appraisal report of - loopnet...200 main street, suite 100 toms river, new jersey 08753 *all r epli...

APPRAISALREPORTOF

“STOHRER’S”604 RICHMOND AVENUE

POINT PLEASANT BEACHBOROUGHOCEANCOUNTY, NEW JERSEY08742

PREPAREDFOR

MR. THIERRY SMITH1ST JERSEY COMMERCIAL26 MAIN STREET, SUITE 1

TOMS RIVER, NJ08753

PREPAREDBY

TONY KAMAND REALTY LLC200 MAIN STREET, SUITE 100

TOMS RIVER, NEW JERSEY 0875371 BROADWAY, LEVEL B, SUITE 108

NEW YORK, NEW YORK 1000673 OLD DUBLIN PIKE, SUITE 10,

DOYLESTOWN, PENNSYLVANIA 18901

TTKKRRTONY KAMAND REALTY LLC

Real Estate Appraisers and ConsultantsPhone 732-286-9250 * Fax 732-286-1900

200 Main Street, Suite 100Toms River, New Jersey 08753

*All replies to Toms River office

71 Broadway, Level B, Suite 108New York, New York 10006

73 Old Dublin Pike, Suite 10,Doylestown, Pennsylvania 18901

WEB SITEWWW.TONYKAMAND.COM

November 9, 2014

Mr. Thierry Smith1st Jersey Commercial26 Main Street, Suite 1Toms River, NJ 08753

RE: “Stohrer’s”604 Richmond AvenuePoint Pleasant Beach BoroughOceanCounty, New Jersey 08742

Dear Mr. Smith:

As per your request, Tony Kamand Realty LLC has completed a restricted appraisal report on the abovereferenced property. The purpose of this appraisal was to estimate the market value of the property as ofNovember 4, 2014. The appraisal was prepared in accordance with standards and guideline requirementsof the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice of the AppraisalFoundation.

This restricted appraisal report is intended to comply with the reporting requirements set forth underStandards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice for a restricted appraisalreport. As such, it presents only limited discussions of the data, reasoning and analyses that were used inthe appraisal process to develop the appraiser’s opinion of value. Some supporting documentationconcerning the data, reasoning, and analyses is retained in the appraiser’s file. The depth of discussioncontained in this report is specific to the needs of the client and for the reports intended use. The appraiseris not responsible for unauthorized use of this report.

The subject of this appraisal is a mixed use, retail / residential building located at 604 Richmond Avenue inPoint Pleasant Beach Borough. The building was built in 1950 and has a gross building area of 6,848square feet. The first floor consists of a 3,582 square foot retail space which is occupied by the propertyowner. The second floor consists of four residential units that contain (2) two-bedroom apartments that are1,000 square feet each and (2) one bedroom apartments that are 750 square feet each. At the time ofinspection, the subject property was 100% occupied.

The total site size is 0.138 acres with 60.00 feet of frontage on Richmond Avenue. The site has a leveltopography and adequate visibility from the roadway.

File #10221 TONY KAMAND REALTY LLC

Mr. Thierry Smith1st Jersey Commercial26 Main Street, Suite 1Toms River, NJ 08753

Page2

Based on our inspection of the subject property, the investigation and analyses undertaken, and subject tothe “Underlying Assumptions and Limiting Conditions” as set forth in this report, it is our opinion that themarket value of the subject property in theLeased feeestateas of November 4, 2014 is:

EIGHT HUNDRED EIGHTY THOUSAND DOLLARS

$880,000

We were not able to inspect the residential units. Our value conclusion is based on the extraordinary assumption that the fourresidential units are in average condition and fully functional for their intended use

The concluded value is cited in cash or equivalent terms and assumes the site to be environmentally soundand in compliance with all state and federal environmental regulations. The estimated marketing period forthe subject property is 8 to 12 months. The exposure time is estimated at 8 to 12 months.

It must be noted that only our client who has contracted us and paid for this report is permitted to use thisreport. This report and the data, analysis and ideas incorporated herein, as an instrument of professionalservices, is the property of Tony Kamand Realty LLCand is not to be used, in whole or in part for any otherpurpose without the written consent of Tony Kamand Realty LLC.

We certify that we have no present or contemplated future interest in the property and that our employmentand compensation are in no way contingent upon the value reported.

Respectfully submitted,

TONY KAMAND REALTYLLC

Tony F. Kamand Jr., MAI Jacelyn C. AllenNJ Certified General Real Estate Appraiser, No. RG-668 NJ Trainee Permit No. 42RP00391500

File #10221 TONY KAMAND REALTY LLC

SUMMARY OFSALIENTFACTS ANDCONCLUSIONS

Name of Property: “Stohrer’s”

Location:604 Richmond Avenue,Point Pleasant Beach Borough, Ocean County, New Jersey08742

Tax Identification: Block 77, Lot 10

Owner of Record: George P. & Susan A. Stohrer

Date of Inspection: November 4, 2014

Date of Valuation: November 4, 2014

Highest & Best Use:As Vacant Mixed use developmentAs Improved Current Use

Rights Appraised: Leased feeestate

Site Description:Size 0.138acresFrontage 60.00 feet of frontage onRichmond AvenueTopography LevelShape RectangularLand/Building Ratio 0.09Building Coverage 59.72Flood Information Map#34029C-0208F, Zone X, dated09-29-2006

Zoning: GC, General Commercial

Building Description:Building Type Mixed Use, Retail / ResidentialSize–GBA / NLA 7,082square feet / 6,498 square feetStories 2Framing Steel frameYear Built 1950Condition AverageDeferred Maintenance None noted

Marketing Period / Exposure Time: 8 to 12 months / 8 to 12 months

Values Concluded -

Sales Comparison Approach: $885,000Income Approach: $875,000

Concluded Market Value: $880,000


10221TONY KAMAND REALTY LLC

TABLE OF CONTENTSLetter of Transmittal .......................................................................................................................................................1

Summary of Salient Facts andConclusions...................................................................................................................3

Table of Contents...........................................................................................................................................................4

Exterior Photographs of Subject Property......................................................................................................................5

Location Map of Subject Property..................................................................................................................................8

Identification of Subject Property ...................................................................................................................................8

Occupancy/History of Property ......................................................................................................................................8

Scope of Work ...............................................................................................................................................................8

Market Value Definition..................................................................................................................................................9

Site Analysis ................................................................................................................................................................10

Zoning Analysis............................................................................................................................................................12

Description of Improvements.......................................................................................................................................12

Real Estate Taxes and Assessments ..........................................................................................................................16

Highest and Best Use..................................................................................................................................................16

Valuation Process........................................................................................................................................................16

Sales Comparison Approach.......................................................................................................................................17

Income Approach.........................................................................................................................................................18

Reconciliation and Final Value Estimate......................................................................................................................24

.Certification.................................................................................................................................................................24

Underlying Assumptions and Limiting Conditions........................................................................................................26

AddendaComparable data, photographs and location mapsAppraisal definitionsQualifications

604 Richmond Avenue, Point Pleasant Beach Borough, New Jersey


Page5

EXTERIORPHOTOGRAPHS OFSUBJECTPROPERTY

Front view of subject facing east

Left sideof subject facingsouth west



Page6

EXTERIORPHOTOGRAPHS OFSUBJECTPROPERTY(CONT.)

