Fishman Portfolio Woodbine Centre 500 Rexdale Blvd , Toronto, Ontario
Prepared For: Mr. Daniel Mendel Fishman Holdings North America Inc.
Report Prepared by: ALTUS GROUP
Date: December 31, 2011 Street Smart. World Wise.
January 31, 2012
Mr. Daniel Mendel Fishman Holdings North America Inc. 1200 Sheppard Avenue East, Suite 401 Toronto, Ontario M2K 2S5
Dear Mr. Mendel:
Re: Woodbine Centre
In accordance with instructions from Fishman Holdings North America Inc., we have completed a valuation of the Woodbine Centre.
The purpose of the appraisal is to estimate the Fair Value of the property as of December 31, 2011. No portfolio effect has been considered. The intended use of the report is for annual financial reporting purposes. The appraisals comply with the Fair Value (FV) model described in the International Accounting Standard 40 Investment property (i.e. IAS 40) and the International Valuation Standard.
Our report conforms to the Canadian Uniform Standards of Professional Appraisal Practices (CUSPAP) and to the code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute of Canada. The reported analysis, opinions and conclusions are limited only by the Assumptions and Limiting Conditions defined herein, and are our personal unbiased professional analysis, opinions and conclusions. Based upon our inspection of the property and the data contained herein, it is our considered opinion that the fair value as at December 31, 2011 is in the order of: One Hundred and Seventeen Million Dollars $117,000,000
Given current real estate market conditions, we believe that a reasonable exposure period for the sale of the subject property is four to six months If you have any questions, Tim MacLeod would be pleased to discuss the valuation further.
Respectfully submitted,
ALTUS GROUP LIMITED
Research, Valuation & Advisory Cost Consulting & Project Management Realty Tax Consulting Geomatics 33 Yonge Street, Suite 500, Toronto, ON M5E 1G4 Canada T 416.641.9500 F 416.641.9501 altusgroup.com Fishman Portfolio Woodbine Centre December 31, 2011
WOODBINE CENTRE, 500 REXDALE BOULEVARD,TORONTO,ONTARIO
1. A review and reconciliation of the data and analysis leading to the conclusion and final estimate of value is as follows:
Conclusions December 31, December 31, December 31, December 31, Regional Mall 2008 2009 2010 2011 Retail Market Value $120,000,000 $94,100,000 $93,000,000 $117,000,000 Rate Analysis IRR 8.00% 8.75% 8.50% 8.00% Rate Per s.f. $175 $138 $136 $149 TCR 7.25% 8.00% 7.75% 7.25% OCR 7.25% 7,75% 7.75% 7.25% Cash Flow (DCF) Year 1 1.72% 5.65% 5.33% 5.13% Years 1 5 6.64% 7.65% 7.37% 5.64% Years 6 10 7.87% 8.29% 7.86% 7.79% Net Income (DCF) Year 1 5.60% 7.37% 6.55% 5.70% Years 1 5 7.75% 8.67% 8.45% 7.76% Years 6 10 8.41% 8.87% 8.46% 8.58%
Market Value (Land) Market Value (Rounded) $50.400,000 $45,600,000 $45,600,000 $45,600,000 Market Value Per Acre $1,050,000 $950,000 $950,000 $950,000
Market Rental Rate Range < 500 s.f. $35.00 $65.00 $35.00 $75.00 $35.00 $75.00 $35.00 $75.00 501 999 s.f. $25.00 $50.00 $25.00 $45.00 $25.00 $45.00 $25.00 $72.00 1,000 3,000 s.f. $20.00 $40.00 $15.00 $40.00 $15.00 $40.00 $10.00 $40.00 3,001 5,500 s.f. $15.00 $35.00 $10.00 $20.00 $10.00 $30.00 $5.00 $30.00 Kiosks $100.00 $500.00 $150.00 $525.00 $150.00 $525.00 $150.00 $525.00 Anchors $10.00 $10.00 $10.00 $8.00 $10.00 Cinema $6.00 $8.00 $8.00 $8.00 Food Court $75.00 $120.00 $80.00 $125.00 $80.00 $125.00 $110.00 $120.00
2 Fishman Portfolio Woodbine Centre December 31, 2011
Inducements New $15.00 $15.00 $15.00 $20.00 Renewals $5.00 $0.00 $5.00 $5.00
Realty Commissions New $2.00 $4.00 $4.00 $4.00 Renewals $1.00 $2.00 $2.00 $2.00
Growth Rates Market Rent & Sales Growth Year 2 1.00% 0.00% 0.00% 1.00% Year 3 1.00% 1.00% 1.00% 1.00% Year 4 2.00% 2.25% 2.25% 2.00% Long Term 2.25% 2.25% 2.25% 2.25%
Expense Growth (LT) 2.25% 2.25% 2.25% 2.25%
Reserves Vacancy & Bad Debt 7.00% 7.50% 7.50% 7.50% Allowance 1 Lag Vacancy in Months 4 8 8 8 Management Fee 2 3.00% 3.00% 3.00% 3.00% Structural Reserve 2 1.00% 1.00% 1.00% 1.00%
