GTJ REIT, Inc. Form 10-K Annual Report Filed 2018-03-29

SECURITIES AND EXCHANGE COMMISSION

FORM 10-K Annual report pursuant to section 13 and 15(d)

Filing Date: 2018-03-29 | Period of Report: 2017-12-31 SEC Accession No. 0001564590-18-007123

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FILER GTJ REIT, Inc. Mailing Address Business Address 60 HEMPSTEAD AVENUE 60 HEMPSTEAD AVENUE CIK:1368757| IRS No.: 000000000 | State of Incorp.:MD | Fiscal Year End: 1231 WEST HEMPSTEAD NY WEST HEMPSTEAD NY Type: 10-K | Act: 34 | File No.: 333-136110 | Film No.: 18723009 11552 11552 SIC: 6798 Real estate investment trusts (516) 693-5500

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K

(Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2017 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 333-136110 GTJ REIT, INC. (Exact name of registrant as specified in its charter)

MARYLAND 20-5188065 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 60 Hempstead Avenue, West Hempstead, New York 11552 (Address of principal executive offices) (Zip Code) (516) 693-5500 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “small reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ (do not check if a smaller reporting company) Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked priced of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: N/A. There is no established public market for the registrant’s shares of common stock.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of March 22, 2018, there were 13,589,125 shares of common stock issued and outstanding.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document GTJ REIT, INC. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2017 TABLE OF CONTENTS

PAGE PART I ITEM 1. BUSINESS 2 ITEM 1A. RISK FACTORS 8 ITEM 1B. UNRESOLVED STAFF COMMENTS 22 ITEM 2. PROPERTIES 23 ITEM 3. LEGAL PROCEEDINGS 25 ITEM 4. MINE SAFETY DISCLOSURES 26 PART II ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 27 ITEM 6. SELECTED FINANCIAL DATA 28

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 29 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 35 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 37 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 63 ITEM 9A. CONTROLS AND PROCEDURES 64 ITEM 9B. OTHER INFORMATION 64 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 65 ITEM 11. EXECUTIVE COMPENSATION 69 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 74 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 75 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 77 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 78

ITEM 16. FORM 10-K SUMMARY 86

Certain information included in this Annual Report contains or may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Historical results and trends should not be taken as indicative of future operations. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “prospects,” “seek,” or similar expressions. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: • changes in economic conditions generally and the real estate market specifically; • legislative or regulatory changes, including changes to laws governing the taxation of real estate investment trusts (“REITs”); • availability of capital; • interest rates; • our ability to service our debt; • competition; • supply and demand for operating properties in our current and proposed market areas; • changes to generally accepted accounting principles; • policies and guidelines applicable to REITs; and • litigation including costs associated with the prosecuting or defending claims and any adverse outcomes.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Although we believe the assumptions underlying the forward-looking statements, and the forward-looking statements themselves, are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved. The forward-looking statements are made as of the date of this Annual Report, and we assume no obligation to update the forward-looking statements or to update the reasons actual results could differ from those projected in such forward-looking statements, unless otherwise required by law.

PART I

ITEM 1. BUSINESS Overview GTJ REIT, Inc. (the “Company,” “we,” “us,” “our,” or “GTJ REIT”) is a self-administered and self-managed real estate investment trust (“REIT”) which, as of the date of this report, owns and operates, through GTJ Realty, LP, a limited partnership owned and controlled by the Company (the “Operating Partnership”) a total of 49 commercial properties in New York, New Jersey, Connecticut, and Delaware. We focus primarily on the acquisition, ownership, management and operation of commercial real estate. We previously provided, through our taxable REIT subsidiaries, outdoor maintenance and shelter cleaning services, as well as electrical construction services. These operations have all been disposed.

The Company was incorporated on June 26, 2006 in Maryland. On March 29, 2007, the Company completed a merger transaction with Triboro Coach Corp., Jamaica Central Railways, Inc., and Green Bus Lines, Inc., (together collectively referred to as the “Bus Companies”). The effect of the merger transaction was to complete a reorganization (the “Reorganization”) of the ownership of the Bus Companies into GTJ REIT, with the former stockholders of the Bus Companies becoming stockholders in GTJ REIT. The Company then commenced operations as a fully integrated real estate company, and elected to be treated as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended (the “Code”), effective July 1, 2007.

On January 17, 2013, the Company closed on a transaction with Wu/Lighthouse Portfolio, LLC, in which the Operating Partnership acquired all outstanding ownership interests of a portfolio consisting of 25 commercial properties (the “Acquired Properties”) located in New York, New Jersey and Connecticut, in exchange for 33.29% of the outstanding limited partnership interest

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document in the Operating Partnership. The outstanding limited partnership interest in the Operating Partnership exchanged for the Acquired Properties was increased to 33.78% due to post-closing adjustments, and to 34.35% due to the redemption of certain outstanding shares of GTJ REIT, Inc. common stock. The acquisition was recorded as a business combination and accordingly the purchase price was allocated to the assets acquired and liabilities assumed at fair value. As a result of this acquisition and the acquisition of six properties in 2014, seven in 2015, two properties in 2016, and two in 2017, the Company currently beneficially owns a 65.65% interest in a total of 49 properties consisting of approximately 5.9 million square feet of primarily industrial properties on approximately 400 acres of land in New York, New Jersey, Connecticut and Delaware. • Our 2018 contractual rental income (as described below) is approximately $45.8 million; • The occupancy rate of our properties owned as of December 31, 2017, is approximately 98% based on square footage, plus land available; • The weighted average remaining term of the leases generating our 2018 contractual rental income is 6.4 years.

Our 2018 contractual rental income includes, after giving effect to any abatements, concessions or adjustments, rental income that is payable in 2018 under leases existing at December 31, 2017. Contractual rental income excludes straight-line rent and amortization of intangibles.

2017 Highlights • Total revenues were $53.2 million in 2017, an increase of $3.5 million, or 7%, from 2016. • Operating Income increased $0.5 million, or 3%, to $20.5 million in 2017 from $20.0 million in 2016. • Completed approximately 634,558 square feet of new leasing and renewals of existing leases during 2017. • Net income from operations decreased $0.5 million to $3.6 million in 2017 from $4.1 million in 2016. • Adjusted Funds From Operations, or AFFO, attributable to our stockholders increased to $12.8 million in 2017 from $11.7 million in 2016. • EBITDA (earnings before interest, taxes, depreciation and amortization) attributable to our stockholders increased to $22.7 million in 2017 from $21.3 million in 2016. • On July 27, 2017, the Company acquired a 109,771 square-foot distribution and installation training building in Cherry Hill, New Jersey for $7.6 million. The property is leased to Sovereign Distributors, Inc. (d/b/a Avalon Flooring) for a term that expires September 30, 2031. The purchase was financed from the Company’s secured revolving credit facility. • On August 31, 2017, the Company acquired a 248,370 square-foot warehouse/distribution facility in Montgomery, New York for $36.2 million. The property is leased to FedEx Ground Package System, Inc. for a term that expires February 28, 2027. The purchase was financed from the Company’s secured revolving credit facility. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures” for a reconciliation of AFFO and EBITDA to net income attributable to common stockholders.

Description of Business We intend to further expand our real estate portfolio beyond our current portfolio of 49 properties. We seek to acquire commercial real estate at favorable prices, focusing on the industrial product sector. We believe that quality tenants seek well-managed properties that offer superior and dependable services, particularly in competitive markets. We believe that a critical success factor in property acquisition lies in possessing the ability and flexibility to move quickly when an opportunity presents itself.

We intend to acquire fee ownership interests, but may also enter into joint venture arrangements. We seek to maximize current cash flows and seek long-term increases in the value of our assets. Our policy is to acquire assets where we believe opportunities exist for appropriate risk adjusted investment returns. We seek to accomplish this by investing in quality properties in geographic markets that we believe to be attractive and offer the potential of current and future demand, renovating acquired properties as appropriate, maintaining and efficiently operating our properties, and establishing good relationships with our tenants and the local communities.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We intend to invest primarily in quality commercial real estate, specifically targeting industrial properties since they: • generally require less capital expenditures than other commercial property types; • typically feature longer term leases, thereby reducing our vacancy and leasing costs; • feature net leases under which the tenant is generally responsible for real estate taxes, insurance and ordinary operating expenses. Since our target tenants tend to manage the properties directly, this enables us to grow our portfolio without substantially increasing the size of our property management infrastructure; and • provide a platform for our goals of both predictable and stable cash flow and the opportunity for long term real estate appreciation.

To the extent it is in the best interests of our stockholders, we will seek to invest in a diversified portfolio of properties that will satisfy our primary investment objectives of providing our stockholders with stable cash flow, preservation of capital, and growth of income and principal, without taking undue risk. We anticipate that the majority of properties we acquire will have both the potential for growth in value and the ability to provide current cash distributions to stockholders.

We intend to acquire properties with financing from mortgage or other debt or may acquire properties subject to existing indebtedness. We may also acquire properties, including a portfolio of properties, in exchange for an interest in our Operating Partnership (GTJ Realty, LP). We do not intend to incur aggregate indebtedness in excess of 75% of the gross fair value of our properties. Fair value, defined as the amount at which an investment could be exchanged in a current transaction with market participants, will be determined by management, using analytical data and other available information, including independent appraisals.

Decisions relating to the purchase or sale of properties are approved by our Board of Directors (the “Board of Directors” or “Board”). Our Board is responsible for monitoring the administrative procedures, investment operations, and performance of our Company to ensure our policies are carried out. Our Board oversees our investment policies to determine that our policies are in the best interests of our stockholders.

Our Business Objective Our business objective is to maintain and increase, over time, the cash available for distribution to our stockholders and enhance stockholder value by: • identifying opportunistic and strategic property acquisitions consistent with our portfolio and our acquisition strategies; • obtaining mortgage indebtedness on favorable terms and maintaining access to capital to finance property acquisitions and our growth plans; and • monitoring our portfolio, including leasing, tenant relations, operational and property management performance and property enhancements.

Typical Property Attributes The properties in our portfolio typically have the following attributes: • Net or ground leases. Substantially all of the leases are net or ground leases under which the tenant is typically responsible for real estate taxes, insurance and ordinary maintenance and repairs. We believe that investments in net or ground leased properties offer more predictable returns than investments in properties that are not net or ground leased; • Long-term leases. Substantially all of our leases are long-term leases. Leases representing approximately 85% of our 2018 contractual rental income expire after 2019, and leases representing approximately 6% of our 2018 contractual rental income expire after 2027; and • Scheduled rent increases. Leases representing approximately 83% of our 2018 contractual rental income provide for either periodic contractual rent increases or a rent increase based on the consumer price index.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Considerations Related to Potential Acquisitions The following are some of the material considerations which we evaluate in relation to potential acquisitions: • general credit quality of current or prospective tenants, including their ability to meet operational needs and lease obligations; • the estimated return on equity to us; • the terms of tenant leases, including the relationship between current rents and market rents; • the projected residual value of the property; • the potential to finance the property; • prospects for liquidity through sale or refinancing of the property; • current and projected long term cash flow and potential for capital appreciation; • alternate uses or tenants for the property; • property quality and condition and expectation of future capital needs; • potential for economic growth in the community in which the property is located; • potential for expanding the physical layout of the property; • occupancy and demand by tenants for properties of a similar type in the same geographic vicinity; and • competition from existing properties and the potential for the construction of new properties in the market.

We will not acquire any property until we obtain an environmental assessment for each property and are satisfied with the environmental status of the property.

We anticipate that the purchase price of properties we acquire will vary depending on the general interest rate environment and availability of credit in addition to tenant profile, value of leases in place, property condition, size and location. We are not specifically limited in the number or size of properties we may acquire. The number and mix of properties we may acquire will depend upon existing real estate and market conditions and other relevant circumstances. Our operating costs will vary based on the amount of debt we incur in connection with financing the acquisition. It is difficult to predict the actual number or timing of properties that we will acquire because the purchase price of properties vary widely and our investment in each will vary based on the amount and cost of debt financing we use.

Acquisition Strategies We seek to acquire properties that have locations, demographics and other investment attributes that we believe to be attractive. We believe that long-term leases provide a predictable income stream over the term of the lease, making fluctuations in market rental rates and in real estate values less significant to achieving our overall investment objectives. Our preference is to acquire single-tenant properties that are subject to long-term net or ground leases that include periodic contractual rental increases or rent increases based on increases in the consumer price index. Periodic contractual rental increases provide reliable increases in future rent payments and rent increases based on the consumer price index provide protection against inflation. Historically, long-term leases have made it easier for us to obtain longer-term, fixed-rate mortgage financing, thereby moderating the interest rate risk. We may, however, acquire a property that is subject to a short-term lease when we believe the property represents a good opportunity for recurring income, potential repositioning and residual value. Although the acquisition of single-tenant properties subject to net and ground leases is the focus of our investment strategy, we will also consider investments in, among other things, properties that can be repositioned or redeveloped and multi-tenant properties.

Generally, we hold the properties we acquire for an extended period of time. Our investment criteria are intended to identify properties from which increased asset value and overall return can be realized from an extended period of ownership. Although our investment criteria favor an extended period of ownership, we will dispose of a property if we regard the disposition of the property as an opportunity to realize the overall value of the property sooner or to avoid future risks by achieving a determinable return from the property.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Our charter documents do not limit the number of properties in which we may invest, or the amount or percentage of our assets that may be invested in any specific property or property type. We will continue to form entities to acquire interests in real properties, either alone or with other investors, and we may acquire interests in joint ventures or other entities that own real property.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Competitive Strengths We compete for the purchase of commercial property with a variety of investors, including domestic and foreign entities, other REITs, insurance companies, and pension funds, as well as corporate and individual developers and owners of real estate, some of which are publicly traded. We believe that our investment strategy and operating model distinguish us from other owners, operators and acquirers of industrial real estate in a number of ways, including: • Established Intermediary Relationships: We believe we have developed a reputation as a credible buyer of single-tenant industrial real estate, which provides us access to significant acquisition opportunities that may not be available to our competitors. • Scalable Platform: Our focus on net lease properties ensures that our current staff (with incremental additions of employees) and infrastructure are sufficient to support our continued growth. • Expertise in Underwriting Single-Tenant Properties: We believe that our industry and market relationships, market penetration and knowledge, combined with an expertise in assessing tenant retention and vacancy costs are advantages in identifying, underwriting and closing on attractive real estate acquisition opportunities. • Experienced Management Team: The two senior members of our management team have significant real estate industry experience, each averaging in excess of 30 years.

Our Policies With Respect to Borrowing We presently anticipate that we will borrow funds, secured by the acquired property, as we purchase new properties. We may later refinance or increase mortgage indebtedness by obtaining additional loans secured by selected properties. Our Board reviews our aggregate borrowings to ensure that such borrowings are reasonable in relation to our assets.

We may also seek an acquisition facility to finance the purchase of additional properties, finance capital and/or tenant improvements or major repairs and maintenance and, if necessary, for working capital needs, or to meet our distribution requirements. We anticipate that aggregate borrowings, both secured and unsecured, will not exceed 75% of the gross fair value of our properties.

When incurring secured debt, we will seek to incur nonrecourse indebtedness, which means that the lenders’ rights in the event of our default generally will be limited to foreclosure on the property(ies) that secured the obligation. However, we may have to accept limited recourse financing, where we remain liable for any shortfall between the debt and the proceeds of sale of the mortgaged property. If we incur mortgage indebtedness, we will endeavor to obtain level payment financing, meaning that the amount of debt service payable would be substantially the same each year. However, we acknowledge that some mortgages are likely to provide for one large payment, and therefore, we may incur floating or adjustable rate financing depending on market conditions.

Sale or Other Disposition of Our Properties Management, with approval from our Board, determines whether a particular property should be sold or otherwise disposed of after consideration of the relevant factors, including performance or projected performance of the property and market conditions, with a view toward achieving our principal investment objectives including maximizing capital appreciation and the effect on our obligations under existing agreements.

The determination of whether a particular property should be sold or otherwise disposed of will be made after consideration of the relevant factors, including prevailing economic, market, property and tenant conditions, with a view to achieving maximum capital appreciation. We cannot assure you that this objective will always be realized.

If we sell any of the 25 properties we acquired in the January 2013 transaction prior to January 2020, we may be required to pay the former Wu/Lighthouse partners certain monies as set forth in the Tax Protection Agreement.

Changes in Our Investment Objectives Subject to the limitations in our charter, our bylaws, and the Maryland General Corporation Law, our business and policies will be controlled by our Board. Our Board has the right to establish policies concerning investments and the right, power, and obligation to monitor our procedures, investment operations, and performance of our Company. Thus, stockholders must be aware that the Board, acting consistently with our organizational documents, applicable law, and their fiduciary obligations, may elect to modify our objectives and policies from time to time.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Discontinued Outdoor Maintenance Operations We, through our wholly owned subsidiary, Shelter Express Corp., operated a group of outdoor maintenance, shelter cleaning, and electrical contracting businesses, as well as a parking garage facility. During 2011, our Board voted to divest these operations.

Employees As of December 31, 2017, we had a total of 13 employees, 12 of whom are full time, who were employed at GTJ REIT, Inc. We consider our relations with our employees to be good.

Our Compliance with Governmental Regulations Many laws and government regulations are applicable to our Company and changes in these laws and regulations, or their interpretation by agencies and the courts, occur frequently.

Costs of Compliance with the Americans with Disabilities Act Under the Americans with Disabilities Act of 1990, or ADA, all public accommodations must meet federal requirements for access and use by disabled persons. Although we believe that we are in substantial compliance with present requirements of the ADA, none of our properties have been audited, nor have investigations of our properties been conducted to determine compliance. Therefore, we may incur additional costs in connection with the ADA. There are also federal, state, and local laws which also may require modifications to our properties or restrict our ability to renovate our properties. We cannot predict the cost of compliance with the ADA or other legislation. If we incur substantial costs to comply with the ADA or any other legislation, our financial condition, results of operations, cash flow, and ability to satisfy our debt service obligations and pay dividends and distributions could be adversely affected.

Costs of Government Environmental Regulation and Private Litigation Environmental laws and regulations hold us liable for the costs of removal or remediation of certain hazardous or toxic substances which may be on our properties. These laws could impose liability without regard to whether we are responsible for the presence or release of the hazardous materials. Government investigations and remediation actions may have substantial costs and the presence of hazardous substances on a property could result in personal injury or similar claims by private plaintiffs. Various laws also impose liability on persons who arrange for the disposal or treatment of hazardous or toxic substances for the cost of removal or remediation of hazardous substances at the disposal or treatment facility. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. If we incur substantial costs to comply with any governmental environmental laws and regulations or the results of private litigation, our financial condition, results of operations, cash flow, and ability to satisfy our debt obligations and pay dividends and distributions could be adversely affected.

Use of Hazardous Substances by Some of Our Tenants Some of our tenants may handle hazardous or toxic substances and wastes on our properties as part of their routine operations. Environmental laws and regulations subject these tenants, and potentially us, to liability resulting from such activities. We require the tenants, in their respective leases, to comply with these environmental laws and regulations and to indemnify us for any related liabilities. We are unaware of any material noncompliance, liability, or claim relating to hazardous or toxic substances or petroleum products in connection with any of our properties. If we incur substantial costs in order to comply with any environmental laws and regulations, our financial condition, results of operations, cash flow, and ability to satisfy our debt obligations and pay dividends and distributions could be adversely affected.

Other Federal, State, and Local Regulations Our properties are subject to various federal, state, and local regulatory requirements, such as state and local fire and life safety requirements. If we fail to comply with these various requirements, we may incur governmental fines or private damage awards. Although we believe that our properties are currently in material compliance with all of these regulatory requirements, we do not know whether existing requirements will change or whether future requirements will require us to make significant unanticipated expenditures that will adversely affect our ability to make liquidating distributions to our stockholders. We believe, based in part on engineering reports which we generally obtain at the time we acquire the properties, that all of our properties comply in all material respects with current regulations. However, if we were required to make significant expenditures under applicable regulations, our

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document financial condition, results of operations, cash flow, and ability to satisfy our debt service obligations and pay dividends and distributions could be adversely affected.

Our Corporate Information Our principal executive offices are located at 60 Hempstead Avenue, Suite 718, West Hempstead, New York 11552. Our telephone number is (516) 693-5500. Our website is www.gtjreit.com. The information found on, or otherwise accessible through, our website is not incorporated into, and does not form a part of, this report or any other report or document we file with or furnish to the Securities and Exchange Commission (“SEC”).

How to Obtain Our SEC Filings All reports we file with the SEC are available free of charge via EDGAR through the SEC website at www.sec.gov. In addition, the public may read and copy materials we file with the SEC at the SEC’s public reference room located at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the public reference room can be obtained by calling the SEC at 1-800-SEC-0330. Our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to any of those reports that we file with the SEC are available free of charge as soon as reasonably practicable through our website at www.gtjreit.com. The information found on, or otherwise accessible through, our website is not incorporated into, and does not form a part of, this report or any other report or document we file with or furnish to the SEC.

ITEM 1A. RISK FACTORS You should carefully consider the specific factors listed below, together with the cautionary statement under the caption “Forward Looking-Statements” and the other information included in this Annual Report on Form 10-K. If any of the following significant risk factors set forth below actually occur, our business, financial condition, or results of operation could be materially adversely affected and the value of our common stock could decline and potentially affect our ability to pay dividends and distributions.

Risks Related to our Organization and Structure Our failure to continue to qualify as a REIT would subject us to corporate level income tax, which would materially impact funds available for distribution. We intend to continue to operate in a manner so as to qualify as a REIT. Qualifying as a REIT requires us to meet several tests regarding the nature of our assets and income on an ongoing basis. A number of the tests established to qualify as a REIT for tax purposes are fact specific. Therefore, while we intend to continue to qualify as a REIT, it may not be possible at this time to assess our ability to satisfy these various tests on a continuing basis. Additionally, we cannot guarantee that we will remain qualified as a REIT in the future.

If we fail to qualify as a REIT in any year, we would be required to pay federal income tax on our net income. Our payment of income tax would substantially decrease the amount of cash available to be distributed to our stockholders. In addition, we would no longer be required to distribute substantially all of our taxable income to our stockholders. Unless our failure to qualify as a REIT is excused under relief provisions of the federal income tax laws, we could not re-elect REIT status until the fifth calendar year following the year in which we failed to qualify.

We depend on key personnel and the loss of their full service could adversely affect us. Our success depends to a significant degree upon the continued contributions of certain key personnel including, but not limited to, our management team, whose continued service is not guaranteed, and each of whom would be difficult to replace. If any of our key personnel were to cease employment with us, our operating results could suffer. Our ability to retain our management group or to attract suitable replacements should any members of the management group leave is dependent on the competitive nature of the employment market. The loss of services from key members of the management group or a limitation in their availability could adversely impact our financial condition and cash flows. Further, such a loss could be negatively perceived in the marketplace.

Our growth depends on external sources of capital which are outside of our control, which may affect our ability to seize strategic opportunities, satisfy debt obligations and make distributions to our stockholders. In order to maintain our qualification as a REIT, we are generally required under the Code to distribute annually at least 90% of our net taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. In

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document addition, we will be subject to income tax at regular corporate rates to the extent that we distribute less than 100% of our net taxable income, including any net capital gains. Because of these distribution requirements, we may not be able to fund future capital needs, including any necessary acquisition financing, from operating cash flow. Consequently, we may rely on third‑party sources to fund our capital needs. We may not be able to obtain financing on favorable terms or at all. Any additional debt we incur will increase our leverage. Our access to third‑party sources of capital depends, in part, on general market conditions, the market’s perception of our growth potential, our current debt levels, our current and expected future earnings, our cash flow and cash dividends, among other factors. If we cannot obtain capital from third‑party sources, we may not be able to acquire properties when strategic opportunities exist, meet the capital and operating needs of our existing properties or satisfy our debt service obligations. Further, in order to meet the REIT distribution requirements and maintain our REIT status and to avoid the payment of income and excise taxes, we may need to borrow funds on a short‑term basis even if the then prevailing market conditions are not favorable for these borrowings. These short‑term borrowing needs could result from differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes or the effect of non‑deductible capital expenditures, the creation of reserves, certain restrictions on distributions under loan documents or required debt or amortization payments. To the extent that capital is not available to acquire properties, profits may not be realized or their realization may be delayed, which could result in an earnings stream that is less predictable than some of our competitors and result in us not meeting our projected earnings and distributable cash flow levels in a particular reporting period. Failure to meet our projected earnings and distributable cash flow levels in a particular reporting period could have an adverse effect on our financial condition.

To maintain our REIT status, we may be forced to forego otherwise attractive opportunities, which may delay or hinder our ability to meet our investment objectives and reduce our stockholders’ overall return. To continue to qualify as a REIT, we must satisfy certain tests on an ongoing basis concerning, among other things, the sources of our income, nature of our assets and the amounts we distribute to our stockholders. We may be required to make distributions to stockholders at times when it would be more advantageous to reinvest cash in our business or when we do not have funds readily available for distribution. Compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits and the value of our stockholders’ investment.

Risks Related to Our Business and Properties We depend upon our tenants to pay rent in a timely manner, and their inability or unwillingness to pay rent could impact our ability to pay our indebtedness, leading to possible defaults, and reduce cash available for distribution to our stockholders. Our real property, particularly those we may purchase in the future, will be subject to varying degrees of risk that generally arise from such ownership. The underlying value of our properties and the ability to make distributions to our stockholders depend upon the ability of the tenants of our properties to generate enough income to pay their rents in a timely manner. Their inability or unwillingness to do so may be impacted by the profitability of our tenants’ businesses or other constraints on their finances. Changes beyond our control may adversely affect our tenants’ ability to make lease payments and consequently would substantially reduce our income from operations and our ability to meet our debt service requirements and make distributions to our stockholders.

A default by a tenant, the failure of a tenant’s guarantor to fulfill its obligations, or other premature termination of a lease could, depending upon the size of the leased premises and our ability to successfully find a substitute tenant, have a materially adverse effect on our revenues, the value of our common stock or our cash available for distribution to our stockholders.

If we are unable to find tenants for our properties, particularly those we may purchase in the future, or find replacement tenants when leases expire and are not renewed by the tenants, our revenues, cash available for distribution to our stockholders and our ability to serve our debt obligations will be reduced.

Approximately 37% of our 2018 contractual rental income and 35% of our 2017 contractual rental income is derived from leases with the City of New York for five locations, three leases with Federal Express, and one lease with Avis Rent-A-Car Systems, Inc. A tenant default or financial distress could significantly reduce our revenues. Virtually all of our leases with the City of New York, Federal Express and Avis Rent-A-Car Systems, Inc. are triple net leases and provide for escalations. Any disruption or delay in these tenants’ ability to perform under the leases could cause interruptions in the receipt of, or loss of, a significant amount of rental revenues and could result in requiring us to pay operating expenses currently paid by the tenants which could substantially reduce our income from operations and our ability to meet our debt service requirements and make distributions to our stockholders.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We may not be able to diversify our real property portfolio due to the number and size of our competitors. Competition may adversely affect acquisition of properties and leasing operations. We compete for the purchase of commercial property with a variety of investors, including domestic and foreign entities, other REITs, insurance companies and pension funds, as well as corporate and individual developers and owners of real estate, some of which are publicly traded. Many of our competitors have substantially greater financial resources than ours. In addition, our competitors may be willing to accept lower returns on their investments. If our competitors prevent us from buying the properties that we have targeted for acquisition, we may not be able to meet our property acquisition goals. We may also incur costs on unsuccessful acquisitions that we will not be able to recover.

All of our properties are located in New York, New Jersey, Connecticut and Delaware making us vulnerable to changes in economic, regulatory or other conditions in the Northeast that could have a material adverse effect on our results of operations. All of our properties are located in New York, New Jersey, Connecticut and Delaware. This geographic concentration exposes us to greater risks than if we owned properties in multiple geographic regions. General economic conditions in the Northeast may significantly affect the occupancy and rental rates of our properties. Further, the economic condition of the region may also depend on a few industries and, therefore, an economic downturn in one of these industry sectors may adversely affect our performance. In addition to economic conditions, we may also be subject to changes in the region’s regulatory environment (such as increases in real estate and other taxes, costs of complying with government regulations or increased regulation and other factors) or other adverse conditions or events (such as natural disasters). Thus, adverse developments and/or conditions in the Northeast region could reduce demand for space, impact the credit-worthiness of our tenants or force our tenants to curtail operations, which could impair their ability to meet their rent obligations to us and, accordingly, could have a material adverse effect on our results of operations, and our ability to meet our debt service requirements and make distributions to our stockholders.

Lack of liquidity of real estate could make it difficult for us to sell properties within our desired time frame. Our business is subject to risks normally associated with investment primarily in real estate. Real estate investments are relatively illiquid. Our ability to vary our portfolio in response to changes in economic and other conditions will be limited. We cannot assure you that we will be able to dispose of a property when we want or need to. Consequently, the sale price for any property we may purchase in the future may not recoup or exceed the amount of our investment.

Our revenues and the value of our portfolio are affected by a number of factors that affect investments in leased real estate generally. We are subject to the general risks of investing in leased real estate. These include the non-performance of lease obligations by tenants, leasehold improvements that will be costly or difficult to remove or certain upgrades that may be needed should it become necessary to re-rent the leased space for other uses, rights of termination of leases due to events of casualty or condemnation affecting the leased space or the property or due to interruption of the tenant’s quiet enjoyment of the leased premises, and obligations of a landlord to restore the leased premises or the property following events of casualty or condemnation. The occurrence of any of these events could adversely impact our results of operations, liquidity and financial condition.

In addition, if our competitors offer space at rental rates below our current rates or the market rates, we may lose current or potential tenants to other properties in our markets. Additionally, we may need to reduce rental rates below our current rates in order to retain tenants upon expiration of their leases or to attract new tenants. As a result, our results of operations, cash flow and distributions to our stockholders may be adversely affected.

A number of risks to which our properties may be exposed may not be covered by insurance, which could result in losses which are uninsured. We could suffer a loss due to the cost to repair any damage to properties that are not insured or are underinsured. There are types of losses, generally of a catastrophic nature, such as losses due to terrorism, wars, earthquakes, or acts of God that are either uninsurable or not economically insurable. Generally, we will not obtain insurance for hurricanes, earthquakes, floods, or other acts of God unless required by a lender or we determine that such insurance is necessary and may be obtained on a cost-effective basis. If such a catastrophic event were to occur, or cause the destruction of one or more of our properties, we could lose both our invested capital and anticipated profits from such property.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We may be unable to renew our current leases, lease vacant space, including vacant space resulting from tenant defaults, or re-lease space as our current leases expire. We cannot assure you that leases at our properties will be renewed or that such properties will be re-leased at favorable rental rates. If the rental rates for our properties decrease, our tenants do not renew their leases or we do not re-lease a significant portion of our available space, including vacant space resulting from tenant defaults, and space for which leases are scheduled to expire, our financial condition, results of operations, cash flows, cash available for distribution to stockholders and our ability to satisfy our debt service obligations could be materially adversely affected. In addition, if we are unable to renew leases or re-lease a property, the resale value of that property could be diminished because the market value of a particular property will depend in part upon the value of the leases of such property.

Declining real estate valuations and impairment charges could adversely affect our earnings and financial condition. We review the carrying value of our properties when circumstances, such as adverse market conditions indicate potential impairment may exist. We base our review on an estimate of the future cash flows (excluding interest charges) expected to result from the real estate investment’s use and eventual disposition. We consider factors such as future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If our evaluation indicates that we may be unable to recover the carrying value of a real estate investment, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property. These losses would have a direct impact on our net income because recording an impairment loss results in an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results in future periods. A worsening real estate market may cause us to reevaluate the assumptions used in our impairment analysis. Impairment charges could adversely affect our financial condition.

Stockholders may not receive any distributions from the sale of one of our properties, or not receive such distributions in a timely manner, because we may have to provide financing to the purchaser of such property, resulting in an inability or delay of distributions to stockholders. When appropriate, we may structure the sale of a real property as a “like-kind exchange” under the federal income tax laws so that we may acquire qualifying like-kind replacement property meeting our investment objectives without recognizing taxable gain on the sale. Furthermore, we may reinvest in additional properties proceeds from the sale, financing, refinancing, or other disposition or, secondarily, to use such proceeds for capital improvements or maintenance and repair of existing properties or to increase our reserves for such purposes. The objective of reinvesting such portion of the sale, financing, and refinancing proceeds is to increase the total value of real estate assets that we own, and the future cash flow derived from such assets to pay distributions to our stockholders.

Despite this policy, our Board of Directors may distribute to our stockholders all or a portion of the proceeds from the sale, financing, refinancing, or other disposition of a property. In determining whether any of such proceeds should be distributed to our stockholders, our Board of Directors considers, among other factors, the desirability of properties available for purchase, real estate market conditions, and compliance with the REIT distribution requirements.

In connection with a sale of a property, our preference will be to obtain an all-cash sale price. However, we may accept a purchase money obligation secured by a mortgage on the property as partial payment. The terms of payment upon sale will be affected by the salient economic and market conditions. To the extent we receive notes, securities, or other property instead of cash from sales, such proceeds, other than any interest payable on such proceeds, will not be included in net sale proceeds available for distribution until and to the extent the notes or other property are actually paid, sold, refinanced, or otherwise disposed of. Thus, the distribution of the proceeds of a sale to stockholders may need to be paid from other sources.

Disruptions in the financial markets could affect our ability to obtain financing and may negatively impact our liquidity, financial condition and operating results. From time to time, the capital and credit markets in the United States and other countries experience significant price volatility, dislocations and liquidity disruptions, which can cause the market prices of many securities and the spreads on prospective debt financings to fluctuate substantially. These circumstances can materially impact liquidity in the financial markets, making terms for certain financings less attractive, and in some cases, result in the unavailability of financing. A significant amount of our existing indebtedness was issued through capital markets transactions. We anticipate that the capital markets could be a source of refinancing of our existing indebtedness in the future. This source of refinancing may not be available if volatility in or disruption of the capital

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document markets occurs. If our ability to issue additional debt or equity securities or to borrow money were to be impaired by volatility in or disruption of the capital markets, it could have a material adverse effect on our liquidity and financial condition.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Many real estate costs are fixed, even if income from properties decreases. Our financial results depend on leasing space to tenants on terms favorable to us. Our income and funds available for distribution to our stockholders will decrease if a significant number of our tenants cannot pay their rent or we are unable to lease properties on favorable terms. In addition, if a tenant does not pay its rent, we may not be able to enforce our rights as landlord without delays and we may incur substantial legal costs. Costs associated with real property, such as real estate taxes and maintenance costs, generally are not reduced when circumstances cause a reduction in income from the property.

We may be unable to acquire properties on advantageous terms or acquisitions may not perform as we expect. The acquisition of properties entails various risks, including risks that our investments may not perform as expected and that our cost estimates for bringing an acquired property up to market standards may prove inaccurate. Further, we face significant competition for attractive investment opportunities from other well-capitalized real estate investors, including publicly-traded REITs and private investors. This competition increases as investments in real estate become attractive relative to other forms of investment. As a result of competition, we may be unable to acquire additional properties and purchase prices may increase. Any of the above risks could adversely affect our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and the value of our securities.

We may be unable to complete development and re-development projects on advantageous terms. As part of our business, we develop new properties and re-develop existing properties as conditions warrant. This part of our business involves significant risks, including the following: • we may not be able to obtain financing for these projects on favorable terms; • we may not complete construction on schedule or within budget; • we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations; • contractor and subcontractor disputes, strikes, labor disputes or supply chain disruptions may occur; and • properties may perform below anticipated levels, producing cash flow below budgeted amounts, which may result in us paying too much for a property, cause the property to not be profitable and limit our ability to sell such properties to third parties.

To the extent these risks result in increased debt service expense, construction costs and delays in budgeted leasing, they could adversely affect our financial condition, results of operations, cash flow and ability to make distributions to our stockholders.

Debt financing, the degree of leverage and rising interest rates could reduce our cash flow. We use debt to allow us to make more investments than we otherwise could. Our use of leverage presents an additional element of risk in the event that the cash flow from our properties is insufficient to meet both debt payment obligations and the distribution requirements of the REIT provisions of the Code. In addition, rising interest rates would reduce our cash flow by increasing the amount of interest due on our floating rate debt and on our fixed rate debt as it matures and is refinanced.

Our performance and our ability to make distributions to our stockholders and the value of our securities are subject to general economic conditions and risks associated with our real estate assets. The investment returns available from equity investments in real estate depend on the amount of income earned and capital appreciation generated by the properties, as well as the expenses incurred in connection with the properties. If our properties do not generate income sufficient to meet operating expenses, including debt service and capital expenditures, then our ability to pay distributions to our stockholders could be adversely affected. In addition, there are significant expenditures associated with an investment in real estate (such as mortgage payments, real estate taxes and maintenance costs) that generally do not decline when circumstances reduce the income from the property. Income from and the value of our properties may be adversely affected by: • changes in general or local economic climate; • the attractiveness of our properties to potential tenants;

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document • changes in supply of or demand for similar or competing properties in an area; • bankruptcies, financial difficulties or lease defaults by our tenants; • changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive or otherwise reduce returns to stockholders; • changes in operating costs and expenses and our ability to control rents; • changes in or increased costs of compliance with governmental rules, regulations and fiscal policies, including changes in tax, real estate, environmental and zoning laws, and our potential liability thereunder; • our ability to provide adequate maintenance and insurance; • changes in the cost or availability of insurance, including coverage for mold or asbestos; • unanticipated changes in costs associated with known adverse environmental conditions or retained liabilities for such conditions; • periods of high interest rates and tight money supply; • tenant turnover; • general overbuilding or excess supply in the market; and • disruptions in the global supply chain caused by political, regulatory or other factors including terrorism.

In addition, periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or public perception that any of these events may occur, could result in a general decrease in rents or an increased occurrence of defaults under existing leases, which would adversely affect our financial condition and results of operations. For these and other reasons, we cannot assure you that we will be profitable or that we will realize growth in the value of our real estate properties.

We may become subject to litigation, which could have a material and adverse effect on our financial condition, results of operations and cash flow. We may become subject to litigation, including claims relating to our operations, offerings, and otherwise in the ordinary course of business. Some of these claims may result in significant defense costs and potentially significant judgments against us, some of which are not, or cannot be, insured against. Resolution of these types of matters could adversely impact our financial condition, results of operations and cash flow. Certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flows, expose us to increased risks that would be uninsured, and/or adversely impact our ability to attract officers and directors.

Terrorist attacks and other acts of violence or war may affect the value of the Company's common stock, the industry in which we conduct our operations and our profitability. Terrorist attacks may harm our results of operations and financial condition. We cannot assure you that there will not be terrorist attacks in the localities in which we conduct business. More generally, any of these events could cause consumer confidence and spending to decrease or result in increased volatility in the worldwide financial markets and economy. These attacks or armed conflicts may adversely impact our operations or financial condition. In addition, losses resulting from these types of events may be uninsurable.

We face risks relating to cybersecurity attacks that could cause loss of confidential information and other business disruptions. We rely extensively on computer systems to manage our business, and our business is at risk from and may be impacted by cybersecurity attacks. These could include attempts to gain unauthorized access to our data and computer systems. Attacks can be prepared and conducted by individuals as well as by sophisticated groups/organizations. We employ a number of measures to prevent, detect and mitigate these threats, which include password protection, frequent password change events, firewall detection systems, frequent backups, a redundant data system for core applications and annual penetration testing; however, there is no guarantee such efforts will be successful in preventing a cybersecurity attack. A cybersecurity attack could compromise the confidential information of our employees, tenants and vendors. A successful attack could have a material adverse effect on our business, financial condition and results of operations.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Political and economic uncertainty could have an adverse effect on our business.

We cannot predict how current political and economic uncertainty, including uncertainty related to taxation, will affect our critical tenants, joint venture partners, lenders, financial institutions and general economic conditions, including the health and confidence of the consumer and the volatility of the stock market.

Political and economic uncertainty poses a risk to us in that it may cause consumers to postpone discretionary spending in response to tighter credit, reduced consumer confidence and other macroeconomic factors affecting consumer spending behavior, resulting in a downturn in the business of our tenants. In the event current political and economic uncertainty results in financial turmoil affecting the banking system and financial markets generally or significant financial service institution failures, there could be a new or incremental tightening in the credit markets, low liquidity, and extreme volatility in fixed income, credit, currency and equity markets. Each of these could have an adverse effect on our business, financial condition and operating results.

Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of our properties. We compete with other owners, operators and developers of real estate, some of which own properties similar to ours in the same markets and submarkets in which our properties are located. If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose potential tenants, and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our tenants’ leases expire. As a result, our financial condition, cash flows, cash available for distribution, value of our securities and ability to satisfy our debt service obligations could be materially adversely affected.

A property that incurs a vacancy could be difficult to sell or re‑lease, which could adversely affect our results of operations, cash flows, cash available for distribution, and the value of our securities. A property may incur a vacancy either by the continued default of a tenant under its lease or the expiration of one of our leases. In addition, certain of the properties we acquire may have some level of vacancy at the time of closing. Certain of our properties may be specifically suited to the particular needs of a tenant. We may have difficulty obtaining a new tenant for any vacant space we have in our properties. If the vacancy continues for a long period of time, we may suffer reduced revenue resulting in less cash available to be distributed to stockholders. In addition, the resale value of a property could be diminished because the market value of a particular property will depend principally upon the value of the leases of such property.

We may not have funding for future tenant improvements, which could adversely affect our results of operations, cash flows, cash available for distribution, and the value of our securities. When a tenant at one of our properties does not renew its lease or otherwise vacates its space in one of our buildings, it is likely that, in order to attract one or more new tenants, we will be required to expend funds to construct new tenant improvements in the vacated space. Except with respect to our current reserves for capital expenditures, tenant improvements and leasing commissions, we cannot assure you that we will have adequate sources of funding available to us for such purposes in the future.

Bankruptcy laws will limit our remedies if a tenant becomes bankrupt and rejects its lease, resulting in an inability to collect balances due on our leases. If a tenant becomes bankrupt or insolvent, that could diminish the income we receive from that tenant’s leases. Our tenants may experience downturns in their operating results due to adverse changes to their business or economic conditions, and those tenants that are highly leveraged may have a higher possibility of filing for bankruptcy or insolvency. We may not be able to evict a tenant solely because of its bankruptcy. On the other hand, a bankruptcy court might authorize the tenant to terminate its leases with us. If that happens, our claim against the bankrupt tenant for unpaid future rent would be an unsecured prepetition claim subject to statutory limitations, and therefore such amounts received in bankruptcy are likely to be substantially less than the remaining rent we otherwise were owed under the leases. In addition, any claim we have for unpaid past rent could be substantially less than the amount owed. If the lease for such a property is rejected in bankruptcy, our revenue would be reduced and could adversely impact our ability to pay distributions to stockholders.

Environmentally hazardous conditions may adversely affect our operating results. Under various federal, state and local environmental laws, a current or previous owner or operator of real property may be liable for the cost of removing or remediating hazardous or toxic substances on such property. Such laws often impose liability whether

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document responsible for all of the clean‑up costs incurred. In addition, third parties may sue the owner or operator of a site for damages based on personal injury, natural resources or property damage or other costs, including investigation and clean‑up costs, resulting from the environmental contamination. The presence of hazardous or toxic substances on one of our properties, or the failure to properly remediate a contaminated property, could give rise to a lien in favor of the government for costs it may incur to address the contamination, or otherwise adversely affect our ability to sell or lease the property or borrow using the property as collateral. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated. A property owner who violates environmental laws may be subject to sanctions which may be enforced by governmental agencies or, in certain circumstances, private parties. In connection with the acquisition and ownership of our properties, we may be exposed to such costs. The cost of defending against environmental claims, of compliance with environmental regulatory requirements or of remediating any contaminated property could materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution to our stockholders.

Our costs associated with complying with the Americans with Disabilities Act may affect cash available for distribution. Our properties will be subject to the Americans with Disabilities Act of 1990 (“ADA”). Under the ADA, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The ADA has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. The ADA’s requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties, or, in some cases, an award of damages. We will attempt to acquire properties that comply with the ADA or place the burden on the seller or other third party to ensure compliance with the ADA. However, we cannot assure stockholders that we will be able to acquire properties or allocate responsibilities in this manner. If we cannot, our funds used for ADA compliance may affect cash available for distribution and the amount of distributions to stockholders.

We may be unable to sell a property if or when we decide to do so, including as a result of uncertain market conditions, which could adversely affect the return on your investment. We expect to hold the various real properties in which we invest until such time as we decide that a sale or other disposition is appropriate given our investment objectives. Our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of our properties. We cannot predict the various market conditions affecting real estate investments which will exist at any particular time in the future. Due to the uncertainty of market conditions which may affect the future disposition of our properties, we cannot assure you that we will be able to sell our properties at a profit in the future. Accordingly, the extent to which you will receive cash distributions and realize potential appreciation on our real estate investments will be dependent upon fluctuating market conditions. Furthermore, we may be required to expend funds to correct defects or to make improvements before a property can be sold. We cannot assure you that we will have funds available to correct such defects or to make such improvements.

Our officers and directors may have other interests which may conflict with their duties to us and our stockholders, and which may have adverse effects on the interests of us and our stockholders. Our officers and directors may have other interests which could conflict with their duties to us and our stockholders, and which may have adverse effects on the interests of us and our stockholders. For example, certain of such persons may have interests in other real estate related ventures and may have to determine how to allocate an opportunity between us and such other ventures. Also, such persons may have to decide whether we should purchase or dispose of real property from or to an entity with which they are related, or conduct other transactions, and if so, the terms thereof. Our officers and directors are expected to disclose, in a timely and fair manner, such instances, and we require that potential conflicts be brought to the attention of our Board of Directors and that determinations will be made by a majority of directors who have no interest in the transaction. As of this time, only two officers and directors conduct a real property business apart from their activities with us. These individuals are Paul Cooper, our Chairman, Chief Executive Officer, and Director, and Louis Sheinker, our President, Chief Operating Officer, Secretary, and Director.

We are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002 and furnish a report on our internal control over financial reporting. We are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002 which requires us to assess and attest to the effectiveness of our internal control over financial reporting. Since we are defined as a smaller reporting company pursuant to Rule 12b-2 of the Exchange Act, our independent registered public accounting firm is not required to opine as to the adequacy of our assessment and effectiveness of our internal control over financial reporting. If any deficiencies or material weaknesses exist as a

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document result of our assessment of our internal controls over financial reporting, our financial statements may be materially adversely affected.

Risks Related to our Common Stock The absence of a public market for our common stock will make it difficult for a stockholder to sell shares, which may have to be held for an indefinite period. Current and prospective stockholders should understand that our common stock is illiquid, as there is currently no public market, and they must be prepared to hold their shares of common stock for an indefinite length of time. We have no current plans to cause our common stock to be listed on any securities exchange or quoted on any market system or in any established market either immediately or at any definite time in the future. While our Board of Directors may attempt to cause our common stock to be listed or quoted in the future, there can be no assurance that this event will occur. Accordingly, stockholders will find it difficult to resell their shares of common stock. Thus, our common stock should be considered a long-term investment. In addition, there are restrictions on the transfer of our common stock. In order to qualify as a REIT, our shares must be beneficially owned by 100 or more persons at all times and no more than 50% of the value of our issued and outstanding shares may be owned directly or indirectly by five or fewer individuals and certain entities at all times. Our charter provides that no person may own more than 9.9% of the issued and outstanding shares of our common stock. Any attempted ownership of our shares that would result in a violation of one or more of these limits will result in such shares being transferred to an “excess share trust” so that such shares will be disposed of in a manner consistent with the REIT ownership requirements. In addition, any attempted transfer of our shares that would cause us to be beneficially owned by less than 100 persons will be disallowed.

Our stockholders’ interests may be diluted by issuances under our 2007 Incentive Award Plan and 2017 Incentive Award Plan and other common stock or preferred stock issuances, which could result in lower returns to our stockholders. We had a 2007 Incentive Award Plan that provided for awards in the form of restricted shares, incentive stock options, non- qualified stock options and stock appreciation rights. The aggregate number of shares of common stock which may have been awarded under the 2007 Incentive Award Plan was 1,000,000 shares. The 2007 Incentive Award Plan expired by its terms on June 11, 2017, and there are non-vested shares and unexercised options outstanding that were granted under the 2007 Incentive Award Plan. We have adopted the 2017 Incentive Award Plan, under which 2,000,000 shares of common stock are reserved for issuance, and under which we may grant stock, stock units, incentive stock options, non-qualified stock options, and stock appreciation rights to our officers, employees, consultants, and directors. The effect of these grants, including the subsequent exercise of stock options, could be to dilute the value of the stockholders’ investments. In addition, our Board of Directors is authorized, without stockholder approval, to cause us to issue additional shares of our common stock, or shares of preferred stock on which it can set the terms, and to raise capital through the issuance of options, warrants and other rights, on terms and for consideration as the Board of Directors in its sole discretion may determine, subject to certain restrictions in our charter. Any such issuance could result in dilution to stockholders. The Board of Directors may, in its sole discretion, authorize us to issue common stock or other interests or our securities to persons from whom we purchase real property or other assets, as part or all of the purchase price. The Board of Directors, in its sole discretion, may determine the value of any common stock or other equity or debt securities issued in consideration of property or services provided, or to be provided, to us.

Real estate investments are not as liquid as other types of assets, which may reduce the economic returns we are able to provide to our stockholders. Real estate investments are not as liquid as other types of investments, and this lack of liquidity may limit our ability to react promptly to changes in economic, financial, investment or other conditions. In addition, significant expenditures associated with real estate investments, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investments. In addition, we intend to comply with the safe harbor rules relating to the number of properties that can be disposed of in a year, the tax basis and the costs of improvements made to these properties, and meet other tests which enable a REIT to avoid punitive taxation on the sale of assets. Thus, our ability at any time to sell assets may be restricted. This lack of liquidity may limit our ability to vary our portfolio promptly in response to changes in economic, financial, investment or other conditions and, as a result, could adversely affect our financial condition, results of operations, cash flows and our ability to pay distributions on our common stock.

Our stockholders are limited in their ability to sell shares of common stock pursuant to our share redemption program. Stockholders may not be able to sell any shares of our common stock back to us, and if they do sell their shares, they may not receive the price they paid.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Our share redemption program, which commenced its first semi-annual redemption period on June 1, 2017, may provide our stockholders with a limited opportunity to have their shares of our common stock redeemed by us at a discount to the net asset value (“NAV”) per share. Our share redemption program contains certain restrictions and limitations, including those relating to the dollar amount of shares of our common stock that we can redeem at any given time. Specifically, we presently intend to limit the number of shares to be redeemed to no more than $1.0 million of shares in any calendar year and such repurchase is subject to funds being available. In addition, our Board of Directors reserves the right to amend, suspend or terminate the share redemption program at any time upon 30 days’ notice to our stockholders. Therefore, our stockholders may not have the opportunity to make a redemption request prior to a potential termination of the share redemption program and our stockholders may not be able to sell any of their shares of our common stock back to us pursuant to our share redemption program. Moreover, if our stockholders do sell their shares of common stock back to us pursuant to the share redemption program, they may not receive the same price they paid for any shares of our common stock being redeemed. On May 10, 2017, our Board of Directors approved an estimated per share NAV of our common stock of $13.94 based on the estimated value of our assets less the estimated value of our liabilities divided by the number of shares outstanding (on an as adjusted fully diluted basis), calculated as of December 31, 2016. On December 5, 2017, we redeemed 79,681 shares of our common stock pursuant to our share redemption program, at a redemption price of $12.55 per share (90% of the NAV per share), for aggregate consideration of $999,996.55. The Company received redemption requests during the most recent semi-annual period (June 1, 2017 to November 30, 2017) exceeding the share redemption program’s $1 million per year limit. As a result, we were unable to purchase all shares presented for redemption. We honored the requests we received on a pro rata basis in accordance with the policy on priority of redemptions set forth in the share redemption program, subject to giving certain priorities in accordance with the share redemption program. The Company will treat any unsatisfied portions of redemption requests as requests for redemption in the next semi-annual period. The next redemption period will be December 1, 2017 to May 31, 2018. On March 22, 2018, the Company received its annual valuation as of December 31, 2017. Our Board of Directors approved an estimated per share NAV of our common stock of $14.36 based on the estimated value of our assets less the estimated value of our liabilities divided by the number of shares outstanding (on an as adjusted fully diluted basis), calculated as of December 31, 2017. The annual valuation resulted in an adjustment to the redemption price under the share redemption program from $12.55 to $12.92 per share (90% of the NAV per share). The Company has filed a Current Report on Form 8-K with the SEC on March 27, 2018, and mailed to its stockholders an announcement of the redemption price adjustment. The redemption price of $12.92 per share will be effective with respect to share redemption requests submitted from December 1, 2017 until such time as the Board determines a new estimated per share NAV. Our stockholders are permitted to withdraw any redemption requests upon written notice to us at any time prior to ten (10) days before the end of the applicable semi-annual period. Because of the restrictions of our share redemption program, our stockholders may not be able to sell their shares under the program, and if stockholders are able to sell their shares, they may not recover the amount of their investment in us.

The actual value of shares that we repurchase under our share redemption program may be substantially less than what we pay. The terms of our share redemption program generally require us to repurchase shares at a price equal to 90% of our most recently disclosed estimated NAV per share. The estimated NAV per share of our common stock is calculated as of a specific date and is expected to fluctuate over time in response to future events. However, we anticipate only determining an estimated NAV per share annually. In the event that the value of our shares decreases due to market or other conditions, the price at which we repurchase our shares pursuant to our share redemption program might reflect a premium to our NAV. If the actual NAV of our shares is less than the price paid for the shares to be repurchased, any repurchases made would be immediately dilutive to our remaining stockholders.

In determining NAV per share, we relied upon a valuation of our properties as of December 31, 2017. Valuations and appraisals of our properties are estimates of fair value and may not necessarily correspond to realizable value upon the sale of such properties, therefore our new NAV per share may not reflect the amount that would be realized upon a sale of each of our properties. For the purposes of calculating our NAV per share, an independent third-party appraiser valued our properties as of December 31, 2017. The valuation methodologies used to value our properties involved certain subjective judgments. Ultimate realization of the value of an asset depends to a great extent on economic and other conditions beyond our control and the control of the independent appraiser. Further, valuations do not necessarily represent the price at which an asset would sell, since market prices of assets can only be determined by negotiation between a willing buyer and seller. Therefore, the valuations of our properties and other assets may not correspond to the timely realizable value upon a sale of those assets.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Our NAV per share is somewhat based upon subjective judgments, assumptions and opinions, which may or may not turn out to be correct. Therefore, our NAV per share may not reflect the precise amount that might be paid to stockholders for their shares in a transaction. Our NAV per share was based on an estimate of the value of our properties – consisting principally of illiquid commercial real estate – as of December 31, 2017. The valuation methodologies used by the independent appraiser retained by our Board of Directors to estimate the value of our properties as of December 31, 2017 involved subjective judgments, assumptions and opinions, which may or may not turn out to be correct. As a result, our NAV per share may not reflect the precise amount that might be paid to stockholders for their shares in a transaction.

Tax Risks Related to our Business and Structure The requirement to distribute at least 90% of our taxable REIT income may require us to incur debt, sell assets, or issue additional securities for cash, which would increase the risks associated with your investment. In order to qualify as a REIT, we must distribute annually to our stockholders at least 90% of our taxable REIT income, other than any capital gains. To the extent that we distribute at least 90% but less than 100% of our taxable income in a calendar year, we will incur no federal corporate income tax on our distributed net income, but will incur a federal corporate income tax on any undistributed amounts. In addition, we will incur a 4% nondeductible excise tax if the actual amount we distribute to our stockholders in a calendar year is less than a minimum amount required. We intend to distribute at least 90% of our taxable income to our stockholders each year so that we will satisfy the distribution requirement and avoid the 4% excise tax. However, we could be required to include earnings in our taxable income before we actually receive the related cash. In the event that we do not distribute 100% of our taxable income, we will be subject to taxation at the REIT level on the amount of undistributed taxable income and to the extent we distribute such amount, you will be subject to taxation on it at the stockholder level.

We cannot assure you that we will make distributions. Our policy is to make such distributions on a quarterly basis. We will seek to minimize, to the extent possible, the fluctuations in distributions that might result if distribution payments were based solely on actual cash received during the distribution period. To implement this policy, we may use cash received during prior periods or cash received subsequent to the distribution period and prior to the payment date for such distribution payment, to pay annualized distributions consistent with the distribution level established from time to time by our Board of Directors. Our ability to maintain this policy will depend upon, among other things, the availability of cash and applicable requirements for qualification as a REIT under the Code. Therefore, we cannot guarantee that there will be cash available to pay distributions or that distributions will not fluctuate. If cash available for distribution is insufficient to pay distributions to our stockholders, we may distribute payment in the form of shares of our common stock or obtain the necessary funds by borrowing, issuing new securities, or selling assets. These methods of obtaining funds could affect future distributions by increasing operating costs.

To the extent that distributions to our stockholders are made out of our current or accumulated earnings and profits, such distributions would be taxable as ordinary income. To the extent that our distributions exceed our current and accumulated earnings and profits, such amounts will constitute a return of capital to our stockholders for federal income tax purposes, to the extent of their basis in their stock, and any amount in excess of their stock basis would constitute capital gains.

If we fail to remain qualified as a REIT for federal income tax purposes, we will not be able to deduct our distributions, and our income will be subject to taxation, which would reduce the cash available for distribution to our stockholders. The requirements for qualification as a REIT are complex and interpretations of the federal income tax laws governing REITs are limited. Our continued qualification as a REIT will depend on our ability to meet various requirements concerning, among other things, the ownership of our outstanding shares of beneficial interest, the nature of our assets, the sources of our income and the amount of our distributions to our stockholders. If we fail to meet these requirements and do not qualify for certain statutory relief provisions, our distributions to our stockholders will not be deductible by us and we will be subject to a corporate level tax, including any applicable alternative minimum tax (which, for corporations, was repealed for tax years beginning after December 31, 2017 under the Tax Cuts and Jobs Act), on our taxable income at regular corporate rates, substantially reducing our cash available to make distributions to our stockholders. In addition, if we failed to maintain our qualification as a REIT, we would no longer be required to make distributions for federal income tax purposes. Incurring corporate income tax liability might cause us to borrow funds, liquidate some of our investments or take other steps that could negatively affect our operating results. Moreover, if our REIT status is terminated because of our failure to meet a REIT qualification requirement or if we voluntarily revoke our election, unless relief provisions applicable to certain REIT qualification failures apply, we would be disqualified from electing treatment as a REIT for the four taxable years following the year in which REIT

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document status is lost. We may not qualify for relief provisions for REIT qualification failures and even if we can qualify for such relief, we may be required to make penalty payments, which could be significant in amount.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The recently enacted Tax Cuts and Jobs Act (the “Act”) is a complex revision to the U.S. federal income tax laws with impacts on different categories of taxpayers and industries, and will require subsequent rulemaking and interpretation in a number of areas. The long-term impact of the Act on the overall economy, government revenues, our tenants, our company, and the real estate industry cannot be reliably predicted at this time. Furthermore, the Act may impact certain of our tenants’ operating results, financial condition, and future business plans. There can be no assurance that the Act will not impact our operating results, financial condition, and future business operations. The Act signed into law by the President on December 22, 2017, makes significant changes to the Code, including changes that impact REITs and their shareholders, among others. In particular, the Act reduces the maximum corporate tax rate from 35% to 21%. In addition, for tax years beginning before January 1, 2026, the Act permits up to a 20% deduction for individuals, trusts, and estates with respect to their receipt of “qualified REIT dividends”, which are dividends from a REIT that are not capital gain dividends and are not qualified dividend income. These changes generally result in an effective maximum U.S. federal income tax rate on such dividends of 29.6%, if the deduction is allowed in full. However, by reducing the corporate tax rate, it is possible that the Act will nevertheless reduce the relative attractiveness to investors (as compared with potential alternative investments) of the generally single level of taxation on REIT distributions. Although certain changes to the Code are generally advantageous to REITs and their shareholders, the full ramifications of the Act remain unclear and will likely remain unclear for an indeterminate period of time. Key provisions of the Act that could impact us and the value of our shares include the following: • temporarily reducing individual U.S. federal income tax rates on ordinary income; the highest individual U.S. federal income tax rate is reduced from 39.6% to 37% (through tax years beginning before January 1, 2026), while eliminating miscellaneous itemized deductions and limiting state and local tax deductions; • reducing the maximum corporate income tax rate from 35% to 21%, which reduces, but does not eliminate, the competitive advantage that REITs enjoy relative to non-REIT corporations; • permitting (subject to certain limitations) a deduction for certain pass-through business income, including, as noted above, dividends received by our stockholders that are not designated by us as capital gain dividends or qualified dividend income, which will allow individuals, trusts, and estates to deduct up to 20% of such amounts, generally resulting in an effective maximum U.S. federal income tax rate of 29.6% on such dividends, if the deduction is allowed in full (through tax years beginning before January 1, 2026); • reducing the highest rate of withholding with respect to our distributions to non-U.S. stockholders that are treated as attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%; • limiting our deduction for net operating losses to 80% of taxable income (prior to the application of the dividends paid deduction), where taxable income is determined without regarding to the net operating loss deduction itself, and generally eliminating net operating loss carrybacks and allowing unused net operating losses to be carried forward indefinitely; • amending the limitation on the deduction of net interest expense for all businesses, other than certain electing real estate businesses (which could adversely affect any of our taxable REIT subsidiaries (each, a “TRS”), including any new TRS that we may form); • expanding the ability of businesses to deduct the cost of certain purchases of property in the year in which such property is purchased; and • eliminating the corporate alternative minimum tax.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends. Income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts and estates are generally subject to tax at preferential rates. Dividends payable by REITs, however, generally are not eligible for the preferential tax rates applicable to qualified dividend income. Although these rules do not adversely affect the taxation of REITs or dividends payable by REITs, to the extent that the preferential rates continue to apply to regular corporate qualified dividends, investors who are individuals, trusts and estates may perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could materially and adversely affect the value of the shares of REITs, including the value of our common stock. The Act provides a deduction to non-corporate taxpayers (e.g., individuals, trusts and estates) of 20% on dividends paid by a REIT that are not classified as capital gains. This provides closer parity between the treatment under the new law of ordinary REIT dividends and qualified dividends. The new law also provides for a maximum individual marginal tax rate on ordinary income, without regard to the effect of this deduction, of 37%. For non-corporate taxpayers, this would reduce the maximum marginal tax rate on ordinary REIT dividends to 33.4% (including the 3.8% Medicare tax that is applied before the 20% deduction.). The new tax law’s 20% deduction

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document on dividends paid by a REIT to non-corporate taxpayers and the reduced individual tax rates are scheduled to sunset for tax years beginning after 2025, absent further legislation.

We may be subject to adverse legislative or regulatory tax changes affecting REITs that could have a negative effect on us. The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. Changes to the tax laws, with or without retroactive application, could adversely affect our stockholders or us. We cannot predict how changes in the tax laws might affect our stockholders or us. New legislation, Treasury Regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the federal income tax consequences of such qualification.

Acquisition Risks Our inability to identify or find funding for acquisitions could prevent us from diversification or growth and could adversely impact the value of an investment in us. We may not be able to identify or obtain financing to acquire additional real properties. We are required to distribute at least 90% of our taxable income, excluding net capital gains, to our stockholders each year, and thus our ability to retain internally generated cash is very limited. Accordingly, our ability to acquire properties or to make capital improvements or renovate properties will depend on our available cash flow and our ability to obtain financing from third parties or the sellers of properties.

Investing in properties through joint ventures creates a risk of loss to us as a result of the possible inaction or misconduct of a joint venture partner. We may decide to acquire certain properties using a joint venture structure. Joint venture investments may involve risks not present in a direct acquisition, including, for example: • the risk that our co-venturer or partner in an investment might become unable to provide the required capital; • the risk that such co-venturer or partner may at any time have economic or business interests or goals which are inconsistent with our business interests or goals; • the risk that such co-venturer or partner may be in a position to take or request action contrary to our objectives, such as selling a property at a time which we believe to be suboptimal; or • the risk that we may not have sufficient financial resources to exercise any right of first refusal to purchase our co-venturer or partner’s interest.

Actions by such a co-venturer or partner might have the result of subjecting the applicable property to liabilities in excess of those otherwise contemplated and may have the effect of reducing our cash available for distribution. It also may be difficult for us to sell our interest in any such joint venture or partnership in such property.

Risks Related to Our Use of Borrowed Funds We have incurred and plan to incur mortgage and other indebtedness, which could result in material risk to our business if there is a default, including the loss of the real property. Borrowings by us may increase the risks of owning shares of our company. If there is a shortfall between the cash flow generated by our properties and the cash flow needed to service our indebtedness, then the amount available for distributions to our stockholders will be reduced. In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In that case, we could lose the property securing the loan that is in default, thus reducing the value of your investment. If any mortgages or other indebtedness contain cross-collateralization or cross-default provisions, a default on a single loan could affect multiple properties.

Additionally, when providing financing, a lender may impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt. Loan documents we enter into may also contain covenants that limit our ability to further leverage a property. Our credit facility with Key Bank contains various affirmative and negative covenants, including, among others, with respect to liquidity, minimum occupancy, total indebtedness and minimum net worth. These or other limitations may limit our flexibility and our ability to achieve our operating plans. Our failure to meet such restrictions and covenants may result in an event of default under our line of credit and result in the foreclosure of some or all of our properties.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document As we incur indebtedness which may be needed for operations, we increase expenses which could result in a decrease in cash available for distribution to our stockholders. Debt service payments decreases cash available for distribution. In the event the fair market value of our properties was to increase, we could incur more debt without a commensurate increase in cash flow to service the debt.

Prolonged disruptions in the financial markets could affect our ability to obtain financing on reasonable terms and have other adverse effects on us and the value of our common stock. Global stock and credit markets experience price volatility, dislocations, and liquidity disruptions, which cause market prices of many stocks to fluctuate, availability of debt to be curtailed and the spreads on prospective debt financings to widen considerably. These circumstances materially impact liquidity in the financial markets, making terms for certain financings less attractive, and, in certain cases, result in the unavailability of certain types of financing. Our profitability will be adversely affected if we are unable to obtain cost-effective financing for our investments. A prolonged downturn in the stock or credit markets may cause us to seek alternative sources of potentially less attractive financing, and may require us to adjust our business plan accordingly. These events in the stock and credit markets may also make it more difficult for us to raise capital.

We have incurred and will incur indebtedness secured by our properties, which may subject our properties to foreclosure in the event of a default. Incurring mortgage indebtedness increases the risk of possible loss. Most of our borrowings to acquire properties would be secured by mortgages on our properties. In February 2015, we refinanced a substantial portion of our real estate portfolio in the amount of approximately $233.1 million. If we default on our secured indebtedness, the lender may foreclose and we could lose our entire investment in the properties securing such loan, which would adversely affect distributions to stockholders. For federal tax purposes, any such foreclosure would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage and, if the outstanding balance of the debt secured by the mortgage exceeds the basis of the property to our company, there could be taxable income upon a foreclosure. To the extent lenders require our company to cross-collateralize our properties, or our loan agreements contain cross-default provisions, a default under a single loan agreement could subject multiple properties to foreclosure. In addition, the foreclosure of certain of our properties may trigger additional liabilities for us, such as payments which may be required pursuant to the Tax Protection Agreement.

Possible Adverse Consequences of Limits on Ownership and Transfer of our Shares The limitation on ownership of our stock in our charter will prevent you from acquiring more than 9.9% of our common stock and may force you to sell common stock back to us. Our charter limits the beneficial and constructive ownership of our capital stock by any single stockholder to 9.9% of the number of outstanding shares of each class or series of our stock including our common stock. We refer to these limitations as the ownership limits. Our charter also prohibits the beneficial or constructive ownership of our capital stock by any stockholder that would result in (1) our capital stock being beneficially owned by fewer than 100 persons, (2) five or fewer individuals, including natural persons, private foundations, specified employee benefit plans and trusts, and charitable trusts, owning more than 50% of our capital stock, applying broad attribution rules imposed by the federal tax laws, (3) our company otherwise failing to qualify as a REIT for federal tax purposes. In addition, any attempted transfer of our capital stock that would result in the Company being beneficially owned by less than 100 persons will be disallowed.

Anti-takeover Provisions Related to Us Limitations on share ownership and transfer may deter a sale of our company in which you could profit. The limits on ownership and transfer of our equity securities in our charter may have the effect of delaying, deferring, or preventing a transaction or a change in control of our company that might involve a premium price for your common stock. The ownership limits and restrictions on transferability will continue to apply until our Board of Directors determines that it is no longer in our best interest to continue to qualify as a REIT.

Our ability to issue preferred stock with terms fixed by the Board of Directors may include a preference in distributions superior to our common stock and also may deter or prevent a sale of our company in which a stockholder could otherwise profit.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Our ability to issue preferred stock and other securities without your approval also could deter or prevent someone from acquiring our company. Our Board of Directors may establish the preferences and rights, including a preference in distributions

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document superior to our common stockholders, of any issued preferred stock designed to prevent, or with the effect of preventing, someone from acquiring control of our company.

Maryland anti-takeover statute restrictions may deter others from seeking to acquire our company in a transaction in which a stockholder could profit. Maryland law contains many provisions, such as the business combination statute and the control share acquisition statute, that are designed to prevent, or have the effect of preventing, someone from acquiring control of our company without approval of our Board of Directors. Our bylaws exempt our company from the control share acquisition statute (which eliminates voting rights for certain levels of shares that could exercise control over us) and our Board of Directors has adopted a resolution opting out of the business combination statute (which prohibits a merger or consolidation of us and a 10% stockholder for a period of time) with respect to affiliates of our company. However, if the bylaw provisions exempting our company from the control share acquisition statute or the board resolution opting out of the business combination statute were repealed by the Board of Directors, in its sole discretion, these provisions of Maryland Law could delay or prevent offers to acquire our company and increase the difficulty of consummating any such offers.

Because of our staggered Board of Directors, opposition candidates would have to be elected in two separate years to constitute a majority of the Board of Directors, which may deter a change of control from which a stockholder could profit. We presently have seven members of our Board of Directors. Each director has or will have a three-year term. Accordingly, in order to change a majority of our Board of Directors, a third party would have to wage a successful proxy contest in two successive years, which is a situation that may deter proxy contests.

Certain provisions of our charter make stockholder action more difficult, which could deter changes beneficial to our stockholders. We have certain provisions in our charter and bylaws that require super-majority voting and regulate the opportunity to nominate directors and to bring proposals to a vote by the stockholders.

ITEM 1B. UNRESOLVED STAFF COMMENTS None.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ITEM 2. PROPERTIES The Company’s 49 properties as of December 31, 2017 are as follows:

Property Type Square Feet Land Acreage New York 103 Fairview Park Drive, Elmsford, NY Industrial 112,447 5.6 412 Fairview Park Drive, Elmsford, NY (1) Industrial 439,956 10.1 401 Fieldcrest Drive, Elmsford, NY (1) Industrial 313,632 7.2 404 Fieldcrest Drive, Elmsford, NY Industrial 78,674 8.7 199 Ridgewood Drive, Elmsford, NY Industrial 28,050 5.4 203 Ridgewood Drive, Elmsford, NY Industrial 32,000 7.0 36 Midland Avenue, Port Chester, NY Industrial 78,287 3.6 100-110 Midland Avenue, Port Chester, NY Industrial 180,975 7.5 112 Midland Avenue, Port Chester, NY Retail 3,200 1.1 8 Slater Street, Port Chester, NY Industrial 68,259 2.3 165-25 147th Avenue, Jamaica, NY Industrial 151,068 6.6 114-15 Guy Brewer Boulevard, Jamaica, NY Industrial 75,800 4.6 49-19 Rockaway Beach Boulevard, Far Rockaway, NY Industrial 28,790 3.0 23-85 87th Street, East Elmhurst, NY (1) Industrial 363,500 7.1 85-01 24th Avenue, East Elmhurst, NY Industrial 118,430 6.4 612 Wortman Avenue, Brooklyn, NY (1) Industrial 453,247 10.4 28-20 Borden Avenue, Long Island City, NY (1) Industrial 83,635 1.9 606 Cozine Avenue, Brooklyn, NY Industrial 57,786 1.3 201 Neelytown Road, Montgomery, NY Industrial 248,370 43.7 New Jersey 100 American Road, Morris Plains, NJ Industrial 128,564 7.0 200 American Road, Morris Plains, NJ Industrial 45,898 6.0 300 American Road, Morris Plains, NJ Industrial 84,863 10.3 400 American Road, Morris Plains, NJ Industrial 93,039 9.2 500 American Road, Morris Plains, NJ Industrial 98,169 11.4 20 East Halsey Road, Parsippany, NJ Industrial 60,600 7.8 1110 Centennial Avenue, Piscataway, NJ Industrial 21,189 2.8 11 Constitution Avenue, Piscataway, NJ Industrial 60,000 5.6 21 Constitution Avenue, Piscataway, NJ Industrial 288,115 21.1 4 Corporate Place, Piscataway, NJ Industrial 137,203 8.4 8 Corporate Place, Piscataway, NJ Industrial 143,115 8.4 25 Corporate Place, Piscataway, NJ Office 49,355 7.4 1938 Olney Avenue, Cherry Hill, NJ Industrial 109,771 7.2 Connecticut 466 Bridgeport Avenue, Shelton, CT Industrial 46,649 4.3 470 Bridgeport Avenue, Shelton, CT Industrial 152,000 12.8 15 Progress Drive/ 30 Commerce Drive, Shelton, CT Industrial 53,570 10.0 33 Platt Road, Shelton, CT Industrial 125,794 21.5 950 Bridgeport Avenue, Milford, CT Industrial 104,126 5.2 12 Cascade Boulevard, Orange, CT Industrial 98,634 4.8 15 Executive Boulevard, Orange, CT Industrial 112,093 5.2 25 Executive Boulevard, Orange, CT Industrial 27,151 2.8 35 Executive Boulevard, Orange, CT Office 66,000 3.8 22 Marsh Hill Road, Orange, CT Industrial 89,630 6.4 269 Lambert Road, Orange, CT Industrial 102,610 6.3 8 Farm Springs Road, Farmington, CT Office 107,654 10.5 110 Old County Circle, Windsor Locks, CT Industrial 226,661 15.6 229 Old County Road, Windsor Locks, CT (2) Land — 7.0 4 Meadow Street, Norwalk, CT Industrial 50,460 2.9

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Delaware 300 McIntire Drive, Newark, DE Industrial 208,656 12.4 Total 5,900,175 399.7

(1) The square footage reflects the total leased area of land or land and building. (2) 83,200 square foot of ground up construction in progress

Our Leases Substantially all of our leases are net or ground leases under which the tenant, in addition to its rental obligation, typically is responsible for expenses attributable to the operation of the property, such as real estate taxes and operating costs. The tenant is also generally responsible for maintaining the property and for restoration following a casualty or partial condemnation. The tenant is typically obligated to indemnify us for claims arising from the property and is responsible for maintaining insurance coverage for the property it leases and naming us an additional insured. The Company typically evaluates a tenant’s credit quality by reviewing the tenant’s financial information, rating agency reports and credit reports, when available, and other sources of information that can be useful in determining a tenant’s credit worthiness and financial condition. The Company monitors the tenants’ credit worthiness and financial condition throughout the term of their leases by requiring them to provide financial and other information necessary as per the terms of their respective leases, by reviewing rating agency reports and credit reports, when available and reviewing other available sources of information.

Our typical lease provides for contractual rent increases periodically throughout the term of the lease or for rent increases pursuant to a formula based on the consumer price index. Our policy has been to acquire properties that are subject to existing long-term leases or to enter into long-term leases with our tenants. Our leases generally provide the tenant with one or more renewal options.

The following table sets forth scheduled lease expirations of leases for our properties as of December 31, 2017:

Percent of 2018 2018 Contractual Contractual Rental Rental Income Income Number of Square Foot of Under Expiring Represented by Year of Lease Expiration(1) Expiring Leases Expiring Leases Leases Expiring Leases 2018 3 284,627 $ 1,797,487 4% 2019 8 804,294 5,140,078 11% 2020 7 319,276 3,246,714 7% 2021 9 573,681 4,450,089 10% 2022 6 628,119 1,985,132 4% 2023 7 918,988 6,729,191 15% 2024 4 93,000 1,244,317 3% 2025 5 768,026 2,716,375 6% 2026 4 104,166 928,919 2% 2027 7 813,747 14,687,019 32% 2028 and after 6 426,208 2,830,465 6% 66 5,734,132 $ 45,755,786 100% (1) Lease expirations assume tenants do not exercise existing renewal options.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Portfolio of Real Estate Investments The following represents information about our portfolio as of December 31, 2017:

Percent of 2018 Principal Number of Number of 2018 Contractual Contractual Location of Property Property Types Tenants Properties Rental Income Rental Income NYC, NY Industrial 10 8 $ 18,698,119 41% Industrial/ New York 20 11 7,609,232 17% Retail Industrial/ Connecticut 16 16 8,279,123 18% Office Industrial/ New Jersey 19 13 10,120,816 22% Office Delaware Industrial 1 1 1,048,496 2% Total 66 49 $ 45,755,786 100%

Financing, Re-Renting and Disposition of Our Properties We may borrow funds on a secured and unsecured basis and intend to do so in the future. We also mortgage specific properties on a non-recourse basis subject to industry standard carve-outs, to enhance the return on our investment. The proceeds of mortgage loans may be used for property acquisitions, investments in joint ventures or other entities that own real property, to reduce bank debt and for working capital purposes. Net proceeds received from the sale of a property are generally required to be used to repay amounts outstanding under debt secured by the property sold. See Note 4. “Mortgage Notes Payable” and Note 5. “Secured Revolving Credit Facility” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

With respect to properties we acquire on a free and clear basis, we usually seek to obtain long-term fixed-rate mortgage financing, when available at acceptable terms, shortly after the acquisition of such property to avoid the risk of movement of interest rates and fluctuating supply and demand in the mortgage markets. We also will acquire a property that is subject to (and will assume) a fixed-rate mortgage. Some of our properties may be financed on a cross-defaulted or cross-collateralized basis.

After termination or expiration of any lease relating to any of our properties, we will seek to re-rent or sell such property in a manner that will maximize the return to us, considering, among other factors, the income potential and market value of such property. We acquire properties for long-term investment for income purposes and do not typically engage in the turnover of investments. We will consider the sale of a property if a sale appears advantageous in view of our investment objectives. We may take back a purchase money mortgage as partial payment in lieu of cash in connection with any sale and may consider local customary and prevailing market conditions in negotiating the terms of repayment. If there is a substantial tax gain, we may seek to enter into a tax deferred transaction and reinvest the proceeds in another property. It is our policy to use any cash realized from the sale of properties, net of any distributions to stockholders, to pay down amounts due under our credit facility, if any, and for the acquisition of additional properties.

Real Property Used By Us in Our Businesses The real property used by us as of December 31, 2017, for the day to day conduct of our businesses is as follows (this property is leased):

Monthly Rent/ Location Facility Expiration Purpose West Hempstead, NY Office $ 24,835/ 12/31/2020 Executive Offices

ITEM 3. LEGAL PROCEEDINGS We are involved in lawsuits and other disputes which, from time to time, arise in the ordinary course of business. However, management believes that these matters will not have a material adverse effect, individually or in the aggregate, on our financial position or results of operations.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Common Equity Currently, there is no public market for our common stock, and we do not expect a market to develop in the near future. We have no current plans to list our common stock on any securities exchange or quoted on any market system.

Outstanding Common Stock and Holders As of March 22, 2018, we had 13,589,125 shares issued and outstanding, held by approximately 557 stockholders of record (of which less than 500 are non-accredited investors for the purposes of Section 12(g) of the Exchange Act).

Distributions Our Board of Directors has declared and paid cash dividends on a quarterly basis. On March 22, 2018, our Board of Directors declared a quarterly cash dividend of $0.10 per share of common stock, payable with respect to the first quarter ended March 31, 2018, to common stockholders of record as of the close of business on March 31, 2018, payable on April 13, 2018. On March 22, 2018, our Board of Directors declared a supplemental cash dividend of $0.08 per share of common stock, payable with respect to the year ended December 31, 2017, to stockholders of record as of the close of business on March 31, 2018, payable on April 16, 2018. The following table shows the declaration dates and the amounts distributed per share for the years ended December 31, 2017 and 2016:

Record Dividend Declaration Payment $ Amount Date Type Date Date Per Share 12/31/2017 Regular 11/7/2017 1/15/2018 0.10

9/30/2017 Regular 8/8/2017 10/13/2017 0.10

6/30/2017 Regular 6/8/2017 7/14/2017 0.10

4/4/2017 Supplemental 3/23/2017 4/14/2017 0.11

3/31/2017 Regular 1/31/2017 4/12/2017 0.10

12/31/2016 Regular 11/8/2016 1/13/2017 0.09

09/30/2016 Regular 8/9/2016 10/11/2016 0.09

06/30/2016 Regular 6/9/2016 7/15/2016 0.09

4/10/2016 Regular 3/24/2016 04/15/2016 0.09

We have determined for income tax purposes that the 2017 regular dividends were considered ordinary dividends. The total distributions paid in 2017 were the result of cash flow from operations.

Although we intend to continue to declare and pay quarterly dividends, no assurances can be made as to the amounts of any future payments. The declaration of any future dividends is within the discretion of the Board of Directors and will be dependent upon, among other things, our earnings, financial condition and capital requirements, as well as any other factors deemed relevant by the Board. Two principal factors in determining the amounts of distributions are (i) the Code requirement that a REIT distribute to stockholders at least 90% of its REIT taxable income, and (ii) the amount of available cash.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Purchase of Equity Securities by the Issuer and Affiliated Purchasers On February 8, 2016, the Company purchased 227,043 shares of GTJ REIT, Inc. for approximately $1.2 million in connection with a settlement agreement with certain parties involving litigation. These shares, along with 35,974 shares of GTJ REIT, Inc. stock acquired by the Company at various times, were subsequently retired.

Our common stock is currently not registered under Section 12 of the Exchange Act and there is no established public market for shares of our common stock. In order to provide our stockholders with interim liquidity, on November 8, 2016, the Board of Directors approved a share redemption program (the “Program”) authorizing redemption of the Company’s shares of common stock (the “Shares”), subject to certain conditions and limitations. The following is a summary of terms and provisions of the Program: • the Company will redeem the Shares on a semi-annual basis (each redemption period ending on May 31st and November 30th of each year), at a specified price per share (which price will be equal to 90% of its net asset value per share for the most recently completed calendar year, subject to adjustment) up to a yearly maximum of $1.0 million in Shares, subject to sufficient funds being available. • the Program will be open to all stockholders (other than current directors, officers and employees, subject to certain exceptions), indefinitely with no specific end date (although the Board may choose to amend, suspend or terminate the Program at any time by providing 30 days’ advance notice to stockholders). • stockholders can tender their Shares for redemption at any time during the period in which the Program is open; stockholders can also withdraw tendered Shares at any time prior to 10 days before the end of the applicable semi-annual period. • if the annual volume limitation is reached in any given semi-annual period or the Company determines to redeem fewer Shares than have been submitted for redemption in any particular semi-annual period due to the insufficiency of funds, the Company will redeem Shares on a pro rata basis in accordance with the policy on priority of redemptions set forth in the Program. • the redemption price for the Shares will be paid in cash no later than 3 business days following the last calendar day of the applicable semi-annual period. • the Program will be terminated if the Shares are listed on a national securities exchange or included for quotation in a national securities market, or in the event a secondary market for the Shares develops or if the Company merges with a listed company. • the Company’s transfer agent, American Stock Transfer & Trust Company, LLC, will act as the redemption agent in connection with the Program.

Pursuant to the Program, on December 5, 2017, the Company redeemed 79,681 Shares at a redemption price of $12.55 per Share, for aggregate consideration of $999,997. The Company received redemption requests during the most recent semi-annual period (June 1, 2017 to November 30, 2017) exceeding the Program’s $1 million per year limit. As a result, the Company was unable to purchase all Shares presented for redemption. The Company honored the requests it received on a pro rata basis in accordance with the policy on priority of redemptions set forth in the Program, subject to giving certain priorities in accordance with the Program. The Company will treat any unsatisfied portions of redemption requests as requests for redemption in the next semi-annual period.

The next redemption period will be December 1, 2017 to May 31, 2018. On March 22, 2018, the Company received its annual valuation as of December 31, 2017. The annual valuation resulted in an adjustment to the redemption price under the Program from $12.55 to $12.92 per share. The Company has filed a Current Report on Form 8-K with the SEC on March 27, 2018 and mailed to its stockholders an announcement of the redemption price adjustment. The redemption price of $12.92 per share will be effective with respect to share redemption requests submitted from December 1, 2017 until such time as the Board determines a new estimated per share NAV. Our stockholders are permitted to withdraw any redemption requests upon written notice to us at any time prior to ten (10) days before the end of the applicable semi-annual period.

On November 13, 2017, the Company purchased 3,005 shares of GTJ REIT, Inc. common stock for $37,713 from a former employee in connection with a separation agreement. These shares, along with the 79,681 purchased pursuant to the Program, were subsequently retired.

ITEM 6. SELECTED FINANCIAL DATA

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussions contain forward-looking statements that involve numerous risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements as a result of these risks and uncertainties, including those set forth in this report under “Forward-Looking Statements” and under “Risk Factors.” You should read the following discussion in conjunction with our consolidated financial statements and notes appearing elsewhere in this filing. Past performance is not a guarantee of future results. Factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, those discussed in “Risk Factors” and elsewhere in this report and the risks discussed in our other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis, judgment, belief or expectation only as of the date hereof. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof, unless otherwise required by law.

Executive Summary We are a fully integrated, self-administered and self-managed REIT, engaged in the acquisition, ownership, and management of commercial real estate. As of December 31, 2017, we owned 49 properties, which are predominately industrial/ warehouse locations leased on a net lease basis. The Company typically evaluates a tenant’s credit quality by reviewing its financial information, rating agency reports and credit reports, when available, and other sources of information that can be useful in determining a tenant’s creditworthiness and financial condition.

We formerly owned a group of outdoor maintenance businesses, an electrical contracting business, and a parking garage business, which are presented as part of our consolidated financial statements. These businesses were all disposed in 2012 and 2013.

On January 17, 2013, we acquired all outstanding ownership interests of a portfolio consisting of 25 commercial properties located in New York, New Jersey, and Connecticut in exchange for 33.29% of the outstanding limited partnership interest in the Operating Partnership. The outstanding limited partnership interest in the Operating Partnership was increased to 33.78% due to post- closing adjustments, and to 34.35% due to the redemption of certain shares of GTJ REIT, Inc. common stock. As a result of the transaction, as well as the six properties acquired in 2014, seven properties in 2015, two properties in 2016, and two properties in 2017, we currently beneficially own a 65.65% interest in the 49 property portfolio, consisting of approximately 5.9 million square feet of industrial, warehouse, office, retail and other properties on approximately 400 acres of land in New York, New Jersey, Connecticut and Delaware.

We continue to seek opportunities to acquire properties. We will seek to acquire properties within geographic areas that will satisfy our primary investment objectives of providing our stockholders with stable cash flow, preservation of capital and growth of income and principal without taking undue risk. Because a significant factor in the valuation of income-producing property is the potential for future income, we anticipate that the majority of properties that we will acquire will have both the potential for growth in value and provide for cash distributions to stockholders.

Critical Accounting Policies Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that could affect the reported amounts in our consolidated financial statements. Actual results could differ from these estimates. A summary of our significant accounting policies is presented in Note 2 of the “Notes to Consolidated Financial Statements” set forth in Item 8 hereof. Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements included in this report. Certain of the accounting policies used in the preparation of these consolidated financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated financial statements included in this report and require the application of significant judgment by management and, as a result, are subject to a degree of uncertainty.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Revenue Recognition: We recognize our rental revenue on a straight-line basis over the term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. In those instances, in which we fund tenant improvements and the improvements are deemed to be owned by us, revenue recognition will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. When we determine that the tenant allowances are lease incentives, we commence revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The properties are being leased to tenants under operating leases.

Property operating expense recoveries from tenants of common area maintenance, real estate taxes, insurance, and other recoverable costs are recognized in the period the related expenses are incurred.

Real Estate: Real estate assets are stated at cost, less accumulated depreciation and amortization. All costs related to the improvement or replacements of real estate properties are capitalized. Additions, renovations and improvements that enhance and/or extend the useful life of a property are also capitalized. Expenditures for ordinary maintenance, repairs and improvements that do not materially prolong the normal useful life of an asset are charged to operations as incurred.

Upon the acquisition of real estate properties, the fair value of the real estate purchased is allocated to the acquired tangible assets (generally consisting of land, buildings and building improvements, and tenant improvements) and identified intangible assets and liabilities (generally consisting of above-market and below-market leases and the origination value of in-place leases) in accordance with GAAP. We utilize methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities. The fair value of the tangible assets of an acquired property considers the value of the property “as-if-vacant.” In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above-market and below-market leases is estimated based on the differences between contractual rentals and the estimated market rents over the applicable lease term discounted back to the date of acquisition utilizing a discount rate adjusted for the credit risk associated with the respective tenants. Fixed-rate renewal options have been included in the calculation of the fair value of acquired leases where applicable. The aggregate value of in-place leases is measured based on the avoided costs associated with lack of revenue over a market oriented lease-up period, the avoided leasing commissions, and other avoided costs common in similar leasing transactions.

The capitalized above-market lease values are amortized as a reduction of rental revenue over the remaining term of the respective leases and the capitalized below-market lease values are amortized as an increase to rental revenue over the remaining term of the respective leases. The value of in-place leases is based on our evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during expected lease-up periods, current market conditions, and costs to execute similar leases. The value of in-place leases is amortized over the remaining term of the respective leases. If a tenant vacates its space prior to its contractual expiration date, any unamortized balance of the related intangible assets or liabilities is recorded as income or expense in the period.

The Company capitalizes all direct costs of real estate under development until the end of the development period. In addition, the Company capitalizes indirect cost of insurance and real estate taxes allocable to real estate under development during the development period. The Company also capitalizes interest using the avoided cost method for real estate under development during the development period.

Asset Impairment: Management reviews each real estate investment for impairment whenever events or circumstances indicate that the carrying value of a real estate investment may not be recoverable. The review of recoverability is based on an estimate of the undiscounted future cash flows that are expected to result from the real estate investment’s use and eventual disposition. Such cash flow analyses consider factors such as expected future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If an impairment event exists due to the projected inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds estimated fair value. Management is required to make subjective assessments as to whether there are impairments in the value of its real estate properties. These assessments could have

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document a direct impact on net income, because an impairment loss is recognized in the period that the assessment is made. Management has determined that there were no indicators of impairment relating to our long-lived assets at December 31, 2017.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes: We are organized and conduct our operations to qualify as a REIT for Federal income tax purposes. Accordingly, we will generally not be subject to Federal income taxation on that portion of our distributable income that qualifies as REIT taxable income, to the extent that we distribute at least 90% of our REIT taxable income to our stockholders and comply with certain other requirements as defined under the Code.

We also participate in certain activities conducted by entities which elected to be treated as taxable subsidiaries under the Code. As such we are subject to federal, state and local taxes on the income from these activities.

We account for income taxes under the asset and liability method, as required by the provisions of Accounting Standards Codification (“ASC”) 740-10-30. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We provide a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not.

Stock-Based Compensation: We account for stock based compensation in accordance with ASC 718, which establishes accounting for stock-based awards exchanged for employee services. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and the expense is recognized in earnings at the grant date (for the portion that vests immediately) or ratably over the respective vesting periods.