Rear view of subject facingwest

Right side of subject facing north east



Page7

EXTERIORPHOTOGRAPHS OFSUBJECTPROPERTY(CONT.)

Richmond Avenue facing north

Richmond Avenue facing south



Page8

LOCATIONMAP OFSUBJECTPROPERTY

IDENTIFICATION OFSUBJECTPROPERTY

The subject property is located at 604 Richmond Avenue, Point Pleasant Beach Borough, Ocean County,New Jersey 08742. It is identified by the Point Pleasant Beach Borough Tax Assessor’s office as Block 77,Lot 10.

OCCUPANCY/HISTORY OFPROPERTY

The owner of record on the property is George P. & Susan A. Stohrer. The property is currently partiallyowner occupied as well as four residential tenants. A summary of the leases is presented in the IncomeApproach of this report.

There have been no recent arm length transfers on the subject property over the past three years. Wehave not performed any services in regards to the subject property within the prior three years, as anappraiser or in any other capacity.

SCOPE OFWORK

The real estate appraisal process typically includes defining the appraisal problem, inspecting the subjectproperty and its surroundings, considering the subject’s highest and best use, conducting a survey ofrelevant market activity, applying the appropriate approaches to value (Cost, Sales Comparison and/orIncome Approach), and reconciling the indicated values into a final value estimate.



Page9

SCOPE OFWORK(CONT.)The scope of the appraisal involved all the necessary research and analysis in order to prepare a restrictedappraisal report. This report has been written to conform to the Uniform Standards of ProfessionalAppraisal Practice (USPAP) as established by the Appraisal Foundation, as well as the standards of theAppraisal Institute. The report that is intended to comply with the reporting requirements set forth underStandards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice for a restricted appraisalreport. A review of the scope for this assignment was as follows:

Property Type: Mixed Use, Retail / Residential DevelopmentPurpose of Appraisal: Estimate Market ValueIntendedUse of Appraisal: Estimate Market Value for buyer/seller negotiationsValue Interest: Leased feeestateIntended Client: 1st Jersey Commercial , Mr. Thierry Smith

Intended User(s): 1st Jersey Commercial, Mr. Thierry Smith, George Stohrer &Andrew Pinner, Mr. Thierry Smith, George Stohrer & Andrew Pinner

Extraordinary Assumptions:

We were not able to inspect the residential units. Our valueconclusion is based on theassumption that the four residentialunits are in average condition and fully functional for theirintended use.

Hypothetical Conditions: NoneValuation Date: November 4, 2014Inspection Date/Photographs Taken On: November 4, 2014 / November 4, 2014Inspected By: Tony F. Kamand Jr., MAI and Jacelyn C. Allen

Extent of Inspection: Exterior and interior of improvements (what was readilyobservable), as well as the surrounding area

Approaches Used for Conclusions: Sales and Income ApproachesExtent of Research: Research of public records, tax records and company files

The scope of this appraisal assignment included the collection, verification, and analysis of general marketdata, property specific data and comparable property data. The data was then assembled and analyzed inorder to reach our value conclusion.

It must be noted that this report and the data, analysis and ideas incorporated herein, as an instrument ofprofessional services, is the property of Tony Kamand Realty LLCand is not to be used, in whole or in partfor any other purpose without the written consent of Tony Kamand Realty LLC.

MARKETVALUEDEFINITION

According to the “The Dictionary of Real Estate”, market value is defined as:

“The most probable price which a property should bring in a competitive and open market under allconditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, andassuming the price is not affected by undue stimulus”. Implicit in this definition is the consummation ofa sale as of a specified date and the passing of title from seller to buyer under conditions whereby: Buyer and seller are typically motivated; Both parties are well informed or well advised, and acting in what they consider their best interests; A reasonable time is allowed for exposure in the openmarket;



Page10

MARKETVALUEDEFINITION(CONT.)

Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparablethereto; and

The price represents the normal consideration for the property sold unaffected by special or creativefinancing or sales concessions granted by anyone associated with the sale.

SITEANALYSIS

Site Size: Acres: 0.138 Square feet: 5,998Frontage: 60.00 feet of frontage on Richmond AvenueDepth: 100.00Visibility: AdequateTopography: LevelDrainage: AdequateUtilities: All publicWetlands: NoCAFRA: YesFlood Plain: No, Map#34029C-0208F, Zone X, dated09-29-2006Land Restrictions: There appears to be no easements or encroachments affecting the site.Land/Building Ratio: 0.09BuildingCoverage: 59.72FAR: 11.42On-Site Parking: AdequateEnvironmental: No noted environmental hazards were observed. The value estimates are

predicated on the assumption that there are no environmental hazards affectingthe site.

TAXMAP OFSUBJECT



Page11

CAFRAMAP

GISENVIRONMENTALMAP



Page12

ZONINGANALYSIS

The subject property is located in the GC, General Commercial zone of Point Pleasant Beach Borough.The improvements do not conform and comply with the present zoning ordinance. The subject has beenbuilt before the current ordinance took affect and has been “grandfathered” in and is therefore allowed toexist.

ZONINGMAP

DESCRIPTION OFIMPROVEMENTS

The subject improvement is a mixed-use retail/residential building that consists of 6,848 square feet. Thefirst floor contains a 3,582 square foot retail store and the second floor contains four residential units, (2)two bedroom and (2) one bedroom apartments. The improvements were originally built in 1950 and werenoted to be in average condition at the time of inspection. A further description of the property is as follows:

Gross Building Area: 6,848square feetNet Rentable Area: 6,498square feetNumber of Buildings: 1Number of Stories: 2Year Built: 1950Chronological Age: 64yearsCondition: AverageEffective Age: 25yearsTotal Economic Life: 50yearsRemaining Economic Life: 25years assuming normal maintenanceFoundation: Concrete BlockRoof Covering: Rubber membraneHeating Type: 5 FHA gas fired unitsCentral Cooling: Yes



Page13

DESCRIPTION OFIMPROVEMENTS(CONT.)Electric: 200 ampserviceBaths: (4) Full baths in residential area, (1) half bath in retail area

Physical Adequacy - The condition of the improvements is viewed as average with no noted deferred

Functional Obsolescence – The subject suffers from functional obsolescence due to the limited on-siteparking.

Economic Obsolescence - The subject property does not suffer from any economic obsolescence.

Americans with Disabilities Act (ADA) - We have visually surveyed the improvements to determine ifcompliance with the Americans with Disabilities Act (ADA). It would appear that the subject property hasnot complied with most of the provisions of ADA, however we are not engineers proficient in assessingactual compliance or non-compliance with ADA.