Leasing Assumptions Renewal Probability 75.00% 75.00% 75.00% 75.00%
1 Based upon a percentage of PGI Less Anchors 2 Based upon percentage of EGR
2. A reasonable exposure time is estimated to be 6 months.
3. The location and physical character of the property is addressed as follows:
The property lies at the intersection of Highway 27 and Rexdale Boulevard. The character of the district is dominated to the south by Woodbine Racetrack and a series of industrial uses. To the north lie several large, low density residential communities. The interest appraised is the Leased Fee, Freehold subject to leases. The character of the building is described as an enclosed regional mall.
3 Fishman Portfolio Woodbine Centre December 31, 2011
The total leaseable area of the building upon completion of the Target expansion is 786,599 square feet. The total parking stalls is 3,580 at a ratio of 4.55 spaces per 1,000 square feet. The total site area is 48.0 acres.
4. The Land Use Controls are 1. CPR Commercial Planned Regional. 2. Major uses permitted are Retail/Commercial.
5. The existing use of the subject property is an enclosed regional mall. This is the use reflected in the appraisal.
6. Highest and Best use is estimated to be its current use. As vacant land the highest and best use is estimated to be a retail use, likely in the form of an open format strip development or a power centre for big boxes. In addition, part of the site holds good appeal for high density residential uses.
7. This appraisal has considered the possible effect on value of an assemblage and for the subject property there is considered to be none. There is no effect on value of any anticipated public or private improvements unless specifically noted herein.
8. There is no planned re development for this property.
9. As far as we are aware there is no current agreement for sale, option or listing of the property for sale.
10. History of subject property market activity indicates that the property is not currently listed for sale and under contract. A review at the local Land Registry Office revealed that the property last traded in March 2005 at a price of $109,250,000. The details of the sale are summarized as follows:
4 Fishman Portfolio Woodbine Centre December 31, 2011
5 Fishman Portfolio Woodbine Centre December 31, 2011
11. For the December 31, 2011 valuation, for the Discounted Cash Flow Analysis, the most relevant ales are:
Sal Database Sale e Reference No. Address or Name IRR TCR Date No.
1 32512 Southgate Mall, Edmonton, Alberta 6.25% 5.25% Dec 2011
2 29157 Oakville Place, Oakville, Ontario 6.94% 6.00% Jun 2011
3 28997 Hillcrest Mall, Richmond Hill, Ontario 7.85% 6.75% Apr 2011
12. For the December 31, 2011 valuation, for the Direct Capitalization Approach, the most relevant sales are:
Sale Database Sale No. Reference No. Address or Name OCR Date
1 32512 Southgate Mall, Edmonton, Alberta 5.00% Dec 2011
2 29157 Oakville Place, Oakville, Ontario 5.75% Jun 2011
3 28997 Hillcrest Mall, Richmond Hill, Ontario 6.50% Apr 2011
13. For the December 31, 2011 valuation, for the Land Valuation, based on the highest and best use, and as if vacant, the most relevant sales are:
Sale Database Sale Rate ($) No. Reference No. Address or Name Per Acre Date
1 33056 Ivandale Drive, Mississauga, Ontario $884,889 Dec 2011
2 33059 5067 Dixie Road, Mississauga, Ontario $993,049 Sep 2011
3 33054 1016 Eglinton Ave, Mississauga Ontario $1,046,255 Feb 2011
6 Fishman Portfolio Woodbine Centre December 31, 2011
14. The value differential from the previous appraisal is detailed as follows
Estimated Market Value December 31, 2011 $117,000,000 Estimated Market Value December 31, 2010 $93,000,000 Change in Market Value $24,000,000
