I a MARKET RENT STUDY Upper Pontalba Residential Units

A MARKET RENT STUDY Upper Pontalba Residential Units

LOCATED AT

500 St. Peter Street New Orleans, Louisiana 70116

Effective Date of Market Rent Determination: January 15, 2015

FOR

Mr. Jon Smith French Market Corporation 1008 North Peters Street New Orleans, Louisiana 70116

Our File Number: 14-1870

P. M. McEnery, MAI S. Parkerson McEnery, MAI

The McEnery Company 810 Union Street, Fourth Floor New Orleans, Louisiana 70112 Phone: (504) 274-2701 Fax: (504) 274-2702

www.mceneryco.com

January 26, 2015

Mr. Jon Smith French Market Corporation 1008 North Peters Street New Orleans, Louisiana 70116

Our File Number: 14-1870

Re.: 500 St. Peter Street, New Orleans, Louisiana 70116

Dear Mr. Smith:

Pursuant to our conversation, and in accordance with our agreed upon engagement for the Fair Market Rent Study for the 50 residential units situated within the 2nd, 3rd and 4th floors of the Upper Pontabla. This report shall serve as the conveyance of our opinion of Fair Market Rent for the subject property. The body of this report contains a total of 38 numbered pages.

This market rent study conforms to the 2015 USPAP standards. It is subject to, and conditioned upon AO-28, AO-29, and SMT-9 (revised) of the Uniform Standards of Professional Appraisal Practices, 2014-2015 Edition.

The subject of this report is known as The Upper Pontalba, which was originally a collection of sixteen individual four-story row houses. Through a major interior renovation in 1935, the improvements were interconnected and the upper floors were converted into 50 individual apartments. The improvements are situated on the St. Peter side of Jackson Square in the French Quarter, with frontage along St. Peter Street, Chartres Street and Decatur Street. The ground floor of the property is divided into 14 commercial units; however, the exclusive focus of this assignment will be the 50 apartments units on the upper three floors. These units blend historic design with some distinct modern features and finishes. Each apartment has unique elements in layout and design. The 2nd floor apartments are referred with ‘B’ units, while the 3rd floor apartments are ‘C’ units and the 4th floor apartments are ‘D’ and ‘E’ units. The specific unit mix will be broken down in full detail within the body of this report.

Each of the units is separately metered and the tenants are currently responsible for their own utilities, water and cable expenses. As such, our market rental rate determinations will be based on the same gross terms in which the tenants must pay for their own utility related expenses.

Currently, six of the units are undergoing interior renovations including as fresh paint on the walls, new fixtures, new flooring, new kitchen and bathroom cabinets and updated kitchen appliances. These renovations are expected to be completed within the next two months.

Mr. Smith Page Two January 26, 2015

Our rental study concludes to individual market rent determinations for each of the 50 residential units situated within The Upper Pontalba. These rental rate determinations are based on anticipation that each of the subject units is in similar condition, as is expected upon completion of the current renovations.

It is worth noting that French Market Corporation is spending roughly $5,600,000 to perform upgrades such as replacing windows throughout the subject property, as there have been notable examples in recent years of peeling paint and water intrusion issues throughout many of the units. This work has already been in progress in various units that have required work on a case by case basis. While some of that work has already taken place, there are still a number of water intrusion issues throughout the various units and those will continue to be remedied in the future. The owners also plan to put new gutters into place and to perform updates to the common space.

Our market rental rate determinations do not take into account the upgraded condition that will result from these proposed repairs, as there is not a firm timeline in place for this project.

Leasable area determinations are based off unit layout and size breakdown which has been provided by the owners. These plans were produced by I. William Sizeler & Associates. Copies of these plans are included in the attached addenda.

These plans indicate the total leasable area to be 66,282 square feet, which is broken down into 24,584 square feet of Net Rentable Area (NRA) within the 16 units on the 2nd floor, 24,298 square feet of NRA in the 16 units on the 3rd floor and 17,400 square feet of NRA in the 18 units on the 4th floor. 40 of the units are 2 bedroom floor plans, while the other 10 units are either 1 bedroom units or efficiency units. The 2 bedroom units have an average NRA of 1,529 square feet, while the 1 bedroom/efficiency units have an average NRA of 511 square feet. The outdoor balcony spaces have not been included within these size calculations. However, the additional level of marketability associated with this amenity has been taken into account within our rental analysis.

This report includes a market rent study that analyzes current rental rates that are being generated by similar residential units within the French Quarter - in order to determine a reasonable market rental rate for each of the 50 units within the subject property.

As will be demonstrated within this report, a number of the current rental rates are presently leased at below market rates, while a few others are leased for rates that are higher than market rent. There are also several units that are generating annual rentals that are in line with reasonable market rental rates. Our market rent conclusions are not based on the current subject contract rents, but rather on the comparable data that we have researched and presented herein.

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Mr. Smith Page Two January 26, 2015

This report conforms to the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of The Appraisal Foundation; our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of stipulated result, or the occurrence of a subsequent event; the appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan; and the indication of value does not contain any personal property.

The comparable data included within this report suggests market rental rate figures that range from $1.40 per square foot to $2.00 per square foot on a monthly basis. The market rent, as concluded within this report and as averaged across the units equates to an average rent of $1.64 per square foot. These quoted rental rates assume gross rental terms with the tenants responsible for the water, cable and all utilities, as is the case with the current lease terms.

As per current FIRREA minimum appraisal standards, we HAVE completed similar assignments in this area. Based on the data and analysis contained within this report, it is our opinion that the Annual Potential Gross Income for the residential subject units based on the Market Rent Study as of January 15, 2015 is:

ONE MILLION THREE HUNDRED AND SIX THOUSAND DOLLARS ($1,306,000)

Per Annum

This is to certify that we have no interest, present or contemplated, in the subject property. My/our opinions of value are subject to the General and Special Assumptions and Limiting Conditions, Certification and Restriction upon Disclosure and Use which are stated in the body of the report.

Respectfully submitted,

______P. M. McEnery, MAI S. Parkerson McEnery, MAI Louisiana State Certified Louisiana State Certified General Real Estate Appraiser #G1102 General Real Estate Appraiser #G1526

*Unit by unit market rental rate conclusions included on Pages x, xi, 34 and 35.

Aerial View

Subject Property

Site Views

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Market Rental Rate Conclusion – Residential Rental Units

Unit Unit Unit NRA Market Monthly Annual Address Number Type (SF) Rent PSF Market Rent Market Rent 627 Decatur B 2BR/1BA 1,385 $1.90 $2,631.50 $31,578.00 C 2BR/1BA 1,415 $1.80 $2,547.00 $30,564.00 D 2BR/1BA 1,092 $1.50 $1,638.00 $19,656.00 633 Decatur B 2BR/1BA 1,384 $1.90 $2,629.60 $31,555.20 C 2BR/1BA 1,387 $1.80 $2,496.60 $29,959.20 D 2BR/1BA 1,102 $1.50 $1,653.00 $19,836.00 502 St. Peter B 2BR/1BA 1,680 $2.00 $3,360.00 $40,320.00 C 2BR/1BA 1,716 $1.80 $3,088.80 $37,065.60 D 2BR/1BA 1,352 $1.50 $2,028.00 $24,336.00 506 St. Peter B 1BR/1BA 482 $1.70 $819.40 $9,832.80 C Eff. 467 $1.65 $770.55 $9,246.60 D Eff. 543 $1.60 $868.80 $10,425.60 508 St. Peter B 2BR/2BA 1,873 $1.65 $3,090.45 $37,085.40 C 2BR/2BA 1,620 $1.55 $2,511.00 $30,132.00 D 2BR/1BA 1,159 $1.40 $1,622.60 $19,471.20 512 St. Peter B 2BR/1BA 1,813 $1.65 $2,991.45 $35,897.40 C 2BR/2BA 1,801 $1.55 $2,791.55 $33,498.60 D 2BR/1BA 1,239 $1.40 $1,734.60 $20,815.20 516 St. Peter B 2BR/2BA 1,921 $1.65 $3,169.65 $38,035.80 C 2BR/2BA 1,904 $1.55 $2,951.20 $35,414.40 D 2BR/1BA 1,129 $1.40 $1,580.60 $18,967.20 520 St. Peter B 2BR/2BA 1,868 $1.65 $3,082.20 $36,986.40 C 2BR/2BA 1,801 $1.55 $2,791.55 $33,498.60 D Eff. 562 $1.60 $899.20 $10,790.40 E Eff. 512 $1.50 $768.00 $9,216.00 526 St. Peter B 2BR/2BA 1,871 $1.65 $3,087.15 $37,045.80 C 2BR/2BA 1,846 $1.55 $2,861.30 $34,335.60 D Eff. 562 $1.60 $899.20 $10,790.40 E Eff. 518 $1.50 $777.00 $9,324.00

Unit Unit Unit NRA Market Monthly Annual Address Number Type (SF) Rent PSF Market Rent Market Rent

530 St. Peter B 2BR/2BA 1,813 $1.65 $2,991.45 $35,897.40 C 2BR/2BA 1,846 $1.55 $2,861.30 $34,335.60 D 2BR/1BA 1,196 $1.40 $1,674.40 $20,092.80 534 St. Peter B 2BR/2BA 1,887 $1.65 $3,113.55 $37,362.60 C 2BR/2BA 1,850 $1.55 $2,867.50 $34,410.00 D 2BR/1BA 1,196 $1.40 $1,674.40 $20,092.80

538 St. Peter B 2BR/11/2BA 1,634 $1.65 $2,696.10 $32,353.20

C 2BR/11/2BA 1,620 $1.55 $2,511.00 $30,132.00 D 2BR/1BA 1,196 $1.40 $1,674.40 $20,092.80 540 St. Peter B 1BR/1BA 463 $1.70 $787.10 $9,445.20 C Eff. 500 $1.65 $825.00 $9,900.00 D Eff. 504 $1.60 $806.40 $9,676.80 544 St. Peter B 2BR/1BA 1,688 $2.00 $3,376.00 $40,512.00 C 2BR/1BA 1,636 $1.80 $2,944.80 $35,337.60 D 2BR/1BA 1,354 $1.50 $2,031.00 $24,372.00 628 Chartres B 2BR/1BA 1,384 $1.90 $2,629.60 $31,555.20 C 2BR/1BA 1,441 $1.80 $2,593.80 $31,125.60 D 2BR/1BA 1,092 $1.50 $1,638.00 $19,656.00 632 Chartres B 2BR/1BA 1,438 $1.90 $2,732.20 $32,786.40 C 2BR/1BA 1,448 $1.80 $2,606.40 $31,276.80 D 2BR/1BA 1,092 $1.50 $1,638.00 $19,656.00 TOTAL 66,282 $1.64 $108,812.35 $1,305,748.20

CERTIFICATE OF DIGITAL AUTHENTICITY

This certifies the attached document with accompanying value conclusions is an authentic duplicate of an original document that is kept on file at the offices of The McEnery Company and can be downloaded by our client from http://cmac.mceneryco.com.

