Integra Realty Resources Portland

Appraisal of Real Property

Cully Boulevard Plaza Retail Property 6723 ‐ 6921 NE. Killingsworth St. Portland, Multnomah County, Oregon 97218 Client Reference: Contract 213006

Prepared For: Portland Development Commission

Effective Date of the Appraisal: December 16, 2014

Report Format: Self‐Contained Appraisal Report

IRR ‐ Portland File Number: 134 ‐2014‐0646

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Cully Boulevard Plaza 6723 ‐ 6921 NE. Killingsworth St. Portland, Oregon

Integra Realty Resources 1220 SW Morrison St. T 503.478.1002 Portland Suite 800 F 503.274.8630 Portland, OR 97205 www.irr.com

January 15, 2014

Bruce Wood

Portland Development Commission 222 NW Fifth Avenue Portland, OR 97209‐3859

SUBJECT: Market Value Appraisal Cully Boulevard Plaza 6723 ‐ 6921 NE. Killingsworth St. Portland, Multnomah County, Oregon 97218 Client Reference: Contract 213006 IRR ‐ Portland File No. 134‐2014‐0646

Dear Mr. Wood:

Integra Realty Resources – Portland is pleased to submit the accompanying appraisal of the referenced property. The purpose of the appraisal is to develop an opinion of the market value of the fee simple interest in the property. As requested, we also estimate market rent for the property. The client for the assignment is Portland Development Commission, and the intended use is for toDraft assist the client in acquisition and lending decisions. The appraisal is intended to conform with the Uniform Standards of Professional Appraisal Practice (USPAP), the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, applicable state appraisal regulations, and the appraisal guidelines of Portland Development Commission. The appraisal is also prepared in accordance with the appraisal regulations issued in connection with the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).

To report the assignment results, we use the Appraisal Report option set forth in Standards Rule 2‐2(a) of the 2014‐2015 edition of USPAP. This edition of USPAP establishes only minimum standards for the contents of an appraisal report and eliminates standards for a more comprehensive reporting format (i.e., the Self‐Contained Appraisal Report) that was available as an option previously. Nevertheless, USPAP permits appraisers to prepare a more

Bruce Wood Portland Development Commission January 15, 2014 Page 2

comprehensive report if it is appropriate to the intended use and intended users of the appraisal.

In this assignment, we are providing a report that meets the former requirements for a Self‐ Contained Appraisal Report that were contained in Standards Rule 2‐2(a) of the 2012‐2013 edition of USPAP. This reporting format contains the greatest depth and detail of the reporting options that were previously (and are currently) available under USPAP. It describes and explains the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions.

The subject is an existing L‐shaped commercial property containing 25,991 square feet of gross leasable area. The improvements were constructed in 1951. In the past, the building was occupied by several adult entertainment and restaurant businesses. Currently portions of the building are occupied by a taco restaurant and an adult entertainment business on a month‐to‐month basis.e Th building is in fair to poor condition, and re‐tenanting will require significant interior demolition as well as exterior repairs. The site area is 2.19 acres or 95,396 square feet.

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Bruce Wood Portland Development Commission January 15, 2014 Page 3

Based on the valuation analysis in the accompanying report, and subject to the definitions, assumptions, and limiting conditions expressed in the report, our opinion of value is as follows:

Value Conclusion Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value Fee Simple December 16, 2014 Underlying Land Value $1,900,000 Building Shell Value $600,000 Overall Indicated Value $2,500,000 Market Rent SF NNN Rent per SF per Year Anchor Space 6,000 to 12,000 $12.00 to $15.00 Restaurant Space 1,500 to 2,500 $18

Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions. 1. Our inspection was limited by a large volume of personal property stored in the building, which made access difficult. Further, parts of the building had to be inspected without lighting (using flashlights only), and we did not have access to the Mexican restaurant on the west end of the building. We primarily rely on the building inspector's report, which was also somewhat limited in scope, when analyzing conditions of the building. 2. The cost of interior demolition assumes that there are no hazardous substances. It is estimated based on "typical" building configuration, and the estimate is very approximate. We recommend that the client obtain a professional estimate. Our value conclusions are also subject to the following hypothetical conditions: 1. Large portions of the building are used for storage of personal property. Our analysis and value conclusion is based on the assumption that fixtures and personal property have been removed in order to facilitate interior demolition. 2. The concluded value excludes the used restaurant equipment. We are not qualified to estimate the salvage value, if any, of the equipment.

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Bruce Wood Portland Development Commission January 15, 2014 Page 4

If you have any questions or comments, please contact the undersigned. Thank you for the opportunity to be of service.

Respectfully submitted,

Integra Realty Resources ‐ Portland

Lenka M. Keith, MAI, MRICS Brian A. Glanville, MAI, CRE, FRICS Certified General Real Estate Appraiser Certified General Real Estate Appraiser OR Certificate # C000784 (Exp. 09/30/2015) OR Certificate # C000160 (Exp. 04/30/2015) Telephone: 503‐478‐1009 Telephone: 503‐478‐1002 Email: [email protected] Email: [email protected]

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Table of Contents

Summary of Salient Facts and Conclusions 1 Analysis and Adjustment of Sales 83 Market Rent Analysis 87 General Information 3 Reconciliation and Conclusion of Value 95 Identification of Subject 3 Current Ownership and Sales History 3 Certification 96 Purpose of the Appraisal 3 Assumptions and Limiting Conditions 98 Definition of Market Value 3 Definition of As Is Market Value 4 Addenda Definition of Property Rights Appraised 4 A. Appraiser Qualifications Intended Use and User 4 B. Comparison of Report Formats Applicable Requirements 4 C. Definitions Report Format 5 D. Financials and Property Information Prior Services 5 E. Comparable Data Scope of Work 5 Economic Analysis 8 Portland MSA Area Analysis 8 Surrounding Area Analysis 17 Retail Market Analysis 24 Multifamily Market Analysis 38 Property Analysis 51 Land Description and Analysis 51 Improvements Description and Analysis 56 Real Estate Taxes 63 Highest and Best Use 64 Valuation 67 Valuation Methodology 67 Land Valuation 68 Adjustment Factors 73 Analysis and Adjustment of Sales 75 Land Value Conclusion Draft77 Sales Comparison Approach 78 Adjustment Factors 82

Cully Boulevard Plaza Summary of Salient Facts and Conclusions 1

Summary of Salient Facts and Conclusions

Part One Property Name Cully Boulevard Plaza Address 6723 ‐ 6921 NE. Killingsworth St. Portland, Multnomah County, Oregon 97218 Property Type Retail ‐ Strip/Convenience Center Owner of Record Kandace & Danielle Desmarais Tax ID R317325 (1N2E17CD TL 2000) and R317300 (1N2E17CD TL 2100) Land Area 2.19 acres; 95,396 SF Gross Building Area 25,991 SF Gross Leasable Area 25,991 SF Percent Leased 0% (Partly rented month‐to‐month) Year Built 1951 Zoning Designation EXdh, Central Employment Highest and Best Use ‐ As if Vacant Retail use Highest and Best Use ‐ As Improved Continued retail use Exposure Time; Marketing Period 6‐12 months; 6‐12 months Effective Date of the Appraisal December 16, 2014 Property Interest Appraised Fee Simple Market Value Indications Value of Underlying Land $1,900,000 ($20.00 per SF of Site) Shell Building Value $600,000 ($30.00 per SF of Building Shell) Overall As‐Is Value $2,500,000 Market Rent Anchor $12.00 to $15.00 per SF per Year Restaurant $18.00 per SF per Year The values reported above are subject to the definitions, assumptions, and limiting conditions set forth in the accompanying report of which this summary is a part. No party other than Portland Development Commission and Prospective buyers, and other lenders such as Craft3, Vibrant Village Foundation, Enterprise Connumity Fund and the Conservation Fund may use or rely on the information, opinions, and conclusions contained in the report. It is assumed that the users of the report have read the entire report, including all of the definitions, assumptions, and limiting conditions Draft

Cully Boulevard Plaza Summary of Salient Facts and Conclusions 2

Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions. 1. Our inspection was limited by a large volume of personal property stored in the building, which made access difficult. Further, parts of the building had to be inspected without lighting (using flashlights only), and we did not have access to the Mexican restaurant on the west end of the building. We primarily rely on the building inspector's report, which was also somewhat limited in scope, when analyzing conditions of the building. 2. The cost of interior demolition assumes that there are no hazardous substances. It is estimated based on "typical" building configuration, and the estimate is very approximate. We recommend that the client obtain a professional estimate. Our value conclusions are also subject to the following hypothetical conditions: 1. Large portions of the building are used for storage of personal property. Our analysis and value conclusion is based on the assumption that fixtures and personal property have been removed in order to facilitate interior demolition. 2. The concluded value excludes the used restaurant equipment. We are not qualified to estimate the salvage value, if any, of the equipment.

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Cully Boulevard Plaza General Information 3

General Information

Identification of Subject The subject is an existing L‐shaped commercial property containing 25,991 square feet of gross leasable area. The improvements were constructed in 1951. The site area is 2.19 acres or 95,396 square feet.

Property Identification Property Name Cully Boulevard Plaza Address 6723 ‐ 6921 NE. Killingsworth St. Portland, Oregon 97218 Tax ID R317325 (1N2E17CD TL 2000) and R317300 (1N2E17CD TL 2100)

Current Ownership and Sales History The owner of record is Kandace & Danielle Desmarais. This party acquired the property from Bruno Thaddeus on July 31, 1997 for a price of $700,000. The transaction is recorded in 97115871.

The property is under contract with a pending price of $2,750,000. The buyers are Habitat for Humanity, hacienda CDC, and Verde. The pending price includes some personal property of unknown value (excluded from our analysis and conclusions) and used restaurant equipment. According to the selling agent, the property was listed for approximately two months, and there was one competing offer. We were unable to communicate with the listing agent to confirm this information or circumstances of the second offer. To the best of our knowledge, no sale or transfer of ownership has occurred within the past three years.

Purpose of the Appraisal The purpose of the appraisal is to develop an opinion of the market value of the fee simple interest in the property as of the effective date of the appraisal, December 16, 2014, and to estimate market rent. The appraisal is valid only as of the stated effective date. Definition of Market ValueDraft 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:

 Buyer and seller are typically motivated;  Both parties are well informed or well advised, and acting in what they consider their own best interests;

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 A reasonable time is allowed for exposure in the open market;  Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and  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: Code of Federal Regulations, Title 12, Chapter I, Part 34.42[g]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472)

Definition of As Is Market Value As is market value is defined as, “The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal’s effective date.”

(Source: The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, Chicago, Illinois, 2010; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77471)

Definition of Property Rights Appraised Fee simple estate is defined as, “Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.”

(Source: The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, Chicago, Illinois, 2010)

Intended Use and User The intended use of the appraisal is to assist the client in acquisition and lending decisions. The client and intended user is Portland Development Commission. Other intended users include prospective buyers and other lenders such as Craft3, Vibrant Village Foundation, Enterprise Community Fund and the Conservation Fund. It is acknowledged that the client may provide the report to the intended users identified above or other Agents or assigns at the client’s discretion. Applicable Requirements Draft This appraisal is intended to conform to the requirements of the following:

 Uniform Standards of Professional Appraisal Practice (USPAP);  Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute;  Applicable state appraisal regulations;  Appraisal requirements of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), revised June 7, 1994;

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 Interagency Appraisal and Evaluation Guidelines issued December 10, 2010;  Appraisal guidelines of Portland Development Commission. Report Format This report is prepared under the Appraisal Report option of Standards Rule 2‐2(a) of the 2014‐2015 edition of USPAP. This edition of USPAP establishes only minimum standards for the contents of an appraisal report and eliminates standards for a more comprehensive reporting format (i.e., the Self‐ Contained Appraisal Report) that was available as an option previously. Nevertheless, USPAP permits appraisers to provide a more comprehensive report if it is appropriate to the intended use and intended users of the appraisal.

In this assignment, we provide a report that meets the former requirements for a Self‐Contained Appraisal Report that were set forth in Standards Rule 2‐2(a) of the 2012‐2013 edition of USPAP. This report format contains the greatest depth and detail of the reporting options that were previously (and are currently) available under USPAP. It describes and explains the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions. For additional information, please refer to Addendum B – Comparison of Report Formats.

Prior Services USPAP requires appraisers to disclose to the client any other services they have provided in connection with the subject property in the prior three years, including valuation, consulting, property management, brokerage, or any other services. We have not performed any 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.

Scope of Work To determine the appropriate scope of work for the assignment, we considered the intended use of the appraisal, the needs of the user, the complexity of the property, and other pertinent factors. Our concluded scope of work is described below.

Unless otherwise noted, all comparable data was confirmed by a buyer/buyer’s representative, seller/seller’s representative, or broker involved in the transaction. The original source of the comparable sales information wasDraft either: CoStar, RMLS, Metroscan, LoopNet, public records, broker leads, other appraisal firms, or in‐house data files. Additional steps taken to gather, confirm, and analyze relevant data, are detailed in individual sections of the report.

Valuation Methodology Appraisers usually consider the use of three approaches to value when developing a market value opinion for real property. These are the cost approach, sales comparison approach, and income capitalization approach. Use of the approaches in this assignment is summarized as follows:

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Approaches to Value Approach Applicability to Subject Use in Assignment Cost Approach Not Applicable Not Utilized Sales Comparison Approach Applicable Utilized Income Capitalization Approach Not Applicable Not Utilized

The sales comparison approach is the only reliable valuation method for the subject due to the following:

 There is an active market for properties similar to the subject, and sufficient sales data is available for analysis.  This approach directly considers the prices of alternative properties having similar utility.

The income approach is not applicable to the subject because:

 The property as‐is is not in a rentable condition.

The cost approach is not applicable to the subject considering the following:

 The age of the property makes estimates of accrued depreciation very subjective.  This approach is not typically used by market participants, except for new properties. Research and Analysis The type and extent of our research and analysis is detailed in individual sections of the report. This includes the steps we took to verify comparable sales, which are disclosed in the comparable sale profile sheets in the addenda to the report. Although we make an effort to confirm the arms‐length nature of each sale with a party to the transaction, it is sometimes necessary to rely on secondary verification from sources deemed reliable.

Inspection Lenka M. Keith, MAI, MRICS, conducted an interior and exterior inspection of the property on December 16, 2014 and also inspected the exteriors of comparable sales and rentals. Brian A. Glanville, MAI, CRE, FRICS, did notDraft inspect the subject property or the comparables. The interior inspection was limited because the power has been turned off to a significant portion of the building, thus our inspection was conducted with the use of flashlights. Further, much of the building is used for storage, and the large volume of stored items restricted access to portions of the building.

Availability of Information No building plans or records regarding past maintenance were available. Our inability to obtain this information and consider it in our analysis may affect our value opinion.

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Significant Appraisal Assistance It is acknowledged that Linda D. Keel e made a significant professional contribution to this appraisal consisting of conducting research on transactions involving comparable properties.

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Cully Boulevard Plaza Portland MSA Area Analysis 8

Economic Analysis

Portland MSA Area Analysis The subject is located in the Portland‐Vancouver‐Hillsboro, OR‐WA Metropolitan Statistical Area, hereinafter called the Portland MSA, as defined by the U.S. Office of Management and Budget. The Portland MSA is 6,684 square miles in size, and is the 24th most populous metropolitan area in the nation. The U.S. Census Bureau's definition for the MSA is currently all of the following counties: Clackamas County, Oregon; Columbia County, Oregon; Multnomah County, Oregon; Washington County, Oregon; Yamhill County, Oregon; Clark County, Washington; and Skamania County, Washington. The Washington counties are separated from Oregon by the Columbia River. The City of Portland in located at the confluence of the Columbia and Willamette Rivers, approximately 100 miles inland from the Pacific Ocean and 180 miles south of Seattle Washington.

Population The Portland MSA has an estimated 2014 population of 2,321,299, which represents an average annual 1.1% increase over the 2010 census of 2,226,009. The Portland MSA added an average of 23,823 residents per year over the 2010‐2014 period, and its annual growth rate exceeded the State of Oregon rate of 0.7%.

Looking forward, the Portland MSA's population is projected to increase at a 1.0% annual rate from 2014‐2019, equivalent to the addition of an average of 23,352 residents per year. The Portland MSA's growth rate is expected to exceed that of Oregon, which is projected to be 0.7%.

Employment Total employment in the PortlandDraft MSA is currently estimated at 1,055,000 jobs. Between year‐end 2003 and the present, employment rose by 105,500 jobs, equivalent to a 11.1% increase over the entire period. There were gains in employment in eight out of the past ten years despite the national economic downturn and slow recovery. The Portland MSA's rate of employment growth over the last decade surpassed that of Oregon, which experienced an increase in employment of 6.9% or 109,500 jobs over this period.

A comparison of unemployment rates is another way of gauging an area’s economic health. Over the past decade, the Portland MSA unemployment rate has been generally lower than that of Oregon, with an average unemployment rate of 7.5% in comparison to a 7.9% rate for Oregon. A lower unemployment rate is a positive indicator.

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Oregon's payroll employment rose above its pre‐recession peak in November. Seasonally adjusted payroll employment jumped to a record level of 1,740,800, which was 3,000 above the prior peak reached in December 2007.

November marked the largest one‐month gain for Oregon since comparable records began in 1990. Seasonally adjusted nonfarm payroll employment rose by 11,200. This followed a revised gain of 7,400 in October, with growth not as strong as the originally estimated gain of 9,900. Oregon's unemployment rate stood at 7.0 percent in November, the same as the prior two months.

The Portland MSA has outperformed Oregon in thee rat of job growth over the past two years.

Employment Sectors The composition of the Portland MSA job market is depicted in the following chart, along with that of Oregon. Total employment for both areas is broken down by major employment sector, and the sectors are ranked from largest to smallest based on the percentage of Portland MSA jobs in each category. Draft

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Employment Sectors ‐ 2013

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

19.1% Trade; Transportation; and Utilities 19.5% 14.7% Education and Health Services 14.6% 14.6% Professional and Business Services 12.5% 13.9% Government 17.4% 11.0% Manufacturing 10.3% 10.0% Leisure and Hospitality 10.2% 6.0% Financial Activities 5.3% 5.0% Mining & Construction 4.8% 3.5% Other Services 3.5% 2.2% Information 1.9%

Portland MSA Oregon

Source: Bureau of Labor Statistics and Economy.com

The Portland MSA has greater concentrations than Oregon in the following employment sectors:

1. Education and Health Services, representing 14.7% of Portland MSA payroll employment compared to 14.6% for Oregon as a whole. This sector includes employment in public and private schools, colleges, hospitals, and social service agencies. 2. Professional and Business Services, representing 14.6% of Portland MSA payroll employment compared to 12.5% for Oregon as a whole. This sector includes legal, accounting, and engineering firms, as well as management of holding companies. 3. Manufacturing, representingDraft 11.0% of Portland MSA payroll employment compared to 10.3% for Oregon as a whole. This sector includes all establishments engaged in the manufacturing of durable and nondurable goods. 4. Financial Activities, representing 6.0% of Portland MSA payroll employment compared to 5.3% for Oregon as a whole. Banking, insurance, and investment firms are included in this sector, as are real estate owners, managers, and brokers.

The Portland MSA is underrepresented in the following sectors:

1. Trade; Transportation; and Utilities, representing 19.1% of Portland MSA payroll employment

Cully Boulevard Plaza Portland MSA Area Analysis 11

compared to 19.5% for Oregon as a whole. This sector includes jobs in retail trade, wholesale trade, trucking, warehousing, and electric, gas, and water utilities. 2. Government, representing 13.9% of Portland MSA payroll employment compared to 17.4% for Oregon as a whole. This sector includes employment in local, state, and federal government agencies. 3. Leisure and Hospitality, representing 10.0% of Portland MSA payroll employment compared to 10.2% for Oregon as a whole. This sector includes employment in hotels, restaurants, recreation facilities, and arts and cultural institutions. Major Employers Major employers in the Portland MSA are shown in the following table.

Many of these employers, especially those in the private sector, are expanding their area employment. Intel continues to expand their manufacturing facility in Hillsboro, with an additional 1,500 employees expected over the coming years. Four of the ten largest employers are health care providers (Providence, OHSU, Legacy, and Kaiser), all of which continue to grow both in the number of employees. Nike, like Intel, is also in an expansionary phase and is currently exploring options to expand their Beaverton campus. Public employers, on the other hand,Draft have seen their employment volumes decline over the past few years due to budgetary problems. Both state and local government have experienced either layoffs or hours reductions following the recession. Those pressures may be reduced as tax receipts stabilize, but government employment is not so stable as it was once perceived to be.

Most recent data indicates that gains across the major industries in November were broad‐based. Six of the major industries each added more than 1,000 jobs. It is rare for so many industries to gain that many jobs in one month. Retail trade (+2,200 jobs), professional and business services (+1,900), leisure and hospitality (+1,700), construction (+1,400), wholesale trade (+1,100), and government (+1,100) were the industries adding the most jobs.

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Gross Domestic Product The Portland MSA is the 19th largest metropolitan area economy in the nation based on Gross Domestic Product (GDP).

Economic growth, as measured by annual changes in GDP, has been considerably higher in the Portland MSA than Oregon overall during the past eight years. The Portland MSA has grown at a 5.5% average annual rate while Oregon has grown at a 3.9% rate. As the national economy improves, the Portland MSA continues to perform better than Oregon. GDP for the Portland MSA rose by 5.1% in 2012 while Oregon's GDP rose by 3.9%.

The Portland MSA has a per capita GDP of $62,028, which is 29% greater than Oregon's GDP of $48,069. This means that Portland MSA industries and employers are adding relatively more value to the economy than their counterparts in Oregon.

Household Income The Portland MSA is more affluent than Oregon. Median household income for the Portland MSA is $55,113, which is 17.0% greater thanDraft the corresponding figure for Oregon.

The following chart shows the distribution of households across twelve income levels. The Portland MSA has a greater concentration of households in the higher income levels than Oregon. Specifically, 35% of Portland MSA households are at the $75,000 or greater levels in household income as

Cully Boulevard Plaza Portland MSA Area Analysis 13

compared to 28% of Oregon households. A lesser concentration of households is apparent in the lower income levels, as 32% of Portland MSA households are below the $35,000 level in household income versus 38% of Oregon households.

Household Income Distribution ‐ 2014

0.5% $500,000 and more 0.4% 1.9% $250,000 ‐ 499,999 1.4% 1.4% $200,000 ‐ $249,999 1.1% 4.5% $150,000 ‐ $199,999 3.3% 4.8% $125,000 ‐ $149,999 3.6% 8.1% $100,000 ‐ $124,999 6.8% 13.2% $75,000 ‐ $99,999 11.7% 19.5% $50,000 ‐ $74,999 18.9% 14.1% $35,000 ‐ $49,999 15.0% 10.2% $25,000 ‐ $34,999 11.6% 9.7% $15,000 ‐ $24,999 12.0% 12.0% Less than $15,000 14.2%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Portland‐Vancouver et al, OR‐WA Oregon Source: Cl aritas

Education and Age Residents of the Portland MSA have a higher level of educational attainment than those of Oregon. An estimated 34% of Portland MSA residents are college graduates with four‐year degrees, versus 29% of Oregon residents. People in the Portland MSA are slightly younger than their Oregon counterparts. The median age for the Portland DraftMSA is 38 years, while the median age for Oregon is 39 years.

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Land Use With the passage of Senate Bill 100 in 1973, the Oregon legislature established the Land Conservation and Development Commission (LCDC) and charged them with establishing a series of goals for state‐ wide land use. Under Goal 14, Urbanization, the LCDC instituted the concept of the Urban Growth Boundary (UGB) for all Oregon cities. The UGB for the Portland region (excluding Clark and Skamania Counties), as set forth by the Metro regional government, was approved by the LCDC in 1980.

The goal of the boundary is to control sprawling development by encouraging efficient use of urban land. The UGB promotes infill development and higher density, while preserving farm and forest lands outside the boundary. Every five years, the Metro government is required to conduct a land supply analysis to determine if there is sufficient inventory within the UGB to represent a 20‐year supply for housing and economic development. The “location factors” used to determine setting or adjusting the boundary includes the efficient use of land, the protection of agricultural land at the city edge, and the provision of cost‐effective public Draftservices. The UGB grew in small increments until 1998, when about 3,500 total acres were added to several outlying areas. By 2000, there were about 1.3 million people living within the UGB’s 236,000 acres. Metro approved another expansion to the UGB in December 2002, encompassing 18,638 acres. Most of this land was added for a projected 38,657 housing units with schools and parks, while 2,671 acres were set aside specifically for job development. The most recent expansion was in June 2004, when the boundary was modified to include an additional 1,940 acres needed to satisfy growing industrial demand in the region. Metro was able to lower the required additional acreage by including land already inside the UGB but not yet zoned as industrial, and by recalculating the efficiency with which land inside the boundary is redeveloped for industrial use. The addition to the UGB was lauded by many who felt that further expansion assists in job creation and boosts the local economy.

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The Metro UGB expansion process was scheduled to begin again in 2007, but the Oregon Legislature passed Senate Bill 1011, which granted Metro a two‐year extension and altered the process of designating reserve lands. Areas adjacent to the boundary can now be designated as urban or rural reserves. Under the new law, urban reserves are first to be brought into the growth boundary, while rural reserves are excluded from urbanization for 40 to 50 years. Metro designates urban reserves, while the subject County designates rural reserves; however, they must reach unanimous agreement. This new system was first utilized in the 2009 expansion cycle, and will be the basis for expansion going forward.

The most recent UGB expansion occurred in October 2011. That expansion included primarily new residential lands in Hillsboro, Beaverton, and Tigard. There were additional industrial lands included in the UGB along the Sunset Highway (Hwy 26) in Hillsboro. Because of the existing availability of available lands in Happy Valley and the Damascus area, little consideration was given to Clackamas County area expansions.

Conclusion The Portland MSA is taking on speed with its economic recovery from the Great Recession. In 2013 metro area employers added 15,900 jobs for a growth rate of 1.6% over 2012.1 The majority of this growth was attributed to new private sector jobs. Data from the Oregon Employment Department shows that the Portland area has regained over two‐thirds of the jobs lost in the Great Recession.

Recovery for the entire State of Oregon is also continuing at increasing speed. Oregon added 37,300 jobs in 2013, more than were created in 2011 and 2012 combined2. Although, as the Office of Economic analysis states in their report, another 53,900 jobs are still needed to close the gap on the nearly 150,000 jobs lost during the Great Recession3.

Economists and policymakers are still concerned about conditions in foreign markets and how they could impact Oregon. Much of Europe is still in a recession, and there are signs of slowing in China’s economic growth. China is Oregon’s biggest export destination (in 2010 about $4 billion of Oregon’s $17.7 billion in exports went to China). Additional concerns within the United States include cuts in government funding, as well as increases in the payroll tax.

Over the long term, the Portland MSA will benefit from a growing population base and higher income and education levels. Although the Portland MSA experienced a decline in the number of jobs over the past decade, it has maintained a Draftgenerally lower unemployment rate than Oregon during this time, which is a positive indicator. The metropolitan area continues to retain and attract high tech industry, which is a significant component of the regional GDP. Moreover, the Portland MSA exhibits both a higher rate of GDP growth and a higher level of GDP per capita than Oregon overall. Other positive factors include increases in real income and a recovery in the housing market that started in early 2012 and continues to gain momentum. Based on these factors, we anticipate that the gradual recovery of the Portland MSA economy will continue with more sustained employment growth, strengthening the demand for real estate.

1 Oregon Employment Department, Portland Metro Labor Trends, February 2014 2. Ibid, November 2012 to November 2013 job gain 3 Ibid

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Area Map

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Cully Boulevard Plaza Surrounding Area Analysis 17

Surrounding Area Analysis The subject is located along Highway 30 (aka Portland Highway) in the Cully neighborhood of Northeast Portland, about one mile southeast of the Portland International Airport and 1.4 miles west of the I‐205 freeway.

Boundaries The boundaries of the Cully neighborhood are outlined below. The subject is highlighted in green.

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Cully Boulevard Plaza Surrounding Area Analysis 18

Access and Linkages Primary vehicular access to the subject’s immediate vicinity is via two Major City Traffic Streets: NE Portland Highway (Highway 30) and NE Killingsworth Street. Other significant arterials include Sandy Blvd and NE 82nd Avenue. NE 82nd Avenue is also known as State Highway 213, Cascade Highway, which was historically the primary north‐south highway in East Portland as well as the primary access route to Portland International Airport prior to the completion of the I‐205 freeway in the 1980s. Sandy Blvd’s diagonal route northeast to southwest across northeast Portland reflects its history as one of the major routes into Portland as its alignment pre‐dated the subdivisions and street alignments on either side.

The subject is located along Tri‐Met’s bus route No. 72, which provides a direct connection to the MAX light rail at NE 82nd Avenue and NE Halsey Street and I‐84 freeway.

Traffic Counts The map inset below, which was obtained from the Site to Do Business (www.stdb.com), shows traffic counts on the major roadways in the subject’s vicinity.

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Cully Boulevard Plaza Surrounding Area Analysis 19

Population and Income A demographic profile of the surrounding area, including population, households, and income data, is presented on the next page. Our comparison of demographic trends includes the subject’s immediate area (within a 5‐minute drive time), a larger area within a 10‐minute drive, and the City of Portland. The areas within a 5‐ and 10‐minute drive are depicted in the map below.

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Cully Boulevard Plaza Surrounding Area Analysis 20

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Population The population in the 5‐ and 10‐minute areas grew at materially slower rate between 2010 and 2014 than the Portland MSA overall. This is especially true of the smaller 5‐minute area primarily due to the fact that land uses to the north of Portland Highway are predominantly industrial, ande there is littl housing located north of NE Portland Highway. Over the next five years the population within all three areas is forecast to grow at higher rates.

Housing Tenancy The majority of the housing units within the 5‐minute drive time are owner‐occupied, and the ±60% ratio is well above the Portland MSA overall.

Income The median household income in the 5‐minute area ($52,915) is only about 92% of the median household income in the Portland MSA overall.

Land Use The area is suburban in character and substantially developed. The zoning map inset below shows the zoning pattern in the subject’s vicinity.

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Cully Boulevard Plaza Surrounding Area Analysis 22

As the map suggests, uses to the north are predominantly industrial and to the south the neighborhood is residential. Retail uses in the neighborhood are limited, and are primarily located along NE Sandy Blvd and portions of NE 82nd Avenue south of NE Sandy Blvd. The nearest shopping center is Cascade Station north of the Portland International airport; however, this center consists primarily of big box and restaurant tenants.

Notable Development Very little recent transition has occurred in the immediate area over the last 20‐plus years while the path of retail and hospitality development leaped north of the NE Columbia Blvd corridor to the Airport Way area; however, there are two new upcoming developments: Hacienda Community Development broke ground on a $3 million project on the southeast corner of NE Killingsworth and Cully (south and across from the subject); this development will consist of a 2‐story headquarters office and ground floor retail space. Also of importance is Cully Park, a 25‐acre former sand and gravel mine and later construction landfill that is being converted to a community park. A community garden adjacent to the site opened last year.

Upcoming development

Outlook and Conclusions The area is in a prolonged mature stage of its life cycle. Recent development activity has been very limited, and we anticipate that property values will remain generally stable in the near future. Draft

Cully Boulevard Plaza Surrounding Area Analysis 23

Surrounding Area Map

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Cully Boulevard Plaza Retail Market Analysis 24

Retail Market Analysis Data Sources To analyze market conditions on the local (Portland metro area) level, we rely primarily on quarterly reports generated by CoStar with supplemental information from brokerage firms with a strong local presence such as Norris Beggs & Simpson, Marcus & Millichap, Norris & Stevens, Kidder Matthews, and others as referenced below.

Key Driving Forces The retail sector is directly impacted by consumer spending and employment, two key forces shaping the economy.

Consumers ratcheted down retail spending sharply in 2008‐09, but retail sales have since resumed growth that characterized the earlier 2000s, with the notable distinction that spending is now driven more by current disposable income rather than credit. While the steady growth in retail sales is a step in the right direction, internet retailing continues to expand, putting pressure on traditional retailers to downsize their footprint. According to the July 2014 Advance Monthly Sales for Retail and Food Services report published by the U.S. Census Bureau, retail trade sales in were up 0.6% from June 2014, and sales were up 4.5% over the same period last year.

Historical trends in retail sales are depicted in the following graph:

Trends in U.S. Retail Sales Excluding Motor Vehicle and Parts Dealers $310,000$320,000 $310,000 $300,000 $300,000 $290,000$290,000

$280,000$280,000 $270,000 $270,000$260,000 $260,000$250,000 $240,000 $250,000 $230,000 Draft $240,000$220,000 Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Jun Sep Dec ‐ Mar Jun Sep Dec ‐ Mar Jun Sep Dec ‐ Mar Jun Sep Dec ‐ Mar Jun Sep Dec ‐ Mar Jun Jun ‐ ‐ ‐ ‐ ‐ ‐ ‐ 09 ‐ 10 ‐ 11 ‐ 12 ‐ 13 ‐ 14 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 09 ‐ 10 ‐ 11 ‐ 12 ‐ 13 ‐ 14 ‐ ‐ ‐ ‐ ‐ 09 10 11 12 13 14 14 13 12 11 10 09 ‐ ‐ ‐ ‐ ‐ 10 11 12 13 14 13 12 11 10 09 13 12 11 10 09 14 13 12 11 10

Source: http://www.census.gov/retail/marts/www/timeseries.html

Cully Boulevard Plaza Retail Market Analysis 25

National Retail Market Overview Vacancy National retail vacancy hit its recessionary peak of 7.6% in 4Q 2009. By the end of 2010, vacancy was down to 6.9%. Since then, the downward trend has continued but has moderated to a slow pace. Overall on a national level the retail sector ended 2014 with a respectable vacancy of 6.1%. Portland retail vacancy has consistently been below national levels but mirrors the overall national trend, and ended 2014 at 4.8%, approaching pre‐recession lows. A trend of improvement is also evidenced by job growth in the retail sector. According to a January 2015 report by the National Retail Federation, retail employment for 2014 climbed by 176,000 jobs over the year before, according to NRF’s calculations, which do not include automobile dealerships, gasoline stations or restaurants.

Vacancy Trends 7.5% National 7.0% Portland

6.5%

6.0%

5.5%

5.0%

4.5% Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2

14 14 14 14 13 13 13 13 12 12 12 12 11 11 11

Rental Rates Average quoted asking rental rates in the U.S. retail market have been increasing steadily since mid‐ 2013, and have reached a new high of $14.90 per square foot at the end of 2014. Portland has been consistently outperforming the national average, ending the year at $16.86 after increasing for 10 consecutive quarters. Draft

Cully Boulevard Plaza Retail Market Analysis 26

Rental Rate Trends $17.00 National $16.50 Portland

$16.00

$15.50

$15.00

$14.50

$14.00 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4

14 14 14 14 13 13 13 13 12 12 12 12 11

Deliveries for all of 2014 totaled just over 12.5 million square feet in the U.S. retail market. The table below provides a comparison of the Portland metro area with other markets in the region, as well as with national averages. As the chart illustrates, Portland has one of the lowest vacancy rates of the eight largest markets in the west. Asking rents are in the mid‐range but above the national average.

CONDITIONS IN WESTERN REGION MARKETS ‐ Q4 2014 Net Absorption as Leasable SF Absorption Deliveries SF Under Asking % of Total Under Conts. as (x1,000) Vacancy % SF YTD YTD Construction Rent Leasable % Total Leasable Las Vegas 108,977 9.3% 2,427,214 1,989,195 556,790 $15.59 2.23% 0.51% Los Angeles 456,814 4.7% 2,540,475 1,280,774 1,690,835 $25.15 0.56% 0.37% Phoenix 216,309 9.8% 2,019,402 700,237 427,089 $13.87 0.93% 0.20% Portland 106,039 4.8% 1,081,265 1,001,460 265,941 $16.86 1.02% 0.25% Sacramento 117,351 8.5% 1,622,242 604,306 465,981 $16.17 1.38% 0.40% San Diego 134,240 4.0% 1,172,524 440,099 360,891 $22.53 0.87% 0.27% San Francisco 81,338 2.1% 357,207 91,359 83,635 $34.11 0.44% 0.10% Seattle/Puget Sound 172,010 4.9% 1,885,341 352,533 453,432 $17.53 1.10% 0.26% National 12,576,644 6.1% 109,806,440 60,568,713 49,367,365 $14.90 0.87% 0.39%

Retail absorption trends in the Portland metro area have been positive since the fourth quarter 2012, and 2014 has been no exception.Draft The retail sector absorbed nearly 1.1 million square feet of space in 2014, an impressive increase from ±540,000 in 2013 and only ±142,000 in 2012.

Marcus & Millichap tracks fundamentals in 46 major retail markets nationwide, and produces a National Retail Index (NRI). The NRI ranks markets based on a series of 12‐month, forward‐looking economic and supply and demand variables. Markets are ranked based on their cumulative weighted‐ average scores for various indicators, including forecast employment growth, vacancy, construction and rents. Weighing both the forecasts and incremental change over the next year, the index is designed to indicate relative supply and demand conditions at the market level. According to the 2014 National Retail Report, Portland ranks 21stout of 46 markets, and down from 12th place in 2013, which represented the largest drop among western markets. This is attributed primarily to job growth not

Cully Boulevard Plaza Retail Market Analysis 27

translating to rent gains; however, this report, which is published mid‐year, does not reflect the positive trends in the second half of 2014.

Investment Trends After a “dry spell” during which investors were reluctant to enter the retail sector due to the sluggish progress of the economic recovery, sales of retail properties are picking up due to both increased availability of financing and low interest rates. According to Marcus & Millichap “Demand for retail assets in the Portland market continues to rise as solid operations attract the attention of yield‐hungry investors from larger coastal markets. Out‐of‐state investors seeking 1031‐exchange opportunities are focusing their attention in suburban areas, pricing many local investors out of the single tenant arena. As a result, many buyers are searching for non‐management‐intensive strip center locations with necessity‐based tenants. Such properties on outparcels next to grocery‐anchored centers or assets with strong shadow anchors will receive multiple competitive offers. Institutions and high‐net‐worth individuals from outside the market are drawn primarily to grocery‐anchored centers. Financing has become widely available, increasing competitive bidding for acquisitions.”

