March 17, 2017 To: Related Commercial Portfolio Ltd. RE: Value

Douglas H. Larson Executive Director

1290 Av enue of the Americas New York, NY 10104 Direct +1 212 841 5051 Fax +1 212 479 1838 [email protected] cushmanwakefield.com

March 17, 2017

To:

Related Commercial Portfolio Ltd.

RE: Va lue Appraisa ls – Consent to include within Financial Statements

We hereby give our full consent to Related Commercial Portfolio Ltd. (the "Company") to the inclusion of our Appraisal Report dated March 9, 2017 (Effective date – December 31, 2016) regarding Bronx Terminal Market, in its entirety, within the Company's Financial Statements for December 31, 2016, to be published by the Company no later than March 31, 2017, and any ensuing financial statements, and within any other filing to be filed and/or disclosed by the Company to the Israel Securities Authority and/or to be published by the Company.

In addition, we hereby give our full consent to the inclusion of a copy of this letter within the Company's Financial Statements and other filings as aforesaid.

Yours sincerely,

Douglas H. Larson Executive Director

No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions, imposed by our principals.

APPRAISAL OF REAL PROPERTY Gateway Center at Bronx Terminal Market 4-Story Retail Power Center 658 River Avenue Bronx, Bronx County, NY 10451

IN AN APPRAISAL REPORT

As of December 31, 2016

Prepared For:

Related Commercial Portfolio, LTD. c/o Related Companies 60 Columbus Circle New York, NY 10023

Prepared By:

Cushman & Wakefield, Inc. Valuation & Advisory 1290 Avenue of the Americas, 9th Floor New York, NY 10104-6178 C&W File ID: 17-12002-900125-005

1290 Avenue of the Americas, 9th Floor NEW YORK, NY 10104-6178 Tel +1 212 841 7500 cushmanwakefield.com

March 09, 2017

Mr. David Zussman Related Commercial Portfolio, LTD. c/o Related Companies 60 Columbus Circle New York, NY 10023

Re: Appraisal of Real Property In An Appraisal Report

Gateway Center at Bronx Terminal Market 4-Story Retail Power Center 658 River Avenue Bronx, Bronx County, NY 10451

C&W File ID: 17-12002-900125-005

Dear Mr. Zussman:

In fulfillment of our agreement as outlined in the Letter of Engagement, we are pleased to transmit our appraisal of the above property in An Appraisal Report which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice (USPAP). In accordance with USPAP, the use of this report is restricted to the client only.

The appraisal report is intended to provide an opinion of the market value of the leasehold estate of the subject property for an internal review by the client. This report is not intended for any other use. This report was prepared for the exclusive use of Related Commercial Portfolio, LTD. c/o Related Companies and their participant lenders are the intended users.

Client: Mr. David Zussman Related Commercial Portfolio, LTD. c/o Related Companies 60 Columbus Circle New York, NY 10023

Intended User: Related Commercial Portfolio, LTD. c/o Related Companies and their participant lenders, are the only Intended Users.

Intended Use: IFRS financial statements in connection with a potential corporate financing.

CUSHMAN & WAKEFIELD 1 Mr. David Zussman Cushman & Wakefield, Inc. Related Commercial Portfolio, LTD. c/o Related Companies March 9, 2017 Page 2

Identification of the Real Estate: Gateway Center at Bronx Terminal Market 4-Story Retail Power Center 658 River Avenue Bronx, NY 10451

Current Use: Gateway Center at Bronx Terminal Market is a 4-story retail power center that contains a total of 912,333 square feet of gross leasable area (GLA) and a 6-level parking garage with 2,575 spaces. The subject property also includes two 1-story retail/commercial buildings. The subject improvements are situated on a 16.8-acre site. The subject retail center is anchored by Target, BJ’s Wholesale Club, and Home Depot, which have leased 443,500 square feet or 48.6 percent of the property on a long-term basis.

The subject property has been ground leased on a net basis for a base term of 49 years through September 13, 2055. In addition, the ground lease can be extended for five additional 10-year renewal terms extending the lease through September 13, 2105.

Highest and Best Use It is our opinion that the Highest and Best Use of the entire site as if vacant is a multi-level power center constructed to the highest feasible (As If Vacant): density permissible.

Highest and Best Use It is our opinion that the Highest and Best Use of the site as improved is as it is currently improved. (As Improved):

Type of Value: Market Value (defined later in this report)

Current Ownership:

Sales History: To the best of our knowledge, the property has not transferred within the past three years.

Real Property Interest Valued: Leasehold Estate

Date of Inspection: December 20, 2016

Effective Date of Value: December 31, 2016

Date of Report: March 09, 2017

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Mr. David Zussman Cushman & Wakefield, Inc. Related Commercial Portfolio, LTD. c/o Related Companies March 9, 2017 Page 3

Extraordinary Assumptions: This appraisal employs the following extraordinary assumptions: 1) The subject site is ground leased until September 13, 2055, with 5 consecutive 10 year renewal options by BTM Development Partners LLC (c/o Related Companies) from the City of New York. As per Section 12.1 of the ground lease, the tenant is responsible for transaction payments in the event of a sale or financing. Since our market value estimate assumes a sale of the property as of the date of value, we have adjusted our market value estimate by the defined 7.5 percent of net sale proceeds obligated to be distributed to the landlord (New York City). We have been provided with the information which details the anticipated transaction costs related to a potential sale of the subject property. Some of the deductions defined in the ground lease in calculating the transaction payment apply to both refinancing or a sale. Therefore, we have utilized the applicable deductions which were made available by the ownership in calculating the Net Sale Proceeds and the Transaction Payment. We have assumed that the information provided by the owner regarding the allowable deductions is accurate. If the provided information is not accurate, we reserve the right to amend our value conclusion.

Hypothetical Conditions: This appraisal does not employ any hypothetical conditions.

Valuation Indices:

Sales Comparison Approach: $595,000,000

Income Capitalization Approach: $613,000,000

Opinion of Value: $613,000,000 (Market Value As Is on December 31, 2016)

Exposure & Marketing Time: 6 to 9 months

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Mr. David Zussman Cushman & Wakefield, Inc. Related Commercial Portfolio, LTD. c/o Related Companies March 9, 2017 Page 4

Market Value Definition

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 best interests;  A reasonable time is allowed for exposure in the open market;  Payment is made in terms of cash in United States 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: (12 C.F.R. Part 34.42(g) Federal Register 34696, August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994)

Scope of Work

Scope of work is the type and extent of research and analyses involved in an assignment.1 To determine the appropriate scope of work for the assignment, we considered the intended use of the appraisal, the needs of the user, the relevant characteristics of the subject property, and other pertinent factors. Our concluded scope of work is summarized below, and in some instances, additional scope details are included in the appropriate sections of the report:

Research

 We inspected the exterior and interior of the property and its environs. Physical information on the subject was obtained from the property owner’s representative, public records, and/or third-party sources.  Regional economic and demographic trends, as well as the specifics of the subject’s local area were investigated. Data on the local and regional property market (supply and demand trends, rent levels, etc.) was also obtained. This process was based on interviews with regional and/or local market participants, primary research, available published data, and other various resources.  Other relevant data was collected, verified, and analyzed. Comparable property data was obtained from various sources (public records, third-party data-reporting services, etc.) and confirmed with a party to the transaction (buyer, seller, broker, owner, tenant, etc.) wherever possible. It is, however, sometimes necessary to rely on other sources deemed reliable, such as data reporting services. Analysis

 Based upon the subject property characteristics, prevailing market dynamics, and other information, we developed an opinion of the property’s Highest and Best Use.  We analyzed the data gathered using generally accepted appraisal methodology to arrive at a probable value indication via each applicable approach to value.  The results of each valuation approach are considered and reconciled into a reasonable value estimate. This report is intended to comply with the reporting requirements outlined under USPAP for a An Appraisal Report

1 Uniform Standards of Professional Appraisal Practice. 2016-2017 edition. Washington, DC: The Appraisal Foundation 2012.

CUSHMAN & WAKEFIELD 4

Mr. David Zussman Cushman & Wakefield, Inc. Related Commercial Portfolio, LTD. c/o Related Companies March 9, 2017 Page 5

Cushman & Wakefield, Inc. has an internal Quality Control Oversight Program. This Program mandates a “second read” of all appraisals. Assignments prepared and signed solely by designated members (MAIs) are read by another MAI who is not participating in the assignment. Assignments prepared, in whole or in part, by non-designated appraisers require MAI participation, Quality Control Oversight, and signature.

Report Option Description

USPAP identifies two written report options: Appraisal Report and Restricted Appraisal Report. This document is prepared as an Appraisal Report in accordance with USPAP guidelines. The terms “describe,” summarize,” and “state” connote different levels of detail, with “describe” as the most comprehensive approach and “state” as the least detailed. As such, the following provides specific descriptions about the level of detail and explanation included within the report:

 States the real estate and/or personal property that is the subject of the appraisal, including physical, economic, and other characteristics that are relevant  States the type and definition of value and its source  States the Scope of Work used to develop the appraisal  States the information analyzed, the appraisal methods used, and the reasoning supporting the analyses and opinions; explains the exclusion of any valuation approaches  States the use of the property as of the valuation date  States the rationale for the Highest and Best Use opinion (if included)

Appraisal Methodology

There are three generally accepted approaches to developing an opinion of value: Cost, Sales Comparison and Income Capitalization. In appraisal practice, an approach to value is included or eliminated based on its applicability to the property type being valued and the quality of information available. The reliability of each approach depends on the availability and comparability of market data as well as the motivation and thinking of purchasers.

This appraisal employs the Sales Comparison Approach and the Income Capitalization Approach. Based on our analysis and knowledge of the subject property type and relevant investor profiles, it is our opinion that these approaches would be considered applicable and/or necessary for market participants. Typical purchasers do not generally rely on the Cost Approach when purchasing a property such as the subject of this report. Therefore, we have not utilized the Cost Approach to develop an opinion of market value.

CUSHMAN & WAKEFIELD 5 GATEWAY CENTER AT BRONX TERMINAL MARKET ASSUMPTIONS AND LIMITING CONDITIONS

Assumptions and Limiting Conditions

"Report" means the appraisal or consulting report and conclusions stated therein, to which these Assumptions and Limiting Conditions are annexed. "Property" means the subject of the Report. "C&W" means Cushman & Wakefield, Inc. or its subsidiary that issued the Report. "Appraiser(s)" means the employee(s) of C&W who prepared and signed the Report. The Report has been made subject to the following assumptions and limiting conditions:  No opinion is intended to be expressed and no responsibility is assumed for the legal description or for any matters that are legal in nature or require legal expertise or specialized knowledge beyond that of a real estate appraiser. Title to the Property is assumed to be good and marketable and the Property is assumed to be free and clear of all liens unless otherwise stated. No survey of the Property was undertaken.  The information contained in the Report or upon which the Report is based has been gathered from sources the Appraiser assumes to be reliable and accurate. The owner of the Property may have provided some of such information. Neither the Appraiser nor C&W shall be responsible for the accuracy or completeness of such information, including the correctness of estimates, opinions, dimensions, sketches, exhibits and factual matters. Any authorized user of the Report is obligated to bring to the attention of C&W any inaccuracies or errors that it believes are contained in the Report.  The opinions are only as of the date stated in the Report. Changes since that date in external and market factors or in the Property itself can significantly affect the conclusions in the Report.  The Report is to be used in whole and not in part. No part of the Report shall be used in conjunction with any other analyses. Publication of the Report or any portion thereof without the prior written consent of C&W is prohibited. Reference to the Appraisal Institute or to the MAI designation is prohibited. Except as may be otherwise stated in the letter of engagement, the Report may not be used by any person(s) other than the party(ies) to whom it is addressed or for purposes other than that for which it was prepared. No part of the Report shall be conveyed to the public through advertising, or used in any sales, promotion, offering or SEC material without C&W's prior written consent. Any authorized user(s) of this Report who provides a copy to, or permits reliance thereon by, any person or entity not authorized by C&W in writing to use or rely thereon, hereby agrees to indemnify and hold C&W, its affiliates and their respective shareholders, directors, officers and employees, harmless from and against all damages, expenses, claims and costs, including attorneys' fees, incurred in investigating and defending any claim arising from or in any way connected to the use of, or reliance upon, the Report by any such unauthorized person(s) or entity(ies).  Except as may be otherwise stated in the letter of engagement, the Appraiser shall not be required to give testimony in any court or administrative proceeding relating to the Property or the Appraisal.  The Report assumes (a) responsible ownership and competent management of the Property; (b) there are no hidden or unapparent conditions of the Property, subsoil or structures that render the Property more or less valuable (no responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them); (c) full compliance with all applicable federal, state and local zoning and environmental regulations and laws, unless noncompliance is stated, defined and considered in the Report; and (d) all required licenses, certificates of occupancy and other governmental consents have been or can be obtained and renewed for any use on which the value opinion contained in the Report is based.  The physical condition of the improvements considered by the Report is based on visual inspection by the Appraiser or other person identified in the Report. C&W assumes no responsibility for the soundness of structural components or for the condition of mechanical equipment, plumbing or electrical components.  The forecasted potential gross income referred to in the Report may be based on lease summaries provided by the owner or third parties. The Report assumes no responsibility for the authenticity or completeness of lease information provided by others. C&W recommends that legal advice be obtained regarding the interpretation of lease provisions and the contractual rights of parties.

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GATEWAY CENTER AT BRONX TERMINAL MARKET ASSUMPTIONS AND LIMITING CONDITIONS

 The forecasts of income and expenses are not predictions of the future. Rather, they are the Appraiser's best opinions of current market thinking on future income and expenses. The Appraiser and C&W make no warranty or representation that these forecasts will materialize. The real estate market is constantly fluctuating and changing. It is not the Appraiser's task to predict or in any way warrant the conditions of a future real estate market; the Appraiser can only reflect what the investment community, as of the date of the Report, envisages for the future in terms of rental rates, expenses, and supply and demand.  Unless otherwise stated in the Report, the existence of potentially hazardous or toxic materials that may have been used in the construction or maintenance of the improvements or may be located at or about the Property was not considered in arriving at the opinion of value. These materials (such as formaldehyde foam insulation, asbestos insulation and other potentially hazardous materials) may adversely affect the value of the Property. The Appraisers are not qualified to detect such substances. C&W recommends that an environmental expert be employed to determine the impact of these matters on the opinion of value.  Unless otherwise stated in the Report, compliance with the requirements of the Americans with Disabilities Act of 1990 (ADA) has not been considered in arriving at the opinion of value. Failure to comply with the requirements of the ADA may adversely affect the value of the Property. C&W recommends that an expert in this field be employed to determine the compliance of the Property with the requirements of the ADA and the impact of these matters on the opinion of value.  If the Report is submitted to a lender or investor with the prior approval of C&W, such party should consider this Report as only one factor, together with its independent investment considerations and underwriting criteria, in its overall investment decision. Such lender or investor is specifically cautioned to understand all Extraordinary Assumptions and Hypothetical Conditions and the Assumptions and Limiting Conditions incorporated in this Report.  In the event of a claim against C&W or its affiliates or their respective officers or employees or the Appraisers in connection with or in any way relating to this Report or this engagement, the maximum damages recoverable shall be the amount of the monies actually collected by C&W or its affiliates for this Report and under no circumstances shall any claim for consequential damages be made.  If the Report is referred to or included in any offering material or prospectus, the Report shall be deemed referred to or included for informational purposes only and C&W, its employees and the Appraiser have no liability to such recipients. C&W disclaims any and all liability to any party other than the party that retained C&W to prepare the Report.  Unless otherwise noted, we were not given a soil report to review. However, we assume that the soil’s load-bearing capacity is sufficient to support existing and/or proposed structure(s). We did not observe any evidence to the contrary during our physical inspection of the property. Drainage appears to be adequate.  Unless otherwise noted, we were not given a title report to review. We do not know of any easements, encroachments, or restrictions that would adversely affect the site’s use. However, we recommend a title search to determine whether any adverse conditions exist.  Unless otherwise noted, we were not given a wetlands survey to review. If subsequent engineering data reveal the presence of regulated wetlands, it could materially affect property value. We recommend a wetlands survey by a professional engineer with expertise in this field.  Unless otherwise noted, we observed no evidence of toxic or hazardous substances during our inspection of the site. However, we are not trained to perform technical environmental inspections and recommend the hiring of a professional engineer with expertise in this field.  Unless otherwise noted, we did not inspect the roof nor did we make a detailed inspection of the mechanical systems. The appraisers are not qualified to render an opinion regarding the adequacy or condition of these components. The client is urged to retain an expert in this field if detailed information is needed.  By use of this Report each party that uses this Report agrees to be bound by all of the Assumptions and Limiting Conditions, Hypothetical Conditions and Extraordinary Assumptions stated herein.

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GATEWAY CENTER AT BRONX TERMINAL MARKET CERTIFICATION OF APPRAISAL

Certification of Appraisal

We certify that, to the best of our knowledge and belief:  The statements of fact contained in this report are true and correct.  The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions.  We have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved.  We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.  Our engagement in this assignment was not contingent upon developing or reporting predetermined results.  Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.  The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice.  The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.  John A. Katinos, MAI, James P. Stuckey Jr. and Charles R. Looney did make a personal inspection of the property that is the subject of this report.  We have performed prior services involving the subject property within the three-year period immediately preceding the acceptance of the assignment.  Charles R. Looney has provided significant real property appraisal assistance to the persons signing this report.  As of the date of this report, John A. Katinos, MAI has completed the continuing education program for Designated Members of the Appraisal Institute.  As of the date of this report, James P. Stuckey Jr. has completed all the Standards and Ethics Education Requirements for Candidates/Practicing Affiliates of the Appraisal Institute.

______John A. Katinos, MAI James P. Stuckey Jr. Executive Director Director NY Certified General Appraiser NY Appraiser Assistant License No. 46000028780 License No. 48000049048 [email protected] [email protected] 212-841-5061 Office Direct 212-698-5633 Office Direct 212-479-1820 Fax 212-479-8325 Fax

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GATEWAY CENTER AT BRONX TERMINAL MARKET ADDENDA CONTENTS

Addenda Contents

Addendum A: Client Satisfaction Survey Addendum B: Valuation Methodology Addendum C: Comparable Improved Retail Sales Addendum D: Ground Rent Calculation Addendum E: Qualification of the Appraisers

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GATEWAY CENTER AT BRONX TERMINAL MARKET ADDENDA CONTENTS

Addendum A: Client Satisfaction Survey

Survey Link: https://www.surveymonkey.com/r/vaclientsatisfaction?c=16-12002-903393-001 C&W File ID: 17-12002-900125-005 Fax Option: (716) 852-0890

1. Based on the scope and complexity of the assignment, please rate the development of the appraisal relative to the adequacy and relevance of the data, the appropriateness of the techniques used, and the reasonableness of the analyses, opinions, and conclusions:

__ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

2. Please rate the appraisal report on clarity, attention to detail, and the extent to which it was presentable to your internal/external users without revisions:

__ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

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GATEWAY CENTER AT BRONX TERMINAL MARKET ADDENDA CONTENTS

3. The appraiser communicated effectively by listening to your concerns, showed a sense of urgency in responding, and provided convincing support of his/her conclusions:

__ Not Applicable __ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

4. The report was on time as agreed, or was received within an acceptable time frame if unforeseen factors occurred after the engagement:

__ Yes __ No

Comments:______

5. Please rate your overall satisfaction relative to cost, timing, and quality:

__ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

6. Any additional comments or suggestions you feel our National Quality Control Committee should know?

______

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GATEWAY CENTER AT BRONX TERMINAL MARKET ADDENDA CONTENTS

7. Would you like a representative of our National Quality Control Committee to contact you?

__ Yes __ No

Name & Phone (if contact is desired): ______

Contact Information: Scott Schafer Managing Director, National Quality Control (716) 852-7500, ext. 121

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GATEWAY CENTER AT BRONX TERMINAL MARKET INCOME CAPITALIZATION APPROACH

Addendum B: Valuation Methodology

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GATEWAY CENTER AT BRONX TERMINAL MARKET INCOME CAPITALIZATION APPROACH

INCOME CAPITALIZATION APPROACH Methodology

The Income Capitalization Approach determines the value of a property based on the anticipated economic benefits. The principle of “anticipation” is essential to this approach, which recognizes the relationship between an asset’s potential future income and its value. To value the anticipated economic benefits of a property, potential income and expenses must be projected, and the most appropriate capitalization method must be selected.

The most common methods of converting net income into value are Direct Capitalization and Discounted Cash Flow. In direct capitalization, net operating income is divided by an overall capitalization rate to indicate an opinion of market value. In the discounted cash flow method, anticipated future cash flows and a reversionary value are discounted to an opinion of net present value at a chosen yield rate (internal rate of return).

Investors acquiring this type of asset will typically look at year one returns but must also consider long-term strategies. Hence, depending on certain factors, each of the income approach methods has merit. Considering all of the aspects that would influence an investment decision in the subject property, we conclude that both the Direct Capitalization Method and Discounted Cash Flow Methods are appropriate in this assignment.

Potential Gross Income

Potential gross income (income before operating and fixed expenses) is determined by existing contract rents as well as economic rents obtainable for the subject property’s vacant space and space at lease turnover. This income is estimated by forecasting the earning potential of the property under prevailing and foreseeable market conditions. Appropriate allowances for vacancy and operating expenses, based on market conditions, are then deducted from the potential gross income or gross earnings. This process results in an estimate of net monetary benefits to ownership, which can then be capitalized into value.

The total potential gross revenues generated by a retail property are composed of a number of distinct elements: minimum rent determined by lease agreement; additional overage rent based upon a percentage of retail sales; reimbursement of certain expenses incurred in the ownership and operation of the real estate; and other miscellaneous revenues. Minimum base rent represents a legal contract establishing a return to investors in the real estate, while the passing-on of certain expenses to tenants serves to maintain this return in an era of continually rising costs of operation. Additional rent based upon a percentage of retail sales at the subject serves to preserve the purchasing power of the residual income to an equity investor over time.

MINIMUM RENT

Minimum rents produced by the subject property are derived from that paid by the various tenant types. The projection utilized in this analysis is based upon the existing roll and our projected leasing schedule in-place as of the date of appraisal, together with our assumptions as to the absorption of the vacant space, market rent growth, and renewal/turnover probability.

The rental income that an asset such as the subject property will generate for an investor is analyzed as to its quality, quantity, and durability. The quality and probable duration of income will affect the amount of risk that an informed investor may expect over the property's useful life. Segregation of the income stream along these lines allows us to control the variables related to the center's forecasted performance with greater accuracy. Each tenant type lends itself to a specific weighting of these variables as the risk associated with each varies.

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GATEWAY CENTER AT BRONX TERMINAL MARKET INCOME CAPITALIZATION APPROACH

Minimum rents forecasted at the subject property are essentially derived from various tenant categories, namely specialty tenant revenues consisting of anchor, junior anchor, and in-line space. In our investigation and analysis of the marketplace, we have surveyed, and ascertained where possible, rent levels being commanded by competing centers. However, it should be recognized that large retail centers are generally considered to be separate entities by virtue of age and design, accessibility, visibility, tenant mix, and the size and purchasing power of their trade area. Consequently, the best measure of minimum rental income is its actual rent roll leasing schedule. As such, our analysis of recently negotiated leases for tenants at the subject provides important insight into perceived market rent levels for the property. Inasmuch as a tenant's ability to pay rent is based upon expected sales achievement, the level of negotiated rents is directly related to the individual tenant's perception of their expected performance at the center.

SPACE SUMMARY & OCCUPANCY STATUS

The following is a summary of the leased and vacant space within the subject property. The subject property contains 912,333 square feet of space, of which is 99.3 percent occupied by 29 tenants.

CURRENT SPACE SUMMARY & OCCUPANCY STATUS SPACE SUMMARY SPACE COUNT Tenant Category Occ. SF Vct. SF Total SF Occupancy Occupied Vacant Total Retail C 21,817 - 21,817 100.0% 8 0 8 River Ave-B 10,634 - 10,634 100.0% 2 0 2 Retail F 19,881 6,063 25,944 76.6% 4 1 5 Retail E 10,131 - 10,131 100.0% 1 0 1 Retail P 20,351 - 20,351 100.0% 2 0 2 Anchor 443,500 - 443,500 100.0% 3 0 3 Jr. Anchor 379,956 - 379,956 100.0% 9 0 9 Total 906,270 6,063 912,333 99.3% 29 1 30

Compiled by Cushman & Wakefield, Inc. There a total of 30 tenant spaces, of which 29 are leased. The chart summarizes the leased level based on the leases in place as of the date of value.

Minimum rents forecasted at the subject property are derived from various tenant categories. We have grouped the tenants into categories that enable us to make like-kind comparisons to other subject leases, which ultimately allow us to make a meaningful comparison of each tenant category to the appropriate set of comparable rents. As an aid to the reader, we preface our analysis of the subject’s leases with a discussion of their lease structure.

LEASE STRUCTURE

A lease typically defines the responsibilities of landlord and tenant with regard to the payment of operating expenses. The Appraisal Institute advises that the following basic distinctions can be made:

 Gross Lease - landlord pays all operating expenses.  Modified Lease - landlord and tenant share the cost of operating expenses.  Net Lease - tenant pays all operating expenses. These terms do not always mean the same thing in all markets, and there are many variations to these common terms. As each market has different nomenclature, it is important to understand the terms that are used locally, and the resulting expense obligations that apply to both tenant and landlord.

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GATEWAY CENTER AT BRONX TERMINAL MARKET INCOME CAPITALIZATION APPROACH

expense can be pro-rata, derived by formula, or negotiated. Below we discuss the lease structures found in the local market, as well as the structure of the leases within the subject property.

LOCAL MARKET LEASE STRUCTURE

In the subject’s market, leases for retail centers similar to the subject property type are typically written on a net basis. Under this lease structure, the tenant is obligated to pay its pro rata share of real estate taxes, and common area maintenance (CAM) charges.

Lease terms are generally between 10 and 25 years in length. Some leases were leased for 5 years, with renewal options that could extend the lease term to 10 or 15 years. Rent increase schedules vary, but typically include rent escalations of 3.0 percent per annum, or 10.0 percent every 5 years.

SUBJECT PROPERTY LEASE STRUCTURE

The existing leases at the subject property are written on a net basis. Under this lease structure, the majority of the tenants are responsible for their pro rata share of real estate taxes, and common area maintenance (CAM) charges excluding management. In addition, the remaining tenants are responsible for their pro rata share of real estate taxes, and expense caps with regards to their share of common area maintenance (CAM) charges.

At the subject property, lease terms are generally between 10 and 25 years in length.

ATTAINED RENT SCHEDULE

The attained base rent listed for each tenant equals current monthly base rent annualized, excluding any future contractual rent increases, except for the contracted leases which start after the analysis start date, where the initial monthly base rent is annualized.

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RENT ROLL SCHEDULE MARKET RENT As Of Value Date: Dec-16 Market Rent Start End Area Contract Contract Tenant Name Suite Date Date ( SF ) Rent/Year Rent/SF Rent/SF Annualized

Retail C AT&T C5a May-09 Aug-19 3,412 $337,788 $99.00 $100.00 $341,200 BTM Footwear C1 Feb-10 May-20 4,585 $238,416 $52.00 $100.00 $458,500 Chase C3 Nov-13 Nov-23 2,030 $130,848 $64.46 $100.00 $203,000 GameStop C5b Aug-09 Aug-19 1,518 $150,288 $99.00 $100.00 $151,800 GNC C2 Oct-09 Sep-19 1,980 $196,020 $99.00 $100.00 $198,000 Payless C4 Aug-09 Aug-24 3,053 $268,668 $88.00 $100.00 $305,300 Sprint C6 Oct-11 Nov-21 2,511 $193,344 $77.00 $100.00 $251,100 T-Mobile C7 May-09 Jun-19 2,728 $270,072 $99.00 $100.00 $272,800 8 tenants subtotal 21,817 $1,785,444 $81.84 $100.00 $2,181,700

River Ave-B Sketchers D1 Jun-10 Sep-20 8,741 $218,520 $25.00 $45.00 $393,345 TMobile B1b Mar-11 Jun-21 1,893 $113,964 $60.20 $45.00 $85,185 2 tenants subtotal 10,634 $332,484 $31.27 $45.00 $478,530

Retail F Applebee's F1g Mar-09 Jul-29 6,661 $512,892 $77.00 $55.00 $366,355 CUNY F1c May-14 Jul-27 8,145 $407,112 $49.98 $55.00 $447,975 Marisco Centro F1a Mar-09 Feb-20 3,700 $240,504 $65.00 $55.00 $203,500 Subway F1b Dec-09 Dec-19 1,375 $122,736 $89.26 $55.00 $75,625 4 tenants subtotal 19,881 $1,283,244 $64.55 $55.00 $1,093,455

Retail E CUNY E1-3 May-14 Jul-27 10,131 $506,364 $49.98 $50.00 $506,550 1 tenant subtotal 10,131 $506,364 $49.98 $50.00 $506,550

Retail P CUNY P1b May-12 Jul-27 8,351 $502,068 $60.12 $60.00 $501,060 Jaba Furniture P1a Oct-10 Sep-20 12,000 $528,000 $44.00 $60.00 $720,000 2 tenants subtotal 20,351 $1,030,068 $50.62 $60.00 $1,221,060

Anchor BJ's Warehouse B1a Aug-09 Aug-29 130,099 $4,878,708 $37.50 $40.00 $5,203,960 Home Depot A1a Feb-09 Feb-34 124,955 $5,498,016 $44.00 $40.00 $4,998,200 Target A3a Oct-08 Oct-33 188,446 $1,043,988 $5.54 $40.00 $7,537,840 3 tenants subtotal 443,500 $11,420,712 $25.75 $40.00 $17,740,000

Junior Anchor Bed, Bath & Beyond B3b Sep-09 Jan-25 33,877 $1,253,448 $37.00 $45.00 $1,524,465 Best Buy B3c Aug-09 Jan-20 52,086 $2,578,260 $49.50 $45.00 $2,343,870 Marshalls B3a Aug-09 Aug-19 37,401 $1,346,436 $36.00 $45.00 $1,683,045 Michaels A2b Jan-14 Sep-23 23,204 $719,328 $31.00 $45.00 $1,044,180 Raymour & Flanigan B2b Apr-09 Oct-24 46,814 $2,059,812 $44.00 $45.00 $2,106,630 Chuck E Cheese A23 Jul-13 Dec-28 19,834 $654,528 $33.00 $32.00 $634,688 Burlington Coat Factory A23 Jan-12 Jan-28 74,329 $1,932,552 $26.00 $35.00 $2,601,515 Staples A1b Jun-09 Jun-24 15,490 $775,272 $50.05 $45.00 $697,050 Toys/Babies R Us B2a Aug-09 Jan-20 76,921 $1,730,724 $22.50 $45.00 $3,461,445 7 tenants subtotal 379,956 $13,050,360 $34.35 $42.37 $16,096,888

GRAND-TOTALS 29 tenants in occupancy 906,270 $29,408,676 $32.45 $43.38 $39,318,183

Note: Attained rent equals current rent annualized for twelve months, and it excludes contractual rent increases Compiled by Cushman & Wakefield, Inc.

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A total of 29 tenants currently lease space within the property. The average rent for the existing tenants is $32.45 per square foot, which is below current market rent levels. It should be noted that Target paid the developer $46,394,000, which reflected a 75 percent pre-payment of their entire contract rent throughout the 25-year lease term, in addition to the rent payments detailed in the lease agreement. The grand-totals exhibited in the attained rent schedule for contract rent do not incorporate lease-up or downtime provisions. Hence, the grand-totals might differ from the projections shown later in this section.