This page is integral to and must be retained with the report whether in print or in electronic form.

In order to ensure that the conclusions herein are the original work of the author, the following codes have been issued. These codes can be verified by any person via phone at or online at http://cmac.mceneryco.com under the heading "Validate a Report".

Report ID: 54249 File Number: 14-1870

Document Key:

xii

CERTIFICATION

We certify that, to the best of our knowledge and belief:

 The statements of fact contained in this report are true and correct.  The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions and conclusions.  We have no present or prospective interest in the property that is the subject of this appraisal report and we have no personal interest or bias 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.  We have performed no other services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.  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 and Standards of Professional Appraisal Practice of the Appraisal Institute.  Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.  The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.  No one other than associates in this office or outside consultants as noted provided significant professional assistance in the preparation of this report.  Pat Browne III has provided significant real property appraisal assistance to the person signing this certification. A summary of this assistance may be found within the Scope of the Appraisal.  Katherine Eshleman provided significant professional assistance in the preparation of this report. A summary of this assistance may be found within the Scope of the Appraisal.  S. Parkerson McEnery, MAI, P. M. McEnery, MAI, Pat Browne III, and Katherine Eshleman made a personal inspection of the property that is the subject of this report.  As of the date of this report, S. Parkerson McEnery, MAI and P. M. McEnery, MAI have both completed the continuing education for Designated Members of the Appraisal Institute.  S. Parkerson McEnery, MAI and P. M. McEnery, MAI are licensed real estate agents. Both are active in the buying and selling of real estate.

Date Signed: January 26, 2015

______P. M. McEnery, MAI S. Parkerson McEnery, MAI Louisiana State Certified Louisiana State Certified General Real Estate Appraiser #G1102 General Real Estate Appraiser #G1526

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SCOPE OF THE MARKET RENT STUDY

This report includes a market rent study that analyzes current rental rates that are being generated by similar apartments within the French Quarter in order to determine reasonable market rental rates for the 50 residential units located in The Upper Pontalba on Jackson Square. A breakdown of the units by address, type, and size is presented below.

Address Unit Unit Type Square Feet 627 Decatur B 2BR/1BA 1,385 C 2BR/1BA 1,415 D 2BR/1BA 1,092 633 Decatur B 2BR/1BA 1,384 C 2BR/1BA 1,387 D 2BR/1BA 1,102 502 St. Peter B 2BR/1BA 1,680 C 2BR/1BA 1,716 D 2BR/1BA 1,352 506 St. Peter B 1BR/1BA 482 C Eff. 467 D Eff. 543 508 St. Peter B 2BR/2BA 1,873 C 2BR/2BA 1,620 D 2BR/1BA 1,159 512 St. Peter B 2BR/1BA 1,813 C 2BR/2BA 1,801 D 2BR/1BA 1,239 516 St. Peter B 2BR/2BA 1,921 C 2BR/2BA 1,904 D 2BR/1BA 1,129 520 St. Peter B 2BR/2BA 1,868 C 2BR/2BA 1,801 D Eff. 562 E Eff. 512 526 St. Peter B 2BR/2BA 1,871 C 2BR/2BA 1,846 D Eff. 562 E Eff. 518 530 St. Peter B 2BR/2BA 1,813 C 2BR/2BA 1,846 D 2BR/1BA 1,196 534 St. Peter B 2BR/2BA 1,887 C 2BR/2BA 1,850 D 2BR/1BA 1,196 538 St. Peter B 2BR/11/2BA 1,634 C 2BR/11/2BA 1,620 D 2BR/1BA 1,196

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Address Unit Unit Type Square Feet 540 St. Peter B 1BR/1BA 463 C Eff. 500 D Eff. 504 544 St. Peter B 2BR/1BA 1,688 C 2BR/1BA 1,636 D 2BR/1BA 1,354 628 Chartres B 2BR/1BA 1,384 C 2BR/1BA 1,441 D 2BR/1BA 1,092 632 Chartres B 2BR/1BA 1,438 C 2BR/1BA 1,448 D 2BR/1BA 1,092 TOTAL 66,282

Building plans are included in attached addenda.

Client: The client is the French Market Corporation as represented by Mr. Jon Smith.

Intended User: The intended user is the French Market Corporation as represented by Mr. Jon Smith.

Intended Use: The use of the appraisal is for the specific use(s) as determined by the client to assist in asset management. This report is not intended for use by unrelated third parties. [Statement on Appraisal Standards No. 9 (SMT-9), USPAP 2014]

Purpose of the Assignment: The purpose of this appraisal is to determine the fair market rent for the subject of this report.

Within the Scope of this assignment, Market Rent is defined as:

"The most probable price per month that should be paid for a property in a competitive and open market under all conditions requisite to a fair lease, the lessee and lessor each acting prudently and knowledgeably, and assuming the price per month 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:

(1) Lessee and lessor are typically motivated; (2) Both parties are well informed or well advised, and acting in what they consider their own best interests; (3) A reasonable time is allowed for exposure in the open market;

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(4) Payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) The lease represents the normal consideration for the property leased unaffected by special or creative financing or sales concessions granted by anyone associated with the lease.

The opinion of Market Rent expressed in this report is conditioned on the Statement of Certification and the Statement of Assumptions and Limiting Conditions that are included within the report.

Dates of the Assignment: Our primary visit to the subject property was on December 18, 2014. More recently, we performed a follow up inspection of the property on January 15, 2015. This is the effective date of the appraisal. The date of the appraisal report is January 26, 2015.

Scope of the Work Performed: The scope of the work performed is referenced in the Letter of Engagement which is included in the Addendum section of this report.

 P. M. McEnery, MAI, S. Parkerson McEnery, MAI, Pat Browne III and Katherine Eshleman made our primary inspection of the property on December 18, 2014. More recently, S. Parkerson McEnery, MAI and Pat Browne III performed a follow-up inspection on January 15, 2014. Interior as well as exterior examinations were performed.

 Data has been gathered and analyzed by the undersigned appraisers. Comparable rent data and operating data has been analyzed; and

 The scope is further augmented by the applicable approaches to value employed in this assignment, the analyses resulting in value conclusion(s) rendered which is dependent upon all known information about the subject property and marketing conditions and available market data.

Report Option: Our market rent study is developed and reported in accordance with the Uniform Standards of Professional Appraisal Practice. As such, although it does present a detailed discussion of the data, reasoning resulting in our opinions of value, it does not go into detail with respect to supporting levels of analysis, i. e. a market area analysis, and a highest and best use analysis. All supporting analyses, documentation, etc, concerning the data, reasoning, and analyses are retained in our electronic work files.

Our report conveys value conclusions as rendered through the selected approaches. The processes employed are based on the information contained within our work file. The use of this report is limited as follows: (a) only to the client named herein and (b) for the specific use stated.

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Market Area: The subject property is situated within the New Orleans' Vieux Carre, or “old square”, which is the site of the original French colonial settlement, Nouvelle Orleans (1718), historically defined by the boundaries of the Mississippi River, Canal and Rampart Streets, and Esplanade Avenue. The Vieux Carre, since 1936, has been under the auspices of the Vieux Carre Commission, a city agency enabled by state legislation. The local historic district, however, only extends from the Mississippi River to Rampart Street and from the downriver side of Iberville Street to Esplanade Avenue. The more complete area is listed on the National Register.

The architectural fabric of the historic district represents no single style but includes examples from the French colonial period to the present day. Its high architectural quality, especially considered as an assemblage, is generally acknowledged. Within an area of some ninety blocks, the district incorporates over 2,000 buildings, 15 of which are considered of national architectural and historical significance and approximately 180 of which are deemed of "major architectural and historical significance." The majority of the district's buildings, from early Creole cottages to late Victorian shotgun cottages are rated of "local architectural or historical significance." Most notably, this old colonial site functions today not only as a major mecca for tourists, but also as a city within a city and as adjacent to New Orleans' Central Business District.

The Vieux Carre developed under Spanish and American, as well as French rule. In fact, because of several disastrous fires in the late 1700's, only a handful of buildings of French colonial origin remain.

The French influence in the Vieux Carre, however, remained tenacious and continues even today to give the area its special, continental European flavor. Thus, it is popularly dubbed the "French Quarter." French colonial New Orleans ranks as one of America's first planned cities. The military engineers, who designed the layout of the colonial outpost, used a baroque form of city planning, one that remains visible today in the Quarter's simple gridiron pattern of rectilinear squares separated by narrow, axially arranged streets.

A central focus of a public square (Place d'Armes), flanked by necessary parochial and government buildings, figured prominently on these early plans, and today still dominates the Vieux Carre. The early architecture in this frontier town closely followed the dictates of official French forms. Eventually, however, the colonial builders adjusted the traditional forms and construction methods to local climatic and topographical conditions, and there evolved a recognizable French colonial style in New Orleans, similar to that found in Canada and the West Indies. Madame John's Legacy (632 Dumaine) remains today to exemplify the French colonial style, as developed in New Orleans.

Although France ceded New Orleans to Spain in 1762-63, Gallic influences persisted in the Louisiana colony. The devastating fires of 1788 and 1794, however, practically leveled the old French capital and, in effect, left an architectural tabula rasa, which would be filled primarily during the American era. In 1803, 34 years of easy-going Spanish rule ended abruptly, leaving a city, which remained essentially French in population, language, culture, religion and customs.

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During the early 1800's began the gradual transition from a French city to an American city, as well as from an intimate, walking town to a complex city. Despite the unprecedented numbers of Americans who flowed into the city, the Vieux Carre stayed very French. The Creole population held fast to their traditions in the original city while the Americans settled in newer sections of town, upriver from Canal Street. The buildings constructed in the Vieux Carre during the post-colonial period remained essentially French in both plan and style.

Eventually, however, the expansionism of the 1830's reached even into the Vieux Carre. Rows of red brick townhouses appeared, presaging the intensifying American influences. During this transitional period, American stylistic details were applied to buildings that still used the traditional French arrangement of interior space. The most spectacular ante-bellum changes occurred in and around the Place d'Armes.

A number of improvements transformed this highly visible, symbolic public area from haphazardly developed, rather provincial space into an integrated, sophisticated hub of urban activity. The driving force behind the development of the square was the willful, imperious Baroness Pontalba, who built the two block-long rows of sixteen red brick townhouses, still flanking the square. The subject property consists of the ground floor of the Upper Pontalba Building, which is the row of mixed use townhouses on the Canal Street side of Jackson Square. These two buildings can be seen in the satellite imagery below.

