Court File No.: CV-19-00622278-00CL ONTARIO

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Court File No.: CV-19-00622278-00CL

ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

B E T W E E N:

VECTOR FINANCIAL SERVICES LIMITED and DOWNING STREET FINANCIAL INC. Applicants

- and -

IDEAL (JS) DEVELOPMENTS INC. and SHAJIRAJ NADARAJALINGAM Respondents

APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C., 1985 C, B-3, AS AMENDED AND SECTION 101 OF THE COURTS OF JUSTICE ACT, R.S.O. 1990, C.43, AS AMENDED

RESPONDING APPLICATION RECORD

July 10, 2019 FRIEDMAN LAW PROFESSIONAL CORPORATION 150 Ferrand Drive, Suite 800 Toronto, Ontario M3C 3E5

William Friedman (LSO No. 18420U) [email protected]

Judy Hamilton (LSO No. 39475S) [email protected]

Tel: (416) 496-3340 Fax: (416) 497-3809

Lawyers for the Respondents

TO: BLANEY McMURTRY LLP Barristers and Solicitors 1500 – 2 Queen Street East Toronto, Ontario M5C 3G5 Mervyn D Abramowitz (LSO No.: 28325R) Tel: (416) 597-4887 Fax: (416) 593-3396

[email protected]

Megan Hodges (LSO No.: 72898U)

Tel: (416) 593-3906 Fax: (416) 596-2143

[email protected]

Lawyers for the Applicants

Court File No.: CV-19-00622278-00CL

ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

B E T W E E N:

VECTOR FINANCIAL SERVICES LIMITED and DOWNING STREET FINANCIAL INC. Applicants

- and -

IDEAL (JS) DEVELOPMENTS INC. and SHAJIRAJ NADARAJALINGAM Respondents

APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C., 1985 C, B-3, AS AMENDED AND SECTION 101 OF THE COURTS OF JUSTICE ACT, R.S.O. 1990, C.43, AS AMENDED

INDEX

TAB DOCUMENT 1. Affidavit of Shajiraj Nadarajalingam sworn July 10, 2019 A. Narrative Appraisal of Real Property dated January 19, 2017 B. Copy of the current market appraisal of the Property date June 1, 2019 C. Status update from Evans Planning Inc. dated June 6, 2019 D. Draft of the Site Plan Agreement dated July 9, 2019 E. Email from Vector to Ideal dated May 6, 2019 F. Ducimus commitment dated June 25, 2019 G. Draft order for payment of the funds to Ideal H. Invoice of Blaney McMurtry LLP dated May 31, 2019 I. Discharge statements from Vector dated May 31, 2019 and June 24, 2019 1

Court File No.: CV-19-00622278-00CL

ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

BETWEEN:

VECTOR FINANCIAL SERVICES LIMITED and DOWNING STREET FINANCIAL INC. Applicants

- and-

IDEAL (JS) DEVELOPMENTS INC. and SHAJIRAJ NADARAJALINGAM Respondents

APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C., 1985 C, B-3, AS AMENDED AND SECTION 101 OF THE COURTS OF JUSTICE ACT, R.S.O. 1990, C.43, AS AMENDED

AFFIDAVIT OF SHAJIRAJ NADARAJALINGAM I, Shajiraj Nadarajalingam, of the City of Markham in the Province of Ontario, MAKE OATH

AND SAY AS FOLLOWS:

1. I am the principal of Ideal (JS) Developments Inc. ("Ideal") the registered owner of the

prope1iies that are subject to the Applicants' mo1igage security (the "Loan"). I am also the

personal guarantor of both of the mortgages registered against title, being the Loan, and a

subordinate loan to Amercan Corporation, and as such have knowledge of the matters

hereinafter deposed to, except where matters are stated to be based on information and belief,

in which case the source of my information and belief is stated, and I do verily believe the

same to be true. 2

2. For the past nine years, I, through Ideal Developments Inc. and its related corporations (the

"Ideal Group"), have been actively involved in real estate development in the Greater Toronto

Area. The Ideal Group has seven vendors registered with Tarion. To date there have been no

homes with claims or chargeable conciliations in any of the Ideal Group developments.

3. The residential development land located at 39, 53 and 67 Jefferson Side Road, (the

"Property") in the City of Richmond Hill (the "City") is a land assembly composed of 3

properties totaling approximately 2.786 acres, which individual lots were purchased by Ideal

on January 29, 2015 for the purpose of redevelopment into 96 units for a total GF A of 13 5,5 52

square feet. The proposed development is being marketed as Modem Manors and will consist

of 60 stacked townhouses, 12 back to back and 24 regular townhouses, along with 197 parking

spaces (the "Project").

4. On March 9, 2017, Cushman & Wakefield Ltd. provided a narrative appraisal of the Property

effective January 19, 2017, and valued its current market value at that time as $24,300,000.

Attached as Exhibit "A" is a copy of the narrative appraisal of the Property.

5. On June 11, 2019, we received an updated appraisal from Cushman & Wakefield as of June 1,

2019 valuing the Prope1iy at $25,567,000. Attached as Exhibit "B" is a copy of the current

market appraisal of the Property.

6. The planning and approval stage forthe Project has taken some time and is close to completion.

On April 11, 2014, applications for a zoning by-law amendment and for site plan control

approval were submitted to the City along with application for draft plan of subdivision, draft

plan of condominium (common element) and a draft plan of condominium (standard). 3

The Ontario Municipal Board ("OMB") orally approved the draft plan of subdivision at a

hearing held on May 4, 2017. Final order from the OMB will be provided upon the final

approval of the site plan by the City.

7. The site plan application has received conditional site plan approval, subject to entering into a

site plan agreement. The draft plan of subdivision has recently been registered as Plan 65M-

4637. As of April 30, 2019, all plans have been submitted to the City for approval and we are

expecting our site plan approval shortly.

8. From our discussions with the City and with Evans Planning Inc. ("Evans"), our planner, my

understanding and belief is that the City is in favour of Ideal's proposed development plan and

that we should in a position to apply for a building permit shortly. Attached as Exhibit "C" is

a copy of the status update provided by Evans in respect of the Property on or about June 6,

2019.

9. On July 9, 2019, the City provided its draft of the site plan agreement for our review. Attached

as Exhibit "D" is a copy of the draft site plan agreement. We will be providing our final

comments on the agreement shortly and expect to be able to finalize the agreement by July 19,

2019.

10. Once the site plan agreement is executed by Ideal and the City, we will be able to apply for the

building pe1mits. 4

11. Since marketing began, Ideal has entered into agreements of purchase and sale with 60

purchasers. As a result of the delay in site plan approval, the cost of construction has

significantly increased since going to market, and Vector therefore suggested to us that some

of the units would not be profitable based on current estimates.

12. On April 11, 2019, I attended a meeting at Vector's offices with Prasana Balachandran at which

Noah Mintz and Mitchell Oelbaum of Vector were in attendance. The purpose of the meeting

was to discuss the renewal of the mortgage facility upon maturity and was a follow up to a

preliminary meeting held a few days before. Prasana and I were advised that Vector would

extend the term of the loan if we were able to terminate some of the existing purchase and sale

agreements, and in that way increase the potential profits of the stacked townhomes. They

indicated that the cancellations would have a substantial positive impact on value. They

represented that this approach would be in lieu of a pay down of the principal of the mortgage.

13. Therefore, Ideal successfully negotiated the cancellation of 22 of the agreements on consent

and returned the deposits to the purchasers, in order to allow the units to be resold at cmTent

market value and to obtain a loan extension from Vector.

14. On May 6, 2019, four days before the maturity of the second loan extension, we received an

email from Noah Mintz, outlining conditions that Vector required to be satisfied in order for

them to agree to a further three-month extension. Contrary to our discussions that the

cancellation of the agreements would be in lieu of a principal payment, in exchange for a three

month extension, Vector now required a payment $1,421,553 on or before May 10, 2019, prior

to an extension of the loan. This payment demanded was comprised of $1,000,000 payment of 5

principal, $343,178 interest reserve for the months of May, June, and July, and $78,375 as a

lender renewal fee. The interest rate was increased to 9.5%.

15. Vector made it clear that it was unwilling to extend beyond May 10, 2019 to permit Ideal to

come up with the funds. Attached as Exhibit "E" is a copy of the email dated May 6, 2019

from Vector to Ideal containing the terms for a three-month extension of the mortgage loan.

16. Based on Vector's representations, Ideal had elected to terminate agreements in lieu of any

type of principal payment as discussed with Vector. Vector was well aware that we were in

the process of completing cancellation of agreements and returning deposits. They also knew

that we would not be able to mobilize the funds that they demanded within a few days.

Moreover, the terms of the renewal such as the new term and the amount held for interest were

non-negotiable.

17. I believe that the representations of Vector were made in order to lead us to believe that the

extension would be given pending the construction financing rather than proceeding

immediately to appoint a Receiver.

18. On June 25, 2015, Tarion (then the Ontario New Home Wananty Program), Ideal (JS)

Development and an Escrow Agent entered into a deposit trust agreement to govern the receipt,

retention and ultimate disposition of all deposit monies. Friedman Law Professional

Corporation ("Friedmans") is cunently the escrow agent to protect the security interests of

Tarion and the purchasers in and to the deposits.

19. We are in compliance with all of our obligations under the deposit trust agreement with Tarion

with respect to all of our purchasers. 6

20. I am not aware of any direct inquires made by Vector to Ideal for information regarding the

status of agreements of purchase and sale.

21. However, Vector has been in touch with Tarion and the City in contemplation of this

application, without advising Ideal. I am also aware that Vector has been talking to other

construction lenders in the City because our broker has advised us of same. Vector's inquiries

of both the proposed lenders and other parties has created a chilling effect on the lenders that

we have been canvassing for replacement financing. We were advised specifically that Vector

representatives have advised lenders that Ideal is insolvent and they will appoint a Receiver.

As a result, Ideal has found it difficult to obtain a financing commitment on reasonable terms.

22. Currently, the Property is vacant land. There is no rental income and no upkeep related to the

Property. The only carrying costs are the mortgage, realty taxes and insurance. There is no

arrears of payment of any carrying costs other than under the mortgage, which we are in the

process of refinancing.

23. We have entered into negotiations with Ducimus in order to obtain replacement financing for

the Loan. Since Vector refused to extend the facility until construction financing was in place,

we are in a position where we have to pay exorbitant fees for the short term facility that will

shortly be replaced by construction financing, consisting of approximately $450,000 in fees.

Attached as Exhibit "F" is a copy of the Ducimus commitment dated June 25, 2019, which

was provided to the Applicant's lawyer on July 5, 2019.

24. The Ducimus advance is sufficient to discharge the Loan and provide sufficient financing for

payments required under the site plan agreement. 7

25. The Ducimus loan commitment is conditional on construction financing. We are currently in

negotiations with Fiera Capital Inc. and we are told that a letter of intent is imminent. I am

advised that a commitment can be in place within a week following a signed letter of intent.

Once we have the signed commitment, we can complete our financing with Ducimus. We

anticipate we should be able to conclude this financing and pay Vector by on or about August

15, 2019.

26. In addition to the replacement financing, Ideal is anticipating revenue that will assist with other

interim carrying costs.

27. Ideal is receiving approximately $3,000,000 from July 30 - August 15, 2019, when Ideal's

Pinnacle project is completed.

28. In addition, Ideal will be paid $1,700,000 by a former business partner on or before August 25,

2019. I had previously anticipated receipt of this amount by February 4, 2019, but the payment

was not made and now it is to be made on or before August 25, 2019 according to a consent

court order. Attached as Exhibit "G" is a copy of the draft order for payment of the funds to

Ideal.

29. As a result of the partnership dispute, Ideal had a cash flow shortage and suffered delays in

being able to complete our projects and secure financing extensions.

30. In my view, the reason that Vector is seeking to appoint a Receiver is to conduct a sale of the

Property on an "as is" basis. We have now site plan approval. A Receiver will not be able to 8

satisfy the conditions set out in the site plan agreement or proceed on the development of the

Project as planned and will not capitalize on the extensive development work that has been

completed to date. Now that site plan approval has been received, Ideal can proceed enter into

the site plan agreement and obtaining building permits for construction of the development.

31. If a receiver puts the vacant land up for sale without satisfying the conditions of the site plan

agreement, the listing and sale price will be significantly lower even though site plan approval

is in place. A sale under distress could result in proceeds well below appraised value. The

appointment of a Receiver will have a chilling effect on our other development projects and

funding for those projects and discourage any purchasers from registering and entering into

agreements on our other projects.

32. It is my belief that the appointment of a Receiver in the circumstances is not just and equitable

at this time.

3 3. Vector has not served a notice of power of sale under the mortgage.

34. I object to Vector circumventing my rights of redemption under the mortgage by appointing a

Receiver to sell the Property.

35. The costs associated with a Receivership will no doubt be substantial even though there are no receivables to collect and the Property is vacant land. As an example of the type of fee padding involved in a Receivership, on the first court attendance in this matter for the purposes of endorsing the agreed upon schedule, three lawyers appeared on behalf of the applicant. The most recent invoice from Vector's lawyers is attached as Exhibit "H". 9

36. Should the Property be sold under what is effectively a power of sale, there is a possibility that despite the value of the Prope1iy being well in excess of the security, my guarantee of the subordinate mmigage could be called upon if the Receiver's and Lender's fees diminish the value of the equity in the Property.

3 7. I have been told by the stakeholders of the subordinate mmigage Amercan that it wishes the development to be completed by Ideal and that it is opposed to a receivership.

38. We dispute the additional charges, fees and penalties over and above the interest that Vector is claiming on the discharge statements it has provided to date. Attached as Exhibit "I" are copies of the discharge statements dated May 31, 2019 and June 24, 2019 received from Vector.

39. I make this affidavit to oppose the appointment of a Receiver and for no other or improper

purpose.

SWORN BEFORE ME at the City of Toronto, in the Province of Ontario, this 10th day of July, 2019

f'I ~ ~ ~ f;:;aking oa;J;";:Ek"' Shajira~ Judy Hamilton 10

This is Exhibit "A" refetTed to in the Affidavit of Shajiraj Nadarajalingam,

sworn this 10th day of July, 2019.

for Taking Affidavits, etc.

Judy Hamilton 11 lladvisory

NARRATIVE APPRAISAL co OF REAL PROPERTY > N/A Jefferson Sideroad Richmond Hill, Ontario

IN A NARRATIVE APPRAISAL REPORT Effective Date: January 19th, 2017

Prepared For: Ideal Developments Inc. 1100 Roddick Road Markham, ON L3R 8C3

Prepared By: Cushman & Wakefield Ltd. Valuation & Advisory 161 Bay Street, Suite 1500 P.O. Box 602 Toronto, ON M5J 2S1 C&W File ID: 17-445-900080 CONFIDENTIAL

• CUSHMAN & 111 IllIll! WAKEFIELD CUSHMAN & WAKEFIELD LTD . 12 • VALUATION & ADVISORY 161 BAY STREET, SUITE 1500 P.O. BOX 602 TORONTO, ONTARIO M5J 2S1

Residential Development Land N/A Jefferson Sideroad Richmond Hill, Ontario

lla CUSHMAN & Ill lll I~ WAKEFIELD 13 • CUSHMAN & Ill Ill I~ WAKEFIELD

Cushman & Wakefield Ltd. Valuation & Advisory Services 161 Bay Street, Suite 1500 P.O. Box 602 Toronto, Ontario M5J 2S1 (416)8620611 Tel (416) 359 2613 Fax www.cushmanwakefield.com

March 9, 2017

Shaji Nada President & CEO Ideal Developments Inc. 1100 Roddick Road Markham, ON L3R 8C3

RE: NARRATIVE APPRAISAL REPORT N/A JEFFERSON SIDEROAD, RICHMOND HILL, ON LEGALLY DESCRIBED AS LOTS A, B, C, PLAN 1916, PART 1ON65R36865 TOWN OF RICHMOND HILL

C&W Ltd. File ID: 17-445-900080

Dear Mr. Nada, In accordance with your request, we have completed our investigation and analysis of the above noted property and are pleased to submit this report of our findings and conclusions.

The purpose of this narrative appraisal is to estimate the current market value based on its Highest & Best Use at the effective date of January 19th, 2017, subject to the Assumptions and Limiting Conditions which form Addendum "A" to this report. The subject property consists of vacant development land located on three parcels of land formerly known as 39, 53 & 67 Jefferson Sideroad, Richmond Hill, Ontario and legally described as Lots A, B, C, Plan 1916, Part 1 on 65R36865 Town of Richmond Hill. The site is currently being marketed as Modern Manors by Ideal Developments Inc.

It is our understanding that the intended use of the appraisal report is to assist with obtaining financing. This appraisal was prepared for Ideal Developments Inc., its subsidiaries, lender(s), and is intended only for its specified use.

This Narrative Appraisal Report was prepared in accordance with the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP). It contains an analysis of general and specific data deemed essential to support the estimate of value reported herein.

It may not be distributed to or relied upon by other persons or entities without written permission of the Appraiser. It is not to be referred to or quoted in any prospectus for the sale or exchange of securities, and may not be reproduced, in whole or in part, without our prior written agreement. It is subject to the Assumptions and Limiting Conditions contained in Appendix A, in addition to any in the report.

• CUSHMAN & 111 Ill 111111 WAKEFIELD IDEAL DEVELOPMENTS INC. CUSHMAN & WAKEFIELD LTD. 14 MARCH 9, 2017 PAGE2

FINAL VALUE ESTIMATE

The current market value of the subject property based on its Highest & Best Use located at N/A Jefferson Sideroad, Richmond Hill, ON, as at January 191h, 2017 is as follows:

TWENTY-FOUR MILLION THREE HUNDRED THOUSAND DOLLARS

$24,300,000 Exposure Time: 6 to 9 Months

EXTRAORDINARY ASSUMPTIONS & HYPOTHETICAL CONDITIONS

The market value is premised under the assumption that the subject is free and clear of any environmental contamination that would impede on future development. In addition, the market value is based on the total unit count of the subject to be 96 units or 135,552 square feet of sellable GFA as outlined in this report. Should this not be true, the appraiser reserves the right to amend the value conclusion(s) accordingly.

Respectfully submitted, CUSHMAN & WAKEFIELD LTD.

Digitally signed by Digitally signed by Peter Chan Jonathan Dunlap Date: 2017.03.09 Date: 2017.03.09 15:42:26 -05'00' 15:42:57 -05'00'

Peter Chan, AACI, P.App. Jonathan Dunlap, MBA Vice President Senior Consultant Valuation & Advisory Valuation & Advisory Peter. [email protected] [email protected] Phone Office Direct 416-359-2432 Phone Office Direct 416-359-2413 Fax 416.359.2613 Fax 416.359.2613

til CUSHMAN & Ill lllIll WAKEFIELD • 15

N/A JEFFERSON SIDEROAD, RICHMOND HILL EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

BASIC INFORMATION

Property Address: N/A Jefferson Sideroad, Richmond Hill Effective Date of Valuation: January 19th, 2017

Legal Description: Lots A, B, C, Plan 1916, Part 1on65R36865 Town of Richmond Hill.

Property Type: Residential Development Land Date of Inspection: January 19th, 2017

CW File Reference: 17-445-900080 Appraisal Type: Narrative Report

Client: Ideal Developments Inc. Intended Appraisal Use: Assist in obtaining financing

Intended Users: Ideal Developments Inc., its subsidiaries and Value Appraised: Fee Simple Interest lender(s).

SITE/BUILDING INFORMATION

The area of the subject property is The subject sites are located on the approximately 2.786 acres or 121,352 south side of Jefferson Sideroad, west of Land Area: square feet. Site Location: Yonge Street in the Town of Richmond *Source: GEO Warehouse Hill.

Generally level and at grade with adjacent Site Topography: Current Use: Vacant properties.

Site Shape: Rectangular Improvements: The site is vacant and unimproved.

Site Utility: Good . Visibility: Good frontage along Jefferson Sideroad

Frontage: 134.0 feet Depth: 302.0 feet

MUNICIPAL INFORMATION

Neighbourhoods Municipality Governing Official Plan Designation: UR (Urban Residential) Regional Mixed Use Corridor Zoning:

Current Use Conformance: The current use is considered a legal and conforming use.

HIGHEST & BEST USE

HBU -As Vacant Considering the subject parcel's legally designated land uses, physical characteristics and location within the Town of Richmond Hill, it is our opinion that the Highest and Best Use As Vacant is for development to a residential use.

Conclusion For purposes of this valuation, we have determined the current market value based on its Highest & Best Use. The subject property is currently vacant. The valuation will be based on future re development land to a higher order use.

.. CUSHMAN & tll Ill 11111 WAKEFIELD 16

N/A JEFFERSON SIDEROAD, RICHMOND HILL EXECUTIVE SUMMARY II

FINAL VALUE CONCLUSIONS

RECONCILIATION & FINAL VALUE ESTIMATE 39, 53, 67 Jefferson Sideroad, Richmond Hill . Direct Comparison Conclusion Site Area (square feet) 121,352 Sale Price Per Sq. Ft: $200 Estimated Market Value (rounded): $24,300,000

Land Residual Conclusion Total Sell Out Value $71,472,000 Total Project Expense $47,376, 143 Estimated Market Value (Rounded) $24, 100, 000

FINAL VALUE ESTIMATE $24,300,000

Exposure Time of 6 to 9 Months

EXTRAORDINARY SSUMPTIONS HYPOTHETICAL CONDITIONS

An Extraordinary Assumption is an assumption, which if not true, could alter the appraiser's opinions and conclusions. They are required when a Hypothetical Condition is necessary due to circumstances that are not self-evident regarding the appraised property. Hypothetical Conditions include retrospective appraisals, significant renovations to the improvements, completion of proposed improvements, etc. Certain extraordinary assumptions underlie the valuation analysis in this report and the resulting opinion of market value of the Subject property, namely: The market value is premised under the assumption that the subject is free and clear of any environmental contamination that would impede on future development. In addition, the market value is based on the total unit count of the subject to be 96 units or 135,552 square feet of sellable GFA as outlined in this report. Should this not be true, the appraiser reserves the right to amend the value conclusion(s) accordingly.

8'a CUSHMAN & Ill 111 Ila WAKEFIELD 17 •II N/A JEFFERSON SIDEROAD, RICHMOND HILL TABLE OF CONTENTS

TABLE OF CONTENTS

EXECUTIVE SUMMARY

TERMSOFREFERENCE------~----~----~1

AERIAL MAPS & PHOTOGRAPHS 3

PROPERTYDATA------~------~5

MARKET AND LOCATION ANALYSIS------14

LOCAL AREA OVERVIEW 26

HIGHEST AND BEST USE 33

LAND RESIDUAL APPROACH 47

RECONCILIATION AND FINAL VALUE OPINION 56

ADDENDA CONTENTS 57

ASSUMPTIONS AND LIMITING CONDITIONS 58

CERTIFICATION 61

GLOSSARY OF TERMS AND DEFINITIONS 63

.. CUSHMAN & Ill Ill ltl WAKEFIELD 18 •II N/A JEFFERSON SIDEROAD, RICHMOND HILL TERMS OF REFERENCE 1

TERMS OF REFERENCE

PURPOSE AND INTENDED USE OF REPORT

The purpose of this narrative report is to estimate the current market value based on its Highest & Best Use of the fee simple interest of the subject property.

It is our understanding that the intended use of the appraisal report is to assist in obtaining financing. This appraisal was prepared for Ideal Developments Inc., its subsidiaries, lender(s), and is intended only for its specified use. Use of this report by any other party or for any other purpose than that stated herein is completely unauthorized.

DEFINITION OF MARKET VALUE

For the purposes of this valuation, market value is defined as:

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

1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised, and acting in what they consider to be in their best interests;

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

4. Payment is made in terms of cash in Canadian Dollars or in 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.

REASONABLE EXPOSURE TIME

Exposure time is always presumed to precede the effective date of the appraisal. It may be defined as:

"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. It is a retrospective estimate based upon an analysis of past events assuming a competitive and open market."

Based on discussions with various investors and real estate brokers familiar with land assets such as the subject, it is our estimate that an exposure time of six to nine months would be required.

SCOPE OF VALUATION AND REPORTING PROCESS

During the course of preparing this valuation, the appraiser:

• Made an exterior inspection of the property and surrounding area;

• Reviewed available data regarding the local market;

~ CUSHMAN & 111 Ill la. WAKEFIELD 19 •,II N/A JEFFERSON SIDEROAD, RICHMOND HILL TERMS OF REFERENCE 2

• Verified current land use and zoning regulations;

• Reviewed sales and listing data on comparable properties;

• Interviewed market participants;

• Confirmed data relied upon in the valuation process, where possible; and

• Prepared a Narrative valuation report in accordance with the standards.

Additional supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated. The appraiser is not responsible for unauthorized use of this report.

EXTRAORDINARY ASSUMPTIONS & HYPOTHETICAL CONDITIONS

The market value is premised under the assumption that the subject is free and clear of any environmental contamination that would impede on future development. In. addition, the market value is based on the total unit count of the subject to be 96 units or 135,552 square feet of sellable GFA as outlined in this report. Should this not be true, the appraiser reserves the right to amend the value conclusion(s) accordingly.

LIMITING CONDITIONS

This report is subject to the Assumptions and Limiting Conditions set forth within the Addenda to this appraisal in addition to any specific assumptions that may be stated in the body of the report. These conditions are critical to the value stated herein and should be thoroughly read and understood before any reliance on this report is considered.

PROPERTY RIGHTS PP RAISED

The property rights appraised within this report are those of the fee simple interest in the subject property; defined as absolute ownership unencumbered by any other interest of estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.

DATE OF INSPECTION

The property was inspected by Peter Chan (AACI, P.App) on January 191h, 2017.

EFFECTIVE DATE

The effective date of this valuation is January 19th, 2017.

~ CUSHMAN & Ill Ill I~ WAKEFIELD 20 •II N/A JEFFERSON SIDEROAD, RICHMOND HILL AERIAL MAPS & PHOTOGRAPHS 3

AERIAL MAPS & PHOTOGRAPHS

AERIAL PHOTOGRAPH

*Property Aerial is an approximation and has been included solely to aid the reader in visualizing the location, configuration and boundaries of the Subject property.

• CUSHMAN & tll IllIll WAKEFIELD • 21

N/A JEFFERSON SIDEROAD, RICHMOND HILL AERIAL MAPS & PHOTOGRAPHS 4

PHOTOGRAPHS F UBJECT PROPERTY

Subject Subject

Looking West on Jefferson Side Road Looking North on Yonge Street

Residential Development Opposite the Subject Residential Development Opposite the Subject

• CUSHMAN & 111 IllIll WAKEFIELD ·11 22 N/A JEFFERSON SIDEROAD, RICHMOND HILL PROPERTY DATA 5

PROPERTY DATA

MUNICIPAL ADDRESS AND PROPERTY IDENTIFICATION NUMBER (PIN)

N/A Jefferson Sideroad, Richmond Hill, ON - 03208-3219

LEGAL ESCRIPTIONS

Lots A, 8, C, Plan 1916, Part 1 on 65R36865 Town of Richmond Hill

WNERSHIP AND HISTORY

CURRENT OWNERSHIP

According to our investigations, ownership of the subject property is currently registered to Ideal (JS) Developments Inc. The subject property was formerly three individual parcels that were each acquired on January 291h, 2015 for a total consideration of $10,050,000. The Vendors were not disclosed. It is our understanding that each parcel of the land assembly was acquired for $3,350,000. There have been no other transfers of ownership in the past three (3) years.

CURRENT CONTRACTS

Phase 1 of the proposed development has already been sold out and Phase 2 will begin marketing soon. The subject was not listed on any Multiple Listing Service (MLS).

EASEMENTS & LAND USE RESTRICTIONS

The property may be subject to easements and rights-of-way relating to the usual provision of servicing by public utilities and I or access for persons and vehicles. We are not aware of any easements or rights-of-way that would have an adverse impact on the Subject property; however, we have not carried out a title search of the Subject property.

llit CUSHMAN & 111 lllIll WAKEFIELD •II 23 N/A JEFFERSON SIDEROAD, RICHMOND HILL PROPERTY DATA 6

PROPERTY DESCRIPTION

GENERAL DESCRIPTION

Site Location: • The subject site (formerly three parcels of land) is located on the south side of Jefferson Sideroad, west of Yonge Street in the Town of Richmond Hill.

Site Area • The area of the subject property is approximately 2.786 acres or 121,352 square feet. *Source: GEO Warehouse

Frontage • 134.0 feet

Depth • 302.0 feet

Improvements • The site is vacant and unimproved.

Configuration • Rectangular

Topography • Generally flat and level and at grade.

Access • Vehicular access available along the south side of Jefferson Sideroad.

• The site is municipally serviced to the site. Changes to servicing and its capacity is assume to be possible for Services future development.

• For the purposes of this analysis, the instruments registered against the title(s) to the property, if any, are assumed not to have a significant effect on the property's marketability or its market value. For greater certainty a legal Title Instruments opinion should be solicited for a full explanation of the effects of these encumbrances. Additionally, the property has been valued as if free and clear of any financing.

• The subject property is vacant and has been identified by the current owners as being planned for future re Conclusion development.

SOIL CONDITIONS

We have not undertaken a detailed soil analysis and we are not qualified to comment on soil conditions. For the purposes of this report, we have assumed there are no contaminants affecting the site. However, a full environmental audit is required for certainty and any cost of remedy should be deducted from the reported value. The sub-soil is assumed to be similar to other lands in the area and suitable in drainage qualities and load bearing capabilities to support development.

HAZARDOUS SUBSTANCES

We are not qualified to ascertain any toxic wastes or contaminated materials, soil I sub-soil conditions and environmental issues. Determination of such information was not part of our mandate and no funds were provided for such undertaking. No responsibility is assumed for the existence of any such substances or any costs associated with their removal, correction or treatment in the event they are found to exist on the subject property or on adjacent lands, or in close proximity to the subject property to materially affect value.

lia CUSHMAN & Ill lll 1111 WAKEFIELD • 24

N/A JEFFERSON SIDEROAD, RICHMOND HILL PROPERTY DATA 7

SSESSMENT INFORMATION

Based on MPAC records, the subject site was last assessed as three individual parcels. According to MPAC, the subject property has the following assessment information:

Municipal Address • 39 Jefferson Sideroad Assessment Roll No. • 19-38-060-121-4050-0000 Property Description • 100 - Vacant residential land not on water Assessed Value • $315,750 Property Taxes • Not provided • Municipal Address • 53 Jefferson Sideroad Assessment Roll No. • 19-38-060-121-4100-0000 Property Description • 100 - Vacant residential land not on water Assessed Value • $286,000 Property Taxes • Not provided • Municipal Address • 67 Jefferson Sideroad Assessment Roll No. • 19-38-060-121-4150-0000 Property Description • 301 - Single-family detached (not on water)** Assessed Value • $887,500 Property Taxes • Not provided • Phased-In Assessment reflects the phased-in portion of the Assessed Value returned to the municipality I local taxing authority on the 2016 Assessment Roll for the 2017 taxation year.

**As of the effective date of this report, the improvements noted by MPAC at 67 Jefferson Sideroad have been demolished.

SOIL CONDITIONS

HAZARDOUS SUBSTANCES

814 CUSHMAN & Ill 111 llra WAKEFIELD • 25 .11 N/A JEFFERSON SIDEROAD, RICHMOND HILL PROPERTY DATA 8

MUNICIPAL DATA

Land use in Ontario may be controlled or directed by provincial restrictions through legislation such as the Planning and Development Act. Further, land use is also controlled by municipal restrictions such as Official Plans and Zoning By-Laws and I or other restrictive By-Laws. The subject property is located within the Town of Richmond Hill and contains the following planning information:

LAND USE PLANNING

Town of Richmond Hill • The Town of Richmond Hill's Official Plan created in was adopted by Council on July 12, 2010 Official Plan and subsequently appealed to the Ontario Municipal Board (OMB) on February 10, 2011 and later endorsed by the Regional Municipality of York on May 19, 2011. On April 5, 2012 the OMB issued an Order partially approving the Richmond Hill Official Plan (2010). This Order was subsequently amended by the OMB on April 26, 2012, June 29, 2012, October 23, 2012, December 20, 2012, April 26, 2013, June 17, 2013, September 26, 2013, November 6, 2013, January 31, 2014, March 21, 2014, July 4, 2014, August 26, 2014, October 17, 2014, March 6, 2015, April 29, 2015, June 22, 2015, October 13, 2015, January 19, 2016, March 23, 2016, April 13, 2016, May 25, 2016, and October 14, 2016. The OMB's partial approval Order and subsequent amending Orders have brought specific policies of the new Official Plan into effect, with the exception of those policies and map schedules that remain under appeal on a Town wide, area-specific or site-specific basis. • The main purpose of the Official Plan is to provide an overall vision with principles and objectives that guide decision making by the Town with respect to the natural environment, land use, community services, social and cultural matters and development review. • According to the Official Plan of the Town of Richmond Hill, the subject property is designated as "Neighbourhood". 1) The predominant use of land within the Neighbourhood designation shall be for low-rise residential uses. 2) The following uses shall be permitted in the Neighbourhood designation: a. Low-density residential uses such as low-rise single detached, semi-detached and duplex dwellings; b. Medium-density residential uses such as low rise townhouses and walk-up apartments in accordance with the policies of Section 4.9. 1.2. c. Neighbourhood commercial uses in accordance with the policies of Section 4.9. 1.3. d. Community uses in accordance with the policies of Section 4. 1 e. Parks and urban open spaces in accordance with the policies of Section 3.4.4; and f. Automotive service commercial in accordance with policy 3.4. 1.47. 3) Development shall be compatible with the character of the adjacent and surrounding area in accordance with policy 4.9.2.4. 4) Development within the Neighbourhood designation shall have a maximum building height of 3-storeys, except on an arterial street where the maximum building height shall be 4-storeys; 5) Existing buildings greater than 3-storeys which legally existed on the date of adoption of this Plan shall be permitted. New development greater than 3-storeys shall only be

~ CUSHMAN & 111 Ill Ila WAKEFIELD ·11 26

N/A JEFFERSON SIDEROAD, RICHMOND HILL PROPERTY DATA 9

permitted in accordance with the policies of this Plan. • The eastern portion of the subject site is also designated "Regional Mixed-Use Corridor". 1) The predominant use of land within the Regional Mixed-Use Corridor designation shall be for mixed-use, transit-oriented development. 2) The following uses shall be permitted within the Regional Mixed-Use Corridor designation: a. Medium density residential; b. High density residential; c. Major office; d. Office; e. Commercial; f. Major retail; g. Retail; h. Automotive service commercial in accordance with policy 3.4.1.47 of the Official Plan; i. Community uses in accordance with Section 4.1 of the Official Plan; j. Parks and urban open spaces in accordance with Section 3.4.4 of the Official Plan; and k. Live-work units in accordance with policies 3.3.3.2.9 and 3.3.3.2.10 of the Official Plan. 3) Medium density residential development in the form of ground-related units within the Regional Mixed-Use Corridor designation shall not be permitted to front directly onto Yonge Street or Highway 7. 4) Development shall be encouraged to provide a mix of uses integrated physically within the same building or in separate buildings that are functionally integrated on the same site. • Please refer to the map of the Official Plan Land Use in Index 1 below for reference.

Town of Richmond Hill • The subject property is zoned as UR (Urban Zone) under Zoning By-Law 128-04 {The Oak Zoning By-Law Ridges Moraine Zoning By-Law.

• Permitted uses under this By-law designation include: Existing use as of November 15, 2001, existing buildings, structures and uses including, but no limited to, existing institutional uses, single detached dwellings, home businesses, bed and breakfast establishments, uses accessory to the above permitted uses, public transportation, infrastructure and utilities.

• A map indicating the subject site and the surrounding area within the by-law can be referred to below under Index 2.

OMB File No. 160553 • The Ontario Municipal Board (OMB) filed a notice of appeal on behalf of the developer (Ideal Developments) for the subject property due to the lack of decision making by the Town of Richmond Hill. A pre-hearing conference was held November 17th, 2016. Town Council does not support the applications at that time because of concerns about whether the proposed development conforms to applicable plans and policies (including the Town's Official Plan) and adequately addresses a number of technical, environmental, and servicing matters. These concerns are set out in a Town staff report to Committee of the Whole dated November 7, 2016, which was entered into evidence. • At the PHC, Counsel for both parties informed the Board of their confidence that all

• CUSHMAN & Ill Illlfl WAKEFIELD 27

N/A JEFFERSON SIDEROAD, RICHMOND HILL PROPERTY DATA 10

outstanding points of difference can be resolved in the coming months.

• The parties requested a further PHC and a five day hearing. The purpose of the second PHC is for the parties to present a draft Procedural Order to the Board, including a list of issues to be addressed by evidence at the hearing. • Noting the progress that has been made to date, and the evident goodwill between the parties, the Board orders that a second PHC be scheduled for Wednesday, March 8, 2017 at 10 a.m. The hearing is scheduled to commence on Monday, May 1, 2017 at 10 a.m. and is to continue for five days.

Compliance - Current Use • The subject property is currently vacant, which is considered to be legally permissible.

Development Applications • As at the effective date, a site plan application had been submitted three times and was expected to receive final approval in March of 2017. The proposed development will consist of 60 stacked townhouses, 12 back to back townhouses and 24 regular townhouses. Phase 1 is composed entirely of stacked townhouses and is completely sold out. Phase 2 is expected to begin marketing soon.

• The development will have a total gross floor area of 132,141 square feet. Phase 1 (stacked townhouses) will have a total GFA of 64, 125 square feet, and Phase 2 (back to back I regular townhouses) will have a total GFA of 68,016 square feet. The development will have a floor space index (FSI) of 1.13. It is also planned to have 211 parking spaces: 107 above ground regular, 14 above ground visitor, and 90 underground.

• See Index 3 below for the most recent site plan for the proposed development.

.. CUSHMAN & 111 Ill Ila WAKEFIELD 28

N/A JEFFERSON SIDEROAD, RICHMOND HILL PROPERTY DATA 11

TOWN OF ICHMOND HILL~ OFFICIAL PLAN (INDEX 1)

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bl CUSHMAN & Ill llllt4 WAKEFIELD ·11 29 N/A JEFFERSON SIDEROAD, RICHMOND HILL PROPERTY DATA 12

TOWN OF RICHMOND HILL - AREA ZONING MAP (INDEX 2)

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N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 14

MARKET AND LOCATION ANALYSIS

ONTARIO - ECONOMIC VERVIEW

Ontario is the most populous province in Canada, with a population of approximately 13.8 million in 2015, and accounted for roughly 38.5 percent of the national total. The Conference Board of Canada forecasts that the population in Ontario will continue to grow, reaching 14.4 million by 2020.

While approximately 77.0 percent of Ontario's GDP is generated by service sectors, the province is also Canada's leading manufacturing centre. The top five manufacturing industries include: transportation equipment, metal products, food processing, chemical & by-products, and electrical & electronic products.

Ontario's large and culturally diverse population, natural resources, and strategic location contribute to a vital economy. Toronto is the largest city in Canada and the country's main financial centre. Many people work in the service or manufacturing industries, which produce a large percentage of Canada's exports. The Niagara region is known for its vineyards, wines, and fruit crops. Ontario farmers raise dairy and beef cattle, poultry, and vegetable and grain crops. Ontario also has the largest French-speaking population outside of Quebec, with a proud history of preserving their language and culture. In addition, Ontario is home to the Toronto Stock Exchange - the largest stock exchange in Canada, the third largest in North America and the seventh largest in the world by market capitalization.

CURRENT TRENDS

Over the past few years, the Ontario government, along with many other Y/Y 2016 (f) provinces, has been dealing with one of the biggest challenges ever - a Change budget deficit. According to the latest budget released in February 2016, GDP 2.6% ~ the 2015-2016 deficit is estimated to be $5.7 billion, $2.8 billion lower than originally forecasted. However, the government does expect to Unemployment 6.6% ~ reduce the deficit to $4.3 billion in 2016-17, and balance the books by Employment 1.2% 2017-18. One of the main highlights of this year's budget was the new Growth ~ Ontario Student Grant, which will begin in the 2017-18 school year, and Retail Sales 4.9% money will be available upfront for needy families earning less than ~ $50,000 a year. Housing Starts 74.5 (OOO's) ~ According to Statistics Canada, employment increased by 15,200 in Ontario in the second quarter of 2016. This was the fifth consecutive Source: BMO Capital Markets. TD quarterly gain for the province, although it was only approximately half the increase of the previous quarter. A significant increase in employment in May 2016 more than offset losses in April and June. However, the gains over this three-month period came almost exclusively from part-time employment growth. Both employment and participation rates edged lower, each by 0.1 percentage poiht, in the second quarter of 2016 and have remained relatively unchanged over the last six quarters. For youth aged 15 to 24, the unemployment rate slipped to 14.0 percent from the previous quarter. Employment for Ontario's youth saw its first quarterly increase (+11,700) in the second quarter of 2016, after several consecutive quarters of decline. This constituted a majority of the overall increase in the province, with employment for individuals aged 25 to 54 increasing by 4,800 for the quarter, and those aged 55 and over declining 1, 100 for the quarter.

