Appraisal Report

NARRATIVE APPRAISAL REPORT

AND

VALUATION ANALYSIS

PROPERTY

Kmart Plaza 6.39 Acres of Kelley’s Corner Zoned Land with 64,998 Sq Ft Kmart Building 3,406 Sq Ft Vacant Building

DATE OF VALUATION

August 17, 2018

PREPARED FOR

M.J. Selby Director of Land Use and Economic Development Town of Acton 472 Main Street Acton, Massachusetts 01720

PREPARED BY

Avery Associates 282 Central Street Post Office Box 834 Acton, Massachusetts 01720 TEL: 978-263-5002 FILE NO. 18059/2018061

Avery Associates Real Estate Appraisers – Counselors 282 Central St. P.O. Box 834 Acton, MA 01720 Tel: 978-263-5002 Fax: 978-635-9435 [email protected] [email protected] August 20, 2018

M.J. Selby Director of Land Use and Economic Development Town of Acton 472 Main Street Acton, Massachusetts 01720

RE: Kmart Plaza 6.39 Acres of Kelley’s Corner Zoned Land with 64,998 Sq Ft Kmart Building 3,406 Sq Ft Vacant Building

Dear Mr. Selby:

In fulfillment of our agreement, as outlined in the letter of engagement dated May 16, 2018, we are pleased to transmit the appraisal report detailing our estimate of the market value of the fee simple interest in the above referenced real property.

The subject of this report is 6.39 acres of Kelley’s Corner zoned land, located at the intersection of Main Street (Route 27) and Mass Ave (Route 111) in Acton, Massachusetts. The land is improved with a single story, 64,998 sq ft retail building currently occupied by a Kmart and a vacant, single story 3,406 sq ft building formerly occupied by a McDonald’s Restaurant.

The Kmart building is reportedly leased through April of 2021 at a below market rent. We have specifically been asked to estimate the fee simple value of the property assuming this lease was not in place; using market rental estimates in our valuation projections.

The complete appraisal developed in support of the value opinions is presented in the narrative format and is qualified by certain definitions, limiting conditions and certifications presented in detail in the appraisal report. This report has been prepared for your exclusive use. It may not be distributed to or relied upon by other persons or entities without our written permission.

Page 2 August 20, 2018 M.J. Selby Director of Land Use and Economic Development

As a result of our analysis, we have formed an opinion that the market value of the fee simple interest in the subject property, subject to the definitions, assumptions and limiting conditions and certifications set forth in the attached report, as of August 17, 2018 is:

SEVEN MILLION ($7,000,000) DOLLARS

This letter must remain attached to the report, which contains 41 pages plus related exhibits, in order for the value opinion set forth to be considered valid.

Respectfully submitted,

Christopher H. Bowler, MAI, CRE Jonathan H. Avery, MAI, CRE Massachusetts Certified General Massachusetts Certified General Real Estate Appraiser #495 Real Estate Appraisers #26 TABLE OF CONTENTS Page

Summary of Important Facts and Conclusions...... 1 Subject Property Photographs...... 2 Purpose of the Appraisal...... 8 Property Rights Appraised...... 8 Scope of the Appraisal……………………...... 8 Date of Valuation...... 9 Date of Report...... 9 Intended Use of Report...... 9 Identification and History of Subject Property…...... 12 Municipal Profile & Market Analysis….………………… 12 Neighborhood Analysis………………………………….. 21 Tax Data…………….…………………………………….. 23 Zoning Data and Analysis………………………………. 24 Description of the Subject Property...... 25 Highest and Best Use...... 28 Appraisal Process…...... 30 Reconciliation………………………...... 40 Certification...... 41 Addenda (in order of presentation)  Subject Property Deed  Recorded Plan of Land  Zoning By-Law Exerpts  Kelley’s Corner Special Provisions; Sections 5.6  Comparable Land Sales Location Map  Comparable Rentals Location Map  Appraisal Lexicon & Assumptions, Limiting Conditions  Qualifications

SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS

ADDRESS: 252-256 Main Street Acton, Massachusetts

OWNER OF RECORD: The Stop & Shop Supermarket Company

DATE OF VALUE ESTIMATE: August 17, 2018

INTEREST APPRAISED: Fee Simple

LAND AREA: 6.398 Acres

IMPROVEMENTS: There is a 64,998 sq ft, single story retail building occupied by Kmart. It is of masonry construction and was built in 1971. There is also a 3,406 sq ft, single story restaurant building constructed in 1973. It was formerly occupied by a McDonald’s Restaurant but has been vacant since 2009. There is also approximately 100,000 sq ft of asphalt pavement on site lined for 286 parking spaces.

ZONING: Kelley’s Corner (business)

HIGHEST AND BEST USE: It is our opinion that the highest and best use of the subject property is to keep the Kmart building and attempt to develop an additional 20,700 sq ft on site, which is both legally permissible and physically possible.

INDICATIONS OF VALUE:

COST APPROACH not applicable Land Value $5,400,000

INCOME APPROACH $7,000,000

SALES COMPARISON APPROACH not applicable

VALUE ESTIMATE: $7,000,000

APPRAISED BY: Christopher H. Bowler, MAI, CRE Jonathan H. Avery, MAI, CRE Avery Associates Post Office Box 834 282 Central Street Acton, Massachusetts 01720

1 SUBJECT PROPERTY PHOTOGRAPHS Kmart Plaza 252-256 Main Street Acton, Massachusetts Taken by C.H. Bowler (7/28/2018)

View Looking Westerly at the Kmart Building on Site. Photo Taken from Route 27 Frontage.

View Looking SW.

2 SUBJECT PROPERTY PHOTOGRAPHS Kmart Plaza 252-256 Main Street Acton, Massachusetts Taken by C.H. Bowler (7/28/2018)

Interior View of Main Retail Floor within Kmart Building.

Interior View of the 1,900+/- Sq Ft Seasonal Garden Shop.

3 SUBJECT PROPERTY PHOTOGRAPHS Kmart Plaza 252-256 Main Street Acton, Massachusetts Taken by C.H. Bowler (7/28/2018)

View Looking NE at the Rear Wall of the Kmart Building.

Street Scene Looking Northerly Along Route 27/Main Street.

4 SUBJECT PROPERTY PHOTOGRAPHS Kmart Plaza 252-256 Main Street Acton, Massachusetts Taken by C.H. Bowler (7/28/2018)

View Looking Northerly at the Former McDonald’s Restaurant Building on Site.

Interior View of the Former McDonald’s Restaurant Building.

5 SUBJECT PROPERTY PHOTOGRAPHS Kmart Plaza 252-256 Main Street Acton, Massachusetts Taken by C.H. Bowler (7/28/2018)

View Looking SE at the Northern Sidewall of the Kmart Building. Photo Taken from the Route 111 Frontage.

Street Scene Looking Easterly Along Route 111- Mass Ave.

6 SUBJECT PROPERTY PHOTOGRAPHS Kmart Plaza 252-256 Main Street Acton, Massachusetts

Aerial Photo Provided by Mass GIS/Google Earth. Photo Dated April 2018.

7 PURPOSE OF THE APPRAISAL

The purpose of this appraisal is to estimate the market value of the fee simple interest in the subject property as of August 17, 2018. In estimating this value, it has been necessary to make a careful physical inspection of the site, a review of zoning bylaws and development options, and an analysis of market conditions as of the date of valuation and how they relate to the subject property.

MARKET VALUE IS DEFINED AS FOLLOWS:

1. Buyer and seller are motivated;

2. Both parties are well informed or well advised and each acting in what he considers his own best interest;

3. A reasonable time is allowed for exposure in the open market;

4. Payment is made in terms of cash in U.S. dollars, or in terms of financial arrangements comparable thereto; and

5. The price represents the normal consideration for the property sold unaffected by special or creative financing, or sales concessions granted by anyone associated with the sale." (1)

(1) FIRREA 12CFR Part 323.2.

PROPERTY RIGHTS APPRAISED

The property rights appraised in the subject property are fee simple, subject to the corresponding regulatory requirements. Fee simple is defined as:

"Absolute ownership unencumbered by any other interest or estate. A fee simple estate is subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat."(2)

SCOPE OF THE APPRAISAL

Christopher H. Bowler, MAI, CRE and Jonathan H. Avery, MAI, CRE inspected the subject property on July 28, 2018. Present at this inspection was M.J. Selby of the Town of Acton and a property manager for KeyPoint Partners. Photographs of the property were taken at th this time. A second inspection was made by Mr. Bowler on August 17 .

(2) The Appraisal Institute. The Dictionary of Real Estate Appraisal, Sixth Edition. Appraisal Institute. Chicago, IL 2015, Page 90.

8 In addition to the inspections, Mr. Bowler:

. Discussed development options for the property with Roland Bartl, Town Planner for the Town of Acton. . Discussed development options for the property; as they pertain to sewer capacity on site, with Paul Campbell of the Town of Acton Engineering Department. . Obtained additional information regarding the subject property from the Town of Acton Assessor’s and the Middlesex South Registry of Deeds. . Gathered information on comparable land sales, construction cost data, retail property sales, and rental rates in the Acton and entire Greater Boston markets. . Confirmed and analyzed the data and utilized the Income Approach and the Sales Comparison Approach in order to estimate the value of the property. Due to the age of the subject improvements the Cost Approach was not applicable and was not used here.

Note that the Kmart building is reportedly leased through April of 2021 at a below market rent. We have specifically been asked to estimate the fee simple value of the property assuming this lease was not in place; using market rental estimates in our valuation projections.

The valuation process and estimate of value were reviewed by Jonathan H. Avery, MAI, CRE.

DATE OF VALUATION: The date of valuation of this report is August 17, 2018, which is the most recent inspection of the property. All data, analysis and conclusions are based upon facts in existence as of the date of valuation.

DATE OF REPORT: August 20, 2018.

CLIENT/INTENDED USER OF REPORT: Town of Acton.

INTENDED USE OF REPORT: The function of this appraisal is to estimate the market value of the fee simple interest in the subject property for town planning purposes.