Portland Metro Retail Market Conditions Vacancy The Portland retail market continues to be among the stronger markets in the nation. Overall vacancy has declined to below 5%. Vacancy is the highest in shopping center category (7.7%), which includes neighborhood, community and strip centers. This category represents about one third of the total retail space. Aside from specialty centers, which represent less than 0.6% of Portland’s inventory, the lowest vacancy is in the general retail category, which includes single‐tenant, freestanding general commercial buildings with parking except those located within shopping centers. This category represents 51% of total inventory, and enjoys a low 2.9% vacancy.

Latest Portland Retail Statistics ‐ Year‐End 2014 YTD Net YTD Under Inventory Vacancy Absorption Deliveries SF Construction Asking Rent Power Center 7,526,969 4.7% 63,883 0 0 $19.68 Specialty Center 599,386 0.0% 0 0 0 N/Ap General Retail 54,340,702 2.9% 490,919 387,298 120,292 $15.63 Shopping Center 36,173,444 7.7% 392,019 436332 145,639 $17.35 Mall 7,397,571Draft 4.5% 134,444 177,830 0 $19.63 Total Market 106,038,072 4.8% 1,081,265 1,001,460 265,931 $16.86

Cully Boulevard Plaza Retail Market Analysis 28

Construction and Absorption Over one million square feet of retail space were brought to the market in 2014, the second highest annual rate since 2008 when the market expanded by nearly 1.6 million square feet. In spite of the robust construction, demand still outpaced supply, and the market ended the year with 1.08 million square feet of net absorption. It should be noted, however, that over 50% of new deliveries were single‐tenant properties, which are typically Draftbuilt‐to‐suit, and are delivered pre‐leased.

Most notable multitenant deliveries include Mill Creek Town Center, a 154,000‐SF center anchored by Walmart (Clark County); Parkway Village at Sherwood (another Walmart‐anchored development totaling 145,000 SF); and Nyberg Rivers in Tualatin (a 93,401‐SF center anchored by Cabela’s, New Seasons and Home Goods with another 50,000 SF under construction). The most notable development currently under construction is the five‐building Kruse Village in Lake Oswego (I‐5 Corridor Submarket) totaling 68,184 square feet.

Cully Boulevard Plaza Retail Market Analysis 29

The majority of future supply currently under construction is pre‐leased, as evidenced in the next graph.

Most notable recent leases are shown on in the next table as reported by NAI Norris Beggs & Simpson.

Rental Rates Rental rates bottomed out in the middle of 2012 and have been increasing steadily since then. The Q4 2014 average asking rate in the Portland market was $16.88, which represents an increase of about 4.3% year‐over‐year, though some of the increase may be the result of significant new construction, which typically has an upward effect on average asking rate as new product typically has higher asking rents. It should also be noted that the average is based on available supply that has a published asking rent, and does not take into considerationDraft properties that have no vacancy (thus no asking rent), or properties with “negotiable” rents. Based on this methodology, average asking rent can also potentially change within a single property based on the type of available space (big box, end‐cap, etc….).

The highest asking rates are noted at Kruse Village (under construction in Lake Oswego); the rate of $38.00 NNN is the highest suburban asking rate since the pre‐recession delivery of Bridgeport Village.

Investment Trends According to Marcus & Millichap, the stable economy and steady returns are attracting buyers to the Portland metro. Many of these investors are coming from California or Seattle seeking higher yields;

Cully Boulevard Plaza Retail Market Analysis 30

net‐leased, single‐tenant properties in urban infill areas remain the dominant target of many buyers. According to Marcus & Millichap, cap rates for multi‐tenant properties begin in the low‐6 percent area for a strong grocery‐anchored center and are typically 100 basis points higher for small suburban strip centers. Cap rates for single‐tenant assets are typically in the 5 to 6 percent range, but a few net‐leased properties with a long‐term corporate lease may change hands below 5 percent.

The three largest transactions in 2014 are listed below. The largest retail‐only transaction that has occurred within the last four quarters in the Portland market is the sale of The Mall 205 & Plaza 205 in Portland. The two shopping centers totals 478,239 square feet and sold for $76,500,000, or $159.96 per square foot on 7/31/2014, at a 6.67% cap rate.

Subject Market Area The subject is generally located in the Gateway submarket as defined by Costar; however, to better understand demand for “vintage” retail properties in older, well established neighborhoods, our analysis also includes the Close‐in Northeast neighborhood and focuses on retail properties with overall size below 50,000 square feet, which best represent the subject. Distribution of retail properties within this area is depicted in the map below. Draft

Cully Boulevard Plaza Retail Market Analysis 31

Retail inventory matching the parameters outlined on the preceding page totals over 6.18 million square feet in 1,216 buildings, indicating an average building area of 5,086 square feet. Roughly 75% of the existing supply dates back to pre‐1970.

Vacancy With Portland’s affinity to creative re‐use and a trend of embracing old architecture, it is not surprising that this segment of the retail market enjoys vacancy below 3%. Older eclectic neighborhoods popular with diversity‐ seeking Gen‐X and Millenials tend to attract Draftlocal, non‐chain businesses that prefer more unique and economical alternatives. In general, the area has been outperforming the MSA on the whole.

Cully Boulevard Plaza Retail Market Analysis 32

Rental Rates Rental rates range widely depending on location and interior finishes. The upper end of the range is around $25‐$30 per square foot seen in recent construction in close‐in locations such as the Alberta District and the Lloyd District. Older properties located farther out have rents ranging from about $13 to $15 per square foot, and as much as $20 per square foot in locations with good pedestrian traffic. In general, the trend in rental rates shows the impact of the recession with a dip between mid‐2011 and early 2013 as leases signed prior to the recession rolled over and re‐set to new levels, but asking rents have been rising since the low of $14.29 in early 2013 and currently stand at $16.53 NNN as of January 2015.

Lease‐up time has been relatively rapid as supply is limited; most spaces lease up within 7 months of becoming vacant, compared with an average of 19 in late 2012 and early 2013 as landlords were forced to adjust their rent expectations.Draft Construction New construction has been minimal over the past two years and consisted primarily of ground floor retail storefronts within mixed‐use projects. According to CoStar, new deliveries totaled only 58,030 square feet in 2013 and 2014, and the vast majority was located in the I‐5 corridor. Only one new retail building was constructed near the subject at 6020 NE Columbia, this is a small Starbuck’s coffee house with a drive‐thru on a ground lease. A second building (3,000 SF) is proposed for an adjacent parcel at the same location. A 12,000‐SF, two‐building strip center (Asian American Shopping Center) is proposed for a 1‐acre parcel located at NE 82nd and Siskiyou (two blocks south of NE Fremont); the timing of this project is undetermined. Two buildings are also proposed along NE Fremont Street

Cully Boulevard Plaza Retail Market Analysis 33

closer‐in at North Williams (3,200 square feet of retail on the ground floor of a 5‐story residential development) and NE 23rd Avenue (7,565 SF). Most recent construction is summarized below.

Recent Construction Building Address Year Built Rentable SF Vacancy %Ask Rent/SF 1458‐1460 NE Alberta St 2014 3,732 0.0% 6020 NE Columbia Blvd 2014 1,000 0.0% 103 N Ivy St 2013 27,960 0.0% 3900 N Mississippi Ave 2014 14,194 20.2% $13.83 4080 N Williams Ave 2014 6,238 0.0% 4090 N Williams Ave 2014 4,906 0.0% Total 58,030

Market Conditions Within a 5‐minute Drive Time Using the approximate boundaries of the 5‐minute drive time area presented on page 18, CoStar indicates that there are 397 retail properties with a rentable area of ±2,271,820 square feet and current vacancy of 2.2%, similar to the larger area discussed above.

We have also utilized retail‐specificDraft information generated from census data using the Site To Do Business. The following page shows retail industry groups arranged according to the North American Industry Classification System (NAICS) Code. The table on the next page shows the individual retail categories, retail demand and supply within each category, and the relationship between supply and demand. Categories highlighted yellow represent a shortage of retailers within these categories, or unmet demand. In other words, local residents are spending on retail goods and services at stores located outside the community, indicating untapped potential.

The following table shows the detail of household spending within each category.

Cully Boulevard Plaza Retail Market Analysis 34

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Cully Boulevard Plaza Retail Market Analysis 35

Based on these findings, the subject site would be a good candidate for auto sales, sales of clothing, gasoline sales, and limited‐service eating places. Limited‐service eating places are defined as those where patrons generally order and pay before eating and may include a wide variety of foods. Limited services may include cooking to order, bringing food to seated customers or providing off‐site delivery.

Although there is also surplus demand for used merchandise stores, the overall sales within this category are expected at only $2.2 million, considerably below the other categories.

The next table compares consumer spending among households ewithin th 5‐minute drive time with national averages. As the data suggests, residents within the area spend less than the national average in most of the categories, but one area of possible untapped potential is spending on pets, which is in line with national average and approaches annual sales of $9.3 million.

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Cully Boulevard Plaza Retail Market Analysis 36

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Additional information regarding businesses located within the 5‐minute drive time area as well as more detailed information regarding retail and restaurant spending is in Addendum D.

Cully Boulevard Plaza Retail Market Analysis 37

Conclusion Overall, the Portland retail market is showing signs of approaching a full recovery from the last recession. Increased leasing activity is placing upward pressure on rental rates while vacancy rates are declining. As competition gets stronger for desirable locations and properties, rental rates are expected to continue to escalate. Additionally, construction deliveries are at their highest point since 2007, and those properties are scattered throughout the metro area, demonstrating that the trend is not limited to Portland’s CBD. Capitalization rates are generally stable to declining for well‐positioned properties, but uncertainty regarding interest rates makes predicting the continuation of this trend difficult. Overall, the outlook is for continued improvement in the Portland market, with improved net absorption, increasing rental rates, and strong sales and investment activity.

Uses along NE Portland Highway have historically been industrial in character, and new development has been limited in the recent years. The subject site itself is a good candidate for retail and service commercial uses due to its good exposure and access and favorable (broad) zoning and proximity to residential uses to the south. The lack of recent retail development along with very low vacancy in the immediate area also bodes well for the subject. Based on information compiled by Site To Do Business, there is some untapped retail potential in several categories that should be explored. Based on current demand, retail values should experience a gradual increase over time.

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Cully Boulevard Plaza Multifamily Market Analysis 38

Multifamily Market Analysis Although the subject is currently improved with a retail building, a brief analysis of the multifamily sector is also appropriate in order to determine the highest and best use of the site as if vacant and available for development.

Portland Metro Area Apartment Market Overview Over the past two years, Portland has emerged as one of the tightest rental markets in the nation, with positive indicators and high demand sparking significant new construction. Over 4,000 new units have been added to the immediate metro‐area inventory between mid‐2012 and year‐end 2013, with projects proposed or under development anticipated to push deliveries to the highest in more than a decade. The Portland metro apartment market has displayed a persistent strong performance throughout 2013, with the US Census Bureau reporting Portland metro multifamily vacancy the second lowest in the nation as of year‐end 2013 at d3.1%, a tren which has continued into 2014.

Based on market performance in 2012 and 2013 projections, Portland was ranked 12th out of 46 major apartment markets in the National Apartment Index (NAI) as analyzed by Marcus & Millichap. In the recently released 2014 National Apartment Report, Portland has moved up two places in the NAI rankings, earning a position as a top‐10 market, based on expected employment growth (10th), low vacancy (5th), housing demand/equilibrium (9th), and investor stability indicators (9th).

IRR Viewpoint 2014 indicates that the Portland market is currently within the third stage of an expansion phase, characterized by new construction met with continued high absorption, stimulated by employment growth, moderate growth in rental rates, and low vacancy.

Supply and Developing Inventory To provide a profile of the Portland metro multifamily market, data is compiled and referenced from several sources; however REIS is the primary source utilized for presentation of metro multifamily market data. The following map displays the Portland metro market area (and submarkets) as delineated by REIS: Draft

Cully Boulevard Plaza Multifamily Market Analysis 39

The following table summarizes market indicators in the Portland metro area over the past several years, including inventory, vacancy, absorption, and rental rates.

Portland Metro Area Apartment Market Inventory Completions Absorption Effective % Year Quarter (Units) (Units) Vacancy % (Units) Rental Rate Change 2005 Annual 100,347 598 5.9% 557 $667 2.2% 2006 Annual 99,983 1,204 5.1% 408 $703 5.5% 2007 Annual 100,435 667 4.2% 1,373 $747 6.2% 2008 Annual 101,915Draft 1,764 5.2% 399 $763 2.1% 2009 Annual 103,949 2,034 6.9% 118 $757 ‐0.8% 2010 Annual 104,609 660 4.5% 3,153 $778 2.9% 2011 Annual 104,680 71 3.5% 1,086 $809 3.9% 2012 Annual 106,103 1,423 3.6% 1,258 $850 5.1% 2013 Annual 108,109 2,006 3.3% 2,263 $886 4.3% 2014 2 109,143 1,034 3.1% 1,294 $903 Source: REIS, Inc.; compiled by Integra Realty Resources, Inc.

According to REIS figures, new construction additions to Portland metro inventory have averaged around 1,200 units annually over the past ten years, with nearly 4,500 units added between 2012 through the 2nd quarter of 2014, but in spite of this rapid expansion, demand continues to outpace

Cully Boulevard Plaza Multifamily Market Analysis 40

supply. The following chart displays historical completions (new units added), absorption, and vacancy rates for the Portland metro market over the past several years.

2,231 units were projected for delivery by year‐end 2014, which would increase inventory 2.1% over year‐end 2013 figures. Although absorption outpaced completions through the first half of 2014, REIS projections indicated that the balance could shift by year‐end, with new additions to supply exceeding absorption by a margin of approximately 15% overall in 2014, widening significantly through 2015, with new additions outnumbering absorption by a rate of over four‐to‐one, and concurrently increasing vacancy. However, REIS suggests market correction and a return to supply/demand balance by 2016. Supply and Demand Comparison ‐ Projected

3,000 5.0%

2,500 4.5% 2,000 Draft 1,500 4.0%

1,000 3.5% 500

0 3.0% 2014 2015 2016 2017 2018

Completions (Units) Absorption (Units) Vacancy %

Source: REIS, Inc.; compiled by Integra Realty Resources, Inc.

Cully Boulevard Plaza Multifamily Market Analysis 41

In comparison to REIS data, some local sources indicate significantly higher numbers of developing/proposed multifamily units, primarily due to the geographic differences in data coverage. As previously noted, the REIS Portland apartment market boundaries generally encompass the primary metro area and immediately surrounding submarkets, which excludes some areas with potentially developing inventory. As a result, the additional data from other market sources suggests that current REIS forecast numbers could possibly understate additions to supply over the next few years, which could adversely impact absorption and vacancy.

Although it is anticipated that some submarkets and property sectors may experience slow absorption, increasing vacancy, and possible concessions at times as new units are introduced over the next few years, vacancy is expected to remain below historical averages, with rents continuing an upward trend. These projections suggest that the overall metro area apartment market will not become saturated and the additions to supply should not result in an overbuilt market.

Metro Area Vacancy and Rental Rate Trends The following graph displays the trends of vacancy rates in relation to effective rental rates in the metro area over the past several years based on REIS data: Vacancy Rate Vs Effective Rental Rate $1,000 8.0%

$900 6.0%

$800 4.0%

$700 2.0%

$600 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Effective Rental Rate Vacancy %

Source: REIS, Inc.; compiled by Integra Realty Resources, Inc.

Between 2004 and 2007, vacanciesDraft fell steadily and rental rates were increasing in the Portland metro market. However, as a consequence of the economic downturn and recessionary conditions, vacancy increased in 2008 and peaked at 6.9% in 2009. Correspondingly, rental rates also took a dip during this time, with 2009 reflecting negative rent growth. In 2010, vacancy began declining and rents again reflected positive growth and this trend has continued throughout 2013. Overall, within the Portland metro market, as of 2nd quarter 2014, vacancies are at their lowest and rental rates at their highest in a decade, with substantial rent growth over the past few years.

This trend is also mirrored in the following graph, which is based on historical data from the bi‐annual reports prepared by Multifamily NW, released din fall an spring, through the most recent fall 2014 publication.

Cully Boulevard Plaza Multifamily Market Analysis 42

Vacancy Rate Vs Per SF Rental Rate

$1.25 6.3% 7.0% $1.16 $1.15 $1.10 $1.22 6.0% 5.2% $1.04 $1.05 $1.00 5.0% 3.7% $0.95 3.2% 3.5% 4.0% 3.7% $0.85 $0.91 3.0% $0.79 3.1% $0.75 2.0% S/05 S/06 S/07 S/08 S/09 S/10 S/11 S/12 S/13 F/13 S/14 F/14

Rental Rate Vacancy Rate Source: Multifamily NW

In addition to REIS and MFNW, several market research and survey sources were also utilized to compile historical data regarding overall vacancy and rental rate trends in the metro market. These sources include: NAI Norris, Beggs & Simpson quarterly Multi‐Family Reports, CoStar Analytics, and US Census Bureau data.

The following chart displays reported vacancy rates from market sources, and presents the resulting average annual rate to reflect historical trends.

Vacancy Trends ‐ Average of Market Indicators

7% 5.4% 5.4% 6% 4.4% 4.0% 5% 3.8% 3.4% 2.9% 4% 2.9% 3% 2% Draft 1% 0% 2007 2008 2009 2010 2011 2012 2013 2014 Q2

CoStar US Census Bureau NBS Average

Source: CoStar, US Census Bureau, Norris Beggs & Simpson; compiled by Integra Realty Resources,

The above sources reflect overall average annual vacancy rates around 4% for the Portland metro market historically. As of 2nd quarter 2014, CoStar and NBS both report vacancy below 3%, while US Census Bureau data reports 3.3%.

Cully Boulevard Plaza Multifamily Market Analysis 43

The following graph displays historic trends in rent growth/change, based on rental rates reported by MFNW, REIS, and CoStar, as well as the average reflected by these sources.

Overall, the market indicators presented reflect average annual rent growth of 3.65% for the Portland metro market historically.

Current reports reflect continued strong conditions in the metro apartment market, with low vacancy and increasing rents continuing into 2014. However, updated survey figures indicate signs of mitigation, particularly with respect to rent growth for newer product, which has shown signs of diminishing in recent quarters. It is expected that new construction will begin toh catc up with pent‐up demand in the upcoming months and an increase in vacancy rates is anticipated. It remains to be seen if vacancy will remain below historic averages, and if rental rate growth will continue or show signs of tapering. Metro Area Multi‐Family SalesDraft Trends As one of the tightest rental markets in the nation, Portland has been experiencing strong demand from large investors and institutions, particularly from outside the local area, primarily seeking Class A properties, which has pushed transaction velocity and prices upward over the past couple years. However, the Portland market has a relatively limited number of large institutional grade assets and the continued demand has resulted in dwindling supply, and increased competition among buyers.

Despite the lack of institutional assets, investors have continued to aggressively pursue options in the Portland market due to the highly favorable conditions. 2013 saw buyers expanding into secondary or tertiary markets and/or B/C class or Value‐Add assets, driving up transaction activity and values for non‐institutional properties.

Cully Boulevard Plaza Multifamily Market Analysis 44

The following table displays historical sales data and trends for the Portland metro area since 2000.

Portland Metro ‐ Historical Multi‐Family Sales Trends Change Change Sales Change Average over Number of over Prior Volume over Prior Total Price Per Prior Year Sales Year (in Millions) Year Units Unit Year 2000 145 $245.3 4,731 $51,843 2001 215 48.3% $493.2 101.1% 8,224 $59,969 15.7% 2002 248 15.3% $504.7 2.3% 9,022 $55,942 ‐6.7% 2003 260 4.8% $551.2 9.2% 9,664 $57,017 1.9% 2004 271 4.2% $561.6 1.9% 9,552 $62,010 8.8% 2005 183 ‐32.5% $605.1 7.7% 8,436 $71,723 15.7% 2006 230 25.7% $817.4 35.1% 12,366 $70,221 ‐2.1% 2007 213 ‐7.4% $875.1 7.1% 11,210 $87,840 25.1% 2008 147 ‐31.0% $827.9 ‐5.4% 9,600 $87,665 ‐0.2% 2009 89 ‐39.5% $184.6 ‐77.7% 4,287 $67,117 ‐23.4% 2010 117 31.5% $546.7 196.2% 5,654 $112,821 68.1% 2011 156 33.3% $932.3 70.5% 10,536 $103,524 ‐8.2% 2012 190 21.8% $849.7 ‐8.9% 8,403 $104,608 1.0% 2013 208 9.5% $1,026.5 20.8% 11,189 $94,132 ‐10.0% Historical Averages 191 6.5% $644.4 27.7% 8,777 $77,602 6.6% YTD 2014* 184 $1,040.9 11,605 $131,306

As of January 2015, CoStar listing data indicates there are only four multifamily properties available in the Portland metro market at $10 million or higher, and 21 active listings for properties priced between $2 and $10 million of which 6 are located in Vancouver and 15 in Portland. Apartment inventory has diminished substantially over the past 12‐18 months, as there were over 30 listings in the $2‐$10 million range in early 2013.

Sales volume and values also influence trends in capitalization rates in the market. As of late September 2014, 184 transactions closed so far in 2014, reflecting an average sales price of $6.51 million per transaction, with average cap rates holding steady in the mid‐5% range, about 60 to 80 basis points compared with nationalDraft average, which is further evidence of the relative strength of the local market.

Submarket Analysis – Close‐In Northeast Portland The subject is located in the Inner Central Northeast Portland submarket as delineated by Multifamily Northwest (MFNW, fka Metro Multifamily Housing Association). The property also competes to some degree with the Inner Central Southeast Portland submarket.

Age of Existing Improvements The platting of the vast majority of the existing single and multi‐family neighborhoods in Portland’s central northeast date from the 1910s to 1920s, and the age of apartments ranges from 1920 to new.

Cully Boulevard Plaza Multifamily Market Analysis 45

Occupancy and Rental Rates Longitudinal surveys of multi‐family vacancies are conducted by several commercial brokerage firms (Norris, Beggs & Simpson, and Norris & Stevens), as well as the Multifamily Northwest (MFNW). The surveys by the commercial brokerage firms are quarterly while the MFNW’s are semi‐annual. Each has its own geographic, vintage, and unit size tracking criteria. For this appraisal of the subject we have selected the MFNW semi‐annual surveys.

The next two tables and charts show the semi‐annual trends in vacancy rates and per square foot rental rates in the Portland metro area overall, and in the Inner and Central Northeast Portland submarket and the Inner and Central Southeast Portland submarket from the spring 2006 survey through the fall 2014 survey.

Metro Area Apartment Statistics by Market Area Vacancy and Average Rent/SF Portland, Inner Portland, Inner & Metro Area & Central SE Central NE Vac %Rent/SF Vac %Rent/SF Vac %Rent/SF Spring 06 3.9% $0.79 2.0% $0.81 4.3% $0.93 Fall 06 3.4% $0.83 2.4% $0.85 2.7% $0.96 Spring 07 3.2% $0.83 1.6% $0.88 3.7% $1.00 Fall 07 2.9% $0.85 2.1% $0.89 2.3% $1.00 Spring 08 3.3% $0.87 1.9% $0.91 2.8% $1.01 Fall 08 3.6% $0.86 2.2% $0.92 2.9% $1.00 Spring 09 5.2% $0.91 2.4% $0.94 6.7% $0.99 Fall 09 5.9% $0.91 4.9% $1.00 6.4% $1.08 Spring 10 5.1% $0.90 4.2% $1.01 6.1% $1.10 Fall 10 4.0% $0.90 2.5% $0.97 4.5% $1.01 Spring 11 3.8% $0.94 4.3% $1.07 4.5% $1.06 Fall 11 3.3% $0.97 2.1% $1.11 3.3% $1.10 Spring 12 3.7% $1.00 1.4% $1.21 1.8% $1.13 Fall 12 3.6% $1.03 2.3% $1.23 2.6% $1.13 Spring 13 3.6% $1.04 2.9% $1.17 3.9% $1.19 Fall 13 3.1% $1.10 2.3% $1.17 2.1% $1.28 Spring 14 3.5% $1.16 3.9% $1.26 2.4% $1.29 Fall 14 3.7% $1.22 2.1% $1.28 3.6% $1.39 Vacancy Draft The next chart shows the patterns of vacancy rates in the metro area overall and in the Inner and Central Northeast and the Inner & Central Southeast submarkets.

Cully Boulevard Plaza Multifamily Market Analysis 46

Vacancy Trends by Market Area 7.5% 6.5% 5.5% 4.5% 3.5% 3.6% 2.5% 1.5% 0.5%

Metro Area Portland, Inner & Central NE Portland, Inner & Central SE Source: MFNW

Vacancy rates in the Inner and Central Northeast and Southeast submarkets have generally followed the metro‐wide pattern in vacancy. As of the fall 2014 survey, vacancy in the inner and Central Northeast and Southeast Portland submarkets is 3.6% and 2.1%, respectively, which is lower than the metropolitan average of 3.7%.

Rental Rates The semi‐annual Multifamily Northwest (MFNW) market survey does not distinguish between new construction and seasoned units. As a result, its absolute numbers are not strong indicators of rental rates for either new or vintage construction. The chart below shows trends in average per square foot rental rates over the same time period in the metro area overall and in the Inner and Central Southeast submarket. Draft

Cully Boulevard Plaza Multifamily Market Analysis 47

Average Monthly Rent/SF Trends by Market Area

$1.45 $1.39 $1.35 $1.25 $1.15 $1.05 $0.95 $0.85 $0.75

Metro Area Portland, Inner & Central NE Portland, Inner & Central SE Source: MFNW

The average per square foot rental rates in the Inner and Central Northeast and Southeast submarkets have tracked consistently above the average per square foot rental rates for the metro area overall. The spreads between the two averages have ranged from $0.06 per square foot to $0.20 per square foot. Fore th fall 2014 survey, the average rent for the Inner and Central Northeast submarket was $1.39 per square foot, while the Inner and Central Southeast Portland submarket indicated an average rent of $1.28 per square foot. Both of these average rental rates are higher than the overall metropolitan average of $1.22 per square foot. Over the last two years, the average annual appreciation in the metropolitan area was 9.22%. In this same time period, the subject’s Inner and Central Northeast submarket has recorded a higher annual rate of rent appreciation of 11.5%.

New and Proposed Construction in Submarket New multifamily construction in close‐in Portland neighborhoods has increased dramatically from the recession, when multifamily construction was nearly halted. For projects tracked by our office, we show 3,581 units currently under construction with another 9,909 units proposed for the Portland CBD and close‐in neighborhoods Draftsurrounding the CBD. The followingw tables sho recently completed, current projects and proposed multifamily developments in and near the subject’s market area. Subsidized projects are not included on this list.

Cully Boulevard Plaza Multifamily Market Analysis 48

COMPLETED MARKET RATE MULTI‐FAMILY PROJECTS Location Units Complete Status 2121 Belmont *Close‐in Southeast (SE 21st/Belmont) 123 2008 Stabilized Tupelo Alley North Mississippi 188 2008 Stabilized Mississippi Avenue Lofts *North Mississippi 32 2008 Stabilized The 20 on Hawthorne Close‐in Southeast (SE 20th/Hawthorne) 51 2009 Stabilized Irvington Garden Northeast (NE 15th/Hancock) 50 2011 Stabilized Eco Flats N. Williams (39th/Williams) 18 2011 Stabilized The Albert N. Williams (Freemont/Williams) 72 2012 Stabilized Glee Apartments Close‐in NE (455 NE 24th Ave.) 33 2012 Stabilized Central Eastside Lofts Northeast (NE 5th/Couch) 70 2012 Stabilized Milano Apartments NE Portland (105 NE Multnomah Blvd.) 60 2012 Stabilized The Miss N. Mississippi (3807 N Mississippi) 25 2013 Stabilized The Martin Close‐in NE (2929 NE MLK Jr. Blvd.) 14 2013 Stabilized The King Close‐in Northeast (3225 NE MLK Jr. Blvd.) 15 2013 Stabilized Morrison 16 Close‐in Southeast (SE 16th/Morrison) 30 2013 Lease‐up B‐Street Apartments Close‐in Northeast (NE 30th Ave./E. Burnside) 50 2013 Stabilized Broadway Apartments Close‐in Northeast (2007 NE Broadway) 14 2014 Stabilized The Linden Close‐in Southeast (E. Burnside/SE 12th) 132 2013 Lease‐up Abernethy Court Close‐in Southeast (3005 SE Hawthorne) 50 2013 Stabilized Hawthorne Twenty‐Six Close‐in Southeast (2627 SE Hawthorne) 78 2014 Lease‐up The Sippi N Mississippi (916 N. Failing St.) 24 2014 Stabilized The Couve N. Williams (3724 N. Vancouver) 22 2014 Lease‐up The Kiln Apartments N Williams (Beech /3703 N Willams) 19 2014 Lease‐up The Bijou N. Mississippi (4200 Block) 44 2014 Lease‐up Burnside 26 Close‐in Northeast (E. Burnside/26th Ave.) 135 2014 Lease‐up The Provi 4720 NE Glisan St (across from Providence Med Ctr.) 23 2014 Lease‐up Daveneaux Apts. Close‐in Northeast (NE 20th Ave./Couch St.) 50 2014 Stabilized Taylor Street Lofts Close‐in Southeast (SE 12th/Taylor Street) 92 2014 Lease‐up Total 1,514 Draft

Cully Boulevard Plaza Multifamily Market Analysis 49

UNDER CONSTRUCTION & PRPOSED MARKET RATE MULTI‐FAMILY PROJECTS Project Name Location UnitsComplete Status The Mason Williams N. Williams (N Mason) 76 2014 Under Const. The Wilmore N. Williams (4327 N. Williams Ave.) 75 2014 Under Const. Cook Street Apartments N. Williams (115 N. Cook St.) 206 2015 Under Const. Grant Park Village Close‐in Northeast (NE 32th/NE Broadway) 200 2014 Under Const. Hassalo on Eighth Lloyd District (NE Multnomah & 9th Ave.) 657 2016 Under Const. Lloyd District Commons (Block A) Lloyd District (NE Multnomah & NE MLK) 186 2015 Under Const. Block 67 Apts Close‐in Northeast (NE 3rd/Couch) 284 2016 Under Const. 4326 N. Mississippi N. Mississippi (4326 N. Mississippi) 20 2014 Under Const. Monroe Apts Close‐in Northeast (3035 NE MLK Blvd.) 46 2013 Under Const. Cook Street Apartments N. Williams (115 N. Cook St.) 206 2015 Under Const. 20e Close‐in Northeast (NE 20th/Everett) 47 2014 Under Const. Paradigm Prop. Site Close‐in Northeast (2603 NE 7th Ave.) 63 2015 Proposed UDG Ankeny Site Close‐in Southeast (SE 27th Ave. & Ankeny) 50 2015 Proposed St. Francis Park Apts Close‐in Southeast (SE 12th/Stark) 152 2014 Proposed Langano Apartments Close‐in Southeast (1435 SE Hawthorne) 30 2015 Proposed OAME Site Apartments N. Williams (4134 N. Vancouver Ave.) 260 2015 Proposed SolTerra Williams Apts. N. Williams (NWC of N. Williams Ave. & N. Fargo St.) 50 2015 Proposed Marathon N. Mississippi Apts. N. Mississippi (SEC of N. Mississippi and N. Fremont) 150 2015 Proposed Winkler N. Mississippi Apts. N. Mississippi (SWC of N. Mississippi & N. Fremont) 150 2016 Proposed Mason Street Apartments Close‐in Northeast (NE MLK Jr. Blvd. & Mason St.) 36 2015 Proposed Langely Investments Mixed Use Lloyd District (NE Broadway/3rd Ave.) 65 2014 Proposed UDG Old Wives Tale Site Close‐in Southeast (1300 E. Burnside) 69 2015 Proposed Lower Burnside Lofts Close‐in Southeast (30 SE 10th Ave.) 73 2015 Proposed Salvation Army Site Close‐in Southeast (139 SE MLK Jr. Blvd.) 307 2016 Proposed 419 E Burnside Close‐in Northeast (E. Burnside) 135 2015 Proposed Block 91 & 102 AAT Site Lloyd District (710‐830 NE Holladay St.) 1,030 2018 Proposed Block 75 Mixed Use Dev. Close‐in Northeast (111 NE MLK Jr. Blvd.) 60 2015 Proposed Total Under Construction 2,003 Total Proposed 2,680 Total Under Construction & Proposed 4,683

As indicated, 1,514 units have been completed in the subject’s market area since 2008 with another 2,003 units currently under construction, and an additional 2,680 units proposed.

Now with decreasing homeownership rates, and financing for new condominium construction effectively unavailable, developersDraft are again pursuing new mixed‐use, multifamily rental projects. As new projects come on‐line, however, it remains to be seen if rental rate growth will continue. At the current time, concessions such as free rent are relatively rare for stabilized buildings in close‐in areas around Portland. Several new projects, including those completed by the Urban Development Group, are offering up one month of free rent during the initial lease‐up. With the wave of new supply that will hit the market in 2015 and 2016, we expect concession offerings to increase. Rents have also steadily increased, but competition for new renters will increase. Looking forward, there is some uncertainty over continued rent appreciation due to the amount of new and proposed multifamily construction in the market area.

Cully Boulevard Plaza Multifamily Market Analysis 50

Multifamily Market Outlook and Conclusions Market indicators and survey data demonstrate the steadily tightening conditions in the Portland apartment market over the past few years, which has resulted in historically low vacancy rates, substantial growth in rental rates, significant investor activity, and activation of new construction projects. Overall vacancy in the metro area has remained under 4% for 12 consecutive quarters, sparking new construction cycles in 2012 and again in 2013, continuing into 2014. So far, demand has kept pace with new development and vacancy rates remain in the low‐3% range for the metro area.

Intense investor demand in the Portland metro market has pushed transaction volume and prices higher over the past year, compressing cap rates to historic lows for institutional assets, and increasing sales activity for value‐add and secondary assets, due to diminishing inventory and buyer competition. Overall, the Portland market remains very desirable from an investor perspective and significant competition is expected to continue for available multifamily assets in the metro market.

IRR Viewpoint 2014 indicates that the Portland market is within the third stage of an expansion phase, characterized by new construction met with continued high absorption, stimulated by employment growth, moderate growth in rental rates, and low vacancy. The 4th Quarter 2013 PwC Real Estate Investor Survey reflects the Portland multifamily market as firmly within an expansion phase at least through 2014, which is supported by market indicators, recent trends, and projection data.

Despite increasing construction and anticipated additions to inventory, projection data indicates relatively modest increases to vacancy, but levels are expected to remain among the lowest in the nation. In addition, continued rent growth is forecasted, although increases are expected to moderate as the introduction of new supply increases competition and diminishes pent‐up demand. In summary, projection data indicates that the multifamily market is expected to remain in balance overall, with continued strong conditions in the foreseeable future, acknowledging that supply and demand factors will be significantly influenced by actual future deliveries of new units going forward. Draft

Cully Boulevard Plaza Land Description and Analysis 51

Property Analysis

Land Description and Analysis Location The property is located in the Cully neighborhood, and more specifically it is bounded by NE Killingsworth Street, NE Portland Highway, and NE Cully Street. A plat map highlighting the subject is below followed by an aerial photo.

Draft

Cully Boulevard Plaza Land Description and Analysis 52

Land Area The following table summarizes the subject’s land area.

Land Area Summary

Tax ID Address SF Acres R317325 (1N2E17CD TL 2000) 6723 NE Killingsworth St. 81,457 1.87 R317300 (1N2E17CD TL 2100) 6921 NE Killingsworth St. 13,939 0.32 Total 95,396 2.19

Topography The site is generally level and at street grade. The topography does not result in any particular development limitations.

Drainage No particular drainage problems Draftwere observed or disclosed at the time of field inspection. This appraisal assumes that surface water collection, both on‐site and in public streets adjacent to the subject, is adequate.

Flood Hazard Status The following table provides flood hazard information.

Cully Boulevard Plaza Land Description and Analysis 53

Flood Hazard Status Community Panel Number 4101830105F Date November 26, 2010 Zone X Description Outside of 500‐year floodplain Insurance Required? No

Environmental Hazards The site is not listed on the Oregon Department of Environmental Quality as containing any known hazardous substances or underground storage tanks. The buyers are in the process of having the improvements tested for hazardous materials such as asbestos and lead paint; the results were not available as of this writing. We assume that no hazardous materials are present.

A Radon test was conducted by Crawrofd Inspection Services on January 2, 2015. The first of two tests indicated normal levels; the second test had an average level of 5.6 pCi/l, which is slightly elevated (above the recommended 2 to 4 pCi/l). It is possible that this elevated level may be sufficiently mitigated during the renovations (for example by sealing the concrete slab). If Radon mitigation is necessary, the cost should be relatively insignificant.

Streets, Access and Frontage Details pertaining to street access and frontage are provided in the following table.

Streets, Access and Frontage Street NE Killingsworth St. NE Portland Hwy NE Cully Blvd. Frontage Feet 686 580 345 Paving Asphalt Asphalt Asphalt Curbs Yes Yes Yes Sidewalks Yes Yes Yes Lanes Two plus a center turn Four plus a center turn Two plus a center turn lane lane lane Direction of Traffic East‐west East‐west Northeast‐southwest Condition Average Average Average Traffic Levels 11000Draft21000 2500 Access/Curb Cuts Three Two One Visibility Good Good Good

Utilities The availability of utilities to the subject is summarized in the following table.

Cully Boulevard Plaza Land Description and Analysis 54

Utilities Service Provider Water City of Portland Sewer City of Portland Electricity PGE Natural Gas NW Natural

Zoning The subject is zoned EXdh, Central Employment , by City of Portland, which is a very broad zone that permits a wide variety of uses and high site coverage. Specific zoning requirements are summarized in the following table.