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N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 15

Additional items of note are as follows:

• According to the Conference Board of Canada, Ontario's tourism sector may prove to be one of the biggest winners from the Canadian dollar's change of fortune. According to the Board's Canadian Tourism Research Institute, Ontario recorded an estimated increase of 4.5 percent in overnight visits from the United States (U.S.) to the province in 2015, and another 1.6 percent growth is expected in 2016.

• According to Statistics Canada's Labour Force Survey, employment in Ontario was virtually unchanged in June 2016. With fewer people participating in the labour market, the unemployment rate fell from 6.6 percent to 6.4 percent, the lowest rate since September 2008. On a year-over-year-basis, employment in the province grew by 63,000 (+0.9 percent).

• The external environment for Ontario should remain positive during the next two years due to a better performance in its largest export market - the U.S., a low Canadian dollar, low interest rates, and low oil prices.

DEMOGRAPHIC CHARACTERISTICS

With a population of 13.8 million, Ontario is home to about 2 in 5 Canadians. More than 85.0 percent live in urban centres, largely in cities on the shores of the Great Lakes. The largest concentration of people and cities is in the "Golden Horseshoe" along the western shore of Lake Ontario, including: the Greater Toronto Area (GTA), Hamilton, St. Catharines, and Niagara Falls. The "Greater Golden Horseshoe" describes the extended metropolitan area, including parts of central Ontario surrounding the core region. With more than 9.0 million people, this area is one of the fastest growing areas in North America. The wider region spreads inland in all directions away from the Lake Ontario shoreline, southwest to Brantford, west to the Kitchener-Waterloo area, north to Barrie and northeast to Peterborough. Population hubs in southwestern Ontario include: London, Kincardine, Windsor, and Sarnia. In eastern Ontario, Ottawa and Kingston are the predominant cities. In northern Ontario, key municipalities include: Greater Sudbury, Thunder Bay, Sault Ste. Marie, North Bay, Timmins, and Kenora.

Additional items of note are as follows:

• Ontario's population growth has depended on immigration ever since the American Revolution sent Loyalists north to Canada. Even today, 40.0 percent of the approximately 250,000 people who immigrate to Canada each year choose to settle in Ontario. Toronto has been called the most multicultural city in the world, where more than 100 languages and dialects are spoken.

• The median age for Ontarians is about 40 years. There are approximately 5.0 million households in Ontario and the life expectancy is about 79 years for men and 84 years for women.

HOUSEHOLDS

Ontario, together with British Columbia (B.C.) account for approximately 60.0 percent of Canadian housing activity. In Ontario, the ongoing shortage of single family homes for sale in and around the GTA continues to drive very strong price gains. Price growth in 2016 is forecast to be the strongest in Ontario (+2.8 percent) due to an ongoing supply shortage of listings for low rise homes in and around the GTA.

Additional considerations include the following:

• According to BMO Capital Markets, housing starts in Ontario will increase to 74,500 units in 2016, up from 68,800 units last year. In 2017, housing starts will drop to 68,000 units.

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N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 16

• Regional housing markets will continue on their expansion phase during the next two years. The low interest rate environment is a strong stimulus to all regional housing markets. According to the Ontario Chamber of Commerce, no recession in Ontario's housing market is foreseen until the next global economic recession and regional markets will expand reflecting their own local economic conditions. Housing markets in stronger economies and with higher population growth outperform those with weaker demand conditions. Multiple Listing Services (MLS) residential sales growth is predicted to be most robust and above the provincial averages during the next two years in the Windsor-Sarnia and London regions. Another more active regional market is Muskoka-Kawarthas. Residential sales are predicted well above provincial sales growth rate at 9.1 percent in 2016 and 6.7 percent in 2017. In this region, labour market performance is less of a housing driver than the influx of retiree migrants from other parts of the province, notably Toronto, in addition to low interest rates. Robust market conditions in Toronto and other regions facilitate and encourage migration.

The following graph presents historical and projected activity of housing starts in Ontario:

2007 2009 2011 2013 2015 2017f Source: Statistics Canada 'Forecasts - BMO Capital Markets

GROSS DOMESTIC PRODUCT (GDP)

Ontario is the largest economy in Canada, with a GDP nearly twice that of neighbouring Quebec - Canada's second largest economy. Ontario's industries range from cultivating crops, to mining minerals, to manufacturing automobiles, to designing software and leading-edge technology. Ontario generates 37.0 percent of the national GDP and is home to almost half of all employees in high tech, financial services and other knowledge-intensive industries.

Additional items of note are as follows:

• According to BMO Capital Markets, Ontario's economy grew by 2.5 percent in 2015, the second best rate in the country after B.C., although down by 20 basis points over last year. The economic growth is forecast to rise to 2.6 percent in 2016, continuing to record the second best provincial economic growth after B.C. in 2016. The rate will then drop to 2.3 percent in the following year. The GDP growth will be driven by the lower Canadian dollar and an improving U.S. economy, providing a further lift to manufacturing activity. • Weak provincial business investment over the past decade means Ontario exporters might have insufficient capacity to meet the projected foreign demand increase.

tiri CUSHMAN & Ill lllIlla WAKEFIELD 34

N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 17

The following graph presents further details of historical and projected GDP activity in Ontario:

Year-to-Year Change 4%

-2%

-4% 2007 2009 2011 2013 2015 2017f Source: Statistics Canada *Forecasts - Bank of Montreal

EMPLOYMENT AND UNEMPLOYMENT

Natural resources are still an important part of the economy in Northern Ontario, while Southern Ontario has become a manufacturing centre. Most Ontarians (70.0 percent), however, are employed in the service industries such as business, finance, tourism, and culture. Ontario's financial services sector generates approximately $54.0 billion in GDP and employs about 350,000 people in over 12,000 financial services firms. Toronto, Ontario is the centre of Canada's financial services industry, and it is North America's third largest financial services hub after New York City and Los Angeles in terms of industry employment. Ontario is a leading North American jurisdiction for information technology (IT), only second to California. Apple, Facebook, Google, and Microsoft are some of the big names who have come to Ontario to recruit engineering talent. Ontario offers IT companies a distinct cost advantage over G7 countries, and business costs are 15.0 percent below the U.S.

Additional items of note are as follows:

• The labour force aged 25 and over exceeds 6.0 million people and approximately 64.0 percent of Ontario residents between 25 and 64 have completed post-secondary schooling.

• According to BMO Capital Markets, Ontario saw a slight drop in employment growth in 2015 to 0.7 percent from last year's 0.8 percent. The job market is expected to improve at 1.2 percent in 2016 and 1.0 percent in 2017. The unemployment rate dropped to 6.8 percent in 2015 and expected to drop to 6.6 percent and 6.5 percent in 2016 and 2017, respectively.

• According to Statistics Canada, employment grew by 79,000 in Ontario between the second quarters of 2015 and 2016, with most of the job gains coming from full-time work (+63,900). The unemployment rate inched up while the participation rate was unchanged over this period. Also, student summer employment decreased in Ontario compared to a year ago. Student employment decreased in June 2016 to 455,300; 4,400 lower (-1.0 percent) than in June 2015. The unemployment rate amongst returning students in June 2016 declined to 13.8 percent, 4.2 percentage points lower than June 2015. The provincial student unemployment rate has fallen below the national student rate of 14.4 percent, an improvement from this point last year. There were less returning students in the labour force in June 2016 compared to June 2015 which could imply more students continuing their studies into the summer months or simply opting not to work.

.. CUSHMAN & Ill Ill lift WAKEFIELD ·11 35 N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 18

The following graph represents yearly historical and projected employment and unemployment rates for Ontario:

Unemployment Rate (Line) 2% 10%

1% 9%

0% 8% -1%

7% -2%

-3% 6% 2007 2009 2011 2013 2015 2017f Source: Statistics Canada *Forecasts - BMO Capital Markets

RETAIL SALES

The retail sector plays a key role in bridging production and consumption, and as a result, the sector has significant direct and indirect effects on the Ontario economy. According to TD Economics, retail sales in Ontario grew at 4.2 percent in 2015 although marginally down from 5.0 percent in the previous year. Retail sales growth is expected rise to 4.9 percent in 2016 before dropping to 2.4 percent in 2017.

Additional details regarding retail trade in Ontario are as below:

• In 2015, Ontario consumers saved approximately $2.0 billion on their gasoline bills, which they were able to spend on other goods and services. Moreover, the federal government's increase in universal child care benefit payments to $360.00 per child, further boosted disposable income. However, the growth in household consumption has been driven primarily by temporary factors and is not sustainable over the medium term. Over the next two years, household consumption growth is expected to slow, falling to 2.5 percent in 2016 and 1.3 percent in 2017.

• In 2016, the depreciation of the Canadian dollar will begin to significantly raise consumer prices and reduce Ontarians' purchasing power. Following the October 2015 federal election, national discussions resumed about enhancing the CPP for all Canadians. Working collaboratively with the federal government and other provinces and territories, Ontario advocated for a national solution for retirement security that benefits all Canadians. As a result of the June 20, 2016 meeting, the government of Ontario, along with eight other provinces and the federal government, reached a historic agreement in principle to enhance the CPP. The Government of Ontario is now acting on this agreement which is expected to reduce the disposable income of approximately 3.5 million Ontario employees, which should reduce household consumption growth significantly.

• CUSHMAN & 111 IllIlla WAKEFIELD •II 36 N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 19

The following graph represents yearly historical and projected retail sales rates for Ontario:

63 (% Change) 5% 4% 3% 2% 1% 0% -1% -2% -3% 2007 2009 2011 2013 2015 2017f Source: Statistics Canada *Forecasts - TD Economics

CONCLUSION AND FUTURE CONSIDERATIONS Since the U.S. market accounts for nearly 80.0 percent of Ontario's total merchandise exports, demand from south of the border is critical to economic growth in Ontario. In the next two years, Ontario is set to benefit from strong economic growth in the U.S. and a weaker Canadian dollar. After growing by an estimated 1.9 percent in 2015, exports of goods and services are projected to grow by 4.3 percent in 2016 and 3.9 percent in 2017. However, Ontario's largest exporting industry - the auto sector - continues to suffer from supply constraints as it struggles to attract new capacity-expanding investments, the future is slightly brighter as plants resume production after unusually long retooling shutdowns in 2015 and past investments in parts manufacturing facilities pay off. Other exports in various categories will also benefit from a growing U.S. economy and a weaker Canadian dollar.

118 CUSHMAN & Ill 111 ... WAKEFIELD ·11 37 N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 20

TORONTO CM ECONOMIC OVERVIEW . .#'~.--~'"'~~-~"""''•,,__

The Toronto Census Metropolitan Area (CMA) is the most populous metropolitan area in Canada, with a population of more than 6.1 million as of 2015, up 1.3 percent over the previous year. The Conference Board of -- < • ',; ..Sudbury }Mol1. lreol. Canada forecasts that population in the Toronto CMA will surpass 6.5 million t-Ottawa ( ronto •Boslon by the end of 2020. The Toronto CMA is also the economic heart of Canada - lo/ home to over 150,000 businesses, including more than one-third of the • ~ ·~ew York •Chicago'~ telpe_velbondh ~~ilodelphio J t 1tts urg 1t country's top 500 industrial firms. The Greater Toronto Area (GTA) is \ ~WosHington responsible for one-fifth of Canada's Gross Domestic Product (GDP), and is "'"""" home to nearly 40.0 percent of the nation's corporate headquarters. The ~ }/ Toronto economy is highly concentrated in the financial, professional & ·---~~J!a~!J business services, information & communications, and manufacturing sectors. Further, Toronto is the third largest financial services centre in North America behind New York and Chicago, and it is also the fastest growing financial services sector in North America.

Additional items of note regarding the Toronto CMA are as follows:

• Since 2009, Toronto has ranked fourth on the Economist Intelligence Unit (EIU)'s Global Livability Ranking.

• The Toronto Stock Exchange and TSX Venture Exchange combined have the largest number of listed companies globally in the oil and gas, mining, and clean-tech sectors.

• Toronto serves as the headquarters for five of Canada's largest banks. Collectively, Toronto based banks manage approximately $3.4 trillion of the nation's assets with the top five controlling approximately 80.0 percent. Further, these banks namely: CIBC (3rd place), TD Bank (41h place), RSC (61h place), Scotiabank (181h place}, and BMO (22nd place), are among the twenty-five strongest in the world. Furthermore, of the fifty-five foreign-based banks operating in Canada, forty-five have their Canadian head offices in the Toronto region.

The boundary map for the GTA and Toronto CMA is as below:

Greater Toronto Area and Census Metropolitan Area

- GmaturToronlo Afoa Batmd:uy Census Motropohtnn Atca Boundary

/.ctA.t• 0111r1ria

~ CUSHMAN & Ill Ill Iii WAKEFIELD 38 •II N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 21

CURRENT TRENDS

Toronto's economy will remain healthy, with real GDP forecast to increase by 2.6 percent this year, following two consecutive years of 2016 (f) Y/Y Change greater than 3.0 percent growth. According to the Conference Board of Canada's latest update - Spring 2016 Outlook, Toronto's construction GDP Growth 2.6% sector had a strong year in 2015, as output expanded by 6.2 percent, recording a 14-year high. Thanks to a surge in new home construction, ~~~employment 6.8% residential activity was responsible for much of this strength. Instead, the non-residential sector is expected to be the main driver of Employment 1.1% Growth construction growth this year. One of the biggest projects now under way is the expansion and upgrade of Toronto's public transit system, Retail Sales 4.8% including: the $5.3 billion Eglinton Crosstown light-rail transit (LRT) line, Growth the $2.6 billion Toronto-York Spadina subway extension, and the $1.0 Housing Starts billion Finch West LRT line. In addition, Ryerson University is building (OOO's) 36.4 the 30-storey Jarvis Street residence tower, set to open in fall 2018 with 191 units for up to 593 students. Another 332 residence units will Source: The Conference Board of Canada be constructed in Ryerson's new Daphne Cockwell Health Sciences Complex. The mixed-used complex will also feature academic space. On the retail front, there is a significant amount of activity in the GTA's larger malls including: Yorkdale, Sherway Gardens, and Square One - which are all undergoing extensive expansions to make room for Nordstrom and Saks Fifth Avenue.

Additional details regarding the area are as follows:

• The TTC Subway extension will include six new stations in the GTA North area on the Yonge-Spadina line, including: Sheppard West, Finch West, York University, Steeles West, Highway 407, and Vaughan Corporate Centre. Service on the new extension which was planned to start in late 2015 has now been delayed until 2017. The project is expected to generate approximately 20,000 direct and indirect jobs.

• Cisco Systems Inc. chose Toronto as one of its four new global innovation hubs, and will invest $100.0 million in the Toronto centre over the next decade. Cisco Systems lnc.'s investment will boost the city's tech credibility, and create job opportunities for Torontonians. It will bring together startups, tech partners, researchers, and industry people to examine new ways of using technology.

DEMOGRAPHIC CHARACTERISTICS

With approximately half of Toronto's population being foreign-born, Toronto is heralded as one of the most multicultural cities in the world. Over 140 languages and dialects are spoken in Toronto, and just over 30.0 percent of Toronto residents speak a language other than English or French at home. Toronto gains population mainly due to international migration but loses a fraction of that due to inter and intra provincial migration. In addition, it is home to hundreds of ethno-cultural organizations including professional associations and community centres.

Additional items of note are as follows:

• Population growth and the age structure are two key drivers of economic behavior in any given market. The age structure of Toronto's population is expected to shift considerably by 2035, primarily due to the aging baby-boomer generation.

• According to the 2011 Census/National Household Survey (the latest of a national survey which is conducted every five years by Statistics Canada), the five fastest-growing municipalities in the GTA are

l!!i CUSHMAN & Ill lllltit WAKEFIELD 39 •:11 N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 22

Milton with a population growth rate of 56.4 percent, followed by Whitchurch-Stouffville at 54.3 percent, Ajax at 21.6 percent, Brampton at 20.8 percent, and Vaughan at 20.7 percent.

• According to the 2011 National Household Survey, 49.1 percent of Toronto's population is composed of visible minorities, and the top three include: South Asian (12.3 percent), Chinese (10.8 percent), and Black (8.5 percent).

HOUSEHOLDS

Although Toronto is the fourth most livable city in the world and one of the best cities to do business, it is also the second most unaffordable housing market in Canada, after Vancouver. The Toronto Real Estate Board's latest affordability index shows that the share of household income that goes to mortgage, property tax and utility payments is around 35.0 percent, the highest it's been in 20 years. As a result, 45.0 percent of people in their twenties in Toronto live with their parents.

Additional considerations include the following:

• Population growth is a key determinant of housing demand in the Toronto CMA. With ever growing population in Toronto, the demand for new homes reached a peak in 2015 with 42,287 units up from 28,929 units last year. Despite the rising home prices, the demand is expected to continue to grow, however, at a slower rate, over the medium term. According to the Conference Board of Canada, the CMA will have a total of 36,360 housing starts in 2016 and another 36,800 units in 2017.

• According to the Conference Board, Toronto's condominium market appears to be slightly overbuilt, and expected a 15.8 percent decline in multiple-unit construction to 26,990 starts. Single-detached starts are expected to fall to 9,370 units in 2016 - an 8.3 percent dip. As a result, total starts will drop to 36,360 units this year, matching the previous 10-year average. Fortunately, the pullback is expected to be short-lived, as starts are forecast to rise by an annual average of 3.6 percent over the next five years.

• According to the City of Toronto's Toronto Economic Bulletin, in the first half of 2016, housing starts in the city of Toronto jumped by 26.3 percent over the same period last year. This increase was mostly due to a second quarter rebound in high-rise housing starts (93.0 percent) over the same quarter last year. In contrast, in the first half of 2016, high-rise housing starts in the "905" area declined by 60.2 percent compared to the same period in 2015. Housing starts in the second quarter of 2016 in the city of Toronto (5,918 units) was the highest recorded number since the fourth quarter of 2012 with the city's share accounting for 59.0 percent of the CMA total. The third quarter of 2016 started strong with a 125.0 percent increase in July, or 1 ,056 starts, over the same month last year. Again, this increase is mostly due to high-rise starts.

The following graph presents historical and projected activity of housing starts in the Toronto CMA:

(OOO's) 50

0 2007 2009 2011 2013 2015 2017f

Source: The Conference Board of Canada

• CUSHMAN & 111 Illlta WAKEFIELD 40

N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 23

GROSS DOMESTIC PRODUCT (GDP)

According to the Conference Board of Canada's Spring 2016 Outlook, real GDP in the Toronto CMA improved by 3.3 percent in 2015, marginaly down from 3.5 percent in the previous year. The growth was driven by healthy gains in manufacturing, transportation and warehousing, and wholesale and retail trade, thanks to a growing economy in the United States (U.S.) and a weaker Canadian dollar. In addition, the real GDP for Toronto is expected to grow by an average of 2.6 percent in 2016 and 2017.

Additional items of note are as follows:

• The Canadian banking industry, headquartered in Toronto, is an essential contributor to the economic growth and well-being of the city. Canada's five largest domestic banks have their head offices in Toronto. The banking sector accounts for approximately 4.2 percent of Ontario's GDP, and Ontarians benefit from more than $456.0 billion in credit authorized to businesses in the province. Of that, approximately $34.0 billion was provided to over 491,000 small and medium-sized enterprises (SMEs).

• According to the Conference Board of Canada, Toronto's manufacturing output is expected to continue its healthy run, with a 2.3 percent gain on tap for 2016, following increases averaging 2.7 percent per year between 2010 and 2015. The local manufacturing sector will benefit from a weaker Canadian dollar, a strengthening U.S. economy, and lower shipping costs due to the dramatic decline in oil prices.

The following graph presents further details of historical and projected GDP activity:

Year-to-Year Change 4%

-2% -Toronto -Ontario -4% 2007 2009 2011 2013 2015 2017f

Source: The Conference Board of Canada, BMO Capital Markets

EMPLOYMENT AND UNEMPLOYMENT

The economy of Toronto is highly concentrated in financial, professional & business services, information & communications, and manufacturing. Canada's five largest banks, which maintain their headquarters in Toronto, are the largest private sector employers in the city- each with more than 10,000 employees in the region.

Additional items of note are as follows:

• According to a recent BMO report, Toronto is the 61h best city in the country to find work in 2016 - a big jump over last year, when the city was ranked 241h. People are continuing to move to Toronto and are finding jobs, however, younger Torontonians are still struggling. The unemployment rate in Toronto fell in the past year to 7.0 percent, but youth unemployment actually rose from 18.0 to 22.0 percent.

• CUSHMAN & Ill IllIla WAKEFIELD • 41

N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 24

• According to the Conference Board of Canada's Spring 2016 Outlook, after contracting by 0.1 percent last year, job opportunites in the Toronto CMA rebounded in 2015, growing at 2.9 percent. As a result, the unemployment rate was down by a full percentage point to 7.0 percent in 2015, and expected to steadily decrease over the next few years, reaching 5.6 percent by the end of 2020. In addition, employment in the CMA will expand by 1.1 percent in 2016 and at an average of 1.7 percent in the following two years.

The following graph represents yearly historical and projected employment and unemployment rates for the Toronto CMA:

% Employment Growth (Bars) 5

4% 9%

3% 8%

2% 7%

1% 6%

0% 5%

-1% 4%

-2% 3% 2007 2009 2011 2013 2015 2017f Source: The Conference Board of Canada

RETAIL SALES

Total retail sales in 2014 totaled over $73.1 billion, a 6.2 percent increase over the previous year, the highest level of growth in years. While the overall retail sales were weighed down by falling gasoline prices, the market still managed to record a growth of 5.2 percent in 2015. Further, the Conference Board of Canada expects that the retail sales will grow at a decreasing rate over the next three years. The growth will be still strong in 2016 at 4.8 percent. According to the Conference Board of Canada, the retail outlook is positive and is reflected in several new mall expansions and store openings. For example, a new $550.0 million expansion of the Sherway Gardens shopping mall now features a Saks Fifth Avenue store, with Nordstrom expected to open in 2017. In Mississauga, the Square One Shopping mall opened its new south wing last March, anchoring the new wing is a 130,000 square feet (sf) Holt Renfrew store. Meanwhile, the mall also welcomed Ontario's first Simons store earlier this year. Accordingly, retail sales are forecast to climb by 4.8 percent this year, contributing to a 3.2 percent output expansion of the region's wholesale and retail trade industry.

Additional details regarding retail trade in the Toronto CMA are as below:

• Simons, one of Canada's oldest family-owned, Quebec-based retailers opened its first GTA store in March 2016 at Square One in Mississauga. Two more stores are expected to open in the Toronto suburb of Scarborough in 2018 and at the Yorkdale Shopping Centre in 2019. Missing from the Simons national expansion plans is Downtown Toronto, one of Canada's toughest retail markets. Simons made a pitch to enter the Eaton Centre in Downtown Toronto, however, that did not materialize. Meanwhile, Nordstrom - a U.S. retailer, opened doors in September this year at the old Sears location in the Eaton Centre.

• Uniqlo, a leading Japanese clothing retailer, announced in January 2015 that it will open two flagship stores in Toronto in the fall of 2016, one at the Yorkdale Shopping Centre and the other at the Toronto Eaton Centre. Uniqlo will occupy 24,000 sf and 28,000 sf at the aforementioned locations, respectively.

~ CUSHMAN & Ill Ill I~ WAKEFIELD ·11 42 N/A JEFFERSON SIDEROAD, RICHMOND HILL MARKET AND LOCATION ANALYSIS 25

The following graph represents yearly historical and projected retail sales rates for the Toronto CMA:

(OOO's) 50

0 2007 2009 2011 2013 2015 2017f

Source: The Conference Boa!d of Canada

CONCLUSION

Toronto is Canada's business and financial capital, and the third largest North American financial services centre after New York and Chicago, with more than 245,000 people working in the financial sector. As many companies have based their head offices in Toronto, it is where most global financial decisions are made.

Further considerations are as follows:

• The economic conditions for the Toronto CMA are expected to remain healthy over the next two years. According to the Conference Board of Canada, real GDP will grow by an average of 2.6 percent in 2016 and 2017, and according to Oxford Economics, GDP growth should average 2.5 percent per year between 2016 and 2020. This means Toronto will be competing with Vancouver to be Canada's fastest growing large metro. Manufacturing, non-residential investment, and services-producing activities will drive the GDP growth in 2016, offsetting a decline in housing starts.

• Townhouses will become the equivalent of the new single-detached home in the GTA. Despite being ground-oriented, the high density nature of townhomes has meant lower price points. Often, families who are unable to afford a single-detached home in expensive neighbourhoods have found that townhomes fulfil their need for space at an affordable price.

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N/A JEFFERSON SIDEROAD, RICHMOND HILL LOCAL AREA OVERVIEW 26

LOCAL AREA OVERVIEW

TOWN OF RICHMOND HILL VERVIEW

Richmond Hill (town) is a municipality located in Southern Ontario. Richmond Hill is a growing community with prestigious housing developments and businesses, quality schools, art galleries, museums, theatres, numerous parks and recreational areas, and are home to many of Canada's leading life science and technology businesses. Richmond Hill is part of the Regional Municipality of York (or York Region), which also comprises Markham, Vaughan, Aurora, East Gwillimbury, King, Newmarket, and Whitchurch-Stouffville. The York Region is situated in the heart of the Toronto CMA (also called the Greater Toronto Area), which is Canada's largest metropolitan area and North America's fifth largest metropolitan area, and is defined as the central City of Toronto, along with the four regional municipalities that surround it: Durham, Halton, Peel, and York. The GTA is a commercial, distribution, financial and an economic centre, and is the third largest financial centre in North America. The region generates about a fifth of Canada's GDP and is home to 40% of Canada's business headquarters. The York Region is also situated within Ontario's Golden Horseshoe, a densely populated and industrialized region home to over 8. 76 million people, making up more than 68% of Ontario's population and 26% of Canada's population. Richmond Hill and Markham have a total land area of 100.95 km 2 and 212.58 km 2, respectively. The York Region and the Toronto CMA have a total land area of 1,762.17 km 2 and 5,905.71 km 2.

The York Region is home to 1.2 million residents and 49,000 business establishments, making it one of Canada's largest municipalities and the second largest business centre in Ontario. The region is home to the operations of 14 Fortune 100 companies, four of Canada's top 10 corporate R&D investors, Canada's second largest information and communications technology (ICT) cluster and global industry leaders in life sciences, clean technology, financial services and advanced manufacturing. The York Region offers various advantages for businesses - including a rapidly growing population, a skilled and diverse workforce, an abundance of available land, affordable yet competitive land prices, the lowest commercial property tax rates in the GTA, proximity to large urban centres, and a strategic, central location within the regional transportation network.

Richmond Hill and the greater York Region have a strategic location with approximately 140 million Canadian and U.S. consumers living within a one-day drive as well as 65% of Canada's 500 largest corporations and 70% of the industrial base within a one-day drive or 1.5-hour flight radius. The municipalities are highly accessible via highways, rail and air. Richmond Hill is served by Highways 7, 404 and 407, and these also connect to Highways

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N/A JEFFERSON SIDEROAD, RICHMOND HILL LOCAL AREA OVERVIEW 27

427, 400 and 401, among others throughout the greater region. YRTNiva offers local and rapid transit services in all nine York Region municipalities. Richmond Hill is located along the Canadian National (CN) Railway System and is served by VIA Rail and GO Transit. Lastly, the region is served by two airports - Toronto Buttonville Municipal Airport and Toronto's Lester B. Pearson International Airport.

POPULATION

Richmond Hill is among the fastest growing communities within Ontario.

According to Statistics Canada, Richmond Hill had a total population of 185,541 in 2011, representing a 14.0% increase from 2006. The town had 58,651 private dwellings occupied by usual residents in 2011, representing a 15.0% increase from 2006.

York Region had a population of 1,032,524 residents in 2011, representing a 15.7% from 2006. The region was home to 323,543 private dwellings occupied by usual residents in 2011.

These population growth rates were higher than the national average growth of 5.9% between 2006-2011.

According to Statistics Canada, Richmond Hill had a median age of 39.5 years in 2011, respectively - and this was slightly lower than 40.4 years in Ontario and 40.6 years in Canada.

POPULATION

POPULATION (2011) % CHANGE (2006-2011) MEDIAN AGE

The Town of Richmond Hill 185,541 14.0% 39.5

The Regional Municipality of York 1,032,524 15.7% 39.3

Toronto CMA 5,583,064 9.2% 38.6

Source: Statistics Canada, Census Profiles 2011

According to the York Region Growth and Development Review (2015), the York Region was home to an estimated 1,166,300 individuals in 2015, with an average annual popµlation growth of 1.9% over the past five years. As of December 2015, the York Region was the third-largest municipality in Ontario (behind the City of Toronto and the Peel Region) and the sixth-largest in Canada Uust behind Calgary). The largest municipalities in York Region in terms of population are Markham (30%), Vaughan (28%) and Richmond Hill (18%). Looking ahead, the region's population is forecast to continue to show strong growth in upcoming years, reaching 1,293,600 by 2021, 1,557,700 by 2031, and 1,790,000 by 2041. The following table illustrates population estimates within municipalities in York Region.

• CUSHMAN & Ill Illll!I WAKEFIELD • 45

N/A JEFFERSON SIDEROAD, RICHMOND HILL LOCAL AREA OVERVIEW 28

YORK REGION - POPULATION DISTRIBUTION (2015)

aRichmond Hill

206,900, 18% Lt East Gwillimbury

II Markham

Ii Aurora

L1J1IWhitchurch-Stouffville 47,500, 4% Lt Newmarket

LI King

Iii Georgina 57,600, 5% •Vaughan Total Population: 1, 166,300

Note: Numerical data has been rounded, some totals may be affected Source: 2015 York Region Growth and Development Review

LABOUR MARKET & INCOME

The Town of Richmond Hill had a labour force of 102,085 and employed 95,055 residents in 2011.

Richmond Hill had an unemployment rate of 6.9% in 2011, respectively - and this was lower than unemployment of 8.6% seen in the Toronto CMA (or GTA) and 8.3% in Ontario.

In general, residents in Richmond Hill have reported relatively lower incomes than in the York Region, yet higher incomes than the Toronto CMA and Ontario.

LABOUR FORCE MARKET & INCOME

RICHMOND YORK TORONTO ONTARIO HILL REGION (CMA)

Total Population Aged 15+ 150,745 832,050 4,546, 140 10,473,665

In the Labour Force 102,085 569,895 3,042,645 6,864,985

Employed 95,055 528,355 2,780,685 6,297,000

Unemployed 7,030 41,540 261,960 567,985

Unemployment Rate(%) 6.9 7.3 8.6 8.3

Median Individual Income ($) 30,532 31,341 29,593 30,526

Average Individual Income($) 45,418 45,883 44,462 42,264

Median Household Income ($) 87,388 89,100 70,365 66,358

Average Household Income ($) 108,979 110,751 95,326 85,772

Source: Statistics Canada, National Household Survey 2011 MAJOR INDUSTRIES & EMPLOYERS

RICHMOND HILL

Richmond Hill has four distinct sectors of strength - professional, scientific and technical services; finance and insurance; information and culture; and health.

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N/A JEFFERSON SIDEROAD, RICHMOND HILL LOCAL AREA OVERVIEW 29

The professional, scientific and technical services sector has established a strong foundation in Richmond Hill. Companies range from small consulting firms to large multi-nationals, and the town has a specific strength in the computer system design subsector. Some local companies in this sector include: Open Text, Comugen, Compuware, FlexlTy, N-Dimension, Visual Defence, Xenos, CiRBA, lllumiti, lntertainment Media, and Epicor.

As Canada's financial capital, the Greater Toronto Area (GTA} and Richmond Hill in particular, is the ideal location for financial institutions and insurance companies. The town is already home to over 1,000 financial sector member companies, including: BMW Group Financial Services, Industrial Commercial Band of China (ICBC), Global Financial, Entrac Technologies, and Sunlife Financial, among others.

The creation of information and cultural products has emerged as one of the most rapidly growing sectors in the local economy. These companies develop products such as internet solutions, books, media, visual arts and specialized design, and cater to the urban reliance on knowledge-based products and services. This sector is comprised of those that produce cultural products as well as those that build and manage the means of distributing those products. Some local companies in this sector include: Rogers Cable, The Helicopter Group, Jesmar Communications, Kenilworth Media, ICON Digital Productions, and Firefly Books, among others.

Richmond Hill is home to a variety of health sector members with specific strengths in generic pharmaceuticals, nutraceuticals, diagnostics, medical devices and eHealth. Some local companies in this sector include: Apotex, Pharmaceutical Partners of Canada, Platinum Naturals, Seroyal, Nobel Biocare, Pro-Lab Diagnostics, and SynFine Research, among others.

Several companies have chosen to locate their head offices in Richmond Hill, including: Acklands-Grainger Inc., Amico, Ash City Inc., BMW Canada, Compugen, Inc., Compugen Corp. of Canada, Decision One Corporation, Drager Medical Canada Inc., Global Financial, lllumiti, LEGO Canada Inc., Lexmark Canada, Johnson, Mazda Canada, Staples Business Depot, Suzuki Canadian Inc., Trimark, Volvo, among many others. The following table highlights top employers within the town.

TOP EMPLOYERS-TOWN OF RICHMOND HILL (2015)

Mackenzie Health Hospital l\ Staples Business Depot (HQ) I Multimatic lnmet ...... i ...... Regional Municipality of York - South Apotex I I Johnson Inc. i Services Centre i ...... t I ...... t I ...... Town of Richmond Hill \ Rogers Communications i Open Text Corporation ...... j...... i ...... Acklands-Grainger Inc. ! Victaulic Company of Canada Ltd. I Amico Corporation ...... + ...... + ...... Walmart Canada ! Ash City Worldwide Inc. I Hibar Systems Limited ...... + ...... + ...... Sheraton Parkway Toronto North \ Compugen Inc. ! BMW

Source: Town of Richmond Hill Economic Development 2015

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N/A JEFFERSON SIDEROAD, RICHMOND HILL LOCAL AREA OVERVIEW 30

BUILDING PERMITS

Richmond Hill has experienced some fluctuations in construction value within recent years. The town had an estimated $284, 104,000 in new construction value in 2015, representing a 9.2% increase from the previous year, and the growth was attributable to more residential and industrial developments. The following table summarizes new construction value within the town over the past five years.

CONSTRUCTION VALUE($ OOO'S) -TOWN OF RICHMOND HILL 2011 2012 2013 2014 2015

Residential 240,380 236,535 194,742 199,910 248,183

Industrial 11,756 14,090 15,452 1,673 13,014

Commercial 18,185 24,554 25,487 47,810 15,613

Institutional 34,433 91,638 15,494 10,663 7,294

Total 304,755 366,817 251, 174 260,055 284,104

% Change 20.4 -31.5 3.5 9.2

Source: York Region Growth and Development Review (2012-2015)

HOUSING STARTS

Richmond Hill has experienced fluctuations in housing starts within recent years. The town had 1,908 housing starts in 2015, representing a 22.8% decline from the previous year. The decrease was partly attributable to figures returning to historical levels after significant development during 2014 and it was widespread across all dwelling types. Year-to-date April 2016 figures have revealed 58 housing starts in the town, representing a 47.3% decline from the same time last year, and the decrease has been entirely due to less row/townhouse developments. The following table summarizes housing starts within Richmond Hill over the past five years.

HOUSING STARTS -TOWN OF RICHMOND HILL

2011 2012 2013 2014 2015 YTDAPR YTDAPR 2015 2016

Single 658 356 439 315 242 20 24

Semi-Detached 8 12 4 14 4 0 8

Row/Townhouse 366 310 270 490 438 90 26

Apartment/Other 148 889 136 1,653 1,224 0 0

Total 1,180 1,567 849 2,472 1,908 110 58

%Change 32.8 -45.8 191.2 -22.8 -47.3

Source: Canadian Mortgage Housing Corporation

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N/A JEFFERSON SIDEROAD, RICHMOND HILL LOCAL AREA OVERVIEW 31

NEIGHBOURHOO VERVIEW

LOCATION The subject property is located on the south side of Jefferson Sideroad, west of Yonge Street. The site is located in the Town of Richmond Hill, a suburb of the City of Toronto.

TRANSPORTATION SYSTEMS The area is generally serviced by VIVA Transit and GO Transit. VIVA has a bus stop approximately 250 m to the north, and Richmond Hill GO Station is located 6.6 km south of the subject. Highway 404 is located 5.6 km to the east of the subject.

PLANNED CHANGES IN ROAD NETWORK None known as of the effective date of this valuation.

NEARBY AND ADJACENT USES The subject property is largely surrounded by low density residential dwellings or vacant land, with a residential subdivision on the other side of Jefferson Sideroad.

SPECIAL HAZARDS OR ADVERSE INFLUENCES We are unaware of any special hazardous/adverse influences pertaining to the subject site and its surrounding uses.

LAND USE CHANGES There are no planned land use changes as at the effective date.

MARKET TRADE AREA

We have identified and detailed statistical data from the subject's Primary Trade Area (based on a 1 km radius) in addition to the Secondary Trade Area is (based on a 3 km radius). Data with these two radius from the subject area summarized below:

118 CUSHMAN & Ill 111 Ila WAKEFIELD 49 •II N/A JEFFERSON SIDEROAD, RICHMOND HILL LOCAL AREA OVERVIEW 32

DEMOGRAPHICS OVERVIEW Population Daytime Population Median Income Median Age Trade Area $108,542 Trade Area: 5,093 2,028 Trade Area: Trade Area: 30 (Daytime): (154%) York (Census York (Census York (Census $92,721 York (Census 1.14M 935.3K 34 Division): Division): Division): (131%) Division): 74,149 Ontario: 13.38M Ontario: Ontario: 34 (105%) $70,545 Canada: 34.08M Canada: Canada: 43 (100%)

* Indices shown are the percent average values of the given region relative to the average national value,

DEMOGRAPHICS POPULATION ANALYSIS Population 2010 2011 2015 2017 2020 2025 Growth Household 5,058 5,058 5,093 5, 117 5,146 5,368 6%

5.4K -e-- Household Population 5.3K

5.2K

5.1K

5K 2010 2011 2015 2017 2020 2025 Year

DEMOGRAPHICS HOUSEHOLD INCOME York (Census Trade Area Ontario Canada Division) Median Income $108,542 $92,721 $74,150 $70,545

CONCLUSION The subject property is located in a neighbourhood that consists of either vacant land or residential uses in the Town of Richmond Hill.

llia CUSHMAN & Ill lllltl WAKEFIELD ·111 50 N/A JEFFERSON SIDEROAD, RICHMOND HILL HIGHEST AND BEST USE 33

HIGHEST AND BEST USE

The principal of the "Highest and Best Use" of a property is fundamental to the concept of market value. Highest and Best Use is defined by the Appraisal Institute of Canada. as:

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

We have evaluated the sites Highest and Best Use both "as if vacant" and "as improved''. The property's Highest and Best Use must meet the following four criteria: The use must be (1) legally permissible; (2) physically possible; (3) financially fe,asible and (4) maximally productive.

ANALYSIS

• According to the Official Plan of the Town of Richmond Hill, the subject property is designated as "Neighbourhood" and "Regional Mixed Use Corridor". The predominant use of land within lands designated "Neighbourhood" is low-rise residential uses. The predominant use of land within the Regional Mixed-Use Corridor designation shall be for mixed-use, transit-oriented development, including medium-density residential developments.

• The subject property is zoned as UR (Urban Zone) under Zoning By-Law 128-04 • As at the effective date, a site plan application had been submitted and it is anticipated to receive final approval in March of 2017. Th.e proposed development will consist of 60 stacked townhouses, 12 back to back townhouses and 24 regular townhouses. Phase 1 is composed entirely of stacked townhouses and has sold 58 of 60 units. Phase 2 is expected to begin marketing soon. The development will have a total gross floor area of 132, 140 square feet. • The current use (vacant land) is considered a legal and confirming use. Based on the Permitted uses of the Official Plan and Zoning By-law the proposed development requires amendments for the proposed development to be a legal and conforming use. It is our understanding that both the client and planning representatives of the Town of Richmond Hill are in discussions to create a site specific by-law for the proposed development. Additionally, the subject development is before the OMS which Counsel for both parties informed the Board of their confidence that all outstanding points of difference can be resolved in the coming months.

Physically Possible • Any development for a site cannot be considered the Highest and Best Use unless that use is physically and functionally possible and adaptable to the characteristics of the site. The size, shape, area, topography and soil conditions may affect the potential uses that can be developed. The physical possibility of development for the subject property also reasonably expects that

~ CUSHMAN & Ill Ill llli WAKEFIELD 51

·- N/A JEFFERSON SIDEROAD, RICHMOND HILL HIGHEST AND BEST USE 34

development can occur without additional costs above those of a typical vacant site. In cases where there are unusual costs associated with a development (i.e. soil clean, demolition, external costs, etc.) these costs should be deducted from the market value estimate.

• The property consists of three parcels of land that total 2.786 acres or 121,352 square feet. Based on its current size I configuration I topography, it is assumed that development of a residential use be physically possible.

• The current residential market is strong within the Town of Richmond with many developers seeking land for development. Phase 1 of the proposed development has sold 58 of 60 unit's preconstruction indicating strong demand for residential development. A future residential development built out to the maximum permitted density would be feasible and marketable, based on the subject's location, site size, shape and currenUfuture land use policy.