CONSIDERATION OF HAZARDOUS SUBSTANCES IN THE APPRAISAL PROCESS

Although no specific geotechnical engineering data has been provided, it is our assumption that the property is free and clear of any hazardous wastes or contaminating substances, as specified in applicable municipal, state and federal regulations or laws. In the event that this is not the case, the value as estimated herein may vary to the extent of contamination and the cost of cleanup.

As of the date of valuation the subject property is not included as either a contaminated site or a location to be investigated by the Bureau of Waste Site Cleanup of the Department of Environmental Protection, Commonwealth of Massachusetts. It is our assumption in this report, therefore, that the subject site is not a contaminated site. However, if the subject site is found to be contaminated, the value estimate contained herein will change.

ASSUMPTIONS AND LIMITING CONDITIONS

This appraisal report has been made with the following general assumptions:

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

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

3. Responsible ownership and competent property management are assumed.

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

5. All engineering is assumed to be correct. The plot plans and illustrative material in this report are included only to assist the reader in visualizing the property.

6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them.

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

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

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

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

This appraisal report has been made with the following general limiting conditions:

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

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

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

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

5. Any value estimated provided in the report apply to the entire property, and any proration or division of the total into fractional interests will invalidate the value estimate, unless such proration or division of interests has been set forth in the report.

6. The forecasts, projections, or operating estimates contained herein are based upon current market conditions and anticipated short-term supply and demand factors. These forecasts are, therefore, subject to changes in future conditions.

11 IDENTIFICATION AND HISTORY OF SUBJECT PROPERTY

The subject of this report is 6.39 acres of Kelley’s Corner zoned land, located at the intersection of Main Street (Route 27) and Mass. Ave (Route 111) in Acton, Massachusetts. The land is improved with a single story, 64,998 sq ft retail building currently occupied by a Kmart and a vacant, single story 3,406 sq ft building formerly occupied by a McDonald’s Restaurant.

The following is the address, assessors, and legal reference for the subject property:

Assessors Size of Current Legal Address Town Map Lot Site (ac) Owner Reference (Bk/Pg) 252 Main Street Acton F3 139 1.88 Stop & Shop Supemarket Company 26935/5 256 Main Street Acton F3 116 2.51 Stop & Shop Supemarket Company 26935/5 252 Main Street Rear Acton F3 129-1 2.00 Stop & Shop Supemarket Company 26935/5 Total 6.39

The current owner of the property, the Stop & Shop Supermarket Company, acquired it from Purity Supreme, Inc., for a reported consideration of $1,086,500 on December 24, 1996. This sale is recorded in Book 26395 Page 5 at the Middlesex South Registry of Deeds.

The subject property is also shown as Parcels A, B and C on Plan 1248 of 1969 recorded at the aforementioned registry of deeds.

A copy of the deed and the recorded plan of land can be found in the Addenda to this report.

Existing Leases: Reportedly, the Kmart building is affected by a multi year lease that extends through April of 2021.

We have not been given a copy of this lease to review.

We have specifically been asked to estimate the fee simple value of the property assuming this lease was not in place; using market rental estimates in our valuation projections.

Past Proposals: According to the Town of Acton Planning Department, in 2015 there was a proposal to tear down the vacant, former McDonald’s restaurant building on site and replace it with a 240 seat, 6,400 sq ft restaurant building to be operated as the 110 Grille.

Reportedly, during the approval process, the proponents of the development decided they did not want to comply with Section 5.6 of the Acton Zoning Bylaw, which provides for additional requirements for development in the Kelley’s Corner Zoning District where the proposed FAR (floor area ratio) will exceed 0.20, and withdrew the proposal.

MUNICIPAL PROFILE & MARKET ANALYSIS

The subject property is located in the Middlesex County community of Acton. Surrounding communities are Carlisle and Concord to the east; Sudbury to the south; Maynard and Stow to the southwest; Boxborough to the west; and Littleton and Westford to the northwest. Its population per 2017 U.S. Census updated figures is 23,777, up 8.45% from the 2010 U.S. Census. 12

Acton can be best described as a modern suburban community that has retained its residential, New England flavor and charm. Once a sleepy, rural town, Acton has used its advantageous position along Route 2 and nearby I-495 to attract industry and build up its neighborhoods. As a result, the population has nearly tripled over the last 3 decades.

Although Acton is popular with commuters because of its highway location and commuter train service, the town attracts perhaps more newcomers because of its excellent school system. The Acton/Boxborough Regional High School is consistently rated among the top 5 schools in the state and boasts a 90% rate of graduates going on to higher education.

With its convenient commuter location and excellent school system, Acton has increasingly become a home to the affluent. Its median household income as of 2017 was $131,099 versus $70,954 for the State as a whole.

Economic & Market Conditions: When completing an appraisal of real property, it is necessary to have a proper perspective of economic conditions as of the date of valuation. Economic conditions play a significant role in the price paid for real estate at any given time. As the third quarter of 2018 moves forward, the economy continues to improve from the depths of the last recession in 2009. General economic conditions include modest economic growth that is beginning to pick up; healthy real estate markets, both residential and commercial; a volatile stock market but one that is positive for 2018; and a high level of consumer confidence that suggests the American consumer is feeling good about economic conditions now and going forward.

We look at several key economic indicators to measure the health of the economy as of the date of valuation:

14 ECONOMIC GROWTH (growth in the U.S. GDP) Annualized Grow th Rate 2018 Q2 4.1% 2018 Q1 2.2% 2017 Annual 2.3% 2016 Annual 1.5% 2015 Annual 2.6% 2014 Annual 2.4% 2013 Annual 2.2% 2012 Annual 2.0% 2011 Annual 1.8% 2010 Annual 3.0% 2009 Annual -2.4%

(Gross Domestic Product is the total market value of the goods and services produced by a nation's economy during a specific period of time). EMPLOYMENT/UNEMPLOYMENT Town of Middlesex Acton County Massachusetts U.S. Most Recent Month 3.0% 3.3% 3.6% 3.9% New Jobs Unempl. United States Created Rate Last Mos.; July 2018 157,000 3.9% Average Last 12 Mos. 200,750 4.1%

STOCK MKT, COMMODITY & INTEREST RATE TRENDS SAnnual & P 500 Beginning Closing Change Returns Price Price Since 2017 +19.42% 1-Jan-18 17-Aug-18 1/1/2018 2016 +9.53% Dow Jones Industrial 24,719 25,559 3.40% 2015 -0.72% S&P 500 2,674 2,841 6.25% 2014 +11.4% London Gold $ fix/oz 1,309 1,184 -9.55% 2013 +29.6% Crude Oil $ per barrel 60.42 65.91 9.09% 2012 +13.4% 2011 -.003% 10 Year Treasury 2.41% 2.85% 18.34% 2010 +12.8% CONSUMER CONFIDENCE Source: Conference Board 2018 July 127.4 2017 July 120.0 2016 July 96.7 2015 July 91.0 2014 July 90.3 2013 July 81.0 2012 July 65.4 2011 July 59.5 (1985=100)

CASE-SHILLER HOME PRICE INDEX % Change 3 Year Change Greater Boston from Prev. Year in Price Current May-18 214.6 7.8% 19.67% 1 Year Earlier May-17 199.2 5.2% 2 Years Earlier May-16 189.2 5.5% 3 Years Earlier May-15 179.3 ------

15 In terms of the GDP, the most recent figure released for the U.S. economy shows the economy expanded at a 4.1% annualized rate in the 2nd quarter of 2018, up from 2.2% in the 1st quarter. This most recent number is the biggest increase in four years.

For Massachusetts, there are no figures yet for the 2nd quarter of 2018. The 1st quarter of 2018 saw a GDP figure of 1.6%, reportedly low due to a tough winter from a weather perspective.

Economists suggest we have been in a “2%” economy for several years (average GDP increase annually), although we truly need to be in a “3%” economy to see a substantial rise in employment and wage growth. The present administration believes that the tax cut plan that took effect in January will push economic growth to the 4% range. The recently released figure suggests the economy is moving to a higher GDP growth environment.

The employment figures show the economy has created an average of 200,750 new jobs per month for the past 12 months. Since the beginning of 2018 the monthly average has been 223,000 new jobs per month. After several years of tepid job growth, that barely kept up with the 150,000+/- new jobs needed each month just to keep up with population growth and routine turnover, the past few months have seen growth that is providing a strong boost to the economy. In addition to the growth in jobs, the labor participation rate is setting records and wage growth is ticking up.

The stock market ended 2017 up 19.42% in terms of the S&P 500 index, after increasing 9.53% in 2016. Thus far in 2018 the market is on a wild ride to say the least. Once up over 6% in terms of the S&P 500 through the week of January 29th for 2018, the week of February 5th saw the beginning of significant correction in which stocks gave back almost all of the gains for the year. As of the writing of this report, the market is up 6.25% for the year.

The consumer confidence data shown above portrays the ups and downs of the economy over the past seven-plus years. The index data is for July for each of the past eight years. The most recent figure of 127.4 is a slight increase from the June figure and is a 6.16% increase from one year ago. Per the Conference Board, a reading above 90 translates into an economy on solid footing while a reading above 100 reflects stronger economic growth. 16

The residential housing market in Massachusetts has been quite strong over the past three years, gaining back all of the price/value lost during the downturn period that began in the 3rd quarter of 2005 and extended through 2008-09. During the downturn period, by several measures, prices dropped approximately 15-25% in Massachusetts. Since the 2nd quarter of 2009, the market stabilized, and in many communities, particularly along and inside the Route 128 beltway of Greater Boston, has surged to price levels greatly exceeding the peak index year of 2005. An index considered reliable by most is the Case-Shiller Home Price Index. This data includes only repeat sales of homes. The most recent data from the Case-Shiller Home Price Index listed on the previous page indicates that we are up 7.8% in terms of pricing from one year ago in Massachusetts, and an aggregate increase of 19.67% from three years ago. Many economists think the rising mortgage rates may put a stop to the appreciation of the past few years, although few are calling for declines in values.

Commercial R.E. Market Conditions: From a price/value standpoint, the most recent GreenStreet Advisors Commercial Property Price Index data shows an increase of 1% over the past 12 months for all commercial property types. This is a national based index. For ‘Strip Retail’ properties the price increase was -3%. And for ‘Mall’ it was worse at -9%.