INTERIOR ANDADDITIONALPHOTOGRAPHS OFSUBJECTPROPERTY

View of sales area in retail space Other view of sales area



Page14

INTERIOR ANDADDITIONALPHOTOGRAPHS OFSUBJECTPROPERTY

Other view of sales area View of office in retail space

View of bathroom View of storage area

View of heating system View of hot water heaters



Page15

BUILDINGDIAGRAM

SKETCH CALCULATIONS Perimeter Area

A1 : 46.0 x 71.0 = 3266.0

Second Floor 3266.0

A1

Total Living Area 3266.0

A2 : 14.0 x 20.0 = 280.0A3 : 0.5 x 6.9x0.1 = 0.2A4 : 46.8 x 68.9 = 3227.0A5 : 0.5 x 2.1x2.1 = 2.2A6 : 0.5 x 2.1x2.1 = 2.3A7 : 17.5 x 2.1 = 37.1A8 : 0.5 x 2.1x2.1 = 2.1A9 : 6.9 x 2.1 = 14.3A10 : 0.5 x 2.1x2.1 = 2.3A11 : 7.0 x 2.1 = 14.8

First Floor 3582.3

A2

A3

A4

A5A6 A7A8A9 A10A11

Total Building Area 3582.3

FIRST FLOORSECOND FLOOR



Page16

REALESTATETAXES ANDASSESSMENTS

The assessment, taxes andequalization ratio on the subject property is as follows:

Block 77.00Lot 10.00

Land $352,800Improvements $434,000Total $786,800

Rate 1.4990Real Estate Taxes $11,794.13

Equalization Ratio 90.99%Equalized Value $864,710Equalized Value Reflects $122.10 per sq. ft.

According to the tax collector’s office of Point Pleasant Beach Borough as of November 4, 2014 the taxeson the subject property are paid to date. The Intended Use of this report is only for what has already beenstated in theScope of Work section of this report. This report cannot be used or is valid for any other use.

HIGHEST ANDBESTUSE

The highest and best use of site as if vacant is for mixed use development. The highest and best use ofsiteas improved is for its’ current use as a Mixed Use, Retail / Residential property.

VALUATIONPROCESS

This is a restricted appraisal report which is intended to comply with the reporting requirements set forthunder Standards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice for a restrictedreport. In this valuation analysis, we have applied the Sales Comparison and Income Approaches to value.The two approaches to value will be reconciled and a final value concluded for the subject. Most weight willbe placed upon the approach or approaches that best reflects market value.



Page17

SALESCOMPARISONAPPROACH

The Sales Comparison Approach is based on the premise that the informed, prudent and rationalpurchaser (investor or user) will pay no more for a property than the cost to him of acquiring a similarcompetitive property with the same utility as of the valuation date.

The approach is predicted on the assumption that there is, in fact, an active market for the type of propertybeing appraised; and that the data on recent sales prices of similar competitive properties on the samemarket, representing bona fide arm’s length transactions, are an appropriate guide to the market value ofthe subject property.

Our comparable improved sales summary is presented as follows. A complete narrative write-up of eachsale, photographs and location map are contained in the Addenda.

COMPARABLESALESANALYSIS ANDCONCLUSIONS

Several sales were researched from the marketplace (refer to next page). The sales utilized represent themost comparable available. Each of the comparable sales differed as compared to the subject andrequired adjustments. Factors of adjustment include property rights, financing, special conditions, marketconditions, location, size, condition and utility.

Each of the sales differed as compared to the subject and required adjustments. After analyzing each saleand making appropriate adjustments we have placed weight on all the sales with most weight placed onsale 3 as it was most similar to the subject in terms of size. Although sale 1 was the most recent sale, itwas smaller than the subject and only had one residential unit.

Refer to the following page for our sales summary and adjustment grid on the following page.



Page18

SUMMARYOFCOMPARABLESALESANDADJUSTMENTGRID

Subject Sale One Sale Two Sale Three Sale FourAddress: 604 Richmond Avenue 2621 Bridge Avenue 3112 Bridge Avenue 214 Ocean Avenue 2701-11 Bridge AvenueTown: Point Pleasant Beach Boro, NJ Point Pleasant Beach Boro, NJ Point Pleasant Beach Boro, NJ Point Pleasant Beach Boro, NJ Point Pleasant Beach Boro, NJStatus: - Sale Sale Sale SaleSale/Valuation Date: 110/4/2014 Jan-2014 Oct-2013 Apr-2013 Oct-2011Sale Price: - $550,000 $575,000 $760,000 $1,200,000

Building Size - Square Feet: 7,082 5,530 3,400 6,690 10,800Year Built/Rehabbed: 1950 1977 1985 1955 1990Condition: Average Average Average+ Average- AverageSite Size/Acres: 0.138 0.270 0.211 0.099 0.506Land/Building Ratio: 0.85 2.13 2.70 0.64 2.04

Unadjusted Price/Sq. Ft: - $99.46 $169.12 $113.60 $111.11

Sequential Adjustments -Property Rights Conveyed: Leased Fee 0.0% 0.0% 0.0% 0.0%Terms of Sale/Financing: - 0.0% 0.0% 0.0% 0.0%Conditions of Sale: - 0.0% 0.0% 0.0% 0.0%Market Conditions: - 0.0% 0.0% 0.0% 0.0%Adjusted Price/Sq. Ft.: - $99.46 $169.12 $113.60 $111.11

Other Adjustments -Location: Average 0.0% 0.0% 0.0% 0.0%Size: 7,082 0.0% -10.0% 0.0% 15.0%Year Built/Condition: 1950 0.0% -10.0% 10.0% 0.0%Land/Building Ratio: 0.85 0.0% 0.0% 0.0% 0.0%Exposure: - 0.0% 0.0% 0.0% 0.0%Parking: - -5.0% -5.0% 0.0% -5.0%Total Adjustment: -5.0% -25.0% 10.0% 10.0%

Final Adjusted Price/Sq. Ft.: $94.48 $126.84 $124.96 $122.22

Comparables Before AdjustmentsUnadjusted Range/Sq. Ft.: $99.46 to $169.12

Difference in Range/Sq. Ft.: $69.66

Unadjusted Mean/Sq. Ft.: $123.32

Unadjusted Median/Sq. Ft.: $112.36

Comparables After AdjustmentsAdjusted Range/Sq. Ft.: $94.48 to $126.84

Difference in Range/Sq. Ft.: $32.35

Adjusted Mean/Sq. Ft.: $117.13

Adjusted Median/Sq. Ft.: $123.59Value ConclusionsSubject Square Feet: 7,082 Square Feet Value by the Sales Comparison Approach: $885,250Concluded Unit Price: $125.00 per sq. ft.

Concluded Value by the Sales Comparison Approach: $885,250Rounded $885,000

$0.00$20.00$40.00$60.00$80.00$100.00$120.00$140.00$160.00$180.00

Low High Mean MedianUnadjusted Range $99.46 $169.12 $123.32 $112.36After Adjustments $94.48 $126.84 $117.13 $123.59

INCOMEAPPROACH

In the Income Approach, the present value of future benefits (income/resale) of owning a property ismeasured. An investor who purchases income-producing property is essentially trading present dollars forthe right to receive future dollars. In order to value the anticipated economic benefits of the subjectproperty, we have analyzed and estimated the potential income and expenses, and selected the mostappropriate capitalization method.

We have researched comparable leases from the market. A complete narrative write-up of eachcomparable lease, photographs and a location map are contained in our files. Inaddition, a detailed leasedanalysis, expense analysis, development of capitalization rate is also contained within our files. Areconstructed operating statement documenting our conclusions for the Income Approach is presented onthe following page.



