P r e s e n t s CAMPUS COMMONS

coming 2019 ROAD SCHUCKS B Geo-Technical, Materials Testing and Inspections AY

S TATE Land Planners & Surveyors

CHURCHVILLE L AND Civil & Structural Engineers Environmental Engineers

S ERVICES Fax : 410-420-3949 Phone: 410-879-4747 Forest Hill, 20150 2012 Rock Spring Road Suite D www.baystatelandservices.com CONCEPT PLAN #4

D SCALE: 1"=40'

D OWNER/DEVELOPER

ROAD

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(MD. RTE #22) CAMPUS COMMONS 2215 CHURCHVILLE ROAD BEL AIR, MARYLAND 21015 EX 1 Harford County GIS 2215 E. Churchville Road - Campus Commons Printed: Oct 23, 2018 Copyright 2012, Harford County Government

0 400

Feet Harford Technical High School

John Archer School

MD Rt. 22 Churchville Rd

Campus Commons

Schuck's Road 2215 E Churchville Rd.

Amenities Leasing

Building traffic & frontage

Land Demographics

Demographics chris streett 20

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Workforce Technical Training10 Grant10 FY2019 Round 1: 0 16: Total No. Businesses | 134:JAN No. FEB of Employees MAR APR MAY | JUN $67,953.94: JUL AUG SEP Total OCT $ Disbursed

Next round is open until May 17, 2019 2019

0 Loan Programs 2018 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT 0 2019 7: Applications | 2: ApprovedJAN FEB for MAR $50,000/each APR MAY JUN JULRolling AUG applications SEP OCT accepted

2019 JAN (6.33%) FEB (3.80%)

JAN (6.33%) MAR (0%) 2018 FINANCIAL EVENTSFEB (3.80%) APR (13.92%) MAR (0%) MAY (2.53%) APR (13.92%) MAY (2.53%) JUN (7.59%) HARFORD JAN JUN(6.33%) (7.59%) JUL (5.70%) JUL (5.70%) COUNTY FEB (3.80%) AUG (18.99%) AUG (18.99%) MARSEP (0%) (14.56%) SEP (14.56%) APROCT (13.92%) (23.42%) OCT (23.42%) COMMUNITY & ECONOMIC DEVELOPMENT 1,894 NOV (3.16%) MAY (2.53%) NOV (3.16%) JUN (7.59%) JUL (5.70%) AUG (18.99%) SEP (14.56%) OCT (23.42%) Total Attendance to Date:NOV (3.16%) 154

CURRENT MEMBERSHIP: 13

20 YTD: 156 VAi COMPANIES HELPED JUL-SEP 2018: 36 10

2018 MEMBERSHIP SBDC IMPRESSIONS 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2019 TOTAL FY19: 350

JAN (6.33%) FEB (3.80%) MAR (0%) DECEMBER 2014 - DECEMBER 2017 APR (13.92%) MAY (2.53%) JUN (7.59%) $382M CAPITAL INVESTMENT JUL (5.70%) TOTAL MEETINGS FY19:AUG (18.99%)69 December 2018 SEP (14.56%) 6.6M SQUARE FOOTAGE | 2,500 NEW JOBS OCT (23.42%) TOTAL EVENTS FY19:NOV (3.16%) 21 TOTAL IMPRESSIONS FY19: 2264 CALENDAR YEAR 2018 TO-DATE $110.4M CAPITAL INVESTMENT 1.4M SQUARE FOOTAGE | 658 NEW JOBS Labor Force by County

500000

400000

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0 JUN17 JUL17 AUG17 SEP17 OCT17 NOV17 DEC17 JAN18 FEB18 MAR18 APR18 MAY18 JUN18

December 2018 Harford County County Cecil County December 2018 Labor Force by County

500000 LaborUnemployment Force by County Rate by County

LABOR400000 FORCE BY COUNTY 500000 456,726 6 300000 400000 HARFORD COUNTY (TOTAL) 5 200000 Nov '18 Nov '17 300000 4 Units Sold 293 315 v 7% 100000 $252,000 239,000 ^ 5% 200000 Med Sale Price 3 139,525 203 0 SEP17 OCT17 NOV17 DEC17 JAN18 FEB18 MAR18 APR18 MAY18 JUN18 JUL18 AUG18 SEP18 OCT18 100000 2 53,327 Harford County Baltimore County Cecil County FOREST HILL, JARRETTSVILLE, NORTH 0 1 (21050, 21084, 21154, 21132, 21160, 21034) SEP17 OCT17 NOV17 DEC17 JAN18 FEB18 MAR18 APR18 MAY18 JUN18 JUL18 AUG18 SEP18 OCT18 Aug '18 Aug '17 0 Harford County Baltimore County Cecil County JUN17 JUL17 AUG17Unemployment SEP17 OCT17 Rate NOV17 by DEC17 County JAN18 FEB18 MAR18 APR18 MAY18 JUN18 7 Units Sold 40 53 v 25% Med Sale Price $344,000 $319,000 ^ 8% UNEMPLOYMENT RATE BY HarfordCOUNTY County Baltimore County Cecil County 6 Unemployment Rate by County 5 ABERDEEN, BELCAMP, HAVRE DE GRACE 6 (21001, 21017, 21078, 21028, 21130) 4 8 5 Aug '18 Aug '17 3 3.4% Susquehanna Workforce Network - November 2018 Units Sold 60 61 v 2% 4 2 3.9% Med Sale Price $202,750 $184,000 ^ 10% 20 3 4.1% 1 IN-COMMUTE JOBS: 33,323 2 10