The data from this index is below:

Heading into the second half of 2018, investors remain positive about the apartment sector of the commercial real estate market, as well as office in core CBD’s, warehouse, and light industrial. Retail, nationally, particularly shopping malls, has fallen out of favor with investors 17 as this sector of the economy continues to adjust to on-line shopping. Locally, occupancy trends remain positive. While there certainly is change in the retail market landscape; such as Sears and Macy’s closing numerous stores nationwide and locally, there has been replacements for these retailers appearing.

Retail Market: The following are excerpts from the latest KeyPoint Report, completed by KeyPoint Partners; a regional retail real estate firm that tracks retail real estate trends in the Eastern Massachusetts area:

Vacancy & Absorption: The year-end regional vacancy rate was 9.5%, a signiﬁcant increase from a rate of 8.6% in 2017. Total vacancy in the region is approximately 18.6 million square feet, 1.9 million square feet more than last year, equating to a nominally positive absorption rate of 22,100 square feet for the year.

Submarkets The West submarket experienced the largest gain in retail space among all submarkets, adding 479,100 square feet, or 1.8%. The City of Boston also showed a signiﬁcant gain of 362,600 square feet, also a 1.8% increase. In the West, Apex Center of New England, a retail and entertainment complex, opened in Marlborough, and Lakeway Commons opened in Shrewsbury, with a new Whole Foods Market anchoring the project. City of Boston openings were focused largely on new developments in the Seaport District. Buzzards Bay also experienced a signiﬁcant increase in space resulting from SouthCoast Marketplace, a new Market Basket-anchored project in Fall River, developed on the site of the former New Harbour Mall. The North, Northwest, and South also added more than 100,000 square feet.

Supply, Occupancy, & Absorption: This year Eastern Massachusetts inventory grew moderately, reaching 196.3 million square feet, or an increase of 1.0%. It was the largest gain since 2014 when just over 2.0 million square feet of retail space was added to the region. The increase was largely attributable to several new projects including Southcoast Marketplace in Fall River, Lakeway Commons in Shrewsbury, Meadow Walk in Sudbury, and Life Time Athletic in Burlington. In addition, the substantial retail development by WS Development in the Seaport has begun in earnest with the openings of King’s, LL Bean, ShowPlace ICON Theatre, and Tuscan Kitchen, among others. Despite the inventory gain in Eastern Massachusetts, a considerable increase in vacancy totally negated any substantial positive absorption the region would have otherwise experienced. A handful of large format store closings and chain liquidations were primarily responsible for the disappointing outcome, which could have been even worse without a significant number of retail conversions to non-retail space, cushioning the impact. The most notable were the Toys R Us and Babies R Us stores, which together closed 19 stores and added 666,600 square feet of unoccupied space to the region. Sears and Macy’s combined to close five department stores and 752,600 square feet. The Benny’s liquidation also resulted in 12 store closings and 245,200 square feet of new vacancy. Consequently, the net absorption was a nominal 22,100 square feet, leaving the region relatively stable. Nevertheless, store closings, particularly mall anchors, reduce foot traffic which inevitably results in future store casualties. Consequently we may see retail absorption trend toward the negative side in the immediate future.

Regional Submarkets: The West added the most retail space among the ten submarkets in Eastern Massachusetts, gaining 479,100 square feet. The West and the City of Boston experienced the largest percentage gains at 1.8%. Several new developments occurred in the West to boost its inventory, including Apex Center of New England, a retail and entertainment complex, which opened in Marlborough, Lakeway Commons, a Whole Foods-anchored project that opened in Shrewsbury, and Meadow Walk, another Whole Foods-anchored shopping center in Sudbury. In Boston, new Seaport development added to the inventory with openings including King’s, LL Bean, ShowPlace ICON Theatre, Tuscan Kitchen, and many others. Following a year in which Buzzards Bay vacancy was much improved, this submarket reversed course and now is back up to a rate of 13.5% compared to 12.1% in 2017, remaining the highest in the region. Several Toys R Us and Benny’s closings in Dartmouth, Swansea, Wareham, and Fairhaven were largely at fault. The South had the second highest vacancy rate, also impacted by Toys R Us and Benny’s closings in Brockton, Taunton, Raynham, as well as Best Buy and Sears closings at the Taunton Galleria. Vacancy rates were up across the board in every region but one, the City of Boston, which experienced a modest drop from 8.7% to 8.5%. The North Shore had the lowest vacancy rate, ﬁnishing the year at 7.6%

Vacancy by Tenant Size: Store closings showed little bias this year as all size classifications, except 200,000+ square feet, were negatively impacted. However, larger size categories took the brunt of the damage. The 25,000-49,999 square foot bracket, inclusive of both Toys R Us and Benny’s store closings, experienced the largest increase, jumping from 6.9% to 9.3%. In the 50,000-99,999 square foot classification, store closings by Shaw’s, Stop & Shop, Kmart, Regal Cinemas, and National Wholesale Liquidators were largely responsible for an increase from 5.0% to 6.5%. Three Sears’s closings and two Macy’s closings resulted in a vacancy rate rise in the 100,000-199,000 square foot segment from 3.4% to 4.7%. Nevertheless, three classifications all under 10,000 square feet remain the only size ranges saddled with double digit vacancy rates with the under 2,500 square feet tenant base hit with the highest level at 14.2%.

City & Town Rankings: The ﬁve communities encompassing the most retail space remain the same for the third year in a row, with Boston and Cambridge maintaining their dominance in ﬁrst and second position. Natick, Burlington, and Brockton follow. Among towns with a minimum of 500,000 square feet of retail space, Westwood made the leap from 32nd place in 2017 to the top spot in the region for lowest vacancy rate, coming in at a scant 1.6%. Filling the next three spots are North Andover, Stoneham and Somerset, which were not even in the top ten a year ago. Taunton had the highest vacancy rate in Eastern Massachusetts for the second straight year, ballooning more than 1,000 basis points to 30.1% as a result of the Sears and Best Buy closings at Taunton Galleria. Middleborough, now above the square footage threshold to be included in the rankings, placed second by highest vacancy rate. Lawrence and Swansea also ended the year with vacancy rates above 20%.

Conclusion: As the 2018 study year comes to a close, shopping patterns continue to shift toward online retailing at the expense of brink-and-mortar retail. Liquidations of retail chains, most notably Toys R Us, have contributed to a substantial rise in vacancy across the region. The end-of-year level was 9.5%, the highest it has been since a 9.7% vacancy rate was recorded in 2010. If there is a bright side to the disappointing result, it’s that store closings by only five retail firms were responsible for virtually the entire net gain in unoccupied space: Toys R Us, Sears Holdings, Macy’s, Benny’s, and National Wholesale Liquidators. These store closings should be of little surprise to anyone. It was really just a matter of when. It’s well documented that Toys R Us was saddled with debt, and online competition was the final nail in the coffin. Sears and Kmart are not expected to survive following many years of real estate disposition and lack of store renovations. Benny’s was an old and tired retailer, as was NWL, and neither could continue operation in the current retail climate. Finally, Macy’s is just part of the department store saga in mall locations and has to eliminate underperforming stores in order to improve its chances of long term visibility.

While there may be obvious reasons for the spike in vacancy this year, it does not explain away the fact that brick-and-mortar retailers and landlords remain under pressure to defend their turf against the continued onslaught from internet retailing. Walmart, for instance, is making vast strides on the e-commerce side of the business with huge capex investment in internet sales enhancement and acquisitions of online retailers. Both Walmart and Target have recently banded together with Google to drive the e-commerce sales component, entering what they hope is the beginning stages of developing a viable alternative to Amazon. Target and other dominant retailers such as Costco, Kohl’s, and Walgreens are making their merchandise available on Google Express and also connecting with Google Assistant to offer a convenient online ordering option.

At the same time, developers were making significant investments in new retail space during the past year, nearly offsetting the increased vacancy in Eastern Massachusetts. As previously mentioned, several significant projects in the region including Southcoast Marketplace in Fall River, Lakeway Commons in Shrewsbury, Meadow Walk in Sudbury, Wegmans at Natick Mall, and Life Time Athletic in Burlington all opened their doors to new shoppers this year. As noted, the Boston Seaport development also contributed considerably to the regional inventory with King’s, LL Bean, ShowPlace ICON Theater, and Tuscan Kitchen, among others. 20

With its Amazon-proof characteristics, Entertainment is also becoming a go-to category for either new development or vacancy replacements. In addition to Kings and ShowPlace ICON Theater, O’Neil Cinemas and Picture Show opened new movie theaters in the region, while Lucky Strike opened a new bowling facility. Altitude Trampoline Park opened two locations, one of which is a part of the new Apex Entertainment complex in Marlborough, offering a multitude of fun and game type tenants. And as difficult as it is to find replacements for vacant mall space these days, enclosed regional shopping centers in Eastern Massachusetts are seeing demand for new escape rooms, virtual reality concepts, and arcades among other entertainment venues. Significant growth activity is also occurring among Health and Fitness and Medical and Dental facilities.

This region continues to experience significant new development and store openings, which only reinforces the fact that a “retail apocalypse” has been greatly exaggerated. However, Eastern Massachusetts will continue to see the brick-and-mortar fallout from the strengthening shift toward online shopping. Many sophisticated retailers are forgoing physical growth in order to focus on efforts to enhance their online shopping experience and compete more effectively with Amazon. Shopping center developers need to also adjust to the digital world, and it appears that the type of new projects on 2018 are a reflection that caution signs have not gone unheeded.

CONCLUSIONS: The following conclusions are drawn based upon the data and observations cited above:

 As of the date of valuation, the economy is stable and growing, and beginning to pick up to a more robust pace than has been seen in the past five years. Employment conditions continue to improve  Consumer confidence is reaching record levels. Consumers are still expressing a post- election surge in confidence and expect the new administration to be very pro-business.  As of the writing of this report, the stock market is up 6.25% in terms of the S&P 500 index for 2018. The stock market finished up nearly 20% for 2017.  The real estate markets, both commercial and residential, have been quite strong in Greater Boston over the past three years, particularly within communities along and inside the Route 128 Beltway of Greater Boston. The markets at the outer edge of the Greater Boston region, west of I-495, have been positive as well, but not as robust as the markets close to the City of Boston.  Conditions in the local and regional retail real estate market continue to change rapidly as ‘bricks and mortar’ stores try to find a way to compete with online retail giants. The subject competes in the ‘NorthWest’ market of Greater Boston based upon the KeyPoint Report presented above. This submarket has an 8.4% vacancy for retail space as of mid 2018, up from 6.4% one year earlier. But despite the bad news from many old line retailers in the area, developer remain upbeat and continue to bring new product to the market to take advantage of the strong economy and high household incomes that Greater Boston offers.

