

10 483-491 Eglinton Avenue West Feb-12 $7,500,000 38,967 8,276 0.19 83.9 470.8% 5 1953 N/K $192.47 $12.00 N/K N/K N/K Older office building leased to local businesses

Toronto, Ontario 48% vacant at time of sale

(West of Avenue) Purchased for part owner occupancy

Subject

208 Bloor Street West N/A N/A 39,656 5,748 0.13 44.2 689.9% 9 1970's 0 N/A $18.39 N/A N/A N/A Older office building with a fully finished basement

Toronto, Ontario Includes restaurant use. Mainly medical related

(West of Avenue) office users. 6.8% vacancy

Relevant Sales

Sale 1

Sale 2

30 Soudan Avenue, Toronto

720 Bathurst Street, Toronto

Relevant Sales

Sale 3

Sale 4

14 College Street, Toronto

350 Bay Street, Toronto

Relevant Sales

Sale 5

Sale 6

360 Bay Street, Toronto

56 Temperance Street, Toronto

Relevant Sales

Sale 7

Sale 8 22 College Street, Toronto

353-357 Bay Street, Toronto

Relevant Sales

Sale 9

Sale 10

1670 Bayview Avenue, Toronto

483-491 Eglinton Avenue West, Toronto

Schedule "B" - Relevant Commercial Rents

No. Property Address Date Unit Rental Rental Annual Term Rental TMI No. Days Comments

Municipality of Area Rate Rate Rent (Years) Basis Per Parking on

(General Location) Lease (Sq. Ft.) (Sq. Ft.) Per Month Sq. Ft. Spaces Market

Retail

1 600 Bloor Street West May-10 2,000 $18.00 $3,000 $36,000 N/K FN $9.00 1 14 Storefront retail unit

Toronto, Ontario Former coffee shop

(Near Bathurst) Direct subway access

2 254 Adelaide Street West Jan-11 1,620 $20.00 $2,700 $32,400 N/K FN $7.00 0 99 Storefront retail unit

Toronto, Ontario Former restaurant

(Near Duncan)

3 972 College Street Aug-11 4,000 $20.00 $6,667 $80,000 N/K FN N/K 0 139 Storefront retail unit

Toronto, Ontario

(West of Ossington)

4 418 Queen Street West Sep-11 2,600 $23.08 $5,001 $60,008 N/K FN N/K 2 31 Storefront retail unit and second floor office space

Toronto, Ontario

(Near Spadina)

5 284 College Street Oct-11 5,142 $24.00 $10,284 $123,408 N/K FN $7.00 3 162 Storefront retail unit

Toronto, Ontario

(Near Spadina)

6 553 Bloor Street West Mar-12 1,758 $38.00 $5,567 $66,804 N/K FN $17.00 0 30 Storefront retail unit

Toronto, Ontario Former restaurant

(Near Bathurst) Direct subway access

7 588 Bloor Street West May-12 2,065 $19.77 $3,402 $40,825 N/K FN $12.00 1 59 Storefront retail unit

Toronto, Ontario Direct subway access

(Near Bathurst)

Office

1 344 Bloor Street West #309 Mar-11 645 $25.00 $1,344 $16,125 N/K GR $0.00 0 57 Upper level office space in professional building


(Near Spadina)

2 459 Bloor Street West Jun-11 4,500 $24.67 $9,251 $111,015 N/K GR $0.00 5 106 Second floor office space in two-storey commercial

Toronto, Ontario building

(At Major) Direct subway access

3 12 Birch Avenue Jun-11 302 $16.85 $424 $5,089 N/K FN $6.00 0 14 Second floor loft office space in converted building


(Yonge & Summerhill)

4 360 College Street #201 Aug-11 834 $25.00 $1,738 $20,850 N/K GR $0.00 0 38 Second floor office space in infill low-rise commercial


(Near Spadina)

5 99 Atlantic Avenue #402 Aug-11 5,847 $17.75 $8,649 $103,784 N/K FN $11.84 0 119 Upper level office space in converted loft industrial


(King & Dufferin)

6 70 Yorkville Avenue Sep-11 2,700 $21.96 $4,941 $59,292 N/K FN $19.95 0 119 Second floor office space in infill low-rise commercial


(Bay & Bloor)

7 550 Yonge Street #200 Sep-11 950 $20.00 $1,583 $19,000 N/K FN $11.00 1 83 Second floor office space in storefront building