Zoning Summary Zoning Jurisdiction City of Portland Zoning Designation EXdh Description Central Employment Legally Conforming? Yes Zoning Change Likely? No Permitted Uses This zoning district permits a wide variety of residential, retail, office, and industrial uses. Category Zoning Requirement Minimum Lot Area None Minimum Street Frontage (Feet) 10 feet Minimum Lot Width (Feet) None Minimum Lot Depth (Feet) None Minimum Setbacks (Feet) None Maximum Building Height 65 feet Maximum Site Coverage 100% Maximum Floor Area Ratio 3:1 Parking Requirement None Other The subject is in the Design and Aircraft landing overlay zones. Draft We are not aware of any pending or prospective zoning changes. It appears that the current use of the site is a legally conforming use.

Other Land Use Regulations We are not aware of any other land use regulations that would affect the property.

Potential Development Density If the site were vacant, a building area of approximately 286,188 square feet could be developed based on the maximum floor area ratio (FAR) of 3:1 in the current zoning regulations. This compares with the subject’s actual developed gross building area of 27,445 square feet. However, a multistory

Cully Boulevard Plaza Land Description and Analysis 55

building maximizing permitted FAR would likely require subterranean parking, and would result in a density that is not common in this neighborhood.

Easements, Encroachments and Restrictions We were not provided a current title report to review. We are not aware of any easements, encroachments, or restrictions that would adversely affect value. Our valuation assumes no adverse impacts from easements, encroachments, or restrictions, and further assumes that the subject has clear and marketable title.

Conclusion of Site Analysis Overall, the physical characteristics of the site and the availability of utilities result in functional utility suitable for a variety of uses including those permitted by zoning. Uses permitted by zoning include a wide variety of residential, retail, office, and industrial uses. Although the site is more or less triangular, this does not negatively impact the site’s development potential because the site is relatively large. We are not aware of any other particular restrictions on development.

Draft

Cully Boulevard Plaza Improvements Description and Analysis 56

Improvements Description and Analysis The subject is an existing L‐shaped commercial building containing 25,991 square feet of gross leasable area. The improvements were constructed in 1951. In the past, the building was occupied by several adult entertainment and restaurant businesses. Currently portions of the building are occupied by a taco restaurant and an adult entertainment business on a month‐to‐month basis. The building is in fair to poor condition, and re‐tenanting will require significant interior demolition as well as exterior repairs. The following description is based on our inspection of the property and a building inspection report prepared by Crawford Inspection Services in January 2015. Building plans were not available.

The building has had significant interior alterations over the years. Because there are no existing building plans, we were unable to determine if the alterations were done through proper permitting channels and done to code.

The following tables summarize the main characteristics.

Improvements Description Name of Property Cully Boulevard Plaza General Property Type Retail Property Sub Type Strip/Convenience Center Occupancy Type Multi‐Tenant Percent Leased Currently rented on a month‐to‐month basis by two tenants Number of Buildings One Stories One Building Shape "L" Construction Class D Construction Type Wood frame Construction Quality Average Condition Fair to Poor Gross Building Area (SF) 25,991 Land Area (SF) 95,396 Floor Area Ratio (GLA/Land SF) 0.27 Floor Area Ratio (GBA/Land SF) 0.27 Building Area Source MultnomahDraft County Year Built 1951 Actual Age (Yrs.) 63 Number of Parking Spaces 85 Source of Parking Count Approximate on‐site count. Additional unmarked parking is available. Parking Type Surface lot Parking Spaces/1,000 SF GLA 3.27 Landscaping Minimal consisting of a strip of shrubs and trees along the perimeter of the site

Cully Boulevard Plaza Improvements Description and Analysis 57

Construction Details Foundation Concrete slab Basement According to the building inspeciton report, there is a small basement area (size unknown) at the west end of the building; we were not made aware of this during our inspection. Structural Frame Wood frame construction with poured concrete separation walls between tenant spaces and at the endof the building. Exterior Walls Ceramic tile and corrugated metal siding. Windows Commercial storefronts in aluminum frames. The number of storefronts is unknown as most of the building was covered with corrugated metal siding; however, the siding does not reach all the way to the ground level and reveals that there are additional entrances. This is also confirmed by older photos of the property taken before the metal siding was added. Roof Bow truss with composition shingles and flat areas with single‐ply, torch‐ down cover. Roof age estimated at 12 years. Ceiling Height in Feet Ceiling height varies; the majority of the building has a ceiling height of around 10 feet; certain areas are likely in the neighborhood of 14 feet. Interior Finishes Floors A variety of finishes including carpet, tile, and vinyl Walls Painted drywall Ceilings predominantly acoustical tile Lighting A variety of incandescent fixtures, track lighting, and flush fluorescent fixtures. HVAC Several roof‐mounted gas pack units Electrical 3‐phase, 120V/240V/208V; total capacity 900 amp. Plumbing According to the building inspeciton report, most of the visible supply pipes are copper; drain pipes are plastic. Rest Rooms There are numerous restrooms located in the building; exact count is not available. Sprinklers No

Occupancy Status Portions of the property are rented to two tenants on a month‐to‐month basis; there are no leases in effect. Draft Improvements Analysis Quality and Condition The improvements are of average quality construction, but are in fair to poor condition. Although the building inspection report indicates that the building is generally structurally sound and the roof is in serviceable condition, there are numerous items of deferred maintenance. Deficiencies noted on the interior include numerous stained or missing ceiling tiles, missing or damaged floor covering, carpet beyond its useful life, numerous unfinished door openings, loose wall outlets and outlets with no covers, improperly installed water heaters, and general large volume of clutter which will need to be removed before the building can be renovated. Exterior deficiencies were roof leakage at penetrations

Cully Boulevard Plaza Improvements Description and Analysis 58

in the roof, rusted metal cap/flashings at the top of the parapet walls which in many cases are crumbling, advanced state of failure of the exterior tile (the likely reason for the installation of the corrugated metal panels on the vast majority of the exterior walls). According to a sewer survey report prepared by Apollo Drain & Rooter Service on January 7, 2015, sections of the sewer pipe appear to be rusted out on the bottom.

Functional Utility The functional utility of the improvements in their as‐is condition is very marginal. Large portions of the space have been demised into numerous very small rooms to serve the adult entertainment patrons, and there are oversized areas intended for restaurant use. Because of the nature of the previous (and to some extent current) use as adult entertainment business, there are inadequate windows and doors and insufficient lighting. Because deferred maintenance is extensive and functional utility of the building in the as‐is condition is limited, the building could not be re‐rented without the building undergoing complete renovation.

ADA Compliance We are not expert in ADA matters, and further study by an appropriately qualified professional would be recommended to assess ADA compliance.

Hazardous Substances Results of the Haz Mat inspection were not yet available as of the date of this report.

Personal Property About 50% of the building is used for storage of a wide variety of personal property including a large collection of taxidermy; its value is included in the pending price but is excluded from our valuation analysis. We are not qualified to estimate the value of this personal property.

Also noted was a significant amount of used commercial kitchen equipment which is included in the sale as well. The salvage value of used restaurant equipment is typically pennies on the dollar, and it is assumed that any residual value of the kitchen equipment would offset the cost to remove the equipment.

Conclusion of Improvements Analysis In comparison to other competitiveDraft properties in the region, the subject improvements are rated as follows:

Cully Boulevard Plaza Improvements Description and Analysis 59

Improvements Ratings Visibility Above Average Design and Appearance Below Average Age/Condition Below Average Adaptability of Space to other Retail Users Below Average Interior Amenities Below Average Parking Ratios Average Distance of Parking to Store Access Average Landscaping Below Average

Draft

Cully Boulevard Plaza Improvements Description and Analysis 60

Front (south) elevation West end of building; existing taco restaurant

East end of building Pedestrian door covered with corrugated metal siding Draft

Missing exterior tile Water damage on underside of roof overhang and damaged metal siding

Cully Boulevard Plaza Improvements Description and Analysis 61

Commercial kitchen Former restaurant seating area

Restrooms with damaged floor cover Water‐damaged ceiling tile Draft

Unfinished wall openings without doors Miscellaneous items stored in the unfinished attic

Cully Boulevard Plaza Improvements Description and Analysis 62

Bow truss roof structure Seating area of existing adult entertainment establishment

Storage within former restaurant seating area Taxidermy collection stored on premises Draft

View west along Portland Highway Recent residential construction across from the subject on Cully

Cully Boulevard Plaza Real Estate Taxes 63

Real Estate Taxes State and local taxation in Oregon relies on income taxation at the state level and property taxes at the local level. The following is a summary of the Oregon property tax system.

. Real estate taxes in the state and this jurisdiction represent ad valorem taxes, meaning a tax applied in proportion to assessed value. . Property taxes are collected locally to fund schools and governments in the area. The State does not receive any property tax revenue. . Property taxes are divided into school taxes and non‐school taxes; non‐school taxes raise revenue for City and County Governments. . In 1998, assessed value was rolled back to the 1996 real market value less 10%, and growth in assessed value was limited to 3% per year thereafter. Thus, property taxes are no longer directly tied in with real market value. There are some exceptions with respect to the 3% growth limit, such as new construction. . Property taxes may not exceed a limit of $5.00 per $1,000 of real market value for schools and $10.00 per $1,000 for non‐schools. . The limitation does not apply to exempt bond levies that are approved by general election. The tax year starts July d1 an ends June 30. The County Assessor's Office estimates value as of January 1 of each year. Property taxes are due and payable on November 15. A 3% discount is available if paid in full by November 15. A 2% discount is also obtainable if two‐thirds of the amount is paid by this date. Another alternative is to make three equal (one‐third) payments, on or before the 15th of November, February and May. Any balance owed begins to accrue interest after May 15, and counties initiate foreclosure if three years of taxes become delinquent.

Real estate taxes and assessments for the current tax year are shown in the following table.

Taxes and Assessments ‐ 2014‐2015 RMV Ad Valorem Direct Tax ID RMV Land Improvements Total RMV Assessed Value Taxes Assessments Total R317325 (1N2E17CD TL 2000) $1,238,960 $1,206,070 $2,445,030 $1,212,680 $29,091 $0 $29,091 R317300 (1N2E17CD TL 2100) $235,570 $6,040 $241,610 $177,360 $3,968 $0 $3,968 $1,474,530 $1,212,110 $2,686,640 $1,390,040 $33,059 $0 $33,059 Draft Based on the concluded market value of the subject, the assessed value appears low. A tax appeal is not warranted.

Cully Boulevard Plaza Highest and Best Use 64

Highest and Best Use Process Before a property can be valued, an opinion of highest and best use must be developed for the subject site, both as if vacant, and as improved or proposed. By definition, the highest and best use must be:

 Physically possible.  Legally permissible under the zoning regulations and other restrictionsy that appl to the site.  Financially feasible.  Maximally productive, i.e., capable of producing the highest value from among the permissible, possible, and financially feasible uses. Highest and Best Use As If Vacant Physically Possible The site is more or less triangular, but is relatively large, thus its shape does not in any way constrain the site’s development potential. The site is level, has frontage on three streets, good access and excellent exposure. Physical characteristics of the site result in functional utility suitable for a variety of uses permitted by zoning including multifamily, retail, office, small‐scale industrial, and mixed uses.

Legally Permissible The site is zoned EXdh, Central Employment. This zoning district permits a wide variety of residential, retail, office, and industrial uses as well as mixed uses. To our knowledge, there are no legal restrictions such as easements or deed restrictions that would effectively limit the use of the property.

Uses alonge th north side of NE Portland Highway are industrial. With the exception of the site directly west of the subject (west side of Cully Boulevard) which is improved with an industrial facility, uses south of Portland Highway are almost exclusively single family residential with some multifamily and small, older commercial buildings scattered through the neighborhood.

The subject is the only EXd site in the neighborhood, and because of its access, exposure, 3:1 FAR and up to 65’ building height, the subject is not a good candidate for industrial uses because a typical industrial development has an FARDraft of around 0.3 to 1 in order to ensure adequate loading and vehicular circulation. Such low density would not maximize the site’s development potential. The location also is not conducive to office development due to predominantly industrial and residential uses in the area.

Based on the subject’s zoning and location along a transition line between residential and industrial, the site would be suitable for retail development which would complement the residential uses to the south and serve as a transition between the industrial uses to the north and residential uses to the south.

Because of the 3:1 FAR potential, and the fact that retail uses are typically one story, a retail use in itself also would not maximize the site’s potential. Based on permitted density, the site would a good

Cully Boulevard Plaza Highest and Best Use 65

candidate for a multistory residential development that could have retail uses on the ground floor. Given the light industrial use directly west of the subject and north of Portland Highway, a residential use developed on the site would most likely be Class B, lower‐cost units because the typical end users of this type of product are more tolerant of less‐than‐ideal neighboring uses, and this type of development would also fit the socioeconomic makeup of the neighborhood. Furthermore, the right mix of residential and retail tenants would be mutually beneficial.

Given prevailing land use patterns in the area, only mixed use (multifamily/retail) is given further consideration in determining highest and best use of the site, as though vacant.

Financially Feasible Based on our analysis of the market, there is currently adequate demand for retail as well as multifamily use in the subject’s submarket as evidenced by low vacancy and rising rents. It appears that a new mixed use development on the site would have a value commensurate with its cost at this time. However, the multifamily sector has added significant new supply over the past two years, and a large number of units are still proposed. As discussed in the market analysis section, the market may be nearing saturation, and units that are currently still on the drawing board (and would be delivered before any new construction on the subject site) may be sufficient to satisfy demand in the next few years. By the same token, most of the construction has been in close‐in areas and the I‐5 corridor in proximity to mass transit, and the Sunset Corridor. We aret no aware of any projects proposed for the subject’s immediate area. An in‐depth survey of the subject’s neighborhood would be necessary in order to determine whether there is sufficient demand for new multifamily units.

Maximally Productive There does not appear to be any reasonably probable use of the site that would generate a higher residual land value than a retail/residential use. Accordingly, it is our opinion that a multifamily/retail developed to the normal market density level permitted by zoning, is the maximally productive use of the property.

Conclusion Development of the site for multifamily/retail use is the only use that meets the four tests of highest and best use. Therefore, it is concluded to be the highest and best use of the property as if vacant. As Improved Draft The subject site is developed with a one story retail building. Current site coverage is 27%, thus the site is underutilized. However, based on the analysis that follows, the existing improvements still contribute to value.

The existing improvements are structurally sound, but have significant deferred maintenance; the building will have to be completely renovated before it can be re‐tenanted. The building has the potential to accommodate a single tenant as well as multiple tenants; with a bay depth of about 70 feet, the building would be best suited for smaller to mid‐sized tenants.

The client is contemplating a grocery tenant with a possible restaurant use for the building; however, based on the information presented on page 33, there does not appear to be sufficient demand within

Cully Boulevard Plaza Highest and Best Use 66

the 5‐minute drive time to support a large grocery store. A map showing nearest food markets is below.

Based on the data presented in the retail submarket analysis, the building would be a better candidate for other retail uses. For example, the building could accommodate a small neighborhood pet supply merchant such as Nature’s Pet Market, which has been expanding rapidly in the local market. The building would also be a good candidate for a Goodwill store, which typically requires about 8,000 to 15,000 square feet, and would fit the socioeconomic profile of the neighborhood. Retail supply and demand data also shows surplus demand for limited service restaurants in the area, which could occupy a small portion of the building. The area is also lacking in personal services. Data regarding consumer spending in these categories are in Addendum D.

Based on demographic and retail data, the building, which has almost 26,000 square feet, is probably too large in order for the neighborhood to support a single tenant. A more appropriate mix for the neighborhood would probably includeDraft two larger tenants in the 5,000 to 10,000 square foot range, and two to three smaller tenants such as limited service restaurants and service commercial uses such as insurance agency, accounting services, hair salon etc.

Most Probable Buyer Taking into account the size and characteristics of the property and its current condition, the likely buyer is a local investor, developer or a partnership.

Cully Boulevard Plaza Valuation Methodology 67

Valuation

Valuation Methodology Appraisers usually consider three approaches to estimating the market value of real property. These are the cost approach, sales comparison approach and the income capitalization approach.

The cost approach assumes that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility. This approach is particularly applicable when the improvements being appraised are relatively new and represent the highest and best use of the land or when the property has unique or specialized improvements for which there is little or no sales data from comparable properties.

The sales comparison approach assumes that an informed purchaser would pay no more for a property than the cost of acquiring another existing property with the same utility. This approach is especially appropriate when an active market provides sufficient reliable data. The sales comparison approach is less reliable in an inactive market or when estimating the value of properties for which no directly comparable sales data is available. The sales comparison approach is often relied upon for owner‐user properties.

The income capitalization approach reflects the market’s perception of a relationship between a property’s potential income and its market value. This approach converts the anticipated net income from ownership of a property into a value indication through capitalization. The primary methods are direct capitalization and discounted cash flow analysis, with one or both methods applied, as appropriate. This approach is widely used in appraising income‐producing properties.

Reconciliation of the various indications into a conclusion of value is based on an evaluation of the quantity and quality of available data in each approach and the applicability of each approach to the property type.

The methodology employed in this assignment is summarized as follows:

Approaches to Value Approach DraftApplicability to Subject Use in Assignment Cost Approach Not Applicable Not Utilized Sales Comparison Approach Applicable Utilized Income Capitalization Approach Not Applicable Not Utilized

Cully Boulevard Plaza Land Valuation 68

Land Valuation To develop an opinion of the subject’s land value, as if vacant and available to be developed to its highest and best use, we utilize the sales comparison approach. This approach develops an indication of value by researching, verifying, and analyzing sales of similar properties. Our sales research focused on transactions within the following parameters:

 Location: Multnomah County excluding close‐in locations that are within the Central City Plan District  Size: 0.5 to 5 acres  Use: A variety of commercial and mixed uses  Transaction Date: Preferably past 3 years The subject is zoned EXd, which is unique in this area as evidenced by the map presented earlier. In fact, the subject is the only EX‐zoned site in the immediate neighborhood. This poses a challenge, because the vast majority of EX‐zoned properties are located either in the Central City Plan District (close‐in neighborhoods west of 12th Avenue) or the Gateway District; both areas are zoned for significantly higher density and building heights, and are influenced by proximity to mass transit and/or the CBD. Sales of these sites are not comparable to the subject. Because of this unique problem, we have compiled a number of sales of commercial sites with good exposure located outside of the CBD, Northwest Portland, and the Central City Plan District. These sales span a period of several years, but they provide a more reliable indication of the subject’s value than sales of close‐in sites which have been rapidly appreciating at a rate of 10‐15% per year over the past two years due to high demand for urban multifamily development land, and the rate of change varies considerably with location.

For this analysis, we use price per square foot as the appropriate unit of comparison because market participants typically compare sale prices and property values on this basis. The most relevant sales are summarized in the following Drafttable:

Cully Boulevard Plaza Land Valuation 69

Summary of Comparable Land Sales Sale Date; SF; $/SF No. Name/Address Status Effective Sale Price Acres Zoning Land 1Fred Meyer Fuel Site Feb‐14 $867,880 43,394TC (Town Center) $20.00 NE. Glisan St. Closed 1.00 Wood Village Comments: Fred Meyer purchased for a fuel station; a Fred Meyer store is located to the immediate north across the parking lot. The price reflects market price for the size and location. 2Truck Dealership Site May‐13 $550,000 25,009Exdh (Central $21.99 NE. Rosa Parks/ M.L. King Closed 0.57 Employment) Portland Comments: The property was priced for land value assuming it would be redeveloped. This buyer purchased to use the land for his truck dealership retail sales. He will retain the 1,380‐SF, wood frame commercial duplex which provides a modest income. There is also a 4,450 SF concrete block warehouse building; the buyer was considering using it for the dealership. However, the value of the improvements is not considered to be significant. 3NE Holman Site Dec‐12 $1,525,000 119,370EG2 (General $12.78 NE. Holman St. @ Airport Way Closed 2.74 Employment 2) Portland Comments: Vacant site is located on NE Holman Rd. with visibility from Airport Way. Buyer (Pacific NW Properties), who owns other property in the area, purchased the site in order to control the type of future development on this site. The property is available for sale (unpriced) but not actively marketed; the owner would consider selling to the right user. 47‐Eleven Site Mar‐12 $356,000 25,876CN2 (Neighborhood $13.76 92nd & Holgate Closed 0.59 Commercial 2) Portland Comments: The buyer purchased for the development of a 7‐Eleven store. Improvements on the site at the time of the sale (a 1,215‐SF metal 2‐bay auto repair shop) were to be demolished by the buyer at an unknown cost; we estimate $6,000. The site was clean at time of this 2012 sale. The selling broker felt that the price reflected market value for the land. 5 2110 SE 82nd Ave. Dec‐11 $335,000 31,350CS (Commercial $10.69 2110 SE. 82nd Ave. Closed 0.72 Storefront ) Portland Comments: Site had been listed for $599,000 and was on the market for 38 days before the $335,000 offer was accepted. 6Les Schwab Site Nov‐11 $650,000 41,042 CG (General $15.84 2500 SE. Tacoma St. Closed 0.94 Commercial) Portland Comments: Fronts on McLoughlin. Purchased rfo the development of a tire shop. Site was under contract for a year while contamination remediation was undertaken and finished. Seller had indemnity from Exxon for contamination and Exxon paid to clean the site. Broker felt that price is market price at time of closing and at time it went under contract. 7 Autozone Site Apr‐11 $870,000 48,633DCL (Downtown $17.89 425 NE. Burnside Closed 1.12 Commercial Low Rise) Gresham Comments: This corner parcel was openly marketed from 2007 to 2009 when it went into contract with Autozone. The escrow period was fairly protracted in order to allow for Autozone to obtain approvals for subdividing the lot and permitting of their new facility. Autozone constructed a 7,846 square foot building on the corner piece (15,403 sf) and retained ownership of the newly created excess parcel (33,228 sf). 8 Goodwill Site Jun‐10 $4,050,000 165,294 CG (General $24.50 1350 NE. 122nd Ave. Closed 3.79 Commercial) Portland Comments: This is sale of a former Albertson's store and land. There were 2 transactions that were coordinated together. Buyer representative recalled that all 4 tax lots and vacated street area sold for $3,800,000. Buyer's intentions were to demolish the Albertsons buildings and redevelop site with a new Goodwill store and in‐ line retail to lease. The size of the Albertson's building was not available; however, most Albertson's stores are typically around 40,000 square feet; at ±$10 per square foot in demolition cost, we estimate total demolition expense at $400,000, or $2.42 per SF of site area. 9GSA Office Site Feb‐10 $825,000 74,923 CC (Community $11.01 17899‐18081 SE. Division Closed 1.72 Commercial) Gresham Comments: This site was purchased for the developmentDraft of a GSA office building. The listing price was $799,000; however, there were two interested buyers competing for the property, and the site sold abovee th asking price. There were no unusual conditions reported. 10 Human Solutions Site Mar‐07 $1,040,000 79,179 RTC (Rockwood Town $13.13 NE. 181st & Couch Street Recorded 1.82 Center) Gresham Comments: This land sale is comprised of three adjoining parcels that form a rectangle at the northeast corner of NE 181st Avenue and NE Couch Street, just north of E Burnside Street. The site is one block north of the MAX light rail. The property was not openly marketed to the public, when the seller received an unsolicited offer. The deal fell through for an undisclosed reason, and another unsolicited offer was received from Human Solutions, a non‐profit organization. According to the broker, the seller felt that the zoning, Rockwood Town Center (RTC), was too prohibitive because it required any development on this site to have "residential space above the ground floor. The buyerpurchased the site to develop their corporate headquarters (office space) with some affordable housing above the office space. Subject 95,396 Central Employment Cully Boulevard Plaza 2.19 Portland, OR

Cully Boulevard Plaza Land Valuation 70

Comparable Land Sales Map

Draft

Cully Boulevard Plaza Land Valuation 71

Sale 1 Sale 2 Fred Meyer Fuel Station Site Truck Dealership Site + Comm'l Bldg. (EXd)

Sale 3 Sale 4 NE Holman @ Airport Way EG2 Site Draft92nd & Holgate 7‐Eleven Site (CN2)

Sale 5 Sale 6 2110 SE 82nd Ave. CS Zoned Site Les Schwab Site ‐ SE Tacoma (CG)

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Sale 7 Sale 8 Autozone Site Goodwill Retail Center Site

Sale 9 Sale 10 17899‐18081 SE Division St. DraftHuman Solutions Site

Cully Boulevard Plaza Land Valuation

Adjustment Factors The sales are compared to the subject and adjusted to account for material differences that affect value. Adjustments are considered for the following factors, in the sequence shown below.

Adjustment Factors Effective Sale Price Accounts for atypical economics of a transaction, such as demolition cost, expenditures by the buyer at time of purchase, or other similar factors. Usually applied directly to sale price on a lump sum basis. Comparables 4 and 8 were adjusted upward for the estimated cost of demolition. The effective sale price presented on page 76 reflects these adjustments. Real Property Rights Fee simple, leased fee, leasehold, partial interest, etc. No adjustment was indicated. Financing Terms Seller financing, or assumption of existing financing, at non‐market terms. No adjustments were indicated. Conditions of Sale Extraordinary motivation of buyer or seller, assemblage, forced sale, related parties transaction. No adjustments were indicated. Market Conditions Changes in the economic environment over time that affect the appreciation and depreciation of real estate. A discussion follows this table. Location Market or submarket area influences on sale price; surrounding land use influences. Qualitative observations are made on page 76. Access/Exposure Convenience to transportation facilities; ease of site access; visibility from main thoroughfares; traffic counts. Traffic counts are presented in the table on page 76, and are taken into considerationDraft in our analysis. Poor access for Sale 7 was also considered. Size Inverse relationship that often exists between parcel size and unit value. While there is not sufficient evidence from which adjustment for size can be derived for each point along a continuum, size is taken into consideration in our qualitative analysis.

Cully Boulevard Plaza Land Valuation

Shape and Topography Primary physical factors that affect the utility of a site for its highest and best use. All of the comparables have average utility; no adjustments are warranted. Zoning Government regulations that affect the types and intensities of uses allowable on a site. The comparables span a number of zoning districts and several municipalities. A comparison of permitted uses, densities, and building heights is made on the next page. Entitlements The specific level of governmental approvals attained pertaining to development of a site. No adjustments were indicated.

When considering market conditions, we note that the sales took place from March 2007 (the peak of the market before the recession) to February 2014. Market conditions softened significantly as a result of the last recession, and values slowly began to rebound again in 2012. No adjustment was warranted for the sale that transacted in 2007 as current market conditions are roughly on par with pre‐recession levels. Sales that transacted from 2010 to present were adjusted at a rate of 3% per year for the period 2012‐2014. The time‐adjusted sale price is shown as “trended” on page 76.

Zoning Careful consideration must be given to differences in zoning. While all of the comparables have commercial zoning, permitted uses, building height and density vary considerably. The table below compares a variety of zoning districts. The first four uses (single family, multifamily, office and retail) are the four most common uses for commercial sites with good exposure, and are the most relevant.

Note that, for example, that while at first glance the CN2 zoning district appears similar to the subject’s EX, the CN2 district is only zoned for FAR up to 0.75:1 and building height of only 30’ while the subject’s zoning permits up toDraft 3:1 FAR and building height up to 65’.

Cully Boulevard Plaza Land Valuation

Analysis and Adjustment of Sales Our analysis of the comparable sales is described in the following table. Draft

Cully Boulevard Plaza Land Valuation 76

Analysis of Comparable Land Sales Acres; Sale Date; Effective Traffic $ per SF; Overall Name/Address SF Zoning Status Sale Price Counts Trended $/SF Adjustment Adjustment Comments Subject 2.19Central 27,000 1Fred Meyer Fuel Site 1.00TC (Town Center) Feb‐14 $867,880 14,000 $20.00 None Interior evacant sit located on the north side of NE Glisan St. east of 223th NE. Glisan St. 43,394 Closed $20.40 Avenue across from a Fred Meyer development. Smaller site has superior Wood Village surrounding uses but much lower traffic counts; zoned for lower building height. Overall similar. 2Truck Dealership Site 0.57Exdh (Central May‐13 $550,000 21,000 $21.99 Down Slightly superior surrounding uses, inferior traffic counts. Much smaller site. NE. Rosa Parks/ M.L. King 25,009Employment) Closed $23.09 Overall a slightly high indicator. Portland 3NE Holman Site 2.74EG2 (General Dec‐12 $1,525,000 7,000 $12.78 Up Vastly superior quality of surrounding uses; however, the site is zoned for more NE. Holman St. @ Airport Way 119,370Employment 2) Closed $13.54 industrial uses, and exposure is inferior, although the site has visibility from Portland Airport Way. Overall a low indicator. 47‐Eleven Site 0.59CN2 Mar‐12 $356,000 18,000 $13.76 Up Zoned for FAR up to 0.75:1, well below the subject's 3:1. Lower traffic counts. 92nd & Holgate 25,876(Neighborhood Closed $14.86 Overall a low indicator. Portland Commercial 2) 5 2110 SE 82nd Ave. 0.72 CS (Commercial Dec‐11 $335,000 28,000 $10.69 Up Short marketing time during a recession indicates a below‐market price. Zoned 2110 SE. 82nd Ave. 31,350 Storefront ) Closed $11.65 for a lower building height. Low indicator. Portland 6Les Schwab Site 0.94 CG (General Nov‐11 $650,000 50,000 $15.84 Up Site has excellent visibility and exposure to traffic; however, access to the site is 2500 SE. Tacoma St. 41,042 Commercial) Closed $17.26 very circuitous. Surrounding uses are a mixture of older residential and Portland commercial; somewhat isolated due to the the highway divider on McLoughlin Boulevard, which forms the north property boundary (similar to the subject). Zoned for a lower building height. This is a low indicator.

7 Autozone Site 1.12 DCL (Downtown Apr‐11 $870,000 29,000 $17.89 None Site with good exposure and superior surrounding uses. Zoning allows for 1:1 425 NE. Burnside 48,633 Commercial Low Closed $19.50 FAR. Overall a good indicator. Gresham Rise) 8 Goodwill Site 3.79 CG (General Jun‐10 $4,050,000 30,000 $24.50 Down Slightly superior surrounding uses and traffic counts but larger site. Zoned for a 1350 NE. 122nd Ave. 165,294 Commercial) Closed $26.71 lower building height. Overall superior. Portland 9GSA Office Site 1.72 CC (Community Feb‐10 $825,000 29,000 $11.01 Up Superior surrounding uses and simillar exposure. However, Zonining is very 17899‐18081 SE. Division 74,923 Commercial) Closed $12.00 restrictive for residential, retail, and office uses. Uses permitted outright include Gresham dayceare and live‐work development; elderly housing, schools; cific usse, Draftcommunity services,and medical uses are permitted through a special use review. This is a low indicator. 10 Human Solutions Site 1.82 RTC (Rockwood Mar‐07 $1,040,000 32,000 $13.13 Up This site is zoned Rockwood town Center, which permits retail, service, and NE. 181st & Couch Street 79,179 Town Center) Recorded $13.13 daycare; elderly housing, medical, civic uses and community services are Gresham permitted via a special use review. Zoning is rather restrictive. This is also a low indicator.

Cully Boulevard Plaza Land Valuation 77

Land Value Conclusion Prior to adjustments, the sales reflect a range of $10.69 ‐ $24.50 per square foot. Adjusting for expenditures and market conditions, the comparables range from $12.00 to $26.71 per square foot.

Based on the comparables, the subject’s value should be above $17.26 per square foot (Sale 6) but below $23.09 (Sale 2).e Th comparables that best bracket the subject are Sales 1 ($20.40) and 7 ($19.50); primary weight is given to these comparables.

Based on the preceding analysis, we reach a land value conclusion as follows:

Land Value Conclusion Indicated Value per Square Foot $20.00 Subject Square Feet 95,396 Indicated Value $1,907,920 Rounded $1,900,000

Draft

Cully Boulevard Plaza Sales Comparison Approach 78

Sales Comparison Approach The sales comparison approach develops an indication of value by comparing the subject to sales of similar properties. The steps taken to apply the sales comparison approach are:

 Identify relevant property sales;  Research, assemble, and verify pertinent data for the most relevant sales;  Analyze the sales for material differences in comparison to the subject;  Reconcile the analysis of the sales into a value indication for the subject. The subject is not in a rentable condition, and will require extensive interior demolition and interior/exterior renovations before it can be re‐tenanted. Because of this, the value of the improvements, if any, is in the building shell.

To ascertain whether the improvements contribute to value, we have searched for sales of comparable buildings that were purchased for creative re‐use or complete rehabilitation. Such sales are scattered throughout the area, and their sale prices per building square foot are greatly impacted by their underlying value because the majority of the value is typically allocated to the land with minor contribution from the improvements. Therefore, for correlation purposes, the estimated value of the underlying land of each comparable is deducted from the comparable’s sale price in order to estimate the value of the improvements alone. The comparable improvements are then analyzed relative to the subject in order to conclude the subject improvement value.

Land value at the time of the sale of each comparable location is estimated based on 3‐6 comparable land sales. The land sales are not presented in this analysis for simplicity due to the large volume of data but are retained in our file.

To apply the sales comparison approach, we searched for sale transactions within the following parameters:

 Property Type: A variety of commercial or industrial buildings scheduled for complete renovation or conversion to another use  Location: Multnomah County  Size: 10,000 to 50,000 squareDraft feet of gross rentable area  Age/Quality: Older buildings in poor to fair condition with functional obsolescence  Transaction Date: Past 3 years For this analysis, we use price per square foot of gross leasable area as the appropriate unit of comparison because market participants typically compare sale prices and property values on this basis. The sales considered most relevant are summarized in the following table.

Cully Boulevard Plaza Sales Comparison Approach 79

Summary of Comparable Improved Sales Sale Acres; Date; Yr. Built; Land SF; Land Effective No. Name/Address Status # Stories FAR Const Type; Zoning Sale Price RSF $ per RSF 1Jower's Building Jun‐14 1906 0.12Masonry & Mill CSd $520,000 9,262 $56.14 8803 N. Lombard St. Closed 2 5,232 Portland 1.77 Comments: Vacant building was in raw shell condition at time of sale. The seller had totally gutted the interior and put on a new roof; both floors are all open space. The ground floor has concrete flooring; there are stairs to the second floor which has a wood floor. Walls are uninsulated exposed brick. The seller had completed a limited seismic upgrade. The interior brick walls had been unreinforced; the seller put in glu‐lam wood to reinforce the walls. There is no asbestos. The building has electric service, plus water and sewer; there is one restroom. The buyer purchased with the intention to renovate into 1 or 2 retail tenant spaces on the ground floor and 4 apartments on the second floor. There was strong interest in this building since there is a new building next door called Two‐Thirds plus New Seasons announced they will have a new grocery store on Lombard. Buyer's was of the opinion that the seller may have sold at a loss considering the work that was put into the building. 2Frmr. Gentleman's Club Oct‐13 1951 0.81Brick over cinder IG2h $775,000 12,596 $61.53 8102 NE. Killingsworth St. Closed 2 35,284 block Portland 0.36 Comments: Seller carried contract of $500,000 for 5 years, which (according to the broker who represented both sides) did not affect the sale price of $775,000. The vacant property was on the market over a year with asking price of $1,200,000. This was a former strip club in an older building. The exterior was in poor condition; however, the roof was adequate and had 7 years left on the warranty. The interior was also in poor condition and needed a lot of money to make improvements. Depending on the level of finish, interior improvements could run anywhere from $50,000 to $350,000 according to the broker. There is no known asbestos but the buyer waived inspections. The buyers do not have a clear plan; they considered selling cars on the parking lot or reopening the building as a night club. The buyers bought for the land primarily; the broker felt that the highest and best use of the property was as a night club. The broker believes the underlying IG2 land value was $250,000‐ $300,000; comparable data indicates value around $9 per SF. 3Former Kelly Moore Store Sep‐13 1965 0.66Concrete block CG $800,000 12,000 $66.67 1414 SE. 82nd Ave. Closed 1 28,750 Portland 0.41 Comments: This was an unsolicited offer by the buyer whose plan was to use the building as retail/wholesale outlet for Asian food products. The existing showroom and offices were in good shape. Interior of warehouse needed paint, exterior paint needed as well as roof repair and redo landscaping. 433rd Hollywood Building Jul‐12 1947 0.45Poured concrete CSdj $2,225,000 32,000 $56.33 1205 NE. 33rd Ave. / 3275 Closed – 19,602 +15,000 bsmt. Portland 2.39 Comments: The property consists of two interconnected buildings with 32,000 SF of above ground rentable area and 15,000 SF in a windowless basement. Assuming the basement is worth 50% of the above ground area, the price per SF of building is calculated on this basis. Paved parking lot had 13 spaces. Previously purchased by the seller in 2009 in rough condition. Seller removed the carpet in the showroom, removed asbestos‐ containing floor tiles (cost believed to be minor), and installed new storefronts but did not make any electrical improvements. Hollywood Properties purchased the vacant building in 7/2012 to use for Standard TV and Appliance sales. The 2012 buyer continued the renovations and spent $500,000‐$600,000 on improvements to the building for appliance sales use. The broker in the 2012 transaction was of the opinion that the underlying land value was $40/SF in 2012 since the site was in escrow to Walgreens at that price in 2012 but the deal fell through. However, the pending prcie to Walgreens did not reflect the cost of demolition in order to have a development‐ready site, which would have brought the effective price for the land higher. Comparable data suggests underlying land value closer to $45 per SF.

53440‐3450 SE Alder St. Mar‐12 1921 0.25 B R2.5 $550,000 11,000 $50.00 3440‐3450 SE. Alder Closed Draft– 11,050 Portland 1.00 Comments: Industrial building in poor condition was purchased for reuse. Verified by public records only. A review of permits on Portland CGIS indicates that the building was converted to residential townhomes. There was no on‐site parking. Perimeter inspection on January 2015 confirmed residential use. Subject Pending 1951 2.19 – 25,991 Cully Boulevard Plaza One 0.27 Portland, OR 3.27/1,000

Cully Boulevard Plaza Sales Comparison Approach 80

Comparable Improved Sales Map

Draft

Cully Boulevard Plaza Sales Comparison Approach 81

Sale 1 Sale 2 Jower's Building Former Viewpoint Gentleman's Club

Sale 3 Sale 4 Former Kelly Moore Store Draft33rd Hollywood Building

Sale 5 3440‐3450 SE Alder St.

Cully Boulevard Plaza

Sales Comparison Approach 82

Adjustment Factors The sales are compared to the subject and adjusted to account for material differences that affect value. Adjustments are considered for the following factors, in the sequence shown below.