Parameter Approximate Impact on Value Rate of Return $8,000,000 Growth rates (Sales & Rents) $0 Leasing Costs ($1,000,000) Specific Items Percentage Rent $600,000 Miscellaneous Income ($700,000) Non Recoverable Expenses $700,000 Non Recoverable Capital Expenditures $800,000 Target/Grocery Store/Winners expansion (includes leasing costs) $5,500,000 Other $10,100,000 Total Variance $24,000,000
7 ARGUS CASH FLOW PROJECTION DECEMBER 31, 2011 Fishman Portfolio Woodbine Centre December 31, 2011
Discounted Cash Flow Conclusions Woodbine Centre SUMMARY OF DISCOUNTED CASH FLOW ANALYSIS ANALYSIS DATE Jan 12
Discount Rate (IRR) 8.00% Year Capitalized 11 Terminal Cap Rate 7.25% Rounding Places 6 Net Rentable Floor Area (excluding storage) 786,599 sq. ft. Selling Costs 0.00% . Hold Net Operating Net Discount Net Present NOI / CF / Year Income Cashflow Factor Value Value Value
1 12/12 $6,667,556 $5,997,459 0.925925926 $5,553,203 5.69% 5.12% 2 12/13 $8,685,213 $6,307,685 0.857338820 $5,407,823 7.41% 5.38% 3 12/14 $9,810,140 $5,354,455 0.793832241 $4,250,539 8.37% 4.57% 4 12/15 $10,494,279 $6,212,279 0.735029853 $4,566,211 8.95% 5.30% 5 12/16 $9,716,686 $9,129,954 0.680583197 $6,213,693 8.29% 7.79% 6 12/17 $9,785,789 $9,239,605 0.630169627 $5,822,518 8.35% 7.88% 7 12/18 $9,689,463 $8,391,033 0.583490395 $4,896,087 8.26% 7.16% 8 12/19 $9,924,981 $8,763,205 0.540268885 $4,734,487 8.47% 7.47% 9 12/20 $10,166,674 $9,143,220 $4,573,886 8.67% 7.80% 10 12/21 $10,655,113 $10,038,238 0.463193488 $4,649,646 9.09% 8.56% Reversion $143,734,113 0.463193488 $66,576,705 PV of Cash Flow and Reversion $117,244,799 REVERSION CALCULATION FINANCIAL INDICATORS 11th Year NOI $10,464,374 NOI Cash Flow Terminal Capitalization Rate 7.25% Initial Yield 5.70% 5.13% Unadjusted Reversion Value $144,336,193 1 5 Year Average 7.76% 5.64% Less: Reversion Inducement & Commission ($602,080) 6 10 Year Average 8.58% 7.79% Add: PV of Unamortized Capital Revenue $0 Sub total $143,734,113 % Value of Reversion 56.78% Selling Costs @ 0.00% $0 $149
Net Reversion Value (000 S) $143,734,113
ESTIMATED MARKET VALUE (ROUNDED) $ 117,000,000
$11,000,000 $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 NOI Cash Flow
9 Fishman Portfolio Woodbine Centre December 31, 2011 Sensitivity Analysis Valuation Matrix Discount Rate
7.50% 7.75% 8.00% 8.25% 8.50% 6.75% 127,000,000 125,000,000 122,000,000 120,000,000 118,000,000 Terminal 7.00% 124,000,000 122,000,000 120,000,000 117,000,000 115,000,000 Cap Rate 7.25% 122,000,000 119,000,000 117,000,000 115,000,000 113,000,000 7.50% 119,000,000 117,000,000 115,000,000 113,000,000 111,000,000 7.75% 117,000,000 115,000,000 113,000,000 111,000,000 109,000,000
Price Per Sq Foot Discount Rate Matrix 7.50% 7.75% 8.00% 8.25% 8.50% 6.75% $186 $183 $179 $176 $173 Terminal 7.00% $182 $179 $176 $171 $169 Cap Rate 7.25% $179 $174 $171 $169 $166 7.50% $174 $171 $169 $166 $163 7.75% $171 $169 $166 $163 $160
Initial Yield Matrix Discount Rate
7.50% 7.75% 8.00% 8.25% 8.50% 6.75% 5.25% 5.33% 5.47% 5.56% 5.65% Terminal 7.00% 5.38% 5.47% 5.56% 5.70% 5.80% Cap Rate 7.25% 5.47% 5.60% 5.70% 5.80% 5.90% 7.50% 5.60% 5.70% 5.80% 5.90% 6.01% 7.75% 5.70% 5.80% 5.90% 6.01% 6.12%
10 Fishman Portfolio Woodbine Centre December 31, 2011
Normalized Statement of Operations Woodbine Centre REVENUE Base Rent $10,182,761 Percent Rent 435,780 Recoveries Operating Costs $2,726,135 Realty Taxes 3,175,598 Total $5,901,733 Miscellaneous Income $1,880,073 Vacancy Allowance ($829,732) Effective Gross Income $17,570,615 EXPENSES Recoverable Expenses Operating Costs ($3,047,317) Realty Taxes ($3,890,676) Promotion ($80,184) Non Recoverable Costs ($87,841) Management Fee ($527,045)
Total Expenses $7,633,063 Stabilized NOI $9,937,552 OCR 7.25%
Indicated Value $137,069,683 Shortfall Gross Rents ($5,471,340) Lease Up Costs ($7,917,463) PV Unamortzied Rec Def Expenses $64,174 Non Recoverable Cap Ex ($40,000) Major Tenant Adjustments (The Bay & Sears) ($4,217,357) Estimated Value by the Direct Capitalization Approach (Rounded) $119,000,000
11 AppendixA
Terms of Reference Scope of Work Contingencies & Limiting Conditions Certification