Toronto, Ontario

(Near Wellesley)

8 344 Bloor Street West #604 Sep-11 436 $12.00 $436 $5,232 N/K FN $14.00 0 98 Upper level office space in professional building


(Near Spadina)

9 90 Adelaide Street West Oct-11 4,805 $18.00 $7,208 $86,490 N/K FN $21.00 0 393 Third floor office space in modern high-rise building

Toronto, Ontario

(At Sheppard)

10 287 Macpherson Avenue #202 Dec-11 2,259 $18.95 $3,567 $42,808 N/K FN $11.42 0 27 Upper level office space in converted loft industrial


(Avenue & Davenport)

11 74 Stafford Street Jan-12 1,975 $18.00 $2,963 $35,550 N/K FN $4.40 0 36 Upper level office space in converted loft industrial


(King & Dufferin)

12 1300 Bay Street Apr-12 2,431 $18.50 $3,748 $44,974 N/K FN $13.00 0 72 Second floor office space in infill low-rise commercial


(Near Scollard)

Subject

208 Bloor Street West See Attached Schedule "C" Nine-storey professional office building with ground

Toronto, Ontario floor retail uses

(West of Avenue) No on-site parking

Direct subway access

Schedule "C" - Contract and Economic Rents- May 2012

208 Bloor Street West

Toronto, Ontario

No. Tenant Use Net Rentable Rental Monthly Annual Effective or Economic Annual Commencement Term Lease Rental Renewal Tenant Admin. Comments

of Area Rate Per Rent Rent Net Rent Per Effective of (Yrs.) Expiry Basis Options Since Fee

Premises (Sq. Ft.) Sq. Ft. Sq. Ft. Net Rent Lease (Years)

B01 Konop Chemists Limited Lab 792.00 $24.00 $1,584 $19,008 $24.00 $19,008 Jan-09 5.0 Dec-13 GR 2X5 1992 No Tenant operates pharmacy on first floor

Basement Bikram Yoga Toronto Inc. Gym 4,008.00 $27.00 $9,018 $108,216 $27.00 $108,216 Dec-08 5.0 Nov-13 SG N/K 2008 No Rental rate in effect in December 2012

Tenant pays increases in taxes and operating

expenses over base year 2008

101 Over Easy Restaurants Inc. Sit-down 2,748.00 $35.00 $8,015 $96,180 $35.00 $96,180 Sep-09 5.3 Dec-14 FN 2X5 1999 Yes Includes use of front outdoor patio

Restaurant

102 Konop Chemists Limited Pharmacy 750.00 $72.00 $4,500 $54,000 $72.00 $54,000 Jan-09 5.0 Dec-13 FN 2X5 1992 Yes

200 Over Easy Restaurants Inc. Restaurant 1,290.00 $25.00 $2,688 $32,250 $25.00 $32,250 Mar-12 2.9 Dec-14 FN 2X5 2012 Yes Tenant subleases space to Highball Restaurant Inc.

201 Over Easy Restaurants Inc. Restaurant 478.00 $25.00 $996 $11,950 $25.00 $11,950 May-10 4.6 Dec-14 FN 2X5 2010 Yes who operate a tavern-bar. Direct street access from

202 Over Easy Restaurants Inc. Restaurant 531.00 $25.00 $1,106 $13,275 $25.00 $13,275 Nov-00 4.1 Dec-14 FN 2X5 2000 Yes front stairwell

203 Over Easy Restaurants Inc. Restaurant 1,738.00 $25.00 $3,621 $43,450 $25.00 $43,450 Jun-00 4.5 Dec-14 FN 2X5 2000 Yes

300 IMAGINEERINGART.COM Art Studio & 4,080.00 $10.00 $3,400 $40,800 $10.00 $40,800 May-11 2.0 Apr-13 FN N/K 2011 Yes

Offices

401-403 Dr. Daniel Schachter Medical Office 2,047.00 $15.00 $2,559 $30,705 $15.00 $30,705 Jan-08 5.0 Dec-14 FN N/K 1994 Yes