Page19

POTENTIALGROSSINCOME

The subject property is occupied by the owner as well as four residential tenants. We made a request, butwere not provided with actual leases or lease summary on the property. The lease information wasverbally provided by the owner as follows:

SUMMARY OFSUBJECTRENTROLL

Tenant Name Size - SFRent - AnnualLease Type Rent/SF Beg. Date/Term

$0

NA

$14,400

Gross

$14,400

Gross

$10,800

NNN

$9,000

Gross

Total Square Feet (NRA) 7,082 $48,600Average Rental Size (sq. ft.) 1,416 $6.86 (based on existing tenants & total sq. ft.)Average Rent Per Sq. Ft.

PGI Based on Existing Tenants

One bedroom 750 sq. ft. $12.00 per sf Tenat pays heat and electric

One bedroom 750 sq. ft. $14.40 per sf Tenat pays heat and electric

Stohrer’s 3,582 sq. ft. $0.00 per sf Retail space occupied by the owner.

Two bedroom 1,000 sq. ft. $14.40 per sf Tenat pays heat and electric

Two bedroom 1,000 sq. ft. $14.40 per sf Tenat pays heat and electric.

Comments

We have researched the market for comparable leases of similar space. The comparable lease summaryand lease analysis are presented as follows.

SUMMARY OFCOMPARABLERETAILRENTALS

Retail Market Rents Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4

Address:604 Richmond Ave. PointPleasant Beach Boro, NJ

603 Arnold Avenue PointPleasant Beach Boro, NJ

400 Richmond AvenuePoint Pleasant Beach Boro,

2615 Bridge Avenue PointPleasant, NJ

626 Route 88 PointPleasant Boro, NJ

Tenant Name: - McGregor Trainning Round Dough With a Hole Bridge Ave. Barber Shop Liberty Flooring

Lease Date: Nov-14 Jul-14 Jan-14 Jan-14 Apr-13Lease Type: Gross Gross NNN NNN GrossTenant Size (avg.): 3,582 sq. ft. 2,500 2,000 1,500 1,000Unadjusted Rent/SF - $15.10 $15.20 $13.60 $12.00

The previous cited rentals are for similar buildings that the subject competes with in this market area. Eachcomparable lease differed as compared to the subject and required adjustments. Some of the factors ofadjustment include lease date, location, lease terms and size. After analyzing each comparable lease weare of the opinion that the market rent for the subject’s retail space is $15.00 per square foot on a modifiednet basis. The retail tenant would pay for their pro-rata share of utilities, maintenance and insurance. Thelandlord would be responsible for real estate taxes, management, structural reserves and professional fees.

We also researched the market for comparable residential leases. A summary is presented on thefollowing page.



Page20

RESIDENTIALRENTS(ONEBEDROOM)

Location MonthlyRental Type Total Rooms Reflects per room Picture

618 Bay AvenuePoint Pleasant Beach, NJ $885 1 BR 3 $295

11-5 Ocean AvenuePoint Pleasant Beach, NJ $900 1 BR 3 $300

312-2A Bridge AvenuePoint Pleasant, NJ $1,200 1 BR 4 $400

RESIDENTIALRENTS(TWOBEDROOM)

Location MonthlyRental Type Total Rooms Reflects per room Picture

618 Bay AvenuePoint Pleasant Beach NJ $1,400 2 BR 4 $350

1525- Rear Beaver Dam Rd.Point Pleasant, NJ $1,650 2 BR 4 $413

108-B Ocean AvenuePoint Pleasant Beach, NJ $1,550 3 BR 6 $258

The rentals in the market are reflecting between $258 and $412 per room. Due to the lack of available onebedroom comparables, it was necessary to use a studio unit in our analysis. This unit is on the upperrange of the market. The comparable apartments have an average rent of $336 per room with tenantspaying for utilities except water and sewer charges.

POTENTIALGROSSINCOME

We applied market rent to the owner’s space and utilized the subject’s contract rents for the residentialunits. Our concluded potential gross income for the subject is presented on our reconstructed operatingstatement. The potential gross income on the subject was figured as presented on the following page.



Page21

POTENTIALGROSSINCOME(PGI)

Tenant Name Size/Sq. Ft. Pro Rata Share Rent/SF Monthly Rent Annual Rent % of Income

Total 7,082 100.00% $102,330 100.00%$14.45Avg. Rent/Sq. Ft.

8.80%One bedroom 750 10.59% $12.00 $750 $9,000

One bedroom 750 10.59%

Two bedroom 1,000 14.12%

$14.40 $1,200 $14,400 14.07%

$14.40 $900 $10,800 10.55%

14.07%$14.40 $1,200 $14,400

Two bedroom 1,000 14.12%

52.51%$15.00 $4,478 $53,730Stohrer’s 3,582 50.58%

The owner would pay for real estate taxes, insurance and maintenance on the apartments, structuralreserves and common area expenses. Our reconstructed operating statement on the subject is as follows:

RECONSTRUCTEDOPERATINGSTATEMENT

Annual Per Sq. Ft. Per EGIPotential Gross Income - Rent 102,330$ 14.45$ 93.77%

Square Feet of Building - 7,082Plus ReimbursementsReal Estate Taxes -$ -$ 0.00%Insurance 1,770$ 0.25$ 1.62%Utilities 8,500$ 1.20$ 7.79%CAM/Maintenance/Other 2,276$ 0.32$ 2.09%Total Reimbursements 12,546$ 1.77$ 11.50%

Total PGI with Reimbursements 114,876$ 16.22$ 105.26%Less Vacancy & Collection 5.0% 5,744$ 0.81$ 5.26%Effective Gross Income 109,132$ 15.41$ 100.00%

Less ExpensesFixed ExpensesReal estate taxes 11,794$ 1.67$ 10.81%Insurance 3,500$ 0.49$ 3.21%Total Fixed Expenses 15,294$ 2.16$ 14.01%

Variable ExpensesMaintenance/Repairs 4,500$ 0.64$ 4.12%Management 5,000$ 0.71$ 4.58%Miscellaneous 250$ 0.04$ 0.23%Professional fees 2,500$ 0.35$ 2.29%Reserves 1,400$ 0.20$ 1.28%Utilities 8,500$ 1.20$ 7.79%Total Variable Expenses 22,150$ 3.13$ 20.30%

Total Expenses 37,444$ 5.29$ 34.31%.Net Operating Income 71,688$ 10.12$ 65.69%



Page22

DEVELOPMENT OF ANOVERALLCAPITALIZATIONRATE

A capitalization rate is a rate used to convert income into value. It reflects the relationship between a singleyear’s net operating income and its value. We have developed an overall capitalization rate for the subjectbased on market observations and from the band of investment method.

The band of investment method of developing an overall capitalization rate takes into consideration thatmost properties are purchased with debt and equity capital and the overall capitalization rate must satisfythe market returns of both investment positions.