• Given the location, surrounding uses, and current sales levels achieved, a residential use built to the maximum permitted units would most likely generate the highest returns to a potential investor.

HIGHEST & BEST USE CONCLUSION

HBU-As Vacant Considering the subject parcel's legally designated land uses, physical characteristics and location within the Town of Richmond Hill, it is our opinion that the Highest and Best Use As Vacant is for development to a residential use.

Conclusion For purposes of this valuation, we have determined the current market value based on its Highest & Best Use. The subject is currently vacant. The valuation will be based on future re-development land to a higher order use.

~ CUSHMAN & 111 Ill I~ WAKEFIELD ·11 52

N/A JEFFERSON SIDEROAD, RICHMOND HILL VALUATION 35

VALUATION VALUATION METHODOLOGY

There are generally four accepted methods of valuing real property:

• Direct Comparison Approach;

• Cost Approach; and

• Income Approach

The selection of the relevant methodology depends on the characteristics of the real estate being analyzed.

1) The Direct Comparison Approach considers the cost of acquiring equally desirable and valuable substitute properties, indicated by transactions of comparable properties, within the market area. The characteristics of the sale properties are compared to the Subject property on the basis of time and such features as location, configuration, planning and size.

2) The Cost Approach to value is based on the economic principle of substitution, which states that the value of a property should not be more than the amount by which one can develop (by purchase of a site and construction of a building without undue delay) a property of equal desirability and utility.

3) The Income Approach to value is used to estimate real estate value based on property income generating capabilities using the Direct Capitalization Method or the Discounted Cash Flow method.

There are two traditional methods to income valuations.

a) Direct Capitalization Method - division of a required yield (inverse of a required income multiple) into Net Operating Income to yield a value.

b) Discounted Cash Flow Method is a method that accounts for the anticipated growth or decline in income over the term of a prescribed holding period.

SELECTION OF VALUATION METHODOLOGY

The Direct Comparison Approach is the preferred method when sales of comparable properties are available. A Land Residual Approach was developed based on speculative project costs (provided by client), future revenue estimates, absorption period, profit and the development timing. The Cost Approach and Income Approach were not developed in this report, as they were not considered relevant in the valuation of the Subject property (Future development land). Consequently, the valuation methodologies employed in this report were limited to the Direct Comparison Approach and Land Residual Approach.

ll CUSHMAN & 111 lllll!fa WAKEFIELD • 53

N/A JEFFERSON SIDEROAD, RICHMOND HILL DIRECT COMPARISON APPROACH 36

DIRECT COMPARISON APPROACH The Direct Comparison Approach is based on the Principle of Substitution which maintains that a prudent purchaser would not pay more for a property than the cost to purchase a suitable alternative property which exhibits similar physical characteristics, tenancy, location, etc. Within this approach, the property being valued is compared to properties that have sold recently or are currently listed and are considered to be relatively similar to the subject property. Typically, a unit of comparison (i.e. sale price per square foot, sale price per acre) is used to facilitate the analysis, therefore the unit of comparison being used is the sale price per square foot.

As one sale is not necessarily indicative of market value, an appraiser examines a number of market transactions. When properly reconciled, trends emerge, leading to the estimate of market value of the property being appraised.

A search in the market for similar type properties indicated 5 comparable transactions sold between January 29, 2015 and January 27, 2017. The sale prices ranged from $8,353,000 to $12,000,000 - an average of $9,494,600. When converted into a unit rate, the sales range from $83 psf to $224 psf - an average of $147 psf.

Comparable Sales 'Tran~ctlons· • ~ .. . Site Area (square Sale Price Per '. No Address Sale Date Sale Price feet S .Ft: 185-215 Major Mackenzie Driw East, Richmond Hill August 17, 2016 $8,353,000 46,435 $180 2 272/286/296/298 King Rd & 4/6/8 Parker Aw, Richmond Hill August 23, 2016 $12,000,000 102,976 $117 3 123 Ruggles Aw & 152/160/166/1721178 Major Mackenzie Dr E, Richmond Hi January 27, 2017 $8,490,000 37,897 $224 4 1 Parker Awnue I 2-4 Shawr Street I 234-252 King Road, Richmond Hill Nowmber 4, 2016 $8,580,002 63,946 $134 5 39, 53 & 67 Jefferson Sideroad, Richmond Hill January 29, 2015 $10,050,000 121,352 $83

Minimum: January 29, 2015 $8,353,000 37,897 $83

Maximum: January 27, 2017 $12,000,000 121,352 $224

Average: June 14, 2016 $9,494,600 74,521 $147

Please note that Index 3 is a land assembly with the final two of 6 parcels being acquired on January 27th, 2017.

tll CUSHMAN & 111 lllIla WAKEFIELD 54 •II N/A JEFFERSON SIDEROAD, RICHMOND HILL DIRECT COMPARISON APPROACH 37

COMPARABLE SALES MAP

Maple Golf

Richmond Hill

~st Golf

l!l CUSHMAN & 111 lllIlla WAKEFIELD •II 55 N/A JEFFERSON SIDEROAD, RICHMOND HILL DIRECT COMPARISON APPROACH 38

COMPARABLE TRANSACTION INDEX 1 '185-215 Major Mackenzie Drive East, Richmond Hill

SALE DATA iSale Status:

Mackenzie Dri1.e Street

Purchaser Name:

PRICE STRUCTURE PROPERTY CHARACTERISTICS Cash Down: $8,353,000 [100.00% Future Residential Land VTB/Assumed: $0 io.00% -~·-~·-----~--- Total Price: 1$8,353,000 j100.00% Price .Notes: I RM3

TRANSACTION COMMENTS The subject is a land assembly of six parcels by the purchaser. At the time of sale, the property was impro1.ed with six single family detached residential dwellings. As of December, 2016, no applications had been submitted to the Town of Richmond Hill Planning Department regarding de1.elopment of the property. As a result of the land use regulations in place at the time of sale, a rezoning application and a site plan application are required for de1.elopment to commence.

Alexander Mackenzie Richmond Hill Ill HighGl School. . Public Library

@ Ml Pleasant Richmond Hiii Christian Pilrk Community Church \-\\\\f.'j\~'11'01 _,_

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COMPARABLE TRANSACTION INDEX 2 .272/286/296/298 King Road & 4/6/8 Parker Avenue, Richmond Hill

SALE DATA Sale Status: Final ]272/286/296/298 King Road & 4/6/8 Parker A-.enue, Richmond Address: Hill Street

PRICE STRUCTURE PROPERTY CHARACTERISTICS Cash Down: $10,000,000183.33% General Description: '.Future Residential Land VTB/Assumed: $2,000,000 i16.67% Site Size (sq.ft.}: ;102,976 Total Price: $12,000,0001100.00% Price Notes: Cash+ VTB

TRANSACTION COMMENTS The subject is a land assembly by the purchaser. An Official Plan Amendment (No. D01-15002), a Rezoning Application (No. D02-15010), a Site Plan Application (No. D06-15028) and a Draft Plan of Subdivision Application (No. Do-03-15001) were submitted on March 13, 2015 pertaining to the land in this transaction and adjacent parcels. The Applications proposed the de-.elopment of 23 street townhouses and 1o semi-detached houses. As of August, 2016, the Applications were still in circulation. Our discussions with representati-.es of the Town of Richmond Hill Planning Department indicated that the conditions were not considered to be onerous.

OaliRidges Meadows

Ozetk Pork

o\d Colony fid :MPERANCEVILLE ill

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COMPARABLE TRANSACTION INDEX 3 123 Ruggles Ave & 152/160/166/172/178 Major Mackenzie Dr E, Richmond Hill

SALE DATA !Final !123 Ruggles Awi & 1521160/166/1721178 Major Mackenzie Dr

Mackenzie Driwi Street

.Vendor Name: Purchaser Name: Netthaus Design-Build

PRICE STRUCTURE PROPERTY CHARACTERISTICS Cash Down: i $8,490,000 100.00% ~------VTB/Assumed: 1$0 0.00% Total Price: J$8,490,000 100.00% Price Notes: 'Cash

TRANSACTION COMMENTS The property is part of a land assembly by the purchaser. The subject is composed of six parcels, and each was improwid with a single family detached residential dwelling at the time of sale. As of December, 2016, no applications had been submitted to the Town of Richmond Hill Planning Department regarding dewilopment of the property. As a result of the land use regulations in place at the time of sale, only a site plan application is required for

Town Park Hiil GOE)

, Alexander Mackenzie Richmond Hill (p '11 ~ High School Public Library L:.J "'~ GI VJ fill

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COMPARABLE TRANSACTION INDEX 4 1 Parker Avenue I 2-4 Shaver Street I 234-252 King Road, Richmond Hill

SALE DATA ·Final ; 1 Parker A-.enue I 2-4 Sha-.er Street I 234-252 King Road,

North side of King Road, west of Yonge Street 2016

PRICE STRUCTURE PROPERTY CHARACTERISTICS

·cash Down: ; $8,580,002 l100.00% Residential Land ;VTB/Assumed: ,$0 lo.00% ~~~· ~-~~~~·~~~-~ .Total Price: $8,580,002 1100.00% Notes: !cash Planning (OP/Zoning): :oak Ridges Local Centre & Neighbourhoods I GC1

TRANSACTION COMMENTS The subject property is a land assembly of 7 parcels by the purchaser. At the time of sale, the each property was impro-.ed with a single family detached residential dwelling. As of No-.ember, 2016, no applications had been submitted to the Town of Richmond Hill Planning Department regarding de-.elopment of the property. As a result of the land use regulations in place at the time of sale, an Official Plan Amendment, a rezoning application and a site plan application are required for de-.elopment to commence. It is our understanding that the Purchaser had acquired the property in order to construct one medium residential 11e,e1nnm1en1

Bradstock P,

Herbert H. Carnegie Public School G · Twelve

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COMPARABLE TRANSACTION INDEX 5 39, 53 & 67 Jefferson Side road, Richmond Hill

SALE DATA

St.

PRICE STRUCTURE PROPERTY CHARACTERISTICS

Cash Down: $10,050,000i100.00% General Description: 'Future Medium De~~_l'~es~~ti

Total Price: $10,050,000i100.00% ~-Size (acres): 2.78 -~~~~~~-~~-~~~~~~·~~~- Price Notes: :Cash Planning (OP/Zoning): 'Regional Mixed Use Area, Neighbourhood I UR

TRANSACTION COMMENTS The Town of Richmond Hill Official Plan designates the property Regional Mixed Use Corridor and Neighbourhood Area. The Zoning By-law classifies the property UR under Zoning By-law No. 128-04, an urban residential classification. The subject property is part of a land assembly. The total consideration for the lands included in the de>.elopment assembly is $10,050,000 and the total assembly site area is 2.779 acres. A Rezoning Application (No. 002- 14011) and a Site Plan Application (No. 006-14029) were submitted on April 14, 2014 pertaining to the lands in this land assembly. The Applications proposed the de>.elopment of 90 residential units including 24 standard street townhouses, 16 back-to-back townhouses, and 50 stacked townhouses. The de>.elopment would ha>.e a total gross floor area of approximately 133,455 square feet, and would ha>.e 179 parking spaces. As of February 2015, the Applications were still in circulation and ha>.e been appealed to the OMB.

JEFFERSON

1111 CUSHMAN & 111 111 Ila WAKEFIELD • 60 II N/A JEFFERSON SIDEROAD, RICHMOND HILL DIRECT COMPARISON APPROACH 43

In valuing the subject site, comparison was made to each of the index sales. The basis for comparison included the consideration of the following:

ANALYSIS

Sale Date • Where the market is changing, it may be necessary to adjust prices to reflect the time difference between the date of sale of a comparable property and the date of valuation. We have utilized an inflation adjustment of 7.50% per annum.

Property Rights Conveyed • When real property rights are sold, they may be the sole subject of the contract or the contract may include other rights. In the sales comparison analysis, it is pertinent that the property rights of the comparable sale be similar to the property rights of the subject property. All the sales considered were fee simple transfers, no adjustments were necessary.

Financing Terms • The transaction price of one property may differ from that of a similar property due to different financing arrangements. Financing arrangements may include existing mortgages at favourable interest rates or paying cash to a lender so that a mortgage with a below-market interest rate could be offered. An adjustment was made to Index 2 for VTB Financing.

Conditions of Sale • Adjustments for conditions of sale usually reflect the motivations of the purchaser and vendor. In some cases the conditions of sale significantly affect transaction prices. Sales that reflect unusual situations require an appropriate adjustment for motivation or sale condition. For example, power-of-sale conditions involve a certain degree of urgency on part of the lender - leading to a somewhat lower sale price than what would otherwise be expected. All the sales considered were normal market transactions with no undue motivation, no adjustments were necessary.

Location • An adjustment for location within a market area may be required when the locational characteristics of a comparable property are different from those of the subject property. Excessive locational differences may disqualify a property from use as a comparable. Although no location is inherently desirable or undesirable, the market recognizes that one location is better than, similar to, or worse than another. Locational adjustments were based on both geographic and neighborhood location.

Size • The price per square foot of land is expected to vary with the size of the subject lands. Generally the price per square foot decreases as lot size increases where all other features are similar. This is typically referred to as marginal diminishing utility.

Site Utility • Adjustments were necessary for sites with inferior or superior configuration, topography, size, frontage and overall development characteristics.

Planning (OP/Zoning) • Properties with superior Planning at the time of sale would typically trade at a higher rate when compared to properties with little to no zoning in-place for residential development. Considerations such as development timeline, pending Zoning amendments, and Official Plan amendments are factored in.

Servicing/Improvements • Sites that require little additional internal servicing to support development or have income producing improvements that continue to utilize while site planning and applications are submitted or pending approvals are considered superior then sites that are vacant and unimproved with no income potential.

The Appraisal Institute of Canada recommends the use of "paired sales analysis" in the derivation of adjustments. This involves locating two very similar sales that sell in a similar time period. If the two sales differ in only one key feature, then the difference in sale price can be used as the "market indicator" for the adjustment for that feature. In practice, this concept usually only applies to newer homes in the subdivision. Rural, commercial and industrial properties tend to be unique, and therefore in practice it is not usually possible to find paired sales to derive adjustments. In the absence of paired sales, it is the appraisers' experience and judgment (based on observation) which is used for adjustments. A table of the relative adjustments is presented on the following page.

• CUSHMAN & 111 Illllll WAKEFIELD • II 61 N/ A JEFFERSON SIDEROAD, RICHMOND HILL DIRECT COMPARISON APPROACH 44

123 Ruggles Ave & 185-215 M3jor 2721286/296/298 King Rd 1 Parker Avenue I 2-4 39, 53 & 67 Jefferson 1521160/166/1721178 39, 53 & 67 Jefferson Address: M3ckenzie Drive E'ast, & 4/6/8 Parker Ave, Shaver Street/ 234-252 Sideroad, Richmond Hill M3jor M3ckenzie Dr E, Sideroad, Richmond Hill Richmond Hill Richmond Hill King Road, Richmond Hill Richmond Hill

Sale Date/Effective Date: January 19, 2017 August 17, 2016 August 23, 2016 January 27, 2017 Noverrber 4, 2016 January 29, 2015 Site Area (square feet) 121,352 46,435 102,976 37,897 63,946 121,352 Site Area (square feet) 121,358.160 46,435 102,976 37,897 63,946 121,352 Sale Price: $8,353,000 $12,000,000 $8,490,000 $8,580,002 $10,050,000 Sale Price Per Sq.Ft: $180 $117 $224 $134 $83 alue Adjustments Description Description I Adj. Description I Adj. Description I Adj. Description I Adj. Description I Adj. Property Rights Conveyed Fee Simple I 0.00% Fee Simple I 0.00% Fee Simple I 0.00% Fee Simple I 0.00% Fee Simple I 0.00% Financing Terms Cash I 0.00% Cash +VTB I -2.50% Cash I 0.00% Cash I 0.00% Cash. I 0.00% Conditions of Sale Norrral I 0.00% Norrral I 0.00% Norrral I 0.00% Norrral I 0.00% Norrral I 0.00% Time/Market Condition January 19, 2017 Inferior 3.Wo/o Inferior 3.00% Sinilar 0.00% Inferior 1.50% Inferior 15.40%

Corrpound Annual Growth Rate: 7.50% Time/Market Adjusted Price $185 $117 $224 $136 $96 Location Good Superior 1-10.00%1 Inferior 5.00% Superior -10.00% Inferior 5.00% Sinilar 0.00% Site Area (square feet) 121,352 46.435 I -7.49% I 102,976 -1.84% 37,897 -8.35% 63,946 -5.74% 121,352 0.00%

2.50% Per 25,000 sq.ft/acre

Site utility Good Inferior 7.50% Inferior 2.50% Inferior 5.00% Inferior 5.00% Sinilar 0.00% Planning (OP/Zoning) SPA Resubnitted Inferior 10.00% Sinilar 0.00% Inferior 10.00% Inferior 10.00% Inferior 20.00% Servicing/Improvements Available to the Site Sinilar I 0.00% Sinilar I 0.00% Sinilar I 0.00% Sinilar I 0.00% Sinilar I 0.00% Total Net %Adjustments 3.11% 6.16% -3.35% 15.76% 35.40%

Overall Adjusted Rate Based On: Sale Price Per Sq.Ft: $185 $124 $217 $155 $112

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SUMMARY OF DJUSTMENTS

Adjustment Summary Adjustment Summary lndex1 lndex2 lndex3 lndex4 lndex5 $250 Unadjusted Rate $180 $117 $224 $134 $83 Adjustment Items

Ftoperty Rights Conveyed 0.00% 0.00% 0.00% 0.00% 0.00% $200 Rnancing Terms 0.00% -2.50% 0.00% 0.00% 0.00% Conditions of Sale 0.00% 0.00% 0.00% 0.00% 0.00% $150 ·-- lime/Market Condttion 3.10% 3.00% 0.00% 1.50% 15.40% 'ti; .,.c. Value After Trans Adj $185 $117 $224 $136 $96 $100 ·------Location -10.00% 5.00% -10.00% 5.00% 0.00%

Stte Area (square feet) -7.49% -1.84% -8.35% -5.74% 0.00% $50 - -- - Stte Utff~y 7.50% 2.50% 5.00% 5.00% 0.00% Aanning (OP/Zoning) 10.00% 0.00% 10.00% 10.00% 20.00% so Servicingli'rproverrents 0.00% 0.00% 0.00% 0.00% 0.00% lrx!ex 1 lrx!~lrx!~lrx!~lrx!~ I• Unadjusted Rate $180 $117 $224 $134 $83 Total Net Adjustments 3.11% 6.16% -3.35% 15.76% 35.40% I I I I I I Adjusled Rate $185 I $124 I $217 I $155 I $112 I Adjusted Rate $185 $124 $217 $155 $112

Subsequent to the adjustment process, prices ranged from $112 psf to $217 psf- an average of $159 psf. The subject property is a single parcel of land located in close proximity to the intersection of Yonge Street and Jefferson Sideroad in the Town of Richmond Hill.

At the effective date of this appraisal report, the developer (Client) has submitted all necessary planning applications to the Town of Richmond Hill for the development of the subject site. As at the effective date, the proposed development had been appealed by the client to the Ontario Municipal Board due to the failure of the Town of Richmond Hill making a decision. A pre-hearing conference was held in December 2016, with a second pre-hearing conference schedule for March 81h, 2017. The site plan application had been submitted and is expected to receive final approval in March of 2017 following the OMB hearings. The proposed development will consist of 60 stacked townhouses, 12 back-to-back townhouses and 24 regular townhouses.

It is important to note that Phase 1 of the proposed development (60 Stacked Townhouses) has been actively marketed and a total of 58 units have been sold pre-construction. This information was provided to us by the client. In addition to the current status of Phase 1, the client has informed us that Phase 2 is expected to begin marketing soon.

Based on the likely approval of the site plan and the first phase of stacked townhouses (58 of 60 units being sold), a rate at the upper end of the adjusted range is appropriate for the subject property.

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Based upon the above analysis, it is our opinion that the market value of the subject property by the Direct Comparison Approach, as at the effective date was:

Direct Comparison Approach Conclusion Current Market Value: "As-ls" Site Area (square feet) 121,352 Sale Price Per Sq.Ft: $200 Estirrated Market Value: $24,270,400 Final Estimated Value. (rounded): $24,300,000

TWENTY FOUR MILLION THREE HUNDRED THOUSAND DOLLARS

$24,300,000 (rounded)

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N/A JEFFERSON SIDEROAD, RICHMOND HILL LAND RESIDUAL APPROACH 47

LAND RESIDUAL APPROACH

We have developed a Land Residual Model within the report based in the development concept of a total of 96 residential units. The development is divided into three built-forms with a total of 135,552 square feet of sellable residential space. The development is divided between 60 units developed within a 3-storey stacked townhouse buildings, traditional row-townhouse buildings with a total of 24 units and 12 back-to-back townhouses.

This valuation method is viable since a prudent purchaser would analyze the property based on the future development potential of the site. Once developed, the Subject property will be able to collect revenue from the sale of each of the 96 residential units, purchaser upgrades, and 30 remaining parking spots.

For this approach, we have analyzed the potential (actual) revenue that will be generated from the project (i.e. the actual sales of the units). Once we have estimated the total revenue generated from the project, we are able to deduct the estimated cost to construct the improvements - including, but not limited to, hard and soft construction costs, site servicing costs, development charge payments, consulting and planning fees, sales & marketing, development profit, contingency, etc. We will also take into consideration any development credits back to the developer from the local municipality. The remaining value is the market value of the underlying lands "as if vacant".

REVENUE NALYSIS

RESIDENTIAL UNITS

The client has divided the sales of the development into two phases. Phase 1 of the development are the 60 units located within the 3-Storey Stacked Townhouses. Phase 2 of the development will be the 36 units that are being developed as 24 standard townhomes and 12 back-to-back townhomes.

As shown by the table below, Phase 1 of the development has sold (pre-construction) a total of 58 residential (primary) units according to data provided by the client. The subject has not sold any of the 30 available parking spaces. Phase 2 of the development is currently being marketed and pre-construction sales have yet to occur. It is anticipated that sales will be brisk and absorption fairly rapid when taking into consideration sales of Phase 1 and the current housing market in Richmond Hill.

Pre-Construction Sales & Marketed Price Pre-Construction Sales· Stacked Townhomes (Phase 1) No. of Units Units Sold Awrage Selling Price Avg P.S.F Parking 60 58 $510,207 $481 1 per unit included

Pre-Construction Sales - Back to Back Townhomes (Phase 2) No. of Units Units Sold Awrage Listing Price Avg P.S.F Parking 12 0 $895,000 $520 Included

Pre-Construction Sales - Regular (Street) Townhomes (Phase 2) No. of Units Units Sold Awrage Listing Price Avg P.S.F Parking 24 0 $1, 175, 000 $550 Included

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The current revenues of the Phase 1 pre-construction sales is listed below:

Revenue Data Ideal Jefferson - Richmond Hill Phase 1 Stacked Townhomes Total Units 60 Total Units Sold 58 Total GFA of Units Sold (Sq.Ft.) 61,538 Total Re\.enue of Units Sold $29,592,000 A\.erage Price per Unit Sold $510,207

To determine the rates of the unsold inventory of Phase 1 as well as determining applicable rates of the 36 units in Phase 2, we have searched the Town of Richmond Hill for market for sales of townhomes that have sold or are currently being marketed. Our research indicated a variety of current market sales and listings of residential townhomes units within Richmond Hill. The chart below outlines actual sales of existing units and listings of current units:

PHASE 1

Remaining Inventory

As indicated previously, the client has sold (Pre-construction) 58 of 60 units at an average rate of $481 psf or $510,207 per unit. Due to the limited supply remaining, we find it reasonable to conclude that the final two units will sell at a rate of $495 psf or $525,000 per unit. Therefore, we have concluded the potential remaining revenue for units located in Phase 1 to be $1,050,000.

Parking Revenue

The subject development will have a total of 90 underground parking spaces. According to the developer, 60 of the 90 spaces are inclusive of the purchase price. The developer plans to have 30 remaining for sale at a price of $25,000. The total estimated parking revenue is estimated at $750,000.

PHASE 2

This portion of the development is currently being marketed and interested buyers are currently in the sales registration process. No units have been sold to date. Therefore, to determine a reasonable market rate of the units (24 Regular Townhomes & 12 Back to Back Townhomes) we have searched for a variety of current market sales and listings of residential townhomes units within Richmond Hill. The chart below outlines actual sales of existing units and listings of current units in Richmond Hill:

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Back to Back Townhomes

The chart below indicates current market sales of back to back townhomes within Richmond Hill.

~ . • Current Market Sales - Back to Back Townhomes Area I Estimated No Address Price Date Price per SF; Municipality Size (sf) 28 Ambler Lane Richmond Hill $940,000 8/3/2016 2,110 $445 2 12 Ambler Lane Richmond Hill $1,008,000 9/8/2016 2,019 $499 3 Lot 34 Ambler Lane Richmond Hill $785,000 5/19/2016 1,904 $412 4 42 Lafferty Lane Richmond Hill $860,000 5/15/2016 2,063 $417 5 8 Ambler Lane Richmond Hill $913,000 5/5/2016 2,110 $433 6 Lot 37 Ambler Lane Richmond Hill $933,000 4/28/2016 2,400 $389 7 Lot 33 Ambler Lane Richmond Hill $792,500 4/19/2016 1,904 $416 8 Lot 36 Ambler Lane Richmond Hill $980,000 4/13/2016 2,460 $398 9 32 Lafferty Lane Richmond Hill $850,000 2/17/2016 2,108 $403 Minimum $785,000 1,904 $389 Maximum $1,008,000 2,460 $499 Average $895,722 2,120 $424

The sales of back to back townhomes listed above range from $785,000 to $1,008,000 per unit with an average of $895,722. When converted to a unit rate, the sales ranged from $389 to $499 per square foot with an average of $424 psf. The size of the units range between 1,904 ft2 to 2,460 ft2 with an average of 2, 120 ft2. The subject units will have an average size of 1,721 square feet.

The most recent sale having occurred in September 81h, 2016. Based on the residential market conditions of the Greater Toronto Market, it is reasonable to conclude that these rates have increased since. Additionally, the proposed size of the back-to-back townhomes is smaller than the comparables. It is normal for units to be sold at a higher rate per square foot the smaller the units with all other things being similar.

Based on current market conditions, we feel it is reasonable to conclude an average unit rate of $900,000 per unit or $523 per square foot of unit area for total revenues of $10,800,000. Regular Townhomes

The chart below indicates current market sales of regular town homes within Richmond Hill and in close proximity to the subject.

. · · Current Market Sales - Regular Townhomes

Area I Estimated No Address Price Date Price per SF' Municipality Size (sf) 80 Port Arthur Cres Richmond Hill $999,990 1/9/2017 2,224 $450 2 94 Port Arthur Cres Richmond Hill $1,000,000 10/27/2016 2,446 $409 3 51 Port Arthur Cres Richmond Hill $950,000 1/10/2017 1,944 $489 4 5 Port Arthur Cres Richmond Hill $820,000 10/8/2016 1,843 $445 5 1 Port Arthur Cres Richmond Hill $1,080,000 1/24/2017 2,224 $486 7 48 Helliwell Cres Richmond Hill $1,230,000 1/3/2017 2,738 $449 8 Forest Hill Homes - The Green Ravine Model Richmond Hill $1,099,990 Listing 2,611 $421 9 Forest Hill Homes - The Green Valley Ill Model Richmond Hill $999,990 Listing 1,944 $514 10 Forest Hill Homes - The Green Hill Model Richmond Hill $1,059,990 Listing 2,254 $470 11 Forest Hill Homes - The Green Ridge Ill Model Richmond Hill $1, 199,990 Listing 2,705 $444 12 Country Wide Homes - _Chelse_a Maple Station Richmond Hill $999,990 Listing 1,994 $501 Minimum $820,000 1,843 $409 Maximum $1,230,000 2,738 $514 Average $1,039,995 2,266 $462

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The sales of regular town homes listed above range from $820,000 to $1 ,230,000 per unit with an average of $1 ,039,995. On a per square foot of unit size from $409 to $514 per square foot with an average of $464 psf. The size of the units range between 1 ,843 ft2 to 2,738 ft2 with an average of 2,266 ft2. The subject units will have an average size of 2, 135 square feet. The most recent sale having occurred in January 24, 2017. Based on the residential market conditions of the Greater Toronto Market, it is reasonable to conclude that these rates are considered market. Based on current market conditions, we feel it is reasonable to conclude an average unit rate of $1,100,000 per unit or $515 per square foot of unit area for total revenues of $26,400,000.

UNIT UPGRADES

It is common in the residential development market for buyers to purchase upgrades directly from the developer. These can include items such as finishes, flooring, hardware upgrades, custom finishes, etc. This is an additional revenue item that must be taken into consideration with this analysis. Not every purchaser will upgrade a unit, and therefore we have concluded an average rate of $30,000 per unit. Total revenues from upgrade charges is $2,880,000.

REVENUE CONC!JJSION

Therefore, based on the data analyzed above, we estimate total revenue estimates for the development to be estimated at $71, 172,000

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EXPENSE NALYSIS

HARD CONSTRUCTION COSTS

The client provided us with the construction budget for the proposed development. For the purpose of this analysis, we have referred to two (2) published costing guides to determine an applicable cost estimate as a check on the client's values.

Costing Guide Information • · ' · Source Type P.S.F Comments The unit rates for the building types described are an a1.erage Wood Framed Row range only for that particular type of building. The unit costs co1.er Altus Canadian Cost Townhouse with Unfinished $90 psf - $145 psf construction costs only. Soft Cost are excluded from the Guide 2017 Basement estimate Built~in Garages $20 - $58 psf of garage area Cost in addition to residential units

Town Houses (401) $108 - $204 psf Costing guide generally used by appraisers. Consists of more Marshall & Swift Section 12, Page 31 *Includes Time and Local than 30,000 component costs, 01.er 300 building types and 3 Costing Guide August 2016 Multipliers cost estimating approaches. Built-in Parking $39 - $59 psf Cost in addition to the $99 - $135 psi

The unit rates for the building types described are an a1.erage Wood Framed 3-Storey range only for that particular type of building. The unit costs co1.er $125 psf- $160 psf Altus Canadian Cost Stacked Townhouse construction costs only. Soft Cost are excluded from the Guide 2017 estimate One Le1.el Underground $85 - $140 psf Cost in addition to residential units Parking

Multiple Residences $71 - $183 psf Costing guide generally used by appraisers. Consists of more Class D *Includes Time and Local than 30,000 component costs, 01.er 300 building types and 3 Marshall & Swift Section 12, Page 16 Multipliers cost estimating approaches. Costing Guide August 2016 One Le1.el Underground $39 - $59 psi Cost in addition to the $99 - $135 psf Parking

Based on the information above, we have estimated a hard cost rate of $100 psf buildable area for the Regular and Back to Back Townhomes. This equals a rate of $199,700 per unit or $7, 189,200. We have estimated a hard cost rate of $125 psf buildable area for the Stacked Townhomes. This equals a rate of $132,625 per unit or $7,957,500. We have concluded towards the middle end of the range and taken into consideration the clients budgeted costs of the proposed development

Roadways and Servicing is based on the client budget of $1,000,000.

The stacked townhouse development will encompass a one level underground parking garage with a total of 90 parking spaces. According to the client, the parking garage will have a GFA of +/- 35,000 ft2. Based on the cost estimates above ranging between $39-$59 psf (Marshall & Swift), $85-$140 psf (Altus Cost Guide), the estimated total cost is between $1, 365, 000 and $4, 900, 000. The client has provided us with an estimated/budgeted cost of $3,200,000 which we consider reasonable based on the comparison with cost guide estimates.

Hard Construction Costs (Contingency): We have built in a Contingency cost of 2.50% of hard costs or $483,668.

The total estimated hard cost for the subject development has been estimated to be $19,830,368

'1a CUSHMAN & Ill 111 lfa WAKEFIELD • 69

N/A JEFFERSON SIDEROAD, RICHMOND HILL LAND RESIDUAL APPROACH 52

ADDITIONAL {SOFT) COST ESTIMATES

Soft costs include such items as municipal development charges, architects, consulting fees, engineering fees, etc., to bring the lands to a ready to build state as well as the lands proportionate share of sales commissions, legal fee costs and other pre and post construction expenses.

For the purpose of this assignment, we have reviewed the subject budget and have made the following conclusions for Soft Costs.

IRESIDENTIAl !DEVELOPMENT CHARGES & MUNICIPAL COSTS ('YORK REGION & RICHMOND Hill):

The Town of Richmond Hill has specific development charges for developers which includes charges collected by York Region. The charge per unit in an apartment dwelling according to the rate as of the Effective Date is equal to $55,717 per unit. The total cost of Residential Development charges due to the Town of Richmond and York Region based on the development of 96 units is $5,348,832

ADDITIONAL COST ESTIMATES

Development Costs: In conjunction with the client's budget we have allocated expense such as Property Taxes, Land Purchase Closing Costs, Building Permit, Road Sharing Agreement, Land Title Insurance and Appraisals. We have estimated this cost to be approximately 1.0% of potential revenue or $714,720.

Legal & Consulting: We have budgeted a rate of 1.0% of total revenues for Legal and Administration charges or $714,720. As with most developments, outside consultants are typically required as part of the development planning process. These can include architects, planning consultants, environmental site assessments, engineers, FF & E, landscaping architect, interior designer, geotechnical consultants, etc.

Marketing & Administration: We have· budgeted a total of $1,072,080 or 1.5% of total revenues. Items include Insurance, Advertising, Project Management Fees, etc.

Sales Commissions: The client's budget included an estimate of sales comm1ss1ons that amounted to approximately 2% of total revenues. Based on our sales revenue projections, we have estimated sales commissions at a total of $3,666, 134.

Financing: Typically in the market, financing charges range from 2.0% to 5.0% of total revenues. The client provided a budget for financing costs that includes construction interest cost, interim land loan interest, fees on capital raise, deposit insurance fees, project monitoring fee, letter of credit fee, service charges and a commitment fee. The total of all these costs amounts to $2,738,000 or 3.83% of total revenues.

Contingency (Soft Costs): We have built in a Contingency cost of 2.50% of hard costs or $483,668 as soft costs are less predictable then hard costs.

REMAINING COSTS

Developers Profit: Development land transactions take into account the profit the developer will realize throughout the development process. Since the Subject property is considered "raw land", we must deduct the developers profit realized within the transactions. Developers profit typically ranges from 5.00% to 20.00%, based on the size and risk of the development. Based on the scale and risk associated with the Subject development in the "raw state", a developers profit would typically be towards the middle end of the range, between 10.00%-15.00%. However, based on the high demand that would occur if the site were to be placed on

ai. CUSHMAN & Ill lllllt WAKEFIELD • 70

N/A JEFFERSON SIDEROAD, RICHMOND HILL LAND RESIDUAL APPROACH 53

the market and the existing land use policies in place for the Subject property, a developer would take a reduced profit to develop the site. Consequently, we have tempered the developer's profit (for the land component only) and concluded at 10.00% of the projected revenue - or $7, 147,200.

Contingency: We have built in a Soft Contingency cost of 1.00% of hard costs or $198,304

Cash in Lieu Payment: means the payment of funds equivalent to the value of the amount of land that the City would otherwise have been entitled to require to be conveyed for park purposes as part of a development. The payment of cash-in-lieu is usually required as a condition of development approval and is assessed as the value of the land the day before the City grants approval for the development, as specified in the Planning Act. Based on the clients budget, we have allocated a charge of $1,750,000.

HST ON RESIDENTIAL UNITS

The developer is required to pay HST on all residential unit sales. The rate is 13% of which a developer is credited approximately 4.0% according to the client. We have estimated a cost of 9% of gross sales or $6,432,480

It should be noted that these assumptions are based on typical market rates experienced for similar developments. We have referenced cost estimates that have been provided by the Client but have not relied on them in order to ensure an independent, third-party market value estimate.

Refer to the table on the following page outlining the Residual Model for the subject property.

~ CUSHMAN & Ill Ill ... WAKEFIELD •II 71 N/A JEFFERSON SIDEROAD, RICHMOND HILL LAND RESIDUAL APPROACH 54

MARKET VALUE ESTIMATE VIA LAND RESIDUAL MODEL

LAND RESIDUAL METHODOLOGY SUMMARY

jeullding statistics Total Land Area (Gross Acres) 2.786 Gross Acres Net Dewlopable Land Area 2.786 Net Dei.elopable Acres Resideotjal Unit Component Total Stacked Townhouse Units 60 Total Back to Back Townhouse Units 12 Total Street (Regular) Townhouse Units 24 Total No. of Units 96 Total Stacked Townhouse GFA 63,660 Total Back to Back Townhouse GFA 20,652 Total Regular Townhouse GFA 51,240 Total Residential Gross Floor Area (Approx.) 135,552 Square feet of total net renlable area Q!bfil Total Retail Gross Floor Area (Approx.) Square feet of total net rentable area Total Office Gross Floor Area (Approx.) Square feet of total net rentable area Parking Spaces 30 Total Sellable Residential Underground Spaces Lockers Gross Building Area 135,552

Revenue No. of Units Avg Unit Size PSF ofGFA Total Unit Prlce Resulting Revenue Pre-Sold Stacked Townhouse Residential Units 58 1,061 $481 $510,207 $29,592,000 Un-Sold Stacked Townhouse Residential Units 2 1,061 $495 $525,000 $1,050,000 Pre-Sold Back to Back Townhouse Residential Units 0 1,721 Un-Sold Back to Back Townhouse Residential Units 12 1,721 $523 $900,000 $10,800,000 Pre-Sold Regular Townhouse Residential Units 0 2,135 Un.Sold Regular Townhouse Residential Units 24 2,135 $515 $1,100,000 $26,400,000 Unit Upgrade Charges $30,000 $2,880,000 Parking 30 $25,000 $750,000 Total Potential Revenue $71,472,000

!Expenses I Cost of Development Hard Construction Cost Estimates Hard Construction Costs - Standard & Back to Back Townhomes $100 $199,700 $7, 189,200 Hard Construction Costs - Stacked Townhomes $125 $132,625 $7,957,500 Roadways & Sel\iclng $1,000,000 Parking Garage (Stacked Townhomes) $3,200,000 Hard Construction Costs (2.500/o Contingency) $4 $5,038 $483,668 Total Hard & Soft Construction Costs $19,830,368

Development Charge Cost/Municipal Cost Estimates

Dewlopment Charges (Yor1< Region & Richmond Hil~ $39 $55,717 $5,348,832 Total Development Charges $5,348,832

Additional Cost Estimates Development Costs (1.00% of Potential Revenue) $5 $29,780 $714,720 Legal & Consulting (1.00% of Potential Revenue) $5 $7,445 $714,720 Marketing & Admin (1.50% of Potential Revenue) $8 $11,168 $1,072,080 Sales Commissions (2.0% of Potential Rewnue) $11 $10.55 $1,429,440 Financing $20 $28,521 $2,738,000 Total Additional Cost Estimates $6,668,960

Total Remaining Costs

Less: Developers Profit 10.00% of Potential Revenue $7,147,200 Less: Contingency 1.00% of Total Hard & Soft costs $198,304 Less: Cash in Lieu Payment $1,750,000

Total Developers Profit, Contingency Measure & Cash In Lieu Payment HST on Re\enue (Net 9% As pro\ded by Client) SS 432 480 Total Project Costs (lnctudlng Profit) $350 $493,501 $47,376, 143

Resulting Raw Land Value (Rounded) $24,100,000 Resultant Rate Per Acre of Gross Devetopabte Land (Rounded) $8,650,395 Resultant Rate Per Bulldable Size $177.79 Resulting Rate Per Build able Unit $415,517

llia CUSHMAN & tll lllltl WAKEFIELD • 72

N/A JEFFERSON SIDEROAD, RICHMOND HILL LAND RESIDUAL APPROACH 55

MARKET VALUE ESTIMATE VIA LAND RESIDUAL APPROACH

As shown by the above model, the market value of the subject as indicated by the Land Residual methodology is $24,100,000, or $177.79 per buildable square foot, or approximately $415,517 per buildable unit.

TWENTY-FOUR MILLION ONE HUNDRED THOUSAND DOLLARS

$24, 100,000 Exposure Time: 6 to 9 Months

EXTRAORDINARY SSUMPTIONS & HYPOTHETICAL CONDITIONS

• CUSHMAN & tll IllIba WAKEFIELD ·11 73

N/A JEFFERSON SIDEROAD, RICHMOND HILL RECONCILIATION AND FINAL VALUE OPINION 56

RECONCILIATION AND FINAL VALUE OPINION

The value estimates for the subject property, utilizing the two approaches to value, are as follows:

' 'RECONCIL.IATION & FINAL:. VAL:.UE ESffilMA11E 39, 53, 67 Jefferson Sideroad, Richmond Hill Direct Comparison Conclusion Site Area (square feet) 121,352 Sale Price Per Sq.Ft: $200 Estimated Market Value (rounded): $24,300,000

Land Residual Conclusion Total Sell Out Value $71,472,000 Total Project Expense $47,376, 143 Estimated Market Value (Rounded) $24, 100,000

FINAL VALUE ESTIMATE $24,300,000

Based on the subject's current planning status and pre-sold units we consider the value in the upper end of the range (derived by the Direct Comparison Approach) to be reasonable.