Upper Lower Pontalba Pontalba

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Lower Pontalba

Upper Pontalba

The planning for these mirrored buildings took over ten years, as the Baroness was very particular and she fired numerous architects and consultants, used their plans as a base and then made her own alterations. Eventually, the construction of these buildings commenced in 1849 and was completed in 1851. The ground floors of these buildings presently houses restaurants and retail shops in the front, rear storage/bathroom and courtyard areas, as well as private passageways to the residential apartment units on the second and third floors. These two buildings serve as a very attractive “outdoor mall” and town center of sorts with covered walkways that flank the pedestrian streets of St. Peter Street and St. Ann Street on either side of Jackson Square. Today, the Upper Pontalba Building is owned by the City of New Orleans, while the Lower Pontalba Building is owned by the State of Louisiana.

Later, the civil war checked the prosperity of ante-bellum New Orleans, hitting the French Quarter especially hard. Italian immigrants crowded into the quarter, and the Creole's self-sustained city disintegrated. By 1900, apathy toward the Vieux Carré was pervasive.

Soon after World War I, however, signs of a rekindling interest in the area appeared. Artists, writers and other intellectuals, who settled in the quarter's neighborhoods during the 1920's, focused attention on the area. The push for the legal mechanisms to protect the quarter came out of this mixture of Bohemianism' and fashionableness that evolved during the 1920's.

While a new, national interest in preservation emerged during the early depression years, locally the battle to preserve the quarter gained momentum. Finally, in 1936 the efforts of Louisiana's early preservationists succeeded with the creation of the Vieux Carre Commission.

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Following Hurricane Katrina, there was concern in the French Quarter relative to the viability of the local businesses in the aftermath of Hurricane Katrina. At the time, some believed that the French Quarter would approach a situation in which supply outweighed demand. The resurgence in the recovery that has been on-going in New Orleans has undoubtedly propped up the Quarter from any such situation. The local tourism market is now booming with recent events like the 2012 BCS National Championship, the 2012 Final Four, the 2013 Super Bowl, the 2014 NBA All Star game and the robust film industry all being recent bright spots of late, and moving forward optimism is generally strong.

As just mentioned, the local film industry is really benefiting the city economy. State level tax credit structures have been cause for a marked increase in movies being filmed within the State of Louisiana. This industry has continued to make their presence known within the state over the past few years, as there are numerous tax benefits for filming within the state. This is specifically beneficial for lodging properties, as crews and workers need places to stay. With a continued rise in tourism, as well as movies being filmed within the state, lodging properties and restaurant/retail operations are expected to reap the benefits.

The French Quarter is expected to remain one of the more highly desirable locations to own property in the region. As such, there are many market participants who are willing to pay above market prices for French Quarter real estate and treat said properties as “Trophy Real Estate”. As a result the numerous possibilities associated with the French Quarter’s future, real estate professionals remain cautiously optimistic about the future of this area.

Accessibility: The subject neighborhood is readily accessible from Canal Street, North Rampart Street and Esplanade Avenue, the primary arteries which immediately bound the subject area.

Pattern of Land Uses: Many of the buildings date back to the late eighteenth and early nineteenth centuries. Development of the French Quarter is controlled by the Vieux Carre' Commission, which approves all building permits with respect to exterior architectural design and materials. The purpose of the Commission is to preserve the historical and architectural integrity of the Quarter. Any proposed exterior improvements, however small, must have this commission's approval. In recent years the City of New Orleans has declared as a long term goal the re-establishment of the residential character of the Quarter. A growing trend to renovate existing properties for retail, office, and residential uses has been a healthy force for change.

Demographic Data: On the following pages, we present a pocket analysis of the subject’s market area with regard to demographics, income statistics and other pertinent data within 5, 10, and 15 minute drive times from the subject. The demographic data contained on the following pages is shown as excerpted from a report generated using the Site to do Business (www.STDBonline.com).

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Market Area Delineation: The subject property’s market area has been delineated as a fifteen minute drive time area that encompasses the majority of Orleans Parish, much of the Eastbank and Westbank of Jefferson Parish, and some of St. Bernard Parish. As residential units, we consider a fifteen minute drive time to be an applicable delineated market area. The neighborhood surrounding the subject property is bounded by I-10 to the north, Canal Street to the south, Mississippi River to the east, and the CBD to the west.

Within a five minute drive time of the subject property, the population increased 1.46% annually from 6,327 in 2010 to 6,729 in 2014. It is projected to increase 2.12% annually to 7,473 by 2019. Within a fifteen minute drive time of the subject property, the population increased 2.71% annually from 227,903 in 2010 to 255,366 in 2014. It is projected to increase another 2.84% annually to 293,807 by 2019. The population in the subject’s immediate area and greater market area is experiencing a stage of modest growth.

Within a five minute drive time of the subject property, the average household income was $73,169 in 2014. It is projected to increase 3.44% annually to $86,641 by 2019. Within a fifteen minute drive time of the subject property, the average household income was $54,296 in 2014. It is projected to increase 2.38% annually to $61,064 by 2019. The average household income in the subject’s immediate area and the subject’s greater market area is experiencing a stage of growth. It is behind the national average of $72,809 in both the subject’s greater market area and immediate area.

Market Sale and Rental Data: It is very difficult to determine land values in the subject neighborhood as the neighborhood has been overdeveloped for over 150 years in most cases. Pertaining to land values, the real question to ask is, how high? There is such a shortage of land in the area that a ready, able, and willing buyer would pay a significant amount of money for a parcel of vacant land in the French Quarter.

Sales prices for improved properties in the French Quarter are typically high dollar figures, ranging from a low of $95.00 per square foot to upwards of $1,000 per square foot for very well located smaller properties. Rental rates for commercial space range from a low of $20.00 per square foot for less marketable locations to now well over $100.00 per square foot for properties situated on Bourbon Street.

The pertinent market data for this analysis is directly to residential rental rates. As will be demonstrated within this report, monthly rental rates for apartment units that are most similar to the subject property range from $1.25 per square foot to upwards of $2.25 per square foot. This is all dependent on the size, condition and location, as well as the terms of the lease.

It should be noted that there are several examples of tenants paying notably higher rental rates in the range from $2.25 per square foot to over $3.25 per square foot for supremely appointed units that include luxury amenities such as elevators, rooftop decks, pools and off-street parking. However, those high-end units have not been included as comparable rentals within this analysis, as they would skew the range of applicable rental rates for the subject units.

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Property Productivity: Often referred to as the “oldest apartment building in the U.S.” the residential apartments offer a unique living experience. The Upper Pontalba Building is one of two nearly identical structures that were built in 1851 by the Baroness Pontalba as part of the town square that also included St. Louis Cathedral and the Cabildo. The upper floors were originally constructed as row houses and were turned into apartment units during the 1935 renovation. In 1995, an additional renovation was completed to upgrade the building’s mechanical system. Also a new roof was installed in 2000. Great care was taken during these renovations to preserve the integrity of the building’s unique interior and exterior appearance. The Upper and Lower Pontalba Buildings were declared a National Historic Landmark in 1974.

The subject’s location along the Canal Street side of Jackson Square, with additional frontage along Decatur Street and Chartres Street, is the most marketable aspect of the property. This immediate part of the French Quarter is one of most celebrated and iconic tourist attractions in the area. Additionally, Café du Monde and the French Quarter Market are situated only a couple blocks east of the subject, while the infamous Bourbon Street is located two blocks north of the property. Overall, the subject property is nestled in a very vibrant and bustling section of the French Quarter, of which many consider one of the most highly sought after neighborhoods in the United States. The consistently high volume of traffic translates to increased ground floor retail sales, which equates to some of the highest commercial rental rates in the city. Due to this excellent location and the iconic nature of the building, vacancies are rarely seen, if ever, as there is a waiting list of over 75 potential tenants.

The specific marketability of each of the three upper floors contained within the subject property is apparent when one studies the manner in which new units are offered to those on the waiting list. More specifically, when a tenant moves out of a second or third floor unit, the other tenants who have expressed interest in upgrading to the second or third floor are given the first option to do so. If none of the current tenants want to upgrade to the recently vacated unit, the individuals on the waiting list are then offered the option to move into a vacant unit. The majority of the tenants desire a second floor unit the most, with the third floor units being the next most appealing. Most of the fourth floor tenants simply lease those units as a means to an end with the hopes of eventually being able to move to the third floor or even the second floor in a number of years.

Due to the varying level of marketability associated with the units throughout the subject units, we will rank the unit types within our market rent study in order to demonstrate the anticipated market rental rates that could be achieved by each unit.

The size of each of the units has been taken into account based on the concept of Economies of Scale. As such, the smaller units have generally been given higher market rental rate conclusions. However, the condition and the relative finishes and amenities of these units are also taken into account. The specific position of each unit within the building is another factor that we have accounted for in our reconciliation of market rental rate determinations.

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Overall, the subject units are broadly very marketable spaces within this community. However, the rather dated condition of the property, as well as the lack of elevator service and off-street parking will continue to be issues that do not allow the subject units to generate rental rates as high as those which are paid for the high-end French Quarter units that include more luxurious amenities.

Supply and Demand Analysis: For purposes of analyzing existing supply and recent demand of leasable residential units in the French Quarter, we have conducted a search for this property type on the New Orleans Multiple Listing Service (MLS). Based on our search criteria, we have found 40 residential units that are currently available for lease within the French Quarter. Using the same criteria, we have conducted a search for recently leased residential units and found 160 leased units within the past year. We are also aware of numerous other units that have been listed and leased through different listing services or leased through the owner directly without being listed by an agent.

Interaction of Supply and Demand: The inference that can be drawn from the analysis above is that the demand for residential space within the French Quarter significantly outweighs the supply.

Conclusion:

 The French Quarter location of the subject property is highly marketable, especially considering the position of the subject adjacent to Jackson Square.

 The older condition of the units, as well as the lack of elevator service or off-street parking limits the ceiling of the rental rates that can be achieved by the subject units, as the high-end rental rates are tied to more luxurious units that include additional amenities.

 In terms of specific unit marketability, the ‘B’ units are the most desirable and the ‘D’ and ‘E’ units are the least desirable, with the ‘C’ units falling somewhere in between. However, economies of scale dictate that the smaller size of the ‘D’ and ‘E’ units will still allow for a relatively similar market rental rate to be applied, albeit slight lower.

 The high level of demand for residential units within the French Quarter, as well as the waiting list that is currently in place for the subject units allows for little to no risk associated with vacancy.

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MARKET RENT STUDY

This market rent study will include the standard analysis that would be performed under a typical Income Approach of an appraisal report in order to determine the potential gross income of a property. This is accomplished through an intense examination and comparison with comparable rental properties in the immediate French Quarter market. We have researched rental figures of comparable rental rates in the subject’s market which will be used in order to determine individual market rental rates for each of the subject units.