Each of these factors has been taken into consideration with the valuation of the subject property.

NEIGHBORHOOD ANALYSIS

The subject is located at the intersection of Routes 27 and 111 in the Kelley’s Corner section of Acton. Kelley’s Corner is a 47+/ -acre section of Acton in the southern-central portion of the town. Route 2 is 0.45 miles north for both direction and 0.55 miles northeast for just the

21 eastbound side of the roadway. Acton Center and Town Hall are 1.4 miles north. I-495 is 4.75 miles west.

Traffic counts, per Mass Highway, for these two routes in front of the subject are 15,700 and 20,000 vehicles per day respectively

Demographics in the immediate area in play are as follows:

Kelley’s corner is one of the main commercial districts in Acton (Great Rd/Route 2A being the other). In addition to the subject property, other retail-commercial activity in the immediate area includes the three building, 142,000 sq ft Acton Plaza, at the northeast intersection of 27 & 111. This plaza features a TJ Maxx and Roche Brothers supermarket, as well as a Dunkin Donuts on an out parcel and a Not Your Average Joes restaurant. Across a private way from the Acton Plaza is the 27,000 sq ft Acton Professional Center. This property includes a three story office/retail building and a detached Santander Bank. On the first floor of the Acton- Professional Center is a Starbucks. Further south on Route 27 is the 34,300 sq ft Acton True Value Hardware Plaza.

The newest developments in the Kelley’s Corner area include a 2,900 sq ft TD Bank branch built in 2012 and a 13,800 sq ft CVS built in 2015 across from the Acton Plaza on Route 111.

Infrastructure improvements are scheduled for the Kelley’s Corner area that will take place in FY 2022 and includes use of both State and Federal funds. The work will include improving traffic patterns; widening intersections; and sidewalk re-construction.

Non commercial uses in the Kelley’s Corner area include the campus of Acton-Boxboro Regional High School, two elementary schools and the regional middle school. There are two moderate size condominium developments, and a 40,000 sq ft medical office building.

Favorable/Unfavorable Factors: Favorable factors for the subject location include:

 Good demographics including high median household income.  Good visibility.  Convenience to major highways and town center.  Moderately high traffic counts.  Existence of major national retailers already in the district such as CVS, Roche Brothers, TJ Maxx.

Unfavorable factors include:

 Lack of connectivity between properties. Retailers currently desire village type locations, like Market Street in Lynnfield, or 3rd Ave Burlington, where pedestrians can park and 22 walk to several retailers or restaurants. In Kelley’s Corner, each destination requires an automobile trip.  Lack of linkage; sidewalks are fragmented and not continuous.  A few properties in the district are unattractive and not well kept.  Traffic cycles at Route 27 can be quite long at times during the day.  The larger retail properties in the neighborhood, including the subject property, reflect a 1960’s and ‘70’s design in which buildings are set to the rear of a site and large parking lots are in front. Today, retailers desire the opposite, in which buildings are set along the frontage of a lot and parking is to the rear.

All features have been taken into consideration in the valuation of the subject property.

TAX DATA

The following is the current assessment and tax burden for the subject property:

Current FY 2018 Assessors Size of Fiscal Total Tax Rate FY 2018 Address Town Map Lot Parcel (ac) Year Assessment (per 1000) Taxes 252 Main Street Acton F3 139 1.88 2018 $ 3,566,600 $19.38$ 69,120.71 256 Main Street Acton F3 116 2.51 2018 $ 1,024,100 $19.38$ 19,847.06 252 Main Street Rear Acton F3 129-1 2.00 2018 $ 804,300 $19.38$ 15,587.33 Totals 6.39 $ 5,395,000 $ 104,555.10

Based upon the mandates of Chapter 59 of M.G.L., which calls for properties to be assessed at 100% of their fair market value, it is our opinion that the current assessment by the town is low. 23

ZONING DATA AND ANALYSIS

The subject is located in the Kelley’s Corner Zoning District of the Town of Acton. This is a business zoning district. Uses allowed in this zone include agriculture, single family dwelling, day care, retail, office, municipal, educational, or religious uses. Restaurants require a special permit in this zone.

Dimensional requirements include a minimum lot size of 10,000 sq ft; minimum frontage of 100 feet; maximum building height of 36 feet; and a maximum floor area ratio of 0.4 x the upland area of a parcel.

Parking requirements include one space per 300 sq ft of retail space; one space per 250 sq ft of office space; and two spaces per residential dwelling.

Special Provisions for the Kelley’s Corner (KC) District: If a proposed use in the KC zone exceeds 0.20 in floor area ratio, special provisions are required per Section 5.6 of the Acton Zoning Bylaw. We have included these Special Provisions in the Addenda to this report. They include requiring new developments exceeding 0.20 FAR to include sidewalks along all frontage and pedestrian plazas as defined in the bylaw. The intention is to have new developments look more like in-town villages, with buildings along the frontage portion of a development parcel with parking in the rear of the buildings; whereas at present, the opposite is in place at the subject property.

SEWER BETTERMENTS

Municipals sewer was brought to the Kelley’s Corner area in 2002. To help pay for the cost of installing the sewer, individual properties were assigned betterment fees. The fees or cost were based upon the sewer betterment units (SBU) assigned to each parcel. And in the KC zoning district and other village districts, SBU’s were assessed based on the FAR at the time and the total lot area (see section D10 2b(iii)).

The three parcels that comprise the subject property were assessed a total of 27.97 SBU. Each SBU equates to 300 GPD of flow.

The remaining sewer betterment costs for the subject property, broken down by tax parcel, is as follows:

F3-139 has a balance of: $ 49,121.54 F2-129-1 has a balance of: $ 52,292.40 F3-116 has a balance of: $ 65,535.27 Total $166,949.21

Redevelopment of the Subject/Sewer Issues: In the Kelley’s Corner Zoning district, the maximum floor area ratio allowed is 0.40. With 278,349 sq ft of land area, the maximum building area allowed on site is 111,340.

24 As discussed above, the subject was assessed 27.97 SBU. Each SBU equates to 300 gallons per day of sewer flow. So for the subject, as it stands, any current or future use would be capped at 8,391 gallons per day of sewer flow.

The current buildings on site equate to a 0.25 FAR. If the site were brought up to 0.40, there is the question about sewer capacity. If the proposed use exceeds the 8,391 gallons per day allowed, there would be a “privilege fee”, which is $12,311.52 per SBU (or per 300 GPD title 5 estimated flow).

DESCRIPTION OF THE SUBJECT PROPERTY

The following is a more detailed description of the complex:

Site

Land Area 6.39 acres or 278,349 sq ft. Frontage/Access 340'.45' on Main Street (Route 27). 156.67' on Massachusetts Ave (Route 111). Shape Irregular Topography The site slopes down gently from NW to SE or from the Mass Ave frontage to the Main Street frontage. Elevations range from a high of 232' above sea level at the Mass Ave frontage; to 218' at the center of the property in front of the Kmart building; down to 212' at the Main Street frontage. Flood Zone The site is not located in a designated flood hazard area per FEMA Panel #250 17C 352F dated July 7, 2014. A GIS flood map can be seen below. Wetlands Per local GIS maps, there are bordering vegetative wetlands along the southwest boundary line to the rear of the Kmart building on site. There appears to be less than 100 sq ft on total on site. Utilities Municipal water and sewer, natural gas, electric, and all telecommunication lines. Easements/ There is a 20' wide drainage easement that crosses the boundary line of the NW Rights of Way corner of the land off of Mass Ave. 1/2 of the easement is on the subject property and the other 1/2 is on the property at 442 Mass Ave (Map F2 Lot 120). Parking There are 286 lined surface parking spaces on site; to the front and side of the Kmart building and to the rear and side of the former McDonald's building. The lines are faded and not all of the site is lined. It is our estimate that an additional 25+/- spaces could be realized if all sections of the site were lined.

Flood Map Panel

26 Kmart Building

Gross Building Area 66,898 sq ft (includes 1,900 sf unheated garden shop). Rentable Building Area 64,998 sq ft Year Built 1971. Foundation Re-enforced poured concrete slab. Structure Masonry block and steel frame. Roof is flat and is comprised of steel trusses covered by corrugated metal decking. Façade, Walls The front façade is red brick. There is a 12' overhang over the front entrance to the building. This overhang has an asphalt shingle surface. The side and rear walls are painted masonry block. Roofs The roof is flat and covered with a rubber membrane material. Per municipal records, the roof was replaced in 2008. Windows Fixed thermopane windows in aluminum frames. Interior Finish In the sales floor area, the ceilings are acoustic suspended tiles. The flooring is vinyl tile and low pile wall to wall carpeting. Perimeter walls are drywall. In the stock room areas floors are polished concrete; ceilings are exposed trusses. Baths There are two bathrooms within the building; mens and womens; with multi stalls. Each has ceramic tile floors; tile wainscotting; suspended tile ceiliings. Each has multiple stalls and appears to be handicap accessible. Clear Height The exterior wall height is 20'. The interior clear height is 16-18' depending upon the section of the interior. Electrical 1200 amp/3 phase/4 wire. HVAC There are 6, rooftop, gas fired HVAC unit that provide heating and airconditioning to the interior of the building.

Plumbing Town water, town sewer. Sprinkler System Wet sprinkler system throughout the building. Loading On the northside of the building there are two 12' x 12' overhead door entries at ground level. To the rear of the building there is a tailboard height loading dock, 40' long and 5' deep. There are two 8' x 10' door entries off the loading dock. There are no load levelers on the loading dock.

Vacant, Former McDonald’s Building

The McDonald’s building was constructed in 1973 per municipal records. It is of masonry construction, built upon a re-enforced concrete slab. It is single story and contains 3,406 sq ft. The exterior walls are brick. The roof has a flat top, but sides that are ‘hip’ roof shaped covered by asphalt shingles.

