Valuation Report

VALUATION REPORT

HSBC BUILDING 452 Fifth Ave. & 1 West 39th St. New York, NY CBRE, Inc. File No. 16-047NY-2836

452 FIFTH OWNERS LLC Attn: Mr. Eli Elefant CEO

452 Fifth Avenue Owners, LLC New York, NY 10018

VALUATION & ADVISORY SERVICES

One Penn Plaza, Suite 1835 New York, NY 10119

T (212) 715-5741 F (212) 207-6069

www.cbre.com www.cbre.com November 14, 2016

452 FIFTH OWNERS LLC Attn: Mr. Eli Elefant CEO 452 Fifth Avenue New York, NY 10018

RE: Appraisal of HSBC BUILDING 452 Fifth Ave & 1 West 39th Street New York, New York County, NY CBRE File No 16-047NY-2836 Dear Mr. Elefant: At your request and authorization, CBRE, Inc. has prepared an appraisal of the market value of the referenced property. Our analysis is presented in the following Self-Contained Appraisal Report.

The subject property was originally four separate buildings known as the Knox Building (built 1902), One West 39th Street (built 1923), The Kress Building (built 1935) and the Tower (built 1984). The buildings were conjoined during the construction of the Tower in 1984 and now function as two interconnected, but separate buildings totaling 865,339 square feet (known as 452 Fifth Avenue and One West 39th Street). 452 Fifth Avenue is a 30-story (no 13th floor), 720,945 square foot office building, while the attached One West 39th Street is a 12-story, 144,394 square foot office building. The overall property is currently 99.5% leased, with only a small storage space in 1 West 39th Street not currently leased.

The building was fully leased to HSBC through April of 2011 as part of a sale-leaseback, however they phased down their occupancy through March of 2012, remaining only in 140,255 square feet at 1 West 39th Street (all office area) and 407,708 square feet at 452 Fifth Avenue (basement, retail and floors 2-11) for a 10 year term, with options that entitle the tenant to remain within all or part of the space for two additional periods of 10 years. They are currently in advanced negotiations to extend their occupancy within the subject for a period that will likely be in excess of the initial option period and we have modeled our analysis under this scenario. Additional details regarding the physical and economic characteristics of the subject property are more fully described within the enclosed report. Based on the analysis contained in the following report, the market value of the subject is concluded as follows.

MARKET VALUE CONCLUSION Appraisal Premise Interest Appraised Date of Value Value Conclusion As Is Leased Fee Interest September 30, 2016 $855,000,000 Compiled by CBRE

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Data, information, and calculations leading to the value conclusion are incorporated in the report following this letter. The report, in its entirety, including all assumptions and limiting conditions, is an integral part of, and inseparable from, this letter.

The following appraisal sets forth the most pertinent data gathered, the techniques employed, and the reasoning leading to the opinion of value. The analyses, opinions and conclusions were developed based on, and this report has been prepared in conformance with, our interpretation of the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. It also conforms to Title XI Regulations and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) updated in 1994 and further updated by the Interagency Appraisal and Evaluation Guidelines promulgated in 2010.

The intended use and user of our report is specifically named in our report as agreed upon in our contract for services and/or reliance language found in the report. No other use or user of the report is permitted by any other party for any other purpose. Dissemination of this report by any party to non- client, non-intended users does not extend reliance to any other party and CBRE will not be responsible for unauthorized use of the report, its conclusions or contents used partially or in its entirety.

It has been a pleasure to assist you in this assignment. If you have any questions concerning the analysis, or if CBRE, Inc. can be of further service, please contact us. Respectfully submitted,

CBRE - VALUATION & ADVISORY SERVICES

Mark T. Godfrey, MAI Executive Vice President NY Certification No. 46-41668

Phone: 212-715-5719 Fax: 212-207-6169 Email: [email protected]

HSBC BUILDING | CERTIFICATION OF THE APPRAISAL

CERTIFICATION OF THE APPRAISAL

We certify to the best of our knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial and unbiased professional analyses, opinions, and conclusions. 3. We have no present or prospective interest in or bias with respect to the property that is the subject of this report and have no personal interest in or bias with respect to the parties involved with this assignment. 4. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 5. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 6. This appraisal assignment was not based upon a requested minimum valuation, a specific valuation, or the approval of a loan. 7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice, as well as the requirements of the State of NY. 8. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 9. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 10. As of the date of this report, Mark T. Godfrey has completed the continuing education program of the Appraisal Institute. 11. Mark T. Godfrey has made a personal inspection of the property that is the subject of this report. 12. No one provided significant real property appraisal assistance to the persons signing this report. 13. Valuation & Advisory Services operates as an independent economic entity within CBRE. All parties to this contract are aware that CBRE currently manages and leases the subject property and acted as advisor in the purchase of the property during 2009. CBRE Valuation confirms that our valuation was conducted independent of our other business units and the results of our analysis represent our unbiased opinion. Any interaction with our other business units was restricted to gathering information regarding the subject property‘s operation or leasing prospects. Absolute client confidentiality and privacy were maintained at all times with regard to this assignment without conflict of interest. 14. Mark Godfrey has provided real estate related services on this property in the three years prior to accepting this assignment.

Mark T. Godfrey, MAI Executive Vice President

HSBC BUILDING | SUBJECT PHOTOGRAPHS

SUBJECT PHOTOGRAPHS

SUBJECT PHOTOGRAPH – 452 FIFTH AVENUE

HSBC BUILDING | SUBJECT PHOTOGRAPHS

SUBJECT PHOTOGRAPH – 1 WEST 39TH STREET

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HSBC BUILDING | SUBJECT PHOTOGRAPHS

TOWER OFFICE SPACE

HSBC BUILDING | SUBJECT PHOTOGRAPHS

INTERIOR OFFICE SPACE

OFFICE INTERIOR

HSBC BUILDING | SUBJECT PHOTOGRAPHS

FIFTH AVENUE RETAIL FRONTAGE

ROOFTOP MECHANICALS

HSBC BUILDING | SUBJECT PHOTOGRAPHS

452 FIFTH AVENUE – BUILDING LOBBY

1 WEST 39TH STREET LOBBY

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HSBC BUILDING | SUMMARY OF SALIENT FACTS

SUMMARY OF SALIENT FACTS

Location 452 Fifth Avenue New York, NY

Assessor’s Parcel Number Block 841, Lots 31 & 49 Highest and Best Use As If Vacant Office (Land Banking) As Improved Office Property Rights Appraised Leased Fee Interest Land Area 1.02 AC 44,356 SF Improvements Property Type Office (Multi Tenant) Number of Buildings 2 TOTAL 452 Fifth 1 West 39th Number of Stories 12 & 30 30 (no 13th) 12 Gross Building Area 788,773 SF 653,441 SF 135,332 SF Net Rentable Area 865,339 SF 720,945 SF 144,394 SF Year Built 1902-1984 1902-1984 1923 Condition Very Good Very Good Average Estimated Exposure Time 6 Months Financial Indicators Current Occupancy 99.5% Stabilized Occupancy 98.0% Stabilized Credit Loss 1.0% Overall Capitalization Rate 4.25% Discount Rate 6.50% Terminal Capitalization Rate 5.00%

Pro Forma Operating Data Total Per SF Effective Gross Income $64,129,823 $74.11 Operating Expenses $27,136,999 $31.36 Expense Ratio 42.32% Net Operating Income $36,992,824 $42.75

VALUATION Total Per SF Fair Value Estimate/Market Value As Is On: September 30, 2016 Sales Comparison Approach $855,000,000 $988.05 Income Capitalization Approach (via DCF) $855,000,000 $988.05

CONCLUDED MARKET VALUE Appraisal Premise Interest AppraisedDate of Value Value As Is Leased Fee InterestSeptember 30, 2016 $855,000,000 Compiled by CBRE

STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT)

Strengths and weaknesses are internal to the subject; opportunities & threats are external to the subject.

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HSBC BUILDING | SUMMARY OF SALIENT FACTS

Strengths  The subject is 99.5% occupied with little near term rollover.  The subject is anchored by long term leases to HSBC, Baker & McKenzie and Man Group. HSBC is in advanced negotiation to renew their lease and we have modeled that the tenant remains in place based on the most likely renewal scenario for over 10 years.  The subject has good access to mass transit and is situated in a desirable location across from the New York Public Library and featuring Bryant Park views.  The layout of the property is highly functional for HSBC, with Class A office, back-office, retail, data center and storage uses all on site, making renewal at the end of the initial term more likely. Weaknesses  The 1 West 39th Street portion of the subject property is a Class B office property. Opportunities  Investment sales activity has remained strong in Manhattan over the past few years.  Limited potential for competitive new developments Threats  Economic Uncertainty  Potential for increases in interest rates EXTRAORDINARY ASSUMPTIONS

An extraordinary assumption is defined as “an assumption directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis.” 1 We have mode the extraordinary assumption that the advanced negotiations underway with HSBC will result in a long term renewal transaction at the terms reported by property management. The terms are subject to a confidentiality agreement and the Client (intended user of this report) has requested that we not publish the actual terms within this document. The term sheet provided has been retained within our deal file and indicates the negotiated rents are within a reasonable range (slightly below) of our concluded market rents for the premises involved. The use of this extraordinary assumption may have impacted the results contained herein.

HYPOTHETICAL CONDITIONS

A hypothetical condition is defined as “that which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.” 2

 None noted

1 Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal Institute, 2010), 73. 2 Dictionary of Real Estate Appraisal, 97.

HSBC BUILDING | TABLE OF CONTENTS

TABLE OF CONTENTS

CERTIFICATION OF THE APPRAISAL ...... i SUBJECT PHOTOGRAPHS...... ii SUMMARY OF SALIENT FACTS ...... viii TABLE OF CONTENTS ...... x INTRODUCTION ...... 1 AREA ANALYSIS ...... 7 NEIGHBORHOOD ANALYSIS ...... 18 SITE ANALYSIS ...... 21 IMPROVEMENT ANALYSIS ...... 25 OFFICE MARKET ANALYSIS ...... 36 ZONING...... 61 TAX AND ASSESSMENT DATA ...... 64 HIGHEST AND BEST USE ...... 68 APPRAISAL METHODOLOGY ...... 70 SALES COMPARISON APPROACH ...... 71 INCOME CAPITALIZATION APPROACH ...... 77 RECONCILIATION OF VALUE ...... 111 ASSUMPTIONS AND LIMITING CONDITIONS ...... 112 ADDENDA A Glossary of Terms B Improved Sale Data Sheets C Rent Comparable Data Sheets D Operating Data E ARGUS Supporting Schedules F Engagement Letter G Qualifications

HSBC BUILDING | INTRODUCTION

INTRODUCTION

PROPERTY IDENTIFICATION

OWNERSHIP AND PROPERTY HISTORY

Title to the property is currently vested in the name of 452 Fifth Owners LLC, who acquired title to the property via a sale-leaseback transaction which closed in 2010 (contracted in October 2009). The price for the building was $330 million, a figure that was established at what appears to represent a low point in the investment sales market for New York City and thus it is reasonable that our current value would be higher (as evidenced by recent activity in the marketplace). In addition to the $330 million acquisition price, ownership reported $23 million in acquisition related expenses for an effective acquisition price of $353 million. 452 Fifth Owners LLC bought out a related party interest in August 2011 based on their IFRS book value, which had been established at $480 million. To the best of our knowledge, there has been no other ownership transfer of the property during the previous three years and the subject property is not currently being marketed for sale.

CBRE has appraised the subject property several times, with the most recent prior appraisal having an effective date of value of September 30, 2015 and a value conclusion of $820,000,000. The 4.27% increase in value since the date of the prior appraisal results from a combination of an improved leasing environment, lease-up of vacant space, advancement of negotiations with HSBC on their renewal and improving investment parameters (the discount rate was reduced +/- 25 Basis Points), which is partially market oriented and partially attributed to the pending HSBC renewal assumption. A summary of the material changes from the prior appraisals are presented in the following table:

VALUATION PARAMETERS SUMMARY Mar. 31, 2013 March 31, 2014 Dec. 31, 2014 Sept. 30, 2015 Sept. 30, 2016 Valuation Assumptions OAR 4.25% 4.25% 4.25% 4.25% 4.25% Discount Rate 7.00% 7.00% 6.75% 6.75% 6.50% Terminal Rate 5.25% 5.00% 5.25% 5.00% 5.00% Rent Growth 3%, 7%, 5%, 5% 5%, 5%, 5% 7%, 5%, 5% 7%, 5%, 5% 6%, 5%, 4% 3% thereafter 3% thereafter 3% thereafter 3% thereafter 3% thereafter Market Rent ($/SF/Yr.) Office - 1 West 49th Street $42.00 $45.00 $45.00 $45.00 $50.00 Office - 452 Fifth (2-11th flrs.) $60.00 $65.00 $70.00 $70.00 $75.00 Office - 452 Fifth (12-19th flrs.) $75.00 $80.00 $80.00 $80.00 $85.00 Office - 452 Fifth (20-27th flrs.) $85.00 $90.00 $90.00 $95.00 $100.00 Office - 452 Fifth (28-30th flrs.) $100.00 $105.00 $105.00 $105.00 $105.00 CBRE

HSBC BUILDING | INTRODUCTION

PREMISE OF THE APPRAISAL

The following table illustrates the various dates associated with the valuation of the subject, the valuation premise(s) and the rights appraised for each premise/date:

PREMISE OF THE APPRAISAL Item Date Interest Appraised Date of Report: November 3, 2016 Date of Inspection: October 21, 2016 Date of Fair Value/Market Value Estimate As Is : September 30, 2016 Leased Fee Interest

Compiled by CBRE

PURPOSE OF THE APPRAISAL

The purpose of this appraisal is to estimate the Fair Value/Market Value of the subject property. According to the International Financial Reporting Standards 13 set by the International Accounting Standards Board, the Fair Value is defined as follows:

“Fair Value - 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 (IFRS 13, para.9)”

The current economic definition of Market Value agreed upon by agencies that regulate federal financial institutions in the U.S. (and used herein) is as follows:

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

1. buyer and seller are typically motivated; 2. both parties are well informed or well advised, and acting in what they consider their own best interests; 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. 3

3 Office of Comptroller of the Currency (OCC), 12 CFR Part 34, Subpart C – Appraisals, 34.42 (g); Office of Thrift Supervision (OTS), 12 CFR 564.2 (g); Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002), 177-178. This is also compatible with the RTC, FDIC, FRS and NCUA definitions of market value as well as the example referenced in the Uniform Standards of Professional Appraisal Practice (USPAP).

HSBC BUILDING | INTRODUCTION

TERMS AND DEFINITIONS

The Glossary of Terms in the Addenda provides definitions for additional terms that are, and may be used in this appraisal.

INTENDED USE OF REPORT

This appraisal is to be used for financial reporting by the Client. Complete report may also be used as an addendum to company/affiliates (including holding companies of 452 Fifth Owners LLC) public filings. Use of the report is subject to the Terms and Conditions provided in the engagement letter and included in the addenda to this report.

INTENDED USER OF REPORT

The intended users of the appraisal are 452 Fifth Owners LLC and their affiliate companies (including the holding companies of 452 Fifth Owners LLC). Property and Building Corp. (“PBC”), Discount Investment Corporation Ltd. (“DIC”) and IDB Development Corp. Ltd. (“IDB”) are intended users of this report. The intended users of the report (including the holding companies and other affiliates) are subject to the Terms and Conditions as outlined in this Report. The intended users of the report (including the holding companies and other affiliates) are subject to the Terms and Conditions as outlined in the engagement letter contained in the addenda to this report. The intended use and user of our report is specifically named in our report as agreed upon in our contract for services and/or reliance language found in the report. No other use or user of the report is permitted by any other party for any other purpose. Dissemination of this report by any party to non-client, non-intended users does not extend reliance to any other party and CBRE will not be responsible for unauthorized use of the report, its conclusions or contents used partially or in its entirety.

SCOPE OF WORK

The scope of the assignment relates to the extent and manner in which research is conducted, data is gathered and analysis is applied, all based upon the following problem-identifying factors stated elsewhere in this report:

 Client  Intended use  Intended user  Type of opinion  Effective date of opinion  Relevant characteristics about the subject  Assignment conditions This appraisal of the subject has been presented in the form of a Self-Contained Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(a) of USPAP. That is, this report incorporates, to the fullest extent possible, practical explanation of the data, reasoning and analysis that were used to develop the opinion of value. This report also includes

HSBC BUILDING | INTRODUCTION thorough descriptions of the subject and the market for the property type. CBRE completed the following steps for this assignment:

Extent to Which the Property is Identified Data sources utilized in our analysis are summarized as follows:

RESOURCE VERIFICATION Site Data Source/Verification: Size Public Record - City of New York Excess/Surplus None Improved Data Source/Verification: Gross Size Public Record - City of New York / Stacking plan - client provided Net Size Client provided rentroll and stacking plan Area Breakdown Client provided rentroll and stacking plan No. Bldgs. Client/CBRE property inspection YOC Public Record - City of New York Economic Data Source/Verification: Deferred Maintenance: Client provided Building Costs: N/A Income Data: 2016 Reforecast Budget; December 2012-2015 Management Report - client provided Expense Data: 2016 Reforecast Budget; December 2012-2015 Management Report - client provided Compiled by CBRE CBRE collected the relevant information about the subject from the owner (or representatives), public records and through an inspection of the subject property. The property was legally identified through the following sources:

 postal address  assessor’s records  legal description Economic characteristics of the subject were identified via:

 Copies of leases and Abstracts  Current Rent Roll  2017 Budget, 2016 Budget Reforecast, (w/ YTD thru September), December 2012, 2013, 2014 & 2015 Management Reports – Landlord Provided Extent to Which the Property is Inspected

CBRE inspected both the interior and exterior of the subject, as well as its surrounding environs on the effective date of appraisal. Additional physical information regarding the subject was obtained from:

 NYC Department of Finance records  Excerpts from a previous Property Condition Report It should be noted that portion of the HSBC storage space located below grade within the building are secure areas and access to this portion of the premises was not available during our inspection.

HSBC BUILDING | INTRODUCTION

Type and Extent of the Data Researched

CBRE reviewed the micro and/or macro market environments with respect to physical and economic factors relevant to the valuation process. This process included interviews with regional and/or local market participants, available published data, and other various resources. CBRE also conducted regional and/or local research with respect to the following:

 applicable tax data  zoning requirements  flood zone status  demographics  income and expense data  comparable data

Type and Extent of Analysis Applied

CBRE analyzed the data gathered through the use of appropriate and accepted appraisal methodology to arrive at a probable value indication via each applicable approach to value. The steps required to complete each approach are discussed in the methodology section. CBRE then correlated and reconciled the results into a reasonable and defensible value conclusion, as defined herein. A reasonable exposure time associated with the value estimate presented has also been considered.

EXPOSURE/MARKETING TIME

Current appraisal guidelines require an estimate of a reasonable time period in which the subject could be brought to market and sold. This reasonable time frame can either be examined historically or prospectively. In a historical analysis, this is referred to as exposure time. Exposure time always precedes the date of value, with the underlying premise being the time a property would have been on the market prior to the date of value, such that it would sell at its appraised value as of the date of value. On a prospective basis, the term marketing time is most often used. The exposure/marketing time is a function of price, time, and use. It is not an isolated estimate of time alone. In consideration of these factors, we have analyzed the following:

 exposure periods for comparable sales used in this appraisal;  exposure/marketing time information from the CBRE National Investor Survey and the PWC Real Estate Investor Survey; and  the opinions of market participants. The following table presents the information derived from these sources.

HSBC BUILDING | INTRODUCTION

EXPOSURE/MARKETING TIME INFORMATION Exposure/Mktg. (Months) Investment Type Range Average Comparable Sales Data 3.0 - 9.0 6.0 PwC CBD Office National Data 2.0 - 15.0 6.8 Local Market Professionals 3.0 - 6.0 6.0 CBRE Exposure Time Estimate 6 Months Source: CBRE National Investor Survey & PwC Real Estate Investor Survey

CBRE has concluded an exposure/marketing time of 6 months to be reasonable for the subject property. This exposure/marketing time reflects current economic conditions, current real estate investment market conditions, the terms and availability of financing for real estate acquisitions, and property and market-specific factors. It assumes that the subject is (or has been) actively and professionally marketed. The marketing/exposure time would apply to all valuation premises included in this report.

HSBC BUILDING | AREA ANALYSIS

AREA ANALYSIS

The dynamic nature of economic relationships within a market area has a direct bearing on real estate values and the long-term quality of a real estate investment. In the market, the value of a property is not based on the price paid for it in the past or the cost of its creation, but on what buyers and sellers perceive it will provide in the future. Consequently, the attitude of the market toward a property within a specific neighborhood or market area reflects the probable future trend of that area.

Since real estate is an immobile asset, economic trends affecting its locational quality in relation to other competing properties within its market area will also have a direct effect on its value as an investment. To accurately reflect such influences, it is necessary to examine the past and probable future trends, which may affect the economic structure of the market and evaluate their impact on the market potential of the subject. This section of the report is designed to isolate and examine the discernible economic trends in the region and neighborhood, which influence and create value for the subject property.

Regional Area The subject property is located in Manhattan, one of the five boroughs comprising New York City.

The examination of social forces is primarily based upon demographic characteristics of an area including, but not limited to, population trends, age of population and household formation. A review of these demographic trends is imperative in order to determine the basic demand for real property in the area.

HSBC BUILDING | AREA ANALYSIS

Population

The population in New York City has increased approximately 5.1% from 2010 to 2016, as estimated by Claritas. Changes among the different boroughs varied considerably with Staten Island reflecting the lowest population increase of 1.3%, while Brooklyn’s population has increased by 6.1%. The most recent data from Claritas, Inc. is summarized as follows. The 2016 estimates and the 2021 projections are based on census data.

NEW YORK CITY POPULATION DATA 2010 2016 2010-2016 2021 2016-2021 Census Estimate %Change Projection % Change Bronx 1,385,108 1,456,268 5.1% 1,510,813 3.7% Brooklyn 2,504,700 2,657,953 6.1% 2,767,581 4.1% Manhattan 1,585,873 1,647,786 3.9% 1,693,415 2.8% Queens 2,230,722 2,351,550 5.4% 2,442,130 3.9% Staten Island 468,730 474,638 1.3% 481,752 1.5% New York City Total 8,175,133 8,588,195 5.1% 8,895,691 3.6% Source: Claritas

The population within the city is expected to increase through 2021. Over the next five years Brooklyn is anticipated to have the highest increase in population with an increase of 4.1%. The New York City Boroughs are all projected to experience moderate growth, ranging between 1.5% and 4.1% over the next 5 years. Overall, the population in New York City is projected to increase by 3.6% during the next five-year period.

Households

Household statistics calculated based on census data are summarized as follows.

NEW YORK CITY HOUSEHOLD DATA 2010 2016 2010-2016 2021 2016-2021 Census Estimate % Change Projection % Change Bronx 483,449 510,243 5.5% 530,557 4.0% Brooklyn 916,856 982,055 7.1% 1,027,436 4.6% Manhattan 763,846 797,313 4.4% 822,173 3.1% Queens 780,117 821,991 5.4% 853,779 3.9% Staten Island 165,516 167,875 1.4% 170,619 1.6% New York City Total 3,109,784 3,279,477 5.5% 3,404,564 3.8% Source: Claritas As illustrated in the previous table, the number of households in New York City has increased by 5.5% since 2010, and is expected to increase by 3.8% between 2016 and 2021. The number of households is expected to grow at the greatest rate in the Brooklyn borough over the next 5 years at a rate of 4.6%. According to Clarita’s estimates the slowest growth is expected to occur in Staten Island.

HSBC BUILDING | AREA ANALYSIS

NEW YORK CITY HOUSEHOLD MEDIAN INCOME DATA 2000 2016 2000-2016 2021 2016-2021 Census Estimate %Change Projection % Change Bronx $27,926 $33,838 21.2% $34,924 3.2% Brooklyn $32,509 $49,689 52.8% $54,618 9.9% Manhattan $47,470 $74,468 56.9% $80,428 8.0% Queens $43,182 $58,541 35.6% $62,662 7.0% Staten Island $55,637 $71,472 28.5% $74,103 3.7% Source: Claritas

Of the five boroughs of New York City, Manhattan has the highest median household income, followed by Staten Island and Queens. Over the next five-year period, the median household income within the boroughs is projected to grow within a range of 3.2% to 9.9% in the five boroughs, and Brooklyn is expected to see the highest income appreciation at 9.9%.

Transportation

Transportation has been a major factor in the development of New York City. The city has a well- integrated network of highways with a well-developed mass transportation system which facilitates access for commuters as well as the distribution of goods and services through the region. Vehicular transportation in the region and the borough is facilitated through a network of highways while the Metropolitan Transit Authority operates a rail and bus network.

Two of the area airports, LaGuardia and JFK International Airports are both located within Queens. Within Manhattan, of the two major business areas, Midtown is more convenient in terms of commuting than Downtown due to its proximity to the commuter train system. While the automobile is the primary mode of transportation surrounding New York City, primary access in Manhattan is provided by mass transportation, specifically the subway system.

The Long Island Expressway, the Grand Central Parkway, and Belt Parkway facilitate vehicular access to the area. The Triborough Bridge, Queensboro, Brooklyn Bridge, Williamsburg Bridge, Manhattan Bridge, Midtown Tunnel and Brooklyn-Battery Tunnel provide access to Manhattan.

Governmental Forces Overview

The Mayor and the City Council govern the City of New York. In addition, there is a Borough President in each borough and Councilpersons, which govern individual districts within each borough. Local city officials implement land use regulations through the auspices of the Bureau of Economic Development, Zoning Department and Department of City Planning. The local planning board with neighborhood representation must also review any proposed project. Support services, such as transportation, schools, health care, police, and fire protection are provided by the City of New York.

HSBC BUILDING | AREA ANALYSIS

Taxes

Residents of New York City are taxed on three levels, the first is the Federal Government, second is the State of New York, and the last is the City of New York, which imposes a resident income tax and property taxes for those persons who reside within the five boroughs. The combined income tax rate for persons in New York City is one of the highest in the nation and imposes a hindrance towards relocating to the city. Residential property taxes, however, are comparably low to surrounding Nassau, Suffolk and Westchester Counties. The City of New York has recently sought to re-impose the so called “commuter tax” on suburban residents who work in the City. Such a measure would require State approval and as of the date of this analysis these approvals have not been granted.

Land Use Regulations

The City Planning Department, Zoning Department and the Economic Development Authority govern land use regulations. These agencies as well as other city departments govern land use controls that include zoning, growth management systems, subdivision regulations, development fees and environmental restrictions. The net effect of these land use policies is to raise the cost of land development, especially in Manhattan.

Zoning

Zoning regulations and planning have the greatest impact on property values and development in the city. The zoning regulations within the city are the most complex in the country, increasing the cost of all residential and commercial development in the city.

Municipal Services

The City of New York provides public services such as police and fire protection, schools and other basic services.

Economic Forces With 151,678 full-time employees in 2014, the City of New York is the area’s top employer. New York Department of Education is the second largest employer in the area with 119,618 employees, and following in third is the US government. The chart below shows the New York Area’s 24 largest employers.

HSBC BUILDING | AREA ANALYSIS

NEW YORK AREA LARGEST EMPLOYERS Number of Employees in New Ranking Company Name York City* 1 City of New York (City Hall) 151,678 2 New York City Dept of Education 119,618 3 US Government 80,900 4 State of NY 69,926 5 Metropolitan Transportation Authority 67,381 6 JP Morgan Chase & Co 37,363 7 NYC Health and Hospitals 35,044 8 Mount Sinai Health System 32,056 9 Macy's Inc 31,200 10 Citigroup Inc. 24,991 11 New York-Presbyterian Hospital 21,802 12 Bank of America 19,500 13 Verizon Communications Inc. 18,650 14 Montefiore Medical Center 18,030 15 NYU Langone Medical Center 17,879 16 New York University 16,021 17 Columbia University 15,601 18 Consolidated EDISON Inc. 13,280 19 Memorial Sloan Kettering Cancer Center 12,662 20 Morgan Stanley 12,500 21 Bank of NY Mellon Corp. 9,500 22 American Airlines 9,280 23 Red Apple Group Inc. 8,500 24 United Parcel Service Inc. 8,145 * New York Area Includes NYC, Nassau, Suffolk, Westchester, Bergen, Essex, Hudson & Union Counties Source: Crain's New York Business - 2015 The following chart outlines total employment and the composition of the different employment industries in New York City between 2006 and 2015.

HSBC BUILDING | AREA ANALYSIS

ANNUAL EMPLOYMENT BY INDUSTRY NEW YORK CITY 2006-2015 (000's) Avg. Ann. Total % Industry 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Growth Change

Goods Producing 224.6 228.3 228.3 202.4 188.8 188.0 192.4 198.6 203.7 205.7 -0.8% -8.4% Construction 118.5 127.3 132.7 120.8 112.5 112.3 116.1 122.2 127.7 131.5 1.1% 11.0% Manufacturing 106.1 101.0 95.6 81.6 76.3 75.7 76.3 76.4 76.0 74.2 -3.0% -30.1%

Service Producing 3,441.8 3,515.7 3,565.7 3,491.1 3,522.7 3,610.6 3,693.0 3,782.8 3,898.5 3,997.1 1.6% 16.1% Trade, Transportation & Utilities 559.0 570.5 574.5 552.4 559.1 574.7 589.3 603.8 618.4 629.1 1.3% 12.5% Information 164.9 166.9 169.5 165.3 166.0 170.9 175.8 179.6 184.5 186.2 1.3% 12.9% Financial Activities 458.3 467.6 465.0 434.2 428.6 439.5 439.1 437.9 448.8 458.1 0.0% 0.0% Prof. & Business Services 571.9 592.3 603.5 569.4 575.8 598.3 620.4 643.6 668.9 690.2 2.1% 20.7% Educational & Health Services 693.3 703.9 718.1 734.0 752.4 769.2 786.2 813.2 846.6 877.3 2.7% 26.5% Leisure & Hospitality 284.9 297.8 310.2 308.5 322.2 342.2 365.7 385.4 406.8 421.3 16.0% 47.9% Other Services 154.3 157.7 160.8 160.3 160.6 165.2 170.4 174.9 179.5 187.1 2.1% 21.3% Government 555.2 559.0 564.1 567.0 558.0 550.6 546.1 544.4 545.0 547.8 -0.1% -1.3%

Total Employment 3,666.4 3,744.0 3,794.0 3,693.5 3,711.5 3,798.6 3,885.4 3,981.4 4,102.2 4,202.8 1.5% 14.6%

Employment Change Goods Producing -1.1% 1.6% 0.0% -11.3% -6.7% -0.4% 2.3% 3.2% 2.6% 1.0% Service Producing 2.0% 2.1% 1.4% -2.1% 0.9% 2.5% 2.3% 2.4% 3.1% 2.5% Total Employment 1.8% 2.1% 1.3% -2.6% 0.5% 2.3% 2.3% 2.5% 3.0% 2.5%

Source: US Bureau of Labor Statistics

While the table presented above indicates that annual total employment in the City of New York has varied notably since 2006, the total increase from 2006 to 2015 is 14.6%. The steady growth experienced between 2005 and 2008 was offset by the large loss of jobs resulting from the recession as total employment declined 2.6% in 2009. However, New York City has returned to stable growth in the last five years, as total employment has grown by 2.3%, 2.3%, 2.5%, 3.0% and 2.5% respectively.

New York City is predominantly a service-oriented economy, with approximately 95% of the current employment within the services producing sector. In the period between 2006 and 2015, the services producing sector experienced average annual growth of 1.6%. Although the goods producing sector, and more specifically the manufacturing sector, have declined on average on a year to year basis, the increases in the services sectors have been able to offset these declines.

The following table and chart illustrate the increase in employment for the most recently reported month, over the same month of the previous year. As indicated, total employment is showing an increase from the prior year's figures, as nine out of ten sectors increased on a year over year basis in NYC. Overall employment increased year over year by a notable 2.2%. Educational & Health Services is the largest sector in NYC, it has grown by a considerable 3.9% when compared to the same time in the previous year, and accounts for 20.3% of total employment.

HSBC BUILDING | AREA ANALYSIS

NON-AGRICULTURAL INSURED EMPLOYMENT BY MAJOR INDUSTRY DIVISION August 2015 to 2016 Comparison - Not Seasonally Adjusted NEW YORK CITY, NY Average Employment Average Employment INDUSTRY Aug 2015 (000's) SHARE Aug 2016 (000's)(P) SHARE CHANGE Construction and Mining 143.7 3.4% 148.1 3.4% 3.1% Manufacturing 78.2 1.9% 78.4 1.8% 0.3% T.T.C.P.U.* 622.3 14.8% 630.0 14.6% 1.2% Information 190.0 4.5% 197.8 4.6% 4.1% F.I.R.E.** 468.4 11.1% 466.0 10.8% -0.5% Professional & Business Services 706.9 16.8% 714.9 16.6% 1.1% Educational & Health Services 841.9 20.0% 874.4 20.3% 3.9% Leisure & Hospitality 427.3 10.1% 452.8 10.5% 6.0% Other Services 184.4 4.4% 190.1 4.4% 3.1% Government 549.5 13.0% 555.2 12.9% 1.0% TOTALS 4,212.6 100.0% 4,307.7 100.0% 2.2% * Trade,Transportation, & Public Utilities ** Finance/Insurance/Real Estate (P) Preliminary data Source: U.S. Bureau of Labor Statistics: Compiled by CBRE, Inc.

Unemployment rate The following table and chart details the historical unemployment rate in the New York metro area, New York State as a whole, and the nation as a whole.

UNEMPLOYMENT 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Aug-15 Aug-16 New York City 5.0% 5.0% 5.6% 9.3% 9.5% 9.1% 9.4% 8.8% 7.2% 5.7% 5.3% 5.7% New York 4.5% 4.6% 5.4% 8.3% 8.6% 8.3% 8.5% 7.7% 6.3% 5.3% 5.0% 4.9% US 4.6% 4.6% 5.8% 9.3% 9.6% 8.9% 8.1% 7.4% 6.2% 5.3% 5.2% 5.0% Aug-16 City Percentage is preliminary Source: Bureau of Labor Statistics; Compiled by CBRE

HSBC BUILDING | AREA ANALYSIS

The most recent data shows that the preliminary unemployment rate in New York City was 5.7% in August 2016, which represents a increase of 40 basis points on a year-over-year basis. New jobs in the professional and business services, transportation & utilities, and educational & health services sectors drove the city’s growth last year. Nonetheless, historically, the unemployment rate in New York City has been greater than that of overall New York and has remained greater than both the state and the US post-recession. Even with recent economic growth the unemployment rate in the city remains somewhat inflated. This is due in part because the unemployment rate reflects the jobs held by New York City residents, while the job data portrayed in the previous section reflects jobs located within the city itself, many of which are held by non-New York City residents. However, the gap between city unemployment and that of overall New York State and US unemployment has closed in 2015. In August 2016 the city unemployment rate is 80 basis points greater than overall New York State and 70 basis points greater than the overall US. With continued growth, we project that the City of New York will remain a financial and cultural center for the country and the world.

MOODY’S ANALYTICS Moody’s Economy.com provides the following New York-Jersey City-White Plains, NY-NJ metro area economic summary as of Sep-16. The full Moody’s Economy.com report is presented in the Addenda.