Adjustment Factors Effective Sale Price Accounts for atypical economics of a transaction, such as excess land, non‐realty components, expenditures by the buyer at time of purchase, or other similar factors. Usually applied directly to sale price on a lump sum basis. No adjustments were warranted. Real Property Rights Leased fee, fee simple, leasehold, partial interest, etc. All of the buildings were vacant or vacated prior to the sale; no adjustments were indicated. Financing Terms Seller financing, or assumption of existing financing, at non‐market terms. No adjustments were warranted. Conditions of Sale Extraordinary motivation of buyer or seller, such as 1031 exchange transaction, assemblage, or forced sale. No adjustments were warranted. Market Conditions Changes in the economic environment over time that affect the appreciation and depreciation of real estate. A discussion follows this table. Location, Access/Exposure Market or submarket area influences on sale price; surrounding land use influences; convenience to transportation facilities; ease of site access; visibility from main thoroughfares; traffic counts. Adjustments are made indirectly by deducting land value, which takes into consideration surrounding uses, access, exposure, and traffic counts. No other adjustments are warranted. Size Inverse relationship that often exists between building size and unit Draftvalue. No adjustments were necessary. Parking Ratio of parking spaces to building area. Comparables 1 and 5 had no on‐site parking, which was taken into consideration in the correlation. Building Quality, Construction quality, amenities, market appeal, functional utility. Age/Condition Only qualitative observations could be made as quality and especially condition covers a wide spectrum that cannot be enumerated with any certainty.

Cully Boulevard Plaza

Sales Comparison Approach 83

Issues requiring elaboration are addressed in the following paragraphs.

Market Conditions The sales took place from March 2012 to June 2014. Market conditions generally have been strengthening over this period through the effective date of value. Although demand for buildings nearing the end of their useful lives is growing, changes in values, if any, are rather gradual due to the risk inherent in undertaking a major renovation and a narrower pool of buyers for this property type. As a result, we apply upward adjustments of 3% per year to account for this trend.

Analysis and Adjustment of Sales Quantitative adjustments of the comparable sales are shown the following table followed by a discussion of qualitative observations.

Improved Sales Adjustment Grid Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4 Comparable 5 Property Name Cully Boulevard Jower's Building Frmr. Former Kelly 33rd Hollywood 3440‐3450 SE Plaza Gentleman's Moore Store Building Alder St. Club Address 6723 ‐ 6921 NE. 8803 N. Lombard 8102 NE. 1414 SE. 82nd 1205 NE. 33rd 3440‐3450. SE Killingsworth St. St. Killingsworth St. Ave. Ave. / 3275 NE. Alder Sandy Blvd. Sale Date Jun‐14 Oct‐13 Sep‐13 Jul‐12 Mar‐12 Sale Status Closed Closed Closed Closed Closed Sale Price $520,000 $775,000 $800,000 $2,225,000 $550,000 Financing Terms Adjustment – – – – – Conditions of Sale Adjustment – – – – – Value per SF of Underlying Land $25.00 $9.00 $13.50 $42.00 $30.00 Total Value of Land $130,800 $317,556 $388,125 $823,284 $331,500 Effective Building Sale Price $389,200 $457,444 $411,875 $1,401,716 $218,500 Gross Building Area 25,991 9,262 12,596 12,000 39,500 10,890 Price per SF of Gross Leasable Area $42.02 $36.32 $34.32 $35.49 $20.06 Property Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple % Adjustment – – – – – Financing Terms % Adjustment – – – – – Conditions of Sale % Adjustment – – – – – Market Conditions 12/16/2014Draft Jun‐14 Oct‐13 Sep‐13 Jul‐12 Mar‐12 Annual % Adjustment 3% 1% 4% 4% 7% 8% Adjusted Price $42.44 $37.77 $35.70 $37.97 $21.67

Sale 1 is a property located in St. John’s, an area that is quickly gaining in popularity. This comparable was in shell condition, but the seller had done some limited seismic upgrades the cost of which is unknown but typically upward of $10 per SF. Assuming no seismic upgrades were made, the comparable would be closer to $32 per square foot. The seller also put a new roof on the building, and the exterior walls are in better condition. The overall size and price of the building make it affordable to a broader spectrum of investors, which puts an upward pressure on price per square foot. The positive attributes (new roof, seismic upgrades, and smaller size) are partly offset by the lack of on‐site parking. Overall, this is a high indicator of shell value.

Cully Boulevard Plaza

Sales Comparison Approach 84

Sale 2 is a building located near the subject; it sold at an adjusted improvement price of $37.77 per square foot. The buyers purchased this property without a specific plan. The overall condition was slightly superior to the subject; it was estimated that the building could be made rentable with TIs of around $5 to $30 per SF. Overall size is roughly half the size of the subject, putting an upward pressure on sale price per square foot. Overall this is a slightly high indicator of value.

Sale 3 is a former paint store building located on SE 82nd Avenue just west of the I‐205 freeway. Deducting for land value and adjusting for improving market conditions, the adjusted price for the improvements only is $35.70 per square foot for this building, which is roughly half the size of the subject. Although some interior demolition was necessary for the conversion to a small grocery store and the exterior and landscaping needed some work, the overall condition was superior to the subject. Overall, this is a high indicator of shell value at $35.70 per square foot.

Sale 4 is a former used furniture building in the Hollywood District. The property was previously bought by the seller in 2009, and the seller made some improvements to bring the building to “white shell” condition. The buyers in the 2012 transaction invested $550,000 ‐ $600,000 in TIs and converted the building to an appliance store. Upon deducting land value and adjusting for market conditions, the resulting price is equivalent to $37.97 per square foot of building, which assumes the value of the basement is 50% of the above‐ground value, which is a reasonable assumption based on retail rents for basement space being typically around 50% of above‐ground rates. This building is larger than the subject, but was overall in better condition as evidenced by the fact that the buyers only had to spend in the neighborhood of $20 per square foot of above‐ground building area on TIs. This is a high indicator.

Sale 5 is was a warehouse in a residential close‐in SE location. The building was at the end of its useful life based on a 2012 perimeter inspection. The exact interior condition at the time of the sale is unknown, but the building was gutted and converted to residential units with individual interior courtyards. Adjusting for land value and market conditions, the value of the improvements was approximately $21.67 per square foot. The building was a simple rectangular warehouse, and is considered inferior quality to the subject. Further, site coverage is 100%, thus the building had no on‐site parking, which can be problematic in close‐in residential neighborhoods. Overall this is a low indicator of value. Draft

Cully Boulevard Plaza

Sales Comparison Approach 85

Value Indication The comparables indicate a range from $21.67 to $42.44 per square foot of building shell. Thus, it appears that the subject building does contribute to value. Taking into consideration the overall size and condition of the improvements, we conclude that a shell value of $30.00 per square foot is reasonable for the subject.

This concluded shell value assumes that the building is in shell condition, in other words the interior has been gutted and the building is ready for exterior renovations and interior buildout. Cost of removing the interior partitions, fixtures, and plumbing is not available, and short of obtaining a professional estimate, the only source of such data is Marshall Valuation Service (MVS). The following indications of demolition costs are available from MVS:

Draft

Cully Boulevard Plaza

Sales Comparison Approach 86

Based on these ranges, interior demolition including floor covering, interior partitions (studs & drywall), and acoustic tile would range from about $1.58 to $3.70 per square foot. This range does not include the removal of plumbing fixtures, which runs $51 to $270 per fixture. The subject building has numerous restrooms; the exact count is unknown. Similarly, the range does not include the removal of electrical fixtures, wires, or receptacles.

Because of the many unknowns, interior demolition is estimated at $5.00 per square foot, or ±$130,000 total.

Accordingly, the subject’s value is concluded as follows:

Value Indication by Sales Comparison Land Indicated Value per SF of Land $20.00 Land Square Feet 95,396 Indicated Land Value (Rounded) $1,900,000

Building Indicated Value per SF of Building $30.00 Subject Building Square Feet 25,991 Indicated Building Value $779,730 Adjustments Interior Demolition ‐$130,000 Indicated Value $649,730 Rounded $600,000

Overall Land $1,900,000 Building $600,000 Total Value $2,500,000

Please note that the concluded value assumes that there are no hazardous materials. The adjustment for interior demolition does not include the cost to dismantle and move any fixtures, the existing restaurant equipment, or items storesDraft in the building.

Cully Boulevard Plaza

Sales Comparison Approach 87

Market Rent Analysis At the client’s request, we also estimate market rent for the subject under a variety of uses including restaurant and grocery.

Grocery Store Use The following data is used in estimating market rent for a grocery store:

Summary of Comparable Rentals ‐ Anchor Lease (Mos. Lease Property Information Description Tenant SF Start )Rent/SFType 1Harbor Freight Tools Yr Blt. 1969Harbor 21,725 Jul‐14 120 $12.00 NNN 5035 SE. 82nd Ave. Stories: 1 Freight Portland GLA: 21,725 Tools USA Parking Ratio: 6.8 /1,000 Comments: Rent is $12 NNN in Yrs. 1‐5 and increases 10% to $13.20 in Yr. 6. Lease was signed in 11/2013 and to commence in mid‐2014 upon completion of renovations. TI's unknown. 2Jantzen Beach Super Center Yr Blt. 2013TJ Maxx 25,500 Sep‐13 120 $12.50 NNN 12135 N Parker Ave Stories: 1 Portland GLA: 368,000 Parking Ratio: – Comments: Build‐to‐suit. Lease was signed in early fall of 2012 and to commence upon store opening in September or October 2013. Located next to a new Burlington Coat Factory store and across from a Home Depot. This is a 10‐year lease with rent of $12.50 NNN in Yrs. 1‐5 and $13.25 in Yrs. 6‐10. No free rent was given; it yis a turnke deal. 34926 SE Division Retail Yr Blt. 1941Green 6,500 Jul‐13 120 $17.50 NNN 4926 SE. Division St. Stories: 1 Zebra Portland GLA: 6,500 Grocery Parking Ratio: 2.3 /1,000 Comments: 10‐year lease of building and associated parking on the southwest corner of 50th and Division. Lease included TI allowance of $23/SF to convert the space to grocery use, which will commence 150 days after the permits have been issued. There were no concessions given. Rate is flat for first 2 years, increasing 3% per year thereafter. 4Powell Square Shop. Ctr. Yr Blt. 1989Petco 6,203 Mar‐13 120 $19.00 NNN 3806‐3848 SE. Powell Stories: 1 Unleashed Portland GLA:Draft 19,545 Parking Ratio: 2.0 /1,000 Comments: New 10‐year lease of the former O'Reilly's space. Rent is $19 NNN in Yrs. 1‐5 and increases to $20 in Yrs. 6. NNNs are $4.65. Tenant did not receive any free rent but did receive turnkey TI's of $35/SF. 5Aaron's Yr Blt. 2006 Aarons 11,429 Jan‐13 180 $11.92 Abs. 1622 N. Lombard St. Stories: 1 Net Portland GLA: 11,429 Parking Ratio: 1.0 /1,000 Comments: New 15‐year lease starts at $11.92 absolute net with 10% increase every 5 years.

Cully Boulevard Plaza

Sales Comparison Approach 88

Draft

Cully Boulevard Plaza

Sales Comparison Approach 89

Draft

Cully Boulevard Plaza

Sales Comparison Approach 90

The majority of recent grocery store leases in the Portland MSA are for new built‐to‐suit construction in close‐in locations or in new shopping centers and include several leases to New Seasons Market at vastly superior locations including Grant Park Village (under construction), Nyberg Rivers in Tualatin, or Northwest Portland. Rates achieved at these locations for new customized buildings range from $18 to $25. The subject location has a significantly lower density of residential development and lower disposable income, thus rental rates in this range would not be achievable in this location for a renovated second‐generation building. Therefore rental rates for larger spaces and anchor spaces in renovated buildings or secondary locations are more appropriate comparables.

The comparables range from $11.92 to $19.00 per square foot. The two highest leases ($17.50 and $19.00 per square foot) are for the two smallest spaces (6,500 and 6,203 square feet). In both cases, the tenants received substantial TIs of $25 to $35 per square foot. If occupied fully or in part by a grocery tenant, the subject’s rental rate would more likely be closer to Comparables 1, 2, or 5 ($12.00, $12.50, and $11.92, respectively).

TIs are unknown for Comparable 5. Comparable 2 was new construction of a 25,500 square foot space at Jantzen Beach Super Center, and the space was fully built out for the tenant at the landlord’s expense. The starting rate for this lease was $12.50 per square foot. Surrounding uses are mostly new construction and are superior, but the location is more of a “destination” location and even though it has some limited exposure to southbound traffic on I‐5, it does not have the drive‐by traffic of more urban locations. In some respect the subject’s location is also somewhat isolated due to the lack of residential uses north of Portland Highway and limited commercial uses near the subject.

Comparable 1 was a second generation building; TIs are unknown. The starting rent for this lease in July 2014 was $12.00 per square foot, and the space was just slightly below the subject’s size. Although the building was in average condition, overall it has a dated appearance of a 1960’s strip mall with little curb appeal, and is considered inferior to the subject as renovated. On the other hand, this property has a superior location adjacent to a Fred Meyer development and within 0.75 mile of an I‐205 freeway interchange. Overall, this is a reasonable indication of rent for the subject.

Conclusion Overall, the subject rent could vary between $12 and $15 per square foot depending on the level of finish and size of space. The lower rate is applicable to a full building lease with basic finishes; the upper end of the range is applicable to a 6,000‐12,000 square foot space with higher quality of finishes. A typical lease would beDraft for a 10‐year period with 10% increases every 5 years.

Cully Boulevard Plaza

Sales Comparison Approach 91

Restaurant Use The following comparables are used in projecting market rent for the subject if built out as a restaurant.

Summary of Comparable Rentals ‐ Restaurant Lease Term Lease Property Information Description Tenant SF Start (Mos.) Rent/SF Type 1The Hollywood Yr Blt. 2013Pono Farms 4,010 Jan‐14 84 $21.00 Triple 4112 NE. Sandy Blvd. Stories: 5 Butcher & Portland GLA: 26,199 Restaurant Multnomah County Parking Ratio: – Comments: New 7‐year lease of all of the ground floor commercial space in the Hollywood apartments building signed 8/21/13. Construction was to start in late 2013 or early 2014. The space is demised into two suitesd an the tenant will operate a restaurant/butcher shop in the larger 2,700 SF space with a bar in the smaller space. Rent starts at $21 NNN for all of the space and increases 5% annually. NNNs are $5.50. Tenant received 3 mos. of free rent at beginning of lease but must pay NNNs during that time. TI's are $45/SF. Landlord to provide stubbed HVAC and tenant will distribute.

2 Division St. Retail Yr Blt. 2012Salt & Straw 1,206 Aug‐13 84 $22.00 NNN 3333‐3339 SE. Division Stories: – Ice Cream Portland GLA: 4,440 Multnomah County Parking Ratio: – Comments: New 84‐month lease was signed in May 2012 to commence in the summer 2013 upon completion of construction. Starting rent is $22 NNN with 3% annual increases. Landlord gave TI's of $40/SF for this first generation space. Tenant paid TI's are for interior wall surfaces and finishes as well as the ADA restroom or an additional $35/SF approximately. Tenant received 5 months of free rent. 3 Morrison Place Yr Blt. 1955Light Bar 1,510 Apr‐13 60 $22.00 NNN 1401 SE. Morrison Stories: 1 (Cafe & Bar) Portland GLA: 15,400 Multnomah County Parking Ratio: 3.0 /1,000 Comments: New 5‐year lease of the former wine shop starts at $22 NNN with NNNs of $6.00/SF. Rent increases 2% annually in Yrs. 2 and 3, then increases 3% annually in Yrs. 4 and 5. Lease was signed near the end of 12/2012. Tenant had 90 days for their build‐out. Tenant received TI's of $15,000 or $9.93/SF. The broker stated that since this building has parking ratio of 3:1,000 that this is worth a couple of dollars per SF compared to buildings that do not have on‐site parking.

4DRD Productions Yr Blt. 1957Analog Bar & 3,500 Oct‐12 69 $18.00 NNN 720 SE. Hawthorne Stories: 2 Restaurant Portland GLA: 7,000 Multnomah County Parking Ratio: – Comments: New 69‐month lease of groundDraft floor second generation bar/restaurant space includes 90 days of build‐out time and 6 months of free rent in lieu of TI's. Space already had a hood and plumbing for bar restaurant use. Starting rent is $18 NNN with 3% annual escalations. NNNs are $3.60. The tenant is also operating an entertainment venue out of the same building.

5FuBonn Shop. Ctr. Yr Blt. 1963 O'Sushi 1,800 Jun‐12 65 $20.50 NNN 2850 SE. 82nd Ave. Stories: – Portland GLA: 91,576 Multnomah County Parking Ratio: – OR Comments: New 65‐month lease of restaurant space at 2838 SE 82nd Ave. starts at $20.50 NNN with 3% annual escalations. Tenant took space "as is" and received 5 months of free rent. The space had already been built out as restaurant use. The restaurant is a unit in a two‐unit pad building at the northwest corner of the center.

Cully Boulevard Plaza

Sales Comparison Approach 92

Draft

Cully Boulevard Plaza

Sales Comparison Approach 93

Draft

Cully Boulevard Plaza

Sales Comparison Approach 94

This data set consists of two first generation leases and three second generation leases. The spaces range from 1,206 to 4,010 square feet, and rental rates range from $18.00 to $22.00 per square foot.

The two first generation leases (rates $21.00 and $22.00 per square foot) are in superior locations but have no on‐site parking. The same spaces with on‐site parking would probably achieve rents of $23 to $25). Both tenants received substantial TIs ($40 and $45 per square foot from shell condition) in addition to free rent.

The second generation leases have rates of $20.50 and $22 for the spaces with on‐site parking and $18.00 without parking. TIs were considerably lower (none to $9.93 per SF) because two out of three were already finished as restaurants, and suited the tenants. While this is the ideal scenario, it is relatively uncommon to find a good match for an existing restaurant space. Most often second generation restaurant spaces have long lease‐up times and very often the new tenant will require new buildout. Lease‐up time is somewhat location‐specific; demand for restaurant space in close‐in eclectic neighborhoods with high density of residential development is considerably higher than in suburban locations, and spaces lease up more rapidly.

Lease‐up time and rental rate is to a great degree dependent on size; restaurant spaces over 4,000 square feet typically take much longer to lease up than spaces in the 1,500 to 2,500 square foot range, and when they do lease, achievable rents are usually considerably lower.

Upon completion of renovations, the subject will be a fully renovated building with new interior finishes and on‐site parking. Although the comparables suggest that a rate around $23 per square foot with on‐site parking, this rate may not be achievable in the subject location along the edge of residential development and little synergy with surrounding uses. Thus, a lower rate rather than attractive location may be the most effective motivating factor for a prospective tenant. For this reason, we conclude a rate of $18 per square foot triple net for a 1,500 to $2,500 square foot space, a lease term of 63 months with 3 months free, and tenant improvements of $40 for space in a cold shell condition (bare studs, concrete floor, and utilities stubbed in but not distributed).

Market Rent Conclusion Our conclusions are summarized as follows:

Concluded Market Lease Terms DraftLease Market Rent/ Rent Term Free Rent TI/SF Space Type SF SF/Yr Escalations Lease Type (Mos.) (Mos.) Shell Anchor 6,000 ‐ 12,000 $12.00 ‐ $15.00 10% every 5 years NNN 123 3 $10 to $25 Restaurant 1,500 to 2,500 $18.00 2.5% per year NNN 63 3 $40.00

In addition to anchor and restaurant comparables, data pertaining to general retail rates of potential interest to the client are provided in the addendum.

Cully Boulevard Plaza

Reconciliation and Conclusion of Value 95

Reconciliation and Conclusion of Value Reconciliation involves the weighting of alternative value indications, based on the judged reliability and applicability of each approach to value, to arrive at a final value conclusion. Only the sales comparison approach was applicable in this case.

The values indicated by our analyses are as follows:

Value Conclusion Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value Fee Simple December 16, 2014 Underlying Land Value $1,900,000 Building Shell Value $600,000 Overall Indicated Value $2,500,000 Market Rent SF NNN Rent per SF per Year Anchor Space 6,000 to 12,000 $12.00 to $15.00 Restaurant Space 1,500 to 2,500 $18

Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions. 1. Our inspection was limited by a large volume of personal property stored in the building, which made access difficult. Further, parts of the building had to be inspected without lighting (using flashlights only), and we did not have access to the Mexican restaurant on the west end of the building. We primarily rely on the building inspector's report, which was also somewhat limited in scope, when analyzing conditions of the building. 2. The cost of interior demolition assumes that there are no hazardous substances. It is estimated based on "typical" building configuration, and the estimate is very approximate. We recommend that the client obtain a professional estimate. Our value conclusions are also subject to the following hypothetical conditions: 1. Large portions of the building are used for storage of personal property. Our analysis and value conclusion is based on the assumption that fixtures and personal property have been removed in order to facilitate interior demolition. Draft 2. The concluded value excludes the used restaurant equipment. We are not qualified to estimate the salvage value, if any, of the equipment.

Cully Boulevard Plaza Certification 96

Certification

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

1. The statements of fact contained in this report are true and correct. 2. 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. 3. We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. 4. We have not performed any 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. 5. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 6. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 7. 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. 8. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice as well as applicable state appraisal regulations. 9. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 10. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorizedDraft representatives. 11. Lenka M. Keith, MAI, MRICS, made a personal inspection of the property that is the subject of this report. Brian A. Glanville, MAI, CRE, FRICS, has not personally inspected the subject. 12. Significant real property appraisal assistance was provided by Linda D. Keele who has not signed this certification. 13. We have experience in appraising properties similar to the subject and are in compliance with the Competency Rule of USPAP.

Cully Boulevard Plaza Certification 97

14. As of the date of this report, Lenka M. Keith, MAI, MRICS, and Brian A. Glanville, MAI, CRE, FRICS, have completed the continuing education program for Designated Members of the Appraisal Institute.

Lenka M. Keith, MAI, MRICS Brian A. Glanville, MAI, CRE, FRICS Certified General Real Estate Appraiser Certified General Real Estate Appraiser OR Certificate # C000784 (Exp. 09/30/2015) OR Certificate # C000160 (Exp. 04/30/2015)

Draft

Cully Boulevard Plaza Assumptions and Limiting Conditions 98

Assumptions and Limiting Conditions

This appraisal and any other work product related to this engagement are limited by the following standard assumptions, except as otherwise noted in the report:

1. The title is marketable and free and clear of all liens, encumbrances, encroachments, easements and restrictions. The property is under responsible ownership and competent management and is available for its highest and best use. 2. There are no existing judgments or pending or threatened litigation that could affect the value of the property. 3. There are no hidden or undisclosed conditions of the land or of the improvements that would render the property more or less valuable. Furthermore, there is no asbestos in the property. 4. The property is in compliance with all applicable building, environmental, zoning, and other federal, state and local laws, regulations and codes. 5. The information furnished by others is believed to be reliable, but no warranty is given for its accuracy.

This appraisal and any other work product related to this engagement are subject to the following limiting conditions, except as otherwise noted in the report:

1. An appraisal is inherently subjective and represents our opinion as to the value of the property appraised. 2. The conclusions stated in our appraisal apply only as of the effective date of the appraisal, and no representation is made as to the effect of subsequent events. 3. No changes in any federal, state or local laws, regulations or codes (including, without limitation, the Internal Revenue Code) are anticipated. 4. No environmental impact studies were either requested or made in conjunction with this appraisal, and we reserve the right to revise or rescind any of the value opinions based upon any subsequent environmental impact studies. If any environmental impact statement is required by law, the appraisalDraft assumes that such statement will be favorable and will be approved by the appropriate regulatory bodies. 5. Unless otherwise agreed to in writing, we are not required to give testimony, respond to any subpoena or attend any court, governmental or other hearing with reference to the property without compensation relative to such additional employment. 6. We have made no survey of the property and assume no responsibility in connection with such matters. Any sketch or survey of the property included in this report is for illustrative purposes only and should not be considered to be scaled accurately for size. The appraisal covers the property as described in this report, and the areas and dimensions set forth are assumed to be correct.

Cully Boulevard Plaza Assumptions and Limiting Conditions 99

7. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any, and we have assumed that the property is not subject to surface entry for the exploration or removal of such materials, unless otherwise noted in our appraisal. 8. We accept no responsibility for considerations requiring expertise in other fields. Such considerations include, but are not limited to, legal descriptions and other legal matters such as legal title, geologic considerations such as soils and seismic stability; and civil, mechanical, electrical, structural and other engineering and environmental matters. Such considerations may also include determinations of compliance with zoning and other federal, state, and local laws, regulations and codes. 9. The distribution of the total valuation in the report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. The appraisal report shall be considered only in its entirety. No part of the appraisal report shall be utilized separately or out of context. 10. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or any reference to the Appraisal Institute) shall be disseminated through advertising media, public relations media, news media or any other means of communication (including without limitation prospectuses, private offering memoranda and other offering material provided to prospective investors) without the prior written consent of the persons signing the report. 11. Information, estimates and opinions contained in the report and obtained from third‐party sources are assumed to be reliable and have not been independently verified. 12. Any income and expense estimates contained in the appraisal report are used only for the purpose of estimating value and do not constitute predictions of future operating results. 13. Unless otherwise stated in the report, no consideration has been given to personal property located on the premises or to the cost of moving or relocating such personal property; only the real property has been considered. 14. The current purchasing power of the dollar is the basis for the values stated in the appraisal; we have assumed that no extreme fluctuations in economic cycles will occur. 15. The values found herein is subject to these and to any other assumptions or conditions set forth in the body of this repDraftort but which may have been omitted from this list of Assumptions and Limiting Conditions. 16. The analyses contained in the report necessarily incorporate numerous estimates and assumptions regarding property performance, general and local business and economic conditions, the absence of material changes in the competitive environment and other matters. Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis will vary from our estimates, and the variations may be material. 17. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific survey or analysis of the property to determine whether the physical aspects

Cully Boulevard Plaza Assumptions and Limiting Conditions 100

of the improvements meet the ADA accessibility guidelines. We claim no expertise in ADA issues, and render no opinion regarding compliance of the subject with ADA regulations. Inasmuch as compliance matches each owner’s financial ability with the cost to cure the non‐ conforming physical characteristics of a property, a specific study of both the owner’s financial ability and the cost to cure any deficiencies would be needed for the Department of Justice to determine compliance. 18. The appraisal report is prepared for the exclusive benefit of the Client, its subsidiaries and/or affiliates. It may not be used or relied upon by any other party. All parties who use or rely upon any information in the report without our written consent do so at their own risk. 19. No studies have been provided to us indicating the presence or absence of hazardous materials on the subject property or in the improvements, and our valuation is predicated upon the assumption that the subject property is free and clear of any environment hazards including, without limitation, hazardous wastes, toxic substances and mold. No representations or warranties are made regarding the environmental condition of the subject property. Integra Realty Resources – Portland, Integra Realty Resources, Inc., Integra Strategic Ventures, Inc. and/or any of their respective officers, owners, managers, directors, agents, subcontractors or employees (the “Integra Parties”), shall not be responsible for any such environmental conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because we are not experts in the field of environmental conditions, the appraisal report cannot be considered as an environmental assessment of the subject property. 20. The persons signing the report may have reviewed available flood maps and may have noted in the appraisal report whether the subject property is located in an identified Special Flood Hazard Area. We are not qualified to detect such areas and therefore do not guarantee such determinations. The presence of flood plain areas and/or wetlands may affect the value of the property, and the value conclusion is predicated on the assumption that wetlands are non‐ existent or minimal. 21. Integra Realty Resources – Portland is not a building or environmental inspector. Integra Portland does not guarantee that the subject property is free of defects or environmental problems. Mold may be present in the subject property and a professional inspection is recommended. 22. It is expressly acknowledgedDraft that in any action which may be brought against any of the Integra Parties, arising out of, relating to, or in any way pertaining to this engagement, the appraisal reports, and/or any other related work product, the Integra Parties shall not be responsible or liable for any incidental or consequential damages or losses, unless the appraisal was fraudulent or prepared with intentional misconduct. It is further acknowledged that the collective liability of the Integra Parties in any such action shall not exceed the fees paid for the preparation of the appraisal report unless the appraisal was fraudulent or prepared with intentional misconduct. Finally, it is acknowledged that the fees charged herein are in reliance upon the foregoing limitations of liability. 23. Integra Realty Resources – Portland, an independently owned and operated company, has prepared the appraisal for the specific intended use stated elsewhere in the report. The use of

Cully Boulevard Plaza Assumptions and Limiting Conditions 101

the appraisal report by anyone other than the Client is prohibited except as otherwise provided. Accordingly, the appraisal report is addressed to and shall be solely for the Client’s use and benefit unless we provide our prior written consent. We expressly reserve the unrestricted right to withhold our consent to your disclosure of the appraisal report or any other work product related to the engagement (or any part thereof including, without limitation, conclusions of value and our identity), to any third parties. Stated again for clarification, unless our prior written consent is obtained, no third party may rely on the appraisal nreport (eve if their reliance was foreseeable). 24. The conclusions of this report are estimates based on known current trends and reasonably foreseeable future occurrences. These estimates are based partly on property information, data obtained in public records, interviews, existing trends, buyer‐seller decision criteria in the current market, and research conducted by third parties, and such data are not always completely reliable. The Integra Parties are not responsible for these and other future occurrences that could not have reasonably been foreseen on the effective date of this assignment. Furthermore, it is inevitable that some assumptions will not materialize and that unanticipated events may occur that will likely affect actual performance. While we are of the opinion that our findings are reasonable based on current market conditions, we do not represent that these estimates will actually be achieved, as they are subject to considerable risk and uncertainty. Moreover, we assume competent and effective management and marketing for the duration of the projected holding period of this property. 25. All prospective value opinions presented in this report are estimates and forecasts which are prospective in nature and are subject to considerable risk and uncertainty. In addition to the contingencies noted in the preceding paragraph, several events may occur that could substantially alter the outcome of our estimates such as, but not limited to changes in the economy, interest rates, and capitalization rates, behavior of consumers, investors and lenders, fire and other physical destruction, changes in title or conveyances of easements and deed restrictions, etc. It is assumed that conditions reasonably foreseeable at the present time are consistent or similar with the future. 26. The appraisal is also subjectDraft to the following:

Cully Boulevard Plaza Assumptions and Limiting Conditions 102

Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results. An extraordinary assumption is uncertain information accepted as fact. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions. 1. Our inspection was limited by a large volume of personal property stored in the building, which made access difficult. Further, parts of the building had to be inspected without lighting (using flashlights only), and we did not have access to the Mexican restaurant on the west end of the building. We primarily rely on the building inspector's report, which was also somewhat limited in scope, when analyzing conditions of the building. 2. The cost of interior demolition assumes that there are no hazardous substances. It is estimated based on "typical" building configuration, and the estimate is very approximate. We recommend that the client obtain a professional estimate. Our value conclusions are also subject to the following hypothetical conditions: 1. Large portions of the building are used for storage of personal property. Our analysis and value conclusion is based on the assumption that fixtures and personal property have been removed in order to facilitate interior demolition. 2. The concluded value excludes the used restaurant equipment. We are not qualified to estimate the salvage value, if any, of the equipment.

Draft

Cully Boulevard Plaza Addenda

Addendum A Appraiser Qualifications Draft

Cully Boulevard Plaza

Integra Realty Resources Lenka M. Keith, MRICS Portland

Experience 1220 SW Morrison Street Suite 800 Lenka Keith became a real estate appraiser in 2000. She became a Certified General Appraiser Portland, OR 97205 in Oregon in 2004, and is also certified in Washington. She is an active member in the Appraisal Institute. Lenka’s focus is on retail, multifamily, and urban mixed‐use development projects, but T 503‐222‐7066 her appraisal experience includes all property types such as office, manufacturing and F 503‐274‐8630 warehouse, land, and proposed developments. Clients include lenders, development companies, accountants, law firms, and municipal urban renewal agencies. Lenka was Integra irr.com Realty Resources Appraiser of the year in 2007.

Professional Activities & Affiliations Appraisal Institute, Associate Member , January 2003 Member: City of Wilsonville Development Review Board, January 2012 Member: Toastmaster International, January 2006 Licenses Oregon, Certified General, C000784, Expires September 2015 Washington, Certified General, 1102015, Expires September 2016 Education PORTLAND STATE UNIVERSITY: Bachelor of Science, Chemistry (1984)

APPRAISAL INSTITUTE: Business Ethics (2014); Advanced Applications (2006); Advanced Sales Comparison and Cost Approach (2006); Highest and Best Use and Market Analysis (2006 ); Report Writing & Valuation Analysis (2006); Advanced Income Capitalization (2006); General Applications (2006); Uniform Standards of Prof Practice (Nat’l) (2006); Apartment Appraisal (2006); Basic Income Capitalization (2006); Appraisal Procedures (2006)

INTEGRA REALTY RESOURCES ACADEMY: Introduction to Argus (2003); Advanced Argus Training (2004);

OTHER EDUCATION: Intro to Green Building (Lorman; 2008); Appraising and Analyzing Retail Shopping Centers for Mortgage Underwriting (McKissock; 2011); Appraising and Analyzing Office Buildings for Mortgage Underwriting (McKissock; 2011) Draft

[email protected] ‐ 503‐478‐1009

Integra Realty Resources Brian A. Glanville, MAI, CRE, FRICS Portland

Experience 1220 SW Morrison Street Suite 800 Brian Glanville has been in the real estate appraisal profession in Oregon since 1976 and earned the Portland, OR 97205 MAI designation in 1982. In the 1980’s, Brian was the Regional Manager for Coldwell Banker Valuation Services, now CBRE. Brian is certified in both Oregon and Washington and has developed an expertise in the appraisal of hotels, high rise office buildings, and complex valuation assignments. T 503.222.7066 F 503.274.8630 He has experience as an expert witness in condemnation, property tax, and civil cases and has had a report submitted to the U.S. Supreme Court. Brian was President of the Greater Oregon Chapter of the Appraisal Institute in 1991 and received the Outstanding Service and Leadership Award in 1994 irr.com from the Chapter. He taught Principals and Procedures and the Uniform Standards of Professional Appraisal Practice for the Appraisal Institute from 1988 through 2002. During the 1990s, Brian served on the National Board of Directors of the Appraisal Institute and was National President in 2001. He received the Appraisal Institute’s Bert L. Thornton President’s Award for service to the profession in 2006.

Brian was invited into membership in The Counselors of Real Estate in 2002 and served as the Chapter Chair for Oregon. He was appointed as the U.S. representative to the International Valuation Standards Council in 2006, serving two terms and chaired the re structuring of that organization. He was named a Fellow in RICS in 2007, and served as Vice Chair of the Valuation, before being selected as Chair of RICS Americas, which covers both North and South America. RICS is an international, multi disciplined professional organization headquartered in London, with five world regions, including the Americas.

Brian has become an authority in the real property profession on fair value issues for financial reporting for publicly held corporations. He has taught seminars on the subject and assisted in developing a paper for the IVSC, in consultation with the International Federation of Accountants, on the use of an expert by auditors.

Brian is the Senior Managing Director of the Portland office of Integra Realty Resources.

Professional Activities & Affiliations Appraisal Institute, Member (MAI) Appraisal Institute, October 1982 Member: Counselor of Real Estate, July 2002 Member: International Valuation Standards Council, January 2006 ‐ December 2010 Royal Institute of Chartered Surveyors, Fellow (FRICS), October 2007 Licenses Oregon, Certified General, C000160, Expires April 2015 Washington, Certified General, 1100123, Expires AprilDraft 2015 Education Master of Education ‐ Oregon State University, 1975 Bachelor of Science ‐ Oregon State University, 1973

Successfully completed numerous real estate related courses and seminars sponsored by the Appraisal Institute, accredited universities and others.

Currently certified by the Appraisal Institute's voluntary program of continuing education for its designated members.

[email protected] ‐ 503.478.1002

Integra Realty Resources Brian A. Glanville, MAI, CRE, FRICS Portland

1220 SW Morrison Street Qualified Before Courts & Administrative Bodies Suite 800 Circuit Court, State of Oregon (Multnomah and Washington Counties) Portland, OR 97205 Oregon Tax Court T 503.222.7066 F 503.274.8630

irr.com

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[email protected] ‐ 503.478.1002

Addenda

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Cully Boulevard Plaza Integra Realty Resources, Inc. Corporate Profile

Integra Realty Resources, Inc. offers the most comprehensive property valuation and counseling coverage in the United States with 62 independently owned and operated offices in 34 states and the Caribbean. Integra was created for the purpose of combining the intimate knowledge of well‐established local firms with the powerful resources and capabilities of a national company. Integra offers integrated technology, national data and information systems, as well as standardized valuation models and report formats for ease of client review and analysis. Integra’s local offices have an average of 25 years of service in the local market, and virtually all are headed by a Senior Managing Director who is an MAI member of the Appraisal Institute.

