APPRAISAL OF REAL PROPERTY Brookings Harbor Shopping Center 97900 Shopping Center Avenue Harbor, Curry County, OR 97415 IN AN APPRAISAL REPORT As of March 19, 2015 Prepared For: Crystal Financial LLC Two International Place, 17th Floor Boston, MA 02110 Prepared By: Cushman & Wakefield of Oregon, Inc. Valuation & Advisory 200 S.W. Market Street, Suite 200 Portland, OR 97201 C&W File ID: 15-34001-900123-004 CUSHMAN & WAKEFIELD OF OREGON, INC. 200 S.W. MARKET STREET, SUITE 200 PORTLAND, OR 97201 Brookings Harbor Shopping Center 97900 Shopping Center Avenue Harbor, Curry County, OR 97415 200 S.W. MARKET STREET, SUITE 200 PORTLAND, OR 97201 March 25, 2015 Mr. Evren Ozargun Managing Director Crystal Financial LLC Two International Place, 17th Floor Boston, MA 02110 Re: Appraisal of Real Property In an Appraisal Report Brookings Harbor Shopping Center 97900 Shopping Center Avenue Harbor, Curry County, OR 97415 Latitude: 42.049888 Longitude: -124.260634 C&W File ID: 15-34001-900123-004 Dear Mr. Ozargun: In fulfillment of our agreement as outlined in the Letter of Engagement, we are pleased to transmit our appraisal of the above property in an Appraisal Report dated March 25, 2015. The effective date of value is March 19, 2015. This is an Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice. As such, it presents limited discussions of the data, reasoning, or analyses used in the appraisal process to develop the appraisers' opinion of value. Additional supporting documentation concerning the data, reasoning, and analyses is retained in our files. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated below. This Appraisal Report has been prepared in accordance with our interpretation of your institution’s guidelines, Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), and the Uniform Standards of Professional Appraisal Practice (USPAP). The subject property consists of a neighborhood shopping center that contains 106,867 square feet of rentable area. The improvements were completed in 1965 and are in average condition. The property is currently 52.56 percent occupied by 18 tenants. MR. EVREN OZARGUN CUSHMAN & WAKEFIELD OF OREGON, INC. CRYSTAL FINANCIAL LLC MARCH 25, 2015 PAGE 2 Based on the agreed-to Scope of Work, and as outlined in the report, we developed the following opinions of Market Value: Value Conclusions Value Appraisal Premise Real Property Interest Date Of Value Conclusion Market Value As-Is Leased Fee 3/19/2015 $3,250,000 Prospective Market Value Upon Stabilization Leased Fee 3/19/2017 $4,000,000 Compiled by Cushman & Wakefield of Oregon, Inc. The value opinions in this report are qualified by certain assumptions, limiting conditions, certifications, and definitions, as well as the following extraordinary assumptions and hypothetical conditions, if any. EXTRAORDINARY ASSUMPTIONS For a definition of Extraordinary Assumptions please see the Glossary of Terms & Definitions. The use of extraordinary assumptions, if any, might have affected the assignment results. This appraisal does not employ any extraordinary assumptions. HYPOTHETICAL CONDITIONS For a definition of Hypothetical Conditions please see the Glossary of Terms & Definitions. The use of hypothetical conditions, if any, might have affected the assignment results. This appraisal does not employ any hypothetical conditions. This letter is invalid as an opinion of value if detached from the report, which contains the text, exhibits, and Addenda. Respectfully submitted, CUSHMAN & WAKEFIELD OF OREGON, INC. Christopher P. Sherland Steven A. Zenker, MAI Associate Director Executive Director OR Certified General Appraiser OR Certified General Appraiser License No. C001119 (Expires 8/31/2016) License No. C000202 (Expires 1/31/2016) [email protected] [email protected] (503) 279-1797 Office Direct (503) 279-1736 Office Direct (503) 279-1791 Fax (503) 279-1791 Fax BROOKINGS HARBOR SHOPPING CENTER CLIENT SATISFACTION SURVEY III CLIENT SATISFACTION SURVEY As part of our quality monitoring campaign, attached is a short survey pertaining to this appraisal report and the service that you received. Would you please take a few minutes to complete the survey to help us identify the things you liked and did not like? Each of your responses will be catalogued and reviewed by members of our national Quality Control Committee, and appropriate actions will be taken where necessary. Your feedback is critical to our effort to continuously improve our service to you, and is sincerely appreciated. To access the questionnaire, please click on the link here: http://www.surveymonkey.com/s.aspx?sm=_2bZUxc1p1j1DWj6n_2fswh1KQ_3d_3d&c=15-34001-900123-004 The