HSBC BUILDING | AREA ANALYSIS

NEW YORK-JERSEY CITY-WHITE PLAINS, NY-NJ - ECONOMIC INDICATORS Indicators 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Gross Metro Product (C$B) 908.2 915.5 944.8 946.6 965.8 985.3 1,000.4 1,021.6 1,041.3 1,056.3 1,069.0 1,085.7 % Change 4.0 0.8 3.2 0.2 2.0 2.0 1.5 2.1 1.9 1.4 1.2 1.6 Total Employment (Ths) 6,042.4 6,141.2 6,248.2 6,369.1 6,534.5 6,701.3 6,831.1 6,900.8 6,961.6 7,024.4 7,053.6 7,068.6 % Change 0.1 1.6 1.7 1.9 2.6 2.6 1.9 1.0 0.9 0.9 0.4 0.2 Unemployment Rate (%) 9.2 8.8 8.9 8.1 6.7 5.4 4.8 4.9 5.0 5.1 5.4 5.8 Personal Income Growth (%) 4.2 5.7 4.1 0.8 4.5 5.3 4.3 4.4 4.6 4.3 3.7 3.5 Median Household Income ($ Ths) 58.3 58.0 58.8 59.8 61.3 63.5 65.3 67.2 69.4 71.5 73.3 75.1

Population (Ths) 13,894.0 14,027.2 14,135.0 14,241.1 14,331.5 14,413.1 14,482.6 14,547.8 14,612.9 14,677.8 14,741.2 14,805.0 % Change 0.7 1.0 0.8 0.8 0.6 0.6 0.5 0.5 0.4 0.4 0.4 0.4 Net Migration (000) 11.4 37.7 14.7 27.2 0.0 7.2 -18.9 -24.6 -25.9 -27.1 -29.1 -28.9

Single-Family Permits 4,161.0 3,738.0 4,238.0 6,447.0 7,270.0 6,823.0 6,884.5 9,549.4 10,893.9 10,708.5 10,327.2 10,611.2

Multifamily Permits 10,577.0 13,999.0 17,115.0 25,857.0 30,011.0 67,017.0 22,389.2 26,127.9 27,409.1 24,998.7 23,706.9 23,750.9 Fhfa House Price (1995Q1=100) 228.4 221.3 216.8 219.4 226.7 236.1 244.8 254.8 261.1 264.2 269.3 277.2 Source: Moody's Economy.com

Recent Performance

With two of its key catalysts slumping, New York City-Jersey City-White Plains is no longer growing at a breakneck pace. Gains in construction have ground to a halt, and financial services are again moving in the wrong direction. The unemployment rate has settled in at just above 5%, not much different from a year ago, but labor force participation has plummeted in 2016. On the bright side, hospitals are still hiring at a robust clip, and employment in leisure/hospitality has picked up. The jump in the latter, however, is tilting hiring back toward low-wage industries, putting downward pressure on income. The housing market, meanwhile, has slowed, with permits and prices slumping.

Builders The construction slowdown will persist into early 2017 as the residential and commercial markets rebalance. High-end home sales are sharply lower and price appreciation has slowed, according to the Case-Shiller condominium index. A spike in permits last year in anticipation of the state's 421-A tax break expiring, combined with reduced international demand, has put a crimp in permit issuance. This is most pronounced in Manhattan, where permits hit a six-year low in the first half of 2016.

Making matters worse, the office market may no longer be a reliable backstop. Midtown office vacancy rates have ticked higher, with landlords increasingly relying on concessions. The recent building boom combined with weakness in financial services and softer tech investment means that both supply and demand are concerns.

Banks Hiring on Wall Street will rebound from a recent rough patch, but obstacles remain. After a solid multiyear run, securities employment has slumped for more than a year. Industry output is also

HSBC BUILDING | AREA ANALYSIS trailing off in NEY, a sign that cuts include high-value-added jobs. Increased volatility, most recently brought on by the U.K.'s vote to leave the European Union, is weighing on bottom lines. Bank of America's profits are down sharply, and Goldman Sachs has initiated a series of small- scale layoffs. There is some upside risk, however, should the U.K. exit cause capital and jobs to flow out of London and into NEY.

Tourism Leisure/hospitality will no longer be able to outrun a strong dollar and weakness abroad. So far, international tourist visits are holding firm despite weak fundamentals, and improved U.S. income growth is attracting more domestic visitors. However, there are increasing signs of trouble. Revenue per available hotel room is falling according to travel research firm STR, and the Broadway League reports a sharp decline in ticket revenue. All told, leisure/hospitality will soon become a short-term liability.

Upside Even as growth slows, there are reasons to believe that expectations could be exceeded. Although builders face weaker fundamentals, numerous infrastructure projects are under way or in the pipeline. Major renovations at LaGuardia Airport and the Port Authority Bus Terminal will give construction a lift and promote long-term competitiveness. Meanwhile, demographics will remain an advantage over the state and region. This has kept housing demand afloat, especially in the Bronx. Strong population gains will also bolster "eds and meds" despite financial troubles plaguing city-run hospitals. Finally, high-tech employment is getting back on track, indicating that Silicon Alley will remain a magnet for high-wage jobs and young people.

Moody’s Analytics Conclusion

New York City-Jersey City-White Plains will settle into a more sustainable growth path in the near term. Numerous drivers, including real estate and finance, will prove less potent, and consumption will disappoint as tourism slows. Longer term, solid demographics are an advantage, but a mature economy and stressed infrastructure will hold back growth.

CONCLUSION Market participants forecast positive economic growth throughout most of the New York City marketplace. They typically cite the resurgence in the technology sector of the marketplace as well as New York City maintaining its status as the dominant financial services center in the World. Further, the city is considered to be the cultural center of the country, with some of the top schools, museums, theaters, and music and entertainment venues in the country. These factors help attract residents and businesses from around the World and support the demographic and economic growth presented elsewhere in this analysis. Going forward, we anticipate moderate

HSBC BUILDING | AREA ANALYSIS economic improvement over the near term, with a more robust long term forecast as new development and infrastructure upgrades continue to drive demand across most segments.

HSBC BUILDING | NEIGHBORHOOD ANALYSIS

NEIGHBORHOOD ANALYSIS

The subject property is located in the southern portion of Midtown, Manhattan generally defined as being bound by 59th Street to the north, Third Avenue to the east, 34th Street to the south, and Seventh Avenue and Broadway to the west. This area is densely improved with commercial office buildings and ancillary uses such as hotels and numerous service establishments located at grade along both avenues and side streets. Residential uses typically involve modern mixed use buildings situated to the south and east of the subject property. The subject property is situated in the southeast portion of Midtown within the Grand Central submarket.

The Grand Central neighborhood is roughly bounded by Fifth Avenue to the west, First Avenue to the east, 46th Street to the north and 35th Street to the south. A map of the subject neighborhood is presented below:

LAND USES

The subject property is located within the Grand Central submarket. This area is characterized by a mix of office buildings, ground floor retail, restaurants and hotels, which benefit from the neighborhoods proximity to Grand Central Station. A number of the office buildings in this neighborhood are older, prestigious buildings such as the Chrysler building and the Empire State Building. The subject is located immediately to the south of the New York Public Library and Bryant Park, an area that forms the boundary between the Class A properties to the north and the Class B properties to the south.

HSBC BUILDING | NEIGHBORHOOD ANALYSIS

The subject property is considered to have a good accessibility as it is situated a few blocks south of Grand Central Station. Overall, this area is primarily improved with multi-tenanted office buildings and hotel properties, although there is a significant amount of residential development in the area surrounding the subject. The New York Public Library is located along Fifth Avenue between 41st and 42nd Street. This is the largest public library in Manhattan. Extensive renovations and capital have been invested into the restoration of Bryant Park, which is located behind the library abutting Avenue of the Americas. The subject property is situated between the full block occupied by the Park/Library to the north and Lord and Taylor’s flagship store on the full block front of Fifth Avenue between 38th and 39th Streets.

Buildings along Fifth Avenue in the subject's immediate vicinity consist primarily of mid- to high- rise Class B office structures, while the side-streets primarily consist of low-rise commercial loft buildings and residential uses. The bulk of the retail uses are situated within the grade level of the office buildings although there are several large retailers such as the aforementioned Lord & Taylor and Macys flagship Herald Square store to the south. It should be noted that the subject neighborhood has some of the newest development in the marketplace, with the under construction 7 Bryant Park and the planned One Vanderbilt both within close proximity to the subject.

The subject neighborhood is part of Community District Five as defined by the City of New York. A summary of the land uses within Community District Five is presented below:

HSBC BUILDING | NEIGHBORHOOD ANALYSIS

ACCESS

The subject property is considered to have good accessibility as it is situated close to 42nd Street station (at 6 Sixth Ave.) of the B, D, F and Q trains as well as number 7 shuttle train one block north of the subject at 5th Avenue and 42nd Street. In addition, the subject is also located in close proximity to Grand Central Station and the 4, 5 and 6 lines. The 6 train is a local on the Lexington Avenue line which operates between Pelham Bay Park in the Bronx and City Hall in downtown Manhattan. Grand Central also provides access to the 4 and 5 trains which also run on the Lexington line (Park Avenue, south of 42nd Street). The 4 train operates between Woodlawn in the Bronx and New Lots Avenue in Brooklyn. The 7 is a local train on the Flushing line which has only two other stops in Manhattan along 42nd Street: Fifth Avenue and Times Square.

Commuter rail stations are situated at Seventh Avenue and West 32nd Street (Pennsylvania Station) and Park Avenue and West 42nd Street (Grand Central Terminal). These commuter lines serve New Jersey and Long Island via Penn Station and Westchester and Putnam Counties in New York, and Western Connecticut via Grand Central. Penn Station also has long distance rail service and is a major stop on Amtrak's Northeast Corridor service, between Boston and Washington.

CONCLUSION AND RELEVANCE TO THE SUBJECT PROPERTY

The subject neighborhood is defined by its presence within the Grand Central Submarket with its Bryant Park views to the north and Empire State Building views to the south making it a desirable property within Midtown Manhattan. This area is improved primarily with high-rise commercial office buildings although it is has significant ancillary uses such as mixed commercial/residential buildings and hotels. The neighborhood benefits from its accessibility and its conformity of use, allowing like and/or mutually beneficial businesses to locate near one another. Although the subject is located to the south of 42nd Street, the traditional boundary of Midtown’s core, the adjacent Library/Park areas and Lord & Taylor store help to anchor this property and help it perform at levels more in line with core Midtown properties. In addition, the perceived southern boundary of Midtown has shifted further south, with new development such as 7 Bryant Park attracting top tier tenants to the area. Overall the subject neighborhood is considered to be stable, well located and well positioned to remain one of the more prominent office neighborhoods within Manhattan.

HSBC BUILDING | SITE ANALYSIS

SITE ANALYSIS

The subject is situated along the western block front of Fifth Avenue between West 39th Street and West 40th Street in Midtown Manhattan. The property includes two separate but interconnected buildings, with 452 Fifth Avenue occupying the 32,834 square foot parcel designated as Block 841, Lot 49, while 1 West 39th Street totals 11,521 square feet and is known as Block 841, Lot 31. The following chart summarizes the salient characteristics of the subject site.

SITE SUMMARY

Site Area 1.02 Acres 44,356 Sq. Ft. Primary Road Frontage Fifth Avenue 197.5 Feet Secondary Road Frontage West 40th Street 147.5 Feet Secondary Road Frontage West 39th Street 301.7 Feet Excess/Surplus Land Area None Zoning District C5-3 & M1-6 Flood Map Panel Number 360497 0039B Flood Zone Zone C

Source: Various sources compiled by CBRE

A map illustrating the layout of the subject property is shown below:

HSBC BUILDING | SITE ANALYSIS

LAND AREA

The land area size was obtained from public records (City of New York). The site is considered adequate in terms of size and utility. There is no unusable, excess or surplus land area.

SHAPE AND FRONTAGE

The site is generally irregular in shape and has adequate frontage along a primary thoroughfare and two secondary roadways within the neighborhood.

INGRESS/EGRESS

Please refer to the prior site exhibit for the layout of the streets that provide access to the subject.

TOPOGRAPHY AND DRAINAGE

The site is generally level and at street grade. The topography of the site is not seen as an impediment to the development of the property. During our inspection of the site, we observed no drainage problems and assume that none exist.

SOILS

A soils analysis for the site has not been provided for the preparation of this appraisal. In the absence of a soils report, it is a specific assumption that the site has adequate soils to support the highest and best use.

EASEMENTS AND ENCROACHMENTS

There are no known easements or encroachments impacting the site that are considered to affect the marketability or highest and best use. It is recommended that the client/reader obtain a current title policy outlining all easements and encroachments on the property, if any, prior to making a business decision.

COVENANTS, CONDITIONS AND RESTRICTIONS

There are no known covenants, conditions or restrictions impacting the site that are considered to affect the marketability or highest and best use. It is recommended that the client/reader obtain a copy of the current covenants, conditions and restrictions, if any, prior to making a business decision.

UTILITIES AND SERVICES

The site is within the jurisdiction of the City of New York and is provided all municipal services, including police, fire and refuse garbage collection. All utilities are available in adequate quantity at the subject property.

HSBC BUILDING | SITE ANALYSIS

FLOOD ZONE

According to flood hazard maps published by the Federal Emergency Management Agency (FEMA), the site is within Zone C, as indicated on Community Map Panel No. 360497 0088F.

FEMA defines the flood zone(s) as follows:

Zones C and X (unshaded) are flood insurance rate zones used for areas outside the 0.2-percent-annual-chance floodplain. No Base Flood Elevations (BFEs) or depths are shown in this zone, and insurance purchase is not required.

ENVIRONMENTAL ISSUES

CBRE is not qualified to detect the existence of potentially hazardous material or underground storage tanks which may be present on or near the site. The existence of hazardous materials or underground storage tanks may affect the value of the property. For this appraisal, CBRE has specifically assumed that the property is not affected by any hazardous materials that may be present on or near the property.

HSBC BUILDING | SITE ANALYSIS

ADJACENT PROPERTIES

The adjacent land uses are summarized as follows:

North: West 40th Street (followed by NY Public Library/Bryant Park) South: West 39th Street (followed by Lord & Taylor flagship store) East: Fifth Avenue (followed by Mid Manhattan Library/Office) West: Mid-rise residential/commercial loft properties

CONCLUSION

The site is well located in a good quality Fifth Avenue location. Although it is located to the south of 42nd Street, the traditional boundary of Midtown’s core, the adjacent Library/Park areas and Lord & Taylor store help to anchor this property and help it perform at levels more in line with core Midtown properties. The size of the site is typical for the area and use, and there are no known detrimental uses in the immediate vicinity. Overall, there are no known factors which are considered to prevent the site from development to its highest and best use, as if vacant, or adverse to the existing use of the site.

HSBC BUILDING | IMPROVEMENT ANALYSIS

IMPROVEMENT ANALYSIS

An updated stacking plan illustrating the layout of the subject property is presented below:

Floor LXD Varadero Capital Triangle 30 Jan-26 Stormharbour Securities 29 Jan-26 Tilden Park Capital Management 28 Sep-24

27 Jul-22 Man Investment Holdings Inc. 26 Jul-22

25 Jul-22 NCH Capital, Inc. 24 Dec-27 VTB Capital Inc. 23 Sep-22 KLS Diversified Assett Management LLP 22 Dec-22 Wood MacKenzie Tripointe BMO 21 Dec-17

20 Jan-28

19 Jan-28

18 Jan-28 Baker & McKenzie LLP 17 Jan-28

16 Jan-28

15 Jan-28

14 Jan-28 R.W. Pressprich & Co 12 Jan-23 HSBC Bank USA 11 Apr-20 HSBC Bank USA 10 Apr-20 HSBC Bank USA 9 Apr-20 HSBC Bank USA 8 Apr-20 HSBC Bank USA 7 Apr-20 HSBC Bank USA 6 Apr-20 HSBC Bank USA 5 Apr-20 HSBC Bank USA 4 Apr-20 HSBC Bank USA 3 Apr-20 HSBC Bank USA 2 Apr-20

HSBC BUILDING | IMPROVEMENT ANALYSIS

IMPROVEMENT SUMMARY Property Type Office (Multi Tenant) Number of Buildings 2 Number of Stories 12 & 30 Year Built 1902-1984 Renovated: 0 Gross Building Area 788,773 SF Net Rentable Area 865,339 SF Area Breakdown by Market Rent Categories Retail & Storage 97,713 SF Office 1W39th 139,203 SF Office 452 5th (2-11) 338,708 SF Office 452 5th (12-19) 111,872 SF Office 452 5th (20-27) 130,715 SF Office 452 5th (28-30) 47,128 SF Floor Area Ratio (FAR) 17.78 Parking Improvements None

Component NRA (SF) % of Total Combined Office Total 767,626 88.7% Combined Retail & Storage Total 97,713 11.3% 452 Fifth & 1 West 39th Street Totals 865,339 100.0%

452 Fifth Avenue Office 628,423 87.2% 452 Fifth Ave Retail Grade/Cellar 50,987 7.1% 452 Fifth Ave Stge/Cellar% of Total NRA 41,535 5.8% 452 Fifth Avenue Totals 83.3% 720,945 100.0%

1 West 39th Street Office 139,203 96.4% 1 West 39th St. Storage% of Total NRA 5,191 3.6% 1 West 39th Street Totals 16.7% 144,394 100.0%

Source: Various sources compiled by CBRE

Building plans and specifications were not provided for the preparation of this appraisal. CBRE did not physically measure the improvements. Pertinent facts regarding the building’s size are shown below.

 The gross building area represents the above grade building area as reported by property management in the provided REBNY floor breakdown summary.

 The net rentable area includes a REBNY loss factor of up to 27% on full floor spaces and is included based on the rentroll reported by property management as well as the terms included in the HSBC lease documents.

 It should be noted that management has eliminated the 13th floor designation and thus floors 13 to 29 shown below correspond with floors 14 to 30 on the stacking plan/rent roll.

HSBC BUILDING | IMPROVEMENT ANALYSIS

The following is a description of the subject improvements and basic construction features derived from CBRE’s inspection of the property.

YEAR BUILT

The subject property was originally four separate buildings known as the Knox Building (built 1902), One West 39th Street (built 1923), The Kress Building (built 1935) and the Tower (built 1984). The buildings were conjoined during the construction of the Tower in 1984 and now function as two interconnected, but separate buildings, known as 452 Fifth Avenue and One West 39th Street. 452 Fifth Avenue is a 30-story (no 13th floor), 720,945 square foot office building, while the attached One West 39th Street is a 12-story, 144,394 square foot office building.

FOUNDATION

The foundation is assumed to be of adequate load-bearing capacity to support the improvements.

CONSTRUCTION COMPONENTS

The construction components are assumed to be in working condition and adequate for the building.

FLOOR STRUCTURE

The floor structure is summarized as follows:

Ground Floor: Concrete slab on reinforced concrete footing on bedrock

Other Floors: Metal deck with light-weight concrete cover

EXTERIOR WALLS

The exterior wall structure of the tower is aluminum and glass curtain walls. The remaining building area feature masonry facades, with some areas of the exterior landmarked. The exterior façade was in good condition as of our inspection, although a portion of the capital budget was devoted to maintaining the historic façade on the 40th Street portion of the building. A photograph illustrating this component of the subject property in relation to the tower component constructed above it is presented below:

HSBC BUILDING | IMPROVEMENT ANALYSIS

ROOF COVER

A new roof was installed in 2013 and is reported and observed to be in good condition as of the date of our inspection.

INTERIOR FINISHES - OFFICE AREAS

The interior office finish of the property is summarized as follows:

Floor Coverings: Commercial grade short loop carpeting over concrete.

Walls: Textured and painted sheetrock, with many areas feature full walls of glass to allow the view and natural light to carry throughout the space.

HSBC BUILDING | IMPROVEMENT ANALYSIS

Ceilings: Suspended acoustical tile.

Lighting: Energy efficient LEDs, standard commercial florescent fixtures, and sconce lighting as appropriate.

Summary: The interior office areas that are currently leased to HSBC are in average to good overall condition. All previously vacant spaces have been demolished and underwent renovation and are typically built to a high standard.

INTERIOR FINISHES – COMMON AREAS

The subject property was previously outfitted for single tenant occupancy and as part of the ongoing capital budget, the lobby was retrofit and improved to accommodate other tenants, with dedicated areas for servicing the HSBC floors. A photo of the as renovated lobby is shown below:

ELEVATORS

Eight banks of elevators service 452 Fifth Avenue. Additionally, there are two escalators from the lower bank branch to the 1st floor premiere bank. There are twenty-one passenger cars and four freight service cars. All cars are automatic with the exception of one manually operated freight service

HSBC BUILDING | IMPROVEMENT ANALYSIS car. The low rise, high rise and VIP cars have been upgraded with new finishes to match the recently renovated main lobby. The high rise cars and the VIP cars have undergone a complete modernization process. The high rise car motor room has been raised to allow all five high rise cars to service floors 12 to 30. A modern destination dispatch system has been integrated into the high rise elevator controls. This new system uses computer control to monitor cab locations and maximize efficiency. The tower is serviced by one freight car that reached the 28th floor and a new shuttle freight car that services floors 28 to 30. One West 39th Street contains two passenger cars and two freight cars. These cars service floor 1 through 12. One of the freight cars also services the cellar level.

HVAC

The HVAC system is assumed to be in good working order and adequate for the building. There is a base building air handling unit dedicated to each floor. This air handling unit provides cooling and fresh air to the tenant spaces. The Air handling units have been retrofitted with new high efficiency motors and variable frequency drives. The cooling is provided by a mechanical plant on the 9th floor. The plant chiller plant was upgraded in 2006 to include two new 800 ton chillers. These new chillers use the environmentally friendly refrigerant R-134a. One of the existing 700 ton chillers has been retained as a backup. The plant is designed to have only two of the three chillers active. There are 4 Marley cooling towers on the roof of 1W39th Street. These cells support the chiller plant and the 1W39th St DX units. Each tower has a 1000 ton capacity. Redundancy has been built into the design. Three condenser water pumps are connected by a header. As part of recent renovations, a new 3 cell tower has been installed. This new tower is designed to support tenant condenser water needs. These new cells have been installed on the 452 Fifth Avenue roof. The total tower capacity is 750 tons. Redundancy has also been included in the system design. The condenser water, for this new tenant system, is fed to floors 12 to 30 via new 10” condenser water risers. The towers and two new condenser water pumps are all on emergency power.

Heating within the building is achieved by using Con Edison supplied steam. The steam is used directly in perimeter radiation. It is also used indirectly in steam to hot water heat exchangers. The hot water is distributed to perimeter heating. The heating system is on emergency power.

The building management system has been upgraded to an Automatic Logic Control system. All of the buildings systems are monitored via this new system. This includes the new tenant electric sub meters.

ELECTRICAL

452 Fifth Avenue: The building is supplied by Con Edison with three 277/480v, 3-phase, and 4-wire services. The service enters the building on West 39th Street through the Network Vaults to three main switchboards. Each switchboard has new power quality meters connected to the buildings management system. In 2011, electric sub meters were installed to monitor all tenant electrical usage. Switch board A feeds the main buss duct. The bus duct runs from the 3rd floor to the 29th floor.

HSBC BUILDING | IMPROVEMENT ANALYSIS

Switch board B feeds the retail spaces and the buildings mechanical loads from 3rd to the 30th floor. Switch board C supplies power from the cellar level to SC3. The buildings life safety systems are supported by 3 generators. These generators also support HSBC’s critical banking loads. The critical loads include the One West 39th Street data centers and the 452 Fifth Avenue trading floors. A new 1750kva generator has been installed to support the tower tenant’s critical loads.

One West 39th Street: Con Edison supplies One West 39th Street with two switch 120/208-volts, 3- phase, 4-wire service. The service enters the building in the cellar level and makes its way to the second floor distribution room via a cement encased buss duct. There are various disconnect switches in this room that feed the floors. The three data center floors have a separate power feed from Con Edison. This 208 volt service is then stepped up to 480 volts through a 1,500 Kw transformer. From there, the power goes to two UPS rooms that are adjacent to the main room. The UPS consists of four redundant 400 KVA modules and two system control cabinets. There are two separate risers that go to the ninth floor where there are two distribution boards. Power is distributed to the three upper floors from this point. The overall capacity is 12.5 watts per square foot based on a utility company limit of 6,100 KVA on the 480-volt service and a design limit of 10,000 amperes on the 208-volt service. There is substantial diversity in the systems and the building is approved for additional service if desired. There are also four generators for standby emergency power at the building.

In 2011, sub-meters were installed for the HSBC space within both buildings.

PLUMBING

The plumbing system is assumed to be in good working order and adequate for the building. All of the tower restrooms and many of the HSBC restrooms have been remodeled according to ADA code.

FIRE PROTECTION

It is assumed the improvements have adequate fire alarm systems, fire exits, fire extinguishers, fire escapes and/or other fire protection measures to meet local fire marshal requirements. CBRE is not qualified to determine adequate levels of safety & fire protection, whereby it is recommended that the client/reader review available permits, etc. prior to making a business decision.

QUALITY AND STRUCTURAL CONDITION

The overall quality of the facility is considered to be good for the neighborhood and age. However, CBRE is not qualified to determine structural integrity and it is recommended that the client/reader retain the services of a qualified, independent engineer or contractor to determine the structural integrity of the improvements prior to making a business decision.

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FUNCTIONAL UTILITY

The overall layout of the property is considered generally functional in utility, although the split design with two conjoined floors makes it more likely that future leasing would divide these buildings. This building has medium and large floor plates that accommodate the needs of a wide range of tenants. Sample grade level, low-rise and high-rise floor plans for 452 Fifth Avenue are shown below:

HSBC BUILDING | IMPROVEMENT ANALYSIS

A summary of a typical floor plan from 1 West 39th Street is shown below:

HSBC BUILDING | IMPROVEMENT ANALYSIS

ADA COMPLIANCE

All common areas of the property appear to have handicap accessibility. The client/reader’s attention is directed to the specific limiting conditions regarding ADA compliance.

FURNITURE, FIXTURES AND EQUIPMENT

Any personal property items contained in the property are not considered to contribute significantly to the overall value of the real estate.

ENVIRONMENTAL ISSUES

CBRE is not qualified to detect the existence of any potentially hazardous materials such as lead paint, asbestos, urea formaldehyde foam insulation, or other potentially hazardous construction materials on or in the improvements. The existence of such substances may affect the value of the property. For the purpose of this assignment, we have specifically assumed that any hazardous materials that would cause a loss in value do not affect the subject.

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DEFERRED MAINTENANCE

No material items of deferred maintenance were noted during our inspection. Property management has completed a $45 million capital improvement plan and has a capital budget of $10,348,832 in the 2017 Budget that has been included in our analysis.

ECONOMIC AGE AND LIFE

CBRE’s estimate of the subject improvements effective age and remaining economic life is depicted in the following chart:

ECONOMIC AGE AND LIFE Actual Age 26-108 Years Effective Age 14 Years MVS Expected Life 55 Years Remaining Economic Life 41 Years Accrued Physical Incurable Depreciation 25.5% Compiled by CBRE

The overall life expectancy is based upon our on-site observations and a comparative analysis of typical life expectancies reported for buildings of similar construction as published by Marshall and Swift, LLC, in the Marshall Valuation Service cost guide. While CBRE did not observe anything to suggest a different economic life, a capital improvement program could extend the life expectancy.

CONCLUSION

The improvements are in average (1 W 39th) and very good (452 Fifth Avenue) overall condition and will be in better condition as the renovations continue and tenant floors are constructed. The layout of the improvements with the two conjoined buildings diminishes the utility of the combined floor plate, although the expected continued occupancy of these floors mitigates much of the exposure. Overall, there are no known factors that adversely impact the marketability of the improvements.

HSBC BUILDING | MARKET ANALYSIS

OFFICE MARKET ANALYSIS

NATIONAL OFFICE MARKET OVERVIEW The following section is from a national overview analysis conducted by CBRE Econometric Advisors and information was extracted from the office market view for the second quarter of 2016.

The vacancy rate for CBRE EA’s Office Sum of Markets decreased in Q2 2016, due to robust demand in suburban submarkets. The rate dropped to 13.0%, declining 50 bps, year over year. Vacancy is at its lowest point since 2008, and has now seen 25 consecutive quarters without increase. The majority of markets recorded decline or no change in vacancy.

Across the Sum of Markets, 11.5 million sq. ft. was absorbed on net during the quarter—3.6 million sq. ft. more than the previous quarter, but less than the record-breaking Q2 2015 figure of nearly 21 million sq. ft. Multi-tenant completions reached almost 7.5 million sq. ft., which is on par with same period last year but 2.5 million sq. ft. lower than last quarter. Single-tenant completions were 3.7 million sq. ft., twice the number of last quarter and on par with Q2 2015.

The recovery period that followed the last recession saw a fairly limited volume of new office supply produced, in spite of a gradual but uneven rise in office demand. For many markets, the primary means of accommodating the new demand has been vacancy reduction in existing buildings. The second quarter was no exception, with net absorption having exceeded multi-tenant completions. Over the past four quarters, multi-tenant completions have averaged around 10 million sq. ft. per

HSBC BUILDING | MARKET ANALYSIS quarter—down significantly from 2008’s quarterly average of around 19 million sq. ft. Over 2004- 2009, office supply additions totaled around 380 million sq. ft.; over 2011-2016, that was down to 220 million sq. ft. (including projected figures). At the current pace, it would be four more years before we reached the volume that, during the previous cycle, we achieved within six years. As today’s measured increases in office supply remain well below the pace of the previous construction boom, they are unlikely to cause supply-induced decline in the office market at the national level.

ECONOMIC DEVELOPMENTS In the second quarter, U.S. GDP expanded at an annual pace of 1.4%. With Q1 having registered 0.8%, it will be hard for the economy to reach 2.4% annual growth in 2016—the rate achieved in 2014 and 2015. The Q2 result validated our cautious baseline outlook and reduction to projected employment growth.

There are couple of reasons for the slowing pace of growth. One of them is that the U.S. economy is getting very close to full employment. When the economy runs at full employment there is no reserve army of unemployed workers who can be hired and add to economic output. Another reason is weak productivity growth. Increase in workers’ productivity can boost economic output without a need to hire more labor, but over the past ten years, productivity change has been at its lowest the since mid- 1970s. Well-known economists have outlined many ways to combat such trends—including raising spending on basic research and education, reducing barriers to the movement of capital and labor, and increasing the rate of population growth—but most of them involve long-run public policy changes and cannot boost GDP growth in the short run. This leads us to the conclusion that the economy will continue to grow at a modest rate through the near future, unless self-driving electric vehicles and commercial drones penetrate our day-to-day life soon.

Since the beginning of the year, equity markets around the globe have recovered and the risk of recession has subsided. With no imminent threat to the global economy, one might wonder whether the U.S. economy is at risk, from conditions similar to those that led to previous recessions—namely, whether any sectors of economy are overheated and getting ready to burst. Commercial real estate has been pointed to as the probable source of the next bubble, due to a construction boom. However, outside of several markets like Houston, where the energy boom has created a substantial volume of office supply, we haven’t seen elevated levels of new construction. Nationally, the office construction volume is much lower than it was during the last two economic cycles.

Inflation-adjusted rents are also below their 2000 and 2008 peaks in a majority of markets. If commercial real estate is to face rent declines caused by oversupply, it will be limited to certain markets and property types. Such areas of oversupply are too localized to cause disruption in the U.S. economy; in most cases, higher-than-average volumes of new supply have been supported by increases in demand as well.

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OFFICE DEMAND Office-using jobs—the primary demand driver for office space—continued to grow in Q2 2016; the quarter saw nearly 110,000 new jobs added, for growth of 0.61% from the prior quarter. The four- quarter total for new office-using jobs was 375,000, representing annual growth of 2.11%. A regionally diverse group of markets led in annual growth; Nashville grew by 5.3%, Detroit by 4.8% and Phoenix by 4.7%; following these were the Bay Area markets (San Francisco: 4.6%, San Jose: 4.4%), Raleigh (3.9%) and Seattle (???). Right now, we see two trends. One is the continued growth of office employment of Sunbelt cities, with firms and workers migrating to the South, attracted by lower costs of living and doing business. The second is the rise of tech markets, with rapid growth in highly skilled tech jobs—typical for a technology-driven economic cycle. While there is no clear sign of the end of current expansion, a careful approach in evaluating growth projections in technology markets is needed.

Looking at the quarter’s leasing transactions, the technology sector maintained its Q1 lead, with 20% of the total square footage transacted. Financial services leasing increased, reaching 13.1 %. Business services continued to recover, taking 12.6% of total leasing activity—up from its 10.3% of 2014. Healthcare and life sciences’ share dropped to 9.8% from its 12.2% of 2015. Insurance activity picked up to a 6.9% share, from its 2014 share of 4.4%. The creative industry was stable at 6%, while legal services increased slightly to 6.4%. The energy sector continued to contract, with its transaction share shrinking to 1.5% from 2014’s 3.4%. Government leasing, at 5.6%, was down slightly from its 2014 share of 5.8%.

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In Q2 2016, net absorption was 11.5 million sq. ft.—46% higher than last quarter, but 45% lower than a year earlier. Despite the annual drop, the expansion of demand for office space continued during the quarter. Fifty of the 63 markets tracked by CBRE EA reported positive net absorption in Q2. In 30 markets, net absorption exceeded 150,000 sq. ft. The nationwide ranking was topped by New York with 1.3 million sq. ft.. Chicago followed with 960,000 sq. ft., and Phoenix was third, with 950,000 sq. ft. San Francisco absorbed 930,000 and Washington, D.C., 850,000 sq. ft.

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Across the suburban Sum of Markets, net absorption reached 10 million sq. ft. in Q2 2016—3 million sq. ft. less than in Q2 2015. With net absorption of 1.5 million sq. ft., downtown submarkets were 6.3 million sq. ft. below Q2 2015’s record-breaking figure. The largest contributor to downtown net absorption was New York with 1.2 million sq. ft., followed by Chicago and Seattle with more than 500,000 sq. ft. each. Suburban net absorption was boosted by Phoenix, San Francisco, Washington D.C., and Los Angeles; each absorbed more than 800,000 sq. ft.

With the completions volume relatively stable, strong net absorption figures helped suburban vacancy to drop 20 bps, to 14.4%. Downtown vacancy rose by 10 bps, to 10.5%, due to muted demand and an increase in supply. In both downtowns and suburbs, vacancy rates have returned to levels seen in the wake of the Great Recession in 2008, but they are still 50-70 bps higher than rates recorded in 2007.

OFFICE SUPPLY Downtown multi-tenant completions for the Sum of Markets reached 2.6 million sq. ft. in Q2 2016, exceeding both last quarter and the Q2 2015 level by more than 1 million sq. ft. New York, Cincinnati, Seattle and Austin together accounted for 2.5 million sq. ft. Meanwhile, suburban multi- tenant completions of 4.9 million sq. ft. were 2.6 million sq. ft. lower than the previous quarter and 1 million sq. ft. lower than the year-earlier level. With a four-quarter total of 30.5 million sq. ft., we are observing suburban completions begin to stabilize; for the past five years, every quarter has registered completions growth, year over year.

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While suburban multi-tenant completions were relatively stable over the past four quarters, downtown completions increased. Downtown completions were 0.5 million sq. ft. above of the 20-year quarterly average of 2.1 million sq. ft., and suburban completions were 5 million sq. ft. below the 10 million sq. ft. 20-year quarterly average. Still, Q2 2016 suburban completions were above the post-recession average of 3.8 million sq. ft., while downtown completions were significantly above their 1.5 million sq. ft. average. Based on long-run quarterly averages, multi-tenant construction in downtown submarkets was above optimal in the second quarter, while suburban supply still has some room to grow.

HSBC BUILDING | MARKET ANALYSIS

In the first half of 2016, 80% of the office space delivered across CBRE EA markets was located in the top 20 markets. Texas led with 5.8 million sq. ft. of completions, followed by California with 4 million sq. ft., the Northeast with 2.7 million sq. ft, the West with 2.6 million sq. ft., and the Midwest and South with around 2.3 million sq. ft. each.