Based on the foregoing, it is our opinion that the market value of the property, subject to the assumptions set forth herein, and as at January 19th, 2017 will be:

TWENTY-FOUR MILLION THREE HUNDRED THOUSAND DOLLARS

$24,300,000 The above value estimate is predicated on an exposure period of 6 to 9 months and assumes a sale on an all cash to vendor basis.

EXTRAORDINARY SSUMPTIONS HYPOTHETICAL CONDITIONS

.. CUSHMAN & Ill Ill It& WAKEFIELD • 74

N/A JEFFERSON SIDEROAD, RICHMOND HILL ADDENDA CONTENTS 57

ADDENDA CONTENTS

ADDENDUM A: ASSUMPTIONS AND LIMITING CONDITIONS

ADDENDUM IS: CERTIFICATION OF APPRAISAL

ADDENDUM C: GLOSSARY OF TIERMS AND DEFINITIONS

lll CUSHMAN & Ill lll 11111 WAKEFIELD 75

iti iti 76

N/A JEFFERSON SIDEROAD, RICHMOND HILL ASSUMPTIONS AND LIMITING CONDITIONS 58

ASSUMPTIONS AND LIMITING CONDITIONS

"Report" means the appraisal or consulting report and conclusions stated therein, to which these Assumptions and Limiting Conditions are annexed.

"Subject Property" means the property located at N/A Jefferson Sideroad, Richmond Hill, ON or legally described as Lots A, B, C, Plan 1916, Part 1 on 65R36865 Town of Richmond Hill.

"C&W' means Cushman & Wakefield Ltd. or its subsidiary that issued the Report.

"Appraiser(s)" means the employee(s) of C&W who prepared and signed the Report.

The Report has been made subject to the following assumptions and limiting conditions:

• This appraisal report has been prepared at the request of Ideal Developments Inc., for the purpose of estimating the fee simple land value for 39, 53 & 67 Jefferson Sideroad, Richmond Hill, Ontario. It is our understanding that the intended use of the appraisal report is to assist with financing. It is not reasonable for any persons other than Ideal Developments Inc., its subsidiaries and lender(s) to rely upon this appraisal without first obtaining written authorization from the client and the author of this report. This report has been prepared on the assumption that no other person will rely on it for any other purpose and all liability to all such persons is denied.

• This report has been prepared at the request of Ideal Developments Inc. and for the exclusive (and confidential) use of the recipients as named herein for the specific purpose and function as stated herein. All copyright is reserved to the author and this report is considered confidential by the author and the client. Possession of this report, or a copy thereof, does not carry with it the right to reproduction or publication in any manner, in whole or in part, nor may it be disclosed, quoted from or referred to in any manner, in whole or in part, without the prior written consent and approval of the author as to the purpose, form and content of any such disclosure, quotation or reference.

• Without limiting the generality of the foregoing, neither all nor any part of the contents of this report shall be disseminated or otherwise conveyed to the public in any manner whatsoever or through any media whatsoever or disclosed, quoted from or referred to in any report, financial statement, prospectus, or offering memorandum of the client, or in any documents filed with any governmental agency without the prior written consent and approval of the author as to the purpose, form and content of such dissemination, disclosure, quotation or reference.

• The estimated current market value of the real property which is appraised in this report pertains to the value of the fee simple estate in the real estate as vacant and available for development "as of right". The property rights appraised herein exclude mineral rights, if any.

• The estimate of value contained in this report is founded upon a thorough and diligent examination and analysis of information gathered and obtained from numerous sources. Certain information has been accepted at face value; especially if there was no reason to doubt its accuracy. Other empirical data required interpretative analysis pursuant to the objective of this appraisal. Certain inquiries were outside the scope of this mandate. For these reasons, the analyses, opinions and conclusions contained in this report are subject to all of the assumptions and limiting conditions.

• The property has been valued on the basis that title to the real property herein appraised is good and marketable.

la CUSHMAN & 111 llllti WAKEFIELD •Jll 77 N/A JEFFERSON SIDEROAD, RICHMOND HILL ASSUMPTIONS AND LIMITING CONDITIONS 59

• The author of this report cannot accept responsibility for legal matters, questions of survey, opinions of title, hidden or unapparent conditions of the property, toxic wastes or contaminated materials, soil or sub-soil conditions, environmental, engineering or other technical matters which might render this property more or less valuable than as stated herein. If it came to our attention as the result of our investigation and analysis that certain problems may exist, a cautionary note has been entered in the body of the report.

• The legal description of the property and the area of the site were obtained from the Municipal Property Assessment Corporation (MPAC). Further, the plans and sketches contained in this report are included solely to aid the recipient in visualizing the location of the property, the configuration and boundaries of the site and the relative position of the improvements on the said lands.

• The property has been valued on the basis that the real property is free and clear of all value influencing encumbrances, encroachments, restrictions or covenants except as may be noted in this report and that there are no pledges, charges, lien or social assessments outstanding against the property other than as stated and described herein.

• The property has been valued on the basis that there are no outstanding liabilities except as expressly noted herein, pursuant to any agreement with a municipal or other government authority, pursuant to any contract or agreement pertaining to the ownership and operation of the real estate or pursuant to any lease or agreement to lease, which may affect the stated value or salability of the subject property or any portion thereof.

• The property has been valued on the basis that the real estate complies in all material respects with any restrictive covenants affecting the site and has been built and is occupied and being operated, in all material . respects, in full compliance with all requirements of law, including all zoning, land use classification, building, planning, fire and health by-laws, rules, regulations, orders and codes of all federal, provincial, regional and municipal governmental authorities having jurisdiction with respect thereto. (It is recognized there may be work orders or other notices of violation of law outstanding with respect to the real estate and that there may be certain requirements of law preventing occupancy of the real estate as described in this report. However, such possible circumstances have not been accounted for in the appraisal process.).

• Investigations have been undertaken in respect of matters which regulate the use of land. However, no inquiries have been placed with the fire department, the building inspector, the health department or any other government regulatory agency, unless such investigations are expressly represented to have been made in this report. The subject property must comply with such regulations and, if it does not comply, its non-compliance may affect the current market value of this property. To be certain of such compliance, further investigations may be necessary.

• The data and statistical information contained herein were gathered from reliable sources and are believed to be correct. However, these data are not guaranteed for accuracy, even though every attempt has been made to verify the authenticity of this information as much as possible.

• The estimated current market value of the property does not necessarily represent the value of the underlying shares, if the asset is so held, as the value of the shares could be affected by other considerations. Further, the estimated current market value does not include consideration of any extraordinary current market value of the property, unless the effects of such special conditions, and the extent of any special value that may arise therefrom, have been described and measured in this report.

lii CUSHMAN & 111 lllIla WAKEFIELD 78

N/A JEFFERSON SIDEROAD, RICHMOND HILL ASSUMPTIONS AND LIMITING CONDITIONS 60

interest associated therewith may be more or less than the percentage of ownership appearing in the contractual agreement pertaining to the structure of such divisional ownership.

• In the event of syndication, the aggregate value of the limited partnership interests may be greater than the value of the freehold or fee simple interest in the real estate, by reason of the possible contributory value of non-realty interests or benefits such as provision for tax shelter, potential for capital appreciation, special investment privileges, particular occupancy and income guarantees, special financing or extraordinary agreements for management services.

• Should the author of this report be required to give testimony or appear in court or at any administrative proceeding relating to this appraisal, prior arrangements shall be made therefore, including provisions for additional compensation to permit adequate time for preparation and for any appearances which may be required. However, neither this nor any other of these assumptions and limiting conditions is an attempt to limit the use that might be made of this report should it properly become evidence in a judicial proceeding. In such a case, it is acknowledged that it is the judicial body which will decide the use of this report which best serves the administration of justice.

• Because market conditions, including economic, social and political factors, change rapidly and, on occasion, without notice or warning, the estimate of current market value expressed herein, as at the effective date of this appraisal, cannot necessarily be relied upon as any other date without subsequent advice of the author of this report.

• The value expressed herein is in Canadian Dollars.

• This report is only valid if it bears the original signatures of the authors.

lb CUSHMAN & Ill lll... WAKEFIELD 79 ·11 80

N/A JEFFERSON SIDEROAD, RICHMOND HILL CERTIFICATION 61

CERTIFICATION

We hereby certify that:

• 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, impartial, and unbiased professional analyses, opinions, and conclusions.

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

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

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

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

• The reported analyses, opinions and conclusions were developed independently and with no influence on the appraiser on the part of the owner or lender.

• The reported analyses, opinions, and conclusions were developed, and this. report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute of Canada, which include the Canadian Uniform Standards of Professional Appraisal Practice and Standards of Professional Practice of the Appraisal Institute of Canada.

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

• Peter Chan (AACI, P. App) conducted an inspection of the property that is the subject of this report on January 191h, 2017.

• Jonathan Dunlap (AIC Candidate No. 906442) provided significant professional assistance with the completion of this report and is a member in good standing with the Appraisal Institute of Canada

• The value estimate contained in this report applies as of January 19th, 2016. This date may be referred to as the effective date of valuation.

• The Appraisal Institute of Canada has a mandatory Continuing Professional Development Program for designated members. As of the date of this report, Peter Chan has fulfilled the requirements of the program and is a member in good standing with the Appraisal Institute of Canada.

• CUSHMAN & 111 IllIla WAKEFIELD • 81

N/A JEFFERSON SIDEROAD, RICHMOND HILL CERTIFICATION 62

FINAL VALUE ESTIMATE

Therefore, the current market value of the subject property located at N/A Jefferson Sideroad, Richmond Hill, ON, as at January 19th, 2017 is as follows:

TWENTY-FOUR MILLION THREE HUNDRED THOUSAND DOLLARS $24,300,000 Exposure Time: 6 to 9 Months

EXTRAORDINARY ASSUMPTIONS HYPOTHETICAL CONDITIONS

Respectfully submitted, CUSHMAN & WAKEFIELD LTD. Digitally signed Digitally signed by ~~~ by Peter Chan 1L Jonathan Dunlap Date: 2017.03.09 Date: 2017.03.09 15:42:06 -05'00' 15:43:18 -05'00'

Peter Chan, MCI, P.App. Jonathan Dunlap, MBA Vice President Senior Consultant Valuation & Advisory Valuation & Advisory [email protected] Jonathan. [email protected] Phone Office Direct 416-359-2432 Phone Office Direct 416-359-2413 Fax 416.369.2613 Fax 416.359.2613

• CUSHMAN & 111 IllIla WAKEFIELD 82

r iti ·11 83 N/A JEFFERSON SIDEROAD, RICHMOND HILL GLOSSARY OF TERMS AND DEFINITIONS 63

GLOSSARY OF TERMS AND DEFINITIONS

Capitalization Rate - Equal to the inverse of a Net Operating Income multiple.

Discount Rate is a measure of risk applied to future income streams used to convert future income into a present value.

Exposure Time

Exposure time is always presumed to precede the effective date of the appraisal. It may be defined as:

"The estimated length of time the properly 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. It is a retrospective estimate based upon an analysis of past events assuming a competitive and open market."

Going-In Capitalization Rate - Capitalization Rate applied forecast Year 1 Net Operating Income.

Highest and Best Use - Highest and best use is defined by the Appraisal Institute of Canada as:

"That use which is most likely to produce the greatest net return over a period of time."

Internal Rate of Return is the rate of return on an investment over a defined holding period with disposition of the asset assured at the end of the holding period. Stated another way, the IRR is the discount rate that gives a net present value of zero.

Market Value

The Uniform Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal Institute of Canada define market value as:

"The most probable price which a properly should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus."

Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

• Buyer and seller are typically motivated;

• Both parties are well informed or well advised and acting in their own best interests;

• A reasonable time is allowed for exposure in the market; and

• Payment is made in cash in Canadian dollars or in terms of financial arrangements comparable thereto.

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.

• CUSHMAN & Ill Illllb WAKEFIELD • 84

N/A JEFFERSON SIDEROAD, RICHMOND HILL GLOSSARY OF TERMS AND DEFINITIONS 64

Marketing Time - The reasonable marketing time is an estimate of the amount of time it might take to sell a property interest in real estate at the estimated market value level during the period immediately after the effective date of the appraisal.

Net Operating Income - income after all operating expenses are deducted from total gross income, excluding debt service and depreciation.

Overall Capitalization Rate - refers to the Capitalization Rate being applicable to the total asset value as opposed to the value of the equity interest in the property. All capitalization rates used in the attached report are "Overall" Capitalization Rates.

Stabilized Capitalization Rate - this capitalization rate is the overall rate on stabilized, or adjusted to market income.

Assemblage - The combining of two or more parcels, usually but not necessarily contiguous, into one ownership or use; the process that may create plottage.

• CUSHMAN & Ill Ill I~ WAKEFIELD 85

This is Exhibit "B" referred to in the Affidavit of Shajiraj Nadarajalingam,

sworn this 10th day of July, 2019.

Judy Hamilton 86

• CUSHMAN & 111 IllIii} WAKE I LO 87

CUSHMAN & WAKEFIELD ULC 161 BAY STREET, SUITE 1500 P.O. BOX 602 TORONTO, ON M5J 2S1

Future Residential Development Lands

39 - 67 Jefferson Side Road Richmond Hill, ON 88

Cushman & Wakefield ULC CUSHMA & 161 Bay Street, Suite 1500 P.O. Box 602 WAK IELD Toronto, ON M5J 2S1 (416) 862 0611 Tel (416) 359 2613 Fax www.cushmanwakefield.com

June 11, 2019

Mr. Omar Khan Ideal Developments Inc. 1100 Rodick Road Richmond Hill, ON L3R 8C3

RE: NARRATIVE APPRAISAL REPORT

Modern Manors Development I Future Residential Development Land

39 - 67 Jefferson Side Road, Richmond Hill ON

C&W Ltd. File ID: 19-445-900393

Dear Mr. Khan:

In accordance with your request, we have completed our investigation and analysis of the above noted property and are pleased to submit this report of our findings and conclusions.

The purpose of this appraisal is to estimate the "as is" fee simple market value of the 2. 700 acre Subject property, located on the south side of Jefferson Side Road, just west of Yonge Street, Richmond Hill ON ("Subject Property''), as of June 151, 2019 ("Effective Date"), subject to the Assumptions and Limiting Conditions which form Addendum "A" to this report. The Highest and Best Use of the Subject property "as is" is for a future, residential development use- containing a total of approximately 96 units (both stacked townhouses and townhouse units) - similar to what is outlined within the development plans outlined herein.

It is our understanding that the intended use of the appraisal report is for a financing purpose. This appraisal was prepared for Ideal Developments Inc., and is intended only for its specified use.

~ CUSHMAN & 111 Ill Ill WAKEFIELD 89 Mr. Omar Khan Cushman & Wakefield ULC Ideal Developments Inc. June 11, 2019 Page 2

As a result of this analysis, we have formed an opinion that the "as is" market value of the 2. 700 acre Subject property, located on the south side of Jefferson Side Road, just west of Yonge Street, Richmond Hill ON, subject to the assumptions, limiting conditions, certifications and definitions, as of June 151 , 2019, is estimated as follows (based on a nine month to twelve month exposure period):

Highest and Best Use of Subject Property : Future Residential De1.elopment Lands

Total Land Area (Net De1.elopable Acres): 2.700 net de1.elopable acres

Total No. of De1.elopable Units : 96 total units

Total Buildable Square Feet : 135,552 total units

Initial Valuation Methodology - Land Residual Approach

Re1.enue Estimate - Based on Actual Sales : $69,433,809

Construction Cost & Expense Estimate : $43,866 709

Resulting "As Is" Land Value via Land Residual Approach $25,567,000

Secondary Valuation Methodology - Direct Comparison Approach Reasonable & In-Line w/ Market Transactions

Market Value Summaiy for Subject Property I As Is

Final Market Value Estimate for Modern Manors Development Lands: $25,567,000

Resulting$/ Net Acre of Land Area: $9,469,000

Extraordinary Assumptions & Hypothetical Conditions

Development, Cost & Approved Assumption: For the purpose of this report, we have relied upon the Concept development plan, and resulting development statistics, that have been provided by the Client. Based on the land use policy and the surrounding development uses, this development scheme appears reasonable. Further, it has been assumed that the proposed improvements w111 be developed as outlined in this report and that the Subject will be built using high quality workmanship and materials. If the design or quality differs from that which has been considered herein, the value conclusions could be impacted accordingly. Any undue delay in the construction time line could also materially impact the value conclusion reported herein. Lastly, for the purpose of this analysis, and based on the most recent planning discussions, we have assumed that the Subject property has received all land use I development approvals for the development outlined herein.

If in fact the Subject property does not receive full land use I development approvals for the development scheme outlined within the report, or the costs to bring the site to a fully ready and developable state require adjustment, we reserve the right to amend our market value estimate accordingly.

l!ri CUSH MAN & Ill lll 111111 WAKEFIELD 90 Mr. Omar Khan Cushman & Wakefield ULC Ideal Developments Inc. June 11, 2019 Page 3

Prepared By:

Michael Kaukonen, MCI, P.App. Senior Vice President I Valuation & Advisory [email protected] Phone (Office): 416-359-2662

li CUSHMAN & Ill lll 11111 WAKEFIELD 91 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

BASIC INFORMATION

39 - 67 Jefferson Side Road, Richmond Property Address: Effective Date of Valuation: June 1st, 2019 Hill ON

Property Type: Future Residential Development Lands Date of Inspection: June 1st, 2019

CW File Reference: 19-445-900393 Client: Ideal Developments Inc.

Appraisal Type: Narrative Intended Appraisal Use: Financing Purpose.

Municipal services are available at the site boundary (water, hydro, sewer). 03208-3229 & -3230 PIN I Assessment Roll No.: Services: Additional internal servicing required for 19-38-060-121-41500, -41000 & -40500 future higher order residential development.

Property Owner: Ideal (JS) Developments Inc. Value Appraised: Fee Simple Interest.

SITE INFORMATION

The entire land area being analyzed contains a total land area of approximately Subject property is located on the south Land Area: 2.700 acres. Based on the Development Site Location: side of Jefferson Side Road, just west of Plans, we have estimated the entire land Yonge Street. area is considered net developable lands.

Generally level @ grade with adjacent A The Subject site contains vehicular Site Topography: properties and roadways. ccess: access off of Jefferson Side Road.

Site Shape: Rectangular Site Dimensions (approx.): 402.00 feet x 292.24 feet (irregular)

None. The Subject property is currently Frontage (approx.): Jefferson Side Road: 402.00 feet Improvements: vacant land.

Visibility: Good Site Utility: Good

MUNICIPAL INFORMATION FOR SUBJECT PROPERTY

No. The site is not located within any Official Plan Designation: Regional Mixed Use Corridor & Secondary Plan: Neighbourhoods Secondary Plan Area.

RM1 - Medium Density Residential Municipality Governing Zoning By-law: City of Richmond Hill Zone Zoning:

As outlined by the land use policy designations outlined above, the Subject site will be developed with future, higher order residential development uses - similar to the concept development plan outlined herein. As outlined by the concept development plan and the land use submissions to the City of Richmond Hill, the lands will be developed Current Use Conformance: with a residential development - containing 96 residential units and a total gross floor area (GFA) of approximately 135,552 square feet. This GFA includes approximately 63,660 square feet of stacked townhouse space and approximately 71,892 square feet of townhouse space. The development results in an FSI (floor space index [density]) figure of approximately 1.15 times the site area.

~ CUSHMAN & Ill Ill la WAKEFIELD 92 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON EXECUTIVE SUMMARY II

A future residential development use - containing a total of approximately 96 units (both stacked townhouses and As Vacant "AS IS": townhouse units)-similar to what is outlined within the development plans outlined herein.

A residential development use - containing a total of approximately 96 units (both stacked townhouses and As Improved: townhouse units)-similar to what is outlined within the development plans outlined herein.

Highest and Best Use of Subject Property : Future Residential Development Lands Total Land Area (Net Developable Acres): 2.700 net developable acres Total No. of Developable Units : 96 total units Total Buildable Square Feet : 135,552 total units

Initial Valuation Methodology - Land Residual Approach

Revenue Estimate - Based on Actual Sales : $69,433,809 Construction Cost & Expense Estimate : $43,866,709 Resulting "As Is" Land Value via Land Residual Approach $25,567,000

Secondary Valuation Methodology - Direct Comparison Approach Reasonable & In-Line w/ Market Transactions

Market Value Summary for Subject Property I As Is

Final Market Value Estimate for Modern Manors Development Lands: $25,567,000

Resulting$/ Net Acre of Land Area: $9,469,000

Extraordinary Assumptions & Hypothetical Conditions

Development, Cost & Approved Assumption: For the purpose of this report, we have relied upon the Concept development plan, and resulting development statistics, that have been provided by the Client. Based on the land use policy and the surrounding development uses, this development scheme appears reasonable. Further, it has been assumed that the proposed improvements will be developed as outlined in this report and that the Subject will be built using high quality workmanship and materials. If the design or quality differs from that which has been considered herein, the value conclusions could be impacted accordingly. Any undue delay in the construction time line could also materially impact the value conclusion reported herein. Lastly, for the purpose of this analysis, and based on the most recent planning discussions, we have assumed that the Subject property has received all land use I development approvals for the development outlined herein.

ll!i CUSHMAN & 111 llllll!i WAKEFIELD 93 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON TABLE OF CONTENTS

TABLE OF CONTENTS

Executive Summary ...... i Terms of Reference ...... 1 Aerial Maps & Surveys ...... 4 Property Data ...... 7 Market and Location Analysis ...... 16 Highest and Best Use ...... 32 Final Value Estimate ...... 52 Addenda Contents ...... 53 Assumptions and Limiting Conditions ...... 54 Certification ...... 57 Glossary of Terms and Definitions ...... 59

llii CUSHMAN & 111 lll 1111 WAKEFIELD 94 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON TERMS OF REFERENCE

TERMS OF REFERENCE

Purpose and Intended Use of Report

The purpose of this appraisal is to estimate the "as is" fee simple market value of the 2.700 acre Subject property, located on the south side of Jefferson Side Road, just west of Yonge Street, Richmond Hill ON, subject to the Assumptions and Limiting Conditions which form Addendum "A" to this report. It is our understanding that the intended use of the appraisal report is for a financing purpose. This appraisal was prepared for Ideal Developments Inc., and is intended only for its specified use.

Use of this report by any other party or for any other purpose than that stated herein is completely unauthorized.

Definition of Market Value

For the purposes of this valuation, market value is defined as:

1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised, and acting in what they consider to be in their best interests;

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

4. Payment is made in terms of cash in Canadian Dollars or in 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.

Reasonable Exposure Time

Exposure time is always presumed to precede the effective date of the appraisal. It may be defined as:

The reasonable exposure period is a function of price, time and use. It is not an isolated opinion of time alone. Exposure time is different for various types of property and under various market conditions. As noted above, exposure time is always presumed to precede the effective date of appraisal. It is the length of time the property would have been offered prior to a hypothetical market value sale on the effective date of appraisal. It is a retrospective opinion based on an analysis of past events, assuming a competitive and open market. It assumes not only adequate, sufficient and reasonable time but adequate, sufficient and a reasonable marketing effort. Exposure time and conclusion of value are therefore interrelated.

lfA CUSHMAN & 111 lllII WAKEFIELD 95 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON TERMS OF REFERENCE 2

Based on our review of national investor surveys, discussions with market participants and information gathered during the sales verification process, a reasonable exposure time for the Subject property at the value concluded within this report would require approximately nine (9) months to twelve (12) months. This assumes the current owner would have employed an active and professional marketing plan.

Extraordinary Assumptions & Hypothetical Conditions

Development, Cost & Approved Assumption: For the purpose of this report, we have relied upon the Concept development plan, and resulting development statistics, that have been provided by the Client. Based on the land use policy and the surrounding development uses, this development scheme appears reasonable. Further, it has been assumed that the proposed improvements will be developed as outlined in this report and that the Subject will be built using high quality workmanship and materials. If the design or quality differs from that which has been considered herein, the value conclusions could be impacted accordingly. Any undue delay in the construction time line could also materially impact the value conclusion reported herein. Lastly, for the purpose of this analysis, and based on the most recent planning discussions, we have assumed that the Subject property has received all land use I development approvals for the development outlined herein.

Scope of Valuation and Reporting Process

During the course of preparing this valuation, the appraiser:

• Made a physical inspection of the property and surrounding area;

• Reviewed available data regarding the local land market;

• Verified current land use and zoning regulations;

• Reviewed sales and listing data on comparable properties;

• Interviewed market participants;

• Confirmed data relied upon in the valuation process, where possible; and

• Prepared a Narrative valuation report in accordance with the standards.

lili CUSHMAN & ill llllllrii WAKEFIELD 96 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON TERMS OF REFERENCE 3

Limiting Conditions

Property Rights Appraised

The property rights appraised within this report are those of the fee simple interest in the Subject lands; defined as absolute ownership unencumbered by any other interest of estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.

Date of Inspection

The property was inspected by Michael Kaukonen, AACI, P.App. on June 1st, 2019.

Effective Date

The effective date of this valuation is June 1st, 2019.

ta CUSHMAN & Ill lll 11111 WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON AERIAL MAPS & SURVEYS 4 97

AERIAL MAPS & SURVEYS Aerial Photograph - Figure No. 1

*Property Aerial is an approximation and has been included solely to aid the reader in visualizing the location, configuration and boundaries of the Subject property - located along the Jefferson Side Road corridor, Richmond Hill ON.

111 CUSHMAN & Ill 111111ii.WAKEFIELD 98

N 0 z z 0 CL) I- ....J ....J ::l :I 0) 0z U: 0 2 I I c ()a: cu ...... 0... z w CL) 2 :!:::: 0... 0 (/) ....J w >. GJ t 0 CL) lN3VVd013A3a (f) 0.. lVl.LN301s3'1:1 ll'. J.N3VVd013A3a 0 1VllN3QIS3'1:J 0z I- <( 0... 2 z t) ll'. CL) w 0 E 0 ::l 2 (/) MODERN MANORS DEVELOPMENT, RICHMOND HILL ON AERIAL MAPS & SURVEYS 6 99

Subject Property Site Plan - Figure No. 3

111 CUSHMAN & Ill 1111111WAKEFIELD 100 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON PROPERTY DATA 7

PROPERTY DATA

Municipal Address

39 - 67 Jefferson Side Road, Richmond Hill ON

Legal Description

03208-3229: BLOCK 1, PLAN 65M4637 SUBJECT TO AN EASEMENT AS IN YR2622073 SUBJECT TO AN EASEMENT AS IN YR2644669 SUBJECT TO AN EASEMENT IN GROSS AS IN YR2817498 CITY OF RICHMOND HILL; and,

03208-3230: PART LOTS B & C, PLAN 1916 DESIGNATED AS PART 3, PLAN 65R-37587 SUBJECT TO AN EASEMENT AS IN YR2622073 SUBJECT TO AN EASEMENT AS IN YR2644669 SUBJECT TO AN EASEMENT IN GROSS AS IN YR2817498 CITY OF RICHMOND HILL.

Site Location

The Subject property is located on the south side of Jefferson Side Road, just west of Yonge Street - within the northern area of Richmond Hill. The site is predominately surrounded by urban residential development uses and is well located -within close proximity to numerous retail and commercial uses. One of the most critical components of the area is the excellent public transit access-with the Yonge I Jefferson YRT (York Region Transit) Bus Station located at the boundary of the Subject site.

Site Description • The Subject property is a future urban development infill site, which is envisioned for future residential development uses. The site is currently vacant land. The site was previously built-up with three single family dwellings. We understand that the site is in the final stages of receiving full land use policy I draft plan approvals by the City of Richmond Hill. The immediate and surrounding area is built-up and established in nature, with multiple amenities and public transit situated within the immediate and surrounding areas, and several re-development sites located along the Jefferson Side Road and Yonge Street corridors. The close proximity to these attributes is undoubtedly an excellent site attribute for future development.

Site Area • The Subject property lands contain a total gross land area of approximately 2.700 acres. Based on the Development Plans outlined herein and the parkland I open space requirements, we have estimated that approximately 2.700 acres of the Subject property is considered net developable lands.

Improvements • None. The Subject property is currently vacant land.

Frontage • The Subject property contains approximately 402.00 feet of frontage along Jefferson Side Road.

Configuration • Rectangular (Refer to the Geo Warehouse Map).

Topography • Generally level and at grade with Jefferson Side Road and adjacent properties.

Access • Once built, the Subject site will contain vehicular access off of the Jefferson Side Road corridor.

111! CUSHMAN & Ill 111 ll'li WAKEFIELD 101 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON PROPERTY DATA 8

Services • The site has full municipal services available at the lot line (water, hydro and sewers). Once redeveloped with higher order residential uses, further internal servicing will be required.

Title Instruments • For the purposes of this analysis, the instruments registered against the title(s) to the property, if any, are assumed not to have a significant effect on the property's marketability or its market value. For greater certainty a legal opinion should be solicited for a full explanation of the effects of these encumbrances. Additionally, the property has been valued as if free and clear of any financing.

Geo Warehouse Map \ 121

\1, \ \ \

Ownership and History

Current Ownership - Subject Property

According to our investigations, the Subject property lands are currently registered to Ideal (JS) Developments Inc. According to our investigations, the property was last transferred on January 291h, 2015 for a total consideration of $10,050,000. To the best of our knowledge, no other transfers involving the property have occurred since the above transaction, or the effective date of this appraisal.

Current Contracts

We are not aware of any current offers of purchase and sale relating to the Subject Property.

Easements & Land Use Restrictions

We are not aware of any easements and I or land use restrictions that would adversely impact the use and I or future development potential of the Subject property.

~ CUSHMAN & 111 Ill lllfll WAKEFIELD 102 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON PROPERTY DATA 9

Assessment Information

According to MPAC, the Subject property has the following assessment information:

Municipal Address • 39 - 67 Jefferson Side Road, Richmond Hill ON Assessment Roll No. • 19-38-060-121-41500, -41000 &-40500 Property Description • Vacant Residential Development Land (Not On Water) Assessed Value (2016) • $ 1,235,000 (combined)

Phased In Assessment, 2019 Tax Year • $1,165,745 * Phased-In Assessment (2019 Tax Year) reflects the phased-in portion of the Assessed Value returned to the municipality I local taxing authority on the 2018 Assessment Rolf for the 2019 taxation year.

* After discussions with the City of Richmond Hill, we were unable to identify any delinquent taxes for the Subject property. Therefore, it is assumed that the property taxes are current and have been paid.

Soil Conditions & Hazardous Substances

We are not qualified to ascertain any toxic wastes or contaminated materials, soil I sub-soil conditions and environmental issues. Determination of such information was not part of our mandate and no funds were provided for such undertaking. No responsibility is assumed for the existence of any such substances or any costs associated with their removal, correction or treatment in the event they are found to exist on the Subject property or on adjacent lands, or in close proximity to the Subject property to materially affects value.

llra CUSHMAN & Ill lll I~ WAKEFIELD 103 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON PROPERTY DATA 10

Photographs of Subject Property

Subject Property Lands Subject Property Lands

Subject Property Lands Adjacent Built-Up Residential Uses

Frontage Along Jefferson Side Road Adjacent Open Space Uses

li!i CUSHMAN & Ill lll 11111! WAKEFIELD 104 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON PROPERTY DATA 11

Municipal Data

Land use in Ontario may be controlled or directed by provincial restrictions through legislation such as the Planning and Development Act. Further, land use is also controlled by municipal restrictions such as Official Plans and Zoning By-Laws and I or other restrictive By-Laws. The Subject property is located within the City of Richmond Hill and contains the following planning information:

Richmond Hill Official Plan • The City of Richmond Hill's Official Plan created in was adopted by Council on July 12, 2010 and subsequently appealed to the Ontario Municipal Board (OMB) on February 10, 2011 and later endorsed by the Regional Municipality of York on May 19, 2011. On April 5, 2012 the OMB issued an Order partially approving the Richmond Hill Official Plan (2010). This Order was subsequently amended by the OMB on April 26, 2012, June 29, 2012, October 23, 2012, December 20, 2012, April 26, 2013, June 17, 2013, September 26, 2013, November 6, 2013, January 31, 2014, March 21, 2014, July 4, 2014, August 26, 2014, October 17, 2014, March 6, 2015, April 29, 2015, June 22, 2015, October 13, 2015, January 19, 2016, March 23, 2016, April 13, 2016, May 25, 2016, October 14, 2016, March 7, 2017, March 20, 2017, March 31, 2017, August 8, 2017, and January 23, 2018. The OMB's partial approval Order and subsequent amending Orders have brought specific policies of the new Official Plan into effect, with the exception of those policies and map schedules that remain under appeal on a Town-wide, area specific or site-specific basis.

• The main purpose of the Official Plan is to provide an overall vision with principles and objectives that guide decision making by the Town with respect to the natural environment, land use, community services, social and cultural matters and development review.

• According to the Official Plan of the City of Richmond Hill, the Subject property is designated as "Regional Mixed Use Corridor" and "Neighbourhood" (Refer to Figure No. 4 - City of Richmond Hill Official Plan Map).

• The eastern portion of the Subject site is designated "Regional Mixed-Use Corridor". The predominant use of land within the Regional Mixed-Use Corridor designation shall be for mixed use, transit-oriented development. The following uses shall be permitted within the Regional Mixed-Use Corridor designation: a. Medium density residential; b. High density residential; c. Major office; d. Office; e. Commercial; f. Major retail; g. Retail; h. Automotive service commercial in accordance with policy 3.4.1.47 of the Official Plan; i. Community uses in accordance with Section 4.1 of the Official Plan; j. Parks and urban open spaces in accordance with Section 3.4.4 of the Official Plan; and k. Live-work units in accordance with policies 3.3.3.2.9 and 3.3.3.2.10 of the Official Plan.

llit CUSHMAN & Iii lll Ila WAKEFIELD 105 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON PROPERTY DATA 12

Medium density residential development in the form of ground-related units within the Regional Mixed-Use Corridor designation shall not be permitted to front directly onto Yonge Street or Highway 7. Development shall be encouraged to provide a mix of uses integrated physically within the same building or in separate buildings that are functionally integrated on the same site.

• The western portion of the Subject site is designated for Neighbourhood uses. The predominant use of land within the Neighbourhood designation shall be for low-rise residential uses. The following uses shall be permitted in the Neighbourhood designation: a. Low-density residential uses such as /ow-rise single detached, semi-detached and duplex dwellings; b. Medium-density residential uses such as low rise townhouses and walk-up apartments in accordance with the policies of Section 4.9.1.2. c. Neighbourhood commercial uses in accordance with the policies of Section 4.9.1.3. d. Community uses in accordance with the policies of Section 4.1 e. Parks and urban open spaces in accordance with the policies of Section 3.4.4; and f. Automotive service commercial in accordance with policy 3.4.1.47. As outlined by the Plan, development within the Neighbourhood designation shall have a maximum building height of 3-storeys, except on an arterial street where the maximum building height shall be 4-storeys. Existing buildings greater than 3-storeys which legally existed on the date of adoption of this Plan shall be permitted. New development greater than 3-storeys shall only be permitted in accordance with the policies of this Plan.

• As outlined by the above Official Plan designation, a future residential development would undoubtedly be permitted on the lands.

Secondary Plan Area and I or • The Subject property is not situated within any Secondary Plan and I or Site Specific Policy areas Site Specific Policies that are outlined by the City of Richmond Hill land use policies.

City of Richmond Hill Zoning • A Zoning By-law is a legal document passed by City Council that provides a way of managing By-law land use and future development. It protects all City residents and businesses from conflicting land uses within the community. As a result, property owners have a reasonable expectation of what they can do on their property and what their neighbours can do (e.g. - minimum setback requirements, maximum coverage permitted, maximum height and minimum parking standards).

• As outlined by the City of Richmond Hill Zoning By-law, the Subject lands are zoned RM1 - Medium Density Residential Zone (Refer to Figure No. 5- Subject Property Zoning Map)

• Permitted uses under this Zone include a variety of medium density residential uses - including townhouse uses. • As shown by the Zoning By-law above, medium density residential uses are permitted on the Subject property site. For the purpose of this analysis, we have assumed that the Subject site will conform to the Zoning By-law once development submissions are complete.

Development History • On April 11th, 2014 applications for a Zoning By-law Amendment and for Site Plan Control Approval (Applications D02-14011 and D06-14029), were submitted to the City of Richmond Hill. Concurrent to the processing of the Zoning Amendment application, applications for Draft Plan of Subdivision, Draft Plan of Condominium (common element) and Draft Plan of Condominium (standard} (D03-15008, D05- 15010 and D05-15011) were also processed by the City of

llii CUSHMAN & 111 llllllril WAKEFIELD 106 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON PROPERTY DATA 13

Richmond Hill. The proposed Site Plan for this development contemplates the development of the land with a total of ninety-six freehold and standard condominium-based townhouse units, consisting of: - twelve rear lane accessed street townhouse units fronting onto Jefferson Side Road; - twelve back to back townhouse units; - twelve traditional townhouse units; - sixty stacked townhouse units; and, - 107 surface parking spaces and 90 below grade, provided in one level of underground parking.

• The applications for Zoning By-law Amendment, Draft Plan of Subdivision and Site Plan Approval were appealed to the Ontario Municipal Board (OMB - now known as the LPAT) on June 15th, 2016, for reasons based on delay.

• An Ontario Municipal Board (OMB) Hearing was held on May 4th, 2017, at which the Board issued an oral decision approving the Draft Plan of Subdivision, delegated the clearance of the associated conditions of approval to the City of Richmond Hill, and allowed the appeal of the Zoning in principle. Per typical procedure, the Board withheld its approval pending final approval of the Site Plan.

• The Site Plan was presented at a subsequent OMB hearing on September 8th, 2017, wherein the Board ordered the Zoning By-law in effect and approved the Site Plan and associated drawings.

• Since the original filing of the applications, several Site Plan submissions have been made to the City's Planning Department, with most design matters being deemed acceptable by the City. To this end, a draft of the implementing site plan agreement has been released by City Staff. To address specific site design conditions, minor grading adjustments are being made. To ensure consistency, it will be necessary to coordinate these revisions with all other development plans. To date, all plans have been coordinated and have been submitted to the City on April 30th, 2019 for final confirmation and approval. Subsequent to said approval, City Staff will update the site plan agreement to reflect the revised plans and release it to Ideal JS for execution. It is expected that the final site plan agreement will be released for execution within four weeks of the re-submission. • It is the City's practice to require the Plan of Subdivision receive final approval prior to the execution of the site plan control agreement by the City. Accordingly, the Draft Plan of Subdivision has been recently registered as Plan 65M-4637. A building permit application can be made to the Town upon execution of the site plan agreement by Ideal JS and the provision of the required securities.

• As outlined above, the Subject property is nearing final approvals for all development. Consequently, as outlined by the concept development plan and the land use submissions to the City of Richmond Hill, the lands will be developed with a residential development - containing 96 residential units and a total gross floor area (GFA) of approximately 135,552 square feet. This GFA includes approximately 63,660 square feet of stacked townhouse space and approximately 71,892 square feet of townhouse space. The development results in an FSI (floor space index [density]) figure of approximately 1.15 times the site area.

• CUSH MAN & Ill IllIlia WAKEFIELD 107 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON PROPERTY DATA 14

City of Richmond Hill Official Plan Land Use Map - Figure No. 4

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(/) () I I n> 111 ::::J 0 a. c c: r Ul 111 C"O ~

il!i CUSHMAN & Ill llllli! WAKEFIELD 108 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON PROPERTY DATA 15

Subject Property Zoning Map - Figure No. 5

ORJ\INL

59 58

111 CUSHMAN & Ill 111 llill!li WAKEFIELD 109 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 16

MARKET AND LOCATION ANALYSIS

Canadian Economic Overview - Q1 2019

Key Indicators

The economy slowed to a crawl in 2018 04, weakening more than expected mainly due to sharply lower investment. Looking ahead, reduced business investment combined with higher inventories in 04 do not bode well for growth. We think the economy will eke out a similarly modest gain in 01 before gradually improving. On an annual basis, GDP growth is forecast to slow from 1.8% in 2018 to 1.1 % in 2019 and 1.2% in 2020. The weak, below-potential outlook reflects waning demand in interest-sensitive housing and autos, oil production cuts in Alberta, and sluggish business investment and trade. While we expect below-potential growth for the economy over the next two years, we still do not foresee a recession.

On a more positive note, the Canadian economy added 290,000 jobs (1.6%) in the last half year - that's almost 50,000 a month. Surprisingly strong job growth in recent months will provide a near-term boost to household disposable income. However, we expect only modest gains in consumer spending as the unsustainable pace of job creation slows, and past increases in lending rates increase debt servicing costs and curb spending on big ticket items.