404 Dr. Daniel Schachter Medical Office 659.00 $15.00 $824 $9,885 $15.00 $9,885 Jan-08 5.0 Dec-14 FN N/K 2008 Yes

405 Dr. Joseph Spano Greco Medical Office 1,064.00 $15.00 $1,330 $15,960 $15.00 $15,960 Oct-11 5.0 Sep-16 FN N/K N/K Yes

501 Marcella, Mesensky, M.D. Medical Office 663.00 $14.50 $801 $9,614 $14.50 $9,614 Nov-08 5.0 Oct-13 FN N/K 1988 Yes

502 Nicoleta Monalisa Hakki Clinic 572.00 $15.00 $715 $8,580 $15.00 $8,580 Jan-12 5.0 Dec-16 FN N/K 2007 Yes

503 Tenant moved Vacant 909.00 $0.00 $0 $0 $13.00 $11,817 N/A N/A N/A N/A N/A N/A N/A Vacant since January 2012

Estimated going-in market rent

504 Dr. E. Lorber Medical Office 694.00 $14.00 $810 $9,716 $14.00 $9,716 Aug-08 5.0 Sep-13 FN N/K 1981 Yes

505 Agatha Rondzik, o/a Intern Medical Office 694.00 $12.00 $694 $8,328 $12.00 $8,328 Sep-10 5.0 Aug-15 FN N/K 2007 Yes

506 Dr. W. M. Davies Medical Office 536.00 $15.00 $670 $8,040 $15.00 $8,040 Jan-11 5.0 Dec-15 FN N/K 2006 Yes

601 Tenant moved Vacant 1,202.00 $0.00 $0 $0 $12.00 $14,424 N/A N/A N/A N/A N/A N/A N/A Vacant since April 2012

Estimated going-in rental rate

602 Dr. Anthony Hui Medical Office 772.00 $14.00 $901 $10,808 $14.00 $10,808 Sep-10 5.0 Aug-15 FN N/K 2005 Yes Rent roll indicate unit size at 917 sq.ft.

603 Dr. Kathleen M. O'Hara and Medical Office 1,101.00 $13.00 $1,193 $14,313 $13.00 $14,313 Nov-10 6.1 Dec-16 FN N/K 1989 Yes Rent roll indicates uniut size at 1,39 sq.ft.

Dr. Lynette Nissen Rent increases to $14.00/sq.ft. in January 2013 and

$15.00/sq.ft. in January 2015

604 Evelyn Christoff Office 704.00 $16.00 $939 $11,264 $16.00 $11,264 Dec-09 3.0 Nov-12 FN N/K 2009 Yes

700 Joseph J. Smolders Office 1,277.00 $11.00 $1,171 $14,047 $11.00 $14,047 Dec-10 5.0 Nov-15 FN N/A 1990 Yes

701 Dr. Carlos Contreras Medical Office 599.00 $16.00 $799 $9,584 $16.00 $9,584 Feb-09 5.0 Jan-14 FN N/K 2003 Yes Rent roll indicates uniut size at 566 sq.ft.

702 730369 Ontario Ltd. (New Tenant) Clinic 591.00 $16.00 $788 $9,456 $16.00 $9,456 Aug-12 4.6 Mar-17 FN N/K 2012 Yes

(Compusound)

706 Junzo Kokubo Office 542.00 $11.00 $497 $5,962 $11.00 $5,962 Jan-11 5.0 Dec-15 FN N/K 1990 Yes

711 Diagnostic Services Network Inc. Clinic 853.00 $16.00 $1,137 $13,648 $16.00 $13,648 Apr-12 5.0 Mar-17 FN N/K 2007 Yes

801-802 Lifelabs Inc. Lab 1,203.00 $25.00 $2,506 $30,075 $25.00 $30,075 Oct-08 4.0 Oct-12 FN 1X5 1972 Yes

803 Dr. Evangelina Papadouris Medical Offices 862.00 $15.00 $1,078 $12,930 $15.00 $12,930 Jul-08 5.0 Jun-13 FN N/K 1988 Yes

804 Dr. Nadine Hradsky Medical Offices 697.00 $14.50 $842 $10,107 $14.50 $10,107 Nov-09 3.0 Oct-12 FN N/K 2009 Yes

805 Vacant Office 594.00 $0.00 $0 $0 $15.00 $8,910 N/A N/A N/A N/A N/A N/A N/A Vacant since February 2012

Esimated going-in rent

806 Bangladesh Binman Corporation Office 515.00 $15.00 $644 $7,725 $15.00 $7,725 Aug-09 5.0 Jul-14 FN N/K 1999 Yes Rent increases to $16.00/sq.ft. in August 2013