The building has been vacant since 2009 and is in poor overall condition. There are roof leaks and broken walls, windows, and interior ceiling panels. Interior floor tiles are lifted and the slab itself is cracked.

The building is in poor overall condition and would likely be razed and/or replaced if the property were sold. In contributes nothing to the overall value of the property in our opinion.

27 Comments/Conclusion: The subject property is in average overall condition. The McDonald’s building should be replaced. The Kmart building received a new roof in 2006 and the interior has received upgrades over the past 15 years. The parking lot is worn and should be resealed and relined, but likely needs to be replaced in the next 5-10 years.

HIGHEST AND BEST USE

The Dictionary of Real Estate Appraisal, Sixth Edition defines highest and best use as "the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible and results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility and maximum profitability." The highest and best use is often referred to as the optimum use. Highest and best use must be analyzed from two perspectives; the highest and best use as vacant, and the highest and best use as improved. The following is a discussion of each:

For this valuation, we are to assume the lease to Kmart, which is reported to have approximately three years remaining, is not in place. Therefore, the property could be re- developed, or, if the highest and best use conclusion is for the Kmart building to remain, then the rental projection will be at ‘market’ and not based upon the Kmart lease.

With this premise in mind, the highest and best use conclusion for the subject comes down to two options in our opinion: First, raze all existing improvements and re-develop the site with up to 111,340 sq ft of new commercial space, which is the maximum allowed in the KC zoning district with its 0.40 FAR allowance. Or, second, keep the Kmart building while also trying to find a replacement for the McDonald’s building on site.

To determine which use produces the highest value, we completed two different valuations. The first is the value of the site as a 6.39 acre re-development site with potential for up to 111,340 sq ft. This assumes all buildings on site would be razed. We looked at seven different sales of commercial sites in the region used for re-development and concluded a value as a re-development parcel at $5,400,000.

We then estimated that value of the property assuming that the existing Kmart building was rented at market rents and terms, and that there remained potential for additional development by replacing the McDonald’s building. The question with this scenario is how much additional redevelopment would be possible if the Kmart building remained. With up to 111,340 sq ft possible on site, and the Kmart building at 64,998 sq ft, one might think 46,342 sq ft would be possible (111,340-64,998). But that would not be possible. The Kmart building requires 217 parking spaces under current zoning. There are 286 on site. A full 111,340 sq ft of space would require 371 parking spaces. There simply isn’t enough room to accommodate this many spaces if the maximum 111,340 sq ft is built on site, and the Kmart building remains. Rather, there appears to be enough parking capacity to accommodate an additional 20,700 sq ft building if the McDonald’s building is razed and replaced and the Kmart building remains. That square footage, 20,700 + 64,998 sq ft, or 85,700 sq ft would require 286 parking spaces, which is what exists on site. Yes, a larger building replacing the McDonald’s may eliminate some existing spaces, but as mentioned before, there is room on site for additional lined spaces to offset.

28 With that said, we estimated the value of the property under the second scenario at $7,000,000 by projecting a market rent for the Kmart building at $9 per sq ft on NNN terms, and projecting the value of the additional 20,700 sq ft of potential buildout at $50 per sq ft of allowed building area after a review of the seven land sales.

Therefore, the highest and best use choice comes to this:

1. Raze all existing improvements and re-develop the site with up to 111,340 sq ft of space, which produces a value of $5,400,000 or 2. Keep the existing Kmart building, rented at a market rent of $9 per sq ft, with the potential to develop an additional 20,700 sq ft of space on site, which produces a value of $7,000,000.

Based upon the analysis displayed above, it is our opinion that the highest and best use of the subject property is to keep the Kmart building and attempt to develop an additional 20,700 sq ft on site, which is both legally permissible and physically possible.

EXPOSURE TIME

The Dictionary of Real Estate, 6th Edition (Pg. 83), defines Exposure Time as:

“The estimated length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. Exposure time is a retrospective opinion based on an analysis of past events assuming a competitive and open market”. (USPAP, 2016-2017 ed.).

In other words, how long do we estimate it would have taken to sell the subject property at the estimated “as is” value of $7,000,000? Based upon a review of the periods it took to sell the comparable sales presented later in this report, it is our opinion that a reasonable exposure is 12 months.

29 APPRAISAL PROCESS

The methodology traditionally used for the valuation of real property is derived from three basic approaches to value; the Cost Approach, the Sales Comparison Approach and the Income Capitalization Approach. From the indicated values produced by each of these approaches and the weight accorded to each, an estimate of market value is made. The following is a brief summary of the method used in each approach to value.

COST APPROACH:

The Cost Approach is an analysis of the physical value of a property; that is the market value of the land, assuming it were vacant, to which is added the depreciated value of the improvements to the site. The latter is estimated to be the reproduction cost of the improvements less accrued depreciation from all causes.

SALES COMPARISON APPROACH:

The Sales comparison Approach is based upon the principle of substitution, that is, when a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property assuming no costly delay in making the substitution. Since few properties are ever identical, the necessary adjustments for differences between comparable properties and the subject property are, to a certain extent, a function of the appraiser's experience and judgment.

INCOME CAPITALIZATION APPROACH:

The Income Capitalization Approach is an analysis of the subject property in terms of its ability to produce an annual net income in dollars. This estimated net annual income is then capitalized at a rate commensurate with the relative certainty of its continuance and the risk involved in ownership of the property.

VALUATION METHODS USED: As touched upon in the Highest and Best Use presented previously, we completed two different valuations for this analysis, the first of the site as a vacant redevelopment site and second, of the property “as is”, retaining the existing Kmart building and have the potential for up to 20,700 sq ft of additional space on site.

To complete the first valuation, we utilized a sales comparison analysis involving seven sales of commercial re-development parcels. To complete the “as is” valuation we utilized an Income Approach primarily.

Because of the age of the subject improvements, a Cost Approach was not applicable. And due to the lack of comparable sales data, a Sales Comparison Approach involving review of sales of large, single tenant retail buildings was not possible.

LAND VALUATION

We completed a valuation of the land-only portion of the site. It can be argued that without an estimate of the underlying land value of any property, a proper highest and best use analysis cannot be completed. In this appraisal, where the potential for the property may have included re-development of the site, a land valuation is essential.

In order to estimate the value of the land-only, we searched for recent sales of commercial development/re-development sites in the region for comparison to the 6.39 acre subject parcel.

Sales of this type were quite rare. Because of this we extended the search area and search period beyond desired guidelines.

This search produced seven sales considered as possible comparisons to the subject. The following are details on each:

31 Grantee LLC/ Franklin Framingham LLC Pond BaystoneFarm Inc./ Macy'sEast, Bedford LLC ER LLC/ Realty OMJ Markets Super Demoulas Trust/ CaswRealty ell LLC Lanes Wamesit Amusements/ National Grantor/ Company/ Gutierez Ave LLC Winthrop 141 APEX WR 1031 LLC 1031 WR APEX LLC/ Hang Nam LLC Properties NJLJ

M1 CIC Zoning Business Business1 Business1 Commercial Commercial Acre Price PerUsable 38.39 $562,852 $466,667 64.58 $212,500 70.82 $750,000 183.24 183.24 $771,757 301.95 $891,720

FF to Ac FF 72.22 196.83 $285,088 Frontage 1,115.96 1,115.96 325.00 1,392.00 897.55 1,023.07 1,023.07

2,815.73 2,815.73 1,139.46 1,139.46

Acreage 26.65 6.09 4.50 3.14 40.00 16.00 4.56 Acreage Area Sq Ft of Ft Sq PricePer $55.34 6.09 $46.67 4.50 $98.25 4.61 $57.78 4.56 Area(sf) Allowed Allowed Date 8-Jan-15 45,000 13-Oct-16 160,700 13-Oct-16 160,700 $93.34 26.65 16-Jun-16 475,000 16-Jun-16 475,000 $17.89 43.60 21-Dec-17 84,932 15-Dec-16 28,500 15-Aug-16 22,500 14-Aug-15 267,432 $44.87 16.09 Sale Sale Building Building Total Usable Price 1,300,000 $ $ $ $ $ $ $ $ $ $

Tow n 70418/421 sq ft 53,000 The Center. of north Framingham Ave Wayte coner Franklin, the of and at Mt. Plaza Wayte of former Mt. the Site of time at FAR restaurant complex. retail, use residential, mixed a razed. Buyer has planning is been 1960's, the in built plaza, w w sale sew and ater Municipal as0.32. er. 8781/363 purchased Site Bedford, NH. in 293 and 3, 101, of intersection the Routes at building of Marsh former Macy's/Jordan Site free a restaurant and have standing Macy'sbuilding Former of lifestyleMain". a center for& know development as n "Market space. entertainment restaurant, office,and retail, cinema include razed. Will bee Salem,NH Doc#47063 Mall. property. Across Track Race Rockingham from of 15,000,000 Rockingham the acre ofpartis 170 site redevelopment larger, the This acre parcel 26.65 space. This hotel and sq ft residential of office, dealership, auto million retail, 2.7 w site include Entire ill w sfapprovedis forMuni sew ater, sq ft 80,000 an 160,700 spacesupermarket. ofincludes purchasedthat retail by er.DeMoulas Tew ksbury28753/1 that sf complex use 45,000 retail mixed a into for off located Purchased site re-development 38. of Route motel Former 2,100,000 w sew ater, Municipal self and bow a storage complex. alley included er. ling 14925/246 67444/575 w building. sq ft Law formerly32,000 the improved a at cinema ith interchange Site Andover/495 rence-North 114 line. Route the at Site w of new 3 razedone sf along w and 6,500 sq ith officeftbuildings; 20,000 a is medical, hich buiilding 2,000 a and cinema sale, Post w sew ater, Municipal 114. er.Route and I-495 both from site visible w Highly sfbuilding eredeveloped. retail Site is 1 mile w est of a Route 495 interchange on Route 20. It had been underimproved w few a underimproved been ith had It flexconcrete20. block w Route on interchange 495 estmile of 1 is Route a Site space. Price sq of ft 475,000 for of entertainment Purchased office,and development restaurant, hotel buildings. retail, wis Municipal costs acres approvals. 40 remainder reflectsall etlands/floodplain. ofusable, buyer the paid gaining that wsew and ater er. Groton 67812/313 w Site aspreliminaryly meet. 119 w and 225 Groton in Route here Road Pond Sandy cornerand at of of land Rd Boston Parcel w & ater Municipal site. on have since vetdeveloped a clinic and Donuts sq ft. 22,500 Dunkin totaling approvedfor buildings 4 sew er. Address (Bk/Pg): Ref Legal DESC/COMMENTS: (Bk/Pg): Ref Legal DESC/COMMENTS: (Bk/Pg): Ref Legal DESC/COMMENTS: (Bk/Pg): Ref Legal DESC/COMMENTS: COMMERCIAL LAND SALES LAND COMMERCIAL (Bk/Pg): Ref Legal