The equity investor anticipates a competitive return commensurate with the perceived risk of a property.Otherwise they would invest their funds elsewhere in a safer and more liquid investment. Typically thelonger the term or riskier investment the higher the required rate of return by the investor. A lender alsoanticipates on receiving a competitive interest rate based on the perceived risk of a property. The lendersrisk is reflected in the loan to value ratio and the interest rate. The basic formula is as follows:

1. Loan Ratio X Annual Mortgage Constant = Mortgage Component2. Equity Ratio X Equity Dividend Rate = Equity Component

Mortgage Component + Equity Component = Overall Capitalization Rate

We have reviewed interest rates, loan to value ratios (LTV), debt coverage ratios and equity dividend ratesin the market (see Addenda). We have also looked at market indicators for our property type. The Band ofInvestment Method was then developed with the following parameters:

Interest rate: 5.00% Mortgage constant: 0.07015 Tax Rate 0.000Term - years: 25 Equity Dividend Rate: 11.00% Equalization Ratio 0.00%Loan to value ratio: 70% Equity ratio: 30%

LTV x Mortgage Constant 70% X 0.07015 = 0.04911Equity Ratio x Equity Dividend Rate 30% X 11.00% = 0.03300

Base Rate 0.08211Tax Rate x Equalization Ratio 0.00000 X 0.00% = 0.00000

Overall Rate: 0.08211Rounded: 8.20%

Our concluded overall capitalization rate for the subject property is as follows:

CONCLUDEDOVERALLCAPITALIZATIONRATE: 8.20%



Page23

INCOMEAPPROACHVALUECONCLUSION

We performed a direct capitalization on the stabilized income stream for the subject. The net operatingincome was capitalized into a value estimate as follows:

DIRECTCAPITALIZATION

Net Operating Income 71,688$Overall Capitalization Rate 8.20%Overall Value 874,248$Rounded 875,000$

ReflectsPrice Per Sq. Ft. 123.55$NOI Per Sq. Ft. 10.12$Effective Gross Income Multiplier 8.02

Loan To Value Ratio 70%Loan Amount 612,500$Annual Debt Service 42,967$Equity Investment 262,500$Annual Cash Flow 28,721$Cash on Cash Return 10.94%Debt Coverage Ratio 1.67



Page24

RECONCILIATION ANDFINALVALUEESTIMATE

The Sales and Income Approaches were used to value the subject property. We have utilized eachapproach in way similar to how a potential purchaser would look at the property, and consider what priceshould be paid. Each approach applied provided the following value conclusions for the subject assumingeconomic conditions prevailing as of November 4, 2014.

Sales Comparison Approach: $885,000Income Approach: $875,000

Based on our inspection of the subject property, the investigation and analyses undertaken, and subject tothe “Underlying Assumptions and Limiting Conditions” as set forth in this report, it is our opinion that themarket value of the subject property in the leased feeestateas of November 4, 2014 is:

EIGHTHUNDREDEIGHTYTHOUSAND DOLLARS

$880,000


.



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CERTIFICATION

We hereby certify to the best of our knowledge and belief:1. The statements of fact contained in this report are true and correct.

2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions,and our personal, impartial, unbiased professional analyses, opinions and conclusions.

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

4. We have no bias with respect to the property that is the subject of this report or to the parties involved with thisassignment.

5. We will maintain confidentiality and privacy of customer/client information obtained during the course of thisassignment.

6. Our engagement in this assignment was not contingent upon the development or reporting of a predetermined value ordirection in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulatedresult, or the occurrence of a subsequent event directly related to the use of this appraisal.

7. Our compensation for the preparation of this report is not in any way contingent upon the reporting of a predeterminedvalue or direction in value that favors the cause of the client, or a minimum valuation, the attainment of a stipulatedresult, the approval of a loan, or the occurrence of a subsequent event.

8. Our analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with therequirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the AppraisalInstitute and the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation.

9. We have made a personal inspection of the property that is the subject of this report.

10. No one provided significant professional assistance to the undersigned in the preparation of the analyses, conclusionsand opinions concerning real estate that are set forth in this appraisal report. Tony Kamand Jr., MAI takes fullresponsibility for any assistance relied upon by a professional who did co-sign this report.

11. We comply with the Competency Provision in USPAP as adopted in FIRREA and have sufficient education andexperience to perform the appraisal of the subject property.

12. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorizedrepresentatives.

13. We have not performed any services in regard to the subject property within the prior three years, as an appraiser or inany other capacity.

14. The undersigned will be responsive to any inquiries during any review process that are part of this assignment. Inaddition, if contacted by the client’s loan production staff (if applicable) we will immediately direct the inquiry to theclient’s appraiser or their designee of said inquiry.

15. As of the date of this report, Tony F. Kamand Jr. has completed the requirements under the continuing educationprogram of the Appraisal Institute, and is currently a state certified general real estate appraiser in the state in whichthe subject of this report is located.

Tony F. Kamand Jr., MAI Jacelyn C. AllenNJ Certified General Real Estate Appraiser, No. RG-668 NJ Trainee Permit No. 42RP00391500



Page26

UNDERLYINGASSUMPTIONS ANDLIMITINGCONDITIONS

This specific appraisal report is subject to the following underlying assumptions and limiting conditions:

1. No responsibility is assumed for the legal description provided or for matters pertaining to legal or title considerations.Title to the property is assumed good and marketable unless otherwise stated.

2. There are no existing judgments or pending or threatened litigation, which could affect the value of the property.

3. The property is appraised free and clear of any liens and encumbrances unless otherwise stated.

4. Responsible ownership and competent property management are assumed.

5. The information furnished by others is believed to be reliable, but no warranty is given for its accuracy.

6. All engineering studies are assumed correct. Any illustrative material in this report is included only to help the readervisualize the property.

7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it moreor less valuable. No responsibility is assumed for such conditions or for obtaining the engineering studies that may berequired to discover them.

8. It is assumed that the property is in full compliance with all federal, state, and local environmental regulations and lawsunless the lack of compliance is stated, described, and considered in the appraisal report.

9. It is assumed that the property conforms to all applicable zoning and use regulations and restrictions unlessnonconformity has been identified, described and considered in the appraisal report.

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

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

12. Unless otherwise stated in this report, the existence of hazardous materials, which may or may not be present on theproperty, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on orin the property. The appraiser, however, is not qualified to detect such substances. The presence of substances suchas asbestos, urea-formaldehyde foam insulation and other potentially hazardous materials may affect the value of theproperty. The value estimate is predicated on the assumption that there is no such material on or in the property thatwould cause a loss in value. No responsibility is assumed for such conditions or for any expertise or engineeringknowledge required to discover them. The client is urged to retain an expert in this field, if desired.

13. Any allocation of the total value estimated in this report between the land and the improvements applies only under thestated program of utilization. The separate values allocated to the land and buildings must not be used in conjunctionwith any other appraisal and are invalid if so used.

14. An appraisal is inherently subjective and represents only an estimate of a property’s fair market value.

15. No environmental impact studies were conducted in conjunction with this appraisal, and our value opinions are subjectto revision based upon any such studies. If any environmental impact statement is required by law, the appraisalassumes that such statement will be favorable and will be approved by the appropriate regulatory bodies.

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

17. Possession of this report, or a copy thereof, does not carry with it the right of publication.



Page27

UNDERLYINGASSUMPTIONS&LIMITINGCONDITIONS

18. The appraiser, because of this appraisal, is not required to give further consultation or testimony or to attend in courtwith reference to the property in question unless arrangements have been previously made.

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

20. Any value estimates provided in the report apply to the entire property, and any pro-ration or division of the total intofractional interests will invalidate the value estimate, unless such pro-ration or division of interests has been set forth inthe report.

21. Any proposed improvements are assumed to have been completed unless otherwise stipulated; any construction isassumed to conform to the building plans referenced in the report.