0 OUT-COMMUTE Building (Commercial) JOBS: 69,422 Building (Commercial) BEL AIR (21014, 21015) SEP17 OCT17 NOV17 DEC17 JAN18 FEB18 MAR18 APR18 MAY18 JUN18 JUL18 AUG18 SEP18 OCT18 1 Aug '18 Aug '17 0 100 200 300 0 10 20 0 30 Harford County Baltimore County Cecil County 2016 2017 2018 YTD 2016 2017 Q12018 2017YTD Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 0 Units Sold 81 86 v 6% SEP17 OCT17 NOV17 DEC17 JAN18 FEB18 MAR18 APR18 MAY18 JUN18 JUL18 AUG18 SEP18 OCT18 Retail Industrial Office Med Sale Price $289,000 $298,100 v 3% MARYLAND UNEMPLOYMENT:Harford County 3.8%Baltimore County Cecil County Employed: 134,732 (96.6%) Building Building (Commercial) Building (Commercial) Building Building (Manufactured) Building (Manufactured) NATIONAL UNEMPLOYMENT: 3.7% Building (Commercial) Building (Commercial) Unemployed: 4,793 (3.4%) FALLSTON & JOPPA (21047, 21085) 0 100 200 300 0 10 20 30 0 100 200 300 0 0 1050 20100 30150 0 5 10 15 2016 2017 2018 YTD 20162016 20172017 20182018 YTD YTD 2016 2017 2018 YTD Bureau of Labor Statistics - October 2018 Employed (95.87%) Unemployed (4.13%) 2016 2017 2018 YTD 2016 2017 2018 YTD 4.5% 4.6% 15.0% Aug '18 Aug '17 Units Sold 31 30 ^ 3% Med Sale Price 318,000 $252,450 ^ 26% Building Building (Multi-Family) Building (Multi-Family) Building Building (Manufactured) Building (Manufactured) Building Building (Commercial) Building (Commercial) Building Building (Commercial) Building (Commercial) Building Permit Activity January 2016 - present Building (Manufactured) Building (Manufactured)

0 50 100 150 0 5 10 15 0 0 100 100 200 200 300 300 0 00 10 5010 20 10020 30 15030 0 0 10 205 30 40 5010 60 70 8015 90 0 1 2 3 2016 2017 2018 YTD 2016 2017 2018 YTD 25 COMMERCIAL (OTHER) MANUFACTURED2016 20172016 20182017 YTD (OTHER)2018 YTD MULTI-FAMILY2016 201620172016 201720182017 YTD20182018 (OTHER) YTD YTD RESIDENTIAL20162016 20172017 2018 (OTHER)2018 YTD YTD 2016 2017 2018 YTD 20 ABINGDON (21009) 266 52 81 2073 15 Aug '18 Aug '17 10 267 106 15 1749 Units Sold 56 47 ^ 19% 5 Building Building (Multi-Family) Building (Multi-Family) Building Building (Residential) Building (Residential) Building Building (Commercial) Building (Commercial) Building Building (Multi-Family) Building (Multi-Family) Building Building (Manufactured) Building (Manufactured) Building Building (Commercial) Building (Commercial) 300 Building (Manufactured) 40 Building (Manufactured) 35 1721 0 Med Sale Price $240,000 $217,000 ^ 11% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 0 50 100 150 0 0 10 205 30 40 5010 60 70 8015 90 00 500 10001 15002 2000 2500 3 0 100 200 300 400 500 0 0 100100 200200 300300 Employed000 (95.87%)105010 Unemployed1002020 (4.13%)1503030 0 0 105 20 30 4010 50 60 7015 80 90 0 1 2 3 2016 2017 2018 YTD 2016 20162017 20172018 YTD2018 YTD 20162016 20172017 20182018 YTD YTD 20162016 20172017 20182018 YTD YTD 2016 2017 2018 YTD 2016 2017 2018 YTD 20162016 20172017 20182018 YTD YTD 2016 20162017 20172018 YTD2018 YTD 2016 2017 2018 YTD COMMERCIAL (NEW) MANUFACTURED (NEW) MULTI-FAMILY (NEW) RESIDENTIAL (NEW) Retail Industrial Office Building Building (Commercial) Building (Commercial) Building (Commercial) Building (Commercial) Building (Commercial) Building Building (Commercial) (Commercial) Building (Commercial) 27 14 0 405 (21040) Employed (95.87%) Unemployed (4.13%) EDGEWOOD 8 13 3 450 Aug '18 Aug '17 Building Building (Residential) Building (Residential) Building Building (Multi-Family) Building (Multi-Family) Building Building (Residential) Building (Residential) Building Building (Multi-Family) Building (Multi-Family) Building Building (Manufactured) Building (Manufactured) Building Building (Commercial) Building (Commercial) Building Building (Manufactured) 15 Building (Manufactured) 4 0 529 22 -- v -- 0 100 200 300 0 0 100 10 200 20 300 300 0 10 100 20 200 30 300 0 10010 20020 30030 0 10 20 30 Units Sold