ANALYSIS OF COMPARABLE ANCHOR RETAIL RENTS

The following table summarizes rental activity for comparable anchor space in competing buildings in the market.

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MAJOR ANCHOR RENT COMPARABLES PROPERTY INFORMATION LEASE INFORMATION

Property Name NO Address, City, State CENTER GLA BUILT YEAR TENANT NAME Tenant Type LEASE DATE SIZE (NRA) (yrs.) TERM INITIAL RENT/SF RENT STEPS LEASE TYPE 1 CityPoint Tower 700,000 2015 Century 21 Department Store 7/15 108,855 15 $27.27 10% every 60 Net 1 Dekalb Avenue months Brooklyn, NY

Gateway Center II 600,646 2014 Burlington Coat Discount Apparel 10/14 73,864 15 $34.00 10% every 60 Net 2 339-579 Gateway Drive Factory months Brooklyn, NY

Gateway Center II 600,646 2014 Shop Rite Supermarket 8/14 89,774 20 $27.50 10% every 60 Net 3 339-579 Gateway Drive months Brooklyn, NY

Riverdale Crossings 159,037 2014 BJ Wholesale Wholesale 8/13 107,000 20 $39.00 10% every 60 Net 4 184-190 West 237th Street months Bronx, NY

Gateway Center @ Bronx Terminal 912,333 2005 Home Depot Bix Box Store 2/09 124,955 25 $45.00 10% every 60 Net 5 Market months 658 River Avenue Bronx, NY Rego Park Center 926,180 2010 Costco Wholesale 6/09 136,451 25 $36.30 9% Every 3 Yrs Net 6 61-01 Junction Boulevard Queens, NY

Rego Park Center 926,180 2010 Century 21 Department Store 5/09 140,537 20 $31.08 5% Yr. 2; 3% Inc. Net 7 61-01 Junction Boulevard Annually Queens, NY

STATISTICS Low 159,037 2005 2/09 73,864 15 $27.27 High 926,180 2015 7/15 140,537 25 $45.00 Average 689,289 2012 4/12 111,634 20 $34.31 Compiled by Cushman & Wakefield, Inc.

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DISCUSSION OF COMPARABLE ANCHOR TENANT RENTS

We have analyzed anchor leases negotiated in competitive buildings in the marketplace. The comparables range in size from 74,864 square feet to 140,537 square feet. These are all located in existing multi-level retail centers similar in class to the subject, and in competitive retail markets within New York City. The comparable leases have terms ranging from 15 to 25 years. The comparables exhibit a range of rents from $27.27 to $45.00 per square foot, with an average of $34.31 per square foot. Rent escalation clauses vary, with most having percentage increases ranging from 5 to 10 percent every 3 to 5 years. All of the comparables are net leases in which the tenant is required to pay its pro-rata share of real estate taxes and CAM expenses.

The subject’s anchor tenant contract rents ranged between $37.50 and $44.00 per square foot, excluding the Target prepaid rent. Exclusive of the Target space, the subject’s anchor tenants are leased within current market rent levels.

CONCLUSION OF MARKET RENT FOR ANCHOR RETAIL SPACE

Based on the leasing activity in the marketplace, the subject’s anchor space, and our analysis of the comparables, we have concluded the following market rent range for the subject’s anchor retail tenants:

CONCLUSION OF MAJOR ANCHOR SPACE MARKET RENT RANGES TENANT MARKET LEASE LEASE TYPE RENT INCREASE CATEGORY RENT TERM

Major Anchor $40 to $45 20 Net 10% every 5 years

ANALYSIS OF COMPARABLE JR. ANCHOR RETAIL RENTS

The following table summarizes rental activity for comparable junior anchor space in competing buildings in the market.

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JUNIOR ANCHOR RETAIL RENT COMPARABLES PROPERTY INFO LEASE INFORMATION

Property Name NO. Address, City, State CENTER GLA BUILT YEAR TENANT NAME LEASE DATE SIZE (NRA) (yrs.) TERM INITIAL RENT/SF RENT STEPS TYPE LEASE 1 Gateway Center 615,000 2014 Aldi 2015 16,839 15 $50.00 10% every 60 Net 330-579 Gateway Drive months Brooklyn, NY

2 Queens Place Mall 123,333 2009 Macy's 2015 24,300 5 $60.00 10% every 60 Net 88-01 Queens Boulevard "Backstage" months Queens, NY

3 Retail Building 100,000 2015 Flushing Buffet 2015 16,000 10 $45.00 10% every 60 Net 37-02 Main Street months Queens, NY

4East River Plaza 531,921 2009 Planet Fitness 2015 14,655 15 $44.00 10% every 60 Net 545 East 116th Street months Upper Manhattan, NY

5 Gateway Center 615,000 2014 Shope Rite 2014 16,839 20 $27.50 Annual Increases Net 339-579 Gateway Drive Brooklyn, NY

6 Gateway Center at Bronx Terminal Market 434,272 2009 Michaels 2014 23,204 8 $31.00 Annual Increases Net 658 River Drive Bronx, NY

7 Gateway Center 615,000 2014 Nordstrom Rack 2014 32,792 12 $40.00 Annual Increases Net 339-579 Gateway Drive Brooklyn, NY

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JUNIOR ANCHOR RETAIL RENT COMPARABLES PROPERTY INFO LEASE INFORMATION

Property Name NO. Address, City, State CENTER GLA YEAR BUILT TENANT NAME LEASE DATE SIZE (NRA) (yrs.) TERM INITIAL RENT/SF RENT STEPS TYPE LEASE 8 Gateway Center 615,000 2014 PC Richards & 2014 33,500 12 $34.50 Annual Increases Net 339-579 Gateway Drive Son Brooklyn, NY

9 Gateway Center 615,000 2014 Raymour and 2014 31,479 13 $46.00 Annual Increases Net 339-579 Gateway Drive Flanigan Brooklyn, NY

10 Gateway Center 615,000 2014 TJ Maxx 2014 32,960 10 $39.90 10% every 60 Net 339-579 Gateway Drive months Brooklyn, NY

11 Gateway Center @ Bronx Terminal 434,272 2009 Chuck E 2013 19,834 15 $33.00 10% every 60 Net Center Cheese months 568 Exterior Street Bronx, NY

12 East River Plaza 531,921 2009 Burlington Coat 2013 54,927 17 $36.00 10% every 60 Net 545 East 116th Street Factory months Upper Manhattan, NY

13 Throggs Neck Shopping Center 123,333 2009 TJ Maxx 2014 28,417 11 $39.00 10% every 60 Net 815 Hutchinson River Parkway months Bronx, NY

STATISTICS Low 100,000 2009 2013 14,655 5 $27.50

High 615,000 2015 2015 54,927 20 $60.00

Average 459,158 2012 2014 26,596 13 $40.45 Compiled by Cushman & Wakefield, Inc.

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DISCUSSION OF COMPARABLE JUNIOR ANCHOR RENTS

We have analyzed recent leases negotiated in competitive buildings in the marketplace. The comparables range in size from 14,655 square feet to 54,927 square feet. These are all located in existing multi-level retail centers similar in class to the subject, and in competitive retail markets within New York City. The comparable leases have terms ranging from 5 to 20 years. The comparables exhibit a range of rents from $27.50 to $40.45 per square foot, with an average of $41.00 per square foot. Rent escalation clauses vary, with most having annual percentage increases ranging from 5 to 10 percent every 5 years, or annual increases. All of the comparables are net leases in which the tenant is required to pay its pro-rata share of real estate taxes and CAM expenses. The subject junior anchor contract rents ranged between $22.50 and $50.05 per square foot, depending on the size, and location. The average rent for the junior anchor space is $34.45 per square foot. Based on our review of the market, the average rent for the subject’s junior anchor tenants are below current market rent levels. CONCLUSION OF MARKET RENT FOR JUNIOR ANCHOR RETAIL SPACE

Based on the leasing activity in the marketplace, the subject junior anchor spaces configuration, location, and layout, and our analysis of the comparable leases, we have concluded the following market rent ranges for the subject’s junior anchor retail tenants:

CONCLUSION OF JUNIOR ANCHOR MARKET RENT RANGES TENANT MARKET LEASE LEASE TYPE RENT INCREASE CATEGORY RENT TERM

Jr. Anchor $32 to $50 15 Net 10% every 5 years

ANALYSIS OF COMPARABLE IN-LINE RETAIL RENTS

The following table summarizes rental activity for comparable in-line space in competing retail centers in the market.

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INLINE RETAIL RENT COMPARABLES PROPERTY INFORMATION LEASE INFORMATION

Property Name NO. Address, City, State CENTER GLA YEAR BUILT TENANT NAME LEASE DATE SIZE(NRA) (yrs.) TERM INITIAL RENT/SF RENT STEPS TYPE LEASE 1 Throggs Neck Shopping Center 285,299 2015 Kudos 2015 2,050 10 $53.00 Annual Increases Net 815 Hutchinson River Parkway Bronx, NY 2 Throggs Neck Shopping Center 286,299 2015 Bevmart 2015 1,645 10 $52.00 Annual Increases Net 815 Hutchinson River Parkway Bronx, NY 3 Throggs Neck Shopping Center 285,299 2015 T-Mobile 2015 1,984 10 $110.00 Annual Increases Net 815 Hutchinson River Parkway Bronx, NY 4 Throggs Neck Shopping Center 285,299 2015 Subway 2015 950 10 $100.00 Annual Increases Net 815 Hutchinson River Parkway Bronx, NY

5 Parkchester Condominiums 300,000 1974 JP Morgan Chase 2015 3,595 10 $91.16 Annual Increases Net 1386 Metropolitan Avenue Bronx, NY

6 Jackson Heights Shopping Center 39,405 1960 Vision Works 2015 1,791 10 $90.00 Annual Increases Net 7507 31st Avenue Queens, NY 7 Jackson Heights Shopping Center 39,405 1960 Santander Bank 2014 1,470 10 $62.00 Annual Increases Net 7507 31st Avenue Queens, NY 8Bay Plaza Mall 780,000 2014 Zinburger 2014 6,306 15 $80.00 Annual Increases Net 200 Baychester Avenue Bronx, NY 9 Gateway Center II 615,000 2014 Bath & Body Works 2014 3,500 12 $85.00 10% increase every 5 Net 339-579 Gateway Drive years Brooklyn, NY 10 Throggs Neck Shopping Center 285,299 2015 Famous Footwear 2014 5,547 10 $52.00 Annual Increases Net 815 Hutchinson River Parkway Bronx, NY 11 Atlantic Terminal 400,000 2010 Verizon Wireless 2014 2,195 5 $101.04 Annual Increases Net 139 Flatbush Avenue Brooklyn, NY 12 Atlantic Terminal 400,000 2010 Coldstone Creamery 2014 1,090 5 $115.08 Annual Increases Net 139 Flatbush Avenue Brooklyn, NY 13 Atlantic Terminal 400,000 2010 The Children's Place 2014 5,500 5 $81.64 Annual Increases Net 139 Flatbush Avenue Brooklyn, NY

14 Shops at Atlas Park 60,000 2006 Claire's 2013 1,322 5 $95.00 Annual IncreasesNet 8000 Cooper Avenue Queens, NY

15 Queens Place 455,000 2001 Coldstone Creamery 2013 1,300 10 $89.06 Annual Increases$18 88-01 Queens Boulevard Queens, NY

16 Atlantic Terminal 400,000 2010 Pandora 2012 962 10 $125.00 10% increase every 5 Net 139 Flatbush Avenue years Brooklyn, NY

STATISTICS Low 39,405 1960 2012 950 5 $52.00

High 780,000 2015 2015 6,306 15 $125.00

Average 332,269 2003 2014 2,575 9 $86.37 Compiled by Cushman & Wakefield, Inc. DISCUSSION OF COMPARABLE IN-LINE RENTS

We have analyzed recent leases negotiated in competitive properties in the marketplace. The comparables range in size from 950 square feet to 6,306 square feet. These are all located in retail centers similar in class to the subject. The comparable leases have terms ranging from 5 to 15 years. The comparables exhibit a range of rents from $52.00 to $125.00 per square foot, with an average of $86.37 per square foot. Rent escalation clauses vary, with most having percentage increases ranging from 5 to 10 percent every 5 years, or annual increases. All of the comparable are net leases in which the tenant is required to pay pro-rata share of real estate taxes and CAM expenses.

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The subject in-line tenant contract rents ranged between $25.00 and $99.00 per square foot, depending on the size, and location. Based on our review of the market, the average rent for the subject’s in-line tenants are below current market rent levels.

CONCLUSION OF MARKET RENT FOR IN-LINE RETAIL SPACE

Based on leasing activity in the marketplace, the subject in-line spaces configuration, location, and layout, along with our analysis of the comparable leases, we have concluded the following market rents for the subject’s in-line retail tenants:

CONCLUSION OF IN-LINE RETAIL SPACE MARKET RENTS TENANT MARKET LEASE LEASE TYPE RENT INCREASE CATEGORY RENT TERM

In-line - Retail B $45.00 15 10% every 5 years Net

In-line - Retail C $100.00 15 Net 10% every 5 years

In-line - Retail E $50.00 10 Net 10% every 5 years

In-line - Retail F $50.00- $90.00 10 Net 10% every 5 years

In-line - Retail P $60.00 10 Net 10% every 5 years Considering the subject’s construction, location, size, and condition, we are of the opinion that the existing contract rents are within current market parameters as exhibited by comparable retail properties and market parameters.

CONCLUSION OF MARKET RENTS FOR THE SUBJECT RETAIL SPACE

After considering all of the above, relative to the subject’s position in the market, we have developed a weighted average rental rate of approximately $43.38 per square foot (exclusive of the Target tenant space) for the entire property based upon a relative weighting of tenant space by size, location, and visibility within the center. The existing base contract rent (exclusive of the Target tenant space) reflects and average contract rent of $39.51 per square foot. Considering the subject’s construction, location, size, and condition, we are of the opinion that the existing contract rents below current market levels as exhibited by comparable retail spaces.

When a property is acquired with leases that are at or close to market rent levels, the level of risk involved with the investment is generally low. However, the potential increase to the income stream in this scenario is typically limited, which tends to normalize the investment parameters of participants for these types of properties.

When a property has attained rent levels that are below market, the early returns are generally limited but there is greater potential for the income stream to increase as the below market leases rollover. There is less risk involved with tenants with below market leases, as they have a greater ability to pay the lower rent than they would market level rent. Buyers of properties with below market leases are often entering a lower risk investment with greater upside to their eventual income earning potential, resulting in overall rates that tend to be lower than normal.

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Properties that are encumbered by leases with average rents that are significantly above market have increased risk in several key areas. When a property has an average rent that is above market, there is increased risk of default, slow payment or lack of payment by those tenants in that category. In addition, at some point, the above market leases will expire, at which time the spaces will be re-leased at market levels. When this occurs, there is a decline in rental revenue for the property, which many times leads to a declining net income stream. When this is the case, investors will require a higher initial return to offset the declining income stream, and to guard against the heightened risk of tenant defaults.

Considering the subject’s construction, location, size, and condition, we are of the opinion that the existing contract rents are within current market parameters as exhibited by comparable retail properties and market parameters.

MARKET RENT SYNOPSIS

The following chart summarizes our market rent conclusion for each tenant category in the subject property.

LEASING ASSUMPTIONS

TENANT CATEGORY Retail In-Line Anchor Jr. Anchor WEIGHTED ITEMS Renewal Probability 70.00% 70.00% 70.00% Market Rent- Net $45-100 $40 to $45 $32-$50 Months Vacant 6.00 6.00 6.00 Tenant Improvements New Leases $0.00 $0.00 $0.00 Renewal Leases $0.00 $0.00 $0.00

Leasing Commissions New Leases 3.50% 3.50% 3.50% Renewal Leases 1.75% 1.75% 1.75% Free Rent New Leases 3 6 6 Renewal Leases 1 3 3

NON-WEIGHTED ITEMS Lease Term (years) 15 15 10 Lease Type (reimbursements) Gross Gross Gross

Contract Rent Increase Projection 10% Every 60 months 10% Every 60 months 10% Every 60 months

Compiled by Cushman & Wakefield, Inc. LEASE EXPIRATIONS The lease expiration schedule is an important investment consideration. As leases rollover, the landlord will be required to negotiate a renewal lease with the existing tenant, or to secure a new tenant for the space. The projected lease rollover is exhibited on the following chart:

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It should be noted that the majority of the tenants that have leases expiring within the next 10 years, also have several below market renewal options, which will extend their terms and mitigate the majority of the expiration risk. Therefore, we have projected a 10-year analysis period.

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Tenant Renewal Options

Exhibited on the following chart is the renewal option schedule of the respective tenants that possess renewal options during our 10 year projection period. Moreover, the chart exhibits the market and option rent at the time of the renewal option. We have modeled the cash flow to exercise the renewal options that are below market levels.

LEASE OPTION SUMMARY Option Option Option Initial Option Market Market Suite Start End Term Area Option Rent Rent at Rent PSF Tenant Name Number Date Date Years SF Rent PSF Option at Option AT&T C5a Sep-19 Aug-24 5.0 3,412 $368,803 $108.09 $361,979 $106.09 Bed, Bath & Beyond B3b Feb-25 Jan-30 5.0 33,877 $1,543,617 $45.57 $1,931,147 $57.00 Best Buy B3c Feb-20 Jan-25 5.0 52,086 $2,873,653 $55.17 $2,561,210 $49.17 BTM Footwear C1 Jun-20 May-25 5.0 4,585 $275,100 $60.00 $501,015 $109.27 Burlington Coat Factory A23 Feb-28 Jan-33 5.0 74,329 $2,338,390 $31.46 $3,601,105 $48.45 Chuck E Cheese A23 Jan-29 Dec-33 5.0 19,834 $791,972 $39.93 $904,913 $45.62 GNC C2 Oct-19 Sep-24 5.0 1,980 $215,622 $108.90 $210,058 $106.09 Jaba Furniture P1a Oct-20 Sep-25 5.0 12,000 $580,800 $48.40 $786,763 $65.56 Marisco Centro F1a Mar-20 Feb-25 5.0 3,700 $264,550 $71.50 $222,370 $60.10 Marshalls B3a Sep-19 Aug-24 5.0 37,401 $1,365,519 $36.51 $1,785,542 $47.74 Payless C4 Sep-24 Aug-29 5.0 3,053 $323,380 $105.92 $375,480 $122.99 Raymour & Flanigan B2b Nov-24 Oct-29 5.0 46,814 $2,492,377 $53.24 $2,590,889 $55.34 Sketchers D1 Oct-20 Sep-25 5.0 8,741 $509,425 $58.28 $429,819 $49.17 Sprint C6 Dec-21 Nov-26 5.0 2,511 $212,682 $84.70 $282,615 $112.55 Staples A1b Jul-24 Jun-29 5.0 15,490 $938,849 $60.61 $857,284 $55.34 Subway F1b Jan-20 Dec-24 5.0 1,375 $134,998 $98.18 $82,637 $60.10 T-Mobile C7 Jul-19 Jun-34 15.0 2,728 $313,720 $115.00 $289,414 $106.09 Toys/Babies R Us B2a Feb-20 Jan-25 5.0 76,921 $1,946,101 $25.30 $3,782,414 $49.17 Compiled by Cushman & Wakefield, Inc. EXPENSE REIMBURSEMENTS

We have made a projection of the future expense reimbursement revenue based on comparable properties. We have also considered the contractual terms of the existing leases, together with our assumptions related to future leasing. The existing and future tenants will be responsible for their pro-rata share of real estate taxes and common area maintenance (CAM) expenses, excluding management fees.

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VACANCY AND COLLECTION LOSS

The majority of the subject is net leased on a long term basis with limited near term rollover. Furthermore, 53.0 percent of the subject retail space (484,324 SF) is net leased to credit tenants. As a result of the subject occupancy and strong tenancy, we have excluded the collection loss factor for the anchor and credit tenants.

CREDIT TENANT SUMMARY

Due to their investment grade credit rating and low credit risk, the following credit tenants have been excluded from this collection loss deduction:

CREDIT TENANT SUMMARY Tenant Name Rating (1) Outlook Rating Agency Size Investment Grade Tenants Home Depot A3 Stable Moody's 124,955 Bed, Bath & beyond BBB+ Positive Standard & Poors 33,877 Marshall's (TJX Companies) A3 Stable Moody's 37,401 Best Buy Inc. Baa2 Negative Moody's 52,086 Staples, Inc. Baa2 Stable Moody's 15,490 Target A2 Stable Moody's 188,446 CUNY A2 Stable Moody's 26,627 Chase A3 Stable Moody's 2,030 AT&T A3 Stable Moody's 3,412

ANALYSIS Number of Investment Grade Credit Tenants 9 Total Credit Tenant NRA 484,324 % of Total Space 53.0% Compiled by Cushman & Wakefield, Inc. (1) Senior unsecured debt The subject property has a total of 9 credit tenants occupying a total of 53 percent of the subject's space. Given this comparison, the investment rates selected will be slightly more aggressive than market indicators.

REVENUE & EXPENSE ANALYSIS

We have developed an opinion of the property’s annual income and operating expenses after reviewing the historical expenses, the 2016 forecasted expenses and the and 2017 budget provided by ownership and the operating performance of similar properties. We analyzed each item of expense and developed an opinion regarding what an informed investor would consider typical. The historical revenue and expenses along with developer’s budget for the current year and our opinion of the subject’s income and expenses are presented on the following chart, followed by an analysis of subject property’s revenue and expense.

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SUMMARY OF INCOME & EXPENSE ANALYSIS

Actual 2014 Actual 2015 2016 Reforecast 2017 Budget 2017 C&W Forecast

Total Per SF Total Per SF Total Per SF Total Per SF Total Per SF POTENTIAL GROSS REVENUE Rental Income $29,846,092 $32.71 $30,100,360 $32.99 $29,618,066 $32.46 $29,802,133 $32.67 $29,733,587 $32.59 Additional Rent Income $53,880 $0.06 $53,880 $0.06 $53,880 $0.06 $53,880 $0.06 $53,880 $0.06 Percentage Rent Income $7,382 $0.01 $82,396 $0.09 $179,045 $0.20 $169,477 $0.19 $227,032 $0.25 CAM Income $8,616,696 $9.44 $8,519,010 $9.34 $8,742,121 $9.58 $8,373,808 $9.18 $10,207,106 $11.19 Utility Income $503,576 $0.55 $699,203 $0.77 $464,634 $0.51 $613,891 $0.67 $0 $0.00 Parking $4,116,966 $4.51 $4,661,201 $5.11 $4,609,866 $5.05 $3,874,029 $4.25 $3,800,000 $4.17 Other Miscellaneous Income $215,907 $0.24 $212,491 $0.23 $272,436 $0.30 $219,116 $0.24 $275,000 $0.30 Real Estate Tax Income $1,440,033 $1.58 $1,549,558 $1.70 $1,644,745 $1.80 $1,612,365 $1.77 $1,623,957 $1.78 TOTAL POTENTIAL GROSS REVENUE $44,800,532 $49.11 $45,878,099 $50.29 $45,584,793 $49.97 $44,718,701 $49.02 $45,920,562 $50.33 Vacancy and Collection Loss $0.00 $0.00 $0 $0.00 $0 $0.00 $0 $0.00 ($810,942) -$0.89 EFFECTIVE GROSS REVENUE $44,800,532 $49.11 $45,878,099 $50.29 $45,584,793 $49.97 $44,718,701 $49.02 $45,109,620 $49.44

OPERATING EXPENSES Insurance $461,523 $0.51 $483,409 $0.53 $457,524 $0.50 $424,879 $0.47 $525,000 $0.58 CAM $5,815,361 $6.37 $4,771,370 $5.23 $4,270,677 $4.68 $4,322,481 $4.74 $6,000,000 $6.58 Shared HVAC $413,926 $0.45 $500,571 $0.55 $519,464 $0.57 $572,597 $0.63 $500,000 $0.55 Direct Billed- Utilities $582,177 $0.64 $909,480 $1.00 $700,897 $0.77 $704,871 $0.77 $650,000 $0.71 Security $1,515,827 $1.66 $1,817,581 $1.99 $1,900,355 $2.08 $1,914,576 $2.10 $2,100,000 $2.30 General and Administrative $68,667 $0.08 $545,829 $0.60 $621,420 $0.68 $594,246 $0.65 $150,000 $0.16 Parking $0 $0.00 $617,086 $0.68 $696,651 $0.76 $0 $0.00 $0 $0.00 Legal & Professional Fees $424,582 $0.47 $378,726 $0.42 $229,566 $0.25 $201,600 $0.22 $200,000 $0.22 Miscellaneous /Non Recoverable Expenses* $396,632 $0.43 $1,645,902 $1.80 $1,108,846 $1.22 $1,110,874 $1.22 $400,000 $0.44 Management Fees $1,737,873 $1.90 $1,903,878 $2.09 $1,993,171 $2.18 $1,973,428 $2.16 $1,353,289 $1.48 Subtotal $11,416,568 $12.51 $13,573,833 $14.88 $12,498,571 $13.70 $11,819,552 $12.96 $11,878,289 $13.02

Ground Rent $395,190 $0.43 $650,747 $0.71 $652,102 $0.71 $649,322 $0.71 $623,096 $0.68 Real Estate Taxes* $1,479,869 $1.62 $1,693,003 $1.86 $1,757,995 $1.93 $1,813,558 $1.99 $1,787,031 $1.96

TOTAL EXPENSES $13,291,627 $14.57 $15,917,583 $17.45 $14,908,668 $16.34 $14,282,432 $15.65 $14,288,416 $15.66

NET OPERATING INCOME $31,508,905 $34.54 $29,960,516 $32.84 $30,676,126 $33.62 $30,436,269 $33.36 $30,821,204 $33.78

*** 2013, 2014 and 2015 Non recoverable expense include signage, construction management fees and miscellaneous expenses.

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EXPENSE GROWTH RATE

Our cash flow projections assume that operating expenses and tenant improvement costs will grow at the rate of 3.00 percent per year during the holding period. Real estate taxes are projected to increase 3.0 percent per annum after the ICAP abatement expires.

RESERVES FOR REPLACEMENTS

It is customary and prudent to deduct an annual sum from effective gross income to establish a reserve for replacing short-lived items throughout the building. These costs may include roof repair, and HVAC upgrades. Our projection of $0.20 per square foot of gross building area is a reasonable amount to cover the cost of capital expenditures over the course of the investment-holding period.

Investment Considerations Overview

The U.S. economy faced some very difficult headwinds in the first half of 2016, mostly coming from overseas. In particular, the financial markets were rocked at various points this year by several factors including China’s decelerating economy, weakness in the emerging markets caused by a long-term slump in commodities, and more recently, “Brexit”. Throughout all of these challenges, the U.S. economy remained resilient. The international volatility was a contributing factor to the temporary slowdown in U.S. investment sales early in the year but after three consecutive quarters of declining investment, gross private investment rebounded by a 3.1 percent annualized rate in the third quarter of 2016. This, in addition to steady business confidence, provides a preview of next year, which is anticipated to be the first year in which business investment adds to headline GDP year-over-year. The U.S. economy demonstrated promising growth through third quarter 2016 behind the highest annualized growth rate in real GDP in two years, a significant increase in consumer spending and improved investment activity quarter- over-quarter. The U.S. labor market has demonstrated the strength of the nation’s economy with the addition of 621,700 jobs in third quarter, a 25.6 percent increase over second quarter’s nonfarm payroll growth. Hourly average wages grew at the strongest rate since mid-2009 and with steady unemployment rates and continued pressure on wages, the U.S. labor market will continue to expand. Although the transition to a new administration breeds uncertainty for the U.S. economy, growth is expected to continue close to its post-recovery average next year, with potential upside risk as a result of new policy proposals.

The primary concerns in the first eight weeks of the year were a slowdown in the Chinese economy and declining oil and commodity prices, which stoked fears that an end was in sight for the current expansion, have mostly subsided. China’s economy posted positive GDP growth in early 2016 and oil and commodity prices firmed and have generally trended upwards since February. There have been first quarter dips in U.S. economic activity for the last several years, and none of them have amounted to more than a temporary blip. For 2016, worries about China and oil prices caused stock markets around the world to stumble. Looking back, real U.S. GDP growth has been weak or negative in the first quarter in each of the last three years. In third quarter, U.S. GDP growth registered a healthy 2.9 percent growth and, despite weak performance early in the year, we can continue to expect moderate growth for the U.S. economy.

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its past communication, did not vote to raise the federal funds rate in January, March or April, signaling its willingness to wait for the effects of the global headwinds to dissipate before further normalization. Indicators pointed towards a rate hike in June 2016 but was delayed, as uncertainty around global prospects, “Brexit” and the U.S. presidential election persist, the FOMC has refrained from raising the target federal funds rate, and the path to normalization has been delayed yet again. At its November 2016 meeting, the FOMC maintained the target range for the deferral funds rate at one quarter to one half percent as they wait for further evidence of progress, fortified by the third quarter gains in the U.S. labor market and economic activity. Since the December 2015 meeting of the FOMC, inflation has increased but remains below the Committee’s two percent long-run objective. Many assume the FOMC will raise rates again by one quarter of a percentage point at its next meeting in December 2016.

Current Economic Conditions

The evidence of a stronger economy in 2014 prompted the FOMC to announce that the Central Bank would gradually reduce its purchases of long-term Treasury securities and mortgage backed securities widely referred to as quantitative easing. During 2014, the FOMC reduced the amount of bonds purchased each month, indicating the Central Bank’s confidence that the economy does not require the additional stimulation that this policy was providing. A statement released after the final FOMC meeting of 2014 was the clearest indication that the Central Bank would begin to raise interest rates in 2015. However, the FOMC’s mid-year 2015 statement made it clear that the key driver of the decision to raise short-term interest rates, the condition of the labor market, was a bit soft to start the year. As a result of the soft market, the FOMC further delayed their decision to hike interest rates. On the other hand, positive signs from the last three labor market reports of 2015, combined with wage growth information, resulted in the Federal Reserve using its last meeting of the year to raise rates by year-end 2015.

The shift to higher interest rates was anticipated and signaled by the FOMC in its press releases for over 18 months. In the December 2015 release, the FOMC followed through on its promise and raised rates 25 basis points, largely a symbolic move but the first step in monetary policy normalization. As previously mentioned, the Committee did not vote to raise rates any further in November 2016. The Committee bases the timing and size of its adjustments on its objectives of maximum employment and an inflation of two percent. In its hesitation to raise rates, the Committee considered labor market conditions, indicators of inflation pressures and expectations and readings on financial and international developments. In the near term, the Committee expects to gradually increase the federal funds rate but the timing and size of such increases will depend on the economic outlook moving forward.