survey is hosted by Surveymonkey.com, an experienced survey software provider. Alternatively, simply print out the survey attached in the Addenda of this report and fax it to (716) 852-0890. BROOKINGS HARBOR SHOPPING CENTER SUMMARY OF SALIENT FACTS AND CONCLUSIONS IV Summary of Salient Facts and Conclusions Client: Crystal Financial LLC Intended Use: This appraisal is intended to provide an opinion of the Market Value of the Leased Fee interest in the property in connection with a proposed first mortgage loan to be made by the Client. This report is not intended for any other use. Intended User: This Appraisal Report was prepared for the exclusive use of Crystal Financial LLC and participating lenders/bank group. Use of this report by others is not intended by the appraiser. Identification of Real Brookings Harbor Shopping Center Estate: 97900 Shopping Center Avenue Harbor, Curry County, Oregon 97415 Current Use: The subject property consists of a neighborhood shopping center with net rentable area of 106,867 square feet. Structural Vacancy: Taking into account the subject’s configuration, existing occupancy level, and the nature of its trade area, we have analyzed the center as having a certain level of “permanent” vacancy. In all, we see the subject’s long-term occupancy within a reasonable range of 80.0 to 85.0± percent. It is noted that prior to the vacancy of the property’s supermarket anchor, total occupancy was in range of 83.5± percent. Accordingly, our vacancy, credit loss, and structural vacancy assumptions should amount to a level of 15.0 to 20.0± percent of total GLA. With this in mind, we have withheld 15,994 square feet of inline and office space, comprising 14.96 percent of total GLA, as reflecting permanent or structural vacancy. Structural vacancy is in addition to our forecasted vacancy and credit loss provision, to be discussed later in this report. Highest & Best Use A shopping center built to its maximum feasible building area, time and circumstances (As if Vacant): warranting, with an interim use to hold for future development. Highest & Best Use A shopping center as it is currently improved. (As Improved): Type of Value Market Value (defined later in this report). Real Property Interest Leased Fee Valued: Current Ownership: C&K Market, Inc. Sale History: To the best of our knowledge, the property has not transferred within the past three years. Current Disposition: To the best of our knowledge, the property is not under contract of sale nor is it being marketed for sale. BROOKINGS HARBOR SHOPPING CENTER SUMMARY OF SALIENT FACTS AND CONCLUSIONS V Personal Property: Personal property was excluded from our valuation. Date of Inspection: March 19, 2015 Effective Dates of Valuation: As Is: March 19, 2015 Upon Stabilization: March 19, 2017 Date of Report: March 25, 2015 Extraordinary This appraisal does not employ any extraordinary assumptions. Assumptions: Hypothetical Conditions: This appraisal does not employ any hypothetical conditions. BROOKINGS HARBOR SHOPPING CENTER SUMMARY OF SALIENT FACTS AND CONCLUSIONS VI Market Value Prospective Market Value VALUATION INDICES As-Is Upon Stabilization VALUE DATE 3/19/2015 3/19/2017 SALES COMPARISON APPROACH Indicated Value: $3,500,000 $4,250,000 Per Square Foot (GLA): $32.75 $39.77 INCOME CAPITALIZATION APPROACH Yield Capitalization Projection Period: 13 Years 11 Years Holding Period: 12 Years 10 Years Terminal Capitalization Rate: 10.00% 10.00% Internal Rate of Return: 11.00% 10.50% Indicated Value: $3,150,000 $3,900,000 Per Square Foot (GLA): $29.48 $36.49 Direct Capitalization Net Operating Income: $123,641 $404,261 Capitalization Rate: See stabilized conclusion 9.50% Preliminary Value: See stabilized conclusion $4,255,379 Value (Rounded): See stabilized conclusion $4,250,000 LESS As-Is Adjustment ($750,000) N/A Indicated Value: $3,500,000 $4,250,000 Per Square Foot (GLA): $32.75 $39.77 Income Capitalization Approach Indicated Value: $3,250,000 $4,000,000 Per Square Foot (GLA): $30.41 $37.43 FINAL VALUE CONCLUSION Real Property Interest: Leased Fee Leased Fee Concluded Value: $3,250,000 $4,000,000 Per Square Foot (GLA): $30.41 $37.43 Implied Capitalization Rate: N/A 10.11% EXPOSURE AND MARKETING TIME Exposure Time: 12 Months Marketing Time: 12 Months BROOKINGS HARBOR SHOPPING CENTER PROPERTY PHOTOGRAPHS VII Property Photographs AERIAL PHOTOGRAPH BROOKINGS HARBOR SHOPPING CENTER PROPERTY PHOTOGRAPHS VIII Eastern elevation of vacant anchor Northern elevation of inline shops BROOKINGS HARBOR SHOPPING CENTER PROPERTY PHOTOGRAPHS IX Eastern elevation of inline shops Interior view of vacant anchor Eastern elevation of Suites 5 and 6 Interior