A listing of IRR’s local offices and their Senior Managing Directors follows:

ATLANTA, GA ‐ Sherry L. Watkins., MAI, FRICS MIAMI/PALM BEACH, FL‐ Anthony M. Graziano, MAI, CRE, FRICS AUSTIN, TX ‐ Randy A. Williams, MAI, SR/WA, FRICS MINNEAPOLIS, MN ‐ Michael F. Amundson, MAI, CCIM, FRICS BALTIMORE, MD ‐ G. Edward Kerr, MAI, MRICS NAPLES, FL ‐ Carlton J. Lloyd, MAI, FRICS BIRMINGHAM, AL ‐ Rusty Rich, MAI, MRICS NASHVILLE, TN ‐ R. Paul Perutelli, MAI, SRA, FRICS BOISE, ID ‐ Bradford T. Knipe, MAI, ARA, CCIM, CRE, FRICS NEW JERSEY COASTAL ‐ Halvor J. Egeland, MAI BOSTON, MA ‐ David L. Cary, Jr., MAI, MRICS NEW JERSEY NORTHERN ‐ Barry J. Krauser, MAI, CRE, FRICS CHARLESTON, SC ‐ Cleveland “Bud” Wright, .,Jr MAI NEW YORK, NY ‐ Raymond T. Cirz, MAI, CRE, FRICS CHARLOTTE, NC ‐ Fitzhugh L. Stout, MAI, CRE, FRICS ORANGE COUNTY, CA ‐ Larry D. Webb, MAI, FRICS CHICAGO, IL ‐ Eric L. Enloe, MAI, FRICS ORLANDO, FL ‐ Christopher Starkey, MAI, MRICS CINCINNATI, OH ‐ Gary S. Wright, MAI, FRICS, SRA PHILADELPHIA, PA ‐ Joseph D. Pasquarella, MAI, CRE, FRICS CLEVELAND, OH ‐ Douglas P. Sloan, MAI PHOENIX, AZ ‐ Walter ‘Tres’ Winius III, MAI, FRICS COLUMBIA, SC ‐ Michael B. Dodds, MAI, CCIM PITTSBURGH, PA ‐ Paul D. Griffith, MAI, CRE, FRICS COLUMBUS, OH ‐ Bruce A. Daubner, MAI, FRICS PORTLAND, OR ‐ Brian A. Glanville, MAI, CRE, FRICS DALLAS, TX ‐ Mark R. Lamb, MAI,A, FRICS CP PROVIDENCE, RI ‐ Gerard H. McDonough, MAI, FRICS DAYTON, OH ‐ Gary S. Wright, MAI, FRICS, SRA RALEIGH, NC ‐ Chris R. Morris, MAI, FRICS DENVER, CO ‐ Brad A. Weiman, MAI, FRICS RICHMOND, VA ‐ Kenneth L. Brown, MAI, CCIM, FRICS DETROIT, MI ‐ Anthony Sanna, MAI, CRE, FRICS SACRAMENTO, CA ‐ Scott Beebe, MAI, FRICS FORT WORTH, TX ‐ Gregory B. Cook, SR/WA ST. LOUIS, MO ‐ P. Ryan McDonald, MAI, FRICS GREENSBORO, NC ‐ Nancy Tritt, MAI, SRA, FRICS SALT LAKE CITY, UT ‐ Darrin W. Liddell, MAI, CCIM, FRICS GREENVILLE, SC ‐ Michael B. Dodds, MAI, CCIM SAN ANTONIO, TX ‐ Martyn C. Glen, MAI, CRE, FRICS HARTFORD, CT ‐ Mark F. Bates, MAI, CRE, FRICS SAN DIEGO, CA ‐ Jeff A. Greenwald, MAI, SRA, FRICS HOUSTON, TX ‐ David R. Dominy, MAI, CRE, FRICS SAN FRANCISCO, CA ‐ Jan Kleczewski, MAI, FRICS INDIANAPOLIS, IN ‐ Michael C. Lady, MAI, SRA, CCIM, FRICS SARASOTA, FL ‐ Carlton J. Lloyd, MAI, FRICS JACKSON, MS ‐ J. Walter Allen, MAI, FRICS SAVANNAH, GA ‐ J. Carl Schultz, Jr., MAI, FRICS, CRE, SRA JACKSONVILLE, FL ‐ Robert Crenshaw, MAI, FRICS SEATTLE, WA ‐ Allen N. Safer, MAI, MRICS KANSAS CITY, MO/KS ‐ Kenneth Jaggers, MAI, FRICS SYRACUSE, NY ‐ William J. Kimball, MAI, FRICS LAS VEGAS, NV ‐ Charles E. Jack IV, MAI TAMPA, FL ‐ Bradford L. Johnson, MAI, MRICS LOS ANGELES, CAJohn ‐ G. Ellis, MAI, CRE, FRICS TULSA, OK ‐ Robert E. Gray, MAI, FRICS LOS ANGELES, CA ‐ Matthew J. Swanson, MAI WASHINGTON, DC ‐ Patrick C. Kerr, MAI, SRA, FRICS LOUISVILLE, KY ‐ Stacey Nicholas, MAI, MRICSDraft WILMINGTON, DE ‐ Douglas L. Nickel, MAI, FRICS MEMPHIS, TN ‐ J. Walter Allen, MAI, FRICS CARIBBEAN/CAYMAN ISLANDS ‐ James Andrews, MAI, FRICS MIAMI/PALM BEACH, FL ‐ Scott M. Powell, MAI, FRICS

Corporate Office 1133 Avenue of the Americas, 27th Floor, New York, New York 10036 Telephone: (212) 255‐7858; Fax: (646) 424‐1869; E‐mail [email protected] Website: www.irr.com

Addenda

Addendum B Comparison of Report Formats Draft

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Comparison of Report Formats

Reporting Options in 2014‐2015 Integra Reporting Formats Corresponding Reporting Options in Edition of USPAP Effective January 1, 2014 2012‐2013 Edition of USPAP

Appraisal Report Appraisal Report – Comprehensive Format Self‐Contained Appraisal Report

Appraisal Report – Standard Format Summary Appraisal Report

Appraisal Report – Concise Summary Minimum Requirements of Format Summary Appraisal Report

Restricted Appraisal Report Restricted Appraisal Report Restricted Use Appraisal Report

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USPAP Reporting Options The 2014‐2015 edition of USPAP requires that all written appraisal reports be prepared under one of the following options: Appraisal Report or Restricted Appraisal Report.

An Appraisal Report summarizes the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions. The requirements for an Appraisal Report are set forth in Standards Rule 2‐2 (a) of USPAP.

A Restricted Appraisal Report states the appraisal methods employed and the conclusions reached but is not required to include the data and reasoning that supports the analyses, opinions, and conclusions. Because the supporting information may not be included, the use of the report is restricted to the client, and further, the appraiser must maintain a work file that contains sufficient information for the appraiser to produce an Appraisal Report if required. The requirements for a Restricted Appraisal Report are set forth in Standards Rule 2‐2 (b).

Integra Reporting Formats under the Appraisal Report Option USPAP gives appraisers the flexibility to vary the level of information in an Appraisal Report depending on the intended use and intended users of the appraisal. Accordingly, Integra Realty Resources has established internal standards for three alternative reporting formats that differ in depth and detail yet comply with the USPAP requirements for an Appraisal Report. The three Integra formats are:  Appraisal Report – Comprehensive Format  Appraisal Report – Standard Format  Appraisal Report – Concise Summary Format

An Appraisal Report – Comprehensive Format has the greatest depth and detail of the three report types. It describes and explains the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions. This format meets or exceeds the former Self‐Contained Appraisal Report requirements that were contained in the 2012‐2013 edition of USPAP.

An Appraisal Report – Standard Format has a moderate level of detail. It summarizes the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions. This format meetsDraft or exceeds the former Summary Appraisal Report requirements that were contained in the 2012‐2013 edition of USPAP.

An Appraisal Report ‐ Concise Summary Format has less depth and detail ethan th Appraisal Report – Standard Format. It briefly summarizes the data, reasoning, and analyses used in the appraisal process while additional supporting documentation is retained in the work file. This format meets the minimum requirements of the former Summary Appraisal Report that were contained in the 2012‐ 2013 edition of USPAP.

On occasion, clients will request, and Integra will agree to provide, a report that is labeled a Self‐ Contained Appraisal Report. Other than the label, there is no difference between a Self‐Contained Appraisal Report and an Appraisal Report ‐ Comprehensive Format. Both types of reports meet or

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exceed the former Self‐Contained Appraisal Report requirements set forth in the 2012‐2013 edition of USPAP.

Integra Reporting Format under Restricted Appraisal Report Option Integra provides a Restricted Appraisal Report format under the USPAP Restricted Appraisal Report option. This format meets the requirements of the former Restricted Use Appraisal Report that were contained in the 2012‐2013 edition of USPAP.

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Addendum C Definitions Draft

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Definitions

The source of the following definitions is The Dictionary of Real Estate Appraisal, Fifth Edition, Appraisal Institute, Chicago, Illinois, 2010, unless otherwise noted.

As Is Market Value The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date.

Common Area 1. The total area within a property that is not designed for sale or rental but is available for common use by all owners, tenants, or their invitees, e.g., parking and its appurtenances, malls, sidewalks, landscaped areas, recreation areas, public toilets, truck and service facilities. 2. In a shopping center, the walkways and areas onto which the stores face and which conduct the follow of customer traffic. Common Area Charges Income collected from owners or tenants for the operation and maintenance of common areas; typically specified in commercial and retail leases.

Common Area Maintenance (CAM) 1. The expense of operating and maintaining common areas; may or may not include management charges and usually does not include capital expenditures on tenant improvements or other improvements to the property. a. CAM can be a line‐item expense for a group of items that can include maintenance of the parking lot and landscaped areas and sometimes the exterior walls of the buildings. b. CAM can refer to all operating expenses. c. CAM can refer to the reimbursement by the tenant to the landlord for all expenses reimbursable under the lease. Sometimes reimbursements have what is called an administrative load. An example would be a 15% addition to total operating expenses, which are then prorated among tenants. The administrative load, also called an administrative and marketingDraft fee, can be a substitute for or an addition to a management fee. 2. The amount of money charged to tenants for their shares of maintaining a center’s common area. The charge that a tenant pays for shared services and facilities such as electricity, security, and maintenance of the parking lots. The area maintained in common by all tenants, such as parking lots and common passages. The area is often defined in the lease and may or may not include all physical areas to be paid for by all tenants. Items charged to common area maintenance may include cleaning services, parking lot sweeping and maintenance, snow removal, security, and upkeep.

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Deferred Maintenance Needed repairs or replacement of items that should have taken place during the course of normal maintenance.

Depreciation A loss in property value from any cause; the difference between the cost of an improvement on the effective date of the appraisal and the market value of the improvement on the same date.

Discounted Cash Flow (DCF) Analysis The procedure in which a discount rate is applied to a set of projected income streams and a reversion. The analyst specifies the quantity, variability, timing, and duration of the income streams and the quantity and timing of the reversion, and discounts each to its present value at a specified yield rate.

Disposition Value The most probable price that a specified interest in real property should bring under the following conditions:

1. Consummation of a sale within a future exposure time specified by the client. 2. The property is subjected to market conditions prevailing as of the date of valuation. 3. Both the buyer and seller are acting prudently and knowledgeably. 4. The seller is under compulsion to sell. 5. The buyer is typically motivated. 6. Both parties are acting in what they consider to be their best interests. 7. An adequate marketing effort will be made during the exposure time specified by the client. 8. Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable thereto. 9. 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. This definition can also be modifiedDraft to provide for valuation with specified financing terms. Effective Date of Appraisal The date on which the analyses, opinions, and advice in an appraisal, review, or consulting service apply.

Entrepreneurial Profit 1. A market‐derived figure that represents the amount an entrepreneur receives for his or her contribution to a project and risk; the difference between the total cost of a property (cost of development) and its market value (property value after completion), which represents the entrepreneur’s compensation for the risk and expertise associated with development. An entrepreneur is motivated by the prospect of future value enhancement (i.e., the

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entrepreneurial incentive). An entrepreneur who successfully creates value through new development, expansion, renovation, or an innovative change of use is rewarded by entrepreneurial profit. Entrepreneurs may also fail and suffer losses. 2. In economics, the actual return on successful management practices, often identified with coordination, the fourth factor of production following land, labor, and capital; also called entrepreneurial return or entrepreneurial reward.

Excess Land; Surplus Land Excess Land: Land that is not needed to serve or support the existing improvement. The highest and best use of the excess land may or may not be the same as the highest and best use of the improved parcel. Excess land may have the potential to be sold separately and is valued independently.

Surplus Land: Land that is not currently needed to support the existing improvement but cannot be separated from the property and sold off. Surplus land does not have an independent highest and best use and may or may not contribute value to the improved parcel.

Exposure Time 1. The time a property remains on the market. 2. The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market.

Fee Simple Estate Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.

Floor Area Ratio (FAR) The relationship between the above‐ground floor area of a building, as described by the building code, and the area of the plot on which it stands; in planning and zoning, often expressed as a decimal, e.g., a ratio of 2.0 indicates that the permissible floor area of a building is twice the total land area.

Gross Building Area (GBA) Total floor area of a building, excludingDraft unenclosed areas, measured from the exterior of the walls of the above‐grade area. This includes mezzanines and basements if and when typically included in the region.

Gross Leasable Area (GLA) Total floor area designed for the occupancy and exclusive use of tenants, including basements and mezzanines; measured from the center of joint partitioning to outside wall surfaces.

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

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feasibility, and maximum productivity. Alternatively, the probable use of land or improved property – specific with respect to the user and timing of the use – that is adequately supported and results in the highest present value.

Insurable Value Value used by insurance companies as the basis for property insurance. Insurable value is not intended to be market value. (Source: Integra Realty Resources)

Lease A contract in which rights to use and occupy land or structures are transferred by the owner to another for a specified period of time in return for a specified rent.

Leased Fee Interest A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord‐tenant relationship (i.e, a lease).

Leasehold Interest The tenant’s possessory interest created by a lease.

Lease Type Full Service Lease or Gross Lease: A lease in which the landlord receives stipulated rent and is obligated to pay all of the property’s operating and fixed expenses.

Full Service + Tenant Electric Lease or Gross + Tenant Electric Lease: A lease in which the tenant pays electric charges for itst space bu in other respects is a full service or gross lease as defined above. Tenant electric is often abbreviated as “TE”. (Source: Integra Realty Resources)

Modified Gross Lease: A lease in which the landlord receives stipulated rent and is obligated to pay some, but not all, of the property’s operating and fixed expenses. Since assignment of expenses varies among modified gross leases, expense responsibility must always be specified. In some markets, a modified gross lease may be called a double net lease, net net lease, partial net lease, or semi‐gross lease.

Net Lease: A general term for a lease in which the tenant pays all or most of the operating and fixed expenses of a property. WheneverDraft the term net lease is used, an analyst should identify the specific expense responsibilities of the tenant and owner. (Source: Integra Realty Resources)

Triple Net Lease: A lease in which the tenant assumes all expenses (fixed and variable) of operating a property except that the landlord is responsible for structural maintenance, building reserves, and management. Also called NNN, net net net, or fully net lease.

Absolute Net Lease: A lease in which the tenant pays all expenses including structural maintenance, building reserves, and management; often a long‐term lease to a credit tenant.

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Liquidation Value The most probable price that a specified interest in real property should bring under the following conditions:

1. Consummation of a sale within a short time period. 2. The property is subjected to market conditions prevailing as of the date of valuation. 3. Both the buyer and seller are acting prudently and knowledgeably. 4. The seller is under extreme compulsion to sell. 5. The buyer is typically motivated. 6. Both parties are acting in what they consider to be their best interests. 7. A normal marketing effort is not possible due to the brief exposure time. 8. Payment will be made in cash in U.S. dollars, or in terms of financial arrangements comparable thereto. 9. 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.

This definition can also be modified to provide for valuation with specified financing terms.

Marketing Time An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal.

Market Rent The most probable rent that a property should bring in a competitive and open market reflecting all conditions and restrictions of the lease agreement, including permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements.

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

 buyer and seller are typically motivated;  both parties are well informed or well advised, and acting in what they consider their own best interests;  a reasonable time is allowed for exposure in the open market;  payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

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 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: Source: Code of Federal Regulations, Title 12, Chapter I, Part 34.42[g]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472)

Overage Rent The percentage rent paid over and above the guaranteed minimum rent or base rent; calculated as a percentage of sales in excess of a specified breakpoint sales volume.

Percentage Rent Rental income received in accordance with the terms of a percentage lease; typically derived from retail store and restaurant tenants and based on a certain percentage of their gross sales.

Prospective Opinion of Value A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that have not yet achieved sellout or a stabilized level of long‐term occupancy.

Replacement Cost The estimated cost to construct, at current prices as of the effective appraisal date, a substitute for the building being appraised, using modern materials and current standards, design and layout.

Reproduction Cost The estimated cost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same materials, construction standards, design, layout, and quality of workmanship and embodying all the deficiencies, superadequacies, and obsolescence of the subject building.

Shopping Center Classifications Convenience Center: provides for the sale of personal services and convenience goods similar to those of a neighborhood center. It contains a minimum of three stores, with a total GLA of up to 30,000 square feet. Instead of being anchoredDraft by a supermarket, a convenience center is usually anchored by some other type of personal/convenience service such as a minimarket. (Source: Dollars & Cents of Shopping Centers, Urban Land Institute, Washington, DC, 2008[Dollars & Cents])

Neighborhood Center: provides for the sale of convenience goods (foods, drugs, and sundries) and personal services (laundry and dry cleaning, barbering, shoe repairing, etc.) for the yday‐to‐da living needs of the immediate neighborhood. It is built around a supermarket as the principal tenant and typically contains a GLA of about 60,000 square feet. In practice, it may range in size from 30,000 to 100,000 square feet. (Source: Dollars & Cents)

Super Community / Community Center: any center larger than a neighborhood center but with neither a traditional department store nor the trade area of a regional shopping center. This includes

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traditional community shopping centers, power centers, town centers, lifestyle centers, and outlet/off‐price centers that meet these criteria. The traditional community shopping center contains many of the convenience tenants that are found in the neighborhood shopping centers, while offering a wider range of apparel, hardware, home furnishings, home improvement, and specialty stores. In addition, the center also may include banking and professional services, personal services, and recreational facilities. Many centers are built around a discount department store, super drugstore, mixed apparel (women/men/children) store, as well as a supermarket. (Source: Dollars & Cents)

Power Center: type of community center that contains at rleast fou category‐specific anchors of 20,000 or more square feet. These anchors typically emphasize hard goods such as consumer electronics, sporting goods, office supplies, home furnishings, home improvement goods, bulk foods, drugs, health and beauty aids, toys, and personal computer hardware/software. They tend to be narrowly focused but deeply merchandised “category killers” together with the more broadly merchandised, price‐oriented warehouse club and discount department stores. Anchors in power centers typically occupy 85 percent or more of the total GLA. (Source: Dollars & Cents)

Stabilized Income Income at that point in time when abnormalities in supply and demand or any additional transitory conditions cease to exist and the existing conditions are those expected to continue over the economic life of the property; projected income that is subject to change, but has been adjusted to reflect an equivalent, stable annual income.

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Addendum D Financials and Property Information Draft

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Crawford Inspection Services C.C.B. # 76914 www.crawfordinspections.com

Portland Area Salem Area PO Box 665 5434 River Rd. N; #192 West Linn, OR 97068 Keizer, OR 97303 Ph: (503) 650-6957 Ph: (503) 362-5809

Cover BUILDING INSPECTION REPORT

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6729 NE Killingsworth Portland, OR

THIS REPORT IS INTENDED ONLY FOR THE USE OF THE PERSON PURCHASING THE HOME INSPECTION SERVICES. NO OTHER PERSON, INCLUDING A PURCHASER OF THE INSPECTED PROPERTY WHO DID NOT PURCHASE THE HOME INSPECTION SERVICES, MAY RELY UPON ANY REPRESENTATION IN THE REPORT. (The above statement is required by the Oregon Construction Contractor’s Board as of January 1, 2010)

Customer Property Location Culley Boulevard Alliance 6729 NE Killingsworth Portland, OR

Customer This is our report of a visual inspection of the readily accessible areas of this building, in accordance with the terms, conditions and limitations in the INSPECTION AGREEMENT, which is a part of this report and incorporated herein. Please read the report in its entirety. Call us for an explanation of any aspect of this report, written or printed, which you do not fully understand. Also, call us if you want a more thorough inspection, and can obtain the sellers permission. This report is prepared for the sole, confidential and exclusive use of the named Customer; no other person should rely on, or take action based on, its contents. No other use is permitted, and Crawford Inspection Service shall not be responsible for any such use unless authorized in writing and signed by both the customer and the President of Crawford Inspection Service.

Inspection Date: 1/2/2015 Weather Conditions: Sunny Outside Temperature: 34 degrees Oregon Certified Home Inspector: Matt Fellman (OCHI # 414) Inspector Signature:

Comments in This Report

Unless otherwise noted under “Comments” at the bottom of each section, all building systems and components within the scope of the inspection, as outlined in the INSPECTION AGREEMENT, were found to function as intended, allowing for normal wear and tear, and did not, in the opinion of the inspector, negatively affect the habitability of the dwelling.

Notice RegardingDraft Repairs and Reinspections

Crawford Inspection Services (CIS) highly recommends that all repairs, replacements, and corrective action, taken as a result of findings in this report, be performed only by qualified, licensed contractors who provide written warranties for their work. It should be assumed that any substantial repairs or modifications performed by the homeowner or other unqualified third parties, will probably lack required permits, be of questionable quality, and will not be warranted against defects in materials and workmanship after the close of the sale.

Reinspections, when performed, are for the sole purpose of verifying that some repairs or corrective action have taken place since the original inspection. CIS assumes no responsibility for the workmanship of any contractor or other third party who performed the repairs. Customer may be able to obtain such a guaranty or warranty from the contractor or other third party who performed the repairs and/or from the seller, but not from CIS.

2

Table of Contents

STRUCTURAL ...... 4

BASEMENT ...... 5

CRAWL SPACE ...... 5

HEATING AND COOLING ...... 6

PLUMBING ...... 7

KITCHEN AND APPLIANCES ...... 9

ELECTRICAL ...... 10

ATTIC ...... 12

ROOFING AND ROOF COMPONENTS ...... 13

EXTERIOR ...... 16

SITE/GROUNDS ...... 18

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3 The inspection on the property was cut short due to access to the building being denied after approximately 2.5 hours onsite. The following report contains the findings discovered during that time. There may be additional problems that were not discovered due to a lack of time on the property.

Structural STRUCTURAL

Foundation: Floor Framing: Floors: Roof Structure: Concrete Post & Beam T & G Decking Rafters Masonry Joists Plywood/OSB Board Trusses Wood N/A Concrete Other: Not Visible Comments:

No large scale structural problems were observed throughout the visible/accessible portions of the building. The visible components suggest the building is largely wood framed with some hollow core masonry and some poured concrete separation walls (generally, between the various businesses and at the ends of the building). The roof structure consists of bow trusses covered by a tongue and groove wood roof deck. The perimeter foundation consists of poured concrete with a small area of basement at the west end of the building. The remaining floor surface area inside is concrete slab on grade.

The Mexican restaurant at the SW corner of the property appears to be an old carport or shed roof that was enclosed to create a makeshift interior space to house a business. No access to the inside of this area was available it’s unknown how complete or correct the conversion was. Additional information may be available from the local building department.

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4 Basement BASEMENT Full Partial

Floor Drain: Ceiling: Dampness: Present (Not tested) Open None Noted None Found Finished See Comments Comments:

Crawl Space CRAWL SPACE (N/A)

Full Partial

Access: Joist Clearance: Insulation: Readily Accessible Adequate In-Floor Not Readily Accessible Inadequate, See Comments Foundation Walls Partial Access None Vapor Barrier: Ventilation: Dampness: Present Adequate None Noted Missing Inadequate, See Comments Excessive, See comments Partially Missing/Misplaced

Comments: Draft

5 Heating/Cooling HEATING AND COOLING

Heating/Cooling: Type: Gas Pack X 6 Fuel: Gas/Electric Varies – Capacity: approximately 200,000 BTUs Each 2 @ 19 Years Estimated Age: 3 @ 12 Years 1 @ 9 Years Filter: See Comments Distribution: Ductwork Exhaust: Appears Intact Operation: See Comments Comments:

The heating and A/C throughout the building is provided by 6 gas-pack rooftop units. A gas pack is a combination gas furnace and A/C unit that is attached to a set of ducting to route air throughout the building. The individual units were not tested due to a lack of access throughout the interiors as well as malfunctioning or locked thermostats (several were flashing “change batteries”). The average life expectancy of a gas-pack unit is roughly 15-20 years when properly serviced and maintained. There is no indication of any recent service or maintenance and many of the units have missing service covers and other items. Further evaluation for testing and service from a qualified HVAC contractor is recommended to determine the functionality and overall condition of the equipment.

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Gas Pack – Example Gas Pack – Missing Service Covers

6 Plumbing PLUMBING

Supply Pipes: Drain, Waste & Vent Pipes: Sump Pump(s): N/A Copper Copper In Basement Plastic Plastic In Crawl Space Galvanized Galvanized Operated Cast Iron Not Operated

Comments:

The individual plumbing fixtures and other equipment throughout the building were not tested due to a lack of time and access (many of the showers and sinks were full of stored items). Most of the visible supply pipes throughout the building are a copper material and most of the drain/waste/vent pipes are a plastic material. This likely indicates an installation date of anytime between 1975 and 2000. Pipes of this type should have a service life of at least 50 years.

No evaluation of the sprinkler system was performed as part of this inspection. There are typically requirements for testing and maintenance of these systems. Further information should be available from the local housing department and/or local fire department.

Draft There is a poorly installed water heater in the attic space roughly above the NW corner of the building. The appliance is missing earthquake strapping, a drain/overflow pan and the covers over the electrical connections. Further contractor evaluation and repair is recommended.

7

Because of a lack of complete access throughout the building all of the water heaters could not be evaluated and tested. One gas water heater in the laundry room at the SW corner of the building is in a confined space with a lack of combustion air which is a safety hazard. An evaluation of all water heaters is recommended. If a basic safety check of all gas equipment on-site is desired, NW Natural Gas will typically perform this service free of charge.

Draft

8 Kitchen KITCHEN AND APPLIANCES

There is extensive restaurant type equipment throughout the various areas of the building. No evaluation of any gas ranges, regular ovens, pizza ovens, deep fryers, grills, exhaust hoods, fire suppression systems, swamp coolers, walk-in refrigeration/freezers or any similar equipment was performed as part of this inspection.

The vent from the clothes dryer located in the laundry room at the SW corner of the building is detached and vents directly into the room. Correction/repair is recommended to prevent excessive moisture and related problems.

Draft

9 Electrical ELECTRICAL

Service: Service Entry: 4 @ 225A 3 Phase Overhead 120V/240V/208V Underground (Estimated)

Comments:

The electrical service enters the building along the west side and is routed to a large bank of meters and panels in the “bunker” basement. Power is then distributed throughout the building to circuit breaker panels in the various businesses. There is a large variation in the age of the equipment. Most of the panels and items in the basement meter bank area appear to be at least 50 years old while many of the panels in the various businesses are much newer. The changes/upgrades/updating necessary can’t be determined until there are clear plans for how the building will be used. Overall, the service to the building appears adequate for the current usage, some of which is very high (restaurants, etc.). Because of some ongoing usage of the building and a lack of time, the individual panel covers were not removed and the interior components of the panels weren’t inspected.

Electric Service Entry – West Side of Building Electric Meter and Shut-Off Bank

Draft A random sampling of electrical outlets was performed throughout the building with no wiring problems being noted. There are numerous outlets that are loose from the wall or have missing cover plates. These conditions should be corrected for safety.

10

There is an electrical panel in the attic space roughly above the SW corner of the building. This panel is missing its cover and has live wires hanging out of it. Overall, this panel was likely installed by a non-qualified person and/or was not properly inspected by the local building department. Further evaluation is recommended.

There is an electrical panel installed in the laundry room at the SW corner that lack adequate working space. The washing machine or the panel should be moved so the electrical equipment can be accessed quickly in an emergency or worked on when necessary. Additionally, this setup likely indicates some non-qualified or unpermitted work with either the panel installation and/or the laundry equipment installation. Further contractor evaluation is recommended.

Draft

11 Attic ATTIC

Access: Attic viewed: Attic Insulation: Scuttle Hole From Access Point(s) Loose Fill Batting Pull-Down Attic Entered Stairs Installed In: Door Floor, Rafters

Ave. Depth 6 inches Approx. R-Value: 19 Comments:

Draft

12 Roofing ROOFING AND ROOF COMPONENTS

Roof Covering: Roof viewed: Gutters/Drainage: Sloped Portions: Laminated From the Ground Shingles From the Gutter Line Scuppers & Rain Drains Flat Areas: Single-Ply Torch Down From Roof Surface Estimated Age: 12 Years

Comments:

According to the date stamps on the some of the metal flashings the roof coverings were installed in 2003. The overall condition of the shingles and flat roof materials fall in line with this date as well. The shingle roof materials should have a service of around 20-25 years and the flat roof materials around 15-20 years.

Shingle Roof – General Condition

Torch-DownDraft Roof – General Condition

13 While the roof coverings as a whole are in serviceable condition there are numerous instances of leakage at the various penetrations in the roof. The past usage of this building is such that there are a large number of mechanical items penetrating the roof (fans, gas appliance vents, etc.). Additionally, by the design of the building, there are numerous seams and junctions throughout the roof(s) that are all prone to leakage. There are a number of 5 gallon buckets of roofing tar/sealant on the roof indicating past/ongoing sealing and repairs of leakage. Ongoing repairs to stop leakage should be planned for. Further roofing contractor assessment is recommended for preventative maintenance. Additionally, the extent of the damage caused by the past/ongoing leaks at the various penetrations and seams cannot be determined without removed materials from inside (ceiling tiles, insulation, etc.). Further contractor evaluation/investigation is recommended.

Draft

14 Roof leakage examples below penetrations and seams:

There are leftover shingles and other various debris scattered throughout the roof areas. These items prevent the intended flow of water, can puncture the roof surface and can lead to leakage. Removing any non-essential items is recommended.

There is moss throughout the areas of the roof with lower sun exposure (east/north sides). This should be regularly Drafttreated/removed to prevent damage to the shingles and to allow water to run from the surface unimpeded.

15 Exterior EXTERIOR

Siding /Trim Materials: Corrugated Metal Panels 12”X12” Ceramic Tiles

Comments:

The metal cap/flashings at the top of the parapet walls are rusted and failing throughout. This has allowed long term water seepage and damage to occur in numerous places. The full extent of the damage cannot be determined without removing some materials to perform necessary repairs. Further contractor evaluation and repair is recommended. This should include the repair/replacement of the parapet caps and the discovery/removal/replacement of the related materials inside.

Draft

16 The ceramic tile siding materials are in an advanced stage of failure throughout the entire exterior. Numerous large sections of tile have fallen while many other areas are on the verge of falling. As the tiles fall, openings are left for water intrusion and the instances of damage are accelerated. This is a particular problem during freeze/thaw cycles when the water seeps in, expands and breaks off more tiles. In the areas where the metal panels are present (front of the building) it is suspected that deteriorated tile exists underneath. Given the current condition of the exterior and missing materials it is virtually certain that some areas of concealed/hidden damage exist. The exact location and extent of such damage cannot be determined without removing materials for removal/replacement. Further contractor evaluation is recommended.

Draft

17 Site/Grounds SITE/GROUNDS

Sidewalk: Parking Lot: Attached Deck: N/A Patio: Grading/Drainage: Concrete Concrete Wood Concrete Appears Adequate Asphalt Asphalt Composite Brick See Comments Brick Brick Other: Stone Gravel Gravel Other: Other: Other: Comments: The signs around the property are in overall poor condition with numerous instances of vehicle impact damage and general deterioration being found.

The concrete city sidewalk around the entire property is typically the responsibility of the property owner to maintain and repair. The concrete is in overall good condition with only a few minor offsets present. These are tripping hazards and should be ground down or the segments of concrete re-poured. The city of Portland Draftdoes inspections of sidewalks and this repair may become a requirement at some point.

18

Many section of concrete curbing between the sidewalk and grass are damaged. It’s unknown if the city requires this be maintained. If so, this could become a requirement at some point.

Draft

19

Draft Retail Market Potential

6723 NE Killingsworth St, Portland, Oregon, 97218 Drive Time: 5 minute radius Latitude: 45.56273 Longitude: -122.59319

Demographic Summary 2014 2019 Population 42,419 43,876 Population 18+ 33,564 34,766 Households 16,922 17,542 Median Household Income $52,915 $62,410

Expected Number of Percent of Product/Consumer Behavior Adults/HHs Adults/HHs MPI Apparel (Adults) Bought any men's clothing in last 12 months 15,556 46.3% 96 Bought any women's clothing in last 12 months 15,243 45.4% 101 Bought clothing for child <13 years in last 6 months 8,916 26.6% 95 Bought any shoes in last 12 months 17,925 53.4% 98 Bought costume jewelry in last 12 months 6,691 19.9% 100 Bought any fine jewelry in last 12 months 6,123 18.2% 94 Bought a watch in last 12 months 3,705 11.0% 96

Automobiles (Households) HH owns/leases any vehicle 14,486 85.6% 101 HH bought/leased new vehicle last 12 mo 1,399 8.3% 96

Automotive Aftermarket (Adults) Bought gasoline in last 6 months 28,495 84.9% 100 Bought/changed motor oil in last 12 months 15,994 47.7% 96 Had tune-up in last 12 months 10,550 31.4% 104

Beverages (Adults) Drank bottled water/seltzer in last 6 months 22,082 65.8% 100 Drank regular cola in last 6 months 15,303 45.6% 100 Drank beer/ale in last 6 months 15,211 45.3% 107

Cameras (Adults) Own digital point & shoot camera 11,208 33.4% 103 Own digital single-lens reflex (SLR) camera 3,449 10.3% 120 Bought any camera in last 12 months 2,338 7.0% 96 Bought memory card for camera in last 12 months 1,885 5.6% 98 Printed digital photos in last 12 months 893 2.7% 79

Cell Phones (Adults/Housholds) Bought cell phone in last 12 months 12,857 38.3% 105 Have a smartphone 17,847 53.2% 109 Have an iPhone 6,618 19.7% 106 Number of cell phones in household: 1 5,867 34.7% 108 Number of cell phones in household: 2Draft 6,422 38.0% 103 Number of cell phones in household: 3+ 3,586 21.2% 84 HH has cell phone only (no landline telephone) 7,371 43.6% 115

Computers (Households) HH owns a computer 13,367 79.0% 103 HH owns desktop computer 7,847 46.4% 95 HH owns laptop/notebook 9,173 54.2% 106 Spent <$500 on most recent home computer 2,353 13.9% 99 Spent $500-$999 on most recent home computer 3,514 20.8% 103 Spent $1,000-$1,499 on most recent home computer 1,999 11.8% 118 Spent $1,500-$1,999 on most recent home computer 878 5.2% 113 Spent $2,000+ on most recent home computer 792 4.7% 121 Data Note: An MPI (Market Potential Index) measures the relative likelihood of the adults or households in the specified trade area to exhibit certain consumer behavior or purchasing patterns compared to the U.S. An MPI of 100 represents the U.S. average. Source: These data are based upon national propensities to use various products and services, applied to local demographic composition. Usage data were collected by GfK MRI in a nationally representative survey of U.S. households. Esri forecasts for 2014 and 2019. January 07, 2015

©2014 Esri Page 1 of 8 Retail Market Potential

6723 NE Killingsworth St, Portland, Oregon, Drive Time: 5 minute radius Latitude: 45.56273 Longitude: -122.59319 Expected Number of Percent of Product/Consumer Behavior Adults/HHs Adults/HHs MPI Convenience Stores (Adults) Shopped at convenience store in last 6 mos 20,857 62.1% 103 Bought brewed coffee at convenience store in last 30 5,446 16.2% 106 Bought cigarettes at convenience store in last 30 days 4,797 14.3% 109 Bought gas at convenience store in last 30 days 10,858 32.4% 97 Spent at convenience store in last 30 days: <$20 2,921 8.7% 106 Spent at convenience store in last 30 days: $20-$39 3,317 9.9% 108 Spent at convenience store in last 30 days: $40-$50 2,484 7.4% 97 Spent at convenience store in last 30 days: $51-$99 1,629 4.9% 107 Spent at convenience store in last 30 days: $100+ 7,366 21.9% 95

Entertainment (Adults) Attended a movie in last 6 months 21,763 64.8% 108 Went to live theater in last 12 months 4,932 14.7% 117 Went to a bar/night club in last 12 months 7,037 21.0% 123 Dined out in last 12 months 15,780 47.0% 104 Gambled at a casino in last 12 months 5,133 15.3% 104 Visited a theme park in last 12 months 6,281 18.7% 104 Viewed movie (video-on-demand) in last 30 days 6,151 18.3% 117 Viewed TV show (video-on-demand) in last 30 days 5,364 16.0% 131 Watched any pay-per-view TV in last 12 months 4,613 13.7% 105 Downloaded a movie over the Internet in last 30 days 3,055 9.1% 138 Downloaded any individual song in last 6 months 7,777 23.2% 113 Watched a movie online in the last 30 days 6,196 18.5% 136 Watched a TV program online in last 30 days 6,729 20.0% 149 Played a video/electronic game (console) in last 12 4,553 13.6% 119 Played a video/electronic game (portable) in last 12 1,858 5.5% 124

Financial (Adults) Have home mortgage (1st) 10,489 31.3% 99 Used ATM/cash machine in last 12 months 17,487 52.1% 107 Own any stock 2,536 7.6% 97 Own U.S. savings bond 2,013 6.0% 104 Own shares in mutual fund (stock) 2,599 7.7% 103 Own shares in mutual fund (bonds) 1,554 4.6% 94 Have interest checking account 9,180 27.4% 95 Have non-interest checking account 10,212 30.4% 108 Have savings account 18,870 56.2% 105 Have 401K retirement savings plan 5,049 15.0% 102 Own/used any credit/debit card in last 12 monthsDraft25,256 75.2% 102 Avg monthly credit card expenditures: <$111 3,979 11.9% 100 Avg monthly credit card expenditures: $111-$225 2,116 6.3% 97 Avg monthly credit card expenditures: $226-$450 2,079 6.2% 98 Avg monthly credit card expenditures: $451-$700 2,179 6.5% 119 Avg monthly credit card expenditures: $701-$1,000 1,524 4.5% 105 Avg monthly credit card expenditures: $1,001+ 2,957 8.8% 96 Did banking online in last 12 months 13,454 40.1% 114 Did banking on mobile device in last 12 months 4,230 12.6% 122 Paid bills online in last 12 months 16,241 48.4% 116

Data Note: An MPI (Market Potential Index) measures the relative likelihood of the adults or households in the specified trade area to exhibit certain consumer behavior or purchasing patterns compared to the U.S. An MPI of 100 represents the U.S. average. Source: These data are based upon national propensities to use various products and services, applied to local demographic composition. Usage data were collected by GfK MRI in a nationally representative survey of U.S. households. Esri forecasts for 2014 and 2019. January 07, 2015