Summary of Operations Results of Operations: Year Ended December 31, 2017 as compared with Year Ended December 31, 2016 The following table sets forth our results of operations for the years indicated (in thousands):

Year Ended December 31, Increase/(Decrease) 2017 2016 Amount Percent Revenues: Rental income $ 44,713 $ 41,965 $ 2,748 7% Tenant reimbursements 8,459 7,732 727 9% Total revenues 53,172 49,697 3,475 7% Expenses: General and administrative expenses 8,802 7,232 1,570 22% Acquisition costs 446 561 (115) -20% Property operating expenses 9,897 9,335 562 6% Depreciation and amortization 13,501 12,581 920 7% Total operating expenses 32,646 29,709 2,937 10% Operating income 20,526 19,988 538 3% Other expense: Interest expense (16,389) (15,334) 1,055 7% Other (541) (514) 27 5% Net income from operations 3,596 4,140 (544) -13% Net income attributable to noncontrolling interest 1,247 1,506 (259) -17% Net income attributable to common stockholders $ 2,349 $ 2,634 $ (285) -11%

Property Rental Revenues

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Property rental revenue increased $2.7 million, or 7%, to $44.7 million for the year ended December 31, 2017 from $42.0 million for the year ended December 31, 2016. This increase is primarily attributable to the acquisition of two income producing properties during 2017, and the full year ownership in 2017 of two income producing properties acquired in 2016.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Tenant Reimbursements Tenant reimbursements increased $0.7 million, or 9%, to $8.4 million for the year ended December 31, 2017 from $7.7 million for the year ended December 31, 2016. This increase is primarily attributable to the acquisition of two income producing properties during 2017, and the full year ownership in 2017 of two income producing properties acquired in 2016.

Operating Expenses Operating expenses increased $3.0 million, or 10%, to $32.7 million for the year ended December 31, 2017 from $29.7 million for the year ended December 31, 2016. The increase is mainly attributable to an increase to depreciation expense of $0.9 million and increases to general and administrative expenses of $1.6 million, which includes professional fees in connection with the Company’s Share Redemption Program and $0.8 million of deal pursuit costs in connection with a potential financing.

Interest Expense Interest expense increased $1.1 million, or 7%, to $16.4 million for the year ended December 31, 2017 from $15.3 million for the year ended December 31, 2016. The increase is primarily due to the debt service associated with the financing of two property acquisitions in 2016 and two property acquisitions in 2017 from the Company’s secured revolving credit facility with Key Bank.

Liquidity and Capital Resources We derive substantially all of our revenues from rents received from tenants under existing leases on each of our properties. These revenues include fixed base rents and recoveries of certain property operating expenses that we have incurred and that we pass through to the individual tenants.

Our primary cash expenses consist of our property operating expenses, which include: real estate taxes, repairs and maintenance, insurance, utilities, general and administrative expenses, which include compensation costs, office expenses, professional fees and other administrative expenses, leasing and acquisition costs, which include third-party costs paid to brokers and consultants, and interest expense on our mortgage loans.

On December 2, 2015, the Operating Partnership entered into a credit agreement with Key Bank for a $50.0 million secured revolving credit facility with an initial term of two years, with a one-year extension option. The secured revolving credit facility was subsequently increased to $55.0 million and the Operating Partnership exercised its option to extend the term to June 30, 2019. Our available liquidity at December 31, 2017 was approximately $23.0 million, consisting of cash and cash equivalents of $8.4 million and $14.6 million from our Key Bank secured revolving credit facility. As of December 31, 2017, the Company had $35.9 million of outstanding borrowings on its secured revolving credit facility.

We expect to meet substantially all of our operating cash requirements (including dividend payments required to maintain our REIT status and an estimated $0.8 million of 2018 principal mortgage debt amortization) from cash flow from operations. To the extent that cash flow from operations is not adequate to cover all of our operating needs, we will be required to use our available cash and cash equivalents to satisfy operating requirements. We expect to satisfy maturities of mortgage principal in 2018 of $41.3 million through our secured revolving credit facility and refinancing some of our real estate assets. Additionally, in the normal course of our business, we may sell properties when we determine that it is in our best interests, which also generates additional liquidity.

Net Cash Flows Year Ended December 31, 2017 vs. Year Ended December 31, 2016 Operating Activities Net cash provided by operating activities was $17.5 million for 2017 compared to $16.9 million for 2016. For the 2017 period, cash provided by operating activities included (i) net income before depreciation, amortization, stock compensation, rental income in excess of amounts billed, and a loss from the Company’s investment in a limited liability partnership of $18.3 million, (ii) an increase in other liabilities of $0.9 million, and (iii) an increase to accounts payable and accrued expenses of $0.8 million offset by (iv) an increase in other assets of $1.3 million and (v) an increase in restricted cash of $1.2 million. 2016 net cash provided by operating activities of $16.9 million included (i) net income before depreciation, amortization, and stock compensation, rental income in excess of amounts billed and a loss from the Company’s investment in a limited partnership of $17.4 million, (ii) an increase in other liabilities of

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document $0.5 million, and (iii) an increase to accounts payable and accrued expenses of $0.3 million, partially offset by (iv) an increase in other assets of $1.3 million.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Investing Activities Net cash used in investing activities was $52.6 million for the year ended December 31, 2017 compared to $32.0 million for the year ended December 31, 2016. For the 2017 period, cash used in investing activities resulted from (i) the acquisition of two properties totaling $43.8 million, (ii) property improvements of $8.4 million, and (iii) contract deposit of $0.7 million for the potential acquisition of a property, offset by (iv) a decrease in restricted cash of $0.3 million. For the 2016 period, net cash used in investing activities resulted from (i) the acquisition of two properties totaling $27.0 million, and (ii) property improvements of $6.5 million, offset by (iii) the release of a $1.0 million certificate of deposit in connection with the completion of certain site improvements at 20 East Halsey Road in Parsippany, New Jersey, (iv) the net release of leasing and capital reserves in connection with the AIG Loan of $0.3 million, and (v) the application of contract deposit of $0.2 million for a property acquired in 2016.

Financing Activities Net cash provided by financing activities was $27.7 million for the year ended December 31, 2017 compared to $16.0 million for the year ended December 31, 2016. For the 2017 period, net cash provided by financing activities included (i) proceeds from the Company’s revolving credit facility with Key Bank of $45.5 million, and (ii) proceeds of $39.0 million from mortgage notes payable, offset by (iii) financing costs of $1.4 million from mortgage notes payable, (iv) the pay down of $37.5 million of the Company’s revolving credit facility, (v) the payment of the Company’s quarterly and 2016 supplemental dividends totaling $6.8 million, (vi) distributions to non-controlling interests of $6.2 million, (vii) the repurchase of shares of GTJ REIT, Inc. common stock of $1.0 million and (viii) the payment of mortgage principal of $3.9 million. For the 2016 period, net cash provided by financing activities included (i) proceeds from the Company’s revolving credit facility with Key Bank of $27.8 million, partially offset by (ii) the payment of the Company’s quarterly and 2015 supplemental dividends totaling $6.2 million, (iii) distributions to non-controlling interests of $3.4 million, (iv) the repurchase of shares of GTJ REIT, Inc. common stock of $1.2 million and (v) the payment of mortgage principal of $0.9 million.

Non-GAAP Financial Measures EBITDA and Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) EBITDA and Adjusted EBITDA are non-GAAP financial measures. Our EBITDA and Adjusted EBITDA computations may not be comparable to EBITDA and Adjusted EBITDA reported by other companies that interpret the definitions of EBITDA and Adjusted EBITDA differently than we do. Management believes EBITDA and Adjusted EBITDA to be meaningful measures of a REIT’s performance because they are widely followed by industry analysts, lenders and investors and are used by management as measures of performance. EBITDA and Adjusted EBITDA should be considered along with, but not as alternatives to, net income as measures of our operating performance.

Adjusted EBITDA allows investors to measure our operating performance independent of our capital structure and indebtedness. Additionally, acquisition costs and the write off of deal pursuit costs have been excluded from Adjusted EBITDA in order to assist with measuring core real estate operating performance.

Reconciliation of Net Income to EBITDA and Adjusted EBITDA attributable to our common stockholders is as follows (in thousands) (All amounts are net of noncontrolling interest):

2017 2016 Net income attributable to common stockholders $ 2,349 $ 2,634 Real estate depreciation 6,678 6,147 Amortization of intangible assets and deferred costs 2,807 2,662 Interest expense 10,034 9,505 EBITDA 21,868 20,948 Acquisition costs 292 369 Write off of deal pursuit costs 506 — Adjusted EBITDA $ 22,666 $ 21,317

Funds from Operations and Adjusted Funds from Operations

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We consider Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”), each of which are non- GAAP measures, to be additional measures of an equity REIT’s operating performance. We report FFO in addition to our net income (loss) and net cash provided by operating activities. Management has adopted the definition suggested by the National Association of Real Estate Investment Trusts (“NAREIT”) and defines FFO to equal net income (loss) computed in accordance with GAAP;

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document excluding gains or losses from sales of property, excluding asset impairments, plus real estate-related depreciation and amortization and loss from discontinued operations. We believe these measurements provide a more complete understanding of our performance when compared year over year and better reflect the impact on our operations from trends in occupancy rates, rental rates, operating costs and general and administrative expenses which may not be immediately apparent from net income.

Management considers FFO a meaningful, additional measure of operating performance because it primarily excludes the assumption that the value of our real estate assets diminishes predictably over time and industry analysts have accepted it as a performance measure. FFO is presented to assist investors in analyzing our performance. It is helpful because it excludes various items included in net income that are not indicative of our operating performance, such as gains or losses from sales of property and depreciation and amortization. Management believes Core FFO to be a meaningful, additional measure of operating performance because it provides information consistent with the Company’s analysis of the operating performance of its portfolio by excluding items such as acquisition costs which affect the comparability of the Company’s period over period performance and are not indicative of the results provided by our operating portfolio. Management believes AFFO to be a meaningful, additional measure of operating performance because it provides information consistent with the Company’s analysis of its operating performance by excluding non- cash income and expense items such as straight lined rent, amortization of lease intangibles, mark to market debt adjustments, financing costs, our unrealized loss from an investment in a limited partnership, amortization of stock compensation, and the write of off deal pursuit costs, which are not indicative of the results of our operating portfolio.

However, FFO, Core FFO and AFFO: • do not represent cash flows from operating activities in accordance with GAAP, which, unlike FFO, Core FFO and AFFO, generally reflects all cash effects of transactions and other events in the determination of net income; • are non-GAAP financial measures and do not represent net income as defined by U.S. GAAP; and • should not be considered an alternative to net income as an indication of our performance.

FFO, Core FFO and AFFO as defined by us may not be comparable to similarly titled items reported by other real estate investment trusts due to possible differences in the application of the NAREIT definition used by such REITs. The following table provides a reconciliation of net (loss) income in accordance with GAAP to FFO and AFFO for the years ended December 31, 2017 and 2016 (All amounts are net of noncontrolling interest).

Reconciliation of Net Income to FFO, Core FFO and AFFO attributable to our common stockholders (in thousands, except share data):

2017 2016 Net income attributable to common stockholders $ 2,349 $ 2,634 Add NAREIT defined adjustments: real estate depreciation 6,490 5,816 amortization of intangibles and deferred costs 2,070 2,067 Funds From Operations (“FFO”), as defined by NAREIT: 10,909 10,517 Adjustments to arrive at Core FFO acquisition costs 292 369 Core FFO, as defined by GTJ REIT, Inc. 11,201 10,886 Adjustments to arrive at Adjusted FFO (“AFFO”): straight-lined rents and amortization of lease intangibles (307) (409) amortization of mark to market debt adjustments and financing costs 737 595 unrealized loss on limited partnership investment 130 263 amortization of stock compensation 537 355 write off of deal pursuit costs 506 — AFFO $ 12,804 $ 11,690

East New York, Brooklyn, New York On May 10, 2016, the Company acquired a 57,786 square foot warehouse/garage building in East New York, Brooklyn, New York for $10.0 million. The property is currently leased to The City of New York (DCAS) for the benefit of the Department of Sanitation for a term that expires December 31, 2025. The purchase was financed from the Company’s secured revolving credit facility with Key Bank.

Newark, Delaware On June 1, 2016, the Company acquired a 208,656 square foot warehouse/distribution facility in Newark, Delaware for $17.0 million. The property is currently leased to Valassis Communications, Inc. for a term that expires April 30, 2025. The purchase was financed from the Company’s secured revolving credit facility with Key Bank. Cherry Hill, New Jersey On July 27, 2017, the Company acquired a 109,771 square-foot distribution and installation training building in Cherry Hill, New Jersey for $7.6 million. The property is leased to Sovereign Distributors, Inc. (d/b/a Avalon Flooring) for a term that expires September 30, 2031. The purchase was financed from the Company’s secured revolving credit facility with Key Bank. Montgomery, New York On August 31, 2017, the Company acquired a 248,370 square-foot warehouse/distribution facility in Montgomery, New York for $36.2 million. The property is leased to FedEx Ground Package System, Inc. for a term that expires February 28, 2027. The purchase was financed from the Company’s secured revolving credit facility with Key Bank.

Cash Payments for Financing Payment of interest under our mortgage notes payable will consume a portion of our cash flow, reducing taxable income and consequently, the resulting distributions to be made to our stockholders.

Trend in Financial Resources We expect to receive additional rent payments over time due to scheduled increases in rent set forth in the leases on our real properties. It should be noted, however, that the additional rent payments are expected to result in an approximately equal obligation to make additional distributions to stockholders, and will therefore, not result in a material increase in working capital.

Environmental Matters

As of December 31, 2017, three of the Company’s six former bus depot sites received final regulatory closure, satisfying outstanding clean-up obligations related to legacy site contamination issues. Three sites continue with on-going cleanup, monitoring and reporting activities. We believe each of the six sites remain in compliance with existing local, state and federal obligations.

Inflation Low to moderate levels of inflation during the past several years have favorably impacted our operations by stabilizing operating expenses. At the same time, low inflation has had the indirect effect of reducing our ability to increase tenant rents. However, our properties have tenants whose leases include expense reimbursements and other provisions to minimize the effect of inflation.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risks that arise from changes in interest rates, foreign currency exchange rates and other market changes affect market sensitive instruments. In pursuing our business strategies, the primary market risk which we are exposed to is interest rate risk. As of December 31, 2017, the Company (through its Operating Partnership) had a variable rate line of credit facility with Key Bank for $50.5 million that bears interest at (i) LIBOR plus 300 basis points to 350 basis points, depending upon the Company’s leverage ratio as defined in the Credit Agreement or, (ii) a base rate plus an applicable margin as defined in the Credit Agreement. As of

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document December 31, 2017, interest expense on our variable rate line of credit facility would increase by as much as $505,000 annually if LIBOR increased by 100 basis points.

GTJ REIT, INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page Report of Independent Registered Public Accounting Firm 38 Consolidated Balance Sheets as of December 31, 2017 and 2016 39 Consolidated Statements of Operations for the years ended December 31, 2017 and 2016 40 Consolidated Statements of Equity for the years ended December 31, 2017 and 2016 41 Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016 42 Notes to Consolidated Financial Statements 43 Financial Statement Schedule: Schedule III- Consolidated Real Estate and Accumulated Depreciation 83

Stockholders and Board of Directors GTJ REIT, Inc. and Subsidiaries West Hempstead, New York

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of GTJ REIT, Inc. and Subsidiaries (the “Company”), as of December 31, 2017 and 2016, the related consolidated statements of operations, equity, and cash flows for each of the two years in the period ended December 31, 2017, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/BDO USA, LLP

We have served as the Company's auditor since 2009.

New York, New York March 29, 2018

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document GTJ REIT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2017 and 2016 (amounts in thousands, except share data)

2017 2016 ASSETS Real estate, at cost: Land $ 199,782 $ 193,855 Buildings and improvements 322,404 280,718 Total real estate, at cost 522,186 474,573 Less: accumulated depreciation and amortization (55,136) (45,252) Net real estate held for investment 467,050 429,321 Cash and cash equivalents 8,423 15,932 Rental income in excess of amount billed 16,261 15,793 Acquired lease intangible assets, net 14,576 14,389 Other assets 15,231 12,492 Total assets $ 521,541 $ 487,927 LIABILITIES AND EQUITY Liabilities: Mortgage notes payable, net $ 370,194 $ 335,694 Secured revolving credit facility 35,857 27,775 Accounts payable and accrued expenses 3,608 2,833 Dividends payable 1,359 1,226 Acquired lease intangible liabilities, net 5,867 6,740 Other liabilities 7,070 6,168 Total liabilities 423,955 380,436 Commitments and contingencies (Note 9) — — Equity: Series A, Preferred stock, $.0001 par value; 500,000 shares authorized; none issued and outstanding — — Series B, Preferred stock, $.0001 par value; non-voting; 6,500,000 shares authorized; none issued and outstanding — — Common stock, $.0001 par value; 100,000,000 shares authorized; 13,594,125 and 13,618,884 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively 1 1 Additional paid-in capital 161,812 162,356 Distributions in excess of net income (103,025) (98,420) Total stockholders’ equity 58,788 63,937 Noncontrolling interest 38,798 43,554 Total equity 97,586 107,491 Total liabilities and equity $ 521,541 $ 487,927

The accompanying notes are an integral part of these consolidated financial statements.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document GTJ REIT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31, 2017 and 2016 (amounts in thousands, except share and per share data)

2017 2016 Revenues: Rental income $ 44,713 $ 41,965 Tenant reimbursements 8,459 7,732 Total revenues 53,172 49,697 Expenses: General and administrative 8,802 7,232 Acquisition costs 446 561 Property operating expenses 9,897 9,335 Depreciation and amortization 13,501 12,581 Total expenses 32,646 29,709 Operating income 20,526 19,988 Interest expense (16,389) (15,334) Other (541) (514) Net income from operations 3,596 4,140 Less: Net income attributable to noncontrolling interest 1,247 1,506 Net income attributable to common stockholders $ 2,349 $ 2,634 Net income per common share attributable to common stockholders-basic and $ 0.17 $ 0.19 diluted earnings per share Weighted average common shares outstanding-basic 13,646,345 13,858,540 Weighted average common shares outstanding-diluted 13,668,680 13,889,739

The accompanying notes are an integral part of these consolidated financial statements.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document GTJ REIT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY For the Years Ended December 31, 2017 and 2016 (amounts in thousands, except share data)

Common Stock Additional- Distributions Total Preferred Outstanding Par Paid-In- in Excess of Stockholders’ Noncontrolling Total Stock Shares Value Capital Net Income Equity Interests Equity Balance at January 1, 2016 — 13,820,434 $ 1 $ 139,385 $ (96,081) $ 43,305 $ 68,526 $ 111,831 Distributions – common stock — — — — (4,973) (4,973) — (4,973) Repurchases – common stock — — — (1,248) — (1,248) — (1,248) Stock-based compensation — — — 539 — 539 — 539 Issuance of restricted shares — 61,467 — — — — — — Retirement of Shares — (263,017) — — — — — — Distributions to noncontrolling interest — — — — — — (2,798) (2,798) Reallocation of equity — — — 23,680 — 23,680 (23,680) — Net income from operations — — — — 2,634 2,634 1,506 4,140 Balance at December 31, 2016 — 13,618,884 1 162,356 (98,420) 63,937 43,554 $107,491 Distributions – common stock — — — — (6,954) (6,954) — (6,954) Repurchases – common stock — — — (1,038) — (1,038) — (1,038) Stock-based compensation — — — 718 — 718 — 718 Issuance of restricted shares — 57,927 — — — — — — Retirement of Shares — (82,686) — — — — — — Distributions to noncontrolling interest — — — — — — (6,227) (6,227) Net income from operations — — — — 2,349 2,349 1,247 3,596 Reallocation of equity — — — (224) — (224) 224 — Balance at December 31, 2017 — 13,594,125 $ 1 $ 161,812 $ (103,025) $ 58,788 $ 38,798 $ 97,586

The accompanying notes are an integral part of these consolidated financial statements.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document GTJ REIT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2017 and 2016 (amounts in thousands)

2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net income from operations $ 3,596 $ 4,140 Adjustments to reconcile net income from operations to net cash provided by operating activities Depreciation 9,944 8,909 Amortization of intangible assets and deferred charges 4,276 4,046 Stock-based compensation 718 539 Rental income in excess of amount billed (468) (621) Loss from equity investment in limited partnership 198 399 Changes in operating assets and liabilities: Restricted cash (1,166) (74) Other assets (1,327) (1,301) Accounts payable and accrued expenses 774 320 Other liabilities 906 543 Net cash provided by operating activities 17,451 16,900 Cash flow from investing activities: Cash paid for property acquisitions (43,824) (27,038) Cash paid for property improvements (8,423) (6,514) Contract deposits (670) 238 Restricted cash 280 1,294 Net cash used in investing activities (52,637) (32,020) Cash flow from financing activities: Proceeds from mortgage notes payable 39,000 — Financing costs on debt (1,391) — Payment of mortgage principal (3,924) (893) Repayment of bridge loan / revolving credit facility (37,475) — Proceeds from revolving credit facility 45,557 27,775 Cash distributions to noncontrolling interests (6,231) (3,352) Cash dividends paid (6,821) (6,235) Repurchases of common stock (1,038) (1,248) Net cash provided by financing activities 27,677 16,047 Net (decrease) increase in cash and cash equivalents (7,509) 927 Cash and cash equivalents at the beginning of period 15,932 15,005 Cash and cash equivalents at the end of period $ 8,423 $ 15,932 Supplemental cash flow information: Cash paid for interest, net of amount capitalized of $237 for 2017 $ 15,254 $ 14,431 Cash paid for income taxes $ 100 $ 43 Supplemental disclosures of non-cash investing activities

The accompanying notes are an integral part of these consolidated financial statements.

1. ORGANIZATION AND DESCRIPTION OF BUSINESS: GTJ REIT, Inc. (the “Company” or “GTJ REIT”) was incorporated on June 26, 2006, under Maryland General Corporation Law. The Company is focused primarily on the acquisition, ownership, management, and operation of commercial real estate located in New York, New Jersey, Connecticut and Delaware.

The Company has elected to be treated as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended (the “Code”) and elected December 31 as its fiscal year end. Under the REIT operating structure, the Company is permitted to deduct the dividends paid to its stockholders when determining its taxable income. Assuming dividends equal or exceed the Company’s taxable income, the Company generally will not be required to pay federal corporate income taxes on such income.

On January 17, 2013, the Company closed on a transaction with Wu/Lighthouse Portfolio, LLC, in which a limited partnership (the “Operating Partnership”) owned and controlled by the Company, acquired all outstanding ownership interests of a portfolio consisting of 25 commercial properties (the “Acquired Properties”) located in New York, New Jersey and Connecticut, in exchange for 33.29% of the outstanding limited partnership interest in the Operating Partnership. The outstanding limited partnership interest in the Operating Partnership exchanged for the Acquired Properties was increased to 33.78% due to post-closing adjustments, and to 34.35% due to the redemption of certain shares of GTJ REIT, Inc. common stock. The acquisition was recorded as a business combination and accordingly the purchase price was allocated to the assets acquired and liabilities assumed at fair value. As a result of this acquisition, the six properties acquired in 2014, the seven properties acquired in 2015, two properties acquired in 2016, and the two properties acquired in 2017, the Company currently beneficially owns a 65.65% interest in a total of 49 properties consisting of approximately 5.9 million square feet of industrial, office and other properties on approximately 400 acres of land in New York, New Jersey, Connecticut and Delaware. At December 31, 2017, subject to certain anti-dilutive and other provisions contained in the governing agreements, the limited partnership interest in the Operating Partnership may be converted in the aggregate, into approximately 1.9 million shares of the Company’s common stock and approximately 5.2 million shares of Series B preferred stock.

Prior to 2013, the Company had operated a group of outdoor maintenance, shelter cleaning, and electrical contracting businesses, as well as a parking garage facility. During 2011, the Board voted to divest these operations which were sold in 2012 and 2013. The operations of these entities are reported in the consolidated financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation: The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the financial statements of the Company, its wholly owned subsidiaries, and the Operating Partnership, as the Company makes all operating and financial decisions for (i.e., exercises control over) the Operating Partnership. All material intercompany transactions have been eliminated in consolidation. The ownership interests of the other investors in the Operating Partnership are recorded as noncontrolling interests.

During the twelve months ended December 31, 2016, the Company determined that certain transactions involving the issuance of limited partnership interests of the Operating Partnership, should have resulted in a reallocation between the Operating Partnership’s non-controlling interest (“OP NCI”) and Additional Paid-in-Capital (“APIC”) to reflect the difference between the fair value of the consideration received and the book value of the OP NCI attributable to limited partnership interests at the time of the issuance (the “Reallocation”). During the twelve months ended December 31, 2016, the Company increased its APIC with an offsetting reduction to OP NCI of approximately $23.7 million. During the twelve months ended December 31, 2017, the Company decreased its APIC with an offsetting increase to OP NCI of approximately $0.2 million. The Company concluded that these Reallocation adjustments are not meaningful to the Company’s financial position for any of the prior years, and as such these cumulative changes were recorded in the Consolidated Balance Sheets and Statement of Stockholders’ Equity in 2016 and 2017. These Reallocations have no impact on the previously reported Statement of Operations or Cash Flows.

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Use of Estimates: The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. All of these estimates reflect management’s best judgment about current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. If such conditions persist longer or deteriorate further than expected, it is reasonably possible that the judgments and estimates could change, which may result in impairments of certain assets. Significant estimates include the useful lives of long- lived assets including property, equipment and intangible assets, impairment of assets, collectability of receivables, contingencies, stock- based compensation, and fair value of assets and liabilities acquired in business combinations.

Real Estate: Real estate assets are stated at cost, less accumulated depreciation and amortization. All costs related to the improvement or replacement of real estate properties are capitalized. Additions, renovations, and improvements that enhance and/or extend the useful life of a property are also capitalized. Expenditures for ordinary maintenance, repairs, and improvements that do not materially prolong the normal useful life of an asset, are charged to operations as incurred.

Upon the acquisition of real estate properties, the fair value of the real estate purchased is allocated to the acquired tangible assets (generally consisting of land, buildings and building improvements, and tenant improvements) and identified intangible assets and liabilities (generally consisting of above-market and below-market leases and the origination value of in-place leases) in accordance with GAAP. We utilize methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities. The fair value of the tangible assets of an acquired property considers the value of the property “as-if-vacant.” In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above-market and below-market leases is estimated based on the differences between contractual rentals and the estimated market rents over the applicable lease term discounted back to the date of acquisition utilizing a discount rate adjusted for the credit risk associated with the respective tenants. The aggregate value of in-place leases is measured based on the avoided costs associated with lack of revenue over a market oriented lease- up period, the avoided leasing commissions, and other avoided costs common in similar leasing transactions.

Mortgage notes payable assumed in connection with acquisitions are recorded at their fair value using current market interest rates for similar debt at the time of acquisitions. Acquisition-related costs are expensed as incurred. The capitalized above- market lease values are amortized as a reduction of rental revenue over the remaining term of the respective leases and the capitalized below-market lease values are amortized as an increase to rental revenue over the remaining term of the respective leases. The value of in-place leases is based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during expected lease-up periods, current market conditions, and costs to execute similar leases. The values of in-place leases are amortized over the remaining term of the respective leases. If a tenant vacates its space prior to its contractual expiration date, any unamortized balance of the related intangible assets or liabilities is recorded as income or expense in the period. The total net impact to rental revenues due to the amortization of above-market and below-market leases was a net increase in rental revenue of approximately $0.4 million and $0.5 million for the years ended December 31, 2017 and December 31, 2016, respectively.

As of December 31, 2017, approximately $1.5 million and $13.1 million (net of accumulated amortization) relating to above-market and in-place leases, respectively, are included in acquired lease intangible assets, net in the accompanying consolidated balance sheets. As of December 31, 2016, approximately $1.9 million and $12.5 million (net of accumulated amortization) relating to above-market and in-place leases, respectively, are included in acquired lease intangible assets, net in the accompanying consolidated balance sheets. As of December 31, 2017 and 2016, approximately $5.9 million and $6.7 million (net of accumulated amortization), respectively, relating to below-market leases is included in acquired lease intangible liabilities, net in the accompanying consolidated balance sheets.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The following table presents the projected increase to rental revenue from the amortization of the acquired above-market and below-market lease intangibles and the increase to amortization expense of the in-place lease intangibles for properties owned at December 31, 2017, over the next five years and thereafter (in thousands):

Increase to Net increase to amortization rental revenues expense 2018 $ 551 $ 2,272 2019 560 1,955 2020 660 1,627 2021 510 1,400 2022 533 1,344 Thereafter 1,609 4,534 $ 4,423 $ 13,132

Depreciation and Amortization: The Company uses the straight-line method for depreciation and amortization. Properties and property improvements are depreciated over their estimated useful lives, which range from 5 to 40 years. Furniture, fixtures, and equipment are depreciated over estimated useful lives that range from 5 to 10 years. Tenant improvements are amortized over the shorter of the remaining non- cancellable term of the related leases or their useful lives.

Deferred Charges: Deferred charges consist principally of leasing commissions, which are amortized over the life of the related tenant leases, and financing costs, which are amortized over the terms of the respective debt agreements. These deferred charges are included in other assets on the consolidated balance sheets. If leases are terminated, the unamortized charges are expensed.

Asset Impairment: Management reviews each real estate investment for impairment whenever events or circumstances indicate that the carrying value of a real estate investment may not be recoverable. The review of recoverability is based on an estimate of the undiscounted future cash flows that are expected to result from the real estate investment’s use and eventual disposition. Such cash flow analyses consider factors such as expected future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If an impairment event exists due to the projected inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds estimated fair value. Management is required to make subjective assessments as to whether there are impairments in the value of the Company’s real estate holdings. These assessments could have a direct impact on net income, because an impairment loss is recognized in the period that the assessment is made. Management has determined that there were no indicators of impairment relating to its long-lived assets at December 31, 2017.

Reportable Segments: As of December 31, 2017, the Company primarily operated in one reportable segment, commercial real estate.

Revenue Recognition: Rental income includes the base rent that each tenant is required to pay in accordance with the terms of their respective leases reported on a straight-line basis over the term of the lease. In order for management to determine, in its judgment, that the unbilled rent receivable applicable to each specific property is collectible, management reviews billed and unbilled rent receivables on a quarterly basis and takes into consideration the tenant’s payment history and financial condition. Some of the leases provide for additional contingent rental revenue in the form of percentage rents and increases based on the consumer price index, subject to certain maximums and minimums.

Substantially all of the Company’s properties are subject to long-term net leases under which the tenant is typically responsible to pay for its pro rata share of real estate taxes, insurance, and ordinary maintenance and repairs for the property.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Property operating expense recoveries from tenants of common area maintenance, real estate taxes, and other recoverable costs are recognized as revenues in the period that the related expenses are incurred.

Earnings Per Share Information: The Company presents both basic and diluted earnings per share. Basic earnings per share excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower per share amount. Restricted stock was included in the computation of diluted earnings per share. Stock option awards were included in the computation of earnings per share in 2017 and 2016 because the option awards were dilutive.

Cash and Cash Equivalents: The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Restricted Cash: Restricted cash represents reserves used to pay real estate taxes, insurance, repairs, leasing costs and capital improvements. At December 31, 2017 and 2016, the Company had restricted cash of $3.5 million and $2.6 million, respectively, which is included in other assets on the consolidated balance sheets.

Fair Value Measurement: The Company determines fair value in accordance with Accounting Standards Codification (“ASC”) 820-10-05 for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

Assets and liabilities disclosed at fair values are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are defined by ASC 820-10-35, are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities. Determining which category an asset or liability falls within the hierarchy requires significant judgment, and the Company evaluates its hierarchy disclosures each quarter. The three-tier fair value hierarchy is as follows:

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting management’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Income Taxes: The Company is organized and conducts its operations to qualify as a REIT for Federal income tax purposes. Accordingly, the Company is generally not subject to Federal income taxation on the portion of its distributable income that qualifies as REIT taxable income, to the extent that it distributes at least 90% of its REIT taxable income to its stockholders and complies with certain other requirements as defined in the Code.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company also participates in certain activities conducted by entities which elected to be treated as taxable subsidiaries under the Code. As such, the Company is subject to federal, state, and local taxes on the income from these activities.

The Company accounts for income taxes under the asset and liability method as required by the provisions of ASC 740-10-30. Under this method, deferred tax assets and liabilities are established based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

ASC 740-10-65 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-65, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740-10-65 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of December, 2017 and 2016, the Company had determined that no liabilities are required in connection with unrecognized tax positions. As of December 31, 2017, the Company’s tax returns for the prior three years are subject to review by the Internal Revenue Service. Any interest and penalties would be expensed as incurred. The recently enacted Tax Cuts and Jobs Act (the “Act”) is a complex revision to the U.S. federal income tax laws with impacts on different categories of taxpayers and industries, and will require subsequent rulemaking and interpretation in a number of areas. The long-term impact of the Act on the overall economy, government revenues, our tenants, our Company, and the real estate industry cannot be reliably predicted at this time. Furthermore, the Act may impact certain of our tenants’ operating results, financial condition, and future business plans. There can be no assurance that the Act will not impact our operating results, financial condition, and future business operations.

Concentrations of Credit Risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, which from time-to-time exceed the federal depository insurance coverage. Beginning January 1, 2013, all noninterest bearing transaction accounts deposited at an insured depository institution are insured by the Federal Deposit Insurance Corporation up to the standard maximum deposit insurance amount of $250,000. Management believes that the Company is not exposed to any significant credit risk due to the credit worthiness of the financial institutions.

Contractual rent of $9.7 million, derived from five leases with the City of New York, for the year ended December 31, 2017, represented 22% of the Company’s total contractual rental income.

Stock-Based Compensation: The Company has a stock-based compensation plan, which is described below in Note 6. The Company accounts for stock- based compensation in accordance with ASC 718, which establishes accounting for stock-based awards. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is expensed at the grant date (for the portion that vests immediately) or ratably over the respective vesting periods.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In February 2017, the FASB issued ASU No. 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU 2017-05 was issued to clarify the scope of Subtopic 610-20 and to add guidance for partial sales of nonfinancial assets, including partial sales of real estate. ASU 2017-05 clarifies the scope of Subtopic 610-20 by defining the term “in substance nonfinancial asset.” If substantially all of the fair value of the assets (recognized and unrecognized) promised to a counterparty in a contract is concentrated in nonfinancial assets, a financial asset in the same arrangement would still be considered part of an “in substance nonfinancial asset”. Additionally, ASU 2017-05 indicates an entity should identify each distinct nonfinancial asset (e.g., real estate and inventory) or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. ASU 2017-05 requires an entity to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when two criteria are met: 1) the entity does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Topic 810, and 2) the entity transfers control of the asset in accordance with Topic 606. The effective date and transition requirements of ASU 2017-05 are the same as Topic 606. The amendments are effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The adoption of ASU 2017-05 is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805) - Clarifying the Definition of a Business.” ASU 2017-01 provides new guidance that changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets is not a business. ASU 2017-01 also requires a business to include at least one substantive process. ASU 2017-01 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption was permitted. The Company evaluated the impact ASU 2017-01 will have on its consolidated financial statements as the new standard will reduce the number of future real estate acquisitions accounted for as a business combination and therefore, reduce the amount of acquisition costs that will be expensed. The adoption of ASU 2017-01 will result in a reduction of expensed acquisition costs and a corresponding increase to net income.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230) - Restricted Cash.” ASU 2016-18 updates Topic 230 to require cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total cash amounts on the statement of cash flows. Consequently, transfers between cash and restricted cash will not be presented as a separate line item in the operating, investing or financing sections of the cash flow statement. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years and should be applied retrospectively. Early adoption was permitted. The adoption of ASU 2016-18 is not expected to have a material impact on the Company’s consolidated financial position or cash flows.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments are intended to reduce diversity in practice. The ASU contains additional guidance clarifying when an entity should separate cash receipts and cash payments and classify them into more than one class of cash flows (including when reasonable judgment is required to estimate and allocate cash flows) versus when an entity should classify the aggregate amount into one class of cash flows on the basis of predominance. The amendments are effective for public business entities for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption was permitted. The adoption of ASU 2016-15 is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 requires all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) to be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits, and assess the need for a valuation allowance, regardless of whether the benefits reduce taxes payable in the current period. Off-balance sheet accounting for net operating losses stemming from excess tax benefits would no longer be required and instead such net operating losses would be recognized when they arise. Existing net operating losses that are currently tracked off balance sheet would be recognized, net of a valuation allowance if required, through an adjustment to opening retained earnings in the period of adoption. ASU 2016-09 also requires excess tax benefits to be classified along with other income tax cash flows as an operating activity in the statement of cash flows. The amendments are effective for public business entities for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The adoption of ASU 2016-09 did not have a material impact on the Company’s consolidated financial statements.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323) - Simplifying the Transition to the Equity Method of Accounting.” ASU 2016-07 requires an investor to initially apply the equity method of accounting from the date it qualifies for that method, such as the date the investor obtains significant influence over the operating and financial policies of an investee. It eliminates the previous requirement to retroactively adjust the investment and record a cumulative catch up for the periods that the investment had been held, but did not qualify for the equity method of accounting. ASU 2016-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively to increases in the level of ownership interest or degree of influence that result in the application of the equity method. The adoption of ASU 2016-07 did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic No. 842).” ASU 2016-02 requires lessees to recognize at the commencement date, a lease liability, which is the lessee’s obligation to make lease payments arising from a lease and measure it on a discounted basis. A lessee must recognize an asset when it represents a lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. ASU 2016-02 is effective for fiscal periods and interim periods within those fiscal periods beginning after December 15, 2018. Early adoption is permitted. The adoption of ASU 2016-02 is not expected to have a material impact on the Company’s consolidated financial statements. As a lessee, the Company is a party to an office lease with future lease obligations aggregating to $838,694, as of December 31, 2017, for which the Company expects to record right-of-use assets upon the adoption of ASU 2016-02.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 is intended to improve the recognition and measurement of financial instruments. The new guidance requires equity investments, except for those accounted for under the equity method of accounting, or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or accompanying notes to the financial statements. The new guidance eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. Under ASU 2016-01, a reporting company will be required to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. ASU 2016-01 is effective for public business entities for fiscal periods and interim periods within those fiscal periods beginning after December 15, 2017. The adoption of ASU 2016-01 is not expected to have a material impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration an entity expects to receive for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. ASU 2014-09 does not apply to the Company’s lease revenues but will apply to reimbursed tenant costs. Additionally, this guidance modifies disclosures regarding the nature, timing, amount and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 for all entities by one year, until fiscal years beginning after December 15, 2017, with early adoption permitted but not before fiscal years beginning after December 15, 2016. Entities may adopt ASU 2014-09 using either a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients or a modified retrospective approach with the cumulative effect recognized at the date of adoption. The Company believes the majority of its revenue falls outside the scope of this guidance and does not anticipate any significant changes to the timing of the Company’s revenue recognition. The Company intends to implement the standard retrospectively, with the cumulative effect recognized in retained earnings at the date of application.

3. REAL ESTATE: The changes in real estate for the years ended December 31, 2017 and 2016 are as follows (in thousands):

2017 2016 Balance at beginning of year $ 474,573 $ 442,765 Property acquisitions 39,190 25,294 Improvements 8,423 6,514

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The changes in accumulated depreciation, exclusive of amounts relating to equipment, transportation equipment, and furniture and fixtures, for the years ended December 31, 2017 and 2016 are as follows (in thousands):

2017 2016 Balance at beginning of year $ 45,252 $ 36,412 Depreciation for year 9,884 8,840 Balance at end of year $ 55,136 $ 45,252

Cherry Hill, New Jersey On July 27, 2017, the Company acquired a 109,771 square-foot distribution and installation training building in Cherry Hill, New Jersey for $7.6 million. The property is leased to Sovereign Distributors, Inc. (d/b/a Avalon Flooring) for a term that expires on September 30, 2031. The purchase was financed through the Company’s secured revolving credit facility with Key Bank.

Montgomery, New York On August 31, 2017, the Company acquired a 248,370 square-foot warehouse/distribution facility in Montgomery, New York for $36.2 million. The property is leased to FedEx Ground Package System, Inc. for a term that expires on February 28, 2027. The purchase was financed through the Company’s secured revolving credit facility with Key Bank.

East New York, Brooklyn, New York: On May 10, 2016, the Company acquired a 57,786 square foot warehouse/garage building in East New York, Brooklyn, New York for $10.0 million. The property is currently leased to the City of New York (DCAS) for the benefit of the Department of Sanitation for a term that expires on December 31, 2025. The purchase was financed through the Company’s secured revolving credit facility with Key Bank.

Newark, Delaware: On June 1, 2016, the Company acquired a 208,656 square foot warehouse distribution facility in Newark, Delaware for $17.0 million. The property is currently leased to Valassis Communications, Inc. for a term that expires on April 30, 2025. The purchase was financed through the Company’s secured revolving credit facility with Key Bank.

Purchase Price Allocations: The purchase prices of the above acquisitions were allocated to the acquired assets and assumed liabilities based on their estimated fair values at the date of acquisition.

The following table summarizes the Company’s allocation of the purchase prices of assets acquired and liabilities assumed during 2017 and 2016 (in thousands):

2017 2016 Land $ 5,927 $ 5,792 Building and Improvements 33,263 19,502 Acquired lease intangibles assets, net 3,059 674 Other assets and costs 1,575 1,070 Total Consideration $ 43,824 $ 27,038

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 4. MORTGAGE NOTES PAYABLE: The following table sets forth a summary of the Company’s mortgage notes payable (in thousands):

Principal Principal Outstanding as of Outstanding as of Loan Interest Rate December 31, 2017 December 31, 2016 Maturity Athene Annuity & Life Company 3.00% $ 15,000 $ 15,000 3/1/2018 Genworth Life Insurance Company 3.20% 26,574 27,424 4/30/2018 Hartford Accident & Indemnity Company 5.20% 6,000 9,000 3/1/2020 People’s United Bank 5.23% 2,249 2,323 10/1/2020 People’s United Bank 4.18% 15,500 15,500 10/15/2024 American International Group 4.05% 233,100 233,100 3/1/2025 Allstate Corporation 4.00% 39,100 39,100 4/1/2025 United States Life Insurance Company 3.82% 39,000 — 1/1/2028 Subtotal 376,523 341,447 Unamortized loan costs (6,329) (5,771) Unamortized premiums — 18 Total $ 370,194 $ 335,694

American International Group Loan Agreement: On February 20, 2015 (the “Closing Date”), the Operating Partnership refinanced the current outstanding debt on certain properties and placed new financing on others by entering into a loan agreement (the “AIG Loan Agreement”) with American General Life Insurance Company, the Variable Life Insurance Company, The United States Life Insurance Company in the City of New York, American Home Assurance Company and Commerce and Industry Insurance Company.

The AIG Loan Agreement provides a secured loan in the principal amount of $233.1 million (the “AIG Loan”). The AIG Loan is a 10-year term loan that requires interest only payments at the rate of 4.05% per annum. During the period from April 1, 2015, to February 1, 2025, payments of interest only will be payable in arrears with the entire principal balance plus any accrued and unpaid interest due and payable on March 1, 2025. The Operating Partnership’s obligation to pay the interest, principal and other amounts under the Loan Agreement are evidenced by the secured promissory notes executed on the Closing Date (the “AIG Notes”). The AIG Notes are secured by certain mortgages encumbering 28 properties in New York, New Jersey and Connecticut. Using the proceeds available under the AIG Loan, the Operating Partnership repaid approximately $199.9 million of its outstanding indebtedness and fees including (i) $68.6 million to John Hancock Life Insurance Company, (ii) $56.0 million to Capital One, N.A., (iii) $50.2 million to Hartford Accident and Indemnity Company and (iv) $25.1 million to United States Life Insurance Company thereby paying off and terminating these obligations.

Allstate Loan Agreement: On March 13, 2015, in connection with the acquisition of six properties in Piscataway, NJ, the Operating Partnership closed on a $39.1 million cross-collateralized mortgage (the “Allstate Loan”) from Allstate Life Insurance Company, Allstate Life Insurance Company of New York and American Heritage Life Insurance Company. The Allstate Loan Agreement provided a secured facility with a 10-year term loan. During the first three years of the term of the loan, it requires interest only payments at the rate of 4% per annum. Following this period until the loan matures on April 1, 2025, payments will be based on a 30-year amortization schedule.

Athene (formerly Aviva) Loan Agreement: On February 22, 2013, a wholly owned subsidiary of the Operating Partnership, entered into a $15.0 million mortgage note with Aviva Life and Annuity Company. The loan bore interest at a rate of 3% per annum and required monthly payments of interest. The principal was payable when the loan matured on March 1, 2018. The principal payment at maturity was financed through the Operating Partnership’s secured revolving credit facility with Key Bank.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Genworth Loan Agreement: On April 3, 2013, four wholly owned subsidiaries of the Operating Partnership (collectively, the “Genworth Borrower”) entered into mortgage loan agreements with Genworth Life Insurance Company (the “Genworth Lender”), in the aggregate principal amount of $29.5 million. The loan bears interest at a rate of 3.20% and matures on April 30, 2018. The loan is evidenced by promissory notes of $14.4 million (the “New York Note”) and $15.1 million (the “New Jersey Note”), hereinafter referred to as the (“Notes”).

The New York Note required 12 monthly payments of interest only starting June 1, 2013. Beginning June 1, 2014, monthly payments of principal and interest in the amount of approximately $70,000 are required until the New York Note becomes due and payable.

The New Jersey Note required 12 monthly payments of interest starting June 1, 2013. Beginning June 1, 2014, monthly payments of principal and interest in the amount of approximately $73,000 are required until such New Jersey Note becomes due and payable.

The Notes are secured by, among other things, property owned by the Genworth Borrower. The proceeds from the loans were used to satisfy in full obligations to John Hancock Life Insurance Company under a prior mortgage agreement.

The Genworth Borrower and the Operating Partnership agreed to indemnify the Genworth Lender against certain claims and guaranty certain obligations of the Genworth Borrower pursuant to certain Environmental Indemnity Agreements. Certain obligations under the loan agreements are also guaranteed by the Operating Partnership.

People’s United Bank Loan Agreement: In connection with the acquisition of an 84,000 square foot parking lot in Long Island City, Queens, NY, a wholly owned subsidiary of the Operating Partnership entered into a mortgage loan agreement with People’s United Bank in the aggregate amount of $15.5 million. The loan has a ten-year term and bears interest at 4.18%. Payments for the first seven years are interest only. Payments over the remaining three years of the term are based on a 25 year amortization schedule, with a balloon payment of $14.4 million due at maturity.

United States Life Insurance Company Loan Agreement:

On December 20, 2017, (the “Closing Date”) four wholly owned subsidiaries of the Operating Partnership (collectively, the “U.S. Life Borrowers”) entered in a loan agreement (the “U.S. Life Loan Agreement”) with the United States Life Insurance Company in the City of New York (the “Lender”).

The U.S. Life Loan Agreement provides for a secured loan facility in the principal amount of $39.0 million (the “Loan Facility”). The Loan Facility is a 10-year term loan that requires interest only payments at the rate of 3.82% per annum. During the period from February 1, 2018 to December 1, 2027, payments of interest only on the principal balance of the Note (as defined below) will be payable in arrears, with the entire principal balance due and payable on January 1, 2028, the loan maturity date. Subject to certain conditions, the U.S Life Borrowers may prepay the outstanding loan amount in whole on or about January 1, 2022, by providing advance notice of the prepayment to the Lender and remitting a prepayment premium equal to the greater of 1% of the then outstanding principal amount of the Loan Facility or the then present value of the Note. The U.S Life Borrowers paid the Lender a one-time application fee of $50,000 in connection with the Loan Facility. The U.S. Life Borrowers obligation to pay the principal, interest and other amounts under the Loan Facility are evidenced by the secured promissory note executed by the U.S. Life Borrowers as of the Closing Date (the “Note”). The Note is secured by certain mortgages encumbering the U.S Life Borrowers’ properties (a total of four properties) located in New York, New Jersey and Delaware. In the event of default, the initial rate of interest on the Note will increase to the greatest of (i) 18% per annum, (ii) a per annum rate equal to 4% over the prime established rate, or (iii) a per annum rate equal to 5% over the original interest rate, all subject to the applicable state or federal laws. The Note contains other terms and provisions that are customary for instruments of this nature. Approximately $37.5 million from the loan proceeds were used to reduce the Company’s obligation under its secured revolving credit facility with Key Bank.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document certain loan assumption and modification documents to facilitate the acquisition of the properties acquired. Below is a summary of the material terms of the arrangement with each lender.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document People’s United Bank Loan: Wu/LH 15 Progress Drive L.L.C., a wholly owned subsidiary of the Operating Partnership, entered into a $2.7 million mortgage loan with the bank, on September 30, 2010. The loan is secured by the properties located at 15 Progress Road and 30 Commerce Drive, Shelton, Connecticut and bears interest at a rate of 5.23%. The Operating Partnership is required to make monthly payments of principal and interest until the loan matures on October 1, 2020. The obligations under this loan agreement are also guaranteed by GTJ REIT.

Hartford Accident & Indemnity Loan: In connection with the April 2014 acquisition of a property in Windsor Locks, CT, a wholly owned subsidiary of the Operating Partnership assumed a $9.0 million mortgage that bears interest at 6.07%. The payments are interest only. A principal payment of $3.0 million was made in February 2017, and the interest rate was reduced to 5.20%. The balance of the loan matures in March 2020.

In connection with the loan agreements, the Company is required to comply with certain covenants. As of December 31, 2017, the Company was in compliance with all covenants.

Principal Repayments: Scheduled principal repayments during the next five years and thereafter are as follows (in thousands):

2018 $ 42,108 2019 789 2020 8,825 2021 852 2022 1,157 Thereafter 322,792 Total $ 376,523

5. SECURED REVOLVING CREDIT FACILITY: Key Bank Loan Agreement: On December 2, 2015, the Operating Partnership entered into a Credit Agreement (the “Credit Agreement”) with Keybank National Association and Keybanc Capital Markets Inc., as lead arranger (collectively, “Key Bank”). The Credit Agreement contemplated a $50.0 million revolving line of credit facility, with an initial term of two years, with a one-year extension option, subject to certain other customary conditions.

Loans drawn down by the Operating Partnership under the facility will need to specify, at the Operating Partnership’s option, whether they are Base Rate loans or LIBOR Rate loans. The Base Rate loans will bear a base rate of interest calculated as the greater of: (a) the fluctuating annual rate of interest announced from time to time by Key Bank as its “prime rate,” (b) 0.5% above the rate announced by the Federal Reserve Bank of Cleveland (or Federal Funds Effective Rate), or (c) LIBOR plus 100 basis points (bps). The LIBOR Rate loans will bear interest at a rate of LIBOR rate plus 300 to 350 bps, depending upon the overall leverage of the properties. Each revolving credit loan under the facility will be evidenced by separate promissory note(s). The Operating Partnership agreed to pay to Key Bank a facility unused fee in the amount calculated as 0.30% for usage less than 50% and 0.20% for usage 50% or greater, calculated as a per diem rate, multiplied by the excess of the total commitment over the outstanding principal amount of the loans under the facility at the time of the calculation. Key Bank has the right to reduce the amount of loan commitments under the facility provided, among other things, they give an advance written notice of such reductions and that in no event the total commitment under the facility is less than $25.0 million. The Operating Partnership may at its option convert any of the revolving credit loans into a revolving credit loan of another type which loan will then bear interest as a base rate loan or a LIBOR rate loan, subject to certain conversion conditions. In addition, Key Bank also agreed to extend, from time to time, as the Operating Partnership may request, upon an advance written notice, swing loans in the total amount not to exceed $5.0 million. Such loans, if and when extended, will also be evidenced by separate promissory note(s).

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Due to the revolving nature of the facility, amounts prepaid under the facility may be borrowed again. The Credit Agreement contemplates (i) mandatory prepayments by the Operating Partnership of any borrowings under the facility in excess of the

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document total allowable commitment, among other events, and (ii) optional prepayments, without any penalty or premium, in whole or in part, subject to payments of any amounts due associated with the prepayment of LIBOR rate contracts.

The Operating Partnership’s obligations under the facility are secured by a first priority lien and security interest to be held by the agents for Key Bank, in certain of the property, rights and interests of the Operating Partnership, the Guarantors (as defined below) and their subsidiaries now existing and as may be acquired (collectively, the “Collateral”). GTJ REIT, Inc., GTJ GP, LLC, and each party to the Guaranty are collectively referred to as the “Guarantors.” The parties to the Credit Agreement also entered into several side agreements, including, the Joinder Agreements, the Assignment of Interests, the Acknowledgments, the Mortgages, the Guaranty, and other agreements and instruments to facilitate the transactions contemplated under the Credit Agreement. Such agreements contain terms and provisions that are customary for instruments of this nature.

The Operating Partnership’s continuing ability to borrow under the facility will be subject to its ongoing compliance with various affirmative and negative covenants, including, among others, with respect to liquidity, minimum occupancy, total indebtedness and minimum net worth. The Credit Agreement contains events of default and remedies customary for loan transactions of this sort including, among others, those related to a default in the payment of principal or interest, a material inaccuracy of a representation or warranty, and a default with regard to performance of certain covenants. The Credit Agreement includes customary representations and warranties of the Operating Partnership which must continue to be true and correct in all material respects as a condition to future draws. In addition, the Credit Agreement also includes customary events of default (in certain cases subject to customary cure), in the event of which, amounts outstanding under the facility may be accelerated.

On July 27, 2017, the Operating Partnership increased its secured line of credit facility with Key Bank from $50.0 million to $88.0 million. The $38.0 million increase may only be used for the acquisition of certain properties specified in the second amendment to the Key Bank Credit Agreement (including earnest money deposits) and the payment of customary closing costs. In addition, the maturity date under the Credit Agreement was extended from December 1, 2017 to February 28, 2018, with an additional extension option to June 30, 2019, subject to the satisfaction of certain conditions.

On December 20, 2017, the Operating Partnership refinanced certain properties acquired with its secured line of credit facility with Key Bank. As of result, the secured line of credit facility with Key Bank was reduced to $50.5 million, with the excess over $50.0 million only available for the purchase of a specified property.

On February 27, 2018, the Operating Partnership increased its secured line of credit facility with Key Bank from $50.5 million to $55.0 million. In addition, the Operating Partnership exercised its option to extend the maturity date of the secured revolving line of credit facility with Key Bank to June 30, 2019.

The contemplated uses of proceeds under the Credit Agreement include, among others, repayment of indebtedness, funding of acquisitions, development and capital improvements, as well as working capital expenditures. Outstanding borrowings under the secured revolving credit facility with Key Bank as of December 31, 2017 and December 31, 2016 were $35.9 million and $27.8 million, respectively, which are considered LIBOR Rate loans.

In connection with the Credit Agreement, the Operating Partnership is required to comply with certain covenants. As of December 31, 2017, the Operating Partnership was in compliance with all covenants.

6. STOCKHOLDERS’ EQUITY: Preferred Stock: The Company is authorized to issue 10,000,000 shares of preferred stock, $.0001 par value per share. Voting and other rights and preferences may be determined from time to time by the Board of Directors (the “Board of Directors” or “Board”) of the Company. The Company has designated 500,000 shares of preferred stock as Series A preferred stock, $.0001 par value per share. In addition, the Company has designated 6,500,000 shares of preferred stock as Series B preferred stock, $.0001 par value per share. There are no voting rights associated with the Series B preferred stock. There was no Series A preferred stock or Series B preferred stock outstanding as of December 31, 2017, or December 31, 2016.

Common Stock:

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company is authorized to issue 100,000,000 shares of common stock, $.0001 par value per share. As of December 31, 2017, and 2016, the Company had a total of 13,594,125 and 13,618,884 shares issued and outstanding, respectively.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Dividend Distributions: The following table presents dividends declared by the Company on its common stock during 2017 and 2016:

Record Payment Dividend Declaration Date Date Date Per Share March 24, 2016 April 10, 2016 April 15, 2016 0.09 June 09, 2016 June 30, 2016 July 15, 2016 0.09 August 09, 2016 September 30, 2016 October 11, 2016 0.09 November 08, 2016 December 31, 2016 January 13, 2017 0.09 January 31, 2017 March 31, 2017 April 12, 2017 0.10 March 23, 2017 April 4, 2017 April 14, 2017 0.11 (1) June 08, 2017 June 30, 2017 July 14, 2017 0.10 August 08, 2017 September 30, 2017 October 13, 2017 0.10 November 07, 2017 December 31, 2017 January 15, 2018 0.10

(1) Represents a supplemental 2016 dividend.

In order to qualify as a REIT, the Company must distribute at least 90% of its taxable income and must distribute 100% of its taxable income in order not to be subject to corporate federal income taxes on retained income. The Company anticipates it will distribute all of its taxable income to its stockholders. Because taxable income differs from cash flow from operations due to non-cash revenues or expenses (such as depreciation), in certain circumstances, the Company may generate operating cash flow in excess of its distributions or, alternatively, may be required to borrow to make sufficient distribution payments.

Stock Based Compensation: On June 11, 2007, the Board of Directors approved the Company’s 2007 Incentive Award Plan (the “2007 Plan”). The 2007 Plan covered directors, officers, key employees and consultants of the Company. The purposes of the 2007 Plan was to further the growth, development, and financial success of the Company and to obtain and retain the services of the individuals considered essential to the long-term success of the Company. The 2007 Plan provided for awards in the form of restricted shares, incentive stock options, non-qualified stock options and stock appreciation rights. The aggregate number of shares of common stock which may have been awarded under the 2007 Plan was 1,000,000 shares. The 2007 Plan expired by its terms on June 11, 2017. The 2017 Incentive Award Plan (the “2017 Plan”) was adopted by the Board and became effective on April 24, 2017, subject to the approval of the Company’s stockholders which was obtained on June 8, 2017. The 2017 Plan has intended purposes to further the growth, development, and financial success of the Company and to obtain and retain the services of those individuals considered essential to the long-term success of the Company. The 2017 Plan provides for awards in the form of stock, stock units, incentive stock options, non-qualified stock options and stock appreciation rights. The aggregate number of shares of common stock which may be awarded under the 2017 Plan is 2,000,000 shares. As of December 31, 2017, the Company had 2,000,000 shares available for future issuance under the 2017 Plan. Dividends paid on restricted shares are recorded as dividends on shares of the Company’s common stock whether or not they are vested. In accordance with ASC 718-10-35, the Company measures the compensation costs for these shares as of the date of the grant and the expense is recognized in earnings, at the grant date (for the portion that vest immediately) and then ratably over the respective vesting periods.

On February 7, 2008, 55,000 options were granted to non-employee directors and vested immediately and 200,000 options were granted to key officers of the Company and had a three year vesting period. On June 9, 2011, the Company granted 10,000 options to a non-employee director which vested immediately. On November 8, 2016, 200,000 options were granted to key officers of the company and had a three-year vesting period. No options were exercised during 2016. In 2017, 200,000 options were exercised. All options expire ten years from the date of grant. For the year ended December 31, 2017, the stock compensation expense relating to these stock options was approximately $126,000.

On April 30, 2012, and June 7, 2012, the Company issued an aggregate of 55,149 and 5,884 restricted shares of common stock, respectively, under the 2007 Plan. The shares issued on June 7, 2012 have a value of approximately $40,000 (based upon an estimated value of $6.80 per share), were granted to non-management members of the Board of Directors, and vested immediately. The shares issued on April 30, 2012 have a value of approximately $375,000 (based upon an estimated value of $6.80 per share), were granted to certain executives of the Company, and vest ratably over a four year period. One fourth of the shares granted to the

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document executives vested on the grant date and one fourth vested each year on the following dates: April 30, 2013, April 30, 2014, and April 30, 2015.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document On March 21, 2013, the Company issued an aggregate of 50,002 restricted shares of common stock, with a value of approximately $320,000, under the 2007 Plan. A total of 3,126 of these shares, with a value of approximately $20,000 (based upon an estimated value of $6.40 per share), were granted to non-management members of the Board of Directors, and vested immediately. The remaining 46,876 shares, with a value of approximately $300,000 (based upon an estimated value of $6.40 per share), were granted to certain executives of the Company, and vested ratably over a four year period. One fourth of the shares granted to the executives vested on the grant date and one fourth vested each year on the following dates: March 21, 2014, March 21, 2015, and March 21, 2016.

On June 6, 2013, the Company issued an aggregate of 9,378 restricted shares of common stock, with a value of approximately $60,000 (based upon an estimated value of $6.40 per share), under the 2007 Plan. These shares were granted to non- management members of the Board of Directors and vested immediately.

On June 4, 2014, 44,704 restricted shares of common stock, with a value of approximately $304,000 (based upon an estimated value of $6.80 per share) were granted under the 2007 Plan to certain executives of the Company. One sixth of the shares vested immediately upon issuance and the remaining shares vest in equal installments on the next five anniversary dates of the grant.

On June 19, 2014, the Company issued an aggregate of 8,820 restricted shares of common stock with a value of approximately $60,000 (based upon an estimated value of $6.80 per share) under the 2007 Plan to non-management members of the Board of Directors. The shares vested immediately upon issuance.

On March 26, 2015, the Company issued 43,010 restricted shares of common stock with a value of approximately $400,000 (based upon an estimated value of $9.30 per share) under the 2007 Plan to certain executives of the Company. One sixth of the shares vested immediately upon issuance and the remaining shares vest in equal installments on the next five anniversary dates of the grant.

On June 19, 2015, the Company issued an aggregate of 16,436 restricted shares of common stock with a value of approximately $175,000 (based upon an estimated value of $10.65 per share) under the 2007 Plan to non-management members of the Board of Directors. The shares vested immediately upon issuance.

On March 24, 2016, the Company issued 47,043 restricted shares of common stock with a value of approximately $489,250 (based upon an estimated value of $10.40 per share) under the 2007 Plan to certain executives of the Company. One sixth of the shares vested immediately upon issuance and the remaining shares vest in equal installments on the next five anniversary dates of the grant.

On June 9, 2016, the Company issued an aggregate of 14,424 restricted shares of common stock with a value of approximately $150,000 (based upon an estimated value of $10.40 per share) under the 2007 Plan to non-management members of the Board of Directors. The shares vested immediately upon issuance.

On May 22, 2017, the Company issued an aggregate of 34,482 restricted shares of common stock with a value of approximately $400,000 (based upon an estimated value of $11.60 per share) under the 2007 Plan to certain executives of the Company. One-tenth of the shares vested immediately upon issuance and the remaining shares vest in equal installments on the next nine anniversary dates of the grant.

On May 31, 2017, the Company issued an aggregate of 7,929 shares of common stock under the 2007 Plan to certain current and former executives of the Company in connection with the exercise of previously issued options. The shares vested immediately upon issuance.

On June 8, 2017, the Company issued an aggregate of 15,516 restricted shares of common stock with a value of approximately $180,000 (based upon an estimated value of $11.60 per share) under the 2007 Plan to non-management members of the Board. The shares vested immediately upon issuance.

The Board of Directors has determined the value of a share of common stock to be $11.65 based on a valuation completed March 27, 2018, with the assistance of an independent third-party for the purpose of valuing shares of the Company’s common stock pursuant to the 2017 Plan. This value is not necessarily indicative of the fair market value of a share of the Company’s common stock.

For the years ended December 31, 2017 and 2016, the Company’s total stock compensation expense was approximately $718,000 and $539,000, respectively. As of December 31, 2017, there was approximately $433,000 of unamortized stock compensation related to restricted stock. The cost is expected to be recognized over a weighted average period of 1.9 years.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document At December 31, 2017, 220,000 stock options were outstanding, 40,000 of which were exercisable, and 442,787 shares of restricted stock were outstanding, 402,406 of which were vested.

The following is a summary of restricted stock activity: Weighted Average Grant Date Fair Shares Value Non-vested shares outstanding as of December 31, 2016 44,858 $ 9.93 New shares issued through December 31, 2017 57,927 11.60 Vested (62,404) 11.03 Non-vested shares outstanding as of December 31, 2017 40,381 $ 10.73

The following is an amortization schedule of the total unamortized shares of restricted stock outstanding as of December 31, 2017: Non-vested Shares Amortization Schedule Number of Shares 2018 17,673 2019 10,202 2020 5,235 2021 2,731 2022 1,785 2023 1,291 Thereafter 1,464 Total Non-vested Shares 40,381

7. EARNINGS (LOSS) PER SHARE: In accordance with ASC 260-10-45, basic earnings per common share (“Basic EPS”) is computed by dividing the net income by the weighted-average number of common shares outstanding. Diluted earnings per common share (“Diluted EPS”) is computed by dividing net income by the weighted-average number of common shares and dilutive common share equivalents then outstanding. There were 22,335 and 31,199 common share equivalents in 2017 and 2016, respectively, presented in diluted earnings per share.

The following table sets forth the computation of basic and diluted earnings per share information for the years ended December 31, 2017 and 2016 (in thousands, except share and per share data):

2017 2016 Numerator: Net income attributable to common stockholders $ 2,349 $ 2,634 Denominator: Weighted average common shares outstanding – basic 13,646,345 13,858,540 Weighted average common shares outstanding – diluted 13,668,680 13,889,739 Basic and Diluted Per Share Information: Net income per share – basic and diluted $ 0.17 $ 0.19

8. RELATED PARTY TRANSACTIONS: Paul Cooper, the Chairman and Chief Executive Officer of the Company, and Louis Sheinker, the President, Secretary and Chief Operating Officer of the Company, each hold passive, minority ownership interests in a real estate brokerage firm, The Rochlin Organization. The firm acted as the exclusive broker for one of the Company’s properties. In 2013, the firm introduced a new tenant to the property, resulting in the execution of a lease agreement and a subsequent lease modification. The firm earned aggregate brokerage cash commissions of approximately $60,000 based on a total lease value of $1,015,000. In January 2014, the new tenant expanded further which resulted in approximately $95,000 of brokerage commissions on the additional lease modification value of $2,100,000. In November 2015, the tenant concluded negotiations to expand by an additional 35,000 square feet which resulted in approximately $12,000 of brokerage commissions on the additional lease modification value of $200,000. In December 2016, the tenant concluded

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document negotiations to expand by an additional 35,000 square feet which resulted in approximately $10,000 of brokerage commissions on the additional lease modification value of $332,000.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company’s executive and administrative offices, located at 60 Hempstead Avenue, West Hempstead, New York, are being leased from Lighthouse Sixty, L.P., a partnership of which Paul Cooper and Louis Sheinker are managing members of the general partner. The lease agreement expires in 2020 and has a current annual base rent of approximately $298,000 with aggregate lease payments totaling $1.8 million.

On December 11, 2013, the Company and Jerome Cooper, the former Chairman Emeritus, entered into a separation agreement. The agreement provides for the payment to Mr. Cooper of an aggregate of $360,000; payable in three equal annual installments of $120,000, commencing January 1, 2014. Mr. Cooper passed away on May 20, 2015. Under the terms of the separation agreement, Mr. Cooper’s heirs received the balance of the payments on January 1, 2016.

On November 4, 2014, the Company invested $1.8 million for a limited partnership interest in Garden 1101 Stewart, L.P. (“Garden 1101”). Garden 1101 was formed for the purposes of acquiring a 90,000 square foot office building in Garden City, NY that was converted to a medical office building. The general partners of Garden 1101 include the members of Green Holland Ventures, Paul Cooper and Louis Sheinker. The investment is included in other assets on the consolidated balance sheets. A loss of approximately $198,000 and $399,000 is included in other expenses on the consolidated statement of operations for the years ended December 31, 2017 and December 31, 2016, respectively. On February 9, 2018, the property acquired by Garden 1101 was sold and the Company received an initial distribution from the partnership of $3.7 million. A final distribution is expected to be received in 2018 upon liquidation of the partnership.

9. COMMITMENTS AND CONTINGENCIES: Legal Matters: The Company is involved in lawsuits and other disputes which arise in the ordinary course of business. However, management believes that these matters will not have a material adverse effect, individually or in the aggregate, on the Company’s financial position or results of operations.

Letter of Credit: On November 4, 2015, the Company posted a $957,708 Letter of Credit with Bank of America, N.A., in connection with a performance guarantee to complete certain site improvements at 20 East Halsey Road in Parsippany, New Jersey. The Township of Parsippany-Troy Hills was the beneficiary. The term was for one year plus applicable extensions. On October 18, 2016, the beneficiary issued a resolution releasing the Letter of Credit as the site improvements were satisfactorily completed. The Letter of Credit was cancelled on October 31, 2016.

Divestiture: On February 16, 2012, the Company received a notice from the Joint Industry Board of the Electrical Industry claiming a pension withdrawal liability in the amount of $1.5 million in connection with the divestiture of Shelter Electric. The Company determined the liability was probable and the Company agreed to pay the obligation in monthly installments of approximately $8,000 over a twenty-year term. As of December 31, 2017 and 2016, the present value of this obligation was approximately $1.1 million and $1.2 million, respectively, and is included in other liabilities on the accompanying consolidated balance sheets.

Environmental Matters: As of December 31, 2017, three of the Company’s six former bus depot sites have received final regulatory closure, satisfying outstanding clean-up obligations related to legacy site contamination issues. Three sites continue with on-going cleanup, monitoring and reporting activities. We believe each of the six sites remain in compliance with existing local, state and federal obligations.

10. FAIR VALUE: Fair Value of Financial Instruments: The fair value of the Company’s financial instruments are determined based upon applicable accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document participants at the measurement date. The guidance requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1),

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3).

The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and secured revolving credit facility approximated their carrying value because of the short-term nature based on Level 1 inputs. The fair values of mortgage notes payable and pension withdrawal liability are based on borrowing rates available to the Company, which are Level 2 inputs. The following table summarizes the carrying values and the estimated fair values of the financial instruments (in thousands):

December 31, 2017 December 31, 2016 Carrying Estimated Carrying Estimated Value Value Value Value Financial assets: Cash and cash equivalents $ 8,423 $ 8,423 $ 15,932 $ 15,932 Accounts receivable 159 159 145 145 Financial liabilities: Accounts payable and accrued expenses $ 3,608 $ 3,608 $ 2,833 $ 2,833 Secured revolving credit facility 35,857 35,857 27,775 27,775 Mortgage notes payable 376,523 371,920 341,447 334,756 Pension withdrawal liability 1,131 1,139 1,196 1,178

11. OTHER RETIREMENT BENEFITS: Other Retirement Benefits: The Company sponsors retirement benefits under a defined contribution 401(k) plan which covers all employees who have completed one year of service and are at least 21 years of age. Contributions to this plan and charged to benefit costs for the years ended December 31, 2017 and 2016 were approximately $49,000 and $42,000, respectively. In November 2016, the Board of Directors of the Company approved the implementation of a profit sharing contribution component to its existing 401(k) plan. Contributions to this component of the plan and charged to benefits costs for the year ended December 31, 2017 were approximately $184,000, consisting of approximately $90,000 and $94,000 attributable to the plan years ended December 31, 2017 and December 31, 2016, respectively.

12. INCOME TAXES: The Company elected to be taxed as a REIT under the Code. A REIT will generally not be subject to federal income taxation on that portion of its income that qualifies as REIT taxable income, to the extent that it distributes at least 90% of its taxable income to its stockholders and complies with certain other requirements. It is management’s intention to adhere to these requirements and maintain the Company’s REIT status. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable minimum tax and may not be able to qualify as a REIT for four subsequent taxable years). Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries are subject to federal, state, and local income taxes.

The recently enacted Tax Cuts and Jobs Act (the “Act”) is a complex revision to the U.S. federal income tax laws with impacts on different categories of taxpayers and industries, and will require subsequent rulemaking and interpretation in a number of areas. The long-term impact of the Act on the overall economy, government revenues, our tenants, our company, and the real estate industry cannot be reliably predicted at this time. Furthermore, the Act may impact certain of our tenants’ operating results, financial condition, and future business plans. There can be no assurance that the Act will not impact our operating results, financial condition, and future business operations.

Income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts and estates are generally subject to tax at preferential rates. Dividends payable by REITs, however, generally are not eligible for the preferential tax rates applicable to qualified dividend income. Although these rules do not adversely affect the taxation of REITs or dividends payable by REITs, to the extent that the preferential rates continue to apply to regular corporate qualified dividends, investors who are individuals, trusts and estates may perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could materially and adversely affect the value of the shares of REITs, including the value of our common stock.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Act signed into law by the President on December 22, 2017 makes significant changes to the Code, including changes that impact REITs and their shareholders, among others. In particular, the Act reduces the maximum corporate tax rate from 35% to 21%. In addition, for tax years beginning before January 1, 2026, the Act permits up to a 20% deduction for individuals, trusts, and estates with respect to their receipt of “qualified REIT dividends”, which are dividends from a REIT that are not capital gain dividends and are not qualified dividend income. This provides closer parity between the treatment under the new law of ordinary REIT dividends and qualified dividends. These changes generally result in an effective maximum U.S. federal income tax rate on such dividends of 29.6%, if the deduction is allowed in full. However, by reducing the corporate tax rate, it is possible that the Act will nevertheless reduce the relative attractiveness to investors (as compared with potential alternative investments) of the generally single level of taxation on REIT distributions. Although certain changes to the Code are generally advantageous to REITs and their shareholders, the full ramifications of the Act remain unclear and will likely remain unclear for an indeterminate period of time. Key provisions of the Act that could impact us and the value of our shares include the following: • temporarily reducing individual U.S. federal income tax rates on ordinary income; the highest individual U.S. federal income tax rate is reduced from 39.6% to 37% (through tax years beginning before January 1, 2026), while eliminating miscellaneous itemized deductions and limiting state and local tax deductions; • reducing the maximum corporate income tax rate from 35% to 21%, which reduces, but does not eliminate, the competitive advantage that REITs enjoy relative to non-REIT corporations; • permitting (subject to certain limitations) a deduction for certain pass-through business income, including, as noted above, dividends received by our stockholders that are not designated by us as capital gain dividends or qualified dividend income, which will allow individuals, trusts, and estates to deduct up to 20% of such amounts, generally resulting in an effective maximum U.S. federal income tax rate of 29.6% on such dividends, if the deduction is allowed in full (through tax years beginning before January 1, 2026); • reducing the highest rate of withholding with respect to our distributions to non-U.S. stockholders that are treated as attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%; • limiting our deduction for net operating losses to 80% of taxable income (prior to the application of the dividends paid deduction), where taxable income is determined without regarding to the net operating loss deduction itself, and generally eliminating net operating loss carrybacks and allowing unused net operating losses to be carried forward indefinitely; • amending the limitation on the deduction of net interest expense for all businesses, other than certain electing real estate businesses (which could adversely affect any of our taxable REIT subsidiaries (each, a “TRS”), including any new TRS that we may form); • expanding the ability of businesses to deduct the cost of certain purchases of property in the year in which such property is purchased; and • eliminating the corporate alternative minimum tax.

The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. Changes to the tax laws, with or without retroactive application, could adversely affect our stockholders or us. We cannot predict how changes in the tax laws might affect our stockholders or us. New legislation, Treasury Regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the federal income tax consequences of such qualification.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Reconciliation between GAAP Income From Continuing Operations and Federal Taxable Income: The following table reconciles GAAP income from continuing operations to taxable income for the years ended December 31, 2017 and 2016 (in thousands):

2017 2016 Net income from operations $ 3,596 $ 4,140 GAAP net loss (income) of taxable subsidiaries 23 (220) GAAP net income from REIT operations 3,619 3,920 Operating expense book deductions greater than tax 1,417 324 Book depreciation in excess of tax depreciation 5,204 5,287 GAAP amortization of intangibles in excess of tax amortization 1,981 2,121 Straightline rent adjustments (468) (621) Acquisition costs capitalized for tax 398 561 (Income) allocable to noncontrolling interest (5,682) (5,181) Estimated taxable income subject to the dividend requirement $ 6,469 $ 6,411

We have determined for income tax purposes that the 2017 and 2016 regular dividends were considered ordinary dividends.

Taxable REIT Subsidiaries: The Company is subject to federal, state, and local income taxes on the income from its Taxable REIT subsidiaries (“TRS”) activities, which include all the discontinued operations of Shelter Express, Inc. and subsidiaries. There were no provisions for (benefit from) income taxes from discontinued operations for the years ended December 31, 2017 and 2016. The TRS entities have approximately $20.0 million of net operating loss carry-forwards and $9.0 million of capital loss carryforwards at December 31, 2017. The Company has recorded a full valuation allowable against the deferred income tax assets as it does not consider realization of such assets to be likely than not. The Company has determined that any changes in the value of the deferred income tax assets would have no impact on the Company’s consolidated financial statements inasmuch as it would be offset by a full valuation allowance.

13. FUTURE MINIMUM RENT SCHEDULE: Future minimum contractual lease payments to be received by the Company (without taking into account straight-line rent or amortization of intangibles) as of December 31, 2017, under operating leases for the next five years and thereafter are as follows (in thousands):

2018 $ 45,756 2019 42,795 2020 39,866 2021 37,648 2022 33,537 Thereafter 118,649 Total $ 318,251

The lease agreements generally contain provisions for the reimbursement of real estate taxes and operating expenses, as well as fixed increases in rent.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 14. SELECTED QUARTERLY DATA (Unaudited): The summarized selected quarterly data for the years ended December 31, 2017 and 2016 are as follows (in thousands except per share data).

Year March 31 June 30 September 30 December 31 2017 Revenues $ 12,928 $ 12,583 $ 13,393 $ 14,268 Net income attributable to common stockholders 709 88 421 1,131 Per common share (basic and diluted)(a) 0.05 0.01 0.03 0.08 2016 Revenues 12,166 12,236 12,691 12,604 Net income attributable to common stockholders 144 853 1,051 586 Per common share (basic and diluted)(a) $ 0.01 $ 0.06 $ 0.08 $ 0.04 (a) Differences between the sum of the four quarterly per share amounts and the annual per share amount are attributable to the effect of the weighted average outstanding share calculations for the respective periods.

15. SUBSEQUENT EVENTS:

Purchase of Securities

On January 22, 2018, MacKenzie Realty Capital Inc. and MacKenzie NY Real Estate 2 Corp. (“Mackenzie”) commenced a tender offer to purchase up to 750,000 shares of the Company’s common stock, par value $0.0001 per share, for cash at a purchase price equal to $6.50 per share. The offer and withdrawal rights expired at 11:59 p.m., Pacific Time, on March 2, 2018. No shares were tendered pursuant to the tender offer.

On January 26, 2018, the Company commenced a self-tender offer to purchase up to 750,000 shares of the Company’s common stock, par value $0.0001 per share, for cash at a purchase price equal to $7.00 per share. The offer and withdrawal rights expired at 12:00 midnight, New York City Time, on March 5, 2018. The Company’s share redemption program (“SRP”) was temporarily suspended during this offer as required by Securities and Exchange Commission Rules. No repurchases of shares were made under the SRP during the offer and for 10 business days thereafter. Pursuant to the self-tender offer, 5,000 shares were tendered and the Company purchased these shares for $35,000 on March 8, 2018. The suspension of the SRP was terminated on March 20, 2018 and thereafter the Company recommenced purchases under the SRP.

Financings

On February 27, 2018, the Company increased its secured revolving credit facility with Key Bank from $50,524,986 to $55,000,000. In addition, the Company exercised its option to extend the maturity date of the credit facility to June 30, 2019.

On February 27, 2018, the Company paid its mortgage note payable with Athene Annuity & Life Company in the amount of $15,000,000 from funds available from its secured revolving credit facility.

On March 21, 2018, the Company refinanced the current outstanding debt on certain properties by entering into a loan agreement with the United States Life Insurance Company in the City of New York. The loan agreement provides for a secured loan facility in the principal amount of $33.0 million. The loan facility is a ten-year term loan that requires interest only payments at the rate of 4.25% per annum on the principal balance for the first five (5) years of the term and principal and interest payments (amortized over a 30-year period) during the second five (5) years of the term. The entire principal balance is due and payable on April 1, 2028, the loan maturity date. The Company used a portion of the proceeds from the loan facility to repay the remaining balance of a mortgage loan from Genworth Life Insurance Company.

Acquisition

On March 6, 2018, the Company purchased a 50% interest in Two CPS Developers LLC (the “Joint Venture”) for $5,250,000. The joint venture owns a 132,650 square foot vacant office building located at 2 Corporate Place South, Piscataway, New Jersey, which is being demolished and will be replaced with a 150,325 square foot state of the art 36-foot clear industrial building. The Company financed the acquisition from funds available from its secured revolving credit facility with Key Bank.

On February 9, 2018, the Company received a distribution of $3.7 million from Garden 1101 Stewart, LP, representing its initial share of the proceeds from the sale of the partnership assets.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures: We maintain a system of disclosure controls and procedures (as defined in Rule 15d-15(e) under the Exchange Act). As required by Rule 15d-15(b) under the Exchange Act, management, under the direction of our Company’s Chief Executive Officer and Chief Financial Officer, reviewed and performed an evaluation of the effectiveness of design and operation of our disclosure controls and procedures (as defined in Rule 15d-15(e) under the Exchange Act) as of December 31, 2017, the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective to provide reasonable assurance that (i) information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting: Our management is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rule 15d-15(f) of the Exchange Act). There are inherent limitations to the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even effective internal controls can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal controls may vary over time.

We have assessed the effectiveness of our internal control over financial reporting (as defined in Rule 15d -15(f) of the Exchange Act) as of December 31, 2017. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2013 Internal Control—Integrated Framework. Management concluded that, as of December 31, 2017, our internal control over financial reporting was effective based on the criteria established in the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC that require the Company to include only management’s report in this annual report.

Internal Control Over Financial Reporting: There were no changes in our internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION None.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE The following table sets forth the names and ages of our directors and executive officers and the positions they held with us as of March 22, 2018:

Name Age Position Paul Cooper 57 Chairman of the Board, CEO and Class II Director Louis Sheinker 56 President, Chief Operating Officer, Secretary and Class II Director Stuart Blau 62 Chief Financial Officer and Treasurer Douglas Cooper 71 Class I Director John Leahy 75 Class III Director Stanley Perla 74 Class II Director Donald Schaeffer 67 Class III Director Harvey Schneider 84 Class I Director

The principal occupation and business experience of each of the directors and executive officers are as follows:

Paul Cooper has been Chief Executive Officer of the Company since June 2012 and Chairman of the Board of Directors (“Board”) since January 1, 2014. Mr. Cooper has been a director of the Company since June 2006 and previously served as Executive Vice President. Prior to joining the Company, for more than 12 years, Mr. Cooper was a principal of Lighthouse Real Estate Ventures and its affiliates (collectively “Lighthouse”). Lighthouse owned, managed, and leased its own portfolio of more than 2 million square feet of commercial buildings in the Greater New York metropolitan area. Mr. Cooper brings his extensive experience in the commercial real estate industry to the Board. Mr. Cooper holds a Bachelor of Science degree from the University of Pennsylvania and a Juris Doctor degree from Fordham University. Paul Cooper is the cousin of Douglas Cooper.

Louis Sheinker has been President and Chief Operating Officer and a director of the Company since January 2013. Mr. Sheinker brings nearly 27 years of real estate experience to the Company. Prior to joining the Company, Mr. Sheinker was a co-founding partner in Lighthouse Real Estate Ventures. He has participated in restructuring and repositioning of over 4 million square feet of office space and industrial properties. Prior to founding Lighthouse, he was the President of Sheinker Wasserstein Realty Services, Inc., which performed management and asset management services on behalf of financial institutions throughout the New York Metropolitan Area. Mr. Sheinker brings his extensive experience in the commercial real estate industry to the Board. He holds a Bachelor of Science degree from Ithaca College, and is currently a licensed Real Estate Broker in New York State. Effective as of January 15, 2015, Mr. Sheinker was appointed Secretary of the Company.

Stuart Blau has been Chief Financial Officer and Treasurer of the Company since November 2017. Prior to joining the Company, Mr. Blau served as Managing Partner at Kimmel Blau & Goldman LLP, a diversified certified public accounting firm, since 1983. He has also served as Partner at Berlin & Blau, attorneys at law, since 1985. Mr. Blau is a Certified Public Accountant and admitted to practice law in the State of New York. Mr. Blau received a Bachelor of Science degree from the State University of New York at Buffalo and a Juris Doctor degree from St. John’s University School of Law.

Douglas Cooper has been a director since June 2006. Mr. Cooper has been practicing law for over 40 years and is now of counsel to the firm of Ruskin Moscou Faltischek, P.C. Mr. Cooper brings his legal expertise to his long service to the Board. Mr. Cooper graduated from Hamilton College, and received his Juris Doctor degree from Fordham Law School. Mr. Cooper also earned a Master’s degree in Corporate Law from NYU Law School. Douglas Cooper is the cousin of Paul Cooper. Mr. Cooper resigned as the Company’s Treasurer and Secretary effective as of January 15, 2015.

John Leahy has been a director of the Company since June 2006. Mr. Leahy is presently President of JJL Consulting. From 1998 to 2006, Mr. Leahy was Managing Director of Citibank Private Bank operations in Long Island. Prior to that, Mr. Leahy was a Senior Vice President of Chase Manhattan Bank, N.A. Mr. Leahy brings his expertise as a private and commercial banker to the Board. Mr. Leahy holds a Bachelor’s degree in Mechanical Engineering from the University of Dayton, and a Master’s degree in Business Management from Long Island University. Mr. Leahy is deemed an independent director.

Stanley Perla has been a director of the Company since January, 2013. Mr. Perla was a partner with Ernst & Young LLP, a public accounting firm, from September 1978 to June 2003, and Managing Partner of Cornerstone Accounting Group LLP, from June 2008 to May 2011. He served as Ernst & Young’s National Director of Real Estate Accounting, as well as on Ernst & Young’s National

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accounting and Auditing Committee. He is an active member of the National Association of Real Estate Investment Trusts and the National Association of Real Estate Companies. He is currently chair and/or a member of the American Finance Trust and the

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Hospitality Investors Trust audit committees. He has also served as a director and/or member of the audit committees of Madison Harbor Balanced Strategies, Inc., American Realty Capital Daily Net Asset Value Fund, American Capital Global Trust II, American Real Estate Income Fund American Mortgage Acceptance Company and Lexington Realty Trust, and Vice President/Director of Internal Audit for Vornado Realty Trust (July 2003 to May 2008). Mr. Perla brings his accounting experience within our industry as well as his real estate and financial industry experience to the Board. He graduated from Baruch College, where he obtained his BBA in accounting in 1965, and his MBA in taxation in 1970. He is a licensed Certified Public Accountant in the State of New Jersey and New York. Mr. Perla is deemed an independent director.

Donald Schaeffer has been a director of the Company since June 2006. Mr. Schaeffer has extensive accounting and legal experience in real estate and tax. In 1982, he joined the accounting firm, Kandel Schaeffer, in which he eventually became an officer and owner. Through successor accounting firms, he became co-owner and President of Schaeffer & Sam, P.C., which he has practiced with for the past seventeen years. Mr. Schaeffer brings his legal and accounting experience to the Board. He graduated from the Wharton School, University of Pennsylvania, in 1972 and Columbia University School of Law in 1975. He is a licensed Certified Public Accountant in the State of New York. Mr. Schaeffer is deemed an independent director.

Harvey Schneider has been a director of the Company since June 2007. Mr. Schneider is currently of counsel at the law firm of Putney, Twombly, Hall & Hirson LLP. Mr. Schneider is admitted to practice law in New York and Florida. For approximately fifty years he has practiced in the field of trusts and estates for individuals, and employee benefits and succession planning for business entities. Mr. Schneider brings his legal, employee benefits and business succession planning expertise to the Board. Mr. Schneider is a 1955 graduate of Pennsylvania State University with a Bachelors’ degree in Business Administration and a 1958 graduate of the New York University School of Law. Mr. Schneider is deemed an independent director.

Except as noted above and elsewhere in this filing, there are no family relationships between any of the Company’s executive officers or directors and there are no arrangements or understandings between a director and any other person pursuant to which such person was elected as director.

No director or officer of the Company has, during the last 10 years, been subject to or involved in any legal proceedings described under Item 401(f) of Regulation S-K, been convicted of any criminal proceeding (excluding traffic violations or similar misdemeanors), or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, United States federal or state securities laws or finding any violations with respect to such laws.

Board Membership, Meetings and Attendance The Board oversees the business affairs of our Company and monitors the performance of management. Each director holds office for the term for which he is elected or until his successor is duly elected and qualified, his resignation, or he is removed in the manner provided by our Bylaws. All of our officers devote their full-time attention to our business.

Our Board currently consists of seven directors: Paul Cooper, Louis Sheinker, Douglas Cooper, John Leahy, Stanley Perla, Donald Schaeffer and Harvey Schneider. Directors are elected at each annual meeting of stockholders. We have a staggered Board. Class I directors, which are Messrs. D. Cooper and Schneider, have a term expiring at the annual stockholders meeting in 2019 or until their successors are elected and qualified. Class II directors, which are Messrs. P. Cooper, Sheinker and Perla, have a term expiring at the annual meeting in 2020 or until their successors are elected and qualified. Class III directors, which are Messrs. Schaeffer and Leahy, have a term expiring at the annual stockholders meeting in 2018 or until their successors are elected and qualified. Directors reelected at such time shall be reelected to three year terms. Officers are appointed by the Board and serve at the pleasure of the Board, subject to any contract rights.

Our Board held six meetings during 2017. Each director attended at least 75% of the aggregate number of all Board meetings held during the period for which he was a director and committee meetings held during the period for which he was a committee member.

We encourage all members of the Board to attend annual meetings of stockholders, but there is no formal policy as to their attendance. At the 2017 annual meeting of stockholders, all members of the Board attended the meeting. Our directors regularly meet in executive session without management present. Generally, the meetings follow after each quarterly meeting of the Board.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The membership and responsibilities of our committees are summarized below. Additional information regarding the responsibilities of each committee is found in, and is governed by, our Bylaws, each committee’s charter, specific directions of the Board, and certain mandated regulatory requirements. A copy of the charters of the Audit and Compensation Committees, as well as

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Amended and Restated Code of Business Conduct and Ethics are available to any person without charge upon written request to our corporate address to the attention of the Secretary.

Committees of the Board of Directors Audit Committee We have an Audit Committee comprised of three members, Messrs. Perla, Leahy, and Schaeffer, all of whom are independent directors under NASDAQ stock market standards. Mr. Perla is designated as Chairman; he also serves as the “Audit Committee financial expert” as defined by Item 407(d)(5) of Regulation S-K. The purpose of the Audit Committee is to assist the Board in its general oversight of our financial reporting, internal controls and audit functions. The Audit Committee has adopted a charter, which details the principal functions of the Audit Committee. In general, the Audit Committee selects and appoints the Company’s independent registered public accounting firm and the Audit Committee’s responsibilities include overseeing: • the corporate accounting and reporting practices of the Company, • the integrity of the Company’s financial statements, • the Company’s independent registered public accounting firm’s qualifications and independence, • the performance of the Company’s independent registered public accounting firm and the Company’s internal audit function, • the Company’s compliance with legal and regulatory requirements, and • all other duties as the Board may from time to time designate.

During the year ended December 31, 2017, the Audit Committee held four meetings.

Compensation Committee We have a Compensation Committee comprised of three members: Messrs. Leahy, Schneider, and Schaeffer. All members of the committee are deemed independent directors under NASDAQ stock market standards. Mr. Schaeffer is designated as Chairman. The Compensation Committee establishes compensation policies and programs for our directors, executive officers and other senior employees. The Compensation Committee and the Board use data, showing current and historic elements of compensation, when reviewing executive and director compensation. The Committee is empowered to review all components of executive officer and director compensation for consistency with the overall policies and philosophies of the Company relating to compensation issues. The Committee may from time to time delegate, to the extent permitted by applicable law, duties and responsibilities to subcommittees or an executive officer. The Committee may retain and receive advice, in its sole discretion, from compensation consultants. None of the members of our Compensation Committee is one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or Compensation Committee. The Compensation Committee has adopted a charter, which details the principal functions of the Compensation Committee.

Pursuant to its charter, the Compensation Committee is authorized to retain and terminate, without Board or management approval, the services of an independent compensation consultant to provide advice and assistance. The Compensation Committee has the sole authority to approve the consultant’s fees and other retention terms, and reviews the independence of the consultant and any other services that the consultant or the consultant’s firm may provide to the Company. The Chairman of the Compensation Committee reviews, negotiates and executes an engagement letter with the compensation consultants. The compensation consultant must directly report to the Compensation Committee.

In January 2016, the Compensation Committee, following an independence and conflict of interest review, engaged Gressle & McGinley LLC (“G&M”) as its independent compensation consultant to assist the Committee in its work on negotiating and finalizing new employment agreements for the Company’s executive officers (CEO and President/COO), and to serve as the Committee’s independent advisors on various 2015 related compensation matters, including, among others, annual performance reviews, market pay levels, grants under the Company’s equity compensation plans, etc. Prior to this engagement, G&M was employed as compensation consultants by the Company’s CEO and President/COO with respect to the review of the CEO, President/COO and CFO executive 2014 and 2015 market compensation, with the compensation paid for such services not exceeding $16,000 and $45,000, respectively. The total paid to G&M for the years ended December 31, 2017 and December 31, 2016, was approximately $46,000 and $113,000, respectively.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document At a meeting of the Board held on January 31, 2017, the Chairman of the Compensation Committee presented a review on independent director compensation in conjunction with work by G&M. At this meeting, the Board, accepting the recommendation of the Compensation Committee, approved an increase in Board compensation from a cash retainer of $24,000 per year to $25,000 and an increase in equity compensation, in the form of restricted stock, from $25,000 per year to $30,000 per year. These changes applied to Board compensation for fiscal year 2017. All committee and board of directors meeting fees would remain the same at $1,000 per meeting. At the annual stockholders meeting held in June 2017, the stockholders approved the 2017 Equity Compensation Plan under which awards to directors and officers would be made going forward, including the equity compensation awarded to the independent directors.