In Q2 2015, office space under construction in all Tier I U.S. markets totaled 106.9 million sq. ft.— down from the prior quarter’s 107.5 million sq. ft. Multi-tenant projects accounted for 92.1 million sq. ft. and single-tenant projects totaled 14.8 million sq. ft.

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OFFICE RENTS AND VACANCY Despite the quarter’s vacancy decline (led by suburban submarkets), new downtown supply and muted downtown net abortion kept the TW Rent Index at $31.22 per sq. ft. in the second quarter, with no nominal quarterly rent growth. This is below the 0.7% rent growth of the prior quarter and much lower than the 1.3% of Q2 2015. In real terms, the index still at its highest level since 2009, but remains below its previous inflation-adjusted peak of $34.94, recorded in 2008.

At the market level, rents in the Bay Area and the Southeast markets were among the fastest-growing in the nation. With nominal rent growth of 3.3%, San Jose led the nation. Oakland followed with 2.4%. Portland was third, with 2.2%, and West Palm Beach and Nashville shared fourth and fifth place, with rent growth of 2.0%. Most of the top rent growth markets performed above their respective two-year quarterly averages, with rent growth accelerating. San Francisco continues to lose momentum, and in Q2 recorded negative rent growth for the first time since 2013. San Jose is seeing rent growth, meanwhile, which paints Silicon Valley and San Francisco as a complex, dynamic system with one market still on the rise while another already seen its zenith.

HSBC BUILDING | MARKET ANALYSIS

Across a majority of markets, vacancy rates continued to fall. Among the 63 Tier I markets that CBRE EA tracks, vacancy fell in 39 and went unchanged in seven—including New York, Dallas and San Jose. Nashville was lowest, with a 6.1% vacancy rate, followed by San Francisco (6.2%), San Jose (8.5%), Austin (8.7%) and Seattle (8.9%). On other end of the spectrum were Albuquerque (23%), Newark (20.3%) and Las Vegas (19.9%).

OFFICE MARKET INVESTMENT FLOWS AND CAP RATES Office transaction volume recovered in Q2 2016. According to Real Capital Analytics (RCA), the quarter’s $29 billion (only transactions of $5 million or more are included) represented a 19% jump over Q1 2016 and a 3% drop from Q2 2015. Within Core Business Districts (CBDs), volumes

HSBC BUILDING | MARKET ANALYSIS increased 45% over the previous quarter and 16% over Q2 2015. Suburban sales decreased by 5% from Q1 2016 and by 21% compared to Q2 2015. The top six suburban markets were Los Angeles, Boston, Washington D.C., San Jose, Seattle and Denver. The top six CBD markets were New York, San Francisco, Boston, Chicago, Los Angeles and Dallas.

Nationally, cap rates for all types of office assets decreased by 20 bps from the previous quarter, to 5.7%. Cap rates increased from 6.4% to 6.7% in suburban submarkets, and decreased from 5.5% to 5.0% in CBDs. With a 20% increase in CBD transaction volume, investors showed confidence in investing in CBD office markets, which drove their cap rates down. The office markets with the lowest CBD cap rate in Q2 2016 were Boston, San Francisco, Los Angeles, Chicago, Phoenix and Oakland; suburban cap rates were lowest in San Francisco, Fort Lauderdale, San Diego, San Jose and Los Angeles.

As we mentioned last quarter, 2015 showed a change in the post-recession pattern of quarterly volumes. For five years, volumes have shown a similar ladder-like pattern each calendar year, in which volumes drop during the first quarter and then gradually increase throughout the year, to new fourth-quarter highs. In 2015, transaction volumes remained nearly flat for the first three quarters, followed by the traditional Q4 increase. Despite the change, the year’s Q1 volume was higher than the previous year’s, as usual. Q1 2016 broke from the pattern, with a volume that declined, year over year, to a value closer to the Q1 volume two years ago. The stability of transaction volumes over the past year demonstrates the maturity of the U.S. office market, in our opinion. The weak transaction volume in Q1 2016 was caused by the year’s turbulent start for equity markets. Many investors saw the January-February market volatility as indication of imminent financial crisis in Asia, which could trigger the end of the current economic cycle across the rest of the world. Investors turned more cautious about all kind of transactions—including investment in real estate. Since then, equity markets

HSBC BUILDING | MARKET ANALYSIS around the globe have regained their vigor, and the second quarter showed an improved transaction volume—on par with quarterly volume of the past year.

U.S. OFFICE OUTLOOK Despite a tumultuous start to the year in the U.S. and global stock markets, and despite lingering uncertainty in developing economies, we believe that the U.S. economy as a whole and its office markets in particular still have adequate momentum to maintain a positive—albeit slightly lower— trajectory through 2018. The plateauing of transaction volumes over 2015-2016 suggests that the U.S. office sector is reaching maturity, but it does not mean that end of the current cycle is near. Even the first quarter turmoil in equity markets did little to hinder absorption and rent growth in the first half of 2016; both variables have remained well within their seasonally-adjusted range. Strong growth in national employment, including office-using jobs, will continue to drive demand in the current office market expansion. Uncertainty in developing economies, slowing international trade and the eventual end of the current economic cycle will work against it. At this moment, however, the probability of a strong negative shock to U.S. economy is still relatively low. We expect the office market to continue to maintain strength over the near term. This will include steady levels of net absorption, lower vacancy rates and higher real rents, accompanied by gradually increasing volumes of new completions. Despite recent fears of a new slowdown, the U.S. economy remains one of the world’s few “safe havens,” attracting investors in times of market turmoil. Right now, the U.S. is the one of the best- performing developed economies in the world, and its commercial real estate market is large and diversified enough to withstand global turmoil and to continue to attract new capital.

Although we consider our baseline scenario to outline the most likely course of events, Q1’s volatility and subsequent stabilization show us that the economy’s likelihood of taking a given pathway can change rather quickly. Thus we need to review a more optimistic forecast as well: our upside scenario.

HSBC BUILDING | MARKET ANALYSIS

Under our baseline scenario, we expect the vacancy rate to stay flat at 13.0% through 2016, and then to rise gradually to 14.6% by 2020, due to increase in the projected supply and downwardly revised growth in office employment. Net absorption is projected to be lower in 2016 than it was in 2015. Under our upside scenario, vacancy is also projected to stay flat to 2018, and to rise to 14.3% in 2020. Upside net absorption is also projected to be lower in 2016 than in 2015, but its five-year annual average will exceed baseline projections. Under our baseline scenario, nominal rents are projected to average growth of 1.6% annually over the next three years; under our upside scenario, the figure is 3.4%. The difference between the two might seem high, but we need to emphasize that the scenarios represent different paths for the U.S. economy, and their probabilities are constantly changing.

New York City Office Overview

The following section is an analysis conducted by the CBRE econometric advisors and information was extracted from the office market view for the second quarter of 2016, in New York City. The New York market is defined as Bergen, Hudson and Passaic counties in New Jersey and Bronx, Kings, New York, Putnam, Queens, Richmond, Rockland and Westchester counties in New York.

Office Market Forecast New York is the largest office market tracked by CBRE EA, with a total population of 14.49 million. Average per capita personal income (according to recent data from Moody's Economy.com) is estimated to be $64,956 - approximately 32.5% above the national average. Total employment stands at 6.81 million workers.

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The short-term forecast calls for overall positive growth in office workers through year-end 2017. Total net absorption is forecasted to be positive 1.6 million square feet out-pacing supply during the same period. By year-end 2017, the vacancy rate is expected to be 9.1% while rents are forecasted to grow - reaching $70.04 compared to current market rents of $66.51.

Historical minimum, maximum, and average values for each variable are provided to put current market performance in perspective. The time period from which these values are calculated is 1980 (or the earliest year of available data) to the current year. CBRE EA expects net absorption to be higher than long-term averages during the forecast, though still below historical peaks.

Office Employment

Office employment, the primary determinant of demand, is defined as certain categories within the Financial and Service employment sectors in which workers typically occupy office space. Our estimate of office employment for New York currently stands at 1.80 million workers. Over the last five years, office employment has grown by 2.2%. Over the last 12 months, office employment has grown by 1.7%.

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New York Office Market Characteristics

The office market in New York is comprised of multi-tenant office properties that the meet size and quality requirements specified by the local real estate professionals. The table below gives a summary of the existing, competitive office space in the New York office market.

New York Annual History & Forecast

Presented below is our six-year forecast for the New York office market. Historical measures are provided back to 2004. Forecasted figures for new supply are based on projects known to be currently under construction.

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While economic growth has been weak in New York, the market has avoided declines in office- using jobs. We expect office employment to grow 0.5% per year over the next six years - though this growth will be lower than the long-term average of 1.0% per year. Net absorption is expected to average 1.9 msf per year but supply is expected to have a depressing impact on vacancy with an average 2.8 msf per year. Vacancy rates are forecasted to rise to 9.9% while rents are forecasted to rise to $71.22.

Manhattan Introduction

The Manhattan office market continues to show strength and long term improvement in market fundamentals. The third quarter of 2016 has revealed continued improvement in market fundamentals, as the office market has displayed moderate growth due to present stable economic conditions. The investment property market has followed a similar trend, with demand accelerating in the last two years. Demand in the investment properties market is projected to remain strong throughout the near term future, with value appreciation over the near term future likely though gradual improvements in property operations/market fundamentals as opposed to the cap rate

HSBC BUILDING | MARKET ANALYSIS

compression that drove values earlier in the cycle. More specific details regarding market conditions at the subject’s market and submarket level are contained in the following sections.

Manhattan Office Inventory

A third quarter of 2016 summary of the Manhattan office market is presented on the following table.

NEW YORK CITY OFFICE MARKET OVERVIEW - 3rd QUARTER 2016 # of Inventory Avg Asking Vacancy Availabilty YTD Annual YTD Annual Submarket Bldgs (SF) Rent/SF Rate Rate Absorption Lease Activity MIDTOWN Park Avenue 38 29,761,607 $97.16 7.39% 10.91% (441,979) 1,396,160 5th/Madison Ave 27 11,037,829 $85.37 14.03% 16.21% 91,230 718,750 East Side 43 20,839,113 $71.11 3.87% 8.24% (489,192) 839,130 6th/Rock Cntr. 45 45,421,700 $86.54 7.95% 11.66% (738,844) 1,080,536 TimesSquare/West Side 45 32,099,753 $79.75 7.55% 9.51% 64,923 1,005,000 Times Square South 45 18,449,436 $60.31 9.31% 14.20% (21,611) 1,060,361 Grand Central 87 43,716,821 $76.05 8.98% 16.30% (1,149,497) 2,567,408 Plaza District 28 12,331,322 $130.27 9.16% 11.28% 45,163 374,157 Penn Station 28 20,354,282 $69.21 5.45% 9.77% (193,449) 1,848,763 Total Midtown Market 386 234,011,863 $81.22 7.89% 12.06% (2,833,256) 10,890,265 MIDTOWN-SOUTH Chelsea 44 14,271,936 $63.90 5.14% 8.42% (360,104) 582,413 Flatiron 61 11,395,658 $68.80 5.01% 8.67% (83,010) 621,690 Park South/Madison Sq. 59 19,550,714 $65.42 7.32% 9.44% (314,917) 635,937 Union Square 29 4,427,224 $71.55 8.46% 11.21% 182,242 426,528 Noho/Soho 51 7,919,759 $83.28 2.73% 5.85% (237,289) 437,373 Hudson Square/TriBeCa 35 15,234,328 $74.02 8.13% 10.37% (272,618) 487,116 Total Midtown South 279 72,799,619 $69.13 6.27% 9.03% (1,085,696) 3,191,057

DOWNTOWN Financial 80 55,040,680 $54.80 9.41% 12.53% (172,060) 1,787,901 City Hall 32 13,028,052 $50.76 5.62% 6.40% 142,925 487,291 WFC 9 17,808,658 $71.40 11.78% 12.95% 479,978 599,839 Total Downtown 121 85,877,390 $57.50 9.33% 11.69% 450,843 2,875,031

Overall Manhattan 786 392,688,872 $73.81 7.91% 11.42% (3,468,109) 16,956,353

The NYC office market as tracked by CBRE contains approximately 392.7 million SF of rentable area within 786 buildings. The current overall average asking rent in Manhattan is $73.81/SF with a current availability rate of 11.42%, and a vacancy rate of 7.91%.

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Construction Activity

A summary of the recently completed buildings in Manhattan is presented on the following table.

RECENTLY COMPLETED CONSTRUCTION Bldg Gross Bldg Office Address Developer/ Owner RSF RSF Completion Date 10 Hudson Yards - South Tower Related/Oxford 1,800,000 1,700,000 Completed 7 Bryant Park Hines/ Pacolet Miliken Enterprises 460,000 464,000 Completed 1 World Trade Center Port Authority of NY & NJ 3,500,000 3,000,000 Completed 4 World Trade Center Silverstein Properties 2,600,000 2,300,000 Completed 430 E 29th St (Alexandria Center-West) Alexandria R.E. Equities 421,000 421,000 Completed 250 West 55th Street Boston Properties 993,400 961,543 Completed 51 Astor Place Edward J. Minskoff Equities, Inc. 400,000 389,806 Completed 55 West 46th Street (Tower 46) Extell Development 488,583 346,984 Completed 450 West 14th Street (Highline Bldg) CB Developers 102,300 87,800 Completed 11 Times Square SJP Properties 1,105,503 1,054,201 Completed 510 Madison Avenue Boston Properties 350,000 330,800 Completed 430 E 29th St (Alexandria Center-East) Alexandria R.E. Equities 320,000 317,434 Completed Total Completed Construction 12,540,786 11,373,568

The following chart includes buildings that are currently under construction.

UNDER CONSTRUCTION SUMMARY % Based Bldg Gross Bldg Office Expected Preleased/ on Bldg Address Developer/ Owner RSF RSF Completion Sold SF Office RSF 860 Washington Street Property Group Partners 114,000 88,436 2nd Qtr 2016 40,000 45.23% 855 Avenue of the Americas (Office Only) Durst Organization 570,000 147,954 3rd Qtr 2016 147,954 100.00% 510 West 22nd Street Albanese Organization 169,000 169,000 2017 0 0.00% 540-544 West 26th Street Savanna Fund 141,361 166,525 3rd Qtr 2017 128,375 77.1% 61 Ninth Avenue (S/W/C-15th Street) Vornado / Aurora Capital 171,000 110,000 2017+ 3 World Trade Center Silverstein Properties 2,800,000 2,500,000 1st Qtr 2018 515000 20.60% 300 Lafayette Street Related 78,274 79,407 3rd Qtr 2018 1 Manhattan West - North Tower Brookfield Properties 2,100,000 2,000,000 2018 550,000 27.5% 30 Hudson Yards - North Tower Related/Oxford 2,667,408 2,624,237 1st Qtr 2019 2,624,237 100.00% 55 Hudson Yards - North Tower Related/Mitsui 1,300,000 1,300,000 4th Qtr 2017 83,000 6.38% 425 Park Avenue L&L Holdings 670,000 650,000 1st Qtr 2019 200,000 30.77% One Vanderbilt SL Green Realty 1,800,000 1,100,000 2020 190,180 17.29% Under Construction Total 12,581,043 10,935,559

HSBC BUILDING | MARKET ANALYSIS

A chart of planned developments (properties that are anticipated to begin construction in the near term) is shown below.

PLANNED NEAR TERM CONSTRUCTION % Based Bldg Gross Bldg Office Expected Preleased on Bldg Address Developer/ Owner RSF RSF Completion SF Office RSF 630 West 52nd St. (Former Hustler Club) Jack Guttman/Steve Schwartz 240,000 165,000 2016+ 2 Manhattan West - South Tower Brookfield Properties 2,100,000 2,000,000 2018-19 3 Hudson Boulevard The Moinian Group 1,800,000 1,500,000 2018 Address TBD (435 Tenth Ave site) Tishman Speyer Properties LP 2,850,000 2,600,000 2019 2 World Trade Center (200 Greenwich St.) Silverstein Properties 3,100,000 2,800,000 TBD 40-50 Tenth Ave (btw 13th & 14th St.) William Gottlieb Real Estate 117,705 111,000 TBD Planned Total 10,207,705 9,176,000

In addition, various sources quote potential development throughout Manhattan; however, these include buildings that are far from the development stage, are not primarily office use and situated in secondary locations throughout the city and thus not considered competitive.

The following timeline displays some of the major projects with expected delivery dates over the next 4-5 years:

While there are not many constraints to obtain financing in this market, there are a number of building constraints in the Manhattan office market. First, assemblage of land parcels for development is very difficult and may take many years to complete. Second, the city approval process is complex and time consuming. Third, the cost of development in Manhattan is very high compared to other areas in the region. Given these building constraints as well as lenders requirements for the majority of the building to be pre-leased, it is highly unlikely that there will be over-building in the marketplace.

HSBC BUILDING | MARKET ANALYSIS

Midtown Office Market

The subject property is located in the Midtown Manhattan office market. The following provides a visual representation of the submarkets comprising the Midtown Manhattan office market and their inventories.

A historical summary of the Midtown market place is presented in the following table:

MIDTOWN HISTORICAL OFFICE MARKET OVERVIEW Average Asking Vacancy Availability Net Absorption Leasing Activity Period Rent Rate Rate YTD YTD 3Q2016 $81.22 7.89% 12.06% (2,833,256) 10,890,265 2Q2016 $80.87 7.50% 11.70% -- -- 1Q2016 $81.16 7.36% 11.57% ------4Q2015 $79.91 7.05% 10.77% (740,568) 17,828,765 3Q2015 $77.89 6.94% 10.53% ------2Q2015 $77.75 6.90% 10.80% ------1Q2015 $76.15 7.21% 11.24% ------4Q2014 $74.92 7.52% 10.54% 2,774,365 16,608,612 3Q2014 $74.73 7.36% 11.10% ------2Q2014 $73.82 7.75% 11.53% ------1Q2014 $74.27 8.01% 11.89% ------4Q2013 $72.85 8.43% 11.68% 742,134 15,048,089 3Q2013 $70.19 8.49% 12.25% ------2Q2013 $69.51 8.44% 12.49% ------1Q2013 $69.58 8.24% 12.42% ------4Q2012 $67.80 8.11% 12.01% (2,444,156) 12,837,311 3Q2012 $65.11 8.23% 11.98% ------2Q2012 $64.56 8.30% 12.02% ------1Q 2012 $63.52 8.14% 11.86% ------4Q 2011 $62.43 7.98% 11.30% 1,549,283 16,769,574 3Q 2011 $60.57 7.94% 11.70% ------2Q 2011 $60.75 7.81% 11.66% ------1Q 2011 $58.14 8.37% 12.28% ------2010 $55.98 8.29% 12.19% 5,759,488 16,538,604 2009 $56.02 10.50% 14.78% (6,551,719) 11,629,408 2008 $78.89 7.55% 11.92% (9,568,481) 11,867,391 2007 $85.08 4.48% 7.66% 889,863 13,126,676 2006 $66.95 4.24% 8.41% 1,648,718 18,001,851 Compiled by CBRE, Inc.

HSBC BUILDING | MARKET ANALYSIS

Midtown leasing activity totaled 3.96 million sq. ft. during Q3 2016, up 3% from its five-year quarterly average, boosted by Coach, Inc.’s 694,000-sq.-ft. lease at 10 Hudson Yards. Demand appears to be increasingly characterized by leases for new construction or renewals, evidenced by four of the top five transactions this quarter. Further, year-to-date renewal activity has already surpassed the 4.4 million sq. ft. registered in full-year 2015.

The availability rate is currently 12.1%, up 40 bps from the last quarter and 160 bps from one year ago. In general, the increase in availability is concentrated among older assets, particularly those built pre-2000. Aging stock appears to be yielding an environment in which competition for new and repositioned product remains strong. Sublease availability has risen 30 bps year-over-year to 2.1%, surpassing the 2% mark for the first time in 13 months. That said, the amount of sublet space remains historically low, with its average asking rent up 4% year-over-year to $65.64 per sq. ft., a peak this cycle.

Midtown registered negative 857,000 sq. ft. of net absorption during the quarter, bringing the year- to-date total to negative 2.83 million sq. ft. The lack of positive quarterly absorption was largely the result of approximately 501,000 sq. ft. at 1155 Avenue of the Americas that came to market in July, compounded by a further 222,000 sq. ft. at 777 Third Avenue coming to market in August. Below- average leasing activity failed to absorb the new additions, yielding the significantly negative year-to- date total.

Midtown’s average asking rent stands at $81.22 per sq. ft., nearly unchanged from the previous quarter, and up 4% year-over-year. Given that rent growth has moderated and concessions have been creeping upward for quite some time, the question remains if rents will surpass their previous high of $86.57 per sq. ft. achieved in mid-2008.

In regard to the development pipeline, no new construction is expected to come to market until late 2017, when the 1.3-million-sq.-ft. 55 Hudson Yards is due to come online—more than 600,000 sq. ft. of which has already been leased or is subject to a letter of intent.

HSBC BUILDING | MARKET ANALYSIS

Leasing Activity

A summary of the leasing activity in the Midtown marketplace is presented below:

Quarterly leasing activity was up 6% from Q2 2016, albeit off a relatively low base, and up 3% from its five-year quarterly average. Robust quarterly performance masked a polarization of activity at the submarket level: Penn Station witnessed a particularly strong quarter following Coach, Inc.’s 694,000-sq.-ft. lease at 10 Hudson Yards and Milbank, Tweed, Hadley & McCloy’s 258,000-sq.-ft. lease at 55 Hudson Yards. Meanwhile, leasing in the Sixth Avenue/Rockefeller Center submarket was unusually low, falling below 200,000 sq. ft. for the first time since 1992. Overall, interest in the Hudson Yards development bolstered activity at the aggregate level.

Net Absorption

A summary of the net absorption in the Midtown marketplace is presented below:

Net absorption was negative in most Midtown submarkets, with only Fifth/Madison Avenue, the Plaza District and Times Square/West Side posting positive quarterly figures. Even then, the numbers were

HSBC BUILDING | MARKET ANALYSIS not notably positive—the highest of which was less than 222,000 sq. ft. The Sixth Avenue/ Rockefeller Center submarket underperformed most significantly, following the addition of more than 500,000 sq. ft. of office space at 1155 Avenue of the Americas, compounded by the weakest quarter of leasing on record. Park Avenue also witnessed substantial negative net absorption after almost 350,000 sq. ft. of space came to market combined across 399, 245 and 277 Park Avenue.

Availability

A summary of the availability in the Midtown marketplace is presented on the following table:

Midtown’s availability rate edged upward 40 bps from Q2 2016 to 12.1%. The biggest increases in available space took place in Sixth Avenue/ Rockefeller Center, Park Avenue and the East Side, hand- in-hand with the negative net absorption measured in these submarkets during the quarter. Year-over- year, availability rates increased across all submarkets, except in Times Square/West Side and the Plaza District, which both saw a slight dip. Overall, it seems that availability west of Fifth Avenue has been tighter than availability east of Fifth Avenue, largely due to relatively attractive pricing on Midtown’s West Side and the residual benefits of the Hudson Yards development.

Average Asking Rents

A summary of the average asking rents within the Midtown marketplace is presented on the following table:

HSBC BUILDING | MARKET ANALYSIS

Asking rents were largely unchanged at the submarket level quarter-over-quarter, with the exception of 5% bumps in Fifth/Madison Avenue, following the addition of space at 520 Madison Avenue and 12 East 49th Street priced above $100 per sq. ft., and Times Square/West Side, following the addition of space at 888 Seventh Avenue priced above $90 per sq. ft. While the year-over-year changes are more significant, it appears that Midtown rents are very near their peak, as aging stock, rising concessions and a lack of new construction (which is typically priced at a premium) will likely temper future rent growth this cycle.

Taking Deal Information

Summaries of the Taking Rent Index as well as average concessions within the Midtown marketplace are included on the following table:

HSBC BUILDING | MARKET ANALYSIS

The taking rent index posted a 120-bps decrease quarter-over-quarter, falling to 93.8%. Concession packages for new leases of raw space completed during the quarter included an average of $59 per sq. ft. in tenant improvement allowance and 9 months of free rent.

Submarket Analysis

The subject is located within the Grand Central submarket, within the Midtown office market. The following table provides an historical summary of the Grand Central submarket.

GRAND CENTRAL HISTORICAL OFFICE MARKET OVERVIEW Average Vacancy Availability Leasing Activity Net Absorption Period Asking Rent Rate Rate YTD YTD 3Q2016 $76.05 8.98% 16.30% 2,567,408 (1,149,497) 2Q2016 $75.63 8.14% 16.14% -- -- 1Q2016 $76.99 8.04% 15.68% ------4Q2015 $67.58 7.48% 13.47% 3,094,645 (445,560) 3Q2015 $67.47 7.74% 12.69% ------2Q2015 $67.21 7.67% 12.54% ------1Q2015 $66.50 7.71% 12.67% ------4Q2014 $65.51 7.91% 12.47% 3,646,289 1,111,037 3Q2014 $64.39 8.48% 13.05% ------2Q2014 $62.42 9.90% 13.91% ------1Q2014 $61.27 10.75% 14.73% ------4Q2013 $61.20 10.89% 15.11% 2,542,774 (897,064) 3Q 2013 $60.81 10.77% 14.77% ------2Q 2013 $60.16 9.77% 14.87% ------1Q2013 $60.30 9.74% 15.20% ------4Q 2012 $61.12 8.22% 13.07% 2,705,222 (116,878) 3Q2012 $59.20 8.93% 13.58% ------2Q 2012 $57.42 9.61% 13.36% ------1Q 2012 $56.75 9.50% 13.42% ------2011 $55.63 9.52% 13.28% 4,026,926 395,179 2010 $53.33 9.63% 14.44% 3,160,921 465,048 2009 $52.61 10.69% 15.59% 1,762,096 (724,826) 2008 $68.68 9.04% 13.93% 2,875,675 (1,487,459) 2007 $74.87 6.71% 10.43% 2,662,605 (411,902) 2006 $59.55 --- 9.38% 3,909,383 1,224,014 2005 $52.04 --- 12.36% 3,283,976 429,281 Compiled by CBRE, Inc.

As shown in the previous chart, the vacancy rate within the submarket has been relatively consistent over the past five years with fluctuations in the 8-10% range. The current vacancy rate of 7.74% is at the lower end of the range since the peaks of the prior cycle in 2007. Average rental rates have increased substantially over the past few years, with a 3% increase since the year-end 2014 and an increase of near 20% since the beginning of 2012. The Grand Central submarket has historically under-performed the Midtown Manhattan market in terms of asking rent and vacancy rates given the older product that is common in much of the submarket.

HSBC BUILDING | MARKET ANALYSIS

CONCLUSION

Current market statistics show increases in rental rates and declining vacancy/availability rates in the overall office market, confirming that we are experiencing an expanding economy that will continue to lead to commercial growth. Expectations of market participants are for a positive long term outlook. The improvements in the leasing market have helped compound improvements in the investment sales market, resulting in significant increases in property values across most commercial property types in Manhattan. The office market performance measures have continued to trend upward and growth has continued in 2015. Interest rates have remained very low relative to historic levels, and as such, real estate markets should continue to improve through 2015 and into the near term future.

HSBC BUILDING | ZONING

ZONING

The subject property is situated within a C5-3 and M1-6 zoned area as defined by the City of New York.

The New York City Zoning Resolution regulates the use to which a property may be put as well as the density, bulk, height, and siting of any improvements to the property. Regulations are promulgated by the Department of City Planning and are subject to review by the Board of Standards and Appeals and by the Board of Estimate. The following table summarizes the zoning at the subject property.

HSBC BUILDING | ZONING

ZONING SUMMARY Current Zoning C5-3 General Commercial M1-6 Legally Conforming Yes (per special permit) Yes (per special permit) Uses Permitted High bulk offices or commercial Light industrial and uses serving the central location commercial uses Zoning Change Not likely Not likely Category Zoning Requirement Zoning Requirement Floor Area Ratio 15.0 10.0 18.0 with bonuses 12.0 with bonuses Site Coverage 1 Feet 1 Feet Setbacks (front/rear/side) None Required None Required Height limit of front wall 85 feet to first setback 85 feet to first setback Parking requirements None required None required Source: Planning & Zoning Dept.

The C5 zones are intended to promote the development of a wide range of high-bulk commercial uses requiring a central location. Typical uses within these districts include large multi-tenant office buildings, corporate headquarters, hotels, entertainment facilities, retail properties and high-rise residential buildings. As a part of the Special Midtown District, developers within this area are encouraged to develop open public plazas and arcades and to make improvements to subway stations. The incentive to developers results from bonuses to the allowable floor-area-ratio (FAR) of the site.

Zoning resolutions in New York City regulate improvement size through a floor-area-ratio system. The FAR is the gross square foot size of the improvement (less certain deductions) divided by the square foot area of the site. The higher the FAR, the denser the improvements. Excluded from the gross square foot area of a building are cellars, space used for mechanical equipment, space used for loading berths as long as that space does not exceed 200% of the minimum area required, and space devoted to off-street parking except if such spaces are located in a parking garage. In general, the resolution does not regulate height although it does mandate setbacks with height.

Under the New York City Zoning Resolution, the applicable lot area is that of the “zoning lot” on which a given property is located. A zoning lot can be comprised of a single tax lot or multiple tax lots that have been declared to be a single zoning lot for purposes of development. Up until 2006, the applicable zoning lot for the 452 Fifth Avenue complex was comprised of Lots 30, 31, 49, and 54 in Block 841, totaling approximately 51,200 square feet. In 2006, this zoning lot was merged with lots 58 and 60, in conjunction with an application for a Special Permit from the City Planning Commission to develop a mixed-use building on Lot 60. The current combined zoning lot has an area of approximately 59,002 square feet.

The permitted floor area on the zoning lot is governed by the Special Permit plans approved by the City Planning Commission in 2008. Under these approved plans, the buildings comprising the 452

HSBC BUILDING | ZONING

Fifth Avenue complex are permitted a total of 637,610 square feet of zoning floor area (based on excerpts from drawing Z-3, Zoning Lot Computations, Morris Adjmi Architects, dated 12-10-07). This calculation of permitted floor area is based on a combination of the floor area allowed in the current zoning districts (C5-3 and M1-6), as well as the distribution of floor area that was permitted under previous Special Permits granted in 1981 and 1984 with respect to the 452 Fifth Avenue complex. It should be noted that “zoning floor area” does not include cellar space or certain mechanical areas and thus we are complying.

HSBC BUILDING | HIGHEST AND BEST USE

TAX AND ASSESSMENT DATA

The subject property is assessed and taxed by the City of New York on an ad valorem basis. Real property in New York State is not required to be assessed at 100% of market value, but all the ratables within a taxing jurisdiction must be assessed at a consistent percentage of market value. The state legislature exempted the City of New York from this requirement. As such, NYC is permitted to classify real property by type and to assess classifications at different fractions of their market values thus the legislature permitted the taxation burden to be shared inequitably among categories of properties in this area. New York City assesses commercial property at 45% of the Assessor’s Fair Market Value and in reality the Assessed Value is typically well below 45% of actual market value.

In New York City, reassessments occur annually, and local authorities phase in changes over a five- year period. During the phase-in, the annual assessed values are "transitional values". The full reassessed value is the "actual" or "target value". The first transitional value is the original assessed value plus 20% of the difference between the original and prior original value. The 20% increments are added incrementally to each prior year's transitional value until the full change in value is phased- in during the fifth year. The subject property is identified as Block: 841, Lots 49 and 31 by the City of New York and its current and historical transitional and actual assessments are as follows.

AD VALOREM TAX INFORMATION (452 Fifth Ave) Block 841, Lot 49 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 Actual Assessment Land $31,500,000 $31,500,000 $31,500,000 $31,471,200 $31,471,200 $31,471,200 Building $38,824,200 $53,500,000 $56,268,900 $62,866,350 $73,627,993 $101,398,050 Total $70,324,200 $85,000,000 $87,768,900 $94,337,550 $105,099,193 $132,869,250 Transitional Assessment Land $31,500,000 $31,500,000 $31,500,000 $31,494,240 $31,488,480 $31,488,480 Building $35,178,750 $38,720,780 $44,616,590 $55,601,810 $62,232,899 $72,906,893 Total $66,678,750 $70,220,780 $76,116,590 $87,096,050 $93,721,379 $104,395,373

General Tax Rate 10.152 10.288 10.323 10.684 10.656 10.574 Total Taxes $6,769,227 $7,224,314 $7,857,516 $9,305,342 $9,986,950 $11,038,767 Source: Assessor's Office 1 - Per $100 of A.V.

HSBC BUILDING | HIGHEST AND BEST USE

AD VALOREM TAX INFORMATION (1 West 39th St.) Block 841, Lot 31 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 Actual Assessment Land $3,600,000 $3,600,000 $3,600,000 $3,600,000 $3,600,000 $3,600,000 Building $5,698,800 $7,344,900 $7,345,000 $8,100,000 $8,527,050 $9,505,800 Total $9,298,800 $10,944,900 $10,945,000 $11,700,000 $12,127,050 $13,105,800 Transitional Assessment Land $3,600,000 $3,600,000 $3,600,000 $3,600,000 $3,600,000 $3,600,000 Building $5,830,360 $6,082,740 $6,336,740 $7,335,740 $7,781,150 $8,416,550 Total $9,430,360 $9,682,740 $9,936,740 $10,935,740 $11,381,150 $12,016,550

1 General Tax Rate (per $100 A.V.) 10.152 10.288 10.323 10.684 10.656 10.574 Total Taxes $944,014 $996,160 $1,025,770 $1,168,374 $1,212,775 $1,270,630 Source: Assessor's Office

The current transitional value is below the actual assessment. As such, the current liability will be based off of the transitional assessment, with changes resulting from actual assessment phased-in over a period of 5 years. In addition, there are phase-in amounts from previous years, which in conjunction with the current phase in results in reduced tax growth over the initial 5 years of our analysis.

In order to determine if the subject taxes (combined between the two buildings) are reasonable we have analyzed taxes from comparable buildings that are presented as follows:

AD VALOREM TAX COMPARABLES

Comparable 1114 Ave of 1177 Avenue of 330 Madison 100 Park Subject Address Americas the Amercas Avenue Avenue

GBA (SF) 1,517,497 912,955 733,001 778,203 788,773 Tax Year 2016/2017 2016/2017 2016/2017 2016/2017 2016/2017 Total Assessed Value $242,285,850 $156,209,850 $133,017,750 $147,935,250 $145,975,050 AV Per SF (GBA) $159.66 $171.10 $181.47 $190.10 $185.07

Source: Assessor's Office

The subject’s actual assessment has increased 24.5% from the 2015/2016 tax year, a significant increase due to the stabilization of operations after completion of the renovations and re-tenanting of the building. This increase is phased in over 5 years and thus the immediate impact of the increase is mitigated.