©2014 Esri Page 2 of 8 Retail Market Potential

6723 NE Killingsworth St, Portland, Oregon, Drive Time: 5 minute radius Latitude: 45.56273 Longitude: -122.59319 Expected Number of Percent of Product/Consumer Behavior Adults/HHs Adults/HHs MPI Grocery (Adults) Used beef (fresh/frozen) in last 6 months 23,197 69.1% 97 Used bread in last 6 months 31,838 94.9% 100 Used chicken (fresh or frozen) in last 6 mos 23,231 69.2% 97 Used turkey (fresh or frozen) in last 6 mos 5,293 15.8% 86 Used fish/seafood (fresh or frozen) in last 6 months 17,975 53.6% 96 Used fresh fruit/vegetables in last 6 months 28,872 86.0% 99 Used fresh milk in last 6 months 29,873 89.0% 99 Used organic food in last 6 months 8,057 24.0% 122

Health (Adults) Exercise at home 2+ times per week 9,204 27.4% 96 Exercise at club 2+ times per week 4,764 14.2% 110 Visited a doctor in last 12 months 24,689 73.6% 97 Used vitamin/dietary supplement in last 6 months 17,354 51.7% 97

Home (Households) Any home improvement in last 12 months 4,395 26.0% 94 Used housekeeper/maid/professional HH cleaning 2,178 12.9% 98 Purchased low ticket HH furnishings in last 12 months 2,813 16.6% 107 Purchased big ticket HH furnishings in last 12 months 3,852 22.8% 108 Purchased bedding/bath goods in last 12 months 9,099 53.8% 101 Purchased cooking/serving product in last 12 months 4,144 24.5% 101 Bought any small kitchen appliance in last 12 months 3,668 21.7% 97 Bought any large kitchen appliance in last 12 months 2,103 12.4% 97

Insurance (Adults/Households) Currently carry life insurance 13,488 40.2% 93 Carry medical/hospital/accident insurance 21,446 63.9% 99 Carry homeowner insurance 14,230 42.4% 89 Carry renter's insurance 3,375 10.1% 136 Have auto insurance: 1 vehicle in household covered 6,270 37.1% 118 Have auto insurance: 2 vehicles in household covered 4,698 27.8% 99 Have auto insurance: 3+ vehicles in household covered 2,665 15.7% 72

Pets (Households) Household owns any pet 8,762 51.8% 97 Household owns any cat 4,157 24.6% 108 Household owns any dog 5 693 33 6% 85

Psychographics (Adults) Buying American is important to me 13,019 38.8% 90 Usually buy items on credit rather than wait 3,630 10.8% 95 Usually buy based on quality - not price 6,162 18.4% 102 Price is usually more important than brand name 9,493 28.3% 103 Usually use coupons for brands I buy often Draft6,180 18.4% 98 Am interested in how to help the environment 5,862 17.5% 104 Usually pay more for environ safe product 4,749 14.1% 112 Usually value green products over convenience 4,208 12.5% 123 Likely to buy a brand that supports a charity 11,393 33.9% 99

Reading (Adults) Bought digital book in last 12 months 4,123 12.3% 110 Bought hardcover book in last 12 months 8,693 25.9% 115 Bought paperback book in last 12 month 12,229 36.4% 108 Read any daily newspaper (paper version) 9,341 27.8% 99 Read any digital newspaper in last 30 days 12,367 36.8% 118 Read any magazine (paper/electronic version) in last 6 31,019 92.4% 102

Data Note: An MPI (Market Potential Index) measures the relative likelihood of the adults or households in the specified trade area to exhibit certain consumer behavior or purchasing patterns compared to the U.S. An MPI of 100 represents the U.S. average. Source: These data are based upon national propensities to use various products and services, applied to local demographic composition. Usage data were collected by GfK MRI in a nationally representative survey of U.S. households. Esri forecasts for 2014 and 2019. January 07, 2015

©2014 Esri Page 3 of 8 Retail Market Potential

6723 NE Killingsworth St, Portland, Oregon, Drive Time: 5 minute radius Latitude: 45.56273 Longitude: -122.59319 Expected Number of Percent of Product/Consumer Behavior Adults/HHs Adults/HHs MPI Restaurants (Adults) Went to family restaurant/steak house in last 6 months 25,497 76.0% 100 Went to family restaurant/steak house: 4+ times a 9,571 28.5% 99 Went to fast food/drive-in restaurant in last 6 months 30,257 90.1% 100 Went to fast food/drive-in restaurant 9+ times/mo 13,362 39.8% 98 Fast food/drive-in last 6 months: eat in 12,154 36.2% 100 Fast food/drive-in last 6 months: home delivery 3,198 9.5% 121 Fast food/drive-in last 6 months: take-out/drive-thru 15,671 46.7% 100 Fast food/drive-in last 6 months: take-out/walk-in 7,357 21.9% 112

Television & Electronics (Adults/Households) Own any e-reader/tablet 7,830 23.3% 110 Own any portable MP3 player 12,469 37.1% 111 HH owns 1 TV 4,057 24.0% 119 HH owns 2 TVs 4,193 24.8% 94 HH owns 3 TVs 3,620 21.4% 100 HH owns 4+ TVs 2,804 16.6% 84 HH subscribes to cable TV 9,408 55.6% 109 HH subscribes to fiber optic 1,188 7.0% 106 HH has satellite dish 2,950 17.4% 68 HH owns DVD/Blu-ray player 10,773 63.7% 103 HH owns camcorder 2,531 15.0% 96 HH owns portable GPS navigation device 4,178 24.7% 90 HH purchased video game system in last 12 mos 1,464 8.7% 94 HH owns Internet video device for TV 902 5.3% 122

Travel (Adults) Domestic travel in last 12 months 17,417 51.9% 103 Took 3+ domestic non-business trips in last 12 months 4,206 12.5% 101 Spent on domestic vacations in last 12 months: 3,840 11.4% 102 Spent on domestic vacations in last 12 months: $1,000- 1,974 5.9% 98 Spent on domestic vacations in last 12 months: $1,500- 1,364 4.1% 115 Spent on domestic vacations in last 12 months: $2,000- 1,360 4.1% 106 Spent on domestic vacations in last 12 months: 1,645 4.9% 90 Domestic travel in the 12 months: used general travel 2,673 8.0% 113 Foreign travel in last 3 years 8,529 25.4% 107 Took 3+ foreign trips by plane in last 3 years 1,810 5.4% 123 Spent on foreign vacations in last 12 months: <$1,000 1,511 4.5% 107 Spent on foreign vacations in last 12 months: $1,000- 1,106 3.3% 108 Spent on foreign vacations in last 12 months: $3,000+ 1,852 5.5% 112 Foreign travel in last 3 years: used general travelDraft 2,025 6.0% 110 Nights spent in hotel/motel in last 12 mo: any 14,428 43.0% 104 Took cruise of more than one day in last 3 years 2,397 7.1% 82 Member of any frequent flyer program 6,351 18.9% 114 Member of any hotel rewards program 4,442 13.2% 94

Data Note: An MPI (Market Potential Index) measures the relative likelihood of the adults or households in the specified trade area to exhibit certain consumer behavior or purchasing patterns compared to the U.S. An MPI of 100 represents the U.S. average. Source: These data are based upon national propensities to use various products and services, applied to local demographic composition. Usage data were collected by GfK MRI in a nationally representative survey of U.S. households. Esri forecasts for 2014 and 2019. Restaurant Market Potential

6723 NE Killingsworth St, Portland, Oregon, 97218 97218 Drive Time: 5 minute radius Latitude: 45.56273 Longitude: -122.59319

Demographic Summary 2014 2019 Population 42,419 43,876 Population 18+ 33,564 34,766 Households 16,922 17,542 Median Household Income $52,915 $62,410 Expected Number Product/Consumer Behavior Adults Percent MPI Went to family restaurant/steak house in last 6 mo 25,497 76.0% 100 Went to family restaurant/steak house 4+ times/mo 9,571 28.5% 99 Spent at family rest/steak hse last 6 mo: <$31 2,477 7.4% 102 Spent at family rest/steak hse last 6 mo: $31-50 3,038 9.1% 106 Spent at family rest/steak hse last 6 mo: $51-100 5,159 15.4% 102 Spent at family rest/steak hse last 6 mo: $101-200 3,894 11.6% 95 Spent at family rest/steak hse last 6 mo: $201-300 1,824 5.4% 92 Spent at family rest/steak hse last 6 mo: $301+ 2,380 7.1% 96 Family restaurant/steak house last 6 mo: breakfast 4,533 13.5% 108 Family restaurant/steak house last 6 mo: lunch 6,362 19.0% 98 Family restaurant/steak house last 6 mo: dinner 16,374 48.8% 102 Family restaurant/steak house last 6 mo: snack 668 2.0% 113 Family restaurant/steak house last 6 mo: weekday 11,301 33.7% 106 Family restaurant/steak house last 6 mo: weekend 13,981 41.7% 98 Fam rest/steak hse/6 mo: Applebee`s 8,319 24.8% 100 Fam rest/steak hse/6 mo: Bob Evans Farms 1,003 3.0% 80 Fam rest/steak hse/6 mo: Buffalo Wild Wings 2,897 8.6% 113 Fam rest/steak hse/6 mo: California Pizza Kitchen 1,305 3.9% 120 Fam rest/steak hse/6 mo: Carrabba`s Italian Grill 928 2.8% 90 Fam rest/steak hse/6 mo: The Cheesecake Factory 2,601 7.7% 114 Fam rest/steak hse/6 mo: Chili`s Grill & Bar 4,022 12.0% 98 Fam rest/steak hse/6 mo: CiCi`s Pizza 1,311 3.9% 88 Fam rest/steak hse/6 mo: Cracker Barrel 2,655 7.9% 81 Fam rest/steak hse/6 mo: Denny`s 3,395 10.1% 107 Fam rest/steak hse/6 mo: Golden Corral 2,390 7.1% 83 Fam rest/steak hse/6 mo: IHOP 3,873 11.5% 99 Fam rest/steak hse/6 mo: Logan`s Roadhouse 1,010 3.0% 84 Fam rest/steak hse/6 mo: LongHorn Steakhouse 1,317 3.9% 91 Fam rest/steak hse/6 mo: Old Country Buffet 906 2.7% 128 Fam rest/steak hse/6 mo: Olive Garden 5,918 17.6% 101 Fam rest/steak hse/6 mo: Outback Steakhouse 3,391 10.1% 102 Fam rest/steak hse/6 mo: Red Lobster 3,641 10.8% 86 Fam rest/steak hse/6 mo: Red Robin 2,348 7.0% 117 Fam rest/steak hse/6 mo: Ruby Tuesday 2,237 6.7% 97 Fam rest/steak hse/6 mo: Texas RoadhouseDraft 2,522 7.5% 102 Fam rest/steak hse/6 mo: T.G.I. Friday`s 2,679 8.0% 100 Fam rest/steak hse/6 mo: Waffle House 1,477 4.4% 81 Went to fast food/drive-in restaurant in last 6 mo 30,257 90.1% 100 Went to fast food/drive-in restaurant 9+ times/mo 13,362 39.8% 98 Spent at fast food/drive-in last 6 mo: <$11 1,593 4.7% 109 Spent at fast food/drive-in last 6 mo: $11-$20 2,376 7.1% 92 Spent at fast food/drive-in last 6 mo: $21-$40 3,967 11.8% 98 Spent at fast food/drive-in last 6 mo: $41-$50 2,647 7.9% 104 Spent at fast food/drive-in last 6 mo: $51-$100 5,555 16.6% 100 Spent at fast food/drive-in last 6 mo: $101-$200 4,130 12.3% 103 Spent at fast food/drive-in last 6 mo: $201+ 4,015 12.0% 98

Data Note: An MPI (Market Potential Index) measures the relative likelihood of the adults in the specified trade area to exhibit certain consumer behavior or purchasing patterns compared to the U.S. An MPI of 100 represents the U.S. average. Source: These data are based upon national propensities to use various products and services, applied to local demographic composition. Usage data were collected by GfK MRI in a nationally representative survey of U.S. households. Esri forecasts for 2014 and 2019. January 07, 2015

©2014 Esri Page 1 of 6 Restaurant Market Potential

6723 NE Killingsworth St, Portland, Oregon, 97218 Drive Time: 5 minute radius Latitude: 45.56273 Longitude: -122.59319 Expected Number of Product/Consumer Behavior Adults Percent MPI Fast food/drive-in last 6 mo: eat in 12,154 36.2% 100 Fast food/drive-in last 6 mo: home delivery 3,198 9.5% 121 Fast food/drive-in last 6 mo: take-out/drive-thru 15,671 46.7% 100 Fast food/drive-in last 6 mo: take-out/walk-in 7,357 21.9% 112 Fast food/drive-in last 6 mo: breakfast 11,145 33.2% 100 Fast food/drive-in last 6 mo: lunch 17,012 50.7% 101 Fast food/drive-in last 6 mo: dinner 15,402 45.9% 104 Fast food/drive-in last 6 mo: snack 4,916 14.6% 117 Fast food/drive-in last 6 mo: weekday 20,026 59.7% 101 Fast food/drive-in last 6 mo: weekend 16,001 47.7% 104 Fast food/drive-in last 6 mo: A & W 1,275 3.8% 116 Fast food/drive-in last 6 mo: Arby`s 5,148 15.3% 91 Fast food/drive-in last 6 mo: Baskin-Robbins 1,310 3.9% 112 Fast food/drive-in last 6 mo: Boston Market 1,139 3.4% 99 Fast food/drive-in last 6 mo: Burger King 10,807 32.2% 102 Fast food/drive-in last 6 mo: Captain D`s 972 2.9% 84 Fast food/drive-in last 6 mo: Carl`s Jr. 2,273 6.8% 116 Fast food/drive-in last 6 mo: Checkers 861 2.6% 88 Fast food/drive-in last 6 mo: Chick-fil-A 5,312 15.8% 96 Fast food/drive-in last 6 mo: Chipotle Mex. Grill 3,822 11.4% 122 Fast food/drive-in last 6 mo: Chuck E. Cheese`s 1,442 4.3% 120 Fast food/drive-in last 6 mo: Church`s Fr. Chicken 747 2.2% 62 Fast food/drive-in last 6 mo: Cold Stone Creamery 1,418 4.2% 125 Fast food/drive-in last 6 mo: Dairy Queen 5,016 14.9% 107 Fast food/drive-in last 6 mo: Del Taco 1,319 3.9% 112 Fast food/drive-in last 6 mo: Domino`s Pizza 4,495 13.4% 114 Fast food/drive-in last 6 mo: Dunkin` Donuts 4,118 12.3% 109 Fast food/drive-in last 6 mo: Hardee`s 1,402 4.2% 69 Fast food/drive-in last 6 mo: Jack in the Box 3,246 9.7% 113 Fast food/drive-in last 6 mo: KFC 7,069 21.1% 91 Fast food/drive-in last 6 mo: Krispy Kreme 1,296 3.9% 92 Fast food/drive-in last 6 mo: Little Caesars 3,529 10.5% 96 Fast food/drive-in last 6 mo: Long John Silver`s 1,376 4.1% 73 Fast food/drive-in last 6 mo: McDonald`s 18,174 54.1% 97 Fast food/drive-in last 6 mo: Panera Bread 3,664 10.9% 104 Fast food/drive-in last 6 mo: Papa John`s 3,508 10.5% 111 Fast food/drive-in last 6 mo: Papa Murphy`s 1,998 6.0% 143 Fast food/drive-in last 6 mo: Pizza Hut 6,522 19.4% 97 Fast food/drive-in last 6 mo: Popeyes Chicken 2,477 7.4% 95 Fast food/drive-in last 6 mo: Quiznos 1,581 4.7% 114 Fast food/drive-in last 6 mo: Sonic Drive-In Draft3,363 10.0% 97 Fast food/drive-in last 6 mo: Starbucks 5,758 17.2% 117 Fast food/drive-in last 6 mo: Steak `n Shake 1,259 3.8% 78 Fast food/drive-in last 6 mo: Subway 11,142 33.2% 99 Fast food/drive-in last 6 mo: Taco Bell 11,133 33.2% 105 Fast food/drive-in last 6 mo: Wendy`s 10,368 30.9% 108 Fast food/drive-in last 6 mo: Whataburger 1,271 3.8% 100 Fast food/drive-in last 6 mo: White Castle 1,234 3.7% 110

Data Note: An MPI (Market Potential Index) measures the relative likelihood of the adults in the specified trade area to exhibit certain consumer behavior or purchasing patterns compared to the U.S. An MPI of 100 represents the U.S. average. Source: These data are based upon national propensities to use various products and services, applied to local demographic composition. Usage data were collected by GfK MRI in a nationally representative survey of U.S. households. Esri forecasts for 2014 and 2019. January 07, 2015

©2014 Esri Page 2 of 6 Restaurant Market Potential

6723 NE Killingsworth St, Portland, Oregon, 97218 Drive Time: 5 minute radius Latitude: 45.56273 Longitude: -122.59319 Went to fine dining restaurant last month 4,413 13.1% 113 Went to fine dining restaurant 3+ times last month 1,237 3.7% 113 Spent at fine dining rest in last 6 mo: <$51 766 2.3% 114 Spent at fine dining rest in last 6 mo: $51-$100 1,405 4.2% 112 Spent at fine dining rest in last 6 mo: $101-$200 1,388 4.1% 114 Spent at fine dining rest in last 6 mo: $201+ 1,734 5.2% 124

Data Note: An MPI (Market Potential Index) measures the relative likelihood of the adults in the specified trade area to exhibit certain consumer behavior or purchasing patterns compared to the U.S. An MPI of 100 represents the U.S. average. Source: These data are based upon national propensities to use various products and services, applied to local demographic composition. Usage data were collected by GfK MRI in a nationally representative survey of U.S. households. Esri forecasts for 2014 and 2019.

Draft Business Locations

6723 NE Killingsworth St, Portland Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190

2010 Residential Population: 175,374 2014 Total Sales $15,150,997,136. 2014 Residential Population: 179,814 2014 Daytime Business Population 92,622. 2019 Residential Population: 187,729 Daytime Business/Residential 0.52 : Annual Population Growth 2014 - 2019 0.87% Total Number of Businesses: 19,100.

Code Distance From Business Name Franchise Site in Miles Employees Sales 80110516 HEALTH DEPT- PRIMARY CARE 0.02 SW 9. $0. 6736 Ne Killingsworth St # 100 Portland, OR 97218 83220601 BALTAZAR F ORTIZ COMMUNITY CENTER 0.02 SW 2. $88,000. 6736 Ne Killingsworth St Portland, OR 97218 99992222 DONA MARIA TIENDA 0.02 SW 0. $0. 6736 Ne Killingsworth St Portland, OR 97218 78410000 VIDEO SUPER STORE, LTD 0.03 NE 3. $140,000. 6723 Ne Killingsworth St Portland, OR 97218 99992222 FAR FLUNG LTD 0.03 NE 0. $0. 6723 Ne Killingsworth St Portland, OR 97218 58120000 TABLE, THE 0.03 NE 12. $560,000. 6815 Ne Killingsworth St Portland, OR 97218 73899999 SUGAR SHACK 0.03 NE 3. $170,000. 6729 Ne Killingsworth St Portland, OR 97218 65130000 VILLA CLARA VISTA APTS 0.04 SW 7. $385,000. 6706 Ne Killingsworth St Portland, OR 97218 55110000 HK AUTO SALE 0.04 NW 0. $0. 5555 Ne Cully Blvd Portland, OR 97218 99992222 PEREZ PUC DORA 0.04 SE 0. $0. 6840 Ne Klngswrt St # 609 Portland, OR 97218 89990000 MARIA JANITORIAL SERVICES LLC 0.04 SE 1. $50,000. 6840 Ne Klngswrt St # 609 Draft Portland, OR 97218 58120112 SARAS TAMALES LLC 0.05 SE 0. $0. 6840 Ne Killingsworth St # 607 Portland, OR 97218 76220300 BROTHERS INDUSTRIES INC. 0.05 SW 5. $400,000. 5410 Ne Cully Blvd Portland, OR 97218 54110000 BROTHERS MARKET & DELI 0.07 SW 1. $110,000. 5411 Ne Cully Blvd Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 1 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 17710000 STN CONCRETE 0.08 SW 3. $170,000. 5300 Ne Cully Blvd APT 76 Portland, OR 97218 73890000 LEOLA'S ENTERPRISE 0.08 SW 2. $110,000. 5300 Ne Cully Blvd Portland, OR 97218 99992222 SURVIVAL OF THE FINEST 0.08 SW 0. $0. 5300 Ne Cully Blvd APT 86 Portland, OR 97218 72310000 TONDALAYERA DESIGNERS SALON 0.09 SW 1. $60,000. 5401 Ne Cully Blvd Portland, OR 97218 82110206 COMMUNITY TRANSITIONAL SCHOOL 0.10 NW 12. $780,000. 6601 Ne Killingsworth St Portland, OR 97218 73499906 PORLAND GUTTER AND WINDOW CLEANING 0.11 NE 2. $58,000. 7041 Ne Klngswrt St # 72 Portland, OR 97218 73490104 PEREZ JANITORIAL SERVICES LLC 0.11 SW 2. $46,000. 6518 Ne Killingsworth St Portland, OR 97218 56219902 EXPLICIT CLOTHING 0.11 SW 2. $110,000. 6518 Ne Killingsworth St Portland, OR 97218 72170000 WILLIAM ENQUIST 0.11 SW 3. $130,000. 6750 Ne Emerson St Portland, OR 97218 39990000 K.C. PLITT AND ASSOCIATES 0.11 NW 1. $48,000. 6640 Ne Portland Hwy Portland, OR 97218 99992222 MICHAEL D PARZIALE 0.12 SE 0. $0. 6824 Ne Emerson St Portland, OR 97218 58120000 KIM S WAREHOUSE DISTRIBUT 0.12 NW 0. $0. 6737 Ne Portland Hwy Portland, OR 97218 55210000 ONE TWO THREE 0.12 NW 3. $370,000. 6700 Ne Portland Hwy Draft Portland, OR 97218 73890000 UXUL FAMILY LLC 0.12 SW 2. $99,000. 5335 Ne Cully Blvd Portland, OR 97218 99992222 ALI SHEIKH 0.12 SW 0. $0. 5335 Ne Cully Blvd # 308 Portland, OR 97218 99992222 PAT JACINTO 0.12 SW 0. $0. 5335 Ne Cully Blvd # 310 Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 2 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 75380000 SIGMA-AUTO LLC 0.12 SE 2. $120,000. 7001 Ne Emerson St Portland, OR 97218 76990000 RINO'S AUTOMOTIVE REPAIR 0.12 SE 1. $62,000. 6850 Ne Emerson St Portland, OR 97218 75320200 M & C AUTO PAINTING 0.12 SE 1. $71,000. 6850 Ne Emerson St Portland, OR 97218 34480000 MOBILE MINI, INC. 0.13 NE 8. $1,648,687. 5940 Ne Cully Blvd Portland, OR 97218 99992222 MY MYSTERY DATE 0.14 SE 0. $0. 6910 Ne Emerson St Portland, OR 97218 99992222 BYTON LLC 0.14 SE 0. $0. 6910 Ne Emerson St Portland, OR 97218 99992222 TEACH ME IOS 0.14 SW 0. $0. 6606 Ne Emerson St Portland, OR 97218 24990400 WEST COAST FRAMES LLC 0.14 NW 14. $1,400,000. 5620 Ne 65th Ave Portland, OR 97218 73899999 SPLASH OF COLOR 0.15 SW 1. $61,000. 6517 Ne Emerson St Portland, OR 97218 58130000 JOES TAP SERVICE 0.15 SE 7. $230,000. 6907 Ne Roselawn St Portland, OR 97218 67990000 RAVEN ACQUISITIONS INC. 0.15 SE 2. $150,000. 7120 Ne Killingsworth St # 76 Portland, OR 97218 65150000 CEDAR SHADE MOBILE HOME PARK 0.15 SE 2. $110,000. 7120 Ne Killingsworth St Portland, OR 97218 99992222 GBOSS, LLC 0.16 NW 0. $0. 6550 Ne Portland Hwy Draft Portland, OR 97218 78190401 PACIFIC GRIP AND LIGHTING INC 0.16 NW 5. $830,000. 6550 Ne Portland Hwy Portland, OR 97218 75210000 ROSE CITY PARKING LLC 0.17 SW 3. $100,000. 6732 Ne Roselawn St Portland, OR 97218 99992222 CALL CENTER 0.17 SW 0. $0. 6473 Ne Killingsworth CT Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 3 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 99992222 LIFE'S SOURCE AND ASSOCIATES LLC 0.17 SW 0. $0. 6650 Ne Roselawn St Portland, OR 97218 76940201 ALL ELECTRIC MOTOR REPAIR 0.18 SW 1. $72,000. 6630 Ne Roselawn St Portland, OR 97218 59450101 DEPARTMENT OF ART 0.18 NW 1. $47,000. 6500 Ne Portland Hwy Portland, OR 97218 72990201 ROSE CITY MASSAGE THERAPY 0.19 SE 1. $75,000. 7046 Ne Emerson St Portland, OR 97218 75139902 U HAUL 75138001 0.19 NE 2. $120,000. 5541 Ne 72nd Ave Portland, OR 97218 67990000 PIERSON SPINELLI MARKETING TEAM LLC 0.19 NE 2. $120,000. 5541 Ne 72nd Ave Unit 29 Portland, OR 97218 65150000 TOA PROPERTY MANAGEMENT 0.19 NE 2. $130,000. 5541 Ne 72nd Ave Unit 1 Portland, OR 97218 50840305 WOODTECH EQUIPMENT 0.19 SE 1. $500,000. 7125 Ne Emerson St Portland, OR 97218 54110201 TACO BELL 58128436 0.19 SE 10. $0. 7144 Ne Killingsworth St Portland, OR 97218 99992222 CAROLINA DAVE MOBILE METAL SALVAGE 0.19 NW 0. $0. 6415 Ne Klngswrt St Fir2 Portland, OR 97218 73899999 MISSION TREK INTERNATIONAL 0.20 SE 2. $99,000. 7112 Ne Emerson St Portland, OR 97218 73890300 DUCK PROMOTIONS LLC 0.20 NW 2. $93,000. 6415 Ne Killingsworth St Portland, OR 97218 50640100 VENAVIES ELECTRICAL REWIRING & 0.20 NW 2. $130,000. 6415 Ne Killingsworth St Draft Portland, OR 97218 99992222 RAUL ANTONIO COTO 0.20 NW 0. $0. 6415 Ne Killingsworth St Portland, OR 97218 56219902 LECOLAS AROUND WAY GIRL FASHI 0.21 NE 2. $110,000. 5611 Ne 72nd Ave Portland, OR 97218 87439902 RC PROMOTIONS LLC 0.21 NE 2. $120,000. 5701 Ne 72nd Ave Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 4 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 41190103 PORTLAND PREMIER LIMOUSINE LLC 0.21 NE 3. $97,000. 5701 Ne 72nd Ave Portland, OR 97218 73899999 YOUR WEEKEND DJ 0.21 SW 2. $99,000. 6555 Ne Sumner St Portland, OR 97218 83220610 BROTHER'S & SISTER'S KEEPERS 0.21 SE 2. $110,000. 5303 Ne 72nd Ave Portland, OR 97218 07830000 SKY BLUE TREE CARE 0.21 SE 3. $140,000. 6808 Ne Sumner St Portland, OR 97218 50510000 THE STANDARD STEEL COMPANIES 0.21 NE 0. $6,050,000. 6000 Ne Cully Blvd Portland, OR 97218 65120000 AM PROPERTIES LLC 0.21 NW 3. $230,000. 6446 Ne Portland Hwy Portland, OR 97218 15210000 COMPLETE INC 0.21 SW 4. $600,000. 6642 Ne Sumner St Portland, OR 97218 73891800 MOLLY BOYD DESIGNS 0.22 SE 1. $54,000. 7115 Ne Roselawn St Portland, OR 97218 99992222 ANDREW E SORENSEN 0.22 SW 0. $0. 6421 Ne Roselawn St Portland, OR 97218 76290300 DON RABIE APPLIANCE & REFRIG. 0.22 SE 1. $71,000. 6910 Ne Sumner St Portland, OR 97218 36990000 PORTLAND BROTHERS ELECTRIC 0.22 NW 2. $160,000. 6444 Ne Simpson St Portland, OR 97218 79910000 KB FITNESS 0.22 SW 3. $110,000. 6356 Ne Emerson St Portland, OR 97218 59470103 AFFORDABLE OUTLET 0.23 SE 1. $55,000. 5249 Ne 72nd Ave Draft Portland, OR 97218 17940000 C & J TRUCKING & CONSTRUCTION 0.23 SE 2. $180,000. 5035 Ne 70th Ave Portland, OR 97218 58120000 ETHELKAY'S PERSONAL CHEF 0.23 SE 0. $0. 7116 Ne Roselawn St Portland, OR 97218 73490101 KARENS KLEANING 0.23 SE 1. $44,000. 6811 Ne Alberta St Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 5 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 86610000 NORTHWEST BURMESE CHRISTIAN 0.24 SW 2. $120,000. 6707 Ne Alberta St Portland, OR 97218 73890200 GREATEST COMMANDMENTS LLC 0.24 SE 2. $120,000. 6823 Ne Alberta St Portland, OR 97218 17310000 EYE ELECTRIC 0.24 SW 1. $70,000. 5026 Ne 66th Ave Portland, OR 97218 29510201 PORTER W. YETT COMPANY 0.24 NE 35. $6,200,000. 5949 Ne Cully Blvd Portland, OR 97218 50510216 SCAFCO STEEL STUD MANUFACTURING 0.24 NE 2. $190,000. 5959 Ne Cully Blvd Portland, OR 97218 99992222 PYCO 0.24 NE 0. $0. 5949 Ne Cully Blvd Portland, OR 97218 67990000 WYNN INVESTMENTS LLC 0.24 NE 5. $270,000. 5949 Ne Cully Blvd Portland, OR 97218 73590000 OREGON COLLECTIONS 0.24 SE 15. $1,511,943. 7262 Ne Killingsworth St Portland, OR 97218 99992222 MMH TIME CORP 0.24 NW 0. $0. 6420 Ne Portland Hwy Portland, OR 97218 58130000 CRACKER BOX TAVERN 0.24 NW 3. $180,000. 6420 Ne Portland Hwy Portland, OR 97218 99992222 FLOWERS BY STACIE 0.24 SE 0. $0. 5274 Ne 72nd Ave Portland, OR 97218 42120000 JOHN C RUDEEN TRUCKING LLC 0.24 SE 2. $140,000. 7265 Ne Klngswrt St # 503 Portland, OR 97218 76991806 A-1 LAWNMOWER SHOP 0.24 SW 1. $63,000. 5115 Ne Cully Blvd Draft Portland, OR 97218 72999905 EDWARD FOIX 0.25 SW 1. $10,000. 6518 Ne Sumner St Portland, OR 97218 99992222 JIM EHLINGER 0.25 SW 0. $0. 6305 Ne Emerson St Portland, OR 97218 47890000 BARCAZ TRANSPORTATION INC. 0.25 SE 4. $240,000. 5325 Ne 73rd Ave Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 6 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 99992222 LB BROKER LLC 0.25 SE 0. $0. 5325 Ne 73rd Ave Portland, OR 97218 07820000 ADMIRABLE LANDSCAPES LLC 0.26 SE 6. $280,000. 7005 Ne Alberta St Portland, OR 97218 07829903 URBAN ECOSYSTEM 0.26 SE 2. $62,000. 5131 Ne 72nd Ave Portland, OR 97218 15210101 LYLES REMODELING 0.26 NE 1. $88,000. 7265 Ne Killingsworth St Portland, OR 97218 73899999 ADDITIVE WORKSHOP 0.26 SW 3. $170,000. 6304 Ne Emerson St Portland, OR 97218 99992222 RED SQUIRREL LLC 0.27 SW 0. $0. 6325 Ne Roselawn St Portland, OR 97218 73890000 CASSADY ENTERPRISES, LLC 0.27 SW 2. $120,000. 6722 Ne Alberta St Portland, OR 97218 07830000 TREESCAPES 0.27 SW 2. $62,000. 6722 Ne Alberta St Portland, OR 97218 51490700 MAGPIE'S BAKED GOODS LLC 0.27 SW 5. $450,000. 5110 Ne Cully Blvd Portland, OR 97218 73891800 NJOY DESIGNS 0.28 SE 2. $120,000. 6900 Ne Alberta St Portland, OR 97218 54110000 HANBO CORPORATION 0.28 NW 3. $280,000. 6340 Ne Portland Hwy Portland, OR 97218 54110000 AIRPORT FOOD MART 0.28 NW 3. $250,000. 6340 Ne Portland Hwy Portland, OR 97218 99992222 JUNG DONG LLC 0.28 NW 0. $0. 6340 Ne Portland Hwy Draft Portland, OR 97218 75380100 SM JAPANESE ENGINE 0.28 NW 1. $66,000. 6412 Ne Portland Hwy Portland, OR 97218 82999905 THE MERRY KITCHEN 0.28 SE 5. $200,000. 5202 Ne 72nd Ave Portland, OR 97218 76990902 COLUMBIA BILLIARDS ASSN 0.28 SE 2. $98,000. 4910 Ne 68th Ave Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 7 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 07810200 ELITE CONSTRUCTION AND LANDSCAPING, 0.28 SW 2. $72,000. 6208 Ne Killingsworth St Portland, OR 97218 75380000 SOS AUTOMOTIVE INC 0.28 SW 2. $210,000. 6208 Ne Killingsworth St Portland, OR 97218 99992222 CLEANCYCLE 0.28 SE 0. $0. 5340 Ne 73rd Ave Portland, OR 97218 99992222 FERNANDO B GONZALEZ MR 0.29 SE 0. $0. 5324 Ne 73rd Ave Portland, OR 97218 15210000 MOURE CONSTRUCTION 0.29 SE 1. $95,000. 5225 Ne 73rd Ave Portland, OR 97218 86410200 EAGLES QUEST STUDIO 0.29 SW 3. $140,000. 5044 Ne Cully Blvd Portland, OR 97218 02790000 WORMKING 0.29 SE 1. $100. 5215 Ne 73rd Ave Portland, OR 97218 17999940 ANTHONY LECKINGTON 0.29 SW 3. $170,000. 6540 Ne Alberta St Portland, OR 97218 65310105 HEIDI KAHL 0.30 SE 2. $120,000. 6827 Ne Wygant St Portland, OR 97218 99992222 BARBARA LEIBHAM DBA BRL QUILTING 0.30 SE 0. $0. 7026 Ne Alberta St Portland, OR 97218 75349901 I T R 0.30 NE 45. $3,900,000. 7331 Ne Killingsworth St Portland, OR 97218 17420203 ALLIANCE MECHANICAL INSULATION, LLC 0.30 SE 3. $230,000. 5011 Ne 72nd Ave Portland, OR 97218 15210000 DOUGLASS REED CONSTRUCTION LLC 0.30 SW 2. $150,000. 6252 Ne Roselawn St Draft Portland, OR 97218 73490000 AMERICAN JANITORIAL BUILDING 0.30 SW 4. $250,000. 6223 Ne Roselawn St Portland, OR 97218 73590501 ON THE GO PRODUCTIONS 0.31 SW 2. $275,000. 6611 Ne Wygant St Portland, OR 97218 73899999 COURTNEY IS A SEAHORSE 0.31 SW 1. $57,000. 6307 Ne Sumner St Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 8 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 75380000 MIKE O'HARA SERVICE INC 0.31 SW 3. $340,000. 5020 Ne Cully Blvd Portland, OR 97218 50510216 THE STANDARD STEEL COMPANIES 0.31 NE 0. $12,100,000. 6880 Ne Columbia Blvd Portland, OR 97218 07820000 GOLLEHON'S TREE & LANDSCAPE MAINT 0.31 SW 1. $43,000. 6324 Ne Sumner St Portland, OR 97218 80590000 DANCIU'S ADULT CARE HOME 0.31 SE 0. $0. 5224 Ne 73rd Ave Portland, OR 97218 99992222 PETER J KREBS 0.32 SW 0. $0. 6126 Ne Emerson St Portland, OR 97218 65120000 PENDULUM PROPERTIES LLC 0.32 SE 3. $260,000. 5212 Ne 73rd Ave Portland, OR 97218 57130000 FLOORS BY MATHESON 0.32 SE 2. $180,000. 7116 Ne Alberta St Portland, OR 97218 15210000 HOLM BROTHERS CONSTRUCTION INC 0.32 SE 1. $84,000. 5255 Ne 74th Ave Portland, OR 97218 55319901 A TIRE AND WHEEL 0.32 NE 2. $130,000. 6750 Ne Columbia Blvd Portland, OR 97218 75320000 USA AUTO BODY & SALES, LLC 0.32 NE 2. $120,000. 6750 Ne Columbia Blvd Portland, OR 97218 73110000 RED STAR ADVERTISING INC. 0.32 NE 2. $150,000. 6750 Ne Columbia Blvd 2 Portland, OR 97218 55110000 STEFANS AUTO SALES 0.32 NE 0. $0. 6750 Ne Columbia Blvd Portland, OR 97218 75320401 SERGE'S AUTOBODY 0.32 NE 1. $75,000. 6750 Ne Columbia Blvd Draft Portland, OR 97218 17710000 GILBERT WELTSCH 0.32 NW 1. $90,000. 5625 Ne 62nd Ave Portland, OR 97218 17999912 GRAYBEARDS WOVEN WIRE FENCE CO 0.32 NW 3. $200,000. 5625 Ne 62nd Ave Portland, OR 97218 57360000 JUSTIN PRICE GUITAR STUDIOS 0.33 NW 2. $130,000. 6221 Ne Simpson St APT 1 Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 9 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 50510000 JR DISTRIBUTION AND WHSNG 0.33 NW 4. $347,350. 6722 Ne Columbia Blvd Portland, OR 97218 17519904 C & S INSTALLATION INC 0.33 NW 3. $270,000. 6722 Ne Columbia Blvd Portland, OR 97218 59990103 RELIANCE FIRE AND SAFETY 0.33 NW 2. $170,000. 6722 Ne Columbia Blvd Portland, OR 97218 64110000 COMPLETE INSURANCE SOLUTIONS LLC 0.33 NW 2. $130,000. 6205 Ne Simpson St Portland, OR 97218 73899999 KEYS TO FUTURE PC 0.33 SW 2. $130,000. 6437 Ne Wygant St Portland, OR 97218 99992222 JOSHUA BUEHLER 0.34 SE 0. $0. 5404 Ne 74th Ave Portland, OR 97218 75320000 PROFESSIONAL AUTO BODY & PAINT 0.34 SW 5. $250,000. 6380 Ne Alberta St Portland, OR 97218 99992222 MONICA M MAGGIO 0.34 SW 0. $0. 6616 Ne Wygant St Portland, OR 97218 99992222 CORE HOME FRUIT SERVICES LLC 0.34 SW 0. $0. 6616 Ne Wygant St Portland, OR 97218 65120000 S & R PROPERTIES, LLC 0.34 SE 3. $200,000. 7424 Ne Killingsworth St Portland, OR 97218 51929901 CAROL GREGORY BOOKKEEPING & TAXES, 0.34 SE 4. $250,000. 6832 Ne Wygant St Portland, OR 97218 87480000 JFB5 CONSULTING 0.34 SW 1. $65,000. 6036 Ne Emerson St Portland, OR 97218 99992222 AMERICAN STEAM ESSENTIALS LLC. 0.35 NW 0. $0. 6228 Ne Portland Hwy Draft Portland, OR 97218 50120101 NORTH WEST ASSET SERVICE 0.35 NE 1. $87,000. 7100 Ne Columbia Blvd Portland, OR 97218 75490000 HAGERMAN INC 0.35 NE 2. $130,000. 7100 Ne Columbia Blvd Portland, OR 97218 73891400 COMMERCIAL INDUSTRIAL AUCTIONEERS 0.35 NE 2. $100,000. 7100 Ne Columbia Blvd Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 10 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 17949901 B & B CRANE & EQUIPMENT INC 0.35 NE 15. $2,000,000. 7100 Ne Columbia Blvd Portland, OR 97218 99992222 THE SIDE YARD KITCHEN 0.35 SW 0. $0. 6704 Ne Wygant St Portland, OR 97218 54110202 FRIENDLY FOOD MART 0.35 SW 6. $830,000. 6010 Ne Killingsworth St Portland, OR 97218 73890000 DLG ENTERPRISES LLC 0.35 NW 2. $94,000. 5530 Ne 60th Ave APT 106 Portland, OR 97218 99992222 CLEAR 0.35 NW 0. $0. 5530 Ne 60th Ave APT 901 Portland, OR 97218 76991700 BROTHERS CLEANING 0.35 NW 1. $59,000. 5530 Ne 60th Ave APT 901 Portland, OR 97218 65130000 LOS JARDINES 0.35 NW 2. $150,000. 5530 Ne 60th Ave Portland, OR 97218 50120206 GENERAL EQUIPMENT CO 0.35 NE 12. $500,000. 6767 Ne Columbia Blvd Portland, OR 97218 49539905 CITY RECYCLE 0.35 NW 4. $240,000. 6510 Ne Columbia Blvd B Portland, OR 97218 99992222 NO LIMITS DELIVERY LLC 0.36 NW 0. $0. 6113 Ne Simpson St Portland, OR 97218 89990101 SIAN ALEXANDER ART AND ODDITIES 0.36 SW 1. $48,000. 4707 Ne 68th Ave Portland, OR 97218 42139901 ADVANCE CAR CARRIER CORP 0.36 NE 5. $370,000. 5600 Ne 75th Ave Portland, OR 97218 75320000 VK AUTO BODY 0.36 NE 2. $110,000. 5600 Ne 75th Ave Draft Portland, OR 97218 59990000 USA BODY REPAIR SHOP LLC 0.36 NE 2. $85,000. 5600 Ne 75th Ave Portland, OR 97218 80310000 ANH THU DO CORPORATION 0.36 SE 4. $190,000. 4908 Ne 72nd Ave Portland, OR 97218 72310104 TROUTDALE TOWN NAILS 0.36 SE 2. $78,000. 4908 Ne 72nd Ave Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 11 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 54210200 GARTNER'S COUNTRY MEAT MARKET, INC 0.36 SE 15. $1,800,000. 7450 Ne Killingsworth St Portland, OR 97218 67990000 DIEGO MARES INVESTMENTS LLC 0.36 SW 3. $180,000. 6337 Ne Wygant St Portland, OR 97218 87410000 COLWOOD NATIONAL GOLF COURSE 0.36 NE 1. $966,666. 7313 Ne Columbia Blvd Portland, OR 97218 83220000 PORTLAND COMMUNITY KITCHENS 0.37 SE 2. $110,000. 4630 Ne 68th Ave Portland, OR 97218 99992222 NOBLE EXPRESSIONS L.L.C. 0.37 NW 0. $0. 5736 Ne 60th Ave Portland, OR 97218 73899999 TERRY W MCDONALD 0.37 SW 2. $150,000. 4625 Ne 68th Ave Portland, OR 97218 73899999 VAN SAECHAO 0.38 SW 3. $220,000. 6408 Ne Wygant St Portland, OR 97218 73899999 ROBERT BRANDT CERAMICS 0.38 SW 3. $160,000. 6420 Ne Wygant St Portland, OR 97218 89990000 KATHERINE MADDOCK BARSHAW 0.38 SW 3. $130,000. 5216 Ne 60th Ave Portland, OR 97218 50840605 FORKLIFT SERVICES OF OREGON 0.38 NE 20. $6,779,661. 7001 Ne Columbia Blvd Portland, OR 97218 50840800 WASHINGTON LIFTRUCK INC. 0.38 NE 50. $16,949,152. 7001 Ne Columbia Blvd Portland, OR 97218 50840000 FORKLIFT SERVICES OF OREGON, INC. 0.38 NE 2. $140,000. 7001 Ne Columbia Blvd Portland, OR 97218 83310000 VERDE LANDSCAPE 0.39 NE 12. $1,640,091. 6899 Ne Columbia Blvd A Draft Portland, OR 97218 65120000 LAWRENCE B. STONE PROPERTIES 6, LLC 0.39 NE 2. $150,000. 6899 Ne Columbia Blvd B Portland, OR 97218 50320201 SCAFCO CORPORATION 0.39 NE 6. $2,697,478. 6899 Ne Columbia Blvd B Portland, OR 97218 99992222 CATCH THE BUZZ 0.39 NW 0. $0. 5941 Ne Killingsworth St Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 12 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 79299906 JUGGLEMANIA 0.39 SW 2. $75,000. 6647 Ne Going St Portland, OR 97218 86610000 PORTLAND HOMAGE ALLIANCE CHURCH 0.39 NW 1. $87,000. 5641 Ne 60th Ave Portland, OR 97218 17990000 CLASSIC BOAT RESTORATION 0.39 SE 3. $190,000. 6915 Ne Going St Portland, OR 97218 76920000 PRO FUSION 0.39 SE 1. $69,000. 7510 Ne Killingsworth St Portland, OR 97218 50840505 SOURCE NORTH AMERICA CORPORATION 0.39 SE 0. $0. 7510 Ne Killingsworth St Portland, OR 97218 35370211 MIGHTY LIFT INC. 0.39 NW 14. $1,500,000. 6600 Ne Columbia Blvd Portland, OR 97218 07810200 BUSY BEE LANDSCAPE 0.39 SW 2. $81,000. 4626 Ne 66th Ave Portland, OR 97218 73890000 R & E GOLEMAN ENTERPRISES 0.39 SE 2. $120,000. 6929 Ne Going St Portland, OR 97218 83220000 NORTHEAST EMERGENCY FD PROGRAM 0.39 SE 2. $399,999. 4800 Ne 72nd Ave Portland, OR 97218 86610118 LUTHER MEMORIAL LUTHERAN CHURCH INC 0.39 SE 2. $110,000. 4800 Ne 72nd Ave Portland, OR 97218 99992222 SPENCER S EIDE 0.39 SW 0. $0. 5315 Ne 60th Ave Portland, OR 97218 99992222 MCCOY 0.39 SW 0. $0. 4615 Ne 68th Ave Portland, OR 97218 92210402 142ND SECURITY FORCES SQUADRON 0.40 SW 99. $0. 6801 Ne Cornfort Rd Bldg 130 Draft Portland, OR 97218 75389902 FORD 55118009 0.40 SW 65. $6,800,000. 6221 Nrthast Clumbia Blvd Portland, OR 97218 34410000 EQI LLC 0.40 SW 2. $170,000. 24023 Ne Shea Ln Portland, OR 97218 42129903 RIVER CITY RUSH DELIVERY INC 0.40 SW 12. $500,000. 7620 Ne Killiswrth St 2 Ste 201 Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 13 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 89990305 WORD PITCHERS 0.40 SW 1. $48,000. 460 Sandy Blvs Ste 1 Portland, OR 97218 65120000 CWOR AIRPORT BC 7, L.L.C. 0.40 SW 5. $380,000. Airport Bc 7028 7040 Portland, OR 97218 75320404 BIG BODY AUTOMOTIVE COLLISION, LLC 0.40 SW 1. $20,000. 4906 Ne 62nd Ave Portland, OR 97218 87420300 SPRITE MARKETING LLC 0.40 SW 2. $150,000. 6523 Ne Going St Portland, OR 97218 55219904 OREGON TRUCK CENTER INC 0.41 NW 12. $2,300,000. 6505 Ne Columbia Blvd Portland, OR 97218 50850000 ASSOCIATED HOSE PRODUCTS INC 0.41 NW 2. $170,000. 6326 Ne Columbia Blvd Portland, OR 97218 73890000 PICKENS ENTERPRISES RESUME 0.41 NW 2. $94,000. 5926 Ne Killingsworth St Portland, OR 97218 99992222 ITALIAN MARKET LLC 0.41 NW 0. $0. 5930 Ne 60th Ave Portland, OR 97218 73490000 COMMERCIAL CLEANING & DOMESTIC 0.41 NW 2. $52,000. 6220 Ne 66th Ave Portland, OR 97218 99992222 ARMANDO PRECIADO 0.41 NW 0. $0. 6220 Ne 66th Ave Portland, OR 97218 73899999 M J BROOKS INC 0.41 NW 2. $100,000. 5940 Ne Simpson St Portland, OR 97218 17110403 NEIL KELLY CO., INC. 0.42 NW 0. $0. 6125 Ne Portland Hwy Portland, OR 97218 86110000 BRAZZLE ENTERPRISE 0.42 NW 2. $130,000. 5640 Ne 59th Ave Draft Portland, OR 97218 50120403 SOLUTION MOTORCYCLE CLUB 0.42 SW 2. $23,882. 4642 Ne 64th Ave Portland, OR 97218 16119901 BURNS AIR INC 0.42 SW 10. $780,000. 6509 Ne Going St Portland, OR 97218 99992222 SHANE C MCCOY 0.42 SW 0. $0. 6415 Ne Going St Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 14 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 42129909 JRS HAULING & CLEANUP 0.42 SW 2. $120,000. 6314 Ne Wygant St Portland, OR 97218 58120203 HUONG QUE 0.42 SW 0. $0. 5135 Ne 60th Ave Portland, OR 97218 15210000 ROCCO CONSTRUCTION 0.42 SW 2. $180,000. 4579 Ne 68th Ave Portland, OR 97218 80990000 WHOLESELF WELLNESS LLC 0.42 SW 5. $240,000. 6718 Ne Going St Portland, OR 97218 50840605 LANDMARK EQUIPMENT 0.43 NE 13. $2,800,000. 7625 Ne Killingsworth St Portland, OR 97218 41510000 FIRST STUDENT, INC. 0.43 NW 225. $21,373,380. 6755 Ne Columbia Blvd Portland, OR 97218 99992222 VIRTUALMO, LLC 0.43 SE 0. $0. 7131 Ne Going St Portland, OR 97218 17520000 DAVID C BOUYER FLOORING 0.43 NW 2. $110,000. 6117 Ne Portland Hwy Portland, OR 97218 49530201 DE YOUNG SANITATION SERVICE 0.44 SW 1. $100,000. 5902 Ne Emerson St Portland, OR 97218 17119901 KNOXCO 0.44 NW 6. $740,000. 6034 Ne 60th Ave Portland, OR 97218 51990000 DANDELION DISTRIBUTION, LLC 0.44 SW 2. $150,000. 6652 Ne Going St Portland, OR 97218 73899999 THE LIBERATED KITCHEN LLC 0.44 SW 2. $97,000. 6652 Ne Going St Portland, OR 97218 15210000 BAEZ CONSTRUCTION LLC 0.44 SW 1. $100,000. 4815 Ne 62nd Ave Draft Portland, OR 97218 99992222 D I F INC 0.44 SE 0. $0. 7620 Ne Killingsworth St # 101 Portland, OR 97218 67990000 TABCO INVESTMENTS, LLC 0.44 SE 2. $130,000. 7620 Ne Killingsworth St Portland, OR 97218 67990000 BT INVESTMENTS LLC 0.44 SE 3. $240,000. 7620 Ne Killingsworth St Portland, OR 97218