FISHMAN PORTFOLIO
TERMS OF REFERENCE
IDENTIFICATION The subject of this appraisal, referred to herein as the Woodbine Centre occupies a prominent position in the City of Toronto, at he intersection of Highway 27 and Rexdale Boulevard.The property is municipally known as:
500 REXDALE BOULEVARD
TORONTO,ONTARIO
PURPOSE OF APPRAISAL The purpose of the appraisal is to estimate the Fair Value of the property as of December 31st 2011. We understand the intended use is for annual financial reporting purposes.
MARKET VALUE DEFINITION
Market value is defined as:
The most probable price which a property should bring in a competitive and open market under all conditions requisite
to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and acting in what they consider their best interests;
3. A reasonable time is allowed for exposure of each individual property in the open market estimated to be
in the range of three to nine months;
4. Payment is made in terms of cash in Canadian dollars or in terms of financial arrangements
comparable thereto; and
5. The price represents the normal consideration for the property sold, unaffected by special or creative
financing or sales concessions granted by anyone associated with the sale.
(Source: Canadian Supplement to 1998 Uniform Standards of Professional Appraisal Practice).
A1 FISHMAN PORTFOLIO
FAIR VALUE DEFINITION
Fair Value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arms length transaction.
The definition of fair value refers to knowledgeable, willing parties. In this context, knowledgeable means that both the willing buyer and the willing seller are reasonably informed about the nature and characteristics of the investment property, its actual and potential uses, and market conditions at the balance sheet date. A willing buyer is motivated, but not compelled, to buy. This buyer is neither over eager nor determined to buy at any price. The assumed buyer would not pay a higher price than a market comprising knowledgeable, willing buyers and sellers would require.
A willing seller is neither an over eager nor a forced seller, prepared to sell at any price, nor one prepared to hold out for a price not considered reasonable in current market conditions. The willing seller is motivated to sell the investment property at market terms for the best price obtainable. The factual circumstances of the actual investment property owner are not a part of this consideration because the willing seller is a hypothetical owner (e.g. a willing seller would not take into account the particular tax circumstances of the actual investment property owner).
The fair value of investment property reflects, among other things, rental income from current leases and reasonable and supportable assumptions that represent what knowledgeable, willing parties would assume about rental income from future leases in the light of current conditions.
Fair value specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, special considerations or concessions granted by anyone associated with the sale.
The fair value of investment property does not reflect future capital expenditure that will improve or enhance the property and does not reflect the related future benefits from this future expenditure.
EXTRAORDINARY ASSUMPTIONS &LIMITING CONDITIONS
We have made the following extraordinary assumptions:
We accepted the Fishman and associated property manager capital budgets as reasonable and appropriate, without audit. We accepted that the Fishman and associated property manager operating costs and rent rolls accurately reflect the existing leases without audit. We assumed all properties are free and clear of debt.
A2 FISHMAN PORTFOLIO
Given our extensive experience with the Fishman assets, we have found good integrity of internally generated financial information and therefore consider these assumptions reasonable.