Our market data has been broken down into two groups. The first collection of rental data is comprised of six comparables with two bedrooms each, as well as a three bedroom unit. The second set of data is based on rental rates that are generated by one bedroom/efficiency units. This comparable rental data includes photographs of each comparable, as well as a location map and a rental grid, which can be found on the following pages.

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Comparable Two Bedroom Residential Rental Number 1

ADDRESS: 322 Royal Street, New Orleans, Louisiana 70130

DESCRIPTION OF IMPROVEMENTS: This is a 1,100 square foot apartment unit within a three-story mixed use building. This 2 bedroom, 1 bathroom third floor walk-up unit includes a balcony overlooking Royal Street. The condition of the interior is average to good with hardwood floors and somewhat dated appliances.

This is a gross lease which was signed in 2014. The landlord pays for the water expenses and the tenant is responsible for gas and electricity. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 1,100 $1,650 $19,800 $1.50

SURVEY DATE: 2014

CONFIRMATION: Leasing Agent, Wayne Wilkison (504) 430-7630

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Comparable Two Bedroom Residential Rental Number 2

ADDRESS: 518 Conti Street, New Orleans, Louisiana 70130

DESCRIPTION OF IMPROVEMENTS: This is a 2,200 square foot apartment unit within a four-story mixed use building. This 2 bedroom, 2 ½ bathroom walk-up unit comprises the second floor, as well as a third floor loft area. The condition of the interior is average to good with exposed brick walls and somewhat dated appliances and cabinets. The building was designed and built by Gurlie and Guillot and 1835 for Baron de Pontalba.

This is a gross lease which was signed in 2014. The tenant is responsible for the payment of all utilities. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 2,200 $3,300 $39,600 $1.50

SURVEY DATE: 2014

CONFIRMATION: Leasing Agent, Patrick Knudsen (504) 858-0623

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Comparable Two Bedroom Residential Rental Number 3

ADDRESS: 525 Conti Street, New Orleans, Louisiana 70130

DESCRIPTION OF IMPROVEMENTS: This comparable consists of four individual apartments that are each 800 square feet. These 2 bedroom, 1 bathroom units are situated on the upper floors of this mixed use building and the access is via an interior staircase. These units all feature HVAC with carpeted flooring. According to the owner, the units are all in good condition however the finishes could use updating.

These spaces have all been leased for multiple years however the owner confirmed that all four spaces are currently leased for $1,600 per month. Each lease is on gross terms. The landlord incurs the sewer and water expense, while the tenants pay for electricity. Ther is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 800 $1,600 $19,200 $2.00

SURVEY DATE: 2013

VERIFICATION: Owner – David Ostreicher (504) 874-0949

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Comparable Two Bedroom Residential Rental Number 4

ADDRESS: 1112 Bourbon Street, New Orleans, Louisiana 70116

DESCRIPTION OF IMPROVEMENTS: This is a 1,100 square foot apartment unit located on the 1st and 2nd floors of a multi-family building. The unit includes two bedrooms and two bathrooms and the interior is in average condition with dated appliances.

This is a gross lease which was signed in 2014. The tenant pays for all utility expenses. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 1,100 $1,950 $23,400 $1.77

SURVEY DATE: 2014

CONFIRMATION: Leasing Agent, Tracy Talbot (504) 415-9730

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Comparable Two Bedroom Residential Rental Number 5

ADDRESS: 307 Chartres Street, New Orleans, Louisiana 70130

DESCRIPTION OF IMPROVEMENTS: This is a 1,200 square foot apartment unit located on the 2nd and 3rd floors of a mixed use building. This recently renovated two-story, walk-up, 2 bedroom, 1 bathroom unit features a balcony on the 2nd floor as well as hardwood floors and updated appliances. The condition of the interior is good.

This is a gross lease which was signed in 2013. The tenant pays for all utility expenses. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 1,200 $1,795 $21,540 $1.50

SURVEY DATE: 2013

CONFIRMATION: Leasing Agent, Tom Havrilla (504) 577-7779

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Comparable Two Bedroom Residential Rental Number 6

ADDRESS: 1103 Royal Street, New Orleans, Louisiana 70116

DESCRIPTION OF IMPROVEMENTS: This is a 1,000 square foot apartment unit that is located in the rear with a private balcony which opens up to a courtyard. This 2 bedroom, 2 ½ bathroom walk-up unit includes space on the first and second floors with an interior spiral staircase. The condition of the interior is average to good with tile and hardwood floors and somewhat dated appliances and cabinets.

This is a gross lease which was signed in 2015. The landlord covers the water expense and the tenant is responsible for the payment of gas and electricity. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 1,000 $2,000 $24,000 $2.00

SURVEY DATE: 2015

CONFIRMATION: Leasing Agent, Mary Bolner (504) 416-7363

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Comparable Three Bedroom Residential Rental ‘A’

ADDRESS: 734 Ursulines Avenue, New Orleans, Louisiana 70116

DESCRIPTION OF IMPROVEMENTS: This is a 1,340 square foot three bedroom, two bathroom, walk-up apartment on the second floor that features hardwood floors throughout and new appliances. The unit includes a private balcony. This unit is reclaimed attic space that was nicely renovated into an attractive apartment and the overall condition is good.

This is a gross lease which was signed in 2014. The tenant is responsible for the payment of all utilities. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 1,340 $2,600 $31,200 $1.94

VERIFICATION: Leasing Agent, Patrick Tucker (504) 913-1032

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Comparable Residential Rental Map ‘A’

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Comparable Residential Rental Grid ‘A’

Rental # Subject 1 2 3 4 5 6 A' Upper 322 518 525 1112 307 1103 734 Address Pontalba Royal Conti Conti Bourbon Chartres Royal Ursulines Terms Gross Gross Gross Gross Gross Gross Gross Gross Annual Rent N/A $19,800 $39,600 $19,200 $23,400 $21,540 $24,000 $31,200 Monthly Rent N/A $1,650 $3,300 $1,600 $1,950 $1,795 $2,000 $2,600 NRA (SF) 1,529 (Avg) 1,100 2,200 800 1,100 1,200 1,000 1,340 Floor 2nd & 3rd 3rd 2nd & 3rd 2nd & 3rd 1st & 2nd 2nd & 3rd 1st & 2nd 2nd Condition Good Average/Good Average/Good Good Average Good Good Good Bedroom Count 2 2 2 2 2 2 2 3 Bathroom Count Varies 1.0 2.5 1.0 2.0 1.0 2.5 2.0 Private Balcony Yes Yes No No No Yes Yes Yes Elevator No No No No No No No No Furnished No No No No No No No No Parking No No No No No No No No Monthly Rent per SF N/A $1.50 $1.50 $2.00 $1.77 $1.50 $2.00 $1.94

Unadjusted Price per SF Mean $1.74 Median $1.77 St. Dev. $0.24

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Comparable One Bedroom Residential Rental Number 1

ADDRESS: 710 Orleans Street, New Orleans, Louisiana 70116

DESCRIPTION OF IMPROVEMENTS: This is a 600 square foot apartment unit within a four-story mixed use building. This 4th floor, walk-up 1 bedroom, 1 bathroom unit was recently renovated and it includes hardwood floors and new kitchen appliances. The condition of the interior is good.

This is a gross lease which was signed in 2014. The landlord pays for the water expense, while the tenant is responsible for the payment of electricity and gas. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 600 $995 $11,940 $1.66

SURVEY DATE: 2014

CONFIRMATION: Leasing Agent, Steve Richards (504) 258-1800

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Comparable One Bedroom Residential Rental Number 2

ADDRESS: 710 Royal Street, New Orleans, Louisiana 70116

DESCRIPTION OF IMPROVEMENTS: This is a 500 square foot apartment unit within a three-story mixed use building. This 3rd floor, walk-up, 1 bedroom, 1 bathroom unit features hardwood floors, exposed brick walls and a small loft space. The condition of the interior is average to good.

This is a gross lease which was signed in 2014. The landlord pays for all utility expenses. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 500 $995 $11,940 $1.99

SURVEY DATE: 2014

CONFIRMATION: Leasing Agent, Steve Richards (504) 258-1800

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Comparable One Bedroom Residential Rental Number 3

ADDRESS: 310 N. Rampart Street, New Orleans, Louisiana 70112

DESCRIPTION OF IMPROVEMENTS: This is a 600 square foot unit that has one bedroom and one bathroom on the third floor of this building. The space is in good condition. The tenants also have the right to use a common small rooftop deck area.

This is a gross lease which was signed in 2014. The landlord pays for water expenses and the tenant is responsible for gas and electricity. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 600 $1,150 $13,800 $1.92

SURVEY DATE: 2014

VERIFICATION: Leasing Agent, Bryan Francher (504) 891-6400

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Comparable One Bedroom Residential Rental Number 4

ADDRESS: 307 Chartres Street, New Orleans, Louisiana 70130

DESCRIPTION OF IMPROVEMENTS: This is a 600 square foot apartment unit located towards the rear of a three-story mixed use building. This recently renovated 2nd floor, walk-up, 1 bedroom, 1 bathroom unit features hardwood floors and updated appliances. The condition of the interior is good.

This is a gross lease which was signed in 2015. The tenant pays for all utility expenses. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 600 $1,250 $15,000 $2.08

SURVEY DATE: 2015

CONFIRMATION: Leasing Agent, Tom Havrilla (504) 577-7779

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Comparable One Bedroom Residential Rental Number 5

ADDRESS: 528 N. Rampart Street, New Orleans, Louisiana 70112

DESCRIPTION OF IMPROVEMENTS: This is a 635 square foot unit that has one bedroom and one bathroom on the second floor of this building. The space is in average to good condition, but it does include furniture.

This is a gross lease which was signed in 2014. The tenant pays for all utility expenses. There is NO PARKING included.

ECONOMIC DATA:

Size (SF) Monthly Rent Annual Rent Rental Rate 635 $1,195 $14,340 $1.88

SURVEY DATE: 2014

VERIFICATION: Leasing Agent, Maurice Guillot (504) 736-0544

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Comparable Residential Rental Map ‘B’

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Comparable Residential Rental Grid ‘B’

Rental # Subject 1 2 3 4 5 Upper 710 710 310 N. 307 528 N. Address Pontalba Orleans Royal Rampart Chartres Rampart Terms Gross Gross Gross Gross Gross Gross Annual Rent N/A $11,940 $11,940 $13,800 $15,000 $14,340 Monthly Rent N/A $995 $995 $1,150 $1,250 $1,195 NRA (SF) 511 600 500 600 600 635 Floor 2nd, 3rd & 4th 4th 3rd 3rd 2nd 2nd Condition Good Good Average/Good Good Good Avg/Good Bedroom Count 1/Efficiency 1 1 1 1 1 Bathroom Count Varies 1.0 1.0 1.0 1.0 1.0 Private Balcony Varies No No No No No Elevator No No No No No No Furnished No No No No No Yes Parking No No No No No No Monthly Rent per SF $1.66 $1.99 $1.92 $2.08 $1.88

Unadjusted Price per SF Mean $1.91 Median $1.92 St. Dev. $0.16

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Discussion of Comparable Data and Potential Gross Income Conclusion: The selected rentals are reflective of rental terms for comparable residential French Quarter properties located within the immediate market area of the subject property. As can be seen, we have included two separate sets of comparable data for the units in order to demonstrate the varying rental rates that are paid for larger two bedroom units versus smaller one bedroom units.