0 500 1000 1500 2000 2500 0 100 200 300 400 500 0 100 200 300 000 501050 10010020 15015030 000 100 20 105 305 20 40 30 50 4010 6010 50 70 60 80 7015 9015 80 900 00 5001 10001 2 15002 20003 2500 3 0 100 200 300 400 500 2016 2017 2018 YTD 2016 2017 2018 YTD 2016 2017 2018 YTD 20162016 201720172017 201820182018 YTD YTD 2016 2016201620172016 20172016201720182017 YTD2018201720182018 YTD YTD YTD2018 YTD 201620162016201720162017201620172018201720182017 2018YTD YTD YTD20182018 YTD YTD 20162016 20172017 20182018 YTD YTD 2016 2017 2018 YTD $162,450 $163,000 v -- 2016 2017 2018 YTD 2016 2017 2018 YTD $19.92 $5.09 $21.78 Med Sale Price

Energov Building Permit Report - December 2018 CoStar Market Analytics - Q4 2018 Long and Foster Market Minute - November 2018 Building Building (Residential) Building (Residential) Building Building (Multi-Family) Building (Multi-Family) Building Building (Residential) Building (Residential) Building Building (Multi-Family) Building (Multi-Family) Building Building (Manufactured) Building (Manufactured)

0 50 100 150 000 10 10 20 20 305 30 40 40 50 50 6010 60 70 70 80 80 9015 90 000 50001 1000 5001 1000 15002 2 1500 2000 2000 25003 3 2500 0 1000 100 200 200 300 300 400 400 500 500 2016 2017 2018 YTD 2016 2017 2018 YTD 2016 2017 2018 YTD 20162016 20172017 20182018 YTD YTD 20162016 201720172016 201820182017 YTD YTD2018 YTD 2016 20172016 20182017 YTD2018 YTD Building Building (Manufactured) Building (Manufactured) Building (Manufactured) Building (Manufactured) Building (Manufactured) Building Building (Manufactured) (Manufactured) Building (Manufactured) Building Building (Residential) Building (Residential) Building Building (Residential) Building (Residential) Building Building (Multi-Family) Building (Multi-Family)

0 10 20 30 40 50 60 70 80 90 000 500 500 10001 1000 1500 15002 2000 2000 2500 25003 00 100 100 200 200 300 300 400 400 500 500 2016 2017 2018 YTD 2016 2017 2018 YTD 2016 2017 2018 YTD 0 2016502016 20172017 10020182018 YTD YTD 150 0 0 50 20165 2017100 201810 YTD150 150 0 5 50 10 100 15 150 0 505 10010 15015 0 5 10 15

2016 2017 2018 YTD 2016 20172016 20182017 YTD2018 YTD 2016 20162017 20172018 2018YTD YTD 2016 2017 2018 YTD 2016 2017 2018 YTD Building Building (Residential) Building (Residential)

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2016 2017 2018 YTD 2016 2017 2018 YTD Building Building (Multi-Family) Building (Multi-Family) Building (Multi-Family) Building (Multi-Family) Building (Multi-Family) Building Building (Multi-Family)(Multi-Family) Building (Multi-Family)

0 10 20 30 40 50 60 70 80 900 100 20 30 401 50 60 702 80 90 30 0 10 201 30 40 502 60 70 803 90 0 10 20 301 40 50 602 70 80 903 0 1 2 3

2016 2017 2018 YTD 2016 20172016 20182017 YTD2018 YTD 2016 20162017 20172018 2018YTD YTD 2016 2017 2018 YTD 2016 2017 2018 YTD Building Building (Residential) Building (Residential) Building (Residential) Building (Residential) Building (Residential) Building Building (Residential) (Residential) Building (Residential)

0 500 1000 1500 2000 2500 0 5000 1000 100 1500 200 2000 300 2500 400 500 00 100 500 200 1000 300 1500 400 2000 500 2500 0 500100 1000 200 1500 300 2000 400 2500 500 0 100 200 300 400 500

2016 2017 2018 YTD 2016 20172016 20182017 YTD2018 YTD 2016 20162017 20172018 2018YTD YTD 2016 2017 2018 YTD 2016 2017 2018 YTD

Subject Photographs

Aerial Photo

Location Map

Campus Commons Executive Summary 8

Executive Summary

Property Name Campus Commons Address 2215 E. Churchville Rd. Bel Air, Harford County, Maryland 21015 Property Type Retail - Strip Center Owner of Record Simmons Enterprises Group, LLC Tax ID Tax Map 42, Grid 4B, Parcel 454, Lot 7; Account No. 03-373150 Land Area - Total 8.91 acres; 387,989 SF Land Area (Usable) 5.48 acres; 238,665 SF Gross Building Area 34,500 SF Gross Leasable Area 34,500 SF Percent Leased 38% Year Built 2019 Zoning Designation B2, Community Business District Highest and Best Use - As if Vacant Retail use Exposure Time; Marketing Period 6 months; 6 months Effective Date of the Appraisal November 16, 2018 Value Conclusions Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value As Is Fee Simple November 16, 2018 $2,200,000 Prospective Market Value at Completion Leased Fee December 1, 2019 $6,800,000 Prospective Market Value at Stabilization Leased Fee May 1, 2021 $7,900,000 The values reported above are subject to the definitions, assumptions, and limiting conditions set forth in the accompanying report of w hich this summary is a part. No party other than How ard Bank and or affiliates may use or rely on the information, opinions, and conclusions contained in the report. It is assumed that the users of the report have read the entire report, including all of the definitions, assumptions,

Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is defined in USPAP as an assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions. 1. Our prospective value conclusions assume the subject will be constructed per the details outlined in the attached report, as of the prospective valuation dates. 2. Our estimate of the site's usable area is based on a review of the site plan prepared by Bay State Land Services, Inc., dated 8/2/18, and discussions with the site engineer. The value conclusions are based on the following hypothetical conditions that may affect the assignment results. A hypothetical condition is defined in USPAP as a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. 1. None

Campus Commons Harford County Area Analysis 13

Economic Analysis

Area Map

HARFORD COUNTY AREA ANALYSIS Introduction Harford County is located in north-central Maryland, approximately 20 miles northeast of Baltimore. It is 437 square miles in size and has a population density of approximately 592 persons per square mile. Harford County is part of the Baltimore-Columbia-Towson, MD Metropolitan Statistical Area, hereinafter called the Baltimore MSA, as defined by the U.S. Office of Management and Budget.

Population Population Trends Population Compound Ann. % Chng 2010 Census 2018 Estimate 2023 Projection 2010 - 2018 2018 - 2023 Harford County 244,826 258,518 266,999 0.7% 0.6% Maryland 5,773,552 6,119,186 6,331,024 0.7% 0.7% Baltimore MSA 2,710,489 2,847,927 2,928,630 0.6% 0.6% Source: ESRI

Campus Commons Harford County Area Analysis 14

Recent Performance The Baltimore MSA is in good shape. Year-ago employment growth has accelerated past that of the Northeast thanks to solid net hiring in professional/business services and hospitality. Federal government payrolls have also leveled off after declining in recent quarters. Weekly earnings are up on a year-ago basis, and growth is easily besting the U.S. average. The 4.3% unemployment rate is near a cyclical low, and the tight labor market and higher wages are incentivizing adults to jump into the workforce. Labor force participation is climbing and is now at its highest in two decades.

Employment Employment Trends Total Employment (Year End) Unemployment Rate (Ann. Avg.) Harford % % Year County Change Maryland Change Harford County Maryland 2007 84,664 2,580,545 3.3% 3.4% 2008 82,646 -2.4% 2,533,488 -1.8% 4.1% 4.2% 2009 81,556 -1.3% 2,465,106 -2.7% 7.1% 7.0% 2010 82,572 1.2% 2,488,518 0.9% 7.8% 7.6% 2011 84,866 2.8% 2,514,865 1.1% 7.2% 7.3% 2012 89,015 4.9% 2,544,871 1.2% 6.9% 7.0% 2013 89,134 0.1% 2,555,934 0.4% 6.5% 6.6% 2014 90,807 1.9% 2,593,145 1.5% 5.7% 5.8% 2015 93,613 3.1% 2,639,463 1.8% 4.9% 5.1% 2016 93,674 0.1% 2,669,749 1.1% 4.1% 4.4% 2017* 94,097 0.5% 2,661,847 -0.3% 3.8% 4.1% Overall Change 2007-2017 9,433 11.1% 81,302 3.2% Avg Unemp. Rate 2007-2017 5.6% 5.7% Unemployment Rate - January 2018 4.3% 4.7% *Total employment data is as of September 2017; unemployment rate data reflects the average of 12 months of 2017. Source: Bureau of Labor Statistics and Economy.com. Employment figures are from the Quarterly Census of Employment and Wages (QCEW). Unemployment rates are from the Current Population Survey (CPS). The figures are not seasonally adjusted.

Major Employers

Campus Commons Harford County Area Analysis 15

Employment Sectors Employment Sectors - 2017

0% 5% 10% 15% 20% 25%

Trade; Transportation; and 21.9% Utilities 17.3% 21.7% Government 18.2% 12.9% Education and Health Services 16.4%

Professional and Business 12.1% Services 16.8% 12.1% Leisure and Hospitality 10.7% 6.5% Construction 6.2% 5.2% Manufacturing 4.0% 3.6% Financial Activities 5.3% 3.1% Other Services 3.4% 0.7% Information 1.4%

Harford County Maryland

Source: Bureau of Labor Statistics and Economy.com Analysis Rough Seas Rising tariffs and trade war cast a shadow on trade, but the Port of Baltimore should weather the storm. The port has been buzzing with activity in recent years and has been setting records for cargo movement. Growth in transportation/warehousing employment has slowed slightly in recent months, possibly the result of a precautionary belt-tightening by port operators, but given the rapid growth of recent years and the tight labor market, this is hardly surprising. Because of the port’s East Coast location, much of its trade is with Europe, so it is less exposed to the tit for tat between the U.S. and China. Also, the port has minimal exposure to steel or agricultural products, which are among the major targets of tariffs so far. However, the port moves about one-sixth of U.S. aluminum imports. Further escalation could deteriorate global trade, and this remains a downside risk.