The following graph displays historical and projected U.S. Real GDP percent change (annualized on a quarterly basis) from first quarter 2009 through third quarter 2019 (red bar highlights the most recent quarter-16Q3):

Notable concerns regarding current economic conditions are as follows:

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 In third quarter 2016, the U.S. real GDP increased at an annual rate of 2.9 according to the advance estimate of the Bureau of Economic Analysis (BEA) at a 1.5 percentage point increase over the second quarter rate. The increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, federal government spending and non-residential fixed investment that were partly offset by negative contributions from residential fixed investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.  Employment growth through the third quarter of 2016 accelerated from second quarter, adding 621,700 new jobs at a 25.6 percent quarter-over-quarter increase. As of October, the Bureau of Labor Statistics reported than in 2016 employment growth has averaged 181,000 per month, trailing the 2015 pace of 229,000 monthly additions. Figures dwindled in October 2016, when nonfarm payroll employment rose by only 161,000, but preliminary evidence indicates a slight rebound through the close of the year.  Labor markets do continue to tighten. In third quarter, unemployment held steady at 4.9 percent put pressure on wages has remained strong and elevated average hourly wages by 2.7 percent. Continued wage growth over the coming months should boost income and spending at a faster pace through the close of the year. As the unemployment rate approaches a range traditionally associated with full employment the upward pressure on wages will intensify.  Cushman & Wakefield Research continues to anticipate a moderate growth path for the national economy, maintaining its post-recovery average over the next year with potential acceleration as a result of new policies. With the volatility of the Chinese economy and “Brexit” slowing slightly, it’s anticipated that business investment will improve and contribute positively to stronger economic growth through the close of 2016 but more impressively in 2017. U.S. Real Estate Market Implications

The commercial real estate volume picked up in 2012, a pace that continued through 2015. According to Real Capital Analytics, 23,015 properties traded hands in 2013 for a total transaction volume of approximately $338.9 billion. Commercial real estate sales volume remained strong throughout 2014, as transaction volume totaled $401.9 billion. Property prices at an aggregate level surpassed the 2007 peak and cap rates in many sectors are at all-time lows. As volume and price levels headed into uncharted territory, investors reassessed risk and took their foot off of the gas towards the end of 2014. Through 2015, 24,921 properties changed hands as volume reached $509.4 billion in 2015, up significantly from year-end 2014 when the total was nearly $402.0 billion. This level marks 2015 as the second highest investment volume over time behind the peak of $538.8 billion in activity seen in 2007. Through third quarter 2016 U.S. commercial property sales fell 2.0 percent year-over-year in the third consecutive quarter of declines in transaction volume. Although the commercial real estate market continued to fall through third quarter, it has decelerated from the 17.0 percent year-over-year decline reported in first quarter 2016.

There are several important signs for the commercial real estate sector. Employment in the key office-using sectors is expected to grow, but at a decelerating rate. After increasing by 800,000 jobs in 2015, office-using employment is forecast to rise by nearly 600,000 payrolls in 2016 and in 2017, by almost 500,000 jobs. Consistent with the view is the gradual deceleration in demand for office space. Warehouse/distribution space will continue to benefit from empowered consumers and from the continued growth of eCommerce; at the same time, flex/R&D space will benefit from solid gains in high-tech employment sectors. Retail demand will largely remain focused on Class A product and/or new space. The move to less risk in the CRE industry is observed in the apartment sector, the leading sector, which has continued to post gains in deal volume. The slowdown in momentum in the first half of the year was notable but unable to upset the current economic expansion. According to PricewaterhouseCoopers Real Estate Investor Survey for third quarter 2016, many investors fear the commercial real estate industry’s ability to sustain its current cycle and are bracing for a downturn in light of potential peak. Through the near term, investor focus will

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be on maintaining values but will depend on economic conditions and whether the nation’s economy will tip into downturn.

With uncertainty on financing and cap rates still at record low levels, potential buyers were simply more hesitant to step up to transactions as they were a year earlier. According to the PricewaterhouseCoopers Real Estate Investor Survey for third quarter 2016, the average cap rate decreased in 19 survey markets, held steady in 8 and increased in 7. The quarterly shifts remain very diverse like they have been in the past few quarters with a higher number of markets now reporting declines and smaller number posting increases in their average cap rates. The magnitude of these shifts are very similar to what was reported a year ago. This quarter’s average overall cap rate shifts suggest varied viewpoints by investors across the industry and though investors hold a positive outlook for the near term, most expect overall cap rates to hold steady over the next six months. At 7.21 percent, the Houston office market’s overall cap rate is its highest since the close of 2014 and the majority of investors predict that the market’s overall cap rates will continue to rise. The best performing markets in third quarter were the San Francisco office market, the Manhattan office market and the national warehouse market, which all experienced significant cap rate drops and continue to be top attractions for investors. Overall, CBD markets reported lower cap rates than their suburban counterparts and are considered lower investment risks. Even though surveyed investors hold a positive outlook for the commercial real estate industry for the near term, they are mindful of the potential for interest rate increases, market corrections and the need for caution.

The following graph compares national transaction volume by property between 2004 and third quarter 2016:

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as December. Commercial real estate markets have fared well: vacancy rates are falling, rent growth is positive and, for some asset classes, reaching a cyclical peak, and leasing velocity remains healthy. Third quarter activity has instilled uncertainty in some investors as they brace for a potential downturn but a slowdown in sales volume and pricing may be in line with a broader return to a more sustainable investment environment.

INVESTMENT CONSIDERATIONS

The factors listed below have been considered in our valuation of this property and will have an impact on our selection of all investor rates.

INVESTMENT CONSIDERATIONS Attained Rents Versus Market: The subject's attained rents (exclusive of expense contributions) are within market levels. Given this comparison, the investment rates selected will be in line with market indicators.

NOI Growth: The subject's NOI is expected to grow 1.35 percent per annum from the first year of the analysis through the holding period. This rate of growth is considered acceptable.

Lease Expiration Exposure: Within the first five years of the analysis a total of 23.11 percent of the total net rentable area is scheduled to rollover. Extending to a ten-year period, a total of 119.96 percent of the space is scheduled to expire. The peak expiration occurs in year 13, when a total of 241,498 square feet is scheduled to expire. This is considered a moderate rollover exposure within this market.

Real Estate Market Trends: Real estate market trends have a significant bearing on the value of real property. The real estate market in which the subject property is located is currently improving.

Tenant Quality: The quality of a property's tenant base is an important factor that is scrutinized by investors prior to acquiring real property. The quality of the subject's tenant roster is considered to be good. Property Rating: After considering all of the physical characteristics of the subject, we have concluded that this property has an overall rating that is excellent, when measured against other properties in this marketplace.

Location Rating: After considering all of the locational aspects of the subject, including regional and local accessibility as well as overall visibility, we have concluded that the location of this property is good.

Overall Investment Appeal: There are many factors that are considered prior to investing in this type of property. After considering all of these factors, we conclude that this property has good overall investment appeal.

Furthermore, we have researched the investment rates from combatable sales utilized within the comparable sales section of this report.

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COMPARABLE RETAIL CENTER SALES SUMMARY

No. Sale Date Name and Location Price Price/NRA OAR Forecast IRR Terminal OAR 1 Mar-16 Country Club Plaza $660,000,000 $518.87 4.70% ------2 Jan-164750 Queens B Place d $159,000,000 $717.29 5.25% 14 7.00% 6.00% 3 Jan-1688 Harlem 01 Q Center B l d $104,000,000 $823.87 4.48% 10 7.00% 5.50% 4 Jun-15 Shops @ Skyview Center $400,000,000 $786.14 4.70% 10 6.50% 5.50% 5 Oct-1540 Riverdale 24 C llCrossings P i t $133,000,000 $835.76 5.30% 14 6.25% 5.25% 6 Jun-16184 Shops 190 @ W Columbus t 237th Center St t $1,040,000,000 $2,255.57 4.14% 13 6.00% 5.00% 7 Oct-14 Shops at Grand Avenue $56,000,000 $560.08 5.00% ------74 25 G d A Low $56,000,000 $518.87 4.14% 10 6.00% 5.00% High $1,040,000,000 $2,255.57 5.30% 14 7.00% 6.00% Average $364,571,429 $928.22 4.80% 12 6.55% 5.45% Compiled by Cushman & Wakefield, Inc. It should be noted that the internal rate of return and terminal overall capitalization rate information reflected in the above chart was extracted from cash flows prepared by Cushman & Wakefield, Inc. from appraisals they prepared of these properties. This information is not provided in publications, but is a technique which only Cushman & Wakefield, Inc. employs in their analysis of New York City retail center sales from an appraisal standpoint. The Cushman & Wakefield, Inc. internal rate of return and terminal overall capitalization rate information are confirmed directly from the owners of the respective properties when the properties were appraised.

INVESTOR SURVEY TRENDS

Historic trends in real estate investment help us understand the current and future direction of the market. Investors’ return requirements are a benchmark by which real estate assets are bought and sold. The following graph shows the historic trends for the subject’s asset class spanning a period of four years as reported in the PwC Real Estate Investor Survey published by PricewaterhouseCoopers.

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INVESTOR SURVEY HISTORICAL RESULTS Survey: PwC End Quarter: Property Type: NATIONAL STRIP SHOPPING CENTER 4Q 16 Quarter 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 OAR (average) 7.04% 6.95% 6.91% 6.98% 6.97% 7.09% 7.05% 7.05% 7.00% 6.91% 6.81% 6.38% 6.41% 6.26% 6.24% 6.18% Terminal OAR (average) 7.61% 7.53% 7.44% 7.39% 7.33% 7.44% 7.34% 7.22% 7.19% 7.13% 6.97% 6.70% 6.59% 6.50% 6.44% 6.47% IRR (average) 8.42% 8.19% 8.06% 8.05% 8.06% 8.31% 8.23% 8.11% 8.09% 7.86% 7.80% 7.78% 7.66% 7.54% 7.46% 7.39%

INVESTOR SURVEY HISTORICAL RESULTS

OAR (average) Terminal OAR (average) IRR (average)

8.50%

8.25%

8.00%

7.75%

7.50%

7.25% RATES

7.00%

6.75%

6.50%

6.25%

6.00% 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 ANALYSIS PERIOD

Source: Pw C Real Estate Investor Survey

Terminal Capitalization Rate Selection

We based the estimate of property value at reversion on assumed resale at the end of Year 14, using our forecast of Year 15 net operating income. The reversion value was calculated by applying a capitalization rate of 5.25 percent to calendar year 2027 NOI and subtracting sales expenses of 4.00 percent. The net cash flows and the net reversion were discounted to net present value using a discount rate of 6.25 percent, the derivation of which is discussed below.

A terminal capitalization rate was used to estimate the market value of the property at the end of the assumed investment-holding period. We estimated an appropriate terminal rate based on indicated rates in today’s market. PricewaterhouseCoopers, Inc. periodically surveys national real estate investors to determine terminal capitalization rates considered acceptable by respondents. Exhibited below are the national terminal capitalization rates for Real Estate Investor Survey National Strip Centers as of the most recent quarter:

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TERMINAL CAPITALIZATION RATES (OARout) Survey Date Range Average Fourth Quarter 2016 - PwC 4.75% 9.75% 6.47% PwC - Refers to National Strip Shopping Center market regardless of class or occupancy

In addition, we examined the terminal rates derived from the improved property sales exhibited in Addendum C of this report:

COMPARABLE RETAIL CENTER SALES TERMINAL CAPITALIZATION RATE SUMMARY

No. Property Terminal Rate 1 Queens Place -- 88-01 Queens Boulevard Elmhurst, NY 2 Harlem Center 6.00% 125 West 125th Street Upper Manhattan, NY 3 Shops @ Skyview Center 5.50% 40-24 College Point Boulevard 4 Riverdale Crossings 5.50% 184-190 West 237th Street Riverdale, NY

5 Shops @ Columbus Center 5.25% 10 Columbus Circle Manhattan, NY 6 Shops at Grand Avenue 5.00% 74-25 Grand Avenue Maspeth, NY 7 Canarsie Plaza -- 8925 Avenue D Brooklyn, NY ANALYSIS Low 5.00% High 6.00% Average 5.45% Compiled by Cushman & Wakefield, Inc. The terminal capitalization rates derived from the improved property sales exhibited above are between 5.00 and 6.00 percent, with an average of 5.45 percent. The terminal capitalization rates derived from the improved property the PwC investor survey ranged between 4.75 and 9.75 percent, with an average of 6.47 percent. A premium was added to today’s rate to allow for the risk of unforeseen events or trends which might affect our estimate of net operating income during the holding period, including a possible deterioration in market conditions for the property. Investors typically add 25 to 150 basis points to the “going-in” rate to arrive at a terminal capitalization rate, according to Cushman & Wakefield’s periodic investor surveys.

The difference between going-in capitalization rates and terminal capitalization rates is typically risk related due to time (market conditions). In consideration of the subject’s characteristics, and projected cash flow we have applied a 5.25 percent terminal capitalization rate.

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Discount Rate Analysis

We estimated future cash flows, including property value at reversion, and discounted that income stream at an internal rate of return (yield rates) currently required by investors for similar-quality real property. The yield rate (internal rate of return or IRR) is the single rate that discounts all future equity benefits (cash flows and equity reversion) to an estimate of net present value.

The most recently published PricewaterhouseCoopers, Inc. survey indicates that investors considered acceptable internal rates of return within the following range:

DISCOUNT RATES (IRR) Survey Date Range Average PwC Fourth Quarter 2016 5.50% - 10.75% 7.39% PwC - Refers to National Strip Shopping Center market regardless of class or occupancy

In addition, we examined the discount rates derived from the improved property sales exhibited in Addendum C of this report:

COMPARABLE RETAIL CENTER SALES DISCOUNT RATE SUMMARY (IRR)

No. Property Discount Rate 1 Queens Place -- 88-01 Queens Boulevard Elmhurst, NY 2 Harlem Center 7.00% 125 West 125th Street Upper Manhattan, NY 3 Shops @ Skyview Center 7.00% 40-24 College Point Boulevard 4 Riverdale Crossings 6.50% 184-190 West 237th Street Riverdale, NY

5 Shops @ Columbus Center 6.25% 10 Columbus Circle Manhattan, NY 6 Shops at Grand Avenue 6.00% 74-25 Grand Avenue Maspeth, NY 7 Canarsie Plaza -- 8925 Avenue D Brooklyn, NY ANALYSIS Low 6.00% High 7.00% Average 6.55% Compiled by Cushman & Wakefield, Inc. Summary of Discount Rate Selection

Several sources of discount rate (internal rate of return) information were analyzed including Investor Survey data. The internal rates of return cited by the PricewaterhouseCoopers, Inc. survey ranged between 5.50 and 10.75 percent, with an average of 7.39 percent. The discount rates derived from the Sales exhibited above ranged from 6.00 percent to 7.00 percent, with an average of 6.55 percent.

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In our selection of a discount rate for the subject property, we have examined mortgage rates available today. The interest rate for a 30-year fixed rate mortgage is currently below 5.00 percent. In addition, the current discount rate, or the interest rate charged by the Federal Reserve when banks borrow money, of 0.25 percent, although has increased recently, is still near historic lows.

The subject property is a multi-story urban retail power center that contains a total of 912,333 square feet of gross leasable area (GLA) retail space and a 6-level parking garage with 2,575 spaces located in The Bronx, adjacent to Yankee Stadium. The subject property also includes two 1-story commercial buildings. The subject improvements were constructed in 2009 and are situated on a 16.8-acre site. The subject is 99.3 percent leased on a long term basis and is anchored by Target, BJ’s Wholesale Club, and Home Depot which occupy 48.6 percent (443,500 SF) of the property. In addition, the subject has strong tenancy as approximately 53.0 percent (484,324 SF) of the subject is leased to credit tenants. The subject’s net operating income (NOI) is projected to increase 1.35 percent per annum through the analysis period. In addition, the subject has limited turnover during the next 10 years. Furthermore, 85 percent of the tenants with base lease terms expiring during the initial 10 years of our projection have renewal options at below market rents. The subject property also benefits from a 25-year PILOT tax abatement, which is passed directly along to the tenants since the subject is net leased.

Therefore, taking into consideration subject’s construction, location, tenant quality, long term leases, contract rents, and returns expected by investors in the current market in relation to other comparable properties, we discounted our cash flow and reversionary value projections at an internal rate of return at 6.25 percent in our analysis. Our selected discount rate is considered reasonable given the respective cash flow of the subject property. In addition, an urban retail center such as the subject property would generally have a discount rate within the low end of the range of the comparable sales and referenced investor surveys. The selected discount rate is reflective of the overall quality of the real estate, and perceived durability of the income, along with the property's projected cash flow.

Discounted Cash Flow Analysis and DCF Summary Table

The ARGUS - Version 15 cash flow is presented on the following page. The cash flow commencement date is January 01, 2017. Based on the rates selected, the value via the Yield Capitalization analysis is estimated at $630,000,000, rounded. The reversion contributes 51.78 percent to this value estimate. Our cash flow projections and valuation matrix are presented on the following pages.

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ANNUAL CASH FLOW REPORT Annual 4-Story Retail Power Center Growth 123456789101112131415Year 1 - For the Years Beginnning Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 Jan-29 Jan-30 Jan-31 For the Years Ending Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Dec-29 Dec-30 Dec-31 Year 14

Base Rental Revenue$ 29,816,953 $ 30,117,828 $ 31,284,662 $ 32,560,116 $ 32,890,298 $ 33,233,193 $ 33,470,519 $ 34,799,581 $ 36,399,386 $ 36,793,276 $ 37,057,031 $ 37,502,209 $ 39,328,376 $ 42,907,494 $ 43,183,523 2.84% Absorption & Turnover Vacancy 0 0 (26,841) 0 (15,979) 0 (20,199) (90,744) (390,792) (27,302) (428,843) 0 (2,509,420) (946,796) Base Rent Abatements (83,366) 0 (21,473) 0 (12,784) 0 0 (89,240) (242,116) (70,518) (365,571) (428,754) (2,110,739) (4,420,518) 35.72% Scheduled Base Rental Revenue$ 29,733,587 $ 30,117,828 $ 31,236,348 $ 32,560,116 $ 32,861,535 $ 33,233,193 $ 33,450,320 $ 34,619,597 $ 35,766,478 $ 36,695,456 $ 36,262,617 $ 37,073,455 $ 34,708,217 $ 37,540,180 $ 43,183,523 1.81%

Retail Sales Revenue 227,032 259,431 292,641 308,878 285,082 315,437 346,550 378,442 411,131 444,637 478,980 42,849 -- Operating Expenses 10,207,106 10,571,055 10,903,917 11,257,687 11,619,887 12,004,861 12,468,960 13,120,948 13,531,306 14,140,668 14,517,863 15,077,371 14,743,552 15,424,936 16,180,200 3.23% RE Taxes-PILOT 1 1,623,957 1,657,555 1,707,059 1,759,150 1,811,866 1,867,643 3,253,930 4,808,201 6,386,881 8,170,507 9,889,443 11,843,830 13,144,464 13,535,874 13,775,366 17.72% Total Reimbursement Revenue$ 11,831,063 $ 12,228,610 $ 12,610,976 $ 13,016,837 $ 13,431,753 $ 13,872,504 $ 15,722,890 $ 17,929,149 $ 19,918,187 $ 22,311,175 $ 24,407,306 $ 26,921,201 $ 27,888,016 $ 28,960,810 $ 29,955,566 7.13%

Net Parking Income 3,800,000 3,876,000 3,953,520 4,032,590 4,113,242 4,195,507 4,279,417 4,365,006 4,452,306 4,541,352 4,632,179 4,724,822 4,819,319 4,915,705 5,014,019 2.00% Miscellaneous 275,000 280,500 286,110 291,832 297,669 303,622 309,695 315,889 322,206 328,650 335,223 341,928 348,766 355,742 362,857 2.00% Marshalls 8,100 8,100 8,100 8,100 8,100 8,100 8,100 8,100 8,100 8,100 8,100 8,100 4,725 4,725 4,725 -4.06% Bed Bath and Beyond 45,780 45,780 45,780 45,780 45,780 45,780 45,780 45,780 45,780 45,780 45,780 45,780 45,780 45,780 45,780 0.00% TOTAL GROSS REVENUE$ 45,920,562 $ 46,816,249 $ 48,433,475 $ 50,264,133 $ 51,043,161 $ 51,974,143 $ 54,162,752 $ 57,661,963 $ 60,924,188 $ 64,375,150 $ 66,170,185 $ 69,158,135 $ 67,814,823 $ 71,822,942 $ 78,566,470 3.50%

General Vacancy (459,206) (468,162) (457,762) (502,641) (494,612) (519,741) (521,631) (486,783) (222,358) (616,723) (237,147) (691,581) 0 0 (785,665) -- Collection Loss (351,736) (363,242) (372,494) (387,159) (396,301) (406,718) (422,466) (463,863) (631,171) (685,349) (707,044) (721,490) (718,487) (720,953) (827,028) 5.68% EFFECTIVE GROSS REVENUE$ 45,109,620 $ 45,984,845 $ 47,603,219 $ 49,374,333 $ 50,152,248 $ 51,047,684 $ 53,218,655 $ 56,711,317 $ 60,070,659 $ 63,073,078 $ 65,225,994 $ 67,745,064 $ 67,096,336 $ 71,101,989 $ 76,953,777 3.56%

Operating Expenses 10,525,000 10,840,750 11,165,973 11,500,952 11,845,981 12,201,360 12,567,400 12,944,423 13,332,755 13,732,739 14,144,719 14,569,062 15,006,132 15,456,317 15,920,006 3.00% RE Taxes-PILOT 1,787,031 1,816,945 1,871,817 1,928,346 1,986,582 2,046,577 3,540,285 5,122,347 6,796,737 8,567,588 10,439,200 12,416,042 14,502,766 14,502,766 14,502,766 17.48% Management Fee 1,353,289 1,379,545 1,428,097 1,481,230 1,504,567 1,531,431 1,596,560 1,701,340 1,802,120 1,892,192 1,956,780 2,032,352 2,012,890 2,133,060 2,308,613 3.56% Ground Rent 623,096 623,096 786,953 1,035,726 1,040,487 1,041,614 1,261,601 1,776,091 2,089,904 2,112,221 2,128,279 2,192,127 2,257,891 2,325,628 2,395,397 10.66% TOTAL OPERATING EXPENSES$ 14,288,416 $ 14,660,336 $ 15,252,840 $ 15,946,254 $ 16,377,617 $ 16,820,982 $ 18,965,846 $ 21,544,201 $ 24,021,516 $ 26,304,740 $ 28,668,978 $ 31,209,583 $ 33,779,679 $ 34,417,771 $ 35,126,782 7.00%

NET OPERATING INCOME$ 30,821,204 $ 31,324,509 $ 32,350,379 $ 33,428,079 $ 33,774,631 $ 34,226,702 $ 34,252,809 $ 35,167,116 $ 36,049,143 $ 36,768,338 $ 36,557,016 $ 36,535,481 $ 33,316,657 $ 36,684,218 $ 41,826,995 1.35%

Capital Reserves 136,850 140,955 145,184 149,540 154,026 158,647 163,406 168,308 173,357 178,558 183,915 189,432 195,115 200,969 206,998 3.00% Tenant Improvements60,63000000000000000-- Leasing Commissions 136,721 0 60,147 0 35,808 0 0 249,968 744,155 0 774,081 0 4,400,089 3,238,810 27.57% TOTAL LEASING & CAPITAL COSTS$ 334,201 $ 140,955 $ 205,331 $ 149,540 $ 189,834 $ 158,647 $ 163,406 $ 418,276 $ 917,512 $ 178,558 $ 957,996 $ 189,432 $ 4,595,204 $ 3,439,779 $ 206,998 19.64%

CASH FLOW BEFORE DEBT SERVICE$ 30,487,003 $ 31,183,554 $ 32,145,048 $ 33,278,539 $ 33,584,797 $ 34,068,055 $ 34,089,403 $ 34,748,840 $ 35,131,631 $ 36,589,780 $ 35,599,020 $ 36,346,049 $ 28,721,453 $ 33,244,439 $ 41,619,997 0.67%

Implied Overall Rate 4.89% 4.97% 5.13% 5.31% 5.36% 5.43% 5.44% 5.58% 5.72% 5.84% 5.80% 5.80% 5.29% 5.82% Cash on Cash Return 4.84% 4.95% 5.10% 5.28% 5.33% 5.41% 5.41% 5.52% 5.58% 5.81% 5.65% 5.77% 4.56% 5.28%

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DISCOUNTED CASH FLOW MODELING ASSUMPTIONS VALUATION SCENARIO: Market Value As-Is GENERAL CASH FLOW ASSUMPTIONS GROWTH RATES Cash Flow Software: ARGUS - Version 15 Market Rent-Retail: 3.00% Cash Flow Start Date: January 1, 2017 Consumer Price Index (CPI): 3.00% Calendar or Fiscal Analysis: Fiscal Expenses: 3.00% Investment Holding Period: 14 Years Tenant Improvements: 3.00% Analysis Projection Period: 15 Years Real Estate Taxes: 3% After Tax Abatement

VACANCY & COLLECTION LOSS RATES OF RETURN Global Vacancy: 1.00% Internal Rate of Return: (Cash Flow) 6.25% Global Collection Loss: 2.00% Internal Rate of Return: (Reversion) 6.25% Total Vacancy and Collection Loss 3.00% Terminal Capitalization Rate: 5.25% Reversionary Sales Cost: 4.00% Credit Tenant Overide Rate (Vacancy): 0.00% Credit Tenant Overide Rate (Collection Loss) 0.00% VALUATION CAPITAL EXPENDITURES Market Value As-Is $632,152,733 Reserves for Replacement ($/SF): $0.15 LESS Curable Depreciation $0 Adjusted Value $632,152,733 Rounded to nearest $5,000,000 $630,000,000 Value $/SF $690.54

Compiled by Cushman & Wakefield, Inc. The following graph depicts the forecasted change in both net income and net cash flow over the analysis period.

$45,000,000

$40,000,000

$35,000,000

$30,000,000

$25,000,000

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$- 123456789101112131415

Net Operating Income Cash Flow Before Debt Service

The results of the Yield Capitalization analysis are presented below:

PRICING MATRIX - Market Value As-Is Terminal Discount Rate (IRR) for Cash Flow Cap Rates 5.75% 6.00% 6.25% 6.50% 6.75% 4.75%$ 701,063,095 $ 683,559,143 $ 666,606,749 $ 650,186,508 $ 634,279,757 5.00%$ 681,739,896 $ 664,864,285 $ 648,518,390 $ 632,683,617 $ 617,342,077 5.25%$ 664,257,002 $ 647,949,889 $ 632,152,733 $ 616,847,669 $ 602,017,509 5.50%$ 648,363,461 $ 632,573,166 $ 617,274,863 $ 602,451,351 $ 588,086,084 5.75%$ 633,851,968 $ 618,533,549 $ 603,690,720 $ 589,306,888 $ 575,366,087

IRR Reversion 5.75% 6.00% 6.25% 6.50% 6.75% Cost of Sale at Reversion: 4.00% Percent Residual: 51.78% Rounded to nearest $5,000,000 $630,000,000 $690.54 Based on the rates selected, the value via the Yield Capitalization analysis is estimated at $630,000,000, rounded. The reversion contributes 51.78 percent to this value estimate.

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Direct Capitalization Method

In the direct capitalization method, we estimated market value by dividing net operating income by an overall rate derived from our analyses of market sales and computed by dividing the net operating income from a sold property by its sale price. The overall capitalization rates derived from the sales detailed below are between 4.14 and 5.85 percent with an average of 4.96 percent. It should be noted that the lower end of the capitalization rates were derived from properties that had leases significantly below market rents. The overall capitalization rates derived from the most applicable improved property sales are shown below.

COMPARABLE RETAIL CENTER SALES OVERALL CAPITALIZATION RATE SUMMARY

No. Property Capitalization Rate 1 Queens Place 5.25% 88-01 Queens Boulevard Elmhurst, NY 2 Harlem Center 4.48% 125 West 125th Street Upper Manhattan, NY 3 Shops @ Skyview Center 4.70% 40-24 College Point Boulevard 4 Riverdale Crossings 5.30% 184-190 West 237th Street Riverdale, NY

5 Shops @ Columbus Center 4.14% 10 Columbus Circle Manhattan, NY 6 Shops at Grand Avenue 5.00% 74-25 Grand Avenue Maspeth, NY 7 Canarsie Plaza 5.85% 8925 Avenue D Brooklyn, NY ANALYSIS Low 4.14% High 5.85% Average 4.96% Compiled by Cushman & Wakefield, Inc. These sales are the most recent comparable transactions with the subject property and located within prime and secondary commercial corridors. These sales are the best indicators of current investment parameters in the market for retail centers throughout New York City.

Additional support can be drawn from the most recent PricewaterhouseCoopers, Inc. survey of overall capitalization rate survey: CAPITALIZATION RATES Survey Date Range Average PwC Fourth Quarter 2016 4.00% - 9.50% 6.18% PwC - Refers to National Strip Shopping Center market regardless of class or occupancy

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In our selection of the capitalization rate we have considered the subject’s location, quality, and tenancy, below market contract rents, projected cash flow and quality of construction. Therefore, in the context of the direct capitalization method, a going-in rate of 5.00 percent is considered reasonable, compensating the typical buyer for the risk inherent in investing in this building. We have applied this rate in the direct capitalization method. A summary of the direct capitalization method is shown below.

DIRECT CAPITALIZATION METHOD Market Value As-Is NET OPERATING INCOME $30,821,204 $33.78 Sensitivity Analysis (0.25% OAR Spread) Value $/SF NRA Based on Low-Range of 4.75% $648,867,453 $711.22 Based on Most Probable Range of 5.00% $616,424,080 $675.66 Based on High-Range of 5.25% $587,070,552 $643.48 Reconciled Value $616,424,080 $675.66 Rounded to nearest $5,000,000 $615,000,000 $674.10 Compiled by Cushman & Wakefield, Inc. Based on the rate selected, our value via the Direct Capitalization Method is estimated at $615,000,000, rounded.

INCOME CAPITALIZATION APPROACH CONCLUSION

We have considered the Discounted Cash Flow and the Direct Capitalization Method in our analysis of the subject property. Our opinion of market values via the Income Capitalization Approach is as follows.

INCOME CAPITALIZATION APPROACH CONCLUSION Market Value Methodology As-Is PSF Discounted Cash Flow $630,000,000 $690.54 Direct Capitalization $615,000,000 $674.10 Income Approach Conclusion $625,000,000 $685.06 Compiled by Cushman & Wakefield, Inc. However, the leaseholder is obligated for various future transaction payments in the event of a property sale, refinance or equity disposition. Since our market value estimate in our valuation assumes a sale of the property as of the date of value, and based on the defined Net Sale Proceeds calculation within Section 12.1b (vi) of the subject ground lease, we have adjusted our preliminary market value by the defined 7.5 percent of net proceeds obligated to be distributed to the landlord (New York City) by the lessee. Therefore, our reconciled overall market value of the leasehold interest in the subject property is as follows:

Overall, we have estimated the market value of the subject property to be $625,000,000 as detailed in the previous analysis within the Income Capitalization Approach section of this report. According to the Section 12.1b (vi) of the ground lease, the Net Sale Proceeds are defined as the Gross Sale Proceeds (market value of the subject property) less the following deductions:

(1) the amount of any Mortgage (including accrued interest and other sums), or proportionate share thereof, satisfied with the proceeds of Sale or assigned or purchased by a new lender or assumed or to which the estate conveyed in such Sale is taken subject by the purchaser at such Sale,

(2) accrued Operating Losses,

(3) any reasonable or customary expenses incurred in effecting such Sale, including, but not limited to, brokerage commissions, attorneys' fees, transfer and transfer gains taxes, prepayment premiums, the costs of any repairs or restorations required in connection with such Sale and title insurance premiums, provided however, that with

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respect to any such expenses paid to Affiliates, such amounts shall be no more than would have been paid to an unrelated party in an arm's length transaction,

(4) in the event that in connection with any foreclosure of a Mortgage or an Assignment, Transfer or Major Sublease in lieu of a foreclosure of a Mortgage, a Mortgagee or any Control Affiliate or nominee of a Mortgagee shall become Tenant hereunder and all or any portion of the indebtedness secured by such Mortgage shall have been discharged or reduced without full payment of such indebtedness, an amount equal to the amount of the indebtedness so discharged or reduced, together with interest and other charges which would have accrued with respect thereto through the date of the Sale, absent such discharge or reduction,

(5) an amount equal to Net Sales Proceeds upon which a prior Transaction Payment was made,

(6) all cash equity of Tenant invested in the Premises and

(7) a developer’s fee equal to 3% of Development Costs.