22. The forecasts, projections, or estimates contained herein are based on current market conditions, anticipated short-termsupply and demand factors, and a continued stable economy. These forecasts are, therefore, subject to changes withfuture conditions.

23. We reserve the right to require, as a condition to our rendering an opinion as to value, the engagement of professionalexperts in certain disciplines. The engagement of any such expert and the compensation of such expert shall be solelythe responsibility of the client.

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

25. This appraisal is made with the understanding that the subject can obtain a negative declaration from the Department ofEnvironmental Protection following the regulations and requirements of the Environmental Cleanup Responsibility Act of1983 (ECRA), as amended. This act requires as a pre-condition of any cessation of operation or the transfer of realproperty, which used or stored regulated hazardous substances, the testing, cleanup and disposal of any such material.The appraisers are not qualified to determine the existence of any such hazardous material and therefore, haveexpressed a value of the subject property as if free and clear of any such substances.

26. In conjunction with the preceding paragraph, the appraisers have not been apprised of, nor are they qualified toascertain, the existence of Radon, a radioactive gas that occurs naturally in the soil of certain identified areas. This gas,in concentrated form has been shown detrimental and its existence would create a negative impact on value. As in theabove instance, the value estimate assumes the subject is free and clear of Radon gas.

27. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specificcompliance survey and analysis of this property to determine whether it is in conformity with the various detailedrequirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of therequirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of theact. If so, this fact could have a negative effect upon the value of the property. Since we have no direct evidencerelating to this issue, we did not consider possible noncompliance with the requirements of the ADA in estimating thevalue of the subject.

28. This is a restricted appraisal report which is intended to comply with the reporting requirements set forth underStandards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice for a restricted appraisal report. Assuch, it presents only summary discussions of the data, reasoning, and analyses that were used in the appraisalprocess to develop the appraiser’s opinion of value. Some supporting documentation concerning the data, reasoning,and analyses is retained in the appraiser’s file. The depth of discussion contained in this report is specific to the needsof the client and for the intended use stated. The appraiser is not responsible for unauthorized use of this report.

The Appraisal Institute conducts a continuing education program for its designated members. Tony F. Kamand Jr.,MAI is currently certified under this program.

ADDENDA

TONY KAMAND REALTY LLC

Improved Sale # 1

Property IdentificationProperty Record ID 21645Property Type Mixed Use, Retail / ResidentialAddress 2621 Bridge Avenue, Point Pleasant Boro, New Jersey 08742County / Borough OceanTax ID Block 223, Lot 13Sale DataStatus ClosedSeller Bridgepoint Holdings LLCBuyer NKW-Point Pleasant LLCSale Price $550,000 Sale Date 01-17-2014Book/Page 15732/01317 Conditions of Sale Arm’s lengthProperty Rights Leased Fee Estate Financing Cash to SellerVerification Cristian Oancea-agent Confirmed By Mike RickettLand DataSite Size 0.27 acres or 11,761 SFPrimary Front Footage 100.43 feet of frontage on Bridge AvenueTopography Level Access AdequateUtilities All public Shape IrregularSignal / Traffic Light No Visibility AdequateParking Spaces 10 Lined Spaces Parking Ratio 1.81Zoning Code CM CommercialGeneral Physical DataGross Building Area 5,530 Rentable Area 5,530Building Condition Average Year Built 1977Number of Buildings 1 Stories 2Floor Area Ratio 0.47 Land/Build. Ratio 2.13IndicatorsSale Price / SF GBA $99.46Sale Price / SF NRA $99.46RemarksThe retail space is occupied by Reel Life bait and Tackle, a successful well-known local business which has been in operation since 1992.Furthermore, there is a 2,000 square foot three bedroom, two bathroom well-maintained apartment on the second floor which is occupied by theowner of the store. The apartment features newer windows, two fireplaces, a full bar and a rear balcony/roof deck. The building is well maintained.All HVAC and heating systems were upgraded within the last 4 years and the roof was replaced approximately 6 years ago.


Improved Sale # 2

Property IdentificationProperty Record ID 22237Property Type Mixed Use, Retail / ResidentialAddress 3112 Bridge Avenue, Point Pleasant Boro, New Jersey 08742County / Borough OceanTax ID Block 346, Lot 9Sale DataStatus ClosedSeller Modica, Claire L.Buyer Almar Holding, LLCAsking Price $625,000 Days On Market 248Sale Price $575,000 Sale Date 10-23-2013Book/Page 15672/1417 Conditions of Sale Arm’s lengthProperty Rights Fee Simple Estate Financing Cash to SellerVerification Maryann Ravally-Listing Agent Confirmed By Jackie MarmurLand DataSite Size 0.21 acres or 9,200 SFPrimary Front Footage 100.00 feet of frontage on Bridge AvenueDepth (Feet) 98.82Topography Level Access AdequateUtilities All public Shape IrregularSignal / Traffic Light No Visibility AdequateParking Spaces 8 Lined Parking Ratio 2.31Zoning Code CM Commercial and Multi Family Mixed UseGeneral Physical DataGross Building Area 3,456 Rentable Area 3,456Building Condition Average Year Built 1984Number of Buildings 1 Stories 2Floor Area Ratio 0.38 Land/Build. Ratio 2.66IndicatorsSale Price / SF GBA $166.38Sale Price / SF NRA $166.38RemarksListing agent verified this sale as arms’ length on 7/15/2014. The building has two (2) one bedroom apartments and two retail stores. Each unit hasseparate meters. Listing agent verified this sale as arms’ length on 7/15/2014. The building has two (2) one bedroom apartments and two retailstores. Each unit has separate meters.


Improved Sale #3

Property IdentificationProperty Record ID 5009Property Type Mixed Use, Retail / ResidentialAddress 214 Ocean Avenue, Pt. Pleasant Beach, New Jersey 08742County / Borough OceanTax ID Block 120, Lot 10.01Sale DataStatus ClosedSeller 2024 New Bedford Road Assoc. LLCBuyer GNG Acquisitions LLCSale Price $760,000 Sale Date 04-30-2013Book/Page 15537/142 Conditions of Sale Arm’s lengthProperty Rights Leased Fee Estate Financing Cash to SellerVerification Patricia Mayer-agent Confirmed By Michael RickettLand DataSite Size 0.10 acres or 4,312 SFPrimary Front Footage 50.00 feet of frontage on Ocean AvenueDepth (Feet) 91.75Topography Level Access NoneUtilities All public Shape Basically rectangularSignal / Traffic Light No Visibility AdequateParking Spaces Street Parking Parking RatioZoning Code RR1 Resort ResidentialGeneral Physical DataGross Building Area 6,690 Rentable Area 6,690No. of Units 4Building Condition Fair to Average Year Built 1955Number of Buildings 1 Stories 2Floor Area Ratio 1.55 Land/Build. Ratio 0.64IndicatorsSale Price / SF GBA $113.60Sale Price / SF NRA $113.60Sale Price / Unit $190,000RemarksThis is a mixed use property with two retail spaces on the first floor and four apartments on the second floor. Patricia Mayer (agent) informed us thatthe property was in fair to average condition at time of sale. The apartments were old and not recently updated.