These comparables are reflective of varying sizes and conditions, as the size and condition of the subject units are somewhat different from unit to unit. Despite those inevitable differences, the comparables that we have selected are all reflective of units that do not include parking or elevator service, which allows for a true “apples to apples” comparison. As was mentioned earlier, many of the units in the French Quarter that do include elevator access, and/or parking/furniture, are drawing very high rental rates. As such, those units were not included within this analysis, as they would provide misleading high-end rental rates that are not truly applicable for the subject units. Taking this into consideration, the comparable data that is included within this report is the most reliable data available for a property such as the subject.

Within Comparable Rental Grid ‘A’, the unadjusted data ranges from a low side indicator of $1.50 per square foot to a high side of $2.00 per square foot. The mean of this range is $1.74 per square foot and the median is $1.77 per square foot.

On the other hand, Comparable Rental Grid ‘B’ is reflective of a range with a low side of $1.66 per square foot and a high side of $2.08 per square foot. The mean of this range is $1.91 per square foot, while the median is $1.92 per square foot.

In examining the comparable data and comparing this information to the different units within the subject property, a variety of market rental rates has been concluded for the subject property based on the size, condition, amenities and specific location of each unit within the building.

As was shown by the priority ranking system in place for new tenants, the second floor units are the most marketable. The 2nd floor position of those units is highly desirable, as are the large balconies and the high ceilings. However, the larger size of most of the most of the second floor units prevents those units from commanding a significantly higher rental rate than the other units due to economies of scale. Nevertheless, the second floor units are the most marketable.

The third floor units are the next most appealing within the building due to the smaller balconies and the additional flight of stairs that must be climbed in order to gain access.

Lastly, the fourth floor units are the least desirable because of the difficultly associated with walking up to the fourth floor, as well as the lack of balconies.

The fourth floor units are smaller than the majority of the second and third floor units and thus, the rental rates will not be discounted quite as heavily on a price per square foot basis due to economies of scale. Also, the smaller size of the efficiency units will be taken into account when applying the market rental rates, as the comparable data in Grid B demonstrates that economies of scale do play a part in the assignment of rental rates within the French Quarter.

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In terms of the specific location of each unit with the building, the most marketable units are the three units at 502 St. Peter Street and the three units at 544 St. Peter Street, as those are the positioned on the Decatur Street / St. Peter Street corner and the St. Peter Street / Chartres Street corner, respectively. The views that can be seen from those six units are breathtaking and are “uniquely New Orleans”.

The next most marketable location within the subject property are the six units that front on Decatur Street (627 – 633 Decatur) and the six units which front on Chartres Street (628-632 Chartres).

The remaining 32 units which are positioned toward the middle, with views of St. Peter Street, still have attractive views. However, they are broadly less appealing than the 18 units which have previously been discussed. It should also be mentioned that the two ‘E’ Units are the least desirable in terms of location, as each of positioned towards the back of the building and the view looks directly at the rear of the adjacent buildings.

Our highest assigned market rental rate is a $2.00 per square foot gross rental call for 502 St. Peter Unit ‘B’ and for 544 St. Peter Unit ‘B’, due to the second floor corner locations. This rental rate is towards the high end of the range of comparable data. On the other hand, our lowest assigned market rental rate is $1.40 per square foot, which has been assigned to a number of the larger ‘D’ units due to the 4th floor position, as well as the size of those units. Since it is rather unusual to find units as large as those located on the 4th floor of building in the French Quarter with no elevator, our assigned market rental rate is just slightly below the low end of our comparable data range. This is reasonable given the difficulty with climbing the narrow staircases to the 4th floor and the smaller number of tenants interested in that unit type.

Our gross market rental rate conclusions for each of the subject units are listed on the following page.

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Market Rental Rate Conclusions – 50 Residential Units

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Unit Unit Unit NRA Market Monthly Annual Address Number Type (SF) Rent PSF Market Rent Market Rent 540 St. Peter B 1BR/1BA 463 $1.70 $787.10 $9,445.20 C Eff. 500 $1.65 $825.00 $9,900.00 D Eff. 504 $1.60 $806.40 $9,676.80 544 St. Peter B 2BR/1BA 1,688 $2.00 $3,376.00 $40,512.00 C 2BR/1BA 1,636 $1.80 $2,944.80 $35,337.60 D 2BR/1BA 1,354 $1.50 $2,031.00 $24,372.00 628 Chartres B 2BR/1BA 1,384 $1.90 $2,629.60 $31,555.20 C 2BR/1BA 1,441 $1.80 $2,593.80 $31,125.60 D 2BR/1BA 1,092 $1.50 $1,638.00 $19,656.00 632 Chartres B 2BR/1BA 1,438 $1.90 $2,732.20 $32,786.40 C 2BR/1BA 1,448 $1.80 $2,606.40 $31,276.80 D 2BR/1BA 1,092 $1.50 $1,638.00 $19,656.00 TOTAL 66,282 $1.64 $108,812.35 $1,305,748.20

The potential gross income based on our determined market rental rates equates to $108,812 per month. This is inclusive of the application of a monthly income stream of $2,991.45 to the 1,813 square foot unit at 530 St. Peter ‘B’, which has historically been utilized by the City of New Orleans for official business.

When this monthly market PGI of $108,812 is applied to the 66,282 square feet of NRA, the average rental rate equates to $1.64 per square foot. This rental rate is slightly lower than the adjusted mean and median figures seen in the comparable data grids; however, this is reasonable given the older condition and the larger size of the subject units, as well as difficulty finding tenants willing to lease 3rd and 4th floor walk-up space.

These market rental rate conclusions are slightly higher than the average contract rental rates for the subject units, as the current monthly PGI is $94,889, which does not include a monthly rental figure on the unit at 530 St. Peter ‘B’. When that 1,813 square foot unit is taken out of the equation and the current contract PGI of $94,889 is applied to the 64,469 square feet of remaining NRA, the average contract rental rate equates to $1.47 per square foot. This represents an average increase of 11.57% over the current rental rates being generated by the subject units, which is reasonable given the fact that rental rates for similar units have increased gradually over the past few years.

In order to more clearly demonstrate the difference between the current contract rental rates and the determined market rental rates, we have created a grid which can be seen on the following page.

THE MCENERY COMPANY REAL ESTATE APPRAISAL, BROKERAGE AND CONSULTING

Contract Rent & Market Rent Breakdown

Unit Unit Unit NRA Contract Contract Market Market Differential Address Number Type (SF) Rent Rent PSF Rent Rent PSF in Rent PSF 627 Decatur B 2BR/1BA 1,385 $2,393.00 $1.73 $2,631.50 $1.90 $0.17 C 2BR/1BA 1,415 $2,547.00 $1.80 $2,547.00 $1.80 $0.00 D 2BR/1BA 1,092 $1,565.00 $1.43 $1,638.00 $1.50 $0.07 633 Decatur B 2BR/1BA 1,384 $2,491.00 $1.80 $2,629.60 $1.90 $0.10 C 2BR/1BA 1,387 $1,338.00 $0.96 $2,496.60 $1.80 $0.84 D 2BR/1BA 1,102 $1,375.00 $1.25 $1,653.00 $1.50 $0.25 502 St. Peter B 2BR/1BA 1,680 $2,688.00 $1.60 $3,360.00 $2.00 $0.40 C 2BR/1BA 1,716 $2,574.00 $1.50 $3,088.80 $1.80 $0.30 D 2BR/1BA 1,352 $1,315.00 $0.97 $2,028.00 $1.50 $0.53 506 St. Peter B 1BR/1BA 482 $516.00 $1.07 $819.40 $1.70 $0.63 C Eff. 467 $1,120.00 $2.40 $770.55 $1.65 ‐$0.75 D Eff. 543 $700.00 $1.29 $868.80 $1.60 $0.31 508 St. Peter B 2BR/2BA 1,873 $2,904.00 $1.55 $3,090.45 $1.65 $0.10 C 2BR/2BA 1,620 $2,712.00 $1.67 $2,511.00 $1.55 ‐$0.12 D 2BR/1BA 1,159 $1,338.00 $1.15 $1,622.60 $1.40 $0.25 512 St. Peter B 2BR/1BA 1,813 $2,900.00 $1.60 $2,991.45 $1.65 $0.05 C 2BR/2BA 1,801 $2,611.00 $1.45 $2,791.55 $1.55 $0.10 D 2BR/1BA 1,239 $1,368.00 $1.10 $1,734.60 $1.40 $0.30 516 St. Peter B 2BR/2BA 1,921 $2,977.00 $1.55 $3,169.65 $1.65 $0.10 C 2BR/2BA 1,904 $2,760.00 $1.45 $2,951.20 $1.55 $0.10 D 2BR/1BA 1,129 $1,314.00 $1.16 $1,580.60 $1.40 $0.24 520 St. Peter B 2BR/2BA 1,868 $2,895.00 $1.55 $3,082.20 $1.65 $0.10 C 2BR/2BA 1,801 $2,611.00 $1.45 $2,791.55 $1.55 $0.10 D Eff. 562 $888.00 $1.58 $899.20 $1.60 $0.02 E Eff. 512 $732.00 $1.43 $768.00 $1.50 $0.07 526 St. Peter B 2BR/2BA 1,871 $3,000.00 $1.60 $3,087.15 $1.65 $0.05 C 2BR/2BA 1,846 $2,675.00 $1.45 $2,861.30 $1.55 $0.10 D Eff. 562 $888.00 $1.58 $899.20 $1.60 $0.02 E Eff. 518 $725.00 $1.40 $777.00 $1.50 $0.10 530 St. Peter B 2BR/2BA 1,813 N/A N/A $2,991.45 $1.65 N/A C 2BR/2BA 1,846 $2,655.00 $1.44 $2,861.30 $1.55 $0.11 D 2BR/1BA 1,196 $1,684.00 $1.41 $1,674.40 $1.40 ‐$0.01 534 St. Peter B 2BR/2BA 1,887 $2,900.00 $1.54 $3,113.55 $1.65 $0.11 C 2BR/2BA 1,850 $2,682.00 $1.45 $2,867.50 $1.55 $0.10 D 2BR/1BA 1,196 $1,377.00 $1.15 $1,674.40 $1.40 $0.25 538 St. Peter B 2BR/11/2BA 1,634 $2,532.50 $1.55 $2,696.10 $1.65 $0.10 C 2BR/11/2BA 1,620 $2,349.00 $1.45 $2,511.00 $1.55 $0.10 D 2BR/1BA 1,196 $1,375.00 $1.15 $1,674.40 $1.40 $0.25