On October 5, 2017 the Compensation Committee held a meeting at which G&M gave an updated report regarding Board and committee compensation. Based upon this presentation, the Compensation Committee approved increasing the Board compensation from a cash retainer of $25,000 per year to $30,000, effective as of January 1, 2018, and an increase in equity compensation from $30,000 per year to $35,000, effective as of the date of the 2018 annual meeting of the Company’s stockholders. All committee and Board meeting fees would remain the same at $1,000 per meeting. At a Board meeting held on November 7, 2017, the Board accepted the recommendation of the Compensation Committee and approved the revisions to the compensation of the independent directors.

During the year ended December 31, 2017, the Compensation Committee held three meetings.

As part of its ongoing services to the Compensation Committee, the compensation consultant will support the Compensation Committee in executing its duties and responsibilities with respect to the Company’s compensation programs by providing information regarding market trends and competitive compensation programs and strategies, including, among other things, preparing market data for executive positions, assessing management recommendations for changes in the compensation structure, working with management to ensure that the Company’s executive compensation programs are designed and administered consistent with the Committee’s requirements, and providing ad hoc support to the Committee, including discussing executive compensation and related corporate governance trends. The Company’s Board, executive management and personnel use the data provided by the consultant to prepare documents for use by the Compensation Committee in preparing their recommendations to the full Board.

Our Board does not have a stand-alone Nominating Committee. Instead, the full Board carries out duties of a nominating committee. The Board has not adopted written guidelines regarding nominees for director.

Corporate Governance Matters; Risk Oversight and Management When considering whether directors and nominees have the experience, qualifications, attributes or skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the Board focuses primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth above. Our directors possess relevant and industry-specific experience and knowledge relevant to the size and nature of our business, which we believe enhances the Board’s ability to oversee, evaluate and direct our overall corporate strategy. The Board annually reviews and makes recommendations regarding the composition and size of the Board so that the Board consists of members with the proper expertise, skills, attributes, and personal and professional backgrounds needed by the Board, consistent with applicable regulatory requirements.

Our Board believes that all of its members should possess the highest personal and professional ethics, integrity, and values, and be committed to representing the long-term interests of our stockholders. In considering a director nominee, the Board will consider criteria including the nominee’s current or recent experience as a senior executive officer, whether the nominee is independent, as that term is defined under the independence requirements applicable to the Company, the business, scientific or engineering experience currently desired on the Board, geography, the nominee’s industry experience, and the nominee’s general ability to enhance the overall composition of the Board. The Board does not have a formal policy on diversity; however, in recommending directors, the Board considers the specific background and experience of the Board members and other personal attributes in an effort to provide a diverse mix of capabilities, contributions, and viewpoints to facilitate the Board’s discharge of its responsibilities.

The Board has no formal policy with respect to separation of the positions of Chairman and Chief Executive Officer or with respect to whether the Chairman should be a member of management or an independent director, and believes that these are matters that should be discussed and determined by the Board from time to time. Currently, Paul Cooper serves as our Chairman and our Chief Executive Officer. We believe he is well suited to manage the responsibility of implementing our corporate strategy and

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document leading discussions, at the Board level, regarding performance relative to our corporate strategy, which accounts for a significant portion of the time devoted at our Board meetings. We believe this arrangement serves the best interests of the Company and its stockholders.

The Board believes that risk management is an important component of the Company’s corporate strategy. While we assess specific risks at our committee levels, the Board, as a whole, oversees our risk management process and discusses and reviews with management major policies with respect to risk assessment and risk management. The Board is regularly informed through its interactions with management and committee reports about risks we face in the course of our business.

In particular, the Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements and has oversight of the performance of our internal audit function. Our Compensation Committee assesses and monitors the effectiveness of our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct.

Each committee meets regularly with management to assist it in identifying all of the risks within such committee’s areas of responsibility and in monitoring and, where necessary, taking appropriate action to mitigate the applicable risks. At each Board meeting, the committee chairman provides a report to the full board of directors on issues related to such committee’s risk oversight duties. To the extent that any risks reported to the full Board need to be discussed outside the presence of management, the Board will call an executive session to discuss these issues.

Code of Business Conduct and Ethics Our Board has adopted an Amended and Restated Code of Business Conduct and Ethics, which applies to all directors, officers, and employees, including our principal executive officer and principal financial officer. A copy of the Amended and Restated Code of Business Conduct and Ethics is filed as Exhibit 14.1 to this Annual Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table The following table sets forth the compensation of each named executive officer of the Company and/or their subsidiaries for the two years ended December 31, 2017 (“named executive officers”):

Stock Option All Other Salary Bonus Awards Awards Compensation Total Name and Position Year ($) ($) ($) (5) ($) (5) ($) ($) Paul Cooper, Chairman and Chief Executive Officer 2017 $650,000 $500,000 $199,996 $ — $ 87,325 (1)(2)(3) $ 1,437,321 2016 $ 650,000 $ 450,000 $ 228,998 $ 165,000 $ 98,800 (1)(2)(3) $1,592,798 Louis Sheinker, President, Chief Operating Officer and Secretary 2017 $600,000 $500,000 $199,996 $ — $ 83,325 (1)(2)(3) $ 1,383,321 2016 $600,000 $450,000 $228,998 $165,000 $ 104,431 (1)(2)(3) $ 1,548,429 Stuart Blau, Chief Financial Officer and Treasurer 2017 $ 33,461 $ — $ — $ — $ — $ 33,461 Ben Zimmerman, Former Chief Financial and Treasuer 2017 $228,969 $ — $ — $ — $ 146,634 (1)(2)(4) $ 375,603 2016 $225,000 $ 93,750 $ 31,252 $ — $ 6,858 (1)(2) $ 356,860 (1) Includes 401(K) contributions. (2) Includes life insurance premiums. (3) Includes auto allowance, health care reimbursement and medical insurance premiums. (4) Includes severance paid in accordance with a separation agreement. (5) These columns represent the grant date fair value of the awards as calculated in accordance with FASB ASC 718 (Stock Compensation). Pursuant to SEC rule changes effective February 28, 2010, we are required to reflect the total grant date fair values of the restricted stock and option grants in the year of grant, rather than the portion of this amount that was recognized for financial statement reporting purposes in a given fiscal year which was required under the prior SEC rules.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Grants of Plan-Based Awards and Outstanding Equity Awards at Fiscal Year End: Options granted to our named executive officers in 2008 were incentive stock options and those granted in 2016 were non- qualified stock options. The exercise price per share of each option granted to our named executive officers was determined by our Board on the date of the grant. All of the stock options granted to our named executive officers in 2008 and 2016 were granted under our 2007 Plan. 200,000 options were granted to the named executive officers in 2016.

The following table sets forth certain information regarding grants of plan-based awards to our named executive officers for the fiscal year ended December 31, 2017:

All Other Stock Awards, Number of Grant Date Shares of Fair Value Stock of Equity Name and Principal Position Grant Date of Units (#) Awards ($)(1) Paul Cooper, Chairman and Chief Executive Officer 5/22/2017 17,241 $ 199,996 Louis Sheinker, Chief Operating Officer, President and Secretary 5/22/2017 17,241 $ 199,996

Outstanding Equity Awards The following table sets forth certain information with respect to restricted stock awards held by each named executive officer as of December 31, 2017:

Number of Number of Market Value of Unearned Shares, Market or Payout Shares Shares of Units Units or Other Value of Unearned or Units of Stock of Stock That Rights that Have Shares, Units or That Have Not Have Not Vested Not Vested Other Rights That Name Grant Year Vested (#) ($)(1) (#) Have Not Vested ($) Paul Cooper 2017 9,512 110,336 — — 2016 6,437 66,950 — — 2015 2,798 26,018 — — 2014 1,444 9,816 — — Louis Sheinker 2017 9,512 110,336 — — 2016 6,437 66,950 — — 2015 2,798 26,018 — — 2014 1,444 9,816 — — (1) The restricted stock and option awards will be accounted for at their fair value at the grant date which will also be the service inception date and will be amortized over the period of service.

The following table sets forth certain information with respect to outstanding stock option awards granted to our named executive officers outstanding as of December 31, 2017:

Equity Incentive Number of Number of Plan Awards: Securities Securities Number of Underlying Underlying Securities Unexercised Unexercised Underlying Option Option Options— Options— Unexercised Exercise Expiration Name and Principal Position Exercisable Unexercisable Options Price(1) Date(2) Paul Cooper, Chairman and Chief Executive November Officer 33,333 66,667 — $ 10.40 2026 Louis Sheinker, Chief Operating Officer, President November and Secretary 33,333 66,667 — $ 10.40 2026 (1) Fair market value of shares on the date of grant.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Option Exercises and Stock Vested: Options issued pursuant to the 2007 Incentive Award Plan and the related Stock Option Agreement were exercised by Paul Cooper and 50,000 shares were purchased on May 31, 2017. No options were exercised by our named executive officers in 2016.

Pension Benefits: We do not currently maintain qualified or non-qualified defined benefit plans.

Non-qualified Deferred Compensation: We do not currently maintain non-qualified defined contribution plans or other deferred compensation plans.

Employee Agreements and Potential Payments upon Termination or Change in Control: Except as set forth below, there are no employment agreements or agreements providing for potential payments upon termination or a change in control at December 31, 2017.

Paul Cooper Employment Agreement On November 8, 2016, the Board following review and recommendation of the Board’s Compensation Committee, approved the Company’s execution of the amended and restated Employment Agreement by and between the Company and Paul Cooper, the Company’s Chief Executive Officer, which agreement was executed by the parties on the same date (the “CEO Employment Agreement”). The CEO Employment Agreement provides for an initial term of five years, from January 1, 2016 through and including December 31, 2020, and two successive automatic one year renewal terms, unless either party gives written notice to the other party of its desire to terminate the agreement. It also provides for the payment of an annual base salary to Mr. Cooper at the rate of $650,000, subject to annual increases at the discretion of the Company. Additionally, Mr. Cooper may earn a cash bonus of $450,000 per year and an equity bonus payable in shares of the Company’s restricted common stock valued at $200,000 per year, upon the achievement of certain benchmarks set forth in an annual budget approved by the Board, which amounts are subject to adjustments in the Board’s review and discretion, as set forth in the agreement; such equity bonus vesting at a rate equal to 10% on each of the first ten anniversaries of the date of grant while Mr. Cooper is employed by the Company. Upon execution of the CEO Employment Agreement, the Company agreed to grant Mr. Cooper a stock option under the Company’s 2007 Incentive Stock Option Plan or a successor plan (the “Equity Plan”), to acquire 100,000 shares of the Company’s common stock at an exercise price equal to the fair market value of the Company’s common stock as defined in the Equity Plan and will vest in its entirety on the 3rd anniversary of the grant date. Mr. Cooper will also be entitled to receive, for each fiscal year of his employment period with the Company, long term equity incentive awards in the form of restricted stock under the Equity Plan (provided that each such award is conditioned on the determination by the Compensation Committee in its sole discretion that the attainment of the particular Adjusted Funds From Operations target is sustainable) which award value will be equal to $2 million for each Adjusted Funds From Operations value of $1.50, $2.00, $2.50, $3.00 and $3.50 per share, respectively. In addition, the CEO Employment Agreement provides that the Company will provide Mr. Cooper with certain usual and customary benefits commensurate with his position including without limitation, medical insurance, $5 million term life insurance, disability insurance, and participation in the Company’s 401(k) plan. The CEO Employment Agreement also contains the following termination terms and provisions: • In the event that (i) Mr. Cooper terminates his employment with the Company without good reason or (ii) the Company terminates Mr. Cooper’s employment for cause, the Company’s obligations under the agreement will be reduced to paying his unpaid salary and reimbursable expenses owing to him prior to such termination (the “Accrued Obligations”), and • In the event that (i) Mr. Cooper terminates his employment with the Company for good reason, or (ii) Mr. Cooper terminates his employment with the Company during the 90-day period following a change of control of the Company, or (iii) the Company elects not to renew the CEO Employment Agreement after the expiration of the initial or renewal term and Mr. Cooper’s employment is terminated by the Company without cause, then in each case the Company’s termination obligations will include the payment of the Accrued Obligations, severance payments the amount of which depends on the circumstances of his departure, accelerated vesting of unvested equity bonus and COBRA payments the lesser of the remainder of the term or three (3) years.

The severance payments referenced above will be calculated as follows: (a) if Mr. Cooper terminates his employment for good reason, the Company will pay him the lesser of (x) the salary he would have earned during the remainder of this term or three years of his then current salary, plus the lesser of (y) his bonus that he would have earned during the remainder of the term, assuming he met the bonus criteria. Further, if Mr. Cooper’s employment was terminated pursuant to clause (iii) above at the end of his initial

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document employment term and provided the Company achieves the Bonus Criteria, on an annual basis for each specified criterion during the Initial Term, as of the end of the 2020 Fiscal Year, then his severance payment would be equal to his then base salary and bonus

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (assuming achievement of the bonus criteria for such renewal term) he could have earned during the remainder of such renewal term. To the extent his employment was terminated pursuant to clause (iii) above at the end of his renewal employment term, then his severance payment would be equal to his then base salary he would have earned during the renewal term and bonus (assuming achievement of the bonus criteria for such renewal term) he could have earned during the remainder of such renewal term. The CEO Employment Agreement also contains certain confidentiality, non-solicitation/non-competition and other provisions customary for agreements of this nature.

Louis Sheinker Employment Agreement On November 8, 2016, the Board also, following review and recommendation of the Board’s Compensation Committee, approved the Company’s execution of the amended and restated Employment Agreement with Louis Sheinker, the Company’s President and Chief Operating Officer, also effective as of the same date (the “COO Employment Agreement”). This COO Employment Agreement provides for an initial term of five years, from January 1, 2016 through and including December 31, 2020, and two successive automatic one year renewal terms, unless either party gives written notice to the other party of its desire to terminate the agreement. It also provides for the payment to Mr. Sheinker of a base salary at the annual rate of $600,000, subject to annual increases at the discretion of the Company. Additionally, Mr. Sheinker may earn a cash bonus of $450,000 per year and an equity bonus payable in shares of the Company’s restricted common stock valued at $200,000 per year, upon the achievement of certain benchmarks set forth in an annual budget approved by the Board, which amounts are subject to adjustments in the Board’s review and discretion, as set forth in the agreement; such equity bonus vesting at a rate equal to 10% on each of the first ten anniversaries of the date of grant while Mr. Sheinker is employed by the Company. Upon execution of the employment agreement, the Company agreed to grant Mr. Sheinker a stock option under the Equity Plan to acquire 100,000 shares of the Company’s common stock at an exercise price equal to the fair market value of the Company’s common stock as defined in the Equity Plan and will vest in its entirety on the 3rd anniversary of the grant date. Mr. Sheinker will also be entitled to receive, for each fiscal year of his employment period with the Company, long term equity incentive awards in the form of restricted stock under the Equity Plan (provided that each such award is conditioned on the determination by the Compensation Committee in its sole discretion that the attainment of the particular Adjusted Funds From Operations target is sustainable) which award value will be equal to $2 million for each Adjusted Funds From Operations value of $1.50, $2.00, $2.50, $3.00 and $3.50 per share, respectively. In addition, the COO Employment Agreement provides that the Company will provide Mr. Sheinker with certain usual and customary benefits commensurate with his position including without limitation, medical insurance, $5 million term life insurance, disability insurance, and participation in the Company’s 401(k) plan. The COO Employment Agreement also contains the following termination terms and provisions: • In the event that (i) Mr. Sheinker terminates his employment with the Company without good reason or (ii) the Company terminates Mr. Sheinker’s employment for cause, the Company’s obligations under the agreement will be reduced to paying his unpaid salary and reimbursable expenses owing to him prior to such termination (the “Accrued Obligations”), • In the event that (i) Mr. Sheinker terminates his employment with the Company for good reason, or (ii) Mr. Sheinker terminates his employment with the Company during the 90-day period following a change of control of the Company, or (iii) the Company elects not to renew his employment agreement after the expiration of the initial or renewal term and Mr. Sheinker’s employment is terminated by the Company without cause, then in each case the Company’s termination obligations will include the payment of the Accrued Obligations, severance payments the amount of which depends on the circumstances of his departure, accelerated vesting of unvested equity bonus and COBRA payments the lesser of the remainder of the term or three (3) years.

The severance payments referenced above will be calculated as follows: (a) if Mr. Sheinker’s terminates his employment for good reason, the Company will pay him the lesser of (x) the salary he would have earned during the remainder of this term or three years of his then current salary, plus the lesser of (y) his bonus that he would have earned during the remainder of the term, assuming he met the bonus criteria. Further, if Mr. Sheinker’s employment was terminated pursuant to clause (iii) above at the end of his initial employment term and provided the Company achieves the Bonus Criteria, on an annual basis for each specified criteria during the Initial Term, as of the end of the 2020 Fiscal Year, then his severance payment would be equal to his then base salary and bonus (assuming achievement of the bonus criteria for such renewal term) he could have earned during the remainder of such renewal term. To the extent his employment was terminated pursuant to clause (iii) above at the end of his renewal employment term, then his severance payment would be equal to his then base salary he would have earned during the renewal term and bonus (assuming achievement of the bonus criteria for such renewal term) he could have earned during the remainder of such renewal term. The COO Employment Agreement also contains certain confidentiality, non-solicitation/non-competition and other provisions customary for agreements of this nature.

2017 Bonuses Paid Under the P. Cooper and L. Sheinker Employment Agreements

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document On May 10, 2017, the Compensation Committee discussed that the Adjusted Funds From Operations benchmarks for 2016 were met, as set forth in the respective employment agreements of Messrs. P. Cooper and L. Sheinker, entitling each executive to a $450,000 cash bonus and a $200,000 restricted stock bonus under the 2007 Plan. The Compensation Committee reviewed a report

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document prepared by G&M regarding market compensation and the Company’s 2016 performance and utilized its discretion to increase the size of Messrs. P. Cooper and L. Sheinker’s bonuses since the performance benchmarks were exceeded. The Compensation Committee approved increasing the cash bonus award by $50,000 each, for a total cash bonus of $500,000 to each of Messrs. Cooper and Sheinker and an equity bonus of $200,000 to each in restricted stock.

Stuart Blau Employment Letter On November 14, 2017, Stuart M. Blau was appointed as the Company’s Chief Financial Officer and Treasurer. In connection with Mr. Blau’s appointment, the Company and Mr. Blau entered into an employment letter (the “Employment Letter”) setting forth the terms and conditions of Mr. Blau’s employment with the Company. The Employment Letter provides that Mr. Blau will, among other things, (i) receive a base salary of $300,000 per annum, subject to annual review, (ii) be eligible to receive an annual discretionary performance bonus, and (iii) be entitled to participate in the Company’s benefit programs. In addition, the Employment Letter contains confidentiality and non-disclosure covenants customary for agreements of this nature.

Ben Zimmerman Separation Agreement The Company and Ben Zimmerman, the former Chief Financial Officer and Treasurer of the Company, executed a Severance Agreement and General Release, effective as of November 13, 2017 (the “Severance Agreement”). The Severance Agreement provides for a separation payment to Mr. Zimmerman in the amount of $112,287.25 and an additional payment to Mr. Zimmerman in the amount of $37,712.75 for the repurchase of 3,005 shares of the Company’s restricted common stock beneficially owned by Mr. Zimmerman. The Severance Agreement also contained a general release of claims, confidentiality and non-disparagement provisions, and certain other provisions that are customary in agreements of this nature.

Director Compensation: The following table sets forth a summary of the compensation to our directors for 2017 services:

Non-Equity Fees Earned Stock Option Incentive Plan Other or Paid Awards Awards Compensation Compensation Name Cash ($) ($) ($) ($) ($) Total ($) Joseph Barone 28,750 29,998 — — — 58,748 John Leahy 27,250 29,998 — — — 57,248 Stanley Perla 28,750 29,998 — — — 58,748 Donald Schaeffer 27,250 29,998 — — — 57,248 Harvey Schneider 25,750 29,998 — — — 55,748 Douglas Cooper 24,750 29,998 — — — 54,748

Our non-officer Directors received the following forms of compensation for 2017: • Annual Retainer. Our Directors receive an annual retainer of $25,000. Each independent director who serves as chairman of the Audit Committee is paid an additional fee of $5,000 per year and each independent director who serves as chairman of the Compensation Committee is paid an additional fee of $3,000 per year. • Meeting Fees. Our Directors received $1,000 for each Board meeting attended in person or by telephone and $500 for each committee meeting attended in person or by telephone. • Equity Compensation. Upon their initial election and annually on the date of the Annual Meeting of the Company’s stockholders, each director receives $30,000 in shares of restricted stock at fair market value on the date of grant.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth, as of December 31, 2017, information regarding the beneficial ownership of the Company’s common stock by (1) each person who is known to the Company to be the owner of more than five (5%) percent of the Company’s common stock (2) each of the Company’s directors and named executive officers and (3) all directors and executive officers as a group. For purposes of this table, a person or group of persons is deemed to have beneficial ownership of any shares that such person has the right to acquire within 60 days of December 31, 2017.

Amounts and Nature of Percentage of Name of Beneficial Owner Beneficial Ownership Class(8) Paul Cooper(1) 291,366 2.1% Louis Sheinker (2) 183,116 1.3% Douglas Cooper (3) 199,073 1.5% Joseph Barone(4) 119,344 * John Leahy (5) 15,952 * Stanley Perla (5) 11,934 * Donald Schaeffer(6) 20,952 * Harvey Schneider (5) 14,482 * Stuart Blau — * Ben Zimmerman (7) — * All Executive Officers and Directors as a Group 856,219 6.2% * Represents less than 1.0% of our outstanding common stock. (1) Includes options to purchase 100,000 shares which may be purchased under the 2007 Plan and 179,369 restricted shares granted under the 2007 Plan. (2) Includes options to purchase 100,000 shares which may be purchased under the 2007 Plan, balance represents restricted shares granted under the 2007 Plan. (3) Includes 74,695 restricted shares under the 2007 Plan. (4) Includes options to purchase 10,000 shares which may be purchased under the 2007 Plan and 15,952 restricted shares granted under the 2007 Plan. (5) Restricted shares granted under the 2007 Plan. (6) Includes options to purchase 5,000 shares which may be purchased under the 2007 Plan; balance represents restricted shares granted under the 2007 Plan. (7) On November 13, 2017, Ben Zimmerman notified the Company that he would resign his position as Chief Financial Officer and Treasurer of the Company. (8) Based on 13,594,125 shares outstanding as of December 31, 2017.

Equity Compensation Plan Information On June 11, 2007, the Board approved the Company’s 2007 Incentive Award Plan (the “2007 Plan”) with the effective date of the Plan of June 11, 2007, which was then approved by our stockholders on February 7, 2008. The aggregate number of shares of common stock which may have been awarded under the 2007 Plan was 1,000,000 shares. These shares were registered on the Registration Statement on Form S-8 filed with the SEC on September 23, 2010. The 2007 Plan expired by its terms on June 11, 2017. The 2017 Incentive Award Plan (the “2017 Plan”) was adopted by the Board and became effective on April 24, 2017, subject to the approval of the Company’s stockholders which was obtained on June 8, 2017. The aggregate number of shares of common stock which may be awarded under the 2017 Plan is 2,000,000 shares. These shares were registered on the Registration Statement on Form S-8 filed with the SEC on June 12, 2017. See Part III, Item 11 and Note 6. “Stockholders Equity” of the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information regarding the 2007 Plan and the 2017 Plan.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The following information is provided as of December 31, 2017, with respect to compensation plans, including individual compensation arrangements, under which our equity securities are authorized for issuance:

Number of securities Number of Number of securities to be issued upon Weighted-average securities issued of remaining available exercise of exercise price of restricted stock for future issuance outstanding options, outstanding options, and unexercised under equity Plan category warrants and rights warrants and rights options compensation plans Equity compensation plans approved by security holders(1) 220,000 $ 10.47 879,618 — Equity compensation plans approved by security holders(2) — — — 2,000,000 Equity compensation plans not approved by security holders — — — — Total 220,000 $ 10.47 879,618 2,000,000

(1) This equity compensation is under the 2007 Plan. (2) This equity compensation is under the 2017 Plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Our directors and executive officers and their affiliates and associates have engaged in the following transactions with the Company.

Paul Cooper, our Chairman and Chief Executive Officer, and Louis Sheinker, our President, Chief Operating Officer and Secretary, each hold passive, minority ownership interests in a real estate brokerage firm, The Rochlin Organization. The firm acted as the exclusive broker for one of the Company’s properties. In 2013, the firm introduced a new tenant to the property, resulting in the execution of a lease agreement and a subsequent lease modification. The firm earned aggregate brokerage cash commissions of approximately $60,000 based on a total lease value of $1,015,000. In January 2014, the new tenant expanded further which resulted in approximately $95,000 of brokerage commissions on the additional lease modification value of $2,100,000. In November 2015, the tenant concluded negotiations to expand by an additional 35,000 square feet which resulted in approximately $12,000 of brokerage commissions on the additional lease modification value of $200,000. In December 2016, the tenant concluded negotiations to expand by an additional 35,000 square feet which resulted in approximately $10,000 of brokerage commissions on the additional lease modification value of $332,000.

Additionally, Lighthouse Sixty, LP, owner of the building at 60 Hempstead Avenue, West Hempstead, NY, and of which Paul Cooper and Louis Sheinker are managing members of the general partner, have a lease agreement with the Company expiring in 2020 for office and storage space at an initial base rent of approximately $298,000 with aggregate lease payments totaling approximately $1.8 million.

On November 4, 2014, the Company invested approximately $1.8 million for a limited partnership interest in Garden 1101 Stewart L.P. (“Garden 1101”). Garden 1101 was formed for the purpose of acquiring a 90,000 square foot office building in Garden City, NY that was converted to a medical office building. The general partners of Garden 1101 include the members of Green Holland Ventures, Paul Cooper and Louis Sheinker. There are several limited partners, including a wholly owned subsidiary of GTJ Realty LP. On February 9, 2018, the property acquired by Garden 1101 was sold and the Company received an initial distribution from the partnership of $3.7 million. A final distribution is expected to be received in 2018 upon liquidation of the partnership.

Policy Concerning Related Party Transactions: In January 2018, our Board adopted an amended and restated policy (the “Policy”) concerning the identification, review and approval of Related Party Transactions (as such term is defined in the Policy).

Identification of Potential Related Party Transactions:

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Related Party Transactions will be brought to management’s and the board of director’s attention in a number of ways. Each director, nominee for director and executive officer is responsible for providing prompt written notice to the Secretary of any potential Related Party Transaction involving him or her or his or her immediate family member, including any additional information

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document about the transaction that the Secretary may reasonably request. The Secretary should receive notice of any potential Related Party Transaction well in advance of consummation of the transaction so that he or she has adequate time to obtain and review information about the proposed transaction. In addition, each such director, nominee for director and executive officer completes a questionnaire on an annual basis designed to elicit information about any potential Related Party Transactions.

Any potential Related Party Transactions that are brought to our attention will be reviewed and analyzed by our outside securities counsel in consultation with management, as appropriate, to determine whether the transaction or relationship does, in fact, constitute a Related Party Transaction requiring approval or ratification by the Board in accordance with the Policy.

Review and Approval of Related Party Transactions: At each of its meetings, the Board will be provided with the details of each new, existing, or proposed Related Party Transaction, including the terms of the transaction, the business purpose of the transaction, and the effects on the Company and the relevant Related Party. In determining whether to approve a Related Party Transaction, the Board will consider, among other factors, the following factors to the extent relevant to the Related Party Transaction: • whether the terms of the Related Party Transaction are fair to the Company and on the same basis as would apply if the transaction did not involve a Related Party; • whether there are business reasons for the Company to enter into the Related Party Transaction and the nature of the alternative transactions, if any; • whether the Related Party Transaction would impair the independence of an outside director; • whether the Company was notified about the Related Party Transaction before its commencement and if not, why pre-approval was not sought and whether subsequent ratification would be detrimental to the Company; and • whether the Related Party Transaction would present an improper conflict of interest for any director or executive officer of the Company, taking into account the size of the transaction, the overall financial position of the director, executive officer or Related Party, the direct or indirect nature of the director’s, executive officer’s or Related Party’s interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the Board deems relevant.

Any member of the Board who has an interest in the transaction under discussion will abstain from voting on the approval of the Related Party Transaction, but may, if so requested by the Chairperson of the Board, participate in some or all of the Board’s discussions of the Related Party Transaction. Upon completion of its review of the transaction, the Board may determine to permit or to prohibit the Related Party Transaction in its good faith judgement.

The Policy provides that the Board has reviewed certain types of Related Party Transactions identified in the Instructions to Item 404(a) of Regulation S-K as transactions that do not require disclosure under Item 404(a), and determined that such types of Related Party Transactions shall be deemed to be pre-approved or ratified, as applicable, by the Board, even if the aggregate amount involved will exceed $120,000, unless specifically determined otherwise by the Board. In connection with each regularly scheduled meeting of the Board, a summary of each new Related Party Transaction deemed pre-approved shall be provided to the Board for its review.

Director Independence

Our Board of Directors currently consists of seven members. As of January 1, 2018, four of the members are deemed independent. The Board elects to apply the NASDAQ stock market corporate governance requirements and standards in its determination of the independence status of each Board and committee member. The members of the Audit Committee are also “independent” as defined under the Exchange Act and applicable rules and regulations of the NASDAQ stock market. The members of the Compensation Committee are “independent” as defined under the applicable rules and regulations of the NASDAQ stock market.

The Board based its independence determinations primarily on a review of the responses of the directors and executive officers to questions regarding employment and transaction history, affiliations and family and other relationships and on discussions with the directors. Except as otherwise disclosed in this Annual Report on Form 10-K, none of our directors engages in any transaction, relationship, or arrangement contemplated under section 404(a) of Regulation S-K.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES On April 8, 2009, the Audit Committee appointed BDO USA, LLP as our independent registered public accounting firm and have reported on the financial statements in this 2017 Annual Report.

The following table presents aggregate fees billed for each of the years ended December 31, 2017 and 2016 for professional services rendered by BDO USA, LLP in the following categories:

2017 2016 Audit fees $ 396,443 $ 359,197 Audit related fees — 23,775 Tax fees — — Other fees — — Total $ 396,443 $ 382,972

Audit fees. These are fees for professional services performed for the audit of our annual financial statements and the required review of quarterly financial statements, and other procedures performed by BDO USA, LLP in order for them to be able to form an opinion on our consolidated financial statements. These fees also cover services that are normally provided by independent auditors in connection with statutory and regulatory filings or engagements.

Audit related fees. These are fees for assurance and related services that traditionally are performed by independent auditors that are reasonably related to the performance of the audit or review of the financial statements, such as due diligence related to acquisitions and dispositions, attestation services that are not required by statute or regulation, internal control reviews, and consultation concerning financial accounting and reporting standards.

Tax fees. These are fees for all professional services performed by professional staff in BDO USA, LLP’s tax division, except those services related to the audit of our financial statements. These include fees for tax planning and tax advice. In 2015, the Company engaged Kimmel, Blau & Goldman LLP to provide tax related services including tax planning and tax advice. Fees paid to Kimmel, Blau & Goldman LLP for the year ended December 31, 2017 and December 31, 2016 were each $56,000.

All other fees. These are fees for any services not included in the above-described categories, including assistance with internal audit plans, risk assessments, and other regulatory filings.

The Audit Committee pre-approves all anticipated annual audit and non-audit services provided by our independent registered public accounting firm prior to the engagement of the independent registered public accounting firm with respect to such permissible services. With respect to audit services and permissible non-audit services not previously approved, the Audit Committee has authorized the Chairman of the Audit Committee to approve such audit services and permissible non-audit services, provided the Chairman informs the Audit Committee of such approval at its next regularly scheduled meeting. All “Audit Fees,” “Audit-Related Fees,” and “Tax Fees” set forth above were pre-approved by the Audit Committee. In accordance with Section 10A(i) of the Exchange Act, before BDO USA, LLP was engaged by us to render audit or non-audit services, the engagement was approved by our Audit Committee.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit Number Exhibit

2.1 Merger Agreement and Plan of Merger (Incorporated by reference to Attachment A to Registrant’s Form S-11 Registration Statement No. 333-136110). 3.1 Form of Amended and Restated Articles of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1(a) Amendment No. 1 to Registrant’s Form S-11 Registration Statement No. 333-136110, filed with the SEC on October 19, 2006) 3.2(a) Bylaws of the Registrant (Incorporated by reference to Exhibit 3.2 to Registrant’s Form S-11 Registration Statement No. 333-136110, filed with the SEC on July 28, 2006). 3.2(b) Amendment to Bylaws of the Registrant (Incorporated by reference to Exhibit 3.29(b) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC on May 1, 2008). 3.2(c) Amendment to Bylaws (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 8, 2015). 4.1 Specimen Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to Registrant’s Form S-11 Registration Statement (No. 333-136110), filed with the SEC on July 28, 2006). 10.1 Revised Form of 2007 Incentive Award Plan (Incorporated by reference to Exhibit 10.1 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC on May 1, 2008). 10.2 Form of Stockholder Rights Agreement (Incorporated by reference to Exhibit 10.2 to Amendment No. 1 to Registrant’s Form S-11 Registration Statement (No. 333-136110), filed with the SEC on October 19, 2006). 10.3 Asset Purchase Agreement by and among Green Bus lines, Inc., Command Bus Company, Inc., Triboro Coach Corp., Jamaica Buses, Inc. Varsity Transit, Inc., GTJ Co., Inc. and the City of New York dated November 29, 2005. (Incorporated by reference to Exhibit 10.3 to Registrant’s Form S-11 Registration Statement (No. 333-136110), filed with the SEC on July 28, 2006). 10.4 Agreement of Lease between Green Bus Holding Corp., Landlord and the City of New York, Tenant: Premises 49-19 Rockaway Beach Boulevard, Arverne, New York. (Incorporated by reference to Exhibit 10.4 to Registrant’s Form S-11 Registration Statement (No. 333-136110), filed with the SEC on July 28, 2006). 10.5 Agreement of Lease between Green Bus Holding Corp., Landlord and the City of New York, Tenant: Premises 165-25 147th Avenue, Jamaica, New York. (Incorporated by reference to Exhibit 10.5 to Registrant’s Form S-11 Registration Statement (No. 333-136110), filed with the SEC on July 28, 2006). 10.6 Agreement of Lease between Jamaica Bus Holding Corp., Landlord and the City of New York, Tenant: Premises 114-15 Guy Brewer Boulevard, Jamaica, New York. (Incorporated by reference to Exhibit 10.6 to Registrant’s Form S-11 Registration Statement (No. 333-136110), filed with the SEC on July 28, 2006). 10.7 Agreement of Lease between Triboro Coach Holding Corp., Landlord and the City of New York, Tenant: Premises 85-01 24th Avenue East Elmhurst, New York. (Incorporated by reference to Exhibit 10.7 to Registrant’s Form S-11 Registration Statement (No. 333-136110), filed with the SEC on July 28, 2006). 10.8 Agreement of Lease between GTJ Co., Inc., Landlord and Avis Rent A Car System, Inc., Tenant: Premises 23-85 87th Street, East Elmhurst, New York. (Incorporated by reference to Exhibit 10.8 to Registrant’s Form S-11 Registration Statement (No. 333-136110), filed with the SEC on July 28, 2006). 10.9 Real Estate Purchase and Sale Agreement by and between Eight Farms Springs Road Associates, LLC and Farm Springs Road LLC. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC February 5, 2008). 10.10 Lease by and between Eight Farm Springs Road Associates, L.L.C. and Hartford Fire Insurance Company, including First Lease Amendment. (Incorporated by reference to Exhibit 10.21 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC on May 1, 2008).

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit Number Exhibit 10.11 Environmental Compliance and Indemnification Agreement, dated August 26, 2011, by and between the Company and Farm Springs Road. (Incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 10, 2011). 10.12 Asset Sale and Purchase Agreement, dated December 27, 2011, by and among Triangle Services Inc., Metroclean Express Corp. and GTJ REIT, Inc. (schedules have been omitted, and the Company agrees to furnish supplementally a copy of all omitted schedules to the SEC upon its request) (Incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K/A filed with the SEC on February 1, 2012).

10.13 Asset Sale and Purchase Agreement, dated December 27, 2011, by and among Triangle Services Inc., ShelterClean, Inc. and GTJ REIT, Inc. (schedules have been omitted, and the Company agrees to furnish supplementally a copy of all omitted schedules to the SEC upon its request) (Incorporated by reference to Exhibit 2.2 to Registrant’s Current Report on Form 8-K/A filed with the SEC on February 1, 2012).

10.14 Bill of Sale, dated January 12, 2012, by and between ShelterClean of Arizona, Inc. and Shelter Clean Services, Inc. (Incorporated by reference to Exhibit 10.38 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on March 30, 2012). 10.15 Assignment and Assumption Agreement, dated January 12, 2012, by and between ShelterClean of Arizona, Inc. and Shelter Clean Services, Inc. (Incorporated by reference to Exhibit 10.39 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on March 30, 2012). 10.16 Lease Agreement, dated June 6, 2012, by and between Farm Springs Road, LLC and United Technologies Corporation. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K, filed with the SEC on June 7, 2012). 10.17 Share Purchase Agreement by and between Shelter Express Corp. and Manisha Patel. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on December 26, 2012). 10.18 Contribution Agreement by and among Wu/Lighthouse Portfolio, LLC, GTJ REIT, Inc., GTJ GP, LLC, GTJ Realty, LP, Jeffrey Wu, Paul Cooper, Louis Sheinker, Jerome Cooper, Jeffrey Ravetz and Sarah Ravetz dated as of January 1, 2013 (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 24, 2013). 10.19 Amended and Restated Limited Partnership Agreement by and between GTJ REIT, Inc. and GTJ GP, LLC dated as of January 1, 2013 (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 24, 2013). 10.20 Tax Protection Agreement by and among GTJ REIT, Inc., GTJ Realty, LP, Jeffrey Wu, Wu Family 2012 Gift Trust, Paul Cooper, Jerome Cooper, Jeffrey Ravetz, Sarah Ravetz and Louis Sheinker dated as of January 1, 2013 (Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 24, 2013). 10.21 Registration Rights Agreement by and among GTJ REIT, Inc. and certain investors dated as of January 1, 2013 (Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 24, 2013). 10.22 Employment Agreement by and between Paul Cooper and GTJ REIT, Inc. dated as of January, 2013 (Incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 24, 2013). 10.23 Employment Agreement by and between Louis Sheinker and GTJ REIT, Inc. dated as of January, 2013 (Incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 24, 2013).

10.24 First Amendment to Loan and Security Agreement by and among Wu/LH 15 Progress L.L.C. (“15 Progress”), Paul A. Cooper, Jeffrey D. Ravetz, Louis E. Sheinker, Jeffrey Wu, GTJ REIT, Inc., GTJ Realty, LP, and Peoples United Bank (“PUB”) dated as of January 1, 2013 for a loan in the original principal amount of $2,700,000.00 (Incorporated by reference to Exhibit 10.35 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on February 19, 2013). 10.25 Loan and Security Agreement by and among 15 Progress and PUB dated as of September 30, 2010 in the original principal amount of $2,700,000.00 (Incorporated by reference to Exhibit 10.36 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on February 19, 2013).

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit Number Exhibit 10.26 Promissory Note made by 15 Progress to PUB dated as of September 30, 2010 in the principal sum of $2,700,000.00 (Incorporated by reference to Exhibit 10.37 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on February 19, 2013). 10.27 Open-End Mortgage Deed and Security Agreement by and among 15 Progress and PUB dated as of September 30, 2010 in the principal sum of $2,700,000.00 (Incorporated by reference to Exhibit 10.38 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on February 19, 2013). 10.28 Substitute Limited Guaranty by GTJ REIT, Inc. to PUB dated as of January, 2013 (Incorporated by reference to Exhibit 10.39 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on February 19, 2013). 10.29 Open-End First Mortgage Deed, Security Agreement and Fixture Filing executed by Farm Springs Road, LLC, GTJ REALTY, LP, GTJ GP, LLC and GTJ REIT, INC dated February 22, 2013 (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 28, 2013). 10.30 Promissory Note executed by Farm Springs Road, LLC, GTJ REALTY, LP, GTJ GP, LLC and GTJ REIT, INC dated February 22, 2013 (Incorporated by reference to Exhibit 10.2 the Registrant’s Current Report on Form 8-K filed with the SEC on February 28, 2013). 10.31 Guaranty for the benefit of Aviva Life and Annuity Company executed by GTJ REALTY, LP, GTJ GP, LLC and GTJ REIT, INC dated February 22, 2013 (Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 28, 2013). 10.32 Reserve Agreement executed by Farm Springs Road, LLC, GTJ REALTY, LP, GTJ GP, LLC and GTJ REIT, INC dated February 22, 2013 (Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 28, 2013). 10.33 Amended and Restated Mortgage, Assignment of Rents and Leases, and Security Agreement dated April 3, 2013, by and between Wu/LH 103 Fairview Park LLC, and Wu/LH 404 Fieldcrest LLC and Genworth Life Insurance Company (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 9, 2013). 10.34 Amended and Restated Promissory Note dated April 3, 2013, payable to the order of Genworth Life Insurance Company in the stated principal amount of $14,400,000 (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 9, 2013). 10.35 Unconditional Guaranty dated April 3, 2013, by GTJ Realty, L.P. to and for the benefit of Genworth Life Insurance Company (Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 9, 2013). 10.36 Environmental Indemnity dated April 3, 2013, by and between Wu/LH 103 Fairview Park LLC, Wu/LH 404 Fieldcrest LLC, GTJ Realty L.P. and Genworth Life Insurance Company (Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 9, 2013). 10.37 Mortgage, Assignment of Rents and Leases, and Security Agreement dated April 3, 2013, by and between Wu/LH 300 American LLC and Wu/LH 500 American LLC and Genworth Life Insurance Company (Incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K, filed with the SEC on April 9, 2013). 10.38 Loan Agreement, dated as of April 8, 2014 (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 10, 2014). 10.39 Pledge and Security Agreement, dated as of April 8, 2014 (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on April 10, 2014). 10.40 Payment Guaranty Agreement, dated as of April 8, 2014 (Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 10, 2014). 10.41 Promissory Note dated as of April 8, 2014 (Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 10, 2014). 10.42 Ben Zimmerman Employment Letter (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 9, 2014).

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit Number Exhibit 10.43 Amended and Restated Separation Agreement and General Release with D. Cooper, effective as of January 15, 2015 (Incorporated by reference to Exhibit 10.123 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 27, 2015). 10.44 Mortgage, Assignment of Leases, Rents and Contracts, Security Agreement and Fixture Filing (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on April 14, 2015). 10.45 Form of Mortgage Note (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on April 14, 2015). 10.46 Nonrecourse Exception Indemnity and Guaranty Agreement dated as March 13, 2015 (Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on April 14, 2015). 10.47 Environmental Indemnity Agreement dated as of March 13, 2015 (Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on April 14, 2015). 10.48 Loan Agreement (CT/NJ) dated as of February 20, 2015 (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on April 24, 2015). 10.49 Loan Agreement (NY) dated as of February 20, 2015 (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on April 24, 2015). 10.50 Form of Promissory Note (Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on April 24, 2015). 10.51 Guaranty Agreement dated as of February 20, 2015 (Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on April 24, 2015). 10.52 Pledge and Security Agreement dated as of February 20, 2015 (Incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K/A filed with the SEC on April 24, 2015). 10.53 Credit Agreement with Keybank National Association and Keybanc Capital Markets Inc., dated as of December 2, 2015 (Incorporated by reference to Exhibit 10.134 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 29, 2016). 10.54 Form of Joinder Agreement (Incorporated by reference to Exhibit 10.135 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 29, 2016). 10.55 Form of Assignment and Acceptance Agreement (Incorporated by reference to Exhibit 10.136 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 29, 2016).

10.56 Executive Employment Agreement by and between Paul Cooper and the Company (Incorporated by reference to Exhibit 10.137 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 29, 2017).

10.57 Executive Employment Agreement by and between Louis Sheinker and the Company (Incorporated by reference to Exhibit 10.138 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 29, 2017). 10.58 GTJ REIT, Inc. 2017 Incentive Award Plan (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form S-8 Registration Statement (No. 333-218667), filed with the SEC on June 12, 2017). 10.59 First Amendment to Credit Agreement and Other Loan Documents, dated June 30, 2016, by and among GTJ Realty, LP, the Company, certain subsidiaries and/or affiliates of the Company, KeyBank National Association and the other lending institutions party thereof (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2017). 10.60 Second Amendment to the Credit Agreement and Other Loan Documents, dated July 27, 2017, by and among GTJ Realty, LP, the Company, certain subsidiaries and/or affiliates of the Company, KeyBank National Association and the other lending institutions party thereof (schedule has been omitted, and the Company agrees to furnish supplementally to the SEC a copy of the omitted schedule upon its request) (Incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2017).

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit Number Exhibit 10.61 Severance Agreement and General Release, dated November 13, 2017, by and between the Company and Ben Zimmerman (filed herewith). 10.62 Employment Letter, dated November 14, 2017, by and between the Company and Stuart Blau (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on November 20, 2017). 10.63 Loan Agreement, dated December 20, 2017, by and among the Company, certain subsidiaries and/or affiliates of the Company, United States Life Insurance Company, and other lending institutions party thereto (filed herewith). 10.64 Promissory Note, dated December 20, 2017, made by the Company and certain subsidiaries and/or affiliates of the Company in favor of United States Life Insurance Company (filed herewith). 10.65 Environmental Indemnity Agreement, dated December 20, 2017, executed by the Company and certain subsidiaries and/or affiliates of the Company in favor of United States Life Insurance Company (filed herewith). 10.66 Guaranty Agreement, dated December 20, 2017, executed by the Company in favor of United States Life Insurance Company (filed herewith). 14.1 Amended and Restated Code of Business Conduct and Ethics, adopted as of January 30, 2018 (filed herewith). 21.1 Subsidiaries of GTJ REIT, Inc. (filed herewith).

23.1 Consent of Independent Registered Public Accounting Firm BDO USA, LLP, (filed herewith). 31.1 Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14 or 15d-14, filed herewith. 31.2 Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14 or 15d-14, filed herewith. 32.1 Certification of Chief Executive Officer, filed herewith. 32.2 Certification of Chief Financial Officer, filed herewith. 99.1 Share Redemption Program (Incorporated by reference to Exhibit 99.1 to the Registrants Current Report on Form 8-K filed with the SEC on January 23, 2017). 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB XBRL Taxonomy Extension Labels Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document GTJ REIT, Inc Schedule III- Consolidated Real Estate and Accumulated Depreciation (in thousands)

Cost Capitalized Gross Amount at Initial Cost to Subsequent to Which Carried at Company Acquisition December 31, 2017 Buildings & Buildings & Accumulated Date of Date Property Encumbrances Land Improvements Improvements Land Improvements Total Depreciation Construction Acquired New York Industrial: 103 Fairview Park 1/17/ 3,416 9,972 375 3,416 10,347 13,763 1,480 1988 Drive, Elmsford, NY B 2013 412 Fairview Park 1/17/ 3,237 572 — 3,237 572 3,809 71 n/a Drive, Elmsford, NY F 2013 401 Fieldcrest Drive, 1/17/ 3,008 7,097 — 3,008 7,097 10,105 913 n/a Elmsford, NY F 2013 404 Fieldcrest Drive, 1/17/ 2,275 7,822 303 2,275 8,125 10,400 1,084 1996 Elmsford, NY B 2013 36 Midland Ave, Port 1/17/ 2,428 6,409 391 2,428 6,800 9,228 938 1979 Chester, NY F 2013 100-110 Midland Ave, Port 1/17/ 5,390 16,463 113 5,390 16,576 21,966 2,180 1979 Chester, NY F 2013 199 Ridgewood Drive, 1/17/ 827 1,916 — 827 1,916 2,743 288 1992 Elmsford, NY F 2013 203 Ridgewood Drive, 1/17/ 948 2,265 — 948 2,265 3,213 333 1986 Elmsford, NY F 2013 8 Slater Street, Port Chester, 1/17/ 1,997 4,640 382 1,997 5,022 7,019 756 1984 NY F 2013 612 Wortman Ave, 3/26/ 8,907 117 4,284 8,907 4,401 13,308 3,402 1965 Brooklyn, NY F 2007 165-25 147th Ave, Jamaica, 3/26/ 360 3,821 856 360 4,677 5,037 4,677 1952 NY F 2007 114-15 Guy Brewer Blvd, 3/26/ 23,100 6 2,067 23,100 2,073 25,173 2,073 1965 Jamaica, NY F 2007 49-19 Rockaway Beach 3/26/ 74 783 31 74 814 888 812 1931 Blvd, Far Rockaway, NY F 2007 85-01 24th Ave, East 3/26/ 38,210 937 2,343 38,210 3,280 41,490 3,038 1954 Elmhurst, NY F 2007 23-85 87th Street, East 3/26/ 14,506 323 1,168 14,637 1,360 15,997 1,081 1966 Elmhurst, NY F 2007 28-20 Borden Ave, Long 26,678 98 125 26,678 223 26,901 90 n/a 7/2/2014 Island City, NY E 606 Cozine Ave, Brooklyn, 5/10/ 3,304 6,469 — 3,304 6,469 9,773 719 1969 NY H 2016 201 Neelytown Road, 8/31/ 4,751 27,906 — 4,751 27,906 32,657 289 2017 Montgomery, NY H 2017 Retail: 112 Midland Ave, Port 3/26/ 786 422 — 786 422 1,208 88 1980 Chester, NY F 2007 Total NY: 144,202 98,038 12,438 144,333 110,345 254,678 24,312 New Jersey Industrial: 100 American Road, Morris 1/17/ 2,275 12,538 367 2,275 12,905 15,180 1,817 1986 Plains, NJ F 2013 200 American Road, Morris 1/17/ 725 5,361 50 725 5,411 6,136 740 2004 Plains, NJ F 2013 300 American Road, Morris 1/17/ 1,466 6,628 47 1,466 6,675 8,141 912 1987 Plains, NJ B 2013 400 American Road, Morris 1/17/ 1,724 9,808 239 1,724 10,047 11,771 1,494 1990 Plains, NJ F 2013 500 American Road, Morris 1/17/ 1,711 8,111 — 1,711 8,111 9,822 1,099 1988 Plains, NJ B 2013 20 East Halsey Road, 4/23/ 1,898 1,402 5,399 1,898 6,801 8,699 475 1970 Parsippany, NJ 2014 1110 Centennial Ave, 3/13/ 790 1,937 7 790 1,944 2,734 183 1979 Piscataway, NJ G 2015 11 Constitution Ave, 3/13/ 1,780 8,999 — 1,780 8,999 10,779 703 1989 Piscataway, NJ G 2015 21 Constitution Ave, 3/13/ 6,187 18,855 — 6,187 18,855 25,042 1,599 2002 Piscataway, NJ G 2015 4 Corporate Place, 3/13/ 2,145 1,744 144 2,145 1,888 4,033 253 1974 Piscataway, NJ G 2015

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8 Corporate Place, 3/13/ 2,666 4,381 — 2,666 4,381 7,047 470 1977 Piscataway, NJ G 2015 1938 Olney Avenue, Cherry 7/27/ 1,176 5,357 — 1,176 5,357 6,533 114 1966 Hill, NJ H 2017 Office: 25 Corporate Place, 3/13/ 2,269 8,343 — 2,269 8,343 10,612 730 1985 Piscataway, NJ G 2015 Total NJ: 26,812 93,464 6,253 26,812 99,717 126,529 10,589 Connecticut Industrial: 466 Bridgeport Ave, Shelton, 1/17/ 833 867 3,240 833 4,107 4,940 336 1982 CT 2013 470 Bridgeport Ave, Shelton, 1/17/ 2,660 4,807 89 2,660 4,896 7,556 699 1973 CT F 2013 15 Progress Drive, Shelton, 1/17/ 984 3,411 — 984 3,411 4,395 514 1980 CT C 2013

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 10/15/ 33 Platt Road, Shelton, CT 3,196 5,402 — 3,196 5,402 8,598 1,311 1972 F 2014 950-974 Bridgeport Ave, Milford, CT F 1,551 3,524 32 1,551 3,556 5,107 493 1946 1/17/2013 12 Cascade Blvd, Orange, CT F 1,688 3,742 2 1,688 3,744 5,432 491 1987 1/17/2013 15 Executive Blvd., Orange, CT F 1,974 5,357 1,004 1,974 6,361 8,335 1,057 1983 1/17/2013 25 Executive Blvd., Orange, CT F 438 1,481 33 438 1,514 1,952 189 1983 1/17/2013 22 Marsh Hill Rd, Orange, CT F 1,462 2,915 575 1,462 3,490 4,952 461 1989 1/17/2013 269 Lambert Rd, Orange, CT F 1,666 3,516 230 1,666 3,746 5,412 647 1986 1/17/2013 110 Old County Circle, Windsor Locks, CT D 1,572 11,797 60 1,572 11,857 13,429 1,983 2003 4/8/2014 112 Old County Road, Windsor Locks, CT 200 — 5,442 200 5,442 5,642 — n/a 4/8/2014 4 Meadow Street, Norwalk, CT F 856 3,034 307 856 3,341 4,197 446 1992 8/22/2014 777 Brook Street, Rocky Hill, CT F 2,456 8,658 415 2,456 9,073 11,529 901 1969 1/14/2015 Office: 8 Farm Springs Road, Farmington, CT A 3,533 16,248 3,832 3,533 20,080 23,613 8,043 1980 2/28/2008 35 Executive Blvd., Orange, CT F 1,080 8,909 269 1,080 9,178 10,258 1,516 1988 1/17/2013 Total CT: 26,149 83,668 15,530 26,149 99,198 125,347 19,087 Delaware Industrial: 300 McIntire Drive, Newark, DE H 2,488 13,033 111 2,488 13,144 15,632 1,148 1999 6/1/2016 Total DE: 2,488 13,033 111 2,488 13,144 15,632 1,148 Grand Total: 199,651 288,203 34,332 199,782 322,404 522,186 55,136

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Lender Principal Outstanding A—Athene Life and Annuity $ 15,000 B—Genworth Life Insurance Company 26,574 C—People’s United Bank 2,249 D—Hartford Accident 6,000 E—People’s United Bank 15,500 F—American International Group 233,100 G—Allstate Corporation 39,100 H—United States Life Insurance Company 39,000 Total $ 376,523

None.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GTJ REIT, INC.

Dated: March 29, 2018 By: /s/ Paul A. Cooper Paul A. Cooper Chief Executive Officer (Principal Executive Officer)

By: /s/ Stuart Blau Stuart Blau Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Paul A. Cooper Chairman, Chief Executive Officer and Director March 29, 2018 Paul A. Cooper (Principal Executive Officer)

/s/ Louis Sheinker President, Chief Operating Officer, Secretary and March 29, 2018 Louis Sheinker Director

/s/ Stuart Blau Chief Financial Officer and Treasurer (Principal March 29, 2018 Stuart Blau Financial and Accounting Officer)

/s/ Douglas Cooper March 29, 2018 Director Douglas A. Cooper

/s/ John J. Leahy March 29, 2018 Director John J. Leahy

/s/ Stanley R. Perla March 29, 2018 Director Stanley R. Perla

/s/ Donald M. Schaeffer March 29, 2018 Director Donald M. Schaeffer

/s/ Harvey I. Schneider March 29, 2018 Director Harvey I. Schneider

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXHIBIT 10.61 SEVERANCE AGREEMENT AND GENERAL RELEASE 1.This Severance Agreement and General Release (“Agreement”) is between Ben Zimmerman (“You”, “You”, “your” or “Your”), an individual with an address of and GTJ REIT, Inc. (the “Company”). Upon Your acceptance of the terms and conditions set forth in this Agreement, the Company agrees to provide You with the severance package set forth in this Agreement on the conditions set forth herein.

2.Last Day of Employment: You have voluntarily tendered your resignation and your last day of employment with the Company is mutually agreed to constitute November 13, 2017. (“Last Day”) and You will be paid your regular salary for all days worked through the Last Day.

3.Separation Payments: In consideration of your signing this Agreement and your other promises and covenants contained herein, the Company will, after the expiration of any statutory revocation periods pay You (or in the alternative Your estate in the event You predecease payment and this Agreement is otherwise valid and enforceable) the following sums to which You are not otherwise entitled:

a. The Company will pay You $112,287.25 (which sum includes payment for any unused vacation time even though You are not otherwise entitled to payment for unused vacation time) less payroll deductions after the expiration of any statutory revocation periods;

b. The Company will additionally pay You $37,712.75 for the 3,005 shares (whether vested or unvested) in the Company that You own subsequent to your transfer to the Company of said shares;

c. You will immediately and irrevocably surrender and/or transfer any and all shares in the Company that You own to the Company and execute appropriate paperwork to effectuate said transfer and You represent and affirm that You have not transferred or encumbered any shares in the Company that You own or have owned, been awarded or purchased at any time to any person or entity at any time. You agree and represent that You have no further rights regarding or interest in any unvested shares in the Company that may have been awarded to You;

d. You shall never through yourself or an agent own any shares in the Company at any time in the future;

e. You will not attend any Company shareholder meetings at any time in the future; and

f. You hereby waive any right under Section 5003-a of the New York Civil Practice Law and Rules to receive any consideration described in this Agreement at a time or in any manner other than that expressly provided for in this paragraph.

a.In consideration of the above, and all of the terms of this Agreement, You, Ben Zimmerman, for yourself, your agents, successors, heirs and assigns (“Releasors”), do hereby release, remise and forever discharge GTJ REIT, Inc. and each of its parents, subsidiaries, affiliates, related entities, predecessors, successors, assigns, and each of its current and former agents, servants, shareholders, employees, officers, directors, managers, executives, members, trustees, employees, representatives, board members, attorneys, investors and insurers and each of their heirs, successors, executors and administrators and all persons acting by, through, under and/or in concert with any of them (“Releasees”) of and from any and all claims, demands, causes of action, actions, rights, damages, judgments, costs, compensation, suits, debts, dues, accounts, bonds, covenants, agreements, expenses, attorneys’ fees, damages, penalties, punitive damages and liability of any nature whatsoever, in law or in equity or otherwise, which Releasors (You) have had, now have, shall or may have, whether known or unknown, foreseen or unforeseen, suspected or unsuspected, by reason of any cause, matter or thing whatsoever, from the beginning of the world to the effective date of this Agreement, including those relating to or arising out of your employment with the Company and/or its affiliates, the terms and conditions of such employment, and the termination of that employment.

b.By the general release set forth in this paragraph, You acknowledge that You are giving up all claims relating to or arising out of your employment with GTJ REIT, Inc. and/or its affiliates, the terms and conditions of such employment, and the termination of that employment, including but not limited to claims for breach of contract or implied contract, wrongful, retaliatory or constructive discharge, negligence, misrepresentation, fraud, detrimental reliance, promissory estoppel, defamation, invasion of privacy, impairment of economic opportunity, tortious interference with contract or business relationships, intentional or negligent inflection of emotional distress, any and all other torts, and claims for attorneys’ fees, as well as including but not limited to any and all statutory claims referred to herein.

c.You further acknowledge that various federal, state and local laws prohibit discrimination based on age, gender, sexual orientation, race, color, national origin, religion, disability, handicap or veteran’s status. These include Title VII of the Civil Rights Act of 1964, the Civil Rights Acts of 1866 and 1871, and the Civil Rights Act of 1991 (relating to gender, national origin, religion, race and certain other kinds of job discrimination); the Pregnancy Discrimination Act; the Age Discrimination in Employment Act and the Older Workers’ Benefit Protection Act (relating to age discrimination in employment); the Rehabilitation Act of 1973, the Americans with Disabilities Act, and Delaware’s Handicapped Persons Employment Protections Act (relating to disability discrimination in employment); the New York Human Rights Act (prohibiting all of the above forms of employment discrimination); and the New York City Human Rights Law (prohibiting all of the above forms of employment discrimination). You understand and acknowledge that this general release applies to all such employment-related claims that You now have or may have had through the effective date of this Agreement.

d.You also understand and acknowledge that there are various federal and state laws governing benefit issues, wage and hour issues, and other employment issues, including, but not limited to, the Employee Retirement Income Security Act (excluding claims for vested benefits), the Sarbanes-Oxley Act of 2002, the National Labor Relations Act, the Fair Labor Standards Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, the New York Wage Payment Law, the Delaware Wage Payment and Collection Act, wage and hour laws, whistleblower laws and other

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document laws. You acknowledge that You are giving up any claims You may have under any of these statutes and under any other federal, state or municipal statute, ordinance, executive order or regulation relating to discrimination in employment, wage and hour issues, or in any way pertaining to employment relationships. You also understand and acknowledge that You are giving up any and all claims for benefits including, but not limited to, life insurance, accidental death and disability insurance, sick leave or other employer provided plan or program; claims for distributions of income or profit; claims for reimbursement; claims for wages; claims for vacation or other leave time; claims relating to retirement, pension and/or profit sharing plans (excluding claims for vested benefits); claims for group health insurance coverage (excluding claims for COBRA continuation coverage); or any other claims. You understand and acknowledge that this general release applies to all such employment- related claims that You now have or may have had through the effective date of this Agreement.

e.You further agree that neither You, nor anyone on your behalf shall or may seek, or be entitled to recover reasonable attorneys’ fees and costs pursuant to any of the aforementioned federal, state or local statutes, or any other such laws. You understand and acknowledge that the general release set forth in this paragraph applies to all claims and causes of action, including but not limited to, employment-related claims, which You now have or may have had through the date of this Agreement.

f.The general release set forth in this paragraph is intended to comply with Section 201 of the Older Workers’ Benefit Protection Act of 1990, 29 U.S.C. § 626(f). Accordingly, You acknowledge, represent and certify as follows:

(i) that You waive all rights or claims under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (“ADEA”), knowingly and voluntarily in exchange for consideration of value to which You would not otherwise have been entitled;

(ii) that by this Agreement You have been advised in writing by the Company to consult with an attorney of your choice in conjunction with this Agreement and your decision to waive your rights or claims under the ADEA or otherwise;

(iii) that You have been given a period of at least twenty-one (21) days within which to consider this Agreement and your decision to waive your rights under the ADEA or otherwise;

(iv) that You have been informed by the Company and understand that You may revoke your acceptance of this Agreement for a period of seven (7) days after signing it, and that this Agreement will not become effective or enforceable until after the seven (7) day period has expired, and that any revocation You make shall be in writing, sent by regular mail or overnight mail for receipt within the seven (7) day revocation period to our attorney: Mark L Lubelsky, Mark L. Lubelsky And Associates, 123 West 18th Street, 8th Floor, New York, New York 10011; and

(v) that You further understand that if You revoke your acceptance as described above, this Agreement shall be null and void in its entirety, and if You have not revoked this Agreement by the end of the seven (7) day period referenced in the last paragraph, this Agreement will be in full force and effect.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document g. Notwithstanding any local or other law to the contrary, You expressly agree that this Agreement and this Paragraph 4 will extend and apply to all claims, injuries and damages that You may have against the Company or any Releasees at the time You sign this Agreement, regardless of whether You are aware or suspect such claims, injuries or damages at the time You sign this Agreement.

h. Notwithstanding anything contained herein to the contrary, nothing contained herein shall prevent You or the Company from enforcement of any rights arising under, or to enforce the terms of this Agreement. It shall not constitute a breach of any provision of this Agreement if this Agreement is introduced as evidence or as an exhibit in a court of competent jurisdiction to enforce the terms of this Agreement or establish the existence and/or terms of this Agreement in any action or proceeding between the Company and yourself.

5.Reimbursement: You agree that if You commence any action, proceeding or lawsuit or submit any claim or charge to any agency arising out of your employment with the Company that You will immediately reimburse to the Company any and all payments, monies and benefits that You received from the date of your execution of this Agreement and that the Company will have no further payment obligations to You. You agree that even though You will be required to reimburse the Company as described immediately above and that all payment obligations of the Company will immediately cease if You commence an action proceeding or lawsuit or submit any claim or charge to any agency arising out of your employment with the Company that You will still be bound by all of the terms and conditions of this Agreement.

6.No Admission and Joint Drafting: This Agreement shall not be construed as an admission by the Company and/or You or that either has acted wrongfully with respect to the other. This Agreement is the result of the joint efforts of You and the Company and no party shall be considered to be the drafter. Any uncertainty or ambiguity shall not be interpreted against one party in favor of the other.

7.Return of Company Property: By signing this Agreement, You represent that You have returned to the Company all keys, identification cards, credit cards, laptop (s), electronic devices, telephones, demonstration equipment, other equipment, passwords, computer codes, documents and other property, devices, and information of the Company in your possession, custody, or control including, but not limited to, any information contained in any computer files maintained by You during your employment with the Company. You certify that You have not kept the originals or copies of any documents, files, or other property of the Company that You obtained or received during your employment with the Company and that You have not removed or deleted any data, information or files without prior authorization from said Company equipment except as may have been appropriate in the ordinary course of business.

To the extent You are still in possession of any Company property, equipment, devices, and information, You agree to return all such property, equipment, devices, and information to: GTJ REIT, Inc., 60 Hempstead Avenue, Suite 718, West Hempstead, NY 11552 for delivery immediately.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8.No Re-Employment. You agree that your employment relationship with the Company and its affiliates is being permanently and irrevocably severed, and You are not eligible for re-employment with the Company or its affiliates and You agree that any failure to re-employ You will not constitute a discriminatory action.

9.Unemployment Compensation. The Company will not contest or object to any application You may make for unemployment compensation, during your period of unemployment.

10.Confidentiality and Non-Disparagement: You agree that the existence, terms and provisions of this Agreement are strictly confidential, and that You shall not disclose them to any person or entity, other than to your immediate family, your attorney, and your professional accountant, or licensed financial advisors. You shall be required to advise your immediate family, your attorney, and your professional accountant, or licensed financial advisors that any information that You provide to them regarding this Agreement or your employment with the Company is subject to strict confidentiality provisions. You shall be responsible for a breach of the confidentiality and non-disparagement provisions of this Agreement by any person to whom You have disclosed the terms of this Agreement as if You yourself had breached said terms. You agree that any information that You learned regarding the business and operations of the Company during your employment are strictly confidential. You agree that if You breach this Confidentiality provision that You will immediately reimburse to the Company any and all wages, monies and benefits that You received from the date of your execution of this Agreement and that the Company will have no further payment obligations to You. You agree that You will remain bound by all of the terms and conditions of this Agreement.

The Company agrees and represents that its Officers will not defame You either orally or in writing. This provision does not apply to testimony, answers or responses compelled, demanded, requested or required: (1) by the Securities and Exchange Commission (hereafter “SEC”), the Financial Regulatory Authority (hereafter “FINRA”) or other securities regulatory or self-regulatory agencies or authorities or their staff; or (2) by applicable law, rule, regulation or legal process or procedure.

The Company and its employees, Officers and Directors shall provide to its auditors and regulatory or governmental agencies or authorities any information requested or required by such entities and the provision of such information shall not constitute a breach of any duty of the Company under this Agreement and shall not constitute the basis for any action against the Company or the Releasees.

The Company and its employees, Officers and Directors may at all times respond to any inquiry from any source that You resigned and that a confidentiality agreement exists and the provision of such information shall not constitute a breach of any duty of the Company under this Agreement and shall not constitute the basis for any action against the Company or the Releasees.

The terms of this Agreement shall be disclosed by the Company in a Form 8-K and will be filed as an attachment to a Form 10-K.

Notwithstanding anything to the contrary contained herein, nothing contained herein prohibits or restricts You from communicating with, or assisting the investigations of the Securities and Exchange Commission (hereafter “SEC”), the Financial Regulatory Authority (hereafter “FINRA”) or other securities regulatory or self-regulatory

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document agencies or authorities or their staff regarding possible securities laws violations without notice (prior or otherwise) to the Company or from Your receipt of awards for Your provision of information or assistance with investigations.

You agree that You have had access to confidential, proprietary and trade secret information about the Company, its employees, customers and clients, which derives economic value from not being otherwise known to the general public (hereafter “Confidential Information and Trade Secrets”) and that Confidential Information and Trade Secrets provide a competitive advantage to the Company specifically because they would be valuable to a competitor if disclosed. You acknowledge and agree that the improper use or disclosure of the Company’s Confidential Information and Trade Secrets would cause immediate and irreparable damage to the Company’s business.

You agree that You shall not directly or indirectly, alone or in concert with or on behalf of others, use, publish or otherwise disclose any aspect of the Company’s Confidential Information and Trade Secrets to any person or entity outside the Company except pursuant to formal legal process in the form of a “so ordered” subpoena or other Order of a Court.

If You are served with formal legal process or a Court Order that requests or demands disclosure of any information of any nature regarding the Company You must immediately and within one business day of your receipt of said legal process or Court Order notify the Company and its counsel. Notice to be sent by overnight mail via nationally recognized courier to GTJ REIT, Inc., 60 Hempstead Avenue, Suite 718, West Hempstead, NY 11552 and to Mark L. Lubelsky and Associates, 123 West 18th Street, 8th Floor, New York, New York 10011 and by facsimile to 646-619-4631.

To the extent that You are unaware or unsure of whether certain information constitutes Confidential Information and Trade Secrets, You agree to consult with Mark Lubelsky at 212-242-7480 before utilizing the information.

You agree and represent that You will not defame or disparage the Company, its employees, shareholders, board members, officers or directors to any third party, either orally or in writing. You further agree to refrain from directly or indirectly engaging in any publicity or communications, including written, oral and electronic communication of any kind, or any other activity which reflects negatively or adversely upon the Company, its business, its employees, shareholders, board members, officers or directors, whether or not You believe the content of the publicity or communication to be true or whether or not it is, in fact true. This provision does not apply to truthful testimony compelled by applicable law or legal process provided that notice of the demand for such truthful testimony is immediately and within one business day of receipt sent by overnight mail via nationally recognized courier to GTJ REIT, Inc., 60 Hempstead Avenue, Suite 718, West Hempstead, NY 11552 and to Mark L. Lubelsky and Associates, 123 West 18th Street, 8th Floor, New York, New York 10011 and by facsimile to 646-619-4631.

You agree that each of the provisions contained within Section 10 are material terms of this Agreement and that if You breach any provision of this Section 10 that You will immediately reimburse to the Company any and all wages, monies and benefits that You received from the date of your execution of this Agreement and that the Company will have

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document no further payment obligations to You. You agree that You will remain bound by all of the terms and conditions of this Agreement.

11.Entire Agreement, Severability and Signatures: This Agreement sets forth the entire understanding of the parties and cannot be modified except in writing, signed by both You and the Company. This Agreement may be executed in counterparts and each set of original executed counterparts shall be deemed an original copy of this Agreement. Faxed or photocopied signatures are authorized and acceptable and shall have the same force and effect as that of an original. Should any of the material provisions of this Agreement be rendered invalid by a Court or government agency of competent jurisdiction, or should You fail to fulfill your obligations under it, the remainder of this Agreement shall, to the fullest extent permitted by applicable law and at the Company’s option, remain in full force and effect, and/or You shall be obligated to return, in full or in part, as determined by the Company, any and all consideration You received pursuant to the terms of this Agreement.

12.Cooperation: You agree to cooperate with the Company in connection with any legal matters, if so requested by the Company, including but not limited to making yourself available at the Company’s request to assist in matters requiring the provision of information and/or testimony. The Company shall, to the extent feasible, schedule your cooperation in a manner that is not unreasonably disruptive.

You agree that as a condition of receipt of the payment(s) described in paragraph 3 above that You will meet (either in person or telephonically) with the Chair of the Audit Committee of the Company’s Board of Directors and honestly and forthrightly answer the inquiries presented to You in accordance with the requirements of the Audit Committee Charter.

13.Tax Reporting and Indemnification: The Company will issue appropriate Internal Revenue Service Forms in the relation to the payment(s) described in paragraph 3 above. You agree to pay any amount that may be determined to be due and owing as taxes, interest and penalties arising out of the payment by the Company. You agree to hold the Company harmless against, and to defend and indemnify the Company for and against any and all claims by the Internal Revenue Service or any other taxing authority or taxing agency (whether federal, state or local) which may be made against the Company arising out of any alleged failure by You to pay any appropriate taxes.

14.Section 409A of the Internal Revenue Code. The intent of the parties is that payments under this Agreement comply with or be exempt from Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Section 409A”).

a. Notwithstanding anything to the contrary in this Agreement, if the Company determines that (i) on the date your employment with the Company terminates, You are a Specified Employee (as defined in Section 409A) and (ii) any payments to be provided to You pursuant to this Agreement are or may become subject to taxes under Section 409A, then such payments shall be delayed until the date that is six (6) months and one day after the date of your Separation from Service (as defined in Section 409A) with the Company.

b. Any terms of this Agreement that are undefined or ambiguous shall be interpreted by the Company in a manner that complies with Section 409A.

15.Acknowledgement: You further acknowledge and represent as follows:

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document a. You have carefully read and fully understand all of the provisions of this Agreement, including the fact that You have agreed to release and forever discharge the Releasees from any legal action arising out of your employment with the Company, the terms and conditions of such employment, and the termination of that employment;

b. You waive all rights and claims against Releasees, knowingly and voluntarily, in exchange for consideration of value to which You are not otherwise entitled;

c. You have been advised in writing by the Company, and You have been given a reasonable opportunity, to consult with an attorney or advisor of your choice in connection with this Agreement, and your decision to waive any rights or claims You may have against Releasees; and

d. You have been given a reasonable period of time within which to consider this Agreement and your decision to enter into this Agreement.

16. Employment Verification: The Company will provide a neutral verification of your employment with the Company that will be limited to your name, job title and dates of employment and a statement that the provision of such information constitutes Company policy so long as the request is directed to: Paul Cooper, GTJ REIT, Inc., 60 Hempstead Avenue, Suite 718, West Hempstead, NY 11552

17. Additional Remedies For Breach: You acknowledge and understand that if You breach any provision of this Agreement, the Company shall have, in addition to and without limiting any other remedy that it may have under this Agreement, in law or in equity, the right to a temporary and permanent injunction restraining any such breach, without any bond or security being required. In any such proceeding, You waive any defense that the Company has an adequate remedy at law or that the injury suffered as a consequence is not irreparable. In addition to any damages that the Company may be entitled to, You will reimburse to the Company its attorneys’ fees incurred in any action or proceeding in which it is determined that You breached the terms of this Agreement.

18. Choice of Law and Jurisdiction: The Parties agree that this Agreement is governed by the laws of the State of New York, without regard to principles on conflict of law. The Parties consent to and agree that the sole jurisdiction and venue for the resolution of any disputes concerning this Agreement shall constitute the Supreme Court of the State of New York, County of Nassau, and/or the United States District Court for the Eastern District of New York unless specifically prohibited by applicable law.

19.Release Running to You: You represent and affirm that You have not engaged in any self- dealing, financial malfeasance, or improper or fraudulent financial transactions to the detriment of the Company. So long as the foregoing representation by You is true and You have returned all Company property the Company releases You from any and all claims, demands, causes of action, actions, rights, damages, judgments, costs, compensation, suits, debts, dues, accounts, bonds, covenants, agreements, expenses, attorneys’ fees, damages, penalties, punitive damages and liability of any nature whatsoever, in law or in equity or otherwise, which the Company has had, now have, shall or may have, whether known or unknown, foreseen or unforeseen, suspected or unsuspected, by reason of any cause, matter or thing whatsoever, from the beginning of the world to the effective date of this Agreement,

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document including those relating to or arising out of your employment with the Company and/or its affiliates, the terms and conditions of such employment, and the termination of that employment. Notwithstanding the foregoing, nothing contained herein shall constitute a release from Your obligations under this Agreement or will prevent the Company from enforcement of any rights arising under, or to enforce the terms of this Agreement.

20.Deadline to Accept Offer: You have 21 days from your receipt of this Agreement to accept this offer. You were provided a copy of this offer on November 13, 2017. You are strongly encouraged to consult with an attorney prior to your execution of this Agreement.

/s/ Ben Zimmerman 11/15/17 Ben Zimmerman Dated

State of New York ) ) ss.: County of )

On the day of in the year 2017 before me, the undersigned, a Notary Public in and for the State, personally appeared Ben Zimmerman personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s) or the person upon behalf of which the individual(s) acted, executed the instrument

/s/ Paul Cooper______GTJ REIT, Inc. By Paul Cooper, as Chief Executive Officer

State of New York ) ) ss.: County of )

On the day of in the year 2017 before me, the undersigned, a Notary Public in and for the State, personally appeared Paul Cooper personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s) or the person upon behalf of which the individual(s) acted, executed the instrument

LOAN AGREEMENT

Dated as of December 20, 2017

by and among

THE PARTIES SET FORTH ON SCHEDULE A attached hereto,

Each, a Borrower, and collectively, as Borrowers

and

THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK, a New York corporation,

as Lender

Loan Amount: $39,000,000.00

Page

ARTICLE 1 CERTAIN DEFINITIONS 1

1.1 Definitions1

ARTICLE 2 GENERAL TERMS 25

2.1 Loan25 2.2 Intentionally Omitted25 2.3 Security for the Loan25 2.4 The Note26 2.5 Principal and Interest26 2.6 Prepayment26 2.7 Application of Payments After Event of Default27 2.8 Method and Place of Payment to Lender27 2.9 Taxes27 2.10 Release of Collateral27 2.11 Intentionally Omitted28 2.12 Security Agreement28 2.13 Mortgage Recording Taxes30 2.14 Permitted Uses of Loan30 2.15 General Interest Provisions30

ARTICLE 3 CONDITIONS PRECEDENT 31

3.1 Conditions Precedent to Effectiveness31 3.2 Execution and Delivery of Agreement33 3.3 Acceptance of Borrowings33 3.4 Form of Loan Documents and Related Matters33 3.5 No Material Adverse Effect33

ARTICLE 4 REPRESENTATIONS AND WARRANTIES 34

4.1 Representations and Warranties as to each Borrower34 4.2 Representations and Warranties as to each Property39 4.3 Survival of Representations43

ARTICLE 5 AFFIRMATIVE COVENANTS 43

5.1 Affirmative Covenants43

ARTICLE 6 NEGATIVE COVENANTS 67

6.1 Negative Covenants67

7.1 Event of Default71 7.2 Remedies74 7.3 Remedies Cumulative75 7.4 Curative Advances75 7.5 Expenses of Enforcement76

ARTICLE 8 TRANSFERS, RELEASE OF PROPERTY 76

8.1 Transfers76 8.2 Intentionally Omitted80 8.3 Intentionally Omitted80 8.4 Release of Property80 8.5 One-Time Transfer82

ARTICLE 9 INTENTIONALLY OMITTED 83

ARTICLE 10 GENERAL PROVISIONS 83

10.1 Survival83 10.2 Lender’s Discretion83 10.3 Governing Law84 10.4 Modification, Waiver in Writing84 10.5 Delay Not a Waiver85 10.6 Notices85 10.7 TRIAL BY JURY86 10.8 Headings86 10.9 Assignment86 10.10 Severability87 10.11 Preferences87 10.12 Waiver of Notice87 10.13 Failure to Consent87 10.14 Exhibits and Schedules Incorporated87 10.15 Offsets, Counterclaims and Defenses88 10.16 No Joint Venture or Partnership88 10.17 Waiver of Marshaling of Assets Defense88 10.18 Conflict; Documents88 10.19 Brokers and Financial Advisors88 10.20 Counterparts89 10.21 Estoppel Certificates89 10.22 Payment of Expenses89 10.23 Time of the Essence90 10.24 No Third Party Beneficiaries90 10.25 Reinstatement90 10.26 Usury Savings Clause90

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 10.28 Joint and Several Obligation91 10.29 Successors and Assigns91 10.30 Subrogation of Lender91 10.31 Limitation on Liability91 10.32 Appointment of Servicer and Delegation of Lender Responsibilities93 10.33 Acceptance of Cures for Events of Default94 10.34 Binding Action.94 10.35 Reasonable Standard.94 10.36 Claims Against Lender.94

Exhibit A Borrowers’ Organizational Chart

Exhibit B Lender’s Wire Instructions

Exhibit C Land Descriptions

SCHEDULES

Schedule A List of Borrowers

Schedule 1.1(1) Allocated Loan Amount

Schedule 1.1(2) List of Properties

Schedule 1.1(3) List of Required Tenants

Schedule 4.1.6 Litigation

Schedule 4.2.17 Zoning Districts

Schedule 5.1.31 Cozine Environmental Obligations

THIS LOAN AGREEMENT, made as of December 20, 2017, by and among AMERICAN GENERAL LIFE INSURANCE COMPANY, a Texas corporation (together with its successors and assigns, “Lender”), THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK, a New York corporation (together with its successors and assigns, “Lender”), having an address at c/o AIG Investments, 777 S. Figueroa Street, 16th Floor, Los Angeles, California 90017-5800 and THE PARTIES SET FORTH ON SCHEDULE A attached hereto (each individually, as “Borrower”, and collectively, as “Borrowers”), each with an address at c/o GTJ REIT INC., 60 Hempstead Avenue, Suite 718, West Hempstead, New York, 11552.

RECITALS

Borrowers desire to obtain from Lender the Loan in an amount equal to the Loan Amount.

Lender is unwilling to make the Loan unless each Borrower executes and delivers this Agreement and the Note, and each Borrower and Guarantor executes and delivers the other Loan Documents to which such entity is a party, which Loan Documents shall establish the terms and conditions of, and provide security for, the Loan.

NOW, THEREFORE, in consideration of the making of the Loan by Lender and for other good and valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged, Borrowers and Lender hereby covenant, agree, represent and warrant as follows:

ARTICLE 1 CERTAIN DEFINITIONS

1.1Definitions. For all purposes of this Agreement: (1) the capitalized terms defined in this Section 1.1 have the meanings assigned to them in this Section 1.1 and include the plural as well as the singular; (2) unless otherwise expressly defined in this Agreement, all accounting terms have the meanings assigned to them in accordance with GAAP (hereinafter defined), consistently applied; (3) the words “herein”, “hereof”, and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, or other subdivision; (4) the words “Dollars” or “dollars” and the symbols “$” shall mean and refer to the currency of the United States of America; (5) the words “include”, “included,” “including”, “includes” and words of similar import shall be deemed to be followed by the words “without limitation”; (6) any requirement that a Person perform any covenant, obligation, promise, representation, warranty or other understanding shall be deemed to include, without limitation, a requirement that such Person pay any amounts if necessary or required to perform such covenant, obligation, promise, representation, warranty or other understanding; (7) in each instance in which a provision of this Agreement refers to an “agreement” of any Borrower, any Guarantor or any Affiliate of any Borrower or any Guarantor, such references shall mean any applicable covenant, obligation, promise, representation, warranty or other understanding; and (8) the following terms have the following meanings:

“Access Agreement” means, any reciprocal easement agreement, unilateral easement agreement, access agreement, right of way agreement, environmental remediation agreement,

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document environmental land use restriction or similar agreement benefiting or burdening the Land or the Improvements.

“Account Collateral” has the meaning set forth in Section 2.12.1.

“Accounts” means, collectively, whether now owned or hereafter acquired, (i) all “accounts” as defined in the UCC relating to each Property and/or the Loan; and (ii) all “Accounts” as defined in the Loan Documents.

“Affiliate” means, with respect to a specified Person, (i) a Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with, the specified Person, (ii) any Person who is an officer, director, partner, manager, employee, member, or trustee of, or serves in a similar capacity with respect to, the specified Person or of which the specified Person is an officer, director, partner, manager, employee, member or trustee, or with respect to which the specified Person serves in a similar capacity, (iii) any Person that, directly or indirectly, has an ownership interest in the specified Person (except to the extent that the ownership interest of such Person consists solely of publicly traded stock and such Person is not otherwise an Affiliate), (iv) any Person in which the specified Person has an ownership interest, (v) the spouse, issue, sibling or parent of the specified Person, (vi) any Guarantor, if the specified Person is any Borrower or any Borrower Owner Person, (vii) any Borrower, if the specified Person is a Guarantor, any other Borrower or any Borrower Owner Person, (viii) each Borrower Owner Person, if the specified Person is any Borrower, Guarantor or any other Borrower Owner Person, and (ix) any Person that would constitute an Affiliate of any such Person described in subdivisions (i) through (vii) above.

“Agreement” means, this Loan Agreement, together with the Schedules and Exhibits hereto, as the same may from time to time hereafter be modified, supplemented or amended.

“Allocated Loan Amount” means, with respect to each Property, the amount set forth opposite the reference to such Property in Schedule 1.1(1) attached hereto under the caption “Allocated Loan Amount”, and as such Allocated Loan Amount may be adjusted pursuant to the terms of this Agreement.

“Anti-Money Laundering Laws” has the meaning set forth in the definition of the term “Prohibited Person”.

“Appraisal” means, an appraisal performed by a Member of Appraisal Institute appraiser and obtained by Lender at the sole cost and expense of Borrowers, that is prepared by an appraiser selected and engaged by Lender, certified in the state where each Property is located and otherwise satisfactory in form and substance to Lender.

“Approved Lease” has the meaning set forth in Section 5.1.18(E).

“Assignments of Leases and Rents” means, each Assignment of Leases and Rents, dated as of the Closing Date, by the applicable Borrower for the benefit of Lender, as same may thereafter from time to time be amended, consolidated, extended, supplemented, restated or otherwise modified from time to time.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Available Liquidity” means, as to any Guarantor, the excess, if any, of (A) the market value of assets in the form of cash and other assets that are readily convertible to cash of such Guarantor (including, without limitation, cash equivalents, obligations of the United States or any agency or instrumentality thereof which are supported by the full faith and credit of the United States, securities listed and traded on a recognized stock exchange or traded over the counter and listed in the National Association of Securities Dealers Automatic Quotations, certificates of deposit issued by a bank that (i) has total assets (in name or under management) in excess of $1,000,000,000, and (ii) capital/statutory surplus or shareholder's equity of at least $250,000,000 and other liquid debt instruments that have a readily ascertainable value and are regularly traded in a recognized financial market or demand notes) over (B) total liens and encumbrances affecting such cash and other assets (excluding contingent liabilities).

“Borrower” means, each and any of the entities named on Schedule A attached hereto, whose legal address is c/o GTJ REIT INC., 60 Hempstead Avenue, Suite 718, West Hempstead, New York, 11552, and “Borrowers” means, collectively, all such entities or more than one of such entities, as the context may require.

“Borrower Control Person” means, (i) each Borrower, (ii) Guarantor, (iii) Managing Member, (iv) GTJ GP, (v) GTJ REIT and (vi) any other Person that Controls, directly or through one or more intermediaries, any of the Persons set forth in the preceding clause (i), (ii), (iii), (iv) or (v) and any Person that is a managing member, manager, general partner or other Person that Controls such Controlling Person or intermediary.

“Borrower Owner Person” means, (i) each Borrower, (ii) Guarantor, (iii) any Person that is a Borrower Control Person, (iv) GTJ GP, (v) GTJ REIT, (vi) the Other Owner Persons, and (vii) any other Person that owns, directly or indirectly, through one or more intermediaries, any interest in any Person described in the preceding clause (i), (ii), (iii) (iv), (v) or (vi).

“Broker” has the meaning set forth in Section 10.19.

“Business Day” or “business day” means, any day other than a Saturday, a Sunday or a day on which federally insured depository institutions in the State of New York are authorized or obligated by law, governmental decree or executive order to be closed.

“Capital Improvement Costs” means, any “Capital Improvement Costs” as defined in the Cash Collateral Agreement.

“Cash Collateral Agreement” means, that certain Cash Collateral Agreement, of even date herewith, by and among Borrowers, Lender and Servicer, as the same may be amended, supplemented, restated, reaffirmed or otherwise modified at any time and from time to time.

“Certificate Concerning Leases and Financial Condition” means, the Certificate Concerning Lease and Financial Condition, dated as of the Closing Date, by each Borrower and Guarantor to and for the benefit of Lender.

“Chattel” has the meaning set forth in the Mortgages.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Chattel Paper” means, collectively, whether now owned or hereafter acquired, (i) all “chattel paper” as defined in the UCC (whether tangible chattel paper or electronic chattel paper relating to the Collateral and/or the Loan), and (ii) all “chattel paper, instruments and documents” described in the Security Documents.

“Closing Date” has the meaning set forth in Section 3.1.

“Code” means, the Internal Revenue Code of 1986, as amended, and as it may be further amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

“Collateral” means, collectively, the Land, Improvements, Contracts, Leases, Gross Revenue, Intangible Personalty and other personalty, Chattels and all Proceeds, and (to the full extent assignable) Permits, all whether now owned or hereafter acquired, and all other property, that is, or hereafter may become, subject to a Lien in favor of Lender as security for the Loan and including all property of any kind described as part of the “Property” under any Mortgage, as “Collateral” (as defined in the Security Documents) under the Security Documents or as collateral under any UCC-1 financing statement.

“Contingent Obligation” has the meaning set forth in the definition of the term “Other Borrowing”.

“Contracts” means, collectively, all contracts and agreements entered into by or on behalf of any Borrower to which any Borrower is a party and that are executed in connection with the use, maintenance, furnishing, equipping, ownership, operation and management of any Property or other Collateral (including, without limitation, agreements for the sale, lease or exchange of goods or other property and/or the performance of services by it, in each case whether now in existence or hereafter arising or acquired) and any warranties in respect of any Property, as any such agreements have been or may be from time to time amended, supplemented or otherwise modified, together with any guaranties thereof.

“Control” means, with respect to any Person, (i) ownership, directly or indirectly, of greater than fifty percent (50%) of the ownership interest in such Person or (ii) the power or authority, directly or indirectly through one or more intermediaries, through the ownership of voting securities, by contract or otherwise, to direct or cause the direction of the day-to-day management, activities or policies of such Person. This definition is to be construed to apply equally to variations of the word “Controlled”, “Controlling” and “Controlled by”.

“Cozine Borrower” has the meaning set forth in Schedule A.

“Cozine Environmental Obligations” the environmental remediation obligations set forth in the first bullet point of Section 8.0 of the Phase I Environmental Site Assessment of the Cozine Property, dated as of December 11, 2017, prepared by EBI Consulting with Project No. 1117006920, for the benefit of Lender, a copy of which is attached hereto as Schedule 5.1.31.

“Debt Service Coverage Ratio” means, with respect to each Property, the ratio, as determined by Lender as of any date of determination, of (i) the Net Operating Income for the immediately preceding twelve (12) calendar month period, to (ii) the aggregate amount of (x) the

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document annual Loan Debt Service payments allocated to such Property and due under the Loan and (y) the debt service payments due in respect of all indebtedness secured or to be secured by a lien on all or any portion of such Property or any direct or indirect interest in the applicable Borrower, in each case, for the next twelve (12) calendar month period. Net Operating Income shall be based on a lease-in-place analysis that reflects the then current Leases in place at the applicable Property, as determined by Lender in its reasonable discretion, in accordance with Lender’s standard underwriting criteria consistently applied, and excluding extraordinary or one-time items. Debt Service Coverage Ratio shall be calculated on a cash flow basis.

“Default” means, the occurrence of any event that, but for the giving of notice or the passage of time, or both, would be an Event of Default.

“Default Rate” has the meaning set forth in the Note.

“Deposit Account” has the meaning set forth in the Cash Collateral Agreement.

“Deposit Bank” means, Bank of America, NA., or such other depository bank as may be approved by Lender in its sole and absolute discretion.

“Documents” means, collectively, whether now owned or hereafter acquired, all “documents” as defined in the UCC (whether negotiable or non-negotiable) or other receipts covering, evidencing or representing goods.

“Eligible Account” means, a separate and identifiable account or subaccount maintained with Lender or a financial institution approved by Lender; provided, however, that an Eligible Account shall not be evidenced by a certificate of deposit, passbook, other instrument or any other physical indicia of ownership.