Campus Commons Harford County Area Analysis 16

Wait for It Residential construction has made little headway in recent years, but there is room for cautious optimism. Home sales are on the rise, although progress is impeded by a low inventory of appealing homes. Nonetheless, rising demand and accelerating house price growth will lend confidence to homebuilders and stoke construction. Single-family permit issuance is already rising at a steady clip. As the tight labor market fosters stronger wage growth, housing demand will rise further. Slow population growth will cap housing demand, but as it stands, the ratio of housing completions to household formation is well below its long- term average. This suggests that the housing market is undersupplied and builders have room to run.

Place Your Bets The odds may be shifting for the gaming industry. Maryland’s gambling halls have long benefited from proximity to Virginia, one of only 10 states that do not allow casinos. Baltimore MSA’s Live! Casino recently completed a $200 million hotel expansion, and revenue in June was up 15% from a year earlier, according the Maryland Lottery and Gaming Control Agency. However, Virginia may want to get in the game. Its General Assembly has begun to loosen its once-stringent gambling laws. Subsequently, a Chicago-based gaming company has purchased the shuttered Colonial Downs horse racing track, and the Pamunkey Indian Tribe has expressed interest in purchasing land near the track for a casino and resort. The casino would take years to come to fruition, but the tribe has the right under federal law to pursue it. If Virginia ultimately loosens its laws, this would cut into Baltimore MSA’s market share. As it stands, leisure/hospitality employment, though generally low-paying, has been a steady job creator, thanks in part to gaming.

Conclusion The outlook for the Baltimore MSA is positive but not euphoric. Healthcare and business/professional services will power steady gains in employment and output. The federal government will cease to be a liability, but its support to the economy will vacillate with the political climate. Weak population growth and relatively high business costs will cap upside potential long term, and employment growth will track the national average.

The Harford County economy will benefit from a growing population base and a higher level of median household income. Harford County experienced growth in the number of jobs and has maintained a consistently lower unemployment rate than the Baltimore MSA over the past decade. Moreover, Harford County benefits from being part of the Baltimore MSA, which generates a higher level of GDP per capita than the nation overall. We anticipate that the Harford County economy will improve and employment will grow, strengthening the demand for real estate.

Campus Commons Surrounding Area Analysis 17

SURROUNDING AREA ANALYSIS

Surrounding Area Map

Location The subject is located on the eastern border of Bel Air where it meets Churchville within Harford County. Bel Air is the county seat of the Harford County government and the center of commercial activity in the area.

Access and Linkages Primary access to the area is provided by I-95, a major arterial that crosses the southeastern portion of Harford County and connects with Baltimore County to the south and Cecil County to the north. Secondary access is provided by US Route 1, Maryland Route 24, and Maryland Route 924.

The Baltimore Washington International (BWI) Thurgood Marshall Airport is located about 30 miles southwest of the property; travel time is about 45 minutes, depending on traffic conditions. The Baltimore CBD, the economic and cultural center of the region, is approximately 20 miles southwest of the property.

Campus Commons Surrounding Area Analysis 18

The following traffic map, provided by the Maryland State Highway Administration indicates approximately 24,000 cars pass the subject property, along Churchville Road, daily:

Land Use The area is semi-rural in character and approximately 50% developed. Predominant land uses in the area are retail fronting Churchville Road, with residential/agricultural uses to the rear. Uses immediately surrounding the subject consist of retail to the east and west, agricultural to the south, and Harford Community College to the north. New development in the immediate area is limited. The highest concentration of retail and commercial uses is in the heart of Bel Air, approximately four miles southwest of the subject at the intersection of Route 24 and US Route 1.

Demand Generators The major employer in the area is the Federal Government and related civilian contractors at (APG), located approximately 10 miles east of the subject. The largest employer in Harford County and one of the largest employers in the state of Maryland, APG is located about ten miles east of the subject. This 72,500-acre military installation currently employs 7,500 civilians, 5,000 military personnel and 3,000 private contractors.

Campus Commons Surrounding Area Analysis 19

Demographic Factors A demographic profile of the surrounding area, including population, households, and income data, is presented in the following table.

Surrounding Area Demographics 1-Mile Drive 3-Mile Drive 5-Mile Drive Harford Baltimore 2018 Estimates Distance Distance Distance County Maryland MSA Population 2010 606 24,161 66,483 244,826 5,773,552 2,710,489 Population 2018 620 24,652 68,561 258,518 6,119,186 2,847,927 Population 2023 630 25,025 70,081 266,999 6,331,024 2,928,630 Compound % Change 2010-2018 0.3% 0.3% 0.4% 0.7% 0.7% 0.6% Compound % Change 2018-2023 0.3% 0.3% 0.4% 0.6% 0.7% 0.6%

Households 2010 204 8,573 24,408 90,218 2,156,411 1,038,765 Households 2018 209 8,764 25,167 95,115 2,266,481 1,082,017 Households 2023 212 8,897 25,705 98,187 2,337,810 1,109,095 Compound % Change 2010-2018 0.3% 0.3% 0.4% 0.7% 0.6% 0.5% Compound % Change 2018-2023 0.3% 0.3% 0.4% 0.6% 0.6% 0.5%