900 Dr. Robert Fielden Medical Offices 215.00 $21.00 $376 $4,515 $21.00 $4,515 Mar-11 1.0 Feb-13 FN N/K 2000 Yes

901 Dr. Michael Manicatide Medical Offices 661.00 $16.00 $881 $10,576 $16.00 $10,576 Apr-09 3.0 Mar-12 FN N/K 2000 Yes Renewal under negotiation

902-903 Dr. George Nuta Medical Offices 1,232.00 $16.50 $1,694 $20,328 $16.50 $20,328 Oct-06 10.0 Sep-16 FN N/K 1996 Yes Rental rate in effect in September 2012

Rent increases to $17.00/sq.ft. in October 2014

904 206 Bloor Street West Inc. Office 689.00 $16.00 $919 $11,024 $16.00 $11,024 Feb-12 1.0 Jan-13 FN N/K 2012 Yes Temporary construction office for next door neighbour

905 Dr. Stephen Sibalis Medical Offices 588.00 $15.00 $735 $8,820 $15.00 $8,820 Feb-12 5.0 Jan-17 FN N/K 1997 Yes Rent increasesto $16.00/sq.ft. in February 2013 and

$17.00/sq.ft. in February 2015

906 Anna Savvanis Esthetics Inc. Salon 506.00 $16.00 $675 $8,096 $16.00 $8,096 Mar-08 5.0 Feb-13 FN N/K 2008 Yes

Totals 39,656.00 $61,103 $733,234 $768,385

Schedule "D" - Office Building Capitalization Rates

No. Property Address Registered Sale Building Lot Lot Lot Density Number Year Number Sale Price TMI Months Cap Comments

Municipality Date of Price Area Area Area Frontage of Built of Parking Per Per on Rate

(General Location) Sale (Sq. Ft.) (Sq. Ft.) (Acres) (Ft.) Stories Spaces Sq. Ft. Sq. Ft. Market

1 156 Fropnt Street West Jan-10 $23,000,000 107,152 32,670 0.75 125.1 328.0% 6 N/K N/K $214.65 N/K N/A 6.3% Loft industrial building converted to ground floor retail

Toronto, Ontario and upper level offices

(West of University) May have been purchased as part of an assembly

2 40 Holly Street Apr-10 $14,000,000 70,351 20,473 0.47 187.5 343.6% 9 1988 61 $199.00 $17.02 N/K 7.0% Modern office building leased to local businesses

Toronto, Ontario Underground parking

(Yonge & Eglinton) Part of a portfolio sale involving three properties

3 212 King Street West Jun-10 $22,000,000 76,314 17,424 0.40 92.1 438.0% 6 1914 5 $288.28 $16.70 N/A 6.8% Loft industrial building converted to ground floor retail

Toronto, Ontario and upper level offices

(West of University) 22% of leases expired within one year of purchase

4 5075 Yonge Street Jun-10 $20,000,000 85,586 23,958 0.55 131.1 357.2% 10 1979 240 $233.68 $17.43 Tender 6.9% Modern office building with main floor Scotiabank Branch

Toronto (North York), Ontario Underground parking

(North of Sheppard) 98.6% occupied at time of sale however, 22% potential

rollover within one year of purchase

5 1255 Bay Street Aug-10 $16,800,000 63,756 10,019 0.23 106.9 636.4% 9 1972 44 $263.50 N/K N/K 6.1% Main floor retail and upper level offices

Toronto, Ontario Subject to a 99 year ground leases

(At Yorkville) Part of a portfolio sale involving 29 properties

6 252 Adelaide Street East Sep-10 $12,647,181 50,217 21,780 0.50 200.5 230.6% 4 1827 0 $251.85 $9.18 2 7.3% Heritage building converted to office uses

Toronto, Ontario 17% of leases expired within one year of purchase

(East of Jarvis)

7 10 Milner Business Court Nov-10 $7,000,000 128,000 66,211 1.52 219.4 193.3% 9 1981 80 $54.69 $11.70 N/A 6.4% Modern office building partly leased to YMCA

Toronto (Scarborough), Ontario 40.0% vacancy at time of sale

(Markham & Highway 401) Part of a portfolio sale

8 2 Temperance Street Dec-11 $7,000,000 17,500 6,534 0.15 151.3 267.8% 4 1895 0 $400.00 N/K N/K 5.0% Heritage building converted to retail and office uses