FUTURE TAX INCREASES

The New York City Council sets the annual tax rates for each property class based on the total amount of ratables and budget needs. The rate is typically established in June and takes effect on July 1. Tax bills may be paid in four equal quarterly installments in arrears beginning July 15. Below is a history summary of tax rates for the City of New York:

HSBC BUILDING | HIGHEST AND BEST USE

NYC TAX RATES Tax Class I Tax Class II Tax Class III Tax Class IV YEAR Rate % Change Rate % Change Rate % Change Rate % Change

15/16 19.554% 2.07% 12.883% 0.22% 10.813% -2.80% 10.656% -0.26% 14/15 19.157% -0.18% 12.855% -2.21% 11.125% -6.53% 10.684% 3.50% 13/14 19.191% 3.35% 13.145% -0.27% 11.902% -4.61% 10.323% 0.34% 12/13 18.569% 2.00% 13.181% -1.88% 12.477% 0.03% 10.288% 1.34% 11/12 18.205% 4.84% 13.433% 0.60% 12.473% -1.25% 10.152% -1.55% 10/11 17.364% 1.62% 13.353% 0.85% 12.631% -0.88% 10.312% -1.09% 09/10 17.088% 1.79% 13.241% 1.44% 12.743% 1.32% 10.426% -1.75% 08/09 3rd/4th Qtr. 16.787% 7.57% 13.053% 7.53% 12.577% 7.51% 10.612% 7.52% 08/09 1st/2nd Qtr. 15.605% 1.11% 12.139% 1.77% 11.698% 1.05% 9.870% -1.88% 07/08 15.434% -4.24% 11.928% -6.35% 11.577% -3.58% 10.059% -8.53% 06/07 16.118% 2.36% 12.737% 2.75% 12.007% -2.45% 10.997% -2.73% 05/06 15.746% 4.32% 12.396% 1.47% 12.309% -1.94% 11.306% -2.18% 04/05 15.094% 3.74% 12.216% -3.20% 12.553% 1.09% 11.558% 1.11% 03/04 14.550% 2.75% 12.620% 0.82% 12.418% -1.17% 11.431% -1.29% 02/03 3rd/4th Qtr. 14.160% 18.63% 12.517% 18.49% 12.565% 18.46% 11.580% 18.45% 02/03 1st/2nd Qtr. 11.936% 2.82% 10.564% -2.11% 10.607% 0.63% 9.776% 0.66% 01/02 11.609% 3.15% 10.792% -0.51% 10.541% 0.01% 9.712% -0.57% 00/01 11.255% 0.79% 10.847% -0.04% 10.540% 12.15% 9.768% -2.21% 99/00 11.167% 1.88% 10.851% 1.04% 9.398% 6.80% 9.989% -2.41% 98/99 10.961% 1.03% 10.739% -2.78% 8.800% 6.25% 10.236% 0.71% 97/98 10.849% 0.59% 11.046% -0.09% 8.282% 5.64% 10.164% -0.86% 96/97 10.785% 0.56% 11.056% 2.30% 7.840% -1.04% 10.252% -1.44% 95/96 10.725% 0.29% 10.807% 2.42% 7.922% 2.86% 10.402% -1.94% 94/95 10.694% -1.89% 10.552% 1.76% 7.702% 4.02% 10.608% -1.08% 93/94 10.900% 0.11% 10.369% 4.63% 7.404% -42.13% 10.724% 0.24% 92/93 10.888% 0.00% 9.910% 0.25% 12.794% -2.21% 10.698% 0.63% 91/92 10.888% 9.76% 9.885% 7.12% 13.083% -13.93% 10.631% 6.27% 90/91 9.920% 4.95% 9.228% -0.01% 15.200% 17.80% 10.004% 4.87% Source: New York City Department of Finance

Rates for Class IV properties have typically followed a gradual declining pattern with increase years historically tied to recessionary periods for the City of New York.

CONCLUSION

Based on the previous discussion of the assessment and tax rates, the subject’s initial year tax liability is estimated at $11,142,535 and $1,321,634 for 452 Fifth Avenue and 1 West 39th Street, respectively or a combined real estate tax liability of $12,464,169. As of the date of our analysis, all taxes at the subject property were paid through current levels.

A summary of our concluded future tax liability and assessment phase-in at the subject property is presented on the following tables. It should be noted that the 1 West 39th Street is in the 10th year of a 12-year ICIP exemption. After the 8th year the exemption began phasing out at 20% per year as shown on the schedule on the following page.

COMBINED RE TAX LIABILITY 2016/2017 2017/2018 2018/2019 2019/ 2020 2020/ 2021 2021/ 2022 2022/ 2023 2024/ 2025 2025/2026

452 Fifth Ave $11,142,535 $12,138,707 $13,196,157 $14,336,276 $15,334,066 $15,797,119 $16,274,156 $16,765,599 $17,271,882

1 West 39th St. $1,270,630 $1,321,634 $1,379,297 $1,441,199 $1,500,925 $1,546,253 $1,592,950 $1,641,057 $1,690,617

Total RE Tax $12,413,165 $13,460,341 $14,575,454 $15,777,475 $16,834,991 $17,343,372 $17,867,106 $18,406,656 $18,962,499

CBRE

HSBC BUILDING | HIGHEST AND BEST USE

R.E. TAXES - TRANSITIONAL ASSESSMENT PHASE-IN (452 Fifth Avenue) Actual Trans. 2016/ 2017/ 2018/ 2019/ 2020/ 2021/ 2022/ 2024/ 2025/ Assmt. Assmt. 2017 2018 2019 2020 2021 2022 2023 2025 2026 Tax/ Yr. ,, , , (, ) (, ) (, ) (, )

2012 / 13 $85,000,000 $70,220,780 $2,935,160

2013 / 14 $87,768,900 $76,116,590 $148,780 $148,780

2014 / 15 $94,337,550 $87,096,050 -$22,500 -$22,500 -$22,500

2015 / 16 $105,099,193 $93,721,379 $2,053,149 $2,053,149 $2,053,149 $2,053,149

2016 / 17 $132,869,250 $104,395,373 $5,554,011 $5,554,011 $5,554,011 $5,554,011 $5,554,011

2017 / 18 $135,526,635 $112,660,290 $531,477 $531,477 $531,477 $531,477 $531,477

2018 / 19 $138,237,168 $121,318,534 $542,107 $542,107 $542,107 $542,107 $542,107

2019 / 20 $141,001,911 $130,552,226 $552,949 $552,949 $552,949 $552,949 $552,949

2020 / 21 $143,821,949 $138,296,777 $564,008 $564,008 $564,008 $564,008 $564,008

2021 / 22 $146,698,388 $141,062,605 $575,288 $575,288 $575,288 $575,288

2022 / 23 $149,632,356 $143,883,749 $586,794 $586,794 $586,794

2023 / 24 $152,625,003 $146,761,316 $598,529 $598,529

2024 / 25 $155,677,503 $149,696,434 $610,500

Previous Transitional $94,657,919 $104,395,373 $112,660,290 $121,318,534 $130,552,226 $138,296,777 $141,062,605 $143,883,749 $146,761,316

Phase In $9,737,454 $8,264,917 $8,658,244 $9,233,692 $7,744,551 $2,765,828 $2,821,144 $2,877,567 $2,935,118

Current Trans. Assessment $104,395,373 $112,660,290 $121,318,534 $130,552,226 $138,296,777 $141,062,605 $143,883,749 $146,761,316 $149,696,434

Current Actual Assessment $132,869,250 $135,526,635 $138,237,168 $141,001,911 $143,821,949 $146,698,388 $149,632,356 $152,625,003 $155,677,503

Taxable (min of Actual & Trans.) $104,395,373 $112,660,290 $121,318,534 $130,552,226 $138,296,777 $141,062,605 $143,883,749 $146,761,316 $149,696,434

Tax Rate 10.574 10.680 10.787 10.894 11.003 11.113 11.225 11.337 11.450

Annual Tax Liability $11,038,767 $12,031,826 $13,086,069 $14,222,885 $15,217,274 $15,676,824 $16,150,252 $16,637,977 $17,140,432 Annual % Increase 9.00% 8.76% 8.69% 6.99% 3.02% 3.02% 3.02% 3.02%

Plus BID Tax $103,768 $106,881 $110,088 $113,390 $116,792 $120,296 $123,905 $127,622 $131,450 Fiscal Year Tax Liability $11,142,535 $12,138,707 $13,196,157 $14,336,276 $15,334,066 $15,797,119 $16,274,156 $16,765,599 $17,271,882

Annual % Increase 8.94% 8.71% 8.64% 6.96% 3.02% 3.02% 3.02% 3.02% CBRE/NYC Department of Finance

R.E. TAXES - TRANSITIONAL ASSESSMENT PHASE-IN (1 West 39th Street) Actual Trans. 2016/ 2017/ 2018/ 2019/ 2020/ 2021/ 2022/ 2023/ 2024/ Assmt. Assmt. 2017 2018 2019 2020 2021 2022 2023 2024 2025 Tax Yr./ ,, , , , , , ,

2011 / 12 $9,298,800 $9,430,360

2012 / 13 $10,944,900 $9,682,740 $329,220

2013 / 14 $10,945,000 $9,936,740 $20 $20

2014 / 15 $11,700,000 $10,935,740 $25,000 $25,000 $25,000

2015 / 16 $12,127,050 $11,381,150 $85,410 $85,410 $85,410 $85,410

2016 / 17 $13,105,800 $12,016,550 $195,750 $195,750 $195,750 $195,750 $195,750

2017 / 18 $13,367,916 $12,375,153 $52,423 $52,423 $52,423 $52,423 $52,423

2018 / 19 $13,635,274 $12,787,208 $53,472 $53,472 $53,472 $53,472 $53,472

2019 / 20 $13,907,980 $13,228,804 $54,541 $54,541 $54,541 $54,541 $54,541

2020 / 21 $14,186,139 $13,640,622 $55,632 $55,632 $55,632 $55,632 $55,632

2021 / 22 $14,469,862 $13,913,434 $56,745 $56,745 $56,745 $56,745

2022 / 23 $14,759,259 $14,191,703 $57,879 $57,879 $57,879

2023 / 24 $15,054,445 $14,475,537 $59,037 $59,037

2024 / 25 $15,355,534 $14,765,048 $60,218

Previous Transitional $11,381,150 $12,016,550 $12,375,153 $12,787,208 $13,228,804 $13,640,622 $13,913,434 $14,191,703 $14,475,537

Phase In $635,400 $358,603 $412,055 $441,596 $411,818 $272,812 $278,269 $283,834 $289,511

Current Trans. Assessment $12,016,550 $12,375,153 $12,787,208 $13,228,804 $13,640,622 $13,913,434 $14,191,703 $14,475,537 $14,765,048

Current Actual Assessment $13,105,800 $13,367,916 $13,635,274 $13,907,980 $14,186,139 $14,469,862 $14,759,259 $15,054,445 $15,355,534

Taxable (min of Actual & Trans.) $12,016,550 $12,375,153 $12,787,208 $13,228,804 $13,640,622 $13,913,434 $14,191,703 $14,475,537 $14,765,048

Tax Rate 10.574 10.680 10.787 10.894 11.003 11.113 11.225 11.337 11.450

Annual Tax Liability $1,270,630 $1,321,634 $1,379,297 $1,441,199 $1,500,925 $1,546,253 $1,592,950 $1,641,057 $1,690,617 Annual % Increase 11.4% 4.0% 4.36% 4.49% 4.14% 3.02% 3.02% 3.02% 3.02%

CBRE/NYC Department of Finance

HSBC BUILDING | HIGHEST AND BEST USE

HIGHEST AND BEST USE

In appraisal practice, the concept of highest and best use represents the premise upon which value is based. The four criteria the highest and best use must meet are:

* legal permissibility; * physical possibility; * financial feasibility; * maximum profitability.

The highest and best use analysis of the subject is discussed on the following pages. This analysis incorporates the information presented in the Market Analysis section, as well as any unique characteristics of the subject described previously.

AS VACANT

Legal Permissibility

The legally permissible uses were discussed in the Site Analysis and Zoning Sections.

Physical Possibility

The subject is adequately served by utilities, and has an adequate shape and size, sufficient access, etc., to be a separately developable site. There are no known physical reasons why the subject site would not support any legally probable development (i.e. it appears adequate for development). Existing structures on the subject site and the surrounding parcels provide evidence for the physical possibility of development.

Financial Feasibility

The determination of financial feasibility is dependent primarily on the relationship of supply and demand for the legally probable land uses versus the cost to create the uses. As discussed in the market analysis of this report, the subject office market is generally stabilized. Development of new office properties has occurred in the past few years. Further, there are proposed and under construction developments in the subject’s vicinity. These factors indicate that it would be financially feasible to complete a new office project as long as the property is able to obtain a commitment from an anchor tenant prior to start of construction.

Maximum Profitability

The final test of highest and best use of the site as if vacant is that the use be maximally productive, yielding the highest return to the land. In the case of the subject as if vacant, the analysis has indicated that a new office project would be most appropriate.

HSBC BUILDING | HIGHEST AND BEST USE

CONCLUSION: HIGHEST AND BEST USE AS VACANT

Based on the information presented above and upon information contained in the market and neighborhood analysis, we conclude that the highest and best use of the subject as if vacant would be the development of an office property, once an anchor tenant was obtained.

AS IMPROVED

Legal Permissibility

As discussed, the subject site’s zoning and legal restrictions permit a variety of land uses. The site has been improved with an office development that is a legal, conforming use.

Physical Possibility

The physical characteristics of the subject improvements were discussed in detail in the improvements analysis. Both the layout and positioning of the improvements are considered functional for office use. While it would be physically possible for a wide variety of uses, based on the legal restrictions and the design of the improvements, the continued use of the property for office users would be the most functional use.

Financial Feasibility

The financial feasibility of an office property is based on the amount of rent which can be generated, less operating expenses required to generate that income; if a residual amount exists, then the land is being put to a productive use. As will be indicated in the income capitalization approach, the subject is producing a positive net cash flow and continued utilization of the improvements for office purposes is considered financially feasible.

Maximum Profitability

The maximally profitable use of the subject as improved should conform to neighborhood trends and be consistent with existing land uses. Although several uses may generate sufficient revenue to satisfy the required rate of return on investment and provide a return on the land, the single use that produces the highest price or value is typically the highest and best use. As shown in the applicable valuation sections, buildings that are similar to the subject have been acquired or continue to be used by office owners/tenants. None of the comparable buildings have been acquired for conversion to an alternative use. These comparables would indicate that the maximally productive use of the property is consistent with the existing use as an office property.

CONCLUSION: HIGHEST AND BEST USE AS IMPROVED

Based on the foregoing, the highest and best use of the property, as improved, is consistent with the existing use as an office development.

HSBC BUILDING | APPRAISAL METHODOLOGY

APPRAISAL METHODOLOGY

In appraisal practice, an approach to value is included or omitted based on its applicability to the property type being valued and the quality and quantity of information available.

COST APPROACH

The cost approach is based on the proposition that the informed purchaser would pay no more for the subject than the cost to produce a substitute property with equivalent utility. This approach is particularly applicable when the property being appraised involves relatively new improvements that represent the highest and best use of the land, or when it is improved with relatively unique or specialized improvements for which there exist few sales or leases of comparable properties.

SALES COMPARISON APPROACH

The sales comparison approach utilizes sales of comparable properties, adjusted for differences, to indicate a value for the subject. Valuation is typically accomplished using physical units of comparison such as price per square foot, price per unit, price per floor, etc., or economic units of comparison such as gross rent multiplier. Adjustments are applied to the physical units of comparison derived from the comparable sale. The unit of comparison chosen for the subject is then used to yield a total value. Economic units of comparison are not adjusted, but rather analyzed as to relevant differences, with the final estimate derived based on the general comparisons.

INCOME CAPITALIZATION APPROACH

The income capitalization approach reflects the subject’s income-producing capabilities. This approach is based on the assumption that value is created by the expectation of benefits to be derived in the future. Specifically estimated is the amount an investor would be willing to pay to receive an income stream plus reversion value from a property over a period of time. The two common valuation techniques associated with the income capitalization approach are direct capitalization and the discounted cash flow (DCF) analysis.

METHODOLOGY APPLICABLE TO THE SUBJECT

In valuing the subject, only the sales comparison and income capitalization approaches are applicable and have been used. The cost approach is not applicable in the estimation of market value due to as market participant do not rely on this methodology.

HSBC BUILDING | SALES COMPARISON APPROACH

SALES COMPARISON APPROACH

The Sales Comparison Approach provides an estimate of market value based on analyzing transactions of similar properties in the market area. The method is based on the proposition that an informed purchaser would pay no more for a property than the cost of acquiring an existing one with the same utility. When there are an adequate number of sales of truly similar properties with sufficient information for comparison, a range of values for the subject property can be developed.

The applicability of this approach is based on the assemblage of similar market sales and offerings for a comparison to the subject. Considerations for such factors as changing market conditions over time, location, size, quality, age/condition, and amenities, as well as the terms of the transactions, are all significant variables relating to the relative marketability of the subject property. Any adjustments to the sale price of market sales to provide indications of market value for the subject must be market-derived; thus, the actions of typical buyers and sellers are reflected in the comparison process.

The $/SF unit of comparison is derived by dividing the sale price by the building’s NRA. This unit of comparison can be adjusted to account for dissimilarities between market sales and the subject property. The unit of comparison is then applied to the subject’s NRA to estimate a value.

COMPARABLE SALES ANALYSIS

The following table summarizes the comparable sales used in the analysis. The nominal sales prices of the comparables range from $873.15 to $1,158.91 per square foot, indicating an average of approximately $1,005.08 per square foot. The overall capitalization rates indicated a range from 3.26% to 4.62% with an average of 4.12%. A more detailed description of each transaction is included in the addendum.

SUMMARY OF COMPARABLE OFFICE SALES Transaction Year NRA Price NOI No. Name Type Date Built / Renov. (SF) Sale Price Per SF Occ. Per SF OAR

1 11 Madison Ave Sale Aug-16 1929/2015 2,280,150 $2,600,000,000 $1,140.28 98% $37.20 3.26%

2 1250 Broadway Sale Jun-16 1968 647,086 $565,000,000 $873.15 97% n/a n/a

3 1140 Ave of Amer.* Sale Jun-16 1926/2012 249,703 $271,406,250 $1,086.92 91% $45.43 4.18%

4 275 Madison Ave Sale Jun-16 1931/2004 305,849 $275,000,000 $899.14 93% $35.07 3.90%

5 1285 Ave of Amer. Sale May-16 1960 1,749,000 $1,650,000,000 $943.40 100% $43.60 4.62%

6 787 Seventh Ave. Sale Jan-16 1985 1,638,637 $1,899,037,256 $1,158.91 98% $48.91 4.22%

7 600 Lexington Ave Sale Dec-15 1984/2004 304,138 $284,000,000 $933.79 95% $42.46 4.55%

Compiled by CBRE * Adjusted from $180 MM for LH value to $271.4 LF value

HSBC BUILDING | SALES COMPARISON APPROACH

DISCUSSION/ANALYSIS OF IMPROVED SALES

Comparable 1 – 11 Madison Avenue

This transaction represents the August 2016 sale of a 40% interest in 11 Madison Avenue, a 2,280,150 square-foot, 28-story office building located on the full block bounded by Madison Avenue and Park Avenue South, between East 24th and 25th Streets. The building features full- block frontage on Madison Park. It serves as the North American headquarters of Credit Suisse (renewal lease to start in June 2017) and also serves as the US headquarters for SONY, who took occupancy in February 2016. These two tenants occupy approximately 80% of the rentable area, and generate 76% of the revenue. After an initial modernization during the mid-1990’s, which transformed the building in a Class A office product, additional $300 million are being currently invested to make of this property a trophy asset in Midtown South. It should be noted that SL Green purchased the building for $2.260 billion or $991 per square foot in 2015. With lease-up costs related to Sony expended and some additional base building capital completed a 40% interest was sold in August 2016 at a grossed up price of $2.6 billion or $1,140.28 per square foot. The property was reported to trade at a 3.26% overall capitalization rate (property not fully stabilized) based on an NOI of $37.20 per square foot.

No adjustments are required for property rights conveyed, financing terms, conditions of sale, or market conditions. This property is situated Midtown South, in a location directly facing Madison Square Park, a neighborhood that has witnessed a strengthening of demand in the last 12 months and is considered slightly superior top the subject. An upward adjustment is necessary for the significantly larger size of this property relative to the subject property. No adjustment is necessary for age/quality/condition, as the renovations at this property have helped keep it at a high quality level relative to most Midtown South properties (and the high quality if 452 Fifth is somewhat offset by the 1W39th component). This property has very high-quality anchor tenancy that comprises approximately 80% of the building, warranting downward adjustment. Overall, the subject would command a lower price per square foot compared to this comparable.

Comparable 2 – 1250 Broadway

The office building located at 1250 Broadway is a 647,086 square foot, 39-story structure. It is situated at the southeast corner of Broadway and West 32nd Street, on the border of the Chelsea and Penn Station submarket of Midtown and Midtown South. The property was 97% leased at the time of the sale, with the anchor tenant being the Visiting Nurse Service of New York (“VNSNY”), with approximately 245,420 square feet that expires in 2018. The building is in good condition and is located within a neighborhood that attracted significant interest from TAMI (Technology, Advertising, Media and Information) Sector tenants. The building is reported to be under-measured, and thus the rentable area will increase as tenants, such as VNSNY roll to market. The building’s sale price was $565 million or $873.15 per square foot. The in-place

HSBC BUILDING | SALES COMPARISON APPROACH cap rate was not available, but was estimated to be very low as VNSNY is known to have a very below market rent.

No adjustments are required for property rights conveyed, financing terms, conditions of sale, or market conditions. This property’s location on the fringe of Midtown and Midtown South, near Herald Square is considered slightly inferior to the subject location and would warrant a small upward adjustment. No size adjustment is necessary; however an upward adjustment is necessary for the superior age/quality/condition of the subject property relative to this comparable (although the adjustment is somewhat offset by 1W39th component of the subject). A small upward adjustment is also necessary for the subject’s superior tenancy. Overall, the subject would command a higher price per square foot compared to this transaction.

Comparable 3 – 1140 Avenue of the Americas

This represents the June 2016 sale of the leasehold component at 1140 Sixth Avenue, located between 44th and 45th Streets near Bryant Park. The 20-story office tower has a number of medium-sized tenants and was 100% occupied at the time of sale. The property’s leasehold interest sold for $180,000,000. The ground lease rent was set to reset in the near future to 4.5% of fair market land value, which was determined to be $650/SF for the 140,625 SF of FAR at the site. Capitalizing this market-level ground rent payment at 4.50% yields a capital adjustment of $91,406,250 to account for this property being a leasehold interest, for an adjusted price of $271,406,250 or $1,087 per square foot. Net operating income (excluding ground rent) was projected to be $45.49/SF, indicating an overall capitalization rate of 4.18% for this transaction.

No adjustments are required for property rights conveyed, financing terms, conditions of sale, or market conditions. This property is located in a similar quality Midtown location and therefore does not warrant a location adjustment. A downward adjustment is necessary for the smaller overall size of this property. An additional downward adjustment is required for the subject’s inferior average age/quality/condition (mainly due to the Class B space at 1 West 39th St.), compared to this property. No adjustments are necessary for occupancy/tenancy or Economic/Other. Overall, the subject would command a lower price per square foot compared to the adjusted Leased Fee value indication for this comparable transaction.

Comparable 4 – 275 Madison Avenue

This transaction involves the June 2016 sale for the office building located at 275 Madison Avenue. The 43-story office tower has a number of medium-sized tenants and was 93% occupied at the time of sale. This property faces some near term rollover risk, as the largest tenant in the building is likely vacating as a result of a 2015 merger. It is located in an average quality location, on Madison Avenue and East 40th Street. The 305,849 square foot property sold for

HSBC BUILDING | SALES COMPARISON APPROACH

$275,000,000 or $899 per square foot. Net operating income was reported at $35.07/SF, indicating an overall capitalization rate of 3.9% for this transaction.

No adjustments are required for property rights conveyed, financing terms, conditions of sale, or market conditions. An upward adjustment is required for this property’s inferior location on Madison Avenue, just east of the subject property. A small downward adjustment is necessary for the smaller size of this property relative to the subject. An upward adjustment is required for this property’s inferior condition compared to the subject property (even including 1W39th). An upward adjustment is necessary for the inferior tenancy/occupancy at this property, including the likely anchor rollover. Overall, the subject would likely command a higher price per square foot as compared to this transaction.

Comparable 5 – 1285 Avenue of the Americas

This represents the May 2016 sale of 1285 Avenue of the Americas, constructed in 1960 and located between West 51st and 52nd Streets in a core area of Corporate Row section of Sixth Avenue. The 1,749,000 square foot property is anchored by UBS, who occupies approximately 900,000 SF. The property went under contract in late 2015, however a pending renewal/extension for UBS had to be completed before the buyers were willing to close. The 40- story property sold for $1.65 billion or $943.30 per square foot. Net operating income at the fully-occupied property is $43.60/SF, indicating a capitalization rate of 4.62% for this transaction.

No adjustments are required for property rights conveyed, financing terms, conditions of sale, or market conditions. This property features a superior quality location in the core neighborhood of the Sixth Avenue/Corporate Row corridor and thus a downward adjustment is warranted. An upward adjustment is necessary for the very large size of this comparable relative to the subject. The property is in good overall condition, although it is inferior to the average condition of the subject property and would require upward adjustment. Given the high quality anchor tenancy of UBS, the overall tenancy/occupancy is considered similar to the subject. No adjustment is necessary for economic/other considerations. Overall, the subject would command a higher price per square foot compared to this comparable.

Comparable 6– 787 Seventh Avenue

This represents the January 2016 sale of the 1,682,602 square foot, 51-story office building located at 787 Seventh Avenue (a.k.a. the AXA Equitable Center) between West 51st and West 52nd Streets in Midtown Manhattan. Major tenants include financial firms BNP Paribas, Morgan Stanley, UBS AG, Willkie-Farr & Gallagher LLP, and law firm Sidley Austin LLP. The property originally went under contract for approximately $1.93 billion, however after offsets for outstanding leasing costs and allocations for the buildings high profile art were included, the

HSBC BUILDING | SALES COMPARISON APPROACH figure was reduced to $1,899,037,256 or $1,159 per square foot. Net operating income was projected to be $48.91/SF, indicating a capitalization rate of 4.22% for this transaction.

No adjustments are required for property rights conveyed, financing terms, conditions of sale, or market conditions. Although this property has a Seventh Avenue address, it is connected to 1285 Avenue of the Americas (Comp #5) and is generally associated with the Sixth Avenue corridor more so then it actual Seventh Avenue address, and thus is considered to have a superior location. An upward adjustment is necessary for the significantly larger size of this property relative to the subject property. A downward adjustment is necessary for the superior age/quality/condition of this property relative to the subject property. This property has a generally similar high-quality tenancy that comprises the majority of the building, not warranting a material adjustment to the indicated price per square foot. A downward adjustment to economic/other is necessary for the large parking garage at this property, which is not included in the NRA and generates notable revenue. Overall, the subject would command a lower price per square foot compared to this comparable.

Comparable 7 – 600 Lexington Avenue

This represents the acquisition of a 45% stake in 600 Lexington Avenue, which gives the company complete ownership of the asset. The transaction implies consideration for the consolidated interests of $284.0 million, or $936 per square foot. The loan matures in October of 2017 and the current interest rate is 2.29% as per an SEC filing. As per an SEC Filing, dated February 23, 2015, the property was 89.2% occupied, but CoStar indicated that the property was 95% occupied in December 2015.

No adjustments are required for property rights conveyed, financing terms, conditions of sale, or market conditions. This property features a similar quality location in a good neighborhood of Midtown, in close proximity to mass transit quality. A small downward adjustment is necessary for the smaller size of this property relative to the subject. No material adjustment is necessary for age/quality/condition, as both buildings are renovated and in similar overall condition. An upward adjustment is necessary for occupancy/tenancy, as the building has many smaller tenants and faces significant near term rollover exposure. No adjustment is necessary for economic/other. Overall, the subject would command a higher price per square foot compared to this transaction.

SALE PRICE PER SQUARE FOOT CONCLUSION

A summary of the adjustments is presented below:

HSBC BUILDING | SALES COMPARISON APPROACH

OFFICE SALES ADJUSTMENT GRID

Comparable Number1 234567Subejct Transaction Type Sale Sale Sale Sale Sale Sale Sale Property Transaction Date Aug-16 Jun-16 Jun-16 Jun-16 May-16 Jan-16 Dec-15 -- Year Built 1929/2015 1968 1926/2012 1931/2004 1960 1985 1984/2004 1902-1984 NRA (SF) 2,280,150 647,086 249,703 305,849 1,749,000 1,638,637 304,138 865,339 Actual Sale Price $2,600,000,000 $565,000,000 $271,406,250 $275,000,000 $1,650,000,000 $1,899,037,256 $284,000,000 -- Price Per SF $1,140.28 $873.15 $1,086.92 $899.14 $943.40 $1,158.91 $933.79 -- Occupancy 98% 97% 91% 93% 100% 98% 95% 96% NOI Per SF $37.20 n/a $45.43 $35.07 $43.60 $48.91 $42.46 $42.75 OAR 3.26% n/a 4.18% 3.90% 4.62% 4.22% 4.55% -- Adj. Price Per SF $1,140.28 $873.15 $1,086.92 $899.14 $943.40 $1,158.91 $933.79 Property Rights Conveyed 0% 0% 0% 0% 0% 0% 0% Financing Terms 0% 0% 0% 0% 0% 0% 0% Conditions of Sale 0% 0% 0% 0% 0% 0% 0% Market Conditions (Time) 0% 0% 0% 0% 0% 0% 0% Subtotal - Price Per SF $1,140.28 $873.15 $1,086.92 $899.14 $943.40 $1,158.91 $933.79 Location -5% 5% 0% 5% -5% -5% 0% Size 5% 0% -5% -5% 5% 5% -5% Age/Quality/Condition 0% 5% -5% 5% 5% -10% 0% Occupancy/Tenancy -10% 5% 0% 10% 0% 0% 10% Economic/Other 0% 0% 0% 0% 0% -5% 0% Total Other Adjustments -10% 15% -10% 15% 5% -15% 5% Indicated Value Per SF $1,026.25 $1,004.12 $978.22 $1,034.01 $990.57 $985.08 $980.48 Compiled by CBRE

The comparables indicate an adjusted range of $978.22 to $1,034.01 per square foot, with an average of $999.82 per square foot. Based on the subject's locational, conditional, and economic comparisons to the transactions listed above, we have concluded to $1,000 per square foot.

SALES COMPARISON APPROACH CONCLUSION Our conclusion via the sales comparison approach is presented on the following table. It should be noted that we have included deductions for lease up costs, as detailed in the income approach section of this appraisal report.

SALES COMPARISON APPROACH

NRA (SF) X Value Per SF = Value 865,339 X $1,000.00 = $865,339,000

VALUE CONCLUSION Indicated Stabilized Value $865,339,000 Less: Base Building CapEx ($10,348,832) Value Indication $854,990,168 Rounded $855,000,000 Value Per SF $988.05

Compiled by CBRE

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

INCOME CAPITALIZATION APPROACH

The Income Capitalization Approach reflects the subject’s income-producing capabilities. This approach is based on the assumption that value is created by the expectation of benefits to be derived in the future. Specifically estimated is the amount an investor would be willing to pay to receive an income stream plus reversion value from a property over period of time. The two common valuation techniques associated with the Income Capitalization Approach are direct capitalization and the discounted cash flow (DCF) analysis.

A number of factors were considered in evaluating the appropriateness of using the direct capitalization method and/or the DCF technique. The DCF analysis was considered most appropriate as this more accurately account for the lease up costs and downtime associate with bringing the proposed development to stabilized occupancy. In addition, this factors in the future timing of rents and expense and is the methodology utilized by investors in the marketplace.

The discounted cash flow (DCF) analysis is a detailed analysis used when the future income is expected to be variant, usually as a result of lease obligations and/or anticipated changes in income and expenses. It is also particularly relevant when institutional buyers are the most likely purchasers of the subject because institutional buyers often place great weight on this analysis. The DCF analysis specifies the quantity, variability, timing, and duration of NOIs and cash flows. Selecting the proper yield rate (discount rate) is essential. CBRE, Inc. must consider the target yield sought by investors as well as yields derived from comparable sales and/or market information.

ESTIMATE OF MARKET RENT

Rent analysis involves both a study of market (comparable) rentals and the subject’s existing rents. Market rent is the rent that a property would most probably command in the open market; indicated by the current rents paid and asked for comparable space.

SUMMARY OF COMPARABLE OFFICE RENTALS

CBRE surveyed competitive properties and lease transactions for comparison to the subject. The selected comparables are summarized on the following page. We selected these properties based on their location, date signed, quality and condition of space, as well as functional utility of the building.

452 Fifth Avenue

A list of the comparables rent transactions utilized in conjunction with our analysis of the 452 Fifth Avenue component of the subject property is presented on the following page. The rentals utilized represent the best data available for comparison with the subject. They were selected from our research within other high quality Class A properties in the subject's competitive market area.

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

OFFICE RENT COMPARABLES Date Tenant Term Base Rent Tax & Op Exp Free Rent TI's Per SF Net Eff. Rent/SF

1221 Avenue of the Americas Rent Comp #1 Oct-16 Tokio Marine Manageent 5.6 $75.00 Over base 8.0 mos. $85.00 $72.12 21,449 SF 5.0 $81.00 (broker estimate) 15th floor 5.0 $87.00 15.6 $80.77 885 Third Avenue Rent Comp #2 Oct-16 Alden Global (Renewal) 5.0 $91.50 Over base 5.0 mos. $32.50 $88.97 13,854 SF 6.4 $98.00 (Renewal) 34th floor 11.4 $95.15 Tower 46 (55 West 46th Street) Rent Comp #3 Oct-16 Comcast Corp. 6.0 $105.00 Over base 12.0 mos. $100.00 $87.30 45,045 SF 4.0 $112.00 33rd-34th floors 10.0 $107.80

1745 Broadway Rent Comp #4 Sep-16 Penguin Random House 5.0 $83.00 Over base 0.0 mos. $20.00 $83.50 475,875 SF 5.0 $88.00 (Renewal) 2-16 & 19th floors 10.0 $85.50 Sep-16 Penguin Random House 5.8 $86.00 Over base 0.0 mos. $50.00 $89.79 127,775 SF 5.0 $93.00 (Renewal) 17-18, 21-23rd floors 5.0 $101.00 15.8 $92.95 10 East 53rd Street Rent Comp #5 Sep-16 Portage Advisors 5.0 $81.00 Over base 8.0 mos. $110.00 $59.00 5,407 SF 2.0 $86.00 (SLG Platinum pre-build) 18th floor 7.0 $82.43 Sep-16 Bridgepoint Capital 5.4 $101.00 Over base 5.0 mos. $110.00 $88.24 8,925 SF 4.0 $109.00 (SLG turnkey space) 28th floor 9.4 $104.40 Apr-16 Waterfront Capital 5.3 $126.50 Over base 3.0 mos. $110.00 $99.52 6,800 SF 0.0 $0.00 (SLG Platinum pre-build) 34th floor 5.3 $126.50 250 West 55th Street Rent Comp #6 Sep-16 Castle Hook Partners 6.0 $103.00 Over base 4.0 mos. $100.00 $80.61 7,617 SF 0.0 $0.00 (pre-built estimate) 32nd floor 6.0 $103.00 444 Madison Ave Rent Comp #7 Aug-16 Lincoln Intl. (expansion) 2.8 $75.00 Over base 0.0 mos. $0.00 $78.19 3,901 SF 5.0 $80.00 (2nd gen pre-built) 3rd floor 7.8 $78.19 Jul-16 Stella Point 4.3 $75.00 Over base 3.0 mos. $100.00 $63.03 5,455 SF 4.0 $80.00 (LL delivering built) 25th floor 8.3 $77.42 500 Park Avenue Rent Comp #8 Aug-16 Georgetown Co. 5.0 $86.50 Over base 12.0 mos. $100.00 $73.21 18,795 SF 5.0 $89.50 10th floor 2.0 $92.50 12.0 $88.75

437 Madison Avenue Rent Comp #9 Jul-16 Wiggin & Dana 5.0 $103.00 Over base 0.0 mos. $125.00 $102.67 15,616 SF 5.0 $111.00 (LL delivering built) 35th floor 5.0 $119.00 15.0 $111.00 75 Rockefeller Center Rent Comp #10 6/206 Merrill Lynch 5.0 $82.50 Over base 14.0 mos. $80.00 $76.75 122,418 SF 5.0 $88.50 2nd to 5th floor 5.0 $94.50 15.0 $88.50 3 Bryant Park Rent Comp #11 Jun-16 US Bank 5.0 $95.00 Over base 12.0 mos. $65.00 $85.75 68,636 SF 7.0 $102.00 13th & 15th Floors 12.0 $99.08

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

It is important to note that although the subject property is situated to the south of 42nd Street, given its views over the New York Public Library and Bryant as well as the high quality of the improvements at 452 Fifth Avenue, it is considered more competitive with building located north of 42nd Street. A map of the competitive properties is presented on the following page:

ANALYSIS OF COMPARABLE OFFICE RENTALS

We obtained recent lease comparables from 11 good quality office buildings within the surrounding competitive marketplace. The market comparables show that a difference in the rental rates can be attributed to the quality and condition of the buildings, its reputation, location as well as the floor they are located within a building. The starting base rental rates, from the lease comparables indicate a range from $75.00 to $126.50 per square foot, with an average of $91.93 per square foot. The leases were signed for terms that generally ranged between 5 and 16 years, with rental step-ups generally included at 5-year intervals. All the leases were signed on a partial gross basis by which the tenants assume their proportionate share of increases in operating expenses and real estate taxes over a base year amount. Examining only the annual average base rent, however, it is not an appropriate practice. The rents must be compared on an average effective basis by adjusting for variations in free rent and tenant improvements.