THE MCENERY COMPANY REAL ESTATE APPRAISAL, BROKERAGE AND CONSULTING

Unit Unit Unit NRA Contract Contract Market Market Differential Address Number Type (SF) Rent Rent PSF Rent Rent PSF in Rent PSF 540 St. Peter B 1BR/1BA 463 $1,157.00 $2.50 $787.10 $1.70 ‐$0.80 C Eff. 500 $234.00 $0.47 $825.00 $1.65 $1.18 D Eff. 504 $757.00 $1.50 $806.40 $1.60 $0.10 544 St. Peter B 2BR/1BA 1,688 $2,700.00 $1.60 $3,376.00 $2.00 $0.40 C 2BR/1BA 1,636 $2,454.00 $1.50 $2,944.80 $1.80 $0.30 D 2BR/1BA 1,354 $1,704.00 $1.26 $2,031.00 $1.50 $0.24 628 Chartres B 2BR/1BA 1,384 $2,442.00 $1.76 $2,629.60 $1.90 $0.14 C 2BR/1BA 1,441 $2,516.00 $1.75 $2,593.80 $1.80 $0.05 D 2BR/1BA 1,092 $1,285.00 $1.18 $1,638.00 $1.50 $0.32 632 Chartres B 2BR/1BA 1,438 $2,516.00 $1.75 $2,732.20 $1.90 $0.15 C 2BR/1BA 1,448 $2,389.00 $1.65 $2,606.40 $1.80 $0.15 D 2BR/1BA 1,092 $1,260.00 $1.15 $1,638.00 $1.50 $0.35 TOTAL 66,282 $94,888.50 $1.43 $108,812.35 $1.64 $0.17*

*As noted on the previous pages, the average rental rate increase of $0.17 per square foot is based on the difference between the contract rent and the market rent when the 530 St. Peter Unit ‘B’ is not factored into the size and contract rent calculation.

When the determined $108,812.35 monthly market rent based on gross terms is calculated on an annual basis, the overall potential gross income for the subject units equates to $1,305,748.20 – rounded to $1,306,000.

OPINION OF POTENTIAL GROSS INCOME (Overall): $1,306,000

THE MCENERY COMPANY REAL ESTATE APPRAISAL, BROKERAGE AND CONSULTING

FINAL MARKET RENT CONCLUSION

The opinion of market rent expressed in this report is contingent upon the Certifications and Statement of Limiting Conditions page attached to this report. In addition, this appraisal conforms to the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of The Appraisal Foundation; the compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event; The assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan. The appraised value does not include any personal property.

As per current FIRREA minimum appraisal standards, we HAVE completed previous appraisals and market rent studies of residential property similar to the subject property in this area. Based on the data and analysis contained within this report, it is our opinion that the Fee Simple per annum Potential Gross Income at Market Rent for the units within the subject property as of January 15, 2015 is:

ONE MILLION THREE HUNDRED AND SIX THOUSAND DOLLARS ($1,306,000)

– as rounded from $1,305,748-

Monthly Rent Ranges from $1.40 to $2.00 per square foot – Average of $1.64 per square foot

This is to certify that we have no interest, present or contemplated, in the appraised property. My/our opinions of value are subject to the General and Special Assumptions and Limiting Conditions, Certification and Restriction Upon Disclosure and Use which are stated in the body of the report.

Respectfully submitted,

______P. M. McEnery, MAI S. Parkerson McEnery, MAI Louisiana State Certified Louisiana State Certified General Real Estate Appraiser #G1102 General Real Estate Appraiser #G1526

THE MCENERY COMPANY REAL ESTATE APPRAISAL, BROKERAGE AND CONSULTING

ASSUMPTIONS AND LIMITING CONDITIONS

This report is subject to the following conditions and to such specifications and limiting conditions that also might be set forth in this report. These conditions affect the analyses; opinions, and value conclusions contained in this report.

1. It is assumed that the property is owned in Fee Simple Title. Fee Simple Title implies that the property is owned free and clear, unencumbered and unless otherwise specified. There are to be no leases, liens, easements, encroachments or other encumbrances on the subject property that have not been specified in this report.

2. No responsibility is assumed for matters of a legal nature affecting the appraised property or title. This appraisal assumes that the subject property is presented with a good and marketable title unless otherwise specified. The appraiser has not rendered an opinion as to the title and does not have the expertise to do so. Data on ownership and legal descriptions were obtained from sources generally considered reliable.

3. The property is appraised assuming it is to be under responsible ownership and competent management. Unless otherwise specified, the property is assumed to be available for its highest and best use.

4. Any survey contained in this report is assumed to be true and correct, and it is also assumed that there are no hidden encroachments upon the property appraised except as noted. Any sketch prepared by the appraiser and included in this report may show approximate dimensions and is included to assist the reader in visualizing the property only. The appraiser has not made a survey of the property and does not warrant any surveys or other presented plans or sketches.

5. The appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil, or other structures, which would render it more or less valuable. The appraiser assumes no responsibility for such conditions or for engineering which might be required to discover these factors. This includes the presence of unusual/extraordinary mineral deposits or subsurface rights not typically transferred with normal comparable data (i.e. valuable mineral rights associated with oil/gas production, etc., are not part of this assignment).

6. Any distributions of the valuation of the report between land and improvements apply only under the existing program of utilization. The separate valuation for land and building must not be used in conjunction with any other appraisal and are invalid if used in conjunction with any other appraisal.

7. No responsibility is assumed for changes in matters that are legal, political, social, or economic which could affect real estate values that take place after the effective date of this evaluation.

8. Information, estimates, and opinions furnished to the appraiser, and contained in the report, were obtained from sources considered reliable and believed to be true and correct. However, no responsibility for the accuracy of such information furnished to the appraiser during the appraisal process is warranted by the appraiser. The appraiser assumes no responsibility for the accuracy of such information as measurements, survey, title information, and other information furnished by comparable sales data found in courthouse records and information obtained from Realtors and other parties during any type of comparable survey.

9. This report is predicated upon the assumption that the property has reached a stabilized occupancy as of the date of valuation, unless otherwise noted.

10. On all appraisals, subject to satisfactory completion, repairs, or alterations, the appraisal report and value conclusion are contingent upon completion of the improvements in a workmanlike manner and in accord with the referred to plans and specifications.

11. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless required to do so by a court.

12. Disclosure of the contents of this appraisal report is governed by the By-Laws and Regulations of the Appraisal Institute.

13. Neither all nor any part of the contents of this report, especially any conclusions as to value, identity of the appraiser or the firm with which he (they) is connected or any reference to the Appraisal Institute shall be disseminated to the public through advertising media, public relations media, news media, sales media, or any other public means of communication without prior consent of the undersigned.

14. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea- formaldehyde foam insulation, or other potentially hazardous materials or gases may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. This report further assumes that there are no under/above ground storage tanks of any kind on the property (unless otherwise noted). Possible leakage problems have not been addressed. The site history of the subject property has not been explored, nor has the historical land use patterns of surrounding properties been investigated. Again, the appraiser has not addressed any environmental issues that might affect value. This report assumes that no such issues of any kind are present or affecting the Fee Simple Value in any manner (unless otherwise noted). The appraiser urges the client to retain an outside environmental expert to determine the subject property’s status from this perspective.

15. We have personally inspected the property and finds no obvious evidence of structural deficiencies except as stated in the report. However, no responsibility for hidden or unnoticed defects is assumed. No responsibility for conformity to specific governmental requirements (such as fire, building and safety, earthquake, or occupancy codes) can be assumed without provisions of specific professional or governmental inspections.

16. We have personally inspected the subject property and found no evidence of termite damage or infestation (unless otherwise noted). No termite inspection report was made available to the appraiser; the appraiser is not responsible for damages resulting from any type of insect infestation whatsoever. This is beyond the scope of the appraisal assignment.

ACCEPTANCE OF AND USE OF THIS APPRAISAL REPORT CONSTITUTES ACCEPTANCE OF ABOVE

ADDENDA

Letter of Engagement Qualifications of the Appraisers Legal Description Building Plans Unit Size Breakdown Rent Roll Zoning Map Zoning Ordinance Flood Map Regional Map Neighborhood Map Subject Photos

Letter of Engagement

Curriculum Vitae of Peter M. McEnery, MAI

Primary Business Experience:  Farnsworth-Samuel, Ltd. - Commercial Sales Manager (1976 – 1980)  Murphy, McEnery and Company, LLC – Member-Manager (2002 - March, 2010)  The McEnery Company, Incorporated, President (1980 - Present) Related Business Experience:  First Financial Bank, FSB, New Orleans, Louisiana – Banking Officer (1986 - 1988) Appraisal Practice and Valuation Service Experience:  Appraisal of all types of commercial properties including: o Acreage (timber, swamp, marsh, agricultural) o Land Mitigation Banks o USWF – NWR (environmentally sensitive large acreage tracts – LA, MS, AL, AR) o Subdivision Analysis o Shopping and Retail Centers o Convenience Stores/Truck Stops/Casinos o Office o Industrial o Multi-family o Historic Restorations o Deep Water Port Facilities o Hotels/Nursing Homes/Hospitals o Expropriation (condemnation): Louisiana DOTD; Louisiana Timed Managers  Qualified as Expert Witness: Federal District Court; Federal Bankruptcy Court; State District Courts  Brokerage/Development: o The McEnery Company Incorporated - brokerage and development interests  Finance and Consulting: o Industrial Revenue Bonds (historic restoration financing) o Tax Credit Consulting o General Real Estate Consulting  Banking: o Managed Commercial REO Portfolio Memberships, Licenses, Etcetera:  Member – The Appraisal Institute ®, awarded designation of MAI  Member – The National Association of Realtors ®  State of Louisiana Certified General Real Estate Appraiser No.: G-1102  State of Mississippi Certified General Real Estate Appraiser No.: GA-802  State of Alabama Certified General Real Property Appraiser No.: G00778  State of Florida Certified General Appraiser No.: RZ3357  State of Texas Certified General Appraiser No.: 1380008  State of Arkansas Certified General Appraiser (Temporary) No.: CG 3898  Louisiana Real Estate Broker License-Broker No.: 23772  Mississippi Real Estate Broker License-Broker No.: B17298  Alabama Real Estate Broker License-Broker No.: 95787-0  Louisiana DOTD: Real Estate Agent Consultant Panel  Louisiana DOTD: Real Estate Appraiser Panel  Southeastern Louisiana University, Instructor, REP and P (2001)  LREC approved instructor: Special Seminar CE instructor (2003)  Land Use Committee, New Direction 2025, St. Tammany Parish, Louisiana  Central St. Tammany Land Owner’s Association  Member/Manager – McEnery Management, LLC  Member/Manager-McEnery Properties, LLC  Member/Manager-Iolar Holdings, LLC