Median Household Income 2018 $107,160 $101,028 $97,527 $85,134 $79,833 $76,055 Average Household Size 3.0 2.8 2.7 2.7 2.6 2.6 College Graduate % 42% 42% 43% 36% 40% 40% Median Age 47 41 42 41 39 39 Owner Occupied % 87% 81% 79% 74% 60% 60% Renter Occupied % 7% 14% 16% 20% 31% 31% Median Owner Occupied Housing Value $414,773 $340,568 $330,455 $306,823 $325,730 $306,950 Median Year Structure Built 1981 1987 1986 1984 1976 1972 Avg. Travel Time to Work in Min. 0 0 0 0 0 0 Source: ESRI

As shown in the preceding table, the current population within a 3-mile drive distance of the subject is 24,652, and the average household size is 2.8. Population in the area has increased since the 2010 census and this trend is expected to continue over the next five years. Compared to Harford County as a whole, the population within the local area is expected to grow at a slower rate.

Median household income is $101,028, which is higher than the household income for Harford County. Residents within a 3-mile drive distance have a higher level of educational attainment than those of Harford County, and median owner-occupied home values are also higher. We note, the household income, and median owner-occupied home values in the subject’s immediate area (1-mile drive distance) are even higher than that of a 3-mile drive distance.

Outlook and Conclusions The area is in the stable stage of its life cycle. Recent development activity has been moderate. We anticipate that property values will remain stable in the near future.

Campus Commons Retail Market Analysis 20

RETAIL MARKET ANALYSIS Submarket Overview The subject is located in the Central Harford County submarket. In order to evaluate the market appeal of the subject’s submarket in comparison to others in the Baltimore metro area, we compare key supply and demand indicators for all space types in the ensuing table.

Baltimore Retail Submarket Comparison Anchor/ Tenant Non-anchor Inventory Inventory Asking Rent Free Rent Improvements Submarket Flag (Buildings) (SF) ($/SF) Vacancy (%) (mos) ($) Anne Arundel Co. A 55 5,029,000 $14.67 4.50% 4.49 $19.99 Anne Arundel Co. N 96 4,717,000 $24.57 7.30% 4.54 $22.84 Howard/Carroll Cos. A 41 3,021,000 $16.30 3.20% 4.60 $19.22 Howard/Carroll Cos. N 57 2,428,000 $27.85 6.40% 4.70 $16.45 N Baltimore Co. A 30 1,839,000 $17.85 7.90% 3.93 $40.64 N Baltimore Co. N 43 2,231,000 $28.61 7.20% 3.83 $28.72 Central/East Balt. A 44 4,037,000 $13.21 9.40% 2.45 $28.11 Central/East Balt. N 65 3,352,000 $20.50 10.30% 2.32 $26.80 W/SW Baltimore Co. A 56 4,678,000 $13.57 6.20% 6.40 $20.50 W/SW Baltimore Co. N 81 3,776,000 $23.68 12.10% 6.42 $18.64 Central Harford Co. A 16 1,193,000 $13.16 8.50% 6.57 $20.51 Central Harford Co. N 23 1,275,000 $22.63 13.50% 6.61 $23.78 Anchor Averages/Totals 242 19,797,000 $14.79 6.26% 4.74 $24.83 Nonanchor Averages/Totals 365 17,779,000 $24.64 9.19% 4.74 $22.87 Source: ©Reis Services, LLC 2018. Reprinted w ith the permission of Reis Services, LLC. All rights reserved.

The submarket makes up 7.17% of the inventory, on a square foot basis, for non- anchored shopping centers in the metro area. Submarket vacancy for non-anchored shopping centers is 13.50%, which is the highest seen in the metro area. Asking rent for non-anchored shopping centers in the submarket is $22.63, which is lower than the metro average of $24.64.

Campus Commons Retail Market Analysis 21

Submarket Analysis Supply and demand indicators for all classes of space in the Central Harford County submarket are displayed in the following table.

Vacancy Rate Vs Effective Rental Rate $30.00 12.00% $25.00 10.00% $20.00 8.00% $15.00 6.00% $10.00 4.00% $5.00 2.00% $0.00 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Market Effective Rent ($/SF) Submarket Effective Rent ($/SF) Market Vacancy % Submarket Vacancy %

Source: ©Reis Services, LLC 2018. Reprinted with the permission of Reis Services, LLC. All rights reserved.

Campus Commons Retail Market Analysis 22

Supply and Demand Trends 150,000 12.00%

100,000 10.00%

50,000 8.00%

0 6.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2019 2020 2021 2022 -50,000 4.00%

-100,000 2.00%

-150,000 0.00% Completions (SF) Absorption (SF) Vacancy (%)

Source: ©Reis Services, LLC 2018. Reprinted with the permission of Reis Services, LLC. All rights reserved.

The submarket vacancy has generally been in the 7.00% to 10.00% range since 2010, with the exception of a low of 5.10% in 2014, and a current high of 11.10% (Q3 2018). REIS projects the submarket vacancy to decrease over the next four years to 8.20% by 2022. The average effective rental rate has generally been increasing since a low point of $17.42 per square foot in 2010-2011, and is currently $20.07 per square foot. REIS projects the submarket rental rate to continue to increase over the next four years, to $21.21 by 2022. We note rental rates in the table above are reported on a triple net basis. We also note the rental rates reflect an overall rate for both non-anchored and anchored shopping centers. Rental rates for non-anchored centers are generally higher and more reflective of the subject property. Absorption has been generally positive over the past several years; REIS projects mostly positive absorption over the next four years. Retail Market Outlook and Conclusions Based on the key submarket area trends, NKF expects the mix of property fundamentals and economic conditions in the Baltimore metro area to have a neutral impact on the subject property’s performance in the near-term.

