Related Commercial Portfolio Ltd. RE: Value Appraisals
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Robert S. Nardella, MAI, MRICS Executive Managing Director V&A Regional Manager 1290 Avenue of the Americas New York, NY 10104 Direct +1 212 841 5048 Fax +1 212 479 1878 [email protected] cushmanwakefield.com November 18, 2015 To: Related Commercial Portfolio Ltd. RE: Value Appraisals – Consent to include within Financial Statements We hereby give our full consent to Related Commercial Portfolio Ltd. (the "Company") to the inclusion of our Appraisal Report dated June 29, 2015 (Effective date – June 10, 2015) regarding Gateway Center at Bronx Terminal, 658 River Avenue, Bronx, New York in its entirety, within the Company's Financial Statements for September 30, 2015, to be published by the Company no later than November 30, 2015, and any ensuing financial statements, and within any other filing to be filed and/or disclosed by the Company to the Israel Securities Authority and/or to be published by the Company. In addition, we hereby give our full consent to the inclusion of a copy of this letter within the Company's Financial Statements and other filings as aforesaid. Yours sincerely, Cushman & Wakefield, Inc. Robert S. Nardella, MAI, MRICS Executive Managing Director RSN:pl No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions, imposed by our principals. APPRAISAL OF REAL PROPERTY Gateway Center at Bronx Terminal Market 4-Story Retail Power Center 658 River Avenue The Bronx, Bronx County, NY 10451 IN AN APPRAISAL REPORT As of June 10, 2015 Prepared For: Related Commercial Portfolio, Ltd. c/o Related Companies 60 Columbus Circle New York, NY 10005 Prepared By: Cushman & Wakefield, Inc. Valuation & Advisory 1290 Avenue of the Americas, 9th Floor New York, NY 10104-6178 C&W File ID: 15-12002-901504 CUSHMAN & WAKEFIELD, INC. 1290 AVENUE OF THE AMERICAS, 9TH FLOOR NEW YORK, NY 10104-6178 Gateway Center at Bronx Terminal Market 658 River Avenue The Bronx, Bronx County, NY 10451 CUSHMAN & WAKEFIELD, INC. 1290 AVENUE OF THE AMERICAS, 9TH FLOOR NEW YORK, NEW YORK 10019 June 29, 2015 Mr. David Zussman Related Commercial Portfolio, Ltd. c/o Related Companies 60 Columbus Circle New York, NY 10023 Re: Appraisal of Real Property In an Appraisal Report Gateway Center at Bronx Terminal Market 4-Story Retail Power Center 658 River Avenue The Bronx, Bronx County, NY 10451 C&W File ID: 15-12002-901504 Dear Mr. Zussman: In fulfillment of our agreement as outlined in the Letter of Engagement, we are pleased to transmit our appraisal of the above property in an appraisal report dated June 29, 2015. The effective date of value is June 10, 2015. Gateway Center at Bronx Terminal Market is a 4-story retail power center that contains a total of 912,333 square feet of gross leasable area (GLA) retail space and a 6-level parking garage with 2,575 spaces. The subject property also includes two 1-story retail/commercial buildings. The subject improvements are situated on a 16.8- acre site. The subject retail center is anchored by Target, BJ’s Wholesale Club, and Home Depot, which have leased 443,500 square feet or 48.6 percent of the property on a long-term basis. The subject property has been ground leased on a net basis for a base term of 49 years through September 13, 2055. In addition, the ground lease can be extended for five additional ten years renewal terms extending the lease through September 13, 2105. This report was prepared for Related Commercial Portfolio, LTD. c/o Related Companies and/or affiliates and is intended only for their specified use. It may not be distributed to or relied upon by any other persons or entities without the written permission of Cushman & Wakefield, Inc. This appraisal report has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), including the Competency Provision. MR. DAVID ZUSSMAN CUSHMAN & WAKEFIELD, INC. RELATED COMMERCIAL PORTFOLIO, LTD. C/O RELATED COMPANIES JUNE 29, 2015 PAGE 3 MARKET VALUE AS IS Based on the agreed to Scope of Work, and as outlined in the report, we developed an opinion that the Market Value of the Leasehold estate of the above property, after adjusting for the Transaction Payment via Net Sale Proceeds to be paid by the landlord as per the ground lease, subject to the assumptions and limiting conditions, certifications, extraordinary assumptions and hypothetical conditions, if any, and definitions, “As-Is” on June 10, 2015, was: SIX HUNDRED THIRTEEN MILLION DOLLARS $613,000,000 The value opinion reported above assumes a sale of the subject property as of the date of value. The value considers the 7.5 percent Transaction Cost deduction based on the Net Sales Proceeds. EXTRAORDINARY