Education: Real Estate Continuing Education-thru 2014 Appraisal Institute – Chicago, Illinois  Course 00A (1-A): Basic Appraisal Principles, Methods and Techniques  Course 00B (1-B): Capitalization Theory and Techniques  Course 410-A: Standards of Professional Appraisal Practice  Course 420-B: Standard of Professional Appraisal Practice  Course 510: Advanced Income Capitalization  Course 520: Highest and Best Use and Market Analysis  Course 530: Advanced Sales Comparison and Cost Approaches  Course 540: Report Writing  Course 550: Advanced Applications  Course/Seminar – Partial Interest Valuation – Divided  Course/Seminar – Appraisal Consultation  Course/Seminar – Real Estate Disclosure  Course/Seminar – Scope of the Work  Course/Seminar – Appraising Convenience Stores  Course/Seminar – Valuation of Conservation Easements  Course/Seminar - Analyzing the Effects of Environmental Contamination on Real Property  Course - The Appraiser as an Expert Witness  Course - Litigation Appraising: Specialized Topics and Applications  USPAP – 2014-2015 International Right of Way Association  Course 501-Residential Relocation Assistance  Course 502-Business Relocation  Course 505-Advanced Relocation Assistance I (Residential) Commercial Investment Real Estate Institute Chicago, Illinois  Course CI 101: Financial Analysis for Commercial Real Estate  Course CI 202: Market Analysis for Commercial Real Estate  Course CI 301: Decision Analysis for Commercial Real Estate  Course CI 404: Advanced Tax Planning for Commercial Real Estate  Course CI 405/406: Selling/Negotiation Analysis for Commercial Real Estate Tulane University – New Orleans, Louisiana  College of Arts and Sciences, Bachelor of Arts Degree – 1976 Saint Stanislaus College – Bay St. Louis, Mississippi – 1971

Client Summary:  Private individuals, corporate clients, institutional lenders, public jurisdictions  Litigation Support Services

(References available upon request)

CURRICULUM VITAE

S. PARKERSON MCENERY, MAI

State of Louisiana Certified General Real Estate Appraiser #G1526 State of Mississippi Certified General Real Estate Appraiser #GA‐900 State of Alabama Certified General Real Property Appraiser #G00878

Primary Real Estate Business Experience:  The McEnery Company, New Orleans, Louisiana – Executive VP (April 2004‐Present)  Murphy, McEnery and Company, LLC ‐ Regional Manager (May 2003‐2009)  Murphy, McEnery and Company, LLC ‐ Staff Appraiser 2010

Practical Real Estate Experience:  Commercial Real Estate Appraisal (13 Years of Experience) – All Property Types  Forensic Analysis: o Consultation – feasibility studies o Needs Analysis and Alternative Site Analysis assisting in the obtaining of a 404 Wetlands Permit

 Brokerage and Real Estate Development o 2014‐2015 Build to Suit Renovation: Gracious Bakery + Café Commissary  Procuring agent for residential and commercial real estate transactions in excess of $20 million, with the most notable recent transactions including:

o 301 St. Charles Avenue, New Orleans, LA: Price $4.75 million / 8.28.2014 o Lake Vista Wren Street Condominium Site: Price $3.50 million / 10.6.2014 o 734‐736 Union Street, New Orleans, LA: Price $2.00 million / 1.9.2015

Brokerage experience also includes sales and leasing activity related to

o Apartment Complexes o Subdivision Development (lots sales and bulk acreage) o Commercial Land o Small‐scale industrial properties o Office Leasing o Retail Leasing o Special Purpose Properties (i.e. marina, bed and breakfast) o Historic and New Market Tax Credit Renovation Projects o Office Building Sales

Memberships, Licenses, Etcetera:  Member – The Appraisal Institute ®, awarded designation of MAI in 2014  State of Louisiana Certified General Real Estate Appraiser #G1526

 State of Mississippi Certified General Real Estate Appraiser #GA‐900  State of Alabama Certified General Real Property Appraiser #G00878  State of Louisiana Licensed Real Estate Agent  Executive Vice President – The McEnery Company, Incorporated  Managing Member: S. Parkerson Holdings, LLC  Member / Partner: Central St. Tammany Land Holding Company, LLC  National Association of Realtors  New Orleans Metropolitan Association of Realtors  Passed all 4 Modules of the Comprehensive Exam for MAI Designation on first attempt  Passed Demonstration of Knowledge Appraisal Report on first submittal  Member – Trinity Episcopal Church, New Orleans, LA

Qualified as Expert Witness: 29th Judicial District Court: St. Charles Parish ‐ Judge Robert A. Chaisson, Eminent Domain Case United States Bankruptcy Court: Southern District of Mississippi ‐ Judge Katharine M. Samson

Education: Appraisal Institute – Chicago, Illinois – 2003 – Present

Appraisal Institute Seminars  Scope of Work: Expanding Your Range of Services (New Orleans, Oct. 2003)  Appraising Convenience Stores (New Orleans, January 2005)

Appraisal Institute Courses  Course 110: Appraisal Principles (Austin, TX, January 2004)  Course 120: Appraisal Procedures (Plano, TX, March 2004)  Course 410: National USPAP Course (Plano, TX, March 2004)  Course 310: Basic Income Capitalization (Atlanta, GA, February 2005)  Course 330: Apartment Appraisal: Concepts and Applications (Online, July 2006)  Course 320: General Applications (Online, October 2006)  Course 520: Highest and Best Use and Market Analysis (Houston, TX, Oct. 2006)  Course 510: Advanced Income Capitalization (December 2007)  General Site Valuation and Cost Approach (Online, December 2008)  Course 530: Advanced Sales Comparison & Cost Approaches (Arlington, TX July 2009)  Course 405G: General Appraiser Report Writing & Case Studies (Houston, TX March 2010)  Course ‐ Advanced Concepts and Case Studies (Houston, TX 2011)  USPAP 2012‐2013  USPAP 2014‐2015  Demonstration Report Capstone Program (Louisville, KY 2014)

CCIM Institute – Chicago, Illinois – 2006 – Present CCIM Institute Courses  CCIM ‐ Calculator Course: (Memphis, TN, July 2006)

 CCIM – CI‐ Intro Course: (Memphis, TN, July 2006)

Rhodes College – Memphis, Tennessee  College of Arts and Sciences, Bachelor of Arts Degree – 2003  Major: History; Minor: Business  Real Estate Related Courses: o Finance o Financial Accounting

Franklin Road Academy – Nashville, Tennessee (High School Diploma – 1998)

Birthday: January 13, 1980 [email protected]

Selected List of Clients / Approved Appraiser List: Whitney Bank Weyerhaeuser Company United States Department of the Interior Hancock Bank Iberia Bank J. P. Morgan Chase Bank Fidelity Homestead Bank First NBC Bank Coastal Commerce Bank Adams & Reese, LLP Teche Federal Bank Trustmark National Bank Capital One Bank Gulf Coast Bank & Trust BBVA Compass Bank First National Bank USA French Market Corporation Resource Bank Regions Bank Stone PigmanWalther Wittman Real Estate Matrix, LLC BizCapital BIDCO II, LLC State Investors Bank The Citizens Bank (MS) Citizens Bank and Trust (Covington) Citizens Bank and Trust (Baton Rouge) FOCUS Valuation Advisors Home Bank Charter Bank (MS) First Community Bank Coastal Commerce Bank Metairie Bank and Trust American Business Lending Liberty Self‐Storage / Bennett Brothers

Full Client List and References Available Upon Request

Notable Completed Real Property Appraisal Assignments: New Orleans Centre Downtown New Orleans Bender Shipbuilding and Repair Yards Port of Mobile, Alabama Ace Machine & Fabrication Portfolio South Central Louisiana Monroe Motor Speedway Monroe, Louisiana Proposed Stephen’s Garage Apartment Project Downtown New Orleans Proposed Marigny Lofts Apartment Project New Orleans, Louisiana The Rouzan – Traditional Neighborhood Development Baton Rouge, Louisiana The Maritime Building Downtown New Orleans Delta National Wildlife Refuge Coastal Louisiana Inn by the Sea Pass Christian, Mississippi Lindy Boggs / Mercy Hospital Site ‐ St. Margaret's New Orleans, Louisiana New Orleans Exchange Centre / Chevron Building Downtown New Orleans Bossier Towne Center Bossier City, Louisiana Domain Companies Land Acquisitions Downtown New Orleans Crossroads Psychiatric Hospital Alexandria, Louisiana CEMUS – Deep waterfront Industrial Tract Baton Rouge, Louisiana Highland Community Hospital Medical Buildings Picayune, Mississippi Parkside Plaza Retail Center Laurel, Mississippi Hub City Lofts – Proposed Apartment Project Hattiesburg, Mississippi Big Branch National Wildlife Refuge St. Tammany Parish, Louisiana Tipitina’s New Orleans, Louisiana Land between the Lakes – 21 ½ Miles of Shoreline Lake Martin, Alabama Riverview Plaza Office Tower Downtown Mobile, Alabama City View Condos Downtown Jackson, Mississippi Mobile Press Register Headquarters Mobile, Alabama The Plaza Tower New Orleans, Louisiana

Legal Description

Building Plans

Unit Size Breakdown

Rent Roll

Address Unit Unit Type Square Feet Monthly Rent Rent PSF

627 Decatur B 2BR/1BA 1,385 $2,393.00 $1.73 C 2BR/1BA 1,415 $2,547.00 $1.80 D 2BR/1BA 1,092 $1,565.00 $1.43 633 Decatur B 2BR/1BA 1,384 $2,491.00 $1.80 C 2BR/1BA 1,387 $1,338.00 $0.96 D 2BR/1BA 1,102 $1,375.00 $1.25 502 St. Peter B 2BR/1BA 1,680 $2,688.00 $1.60 C 2BR/1BA 1,716 $2,574.00 $1.50 D 2BR/1BA 1,352 $1,315.00 $0.97 506 St. Peter B 1BR/1BA 482 $516.00 $1.07 C Eff. 467 $1,120.00 $2.40 D Eff. 543 $700.00 $1.29 508 St. Peter B 2BR/2BA 1,873 $2,904.00 $1.55 C 2BR/2BA 1,620 $2,712.00 $1.67 D 2BR/1BA 1,159 $1,338.00 $1.15 512 St. Peter B 2BR/1BA 1,813 $2,900.00 $1.60 C 2BR/2BA 1,801 $2,611.00 $1.45 D 2BR/1BA 1,239 $1,368.00 $1.10 516 St. Peter B 2BR/2BA 1,921 $2,977.00 $1.55 C 2BR/2BA 1,904 $2,760.00 $1.45 D 2BR/1BA 1,129 $1,314.00 $1.16 520 St. Peter B 2BR/2BA 1,868 $2,895.00 $1.55 C 2BR/2BA 1,801 $2,611.00 $1.45 D Eff. 562 $888.00 $1.58 E Eff. 512 $732.00 $1.43 526 St. Peter B 2BR/2BA 1,871 $3,000.00 $1.60 C 2BR/2BA 1,846 $2,675.00 $1.45 D Eff. 562 $888.00 $1.58 E Eff. 518 $725.00 $1.40