“Environmental Indemnity Agreement” means, that certain Environmental Indemnity Agreement, dated as of the Closing Date, by Borrowers and Guarantor, to and for the benefit of Lender in respect of each Property and as security for the Loan, as the same may be amended, consolidated, extended, supplemented, restated, reaffirmed or otherwise modified at any time and from time to time.

“Environmental Law” means, any Environmental Law as defined in the Environmental Indemnity Agreement.

“Environmental Report” means, individually or collectively as the context may require, each Phase I Environmental Site Assessment Report in respect of each Property, as listed on Schedule III of the Environmental Indemnity Agreement.

“Equipment” means, collectively, whether now owned or hereafter acquired, (i) all “equipment” as defined in the UCC in respect of each Property, and (ii) all of the following (regardless of how classified under the UCC): all building materials, construction materials, personal property constituting furniture, fittings, appliances, apparatus, improvements, machinery, devices, interior improvements, appurtenances, equipment, plant, furnishings, fixtures, computers, electronic data processing equipment, telecommunications equipment and other fixed assets now owned or hereafter acquired by any Borrower in respect of each Property, and all Proceeds of (i)

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and (ii) as well as all additions to, substitutions for, replacements of or accessions to any of the items recited as aforesaid and all attachments, components, parts (including spare parts) and accessories, whether installed thereon or affixed thereto, all regardless of whether the same are located on each Property or are located elsewhere (including, without limitation, in warehouses or other storage facilities or in the possession of or on the premises of a bailee, vendor or manufacturer) for purposes of manufacture, storage, fabrication or transportation and all extensions and replacements to, and proceeds of, any of the foregoing, but exclusive of those items which are property of a third party contractor or any other third party. The “Equipment” shall also include any and all “furniture, furnishings and equipment” of each Property owned by any Borrower as such term is commonly understood in the real estate industry, including without limitation any and all fixtures, furnishings, equipment, furniture, and other items of tangible personal property now or hereafter located on the Land or used in connection with the use, occupancy, operation and maintenance of all or any part of any Property, including, without limitation, appliances, machinery, equipment, signs, artwork (including paintings, prints, sculpture and other fine art), office furnishings and equipment, and specialized equipment for public rooms, health and recreational facilities, awnings, shades, blinds, floor coverings, hall and lobby equipment, heating, lighting, electrical, plumbing, ventilating, refrigerating, incinerating, elevators, escalators, air conditioning, communication equipment, and internet and “wifi” equipment, plants or systems with appurtenant fixtures, vacuum cleaning systems, security systems, sprinkler systems and other fire prevention and extinguishing apparatus and materials; all equipment, manual, mechanical or motorized, for the construction, maintenance, repair and cleaning of, parking areas, walks, underground ways, truck ways, driveways, common areas, roadways, highways and streets; vehicles; and recycling equipment.

“ERISA” means, the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder. Section references to ERISA are to ERISA, as in effect at the date of this Agreement and, as of the relevant date, any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

“ERISA Affiliate” means, any corporation or trade or business that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which any Borrower is a member and (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which any Borrower is a member.

“ERISA Event” means, (i) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the thirty (30) day notice period is waived); (ii) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (iv) the incurrence by any Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (v) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi) the incurrence by any Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document any Plan or Multiemployer Plan; or (vii) the receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“Event of Default” has the meaning set forth in Section 7.1.

“Excess Termination Fees” has the meaning set forth in Section 5.1.18(E).

“Fiscal Year” means, with respect to any Borrower, the twelve (12) month period ending on December 31st of each year (or, in the case of the first fiscal year of such Borrower, such shorter period from the Closing Date through such date) or such other fiscal year of such Borrower as such Borrower may select from time to time with the prior written consent of Lender.

“GAAP” means, generally accepted accounting principles in the United States of America as of the date of the applicable financial report, consistently applied.

“General Intangibles” means, collectively, whether now owned or hereafter acquired, (i) all “general intangibles”, “payment intangibles” and “software” each as defined in the UCC, now owned or hereafter acquired by any Borrower, (ii) all General Intangibles described in the Security Documents, (iii) all causes in action, causes of action and all other intangible personal property of any Borrower of every kind and nature, wherever located, and (iv) corporate, partnership, limited liability company or other business records relating to any Borrower and/ or, to the extent maintained by any Borrower or in any Borrower’s possession, each Property (including computer- readable memory and any computer hardware or software necessary to retrieve such memory), insurance policies, good will, inventions, designs, software, patents, trademarks and applications therefor, computer programs, trade names, trade styles, trade secrets, copyrights, registrations and other intellectual property, licenses, franchises, customer lists, tax refund claims, claims for wages, salaries or other compensation of an employee, landlord’s liens, liens given by statute or other rule of law for services or materials, agricultural liens, judgments and rights represented by judgments and rights of recoupment or set off. The General Intangibles also include all Contracts. As the context may require, “General Intangibles” shall mean the General Intangibles from any Property, two (2) or more Properties or all of the Properties.

“Governing Documents Certificate” means, that certain Certificate Concerning Governing Documents, dated as of the Closing Date, by each Borrower and Guarantor for the benefit of Lender.

“Governmental Authority” means, (a) the government of (i) the United States of America or any state or other political subdivision thereof, or (ii) any other jurisdiction in which any Borrower, any Guarantor or the direct or indirect constituents (as applicable) of any Borrower or any Guarantor conducts all or any part of its business, or which asserts jurisdiction over any properties of any of the foregoing, or (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

“Gross Revenue” means, with respect to each Property, all payments and other revenues (exclusive, however, of any payments attributable to sales taxes) received by or on behalf of (or

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document paid at the direction of) any Borrower from all sources related to the ownership or operation of any Property, including, but not limited to, rents, fees, income, receipts, revenues, issues, profits, advances, prepaid rents, lease termination payments, parking fees, oil and gas or other mineral royalties and bonuses, Termination Fees, interest, security deposits (to the extent that such security deposits are applied to tenant obligations or are no longer subject to being returned to the applicable tenant), business or rental interruption insurance proceeds, operating expense pass-through revenues, direct expense reimbursements, common area maintenance charges, refunds, rebates and reimbursements (other than by Lender) of any Operating Expenses, taxes or Capital Improvement Costs related to the Property previously paid (excluding amounts required to be returned to tenants), payments received by or on behalf of any Borrower as compensation or as settlement of claims or litigation, and payments under an indemnity or other similar matters with respect to any Borrower or any Property, in each case, for the relevant period for which the calculation of Gross Revenue is being made.

“GTJ GP” means, GTJ GP, LLC, a Maryland limited liability company.

“GTJ REIT” means, GTJ REIT Inc., a Maryland real estate investment trust.

“Guarantor” means, GTJ REIT and any replacement guarantor approved by Lender in accordance with Section 5.1.24 hereof.

“Guarantor Minimum Available Liquidity Requirement” means, at all times prior to the indefeasible repayment in full of the Secured Obligations, Guarantor shall maintain an Available Liquidity of not less than $3,500,000.00.

“Guarantor Minimum Net Worth Requirement” means, at all times prior to the indefeasible repayment in full of the Secured Obligations, Guarantor shall maintain a Net Worth of net less than $50,000,000.00.

“Guaranty” means, that certain Guaranty Agreement, dated as of the Closing Date, made by Guarantor in favor of Lender, as the same may be amended, modified, supplemented and/or restated from time to time.

“Hazardous Substance” means, all “Hazardous Substances” as defined in the Environmental Indemnity Agreement.

“Impositions” means, collectively, all taxes (including, without limitation, all real estate, ad valorem, sales (including those imposed on lease rentals), use, single business, gross receipts, value added, intangible transaction privilege, privilege or license or similar taxes), assessments (including, without limitation, all assessments for public improvements or benefits, whether or not commenced or completed within the term of the Loan), water, sewer or other rents and charges, excises, levies, governmental fees (including, without limitation, license, permit, inspection, authorization and similar fees), and all other governmental charges, in each case whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character in respect of any Property (including all interest and penalties thereon) and any other payments required to be paid by the owner of any Property under any agreements in respect of the exemption, abatement or reduction in taxes, which at any time prior to, during or in respect of the term hereof may be assessed against, imposed on or in respect of or otherwise payable in respect of or be a Lien upon

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (i) Borrowers (or any of them) (including, without limitation, all income, franchise, single business or other taxes imposed on Borrowers (or any of them) for the privilege of doing business in the jurisdiction in which any Property, or any other collateral delivered or pledged to Lender in connection with the Loan, is located), or (ii) any Property or any other Collateral delivered or pledged by any Borrower to Lender in connection with the Loan, or any part of either thereof or any Proceeds or Gross Revenue therefrom or any estate, right, title or interest therein, or (iii) any occupancy, operation, use or possession of, or sales from, or activity conducted on, or in connection with any Property or the leasing or use of any Property or any part thereof, or the operation and occupancy of any Property, or (iv) the Loan or any Loan Document.

“Improvements” means, collectively, all buildings, structures, fixtures and improvements and of any nature whatsoever now or hereafter situated on the Land (including, without limitation, all gas and electric fixtures, radiators, heaters, engines and machinery, boilers, ranges, elevators and motors, plumbing and heating fixtures, carpeting and other floor coverings, water heaters, awnings and storm sashes, and cleaning apparatus which are or shall be attached to the Land or said buildings, structures or improvements and including any additions, enlargements, extensions, modifications, repairs or replacements thereto).

“Indebtedness” means, as of the date of any determination thereof, (i) all indebtedness for borrowed money or purchase money financing, (ii) all indebtedness evidenced by a note, bond, debenture or similar instrument, (iii) the face amount of all letters of credit and, without duplication, all unreimbursed amounts drawn thereunder, (iv) all payment obligations under any interest rate protection agreements and currency swaps and similar agreements (if any), and (v) all other indebtedness.

“Indemnified Parties” has the meaning set forth in Section 5.1.4(A).

“Independent” means, when used with respect to any Person, a Person that (i) does not have any direct financial interest or any material indirect financial interest in any Borrower Control Person or in any Affiliate of any Borrower Control Person, and (ii) is not connected with any Borrower Control Person or any Affiliate of any Borrower Control Person as an officer, employee, trustee, member, partner, stockholder, director or person performing similar functions.

“Instruments” means, collectively, whether now owned or hereafter acquired, all “instruments” as defined in the UCC.

“Insurance Agreement” means, that certain Agreement Concerning Insurance Requirements, dated as of the Closing Date, from each Borrower in favor of Lender, as the same may be amended, modified, supplemented and/or restated from time to time.

“Insurance Requirements” means, the obligation of Borrower (x) to maintain the applicable insurance policies pursuant to and in accordance with the Insurance Agreement and (y) to comply with all terms of any such insurance policy required pursuant to the Insurance Agreement.

“Intangible Personalty” has the meaning set forth in the Mortgages.

“Intellectual Property” means, collectively, whether now owned or hereafter acquired, (i) the trademark licenses, trademarks, rights in intellectual property, trade names, logos, service

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document marks and copyrights, copyright licenses, patents, patent licenses owned, licensed or used by Borrowers (or any of them) in the operation of the Properties or in the conduct of the business of Borrowers (or any of them), (ii) or the license to use intellectual property such as computer software owned or licensed by any Borrower, and (iii) other proprietary business information relating to any Borrower’s policies, procedures, manuals and trade secrets.

“Inventory” means, collectively, whether now owned or hereafter acquired, all “inventory” as defined in the UCC and shall include all Documents representing the same. Without limiting the generality of the foregoing, the term “Inventory” shall include the entire interest of each Borrower in all inventory actually used or consumed in the operation of any Property, or commonly used or consumed in a property similar to any Property, including, without limitation: (a) all goods, merchandise, raw materials, work in process and other personal property, wherever located, now or hereafter owned or held by any Borrower for manufacture, processing, the providing of services or sale, use or consumption in the operation of any Property (including, without limitation, fuel, supplies and similar items and all substances commingled therewith or added thereto); (b) all other items of any Borrower that would be entered on a balance sheet under the line items for “Inventories”; and (c) all rights and claims of each Borrower against any Person that may store or acquire the Inventory for the account of any such Borrower, or from whom any such Borrower may purchase the Inventory.

“Investment Property” means, collectively, whether now owned or hereafter acquired, all “investment property” as defined in the UCC.

“Land” means, all of the real property described in Exhibit C attached hereto.

“Lease” means, any lease, sublease, letting, occupancy agreement, tenancy and license relating to any Property or any part thereof now or hereafter entered into, and all amendments, extensions, renewals and guarantees thereof, and all security therefor. “Leases” means, two (2) or more leases or, as the context may require, all of the Leases in respect of the Properties.

“Lease Approval Deliveries” has the meaning set forth in Section 5.1.18(A).

“Lease Form” means the Borrowers’ standard form of Lease relating to the Properties, attached to the Certificate of Leases and Financial Condition.

“Legal Requirements” means, all governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of any Governmental Authority (including, without limitation, all building and zoning and other land use laws and regulations and Environmental Laws) affecting any Borrower, any Guarantor, any other Borrower Control Person or any Property or any part thereof or the construction, use, alteration or operation thereof, or any part thereof, and all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, at any time in force affecting any Property or any part thereof (including, without limitation, any which may (i) require repairs, modifications or alterations in or to any Property or any part thereof, whether or not foreseeable and whether or not structural, or (ii) in any way limit the use and enjoyment thereof).

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Lender” means, the entity named in the introductory paragraph of this Agreement, whose legal address is c/o AIG Investments, 777 S. Figueroa Street, 16th Floor, Los Angeles, California 90017-5800, together with any future holder of the Note.

“Lien” means, any mortgage, deed of trust, lien (statutory or other), pledge, hypothecation, assignment, security interest, or any other encumbrance or charge on or affecting any Borrower or any Property or any portion thereof, or any interest therein (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement or similar instrument under the UCC or comparable law of any other jurisdiction, domestic or foreign, and mechanic’s, materialmen’s and other similar liens and encumbrances).

“Loan” means, the loan facility made by Lender to Borrowers for the maximum amount equal to the Loan Amount pursuant to the terms of the Note, this Agreement and the other Loan Documents.

“Loan Amount” means, an aggregate maximum amount equal to THIRTY-NINE MILLION and 00/100 Dollars ($39,000,000.00).

“Loan Application” means, the “Mortgage Loan Application” among Lender and Borrowers dated as of December 4, 2017, together with all exhibits and addenda thereto.

“Loan Debt Service” means, for any month, the amount of interest or interest and principal, as may be applicable, required hereunder and the Note for such month, and, for any year, the then aggregate payments of interest and principal required hereunder and the Note for such year.

“Loan Documents” means, this Agreement, the Note, the Mortgages, the Assignments of Leases and Rents, the Guaranty, the Reserve Agreement, the Environmental Indemnity Agreement, the Cash Collateral Agreement, the Certificate Concerning Leases and Financial Condition, the Governing Documents Certificate, the Insurance Agreement, the Post-Closing Agreement, the UCC‑1s and all other agreements, instruments, certificates and documents delivered by or on behalf of Borrowers and/or Guarantor to evidence or secure the Loan or otherwise in satisfaction of the requirements of this Agreement or the other documents listed above as same may be amended, restated and/or modified from time to time. The term “Loan Documents” also includes all modifications, extensions, renewals and replacements of each such document referred to above.

“Loan Maturity Date” means, (i) January 1, 2028, or (ii) such earlier date as the Secured Obligations shall become due and payable pursuant to the terms and provisions of this Agreement or any other Loan Document.

“Loan Modification” has the meaning set forth in Section 5.1.9.

“Losses” has the meaning set forth in Section 5.1.4(A).

“Managing Member” means, GTJ Realty, LP, a Delaware limited partnership.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Material Adverse Effect” means, a material adverse effect upon (i) the business operations, properties, assets or financial condition of any Borrower, any Guarantor or any Property that would impair the ability of such Borrower or such Guarantor to perform any of its obligations under any Loan Document to which it is a party, (ii) the ability of Lender to enforce its rights under the Loan Documents, or (iii) the ability of Borrowers to pay or repay the Secured Obligations.

“McIntire Borrower” has the meaning set forth in Schedule A.

“Money” means, collectively, whether now owned or hereafter acquired, (i) all “money” as defined in the UCC and (ii) all cash, or other items of legal tender generated from the use or operation of each Property.

“Mortgage” means, with respect to each of the Properties in the Portfolio as identified on Schedule 1.1(2) attached hereto, the Mortgage, Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases and Rents, dated as of the Closing Date, encumbering Property, from the applicable Borrower to Lender, as the same may be amended, restated, supplemented and/or modified from time to time. “Mortgages” means, two (2) or more Mortgages or, as the context may require, all of the Mortgages in respect of the Properties.

“Multiemployer Plan” means, a multiemployer plan defined as such in Section 3(37) of ERISA and which is covered by Title IV of ERISA (i) to which contributions have been, or were required to have been made by any Borrower, any Guarantor or any ERISA Affiliate or (ii) with respect to which Borrowers could reasonably be expected to incur liability separately or collectively.

“Neelytown Borrower” has the meaning set forth in Schedule A.

“Net Operating Income” means, the excess, if any, of (i) Gross Revenue over (ii) Total Expenses.

“Net Proceeds” means, with respect to any Property, either (x) the purchase price (at foreclosure or otherwise) actually received by Lender from a third party purchaser with respect to such Property, as a result of the exercise by Lender of its rights, powers, privileges and other remedies after the occurrence and during the continuation of an Event of Default or (y) in the event that Lender (or its nominee) is the purchaser at foreclosure of such Property, the higher of (i) the amount of Lender’s credit bid or (ii) such amount as shall be determined in accordance with Legal Requirements, and in either case minus all reasonable costs and expenses (including, without limitation, all attorneys’ fees and disbursements and any brokerage fees, if applicable) incurred by Lender (and its nominee, if applicable) in connection with the exercise of such remedies; provided, however, that such costs and expenses shall not be deducted to the extent such amounts previously have been added to the Secured Obligations in accordance with the terms of the Loan Documents or Legal Requirements. As the context may require “Net Proceeds” shall mean the Net Proceeds from two (2) or more Properties or all of the Properties.

“Net Worth” shall mean, as to any Guarantor, the excess, if any, of (A) total assets (excluding the Portfolio or any direct or indirect interest in the Portfolio or any Borrower) of such Guarantor over (B) total liabilities (excluding contingent liabilities and any liabilities of Guarantor

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document under the Loan Documents) of such Guarantor, with the value of such Guarantor’s partnership or member interest or other ownership in any partnership, limited liability company or other entity (each a “Property Owning Entity”) calculated by assuming a sale at fair market value of all assets of such Property Owning Entity and the distribution of the net proceeds in liquidation, calculated in the same manner and using the same accounting methods as were used in the financial statements of such Guarantor delivered to Lender in connection with the closing of the Loan.

“Note” means, that certain Promissory Note (USL), of even date herewith, by Borrowers in favor of Lender, in the aggregate stated principal amount of $39,000,000.00.

“Notice” means, for any Borrower or Lender, a notice or other communication delivered to the address set forth for such party in Section 10.6, as such address may be changed by such party pursuant to Section 10.6.

“OFAC” has the meaning set forth in the definition of the term “Prohibited Person”.

“OFAC Listed Person” has the meaning set forth in the definition of the term “Prohibited Person”.

“Officer’s Certificate” means, a certificate delivered to Lender by any Borrower or Borrowers that is signed by an authorized officer of such Borrower or Borrowers.

“Olney Borrower” has the meaning set forth in Schedule A.

“Operating Budget” means, with respect to any Fiscal Year for any Property, the operating budget for such Property reflecting Borrowers’ projections of, as may be applicable, Property Expenses for such Property for such Fiscal Year (on an annual and monthly basis) and submitted by such Borrower to Lender. As the context may require, the term “Operating Budgets” means, the Operating Budget for two (2) or more Properties or all of the Properties.

“Operating Expenses” means, any “Operating Expenses” as defined in the Cash Collateral Agreement.

“Organizational Chart” has the meaning set forth in Section 8.1(C)(8).

“Organizational Documents” means, collectively, with respect to any Person that is an entity, (i) the certificate/articles of formation, certificate of incorporation, partnership certificate, or other organizational document of each Borrower, as amended, modified or supplemented, (ii) the authorization of such Person to do business in the jurisdiction of its respective incorporation and/or formation, and/or any applicable state with respect to any other Person, as amended, modified or supplemented, and (iii) the by-laws, partnership agreement, limited liability agreement, trust agreement or other similar documents, as amended, modified or supplemented, of each such Person.

“Original Interest Rate” has the meaning set forth in the Note.

“Other Borrowing” means, with respect to any Borrower, without duplication (but not including the Secured Obligations) (i) all indebtedness of such Borrower for borrowed money or

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document for the deferred purchase price of property or services, (ii) all indebtedness of such Borrower evidenced by a note, bond, debenture or similar instrument, (iii) the face amount of all letters of credit issued for the account of such Borrower and, without duplication, all unreimbursed amounts drawn thereunder, and obligations evidenced by bankers’ acceptances, (iv) all indebtedness of such Borrower secured by a Lien on any property owned by such Borrower (whether or not such indebtedness has been assumed and whether or not such Lien is permitted under the Loan Documents), (v) all Contingent Obligations of such Borrower, (vi) liabilities and obligations for the payment of money relating to a capitalized lease obligation or sale/leaseback obligation, and (vii) liabilities and obligations representing the balance deferred and unpaid of the purchase price of any property or services, except (A) those incurred in the ordinary course of such Borrower’s business that would constitute ordinarily a trade payable to trade creditors and (B) Property Expenses incurred in accordance with this Agreement and the ordinary course of such Borrower’s business (the foregoing debt described in (A) and (B) are hereinafter referred to as “Permitted Debt”). As used herein, the term “Contingent Obligation” means, without duplication, any obligation of any Borrower guaranteeing any indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly. Without limiting the generality of the foregoing, the term “Contingent Obligation” shall include any obligation of any Borrower:

A.to purchase any such primary obligation or any property constituting direct or indirect security therefor;

B.to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor;

C.to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation; or

D.otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof.

The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming the Borrower in question is required to perform thereunder) as determined by Lender in good faith. As the context may require, the term “Other Borrowings” means, the Other Borrowings for two (2) or more Borrowers or all of the Borrowers.

“Other Owner Persons” means, those parties identified as “Other Owner Persons” in the Governing Documents Certificate.

“Participant” has the meaning set forth in Section 10.9(A).

“Payment Date” has the meaning set forth in the Note.

“Payment Intangibles” means, collectively, whether now owned or hereafter acquired, all “payment intangibles” as defined in the UCC.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “PBGC” means, the Pension Benefit Guaranty Corporation established under ERISA, or any successor thereto.

“Permits” means, collectively, all building permits, licenses, permits, approvals, franchises, authorizations, variances and certificates required by Legal Requirements to be obtained by any Borrower and used in connection with the construction, development, ownership, maintenance, operation, use or occupancy of any Property (including, without limitation, business licenses, liquor and alcoholic beverage licenses, state health department licenses, licenses to conduct business and all such other permits, licenses and rights, obtained from any Governmental Authority or private Person concerning construction, ownership, operation, use or occupancy of any Property) and/or the conduct of any Business of any Borrower, but specifically excluding any of the foregoing that are the obligations of tenants to obtain under their respective Leases with respect to the conduct of their respective businesses.

“Permitted Debt” means, (a) the Loan, and (b) Permitted Trade Payables.

“Permitted Encumbrances” means, with respect to any Borrower, (A) the matters set forth on the Exhibit B of the Mortgages; (B)(i) liens for taxes, assessments or similar charges incurred in the ordinary course of business of any Borrower that are not yet delinquent and/or subject to any late fees or penalties; and (ii) liens in favor of Lender; and (C) any other matters consented to by Lender (in Lender’s sole and absolute discretion) in writing.

“Permitted Investments” means, (i) any obligations of the United States government, or (ii) any obligation backed by the full faith and credit of the United States of America, however, in each case excluding any investment in or deemed an investment in agency paper, auction paper notes, unsecured certificates of deposit, time deposits, bankers’ acceptances or repurchase agreements or similar cash equivalent investments.

“Permitted Trade Payables” means, (x) unsecured indebtedness in respect of trade payables incurred in the ordinary course of business relating to the ownership, maintenance and operation of the Properties (“Trade Payable Financing”) and (y) equipment financing entered into in the ordinary course of Borrower’s business for non-fixture equipment related to the ownership, maintenance and operation of the Properties (“Equipment Financing”) that satisfied each of the following conditions:

(i)The maximum aggregate amount of Trade Payable Financing and Equipment Financing outstanding at any one time shall not exceed $250,000.00.

(ii)Following the funding of any Trade Payable Financing or any Equipment Financing, all of the terms of the Loan Documents shall remain unchanged.

(iii)Borrower shall be responsible for all closing costs in connection with any Trade Payable Financing or Equipment Financing, including, but not limited to, the legal, appraisal, engineering and environmental, title and escrow costs of Lender and the lender providing any Trade Payable Financing or Equipment Financing.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iv)The interest rate payable under, and each of the other terms and provisions of, any Trade Payable Financing or any Equipment Financing shall be on arms’-length, market rate terms.

(v)The Equipment Financing shall be either (A) unsecured or (B) secured solely by security interests that encumber only equipment located at the applicable Property that does not constitute or become a “fixture”, and whose removal would not be overly burdensome or damage or impair the operation or value of the applicable Property.

(vi)Not less than ten (10) business days prior to the funding of any Trade Payable Financing or Equipment Financing, Borrower shall provide Lender with a copy of the loan documents to be executed or delivered in connection therewith, and Borrower shall provide Lender with written evidence satisfactory to Lender that such Trade Payable Financing or Equipment Financing complies with the foregoing restrictions.

“Permitted Transfer” has the meaning set forth in Section 8.1(B).

“Person” means, an individual, a corporation, an association, a joint stock company, a trust, a business trust, a partnership, a joint venture, a limited liability company, a real estate investment trust, an unincorporated organization, department, or a government, foreign country or regime (or any agency, agent, instrumentality or political subdivision thereof), or any other entity (whether incorporated or unincorporated).

“Personalty” means, with respect to any Property, collectively, all Equipment, Inventory, Accounts, Chattel, Chattel Paper, General Intangibles, Instruments, Investment Property, Receivables, Contracts and Intellectual Property and all other personal property as defined in the UCC, now owned or hereafter acquired by any Borrower in respect of such Property and now or hereafter affixed to, placed upon, used in connection with, arising from or otherwise related to such Property or which may be used in or relating to the planning, development, financing or operation of such Property, including, without limitation, furniture, furnishings, equipment, machinery, money, insurance proceeds, accounts, contract rights, trademarks, goodwill, chattel paper, documents, trade names, licenses and/or franchise agreements, rights of such Borrower under leases of fixtures or other personal property or equipment, inventory, all refundable, returnable or reimbursable fees, deposits or other funds or evidences of credit or indebtedness deposited by or on behalf of such Borrower with any governmental authorities, boards, corporations, providers of utility services, public or private, including specifically, but without limitation, all refundable, returnable or reimbursable tap fees, utility deposits, commitment fees and development costs. As the context may require, “Personalties” means, the Personalty from two (2) or more Properties or all of the Properties.

“Plan” means, an employee benefit or other plan, other than a Multiemployer Plan, that is covered by Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code, and (i) was established or maintained by any Borrower or any ERISA Affiliate during the five year period ended prior to the date of this Agreement or to which any Borrower or any ERISA Affiliate makes, is obligated to make or has, within the five year period ended prior to the date of this Agreement, been required to make contributions or (ii) with respect to which any Borrower could reasonably be expected to incur liability.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Pledged Accounts” means, any cash collateral account required by Lender hereunder and maintained by Borrowers from time to time in respect of each Property and any successor accounts thereto.

“Portfolio” means, all of the Properties identified on Schedule 1.1(2) attached hereto.

“Portfolio Debt Service Coverage Ratio” means, the ratio, as determined by Lender as of any date of determination, of (i) the Portfolio Net Operating Income for the immediately preceding twelve (12) calendar month period, to (ii) the aggregate amount of (x) the annual Loan Debt Service payments due under the Loan and (y) the debt service payments due in respect of all indebtedness secured or to be secured by a lien on all or any portion of the Portfolio or any direct or indirect interest in any Borrower, in each case, for the next twelve (12) calendar month period. Portfolio Net Operating Income shall be based on a lease-in-place analysis that reflects the then current Leases in place at the Portfolio, as determined by Lender in its reasonable discretion, in accordance with Lender’s standard underwriting criteria consistently applied, and excluding extraordinary or one- time items. Portfolio Debt Service Coverage Ratio shall be calculated on a cash flow basis.

“Portfolio Gross Revenue” means, for any period, the aggregate amount of Gross Revenue generated by the Portfolio.

“Portfolio Loan-to-Value Ratio” means, the ratio, as determined by Lender, of (I) the aggregate principal balance of the Note and all other indebtedness secured by liens or encumbrances against the Properties or against the direct or indirect ownership interests in the Borrowers to (II) the aggregate amount of the fair market value of the Portfolio, as such fair market value is determined by an Appraisal.

“Portfolio Net Operating Income” means, the excess, if any, of (i) Portfolio Gross Revenue over (ii) Portfolio Total Expenses.

“Portfolio Total Expenses” means, for any period, in the aggregate with respect to the entire Portfolio during such period, the aggregate of all Property Expenses actually incurred by the Borrowers and due and payable during such period in respect of the Portfolio.

“Post-Closing Agreement” means, that certain Post-Closing Obligations Agreement, dated as of the Closing Date, by and between Borrowers and Lender, as the same may be.

“Principal” or “Principals” has the definition as set forth in Section 8.1(B) of this Agreement.

“Principal Indebtedness” means, the principal amount of the Loan outstanding as adjusted by each increase (including for Protective Advances, if any), or decrease in such principal amount of the Loan outstanding, whether as a result of prepayment or otherwise, from time to time.

“Proceeds” has the meaning set forth in the UCC and, in any event, shall include, without limitation, proceeds, product, offspring, rents, profits or receipts, in whatever form, arising from the Collateral. Without limiting the generality of the foregoing, the term “Proceeds” shall include the following:

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (i)cash, Instruments and other property received, receivable or otherwise distributed in respect of or in exchange for any or all of the Collateral or any Property;

(ii)the collection, sale, lease, sublease, concession, exchange, assignment, licensing or other disposition of, or realization upon, any item or portion of the Collateral or any Property (including, without limitation, all claims of any Borrower against third parties for loss of, damage to, destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of, any Collateral or any Property now existing or hereafter arising);

(iii)any and all proceeds of any insurance, indemnity, warranty or guaranty payable to any Borrower from time to time with respect to any of the Collateral or any Property;

(iv)any and all payments (in any form whatsoever) made or due and payable to any Borrower from time to time in connection with the requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral or any Property by any Governmental Authority (or any Person acting under color of Governmental Authority); and

(v)any and all other amounts from time to time paid or payable to any Borrower under or in connection with any of the Collateral or any Property.

“Prohibited Person” means,

(i)any Person that is identified on the list of Specially Designated Nationals and Blocked Persons or the list of Foreign Sanctions Evaders (collectively, an “OFAC Listed Person”) published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”),

(ii)any agent, department, or instrumentality of, or any Person otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person that is the target of any sanctions programs administered and/or enforced by OFAC,

(iii)any Person that is otherwise blocked by or a target of United States economic sanctions,

(iv)any Person that (A) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S. economic sanctions violations, (B) is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. economic sanctions violations, (C) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. economic sanctions, or (D) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws, and/or

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (v)any Person that (A) is owned or controlled by the government of Cuba, Iran, Sudan, Burma (Myanmar), North Korea, Syria, or the Crimea region of Ukraine, (B) is located in Cuba, Iran, Sudan, Burma (Myanmar), North Korea, Syria, Venezuela or the Crimea region of Russia or Ukraine, (C) does business in or with Cuba, Iran, Sudan, Burma (Myanmar), North Korea, Syria, Venezuela or the Crimea region of Russia or Ukraine.

“Property” has the meaning set forth in each Mortgage and each Property, collectively, the “Properties”.

“Property Expense” means, with respect to any Property, the following costs and expenses (to be calculated without duplication) in respect of such Property, but only, in the case of costs and expenses in respect of goods and services, to the extent that such costs and expenses in respect of such Property (x) are paid to Persons that are generally in the business of providing such goods and services, (y) are reasonable for the types of goods or services provided in the geographical area in which such goods or services are provided and (z) do not constitute (A) payments of Loan Debt Service and Principal Indebtedness, (B) income and franchise taxes, (C) depreciation and amortization, and (D) expenses which are extraordinary in nature and would, under GAAP be considered “non‑recurring”:

(i)Impositions;

(ii)insurance premiums for policies of insurance required to be maintained by the Borrowers with respect to such Property pursuant to this Agreement or the other Loan Documents;

(iii)the cost of all electricity, oil, gas, water, steam, heat, ventilation, air conditioning and any other energy, utility or similar item and overtime services with respect to such Property;

(iv)payments required under service contracts (including, without limitation, service contracts for heating, ventilation and air conditioning systems, elevators, landscape maintenance, pest extermination, snow and ice removal, cleaning, security, furniture, trash removal, answering service and credit checks);

(v)wages, benefits, payroll taxes, uniforms, the cost of cleaning supplies, insurance costs and all related expenses for on-site maintenance personnel (including, without limitation, general repair, maintenance and security employees), whether hired by the Borrowers, Lender or any other Person;

(vi)costs required in connection with the enforcement of any Lease (including, without limitation, reasonable attorneys’ fees, charges for lock changes and storage and moving expenses for furniture, fixtures and equipment);

(vii)advertising and rent-up expenses (including, without limitation, leasing services, tenant rent concessions, promotions for existing and prospective tenants, banners and signs);

(viii)out-of-pocket cleaning, maintenance and repair expenses;

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ix)legal, accounting, auditing and other professional fees and expenses incurred in connection with the ownership, leasing and operation of any Property (including, without limitation, collection costs and expenses);

(x)Permits, licenses and registration fees and costs;

(xi)any expense necessary in order to prevent a breach under a Lease or Contract;

(xii)any expense necessary in order to prevent or cure a violation of any Legal Requirement (including applicable Environmental Laws), regulation, code or ordinance;

(xiii)costs and expenses of any appraisals, valuations, surveys, inspections, environmental assessments or market studies;

(xiv)costs and expenses of security and security systems provided to and/or installed and maintained with respect to such Property;

(xv)costs of title, UCC, litigation and other searches and costs of maintaining the Lien of the Mortgage encumbering such Property and the security interest in any related Collateral;

(xvi)fees and expenses of property managers contracted with by Borrowers to perform management, administrative, payroll or other services in connection with the operation of such Property (including, without limitation, the fees and expenses owed to any manager under any management agreement approved by Lender in accordance with this Agreement);

(xvii)any other costs and expenses contemplated by the Operating Budget and customarily incurred in connection with operating properties similar in type and character to such Property; and

(xviii)any other category of property expense that is customary for a property of the type and size as such Property.

For avoidance of doubt, Property Expenses (i) shall include, without limitation, (1) a property management fee equal to the greater of (x) the actual cost under any management agreement approved by Lender and (y) four percent (4%) of Gross Revenue, and (2) reserves for tenant improvements, leasing commissions and capital expenditures equal to $0.75 per rentable square foot per year, (ii) shall be adjusted so that (x) payments of Property Expenses, including property taxes and assessments and insurance expenses, are spread out over the period during which they accrued, and are adjusted for any known future changes to any such expenses, and (y) security deposits shall not be included as items of income until duly applied or earned and any refunds or rebates to any costs or expenses shall be applied and credited against the applicable costs or expenses for the period that such costs or expenses were incurred. As the context may require, “Property Expenses” means, the Property Expense from any Property, any two (2) or more Properties or all of the Properties.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Property Impositions” means, with respect to each Property, the Impositions covered by the portion of clause (ii) or clause (iii) of the definition of “Impositions” in this Agreement that relates solely to any Property.

“Protective Advance(s)” means, any advance by Lender with respect to (i) the payment of any delinquent Impositions or insurance premiums owed with respect to any Property, (ii) except for any Permitted Encumbrances, the removal of any Lien or encumbrance on any Property or the defense of Borrowers’ or Lender’s title or leasehold interest thereto or of the validity, enforceability, perfection or priority of the Liens and security interests granted pursuant to the Security Instruments and the other Loan Documents, (iii) the preservation of the value of any Property, including, without limitation, payments of water, heating, gas, electric and other utility bills, and/or (iv) the payment of any maintenance, repair, tenant improvement or capital improvement costs or expenses that may be necessary to be incurred, including, without limitation, in connection with any Property, together with (in respect of all such costs and expenses described in the preceding clauses (i) through (iv)) interest thereon at the Default Rate.

“Property Manager” means GTJ Management, LLC, a New York limited liability company, or any replacement property manager pursuant to Section 5.1.11 of this Agreement.

“Public Transfer” has the meaning set forth in Section 8.1(B)(1).

“Receivables” means, collectively, whether now owned or hereafter acquired, (i) any Accounts, Chattel, Chattel Paper, Instruments, Payment Intangibles, Documents, insurance policies, drafts, bills of exchange, trade acceptances, notes or other indebtedness owing to Borrowers from whatever source arising, (ii) to the extent not otherwise included above, (a) all income, Gross Revenue, issues, profits, revenues, deposits and other benefits from any Property and (b) all receivables and other obligations now existing or hereafter arising, or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of all or any portion of any Property or rendering of services by Borrowers or any operator or manager of any Property or other commercial space located at each Property or acquired from others (including, without limiting the generality of the foregoing, from rental of space, halls, stores, and offices, exhibit or sales space of every kind, license, lease, sublease and concession fees and rentals, health club membership fees, service charges, vending machine sales and proceeds, if any, from business interruption or other loss of income insurance, (iii) all of the books and records (whether in tangible, electronic or other form) now or hereafter maintained by or on behalf of Borrowers in connection with the operation of each Property or in connection with any of the foregoing, and (iv) whether now owned or hereafter acquired, (A) all “supporting obligations” as defined in the UCC and (B) any other guarantee, letter of credit, secondary obligation, right or privilege that supports or pertains to each Property.

“Release” means, any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, dumping, emptying, seeping, leaching, placing and the like or migration into the indoor or outdoor environment (including, without limitation, the movement of Hazardous Substances through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata).

“Release Amount” has the meaning set forth in Section 8.4.1(e).

“Release Date” has the meaning set forth in Section 8.4.1.

“Release Lockout Date” means, January 1, 2023.

“Release Request” has the meaning set forth in Section 8.4.1(a).

“Released Property” has the meaning set forth in Section 8.4.1.

“Remaining Properties” has the meaning set forth in Section 8.4.1.

“Required Tenants” means, the tenants identified on Schedule 1.1(3).

“Reserve Agreement” means, that certain Reserve Agreement (Tenant Improvements, Leasing Commissions and Capital Expenditures), dated as of the Closing Date, by and between Borrowers and Lender, as the same may be amended, modified, supplemented and/or restated from time to time.

“Safe Harbor Lease” means, with respect to each Property, a Lease that (i) is on the Lease Form, without material modification thereto and otherwise complies with the leasing guidelines and Lease provisions hereunder and under the other Loan Documents, (ii) is entered into at arm’s length with a third party tenant that is not an Affiliate of any Borrower or any Guarantor, which tenant shall be creditworthy and reputable, (iii) the rentable area to be demised pursuant to such proposed Lease when combined with any other space at the applicable Property leased to such proposed tenant or an Affiliate of such propose tenant, is not more than 25,000 square feet, (iv) has an initial term of not less than three (3) years or, together with all renewal options (other than an single one (1) year renewal option), greater than fifteen (15) years, (v) has a minimum contract rent equal or greater than the rent paid by the tenant occupying the space on the Closing Date and provides for tenant improvement allowances and lease concessions in conformity with the then current market conditions as reasonably determined by Lender, (vi) does not contain any expansion options that, if exercised, would cause the premises under such proposed Lease when combined with any other space at the applicable Property leased to such proposed tenant or an Affiliate of such propose tenant to exceed 25,000 rentable square feet, (vii) is automatically self-subordinated to the applicable Mortgage and requires tenant to attorn to Lender or Lender’s successor in interest upon such party’s acquisition of title and at such party’s sole option, (viii) does not contain any requirement for a nondisturbance or recognition agreement or any other provision that might adversely affect Lender’s rights under the Loan Documents, (ix) does not contain any options to purchase, rights of first refusal to purchase any portion of any Property, or termination options (other than in the event of material casualty or condemnation), (x) does not contain any material restrictions on the landlord’s rights to lease remaining portions of the applicable Property, (xi) does not contain any extraordinary, uncustomary and unduly burdensome landlord obligations, or obligations that a landlord unaffiliated with Borrowers would have difficulty performing, (xii) does not grant the tenant thereunder any incentives equivalent to an ownership interest in any Property or grant the tenant thereunder any interest in the ownership of any Property, or otherwise contain terms that would cause a material impairment of Lender’s security, (xiii) does not provide for the payment of tenant improvements, leasing commissions or any other landlord construction

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or similar obligations at any time other than at commencement of the Lease, and (xiv) is otherwise commercially reasonable and contain terms comparable to then-existing local market terms.

“Stub Interest Period” has the meaning set forth in the Note.

“Secured Obligations” means, the Principal Indebtedness and all interest accruing thereon, together with all other present and future obligations of Borrowers evidenced by or contained in the Note, this Agreement, the Security Documents and all other Loan Documents whether stated in the form of promises, covenants, representations, warranties, conditions, or prohibitions or in any other form, whether absolute or contingent, direct or indirect, joint, several or independent, now outstanding or owing or which may hereafter be existing or incurred, arising by operation of law or otherwise, due or to become due under the Loan Documents, and/or are in any way secured by any Property or any other Collateral now or hereafter provided to Lender as collateral for the Loan, including, without limitation, any Protective Advance. If the maturity of the Note are accelerated, the Secured Obligations shall include an amount equal to any prepayment premium, yield maintenance premium or spread maintenance premium which would be payable under the terms of the Note as if the Note was prepaid in full on the date of the acceleration.

“Security Documents” means, the Mortgages, the Cash Collateral Agreement, the Reserve Agreement, the Assignments of Leases and Rents, the UCC-1 and such other documents as Borrowers may, from time to time, execute to secure the Secured Obligations under the Loan and the other Loan Documents.

“Servicer” means, any one or more loan servicers (I) each selected and retained by Lender, pursuant to one or more servicing agreements each between Lender and such loan servicer, to perform servicing functions in respect of the Loan, (II) to which Lender may delegate all or any portion of Lender’s responsibilities under the Note, this Agreement and the other Loan Documents and (III) in respect of which Lender has provided to Borrowers written notice of the name, address and contact information of each such loan servicer.

“State” means, the State of New York.

“Stub Interest Period” has the meaning set forth in the Note.

“Survey” means, a certified ALTA/ACSM survey of each Property prepared by a registered Independent surveyor, containing the form of survey or certification provided to Borrowers by Lender and in form and content satisfactory to Lender prior to the Closing Date and the company issuing the Title Insurance Policy for each Property.

“Taking” means, a taking or voluntary conveyance during the term hereof of all or part of any Property, or any interest therein or right accruing thereto or use thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding by any Governmental Authority affecting any Property or any portion thereof whether or not the same shall have actually been commenced.

“Termination Fees” has the meaning set forth in Section 5.1.18(E).

“Threshold Amount” has the meaning set forth in Section 5.1.16(D).

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Title Insurance Policy” means, collectively, one or more Lender’s title insurance policies (i) issued by First American Title Insurance Company (the “Title Company”), which policy or policies shall be in form ALTA 2006 (with waiver of arbitration provisions) (with co-insurance or reinsurance as Lender may require), naming Lender as the insured party, (ii) insuring each Mortgage as being a first and prior lien upon the applicable Property, (iii) showing no encumbrances against the applicable Property (whether junior or superior to the applicable Mortgage) that are not acceptable to Lender other than Permitted Encumbrances, (iv) with respect to the Mortgages, in the aggregate amount of the Loan, and (v) otherwise in form and content reasonably acceptable to Lender.

“Total Expenses” means, with respect to each Property, an amount calculated by taking the aggregate total of all Property Expenses relating to the operation, maintenance, leasing and management of such Property during the preceding twelve (12) calendar month period, with such twelve calendar month period ending on the last day of the last full calendar month prior to the date for which Net Operating Income is to be determined.

“Transaction” means, the transactions contemplated by the Loan Documents.

“Transaction Costs” means, all out-of-pocket costs and expenses of Lender paid or payable by Borrowers relating to the Transaction (including, without limitation, appraisal fees, legal fees and accounting fees and the costs and expenses described in Section 10.22).

“Transfer” means, any conveyance, assignment, sale, mortgaging, encumbrance (other than a Permitted Encumbrance), pledging, hypothecation, granting of a security interest in, granting of options with respect to, or other disposition of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) all or any portion of any legal or beneficial interest (a) in all or any portion of any Property; or (b) in the direct or indirect stock, partnership interests, membership interests or other ownership interests in any Borrower or any Borrower Owner Person and the term “Transfer” shall also include, without limitation to the foregoing, the following: an installment sales agreement wherein any Borrower agrees to sell any Property or any part thereof or any interest therein for a price to be paid in installments; an agreement by any Borrower leasing all or a substantial part of any Property to one or more Persons pursuant to a single or related transactions, or a sale, assignment or other transfer of, or the grant of a security interest in, any Borrower’s right, title and interest in and to any Property; the dissolution or termination of any Borrower or any Borrower Owner Person or the merger or consolidation of any Borrower or any Borrower Owner Person with any other Person.

“Transfer Notice” has the meaning set forth in Section 8.1(C)(8).

“Transferee” has the meaning set forth in Section 10.9(D).

“Transfer Conditions” has the meaning set forth in Section 8.1(C).

“UCC” means, with respect to any Collateral, the Uniform Commercial Code as in effect from time to time in the State.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “UCC-1” means, any UCC-1 Financing Statements filed in connection with securing the indebtedness evidenced by the Loan Documents.

“Use” means, with respect to any Hazardous Substance, the generation, manufacture, processing, distribution, handling, use, treatment, recycling or storage of such Hazardous Substance or transportation of such Hazardous Substance in connection with or affecting any Borrower or any Property.

“Welfare Plan” means, an employee welfare benefit plan as defined in Section 3(1) of ERISA established or maintained by any Borrower or any ERISA Affiliate or with respect to which any Borrower or any ERISA Affiliate has an obligation to make contributions and covers any current or former employee of any Borrower or any ERISA Affiliate.

“Wu Transfer Conditions” has the meaning set forth in Section 8.1(D).

ARTICLE 2 GENERAL TERMS

2.1Loan. Lender shall make the Loan to Borrowers in accordance with this Article 2 and in accordance with the other terms and conditions of this Agreement, the Note and the other Loan Documents. The Loan shall be due and payable in accordance with the terms, covenants and conditions of the Note, which are hereby incorporated herein by reference. Amounts borrowed under this Section 2.1 and repaid or prepaid may not be re-borrowed.

2.2 Intentionally Omitted.

2.3Security for the Loan. The Note and the obligations of Borrowers hereunder and under all other Loan Documents shall be secured by the Security Documents and the other Loan Documents.

2.4The Note. The obligation of Borrowers to pay the principal of and interest on the Loan and other amounts due under the Loan Documents shall be evidenced by the Note, duly executed and delivered by Borrowers as of the Closing Date. The Note shall be payable as to principal, interest and other amounts due under the Loan Documents, as specified in the Note, with a final maturity on the Loan Maturity Date.

2.5Principal and Interest.

2.5.1 Borrowers shall pay to Lender interest on the Loan at the Original Interest Rate, or the New Rate (as defined in the Note), as applicable, in accordance with the provisions of the Note. The entire outstanding Principal Indebtedness of the Loan and the Note, together with all accrued but unpaid interest thereon and all other amounts due relating to the Loan under the Loan Documents, shall be due and payable by Borrowers to Lender in accordance with the Note.

2.5.2 On the Loan Maturity Date, Borrowers shall pay to Lender the entire remaining Principal Indebtedness of the Loan, together with all accrued but unpaid interest on the Principal Indebtedness of the Loan and all other amounts due hereunder or under the

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document other Loan Documents, together with all accrued but unpaid interest thereon, if any, in accordance with the provisions of the Note and the other Loan Documents, as applicable.

2.5.3 In accordance with the provisions of the Note, if an Event of Default shall occur, Lender, at its option, and in addition to all other rights and remedies allowed under the Loan Documents and Legal Requirements, may increase the interest rate on the Secured Obligations to the Default Rate, which increase shall be retroactive to the date the defaulted payment or performance was due. Without limiting the foregoing provisions of this Section 2.5.3, if Borrowers fail to pay any interest, any principal, any late fee or any other amount payable under any of the Loan Documents on the due date therefor or the date of demand therefor (subject to applicable notice and grace periods as expressly set forth in this Agreement or the other Loan Documents, if any), such unpaid amount shall accrue interest thereon at the Default Rate from the due date thereof, date of demand therefor or in the case of any Protective Advance from the date so expended by Lender, until the date such amount is actually paid.

2.5.4 In the event of a payment under this Agreement or any other Loan Document is not paid when due, other than the principal repayment at the Loan Maturity Date, Borrowers shall pay a late fee or late charge in accordance with the provisions of the Note.

2.6Prepayment.

2.6.1 As more particularly provided in the Note, Borrowers may voluntarily prepay the Loan in whole (but not in part except either pursuant to the provisions of the Note applicable to prepayments in connection with the application by Lender of any insurance proceeds or condemnation awards to the principal balance of the Loan or pursuant to the provisions of Section 8.4 hereof in connection with a release of a Property) on any date in accordance with the Note; provided, however, that Borrowers shall be required to pay to Lender an amount equal to all accrued interest through the next Payment Date, and all other amounts outstanding under the Loan Documents, at the time of such prepayment together with any such prepayment. Amounts prepaid may not be re-borrowed.

2.6.2 Upon payment or prepayment of the Loan in full or in part, Borrowers shall pay to Lender, in addition to the amounts specified in this Section 2.6 and in accordance with the Note, all interest and all other amounts (including applicable yield maintenance premiums) then due and payable to Lender pursuant to the Loan Documents.

2.7Application of Payments After Event of Default. All amounts relating to any repayments of the Loan after the occurrence of an Event of Default shall be applied by Lender, in Lender’s sole discretion, to amounts then outstanding under the Note, this Agreement and the other Loan Documents (including, without limitation, costs and expenses of Lender, reimbursable pursuant to the terms of the Note this Agreement or the other Loan Documents arising as a result of such repayment); any accrued and unpaid interest then payable with respect to the Loan or the portion thereof being repaid; the Principal Indebtedness or the portion thereof being repaid; and any other sums then due and payable to or for the benefit of Lender pursuant to this Agreement or any other Loan Document(s)).

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2.8Method and Place of Payment to Lender. Except as otherwise specifically provided herein, all payments and prepayments under this Agreement and the Note shall be made to Lender not later than 2:00 p.m. New York City time, on the date when due and shall be made in lawful money of the United States of America by wire transfer in federal or other immediately available funds to the account identified on Exhibit B attached hereto and made a part hereof or such other accounts as may be designated in writing, from time to time, by Lender. Any funds received by Lender after such time shall, for all purposes hereof, be deemed to have been paid on the next succeeding Business Day. Lender shall notify Borrowers in writing of any changes in the account to which payments are to be made. All payments made by Borrowers hereunder, or by Borrowers under the other Loan Documents, shall be made irrespective of, and without any deduction for, any set-offs or counterclaims. Whenever any payment to be made under the Note shall be stated to be due on a day other than a Business Day, such payment may be made on the next succeeding Business Day.

2.9Taxes. All payments made by Borrowers under the Note, this Agreement and the other Loan Documents shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority (other than taxes imposed on the income of Lender, or any franchise taxes assessed to Lender).

2.10Release of Collateral. Subject to Section 8.4, upon indefeasible repayment of the Secured Obligations, and upon the performance of all of the obligations of Borrowers hereunder and under the other Loan Documents, in full in accordance with the terms hereof and thereof, Lender shall, promptly after such payment and performance, and at the sole cost and expense of Borrowers, release or cause to be released all Liens with respect to all Collateral or at Borrowers’ request.

2.11Intentionally Omitted.

2.12Security Agreement.

2.12.1 Pledge of Account. To secure the full and punctual payment and performance of all of the Secured Obligations, Borrowers hereby assign, convey, pledge and transfer to Lender as secured party, and grant Lender a first and continuing security interest in and to, the following property, whether now owned or existing or hereafter acquired or arising and regardless of where located (collectively, the “Account Collateral”):

A.all of the right, title and interest of Borrowers and Property Manager (if any) in and to the Pledged Accounts and all Money and Permitted Investments, if any, from time to time deposited or held in the Pledged Accounts or purchased with funds or assets on deposit;

B.all of the right, title and interest of Borrowers in and to interest, dividends, Money, Instruments and other property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any of the foregoing until such time as such items are indefeasibly disbursed from the Pledged Accounts; and

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document C.to the extent not covered by clause (A) or (B) above, all of the right, title and interest of the Borrowers in Proceeds of any or all of the foregoing until such time as such items are indefeasibly disbursed from the Pledged Accounts.

2.12.2 Covenants. The Pledged Accounts, pursuant to and in accordance with the Cash Collateral Agreement, shall be under the sole dominion and control, and the “control” within the meaning of Section 9-104 and Section 9-106 of the UCC, of Lender. The Account Collateral shall be subject to such Legal Requirements, and such applicable regulations of the Board of Governors of the Federal Reserve System and of any other banking authority or Governmental Authority, as may now or hereafter be in effect, and to the rules, regulations and procedures of Lender relating to demand deposit accounts generally from time to time in effect.

2.12.3 Financing Statements; Further Assurances. Borrowers hereby authorize the filing of any financing statements (including without limitation any UCC-1 statements) or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Lender may determine, in its sole discretion, are necessary or advisable to perfect the security interest granted to Lender in connection herewith. Such financing statements shall describe the collateral in the same manner as described in any security agreement or pledge agreement entered into by the parties in connection herewith or may contain an indication or description of collateral that describes such property in any other manner as Lender may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the collateral granted to Lender in connection herewith, including, without limitation, describing such property as “all assets” or “all personal property” of Borrowers whether now owned or hereafter acquired. From time to time, at the expense of Borrowers, Borrowers shall promptly execute and deliver all further instruments, and take all further action, that Lender may request, in order to continue the perfection and protection of the pledge and security interest granted or purported to be granted hereby.

2.12.4 Transfers and Other Liens. Borrowers shall not sell or otherwise dispose of any of the Account Collateral other than pursuant to the terms of this Agreement and the other Loan Documents, or create or permit to exist any Lien upon or with respect to all or any of the Account Collateral, except for the Lien granted to Lender, and the rights of the institution acting as Lender, under or as contemplated by this Agreement.

2.12.5 No Waiver. Every right and remedy granted to Lender under this Agreement or by law may be exercised by Lender at any time and from time to time, and as often as Lender may deem it expedient. Until such time as all Secured Obligations are fully and indefeasibly satisfied, any and all of Lender’s rights with respect to the pledge of and security interest in the Account Collateral granted hereunder shall continue unimpaired, and to the extent permitted by law, Borrowers shall be and remain obligated in accordance with the terms hereof, notwithstanding (i) any proceeding of any Borrower under the United States Bankruptcy Code or any bankruptcy, insolvency or reorganization laws or statutes of any state, (ii) the release or substitution of Account Collateral at any time, or of any rights or interests therein or (iii) any delay, extension of time, renewal, compromise or other indulgence granted by Lender in the event of any Default or Event of Default with respect to the Account

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Collateral or otherwise hereunder. No delay or extension of time by Lender in exercising any power of sale, option or other right or remedy hereunder, and no notice or demand which may be given to or made upon Borrowers (or any of them) by Lender, shall constitute a waiver thereof, or limit, impair or prejudice Lender’s right, without notice or demand, to take any action against such Borrowers or to exercise any other power of sale, option or any other right or remedy.

2.12.6 Lender Appointed Attorney-In-Fact. Borrowers hereby irrevocably constitute and appoint Lender as Borrowers’ true and lawful attorney-in-fact, with full power of substitution, at any time after the occurrence and during the continuation of an Event of Default, to execute, acknowledge and deliver any instruments and to exercise and enforce every right, power, remedy, option and privilege of Borrowers with respect to the Account Collateral, and do in the name, place and stead of Borrowers, all such acts, things and deeds for and on behalf of and in the name of Borrowers with respect to the Account Collateral, that Borrowers could or might do or which Lender may deem necessary or desirable to more fully vest in Lender the rights and remedies provided for herein with respect to the Account Collateral and to accomplish the purposes of this Agreement. The foregoing powers of attorney are irrevocable and coupled with an interest and shall terminate upon indefeasible repayment of the Secured Obligations in full.

2.12.7 Continuing Security Interest; Termination. This Section 2.12 shall create a continuing pledge of and security interest in the Account Collateral and shall remain in full force and effect until indefeasible payment in full of the Secured Obligations. Upon indefeasible payment in full of the Secured Obligations, Borrowers shall be entitled to the return, upon its request and at its expense, of such of the Account Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof, and, upon indefeasible payment in full of the Secured Obligations, Lender shall release any funds then held by Lender in accounts established by Borrowers with Lender pursuant to this Agreement and shall execute such instruments and documents as may be reasonably requested by Borrowers to evidence such termination and the release of the pledge and lien granted hereunder or under the other Loan Documents; provided, however, that Borrowers shall simultaneously pay on demand upon presentation of invoices, all of Lender’s out-of- pocket expenses in connection therewith (including reasonable attorneys’ fees and disbursements).

2.12.8 Right of Set-off. Prior to the existence of an Event of Default, Lender waives any and all rights Lender may have at law or otherwise to set off or make any claim against the Account Collateral, except, with respect to any checks returned for insufficient funds, and the payment of Lender’s out-of-pocket fees and expenses due under this Agreement (including reasonable attorney fees and disbursements) for the maintenance of the Account Collateral.

2.13Mortgage Recording Taxes. The Liens to be created by each Mortgage are intended to encumber the Property encumbered by such Mortgage to the full extent of the entire Loan Amount. On the Closing Date, Borrowers shall have paid all state, county and municipal recording and all other taxes, if any, imposed upon the execution and recordation of each Mortgage.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2.14Permitted Uses of Loan. The proceeds of the Loan shall be used solely for the following: (i) closing costs payable on the Closing Date, and (iii) such other costs as may be set forth on a settlement statement prepared upon the closing of the Loan and approved by Lender.

2.15General Interest Provisions. In the event that any Legal Requirement, any change therein or in the interpretation or application thereof, or compliance by Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority:

(i)does or shall hereafter subject Lender to any tax of any kind whatsoever (other than gross receipts, income, franchise, capital stock or similar taxes) with respect to the Loan, this Agreement, the Note or any other Loan Document, or change the basis of taxation of payments to Lender of principal, commitment fee, deposit, interest or any other amount payable hereunder or under any other Loan Document (except for changes in the rate of tax on the overall gross receipts, income, franchise or capital stock of Lender) and such incremental increase is actually paid;

(ii)does or shall hereafter impose, modify or apply any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of Lender;

(iii)does or shall hereafter have the effect of reducing the rate of return on Lender’s capital as a consequence of its obligations hereunder to a level below that which Lender could have achieved but for such adoption, change or compliance (taking into consideration Lender’s policies with respect to capital adequacy) by any amount deemed by Lender to be material; or

(iv)does or shall hereafter impose on Lender any other condition; and the result of any of the foregoing is to increase the cost to Lender of making, renewing or maintaining loans or extensions of credit or to reduce any amount receivable hereunder, then, in any such case, Borrowers shall promptly pay Lender upon demand any additional amounts necessary to compensate Lender for such additional cost or reduced amount receivable in respect of the Loan. If Lender becomes entitled to claim any additional amounts pursuant to this Section 2.15 Lender shall, in reasonable detail, notify Borrowers in writing promptly of the event by reason of which Lender has become so entitled and the additional amount required to fully compensate Lender for such additional cost or reduced amount in respect of the Loan. Such written notice as to any additional costs or amounts payable pursuant to the foregoing sentence submitted by Lender to Borrowers (together with such reasonable detailed supporting information) shall be conclusive in the absence of manifest error.

ARTICLE 3 CONDITIONS PRECEDENT

3.1Conditions Precedent to Effectiveness. This Agreement shall become effective on the date that all of the following conditions shall have been satisfied (or waived in accordance with Section 10.4) (the “Closing Date”):

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3.1.1 Loan Documents. Each of Borrower, Guarantor and Lender shall have executed and delivered each of the applicable Loan Documents to which Borrower, Guarantor and Lender, as applicable, is intended to be a party. Borrowers shall have caused all other Persons that are intended to be parties to the Loan Documents to execute and deliver such Loan Documents.

3.1.2 Opinions of Counsel. Lender shall have received from counsel to Borrowers and Guarantor, one or more legal opinions addressed to Lender and its successors and assigns, dated as of the Closing Date, and in form, scope and substance reasonably satisfactory to Lender and its counsel, with respect to corporate, limited liability company and partnership matters, enforceability of the Loan Documents and such other customary opinions as may be required by Lender or its counsel.

3.1.3 Organizational Documents; Resolutions. Lender shall have received the fully completed Governing Documents Certificate with all exhibits and schedules attached.

3.1.4 Additional Matters. Lender shall have received such other certificates, documents and instruments relating to the Loan as may have been reasonably requested by Lender. All corporate, limited liability company, partnership and other organizational proceedings, all other documents (including, without limitation, all documents referred to herein and not appearing as exhibits hereto) and all legal matters in connection with the Loan shall be reasonably satisfactory in form and substance to Lender.

3.1.5 Transaction Costs. Borrowers shall have paid (or shall pay on the Closing Date) all Transaction Costs for which bills have been submitted in accordance with the provisions of Section 10.22.

3.1.6 No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing on the Closing Date.

3.1.7 No Injunction. No law or regulation shall have been adopted, no order, judgment or decree of any Governmental Authority shall have been issued, and no litigation shall be pending or threatened (in writing), that, in the good faith judgment of Lender, would enjoin, prohibit or restrain the making or repayment of the Loan or the consummation of the Transaction or result in a Material Adverse Effect.

3.1.8 Representations and Warranties. The representations and warranties herein and in the other Loan Documents shall be true and correct on the Closing Date (unless by their terms they are made solely as of another date, in which event such representations and warranties shall remain true and correct as of such other date).

3.1.9 Survey. Lender shall have received a Survey for each Property, which shall be in form and substance satisfactory to Lender.

3.1.10 Financial Information. Borrowers and Guarantor shall have delivered financial statements, reports and documentation in form and substance satisfactory to Lender.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3.1.11 Appraisal. Lender shall have received an Appraisal with respect to each Property, which shall be in form and substance satisfactory to Lender.

3.1.12 Insurance. Lender shall have received certificates of insurance demonstrating insurance coverage in respect of each Property of types, in amounts, with insurers and otherwise in compliance with the terms, provisions and conditions set forth in this Agreement and the Insurance Agreement and otherwise in form an substance satisfactory to Lender. Such certificates shall indicate, among other things, that Lender is a named additional insured and shall contain a loss payee endorsement in favor of Lender with respect to each property policy required to be maintained under this Agreement and the Insurance Agreement.

3.1.13 Title Insurance Policy. Lender shall have received a final Title Insurance Policy (in form and substance satisfactory to Lender) covering each Property with an aggregate amount of insurance equal to the Loan Amount.

3.1.14 Lien Search Reports. Lender shall have received satisfactory reports of UCC, tax lien, bankruptcy, judgment and litigation searches and title updates conducted by search firms and/or title companies acceptable to Lender with respect to the Collateral, each Borrower, Guarantor and each other Borrower Control Person, and each Borrower Owner Person designated by Lender, such searches to be conducted in such locations as Lender shall require.

3.1.15 Consents, Licenses, Approvals, etc. Lender shall have received copies of all consents, licenses and approvals, if any, required in connection with the execution, delivery and performance by Borrowers, Guarantor and each other Borrower Control Person, and the validity and enforceability, of the Loan Documents, and such consents, licenses and approvals shall be in full force and effect.

3.1.16 Appointment of Agent for Service of Process. Lender shall have received and approved a letter appointing (and accepted by) Schiff Hardin LLP as agent for service of process for Guarantor.

3.1.17 Other Conditions Satisfied. Each of the other conditions precedent required to be satisfied on the Closing Date, and each of the other documents to be delivered on the Closing Date in accordance with the Loan Documents, shall have been properly satisfied and delivered in accordance with the relevant provisions thereof.

3.1.18 Required Leases. Borrowers shall have entered into a Lease with each of the Required Tenants, each such Lease shall be acceptable to Lender, Borrowers shall have delivered true and complete copies of each such Lease to Lender and Lender shall be in receipt of an estoppel certificate and subordination, nondisturbance and attornment agreement (where required by Lender) from each Required Tenant, in each case, in form and substance satisfactory to Lender, with respect to each such Lease.

3.1.19 Zoning Reports. Lender shall have received a zoning report for each Property certified to Lender stating that the applicable Property is in compliance with all

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document applicable zoning laws, rules and regulations and shall otherwise be in form and substance satisfactory to Lender.

3.2Execution and Delivery of Agreement. The execution and delivery by Borrowers of this Agreement shall constitute a representation and warranty by Borrowers to Lender that all of the conditions required to be satisfied under Section 3.1 have been satisfied or waived in accordance with Section 10.4.

3.3Acceptance of Borrowings. The acceptance by Borrowers of the proceeds of the Loan on the Closing Date shall constitute a representation and warranty by Borrowers to Lender that all of the conditions to be satisfied under Section 3.1 in connection with the making of the Loan have been satisfied or waived in accordance with Section 10.4.

3.4Form of Loan Documents and Related Matters. All of the Loan Documents to which any Borrower or any Guarantor is a party, whether or not referred to in this Section 3, unless otherwise specified, shall be delivered to Lender, and shall be in form and substance satisfactory to Lender.

3.5No Material Adverse Effect. There shall have been no Material Adverse Effect in respect of any Property, any Borrower, Guarantor or any other Borrower Control Person. There shall be no pending or threatened (in writing) litigation against any Borrower, any Guarantor or any other Borrower Control Person, or involving any Property that could have a Material Adverse Effect, that has not been previously disclosed to Lender and approved by Lender in writing.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES

4.1Representations and Warranties as to each Borrower. Each Borrower hereby represents and warrants that:

4.1.1 Due Authorization. Each individual who executes any of the Loan Documents on behalf of any Borrower has been duly authorized to do so by all necessary corporate, partnership, limited liability company or other action, as may be applicable, on the part of such Borrower. On or prior to the Closing Date, each Borrower has obtained all consents and approvals required in connection with the execution, delivery and performance of this Agreement and the other Loan Documents.

4.1.2 Organizational Structure.

(i)(a) Each Borrower is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware, (b) Neelytown Borrower is authorized to do business under the laws of the State of New York, (c) McIntire Borrower is authorized to do business under the laws of the State of Delaware, (d) Olney Borrower is authorized to do business under the laws of the State of New Jersey, (e) Cozine Borrower is authorized to do business under the laws of the State of New York (f) each Borrower is a Person that complies with the provisions of Section 5.1.14, (g) each Borrower is the sole owner (together with one or more other Borrowers) of the Property, and (h) each Borrower has the tax identification number identified on the Form W-9 supplied to Lender by such Borrower on or prior to the date hereof.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii)Managing Member is (a) a limited partnership, duly formed, validly existing and in good standing under the laws of the State of Delaware, (b) a Person that complies with the provisions of Section 5.1.14, and (c) is the sole owner of one hundred percent (100%) of the ownership interests in each of the Borrowers and the sole managing member of each Borrower.

(iii)Attached hereto as Exhibit A is a true, complete and correct organizational chart of Borrowers identifying all of the holders of direct and indirect interests in each Borrower.

(iv)The execution, delivery and performance by each Borrower Control Person of the Loan Documents to which such Borrower Control Person is a party, and the creation of the security interests and liens provided for in this Agreement and the other Loan Documents, are within the corporate, partnership or limited liability company (as applicable) power and authority of such Borrower Control Person, and have been duly authorized by all necessary action of all necessary Borrower Control Persons and Governmental Authorities, and will not violate any provision of the Organizational Documents of such Borrower Control Person.

(v)The execution, delivery and performance by each Borrower Control Person of the Loan Documents to which such Borrower Control Person is a party and the creation of the security interests and liens provided for in this Agreement and the other Loan Documents, will not contravene any indenture or agreement or other instrument, or contractual or other restriction, binding on or affecting such Borrower Control Person and will not conflict with or result in or require the creation of any Lien of any nature whatsoever (other than pursuant to the Loan Documents) upon or with respect to any Property or any of the properties or assets of such Borrower Control Person.

(vi)This Agreement, and each other Loan Document to which any Borrower Control Person is a party will, when delivered hereunder, be legal, valid and binding obligations of such Borrower Control Person enforceable against such Borrower Control Person in accordance with their respective terms, except as limited by equitable principles and bankruptcy, insolvency and similar laws affecting creditors’ rights. This Agreement, the Note and such other Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by any Borrower Control Person (including the defense of usury), and no Borrower Control Person has asserted any right of rescission, set-off, counterclaim or defense with respect thereto.

(vii)The execution, delivery and performance by each Borrower Control Person of the Loan Documents and the creation of the security interests and liens provided for in this Agreement and the other Loan Documents to which they are party does not contravene any Legal Requirements, any order of any court or other Governmental Authority or the Organizational Documents. Other than those obtained or filed on or prior to the Closing Date, neither any Borrower nor any Guarantor is required to obtain any consent, approval or authorization from, or to file declaration or statement with, any Governmental Authority or other agency in connection with or as a condition to the execution, delivery or performance of this Agreement, the Note or the other Loan Documents executed and delivered by any Borrower and/or any Guarantor.

(viii)No part of any Property or the Collateral is in the hands of a receiver, no application for a receiver is pending with respect to any portion of any Property or the

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Collateral, and no part of any Property or other Collateral is subject to any foreclosure or similar proceeding.

(ix)No Borrower Control Person has made any assignment for the benefit of creditors, nor has any Borrower Control Person filed, or had filed against it, any petition in bankruptcy.

(x)Each Borrower Control Person has (a) filed all tax returns required to have been filed by such Borrower Control Person under the Legal Requirements, and (b) paid all taxes that are due and payable by such Borrower Control Person, as may be applicable, or have been assessed against such Borrower Control Person, as may be applicable.

4.1.3 Authorization; No Conflict; Consents and Approvals. The execution and delivery by each Borrower and Guarantor of this Agreement, the Note, the Guaranty and each of the other Loan Documents, the performance by each Borrower and Guarantor of its/his (as applicable) respective obligations hereunder and thereunder, as applicable, and the creation of the security interests and liens provided for in this Agreement and the other Loan Documents (i) have been duly authorized by all requisite action on the part of each Borrower, (ii) will not violate any provision of any Legal Requirements, (iii) will not violate any order of any court or other Governmental Authority, the Organizational Documents or any indenture or agreement or other instrument to which any Borrower is a party or by which any Borrower or any Guarantor is bound, and (iii) will not be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any Lien of any nature whatsoever upon any Property pursuant to, any such indenture or agreement or material instrument other than the Loan Documents. Other than those obtained or filed on or prior to the Closing Date, neither any Borrower nor any Guarantor is required to obtain any consent, approval or authorization from, or to file declaration or statement with, any Governmental Authority or other agency in connection with or as a condition to the execution, delivery or performance of this Agreement, the Note or the other Loan Documents executed and delivered by any Borrower and/or any Guarantor.

4.1.4 Single Purpose Entity. Each Borrower is a single purpose entity and complies with the single purpose entity requirements set forth in Section 5.1.14 of this Agreement.

4.1.5 Enforceability. This Agreement, and each other Loan Document to which any Borrower and/or any Guarantor is a party will, when delivered hereunder, be legal, valid and binding obligations of such Borrower and/or any Guarantor enforceable against such Borrower and/or any Guarantor in accordance with their respective terms, except as limited by equitable principles and bankruptcy, insolvency and similar laws affecting creditors’ rights. This Agreement, the Note and the other Loan Documents are, as of the Closing Date, not subject to any right of rescission, set-off, counterclaim or defense by any Borrower and/ or any Guarantor (including the defense of usury), and neither any Borrower nor any Guarantor has asserted any right of rescission, set-off, counterclaim or defense with respect thereto.

4.1.6 Litigation. Except as set forth on Schedule 4.1.6 attached hereto, there is no pending or, to Borrowers’ knowledge, threatened, litigation, action, proceeding or

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document investigation, including, without limitation, any condemnation proceeding, against any Borrower, any Guarantor, any other Borrower Control Person or any Property before any court, governmental or quasi- governmental, arbitrator or other authority.

4.1.7 Defaults of Borrower Control Person. None of the Borrowers, or the Guarantor and none of the other Borrower Control Persons, is in default (beyond the applicable notice and cure periods) in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which it is a party or by which any Borrower, any Guarantor or any other Borrower Control Person or any Collateral, or any of the other properties or assets of any Borrower, any Guarantor or any other Borrower Control Person is bound that is reasonably likely to have a Material Adverse Effect. No Borrower Control Person is a party to any agreement or instrument or subject to any restriction that is reasonably likely to have a Material Adverse Effect.

4.1.8 No Bankruptcy Filing. No Borrower Control Person is contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its respective assets or property. To Borrowers’ knowledge, no Person is contemplating the filing of any such petition against any Borrower Control Person.

4.1.9 Solvency. Giving effect to the transactions contemplated hereby, the fair saleable value of each Borrower’s assets, taken as a whole, exceeds and will, immediately following the making of the Loan, exceed such Borrower’s total liabilities (including, without limitation, subordinated, unliquidated, disputed and Contingent Obligations). Each Borrower’s assets, do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out the business of such Borrower as conducted or as proposed to be conducted. No Borrower intends to, or believes that it will, incur debts and liabilities (including, without limitation, contingent liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in respect of the obligations of any such Borrower).

4.1.10 Other Debt. Except for Permitted Debt, Borrowers have not borrowed or received other debt financing whether unsecured or secured by any Property or any part thereof.

4.1.11 Full and Accurate Disclosure. No statement of fact made by or on behalf of any Borrower Control Person in this Agreement or in any of the other Loan Documents contains any untrue statement of material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading. There is no fact known to any Borrower that has not been disclosed to Lender that is likely to result in a Material Adverse Effect.

4.1.12 Financial Information. All financial data concerning the Borrower Control Person, each Property and the other Collateral that has been delivered by or on behalf of any Borrower Control Person to Lender is true, complete and correct in all material respects and has been prepared in accordance with GAAP, consistently applied. Since the delivery of such data, except as otherwise disclosed in writing to Lender, there has been no material adverse

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document change in the financial position of any Borrower Control Person, each Property, or in the results of operations of any Borrower Control Person. None of the Borrower Control Persons have incurred any material obligation or liability, contingent or otherwise, not reflected in such financial data.

4.1.13 Investment Company Act; Public Utility Holding Company Act. None of the Borrower Control Persons are (i) an “investment company”, an “affiliated person” of, “promoter” or “principal” underwriters for or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, (ii) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as amended, or (iii) subject to any other Legal Requirements that purports to restrict or regulate its ability to borrow money in accordance with this Agreement.

4.1.14 Compliance. Each Borrower and Guarantor is in compliance with all applicable Legal Requirements and neither Borrower nor Guarantor has received any written notice that Borrower or Guarantor has violated any applicable Legal Requirement(s). Neither Borrower nor Guarantor is in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority.

4.1.15 Use of Proceeds; Margin Regulations. Borrowers shall use the proceeds of the Loan (i) solely for the purposes described in Section 2.14, and (ii) for no other purpose whatsoever. Borrowers shall not use any part of the proceeds of the Loan for the purposes of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any purpose that would be inconsistent with such Regulation U or any other Regulations of the Board of Governors, or for any purposes prohibited by any Legal Requirements.

4.1.16 Repairs and Alterations. There is no major ongoing alteration, construction or other improvement work at any Property.

4.1.17 No Defaults. No Default or Event of Default exists under or with respect to any Loan Document.

4.1.18 Plans and Welfare Plans; ERISA. The assets of Borrowers (or any of them) are not treated as “plan assets” under regulations currently promulgated under ERISA. Each Plan, and, to the actual knowledge of each Borrower, each Multiemployer Plan, is in compliance in all material respects with, and has been administered in all material respects in compliance with, its terms and the applicable provisions of ERISA, the Code and any other federal or state law. There are no pending issues or claims before the Internal Revenue Service, the United States Department of Labor or any court of competent jurisdiction related to any Plan or Welfare Plan. No ERISA Event has occurred, and there exists no condition or set of circumstances, in connection with any Plan or Welfare Plan under which any Borrower or, to the best knowledge of any Borrower, any ERISA Affiliate, directly or indirectly (through an indemnification agreement or otherwise), is reasonably likely to be subject to any material risk of liability under Section 409 or 502(i) of ERISA or Section 4975 of the Code.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document No Welfare Plan provides or will provide benefits, including, without limitation, death or medical benefits (whether or not insured) with respect to any current or former employee of any Borrower, or, to the best knowledge of any Borrower, any ERISA Affiliate beyond his or her retirement or other termination of service other than (i) coverage mandated by Legal Requirements, (ii) death or disability benefits that have been fully provided for by fully paid up insurance or (iii) severance benefits. Each Borrower currently complies with ERISA. Neither the making of the loan evidenced by the Note and this Agreement and secured by the Mortgages nor the exercise by Lender of any of Lender’s rights under the Loan Documents constitutes or will constitute a non-exempt, prohibited transaction under ERISA or Section 4975 of the Code.

4.1.19 Additional Borrower UCC Information. The full legal name of each Borrower is as set forth on the signature page hereof. No Borrower does any business under any other name (including any trade-name or fictitious business name).

4.1.20 Not Foreign Person or Prohibited Person. Neither Borrower nor Guarantor is a “foreign person” within the meaning of § 1445(f)(3) and 7701 of the Code. Neither Borrower nor Guarantor is a Prohibited Person.

4.1.21 Labor Matters. No Borrower is a party to and no Property is subject to any collective bargaining agreements.

4.1.22 Source of Funds. No Borrower receives more than five percent (5%) of its revenue or capital from business conducted in or with countries sanctioned by the U.S. Treasury Department of Foreign Assets Control, except in connection with “Country Sanction Programs” promulgated thereby.

4.2Representations and Warranties as to each Property. Each Borrower hereby represents and warrants to Lender that, as of the Closing Date:

4.2.1 Title to each Property. Borrowers own good, marketable and indefeasible fee simple title in and to each Property, free and clear of all Liens other than the Permitted Encumbrances. Borrowers are the sole and absolute owner of the Chattels, the Intangible Personalty and the other Collateral in respect of each Property free and clear of all Liens other than Permitted Encumbrances. There are no outstanding options to purchase or rights of first refusal or first offer or restrictions on transferability affecting any Property. None of the Borrowers have received (i) any written notice from any Governmental Authority having jurisdiction over any Property as to any violation of any applicable Legal Requirement, or (ii) any written notice from any insurance company or inspection or rating bureau setting forth any requirements as a condition to the continuation of any insurance coverage on or with respect to any Property or the continuation thereof at premium rates existing at present, which, in either case, has not been remedied or satisfied.

4.2.2 Utilities and Public Access. Each Property has direct access to public streets or roadways in each case adequate to meet the needs of the Improvements and no Borrower has any knowledge of any plans by any Governmental Authority to change the highway or road system in the vicinity of any Property or to restrict or change access from any such public

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document street or roadway. Each Property is or will be served by water, electric, sanitary sewer and storm drain facilities, in each case, adequate to meet the needs of the Improvements. All public utilities necessary to the use and enjoyment of each Property are located in the public right-of-way abutting such Property, including, but not limited to, water supply, storm and sanitary sewer facilities, natural gas, electric and telephone facilities, cable television facilities and high speed internet access facilities, and all such utilities are or shall be connected so as to serve each Property without passing over other property except for land or easement areas of or available to the utility company providing such utility service. The Access Agreements, if any, are in full force and effect and there are no defaults thereunder by any Borrower or any other party and no conditions which with the passage of time and/or notice would constitute defaults thereunder. All amounts due and payable by Borrower under any Access Agreement have been paid.

4.2.3 Condemnation. No Taking has been commenced or to the knowledge of any Borrower has been threatened in writing with respect to all or any portion of any Property or for the relocation of roadways providing access to any Property.

4.2.4 Compliance; Insurance. Each Property is in compliance (or is deemed legally nonconforming) with all applicable Legal Requirements (including, without limitation, building and zoning and subdivision ordinances and codes but excluding any Environmental Laws) and all applicable Insurance Requirements. All insurance policies held by Borrowers relating to or affecting any Property are in full force and effect. None of the Borrowers have received any written notice of default or notice terminating or threatening in writing to terminate any such insurance policies.

4.2.5 Environmental Compliance.

A. Except as disclosed in the Environmental Reports, each Borrower is in full compliance with all applicable Environmental Laws (which compliance includes, but is not limited to, the possession by such Borrower of all environmental, health and safety permits, licenses and other governmental authorizations required in connection with the ownership and operation of each Property under all applicable Environmental Laws).

B. No Liens are presently recorded with the appropriate land records under or pursuant to any applicable Environmental Law with respect to any Property, and no Governmental Authority has been taking or, to Borrowers’ knowledge, is in the process of taking any action that could subject any Property to Liens under any applicable Environmental Law.

4.2.6 Mortgage and Other Liens. Each Mortgage will create a valid and enforceable first priority Lien on the Property described therein, as security for the repayment of the Secured Obligations, subject only to Permitted Encumbrances. This Agreement creates a valid and enforceable first priority Lien on all Account Collateral. Each Security Document establishes and creates a valid and enforceable Lien on and a security interest in, or claim to, the rights and property described therein. To the extent governed by the UCC, upon proper recording and/or filing, as applicable, of each of the UCC-1 Financing Statements in the appropriate recording and/or filing office, as applicable, the UCC-1 Financing Statements will

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document perfect the security interest created in favor of Lender in all property covered by any Security Document in which a security interest may be perfected by the filing of a financing statement, and such security interest shall be a valid and first priority lien.

4.2.7 Assessments; Impositions. There are no special or other assessments for public improvements or otherwise now affecting any Property. There are no pending or, to any Borrower’s knowledge, proposed special or other assessments for public improvements or otherwise affecting any Property, nor are there, to any Borrower’s knowledge, any contemplated improvements to any Property that may result in such special or other assessments other than regular real estate tax assessments. There are no outstanding Impositions, and all Impositions that are due and payable have been paid in full. There are no tax abatements or exemptions affecting any Property. There are no license fees or similar charges required in respect to any filled land or in respect of any tideland, wetland or other bodies of water.

4.2.8 No Joint Assessment; Separate Lots. No Property is jointly assessed (i) with any other real property constituting a separate tax lot, or (ii) with any portion of any Property that may be deemed to constitute personal property, or any other procedure whereby the lien of any taxes that may be levied against such personal property shall be assessed or levied or charged to any Property as a single lien. Each Property is comprised of one or more parcels, each of which constitutes a separate tax lot and none of which constitutes a portion of any other tax lot.

4.2.9 No Prior Assignment. Lender is the collateral assignee of each Borrower’s interest under the Contracts and the Leases. There are no prior assignments by any Borrower of the Contracts and of the Leases or any portion of the Revenue.

4.2.10 Flood Zone. No portions of any Property are located in a flood hazard area as defined by the Federal Insurance Administration, except as expressly identified in the Survey for such Property.

4.2.11 Intellectual Property. (i) All Intellectual Property that any Borrower owns or has pending, or under which it is licensed, is in good standing and uncontested, (ii) there is no Intellectual Property that any Borrower currently owns that is necessary to the business of such Borrower as presently conducted or as such Borrower contemplates conducting prior to the repayment in full of the Secured Obligations, (iii) each Borrower has not infringed, is not infringing, and has not received written notice of infringement with respect to asserted trademarks of others, and (iv) to each Borrower’s knowledge, there is no infringement by others of any material Intellectual Property of such Borrower.

4.2.12 No Encroachments. With respect to each Property, except as set forth on the Survey for such Property and/or in the zoning report for such Property delivered to Lender in connection with the closing of the Loan: (i) all of the Improvements that were included in determining the appraised value of such Property lie wholly within the boundaries and building restriction lines of the Land included in such Property, (ii) no improvements on adjoining properties encroach upon the Land included in such Property, and (iii) no easements or other encumbrances upon the Land included in such Property encroach upon any of the

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Improvements included in such Property, so as to affect the value or marketability of such Property, except those that are insured against by the Title Insurance Policy in favor of Lender.

4.2.13 Leases. As of the Closing Date, (i) no Property is subject to any Leases other than those identified in the Certificate Concerning Leases and Financial Condition, (ii) no Person has any possessory interest in any Property or right to occupy any Property other than tenants under the Leases identified in the Certificate Concerning Leases and Financial Condition and Borrowers, (iii) no written or oral agreements or understandings (including, without limitation, electronic mail and electronic instant messaging correspondence) exist between any Borrower and any Person that grant such Person any rights to occupy any Property other than the Leases identified in the Certificate Concerning Leases and Financial Condition, (iv) each Borrower has delivered to Lender true and complete copies of all Leases identified in the Certificate Concerning Leases and Financial Condition, and (A) each such Lease is in full force and effect, (B) no default exists under any Lease, (C) each Lease reflects the entire agreement between the parties thereto, and there is no amendment, modification, supplement, side letter or any other agreement with respect to any Lease except as identified in the Certificate Concerning Leases and Financial Condition. There are no purchase options, purchase contracts or other similar purchase or sale agreements of any type (written or oral) presently affecting any part of any Property.

4.2.14 No Other Real Property. With respect to each Property, except for the Land included in such Property and public streets and sidewalks, the Borrowers do not use or occupy any other material real property in connection with such Property or the operation, occupancy and management of such Property and all amenities (including parking) made available to guests and other users of such Property. With respect to each Property, the Land included in such Property includes all of the land required for the use of such Property by the Borrowers. Each Property includes all of Borrowers’ interests in such Property.

4.2.15 Personal Property. Borrowers have good title to all Equipment and Inventory, if any, free of all Liens, except the Permitted Encumbrances.

4.2.16 Fees, Commissions and Compensation. Except as disclosed in the Certificate Concerning Leases and Financial Condition, no Person has any right or claim to any fees, commissions, compensation or other remuneration in connection with or arising out of the financing, sale or lease of all or any portion of any Property. Except with respect to the management agreements and leasing agreements in effect as of the date hereof, no Person has any right or claim to any fees, commissions, compensation or other remuneration in connection with or arising out of the use, occupancy, management or operation of the all or any portion of any Property. Except as disclosed in the Certificate Concerning Leases and Financial Condition, there exists no brokerage agreement with respect to any Property or any portion thereof.

4.2.17 Zoning. Except as may be set forth in the zoning reports delivered to Lender in connection with the closing of the Loan, the applicable zoning ordinances permit the use and operation of each Property as a single-tenant industrial complex, as a permitted use, and not as a non-conforming use. Except as may be expressly set forth in the zoning reports delivered to Lender in connection with the closing of the Loan, each Property complies with

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the approvals granted by the applicable Governmental Authority in respect of such Property and all applicable zoning ordinances, regulations, requirements, conditions and restrictions, including but not limited to deed restrictions and restrictive covenants, applicable to such Property. Each Property is located in the zoning districts set forth on Schedule 4.2.17 attached hereto.

4.2.18 Contracts. Except to the extent disclosed to Lender in the Certificate of Leases and Financial Condition, (i) there are no Contracts presently affecting any Property having a term in excess of one hundred eighty (180) days or not terminable by Borrowers (without penalty) on thirty (30) days’ notice, (ii) Borrowers have heretofore delivered to Lender true, correct and complete copies of each of the Contracts together with all amendments thereto, (iii) Borrowers are not in default beyond any applicable notice and/ or cure period of any obligations under any of the Contracts, and (iv) the Contracts represent the complete agreement between Borrowers and such other parties as to the services to be performed or materials to be provided thereunder and the compensation to be paid for such services or materials, as applicable, and except as otherwise disclosed herein, such other parties possess no unsatisfied claims against Borrowers.

4.2.19 Permits. Borrowers have obtained all Permits necessary for the operation, use, ownership, development, occupancy and maintenance of the Properties for the current uses and occupancy and the uses and occupancy as set forth under the Leases. None of the Permits have been suspended or revoked, and all of the Permits are in full force and effect, all amounts due and payable by Borrowers in respect of such Permits have been paid, and Borrowers have made or will make application for renewals of any of the Permits prior to the expiration thereof.

4.3Survival of Representations. Borrowers agree that (i) all of the representations and warranties of Borrowers set forth in Section 4.1, Section 4.2 and Section 4.3 and in the other Loan Documents delivered on the Closing Date are made as of the Closing Date, and (ii) all such representations and warranties made by Borrowers shall survive as provided in Section 10.1. All representations, warranties, covenants and agreements made in this Agreement or in the other Loan Documents shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf or any documents or other materials delivered to or reviewed by Lender.

ARTICLE 5 AFFIRMATIVE COVENANTS

5.1Affirmative Covenants. Borrowers covenant and agree that, from the date hereof and until payment in full of the Secured Obligations:

5.1.1 Existence; Compliance with Legal Requirements: Insurance. Each Borrower shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect such Borrower’s existence as a limited liability company, the rights, licenses, Permits and franchises necessary for the conduct of such Borrower’s business and comply with all Legal Requirements and Insurance Requirements applicable to Borrowers and the Properties. Borrowers shall at all times maintain, preserve and protect all franchises and trade names and preserve all the remainder of Borrowers’ property necessary for the continued

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document conduct of Borrowers’ business and keep each Property in good repair, working order and condition, except for reasonable wear and use (and except for casualty losses as to which other provisions hereof shall govern), and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto. Borrowers shall keep each Property insured at all times in accordance with the requirements set forth in this Agreement and in the Insurance Agreement, and otherwise perform and comply with all obligations of Borrowers under the Mortgages and the other Loan Documents.

5.1.2 Impositions and Other Claims.

A.Impositions. Except to the extent Borrowers have deposited funds with the Lender pursuant to Section 5.1.2(B) below, Borrowers shall (i) pay, before delinquency and before the imposition of any penalty or interest, all Impositions, including without limitation any Property Impositions that may be levied or imposed at any time against each Property, the Chattels or the Intangible Personalty, and (ii) within ten (10) days after each payment of any such Imposition, Borrowers shall upon request deliver to Lender an official receipt for such payment, provided, however, that Borrowers are not required to furnish such receipts for payment of Property Impositions in the event that such Property Impositions have been paid by Lender pursuant to Section 5.1.2(B) below. At Lender’s option, Lender may retain the services of a firm to monitor the payment of all Property Impositions relating to any Property and the Collateral, the out-of-pocket cost of which shall be borne by Borrowers.

B.Deposit for Taxes. On the Closing Date, Borrowers shall deposit with Lender an amount equal to 1/12th of the amount that Lender reasonably estimates will be required to make the next annual payment of Property Impositions, with respect to each Property, multiplied by the number of whole or partial months that have elapsed since the date one month prior to the most recent due date for such Property Impositions. Following the Closing Date, on each Payment Date, Borrowers shall deposit with Lender an amount equal to 1/12th of the amount that Lender reasonably estimates will be required to pay the next annual payment of Property Impositions referred to in this Section with respect to each Property. The purpose of these provisions is to provide Lender with sufficient funds on hand for Lender or Servicer to pay all such Property Impositions charges thirty (30) days before the date on which they become past due. If Lender determines that the funds escrowed hereunder are, or will be, insufficient to pay such Property Impositions, Borrowers shall pay such additional sums as Lender shall reasonably determine necessary and shall pay any increased monthly charges reasonably requested by Lender. Provided that no Event of Default exists and is continuing, Lender shall apply the amounts so deposited to the payment of such Property Impositions when due, but in no event will Lender be liable for any interest on any amount so deposited, and any amount so deposited may be held and commingled with Lender’s own funds. If an Event of Default exists, Lender may apply such funds to the payment of any Property Impositions or the payment of any Secured Obligations in such order as Lender shall elect or retain the same as collateral for the Secured Obligations, in its sole discretion.