Extraordinary limiting conditions are summarized as follows:
We did not conduct a legal title search We did not conduct a Cost Approach
The valuations do not reflect any hypothetical conditions unless specifically agreed in advance, and disclosed in the Form report.
PORTFOLIO EFFECT
Fishman Holdings North America Inc. has assembled an attractive portfolio of retail, office and industrial properties in several key Canadian markets. The portfolio benefits from several synergies with respect to: management, leasing influence and flexibility, operating cost efficiencies, and assembly costs including acquisition, due diligence and transaction costs. Notwithstanding the presence of these significant portfolio synergies, the Fair Values is reported for each individual asset in isolation, with no consideration of a portfolio premium.
LAND VALUATIONS
The Fishman Portfolio includes Investment Properties only; without regard for any separate parcels of vacant lands or adjacent lands that have been severed from an existing retail office or industrial development.
Where an existing property has surplus unsevered land, we have adjusted the yield rates to appropriately reflect the inherent value of the surplus density. Notwithstanding the above, we have for all the leased fee assets in the portfolio, included a land value based on the highest and best use of the land as if vacant.
A3 FISHMAN PORTFOLIO
SCOPE OF THE ASSIGNMENT
FIELD WORK SITE/BUILDING INSPECTION Building inspection is on a walk through basis to report consistency with other similar properties as opposed to a detailed condition report Inquire about building features such as (design, parking, exterior/interior finish, mechanical, function, observed condition, special features)
LOCATION Identify characteristics and overall trends Local & regional access Public transportation Adjacent land use Dominant land uses affecting the area Current trends
PLANNING/LAND USE Review zoning/official plan and other planning regulations. A formal review is not conducted and is required for certainty Proposals or initiatives Excess density potential
DOCUMENT REVIEW &ANALYSIS PHYSICAL Site Plan / Survey Floor plans, stacking plans, merchandising plans Summary of rentable area / number of parking stalls
INCOME CHARACTER We will request and review / analyze information supplied regarding the following: Rent roll Lease / rent roll variance analysis Supplied exceptions to the Standard Lease recovery of operating costs (i.e. capital tax, operating cost caps, etc.) Major tenant cursory covenant review Aged accounts receivable Sublease agreements Budgeted ancillary revenues (temporary, parking , storage, signs, antennas etc) Retail sales performance analysis including percentage rent analysis
A4 FISHMAN PORTFOLIO
Abatement agreements Outstanding lease take over costs Account for inducements contracted but not yet paid Remaining free rent periods Summary of completed lease deals in subject for last 18 months Prospective tenant leasing package Pending leases or offers not yet executed Capital expenditure program (recoverable and non recoverable)
TENURE We will request and review / analyze information supplied regarding the following: Current ownership Historical transfers over the past three years
MANAGEMENT We will request and review / analyze information supplied regarding the following: Current year operating budget Historical/budgeted operating costs per sq.ft. at 100% occupancy Historical financial statements
SURVEY WORK Detailed rental rate survey and leasing transaction summary Detailed property sales / listings survey and summary Operating cost analysis and comparison Interviews: experienced brokers typical investors property / leasing managers: tenants that are expected to vacate within the next twelve months tenancies that have vacated, but paying rent per existing un expired leases tenants that have sub leased, together with the details of sub leases list of vacant units, together with asking and expected net effective rates most competitive buildings from a leasing perspective
INCOME FORECAST Based on typical investor attitude Forecast over a minimum of 10 years using Argus format Net operating income Cash flow
A5 FISHMAN PORTFOLIO
VALUATION RATIONALE Estimate Highest and Best Use in terms of: Location Zoning Physical elements Income potential Market conditions Overall Capitalization Rate Internal Rate of Return Terminal Capitalization Rate Rate per sq.ft.
REPORTING Summary portfolio report Point form in layout Descriptive facts Valuation Methodology where appropriate, one or more of: income approach direct comparison approach no replacement cost or cost approach is provided
EXCLUSIONS FROM THE SCOPE OR WORK
The scope of work specifically excludes the following: Depreciated replacement cost of existing tenant improvements Replacement cost estimates for insurance purposes.