Campus Commons Land Description and Analysis 23

Land Description and Analysis

Land Description Land Area (Gross) 8.91 acres; 387,989 SF Land Area (Usable) 5.48 acres; 238,665 SF Source of Land Area Site Plan; Bay State Land Services, Inc.; 8/2/2018 Primary Street Frontage Churchville Rd. - 470 +/- feet Shape Irregular Corner No Topography Generally level and at street grade Drainage No problems reported or observed Environmental Hazards None reported or observed Ground Stability No problems reported or observed Flood Area Panel Number 24025C0166E Date April 19, 2016 Zone X Description Outside of 500-year floodplain Insurance Required? No Zoning; Other Regulations Zoning Jurisdiction Harford County Zoning Designation B2 Description Community Business District Legally Conforming? Appears to be legally conforming Zoning Change Likely? No Permitted Uses Retail uses such as, shopping centers, liquor stores, general merchandise stores, and restaurants; day-care centers; parks; etc. Minimum Setbacks (Feet) Front: 25 Side: 5 Rear: 35 Maximum Building Height 3 stories Maximum Floor Area Ratio 0.4 Parking Requirement Retail: 4 spaces per 1,000 SF Office: 3 per 1,000 SF Restaurant: 5 spaces per 1,000 SF Daycare: 1 space per 6 students and 1 loading space Utilities Service Provider Water Well Sewer Septic Electricity BG&E Natural Gas BG&E Local Phone Multiple Providers

We are not experts in the interpretation of zoning ordinances. An appropriately qualified land use attorney should be engaged if a determination of compliance with zoning is required.

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EASEMENTS, ENCROACHMENTS AND RESTRICTIONS Based on our review of the Well Permit Plan (J.J.R. 125-62), prepared by Bay State Land Services, Inc. dated 8/2/2018 (which follows this section), we are not aware of any easements, encroachments, or restrictions that would adversely affect value. Our valuation assumes no adverse impacts from easements, encroachments, or restrictions, and further assumes that the subject has clear and marketable title.

SITE UTILITY The eastern boundary of the site is mostly encumbered by non-tidal wetlands and is contained within a natural resource district and is considered unusable. In addition, the southern portion of the site is sloping and is also not considered usable. Based on our review of the site plan, and discussions with the site engineer, we estimate the usable acreage of the site to consist of 5.48 acres. It is noted, due to the subject’s water and sewer being provided by well and septic, in addition to the proposed parking ratio, restaurant use may be limited. It is also noted the subject’s long and narrow configuration, somewhat limits its retail potential.

ACCESS While not situated at a corner, the site benefits from the signalized intersection of Churchville Rd. and Shucks Rd. to the west, resulting from a strip of land (included in the subject boundaries) that extends toward Shucks Rd. from the southwest corner of the site. Also, Harford County is in the midst of a road-widening plan that will add a center-median lane to Churchville Rd. providing left turn access to the site.

ENVIRONMENTAL ISSUES No environmental issues were observed or reported. NKF is not qualified to detect the existence of any potentially hazardous materials such as lead paint, asbestos, urea formaldehyde foam insulation, or other potentially hazardous construction materials on or in the subject property. The existence of such substances may affect the value of the property. For the purpose of this assignment, we have specifically assumed that any hazardous materials that would cause a loss in value do not affect the subject.

CONCLUSION Other than the long and narrow configuration of the subject property, the physical characteristics of the site and the availability of utilities result in functional utility suitable for a variety of uses including those permitted by zoning. We are not aware of any other particular restrictions on development.

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AERIAL

Campus Commons Improvements Description and Analysis 27

Improvements Description and Analysis

The subject is a proposed 4-building, 34,500 square foot retail property. Construction is scheduled to commence Spring 2019 with completion expected December 2019. Approximately 38% of rentable area is pre-leased based on signed LOI's as of the effective appraisal date. We project the property to be stabilized May 2021. The site area consists of 8.91 acres, though only 5.48 acres are considered usable.

Improvements Description Name` of Property Campus Commons General Property Type Retail Property Sub Type Strip Center Competitive Property Class A- Occupancy Type Multi-Tenant Percent Leased (LOI's) 38% Number of Tenants 2 Tenant Size Range (SF) 1,200 - 12,000 Number of Buildings 4 Stories 1 Construction Class C Construction Type Masonry Construction Quality Good Condition New Gross Building Area (SF) 34,500 Gross Leasable Area (SF) 34,500 Usable Land Area (SF) 238,665 Floor Area Ratio (GLA/Land SF) 0.14 Floor Area Ratio (GBA/Land SF) 0.14 Building Area Source Site Plan; Bay State Land Services, Inc.; 8/2/2018 Year Built 2019 Estimated Effective Age (Yrs.) 0 Estimated Economic Life (Yrs.) 50 Remaining Economic Life (Yrs.) 50 Number of Parking Spaces 139 Source of Parking Count Site Plan; Bay State Land Services, Inc.; 8/2/2018 Parking Type Surface Parking Spaces/1,000 SF GLA 4.03

As mentioned, approximately 38% of the rentable area is subject to LOI’s. This area includes the 12,000 square foot building to the rear of the property, and 1,200 square feet within the front left building.