Legal Ref (Bk/Pg): Ref Legal DESC/COMMENTS: DESC/COMMENTS: (Bk/Pg): Ref Legal DESC/COMMENTS: 2 BostonPost Ames& St Marlborough 8,500,000 5Broadw S. 56 ay 6Main 434 Street 7Winthrop 141 Ave Law rence 2,800,000 1Franklin 444-480 Street Framingham 4,700,000 3Boston 788 Road 4River RoadS. 125 Bedford,NH 12,000,000 Sale

32 Land Sales Analysis (cont.)

A summary of these sales can be found below. We have compared each to the subject both on a price per usable acre basis and a price per sq ft of allowed building area or price per F.A.R, with 6.39 acres and 111,340 sq ft being the potential for the subject respectively:

REDEVELOPMENT ACREAGE SALES SUMMARY Date of Valuation 17-Aug-18 Price Per Time Time Time Adjustment 4% Sq Ft of Adjusted Adjusted Allowed Allowed Price Price Sale Sale Building Building Total Per Usable Per Usable Sale Address Town Price Date Area (sf) Area Acreage FAR Acreage Frontage FF to Ac $/Ac Acre 1 444-480 Franklin Street Framingham$ 4,700,000 21-Dec-17 84,932 $55.34 6.09 56.79$ 6.09 1,115.96 183.24 $771,757 791,975$ 2 Boston Post & Ames Street Marlborough$ 8,500,000 16-Jun-16 475,000 $17.89 43.60 19.45$ 40.00 2,815.73 64.58 $212,500 230,948$ 3 788 Boston Road Groton$ 1,300,000 15-Aug-16 22,500 $57.78 4.56 62.41$ 4.56 897.55 196.83 $285,088 307,962$ 4 125 S. River Road Bedford, NH$ 12,000,000 14-Aug-15 267,432 $44.87 16.09 50.28$ 16.00 1,139.46 70.82 $750,000 840,349$ 5 56 S. Broadw ay Salem, NH$ 15,000,000 13-Oct-16 160,700 $93.34 26.65 $ 100.23 26.65 1,023.07 38.39 $562,852 604,373$ 6 434 Main Street Tew ksbury$ 2,100,000 8-Jan-15 45,000 $46.67 4.50 53.40$ 4.50 325.00 72.22 $466,667 534,035$ 7 141 Winthrop Ave Law rence$ 2,800,000 15-Dec-16 28,500 $98.25 4.61 $ 104.81 3.14 1,392.00 301.95 $891,720 951,344$ Subject 252-256 Main Street Acton ------111,340 ------6.39 497.12 77.80 ------

The sales have first been adjusted for time, to take into consideration the appreciating market conditions in the regional real estate market. We used a 4% annual adjustment based upon a review of several recent surveys and studies. The time adjusted indications are shown in the last column and the 6th to last column above.

All of the sales were of sites being purchased for re-development. All came requiring some form of site clearing/demolition of existing buildings. All had access to municipal water and sewer, similar to the subject.

The first sale listed above is similar to the subject in size and location. The buyer is currently seeking to gain approvals for a development with a much higher density that the 0.32 FAR allowed in that zoning district. However, the price paid was based upon the 0.32 FAR.

Sale #2 is close by to the subject, located in Marlborough. It is a much larger site and a much larger scale development. The sale price was based upon the developer needing to gain all approvals for this development. That is the reason for the relatively low indications of value in comparison to the other sales.

Sale #3 is smaller than the subject and with a lower development potential at just 0.11 FAR. That is the reason for the low price per usable acre. It is inferior to the subject in terms of location as well.

Sales #4 and #5 are just over the MA border into southern NH. Both are part of large scale re-developments that are trying to capture the latest ‘lifestyle’ trend in retail development.

Sale #6 is inferior to the subject in terms of location. It also sold with just a 0.23 FAR potential versus 0.40 for the subject.

Sale #7 on the North Andover-Lawrence line has a superior visibility than the subject. It is prominent from I-495 and Route 114. It sold at $104.81 per sq ft of FAR which is rather high. But the buyer indicated that it was their choice to only develop 28,500 sq ft on site and that the land actually could have accommodated more.

33 Of the seven sales, #1, #3, #4 and #5 were given most consideration as they were most similar to the subject in terms of location and size.

It is our opinion that appropriate indicators for the subject site as though vacant are $50 per sq ft of FAR and $800,000 per usable acre.

The value of the site as vacant, as of August 17, 2018 is as follows:

Price Per Usable Indicated Acre Price Usable Land Area (acres) 6.39 x$ 800,000 = $ 5,112,000 Price Per Allowed Indicated Sq Ft Price Allowed Building Area (sf) 111,340 x$ 50.00 = $ 5,567,000

ROUNDED$ 5,400,000

34 INCOME APPROACH

The Direct Capitalization method has been utilized in the presentation of the Income Approach to value. This is a multi step technique which first involves an analysis of any leases that affect the property and their relation to current market activity, followed by a projection of gross income and operating costs over the next 12 months. The result is an estimate of net operating income for the next 12 months. This NOI is then capitalized using a rate commensurate with current market conditions, investor expectations, and anticipated investor reaction to the subject property, in order to derive the present value for the property being analyzed.

This approach is based upon our opinion of the highest and best use of the subject property. And that is, to retain the existing Kmart building and with the potential for up to 20,700 sq ft of additional space on site.

Per the terms of this assignment, we are to assume that the Kmart lease is not in effect. Rather, our analysis is of the fee simple rights and we will need to project a market rent for the Kmart building. In order to do this, we have next completed a survey of retail space rental activity involving large tenant/anchor spaces in the region. Due to the scarcity of this type of data, both the search area and search period have been extended beyond desired guidelines.

The search produced nine rental comparables that we now compare to the subject building:

35 Comments LeaseHiglandthe at Commons shopping centerin Hudson, Route of near62, anoff I-495 intersection. Building MA was newand complex is newer, built inlatethe 2000's. LeaseHiglandthe at Commons shopping centerin Hudson, Route of near62, anoff I-495 intersection. Building MA was newand complex is newer, built inlatethe 2000's. standingFree building on5.67 acres built in1974. Originally supermarket.a Building remodeled in2005 and 2013. Used asfitness center. standingFree building constructed in1993 inRoutethe 30 retailcorridor. Building on10.97 acres. Leaseportiona anof 80,000 of buildingsq ft onRoute in1 Norwood.Building then had been occupied MVP, by DeCathilonsports decades. for FormerShop& Stopspace inSouthwind inHyannis. Plaza Landlordpaid $350,000 costs; inTI tenantpaid reporteda $3million. Single anchor story space the of inoff plazaa Route132 strip.Tenant pays pro sharerata and taxes r.e. of charges. $1.32psf inCAM Rockingham at Mall The is anenclosed centerlocated near line. Dick's portionatookexisting the of MA Sears the store. allTenantpaystheir for utilities of charge mall to and CAM a aretaxesincluded. operator, r.e. but wereTaxesbe report to in$1.25the psf range,making this equivalent$8 on to NNN terms. Largeanchor space inmultia tenantbetweenplaza Route 30and Route in9Framingham. Building was originally constructedin1969. Spacelocated inSherwood onRoute Plaza in9 TheNatick. isplaza nearand Natickthe Mall Shoppers World.

Net Net Net Net Net Net Net Net Terms Leased

Rent Steps Rent

+CPI6-10 Yrs. +CPI+CPI6-10 Yrs. 11-15 Yrs. +CPI11-15 Yrs. $15.7516-20 Yrs. $10.186-10 Yrs. Gross Initial Rent/SF Initial

$13.75 6-10 Yrs. $14.25 $15.00 6-10 Yrs. 11-15 Yrs. $16.50 $18.256-10 Yrs. 11-15 Yrs. $12.606-10 Yrs. + eight+ 5 $12.2621-25 Yrs. yr options yr Term(years) Leased(SF) Area Date

BJ's 1-Oct-13 114,481 15Yrs. $15.001-5 Yrs. Fully Tenant Tenant Fitness Wholesale

ANCHOR STORE RENTS STORE ANCHOR Natick Hudson Hudson Danvers Property Norwood Salem,NH Framingham Wholesale Framingham Barnstable,MA 30Prince Street BostonNorth 1-Feb-15 44,908 15Yrs. $9.63 2%annually Fully SouthwindPlaza Kohl's 1-Oct-13 54,855 20Yrs. $10.951-20 Yrs. Fully 26StreetWhittier Mall at Rockingham at Mall DicksSporting 1-Jul-14 78,990 10.8Yrs. $9.251-5 Yrs. Modified 212Coolidge Street Maxx TJ 1-May-14 24,000 10Yrs. $12.501-5 Yrs. Fully 99Rockingham Blvd 341Cochituate Road AutoZone 1-Sep-16 63,697 15Yrs. $18.001-5 Yrs. Fully 65Independence Drive 1274-1298Worcester St Fitness LA 30-Jul-15 41,000 15Yrs. $19.001-5 Yrs. Fully 1 Highland1 Common East BJ's 1-Oct-14 117,924 20Yrs. $12.001-5 Yrs. Fully 560-570BostonTpke Prov Savers 30-Aug-13 43,000 10Yrs $12.001-5 Yrs. Fully

No. 1 2 3 4 5 6 7 8 9 36 Rental Analysis (cont.)

As with each of the comparable rentals, we project the Kmart building to lease on fully net or NNN terms. This means that in addition to base rent, the tenant would be responsible for payment of all operating costs, including real estate taxes, insurance, and utilities.