C.Intangible Taxes. If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered after the date hereof, any Imposition is imposed against the Loan, the Note, this Agreement, the Mortgages or any other Loan Document, Lender, or any interest of Lender in any real or personal property encumbered by the Loan Documents, Borrowers shall pay such Imposition before delinquency in accordance with Section 2.15 of this Agreement

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and shall indemnify Lender against all loss, expense, or diminution of income in connection therewith. In the event Borrowers are unable to do so, either for economic reasons or because the legal provisions or decisions creating such Imposition forbid Borrowers from doing so, then the Loan will, at Lender’s option, become due and payable in full upon thirty (30) days’ notice to Borrowers and Borrowers shall repay the then outstanding principal balance of the Loan Amount plus all accrued and unpaid interest, together with all other amounts outstanding under the Loan Documents, in accordance with the prepayment provisions set forth in Section 2.6 and the Note.

D.Right to Contest. Notwithstanding any other provision of this Section, Borrowers shall not be deemed to be in default solely by reason of Borrowers’ failure to pay any Imposition so long as, in Lender’s judgment, each of the following conditions is satisfied:

(i)Borrowers are engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such Impositions;

(ii)Borrowers’ payment of such Imposition would materially prejudice Borrowers’ prospects for success in such proceedings;

(iii)Nonpayment of such Imposition will not result in the loss or forfeiture of any Property or other Collateral encumbered by the Loan Documents or any interest of Lender therein; and

(iv)Borrowers deposit with Lender, as security for such payment that may ultimately be required, a sum equal to the amount of the disputed Imposition plus the interest, penalties, advertising charges, and other costs that Lender estimates are likely to become payable if Borrowers’ contest is unsuccessful, or posts a bond with the applicable taxing authority having the same effect. For the avoidance of doubt, the funds required to be deposited with Lender under this paragraph (iv) shall be in addition to all taxes, assessments and other governmental charges that are not being contested and that are subject to the deposit provisions of Section 5.1.2(B) hereof.

If Lender determines that any one or more of such conditions is not satisfied or is no longer satisfied, Borrowers shall pay the Imposition in question, together with any interest and penalties thereon, within ten (10) days after Lender gives notice of such determination.

E.Mechanic’s Liens. Borrowers shall keep each Property free and clear of all Liens and claims of Liens by contractors, subcontractors, mechanics, laborers, materialmen, and other such Persons, and will cause any recorded statement of any such Lien to be released of record or bonded off, within thirty (30) days after Borrower’s actual notice of the recording thereof. Notwithstanding the preceding sentence, however, Borrower shall not be deemed to be in default under this Section if and so long as Borrowers (a) contest in good faith the validity or amount of any asserted Lien and diligently prosecutes or defends an action appropriate to obtain a binding determination of the disputed matter, and (b) provide Lender with such security as Lender may reasonably require to protect Lender against all loss, damage, and expense, including attorneys’ fees, which Lender might incur if the asserted Lien is determined to be valid and, as may be required, to remove or bond off any such Lien, if not bonded by Borrowers.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 5.1.3 Litigation. Borrowers shall give prompt written notice to Lender of any litigation or governmental proceedings pending or threatened (in writing) against (i) any Borrower, any Property or the other Collateral, and (ii) to the extent it could have a Material Adverse Effect, any Guarantor or any other Borrower Control Person.

5.1.4 General Indemnity.

A.Borrowers shall, at their sole cost and expense, protect, defend, indemnify, release and hold harmless Lender, and its parents, subsidiaries, Affiliates, shareholders, partners, members, directors, officers, employees, trustees, representatives and Servicer and the heirs, legal representatives, successors and assigns of the foregoing (collectively, the “Indemnified Parties”) for, from and against (i) any and all claims for brokerage, leasing, finders or similar fees which may be made relating to any Property and the Secured Obligations, and (ii) any and all claims, suits, liabilities (including, without limitation, strict liabilities), administrative and judicial actions, proceedings, obligations, debts, damages, losses (including, without limitation, unrealized loss of value of any Property), costs, expenses, fines, penalties, charges, fees, judgments, awards, amounts paid in settlement, and litigation costs of whatever kind or nature that may be asserted against, imposed on or incurred by Lender (including, without limitation, Lender’s reasonable attorneys’ fees and all other reasonable costs of defense) (collectively, the “Losses”) imposed upon or incurred by or asserted against any Indemnified Parties (except to the extent same are directly caused by gross negligence or willful misconduct of any Indemnified Party) and directly or indirectly arising out of or in any way relating to any one or more of the following:

(i)the Loan, the Loan Documents or the Loan Application, or the ownership of the Note, any of the other Loan Documents or any interest therein or receipt of any Gross Revenue or arising in respect of the Accounts;

(ii)any untrue statement of any material fact contained in any information concerning any Borrower, any Guarantor, any Borrower Control Person, any Property, the other Collateral or the Loan prepared or approved in writing by such Borrower, such Guarantor or such Borrower Control Person, or the omission to state therein a material fact required to be stated in such information or necessary in order to make the statements in such information or in light of the circumstances under which it/he (as applicable) were made not misleading;

(iii)any and all lawful action that may be taken and is taken by Lender, consistent with the terms hereof, in connection with the enforcement of the provisions of this Agreement, the Note or any of the other Loan Documents, whether or not suit is filed in connection with same, or in connection with any Borrower Control Person or any Affiliate of any Borrower Control Person becoming a party to a voluntary or involuntary federal or state bankruptcy, insolvency or similar proceeding;

(iv)any accident, injury to or death of persons or loss of or damage to property occurring in, on or about any Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (v)any use or nonuse of or condition in, on or about any Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;

(vi)any failure on the part of Borrowers to perform or be in compliance with any of the terms of this Agreement or any of the other Loan Documents;

(vii)performance of any labor or services or the furnishing of any materials or other property in respect of any Property or any part thereof pursuant to provisions of this Agreement;

(viii)the failure of any Borrowers to file timely with the Internal Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may be required in connection with this Agreement;

(ix)any failure of any Property to be in compliance with any Legal Requirement or Insurance Requirement;

(x)the enforcement by any Indemnified Party of the provisions of this Section 5.1.4; and

(xi)any and all claims and demands whatsoever that may be asserted against Lender by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained in any Lease.

Any amounts payable to an Indemnified Party by reason of the application of this Section 5.1.4(A) shall become due and payable ten (10) days after written demand and shall bear interest at the Default Rate from the earlier of (i) the date any such that any such amount was paid by Lender, and (ii) the tenth (10th) day after demand until paid, and shall constitute part of the Secured Obligations.

B.Borrowers shall, at their sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses imposed upon or incurred by or asserted against any of the Indemnified Parties and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of this Agreement, the Note, the Mortgages or any of the other Loan Documents (but excluding gross receipts, income, franchise and capital stock taxes). Borrowers shall, at their sole cost and expense, reimburse the Indemnified Parties from and against any and all Losses imposed upon or incurred by or asserted against any of the Indemnified Parties and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of this Agreement, the Note, the Mortgage or any of the other Loan Documents (but excluding gross receipts, income, franchise and capital stock taxes).

C.Borrowers shall, at their sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses (including, without limitation, excise taxes, reasonable attorneys’ fees and costs incurred in the investigation, defense, and settlement of Losses incurred in correcting any prohibited transaction or in the sale of a prohibited loan, and in obtaining any individual prohibited transaction exemption under ERISA that may be required, in Lender’s reasonable discretion) that the Indemnified Parties may

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document incur, directly or indirectly, as a result of a default under the covenants of Borrower with respect to ERISA and employee benefits plans contained herein, including, without limitation, the breach by any Borrower of any representation or warranty set forth in Section 4.1.18 or the breach by any Borrower of any covenant contained in Section 5.1.15, Section 6.1.16 and/or Section 6.1.17. Borrowers shall, at their sole cost and expense, reimburse the Indemnified Parties from and against any and all Losses (including, without limitation, reasonable attorneys’ fees and costs incurred in the investigation, defense, and settlement of Losses incurred in correcting any prohibited transaction or in the sale of a prohibited loan, and in obtaining any individual prohibited transaction exemption under ERISA that may be required, in Lender’s reasonable discretion) that the Indemnified Parties may incur, directly or indirectly, as a result of a default under the covenants of Borrower with respect to ERISA and employee benefits plans contained herein, including, without limitation, the breach by any Borrower of any representation or warranty set forth in Section 4.1.18 or the breach by any Borrower of any covenant contained in Section 5.1.15, Section 6.1.16 and/or Section 6.1.17.

D.Borrowers shall, at their sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses (including, without limitation, reasonable attorneys’ fees and costs incurred) that the Indemnified Parties may incur, directly or indirectly, as a result of a default under Borrowers’ covenants with respect to any Property. Borrowers shall, at their sole cost and expense reimburse the Indemnified Parties from and against any and all Losses (including, without limitation, reasonable attorneys’ fees and costs incurred) that the Indemnified Parties may incur, directly or indirectly, as a result of a default under Borrowers’ covenants with respect to any Property.

E.Promptly after receipt by an Indemnified Party under this Section 5.1.4 of notice of the making of any claim or the commencement of any action, such Indemnified Party shall, if a claim in respect thereof is to be made by such Indemnified Party against Borrowers under this Section 5.1.4, notify Borrowers in writing, but the omission to so notify Borrowers shall not relieve Borrowers from any liability that Borrowers may have to any Indemnified Party under this Section 5.1.4 or otherwise unless and to the extent that Borrowers did not otherwise possess knowledge of such claim or action and such failure resulted in the forfeiture by Borrowers of substantial rights and defenses or a substantial increase in its obligations hereunder. In case any such claim is made or action is brought against any Indemnified Party and such Indemnified Party seeks or intends to seek indemnity from Borrowers, Borrowers shall be entitled to participate in, and, to the extent that Borrowers may wish, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party; and, upon receipt of notice from Borrowers to such Indemnified Party of Borrowers’ election so to assume the defense of such claim or action and only upon approval by the Indemnified Party of such counsel (such approval not to be unreasonably withheld, conditioned or delayed), Borrowers shall not be liable to such Indemnified Party under this Section 5.1.4 for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof. Notwithstanding the preceding sentence, each Indemnified Party shall be entitled to employ counsel separate from such counsel for Borrowers and from any other party in such action if such Indemnified Party reasonably determines that a conflict of interest exists which makes representation by counsel chosen by Borrowers not advisable. In such event, but only in such event, Borrowers shall pay the reasonable fees and disbursements of such separate counsel, subject to reimbursement of such costs if the Indemnified Party requiring such separate counsel is found not to be entitled to the indemnity

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document protection of this Section 5.1.4. Borrowers shall not, without the prior written consent of an Indemnified Party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification is sought hereunder (whether or not such Indemnified Party is an actual or potential party to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each Indemnified Party from all liability arising out of such claim, action, suit or proceeding. No Indemnified Party shall enter into a settlement of or consent to the entry of any judgment with respect to any action, claim, suit or proceeding as to which an Indemnified Party would be entitled to indemnification hereunder without the prior written consent of Borrowers. Any amounts payable to an Indemnified Party by reason of the application of this Section 5.1.4(E) shall become due and payable ten (10) days after Borrower’s receipt of written demand and shall bear interest at the Default Rate from (i) the earlier of the date any such amount was paid by Lender and (ii) the tenth (10th) day after Borrowers’ receipt of such written demand until paid, and shall constitute part of the Secured Obligations.

F.Borrowers hereby (a) waive any claim that Borrowers may have against any of the Indemnified Parties based upon any assertion that any such Indemnified Party has acted unreasonably or that any such Indemnified Party has unreasonably withheld or unreasonably delayed any action, in each case, to the extent that such Indemnified Party had an obligation, either at law or pursuant to the Loan Documents, to act reasonably and (b) agrees that the sole remedy of Borrowers based upon any such claim against any of the Indemnified Parties shall be an action for specific performance, injunctive relief or declaratory judgment. Borrower hereby further agrees that the Indemnified Parties shall not be liable for any monetary damages (including, without limitation, compensatory, consequential or punitive damages) in respect of any such claim by Borrower and that Borrowers’ sole remedy in respect of any such claim shall be limited to specific performance, injunctive relief or declaratory judgment.

G.The provisions of and undertakings and indemnification set forth in this Section 5.1.4 shall survive the satisfaction and payment of the Secured Obligations and termination of this Agreement.

5.1.5 Access to Property. Borrowers shall permit Lender, and representatives and employees of Lender to inspect each Property or any part thereof at such reasonable times as may be requested by Lender upon reasonable advance written notice and subject to the rights of tenants. At any reasonable time, and from time to time, upon prior notice from Lender, Borrowers shall permit Lender, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit and inspect the Properties and the Chattels and to discuss with Borrowers the affairs, finances and accounts of Borrowers. Borrowers shall take all actions necessary or required under the Leases to effect such right of Lender to inspect the Properties.

5.1.6 Notice of Default. Borrowers shall promptly advise Lender in writing of (i) any change in the condition, financial or otherwise of any Borrower Control Person that is reasonably likely to have a Material Adverse Effect or (ii) the occurrence of any Event of Default.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 5.1.7 Cooperate in Legal Proceedings. Borrowers shall cooperate with Lender with respect to any proceedings before any Governmental Authority that are reasonably likely to in any way materially affect the rights of Lender hereunder or any rights obtained by Lender under any of the Loan Documents and, in connection therewith, shall not prohibit Lender, at its election, from participating in any such proceedings.

5.1.8 Perform Loan Documents. Borrowers shall promptly and strictly perform and comply with all other covenants, conditions and prohibitions required to be observed, performed or satisfied by Borrowers (or any of them) pursuant to and in accordance with the terms and provisions set forth in the Loan Documents, and shall pay when due all costs, fees and expenses required to be paid by it, under the Loan Documents.

5.1.9 Future Loan Modification. If, after the date of this Agreement, Lender elects to modify, split and/or sever of any portion of the Loan as described in this Section (the “Loan Modification”), Borrowers shall cooperate, and cause Guarantor and the Borrower Control Persons to cooperate, with Lender (at Lender’s sole cost and expense, other than Borrowers’ legal fees in connection with review of any Loan Modification documents) to effectuate such Loan Modification and shall execute, acknowledge and deliver such documents as Lender may reasonably request to evidence the Loan Modification. Upon the election of Lender at any time, Lender may (a) cause this Agreement, the Note and the Mortgages to be split into a first and second mortgage loan, (b) create one or more senior and subordinate notes (i.e., an A/B or A/B/C structure), (c) create multiple components of the Note or notes, and allocate or reallocate the principal balance of the Loan among such components, or (d) otherwise sever the Loan into two or more loans secured by mortgages and by a pledge of the direct or indirect partnership or membership interests of Borrowers (i.e., a senior loan/mezzanine loan structure), in each such case, in whatever proportion and whatever priority Lender determines; provided, however, that, in each such instance, immediately after the effective date of such Loan Modification (i) the outstanding principal balance of the Note or notes evidencing the Loan (or components of such notes) equals the outstanding principal balance of the Loan immediately prior to the Loan Modification, (ii) the weighted average of the interest rates for the Note or notes evidencing the Loan (or components of such notes) equals the interest rate of the Note immediately prior to the Loan Modification, (iii) there shall be no change to any other economic term of the Loan or to the rights, remedies or obligations of any Borrower or any Guarantor; and (vi) the ownership structure of Borrower may be revised to effectuate a mezzanine loan structure under the Loan Documents provided that the beneficial ownership of Borrower remains unchanged.

5.1.10 Further Assurances. Borrowers shall, at Borrowers’ sole cost and expense:

A.Upon the reasonable request of Lender therefor given from time to time pay for (i) reports of UCC, tax lien, judgment and litigation searches with respect to any Borrower Control Person, and (ii) searches of title to each Property and the other Collateral, each such search to be conducted by search firms designated by Lender in each of the locations designated by Lender;

B.Furnish to Lender all instruments, documents, certificates, title and other insurance reports and agreements, and each and every other document, certificate, agreement and

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document instrument required to be furnished pursuant to the terms of the Loan Documents or reasonably necessary to evidence, preserve and/or protect the Collateral at any time securing or intended to secure the Note;

C.Execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary, to evidence, preserve and/or protect the Collateral at any time securing or intended to secure the Note, as Lender may reasonably require (including, without limitation, any amendment or replacement to any of the Mortgages, UCC financing statements or Security Documents); and

D.Do and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying out of the intents and purposes of this Agreement and the other Loan Documents, as Lender shall reasonably require from time to time.

5.1.11 Management of Property. Borrowers shall provide competent, responsible management for each Property. All management agreements must contain termination provisions and must be otherwise reasonably satisfactory to Lender. Borrowers shall not enter into any management agreement or arrangement with any Person with respect to the management of each Property without Lender’s prior written consent both as to such management agreement or arrangement and such Person. Borrowers shall cause management subordination agreements in form and substance reasonably acceptable to Lender to be executed by any such manager simultaneously with the execution and delivery of each such management agreement. Borrowers shall not modify, or amend or terminate any approved management agreement without Lender’s prior written consent. Borrowers shall provide Lender with a copy of any written notice received by Borrowers from such manager of the occurrence of any default or event of default or condition that with the giving of notice or passage of time, or both, would constitute an event of default under any management agreement or that would entitle the manager thereunder to terminate the management agreement. Such management agreement shall be terminated by Borrowers, at Lender’s reasonable request, upon not less than thirty (30) days’ prior notice to Borrowers during an Event of Default. If any such management agreement is terminated pursuant hereto, Borrowers shall promptly seek to appoint a replacement manager reasonably acceptable to Lender pursuant to a replacement management agreement acceptable to Lender, and Borrowers’ failure to appoint a replacement manager, or to enter into such replacement management agreement within thirty (30) days after Lender’s request shall constitute an immediate Event of Default. All leasing brokerage agreements must be with leasing brokers and contain subordination and termination provisions and must be otherwise reasonably satisfactory, both as to such leasing brokerage agreement and such leasing broker, to Lender and Borrowers shall cause each leasing broker to enter into a subordination agreement in form and substance reasonably acceptable to Lender simultaneously with the execution and delivery of such leasing brokerage agreement. Borrowers shall provide Lender with a copy of any written notice received by Borrowers from such leasing broker of the occurrence of any default or event of default or condition that with the giving of notice or passage of time, or both, would constitute an event of default under any leasing brokerage agreement or that would entitle the leasing broker to terminate its agreement. Such agreement shall be terminated by Borrowers, at Lender’s reasonable request, upon not less than thirty (30) days’ prior notice to Borrowers during an Event of Default. If any such leasing brokerage agreement

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document is terminated pursuant hereto, Borrowers shall promptly seek to appoint a replacement broker reasonably acceptable to Lender, pursuant to a replacement leasing brokerage agreement, reasonably acceptable to Lender, and Borrowers’ failure to appoint such a replacement leasing broker or to enter into such replacement leasing brokerage agreement, within thirty (30) days after Lender’s request shall constitute an immediate Event of Default.

5.1.12 Financial Reporting.

A.Each Borrower shall furnish to Lender (i) within forty-five (45) days following the end of each calendar quarter of each Fiscal Year and within ninety (90) days following each Fiscal Year of such Borrower, quarterly and annual operating statements of such Borrower as of the end of and for the preceding quarter and such Fiscal Year, in each case (1) prepared in accordance with GAAP, consistently applied; and (2) reflecting conformity with (and deviations from) the budget for such preceding quarter and such Fiscal Year, as may be applicable; (ii) contemporaneously with the delivery of the quarterly and annual operating statements of each Property, a rent roll certified, signed and dated by Borrowers detailing the names of all tenants under the Leases, the portion of the Improvements on any Property occupied by each tenant, the Gross Revenue and any other charges payable under each Lease and the term of each Lease; and (iii) contemporaneously, with the delivery of the annual operating statements of each Property, the annual balance sheet and profit and loss statement of such Borrower, in each case, prepared in accordance with GAAP, consistently applied. Lender may require that any or all of the quarterly statements required to be delivered pursuant to this Section 5.1.12(A) be prepared on a monthly basis (with, where applicable, comparisons against the budget for such month) and submitted within ten (10) days after month end at any time (i) a Default or an Event of Default has occurred and is continuing, (ii) the Loan (or a portion thereof) has been securitized or (iii) to comply with regulatory, audit or other requirements to which Lender is subject.

B.The financial statements and reports described in Section 5.1.12(A) above shall be in such detail as Lender may reasonably require and shall be certified as true, complete and correct by the applicable Borrower or if required by Lender, (i) during the existence of any Default or Event of Default or (ii) in order to comply with any regulatory audit or other requirements to which Lender is subject, by an independent certified public accountant reasonably acceptable to Lender. Following during the existence of any Default or Event of Default, each Borrower shall deliver to Lender the items required in Section 5.1.12(A) above on a monthly basis.

C.Each Borrower shall furnish to Lender, within fifteen (15) Business Days after request, such further information regarding any Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA as may be reasonably requested by Lender in writing, in respect to such Borrower or the Managing Member.

D.At least thirty (30) days following the end of each Fiscal Year of the Borrowers, each Borrower shall submit or cause to be submitted to Lender, an Operating Budget for Property Expenses for the next Fiscal Year for each Property. Each Operating Budget shall be subject to the approval of Lender.

E.To the extent required under applicable law, each Borrower shall file and pay its annual tax returns and taxes in a timely manner. Each Borrower shall furnish to Lender,

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document within ten (10) days following the filing thereof, copies of any income tax returns filed with the Internal Revenue Service and any state income tax returns for the state in which each Property is located and for the state of such Borrower’s formation. Borrowers shall cause such Guarantor to provide Lender with copies of Guarantor’s federal and state tax returns within ten (10) days after their filing.

F.Borrowers shall furnish, or cause to be furnished, to Lender annually, within ninety (90) days following the end of each Fiscal Year, a complete copy of the consolidated financial statements of Guarantor prepared in accordance with GAAP, consistently applied and covering the financial position and results of operations of Guarantor, for such Fiscal Year and containing a statement of revenues and expenses, a statement of assets and liabilities and a statement of equity of Guarantor. Together with each annual financial statements of Guarantor, Borrowers shall furnish to Lender a certificate of an officer of Guarantor certifying as of the date thereof (x) that the annual financial statements present fairly in all material respects the results of operations and financial condition of Guarantor all in accordance GAAP, consistently applied, and (y) whether there exists an Event of Default or Default, and if such Event of Default or Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy same.

G.Borrowers shall furnish, or cause to be furnished, to Lender, within forty-five (45) days after the end of each calendar quarter, financial statements, a balance sheet and a profit and loss statement for Guarantor for such calendar quarter, and within ninety (90) days after the end of the calendar year, Guarantor’s annual financial statements, balance sheet and profit and loss statement. The financial statements and reports of Guarantor described above shall be in substantially the same form and detail as the financial statements and reports delivered by Guarantor to Lender in respect of the Loan prior to the Closing Date and shall be certified as true and correct by the applicable Guarantor or if (i) a Default or an Event of Default exists, or (ii) Lender determines that it is necessary in order to comply with any regulatory, audit or other requirements to which Lender may be subject, by an independent certified public accountant reasonably acceptable to Lender).

H.Borrowers shall furnish to Lender, within fifteen (15) Business Days after request, such further information with respect to the operation of the Properties (or any of them) and the financial affairs of any Borrower Control Person as may be reasonably requested by Lender, including all business plans prepared for the Borrowers.

I.Borrowers shall also promptly furnish or cause to be furnished to Lender, any other financial reports or statements of Borrowers and Guarantor, including, without limitation, balance sheets, profit and loss statements, tax returns, other financial statements, and certified rent rolls, required under any of the Loan Documents, requested by any regulatory or governmental authority exercising jurisdiction over Lender, or requested by Lender from time to time, certified as true, correct and complete by Borrowers and Guarantor.

5.1.13 Operation of Property. Borrowers shall cause the use and operation of each Property to be conducted at all times in a manner consistent with general industrial, commercial and light manufacturing uses (in each case consistent with the permitted use of each Property as of the Closing Date), with the appropriate ancillary uses and amenities and

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document for no other purpose, continuously and without interruption, including, without limitation, the following:

A.to maintain or cause to be maintained the standard of each Property at all times at its historic level of quality and finish (and at a level not lower than that maintained by prudent managers of similar facilities in the geographic region where each Property is located);

B.to operate or cause to be operated each Property in a prudent manner in compliance with applicable Legal Requirements and Insurance Requirements relating thereto and maintain or cause to be maintained all licenses, Permits and any other agreements necessary for the continued use and operation of each Property;

C.in any event to use and operate each Property solely for the operation of retail, transportation and industrial use (in each case consistent with the use of each Property as of the Closing Date), and other appropriate ancillary uses and amenities and for no other purpose; and

D.to comply at all times with the Operations and Maintenance Plan for the Cozine Property (as such terms are defined on Schedule 1.1(2) attached hereto), dated as of December 18, 2017, prepared by prepared by EBI Consulting with Project No. 1117006920 for the benefit of Lender.

5.1.14 Single-Purpose Entity. In no event shall any Borrower, whether directly or indirectly, acquire any property or asset other than the Property nor commence any income generating activity not contemplated to be conducted by such Borrower as set forth in this Agreement until all Secured Obligations have been indefeasibly paid in full. Without limiting the preceding provisions of this Section 5.1.14, each Borrower shall at all times until the Secured Obligations have been indefeasibly paid in full, be a Person, other than an individual, that (a) is formed or organized solely for the purpose of holding, directly, an ownership interest in the applicable Property, or any portion thereof, (b) does not engage in any business other than the ownership, management and operation of the applicable Property or any portion thereof, (c) does not have any (i) assets other than those related to its interest in the applicable Property or any portion thereof or (ii) Indebtedness (except for the Loan and the Permitted Debt), (d) does not guarantee or otherwise become liable on or in connection with any obligation of any other Person, (e) does not enter into any contract or agreement with any stockholder, partner, principal, member or Affiliate of such Person or any Affiliate of any such stockholder, partner, principal, member or Affiliate except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s length basis with third parties other than an Affiliate, (f) does not incur, create or assume any Indebtedness (except for the Loan and Permitted Debt), (g) does not make any loans or advances to any other Person (including, without limitation, any Affiliate), (h) does not become insolvent or fail to pay its debts from its assets as the same shall become due, provided, however, that nothing in this clause (h) shall require any owner or principal of any Borrower or any other Person to make any capital contribution or other contribution of cash or assets to such Borrower (i) does not fail to conduct and operate its business in all material respects as previously conducted and operated, (j) does not fail to pay its debts from its assets as the same shall become due, (k) does not fail to maintain its books and records and bank

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document accounts separately from those of its Affiliates (other than the other Borrowers), including, without limitation, its general partners or members, as may be applicable, (l) does not fail at all times to hold itself out to the public as a legal entity separate and apart from any other Person (including, without limitation, any Affiliate (including, without limitation, any stockholder, partner, member, trustee, beneficiary, or other owner of such Borrower or any Affiliate of any such stockholder, partner, member, trustee, beneficiary, or other owner)), (m) does not fail to file its own tax returns to the extent that it is legally required to do so; (n) does not fail to maintain adequate capital for its normal obligations, reasonably foreseeable in a business of its size and character and in light of its contemplated business operations, (o) does not fail to maintain its assets in such a manner that it is not costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate (other than the other Borrowers) or any other Person, (p) does not hold itself out to be responsible for the Indebtedness (other than the with respect to each Borrower’s obligations under the Loan Documents) of any other Person, (q) is subject to and complies with all of the limitations on powers set forth in the organizational documentation (and if a partnership, that of each general partner, and if a limited liability company, that of the managing member (or if there is no managing member, the members)) as in effect on the date hereof, (r) other than with respect to the Deposit Account or the Excess Cash Subaccount as set forth in the Cash Collateral Agreement, holds all of its assets in its own name and does not commingle its assets with the assets of any other Person (other than the other Borrowers), (s) utilizes its own letterhead, invoices and checks, (t) holds title to its interest in the applicable Property in its own name, (u) allocates fairly and reasonably any overhead expenses that are shared with any Affiliate including, without limitation, paying for office space and services performed by any employee of any Affiliate, (v) does not pledge its assets for the benefit of any other Person other than pursuant to the Loan Documents as security for the Loan, and (w) corrects any known misunderstandings regarding its separate identity.

5.1.15 ERISA. Borrowers shall not at any time have any direct employees and shall not participate in any Plan or Multiemployer Plan. Without limiting the immediately preceding sentence, Borrowers shall deliver to Lender as soon as possible, and in any event within ten (10) days after any Borrower knows or has reason to believe that any of the events or conditions specified below with respect to any Plan, Welfare Plan or Multiemployer Plan has occurred or exists, an Officer’s Certificate setting forth details respecting such event or condition and the action, if any, that Borrowers or any ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed with or given to PBGC by any Borrower or an ERISA Affiliate with respect to such event or condition):

A.any reportable event, as defined in Section 4043(b) of ERISA and the regulations issued thereunder, with respect to a Plan, as to which PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event (provided that a failure to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Code or Section 302(e) of ERISA, shall be a reportable event regardless of the issuance of any waivers in accordance with Section 412(d) of the Code); and any request for a waiver under Section 412(d) of the Code for any Plan;

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document B.the distribution under Section 4041(c) of ERISA of a notice of intent to terminate any Plan or any action taken by any Borrower or an ERISA Affiliate to terminate any Plan;

C.the institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by any Borrower or any ERISA Affiliate of any Borrower of a notice from a Multiemployer Plan that such action has been taken by PBGC with respect to such Multiemployer Plan;

D.the complete or partial withdrawal from a Multiemployer Plan by any Borrower or any ERISA Affiliate of any Borrower that results in material liability under Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default) or the receipt by any Borrower, any Guarantor or any ERISA Affiliate of any Borrower or any Guarantor of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA;

E.the institution of a proceeding by a fiduciary of any Multiemployer Plan against any Borrower or any ERISA Affiliate of any Borrower to enforce Section 515 of ERISA, which proceeding is not dismissed within thirty (30) days;

F.the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of tax-exempt status of the trust of which such Plan is a part if Borrower or an ERISA Affiliate of any Borrower fails to timely provide security to the Plan in accordance with the provisions of said Sections;

G.the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could result in a Material Adverse Effect; and

H.the imposition of a lien or a security interest in connection with a Plan.

5.1.16 Property and Related Insurance.

A.Coverages Required. Borrowers shall maintain or cause to be maintained, with financially sound and reputable insurance companies or associations satisfactory to Lender, all insurance required under the terms of the Insurance Agreement, and shall comply with each and every covenant and agreement contained in such Insurance Agreement pursuant to and in accordance with the terms and provisions of the Insurance Agreement. Borrowers shall provide Lender with reasonably satisfactory evidence of the payment of the premiums of all such insurance within five (5) Business Days following any such payment.

B.Renewal Policies. Not less than thirty (30) days prior to the expiration date of each insurance policy required pursuant to the Insurance Agreement, Borrowers shall deliver to Lender either an appropriate renewal policy or replacement policy (or a certified copy thereof) that in each case satisfies the requirements of the Insurance Agreement.

C.Deposit for Premiums. On the Closing Date, Borrowers shall deposit with Lender an amount equal to 1/12th of the amount that Lender estimates will be required to make

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the next annual payments of the premiums for the policies of insurance referred to in this Section, multiplied by the number of whole and partial months which have elapsed since the date one month prior to the most recent policy anniversary date for each such policy. On each Payment Date thereafter, Borrowers shall deposit an amount equal to 1/12th of the amount that Lender estimates will be required to pay the next required annual premium for each insurance policy referred to in this Section. The purpose of these provisions is to provide Lender with sufficient funds on hand to pay all such premiums thirty (30) days before the date on which they become past due. If Lender, in its reasonable discretion, determines that the funds escrowed hereunder are, or will be, insufficient, Borrowers shall, within ten (10) days following Borrowers’ receipt of written demand, pay such additional sums as Lender shall determine necessary and shall pay any increased monthly charges as so requested by Lender. Provided that no Event of Default exists and is then continuing, Lender shall apply the amounts so deposited to the payment of such insurance premiums when due, but in no event will Lender be liable for any interest on any amounts so deposited, and the money so received may be held and commingled with Lender’s own funds. If an Event of Default exists, Lender may apply such funds to the payment of such insurance premiums, to the payment of any of the Secured Obligations in such order as Lender shall elect in its sole discretion or may retain the same as Security for the Secured Obligations, in its sole discretion.

D.Application of Hazard Insurance Proceeds. Borrowers shall after learning thereof promptly notify Lender of any damage or casualty to all or any portion of any Property or Chattels. Lender may participate in all negotiations and appear and participate in all judicial or arbitration proceedings concerning any insurance proceeds that may be payable as a result of such casualty or damage, and may, in Lender’s sole discretion, compromise or settle, in the names of both Borrowers and Lender, any claim for any such insurance proceeds; provided, however, that in any event any such compromise or settlement shall be subject to the prior consent of Lender, which may be granted or withheld in Lender’s discretion. Any such insurance proceeds shall be paid directly to Lender and shall be applied first to reimburse Lender for all out-of-pocket costs and expenses, including, without limitation, reasonable attorneys’ fees, incurred by Lender in connection with the ascertainment and collection of such insurance proceeds. The balance, if any, of any insurance proceeds received by Lender with respect to an insured damage or casualty shall be, in Lender’s sole discretion, either (i) retained and applied by Lender first toward payment of the Secured Obligations in such order and manner as Lender deems appropriate, or (ii) paid over, in whole or in part and subject to such conditions as Lender may impose, to Borrowers to pay for repairs or replacements necessitated by the damage or casualty. In the event that all of the Secured Obligations have been performed or are discharged by the application of less than all of such insurance proceeds, then, any remaining proceeds shall be paid over to Borrowers. Notwithstanding the foregoing provisions of this Section 5.1.16(D), Lender shall pay over to Borrowers any such insurance proceeds as provided in clause (ii) of the immediately preceding sentence, provided that, and on the following conditions: (A) there does not exist any Default or Event of Default, (B) Borrowers demonstrate to the reasonable satisfaction of Lender that Borrowers have the financial ability to pay all principal and interest and any other amounts required to be paid under this Agreement and the Note, and perform all of the other Secured Obligations, during the restoration of the applicable Property from Gross Revenue (including, without limitation, proceeds of rent loss or business interruption insurance) or otherwise, (C) the damage or casualty occurs prior to the date that is six (6) months prior to the Loan Maturity Date and the restoration is capable of being completed prior to the Loan Maturity Date, (D) all insurance proceeds and other funds provided by Borrowers for such restoration are released under reserve

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and construction funding arrangements reasonably satisfactory to Lender, (E) the repair or restoration will return the applicable Property to substantially the same size, design and utility as existed immediately prior to the damage or casualty, (F) in the event the proceeds of insurance are insufficient to pay for the restoration (as reasonably determined by Lender), Borrowers shall, prior to the commencement of any restoration work, deposit with Lender not later than the date that is fifteen (15) days following the date that Borrowers receive written notification from Lender of such deficiency, such additional funds as are necessary to complete the restoration as reasonably determined by Lender; (G) Borrowers undertake and covenant and agree (in writing) with Lender to fund any and all deficiencies, and in fact actually fund any and all such deficiencies, not later than the date that is fifteen (15) days following the date that the proceeds of insurance are received by Lender and prior to the distribution of any further insurance proceeds, such that at all times the funds held by Lender and remaining to be disbursed for purposes of the restoration shall be sufficient to complete the restoration; (H) the annual Gross Revenue that will survive the restoration or repair of the applicable Property produces a Debt Service Coverage Ratio of not less than 1.20 to 1.0 and Borrowers demonstrate to Lender’s satisfaction that Borrowers shall be able to attain a Debt Service Coverage Ratio of at least 1.20 to 1.0 from Gross Revenue within six (6) months following completion of the restoration; and (I) if any site plan amendment, variance, special use permit or other similar special approval or consent is required from any government authority or any other Person for such repair or restoration, Borrowers shall obtain and deliver to Lender such site plan amendment, variance, special use permit or other similar special approval or consent not later than the date that is one hundred eighty (180) days following the date of such casualty or damage (provided, however, that such one hundred eighty (180) day time period shall in all respects be subject to the foregoing provisions of this Section 5.1.16(D) and shall not extend or otherwise modify any time periods in such foregoing provisions).

Notwithstanding the foregoing provisions of this Section 5.1.16(D), in the event that the insurance proceeds do not exceed $250,000.00 (the “Threshold Amount”), then such insurance proceeds received by Borrowers with respect to the applicable damage or casualty shall be paid over, in whole or in part and subject to such conditions as Lender may impose, to Borrowers to pay for repairs or replacements necessitated by the damage or casualty (provided, however, that if all of the Secured Obligations have been performed or are discharged by the application of less than all of such insurance proceeds, then any remaining proceeds will be paid over to Borrowers) if (i) no Default or Event of Default then exists, and (ii) the proceeds received by Lender (together with any other funds delivered by Borrowers to Lender for such purpose) shall be sufficient, in Lender’s reasonable judgment, to pay for any restoration necessitated by the casualty, and (iii) the cost of such restoration shall not exceed the Threshold Amount, and (iv) the damage or casualty occurs prior to the date that is six (6) months’ prior to the Loan Maturity Date and the restoration is capable of being completed, in Lender’s judgment, at least ninety (90) days prior to the Loan Maturity Date and (v) Borrowers shall undertake and complete the repair or restoration of the applicable Property so as to return such Property to substantially the same size, design and utility as existed immediately prior to the damage or casualty and shall fund any deficiency in the event such proceeds are insufficient to complete such repair or restoration.

Lender will have no obligation to see to the proper application of any insurance proceeds paid over to Borrowers, nor will any such proceeds received by Lender bear interest or be subject to any other charge for the benefit of Borrowers. If such insurance proceeds are deposited with

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Lender, Lender may, prior to the application of such proceeds, commingle them with Lender’s own funds and otherwise act with regard to such proceeds as Lender may determine.

E.Successor’s Rights. Any Person that acquires title to any Property or the Chattels upon foreclosure or deed in lieu of foreclosure hereunder will succeed to all of Borrowers’ rights under all policies of insurance maintained pursuant to this Section.

5.1.17 Eminent Domain; Private Damage. If all or any part of any Property is taken or damaged by eminent domain or any other public or private action, Borrowers shall notify Lender promptly of the time and place of all meetings, hearings, trials, and other proceedings relating to such action. Lender may participate in all negotiations and appear and participate in all judicial or arbitration proceedings concerning any award or payment that may be due as a result of such taking or damage, and may, in Lender’s sole but reasonable discretion, compromise or settle, in the names of both Borrowers and Lender, any claim for any such award or payment; provided, however, that in any event any such compromise or settlement shall be subject to the prior consent of Lender, which may be granted or withheld in Lender’s discretion. Any such award or payment shall be paid directly to Lender and shall be applied first to reimburse Lender for all out-of-pocket costs and expenses, including, without limitation, reasonable attorneys’ fees, incurred by Lender in connection with the ascertainment and collection of such award or payment. The balance, if any, of such award or payment received by Lender with respect to a condemnation shall be, in Lender’s sole discretion, either (i) retained and applied, without prepayment penalty or fee as set forth in Section 5(c) of the Note, by Lender toward payment of the Secured Obligations in such order and manner as Lender deems appropriate, or (ii) paid over, in whole or in part and subject to such conditions as Lender may impose, to Borrowers for the purpose of restoring, repairing, or rebuilding any part of the Property affected by the taking or damage. Notwithstanding the foregoing provisions of this Section 5.1.17, Lender shall pay over to Borrowers any such award or payment as provided in clause (ii) of the immediately preceding sentence, provided that, and on the following conditions: (A) there does not exist any Default or Event of Default, (B) Borrowers demonstrate to the reasonable satisfaction of Lender that Borrowers have the financial ability to pay all principal and interest required under this Agreement and the Note, and perform all of the other Secured Obligations, during the restoration of the applicable Property from Gross Revenue (including, without limitation, the proceeds of rent loss or business interruption insurance) or otherwise, (C) the damage occurs prior to the date that is six (6) months prior to the Loan Maturity Date and the restoration is capable of being completed prior to the Loan Maturity Date, (D) any condemnation award and other funds provided by Borrowers for such restoration are released under reserve and construction funding arrangements reasonably satisfactory to Lender, (E) the repair or restoration will return the applicable Property to substantially the same size, design and utility as existed immediately prior to the damage, (F) in the event the condemnation award is insufficient to pay for the restoration (as reasonably determined by Lender), Borrowers shall, prior to the commencement of any restoration work, deposit with Lender not later than the date that is fifteen (15) days following the date that the condemnation award is received by Lender, such additional funds as are necessary to complete the restoration as reasonably determined by Lender; (G) Borrowers undertake and covenant and agree (in writing) with Lender to fund any and all deficiencies, and in fact actually fund any and all such deficiencies, not later than the date that is fifteen (15) days following the date that Borrowers receive written notification

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document from Lender of such deficiency and prior to the distribution of any further portion of the condemnation award, such that at all times the funds held by Lender and remaining to be disbursed for purposes of the restoration shall be sufficient to complete the restoration; (H) the annual Gross Revenue that will survive the restoration or repair of the applicable Property produces a Debt Service Coverage Ratio of not less than 1.20 to 1.0 and Borrowers demonstrate to Lender’s satisfaction that Borrowers shall be able to attain a Debt Service Coverage Ratio of at least 1.20 to 1.0 from Gross Revenue within six (6) months after completion of the restoration; and (I) if any site plan amendment, variance, special use permit or other similar special approval or consent is required from any government authority or any other Person for such repair or restoration, Borrowers shall obtain and deliver to Lender such site plan amendment, variance, special use permit or other similar special approval or consent not later than the date that is one hundred eighty (180) days following the date of such taking or condemnation (provided, however, that such one hundred eighty (180) day time period shall in all respects be subject to the foregoing provisions of this Section 5.1.17 and shall not extend or otherwise modify any time periods in such foregoing provisions). If the applicable Mortgage has been foreclosed prior to Lender’s receipt of such award or payment, Lender may nonetheless retain such award or payment to the extent required to reimburse Lender for all out-of-pocket costs and expenses, including reasonable attorneys’ fees, incurred in connection therewith, and to discharge any deficiency remaining with respect to the Secured Obligations.

Notwithstanding the foregoing provisions of this Section 5.1.17, in the event that the award or payment does not exceed the Threshold Amount, then such award or payment received by Borrowers with respect to the applicable condemnation shall be paid over, in whole or in part and subject to such conditions as Lender may impose, to Borrowers for the purpose of restoring, repairing or rebuilding any part of the applicable Property affected by the taking or damage if (i) no Default or Event of Default then exists, and (ii) the award or payment received by Lender (together with any other funds delivered by Borrowers to Lender for such purpose) shall be sufficient, in Lender’s reasonable judgment, to pay for any restoration, repair or rebuilding necessitated by the condemnation, and (iii) the cost of such restoration, repair or rebuilding shall not exceed the Threshold Amount, and (iv) the condemnation occurs prior to the date that is six (6) months prior to the Loan Maturity Date and the restoration, repair or rebuilding is capable of being completed, in Lender’s judgment, at least ninety (90) days prior to the Loan Maturity Date, and (v) Borrowers shall undertake and complete the restoration, repair or rebuilding of any Property so as to return the applicable Property to substantially the same size, design and utility as existed immediately prior to the condemnation and shall fund any deficiency in the event such award is insufficient to complete such repair or restoration.

Lender will have no obligation to see to the proper application of any condemnation award paid over to Borrowers. If such condemnation award is deposited with Lender, Lender may, prior to the application of such award, commingle it with Lender’s own funds and otherwise act with regard to such proceeds as Lender may determine.

5.1.18 Leases.

A.Without Lender’s prior written consent, which may be granted or withheld in Lender’s sole discretion, Borrowers shall not enter into or modify, amend, supplement,

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document terminate or cancel any Lease of all or any part of any Property. Any submission by Borrowers for Lender’s consent to a Lease or modification, amendment, supplement, termination or cancellation thereof shall be accompanied by a copy of such Lease or modification, amendment, supplement, termination or cancellation, a then-current Rent Roll for the applicable Property, year-to-date and prior year operating statements for the applicable Property and a cover letter requesting Lender’s consent which contains a signature line on which Lender may evidence Lender’s consent to such Lease or modification, amendment, supplement, termination or cancellation (collectively, the “Lease Approval Deliveries”). Each Lease, and each modification, amendment, supplement, termination or cancellation of any Lease, shall be in writing. Notwithstanding anything to the contrary in the Loan Documents, Lender’s written consent will not be required prior to entering into any new Safe Harbor Lease or any modification, amendment, or supplement thereof after the Closing Date (so long as such Lease remains a Safe Harbor Lease after giving effect to any such modification, amendment or supplement), provided that no Event of Default exists and Borrowers deliver a copy of each such Safe Harbor Lease to Lender within ten (10) days after execution thereof together with Borrowers’ written certification that such copy is a true, correct and complete copy of such Safe Harbor Lease and that all of the conditions set forth in this sentence and in the definition of “Safe Harbor Lease” have been satisfied.

B.Lender agrees that for any proposed Lease that does not qualify as a Safe Harbor Lease, for which Borrower is required to obtain Lender’s consent thereto, Lender will attempt to respond within ten (10) Business Days, and Lender’s consent shall not be unreasonably withheld based upon market conditions. Borrower shall be permitted to submit a lease summary term sheet, for purposes of obtaining Lender’s approval, which sets out all of the economic terms of the proposed Lease, as well as any deviations from the Lease Form. Lender’s consent will be contingent on tenant signing the Lease Form. Lender will not be obligated to enter into any subordination, non-disturbance and attornment agreement (or similar agreement) for any tenant for which Borrower is requesting Lender lease approval until such time as an executed Lease that complies with the provisions of this Agreement is delivered to Lender. If Lender has failed to respond to the written request for consent of a proposed Lease after five (5) Business Days after its receipt thereof, together with any additional information that Lender may reasonably require to evaluate such proposed Lease, and Borrower has provided a subsequent five (5) Business Days written notice to Lender requesting consent, each notice marked with a legend in bold capital letters stating: LENDER SHALL BE DEEMED TO HAVE CONSENTED TO THE MATTER CONTAINED HEREIN IF IT FAILS TO RESPOND TO THIS REQUEST FOR CONSENT WITHIN 10/5 (as applicable) BUSINESS DAYS AFTER THE DATE HEREOF, then Lender shall be deemed to have consented to the same.

C.With respect to each Lease, Borrowers:

shall neither do, nor neglect to do, anything that may cause or permit the termination of such Lease, or cause or permit the withholding or abatement of any rent payable under any such Lease;

(i)shall observe and perform all of the obligations imposed upon Borrowers under such Lease and shall not do or permit to be done anything to impair the value of the Lease as security for the Secured Obligations;

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii)shall promptly send copies to Lender of all written notices of default that Borrowers shall send or receive under any Lease;

(iii)shall enforce all of the terms, covenants and conditions contained in the Lease upon the part of the lessee or any other party that is not Borrowers thereunder to be observed or performed and shall not effect a termination or diminution of the obligations of tenants under Lease;

(iv)shall not collect any rent under any Lease more than one (1) month in advance (other than security deposits);

(v)shall not execute any other assignment of Borrowers’ interest in the Leases or Revenue, except pursuant to the Security Documents;

(vi)shall not alter, modify or change the terms of any guaranty of the Leases or cancel or terminate such guaranty without the prior written consent of Lender; and

(vii)shall not consent to any assignment of or subletting under the Lease not in accordance with their terms, without the prior written consent of Lender.

D.Borrowers shall deposit security deposits of tenants under Leases that are turned over to or for the benefit of Borrowers or otherwise collected by or on behalf of Borrowers, into an Eligible Account and in compliance with applicable Legal Requirements and shall not commingle such funds with any other funds of Borrowers. Any bond or other instrument that Borrowers are permitted to hold in lieu of cash security deposits under any applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall, if permitted pursuant to all applicable Legal Requirements, name Lender as payee or mortgagee thereunder (or at Lender’s option, be fully assignable to Lender) and shall, in all respects, comply with any applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrowers shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrowers’ compliance with the foregoing. Upon the occurrence and during the continuance of any Event of Default, Borrowers shall, upon Lender’s written request, if permitted by any applicable Legal Requirements, turn over to Lender the security deposits (and, if required to be paid to any tenant pursuant to its Lease or applicable Legal Requirements, any interest theretofore earned thereon and not previously disbursed to such tenant) then held with respect to all or any portion of any Property, to be held by Lender subject to the terms of the Leases.

E.(i) Without limiting the generality of the foregoing, (a) Borrowers shall notify Lender in writing of any cancellation penalties, termination fees or other consideration payable to Borrowers in connection with any cancellation, termination or surrender of any Lease (any such penalties or fees are referred to herein as “Termination Fees”), which written notice shall be delivered to Lender not later than three (3) Business Days following receipt by Borrowers of written notice from the applicable tenant under such Lease of the intention of such tenant to cancel, terminate or surrender such Lease, but in any event prior to the payment by the applicable tenant under such Lease of any such Termination Fees to such Borrower and (b) Lender may, but shall not be required to, (i) require that such Borrowers deposits such Termination Fees into a reserve

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document held by Lender or Servicer pursuant to a tenant improvement and leasing commissions reserve agreement, which agreement shall be in form and substance reasonably satisfactory to Lender, and (ii) impose such restrictions and conditions on the timing and amount of disbursements of the Termination Fees from such reserve account as Lender may reasonably require, including, without limitation (x) requiring that (1) the space left vacant as a result of such cancellation, termination or surrender be relet to a tenant and under a Lease consented to by Lender unless such consent is either not required or deemed given in accordance with this Section 5.1.18 (any such Lease an “Approved Lease”), (2) the tenant under such Approved Lease is in occupancy of the portion of the Property demised pursuant to such Approved Lease and is paying rent in accordance with such Approved Lease, (3) Borrowers provide to Lender a tenant estoppel certificate from the tenant under such Approved Lease in a form and in substance reasonably acceptable to Lender, and (4) Borrowers provide to Lender written evidence reasonably acceptable to Lender that all improvements to the applicable Property required pursuant to such Approved Lease have been completed in accordance with such Approved Lease, and (y) limiting the amount of any such disbursement to the lesser of (1) the actual cost of re-tenanting such space and (2) the amount calculated by dividing the applicable Termination Fees by the total square feet of space vacated, then multiplying that result by the number of square feet of newly leased space under such Approved Lease.

(ii)Subject to Section 5.1.18(E)(iii) below, (a) in the event that following the date that any such Termination Fee is paid, as of the date of determination, the Debt Service Coverage Ratio is less than 1.0 to 1.0, then Lender may apply an amount equal to the excess of (x) any Termination Fees over (y) the amount of such Termination Fees disbursed to Borrowers pursuant to Section 5.1.18(E)(i) above (any such excess amount the “Excess Termination Fees”) to any regularly scheduled payment due and payable by Borrower under the Note, this Agreement, the Mortgages or the other Loan Documents (including, without limitation, any monthly payment of principal and/or interest and any regularly scheduled reserve deposits) in such order and in such manner as determined by Lender; (b) following the date that any such Termination Fee is paid, as of the date of determination, (x) the Debt Service Coverage Ratio equals or exceeds 1.0 to 1.0 and (y) at least eighty-five percent (85%) of the rentable square feet of space available at all of the Properties is occupied by Leases approved (or deemed approved) by Lender pursuant to this Agreement or the Safe-Harbor Leases, then Lender shall disburse any Excess Termination Fees to Borrowers.

(iii)If any Event of Default exists and is continuing, Lender may apply any Termination Fees to the Secured Obligations in such order and in such manner as determined by Lender in Lender’s sole discretion.

F.Borrowers shall provide Lender with a Rent Roll on an annual basis, certified by Borrowers to Lender as true, correct and complete. Without limiting the provisions of this Section 5.1.18, the Rent Roll shall include all Leases whether or not evidenced by written instruments.

5.1.19 Intentionally Omitted.

5.1.20Ownership and Organizational Structure. Except as otherwise permitted pursuant to Article 8, each Borrower shall maintain or shall cause to be maintained the ownership

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and organizational structure reflected on Exhibit A attached hereto at all times while the Secured Obligations are outstanding.

5.1.21Preservation of Existence and Properties, Scope of Business, Compliance with Law. Borrowers shall comply with all Legal Requirements, including, but not limited to, all applicable laws, rules, regulations and orders and other governmental or quasi-governmental requirements and private covenants, such compliance to include, without limitation, maintaining all Permits and paying before the same become delinquent all taxes, assessments and governmental charges imposed upon any Borrower or any Property. Borrowers shall maintain all Permits necessary for the operation, ownership, use, occupancy and maintenance of each Property for the then current use of each Property, and without limiting this covenant of Borrowers, Borrowers shall make application for renewals of any of the Permits prior to the expiration thereof. Borrowers shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect the existence of each Borrower Control Person as a limited liability company, corporation or other entity, as may be applicable, and to maintain the authorization of each Borrower Control Person to perform the obligations under the Loan Documents. No Borrower shall amend or modify, or permit any other Borrower Control Person to amend or modify, its organizational documents so as to contravene any of the Loan Documents or to prevent the observance of the obligations under the Loan Documents. Each Borrower shall comply, and cause each other Borrower Control Person to comply with all applicable laws, rules, regulations and orders and other governmental or quasi- governmental requirements, and each Borrower shall obtain, and cause each other Borrower Control Person to obtain, all authorizations, approvals and consents from, and shall make all notices and filings with, any court, governmental, authority or regulatory body, in respect of its right and ability to perform, or cause the performance of, the obligations under the Loan Documents. Each Borrower shall maintain, and cause Managing Member and Guarantor to maintain, its status as “non-foreign person” within the meaning of Sections 1445 and 7701 of the United States Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.

5.1.22 Economic Sanctions, Anti-Money Laundering, Etc.

Each Borrower represents, warrants and covenants to Lender that:

A.No Borrower, Guarantor, or any officer or director of any Borrower, is or shall become a Prohibited Person or is or shall become directly or indirectly owned or controlled by any Prohibited Person,

B.At all times throughout the Loan term, none of the funds of any Borrower, any Guarantor or any other party that are used to repay the Loan shall be derived from (i) conducting business or transacting with any Prohibited Person, or (ii) activities involving the violation of any Anti-Money Laundering Laws,

C.None of the proceeds of the Loan shall be used to facilitate any business, transactions, or other activity with any Prohibited Person or activities involving the violation of any Anti-Money Laundering Laws, and

D.Borrowers shall promptly deliver to Lender any certification or other evidence reasonably requested from time to time by Borrowers confirming Borrowers’ compliance

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document with this Section. The representations, warranties and covenants set forth in this Section shall be deemed repeated and reaffirmed by Borrowers as of each date that Borrowers make a payment to Lender under the Note, this Agreement and the other Loan Documents or receives any payment from Lender. Borrowers shall promptly notify Lender in writing should Borrowers becomes aware of any change in the information set forth in these representations, warranties and covenants.

E.Notwithstanding the foregoing, with respect to any direct or indirect constituent of any Borrower or any Guarantor that is not a U.S. Person, such non-U.S. Person shall not be required to comply with any of the provisions in this Section 5.1.22 if doing so would constitute a violation of the domiciliary law applicable to such non-U.S. Person.

5.1.23 Intentionally Omitted.

5.1.24 Guarantor. Within thirty (30) days after the death of any individual Guarantor, Borrowers shall notify Lender in writing of such death and provide to Lender the names and current financial statements of one or more substitute guarantors reasonably acceptable to Lender: (A) whose Net Worth and financial condition is, in Lender’s discretion, equivalent to or better than the deceased Guarantor based upon the financial statements and other financial information delivered to Lender in respect of the individual that is the Guarantor immediately prior to such replacement, or (B) who are the heirs, devisees and beneficiaries of substantially all of the deceased Guarantor’s assets, provided, however, that, in each case, such replacement guarantor shall (together with any other remaining Guarantor) satisfy the Guarantor Minimum Net Worth Requirement. Within sixty (60) days after the death of such individual Guarantor, each substitute guarantor(s) shall (i) deliver to Lender the financial reports and statements required to be delivered by Guarantor in Section 4.12 of the Mortgage and Section 5.1.12 of this Agreement, and (ii) execute and deliver to Lender a guaranty agreement and an environmental indemnity agreement in substantially the same form as the Guaranty and the Environmental Indemnity Agreement and such other instruments as Lender may reasonably require in connection with such substitution.

5.1.25 Minimum Net Worth and Available Liquidity of Guarantor. At all times until repayment in full of the Secured Obligations, Borrowers shall cause Guarantor to satisfy the Guarantor Minimum Net Worth Requirement and Guarantor Minimum Available Liquidity Requirement. Notwithstanding the foregoing, if at any time prior to the indefeasible payment in full of the Secured Obligations, the Guarantor fails to satisfy the Guarantor Minimum Available Liquidity Requirement, such failure may be cured by depositing with Lender or Servicer (as determined by Lender) not later than the date that is thirty (30) days following notice by Lender to Borrower and/or Guarantor or such failure cash or marketable securities acceptable to Lender in an amount equal to the excess of the amount of the Guarantor Minimum Available Liquidity over the Available Liquidity of Guarantor as of the date of determination, which amount shall be held by Lender as additional collateral for the repayment of the Loan and which amount shall be deemed to be part of the “Collateral” for the purposes of this Agreement and the other Loan Documents. During the existence of any Event of Default, Lender may apply such amounts held by Lender or Servicer pursuant to this Section 5.1.25 to the Secured Obligations in such order and manner as determined by Lender in its sole discretion.

5.1.27 Other Encumbrances. Borrowers shall promptly and strictly perform and comply with all covenants, conditions and prohibitions required of any Borrower in connection with any Access Agreement and any other encumbrance affecting any Property or any of the Chattels, the Intangible Personalty or the other Collateral, or any part thereof, or any interest therein, regardless of whether such other encumbrance is superior or subordinate to the lien hereof.

5.1.28 Maintenance and Repair of Property and Chattels; Contracts. Borrowers shall at all times maintain the Properties and the Chattels in good condition and repair, shall diligently prosecute the completion of any building or other improvement that is at any time in the process of construction on the Properties, and shall promptly repair, restore, replace, or rebuild any part of the Properties or the Chattels that may be affected by any casualty or any public or private taking or injury to the Properties or the Chattels. All costs and expenses arising out of the foregoing shall be paid by Borrowers whether or not the proceeds of any insurance or eminent domain shall be sufficient therefor. Borrowers shall maintain access to and egress from each Property by public streets. Borrowers shall comply with (or cause compliance with) all Legal Requirements, statutes, ordinances, and other governmental or quasi-governmental requirements and private covenants relating to the ownership, construction, maintenance, use, or operation of the Properties, including but not limited to, any zoning requirements, any environmental or ecological requirements, any requirements pursuant to and in accordance with any Access Agreements and any requirements regarding access for persons with disabilities. Lender and any Person authorized by Lender may upon prior notice to Borrowers enter and inspect any Property at all reasonable times, and may inspect the Chattels, wherever located, at all reasonable times. Borrowers shall take all actions necessary or required under the Leases to effect the provisions of the immediately preceding sentence. Borrowers shall maintain all public utility services (including, without limitation, water supply, storm and sanitary sewer facilities, and natural gas, electric, telephone, cable television and high speed Internet access facilities) necessary for the operation and maintenance of the Properties (including, without limitation, improvements constituting part of any Property) for its intended purposes, and, without limiting such maintenance requirement, shall maintain such services at the boundaries of the Land. Borrowers shall comply with (or cause compliance with) all requirements of any insurance company or inspection or rating bureau in respect of the Properties, including, without limitation, any requirements for the continuation of any insurance coverage or the continuation thereof at premium rates. Borrowers shall timely pay and perform each of the obligations of Borrowers under or in connection with the Contracts. Borrowers shall not, without Lender’s prior written consent, (i) enter into any Contract with an Affiliate of any Borrower, any Guarantor or any other Borrower Owner Person and/or (ii) enter into any Contract that has a term in excess of one hundred eighty (180) days unless such Contract is terminable by any Borrower (without penalty) on thirty (30) days’ notice. No Borrower Control Person shall enter into any contract or agreement that contravenes any of the Loan Documents or that provides or has the effect that the performance of the Loan Documents constitutes a default under such contract or agreement or results in the creation of any lien, security interest, other charge or encumbrance upon or with respect to the any Property, Chattels, Intangible Personalty or other Collateral. Borrowers shall perform, observe and fulfill, in all material respects, all of the obligations,

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document covenants and conditions set forth in any agreement or instrument to which any Borrower or any of the properties, assets or revenues of any Borrower, as the case may be, are bound, if the failure to perform, observe or fulfill any such obligation, covenant or condition would materially and adversely affect the properties, assets, operations or condition (financial or otherwise) of any Borrower, as the case may be, or the ability of any party to the Loan Documents to perform Borrowers’ obligations under the Loan Documents.

5.1.29 Records and Books of Account. Borrowers shall keep accurate and complete records and books of account, in which complete entries shall be made, reflecting all financial transactions of Borrowers relating to the Properties.

5.1.30 Inspection Rights. At any reasonable time, and from time to time, upon not less than 24 hours prior notice from Lender, Borrower shall permit Lender, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit and inspect each or any Property and to discuss with Borrower the affairs, finances and accounts of Borrower. Borrower shall take all actions necessary or required under the Leases to effect such right of Lender to inspect the Property.

5.1.31 Cozine Environmental Obligations. Borrower shall satisfy or cause to be satisfied, as determined by the applicable Governmental Authority, the Cozine Environmental Obligations.

ARTICLE 6 NEGATIVE COVENANTS

6.1Negative Covenants. Borrowers covenant and agree that, until payment in full of the Secured Obligations, Borrowers shall not do, directly or indirectly, any of the following without Lender’s prior written consent:

6.1.1 Debt. Incur any Indebtedness, other than the Loan and Permitted Debt or as otherwise set forth in this Agreement.

6.1.2 Liens on any Property or other Collateral. Incur, create, assume, become or be liable in any manner with respect to, or permit to exist, except as permitted by this Agreement, any Lien with respect to any Property or the other Collateral, except: (i) Liens in favor of Lender and (ii) the Permitted Encumbrances.

6.1.3 Ownership. Own any property of any kind other than the Collateral.

6.1.4 Intentionally Omitted.

6.1.5 Dissolution; Merger or Consolidation. Dissolve, terminate, liquidate, merge with or consolidate into another Person.

6.1.6 Change In Business. Make any material change in the scope or nature of the business objectives, purposes or operations of Borrowers, or undertake or participate in activities other than the continuance of the present business of the Borrowers.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6.1.7 Debt Cancellation. Cancel or otherwise forgive or release any material claim or debt owed to any Borrower by any Person, except for adequate consideration or in the ordinary course of such Borrowers’ business.

6.1.8 Affiliate Transactions. Except as otherwise provided herein, enter into, or be a party to, any transaction with an Affiliate of any Borrower Control Person, except in the ordinary course of business and on terms that are intrinsically fair and substantially similar to those that would be available on an arm’s length basis with third parties other than an Affiliate.

6.1.9 Creation of Easements. Except as expressly permitted by or pursuant to the applicable Mortgage or this Agreement or as may otherwise be consented to by Lender in writing, create, or permit any Property or any part thereof to become subject to, any easement, license or restrictive covenant, other than a Permitted Encumbrance.

6.1.10 Misapplication of Funds. Distribute any Gross Revenue or Moneys received from any Leases in violation of the provisions of this Agreement and the other Loan Documents.

6.1.11 Certain Restrictions. Enter into any agreement that expressly restricts the ability of any Borrower to enter into amendments, modifications or waivers of any of the Loan Documents.

6.1.12 Assignment of Permits and Warranties. Assign or transfer any of Borrowers’ interest in any and all Permits and warranties pertaining to any Property, or assign, transfer or remove or permit any other Person to assign, transfer or remove any records pertaining to any Property and the location of any such records at any Property or the office of any Borrower.

6.1.13 Place of Business; Jurisdiction of Organization; Name of Borrower. (i) Change the chief executive office or the principal place of business of any Borrower without giving Lender at least fifteen (15) days’ prior written notice thereof and promptly providing Lender such information as Lender may reasonably request in connection therewith or (ii) change or permit a change of the jurisdiction of organization of any Borrower without first notifying Lender in writing of such Borrower’s intention to do so and delivering to Lender any financing statement that may be filed in connection with any of the Loan Documents as Lender may require or (iii) change the name under which any Borrower does business, or adopt or begin doing business under any other name or assumed or trade name, without first notifying Lender of Borrowers’ intention to do so and delivering to Lender such executed modifications or supplements to this Agreement and/or any of the other Loan Documents (and to any financing statement that may be filed in connection with any of the Loan Documents) as Lender may require.

6.1.14 Leases. Enter into, amend, modify, restate or cancel any Lease except in accordance with Section 5.1.18.

6.1.15 Management Agreement. Except in accordance with this Agreement, (i) Enter into, any management agreement, (ii) terminate, cancel or consent to either the reduction of the term of or the assignment of any management agreement approved by Lender in

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document accordance with this Agreement, (iii) increase or consent to the increase of the amount of any fees or charges payable under any management agreement approved by Lender in accordance with this Agreement, or (iv) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, any management agreement approved by Lender in accordance with this Agreement in any material respect.

6.1.16 Plans and Welfare Plans. (i) Knowingly engage in or permit any transaction in connection with which any Borrower or any ERISA Affiliate could be subject to either a material civil penalty or tax assessed pursuant to Section 502(i) or 502(1) of ERISA or Section 4975 of the Code, permit any Welfare Plan to provide benefits, including without limitation, medical benefits (whether or not insured), with respect to any current or former employee of Borrower beyond his or her retirement or other termination of service other than (a) coverage mandated by Legal Requirements, (b) death or disability benefits that have been fully provided for by paid up insurance or otherwise or (c) severance benefits (unless such coverage is provided after notification of and with the reasonable approval of Lender), (ii) permit the assets of any Borrower to become “plan assets”, whether by operation of law or under regulations promulgated under ERISA or adopt, amend (except as may be required by Legal Requirements) or increase the amount of any benefit or amount payable under, or permit any ERISA Affiliate to adopt, amend (except as may be required by Legal Requirements) or increase the amount of any benefit or amount payable under, any Plan or Welfare Plan, except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits expense to any Borrower or any ERISA Affiliate or (iii) permit an ERISA Event to occur.

6.1.17 ERISA. Engage in any transaction that would cause the Note (or the exercise by Lender of any of its rights under the Loan Documents) to be a non-exempt, prohibited transaction under ERISA (including for this purpose the parallel provisions of Section 4975 of the Internal Revenue Code of 1986, as amended), or otherwise result in Lender being deemed in violation of any applicable provisions of ERISA. Borrowers shall indemnify, protect, defend, and hold Lender harmless from and against any and all losses, liabilities, damages, claims, judgments, costs, and expenses (including, without limitation excise taxes, attorneys’ fees and costs incurred in the investigation, defense, and settlement of claims and in obtaining any individual ERISA exemption or state administrative exception that may be required, in Lender’s sole and absolute discretion) that Lender may incur, directly or indirectly, as the result of the breach by Borrowers of any warranty or representation set forth in Section 4.1.17 hereof or the breach by Borrowers of any covenant contained in this Section 6.1.17. This indemnity shall remain in full force and effect until repayment in full of the Secured Obligations and shall not be subject to the limitation on personal liability described in Section 10.31.

6.1.18 Equipment and Inventory. Permit any Equipment or Inventory owned by any Borrower to be removed at any time from any Property unless the removed item is consumed or sold in the usual and customary course of business, removed temporarily for maintenance and repair or, if removed permanently, replaced by an article of equivalent suitability and not materially less value, owned by Borrowers free and clear of any Lien.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6.1.19 Payments to Affiliates. Pay any Borrower or any Affiliate of Borrower any fees with respect to any Property, except for Property Manager or any property manager pursuant to an approved property management agreement pursuant to Section 5.1.11, and as otherwise approved by Lender in writing.

6.1.20 Waste and Alterations. Commit or permit any physical waste with respect to any Property or the Chattels. Borrowers shall not cause or permit any part of any Property, including but not limited to any building, structure, parking lot, driveway, landscape scheme, timber, or other ground improvement, to be removed, demolished, or materially altered without the prior written consent of Lender, which may be granted or withheld in the sole discretion of Lender. Borrowers shall not change or cause to be changed any access to or egress from any Property by public streets, easements or rights of way without Lender’s prior written consent.

6.1.21 Distributions. Make any distributions to direct or indirect members or other owners or its respective Affiliates (including, without limitation, those made for purposes such as the return of such parties’ equity in Borrower) during the existence of any Event of Default without the prior written consent of Lender in its sole and absolute discretion.

6.1.22 Zoning and Private Covenants. Initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the “zoning lot” or “zoning lots” (or similar zoning unit or units) presently comprising any Property, any transfer of development rights, any private restrictive covenant, or any other public or private restriction limiting or defining the uses which may be made of any Property or any part thereof, without the express written consent of Lender. If under applicable zoning provisions the use of all or any part of any Property is or becomes a nonconforming use, Borrowers shall not cause such use to be discontinued or abandoned without the express written consent of Lender, and Borrowers shall use its best efforts to prevent the tenant under any Lease from discontinuing or abandoning such use.

6.1.23 Contracts. Enter into, modify, change, supplement, alter, amend or terminate, or consent to the entering into, modification, change, supplement, alteration, amendment modification or termination of, any Contract in excess of $50,000.00 (including, without limitation, any collective bargaining agreement or any other labor agreement) without Lender’s prior written consent.

6.1.24 Use of Proceeds. Use any funds advanced by Lender under the Loan Documents for household or agricultural purposes, to purchase margin stock, or for any purpose prohibited by law.

6.1.25 Access Agreements. Enter into, amend, supplement, cancel, modify or terminate any Access Agreements., without Lender’s prior written consent.

6.1.26 Further Encumbrance of Chattels. Create nor permit any lien, security interest or encumbrance against the Chattels, Intangible Personalty or other Collateral or any part thereof or interest therein, other than the liens and security interests created by the Loan

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Documents, without the prior written consent of Lender, which may be withheld for any reason.

6.1.27 Assessments Against Property. Without the prior written consent of Lender, which may be withheld for any reason, consent to or allow the creation of any so-called special districts, special improvement districts, benefit assessment districts or similar districts, or any other body or entity of any type, or consent to or allow the occurrence of any other event, that would or might result in the imposition of any additional taxes, assessments or other monetary obligations or burdens on any Property.

6.1.28 Transfer or Removal of Chattels, Intangible Personalty or other Collateral. Sell, transfer or remove from any Property all or any part of the Chattels, Intangible Personalty or other Collateral, unless the items sold, transferred, or removed are simultaneously replaced with similar items of equal or greater value.

6.1.29 Change of Name. Change the name under which such Borrower does business, or adopt or begin doing business under any other name or assumed or trade name, without first notifying Lender of such Borrower’s intention to do so and delivering to Lender such executed modifications or supplements to this Agreement (and to any financing statement which may be filed in connection herewith) as Lender may reasonably require.

6.1.30 Improper Use of Property, Chattels, Intangible Personalty or other Collateral. Use any Property, the Chattels, the Intangible Personalty or the other Collateral for any purpose or in any manner that violates any applicable law, ordinance, or other governmental requirement, the requirements or conditions of any insurance policy, or any private covenant.

ARTICLE 7 EVENT OF DEFAULT

7.1Event of Default. The occurrence of one or more of the following events shall be an “Event of Default” hereunder:

7.1.1 if Borrower fails to pay when due any interest, principal or other amount in a sum certain under this Agreement or under any of the other Loan Documents for which sum there is a scheduled date for payment or for which there is a date certain for payment;

7.1.2 if Borrower fails to pay within ten (10) days following demand by Lender any amount other than any amount described in Section 7.1.1 above;

7.1.3 if Borrower fails to pay the outstanding Secured Obligations on the Loan on the Loan Maturity Date;

7.1.4 if, any certification, representation or warranty made by any Borrower Control Person in the Loan Application, this Agreement, the Note, the Mortgages or any other Loan Document, or in any certificate or notice delivered or made in connection herewith or therewith, shall prove to be false, misleading or erroneous in any material respect when made or deemed made;

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 7.1.5 if there is a breach of the provisions of Section 5.1.14, Section 5.1.15, Section 5.1.18, Section 5.1.20, Section 5.1.22, Section 5.1.24, Section 5.1.25, Section 6.1.1, Section 6.1.2, Section 6.1.3, Section 6.1.4, Section 6.1.5, Section 6.1.9, Section 6.1.13, Section 6.1.14, Section 6.1.16, Section 6.1.17, Section 6.1.27 or Section 6.1.28 hereof;

7.1.6 if, any Borrower Control Person makes an assignment for the benefit of creditors or admits in writing, of any such Borrower Control Person’s inability to pay such Borrower Control Person’s debts as they become due in any proceeding under the U.S. Bankruptcy Code or any similar federal or state law;

7.1.7 if, a receiver, liquidator or trustee shall be appointed for any Borrower Control Person, for the taking of possession of all or a substantial part of any property of any Borrower Control Person, or if any Borrower Control Person, shall be adjudicated in a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by or against, consented to, or acquiesced in by, any Borrower Control Person, or if any proceeding for bankruptcy or seeking reorganization, liquidation, dissolution, winding-up, arrangement, composition or readjustment of debts of any Borrower Control Person shall be instituted or any other relief under any bankruptcy or any other similar act or law of any jurisdiction, foreign or domestic, now or hereafter existing, or if there occurs or if any Borrower Control Person shall dissolve or cease to exist, or if any general assignment is made for the benefit of the creditors or any Borrower Control Person; provided, however, that if such appointment, adjudication, petition or proceeding was involuntary and not consented to by any Borrower Control Person, upon the same not being discharged, stayed or dismissed within ninety (90) days, or if any Borrower Control Person shall generally not be paying its debts as they become due, or if any Borrower Control Person takes any action for or indicating its consent to, the purpose of effecting any of the foregoing in any court of competent jurisdiction;

7.1.8 if, other than in connection with a transfer or assumption pursuant to Section 8.1 hereof, any Borrower and/or any Guarantor attempts to delegate its obligations or assign its respective rights under this Agreement, any of the other Loan Documents to which it is a party or any interest herein or therein;

7.1.9 if there occurs (i) any Default, after the lapse of any applicable notice, grace or cure period under any Loan Document, or (ii) any new “Event of Default” as defined or described in this Agreement, the Note, any of the Mortgages and/or any other Loan Document;

7.1.10 if, any Borrower fails to maintain or renew in accordance with Section 5.1.16 any insurance required to be maintained pursuant to Section 5.1.16 hereof;

7.1.11 if, any Borrower and/or any Guarantor shall fail to perform any of the terms, covenants, obligations or conditions of this Agreement, the Note, the Mortgages or the other Loan Documents to which it is a party that are not specifically referred to in other subsections in this definition of “Event of Default,” in each case for ten (10) days after written notice to such Borrower or such Guarantor (as applicable), from Lender, in the case of any failure that can be cured by the payment of a sum of money (other than Events of Default pursuant to Sections 7.1.1, 7.1.2 and 7.1.3 above as to which no grace period shall be applicable), or for

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document thirty (30) days after written notice from Lender, in the case of any other failure (unless a longer notice period is otherwise provided herein or in such other Loan Document); provided, however, that if such non-monetary failure is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and provided further that Borrower shall have commenced to cure such failure within such 30‑day period and thereafter diligently and expeditiously proceeds to cure the same, such 30‑day period shall be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such failure but in no event for more than one hundred twenty (120) days; and for the avoidance of doubt, the cure periods set forth in this Section 7.1.11 shall not be applicable to the Events of Default described in the other subsections of this Section 7.1;

7.1.12 if, any Borrower, any Guarantor or any other Borrower Control Person shall purport to, terminate, revoke, repudiate, declare voidable or void or otherwise contest the validity or enforceability of any of the Loan Documents or any provision of any of the foregoing or any of the obligations of any Borrower and/or such Guarantor and/or such Borrower Control Person; or any Lien created or purported to be created in by any Loan Document shall fail to be a valid, enforceable and perfected Lien in favor of Lender securing the Secured Obligations, prior to all other encumbrances except Permitted Encumbrances;

7.1.13 if, any Borrower breaches the provisions of Section 5.1.2(E), and such breach is not cured within thirty (30) days following notice to such Borrower;

7.1.14 any failure by Borrowers to vacate, or set aside, or stay, for thirty (30) days, any levy executed, attached, sequestrated or other writ against any Property, Chattel or Personalty;

7.1.15 any failure of any Borrower Control Person to pay any money judgment in excess of $25,000.00 against such Borrower Control Person before the expiration of thirty (30) days after such judgment becomes final and no longer appealable;

7.1.16 any assertion of any claim of priority over any Mortgage, by title, lien, or otherwise, unless Borrowers within thirty (30) days after such assertion either causes the assertion to be withdrawn or provides Lender with such security as Lender may require to protect Lender against all loss, damage, or expense, including actual third party attorneys’ fees, which Lender may incur in the event such assertion is upheld;

7.1.17 any order or decree is entered by any court of competent jurisdiction (i) enjoining the rental of any space at any Property or (ii) enjoining or prohibiting any Borrower or any Guarantor, from substantially performing any of its respective obligations under this Agreement or any other Loan Document and such order or decree is not stayed or vacated, or the proceedings out of which such order or decree arose are not dismissed, within thirty (30) days after the granting of such decree or order;

7.1.18 any Transfer that is not a Permitted Transfer shall occur;

7.1.19 the occurrence of any default after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an “Event of Default” under any consensual lien encumbering the Property or any part thereof or interest therein, or any

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document document or instrument evidencing obligations secured thereby, provided, however, that nothing in this Section 7.1.19 shall be deemed to permit any such consensual lien to be executed by any Borrower or any other Person; or

7.1.20 the occurrence of any default after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an “Event of Default” under any Indebtedness (other than the Loan) incurred or owing by any Borrower or any document or instrument evidencing any obligation to pay such Indebtedness,

then, upon the occurrence of any such Event of Default and at any time thereafter if such Event of Default remains uncured, Lender, may, in addition to any other rights or remedies available to it pursuant to this Agreement and the other Loan Documents, or at law or in equity, take such action, without further notice or demand, as Lender deems advisable to protect and enforce its rights against Borrowers (or any of them) and/or Guarantor, as may be applicable, and in and to all or any portion of the Collateral (including, without limitation, declaring the entire Secured Obligations to be immediately due and payable) and may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrowers (or any of them), Guarantor and/or the Collateral (including, without limitation, all rights or remedies available at law or in equity). Notwithstanding anything herein to the contrary, the provisions of Section 7.1.6, Section 7.1.7 and Section 7.1.15 shall not apply to any individual member of the Board of Directors of any corporation that is a Borrower Control Person.

7.2Remedies. Immediately upon or any time and from time to time after the occurrence and during the continuation of any Event of Default hereunder, Lender may exercise any remedy available at law or in equity, including but not limited to those listed below and those listed in the other Loan Documents, in such sequence or combination as Lender may determine in Lender’s sole discretion.

7.2.1 Performance of Defaulted Obligations. Lender may make any payment or perform any other obligation under the Loan Documents that any Borrower Control Person has failed to make or perform, and Borrowers hereby irrevocably appoints Lender as the true and lawful attorney-in-fact for Borrowers to make any such payment and perform any such obligation in the name of Borrowers (or any of them). All out-of-pocket payments made and expenses (including attorneys’ fees) incurred by Lender in this connection, together with interest thereon at the Default Rate from the date paid or incurred until repaid, will be part of the Secured Obligations and will be immediately due and payable by Borrowers to Lender. In lieu of advancing Lender’s own funds for such purposes, Lender may use any funds of Borrowers or any of them which may be in Lender’s possession, including but not limited to insurance or condemnation proceeds and amounts deposited for taxes, insurance premiums, or other purposes.

7.2.2 Specific Performance and Injunctive Relief. Notwithstanding the availability of legal remedies, Lender shall be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Borrowers (or any of them) and/or Guarantor to cure or refrain from repeating any Default.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 7.2.3 Acceleration of Secured Obligations. Lender may, without notice or demand, declare all of the Secured Obligations immediately due and payable in full.

7.2.4 Suit for Monetary Relief. Subject to the non-recourse provisions of Section 10.31 hereof, with or without accelerating the maturity of the Secured Obligations, Lender may sue from time to time for any payment due under any of the Loan Documents, or for money damages resulting from any Default by Borrowers (or any of them) or Guarantor under any of the Loan Documents.

7.3 Remedies Cumulative. The rights, powers and remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrowers and/ or Guarantor pursuant to this Agreement or the other Loan Documents executed by or with respect to Borrowers and/or Guarantor, or existing at law or in equity or otherwise. Lender’s rights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s sole discretion. No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient. A waiver of any Default or Event of Default shall not be construed to be a waiver of any subsequent Default or Event of Default or to impair any remedy, right or power consequent thereon.

7.4Curative Advances. If any Default occurs and is not cured by Borrower after notice from Lender within the applicable cure period, if any, or if any Event of Default occurs, then Lender may expend such sums as either shall reasonably deem appropriate to cure or attempt to cure such Default or Event of Default, including, without limitation, Protective Advances; provided, however, no such sum expended by Lender (and no reimbursement thereof by Borrowers) shall be deemed to cure any Event of Default unless Lender shall waive such Event of Default in writing in its sole discretion. Borrowers shall immediately repay all such sums (including, without limitation, Protective Advances) so advanced, which sums shall immediately become part of the Secured Obligations, bear interest at the Default Rate from the date advanced until the date repaid, and be secured by the Collateral.

7.5Expenses of Enforcement. All out-of-pocket costs and expenses incurred by Lender in the exercise of its rights and remedies, including, without limitation, out-of-pocket attorneys’ fees, shall be added to the Secured Obligations and shall be payable on demand and bear interest at the Default Rate from the date incurred until repaid.

ARTICLE 8 TRANSFERS, RELEASE OF PROPERTY

8.1Transfers.

A.Borrowers shall not Transfer, directly or indirectly, all or any part of the Collateral or all or any part of any Property, or, except for a Permitted Transfer, permit any Transfer, directly and indirectly, of any, direct or indirect, ownership interest in, or Control of, any Borrower or any Property, without Lender’s prior written consent thereto.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document B.Notwithstanding the foregoing, and provided that the Transfer Conditions (as defined below) are satisfied, the following transfers (each, a “Permitted Transfer”) are permitted without Lender’s prior written consent:

(1) (a) The limited partners of Managing Member may transfer their respective limited partnership interests in Managing Member to Guarantor in exchange for shares in Guarantor, (b) each of Paul Cooper, By-Pass Trust under Article THIRD of the Last Will and Testament of Jerome Cooper, Jeffrey Ravetz, Sarah Ravetz, Louis Sheinker, Jeffrey Wu and the Wu Family 2012 Gift Trust (each individually, a “Principal”, and, collectively, the “Principals”) may transfer their respective limited partnership interests in Managing Member to another Principal, (c) Managing Member may issue additional limited partnership interests to Persons who are not Principals, and (d) owners of shares of GTJ REIT may (x) transfer such shares in accordance with the applicable operating documents of GTJ REIT, or (y) transfer such shares to GTJ REIT to be redeemed by GTJ REIT pursuant to the applicable operating documents of GTJ REIT, provided, however, that in each such case, such transfer does not result in any Person owning more than nine percent (9%) of the direct or indirect ownership interests of any Borrower (any such transfer, a “Public Transfer”), in each case without violating the provisions of this Section 8.1, provided that each of the Transfer Conditions (defined below) are satisfied with respect to any such Transfer.

(2) Transfers of title or interests (including ownership interests) under any trust or will or testament or applicable laws of descent or intestacy.

(3) Jeffrey Wu, an individual on behalf of himself and the Wu Family 2012 Gift Trust, may pledge and/or Transfer the 24.413% class B limited partnership interests and his 2.219% common limited partnership interests in Managing Member to PNC Bank, N.A. without violating the provisions of this Section 8.1, provided that each of the WU Transfer Conditions (as defined below) are satisfied with respect to any such Transfer.

C.For purpose of this Section 8.1, “Transfer Conditions” mean all of the following:

(1) Other than in respect of a Public Transfer, there exists no Event of Default at the time of such transfer.

(2) The Principals, either individually or together, shall maintain at least a 5% direct or indirect ownership interest in each of the Borrowers.

(3) Other than in respect of a Public Transfer, Paul Cooper continues to be the Chief Executive Officer of GTJ REIT, Louis Sheinker continues to be the President of GTJ REIT, and Paul Cooper and Louis Sheinker each continue to be members of the Board of Directors of GTJ REIT.

(4) GTJ GP shall either (A) remain the sole general partner of Managing Member and shall continue to own at least one percent (1%) of the outstanding partnership interests in Managing Member, or (B) own one hundred percent (100%) of the direct ownership interests in each of the Borrowers.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (5) Guarantor shall (A) remain the owner of one hundred percent (100%) of the direct ownership interests in GTJ GP, (B) continue to Control GTJ GP, (C) so long as Managing Member exists, continue to indirectly Control Managing Member and (D) continue to indirectly Control each Borrower.

(6) Other than in respect of a Public Transfer, after the proposed Transfer, Guarantor continues to satisfy the Guarantor Minimum Net Worth Requirement and the Guarantor Minimum Available Liquidity Requirement.

(7) If a change in the Property Manager for the Property (not a change in the manager or managing member of any Borrower) shall result from such transfer, Borrowers shall enter into a Management Agreement with a Property Manager that has reasonably satisfactory experience operating and leasing property similar to the Property and that has a term no greater than one (1) year, may be cancelled on 30-days written notice (without cause and without any cancellation fee or charge), and which provides that the Property Manager shall subordinate its fees to the payment of the Loan, and otherwise complies with the terms of this Agreement and the other Loan Documents.

(8) Other than in respect of a Public Transfer, (i) at least thirty (30) days prior to any such proposed Transfer, Borrowers shall deliver to Lender written notice of the proposed Transfer (the “Transfer Notice”) and an organizational chart illustrating the ownership structure of each Borrower both before and after the consummation of the proposed Transfer, which organizational chart shall set forth Borrowers’ direct and indirect upstream owners, the percentage interests held by each such owner and the type of entity of each such owner that is an entity (an “Organizational Chart”) confirming the ownership structure before and after the proposed Transfer and (ii) within ten (10) days after the proposed Transfer has occurred, Borrowers shall deliver to Lender a final Organizational Chart reflecting the new ownership structure of each Borrower.

(9) Borrowers shall pay or reimburse Lender for all of the out-of-pocket costs, fees and expenses incurred by Lender in respect of any such proposed Transfer, including, without limitation, reasonable attorneys’ fees incurred by Lender, whether or not such proposed Transfer is consummated.

(10) The proposed transferee and its constituent members (A) are not then identified by the Office of Foreign Assets Control or Department of Treasury as a person subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, the Trading with the Enemy Act and any Executive Orders or regulations promulgated thereunder (as any and all of such laws and regulations have been or may hereafter be, renewed, extended, amended or replaced) with the result that such proposed transferee and its constituent members are in violation of law and/or transaction of business with such parties is prohibited by law, (B) are not in violation of any Anti-Terrorism Laws or Anti-Money Laundering Laws, and (C) if Lender requests, execute a certificate in form and substance reasonably satisfactory to Lender in connection with each such Transfer, evidencing that the proposed transferee and all of its constituent members comply with the requirements set forth in Section 5.1.22.

(11) With respect to any Permitted Transfer effected pursuant to Section 8.1(B)(1) (except Section 8.1(B)(1)(d)), Section 8.1(B)(2) or Section 8.1(B)(3)), concurrently with delivery

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document of the Transfer Notice, Borrowers pay Lender an administrative review fee equal to $3,000, which fee shall be fully earned by Lender as of the date Borrower delivers the Transfer Notice to lender.

(12) Other than in respect of a Public Transfer, not later than twenty (20) days following any such Transfer, Borrowers shall provide Lender with (A) evidence reasonably satisfactory to Lender that all of the Transfer Conditions have been satisfied with respect to such Transfer and (B) a certificate signed by Borrowers and Guarantor that (I) certifies to Lender that all of the Transfer Conditions have been satisfied with respect to such Transfer, (II) certifies to Lender that the Organizational Chart delivered to Lender in respect of such transfer is true, complete and correct, and (III) attaches (x) a copy of the documents effectuating the Transfer and a copy of the organizational documents of the entities affected by such Transfer, as amended, and (y) any other information that Lender may reasonably request.

(13) Such Transfer shall not (i) impair or adversely affect Lender’s rights or security under the Loan Documents, (ii) diminish the obligations of Borrowers under this Agreement, the other Loan Documents, or (iii) diminish the obligations of Guarantor under the Guaranty Agreement and the Environmental Indemnity Agreement.

(14) Such Transfer could not subject Lender or any of its Affiliates to any civil or criminal penalties in any jurisdiction or otherwise constitute an unlawful act, offence or crime by Lender or any of its Affiliates, including, without limitation, under any of the laws, regulations and executive orders described in Section 5.1.22 of this Agreement.

D.For purpose of this Section 8.1, “WU Transfer Conditions” mean all of the following:

(1) There exists no Event of Default at the time of such transfer.

(2) GTJ GP shall remain the sole general partner of Managing Member and shall continue to own at least one percent (1%) of the outstanding partnership interests in Managing Member.

(3) Guarantor shall (A) remain the owner of one hundred percent (100%) of the direct ownership interests in GTJ GP, (B) continue to Control GTJ GP and (C) continue to indirectly Control Managing Member and each Borrower.

(4) Prior to and following such Transfer, neither Jeffrey Wu nor the transferee or the pledgee, as the case may be, nor any transferee or successor of such transferee or pledgee, shall have any right to Control Guarantor, GTJ GP, Managing Member or any Borrower.

(5) After the proposed Transfer, Guarantor continues to satisfy the Guarantor Minimum Net Worth Requirement and the Guarantor Minimum Available Liquidity Requirement.

(6) If a change in the Property Manager for the Property (not a change in the manager or managing member of any Borrower) shall result from such transfer, Borrowers shall enter into a Management Agreement with a Property Manager that has reasonably satisfactory experience operating and leasing property similar to the Property and that has a term no greater than one (1) year, may be cancelled on 30-days written notice (without cause and without any cancellation fee

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or charge), and which provides that the Property Manager shall subordinate its fees to the payment of the Loan, and otherwise complies with the terms of this Agreement and the other Loan Documents.

(7) (i) at least thirty (30) days prior to any such proposed Transfer, Borrowers shall deliver to Lender the Transfer Notice (as defined in Section 8.1(C)(8)) and an Organizational Chart (as defined in Section 8.1(C)(8)) confirming the ownership structure before and after the proposed Transfer and (ii) within ten (10) days after the proposed Transfer has occurred, Borrowers shall deliver to Lender a final Organizational Chart reflecting the new ownership structure of each Borrower.

(8) Borrowers shall pay or reimburse Lender for all of the out-of-pocket costs, fees and expenses incurred by Lender in respect of any such proposed Transfer, including, without limitation, reasonable attorneys’ fees incurred by Lender, whether or not such proposed Transfer is consummated.

(9) The proposed transferee and its constituent members (A) are not then identified by the Office of Foreign Assets Control or Department of Treasury as a person subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, the Trading with the Enemy Act and any Executive Orders or regulations promulgated thereunder (as any and all of such laws and regulations have been or may hereafter be, renewed, extended, amended or replaced) with the result that such proposed transferee and its constituent members are in violation of law and/or transaction of business with such parties is prohibited by law, (B) are not in violation of any Anti-Terrorism Laws or Anti-Money Laundering Laws, and (C) if Lender requests, execute a certificate in form and substance reasonably satisfactory to Lender in connection with each such Transfer, evidencing that the proposed transferee and all of its constituent members comply with the requirements set forth in Section 5.1.22.

(10) With respect to any Permitted Transfer effected pursuant to Section 8.1(B)(1), Section 8.1(B)(2) or Section 8.1(B)(3), concurrently with delivery of the Transfer Notice, Borrowers pay Lender an administrative review fee equal to $3,000.

(11) Not later than twenty (20) days following any such Transfer, Borrowers shall provide Lender with (A) evidence reasonably satisfactory to Lender that all of the Transfer Conditions have been satisfied with respect to such Transfer and (B) a certificate signed by Borrowers and Guarantor that (I) certifies to Lender that all of the Transfer Conditions have been satisfied with respect to such Transfer, (II) certifies to Lender that the Organizational Chart delivered to Lender in respect of such transfer is true, complete and correct, and (III) attaches (x) a copy of the documents effectuating the Transfer and a copy of the organizational documents of the entities affected by such Transfer, as amended, and (y) any other information that Lender may reasonably request.