A more broadly-based economic slowdown than expected led the Bank of Canada to keep its policy rate unchanged at its March meeting. As noted by the Bank, many central banks recognize the global economy is now facing increasing headwinds, and have eased monetary conditions as a result. We think the Bank of Canada will remain on hold this year as it awaits a sustainable improvement in growth before raising rates again. Should growth not pick up, however, we will see pressure build to cut rates.

Forecast for Canada (Annual percentage changes unless specified) 2017 2018 2019 2020 2021 2022 GDP 3.0 ·1.8 'L1 1.2 ·t.6 ·u Private Consumption 3.5 2.·1 1.3 1.6 ·1.7 1.8 Fixed Investment 3.0 0.8 -3.1 0.9 ·1.3 ·1.7 Stockbuilding (% of GDP) 0.9 0.7 0.4 0.1 0.'l 0.2 Government Consumption 2.1 2.5 ·1.6 '1.4 '1.3 1.3 Exports of Goods and Services 1.1 3.3 1.7 0.8 0.8 0.9 Imports of Goods and Services 4.2 2.9 -·1.2 0.6 0.7 0.9 Stockbuilding (% of GDP) 3.0 '1.8 u ·1.2 '1.6 1.7 Industrial Production 4.9 2.6 ·1.0 1.2 1.5 1.6 Consumer Prices 1.6 2.2 2.0 2.1 2.'1 2.1 current Balance (% of GDP) -2.8 -2.6 -3.·t -2.8 -2.6 -2.5 Government Budget (% of GDP) 0.3 0.2 -0.1 -0.2 -0.3 -0.6 Short-Term Interest Rates (%) 1.10 1.84 2.27 2.46 2.61 2.66 Long-Term Interest Rates(%) '1.78 2.28 2.02 2.32 2.59 2.82 Exchange Rate (Per US$) 1.30 1.30 '1.31 ·1.28 1.27 ·1.21 Exchange Rate (Yen per Can $) 86.4 85.2 85.0 85.6 00.·1 86.8

1111 CUSHMAN & Ill 111 11111 WAKEFIELD 110 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 17

Forecast Overview

Soft landing risks getting rough US and Canada: GDP %year The economy came to a virtual standstill in late 2018 and is 6 expected to show another weak performance in early 2019. Growth will slow from 1.8% last year to 1.1 % in 2019 and 1.2% in 2020 - below its underlying potential of about 1.5%.

Slower momentum reflects reduced fixed investment and moderating spending growth by consumers. Spending on -2 interest-sensitive housing and consumer durables, such as autos, continues to decline. Cutbacks in oil output and -4 transportation bottlenecks will still weigh on growth, despite -6-l---;r-r-r---.-.--r-r---.-r-r-r--r-r-r-r--r-r---o-'r----.--.--- Alberta easing its oil production cap and additional rail capacity. 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Potential savings to consumers and businesses from low but Source: Oxford Economics firming oil prices will be largely negated by the new carbon tax which comes into effect on April 1st, though the proceeds will Canada: Contributions to GDP growth be returned to the economy. Negative direct and spill-over %year 6 Domestic effects of GM's Oshawa plant closure and Bombardier's Peas! 5 demand planned cuts are also key concerns. 4 Along with various external risks such as escalation of China- 3 US trade tensions, a synchronized global downturn, or a 2 collapse in oil prices, key domestic risks that could trigger a made-in-Canada recession include: an economy more sensitive o to interest rates due to high house prices and household -1 indebtedness; lack of a sustained pick-up in business -2 investment to build capacity and support exports as the down- -3 cycle continues for households; and continued weakness in -4 +---.r-r-r-~r-r-r---.-.--r-r---.-.-r--.---.-r-r--+---.-~ 2000 2002 2004 2006 2008 2010 2012 2014 20·16 2018 2020 Canada's oil producing reg ions from a protracted period of Source: Oxford Economics production cutbacks, low prices, and distribution challenges.

Greater slack lowers inflationary pressures Canada: Consumption and Investment Growth below potential will create additional slack in the %year economy. The output gap is forecast to reach 1.0% in 2020, 15 and keep core CPI inflation just below the 2.0% target during 10 the next two years. We expect the Bank of Canada to hold interest rates steady for the rest of 2019, given sluggish growth, 5 reduced inflationary pressures, and dovish monetary policy at the US Fed and other central banks. As growth gradually -5 improves, the Bank of Canada will resume lifting interest rates in 2020, and gradually raise rates to 2.5% by 2022 - the low -10 end of its neutral rate range. -15

-20 +--.~-~~-~~-~~-~~-'-r--~- 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Source: Oxford Economics

11 CUSH MAN & Ill 111 •• WAKEFIELD 111 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 18

Key medium-term concerns

Renewed growth requires a transition in the economy away Canada: Monetary policy instruments from a reliance on consumer spending and housing, and % 7 towards growth led by business investment and trade. And F'cast 6 while a prolonged period of low oil prices could curtail energy investment longer term, it could also lead to a redirected focus 5 on opportunities in non-energy sectors. Canada's export 4 performance has been disappointing, and while reduced North 3

American trade uncertainty and a competitive currency should 2 support stronger net exports, slower growth in the US and rest of world are constraints on the upside. In the medium term, growth will be influenced by:

-1 +-r-r-r-~-,----r-r-r-~,.-,r-r-r-~..,-,-,.-r--'r-..,-,- Persistent drag from high household debt: household 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Source: Oxford Economics indebtedness will ease over the medium term, but remain well above levels in many developed economies. The deleveraging Canada: Non-fuel exports and world trade process will be protracted, and higher debt servicing costs will %year 25 World trade divert funds from other spending. 20 Housing activity will slow: in recent years, housing was 15 10 supported by solid job gains, strong growth in the prime home 5 buying population (ages 25-44), robust investor demand, and 0+-'!--il-+-+---1f-~+-\----ll--'--'l-+'--'----1i-rl-l-J-+-=== historically-low interest rates. We expect housing activity to -5 ease reflecting slower job growth, reduced expectations for -10 house price inflation, higher financing costs, and strict policy -15 measures. -20

-25 +--r-r-r-~,.-,r-r~~~-r-~~r-r-r--r-'~~ Reasonable external backdrop: world trade, weighted by 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Canadian export shares, is expected to grow by 3.4% annually Source: Oxford Economics over the next two years. New federal tax measures to spur Canada: Unemployment and the NAIRU % business investment, and the USMCA will support exports. 12 However, the US administration's protectionist agenda and a Actual unemployment Peas\ possible trade war with China remain risks. 11 10 Key long-term advantages 9

Energy sector opportunities: Canada's vast energy reserves 8 mean it will benefit from rising oil and gas prices over the long 7 term. 6 Healthy government finances: the federal budget deficit 5+-,--~~~~~~~~~~~~~~--r-'r~ remains manageable. The government is boosting spending, 1990 1993 1996 1999 2002 2005 2008 2011 2014 2011 2020 notably on infrastructure, to bolster the economy. Nonetheless, source: Oxford Economics government debt as a percentage of GDP should still decline over time.

Growing labor supply: although slowing, Canada's working age population is expected to grow at a faster rate than in most other advanced economies, supporting long-term potential growth.

11 CUSHMAN & Ill 111 Illa WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 19 112

What to watch out for

US policy uncertainty: the US administration has injected a Canada: House prices high degree of uncertainty surrounding the US economic - Greater Vancouver and Toronto areas %. year - Other major metro area$ outlook. In particular, protectionist trade policies could lead to 28 Canada weaker Canadian export growth, even with the USMCA. 24 20 High household indebtedness: household debt metrics, 16 including debt-to-disposable income, are historically high. 12 Excessively-high house prices: house price pressures 8 4 appear to have stabilized in the Greater Toronto and Greater 0-1----+\.~l-----_...,I----==----'--\'. Vancouver areas, however prices remain overvalued in both -4 metro areas. -8

-12 ' Pick up in business investment: stronger investment is 2008 2010 2012' 2014 2016 2018 needed to add capacity, support growth in exports, and help Source: Oxford Economics/Hover Analytics transition the economy from household-led growth. Impact of scenarios on GDP growth Oil prices: a persistent decline in oil prices could slow activity Average annual impact over the next 3 years {% points) in the resources sector and hurt the growth outlook for the energy-intensive provinces. 0.2 Policy fuels EM upturn

Financial sector stability: Canada's banking system remains No-dear Brexit largely stable and well-fortified, although the real estate sector Rising protectionism and high household debt are risks. Market tum1oil

Higher interest rates: sharply higher rates could choke off -0.2 China slowdown Canada's economic growth - particularly with an economy more -0.7····· Full-blown global trade war interest-sensitive given high household debt levels.

Exposure to key global risks Impact of scenarios on GDP growth %year Full-blown global trade war: in this scenario we assume trade 3.5 policy tensions escalate dramatically. The US implements a 3.0 number of additional major trade policy measures, affecting not 2.5 only China, but also other key trading partners, including the 2.0 EU, Japan and (despite the USMCA agreement) Canada and 1.5 Mexico. World growth falters to 2.2% in 2019 and 1.4% in 2020, 1.0 while Canadian growth drops to 0.7% this year, and -0.5% in 0.5 2020. 0_0 +-~--~~Po=li~c~fu=el~s =EM'-'-u=tu=m---t-----'<---+-- -China slowdown China slowdown: this scenario assumes the Chinese --0. 5 -Baseline economy slows markedly, as deteriorating confidence hits both -1.0 -+-----~-----+------~ 2013 2015 2017 2019 2021 household consumption and private investment. While source: oxrorct Economics government investment continues to pick up, the overall offset from policy stimulus is limited, as policymakers initially misjudge the extent of the slowdown. World economic growth eases to 2.3% this year and 2.4% next year, slowing Canadian growth to 0.9% in 2019 and 0.8% in 2020.

~ CUSHMAN & Ill Ill llbl WAKEFIELD 113 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 20

Background

Economic development

Canada is a market economy, where most decisions are taken by private individuals and firms. The economy is diversified, though huge deposits of tar sands give Canada the second largest reserves of oil in the world, and have increased the importance of the country's energy sector in recent years (however, the price of oil has to remain quite high to make such production economically viable). Although commodities and manufacturing account for relatively small shares of total output and employment, they account for over half of Canada's exports.

Structure of the economy Canada has a reputation as a resource-based economy, but that is misleading. While it is certainly rich in resources, from energy commodities to lumber and minerals, the economy is actually services-based. About two-thirds of the nation's output originates in the services sector, and nearly three-quarters of workers are employed there. Key service sub-sectors include retail trade, business services (financial services, real estate, and communications), education, and health services. The main manufacturing industry is motor vehicles and parts, which is centered in the province of Ontario. The manufacturing sector is responsible for less than 10% of total employment, while agriculture accounts for less than 2%.

Balance of payments and structure of trade

Trade is a very important sector of the economy - both imports and exports represent more than a third of GDP. About 75% of exports go to the US, and over 60% of imports originate there, so changing economic conditions in the US economy can be critically important to Canada. Services are an increasingly important part of Canadian trade with foreign countries, stressing Canada's competitive advantage as a knowledge-based economy with a highly-skilled workforce.

Politics Canada is a parliamentary democracy and constitutional monarchy. Parliament is comprised of three distinct parts: the Queen, the Senate, and the House of Commons. The House of Commons, containing 338 sitting members, is the main seat of power of Parliament, and is able to propose, debate, and vote on bills before they become law. Importantly, only the House of Commons can propose changes to fiscal policy. Federal elections are conducted every four years, with an election now on the horizon in October, 2019.

• CUSHMAN & Iii Ill lllbii WAKEFIELD 114 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 21

Summary

Politics Head of state: Queen ELIZABETH II Head of government: Prime Minister Justin TRUDEAU Political system: Federal parliamentary democracy Date of next legislative election: 2019 Currency: Canadian dollar (CAD), floating exchange rate

Long-term economic & social development 1980 1990 2000 2017* GDP per capita (US$) 11135 21371 24124 45264 Inflation (%) 10.1 4.8 2.7 1.6 Population (mn) 24.54 27.69 30.65 36.49 Urban population (% of total) 75.7 76.6 79.5 81.4 Life expectancy (years) 75.1 77.4 78.0 82.3 Source : Oxford Economics & World Bank

Structure of GDP by output • 2017 or latest 2016 available year Source : CIA Factl>ook Agriculture 1.6% Location: Northern North America, bordering the North Industry 27.7% Atlantic Ocean on the east, North Pacific Ocean on the west, Services 70.7% and the Arctic Ocean on the north, north of the conterminous Source : CIA World Factl>ook US (CIA Factbook)

Long-term sovereign credit ratings & outlook Corruption perceptions index 2018 Foreign currency Local currency Score Fitch AAA (Stable) AAA (Stable) Developed economies (average) 74.6 Moody's Aaa (Stable} Aaa (Stable) Emerging economies (average) 38.2 S&P AAA (Stable) AAA (Stable) Canada 81.0

Source: Transparency International Structural economic indicators Scoring system 100 =highly clean, O =highly corrupt 1990 1995 2000 2017* Current account (USS billion) -20.3 -5.2 18.5 -46.5 Trade balance (USS billion) 9.4 25.6 44.4 -19.2 Composition of goods & services exports 2017 FDI (US$ billion) 2.4 -2.2 21.7 -54.4

Govt budget (% of GDP) -5.0 -4.9 3.0 0.3 Govt debt(% of GDP) 73.0 102.1 84.3 93.2 40.7% Long-term interest rate 10.7 8.2 5.9 1.8

Oil production (000 bpd) 1215 1412 1547 2950 Oil consumption (000 bpd) 1722 1799 2008 2445 Source : Oxford Economics I World Bank f EIA

22.4% Destination of goods' exports 2018 United States 75.5% BAgrirultural prcpcrts China 4.7% BTran sport !!!Travel

Japan 2.2% ID 0th~ oommercial services Other 10.1% Source : IMF DOTS Source: WTO

la CUSHMAN & 111 'Il lllllii WAKEFIELD 115 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 22

Provincial and Metro Markets Economic Overview

Canada's largest cities face tough times ahead

Canada's economy will experience below-potential growth over the next two years, as soft commodity prices, a weak global backdrop, and consumer deleveraging all weigh on private consumption and investment. Having come to a virtual standstill in late 2018, we expect annual GDP growth to stay in the low-1% range during 2019-20.

Despite Alberta easing its oil production cap, transportation bottlenecks continue to weigh on output. As a result, we expect its economic growth to stall this year, but then to average 2% annually from 2020-23 - still Canada's best-performing province in the longer term.

The key drivers that propelled the housing market during the past several years are unwinding. Our outlooks for Vancouver and Toronto are weaker than for other Canadian metros, with house prices in these core cities projected to grow by only 0.6% and 0.9% per year through 2023.

The good news for many peripheral regions is that they lack the housing malaise of Canada's largest. However, they face downside risks from weakened global commodity prices - notably potash in Saskatchewan, and uranium in Manitoba. Atlantic Canada remains the country's slowest-growing region in our five-year forecast.

Average annual GDP growth forecasts for 2019-23, by region

% 1.8

1.5

1.2

0.9

0.6

0.0 Pralnes Pacmc Central Allantic Source: Oxford Economics

The key macro assumptions that drive our regional view

We expect Canada's economy to continue to underperform over the next two years. Having come to a virtual standstill in late 2018, we forecast growth to be only in the low-1% range during 2019-20. Given this backdrop, monetary policymakers will likely put further interest rates hikes on hold. However, we still expect interest rate sensitive industries, such as housing and autos, to experience slower growth as consumers grapple with higher debt service costs, relative to recent history. Consequently, we expect consumption to contract in coming years.

Canada's commodities sector remains under pressure - in particular from cutbacks in oil output, heightened US production, and softer global demand (Oxford Economics forecasts the West Texas Intermediate oil price to remain stuck in the high-$50/barrel range for the next few years.). But this outlook isn't exclusive to crude oil: industrial metals production in Saskatchewan and Manitoba is also facing waning global demand.

Weaker energy production, which is an extremely capital-intensive activity, will weigh on overall business investment this year. At the same time, Canada must contend with weakened international demand for durable exports, such as transport equipment and machinery. Private business investment is therefore projected to decline by 1.7% in 2019, while export growth is decelerating. Furthermore, production cuts at General Motors and Bombardier will cause ripple effects throughout their supply chains in Ontario and Quebec. With the collection of downside risks mounting, our probability forecast of a major downturn in the Canadian economy within the next 12 months has increased.

~ CUSHMAN & Ill Ill I~ WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 23 116

Annual changes in Canada's private investment and consumption levels

% -Investment (UIA) - Consumption (RllA) % 15 4.0 3.5 10 3.0 5 2 5

0 +-~-~~-~-\-~~--rl---.____,,,,~---,,'f'L-~-~~--+ 2.0 1.5 -5 1 0 -10 0.5 -15 0.0 2010 2012 2014 2016 2018 2020 2022 Source: OXford Economics, Statistics Canada

Vancouver and Toronto hit by Canada's consumer debt problem

The key drivers of recent house price appreciation and household debt across metropolitan Canada are unwinding. Interest rates have increased, tighter policy is constraining mortgage credit, and overall economic growth is slowing - with cities such as Vancouver and Toronto expected to see a notable slowdown in house price appreciation.

The volume of home sales is therefore trending down, and price appreciation has stalled. Canadian consumers are deleveraging to reduce their debts, and mortgage growth is at its slowest pace since 2002. On the upside, however, overall credit quality may be improving. The share of new high-ratio borrowers (with loan-to-value ratios above 80%, or mortgages in excess of 450% of income) dropped to less than 10% of all new mortgages in 2018, according to research from the Bank of Canada.

Consumer debt levels are unsustainable, and deleveraging will be healthy in the long-run, but it will take its toll on Canadian metros in the near-term. According to Canada Mortgage and Housing Corporation, the debt-to-personal disposable income ratio in Vancouver and Toronto was 242% and 208% respectively, compared to 178% for Canada overall as of 2018 02. The Bank of Canada's recent Monetary Policy Report stated: "The combined effect of tighter mortgage guidelines and higher interest rates has been larger than previously estimated" - suggesting the effects of this deleveraging are indeed being felt.

Our outlook in Vancouver and Toronto is weaker than in other Canadian cities, with their house prices forecast to grow by average annual rates of 0.6% and 0.9% respectively through 2023. This represents a significant deceleration from recent history. Indeed, a weaker outlook for the housing market - the primary source of wealth for most households - will also weigh on discretionary spending. During 2019-21, annual consumer spending growth in these two cities will slow more than Canada overall.

Change in debt-to-income ratio, by metropolitan area

•2015 02 m2018 02 250

200

150

100

'Mnnipeg Edrnonlon Calgary Halifax Montreal Carrnda Toronto Vancouver Sourco: Oxford Economics, CIAHC, Equifax, Statistics Canada

l!i CUSHMAN & Ill lllllil WAKEFIELD 117 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 24

Comparison of house price growth for Canada, Vancouver, and Toronto

yly(%) -1oronto -Vancouver -canooa 25

15 10

-10 2000 2003 2006 20o

Oil price volatility haunts Alberta's economy again

Alberta's increased oil output in 2018, coupled with its limited pipeline capacity to deliver the raw product to refineries across North America, has resulted in a supply glut of Albertan crude oil causing the price of Western Canada Select heavy crude to drop. Provincial policymakers responded by imposing a production cut - a bold move for a traditionally pro-market, laissez-faire province.

However, while Alberta is now easing its oil production cap, transportation bottlenecks will continue to weigh on its output. We therefore forecast the province's economic growth to stall this year, before averaging around 2% annually from 2020-23.

The upshot is that, while Alberta's economic growth will be slow in the immediate future, the province should avoid the dramatic cuts to employment and income suffered during its last supply glut. Over the longer term, we continue to expect slower growth relative to previous cycles, when US$1 OD/barrel oil made Canadian oil sands' extraction much more profitable. Nonetheless, the Wild Rose province is still expected to outperform all other regions over our forecast period.

Average annual provincial GDP growth forecasts for 2019-23, by province.

2.1 1~ll1U.11_1.L.

Source: Oxford Economics

The outlook for peripheral Canadian regions

Canada's other two Prairie provinces, Saskatchewan and Manitoba, should see improved growth in coming years, after an anticipated soft 2019, with average annual GDP growth of 1.3% and 1.4% during the next five years. These provinces may lack the concentration of oil and gas in Alberta, but commodities are still an important driver of growth. Saskatchewan is one of the world's few suppliers of potash, and prices have plummeted in recent years due to industry-specific changes (and recent policy in China impacting Canadian imports). While these prices remain depressed compared to 2015, the industry's fundamentals are beginning to firm, and local production is expected pick up slightly in the near term.

1! CUSHMAN & Ill 111 lta WAKEFIELD 118 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 25

Furthermore, Saskatchewan's uranium industry faces weak global fundamentals, and its McArthur River Mine is shuttering for the foreseeable future. Neighboring Manitoba faces similar pressures, with its iron ore and nickel mines having paused production in recent quarters. But on the upside, both provinces have sizable agricultural and food manufacturing sectors that could be supported by the soft Canadian dollar, and both also have less exposure to mortgage credit than Ontario and British Columbia.

Atlantic Canada remains the country's slowest-growing region over our latest forecast period. Some of its provinces will experience a continued decline in population. Key industries such as fishing, lumber, and energy, will continue to struggle. GDP growth for the entire region is unlikely to surpass an annual average of 1% per through 2023. Halifax, Atlantic Canada's largest city, should outperform the broader region, however, thanks to its superior demographics. Its shipbuilding industry, presently driven by naval contracts, should support growth in its manufacturing sector at an average annual rate of 1.7% over the next five years.

Summary forecasts for Canada

Total employment Annual % change GDP 2018 2019 2020 2019-23 2018 2019 2020 2019-23

Canada 1.8 1.1 1.2 1.4 1.3 1.4 0.4 0.7

West 2.1 0.8 1.6 1.7 1.3 1.2 0.6 0.9 Alberta 2.8 0.6 1.8 1.B 1.9 0.6 1.0 1.1 Calgary 2.4 1.1 2.4 2.4 1.0 1.0 1.3 1.4 Edmonton 3.3 1.2 2.0 2.1 2.3 3.0 1.3 1.8 Brttish Columbia 1.7 1.1 1.6 1.6 1.1 2.0 0.3 0.8 Vancouver 1.9 1.7 2.0 2.1 2.0 2.1 0.7 1.2 Manitoba 1.7 1.0 1.1 1.4 0.6 1.1 0.3 0.6 Saskatchewan 1.1 0.3 1.2 1.3 0.5 1.0 0.1 0.4

East 1.7 1.3 1.0 1.3 1.3 1.5 0.3 0.6 New Brunswick 0.7 0.7 0.5 O.B 0.3 0.4 0.1 0.1 Newfoundland & Labrador -1.4 .{).2 0.6 0.4 0.4 2.6 --0.9 0.0 Nova Scotia 0.6 0.6 0.7 O.B 1.5 1.7 0.1 0.3 Ontarto 1.8 1.4 1.0 1.4 1.6 1.8 0.4 0.7 Toronto 2.0 1.5 1.5 1.8 2.3 0.9 0.9 0.9 Ottawa 2.4 1.7 1.1 1.5 2.0 0.8 0.5 0.6 Prince Edward Island 2.0 1.2 0.8 1.2 3.0 0.5 0.2 0.3 Quebec 1.8 1.2 1.0 1.3 0.9 1.1 0.2 0.4 Montreal 2.0 1.6 1.2 1.5 2.0 0.8 0.4 0.5

Office-based employment Consumer spending Annual % change 2018 2019 2020 2019-23 2018 2019 2020 2019-23

Canada 1.1 2.8 0.3 0.9 2.1 1.3 1.6 1.6

West 1.6 3.2 0.2 1.1 1.9 0.8 1.8 1.7 Alberta 2.6 1.3 0.2 0.9 1.2 .{).2 1.B 1.8 Calgary -2.4 1.0 0.6 1.1 1.4 0.3 2.3 2.3 Edmonton 8.7 1.9 0.4 1.1 1.3 0.0 2.0 2.0 British Columbia 1.0 5.2 0.2 1.4 2.4 1.3 1.9 1.B Vancouver 1.1 5.4 0.7 1.B 2.5 1.6 2.2 2.1 Manitoba 1.4 2.0 0.0 0.6 2.4 1.7 1.6 1.7 Saskatchewan 0.0 2.7 .{).2 0.6 1.3 1.1 1.6 1.5

East 0.9 2.6 0.4 0.8 2.2 1.5 1.4 1.5 New Brunswick 2.0 -0.5 .{).2 .{).2 1.5 0.8 0.7 0.7 Newfoundland & Labrador 5.9 9.4 .{).5 1.6 0.1 1.2 0.1 0.5 Nova Scotia -2.7 -0.8 0.7 --0.1 1.B 0.8 0.9 0.9 Ontarto 0.6 2.6 0.4 0.9 2.6 1.9 1.6 1.7 Toronto 2.9 --0.3 0.8 0.6 3.0 2.3 2.1 2.2 Ottawa -4.0 3.0 0.1 0.8 2.8 2.1 1.B 1.9 Prince Edward Island 1.0 6.4 0.6 1.7 1.6 1.6 1.5 1.5 Quebec 1.6 2.9 0.4 O.B 1.8 1.0 1.4 1.4 Montreal 4.6 0.0 0.6 0.4 2.0 1.2 1.6 1.6

Source: Statistics Canada I Oxford Economics

• CUSHMAN & Ill Illlllil WAl

Regional Municipality of York Market Overview

Overview

The Regional Municipality of York is located in Southern Ontario, south of Lake Simcoe and at the northern boundary of the City of Toronto. The Municipality is part of the Greater Toronto Area and the inner ring of the Golden Horseshoe. York Regions diversity is evident in their nine local municipalities, geography, economic development, and population. According to the 2011 census, the Municipality has an estimated population of approximately 1,032,524, a 16% growth from 2006. The Government of Ontario expects the population to surpass 1.5 million residents by 2031. Over 70% of the region's population is concentrated in the three southern municipalities of Markham, Richmond Hill, and Vaughan. As a major residential and commercial growth centre within the Greater Toronto Area, the nine York Region municipalities (and particularly the southern municipalities) have attracted a significant amount of new housing and commercial development in recent years, influencing land pricing and development economics.

As shown in the map above, the Municipality of York contains nine towns and cities: The southern and central municipalities - Cities of Markham and Vaughan and Town's of Aurora, Richmond Hill and Newmarket - are generally well-developed and continue to be nodes that attract new (predominantly residential and commercial) growth. The remaining municipalities - Town's of Stouffville, Georgina, East Gwillimbury and the Township of King - are currently less urbanized. However, due to the minimal amount of remaining development lands within the southern and central municipalities, these areas are logically next in line for development.

lill CUSHMAN & Ill lllllllil WAKEFIELD 120 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 27

Below you will find information that describes the key facts and statistics for the Regional Municipality of York, its residents and business community: Quick Facts

2016 POPULATION BY GREATER TORONTO AND HAMILTON AREA lGTHAJ M.l~l"CiPALITY

Estimated Population

LandArea 1, 762.17 km 2

$43 Billion Municipal GDP Economy 506, 000 local jobs

Financial, Insurance & Business Services Information & Communications Technology Advanced Manufacturing Major Industries and Commerce Life Sciences and Healthcare Technologies Building and Construction Educational Services

Labour Force >25 years of age 565,295 (2016 Census)

Unemployment Rate 6.4%

Total# of Occupied Dwellings 323,543

Highways: Highway No. 's 400, 404, 407, 427, 7, 9, 48, 50 & 27 Bus: YRT (York Region Transit) & Viva, TTC Transportation Rail: CNR, CPR & Go Transit Air: Pearson International Airport & Buttonville Airport

*Information collected from The Regional Municipality of York website, 2019

lilli CUSHMAN & Ill llllllli WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 28 121

GROWTH RATE BY TYPE OF DWELLING Apartments• were the fastest growing dwelling type since 2011

Single Semi Townl1oose Apartmoot Duplex Total

The location of York Region, strategically positioned within the GTA, is Ontario's second largest business centre, and promotes a pro-business environment. The growth of York Region accounts for 52% of the total population growth of the GT A, which is coupled with a household income 30% above the national average. These statistics provide insight into a booming residential and business sector with a qualified workforce.

2016 HOUSING UNIT MIXBYLOCALMUMC!PALITY

Aurora 10,a50 11,3as I 60% 1,395 B% 3,3so I 18% 2,100 11% 620 i 3% East Gwillimbury 8,080 6,720 83% 225 3% 535 7% 280 3% 4% >------~----~·-----1-- Georgina 16, 820 13,985 83% 435 3% 740 1 --:;;-- 1.005 7% 575 3% King 8,145 7,095 87% 110 2% 340 I 4% 500 6% 100 1% ·------····----···-·~ Markham 102,675 60,905 59% 6,515 6% 13;;~ . ;~-- 15,410 15% 5,875 6% Newmarket 2B)i65 11,305 I 60% 2,215 8% 3,550 12% 3,620 13% 1,975 7% Richmond Hm 64,115 37,700 59% 2,555 4% 9,670 15% 12,245 19% 1.945 3% r..---V-au-gh-an--t---.-9··-4,2--50------r- 61,250 I 65% ~:;8~·---;,;-t·-,0-,17-5--i---ll-%~1-11,79-5--+--12··-% .. ·-l-3,3--45--+~4%----ll r---W-h-n~-u-rc_h_--1---1-~-~---~-ll-J3_5_1r---Tu-'%---t-81-0--+-l-5%-.--+--1~-50-+-10_%---t-8-55--+l-6-%~ 1-40-5--!~j Stouffville

A major asset for York Region is its close proximity to the City of Toronto. This has been a key driver in the growth of the Region and with 140 Million consumers within a 500 mile radius, expansion and growth of the area is anticipated to continually increase. York Region is Ontario's 2nd largest financial sector after Toronto - with approximately 1,596 firms locally. The tremendous growth York Region is seeing in a vast variety of sectors has led to a modern transit infrastructure project that will connect the urban centres, municipalities and cities; in an effort to grow the Region and provide efficient travelling options.

• CUSHMAN & Ill Ill lbJI WAKEFIELD 122 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 29

Town of Richmond Hill Overview

Richmond Hill is a Town situated in Southern Ontario in the central part of York Region, Ontario. Located a short distance north of the City of Toronto, Richmond Hill is third most populous municipality in York Region with a population of 195,022 (2016 census), an increase of approximately 5% since the 2011 census.

Rate of Population Increase

14% 12% 10% 1!!12006-2011 8% lill2011-2016 6% 4% 2%

0% Richmond Hill York Region Toronto (CMA) Ontario Canada

The Town is an emerging economic presence in Ontario with a youthful population - 63% of which is under the age of 45; while approximately 41% of the population holds a university degree. This has resulted in a market with a high percentage of skilled workers, and in turn has driven the demand for knowledge based businesses to the community. In addition, there has been an increase in household incomes, suggesting stronger purchasing power, which will ultimately translate into greater demand for retail, dining and entertainment and recreation experiences in the Town.

Along with the other municipalities of York Region, the close proximity to Toronto is an important role in the local economy. New transportation infrastructure will provide greater ease in commute to high demand jobs across the GTA and will help further advance the region's economy.

Below you will find information that describes the key facts and statistics for the Town of Richmond Hill, its residents and business community:

Quick Facts

Estimated Population 195,022 (2016)

Land Area 100.95 km 2

Location Central York Region - midway between City of Toronto and Lake Simcoe

Finance & Insurance Professional, Scientific and Technical Services Major Industries and Commerce Information and Cultural Industries Health Care and Social Services

li! CUSHMAN & 111 lll•• WAKEFIELD 123 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 30

Labour Force 115,358 (2012)

Unemployment Rate 3.7% (2006)

Average Household Income $117,414 (2012)

Total# of Occupied Dwellings 65,578

Highways: Highway No.'s 400, 407, 404, 427 and 7 Bus: YRT (York Region Transit) & Viva Transportation Rail: CNR, CPR & Go Transit Air: Pearson International Airport & Buttonville Airport

Residential Development Residential Charges (Built Boundary): Boards of Education Rate Per Unit (effective March 1, 2017) Separate $991 Public $5,416 Total $6,407

Region of York Single/Semi - Multiple Apartments (> 700 Apartments (< 700 (effective Nov 8, 2018) detached Housing square feet plus) square feet(-) and less)

Hard Services (payable at $52,818 $42.517 $30,900 $22,575 execution of subdivision agreement) Soft Services $6,302 $5,066 $3,684 $2,671 Total $59,120 $47,583 $34,584 $25,246

Town of Richmond Hill Single/Semi - Multiple Apartments (> 650 Apartments (< 650 (effective July 1, 2018) detached Dwellings square feet plus) square feet(-) and less)

$18,430 $14,963 $12, 102 $7,081

Richmond Hill Area Specific Development Charges Payable at execution of site plan/ subdivision agreement/ land severance/ building permit issuance. By-law Price per net hectare By-law 53-14 Elgin West Development Area $180,935 By-law 54-14 Head[ord Storm North of Rouge Development Area $41,148 By-law 55-14 Urban Fringe (East) Development Area $71,979 By-law 56-14 Oak Ridges-Lake Wilcox (Overall) Development Area $95,899 By-law 57-14 Oak Ridges-Lake Wilcox (Greenfield) Development Area $243,037 By-law 30-16 Bayview North East Development Area $235,551 By-law 32-16 Headford- Excluding Storm Development Area $159,550 By-law 33-16 North Leslie West Development Area $44,006 By-law 34-16 North Leslie East Development Area $23,385 By-law 35-16 West Gormley Development Area $48,790

Other Charges Pavable at Permit Stage Water Meter Charge - 1• $505 Tree Charge $530 Green Bins and Recycling - $61.61 per house $23.59 per apartment (1-2019) January 1, 2019

* Information collected from Town of Richmond Hill website, 2019

With strong ICT, Life Science, Professional, Scientific and Technical Services clusters, highly accessible and strategically located employment areas, new transportation infrastructure and a high standard of living, Richmond Hill is sure to be a solidified economic presence in Ontario.

~ CUSHMAN & 111 Ill 1111 WAKEFIELD 124 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON MARKET AND LOCATION ANALYSIS 31

Immediate Adjacent Land Uses:

North: Open Space Lands I Jefferson Side Road

South: Single Family Dwellings I Future Urban Development Lands

East: Future Urban Development Lands I Yonge Street

West: Built-Up Single Family Residential Uses

Neighbourhood Map !~$

j,o.Jl~ec<-

Conclusion

The lands are situated within an established and developing, mixed-use residential and commercial area of northern Richmond Hill -within close proximity to numerous retail and commercial uses. One of the most critical components of the area is the excellent public transit access -with the Yonge I Jefferson YRT (York Region Transit) Bus Station located at the boundary of the Subject site. We observed no detrimental influences in the local market area, such as landfills, flood areas, noisy or air polluting industrial plants, or chemical factories. Due to the location within the urban boundary of Richmond Hill and the excellent access to numerous amenities, public transit and major transportation corridors, the Subject property is undoubtedly located within an excellent urban re-development area of Richmond Hill.

lili CUSHMAN & ill lllIlla WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON HIGHEST AND BEST USE 32 125

HIGHEST AND BEST USE

The principal of the "Highest and Best Use" of a property is fundamental to the concept of market value. Highest and Best Use is defined by the Appraisal Institute of Canada as:

We have evaluated the sites Highest and Best Use both "as if vacant" and "as improved". The property's Highest and Best Use must meet the following four criteria: The use must be (1) legally permissible; (2) physically possible; (3) financially feasible and (4) maximally productive.

Legally Permissible • In determining the Highest and Best Use of a property, it is important for the appraiser to ascertain the range of uses that are legally permissible. In cases where modifications to the Official Plan or Zoning By-Law designations are likely, these uses must also be considered. Consideration should also be given to public planning initiatives and economic and political conditions that affect planning decisions. These considerations will assist the appraiser in determining whether amendments to the Official Plan and I or Zoning By-Law is likely. • As outlined within the Planning analysis, the Subject property has both the Official Plan and Zoning in place to permit a future urban residential development use. We understand that the development is nearing final approvals for all development by the City of Richmond Hill. Consequently, as outlined by the concept development plan and the land use submissions to the City of Richmond Hill, the lands will be developed with a residential development - containing 96 residential units and a total gross floor area (GFA) of approximately 135,552 square feet. This GFA includes approximately 63,660 square feet of stacked townhouse space and approximately 71,892 square feet of townhouse space. The development results in an FSI (floor space index [density]) figure of approximately 1.15 times the site area.

Physically Possible • The proposed I current use for a site cannot be considered the Highest and Best Use unless that use is physically and functionally possible and adaptable to the characteristics of the site. The size, shape, area, topography and soil conditions may affect the potential uses that can be developed. The physical possibility of development for the Subject property also reasonably expects that development can occur without additional costs above those of a typical vacant site. In cases where there are unusual costs associated with a development (i.e. soil clean, demolition, external costs, etc.) these costs should be deducted from the market value estimate. • The Subject property contains a total land area of approximately 2.700 acres, of which the entire site is deemed to be net developable table land. The site contains frontage along the Jefferson Side Road corridor, and once built-up, will also contain vehicular access via the arterial. The lands are currently vacant. The site has full municipal services available at the site boundary - however, will require internal servicing prior to development. The Subject property comprises a size I configuration that would allow for a future residential development use - containing a total of approximately 96 units (both stacked townhouses and townhouse units) - similar to what is outlined within the development plans outlined herein.

lli CUSHMAN & Ill lll 11111 WAKEFIELD 126 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON HIGHEST AND BEST USE 33

Financially Feasible • The estimate of Highest and Best Use is based on the market demand for the intended use, reasonably expecting that purchasers have rationalized a positive financial benefit. Further, in order to be financially feasible, there must be demand or a market for the intended use. Throughout our market research, although end unit pricing has been slowing, it is evident that the market for residential development lands within the Richmond Hill area has remained stable and strong over the recent months. In addition to the demand characteristics, of the 96 residential units, all of the 60 stacked townhouses have been sold, while 30 of the 36 townhouses have been sold - indicating a 94% sold rate. Consequently, a future residential development use - containing a total of approximately 96 units (both stacked townhouses and townhouse units) - similar to what is outlined within the development plans outlined herein, would be feasible and marketable, based on the Subject's location, site size, shape and land use policy.

Maximally Productive • A use cannot be considered a site's Highest and Best Use unless its anticipated earnings ability is sufficient to generate a reasonable return on costs of acquisition and development. This aspect of Highest and Best Use inherently involves a cost benefit analysis whereby the use that generates the highest profit or greatest return logically represents the Highest and Best Use. Given the location of the lands within a prime area of urban Richmond Hill, the surrounding uses and the existing land use policies of the Subject property, a future residential development use - containing a total of approximately 96 units (both stacked townhouses and townhouse units) - similar to what is outlined within the development plans outlined herein, would most likely generate the highest returns to a potential investor, as compared to other permitted uses.

HBU - As Vacant • Considering the Subject parcel's physical characteristics and location, as well as the state of the local market. it is our opinion that the Highest and Best Use of the Subject parcel "as vacant" is for a future residential development use - containing a total of approximately 96 units (both stacked townhouses and townhouse units) - similar to what is outlined within the development plans outlined herein.

HBU - As Improved • It is our opinion that the Highest and Best Use of the Subject parcel "as improved" is also for a residential development use - containing a total of approximately 96 units (both stacked townhouses and townhouse units)- similar to what is outlined within the development plans outlined herein.

ll!i CUSHMAN & Ill lll 1111/ii WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 34 127

VALUATION PROCESS

Valuation Methodology

There are generally four accepted methods of valuing real property:

• Direct Comparison Approach;

• Land Residual Approach;

• Cost Approach; and

• Income Approach

The selection of the relevant methodology depends on the characteristics of the real estate being analyzed.

2) The Land Residual Approach to value is based on a proposed development of the land, where the costs of construction and development are known and deducted from the expected market value of the completed project. A Land Residual method can provide support for market value in tandem with a Direct Comparison Approach.

3) The Cost Approach to value is based on the economic principle of substitution, which states that the value of a property should not be more than the amount by which one can develop (by purchase of a site and construction of a building without undue delay) a property of equal desirability and utility.

4) The Income Approach to value is used to estimate real estate value based on property income generating capabilities using the Direct Capitalization Method or the Discounted Cash Flow method.

There are two traditional methods to income valuations.

a) Direct Capitalization Method - division of a required yield (inverse of a required income multiple) into Net Operating Income to yield a value.

b} Discounted Cash Flow Method is a method that accounts for the anticipated growth or decline in income over the term of a prescribed holding period.