A6 FISHMAN PORTFOLIO
CONTINGENT &LIMITING CONDITIONS
1. This report is prepared at the request of the Fishman Holdings North America Inc. for an appraisal of Fair Value for annual financial reporting purposes. It is not reasonable for any other person or corporation other than the Fishman Holdings North America Inc. and/or their advisors, and any company under the control of the Fishman family to rely upon this appraisal without first obtaining written authorization from Altus Group Limited. There may be qualifications, assumptions or limiting conditions in addition to those set out below, relevant to that person s identity or their intended use.
This report is prepared on the assumption that no other person will rely on it for any other purpose and that all liability to all such persons is denied.
2. While expert in appraisal matters, the author is not qualified and does not purport to give legal advice. It is assumed that: any legal description provided is correct; title to the property is good and marketable; there are no encroachments, encumbrances, restrictions, servitudes, church taxes, heritage or cultural property restrictions, privileges, liens, leases or covenants that would in any way affect the valuation, except as expressly noted herein leasehold interests referred to herein have, or will have, properly drawn and executed instruments that legally bind the parties in the described manner and that any rent due has been paid in full; the use is a legally conforming or non conforming use which may be continued by any purchaser from the existing owner; rights of way, easements or encroachments over other real property and leases or other covenants noted herein are legally enforceable
Because these assumptions have been made, no investigation, legal or otherwise, has been undertaken which would verify these assumptions except as expressly noted herein.
3. The author is not a qualified surveyor and, unless noted, no legal survey concerning the subject property has been provided. Furthermore, any measurements of rentable areas that have been provided to us are assumed to be correct.
For certainty a formal up to date survey and architectural measurement are required. This appraisal is therefore contingent on the correctness of the areas given. Any sketches, drawings, diagrams, photographs, etc. are presented in this report for the limited purpose of illustration and are not to be relied upon in themselves.
A7 FISHMAN PORTFOLIO
4. The author is not qualified to give engineering advice. In valuing the property it is assumed that: the soil is stable and that there are no forms of contamination or hazardous waste affecting the site there are no patent or latent defects in the improvements no objectionable materials, such as Asbestos, P.C.B s, or Urea Formaldehyde foam are present the improvements are structurally sound and in need of no immediate repairs, unless expressly noted within this report the heating, plumbing, electrical, air conditioning or other systems are in good working order For certainty, a full engineering and environmental study is required.
5. No official investigation has been undertaken with the local municipal public utilities department, the zoning office, the fire department, the building inspector, the health department or any other government regulatory agency, unless such investigations are expressly represented to have been made in this report. The subject property must comply with such government regulations, and if it does not comply, its non compliance may affect market value. To be certain of compliance, further investigations may be necessary.
Unless otherwise noted, it is assumed that full municipal services (water, sanitary/storm sewers, etc.) and public utilities (gas, hydro and telephone) are available, without local improvement charges.
6. Neither possession of this report nor a copy of it carries with it the right of publication. All copyright is reserved to the author and is considered confidential by the author and his client. It shall not be disclosed, quoted from or referred to, in whole or in part, or published in any manner, without the express written consent of the appraiser.
This is subject only to confidential review by the APPRAISAL INSTITUTE OF CANADA and the ORDRE DES ÉVALUATEURS AGRÉÉS DU QUÉBEC,
7. Market data has been obtained from documents at the Land Registry Office, or as reported by the Real Estate Board. As well as using such documented and generally reliable evidence of market transactions, it was also necessary to rely on hearsay evidence. Except as noted herein, a reasonable attempt has been made to verify all such information
8. The compensation for services rendered in this report does not include a fee for court preparation or court appearance, which must be negotiated separately. However, neither this nor any other of these limiting conditions is an attempt to limit the use that might be made of this report should it properly become evidence in a judicial proceeding. In such case, it is acknowledged that it is the judicial body which will decide the use of the report which best serves the administration of justice.
9. Any distribution of value between land, buildings and other improvements applies only in regard to the purpose and function of this appraisal and should not be taken out of context.
10. It assumed that any and all liabilities that might accrue against the real estate such as taxes, hypothecs, contracts or services of any kind, are paid when due.
11. Other assumptions, limiting conditions or clarifications are listed throughout the report as needed.
A8 FISHMAN PORTFOLIO
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 Fair Value reported herein comply with IAS 40 and the International Valuation Standard.
The Fair Value model reported herein is for Investment Property as per the definition in IAS 40.