(12) Such Transfer shall not (i) impair or adversely affect Lender’s rights or security under the Loan Documents, (ii) diminish the obligations of Borrowers under this Agreement, the other Loan Documents, or (iii) diminish the obligations of Guarantor under the Guaranty Agreement and the Environmental Indemnity Agreement.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (13) Such Transfer could not subject Lender or any of its Affiliates to any civil or criminal penalties in any jurisdiction or otherwise constitute an unlawful act, offence or crime by Lender or any of its Affiliates, including, without limitation, under any of the laws, regulations and executive orders described in Section 5.1.22 of this Agreement

(14) Following any such Transfer to PNC Bank, N.A., or any foreclosure or assignment in lieu of foreclosure in respect of such pledge to PNC Bank, N.A., PNC Bank, N.A., or the transferee or designee in respect of such foreclosure or assignment in lieu of foreclosure (provided, however, that any such transferee or designee is consented to by Lender), shall be subject to the provisions of this Section 8.1 and shall not pledge or transfer its membership interests in Managing Member to any Person without the prior written consent of Lender.

8.2Intentionally Omitted.

8.3Intentionally Omitted.

8.4Release of Property. The Loan shall be secured by, among other things, the Mortgages, each creating a first Lien on the applicable Property, and the other Collateral. Except as expressly set forth below in this Section, Lender shall have no obligation to release any Property or other Collateral until all of the Secured Obligations have been paid and performed in full, and all obligations of Lender under this Agreement and the other Loan Documents have terminated.

8.4.1Notwithstanding the foregoing, following the Release Lockout Date, Borrowers shall be entitled to obtain a release from the Lien of the Loan Documents as to any one (1) (but not more than one (1)) Property in the Portfolio (the Property released in accordance with this Section 8.4 being referred to herein as the “Released Property”, and the Properties that have not been released in accordance with this Agreement being collectively referred to herein as the “Remaining Properties”), provided that all of the following conditions (collectively, the “Release Conditions”) are satisfied as of the date of the release of the Released Property (the “Release Date”):

a. Borrowers have delivered to Lender, not later than thirty (30) days prior to the proposed Release Date, a written request for the release of such Released Property (each, a “Release Request”), which Release Request shall (i) confirm that, as of the proposed Release Date, each of the Release Conditions shall be satisfied and (ii) include such supporting documentation demonstrating such satisfaction as may be required by Lender.

b. Intentionally omitted.

c. Intentionally omitted.

d. No Default or Event of Default shall exist under any of the Loan Documents at the time of delivery of the Release Request through and including the Release Date.

e. With respect to the Released Property, the Borrowers have paid to Lender an amount equal to one hundred ten percent (110%) of the Allocated Loan Amount

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document applicable to such Released Property (such amount paid to Lender with respect to the Released Property being referred to herein as the “Release Amount”).

f. Immediately after the release of such Released Property from the lien of the applicable Mortgage, the Portfolio Debt Service Coverage Ratio must be equal to or greater than greater of (i) 2.00:1.0 and (ii) the Portfolio Debt Service Coverage Ratio immediately prior to the Release Date.

g. Immediately after the release of such Released Property from the lien of the applicable Mortgage, the Portfolio Loan-to-Value Ratio shall be not greater than the lesser of (i) fifty-five percent (55%) and (ii) the Portfolio Loan-to Value Ratio (taking into account the Released Property) immediately prior to the Release Date.

h. Borrowers have paid to Lender a release fee equal to $7,500, payable at the time Borrowers deliver the Release Request to Lender, which fee shall be fully earned by lender as of the date Borrower delivers the Release Request.

i. Borrowers have paid to Lender an amount equal to the prepayment premium with respect to Release Amount, calculated in accordance with the provisions of Section 5 of the Note.

j. Borrowers may not seek the release of less than an entire Property.

k. Borrowers have reimbursed Lender for any and all costs and expenses incurred by Lender in connection with the release of such Released Property (including, without limitation, reasonable attorneys’ fees and costs, servicer’s fees and costs, and, the cost of any title endorsement required by Lender in its sole and absolute discretion, including, without limitation, any modification to any tie-in endorsement), whether or not such release is actually consummated.

l. Borrowers and Guarantor (as applicable) have executed and delivered to Lender all documents (which documents shall be in form and substance satisfactory to Lender) reasonably requested by Lender relating to the release of such Released Property, including, without limitation, documents to modify the Loan Documents to reflect such release and/or to ratify, reaffirm and/or further evidence the continued validity of the Mortgages and the other Loan Documents, and the liens on the Remaining Properties created thereby.

8.5One-Time Transfer

8.5.1 . Notwithstanding the “due-on-sale” provisions of the Loan Documents to the contrary, Lender shall permit a one-time transfer of all, but not a portion of, the Portfolio provided that all of the following conditions are satisfied: (i) no Default or Event of Default exists; (ii) Borrowers have paid to Lender an assumption fee of one percent (1%) of the outstanding principal balance of the Secured Obligations; (iii) if the proposed transferee is a land trust, Lender has received a first-lien collateral assignment of all beneficial interest therein; (iv) Lender has received and has had a reasonable opportunity to review and approve all organizational documents (including, without limitation, certificates and articles of formation, partnership and operating agreements, by-laws, certificates of good standing and authorizing resolutions) and review all documents and agreements executed or to be executed in connection with the proposed

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document transfer; (v) the non-economic terms (e.g., those terms other than interest rate, payment schedule, principal balance, and non-recourse nature (subject to exceptions thereto customarily included by Lender in loan documents)) of the Loan Documents have been modified as Lender may request in good faith; (vi) the proposed transferee has assumed all of the Borrowers’ obligations under the Loan Documents; (vii) Lender has received at least thirty (30) days’ prior written notice of the proposed transfer; (viii) the proposed transferee and, if applicable, its general partners or managing members have, in the sole judgment of Lender exercised in good faith, a net worth equal to or greater than the aggregate net worth of Borrowers as of the date hereof or otherwise satisfactory to Lender, and its general partners or managing members have a satisfactory history of owning, operating and managing property similar to the Properties; (ix) the proposed transferee and, if applicable, its general partners or managing members have, in the sole judgment of Lender exercised in good faith, a satisfactory credit history and professional reputation and character; (x) the Portfolio Debt Service Coverage Ratio is not less than 1.75:1.00, and Lender receives satisfactory evidence that such ratio will be maintained for the twelve (12) months immediately following the consummation of such transfer; (xi) the Portfolio Loan-to-Value Ratio, as determined by Lender pursuant to Appraisals delivered by Borrowers to Lender, and taking into account all obligations secured by liens on the Portfolio does not exceed fifty-five percent (55%); (xii) Borrowers pays all costs and expenses incurred by Lender in connection with such transfer, including, without limitation, all legal, processing, accounting, title insurance, and appraisal fees, whether or not such transfer is actually consummated; (xiii) at Lender’s option, Lender has received endorsements to its mortgagee’s title insurance policies at Borrowers’ expense, which endorsements re-date the date of such title insurance policies and state that the lien of each of the Mortgages remain a first and prior lien against the applicable portion of the Portfolio subject to no exceptions other than as approved by Lender; (xiv) principals of the proposed transferee acceptable to Lender in Lender’s sole discretion execute a guaranty agreement in the form of the Guaranty Agreement and an environmental indemnity agreement in the form of the Environmental Indemnity Agreement; (xv) Borrowers delivers to Lender such opinions of counsel and certifications of organizational documents as Lender may request in form and substance satisfactory to Lender (including, without limitation, existence and authority, and the due execution and enforceability of any and all Loan Documents as assumed by the proposed transferee and the enforceability of any and all documents executed by the proposed transferee and its principals in connection with such transfer); (xvi) the proposed transferee, any Person executing any Loan Documents in connection with the transfer, and their respective constituents comply with the requirements set forth in Section 4.1.20 and Section 5.1.22 hereof; (xvii) the documents providing for the transfer of the Portfolio to the proposed transferee, including without limitation, any tenancy-in-common agreements and any management or similar documents pursuant to which the tenancy-in-common is managed or controlled, if applicable, shall have been reasonably approved by Lender; and (xviii) Borrowers deliver to Lender new or updated surveys confirming that there are no survey exceptions other than those set forth in the survey exceptions in such title insurance policies. Upon the satisfaction of the foregoing conditions and execution of assumption documents in form and substance satisfactory to Lender, Lender shall release Borrowers and Guarantor from liability under the Loan Documents except to the extent of any liability or obligation under the Loan Documents that arises or is based upon any event that occurs or any state of affairs that exists prior to or as of the date of consummation of the proposed transfer (including, without limitation, any liability arising under the Guaranty Agreement and any liability arising under the Environmental Indemnity Agreement).

ARTICLE 10 GENERAL PROVISIONS

10.1Survival. This Agreement and all covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the execution and delivery of this Agreement, the making by Lender of the Loan hereunder and the execution and delivery by Borrowers to Lender of the Loan Documents, and shall continue in full force and effect so long as any portion of the Secured Obligations is outstanding and unpaid (subject, however, to the proviso clause of Section 4.3). Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party. All covenants, promises and agreements in this Agreement contained, by or on behalf of Borrowers, shall inure to the benefit of the respective successors and assigns of Lender. Nothing in this Agreement or in any other Loan Document, express or implied, shall give to any Person other than the parties and the holder of the Note and the other Loan Documents, and their legal representatives, successors and assigns, any benefit or any legal or equitable right, remedy or claim hereunder.

10.2Lender’s Discretion. Whenever pursuant to this Agreement, Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically herein provided) be in the sole discretion of Lender and shall be final and conclusive.

10.3Governing Law.

10.3.1 The substantive laws of the State of New York shall govern the validity, construction, enforcement and interpretation of this Agreement.

10.3.2 Any legal suit, action or proceeding against Lender or Borrowers arising out of or relating to this Agreement may at Lender’s option be instituted in any federal or state court located in (or serving if not located in) the City of New York, New York or the County of New York, New York and Borrowers waive any objections which it may now or hereafter have based on venue and/or forum non conveniens of any such suit, action or proceeding, and Borrowers hereby irrevocably submit to the jurisdiction of any such court in any suit, ACTION OR PROCEEDING. BORROWERS DESIGNATE AND APPOINT SCHIFF HARDIN LLP, HAVING AN ADDRESS AT 666 FIFTH AVENUE, 17TH FLOOR, NEW YORK, NEW YORK 10103, C/O CHRISTINE MCGUINNESS ESQ., TO SO SERVE AS ITS AGENT TO RECEIVE ON THEIR BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK OR THE COUNTY OF NEW YORK, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY BORROWERS TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED OR CERTIFIED MAIL TO BORROWERS AT THEIR PRINCIPAL EXECUTIVE OFFICES EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document APPOINTED BY BORROWERS AS THEIR AGENT FOR SERVICE OF PROCESS REFUSES TO ACCEPT SERVICE OF PROCESS, BORROWERS HEREBY AGREE THAT SERVICE UPON THEM BY MAIL SHALL CONSTITUTE SUFFICIENT SERVICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. Borrower (i) shall give prompt notice to Lender of any change in address of their authorized agent hereunder, (ii) may at any time and from time to time designate a substitute authorized agent with an office in New York, New York (which office shall be designated as the address for service of process), and (iii) shall promptly designate such a substitute if their authorized agent ceases to have an office in New York, New York or is dissolved without leaving a successor.

10.4Modification, Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision of this Agreement or any other Loan Document, or consent or waiver referred to in any Loan Document or consent to any departure by Borrowers therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to or demand on Borrowers shall entitle Borrowers to any other or future notice or demand in the same, similar or other circumstances.

10.5Delay Not a Waiver. Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or under any other Loan Document, or any other instrument given as security therefor, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under this Agreement, the Note or any other Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under this Agreement, the Note or the other Loan Documents, or to declare a default for failure to effect prompt payment of any such other amount.

10.6Notices. Any notice, consent or approval required or permitted to be given by Borrowers or Lender under this Agreement shall be in writing and will be deemed given (i) upon personal delivery, (ii) on the first (1st) business day after receipted delivery to a courier service which guarantees next-business-day delivery, or (iii) on the third (3rd) business day after mailing, by registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below:

If to Borrowers:

c/o GTJ REIT Inc. 60 Hempstead Avenue, Suite 718 West Hempstead, New York 11552 Attention: Paul Cooper

Schiff Hardin LLP 666 Fifth Avenue, 17th Floor New York, New York 10103 Attention: Christine A. McGuinness, Esq.

If to Lender:

The United States Life Insurance Company in the City of New York American Home Assurance Company Commerce and Industry Insurance Company c/o AIG Asset Management 777 S. Figueroa Street, 16th Floor Los Angeles, California 90017-5800 Attention: Director-Mortgage Lending and Real Estate

with a copy to:

Katten Muchin Rosenman LLP 2029 Century Park East Suite 2600 Los Angeles, California 90067-3012 Attention: Adam J. Engel, Esq.

Either party may change such party’s address for notices or copies of notices by giving notice to the other party in accordance with this Section.

10.7TRIAL BY JURY. EACH BORROWER AND LENDER, TO THE FULLEST EXTENT THAT EACH MAY LAWFULLY DO SO, EACH WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS.

10.8Headings. The Article and Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

10.9Assignment.

A.Lender may at any time grant to one or more banks or other financial institutions (each a “Participant”) participating interests in the Secured Obligations owing to Lender. No Participant shall have any rights or benefits under this Agreement or any other Loan Document. In the event of any such grant by Lender of a participating interest to a Participant, Lender shall remain responsible for the performance of its obligations hereunder, and Borrowers shall continue to deal solely and directly with Lender in connection with Lender’s rights and obligations under this Agreement. Any agreement pursuant to which Lender may grant such a

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document participating interest shall provide that Lender shall retain the sole right and responsibility to enforce the obligations of Borrowers hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement.

B.Without in any way limiting the provisions of Section 10.9(A), Lender shall have the right to sell, transfer or assign participating interests in the Secured Obligations or to sell, transfer or assign other direct or indirect interests in the Loan or the Loan Documents and in the obligations of Lender under this Agreement and the other Loan Documents, in such amounts as deemed appropriate by Lender to one or more Persons. Lender may sell, transfer or assign all its interest in the Loan and the Loan Documents, and in the obligations of Lender under this Agreement and the other Loan Documents, to one or more Persons. Upon an assignment of all or a portion of Lender’s direct interest in the Loan and Loan Documents, and an assumption by the assignee of Lender’s obligations hereunder with respect to the portion of the Loan so assigned, Lender shall be released from its obligations hereunder with respect to the assigned interest from and after the date of such assignment.

C.Borrowers may not sell, assign or transfer any interest in the Loan Documents, any Collateral (except as otherwise expressly permitted in the Loan Documents), or any portion of either of the foregoing (including, without limitation, Borrowers’ rights, title, interests, remedies, powers and duties hereunder and thereunder) and any such purported sale, assignment or transfer shall be null and void.

D.Notwithstanding anything to the contrary herein contained, Borrowers authorize Lender to disclose to any Participant or transferee of the Loan (each, a “Transferee”) and any prospective Transferee any and all financial and other information in Lender’s possession concerning any Borrower Control Person and its respective Affiliates, which has been delivered to Lender by or on behalf of any Borrower pursuant to this Agreement or which has been delivered to such Lender by or on behalf of any Borrower in connection with Lender’s credit evaluation of any Borrower Control Person and its respective Affiliates prior to becoming a party to this Agreement.

10.10Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under Legal Requirements, but if any provision of this Agreement shall be prohibited by or invalid under Legal Requirements, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

10.11Preferences. Lender shall have no obligation to marshal any assets in favor of any Borrower or any other party or against or in payment of any or all of the obligations of any Borrower pursuant to this Agreement, the Note or any other Loan Document. Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by any Borrower to any portion of the obligations of Borrowers hereunder. To the extent Borrowers make a payment or payments to Lender for Borrowers’ benefit, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds received, the

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by Lender.

10.12Waiver of Notice. Borrowers shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which this Agreement or another Loan Document specifically and expressly provides for the giving of notice by Lender to Borrowers and except with respect to matters for which Borrowers are not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice. Borrowers hereby expressly waive the right to receive any notice from Lender with respect to any matter for which this Agreement or the other Loan Documents does not specifically and expressly provide for the giving of notice by Lender to Borrowers.

10.13Failure to Consent. If Borrowers shall seek the approval by or consent of Lender hereunder or under the Note, the Mortgages, or any of the other Loan Documents, and Lender shall fail or refuse to give such consent or approval, then Borrowers shall not be entitled to any damages for any withholding or delay of such approval or consent by Lender, it being intended that Borrowers’ sole remedy shall be to bring an action for an injunction, declaratory judgment or specific performance.

10.14Exhibits and Schedules Incorporated. The information set forth on the cover, the heading and the recitals hereof, the Exhibits and the Schedules attached hereto, are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.

10.15Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in and to this Agreement and the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses that are unrelated to this Agreement and the other Loan Documents that Borrowers may otherwise have against any assignor of this Agreement and the other Loan Documents. No such unrelated counterclaim or defense shall be interposed or asserted by Borrowers in any action or proceeding brought by any such assignee upon this Agreement or upon any other Loan Document. Any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrowers, unless and to the extent Borrowers would be permanently barred from asserting such claim in any action or proceeding.

10.16No Joint Venture or Partnership. Borrowers and Lender intend that the relationship created hereunder be solely that of borrower and lender. Nothing herein is intended to create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between Borrowers and Lender nor to grant Lender any interest in the Collateral other than that of secured party, mortgagee or lender.

10.17Waiver of Marshaling of Assets Defense. To the maximum extent not prohibited by Legal Requirements, Borrowers waives all rights to a marshaling of the assets of Borrowers, and others with interests in Borrowers, (or any of them) and of the Collateral, or to a sale in inverse order of alienation in the event of foreclosure of the interests hereby created, and agrees not to assert any right under any laws pertaining to the marshaling of assets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document whatsoever to defeat, reduce or affect the right of Lender under the Loan Documents to a sale of any Collateral for the collection of the Secured Obligations without any prior or different resort for collection, or the right of Lender to the payment of the Secured Obligations out of the Net Proceeds of the Collateral in preference to every other claimant whatsoever.

10.18Conflict; Documents. In the event of any conflict between the provisions of this Agreement and the provisions of any of the other Loan Documents, the provisions of this Agreement shall prevail. The parties hereto acknowledge that they were represented by counsel in connection with the negotiation and drafting of the Loan Documents and that the Loan Documents shall not be subject to the principle of construing their meaning against the party that drafted same.

10.19Brokers and Financial Advisors. Each Borrower and Lender hereby represents that the representing party has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the Loan, other than KeyBank (“Broker”). Borrowers shall pay the fees and commissions due to Broker pursuant to a separate written agreement. Each Borrower and Lender hereby agrees to indemnify and hold the other harmless from and against any and all claims, liabilities, costs and expenses of any kind in any way relating to or arising from a claim by any Person that such Person acted on behalf of the indemnifying party in connection with the transactions contemplated herein. The provisions of this Section 10.19 shall survive the expiration and termination of this Agreement and the repayment of the Secured Obligations.

10.20Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

10.21Estoppel Certificates. Borrowers hereby agrees at any time and from time to time upon not less than ten (10) days’ prior written notice by Lender to execute, acknowledge and deliver to the party specified in such notice, a statement, in writing, certifying that this Agreement is unmodified and in full force and effect (or if there have been modifications, that the same, as modified, is in full force and effect and stating the modifications hereto), and stating whether or not, to the knowledge of such certifying party, any Default or Event of Default has occurred and is then continuing, and, if so, specifying each such Default or Event of Default.

10.22Payment of Expenses.

10.22.1 Borrowers shall pay all applicable Transaction Costs, which shall include, without limitation, (A) costs and expenses of Lender in connection with (i) the negotiation, preparation, execution and delivery of the Loan Documents, and every amendment, supplement, or modification to the Loan Documents (or any of them) and any other document being prepared in connection herewith or therewith, or in connection with the consummation of the transactions contemplated by this Agreement and the other Loan Documents; (ii) the creation, perfection or protection of Lender’s Liens in the Collateral (including, without limitation, fees and expenses for title and lien searches or amended or replacement mortgages, UCC Financing Statements or Security Documents, survey fees and charges, title insurance premiums and filing and recording taxes, fees and charges, third party due diligence expenses for each Property, including, without limitation, travel expenses, accounting firm fees, costs

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document of the Appraisals, and the fees of appraisers, environmental consultants, engineering consultants and construction consultants, and costs and fees incurred in connection with arranging, setting up, servicing and maintaining the Account Collateral); (iii) the negotiation, preparation, execution and delivery of any amendment, waiver, restructuring or consent relating to any of the Loan Documents; and (iv) the preservation of rights under and enforcement of the Loan Documents, including any communications or discussions relating to any action that Borrowers shall from time to time request Lender to take, as well as any restructuring or rescheduling of the Secured Obligations, (B) the fees, expenses and other charges of counsel to Lender in connection with all of the foregoing, and (C) Lender’s (where deemed reasonably necessary by Lender) reasonable out-of-pocket travel expenses in connection with site visits to each Property.

10.22.2 Borrowers shall pay or reimburse Lender within ten (10) days following demand for all of Lender’s costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the Note, the other Loan Documents and any such other documents, including the reasonable fees and actual disbursements of counsel to Lender, and including costs and expenses incurred in any workout, restructuring or similar arrangements or in connection with any foreclosure, collection or bankruptcy proceedings with respect to any Borrower, any Managing Member or Guarantor.

10.22.3 Any reference in this Agreement to attorneys’ or counsel fees paid or incurred by Lender shall be deemed to include paralegals’ fees and legal assistants’ fees. Moreover, wherever provision is made herein for payment of attorneys’ or counsels’ fees or expenses incurred by Lender, such provision shall include, but not be limited to, such fees or expenses incurred in any and all judicial, bankruptcy, reorganization, administrative, or other proceedings, including appellate proceedings, whether such fees or expenses arise before proceedings are commenced, during such proceedings or after entry of a final judgment.

10.23Time of the Essence. Time is of the essence with regard to the obligations of Borrowers hereunder or under any other Loan Document.

10.24No Third Party Beneficiaries. Nothing in this Agreement or in any of the other Loan Documents shall confer upon any Person, other than the parties hereto and their successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

10.25Reinstatement. This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any amount received by Lender in respect of the Loan is rescinded or must otherwise by restored by Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Borrower or upon the appointment of any intervenor or conservator of, or trustee or similar official for, any Borrower or any substantial part of its properties or assets, or otherwise, all as though such payment had not been made.

10.26Usury Savings Clause. It is expressly stipulated and agreed to be the intent of Borrowers and Lender at all times to comply with the applicable law governing the highest lawful interest rate. If the applicable law is ever judicially interpreted so as to render usurious any amount called for under the Note or under any of the other Loan Documents, or contracted for, charged, taken, reserved or received with respect to the loan evidenced thereby, or if acceleration of the

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document maturity of the Note, any prepayment by Borrowers, or any other circumstance whatsoever, results in Borrowers having paid any interest in excess of that permitted by applicable law, then it is the express intent of Borrowers and Lender that all excess amounts theretofore collected by Lender be credited on the principal balance of the Note (or, at Lender’s option, paid over to Borrowers), and the provisions of the Note and other Loan Documents immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder. The right to accelerate maturity of the Note does not include the right to accelerate any interest which has not otherwise accrued on the date of such acceleration, and Lender does not intend to collect any unearned interest in the event of acceleration. All sums paid or agreed to be paid to Lender for the use, forbearance or detention of the Secured Obligations evidenced hereby or by the Note shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such Secured Obligations until payment in full so that the rate or amount of interest on account of such Secured Obligations does not exceed the maximum rate or amount of interest permitted under applicable law. The term “applicable law” as used herein means, any federal or state law applicable to the loan made by Lender to Borrower evidenced by the Note.

10.27Entire Agreement. This Agreement, together with the other Loan Documents, contains the entire understanding between the parties to the matters addressed herein, and may not be changed, amended, modified or waived except pursuant to a written agreement executed by the parties, and supersedes any other understandings or agreements with respect to the matters covered hereby.

10.28Joint and Several Obligation. (a) Subject to Section 10.31, all Persons comprising Borrowers are jointly and severally liable for all of the Secured Obligations; (b) All representations, warranties, and covenants made by any Borrower shall be deemed representations, warranties, and covenants of each of the Persons comprising Borrowers; and (c) Any breach, default or Event of Default by any of the Persons comprising Borrowers shall be deemed to be a breach, default, or Event of Default of Borrowers.

10.29Successors and Assigns. This Agreement is binding upon and shall inure to the benefit of Borrowers and Borrowers’ successors and assigns, and Lender, and Lender’s successors and assigns. The duties, covenants, conditions, obligations, and warranties of Borrowers in this Agreement shall be joint and several obligations of Borrowers and Borrowers’ successors and assigns. The provisions of this Section 10.29 shall not in any way limit Section 10.9(C).

10.30Subrogation of Lender. Lender shall be subrogated to the lien of any previous encumbrance discharged with funds advanced by Lender under the Loan Documents, regardless of whether such previous encumbrance has been released of record.

10.31Limitation on Liability.

10.31.1 Nothing contained in the Loan Documents shall be deemed to impair or limit Lender’s rights (I) in foreclosure proceedings or in any ancillary proceedings brought to facilitate Lender’s foreclosure on any Property or any portion thereof or to exercise any specific rights or remedies afforded Lender under any other provisions of the Loan Documents

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or by law or in equity, subject to the non-recourse provisions set forth below; (II) to recover under any guaranty given in connection with the Loan; or (III) to pursue any personal liability of Borrowers or Guarantor under the Guaranty or the Environmental Indemnity Agreement. Except as expressly set forth in Section 10.31.2 below, the recourse of Lender with respect to the obligations evidenced by this Agreement, the Note, the Mortgages and the other Loan Documents (except the Guaranty and the Environmental Indemnity Agreement) shall be solely to each Property, Chattel, Personalty and other Collateral. Notwithstanding anything to the contrary contained in this Agreement, the Note, the Mortgages or any other Loan Document, nothing shall be deemed in any way to impair, limit or prejudice the rights of Lender to collect or recover from Borrowers, or Guarantor: (i) damages or costs (including, without limitation, reasonable attorneys’ fees) incurred by Lender as a result of any intentional waste by Borrower; (ii) any condemnation award or insurance proceeds attributable to any Property which were not paid to Lender or used to restore such Property in accordance with the terms of the Loan Agreement; (iii) any Gross Revenue or other similar sums attributable to any Property collected by or for Borrower (x) following an Event of Default under any Loan Document and not properly applied to the reasonable fixed and operating expenses of the Property, including, without limitation, payments due on the Note and other sums due under the Loan Documents, or (y) to the extent not deposited into the Deposit Account; (iv) any security deposits collected by or for Borrower and not applied in accordance with the applicable Leases; (v) the amount of any accrued taxes, assessments, and/or utility charges affecting any Property (whether or not the same have been billed to Borrower) that are either unpaid by Borrower or advanced by Lender under the Loan Agreement or any other Loan Document, except, in respect of any Property, to the extent of any of the foregoing accruing after the Termination Date (as hereinafter defined) with respect to such Property; (vi) any sums expended by Lender in fulfilling the obligations of Borrower, as lessor, under any Lease affecting any Property; (vii) the amount of any loss suffered by Lender (that would otherwise be covered by insurance and available to Lender in accordance with the Loan Documents) as a result of Borrowers’ failure to maintain any insurance required under the terms of any Loan Document; (viii) losses, damages and costs (including, without limitation, reasonable attorneys’ fees) incurred by Lender as a result of any fraud or material misrepresentation by any Borrower in connection with any Property or any of the Loan Documents, (ix) the amount of any losses, damages and costs suffered by Lender as a result of any Borrower’s making any REIT Distributions (as defined in the Cash Collateral Agreement) in accordance with Section 4(a)(ii)(I) of the Cash Collateral Agreement following a REIT Triggering Event (as defined in the Cash Collateral Agreement), provided that such amount shall not exceed the amount of such REIT Distributions made by any Borrower under Section 4(a)(ii)(I) of the Cash Collateral Agreement, which amounts would have been deposited into the Excess Cash Subaccount (as defined in the Cash Collateral Agreement) for application pursuant to the Cash Collateral Agreement if such REIT Distributions were not permitted under Section 4(a)(ii)(I) of the Cash Collateral Agreement, and (x) the amount of any losses, damages and costs (including, without limitation, reasonable attorneys’ fees) suffered by Lender in connection with a failure by Borrower to fully satisfy or to cause to be fully satisfied, as determined by the applicable Governmental Authority, the Cozine Environmental Obligations. For the avoidance of doubt, the matters set forth in this paragraph (a) shall be fully recourse to each Borrower (but not any member, manager, officer, director or any Affiliate of any of the foregoing, with the exclusion of the Guarantor) and Guarantor. For the purposes of this

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 10.31.1, the “Termination Date” is, in respect of any Property, the earliest of (x) the date that Borrower tenders to Lender or Lender's designee a deed-in-lieu of foreclosure in respect of such Property, subject to no title exceptions other than real estate taxes and assessments, the Permitted Exceptions (as defined in the applicable Mortgage) and such additional exceptions approved by Lender pursuant to the Loan Documents or which are otherwise acceptable to Lender in its reasonable discretion, together with such ancillary conveyances, releases and other documentation that are customarily delivered in connection with a deed-in-lieu of foreclosure transaction, all in form reasonably satisfactory to Lender, and such deed- in-lieu of foreclosure is accepted by Lender in its sole discretion (y) the date that Borrower tenders to Lender a stipulation to entry of judgment of foreclosure in respect of such Property, and (z) the date Lender, any Affiliate of Lender, or any other party takes title to such Property in connection with a foreclosure of the applicable Mortgage that encumbers such Property. If Borrower elects to deliver a deed-in-lieu of foreclosure in respect of such Property, Lender shall retain the right to determine whether to accept such deed-in-lieu of foreclosure or to proceed with foreclosure proceedings and, upon Lender making such election, Borrower shall execute and deliver to Lender an appropriate deed-in-lieu of foreclosure in respect of the Property, as Lender shall have elected; provided, however, that if Lender chooses to proceed with foreclosure proceedings in respect of such Property, the Termination Date shall nonetheless be the earliest of the date specified in clause (x), (y) and (z) above, provided further that if Borrower thereafter fails to cooperate with Lender in respect of Lender's exercise of any and all remedies available at law or in equity to Lender (including, without limitation, foreclosure), then the Termination Date shall be the earlier of the date specified in clause (y) or (z) above.

10.31.2 The agreement contained in Section 10.31.1 to limit the personal liability of each Borrower shall become null and void and be of no further force and effect, and Borrowers and Guarantor shall be personally liable for repayment of the Secured Obligations, in the event (A) of any Transfer other than (1) a Permitted Transfer that satisfies all of the Transfer Conditions and (2) any Transfer of the Properties (or any Property) in accordance with the terms and conditions set forth in Section 8.1, Section 8.4 or Section 8.5; (B) of intentional or willful material misrepresentation by any Borrower in connection with the Portfolio, the Loan Documents, or the Loan Application; (C) any Borrower forfeits any Property or other Collateral due to criminal activity; (D) of any attempt, by any Borrower, any Guarantor, any Borrower Owner Person or Borrower Control Person or any other Person directly or indirectly responsible for the management of any Borrower or liable for repayment of Borrowers’ obligations under the Loan Documents (whether as maker, endorser, guarantor, surety, general partner or otherwise), to materially delay any foreclosure against the Portfolio or other Collateral or any other exercise by Lender of its remedies under the Loan Documents, which attempts shall include, without limitation, (i) any claim that any Loan Document is invalid or unenforceable to an extent that would preclude any such foreclosure or other exercise of remedies, (ii) any Borrower filing a petition in bankruptcy, failing to oppose in good faith the entry of an order for relief pursuant to any involuntary bankruptcy petition filed against any Borrower or seeking any reorganization, liquidation, dissolution or similar relief under the bankruptcy laws of the United States or under any other similar federal, state or other statute relating to relief from indebtedness, or consenting to or colluding in the filing of any involuntary bankruptcy petition against any Borrower, or (iii) the appointment (other than by Lender) of a receiver, trustee or liquidator with respect to any Borrower or any Property or

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document any part thereof; (E) of any execution, amendment, modification, assignment or termination of any Lease to any Required Tenant or any execution, or subsequent amendment, modification, assignment or termination of any Lease for any space currently occupied by any Required Tenant, in each case in violation of the terms and provisions of this Loan Agreement and the other Loan Documents.

10.32Appointment of Servicer and Delegation of Lender Responsibilities. Borrower acknowledges and agrees that, at the sole option of Lender, the Loan may be serviced by a Servicer. The retention of Servicer and the delegation of some or all of Lender’s responsibilities to any such Servicer shall not, however, release Lender from any of Lender’s obligations under the Loan Documents. As of the date of this Agreement, Lender has retained M. Robert Goldman & Company, Inc. as Servicer. Borrower shall also be responsible for the payment of all reasonable out-of-pocket costs and expenses incurred by Servicer in connection with the services performed by Servicer in connection with the Loan (including, without limitation, inspections of any Property, casualty and condemnation matters and a matters concerning Defaults and Events of Default) (the disbursement of funds held by or on behalf of Lender in escrow or reserve accounts, inspections of any Property, casualty and condemnation matters and a matters concerning Defaults and Events of Default). Any action taken by Servicer pursuant to this Agreement and the other Loan Documents shall be binding upon Lender to the same extent as if taken by Lender, and Borrower shall be entitled to rely on all actions and directions given by Servicer in respect of the Loan and the Loan Documents unless and until Borrower receives contrary written instructions from Lender.

10.33Acceptance of Cures for Events of Default. Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents (including, without limitation, any reference to the “continuance” of an Event of Default, the “continuation” of an Event of Default or that an Event of Default is “continuing”), Lender shall in no event or under any circumstance be obligated or required to accept a cure by any Borrower, any Guarantor or by any other Person of an Event of Default unless Lender agrees to do so in the exercise of Lender’s sole and absolute discretion, it being agreed that once an Event of Default has occurred and so long as Lender has not determined to accept a cure of such Event of Default in writing, Lender shall be absolutely and unconditionally entitled to pursue all rights and remedies available to it under this Agreement, the Mortgages or the other Loan Documents or otherwise at law or in equity.

10.34Binding Action. Borrowers agree that with respect to any consent, direction, approval or action that is required of Borrowers under this Agreement or any other Loan Document, any consent, direction, approval or action by any Borrower shall be binding on Borrowers and that Lender shall have no obligation to confirm any such consent, direction, approval or action given to it and may act in reliance upon any such consent, direction, approval or action.

10.35Reasonable Standard. Borrowers hereby agree that the sole remedy of Borrowers based upon any claim that an Indemnified Party has acted unreasonably or that an Indemnified Party has unreasonably withheld or unreasonably delayed any action, in each case, to the extent that such Indemnified Party had an obligation, either at law or pursuant to the Loan Documents, to act reasonably, shall be an action for specific performance, injunctive relief or declaratory judgment. Borrowers hereby further agree that the Indemnified Parties shall not be liable for any

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document monetary damages in respect of any such claim and that Borrowers’ sole remedy in respect of any such claim shall be limited to specific performance, injunctive relief or declaratory judgment.

10.36Claims Against Lender. Lender shall not be in default under this Agreement, or under any of the other Loan Documents, unless a written notice specifically setting forth the claim of Borrowers shall have been given to Lender within three (3) months after any Borrowers first had knowledge of the occurrence of the event that Borrowers allege gave rise to such claim and Lender does not remedy or cure the default, if any there be, promptly thereafter. Each Borrower waives any claim, set-off or defense against Lender arising by reason of any alleged default by Lender as to which Borrowers do not give such notice timely as aforesaid. Each Borrower acknowledges that such waiver is or may be essential to Lender’s ability to enforce Lender’s remedies without delay and that such waiver therefore constitutes a substantial part of the bargain between Lender and Borrowers with respect to the Loan.

[Signature page to follow.]

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, by their duly authorized representatives, all as of the day and year first above written.

LENDER:

THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK, a New York corporation

By: AIG Asset Management (U.S.), LLC, a Delaware limited liability company, its investment advisor

By: /s/ Daniel J. Sliwak Name: Daniel J. Sliwak Title: Managing Director

STATE OF )

) ss.:

COUNTY OF )

On the ______day of December in the year 2017 before me, the undersigned, a Notary Public in and for said State, personally appeared, ______, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individuals(s) acted, executed the instrument.

______

(Signature and office of individual taking acknowledgment.)

Notary Public

[Acknowledgment on behalf of Lender]

GWL 201 NEELYTOWN LLC, a Delaware limited liability company

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By:/s/ Paul A. Cooper Name:Paul A. Cooper Title:CEO

STATE OF )

) ss.:

COUNTY OF )

On the ______day of ______in the year 2018 before me, the undersigned, a Notary Public in and for said State, personally appeared, Paul A. Cooper, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

______

(Signature and office of individual taking acknowledgment.)

Notary Public

My Commission Expires:

[Acknowledgment on behalf of GWL 201 Neelytown LLC]

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name:Paul A. Cooper Title:CEO

STATE OF )

) ss.:

COUNTY OF )

______

(Signature and office of individual taking acknowledgment.)

Notary Public

My Commission Expires:

[Acknowledgment on behalf of GWL 300 McIntire LLC]

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name:Paul A. Cooper Title:CEO

STATE OF )

) ss.:

COUNTY OF )

______

(Signature and office of individual taking acknowledgment.)

Notary Public

My Commission Expires:

[Acknowledgment on behalf of GWL 1938 Olney LLC]

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name:Paul A. Cooper Title:CEO

STATE OF )

) ss.:

COUNTY OF )

______

(Signature and office of individual taking acknowledgment.)

Notary Public

My Commission Expires:

[Acknowledgment on behalf of Cozine Borrower]

BORROWERS’ ORGANIZATIONAL CHART

Exhibit A-1 Error! Unknown document property name.

WIRE INSTRUCTIONS OF LENDER

AIG MORTGAGE LIQUIDITY POOL ACCOUNTS

The United States Life Insurance Company in the City of New York

Wiring Instructions: JPM Chase, NY

ABA # ###-###-###

AIG Liquidity Pool/USL - MTG

A/C # ### ### ###

Ref: FFC L22676-2

Notify: AIG Treasury - [email protected]

[email protected]

Bank Address: JPMorgan Chase Bank

875 Saw Mill River Road

Ardsley, NY 10502-1199

Contact: Jonelle Robinson, [email protected]

Exhibit B-1

LAND DESCRIPTIONS

201 NEELYTOWN

LEGAL DESCRIPTION

All that certain plot, piece, or parcel of land situate in the Town of Montgomery, County of Orange, State of New York, said lands being more particularly bounded and described as follows:

BEGINNING at a point marked by an iron rod lying on the westerly line of County Road No. 99 (Neelytown Road), said point being the southeasterly corner of lands herein described and the northeasterly corner of lands now or formerly Mid Hudson Industrial Park, LLC and Supreme;

THENCE running along a portion of the northeasterly line of lands of said Mid Hudson Industrial Park, LLC and Supreme being the southwesterly line of lands herein described,

(1) North 52 degrees, 44’ 45” West, as per Liber 14295 of Deeds at Page 1526, a distance of 2,007.69 feet, to an iron rod being the westerly corner of lands herein described and the southerly corner of lands now or formerly Armentano;

THENCE running along the southeasterly line of lands of said Armentano, being the northwesterly line of lands herein described,

(2) North 36 degrees, 32’ 18” East, a distance of 1,106.31 feet, to an iron rod being the northerly corner of lands herein described and lying on the southwesterly line of lands now or formerly GPT Montgomery Owner, LLC;

THENCE running along a portion of the southwesterly line of lands of said GPT Montgomery Owner, LLC, being the northeasterly line of lands herein described on the following five (5) courses and distances:

(3)South 50 degrees, 07’ 16” East, a distance of 69.31 feet;

(4) South 54 degrees, 30’ 56” East, a distance of 106.93 feet

(5) South 53 degrees, 17’ 46” East, a distance of 219.43 feet;

(6) South 50 degrees, 49’ 51” East, a distance of 183.83 feet; and

(7) South 53 degrees, 02’ 46” East, a distance of 844.60 feet, to an iron rod being the southeasterly corner of lands of said GPT Montgomery Owner, LLC, the northeasterly

Exhibit C-1

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document corner of lands herein described and lying on the westerly line of County Road No. 99 (Neelytown Road);

THENCE running along the westerly line of said Neelytown Road, being the easterly line of lands herein described on the following six (6) courses and distances:

(8) South 12 degrees, 06’ 39” West, a distance of 57.87 feet, to a concrete monument;

(9) South 07 degrees, 52’ 40” West, a distance of 650.17 feet;

(10)South 09 degrees, 12’ 00” West, a distance of 200.00 feet;

(11)South 00 degrees, 40’ 10” West, a distance of 101.12 feet;

(12)South 11 degrees, 06’ 30” West, a distance of 150.08 feet; and

(13) South 17 degrees, 48’ 20” West, a distance of 101.14 feet, to the point or place of BEGINNING.

As prepared by Lanc & Tully Engineering and Surveying on December 7, 2017.

300 MCINTIRE

LEGAL DESCRIPTION

ALL that certain piece or tract of land situate in the City of Newark, New Castle County, Delaware being Lot 4A according to the Administrative Subdivision Plan for Lots 1, 2, 3, 4A & road R/W, Newark Interstate Business Park as prepared by Clarence W. Hazel, P.E. and recorded in the Recorder of Deeds in and for New Castle County on Instrument No. 20030423-0048726, and subsequently shown as Lot 4 on the Construction Improvement Plans of Lot 4, Newark Interstate Business Park, as prepared by Apex Engineering Incorporated and recorded in the Recorder of Deeds in and for New Castle County on Instrument No. 20030708-0080803, as per a more recent survey prepared by KCI Technologies, Inc., and more particularly described as follows to wit:

BEGINNING at the southwesterly fillet joining the southerly side of an unnamed public road (50 feet wide) and the Easterly side of McIntire Drive (60 feet wide).

Thence, from said point of beginning, the following ten courses and distances:

1. With the fillet joining the Southerly side of an unnamed Road (50 feet wide; and the Easterly side of McIntire Drive (60 feet wide), North 41 degrees, 30 minutes, 49 seconds East, 30.48 feet to a point on the Southerly side of the aforesaid unnamed road, thence, with same;

2. North 81 degrees, 52 minutes, 52 seconds East, 374.48 feet to a point in line of The Greene at Twin Lakes Subdivision Instrument Number 201012160068325, thence, with same the next two courses and distances;

Exhibit C-2

4. South 00 degrees, 05 minutes, 25 seconds East, 236.82 feet to a point in line of lands now or formerly of Penn Central Railroad, thence, with same

5. South 42 degrees, 00 minutes, 00 seconds West, 795.36 feet to a corner for lot 3, thence, with same

6. North 48 degrees, 00 minutes, 00 seconds West, 318.53 feet to a point on the cul-de-sac at the end of McIntire Drive, thence, with same

7. By an arc curving to the left having a radius of 60.00 feet, an arc distance of 91.92 feet (chord= North 17 degrees, 48 minutes, 32 seconds East, 83.19 feet) to a point of reverse curvature for the return curve of said cul-de-sac, thence, with same;

8. By an arc curving to the right having a radius of 25.00 feet, an arc distance of 26.66 feet (chord = North 04 degrees, 27 minutes, 55 seconds East, 25.41 feet) to a point of reverse curvature on the Easterly side of McIntire Drive (60 feet wide), thence with same the next two courses and distances;

9. By an arc curving to the left having a radius of 330.00 feet, an arc distance of 195.05 feet (chord = North 18 degrees, 04 minutes, 43 seconds East, 192.22 feet) to a point of tangency, thence;

10. North 01 degrees, 08 minutes, 45 seconds East, 517.66 feet to the point of beginning.

Together with the rights and benefits running to the Parcel pursuant to that certain Cross-Easements and Maintenance Declaration recorded June 22, 2012 in the Recorder of Deeds in and for New Castle County, Delaware on instrument no. 20120622-0034947.

Previously described as follows:

ALL that certain piece, parcel or tract of land situate in the City of Newark, New Castle County, Delaware, being known as Parcel 4A, as per the Record Major Subdivision Plan of Newark Interstate Business Park, recorded on June 15, 1999 in the Office of the Recorder of Deeds in and for New Castle County, Delaware, Microfilm No. 13888, and more particularly bounded and described as follows, to wit:

BEGINNING at a point on the easterly side of Mclntire Drive (60 feet wide), said point being the southwesterly end of the fillet joining the southerly side of an unnamed public right of way (50 feet wide) and the easterly side of Mclntire Drive (60 feet wide) and a corner for lands herein being described and located the following four courses and distances from the southerly end of the fillet joining the southeasterly side of Elkton Road Delaware Route 2 (width unknown) and the northeasterly side of Mclntire Drive (60 feet wide):

Exhibit C-3

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 1) South 00 degrees, 45 minutes, 19 seconds East, 21.21 feet, to a point of curvature;

2) By the arc of a curve to the right having a radius of 536.00 feet and an arc distance of 95.31 feet to a point of compound curvature; 3) By the arc of a curve to the right having a radius of 492.03 feet and an arc distance of 260.07 feet to a point of tangency; 4) South 01 degrees, 08 minutes, 45 seconds West, 186.67 feet to the point of Beginning. Thence, from said Point of Beginning, the following seven courses and distances: 1) with the fillet joining the southerly side of an unnamed public right of way (50 feet wide) and the easterly side of Mclntire Drive (60 feet wide), north 41 degrees, 30 minutes, 49 seconds East, 30.48 feet to a point on the southerly side of the aforesaid unnamed public right of way, thence, with same; 2) North 81 degrees, 52 minutes, 52 seconds East, 374.48 feet to a point in line of lands now or formerly of Raymond T. Edwards; thence with same; 3) South 46 degrees, 30 minutes, 45 seconds East, 386.21 feet to a point in line of lands now or formerly of Elsie V. Edwards Trust Estate, thence, with same; 4) South 00 degrees, 05 minutes, 25 seconds East, 236.82 feet to a point in line of lands now or formerly of Consolidated Rail Corporation, thence, with same; 5) South 42 degrees, 00 minutes, 00 seconds West, 469.26 feet to a corner for Lot 3, thence, with same; 6) North 48 degrees, 00 minutes, 00 seconds West, 493.07 feet to a point on the easterly side of Mclntire Drive (60 feet wide), thence, with same; 7) North 01 degrees, 08 minutes, 45 seconds East, 445.79 feet to the point of Beginning.

Also being previously described as follows:

All that certain piece, parcel or tract of land situate in the City of Newark, New Castle County, Delaware being the portion of lot 3 to be conveyed to lot 4A according to the Corrective Administrative Subdivision Plan of Lots 1, 2, 3, 4A & Road R/W, Newark Interstate Business Park as prepared by Clarence W. Hazel, P.E., dated March 24, 2003, last revised April 17, 2003, as recorded in the Recorder of Deeds in and for New Castle County on Instrument No. 2003 0423-0048726, and more particularly described as follows to wit: Beginning at a point on the Easterly side of Mclntire Drive (60 feet wide), said point being a common corner for lot 3, lot 4A, and lands herein being described and located the following three courses and distances from the Southerly end of the fillet joining the Southeasterly side of Elkton Road Delaware Route 2 (width unknown) and the Northeasterly side of Mclntire Drive

Exhibit C-4

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (60 feet wide): 1) By an arc curving to the right having a radius of 536.00 feet, an arc distance of 95.31 feet to a point of compound curvature, thence; 2) By an arc curving to the right having a radius of 492.03 feet, an arc distance of 260.07 feet to a point of tangency, thence; 3) South 01 degrees, 08 minutes, 45 seconds West, 632.47 feet to the Point of Beginning. Thence, from said Point of Beginning, the following seven courses and distances: 1. With lot 4A, South 48 degrees, 00 minutes, 00 seconds East, 493.07 feet to a point in line of lands now or formerly of Consolidated Rail Corporation, thence, with same; 2. South 42 degrees, 00 minutes, 00 seconds West, 326.11 feet to a corner for lot 3, thence, with same; 3. North 48 degrees, 00 minutes, 00 seconds West, 318.53 feet to a point on the realigned cul-de-sac at the end of Mclntire Drive, thence, with same; 4. By an arc curving to the left having a radius of 60.00 feet, an arc distance of 91.92 feet (chord = North 17 degrees, 48 minutes, 32 seconds East, 83.19 feet) to a point of reverse curvature for the return curve of said cul- de-sac, thence, with same; 5. By an arc curving to the right having a radius of 25.00 feet, an arc distance of 26.66 feet (chord North 04 degrees, 27 minutes, 55 seconds East, 25.41 feet) to a point of reverse curvature on the Easterly side of Mclntire Drive (60 feet wide), thence, with same the next two courses and distances; 6. By an arc curving to the left having a radius of 330.00 feet, an arc distance of 195.05 feet (chord = North 18 degrees, 04 minutes, 43 seconds East, 192.22 feet) to a point of tangency, thence; 7. North 01 degrees, 08 minutes, 45 seconds East, 71.87 feet to the Point of Beginning.

1938 OLNEY LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE TOWNSHIP OF CHERRY HILL, COUNTY OF CAMDEN, AND STATE OF NEW JERSEY, AND IS DESCRIBED AS FOLLOWS: BEGINNING at an iron pin set in the Westerly line of Olney Avenue (50 foot wide), said point being North 06 degrees 06 minutes 24 seconds East a distance of 527.75 feet from the Northeasterly corner to Lot 1, Block 486.01 on the Township of Cherry Hill Tax Maps, and running; thence

(1) North 83 degrees 53 minutes 36 seconds West a distance of 227.74 feet to a point; thence

Exhibit C-5

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (2) South 06 degrees 06 minutes 24 seconds West a distance of 2.68 feet to a point; thence

(3) North 83 degrees 53 minutes 36 seconds West a distance of 262.26 feet to a point; thence

(4) North 06 degrees 06 minutes 24 seconds East a distance of 378.76 feet to an iron pin set; thence

(5) North 25 degrees 52 minutes 04 seconds East a distance of 309.39 feet to an iron pin set; thence

(6) South 83 degrees 53 minutes 36 seconds East a distance of 385.40 feet to an iron pin set in the Westerly line of Olney Avenue; thence

(7) Along said Westerly line, South 06 degrees 06 minutes 24 seconds West a distance of 667.25 feet to the point and place of Beginning.

Together with the beneficial easement rights as set forth in the Declaration of Protective Covenants and Restrictions, recorded July 2, 2001, in Deed Book 5165 Page 286; modified by Modification of Declaration of Protective Covenants and Restrictions, recorded July 17, 2002, in Deed Book 5239 Page 541; and by Joinder in Declaration of Protective Covenants and Restrictions, recorded July 17, 2002, in Deed Book 5239 Page 594. BEING ALSO KNOWN AS (REPORTED FOR INFORMATIONAL PURPOSES ONLY): Block 490.01, Lot 1 on the official tax map of the Township of Cherry Hill, County of Camden, State of New Jersey 1938 Olney Avenue, Cherry Hill, NJ

606 COZINE

LEGAL DESCRIPTION

ALL that certain plot, piece or parcel of land, situate, lying and being in the Borough of Brooklyn, County of Kings, City and State of New York, bounded and described as follows:

BEGINNING at the corner formed by the intersection of the southerly side of Cozine Avenue (70' wide (80’ wide per survey)) and the easterly side of Montauk Avenue (60' wide);

RUNNING THENCE southerly along the easterly side of Montauk Avenue 251';

THENCE easterly on a line forming an interior angle of 97° 0 min. 09 seconds with the said easterly side of Montauk Avenue, 201' 6-1/8" to the westerly side of Milford Street (60 ' wide).

THENCE northerly along the westerly side of Milford Street 275' 7-1/2" to the corner formed by the intersection of said westerly side of Milford Street and said southerly side of Cozine Avenue;

THENCE westerly along the said southerly side of Cozine Avenue 200' to the corner or point or place of BEGINNING.

Exhibit C-6

Exhibit C-7

LIST OF BORROWER ENTITIES

1. GWL 201 NEELYTOWN LLC, a Delaware limited liability company (the “Neelytown Borrower”).

2. GWL 300 MCINTIRE LLC, a Delaware limited liability company (the “McIntire Borrower”).

3. GWL 1938 OLNEY LLC, a Delaware limited liability company (the “Olney Borrower”).

4. GWL 606 COZINE LLC, a Delaware limited liability company (the “Cozine Borrower”; and together with Neelytown Borrower, McIntire Borrower and Olney Borrower, each a “Borrower”, and collectively “Borrowers”).

Schedule A-1

ALLOCATED LOAN AMOUNT

201 Neelytown Road Montgomery New York 12549 $19,750,000.00 301 McIntire Drive Newark Delaware 19711 $9,500,000.00 1938 Olney Avenue Cherry Hill New Jersey 08003 $4,000,000.00 606 Cozine Avenue Brooklyn New York 11208 $5,750,000.00

Schedule 1.1(1)-1

PORTFOLIO

1. 201 Neelytown Road, Montgomery, New York 12549 (the “Neelytown Property”).

2. 301 McIntire Drive, Newark, Delaware 19711 (the “McIntire Property”).

3. 1938 Olney Avenue, Cherry Hill, New Jersey 08003 (the “Olney Property”).

4. 606 Cozine Avenue, Brooklyn, New York 11208 (the “Cozine Property”).

Schedule 1.1(2)-1

LIST OF REQUIRED TENANTS

(1) FedEx Ground Package System, Inc., a Delaware corporation

(2) The City of New York Department of Citywide Administrative Services

(3) Sovereign Distributors, Inc., a New Jersey corporation, t/a Avalon Flooring

(4) Valassis Direct Mail, Inc., a Delaware corporation

Schedule 1.1(3)-1

LITIGATION

• Roger Bozza et al v. 612 Wortman Avenue, LLC et al • Kharindia Stanback v. Aqua Duck Flea Market, LLC et al • Belinda Williams v. WU/LH 100-110 Midland L.L.C. et al

Schedule 4.1.6-1

ZONING DISTRICTS

1. Neelytown Property: “ID” Interchange Commercial and Industry 2. McIntire Property: “MI” General Industrial 3. Olney Property: “IR-RB” Industrial Restricted – Restricted Business Overlay Zone 4. Cozine Property: “M1-1” Light Manufacturing within Brooklyn Community District 5

Schedule 4.2.17-1

COZINE ENVIRONMENTAL OBLIGATIONS

Schedule 5.1.31-1

PROMISSORY NOTE (USL)

$39,000,000.00 December 20, 2017

FOR VALUE RECEIVED, the parties set forth on Schedule I attached hereto, each having an address at c/o GTJ REIT INC., 60 Hempstead Avenue, Suite 718, West Hempstead, New York, 11552 (collectively, “Maker”), hereby jointly and severally promise to pay to the order of THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK, a New York corporation (together with each subsequent holder hereof, individually or collectively as the case may be, “Holder”), having an address at c/o AIG Investments, 777 S. Figueroa Street, 16th Floor, Los Angeles, California 90017-5800, or at such other address as may be designated from time to time hereafter by Holder, the principal sum of THIRTY-NINE MILLION AND 00/100 DOLLARS ($39,000,000.00), together with interest on the principal balance outstanding from time to time, as hereinafter provided, in lawful money of the United States of America in accordance with this Promissory Note (USL) (this “Note”) and the other Loan Documents (as defined below).

By its execution and delivery of this Note, Maker covenants and agrees as follows:

1. Interest Rate and Payments.

(a) The balance of principal outstanding from time to time under this Note shall bear interest at the rate of three and eighty-two hundredths percent (3.82%) per annum (the “Original Interest Rate”), computed on the basis of a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each; however, interest for partial months shall be calculated by multiplying the principal balance of this Note by the applicable interest rate (i.e., the Original Interest Rate or the New Rate (hereinafter defined)), dividing the product by three hundred sixty (360), and multiplying that result by the actual number of days elapsed.

(b) Interest only on this Note shall be payable on the date hereof, in advance, for the period from and including the date hereof through and including December 31, 2017 (the “Stub Interest Period”).

(c) Commencing on February 1, 2018, and on the first day of each month thereafter through and including December 1, 2027, payments of interest only on the outstanding principal balance of this Note shall be payable in arrears.

(d) The entire outstanding principal balance, and all other amounts due under this Note and the other Loan Documents, together with all accrued and unpaid interest thereon, shall be due and payable in full on January 1, 2028 (the “Maturity Date”).

2. Holder’s Extension Option; Net Operating Income. The provisions of this Section 2 concern the election of Holder to extend the term of the loan evidenced by this

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Note (the “Loan”) for the Extension Term (as defined below) and certain obligations of Maker during the Extension Term.

(a) If Maker shall fail to pay the outstanding principal balance of this Note and all accrued interest and other charges due hereon and all other amounts due under the Loan Documents, on or prior to the Maturity Date, Holder shall have the right, at Holder’s sole option and in Holder’s sole discretion, to extend the term of the Loan for an additional period of five (5) years (the “Extension Term”) and require Maker to make additional monthly payments of Net Operating Income (as hereinafter defined). If Holder elects to extend the term of the Loan pursuant to this Section 2, Maker shall pay all fees of Holder incurred in connection with such extension, including, but not limited to, attorneys’ fees and title insurance premiums. Maker shall execute all documents reasonably requested by Holder to evidence and secure the Loan, as extended, and shall obtain and provide to Holder any title insurance policy or endorsement to Holder’s title insurance policy requested by Holder. If Holder elects to extend the term of the Loan for the Extension Term, no “Event of Default” shall be deemed to exist solely by reason of the failure by Maker to pay the then-outstanding principal balance of the Loan, and all other amounts due under this Note and the other Loan Documents, together with all accrued and unpaid interest thereon, on the Maturity Date.

(b) Should Holder elect to extend the term of the Loan as provided above, Holder shall: (i) reset the interest rate borne by the then-outstanding principal balance of the Loan to a rate per annum (the “New Rate”) equal to the greater of (A) the Original Interest Rate, or (B) Holder’s (or comparable lenders’, if Holder is no longer making such loans) then-prevailing interest rate for five (5) year loans secured by properties similar to the Property (as hereinafter defined), as determined by Holder in its sole discretion; (ii) re-amortize the then-outstanding principal balance of the Loan over the then- remaining portion of the Extension Term (the “Amortization Period”), as if such Amortization Period were based on a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each; (iii) have the right to require Maker to enter into modifications of the non-economic terms of the Loan Documents as Holder may request (the “Non-Economic Modifications”); and (iv) notwithstanding any provision set forth in the Loan Documents to the contrary, have the right to require Maker to make monthly payments into escrow for insurance premiums and real property taxes, assessments and similar governmental charges. Hence, monthly interest payments payable under this Note during the Extension Term shall be based upon the New Rate, in an amount that would be sufficient to fully amortize the outstanding principal balance of the Loan over the Amortization Period.

(c) If Holder elects to extend the term of the Loan as provided in this Section 2, Holder shall advise Maker of the New Rate on or prior to the Maturity Date.

(d) In addition to the required monthly payments of principal and interest set forth above, commencing on the first day of the second month following the Maturity Date and continuing on the first day of each month thereafter during the Extension Term (each an “Additional Payment Date”), Maker shall make monthly payments to Holder in an amount equal to all Net Operating Income (hereinafter defined) attributable to the Property for the calendar month ending on the last day of the month that is two (2) months preceding each such Additional Payment Date. For example, assuming the Maturity Date is January 1, then Net Operating Income for the period from January 1 through January 31 shall be payable to Holder on March 1; Net Operating Income for the period from February 1 through February 28 shall be payable to Holder on April 1, and so on.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (e) All such Net Operating Income received from Maker shall be held by, and in the possession of, Holder or Holder’s servicer, and shall be deposited into an account or accounts maintained at a financial institution chosen by Holder or Holder’s servicer in its sole discretion (the “Deposit Account”) and all such funds shall be invested in a manner acceptable to Holder in its sole discretion. All interest, dividends and earnings credited to the Deposit Account shall be held and applied in accordance with the terms hereof.

(f) On the third Additional Payment Date and on each third Additional Payment Date thereafter, Holder shall apply all Excess Funds (hereinafter defined), if any, (i) first, to the payment of any past-due amounts under this Note or any other Loan Documents, and (ii) then, to the prepayment of any amounts due under this Note and the other Loan Documents in such order and manner as determined by Holder, without premium or penalty.

(g) As security for the repayment of the Loan and the performance of all other obligations of Maker under the Loan Documents, Maker hereby assigns, pledges, conveys, delivers, transfers and grants to Holder a first priority security interest in and to: (i) all of Maker’s right, title and interest in and to the Deposit Account; (ii) all rights to payment from the Deposit Account and the money deposited therein or credited thereto (whether then due or in the future due and whether then or in the future on deposit); (iii) all interest thereon; (iv) any certificates, instruments and securities, if any, representing the Deposit Account; (v) all claims, demands, general intangibles, choses in action and other rights or interests of Maker in respect of the Deposit Account; (vi) any monies then or at any time thereafter deposited therein; and (vii) any increases, renewals, extensions, substitutions and replacements thereof and all proceeds of the foregoing.

(h) From time to time, but not more frequently than monthly, Maker may request a disbursement (a “Disbursement”) from the Deposit Account for capital expenses, furniture, fixtures and equipment, tenant improvement expenses, leasing commissions and special contingency expenses. Holder may consent to or deny any such Disbursement in its sole discretion.

(i) During the existence of an Event of Default (hereinafter defined), (i) Maker shall not be entitled to any further Disbursement from the Deposit Account and (ii) Holder shall be entitled to take immediate possession and control of the Deposit Account (and all funds contained therein) and to pursue all of its rights and remedies available to Holder under the Loan Documents, at law and in equity.

(j) All of the terms and conditions of the Loan Documents shall apply during the Extension Term, except as expressly set forth above, and except that no further extensions of the Loan shall be permitted.

(k) For the purposes of the foregoing:

(i) “Excess Funds” shall mean, on any Additional Payment Date, the amount of funds then existing in the Deposit Account (including any Net Operating Income due on the applicable Additional Payment Date), less an amount equal to the sum of three regularly scheduled payments of principal and interest due on this Note and the other Loan Documents;

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii) “Net Operating Income” shall mean, for any particular period of time, Gross Revenue for the relevant period, less Operating Expenses for the relevant period; provided, however, that if such amount is equal to or less than zero (0), Net Operating Income shall equal zero (0);

(iii) “Gross Revenue” shall have the definition as set forth in the that certain Loan Agreement, of even date herewith, by and between Maker and Holder (as the same may be amended, restated, modified and/or supplemented from time to time, the “Loan Agreement”); and

(iv) “Operating Expenses” shall mean the sum of all ordinary and necessary operating expenses actually paid by Maker in connection with the operation of the Property during the relevant period for which the calculation of Operating Expenses is being made, including, but not limited to, (a) payments made by Maker for taxes and insurance required under the Loan Documents, and (b) monthly debt service payments as required under this Note and the other Loan Documents.

3. Budgets During Extension Term.

(a) Within fifteen (15) Business Days (as defined below) following the Maturity Date and on or before December 1 of each subsequent calendar year, Maker shall deliver to Holder a proposed revenue and expense budget for the Property for the remainder of the calendar year in which the Maturity Date occurs or the immediately succeeding calendar year (as applicable). Such budget shall set forth Maker’s projection of Gross Revenue and Operating Expenses for the applicable calendar year, which shall be subject to Holder’s reasonable approval. Once a proposed budget has been reviewed and approved by Holder, and Maker has made all revisions requested by Holder, if any, the revised budget shall be delivered to Holder and shall thereafter become the budget for the Property hereunder (any such budget referred to as the “Budget”) for the applicable calendar year. If Maker and Holder are unable to agree upon a Budget for any calendar year, the budgeted Operating Expenses (excluding extraordinary items) provided in the Budget for the Property for the preceding calendar year shall be considered the Budget for the Property for the subject calendar year until Maker and Holder agree upon a new Budget for such calendar year.

(b) During the Extension Term, Maker shall operate the Property in accordance with the applicable Budget for the applicable calendar year, and the total of expenditures relating to the Property exceeding one hundred and five percent (105%) of the aggregate of such expenses set forth in the applicable Budget for the applicable time period shall not be treated as Operating Expenses for the purposes of calculating “Net Operating Income,” without the prior written consent of Holder except for emergency expenditures that, in Maker’s good faith judgment, are reasonably necessary to protect, or avoid immediate danger to, life or property.

4. Reports During Extension Term.

(a) During the Extension Term, Maker shall deliver to Holder all financial statements reasonably required by Holder to calculate Net Operating Income, including, without limitation, a monthly statement to be delivered to Holder concurrently with Maker’s payment of Net Operating Income that sets forth the amount of Net Operating Income

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document accompanying such statement and Maker’s calculation of Net Operating Income for the relevant calendar month. Such statements shall be certified by an executive officer of Maker or Maker’s manager, managing member or general partner (as applicable) as having been prepared in accordance with the terms hereof and to be true, accurate and complete in all material respects.

(b) In addition, on or before April 1 of each calendar year during the Extension Term, Maker shall submit to Holder an annual income and expense statement for the Property that shall include the calculation of Gross Revenue, Operating Expenses and Net Operating Income for the preceding calendar year and shall be accompanied by Maker’s reconciliation of any difference between the actual aggregate amount of the Net Operating Income for such calendar year and the aggregate amount of Net Operating Income for such calendar year actually remitted to Holder. All such statements shall be certified by an executive officer of Maker or Maker’s manager, managing member or general partner (as applicable) as having been prepared in accordance with the terms hereof and to be true, accurate and complete in all material respects. If any such annual financial statement discloses any inconsistency between the calculation of Net Operating Income and the amount of Net Operating Income actually remitted to Holder, Maker shall, within ten (10) days following receipt by Maker of such annual financial statements, remit to Holder the amount of any underpayment of Net Operating Income for such calendar year or, in the event of an overpayment by Maker (as confirmed in writing by Holder), the amount of such overpayment may be withheld from the immediately subsequent payment of Net Operating Income required hereunder.

(c) Holder may notify Maker within ninety (90) days after receipt of any annual statement or report required under Section 4(b) of this Note that Holder disputes any computation or item contained in any portion of such statement or report. If Holder so notifies Maker, Holder and Maker shall meet in good faith within twenty (20) days after Holder’s notice to Maker to resolve such disputed items. If, despite such good faith efforts, the parties are unable to resolve the dispute at such meeting or within ten (10) days thereafter, the items shall be resolved by an independent certified public accountant designated by Holder within fifteen (15) days after the end of such ten (10) day period. The determination of such accountant shall be final. All fees of such accountant shall be paid by Maker. Maker shall remit to Holder any additional amount of Net Operating Income found to be due for such periods within ten (10) days after the resolution of such dispute by the parties or the accountant’s determination, as applicable. The amount of any overpayment found to have been made for such periods may be withheld from the immediately subsequent payment of Net Operating Income required hereunder.

(d) Maker shall at all times keep and maintain full and accurate books of account and records adequate to reflect correctly all items required in order to calculate Gross Revenue, Operating Expenses and Net Operating Income.

5. Prepayment

(a) Maker shall have no right to prepay all or any part of this Note before the date that is sixty (60) calendar months from and after the first day immediately following the Stub Interest Period (the “Lockout Expiration Date”).

(b) At any time on or after the Lockout Expiration Date (but subject to clause (i), clause (ii) and clause (iii) of this Section 5(b)), Maker shall have the right to prepay the full then-outstanding principal amount of the Loan, and all other amounts due under

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document this Note and the other Loan Documents, and all accrued but unpaid interest thereon as of the date of prepayment, provided that (i) Maker gives not less than thirty (30) days’ prior written notice to Holder of Maker’s election to prepay this Note, (ii) Maker pays a prepayment premium to Holder equal to the greater of (A) one percent (1%) of the then-outstanding principal amount of the Loan or (B) the Present Value of this Note (hereinafter defined) (less the amount of principal being prepaid calculated as of the prepayment date), and (iii) Maker simultaneously prepays all other amounts (together with all accrued and unpaid interest thereon) outstanding under the other Loan Documents. Any notice of prepayment delivered by Maker to Holder under this Section 5 may be revoked by delivery of written notice to Holder of such revocation at least ten (10) Business Days (as defined below) prior to the date of such prepayment.

(c) Notwithstanding the provisions of this Section 5, no prepayment premium shall be due in connection with (i) any involuntary prepayment due to the application by Holder of any insurance proceeds or condemnation awards to the principal balance of the Loan, provided, that no Default or Event of Default has occurred or is continuing at the time of such application of insurance proceeds or condemnation awards, or (ii) a prepayment that is made during the ninety (90) day period immediately preceding the Maturity Date.

(d) Holder shall notify Maker in writing of the amount and basis of determination of the prepayment premium. Holder shall not be obligated to accept any prepayment of the principal balance of this Note unless such prepayment is accompanied by (i) the applicable prepayment premium, if any, (ii) the entire outstanding principal balance of the Loan and (iii) all accrued and unpaid interest and all other amounts due under this Note and the other Loan Documents. Maker may not prepay the Loan on a Friday, on any day that is not a Business Day or on any day preceding a public holiday, or the equivalent for banks generally under the laws of the State of New York.

(e) In no event shall Maker be permitted to make any partial prepayments of this Note, except for (i) making payments of Net Operating Income during the Extension Term as required above, (ii) the application of insurance proceeds or condemnation awards to the principal balance of this Note, as provided herein and in the Loan Agreement, and (iii) in connection with payment to Holder of any Release Amount (as such term is defined in the Loan Agreement) in respect of the Released Property (as such term is defined in the Loan Agreement) pursuant to and in accordance with Section 8.4 of the Loan Agreement.

(f) If Holder accelerates this Note for any reason, then in addition to Maker’s obligation to pay the then-outstanding principal balance of the Loan, all accrued but unpaid interest thereon and any other amounts due hereunder and under the other Loan Documents, Maker shall pay to Holder an additional amount equal to the prepayment premium that would be due to Holder if Maker were voluntarily prepaying this Note at the time that such acceleration occurred, or if under the terms hereof no voluntary prepayment would be permissible on the date of such acceleration, Maker shall pay a prepayment premium equal to 150% of the highest prepayment premium set forth in this Note, calculated as of the date of such acceleration as if prepayment were permitted on such date.

(g) For the purposes of the foregoing:

(i) The “Present Value of this Note” with respect to any prepayment of this Note, as of any date, shall be determined by discounting all

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document scheduled payments of principal and interest remaining to the Maturity Date, attributed to the amount being prepaid, at the Discount Rate. If prepayment occurs on a date other than a regularly scheduled payment date (each, a “Payment Date”), the actual number of days remaining from the prepayment date to the next Payment Date will be used to calculate such discount within such period;

(ii) The “Discount Rate” is the rate which, when compounded monthly, is equivalent to the Treasury Rate, when compounded semi- annually;

(iii) The “Treasury Rate” is the semi-annual yield on the Treasury Constant Maturity Series with maturity equal to the remaining weighted average life of this Note, for the week prior to the prepayment date, as reported in Federal Reserve Statistical Release H. 15 - Selected Interest Rates, conclusively determined by Holder on the prepayment date, plus twenty-five (25) basis points. The rate will be determined by linear interpolation between the yields reported in Release H.15, if necessary. In the event Release H.15 is no longer published, Holder shall select a comparable publication to determine the Treasury Rate.

(h) Holder shall not be obligated to actually reinvest the amount prepaid in any treasury obligations as a condition precedent to receiving any prepayment premium or for any other reason.

(i) Notwithstanding the foregoing, at any time during the Extension Term, Maker shall have the right to prepay the full then-outstanding principal amount of the Loan, and all other amounts due under this Note and the other Loan Documents, and all accrued but unpaid interest thereon as of the date of prepayment, without prepayment premium thereon.

6. Payments. Whenever any payment to be made under this Note shall be stated to be due on any day that is not a Business Day (as such term is defined in the Loan Agreement), such payment may be made on the next succeeding Business Day.

7. Default Rate.

(a) The entire outstanding balance of principal, interest, and any other amount due under this Note and the other Loan Documents that are not paid when due (including, without limitation, the payment of the outstanding principal balance of this Note upon the Maturity Date), by acceleration or otherwise, shall bear interest from the date due until the date so paid at an interest rate equal to the greatest of (i) eighteen percent (18%) per annum or (ii) a per annum rate equal to four percent (4%) over the prime rate published in The Wall Street Journal on the first Business Day of each month or (iii) a per annum rate equal to five percent (5%) over the Original Interest Rate (such interest rate, the “Default Rate”); provided, however, that such rate shall not exceed the maximum permitted by applicable state or federal law. In the event The Wall Street Journal is no longer published or no longer publishes such prime rate, Holder shall select a comparable reference.

(b) If any payment under this Note is not made when due, interest shall accrue on the entire outstanding principal balance of the Loan at the Default Rate

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document from the date such payment was due until payment is actually made. If any Event of Default shall occur, then during the continuance of such Event of Default, interest shall accrue on the then-outstanding principal balance of the Loan at the Default Rate.

8. Late Charges. (a) In addition to interest as set forth herein, Maker shall pay to Holder a late charge equal to four percent (4%) of any amounts due under this Note in the event that any such amount is not paid when due, except for the outstanding principal balance and any other amounts due upon the Maturity Date; provided, however, that with respect to any such late payment, such late charge shall be charged only one time in respect of such late payment.

(b)Notwithstanding the provisions of Section 8(a), in any period of twelve (12) consecutive months there shall be a single grace period of not more than five (5) days for any one (1) payment due under this Note if such payment is not made on the date due therefor and no late charge, and no interest in addition to the regularly scheduled interest payable at the Original Interest Rate or, if applicable, the New Rate, shall be required with respect to such one (1) payment, provided, that such payment is made by Maker on or prior to the expiration of such five (5) day period.

9. Application of Payments. All payments hereunder shall be applied in the following order: (i) first, to the payment of late charges, if any; (ii) second, to the payment of prepayment premiums, if any; (iii) third, to the repayment of any sums advanced by Holder for the payment of any insurance premiums, taxes, assessments or other charges against the Property securing this Note, if any, and any other costs and expenses incurred by Holder in accordance with the Loan Documents (together with interest thereon at the Default Rate from the date of advance until repaid), if any; (iv) fourth, to the payment of accrued and unpaid interest on this Note and other amounts due and payable under the other Loan Documents (other than principal), if any; and (v) fifth, to the reduction of the principal amount of this Note. Notwithstanding the foregoing, for so long as any Event of Default is continuing, Holder shall have the continuing exclusive right to apply any payments received by Holder from or on behalf of Maker as Holder may elect against the then due and owing obligations of Maker under this Note and the other Loan Documents in such order of priority or in such allocations as Holder may determine in its sole and absolute discretion.

10. Immediately Available Funds. All payments under this Note shall be payable in immediately available funds without setoff, counterclaim or deduction of any kind, and shall be made by electronic funds transfer from a bank account established and maintained by Maker for such purpose.

11. Security. This Note is secured by, among other things, (i) the Mortgages (as such term is defined in the Loan Agreement), encumbering certain real property and improvements thereon and as more particularly described in such Mortgages (the “Property”), (ii) the Guaranty (as such term is defined in the Loan Agreement) and (iii) the other Security Documents (as such term is defined in the Loan Agreement).

12. Certain Definitions. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Loan Agreement.

13. Event of Default. Each of the following events will constitute an event of default (an “Event of Default”) under this Note, the Loan Agreement and the Mortgages

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and each other document evidencing or securing or executed in connection with the Loan (collectively, the “Loan Documents”), and any Event of Default under any Loan Document shall constitute an Event of Default hereunder and under each of the other Loan Documents:

(a) any failure to pay when due any interest, principal or other amount in a sum certain under this Note, the Loan Agreement, the Mortgages or under any of the other Loan Documents for which sum there is a scheduled date for payment or for which there is a date certain for payment; or

(b) any failure to pay within ten (10) days following demand by Holder for any amount due and payable by Maker under this Note, the Loan Agreement, the Mortgages or under any other Loan Document other than any amount described in Section 13(a) above; or

(c) any failure to pay the outstanding Secured Obligations (as such term is defined in the Loan Agreement) on the Maturity Date; or

(d) any failure of Maker to perform any of the terms, covenants, obligations or conditions of this Note, the Mortgages or the other Loan Documents to which it is a party that are not specifically referred to in other subsections in this definition of “Event of Default,” in each case for ten (10) days after written notice to Maker from Holder, in the case of any failure that can be cured by the payment of a sum of money (other than Events of Default pursuant to Sections 13(a), 13(b) and 13(c) above as to which the grace period set forth in this Section 13(d) shall not be applicable), or for thirty (30) days after written notice from Holder, in the case of any other failure (unless a longer notice period is otherwise provided herein or in such other Loan Document); provided, however, that if such non-monetary failure is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and provided further that Maker shall have commenced to cure such failure within such 30‑day period and thereafter diligently and expeditiously proceeds to cure the same, such 30‑day period shall be extended for such time as is reasonably necessary for Maker in the exercise of due diligence to cure such failure but in no event for more than one hundred twenty (120) days; and for the avoidance of doubt, the cure periods set forth in this Section 13(d) shall not be applicable to the Events of Default described in the other subsections of this Section 13 and any “Event of Default” as defined in the Loan Agreement and any other Loan Document is an Event of Default under this Note, and shall not be subject to the cure period set forth in this Section 13(d)); or

(e) if, at any time during the Extension Term, Gross Revenue for any calendar month shall be less than ninety-three percent (93%) of the amount of projected Gross Revenue for such month set forth in the applicable Budget; or

(f) the occurrence of any event that is deemed to be an “Event of Default” under any provision of this Note, the Mortgages, the Loan Agreement or any other Loan Document.

14. Acceleration. If at any time an Event of Default exists, the entire outstanding balance of principal, accrued interest, and other sums owing hereunder shall, at the option of Holder, become at once due and payable without notice or demand. Upon the occurrence of any Event of Default described in Section 13(d) hereof, Holder shall have the option, in its sole and absolute discretion, to either (a) exercise any remedies available to Holder under the Loan

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Documents, at law, in equity or otherwise, or (b) require Maker to submit a new proposed budget for Holder’s approval. If Holder agrees to accept such new proposed budget, then such budget shall become the “Budget” for all purposes hereunder. If an Event of Default exists, Holder may exercise any right, power or remedy permitted by law or set forth herein or in the Loan Agreement or any other Loan Document.

15. Conditions Precedent. Maker hereby certifies and declares that all acts, conditions and things required to be done or performed or to have happened precedent to the creation and issuance of this Note, and in order to constitute this Note the legal, valid and binding obligation of Maker, enforceable in accordance with the terms hereof, have been done or performed or have happened in due and strict compliance with all applicable laws or have been expressly waived in writing by Holder.

16. Certain Waivers and Consents. Maker and all parties now or hereafter liable for the payment hereof, primarily or secondarily, directly or indirectly, and whether as endorser, guarantor, surety, or otherwise, hereby severally (a) waive presentment, demand, protest, notice of protest and/or dishonor, and all other demands or notices of any sort whatever with respect to this Note, (b) consent to impairment or release of collateral, extensions of time for payment, and acceptance of partial payments before, at, or after maturity, (c) waive any right to require Holder to proceed against any security for this Note before proceeding hereunder, (d) waive diligence in the collection of this Note or in filing suit on this Note, and (e) agree to pay all out-of-pocket costs and expenses, including, without limitation, reasonable attorneys’ fees, which may be actually incurred in the collection of this Note or any part thereof or in preserving, securing possession of and realizing upon any security for this Note.

17. Usury Savings Clause. The provisions of this Note and of all agreements between Maker and Holder are, whether now existing or hereinafter made, hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of the maturity hereof, prepayment, demand for payment or otherwise, shall the amount paid, or agreed to be paid, to Holder for the use, forbearance or detention of the principal hereof or interest hereon, which remains unpaid from time to time, exceed the maximum amount permissible under applicable law. In particular, it is the intention of the parties hereto to conform strictly to the laws of the State of New York and Federal law, whichever is applicable. If as a result of any circumstance whatsoever, the performance or fulfillment of any provision hereof or of any other agreement between Maker and Holder pertaining to the subject matter hereof shall, at the time performance or fulfillment of such provision is due, involve or purport to require any payment in excess of the limits then prescribed by applicable law, then the obligation to be performed or fulfilled shall hereby be reduced to such limit as to be valid under such applicable law, and if as a result of any circumstance whatsoever, Holder should receive as interest under this Note an amount which would exceed the then highest lawful rate, the amount by which such interest payment would exceed such highest lawful rate shall be applied to the reduction of the principal balance owing hereunder without prepayment premium or penalty (or, at Holder’s option, be paid to Maker) and in no event shall be counted as interest. To the fullest extent permitted by then applicable law, the determination of the legal maximum amount of interest shall at any and all times be made by amortizing, prorating, allocating and spreading in equal parts over the period of the full stated term of this Note, all interest at any time contracted for, charged or received from Maker in connection with this Note and all other agreements between Maker and Holder pertaining to the subject matter hereof, so that the actual rate of interest on account of the indebtedness

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document represented by this Note is uniform throughout the term hereof and complies with all applicable law.

18. Non-Recourse; Exceptions to Non-Recourse. Maker’s obligations hereunder are subject to and limited by the terms of Section 10.31 of the Loan Agreement, which terms are incorporated herein by reference.

19. Severability. If any provision hereof or of any other document securing or otherwise related to the indebtedness evidenced hereby is, for any reason and to any extent, deemed invalid or unenforceable in any jurisdiction or with respect to any Person, entity or circumstances, then neither the remainder of the document in which such provision is contained, nor the application of such provision in respect of other persons, entities, or circumstances, nor any other document referred to herein, shall be affected by such invalidity or lack of enforceability, but, instead, shall be enforceable to the maximum extent permitted by law.

20. Transfer of Note. Each provision of this Note shall be and remain in full force and effect notwithstanding any negotiation or transfer hereof and any interest herein to any other Holder or participant.

21. Security Interest. Maker hereby pledges and grants to Holder a security interest in and to any money or other property that Holder may at any time have or hold on deposit for Maker.

22. Governing Law. Regardless of the place of its execution, this Note shall be construed and enforced in accordance with the substantive laws of the State of New York, without reference to conflicts of law principles.

23. Time of Essence. Time is of the essence in respect of each of the terms and provisions of this Note.

24. Remedies Cumulative. The remedies provided to Holder in this Note, the Loan Agreement, the Mortgages and the other Loan Documents are cumulative and concurrent and may be exercised singly, successively or jointly against Maker, the Property, the Chattels, the Intangible Personalty and the other Collateral and other security, or against Guarantor or any obligor under, or guarantor of, this Note or the other Loan Documents, at the sole and absolute discretion of Holder.

25. No Waiver. Holder shall not by any act or omission be deemed to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Holder and then only to the extent specifically set forth therein. A waiver of any singular right or remedy granted to Holder hereunder shall not be construed as continuing or as a bar to or waiver of (i) any other right or remedy granted to Holder hereunder, or (ii) such waived right or remedy granted to Holder hereunder in connection with any subsequent event.

26. Joint and Several Obligation. If Maker is more than one Person, then: (a) all Persons comprising Maker are jointly and severally liable for all of Maker’s obligations hereunder; (b) all representations, warranties and covenants made by Maker shall be deemed representations, warranties and covenants of each of the Persons comprising Maker; (c) any breach, Default or Event of Default by any of the Persons comprising Maker hereunder shall

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document be deemed to be a breach, Default or Event of Default of each of the Persons comprising Maker; and (d) any reference herein contained to the knowledge or awareness of Maker shall mean the knowledge or awareness of any of the Persons comprising Maker.

27. WAIVER OF JURY TRIAL. MAKER AND HOLDER KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAKER OR HOLDER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE LOAN AGREEMENT, THE MORTGAGES, OR ANY OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR MAKER AND HOLDER TO ENTER INTO THE LOAN TRANSACTION EVIDENCED BY THIS NOTE.

28. WAIVER OF PREPAYMENT RIGHT WITHOUT PREMIUM. EXCEPT AS EXPLICITLY SET FORTH HEREIN, MAKER HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE UNDER APPLICABLE LAW IN EQUITY OR OTHERWISE TO PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT PREPAYMENT PREMIUM, UPON ACCELERATION OF THE MATURITY DATE OF THIS NOTE OR OTHERWISE, AND AGREES THAT, IF FOR ANY REASON A PREPAYMENT OF ALL OR ANY PART OF THIS NOTE IS MADE, WHETHER VOLUNTARILY OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THIS NOTE BY HOLDER ON ACCOUNT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT ARISING FOR ANY REASON, INCLUDING, WITHOUT LIMITATION, AS A RESULT OF ANY PROHIBITED OR RESTRICTED TRANSFER, PROHIBITED OR RESTRICTED FURTHER ENCUMBRANCE OR PROHIBITED OR RESTRICTED DISPOSITION OF THE PROPERTY OR ANY PART THEREOF SECURING THIS NOTE, THEN MAKER SHALL BE OBLIGATED TO PAY, CONCURRENTLY WITH SUCH PREPAYMENT, THE PREPAYMENT PREMIUM AS PROVIDED FOR IN THIS NOTE OR, IN THE EVENT OF PREPAYMENT FOLLOWING ACCELERATION OF THE MATURITY DATE HEREOF WHEN THIS NOTE IS CLOSED TO PREPAYMENT, AS PROVIDED HEREIN AND IN THE LOAN AGREEMENT. MAKER HEREBY DECLARES THAT HOLDER’S AGREEMENT TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS NOTE CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY MAKER, FOR THIS WAIVER AND AGREEMENT.

29. Acceptance of Cures for Events of Default. Notwithstanding anything to the contrary contained in this Note or the other Loan Documents (including, without limitation, any reference to the “continuance” of an Event of Default or to any Event of Default that is “continuing”), Holder shall in no event or under any circumstance be obligated or required to accept a cure by Maker or by any other Person of an Event of Default unless Holder agrees to do so in the exercise of its sole and absolute discretion, it being agreed that once an Event of Default has occurred and so long as Holder has not determined to accept a cure of such Event of Default in writing, Holder shall be absolutely and unconditionally entitled to pursue all rights and remedies available to it under the Loan Documents, at law or in equity or otherwise.

[END OF TEXT]

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF and intending to be legally bound, Maker has duly executed this Note as of the date first above written.

MAKER:

GWL 201 NEELYTOWN LLC, a Delaware limited liability company

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name: Paul A. Cooper Title: CEO

STATE OF ) ) ss.: COUNTY OF )

______(Signature and office of individual taking acknowledgment.) Notary Public My Commission Expires:

[Acknowledgment on behalf of GWL 201 Neelytown LLC]

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name: Paul A. Cooper Title: CEO STATE OF ) ) ss.: COUNTY OF )

______(Signature and office of individual taking acknowledgment.) Notary Public My Commission Expires:

[Acknowledgment on behalf of GWL 300 McIntire LLC]

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name: Paul A. Cooper Title: CEO

STATE OF ) ) ss.: COUNTY OF )

______(Signature and office of individual taking acknowledgment.) Notary Public My Commission Expires:

[Acknowledgment on behalf of GWL 1938 Olney LLC]

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name: Paul A. Cooper Title: CEO

STATE OF ) ) ss.: COUNTY OF )

______(Signature and office of individual taking acknowledgment.) Notary Public My Commission Expires:

[Acknowledgment on behalf of GWL 606 Cozine LLC]

MAKERS

1. GWL 201 NEELYTOWN LLC, a Delaware limited liability company.

2. GWL 300 MCINTIRE LLC, a Delaware limited liability company.

3. GWL 1938 OLNEY LLC, a Delaware limited liability company.

4. GWL 606 COZINE LLC, a Delaware limited liability company.

Schedule 1-1

ENVIRONMENTAL INDEMNITY AGREEMENT THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”), dated as of December 20, 2017, is made by the parties listed on Schedule I attached hereto (each, a “Borrower”, and jointly, severally and collectively, “Borrowers”), and GTJ REIT, INC., a Maryland corporation, (“Guarantor”, and together with Borrowers, “Indemnitors” or individually, as an “Indemnitor”), for the benefit of THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK, a New York corporation (together with its successors and assigns, “Lender”), and the other “Indemnitees,” as hereinafter defined.

RECITALS

A.Lender has agreed to make a loan to Borrowers in the original aggregate principal amount of $39,000,000.00 (the “Loan”). The Loan is (a) evidenced by that certain Promissory Note (USL) made by Borrowers to the order of Lender, of even date herewith (as the same may be amended, restated, modified and/or supplemented from time to time, the “Note”), (b) governed by, among other things, that certain Loan Agreement, of even date herewith, between Lender and Borrowers (as the same may be amended, restated, modified and/or supplemented from time to time, the “Loan Agreement”), (c) secured by, among other things, the Mortgages (as defined in the Loan Agreement), encumbering certain real property as more particularly described therein (including, without limitation, the Property (as defined below)), and (d) guaranteed by that certain Guaranty Agreement, of even date herewith, by Guarantor for the benefit of Lender (the “Guaranty,” and together with this Agreement, the Loan Agreement, the Note, the Mortgages, and all other documents evidencing and/or securing the Loan, collectively, the “Loan Documents”). All capitalized terms used herein without definition shall have the meanings given to such terms in the Loan Agreement.

B.Borrowers own a fee simple interest in and to each of the real properties listed on Schedule II attached hereto (collectively or individually, as the “Property”), as indicated thereon.