The leases range in starting rent from $9.63 to $19 per sq ft on NNN terms. Each of the leases involved the tenant getting a space in new or excellent physical condition. This is in contrast to the subject building, which is in average overall condition.

Rentals #1 and #2 are at a newer complex in nearby Hudson, MA. Both are superior to the subject in terms of condition.

Rental #3 is superior to the subject in location and condition.

Rentals #4, #7, #8 and #9 are superior to the subject in terms of both location and condition. The remaining rentals are superior to the subject in condition, but similar in location.

Based upon this analysis, it is our opinion that the subject rent should be at the lower end of the range offered by the comparable rentals. It is our opinion that the market rent for the subject Kmart building as of August 17, 2018 is $9.00 per sq ft on NNN terms. We have used this figure in our projections below.

Reserve for Vacancy & Credit Loss – We have taken a vacancy allowance of 10% of the gross income as a hedge against potential rental loss due to vacancy or bad credit. This is slightly higher than the current 8.4% vacancy that exists in the Northwest suburban market per the KeyPoint Partners survey presented earlier. Given the condition of the building, a slightly higher vacancy is warranted in our opinion.

Management – We have taken an allowance of 3% of the effective gross income to account for management expenses.

Reserves –We have also taken a $0.50 per sq ft reserve for replacement of major capital items that could include the roof, HVAC, parking lot, and major tenant build out items.

Capitalization Rate Selection -Ideally, the selection of a capitalization rate should come from sales in the marketplace in which properties similar to the subject sold, leased at the time of sale. Therefore, we have examined the following recent examples of capitalization rates produced from the following examples, along with the excerpts of several investor surveys:

37 Property Sale Sale Building $ per Indicated Year Address Type Price Date Size (sf) Sq Ft Cap Rate Built/Reno'd 1. 100 Pow dermill Road, Acton Strip Retail$ 16,300,000 4-Aug-17 75,000 $ 217 6.50% 85/'96 2. 796 Boston Post Rd, E, Marlboro Strip Retail$ 2,478,650 7-Nov-17 24,616 $ 101 6.50% 1986 3. 500 Boston Tpke, Norw ood Strip Retail$ 7,500,000 22-Dec-17 30,000 $ 250 7.50% 1989 4. 568 Main Street, Leominster Strip Retail$ 2,550,000 15-Sep-17 18,205 $ 140 7.50% 1963 5. 112 Mall Road, Burlington Strip Retail$ 14,750,000 2-Oct-17 31,623 $ 466 5.90% 1973 6. 170 Oak Street, Brockton Strip Retail$ 3,900,000 15-Feb-18 42,848 $ 91 10.00% 1972 7. 571 Boston Tpke, Shrew sbury Strip Retail$ 11,950,000 11-Dec-17 109,100 $ 110 9.32% 2002 8. 790-800 Waverly, North Andover Strip Retail$ 15,200,000 6-Mar-18 25,745 $ 590 6.52% 2007

Property Type Low High Average Korpacz National Net Lease Market Retail 5.50% 8.50% 6.60% 2Q/2018 Korpacz National Regional Mall Retail 4.00% 10.00% 6.30% 2Q/2018 Korpacz National Power Center Market Retail 5.25% 9.00% 6.65% 2Q/2018 Korpacz National Strip Center Retail 4.00% 9.00% 6.36% 2Q/2018

Based upon these sources, a rate of 8.00% has been used in this analysis. This is on the higher end of the range from the data above. However, given the condition of the subject and that we are not assuming a long term lease is in place, a higher rate is justified.

Income Approach Summary: The projected net operating income (NOI) of $476,435 has been capitalized at the 8.00% rate discussed above. This produces an initial value indication of $5,995,442. However, the reader will recall that per the highest and best use conclusion, the value of the property “as is” includes the rental potential of the Kmart building and the value of the excess buildout capacity of site of 20,700+/- sq ft.

Using the seven comparable land sales and the analysis completed earlier, we value this excess buildout capacity at $50 per sq ft of floor area allowed, or $1,035,000. We add this to the initial indication of value to produce the overall value of the subject property, “as is”, via the Income Approach, as of August 17, 2018 of $7,000,000.

The following is our pro forma income statement and capitalization summary:

38 PRO FORMA INCOME & EXPENSE STATEMENT & CAPITALIZATION SUMMARY 252-256 Main Street Rentable Building Area (sf) 64,998 Acton, MA Date of Valuation 17-Aug-18 Projected Rent Per Annual INCOME Area Sq Ft Rent Kmart Building 64,998 sf x 9.00$ $ 584,982

Gross Potential $ 584,982 less Vacancy & Collection Loss @ 10.0% $ (58,498)

Effective Gross Income $ 526,484 EXPENSES Management @ 3% of GPI $ 17,549

Reserves for Replacements 64,998 sf x 0.50$ $ 32,499

Total Expenses $ 50,048

Net Operating Income $ 476,435

Capitalized @ 8.00%

Preliminary Indication of Value $ 5,955,442 plus

Additional FAR Value of Additional Buildout 20,700 sf x $ 50 per sf of$ 1,035,000 FAR Indicated Value of Entire 6.39 acre property $ 6,990,442

ROUNDED $ 7,000,000

39 RECONCILIATION AND VALUE CONCLUSION

The final step in estimating the market value of the subject property is a correlation of the value from each of the approaches utilized in the appraisal process. As touched upon in the Highest and Best Use presented previously, we completed two different valuations for this analysis, the first of the site as a vacant redevelopment site and second, of the property “as is”, retaining the existing Kmart building and have the potential for up to 20,700 sq ft of additional space on site.

To complete the first valuation, we utilized a sales comparison analysis involving seven sales of commercial re-development parcels. The sales were compared to the subject site as though vacant both on a price per usable acre basis and a price per sq ft of allowed building area basis. After analysis a value of the site as thought vacant of $5,400,000 was estimated.

To estimate the value of the property “as is”, assuming the Kmart lease is not in effect, we utilized an Income Approach primarily. We compared nine comparable rental transactions to the subject building and projected a market rent for the space. We used an 8% capitalization rate to produce an initial indication of value. To this, we added the estimated value of the 20,700+/- sq ft of buildout potential that exists on site, if the Kmart building is retained, to produce an overall indication of value of $7,000,000.

Based upon the methods of valuation utilized, it is our opinion that the market value of the fee simple interest in the subject property as of August 17, 2018 is:

SEVEN MILLION ($7,000,000) DOLLARS

40 CERTIFICATION

We certify that, to the best of our knowledge and belief,...  the statements of fact contained in this report are true and correct.  the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal unbiased professional analyses, opinions, and conclusions.  we have no present or prospective interest in the property that is the subject of this report, and we have no personal interest or bias with respect to the parties involved.  our compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of this report.  we have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.  our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute.  the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.  Mr. Bowler and Mr. Avery are currently certified under the voluntary continuing education program of the Appraisal Institute.  Mr. Bowler made a personal inspection of the property that is the subject of this report. Mr. Avery did not inspect the subject property.  no one provided significant professional assistance to the persons signing this report.  the appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.

Based upon the data presented above, it is our opinion that the market value of the fee simple interest in the subject property, subject to the definitions, assumptions and limiting conditions and certifications set forth in the attached report, as of August 17, 2018 is:

SEVEN MILLION ($7,000,000) DOLLARS

Christopher H. Bowler, MAI, CRE Jonathan H. Avery, MAI, CRE Massachusetts Certified General Massachusetts Certified General Real Estate Appraiser #495 Real Estate Appraisers #26

ADDENDA

SUBJECT PROPERTY DEED

RECORDED PLAN OF LAND

ZONING BY-LAW EXCERPTS

KELLEY’S CORNER SPECIAL PROVISIONS; SECTION 5.6

COMPARABLE LAND SALES LOCATION MAP

COMPARABLE RENTALS LOCATION MAP

APPRAISAL LEXICON & ASSUMPTIONS, LIMITING CONDITIONS

APPRAISAL LEXICON MARKET VALUE

"The most probable price, which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably and assuming the price is not affect by undue stimulus. Implicit in this definition is consummation of a sale as of a specified date and passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are motivated; 2. Both parties are well informed or well advised and each acting in what he considers his own best interest; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in terms of cash in U.S. dollars, or in terms of financial arrangements comparable thereto; and 5. The price represents the normal consideration for the property sold unaffected by special or creative financing, or sales concessions granted by anyone associated with the sale." (1)

FEE SIMPLE ESTATE

Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat. (2)

HIGHEST AND BEST USE

The reasonably probable use of property that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility and maximum productivity. (3)

LEASED FEE INTEREST

The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires. (4)

MARKETING TIME

An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. (5)

(1) FIRREA 12 CFR Part 323.2. (2) The Dictionary of Real Estate Appraisal, Appraisal Institute, Chicago, IL, 2015, Sixth Edition - Page 90. (3) Ibid. - 109. (4) Ibid. - 128. (5) Ibid. - 140.

MARKET RENT

The most probable rent that a property should bring in a competitive and open market reflecting the conditions and restrictions of a specified lease agreement, including the rental adjustment and revaluation, permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements (TIs). (6)

EXPOSURE TIME

1. The time a property remains on the market. 2. [The] estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. Exposure time is a retrospective opinion based on an analysis of past events assuming a competitive and open market. (USPAP, 2016-2017 ed.) (7)

PROSPECTIVE OPINION OF VALUE

A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that have not yet achieved sellout or a stabilized level of long-term occupancy. (8)

RETROSPECTIVE VALUE OPINION

A value opinion effective as of a specified historical date. The term retrospective does not define a type of value. Instead, it identifies a value opinion as being effective at some specific prior date. Value as of a historical date is frequently sought in connection with property tax appeals, damage models, lease renegotiation, deficiency judgments, estate tax, and condemnation. Inclusion of the type of value with this term is appropriate, e.g., “retrospective market value opinion.” (9)

(6) Ibid. - 140. (7) Ibid. - 83. (8) Ibid. - 180. (9) Ibid. - 201.