Toronto, Ontario

(At Yonge)

9 1333 Neilson Road Apr-11 $16,750,000 37,900 73,181 1.68 150.4 51.8% 2 1988 Surface $441.95 N/K 1 7.6% Modern low-rise office building leased mainly to

Toronto (Scarborough), Ontario medical practitioners

(South of Finch)

10 2150 Islington Avenue May-11 $17,500,000 123,294 145,490 3.34 478.2 84.7% 5 1991 371 $141.94 N/K N/K 8.4% Modern office building leased to local businesses

Toronto (Etobicoke), Ontario 12.0% vacancy at time of sale

(South of Highway 401) Sold under Power of Sale

1 1670 Bayview Avenue Nov-11 $11,900,000 41,133 20,038 0.46 104.0 205.3% 5 1957 52 $289.31 N/K N/K 6.4% Older office building renovated in 1991

Toronto, Ontario Fully leased to local businesses including retail

(South of Eglinton) space on main floor

12 65 International Boulevard Mar-12 $3,250,000 24,404 43,560 1.00 122.7 56.0% 2 1986 75 $133.17 N/K 4 6.6% Modern office building leased to local businesses

Toronto (Etobicoke), Ontario

(Dixon & Carlingview)

13 2450 Victoria Park Avenue Mar-12 $13,000,000 92,790 208,652 4.79 442.8 44.5% 7 1970 300 $140.10 N/K N/K 6.6% Older office building leased to local businesses

Toronto (North York), Ontario 25% vacancy at time of sale

(North of Highway 401) Sale lease-back

Schedule "E" - Operating Statement Analysis


Toronto, Ontario

Annual Revenue Dec. 2010 Per Sq. Ft. Percentage Dec. 2011 Per Sq. Ft. Percentage

Rental Income $874,033 $22.04 56.5% $854,871 $21.56 51.9%

Recovery of Operating Expenses $672,486 $16.96 43.5% $793,749 $20.02 48.1%

Other $0 $0.00 0.0% $0 $0.00 0.0%

Total Revenue $1,546,519 $39.00 100.0% $1,648,620 $41.57 100.0%

Less Vacancy and Bad Debt $0 $0.00 0.0% $0 $0.00 0.0%

Effective Gross Income (EGI) $1,546,519 $39.00 100.0% $1,648,620 $41.57 100.0%

Expenses

Realty Taxes $287,980 $7.26 18.6% $255,925 $6.45 15.5%

Insurance $11,001 $0.28 0.7% $11,790 $0.30 0.7%

Utilities $185,812 $4.69 12.0% $187,139 $4.72 11.4%

Water Above Above Above Above Above Above

Heating Above Above Above Above Above Above

Non-Recoverable Expenses $50,254 $1.27 3.2% $64,147 $1.62 3.9%

Snow Removal and Landscaping $2,112 $0.05 0.1% $2,872 $0.07 0.2%

Maintenance and Repairs $228,815 $5.77 14.8% $275,986 $6.96 16.7%

Wages and Benefits $21,372 $0.54 1.4% $21,840 $0.55 1.3%

Professional Fees $10,761 $0.27 0.7% $3,950 $0.10 0.2%

Office and General $10,302 $0.26 0.7% $10,408 $0.26 0.6%

Management $77,882 $1.96 5.0% $82,000 $2.07 5.0%

Structural Repairs $0 $0.00 0.0% $0 $0.00 0.0%

Leasing Costs $41,701 $1.05 2.7% $24,702 $0.62 1.5%

Legal Fees $9,962 $0.25 0.6% $200 $0.01 0.0%

Total Expenses $937,954 $23.65 60.6% $940,959 $23.73 57.1%

Net Operating Income $608,565 $15.35 39.4% $707,661 $17.84 42.9%

GREATER TORONTO AREA MAP


Toronto, Ontario

NEIGHBOURHOOD MAP


Toronto, Ontario

AERIAL VIEW


Toronto, Ontario

OFFICIAL PLAN LAND USE MAP


Toronto, Ontario

ZONING MAP


Toronto, Ontario

MIXED USE AREAS


Toronto, Ontario

PLAN OF SURVEY


Toronto, Ontario

SITE PLAN


Toronto, Ontario

208 bloor street west toronto, ontario · appraisal group inc. 1 agi appraisal group inc. suite...

Documents