C.As a condition precedent to making the Loan, Lender requires that Indemnitors enter into this Agreement, the covenants and obligations of which are independent of and in addition to Borrowers’ obligations under the Loan Agreement, the Note, the Mortgages and the other Loan Documents and Guarantor’s obligations under the Guaranty. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitors, intending to be legally bound, hereby represent, warrant and covenant to Lender and Lender’s officers, directors, employees, agents, affiliates, successors and assigns (collectively, the “Indemnitees”) as follows:

Section 1.Representations and Warranties. Each Indemnitor represents and warrants to the Indemnitees that:

(a)except as disclosed in the Environmental Assessments (hereinafter defined), Hazardous Substances (hereinafter defined) have not at any time been generated, used,

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document treated or stored on, or transported to or from any Property in any quantity or manner that violates any Environmental Law (hereinafter defined); (b)except as disclosed in the Environmental Assessments, Hazardous Substances have not at any time been Released (hereinafter defined) or disposed of on any Property in any quantity or manner that violates any Environmental Law; (c)except as disclosed in the Environmental Assessments, each Indemnitor is in compliance with all applicable Environmental Laws with respect to each Property and the requirements of any permits issued under such Environmental Laws with respect to each Property; (d)there are no past, pending or threatened Environmental Claims (hereinafter defined) against any Indemnitor or any Property; (e)except as disclosed in the applicable Environmental Assessment, Indemnitor has no knowledge of any condition or occurrence at any Property that could reasonably be anticipated to (i) form the basis of any Environmental Claim against any Indemnitor or any such Property or (ii) cause any such Property to be subject to any restrictions on the ownership, occupancy, use or transferability thereof under any Environmental Law; (f)except as disclosed in the Environmental Assessments, there are not now and never have been any underground storage tanks located on any Property; (g)each Borrower (i) is a limited liability company, duly formed, validly existing and in good standing under the laws of the State of Delaware, (ii) has the power and authority to own its property and assets and to transact the business in which it is engaged and (iii) is duly qualified and is in good standing in the jurisdiction in which it owns or leases property or in which failure to be duly qualified and in good standing would have an adverse effect on its business, operations, property or financial condition; (h)Guarantor (i) is a corporation, duly formed, validly existing and in good standing under the laws of the State of Maryland, (ii) has the power and authority to own its property and assets and to transact the business in which it is engaged and (iii) is duly qualified and is in good standing in each jurisdiction in which it owns or leases property or in which failure to be duly qualified and in good standing would have an adverse effect on its business, operations, property or financial condition; (i)each Borrower and Guarantor has the power to execute, deliver and perform the terms and provisions of this Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Agreement; (j)each Borrower and Guarantor has duly executed and delivered this Agreement, and this Agreement constitutes the legal, valid and binding obligation enforceable against such Borrower and Guarantor (collectively, or any one of them, individually) in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally and by principles of equity; (k)neither the execution, delivery or performance by any Indemnitor of this Agreement, nor compliance by it with the terms and provisions hereof, will (i) contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or governmental instrumentality, (ii) result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any lien upon any of Indemnitor’s property or assets pursuant to the terms of, any indenture, mortgage, deed of trust, credit agreement, loan agreement or any other agreement, contract or instrument to which it is a party or by which it or any of Indemnitor’s property or assets is bound or to which it may be subject, (iii) violate any provision of any certificates of formation, operating agreements, trust agreements or other organizational documents, as applicable, of such Indemnitor or (iv) violate any provision of any certificates of formation, operating agreements, trust agreements or other organizational documents of any Borrower Control Person (as defined in the Loan Agreement) in a manner or to an extent that would impair the ability of the parties to this Agreement to perform their obligations hereunder; (l)no order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, the execution, delivery and performance by each Indemnitor of this Agreement or the legality, validity, binding effect or enforceability of this Agreement; (m)no Indemnitor has received notice of violation of, and each Indemnitor is in compliance with, all applicable statutes, regulations and orders of, and all applicable restrictions imposed by all governmental bodies in respect of the conduct of its business and the ownership of its property; and (n)Guarantor is a direct or indirect owner of ownership interests in Borrower as set forth in the Organizational Certificate. Guarantor acknowledges that Guarantor will receive a material direct or indirect benefit from Lender making the Loan to Borrower. Section 2. Covenants. Each Indemnitor covenants and agrees as follows: (a)Each Indemnitor shall (i) comply with all Environmental Laws applicable to the ownership or use of each Property, (ii) use commercially reasonable efforts (including, without limitation, enforcement of Leases) to cause all tenants and other Persons occupying each Property to comply with all Environmental Laws, (iii) immediately pay or cause to be paid all costs and expenses incurred in such compliance and (iv) keep or cause each Property to be kept free and clear of any liens imposed thereon pursuant to any Environmental Laws. (b)No Indemnitor shall generate, use, treat, store, Release or dispose of, or permit the generation, use, treatment, storage, Release or disposal of, any Hazardous Substances on any Property, or transport or permit the transportation of any Hazardous Substances to or from any Property, in each case in any quantity or manner that violates any Environmental Law. (c)If Lender (i) has knowledge of any pending or threatened Environmental Claim against any Indemnitor or any Property, (ii) has reason to believe that any Indemnitor or any Property is in violation of any Environmental Law or (iii) receives a request for an environmental site assessment report from a regulatory or other governmental entity with jurisdiction over Lender, then, at Lender’s written request, at any time and from time to time, Indemnitors shall provide to Lender an environmental site assessment report concerning the applicable Property, prepared by an environmental consulting firm approved by Lender, indicating the presence or absence of Hazardous Substances and the potential cost of any removal or remedial action in connection with any Hazardous Substances on such Property. Any such environmental site assessment report shall be conducted at Indemnitors’ sole cost and expense. If any Indemnitor

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document fails to deliver to Lender any such environmental site assessment report within thirty (30) days after being requested to do so by Lender pursuant to this Section, Lender may obtain such an environmental site assessment itself and such Indemnitor hereby grants to Lender and its agents access to the applicable Property and specifically grants to Lender an irrevocable nonexclusive license to undertake such an assessment, and the costs of, and related to, such assessment (together with interest thereon at the Default Rate as defined in the Note) shall be payable by Indemnitor on demand therefor. Indemnitor shall take all actions necessary or required under the Leases to effect the provisions of this Section 2(c), provided, however, that Lender shall not unreasonably interfere with the operation of the business of Borrower or any tenant under any Lease. (d)In addition to the rights granted to Lender and its agents in Section 2(c) above, Lender may, at its option, at any time and from time to time, perform, at Lender’s sole cost and expense, an environmental site assessment report for any Property, and Indemnitors hereby grant to Lender and its agents access to each Property and each Indemnitor specifically grants to Lender an irrevocable non-exclusive license to undertake such an assessment, provided, however, that Lender shall not unreasonably interfere with the operation of the business of Borrower or any tenant under any Lease (as such term is defined in the Loan Agreement). (e)Indemnitors shall advise Lender in writing, immediately upon learning of any of the following: (i) any pending or threatened Environmental Claim against any Indemnitor or any Property; (ii) any condition or occurrence on any Property that (A) results in noncompliance by such Indemnitor with any Environmental Law or (B) could reasonably be anticipated to form the basis of an Environmental Claim against any Indemnitor or such Property; (iii) any condition or occurrence on any Property that could reasonably be anticipated to cause such Property to be subject to any restrictions on the ownership, occupancy, use or transferability of such Property under any Environmental Law; or (iv) the taking of any removal or remedial action in response to the actual or alleged presence, in any quantity or manner that violates any Environmental Law, of any Hazardous Substances on any Property. Each such notice shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and Indemnitors’ response thereto. In addition, Indemnitors shall provide Lender with copies of all communications to or from any Indemnitor and any governmental agency relating to Environmental Laws, all communications to or from Indemnitors and any Person relating to Environmental Claims, and such detailed reports of any Environmental Claim as may be requested by Lender. (f)Lender shall have the right, but not the obligation, to participate in or defend, as a party if it so elects, any Environmental Claim. Without Lender’s prior written consent, Indemnitors shall not enter into any settlement, consent or compromise with respect to any Environmental Claim that might impair the value of any Property. (g)At their sole cost and expense, Indemnitors shall conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Substances from any Property that must be so removed, cleaned up or remediated in accordance with the requirements of any Environmental Laws and this Agreement, to the reasonable satisfaction of a professional environmental consultant selected by Lender, and in accordance with all such requirements and with orders and directives of all governmental authorities. If all or any portion of the Loan shall be outstanding, Indemnitors may prepay the Loan in full, together with all applicable prepayment penalties, in lieu of complying with the preceding sentence of this clause (g).

(a)Indemnitors agree to defend (retaining such attorneys as are satisfactory to the Indemnitees in their sole reasonable discretion), protect, indemnify and hold harmless each of the Indemnitees and its respective officers, directors, employees, attorneys and agents from and against any and all liabilities, obligations (including removal and remedial actions), losses, damages (including foreseeable and unforeseeable consequential damages and punitive damages), penalties, actions, judgments, suits, claims, costs, expenses and disbursements (including reasonable attorneys’ and consultants’ fees and disbursements) of any kind or nature whatsoever that may at any time be incurred by, imposed on or asserted against any of them directly or indirectly based on, or arising or resulting from, or in connection with, (i) the actual or alleged presence of Hazardous Substances on any Property in any quantity or manner which violates Environmental Law, or the removal, handling, transportation, disposal or storage of such Hazardous Substances, (ii) any Environmental Claim with respect to any Indemnitor or any Property or (iii) the exercise of any Indemnitee’s rights under this Agreement (collectively, the “Indemnified Matters”), regardless of when such Indemnified Matters arise, but excluding any Indemnified Matter with respect to Hazardous Substances first placed or Released on any Property after the later of (1) the date on which none of the Indemnitors nor any of their Affiliates holds title to or any other interest in or lien on such Property and on which all Indemnitors and their Affiliates have surrendered possession and control (and Lender or its designee has accepted such possession and control) of such Property to Lender or its designee (whether by foreclosure, pursuant to a deed-in-lieu of foreclosure or other exercise of remedies) or its designee or assignee or (2) the indefeasible payment in full of the Secured Obligations (as defined in the Loan Agreement). To the extent that this indemnity is unenforceable because it violates any law or public policy, Indemnitors agree to contribute the maximum portion that it is permitted to contribute under applicable law to the payment and satisfaction of all Indemnified Matters. (b)Indemnitors agree to reimburse each Indemnitee for all sums paid and costs incurred by such Indemnitee with respect to any Indemnified Matter within ten (10) days following written demand therefor, with interest thereon at the Default Rate (as defined in the Note) if not paid within such ten (10) day period. (c)Should any Indemnitee institute any action or proceeding at law or in equity, or in arbitration, to enforce any provision of this Agreement (including an action for declaratory relief or for damages by reason of any alleged breach of any provision of this Agreement) or otherwise in connection with this Agreement or any provision hereof, it shall be entitled to recover from Indemnitors all reasonable attorneys’ fees and disbursements incurred by such Indemnitee in connection therewith, if it is the prevailing party in such action or proceeding. Section 4. Events of Default. The occurrence of any of the following specified events shall constitute a default by Indemnitors (each an “Event of Default”): (a)if any of the representations and warranties contained in Section 1 of this Agreement shall prove to be untrue in any respect; or (b)if any Indemnitor fails to perform any of its obligations under this Agreement within (i) ten (10) days, with respect to all monetary obligations or (ii) thirty (30) days, with respect to all non-monetary obligations following notice thereof from Lender; (A) provided that if such nonperformance of any such non- monetary obligation is incapable of cure within such 30-day period, no Event of Default shall occur hereunder if Indemnitors have commenced a program to perform such non-monetary obligation, which program is satisfactory to Lender in its

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document sole and absolute discretion, and is in accordance with applicable law, and Indemnitors are diligently pursuing such program to completion (provided that such failure is cured one hundred twenty (120) days following notice thereof from Lender); and (B) provided further, that if a shorter cure period or notice requirement for any particular failure to perform is provided for by applicable law or under this Agreement, such specific provision shall control. In any such event, and at any time thereafter, if any Event of Default shall have occurred, Lender may do, or cause to be done, whatever is necessary, in Lender’s sole and absolute judgment, to cause any Property to comply with applicable Environmental Laws, and the cost of any such action (together with interest thereon at the Default Rate, as defined in the Note) shall become immediately due and payable by Indemnitor, without notice. Each Indemnitor shall, and does hereby, grant to Lender and its agents access to any Property and hereby specifically grants to Lender an irrevocable, non-exclusive license to do whatever is necessary, in Lender’s sole and absolute judgment, to cause such Property to comply with all applicable Environmental Laws, including, without limitation, the right to enter such Property and remove therefrom any Hazardous Substances. Indemnitors shall take all actions necessary or required under the Leases to effect such right of Lender to have such access to any Property.

Section 5.Recourse Obligations.

(a)Each Indemnitor agrees that, notwithstanding any term or provision contained in this Agreement or the other Loan Documents to the contrary, the obligations of Indemnitors as set forth in this Agreement shall be exceptions to any non-recourse or exculpatory provision relating to the Loan, and each Indemnitor shall be fully liable for the performance of Indemnitors’ obligations under this Agreement, and such liability shall not be limited to the original principal amount of the Loan. (b)The liability of Indemnitors under this Agreement shall in no way be limited to or impaired by any amendment or modification of any of the provisions of the Loan Documents, unless such amendment or modification expressly refers to a specific provision of this Agreement. In addition, the liability of Indemnitors under this Agreement shall in no way be limited or impaired by the following: (i) any extensions of time for performance required by any of the Loan Documents; (ii) any sale, assignment or foreclosure of the Note or any sale or transfer of all or any part of any Property; (iii) any exculpatory provision in any of the Loan Documents limiting any Indemnitee’s recourse to any property encumbered by the Mortgages or to any other security, or limiting the Indemnitees’ rights to a deficiency judgment against any Indemnitor; (iv) the accuracy or inaccuracy of the representations and warranties made by Indemnitors under any of the Loan Documents; (v) the release of Indemnitors (or any Indemnitor) or any other Person from performance or observance of any of the agreements, covenants, terms or conditions contained in any of the Loan Documents (other than this Agreement) by operation of law, any Indemnitee’s voluntary act, or otherwise; (vi) the release or substitution, in whole or in part, of any security for the Note; or (vii) Lender’s failure to record any of the Mortgages or file any Financing Statements or other documents required to perfect Lender’s lien on any Property (or Lender’s improper recording or filing of any of the foregoing) or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Note; and, in any such case, whether with or without notice to Indemnitors and with or without consideration. Section 6. Independent Obligations. This Agreement is intended to create obligations that are separate and independent of Indemnitors’ obligations under the Loan Agreement, the Note, the Mortgages, the Guaranty and the other Loan Documents. Indemnitors’

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document obligations hereunder are, however, expressly secured by the Loan Agreement, the Mortgages and the other Loan Documents.

Section 7.Survival.

(a)The representations, warranties, covenants and indemnities set forth in this Agreement shall survive the repayment of the Secured Obligations, the release of the lien of any Mortgage, any foreclosure of any Mortgage or the delivery of a deed or assignment in lieu of foreclosure or otherwise, and the transfer of any interest in and to any Property. (b)This Agreement shall be binding on, and inure to the benefit of, Indemnitor, the Indemnitees and their respective successors and assigns. Without limiting the generality of the foregoing, this Agreement shall inure to the benefit of each assignee or holder of the Note and each of such assignee’s or holder’s officers, directors, employees, agents and affiliates. Notwithstanding the foregoing, Indemnitor, without, in each instance, the prior written consent of Lender, may not assign, transfer or set over, in whole or in part, all or any part of its benefits, rights, duties and obligations hereunder. Section 8. Definitions. As used in this Agreement, the following terms shall have the following meanings: “Environmental Assessments” means, collectively, those certain Phase I Environmental Site Assessments listed on Schedule III attached hereto. “Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of non-compliance or violation, investigations or proceedings relating in any way to any Environmental Law (hereafter “Claims”) or any permit issued under any such Environmental Law, including without limitation (a) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law; and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Substances or arising from alleged injury or threat of injury to health, safety or the environment. “Environmental Law” means any federal, state or local law, whether common law, court or administrative decision, statute, rule, regulation, ordinance, court order or decree, administrative order or otherwise or any administrative policy or guidelines concerning action levels of a governmental authority (federal, state or local), or any permits, authorizations or other approvals required or currently in effect in respect of the operation or maintenance of the Property, in each case, whether now or hereafter in effect and relating to the environment, public health, occupational safety, industrial hygiene, any Hazardous Substance (including, without limitation, the disposal, generation, manufacture, presence, processing, production, Release, storage, transportation, treatment or use thereof), or the environmental conditions on, under or about the Property, as amended and/or supplemented and as in effect from time to time (including, without limitation, the following statutes and all regulations thereunder as amended and in effect from time to time and applicable to the Property in question): New York Environmental Conservation Law § 27-0101-1701 and § 52-0301-0303, New York Compilation of Codes, Rules and Regulations Parts 360-376; the Spill Compensation and Control Act (N.J.S.A. 58:10-23.11et seq.); the New Jersey Underground Storage Tank Act (N.J.S.A. 58:10A-21 et seq.); DEL. CODE ANN. tit. 7, §§ 9101-9120; DEL. CODE ANN. tit.16, §§ 2401-2417, 6301-6315; Delaware Hazardous Substance Cleanup Act, 7 Del. C. Chapter 91; Delaware Regulations Governing Hazardous Waste. Pt. 122,

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document §§ 122.1-122.230; Pt. 124, §§ 124.1-124.33; Pt. 260 §§ 260.1-260.41 app. I; Pt. 261, §§ 261.1-261.38 apps. I- IX; Pt. 262, §§ 262.10-262.70 apps. I-11; Pt. 263, §§ 263.10-263.106; Pt. 264, §§ 264.1-264.1202 apps. I-IX; Pt. 265, §§ 265.1-265.1202 apps. I-V; Pt. 266, §§ 266-266.206 apps. I-XIII; Pt. 268. §§ 268.1-268.50 apps. I-XI; the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; the Superfund Amendments and Reauthorization Act of 1986, Title III, 42 U.S.C. §11001, et seq.; the Clean Air Act, 42 U.S.C. §7401, et seq.; the Safe Drinking Water Act, 42 U.S.C. §300(f), et seq.; the Solid Waste Disposal Act, 42 U.S.C. §6901, et seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §5101, et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §6901, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. §1251, et seq.; the Toxic Substances Control Act of 1976, 15 U.S.C. §2601, et seq.; the Occupational Safety and Health Act, 29 U.S.C. §651, et seq.; and any successor statutes and regulations to the foregoing). “Hazardous Substances” means (a) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “mold,” “contaminants” or “pollutants,” or words of similar import, under any applicable Environmental Law; and (b) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority, including, without limitation, asbestos and asbestos-containing materials in any form, lead-based paint, any radioactive materials and polychlorinated biphenyls (“PCB’s”), or substances or compounds containing PCB’s. “Release” means disposing, discharging, injecting, spilling, leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing and the like, into or upon any land or water or air, or otherwise entering into the environment.

Section 9.Miscellaneous.

(a) (i) all Persons comprising “Indemnitors” are jointly and severally liable for all of Indemnitors’ obligations hereunder, (ii) all representations, warranties, and covenants made by Indemnitors shall be deemed representations, warranties, and covenants of each Indemnitor and the Persons comprising Indemnitor, (iii) any breach, Default or Event of Default by Indemnitor or any of the Persons comprising each Indemnitor hereunder shall be deemed to be a breach, Default, or Event of Default of Indemnitors and (iv) any reference herein contained to the knowledge or awareness of Indemnitors shall mean the knowledge or awareness of any Indemnitor or any of the Persons comprising Indemnitor. (b)Each Indemnitor waives any right or claim of right to cause a marshalling of its assets or to cause any Indemnitee to proceed against any of the security for the Secured Obligations before proceeding under this Agreement. Each Indemnitor expressly waives and relinquishes all present or future rights, remedies, or circumstances that might constitute a legal or equitable discharge of such Indemnitor or which might otherwise impair the validity or enforceability of this Agreement. Each Indemnitor hereby agrees to postpone the exercise of any and all rights of subrogation to the rights of any Indemnitee against such Indemnitor hereunder and any rights of subrogation to any collateral securing the Loan, until all obligations of Indemnitors to the Indemnitees hereunder have been performed in full and all amounts of principal, interest and other sums evidenced or secured by the Loan Documents (including any default interest owed and payable thereon) shall have been paid in full.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c)Any party liable upon or, in respect of, this Agreement, the other Loan Documents or any other document governing, evidencing and securing the Loan and Guarantor’s obligations under the Guaranty may be released without affecting the liability of any party not so released. (d)No failure or delay on the part of any of the Indemnitees in exercising any right, power or privilege hereunder or under any other Loan Document and no course of dealing between Indemnitors and the Indemnitees (or any of them) shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any other Loan Document expressly provided are cumulative with, and not exclusive of, any rights, powers or remedies which the Indemnitees or any of them would otherwise have. No notice to or demand on Indemnitors in any case shall, ipso facto, entitle Indemnitors to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Indemnitees to any other or further action in any circumstances without notice or demand where notice or demand is not otherwise required. (e)All notices hereunder shall be in writing and shall be delivered to Borrower and Lender in accordance with the provisions of the Loan Agreement, and to Guarantor in accordance with the terms of the Guaranty. (f)Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing and signed by each of the parties hereto.

(g) LENDER AND INDEMNITORS KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS AGREEMENT, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER AND INDEMNITORS TO ENTER INTO THE LOAN TRANSACTION EVIDENCED BY THE NOTE. (h)This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and be governed by the law of the State of New York, without reference to conflicts of law principles. (i)All pronouns and any variations of pronouns herein shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the identity of the parties may require. Whenever the terms herein are singular, the same shall be deemed to mean the plural, as the identity of the parties or the context requires and vice versa. (j)This Agreement may be executed in multiple counterparts, each of which shall constitute a duplicate original, but all of which, together, shall constitute one and the same instrument. (k)Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents (including, without limitation, any reference to the “continuance” of an Event of Default or that an Event of Default is “continuing”), Lender shall in

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document no event or under any circumstance be obligated or required to accept a cure by Indemnitor, Borrower or by any other Person of an Event of Default unless Lender agrees to do so in the exercise of Lender’s sole and absolute discretion, it being agreed that once an Event of Default has occurred and so long as Lender has not determined to accept a cure of such Event of Default in writing, Lender shall be absolutely and unconditionally entitled to pursue all rights and remedies available to it under the Loan Documents, at law or in equity or otherwise.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, each Indemnitor has executed and delivered this Agreement as of the date first above written.

BORROWERS:

GWL 201 NEELYTOWN LLC, a Delaware limited liability company

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name: Paul A. Cooper Title: CEO

STATE OF ) ) ss.: COUNTY OF )

______(Signature and office of individual taking acknowledgment.) Notary Public My Commission Expires:

[Acknowledgment on behalf of GWL 201 Neelytown LLC]

Error! Unknown document property name.

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name: Paul A. Cooper Title: CEO STATE OF ) ) ss.: COUNTY OF )

______(Signature and office of individual taking acknowledgment.) Notary Public My Commission Expires:

[Acknowledgment on behalf of GWL 300 McIntire LLC]

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name: Paul A. Cooper Title: CEO

STATE OF ) ) ss.: COUNTY OF )

______(Signature and office of individual taking acknowledgment.) Notary Public My Commission Expires:

[Acknowledgment on behalf of GWL 1938 Olney LLC]

By:GTJ Realty, LP, a Delaware limited partnership, its sole member

By:GTJ GP, LLC, a Maryland limited liability company, its general partner

By:GTJ REIT, Inc., a Maryland corporation, its manager

By: /s/ Paul A. Cooper Name: Paul A. Cooper Title: CEO

STATE OF ) ) ss.: COUNTY OF )

______(Signature and office of individual taking acknowledgment.) Notary Public My Commission Expires:

[Acknowledgment on behalf of GWL 606 Cozine LLC]

GTJ REIT, INC., a Maryland corporation

By: /s/ Paul A. Cooper Name: Paul A. Cooper Title: CEO

STATE OF ) ) ss.: COUNTY OF )

______(Signature and office of individual taking acknowledgment.) Notary Public My Commission Expires:

[Acknowledgement on behalf of GTJ REIT, Inc.]

Borrowers

1. GWL 201 NEELYTOWN LLC, a Delaware limited liability company.

2. GWL 300 MCINTIRE LLC, a Delaware limited liability company.

3. GWL 1938 OLNEY LLC, a Delaware limited liability company.

4. GWL 606 COZINE LLC, a Delaware limited liability company.

Schedule I-1

List of Real Properties

1. 201 Neelytown Road, Montgomery, New York 12549 (the “Neelytown Property”).

2. 301 McIntire Drive, Newark, Delaware 19711 (the “McIntire Property”).

3. 1938 Olney Avenue, Cherry Hill, New Jersey 08003 (the “Olney Property”).

4. 606 Cozine Avenue, Brooklyn, New York 11208 (the “Cozine Property”).

Schedule II-1

Environmental Assessments

1. Phase I Environmental Site Assessment of the Neelytown Property, dated as of December 11, 2017, prepared by EBI Consulting with Project No. 1117006917, for the benefit of Lender.

2. Phase I Environmental Site Assessment of the McIntire Property, dated as of December 8, 2017, prepared by EBI Consulting with Project No. 1117006918, for the benefit of Lender.

3. Phase I Environmental Site Assessment of the Olney Property, dated as of December 11, 2017, prepared by EBI Consulting with Project No. 1117006919, for the benefit of Lender.

4. Phase I Environmental Site Assessment of the Cozine Property, dated as of December 15, 2017, prepared by EBI Consulting with Project No. 1117006920, for the benefit of Lender.

Schedule III-1

GUARANTY AGREEMENT

This GUARANTY AGREEMENT (this “Guaranty”) is made as of December 20, 2017, by GTJ REIT, INC., a Maryland corporation (“Guarantor”), in favor of THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK, a New York corporation (together with its successors and assigns, “Lender”), having an address at c/o AIG Investments, 777 S. Figueroa Street, 16th Floor, Los Angeles, California 90017-5800.

1. Loan and Note. This Guaranty is executed in connection with a mortgage loan in the aggregate original principal amount of $39,000,000.00 (the “Loan”) made by Lender to the parties set forth on Schedule I hereto (jointly, severally and collectively, “Borrower”). The Loan is (a) evidenced by that certain Promissory Note (USL) made by Borrower to the order of Lender, of even date herewith (as the same may be amended, restated, modified and/or supplemented from time to time, the “Note”), (b) governed by, among other things, that certain Loan Agreement, of even date herewith, between Borrower and Lender (as the same may be amended, restated, modified and/or supplemented from time to time, the “Loan Agreement”), and (c) secured by, among other things, the Mortgages (as defined in the Loan Agreement), encumbering certain real property as more particularly described in each Mortgage (collectively, the “Property”). All capitalized terms used herein without definition shall have the meanings given to such terms in the Loan Agreement.

2. Purpose and Consideration. The execution and delivery of this Guaranty by Guarantor is (i) a condition to Lender’s willingness to make the Loan to Borrower, (ii) made in order to induce Lender to make the Loan and (iii) made in recognition that Lender will be relying upon this Guaranty in making the Loan and performing any other obligations Lender may have under the Loan Documents. Guarantor owns a direct and/ or indirect ownership interest in Borrower. Accordingly, Guarantor acknowledges that Guarantor will receive a material direct and/or indirect benefit from Lender making the Loan to Borrower.

3. Guaranty. Guarantor hereby guarantees, and becomes a surety for, absolutely, primarily, unconditionally and irrevocably, the full and prompt payment and performance of all obligations of Borrower under the exceptions to the non-recourse provisions described in Section 10.31.1 and Section 10.31.2 of the Loan Agreement for which Borrower has or may incur personal liability to Lender (collectively, the “Obligations”). The liability of Guarantor with respect to the Obligations shall be joint and several, primary, direct and immediate, and not conditional or contingent upon pursuit by Lender of any remedies Lender may have against Borrower or any other Person, whether pursuant to the Note, the Loan Agreement, the Mortgages or any other Loan Document in connection therewith or any other document or agreement or at law or in equity. Guarantor acknowledges that this Guaranty is a guarantee of payment and not just of collection in respect of the Obligations that may accrue to Lender from Guarantor. The liability of Guarantor under this Guaranty shall continue after any assignment or transfer of the interests of Lender under this Guaranty made in conjunction with an assignment of the Loan.

4. Guaranty is Independent and Absolute. The obligations of Guarantor hereunder are independent of the obligations of Borrower and of any other Person that may become liable with

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document respect to the Obligations. Guarantor is jointly and severally liable with Borrower and with any other guarantor for the full and timely payment and performance of all of the Obligations. Guarantor expressly agrees that a separate action or actions may be brought and prosecuted against Guarantor (or any other guarantor), whether or not any action is brought against Borrower, any other guarantor or any other Person for any of the Obligations guaranteed hereby and whether or not Borrower, any other guarantor or any other Persons are joined in any action against Guarantor. Guarantor further agrees that Lender shall have no obligation to proceed against any security for the Obligations prior to enforcing this Guaranty against Guarantor, and that Lender may pursue or omit to pursue any and all rights and remedies Lender has against any Person or with respect to any security in any order or simultaneously or in any other manner. All rights of Lender and all obligations of Guarantor hereunder shall be primary, direct, immediate, absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Note, the Mortgages, the Loan Agreement or any other Loan Document and (b) any other circumstances that might otherwise constitute a defense available to, or a discharge of, Borrower in respect of the Obligations.

5. Authorizations to Lender. Guarantor authorizes Lender, without notice or demand and without affecting Guarantor’s liability hereunder, from time to time, (a) to renew, extend, accelerate or otherwise change the time for payment of, change, amend, alter, cancel, compromise or otherwise modify the terms of the Note, including increasing the rate or rates of interest thereunder agreed to by Borrower, and to grant any indulgences, forbearances, or extensions of time, (b) to renew, extend, change, amend, alter, cancel, compromise or otherwise modify any of the terms, covenants, conditions or provisions of any of the other Loan Documents or any of the obligations thereunder, (c) to apply any security and direct the order or manner of sale thereof as Lender, in Lender’s sole discretion, may determine, (d) to proceed against (x) Borrower with respect to any or all of the obligations under the Loan Documents or (y) Guarantor or any other guarantor with respect to any or all of the Obligations, in each case, without first foreclosing against any security therefor, (e) to exchange, release, surrender, impair or otherwise deal in any manner with, or waive, release or subordinate any security interest in, any security for the obligations under the Loan Documents, (f) to release or substitute Borrower any other guarantors, endorsers, or other parties that may be or become liable with respect to the Obligations or any other obligations under the Loan Documents, without any release being deemed made of Guarantor or any other such Person and (g) to accept a conveyance or transfer to Lender of all or any part of any security in partial satisfaction of the obligations under the Loan Documents, or any of them, without releasing Borrower, Guarantor, or any other guarantor, endorser or other party that may be or become liable with respect to the Obligations, from any liability for the balance of the obligations under the Loan Documents.

6. Application of Payments Received by Lender. Any sums of money Lender receives from or for the account of Borrower may be applied by Lender to reduce any of the Obligations or any other liability of Borrower to Lender, as Lender in Lender’s sole discretion deems appropriate.

7. Waivers by Guarantor. In addition to all waivers expressed in any of the Loan Documents, all of which are incorporated herein by Guarantor, Guarantor hereby waives: (a) presentment, demand, protest and notice of protest, notice of dishonor and of non-payment, notice of acceptance of this Guaranty, and diligence in collection; (b) notice of the existence, creation or incurring of any new or additional obligations under or pursuant to any of the Loan Documents; (c) any right to require Lender to proceed against, give notice to or make demand upon Borrower; (d) any right to require Lender to proceed against or exhaust any security, or to proceed against or

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document exhaust any security in any particular order; (e) any right to require Lender to pursue any remedy of Lender; (f) any right to direct the application of any security held by Lender; (g) any right of subrogation, any right to enforce any remedy, which Lender may have against Borrower, any right to participate in any security now or hereafter held by Lender and any right to reimbursement from Borrower for amounts paid to Lender by Guarantor, until all of the Secured Obligations have been satisfied; (h) benefits, if any, of Guarantor under any anti-deficiency statutes or single-action legislation; (i) any defense arising out of any disability or other defense of Borrower, including bankruptcy, dissolution, liquidation, cessation, impairment, modification, or limitation, from any cause, of any liability of Borrower, or of any remedy for the enforcement of such liability; (j) any statute of limitations affecting the liability of Guarantor hereunder; (k) any right to plead or assert any election of remedies by Lender; and (1) any other defenses available to a surety under applicable law.

8. Subordination by Guarantor. Guarantor hereby agrees that any indebtedness of Borrower to Guarantor, whether now existing or hereafter created, shall be, and is hereby, subordinated to the outstanding indebtedness of Borrower to Lender under the Loan Documents. At any time during which a Default or an Event of Default shall exist and is continuing, Guarantor shall not accept or seek to receive any amounts from Borrower on account of any indebtedness of Borrower to Guarantor.

9. Bankruptcy Reimbursements. Guarantor hereby agrees that if all or any part of the Obligations paid to Lender by Borrower, Guarantor or any other party liable for payment and satisfaction of the Obligations are recovered from Lender for any reason whatsoever (including, but not limited to, the insolvency, bankruptcy or reorganization of Guarantor or Borrower), Guarantor shall reimburse Lender immediately on demand for all amounts of such Obligations so recovered from Lender, together with interest thereon at the Default Rate (as such term is defined in the Note) from the date such amounts are so recovered until repaid in full to Lender. For purposes of the reimbursement of Lender by Guarantor under this Section 9, the provisions of this Guaranty shall survive repayment of the Secured Obligations until all amounts recovered from Lender, and any other amounts due thereon under this Guaranty, shall have been reimbursed in full.

10. Jurisdiction and Venue. Guarantor hereby submits itself to the jurisdiction and venue of any federal or state court located in or serving the City of New York, County of New York, in the State of New York, in connection with any action or proceeding brought for enforcement of Guarantor’s obligations hereunder, and hereby waives any and all personal or other rights under the law of any other country or state to object to jurisdiction within such locations for purposes of litigation to enforce such obligations. Guarantor agrees that service of process upon Guarantor shall be complete upon delivery thereof in any manner permitted by law to Guarantor’s agent for service of process as designated in Section 11 below.

(a) Guarantor hereby appoints Schiff Hardin LLP, 666 Fifth Avenue, 17th Floor, New York, New York 10103, c/o Christine McGuinness Esq., as its lawfully designated agent for service of process and hereby consents to such service for purposes of submitting to the jurisdiction and venue of any federal or state court located in or serving the City of New York, County of New York, in the State of New York, as provided in Section 10 hereof. Guarantor hereby agrees that Guarantor shall not change Guarantor’s designated agent without giving prior written notice thereof to Lender and without having received Lender’s prior express written consent to such redesignation. In the event that service of process in accordance with the foregoing is not possible after two (2) weeks’ reasonable effort by Lender, Guarantor hereby consents to service by publication in a newspaper of general circulation in or serving the City of New York, County of New York, in the of State of New York.

(b) Guarantor hereby further acknowledges and agrees that delivery to Guarantor, at the address, and in any manner provided for in Section 16 hereof, of any summons and complaint or any other documents in any action, as evidenced by regular or customary receipt or statement of a nationally recognized delivery firm or United States Post Office, as may be applicable, shall constitute, for all purposes in any such action, service of process for purposes of submitting to the jurisdiction and venue of any federal or state court located in or serving the City of New York, County of New York, in the State of New York, as provided in Section 10 above, and Guarantor hereby consents to any such service. Guarantor hereby agrees that Guarantor shall not change any such address without giving prior written notice thereof to Lender and having received Lender’s written receipt of such change of address notice.

12. Minimum Net Worth and Liquidity. At all times until repayment in full of the Secured Obligations, Guarantor shall satisfy the Guarantor Minimum Net Worth Requirement and the Guarantor Minimum Available Liquidity Requirement.

13. Financial Statements. Each Guarantor shall (x) furnish to Lender the balance sheets, profit and loss statements and other financial statements required by and in the manner set forth in Section 5.1.12 of the Loan Agreement that relate to the Guarantor and (y) otherwise comply with the terms and provisions set forth in Section 5.1.12 of the Loan Agreement that relate to the Guarantor in all respects.

14. Assignability. This Guaranty shall be binding upon Guarantor and Guarantor’s heirs, representatives, successors and assigns and shall inure to the benefit of Lender and Lender’s successors and assigns. This Guaranty shall follow the Note and the other Loan Documents, which are for the benefit of Lender, and, in the event any of the Note and the other Loan Documents are negotiated, sold, transferred, assigned or conveyed by Lender in whole or in part, this Guaranty shall be deemed to have been sold, transferred, assigned or conveyed by Lender to the holder or holders of the Note and the other Loan Documents, with respect to the Obligations contained therein, and such holder or holders may enforce this Guaranty as if such holder or holders had been originally named as Lender hereunder.

15. Payment of Costs of Enforcement. In the event any action or proceeding is brought to enforce this Guaranty, Guarantor shall pay all costs and expenses of Lender in connection with such action or proceeding, including, without limitation, all reasonable attorneys’ fees incurred by Lender.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 16. Notices. Any notice, consent or approval required or permitted to be given by Guarantor or Lender under this Guaranty shall be in writing and will be deemed given (a) upon personal delivery, (b) on the first Business Day after receipted delivery to a courier service which guarantees next-business day delivery or (c) on the third Business Day after mailing, by registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below:

If to Guarantor:

GTJ REIT, Inc. 60 Hempstead Avenue, Suite 718 West Hempstead, New York 11552 Attention: Paul Cooper

with copies to:

Schiff Hardin LLP 666 Fifth Avenue, 17th Floor New York, New York 10103 Attention: Christine A. McGuinness

If to Lender:

The United States Life Insurance Company in the City of New York c/o AIG Asset Management 777 S. Figueroa Street, 16th Floor Los Angeles, California 90017-5800 Attention: Director-Mortgage Lending and Real Estate

with a copy to: Katten Muchin Rosenman LLP 2929 Century Park East, Suite 2600 Los Angeles, California 90067 Attention: Adam J. Engel, Esq.

Any party may change such party’s address for notices or copies of notices by giving notice to the other party in accordance with this Section 16.

17. Reinstatement of Obligations. If at any time all or any part of any payment made by Guarantor or Borrower or received by Lender from Guarantor or Borrower under or with respect to this Guaranty or the other Loan Documents is, or must be, rescinded or returned for any reason whatsoever (including, but not limited to, the insolvency, bankruptcy or reorganization of Guarantor or Borrower), then the Obligations shall, to the extent of the payment rescinded or returned, and to the extent permitted by law, be deemed to have continued in existence, notwithstanding such previous payment made by Guarantor or Borrower, as applicable, or receipt of payment by Lender, and the Obligations shall continue to be effective or be reinstated, as the case may be, as to such payment, all as though such previous payment by Guarantor or Borrower

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document had never been made. For purposes of this Section 17, the provisions of this Guaranty shall survive repayment of the Secured Obligations until all amounts rescinded or returned, and any other amounts due under this Section, shall have been reimbursed in full.

18. Severability of Provisions. If any provision of this Guaranty is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Guaranty, the legality, validity, and enforceability of the remaining provisions of this Guaranty shall not be affected thereby, and in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Guaranty a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

19. Joint and Several Obligation. If Guarantor is more than one Person, then: (a) all Persons comprising Guarantor are jointly and severally liable for all of the Obligations; (b) all representations, warranties, and covenants made by Guarantor shall be deemed representations, warranties, and covenants of each of the Persons comprising Guarantor; (c) any breach, Default or Event of Default by any of the Persons comprising Guarantor hereunder shall be deemed to be a breach, Default, or Event of Default of Guarantor; and (d) any reference herein contained to the knowledge or awareness of Guarantor shall mean the knowledge or awareness, of any Person comprising Guarantor.

20. Waiver. Neither the failure of Lender to exercise any right or power given hereunder or to insist upon strict compliance by Borrower, Guarantor, any other guarantor or any other Person with any of its obligations set forth herein or in any of the Loan Documents to which Lender is a party, nor any practice of Borrower or Guarantor at variance with the terms hereof or of any Loan Documents to which Borrower or Guarantor is a party, shall constitute a waiver of Lender’s right to demand strict compliance with the terms and provisions of this Guaranty.

21. Certain Waivers. GUARANTOR, BY SIGNING THIS GUARANTY, AND LENDER, BY ACCEPTING THIS GUARANTY, EACH KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS GUARANTY, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR ANY LOAN DOCUMENT TO WHICH GUARANTOR IS A PARTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR PURPOSES OF LENDER AND GUARANTOR ENTERING INTO THE SUBJECT LOAN TRANSACTION.

22. Applicable Law. This Guaranty and the rights and obligations of the parties hereunder shall be governed by and interpreted in accordance with the laws of the State of New York, without reference to conflicts of law principles.

23. New York Provisions. Guarantor acknowledges and agrees that this Guaranty is, and is intended to be, an instrument for the payment of money only, as such phrase is used in Section 3213 of the Civil Practice Law and Rules of the State of New York, that Guarantor has been fully advised by its counsel of Lender’s rights and remedies pursuant to such Section 3213 and that Guarantor expressly waives any right, and hereby agrees not, to assert that this Guaranty is not such an instrument.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 24. Acceptance of Cures for Event of Default. Notwithstanding anything to the contrary contained in this Guaranty or the other Loan Documents (including, without limitation, any reference to the “continuance” of an Event of Default or that an Event of Default is “continuing”), Lender shall in no event or under any circumstance be obligated or required to accept a cure by Borrower, Guarantor or any other Person of an Event of Default unless Lender agrees to do so in the exercise of Lender’s sole and absolute discretion, it being agreed that once an Event of Default has occurred and so long as Lender has not determined to accept a cure of such Event of Default in writing, Lender shall be absolutely and unconditionally entitled to pursue all rights and remedies available to Lender under the Loan Documents, at law or in equity or otherwise.

25. Representations and Warranties. Guarantor represents and warrants as of the date hereof to Lender as follows:

(a) Guarantor is a direct and/or indirect owner of ownership interests in Borrower, as set forth in the Organizational Certificate,

(b) The execution, delivery and performance by Guarantor of the Loan Documents to which it is a party are within the power and authority of Guarantor and have been duly authorized by all necessary action and will not violate any provision of the organizational documents of Guarantor.

(c) This Guaranty and the other Loan Documents to which Guarantor is a party will, when delivered hereunder, be valid and binding obligations of Guarantor, enforceable against Guarantor in accordance with their respective terms, except as limited by equitable principles and bankruptcy, insolvency and similar laws affecting creditors’ rights. This Guaranty, the Note, the Mortgages, the Loan Agreement and the other Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by Guarantor (including the defense of usury), and Guarantor has not asserted any right of rescission, set-off, counterclaim or defense with respect thereto.

(d) The execution, delivery and performance by Guarantor of the Loan Documents to which Guarantor is a party will not contravene any applicable law or regulation or any contractual or other restriction binding on or affecting Guarantor, and will not result in or require the creation of any lien, security interest, other charge or encumbrance (other than pursuant hereto) upon or with respect to any of Guarantor’s respective properties.

(e) No authorization, approval, consent or other action by, and no notice to or filing with, any court, governmental authority or regulatory body is required for the due execution, delivery and performance by Guarantor of any of the Loan Documents to which Guarantor is a party or the effectiveness of any assignment of any of Guarantor’s rights and interests of any kind to Lender.

(f) Guarantor has not made any assignment for the benefit of creditors, nor has Guarantor filed, or had filed against Guarantor, any petition in bankruptcy.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (g) There is no pending, or to the knowledge of Guarantor, threatened litigation, action, proceeding or investigation, including, without limitation, any condemnation

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document proceeding, against Guarantor before any court, governmental or quasi-governmental, arbitrator or other authority.

(h) Guarantor is a “non-foreign person” within the meaning of Sections 1445 and 7701 of the United States Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.

(i) Guarantor has filed or has obtained extensions to file all tax returns which are required to be filed by Guarantor and has paid all taxes shown thereon to be due, together with applicable interest and penalties.

(j) Guarantor has independently and without reliance upon Lender and based on such documents and information as Guarantor has deemed appropriate, made Guarantor’s own credit analysis and decision to enter into this Guaranty and each of the other Loan Documents to which Guarantor is a party. (k) No statement of fact made by or on behalf of Guarantor in this Guaranty or in any of the other Loan Documents to which Guarantor is a party contains any untrue statement of material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading. (l) Guarantor is not (i) a Prohibited Person, or (ii) subject to any other Legal Requirement that purports to restrict or regulate Guarantor’s ability to comply with this Guaranty. (m) Guarantor is not contemplating either the filing of a petition by Guarantor under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or property. To Guarantor’s knowledge, no Person is contemplating the filing of any such petition against Guarantor

(n) Guarantor does not receive more than five percent (5%) of Guarantor’s revenue from business conducted in or with countries sanctioned by the U.S. Treasury Department of Foreign Assets Control, except in connection with “Country Sanction Programs” promulgated thereby. [Remainder of the Page Intentionally Left Blank]

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, Guarantor have executed this Guaranty as of the day and year first above written.

GUARANTOR:

GTJ REIT, INC., a Maryland corporation

By: /s/ Paul A. Cooper Name: Paul A. Cooper Title: CEO

STATE OF ) ) ss.: COUNTY OF )

______(Signature and office of individual taking acknowledgment.) Notary Public My Commission Expires:

List of Borrower Entities

1. GWL 201 NEELYTOWN LLC, a Delaware limited liability company.

2. GWL 300 MCINTIRE LLC, a Delaware limited liability company.

3. GWL 1938 OLNEY LLC, a Delaware limited liability company.

4. GWL 606 COZINE LLC, a Delaware limited liability company.

Schedule I-1

GTJ REIT, INC.

AMENDED AND RESTATED CODE OF BUSINESS CONDUCT AND ETHICS

This Amended and Restated Code of Business Conduct and Ethics (this “Code”) covers a wide range of business practices and procedures. It does not cover every issue that may occur or arise, but it sets out basic principles to guide employees, officers and directors of GTJ REIT, Inc., a Maryland corporation, (the “Company”). The board of directors of the Company (the “Board”) has adopted this Code in order to:

a) promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;

b) promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company;

c) promote compliance with governmental laws, rules and regulations applicable to the Company;

d) promote the protection of Company assets, including corporate opportunities and confidential information;

e) promote fair dealing practices;

f) deter wrongdoing; and

g) ensure accountability for adherence to this Code.

Our employees, officers and directors must conduct themselves accordingly and seek to avoid even the appearance of improper behavior. Each employee, officer and director will be required to sign a certification in the form of Exhibit A hereto.

Those employees, officers or directors who violate this Code will be subject to disciplinary action, up to and including termination of employment or other service or removal as a director from the Board. If you are in a situation which you believe may violate or lead to a violation of this Code, please follow the guidelines described in Section 14 of this Code.

1. COMPLIANCE WITH LAWS, RULES AND REGULATIONS

Obeying the law, both in letter and in spirit, is the foundation on which the ethical standards of the Company are built. All employees, officers and directors must respect, obey and comply with all applicable governmental laws, rules and regulations, including those of the cities, states and countries in which we operate. Although not all employees, officers and directors are expected to know the details of these laws, rules and regulations, it is important to know enough to determine when to seek advice from our executive officers or legal counsel. The

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Company will, as necessary, hold information and training sessions to promote compliance with relevant laws, rules and regulations.

2. CONFLICTS OF INTEREST

A conflict of interest exists when a person’s private interests (or the interests of a member of his or her family) conflict in any way with the interests of the Company. A conflict situation can arise when an employee, officer or director (or a member of his or her family) takes action or has interests that may make it difficult to perform his or her Company work objectively and effectively. Conflicts of interest may also arise when an employee, officer or director, or members of his or her family, receives improper personal benefits as a result of his or her position at the Company. Loans by the Company to, or guarantees by the Company of obligations of, any director or executive officer of the Company are expressly prohibited.

It is a conflict of interest for an employee, officer or director to work simultaneously for, or be a director or consultant for, a competitor, tenant or supplier. The best policy is to avoid any direct or indirect business connection with the Company’s competitors, tenants or suppliers, except on our behalf.

Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by the Board. Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with an executive officer or our legal counsel. Any employee, officer or director who becomes aware of a conflict or potential conflict should bring it to the attention of an executive officer or our legal counsel and consult the procedures described in Section 14 of this Code.

3. INSIDER TRADING

Employees, officers and directors who have access to confidential information (and any employee, officer or director could have access to such confidential information) are not permitted to use or share that information for stock trading purposes or for any other purpose, other than the legitimate conduct of our business. All non-public information about the Company should be considered confidential information. To use confidential information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical but is also illegal. In order to assist in compliance with laws against insider trading, the Company has adopted a specific policy governing employees, officers and directors trading in securities of the Company. This policy has been distributed to every employee, officer and director. If you have any questions, please consult our legal counsel.

4. CORPORATE OPPORTUNITIES

Employees, officers and directors are prohibited from taking for themselves personally (or for the benefit of friends and family members) opportunities that are presented to them through the use of corporate property, information or position without the prior consent of the Board. No employee, officer or director may use corporate property, information, or position for improper personal gain (including gain of friends or family members), and no employee, officer or director may compete with the Company directly or indirectly. Employees, officers and directors owe a primary duty to the Company to advance its interests when the opportunity to do so arises.

We seek to compete fairly and honestly. Taking proprietary information or possessing trade secret information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies, is prohibited. Each employee, officer and director should endeavor to respect the rights of and deal fairly with the Company’s tenants, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job. No employee, officer or director should take unfair advantages of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealing practice.

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with tenants, service providers or competitors. No gift or entertainment should be offered, given, provided or accepted by any employee, officer or director, or a family member of an employee, officer or director or agent, unless it: (1) is not a cash gift, (2) is consistent with customary business practice, (3) is not excessive in value, (4) cannot be construed as a bribe or payoff and (5) does not violate any laws, rules or regulations. Please discuss with an executive officer or our legal counsel any gifts or proposed gifts which you are not certain are appropriate.

6. DISCRIMINATION AND HARASSMENT

The diversity of the Company’s employees, officers and directors is a tremendous asset. We are committed to provide equal opportunity in all aspects of employment and do not tolerate any illegal discrimination or harassment of any kind. Examples include derogatory comments based on race, religion, sexual orientation, gender or ethnicity.

7. HEALTH AND SAFETY

The Company strives to provide each employee, officer and director with a safe and healthy work environment. Each employee, officer and director has responsibility for maintaining a safe and healthy workplace for all employees, officers and directors by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.

Violence and threatening behavior are not permitted. Employees, officers and directors should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of illegal drugs in the workplace is not tolerated.

8. RECORD-KEEPING

The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions.

Employees, officers and directors may use business expense accounts, which must be documented and recorded accurately. If you are not sure whether a certain expense is legitimate, ask an executive officer.

The Company’s books, records, accounts and financial statements must be maintained accurately, must appropriately reflect the Company’s transactions and must conform both to

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document applicable legal requirements and to the Company’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation and with the knowledge of the Board.

Business communications often become public, and we should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterization of people and companies that could be misunderstood. This applies to correspondence, telephone messages, e-mail, memoranda and formal reports.

Records should always be retained or destroyed according to the Company’s record retention policies. In accordance with those policies, in the event of litigation or governmental investigation please consult our legal counsel.

9. CONFIDENTIALITY

Employees, officers and directors must maintain the confidentiality of information entrusted to them by the Company or its customers, tenants or service providers, except when disclosure is authorized by an executive officer or our legal counsel, or required by laws, rules or regulations. Confidential information includes all non- public information (regardless of its source) that might be of use to the Company’s competitors, or otherwise disadvantageous to the business of the Company or its customers, tenants or service providers if disclosed. It also includes information that tenants have entrusted to us. The obligation to preserve confidential information continues even after employment or other service with the Company ends. In connection with this obligation, every employee, officer and director is required to execute a confidentiality agreement.

10. PROTECTION AND PROPER USE OF THE COMPANY'S ASSETS

All employees, officers and directors should endeavor to protect the Company’s assets and see to their appropriate use. Theft, carelessness, and waste have a direct impact on profitability and are prohibited. Any suspected incident of fraud or theft should be immediately reported for investigation to an executive officer or legal counsel. Company equipment should not be used for non-Company business.

The obligation of employees, officers and directors to protect the Company’s assets includes its proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this proprietary information is prohibited, could also be illegal and may result in civil or criminal penalties.

11. PAYMENTS TO GOVERNMENT PERSONNEL

The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments, foreign political parties or foreign political candidates in order to obtain or retain business.

In addition, the U.S. government has a number of laws, rules and regulations regarding business gratuities which may be accepted by U.S. government personnel. The promise, offer or delivery to an official or employee of the U.S. government of a gift, favor or other gratuity in

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document violation of these rules would not only violate the Company’s policy but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules. If you have questions, our legal counsel will provide guidance to you in this area.

12. WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS

Any waiver of this Code for employees, officers or directors may be made only by the prior approval of the Board after full disclosure. Waivers will be promptly disclosed in accordance and compliance with the rules of the SEC.

13. REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR OR VIOLATIONS OF THIS CODE

Employees, officers and directors are encouraged to talk to our executive officers or legal counsel about observed illegal or unethical behavior and when in doubt about the best course of action in a particular situation. It is the Company’s policy not to allow retaliation for reports of misconduct by others made in good faith by employees, officers or directors. Employees, officers and directors are expected to cooperate in internal investigations of misconduct.

14. COMPLIANCE PROCEDURES

The Company must work to ensure prompt and consistent action against violations of this Code. In some situations, it is difficult to know if a violation has occurred. Since the Company cannot anticipate every situation that will arise, it is important that you have a way to approach the Company with a question or problem. These are the steps to take in such case:

• Make sure you have all the facts. In order to reach the right solutions, you must be as fully informed as possible.

• Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense.

• Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others at the Company involved and discuss the problem.

• Discuss the problem with an executive officer. This is the basic guidance for all situations. In many cases, the executive officer will be more knowledgeable about the question, and will appreciate being brought into the decision-making process.

• Seek help from Company resources. In the event that it is not appropriate to discuss an issue with your manager (or you do not have a manager), or where you do not feel comfortable approaching your manager or an executive officer with your question, discuss it with the Chief Executive Officer, the President or any member of the Board.

• You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document protected. The Company does not tolerate retaliation of any kind against employees, officers and directors for good faith reports of potential violations of the Code.

15. DISCLOSURES AND CONTROLS

All employees, officers and directors are responsible for full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications. Accordingly, it is the responsibility of employees, officers and directors promptly to bring, or cause to be brought, to the attention of the persons responsible for creating such disclosures, the Chief Executive Officer, President and Chief Financial Officer, any material information of which he or she may become aware that affects the disclosures made by the Company in its public filings, submissions or communications or otherwise assist such persons in fulfilling their and the Company’s responsibilities with respect to such public filings, submissions or communications.

The Company’s policy is to comply with all applicable financial reporting and accounting SEC regulations applicable to the Company. If any person has concerns or complaints regarding questionable accounting, internal accounting controls, or auditing matters which in any way affect the Company, then he or she is encouraged to submit those concerns or complaints (anonymously, confidentially or otherwise) to the Audit Committee Chairperson in accordance with the Whistleblower Policy of the Company.

All employees, officers and directors of the Company shall promptly bring, or cause to be brought, to the attention of the Audit Committee Chairperson any information he or she may have concerning (a) significant deficiencies and material weaknesses in the design or operation of the Company’s internal controls over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize, and report financial information, or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

16. ACCOUNTABILITY FOR ADHERENCE TO THIS CODE

The Board shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of this Code. Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to this Code, and shall include written notices to the individual involved that the Board or its designee has determined that there has been a violation, and may include censure by the Board or its designee, demotion or reassignment of the individual involved, suspension with or without pay or benefits (as determined by the Board or its designee) and termination of the individual’s employment or other service or actions to remove the individual as a director. In determining what action is appropriate in a particular case, the Board or its designee shall take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action and whether the individual in question had committed other violations in the past.

This Code shall be the code of ethics for all executive officers and senior financial officers of the Company, adopted by the Company for purposes of Item 406 of Regulation S-K promulgated by the SEC.

18. INTERNAL USE

This Code is intended solely for the internal use by the Company and does not constitute an admission by or on behalf of the Company as to any fact, circumstance or legal conclusion.

Adopted: January 30, 2018

CERTIFICATION FOR THE AMENDED AND RESTATED CODE OF BUSINESS CONDUCT AND ETHICS

I have received and read the GTJ REIT, Inc. (the “Company”) Amended and Restated Code of Business Conduct and Ethics (the “Code”). I understand the standards and policies contained in the Code and understand that there may be additional policies or laws specific to my position as an employee, officer or director of the Company. I agree to comply with the Code.

If I have questions concerning the meaning or application of the Code, any Company policies, or the legal and regulatory requirements applicable to my position, I know I can consult an executive officer or the Company’s legal counsel, knowing that my questions or reports to these sources will be maintained in confidence.

_____ Yes, I have read the above Code and certify compliance.

______Name

______Signature

______Date

SUBSIDIARIES OF GTJ REIT, INC.

1. Green Acquisition, Inc. 2. Triboro Acquisition, Inc. 3. Jamaica Acquisition, Inc. 4. GTJ Co., Inc. 5. Green Bus Holding Corp. 6. Jamaica Buses Holding Corp. 7. Triboro Coach Holding Corp. 8. 49-19 Rockaway Beach Boulevard, LLC 9. 165-25 147th Avenue, LLC 10. 114-15 Guy Brewer Boulevard, LLC 11. 85-01 24th Avenue, LLC 12. 23-85 87th Street, LLC 13. 612 Wortman Avenue, LLC 14. Varsity Transit, Inc. 15. Varsity Charter Corp. 16. The Bus Depot, Inc. 17. MetroClean Express Corp. 18. Shelter Express Corp. 19. ShelterCLEAN, Inc. 20. Transit Facility Management Corp. 21. Transit Facility Claims Corp. 22. Transit Alliance Insurance Co. Ltd. 23. Farm Springs Road, LLC 24. ShelterCLEAN of SF, LLC 25. Shelter Parking Corp. 26. Outdoor NY Corp. 27. GTJ GP, LLC 28. GTJ Realty, L.P. 29. GTJ Management LLC 30. GTJ 3920 Fairfax LLC 31. Wu/LH 466 Bridgeport LLC 32. Wu/LH 470 Bridgeport LLC 33. Wu/LH 950 Bridgeport LLC 34. Wu/LH 12 Cascade LLC 35. Wu/LH 15 Executive LLC 36. Wu/LH 35 Executive LLC 37. Wu/LH 15 Progress LLC 38. Wu/LH 22 Marsh Hill LLC 39. Wu/LH 25 Executive LLC 40. Wu/LH 269 Lambert LLC 41. Wu/LH 103 Fairview Park LLC 42. Wu/LH 412 Fairview Park LLC 43. Wu/LH 401 Fieldcrest LLC 44. Wu/LH 404 Fieldcrest LLC 45. Wu/LH 36 Midland LLC 46. Wu/LH 100-110 Midland LLC 47. Wu/LH 112 Midland LLC 48. Wu/LH 199 Ridgewood LLC 49. Wu/LH 203 Ridgewood LLC 50. Wu/LH 8 Slater LLC 51. Wu/LH 100 American LLC 52. Wu/LH 200 American LLC 53. Wu/LH 300 American LLC

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 54. Wu/LH 400 American LLC 55. Wu/LH 500 American LLC 56. GWL 110 Old County LLC

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 57. GWL Windsor Land LLC 58. GWL 20 East Halsey LLC 59. GWL Borden LLC 60. GWL 4 Meadow LLC 61. GWL Platt LLC 62. GWL 1101 Stewart LLC 63. GWL 777 Rocky Hill LLC 64. GWL 1110 Centennial LLC 65. GWL 11 Constitution LLC 66. GWL 21 Constitution LLC 67. GWL 4 Corporate LLC 68. GWL 8 Corporate LLC 69. GWL 25 Corporate LLC 70. GWL 606 Cozine LLC 71. GWL 300 McIntire LLC 72. GWL 1938 Olney LLC 73. GWL 201 Neelytown LLC 74. GWL 2 Corporate JV LLC

Consent of Independent Registered Public Accounting Firm

GTJ REIT, Inc. West Hempstead, New York

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-169557 and 333-218667) of GTJ REIT, Inc. of our report dated March 29, 2018, relating to the consolidated financial statements and financial statement schedule of GTJ REIT, Inc. which appears in this Form 10-K.

/s/ BDO USA, LLP

New York, New York

March 29, 2018

CERTIFICATIONS Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, As Amended, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Paul A. Cooper, certify that: 1. I have reviewed this Annual Report on Form 10-K of GTJ REIT, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 29, 2018 /s/ Paul A. Cooper Paul A. Cooper Chairman and Chief Executive Officer

CERTIFICATIONS Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, As Amended, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Stuart Blau, certify that: 1. I have reviewed this Annual Report on Form 10-K of GTJ REIT, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 29, 2018 /s/ Stuart Blau Stuart Blau Chief Financial Officer

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of GTJ REIT, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission (the “Periodic Report”), I, Paul A. Cooper, Chief Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 29, 2018 /s/ Paul A. Cooper Paul A. Cooper Chairman and Chief Executive Officer

CERTIFICATIONS OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of GTJ REIT, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission (the “Periodic Report”), I, Stuart Blau, Chief Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 29, 2018 /s/ Stuart Blau Stuart Blau Chief Financial Officer

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Document and Entity 12 Months Ended Information - USD ($) Dec. 31, 2017 Mar. 22, 2018Jun. 30, 2017 Document And Entity Information [Abstract] Document Type 10-K Amendment Flag false Document Period End Date Dec. 31, 2017 Document Fiscal Year Focus 2017 Document Fiscal Period Focus FY Trading Symbol CK0001368757 Entity Registrant Name GTJ REIT, Inc. Entity Central Index Key 0001368757 Current Fiscal Year End Date --12-31 Entity Well-known Seasoned Issuer No Entity Current Reporting Status Yes Entity Voluntary Filers No Entity Filer Category Smaller Reporting Company Entity Common Stock, Shares Outstanding 13,589,125 Entity Public Float $ 0

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Balance Sheets Dec. 31, Dec. 31, - USD ($) 2017 2016 $ in Thousands Real estate, at cost: Land $ $ 199,782 193,855 Buildings and improvements 322,404 280,718 Total real estate, at cost 522,186 474,573 Less: accumulated depreciation and amortization (55,136) (45,252) Net real estate held for investment 467,050 429,321 Cash and cash equivalents 8,423 15,932 Rental income in excess of amount billed 16,261 15,793 Acquired lease intangible assets, net 14,576 14,389 Other assets 15,231 12,492 Total assets 521,541 487,927 Liabilities: Mortgage notes payable, net 370,194 335,694 Secured revolving credit facility 35,857 27,775 Accounts payable and accrued expenses 3,608 2,833 Dividends payable 1,359 1,226 Acquired lease intangible liabilities, net 5,867 6,740 Other liabilities 7,070 6,168 Total liabilities 423,955 380,436 Commitments and contingencies (Note 9) Equity: Common stock, $.0001 par value; 100,000,000 shares authorized; 13,594,125 and 13,618,884 1 1 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively Additional paid-in capital 161,812 162,356 Distributions in excess of net income (103,025)(98,420) Total stockholders’ equity 58,788 63,937 Noncontrolling interest 38,798 43,554 Total equity 97,586 107,491 Total liabilities and equity 521,541 487,927 Series A Preferred Stock [Member] Equity: Preferred stock, value Series B Preferred Stock, Non-Voting [Member] Equity: Preferred stock, value

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Balance Sheets Dec. 31, 2017Dec. 31, 2016 (Parenthetical) - $ / shares Preferred stock, par value (in dollars per share) $ 0.0001 $ 0.0001 Preferred stock, shares authorized 10,000,000 10,000,000 Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001 Common stock, shares authorized 100,000,000 100,000,000 Common stock, shares issued 13,594,125 13,618,884 Common stock, shares outstanding 13,594,125 13,618,884 Series A Preferred Stock [Member] Preferred stock, par value (in dollars per share) $ 0.0001 $ 0.0001 Preferred stock, shares authorized 500,000 500,000 Preferred stock, shares issued 0 0 Preferred stock, shares outstanding 0 0 Series B Preferred Stock, Non-Voting [Member] Preferred stock, par value (in dollars per share) $ 0.0001 $ 0.0001 Preferred stock, shares authorized 6,500,000 6,500,000 Preferred stock, shares issued 0 0 Preferred stock, shares outstanding 0 0

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Statements of 12 Months Ended Operations - USD ($) Dec. 31, Dec. 31, $ in Thousands 2017 2016 Revenues: Rental income $ 44,713 $ 41,965 Tenant reimbursements 8,459 7,732 Total revenues 53,172 49,697 Expenses: General and administrative 8,802 7,232 Acquisition costs 446 561 Property operating expenses 9,897 9,335 Depreciation and amortization 13,501 12,581 Total expenses 32,646 29,709 Operating income 20,526 19,988 Interest expense (16,389) (15,334) Other (541) (514) Net income from operations 3,596 4,140 Less: Net income attributable to noncontrolling interest 1,247 1,506 Net income attributable to common stockholders $ 2,349 $ 2,634 Net income per common share attributable to common stockholders-basic and diluted $ 0.17 $ 0.19 earnings per share Weighted average common shares outstanding-basic 13,646,345 13,858,540 Weighted average common shares outstanding-diluted 13,668,680 13,889,739

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Additional- Distributions in Total Consolidated Statements of Common Noncontrolling Paid-In- Excess of Net Stockholders' Equity - USD ($) Total Stock Interests Capital Income Equity $ in Thousands [Member] [Member] [Member] [Member] [Member] Beginning Balance at Dec. 31, $ $ 1 $ 139,385 $ (96,081) $ 43,305 $ 68,526 2015 111,831 Beginning Balance (in shares) 13,820,434 at Dec. 31, 2015 Distributions – common stock (4,973) (4,973) (4,973) Repurchases – common stock (1,248) (1,248) (1,248) Stock-based compensation 539 539 539 Issuance of restricted shares 61,467 Retirement of Shares (in (263,017) shares) Distributions to noncontrolling (2,798) (2,798) interest Reallocation of equity 23,680 23,680 (23,680) Net income from operations 4,140 2,634 2,634 1,506 Ending Balance at Dec. 31, 107,491$ 1 162,356 (98,420) 63,937 43,554 2016 Ending Balance (in shares) at 13,618,884 Dec. 31, 2016 Distributions – common stock (6,954) (6,954) (6,954) Repurchases – common stock (1,038) (1,038) (1,038) Stock-based compensation 718 718 718 Issuance of restricted shares 57,927 Retirement of Shares (in (82,686) shares) Distributions to noncontrolling (6,227) (6,227) interest Reallocation of equity (224) (224) 224 Net income from operations 3,596 2,349 2,349 1,247 Ending Balance at Dec. 31, $ $ 1 $ 161,812 $ (103,025) $ 58,788 $ 38,798 2017 97,586 Ending Balance (in shares) at 13,594,125 Dec. 31, 2017

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Statements of 12 Months Ended Cash Flows - USD ($) Dec. 31, Dec. 31, $ in Thousands 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net income from operations $ 3,596 $ 4,140 Adjustments to reconcile net income from operations to net cash provided by operating activities Depreciation 9,944 8,909 Amortization of intangible assets and deferred charges 4,276 4,046 Stock-based compensation 718 539 Rental income in excess of amount billed (468) (621) Loss from equity investment in limited partnership 198 399 Changes in operating assets and liabilities: Restricted cash (1,166) (74) Other assets (1,327) (1,301) Accounts payable and accrued expenses 774 320 Other liabilities 906 543 Net cash provided by operating activities 17,451 16,900 Cash flow from investing activities: Cash paid for property acquisitions (43,824) (27,038) Cash paid for property improvements (8,423) (6,514) Contract deposits (670) 238 Restricted cash 280 1,294 Net cash used in investing activities (52,637) (32,020) Cash flow from financing activities: Proceeds from mortgage notes payable 39,000 Financing costs on debt (1,391) Payment of mortgage principal (3,924) (893) Repayment of bridge loan / revolving credit facility (37,475) Proceeds from revolving credit facility 45,557 27,775 Cash distributions to noncontrolling interests (6,231) (3,352) Cash dividends paid (6,821) (6,235) Repurchases of common stock (1,038) (1,248) Net cash provided by financing activities 27,677 16,047 Net (decrease) increase in cash and cash equivalents (7,509) 927 Cash and cash equivalents at the beginning of period 15,932 15,005 Cash and cash equivalents at the end of period 8,423 15,932 Supplemental cash flow information: Cash paid for interest, net of amount capitalized of $237 for 2017 15,254 14,431 Cash paid for income taxes $ 100 $ 43

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Organization and 12 Months Ended Description of Business Dec. 31, 2017 Organization Consolidation And Presentation Of Financial Statements [Abstract] Organization and Description 1. ORGANIZATION AND DESCRIPTION OF BUSINESS: of Business GTJ REIT, Inc. (the “Company” or “GTJ REIT”) was incorporated on June 26, 2006, under Maryland General Corporation Law. The Company is focused primarily on the acquisition, ownership, management, and operation of commercial real estate located in New York, New Jersey, Connecticut and Delaware.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant 12 Months Ended Accounting Policies Dec. 31, 2017 Accounting Policies [Abstract] Summary of Significant 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Accounting Policies Basis of Presentation: The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the financial statements of the Company, its wholly owned subsidiaries, and the Operating Partnership, as the Company makes all operating and financial decisions for (i.e., exercises control over) the Operating Partnership. All material intercompany transactions have been eliminated in consolidation. The ownership interests of the other investors in the Operating Partnership are recorded as noncontrolling interests.

During the twelve months ended December 31, 2016, the Company determined that certain transactions involving the issuance of limited partnership interests of the Operating Partnership, should have resulted in a reallocation between the Operating Partnership’s noncontrolling interest (“OP NCI”) and Additional Paid-in-Capital (“APIC”) to reflect the difference between the fair value of the consideration received and the book value of the OP NCI attributable to limited partnership interests at the time of the issuance (the “Reallocation”). During the twelve months ended December 31, 2016, the Company increased its APIC with an offsetting reduction to OP NCI of approximately $23.7 million. During the twelve months ended December 31, 2017, the Company decreased its APIC with an offsetting increase to OP NCI of approximately $0.2 million. The Company concluded that these Reallocation adjustments are not meaningful to the Company’s financial position for any of the prior years, and as such these cumulative changes were recorded in the Consolidated Balance Sheets and Statement of Stockholders’ Equity in 2016 and 2017. These Reallocations have no impact on the previously reported Statement of Operations or Cash Flows.

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

Use of Estimates: The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. All of these estimates reflect management’s best judgment about current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. If such conditions persist longer or deteriorate further than expected, it is reasonably possible that the judgments and estimates could change, which may result in impairments of certain assets. Significant estimates include the useful lives of long- lived assets including property, equipment and intangible assets, impairment of assets, collectability of receivables, contingencies, stock-based compensation, and fair value of assets and liabilities acquired in business combinations.

Real Estate: Real estate assets are stated at cost, less accumulated depreciation and amortization. All costs related to the improvement or replacement of real estate properties are capitalized.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Additions, renovations, and improvements that enhance and/or extend the useful life of a property are also capitalized. Expenditures for ordinary maintenance, repairs, and improvements that do not materially prolong the normal useful life of an asset, are charged to operations as incurred.

Upon the acquisition of real estate properties, the fair value of the real estate purchased is allocated to the acquired tangible assets (generally consisting of land, buildings and building improvements, and tenant improvements) and identified intangible assets and liabilities (generally consisting of above-market and below-market leases and the origination value of in-place leases) in accordance with GAAP. We utilize methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities. The fair value of the tangible assets of an acquired property considers the value of the property “as-if-vacant.” In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above- market and below-market leases is estimated based on the differences between contractual rentals and the estimated market rents over the applicable lease term discounted back to the date of acquisition utilizing a discount rate adjusted for the credit risk associated with the respective tenants. The aggregate value of in-place leases is measured based on the avoided costs associated with lack of revenue over a market oriented lease-up period, the avoided leasing commissions, and other avoided costs common in similar leasing transactions.

Mortgage notes payable assumed in connection with acquisitions are recorded at their fair value using current market interest rates for similar debt at the time of acquisitions. Acquisition-related costs are expensed as incurred. The capitalized above-market lease values are amortized as a reduction of rental revenue over the remaining term of the respective leases and the capitalized below-market lease values are amortized as an increase to rental revenue over the remaining term of the respective leases. The value of in-place leases is based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during expected lease-up periods, current market conditions, and costs to execute similar leases. The values of in-place leases are amortized over the remaining term of the respective leases. If a tenant vacates its space prior to its contractual expiration date, any unamortized balance of the related intangible assets or liabilities is recorded as income or expense in the period. The total net impact to rental revenues due to the amortization of above-market and below-market leases was a net increase in rental revenue of approximately $0.4 million and $0.5 million for the years ended December 31, 2017 and December 31, 2016, respectively.

The following table presents the projected increase to rental revenue from the amortization of the acquired above-market and below-market lease intangibles and the increase to amortization expense of the in-place lease intangibles for properties owned at December 31, 2017, over the next five years and thereafter (in thousands):

Increase to Net increase to amortization rental revenues expense 2018 $ 551 $ 2,272 2019 560 1,955 2020 660 1,627 2021 510 1,400 2022 533 1,344 Thereafter 1,609 4,534

Depreciation and Amortization: The Company uses the straight-line method for depreciation and amortization. Properties and property improvements are depreciated over their estimated useful lives, which range from 5 to 40 years. Furniture, fixtures, and equipment are depreciated over estimated useful lives that range from 5 to 10 years. Tenant improvements are amortized over the shorter of the remaining non-cancellable term of the related leases or their useful lives.

Asset Impairment: Management reviews each real estate investment for impairment whenever events or circumstances indicate that the carrying value of a real estate investment may not be recoverable. The review of recoverability is based on an estimate of the undiscounted future cash flows that are expected to result from the real estate investment’s use and eventual disposition. Such cash flow analyses consider factors such as expected future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If an impairment event exists due to the projected inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds estimated fair value. Management is required to make subjective assessments as to whether there are impairments in the value of the Company’s real estate holdings. These assessments could have a direct impact on net income, because an impairment loss is recognized in the period that the assessment is made. Management has determined that there were no indicators of impairment relating to its long-lived assets at December 31, 2017.

Reportable Segments: As of December 31, 2017, the Company primarily operated in one reportable segment, commercial real estate.

Property operating expense recoveries from tenants of common area maintenance, real estate taxes, and other recoverable costs are recognized as revenues in the period that the related expenses are incurred.

Earnings Per Share Information:

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company presents both basic and diluted earnings per share. Basic earnings per share excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower per share amount. Restricted stock was included in the computation of diluted earnings per share. Stock option awards were included in the computation of earnings per share in 2017 and 2016 because the option awards were dilutive.

Cash and Cash Equivalents: The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Income Taxes: The Company is organized and conducts its operations to qualify as a REIT for Federal income tax purposes. Accordingly, the Company is generally not subject to Federal income

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document taxation on the portion of its distributable income that qualifies as REIT taxable income, to the extent that it distributes at least 90% of its REIT taxable income to its stockholders and complies with certain other requirements as defined in the Code.

The Company also participates in certain activities conducted by entities which elected to be treated as taxable subsidiaries under the Code. As such, the Company is subject to federal, state, and local taxes on the income from these activities.

Contractual rent of $9.7 million, derived from five leases with the City of New York, for the year ended December 31, 2017, represented 22% of the Company’s total contractual rental income.

Stock-Based Compensation: The Company has a stock-based compensation plan, which is described below in Note 6. The Company accounts for stock-based compensation in accordance with ASC 718, which establishes accounting for stock-based awards. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document expensed at the grant date (for the portion that vests immediately) or ratably over the respective vesting periods.

New Accounting Pronouncements: In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 clarifies Topic 718 such that an entity must apply modification accounting to changes in the terms or conditions of a share-based payment award unless all of the following criteria are met: (a) the fair value of the modified award is the same as the fair value of the original award immediately before the modification, (b) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the modification, and (c) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the modification. The amendments are effective for all entities for fiscal years beginning after December 15, 2017, including interim periods within those years. Early adoption was permitted. The adoption of ASU 2017-09 is not expected to have a material impact on the Company’s consolidated financial statements. In February 2017, the FASB issued ASU No. 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU 2017-05 was issued to clarify the scope of Subtopic 610-20 and to add guidance for partial sales of nonfinancial assets, including partial sales of real estate. ASU 2017-05 clarifies the scope of Subtopic 610-20 by defining the term “in substance nonfinancial asset.” If substantially all of the fair value of the assets (recognized and unrecognized) promised to a counterparty in a contract is concentrated in nonfinancial assets, a financial asset in the same arrangement would still be considered part of an “in substance nonfinancial asset”. Additionally, ASU 2017-05 indicates an entity should identify each distinct nonfinancial asset (e.g., real estate and inventory) or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. ASU 2017-05 requires an entity to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when two criteria are met: 1) the entity does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Topic 810, and 2) the entity transfers control of the asset in accordance with Topic 606. The effective date and transition requirements of ASU 2017-05 are the same as Topic 606. The amendments are effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The adoption of ASU 2017-05 is not expected to have a material impact on the Company’s consolidated financial statements.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document transfers between cash and restricted cash will not be presented as a separate line item in the operating, investing or financing sections of the cash flow statement. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years and should be applied retrospectively. Early adoption was permitted. The adoption of ASU 2016-18 is not expected to have a material impact on the Company’s consolidated financial position or cash flows.

In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323) - Simplifying the Transition to the Equity Method of Accounting.” ASU 2016-07 requires an investor to initially apply the equity method of accounting from the date it qualifies for that method, such as the date the investor obtains significant influence over the operating and financial policies of an investee. It eliminates the previous requirement to retroactively adjust the investment and record a cumulative catch up for the periods that the investment had been held, but did not qualify for the equity method of accounting. ASU 2016-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively to increases in the level of ownership interest or degree of influence that result in the application of the equity method. The adoption of ASU 2016-07 did not have a material impact on the Company’s consolidated financial statements.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document statements. As a lessee, the Company is a party to an office lease with future lease obligations aggregating to $838,694, as of December 31, 2017, for which the Company expects to record right-of-use assets upon the adoption of ASU 2016-02.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Real Estate Dec. 31, 2017 Real Estate [Abstract] Real Estate 3. REAL ESTATE: The changes in real estate for the years ended December 31, 2017 and 2016 are as follows (in thousands):

2017 2016 Balance at beginning of year $ 474,573 $ 442,765 Property acquisitions 39,190 25,294 Improvements 8,423 6,514 Balance at end of year $ 522,186 $ 474,573

The changes in accumulated depreciation, exclusive of amounts relating to equipment, transportation equipment, and furniture and fixtures, for the years ended December 31, 2017 and 2016 are as follows (in thousands):

2017 2016 Balance at beginning of year $ 45,252 $ 36,412 Depreciation for year 9,884 8,840 Balance at end of year $ 55,136 $ 45,252

Montgomery, New York On August 31, 2017, the Company acquired a 248,370 square-foot warehouse/ distribution facility in Montgomery, New York for $36.2 million. The property is leased to FedEx Ground Package System, Inc. for a term that expires on February 28, 2027. The purchase was financed through the Company’s secured revolving credit facility with Key Bank.

Purchase Price Allocations:

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The purchase prices of the above acquisitions were allocated to the acquired assets and assumed liabilities based on their estimated fair values at the date of acquisition.

The following table summarizes the Company’s allocation of the purchase prices of assets acquired and liabilities assumed during 2017 and 2016 (in thousands):

2017 2016 Land $ 5,927 $ 5,792 Building and Improvements 33,263 19,502 Acquired lease intangibles assets, net 3,059 674 Other assets and costs 1,575 1,070 Total Consideration $ 43,824 $ 27,038

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Mortgage Notes Payable Dec. 31, 2017 Debt Disclosure [Abstract] Mortgage Notes Payable 4. MORTGAGE NOTES PAYABLE: The following table sets forth a summary of the Company’s mortgage notes payable (in thousands):

Principal Principal Outstanding as of Outstanding as of December Loan Interest Rate 31, 2017 December 31, 2016 Maturity Athene Annuity & Life Company 3.00% $ 15,000 $ 15,000 3/1/2018 Genworth Life Insurance 4/30/ Company 3.20% 26,574 27,424 2018 Hartford Accident & Indemnity Company 5.20% 6,000 9,000 3/1/2020 10/1/ People’s United Bank 5.23% 2,249 2,323 2020 10/15/ People’s United Bank 4.18% 15,500 15,500 2024 American International Group 4.05% 233,100 233,100 3/1/2025 Allstate Corporation 4.00% 39,100 39,100 4/1/2025 United States Life Insurance Company 3.82% 39,000 — 1/1/2028 Subtotal 376,523 341,447 Unamortized loan costs (6,329) (5,771) Unamortized premiums — 18 Total $ 370,194 $ 335,694

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document $50.2 million to Hartford Accident and Indemnity Company and (iv) $25.1 million to United States Life Insurance Company thereby paying off and terminating these obligations.

Genworth Loan Agreement: On April 3, 2013, four wholly owned subsidiaries of the Operating Partnership (collectively, the “Genworth Borrower”) entered into mortgage loan agreements with Genworth Life Insurance Company (the “Genworth Lender”), in the aggregate principal amount of $29.5 million. The loan bears interest at a rate of 3.20% and matures on April 30, 2018. The loan is evidenced by promissory notes of $14.4 million (the “New York Note”) and $15.1 million (the “New Jersey Note”), hereinafter referred to as the (“Notes”).

United States Life Insurance Company Loan Agreement:

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document On December 20, 2017, (the “Closing Date”) four wholly owned subsidiaries of the Operating Partnership (collectively, the “U.S. Life Borrowers”) entered in a loan agreement (the “U.S. Life Loan Agreement”) with the United States Life Insurance Company in the City of New York (the “Lender”).

Loan Assumptions: Certain of the properties acquired discussed above were encumbered by certain mortgage indebtedness. Concurrent with the acquisition of these properties, the Company, the Operating Partnership and the entity owners of the properties acquired entered into certain loan assumption and modification documents to facilitate the acquisition of the properties acquired. Below is a summary of the material terms of the arrangement with each lender.

People’s United Bank Loan: Wu/LH 15 Progress Drive L.L.C., a wholly owned subsidiary of the Operating Partnership, entered into a $2.7 million mortgage loan with the bank, on September 30, 2010. The loan is secured by the properties located at 15 Progress Road and 30 Commerce Drive, Shelton, Connecticut and bears interest at a rate of 5.23%. The Operating Partnership is required to make monthly payments of principal and interest until the loan matures on October 1, 2020. The obligations under this loan agreement are also guaranteed by GTJ REIT.

In connection with the loan agreements, the Company is required to comply with certain covenants. As of December 31, 2017, the Company was in compliance with all covenants.

Principal Repayments:

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Scheduled principal repayments during the next five years and thereafter are as follows (in thousands):

2018 $ 42,108 2019 789 2020 8,825 2021 852 2022 1,157 Thereafter 322,792 Total $ 376,523

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Secured Revolving Credit 12 Months Ended Facility Dec. 31, 2017 Line Of Credit Facility [Abstract] Secured Revolving Credit 5. SECURED REVOLVING CREDIT FACILITY: Facility Key Bank Loan Agreement: On December 2, 2015, the Operating Partnership entered into a Credit Agreement (the “Credit Agreement”) with Keybank National Association and Keybanc Capital Markets Inc., as lead arranger (collectively, “Key Bank”). The Credit Agreement contemplated a $50.0 million revolving line of credit facility, with an initial term of two years, with a one-year extension option, subject to certain other customary conditions.

Due to the revolving nature of the facility, amounts prepaid under the facility may be borrowed again. The Credit Agreement contemplates (i) mandatory prepayments by the Operating Partnership of any borrowings under the facility in excess of the total allowable commitment, among other events, and (ii) optional prepayments, without any penalty or premium, in whole or in part, subject to payments of any amounts due associated with the prepayment of LIBOR rate contracts.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document transactions of this sort including, among others, those related to a default in the payment of principal or interest, a material inaccuracy of a representation or warranty, and a default with regard to performance of certain covenants. The Credit Agreement includes customary representations and warranties of the Operating Partnership which must continue to be true and correct in all material respects as a condition to future draws. In addition, the Credit Agreement also includes customary events of default (in certain cases subject to customary cure), in the event of which, amounts outstanding under the facility may be accelerated.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Stockholders' Equity Dec. 31, 2017 Equity [Abstract] Stockholders' Equity 6. STOCKHOLDERS’ EQUITY: Preferred Stock: The Company is authorized to issue 10,000,000 shares of preferred stock, $.0001 par value per share. Voting and other rights and preferences may be determined from time to time by the Board of Directors (the “Board of Directors” or “Board”) of the Company. The Company has designated 500,000 shares of preferred stock as Series A preferred stock, $.0001 par value per share. In addition, the Company has designated 6,500,000 shares of preferred stock as Series B preferred stock, $.0001 par value per share. There are no voting rights associated with the Series B preferred stock. There was no Series A preferred stock or Series B preferred stock outstanding as of December 31, 2017, or December 31, 2016.

Common Stock: The Company is authorized to issue 100,000,000 shares of common stock, $.0001 par value per share. As of December 31, 2017, and 2016, the Company had a total of 13,594,125 and 13,618,884 shares issued and outstanding, respectively.

Dividend Distributions: The following table presents dividends declared by the Company on its common stock during 2017 and 2016:

Record Payment Dividend Declaration Date Date Date Per Share March 24, April 10, 2016 April 15, 2016 0.09 2016 June 09, 2016 June 30, 2016 July 15, 2016 0.09 August 09, September 30, 2016 October 11, 2016 0.09 2016 November 08, December 31, 2016 January 13, 2017 0.09 2016 January 31, March 31, 2017 April 12, 2017 0.10 2017 March 23, April 4, 2017 April 14, 2017 0.11 (1) 2017 June 08, 2017 June 30, 2017 July 14, 2017 0.10 August 08, September 30, 2017 October 13, 2017 0.10 2017 November 07, December 31, 2017 January 15, 2018 0.10 2017 (1) Represents a supplemental 2016 dividend.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Stock Based Compensation: On June 11, 2007, the Board of Directors approved the Company’s 2007 Incentive Award Plan (the “2007 Plan”). The 2007 Plan covered directors, officers, key employees and consultants of the Company. The purposes of the 2007 Plan was to further the growth, development, and financial success of the Company and to obtain and retain the services of the individuals considered essential to the long-term success of the Company. The 2007 Plan provided for awards in the form of restricted shares, incentive stock options, non-qualified stock options and stock appreciation rights. The aggregate number of shares of common stock which may have been awarded under the 2007 Plan was 1,000,000 shares. The 2007 Plan expired by its terms on June 11, 2017. The 2017 Incentive Award Plan (the “2017 Plan”) was adopted by the Board and became effective on April 24, 2017, subject to the approval of the Company’s stockholders which was obtained on June 8, 2017. The 2017 Plan has intended purposes to further the growth, development, and financial success of the Company and to obtain and retain the services of those individuals considered essential to the long-term success of the Company. The 2017 Plan provides for awards in the form of stock, stock units, incentive stock options, non-qualified stock options and stock appreciation rights. The aggregate number of shares of common stock which may be awarded under the 2017 Plan is 2,000,000 shares. As of December 31, 2017, the Company had 2,000,000 shares available for future issuance under the 2017 Plan. Dividends paid on restricted shares are recorded as dividends on shares of the Company’s common stock whether or not they are vested. In accordance with ASC 718-10-35, the Company measures the compensation costs for these shares as of the date of the grant and the expense is recognized in earnings, at the grant date (for the portion that vest immediately) and then ratably over the respective vesting periods.

On March 21, 2013, the Company issued an aggregate of 50,002 restricted shares of common stock, with a value of approximately $320,000, under the 2007 Plan. A total of 3,126 of these shares, with a value of approximately $20,000 (based upon an estimated value of $6.40 per share), were granted to non-management members of the Board of Directors, and vested immediately. The remaining 46,876 shares, with a value of approximately $300,000 (based upon an estimated value of $6.40 per share), were granted to certain executives of the Company, and vested ratably over a four year period. One fourth of the shares granted to the executives vested on the grant date and one fourth vested each year on the following dates: March 21, 2014, March 21, 2015, and March 21, 2016.

On June 6, 2013, the Company issued an aggregate of 9,378 restricted shares of common stock, with a value of approximately $60,000 (based upon an estimated value of $6.40 per share),

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document under the 2007 Plan. These shares were granted to non-management members of the Board of Directors and vested immediately.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document For the years ended December 31, 2017 and 2016, the Company’s total stock compensation expense was approximately $718,000 and $539,000, respectively. As of December 31, 2017, there was approximately $433,000 of unamortized stock compensation related to restricted stock. The cost is expected to be recognized over a weighted average period of 1.9 years.

At December 31, 2017, 220,000 stock options were outstanding, 40,000 of which were exercisable, and 442,787 shares of restricted stock were outstanding, 402,406 of which were vested.

The following is an amortization schedule of the total unamortized shares of restricted stock outstanding as of December 31, 2017: Number of Non-vested Shares Amortization Schedule Shares 2018 17,673 2019 10,202 2020 5,235 2021 2,731 2022 1,785 2023 1,291 Thereafter 1,464 Total Non-vested Shares 40,381

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Earnings (Loss) per Share Dec. 31, 2017 Earnings Per Share [Abstract] Earnings (Loss) per Share 7. EARNINGS (LOSS) PER SHARE: In accordance with ASC 260-10-45, basic earnings per common share (“Basic EPS”) is computed by dividing the net income by the weighted-average number of common shares outstanding. Diluted earnings per common share (“Diluted EPS”) is computed by dividing net income by the weighted-average number of common shares and dilutive common share equivalents then outstanding. There were 22,335 and 31,199 common share equivalents in 2017 and 2016, respectively, presented in diluted earnings per share.

The following table sets forth the computation of basic and diluted earnings per share information for the years ended December 31, 2017 and 2016 (in thousands, except share and per share data):

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Related Party Transactions Dec. 31, 2017 Related Party Transactions [Abstract] Related Party Transactions 8. RELATED PARTY TRANSACTIONS: Paul Cooper, the Chairman and Chief Executive Officer of the Company, and Louis Sheinker, the President, Secretary and Chief Operating Officer of the Company, each hold passive, minority ownership interests in a real estate brokerage firm, The Rochlin Organization. The firm acted as the exclusive broker for one of the Company’s properties. In 2013, the firm introduced a new tenant to the property, resulting in the execution of a lease agreement and a subsequent lease modification. The firm earned aggregate brokerage cash commissions of approximately $60,000 based on a total lease value of $1,015,000. In January 2014, the new tenant expanded further which resulted in approximately $95,000 of brokerage commissions on the additional lease modification value of $2,100,000. In November 2015, the tenant concluded negotiations to expand by an additional 35,000 square feet which resulted in approximately $12,000 of brokerage commissions on the additional lease modification value of $200,000. In December 2016, the tenant concluded negotiations to expand by an additional 35,000 square feet which resulted in approximately $10,000 of brokerage commissions on the additional lease modification value of $332,000.

The Company’s executive and administrative offices, located at 60 Hempstead Avenue, West Hempstead, New York, are being leased from Lighthouse Sixty, L.P., a partnership of which Paul Cooper and Louis Sheinker are managing members of the general partner. The lease agreement expires in 2020 and has a current annual base rent of approximately $298,000 with aggregate lease payments totaling $1.8 million.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Commitments and 12 Months Ended Contingencies Dec. 31, 2017 Commitments And Contingencies Disclosure [Abstract] Commitments and 9. COMMITMENTS AND CONTINGENCIES: Contingencies Legal Matters: The Company is involved in lawsuits and other disputes which arise in the ordinary course of business. However, management believes that these matters will not have a material adverse effect, individually or in the aggregate, on the Company’s financial position or results of operations.

Letter of Credit: On November 4, 2015, the Company posted a $957,708 Letter of Credit with Bank of America, N.A., in connection with a performance guarantee to complete certain site improvements at 20 East Halsey Road in Parsippany, New Jersey. The Township of Parsippany- Troy Hills was the beneficiary. The term was for one year plus applicable extensions. On October 18, 2016, the beneficiary issued a resolution releasing the Letter of Credit as the site improvements were satisfactorily completed. The Letter of Credit was cancelled on October 31, 2016.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Fair Value Dec. 31, 2017 Fair Value Disclosures [Abstract] Fair Value 10. FAIR VALUE: Fair Value of Financial Instruments: The fair value of the Company’s financial instruments are determined based upon applicable accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3).

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Other Retirement Benefits Dec. 31, 2017 Compensation And Retirement Disclosure [Abstract] Other Retirement Benefits 11. OTHER RETIREMENT BENEFITS: Other Retirement Benefits: The Company sponsors retirement benefits under a defined contribution 401(k) plan which covers all employees who have completed one year of service and are at least 21 years of age. Contributions to this plan and charged to benefit costs for the years ended December 31, 2017 and 2016 were approximately $49,000 and $42,000, respectively. In November 2016, the Board of Directors of the Company approved the implementation of a profit sharing contribution component to its existing 401(k) plan. Contributions to this component of the plan and charged to benefits costs for the year ended December 31, 2017 were approximately $184,000, consisting of approximately $90,000 and $94,000 attributable to the plan years ended December 31, 2017 and December 31, 2016, respectively.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Income Taxes Dec. 31, 2017 Income Tax Disclosure [Abstract] Income Taxes 12. INCOME TAXES: The Company elected to be taxed as a REIT under the Code. A REIT will generally not be subject to federal income taxation on that portion of its income that qualifies as REIT taxable income, to the extent that it distributes at least 90% of its taxable income to its stockholders and complies with certain other requirements. It is management’s intention to adhere to these requirements and maintain the Company’s REIT status. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable minimum tax and may not be able to qualify as a REIT for four subsequent taxable years). Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries are subject to federal, state, and local income taxes.

The Act signed into law by the President on December 22, 2017 makes significant changes to the Code, including changes that impact REITs and their shareholders, among others. In particular, the Act reduces the maximum corporate tax rate from 35% to 21%. In addition, for tax years beginning before January 1, 2026, the Act permits up to a 20% deduction for individuals, trusts, and estates with respect to their receipt of “qualified REIT dividends”, which are dividends from a REIT that are not capital gain dividends and are not qualified dividend income. This provides closer parity between the treatment under the new law of ordinary REIT dividends and qualified dividends. These changes generally result in an effective maximum U.S. federal income tax rate on such dividends of 29.6%, if the deduction is allowed in full. However, by reducing the corporate tax rate, it is possible that the Act will nevertheless reduce the relative attractiveness to investors (as compared with potential alternative investments) of the generally single level of taxation on REIT distributions. Although certain changes to the Code are generally advantageous to REITs and their shareholders, the full ramifications of the Act remain unclear and will likely remain unclear for an indeterminate period of time. Key provisions of the Act that could impact us and the value of our shares include the following: • temporarily reducing individual U.S. federal income tax rates on ordinary income; the highest individual U.S. federal income tax rate is reduced from 39.6% to 37% (through tax years beginning before January 1, 2026), while

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document eliminating miscellaneous itemized deductions and limiting state and local tax deductions; • reducing the maximum corporate income tax rate from 35% to 21%, which reduces, but does not eliminate, the competitive advantage that REITs enjoy relative to non-REIT corporations; • permitting (subject to certain limitations) a deduction for certain pass-through business income, including, as noted above, dividends received by our stockholders that are not designated by us as capital gain dividends or qualified dividend income, which will allow individuals, trusts, and estates to deduct up to 20% of such amounts, generally resulting in an effective maximum U.S. federal income tax rate of 29.6% on such dividends, if the deduction is allowed in full (through tax years beginning before January 1, 2026); • reducing the highest rate of withholding with respect to our distributions to non- U.S. stockholders that are treated as attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%; • limiting our deduction for net operating losses to 80% of taxable income (prior to the application of the dividends paid deduction), where taxable income is determined without regarding to the net operating loss deduction itself, and generally eliminating net operating loss carrybacks and allowing unused net operating losses to be carried forward indefinitely; • amending the limitation on the deduction of net interest expense for all businesses, other than certain electing real estate businesses (which could adversely affect any of our taxable REIT subsidiaries (each, a “TRS”), including any new TRS that we may form); • expanding the ability of businesses to deduct the cost of certain purchases of property in the year in which such property is purchased; and • eliminating the corporate alternative minimum tax.