The determination of the Fair Value for the income producing investment property has been supported by market evidence
Altus Group is independent of the client. Moreover, Altus Group does not provide real estate brokerage, property management, asset management or financial auditing services, and therefore the opinions expressed herein are un biased by other business considerations.
The reported analyses, opinions, and conclusions are limited only by the reported extraordinary assumptions and contingent and limiting conditions defined herein, and are our personal, unbiased professional analyses, opinions and conclusions
We have no present or prospective interest in the property that is the subject of this report, and we have no personal interest or bias with respect to the parties involved
Compensation is not contingent upon the reporting of a predetermined value or direction in value that favours the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event
To the best of our knowledge and belief, the reported analysis, opinions and conclusions were developed, and this report has been prepared, in conformity with the Canadian Standard of Professional Appraisal Practice (The Standards).
Inspections of the property have been carried out during September to December 2011. The content, form and reasoning has been reviewed by a designated member of the Appraisal Institute of Canada. The inspection was considered sufficient to describe the real estate, develop an opinion of highest and best use, and make meaningful comparisons with other market data. A detailed inspection to report building condition has not been carried out
We have not knowingly withheld any comments or observations which might affect the opinions of value stated in this report
We have the knowledge and experience to complete the assignment competently
No one provided significant professional assistance to the undersigned
The appraisal report is treated as confidential by the appraisers and will not be revealed to third parties without the consent and authorization of the Client for whom this report was prepared, subject only to review only if required by the Appraisal Institute of Canada
A9 FISHMAN PORTFOLIO
The ACCIs listed as part of this certification are currently certified under the continuing education program of the Appraisal Institute of Canada.
In our opinion, the fair value of the subject property, subject to the assumptions and the contingent and limiting conditions at Appendix A as of December 31, 2011 is $117,000,000. Tim MacLeod, B.B.A., AACI Date: January 31, 2012
A10 AppendixB
Reliance Letter
Street Smart. World Wise.
January 31, 2012
Jerusalem Economy Ltd. (JEC) Represented by Mr. Daniel Mendel Fishman Holdings North America Inc. P.O. Box 152 North York, Ontario
Dear Mr. Mendel:
Re: Appraisal report for Woodbine Centre, 500 Rexdale Boulevard, Toronto ( Woodbine )
Reference is made to the appraisal report prepared by me in connection with the abovementioned asset as at 31.12.2011 (the Report).
In addition to any analysis, assumptions, opinions and conclusions set forth in the Report, I hereby represent and confirm as follows:
1. I was contacted and requested by you, on behalf of JEC, to prepare the Report. 2. From time to time, I provide real estate appraisals and evaluations to other companies within the Fishman group. However, I am independent of Mr. Eliezer Fishman and/or any company controlled by him. 3. I hereby represent that I do not have any personal interest in the contemplated asset and/or in its owners, and the appraisal thereof hereunder has been prepared by me in accordance with my best and professional knowledge, skills and consideration. 4. I hereby agree that my Report, together with this letter, be included in JEC s publicly published financial statements, and in its prospectus which shall be published in March 2012.
The abovementioned in this letter shall constitute for all purposes as an integral part of my Report.
Sincerely,
Tim MacLeod B.B.A, AACI Director, Research, Valuation & Advisory Altus Group
Reliance Letter - Jerusalem Economy Ltd - 01.24.2012
Research, Valuation & Advisory Cost Consulting & Project Management Realty Tax Consulting Geomatics 33 Yonge Street, Suite 500, Toronto, ON M5E 1G4 Canada T 416.641.9500 F 416.641.9501 altusgroup.com AppendixC
Resume
Tim R. MacLeod BBA, AACI
Director, Retail Valuations 18 Years of Industry Experience
Tim is a Director focusing his primary efforts on the retail sector. Tim has been involved with the real estate field for more than 18 years, and his function is to set up the financial modelling in various platforms, interact with the retail team of consultants, and to track market trends. He brings valuable background from a major Canadian developer. He is a graduate of The University of Prince Edward Island.
Professional Qualifications and Memberships Selected Project Experience Appraisal Institute of Canada A sample of projects completed within the last 18 months include: - Ivanhoe Cambridge Portfolio
- Ontario Teachers Pension Plan Portfolio - Canada Pension Plan
- Alberta Treasury
- Fishman Holdings
- Primaris REIT
Education Bachelor of Business Administration – University of Prince Edward Island, 1987 Accredited Appraiser (AACI) 2010