Improved Sale # 4

Property IdentificationProperty Record ID 17315Property Type Mixed Use, Retail / ResidentialAddress 2701-11 Bridge Avenue, Point Pleasant Borough, New Jersey 08742County / Borough OceanTax ID Block 222, Lot 12Sale DataStatus ClosedSeller Donnelly Family Trust etalBuyer BMP Sons, LLCSale Price $1,200,000 Sale Date 10-07-2011Book/Page 14999 /787 Conditions of Sale Arm’s lengthProperty Rights Fee Simple Estate Financing Cash to SellerVerification Richard Kingston, Listing Agent Confirmed By Jackie MarmurLand DataSite Size 0.51 acres or 22,050 SFPrimary Front Footage 200.00 feet of frontage on Bridge AvenueDepth (Feet) 138.00Topography Level Access AdequateUtilities All public Shape IrregularSignal / Traffic Light No Visibility AdequateParking Spaces 25 Lined Parking Ratio 2.31Zoning Code CM Commercial and Multifamily Mixed UseGeneral Physical DataGross Building Area 10,800 Rentable Area 10,800No. of Units 5Building Condition Average Year Built 1990Number of Buildings 1 Stories 2Floor Area Ratio 0.49 Land/Build. Ratio 2.04IndicatorsSale Price / SF GBA $111.11Sale Price / Unit $1,200,000RemarksThere are four apartments above the retail space. Property was on the market for approximately four months. Verified sale 3/2012 with RichardKingston


COMPARABLESALESLOCATIONMAP


Lease Comparable No. 1

LocationProperty ID 22951 Property Use Free Standing Retail BuildingAddress 603 Arnold Avenue, Point Pleasant Beach, Ocean County New Jersey 08742Lessee McGregor TrainingProperty InformationGBA 10,800 Year BuiltRentable Area 10,800 Building Condition AverageNo. of Stories 2 Construction Quality AverageLand Acres 0.14 Land to Building Ratio 0.55Access Adequate Visibility AdequateLease TransactionLease Status ExecutedLease Date 08-01-2014 Term (months) 36Leased SF 2,500 Lease Type GrossInitial Rate($/SF) $15.12 Effective Rent ($/SF)Concessions Description NoneRemarksLease Confirmed With John Coletta, AgentLease Confirmed By Jacelyn C. AllenLease Remarks Gross lease with (3) three year options.

Property Remarks Building consists of two retail spaces on the first floor and second floor unfinished space. No on-siteparking however, building has rear access to municipal lot.



LocationProperty ID 22950 Property Use RetailAddress 400 Richmond Avenue, Point Pleasant Beach, Ocean County New Jersey 08742Lessee Round Dough with a HoleProperty InformationRentable Area Building Condition AverageNo. of Stories 1 Construction Quality AverageLand Acres 0.41 Land to Building RatioAccess Adequate Visibility AdequateLease TransactionLease Status ExecutedLease Date 01-05-2014 Term (months) 48Leased SF 2,000 Lease Type NNNInitial Rate($/SF) $15.00 Effective Rent ($/SF) $15.00Concessions Description NoneRemarksLease Confirmed With Kenneth Fischer, AgentLease Confirmed By Jacelyn C. AllenLease Remarks Rent will increase after the first year. Agent was not able to confirm the increase amount

Property Remarks Corner property, formerly (Joe Leone’s). On-site parking and rear entrance. Lease term is for 4 yearson a NNN basis.



LocationProperty ID 19607 Property Use Retail OtherAddress 2615 Bridge Ave, Point Pleasant, Ocean County New Jersey 08742Lessor Cestus Realty & Devel. LLCLessee Bridge Ave Barber ShopProperty InformationGBA NA Year Built 1970Rentable Area NA Building Condition AverageNo. of Stories 1 Construction Quality AverageLand Acres 0.29 Land to Building RatioAccess Adequate Visibility AdequateParking Description Open spaces Parking RatioLease TransactionLease Status ExecutedLease Date 01-01-2013 Term (months) 60Leased SF 1,500 Lease Type GrossInitial Rate($/SF) $13.60 Effective Rent ($/SF) $13.60Concessions Description NoneRemarksLease Confirmed With Maurice Davidson - AgentLease Confirmed By Robert BurdickLease Remarks Lease Notes: verified lease on 1/1/2013 with Maurice Davidson Paid By Tenant: Utilities

Property Remarks Subject is located in a 2 story mixed use building along Bridge Avenue that has good traffic. Thebuilding has been maintained and is in average condition



LocationProperty ID 19602 Property Use Retail OtherAddress 626 Route 88, Pt. Pleasant Boro, Ocean County New Jersey 08742Lessee Liberty Hardwood FlooringProperty InformationGBA 1,000 Year Built 1970Rentable Area 0 Building Condition AverageNo. of Stories 1 Construction Quality AverageLand Acres 0.66 Land to Building Ratio 28.81Access Adequate Visibility AdequateParking Description Open spaces Parking RatioLease TransactionLease Status ExecutedLease Date 04-04-2014 Term (months) 12Leased SF 1,000 Lease Type GrossInitial Rate($/SF) $12.00 Effective Rent ($/SF) $12.00Concessions Description NoneRemarksLease Confirmed With Rene Boyd, AgentLease Confirmed By Jacelyn C. AllenLease Remarks Lease verified with Peggy Ann Palmer on 4/4/2013 Paid By Tenant: Utilities


COMPARABLERETAILRENTALSLOCATIONMAP


COMPARABLERENTALS(ONEBEDROOM)LOCATIONMAP

COMPARABLERENTALS(TWOBEDROOM)LOCATIONMAP


DEFINITIONS OFSOMECOMMONAPPRAISALTERMINOLOGYSource: The Dictionary of Real Estate Appraisal

Absorption period - The actual or expected period of time required from when a property is initially offered for purchase or use by its eventual users untilall portions have been disposed of by sale or until stabilized occupancy has been achieved.

Accrued depreciation - The difference between an improvement’s reproduction or replacement cost and its market value as of the date of appraisal.

Ad valorem tax - a real estate tax based on property value.

Assessed value - the value according to the tax rolls in ad valorem taxation.

Band of investment - A technique in which cash flow rates attributable to components of a capital investment are weighted and combined to derive aweighted average rate attributable to the total investment.

Base rent - the minimum rent stipulated in a lease.

Basis point - one one-hundredth of one percentage point.

BOMA standard - the standard method of floor measurement for office buildings as defined by the Building and Officers Managers Association.

Bundle of rights theory - the concept that compares property ownership to a bundle of sticks with each stick representing a district and separate right ofthe property owner, e.g., the right to use real estate, to sell it, to lease it, to give it away, or to choose to exercise all or noneof these rights.

Capitalization Rate - any rate used to convert income into value.

Cash equivalent - a price expressed in terms of cash, as distinguished from a price expressed totally or partly in terms of the face amounts of notes orother securities that cannot be sold at their face amounts.

Cash flow analysis - a study of the anticipated movement of cash in or out of real estate.

Cash on cash - the ratio of the annual equity income to the equity investment. Also called the equity capitalization rate of equity dividend rate.

Common Area - The total area within a property that us not designated for sale or rental, but is available for common use by all owners, tenants or theirinvitee’s, e.g., parking and its appurtenances, malls, sidewalks, landscaped areas, public toilets and service facilities.

Common Area Maintenance (CAM) - expenses of operating and maintaining common areas.