We have reviewed a letter dated January 16, 2014, from the ground lessee (BTM Development Partners LLC) to the City of New York (fee owner) which details the anticipated transactions costs related to the recent $380,000,000 refinancing of the subject property. According to the ownership, the economics of the refinancing are consistent with the current deductions. The letter details the allowable deductions from the Gross Loan Proceeds and the calculation of the Net Cash Proceeds. Some of the deductions defined in the ground lease used in calculating the transaction payment apply to both refinancing and a sale transaction. However, based on the $380,000,000 mortgage, we have utilized this amount as the mortgage amount in the calculation of Net Sale Proceeds. Therefore, we have utilized the applicable deductions (Nos. 1, 3, 6 & 7 referenced above) which total $459,460,734 which were detailed by the lessee while calculating the Net Cash Proceeds from a refinance. In addition, we have also estimated transactions costs of 4.0 percent of the sales price ($625,000,000) or $25,000,000 (rounded) regarding sales commissions, sales transfer tax, legal, title, professional fees, and other miscellaneous costs. Overall, our estimated deductions totaled $459,460,734. As a result, our Net Sale Proceeds reflected $165,539,266. Based on the defined 7.5 percent formula in the ground lease, the transaction payment due the landlord was calculated to be $12,415,445. We have rounded the transaction payment to $12,000,000 for the income approach.

Exhibited below is our calculation of the actual “Net Sales Proceeds” and the Transaction Payment of 7.5 percent of net proceeds:

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CALCULATION OF THE TRANSACTION PAYMENT FROM SALE Market Value-Leasehold: $625,000,000

Less: Deductions Per Ground Lease

1: Mortgage Amount: $380,000,000

2: Operating Losses: N/A

3: Sale Costs @ 4% (sales commissions, transfer tax, legal, title, etc.) $25,000,000

4: Adjustment of any indebtedness discharged or reduced N/A

5: Adjustment for prior Transaction Payment: N/A

6: All cash equity of Tenant invested in the subject $40,500,000

7: Developer fee equal to 3% of development costs $13,960,734

Total Deductions: $459,460,734

Net Sale Proceeds from Sale $165,539,266

Transaction Payment due @7.5% from Sale $12,415,444

Rounded: $12,000,000 Therefore, our opinion of market value via the Income Capitalization Approach is as follows.

INCOME CAPITALIZATION CONCLUSION-AFTER NET SALE PROCEEDS As Is Market Value: $625,000,000

Less: Net Sale Proceeds Obligation $ 12,000,000

As Is Market Value, rounded, $613,000,000

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Addendum C: Comparable Improved Retail Sales

On the following page, we present a summary of the improved properties that we compared to the subject property that reflect a range in price which reflect an unadjusted range of $255.72 to $2,255.57 per square foot with an average of $890.63 per square foot. The first year overall capitalization rates of the sales range from 4.14 to 5.85 percent, with an average of 4.96 percent.

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SUMMARY OF IMPROVED SALES

Property Name No. Address, City, State Property Sub-Type Sold GLA Grantor Grantee Sale Date Sale Price $/SF NOI/SF OAR Occup. 1 Queens Place Lifestyle Center 221,668 JLL Income Property Madison Jan-16 $159,000,000 $717.29 $37.68 5.25% 100% 88-01 Queens Boulevard Trust Inc. International Elmhurst, NY Realty

2 Harlem Center Power Center 126,234 JLL Income Property Madison Jan-16 $104,000,000 $823.87 $36.93 4.48% 98% 125 West 125th Street Trust Inc. International Upper Manhattan, NY Realty 3 Shops @ Skyview Center Regional Center 508,817 Onex Real Estate The Blackstone Jun-15 $400,000,000 $786.14 $36.95 4.70% 100% 40-24 College Point Boulevard Partners Group Whitestone, NY 4 Riverdale Crossings Neighborhood Center 159,137 Metropolitan Realty Vanbarton Oct-15 $133,000,000 $835.76 $44.30 5.30% 98% 184-190 West 237th Street Associates Group Riverdale, NY 5 Shops @ Columbus Center Lifestyle Center 461,080 JV B/w Henley A/R Retail LC Jun-16 $1,040,000,000 $2,255.57 $93.38 4.14% 99% 10 Columbus Circle Holding Company & and A/R Manhattan, NY GP Garage LLC 6 Shops at Grand Avenue Neighborhood Center 99,986 CPT Grand Avenue Shops at Grand Oct-14 $56,000,000 $560.08 $28.00 5.00% 100% 74-25 Grand Avenue LLC Avenue LLC Maspeth, NY 7 Canarsie Plaza Power Center 228,883 Acadia Realty Trust Retail Nov-13 $58,529,960 $255.72 $14.96 5.85% 98% 8925 Avenue D JV Properties of Brooklyn, NY America, Inc. STATISTICS Low 99,986 Nov-13 $56,000,000 $255.72 $14.96 4.14% 98% High 508,817 Jun-16 $1,040,000,000 $2,255.57 $93.38 5.85% 100% Average 257,972 Jun-15 $278,647,137 $890.63 $41.74 4.96% 99% Compiled by Cushman and Wakefield, Inc.

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Addendum D: Ground Rent Calculation

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GATEWAY CENTER @ BRONX TERMINAL MARKET Ground Rent Projection (Calendar Year) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10 Year 11 Potential Gross Revenue

$29,816,953 $30,117,828 $31,284,662 $32,560,116 $32,890,298 $33,233,193 $33,470,519 $34,799,581 $36,399,386 $36,793,276 $37,057,031

Net Parking Revenue $3,800,000 $3,876,000 $3,953,520 $4,032,590 $4,113,242 $4,195,507 $4,279,417 $4,365,006 $4,452,306 $4,541,352 $4,632,179

Licene & Bilboard Agreements $50,000 $51,500 $53,045 $54,636 $56,275 $57,964 $59,703 $61,494 $63,339 $65,239 $67,196

Less Pass Through Rent Deduction -$650,000 -$669,500 -$689,585 -$710,273 -$731,581 -$753,528 -$776,134 -$799,418 -$823,401 -$848,103 -$873,546

Imputed Gross Revenue for Target (Buy down$3,196,547 tenant)** $3,196,547 $3,196,547 $3,196,547 $3,196,547 $3,196,547 $3,196,547 $3,196,547 $3,196,547 $3,196,547 $3,196,547 $36,213,500 $36,572,375 $37,798,189 $39,133,617 $39,524,782 $39,929,682 $40,230,051 $41,623,209 $43,288,176 $43,748,310 $44,079,407

Allowed Deductions

Management Fee @ 3% of PGI ($1,086,405) ($1,097,171) ($1,133,946) ($1,174,009) ($1,185,743) ($1,197,890) ($1,206,902) ($1,248,696) ($1,298,645) ($1,312,449) ($1,322,382)

On‐Site Costs ($191,450) ($191,450) ($191,450) ($191,450) ($191,450) ($191,450) ($191,450) ($191,450) ($191,450) ($191,450) ($191,450)

Gross Revenue $34,935,645 $35,283,753 $36,472,793 $37,768,158 $38,147,588 $38,540,342 $38,831,700 $40,183,063 $41,798,081 $42,244,411 $42,565,574

Specified Percentage @ 3.00% 3.00% 3.42% 4.00% 4.00% 4.00% 4.00% 4.42% 5.00% 5.00% 5.00%

Ground Rent $1,048,069 $1,058,513 $1,247,370 $1,510,726 $1,525,904 $1,541,614 $1,553,268 $1,776,091 $2,089,904 $2,112,221 $2,128,279

Less Ground Rent Abatement -$425,000 -$435,417 -$460,417 -$475,000 -$485,417 -$500,000 -$291,667 $0 $0 $0 $0 $623,069 $623,096 $786,953 $1,035,726 $1,040,487 $1,041,614 $1,261,601 $1,776,091 $2,089,904 $2,112,221 $2,128,279

**Target Buydown amount times 6.89% (buydown constant)

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Addendum E: Qualification of the Appraisers

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Charles R. Looney Appraiser Valuation & Advisory Cushman & Wakefield, Inc.

Professional Expertise Charles R. Looney is an Associate Appraiser of Valuation & Advisory for Cushman & Wakefield. He joined Cushman and Wakefield, Inc. in July, 2014. Mr. Looney has contributed to appraisal and consulting assignments involving the valuation of multiple property types, including office buildings, retail centers, cooperative, condominium and Rental apartment buildings, retail centers, regional malls, vacant land, transferable development rights (TDRs), historic and preservation easements and existing and proposed investment properties throughout New York State. Mr. Looney works as an associate to John A. Katinos, MAI, who specializes in the valuation of various property types in all five boroughs. Memberships, Licenses, Professional Affiliations and Education  Practicing Affiliate, Appraisal Institute – Metropolitan New York Chapter  Bachelor of Science, School of Biological Sciences, Marist College

James P. Stuckey Jr. Director Valuation & Advisory Practice Group Member | Retail Cushman & Wakefield, Inc.

Professional Expertise James Stuckey is an appraiser with Cushman & Wakefield, Inc. Valuation & Advisory Group. He joined Cushman and Wakefield, Inc. in August 2007. Appraisal and consulting assignments have included office buildings, retail centers, regional malls, vacant land, transferable development rights (TDRs), historic and preservation easements, cooperative, condominium and rental apartment buildings, feasibility and market studies, industrial properties, residential subdivisions and existing and proposed investment properties throughout New York State. Memberships, Licenses, Professional Affiliations and Education  Practicing Affiliate, Appraisal Institute – Metropolitan New York Chapter  Licensed Real Estate Appraiser Assistant in the following state:  New York – 48000049048  Bachelor of Science in Political Science, University of Scranton, Pennsylvania Appraisal Education  Basic Appraisal Principles (R1)  Fair Housing, Fair Lending and Environmental Issues (AQ1)  15-Hour National Uniform Standards of Professional Appraisal Practice (USPAP)  Basic Appraisal Procedures (R2)

NEW YORK

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John A. Katinos, MAI Executive Director Valuation & Advisory Practice Group Member | Retail Cushman & Wakefield, Inc.

Professional Expertise John A. Katinos is an Executive Director with Cushman & Wakefield, Inc. Valuation & Advisory. He joined Cushman & Wakefield, Inc. in August, 1989. Appraisal and consulting assignments have included office buildings, retail centers, regional malls, vacant land, transferable development rights (TDRs), historic and preservation easements, cooperative, condominium and rental apartment buildings, feasibility and market studies, industrial properties, residential subdivisions and existing and proposed investment properties throughout the United States. Served as an arbitrator for numerous real estate maters including ground rent redetermination, office and retail space rent renewal determinations. Memberships, Licenses, Professional Affiliations and Education  Designated Member, Appraisal Institute (MAI #12185). As of the current date, John Katinos, MAI has completed the requirements of the continuing education program of the Appraisal Institute.  President, Metropolitan NY Chapter of the Appraisal Institute  Certified General Real Estate Appraiser in the following state:  New York – 46000028780  Master of Science in Real Estate, New York University  Bachelor of Science in Business Administration, Drexel University

Douglas H. Larson Executive Director

1290 Av enue of the Americas New York, NY 10104 Direct +1 212 841 5051 Fax +1 212 479 1838 [email protected] cushmanwakefield.com

March 17, 2017

To:

Related Commercial Portfolio Ltd.

RE: Va lue Appraisa ls – Consent to include within Financial Statements

We hereby give our full consent to Related Commercial Portfolio Ltd. (the "Company") to the inclusion of our Appraisal Report dated March 9, 2017 (Effective date – December 31, 2016) regarding Union Square Retail, in its entirety, within the Company's Financial Statements for December 31, 2016, to be published by the Company no later than March 31, 2017, and any ensuing financial statements, and within any other filing to be filed and/or disclosed by the Company to the Israel Securities Authority and/or to be published by the Company.

In addition, we hereby give our full consent to the inclusion of a copy of this letter within the Company's Financial Statements and other filings as aforesaid.

Yours sincerely,

Douglas H. Larson Executive Director

APPRAISAL OF REAL PROPERTY

Retail Condominium Unit Within One Union Square South New York, New York County, NY 10003

IN AN APPRAISAL REPORT

As of December 31, 2016

Prepared For:

Related Commercial Portfolio, LTD. c/o Related Companies 60 Columbus Circle New York, NY 10023

Prepared By:

Cushman & Wakefield, Inc. Valuation & Advisory 1290 Avenue of the Americas, 9th Floor New York, NY 10104-6178 C&W File ID: 17-12002-900125-006

1290 Avenue of the Americas, 9th Floor NEW YORK, NY 10104-6178 Tel +1 212 841 7500 cushmanwakefield.com

March 09, 2017

Mr. David Zussman Related Commercial Portfolio, LTD. c/o Related Companies 60 Columbus Circle New York, NY 10023

Re: Appraisal of Real Property In An Appraisal Report

Retail Condominium Unit Within One Union Square South New York, New York County, NY 10003

C&W File ID: 17-12002-900125-006

Dear Mr. Zussman:

The appraisal report is intended to provide an opinion of the retrospective market value of the leasehold interest of the subject property for an internal review by the client. This report is not intended for any other use. This report was prepared for the exclusive use of Related Commercial Portfolio, LTD. c/o Related Companies and their participant lenders are the intended users.

Client: Mr. David Zussman Related Commercial Portfolio, LTD. c/o Related Companies 60 Columbus Circle New York, NY 10023

Intended User: Related Commercial Portfolio, LTD. c/o Related Companies and their participant lenders, are the only Intended Users.

Intended Use: IFRS financial statements in connection with a potential corporate financing.

Identification of the Real Estate: Retail Condominium Unit Within One Union Square South New York, NY 10003

CUSHMAN & WAKEFIELD 1 Mr. David Zussman Cushman & Wakefield, Inc. Related Commercial Portfolio, LTD. c/o Related Companies March 9, 2017 Page 2

Current Use: The subject property comprises a multi-level retail condominium unit totaling 236,215 square feet of net rentable area within five levels (inclusive of one below grade level) of the luxury mixed-use development located at One Union Square South. The subject is 100.0 percent leased to seven retail tenants. The subject is anchored by Regal Cinemas, Best Buy, and Nordstrom Rack, which occupy 83.7 percent of the subject. The subject site is ground leased through December 31, 2095, with no renewal options. One Union Square South is a 22-story luxury residential building, with a 5-level retail component (subject property) containing a total gross building area of 431,677 square feet on a 48,223 square foot square foot parcel of land. The entire mixed-use property contains approximately 240 residential rental apartment units (208,961 SF), and 236,215 square feet of multi-level retail space. The residential component of the building is not part of the subject property.

Highest and Best Use It is our opinion that the Highest and Best Use of the entire site as if vacant is a mixed-use development comprising residential units on the (As If Vacant): upper floors, and multi-level retail space on the lower floors.

Highest and Best Use It is our opinion that the Highest and Best Use of the entire property as improved is as it is currently improved. (As Improved):

Type of Value: Market Value (defined later in this report)

Sales History: To the best of our knowledge, the property has not transferred within the past three years.

Real Property Interest Valued: Leasehold Estate

Date of Inspection: December 20, 2016

Effective Date of Value: December 31, 2016

Date of Report: March 09, 2017

Extraordinary Assumptions: This appraisal does not employ any extraordinary assumptions.

Hypothetical Conditions: This appraisal does not employ any hypothetical conditions.

Valuation Indices:

Sales Comparison Approach: $380,000,000

Income Capitalization Approach: $385,000,000

Opinion of Value: $385,000,000 (Market Value As Is on December 31, 2016)

Exposure & Marketing Time: 9 months

CUSHMAN & WAKEFIELD 2

Mr. David Zussman Cushman & Wakefield, Inc. Related Commercial Portfolio, LTD. c/o Related Companies March 9, 2017 Page 3

Market Value Definition

Scope of Work

Research

1 Uniform Standards of Professional Appraisal Practice. 2016-2017 edition. Washington, DC: The Appraisal Foundation 2012.

CUSHMAN & WAKEFIELD 3

Mr. David Zussman Cushman & Wakefield, Inc. Related Commercial Portfolio, LTD. c/o Related Companies March 9, 2017 Page 4

Report Option Description

Appraisal Methodology

CUSHMAN & WAKEFIELD 4 ONE UNION SQUARE SOUTH ASSUMPTIONS AND LIMITING CONDITIONS

Assumptions and Limiting Conditions

CUSHMAN & WAKEFIELD 5

ONE UNION SQUARE SOUTH ASSUMPTIONS AND LIMITING CONDITIONS

CUSHMAN & WAKEFIELD 6

ONE UNION SQUARE SOUTH CERTIFICATION OF APPRAISAL

Certification of Appraisal

CUSHMAN & WAKEFIELD 7

ONE UNION SQUARE SOUTH ADDENDA CONTENTS

Addenda Contents

Addendum A: Client Satisfaction Survey Addendum B: Valuation Methodology Addendum C: Comparable Improved Retail Sales Addendum D: Ground Rent Calculation Addendum E: Qualification of the Appraisers

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ONE UNION SQUARE SOUTH ADDENDA CONTENTS

Addendum A: Client Satisfaction Survey

Survey Link: https://www.surveymonkey.com/r/vaclientsatisfaction?c=16-12002-903393-001 C&W File ID: 17-12002-900125-006 Fax Option: (716) 852-0890

__ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

2. Please rate the appraisal report on clarity, attention to detail, and the extent to which it was presentable to your internal/external users without revisions:

__ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

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ONE UNION SQUARE SOUTH ADDENDA CONTENTS

3. The appraiser communicated effectively by listening to your concerns, showed a sense of urgency in responding, and provided convincing support of his/her conclusions:

__ Not Applicable __ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

4. The report was on time as agreed, or was received within an acceptable time frame if unforeseen factors occurred after the engagement:

__ Yes __ No

Comments:______

5. Please rate your overall satisfaction relative to cost, timing, and quality:

__ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

6. Any additional comments or suggestions you feel our National Quality Control Committee should know?

______

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ONE UNION SQUARE SOUTH ADDENDA CONTENTS

7. Would you like a representative of our National Quality Control Committee to contact you?

__ Yes __ No

Name & Phone (if contact is desired): ______

Contact Information: Scott Schafer Managing Director, National Quality Control (716) 852-7500, ext. 121

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ONE UNION SQUARE SOUTH INCOME CAPITALIZATION APPROACH

Addendum B: Valuation Methodology

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ONE UNION SQUARE SOUTH INCOME CAPITALIZATION APPROACH

INCOME CAPITALIZATION APPROACH Methodology

The most common methods of converting net income into value are Direct Capitalization and Yield Capitalization. In direct capitalization, net operating income is divided by an overall capitalization rate to indicate an opinion of market value. In the yield capitalization method, anticipated future cash flows and a reversionary value are discounted to an opinion of net present value at a chosen yield rate (internal rate of return).

Based upon the subject’s characteristics, it is our opinion that both the Discounted Cash Flow and Direct Capitalization methods are appropriate in this assignment.

Potential Gross Income

Potential gross income is generated by a number of distinct elements: minimum rent determined by lease agreement; and reimbursement of certain expenses incurred in the ownership and operation of the real estate. Minimum base rent is a legal contract between landlord and tenant establishing a return to investors in the real estate. Retail lease terms generally also dictate specific expense reimbursement charges that can be billed to the tenant. The first step in this appraisal is to analyze all potential gross income, starting with an analysis of the subject’s tenancy.

Local Market Lease Structure

In the subject’s market, leases for properties similar to the subject property type are typically written on a gross basis. Under this lease structure, the tenant is obligated to pay its pro rata share of real estate taxes, insurance and condominium charges above their base year amount. Lease terms are generally between 5 and 15 years in length. Rent increase schedules vary, but typically include rent escalations of 3.0 percent per annum for smaller tenants or 10.0 percent every 5 years for larger tenants.

Subject’s lease structure

The majority of the subject’s tenants are gross leases whereby, the tenants are responsible for their pro-rata share of Common Area Maintenance (CAM) charges and a pro-rata share of real estate taxes above their base year. However, Best Buy and Regal Cinemas, are net leases whereby, the tenants are responsible for a pro-rata share of condominium charges and real estate taxes.

Space Summary & Occupancy Status

The subject property is currently 100.0 percent leased by 7 tenants. The following chart summarizes the subject’s 236,215 square feet of net rentable area (NRA) by tenant.

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CURRENT SPACE SUMMARY & OCCUPANCY STATUS SPACE SUMMARY Tenant Category Occ. SF Vct. SF Total SF Occupancy Ground- Corner 9,755 - 9,755 100.0% Ground- Union Square South 13,947 - 13,947 100.0% Multi-Level- Theater 118,779 - 118,779 100.0% Second Floor 46,088 - 46,088 100.0% Lower Level-Retail 32,136 - 32,136 100.0% Un Sq Wines 6,419 - 6,419 100.0% MRI CENTER 9,091 - 9,091 100.0% Total 236,215 - 236,215 100.0%

Compiled by Cushman & Wakefield, Inc.

ATTAINED RENT SCHEDULE

The following chart summarizes the attained rent level within the subject property as of the date of valuation.

RENT ROLL SCHEDULE MARKET RENT COMPARISON As Of Value Date: Dec-16 Market Rent Comparison Start End Area Contract Contract Contract Rent Tenant Name Suite Date Date ( SF ) Rent/Year Rent/SF Rent/SF Annualized Rent

Ground- Corner Citibank 100 Mar-10 Mar-20 9,755 $5,365,248 $550.00 $575.00 $5,609,125 below market 1 tenant subtotal 9,755 $5,365,248 $550.00 $575.00 $5,609,125 below market

Ground- Union Square South Duane Reade 110 Mar-10 Sep-30 13,947 $3,657,504 $262.24 $450.00 $6,276,150 below market 1 tenant subtotal 13,947 $3,657,504 $262.24 $450.00 $6,276,150 below market

Multi-Level- Theater Regal Cinemas 4 & 5 Apr-98 Apr-23 118,779 $5,619,708 $47.31 $50.00 $5,938,950 below market 1 tenant subtotal 118,779 $5,619,708 $47.31 $50.00 $5,938,950 below market

Second Floor Best Buy G & 2 Jul-09 Jan-25 46,088 $3,751,560 $81.40 $125.00 $5,761,000 below market 1 tenant subtotal 46,088 $3,751,560 $81.40 $125.00 $5,761,000 below market

Lower Level-Retail Nordstrom G & 2 Dec-09 Jun-20 32,136 $4,320,000 $134.43 $180.00 $5,784,480 below market 1 tenant subtotal 32,136 $4,320,000 $134.43 $180.00 $5,784,480 below market

Un Sq Wines Union Square Wines 120 Feb-06 Jan-20 6,419 $598,956 $93.31 $125.00 $802,375 below market 1 tenant subtotal 6,419 $598,956 $93.31 $125.00 $802,375 below market

MRI CENTER MidRockland Imagin 001 Feb-17 Jul-30 9,091 $563,364 $61.97 $60.00 $545,460 within market 1 tenants subtotal 9,091 $563,364 $61.97 $60.00 $545,460 above market

GRAND-TOTALS 7 tenants in occupancy 236,215 $23,876,340 $101.08 $130.04 $30,717,540 below market

Note: Attained rent equals current rent annualized for twelve months, and it excludes contractual rent increases Compiled by Cushman & Wakefield, Inc. The contract rents for the ground floor retail space along 14th Street exhibit a range of $262.24 to $550.00 per square foot, with an average $380.67 per square foot, which is considered below current market rent levels. The Fourth Avenue retail space exhibits a contract rent of $93.31 per square foot, which is considered below market. The lower level retail space exhibits a contract rent of $134.43 per square foot, which is considered below market.

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ONE UNION SQUARE SOUTH INCOME CAPITALIZATION APPROACH

The lower level office space exhibits an average of $61.97 per square foot, which is considered within market levels. The second floor retail space exhibits a contract rent of $81.40 per square foot, which is considered below market rent levels. Lastly, the multi-level movie theater space exhibits an average contract rent of $47.31 per square foot, which is within current market levels. Overall, the subject property is leased at an average of $101.08 per square foot, which is considered below market rent levels.

Market Rental Rate – Retail Space The subject property comprises a multi-level retail condominium unit that contains 236,215 square feet of retail space on the five levels, inclusive of one below grade level. Based on the property’s size, configuration, and location, we have researched the Union Square market and other comparable prime retail corridors along with large multi-level retail leases in Manhattan, which have a varying degree of comparability to the subject’s location. It should be noted that the above and below grade spaces associated with the retail space other than ground floor are generally leased at a discount to the ground floor space.

We have identified several leases and two offerings within Union Square and surrounding corridors which occurred between February 2014 and December 2016. We have also identified several large multi-level retail spaces throughout Manhattan and three offerings which occurred between February 2014 and December 2016. The retail comparables are exhibited on the summary charts and adjustment grids on the following pages.

Our adjustment for rent concessions considers the difference in the comparables for market standard free rent of six months and no tenant work letters. The adjustment for rent concessions attempts to quantify ($ per square foot) the differences between market free rent and work letter between the subject and the comparables. The differences between free rent and work letter (+/-) is divided by the comparables lease term, and applied to the beginning “face” rent of the comparable lease. Although this methodology does not take into account amortization of rental increases over the lease term, we believe this is a simplistic approach to understanding the effect of concessions on beginning base rent.

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COMPARABLE RETAIL RENTS AND ADJUSTMENTS SUBJECT RENTAL 1 RENTAL 2 RENTAL 3 RENTAL 4 RENTAL 5 ADDRESS 1 Union Square South 10 Union Square East 41 Union Square West 95 Fifth Avenue 114 Fifth Avenue 129 Fifth Avenue CROSS STREET B/w University Place & 4th Ave. N/E/C East 14th Street N/W/C East 17th Street S/E/C E. 17th St. S/W/C E. 17th Street B/w E. 19th & E. 20th Sts LEASE INFO TENANT NAME Verizon NYX Cosmetics Bonobos Lululemon Tory Burch Sport

FRONTAGE East 14th Street Union Square West Fifth Avenue Fifth Avenue Fifth Avenue BEGINNING DATE December 2016 June 2016 April 2016 March 2015 March 2015 February 2015 TERM 10 10 10 10 10 LEASE TYPE Gross Gross Gross Gross Gross Gross TENANT SIZE 5,729 Grade 2,800 GradeLL 1,900 3,000 GradeLL 5,468 5,795 Grade LL 1,600 400 Grade LL 1,500 4,310 Total 4,910 Total 3,157 2nd 2,000 Total 14,420 Total

RENT PER SF $600 Grade $550 Grade $300 Grade $461 Grade $435 Grade LL $40 LL $75 LL $30 LL $50 $376 Avg. $70 Avg. $30 2nd $211 Avg $189 Avg.

FREE RENT(MONTHS) 343333 WORKLETTER (PSF) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

RENT CONCESSIONS -$5 $0 $0 $0 $0 ADJUSTMENTS EFFECTIVE ADJUSTED RENT PER SF/GRADE LEVEL $595 $550 $300 $461 $435 MONTHS FROM VALUE DATE 6 8 21 21 22 TIME (MARKET CONDITIONS) 2.5% 3.4% 8.9% 8.9% 9.3% TIME ADJUSTED RENT PER SF $610 $569 $327 $502 $475 LOCATION 0% 10% 10% 10% 10% QUALITY 0% 0% 15% 10% 5% SIZE 0% 0% 5% 0% 0% UTILITY 0%0% 0%10% 10%0% 5% 5%0% TOTAL ADJUSTMENTCORNER INFLUENCE 0%0% 10% 0% 50% 0% 25% 0% 25% 5% INDICATED RENT WINDOWPER SF FRONTAGE $6100% $626 $490 $628 $594

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COMPARABLE RETAIL RENTS AND ADJUSTMENTS

SUBJECT RENTAL 6 RENTAL 7 RENTAL 8 RENTAL 9 RENTAL 10 RENTAL 11 ADDRESS 1 Union Square South 168 Fifth Avenue 34 Union Square West 87 Fifth Avenue 100 Fifth Avenue 105 Fifth Avenue 10 Union Square East CROSS STREET B/w University Place & 4th Ave. B/w E. 21st & E. 22nd Sts B/w 16th & 17th Sts B/w E. 16th & E. 17th Sts N/W/C W. 15th St. B/w E. 17th & E. 18th Sts N/E/C East 14th Street LEASE INFO TENANT NAME Sweaty Betty Dylans Candy Bar Aritzia Eddie Bauer Banana Republic Verizon

FRONTAGE Fifth Avenue Union Sq. West Fifth Avenue Fifth Avenue Fifth Avenue East 14th Street BEGINNING DATE December 2016 February 2015 December 2014 December 2014 November 2014 February 2014 June 2016 TERM 10 10 10 10 10 10 LEASE TYPE Gross Gross Gross Gross Gross Gross Gross TENANT SIZE 1,600 Grade 3,300 Grade 5,200 Grade 4,400 Grade 8,900 Grade 1,182 Grade 400 LL 3,000 LL 11,000 LL 2,000 Total 7,400 Total 8,900 2nd 28,800 Total

RENT PER SF $350 Grade $545 Grade $380 Grade $250 Grade $295 Grade $800 Grade $60 LL $60 LL $50 LL $288 Avg $162 Avg $70 2nd $138 Avg.