Selection of Valuation Methodology

For the purpose of this report, we have initially analyzed the Subject property via the Land Residual Approach to Value. The Direct Comparison Approach (i.e. per square foot of buildable GFA I$ I acre of land area analysis) has also been undertaken and has been utilized to ensure reasonability. The Land Residual Model is based on a proposed development of the land, where the revenue estimate (i.e. the sale of the end units) is analyzed. Once the estimated "as complete" value is concluded at, costs (hard & soft) of construction, development charges, cash in-lieu and development profit are deducted from the expected market value or revenue of the completed project. Further, a discount for time and risk is allocated based on the current planning stage of the Subject site. Since, for the purpose of this analysis, we are assuming that the Subject lands are fully approved, logically, the development time frame and risk associated with the development would be minimal. The resulting value is that price which the developer would pay for the Subject property "as is". This method is viable since a prudent purchaser would analyze the property based on the future development potential of the site (i.e. a future urban residential development site).

b!I CUSHMAN & Ill lll llltli WAKEFIELD 128 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 35

As outlined throughout, of the 96 total residential units, all of the 60 stacked townhouses have been sold, while 30 of the 36 townhouses have been sold - indicating a 94% sold rate. For the purpose of the residual value, we logically have used the revenue projection from the actual unit sale prices. Although a viable valuation methodology, it is noted that the Land Residual Approach to Value is highly sensitive to changes in inputs (i.e. end unit sale price, construction costs, etc.). While this is acknowledged, the resulting market value estimate appears to be reasonable based on the approved development scheme outlined herein.

Consequently, the Direct Comparison Approach has also been undertaken and has been utilized to ensure reasonability.

Further, with the changing development climate in the City, the impact of the new post-OMB system is difficult to predict - since the application process has changed while regulations have predominately remained the same. Under Bill 139, a greater amount of upfront preparation time, public and private consultation, paperwork and cost will be incurred by developers. Consequently, a great deal more strategy, time, consulting, analysis and studies (including environmental studies) will be needed at the pre-submission level. This means more paperwork and cost to submit a clear and concise report. The resulting impact is that properties that have received OMB I LPAT approvals are realizing higher $ I Sq.Ft. of buildable GFA I $ I acre of land rates - predominately due to the significantly lower risk, time and speculation involved with the development. A further analysis of the difference being seen in approved vs. non-approved rates is outlined within the Direct Comparison Valuation Process.

The Cost Approach and Income Approach were not developed in this report, as these approaches were not considered relevant in the valuation of the Subject property (vacant land). Consequently, the valuation methodology employed in this report was limited to the Land Residual Approach and the Direct Comparison Approach.

- I - Land Residual Model Analysis

It must be noted that the Land Residual Approach to Value analysis is highly sensitive to changes in inputs (i.e. a small change in the $I sq.ft. of residential GFA, or the $I sq.ft. of construction cost figures, may have a significant impact on the resulting market value estimate). While this sensitivity is acknowledged, the resulting market value estimate appears to be reasonable based on direct comparable land sale data for similar residential development properties within the immediate and surrounding areas. In order to understand the current market value of the Subject property, we have completed a Land Residual Approach for the Subject property development. This method is viable since a prudent purchaser would analyze the property based on the future development potential and revenue generating capabilities of the site. Once re developed, the Subject property will be able to collect revenue from the sale of each of the 96 residential units. For this approach, we have analyzed the actual revenue that will be generated from the project (i.e. the actual sales of the residential units). Once we have estimated the total revenue generated from the project, we are able to deduct the estimated cost to construct the improvements. The remaining value will be the "as is" market value of the lands in their current state (vacant lands).

llii CUSHMAN & Iii lll 11181 WAKEFIELD 129 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 36

Revenue Analysis

A developer acquiring the Subject property expects to earn revenue from the sale of the end unit townhouse sales to a property owner. As outlined throughout, of the 96 total residential units, all of the 60 stacked townhouses have been sold, while 30 of the 36 townhouses have been sold- indicating a 94% sold rate. The charts below summarize the current sold I unsold status of the Subject development:

101 217 Eaton Comer 919 $495 $454,900 102 216 Willington Comer 1,329 $549 $729,900 103 215 Harrington Comer 1,085 $645 $699,900 104 211 Eaton 885 $491 $434,900 105 212 Willington 1,329 $414 $549,900 106 213 Harrington 1,056 $634 $669,900 107 210 Eaton 885 $667 $589,900 108 209 Willington 1,329 $414 $549,900 109 208 Harrington 1,056 $450 $474,900 110 207 Eaton 885 $491 $434,900 111 206 Willington 1,329 $414 $549,900 112 205 Harrington 1.056 $634 $669,900 113 201 Eaton Comer 919 $675 $619,900 114 202 2 Willington Comer 1,329 $649 $729,900 115 203 3 Harrington Comer 1,085 $654 $709,900 116 101 Hampton Comer 1,032 $455 $469,900 117 102 2 Hampton 998 $451 $449,900 118 103 3 Hampton 998 $621 $619,900 119 105 4 Hampton 998 $621 $619,900 120 106 5 Hampton Comer 1,032 $630 $649,900 201 218 16 2 Eaton comer 919 $675 $619,900 202 219 17 2 Willington Comer 1,329 $564 $749,900 203 220 18 2 Harrington Comer 1,085 $654 $709,900 204 223 21 2 Eaton 885 $503 $444,900 205 222 20 2 Willington 1,329 $527 $699,900 206 221 19 2 Harrington 1,056 $653 $689,900 207 225 22 2 Eaton 885 $700 $619,900 208 226 23 2 Willington 1,329 $527 $699,900 209 227 24 2 Harrington 1,056 $653 $689,900 210 228 25 2 Eaton 885 $503 $444,900 211 229 26 2 Willington 1,329 $527 $699,900 212 230 27 2 Harrington 1,056 $653 $689,900 213 233 30 2 Eaton Comer 919 $675 $619,900 214 232 29 2 Willington Comer 1,329 $564 $749,900 215 231 28 2 Harrington Comer 1,085 $442 $479,900 216 111 10 1 Hampton Comer 1,032 $630 $649,900 217 110 9 Hampton 998 $621 $619,900 218 109 8 Hampton 998 $461 $459,900 219 108 7 Hampton 998 $461 $459,900 220 107 6 Hampton Comer 1,032 $639 $659,900 301 260 45 2 Eaton Comer 919 $522 $479,900 302 259 44 2 Willington Comer 1,369 $431 $589,900 303 258 43 2 Harrington Comer 1,085 $664 $719,900 304 255 40 2 Eaton 885 $678 $599,900 305 256 41 2 Willington 1,329 $527 $699,900 306 257 42 2 Harrington 1,056 $464 $489,900 307 253 39 2 Eaton 885 $678 $599,900 308 252 38 2 Willington 1,329 $549 $729,900 309 251 37 2 Harrington 1,056 $663 $699,900 310 250 36 2 Eaton 885 $678 $599,900 311 239 35 2 Willington 1,329 $433 $574,900 312 238 34 2 Harrington 1,056 $663 $699,900 313 235 31 2 Eaton Comer 919 $685 $629,900 314 236 32 2 Willington Comer 1,329 $444 $589,900 315 237 33 2 Harrington Comer 1,085 $664 $719,900 316 112 11 Hampton Comer 1,032 $639 $659,900 317 113 12 Hampton 998 $651 $649,900 318 115 13 Hampton 998 $651 $649,900 319 116 14 Hampton 998 $651 $649,900 320 117 15 Hamoton Com er 1 032 $ 639 $ 659,900 Total Revenue Generated from Unit Sales I Stacked Townhouse Units: $576 $36,829,000

Parking Revenue: $750,000

Upgrade Revenue: $600,000

Resulting Total Revenue I Stacked Townhouse Units: $38, 179,000

lili CUSHMAN & Ill lll 1111111 WAKEFIELD 130 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 37

CORNER 2,656 (incl. 403 sq.ft. fin bsmt) $1,578,900 2 LINCOLN INTERIOR 1,943 (incl. 237 sq.ft. fin bsmt) $999,800 3 LINCOLN INTERIOR 1,943 (incl. 237 sq. ft. fin bsmt ) $999,800 4 LINCOLN INTERIOR 1,943 (incl. 237 sq.ft. fin bsmt) $999,800 5 LINCOLN INTERIOR 1,943 (incl. 237 sq. ft. fin bsmt ) $999,800 6 BEDFORD CORNER 2, 143 (incl. 254 sq.ft fin bsmt) $1,358,900 7 BEDFORD CORNER 2, 143 (incl. 254 sq.ft fin bsmt) $1,004,900 8 LINCOLN INTERIOR 1, 943 (incl. 237 sq. ft. fin bsmt ) $1,238,900 9 LINCOLN INTERIOR 1,943 (incl. 237 sq.ft. fin bsmt) $1,238,900 10 LINCOLN CORNER 1,943 (incl. 237 sq. ft. fin bsmt ) $999,800 11 LINCOLN INTERIOR 1,943 (incl. 237 sq.ft. fin bsmt) $999,800 12 BEDFORD CORNER 2, 143 (incl. 254 sq. ft fin bsmt) $1, 199,900 13 YORK CORNER 1,792 $998,800 14 BRISTOL INTERIOR 1,573 $998,800 15 YORK CORNER 1,792 $998,800 16 YORK CORNER 1,792 $1,199,900 17 BRISTOL INTERIOR 1,573 $925,000 18 YORK CORNER 1,792 $998,800 19 YORK CORNER 1,792 $1,149,900 20 BRISTOL INTERIOR 1,573 $1,090,900 21 YORK CORNER 1,792 $1,149,900 22 YORK CORNER 1,792 $998,800 23 BRISTOL INTERIOR 1,573 $925,000 24 YORK CORNER 1,792 $669,000 25 PRESTON CORNER 2,438 (incl. 398 sq.ft. fin bsmt) $1,079,900 26 OXFORD INTERIOR 2,308 (incl. 384 sq.ft. fin bsmt) $999,900 27 PRESTON INTERIOR 2,374 (incl. 386 sq.ft. fin bsmt) $999,900 28 PRESTON INTERIOR 2,374 (incl. 386 sq.ft. fin bsmt) $999,900 29 PRESTON CORNER 2,438 (incl. 398 sq.ft. fin bsmt) $1,049,900 30 PRESTON CORNER 2,438 (incl. 398 sq.ft. fin bsmt) $1,049,900 31 OXFORD INTERIOR 2,308 (incl. 384 sq.ft. fin bsmt) $1,100,000 32 OXFORD INTERIOR 2,308 (incl. 384 sq.ft. fin bsmt) $999,900 33 PRESTON INTERIOR 2,374 (incl. 386 sq.ft. fin bsmt) $999,900 34 PRESTON INTERIOR 2,374 (incl. 386 sq.ft. fin bsmt) $999,900 35 OXFORD INTERIOR 2,308 (incl. 384 sq.ft. fin bsmt) $999,900 36 PRESTON CORNER 2 438 I 398 sq ..ft fi n b sm t) $1 079 900 ' Cme. J J Total Revenue Generated from Unit Sales I Townhouse Units: $38,081,700 Upgrade Revenue: $900,000 Resulting Total Revenue I Townhouse Units: $38,981,700

lfli CUSHMAN & 111 lll lb WAKEFIELD 131 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 38

Sales Summary - Stacked Townhouses & Townhouse

Since over 94% of the units within the development have sold, we have utilized the actual sale price. However, the sales occurred approximately 2-3 years ago - during stronger residential market conditions. This undoubtedly benefits the development, as recent end unit pricing has weakened. Therefore, in order to ascertain a reasonable "end unit" sale price for the unsold units within the Subject development, we have researched and analyzed comparable residential units for sale within the immediate and surrounding area. Additionally, in order to understand the change in market conditions, we have also analyzed end unit sale prices within the specific market district of the Subject site - with a focus on townhouse units. The prices outlined within the chart on the previous page appear to be reasonable and in-line with current prices for similar product type.

Market Value Conclusion "As Complete" After analyzing recent market transactions within the immediate and surrounding area, the following points must be noted: - The Subject development will be a newly built stacked townhouse and townhouse development - with good features and finishes; - The Subject property is situated within a good area of the Richmond Hill Market, with excellent access to numerous retail I commercial amenities, public transit and major highways;

- The Subject development has achieved sale prices of approximately $575 - $580 per square foot for the stacked townhouse units and $525 - $530 per square foot for the townhouse units.

Consequently, we have utilized the above charted figures in our residual model herein.

HST Overview & HST Rebate

For HST purposes, the term "builder" has a very specific meaning that is not limited to a person who physically constructs housing. Builder, for the purpose of the HST new housing rebate, generally includes a person who is in the business of constructing or substantially renovating houses for sale. The house may be on land owned or leased by that builder. For this purpose of this analysis, we have assumed that the Client is the "Builder" of this development, therefore would apply for the HST Rebate.

Individuals may be entitled to claim an HST new housing rebate for a house purchased from a builder if they: - purchased a new or substantially renovated house (building and land) from a builder; - purchased a new or substantially renovated mobile home or a new floating home from a builder (this includes the manufacturer or vendor); - purchased a share of the capital stock of a co-operative housing corporation (co-op); or, - purchased a new or substantially renovated house from a builder where you leased the land from that builder under the same agreement to buy the house and the lease is for 20 years or more or gives you the option to buy the land.

The maximum Ontario new housing rebate amount for owner-built houses depends on whether you paid the HST on your purchase of the land. The Ontario new housing rebate is limited to a maximum of $24,000 if you paid the HST on the purchase of the land, and $16,080 if you did not.

For the purpose of this analysis, we have assumed that HST has been paid. Since the unit prices within the Subject development area are generally greater than $450,000, we have allocated a maximum HST rebate of $24,000 per dwelling.

CUSHMAN & Ill llll !Iii WAKEFIELD 132 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 39

Therefore, the HST payable by the developer - upon final sale of the units - is calculated as 13.00% of the total potential revenue, less $24,000 per unit. Therefore, for the purpose of this report, we have deducted $7,726,891 in HST payable. The resulting HST rebate to the builder is approximately $2,304,000.

Additional Revenue Analysis

In addition to the unit sales, additional revenue will be received via sales of parking spaces and upgrade revenue once the units are purchased. For the purpose of this analysis, we have calculated that the development will contain a total of 90 underground parking spaces and 107 surface parking spaces - similar to the Site Plan. For the purpose of this analysis, we have assumed that the parking will be included within the townhouse development component, while the stacked townhouse development will be required to pay for additional underground parking - similar to how many condominiums operate. Therefore, we have allocated income to a total of 30 parking spaces. As shown within the revenue analysis, the parking spaces are being acquired for $25,000 per spot. After researching parking space and locker sales within similar condominium developments throughout the immediate and surrounding areas, parking rates range from $25,000 per space to upwards of $35,000+ per space. Consequently, this figure is in-line with the most recent actual sale transactions within the Subject development for individual parking spaces.

In addition to the parking spaces, owners typically opt to purchase upgrades when purchasing units. For the -purpose of this analysis, we have included the following revenue figures - in line with actual sales within the development:

Parking Revenue (30 spaces): $25,000 per parking space

Upgrade Revenue (96 units): $15,625 per unit (similar to what has been sold)

In total, we have allocated $2,250,000 as additional revenue - over and above the end unit residential sales.

It should be noted that since the parking and upgrade revenue figures outlined above are exclusive of HST, we have not deducted any HST from this revenue component in the model.

ll!i CUSHMAN & 111 lllIll! WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 40 133

Revenue Summary

Consequently, based on the development scheme outlined herein, the Subject property development has an estimated total market value "as complete" as follows:

!Building Statistics Total Land Area (Gross Acres) 2.700 Gross Acres Net Developable Acres - *Includes al/ lands required for the residential development Net De1.elopable Land Area - Residential Only 2.700 (storm, streets, etc.)

Stacked Townhouse Component Total No. of Units 60 Total Residential Units Total Gross Floor Area (Approx.) 63,660 Square Feet ofTotal Abo1.e Grade Gross Floor Area % of Saleable Area 100% Saleable Area (Approx.) 63,660 Square Feet of Saleable Gross Floor Area

Estimated Unit Size (A1.erage) 1,061 Square Feet - Dependant on Lot Size

Townhouse Component Total No. of Units 36 Total Residential Units Total Gross Floor Area (Approx.) 71,892 Square Feet ofTotal Abo1.e Grade Gross Floor Area % of Saleable Area 100% Saleable Area (Approx.) 71,892 Square Feet of Saleable Gross Floor Area

Estimated Unit Size (A1.erage) 1,997 Square Feet

Summary of Revenue - Phase I & II No. of Units Avg Unit Size PSF of GFA Total Unit Price Resulting Revenue Stacked Townhouse Sales 60 1,061 $578.53 $613,816.67 $36,829,000 Townhouse Residential Unit Sales 36 1,997 $529.71 $1,057,825 $38,081,700 Parking Re1.enue 30 spaces@ $25,000.00 per space= $750,000 Upgrade Re1.enue 96 units@ $15,625.00 per unit= $1,500,000

Total Potential Re1.enue $77,160,700 Less: HST (Including HST Rebate - $24,000 v.eighted avg. per unit) $7,726,891 jTotal Net Revenue $69,433,809

bi CUSHMAN & Ill lll Ill WAKEFIELD 134 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 41

Expense Analysis

It should be noted that the figures included within the expense analysis completed below are inclusive of HST. HST will be deducted (i.e. backed out) from the necessary expenses at the conclusion of this analysis.

Hard Construction Costs: In order to estimate the construction cost new of the development, we have utilized comparative cost analysis from the Marshall & Swift Costing Manuals and the Altus Cost Guide 2019 - as well as detailed knowledge of similar developments within the GTA. Both the Marshall Valuation Service and the Altus Cost Guide are highly regarded and well recognized cost estimating authorities in the appraisal field. Estimated costs have not been provided by the property owner and have not been compared with the estimated cost estimate from the Marshall Valuation Service and the Altus Cost Guide. Therefore, for the purpose of this analysis, we have not relied on the hard cost estimates provided by the Client - in order to ensure an independent analysis.

According to the Cost Guides, a hard construction cost rate of $125 per square foot and $11.0 per square foot would be considered reasonable for the stacked townhouse and townhouse residential component of the development, respectively. The unit rates assume that a level, open site exists with no restrictions from adjoining properties. It is assumed that stable soil conditions prevail. Based on the anticipated quality of the development, for the purpose of this analysis, we have concluded at the hard construction cost rates above. Based on this figure, the total hard construction cost estimate for the stacked townhouse residential component is $7 ,957 ,500, while the hard construction cost estimate for the townhouse component is $7,908, 120.

Soft Construction Costs: For the purpose of this assignment, the soft cost estimate will be a percentage of the hard cost servicing figure outlined above. The soft costs could include items such as architectural and engineering fees, government registered programs, soil and environmental tests, landscaping costs, development management fees, legal fees, permits, insurance costs and surveys - among other costs. We have concluded at a conservative soft cost rate of 30% of the hard cost figure, or $4,759,686.

Underground Parking Costs: Discussions with the Client indicate that the Subject development will contain underground parking containing 90 spaces and above grade parking containing 107 spaces. Based on discussions with cost consultants and developers, we have estimated that the cost to construct each underground parking stall is $45,000, while the cost to construct each above grade parking stall in $5,000. Therefore, based on the 197 total parking spaces, we have estimated a total parking cost of $4,585,000.

Internal Servicing Costs: Since each unit will require internal servicing costs in order to bring the lands to a "ready to develop" state, we have researched and analyzed the cost to internally service residential developments such as the Subject development. This servicing cost figure takes into account excavation,

• CUSH MAN & 111 Illllai WAKEFIELD 135 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 42

aggregate sub-base, pavement, concrete curb and gutters, 150mm sub drain, concrete sidewalks, storm sewer system, sanitary sewer, water main, lighting traffic signals and landscaping. Discussions with numerous industry professionals and developers familiar with the product type, indicate that a range between $750 and $1,050 per linear front foot is reasonable for the internal servicing costs of the Subject properties. For the purpose of this analysis, we have used a rate of $850 per linear front foot as our internal servicing cost estimate. This equates to an internal servicing cost of approximately $1, 122,000. This figure is generally in line with the Client's projection.

Demolition Estimate: The Subject site is vacant land - thus no demolition cost estimate is required.

Development Charges: Development Charges are charges imposed by the City of Richmond Hill used to fund growth-related capital costs. Development Charges assist in funding the following services: Childcare, Fire Facilities, Shelters and Housing, Police, Emergency Medical Services, Roads, Parks and Recreation, Transit, Urban Development Services, Sanitary Sewers, Development Related Studies, Water, Library, and Storm water Management. The chart below outlines the current City of Richmond Hill Development Charges (as of January 1st, 2019):

Boards of Education Rate Per Unit (effective March 1, 2017) Separate $991 Public $5,416 Total $6,407

Region of York Single/Semi - Multiple Apartments (> 700 Apartments(< 700 (effective Nov 8, 2018) detached Housing square feet plus) square feet(-) and less) Hard Services (payable at $52,818 $42,517 $30,900 $22,575 execution of subdivision agreement) Soft Services $6,302 $5,066 $3,684 $2,671 Total $59,120 $47,583 $34,584 $25,246

Town of Richmond Hill Single/Semi - Multiple Apartments(> 650 Apartments(< 650 (effective July 1, 2018) detached Dwellings square feet plus) square feet(-) and less) $18,430 $14,963 $12,102 $7,081

Richmond Hill Area Specific Development Charges Payable at execution of site plan/ subdivision agreement/ land severance/ building permit issuance. By-law Price per net hectare By-law 53-14 Elgin West Development Area $180,935 By-law 54-14 Headford Storm North of Rouge Development Area $41, 148 By-law 55-14 Urban Fringe (East) Development Area $71,979 By-law 56-14 Oak Ridges-Lake Wilcox (Overall) Development Area $95,899 By-law 57-14 Oak Ridges-Lake Wilcox (Greenfield) Development Area $243,037 By-law 30-16 Bayview North East Development Area $235,551 By-law 32-16 Headrord- Excluding Storm Development Area $159,550 By-law 33-16 North Leslie West Development Area $44,006 By-law 34-16 North Leslie East Development Area $23,385 By-law 35-16 Wes! Gormley Development Area $48,790

Other Charges Payable at Permit Slage Water Meter Charge - 1• $505 Tree Charge $530 Green Bins and Recycling - $61.61 per house $23.59 per apartment (1·2019) January 1, 2019

.. CUSHMAN & Ill Ill 1114 WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 43 136

As shown by the chart above, the development charge that is required to be paid by the developer is $68,953 per multiple residential unit. In total, based on a total of 96 units that require DC payment, approximately $6,619,488 of development charges will be paid.

Consulting & Planning Fees: This component includes items such as submission of planning documents, architect fees, labour required for planning documents, consulting fees for architecture, etc. Since at the "as is" stage, the Subject property has fully submitted site plan documents, renderings, and has received approvals, we have not included any additional costs to consulting and I or planning fees.

Financing: Based on similar developments, we have estimated financing costs at 5.00% of potential net revenue, or approximately $3,471,690.

Sales Commissions: Since the Subject site contains a single asset type (i.e. residential), we have estimated sales commissions at 2.50% of potential revenue, or $1,735,845. Typical residential commission is 2.50% to the purchasing broker.

Marketing Costs: Based on the larger scale of the development and the current market conditions, we would generally estimate marketing costs at 1.50% of potential net revenue. However, since over 94% of the units have sold, we are able to temper the remaining marketing cost budget - or approximately $243,018.

Development & Operation of In order to sell the units, a sales centre will be required. Based on the Sales Centre: number of units, a sales centre would be anticipated to be required for anywhere from 1 to 2 years. However, due to the high number of units that have already sold, a sales centre will not be required for a significant amount of time. Therefore, for the purpose of this analysis, we have estimated the total development and operating cost of the sales centre at 0.25% of potential net revenue, or approximately $173,585.

Developers Profit: Developers profit can range from 5.0% to 20.0% - and is generally based on the scale of the development, the risk associated with the development and the planning status associated with the development. Based on the scale and risk associated with the Subject development in the "raw and non-approved state", a developers profit would typically be towards the high end of the range, or 20.00%. Based on the nature of the development and the demand that would occur if the site were to be placed on the market (due to the high number of previous sales), a developer would take a reduced profit to develop the site. Further, if a builder were to acquire the site, the profit percentage would be less since one party would be completing the entire development. Consequently, we have tempered the developers profit and estimated the figure at 10.00% of the potential net revenue - or approximately $6,943,381.

Contingency: A contingency fee is required to protect from any variations of the above expenses. For the purpose of this analysis, we have included a

lill CUSHMAN & Ill lll 111111• WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 44 137

contingency fee for the development of 5.00% of the total costs, or approximately $1 ,928,797.

Cash In Lieu Payment: In new developments or redevelopments, developers and builders will be required to either set aside a certain amount of land for parkland (parkland dedication) or alternatively pay the City a cash-in-lieu of parkland dedication payment. When the developer pays the fee in lieu of parkland dedication, the fee is called a Parks Levy Fee. These fees are paid prior to the issuance of the first building permit, therefore must be accounted for in order to bring the lands to a ready and developable state. Park Levy Fees are a percentage of the market value of the development lands. For typical development sites, it is anticipated that the developer would not be setting aside a certain amount of land for parkland, therefore a cash-in-lieu of parkland dedication payment would be warranted. Consequently, a cash-in-lieu payment of 5. 00% of the current market value of the lands would be required. The cash-in-lieu payment is due on the day before building permit - essentially at the lands highest value. For the purpose of the model, we have assumed the following Cash-In-Lieu characteristics: The developer will not be setting land aside, therefore is required to pay the 5.00% cash-in-lieu of parkland dedication fee. Based on a land value - the day before building permit - we have estimated the CIL payment at $1,275,000.

Discount for Time A discount for time and risk is allocated based on the current planning stage of the Subject site. Generally, in the "raw state", the income from the sales of the end unit townhouses would be delayed. However, the Subject is fully approved and is considered to have a short term development time frame. Therefore, for the purpose of this analysis, we have not applied a discount for time factor. It should be noted that the risk with this asset is low, buoyed by approved planning, multiple unit sales, scarce supply within the immediate and surrounding area for low rise product, continuing low interest rates (although rising) and stable housing market conditions.

HST As previously outlined, the figures included within the expense analysis completed below are inclusive of HST. Since HST is inclusive, we must deduct the applicable HST from the expenses that warrant a deduction. Therefore, for the purpose of this analysis, HST has been calculated (deducted) on the following items: Hard & Soft construction costs, Internal Servicing Costs, Planning & Consulting Fees, Sales Commissions, Marketing Costs, Development & Operation of Sales Centre, Developers Profit, Contingency and a portion of the Time Adjustment.

It should be noted that the majority of these assumptions are based on typical market rates experienced for similar developments.

CUSHMAN & Ill llll 1111 WAKEFIELD 138 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 45

Further, as previously mentioned, it is noted that the Land Residual Approach to Value is highly sensitive to changes in inputs (i.e. end unit sale price, construction costs, etc.). While this sensitivity is acknowledged, the resulting market value estimate appears to be reasonable based on direct comparable land sale data for similar residential development properties within the immediate and surrounding areas.

The model below outlines the market value estimate for the Subject property "as is" - via the Land Residual Model:

!Building Statistics Total Land Area (Gross Acres) 2.700 Gross Acres Net Developab/e Acres - *Includes all lands required for the residential development Net De>.elopable Land Area - Residential Only 2.700 (storm, streets, etc.)

Stacked Townhouse Component Total No. of Units 60 Total Residential Units Total Gross Floor Area (Approx.) 63,660 Square Feet of Total Abo>.e Grade Gross Floor Area % of Saleable Area 100% Saleable Area (Approx.) 63,660 Square Feet of Saleable Gross Floor Area

Estimated Unit Size {A>.erage) 1,061 Square Feet - Dependant on Lot Size

Townhouse Component Total No. of Units 36 Total Residential Units Total Gross Floor Area (Approx.) 71,892 Square Feet of Total Abo>.e Grade Gross Floor Area % of Saleable Area 100% Saleable Area (Approx.) 71,892 .Square Feet of Saleable Gross Floor Area

Estimated Unit Size {A>.erage) 1,997 Square Feet

Summary of Revenue - Phase I & II No. of Units Avg Unit Size PSF ofGFA Total Unit Price Resulting Revenue Stacked Townhouse Sales 60 1,061 $578.53 $613,817 $36, 829, 000 Townhouse Residential Unit Sales 36 1,997 $529.71 $1,057,825 $38,081,700 Parking Re1.enue 30 spaces@ $25,000.00 per space= $750,000 Upgrade Re>.enue 96 units@ $15,625.00 per unit= $1 500,000

Total Potential Re1.enue $77, 160,700

Less: HST (Including HST Rebate - $24,000 v.eighted avg. per unit) $7 726 891 Total Net Revenue $69,433,809

!Estimated Expenses/ Cost of Development Hard Construction Cost Estimates Stacked Townhouse: Hard Construction Costs -Abo>.e Grade GFA- $125 psf $7,957,500 Townhouse Dwelling: Hard Construction Costs -Abo>.e Grade GFA - $110 psf $7,908, 120 Parking Costs - 90 Underground Parking Space & 107 Surface Parking Spaces $4,585,000

Soft Construction Cost Estimates Soft Construction Costs - 30. 00% of Hard Costs $4 759.686

Total Hard & Soft Construction Costs $25,210,306

Internal Servicing Costs 1,320 total LFF@ $850.00 per LFF $1, 122,000

Development Charge Cost Estimates De>.elopment Charges @ $68953 per unit - Stacked Townhouse Dwellings $4,137,180 De>.elopment Charges @ $68953 per unit - Townhouse $2,482,308 Total Development Charges $6,619,488

b CUSHMAN & Ill lll 1111111 WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 46 139

Additional Cost Estimates Planning & Consulting Fees 0.00% of Potential Net Re-.enue - Fully Appro-.ed $0 Financing 5.00% of Potential Net Re-.enue $3,471,690 Sales Commissions 2.50% of Potential Net Re-.enue $1,735,845 Marketing Costs 0.35% of Potential Net Re-.enue $243,018 De-.elopment & Operating Costs of Sales Centre 0.25% of Potential Net Re-.enue $173,585 Total Remaining Costs $5,624, 139

Less: De-.elopers Profit 10.00% of Potential Net Re-.enue $6,943,381 Less: Contingency 5.00% of Estimated Costs $1,928,797 Less: Estimated Cash In Lieu Payment 5.00% of Resulting Land Value (1.ia Ready to Build Land) $1 275 000 Less: Discount for Time to De-.elop Discount Rate: 5.00% per annum No. of Years: 0 years Resulting Discount for Time: Total Developers Profit, Contingency Measure, Cash In Lieu Payment & Discount for Time $10, 147, 178

Total Project Costs (Including Profit & Discount for Time) $48, 723, 110 Less: HST' on Applicable Items (i.e. Construction Costs, Servicing Costs, Additional Costs, Developers Profit, etc.) $4 856 401 Total Project Costs (Net of HST) $43,866, 709

Resulting Market Value Estimate - Modern Manors Development $25,567,000

Resultant Rate Per Net Developable Acre of Land Area (Rounded) $9,469,000

Resulting Rate Per Buildable Unit (Weighted Average) $266,323

1 HST has been calculated on the following items: Hard & Soft construcb'on costs, lntemal Servicing Costs, Planning & Consulting Fees, Sales Commissions, Marketing Costs, Development & Operation ofSales Centre, Developers Profit, Contingency and a portion of the Time Adjustment.

$25,567,000

TWENTY FIVE MILLION FIVE HUNDRED AND SIXTY-SEVEN THOUSAND DOLLARS

($9,469,000 PER ACRE OF LAND)

Dt CUSHMAN & Ill lll llli.i WAKEFIELD 140 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 47

Direct Comparison Approach

The Direct Comparison Approach is a valuation method whereby the property being appraised is compared with similar properties that have recently been sold or offered for sale. The assumption is that if the Subject had been exposed to the market, it would have been in competition with the comparable property, dealing with the same type of purchaser under similar market conditions. Since no two properties are completely alike, adjustments must be made to compensate for differences between the comparable and the Subject property. In arriving at a value conclusion by this method, the greatest weight is given to the sales of truly comparable properties sold at or nearest the effective date of appraisal in order to reflect comparable economic (and market) conditions.

The transactions included within the Direct Comparison analysis are considered to be arm's length and verified to the best of our ability. Further, for all transactions - the property rights conveyed are considered to be fee simple and the conditions of sale are normal.

Since the Highest and Best Use of the Subject property "as if vacant" is for a future residential development use - containing a total of approximately 96 units (both stacked townhouses and townhouse units) - similar to what is outlined within the development plans outlined herein, we have analyzed sales purchased for similar residential development uses within the immediate and surrounding areas.

As previously outlined, with the changing development climate in the City, the impact of the new post-OMB system is difficult to predict - since the application process has changed while regulations have predominately remained the same. Under Bill 139, a greater amount of upfront preparation time, public and private consultation, paperwork and cost will be incurred by developers. Consequently, a great deal more strategy, time, consulting, analysis and studies (including environmental studies) will be needed at the pre-submission level. This means more paperwork and cost to submit a clear and concise report. The resulting impact is that properties that have received OMB I LPAT approvals are realizing higher$ I Sq.Ft. of buildable GFA I$ I acre of land rates - predominately due to the significantly lower risk, time and speculation involved with the development. Consequently, based on the fully approved nature of the Subject site, we anticipate receiving market values at the high end of the market value range.

In order to determine an appropriate Resale Date. Sale Date· Less: Address Property Type After Resale Price Prior to Sale Price Adjustment for Price Difference •,!Increase adjustment for Approvals Approvals Time the risk and 215 Lakeshore Boulevard E, High Density 1:>-0ct-16 $166,050,000 11-Jul-14 $60,000,000 $28,020,938 $78,029,063 46.99% uncertainty when Toronto Resklential 2200 Islington Avenue, dealing with a Comrercial Uses 15-Jul-16 $91,500,000 31-May-11 $18,375,000 $35,456,250 $37,668,750 41.17% Toronto non-approved 25 Brownrklge Road, Hatton lldustrial Uses 10-Feb-16 $1,463,125 17-Dec-14 $1,000,000 $85,349 $377,776 25.82% site, we have fills looked to the 45 Connaught Avenue, Mad um Densiy 15-Apr-15 $2,225,000 25-Jan-13 $1,550,000 $375,469 $299,531 13.46% marketplace to Toronto Resklential High Density find examples of 8'1e Jays Way, Toronto 15-Sep.14 $113,000,000 2-Nov-11 $78,800,017 $24,012,500 $10,187,483 9.02% Resklential properties that 14 Chinguacousy Rd, High Density 14-Mar-13 $2,900,000 17-Jun-11 $2,250,000 $380,625 $269,375 9.29% have traded Brarrpton Resklential and before after Minimum: $269,376 9.02% approvals had Maximum: $78,029,063 46.99% been received. Average: $21,138,663 24.29% Sales of fully approved sites rarely trade as the developer generally carries on and builds the development once the project has received approvals. The chart outlines a variety of paired sales that have been researched:

• CUSHMAN& Ill Ill llJI• WAKEFIELD 141 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 48

As shown within the chart above, the paired sales of properties (taking into account an adjustment for time) that have sold pre and post development approvals range from an increase of 10.0% to 45.0%, with an average increase of approximately 25.0%. Clearly, receiving approval for a future development significantly decreases the risk associated with the project and the time frame until development.

As an additional measure, we have also analyzed the 01-2018 GTA High Rise Land Insights Report provided by Bullpen Research & Consulting and Batory Management. The report states: "Approved projects traded for about 28% more than sites where rezoning had been submitted, and 35% more than lands without an active development application". Refer to the chart below:

Figure 6: Estimated Price Per-Buildable-SF by Planning Status, GTA High Density Land Transaction, City of Toronto, Ql-2018 Planning Status / Municipality Apph.JlH)ll S240 Sl87 s220 26.201 $41,187,500 S200 20% $146 S1BO $139 18,833 19,415 $21,927,375 $160 $17.977,500 14% ..."' 16% .....~ $140 .~ $120 5. g. SlOO <( $80

$60

$40

$20 so Toronto Toronto Toronto

Therefore, for the purpose of this analysis, an adjustment for the non-approved transaction anywhere from 20.0% and 35.0% - similar to the figures outlined above - would appear reasonable and supportable in order to take into account the time frame and risk associated with the potential development.

For this approach the sales have been analyzed on the basis of the indicated price per acre of land area. Consideration has also been given to the location of the real estate, the type and scale of the development and the planning policy in place at the time of the sale.

A summary of the relevant sales we have researched is presented in the tables and sales analysis on the following pages:

bii CUSHMAN & Ill lll 111111 WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 49 142

Total $1 Acre of Land Use $/Acre of Index Total Site Size Time Planning Property Address Date of Sale Purchaser Consideration Land (Non· Policy Land Current Use I Proposed Use No. (Acres) Adjustment Status ($) Adjusted) Adjustment (Adjusted)

9560 Islington Avenue, Development Sales Office (Vacant Land) I Medium MD1 5/24/2019 The Kingsmen Group $16,000,000 1.775 $9,014,085 0.20% 10% $9,933,521 Vaughan ON Submissions Density Residential Development Lands

1335 Bgin Miis Road East, Development Vacant Land I Medium Density Residential MD2 5/1/2019 Stateview Homes $9,600,000 1.195 $8,033,473 0.60% 10% $8,885,021 Richmond Hill ON Submissions Development Lands

No 11 Harris Avenue, Richmond Single Family Home I Medium Density MD3 11/6/2018 Inspired Estate Inc. $5,450,000 0.807 $6,753,408 4.20% Development 35% $9,400,743 Hil!ON Residential Development Lands Submission

146 Old Kennedy Road, Development Retail Building I Medium Density Residential MD4 2/27/2018 2604967 Ontario Inc. $25,000,000 3.856 $6,483,402 9.50% 10% $7,747,666 Markham ON Submissions Development Lands

Minimum: 0.807 $6,483,402 0.20% 10% $7,747,666

Maximum: 3.856 $9,014,085 9.50% 35% $9,933,521

Average: 1.908 $7,571,092 3.63% 16% $8,991,738

111 CUSHMAN & Ill 111... WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON VALUATION PROCESS 50 143

Comparable Sales Map

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ill CUSHMAN & Ill lllI~WAKEFIELD MODERN MANORS DEVELOPMENT, RICHMOND HILL ON FINAL VALUE ESTIMATE 51 144

Comparable Sales Analysis

For the purpose of this analysis, we have Range $I Acre -NON $I Acre -ADJ analyzed four (4) Low $6,483,402 $7,747,666 comparable High $9,014,085 $9,933,521 transactions located within the A\erage $7,571,092 $8,991,738 surrounding area and acquired for a variety of future medium density residential development uses - including stacked townhouse and townhouse uses. Prior to any time or site adjustments, the transactions range in price from approximately $6,500,000 per acre of land to over $9,000,000 per acre, with an average rate of approximately $7,600,000 per acre of land. Since all of the transactions had not yet received planning I development approvals, adjustments were required for both time and this land use I development characteristic. After the appropriate time and land use policy characteristic adjustments, the transactions range in price from approximately $7,750,000 per acre of land to over $9,900,000 per acre, with an average rate of approximately $9,000,000 per acre of land. Refer to Market Survey Results above.

When analyzing the comparable sales for the Subject lands, we have focused our search on comparable future residential development properties situated within similar, built-up urban areas of the Regional Municipality of York - including Richmond Hill, Vaughan and Markham. The Subject property area is considered to be situated within a good, heavily trafficked area. This is due to the good location and access to numerous amenities and the public transit system within the City of Richmond Hill. The sales researched were acquired for medium density residential development uses - with the majority of the transactions having at least submitted planning documents pertaining to the future development of the site. As mentioned earlier, with the changing development climate in the City, the impact of the new post-OMB system is difficult to predict - since the application process has changed while regulations have predominately remained the same. Therefore, properties that have received OMB I LPAT approvals are realizing higher$ I Sq.Ft. of buildable GFA rates - predominately due to the lower risk, time and speculation involved with the development.

The sales researched range in dates from February 2018 to May 2019 - a good characteristic from a time perspective. We have not researched sales previous to 2018, primarily due to the difference in market conditions.

When analyzing residential development sites, it is evident that location plays a significant role in property value. Properties situated within downtown, urban areas, will logically command significantly greater values when compared to sites located outside of the prime development areas - primarily since the prime areas will command significantly greater end unit sale prices and usually situated within close proximity to transit uses. The Subject property is situated within the urban boundary area of Richmond Hill - an excellent locational characteristic. Further, the site is located within close proximity to public transit uses - also an excellent feature for development. When we look at the locational characteristics of the properties, the majority of the sites are considered to be similar.

The comparables - once adjusted - are considered to be able to provide a reasonable perspective of value for a $ I acre of land for the Subject property lands - for both stacked townhouse and townhouse development lands.

Consequently, after adjustments, and based on the location, scale and the fully approved planning and development stage, a$ I acre within the range of approximately $9,000,000 and $10,000,000 appears reasonable for the Subject site.