Reconciliation between GAAP Income From Continuing Operations and Federal Taxable Income: The following table reconciles GAAP income from continuing operations to taxable income for the years ended December 31, 2017 and 2016 (in thousands):

We have determined for income tax purposes that the 2017 and 2016 regular dividends were considered ordinary dividends.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Future Minimum Rent 12 Months Ended Schedule Dec. 31, 2017 Leases [Abstract] Future Minimum Rent 13. FUTURE MINIMUM RENT SCHEDULE: Schedule Future minimum contractual lease payments to be received by the Company (without taking into account straight-line rent or amortization of intangibles) as of December 31, 2017, under operating leases for the next five years and thereafter are as follows (in thousands):

2018 $ 45,756 2019 42,795 2020 39,866 2021 37,648 2022 33,537 Thereafter 118,649 Total $ 318,251

The lease agreements generally contain provisions for the reimbursement of real estate taxes and operating expenses, as well as fixed increases in rent.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Selected Quarterly Data Dec. 31, 2017 Quarterly Financial Information Disclosure [Abstract] Selected Quarterly Data 14. SELECTED QUARTERLY DATA (Unaudited): The summarized selected quarterly data for the years ended December 31, 2017 and 2016 are as follows (in thousands except per share data).

September December Year March 31 June 30 30 31 2017 Revenues $ 12,928 $ 12,583 $ 13,393 $ 14,268 Net income attributable to common stockholders 709 88 421 1,131 Per common share (basic and diluted)(a) 0.05 0.01 0.03 0.08 2016 Revenues 12,166 12,236 12,691 12,604 Net income attributable to common stockholders 144 853 1,051 586 Per common share (basic and diluted)(a) $ 0.01 $ 0.06 $ 0.08 $ 0.04 (a) Differences between the sum of the four quarterly per share amounts and the annual per share amount are attributable to the effect of the weighted average outstanding share calculations for the respective periods.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Subsequent Events Dec. 31, 2017 Subsequent Events [Abstract] Subsequent Events 15. SUBSEQUENT EVENTS:

Purchase of Securities

Financings

On February 27, 2018, the Company paid its mortgage note payable with Athene Annuity & Life Company in the amount of $15,000,000 from funds available from its secured revolving credit facility.

Acquisition

Related Parties

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document On February 9, 2018, the Company received a distribution of $3.7 million from Garden 1101 Stewart, LP, representing its initial share of the proceeds from the sale of the partnership assets.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Schedule III- Consolidated 12 Months Ended Real Estate and Dec. 31, 2017 Accumulated Depreciation Real Estate And Accumulated Depreciation Disclosure [Abstract] Schedule III- Consolidated GTJ REIT, Inc Real Estate and Accumulated Schedule III- Consolidated Real Estate and Accumulated Depreciation (in thousands) Depreciation Cost Capitalized Gross Amount at Initial Cost to Subsequent to Which Carried at Company Acquisition December 31, 2017 Buildings & Buildings & Accumulated Date of Date Property Encumbrances Land Improvements Improvements Land Improvements Total Depreciation Construction Acquired New York Industrial: 103 Fairview Park 1/17/ 3,416 9,972 375 3,416 10,347 13,763 1,480 1988 Drive, Elmsford, NY B 2013 412 Fairview Park 1/17/ 3,237 572 — 3,237 572 3,809 71 n/a Drive, Elmsford, NY F 2013 401 Fieldcrest 1/17/ 3,008 7,097 — 3,008 7,097 10,105 913 n/a Drive, Elmsford, NY F 2013 404 Fieldcrest 1/17/ 2,275 7,822 303 2,275 8,125 10,400 1,084 1996 Drive, Elmsford, NY B 2013 36 Midland Ave, 1/17/ 2,428 6,409 391 2,428 6,800 9,228 938 1979 Port Chester, NY F 2013 100-110 Midland 1/17/ Ave, Port Chester, 5,390 16,463 113 5,390 16,576 21,966 2,180 1979 2013 NY F 199 Ridgewood 1/17/ 827 1,916 — 827 1,916 2,743 288 1992 Drive, Elmsford, NY F 2013 203 Ridgewood 1/17/ 948 2,265 — 948 2,265 3,213 333 1986 Drive, Elmsford, NY F 2013 8 Slater Street, Port 1/17/ 1,997 4,640 382 1,997 5,022 7,019 756 1984 Chester, NY F 2013 612 Wortman Ave, 3/26/ 8,907 117 4,284 8,907 4,401 13,308 3,402 1965 Brooklyn, NY F 2007 165-25 147th Ave, 3/26/ 360 3,821 856 360 4,677 5,037 4,677 1952 Jamaica, NY F 2007 114-15 Guy Brewer 3/26/ 23,100 6 2,067 23,100 2,073 25,173 2,073 1965 Blvd, Jamaica, NY F 2007 49-19 Rockaway 3/26/ Beach Blvd, Far 74 783 31 74 814 888 812 1931 2007 Rockaway, NY F 85-01 24th Ave, East 3/26/ 38,210 937 2,343 38,210 3,280 41,490 3,038 1954 Elmhurst, NY F 2007 23-85 87th Street, 3/26/ 14,506 323 1,168 14,637 1,360 15,997 1,081 1966 East Elmhurst, NY F 2007 28-20 Borden Ave, Long Island City, 26,678 98 125 26,678 223 26,901 90 n/a 7/2/2014 NY E 606 Cozine Ave, 5/10/ 3,304 6,469 — 3,304 6,469 9,773 719 1969 Brooklyn, NY H 2016 201 Neelytown 8/31/ Road, Montgomery, 4,751 27,906 — 4,751 27,906 32,657 289 2017 2017 NY H Retail: 112 Midland Ave, 3/26/ 786 422 — 786 422 1,208 88 1980 Port Chester, NY F 2007 Total NY: 144,202 98,038 12,438 144,333 110,345 254,678 24,312 New Jersey Industrial: 100 American Road, 1/17/ 2,275 12,538 367 2,275 12,905 15,180 1,817 1986 Morris Plains, NJ F 2013 200 American Road, 1/17/ 725 5,361 50 725 5,411 6,136 740 2004 Morris Plains, NJ F 2013 300 American Road, 1/17/ 1,466 6,628 47 1,466 6,675 8,141 912 1987 Morris Plains, NJ B 2013 400 American Road, 1/17/ 1,724 9,808 239 1,724 10,047 11,771 1,494 1990 Morris Plains, NJ F 2013 500 American Road, 1/17/ 1,711 8,111 — 1,711 8,111 9,822 1,099 1988 Morris Plains, NJ B 2013 20 East Halsey 4/23/ Road, Parsippany, 1,898 1,402 5,399 1,898 6,801 8,699 475 1970 2014 NJ 1110 Centennial 3/13/ 790 1,937 7 790 1,944 2,734 183 1979 Ave, Piscataway, NJ G 2015 11 Constitution Ave, 3/13/ 1,780 8,999 — 1,780 8,999 10,779 703 1989 Piscataway, NJ G 2015 21 Constitution Ave, 3/13/ 6,187 18,855 — 6,187 18,855 25,042 1,599 2002 Piscataway, NJ G 2015 4 Corporate Place, 3/13/ 2,145 1,744 144 2,145 1,888 4,033 253 1974 Piscataway, NJ G 2015 8 Corporate Place, 3/13/ 2,666 4,381 — 2,666 4,381 7,047 470 1977 Piscataway, NJ G 2015

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 1938 Olney Avenue, 7/27/ 1,176 5,357 — 1,176 5,357 6,533 114 1966 Cherry Hill, NJ H 2017 Office: 25 Corporate Place, 3/13/ 2,269 8,343 — 2,269 8,343 10,612 730 1985 Piscataway, NJ G 2015 Total NJ: 26,812 93,464 6,253 26,812 99,717 126,529 10,589 Connecticut Industrial: 466 Bridgeport Ave, 1/17/ 833 867 3,240 833 4,107 4,940 336 1982 Shelton, CT 2013 470 Bridgeport Ave, 1/17/ 2,660 4,807 89 2,660 4,896 7,556 699 1973 Shelton, CT F 2013 15 Progress Drive, 1/17/ 984 3,411 — 984 3,411 4,395 514 1980 Shelton, CT C 2013 33 Platt Road, 10/15/ 3,196 5,402 — 3,196 5,402 8,598 1,311 1972 Shelton, CT F 2014 950-974 Bridgeport 1/17/ 1,551 3,524 32 1,551 3,556 5,107 493 1946 Ave, Milford, CT F 2013 12 Cascade Blvd, 1/17/ 1,688 3,742 2 1,688 3,744 5,432 491 1987 Orange, CT F 2013 15 Executive Blvd., 1/17/ 1,974 5,357 1,004 1,974 6,361 8,335 1,057 1983 Orange, CT F 2013 25 Executive Blvd., 1/17/ 438 1,481 33 438 1,514 1,952 189 1983 Orange, CT F 2013 22 Marsh Hill Rd, 1/17/ 1,462 2,915 575 1,462 3,490 4,952 461 1989 Orange, CT F 2013 269 Lambert Rd, 1/17/ 1,666 3,516 230 1,666 3,746 5,412 647 1986 Orange, CT F 2013 110 Old County Circle, Windsor 1,572 11,797 60 1,572 11,857 13,429 1,983 2003 4/8/2014 Locks, CT D 112 Old County Road, Windsor 200 — 5,442 200 5,442 5,642 — n/a 4/8/2014 Locks, CT 4 Meadow Street, 8/22/ 856 3,034 307 856 3,341 4,197 446 1992 Norwalk, CT F 2014 777 Brook Street, 1/14/ 2,456 8,658 415 2,456 9,073 11,529 901 1969 Rocky Hill, CT F 2015 Office: 8 Farm Springs 2/28/ Road, Farmington, 3,533 16,248 3,832 3,533 20,080 23,613 8,043 1980 2008 CT A 35 Executive Blvd., 1/17/ 1,080 8,909 269 1,080 9,178 10,258 1,516 1988 Orange, CT F 2013 Total CT: 26,149 83,668 15,530 26,149 99,198 125,347 19,087 Delaware Industrial: 300 McIntire Drive, 2,488 13,033 111 2,488 13,144 15,632 1,148 1999 6/1/2016 Newark, DE H Total DE: 2,488 13,033 111 2,488 13,144 15,632 1,148 Grand Total: 199,651 288,203 34,332 199,782 322,404 522,186 55,136

Lender Principal Outstanding A—Athene Life and Annuity $ 15,000 B—Genworth Life Insurance Company 26,574 C—People’s United Bank 2,249 D—Hartford Accident 6,000 E—People’s United Bank 15,500 F—American International Group 233,100 G—Allstate Corporation 39,100 H—United States Life Insurance Company 39,000 Total $ 376,523

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant 12 Months Ended Accounting Policies (Policies) Dec. 31, 2017 Accounting Policies [Abstract] Basis of Presentation Basis of Presentation: The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the financial statements of the Company, its wholly owned subsidiaries, and the Operating Partnership, as the Company makes all operating and financial decisions for (i.e., exercises control over) the Operating Partnership. All material intercompany transactions have been eliminated in consolidation. The ownership interests of the other investors in the Operating Partnership are recorded as noncontrolling interests.

During the twelve months ended December 31, 2016, the Company determined that certain transactions involving the issuance of limited partnership interests of the Operating Partnership, should have resulted in a reallocation between the Operating Partnership’s noncontrolling interest (“OP NCI”) and Additional Paid-in-Capital (“APIC”) to reflect the difference between the fair value of the consideration received and the book value of the OP NCI attributable to limited partnership interests at the time of the issuance (the “Reallocation”). During the twelve months ended December 31, 2016, the Company increased its APIC with an offsetting reduction to OP NCI of approximately $23.7 million. During the twelve months ended December 31, 2017, the Company decreased its APIC with an offsetting increase to OP NCI of approximately $0.2 million. The Company concluded that these Reallocation adjustments are not meaningful to the Company’s financial position for any of the prior years, and as such these cumulative changes were recorded in the Consolidated Balance Sheets and Statement of Stockholders’ Equity in 2016 and 2017. These Reallocations have no impact on the previously reported Statement of Operations or Cash Flows.

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

Use of Estimates Use of Estimates: The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. All of these estimates reflect management’s best judgment about current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. If such conditions persist longer or deteriorate further than expected, it is reasonably possible that the judgments and estimates could change, which may result in impairments of certain assets. Significant estimates include the useful lives of long- lived assets including property, equipment and intangible assets, impairment of assets, collectability of receivables, contingencies, stock-based compensation, and fair value of assets and liabilities acquired in business combinations. Real Estate Real Estate: Real estate assets are stated at cost, less accumulated depreciation and amortization. All costs related to the improvement or replacement of real estate properties are capitalized. Additions, renovations, and improvements that enhance and/or extend the useful life of a property

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document are also capitalized. Expenditures for ordinary maintenance, repairs, and improvements that do not materially prolong the normal useful life of an asset, are charged to operations as incurred.

Upon the acquisition of real estate properties, the fair value of the real estate purchased is allocated to the acquired tangible assets (generally consisting of land, buildings and building improvements, and tenant improvements) and identified intangible assets and liabilities (generally consisting of above-market and below-market leases and the origination value of in-place leases) in accordance with GAAP. We utilize methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities. The fair value of the tangible assets of an acquired property considers the value of the property “as-if-vacant.” In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above- market and below-market leases is estimated based on the differences between contractual rentals and the estimated market rents over the applicable lease term discounted back to the date of acquisition utilizing a discount rate adjusted for the credit risk associated with the respective tenants. The aggregate value of in-place leases is measured based on the avoided costs associated with lack of revenue over a market oriented lease-up period, the avoided leasing commissions, and other avoided costs common in similar leasing transactions.

Mortgage notes payable assumed in connection with acquisitions are recorded at their fair value using current market interest rates for similar debt at the time of acquisitions. Acquisition-related costs are expensed as incurred. The capitalized above-market lease values are amortized as a reduction of rental revenue over the remaining term of the respective leases and the capitalized below-market lease values are amortized as an increase to rental revenue over the remaining term of the respective leases. The value of in-place leases is based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during expected lease-up periods, current market conditions, and costs to execute similar leases. The values of in-place leases are amortized over the remaining term of the respective leases. If a tenant vacates its space prior to its contractual expiration date, any unamortized balance of the related intangible assets or liabilities is recorded as income or expense in the period. The total net impact to rental revenues due to the amortization of above-market and below-market leases was a net increase in rental revenue of approximately $0.4 million and $0.5 million for the years ended December 31, 2017 and December 31, 2016, respectively.

Increase to Net increase to amortization rental revenues expense 2018 $ 551 $ 2,272 2019 560 1,955 2020 660 1,627 2021 510 1,400 2022 533 1,344 Thereafter 1,609 4,534

Depreciation and Amortization Depreciation and Amortization: The Company uses the straight-line method for depreciation and amortization. Properties and property improvements are depreciated over their estimated useful lives, which range from 5 to 40 years. Furniture, fixtures, and equipment are depreciated over estimated useful lives that range from 5 to 10 years. Tenant improvements are amortized over the shorter of the remaining non-cancellable term of the related leases or their useful lives. Deferred Charges Deferred Charges: Deferred charges consist principally of leasing commissions, which are amortized over the life of the related tenant leases, and financing costs, which are amortized over the terms of the respective debt agreements. These deferred charges are included in other assets on the consolidated balance sheets. If leases are terminated, the unamortized charges are expensed. Asset Impairment Asset Impairment: Management reviews each real estate investment for impairment whenever events or circumstances indicate that the carrying value of a real estate investment may not be recoverable. The review of recoverability is based on an estimate of the undiscounted future cash flows that are expected to result from the real estate investment’s use and eventual disposition. Such cash flow analyses consider factors such as expected future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If an impairment event exists due to the projected inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds estimated fair value. Management is required to make subjective assessments as to whether there are impairments in the value of the Company’s real estate holdings. These assessments could have a direct impact on net income, because an impairment loss is recognized in the period that the assessment is made. Management has determined that there were no indicators of impairment relating to its long-lived assets at December 31, 2017. Reportable Segments Reportable Segments: As of December 31, 2017, the Company primarily operated in one reportable segment, commercial real estate. Revenue Recognition Revenue Recognition: Rental income includes the base rent that each tenant is required to pay in accordance with the terms of their respective leases reported on a straight-line basis over the term of the lease. In order for management to determine, in its judgment, that the unbilled rent receivable applicable to each specific property is collectible, management reviews billed and unbilled rent receivables on a quarterly basis and takes into consideration the tenant’s payment history and financial condition. Some of the leases provide for additional contingent rental revenue in the form of percentage rents and increases based on the consumer price index, subject to certain maximums and minimums.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Earnings Per Share Information Earnings Per Share Information: The Company presents both basic and diluted earnings per share. Basic earnings per share excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower per share amount. Restricted stock was included in the computation of diluted earnings per share. Stock option awards were included in the computation of earnings per share in 2017 and 2016 because the option awards were dilutive. Cash and Cash Equivalents Cash and Cash Equivalents: The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Restricted Cash Restricted Cash: Restricted cash represents reserves used to pay real estate taxes, insurance, repairs, leasing costs and capital improvements. At December 31, 2017 and 2016, the Company had restricted cash of $3.5 million and $2.6 million, respectively, which is included in other assets on the consolidated balance sheets. Fair Value Measurement Fair Value Measurement: The Company determines fair value in accordance with Accounting Standards Codification (“ASC”) 820-10-05 for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures.

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company is organized and conducts its operations to qualify as a REIT for Federal income tax purposes. Accordingly, the Company is generally not subject to Federal income taxation on the portion of its distributable income that qualifies as REIT taxable income, to the extent that it distributes at least 90% of its REIT taxable income to its stockholders and complies with certain other requirements as defined in the Code.

Contractual rent of $9.7 million, derived from five leases with the City of New York, for the year ended December 31, 2017, represented 22% of the Company’s total contractual rental income. Stock-Based Compensation Stock-Based Compensation: The Company has a stock-based compensation plan, which is described below in Note 6. The Company accounts for stock-based compensation in accordance with ASC 718, which

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document establishes accounting for stock-based awards. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is expensed at the grant date (for the portion that vests immediately) or ratably over the respective vesting periods. New Accounting Pronouncements New Accounting Pronouncements: In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 clarifies Topic 718 such that an entity must apply modification accounting to changes in the terms or conditions of a share-based payment award unless all of the following criteria are met: (a) the fair value of the modified award is the same as the fair value of the original award immediately before the modification, (b) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the modification, and (c) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the modification. The amendments are effective for all entities for fiscal years beginning after December 15, 2017, including interim periods within those years. Early adoption was permitted. The adoption of ASU 2017-09 is not expected to have a material impact on the Company’s consolidated financial statements. In February 2017, the FASB issued ASU No. 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU 2017-05 was issued to clarify the scope of Subtopic 610-20 and to add guidance for partial sales of nonfinancial assets, including partial sales of real estate. ASU 2017-05 clarifies the scope of Subtopic 610-20 by defining the term “in substance nonfinancial asset.” If substantially all of the fair value of the assets (recognized and unrecognized) promised to a counterparty in a contract is concentrated in nonfinancial assets, a financial asset in the same arrangement would still be considered part of an “in substance nonfinancial asset”. Additionally, ASU 2017-05 indicates an entity should identify each distinct nonfinancial asset (e.g., real estate and inventory) or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. ASU 2017-05 requires an entity to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when two criteria are met: 1) the entity does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Topic 810, and 2) the entity transfers control of the asset in accordance with Topic 606. The effective date and transition requirements of ASU 2017-05 are the same as Topic 606. The amendments are effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The adoption of ASU 2017-05 is not expected to have a material impact on the Company’s consolidated financial statements.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230) - Restricted Cash.” ASU 2016-18 updates Topic 230 to require cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning- of-period and end-of-period total cash amounts on the statement of cash flows. Consequently, transfers between cash and restricted cash will not be presented as a separate line item in the operating, investing or financing sections of the cash flow statement. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years and should be applied retrospectively. Early adoption was permitted. The adoption of ASU 2016-18 is not expected to have a material impact on the Company’s consolidated financial position or cash flows.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. ASU 2016-02 is effective for fiscal periods and interim periods within those fiscal periods beginning after December 15, 2018. Early adoption is permitted. The adoption of ASU 2016-02 is not expected to have a material impact on the Company’s consolidated financial statements. As a lessee, the Company is a party to an office lease with future lease obligations aggregating to $838,694, as of December 31, 2017, for which the Company expects to record right-of-use assets upon the adoption of ASU 2016-02.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant 12 Months Ended Accounting Policies (Tables) Dec. 31, 2017 Accounting Policies [Abstract] Schedule of Projected Impact of Above Market Below The following table presents the projected increase to rental revenue from the amortization of the acquired above-market and below-market lease intangibles and the increase to Market and In-Place Lease amortization expense of the in-place lease intangibles for properties owned at December 31, Intangibles 2017, over the next five years and thereafter (in thousands):

Increase to Net increase to amortization rental revenues expense 2018 $ 551 $ 2,272 2019 560 1,955 2020 660 1,627 2021 510 1,400 2022 533 1,344 Thereafter 1,609 4,534 $ 4,423 $ 13,132

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Real Estate (Tables) Dec. 31, 2017 Real Estate [Abstract] Schedule of Changes in Real Estate The changes in real estate for the years ended December 31, 2017 and 2016 are as follows (in thousands):

2017 2016 Balance at beginning of year $474,573 $442,765 Property acquisitions 39,190 25,294 Improvements 8,423 6,514 Balance at end of year $522,186 $474,573

Schedule of Changes in Accumulated The changes in accumulated depreciation, exclusive of amounts Depreciation, Exclusive of Amounts Relating to relating to equipment, transportation equipment, and furniture and fixtures, for the years ended December 31, 2017 and 2016 are as follows (in Equipment, Transportation Equipment, and thousands): Furniture and Fixtures 2017 2016 Balance at beginning of year $45,252 $36,412 Depreciation for year 9,884 8,840 Balance at end of year $55,136 $45,252

Schedule of Preliminary Allocation of the Purchase Prices of Assets Acquired and The following table summarizes the Company’s allocation of the purchase prices of assets acquired and liabilities assumed during 2017 and Liabilities Assumed 2016 (in thousands):

2017 2016 Land $ 5,927 $ 5,792 Building and Improvements 33,263 19,502 Acquired lease intangibles assets, net 3,059 674 Other assets and costs 1,575 1,070 Total Consideration $43,824 $27,038

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Mortgage Notes Payable 12 Months Ended (Tables) Dec. 31, 2017 Debt Disclosure [Abstract] Summary of Company's Mortgage The following table sets forth a summary of the Company’s mortgage notes Notes Payable payable (in thousands):

Principal Principal Outstanding as of Outstanding as of December Loan Interest Rate 31, 2017 December 31, 2016 Maturity Athene Annuity & 3/1/ Life Company 3.00% $ 15,000 $ 15,000 2018 Genworth Life Insurance 4/30/ Company 3.20% 26,574 27,424 2018 Hartford Accident & Indemnity 3/1/ Company 5.20% 6,000 9,000 2020 People’s United 10/1/ Bank 5.23% 2,249 2,323 2020 People’s United 10/15/ Bank 4.18% 15,500 15,500 2024 American International 3/1/ Group 4.05% 233,100 233,100 2025 Allstate 4/1/ Corporation 4.00% 39,100 39,100 2025 United States Life Insurance 1/1/ Company 3.82% 39,000 — 2028 Subtotal 376,523 341,447 Unamortized loan costs (6,329) (5,771) Unamortized premiums — 18 Total $ 370,194 $ 335,694

Schedule of Principal Repayments Scheduled principal repayments during the next five years and thereafter are as follows (in thousands):

2018 $ 42,108 2019 789 2020 8,825 2021 852 2022 1,157 Thereafter 322,792 Total $376,523

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Stockholders' Equity 12 Months Ended (Tables) Dec. 31, 2017 Equity [Abstract] Schedule of Dividends Declared on Common The following table presents dividends declared by the Company on its Stock common stock during 2017 and 2016:

Record Payment Dividend Declaration Date Date Per Share Date March 24, April 10, 2016 April 15, 2016 0.09 2016 June 09, 2016 June 30, 2016 July 15, 2016 0.09 August 09, September 30, 2016 October 11, 2016 0.09 2016 November 08, December 31, 2016 January 13, 2017 0.09 2016 January 31, March 31, 2017 April 12, 2017 0.10 2017 March 23, April 4, 2017 April 14, 2017 0.11 (1) 2017 June 08, 2017 June 30, 2017 July 14, 2017 0.10 August 08, September 30, 2017 October 13, 2017 0.10 2017 November 07, December 31, 2017 January 15, 2018 0.10 2017 (1) Represents a supplemental 2016 dividend. Summary of Restricted Stock Activity The following is a summary of restricted stock activity: Weighted Average Grant Date Fair Shares Value Non-vested shares outstanding as of December 31, 2016 44,858 $ 9.93 New shares issued through December 31, 2017 57,927 11.60 Vested (62,404) 11.03 Non-vested shares outstanding as of December 31, 2017 40,381 $ 10.73

Amortization Schedule of Total Unamortized The following is an amortization schedule of the total unamortized Shares of Restricted Stock Outstanding shares of restricted stock outstanding as of December 31, 2017: Non-vested Shares Amortization Number of Schedule Shares 2018 17,673 2019 10,202 2020 5,235 2021 2,731 2022 1,785 2023 1,291 Thereafter 1,464 Total Non-vested Shares 40,381

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Earnings (Loss) per Share 12 Months Ended (Tables) Dec. 31, 2017 Earnings Per Share [Abstract] Schedule of Computation of Basic and Diluted Earnings per Share The following table sets forth the computation of basic and diluted earnings per share information for the years ended December 31, 2017 and 2016 (in thousands, except Information share and per share data):

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Fair Value (Tables) Dec. 31, 2017 Fair Value Disclosures [Abstract] Schedule of Fair Value of Financial Assets and Liabilities The following table summarizes the carrying values and the estimated fair values of the financial instruments (in thousands):

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Income Taxes (Tables) Dec. 31, 2017 Income Tax Disclosure [Abstract] Reconciliation of GAAP Income (Loss) from The following table reconciles GAAP income from continuing operations Continuing Operations to Taxable Income to taxable income for the years ended December 31, 2017 and 2016 (in (Loss) thousands):

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Future Minimum Rent 12 Months Ended Schedule (Tables) Dec. 31, 2017 Leases [Abstract] Schedule of Future Minimum Future minimum contractual lease payments to be received by the Company Contractual Lease Payments to be (without taking into account straight-line rent or amortization of intangibles) as of Received by Company under December 31, 2017, under operating leases for the next five years and thereafter are as Operating Leases follows (in thousands):

2018 $ 45,756 2019 42,795 2020 39,866 2021 37,648 2022 33,537 Thereafter 118,649 Total $ 318,251

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Selected Quarterly Data 12 Months Ended (Tables) Dec. 31, 2017 Quarterly Financial Information Disclosure [Abstract] Summary of Selected The summarized selected quarterly data for the years ended December 31, 2017 and Quarterly Data 2016 are as follows (in thousands except per share data).

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Organization and Dec. 31, Description of Business - 2017 Additional Information Jan. 17, Dec. 31, Dec. Dec. 31, Dec. 31, ft² (Detail) 2013 2016 31, 2015 2014 a shares in Millions, ft² in Property Property 2013 PropertyProperty Property Millions shares Organization And Description Of Business [Line Items] Number of commercial properties acquired | Property 25 2 2 7 6 Operating Partnership [Member] Organization And Description Of Business [Line Items] Ownership interest in partnership units (as a percent) 33.29% 65.65% 33.78% Number of properties owned | Property 49 Leasable area owned by the company | ft² 5.9 Area of land in New York, New Jersey, Connecticut, 400 and Delaware | a Number of shares of common stock that can be issued 1.9 on conversion of interest in limited partnership | shares Operating Partnership [Member] | Series B Preferred Stock, Non-Voting [Member] Organization And Description Of Business [Line Items] Number of shares of preferred stock that can be issued 5.2 on conversion of interest in limited partnership | shares Due to redemption of certain shares [Member] | Operating Partnership [Member] Organization And Description Of Business [Line Items] Ownership interest in partnership units (as a percent) 34.35%

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Summary of Significant Dec. 31, Accounting Policies - 2017 Dec. 31, Dec. 30, Additional Information USD ($) 2016 2017 (Detail) Segment USD ($) USD ($) Lease Summary of Significant Accounting Policies [Line Items] Offsetting increase (decrease) to Operating Partnership's non-controlling $ $ 200,000 interest (23,700,000) Net impact to rental revenues due to the amortization of above market and 400,000 500,000 below market leases Amortization to below market leases $ 6,740,000 5,867,000 Number of reportable segments | Segment 1 Unrecognized tax positions 0 $ 0 Standard maximum deposit insurance amount $ 250,000 Contractual lease rent 44,713,000 41,965,000 Accounting Standards Update 2016-02 [Member] Summary of Significant Accounting Policies [Line Items] Aggregate future lease obligations $ 838,694 Customer Concentration Risk [Member] | Sales Revenue Net [Member] Summary of Significant Accounting Policies [Line Items] Number of operating leases | Lease 5 Contractual lease rent $ 9,700,000 Percentage of contractual rental income 22.00% Other Assets [Member] Summary of Significant Accounting Policies [Line Items] Restricted cash $ 2,600,000 3,500,000 Minimum [Member] | Properties and Property Improvements [Member] Summary of Significant Accounting Policies [Line Items] Estimated useful life 5 years Minimum [Member] | Furniture, Fixtures and Equipment [Member] Summary of Significant Accounting Policies [Line Items] Estimated useful life 5 years Maximum [Member] | Properties and Property Improvements [Member] Summary of Significant Accounting Policies [Line Items] Estimated useful life 40 years Maximum [Member] | Furniture, Fixtures and Equipment [Member] Summary of Significant Accounting Policies [Line Items] Estimated useful life 10 years Above Market Lease [Member] Summary of Significant Accounting Policies [Line Items]

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Acquired lease intangible assets, net $ 1,900,000 1,500,000 In-place Lease [Member] Summary of Significant Accounting Policies [Line Items] Acquired lease intangible assets, net $ $ 13,132,000 12,500,000

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant Accounting Policies - Schedule of Projected Impact of Above Market Dec. 31, 2017Dec. 31, 2016 Below Market and In-Place Lease Intangibles (Detail) - USD ($) $ in Thousands Net increase to rental revenues: 2018 $ 551 2019 560 2020 660 2021 510 2022 533 Thereafter 1,609 Net increase to rental revenues 4,423 In-place Lease [Member] Increase to amortization expense: 2018 2,272 2019 1,955 2020 1,627 2021 1,400 2022 1,344 Thereafter 4,534 Increase to amortization expense $ 13,132 $ 12,500

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Real Estate - Schedule of 12 Months Ended Changes in Real Estate (Detail) - USD ($) Dec. 31, 2017Dec. 31, 2016 $ in Thousands Real Estate [Abstract] Balance at beginning of year $ 474,573 $ 442,765 Property acquisitions 39,190 25,294 Improvements 8,423 6,514 Balance at end of year $ 522,186 $ 474,573

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Real Estate - Schedule of 12 Months Ended Changes in Accumulated Depreciation, Exclusive of Amounts Relating to Equipment, Transportation Dec. 31, 2017Dec. 31, 2016 Equipment, and Furniture and Fixtures (Detail) - USD ($) $ in Thousands Real Estate [Abstract] Balance at beginning of year $ 45,252 $ 36,412 Depreciation for year 9,884 8,840 Balance at end of year $ 55,136 $ 45,252

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Real Estate - Additional Aug. 31, Jul. 27, Jun. 01, May 10, Information (Detail) 2017 2017 2016 2016 $ in Millions Dec. 31, 2017 USD ($) USD ($) USD ($) USD ($) ft² ft² ft² ft² Cherry Hill, New Jersey [Member] Business Acquisition [Line Items] Date of acquisition Jul. 27, 2017 Building acquired | ft² 109,771 Payment to acquisition | $ $ 7.6 Montgomery, New York [Member] Business Acquisition [Line Items] Date of acquisition Aug. 31, 2017 Building acquired | ft² 248,370 Payment to acquisition | $ $ 36.2 East New York [Member] Business Acquisition [Line Items] Date of acquisition May 10, 2016 Building acquired | ft² 57,786 Payment to acquisition | $ $ 10.0 Newark [Member] Business Acquisition [Line Items] Date of acquisition Jun. 01, 2016 Building acquired | ft² 208,656 Payment to acquisition | $ $ 17.0 Avalon Flooring [Member] Business Acquisition [Line Items] Lease expiration term Sep. 30, 2031 FedEx Ground Package System, Inc [Member] Business Acquisition [Line Items] Lease expiration term Feb. 28, 2027 City of New York [Member] Business Acquisition [Line Items] Lease expiration term Dec. 31, 2025 Valassis Communications, Inc. [Member] Business Acquisition [Line Items] Lease expiration term Apr. 30, 2025

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Real Estate - Schedule of Preliminary Allocation of the Purchase Prices of Assets Dec. 31, 2017Dec. 31, 2016 Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands Real Estate [Abstract] Land $ 5,927 $ 5,792 Building and Improvements 33,263 19,502 Acquired lease intangibles assets, net 3,059 674 Other assets and costs 1,575 1,070 Total Consideration $ 43,824 $ 27,038

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Mortgage Notes Payable - 12 Months Ended Summary of Company's Mortgage Notes Payable Dec. 20, 2017 Dec. 31, 2017 Dec. 31, 2016 (Detail) - USD ($) $ in Thousands Debt Instrument [Line Items] Mortgage notes payable $ 376,523 $ 341,447 Unamortized loan costs (6,329) (5,771) Unamortized premiums 18 Mortgage notes payable, net $ 370,194 335,694 Athene Annuity And Life Assurance Company, Loan [Member] Debt Instrument [Line Items] Interest Rate 3.00% Mortgage notes payable $ 15,000 15,000 Maturity Mar. 01, 2018 Genworth Life Insurance Company, Loan [Member] Debt Instrument [Line Items] Interest Rate 3.20% Mortgage notes payable $ 26,574 27,424 Maturity Apr. 30, 2018 5.23% People's United Bank, Loan [Member] Debt Instrument [Line Items] Interest Rate 5.23% Mortgage notes payable $ 2,249 2,323 Maturity Oct. 01, 2020 Hartford Accident and Indemnity Company, Loan [Member] Debt Instrument [Line Items] Interest Rate 5.20% Mortgage notes payable $ 6,000 9,000 Maturity Mar. 01, 2020 4.18% People's United Bank, Loan [Member] Debt Instrument [Line Items] Interest Rate 4.18% Mortgage notes payable $ 15,500 15,500 Maturity Oct. 15, 2024 United States Life Insurance Company, Loan [Member] Debt Instrument [Line Items] Interest Rate 3.82% 3.82% Mortgage notes payable $ 39,000 $ 39,000 Maturity Jan. 01, 2028 Jan. 01, 2028 American International Group, Loan [Member] Debt Instrument [Line Items] Interest Rate 4.05% Mortgage notes payable $ 233,100 233,100

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Maturity Mar. 01, 2025 Allstate Corporation, Loan [Member] Debt Instrument [Line Items] Interest Rate 4.00% Mortgage notes payable $ 39,100 $ 39,100 Maturity Apr. 01, 2025

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months 1 Months Ended Ended Mortgage Notes Payable - Dec. 20, Dec. 31, Feb. 20, Apr. 03, Additional Information 2017 Mar. Feb. 22, Sep. 30, Feb. 28, Apr. 30, 2017 Dec. 31, 2015 2013 (Detail) USD ($) 13, 2013 2010 2017 2014 USD ($) 2016 USD ($) USD ($) Property 2015 USD ($) USD ($) USD ($) USD ($) ft² USD ($) Property Item Item Property Debt Instrument [Line Items] Mortgage notes payable $ $ 376,523,000 341,447,000 People's United Bank Loan Agreement [Member] Debt Instrument [Line Items] Permanent financing period 10 years Permanent financing interest 4.18% rate Debt instrument, payment Payments terms for the first seven years are interest only. Payments over the remaining three years of the term are based on a 25 year amortization schedule, with a balloon payment of $14.4 million due at maturity. Mortgage notes payable $ 15,500,000 Payment term based on 25 years amortization schedule Leasable area owned by the 84,000 company | ft² Debt Instrument, balloon $ payment due upon maturity 14,400,000 People's United Bank Loan [Member] Debt Instrument [Line Items] Interest Rate 5.23% Loan agreement maturity date Oct. 01, 2020 New borrowings $ 2,700,000 Hartford Accident & Indemnity Company, Loan [Member]

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Debt Instrument [Line Items] Repayments of outstanding $ indebtedness 3,000,000 Business acquisition, assumed $ mortgage 9,000,000 Mortgage, bears interest rate 5.20% 6.07% Mortgage, maturity date Mar. 31, 2020 Piscataway, NJ [Member] Debt Instrument [Line Items] Number of properties acquired 6 | Property Allstate Corporation, Loan [Member] Debt Instrument [Line Items] Mortgage notes payable $ $ 39,100,000 39,100,000 Interest Rate 4.00% Loan agreement maturity date Apr. 01, 2025 Allstate Corporation, Loan [Member] | Piscataway, NJ [Member] Debt Instrument [Line Items] Permanent financing period 10 years Mortgage notes payable $ 39,100,000 Interest Rate 4.00% Payment term based on 30 amortization schedule years Loan agreement maturity date Apr. 01, 2025 New York Note [Member] | Genworth Loan Agreement [Member] Debt Instrument [Line Items] Debt instrument, payment 12 monthly terms payments of interest only starting June 1, 2013 New borrowings $ 14,400,000 Monthly payments of principal $ 70,000 and interest Debt Instrument, Date of First Jun. 01, Required Payment 2014 New Jersey Note [Member] | Genworth Loan Agreement [Member]

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Debt Instrument [Line Items] Debt instrument, payment 12 monthly terms payments of interest starting June 1, 2013 New borrowings $ 15,100,000 Monthly payments of principal $ 73,000 and interest Debt Instrument, Date of First Jun. 01, Required Payment 2014 United States Life Insurance Company, Loan [Member] Debt Instrument [Line Items] Permanent financing period 10 years Debt instrument, payment During the terms period from February 1, 2018 to December 1, 2027, payments of interest only on the principal balance of the Note (as defined below) will be payable in arrears, with the entire principal balance due and payable on January 1, 2028, the loan maturity date. Number of collateralized 4 properties | Property Mortgage notes payable $ $ 39,000,000 39,000,000 Interest Rate 3.82% 3.82% Loan agreement maturity date Jan. 01, Jan. 01, 2028 2028 Number of wholly-owned subsidiaries of the UPREIT | 4 Item Application fee to lender $ 50,000 Event of default, description In the event of default, the initial rate of

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document interest on the Note will increase to the greatest of (i) 18% per annum, (ii) a per annum rate equal to 4% over the prime established rate, or (iii) a per annum rate equal to 5% over the original interest rate, all subject to the applicable state or federal laws. United States Life Insurance Company, Loan [Member] | Minimum [Member] Debt Instrument [Line Items] Loan Prepayment Premium Percentage,upon providing 1.00% advance notice of prepayment United States Life Insurance Company, Loan [Member] | Minimum [Member] | Event of Default [Member] Debt Instrument [Line Items] Permanent financing interest 18.00% rate United States Life Insurance Company, Loan [Member] | Prime Rate [Member] | Event of Default [Member] Debt Instrument [Line Items] Debt instrument basis rate 4.00% United States Life Insurance Company, Loan [Member] | Original Interest Rate [Member] | Event of Default [Member] Debt Instrument [Line Items] Debt instrument basis rate 5.00% United States Life Insurance Company, Loan [Member] | Line of Credit with Capital One, N.A. [Member]

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Debt Instrument [Line Items] Repayments of outstanding $ indebtedness 37,500,000 AIG Loan [Member] Debt Instrument [Line Items] Principal amount $ 233,100,000 Permanent financing period 10 years Permanent financing interest 4.05% rate Debt instrument, payment During the terms period from April 1, 2015, to February 1, 2025, payments of interest only will be payable in arrears with the entire principal balance plus any accrued and unpaid interest due and payable on March 1, 2025. Number of collateralized 28 properties | Property Repayments of outstanding $ indebtedness 199,900,000 AIG Loan [Member] | Line of Credit with Capital One, N.A. [Member] Debt Instrument [Line Items] Repayments of outstanding 56,000,000 indebtedness AIG Loan [Member] | John Hancock Life Insurance Company, Loan [Member] Debt Instrument [Line Items] Repayments of outstanding 68,600,000 indebtedness AIG Loan [Member] | Hartford Accident & Indemnity Company, Loan [Member] Debt Instrument [Line Items] Repayments of outstanding 50,200,000 indebtedness

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document AIG Loan [Member] | United States Life Insurance Company, Loan [Member] Debt Instrument [Line Items] Repayments of outstanding $ indebtedness 25,100,000 Mortgage Notes Payable [Member] | Aviva Life and Annuity [Member] | Farm Springs Road, LLC [Member] Debt Instrument [Line Items] Interest Rate 3.00% Loan agreement maturity date Mar. 01, 2018 New borrowings $ 15,000,000 Mortgage Notes Payable [Member] | Genworth Loan Agreement [Member] Debt Instrument [Line Items] Interest Rate 3.20% Loan agreement maturity date Apr. 30, 2018 New borrowings $ 29,500,000 Number of wholly-owned subsidiaries of the UPREIT | 4 Item

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Mortgage Notes Payable - Schedule of Principal Repayments (Detail) - USD Dec. 31, 2017Dec. 31, 2016 ($) $ in Thousands Debt Disclosure [Abstract] 2018 $ 42,108 2019 789 2020 8,825 2021 852 2022 1,157 Thereafter 322,792 Total $ 376,523 $ 341,447

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Secured Revolving Credit 12 Months Facility - Additional Ended Information (Detail) - USD Feb. 27, Jul. 27, Dec. 02, Dec. 31, Feb. 26, Dec. 20, Dec. 31, ($) 2018 2017 2015 2017 2018 2017 2016 Line Of Credit Facility [Line Items] Credit facility, outstanding $ $ 35,857,000 27,775,000 Key Bank [Member] | Operating Partnership [Member] Line Of Credit Facility [Line Items] Line of Credit facility, $ $ $ maximum borrowing capacity 88,000,00050,000,000 50,500,000 Line of Credit facility term 2 years Line of Credit facility 1 year extended maturity period Line Of Credit facility Line of description credit facility, with an initial term of two years, with a one-year extension option, subject to certain other customary conditions. Minimum principal amount $ 25,000,000 Increase in line of credit $ facility available for property 38,000,000 acquisition Line of credit facility, maturity Feb. 28, date 2018 Line of credit facility, Jun. 30, additional extension option 2019 maturity date Key Bank [Member] | Operating Partnership

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document [Member] | Subsequent Event [Member] Line Of Credit Facility [Line Items] Line of Credit facility, $ $ maximum borrowing capacity 55,000,000 50,524,986 Line of credit facility, maturity Jun. 30, date 2019 Key Bank [Member] | Operating Partnership [Member] | Maximum [Member] Line Of Credit Facility [Line Items] Swing loan $ 5,000,000 Key Bank [Member] | Operating Partnership [Member] | LIBOR [Member] Line Of Credit Facility [Line Items] Credit facility, outstanding $ $ 35,900,000 27,800,000 Key Bank [Member] | Operating Partnership [Member] | LIBOR [Member] | Minimum [Member] Line Of Credit Facility [Line Items] Applicable margin range on 3.00% credit facility Key Bank [Member] | Operating Partnership [Member] | LIBOR [Member] | Maximum [Member] Line Of Credit Facility [Line Items] Applicable margin range on 3.50% credit facility Key Bank [Member] | Operating Partnership [Member] | If less than 50% of facility used [Member] Line Of Credit Facility [Line Items] Line of Credit facility, 0.30% commitment fee percentage

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Key Bank [Member] | Operating Partnership [Member] | If more than 50% of facility used [Member] Line Of Credit Facility [Line Items] Line of Credit facility, 0.20% commitment fee percentage

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Stockholders' Equity - Jun. May Nov. Jun. Jun. Jun. Jun. Mar. Jun. Apr. Jun. Feb. Mar. Additional Information May 22, Mar. 24, Mar. 26, Jun. 04, Dec. 31, Dec. 31, 08, 31, 08, 09, 19, 19, 06, 21, 07, 30, 09, 07, 27, (Detail) - USD ($) 2017 2016 2015 2014 2017 2016 2017 2017 2016 2016 2015 2014 2013 2013 2012 2012 2011 2008 2018 Stockholders' Equity Note [Line Items] Shares of preferred stock 10,000,000 10,000,000 authorized Par value per share (in dollars $ 0.0001 $ 0.0001 per share) Shares of common stock 100,000,000100,000,000 authorized for issuance Par value per share (in dollars $ 0.0001 $ 0.0001 per share) Shares of common stock 13,594,125 13,618,884 issued Shares of common stock 13,594,125 13,618,884 outstanding Percentage of taxable income which should be distributed to 90.00% be qualified as REIT Options expiration period 10 years Stock options exercised 200,000 0 Stock compensation expense $ 718,000 $ 539,000 Shares granted to vest, one fourth description vested each year on the following dates: April 30, 2013, April 30, 2014, and April 30, 2015. Unamortized stock $ 433,000 compensation Outstanding at the end of the 442,787 period (in shares) Vested (in shares) 402,406 Stock Options [Member] Stockholders' Equity Note [Line Items] Stock options outstanding 220,000 Stock options exercisable 40,000 Restricted Stock [Member] Stockholders' Equity Note [Line Items] Awards issued (in dollars per $ 11.60 share) Weighted average period for 1 year 10 recognition months 24 days Vested (in shares) 62,404 Non-employee Directors and Key Officers [Member] Stockholders' Equity Note [Line Items] Stock compensation expense $ 126,000 Non-employee Directors [Member] Stockholders' Equity Note [Line Items] Stock options granted 10,00055,000 Key Officers [Member] Stockholders' Equity Note [Line Items] Stock options granted 200,000 200,000 Vesting period 3 years 3 years 2007 Incentive Award Plan [Member] Stockholders' Equity Note [Line Items] Number of shares of common 1,000,000 stock which may be awarded Share-based compensation Jun. 11, award plan , expiration date 2017 2007 Incentive Award Plan [Member] | Restricted Stock [Member] Stockholders' Equity Note [Line Items] Awards issued (in shares) 50,002 Value of restricted shares $ issued 320,000

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Shares granted to vest, One fourth description of the shares granted to the executives vested on the grant date and one fourth vested each year on the following dates: March 21, 2014, March 21, 2015, and March 21, 2016. 2007 Incentive Award Plan [Member] | Executives [Member] Stockholders' Equity Note [Line Items] Aggregate shares of common 7,929 stock issued 2007 Incentive Award Plan [Member] | Executives [Member] | Restricted Stock [Member] Stockholders' Equity Note [Line Items] Vesting period 4 years 4 years Awards issued (in shares) 34,482 47,043 43,010 44,704 46,876 55,149 Value of restricted shares $ $ $ 400,000 $ 489,250 $ 400,000 $ 304,000 issued 300,000 375,000 Awards issued (in dollars per $ 11.60 $ 10.40 $ 9.30 $ 6.80 $ 6.40 $ 6.80 share) Shares granted to vest, One-tenth One sixth of One sixth of One sixth of description of the the shares the shares the shares shares vested vested vested vested immediately immediately immediately immediately upon upon upon upon issuance issuance issuance issuance and the and the and the and the remaining remaining remaining remaining shares vest shares vest shares vest shares vest in equal in equal in equal in equal installments installments installments installments on the next on the next on the next on the next five five five nine anniversary anniversary anniversary anniversary dates of the dates of the dates of the dates of the grant. grant. grant. grant. 2007 Incentive Award Plan [Member] | Non-management Member of Board [Member] | Restricted Stock [Member] Stockholders' Equity Note [Line Items] Awards issued (in shares) 15,516 14,424 16,436 8,820 9,378 3,126 5,884 Value of restricted shares $ $ $ $ $ $ $ issued 180,000 150,000 175,000 60,000 60,00020,000 40,000 Awards issued (in dollars per $ 11.60 $ 10.40 $ 10.65 $ 6.80 $ 6.40 $ 6.40 $ 6.80 share) 2017 Incentive Award Plan [Member] Stockholders' Equity Note [Line Items] Number of shares of common 2,000,000 stock which may be awarded Number of shares available for 2,000,000 future issuance Plan effective date Apr. 24, 2017 2017 Incentive Award Plan [Member] | Subsequent Event [Member] Stockholders' Equity Note [Line Items] Common stock value per share $ 11.65 Federal Income Taxes [Member]

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Stockholders' Equity Note [Line Items] Percentage of taxable income which should be distributed in order not to be subject to 100.00% corporate federal income taxes on retained income Series A Preferred Stock [Member] Stockholders' Equity Note [Line Items] Shares of preferred stock 500,000 500,000 authorized Par value per share (in dollars $ 0.0001 $ 0.0001 per share) Preferred stock, shares 0 0 outstanding Series B Preferred Stock, Non- Voting [Member] Stockholders' Equity Note [Line Items] Shares of preferred stock 6,500,000 6,500,000 authorized Par value per share (in dollars $ 0.0001 $ 0.0001 per share) Preferred stock, voting rights There are no voting rights associated with the Series B preferred stock. Preferred stock, shares 0 0 outstanding

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Stockholders' Equity - 12 Months Ended Schedule of Dividends Declared on Common Stock Dec. 31, 2017 Dec. 31, 2016 (Detail) - $ / shares March 24, 2016 dividend [Member] Stockholders' Equity Note [Line Items] Declaration Date Mar. 24, 2016 Record Date Apr. 10, 2016 Payment Date Apr. 15, 2016 Dividend Per Share $ 0.09 June 09, 2016 dividend [Member] Stockholders' Equity Note [Line Items] Declaration Date Jun. 09, 2016 Record Date Jun. 30, 2016 Payment Date Jul. 15, 2016 Dividend Per Share $ 0.09 August 09, 2016 dividend [Member] Stockholders' Equity Note [Line Items] Declaration Date Aug. 09, 2016 Record Date Sep. 30, 2016 Payment Date Oct. 11, 2016 Dividend Per Share $ 0.09 November 08, 2016 dividend [Member] Stockholders' Equity Note [Line Items] Declaration Date Nov. 08, 2016 Record Date Dec. 31, 2016 Payment Date Jan. 13, 2017 Dividend Per Share $ 0.09 January 31, 2017 dividend [Member] Stockholders' Equity Note [Line Items] Declaration Date Jan. 31, 2017 Record Date Mar. 31, 2017 Payment Date Apr. 12, 2017 Dividend Per Share $ 0.10 March 23, 2017 (2016 Supplemental dividend) [Member] Stockholders' Equity Note [Line Items] Declaration Date Mar. 23, 2017 Record Date Apr. 04, 2017 Payment Date Apr. 14, 2017 Dividend Per Share $ 0.11 June 8, 2017 dividend [Member] Stockholders' Equity Note [Line Items] Declaration Date Jun. 08, 2017 Record Date Jun. 30, 2017

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Payment Date Jul. 14, 2017 Dividend Per Share $ 0.10 August 8, 2017 dividend [Member] Stockholders' Equity Note [Line Items] Declaration Date Aug. 08, 2017 Record Date Sep. 30, 2017 Payment Date Oct. 13, 2017 Dividend Per Share $ 0.10 November 07, 2017 dividend [Member] Stockholders' Equity Note [Line Items] Declaration Date Nov. 07, 2017 Record Date Dec. 31, 2017 Payment Date Jan. 15, 2018 Dividend Per Share $ 0.10

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Stockholders' Equity - Ended Summary of Restricted Dec. 31, 2017 Stock Activity (Detail) $ / shares shares Share Based Compensation Arrangement By Share Based Payment Award [Line Items] Vested, Shares (402,406) Restricted Stock [Member] Share Based Compensation Arrangement By Share Based Payment Award [Line Items] Non-vested at beginning of period, Shares 44,858 New shares issued through December 31, 2017 57,927 Vested, Shares (62,404) Non-vested at end of period, Shares 40,381 Non-vested at beginning of period, Weighted Average Grant Date Fair Value | $ / shares $ 9.93 New shares issued through December 31, 2017, Weighted Average Grant Date Fair Value | $ / 11.60 shares Vested, Weighted Average Grant Date Fair Value | $ / shares 11.03 Non-vested at end of period, Weighted Average Grant Date Fair Value | $ / shares $ 10.73

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Stockholders' Equity - Amortization Schedule of Total Unamortized Shares of Dec. 31, Dec. 31, Restricted Stock 2017 2016 Outstanding (Detail) - Restricted Stock [Member] - shares Share Based Compensation Arrangement By Share Based Payment Award [Line Items] 2018 17,673 2019 10,202 2020 5,235 2021 2,731 2022 1,785 2023 1,291 Thereafter 1,464 Total Non-vested Shares 40,381 44,858

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Earnings (Loss) per Share - 12 Months Ended Additional Information Dec. 31, 2017Dec. 31, 2016 (Detail) - shares Earnings Per Share [Abstract] Number of common share equivalents 22,335 31,199

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Earnings (Loss) per Share - 3 Months Ended 12 Months Ended Schedule of Computation of Basic and Diluted Earnings Dec. Sep. Jun. Mar. Dec. Sep. Jun. Mar. per Share Information Dec. 31, Dec. 31, 31, 30, 30, 31, 31, 30, 30, 31, (Detail) - USD ($) 2017 2016 2017 2017 2017 2017 2016 2016 2016 2016 $ / shares in Units, $ in Thousands Numerator: Net income attributable to $ $ $ 421 $ 88 $ 709 $ 586 $ 853 $ 144 $ 2,349 $ 2,634 common stockholders 1,131 1,051 Denominator: Weighted average common 13,646,34513,858,540 shares outstanding – basic Weighted average common 13,668,68013,889,739 shares outstanding – diluted Basic and Diluted Per Share Information: Net income per share – basic $ 0.08 $ 0.03 $ 0.01 $ 0.05 $ 0.04 $ 0.08 $ 0.06 $ 0.01 $ 0.17 $ 0.19 and diluted

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 1 Months Ended 12 Months Ended Dec. Nov. Dec. Dec. Related Party Transactions - Nov. 04, 31, 30, Dec. 31, 31, Feb. 09, Jan. 31, Dec. 31, 11, Additional Information 2014 2016 2015 2017 2016 2018 2014 2013 2013 (Detail) USD ($) USD USD USD ($) USD USD ($) USD ($) USD ($) USD ft² ($) ($) Installment ($) ($) ft² ft² ft² Rochlin Organization ("TRO") [Member] Related Party Transactions [Line Items] Brokerage cash commissions $ $ $ 95,000 $ 60,000 10,000 12,000 Lease value, total $ $ $ $ $ 332,000200,0002,100,000 332,0001,015,000 Additional area of real estate 35,000 35,000 35,000 property leased | ft² Lighthouse Sixty, LP [Member] Related Party Transactions [Line Items] Current annual base rent under $ 298,000 lease agreement Aggregate lease payments $ 1,800,000 Lease expiration year 2020 Former Chairman Emeritus [Member] Related Party Transactions [Line Items] Aggregate payment to related $ party 360,000 Number of annual installments under separation agreement | 3 Installment Annual installments under $ 120,000 separation agreement Garden 1101 [Member] Related Party Transactions [Line Items] Investment in limited $ partnership 1,800,000 Loss from equity investment in $ $ 198,000 limited partnership 399,000 Garden 1101 [Member] | Subsequent Event [Member] Related Party Transactions [Line Items]

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Initial distribution received $ from partnership, sale of the 3,700,000 partnership assets Limited Liability Company [Member] Related Party Transactions [Line Items] Building acquired | ft² 90,000

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Nov. Commitments and 04, Dec. 31, 2017 Dec. 31, Feb. 16, Contingencies - Additional 2015 USD ($) 2016 2012 Information (Detail) USD Bus_Depot USD ($) USD ($) ($) Commitments and Contingencies [Line Items] Number of bus depot sites received final regulatory 3 closure Number of former bus depot sites 6 Number of bus depot sites continuing monitoring and reporting activities associated with environmental 3 cleanup efforts Number of bus depot sites compliance with 6 environmental cleanup efforts Divestiture [Member] | Shelter Electric [Member] Commitments and Contingencies [Line Items] Pension withdrawal liability | $ $ $ $ 1,100,000 1,200,0001,500,000 Monthly installment payment for pension withdrawal $ 8,000 liability | $ Term of payment 20 years Letter Of Credit | Bank of America, N.A. [Member] Commitments and Contingencies [Line Items] Letters of credit, amount | $ $ 957,708 Line of Credit facility term 1 year Line Of Credit facility description The term was for one year plus applicable extensions.

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Fair Value - Schedule of Fair Value of Financial Assets Dec. 31, Dec. 31, Dec. 31, and Liabilities (Detail) - USD 2017 2016 2015 ($) $ in Thousands Financial assets: Cash and cash equivalents $ 8,423 $ 15,932 $ 15,005 Accounts receivable 159 145 Financial liabilities: Accounts payable and accrued expenses 3,608 2,833 Secured revolving credit facility 35,857 27,775 Mortgage notes payable 376,523 341,447 Pension withdrawal liability 1,131 1,196 Estimate of Fair Value Measurement [Member] Financial assets: Cash and cash equivalents 8,423 15,932 Accounts receivable 159 145 Financial liabilities: Accounts payable and accrued expenses 3,608 2,833 Secured revolving credit facility 35,857 27,775 Pension withdrawal liability 1,139 1,178 Mortgages [Member] Financial liabilities: Mortgage notes payable 376,523 341,447 Mortgages [Member] | Estimate of Fair Value Measurement [Member] Financial liabilities: Mortgage notes payable $ 371,920 $ 334,756

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other Retirement Benefits - 12 Months Ended Additional Information Dec. 31, Dec. 31, (Detail) - USD ($) 2017 2016 Defined Contribution Plan Disclosure [Line Items] Contributions to the plan and charged to benefit costs $ 49,000 $ 42,000 Defined Contribution 401(k) Plan for Non-Union Employees [Member] Defined Contribution Plan Disclosure [Line Items] Minimum period of service of employees to be eligible to participate in plan 1 year Minimum age of employees to be eligible to participate in plan 21 years Profit Sharing Contribution Component 401(k) Plan [Member] Defined Contribution Plan Disclosure [Line Items] Contributions to the plan and charged to benefit costs $ 184,000 Profit Sharing Contribution Component 401(k) Plan [Member] | Plan Year 2017 [Member] Defined Contribution Plan Disclosure [Line Items] Contributions to the plan and charged to benefit costs $ 90,000 Profit Sharing Contribution Component 401(k) Plan [Member] | Plan Year 2016 [Member] Defined Contribution Plan Disclosure [Line Items] Contributions to the plan and charged to benefit costs $ 94,000

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes - Additional 12 Months Ended Information (Detail) - USD Dec. 31, Dec. 31, Dec. 31, ($) 2018 2017 2016 Income Tax Disclosure [Line Items] Taxable years not able to qualify as REIT if company fails in any 4 years taxable year Corporate tax rate 35.00% Effective maximum U.S. federal income tax rate on qualified REIT 29.60% dividends Individual U.S. federal income tax rates 39.60% Withholding distributions rate 35.00% Net operating losses deduction percentage 80.00% Provisions for (benefit from) income taxes $ 0 $ 0 Net operating loss carry-forwards 20,000,000 Capital loss carryforwards $ 9,000,000 Scenario Plan [Member] Income Tax Disclosure [Line Items] Corporate tax rate 21.00% Individual U.S. federal income tax rates 37.00% Withholding distributions rate 21.00% Maximum [Member] Income Tax Disclosure [Line Items] Qualified REIT dividends, deduction percentage 20.00%

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes - 12 Months Ended Reconciliation of GAAP Income (Loss) from Continuing Operations to Dec. 31, 2017Dec. 31, 2016 Taxable Income (Loss) (Detail) - USD ($) $ in Thousands Income Tax Disclosure [Abstract] Net income from operations $ 3,596 $ 4,140 GAAP net loss (income) of taxable subsidiaries 23 (220) GAAP net income from REIT operations 3,619 3,920 Operating expense book deductions greater than tax 1,417 324 Book depreciation in excess of tax depreciation 5,204 5,287 GAAP amortization of intangibles in excess of tax amortization 1,981 2,121 Straightline rent adjustments (468) (621) Acquisition costs capitalized for tax 398 561 (Income) allocable to noncontrolling interest (5,682) (5,181) Estimated taxable income subject to the dividend requirement $ 6,469 $ 6,411

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Future Minimum Rent Schedule - Schedule of Future Minimum Contractual Lease Payments Dec. 31, 2017 to be Received by Company USD ($) under Operating Leases (Detail) $ in Thousands Operating Leases Future Minimum Payments Receivable [Abstract] 2018 $ 45,756 2019 42,795 2020 39,866 2021 37,648 2022 33,537 Thereafter 118,649 Total $ 318,251

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Selected Quarterly Data - 12 Months 3 Months Ended Summary of Selected Ended Quarterly Data (Detail) - Dec. Sep. Jun. Mar. Dec. Sep. Jun. Mar. Dec. Dec. USD ($) 31, 30, 30, 31, 31, 30, 30, 31, 31, 31, $ / shares in Units, $ in 2017 2017 2017 2017 2016 2016 2016 2016 2017 2016 Thousands Selected Quarterly Financial Information [Abstract] Revenues $ $ $ $ $ $ $ $ $ $ 14,268 13,393 12,583 12,928 12,604 12,691 12,236 12,166 53,172 49,697 Net income attributable to $ 1,131 $ 421 $ 88 $ 709 $ 586 $ 1,051 $ 853 $ 144 $ 2,349 $ 2,634 common stockholders Per common share (basic and $ 0.08 $ 0.03 $ 0.01 $ 0.05 $ 0.04 $ 0.08 $ 0.06 $ 0.01 $ 0.17 $ 0.19 diluted)

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Mar. Jan. Jan. Subsequent Events - 08, Mar. 06, 26, 22, Dec. 31, Dec. 31, Mar. 21, Feb. 27, Feb. 09, Feb. 26, Dec. 20, Jul. 27, Dec. 02, Additional Information 2018 2018 2018 2018 2017 2016 2018 2018 2018 2018 2017 2017 2015 (Details) USD USD ($) $ / $ / USD ($) USD ($) USD ($) USD ($) USD ($) USD ($) USD ($) USD ($) USD ($) ($) ft² shares shares $ / shares $ / shares shares shares shares Subsequent Event [Line Items] Common stock, par value (in $ 0.0001 $ 0.0001 dollars per share) | $ / shares Shares repurchased, amount $ 1,038,000 $ 1,248,000 Mortgage notes payable $ 341,447,000 376,523,000 Two CPS Developers LLC [Member] Subsequent Event [Line Items] Date of acquisition Mar. 06, 2018 United States Life Insurance Company Loan Agreement [Member] Subsequent Event [Line Items] Debt instrument, payment The loan terms facility is a ten-year term loan that requires interest only payments at the rate of 4.25% per annum on the principal balance for the first five (5) years of the term and principal and interest payments (amortized over a 30-year period) during the second five (5) years of the term. The entire principal balance is due and payable on April 1, 2028, the loan maturity date. Athene Annuity And Life Assurance Company, Loan [Member] Subsequent Event [Line Items] Mortgage notes payable $ $ 15,000,000 15,000,000 Interest rate 3.00%

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Maturity Mar. 01, 2018 Key Bank [Member] | Operating Partnership [Member] Subsequent Event [Line Items] Line of Credit facility, $ $ $ maximum borrowing capacity 50,500,00088,000,00050,000,000 Line of credit facility, maturity Feb. 28, date 2018 Subsequent Event [Member] | Garden 1101 [Member] Subsequent Event [Line Items] Distribution received $ 3,700,000 Subsequent Event [Member] | Two CPS Developers LLC [Member] Subsequent Event [Line Items] Percentage of interest 50.00% purchased Business combination, $ consideration transferred 5,250,000 Area of joint venture owned 132,650 office building demolished | ft² Area of joint venture owned clear industrial building 150,325 replaced with | ft² Subsequent Event [Member] | United States Life Insurance Company Loan Agreement [Member] Subsequent Event [Line Items] Mortgage notes payable $ 33,000,000 Permanent financing period 10 years Interest rate 4.25% Maturity Apr. 01, 2028 Subsequent Event [Member] | Athene Annuity And Life Assurance Company, Loan [Member] Subsequent Event [Line Items] Mortgage notes payable paid $ 15,000,000 Subsequent Event [Member] | Key Bank [Member] | Operating Partnership [Member] Subsequent Event [Line Items] Line of Credit facility, $ $ maximum borrowing capacity 55,000,000 50,524,986 Line of credit facility, maturity Jun. 30, date 2019 Mackenzie Tender Offer [Member] | Subsequent Event [Member] Subsequent Event [Line Items] Common stock, par value (in $ dollars per share) | $ / shares 0.0001 Share price | $ / shares $ 6.50 Number of shares tendered | 0 shares

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Offer expiration date Mar. 02, 2018 Self-Tender Offer [Member] Subsequent Event [Line Items] Offer expiration date Mar. 05, 2018 Self-Tender Offer [Member] | Subsequent Event [Member] Subsequent Event [Line Items] Common stock, par value (in $ dollars per share) | $ / shares 0.0001 Share price | $ / shares $ 7.00 Number of shares tendered | 5,000 shares Shares repurchased, amount $ 35,000 Share Redemption Program [Member] | Subsequent Event [Member] Subsequent Event [Line Items] Number of shares tendered | 0 shares Maximum [Member] | Mackenzie Tender Offer [Member] | Subsequent Event [Member] Subsequent Event [Line Items] Number of common stock 750,000 offered | shares Maximum [Member] | Self- Tender Offer [Member] | Subsequent Event [Member] Subsequent Event [Line Items] Number of common stock 750,000 offered | shares

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Schedule III - Consolidated 12 Months Real Estate and Ended Accumulated Depreciation Dec. 31, Dec. 31, Dec. 31, (Detail) - USD ($) 2017 2016 2015 $ in Thousands SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 199,651 Initial Cost to Company, Buildings & Improvements 288,203 Cost Capitalized Subsequent to Acquisition, Improvements 34,332 Gross Carrying Value of Land, Buildings & Improvements, Total $ $ 522,186 474,573 442,765 Gross Carrying Value, Land 199,782 Gross Carrying Value, Buildings & Improvements 322,404 Accumulated Depreciation 55,136 $ 45,252 $ 36,412 New York [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land 144,202 Initial Cost to Company, Buildings & Improvements 98,038 Cost Capitalized Subsequent to Acquisition, Improvements 12,438 Gross Carrying Value of Land, Buildings & Improvements, Total 254,678 Gross Carrying Value, Land 144,333 Gross Carrying Value, Buildings & Improvements 110,345 Accumulated Depreciation 24,312 New York [Member] | 103 Fairview Park Drive, Elmsford, NY [Member] | Genworth Life Insurance Company [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land 3,416 Initial Cost to Company, Buildings & Improvements 9,972 Cost Capitalized Subsequent to Acquisition, Improvements 375 Gross Carrying Value of Land, Buildings & Improvements, Total 13,763 Gross Carrying Value, Land 3,416 Gross Carrying Value, Buildings & Improvements 10,347 Accumulated Depreciation $ 1,480 Date of Construction 1988 Date Acquired Jan. 17, 2013 New York [Member] | 412 Fairview Park Drive, Elmsford, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 3,237 Initial Cost to Company, Buildings & Improvements 572 Gross Carrying Value of Land, Buildings & Improvements, Total 3,809 Gross Carrying Value, Land 3,237 Gross Carrying Value, Buildings & Improvements 572

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accumulated Depreciation $ 71 Date Acquired Jan. 17, 2013 New York [Member] | 401 Fieldcrest Drive, Elmsford, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 3,008 Initial Cost to Company, Buildings & Improvements 7,097 Gross Carrying Value of Land, Buildings & Improvements, Total 10,105 Gross Carrying Value, Land 3,008 Gross Carrying Value, Buildings & Improvements 7,097 Accumulated Depreciation $ 913 Date Acquired Jan. 17, 2013 New York [Member] | 404 Fieldcrest Drive, Elmsford, NY [Member] | Genworth Life Insurance Company [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 2,275 Initial Cost to Company, Buildings & Improvements 7,822 Cost Capitalized Subsequent to Acquisition, Improvements 303 Gross Carrying Value of Land, Buildings & Improvements, Total 10,400 Gross Carrying Value, Land 2,275 Gross Carrying Value, Buildings & Improvements 8,125 Accumulated Depreciation $ 1,084 Date of Construction 1996 Date Acquired Jan. 17, 2013 New York [Member] | 36 Midland Ave, Port Chester, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 2,428 Initial Cost to Company, Buildings & Improvements 6,409 Cost Capitalized Subsequent to Acquisition, Improvements 391 Gross Carrying Value of Land, Buildings & Improvements, Total 9,228 Gross Carrying Value, Land 2,428 Gross Carrying Value, Buildings & Improvements 6,800 Accumulated Depreciation $ 938 Date of Construction 1979 Date Acquired Jan. 17, 2013 New York [Member] | 100-110 Midland Ave, Port Chester, NY | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 5,390 Initial Cost to Company, Buildings & Improvements 16,463

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Cost Capitalized Subsequent to Acquisition, Improvements 113 Gross Carrying Value of Land, Buildings & Improvements, Total 21,966 Gross Carrying Value, Land 5,390 Gross Carrying Value, Buildings & Improvements 16,576 Accumulated Depreciation $ 2,180 Date of Construction 1979 Date Acquired Jan. 17, 2013 New York [Member] | 199 Ridgewood Drive, Elmsford, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 827 Initial Cost to Company, Buildings & Improvements 1,916 Gross Carrying Value of Land, Buildings & Improvements, Total 2,743 Gross Carrying Value, Land 827 Gross Carrying Value, Buildings & Improvements 1,916 Accumulated Depreciation $ 288 Date of Construction 1992 Date Acquired Jan. 17, 2013 New York [Member] | 203 Ridgewood Drive, Elmsford, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 948 Initial Cost to Company, Buildings & Improvements 2,265 Gross Carrying Value of Land, Buildings & Improvements, Total 3,213 Gross Carrying Value, Land 948 Gross Carrying Value, Buildings & Improvements 2,265 Accumulated Depreciation $ 333 Date of Construction 1986 Date Acquired Jan. 17, 2013 New York [Member] | 8 Slater Street, Port Chester, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,997 Initial Cost to Company, Buildings & Improvements 4,640 Cost Capitalized Subsequent to Acquisition, Improvements 382 Gross Carrying Value of Land, Buildings & Improvements, Total 7,019 Gross Carrying Value, Land 1,997 Gross Carrying Value, Buildings & Improvements 5,022 Accumulated Depreciation $ 756 Date of Construction 1984 Date Acquired Jan. 17, 2013

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document New York [Member] | 612 Wortman Ave, Brooklyn, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 8,907 Initial Cost to Company, Buildings & Improvements 117 Cost Capitalized Subsequent to Acquisition, Improvements 4,284 Gross Carrying Value of Land, Buildings & Improvements, Total 13,308 Gross Carrying Value, Land 8,907 Gross Carrying Value, Buildings & Improvements 4,401 Accumulated Depreciation $ 3,402 Date of Construction 1965 Date Acquired Mar. 26, 2007 New York [Member] | 165-25 147th Ave, Jamaica, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 360 Initial Cost to Company, Buildings & Improvements 3,821 Cost Capitalized Subsequent to Acquisition, Improvements 856 Gross Carrying Value of Land, Buildings & Improvements, Total 5,037 Gross Carrying Value, Land 360 Gross Carrying Value, Buildings & Improvements 4,677 Accumulated Depreciation $ 4,677 Date of Construction 1952 Date Acquired Mar. 26, 2007 New York [Member] | 114-15 Guy Brewer Blvd, Jamaica, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 23,100 Initial Cost to Company, Buildings & Improvements 6 Cost Capitalized Subsequent to Acquisition, Improvements 2,067 Gross Carrying Value of Land, Buildings & Improvements, Total 25,173 Gross Carrying Value, Land 23,100 Gross Carrying Value, Buildings & Improvements 2,073 Accumulated Depreciation $ 2,073 Date of Construction 1965 Date Acquired Mar. 26, 2007 New York [Member] | 49-19 Rockaway Beach Blvd, Far Rockaway, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 74 Initial Cost to Company, Buildings & Improvements 783 Cost Capitalized Subsequent to Acquisition, Improvements 31

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Gross Carrying Value of Land, Buildings & Improvements, Total 888 Gross Carrying Value, Land 74 Gross Carrying Value, Buildings & Improvements 814 Accumulated Depreciation $ 812 Date of Construction 1931 Date Acquired Mar. 26, 2007 New York [Member] | 85-01 24th Ave, East Elmhurst, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 38,210 Initial Cost to Company, Buildings & Improvements 937 Cost Capitalized Subsequent to Acquisition, Improvements 2,343 Gross Carrying Value of Land, Buildings & Improvements, Total 41,490 Gross Carrying Value, Land 38,210 Gross Carrying Value, Buildings & Improvements 3,280 Accumulated Depreciation $ 3,038 Date of Construction 1954 Date Acquired Mar. 26, 2007 New York [Member] | 23-85 87th Street, East Elmhurst, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 14,506 Initial Cost to Company, Buildings & Improvements 323 Cost Capitalized Subsequent to Acquisition, Improvements 1,168 Gross Carrying Value of Land, Buildings & Improvements, Total 15,997 Gross Carrying Value, Land 14,637 Gross Carrying Value, Buildings & Improvements 1,360 Accumulated Depreciation $ 1,081 Date of Construction 1966 Date Acquired Mar. 26, 2007 New York [Member] | 28-20 Borden Ave, Long Island City, NY [Member] | People's United Bank [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 26,678 Initial Cost to Company, Buildings & Improvements 98 Cost Capitalized Subsequent to Acquisition, Improvements 125 Gross Carrying Value of Land, Buildings & Improvements, Total 26,901 Gross Carrying Value, Land 26,678 Gross Carrying Value, Buildings & Improvements 223 Accumulated Depreciation $ 90 Date Acquired Jul. 02, 2014

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document New York [Member] | 606 Cozine Ave, Brooklyn, NY [Member] | United States Life Insurance Company, Loan [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 3,304 Initial Cost to Company, Buildings & Improvements 6,469 Gross Carrying Value of Land, Buildings & Improvements, Total 9,773 Gross Carrying Value, Land 3,304 Gross Carrying Value, Buildings & Improvements 6,469 Accumulated Depreciation $ 719 Date of Construction 1969 Date Acquired May 10, 2016 New York [Member] | 201 Neelytown Road, Montgomery, NY [Member] | United States Life Insurance Company, Loan [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 4,751 Initial Cost to Company, Buildings & Improvements 27,906 Gross Carrying Value of Land, Buildings & Improvements, Total 32,657 Gross Carrying Value, Land 4,751 Gross Carrying Value, Buildings & Improvements 27,906 Accumulated Depreciation $ 289 Date of Construction 2017 Date Acquired Aug. 31, 2017 New York [Member] | 112 Midland Ave, Port Chester, NY [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 786 Initial Cost to Company, Buildings & Improvements 422 Gross Carrying Value of Land, Buildings & Improvements, Total 1,208 Gross Carrying Value, Land 786 Gross Carrying Value, Buildings & Improvements 422 Accumulated Depreciation $ 88 Date of Construction 1980 Date Acquired Mar. 26, 2007 New Jersey [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 26,812 Initial Cost to Company, Buildings & Improvements 93,464 Cost Capitalized Subsequent to Acquisition, Improvements 6,253 Gross Carrying Value of Land, Buildings & Improvements, Total 126,529 Gross Carrying Value, Land 26,812 Gross Carrying Value, Buildings & Improvements 99,717 Accumulated Depreciation 10,589

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document New Jersey [Member] | 100 American Road, Morris Plains, NJ [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land 2,275 Initial Cost to Company, Buildings & Improvements 12,538 Cost Capitalized Subsequent to Acquisition, Improvements 367 Gross Carrying Value of Land, Buildings & Improvements, Total 15,180 Gross Carrying Value, Land 2,275 Gross Carrying Value, Buildings & Improvements 12,905 Accumulated Depreciation $ 1,817 Date of Construction 1986 Date Acquired Jan. 17, 2013 New Jersey [Member] | 200 American Road, Morris Plains, NJ [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 725 Initial Cost to Company, Buildings & Improvements 5,361 Cost Capitalized Subsequent to Acquisition, Improvements 50 Gross Carrying Value of Land, Buildings & Improvements, Total 6,136 Gross Carrying Value, Land 725 Gross Carrying Value, Buildings & Improvements 5,411 Accumulated Depreciation $ 740 Date of Construction 2004 Date Acquired Jan. 17, 2013 New Jersey [Member] | 300 American Road, Morris Plains, NJ [Member] | Genworth Life Insurance Company [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,466 Initial Cost to Company, Buildings & Improvements 6,628 Cost Capitalized Subsequent to Acquisition, Improvements 47 Gross Carrying Value of Land, Buildings & Improvements, Total 8,141 Gross Carrying Value, Land 1,466 Gross Carrying Value, Buildings & Improvements 6,675 Accumulated Depreciation $ 912 Date of Construction 1987 Date Acquired Jan. 17, 2013 New Jersey [Member] | 400 American Road, Morris Plains, NJ [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,724 Initial Cost to Company, Buildings & Improvements 9,808 Cost Capitalized Subsequent to Acquisition, Improvements 239

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Gross Carrying Value of Land, Buildings & Improvements, Total 11,771 Gross Carrying Value, Land 1,724 Gross Carrying Value, Buildings & Improvements 10,047 Accumulated Depreciation $ 1,494 Date of Construction 1990 Date Acquired Jan. 17, 2013 New Jersey [Member] | 500 American Road, Morris Plains, NJ [Member] | Genworth Life Insurance Company [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,711 Initial Cost to Company, Buildings & Improvements 8,111 Gross Carrying Value of Land, Buildings & Improvements, Total 9,822 Gross Carrying Value, Land 1,711 Gross Carrying Value, Buildings & Improvements 8,111 Accumulated Depreciation $ 1,099 Date of Construction 1988 Date Acquired Jan. 17, 2013 New Jersey [Member] | 20 East Halsey Road, Parsippany, NJ [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,898 Initial Cost to Company, Buildings & Improvements 1,402 Cost Capitalized Subsequent to Acquisition, Improvements 5,399 Gross Carrying Value of Land, Buildings & Improvements, Total 8,699 Gross Carrying Value, Land 1,898 Gross Carrying Value, Buildings & Improvements 6,801 Accumulated Depreciation $ 475 Date of Construction 1970 Date Acquired Apr. 23, 2014 New Jersey [Member] | 1110 Centennial Ave, Piscataway, NJ [Member] | Allstate Corporation [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 790 Initial Cost to Company, Buildings & Improvements 1,937 Cost Capitalized Subsequent to Acquisition, Improvements 7 Gross Carrying Value of Land, Buildings & Improvements, Total 2,734 Gross Carrying Value, Land 790 Gross Carrying Value, Buildings & Improvements 1,944 Accumulated Depreciation $ 183 Date of Construction 1979 Date Acquired Mar. 13, 2015

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document New Jersey [Member] | 11 Constitution Ave, Piscataway, NJ [Member] | Allstate Corporation [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,780 Initial Cost to Company, Buildings & Improvements 8,999 Gross Carrying Value of Land, Buildings & Improvements, Total 10,779 Gross Carrying Value, Land 1,780 Gross Carrying Value, Buildings & Improvements 8,999 Accumulated Depreciation $ 703 Date of Construction 1989 Date Acquired Mar. 13, 2015 New Jersey [Member] | 21 Constitution Ave, Piscataway, NJ [Member] | Allstate Corporation [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 6,187 Initial Cost to Company, Buildings & Improvements 18,855 Gross Carrying Value of Land, Buildings & Improvements, Total 25,042 Gross Carrying Value, Land 6,187 Gross Carrying Value, Buildings & Improvements 18,855 Accumulated Depreciation $ 1,599 Date of Construction 2002 Date Acquired Mar. 13, 2015 New Jersey [Member] | 4 Corporate Place, Piscataway, NJ [Member] | Allstate Corporation [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 2,145 Initial Cost to Company, Buildings & Improvements 1,744 Cost Capitalized Subsequent to Acquisition, Improvements 144 Gross Carrying Value of Land, Buildings & Improvements, Total 4,033 Gross Carrying Value, Land 2,145 Gross Carrying Value, Buildings & Improvements 1,888 Accumulated Depreciation $ 253 Date of Construction 1974 Date Acquired Mar. 13, 2015 New Jersey [Member] | 8 Corporate Place, Piscataway, NJ [Member] | Allstate Corporation [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 2,666 Initial Cost to Company, Buildings & Improvements 4,381 Gross Carrying Value of Land, Buildings & Improvements, Total 7,047 Gross Carrying Value, Land 2,666 Gross Carrying Value, Buildings & Improvements 4,381

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accumulated Depreciation $ 470 Date of Construction 1977 Date Acquired Mar. 13, 2015 New Jersey [Member] | 25 Corporate Place, Piscataway, NJ [Member] | Allstate Corporation [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 2,269 Initial Cost to Company, Buildings & Improvements 8,343 Gross Carrying Value of Land, Buildings & Improvements, Total 10,612 Gross Carrying Value, Land 2,269 Gross Carrying Value, Buildings & Improvements 8,343 Accumulated Depreciation $ 730 Date of Construction 1985 Date Acquired Mar. 13, 2015 New Jersey [Member] | 1938 Olney Avenue, Cherry Hill, NJ [Member] | United States Life Insurance Company, Loan [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,176 Initial Cost to Company, Buildings & Improvements 5,357 Gross Carrying Value of Land, Buildings & Improvements, Total 6,533 Gross Carrying Value, Land 1,176 Gross Carrying Value, Buildings & Improvements 5,357 Accumulated Depreciation $ 114 Date of Construction 1966 Date Acquired Jul. 27, 2017 Connecticut [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 26,149 Initial Cost to Company, Buildings & Improvements 83,668 Cost Capitalized Subsequent to Acquisition, Improvements 15,530 Gross Carrying Value of Land, Buildings & Improvements, Total 125,347 Gross Carrying Value, Land 26,149 Gross Carrying Value, Buildings & Improvements 99,198 Accumulated Depreciation 19,087 Connecticut [Member] | 466 Bridgeport Ave, Shelton, CT [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land 833 Initial Cost to Company, Buildings & Improvements 867 Cost Capitalized Subsequent to Acquisition, Improvements 3,240 Gross Carrying Value of Land, Buildings & Improvements, Total 4,940 Gross Carrying Value, Land 833 Gross Carrying Value, Buildings & Improvements 4,107

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accumulated Depreciation $ 336 Date of Construction 1982 Date Acquired Jan. 17, 2013 Connecticut [Member] | 470 Bridgeport Ave, Shelton, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 2,660 Initial Cost to Company, Buildings & Improvements 4,807 Cost Capitalized Subsequent to Acquisition, Improvements 89 Gross Carrying Value of Land, Buildings & Improvements, Total 7,556 Gross Carrying Value, Land 2,660 Gross Carrying Value, Buildings & Improvements 4,896 Accumulated Depreciation $ 699 Date of Construction 1973 Date Acquired Jan. 17, 2013 Connecticut [Member] | 15 Progress Drive, Shelton, CT [Member] | People's United Bank [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 984 Initial Cost to Company, Buildings & Improvements 3,411 Gross Carrying Value of Land, Buildings & Improvements, Total 4,395 Gross Carrying Value, Land 984 Gross Carrying Value, Buildings & Improvements 3,411 Accumulated Depreciation $ 514 Date of Construction 1980 Date Acquired Jan. 17, 2013 Connecticut [Member] | 33 Platt Road, Shelton, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 3,196 Initial Cost to Company, Buildings & Improvements 5,402 Gross Carrying Value of Land, Buildings & Improvements, Total 8,598 Gross Carrying Value, Land 3,196 Gross Carrying Value, Buildings & Improvements 5,402 Accumulated Depreciation $ 1,311 Date of Construction 1972 Date Acquired Oct. 15, 2014 Connecticut [Member] | 950-974 Bridgeport Ave, Milford, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,551

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Initial Cost to Company, Buildings & Improvements 3,524 Cost Capitalized Subsequent to Acquisition, Improvements 32 Gross Carrying Value of Land, Buildings & Improvements, Total 5,107 Gross Carrying Value, Land 1,551 Gross Carrying Value, Buildings & Improvements 3,556 Accumulated Depreciation $ 493 Date of Construction 1946 Date Acquired Jan. 17, 2013 Connecticut [Member] | 12 Cascade Blvd, Orange, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,688 Initial Cost to Company, Buildings & Improvements 3,742 Cost Capitalized Subsequent to Acquisition, Improvements 2 Gross Carrying Value of Land, Buildings & Improvements, Total 5,432 Gross Carrying Value, Land 1,688 Gross Carrying Value, Buildings & Improvements 3,744 Accumulated Depreciation $ 491 Date of Construction 1987 Date Acquired Jan. 17, 2013 Connecticut [Member] | 15 Executive Blvd., Orange, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,974 Initial Cost to Company, Buildings & Improvements 5,357 Cost Capitalized Subsequent to Acquisition, Improvements 1,004 Gross Carrying Value of Land, Buildings & Improvements, Total 8,335 Gross Carrying Value, Land 1,974 Gross Carrying Value, Buildings & Improvements 6,361 Accumulated Depreciation $ 1,057 Date of Construction 1983 Date Acquired Jan. 17, 2013 Connecticut [Member] | 25 Executive Blvd., Orange, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 438 Initial Cost to Company, Buildings & Improvements 1,481 Cost Capitalized Subsequent to Acquisition, Improvements 33 Gross Carrying Value of Land, Buildings & Improvements, Total 1,952 Gross Carrying Value, Land 438 Gross Carrying Value, Buildings & Improvements 1,514 Accumulated Depreciation $ 189

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Date of Construction 1983 Date Acquired Jan. 17, 2013 Connecticut [Member] | 22 Marsh Hill Rd, Orange, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,462 Initial Cost to Company, Buildings & Improvements 2,915 Cost Capitalized Subsequent to Acquisition, Improvements 575 Gross Carrying Value of Land, Buildings & Improvements, Total 4,952 Gross Carrying Value, Land 1,462 Gross Carrying Value, Buildings & Improvements 3,490 Accumulated Depreciation $ 461 Date of Construction 1989 Date Acquired Jan. 17, 2013 Connecticut [Member] | 269 Lambert Rd, Orange, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,666 Initial Cost to Company, Buildings & Improvements 3,516 Cost Capitalized Subsequent to Acquisition, Improvements 230 Gross Carrying Value of Land, Buildings & Improvements, Total 5,412 Gross Carrying Value, Land 1,666 Gross Carrying Value, Buildings & Improvements 3,746 Accumulated Depreciation $ 647 Date of Construction 1986 Date Acquired Jan. 17, 2013 Connecticut [Member] | 110 Old County Circle, Windsor Locks, CT [Member] | Hartford Accident [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,572 Initial Cost to Company, Buildings & Improvements 11,797 Cost Capitalized Subsequent to Acquisition, Improvements 60 Gross Carrying Value of Land, Buildings & Improvements, Total 13,429 Gross Carrying Value, Land 1,572 Gross Carrying Value, Buildings & Improvements 11,857 Accumulated Depreciation $ 1,983 Date of Construction 2003 Date Acquired Apr. 08, 2014 Connecticut [Member] | 112 Old County Road, Windsor Locks, CT [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 200

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Cost Capitalized Subsequent to Acquisition, Improvements 5,442 Gross Carrying Value of Land, Buildings & Improvements, Total 5,642 Gross Carrying Value, Land 200 Gross Carrying Value, Buildings & Improvements $ 5,442 Date Acquired Apr. 08, 2014 Connecticut [Member] | 4 Meadow Street, Norwalk, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 856 Initial Cost to Company, Buildings & Improvements 3,034 Cost Capitalized Subsequent to Acquisition, Improvements 307 Gross Carrying Value of Land, Buildings & Improvements, Total 4,197 Gross Carrying Value, Land 856 Gross Carrying Value, Buildings & Improvements 3,341 Accumulated Depreciation $ 446 Date of Construction 1992 Date Acquired Aug. 22, 2014 Connecticut [Member] | 777 Brook Street, Rocky Hill, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 2,456 Initial Cost to Company, Buildings & Improvements 8,658 Cost Capitalized Subsequent to Acquisition, Improvements 415 Gross Carrying Value of Land, Buildings & Improvements, Total 11,529 Gross Carrying Value, Land 2,456 Gross Carrying Value, Buildings & Improvements 9,073 Accumulated Depreciation $ 901 Date of Construction 1969 Date Acquired Jan. 14, 2015 Connecticut [Member] | 8 Farm Springs Road, Farmington, CT [Member] | Athene Life and Annuity [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 3,533 Initial Cost to Company, Buildings & Improvements 16,248 Cost Capitalized Subsequent to Acquisition, Improvements 3,832 Gross Carrying Value of Land, Buildings & Improvements, Total 23,613 Gross Carrying Value, Land 3,533 Gross Carrying Value, Buildings & Improvements 20,080 Accumulated Depreciation $ 8,043 Date of Construction 1980 Date Acquired Feb. 28, 2008

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Connecticut [Member] | 35 Executive Blvd., Orange, CT [Member] | American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 1,080 Initial Cost to Company, Buildings & Improvements 8,909 Cost Capitalized Subsequent to Acquisition, Improvements 269 Gross Carrying Value of Land, Buildings & Improvements, Total 10,258 Gross Carrying Value, Land 1,080 Gross Carrying Value, Buildings & Improvements 9,178 Accumulated Depreciation $ 1,516 Date of Construction 1988 Date Acquired Jan. 17, 2013 Delaware [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land $ 2,488 Initial Cost to Company, Buildings & Improvements 13,033 Cost Capitalized Subsequent to Acquisition, Improvements 111 Gross Carrying Value of Land, Buildings & Improvements, Total 15,632 Gross Carrying Value, Land 2,488 Gross Carrying Value, Buildings & Improvements 13,144 Accumulated Depreciation 1,148 Delaware [Member] | 300 McIntire Drive, Newark, DE [Member] | United States Life Insurance Company, Loan [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Initial Cost to Company, Land 2,488 Initial Cost to Company, Buildings & Improvements 13,033 Cost Capitalized Subsequent to Acquisition, Improvements 111 Gross Carrying Value of Land, Buildings & Improvements, Total 15,632 Gross Carrying Value, Land 2,488 Gross Carrying Value, Buildings & Improvements 13,144 Accumulated Depreciation $ 1,148 Date of Construction 1999 Date Acquired Jun. 01, 2016

Copyright © 2018 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Schedule III - Consolidated Real Estate and Dec. 31, 2017 Accumulated Depreciation USD ($) (Parenthetical) (Detail) $ in Thousands SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Principal Outstanding $ 376,523 Athene Life and Annuity [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Principal Outstanding 15,000 Genworth Life Insurance Company [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Principal Outstanding 26,574 People's United Bank [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Principal Outstanding 2,249 Hartford Accident [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Principal Outstanding 6,000 People's United Bank [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Principal Outstanding 15,500 American International Group [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Principal Outstanding 233,100 Allstate Corporation [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Principal Outstanding 39,100 United States Life Insurance Company, Loan [Member] SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] Principal Outstanding $ 39,000