Effective rent adjusts the average annual base rent by the amount of free rent and tenant improvements. The annual average base rent is simply the aggregate base rent over the term of the lease, commencement date to termination date, divided by the number of years in the term. Free rent is adjusted for by adding only those base rent amounts stipulated to be paid by tenant between the

HSBC BUILDING | INCOME CAPITALIZATION APPROACH rent commencement date and the expiration date of the lease, i.e., after the free rent period. The resultant amount is divided by the full term that the tenant occupies the space.

When analyzed on an effective rent basis, the rents ranged from $59.00 to $102.67 per square foot on a modified gross basis, with an average of $82.59 per square foot. Free rent ranges from 0 to 14 months free, with the larger/longer term transactions indicating figures at the upper end of the range. Tenant improvements ranged from $0.00 to $125.00 per square foot, with an average of approximately $79.17 per square foot. The low end was for existing pre-built space (2nd generation).

The subject property represents a well located office building that has been well maintained and is in good condition. HSBC and its predecessor companies have maintained the building in good overall condition and the recently completed lobby renovations, elevator and HVAC work has improved upon what was previously built. All of the comparables included are Class A office properties and are considered to be in good to very good condition. However, moderate differences in age/condition have a lesser impact compared to locational attributes and market perception in terms of achievable rents. Among the above listed properties we have chosen the most similar comparables to the subject property in terms of location and quality of construction. The properties at the upper end of the range are generally located to the north of the subject in the core area of Midtown around the Plaza District and require downward locational adjustment.

Lower Tier (Floors 2-11)

For the base floors, the most comparable transactions were Comp #1 (1221 Avenue of the Americas) and Comp #7 (444 Madison Avenue). These transactions were both signed at $75 per square foot, for space in the lower tier of each building. The subject has property characteristics that place it in a similar range for these transactions, in the vicinity of $75 per square foot.

Mid-Rise Office (Floors 12-19)

For the mid-rise floors, the most comparable transactions were Comp #4 (1745 Broadway), Comp #5 (10 East 53rd St.) Comp #8 (500 Park Avenue), and Comp #10 (75 Rock). These transactions ranged between $82.50 and $86.50 per square foot, with an average of $83.80 per square foot. The subject has property characteristics that place it in the middle of the range for these transactions, in the vicinity of $85 per square foot.

High-Rise Office (Floors 20-27) & Tower (Floors 28-30)

For the high-rise floors and the tower floors, the most comparable transactions were Comp #3 (Tower 46), Comp #2 (90 Park Ave), Comp #5 (10 East 53rd St.), Comp #6 (250 West 55th Street), Comp #9 (437 Madison Ave) and Comp #11 (3 Bryant Park). These transactions ranged between $95.00 and $126.00 per square foot, with an average of $105.58 per square foot. For the high rise floors (20th to 27th flr.), a rent slightly below the average would be considered appropriate at $100 per

HSBC BUILDING | INCOME CAPITALIZATION APPROACH square foot, while the Tower floors would be in line with the average in the vicinity of $105 per square foot.

RECENT LEASING ACTIVITY

A summary of the recent leasing at the subject property is presented below:

RECENT LEASING SUMMARY Leased Lease Lease Scheduled Free Rent TI Tenant Floor Area Start Expiration Base Rent Concessions Allowance Varadero Capital 30 7,636 6/15 1/26 $102.00 11 months $120 Triangle Capital 30 7,054 9/15 1/26 $105.00 1 month $120 StormHarbour Securities LP 29 16,298 12/14 1/26 $97.00 14 months $120 Tilden Park Capital Management LP 28 16,140 11/13 10/24 $105.00 11 months $80 TriPointe Capital Partners 21 2,536 5/13 12/17 $85.00 2 months $0 KLS Diversified 22 16,428 2/13 12/22 $80.00 12 months $75

The most recent leases include Varadero Capital and Triangle Capital on the 30th floor and Stormharbour Securities LP for the 29th floor. These leases commenced between December 2014 and September of 2015 and had rents of $97 to $105 per square foot, with TI’s of approximately $120 per square foot in work/pre-built expense. Triangle’s space was pre-built, and thus there was little free rent given, while the other tenant spaces had 11 to 14 months.

The subject is in advanced negotiations with HSBC for a long term renewal (in excess of 10 years). We have modeled the under negotiation terms for the pending renewal transaction at the terms reported by property management. These terms are subject to a confidentiality agreement and the Client (intended user of this report) has requested that we not publish the actual terms within this document. The term sheet provided has been retained within our deal file and indicates rents that are within a reasonable range (slightly below) of our market rent conclusions for the premises involved. As such, the terms have been included in our analysis and DCF modeling. It is an extraordinary assumption of this report that the renewal terms are not materially different from those provided and retained within our deal file.

MARKET PARTICIPANTS

Discussions with market participants, including the prior leasing agents for the building indicated that rents in-line with the recent leasing activity would be appropriate for the building and that floors at the top of the building would likely achieve rents in excess of $100 per square foot, while lower floor spaces would likely be in the mid to upper $70’s per square foot. These figures corroborate our conclusions as listed below.

MARKET RENT CONCLUSION – 452 FIFTH AVENUE

Based on the comparables listed above and recent transactions at the subject we would conclude to office rents of $75 per square foot for the lower tier (floors 2-11) of the building, $85 per square foot

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

for the mid-rise (floors 12-19), $100 per square foot for the upper floors (20 to 27) and $105 per square foot for the tower floors on the 28th through 30th floors of the building.

MARKET RENT ESTIMATE – 1 WEST 39TH STREET

We have included additional lease comparables for 1 West 39th Street, as this is a class B structure with significantly lower achievable rental rates compared to the tower portion of the subject. A summary of the comparables utilized is presented on the following table, with additional information on each property included in the addenda to this report.

OFFICE RENT COMPARABLES - 1 West 39th Street Building Address Escalations Concessions Actual Operating Real Estate Free TI's per Date Tenant Term Base Rent Expenses Taxes Rent Sq. Ft. Eff Rent 25 West 45h Street Rent Comp #1 Oct-16 Tom James Company 5.5 $54.00 Annual Inc. Over base 6.0 mos. $50.00 $48.57 11,528 SF 5.0 $58.00 8th floor 10.5 $55.90 65 West 36th Street Rent Comp #2 Sep-16 Global BMU 5.3 $47.00 Over base Over base 3.0 mos. $10.00 $45.85 5,050 SF 5.0 $49.00 (paint carpet estimate) 4th floor 10.3 $47.98 355 Lexington Avenue Rent Comp #3 Sep-16 City Meals on Wheels 5.3 $50.00 Over base Over base 3.0 mos. $50.00 $46.10 8,996 SF 2.0 $53.75 (renewal) 3rd floor 3.0 $55.00 10.3 $52.20

389 Fifth Avenue Rent Comp #4 Aug-16 OK Originals 5.0 $47.00 Over base Over base 2.0 mos. $5.00 $44.43 5,951 SF 0.0 $0.00 (renewal) 8th floor 5.0 $47.00 441 Lexington Ave Rent Comp #5 Aug-16 JW Michaels 5.0 $53.00 Over base Over base 2.0 mos. $50.00 $41.23 6,743 SF 0.0 $0.00 (LL pre-built) 11th floor 5.0 $53.00

263 West 38th Street Rent Comp #5 Jul-16 WayUp Inc. 5.1 $48.00 Over base Over base 1.0 mos. $0.00 $47.21 7,000 SF 0.0 $0.00 (As Is) 16th floor 5.1 $48.00

CBRE

The comparables surveyed in conjunction with the 1 West 39th Street component of the subject property indicated a range between $47.00 and $54.00 per SF, with an average of $49.83 per SF. Based on the comparables listed above and in consideration of the subject’s size, frontage and quality/condition, a rent slightly below the average was considered appropriate and is concluded at $50 per square foot.

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MARKET PARTICIPANTS

Discussions with market participants indicated that achievable rents for 1 West 39th Street would be in the range of $50 per square foot for a large user, which is supportive of our conclusions from the previously listed rent comparables.

MARKET RENT ESTIMATE

Base Rental Rate

The estimate of base rental rates is shown in the following chart.

BASE RENTAL RATES Office 452 5th Office 452 5th Office 452 5th Office 452 5th Category Office 1W39th (2-11) (12-19) (20-27) (28-30) Subject's Quoted Terms N/A N/A N/A N/A N/A Rent Comparable Data $40-$50 - - - - $60 to $135 per square foot - - - - CBRE Estimate $50.00 $75.00 $85.00 $100.00 $105.00 Compiled by CBRE

Our conclusions are reasonable based on the comparables surveyed and our discussions with local market professionals.

Concessions

The estimate of concessions is shown in the following chart.

CONCESSIONS Office 452 5th Office 452 5th Office 452 5th Office 452 5th Category Office 1W39th (2-11) (12-19) (20-27) (28-30) Subject's Quoted Terms N/A N/A N/A N/A N/A Rent Comparable Data 0 to 6 mo.'s - - - - 2 to 12 months - - - - CBRE Estimate 10/5 mo.'s 10/5 mo.'s 10/5 mo.'s 10/5 mo.'s 10/5 mo.'s Compiled by CBRE

We have modeled that rent concessions 10 months for all new leasing transactions 5 months for all renewal transactions, which is supported by our rent conclusions.

Reimbursements

The estimate of reimbursements is shown in the following chart.

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

REIMBURSEMENTS Office 452 5th Office 452 5th Office 452 5th Office 452 5th Category Office 1W39th (2-11) (12-19) (20-27) (28-30) Subject's Quoted Terms Mod. Gross Mod. Gross Mod. Gross Mod. Gross Mod. Gross Rent Comparable Data Mod. Gross Mod. Gross Mod. Gross Mod. Gross Mod. Gross CBRE Estimate Mod. Gross Mod. Gross Mod. Gross Mod. Gross Mod. Gross Compiled by CBRE

Leases in the subject marketplace are typically structured whereby the tenants reimburse the landlord for operating expenses and real estate taxes in excess of base year amounts. New leasing at the subject property is assumed to pay tenant electric based on submetered floor/space, with tenant paying their pro-rata share.

Escalations

At the present time, escalations in the range of 10% during the 6th year of a 10-year term are common in the local market and have been included in our market leasing terms of our analysis.

Tenant Improvements

The estimate of tenant improvements is shown in the following chart.

TENANT IMPROVEMENTS Office 452 5th Office 452 5th Office 452 5th Office 452 5th Category Office 1W39th (2-11) (12-19) (20-27) (28-30) Subject's Quoted Terms N/A N/A N/A N/A N/A Rent Comparable Data $0 to $50/SF - - - - $45 to $100 per SF - - - - CBRE Estimate New Tenants $40.00 $75.00 $75.00 $75.00 $75.00 Renewals $20.00 $30.00 $30.00 $30.00 $30.00 Compiled by CBRE

We have modeled higher TI of $75 per square foot for all new leasing activity in 452 Fifth Avenue and $30 per square foot on renewals. For 1 West 39th Street we have modeled lower TI’s $40 per square foot for new deals and $20 per square foot for renewals.

Lease Term

The estimate of lease terms is shown in the following chart.

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

LEASE TERM Office 452 5th Office 452 5th Office 452 5th Office 452 5th Category Office 1W39th (2-11) (12-19) (20-27) (28-30) Subject's Quoted Terms 10 YRS 10 YRS 10 YRS 10 YRS 10 YRS Rent Comparable Data 10 YRS 10 YRS 10 YRS 10 YRS 10 YRS CBRE Estimate 10 YRS 10 YRS 10 YRS 10 YRS 10 YRS Compiled by CBRE

OFFICE RENT CONCLUSIONS

The following chart shows the market rent conclusions for the subject:

MARKET RENT CONCLUSIONS Office 452 5th Office 452 Office 452 Office 452 Category Office 1W39th (2-11) 5th (12-19) 5th (20-27) 5th (28-30) NRA (SF) 139,203 338,708 111,872 130,715 39,492 Percent of Total SF 16.1% 39.1% 12.9% 15.1% 4.6% Market Rent ($/SF/Yr.) $45.00 $75.00 $85.00 $100.00 $105.00 Concessions 10/5 mo.'s 10/5 mo.'s Reimbursements Mod. Gross Mod. Gross Mod. Gross Mod. Gross Mod. Gross Escalation 10% YR 6 10% YR 6 10% YR 6 10% YR 6 10% YR 6 Tenant Improvements (New Tenants) $40.00 $75.00 Tenant Improvements (Renewals) $20.00 $30.00 Average Lease Term 10 Years 10 Years 10 Years 10 Years 10 Years Effective Rent ($/SF/Yr.) $39.50 $65.00 $69.67 $89.17 $94.00 Compiled by CBRE

RETAIL MARKET RENT

The 452 Fifth Avenue portion of the subject property has three retail spaces, one on the north portion of Fifth Avenue that is leased long term to HSBC, one on the southern portion of Fifth Ave that is leased to Staples and mid-block space is leased to Panera Bread.

A summary of comparables utilized in conjunction with our market rent estimates is presented below:

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SUMMARY OF RETAIL LEASE COMPARABLES Comp Address Term Space Tenant Date Square Feet Base Rent PSF Comments No. Tenant (Years) Location

1 1407 Broadway Wichcraft Aug-16 10 Grade 2,949 $390.37 RE Tax over BY 38th Street Juice Generation Jun-16 10 Grade 1,214 $275.00 RE Tax over BY

2 552 Seventh Ave New Star Café Mar-16 10 Grade 3,500 $300.00 RE Tax over BY 39th & 40th Street 3 1333 Broadway Rituals Jul-15 10 Grade 902 $426.00 Taxes over BY 36th Street 4 1180 Ave of Amer. Chick-fil-A Feb-16 10 Grade 2,792 $459.49 RE Tax over BY 55th Street LL 2,666 5 1450 Broadway Chopt Dec-15 10 Grade 1,200 $416.67 RE Tax over BY SEC 41st Street LL 2,500 6 1460 Broadway Footlocker May-15 15 LL 6,847 $90.00 Taxes over BY NEC 41st Street Grade 8,728 $650.00 +$2mm 2nd 9,960 $125.00 for signage 3rd 10,558 $110.00

7 1440 Broadway CVS Pharmacy Apr-15 15 Grade 7,500 $375.00 Taxes over BY NEC 40th Street 2nd 14,000 $65.00 Compiled by CBRE, Inc.

The location of the subject property to the south of 42nd Street reduces demand for the space as compared to locations more within the core of Midtown. Based on the comparables listed above as well as the recent leasing at the subject property, we have concluded to a market rent of $350 per square foot for the mid-block space and $450 per square foot for the HSBC corner space and $400 for the Stables corner space. For large mezzanine spaces, rents are generally in the range of 20%- 25% of what is achievable at grade, which results in a market rent of approximately $75 per square foot (based on the $400 per square foot conclusion for Staples 41st Street space. These figures blend into a market rent of $150.64 per square foot as shown below:

STAPLES MARKET RENT CONCLUSIONS Sq. Ft. Rent per SF Annual Rent Grade Level 7,108 $400.00 $2,843,200 Retail Mezz 10,549 $75.00 $791,175 Total/Average 17,657 $205.83 $3,634,375 CBRE

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

For the retail bank branch occupied by HSBC we have concluded to a market rent of $450 per square foot. The basement level retail space is also well laid out for retail use and improved with banking quality finishes. As such, it would achieve a premium over typical lower level retail spaces and is concluded at $55 per square foot. Storage spaces are included at $25 per square foot, with the exception of the secure storage in the sub cellar which also has a $50 per square foot market rent. A summary of the retail market rent conclusions is presented on the following table:

RETAIL MARKET RENT CONCLUSIONS Basement Fifth Ave Fifth Ave Fifth Ave Retail & Corner 39th St. Corner 40th St. Midblock Secure Storage Category (Staples) (HSBC Bank) (Panera) Storage Space Market Rent ($/SF/Yr.) $205.83 $450.00 $350.00 $55.00 $25.00 Concessions 2 months 2 months 2 months 2 months 6/2 mo'nths Reimbursements BY RE Tax BY RE Tax BY RE Tax BY RE Tax None Annual Escalation 3% Annual 3% Annual 3% Annual 3% Annual 3% Annual TI's $/SF (New Tenants) $10.00 $10.00 $10.00 $10.00 None TI's $/SF (Renewals) $0.00 $0.00 $0.00 $0.00 None Average Lease Term 10 Years 10 Years 10 Years 10 Years 10 Years Compiled by CBRE

Storage space is provided free rent based on the component it is assumed to be leased with (office or retail).

HSBC

HSBC leases all office space on the 2nd through 11th floor of 452 Fifth Avenue as well as all of the office space within 1 West 39th Street on a long term basis, with an expiration date of April 30, 2020 and an extension through 2035 a likely outcome of current negotiations and an extraordinary assumption of this report (although the terms are essentially in-line with market terms). Originally the tenant also had additional short term space on the 12th to 16th floors of the building, however that space has since been leased. The tenant has options that entitle them to remain in the long term space at a discount of 5% off market rents for two additional 10-year terms.

Headquartered in London, HSBC is one of the largest banking and financial services organizations in the world. HSBC's international network comprises around 7,200 offices in over 80 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With listings on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by around 220,000 shareholders in 132 countries and territories. The shares are traded on the New York Stock Exchange in the form of American Depositary Receipts. Through an international network, HSBC provides a comprehensive range of financial services to around 89 million customers: personal financial services; commercial banking; corporate, investment banking and markets; private banking; and other activities. They are considered a high quality tenant and are rated Aa2 by Moody’s, A+ by Standard & Poors, AA by Fitch and AA by DBRS.

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A summary of the terms of the contractual terms of the long term office space lease (floors 1-11, plus entire 1 West 39th Street) is presented on the following table:

HSBC LONG TERM SPACE (OFFICE LEASE)

BUILDING 2 - 1 West 39th St Lease Yr1 Lease Yr2 Lease Yr3 Lease Yr4 Lease Yr5 Lease Yr6 Lease Yr7 Lease Yr8 Lease Yr9 Lease Yr10 Floor SF FY End 3/11 FY End 3/12 FY End 3/13 FY End 3/14 FY End 3/15 FY End 3/16 FY End 3/17 FY End 3/18 FY End 3/19 FY End 3/20 Cellar 1,052 $25,560 $25,560 $25,560 $25,560 $25,560 $27,901 $27,901 $27,901 $27,901 $27,901 2 13,225 $439,023 $439,023 $439,023 $439,023 $439,023 $480,219 $480,219 $480,219 $480,219 $480,219 3 13,247 $439,753 $439,753 $439,753 $439,753 $439,753 $481,018 $481,018 $481,018 $481,018 $481,018 4 13,197 $438,093 $438,093 $438,093 $438,093 $438,093 $479,202 $479,202 $479,202 $479,202 $479,202 5 13,185 $437,695 $437,695 $437,695 $437,695 $437,695 $478,766 $478,766 $478,766 $478,766 $478,766 6 13,241 $439,554 $439,554 $439,554 $439,554 $439,554 $480,800 $480,800 $480,800 $480,800 $480,800 7 12,455 $413,462 $413,462 $413,462 $413,462 $413,462 $452,259 $452,259 $452,259 $452,259 $452,259 8 12,399 $411,603 $411,603 $411,603 $411,603 $411,603 $450,226 $450,226 $450,226 $450,226 $450,226 9 12,390 $411,304 $411,304 $411,304 $411,304 $411,304 $449,899 $449,899 $449,899 $449,899 $449,899 10 12,388 $411,237 $411,237 $411,237 $411,237 $411,237 $449,826 $449,826 $449,826 $449,826 $449,826 11 11,760 $390,390 $390,390 $390,390 $390,390 $390,390 $427,023 $427,023 $427,023 $427,023 $427,023 12 11,716 $388,929 $388,929 $388,929 $388,929 $388,929 $425,425 $425,425 $425,425 $425,425 $425,425 Total 140,255 $4,646,603 $4,646,603 $4,646,603 $4,646,603 $4,646,603 $5,082,564 $5,082,564 $5,082,564 $5,082,564 $5,082,564 Office Only 139,203 $4,621,043 $4,621,043 $4,621,043 $4,621,043 $4,621,043 $5,054,663 $5,054,663 $5,054,663 $5,054,663 $5,054,663 $33.20 SF $33.20 SF $33.20 SF $33.20 SF $33.20 SF $36.31 SF $36.31 SF $36.31 SF $36.31 SF $36.31 SF BUILDING 1 - 452 Fifth Ave Floor SF Lease Yr1 Lease Yr2 Lease Yr3 Lease Yr4 Lease Yr5 Lease Yr6 Lease Yr7 Lease Yr8 Lease Yr9 Lease Yr10 Sub C1 9,359 $227,424 $227,424 $227,424 $227,424 $227,424 $248,201 $248,201 $248,201 $248,201 $248,201 Cellar 1,081 $26,264 $26,264 $26,264 $26,264 $26,264 $28,670 $28,670 $28,670 $28,670 $28,670 2 7,025 $326,989 $326,989 $326,989 $326,989 $326,989 $358,250 $358,250 $358,250 $358,250 $358,250 3 41,132 $1,914,548 $1,914,548 $1,914,548 $1,914,548 $1,914,548 $2,097,585 $2,097,585 $2,097,585 $2,097,585 $2,097,585 4 41,460 $1,929,825 $1,929,825 $1,929,825 $1,929,825 $1,929,825 $2,114,312 $2,114,312 $2,114,312 $2,114,312 $2,114,312 5 41,323 $1,923,438 $1,923,438 $1,923,438 $1,923,438 $1,923,438 $2,107,326 $2,107,326 $2,107,326 $2,107,326 $2,107,326 6 41,247 $2,103,450 $2,103,450 $2,103,450 $2,103,450 $2,103,450 $2,305,354 $2,305,354 $2,305,354 $2,305,354 $2,305,354 7 40,686 $2,074,841 $2,074,841 $2,074,841 $2,074,841 $2,074,841 $2,273,999 $2,273,999 $2,273,999 $2,273,999 $2,273,999 8 41,604 $2,121,656 $2,121,656 $2,121,656 $2,121,656 $2,121,656 $2,325,307 $2,325,307 $2,325,307 $2,325,307 $2,325,307 9 29,448 $1,632,787 $1,632,787 $1,632,787 $1,632,787 $1,632,787 $1,790,039 $1,790,039 $1,790,039 $1,790,039 $1,790,039 10 37,845 $2,098,370 $2,098,370 $2,098,370 $2,098,370 $2,098,370 $2,300,463 $2,300,463 $2,300,463 $2,300,463 $2,300,463 11 16,938 $939,152 $939,152 $939,152 $939,152 $939,152 $1,029,601 $1,029,601 $1,029,601 $1,029,601 $1,029,601 Total 349,148 $17,318,744 $17,318,744 $17,318,744 $17,318,744 $17,318,744 $18,979,107 $18,979,107 $18,979,107 $18,979,107 $18,979,107 Office Only 338,708 $17,065,056 $17,065,056 $17,065,056 $17,065,056 $17,065,056 $18,702,236 $18,702,236 $18,702,236 $18,702,236 $18,702,236 $50.38 SF $50.38 SF $50.38 SF $50.38 SF $50.38 SF $55.22 SF $55.22 SF $55.22 SF $55.22 SF $55.22 SF TOTAL HSBC LONG TERM OFFICE SPACE SF FY End 3/11 FY End 3/12 FY End 3/13 FY End 3/14 FY End 3/15 FY End 3/16 FY End 3/17 FY End 3/18 FY End 3/19 FY End 3/20 HSBC OFFICE 489,403 $21,965,347 $21,965,347 $21,965,347 $21,965,347 $21,965,347 $24,061,671 $24,061,671 $24,061,671 $24,061,671 $24,061,671 $44.88 SF $44.88 SF $44.88 SF $44.88 SF $44.88 SF $49.17 SF $49.17 SF $49.17 SF $49.17 SF $49.17 SF Source: HSBC Office Lease Agreement; Compiled by CBRE

The base floors of both subject buildings contain significant infrastructure and build-out (trading floors, data center, etc.) that make this space highly functional for HSBC occupancy, which in conjunction with the retail bank branch and secure storage areas make it highly likely that the tenant will exercise their option to remain within the space beyond the 10-year term listed above. Within our analysis we have assumed that they will exercise the pending long term lease extension (in excess of 10 years) as described in the recent leases for all premises.

HSBC also leases 7,667 of grade level space, 18,128 square feet of below grade retail and storage space of 1,671 square feet. In addition they lease 31,095 square feet of secure storage space at a below grade level.

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

RENT ROLL ANALYSIS

The subject’s rent roll is illustrated as follows:

RENTROLL SUMMARY Month One Lease Lease Scheduled Absorption & Free Rent Potential PGI Tenant Suite Occupied Area Start Expiration Base Rent Turnover Vacancy Concessions Gross Income Per SF Vacant Stge - 1W39th 00001Stg 4,139 9/01/21 8/31/31 103,475 $103,475 $25.00 HSBC - Retail Storage 00001Stg 1,671 4/01/10 4/30/20 $40,898 $40,898 $24.48 HSBC - Retail Branch 1 7,667 4/01/10 4/30/20 $1,827,721 $1,827,721 $238.39 HSBC - Retail Cellar 0001C 18,127 4/01/10 4/30/20 $775,610 $775,610 $42.79 HSBC - 1W39 (2-12) 001W39 139,203 4/01/10 4/30/20 $5,054,663 $5,054,663 $36.31 HSBC - 1W39 (cellar) 001W39 1,052 4/01/10 4/30/20 $27,901 $27,901 $26.52 HSBC - 452 Fifth (2-11) 002-11 338,708 4/01/10 4/30/20 $18,702,236 $18,702,236 $55.22 RW Pressprich 12 15,865 2/01/13 1/31/23 $1,078,820 $1,078,820 $68.00 RW Pressprich 014a 6,498 2/01/13 1/31/23 $467,856 $467,856 $72.00 Baker & McKenzie 014b 8,127 2/01/12 1/31/28 $365,715 $365,715 $45.00 Baker & McKenzie 15 16,263 2/01/12 1/31/28 $1,105,884 $1,105,884 $68.00 Baker & McKenzie 16 16,263 2/01/12 1/31/28 $1,105,884 $1,105,884 $68.00 Baker & McKenzie 17 16,267 2/01/12 1/31/28 $1,106,156 $1,106,156 $68.00 Baker & McKenzie 18 16,275 2/01/12 1/31/28 $1,106,700 $1,106,700 $68.00 Baker & McKenzie 19 16,314 2/01/12 1/31/28 $1,109,352 $1,109,352 $68.00 Baker & McKenzie 20 16,294 2/01/12 1/31/28 $1,107,992 $1,107,992 $68.00 Wood Mackenzie 021a 10,338 5/01/12 12/31/17 $899,406 $899,406 $87.00 TriPointe Capital Partn 021b 2,536 5/01/13 12/31/17 $215,560 $215,560 $85.00 452 Fifth Owners LLC / 021c 3,554 6/01/12 12/31/17 $303,291 $303,291 $85.34 KLS Diversified 22 16,428 2/01/13 12/31/22 $1,314,240 $1,314,240 $80.00 VTB Capital 23 16,428 12/01/11 9/30/22 $1,429,236 $1,429,236 $87.00 NCH Capital 24 16,428 9/01/12 12/31/27 $1,445,664 $1,445,664 $88.00 Man Group 25 16,288 9/01/11 7/31/22 $1,360,048 $1,360,048 $83.50 Man Group 26 16,291 9/01/11 7/31/22 $1,360,298 $1,360,298 $83.50 Man Group 27 16,130 9/01/11 7/31/22 $1,346,855 $1,346,855 $83.50 Tilden Park Capital Man 28 16,140 11/01/13 9/30/24 $1,694,700 $1,694,700 $105.00 Stormharbour Securities 29 16,298 12/01/14 1/31/26 $1,580,906 $1,580,906 $97.00 Varadero Capital 30 7,636 6/01/15 1/31/26 $778,872 $778,872 $102.00 Triangle Capital 030B 7,054 9/01/15 1/31/26 $740,670 $740,670 $105.00 PANERA BREAD 452 R-1 5,865 11/01/11 5/31/27 $1,054,500 $1,054,500 $179.80 STAPLES 452 R-2 17,657 12/01/11 12/31/26 $2,054,798 $2,054,798 $116.37 HSBC - 452 (Cellar) H00 Bsmt 10,440 4/01/10 4/30/20 $276,871 $276,871 $26.52 HSBC - VLT Storage SubC1 11,825 4/01/10 4/30/20 $558,450 $558,450 $47.23 HSBC - VLT Storage SubC2 19,270 4/01/10 4/30/20 $910,050 $910,050 $47.23 Total Amount Per Year 865,339 ______$54,307,803 $103,475 $0 $54,411,278 $62.88 Source: Rentroll * HSBC Option term not shown, would be through 2035, Baker & McKenzie expansion in 2018 not shown

The rentroll includes numerous high quality tenants, reducing the risk associated with the current tenancy compared to typical Manhattan buildings.

Lease Expiration Schedule

The subject’s scheduled lease expiration for the holding period is shown below. It should be noted that although we have assumed that HSBC will exercise their renewal option on their long term space, we have included the potential rollover to show the impact that this tenant would have on the long term performance of the building and the building’s risk profile.

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

LEASE EXPIRATION SCHEDULE Year Ending Sq. Ft. % of Total Year 1 Sep-17 0 0.00% Year 2 Sep-18 16,428 1.90% Year 3 Sep-19 0 0.00% Year 4 Sep-20 0 0.00% Year 5 Sep-21 65,137 7.53% Year 6 Sep-22 38,791 4.48% Year 7 Sep-23 16,140 1.87% Year 8 Sep-24 0 0.00% Year 9 Sep-25 30,988 3.58% Year 10 Sep-26 23,522 2.72% Year 11 Sep-27 138,659 16.02% Year 12 Sep-28 0 0.00% Year 13 Sep-29 0 0.00% Compiled by CBRE

The rollover in year 4 of our cash associated with HSBC’s initial lease expiration has been excluded as our analysis assumes they exercise a long term (over 10 years) renewal at the terms presented. The rollover in year 5-6 is from Man Group, VTB Capital, KLS Diversified, and RW Pressprich expirations. The overall rollover profile of the building is very good, with minimal near to medium term exposure.

OPERATING HISTORY

The following table presents the available operating data for the subject.

OPERATING HISTORY

Year 2015 2016 Reforecast 2017 Budget (Draft) CBRE DCF Year 1 Total $/SF Total $/SF Total $/SF Total $/SF Income Rental Income $50,140,763 $57.94 $53,833,663 $62.21 $54,556,237 $63.05 $54,307,803 $62.76 Misc Revenue 3,518,754 4.07 2,981,953 3.45 2,837,210 3.28 3,200,000 3.70 RE Tax Reimb 2,718,565 3.14 3,473,415 4.01 4,113,742 4.75 4,115,889 4.76 Op Exp Reimb 3,214,698 3.71 3,096,669 3.58 3,287,461 3.80 2,969,098 3.43 Tenant Elec Reimb 1,703,394 1.97 1,634,100 1.89 1,403,000 1.62 1,416,955 1.64 V & CL - - - - - (1,023,533) (1.18) Effective Gross Income $61,296,173 $70.83 $65,019,800 $75.14 $66,197,650 $76.50 $64,986,212 $75.10 Expenses Real Estate Taxes $11,000,750 $12.71 $11,728,990 $13.55 $12,553,613 $14.51 $12,413,065 $14.34 Property Insurance 516,715 0.60 518,646 0.60 533,236 0.62 519,203 0.60 Utilities 2,285,991 2.64 1,766,835 2.04 1,902,449 2.20 1,947,012 2.25 Tenant Electric 1,703,394 1.97 1,634,100 1.89 1,403,000 1.62 1,397,762 1.62 General Operating 1,274,295 1.47 1,207,897 1.40 1,779,375 2.06 1,211,475 1.40 Repairs & Maintenance 3,835,402 4.43 3,638,562 4.20 3,826,187 4.42 3,677,691 4.25 Security 1,889,430 2.18 1,940,985 2.24 1,986,604 2.30 1,947,013 2.25 Cleaning 2,592,532 3.00 2,466,743 2.85 2,540,422 2.94 2,482,480 2.87 Management Fee 279,996 0.32 279,997 0.32 280,000 0.32 487,397 0.56 Other-Non Recoverable 1,537,003 1.78 1,427,266 1.65 932,820 1.08 900,000 1.04 Operating Expenses $26,915,508 $31.10 $26,610,021 $30.75 $27,737,706 $32.05 $26,983,098 $31.18 Net Operating Income $34,380,666 $39.73 $38,409,779 $44.39 $38,459,944 $44.44 $38,003,114 $43.92

Source: Property Management

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

POTENTIAL RENTAL INCOME CONCLUSION

Within this analysis, potential rental income is estimated based upon the actual income in-place with forward looking market rental rates for vacant space over the next twelve months. This method of calculating rental income is most prevalent in the local market and is consistent with the method used to derive overall capitalization rates from the comparable sales data.

Our estimate of Potential Rental Income is shown below along with management’s actual 2015 & 2016 reforecast and the 2017 budget.

POTENTIAL RENTAL INCOME Year Total $/SF 2015 $50,140,763 $57.94 2016 Reforecast $53,833,663 $62.21 2017 Budget (Draft) $54,556,237 $63.05 CBRE Estimate - DCF Year 1 $54,307,803 $62.76 CBRE Estimate - Stabilized Direct Cap $54,411,278 $62.88 CBRE

Our estimate is consistent with management’s projections for the operations of the subject property. In our Stabilized Direct Capitalization we have included additional revenue from leasing of the remaining vacant space at market levels as well as crediting for free rent periods for the executed transactions.

VACANCY & COLLECTION LOSS

The subject property is currently 99.5% occupied by a high quality roster of tenants, including HSBC, Baker McKenzie, Mann Group and Staples. We anticipate that one vacant space remaining will lease-up per the schedule listed on the rent roll. In the discounted cash flow analysis, vacancy is established based upon turnover of tenancy by establishing a downtime between leases in the Argus model in conjunction with a 2.0% base vacancy allowance. We have estimated downtime between leases at 6 months. Based on our lease-up projections, the length of the existing leases and the projected execution of the HSBC renewal option, the building is fully occupied for most of the near term future. We have also included the 2.0% vacancy factor in our Direct Capitalization, a figure that is generally supported by stabilized vacancy levels for the marketplace as presented in the market analysis section of this report.