FREE RENT(MONTHS) 3333030 WORKLETTER (PSF) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ADJUSTMENTS

RENT CONCESSIONS $0 $0 $0 $6 $0 $20 EFFECTIVE ADJUSTED RENT PER SF/GRADE LEVEL $350 $545 $380 $256 $295 $820 MONTHS FROM VALUE DATE 22 24 24 25 34 6 TIME (MARKET CONDITIONS) 9.3% 10.2% 10.2% 10.6% 14.4% 2.5% TIME ADJUSTED RENT PER SF $383 $600 $419 $283 $337 $841 LOCATION 15% -5% 10% 10% 10% 10% QUALITY 0% 0% 0% 0% 0% 0% SIZE -5% 0% 0% 0% 0% -15% UTILITY 10% 10% 10% 5% 5% 0% CORNER INFLUENCE 5% 5% 5% 0% 0% -10% WINDOW FRONTAGE 0% 0% 5% 10% 10% -5% TOTAL ADJUSTMENT 25% 10% 30% 25% 25% -20% INDICATED RENT PER SF $478 $660 $544 $354 $422 $673

CUSHMAN & WAKEFIELD 17

ONE UNION SQUARE SOUTH INCOME CAPITALIZATION APPROACH

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SUMMARY OF COMPARABLE MULTI-LEVEL RETAIL RENTS AND ADJUSTMENTS

SUBJECT RENTAL 1 RENTAL 2 RENTAL 3 RENTAL 4 RENTAL 5 RENTAL 6 RENTAL 7 RENTAL 8 RENTAL 9 RENTAL 10 ADDRESS One Union Square South 200 East 32nd Street 1 Wall Street 3 Columbus Circle 255 Greenwich Street 135 East 57th Street 9 Ninth Avenue 837 Washington Street 1095 Avenue of the Americas Herald Center 44 Union Square East B/w University place & 4th B/w Lexington & N/W/C W. 12th S/E/C W. 13th CROSS STREETS Ave. S/E/C Third Avenue S/E/C Broadway 1775 Broadway N/E/C Park Place Park Avenue Street Street N/W/C 41st Street 106 West 34th Street 1 East 17th Street

LEASE INFORMATION TENANT NAME Trader Joe's Whole Foods Nordstrom Rack Target Saks Off Fifth Avenue Restoration Hardware Samsing Electronics Whole Foods H&M Offering FRONTAGE Third Avenue & 32nd Street Wall Sreet & Broadway Broadway Greenwich Street East 57th Street Ninth Avenue Washington Street A.O.A & 41st Street West 34th Street East 17th Street BEGINNING DATE December 2016 July 2016 July 2016 March 2016 December 2015 September 2014 August 2014 July 2014 March 2014 February 2014 December 2016 TERM 20 20 15 20 20 10 10 15 10 10 LEASE TYPE Net Net Net Gross Net Net Gross Gross Gross Gross TENANT SIZE 4,982 Grd 8,000 Grd 5,279 Grd 7,538 Grd 2,000 Grd 15,000 Grd 10,500 Grd 9,850 Grd 8,000 Grd 8,460 Grd 14,250

LL 2,800 LL 18,883 LLLL 40,894 27,000 LL 15,000 LL 7,000 LL 12,688 LL 12,377 LL 6,805 LL 19,232 Total 12,000 Sub-LL 1,556 2nd 48,432 TotalSub-LL 27,000 15,000 2nd 10,000 2nd2nd 20,458 21,219 2nd 10,765 2nd 22,800 Total 14,000 3rd 56,000 Total 10,000 3rd 10,000 3rd 42,9963rd Total 15,0293rd 21,327 39,718 Total 10,000 4th 7,230 4th 62,923 Total 41,059 Total 65,000 Total 44,730 Total

STARTING BASE ANNUAL RENT $3,200,000 $10,000,000 $10,000,000 $4,000,000 $12,000,000 $8,600,000 $10,000,000 $4,000,000 $14,000,000 $8,031,735

RENT PER SF $170.00 Grd $450.00 Grd $800 Grd $300 Grd $475 Grd $300 Grd $225 Grd $335.00 Grd $735 Grd $550 Grd $40.00

LL $60.00 LL $75 LLLL $43 $90 LL $35 LL $35 LL $45.00 LL $100 LL $90 LL $166.39 Avg. $40.00 Sub-LL $350 2nd $83 Avg.Sub-LL $80 $125 2nd $100 2nd2nd $80.00 $175 2nd $100 2nd $186.32 Avg. $275 3rd $100 Avg $100 3rd $90 3rd $128.093rd Avg. $125 3rd $150 $252 Avg $70 4th $75 4th $223 Avg $195.61 Avg $136 Avg $113 Avg

FREE RENT(MONTHS) 12 0 6 9 6 9 8 12 9 6 6 WORKLETTER (PSF) $0.00 $52.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ADJUSTMENTS RENT CONCESSIONS $5.90 $11.25 $13.33 $7.50 $5.94 $10.00 $0.00 $5.58 $36.75 $27.50 AVERAGE RENT PER SF $172 $198 $265 $91 $106 $146 $113 $134 $260 $223 MONTHS FROM VALUE DATE 5591227282934340 TIME (MARKET CONDITIONS) 2.1% 2.1% 3.8% 5.0% 11.3% 11.7% 12.1% 13.8% 14.2% 0.0% TIME ADJUSTED AVERAGE RENT PER SF $175.90 $201.71 $275.33 $95.04 $117.68 $162.80 $126.56 $152.09 $296.54 $223.11 LOCATION -10% -10% -20% 0% -20% -5% -15% -15% -25% 0% QUALITY -10% -20% -10% 15% 15% -10% -15% -5% -15% -10% SIZE -30% -30% -25% -20% -15% -10% -10% -15% -10% -15% CORNER INFLUENCE 0% 0% 0% 0% 0% -10% -10% 0% 0% 0% WINDOW FRONTAGE 5% 5% -10% 10% 0% -15% -15% 0% -15% 0% UTILITY 5%

5% -5% 10% 0% 5% 5% 0% 0% -15%

TOTAL ADJUSTMENT -40% -50% -70% 15% -20% -45% -60% -35% -65% -40% INDICATED AVG FLOOR RENT PER SF $106 $101 $83 $109 $94 $90 $51 $99 $104 $134

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Conclusion of Market Rent for Retail Space

We have analyzed the Union Square area leases negotiated in competitive buildings in the marketplace, along with other leases within comparable prime retail corridors, which range from $250 to $800 per square foot of ground floor area. After adjustments, these leases range from $354 to $660 per square foot.

The multi-level comparables reflected unadjusted blended rents ranging from $83 and $252 per square foot, with an average of $158 per square foot. After adjustments, the multi-level spaces range in average rental rates between $51 and $134 per square foot, with an average of $97 per square foot. The comparables generally have rent increases during the term. The upper level rents ranged between $70 and $350 per square foot. The lower level retail space exhibited rents ranging between $35 and $90 per square foot.

Based upon recent market leasing activity in the area, the subject’s size, layout, construction, location, and condition along with our analysis of the comparables, it is our opinion that the market rent for the corner ground floor space (Citibank) is $575 per square foot, while the Union Square South ground floor retail space is $450 per square foot. Furthermore, the market rent for the ground floor space along East 13th Street or 4th Avenue (Union Square Wine) is estimated at $125 per square foot. We have estimated a market rent for the second floor retail space (Best Buy) at $125 per square foot. Furthermore, the market rent for the lower level retail space (Nordstrom Rack) is estimated at $180 per square foot. Finally, we have assumed the lower level office space market rent at $60 per square foot. A summary of the market rent estimates for the various spaces are summarized below:

ONE UNION SQUARE SOUTH RETAIL FAIR MARKET RENT ESTIMATE NET RENTABLE NET SPACE FLOOR TOTAL RENT AREA (SF) RENT/SF

Citibank Ground-Corner 9,755 $575 $5,609,125 Duane Reade Ground-Union Square So 13,947 $450 $6,276,150 Union Square Wines Ground-13th St. 6,419 $125 $802,375 Best Buy 2nd Floor 46,088 $125 $5,761,000 Regal Cinemas 3rd & 4th Floors 118,779 $50 $5,938,950 Park South Imaging Lower Level Office 9,091 $60 $545,460 Nordstrom Rack Lower Level Retail 32,136 $180 $5,784,480 TOTAL/AVG. 236,215 $130.04 $30,717,540 Rounded: $129.97 $30,700,000 Overall, the subject’s total market rent is projected at $30,700,000 or an average of $129.97 per square foot for the entire subject property (236,215 NRA-SF). The subject’s calendar year 2017 contract base rent is $23,876,340 or $101.08 per square foot. Considering the subject’s construction, location, size, and condition, we are of the opinion that the total contract rent is below current market rents as exhibited by comparable retail spaces and market parameters.

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Market Rental Rate- Movie Theatre Space

Market rent for the theater space within the property has been estimated by analyzing comparable leases exhibited on the summary chart and adjustment grid on the following page. In our analysis, we have considered several lease attributes: rent concessions, time (market conditions), location, utility, size, and quality. Our adjustment for rent concessions considers differences in the comparables for market standard free rent period of three months with the space taken on an "as is" basis. Percentage adjustments between the subject property and the comparable leases were made for each of these factors.

Our adjustment for rent concessions considers the difference in the comparables for market standard free rent of three months and no tenant work letters. The adjustment for rent concessions attempts to quantify ($ per square foot) the differences between market free rent and work letter between the subject and the comparables. The differences between free rent and work letter (+/-) is divided by the comparables lease term, and applied to the beginning “face” rent of the comparable lease. Although this methodology does not take into account amortization of rental increases over the lease term, we believe this is a simplistic approach to understanding the impact of concessions on beginning base rent. We have assumed a 5.0 percent annual increase within the market conditions adjustment. There are three pending leases for movie theatres in New York City. Additionally, there was one theatre lease signed in Downtown Brooklyn in 2013 to the Alamo Draft House. Other than these pending and recent leases there has been a dearth of recent movie theatre leases within the New York City region over the past few years. Therefore, we have expanded our search to include the entire metropolitan New York region and other similar urban areas. The leases in our analysis are located within New York City, Gateway Cinemas within the Rockaway Town shopping center and within a proposed mall in Washington D.C.

The following table summarizes the most recent rental activity for movie theatres within the surrounding New York metropolitan region, albeit many at inferior locations as compared to the subject property. The comparable leases reflect base rent amounts and do not consider any overage rent achieved.

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SUMMARY OF COMPARABLE MOVIE THEATRE RENTS AND ADJUSTMENTS

PROPERTY INFO SUBJECT RENTAL 1 RENTAL 2 RENTAL 3 RENTAL 4 RENTAL 5 RENTAL 6 RENTAL 7 1 Union Square South Confidential Confidential South Street Seaport Proposed Mall City Point Tanger Outlets at the Arches Gateway Cinemas ADDRESS CROSS STREETS New York, NY New York, NY Brooklyn, NY New York, NY Washington DC Brooklyn, NY Deer Park, NY Rockaway, NJ

LEASE INFORMATION TENANT NAME Confidential-Lease Out Confidential- Lease Out Ipic Arc Light Alamo Draft House Regal Cinema Gateway Cinema

TERM December 2016 June 2016 June 2016 June 2015 November 2014 January 2013 May 2008 May 2007 LEASE TYPE 15 20 15 15 20 20 17

LEASE TYPE Net Net Net Net Net Net Net TENANT SIZE 30,000 47,619 39,818 63,583 39,818 63,000 68,000

NO. OF SCREENS 8 7 81471612

ANNUAL RENT $1,950,000 $2,000,000 $1,275,000 $2,829,444 $1,275,000 $2,016,000 $2,250,000

RENT PER SCREEN $243,750 $285,714 $159,375 $202,103 $182,143 $126,000 $187,500

RENT PER SF $65.00 $45.00 $45.00 $44.50 $32.02 $32.00 $33.09

RENT STEPS % Inc. Every 5 Years % Inc. Every 5 Years Annual Inc. Annual Inc. Annual Inc. % Inc. Every 5 Years % Inc. Every 5 Years

FREE RENT (MONTHS) 6 6636363 WORKLETTER $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

ADJUSTMENTS

RENT CONCESSIONS $0.00 $0.00 $0.75 $0.00 $0.40 $0.00 $0.49 EFFECTIVE ADJUSTED

RENT PER SCREEN $243,750 $285,714 $159,376 $202,103 $182,143 $126,000 $187,500

RENT PER SF $65.00 $45.00 $45.75 $44.50 $32.42 $32.00 $33.57

MONTHS FROM VALUE DATE 6 6 18 25 48 105 117

TIME (MARKET CONDITIONS) 2.5% 2.5% 7.6% 10.6% 19.9% 43.6% 0.0%

TIME ADJUSTED

RENT PER SCREEN $249,945 $292,976 $171,528 $223,464 $218,319 $180,880 $187,500 RENT PER SF $65.03 $45.03 $45.83 $44.61 $32.62 $32.44 $33.57

LOCATION 0% 10% 10% 15% 10% 30% 40%

UTILITY -5% 0% 0% -15% 10% 0% 0%

SIZE 0% 0% 0% 10% 0% 10% 5%

QUALITY -10% 0% 0% 0% 5% 5% 0%

TOTAL ADJUSTMENT -15% 10% 10% 10% 25% 45% 45% INDICATED RENT PER SF $212,454 $322,274 $188,681 $245,811 $272,899 $262,276 $271,876 INDICATED RENT PER SF $55.27 $49.53 $50.41 $49.07 $40.77 $47.03 $48.68

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Discussion of Comparable Movie Theatre Rents

We have analyzed recent movie theatre leases negotiated in competitive buildings in the marketplace. The comparables range in size from 7 to 16 screens, or 30,000 to 68,000 square feet. The comparable rents had lease dates between May 2007 and June 2016 and were located in New York City, Long Island, New York, Rockaway, New Jersey, and Washington D.C. The initial contract rents ranged from $126,000 to $285,714 per screen, with an average of $200,762 per screen, or $32.00 to $65.00 per square foot, with an average of $42.37 per square foot.

These comparables are either free-standing locations or located within the base of mixed-use developments. The comparables located within New York City are generally considered to have similar locations as the subject property. However, significant adjustments were required for the comparable rents located outside of New York City. Similarly, the movie theatres vary in construction date, quality and utility. The comparables were net leases whereby the tenants are required to pay its pro-rata share of real estate taxes and expenses. Rent escalation clauses vary, with most having annual percentage increases ranging from 5 to 10 percent every 5 years, or annual increases.

After our adjustments the comparables exhibited a range of $188,681 to $322,274 per screen, with an average of $253,753 per screen, or $40.77 to $55.27 per square foot, with an average of $48.68 per square foot.

Considering the subject’s layout, construction, size, condition, and excellent location along Union Square South within Union Square, and the large multi-level retail leases throughout Manhattan exhibited earlier, it is our opinion the market rent for the multiplex movie theatre space is $50.00 per square foot.

MOVIE THEATRE MARKET RENT TYPE SPACE RENT/SF Movie Theatre $50.00/SF

CONCLUSION OF MARKET RENTS FOR THE SUBJECT RETAIL SPACE

Based on recent leasing activity in the marketplace and our analysis of the comparables, we have concluded the following market rents for the subject’s retail tenants:

CONCLUSION OF IN-LINE RETAIL MARKET RENTS TENANT MARKET LEASE LEASE TYPE RENT INCREASE CATEGORY RENT TERM

Ground Corner $575.00 15 3% Per Annum Gross Gross Ground- Union Square South $450.00 15 3% Per Annum Gross Multi-Level Theatre $50.00 15 10% every 5 years Gross 3% Per Annum Second Floor $125.00 15 15 Gross 3% Per Annum Lower Level Retail $180.00

Gross 3% Per Annum Union Square Wines $125.00 10 Gross 3% Per Annum MRI Center $60.00 10 Considering the subject’s construction, location, size, and condition, we are of the opinion that the existing contract rents are within current market parameters as exhibited by comparable retail properties and market parameters.

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Market Rent Synopsis

The following chart summarizes our market rent conclusion for each tenant category in the subject property.

LEASING ASSUMPTIONS

Ground- Union Multi-Level Lower Level TENANT CATEGORY Ground- Corner Square South Theater Second Floor Retail Un Sq Wines MRI CENTER WEIGHTED ITEMS Renewal Probability 65.00% 65.00% 65.00% 65.00% 65.00% 65.00% 65.00% Market Rent- Net $575.00 $450.00 $50.00 $125.00 $180.00 $125.00 $60.00 Months Vacant 8.00 8.00 8.00 8.00 8.00 8.00 8.00 Tenant Improvements New Leases $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Renewal Leases $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Leasing Commissions New Leases 3.50% 3.50% 3.50% 3.50% 3.50% 4.00% 4.00% Renewal Leases 1.75% 1.75% 1.75% 1.75% 1.75% 2.00% 2.00% Free Rent New Leases 3 3 6 3 3 3 3 Renewal Leases 1 1 3 1 1 1 1

NON-WEIGHTED ITEMS Lease Term (years) 15 15 15 15 15 10 10 Lease Type (reimbursements) Gross Gross Gross Gross Gross Gross Gross 10% Every 5 Contract Rent Increase Projection 3% Per Annum 3% Per Annum 3% Per Annum 3% Per Annum 3% Per Annum 3% Per Annum Years Compiled by Cushman & Wakefield, Inc.

Lease Expirations The lease expiration schedule is an important investment consideration. As leases rollover, the landlord will be required to negotiate a renewal lease with the existing tenant, or to secure a new tenant for the space. The projected lease rollover is exhibited on the following chart:

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During the first five years of the analysis period, a total of 57,401 square feet or 24.30 percent of the subject property is scheduled to expire The observed peak expiration occurs in year seven of the analysis when 50.28 percent of the subject property is scheduled to expire. However, this represents the movie theatre space that has a below market renewal option which we have exercised. Therefore, the peak expiration occurs in year nine of our projected cash flow when Citibank and Nordstrom are projected to expire. Extending to a ten-year period, a total of 264,159 square feet of 111.83 percent of the subject property is scheduled to rollover. This is considered moderate rollover within this market.

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Expense Reimbursements

The majority of the subject’s leases are gross, whereby the tenants are responsible for their pro-rata share of CAM charges and real estate taxes above their base year amounts. Two of the subject’s tenants, Best Buy and the Regal Cinemas are leased on a net basis, whereby the tenants are responsible for their pro-rata share of CAM charges and real estate taxes. We have assumed that future leases in the subject property will be on a gross basis, whereby the tenants will be responsible for their pro-rata share of real estate taxes over a base year and a pro-rata of CAM charges.

Vacancy and Collection Loss

Our cash flow projection assumes a tenant vacancy of 8 months upon lease expiration set against our probability of renewal estimated at 65.00 percent, in addition to a vacancy/global credit loss provision applied to the gross rental income. Based upon the current vacancy in the market, and our perception of future market vacancy, and the creditworthiness of the tenants in the subject building, we have also projected a total vacancy and credit loss of 1.0 percent, except for the credit tenants (Duane Reade, Chase, Nordstrom’s and Best Buy) which we have applied a 0.0 percent credit loss factor only.

Revenue & Expense Analysis

We have developed an opinion of the property’s annual income and operating expenses after reviewing the historical expenses, the 2016 forecasted expenses and the and 2017 budget provided by ownership and the operating performance of similar properties. The 2017 budget did not provide a detailed break-out of the operating expenses. We analyzed each item of expense and developed an opinion regarding what an informed investor would consider typical. The historical revenue and expenses along with developer’s budget for the current year and our opinion of the subject’s income and expenses are presented on the following chart, followed by an analysis of subject property’s revenue and expense.

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SUMMARY OF INCOME & EXPENSE ANALYSIS

Actual 2014 Actual 20152016 Reforecast 2017 Budget 2017 C&W Forecast

Total Per SF Total Per SF Total Per SF Total Per SF Total Per SF POTENTIAL GROSS REVENUE Rental Income $22,370,639 $94.70 $23,512,825 $99.54 $23,790,352 $100.71 $23,718,020 $100.41 $23,775,673 $100.65 CAM Income $934,551 $3.96 $1,203,057 $5.09 $1,200,576 $5.08 $1,191,967 $5.05 $1,378,935 $5.84 Mis Direct Billed Income $4,670 $0.02 $0 $0.00 $653 $0.00 $0 $0.00 $0 $0.00 Other Miscellaneous Income $4,838 $0.02 $6,977 $0.03 $69,615 $0.29 $0 $0.00 $15,000 $0.06 Real Estate Tax Income $4,515,464 $19.12 $5,303,460 $22.45 $6,188,280 $26.20 $6,825,199 $28.89 $6,334,314 $26.82 TOTAL POTENTIAL GROSS REVENUE $27,830,162 $117.82 $30,026,319 $127.11 $31,249,476 $132.29 $31,735,186 $134.35 $31,503,922 $133.37 Vacancy and Collection Loss $0.00 $0.00 $0 $0.00 $0 $0.00 $0 $0.00 ($484,934) -$2.05 EFFECTIVE GROSS REVENUE $27,830,162 $117.82 $30,026,319 $127.11 $31,249,476 $132.29 $31,735,186 $134.35 $31,018,988 $131.32

OPERATING EXPENSES CAM Electric, Gas & Water $471,297 $2.00 $502,948 $2.13 $463,544 $1.96 $476,906 $2.02 $500,000 $2.12 Common Area Maintenance $1,358,749 $5.75 $1,468,056 $6.21 $1,373,409 $5.81 $1,488,977 $6.30 $1,495,000 $6.33 Repairs & Maintenance $341,442 $1.45 $366,209 $1.55 $314,064 $1.33 $307,938 $1.30 $325,000 $1.38 Cleaning Contract $134,444 $0.57 $202,284 $0.86 $174,795 $0.74 $163,300 $0.69 $225,000 $0.95 Insurance $41,935 $0.18 $40,135 $0.17 $31,546 $0.13 $44,191 $0.19 $45,000 $0.19 Security $175,942 $0.74 $226,769 $0.96 $298,937 $1.27 $223,941 $0.95 $250,000 $1.06 General and Administrative $87,185 $0.37 $26,995 $0.11 $51,927 $0.22 $235,201 $1.00 $50,000 $0.21 Legal & Professional Fees** $106,504 $0.45 $102,716 $0.43 $38,596 $0.16 $37,500 $0.16 $100,000 $0.42 Management Fees $447,385 $1.89 $594,922 $2.52 $568,235 $2.41 $480,421 $2.03 $477,391 $2.02 Subtotal $1,806,134 $7.65 $2,062,978 $8.73 $1,941,644 $8.22 $1,969,398 $8.34 $1,972,391 $8.35

Ground Rent $3,512,320 $14.87 $3,512,320 $14.87 $3,512,320 $14.87 $3,512,320 $14.87 $3,512,316 $14.87 Real Estate Taxes* $5,643,432 $23.89 $7,278,927 $30.81 $7,475,558 $31.65 $8,074,022 $34.18 $7,769,949 $141.66

TOTAL EXPENSES $10,961,886 $46.41 $12,854,225 $54.42 $12,929,522 $54.74 $13,555,740 $57.39 $13,254,656 $196.53

NET OPERATING INCOME $16,868,276 $71.41 $17,172,094 $72.70 $18,319,954 $77.56 $18,179,446 $76.96 $17,764,332 $263.39

* The historical and budget Real Estate Taxes provided by ownership are reflective of the ICIP abated taxes. The C&W projection is reflective of unabated taxes. ** Expense of $2,371,704 excuded from the year 2014

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Expense Growth Rate

Reserves for Replacements

It is customary and prudent to deduct an annual sum from effective gross income to establish a reserve for replacing short-lived items throughout the building. These costs may include roof repair, and HVAC upgrades. Our projection of $0.15 per square foot of gross building area is a reasonable amount to cover the cost of capital expenditures over the course of the investment-holding period.

GROUND LEASE SUMMARY

The subject site is encumbered by a 99-year ground lease, which terminates on December 31, 2095. The ground lease is summarized on the following chart:

GROUND LEASE ANALYSIS Lessor (landlord): First Sterling Corporation and West Realty Co.

Lessee (tenant): Union Square Retail Trust, in care of The Related Companies, L.P.

Lease Commencement Date: December 13, 1996

Rent Commencement: July 1, 1998

Lease Expiration Date: December 31, 2095

Base Lease Term: 99 years

Renewal Options: No renewal options

Base Rent: The ground lease has an initial ground rent of $2,500,000 per annum. The ground rent increases 12% every 5 years. In the 6th, 11th and 16th rental periods the ground rent is reset based on a “Revaluation Rent” formula indicated below. Following the respective “Revaluation Periods” the ground rent increases 12 percent every 5 years.

First Period: $2,500,000

Two Period: $2,800,000

Third Period: $3,136,000

Fourth Period: $3,512,320 (Current Ground Rent)

Fifth Period: $3,933,798

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Sixth Period: As mentioned above, the 6th rental period represents the first “Revaluation Period”. We have projected the ground rent to be reset to $8,340,000 as of July 1, 2023 based on the following ground rent reset formula: For the period commencing on the day following the expiration of the Fifth Period (such day being sometimes herein referred to as the “First Revaluation Date”) and continuing for a period of five (5) Lease Years (the “Sixth Period”), Base Rent shall be payable at an annual rate equal to the greater of (I) Revaluation Base Rate as of the First Revaluation Date, and (II) an annual rate equal to the sum of “(x) the annual Lease Base Rental Rate as of the day immediately prior to the First Revaluation Date, plus (y) the Percentage Rent Payments attributable to the Lease Year ending immediately prior to the First Revaluation Date. For purposes of determining the Percentage Rent Payments attributable to such Lease Year, the portion(s) of any Percentage Rent Payments which consist of Alternative Amounts (as opposed to actual payments of Sublease Percentage Rent) shall be deemed to attributable to the periods for which the underlying Sublease Percentage Rent (i.e., the Sublease Percentage Rent in lieu of which the Alternative Amounts are in effect received) would be deemed attributable (determined on a pro-rated basis in the case of Alternative Amounts which are less than the underlying Sublease Percentage Rent which would — otherwise have been payable).

*It should be noted that the sub rent rental rate equates to the product of (i) the sub rent rental rate multiplied by the sub rent percentage. The sub rent percentage rent shall mean a percentage equal to the sum of (i) three percent plus, (ii) a fraction (expressed as a percentage), (A) the numerator is equal to the sum of $2,500,000 and any percentage rent payments and (B) the denominator of which is an amount equal to $9,027,000.

Based on our calculations of the market rent as of the 1st “Revaluation Period” the market rent for the subject retail space is $27,170,828. Therefore, the reset ground rent reflects $8,340,000. We have exhibited the ground rent reset calculation in the Addenda.

Seventh through Tenth Rental Periods: 12% increase every 5 years

Eleventh Rental Period: Second Revaluation Period

Twelfth through Fifteenth Rental Periods: 12% increase every 5 years

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Sixteenth Rental Period: Third Revaluation Period

Seventeenth through ground lease expiration: 12% increase every 5 years

Operating Expenses: The lease is triple net, whereby the tenant is responsible for all operating expenses and real estate taxes.

Investment Considerations

The factors listed below have been considered in our valuation of this property and will have an impact on our selection of all investor rates.

INVESTMENT CONSIDERATIONS Attained Rents Versus Market: The subject's attained rents (exclusive of expense contributions) are below market levels. Given this comparison, the investment rates selected will be slightly more aggressive than market indicators.

NOI Growth: The subject's NOI is expected to grow 2.06 percent per annum from the first year of the analysis through the holding period. This rate of growth is considered acceptable.

Lease Expiration Exposure: Within the first five years of the analysis a total of 24.3 percent of the total net rentable area is scheduled to rollover. Extending to a ten-year period, a total of 111.82 percent of the space is scheduled to expire. The peak expiration occurs in year 7, when a total of 118,779 square feet is scheduled to expire. This is considered a moderate rollover exposure within this market.

Credit Tenants: The subject property is 43.1 percent leased to four investment grade credit tenants (Bed, Bath & Beyond, Chase Bank, Duane Reade and Nordstrom Rack). We have considered the subject's credit tenants when determining our investment rates.

Real Estate Market Trends: Real estate market trends have a significant bearing on the value of real property. The real estate market in which the subject property is located is currently improving.

Tenant Quality: The quality of a property's tenant base is an important factor that is scrutinized by investors prior to acquiring real property. The quality of the subject's tenant roster is considered to be good. Property Rating: After considering all of the physical characteristics of the subject, we have concluded that this property has an overall rating that is good, when measured against other properties in this marketplace.

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Investment Considerations Overview

Interest rates, reflected by the yield on the 10-year Treasury note, help determine the cost of borrowing money for investments. When interest rates are low, financing becomes more affordable and conversely when rates are higher the debt is more expensive. Currently, rates are at record lows. At the December 2015 meeting of the Federal Open Market Committee (FOMC), Federal Reserve Board Chairwoman Janet Yellen announced that the FOMC voted to raise the federal funds rate for the first time in almost 10 years. The initial rate hike was miniscule and the action was just the first step in what will likely be a very lengthy process of monetary policy normalization. It reflected the consensus that a solid foundation was propelling the economic expansion. The Federal Reserve, consistent with its past communication, did not vote to raise the federal funds rate in January, March or April, signaling its willingness to wait for the effects of the global headwinds to dissipate before further normalization. Indicators pointed towards a rate hike in June 2016 but was delayed, as uncertainty around global prospects, “Brexit” and the U.S. presidential election persist, the FOMC has refrained from raising the target federal funds rate, and the path to normalization has been delayed yet again. At its November 2016 meeting, the FOMC maintained the target range for the deferral funds rate at one quarter to one half percent as they wait for further evidence of progress, fortified by the third quarter gains in the U.S. labor market and economic activity. Since the December 2015 meeting of the FOMC, inflation has increased but remains below the Committee’s two percent long-run objective. Many assume the FOMC will raise rates again by one quarter of a percentage point at its next meeting in December 2016.

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Current Economic Conditions

Notable concerns regarding current economic conditions are as follows:

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 Employment growth through the third quarter of 2016 accelerated from second quarter, adding 621,700 new jobs at a 25.6 percent quarter-over-quarter increase. As of October, the Bureau of Labor Statistics reported than in 2016 employment growth has averaged 181,000 per month, trailing the 2015 pace of 229,000 monthly additions. Figures dwindled in October 2016, when nonfarm payroll employment rose by only 161,000, but preliminary evidence indicates a slight rebound through the close of the year.  Labor markets do continue to tighten. In third quarter, unemployment held steady at 4.9 percent put pressure on wages has remained strong and elevated average hourly wages by 2.7 percent. Continued wage growth over the coming months should boost income and spending at a faster pace through the close of the year. As the unemployment rate approaches a range traditionally associated with full employment the upward pressure on wages will intensify.  Cushman & Wakefield Research continues to anticipate a moderate growth path for the national economy, maintaining its post-recovery average over the next year with potential acceleration as a result of new policies. With the volatility of the Chinese economy and “Brexit” slowing slightly, it’s anticipated that business investment will improve and contribute positively to stronger economic growth through the close of 2016 but more impressively in 2017. U.S. Real Estate Market Implications

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markets now reporting declines and smaller number posting increases in their average cap rates. The magnitude of these shifts are very similar to what was reported a year ago. This quarter’s average overall cap rate shifts suggest varied viewpoints by investors across the industry and though investors hold a positive outlook for the near term, most expect overall cap rates to hold steady over the next six months. At 7.21 percent, the Houston office market’s overall cap rate is its highest since the close of 2014 and the majority of investors predict that the market’s overall cap rates will continue to rise. The best performing markets in third quarter were the San Francisco office market, the Manhattan office market and the national warehouse market, which all experienced significant cap rate drops and continue to be top attractions for investors. Overall, CBD markets reported lower cap rates than their suburban counterparts and are considered lower investment risks. Even though surveyed investors hold a positive outlook for the commercial real estate industry for the near term, they are mindful of the potential for interest rate increases, market corrections and the need for caution.

The following graph compares national transaction volume by property between 2004 and third quarter 2016:

Conclusion The slowdown in momentum in the first half of the year was notable but unable to upset the current economic expansion. Powered by continued improvements in the labor markets, consumers are and will continue to spend robustly. The headwinds created by slowing global demand (led by a deceleration in China’s economy) and by the uncertainty in financial markets around “Brexit” did diminish trade and investment. As 2016 comes to a close, we expect the trends of rising real GDP, high consumer confidence, high investment activity and a robust labor market to support economic expansion. Though monetary policy normalization is expected to unfold at a slower pace than before, economic conditions will likely warrant more rate hikes next year with the next increase expected as soon as December. Commercial real estate markets have fared well: vacancy rates are falling, rent growth is positive and, for some asset classes, reaching a cyclical peak, and leasing velocity remains healthy. Third quarter activity has instilled uncertainty in some investors as they brace for a potential downturn but a slowdown in sales volume and pricing may be in line with a broader return to a more sustainable investment environment.

Investor Survey Trends

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The investment criteria derived from the improved property sales within the Sales Comparison Approach section of this report also lend support to national investor surveys of investment parameters. Following is a brief review of effective gross income multipliers, overall rates, forecasted holding periods, internal rates of return and terminal overall rates from several Manhattan retail property sales.