530 St. Peter B 2BR/2BA 1,813 N/A N/A C 2BR/2BA 1,846 $2,655.00 $1.44 D 2BR/1BA 1,196 $1,684.00 $1.41 534 St. Peter B 2BR/2BA 1,887 $2,900.00 $1.54 C 2BR/2BA 1,850 $2,682.00 $1.45 D 2BR/1BA 1,196 $1,377.00 $1.15

538 St. Peter B 2BR/11/2BA 1,634 $2,532.50 $1.55

C 2BR/11/2BA 1,620 $2,349.00 $1.45 D 2BR/1BA 1,196 $1,375.00 $1.15 540 St. Peter B 1BR/1BA 463 $1,157.00 $2.50 C Eff. 500 $234.00 $0.47 D Eff. 504 $757.00 $1.50 544 St. Peter B 2BR/1BA 1,688 $2,700.00 $1.60 C 2BR/1BA 1,636 $2,454.00 $1.50 D 2BR/1BA 1,354 $1,704.00 $1.26 628 Chartres B 2BR/1BA 1,384 $2,442.00 $1.76 C 2BR/1BA 1,441 $2,516.00 $1.75 D 2BR/1BA 1,092 $1,285.00 $1.18 632 Chartres B 2BR/1BA 1,438 $2,516.00 $1.75 C * 2BR/1BA 1,448 $2,389.00 $1.65 D 2BR/1BA 1,092 $1,260.00 $1.15 TOTAL 66,282 $94,888.50 $1.43

Zoning Map

Subject

Zoning Ordinance

Section 8.4. - VCC-1 Vieux Carré Commercial District.

8.4.1. Purpose of the District. The purpose of this district is to provide for restricted retail stores and service establishments that will attract and service tourists and local residents and not adversely affect the character of nearby residences or detract from the historic character of the Vieux Carré.

8.4.2. Uses Authorized in the District. Only those uses of land listed under permitted use, accessory use or conditional use provisions of this section are authorized within this zoning district. Supplementary use standards, which are set forth in Article 11, apply to any permitted, accessory or conditional use designated with an asterisk (*) in the use lists appearing in this section. Regulations applicable to existing hotels and to the conversion of existing buildings to multiple dwellings are set forth in Section 8.10. Class B licensed package liquor sales are prohibited within the boundaries of the Vieux Carré and within all Vieux Carré zoning districts.

(Ord. 19,151 § 1 (part), adopted 3/31/99) 8.4.3. Permitted Uses. The following uses of land are authorized as permitted uses in the VCC-1 Vieux Carré Commercial District subject to the performance standards in Section 7.5, except that timeshare buildings, transient vacation rentals, bed and breakfast facilities, guest houses, package liquor stores, massage parlors, adult establishments as defined in Article 2, tattoo parlors, and T-shirt, novelty, gift and souvenir shops are prohibited:

1. Any permitted use in the VCR-1 District. 2. Antique and art shops. 3. Bakeries but only when all products produced on the premises are sold at retail on the premises and the structure shall not exceed 2,000 square feet of floor area. 4. Barbershops, beauty parlors and similar personal service shops. 5. Catering and delicatessen business. 6. Custom dressmaking, millinery, tailoring or similar trades. 7. Dry cleaning shops but using no cleaning fluids whose base is petroleum or one of its derivatives. 8. Flower shops. 9. Laundromat. 10. Locksmith shops. 11. Museums.

12. Photographers or artist studios. 13. Professional offices including architects, doctors, dentists, engineers and similar professions. 14. Radio and electric repair shops. 15. Standard and cafeteria restaurants but not fast food or drive-in restaurants. 16. Shoe repair shops. 17. Small retail stores and shops, except pawnshops, occupying a floor area of not more than 2,000 square feet and grocery stores occupying a minimum of 5,000 square feet of floor area. For the purpose of this regulation, a grocery store is defined as a retail facility which offers for sale staple foodstuffs, household supplies, fresh meat with a meat cutter (butcher), produce and dairy products. 18. Banks, but excluding drive-in banks, with a minimum of 500 square feet of floor area, a maximum of 7,200 square feet of floor area, and with ten (10) linear feet perpendicular to and for each teller window provided for customer space required. 19. Theaters for live plays including musical comedies subject to: (a) approval of the Vieux Carré Commission that said use will not adversely affect the historic character of the Vieux Carré; and (b) the theater shall not occupy in excess of 3,000 square feet of floor area. 20. Ice cream/yogurt shop (with no drive-through service). (Ord. 20,271 § 1 (part), adopted 8/02/01; Ord. No. 024300, § 1, adopted 2/17/11)

(M.C.S., Ord. No. 024300, § 1, adopted 2/17/11) 8.4.4. Accessory Uses. The following uses of land are authorized as accessory uses within the VCC-1 Vieux Carré Commercial District:

1. Any accessory use authorized in the VCR-1 District. 2. Storage in connection with a permitted use where storage is incidental to the approved occupancy of the building, provided all products and materials used or stored are in a completely enclosed building, or enclosed by a masonry wall, screening fence, or hedge, not less than six (6) feet in height. Storage of all materials and equipment shall not exceed the height of the wall and shall not be conducted in required open space. 8.4.5. Conditional Uses. The following uses of land are authorized as conditional uses within the VCC-1 Vieux Carré Commercial District, upon approval of a conditional use permit under the standards and procedures contained in Section 16.6 of these zoning regulations:

1. Any conditional use authorized in the VCR-1 and VCR-2 Vieux Carré Residential Districts.

2. T-shirt, novelty, gift and souvenir shops when not in compliance with the standards for such uses as prescribed in Section 8.4.3 of this article. 8.4.6. Permitted Signs. Subject to the general sign regulations in Article 12, the following accessory signs are permitted within the VCC-1 Vieux Carré Commercial District:

1. Any sign permitted in the VCR-1 District. 2. One (1) sign only shall be allowed to each store, shop or bona fide place of business, and this sign shall be no larger than the maximum stipulated in this section, regardless of the amount of street frontage. 3. No sign of any character except those permitted in the VCR-1 District shall be displayed in the VCC-1 District unless such sign advertises a bona fide business conducted in or on the premises and, if it does do so, not exceeding fifty (50) percent of the area of such sign may be used to advertise products or commodities actually sold on the premises. 4. No sign shall project more than forty-eight (48) inches beyond the building line, except that, for the purpose of illumination, a hood may be used but not to exceed six (6) inches additional projection. 5. Single-faced signs attached flat against the wall and including painted wall signs shall be allowed thirty (30) square inches of sign surface area to each foot of street frontage. 6. In no case shall the area of any one single-faced or painted wall sign exceed eight (8) square feet, the maximum allowable size. Where there is more than one (1) bona fide business on a lot with frontage in excess of fifty (50) feet, the total aggregate sign area may be increased one (1) square foot for each ten (10) feet of street frontage; provided, however, no one (1) sign shall exceed eight (8) square feet in area. 7. For double-faced signs, suspended by brackets or arms perpendicularly from the wall of a building, there shall be allowed sixty (60) square inches of sign surface area for each foot of lot frontage. The area of such a double-faced sign shall be taken to mean the sum of the areas of both faces. 8. In no case shall the area of any one double-faced sign exceed a total of both sides of sixteen (16) square feet, the maximum allowable size for such sign. 9. In the case where two or more businesses are conducted on the premises of single ownership having a street front frontage of twenty-five (25) feet or less, the allowable sign area shall be increased by fifty (50) percent. Such increased sign area shall be the total maximum sign area permitted for the entire property and shall not be interpreted to be the permitted sign area for each individual business occupying said property. 8.4.7. Height, Area and Yard Requirements.

Minimum requirements for lot area, yards and maximum height for the VCC-1 Vieux Carré Commercial District are contained in Table 8.C. These standards apply to all permitted and accessory uses, unless a variance is granted by the Board of Zoning Adjustments under Section 14.6, and to all conditional uses unless modified by the City Council in conjunction with approval of a conditional use permit under Section 16.6. Residential uses are subject to standards of the VCR-1 District.

Table 8.C Area Regulations for the VCC-1 Vieux Carré Commercial District

Maximum height from grade 50 ft.1

Minimum depth of front yard none

Minimum side or rear yard none

Maximum Floor Area Ratio none

Minimum lot area requirements per dwelling unit

One-family buildings 1,500 sq. ft.

Two-family buildings 1,000 sq. ft.

Three-family buildings 800 sq. ft.

Four-or-more-family buildings 600 sq. ft.

Minimum Open Space Ratio:2

corner lots 20 percent

interior lots 30 percent

Requirements Standards

Table 8.C Notes: 1 Buildings of a lesser height may be required as provided by the Vieux Carré Commission Enabling Legislation. These height regulations shall not apply to public utilities. 2 In computing area, all yards and courts may be included as open space. In all Vieux Carré Districts, all open space shall be unobstructed from grade level upward and shall contain no balconies, roof overhangs, galleries, stairways, storage area or other projections in such required open area. Where a parcel contains a corner lot and an interior lot, the percentage of open space area shall be prorated accordingly.

Flood Map

Regional Map

Neighborhood Map

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Front view of subject property

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St. Peter Street view looking towards Chartres Street

St. Peter Street view looking towards Decatur Street

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Typical interior ground floor walkway that leads to apartments

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Interior view of subject property – Typical “B” Unit

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Interior view of subject property – Typical “B” Unit

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Interior/Exterior view of subject property – Typical “B” Unit

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Interior view of subject property – Typical “C” Unit

Subject Photos

Interior view of subject property – Typical “C” Unit

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Interior/Exterior view of subject property – Typical “C” Unit

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Interior view of subject property – Typical “D” Unit

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Interior view of subject property – Typical “D” Unit

Interior view of subject property – Typical “E” Unit

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Street scene from balcony along St. Peter Street

Street scene from balcony along Decatur Street

Subject Photos

Street scenes from balcony along Chartres Street