In addition, it is necessary to take into consideration some type of credit loss. Typically, credit loss ranges from 1% to 3% depending upon the quality and creditworthiness of the tenancy. We estimate that this property will continue to attract good quality tenants and a long term credit-loss figure at the lower end of the range is considered appropriate at 1.0%. Therefore, the combined stabilized average annual vacancy/credit loss equates to 3.0% percent of effective gross income.

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

MISCELLANEOUS INCOME

Other income is supplemental to that derived from leasing of the improvements. This includes categories such as tenant service revenue and after hour utility charges. The subject’s ancillary income is detailed as follows:

MISC REVENUE Year Total $/SF 2015 $3,518,754 $4.07 2016 Reforecast $2,981,953 $3.45 2017 Budget (Draft) $2,837,210 $3.28 CBRE Estimate - DCF Year 1 $3,200,000 $3.70 CBRE Estimate - Stabilized Direct Cap $3,200,000 $3.70 CBRE

Our estimate is based on the current budget as well as estimate for consumption as tenants move into the building. The main component of this is overtime HVAC although other tenant service revenues are included.

EXPENSE REIMBURSEMENTS

The subject’s HSBC leases were signed on a base year structure whereby the tenant reimburses the owner for a pro rata share of increases in Operating Expenses and real estate taxes over a base-year stop. The subject’s real estate tax expense reimbursement revenue is detailed as follows:

RE TAX REIMB Year Total $/SF 2015 $2,718,565 $3.14 2016 Reforecast $3,473,415 $4.01 2017 Budget (Draft) $4,113,742 $4.75 CBRE Estimate - DCF Year 1 $4,115,889 $4.76 CBRE Estimate - Stabilized Direct Cap $4,115,889 $4.76 CBRE

The subject’s operating expense reimbursement revenue is detailed as follows.

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

OP EXP REIMB Year Total $/SF 2015 $3,214,698 $3.71 2016 Reforecast $3,096,669 $3.58 2017 Budget (Draft) $3,287,461 $3.80 CBRE Estimate - DCF Year 1 $2,969,098 $3.43 CBRE Estimate - Stabilized Direct Cap $2,969,098 $3.43 CBRE

Our reimbursements differ in that we have modeled differences in operating expense projections, which flow through via the modified gross lease structure.

TENANT ELEC REIMB Year Total $/SF 2015 $1,703,394 $1.97 2016 Reforecast $1,634,100 $1.89 2017 Budget (Draft) $1,403,000 $1.62 CBRE Estimate - DCF Year 1 $1,416,955 $1.64 CBRE Estimate - Stabilized Direct Cap $1,416,955 $1.64 CBRE

EFFECTIVE GROSS INCOME

The subject’s effective gross income is detailed as follows:

EFFECTIVE GROSS INCOME Year Total $/SF 2015 $61,296,173 $70.83 2016 Reforecast $65,019,800 $75.14 2017 Budget (Draft) $66,197,650 $76.50 CBRE Estimate - DCF Year 1 $64,986,212 $75.10 CBRE Estimate - Stabilized Direct Cap $64,129,823 $74.11 CBRE

The difference in EGI result from the previously discussed differential in operating expense reimbursements, differences in lease-up and our inclusion of a market oriented vacancy and collection loss allowance.

OPERATING EXPENSE ANALYSIS

The following chart summarizes expenses obtained from comparable properties.

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

MIDTOWN MANHATTAN OPERATING EXPENSE COMPARABLES

Comparable Number Midtown Class A Midtown Class A Midtown Class A SUBJECT PROPERTY Location Midtown Midtown Midtown CBRE - DCF NRA (SF) 475,000 500,000 907,427 Year 1 Expense Year 2016 Budget 2015 Budget 2016 Budget FY Ending 12/31/15 Effective Gross Income $64.06 $59.36 $71.91 $75.10 Expenses $/SF $/SF $/SF $/SF

Real Estate Taxes $15.82 $14.87 $12.02 $14.34 Property Insurance 0.40 0.39 0.24 0.60 Utilities 3.51 3.76 3.09 2.25 Tenant Electric 1.58 3.78 1.62 General Operating 1.62 1.32 0.83 1.40 Repairs & Maintenance 3.19 2.99 2.93 4.25 Security 1.34 1.39 0.66 2.25 Cleaning 3.45 3.31 3.72 2.87 Management Fee 0.62 0.85 0.72 0.56 (as a % of EGI) 1.0% 1.43% 1.0% 0.8% Other-Non Recoverable 0.61 0.17 1.12 1.04 Operating Expenses $30.56 $30.63 $29.11 $31.18 Operating Expense Ratio 47.7% 51.6% 40.5% 41.5% Operating Expenses - No RE Taxes $14.74 $15.76 $17.09 $16.84 Source: Actual Operating Statements

The following subsections represent the analysis for the pro forma estimate of each category of the subject’s stabilized expenses.

Real Estate Taxes

The real estate taxes for the subject were previously discussed. The subject’s expense is detailed as follows:

REAL ESTATE TAXES Year Total $/SF 2015 $11,000,750 $12.71 2016 Reforecast $11,728,990 $13.55 2017 Budget (Draft) $12,553,613 $14.51 Expense Comparable 1 N/A $15.82 Expense Comparable 2 N/A $14.87 Expense Comparable 3 N/A $12.02 CBRE Estimate - DCF Year 1 $12,413,065 $14.34 CBRE Estimate - Stabilized Direct Cap $12,413,065 $14.34

CBRE

Property Insurance

The subject’s insurance expense is detailed as follows:

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

PROPERTY INSURANCE Year Total $/SF 2015 $516,715 $0.60 2016 Reforecast $518,646 $0.60 2017 Budget (Draft) $533,236 $0.62 Expense Comparable 1 N/A $0.40 Expense Comparable 2 N/A $0.39 Expense Comparable 3 N/A $0.24 CBRE Estimate $519,203 $0.60 CBRE

The subject expenses are above the range of the comparables, however as this is the actual expense incurred, we have modeled similar operations.

Utilities/Tenant Electric

The subject’s common area utility expense (and tenant electric) is detailed as follow:

UTILITIES Year Total $/SF 2015 $2,285,991 $2.64 2016 Reforecast $1,766,835 $2.04 2017 Budget (Draft) $1,902,449 $2.20 Expense Comparable 1 N/A $3.51 Expense Comparable 2 N/A $3.76 Expense Comparable 3 N/A $3.09 CBRE Estimate $1,947,012 $2.25 CBRE

The subject’s tenant electric expense is detailed on the following table:

TENANT ELECTRIC Year Total $/SF 2015 $1,703,394 $1.97 2016 Reforecast $1,634,100 $1.89 2017 Budget (Draft) $1,403,000 $1.62 Expense Comparable 1 N/A $0.00 Expense Comparable 2 N/A $1.58 Expense Comparable 3 N/A $3.78 CBRE Estimate $1,397,762 $1.62 CBRE

The tenant electric expense at the subject property is estimated at $2.25 per square foot of occupied office area. This is reasonable based on the historical operations of the subject property. It should be

HSBC BUILDING | INCOME CAPITALIZATION APPROACH noted that these costs are fully passed through to the tenants and thus fluctuations will have minimal impact on value.

General Operating

General operating expenses typically include all payroll and payroll related items for all directly- employed administrative personnel, secretaries, and bookkeepers. This expense category also typically includes administrative expenses such as office expenses pertaining to the operation of the building, telephone, supplies, furniture, temporary help, etc. The subject’s expense is detailed as follows:

GENERAL OPERATING Year Total $/SF 2015 $1,274,295 $1.47 2016 Reforecast $1,207,897 $1.40 2017 Budget (Draft) $1,779,375 $2.06 Expense Comparable 1 N/A $1.62 Expense Comparable 2 N/A $1.32 Expense Comparable 3 N/A $0.83 CBRE Estimate $1,211,475 $1.40 CBRE

Our estimate is reasonable based on subject’s actual and budgeted expenses.

Repairs and Maintenance

Repairs and maintenance expenses typically include all payroll and payroll related items for all directly employed maintenance personnel. This expense category also typically includes all outside maintenance service contracts and the cost of maintenance and repairs supplies. The subject’s expense is detailed as follows:

REPAIRS & MAINTENANCE Year Total $/SF 2015 $3,835,402 $4.43 2016 Reforecast $3,638,562 $4.20 2017 Budget (Draft) $3,826,187 $4.42 Expense Comparable 1 N/A $3.19 Expense Comparable 2 N/A $2.99 Expense Comparable 3 N/A $2.93 CBRE Estimate $3,677,691 $4.25 CBRE

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

Our estimate is consistent with management’s estimates for the subject property and is well supported by other properties operating in the area. This also considers that 1 West 39th Street is more of a Class B structure and requires some additional upkeep.

Security

Security expenses are typically handled through outside service contracts. The subject’s expense is detailed as follows:

SECURITY Year Total $/SF 2015 $1,889,430 $2.18 2016 Reforecast $1,940,985 $2.24 2017 Budget (Draft) $1,986,604 $2.30 Expense Comparable 1 N/A $1.34 Expense Comparable 2 N/A $1.39 Expense Comparable 3 N/A $0.66 CBRE Estimate $1,947,013 $2.25 CBRE

We have modeled the higher projected security cost relative to the comparables given the specialized occupancy associated with the HSBC tenancy.

Cleaning

Cleaning expenses typically include the outside contract for janitorial service. The subject’s expense is detailed as follows:

CLEANING Year Total $/SF 2015 $2,592,532 $3.00 2016 Reforecast $2,466,743 $2.85 2017 Budget (Draft) $2,540,422 $2.94 Expense Comparable 1 N/A $3.45 Expense Comparable 2 N/A $3.31 Expense Comparable 3 N/A $3.72 CBRE Estimate - DCF Year 1 $2,482,480 $2.87 CBRE Estimate - Stabilized Direct Cap $2,482,480 $2.87 CBRE

We have modeled cleaning costs at $3.25 per square foot of occupied office area (759,990 SF in 452 Fifth and 1 W 39th Street), with 25% of the cost assumed to be non-variable.

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

Management Fee

Management expenses are typically negotiated as a percentage of collected revenues (i.e., effective gross income). The subject’s expense is detailed as follows:

MANAGEMENT FEE Year Total % of EGI $/SF 2015 $279,996 0.46% $0.32 2016 Reforecast $279,997 0.43% $0.32 2017 Budget (Draft) $280,000 0.42% $0.32 Expense Comparable 1 N/A 0.97% $0.62 Expense Comparable 2 N/A 1.43% $0.85 Expense Comparable 3 N/A 1.00% $0.72 CBRE Estimate - DCF Yr 1 $487,397 0.75% $0.56 CBRE Estimate - Direct Cap $641,298 1.00% $0.74 CBRE

Professional management fees in the local market range from 0.5% to 3.0% for comparable properties. The subject’s current management fee of 0.47% is low for the market. Given the subject’s size and the competitiveness of the local market area, we believe an appropriate management expense for the subject would be towards the lower end of the range at 1.0%.

Non-Reimbursable/Other

The subject’s expense is detailed as follows:

OTHER-NON RECOVERABLE Year Total $/SF 2015 $1,537,003 $1.78 2016 Reforecast $1,427,266 $1.65 2017 Budget (Draft) $932,820 $1.08 Expense Comparable 1 N/A $0.61 Expense Comparable 2 N/A $0.17 Expense Comparable 3 N/A $1.12 CBRE Estimate $900,000 $1.04 CBRE

This expense relates to tenant service revenue and various non-escalatable items. Our estimate is based on the stabilized occupancy of the subject.

OPERATING EXPENSE CONCLUSION

The subject’s expense is detailed as follows:

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

OPERATING EXPENSES Year Total $/SF 2015 $26,915,508 $31.10 2016 Reforecast $26,610,021 $30.75 2017 Budget (Draft) $27,737,706 $32.05 Expense Comparable 1 N/A $30.56 Expense Comparable 2 N/A $30.63 Expense Comparable 3 N/A $29.11 CBRE Estimate - DCF Year 1 $26,983,098 $31.18 CBRE Estimate - Stabilized Direct Cap $27,136,999 $31.36 CBRE

In order to better compare the operations of the subject and the comparables, we have removed the RE Tax expense from the figures shown above, which results in the following table:

OPERATING EXPENSES (NO RE TAXES) Year Total $/SF 2015 $15,914,757 $18.39 2016 Reforecast $14,881,031 $17.20 2017 Budget (Draft) $15,184,093 $17.55 Expense Comparable 1 N/A $14.74 Expense Comparable 2 N/A $15.76 Expense Comparable 3 N/A $17.09 CBRE Estimate - DCF Year 1 $14,570,033 $16.84 CBRE Estimate - Stabilized Direct Cap $14,723,934 $17.02 CBRE

Our estimates are reasonable based on the historical and budgeted information provided.

NET OPERATING INCOME CONCLUSION

The subject’s net operating income is detailed as follows:

NET OPERATING INCOME Year Total $/SF 2015 $34,380,666 $39.73 2016 Reforecast $38,409,779 $44.39 2017 Budget (Draft) $38,459,944 $44.44 CBRE Estimate - DCF Year 1 $38,003,114 $43.92 CBRE Estimate - Stabilized Direct Cap $36,992,824 $42.75 CBRE

HSBC BUILDING | INCOME CAPITALIZATION APPROACH

Reserves for Replacement

Reserves for replacement typically range between $0.10 and $0.20 per square foot. Although the subject property is well maintained, we have included figures of $0.10 for the Tower and $0.20 for 1 West 39th Street. These figures are projected to be included following the third year when the majority of the capital renovation and re-tenanting costs have been incurred.

DIRECT CAPITALIZATION

Direct capitalization is a method used to convert a single year’s estimated stabilized net operating income into a value indication. The following subsections represent different techniques for deriving an overall capitalization rate for direct capitalization.

Comparable Sales

The overall capitalization rates (OARs) confirmed for the comparable sales analyzed in the sales comparison approach are as follows:

COMPARABLE CAPITALIZATION RATES Transaction NRA Price NOI No. Name Date (SF) Per SF Occ. Per SF OAR

1 11 Madison Ave Aug-16 2,280,150 $1,140.28 98% $37.20 3.26%

2 1250 Broadway Jun-16 647,086 $873.15 97% n/a n/a

3 1140 Ave of Amer.* Jun-16 249,703 $1,086.92 91% $45.43 4.18%

4 275 Madison Ave Jun-16 305,849 $899.14 93% $35.07 3.90%

5 1285 Ave of Amer. May-16 1,749,000 $943.40 100% $43.60 4.62%

6 787 Seventh Ave. Jan-16 1,638,637 $1,158.91 98% $48.91 4.22%

7 600 Lexington Ave Dec-15 304,138 $933.79 95% $42.46 4.55%

Compiled by CBRE * Adjusted from $180 MM for LH value to $271.4 LF value

The overall capitalization rates for these sales were derived based pro-forma income characteristics of the property. The sales indicated a range of overall capitalization rates of 3.26% to 4.62%, with an average of 4.12%. During the past few years there was a significant amount of cap rate compression, while rates in the last 12 months have remained stable, but still very low relative to historic levels.

The subject is operating at stabilized income levels as all office space is leased with only a small amount of storage space available for lease. The property is occupied by a mix of strong tenants, including HSBC, Baker & McKenzie, Man Group and Staples and witnessed strong leasing activity in the recent past. Based on the above, a capitalization rate well below the adjusted average of the range would be appropriate, however, with the inclusion of the Class B, 1 West 39th Street portion of

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HSBC BUILDING | INCOME CAPITALIZATION APPROACH the subject property, a rate only slightly below the adjusted average is considered appropriate. It should also be noted that with the recent leasing activity, much of the cash flow is at or near market levels thus limiting some of the property’s upside potential. Based on the above, we would conclude to a capitalization rate in the range of 4.25% for the subject property.

Published Investor Surveys

The results of the most recent investor surveys are summarized in the following chart.

OVERALL CAPITALIZATION RATES Investment Type OAR Range Average CBRE Capital Market Survey - Mid-Year 2016 Manhattan - Class AA 3.75% - 4.25% 4.00% Manhattan - Class A 4.00% - 4.50% 4.25% Manhattan - Class B 4.50% - 5.00% 4.75% PwC Survey - 3Q2016 Manhattan Office 3.50% - 7.50% 5.57% National CBD Office 3.50% - 7.50% 5.55% Market Particpiants CBRE Brokerage 4.00% - 4.50% Jones Lange LaSalle 4.00% - 4.00% Indicated OAR: 4.25% Compiled by: CBRE

CBRE’s Capital Markets group recently completed a national survey of cap rates, including those in New York City, which indicated 3.75% to 4.25% for Class AA (trophy), 4.0% to 4.5% for Class A and 4.5% to 5.0% for Class B properties (it should be noted that these rates remain unchanged over the past 12 months). The 3rd Quarter 2016 PWC/Korpacz survey listed above indicates a range of 3.5% to 7.75%, with an average of 5.55% for National CBD office, while the New York CBD indicates a range of 3.75% to 7.5%, with an average of 5.57%.

Compared to the majority of the US markets, the Manhattan location results in higher investor demand and supports a low overall capitalization rate. New York City is a premiere market and there is a premium with purchasing real estate in the marketplace. Over the past few years there has been intense competition for the deals on the market and the investors’ appetite for real estate, specifically for properties with stable occupancy level and income.

The tower portion of the subject is considered to be a very good quality Manhattan office building, with a high quality tenancy. The very good quality of HSBC is a strong consideration in our selection of a capitalization rate, as this offsets much of the differential that would be appropriate related to the Class B nature of 1 West 39th Street and the risk of leasing the vacant space. Based on the above, we would conclude to an OAR below the average of the Korpacz Manhattan CBD survey at 4.25%.

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Market Participants

We surveyed market participants regarding appropriate capitalization rate assumptions for the subject property. The participants indicated that with the continued strong investor demand for well-located Manhattan properties, investors remain aggressive and are maintaining low cap rate assumptions. Participates indicated that typical cap rates for a Class A property that is operating at or near stabilized occupancy would be in the range of 4.0% to 4.5%. Although the subject’s long term HSBC tenancy would support a figure at the lower end of the range, given the inclusion of the Class B building at 1 West 39th Street a rate in the middle of this range is considered appropriate.

Capitalization Rate Conclusion

The following chart summarizes the OAR conclusions.

OVERALL CAPITALIZATION RATE - CONCLUSION Source Indicated OAR Comparable Sales 4.25% National Investor Survey 4.25% Market Participants 4.0% to 4.5% CBRE Estimate 4.25% Compiled by: CBRE

In concluding an overall capitalization rate for the subject, primary reliance has been placed upon the data obtained from the comparable sales and interviews with active market participants. This data tends to provide the most accurate depiction of both buyer’s and seller’s expectations within the market and the ranges indicated are relatively tight. Further secondary support for our conclusion is noted via both the CBRE National Investor Survey and PWC/Korpacz National Investor Survey. Considering the data presented, the concluded overall capitalization rate appears to be well supported in the local market.

Direct Capitalization Summary

A summary of the direct capitalization at stabilized occupancy is illustrated in the following chart.

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HSBC BUILDING | INCOME CAPITALIZATION APPROACH

DIRECT CAPITALIZATION SUMMARY

Income $/Door/Mo. $/SF/Yr Total Potential Rental Income $45,343 $62.88 $54,411,278 Misc Revenue 2,667 3.70 3,200,000 RE Tax Reimb 3,430 4.76 4,115,889 Op Exp Reimb 2,474 3.43 2,969,098 Tenant Elec Reimb 1,181 1.64 1,416,955 Vacancy & Credit Loss 3.00% (1,653) (2.29) (1,983,397) Effective Gross Income $53,442 $74.11 64,129,823

Expenses Real Estate Taxes $14.34 $12,413,065 Property Insurance 0.60 519,203 Utilities 2.25 1,947,012 Tenant Electric 1.62 1,397,762 General Operating 1.40 1,211,475 Repairs & Maintenance 4.25 3,677,691 Security 2.25 1,947,013 Cleaning 2.87 2,482,480 Management Fee 1.00% 0.74 641,298 Other-Non Recoverable 1.04 900,000 Operating Expenses $31.36 $27,136,999 Operating Expense Ratio 42.32% Net Operating Income $42.75 $36,992,824 OAR / 4.25% Indicated Value $870,419,392 Plus: NPV of Tax Savings 2,700,000 Less: Base Building CapEx (10,348,832) Value Indication $862,770,560 Rounded $865,000,000 Value Per SF $999.61

Matrix Analysis Cap Rate Value 4.00% $847,867,500 4.25% $793,466,300 4.50% $745,109,700

Compiled by CBRE

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DISCOUNTED CASH FLOW ANALYSIS (DCF)

The DCF assumptions concluded for the subject are summarized as follows:

SUMMARY OF DISCOUNTED CASH FLOW ASSUMPTIONS

General Assumptions Start Date October 1, 2016 Terms of Analysis 13 Years Software ARGUS Growth Rate Assumptions Income Growth 6%, 5%, 4%, 3% thereafter Expense Growth 3.00% Inflation (CPI) 3.00% Market Leasing Assumptions Office Office Office Office Office Category Retail 1 W 39th 452 5th (2-11) 452 5th(12-19) 452 5th(20-27) 452 5th(28-30) 1 Market Rent ($/SF/Yr.) $300 to $450 $50.00 $75.00 $85.00 $100.00 $105.00 Concessions None 10/5 mo.'s 10/5 mo.'s Reimbursements RE Tax over BY Mod. Gross Mod. Gross Mod. Gross Mod. Gross Mod. Gross Escalation 3% annual 10% YR 6 10% YR 6 10% YR 6 10% YR 6 10% YR 6 Tenant Improvements (New Tenants) $10.00 $40.00 $75.00 Tenant Improvements (Renewals) $0.00 $20.00 $30.00 Average Lease Term 10 Years 10 Years 10 Years 10 Years 10 Years 10 Years Renewal Probability 65% 65% 65% 65% 65% 65% Leasing Commissions (Cashed-Out) New Leases See Schedule See Schedule See Schedule See Schedule See Schedule See Schedule Renewal Leases See Schedule See Schedule See Schedule See Schedule See Schedule See Schedule Down Time Before New Tenant Leases 6 months 6 months 6 months 6 months 6 months 6 months Occupancy Assumptions Total Operating Expenses ($/SF/Yr.) $31.36 Current Occupancy 99.52% Stabilized Occupancy 98.00% Credit Loss 1.00% Stabilized Occupancy (w/Credit Loss) 97.00% Estimated Lease-up Period n/a Financial Assumptions Discount Rate 6.50% Terminal Capitalization Rate 5.00% Other Assumptions Cost of Sale 4.00% Capital Expenses (Deferred Maintenance) $10,348,832 Compiled by CBRE

Provided on the following pages is a discussion of the leasing assumptions used in the discounted cash flow analysis that were not analyzed in the direct capitalization approach.

General Assumptions

The DCF analysis utilizes a 13-year projection period. This is consistent with current investor assumptions and was extended due to rollovers at reversion.

Growth Rate Assumptions

The inflation and growth rates for the DCF analysis have been estimated by analyzing the expectations typically used by buyers and sellers in the local marketplace. Published investor surveys, an analysis of

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HSBC BUILDING | INCOME CAPITALIZATION APPROACH the Consumer Price Index (CPI), as well as CBRE, Inc.'s survey of brokers and investors active in the local market form the foundation for the selection of the appropriate growth rates. The compilation is shown in the following chart.

SUMMARY OF GROWTH RATES Investment Type Rent Expenses Inflation

U.S. Bureau of Labor Statistics (CPI-U) 10-Year Snapshot Average 2.07% PwC CBD Office New York CBD 3.58% 2.92% n/a National Data 2.43% 2.61% n/a Market Participants CBRE Brokerage 4-7%, 3% thereafter 3.00% 3.00% JLL 4-6%, 3% thereafter 3.00% 3.00% Korpacz CBD Office National Data 2.57% 2.61% n/a 6%, 5%, 4%, 3% CBRE Estimate thereafter 3.00% 3.00% Compiled by: CBRE

Brokers indicate that buyers continue to model some sort of rent spikes in their analyses, with CBRE and JLL indicate figures of 4% to 7% for the initial three years, followed by a long term inflationary growth rate of 3%

Based on our review of the market and historical evidence, we would have included rent spikes of 6% in the 2nd year, 5% in the 3rd year, 4% in the 4th year and 3% annual increases thereafter.

Leasing Assumptions

The contract lease terms for the existing tenants are utilized within the DCF analysis, with market leasing assumptions applied for renewals and absorption tenants. All subsequent years vary according to the growth rate assumptions applied to the Year 1 estimate.

Leasing Commissions

Shown below is the standard leasing commission schedule in Manhattan. It should be noted that in addition to the full commission, there is a 50% override for outside brokers. In our analysis, given the large size of the tenant spaces, we have assumed that an outside broker will be involved in 75% of the leasing transactions. Thus, we have combined the full commission with the override commission for a total commission calculation. This is considered to be market oriented and utilized in our analysis.

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HSBC BUILDING | INCOME CAPITALIZATION APPROACH

LEASING COMMISSIONS Full 75% Year Commission 50% Overide Probability 1 5.00% 2.50% 6.88% 2 4.00% 2.00% 5.50% 3 4.00% 2.00% 5.50% 4 3.50% 1.75% 4.81% 5 3.50% 1.75% 4.81% 6 to 10 3.00% 1.50% 4.13% 11 to 15 2.50% 1.25% 3.44%

5 Year Average 4.00% 2.00% 5.50% 10 Year Average 3.50% 1.75% 4.81% 15 Year Average 3.17% 1.58% 4.35%

Renewal Probability

The renewal probability incorporated within the market leasing assumptions has been estimated at 65%. This rate is considered reasonable based on the rent comparable data and a survey of market participants.

Downtime Between Leases

Within our analysis we have modeled 6 months of downtime between leases. The resulting downtime figure is blended at our previously concluded renewal probability.

Occupancy Assumptions

The occupancy rate over the holding period is based on the subject’s estimated stabilized occupancy rate and estimated lease-up period to achieve a stabilized occupancy position.

Vacancy, Credit Loss and Absorption

Please refer to the market analysis of this report for a detailed discussion of these elements.

Financial Assumptions

Discount Rate Analysis

The results of the most recent investor surveys are summarized in the following chart.

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HSBC BUILDING | INCOME CAPITALIZATION APPROACH

DISCOUNT RATES Investment Type Rate Range Average PwC Office - 3Q2016 NYC Office 5.50% - 9.00% 6.85% National CBD Office 5.50% - 10.00% 7.23%

Market Participants Class A Office CBRE 6.00% - 7.00% JLL 6.50% - 6.50% CBRE Estimate 6.50% Compiled by: CBRE

The PwC survey indicates a range from 5.5% to 9.0%, with an average of 6.85% for properties in Manhattan, and 5.5% to 10.00%, with an average of 7.23% for the National CBD Market. Market participants interviewed generally indicated a range of 6.0% to 7.0% for Class A properties in Manhattan. For Class B assets, participants indicated a +/- 50 BP premium over Class A product.

Determining where real estate falls within the range of rates is dependent on the perception of the where the market is heading. The subject property is considered good quality Class A product for Manhattan and has a good quality Fifth Avenue location within the Grand Central submarket, factors that are supportive of a discount rate below the Manhattan average. The property has strong anchor tenants in HSBC, Baker & McKenzie and Man Group. However, with the inclusion of the Class B office at 1 West 39th Street, a discount rate above the low end of the range would be warranted. Based on the above information, we have concluded to a discount rate slightly below the Manhattan average from PwC and in the middle of the range of the brokerage survey range at 6.5% as being reflective of the risk parameters associated with the subject’s projected cash flow. It should be noted that this figure is lower than our prior year conclusion as HSBC renewal option is assumed to be exercised in this analysis.

Terminal Capitalization Rate

The reversionary value of the subject is based on an assumed sale at the end of the holding period based on capitalizing the Year 14 NOI at a terminal capitalization rate. Typically, for properties similar to the subject, terminal capitalization rates are 50 to 100 basis points higher than going-in capitalization rates (OARs). This is a result of the uncertainty of future economic conditions and the natural aging of the property. For the subject, we have concluded a load factor of 75 basis points to be appropriate, given the extended length of the holding period.

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HSBC BUILDING | INCOME CAPITALIZATION APPROACH

TERMINAL CAPITALIZATION RATES Investment Type Rate Range Average PwC Survey - 3Q2016 NYC Office 5.00% - 8.00% 6.02% National CBD Office 4.50% - 8.00% 6.11% Market Participants Class A Office CBRE 5.00% - 5.25% JLL 5.00% - 5.50% CBRE Estimate 5.00% Compiled by: CBRE

Discounted Cash Flow Conclusion

The DCF schedule(s) and value conclusions are depicted on the following page(s).

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HSBC BUILDING - 452 FIFTH AVE CASH FLOW REPORT BEGINNING OCTOBER 1, 2016 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Reversion For the Years Ending Sep-2017 Sep-2018 Sep-2019 Sep-2020 Sep-2021 Sep-2022 Sep-2023 Sep-2024 Sep-2025 Sep-2026 Sep-2027 Sep-2028 Sep-2029 Sep-2030 ______Potential Gross Revenue Base Rental Revenue $54,411,278 $55,618,294 $56,077,557 $61,987,957 $70,103,698 $70,745,091 $74,481,156 $75,150,107 $77,052,570 $79,883,215 $83,025,054 $90,664,451 $93,373,587 $95,300,991 Absorption & Turnover Vacancy (103,475) (109,684) (115,168) (119,774) (113,087) (996,922) (1,093,351) (379,015) (749,520) (1,349,360) (3,060,500) Base Rent Abatements (17,541,825) (3,508,366) (7,005,337) (150,269) (1,279,175) (2,248,562) (989,485) (9,332,058) (997,135) ______Scheduled Base Rental Revenue 54,307,803 55,508,610 55,962,389 44,326,358 66,482,245 69,748,169 66,382,468 74,999,838 75,394,380 76,885,133 80,686,209 78,271,893 92,376,452 95,300,991

Expense Reimbursement Revenue RE Tax Reimb 4,115,889 4,898,831 5,834,554 4,966,812 3,187,101 3,530,404 2,914,571 3,224,650 3,481,816 3,722,470 3,860,463 3,516,933 3,782,920 4,390,977 Op Exp Reimb 2,969,098 3,130,962 3,316,617 2,381,181 1,366,626 1,712,362 1,516,988 1,984,157 2,345,816 2,725,125 3,178,341 2,974,844 3,341,892 3,868,300 Tenant Elec Reimb 1,416,955 1,459,114 1,502,770 1,547,855 1,594,288 1,624,988 1,669,041 1,739,179 1,784,496 1,832,210 1,899,689 1,898,424 2,014,561 2,074,994 ______Total Reimbursement Revenue 8,501,942 9,488,907 10,653,941 8,895,848 6,148,015 6,867,754 6,100,600 6,947,986 7,612,128 8,279,805 8,938,493 8,390,201 9,139,373 10,334,271

Miscellaneous 3,200,000 3,296,000 3,394,880 3,496,726 3,601,628 3,709,677 3,820,967 3,935,596 4,053,664 4,175,274 4,300,532 4,429,548 4,562,435 4,699,308 ______Total Potential Gross Revenue 66,009,745 68,293,517 70,011,210 56,718,932 76,231,888 80,325,600 76,304,035 85,883,420 87,060,172 89,340,212 93,925,234 91,091,642 106,078,260 110,334,570 General Vacancy (705,577) (733,589) (749,552) (689,547) (806,190) (223,005) (225,827) (1,030,269) (650,733) (292,366) (256,713) (259,844) (1,329,893) (1,381,669) Collection Loss (317,956) (333,075) (341,573) (348,887) (357,237) (357,246) (311,386) (400,568) (391,245) (386,796) (425,827) (391,228) (533,001) (553,331) ______Effective Gross Revenue $64,986,212 $67,226,853 $68,920,085 $55,680,498 $75,068,461 $79,745,349 $75,766,822 $84,452,583 $86,018,194 $88,661,050 $93,242,694 $90,440,570 104,215,366 108,399,570 ______Operating Expenses Real Estate Taxes 12,413,065 13,460,341 14,575,454 15,777,475 16,834,991 17,343,372 17,867,106 18,406,656 18,962,499 19,531,374 20,117,316 20,720,835 21,342,459 21,982,733 Insurance 519,203 534,780 550,823 567,348 584,368 601,899 619,956 638,555 657,711 677,443 697,766 718,699 740,260 762,468 Utilities 1,947,012 2,005,424 2,065,586 2,127,554 2,191,380 2,257,122 2,324,835 2,394,580 2,466,418 2,540,410 2,616,623 2,695,121 2,775,974 2,859,254 Tenant Electric 1,397,762 1,439,695 1,482,885 1,527,372 1,573,193 1,603,919 1,649,770 1,719,071 1,764,679 1,811,969 1,878,475 1,878,848 1,992,874 2,052,660 General & Admin 1,211,475 1,247,819 1,285,253 1,323,811 1,363,525 1,404,431 1,446,564 1,489,961 1,534,660 1,580,700 1,628,121 1,676,964 1,727,273 1,779,091 Repairs & Maintenance 3,677,691 3,788,021 3,901,663 4,018,712 4,139,273 4,263,452 4,391,355 4,523,095 4,658,788 4,798,552 4,942,508 5,090,784 5,243,508 5,400,813 Security 1,947,013 2,005,423 2,065,586 2,127,553 2,191,380 2,257,121 2,324,835 2,394,580 2,466,417 2,540,410 2,616,622 2,695,121 2,775,975 2,859,254 Cleaning 2,482,480 2,556,954 2,633,663 2,712,673 2,794,891 2,867,914 2,951,154 3,064,129 3,148,695 3,236,184 3,336,880 3,379,628 3,552,166 3,658,731 Management 487,397 504,201 516,901 417,604 563,013 598,090 568,251 633,394 645,136 664,958 699,320 678,304 781,615 812,997 Non-Reimb 900,000 927,000 954,810 983,454 1,012,958 1,043,347 1,074,647 1,106,886 1,140,093 1,174,296 1,209,525 1,245,810 1,283,185 1,321,680 ______Total Operating Expenses 26,983,098 28,469,658 30,032,624 31,583,556 33,248,972 34,240,667 35,218,473 36,370,907 37,445,096 38,556,296 39,743,156 40,780,114 42,215,289 43,489,681 ______Net Operating Income 38,003,114 38,757,195 38,887,461 24,096,942 41,819,489 45,504,682 40,548,349 48,081,676 48,573,098 50,104,754 53,499,538 49,660,456 62,000,077 64,909,889 ______Leasing & Capital Costs Tenant Improvements $1,232,100 $33,091,729 $5,677,368 $935,389 $1,849,779 $110,640 $8,781,095 Leasing Commissions $406,457 $14,012,817 $61,949 $3,979,519 $711,400 $1,406,829 $2,943,770 $5,744,477 Reserves - 452 Fifth 71,843 73,998 76,218 78,504 80,859 83,285 85,784 88,357 91,008 93,738 96,550 99,447 102,430 Reserves - 1 W 39 28,879 29,745 30,638 31,557 32,503 33,478 34,483 35,517 36,583 37,680 38,811 39,975 41,174 Base Bldg Cap 10,348,832 ______Cash Flow Before Debt Service 27,654,282 37,017,916 38,783,718 (23,114,460) 41,647,479 45,391,320 30,774,699 47,961,409 46,802,435 46,720,555 50,313,710 34,999,523 61,860,655 64,766,285 & Taxes ======

IMPLIED OVERALL RATE 4.46% 4.54% 4.56% 2.83% 4.90% 5.33% 4.75% 5.64% 5.69% 5.87% 6.27% 5.82% 7.27% CASH ON CASH RETURN 3.24% 4.34% 4.55% -2.71% 4.88% 5.32% 3.61% 5.62% 5.49% 5.48% 5.90% 4.10% 7.25%

NOI and Cash Flow Trend 80,000,000 Sale / Yield Terminal Capitalization Rate Discount Rate 4.50% 5.00% 5.50% 60,000,000 6.00% $962,882,502 $897,960,286 $844,842,109 40,000,000 6.50% $914,058,734 $852,989,189 $803,023,198 20,000,000 7.00% $868,163,602 $810,701,636 $763,687,301

Total $'s Total 0 Net Operating Income Cost of Sale at Reversion: 4.00% 12345678910111213 (20,000,000) Net Cash Flow Building Size (SF): 864,303 (40,000,000) Percent Residual: 64.4%

Year Reconciled Value Indication (Rounded): $855,000,000 Value Per Square Foot: $989.24 HSBC BUILDING | INCOME CAPITALIZATION APPROACH

CONCLUSION OF INCOME CAPITALIZATION APPROACH

The conclusions via the valuation methods employed for this approach are as follows:

INCOME CAPITALIZATION APPROACH VALUES As Is on September 30, 2016 Direct Capitalization Method $865,000,000 Discounted Cash Flow Analysis $855,000,000 Reconciled Value $855,000,000 Compiled by CBRE

Primary emphasis has been placed on the Discounted Cash Flow analysis as this methodology better reflects the actions of buyers and sellers currently active in this market.