COMPARABLE OFFICE BUILDING SALES SUMMARY

No. Sale Date Name and Location Price Price/NRA OAR Forecast IRR Terminal OAR 1 Jun-16 432-440 Park Avenue $411,125,625 $3,077.29 ------2 May-16 155 Mercer Street $98,000,000 $6,717.39 2.61% 10 5.00% 4.00% 3 Nov-15 445 Fifth Avenue $68,000,000 $3,701.49 4.24% 10 6.00% 5.00% 4 Jun-15 The Shops at Columbus Circle $1,040,000,000 $2,255.57 4.14% 13 6.00% 5.00% 5 Jun-15 150 West 34th Street $355,500,000 $4,571.76 1.02% ------6 Feb-15 55 1/2 Greene Street (470 Broome Street) $55,000,000 $2,727.63 ------7 Jan-15 503 Broadway $280,000,000 $6,793.64 -- 10 6.50% 5.50% 8 Sep-14 530 Fifth Avenue $295,000,000 $5,264.19 0.39% 10 5.75% 4.50% 9 Jul-14 697-699 Fifth Avenue $700,000,000 $28,340.08 0.89% 10 5.75% 4.50% 10 Feb-14 170 Broadway $70,100,000 $3,650.28 ------Low $55,000,000 $2,255.57 0.39% 10 5.00% 4.00% High $1,040,000,000 $28,340.08 4.24% 13 6.50% 5.50% Median $280,000,000 $3,701.49 1.82% 10 6.00% 5.00% Average $337,272,563 $6,709.93 2.21% 11 5.83% 4.75% Compiled by Cushman & Wakefield, Inc. It should be noted that the internal rate of return and terminal overall capitalization rate information reflected in the above chart was extracted from cash flows prepared by Cushman & Wakefield, Inc. from appraisals they prepared of these properties. This information is not provided in publications, but is a technique which only Cushman & Wakefield, Inc. employs in their analysis of New York City retail building sales from an appraisal standpoint. The Cushman & Wakefield, Inc. internal rate of return and terminal overall capitalization rate information are confirmed directly from the owners of the respective properties when the properties were appraised.

Investor Survey Trends

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INVESTOR SURVEY HISTORICAL RESULTS

OAR (average) Terminal OAR (average) IRR (average)

8.50%

8.25%

8.00%

7.75%

7.50%

7.25% RATES

7.00%

6.75%

6.50%

6.25%

6.00% 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 ANALYSIS PERIOD

Source: Pw C Real Estate Investor Survey

Terminal Capitalization Rate Selection

We based the estimate of property value at reversion on assumed resale at the end of Year 10, using our forecast of Year 11 net operating income. The reversion value was calculated by applying a capitalization rate of 4.75 percent to calendar year 2027 NOI and subtracting sales expenses of 4.00 percent. The net cash flows and the net reversion were discounted to net present value using a discount rate of 6.00 percent, the derivation of which is discussed below.

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rates for Real Estate Investor Survey National Strip Centers as of the most recent quarter:

TERMINAL CAPITALIZATION RATES (OARout) Survey Date Range Average Fourth Quarter 2016 - PwC 4.75% 9.75% 6.47% PwC - Refers to National Strip Shopping Center market regardless of class or occupancy

In addition, we examined the terminal rates derived from the improved property sales exhibited in Addendum C of this report:

COMPARABLE OFFICE BUILDING SALES TERMINAL CAPITALIZATION RATE SUMMARY

No. Property Terminal Rate 1 432-440 Park Avenue --

2 155 Mercer Street 4.00%

3 445 Fifth Avenue 5.00%

4 The Shops at Columbus Circle 5.00%

5 150 West 34th Street --

6 55 1/2 Greene Street (470 Broome Street) --

7 503 Broadway 5.50%

8 530 Fifth Avenue 4.50%

9 697-699 Fifth Avenue 4.50%

10 170 Broadway --

ANALYSIS Low 4.00% High 5.50% Median 4.75% Average 4.75% Compiled by Cushman & Wakefield, Inc. The terminal capitalization rates derived from the improved property sales exhibited above are between 4.00 and 5.50 percent, with an average of 4.75 percent. The terminal capitalization rates derived from the improved property the PwC investor survey ranged between 4.75 and 9.75 percent, with an average of 6.47 percent. A premium was added to today’s rate to allow for the risk of unforeseen events or trends which might affect our estimate of net operating income during the holding period, including a possible deterioration in market conditions for the property. Investors typically add 25 to 150 basis points to the “going-in” rate to arrive at a terminal capitalization rate, according to Cushman & Wakefield’s periodic investor surveys.

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Discount Rate Analysis

The most recently published PricewaterhouseCoopers, Inc. survey indicates that investors considered acceptable internal rates of return within the following range:

DISCOUNT RATES (IRR) Survey Date Range Average PwC Fourth Quarter 2016 5.50% - 10.75% 7.39% PwC - Refers to National Strip Shopping Center market regardless of class or occupancy

In addition, we examined the discount rates derived from the improved property sales exhibited in Addendum C of this report:

COMPARABLE OFFICE BUILDING SALES DISCOUNT RATE SUMMARY (IRR)

No. Property Discount Rate 1 432-440 Park Avenue --

2 155 Mercer Street 5.00%

3 445 Fifth Avenue 6.00%

4 The Shops at Columbus Circle 6.00%

5 150 West 34th Street --

6 55 1/2 Greene Street (470 Broome Street) --

7 503 Broadway 6.50%

8 530 Fifth Avenue 5.75%

9 697-699 Fifth Avenue 5.75%

10 170 Broadway --

ANALYSIS Low 5.00% High 6.50% Median 6.00% Average 5.83% Compiled by Cushman & Wakefield, Inc. Summary of Discount Rate Selection

Several sources of discount rate (internal rate of return) information were analyzed including Investor Survey data. The internal rates of return cited by the PricewaterhouseCoopers, Inc. survey ranged between 5.50 and 10.75 percent, with an average of 7.39 percent. The discount rates derived from the Sales exhibited above ranged from 5.00 percent to 6.50 percent, with an average of 5.83 percent.

In our selection of a discount rate for the subject property, we have examined mortgage rates available today. The

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interest rate for a 30-year fixed rate mortgage is currently below 5.00 percent. In addition, the current discount rate, or the interest rate charged by the Federal Reserve when banks borrow money, of 0.25 percent, although has increased recently, is still near historic lows.

The subject property is a 5-level (inclusive of lower level) retail condominium unit within a luxury mixed use residential building located in the Union Square neighborhood of Manhattan. The property is 100.0 percent leased on a long-term basis at significantly below market rents to good quality tenants and is anchored by national retail tenants such as Regal Cinemas, Best Buy, and Nordstrom Rack. Furthermore, 43.1 percent of the subject is leased to credit tenants. The subject’s Net Operating Income (NOI) is expected to increase 2.06 percent per annum from year one through the analysis period. Therefore, taking into consideration the subject’s location, size, condition, long-term ground lease, below market contract rents, construction, tenant quality, and returns expected by investors in the current market in relation to other comparable properties, we discounted the cash flows at 6.00 percent. Our selection of discount rate is considered reasonable given the projected cash flow of the property and the subject ground lease.

Our selected discount rate is considered reasonable given the respective cash flow of the subject property. In addition, an urban retail center such as the subject property would generally have a discount rate within the low end of the range of the comparable sales and referenced investor surveys. The selected discount rate is reflective of the overall quality of the real estate, and perceived durability of the income, along with the property's projected cash flow.

Discounted Cash Flow Analysis and DCF Summary Table

The ARGUS - Version 15 cash flow is presented on the following page. The cash flow commencement date is January 01, 2017. Based on the rates selected, the value via the Yield Capitalization analysis is estimated at $375,000,000, rounded. The reversion contributes 65.81 percent to this value estimate. Our cash flow projections and valuation matrix are presented on the following pages.

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ANNUAL CASH FLOW REPORT Annual Retail Condominium Unit Within Growth 1234567 8 91011Year 1 - For the Years Beginnning Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26 Jan-27 For the Years Ending Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27 Year 10

Base Rental Revenue$ 23,869,568 $ 24,432,075 $ 24,819,943 $ 25,934,029 $ 26,580,710 $ 26,638,109 $ 27,007,628 $ 27,426,645 $ 30,032,429 $ 32,407,441 $ 33,133,448 3.46% Absorption & Turnover Vacancy 0 0 0 (219,194) 0 0 0 0 (3,608,270) 0 0 Base Rent Abatements (93,895) 0 0 (124,210) 0 0 0 0 (2,044,686) 0 0 -100.00% Scheduled Base Rental Revenue$ 23,775,673 $ 24,432,075 $ 24,819,943 $ 25,590,625 $ 26,580,710 $ 26,638,109 $ 27,007,628 $ 27,426,645 $ 24,379,473 $ 32,407,441 $ 33,133,448 3.50%

Real Estate Taxes 6,334,314 6,580,814 6,809,040 7,044,116 7,293,165 7,549,685 7,813,900 8,086,042 8,277,693 9,262,512 9,554,398 4.31% CAM Income 1,378,935 1,409,169 1,457,464 1,286,082 1,301,799 1,341,029 1,297,685 1,297,537 1,289,386 1,370,729 1,410,382 -0.07% Total Reimbursement Revenue$ 7,713,249 $ 7,989,983 $ 8,266,504 $ 8,330,198 $ 8,594,964 $ 8,890,714 $ 9,111,585 $ 9,383,579 $ 9,567,079 $ 10,633,241 $ 10,964,780 3.63%

Miscellneous Income 15,000 15,450 15,914 16,391 16,883 17,389 17,911 18,448 19,002 19,572 20,159 3.00% TOTAL GROSS REVENUE$ 31,503,922 $ 32,437,508 $ 33,102,361 $ 33,937,214 $ 35,192,557 $ 35,546,212 $ 36,137,124 $ 36,828,672 $ 33,965,554 $ 43,060,254 $ 44,118,387 3.53%

General Vacancy (315,039) (324,375) (331,024) (122,370) (351,926) (355,462) (361,371) (368,287) 0 (430,603) (441,184) 3.53% Collection Loss (169,895) (178,548) (184,493) (186,388) (192,535) (195,303) (200,420) (206,521) (211,268) (216,513) (221,942) 2.73% EFFECTIVE GROSS REVENUE$ 31,018,988 $ 31,934,585 $ 32,586,844 $ 33,628,456 $ 34,648,096 $ 34,995,447 $ 35,575,333 $ 36,253,864 $ 33,754,286 $ 42,413,138 $ 43,455,261 3.54%

Real Estate Taxes 7,769,949 8,003,047 8,243,139 8,490,433 8,745,146 9,007,500 9,277,725 9,556,057 9,842,739 10,138,021 10,442,162 3.00% CAM 1,495,000 1,539,850 1,586,045 1,633,627 1,682,636 1,733,115 1,785,108 1,838,661 1,893,821 1,950,636 2,009,155 3.00% Management Fee 477,391 488,642 496,399 518,681 531,614 532,762 540,153 548,533 600,649 648,149 662,669 3.46% Ground Rent 3,512,316 3,723,062 3,933,804 3,933,804 3,933,804 3,933,804 6,136,902 8,340,000 8,340,000 8,340,000 8,340,000 10.09% TOTAL OPERATING EXPENSES$ 13,254,656 $ 13,754,601 $ 14,259,387 $ 14,576,545 $ 14,893,200 $ 15,207,181 $ 17,739,888 $ 20,283,251 $ 20,677,209 $ 21,076,806 $ 21,453,986 5.29%

NET OPERATING INCOME$ 17,764,332 $ 18,179,984 $ 18,327,457 $ 19,051,911 $ 19,754,896 $ 19,788,266 $ 17,835,445 $ 15,970,613 $ 13,077,077 $ 21,336,332 $ 22,001,275 2.06%

Capital Reserves 35,432 36,495 37,590 38,718 39,879 41,076 42,308 43,577 44,885 46,231 47,618 3.00% Tenant Improvements 75,758 0 0 0 0 0 0 0 0 0 0 -100.00% Leasing Commissions 375,000 0 0 268,030 0 0 0 0 6,293,579 0 0 -100.00% TOTAL LEASING & CAPITAL COSTS$ 486,190 $ 36,495 $ 37,590 $ 306,748 $ 39,879 $ 41,076 $ 42,308 $ 43,577 $ 6,338,464 $ 46,231 $ 47,618 -23.01%

CASH FLOW BEFORE DEBT SERVICE$ 17,278,142 $ 18,143,489 $ 18,289,867 $ 18,745,163 $ 19,715,017 $ 19,747,190 $ 17,793,137 $ 15,927,036 $ 6,738,613 $ 21,290,101 $ 21,953,657 2.35%

Implied Overall Rate 4.74% 4.85% 4.89% 5.08% 5.27% 5.28% 4.76% 4.26% 3.49% 5.69% Cash on Cash Return 4.61% 4.84% 4.88% 5.00% 5.26% 5.27% 4.74% 4.25% 1.80% 5.68%

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DISCOUNTED CASH FLOW MODELING ASSUMPTIONS VALUATION SCENARIO: Market Value As-Is GENERAL CASH FLOW ASSUMPTIONS GROWTH RATES Cash Flow Software: ARGUS - Version 15 Market Rent-Retail: 3.00% Cash Flow Start Date: January 1, 2017 Consumer Price Index (CPI): 3.00% Calendar or Fiscal Analysis: Fiscal Expenses: 3.00% Investment Holding Period: 10 Years Tenant Improvements: 3.00% Analysis Projection Period: 11 Years Real Estate Taxes: 3.00%

VACANCY & COLLECTION LOSS RATES OF RETURN Global Vacancy: 1.00% Internal Rate of Return: (Cash Flow) 6.00% Global Collection Loss: 1.00% Internal Rate of Return: (Reversion) 6.00% Total Vacancy and Collection Loss 2.00% Terminal Capitalization Rate: 4.75% Reversionary Sales Cost: 4.00% Credit Tenant Overide Rate (Vacancy): 0.00% Credit Tenant Overide Rate (Collection Loss) 0.00% VALUATION CAPITAL EXPENDITURES Market Value As-Is $377,302,890 Reserves for Replacement ($/SF): $0.15 LESS Curable Depreciation $0 Adjusted Value $377,302,890 Rounded to nearest $5,000,000 $375,000,000 Value $/SF $1,587.54

Compiled by Cushman & Wakefield, Inc. The following graph depicts the forecasted change in both net income and net cash flow over the analysis period.

$25,000,000

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$- 1234567891011

Net Operating Income Cash Flow Before Debt Service

The results of the Yield Capitalization analysis are presented below:

PRICING MATRIX - Market Value As-Is Terminal Discount Rate (IRR) for Cash Flow Cap Rates 5.50% 5.75% 6.00% 6.25% 6.50% 4.25%$ 422,968,919 $ 414,640,784 $ 406,513,989 $ 398,583,072 $ 390,842,733 4.50%$ 406,805,507 $ 398,855,446 $ 391,097,020 $ 383,525,038 $ 376,134,464 4.75%$ 392,343,507 $ 384,731,722 $ 377,302,890 $ 370,052,061 $ 362,974,434 5.00%$ 379,327,706 $ 372,020,371 $ 364,888,173 $ 357,926,381 $ 351,130,407 5.25%$ 367,551,506 $ 360,519,625 $ 353,655,810 $ 346,955,528 $ 340,414,382

IRR Reversion 5.50% 5.75% 6.00% 6.25% 6.50% Cost of Sale at Reversion: 4.00% Percent Residual: 65.81% Rounded to nearest $5,000,000 $375,000,000 $1,587.54 Based on the rates selected, the value via the Yield Capitalization analysis is estimated at $375,000,000, rounded. The reversion contributes 65.81 percent to this value estimate.

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Direct Capitalization Method

In the direct capitalization method, we estimated market value by dividing net operating income by an overall rate derived from our analyses of market sales and computed by dividing the net operating income from a sold property by its sale price. The overall capitalization rates derived from the sales detailed below are between 0.39 and 4.24 percent with an average of 2.21 percent. It should be noted that the lower end of the capitalization rates were derived from properties that had leases significantly below market rents. The overall capitalization rates derived from the most applicable improved property sales are shown below.

COMPARABLE RETAIL BUILDING SALES OVERALL CAPITALIZATION RATE SUMMARY

No. Property Capitalization Rate 1 432-440 Park Avenue -- 2 155 Mercer Street 2.61% 3 445 Fifth Avenue 4.24% 4 The Shops at Columbus Circle 4.14% 5 150 West 34th Street 1.02% 6 55 1/2 Greene Street (470 Broome Street) -- 7 503 Broadway -- 8 530 Fifth Avenue 0.39% 9 697-699 Fifth Avenue 0.89% 10 170 Broadway -- ANALYSIS Low 0.39% High 4.24% Median 1.82% Average 2.21% Compiled by Cushman & Wakefield, Inc. These sales are the most recent comparable transactions with the subject property and located within prime and secondary commercial corridors. These sales are the best indicators of current investment parameters in the market for retail properties in Manhattan.

In our selection of the capitalization rate we have considered the subject’s location, quality, and tenancy, below market contract rents, projected cash flow and quality of construction. . In addition, we have adjusted the year ones NOI for the $93,892 in base rent abatements. Therefore, in the context of the direct capitalization method, a going- in rate of 4.50 percent is considered reasonable, compensating the typical buyer for the risk inherent in investing in this building. We have applied this rate in the direct capitalization method. A summary of the direct capitalization method is shown below.

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DIRECT CAPITALIZATION METHOD Market Value As-Is NET OPERATING INCOME $17,858,227 $75.60 Sensitivity Analysis (0.25% OAR Spread) Value $/SF NRA Based on Low-Range of 4.25% $420,193,576 $1,778.86 Based on Most Probable Range of 4.50% $396,849,489 $1,680.04 Based on High-Range of 4.75% $375,962,674 $1,591.61 Preliminary Value $396,849,489 $1,680.04 Rounded to nearest $1,000,000 $397,000,000 $1,680.67 $396,849,489 ADJUSTMENTS TO PRELIMINARY VALUE LESS Base Rent Abatement ($93,895) ($0.40) Indicated Value $396,755,594 $1,679.64 Rounded to nearest $5,000,000 $395,000,000 $1,672.21 Compiled by Cushman & Wakefield, Inc. Based on the rate selected, our value via the Direct Capitalization Method is estimated at $395,000,000, rounded.

Income Capitalization Approach conclusion

INCOME CAPITALIZATION APPROACH CONCLUSION Market Value Methodology As-Is PSF Discounted Cash Flow $375,000,000 $1,587.54 Direct Capitalization $395,000,000 $1,672.21 Income Approach Conclusion $385,000,000 $1,629.87 Compiled by Cushman & Wakefield, Inc.

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Addendum C: Comparable Improved Retail Sales

On the following page, we present a summary of the improved properties that we compared to the subject property that reflect a range in unadjusted unit prices of $2,255.57 and $28,340.08 per square foot. The first year overall capitalization rates of the sales range from 0.39 to 4.24 percent, with an average of 2.21 percent.

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SUMMARY OF IMPROVED SALES PROPERTY INFORMATION SALE DATA FINANCIAL DATA

Property Name Land Area Net Rentable Sale Grantor/ NOI/ Occupancy No. Location (SF) Area (SF) Date Grantee Price Price/NRA SF OAR at Sale 1 432-440 Park Avenue 40 Park AN/W/C 56th Street 133,600 2016 Jun-16 Macklowe Properties / $411,125,625 $3,077.29 -- -- 0% East Side, Manhattan 56th & Park (NY) Owner LLC

Comments: Sale of a 6-story, plus lower level, commercial condominium Illuminated Park Avenue Cube totaling 133,600 square feet of net rentable area within an 89-story residential building located at 432 Park Avenue, on the northwest corner of East 56th Street within the East Side neighborhood of Manhattan. The property comprises 13,200 square feet of retail space and 70,400 square feet of commercial space within the park illuminated cube building, 30,000 square feet of underground concourse retail space and 20,000 square feet of retail space within the neighboring condo tower that will be connected by the underground concourse totaling 133,600 square feet of net rentable area. The entire commercial condominium anticipates to be completed by the fourth quarter of 2016.

2 155 Mercer Street Mercer SB/w West Houston & Prince Streets 14,589 1900 / 2014 May-16 Thor Equities / $98,000,000 $6,717.39 $175.06 2.61% 100% SoHo, Manhattan Confidential

Comments: Sale of a 3-story retail building totaling 14,589 rentable square feet of net rentable area located along the west side of Mercer Street between West Houston and Prince Streets within the SoHo neighborhood of Manhattan. The building comprises 3,875 square feet on the ground floor, 3,506 square feet on the second floor, 2,774 square feet on the third floor and 4,452 square feet on the lower level totaling 14,589 square feet of net rentable area. At the time of sale, the entire building was leased to Dolce & Gabbana through November 2022. The property was purchased based on an overall capitalization rate of 2.61 percent. 3 445 Fifth Avenue Fifth AveN/E/C East 39th Street 18,371 1986 Nov-15 Thor 445 Fifth Avenue / $68,000,000 $3,701.49 $156.79 4.24% 100.00% Grand Central, Mahattan HGI Acquisitions, LLC

Comments: Sale of a 3-level retail condominium unit totaling 18,371 square feet of net rentable area within a 33-story residential building located at 445 Fifth Avenue on the northeast corner of East 39th Street within the Grand Central neighborhood of Manhattan. The property comprises 5,815 square feet of net rentable area on the ground floor (31%), 8,391 square feet on the second floor (49%) and 3,625 square feet on the lower level (20%) totaling 18,371 square feet of net rentable area. At the time of sale, the property was 100 percent to three retail tenant inclusive of Charming Charlie and two local retailers. The property was purchased based on an overall capitalization rate of 4.24 percent. 4 The Shops at Columbus Circle at Colum10 Columbus Circle 461,080 2004 Jun-15 JV B/w Henley Holding Company & GP $1,040,000,000 $2,255.57 $93.46 4.14% 99% West Side A/R Retail LC and A/R Garage LLC (c/o The Related Companies)

Comments: Sale of 6-level commercial condominium unit known as The Shops at Columbus Circle located at the base of a 55-story, twin tower mixed-use complex known as the Time Warner Center featuring the 890,000 square foot world headquarters of Time Warner, approximately 198 luxury residential condominiums, 347,070 square feet (GAL) of multi-level retail space, a 248 room luxury Mandarin Oriental Hotel, the Jazz @ Lincoln Center performance center, 265,000 square feet of Class A office space and a 504 space, below grade parking garage. The entire complex is approximately 2.1 million square feet and is situated on a 149,560 square foot (3.43 acre) parcel of land. The property is among the highest grossing retail centers in terms of tenant sales per square foot in the country and is considered a trophy retail asset. On June 30, 2015 a joint venture between Henley Holding Company and GP purchased a 43.125 percent interest in the subject property from the A/R Retail LC and A/R Garage LLC (c/o The Related Companies) for $1.04 billion ($1.04 billion represents the 100 percent interest in the property). The property comprises 461,080 square feet of net rentable area and has been anchored by Whole Foods (57,957) and Equinox Columbus Center (41,756) since 2004, when the center was constructed. At the time of sale, the property was 98.5 percent leased. The property was purchased based on an overall capitalization rate of 4.14 percent.

5 150 West 34th Street West 34th B/w Sixth and Seventh Avenues 77,760 1998 Jun-15 F-IX U.S. Acquisitions, L.L.C. c/o Starwood Capital Grou $355,500,000 $4,571.76 $46.63 1.02% 100% Herald Square, Manhattan Vornado Realty Trust

Comments: Sale of a 4-story, plus lower level, single tenant retail building that contains a total net rentable area of 77,760 square feet (inclusive of 19,922 SF lower level). The entire property is leased by Old Navy until May 31, 2019 at significantly below current market levels. The tenant also has two 5-year renewal options at 100.0 percent of fair market rent value which could extend the lease term to May 31, 2029. The subject is Old Navy’s flagship store, and represents its highest grossing store in the country. The subject is located along the prime 34th Street retail corridor across the street from Macy’s flagship department store, and just east of Penn Station and Madison Square Garden. The property was purchased a year ago for $252,000,000 which represents a 41 percent increase in value. The implied capitalization rate in year 7, upon the expiration of the lease is projected to be 6.87. The subject was purchased based on an overall capitalization rate of 1.41 percent.

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SUMMARY OF IMPROVED SALES PROPERTY INFORMATION SALE DATA FINANCIAL DATA

Property Name Land Area Net Rentable Sale Grantor/ Occupancy No. Location (SF) Area (SF) Date Grantee Price Price/NRA NOI/SF OAR at Sale 6 55 1/2 Greene Street (470 Broome treet (470N/W/C Broome Street 20,164 1915/2015 Feb-15 Bianca USA Real Estate, Inc. / $55,000,000 $2,727.63 -- -- 0% SoHo, Manahattan Thor 470 Broome LLC

Comments: Sale of a 4-level retail condominium unit totaling 20,164 square feet of net rental area within 55 1/2 Greene Street a 5-story, residential building located at the northwest corner of Greene and Broome Street within the SoHo neighborhood of Manhattan. Thor 470 Broome LLC purchased the property from Bianca USA Real Estate, Inc. in February 2015 for $55,000,000, inclusive of tenant buyout. The property comprises 6,600 square feet on the ground floor (33%) 4,550 square feet on the lower level (23%) 4,494 square feet on the second floor (22%) and 4,520 square feet on the third floor (22 %) totaling 20,164 square feet of net rentable area. At the time of sale, the property was 100 percent leased to SICIS, an international mosaic tile company. However, the tenant was bought out and vacated the property three months after the time of the sale. The sale price is inclusive of a $10.0 million dollar buyout of the existing tenant.

7 503 Broadway 3 BroadwB/w Broome & Spring Streets 41,215 1900 Jan-15 FCF SoHo, LLC $280,000,000 $6,793.64 -- -- 0% SoHo, Manhattan 503 Broadway LLC

Comments: Sale of a 3-level retail condominium unit totaling 41,215 square feet of net rentable area within a newly renovated 5-story office condominium building located at 503-511 Broadway within the SoHo neighborhood of Manhattan. The property contains 13,000 square feet on the ground floor (32%), 10,000 square feet within the basement (24%) and 18,215 square feet on the second floor (44%). The purchase represents a predetermined buyout that was negotiated in October 2013. The buyer, Inditex, is a parent company of Zara. Zara will occupy the entire space as an owner-user. 8 530 Fifth Avenue Fifth AveB/w West 44th and West 45th Street 56,039 1957 Sep-14 530 Holdings LP / $295,000,000 $5,264.19 $20.53 0.39% 47% Grand Central, Manhattan JV Thor Equities, RXR & General Growth Properties

Comments: Sale of a lower lever, grade and 2nd floor retail condominium a within 530 Fifth Avenue, a 26-story office and retail building located along Fifth Avenue between West 44th and West 45th Streets. 530 Fifth Avenue was sold to a joint venture of Thor Equities, General Growth Properties and RXR Realty for $595 million. Subsequently to the sale, 530 Fifth Avenue will be separated into a retail condominium unit (Thor Equities, General Growth Properties) and an office condominium unit (RXR Realty). The retail space is allocated 49.6 percent of the property’s real estate tax burden. At the time of the sale the retail condominium was 47.19 percent leased to 4 retail tenants. There are four Fifth Avenue spaces and a small lobby store. Thor Equities and General Growth Properties intend to renovate the retail at a cost of $6 million. The renovation includes new storefronts up to the 2nd floor, converting the 2nd floor from office to retail use and creating multi-level retail boxes. 9 697-699 Fifth Avenue 99 Fifth AB/w 56th & 57th Streets 24,700 1904 Jul-14 Richemont / $700,000,000 $28,340.08 $252.95 0.89% 100% Plaza District, Manhattan 1990 Vornado & Crown Acquisitions

Comments: Sale of the 3-level retail condominium unit within the St. Regis Hotel and the adjoining 5-story single tenant retail building located at 697 Fifth Avenue in the Plaza District of Manhattan. The St. Regis retail condominium contains 7,646 square feet and is leased to DeBeers. DeBeers subleased part of its space to Tag Hauer. The retail building at 697 Fifth Avenue contains 17,091 square feet and was net leased to Bottega Veneta. The seller acquired the property in October 2012 from GFC Fifth Avenue LLC, an joint venture group. At the time of sale, the existing leases were approximately 80 percent below current market rent levels. The retail tenants, De Beers and Bottega Veneta, are scheduled to expire in January 2019 and January 2016, respectively. The property was purchased based on an overall capitalization rate of 0.89 percent and and increases to 3.39 percent in year 3.

10 170 Broadway 0 BroadwS/E/C Maiden Lane 19,204 1920 / 2014 Feb-14 170 Broadway Retail, LLC / $70,100,000 $3,650.28 -- -- 0% Downtown, Manhattan 170 Broadway NYC LP (Thor Equities)

Comments: Sale of a 3-level retail condominium unit within 170 Broadway, an 18-story former Class B office building located at the southeast corner of Maiden Lane within the Financial District (“FiDi”) neighborhood of Manhattan. At the time of sale, the property underwent a conversion to a 243-room Marriott Residence Inn Hotel. The retail condominium was completed in the fourth quarter of 2014 and comprises 5,846 square feet on the ground floor (30%), 7,213 on the second floor (38%), 4,281 square feet on the mezzanine level (22%), and 1,864 square feet on the lower level (10%) totaling 19,204 square feet of net rentable area. The property features a new 2-story glass façade along the entire blockfront facing Broadway and Maiden Lane. At the time of sale, the retail property was vacant and in raw condition. Subsequent to the sale, the buyer leased the entire retail condominium to the Gap for a 15 year term.

STATISTICS Low 14,589 1,900 $55,000,000 $2,255.57 $20.53 0.39% 0.00% High 461,080 2,016 $1,040,000,000 $28,340.08 $252.95 4.24% 100.00% Mean 86,672 1,969 $337,272,563 $6,709.93 $124.24 2.21% 54.55% Median 32,958 1,988 $287,500,000 $4,136.62 $125.13 1.82% 72.75% Compiled by Cushman & Wakefield, Inc.

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Addendum D: Ground Rent Calculation

Supporting Schedule -- Scheduled Base Rental Revenue Contract Rent as of July 2023 For the Years Ending Tenant Suite Occupied Area Jun-2024 Best Buy G & 2 46,088 4,126,720 Best Buy G & 2 Citibank 100 9,755 Citibank 100 5,901,775 Duane Reade 110 13,947 4,023,250 Nordstrom G & 2 32,136 Nordstrom G & 2 4,665,600 Park South Imaging 1 9,091 752,250 Regal Cinemas 4 & 5 118,779 Regal Cinemas 4 & 5 6,723,994 Union Square Wines 120 6,419 977,239 ______Total Amount Per Year 236,215 27,170,828 ======Weighted Average Per SqFt 115.07 ======

Ground Rent as of July 2013 (12% Increase over Previous): $3,512,316 Ground Rent as of July 2018 (12% Increase over Previous): $3,933,794 Ground Rent as of July 2023 (30.69% of Base SubRent As of July 2023)*: $8,340,002 *It should be noted that the subrent rental rate equates to the product of (i) the subrent rental rate multiplied by the subrent percentage. The subrent percentage rent shall mean a percentage equal to the sum of (i) three percent plus, (ii) a fraction (expressed as a percentage), (A) the numerator is equal to the sum of $2,500,000 and any percentage rent payments and (B) the denominator of which is an amount equal to $9,027,000.