This market value estimate is in-line with, and comparable to, the conclusion that was previously concluded at via the Land Residual Approach to Value. Therefore, the Land Residual Model conclusion is considered reasonable and supportable.

lliri CUSHMAN & Ill lll Ila WAKEFIELD 145 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON FINAL VALUE ESTIMATE 52

FINAL VALUE ESTIMATE

As a result of this analysis, we have formed an opinion that the "as is" market value of the 2.700 acre Subject property, located on the south side of Jefferson Side Road, just west of Yonge Street, Richmond Hill ON, subject to the assumptions, limiting conditions, certifications and definitions, as of June 1st, 2019, is estimated as follows (based on a nine month to twelve month exposure period):

Highest and Best Use of Subject Property : Future Residential De1.elopment Lands

Total Land Area (Net De1.elopable Acres): 2.700 net de1.elopable acres

Total No. of De1.elopable Units : 96 total units

Total Buildable Square Feet : 135,552 total units

Initial Valuation Methodology - Land Residual Approach

Re1.enue Estimate - Based on Actual Sales : $69,433,809

Construction Cost & Expense Estimate : $43.866.709

Resulting "As Is" Land Value via Land Residual Approach $25,567,000

Secondary Valuation Methodology - Direct Comparison Approach Reasonable & In-Line w/ Market Transactions

Market Value Summary for Subject Properly I As Is

Final Market Value Estimate for Modern Manors Development Lands: $25,567,000

Resulting $ / Net Acre of Land Area: $9,469,000

Extraordinary Assumptions & Hypothetical Conditions

Development, Cost & Approved Assumption: For the purpose of this report, we have relied upon the Concept development plan, and resulting development statistics, that have been provided by the Client. Based on the land use policy and the surrounding development uses, this development scheme appears reasonable. Further, it has been assumed that the proposed improvements will be developed as outlined in this report and that the Subject will be built using high quality workmanship and materials. If the design or quality differs from that which has been considered herein, the value conclusions could be impacted accordingly. Any undue delay in the construction time line could also materially impact the value conclusion reported herein. Lastly, for the purpose of this analysis, and based on the most recent planning discussions, we have assumed that the Subject property has received all land use I development approvals for the development outlined herein.

CUSHMAN & Ill llll l!il WAKEFIELD 146 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON ADDENDA CONTENTS 53

ADDENDA CONTENTS

Addendum A: Assumptions And Limiting Conditions

Addendum B: Certification Of Appraisal

Addendum C: Glossary Of Terms And Definitions

• CUSHMAN & Ill Ill 1111 WAKEFIELD 147 148 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON ASSUMPTIONS AND LIMITING CONDITIONS 54

ASSUMPTIONS AND LIMITING CONDITIONS

"Report" means the appraisal or consulting report and conclusions stated therein, to which these Assumptions and Limiting Conditions are annexed.

"Subject Property" means the 2.700 acre property located on the south side of Jefferson Side Road, just west of Yonge Street, Richmond Hill ON.

"C&W' means Cushman & Wakefield ULC or its subsidiary that issued the Report.

"Appraiser(s)" means the employee(s) of C&W who prepared and signed the Report.

The Report has been made subject to the following assumptions and limiting conditions:

• This report has been prepared at the request Ideal Developments Inc., for the purpose of estimating the fee simple market value for the 2. 700 acre future residential development site, located on the south side of Jefferson Side Road, just west of Yonge Street, Richmond Hill ON. It is our understanding that the report has been prepared for a financing use. It is not reasonable for any person other than Ideal Developments Inc. to rely upon this appraisal without first obtaining written authorization from the client and the author of this report. This report has been prepared on the assumption that no other person will rely on it for any other purpose and all liability to all such persons is denied.

• This report has been prepared at the request of Ideal Developments Inc. and for the exclusive (and confidential) use of the Subject as named herein for the specific purpose and function as stated herein. All copyright is reserved to the author and this report is considered confidential by the author and the client. Possession of this report, or a copy thereof, does not carry with it the right to reproduction or publication in any manner, in whole or in part, nor may it be disclosed, quoted from or referred to in any manner, in whole or in part, without the prior written consent and approval of the author as to the purpose, form and content of any such disclosure, quotation or reference.

• The estimated current market value of the real property which is appraised in this report pertains to the value of the fee simple estate in the real estate as vacant and available for development "as of right''. The property rights appraised herein exclude mineral rights, if any.

• The property has been valued on the basis that title to the real property herein appraised is good and marketable.

CUSHMAN & Iii llll 1111 WAKEFIELD 149 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON ASSUMPTIONS AND LIMITING CONDITIONS 55

conditions, environmental, engineering or other technical matters which might render this property more or less valuable than as stated herein. If it came to our attention as the result of our investigation and analysis that certain problems may exist, a cautionary note has been entered in the body of the report.

• The legal description of the property and the area of the site were obtained from the Municipal Property Assessment Corporation (MPAC). Further, the plans and sketches contained in this report are included solely to aid the Subject in visualizing the location of the property, the configuration and boundaries of the site and the relative position of the improvements on the said lands.

• The property has been valued on the basis that the real estate complies in all material respects with any restrictive covenants affecting the site and has been built and is occupied and being operated, in all material respects, in full compliance with all requirements of law, including all zoning, land use classification, building, planning, fire and health by-laws, rules, regulations, orders and codes of all federal, provincial, regional and municipal governmental authorities having jurisdiction with respect thereto. (It is recognized there may be work orders or other notices of violation of law outstanding with respect to the real estate and that there may be certain requirements of law preventing occupancy of the real estate as described in this report. However, such possible circumstances have not been accounted for in the appraisal process.).

• Investigations have been undertaken in respect of matters which regulate the use of land. However, no inquiries have been placed with the fire department, the building inspector, the health department or any other government regulatory agency, unless such investigations are expressly represented to have been made in this report. The subject property must comply with such regulations and, if it does not comply, its non compliance may affect the current market value of this property. To be certain of such compliance, further investigations may be necessary.

• Should title to the real property presently be held (or changed to a holding) by a partnership, in a joint venture, through a co-tenancy arrangement or by any other form of divisional ownership, the value of any fractional interest associated therewith may be more or less than the percentage of ownership appearing in the contractual agreement pertaining to the structure of such divisional ownership.

k! CUSHMAN & Iii lll 111-. WAKEFIELD 150 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON ASSUMPTIONS AND LIMITING CONDITIONS 56

investment privileges, particular occupancy and income guarantees, special financing or extraordinary agreements for management services.

• Because market conditions, including economic, social and political factors, change rapidly and, on occasion, without notice or warning, the estimate of current market value expressed herein, as of the effective date of this appraisal, cannot necessarily be relied upon as any other date without subsequent advice of the author of this report.

• The value expressed herein is in Canadian Dollars.

• This report is only valid if it bears the original signatures of the authors.

~ CUSHMAN & Ill Ill 111'18 WAKEFIELD 151 152 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON CERTIFICATION 57

CERTIFICATION

We hereby certify that:

• The statements of fact contained in this report are true and correct.

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

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

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

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

• The reported analyses, opinions and conclusions were developed independently and with no influence on the appraiser on the part of the owner or lender.

• The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute of Canada, which include the Canadian Uniform Standards of Professional Appraisal Practice and Standards of Professional Practice of the Appraisal Institute of Canada.

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

• Michael Kaukonen, AACI, P.App., made an inspection of the property that is the subject of this report on June 1st, 2019.

• The value estimate contained in this report applies as of June 1st, 2019. This date may be referred to as the effective date of valuation.

• The Appraisal Institute of Canada has a mandatory Continuing Professional Development Program for designated members. As of the date of this report, I, Michael Kaukonen, AACI, P.App., have fulfilled the requirements of the program.

ll!i CUSHMAN & Ill llllb WAKEFIELD 153 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON CERTIFICATION 58

As a result of this analysis, we have formed an opinion that the "as is" market value of the 2.700 acre Subject property, located on the south side of Jefferson Side Road, just west of Yonge Street, Richmond Hill ON, subject to the assumptions, limiting conditions, certifications and definitions, as of June 151 , 2019, is estimated as follows (based on a nine month to twelve month exposure period):

Highest and Best Use of Subject Property : Future Residential De1.elopment Lands

Total Land Area (Net De1.elopable Acres) : 2.700 net de1.elopable acres Total No. of De1.elopable Units : 96 total units Total Buildable Square Feet : 135,552 total units

Initial Valuation Methodology - Land Residual Approach

Re1.enue Estimate - Based on Actual Sales : $69,433,809 Construction Cost & Expense Estimate : $43,866, 709

Resulting "As ls" Land Value via Land Residual Approach $25,567,000

Secondary Valuation Methodology - Direct Comparison Approach Reasonable & In-Line w/ Market Transactions

Market Value Summary for Subject Property I As Is

Final Market Value Estimate for Modern Manors Development Lands: $25,567,000

Resulting $ / Net Acre of Land Area: $9,469,000

Extraordinary Assumptions & Hypothetical Conditions

Development, Cost & Approved Assumption: For the purpose of this report, we have relied upon the Concept development plan, and resulting development statistics, that have been provided by the Client. Based on the land use policy and the surrounding development uses, this development scheme appears reasonable. Further, it has been assumed that the proposed improvements will be developed as outlined in this report and that the Subject will be built using high quality workmanship and materials. If the design or quality differs from that which has been considered herein, the value conclusions could be impacted accordingly. Any undue delay in the construction time line could also materially impact the value conclusion reported herein. Lastly, for the purpose of this analysis, and based on the most recent planning discussions, we have assumed that the Subject property has received all land use I development approvals for the development outlined herein.

If in fact the Subject property does not receive full land use I development approvals for the development scheme outlined within the report, or the costs to bring the site to a fully ready and developable state require adjustment, we reseNe the right to amend our market value estimate accordingly.

Prepared By:

Michael Kaukonen, MCI, P.App. Senior Vice President IValuation & Advisory Michael. [email protected] Phone (Office): 416-359-2662

lii CUSHMAN & Ill lll 1111! WAKEFIELD 154 155 MODERN MANORS DEVELOPMENT, RICHMOND HILL ON GLOSSARY OF TERMS AND DEFINITIONS 59

GLOSSARY OF TERMS AND DEFINITIONS

Definitions of Value, Interest Appraised and Other Terms

Market Value

The Canadian Uniform Standards of Professional Appraisal Practice (The Standards) adopted by the Appraisal Institute of Canada define Market Value as:

Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised and acting in their own best interests;

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

4. Payment is made in cash in Canadian 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.

Fee Simple Interest

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.

Exposure Time

Exposure time is always presumed to precede the effective date of the appraisal. It may be defined as:

''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. It is a retrospective estimate based upon an analysis of past events assuming a competitive and open market."

• CUSHMAN & Ill Ill 11111111 WAKEFIELD 156

This is Exhibit "C" refel1'ed to in the Affidavit of Shajiraj Nadarajalingam,

sworn this 10th day of July, 2019.

Judy Hamilton 157

Urban Planners • Project Managers

June 6, 2019

Ideal Developments Inc. 1100 Rodick Road Markham, Ontario L3R 8C3

To: Mr. Manoj Kumar Chourey

Dear Mr. Chourey,

Re: Ideal (JS} Developments Inc. 39-67 Jefferson Sideroad City of Richmond Hill

Background

On April 11, 2014 applications for a Zoning By-law Amendment and for Site Plan Control Approval (Applications D02-14011 and D06-14029}, were submitted to the City of Richmond Hill. Concurrent to the processing of the zoning amendment application, applications for draft plan of subdivision, draft plan of condominium (common element} and draft plan of condominium (standard} (D03-15008, D05- 15010 and D05-15011} were also processed by the City of Richmond Hill.

The proposed site plan for this development contemplates the development ofthe land with a total of ninety-six freehold and standard condominium-based townhouse units, consisting of:

-twelve rear lane accessed street townhouse units fronting onto Jefferson Sideroad, -twelve back to back townhouse units, -twelve traditional townhouse units, -sixty stacked townhouse units, -107 surface parking spaces and 90 below grade, provided in one level of underground parking.

The applications for Zoning By-law Amendment, Draft Plan of Subdivision and Site Plan Approval were appealed to the Ontario Municipal Board on June 15, 2016, for reasons based on delay.

An Ontario Municipal Board (OMB} Hearing was held on May 4, 2017, at which the Board issued an oral decision approving the draft plan of subdivision, delegated the clearance of the associated conditions of approval to the City of Richmond Hill, and allowed the appeal of the zoning in principle. Per typical procedure, the Board withheld its approval pending final approval of the site plan.

8481 Keele Street, Unit 12, Vaughan, Ontario L4K 1Z7 Tel: (905) 669-6992 • Fax: (905) 669-8992 www.evansplanning.ca 158 2

The Site Plan was presented at a subsequent OMB hearing on September 8, 2017, wherein the Board ordered the Zoning By-law in effect and approved the site plan and associated drawings.

Since the original filing of the applications, several site plan submissions have been made to the City's Planning Department, with most design matters being deemed acceptable by the City. To this end, a draft of the implementing site plan agreement has been released by City Staff. To address specific site design conditions, minor grading adjustments are being made. To ensure consistency, it will be necessary to coordinate these revisions with all other development plans. To date, all plans have been coordinated and have been submitted to the City on April 30, 2019 for final confirmation and approval. Subsequent to said approval, City Staff will update the site plan agreement to reflect the revised plans and release it to Ideal JS for execution. To date, we are awaiting sign off from Development Engineering, Building and Zoning. It is expected that the final site plan agreement will be released for execution within two-three weeks.

It is the City's practice to require the Plan of Subdivision receive final approval prior to the execution of the site plan control agreement by the City. Accordingly, the draft Plan of Subdivision has been recently registered as Plan 65M-4637. A building permit application can be made to the Town upon execution of the site plan agreement by Ideal JS and the provision of the required securities.

I trust that this summary is satisfactory for your purposes. Should you have any questions regarding this matter, please contact the undersigned.

Yours truly,

Nicole Sampogna

Page 2 159

This is Exhibit "D" refened to in the Affidavit of Shajiraj Nadarajalingam,

sworn this 10th day of July, 2019.

· ioner for Taking Affidavits, etc.

Judy Hamilton 160

DOS-14029

Standard Agreement

This Agreement dated this 121h day of July, 2019.

BETWEEN:

IDEAL (JS) DEVELOPMENTS INC.

(hereinafter called the "Owner")

OF THE FIRST PART

- and -

THE CORPORATION OF THE CITY OF RICHMOND HILL

(hereinafter called the "City")

OF THE SECOND PART

Whereas the Owner owns the lands shown on Drawing "A" and proposes to develop those lands described in Paragraph 1 hereto;

And Whereas the City requires that the Owner enter into this Agreement pursuant to a by-law enacted under Section 41 of the Planning Act, R.S.O. 1990, Chapter P.13;

Now Therefore in consideration of the premises, the Owner and the City hereby covenant and agree as follows:

1. The lands affected by this Agreement are in the City of Richmond Hill, in the Regional Municipality of York, being:

Firstly:

Block 1, 65M-4637 [PIN No. 03208-3229(L T)]

Secondly:

Part of Lots Band C, Plan 1916, designated as Part 3, Plan 65R-37587 [PIN No. 03208-3230(L T)]

(hereinafter referred to as "Subject Lands").

2. Following execution of this Agreement by the City, the Owner shall at its expense complete all the services and works, including, without limiting the generality of the foregoing, grading, drainage, asphalt paving, concrete curbs, lighting, sodding and landscaping, required in this Agreement, all as shown on the following plans and drawings which shall form part of this Agreement and which are more particularly described hereto (the original full sized plans are available for viewing at the City of Richmond Hill's municipal office in the Office of the City Clerk) in a manner satisfactory to the Commissioner of Planning and Regulatory Services or its successor (hereinafter referred to as the "Commissioner") in accordance with the City's standards and design specifications and shall properly maintain all such services and works at all times:

Drawing "A" Site Plan (Drawing SP1, prepared by RN Design, Revision 21, dated March 22, 2019)

Drawing "B'' Block A (Drawing A3, prepared by RN Design, Revision 9, dated March 22, 2019)

Drawing "C" Block B (Drawing A6, prepared by RN Design, Revision 9, dated March 22, 2019) 006-14029 Page 2 161

Drawing "D" Back to Back Block C (Drawing AS, prepared by RN Design, Revision 6, dated March 22, 2019)

Drawing "E" Back to Back Block D (Drawing A10, prepared by RN Design, Revision 5, dated March 22, 2019)

Drawing "F" Block E (Drawing A13, prepared by RN Design, Revision 9, dated March 22, 2019) ·

Drawing "G" Block F (Drawing A16, prepared by RN Design, Revision 9, dated March 22, 2019)

Drawing "H" Block G (Drawing A20, prepared by RN Design, Revision 1, dated March 22, 2019)

Drawing "I" Block H (Drawing A24, prepared by RN Design, Revision 1, dated March 22, 2019)

Drawing "J" Block I (Drawing A28, prepared by RN Design, Revision 1, dated March 22, 2019)

Drawing "K" Underground Parking Plan (Drawing P100, prepared by SRN Architects Inc., Revision 3, dated March 8, 2018)

Drawing "L" Underground Parking Plan, Part A (Drawing 101, prepared by SRN Architects Inc., Revision 3, dated March 8, 2018)

Drawing "M" Underground Parking Plan, Part B (Drawing 102, prepared by SRN Architects Inc., Revision 3, dated March 8, 2018)

Drawing "N" Site Grading Plan (Drawing GR-1, prepared by Masongsong Associates Engineering Limited, Revision 12, dated March 18, 2019)

Drawing "O" Site Servicing Plan (Drawing SS-1, prepared by Masongsong Associates Engineering Limited, Revision 12, dated March 18, 2019)

Drawing "P" Cross Section Plan (Drawing CS-1, prepared by Masongsong Associates Engineering Limited, Revision 12, dated March 18, 2019)

Drawing "Q" Cross Section Plan (Drawing CS-2, prepared by Masongsong Associates Engineering Limited, Revision 12, dated March 18, 2019)

Drawing "R" General Notes Plan (Drawing GN-1, prepared by Masongsong Associates Engineering Limited, Revision 12, dated March 18, 2019)

Drawing "S" Erosion and Silt Plan (Drawing ES-1, prepared by Masongsong Associates Engineering Limited, Revision 11, dated March 18, 2019)

Drawing "T" Photometric Data (Drawing 14-103-PM1, prepared by DaTom Group Ltd., Revision 14, dated April 4, 2019)

Drawing "U" Standards (Drawing 14-103-ST1, prepared by DaTom Group Ltd., Revision 14, dated April 4, 2019)

Drawing "V" Hydro Distribution (Drawing 14-103-DH1, prepared by DaTom Group Ltd., Revision 14, dated April 4, 2019)

Drawing "W'' Schematic (Drawing 14-103-SC1, prepared by DaTom Group Ltd., Revision 14, dated April 4, 2019) D06-14029 Page 3 162

Drawing "X" Private Servicing (Drawing 14-103-PS1, prepared by DaTom Group Ltd., Revision 14, dated April 4, 2019)

Drawing "Y" Landscape Plan (Drawing L.1, prepared by Stantec, Revision 14, dated April 22, 2019)

Drawing "Z" Details (Drawing L.2, prepared by Stantec, Revision 4, dated April 22, 2019)

Drawing "AA" Tree Inventory and Preservation Plan, Figure 1, prepared by Beacon Environmental, dated July 2018

3. The City shall not issue a Building Permit unless the application therefor complies in all respects with the requirements of this Agreement and is approved by all relevant authorities.

4. The following Schedule attached hereto shall form part of this Agreement:

Schedule "A" Fees

5. Upon execution of this Agreement, the Owner shall file a Letter of Credit or Letters of Credit in a form satisfactory to the City in the total amount of FIVE HUNDRED AND SIXTY-EIGHT THOUSAND AND TWO HUNDRED AND TWO DOLLARS ($568,202.00) in order to ensure the proper completion of all the services and works referred to in Paragraph 2, including landscaping and sodding. The landscaping and sodding shall be deemed not to have been completed until the expiration of one (1) year after planting.

6. The Letter(s) of Credit referred to in Paragraph 5 hereto shall be kept in full force until replaced or reduced, and if it is obvious to the City that the Owner will not be able to complete the work prior to the expiry of a Letter(s) of Credit, the City may draw all or any part of the funds so secured and hold those monies as security to guarantee completion unless it is provided with a renewal of the Letter(s) of Credit forthwith.

7. In the event the Owner fails to install the aforesaid works, including landscaping, as required, or having commenced to install the said works fails to proceed with reasonable speed, or in the event the works are not being installed in the manner required by the City, upon the City giving seven (7) days written notice by prepaid registered mail to the Owner, the City may draw upon all or any part of the appropriate Letter(s) of Credit for its estimate of the cost of the works in question and may without further notice enter upon the Subject Lands and proceed to supply all materials and to do all necessary work, including the repair or reconstruction of faulty work and the replacement of materials not in accordance with the City's specifications, and to charge the cost thereof together with an engineering fee in accordance with the current A.P.E.O. Tariff to the Owner. If the Letter(s) of Credit is/are not sufficient to cover such cost, the City may recover same by action or in like manner as municipal taxes as a charge upon the Subject Lands. It is understood between the parties hereto that such entry upon the Subject Lands shall be as agent for the Owner and shall not be deemed for any purpose whatsoever as an acceptance or assumption of the works by the City. The Owner hereby grants to the City a right to enter upon the Subject Lands for the purposes of this paragraph. In the event that a claim is made against the City under the Construction Lien Act in respect of any of the works required to be performed pursuant to this Agreement, in addition to any other remedy the City may have, upon the Commissioner giving forty-eight (48) hours written notice by prepaid registered mail to the Owner, the City may, without further notice, draw upon the Letter(s) of Credit referred to in Paragraph 5 hereto for the amount of the claim plus security for costs as provided for in Section 44 of the Construction Lien Act.

8. Notwithstanding anything herein to the contrary, where in this Agreement the City is obliged or required to give notice to the Owner or any other party before undertaking any action which it is entitled to take hereunder and where the "°P~J!OlutH i 11 ~;,;-----.. 006-14029 Page 4 163

Commissioner deems, in his absolute discretion, that an emergency situation exists, the time for giving such notice shall be abridged and the City shall be entitled to take such action forthwith upon the giving of the notice.

9. All the works required to be done by the Owner shall be constructed in a good and workmanlike manner in accordance with specifications of the City. Any contract made for the works on the Subject Lands or on public property shall provide that the Commissioner or his representative may personally inspect the installation of the said works and shall have the power to stop any work in the event that in his opinion the works are being performed in a manner which is not satisfactory to the City. The Owner, at its expense shall repair any damage to streets, curbs, boulevards or other public works, where damage has resulted from works on the site. The Owner shall also be responsible for removing dirt or debris from public streets where same is a result of works on the site.

10. Upon execution of this Agreement, the Owner shall pay to the City those amounts set out in Schedule "A" under the heading "Payments".

11. The Owner acknowledges that it shall be required to pay Development Charges imposed by one or more by-laws enacted by the City and the Regional Municipality of York and shall be required to pay educational Development Charges imposed by one or more by-laws enacted by the York Region District School Board and/or the York Catholic District School Board; such Development Charges and such education Development Charges shall be paid prior to the issuance of a Building Permit. The amount of such Development Charges and such education Development Charges shall be in accordance with the relevant by-laws and shall be at the rates in place at the time of payment.

12. The Owner acknowledges that in order to obtain electricity distribution services which result from an expansion of the distribution system or require a new connection to the distribution system, as the case may be, the distributor as that term is defined in the Electricity Act, 1998 (hereinafter referred to as the "Local Distribution Company") shall collect and the Owner shall pay, pursuant to the Ontario Energy Board's Distribution Code and the Energy Competition Act, 1998, the balance of all capital contributions owed to the Local Distribution Company in respect of the connection to and/or expansion of the electricity distribution system required as a result of the Owner's development.

13. Unless otherwise provided, the Owner shall construct all works on public land at the expense of the Owner.

14. The Owner shall at its expense perform the following maintenance work on the Subject Lands:

a) once a year flushing of any storm sewers, and the hydraulic pumping and cleaning of any manholes and catch basins;

b) maintain any fencing;

c) maintain any landscaping and keep any sodded areas properly cut and trimmed at all times and replace any dead or diseased trees or shrubbery;

d) repair and repaint any vehicle parking and driveway areas;

e) maintain any internal water and storm drainage systems;

f) remove and dispose of all dirt, dust and debris resulting from road sweeping operations;

g) provide all necessary winter maintenance, including snow clearing and removal; and

h) keep any fire and emergency routes open and clear at all times to the satisfaction of the Commissioner and the City's Fire Chief. 006-14029 Page 5 164

15. The Owner shall keep all public highways clear of building materials and of dust, mud, refuse, rubbish and other litter of all types while the Subject Lands are being developed. The Owner also shall keep public highways external to the Subject Lands clear of dust, mud, refuse, rubbish and other litter of all types generated by or attributable to development of the Subject Lands. The Owner shall be responsible for the repair of public highways external to the Subject Lands which are damaged by the development, whether by the installation of the municipal services or the parks services or the maintenance thereof or otherwise. The aforesaid obligations shall be performed by the Owner regardless of the persons responsible for the obstruction, dust, mud, refuse, rubbish or other litter or damage.

Without limiting the generality of the foregoing or limiting the liability of the Owner should the Owner breach any of the aforesaid provisions, the Owner shall clear such public highways and remove all building materials, refuse, rubbish and litter or repair the damage within twenty-four hours after being notified by the City to do so. Failure by the Owner to clear the public highways or to remove building materials, refuse, rubbish and other litter or repair the damage shall entitle the City to draw on the Letters of Credit delivered to the City pursuant to this Agreement and to hold monies drawn until the public highways have been cleared or the damage repaired to the satisfaction of the Commissioner. The City shall charge and the Owner shall pay an administrative fee of $500.00 if the City makes a demand of the issuer of the Letter of Credit to realize upon such Letter of Credit in accordance with the provisions of this paragraph whether or not the Letter of Credit is realized upon. In addition to its other remedies, the City shall be entitled to carry out the clean-up or dust laying work or the repair referred to above at the Owner's expense if the work is not performed within twenty-four (24) hours of written notice to the Owner or his consulting engineer and the City shall be entitled to draw upon any of the Letters of Credit delivered pursuant to this Agreement to cover its expenses and an administration fee of $500.00.

Without limiting the generality of the foregoing, the Owner shall keep all areas around hydrants clear of building materials and of mud, refuse, rubbish and other litter of all types while the Subject Lands are being developed so as to provide unobstructed access to the hydrants for firefighting purposes.

16. The Owner shall at its expense complete all the works referred to in Paragraph 2, including landscaping, no later than eighteen (18) months from the date of execution of this Agreement.

17. Unless otherwise provided, the Owner shall be responsible for the collection, handling, storage and disposal of all garbage and other refuse on the Subject Lands and shall provide indoor or covered garbage handling, storage and loading facilities, in accordance with the drawings forming Drawings "A" and "K".

18. Without limiting the generality of Paragraph 2 or any other provision or condition in this Agreement, following execution of this Agreement, the Owner shall, at its expense, install and properly maintain, at all times and to the satisfaction of the Commissioner, signs setting out the names of all private roads within the Subject Lands named by the City in accordance with the provisions of Section 48 of the Municipal Act, whether the private roads are named before or after the execution of this Agreement.

19. The Owner acknowledges that the naming of those private roads does not constitute assumption of those private roads by the City and that all signs provided for in this Paragraph remain the property and responsibility of the Owner.

20. The Owner further acknowledges that the names of the private roads are the sole prerogative of the City and agrees that no sign conflicting with the names given by the City will be permitted.

21. Without limiting the generality of the foregoing, the Owner agrees that such signs will be installed in the locations shown on the Drawings referred to in Paragraph "Puc#illoltdH i 11 ~;.;-----. 006-14029 Page 6 165

2 and that the content, size, style, and colour of the signs will be in accordance with the City's criteria for such signs from time to time and that, if those criteria are revised by the City after the execution of this Agreement, such revisions shall be deemed to constitute an amendment to this Agreement.

22. No storm or surface water, weeping tile or roof water drainage on the Subject Lands shall be connected to or discharged into a sanitary sewer or connection.

23. The Owner covenants and agrees that the signage locations and dimensions as depicted on the Drawings attached hereto shall be for reference purposes only. The Owner shall not erect any signs which are not in compliance with the City of Richmond Hill Sign By-law No. 52-09, as amended, upon the Subject Lands and the Owner shall obtain all necessary permits prior to the erection of any sign on the Subject Lands. The Owner acknowledges that no mobile sign shall be erected or placed upon the Subject Lands.

24. In the event the Owner has not completed an application for a Building Permit within six (6) months or has not commenced construction within eighteen (18) months of the date of execution of this Agreement by the City, then, at the option of the City, this Agreement shall be null and void and of no effect.

25. Where a fire route is required on the Subject Lands, the Owner shall install all necessary signs at its expense and shall not permit the parking of vehicles in any area so designated.

26. The Owner shall indemnify and save harmless the City at all times from any loss or liability resulting directly or indirectly from the development of the Subject Lands or the improper maintenance thereof, including any damage caused by the drainage of the Subject Lands save and except for loss or liability arising from the negligence of the City, its servants, agents or employees.

27. The Owner shall ensure that all outdoor lighting equipment and fixtures designed to service the Subject Lands comply with the City of Richmond Hill Light Pollution By-law No. 63-95, or its successor.

28. The Owner shall at its expense install timer devices on all outdoor lighting equipment and fixtures and signs to extinguish such equipment and fixtures during non-operating hours. This requirement shall not apply to outdoor lighting equipment deemed by the Commissioner to be necessary for security purposes only. No lighting equipment of an animated or intermittent nature shall be installed on the Subject Lands.

29. The Owner covenants and agrees to provide lighting details for the subject development to the City's Planning and Regulatory Services Department.

30. Prior to the superstructure works proceeding and the release of the Completion Stage Permit, the Owner's consulting engineer must certify that the top of foundations are in conformity with the overall grading plan reviewed by the Commissioner.

31. The Owner shall provide a certificate signed by a Professional Engineer that all works covered by an Environmental Compliance Approval, issued by the Ministry of the Environment and Energy under the Ontario Water Resources Act, have been installed in accordance with the approved engineering drawing(s).

32. The Owner acknowledges that in the future, the City may be reconstructing the works set out in Paragraph 2 herein as a local improvement pursuant to the Local Improvement Act or other applicable legislation (hereinafter referred to as the "Local Improvement"). The Owner hereby acknowledges that any future reconstruction of these works as a Local Improvement is separate and distinct from, and bears no relation to any works performed by the Owner or on the Owner's behalf pursuant to this Agreement. The Owner agrees that should the Subject Lands be found to abut on and or benefit from the Local Improvement and thereby be subject to a special assessment in respect thereof, it will not ~l!Ofitjj.!!_ 006-14029 Page 7 166

object to the Local Improvement or to the special assessment on the ground that any works forming part of the Local Improvement were works performed by or on behalf of the Owner pursuant to the terms of this Agreement.

33. The Owner shall provide to the City a complete set of computer generated (CAD) as-built engineering drawings for the Site Servicing Plan, Grading Plan, and any associated Stormwater Management Plan in Autocad R14 format and a set of scanned images of the as-built engineering drawings for each in TIFF Group 4 format compatible with the City's computer system, the accuracy of which shall be certified by the engineer supervising the construction.

34. The Owner shall provide to the City a complete set of as-built engineering drawings referred to in Paragraph 33 upon request for final inspection associated with the release of securities for site improvements.

35. The Owner shall carry out an archaeological assessment for the Subject Lands and mitigate, through preservation or resource removal and documentation, adverse impacts to any significant archaeological resources found. No grading or other soil disturbances shall take place on the subject property prior to the approval authority and the Ministry of Culture confirming that all archaeological resource concerns have met licensing and resource conservation requirements.

36. The Owner agrees to implement the Recommendations of the Noise Impact Study for the Subject Lands, by J.E. Coulter Associates Limited, dated March 7, 2017 as follows:

a. All townhouse units in Blocks A, B, Hand the easterly unit of Block F depicted in Drawing A shall incorporate a forced air heating system with the provision for the future installation of central air conditioning;

b. All townhouse units in Block G depicted in Drawing A shall incorporate central air conditioning prior to occupancy;

c. All townhouse units in Block G depicted in Drawing A shall include the following warning clauses in the Agreement of Purchase and Sale indicating the sound levels have exceeded the MOE's noise criteria:

"Purchasers/tenants are advised that sound levels due to increasing road traffic may occasionally interfere with some activities of the dwelling occupants as the sound levels exceed the Municipality's and the Ministry of the Environment's noise criteria."

"This dwelling unit has been supplied with a central air conditioning system which will allow windows and exterior doors to remain closed, thereby ensuring that the indoor sound levels are within the Municipality's and the Ministry of the Environment's noise criteria."

d. All townhouse units in Blocks A, B, Hand the easterly unit of Block F depicted in Drawing A shall include the following warning clauses in the Agreement of Purchase and Sale indicating the sound levels have exceeded the MOE's noise criteria:

"This dwelling unit has been fitted with a forced air heating system and the ducting, etc. was sized to accommodate central air conditioning. Installation of central air conditioning by the occupant will allow windows and exterior doors to remain closed, thereby ensuring that the indoor sound levels are within the Municipality's and the Ministry of the Environment's noise criteria. (Note: The location and installation of the outdoor air conditioning device should be done so as to comply with noise criteria of MOE Publication NPC-216, Residential DOG-14029 Page 8 167

Air Conditioning Devices and thus minimize the noise impacts both on and in the immediate vicinity of the subject property.)"

e. Ontario Building Code-compatible construction based on the bedroom and living/dining room window-area to floor-area ratios will be sufficient to meet the MOE's interior noise criteria. Large window-area to floor-area ratios can be used and still meet the interior noise criteria without the need for upgraded glazing or exterior wall construction. The brick veneered facades are adequate. There are no special glazing requirements for the kitchen and bathroom, where applicable.

37. Prior to releasing any securities, the Owner shall provide a noise compliance letter certified by a professional engineer that all noise mitigation measures proposed in the approved noise study for the subject lands have been installed and in conformance with the Ministry of Environment guidelines.

38. The Owner agrees to implement the Recommendations of Table 1 Tree Inventory for the Subject Lands, by Beacon Environmental, dated December 10, 2013, as amended.

39. The following buildings are designated as fire breaks unless otherwise determined and evidenced in writing by the City's Fire Chief: Blocks B, F and H depicted on Drawing "A".

The Owner covenants and agrees that notwithstanding that a Building Permit has been issued for the designated fire break(s), no construction shall proceed above the ground subfloor until the exterior finish including but not limited to cladding, roofing, doors and windows on the end unit abutting the fire break has been completed, unless otherwise approved by the City's Fire Chief. Further, the fire breaks, including below grade structures on such fire breaks, shall be kept clear of building materials until the exterior finish on the parcel of land abutting each side lot line has been completed as aforesaid.

To ensure compliance with above paragraph, the Owner shall file upon execution of this Agreement, a Letter of Credit in the amount of FIFTEEN THOUSAND DOLLARS ($15,000.00). Where construction or storage of building materials proceeds in contravention of above paragraph the City may draw on the Letter of Credit and go on the Subject Lands to demolish the building. In the event the Letter of Credit is not sufficient to cover all expenses, the City may recover the deficit by action against the Owner or in like manner as municipal taxes owing upon the Subject Lands.

The location of the hydrants must be identified with fire hydrant signs until construction in the area is completed.

The roadways or other access routes must be kept clear of construction materials at all times. The access routes must be maintained and accessible as indicated on the application for subdivision approval unless otherwise approved by the authorities having jurisdiction.

The area around hydrants must be kept clear to afford access for firefighting purposes.

Construction must not be commenced above the foundation stage until suitable access routes and water for firefighting purposes are provided.

All building sites must be kept clear of waste combustible materials.

At least one 2A rate portable fire extinguisher must be provided in plain sight, in the immediate vicinity of any welding, cutting or plumbing operations.

The building(s) identification must be prominently displayed for site and units prior to occupancy. This includes site plan map at main entrance, corner posts 006-14029 Page 9 168

identifying unit numbers along internal streets, and dwelling unit numbers. Owner shall ensure signs are maintained at all times.

40. The lots and blocks listed in Drawing "A" are designated as fire break lots and blocks respectively unless otherwise determined and evidenced in writing by the City's Fire Chief.

The Owner covenants and agrees that notwithstanding that a building permit has been issued for the lots and blocks designated as fire break lots and blocks respectively, no construction shall proceed above the ground subfloor until the exterior finish including but not limited to cladding, roofing, doors and windows on the unit abutting each side lot line has been completed, unless otherwise approved by the City's Fire Chief. Further, the fire break lots and blocks, including below grade structures on such lots and blocks, shall be kept clear of building materials until the exterior finish on the unit abutting each side lot line has been completed as aforesaid.

To ensure compliance with the above paragraph the Owner shall file upon execution of this Agreement a Letter of Credit in the amount shown on Schedule "A". Where construction or storage of building materials proceeds in contravention of the above paragraph the City may draw on the Letter of Credit to take any action whatsoever that the City's Fire Chief deems necessary in order to mitigate any fire hazard, including, but not limited to, having individuals situated to monitor the lands and going on the lands to install fire extinguishers, other protection equipment, signage/notices and surveillance systems or to demolish the building. In the event the Letter of Credit is not sufficient to cover all expenses, the City may recover the deficit by action against the Owner or in like manner as municipal taxes owing upon the lands.

41. Prior to the construction of any shoring, the Owner shall provide engineering drawings prepared by a qualified professional engineer, at the Owner expense, showing the location of the shoring system, detail of the works, location of the utilities/services and any significant features pertinent to the shoring system to the satisfaction of the City.

42. The shoring plan shall include appropriate sections to identify the location of tiebacks relative to underground.

43. The Owner agrees that the shoring system shall be certified by a qualified professional structural engineer prior to commencing construction and upon completion of the construction of the shoring system, and to the satisfaction of the City. This certification must indicate that the shoring system is installed to acceptable engineering standards and to good quality and workmanship and in a manner so as to minimize any risk to the City and the City's Lands and all that they contain.

44. The Owner agrees to obtain the necessary Building Permit(s) to construct all shoring.

45. The Owner warrants to the City that the tie-backs shall be the only component of the shoring system to permanently encroach on the City's Lands.

46. The Owner agrees that the depth of the tie-backs shall be no less than three (3) metres below the ground surface.

4 7. The Owner warrants to the City that the shoring system will become redundant once the permanent underground structure is fully completed.

48. Upon installing the shoring system the Owner shall, at its cost, restore the surface of the City's Lands to its original condition, free of refuse and debris, to the satisfaction of the City.

49. During the construction of the shoring system, the Owner shall, at its expense and to the satisfaction of the City, carry out all works, repairs and restoration in a "P~>lOl~j i I I ,,,__~ 006-14029 Page 10 169

good and workmanlike manner in accordance with accepted engineering procedures and standards, using safe and efficient construction methods and with the least amount of interference to the City's Lands. If the Owner fails to comply, and upon thirty days' written notice, the City may require the Owner to remove the tie-backs encroaching on the City's Lands without payment of damages or compensation, if the failure to comply is not remedied prior to the date set out in the notice.

50. The Owner shall backfill all voids created by the shoring system with approved material and compacted in accordance with the City's standards to the satisfaction of the City.

51. If the City needs to remove or alter the tie-backs encroaching on the City's Lands to install, maintain or repair City infrastructure, the Owner shall indemnify the City against any loss, costs or damages arising as a result thereof, provided that the City shall not, unless necessary for health or safety reasons, remove or interfere with the Owner shoring system during the construction of the project.

52. The Owner agrees that the Letter(s) of Credit posted under this Agreement will be used by the City to secure the Owner's obligations under Paragraphs 42 to 52 inclusive.

53. Before the City authorizes any reduction or release of the security the Owner shall:

a. Provide the City with a certificate from the Structural Engineer indicating that the shoring system has been completed; b. Provide the City with a certificate from the Structural Engineer indicating that the underground structure is completed to a stage that it no longer requires the shoring system to support the construction; c. Provide the City with a certificate from the Structural Engineer, indicating the tie-backs have been de-stressed by physically disconnecting them by removing the tie-back anchors and pins from the shoring wall.

54. The Owner shall agree to create a non-exclusive surface easement (the "Easement") over the interior private walkways to be constructed upon a portion of the grade level of the Subject Lands, in favour of the adjacent property located to the south of the Subject Lands, legally described as Part Lot F, Plan 1916, Vaughan; Part Lot G, Plan 1916, Vaughan as in RH69235, Except Part 1, 65R- 18300, Richmond Hill, being all of PIN 03208-0031 (LT), Part oflot F, Plan 1916, Vaughan, Part Lot G, Plan 1916, Vaughan, Part 1, 65R-18300, Richmond Hill, being all of PIN 03208-0032 {LT), and Part Lot F, Plan 1916, Vaughan, Part Lot G, Plan 1916, Vaughan as in R651454, Richmond Hill, being all of PIN 03208- 0033 (LT), and municipally known as 40 and 60 Harris Avenue, Richmond Hill (the "Benefitting Lands") for the purpose of providing pedestrian ingress and egress between the Subject Lands and the Benefitting Lands. The Easement shall be a surface easement, which shall be created pursuant to section 20 of the Condominium Act, 1998 (Ontario) by describing the Easement in the condominium declaration and description. The Easement shall be in a form and location satisfactory to the Commissioner and the Owner shall be responsible for the preparation of any and all Reference Plan(s) necessary for the creation or conveyance of the Easement and for all other costs related to such creation or conveyance.