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HSBC BUILDING | RECONCILIATION OF VALUE

RECONCILIATION OF VALUE

The value indications from the approaches to value are summarized as follows:

SUMMARY OF VALUE CONCLUSIONS As Is on September 30, 2016 Sales Comparison Approach $855,000,000 Income Capitalization Approach (via DCF) $855,000,000 Reconciled Value $855,000,000 Compiled by CBRE

The cost approach typically gives a reliable value indication when there is strong support for the replacement cost estimate and when there is minimal depreciation. Considering the amount of depreciation present in the property, the reliability of the cost approach is significantly diminished. Therefore, the cost approach is considered less applicable to the subject and has not been included within our analysis.

In the sales comparison approach, the subject is compared to similar properties that have been sold recently or for which listing prices or offers are known. The sales used in this analysis are considered comparable to the subject, and the required adjustments were based on reasonable and well- supported rationale. In addition, market participants are currently analyzing purchase prices on investment properties as they relate to available substitutes in the market. Therefore, the sales comparison approach is considered to provide a reliable value indication, but has been given secondary emphasis in the final value reconciliation.

The income capitalization approach is applicable to the subject since it is an income producing property leased in the open market. Market participants are primarily analyzing properties based on their income generating capability. Therefore, the income capitalization approach and specifically the Discounted Cash Flow analysis is considered a reasonable and substantiated value indicator and has been given primary emphasis in the final value estimate.

Based on the foregoing, the market value of the subject has been concluded as follows:

MARKET VALUE CONCLUSION Appraisal Premise Interest Appraised Date of Value Value Conclusion As Is Leased Fee Interest September 30, 2016 $855,000,000 Compiled by CBRE

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ASSUMPTIONS AND LIMITING CONDITIONS

1. Unless otherwise specifically noted in the body of the report, it is assumed that title to the property or properties appraised is clear and marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value. CBRE is not aware of any title defects nor has it been advised of any unless such is specifically noted in the report. CBRE, however, has not examined title and makes no representations relative to the condition thereof. Documents dealing with liens, encumbrances, easements, deed restrictions, clouds and other conditions that may affect the quality of title have not been reviewed. Insurance against financial loss resulting in claims that may arise out of defects in the subject’s title should be sought from a qualified title company that issues or insures title to real property. 2. Unless otherwise specifically noted in the body of this report, it is assumed: that the existing improvements on the property or properties being appraised are structurally sound, seismically safe and code conforming; that all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required; that the roof and exterior are in good condition and free from intrusion by the elements; that the property or properties have been engineered in such a manner that the improvements, as currently constituted, conform to all applicable local, state, and federal building codes and ordinances. CBRE professionals are not engineers and are not competent to judge matters of an engineering nature. CBRE has not retained independent structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the condition of improvements. Unless otherwise specifically noted in the body of the report: no problems were brought to the attention of CBRE by ownership or management; CBRE inspected less than 100% of the entire interior and exterior portions of the improvements; and CBRE was not furnished any engineering studies by the owners or by the party requesting this appraisal. If questions in these areas are critical to the decision process of the reader, the advice of competent engineering consultants should be obtained and relied upon. It is specifically assumed that any knowledgeable and prudent purchaser would, as a precondition to closing a sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity of building systems. Structural problems and/or building system problems may not be visually detectable. If engineering consultants retained should report negative factors of a material nature, or if such are later discovered, relative to the condition of improvements, such information could have a substantial negative impact on the conclusions reported in this appraisal. Accordingly, if negative findings are reported by engineering consultants, CBRE reserves the right to amend the appraisal conclusions reported herein. 3. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property was not observed by the appraisers. CBRE has no knowledge of the existence of such materials on or in the property. CBRE, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. We have inspected, as thoroughly as possible by observation, the land; however, it was impossible to personally inspect conditions beneath the soil. Therefore, no representation is made as to these matters unless specifically considered in the appraisal. 4. All furnishings, equipment and business operations, except as specifically stated and typically considered as part of real property, have been disregarded with only real property being considered in the report unless otherwise stated. Any existing or proposed improvements, on or off-site, as well as any alterations or repairs considered, are assumed to be completed in a workmanlike manner according to standard practices based upon the information submitted to CBRE This report may be subject to amendment upon re-inspection of the subject subsequent to repairs, modifications, alterations and completed new construction. Any estimate of Market Value is as of the date indicated; based upon the information, conditions and projected levels of operation. 5. It is assumed that all factual data furnished by the client, property owner, owner’s representative, or persons designated by the client or owner to supply said data are accurate and correct unless otherwise specifically noted in the appraisal report. Unless otherwise specifically noted in the appraisal report, CBRE has no reason to believe that any of the data furnished contain any material error. Information and data referred to in this paragraph include, without being limited to, numerical street addresses, lot and block numbers, Assessor’s Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any material error in any of the above data could have a substantial impact on the conclusions reported. Thus, CBRE reserves the right to amend conclusions reported if made aware of any such error. Accordingly, the client-addressee should carefully review all assumptions, data, relevant calculations, and conclusions within 30 days after the date of delivery of this report and should immediately notify CBRE of any questions or errors.

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6. The date of value to which any of the conclusions and opinions expressed in this report apply, is set forth in the Letter of Transmittal. Further, that the dollar amount of any value opinion herein rendered is based upon the purchasing power of the American Dollar on that date. This appraisal is based on market conditions existing as of the date of this appraisal. Under the terms of the engagement, we will have no obligation to revise this report to reflect events or conditions which occur subsequent to the date of the appraisal. However, CBRE will be available to discuss the necessity for revision resulting from changes in economic or market factors affecting the subject. 7. CBRE assumes no private deed restrictions, limiting the use of the subject in any way. 8. Unless otherwise noted in the body of the report, it is assumed that there are no mineral deposit or subsurface rights of value involved in this appraisal, whether they be gas, liquid, or solid. Nor are the rights associated with extraction or exploration of such elements considered unless otherwise stated in this appraisal report. Unless otherwise stated it is also assumed that there are no air or development rights of value that may be transferred. 9. CBRE is not aware of any contemplated public initiatives, governmental development controls, or rent controls that would significantly affect the value of the subject. 10. The estimate of Market Value, which may be defined within the body of this report, is subject to change with market fluctuations over time. Market value is highly related to exposure, time promotion effort, terms, motivation, and conclusions surrounding the offering. The value estimate(s) consider the productivity and relative attractiveness of the property, both physically and economically, on the open market. 11. Any cash flows included in the analysis are forecasts of estimated future operating characteristics are predicated on the information and assumptions contained within the report. Any projections of income, expenses and economic conditions utilized in this report are not predictions of the future. Rather, they are estimates of current market expectations of future income and expenses. The achievement of the financial projections will be affected by fluctuating economic conditions and is dependent upon other future occurrences that cannot be assured. Actual results may vary from the projections considered herein. CBRE does not warrant these forecasts will occur. Projections may be affected by circumstances beyond the current realm of knowledge or control of CBRE 12. Unless specifically set forth in the body of the report, nothing contained herein shall be construed to represent any direct or indirect recommendation of CBRE to buy, sell, or hold the properties at the value stated. Such decisions involve substantial investment strategy questions and must be specifically addressed in consultation form. 13. Also, unless otherwise noted in the body of this report, it is assumed that no changes in the present zoning ordinances or regulations governing use, density, or shape are being considered. The property is appraised assuming that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, nor national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report is based, unless otherwise stated. 14. This study may not be duplicated in whole or in part without the specific written consent of CBRE nor may this report or copies hereof be transmitted to third parties without said consent, which consent CBRE reserves the right to deny. Exempt from this restriction is duplication for the internal use of the client-addressee and/or transmission to attorneys, accountants, or advisors of the client-addressee or its attachments to the company’s/affiliate’s public filing. Also exempt from this restriction is transmission of the report to any court, governmental authority, or regulatory agency having jurisdiction over the party/parties for whom this appraisal was prepared, provided that this report and/or its contents shall not be published, in whole or in part, in any public document without the express written consent of CBRE which consent CBRE reserves the right to deny. Finally, this report shall not be advertised to the public or otherwise used to induce a third party to purchase the property or to make a “sale” or “offer for sale” of any “security”, as such terms are defined and used in the Securities Act of 1933, as amended. Any third party, not covered by the exemptions herein, who may possess this report, is advised that they should rely on their own independently secured advice for any decision in connection with this property. CBRE shall have no accountability or responsibility to any such third party. 15. Any value estimate provided in the report applies to the entire property, and any pro ration or division of the title into fractional interests will invalidate the value estimate, unless such pro ration or division of interests has been set forth in the report. 16. The distribution of the total valuation in this report between land and improvements applies only under the existing program of utilization. Component values for land and/or buildings are not intended to be used in conjunction with any other property or appraisal and are invalid if so used. 17. The maps, plats, sketches, graphs, photographs and exhibits included in this report are for illustration purposes only and are to be utilized only to assist in visualizing matters discussed within this report. Except as specifically stated, data relative to size or area of the subject and comparable properties has been obtained from sources deemed accurate and reliable. None of the exhibits are to be removed, reproduced, or used apart from this report. 18. No opinion is intended to be expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. Values and opinions expressed presume that

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environmental and other governmental restrictions/conditions by applicable agencies have been met, including but not limited to seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, licenses, etc. No survey, engineering study or architectural analysis has been made known to CBRE unless otherwise stated within the body of this report. If the Consultant has not been supplied with a termite inspection, survey or occupancy permit, no responsibility or representation is assumed or made for any costs associated with obtaining same or for any deficiencies discovered before or after they are obtained. No representation or warranty is made concerning obtaining these items. CBRE assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance. 19. Acceptance and/or use of this report constitutes full acceptance of the Contingent and Limiting Conditions and special assumptions set forth in this report. It is the responsibility of the Client, or client’s designees, to read in full, comprehend and thus become aware of the aforementioned contingencies and limiting conditions. Neither the Appraiser nor CBRE assumes responsibility for any situation arising out of the Client’s failure to become familiar with and understand the same. The Client is advised to retain experts in areas that fall outside the scope of the real estate appraisal/consulting profession if so desired. 20. CBRE assumes that the subject analyzed herein will be under prudent and competent management and ownership; neither inefficient or super-efficient. 21. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined and considered in the appraisal report. 22. No survey of the boundaries of the property was undertaken. All areas and dimensions furnished are presumed to be correct. It is further assumed that no encroachments to the realty exist. 23. The Americans with Disabilities Act (ADA) became effective January 26, 1992. Notwithstanding any discussion of possible readily achievable barrier removal construction items in this report, CBRE has not made a specific compliance survey and analysis of this property to determine whether it is in conformance with the various detailed requirements of the ADA. It is possible that a compliance survey of the property together with a detailed analysis of the requirements of the ADA could reveal that the property is not in compliance with one or more of the requirements of the ADA. If so, this fact could have a negative effect on the value estimated herein. Since CBRE has no specific information relating to this issue, nor is CBRE qualified to make such an assessment, the effect of any possible non-compliance with the requirements of the ADA was not considered in estimating the value of the subject. 24. Client shall not indemnify Appraiser or hold Appraiser harmless unless and only to the extent that the Client misrepresents, distorts, or provides incomplete or inaccurate appraisal results to others, which acts of the Client approximately result in damage to Appraiser. Notwithstanding the foregoing, Appraiser shall have no obligation under this Section with respect to any loss that is caused solely by the active negligence or willful misconduct of a Client and is not contributed to by any act or omission (including any failure to perform any duty imposed by law) by Appraiser. Client shall indemnify and hold Appraiser harmless from any claims, expenses, judgments or other items or costs arising as a result of the Client's failure or the failure of any of the Client's agents to provide a complete copy of the appraisal report to any third party. In the event of any litigation between the parties, the prevailing party to such litigation shall be entitled to recover, from the other, reasonable attorney fees and costs. 25. The report is for the sole use of the client; however, client may provide only complete, final copies of the appraisal report in its entirety (but not component parts) to third parties who shall review such reports in connection with loan underwriting or securitization efforts or attach it or describe the report in immediate reports or other forms of public filings to be made by client or any of its affiliates. Appraiser is not required to explain or testify as to appraisal results other than to respond to the client for routine and customary questions. Please note that our consent to allow an appraisal report prepared by CBRE or portions of such report, to become part of or be referenced in any public offering, the granting of such consent will be at our sole discretion and, if given, will be on condition that we will be provided with an Indemnification Agreement and/or Non-Reliance letter, in a form and content satisfactory to us, by a party satisfactory to us. We do consent to your submission of the reports to rating agencies, loan participants or your auditors and to attach to client’s or its affiliates public filings in its entirety (but not component parts) or described in such public filings without the need to provide us with an Indemnification Agreement and/or Non-Reliance letter.

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ADDENDUM B

IMPROVED SALE DATA SHEETS

Sale Office - Multi Tenant No. 1 Property Name 11 Madison Address 11 Madison Avenue New York, NY 10010

County New York Govt./Tax ID 0854-1023, 0854-7501 Net Rentable Area (NRA) 2,285,043 sf Condition Excellent Number of Buildings 1 Parking Type/Ratio None/ 0.00:1,000 sf Year Built/Renovated 1929/ 2015 Floor Count 28 Occupancy Type Multi-tenant Land Area Net 1.927 ac/ 83,937 sf Actual FAR 27.22 Zoning C5-3 Construction Class/ Type A/ Excellent External Finish Glass Amenities N/A

Transaction Details Type Sale Primary Verification CBRE Investment Properties Interest Transfered Leased Fee Transaction Date 08/01/2016 Condition of Sale None Recording Date 08/01/2016 Remaining Lease Term N/A Avg. Credit Rating N/A Recorded Buyer PGIM Real Estate Sale Price $2,600,000,000 Buyer Type Insurance Company Financing Market Rate Financing Recorded Seller SL Green Cash Equivalent $2,600,000,000 Marketing Time 4 Month(s) Capital Adjustment $0 Listing Broker CBRE Adjusted Price $2,600,000,000 Doc # N/A Adjusted Price / sf $1,137.83

Buyer's Primary Analysis Static Capitalization Analysis Occupancy at Sale 98% Static Analysis Method Pro Forma (Stabilized) Underwritten Occupancy N/A Source Broker Potential Gross Income N/A NOI / sf $37.20 Vacancy/Collection Loss N/A IRR N/A Effective Gross Income N/A OER N/A Expenses N/A Expenses /sf $0.00 Net Operating Income $85,000,000 Cap Rate 3.27% Comments Transaction involves a 40% interest in the property. NOI was rumored to be in the range of $85 million, with confirmation forthcoming. Sale Office - Multi Tenant No. 2 Property Name N/A Address 1250 Broadway New York, NY 10001

County New York Govt./Tax ID N/A Net Rentable Area (NRA) 647,086 sf Condition Good Number of Buildings 1 Parking Type/Ratio None/ 0.00:1,000 sf Year Built/Renovated 1968/ N/A Floor Count 39 Occupancy Type Multi-tenant Land Area Net 0.710 ac/ 30,928 sf Actual FAR 20.58 Zoning C6-6 Construction Class/ Type N/A/ Good External Finish Glass Amenities N/A

Transaction Details Type Sale Primary Verification Jamestown Interest Transfered Leased Fee Transaction Date 06/28/2016 Condition of Sale None Recording Date N/A Remaining Lease Term N/A Avg. Credit Rating N/A Recorded Buyer Eyal Ofer Sale Price $565,000,000 Buyer Type Private Investor Financing Market Rate Financing Recorded Seller Jamestown Properties Cash Equivalent $565,000,000 Marketing Time N/A Capital Adjustment $0 Listing Broker Eastdil Adjusted Price $565,000,000 Doc # N/A Adjusted Price / sf $873.15

Buyer's Primary Analysis Yield Capitalization Analysis Occupancy at Sale 97% Static Analysis Method Pro Forma (Stabilized) Underwritten Occupancy N/A Source N/A Potential Gross Income N/A NOI / sf N/A Vacancy/Collection Loss N/A IRR N/A Effective Gross Income N/A OER N/A Expenses N/A Expenses /sf $0.00 Net Operating Income N/A Cap Rate N/A Comments Sale Office - Multi Tenant No. 3 Property Name 1140 Avenue of the Americas Address 1140 Avenue of the Americas New York, NY

County New York Govt./Tax ID Block 1260, Lot 1 Net Rentable Area (NRA) 249,703 sf Condition Excellent Number of Buildings 1 Parking Type/Ratio None/ 0.00:1,000 sf Year Built/Renovated 1926/ 2012 Floor Count 22 Occupancy Type Multi-tenant Land Area Net 0.220 ac/ 9,583 sf Actual FAR 18.73 Zoning N/A Construction Class/ Type A/ Excellent External Finish Glass Amenities N/A

Transaction Details Type Sale Primary Verification HFF Broker Andrew Scandelious Interest Transfered Leasehold Transaction Date 06/01/2016 Condition of Sale None Recording Date N/A Remaining Lease Term N/A Avg. Credit Rating N/A Recorded Buyer American Realty Capital NYC Sale Price $180,000,000 Buyer Type REIT Financing Market Rate Financing Recorded Seller Blackstone/EOP Cash Equivalent $180,000,000 Marketing Time N/A Capital Adjustment $91,406,250 Listing Broker HFF Adjusted Price $271,406,250 Doc # N/A Adjusted Price / sf $1,086.92

Buyer's Primary Analysis Yield Capitalization Analysis Occupancy at Sale 91% Static Analysis Method Pro Forma (Stabilized) Underwritten Occupancy N/A Source Broker Potential Gross Income N/A NOI / sf $45.43 Vacancy/Collection Loss N/A IRR N/A Effective Gross Income N/A OER N/A Expenses N/A Expenses /sf $0.00 Net Operating Income $11,344,781 Cap Rate 4.18% Comments This sale represents a transfer of the leasehold interest. The Sale price was adjusted by the estimated value of the leased fee interest of the ground lease. Sale Office - Multi Tenant No. 4 Property Name 275 Madison Avenue Address 275 Madison Avenue New York, NY 10016

County New York Govt./Tax ID 0869-0054 Net Rentable Area (NRA) 305,849 sf Condition Average Number of Buildings 1 Parking Type/Ratio None/ 0.00:1,000 sf Year Built/Renovated 1931/ 2004 Floor Count 43 Occupancy Type Multi-tenant Land Area Net 0.310 ac/ 13,500 sf Actual FAR 20.83 Zoning N/A Construction Class/ Type A/ Average External Finish Masonry Amenities N/A

Transaction Details Type Sale Primary Verification Scott Latham Interest Transfered N/A Transaction Date 06/10/2016 Condition of Sale None Recording Date 08/01/2016 Remaining Lease Term N/A Avg. Credit Rating N/A Recorded Buyer RPW Group Sale Price $275,000,000 Buyer Type Private Investor Financing N/A Recorded Seller RFR Realty Cash Equivalent $275,000,000 Marketing Time N/A Capital Adjustment $0 Listing Broker JLL (Latham/Caplan) Adjusted Price $275,000,000 Doc # N/A Adjusted Price / sf $899.14

Buyer's Primary Analysis Static Capitalization Analysis Occupancy at Sale 93% Static Analysis Method Pro Forma (Stabilized) Underwritten Occupancy N/A Source N/A Potential Gross Income N/A NOI / sf $35.07 Vacancy/Collection Loss N/A IRR N/A Effective Gross Income N/A OER N/A Expenses N/A Expenses /sf $0.00 Net Operating Income $10,726,124 Cap Rate 3.90% Comments This transaction involves the May 2016 contract for the office building located at 275 Madison Avenue. The 43-story office tower has a number of medium-sized tenants and was 93% occupied at the time of sale. This property faces some near term rollover risk, as the largest tenant in the building is likely vacating as a result of a 2015 merger. It is located in an average quality location, on Madison Avenue and East 40th Street. The 305,849 square foot property is currently under contract for $275,000,000 or $899 per square foot. Net operating income was reported at $35.07/SF, indicating an overall capitalization rate of 3.9% for this transaction. Sale Office - Multi Tenant No. 5 Property Name 1285 Avenue of the Americas Address 1285 Avenue of the Americas New York, NY 10022

County New York Govt./Tax ID 1004-0029 Net Rentable Area (NRA) 1,749,000 sf Condition Good Number of Buildings 1 Parking Type/Ratio None/ 0.00:1,000 sf Year Built/Renovated 1960/ N/A Floor Count 39 Occupancy Type Multi-tenant Land Area Net 1.837 ac/ 80,000 sf Actual FAR 21.33 Zoning C6-6.5 Construction Class/ Type A/ Good External Finish Glass Amenities N/A

Transaction Details Type Sale Primary Verification Eastdill OM / News Articles / A. Spies Interest Transfered Leased Fee Transaction Date 05/01/2016 Condition of Sale None Recording Date 05/20/2016 Remaining Lease Term N/A Avg. Credit Rating N/A Recorded Buyer RXR/David Werner/China Life Sale Price $1,650,000,000 Buyer Type REIT Financing Market Rate Financing Recorded Seller 1285 Holdins LLC Cash Equivalent $1,650,000,000 Marketing Time N/A Capital Adjustment $0 Listing Broker Eastdil Adjusted Price $1,650,000,000 Doc # 2016052500250001 Adjusted Price / sf $943.40

Buyer's Primary Analysis Yield Capitalization Analysis Occupancy at Sale 100% Static Analysis Method Pro Forma (Stabilized) Underwritten Occupancy N/A Source N/A Potential Gross Income N/A NOI / sf $43.60 Vacancy/Collection Loss N/A IRR N/A Effective Gross Income N/A OER N/A Expenses N/A Expenses /sf $0.00 Net Operating Income $76,256,400 Cap Rate 4.62% Comments 1285 Avenue of the Americas-reported negotiations started in December 2015, but were extended due to anchor tenant renewal. Sale Office - Multi Tenant No. 6 Property Name 787 Seventh Avenue Address 787 Seventh Avenue New York, NY 10019

County New York Govt./Tax ID N/A Net Rentable Area (NRA) 1,638,637 sf Condition Good Number of Buildings 1 Parking Type/Ratio Garage/ N/A Year Built/Renovated 1985/ N/A Floor Count 50 Occupancy Type Multi-tenant Land Area Net 1.840 ac/ 80,332 sf Actual FAR 20.40 Zoning C6-6 Construction Class/ Type N/A/ Good External Finish Glass Amenities N/A

Transaction Details Type Sale Primary Verification Eastdil Interest Transfered Leased Fee Transaction Date 01/27/2016 Condition of Sale None Recording Date 01/27/2016 Remaining Lease Term N/A Avg. Credit Rating N/A Recorded Buyer F SP 767 Seventh, LLC Sale Price $1,899,037,256 Buyer Type Pension Fund Financing N/A Recorded Seller 787 Holdings LLC Cash Equivalent $1,899,037,299 Marketing Time N/A Capital Adjustment $0 Listing Broker N/A Adjusted Price $1,899,037,299 Doc # 2016020300710001 Adjusted Price / sf $1,158.91

Buyer's Primary Analysis Yield Capitalization Analysis Occupancy at Sale 98% Static Analysis Method Pro Forma (Stabilized) Underwritten Occupancy N/A Source Appraiser Potential Gross Income N/A NOI / sf $48.91 Vacancy/Collection Loss N/A IRR N/A Effective Gross Income N/A OER N/A Expenses N/A Expenses /sf $0.00 Net Operating Income $80,145,736 Cap Rate 4.22% Comments This represents the sale of 787 Seventh Avenue, located between West 51st and 52nd Streets in the Sixth/Rockefeller Center submarket. The 1,638,637 SF property is 50 stories tall and was constructed in 1985. The property is anchored by BNP Paribas, Wilkie Farr and Gallagher, Sidney Austin, Stifel Nicolaus, and UBS. These tenants have generally long-term leases with between 7 and 11 years remaining. The property sold for $1,900,000,000 or $1,160/SF. Net operating income was projected to be $53.26/SF, indicating an overall capitalization rate of 4.5% for this transaction. Sale Office - Multi Tenant No. 7 Property Name 600 Lexington Avenue Property Address 600 Lexington Avenue New York, NY 10022

County New York Govt./Tax ID N/A Net Rentable Area (NRA) 304,138 sf Condition Good Number of Buildings 1 Parking Type/Ratio None/ N/A Year Built/Renovated 1984/ 2004 Floor Count 36 Occupancy Type Multi-tenant Land Area Net 0.250 ac/ 11,050 sf Actual FAR 24.26 Zoning C6-6 Construction Class/ Type A/ Good External Finish Glass Amenities Environmental Certification (e.g., LEED, WELL, Energy Star, Green)

Transaction Details Type Sale Primary Verification Costar Interest Transfered Leased Fee Transaction Date 12/01/2015 Condition of Sale None Recording Date N/A Remaining Lease Term N/A Avg. Credit Rating N/A Recorded Buyer SL Green Realty Corp Sale Price $284,000,000 Buyer Type REIT Financing Market Rate Financing Recorded Seller 600 Lexington Owner LLC Cash Equivalent $284,000,000 Marketing Time N/A Capital Adjustment $0 Listing Broker N/A Adjusted Price $284,000,000 Doc # N/A Adjusted Price / sf $933.79

Buyer's Primary Analysis Static and Yield Capitalization Analyses Occupancy at Sale 95% Static Analysis Method Pro Forma (Stabilized) Underwritten Occupancy N/A Source Seller Potential Gross Income N/A NOI / sf $42.46 Vacancy/Collection Loss N/A IRR N/A Effective Gross Income N/A OER N/A Expenses N/A Expenses /sf $0.00 Net Operating Income $12,915,052 Cap Rate 4.55% Comments This represents the acquisition of a 45% stake in 600 Lexington Avenue, which gives the company complete ownership of the asset. The transaction implies consideration for the consolidated interests of $284.0 million, or $936 per square foot. The loan matures in October of 2017 and the current interest rate is 2.29% as per an SEC filing. As per an SEC Filing, dated February 23, 2015, the property was 89.2% occupied, but CoStar indicated that the property was 95% occupied in December 2015. HSBC BUILDING | ADDENDA

ADDENDUM C

RENT COMPARABLE DATA SHEETS

1 1221 Avenue of the Americas - Rockefeller Center

Location: AKA 102 W 49th St Building Type: Class A Office Between 48th & 49th Streets Midtown Cluster Status: Built 1972 Times Square Submarket Stories: 51 Manhattan RBA: 2,652,712 SF New York, NY 10020 Typical Floor: 52,014 SF Developer: The Rockefeller Group Total Avail: 218,824 SF % Leased: 93.6% Management: The Rockefeller Group Recorded Owner: 1221 Ave Holdings Llc

Expenses: 2010 Tax @ $13.64/sf, 2011 Est Tax @ $13.64/sf; 2000 Ops @ $14.15/sf, 2011 Est Ops @ $19.16/sf Parcel Number: 1001-0029 Parking: 100 Covered Spaces are available; Ratio of 0.03/1,000 SF Amenities: 24 Hour Availability, Banking, Bus Line, Conferencing Facility, Fitness Center, Food Service, Metro/Subway, On Site Management, Property Manager on Site, Restaurant

Floor SF Avail Floor Contig Bldg Contig Rent/SF/Yr + Svs Occupancy Term Type P 15th 25,252 25,252 25,252 Withheld Vacant 10-15 yrs Direct E 18th 25,000 - 47,777 47,777 95,554 Withheld Vacant 10-15 yrs Direct E 19th 47,777 47,777 95,554 Withheld 12/2016 10-15 yrs Direct E 39th 48,184 48,184 98,018 Withheld Vacant 10-15 yrs Direct E 40th 49,834 49,834 98,018 Withheld Vacant 10-15 yrs Direct

Copyrighted report licensed to CBRE - 17996. 2 885 Third Ave - Lipstick Building

Location: Lipstick Building Building Type: Class A Office AKA 877-895 Third Ave Between 53rd & 54th Streets Status: Built 1986, Renov 2006 Midtown Cluster Stories: 34 Plaza District Submarket RBA: 646,081 SF Manhattan Typical Floor: 17,000 SF New York, NY 10022 Developer: Hines/Sterling Equities Total Avail: 20,907 SF Management: - % Leased: 97.8% Recorded Owner: 885 Third Owner LLC

Expenses: 2012 Tax @ $13.78/sf, 2011 Est Tax @ $13.62/sf; 2001 Ops @ $21.86/sf, 2012 Est Ops @ $16.04/sf Parcel Number: 1327-0001 Amenities: Atrium, Bus Line, Concierge, Energy Star Labeled, Metro/Subway, On Site Management, Property Manager on Site, Restaurant

Floor SF Avail Floor Contig Bldg Contig Rent/SF/Yr + Svs Occupancy Term Type P 24th 6,710 6,710 6,710 Withheld Vacant Thru Feb 2017 Sublet P 27th 8,927 8,927 8,927 Withheld Vacant Negotiable Direct P 31st 5,270 5,270 5,270 Withheld Vacant Negotiable Direct

Copyrighted report licensed to CBRE - 17996. 3 55 W 46th St - Tower 46 - Office Tower

Location: Tower 46 Building Type: Class A Office AKA 50 W 47th St Midtown Cluster Status: Built Sep 2013 Times Square Submarket Stories: - Manhattan RBA: 347,000 SF New York, NY 10036 Typical Floor: - Developer: Skidmore, Owings & Merrill LLP Total Avail: 173,520 SF % Leased: 50.0% Management: Citibank Recorded Owner: Extell Gt Llc

Expenses: 2013 Tax @ $0.99/sf Parcel Number: 1262-0012 Amenities: Bus Line, Fitness Center, Metro/Subway, Security System

Floor SF Avail Floor Contig Bldg Contig Price Rent/SF/Yr + Svs Occupancy Term Type E 2nd 28,439 28,439 28,439 No Withheld Vacant 10 yrs Direct P 22nd / Suite 2201 5,554 21,889 145,081 No Withheld Vacant 5-10 yrs New P 22nd / Suite 2202 5,397 21,889 145,081 No Withheld Vacant 5-10 yrs New P 22nd / Suite 2203 5,385 21,889 145,081 No Withheld Vacant 5-10 yrs New P 22nd / Suite 2204 5,553 21,889 145,081 No Withheld Vacant 5-10 yrs New E 26th 22,518 22,518 145,081 No Withheld Vacant 10 yrs New E 27th 22,518 22,518 145,081 No Withheld Vacant 10 yrs New P 28th 5,028 10,593 145,081 No Withheld Vacant 5-10 yrs New P 28th 5,565 10,593 145,081 No Withheld Vacant 5-10 yrs New E 30th 22,518 22,518 145,081 No Withheld Vacant 10 yrs New E 31st 22,523 22,523 145,081 No Withheld Vacant 10 yrs New E 32nd 22,522 22,522 145,081 No Withheld Vacant 10 yrs New

Copyrighted report licensed to CBRE - 17996. 4 1745 Broadway - Random House Tower

Location: Random House Tower Building Type: Class A Office/Office/Residential AKA 1741-1747 Broadway S/W/C of 56th and Broadway Status: Built Jan 2003 Midtown Cluster Stories: 50 Columbus Circle Submarket RBA: 674,000 SF Manhattan Typical Floor: 13,480 SF New York, NY 10019 Developer: Related Management Total Avail: 13,526 SF Management: Cushman & Wakefield % Leased: 100% Recorded Owner: 1745 Broadway Associates, LLC

Expenses: 2016 Tax @ $2.08/sf; 2007 Combined Est Tax/Ops @ $26.70/sf Parcel Number: 1027-1501 Amenities: 24 Hour Availability, Banking, Bus Line, Concierge, Conferencing Facility, Mail Room, Metro/Subway, On Site Management, Property Manager on Site, Security System

Floor SF Avail Floor Contig Bldg Contig Price Rent/SF/Yr + Svs Occupancy Term Type P LL 2,830 2,830 8,526 No Withheld Arranged Negotiable Direct P GRND 1,800 - 5,696 5,696 8,526 No Withheld Arranged Negotiable Direct P 17th 100 - 5,000 5,000 5,000 No Withheld 30 Days Negotiable Sublet

Copyrighted report licensed to CBRE - 17996. 5 10 E 53rd St

Location: AKA 4-10 E 53rd St Building Type: Class A Office Between Madison & Fifth Avenues Midtown Cluster Status: Built 1972 Plaza District Submarket Stories: 37 Manhattan RBA: 388,864 SF New York, NY 10022 Typical Floor: 8,887 SF Developer: Percy & Harold D. Uris Total Avail: 147,990 SF % Leased: 61.9% Management: SL Green Realty Corp. Recorded Owner: New Millennium Estates Ltd

Expenses: 2015 Tax @ $13.57/sf, 2011 Est Tax @ $11.28/sf; 2011 Ops @ $13.13/sf, 2010 Est Ops @ $13.64/sf Parcel Number: 1288-0007 Amenities: 24 Hour Availability, Banking, Bus Line, Metro/Subway

Floor SF Avail Floor Contig Bldg Contig Rent/SF/Yr + Svs Occupancy Term Type E 4th 16,406 16,406 98,438 Withheld Vacant 5-10 yrs Direct E 5th 16,406 16,406 98,438 Withheld Vacant 5-10 yrs Direct E 6th 16,406 16,406 98,438 Withheld Vacant 5-10 yrs Direct E 7th 16,406 16,406 98,438 Withheld Vacant 5-10 yrs Direct E 8th 16,406 16,406 98,438 Withheld Vacant 5-10 yrs Direct E 9th 16,408 16,408 98,438 Withheld Vacant 5-10 yrs Direct E 11th 8,462 8,462 8,462 Withheld Vacant 5-10 yrs Direct P 12th / Suite 1201 3,863 3,863 3,863 Withheld Vacant 5-10 yrs Direct P 13th / Suite 1301 3,863 3,863 3,863 Withheld Vacant 5-10 yrs Direct P 14th / Suite 1401 1,868 1,868 1,868 Withheld Vacant 5-10 yrs Direct P 18th 3,055 3,055 3,055 Withheld Vacant 5-10 yrs Direct P 18th 3,055 3,055 28,441 Withheld Vacant 5-10 yrs Direct