ASSUMPTIONS AND LIMITING CONDITIONS

This appraisal report has been made with the following general assumptions:

1. This is a narrative Appraisal Report which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice for an Appraisal Report. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser’s file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraisers are not responsible for the unauthorized use of this report.

2. No responsibility is assumed for the legal description or for matters including legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated.

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

4. Responsible ownership and competent property management are assumed.

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

6. All engineering is assumed to be correct. The plot plans and illustrative material in this report are included only to assist the reader in visualizing the property.

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

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

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

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

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

This appraisal report has been made with the following general limiting conditions:

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

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

5. Any value estimates provided in the report apply to the entire property, and any proration or division of the total into fractional interests will invalidate the value estimate, unless such proration or division of interests has been set forth in the report.

6. The forecasts, projections, or operating estimates contained herein are based upon current market conditions, anticipated short-term supply and demand factors, and a continued stable economy. These forecasts are, therefore, subject to changes in future conditions.

QUALIFICATIONS

QUALIFICATIONS OF CHRISTOPHER H. BOWLER REAL ESTATE APPRAISER AND CONSULTANT

EDUCATION

 BA Economics, Union College, Schenectady, New York 1987

 Appraisal Institute Course SPP Standards of Professional Practice Course 1A-1 Basic Appraisal Principles, Methods and Techniques Course 1A-2 Basic Valuation Theory and Techniques Course 8-1 Residential Valuation Course 1B-A Capitalization Theory & Techniques Part A Course 1B-B Capitalization Theory & Techniques Part B Course 550 Advanced Applications Course 410 Standards of Professional Practice Part A Course 420 Standards of Professional Practice Part B Course 540 Report Writing & Valuation Analysis

 Argus Software Valuation DCF 2 Day Training; 11/09

PROFESSIONAL AND TRADE AFFILIATIONS  The Counselors of Real Estate 2015 CRE Designation #13359

 Appraisal Institute 1992 Senior Residential Appraiser - SRA Designation 2000 Member of Appraisal Institute - MAI Designation #11564 2002-4 Director, Massachusetts Chapter 2005 Secretary, Massachusetts Chapter 2006 Treasurer, Massachusetts Chapter 2007 Vice President, Massachusetts Chapter 2008 President, Massachusetts Chapter

 Massachusetts Certified General Real Estate Appraiser License #495

PROFESSIONAL EXPERIENCE

Qualified expert witness; Land Court of Massachusetts. Qualified expert witness; Massachusetts Appellate Tax Board.

BUSINESS EXPERIENCE

Presently the Senior Associate and Chief Valuation Officer of Avery Associates, Acton, Massachusetts. Avery Associates handles a wide variety of real estate appraisal and consulting assignments. Mr. Bowler has prepared appraisals of apartment complexes, office buildings, industrial buildings, shopping centers, research and development facilities, hotels/motels, golf courses, restaurants, laboratory-life sciences buildings, medical office buildings, auto dealerships, truck terminals, warehouses, bank branches, commercial and industrial condominium units and buildings, lumber yards, service stations, industrial mill buildings, and cranberry bogs.

Mr. Bowler's experience also includes the appraisal of large tracts of land, conservation restrictions, proposed developments; condominium projects, mixed use retail and residential, and traditional single family subdivisions. Mr. Bowler has prepared market studies and feasibility analyses for proposed developments of both residential and commercial projects. Prior to joining Avery Associates in 1992, Mr. Bowler was employed in the following manner:

1987-1992 Real Estate Appraiser Edward W. Bowler Associates Waltham, Massachusetts

1987 Research Associate, New York State Department of Transportation Albany, New York

BUSINESS ADDRESS Avery Associates 282 Central Street Post Office Box 834 Acton, MA 01720-0834 Tel: 978-263-5002 Fax: 978-635-9435 [email protected]

QUALIFICATIONS OF JONATHAN H. AVERY REAL ESTATE APPRAISER AND CONSULTANT

EDUCATION BBA University of Massachusetts, Amherst, Massachusetts Graduate of Realtors Institute of Massachusetts - GRI American Institute of Real Estate Appraisers Course 1-A Basic Appraisal Principles, Methods and Techniques Course 1A-B Capitalization Theory and Techniques Course 2 Basic Appraisal of Urban Properties Course 6 Real Estate Investment Analysis Course 410/420 Standards of Professional Practice

PROFESSIONAL AND TRADE AFFILIATIONS The Counselors of Real Estate 1985 - CRE Designation #999 1993 - Chairman, New England Chapter 1995 - National Vice President 1999 - National President Appraisal Institute 1982 - Member Appraisal Institute - MAI Designation #6162 1975 - Residential Member - RM Designation #872 1977 - Senior Residential Appraiser - SRA Designation 1981 - Senior Real Property Appraiser - SRPA Designation 1986-1987 - President, Eastern Massachusetts Chapter 1992 - President, Greater Boston Chapter 1995 - Chair, Appraisal Standards Council 1996-1998 - Vice Chair, Appraisal Standards Council Massachusetts Board of Real Estate Appraisers 1972 - MRA Designation 1981 - President of the Board Royal Institution of Chartered Surveyors 2005 - FRICS Designation Affiliate Member, Greater Boston Real Estate Board Licensed Real Estate Broker - Massachusetts 1969 Massachusetts Certified General Real Estate Appraiser #26 New Hampshire Certified General Real Estate Appraiser #NHGC-241

BUSINESS EXPERIENCE Mr. Avery is Principal of the firm of Avery Associates located in Acton, Massachusetts. Avery Associates is involved in a variety of real estate appraisal and consulting activities including: market value estimates, marketability studies, feasibility studies, and general advice and guidance on real estate matters to public, private and corporate clients. Mr. Avery has served as arbitrator and counselor in a variety of proceedings and negotiations involving real estate. During 1993, he served as an appraisal consultant for the Eastern European Real Property Foundation in Poland. He has been actively engaged in the real estate business since 1967 and established Avery Associates in 1979. Prior to his present affiliation, Mr. Avery served in the following capacities:

1978-1979 Managing Partner, Avery and Tetreault, Real Estate Appraisers and Consultants 1975 -1978 Chief Appraiser, Home Federal Savings and Loan Association Worcester, Massachusetts 1972-1975 Staff Appraiser, Northeast Federal Saving and Loan Association Watertown, Massachusetts 1971-1972 Real Estate Broker, A. H. Tetreault, Inc. Lincoln, Massachusetts

TEACHING EXPERIENCE Instructor, Bentley College, Continuing Education Division, 1976-1982; Appraisal Methods and Techniques Computer Applications for Real Estate Appraisal Approved Instructor Appraisal Institute - since 1982 Chapter Education Chairman 1986-1987 Seminar Instructor; Massachusetts Board of Real Estate Appraisers since 1981 Certified Appraisal Standards Instructor-Appraiser Qualifications Board

PROFESSIONAL EXPERIENCE Qualified expert witness; Middlesex County District Court and Superior Court, Essex County Superior Court, Norfolk County Superior Court, Plymouth Superior Court, Worcester County Probate Court, Federal Tax Court, Federal Bankruptcy Court, Appellate Tax Board of Massachusetts and Land Court of Massachusetts. Member, Panel of Arbitrators - American Arbitration Association, National Association of Securities Dealers Regulation.

Property Assignments Include: Land (Single Lots and Subdivisions) Historic Renovations One to Four Family Dwellings Movie Theater Apartments Conservation Easements Residential Condominiums Hotels and Motels Office Buildings Shopping Centers Restaurants Golf Courses Industrial Buildings Churches Racquet Club Gasoline Service Stations Petroleum Fuel Storage Facility Farms Lumber Yard Office Condominiums School Buildings Automobile Dealerships

BUSINESS ADDRESS Avery Associates 282 Central Street Post Office Box 834 Acton, MA 01720-0834 Tel: 978-263-5002 Fax: 978-635-9435 [email protected]

AVERY ASSOCIATES REPRESENTATIVE LIST OF CLIENTS FINANCIAL INSTITUTIONS CORPORATIONS

Avidia Bank Avalon Bay Communities Bank of New England Boston Medflight Belmont Savings Bank Concord Lumber Corporation Berkshire Bank Dow Chemical Company Cambridge Savings Bank Exxon Mobil Company East Boston Savings Bank Fidelity Real Estate Enterprise Bank & Trust Genzyme/Sanofi Farm Credit East John M. Corcoran & Co. Main Street Bank Marvin F. Poer and Company Middlesex Federal Savings McDonald’s Corporation Middlesex Savings Bank Minuteman Airfield, Inc. Fidelity Bank PriceWaterhouseCoopers North Shore Bank Sun Life Assurance Company Rollstone Bank & Trust The Mathworks, Inc. Salem Five Cent Savings Bank Toyota Financial Services Seneca Insurance Co. U.S. Postal Service TD Bank, N.A. W. J. Graves Construction Co., Inc. Webster Five Cents Savings Bank Zoll Medical Corp. Workers Credit Union

PUBLIC SECTOR/NONPROFIT LAW FIRMS & FIDUCIARIES

American Arbitration Association Anderson & Kreiger LLP Church of Latter Day Saints Choate, Hall & Stewart City of Marlborough DLA Piper Emerson Hospital Edwards, Angell, Palmer & Dodge Essex County Greenbelt Association Foley Hoag, LLP Internal Revenue Service Goodwin Procter Mass Audubon Hemenway & Barnes LLP Mass. Dept. of Conservation/Recreation Holland & Knight Massachusetts Dept. of Agricultural Resources Kates & Barlow P.C. MassDevelopment Kirkpatrick Lockhart Nicholson Graham MassHousing Kopelman & Paige P.C. Sudbury Valley Trustees Regan & Kiley, LLP The Nature Conservancy Tarlow, Breed, Hart & Rodgers P.C. The Trust for Public Land Nutter, McClennen & Fish, LLP Town of Acton Office of Stephen Small, Esq. Town of Concord Peabody & Arnold, LLP Town of Lexington Prince, Lobel, Glovsky & Tye Trustees of Reservations Rackemann, Sawyer & Brewster U. S. Department of Interior Riemer & Braunstein, LLP U.S. Department of Justice Ropes & Gray U.S. Forest Service Sloane and Walsh, LLP Walden Woods Project Shapiro, Weissberg & Garin LLP Water Supply District of Acton WilmerHale