SubRent Percentage Calculation 3% PLUS 3.00% = $2,500,000 / $9,027,000, OR (27.69%) 27.69% SubRent Percentage Calculation Conclusion: 30.69%

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Addendum E: Qualification of the Appraisers

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Charles R. Looney Appraiser Valuation & Advisory Cushman & Wakefield, Inc.

James P. Stuckey Jr. Director Valuation & Advisory Practice Group Member | Retail Cushman & Wakefield, Inc.

NEW YORK

CUSHMAN & WAKEFIELD 2

John A. Katinos, MAI Executive Director Valuation & Advisory Practice Group Member | Retail Cushman & Wakefield, Inc.

Douglas H. Larson Executive Director

1290 Av enue of the Americas New York, NY 10104 Direct +1 212 841 5051 Fax +1 212 479 1838 [email protected] cushmanwakefield.com

March 17, 2017

To:

Related Commercial Portfolio Ltd.

RE: Va lue Appraisa ls – Consent to include within Financial Statements

We hereby give our full consent to Related Commercial Portfolio Ltd. (the "Company") to the inclusion of our Appraisal Report dated March 9, 2017 (Effective date – December 31, 2016) regarding Gateway Ce nter II, in its entirety, within the Company's Financial Statements for December 31, 2016, to be published by the Company no later than March 31, 2017, and any ensuing financial statements, and within any other filing to be filed and/or disclosed by the Company to the Israel Securities Authority and/or to be published by the Company.

In addition, we hereby give our full consent to the inclusion of a copy of this letter within the Company's Financial Statements and other filings as aforesaid.

Yours sincerely,

Douglas H. Larson Executive Director

APPRAISAL OF REAL PROPERTY Gateway Center II 1 and 2-Story Retail Power Center 550 Gateway Drive Brooklyn, Kings County, NY 11217

IN AN APPRAISAL REPORT

As of December 31, 2016

Prepared For:

Related Commercial Portfolio, LTD. c/o Related Companies 60 Columbus Circle New York, NY 10023

Prepared By:

Cushman & Wakefield, Inc. Valuation & Advisory 1290 Avenue of the Americas, 9th Floor New York, NY 10104-6178 C&W File ID: 17-12002-900125-004

1290 Avenue of the Americas, 9th Floor NEW YORK, NY 10104-6178 Tel +1 212 841 7500 cushmanwakefield.com

March 09, 2017

Mr. David Zussman Related Commercial Portfolio, LTD. c/o Related Companies 60 Columbus Circle New York, NY 10023

Re: Appraisal of Real Property In An Appraisal Report

Gateway Center II 1 and 2-Story Retail Power Center 550 Gateway Drive Brooklyn, Kings County, NY 11217

C&W File ID: 17-12002-900125-004

Dear Mr. Zussman:

The appraisal report is intended to provide an opinion of the market value of the leased fee interest of the subject property for an internal review by the client. This report is not intended for any other use. This report was prepared for the exclusive use of Related Commercial Portfolio, LTD. c/o Related Companies and their participant lenders are the intended users.

Client: Mr. David Zussman Related Commercial Portfolio, LTD. c/o Related Companies 60 Columbus Circle New York, NY 10023

Intended User: Related Commercial Portfolio, LTD. c/o Related Companies and their participant lenders, are the only Intended Users.

Intended Use: IFRS financial statements in connection with a potential corporate financing.

CUSHMAN & WAKEFIELD 1 Mr. David Zussman Cushman & Wakefield, Inc. Related Commercial Portfolio, LTD. c/o Related Companies March 9, 2017 Page 2

Identification of the Real Estate: Gateway II 1 and 2-Story Retail Power Center 550 Gateway Drive Brooklyn, NY 11217

Current Use: The subject property consists of a 1 and 2-story retail power center containing 600,646 square feet of gross leasable area (GLA) on a 40.24 acre site known as the Gateway Retail Center II. The center is 100 percent net leased and anchored by JC Penney, Burlington Coat Factory and ShopRite supermarket which occupy a total of 289,083 square feet, or 48 percent of the subject property on a long term basis. The subject is adjacent to the existing Gateway retail center, a 638,000 square foot retail power center anchored by Target, BJ’s Wholesale Club, and Home Depot, just west of the Belt Parkway (a/k/a Shore Parkway).

Highest and Best Use It is our opinion that the Highest and Best Use of the entire site as if vacant is a retail center developed to the highest feasible density (As If Vacant): possible.

Highest and Best Use It is our opinion that the Highest and Best Use of the site as improved is as it is currently improved. (As Improved):

Type of Value: Market Value (defined later in this report)

Sales History: To the best of our knowledge, the property has not transferred within the past three years.

Real Property Interest Valued: Leased Fee Interest

Date of Inspection: December 20, 2016

Effective Date of Value: December 31, 2016

Date of Report: March 09, 2017

Extraordinary Assumptions: This appraisal does not employ any extraordinary assumptions.

Hypothetical Conditions: This appraisal does not employ any hypothetical conditions.

Valuation Indices:

Sales Comparison Approach: $465,000,000

Income Capitalization Approach: $465,000,000

Opinion of Value: $465,000,000 (Market Value As Is on December 31, 2016)

Exposure & Marketing Time: 6 to 9 months

CUSHMAN & WAKEFIELD 2

Mr. David Zussman Cushman & Wakefield, Inc. Related Commercial Portfolio, LTD. c/o Related Companies March 9, 2017 Page 3

Market Value Definition

Scope of Work

Research

1 Uniform Standards of Professional Appraisal Practice. 2016-2017 edition. Washington, DC: The Appraisal Foundation 2012.

CUSHMAN & WAKEFIELD 3

Mr. David Zussman Cushman & Wakefield, Inc. Related Commercial Portfolio, LTD. c/o Related Companies March 9, 2017 Page 4

Report Option Description

Appraisal Methodology

CUSHMAN & WAKEFIELD 4 GATEWAY CENTER II ASSUMPTIONS AND LIMITING CONDITIONS

Assumptions and Limiting Conditions

CUSHMAN & WAKEFIELD 5

GATEWAY CENTER II ASSUMPTIONS AND LIMITING CONDITIONS

CUSHMAN & WAKEFIELD 6

GATEWAY CENTER II CERTIFICATION OF APPRAISAL

Certification of Appraisal

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GATEWAY CENTER II ADDENDA CONTENTS

Addenda Contents

Addendum A: Client Satisfaction Survey Addendum B: Valuation Methodology Addendum C: Comparable Improved Retail Sales Addendum D: Qualification of the Appraisers

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Addendum A: Client Satisfaction Survey

Survey Link: https://www.surveymonkey.com/r/vaclientsatisfaction?c=16-12002-903393-001 C&W File ID: 17-12002-900125-004 Fax Option: (716) 852-0890

__ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

2. Please rate the appraisal report on clarity, attention to detail, and the extent to which it was presentable to your internal/external users without revisions:

__ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

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GATEWAY CENTER II ADDENDA CONTENTS

3. The appraiser communicated effectively by listening to your concerns, showed a sense of urgency in responding, and provided convincing support of his/her conclusions:

__ Not Applicable __ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

4. The report was on time as agreed, or was received within an acceptable time frame if unforeseen factors occurred after the engagement:

__ Yes __ No

Comments:______

5. Please rate your overall satisfaction relative to cost, timing, and quality:

__ Excellent __ Good __ Average __ Below Average __ Poor

Comments:______

6. Any additional comments or suggestions you feel our National Quality Control Committee should know?

______

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GATEWAY CENTER II ADDENDA CONTENTS

7. Would you like a representative of our National Quality Control Committee to contact you?

__ Yes __ No

Name & Phone (if contact is desired): ______

Contact Information: Scott Schafer Managing Director, National Quality Control (716) 852-7500, ext. 121

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GATEWAY CENTER II INCOME CAPITALIZATION APPROACH

Addendum B: Valuation Methodology

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INCOME CAPITALIZATION APPROACH Methodology

Investors acquiring this type of asset will typically look at year one returns but must also consider long-term strategies. Hence, depending on certain factors, each of the income approach methods has merit. Considering all of the aspects that would influence an investment decision in the subject property, we conclude that both the Direct Capitalization and Discounted Cash Flow Methods are appropriate in this assignment.

Potential Gross Income

MINIMUM RENT

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Minimum rents forecasted at the subject property are essentially derived from various tenant categories, namely specialty tenant revenues consisting of anchor, junior anchor, and in-line space. In our investigation and analysis of the marketplace, we have surveyed, and ascertained where possible, rent levels being commanded by competing centers. However, it should be recognized that large retail centers are generally considered to be separate entities by virtue of age and design, accessibility, visibility, tenant mix, and the size and purchasing power of their trade area. Consequently, the best measure of minimum rental income is its actual rent roll leasing schedule. As such, our analysis of leases for tenants at the subject provides important insight into perceived market rent levels for the property. Inasmuch as a tenant's ability to pay rent is based upon expected sales achievement, the level of negotiated rents is directly related to the individual tenant's perception of their expected performance at the center.

SPACE SUMMARY & OCCUPANCY STATUS

The following is a summary of the leased and vacant space within the subject property. The subject property contains 600,646 square feet of space, of which is 100 percent occupied by 36 tenants.

CURRENT SPACE SUMMARY & OCCUPANCY STATUS SPACE SUMMARY SPACE COUNT Tenant Category Occ. SF Vct. SF Total SF Occupancy Occupied Vacant Total Anchor-Ground lease 122,473 - 122,473 100.0% 1 0 1 Anchor 163,638 - 163,638 100.0% 2 0 2 Jr Anchor 190,213 - 190,213 100.0% 7 0 7 Inline 113,630 - 113,630 100.0% 24 0 24 Outparcel 10,692 - 10,692 100.0% 2 0 2 Total 600,646 - 600,646 100.0% 36 0 36

Compiled by Cushman & Wakefield, Inc. There a total of 36 tenant spaces, of which 36 are leased. The chart summarizes the leased level based on the leases in place as of the date of value.

LEASE STRUCTURE

It is essential to understand expense reimbursement clauses when determining the value of a property. Leases can include expense stops, expense caps, specific billing pools and expense exclusions. The tenant’s share of the expense can be pro-rata, derived by formula, or negotiated. Below we discuss the lease structures found in the local market, as well as the structure of the leases within the subject property.

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LOCAL MARKET LEASE STRUCTURE

SUBJECT PROPERTY LEASE STRUCTURE

At the subject property, lease terms are generally between 10 and 25 years in length. Generally, rent increase reflects paying rent steps of 10 percent every 5 years.

ATTAINED RENT SCHEDULE

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RENT ROLL SCHEDULE MARKET RENT As Of Value Date: Dec-16 Market Rent Start End Area Contract Contract Tenant Name Suite Date Date ( SF ) Rent/Year Rent/SF Rent/SF Annualized

Anchor-Ground lease JC Penney A Oct-14 Aug-34 122,473 $1,137,576 $9.29 $20.00 $2,449,460 1 tenant subtotal 122,473 $1,137,576 $9.29 $20.00 $2,449,460

Anchor Burlington Coat Factory C2.1 Oct-14 Feb-30 73,864 $2,511,372 $34.00 $35.00 $2,585,240 Shop Rite G1 Aug-14 Aug-34 89,774 $2,468,784 $27.50 $35.00 $3,142,090 2 tenants subtotal 163,638 $4,980,156 $30.43 $35.00 $5,727,330

Jr Anchor PC Richards G2.3 Aug-14 Jan-27 33,593 $1,158,960 $34.50 $35.00 $1,175,755 Raymour and Flanigan C1.1A Jul-14 Jul-27 31,479 $1,448,040 $46.00 $35.00 $1,101,765 Nordstrom Rack G2.2 Oct-14 Oct-24 32,718 $1,308,720 $40.00 $40.00 $1,308,720 TJ Maxx C1.2 Aug-14 Aug-24 32,960 $1,315,164 $39.90 $40.00 $1,318,400 Aldi E1.3 Aug-14 Jul-29 16,859 $842,952 $50.00 $50.00 $842,950 DSW G2.1 Oct-14 Jan-25 20,088 $924,048 $46.00 $50.00 $1,004,400 Michaels C1.1 Aug-14 Aug-24 22,516 $1,125,804 $50.00 $50.00 $1,125,800 7 tenants subtotal 190,213 $8,123,688 $42.71 $41.42 $7,877,790

Inline Petco E1.4 Aug-14 Sep-27 12,117 $751,260 $62.00 $65.00 $787,605 Buffalo Wild Wings H1.1 Aug-14 Nov-34 8,075 $565,248 $70.00 $70.00 $565,250 Panera (B) E1.1b Oct-14 Apr-25 1,921 $134,472 $70.00 $70.00 $134,470 Panera (C) E1.1c Oct-14 Apr-25 2,287 $160,092 $70.00 $70.00 $160,090 Pier 1 Imports C1.3B Jul-14 Jun-24 11,940 $895,500 $75.00 $75.00 $895,500 The Gap E1.2 Sep-14 Jul-24 10,597 $794,772 $75.00 $75.00 $794,775 Lane Bryant C1.4 Oct-14 Dec-24 5,368 $429,444 $80.00 $80.00 $429,440 The Dress Barn C1.3C Aug-14 Dec-24 7,942 $635,364 $80.00 $80.00 $635,360 Bath and Body Works L1.4 Sep-14 Jan-25 3,502 $297,672 $85.00 $85.00 $297,670 New York & Co. C1.4b Feb-15 Jan-25 6,006 $510,516 $85.00 $85.00 $510,510 Skechers C1.3a Jul-14 Apr-24 5,639 $479,316 $85.00 $85.00 $479,315 Five Below L2 Oct-14 Jan-27 9,246 $813,648 $88.00 $90.00 $832,140 Children's Place L1.1 Oct-14 Jan-25 4,049 $384,660 $95.00 $95.00 $384,655 Smash Burger E1.1A Oct-14 Mar-25 2,155 $201,492 $93.50 $95.00 $204,725 ATT K2.3 Jan-15 Jan-24 3,563 $356,304 $100.00 $100.00 $356,300 Carter's K1.4 Oct-14 Aug-22 4,041 $404,100 $100.00 $100.00 $404,100 Sprint K1.1 Oct-14 Jul-24 2,915 $291,504 $100.00 $100.00 $291,500 Verizon Wireless K2.2b Apr-15 Dec-19 1,870 $190,908 $102.09 $100.00 $187,000 Gamestop L1.3 Jan-15 Apr-20 1,332 $139,860 $105.00 $110.00 $146,520 GNC K2.1 Aug-14 Aug-24 2,031 $223,416 $110.00 $110.00 $223,410 Pizza Studio E1.1 May-15 Apr-25 1,156 $121,380 $105.00 $110.00 $127,160 Sally Beauty K2.2 Nov-15 Nov-25 1,800 $171,000 $95.00 $110.00 $198,000 Davis Vision K1.2 Jan-15 May-25 1,919 $211,092 $110.00 $125.00 $239,875 T-Mobile C1.3 Oct-14 Oct-24 2,159 $269,880 $125.00 $125.00 $269,875 24 tenants subtotal 113,630 $9,432,900 $83.01 $84.09 $9,555,245

Outparcel A Bank of America J Jul-14 Sep-34 2,811 $450,000 $160.09 $160.00 $449,760 Applebees M Oct-14 Aug-29 7,881 $551,676 $70.00 $70.00 $551,670 2 tenants subtotal 10,692 $1,001,676 $93.68 $93.66 $1,001,430

GRAND-TOTALS 36 tenants in occupancy 600,646 $24,675,996 $41.08 $44.30 $26,611,255

Note: Attained rent equals current rent annualized for twelve months, and it excludes contractual rent increases Compiled by Cushman & Wakefield, Inc.

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GATEWAY CENTER II INCOME CAPITALIZATION APPROACH

The subject’s anchor ground lease with JC Penney exhibits a contract rent of $9.29 per square foot. However, it should be noted that JC Penney paid the developer $10,000,000 which reflected a pre-payment of their rent throughout the 20-year lease term, in addition to the rent payments detailed in the lease agreement. The subject’s two anchor leases range in rents from $27.50 to $34.00 per square foot, with an average of $30.43 per square foot. The subject’s seven junior anchor leases range in rents from $34.50 to $50.00 per square foot, with an average of $42.71 per square foot. The subject’s inline retail tenants range in rents from $62.00 to $125.00 per square foot, with an average of $83.01 per square foot. The two outparcels tenants range in rents from $70.00 to $160.09 per square foot, with an average of $93.68 per square foot. Overall, the subject’s leases reflect an average contract net rent of $41.08 per square foot.

ANALYSIS OF COMPARABLE ANCHOR TENANT GROUND RENT

The following table summarizes rental activity for comparable major anchor ground leases in competing properties in the market.

ANCHOR GROUND LEASED SITE COMPARABLES PROPERTY INFO LEASE INFORMATION

Property Name NO. Address, City, State TENANT NAME LEASE DATE BUILDING AREA (yrs.) TERM INITIAL RENT/SF(GLA) RENT STEPS TYPE LEASE 1 Bay Plaza Mall Macy's 8/14 160,000 48 $12.00 % Increases Net Bronx, New York

2 1759 Shore Parkway BJ's Warehouse 10/12 136,000 48 $29.00 % Increases Net Brooklyn, New York

3 Kings Plaza Lowe's 4/10 114,000 20 $17.54 % Increases Net 2565 Flatbush Avenue Brooklyn, New York 4 Bayone Crossings, Lowe's 10/09 146,583 20 $8.95 Specific Net Bayonne, NJ increases

5 Bayone Crossings, Walmart 10/09 91,034 20 $8.79 Specific Net Bayonne, NJ increases

STATISTICS Low 10/09 91,034 20 $8.79 High 8/14 160,000 48 $29.00 Average 6/11 129,523 31 $15.26 Compiled by Cushman & Wakefield, Inc.

DISCUSSION OF COMPARABLE ANCHOR TENANT GROUND RENTS

We have analyzed anchor ground leases negotiated in competitive properties in the marketplace. The comparables range in size from 91,034 square feet to 160,000 square feet. These are all located in existing or proposed multi- level retail centers similar in class to the subject or within free-standing department stores. Three of the comparables

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are located within New York, and two are in New Jersey. The comparable leases have terms ranging from 20 to 48 years. The comparables exhibit a range of rents from $8.79 to $29.00 per square foot of building area, with an average of $15.26 per square foot. Rent escalation clauses vary, with most having percentage increases ranging from 5 to 10 percent every 3 to 5 years. All of the comparables are net leases in which the tenant is required to pay its pro-rata share of real estate taxes and CAM expenses.

The subject’s ground leased anchor tenant (JC Penney) signed a lease for a 20 year base term at an initial ground rent of $1,160,616 or $9.29 per square foot of GLA (124,168 SF). The ground rent remains flat during the initial 10 years, and then increases to $10.09 per square foot of GLA for the remainder of the base term. Furthermore, the tenant also has eleven 5-year renewal options for an additional 55 years with fixed rent increases which reflect approximately 8.0 percent increases every 5 years. However, as previously noted JC Penney paid the developer $10,000,000 which reflected a pre-payment of their rent throughout the 20-year lease term, in addition to the rent payments detailed in the lease agreement. We believe the contract rent for JC Penney’s is below market levels.

CONCLUSION OF MARKET GROUND RENT FOR ANCHOR RETAIL SPACE

Based on the leasing activity in the marketplace, the subject’s anchor ground leased space, and our analysis of the comparables, we have concluded the following market rent for the subject’s ground leased anchor tenant:

CONCLUSION OF ANCHOR SPACE MARKET GROUND RENT

TENANT MARKET LEASE LEASE RENT INCREASE CATEGORY RENT TERM TYPE

Anchor Ground Lease $20.00 20 Net 10% every 5 years

ANALYSIS OF COMPARABLE ANCHOR RETAIL RENTS

The following table summarizes rental activity for comparable anchor space in competing buildings in the market.

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MAJOR ANCHOR RENT COMPARABLES PROPERTY INFORMATION LEASE INFORMATION

Gateway Center II 600,646 2014 Burlington Coat Discount Apparel 10/14 73,864 15 $34.00 10% every 60 Net 2 339-579 Gateway Drive Factory months Brooklyn, NY

Gateway Center II 600,646 2014 Shop Rite Supermarket 8/14 89,774 20 $27.50 10% every 60 Net 3 339-579 Gateway Drive months Brooklyn, NY

Riverdale Crossings 159,037 2014 BJ Wholesale Wholesale 8/13 107,000 20 $39.00 10% every 60 Net 4 184-190 West 237th Street months Bronx, NY

Rego Park Center 926,180 2010 Century 21 Department Store 5/09 140,537 20 $31.08 5% Yr. 2; 3% Inc. Net 7 61-01 Junction Boulevard Annually Queens, NY

STATISTICS Low 159,037 2005 2/09 73,864 15 $27.27 High 926,180 2015 7/15 140,537 25 $45.00 Average 689,289 2012 4/12 111,634 20 $34.31 Compiled by Cushman & Wakefield, Inc.

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DISCUSSION OF COMPARABLE ANCHOR TENANT RENTS

We have analyzed anchor leases negotiated in competitive retail centers in the marketplace. The comparables range in size from 74,864 square feet to 140,537 square feet. These are all located in existing multi-level retail centers similar in class to the subject, and in competitive retail markets within New York City. The comparable leases have terms ranging from 15 to 25 years. The comparables exhibit a range of rents from $27.27 to $45.00 per square foot, with an average of $34.31 per square foot. Rent escalation clauses vary, with most having percentage increases ranging from 5 to 10 percent every 3 to 5 years. All of the comparables are net leases in which the tenant is required to pay its pro-rata share of real estate taxes and CAM expenses.

The subject’s two anchor tenants (Shoprite & Burlington Coat Factory) signed leases with initial rents ranging between $27.50 and $34.00 per square foot, with an average of $30.43 per square foot. Shoprite signed a 20-year lease for 89,774 square feet with an initial rent of $27.50 per square foot. The tenant also has five 5-year renewal options for an additional 25 years. Burlington Coat Factory signed a 15-year lease for 74,864 square feet with an initial rent of $34.00 per square foot. The tenant also has three 5-year renewal options for an additional 15 years.

CONCLUSION OF MARKET RENT FOR ANCHOR RETAIL SPACE

Based on the leasing activity in the marketplace, the subject’s anchor space, and our analysis of the comparables, we have concluded the following market rent for the subject’s anchor retail tenants:

CONCLUSION OF MAJOR ANCHOR SPACE MARKET RENT TENANT MARKET LEASE LEASE TYPE RENT INCREASE CATEGORY RENT TERM

Anchor> 70,000 SF $35.00 20 Net 10% every 5 years

ANALYSIS OF COMPARABLE JR. ANCHOR RETAIL RENTS

The following table summarizes rental activity for comparable junior anchor space in competing buildings in the market.

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JUNIOR ANCHOR RETAIL RENT COMPARABLES PROPERTY INFO LEASE INFORMATION

2 Queens Place Mall 123,333 2009 Macy's 2015 24,300 5 $60.00 10% every 60 Net 88-01 Queens Boulevard "Backstage" months Queens, NY

3 Retail Building 100,000 2015 Flushing Buffet 2015 16,000 10 $45.00 10% every 60 Net 37-02 Main Street months Queens, NY

4East River Plaza 531,921 2009 Planet Fitness 2015 14,655 15 $44.00 10% every 60 Net 545 East 116th Street months Upper Manhattan, NY

5 Gateway Center 615,000 2014 Shope Rite 2014 16,839 20 $27.50 Annual Increases Net 339-579 Gateway Drive Brooklyn, NY

6 Gateway Center at Bronx Terminal Market 434,272 2009 Michaels 2014 23,204 8 $38.10 Annual Increases Net 658 River Drive Bronx, NY

7 Gateway Center 615,000 2014 Nordstrom Rack 2014 32,792 12 $40.00 Annual Increases Net 339-579 Gateway Drive Brooklyn, NY

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JUNIOR ANCHOR RETAIL RENT COMPARABLES PROPERTY INFO LEASE INFORMATION

9 Gateway Center 615,000 2014 Raymour and 2014 31,479 13 $46.00 Annual Increases Net 339-579 Gateway Drive Flanigan Brooklyn, NY

10 Gateway Center 615,000 2014 TJ Maxx 2014 32,960 10 $39.90 10% every 60 Net 339-579 Gateway Drive months Brooklyn, NY

11 Gateway Center @ Bronx Terminal 434,272 2009 Chuck E 2014 19,834 15 $33.00 10% every 60 Net Center Cheese months 568 Exterior Street Bronx, NY

12 East River Plaza 531,921 2009 Burlington Coat 2013 54,927 17 $36.00 10% every 60 Net 545 East 116th Street Factory months Upper Manhattan, NY

13 Throggs Neck Shopping Center 123,333 2009 TJ Maxx 2014 28,417 11 $39.00 10% every 60 Net 815 Hutchinson River Parkway months Bronx, NY

STATISTICS Low 100,000 2009 2013 14,655 5 $27.50

High 615,000 2015 2015 54,927 20 $60.00

Average 459,158 2012 2014 26,596 13 $41.00 Compiled by Cushman & Wakefield, Inc.

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DISCUSSION OF COMPARABLE JUNIOR ANCHOR RENTS

We have analyzed recent leases negotiated in competitive retail centers in the marketplace. The comparables range in size from 14,655 square feet to 54,927 square feet. These are all located in existing multi-level retail centers similar in class to the subject, and in competitive retail markets within New York City. The comparable leases have terms ranging from 5 to 20 years. The comparables exhibit a range of rents from $27.50 to $60.00 per square foot, with an average of $41.00 per square foot. Rent escalation clauses vary, with most having annual percentage increases ranging from 5 to 10 percent every 5 years, or annual increases. All of the comparables are net leases in which the tenant is required to pay its pro-rata share of real estate taxes and CAM expenses. The subject’s seven junior anchor tenants signed leases within initial rents that range between $34.50 and $50.00 per square foot, with an average of $42.71 per square foot. The junior anchor tenants greater than 30,000 square feet reflected an initial rental range from $34.50 to $46.00 per square foot. The junior anchor tenants less than 25,000 square feet reflected an initial rental range from $46.00 to $50.00 per square foot. The junior anchor leases ranged between 10 and 15 years. However, all of the junior anchor tenants have between two to five renewal options which will extend their base terms between 10 and 20 years. CONCLUSION OF MARKET RENT FOR JUNIOR ANCHOR RETAIL SPACE

Based on leasing activity in the marketplace, the subject junior anchor spaces configuration, location, and layout, and our analysis of the comparable leases, we have concluded the following market rent for the subject’s junior anchor retail tenants:

CONCLUSION OF JUNIOR ANCHOR MARKET RENT TENANT MARKET LEASE LEASE TYPE RENT INCREASE CATEGORY RENT TERM

Jr. Anchor $35.00 to $50.00 15 Net 10% every 5 years

ANALYSIS OF COMPARABLE IN-LINE RETAIL RENTS

The following table summarizes rental activity for comparable in-line space in competing retail centers in the market.

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INLINE RETAIL RENT COMPARABLES PROPERTY INFORMATION LEASE INFORMATION

Property Name NO. Address, City, State CENTER GLA YEAR BUILT TENANT NAME LEASE DATE SIZE (NRA) (yrs.) TERM INITIAL RENT/SF RENT STEPS TYPE LEASE 1 Throggs Neck Shopping Center 285,299 2015 Kudos 2015 2,050 10 $53.00 Annual Increases Net 815 Hutchinson River Parkway Bronx, NY 2 Throggs Neck Shopping Center 286,299 2015 Bevmart 2015 1,645 10 $52.00 Annual Increases Net 815 Hutchinson River Parkway Bronx, NY 3 Throggs Neck Shopping Center 285,299 2015 T-Mobile 2015 1,984 10 $110.00 Annual Increases Net 815 Hutchinson River Parkway Bronx, NY 4 Throggs Neck Shopping Center 285,299 2015 Subway 2015 950 10 $100.00 Annual Increases Net 815 Hutchinson River Parkway Bronx, NY

5 Parkchester Condominiums 300,000 1974 JP Morgan Chase 2015 3,595 10 $91.16 Annual Increases Net 1386 Metropolitan Avenue Bronx, NY

6 Jackson Heights Shopping Center 39,405 1960 Vision Works 2015 1,791 10 $90.00 Annual Increases Net 7507 31st Avenue Queens, NY 7 Jackson Heights Shopping Center 39,405 1960 Santander Bank 2014 1,470 10 $62.00 Annual Increases Net 7507 31st Avenue Queens, NY 8 Bay Plaza Mall 780,000 2014 Zinburger 2014 6,306 15 $80.00 Annual Increases Net 200 Baychester Avenue Bronx, NY 9 Gateway Center II 600,646 2014 Bath & Body Works 2014 3,502 10 $85.00 10% increase every 5 Net 339-579 Gateway Drive years Brooklyn, NY 10 Throggs Neck Shopping Center 285,299 2015 Famous Footwear 2014 5,547 10 $52.00 Annual Increases Net 815 Hutchinson River Parkway Bronx, NY 11 Atlantic Terminal 400,000 2010 Verizon Wireless 2014 2,195 5 $101.04 Annual Increases Net 139 Flatbush Avenue Brooklyn, NY 12 Atlantic Terminal 400,000 2010 Coldstone Creamery 2014 1,090 5 $115.08 Annual Increases Net 139 Flatbush Avenue Brooklyn, NY 13 Atlantic Terminal 400,000 2010 The Children's Place 2014 5,500 5 $81.64 Annual Increases Net 139 Flatbush Avenue Brooklyn, NY

14 Shops at Atlas Park 60,000 2006 Claire's 2013 1,322 5 $95.00 Annual IncreasesNet 8000 Cooper Avenue Queens, NY

15 Queens Place 455,000 2001 Coldstone Creamery 2013 1,300 10 $89.06 Annual Increases$18 88-01 Queens Boulevard Queens, NY

16 Atlantic Terminal 400,000 2010 Pandora 2012 962 10 $125.00 10% increase every 5 Net 139 Flatbush Avenue years Brooklyn, NY

STATISTICS Low 39,405 1960 2012 950 5 $52.00

High 780,000 2015 2015 6,306 15 $125.00

Average 331,372 2003 2014 2,576 9 $86.37 Compiled by Cushman & Wakefield, Inc.

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DISCUSSION OF COMPARABLE IN-LINE RENTS

The subject’s inline retail tenants signed leases within initial rents from $62.00 to $125.00 per square foot, with an average of $83.01 per square foot, depending on the size, and location. The majority of the inline leases range between 10 and 15 years, and included one to three renewal periods for an additional 5 to 15 years.

CONCLUSION OF MARKET RENT FOR IN-LINE RETAIL SPACE

Based on recent leasing activity in the market place, the subject in-line spaces configuration, location, and layout, along with our analysis of the comparable leases, we have concluded the following market rents for the subject’s in-line retail tenants:

CONCLUSION OF IN-LINE RETAIL SPACE MARKET RENT RANGES TENANT MARKET LEASE LEASE TYPE RENT INCREASE CATEGORY RENT TERM

In-line spaces $65.00 - $125.00 15 Net 10% every 5 years

OUTPARCEL SITES

The subject contains two outparcel sites that are improved with retail buildings. The developer has ground leased the two subject outparcel sites that have been improved with a 2,811 square foot Bank of America bank building and a 7,881 square foot Applebee’s restaurant. The Bank of America outparcel is on the northern portion of the site facing Erskine Street. The outparcel space is leased to Bank of America for 20 years at an initial rent of $450,000 per annum, or $160.09 per square foot of building area. In addition, the tenant possesses two 10- year renewal options, plus one 9-year renewal options for an additional total of 29 years. The Applebee’s outparcel is in the center of the subject parcel facing the retail center. The outparcel space is leased to Applebee’s for 15 years at an initial rent of $551,670 per annum, or $70.00 per square foot of building area. In addition, the tenant possesses two 5- year renewal options for an additional total of 10 years.