ASSUMPTIONS For a definition of Extraordinary Assumptions please see the Glossary of Terms & Definitions. This appraisal employs the following extraordinary assumptions: 1) The subject site is ground leased until September 13, 2055, with 5 consecutive 10 year renewal options by BTM Development Partners LLC (c/o Related Companies) from the City of New York. As per Section 12.1 of the ground lease, the tenant is responsible for transaction payments in the event of a sale or financing. Since our market value estimate assumes a sale of the property as of the date of value, we have adjusted our market value estimate by the defined 7.5 percent of net sale proceeds obligated to be distributed to the landlord (New York City). We have been provided with the information which details the anticipated transactions costs related to a potential sale of the subject property. Some of the deductions defined in the ground lease in calculating the transaction payment apply to both refinancing or a sale. Therefore, we have utilized the applicable deductions which were made available by the ownership in calculating the Net Sale Proceeds and the Transaction Payment. We have assumed that the information provided by the owner regarding the allowable deductions is accurate. If the provided information is not accurate, we reserve the right to amend our value conclusion. Please refer to the complete list of assumptions and limiting conditions included in the Income Approach of this report HYPOTHETICAL CONDITIONS For a definition of Hypothetical Conditions please see the Glossary of Terms & Definitions. This appraisal does not employ any hypothetical condition. MR. DAVID ZUSSMAN CUSHMAN & WAKEFIELD, INC. RELATED COMMERCIAL PORTFOLIO, LTD. C/O RELATED COMPANIES JUNE 29, 2015 PAGE 4 This letter is invalid as an opinion of value if detached from the report, which contains the text, exhibits, and Addenda. Respectfully submitted, CUSHMAN & WAKEFIELD, INC. John A. Katinos, MAI James P. Stuckey, Jr. Senior Director Associate Director NY Certified General Appraiser NY State Certified Appraiser Assistant License No. 46000028780 License No. 48000049048 [email protected] [email protected] (212) 841-5061 Office Direct (212) 689-5633 Office Direct (212) 479-1820 Fax (212) 479-1687 Fax GATEWAY CENTER AT BRONX TERMINAL MARKET EXECUTIVE SUMMARY V EXECUTIVE SUMMARY Location: Gateway Center at Bronx Terminal Market 4-Story Retail Power Center 658 River Avenue The Bronx, Bronx County, NY 10451 The subject site is generally bounded by 149th Street to the south, the Metro-North Rail Road tracks to the north, River Avenue to the west, and Exterior Street to the east, across the Harlem River and adjacent to the Major Deegan Expressway (I-87). Property Description: Gateway Center at Bronx Terminal Market is a 4-story retail power center that contains a total of 912,333 square feet of gross leasable area (GLA) retail space and a 6-level parking garage with 2,575 spaces in the Bronx, adjacent to Yankee Stadium. The subject property also includes two 1-story commercial buildings. The subject site comprises, a total of 16.80 acres or, 731,769 square feet of land area. The subject property is anchored by Target, BJ’s Wholesale Club, and Home Depot, which lease a total of 443,500 square feet or 48.6 percent of the property. It should be noted that the majority of the subject property is net leased long term at below current market rent levels. Moreover, 53.1 percent of the subject retail space (484,324 SF) is net leased to credit tenants. The subject property is ground leased for an initial 49 year base term through September 13, 2055. Thereafter, the tenant possesses five consecutive 10-year renewal options, which could extend the lease through September 13, 2105. Assessor's Parcel Number: Block 2356; Lots 20 and 25 & Block 2357; Lots 35, 40, 42, and 45 Interest Appraised: Leasehold Interest Date of Value: June 10, 2015 Date of Inspection: June 10, 2015 Ownership: Fee: City of New York Leaseholder: BTM Development Partners LLC in care of Related Companies GATEWAY CENTER AT BRONX TERMINAL MARKET EXECUTIVE SUMMARY VI Highest and Best Use If Vacant: A multi-level retail power center with a parking garage developed to the highest density feasible. As Improved: As currently improved. Site & Improvements Land Area: 16.80 acres; 731,769 square feet Zoning: C4-4; General Central Commercial District Number of Stories: 4-level retail power center building and 6-level parking garage. Year Built: 2009 Gross Building Area (GBA): Retail Building: 969,019 square feet Parking Garage: 945,048 square feet Total GBA: 1,914,067 square feet (Per Tax Assessor) Gross Leasable Area (GLA): RETAIL