Concession - an inducement to a tenant to lease space, usually in the form of free rent, additional tenant improvement allowance, moving costs, etc.

Consumer Price Index (CPI) - a measurement of the cost of living determined by the U.S. Bureau of Labor Statistics.

Contract rent - the actual rental income specified in a lease.

Debt coverage ratio - the ratio of net operating income to annual debt service (DCR = NOI/IM).

Deferred maintenance - curable, physical deterioration that should be corrected immediately, although work has not commenced.

Development right - the right to build on or beneath a property, subject to local zoning, building codes, etc.

Direct capitalization - the method used to convert an estimate of a single year’s income expectancy or an average of several years’ incomeexpectancies into an indication of value in one direct step, either by dividing the income estimate by an appropriate rate or by multiplying the incomeestimate by an appropriate factor.

Discounted cash flow analysis - a set of procedures in which the quantity, variability, timing, and duration of periodic income, as well as the quantity andtiming of reversions, are specified and discounted to a present value or a specified yield.

Discount rate - a rate of returncommensurate with the perceived risk used to convert future payments or receipts into present value.

Easement - an interest in real property that conveys use, but not ownership, of a portion of an owner’s property.

Easement appurtenant - an easement that is attached to, benefits, and passes with the conveyance of the dominant estate.

Economic age-life method - the method of estimating accrued deprecation in which the ratio of a building’s effective age to its total life is applied to thecurrent cost of the improvements to obtain a lump sum deduction.

Economic life - the period over which improvements to real property contribute to property value.


DEFINITIONS OFSOMECOMMONAPPRAISALTERMINOLOGYEffective age - the age indicated by the condition and utility of a structure.

Effective gross income (EGI) - the anticipated income from all operations of real property adjusted for vacancy and collection loss.

Effective tax rate - the ratio between a property’s annual property tax and it’s market value; the tax rate times the assessed value divided by the marketvalue; the official tax rate times the assessment ratio.

Equity capitalization (dividend) rate - an income rate that reflects the relationship between a single’s year pre-tax cash flow expectancy and the equityinvestment.

Equity yield rate - an annualized rate of return on equity capital, as distinguished from the rate of return on debt capital or interest.

External obsolescence - an element of accrued depreciation; a defect, usually incurable, caused by negative influences outside a site.

Exposure time – the estimated length of time the property interest being appraised would have been offered on the market prior to the hypotheticalconsummation of a sale at market value on the effective date of the appraisal. Exposure time is always presumed to occur prior to the effective date ofthe appraisal.

Extraordinary Assumptions - an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions orconclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of thesubject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis.

Fee simple estate - absolute ownership unencumbered by any other interest or estate subject to only the four powers of government.

Functional obsolescence - a defect caused by a defect in the structure, materials, or design.

Hypothetical conditions – that which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditionscontrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such asmarket conditions or trends; or about the integrity of data used in an analysis.

Internal rate of return - a measurement of investment performance; the rate of return on capital that is generated within an investment over a period ofownership.

Land-to-building ratio - the proportion of land area to gross building area.

Leased fee estate - an ownership interest held by a landlord with the right of use an occupancy conveyed by lease toothers.

Marketing time - the time it takes an interest in real property to sell on the market sub-sequent to the date of an appraisal.

Market rent - the rental income that a property would most probably command in the open market.

Net operating income - the actual or anticipated net income remaining after deducting all operating expenses from effective gross income, but beforededucting mortgage debt service and book depreciation.

Potential gross income - the total income attributable to real property at full occupancy before deduction for vacancy and operating expenses.

Present value - the value of a future payment or series of future payment discounted to the current date or to time period zero.

Rentable Area - This is the usable area of an office area, with its associated share of both floor common area and building common area added on.Rentable area is determined by multiplying the Usable area by the combined R/U ratio.

R/U Ratio - The combined conversion factor, obtained by multiplying the Floor R/U by the Building R/U ratios, which when applied to any Usable area,gives the Rentable area of that office or store area.

Terminal capitalization rate - the rate used to convert income into an indication of the anticipated value of the subject real property at the end of theholding period.

Vacancy and collection loss - an allowance for reduction in potential income attributable to vacancies, tenant turnover, and nonpayment of rent.

PROFESSIONAL QUALIFICATIONS OFTONY F. KAMAND JR., MAI

REALESTATEVALUATION ANDCONSULTING(1986TO PRESENT)

Real estate valuation of all types of improved and unimproved real property. Properties have been located in New Jersey,New York, California, Illinois, Virginia, North Carolina, Georgia, Delaware, Maryland and Pennsylvania with extensiveexperience in the following properties:

Apartments LIHTC Projects HUD ProjectsRent Comparability Studies Healthcare Properties Retail Centers

Industrial Office Special Purpose Properties

PROFESSIONALLICENSES ANDCERTIFICATIONS

State of New Jersey - Certified General Real Estate Appraiser - RG-00668State of New York - Certified General Real Estate Appraiser –46000026069State of Pennsylvania - Certified General Real Estate Appraiser - GA001862State of Delaware - Certified General Real Estate Appraiser - 143010State of Maryland - Certified General Real Estate Appraiser –27830

PROFESSIONALAFFILIATIONS

MAI Member of the Appraisal InstitutePast President (2005, 2011 and 2012) -Appraisal Institute, Central New Jersey ChapterPast Treasurer (1995 to 2004) -Appraisal Institute, Central New Jersey Chapter

QUALIFIED ASEXPERTWITNESS

Federal Bankruptcy Court, New Jersey Tax Court, New York Tax Court, Various County Tax Boards and Zoning Boards

EDUCATION

Bloomfield College - B.S. in Business Administration

The Appraisal InstituteReal Estate Appraisal Principles Residential ValuationBasic Valuation Standards of Ethics & Professional PracticeCapitalization Theory/Techniques Part A Capitalization Theory/Techniques Part BCase Studies in Real Estate Valuation Report Writing in Real Estate Valuation

Additional Courses/SeminarsGovernor’s Conference - Multi-Family Housing, HUD Third Party Technical Training for MAP, The Economy and Rates, UrbanLand Institute - Improving Shopping Center Performance, Real Estate Commercial Markets, Appraisal Institute - AppraisingRetail Properties, Argus Real Estate Analysis Software, Numerous other seminars and courses

REPRESENTATIVECLIENTS

Banks, Attorneys, Developers, Government Agencies, Fortune 500 Companies, Insurance Companies and InstitutionalInvestors.

PROFESSIONAL QUALIFICATIONS OFJACELYN C. ALLEN

REALESTATEVALUATION ANDCONSULTING(2012TO PRESENT)Real estate valuation of all types of improved and unimproved real property. Properties have been located in New Jersey,New York specializing in the following:

Apartments RestaurantsRent Comparability Studies 2-4 Family Dwellings

Single Families Retail CentersVacant Land Condominiums

PROFESSIONALLICENSE

State of New Jersey –Trainee Permit # 42RP00391500

PROFESSIONALAFFILIATIONS

New Jersey Licensed Real Estate Broker

EDUCATION

American School of Business

Real Estate Appraisal PrinciplesReal Estate Appraisal Procedures15 Hour National USPAP

REPRESENTATIVECLIENTS

Banks, Attorneys, Developers, Government Agencies, Fortune 500 Companies, Insurance Companies andInstitutional Investors

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