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We requested, but were not provided with, a full set of building plans for the proposed construction. Our understanding of the proposed improvements is based on a review of the site plan, elevation drawings, and discussions with the developer. Our analysis assumes the improvements will be constructed to typical retail construction standards as detailed below.

Construction Details Foundation Concrete slab-on-grade foundation Structural Frame Masonry block wall Exterior Walls Brick veneer, concrete block, and stucco Windows Double glaze insulated storefront windows in aluminum frames Roof Flat rubber membrane Floors Primarily vinyl tile Walls Painted drywall, and vinyl panel Ceilings Suspended acoustic ceiling panels Lighting Recessed fluorescent and incandescent fixtures HVAC Roof-mounted HVAC units Electrical 120/480 Volt, 3 phase, 4-wire Plumbing Restroom in individual tenant spaces Elevators None Sprinklers Yes, 100% wet sprinklered

IMPROVEMENTS ANALYSIS Space Type The subject will consist of two space types summarized as follows:

Space Type Breakdown

Space Type SF Typical Retail 22,500 Rear Retail 12,000 Total 34,500

Typical Retail reflects traditional in-line retail in the three proposed buildings toward the front of the property fronting Churchville Rd. This space is designed to attract smaller in-line retailers in the 1,000 to 3,000 square foot range benefitting from the roadway. Rear Retail refers to the fourth building which is set back considerably from the roadway and is intended to accommodate a single larger tenant. The site plan referenced previously, identifies this space for daycare center use with an adjacent playground.

Quality and Condition The quality and condition of the subject is projected to be consistent to slightly above that of competing properties, considering its new construction. Overall, the market appeal of the subject will be slightly superior as compared to competing properties.

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Functional Utility The improvements are assumed to be adequately suited to their proposed use with no items of functional obsolescence. Based on our review of the site plan and elevations, there do not appear to be any significant items of functional obsolescence.

Deferred Maintenance The subject is new construction and no deferred maintenance will be present.

ADA Compliance Based on our review of the site plan and elevation drawings, we are not aware of any ADA issues. However, we are not expert in ADA matters, and further study by an appropriately qualified professional would be recommended to assess ADA compliance.

Environmental Assessment An environmental assessment report was not provided for review and environmental issues are beyond our scope of expertise. No hazardous substances were observed during our inspection of the improvements; however, we are not qualified to detect such substances. Unless otherwise stated, we assume no hazardous conditions exist on or near the subject.

Personal Property No personal property items were observed that would have any material contribution to market value.

CONCLUSION Overall, the quality, condition, and functional utility of the improvements will be above average for their location considering their new construction.

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PROPOSED IMPROVEMENTS

Campus Commons Real Estate Taxes 31

Real Estate Taxes

Real estate tax assessments are administered by the Maryland Department of Assessments and Taxation and are estimated by jurisdiction on a county basis. The property is located in Harford County. Real estate taxes in this state and this jurisdiction represent ad valorem taxes, meaning a tax applied in proportion to value. The real estate taxes for an individual property may be determined by dividing the assessed value for a property by 100, then multiplying the estimate by the composite rate. The composite rate is based on a consistent state tax rate throughout this state, in addition to one or more local taxing district rates. The assessed values are based upon the current conversion assessment rate of 100% of Assessor’s market value. Real estate taxes and assessments for the current tax year are shown in the following table.

Taxes and Assessments - 2018-2019 Assessed Value Taxes and Assessments Ad Valorem Direct Tax ID Land Improvements Total Tax Rate Taxes Assessments Total 03-373150 $142,600 $0 $142,600 1.1540% $1,646 $0 $1,646

The composite tax rate for the subject is $1.154 per $100 of assessed value. State law requires that all real property be revalued at least every three years. The subject was reviewed to determine a new market value effective January 1, 2017, for the cycle beginning July 1, 2017. The next assessment is scheduled for January 1, 2020.

We note the current assessment is reflective of land only. We anticipate the assessment to increase upon completion of the proposed improvements. To project an assessment of the subject upon completion, we analyze the assessments of competing properties in Bel Air, summarized as follows:

Tax Comparables Total Assessed Assessed No. Property Name SF Value Value/SF Total Taxes Taxes/SF 1 2219-2225 Churchville Road 27,800 $4,317,200 $155.29 $49,820 $1.79 2 220 Mountain Road 37,289 $7,335,000 $196.71 $84,646 $2.27 3 1202 Agora Drive 17,600 $2,576,200 $146.38 $29,729 $1.69 4 1403 Rock Spring Road 53,232 $6,967,400 $130.89 $80,404 $1.51

Tax liabilities from comparable properties range from $1.51 to $2.27 per square foot. On balance, we conclude to a tax liability of $2.00 per square foot upon completion and stabilization. Ultimately, the assessment has minimal impact on our analysis based on the subject’s triple net leases in which taxes are the tenants’ responsibility.

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TAX MAP

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ZONING MAP

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FLOOD MAP

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