55. If for any reason whatsoever any term, covenant or condition of this Agreement, or the application thereof to any person or circumstance, if to any extent held or rendered invalid, unenforceable or illegal, then such term, covenant or condition is deemed to be independent of the remainder of the Agreement and to be severable and divisible therefrom, and its invalidity, unenforceability or illegality Tu~no1£1jjJ.L..__ ~ 006-14029 Page 11 170

does not affect, impair or invalidate the remainder of the Agreement or any part thereof and it continues to be applicable to and enforceable to the fullest extent permitted by law against any person and circumstances other than those as to which it has been held or rendered invalid, unenforceable or illegal.

56. The City is not obligated to enforce any term, covenant or condition of this Agreement against any person, if, or to the extent by so doing, such party is caused to be in breach of any law, rules, regulations or enactments from time to time in force.

57. Any notice given to the Owner pursuant to this Agreement shall be deemed to have been effectively given when mailed by prepaid registered mail to:

Ideal (JS) Developments Inc.

1100 Rodick Road

Markham, ON L3R 8C3

Attention: Luis Correia

58. Any notice given to the City pursuant to this Agreement shall be deemed to have been effectively given when mailed by prepaid registered mail to:

The City of Richmond Hill

225 East Beaver Creek Road

Richmond Hill, ON L4B 3P4

Attention: Kelvin Kwan, Commissioner of Planning and Regulatory Services

59. The Owner shall indemnify and save harmless the City at all times from any loss or liability resulting directly or indirectly from the development of the Subject Lands or the improper maintenance thereof, including any damage caused by the drainage of the Subject Lands save and except for loss or liability arising from the negligence of the City, its servants, agents or employees.

60. The parties will not call into question, directly or indirectly, in any proceeding or action in court, or before any administrative tribunal, the party's right to enter into and enforce this Agreement. The law of contract applies to this Agreement and the parties are entitled to all remedies arising from it, notwithstanding any provision of section 41 of the Planning Act, R.S.O. 1990, c. P.13, as amended, interpreted to the contrary. The parties agree that adequate consideration has flowed from each party to the other and that they are not severable. This provision may be pleaded by either party in any action or proceeding as an estoppel of any denial of such right.

61. Unless the contrary intention appears the word "City" shall include its successors and assigns and the word "Owner" shall include the heirs, executors, administrators, successors and assigns to whom the context can apply according to law and if there is more than one Owner, or if the Owner is a female person or Corporation, this Agreement shall read with all grammatical changes appropriate by reason thereof and all liabilities and obligations shall be joint and several and shall run with the Subject Lands. DOG-14029 Page 12 171

In Witness Whereof the Owner and the City have hereunto affixed their corporate seals duly attested by their proper signing officers in that behalf.

) IDEAL (JS) DEVELOPMENTS INC. ) ) )~~~~~~~~~~~~~ ) Name: ) Title: ) ) ) els )~~~~~~~~~~~~~ ) Name: ) Title: ) ) I/We have authority to bind the Corporation. ) ) THE CORPORATION OF THE ) CITY OF RICHMOND HILL ) ) )~~~~~~~~~- ) ) Mayor ) ~ ) )~~~~~~~~~~~~~ ) ) Clerk ) ) We have authority to bind the Corporation.

Recommended for Execution in Confirmation by the Treasurer Accordance with By-law No. 183-98 that financial conditions have been satisfied

Kelvin Kwan, Commissioner David Dexter of Planning and Regulatory Services Director of Financial ServicesfTreasurer

Approved as to Contents,

Dan Terzievski Shelly Cham Planning and Regulatory Services Planning and Regulatory Services Department Department

Note: If the Corporate Seals are not affixed to this document, affidavits may be required to verify the authority of the parties signing D06-14029 Page 13 172

SCHEDULE "A"

PAYMENTS

1. Payments Required to be made upon the Execution of this Agreement

Amount H.S.T. Total Engineering and Inspection Fees $48,888.33 $6,355.48 $55,243.81 Registration and Subsearch of Title Fees $112.63 $0.00 $112.63 General Administration Fee $20,736.00 $2,695.68 $23431.68 Engineering Review Fees $71,004.48 $9,230.58 $80,235.06

TOTAL CASH PAYMENTS $140,741.44 $18,281.74 $159,023.18

SECURITIES

2. Securities to be filed upon the execution of this Agreement

Amount Site Works $349,202.00 Landscaping $149,000.00 Fire Break UC $15,000.00 Shoring Tiebacks (Jefferson Road Allowance) $55,000.00

TOTAL LETTERS OF CREDIT $568,202.00

NOTE: City-Wide and Area Specific Development Charges will be payable prior to the issuance of a building permit in accordance with the relevant by-laws in place by the City, Region Municipality of York, and the York Region Boards of Education at the current rates in place at the time of actual payment. Water Meters, Tree Charges and Green bins/recycling are also applicable at that time. (Contact: Finance Department, Development Division)

E.&O.E. D06-14029 Page 13 173

SCHEDULE "A"

PAYMENTS

1. Payments Required to be made upon the Execution of this Agreement

TOTAL CASH PAYMENTS $140,741.44 $18,281.74 $159,023.18

SECURITIES

2. Securities to be filed upon the execution of this Agreement

Amount Site Works $349,202.00 Landscaping $149,000.00 Fire Break L/C $15,000.00 Shoring Tiebacks (Jefferson Road Allowance) $55,000.00

TOTAL LETTERS OF CREDIT $568,202.00

E.&O.E. 174

This is Exhibit "E" referred to in the Affidavit of Shajiraj Nadarajalingam,

sworn this 10th day of July, 2019.

Judy Hamilton 175

------Forwarded message ------From: Noah Mintz Date: Mon, May 6, 2019 at 11:14 AM Subject: Jefferson Sideroad To: Prasana Balachandran Cc: Mitchell Oelbaum , [email protected]

Prasana-

1 Per our discussion, we are prepared to give you a 3 month extension only on the following basis: 176

Interest Rate: 9.5% (prime plus 5.55%) per annum.

Principal Pay down: $1,000,000 Principal pay down must be received by May 10th, 2019

Interest: May 10, June 10 and July 10th payments must be received by May 10th, 2019. This amounts to $343,178 ($15.25M at 9.25% for 1 month and $14.25 Million at $9.5% for 2 months)

New Maturity Date: August 10, 2019

Fee: $78,375 - Due May 10th, 2019

For clarity, all amounts listed above ($1,421,553) must be paid and received by us via wire transfer on or before May 10, 2019.

If you are in agreement please respond to this email and I will provide you with an extension document for you to sign.

If these items are not received by May 10 we will proceed with the remedies permitted under our mortgage.

Regards,

Noah

2 177

Noah Mintz

Managing Director

(416) 483-4367 (Office Direct)

(416) 483-8018 ext. 232 (Office)

(416) 300-6897 (mobile)

[email protected]

Licence #M08006173

PLEASE NOTE OUR NEW ADDRESS:

245 Eglinton Avenue East, Suite 400

Toronto, Ontario, M4P 3B7

Vector Financial SERVICES LIMlll!D

Bt-0K~ag~tic~~.:~ #10160 il~mllliltrii-!OrUceoce dllZ-05

3 www. vecto rfinan cia !services.com 178

400 - 245 Eglinton Avenue East, Toronto, ON, M4P 3B7

This communication contains confidential and privileged information and is intended only for the party to whom it is addressed If you are not the intended addressee, you should not disseminate, distribute or copy this email. If you have received this telecommunication in error, please notifj; the sender immediately by return electronic mail and destroy the message.

4 179

This is Exhibit "F" refened to in the Affidavit of Shajiraj Nadarajalingam,

sworn this 10th day of July, 2019.

Judy Hamilton 180

Ji""f ~us CAPl1'AL /JV~ ,.• 4420 Colonel Talbot Road London, ON N6P 1R1 Tel: 1-519-652-4004 Fax: 1-519-652-2432 I )ucilnus ( ~apilal Toll Free: 1-833-752-4004

June 19, 2019

Private and Confidential

Ideal (JS) Developments Inc. 1O Milner Business Court Toronto, ON M1 B 3C6

Re: Commitment Letter - Ducimus Capital Inc. financing to Ideal (JS) Developments Inc.

Dear Mr. Nadrajalingam,

Ducimus Capital Inc. (the "Lender") is prepared to grant the loan described below to the Borrower (as defined below) subject to the terms and conditions set out below and in the attached Schedules (collectively with this letter, the "Agreement"). This Agreement shall replace all previous agreements and any amendments related thereto between the Borrower and the Lender unless otherwise noted herein. If this Agreement meets with your satisfaction, please confirm your acceptance by returning a copy of this document, duly signed as required and initialled on each page including this one and the pages of each of the Schedules, which are an integral part of this Agreement, within three (3) Banking Days of the date of this Agreement. The Lender reserves the right to cancel or amend this Agreement if it is received after this date.

This letter together with all Schedules which are attached and form an integral part of this Agreement, will confirm that your application for a first mortgage loan (the "Loan") has been approved subject to the following conditions:

1. Borrower

Ideal (JS) Developments Inc. (the "Borrower") and related guarantees from the guarantors set out below.

2. Guarantor

Shajiraj Nadarajalingam (the "Personal Guarantor") and Ideal (RD2) Developments Inc. (the "Corporate Guarantor") and Ideal (RD) Developments lnc. (the "Corporate Guarantor")

Refer to the Schedules for the particulars applicable to all Guarantors. 181

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3. Property Secured

1. 39-67 Jefferson Side Road, Richmond Hill, ON

Legal Description: Block 1, Plan 65M4637 subject to an easement as in YR2622073 subject to an easement as in YR2644669 subject to an easement in gross as in YR2817498 City of Richmond Hill AND Part Lots B & C, Plan 1916 designated as part 3, plan 65R-37587 subject to an easement as in YR2622073 subject to an easement as in YR2644669 subject to an easement in gross as in YR2817498 City of Richmond Hill.

The legal description of and title to the above referenced property (the "Property") is to be confirmed by the Lender's solicitor and the title is free and clear of all encumbrances except permitted encumbrances by the Lender.

4. Purpose

i) Payout existing mortgages on property. ii) Provide working capital to fund municipal fees due for site plan agreement. iii) Provide funds for site servicing. iv) Finance broker fee v) Finance lender fee vi) Finance legal fee vii) Finance interest reserve for repayment over six months.

5. Loan Details

Loan Amount $17,850,000

Type Term loan subject to interest-only monthly payments from interest reserve established by the Lender.

Term Six (6) months

Amortization Period Six (6) months

Interest Rate Variable Rate of 12.00%, which rate shall be set as follows:

A variable rate of interest equal to the Prime Rate set by Royal Bank of Canada plus 8.05% per annum.

The Interest Adjustment Date shall be the last day of the month from the date of the Initial Advance.

Prepayment Prepayment will be allowed penalty free.

The Lender is authorized to retain from the Loan Advance an interest reserve which is equal to all interest due on the loan during the Term held by the Lender and accrued to the Lender on a monthly basis as such interest payments come due.

Loan Advance Upon completion of all required legal documentation and additional conditions as described herein so as to provide security in form and substance satisfactory to the Lender in its sole discretion, which is IQ) ~ 182

-3-

anticipated to be on or about June 28, 2019. Unless otherwise agreed to in writing by the Lender or as defined in a Schedule hereto, the Loan will be advanced in one instalment, and any and all Advances are subject to compliance with all conditions and requirements provided herein.

Repayment The Loan shall be repayable as follows:

$178,500 per month during the Term commencing one (1) month from the Interest Adjustment Date and continuing monthly thereafter from the interest reserve held by the Lender. Unless the Borrower defaults on any of the Borrower's obligations, repayments on the Loan shall be interest-only during the Term. Any payment made in addition to the sums required to be applied towards the accrued Interest shall be held by the Lender and applied to principal on the Balance Due Date, and no Interest shall be paid by the Lender thereon. Other than as provided above, the Borrower shall not make any payments towards principal during the Term.

The Lender has established an interest reserve of $1,071,000 which shall be held back by the Lender from the loan advance and applied against any amounts as they become due. In the event that the interest reserve is insufficient to meet any obligations to the Lender, the Borrower agrees to pay such additional amounts to the Lender immediately upon written demand.

Security Registered continuing first collateral demand mortgage/charge against all real property constituting the Property in the full amount of the Loan, any sums to be added to the principal thereof in accordance with this Agreement (the "Real Property Security"). Standard Charge Terms No. 201609 or such other standard charge terms as required by the Lender or the Lender's solicitor shall govern and apply to this Charge, provided that if there is any discrepancy between any provisions in the said Standard Charge Terms and this Agreement, the terms and provisions of this Agreement shall govern and apply.

The Borrower shall deliver evidence by way of a certificate of insurance from a reputable insurer that the Real Property is insured to its full replacement cost (or to a standard acceptable to the Lender) together with Assignment of such interest to the Lender as first loss payee and additional named insured.

If the Loan is guaranteed as set out in section 2 herein, each guarantor named shall provide to the Lender a fully executed stand alone form of Guarantee & Postponement of Claims prior to any funds being advanced in a form acceptable to the Lender.

Completion of this Agreement is subject to the Borrower providing such other security as provided in the Schedules to this Agreement, a policy of title insurance in a form satisfactory to the Lender and any other items as may be required by the Lender or the Lender's solicitor, acting reasonably. 183

-4-

The above shall collectively be referred to as the "Security Documents".

6. Fees

All inspection fees, legal fees and disbursements and all other expenses incurred by the Lender with respect to this Loan and any future borrowing or Advances under this Loan are to be paid by Borrower (including reasonable discharge fees upon repayment of the loan), whether the Loan is completed or not and, unless othe1wise provided herein, such fees, disbursements and expenses are to be deducted from the proceeds on the initial Advance or any future Advance hereunder, at the sole option of the Lender. Such fees, disbursements and expenses include, but are not limited to, title insurance, mortgage registration, the Loan Fee (as defined below) and Lender's legal fees, plus any HST payable (collectively, the "Fees"). In the event that the Loan is not advanced for any reason whatsoever (other than a cause attributable solely to the Lender), the Borrower and the Guarantor, if any, shall be jointly and severally liable to pay to or for the benefit of the Lender any and all such Fees within three (3) days of the earlier of the Closing Date or the date the Lender became aware that this Agreement was not to be completed at provided herein, and interest thereon shall accrue at the Interest Rate provided herein with regards to the Loan.

Without limiting the generality of the foregoing and in addition to any commitment fee paid by the Borrower to the Lender, the Borrower shall pay fees to the Lender or others as noted below (the "Loan Fees") and the Borrower authorizes and directs such fees be paid and shall be deducted from the initial Advance:

Fee and Payee Amount

Underwriting fee payable to the Lender $357,000

Broker fee payable to Rockstar Mortgage $89,250 Services Inc.

7. Conditions

This Agreement, and any Loan or Advance contemplated hereunder, are conditional on the Borrower and Guarantor, if any, full satisfying the conditions and requirements provided in this Agreement to the satisfaction of the Lender and the Lender's solicitor. The terms and conditions contained in the Schedules form an integral part of this Agreement as if they were incorporated into it directly.

Title to the Property must only be registered in the name of the Borrower or a Guarantor if permitted by the Lender, which Person will execute the mortgage and other documents required by the Lender.

There shall be no prior encumbrances and the Borrower covenants and agrees not to place or grant any encumbrance on or against the property ranking subsequent to the mortgage except on written notice to Lender and with the Lender's consent. 184

- 5 -

The Lender must be satisfied that all realty taxes and utilities which may form a lien against the property are paid in full and not in arrears prior to advance.

8. General

This Agreement replaces any preceding verbal and/or written agreement between the parties, if any, concerning any and the facilities stipulated herein.

The Lender shall subsequently see to the preparation of the documents related to the Security Documents and Charges stipulated in this Agreement and the completion of other due diligence of a customary nature for commercial transactions, which must be completed to the satisfaction of the Lender and the Lender's solicitors prior to any Advance in their sole discretion. By accepting this Agreement, the Borrower confirms that all the financial and other documents and information provided to the Lender to obtain this Agreement are accurate and complete. If they are inaccurate or Incomplete, this Agreement may be cancelled or repayment of the loan demanded in full, at the Lender's discretion.

The Borrower and any Guarantors further authorize and consent to the Lender, its solicitors and any other third parties acting on its behalf to perform investigations into and collecting personal information, financial, credit, environmental, legal and other background matters the Lender determines necessary and each of them consent to the release of all information, reports, data or files held by any other person or party.

The terms and conditions contained in the attached Schedules are incorporated into and form an integral part of this Agreement. Unless otherwise provided, in the event of a conflict between the terms of this letter and the terms of the Schedules, the terms of this letter shall prevail.

Yours very truly,

Ducimus Capital Inc. ~

Per: Al Birtch President & Managing Par 185

- 6 -

Borrower's Acceptance

I (We) the undersigned Borrower or duly authorized representative(s) of the Borrower, in the case of a body corporate, acknowledge that I/we have reviewed the terms of this Agreement, including all Schedules attached hereto, and accept all the terms and conditions set out herein.

Signed at /?J&Rl(Hfll1/'/ this 25'Tflday of Tiv\/E , 2019.

Witness___.-

IDEAL (JS) DEVELOPMENTS INC. ~~--~ Per: t--I ' ~v~ ~_=-=-=:i Shajiraj Nadarajalingam

Acceptance of Guarantor

The guarantor or guarantors mentioned herein hereby acknowledge(s) having reviewed the terms of this Agreement, including all Schedules attached hereto, and agree to all terms and conditions set out herein. Consequently, the guarantor or guarantors undertake to sign all documents in order to give full force and effect to its (their) commitments as joint and several guarantors and as principal debtors, as contemplated herein.

Signed at //'frt-ff..l(H!flt1 this 2srH day of ::rluvC- , 2019.

Witness Guarantor: Shajiraj Nadarajalingam 186

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Acceptance of Guarantor

The guarantor or guarantors mentioned herein hereby acl

IDEAL (RD) DEVELOPMENTS INC.

Per: · t:[. Q1-,_ ~~ Shajiraj Nadarajalingam

Acceptance of Guarantor

IDEAL (RD2) DEVELOPMENTS INC.

Per: 4'-/ · ~~~-~ Shajiraj Nadarajalingam I 187

- 8 -

Schedule "A" Special Provisions

The following provisions, if any, shall be and form part of the Agreement, and in the event of a conflict between the terms of this Schedule and any other terms contained in the Agreement, including any Schedule thereto, the terms of this Schedule shall prevail.

1. Prior to the Lender acting on this Commitment for mortgage financing, the Borrower will furnish to the Lender an executed Commitment Letter for construction financing. This Commitment Letter will need to be reviewed by the Lender's solicitor and be deemed by the Lender as acceptable prior to any funds advance being made under this agreement. IMPORTANT: For clarity. If the lender, in its sole discretion, deems the terms and conditions of the construction financing to be too restrictive and I or expose the lender to an unacceptable level of risk that the construction financing might not move forward and close, then the lender will not advance funds under this commitment. 2. An executed Site Plan Agreement to be furnished to the Lender from the City of Richmond Hill. 3. Documentation to be provided to the Lender to confirm all approvals, permits and I or the fulfillment of all requirements to satisfy construction financing requirements. 4. Written confirmation to be provided by the City of Richmond Hill that the site being developed is clean of contamination or that the City is satisfied that the site will be fully remediated through the excavation process. 5. A letter of transmittal from AACI appraiser for use of appraisal narrative report. 6. All business supporting documentation as requested. 7. Ducimus Capital Inc. to complete and be satisfied with a site visit to the subject property. 8. Confirmation that all property and income tax from the prior calendar year have been fully paid. 9. The Borrower will maintain an insurance policy payable to the Lender as first loss payee on any claims associated with the subject property. Confirmation to be provided to the Lender prior to completing the transaction and funding of the subject loan. 10. The Borrower shall furnish or cause to be furnished to the Lender promptly on request such other information in its possession (or the possession of any other person) respecting its financial condition and its business operations as the Lender may from time to time reasonably require. 188

-9-

Schedule "B" Advances

Unless otherwise provided herein, the Loan shall be advanced to the Borrower in only one Advance, which shall for all purposes of this Agreement also be deemed to be the initial Advance.

Principal Sum to be Advance Date or Event Advanced Initial Advance $17,850,000 June 28, 2019

Where an Advance is contingent on satisfactory evidence of an event, evidence of such event is to be provided in writing to the Lender and no Advance shall be made until the Lender satisfies itself with regards to such evidence, acting reasonably. Each Advance is subject to reductions as provided in this Agreement. 189

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Schedule "C" Amortization Schedule and Cost of Borrowing

If applicable, the attached Amortization Schedule as approved by the Lender shall form part of this Agreement.

If applicable, tile attached Cost of Borrowing statement as approved by the Lender, and provided to the Borrower, shall form part of this Agreement. 190

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Schedule "D" Required Security

In addition to the Security, the Lender may require the Borrower and/or any Guarantors to execute and deliver its standard form of the following agreements, if applicable, which list is non-exhaustive and does include such other forms and instruments as are customarily required in transactions of this nature as determined by the Lender's solicitor:

Full covering personal guarantee of Shajiraj Nadarajalingam

Full covering corporate guarantee of Ideal (RD) Developments Inc.

Full covering corporate guarantee of Ideal (RD2) Developments Inc.

General Security Agreement registered under PPSA in first position over all fixed and floating assets of Ideal (JS) Developments Inc.

Executed environmental indemnity agreement. 191

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Schedule "E" Fees

The Borrower(s) and Guarantor(s) shall be solely responsible for all expenses, closing costs, fees and other expenditures (including but not limited to all legal fees and disbursements) incurred by the Lender related to the loan herein whether or not the loan is completed and funds advanced and will pay all such amounts immediately after written request of the Lender.

The Borrower(s) and Guarantor(s) shall also be responsible for any expenses, fees or other costs incurred by the Lender during the term of the loan including but not limited to administrative costs, property site visits, NSF cheques, insurance or property tax arrears and any other such fees or costs which the Lender determines are reasonable and necessary in order to administer the loan, inspect, assess or protect its security interest in the collateral, determine the Borrower(s) and/or Guarantor(s) continuing creditworthiness or to maintain the Lender's priority and all of which are at the sole expense of the Borrower(s) and Guarantor(s).

Any such costs are ultimately owed by the Borrower(s) and Guarantor(s) and may be added to the outstanding principal balance of the loan or will otherwise be due to Lender upon written request to Borrower. Any default in payment of such amounts shall constitute a default under the terms of this commitment letter.

The following table sets out a non-exhaustive list of the Lender's current fees payable in certain instances.

Infraction Description Fee

Missed/Late/NSF Payment Payable for the failure to provide timely $150.00 payment or Non-Sufficient Funds. Insurance Notices Payable in the event action is required due to $200.00 insurance notice of cancellation or arrears. Property Tax Terms Default Payable for non-provision of confirmation of $150.00 paid-to-date property taxes as outlined in the Commitment Letter Terms. Issuance of Demand Letter Payable for each issued demand letter in the $150.00 event the Borrower is in default. Non-Compliance Payable for administration of the account for $250.00 each month the Borrower is not compliant to monthly the terms of their Commitment Letter. Non-Payment at Maturity Payable for each day the mortgage is not $100.00 repaid after maturity. Applicable Interest Rate of the mortqaqe will still apply. Note: The above fees are in addition to any legal costs incurred by·Lender. 192

This is Exhibit "G" refe1Ted to in the Affidavit of Shajiraj Nadarajalingam

sworn this 10th day of July, 2019.

for Taking Affidavits, etc.

Judy Hamilton 193

Court File No.: CV-19-00614709

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN:

SHAJIRAJ NADARAJALINGAM and IDEAL PROPERTIES INC.

Plaintiffs - and-

JIAJIA ZHAO and ONEPIECE HOLDING INC. Defendants

CONSENT

The parties to this proceeding, by their respective solicitors, hereby consent to an Order, in the form attached as Schedule "A".

The parties to this proceeding, by their respective solicitors, hereby certify that the attached

Order being consented to does not affect the rights of any person under disability

DATED this day of July, 2019. FRIEDMAN LAW PROFESSIONAL CORPORATION Per:

Mark A. Russell Lawyers for the Plaintiffs

DATED this day of July, 2019. LAX O'SULLIVAN LISUS GOTTLIEB LLP Per:

James Renihan Lawyers for the Defendants 194

Court File No. CV-19-00614709

ONTARIO SUPERIOR COURT OF JUSTICE

THE HONOURABLE ) DAY, THE ) JUSTICE ) DAY OF JULY, 2019

BETWEEN:

SHAJIRAJ NADARAJALINGAM and IDEAL PROPERTIES INC. Plaintiffs - and-

JIAJIA ZHAO and ONEPIECE HOLDING INC. Defendants

ORDER

THIS MOTION, made by the Plaintiffs for an Order for payment, was read this date at

393 University Avenue, Toronto, Ontario.

ON READING the consent of the parties, filed,

1. THIS COURT ORDERS that the Defendants Jiajia Zaho and Onepiece Holding Inc. shall

pay to the Plaintiffs' solicitors, Friedman Law Professional Corporation, in Trust, the

amount of $1,700,000 by certified funds on or before August 25, 2019.

2. THIS COURT ORDERS that the date of payment set out in paragraph 1 above shall be

without prejudice to the Plaintiffs' claim for damages in the Action related to the payment

date of on or around February 2, 2019, including as set out in paragraphs l(b) and 19 of

the Statement of Claim. 195

SHAJIRAJ NADARAJALINGAM et al. and JIAJIA ZHAO et al. Plaintiffs Defendants Court File No.: CV-19-00614709

ONTARIO SUPERIOR COURT OF JUSTICE

Proceeding commenced at Toronto

ORDER

FRIEDMAN LAW PROFESSIONAL CORPORATION 150 Ferrand Drive, Suite 800 Toronto, Ontario M3C 3E5

Mark A. Russell (LS0#64216N)

Tel: 416-496-3340 Fax: 416-497-3809

Lawyers for the Plaintiffs 196

SHAJIRAJ NADARAJALINGAM et al. and JIAJIA ZHAO et al. Plaintiffs Defendants Court File No.: CV-19-00614709

ONTARIO SUPERIOR COURT OF JUSTICE

Proceeding commenced at Toronto

CONSENT

FRIEDMAN LAW PROFESSIONAL CORPORATION 150 Ferrand Drive, Suite 800 Toronto, Ontario M3C 3E5

Mark A. Russell (LS0#64216N)

Tel: 416-496-3340 Fax: 416-497-3809

Lawyers for the Plaintiffs 197

This is Exhibit "H" refe1Ted to in the Affidavit of Shajiraj Nadarajalingam

sworn this 10th day of July, 2019.

Judy Hamilton 198

Blaney Blaney McMurtry LLP I Lawyers @416-593-1221 2 Queen Street East I Suite 1500 McMurtryLLP Toronto, Ontario MSC 3GS @Blaney.com

HST REGISTRATION# R119444149

PRIVATE & CONFIDENTIAL Date Vector Financial Services Limited May 31, 2019 245 Eglinton Avenue East, Suite 400 Toronto, Ontario M4P 387 Invoice No. 661583

File No. 113817-0001

Attention: Mitchell Oelbaum C.0.0.

RE: Ideal (JS) Developments Inc. Enforcement of mortgage security, 39 Jefferson Side Rd., Richmond Hill, ON

TO ALL PROFESSIONAL SERVICES RENDERED on your behalf in connection with the above noted matter for the period ended May 31, 2019 as more particularly described below.

Date Description April 26, 2019 Telephone communications from M. Canale; April 30, 2019 Conference telephone conversation with M. Canale, M. Oelbaum and Noah; May 7, 2019 Email from M. Oelbaum with report book; email to him; May 8, 2019 Emails from and to R. Tan, M. Oelbaum, N. Mintz and M. Canale; receiving and reviewing payout statement; email to D. Ullman; instructions to PJ; open file; meeting with D. Ullman; May 9, 2019 Conference telephone conversation with M. Oelbaum, N. Mintz, M. Canale and D. Ullman; discussions with D. Ullman; emails from and to M. Canale; brief review of form of agreement of purchase and sale used by borrower with third party unit purchasers; May 10, 2019 Emails from and to D. Ullman; review and revise draft demand letters; email to M. Oelbaum and M. Canale; email from M. Canale; May 11, 2019 Reviewing and revising s. 244 notice; May 12, 2019 Complete reviewing and revising s. 244 notice; email to D. Ullman; May 13, 2019 Emails from and to and telephone call with D. Ullman; revise demand letters; prepare consent to early enforcement; emails from and to M. Oelbaum; telephone communications from D. Pollack; May 14, 2019 Telephone call from N. Mintz;

Tem1s: Payment upon receipt. Interest :ts allowed in the Solicitors Act at a r,tte of 0.8% per annum, ca!Clllated monthly will be added to all amounts overdue 30 days or more. 199

Date May 31, 2019

Invoice No. 661583

File No. 113817-0001

-2-

Date Description May 15, 2019 Emails from and to and telephone communications from B. Friedman; emails to and from M. Oelbaum, N. Mintz and M. Canale; May 16, 2019 Telephone call with N. Mintz; voice mail message to and telephone communications from B. Friedman; email from G. Abramson; instructions to D. Ullman and M. Abramowitz; May 16, 2019 Meet with D. Ullmann and discuss background; conference call with G. Abrahamson, S. Graff and D. Ullmann regarding facts and security enforcement; receiving and reviewing background documents including demands May 17, 2019 Email to M. Oelbaum et al; email from D. Pollack; discussions with M. Abramowitz; May 17, 2019 Receiving and reviewing correspondence of D. Pollack, G. Abrahamson; meet and discuss with D. Ullmann, S. Jeffery; send loan documentation to Aird Berlis regarding security review; correspondence with N. Mintz regarding background information and set up call to discuss May21,2019 Email to and brief discussions with M. Abramowitz; email from N. Mintz; email to D. Pollack et al; voice mail message to B. Friedman; May21,2019 Telephone call with N. Mintz regarding background and instructions regarding enforcement and seeking appointment of receiver; meet and discuss with M. Hodges and instructions regarding drafting application materials; meet with S. Jeffery and call to B. Friedman regarding receivership application; correspondence with N. Mintz regarding status; correspondence with G. Abrahamson regarding status and materials May 21, 2019 Phone call with M. Abramowitz to discuss new matter; conference call with client; meeting with M. Abramowitz to discuss strategy and drafting application materials; begin preparing draft application materials; discussion with colleague about transferring receiverships to Toronto Commercial List; May 22, 2019 Correspondence and telephone call with M. Canale, N. Mintz regarding proceeding; follow up correspondence with B. Friedman May 22, 2019 Review Notice of Intention to Enforce Security; communication with M. Abramowitz regarding names of applicants; instructions to assistant regarding preparation of application materials; meeting and discussion with M. Abramowitz regarding named applicants and entities to include on service list; May 23, 2019 Emails from and to D. Pollack; 200

Date May 31, 2019

Invoice No. 661583

File No. 113817-0001

-3-

Date Description May 23, 2019 Prepare Consent of receiver and send to G. Abrahamson May 23, 2019 Review 39 pdf client documents; perform online searches of respondent company; perform online searches of clients; draft notice of application; draft affidavit; May 24, 2019 Telephone call with M. Abramowitz and emails from and to him; review PINs and restriction on title; May 24, 2019 Meet with S. Jeffery; telephone calls, emails with D. Pollack regarding status of matter; review documents for use in application materials; telephone call with G. Abrahamson, S. Graff and meet with S. Jeffery and M. Hodges regarding restriction on title to property regarding sale; review various documents on title and call with N. Mintz regarding restriction May 24, 2019 Continued drafting affidavit; conference call with proposed receiver and receiver's counsel; May 24, 2019 Ordered profile report for Ideal (JS) Developments Inc.; May 26, 2019 Continued drafting affidavit; May 27, 2019 Meet with M. Hodges and review draft receivership materials; telephone call with N. Mintz regarding status and phone calls and receiving and reviewing correspondence and extension agreements; receipt of correspondence of G. Abrahamson with site photos May 27, 2019 Continue drafting and making edits to materials; submit material to M. Abramowitz for review; edits to materials based on M. Abramowitz comments; review new materials received from client; incorporate new materials into draft receivership materials; May 28, 2019 Meet with M. Hodges and review revised documents for receivership application; receiving and reviewing correspondence of B. Friedman and send to clients for review; further correspondence with clients regarding response May 28, 2019 Further edits made to materials; inclusion of further substantive detail as per M. Abramowitz' instructions; submitted to M. Abramowitz for review; ordered PPSA and real property searches; email to client regarding units sold; communication with opposing counsel; May 28, 2019 Receive instructions; conduct name search in the GTA regarding Ideal (JS) Developments and Shajiraj Nadarajalingham ; subsearch of title (teraview) on parcels found ; report ; May 28, 2019 Verified corporate name and conducted PPSA searches against Ideal (JS) Developments Inc. and on Shajiraj Nadarajalingam; 201

Date May 31, 2019

Invoice No. 661583

File No. 113817-0001

-4-

Date Description May 29, 2019 Correspondence with B. Friedman regarding receivership application; meet with M. Hodges regarding additional documents and revisions to affidavit; telephone call with N. Mintz regarding restriction on title and transfers; correspondence with G. Abrahamson and S. Graff regarding application and materials, security opinion May 29, 2019 Communication with client regarding units sold; review search results; revisions and edits to materials and submitted v3 of materials to M. Abramowitz for review; meeting with M. Abramowitz to discuss drafts of receivership materials; email to client seeking further documentation ie loan agreement and syndication agreements; May 30, 2019 Review and revise draft affidavit of N. Mintz in support of appointment of receiver; telephone call with N. Mintz regarding agreement with Town of Richmond Hill and restriction on transfer of property; meet and discuss materials with M. Hodges May 30, 2019 Review edits of M. Abramowitz; additional edits; compile all evidence to be used as exhibits in directory; correspondence with clients and receipt of further client documents;

OUR FEE HEREIN: $18,464.00 FEE HST: $2,400.32

Disbursements Amount Profile Report/Point in Time Report* - N $8.00 Computer Searches - R.E. (Teraview) * - $49.30 Cyberbahn Agent Service Fee $47.00 Postage $34.05 Computer Searches - R.E. (Teraview) $127.65

TOTAL DISBURSEMENTS: $266.00 *HST is not charged DISBURSEMENT HST: $27.13

TOTAL FEES AND DISBURSEMENTS: $18,730.00 TOTAL HST: $2.427.45 202 Date May31,2019

Invoice No. 661583

File No. 113817-0001

-5-

TOTAL AMOUNT DUE: $21.157.45

BLANEY McMURTRY LLP

Fees may include charges for services provided by Lawco Limited. Details are available upon request.

Make payment(s) payable to Blaney McMurtry LLP. We accept Visa, Mastercard and AMEX. For Wire Transfers: TD Canada Trust, Bank No, 004, Transit No. 10252, General Account No. 0680-5215022 Swift Code: TDOMCATTTOR ·Please ensure our account number and/or file number is quoted on the wire transfer. 203

This is Exhibit "I" refened to in the Affidavit of Shajiraj Nadarajalingam

sworn this 10th day of July, 2019.

Judy Hamilton 204 Vector Financial SERVICES LIMITED Brokerage Licence #10160, Administrator Licence 1111205

Payout Statement

WITHOUT PREJUDICE

May 31, 2019

Re: Mortgagor: Ideal (JS) Developments Inc. Prope1iy : 1st Mortgage at 39, 53 & 67 Jefforson Sideroad

STATEMENT FOR DISCHARGE PURPOSE ACCOUNT NO: JEFFERSON 17-13

(valid until Jun 10, 2019 with interest currently paid to Apr 09, 2019)

Principal Balance $15,250,000.00

Monthly Interest at 12.25% due May 10, 2019 155,677.08

Monthly Interest at 12.25% due Jun 10, 2019, compounded 157,266.29

Over Holding Fee per section 20 of the Loan [email protected]%/mo. 38,125.00

Default Adminstration Fee - May and Jun 2019 (incl. HST) 8,475.00

Reimbursement for expenses paid 234.30

Default and collection fee - Oct 2016 700.00

Discharge fee 500.00

Bank processing fee 500.00

Bank wire fee 15.00

Annual review fee (incl. HST) - 2 years@ $565.00 1,130.00

Statement fees (incl. HST) - 4 @ $395.50 1.582.00

Total Amount payable to Vector Financial Services Limited $15.614.204.67 HST# 10550 1209RT0001 E.&O.E.

245 Eglinton Avenue East, Suite 400, Toronto, Ontario M4P 3B7 Phone: 416-483-8018 Fax: 416-483-97 63 www.vectorfinancialservices.com 205 Vector Financial SERVICES LIMITED Brokerage Licence #10160, Administrator Licence #11205

Tltis Payout Statement is valid until Jun 10, 2019. Ifpayment in full is not received on or before 1:00 p.m. Jun 10, 2019, tltis statement is null a11d voitl and a new statement will be required lls fill additionlt/ Over Holding Fee will flpply.

These figures are subject to change with any subsequent transactions and do not include any legal fees.

Payments must be made by wire transfer and if received after 1:00 p.m. shall be deemed for the purpose of calculation of interest to have been made and received on the next banking day.

Per diem interest charge will be $N/A.

Yours truly, VECTOR FINANCIAL SERVICES LIMITED

Mitchell Oelbaum Chief Operating Officer FSCO Licence No. M13001562

245 Eglinton Avenue East, Suite 400, Toronto, Ontario M4P 3B7 Phone: 416-483-8018 Fax: 416-483-97 63 www.vectorfinancialservices.com 206 Vector Financial SERVICES LIMITED Brokerage Licence #10160, Administrator Licence 1111205

Updated Payout Statement

WITHOUT PREJUDICE

June 24, 2019

Re: Mortgagor: Ideal (JS) Developments Inc. Property : 1st Mortgage at 39, 53 & 67 Jefferson Sideroad

STATEMENT FOR DISCHARGE PURPOSE ACCOUNT NO: JEFFERSON 17-13 (valid until Jul 10, 2019 with interest currently paid to Apr 09, 2019)

Principal Balance $15,250,000.00

Monthly Interest at 12.25% p.a. due May 10, 2019 155,677.08

Monthly Interest at 12.25% p.a. due Jun 10, 2019, compounded 157,266.29

Monthly Interest at 12.25% p.a. due Jul 10, 2019, compounded 158,871.71

Over Holding Fee per section 20 of the Loan Proposal@ 0.25%/mo. 76,250.00

Default Adminstration Fee - May-Jul 2019 (incl. HST) 14,125.00

Reimbursement for expenses paid 212.76

Outstanding legal expenses - Blaney McMurtry invoice #6615 83 21,370.21

Default and collection fee - Oct 2016 700.00

Discharge fee 500.00

Bank processing fee 500.00

Bank wire fee 15.00

Annual review fee (incl. HST) - 2 years@ $565.00 1,130.00

Statement fees (incl. HST) - 5 @ $395.50 1 977.50

Total Amount payable to Vector Financial Services Limited $15,838,595.55 HST# 10550 1209RTOOOI E.&O.E.

245 Eglinton Avenue East, Suite 400, Toronto, Ontario M4P 3B7 Phone: 416-483-8018 Fax: 416-483-9763 www.vectorfinancialservices.com 207 Vector Financial SERVICES LIMITED Brokerage Licence #10160, Administrator Licence #11205

This Payout Statement is valid until Jul JO, 20J9. Ifpayment in full is not received on or before J:OO p.m. Jul JO, 20J9, this statement is null and void and a new statement will be required as additional Over Holding Fee and other fees will apply.

These figures are subject to change with any subsequent transactions and do not include any legal fees.

Payments must be made by wire transfer and if received after 1 :00 p.m. shall be deemed for the purpose of calculation of interest to have been made and received on the next banking day.

Per diem interest charge will be $NI A.

Yours truly, VECTOR ·INANCIAL SERVICES LIMITED Per:

Mitchell Oelbaum Chief Operating Officer FSCO Licence No. Ml3001562

245 Eglinton Avenue East, Suite 400, Toronto, Ontario M4P 3B7 Phone: 416-483-8018 Fax: 416-483-97 63 www.vectorfinancialservices.com 208

VECTOR FINANCIAL SERVICES LIMITED - and- IDEAL (JS) DEVELOPMENTS INC., et et al. al. Applicants Respondents Court File No.: CV-19-00622054-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

Proceeding commenced at Toronto

Affidavit of Shajiraj Nadarajalimgam (Sworn July 10, 2019)

FRIEDMAN LAW PROFESSIONAL CORPORATION 150 Ferrand Drive, Suite 800 Toronto, Ontario M3C 3E5

William Friedman (LSO No.: 18420U) [email protected]

Judy Hamilton (LSO No.: 394758) [email protected] Tel: 416-496-3340 Fax: 416-497-3809

Lawyers for the Respondents

VECTOR FINANCIAL SERVICES LIMITED - and - IDEAL (JS) DEVELOPMENTS INC., et al. et al. Applicants Respondents Court File No.: CV-19-00622278-00CL

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST Proceeding commenced at Toronto

RESPONDING APPLICATION RECORD

FRIEDMAN LAW PROFESSIONAL CORPORATION 150 Ferrand Drive, Suite 800 Toronto, Ontario M3C 3E5

William Friedman (LSO No.: 18420U) [email protected]

Judy Hamilton (LSO No.: 39475S) [email protected] Tel: 416-496-3340 Fax: 416-497-3809

Lawyers for the Respondents