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 15 of 16 Business Locations

6723 NE Killingsworth St, Portland, Prepared by Esri Drive Times: 5, 10 minute radii Latitude: 45.562730 Longitude: -122.593190 Code Distance From Business Name Franchise Site in Miles Employees Sales 65120000 KELT PROPERTIES SOUTH LLC 0.44 SE 3. $270,000. 7620 Ne Killingsworth St Portland, OR 97218 87110000 WILKINSON ENGINEERING, LLC 0.44 SW 5. $310,000. 6624 Ne Going St Portland, OR 97218 73530000 SUNBELT RENTALS, INC. 0.44 SE 30. $3,023,886. 7626 Ne Killingsworth St Portland, OR 97218 80990000 COURAGE MEDICAL LLC 0.44 SW 2. $97,000. 5847 Ne Emerson St Portland, OR 97218 73899999 DONALD E & HARRIET J BLAS 0.44 SW 2. $130,000. 5847 Ne Emerson St Portland, OR 97218 48990000 EMERGENCE COMMUNICATIONS LLC 0.44 SW 2. $93,000. 6724 Ne Going St Portland, OR 97218 59999913 ISLAND DAYDREAM SHAVE ICE, LLC 0.45 NW 2. $96,000. 5525 Ne 59th Ave Portland, OR 97218 73899999 DO, HAI VAN 0.45 SE 3. $230,000. 4629 Ne 73rd Ave Portland, OR 97218 72310000 CODERS, DWIGHT HAIR FOR YOU 0.45 SW 1. $40,000. 459 Ne 68th Ave Portland, OR 97213 73899999 JASON CARR 0.45 SW 2. $120,000. 4559 Ne 68th Ave Portland, OR 97218 99992222 JEREMY KAPLAN MUSIC 0.45 SE 0. $0. 7024 Ne Going St Portland, OR 97218 72990201 SACRED GROUND MASSAGE 0.45 SW 2. $77,000. 5848 Ne Emerson St Portland, OR 97218 Draft

Data Note: Businesses are listed based on their proximity to the study area location. A maximum of 250 records can be displayed on one report. Source: Copyright 2014 Dun & Bradstreet, Inc. All rights reserved. Esri Total Residential Population forecasts for 2014.

January 07, 2015

©2014 Esri Page 16 of 16 Addenda

Addendum E Comparable Data Draft

Cully Boulevard Plaza Land Sale Profile

Location & Property Identification Property Name: Fred Meyer Fuel Station Site

Sub‐Property Type: Commercial, Retail Pad Site Address: NE. Glisan St. City/State/Zip: Wood Village, OR 97060 County: Multnomah

Market Orientation: Suburban

Lat./Long.: 45.528355/‐122.427472 IRR Event ID ( 746310 )

MSA: Portland‐Vancouver‐Beaverto Sale Information n, OR‐WA Metropolitan Statistical Area Sale Price: $867,880 Legal/Tax/Parcel ID: R489395; TL 813 1N3E34B Eff. R.E. Sale Price: $867,880 Acres(Usable/Gross): 1.00/1.00 Sale Date: 02/21/2014 Land‐SF(Usable/Gross): 43,394/43,394 Sale Status: Closed Usable/Gross Ratio: 1.00 $/Acre(Gross): $871,191 Shape: Square $/Land SF(Gross): $20.00 Topography: Level $/Acre(Usable): $871,191 Corner Lot: No $/Land SF(Usable): $20.00 Zoning Code: TC Grantor/Seller: Wood Village Sub II Garp LLC Zoning Desc.: Town Center Source of Land Info.: Public Records Grantee/Buyer: Fred Meyer Stores Inc. Property Rights: Fee Simple Comments Financing: Cash to seller Document Type: Deed Fred Meyer purchased for a fuel station; a Fred Meyer store is Draftlocated to the immediate north across the parking lot. Eastern Recording No.: 14‐016350 portion of this site has a parking lot on it that has been used Verified By: Mrs. Linda D. Keele by Buffalo Wild Wings restaurant for overflow parking. Verification Date: 3/13/14 However, the site will be fully improved for the Fred Meyer Verification Source: fuel station and there is no encumbrance. The price reflects Alex MacLean, CRA market price for the size and location. Verification Type: Confirmed‐Buyer Broker

Operating Data and Key Indicators Interior vacant site is located on the north side of NE Glisan St. OAR(Cap. rate)Actual: 0.00% one lot west of NE Wood Village Blvd. within the Wood Village Town Center. The center is anchored by Fred Meyer and Lowes. Zoning is Town Center for this all usable site. Improvement and Site Data

Fred Meyer Fuel Station Site Land Sale Profile

Comments (Cont'd)

Draft

Fred Meyer Fuel Station Site Land Sale Profile

Location & Property Identification Property Name: Truck Dealership Site + Comm'l Bldg. (EXd)

Sub‐Property Type: Commercial, Retail Address: 431‐435 NE. Rosa Parks Way / 6500 NE. Martin Luther King Jr. Blvd.

City/State/Zip: Portland, OR 97211 County: Multnomah

Market Orientation: Urban

Lat./Long.: 45.569973/‐122.660835 IRR Event ID ( 672101 )

MSA: Portland‐Vancouver‐Beaverto Sale Information n, OR‐WA Metropolitan Statistical Area Sale Price: $550,000 Legal/Tax/Parcel ID: TLs 15600 & 17300 Eff. R.E. Sale Price: $550,000 1N1E14BC; R214329 & Sale Date: 05/24/2013 R214330 Sale Status: Closed Acres(Usable/Gross): 0.57/0.57 $/Acre(Gross): $964,912 Land‐SF(Usable/Gross): 25,009/25,009 $/Land SF(Gross): $21.99 Usable/Gross Ratio: 1.00 $/Acre(Usable): $964,912 Shape: Rectangular $/Land SF(Usable): $21.99 Topography: Level Grantor/Seller: John & Shirley Wentland Corner Lot: Yes Grantee/Buyer: ACME LLC Zoning Code: EXdh; 3:1 % of Interest Conveyed: 100.00 Zoning Desc.: Central Employment Exposure Time: 19.00 (months) Utilities Desc.: All available to the sites Terms of Sale: Draft Cash to seller Source of Land Info.: Public Records Document Type: Deed Recording No.: 2013‐070790 Comments Verified By: Mrs. Linda D. Keele Verification Date: The property was priced for land value assuming it would be 7/16/13 redeveloped. This buyer purchased to use the land for his Verification Source: Bill Jackson, Meadows Group truck dealership retail sales. He will retain the buildings since (971‐219‐3344) the commercial duplex provides a modest income. The duplex Verification Type: Confirmed‐Seller Broker is 1,380 SF, wood frame. There is also a concrete block warehouse of 4,450 SF that may be used for the dealership. However, the broker said that most of the value is in the land. Improvement and Site Data

Truck Dealership Site + Comm'l Bldg. (EXd) Land Sale Profile

Comments (Cont'd) Two parcels are located on the north side of NE Rosa Parks Way between MLK Jr. Blvd. and Grand Ave. Zoning is EXdh. TL 15600 is the largest parcel on the north side of Rosa Parks between Grand and MLK (431‐435 NE Rosa Parks Way); it contains 20,527 SF. TL 17300 (6500 NE MLK) contains land area of 4,482 SF. There is an older commercial duplex with a bakery on one side and a coffee house on the other side on the largest lot. There is also an older warehouse on the small lot. Zoning is EXdh. FAR is 3:1 with a maximum building height of 65'. Site coverage of 100% is allowed. The property is not within a plan district but is located in the Interstate Corridor urban renewal district.

Draft

Truck Dealership Site + Comm'l Bldg. (EXd) Land Sale Profile

Location & Property Identification Property Name: NE Holman @ Airport Way EG2 Site

Sub‐Property Type: Commercial, Industrial Address: NE. Holman St. @ NE. Airport Way

City/State/Zip: Portland, OR 97220 County: Multnomah

Market Orientation: Urban

Lat./Long.: 45.567889/‐122.544331 IRR Event ID ( 622600 )

Usable/Gross Ratio: 1.00 Sale Information Shape: Irregular Topography: Sale Price: $1,525,000 Level Corner Lot: Eff. R.E. Sale Price: $1,525,000 Yes Zoning Code: Sale Date: 12/28/2012 EG2hx Zoning Desc.: Sale Status: Closed General Employment 2 Source of Land Info.: $/Acre(Gross): $556,569 Public Records $/Land SF(Gross): $12.78 $/Acre(Usable): $556,569 Comments $/Land SF(Usable): $12.78 No brokers involved. Call buyer. Costar says that buyer Grantor/Seller: JPI Holman LLC approached the seller. Seller claims it is zoned retail but City of Portland says General Employment 2. Grantee/Buyer: Pacific NW Properties LP Property Rights: Fee Simple Vacant site is located on NE Holman Rd. with visibility from Airport Way. Zoning is General Employment 2 with h (Aircraft % of Interest Conveyed: 100.00 Landing) and x (PDX Noise Impact) overlay zones. Site is zoned Document Type: Deed IS or Industrial Sanctuary. Site may be next to the Airport DraftBusiness Center. Recording No.: 12‐168559 Verification Source: deed Verification Type: Not Verified

Improvement and Site Data MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan Statistical Area Legal/Tax/Parcel ID: R639738; TL 901 1N2E15DB Acres(Usable/Gross): 2.74/2.74 Land‐SF(Usable/Gross): 119,370/119,370

NE Holman @ Airport Way EG2 Site Land Sale Profile

Location & Property Identification Property Name: 92nd & Holgate 7‐Eleven Site (CN2)

Sub‐Property Type: Commercial, Retail Address: 9205 SE. Holgate Blvd. / 4450 SE 92nd Ave.

City/State/Zip: Portland, OR 97266 County: Multnomah

Market Orientation: Urban

Lat./Long.: 45.490028/‐122.568092 IRR Event ID ( 572042 )

MSA: Portland‐Vancouver‐Beaverto Sale Information n, OR‐WA Metropolitan Statistical Area Sale Price: $350,000 Legal/Tax/Parcel ID: R156972; TL 4900 1S2E09DC Eff. R.E. Sale Price: $350,000 Acres(Usable/Gross): 0.59/0.59 Sale Date: 03/12/2012 Land‐SF(Usable/Gross): 25,876/25,876 Sale Status: Closed Usable/Gross Ratio: 1.00 $/Acre(Gross): $593,220 Shape: Rectangular $/Land SF(Gross): $13.53 Topography: Level $/Acre(Usable): $593,220 Corner Lot: Yes $/Land SF(Usable): $13.53 Zoning Code: CN2 Grantor/Seller: Robert and Dorothy Stevenson Zoning Desc.: Neighborhood Commercial 2 Grantee/Buyer: MAJ Holgate at 92nd LLC et al Utilities Desc.: All available to the site Source of Land Info.: Public Records Property Rights: Fee Simple % of Interest Conveyed: 100.00 Draft Comments Terms of Sale: Cash to seller Document Type: Deed The buyer purchased for retail development and will demolish Recording No.: the existing building at an unknown cost. The 2‐bay auto 12‐029172 repair shop is metal frame, built in 1959 and contains 1,215 Verified By: Mrs. Linda D. Keele SF. The property had originally been a gas station but the Verification Date: 8/14/12 sellers had removed two tanks and received a no further Verification Source: Cory Stevens, Prudential NW action letter from the DEQ in the early to mid‐1990's. The site (503‐212‐2765) is clean at time of this 2012 sale. The selling broker felt that the price reflects market value for the land. There are no Verification Type: Confirmed‐Seller Broker off‐site costs that the broker is aware of.

Improvement and Site Data

92nd & Holgate 7‐Eleven Site (CN2) Land Sale Profile

Comments (Cont'd) The buyers' broker (Derek Federinko, Coldwell Banker, 360‐823‐5107) also confirmed the sale and confirmed that the buyer will develop a 7‐Eleven store on the site (likely in the 2400‐3000 SF range). The cost of demolition is unknown by both brokers.

Neighborhood Commercial zoned site is located at the northeast corner of Holgate and 92nd Ave. The property is located across from Lents Park and near a MAX light rail station. Holgate crosses I‐205 nearby to the east but there is no freeway access from Holgate. Property is all usable.

Draft

92nd & Holgate 7‐Eleven Site (CN2) Land Sale Profile

Location & Property Identification Property Name: 2110 SE 82nd Ave. CS Zoned Site

Sub‐Property Type: Commercial, Retail Address: 2110 SE. 82nd Ave. City/State/Zip: Portland, OR 97216 County: Multnomah

Market Orientation: Urban

Lat./Long.: 45.507595/‐122.578157 IRR Event ID ( 643857 )

Acres(Usable/Gross): 0.72/0.72 Sale Information Land‐SF(Usable/Gross): 31,350/31,350 Usable/Gross Ratio: Sale Price: $335,000 1.00 Shape: Eff. R.E. Sale Price: $335,000 Rectangular Topography: Level Sale Date: 12/23/2011 Corner Lot: Sale Status: Closed No Zoning Code: $/Acre(Gross): $465,278 CS Zoning Desc.: $/Land SF(Gross): $10.69 Storefront Commercial Utilities Desc.: $/Acre(Usable): $465,278 All available in the street Source of Land Info.: $/Land SF(Usable): $10.69 Public Records Grantor/Seller: Sterling Savings Bank Comments Grantee/Buyer: Jingyun Gao Property Rights: Fee Simple Site had been listed for $599,000 and was on the market for % of Interest Conveyed: 100.00 38 days before the $335,000 offer was accepted. Document Type: Deed Level vacant site is located on the east side of SE 82nd Ave. Recording No.: south of SE Harrison St. and north of SE Division St. Site has 11‐144141 Draft150' of frontage on SE 82nd Ave. Zoning is Storefront Verified By: Bruce M.y Ostl Commercial by the City of Portland. Verification Date: 4/1/13 Verification Source: Brett Bayne, Macadam Forbes

Verification Type: Confirmed‐Seller Broker

Improvement and Site Data MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan Statistical Area Legal/Tax/Parcel ID: R332450; TL 8500 1S2E04CC

2110 SE 82nd Ave. CS Zoned Site Land Sale Profile

Location & Property Identification Property Name: Les Schwab Site ‐ SE Tacoma (CG)

Sub‐Property Type: Commercial, Retail Address: 2500 SE. Tacoma St. @ McLoughlin Blvd.

City/State/Zip: Portland, OR 97202 County: Multnomah

Market Orientation: Urban

Lat./Long.: 45.464844/‐122.639481 IRR Event ID ( 519366 )

MSA: Portland‐Vancouver‐Beaverto Sale Information n, OR‐WA Metropolitan Statistical Area Sale Price: $650,000 Legal/Tax/Parcel ID: R288486 & ‐87; TLs 300 & 400 Eff. R.E. Sale Price: $650,000 1S1E24CC Sale Date: 11/04/2011 Acres(Usable/Gross): 0.94/0.94 Sale Status: Closed Land‐SF(Usable/Gross): 41,042/41,042 $/Acre(Gross): $691,489 Usable/Gross Ratio: 1.00 $/Land SF(Gross): $15.84 Shape: Irregular $/Acre(Usable): $691,489 Topography: Level $/Land SF(Usable): $15.84 Corner Lot: Yes Grantor/Seller: William Sheridan & Jeanne Zoning Code: Knez CG Zoning Desc.: General Commercial Grantee/Buyer: Les Schwab Tire Centers of Portland Utilities Desc.: All available in street Source of Land Info.: Public Records Property Rights: Fee Simple % of Interest Conveyed: 100.00 Draft Comments Terms of Sale: Cash to seller Document Type: Deed Buyer intends to develop site with a tire shop. Site was under Recording No.: contract for a year while contamination remediation was 11‐123242 undertaken and finished. In the 1940's & 1950's the site was a Verified By: Mrs. Linda D. Keele gas station owned by Exxon Mobile; there was some Verification Date: 1/12/12 contamination from that use. Seller had indemnity from Exxon Verification Source: Alex MacLean, CRA for future contamination and Exxon paid to clean the site. (503‐274‐0211) Broker felt that price is market price at time of closing and at time it went under contract. Verification Type: Confirmed‐Buyer Broker

Improvement and Site Data All usable site is located on the west side of SE

Les Schwab Site ‐ SE Tacoma (CG) Land Sale Profile

Comments (Cont'd) McLoughlin Blvd. Between SE Tacoma and Tenino streets. Southbound traffic on McLoughlin Blvd. may turn right onto Tacoma to access the property. Northbound traffic may take the Tacoma St. exit and cross over the highway to access the property. Site is an irregular rectangle with good exposure, visibility, and access. It was formerly a Kasch's Nursery and is a paved lot. It is generally vacant and ready to build on.

Draft

Les Schwab Site ‐ SE Tacoma (CG) Land Sale Profile

Location & Property Identification

Property Name: Autozone Site Sub‐Property Type: Commercial, Retail Address: 425 NE. Burnside City/State/Zip: Gresham, OR 97030 County: Multnomah

Market Orientation: Suburban

Lat./Long.: 45.509677/‐122.434173 IRR Event ID ( 496250 )

Sale Information Improvement and Site Data Sale Price: $870,000 MSA: Portland‐Vancouver‐Beaverto Eff. R.E. Sale Price: $870,000 n, OR‐WA Metropolitan Statistical Area Sale Date: 04/15/2011 Contract Date: 04/01/2009 Legal/Tax/Parcel ID: R337423 (subdivided into R644287 and R644288) Sale Status: Closed $/Acre(Gross): $776,786 Acres(Usable/Gross): 1.12/1.12 $/Land SF(Gross): $17.89 Land‐SF(Usable/Gross): 48,633/48,633 Usable/Gross Ratio: $/Acre(Usable): $776,786 1.00 Shape: $/Land SF(Usable): $17.89 Rectangular Topography: Case Study Type: None Level Grantor/Seller: Cascadia Development LLC Corner Lot: Yes (Curtis Pence) Zoning Code: DCL (Downtown Commercial Low Rise) Grantee/Buyer: Autozone Development Corporation Zoning Desc.: DCL (Downtown Commercial Low Rise) Property Rights: Fee Simple % of Interest Conveyed: DraftUtilities Desc.: All available 100.00 Source of Land Info.: Financing: Cash to seller Public Records Document Type: Deed Recording No.: 2011045968 Comments Verified By: Kathleen E. Buono, MAI, This corner parcel was openly marketed from 2007 to 2009 MRICS when it went into contract with Autozone. The escrow period Verification Date: was fairly protracted in order to allow for Autozone to obtain 9/30/11 approvals for subdividing the lot and permitting of their new Verification Source: Tiffany Jones, Coldwell Banker facility. The broker believes that the pricing established in Commercial, 503‐587‐4777 2009 was probably higher than what could have been achieved as of closing. Autozone has constructed a 7,846 square foot building on the corner Verification Type: Confirmed‐Seller Broker

Autozone Site Land Sale Profile

Comments (Cont'd) piece (15,403 sf). They retain ownership of the excess parcel created (33,228 sf). This is vacant (surface parking) parcel located on the northwest corner of NE Burnside and NE Kelly Ave. The property is zoned DCL which requires a minimum 0.4 FAR and has a 1.0 FAR max. Bonuses are available and allow for 2.0 to 3.0 FAR, depending on type of use.

Draft

Autozone Site Land Sale Profile

Location & Property Identification

Property Name: Goodwill Retail Center Site Sub‐Property Type: Commercial, Retail Address: 1350 NE. 122nd Ave. City/State/Zip: Portland, OR 97230 County: Multnomah

Market Orientation: Urban

Lat./Long.: 45.532698/‐122.537665 IRR Event ID ( 429118 )

Legal/Tax/Parcel ID: TLs 700, 800, 900, 1000 Sale Information 1N2E35BB Acres(Usable/Gross): 3.79/3.79 Sale Price: $3,800,000 Land‐SF(Usable/Gross): 165,294/165,294 Eff. R.E. Sale Price: $3,800,000 Usable/Gross Ratio: 1.00 Sale Date: 06/15/2010 Topography: Level Sale Status: Closed Corner Lot: Yes $/Acre(Gross): $1,002,639 Frontage Desc.: NE 122nd & Halsey $/Land SF(Gross): $22.99 Zoning Code: GC, General Commerical $/Acre(Usable): $1,002,639 Zoning Desc.: General Commercial $/Land SF(Usable): $22.99 Flood Plain: No Grantor/Seller: 1350 NE 122nd Ave. Co. LLC & New Albertson's Inc. Utilities Desc.: All available in street Source of Land Info.: Grantee/Buyer: Goodwill Industries of the Other Columbia Willamette Inc. Property Rights: Fee Simple Comments % of Interest Conveyed: 100.00 This is sale of the former Albertson's store and land. There Document Type: Deed were 2 transactions that were coordinated together. Deed 10‐073934 shows a price of $2,400,000. Deed 10‐073936 Recording No.: Draft 10‐073934 & 10‐073936 shows price of $10. Buyer representative recalled that all 4 tax Verified By: Kathleen E. Buono, MAI, lots and vacated street area sold for $3,800,000. Buyer will MRICS demolish the Albertsons buildings and redevelop site with a Verification Date: new Goodwill store and in‐line retail to lease. Demolition costs 10/6/11 are unknown by buyer rep. There are no off‐site costs to the Verification Source: Peter Collins, Goodwill buyer. Buyer to start construction on in‐line in early Verification Type: Confirmed‐Buyer November 2011.

Improvement and Site Data This corner oriented parcel is comprised of four parcels MSA: Portland‐Vancouver‐Beaverto (combined into two in 2011). It is located on the southeast n, OR‐WA Metropolitan corner of 122nd and Halsey. The proprety also has frontage on Statistical Area NE Wasco a dead‐end cul‐de‐sac.

Goodwill Retail Center Site Land Sale Profile

Comments (Cont'd)

Draft

Goodwill Retail Center Site Land Sale Profile

Location & Property Identification

Property Name: 17899‐18081 SE Division St. Sub‐Property Type: Commercial, Office Address: 17899‐18081 SE. Divsion St. City/State/Zip: Gresham, OR 97236 County: Multnomah Submarket: Eastside Market Orientation: Suburban

Lat./Long.: 45.485419/‐122.511450 IRR Event ID ( 407120 )

MSA: Portland‐Vancouver‐Beaverto Sale Information n, OR‐WA Metropolitan Statistical Area Sale Price: $825,000 Legal/Tax/Parcel ID: R501631 & R338099 Eff. R.E. Sale Price: $825,000 Acres(Usable/Gross): 1.72/1.72 Sale Date: 02/25/2010 Land‐SF(Usable/Gross): 74,923/74,923 Sale Status: Closed Usable/Gross Ratio: 1.00 $/Acre(Gross): $479,651 Shape: Irregular $/Land SF(Gross): $11.01 Topography: Level $/Acre(Usable): $479,651 Corner Lot: No $/Land SF(Usable): $11.01 Frontage Feet: 325 Case Study Type: None Frontage Desc.: SE Division St Grantor/Seller: Royal & Shirley Moore Zoning Code: CC Grantee/Buyer: Acadia Management Zoning Desc.: Community Commercial Property Rights: Fee Simple Utilities: Electricity, Water Public, % of Interest Conveyed: 100.00 Sewer, Gas, Telephone Exposure Time: 38.00 (months) Source of Land Info.: Public Records Terms of Sale: Cash to seller Draft Document Type: Deed Comments Recording No.: 10025692 Verified By: This site was purchased for the development of a GSA office Adam Henderson building. The listing price was $799,000; however, there were Verification Date: 7/26/10 two interested buyers competing for the property. There were Verification Source: Brett Bayne, Macadam no unusual conditions reported. Forbes, 503‐972‐7280 This site is a vacant asphalt paved lot just west of the SE Verification Type: Confirmed‐Seller Broker Division St and SE 182nd Ave intersection in Gresham. The dimensions are 325' x 230'. Improvement and Site Data

17899‐18081 SE Division St. Land Sale Profile

Location & Property Identification

Property Name: Human Solutions Site Sub‐Property Type: Commercial, Office Address: NE. 181st Avenue & Couch Street

City/State/Zip: Gresham, OR 97230 County: Multnomah Submarket: Eastside Market Orientation: Suburban

Lat./Long.: 45.522660/‐122.477140 IRR Event ID ( 261923 )

MSA: Portland‐Vancouver‐Beaverto Sale Information n, OR‐WA Metropolitan Statistical Area Sale Price: $1,040,000 Legal/Tax/Parcel ID: R321542, R283569, R283567; Eff. R.E. Sale Price: $1,040,000 1N3E31DA 1900, 2000, 2100 Sale Date: 03/30/2007 Acres(Usable/Gross): 1.82/1.82 Contract Date: 03/30/2007 Land‐SF(Usable/Gross): 79,179/79,179 Sale Status: Recorded Usable/Gross Ratio: 1.00 $/Acre(Gross): $572,183 Shape: Rectangular $/Land SF(Gross): $13.13 Topography: Level $/Acre(Usable): $572,183 Frontage Desc.: NE 181st Avenue & NE Couch $/Land SF(Usable): $13.13 Zoning Code: RTC Grantor/Seller: Milton O. Brown Zoning Desc.: Commercial Grantee/Buyer: Human Solutions, Inc. Utilities: Electricity, Water Public, Property Rights: Fee Simple Sewer, Gas, Telephone % of Interest Conveyed: 100.00 Source of Land Info.: Other Terms of Sale: Cash to seller Draft Document Type: Warranty Deed Comments Recording No.: 2007‐063167 This land sale is comprised of three adjoining parcels that form Verification Source: Seller a rectangle at the northeast corner of NE 181st Avenue and Verification Type: Confirmed‐Seller Broker NE Couch Street, just north of E Burnside Street. The site is one block north of the MAX light rail. The property was not openly marketed to the public, when the seller received an Contact Information unsolicited offer. The deal fell through for an undisclosed Buyer Cont. Comp.: reason, and another unsolicited offer was received from Human Solutions, Inc. Human Solutions, a non‐profit organization. The seller felt that Seller Cont. Comp.: Milton O. Brown the zoning, Rockwood Town Center (RTC), was too prohibitive

Improvement and Site Data

Human Solutions Site Land Sale Profile

Comments (Cont'd) because it required any development on this site to have "habitable" space above the ground floor. The buyer intends to develop a property to house their corporate headquarters (office space) with some affordable housing above the office space.