CONCLUSION OF MARKET RENT FOR OUTPARCEL GROUND RENT

There has been no recent outparcel leases within the competitive retail centers in the subject market place. However, we have reviewed some older comparable leased outparcel sites in locations within the region that are exhibited on the following page:

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LEASED OUTPARCEL SITE COMPARABLES PROPERTY INFO LEASE INFORMATION

Property Name NO. Address, City, State TENANT NAME LEASE DATE LAND AREA BUILDING AREA (yrs.) TERM INITIAL RENT/SF (GLA) RENT STEPS TYPE LEASE 1 CONFIDENTIAL Confidential 1/13 15,500 10,000 15 $75.00 % Increases Net Bronx, New York

2 CONFIDENTIAL Confidential 8/09 15,500 5,000 15 $102.00 % Increases Net Bronx, New York

3 CONFIDENTIAL Confidential 8/09 16,444 5,000 15 $117.00 % Increases Net Brooklyn New York

4 CONFIDENTIAL Confidential 8/11 31,417 6,000 15 $87.50 % Increases Net Queens, New York

STATISTICS Low 8/09 15,500 5,000 15 $75.00 High 1/13 31,417 10,000 15 $117.00 Average 12/10 19,715 6,500 15 $95.38 Compiled by Cushman & Wakefield, Inc.

As shown, the outparcel sites ground rents range between $75.00 and $117.00 per square foot of building area, with an average rent of $95.38 per square foot of building area.

CONCLUSION OF MARKET RENT FOR OUTPARCEL RETAIL SPACE

Based on subject’s recent outparcel leases, leasing activity in the market, the subject outparcel retail spaces configuration, location, and layout, along with our analysis of the comparable leases, we have concluded the following market rents for the subject’s outparcel retail tenants:

CONCLUSION OF OUTPARCEL MARKET RENTS TENANT MARKET LEASE LEASE TYPE RENT INCREASE CATEGORY RENT TERM

Outparcel - Small $150.00- $160.00 15 Net 10% every 5 years

Outparcel - Large $65.00 - $75.00 15 Net 10% every 5 years

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CONCLUSION OF MARKET RENTS FOR THE SUBJECT RETAIL SPACE

Based on recent leasing activity in the marketplace and our analysis of the comparables, we have concluded the following market rents for the subject’s retail tenants:

CONCLUSION OF IN-LINE RETAIL MARKET RENTS TENANT MARKET LEASE LEASE TYPE RENT INCREASE CATEGORY RENT TERM

Anchor-Ground Lease $20.00 20 10% every 5 years Net

Anchor $35.00 20 10% every 5 years Net

Junior Anchor $35.00 -$50.00 15 10% every 5 years Net

Inline $65.00 - $125.00 15 10% every 5 years Net 15 Outparcel – Small $150.00 - $160.00 10% every 5 years Net

Outparcel - Large $65.00 - $75.00 15 10% every 5 years Net

MARKET RENT SYNOPSIS

The following chart summarizes our market rent conclusion for each tenant category in the subject property.

LEASING ASSUMPTIONS

TENANT CATEGORY Anchor-Ground lease Anchor Jr Anchor Inline Outparcel Small Outparcel Large WEIGHTED ITEMS Renewal Probability 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% Market Rent- Net $20.00 $35.00 $35-$50 $65-$125 $150-$160 $65-$75 Months Vacant 8.00 8.00 8.00 8.00 8.00 8.00 Tenant Improvements New Leases $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Renewal Leases $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Leasing Commissions New Leases 3.50% 3.25% 3.50% 3.50% 3.50% 3.50% Renewal Leases 1.75% 1.63% 1.75% 1.75% 1.75% 1.75% Free Rent New Leases 6 6 6 6 6 6 Renewal Leases 3 3 3 3 3 3

NON-WEIGHTED ITEMS Lease Term (years)201015151515 Lease Type (reimbursements) Net Net Net Net Net Net 10% Annual Increase 10% Annual Increase 10% Annual Increase 10% Annual Increase 10% Annual Increase 10% Annual Increase Contract Rent Increase Projection Every 60 Months Every 60 Months Every 60 Months Every 60 Months Every 60 Months Every 60 Months Compiled by Cushman & Wakefield, Inc.

LEASE EXPIRATIONS The lease expiration schedule is an important investment consideration. As leases rollover, the landlord will be required to negotiate a renewal lease with the existing tenant, or to secure a new tenant for the space. The projected lease rollover is exhibited on the following chart:

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It should be noted that the majority of the tenants that have leases expiring within the next 10 years, also have several below market renewal options, which will extend their terms and mitigate the majority of the expiration risk. Based on the turnover in year 11, we have projected a 12-year analysis period.

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TENANT RENEWAL OPTIONS

Exhibited on the following chart is the renewal option schedule of the respective tenants that possess renewal options during our 12 year projection period. Moreover, the chart exhibits the market and option rent at the time of the renewal option. We have modeled the cash flow to exercise the renewal options that are below market levels.

LEASE OPTION SUMMARY Option Option Option Initial Option Market Market Suite Start End Term Area Option Rent Rent at Rent PSF Tenant Name Number Date Date Years SF Rent PSF Option at Option ATT K2.3 Feb-24 Jan-29 5.0 3,563 $431,123 $121.00 $438,204 $122.99 Bath and Body Works L1.4 Feb-25 Jan-30 5.0 3,502 $360,181 $102.85 $377,079 $107.68 Carter's K1.4 Sep-22 Aug-27 5.0 4,041 $444,510 $110.00 $468,463 $115.93 Children's Place L1.1 Feb-25 Jan-30 5.0 4,049 $465,433 $114.95 $487,269 $120.34 DSW G2.1 Feb-25 Jan-30 5.0 20,088 $1,118,098 $55.66 $1,272,344 $63.34 Five Below L2 Feb-27 Jan-32 5.0 9,246 $984,514 $106.48 $1,118,327 $120.95 Gamestop L1.3 May-20 Apr-25 5.0 1,332 $156,643 $117.60 $160,106 $120.20 GNC K2.1 Sep-24 Aug-29 5.0 2,031 $270,326 $133.10 $274,766 $135.29 Lane Bryant C1.4 Jan-25 Dec-29 5.0 5,368 $519,622 $96.80 $544,002 $101.34 Michaels C1.1 Sep-24 Aug-29 5.0 22,516 $1,362,218 $60.50 $1,384,592 $61.49 New York & Co. C1.4b Feb-25 Jan-30 5.0 6,006 $617,717 $102.85 $646,699 $107.68 Nordstrom Rack G2.2 Nov-24 Oct-29 5.0 32,718 $1,583,551 $48.40 $1,609,561 $49.19 PC Richards G2.3 Aug-26 Jul-31 5.0 33,593 $1,402,508 $41.75 $1,534,094 $45.67 Pier 1 Imports C1.3B Jul-24 Jun-29 5.0 11,940 $1,083,555 $90.75 $1,101,352 $92.24 Skechers C1.3a May-24 Apr-29 5.0 5,639 $579,971 $102.85 $589,497 $104.54 Smash Burger E1.1A Apr-25 Mar-30 5.0 2,155 $252,760 $117.29 $259,340 $120.34 Sprint K1.1 Feb-24 Jan-29 5.0 2,915 $352,715 $121.00 $358,508 $122.99 The Dress Barn C1.3C Jan-25 Dec-29 5.0 7,942 $770,374 $97.00 $804,855 $101.34 The Gap E1.2 Aug-24 Jul-29 5.0 10,597 $961,678 $90.75 $977,473 $92.24 TJ Maxx C1.2 Sep-24 Aug-29 5.0 32,960 $1,591,309 $48.28 $1,621,466 $49.19 T-Mobile C1.3 Nov-24 Oct-29 5.0 2,159 $326,549 $151.25 $331,912 $153.73 Compiled by Cushman & Wakefield, Inc. EXPENSE REIMBURSEMENTS

MISCELLANEOUS REVENUE

The subject’s miscellaneous income includes reimbursement income from water charges that will be metered to the tenants. The 2015 historical expenses reflected miscellaneous income of $264,423 ($0.44/SF). The 2016 annualized expenses reflected miscellaneous income of $463,673 ($0.77/SF). The 2017 budget expenses reflected miscellaneous income of $312,592 ($0.52/SF). Based on the subject property’s historical expenses and 2017 budget for miscellaneous revenue, and our review of comparable properties, we have projected miscellaneous revenue of $300,000 in Year 1. Our figure is within the subject’s range of the historical expenses and budgeted figures.

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VACANCY AND COLLECTION LOSS

Vacancy and collection loss is a function of the interrelationship between absorption, lease expiration, renewal probability, estimated downtime between leases, and a collection loss factor based on the relative stability and credit of the subject’s tenant base. Based on the historical occupancy of the subject, the current vacancy in the market, and our perception of future market vacancy, we have projected a global stabilized vacancy rate of 1.00 percent. We have also deducted a collection loss of 1.00 percent. Total vacancy and collection loss is equal to 2.00 percent. For credit tenants, discussed below, we modeled the cash flow to allow for exclusion of a vacancy and collection loss.

REVENUE & EXPENSE ANALYSIS

We have developed an opinion of the property’s annual income and operating expenses after reviewing the historical expenses, the 2015 and 2016 expenses along with the 2017 budget provided by ownership and the operating performance of similar properties. We analyzed each item of expense and developed an opinion regarding what an informed investor would consider typical. The historical revenue and expenses along with owners budget and our opinion of the subject’s income and expenses are presented on the following chart, followed by an analysis of subject property’s revenue and expense.

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REVENUE AND EXPENSE ANALYSIS

2015 Actual 2016 Forecast 2017 Budget C&W Forecast (1) REVENUE Total PSF Total PSF Total PSF Total PSF Base Rental Revenue $24,004,616 $39.96 $24,653,344 $41.04 $24,670,793 $41.07 $24,675,937 $41.08 Subtotal $24,004,616 $39.96 $24,653,344 $41.04 $24,670,793 $41.07 $24,675,937 $41.08

Reimbursement Revenue Utility Reimbursement $266,146 $0.44 $167,281 $0.28 $172,213 $0.29 $282,485 $0.47 CAM Reimbursement $3,426,661 $5.70 $3,267,492 $5.44 $3,372,546 $5.61 $3,317,286 $5.52 Real Estate Tax Reimbursement $2,704,209 4.50 $1,215,513 2.02 2,158,117 3.59 $2,241,413 $3.73 Other Income $264,423 0.44 $188,341 0.31 312,592 0.52 $300,000 $0.50 Total Reimbursement Revenue $6,661,438 $11.09 $4,838,627 $8.06 $6,015,468 $10.01 $6,141,184 $10.22

POTENTIAL GROSS REVENUE $30,666,054 $51.06 $29,491,971 $49.10 $30,686,261 $51.09 $30,817,121 $51.31 Vacancy and Collection Loss 0 0.00 0 0.00 0 0.00 -$519,696 -$0.87 EFFECTIVE GROSS REVENUE $30,666,054 $51.06 $29,491,971 $49.10 $30,686,261 $51.09 $30,297,425 $50.44

OPERATING EXPENSES Payroll and Benefits $284,067 $0.47 $270,449 $0.45 $281,870 $0 $325,000 $0.54 Cleaning and Janitorial $400,896 $0.67 $1,070,269 $1.78 $617,972 $1 $600,000 $1.00 Electricity $303,310 $0.50 $0 $0.00 $155,992 $0 $204,000 $0.34 Repairs and Maintenance $469,544 $0.78 $941,700 $1.57 $432,043 $1 $237,000 $0.39 Landscaping $182,208 $0.30 $91,472 $0.15 $218,290 $0 $225,000 $0.37 Water-Direct Meter $161,853 $0.27 $113,802 $0.19 $172,213 $0 $175,000 $0.29 Water & Sewer $351,642 $0.59 -$42,462 -$0.07 $147,500 $0 $250,000 $0.42 Rubbish Removal $172,013 $0.29 $0 $0.00 $0 $0 $105,000 $0.17 Snow Removal $891,671 $1.48 $0 $0.00 $603,817 $1 $625,000 $1.04 Security $511,537 $0.85 $530,990 $0.88 $538,758 $1 $525,000 $0.87 Insurance $155,891 $0.26 $154,636 $0.26 $169,336 $0 $160,000 $0.27 Miscellaneous $13,147 $0.02 $420,109 $0.70 $108,954 $0 $100,000 $0.17 Non-Recoverable $73,051 $0.12 $21,931 $0.04 $194,412 $0 $160,000 $0.27 Management Fees $946,186 $1.58 $883,738 $1.47 $920,588 $2 $915,514 $1.52 Total Operating Expenses $4,917,014 $8.19 $4,456,634 $7.42 $4,561,743 $7.59 $4,606,514 $7.67

Real Estate Taxes 2,703,915 4.50 1,060,705 1.77 2,158,117 3.59 $2,241,410 $3.73 TOTAL EXPENSES $7,620,930 $12.69 $5,517,339 $9.19 $6,719,860 $11.19 $6,847,924 $11.40 NET OPERATING INCOME $23,045,124 $38.37 $23,974,632 $39.91 $23,966,401 $39.90 $23,449,501 $39.04

(1) Fiscal Year Beginning: 1/01/2017 Fiscal Year Ending: 12/31/2017 Compiled by Cushman & Wakefield, Inc.

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EXPENSE GROWTH RATE

Our cash flow projections assume that operating expenses and tenant costs will grow at the rate of 3.00 percent per year during the holding period. Real estate taxes are projected to increase 3.0 percent per annum after the ICAP abatement expires.

RESERVES FOR REPLACEMENTS

Investment Considerations Overview

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Current Economic Conditions

Notable concerns regarding current economic conditions are as follows:

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be on maintaining values but will depend on economic conditions and whether the nation’s economy will tip into downturn.

The following graph compares national transaction volume by property between 2004 and third quarter 2016:

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INVESTMENT CONSIDERATIONS

The factors listed below have been considered in our valuation of this property and will have an impact on our selection of all investor rates.

NOI Growth: The subject's NOI is expected to grow 1.54 percent per annum from the first year of the analysis through the holding period. This rate of growth is considered acceptable.

Lease Expiration Exposure: Within the first five years of the analysis a total of 0.22 percent of the total net rentable area is scheduled to rollover. Extending to a ten-year period, a total of 46.62 percent of the space is scheduled to expire. The peak expiration occurs in year 8, when a total of 140,348 square feet is scheduled to expire. This is considered a moderate rollover exposure within this market.

Credit Tenants: The subject property has a total of 5 credit tenants occupying a total of 57.8 percent of the subject's space. Given this comparison, the investment rates selected will be in line with market indicators.

Real Estate Market Trends: Real estate market trends have a significant bearing on the value of real property. The real estate market in which the subject property is located is currently improving.

Furthermore, we have researched the investment rates from combatable sales utilized within the comparable sales section of this report.

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COMPARABLE RETAIL CENTER SALES SUMMARY

No. Sale Date Name and Location Price Price/NRA OAR Forecast IRR Terminal OAR 1 Jan-16 Queens Place $159,000,000 $717.29 5.25% ------2 Jan-16 Harlem88 01 Q Center B l d $104,000,000 $823.87 4.48% 14 7.00% 6.00% 3 Jun-15125 Shops W @ t Skyview 125th St Center t $400,000,000 $786.14 4.70% 10 7.00% 5.50% 4 Oct-15 Riverdale Crossings $133,000,000 $835.76 5.30% 10 6.50% 5.50% 5 Jun-16184 Shops 190 @ W Columbus t 237th Center St t $1,040,000,000 $2,255.57 4.14% 14 6.25% 5.25% 6 Oct-1410 Shops C l at Grand b Ci Avenue l $56,000,000 $560.08 5.00% 13 6.00% 5.00% 7 Nov-13 Canarsie Plaza $58,529,960 $255.72 5.85% ------8925 A D Low $56,000,000 $255.72 4.14% 10 6.00% 5.00% High $1,040,000,000 $2,255.57 5.85% 14 7.00% 6.00% Average $278,647,137 $890.63 4.96% 12 6.55% 5.45% Compiled by Cushman & Wakefield, Inc.

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It should be noted that the internal rate of return and terminal overall capitalization rate information reflected in the above chart was extracted from cash flows prepared by Cushman & Wakefield, Inc. from appraisals they prepared of these properties. This information is not provided in publications, but is a technique which only Cushman & Wakefield, Inc. employs in their analysis of New York City retail center sales from an appraisal standpoint. The Cushman & Wakefield, Inc. internal rate of return and terminal overall capitalization rate information are confirmed directly from the owners of the respective properties when the properties were appraised.

Investor Survey Trends

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INVESTOR SURVEY HISTORICAL RESULTS

OAR (average) Terminal OAR (average) IRR (average)

8.50%

8.25%

8.00%

7.75%

7.50%

7.25% RATES

7.00%

6.75%

6.50%

6.25%

6.00% 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 ANALYSIS PERIOD

Source: Pw C Real Estate Investor Survey

Terminal Capitalization Rate Selection

We based the estimate of property value at reversion on assumed resale at the end of Year 11, using our forecast of Year 12 net operating income. The reversion value was calculated by applying a capitalization rate of 5.50 percent to calendar year 2027 NOI and subtracting sales expenses of 4.00 percent. The net cash flows and the net reversion were discounted to net present value using a discount rate of 6.00 percent, the derivation of which is discussed below.

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TERMINAL CAPITALIZATION RATES (OARout) Survey Date Range Average Fourth Quarter 2016 - PwC 4.75% 9.75% 6.47% PwC - Refers to National Strip Shopping Center market regardless of class or occupancy

In addition, we examined the terminal rates derived from the improved property sales exhibited in Addendum C of this report:

COMPARABLE RETAIL CENTER SALES TERMINAL CAPITALIZATION RATE SUMMARY

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Discount Rate Analysis

The most recently published PricewaterhouseCoopers, Inc. survey indicates that investors considered acceptable internal rates of return within the following range:

DISCOUNT RATES (IRR) Survey Date Range Average PwC Fourth Quarter 2016 5.50% - 10.75% 7.39% PwC - Refers to National Strip Shopping Center market regardless of class or occupancy

In addition, we examined the discount rates derived from the improved property sales exhibited in Addendum C of this report:

COMPARABLE RETAIL CENTER SALES DISCOUNT RATE SUMMARY (IRR)

Several sources of discount rate (internal rate of return) information were analyzed including Investor Survey data. The internal rates of return cited by the PricewaterhouseCoopers, Inc. survey ranged between 5.50 and 10.75 percent, with an average of 7.39 percent. The discount rates derived from the comparable sales exhibited above ranged from 6.00 percent to 7.00 percent, with an average of 6.55 percent.

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The subject property comprises a newly constructed 600,646 square foot retail center on a 40.24 acre site within the East New York neighborhood in Brooklyn, adjacent to the Belt Parkway (a/k/a Shore Parkway) and the existing Gateway retail center, a 638,000 square foot retail center anchored by Target, BJ’s Wholesale Club, and Home Depot. The subject is 100.0 percent leased on a long term basis at below market levels. The subject is anchored by JC Penney (122,743 SF), Shoprite supermarket (89,774 SF), and Burlington Coat Factory (73,864 SF) which occupies 47.6 percent (286,111 SF) of the property. In addition, the subject has good tenancy with several national brands and five credits tenants comprising 57.8 percent of the subject space. The subject has limited turnover during the next 15 years as the majority of the tenants have several below market renewal options. As a result, the subject’s net operating income (NOI) is projected to increase 1.54 percent per annum from the year one through the through the analysis period. The subject property also benefits from a 25-year ICAP tax abatement, which will passed directly along to the tenants since the subject is net leased.

Therefore, taking into consideration subject’s new construction, location, tenant quality, long term leases, contract rents, and returns expected by investors in the current market in relation to other comparable properties, we discounted our cash flow and reversionary value projections at an internal rate of return at 6.00 percent in our analysis. Our selected discount rate is considered reasonable given the respective cash flow of the subject property. In addition, an urban retail center such as the subject property would generally have a discount rate within the low end of the range of the comparable sales and referenced investor surveys. The selected discount rate is reflective of the overall quality of the real estate, and perceived durability of the income, along with the property's projected cash flow.

Discounted Cash Flow Analysis and DCF Summary Table

The ARGUS - Version 15 cash flow is presented on the following page. The cash flow commencement date is January 01, 2017. Based on the rates selected, the value via the Yield Capitalization analysis is estimated at $455,000,000, rounded. The reversion contributes 56.18 percent to this value estimate. Our cash flow projections and valuation matrix are presented on the following pages.

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ANNUAL CASH FLOW REPORT Annual 1 and 2-Story Retail Power Center Growth 123456 7 8 9101112Year 1 - For the Years Beginnning Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 For the Years Ending Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Year 11

Base Rental Revenue$ 24,675,937 $ 24,675,937 $ 25,361,569 $ 26,781,589 $ 26,931,238 $ 26,904,751 $ 26,941,793 $ 27,438,149 $ 29,374,213 $ 29,507,471 $ 29,581,608 $ 29,611,708 1.83% Absorption & Turnover Vacancy 0 0 0 (34,057) 0 0 0 0 (129,328) (21,529) (513,706) 0 Base Rent Abatements 0 0 0 (66,410) 0 0 0 0 (211,431) (83,962) (548,889) (452,836) Scheduled Base Rental Revenue$ 24,675,937 $ 24,675,937 $ 25,361,569 $ 26,681,122 $ 26,931,238 $ 26,904,751 $ 26,941,793 $ 27,438,149 $ 29,033,454 $ 29,401,980 $ 28,519,013 $ 29,158,872 1.46%

CAM Reimbursement 3,317,286 3,419,325 3,524,544 3,631,237 3,745,233 3,860,583 3,979,554 4,083,855 4,146,482 4,277,498 4,349,330 4,558,064 2.75% Utiulity Reimbursement 282,485 291,161 300,115 309,225 318,903 328,719 338,844 347,764 353,310 364,460 370,022 385,745 2.74% Real Estate Taxes-ICAP 2,241,413 2,309,101 2,378,836 2,449,405 2,524,685 2,600,933 2,679,482 2,760,397 2,839,580 2,928,918 2,978,228 3,109,269 2.88% Total Reimbursement Revenue$ 5,841,184 $ 6,019,587 $ 6,203,495 $ 6,389,867 $ 6,588,821 $ 6,790,235 $ 6,997,880 $ 7,192,016 $ 7,339,372 $ 7,570,876 $ 7,697,580 $ 8,053,078 2.80%

Water Income 150,000 154,500 159,135 163,909 168,826 173,891 179,108 184,481 190,016 195,716 201,587 207,635 3.00% Miscellaneous Income 150,000 154,500 159,135 163,909 168,826 173,891 179,108 184,481 190,016 195,716 201,587 207,635 3.00% TOTAL GROSS REVENUE$ 30,817,121 $ 31,004,524 $ 31,883,334 $ 33,398,807 $ 33,857,711 $ 34,042,768 $ 34,297,889 $ 34,999,127 $ 36,752,858 $ 37,364,288 $ 36,619,767 $ 37,627,220 1.74%

General Vacancy (346,464) (348,102) (358,095) (342,014) (382,262) (383,587) (386,243) (393,334) (283,992) (399,189) 0 (419,953) -100.00% Collection Loss (173,232) (174,051) (179,047) (187,695) (191,131) (191,794) (193,121) (196,667) (205,367) (210,144) (201,321) (209,977) 1.51% EFFECTIVE GROSS REVENUE$ 30,297,425 $ 30,482,371 $ 31,346,192 $ 32,869,098 $ 33,284,318 $ 33,467,387 $ 33,718,525 $ 34,409,126 $ 36,263,499 $ 36,754,955 $ 36,418,446 $ 36,997,290 1.86%

Real Estate Taxes-ICAP 2,241,410 2,309,100 2,378,835 2,450,676 2,524,686 2,600,932 2,679,480 2,760,400 2,843,765 2,929,646 3,018,122 3,109,269 3.02% Operating Expenses 4,606,514 4,722,596 4,862,734 5,028,402 5,159,853 5,289,729 5,425,434 5,578,366 5,777,053 5,928,264 6,078,767 6,239,154 3.00% TOTAL OPERATING EXPENSES$ 6,847,924 $ 7,031,696 $ 7,241,569 $ 7,479,078 $ 7,684,539 $ 7,890,661 $ 8,104,914 $ 8,338,766 $ 8,620,818 $ 8,857,910 $ 9,096,889 $ 9,348,423 2.88%

NET OPERATING INCOME$ 23,449,501 $ 23,450,675 $ 24,104,623 $ 25,390,020 $ 25,599,779 $ 25,576,726 $ 25,613,611 $ 26,070,360 $ 27,642,681 $ 27,897,045 $ 27,321,557 $ 27,648,867 1.54%

Capital Reserve 120,129 123,733 127,445 131,268 135,206 139,263 143,441 147,744 152,176 156,741 161,444 166,287 3.00% Leasing Commissions 0 0 0 75,426 0 0 0 0 240,133 95,360 1,137,710 0 TOTAL LEASING & CAPITAL COSTS$ 120,129 $ 123,733 $ 127,445 $ 206,694 $ 135,206 $ 139,263 $ 143,441 $ 147,744 $ 392,309 $ 252,101 $ 1,299,154 $ 166,287 26.88%

CASH FLOW BEFORE DEBT SERVICE$ 23,329,372 $ 23,326,942 $ 23,977,178 $ 25,183,326 $ 25,464,573 $ 25,437,463 $ 25,470,170 $ 25,922,616 $ 27,250,372 $ 27,644,944 $ 26,022,403 $ 27,482,580 1.10%

Implied Overall Rate 5.15% 5.15% 5.30% 5.58% 5.63% 5.62% 5.63% 5.73% 6.08% 6.13% 6.00% Cash on Cash Return 5.13% 5.13% 5.27% 5.53% 5.60% 5.59% 5.60% 5.70% 5.99% 6.08% 5.72%

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GATEWAY CENTER II INCOME CAPITALIZATION APPROACH

DISCOUNTED CASH FLOW MODELING ASSUMPTIONS VALUATION SCENARIO: Market Value As-Is GENERAL CASH FLOW ASSUMPTIONS GROWTH RATES Cash Flow Software: ARGUS - Version 15 Market Rent-Retail: 3.00% Cash Flow Start Date: January 1, 2017 Consumer Price Index (CPI): 3.00% Calendar or Fiscal Analysis: Fiscal Expenses: 3.00% Investment Holding Period: 11 Years Tenant Improvements: 3.00% Analysis Projection Period: 12 Years Real Estate Taxes: 3.00%

VACANCY & COLLECTION LOSS RATES OF RETURN Global Vacancy: 2.00% Internal Rate of Return: (Cash Flow) 6.00% Global Collection Loss: 1.00% Internal Rate of Return: (Reversion) 6.00% Total Vacancy and Collection Loss 3.00% Terminal Capitalization Rate: 5.50% Reversionary Sales Cost: 4.00% Credit Tenant Overide Rate (Vacancy): 0.00% Credit Tenant Overide Rate (Collection Loss) 0.00% VALUATION CAPITAL EXPENDITURES Market Value As-Is $452,514,639 Reserves for Replacement ($/SF): $0.20 LESS Curable Depreciation $0 Adjusted Value $452,514,639 Rounded to nearest $5,000,000 $455,000,000 Value $/SF $757.52

Compiled by Cushman & Wakefield, Inc. The following graph depicts the forecasted change in both net income and net cash flow over the analysis period.

$29,000,000

$28,000,000

$27,000,000

$26,000,000

$25,000,000

$24,000,000

$23,000,000

$22,000,000

$21,000,000 123456789101112

Net Operating Income Cash Flow Before Debt Service

The results of the Yield Capitalization analysis are presented below:

PRICING MATRIX - Market Value As-Is Terminal Discount Rate (IRR) for Cash Flow Cap Rates 5.50% 5.75% 6.00% 6.25% 6.50% 5.00%$ 498,185,248 $ 487,929,159 $ 477,937,321 $ 468,202,076 $ 458,716,010 5.25%$ 484,157,685 $ 474,262,098 $ 464,620,678 $ 455,226,073 $ 446,071,163 5.50%$ 471,405,355 $ 461,837,497 $ 452,514,639 $ 443,429,706 $ 434,575,847 5.75%$ 459,761,924 $ 450,493,296 $ 441,461,299 $ 432,659,111 $ 424,080,124 6.00%$ 449,088,778 $ 440,094,446 $ 431,329,071 $ 422,786,065 $ 414,459,045

IRR Reversion 5.50% 5.75% 6.00% 6.25% 6.50% Cost of Sale at Reversion: 4.00% Percent Residual: 56.18% Rounded to nearest $5,000,000 $455,000,000 $757.52 Based on the rates selected, the value via the Yield Capitalization analysis is estimated at $455,000,000, rounded. The reversion contributes 56.18 percent to this value estimate.

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GATEWAY CENTER II INCOME CAPITALIZATION APPROACH

Direct Capitalization Method

COMPARABLE RETAIL CENTER SALES OVERALL CAPITALIZATION RATE SUMMARY

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GATEWAY CENTER II INCOME CAPITALIZATION APPROACH

DIRECT CAPITALIZATION METHOD Market Value As-Is NET OPERATING INCOME $23,449,501 $39.04 Sensitivity Analysis (0.25% OAR Spread) Value $/SF NRA Based on Low-Range of 4.75% $493,673,705 $821.90 Based on Most Probable Range of 5.00% $468,990,020 $780.81 Based on High-Range of 5.25% $446,657,162 $743.63 Reconciled Value $468,990,020 $780.81 Rounded to nearest $5,000,000 $470,000,000 $782.49 Compiled by Cushman & Wakefield, Inc. Based on the rate selected, our value via the Direct Capitalization Method is estimated at $470,000,000, rounded.

INCOME CAPITALIZATION APPROACH CONCLUSION

We have considered both the Discounted Cash Flow and the Direct Capitalization Method in our analysis of the subject property. Our opinion of market values via the Income Capitalization Approach is as follows.

INCOME CAPITALIZATION APPROACH CONCLUSION Market Value Methodology As-Is PSF Discounted Cash Flow $455,000,000 $757.52 Direct Capitalization $470,000,000 $782.49 Income Approach Conclusion $465,000,000 $774.17 Compiled by Cushman & Wakefield, Inc.

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GATEWAY CENTER II ADDENDA CONTENTS

Addendum C: Comparable Improved Retail Sales

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GATEWAY CENTER II ADDENDA CONTENTS

SUMMARY OF IMPROVED SALES

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GATEWAY CENTER II VALUATION ADDENDUM

Addendum D: Qualification of the Appraisers

CUSHMAN & WAKEFIELD

Charles R. Looney Appraiser Valuation & Advisory Cushman & Wakefield, Inc.

James P. Stuckey Jr. Director Valuation & Advisory Practice Group Member | Retail Cushman & Wakefield, Inc.

NEW YORK

CUSHMAN & WAKEFIELD 2

John A. Katinos, MAI Executive Director Valuation & Advisory Practice Group Member | Retail Cushman & Wakefield, Inc.