Confirmed by: Jack Steiger, developer/broker with Steiger Commercial Real Estate; 10/15/07. #360‐5662‐819 x1090.

Northeast corner of NE 181st Avenue & Couch Street.

Draft

Human Solutions Site Retail Sale Profile

Location & Property Identification

Property Name: Jower's Building Sub‐Property Type: Mixed Use Address: 8803 N. Lombard St. City/State/Zip: Portland, OR 97203 County: Multnomah

Market Orientation: Urban

Lat./Long.: 45.591358/‐122.755646 IRR Event ID ( 1087974 )

Acres(Gross): 0.12 Sale Information Land‐SF(Gross): 5,231 Year Built: Sale Price: $520,000 1906 Most Recent Renovation: Eff. R.E. Sale Price: $520,000 2015 Construction Desc.: Sale Date: 06/25/2014 Masonry & Mill No. of Buildings/Stories: 1/2 Sale Status: Closed No. Of Elevators: None $/SF GBA: $56.14 Bldg. to Land Ratio FAR: 1.77 $/SF NRA: $56.14 Zoning Code: CS Grantor/Seller: DSE Investments Zoning Desc.: Storefront Commercial Grantee/Buyer: Lombard 8803 LLC Source of Land Info.: Public Records Property Rights: Fee Simple Exposure Time: 11.00 (months) Comments Occupancy at Time of Sale 0.00 Financing: Cash to seller Vacant building was in raw shell condition at time of sale. The Document Type: Deed seller had totally gutted the interior and put on a new roof; both floors are all open space. The ground floor has concrete Recording No.: 14 ‐060272 flooring; there are stairs to the second floor which has a wood Verified By: Mrs. Linda D. Keele floor. Walls are un‐insulated exposed brick. The seller had Draftcompleted a limited seismic upgrade. The interior brick walls Verification Date: 1/8/15 had been unreinforced; the seller put in glu‐lam wood to Verification Source: Todd Peres, Debbie Thomas reinforce the walls. There is no asbestos; there have been Real Estate Levels 1 and 2 reviews. The building has electric service, plus Verification Type: Confirmed‐Buyer Broker water and sewer; there is one restroom. The buyer purchased with the intention to renovate into 1 or 2 retail tenant spaces on the ground floor and 4 apartments on the second floor; Improvement and Site Data ground floor has capacity for 49 people (for restaurant or bar). There has been a lot of interest in this building since there is a MSA: Portland‐Vancouver OR‐WA new building next door called Two‐Thirds plus Legal/Tax/Parcel ID: R323669; TL 18900 1N1W01CD GBA‐SF: 9,262 GLA‐SF: 9,262

Jower's Building Retail Sale Profile

Comments (Cont'd) New Seasons announced they will have a new grocery store on Lombard. Buyer's broker does not know the underlying value of the land but stated that this neighborhood is "really taking off". Buyer's broker believes that the seller sold at a loss considering the work that was put into the building. It had been about to fall down before the seller made the improvements. (Buyer is Debbie Thomas of Debbie Thomas Real Estate).

Jower's Building is located on the east side of Lombard Street with a mid‐block location near N Baltimore Ave. in the downtown area of St. John's neighborhood. The building nearly fully covers the lot.

Draft

Jower's Building Retail Sale Profile

Location & Property Identification Property Name: Former Viewpoint Gentleman's Club

Sub‐Property Type: Restaurant/Bar, Bar/Tavern/Nightclub

Address: 8102 NE. Killingsworth St. City/State/Zip: Portland, OR 97218 County: Multnomah

Market Orientation: Urban Property Location: S side of Killingsworth, one lot W of NE 82nd Ave Lat./Long.: 45.562667/‐122.579200 IRR Event ID ( 1087934 )

GBA‐SF: 12,596 Sale Information GLA‐SF: 12,596 Sale Price: $775,000 Acres(Usable/Gross): 0.81/0.81 Eff. R.E. Sale Price: $775,000 Land‐SF(Usable/Gross): 35,400/35,400 Usable/Gross Ratio: 1.00 Sale Date: 10/09/2013 Year Built: 1951 Sale Status: Closed Building/M&S Class: C/C $/SF GBA: $61.53 Construction Quality: Average $/SF NRA: $61.53 Improvements Cond.: Poor Grantor/Seller: Myrtle Taylor Construction Desc.: Brick over cinder block Grantee/Buyer: Paul Hooser No. of Buildings/Stories: 1/2 Property Rights: Fee Simple Multi‐Tenant/Condo.: No/No Occupancy at Time of Sale 0.00 Total Parking Spaces: Financing: Seller financing 69 Park. Ratio 1000 SF GLA: Terms of Sale: $275,000 down payment 5.48 No. Surface Spaces: Document Type: Deed 69 DraftPark. Ratio 1000 SF GBA: 5.48 Recording No.: 13 ‐137387 Shape: Verified By: Mrs. Linda D. Keele Rectangular Topography: Verification Date: 1/8/15 Level Verification Source: Duane Link, Norris & Stevens Vegetation: Minimal Corner Lot: No Verification Type: Confirmed‐Seller Broker Frontage Feet: 276 Frontage Type: 2 way, 2 lanes each way Improvement and Site Data Traffic Control at Entry: None AccessibilityRating: Average MSA: Portland‐Vancouver OR‐WA Visibility Rating: Legal/Tax/Parcel ID: R318168 & R318226; TL 200 & Average 300 1N2E20AA Bldg. to Land Ratio FAR: 0.36 Zoning Code: IG2h

Former Viewpoint Gentleman's Club Retail Sale Profile

Improvement and Site Data (Cont'd) Zoning Desc.: General Industrial 2 Improve. Info. Source: Broker Source of Land Info.: Public Records

Comments Seller carried contract of $500,000 for 5 years at 7% interest rate. According to the broker who represented both sides, the seller contract did not affect the deed price of $775,000. The vacant property was on the market over a year with asking price of $1,200,000. This was a former strip club in an older building. The exterior was in poor condition; however, the roof was adequate and had 7 years left on the warranty. The interior was also in poor condition and needs a lot of money to make improvements. Depending on level of taste, interior improvements could run anywhere from $50,000 to $350,000 according to the broker. There is no asbestos as far as the broker knows, but the buyer waived inspections. The buyers intentions mixed and unsure; they considered selling cars on the parking lot or reopening the building as a night club. The buyers bought for the land primarily. However, the broker stated that the highest and best use of the property was as a night club. The broker believes the value was in the retail building because the underlying IG2 land value was $250,000‐$300,000.

The former Viewpoint was a gentleman's club and restaurant with two full bars, two private VIP areas, a large main stage, lottery services, and an upstairs with bar and offices. A coffee hut is located on the far west side of the parking lot. The building is located on the 10,920 SF lot and adjacent is a 24,480 SF lot for parking. The land is zoned IG2h.Draft

Former Viewpoint Gentleman's Club Retail Sale Profile

Location & Property Identification

Property Name: Former Kelly Moore Store Sub‐Property Type: Freestanding Address: 1414 SE. 82nd Ave. City/State/Zip: Portland, OR 97216 County: Multnomah Submarket: 122nd/Gresham Market Orientation: Urban

Lat./Long.: 45.512344/‐122.578079 IRR Event ID ( 641222 )

Acres(Gross): 0.66 Sale Information Land‐SF(Gross): 28,600 Year Built: Sale Price: $800,000 1965 Construction Desc.: Eff. R.E. Sale Price: $800,000 Concrete block No. of Buildings/Stories: 1/1 Sale Date: 09/25/2013 Bldg. to Land Ratio FAR: 0.41 Sale Status: Closed Improve. Info. Source: Broker $/SF GBA: $66.67 Source of Land Info.: Public Records $/SF NRA: $66.67 Grantor/Seller: LDK Investors Comments Grantee/Buyer: Ken Zhang Property Rights: Fee Simple This was an un solicited offer by the buyer who is going to use % of Interest Conveyed: as retail/wholesale Asian Food products. Large refrigeration 100.00 system to be added by the buyer. The existing showroom Occupancy at Time of Sale 0.00 and offices were in good shape. Interior of warehouse needs Financing: Cash to seller ‐ buyer obtained paint, exterior paint need as well as roof repair ando red financing landscaping. Broker figures $150,000 to update in addition to deed price of $800,000. Document Type: Deed Recording No.: 13‐129454 Verified By: DraftSingle‐tenant retail building is located at the southeast corner Mrs. Linda D. Keele of SE 82nd Ave. and SE Madison St. The irregular shaped Verification Date: 9/26/13 parcel also fronts on the north side of SE Hawthorne St. where Verification Source: Isaac Quintero, Magellan the parking lot is located. Building includes 1,700 SF of Properties showroom, 2,900 SF of offices, and 7,400 SF of warehouse Verification Type: with 15' clear height and grade level loading on two sides of Confirmed‐Seller Broker the warehouse. Power is heavy 3‐phase. Improvement and Site Data MSA: Portland‐Vancouver OR‐WA Legal/Tax/Parcel ID: R272372; TL 10400 1S2E04BC GBA‐SF: 12,000 GLA‐SF: 12,000

Former Kelly Moore Store Retail Sale Profile

Location & Property Identification

Property Name: 33rd Hollywood Building Sub‐Property Type: Freestanding Address: 1205 NE. 33rd Ave. / 3275 NE. Sandy Blvd.

City/State/Zip: Portland, OR 97232 County: Multnomah Submarket: Eastside Market Orientation: Urban

Lat./Long.: 45.530526/‐122.642904 IRR Event ID ( 1086942 )

GBA‐SF: 47,000 Sale Information GLA‐SF: 47,000 Sale Price: $2,225,000 Acres(Usable/Gross): 0.45/0.45 Eff. R.E. Sale Price: $2,225,000 Land‐SF(Usable/Gross): 19,650/19,650 Usable/Gross Ratio: 1.00 Sale Date: 07/27/2012 Year Built: 1947 Sale Status: Closed Construction Desc.: Poured concrete $/SF GBA: $47.34 Total Parking Spaces: 13 $/SF NRA: $47.34 Park. Ratio 1000 SF GLA: 0.28 Grantor/Seller: Weston Investment Co. LLC Park. Ratio 1000 SF GBA: 0.28 Grantee/Buyer: Hollywood Properties LLC Bldg. to Land Ratio FAR: 2.39 Property Rights: Fee Simple Zoning Desc.: Storefront Commercial Occupancy at Time of Sale 0.00 Financing: Cash to seller Improve. Info. Source: Broker Terms of Sale: 1031 Exchange / Cash Source of Land Info.: Public Records Equivalent Document Type: Deed Comments Recording No.: 12‐091216 Draft Weston Co. purchased in 7/2009 for $1,447,125 or $30.79/SF Verified By: Mrs. Linda D. Keele overall including the basement space. The building was in Verification Date: rough shape at time of 2009 sale. Weston Co. renovated to 1/6/15 white shell condition, according to the broker. Cost to Verification Source: George Lampus, REIG renovate unknown since Weston has own employees that do (503‐222‐2248) this work. Weston removedt the carpe in the showroom; Verification Type: Confirmed‐Buyer Broker floors are hardwood in the showroom. There were some asbestos floor tiles to remove but the cost on that has gone way down and likely not a big cost to Weston, according to Improvement and Site Data the broker. Weston also put in new storefronts but did not make any electrical improvements. Hollywood Properties MSA: Portland‐Vancouver OR‐WA purchased the Legal/Tax/Parcel ID: R203052 & ‐053; TLs 2800 & 2900 1N1E36BA

33rd Hollywood Building Retail Sale Profile

Comments (Cont'd) vacant building in 7/2012 to use for Standard TV and Appliance sales. Price was based on Weston's 2009 price, plus the cost of Weston's renovations at 8% annual interest, plus cost of real estate commission. The 2012 buyer continued the renovations and spent $500,000‐$600,000 on improvements to the building for appliance sales use. The basement showroom is for basement bargain sales; the main floor and mezzanine showrooms are for appliance sales. The warehouse is attached and used by the buyer; it can't be leased out since it is interconnected and attached to the showroom building. The broker mentioned that the warehouse elevator was small. The broker stated that the underlying land value was $40/SF in 2012. The site was in escrow to Walgreens at that price in 2012 but the deal fell through.

This is a single‐tenant retail building with warehouse located at the northwest corner of NE Sandy Boulevard and 33rd Avenue. It consists of two buildings that are interconnected. The showroom building was constructed in 1947 and includes 27,000 SF on three levels. There is 10,000 SF of showroom in the windowless basement, 10,000 SF on the main floor, and a 7,000 SF mezzanine. The connected second building is a 20,000 SF four‐story vertical warehouse with 5,000 SF per level including a full basement and three upper stories with an elevator. This warehouse building was constructed in approximately 1952 and includes a grade loading door. Above grade space is 32,000 SF. New roof in 1998 was a tear off with total replacement. There are 13 parking spaces. Site is zoned Storefront Commercial. Draft

33rd Hollywood Building Land Sale Profile

Location & Property Identification Property Name: 3440‐3450 SE Alder St. (Land Value)

Sub‐Property Type: Residential Address: 3440‐3450 SE. Alder City/State/Zip: Portland, OR 97214 County: Multlnomah

Market Orientation: Urban

Lat./Long.: 45.517887/‐122.629126 IRR Event ID ( 594776 )

Year Built: 1921 Sale Information Source of Land Info.: Public Records Sale Price: $550,000 Eff. R.E. Sale Price: $550,000 Comments Sale Date: 03/20/2012 Tired builidng. Limited remaining economic life. Effectively Sale Status: Closed 100% site coverage. Verified by public records only. A review of permits on Portland CGIS indicates that the building $/SF NRA: $50.00 was converted to residential townhomes. Perimeter $/Acre(Gross): $2,200,000 inspection on January 2015 confirmed residential use. $/Land SF(Gross): $49.77 Grantor/Seller: Foster & Son Investments Grantee/Buyer: Older 11,000 SF warehouse is located at the southwest corner Dr. Jims still Really Nice LLC of SE Alder St. and SE 35th Ave. as of 2012. Zoning is R2.5. Property Rights: Fee Simple % of Interest Conveyed: 100.00 Exposure Time: 21.00 (months) Document Type: Deed Recording No.: 1203287 Draft Verification Type: Not Verified

Sale Analysis Current Use: Industrial

Improvement and Site Data MSA: Portland‐Vancouver OR‐WA Legal/Tax/Parcel ID: R280410; TL 17500 1S1E01AB NRA‐SF: 11,000 Acres(Gross): 0.25 Land‐SF(Gross): 11,050

3440‐3450 SE Alder St. (Land Value) Retail Lease Profile

Location & Property Identification

Property Name: Harbor Freight Tools Sub‐Property Type: Freestanding Address: 5035 SE. 82nd Ave. City/State/Zip: Portland, OR 97266 County: Multnomah Submarket: 122nd/Gresham Market Orientation: Urban

Lat./Long.: 45.485703/‐122.578905 IRR Event ID (802270)

Most Recent Renovation: 2014 Lease Information Construction Desc.: Concrete block No. of Buildings/Stories: 1/1 Lessee: Harbor Freight Tools USA Total Parking Spaces: 147 Init Year Contract Rate: $12.00 /$/SF/YR Park. Ratio 1000 SF GLA: 6.77 Effective Lease Rate: $12.00 /$/SF/YR Park. Ratio 1000 SF GBA: 6.77 Lease Commencement: 07/01/2014 Bldg. to Land Ratio FAR: 0.38 Lease Expiration: 06/30/2024 Improve. Info. Source: Public Records Term of Lease: 120 months Source of Land Info.: Public Records Space Type: Retail Escalations: Fixed Percentage Comments Verified with: Pate Lamanna Commercial Single‐tenant retail building. It was the former Fred Meyer flyer Home Improvement Store, and was renovated in 2014. Transaction Reliability: Verified Leased Area: 21,725 Rent is $12 NNN in Yrs. 1‐5 and increases 10% to $13.20 in Yrs. 5‐10. Lease was signed in 11/2013 and to commence after building is renovated estimated to be 7/2014. TI's unknown. Lease Expense Information Tenant also has four 5‐year options to renew at 10% increase Lease Reimburse. Type: Triple Net Drafteach option. Improvement and Site Data MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan Statistical Area Legal/Tax/Parcel ID: R214036; TL 500 1S2E17AD GBA‐SF: 21,725 GLA‐SF: 21,725 Acres(Gross): 1.32 Land‐SF(Gross): 57,370 Year Built: 1969

Harbor Freight Tools Retail Lease Profile

Location & Property Identification

Property Name: Jantzen Beach Super Center Sub‐Property Type: Shopping Center, Regional Mall

Address: 1405 N. Jantzen Beach Dr. / 1500 N. Hayden Island Dr.

City/State/Zip: Portland, OR 97217 County: Multnomah Submarket: Eastside Market Orientation: Urban Property Location: 12135 N Parker Ave Lat./Long.: 45.589584/‐122.692978 IRR Event ID (586185)

Lease Information Comments Lessee: TJ Maxx Lease was signed in early fall of 2012 and to commence upon Init Year Contract Rate: store opening in September or October 2013. Construction of $12.50 /$/SF/YR a new 60,000 SF concrete building is already underway in June Effective Lease Rate: $12.50 /$/SF/YR 2013; address was not shared but according to the TJ Maxx Lease Commencement: 09/01/2013 web site, the address is 12135 N Parkere Av (next to a new Lease Expiration: Burlington Coat Factory store and across from a Home Depot). 08/31/2023 This is a 10‐year lease with rent of $12.50 NNN in Yrs. 1‐5 and Term of Lease: 120 months $13.25 in Yrs. 6‐10. No free rent was given; it is a turnkey deal. NNNs are unknown. (LDK, 6/13/2013) Space Type: Retail Escalations: Fixed Steps Verified with: Confidential reliable source Transaction Reliability: Confirmed Leased Area: 25,500 Lease Expense Information Draft Lease Reimburse. Type: Triple Net

Improvement and Site Data MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan Statistical Area GLA‐SF: 368,000 Acres(Gross): 1.00 Land‐SF(Gross): 43,560 Source of Land Info.: Other

Jantzen Beach Super Center Retail Lease Profile

Location & Property Identification

Property Name: 4926 SE Division Retail

Address: 4926 SE. Division St. City/State/Zip: Portland, OR 97206 County: Multnomah Submarket: Southeast/East Clackamas Market Orientation: Urban

Lat./Long.: 45.505314/‐122.611320 IRR Event ID (662914)

Usable/Gross Ratio: 1.00 Lease Information Year Built: 1941 Most Recent Renovation: 2013 Lessee: Green Zebra Grocery No. of Buildings/Stories: 1/1 Init Year Contract Rate: $17.50 /$/SF/YR Total Parking Spaces: 15 Effective Lease Rate: $17.50 /$/SF/YR Park. Ratio 1000 SF GLA: 2.31 Lease Commencement: 07/01/2013 Park. Ratio 1000 SF GBA: 2.31 Lease Expiration: 06/30/2023 Parking Conformity: Yes Term of Lease: 120 months Shape: Rectangular Lease Type: Local Bldg. to Land Ratio FAR: 0.43 Space Type: Retail Excess/Surplus Land: No Escalations: Fixed Steps Zoning Code: CSm Verified with: Dan Bozich ‐ Urban Works Zoning Desc.: Storefront Commercial Transaction Reliability: Confirmed Flood Plain: No Leased Area: 6,500 Utilities: Electricity, Water Public, Sewer, Gas, Telephone Full Building Lease: Yes Source of Land Info.: Other Lease Expense Information DraftComments Lease Reimburse. Type: Triple Net Older building is located at the corner of SE Division and 50th Ave. Originally constructed as a Safeway, building has good Improvement and Site Data windows on SE Division. There are 2 grade doors on the east side of the building. There are approximately 15 on‐site MSA: Portland‐Vancouver‐Beaverto parking. n, OR‐WA Metropolitan Statistical Area 10‐year lease of building and associated parking lot on the Legal/Tax/Parcel ID: R241358 southwest corner of 50th and Division. Lease included GBA‐SF: 6,500 $150,000 TI allowance ($23/SF) to convert the space to grocery use, which will commence 150 days after the permits GLA‐SF: 6,500 have been issued. There were no concessions given. Rate is Acres(Usable/Gross): 0.35/0.35 $17.50 NNN flat for first 2 years, increasing Land‐SF(Usable/Gross): 15,070/15,070

4926 SE Division Retail Retail Lease Profile

Comments (Cont'd) to: $18.55 in year 3, $19.11 year 4, $19.68 year 5, $20.27 year 6, $20.88 year 7, $21.50 year 8, $22.15 year 9, and $22.81 year 10. Asking rent was reported at $22/SF/year. (MD 8/13)

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4926 SE Division Retail Retail Lease Profile

Location & Property Identification Property Name: Powell Square Shopping Center Sub‐Property Type: Shopping Center, Strip/Convenience Center

Address: 3806‐3848 SE. Powell Blvd. City/State/Zip: Portland, OR 97202 County: Multnomah Submarket: Eastside Market Orientation: Urban

Lat./Long.: 45.497305/‐122.622992 IRR Event ID (682295)

Land‐SF(Gross): 13,500 Lease Information Year Built: 1989 Construction Desc.: Brick Lessee: Petco Unleashed Total Parking Spaces: 40 Init Year Contract Rate: $19.00 /$/SF/YR Park. Ratio 1000 SF GLA: 2.05 Effective Lease Rate: $19.00 /$/SF/YR Park. Ratio 1000 SF GBA: 2.05 Lease Commencement: 03/01/2013 Air‐Conditioning Type: To be determined Lease Expiration: 02/28/2023 Frontage Desc.: S Term of Lease: 120 months Bldg. to Land Ratio FAR: 1.44 Space Type: Retail Zoning Code: CG Escalations: Fixed Steps Source of Land Info.: Other Verified with: Spencer McCormick, HSM Transaction Reliability: Confirmed Comments Leased Area: 6,203 Powell Square Center is located at the southwest corner of SE Base Tenant Improv.: $35.00 39th and Powell Blvd. There is on‐site parking. New 10‐year lease of the former O'Reilly's space. Rent is $19 Lease Expense Information DraftNNN in Yrs. 1‐5 and increases to $20 in Yrs. 6‐10. NNNs are $4.65. Tenant did note receiv any free rent but did receive Lease Reimburse. Type: Triple Net turnkey TI's of $35/SF. (LDK, 8/13/13)

Improvement and Site Data MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan Statistical Area Legal/Tax/Parcel ID: R328143; 1S1E12DA 3300 GBA‐SF: 19,545 GLA‐SF: 19,545 Acres(Gross): 0.31

Powell Square Shopping Center Retail Lease Profile

Location & Property Identification

Property Name: Aaron's ‐ N. Lombard St. Sub‐Property Type: Freestanding Address: 1622 N. Lombard St. City/State/Zip: Portland, OR 97217 County: Multnomah Submarket: Eastside Market Orientation: Urban

Lat./Long.: 45.577121/‐122.683715 IRR Event ID (608988)

Total Parking Spaces: 12 Lease Information Park. Ratio 1000 SF GLA: 1.05 Park. Ratio 1000 SF GBA: 1.05 Lessee: Aarons Bldg. to Land Ratio FAR: 0.58 Init Year Contract Rate: $11.92 /$/SF/YR Source of Land Info.: Public Records Effective Lease Rate: $11.92 /$/SF/YR Lease Commencement: 01/01/2013 Comments Lease Expiration: 12/31/2027 Single‐tenant retail building is located at the southeast corner Term of Lease: 180 months of N Lombard St. and N Concord Ave., and two blocks west of Space Type: Retail Interstate Ave. There are 10 on‐site parking spaces only but Escalations: Fixed Percentage another 20 spaces of street parking readily available. This tenant does not require as much parking as a typical retailer. Verified with: Lance Sasser, Capital Pacific Transaction Reliability: Confirmed Leased Area: 11,429 New 15‐year lease starts at $11.92 absolute net with 10% increase every 5 years. There are also four 5‐year options to Lease Expense Information renew. Lease Reimburse. Type: Absolute Net Draft Improvement and Site Data MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan Statistical Area Legal/Tax/Parcel ID: R313408; TL 1400 1N1E16AA GBA‐SF: 11,429 GLA‐SF: 11,429 Acres(Gross): 0.45 Land‐SF(Gross): 19,427 Year Built: 2006 No. of Buildings/Stories: 1/1

Aaron's ‐ N. Lombard St. Retail Lease Profile

Location & Property Identification Property Name: The Hollywood ‐ Retail Portion

Address: 4112 NE. Sandy Blvd. City/State/Zip: Portland, OR 97232 County: Multnomah Submarket: Eastside Market Orientation: Urban

Lat./Long.: 45.527130/‐122.642372 IRR Event ID (658141)

Acres(Usable/Gross): 0.25/0.25 Lease Information Land‐SF(Usable/Gross): 10,890/10,890 Usable/Gross Ratio: Lessee: Pono Farms Butcher & 1.00 Restaurant Year Built: 2013 Building/M&S Class: B/D Init Year Contract Rate: $21.00 /$/SF/YR Construction Quality: Good Effective Lease Rate: $21.00 /$/SF/YR Improvements Cond.: Good Lease Commencement: 01/01/2014 Exterior Walls: Brick Lease Expiration: 12/31/2020 No. of Buildings/Stories: 1/5 Term of Lease: 84 months Fire Sprinkler Type: Yes Space Type: Retail Air‐Conditioning Type: Roof Central Mounted Escalations: Fixed Percentage Topography: Level Verified with: Michelle Rozakis, REIG Corner Lot: Yes (503‐222‐1655) Bldg. to Land Ratio FAR: 3.37 Transaction Reliability: Confirmed Zoning Code: CSd Leased Area: 4,010 Zoning Desc.: Commercial Storefront Base Tenant Improv.: $45.00 Improve. Info. Source: Past Appraisal DraftSource of Land Info.: Past Appraisal Lease Expense Information Comments Lease Reimburse. Type: Triple Net The Hollywood is a 5‐story apartment building with ground Estimated Annual Property $5.50 Expenses ($/SF): floor retail. The building contains two retail suites that total 4,010 square feet, with 2,700 SF in the north suite and 1,310 SF in the south suite. The address of the apartment building is Improvement and Site Data 4111 NE Broadway. MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan New 7‐year lease of first generation space was signed 8/21/13. Statistical Area Build‐out was delayed because of permitting issues and construction is just starting in 12/2013 or 1/2014. This tenant GBA‐SF: 36,718 will occupy all of the ground floor GLA‐SF: 26,199

The Hollywood ‐ Retail Portion Retail Lease Profile

Comments (Cont'd) commercial space in the Hollywood apartments building. The space is broken up into two suites and the tenant will operate a restaurant/butcher shop in the larger 2,700 SF space with a bar in the smaller space. Rent starts at $21 NNN for all of the space and increases 5% annually. NNNs are $5.50. Tenant received 3 mos. of free rent at beginning of lease but must pay NNNs during that time. TI's are $45/SF. Landlord to provide stubbed HVAC and tenant will distribute. Tenant has two 5‐year options to renew at fair market rent. (LDK, 1/16/14)

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The Hollywood ‐ Retail Portion Retail Lease Profile

Location & Property Identification Property Name: 3333‐3339 SE Division MU‐Retail Ptn. Sub‐Property Type: Mixed Use, Retail‐Residential

Address: 3333‐3339 SE. Division St. City/State/Zip: Portland, OR 97202 County: Multnomah Submarket: Eastside Market Orientation: Urban

Lat./Long.: 45.504800/‐122.630809 IRR Event ID (563573)

Bldg. to Land Ratio FAR: 0.33 Lease Information Source of Land Info.: Public Records Lessee: Salt & Straw Ice Cream Init Year Contract Rate: $22.00 /$/SF/YR Comments Effective Lease Rate: $22.00 /$/SF/YR A four‐story building will be constructed in 2012/2013 with 31 Lease Commencement: apartments above the ground floor retail space. Exact area of 08/01/2013 the ground floor retail is unknown. Lease Expiration: 07/31/2020 Term of Lease: New 84‐month lease was signed in May 2012 and to 84 months commenced in the summer 2013 when the building was Space Type: Retail completed. Starting rent is $22 NNN with 3% annual increases. Escalations: Fixed Percentage Landlord gave TI's of $40/SF for this first generation space. Tenant paid TI's are for interior wall surfaces and finishes as Verified with: Landlord well as the ADA restroom or an additional $35/SF Transaction Reliability: Confirmed approximately. Tenant received 5 months of free rent. Tenant Leased Area: 1,206 also has two 5‐year options to renew at then market rents. (BO, 3/2013) Lease Expense Information Draft Lease Reimburse. Type: Triple Net

Improvement and Site Data MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan Statistical Area GBA‐SF: 4,440 GLA‐SF: 4,440 Acres(Gross): 0.30 Land‐SF(Gross): 13,199 Year Built: 2012

3333‐3339 SE Division MU‐Retail Ptn. Retail Lease Profile

Location & Property Identification

Property Name: Morrison Place Sub‐Property Type: Shopping Center, Strip/Convenience Center

Address: 1401 SE. Morrison Street St. City/State/Zip: Portland, OR 97214 County: Multnomah Submarket: Eastside Market Orientation: Urban

Lat./Long.: 45.517196/‐122.651101 IRR Event ID (628313)

Usable/Gross Ratio: 1.00 Lease Information Year Built: 1955 Most Recent Renovation: 2004 Lessee: Light Bar (Cafe & Bar) Improvements Cond.: Good Init Year Contract Rate: $22.00 /$/SF/YR Construction Desc.: Concrete Block Effective Lease Rate: $22.00 /$/SF/YR Showroom Area: 15,200 Lease Commencement: 04/01/2013 Total Parking Spaces: 46 Lease Expiration: 03/31/2018 Park. Ratio 1000 SF GLA: 2.99 Term of Lease: 60 months Park. Ratio 1000 SF GBA: 2.99 Space Type: Retail Air‐Conditioning Type: To be determined Escalations: Fixed Percentage Shape: Rectangular Verified with: Mert Meeker, MBM Properties Topography: Level Frontage Desc.: SE Morrison & Alder & SE 14th Transaction Reliability: Confirmed & 15th avenues Leased Area: 1,510 Bldg. to Land Ratio FAR: 0.38 Zoning Code: CS Lease Expense Information DraftSource of Land Info.: Other Lease Reimburse. Type: Triple Net Comments Retail strip center was remodeled in 2004. There are 46 Improvement and Site Data parking stalls on‐site or a ratio of 3:1,000. MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan New 5‐year lease of the former wine shop starts at $22 NNN Statistical Area with NNNs of $6.00/SF. Rent increases 2% annually in Yrs. 2 and 3, then increases 3% annually in Yrs. 4 and 5. Lease was Legal/Tax/Parcel ID: R150635; TL 11800 signed near the end of 12/2012. Tenant had 90 days for their build‐out after receiving the space from the landlord. Most of GBA‐SF: 15,400 this time will be used for the tenant's build‐out but the tenant GLA‐SF: 15,400 may get 15 days of free rent. Tenant received TI's of $15,000 Acres(Usable/Gross): 0.92/0.92 or $9.93/SF. The broker Land‐SF(Usable/Gross): 40,000/40,000

Morrison Place Retail Lease Profile

Comments (Cont'd) stated that since this building has parking ratio of 3:1,000 that this is worth a couple of dollars per SF compared to buildings that do not have on‐site parking. (LDK, 3/11/13)

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Morrison Place Retail Lease Profile

Location & Property Identification Property Name: DRD Productions Building ‐ 2 Story Retail

Address: 720 SE. Hawthorne City/State/Zip: Portland, OR 97214 County: Multnomah Submarket: Eastside Market Orientation: Urban

Lat./Long.: 45.512241/‐122.658173 IRR Event ID (586198)

Acres(Gross): 0.08 Lease Information Land‐SF(Gross): 3,500 Year Built: Lessee: Analog Bar & Restaurant DRD 1957 Productions) No. of Buildings/Stories: 1/2 Bldg. to Land Ratio FAR: 2.00 Init Year Contract Rate: $18.00 /$/SF/YR Source of Land Info.: Other Effective Lease Rate: $18.00 /$/SF/YR Lease Commencement: 10/01/2012 Comments Lease Expiration: 06/30/2018 Term of Lease: Two‐story building has a seismic upgrades and a new sprinkler 69 months system with 2 restrooms per floor. There is plumbing for 2 bars Space Type: Retail and a kitchen and is set up for a hood system for restaurant Escalations: Fixed Percentage use. Occupancy for 223 on ground floor and 27 on the 2nd floor. Verified with: Kia Hartley, Urban Works (503‐228‐3080) New 69‐month lease of ground floor second generation Transaction Reliability: Confirmed bar/restaurant space includes 90 days of build‐out time and 6 Leased Area: 3,500 months of free rent in lieu of TI's. Space already had a hood Full Building Lease: and plumbing for bar restaurant use. Starting rent is $18 NNN Yes with 3% annual escalations. NNNs are $3.60. Tenant also Draftleased upstairs for a recording studio in a separate agreement. Lease Expense Information (LDK, 1/21/14) Lease Reimburse. Type: Triple Net Estimated Annual Property $3.60 Expenses ($/SF):

Improvement and Site Data MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan Statistical Area GBA‐SF: 7,000 GLA‐SF: 7,000

DRD Productions Building ‐ 2 Story Retail Retail Lease Profile

Location & Property Identification

Property Name: FuBonn Shopping Center Sub‐Property Type: Shopping Center, Neighborhood Center

Address: 2850 SE. 82nd Ave. City/State/Zip: Portland, OR 97266 County: Multnomah Submarket: 122nd/Gresham Market Orientation: Urban

Lat./Long.: 45.501790/‐122.578656 IRR Event ID (703852)

Bldg. to Land Ratio FAR: 0.28 Lease Information Source of Land Info.: Other Lessee: O'Sushi Restaurant Init Year Contract Rate: $20.50 /$/SF/YR Comments Effective Lease Rate: $20.50 /$/SF/YR FuBonn Shopping Center is anchored by the 37,000 SF FuBonn Asian Supermarket. Parking ratio is 4:1,000. Lease Commencement: 06/01/2012 Lease Expiration: New 65‐month lease of restaurant space at 2838 SE 82nd Ave. 10/31/2017 starts at $20.50 NNN with 3% annual escalations. Tenant took Term of Lease: 65 months space "as is" and received 5 months of free rent. The space Space Type: Retail had already been built out as restaurant use. The restaurant is Escalations: a unit in a two‐unit pad building at the northwest corner of the Fixed Percentage center. Confirmed with broker by Mark Basse of Mueller & Co. Verified with: Chris Schneider, NBS appraisers. Transaction Reliability: Verified Leased Area: 1,800

Lease Expense Information Lease Reimburse. Type: Triple Net Draft Improvement and Site Data MSA: Portland‐Vancouver‐Beaverto n, OR‐WA Metropolitan Statistical Area GBA‐SF: 91,576 GLA‐SF: 91,576 Acres(Gross): 7.50 Land‐SF(Gross): 326,700 Year Built: 1963 Most Recent Renovation: 2005

FuBonn Shopping Center Summary of Comparable Rentals ‐ General Retail Lease Term Lease Property Information Description Tenant SF Start (Mos.) Rent/SF Type 1Eastport Plaza Yr Blt. 1960Accident 1,250 Apr‐14 60 $19.00 NNN 3858 SE. 82nd Avenue Stories: 1 & Portland GLA: 450,000 Wellness Comments: New 5‐year lease starts at $19 NNN with 3% annual increases. TI's were only stated to be "some work".

2Lombard Mixed‐Use Yr Blt. 2014Alberta 1,847 Dec‐14 124 $18.00 NNN N. Lombard St. and N. Stories: 2 EyeCare Portland GLA: 12,926 Comments: New 124‐month lease was signed 12/2013 and is to start 12/1/14. Starting rent is $18 NNN with 3% annual increases. It is unknown if the extra 4 mos. are for build‐out or for free rent. Tenant only to receive warm shell. 3University Station Yr Blt. 1970PDX 1,005 May‐14 38 $11.00 NNN 5215‐5221 N. Lombard St. Stories: 1 Beverage Portland GLA: 5,970 LLC Comments: A new 38 month lease by PDX Beverage LLC ‐ a craft beer pub. The initial rate is $11/SF/YR NNN and then increases to $12 in year two and $12.49 in year three. The landlord did not offer a tenant improvement allowance, but did give two months of free rent (utilities and CAMs were still charged during these months). The tenant did spend a significant amount on their own building out (amount unknown).

4 Cully Retail Yr Blt. 1929State 950 May‐13 60 $16.50 NNN 4803‐4831 NE. Fremont Stories: 2 Farm Portland GLA: 20,000 Insurance Comments: The tenant took the space as‐is and the space was in fair condition. The tenant repainted and re‐ carpeted at their own expense. Escalations were 5% per year and they received two months of free rent. 5 Jarrett Street Lofts Yr Blt. 2013 State 1,420 Jul‐13 62 $18.00 Mod. 5826 N. Interstate Ave. Stories: – Farm Portland GLA: 1,774 Insurance Comments: New 62‐month lease starts with rent of $18 modified gross with 3% annual increases. NNN starting rent equivalent is $14. Tenant to receive TI's of $32/SF from cold shell condition with HVAC installed. Tenant also received 2 months of free rent in the first and last month of the term. Tenant has the option to expand into the remianing 354 SF of the adjacent commercialDraft space with 6 months notice at a market rate. One free garage parking space is provided with a second leased at $50 per month.