Copyrighted report licensed to CBRE - 17996. 5 10 E 53rd St(cont'd) Floor SF Avail Floor Contig Bldg Contig Rent/SF/Yr + Svs Occupancy Term Type E 19th 8,462 8,462 28,441 Withheld Vacant 5-10 yrs Direct E 20th 8,462 8,462 28,441 Withheld Vacant 5-10 yrs Direct E 21st 8,462 8,462 28,441 Withheld Vacant 5-10 yrs Direct

Copyrighted report licensed to CBRE - 17996. 6 250 W 55th St - 250 West 55th Street

Location: 250 West 55th Street Building Type: Class A Office AKA 267 W 54th St Midtown Cluster Status: Built May 2013 Columbus Circle Submarket Stories: 38 Manhattan RBA: 989,000 SF New York, NY 10019 Typical Floor: 27,688 SF Developer: Boston Properties, Inc. Total Avail: 72,428 SF % Leased: 93.3% Management: Boston Properties, Inc. Recorded Owner: Gladden Properties Llc

Expenses: 2009 Tax @ $0.13/sf Parcel Number: 1026-0055 Amenities: Bus Line, Metro/Subway

Floor SF Avail Floor Contig Bldg Contig Rent/SF/Yr + Svs Occupancy Term Type P GRND 7,525 7,525 7,525 $300.00/+util Vacant Negotiable New P 25th / Suite A 4,762 4,762 4,762 Withheld Vacant Negotiable New P 25th / Suite B 5,760 5,760 5,760 Withheld 01/2017 Negotiable New P 30th 5,851 5,851 5,851 Withheld 30 Days Thru Jul 2020 Sublet E 35th 4,695 - 24,265 24,265 48,530 Withheld Vacant Negotiable New E 36th 24,265 24,265 48,530 Withheld Vacant Negotiable Direct

Copyrighted report licensed to CBRE - 17996. 7 444 Madison Ave

Location: AKA 432-450 Madison Ave Building Type: Class A Office Between 49th & 50th Streets Midtown Cluster Status: Built 1931, Renov 1997 Plaza District Submarket Stories: 42 Manhattan RBA: 490,000 SF New York, NY 10022 Typical Floor: 13,426 SF Developer: Alexander S. Bing Total Avail: 91,742 SF % Leased: 89.4% Management: CBRE/VII 444 Madison Recorded Owner: VII 444 Madison Lessee LLC

Expenses: 2012 Tax @ $10.97/sf, 2011 Est Tax @ $11.37/sf; 2011 Ops @ $11.47/sf, 2012 Est Ops @ $18.32/sf Parcel Number: 1285-0015 Amenities: 24 Hour Availability, Bus Line, Concierge, Energy Star Labeled, Metro/Subway, On Site Management, Property Manager on Site

Floor SF Avail Floor Contig Bldg Contig Rent/SF/Yr + Svs Occupancy Term Type P 4th 8,759 8,759 8,759 Withheld Vacant Thru May 2023 Sublet P 5th 12,822 12,822 12,822 Withheld Vacant 7-10 yrs Direct E 6th 20,293 20,293 20,293 Withheld 01/2017 7-10 yrs Direct P 7th 5,476 5,476 5,476 Withheld Vacant 7-10 yrs Direct P 8th 4,598 4,598 4,598 Withheld Vacant 7-10 yrs Direct E 26th 5,455 5,455 5,455 Withheld Vacant 7-10 yrs Direct P 28th 3,376 3,376 3,376 Withheld Vacant 7-10 yrs Direct E 30th 5,455 5,455 5,455 Withheld Vacant 7-10 yrs Direct E 33rd 5,455 5,455 5,455 Withheld Vacant 7-10 yrs Direct E 35th 5,455 5,455 5,455 Withheld Arranged Negotiable Sublet E 37th 5,455 5,455 5,455 Withheld Vacant Thru May 2019 Sublet

Copyrighted report licensed to CBRE - 17996. 7 444 Madison Ave(cont'd) Floor SF Avail Floor Contig Bldg Contig Rent/SF/Yr + Svs Occupancy Term Type E 39th 5,455 5,455 5,455 Withheld Vacant 7-10 yrs Direct E 42nd 3,688 3,688 3,688 Withheld Vacant 7-10 yrs Direct

Copyrighted report licensed to CBRE - 17996. 8 500 Park Ave

Location: S/W/C East 59th Street Building Type: Class A Office Midtown Cluster Plaza District Submarket Status: Built 1960 Manhattan Stories: 11 New York, NY 10022 RBA: 260,000 SF Typical Floor: 19,557 SF Developer: Tishman Speyer Total Avail: 25,798 SF % Leased: 90.1% Management: JLL Recorded Owner: PPF OFF 500 Park Ave LLC

Expenses: 2015 Tax @ $9.52/sf; 2011 Ops @ $12.23/sf, 2012 Est Ops @ $14.08/sf Parcel Number: 1294-0037 Amenities: 24 Hour Availability, Atrium, Banking, Bus Line, Commuter Rail, Concierge, Metro/Subway, Property Manager on Site

Floor SF Avail Floor Contig Bldg Contig Price Rent/SF/Yr + Svs Occupancy Term Type P BSMT 4,605 5,335 6,115 No Withheld Vacant Negotiable Direct P BSMT 730 5,335 6,115 No Withheld Vacant Negotiable Direct P GRND 780 780 6,115 No Withheld Vacant Negotiable Direct E 6th 8,107 - 19,683 19,683 19,683 No Withheld Vacant 5-15 yrs Direct

Copyrighted report licensed to CBRE - 17996. 9 437 Madison Ave

Location: AKA 31-43 E 49th St Building Type: Class A Office Between 49th & 50th Streets Midtown Cluster Status: Built 1967, Renov Jan 2015 Plaza District Submarket Stories: 40 Manhattan RBA: 858,550 SF New York, NY 10022 Typical Floor: 29,300 SF Developer: William Kaufman & Jack Weiler Total Avail: 112,613 SF % Leased: 86.9% Management: Sage Realty Corporation Recorded Owner: William Kaufman Organization

Expenses: 2012 Tax @ $14.45/sf, 2011 Est Tax @ $14.10/sf; 2007 Ops @ $29.99/sf, 2012 Est Ops @ $18.79/sf Parcel Number: 1285-0021 Parking: Ratio of 0.13/1,000 SF Amenities: Banking, Bus Line, Concierge, Metro/Subway, On Site Management, Property Manager on Site

Floor SF Avail Floor Contig Bldg Contig Rent/SF/Yr + Svs Occupancy Term Type P GRND / Suite 4 1,069 1,069 1,069 Withheld Arranged Negotiable New P GRND / Suite 5 598 598 598 Withheld Arranged Negotiable New E 14th 30,790 30,790 30,790 Withheld Vacant 10-15 yrs New P 21st / Suite 21A 6,045 18,799 18,799 Withheld Vacant 5-10 yrs New P 21st / Suite 21B 2,890 18,799 18,799 Withheld Vacant 5-10 yrs New P 21st / Suite 21C 3,460 18,799 18,799 Withheld Vacant 5-10 yrs New P 21st / Suite 21D 6,404 18,799 18,799 Withheld Vacant 5-10 yrs New E 22nd 8,000 - 17,400 17,400 17,400 Withheld Vacant 10-15 yrs New E 26th 18,650 18,650 37,300 Withheld Vacant 10-15 yrs New E 27th 18,650 18,650 37,300 Withheld Vacant 10-15 yrs New P 34th / Suite 34C 3,468 3,468 3,468 Withheld Vacant 5-10 yrs New P 35th 3,189 3,189 3,189 Withheld 01/2017 Negotiable New

Copyrighted report licensed to CBRE - 17996. 10 75 Rockefeller Plaza - Rockefeller Center

Location: AKA 14-36 W 52nd St Building Type: Class A Office Between Fifth & Sixth Avenues Midtown Cluster Status: Under Renovation, delivers Nov 2016 Plaza District Submarket Stories: 33 Manhattan RBA: 623,000 SF New York, NY 10019 Typical Floor: 14,060 SF Developer: The Rockefeller Group Total Avail: 437,173 SF % Leased: 29.8% Management: - Recorded Owner: -

Expenses: 2012 Tax @ $9.20/sf, 2011 Est Tax @ $9.09/sf; 2007 Ops @ $0.01/sf, 2012 Est Ops @ $20.29/sf Parcel Number: 1267-0022 Amenities: 24 Hour Availability, Atrium, Banking, Bus Line, Metro/Subway, Property Manager on Site, Restaurant

Floor SF Avail Floor Contig Bldg Contig Rent/SF/Yr + Svs Occupancy Term Type P GRND / Suite 2 5,202 5,202 5,202 Withheld 12/2016 Negotiable New E 6th 30,640 30,640 122,615 Withheld Vacant Negotiable New E 7th 30,640 30,640 122,615 Withheld Vacant Negotiable New E 8th 30,640 30,640 122,615 Withheld Vacant Negotiable New E 9th 30,695 30,695 122,615 Withheld Vacant Negotiable New E 10th 12,920 12,920 12,920 Withheld Vacant Negotiable New E 11th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 12th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 13th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 15th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 16th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 17th 14,116 14,116 282,320 Withheld Vacant Negotiable New

Copyrighted report licensed to CBRE - 17996. 10 75 Rockefeller Plaza - Rockefeller Center(cont'd) Floor SF Avail Floor Contig Bldg Contig Rent/SF/Yr + Svs Occupancy Term Type E 18th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 19th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 20th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 21st 14,116 14,116 282,320 Withheld Vacant Negotiable New E 22nd 14,116 14,116 282,320 Withheld Vacant Negotiable New E 23rd 14,116 14,116 282,320 Withheld Vacant Negotiable New E 24th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 25th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 26th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 27th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 28th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 29th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 30th 14,116 14,116 282,320 Withheld Vacant Negotiable New E 31st 14,116 14,116 282,320 Withheld Vacant Negotiable New E 32nd 14,116 14,116 14,116 Withheld Vacant Negotiable New

Copyrighted report licensed to CBRE - 17996. 11 1095 Avenue of the Americas - Salesforce Tower - Three Bryant Park

Location: Salesforce Tower Building Type: Class A Office AKA 1081-1097 Avenue of the Americas Between 41st & 42nd Streets Status: Built 1972, Renov 2008 Midtown Cluster Stories: 41 Penn Plaza/Garment Submarket RBA: 1,484,325 SF Manhattan Typical Floor: 31,707 SF New York, NY 10036 Developer: - Total Avail: 180,313 SF Management: CBRE % Leased: 97.3% Recorded Owner: 3bp Property Owner Llc

Expenses: 2016 Tax @ $16.79/sf, 2015 Est Tax @ $6.33/sf Parcel Number: 0094-7501, 0994-1001, 0994-1002, 0994-1003, 0994-1004, 0994-1005, 0994-1006, 0994-1007, 0994-1008, 0994-1009, 0994- 1010, 0994-1011 Amenities: Atrium, Bus Line, Metro/Subway, Property Manager on Site

Floor SF Avail Floor Contig Bldg Contig Price Rent/SF/Yr + Svs Occupancy Term Type P GRND / Suite D 805 805 805 No $700.00/+elec Arranged 10-15 yrs Direct E 6th 34,411 34,411 34,411 No Withheld Vacant Negotiable Direct P 14th 10,506 10,506 10,506 No Withheld Vacant Thru Sep 2020 Sublet E 16th 34,325 34,325 34,325 No Withheld 04/2017 Thru Apr 2029 Sublet P 24th 6,395 6,395 6,395 No Withheld Vacant Negotiable Direct P 24th 5,374 5,374 5,374 No Withheld Arranged Negotiable Direct P 32nd 9,413 9,413 9,413 No Withheld Arranged Negotiable Direct P 32nd 3,157 3,157 3,157 No Withheld Arranged Negotiable Direct P 33rd 4,636 4,636 4,636 No Withheld Vacant Thru Feb 2021 Sublet E 39th 35,663 35,663 71,291 No Withheld 04/2017 Thru Apr 2029 Sublet

Copyrighted report licensed to CBRE - 17996. 11 1095 Avenue of the Americas - Salesforce Tower - Three Bryant Park(cont'd) Floor SF Avail Floor Contig Bldg Contig Price Rent/SF/Yr + Svs Occupancy Term Type E 40th 35,628 35,628 71,291 No Withheld 04/2017 Thru Apr 2029 Sublet

Copyrighted report licensed to CBRE - 17996. Copyrighted report licensed to CBRE - 17996. HSBC BUILDING | ADDENDA

ADDENDUM D

OPERATING DATA

Database: CBRESTANDARD Rent Roll Page: 1 Bldg Status: Active only 452 Fifth Avenue Date: 10/11/2016 10/11/2016 Time: 03:02 PM

GLA Monthly Annual Monthly ExpenseMonthly ------Future Rent Increases ------Bldg Id-Suit Id Lease ID Occupant Name Rent Start Expiration Sqft Base Rent Rate PSF Cost Recovery Stop Other Income Cat Date Monthly Amount PSF

Vacant Suites

DNU001-CLR22 Vacant 4,139

Occupied Suites

DNU001-21011009088 Wood Mackenzie,Inc.5/25/2012 12/31/2017 10,338 74,950.5087.00 8,121.52 500.00

DNU001-21021011637 452 Fifth Owners LLC / BMO6/1/2012 12/31/2016 3,554 24,718.00 83.46

DNU001-21031012619 Tripointe Capital Partners,LLC5/1/2013 12/30/2017 2,536 17,963.3385.00 1,270.39

DNU001-22011012471 KLS Diversified Asset Manageme2/1/2013 12/31/2022 16,428 109,520.0080.00 8,893.10 5,255.84 RNT 2/1/2019 116,365.00 85.00

DNU001-23011009086 VTB Capital Inc10/1/2012 9/30/2022 16,428 119,103.0087.00 12,689.33 625.00 RNT 10/1/2017 127,317.00 93.00

DNU001-24011008215 NCH Capital Inc.9/1/2012 12/31/2027 16,428 120,472.0088.00 12,689.33 1,975.00 RNT 1/1/2018 127,317.00 93.00 RNT 1/1/2023 134,162.00 98.00 DNU001-28011014363 Tilden Park Capital Management11/1/2013 9/30/2024 16,140 141,225.00105.00 6,036.13 6,845.84 RNT 10/1/2019 154,675.00 115.00

DNU001-29011016830 StormHarbour Partners,LP12/2/2014 1/31/2026 16,298 131,742.1797.00 5,531.49 1,562.50 RNT 2/1/2021 142,607.50 105.00

DNU001-30011018463 Varadero Capital,L.P.6/24/2015 1/31/2026 7,636 64,906.00102.00 1,597.80 1,562.50 RNT 2/1/2021 70,633.00 111.00

DNU001-30012018578 Triangle Capital,LLC9/18/2015 1/31/2026 7,054 61,722.50105.00 1,475.99 RNT 11/18/2020 67,600.83 115.00

DNU001-B&M 008728 Baker & McKenzie LLP2/1/2012 1/31/2028 0 62,055.71 4,072.45

Additional Space DNU001-14021 008735 2/1/2013 1/31/2028 8,127 30,476.25 45.00 RNT 2/1/2018 33,862.50 50.00 RNT 2/1/2023 37,248.75 55.00 Additional Space DNU001-15011 008736 2/1/2013 1/31/2028 16,263 92,157.00 68.00 RNT 2/1/2018 98,933.25 73.00 RNT 2/1/2023 107,064.75 79.00 Additional Space DNU001-16011 008737 2/1/2013 1/31/2028 16,263 92,157.00 68.00 RNT 2/1/2018 98,933.25 73.00 RNT 2/1/2023 107,064.75 79.00 Additional Space DNU001-17011 008738 2/1/2013 1/31/2028 16,267 92,179.66 68.00 RNT 2/1/2018 98,957.59 73.00 RNT 2/1/2023 107,091.09 79.00 Additional Space DNU001-18011 008739 2/1/2013 1/31/2028 16,275 92,225.00 68.00 RNT 2/1/2018 99,006.25 73.00 RNT 2/1/2023 107,143.75 79.00 Additional Space DNU001-19011 008740 2/1/2013 1/31/2028 16,314 92,446.00 68.00 RNT 2/1/2018 99,243.50 73.00 RNT 2/1/2023 107,400.50 79.00 Additional Space DNU001-20011 008741 2/1/2013 1/31/2028 16,294 92,332.67 68.00 RNT 2/1/2018 99,121.83 73.00 RNT 2/1/2023 107,268.83 79.00 Total 105,803 583,973.58 62,055.71 4,072.45 v = Excluded from totals, space occupied by another tenant' Database: CBRESTANDARD Rent Roll Page: 2 Bldg Status: Active only 452 Fifth Avenue Date: 10/11/2016 10/11/2016 Time: 03:02 PM

DNU001-GRD21006707 Staples East, Inc12/30/2011 12/31/2026 5,731 158,385.95107.64 8,648.73 1,352.49 CND 1/1/2017 1,393.06 0.95 CND 1/1/2018 1,434.85 0.98 CND 1/1/2019 1,477.90 1.00 CND 1/1/2020 1,522.24 1.03 CND 1/1/2021 1,567.90 1.07 CND 1/1/2022 1,614.94 1.10 CND 1/1/2023 1,663.39 1.13 CND 1/1/2024 1,713.29 1.16 CND 1/1/2025 1,764.69 1.20 CND 1/1/2026 1,817.63 1.24 RTR 12/30/2016 173,802.61 118.12 RTR 12/30/2021 190,760.95 129.64 Additional Space DNU001-Mez1 008305 12/30/2011 12/31/2026 11,926 Total 17,657 158,385.95 8,648.73 1,352.49

DNU001-GRD31008222 Panera LLC5/30/2012 5/31/2027 5,865 79,166.67161.98 3,078.36 1,521.55 CND 1/1/2017 1,567.19 3.21 CND 1/1/2018 1,614.21 3.30 CND 1/1/2019 1,662.64 3.40 CND 1/1/2020 1,712.51 3.50 CND 1/1/2021 1,763.89 3.61 CND 1/1/2022 1,816.81 3.72 CND 1/1/2023 1,871.31 3.83 CND 1/1/2024 1,927.45 3.94 CND 1/1/2025 1,985.27 4.06 CND 1/1/2026 2,044.83 4.18 CND 1/1/2027 2,106.18 4.31 RTR 6/1/2017 88,666.67 181.42 RTR 6/1/2022 99,306.67 203.19 DNU001-ManGr008301 Man Investments Holdings Inc9/22/2011 7/31/2022 0 332,844.83 36,275.44 13,750.00 RNT 7/27/2017 357,199.33 0.00

Additional Space DNU001-25011 008302 7/27/2012 7/31/2022 16,288 Additional Space DNU001-26011 008303 7/27/2012 7/31/2022 16,291 Additional Space DNU001-27011 008304 7/27/2012 7/31/2022 16,130 Total 48,709 332,844.83 36,275.44 13,750.00

DNU001-OFFIC004431 HSBC Office4/13/2010 4/30/2020 0 2,014.27 HVR 1/1/2017 -150,664.50 0.00 HVR 1/1/2018 -155,186.50 0.00 Additional Space DNU001-10011 004432 4/13/2010 4/30/2020 37,845 191,705.25 60.79 36,896.12 19,306.28 CND 1/1/2017 17,935.66 5.69 CND 1/1/2018 18,473.73 5.86 CND 1/1/2019 19,027.94 6.03 CND 1/1/2020 19,598.78 6.21

v = Excluded from totals, space occupied by another tenant' Database: CBRESTANDARD Rent Roll Page: 3 Bldg Status: Active only 452 Fifth Avenue Date: 10/11/2016 10/11/2016 Time: 03:02 PM

Additional Space DNU001-10012 004433 4/13/2010 4/30/2020 12,388 37,485.50 36.31 7,748.43 Additional Space DNU001-11011 004434 4/13/2010 4/30/2020 16,938 85,800.08 60.79 16,538.36 Additional Space DNU001-11012 004435 4/13/2010 4/30/2020 11,760 35,585.25 36.31 7,330.36 Additional Space DNU001-12012 004437 4/13/2010 4/30/2020 11,716 35,452.08 36.31 7,321.99 Additional Space DNU001-2011 004446 4/13/2010 4/30/2020 7,025 29,854.17 51.00 6,866.53 Additional Space DNU001-2012 004447 4/13/2010 4/30/2020 13,225 40,018.25 36.31 8,240.85 Additional Space DNU001-3011 004475 4/13/2010 4/30/2020 41,132 174,798.75 51.00 40,120.06 Additional Space DNU001-3012 004457 4/13/2010 4/30/2020 13,247 40,084.83 36.31 8,000.15 Additional Space DNU001-4011 004458 4/13/2010 4/30/2020 41,460 176,192.66 51.00 40,468.94 Additional Space DNU001-4012 004459 4/13/2010 4/30/2020 13,197 39,933.50 36.31 8,235.27 Additional Space DNU001-5011 004460 4/13/2010 4/30/2020 41,323 175,610.50 51.00 40,329.39 Additional Space DNU001-5012 004461 4/13/2010 4/30/2020 13,185 39,897.17 36.31 8,232.48 Additional Space DNU001-6011 004462 4/13/2010 4/30/2020 41,247 192,112.83 55.89 40,259.62 Additional Space DNU001-6012 004463 4/13/2010 4/30/2020 13,241 40,066.66 36.31 8,276.15 Additional Space DNU001-7011 004464 4/13/2010 4/30/2020 40,686 189,499.91 55.89 39,701.41 Additional Space DNU001-7012 004465 4/13/2010 4/30/2020 12,455 37,688.25 36.31 7,762.34 Additional Space DNU001-8011 004466 4/13/2010 4/30/2020 41,604 193,775.58 55.89 40,575.98 Additional Space DNU001-8012 004467 4/13/2010 4/30/2020 12,399 37,518.83 36.31 7,751.22 Additional Space DNU001-9011 004468 4/13/2010 4/30/2020 29,448 149,169.91 60.79 28,731.60 Additional Space DNU001-9012 004469 4/13/2010 4/30/2020 12,390 37,491.58 36.31 7,748.43 Additional Space DNU001-CLR12 004470 4/13/2010 4/30/2020 1,052 2,325.08 26.52 Additional Space DNU001-CLR31 004471 4/13/2010 4/30/2020 1,081 2,389.17 26.52 Additional Space DNU001-SC111 004472 4/13/2010 4/30/2020 9,359 20,683.42 26.52 Total 489,403 2,005,139.21 417,135.68 21,320.55

DNU001-PRESS008945 R.W. Pressprich & Co.2/1/2013 1/31/2023 0 16,585.72 6,041.67

Additional Space DNU001-12011 009789 2/1/2013 1/31/2023 15,865 89,901.67 68.00 RNT 2/1/2018 96,512.08 73.00 Additional Space DNU001-14011 009790 2/1/2013 1/31/2023 6,498 38,988.00 72.00 RNT 2/1/2018 41,695.50 77.00 Total 22,363 128,889.67 16,585.72 6,041.67

DNU001-Retai 004428 HSBC Retail4/13/2010 4/30/2020 7,667 148,595.17232.57 870.66 CND 1/1/2017 896.78 1.40 CND 1/1/2018 923.69 1.45 CND 1/1/2019 951.40 1.49 CND 1/1/2020 979.94 1.53 RTR 5/1/2017 156,024.92 244.20 RTR 5/1/2018 163,826.17 256.41 RTR 5/1/2019 172,017.50 269.23 Additional Space DNU001-CLR11 004429 4/13/2010 4/30/2020 18,127 63,057.00 41.74 14,234.24 RTR 5/1/2017 66,210.67 43.83 RTR 5/1/2018 69,521.17 46.02 RTR 5/1/2019 72,997.25 48.32 Additional Space DNU001-CLR21 004430 4/13/2010 4/30/2020 1,671 3,408.17 Total 27,465 211,652.17 14,234.24 4,278.83 v = Excluded from totals, space occupied by another tenant' Database: CBRESTANDARD Rent Roll Page: 4 Bldg Status: Active only 452 Fifth Avenue Date: 10/11/2016 10/11/2016 Time: 03:02 PM

DNU001-ROOF008861 Cablevision Lightpath, Inc.11/3/2011 11/2/2021 0 385.88 BRN 1/1/2017 405.17 0.00

DNU001-ROOF0101612 Lightower Fiber Networks3/14/2012 3/31/2017 0 405.17

DNU001-ROOF0200314 Cogent Comunications Inc.1/1/2016 12/31/2020 0 515.00 BRN 1/1/2017 530.45 0.00 BRN 1/1/2018 546.37 0.00 BRN 1/1/2019 562.77 0.00 BRN 1/1/2020 579.64 0.00 DNU001-SC211004423 HSBC-STORAGE4/13/2010 4/30/2020 19,270 75,837.50 47.23

Additional Space DNU001-SC121 004426 4/13/2010 4/30/2020 11,825 46,537.50 47.23 626.88 CND 1/1/2017 645.68 0.66 CND 1/1/2018 665.05 0.67 CND 1/1/2019 685.01 0.70 CND 1/1/2020 705.56 0.72 Total 31,095 122,375.00 0.00 626.88

Totals: Occupied Sqft: 99.52% 54 Units 861,200 4,490,055.63 616,318.96 71,291.10 Vacant Sqft: 0.48% 1 Units 4,139 Total Sqft: 55 Units 865,339 4,490,055.63

Grand Total: Occupied Sqft: 99.52% 54 Units 861,200 4,490,055.63 616,318.96 71,291.10 Vacant Sqft: 0.48%1 Units 4,139 Total Sqft: 55 Units 865,339 4,490,055.63

v = Excluded from totals, space occupied by another tenant' HSBC BUILDING | ADDENDA

ADDENDUM E

ARGUS SUPPORTING SCHEDULES

HSBC Building (HSBC Extend) 452 Fifth Avenue New York, NY Presentation Rent Roll & Current Term Tenant Summary As of Oct-2016 for 865,339 Square Feet

Tenant Name Floor Rate & Amount CPI & Current Months Pcnt Description of Imprvmnts Commssns Assumption about Type & Suite Number SqFt per Year Changes Changes Porters' Wage to to Operating Expense Rate Rate subsequent terms Lease Dates & Term Bldg Share per Month on to Miscellaneous Abate Abate Reimbursements Amount Amount for this tenant

1 Vacant Stge - 1W39th $29.81 Sep-2026 $32.79 - - - Full Service: - $14.97 Market Industrial, Suite: 000 4,139 $123,368 Pays no expense 4.78% See assumption: Sep-2021 to Aug-2031 0.48% $2.48 reimbursement. $61,949 Storage 120 Months $10,281

2 HSBC - Retail Storage $22.25 Apr-2015 $24.48 - - - Full Service: - - Option Industrial, Suite: 000 1,671 $37,180 Pays no expense See assumption: Apr-2010 to Apr-2020 0.19% $1.85 reimbursement. Storage 121 Months $3,098

3 HSBC - Retail Branch $173.55 Apr-2011 $182.23 - - - See method: HSBC - - Option Retail, Suite: 0001 7,667 $1,330,608 Apr-2012 $191.34 452 Retail See assumption: Apr-2010 to Apr-2020 0.89% $14.46 Apr-2013 $200.91 tail 452 ($450) 121 Months $110,884 Apr-2014 $210.95 Apr-2015 $221.50 Apr-2016 $232.57 Apr-2017 $244.20 Apr-2018 $256.41 Apr-2019 $269.23 Apr-2020 $282.69

4 HSBC - Retail Cellar $31.15 Apr-2011 $32.71 - - - Full Service: - - Option Industrial, Suite: 000 18,127 $564,656 Apr-2012 $34.34 Pays no expense See assumption: Apr-2010 to Apr-2020 2.09% $2.60 Apr-2013 $36.06 reimbursement. tail Cellar 452 121 Months $47,055 Apr-2014 $37.86 Apr-2015 $39.76 Apr-2016 $41.74 Apr-2017 $43.83 Apr-2018 $46.02 Apr-2019 $48.32 Apr-2020 $50.74

5 HSBC - 1W39 (2-12) $33.20 Apr-2015 $36.31 - - - See method: 1 - - Option Office, Suite: 001W39 139,203 $4,621,043 West 39th See assumption: Apr-2010 to Apr-2020 16.09% $2.77 ce - 1W39 ($50) 121 Months $385,087

6 HSBC - 1W39 (cellar) $24.30 Apr-2015 $26.52 - - - Full Service: - - Option Industrial, Suite: 001 1,052 $25,560 Pays no expense See assumption: Apr-2010 to Apr-2020 0.12% $2.02 reimbursement. Cellar - 1W39 121 Months $2,130

7 HSBC - 452 Fifth (2-1 $50.38 Apr-2015 $55.22 - - - See method: HSBC - - Option Office, Suite: 002-11 338,708 $17,065,056 452 (2-11) See assumption: Apr-2010 to Apr-2020 39.14% $4.20 Flr 2-11) - $75 121 Months $1,422,088

8 RW Pressprich $68.00 Feb-2018 $73.00 - - - See method: RW - - Market Office, Suite: 012 15,865 $1,078,820 Pressprich (Elec See assumption: Feb-2013 to Jan-2023 1.83% $5.67 only) FL 12-19) - $85 120 Months $89,902

9 RW Pressprich $72.00 Feb-2018 $77.00 - - - See method: RW - - Market Office, Suite: 014a 6,498 $467,856 Pressprich (RE See assumption: Feb-2013 to Jan-2023 0.75% $6.00 tax, OP Ex) FL 12-19) - $85 120 Months $38,988

10 Baker & McKenzie $45.00 Feb-2018 $50.00 - 1-12 100% See method: Baker - - Market Office, Suite: 014b 8,127 $365,715 Feb-2023 $55.00 w/RE Tax See assumption: Feb-2012 to Jan-2028 0.94% $3.75 FL 12-19) - $85 192 Months $30,476

(continued on next page) HSBC Building (HSBC Extend) 452 Fifth Avenue New York, NY Presentation Rent Roll & Current Term Tenant Summary As of Oct-2016 for 865,339 Square Feet (continued from previous page)

11 Baker & McKenzie $68.00 Feb-2018 $73.00 - 1-12 100% See method: Baker - - Market Office, Suite: 015 16,263 $1,105,884 Feb-2023 $79.00 See assumption: Feb-2012 to Jan-2028 1.88% $5.67 FL 12-19) - $85 192 Months $92,157

12 Baker & McKenzie $68.00 Feb-2018 $73.00 - 1-12 100% See method: Baker - - Market Office, Suite: 016 16,263 $1,105,884 Feb-2023 $79.00 See assumption: Feb-2012 to Jan-2028 1.88% $5.67 FL 12-19) - $85 192 Months $92,157

13 Baker & McKenzie $68.00 Feb-2018 $73.00 - 1-12 100% See method: Baker - - Market Office, Suite: 017 16,267 $1,106,156 Feb-2023 $79.00 See assumption: Feb-2012 to Jan-2028 1.88% $5.67 FL 12-19) - $85 192 Months $92,180

14 Baker & McKenzie $68.00 Feb-2018 $73.00 - 1-12 100% See method: Baker - - Market Office, Suite: 018 16,275 $1,106,700 Feb-2023 $79.00 See assumption: Feb-2012 to Jan-2028 1.88% $5.67 FL 12-19) - $85 192 Months $92,225

15 Baker & McKenzie $68.00 Feb-2018 $73.00 - 1-12 100% See method: Baker - - Market Office, Suite: 019 16,314 $1,109,352 Feb-2023 $79.00 See assumption: Feb-2012 to Jan-2028 1.89% $5.67 FL 12-19) - $85 192 Months $92,446

16 Baker & McKenzie $68.00 Feb-2018 $73.00 - 1-12 100% See method: Baker - - Market Office, Suite: 020 16,294 $1,107,992 Feb-2023 $79.00 See assumption: Feb-2012 to Jan-2028 1.88% $5.67 L 20-27) - $100 192 Months $92,333

17 Baker & McKenzie (opt $100.00 Jan-2023 $105.00 - - - See method: $75.00 $24.74 Market Office, Suite: 021 16,428 $1,642,800 Office (13-30) 2.39% See assumption: Jan-2018 to Jan-2028 1.90% $8.33 $ 1,232,100 $406,457 L 20-27) - $100 121 Months $136,900

18 Wood Mackenzie $87.00 - - - 1-6 100% See method: Wood - - ReAbsorb Office, Suite: 021a 10,338 $899,406 McKenzie See assumption: May-2012 to Dec-2017 1.19% $7.25 L 20-27) - $100 68 Months $74,951

19 TriPointe Capital Par $85.00 - - - 1 100% See method: - - ReAbsorb Office, Suite: 021b 2,536 $215,560 TriPointe See assumption: May-2013 to Dec-2017 0.29% $7.08 L 20-27) - $100 56 Months $17,963

20 452 Fifth Owners LLC $83.46 Jan-2017 $85.96 - - - See method: IDB - - ReAbsorb Office, Suite: 021c 3,554 $296,617 Group See assumption: Jun-2012 to Dec-2017 0.41% $6.95 L 20-27) - $100 67 Months $24,718

21 KLS Diversified $80.00 Feb-2018 $85.00 - 1-12 100% See method: KLS - - Market Office, Suite: 022 16,428 $1,314,240 See assumption: Feb-2013 to Dec-2022 1.90% $6.67 L 20-27) - $100 119 Months $109,520

22 VTB Capital $0.00 Apr-2012 $87.00 - 1-11 100% See method: VTB - - Market Office, Suite: 023 16,428 $0 Oct-2017 $93.00 Capital See assumption: Dec-2011 to Sep-2022 1.90% $0.00 L 20-27) - $100 130 Months $0

23 NCH Capital $88.00 Jan-2018 $93.00 - 1-12 100% See method: NCH - - Market Office, Suite: 024 16,428 $1,445,664 Jan-2023 $98.00 See assumption: Sep-2012 to Dec-2027 1.90% $7.33 L 20-27) - $100 184 Months $120,472

24 Man Group $82.00 Jul-2017 $88.00 - 1-10 100% See method: Man - - Market Office, Suite: 025 16,288 $1,335,616 Group See assumption: Sep-2011 to Jul-2022 1.88% $6.83 L 20-27) - $100 131 Months $111,301

25 Man Group $82.00 Jul-2017 $88.00 - 1-10 100% See method: Man - - Market Office, Suite: 026 16,291 $1,335,862 Group See assumption: Sep-2011 to Jul-2022 1.88% $6.83 L 20-27) - $100 131 Months $111,322

26 Man Group $82.00 Jul-2017 $88.00 - 1-10 100% See method: Man - - Market Office, Suite: 027 16,130 $1,322,660 Group See assumption: Sep-2011 to Jul-2022 1.86% $6.83 L 20-27) - $100 131 Months $110,222

27 Tilden Park Capital M $0.00 Oct-2014 $105.00 - 1-11 100% See method: - - Market Office, Suite: 028 16,140 $0 Oct-2019 $115.00 Tilden Park See assumption: Nov-2013 to Sep-2024 1.87% $0.00 L 28-30) - $105 131 Months $0

28 Stormharbour Securiti $97.00 Feb-2021 $105.00 - 1-14 100% See method: - - Market Office, Suite: 029 16,298 $1,580,906 StormHarbor See assumption: Dec-2014 to Jan-2026 1.88% $8.08 L 28-30) - $105 134 Months $131,742

29 Varadero Capital $102.00 Feb-2021 $111.00 - 1-11 100% See method: - - Market Office, Suite: 030 7,636 $778,872 Varadero See assumption: Jun-2015 to Jan-2026 0.88% $8.50 L 28-30) - $105 128 Months $64,906

30 Triangle Capital $105.00 Nov-2020 $115.00 - 1 100% See method: - - Market Office, Suite: 030B 7,054 $740,670 Triangle See assumption: Sep-2015 to Jan-2026 0.82% $8.75 L 28-30) - $105 125 Months $61,723

31 PANERA BREAD $161.98 Nov-2016 $181.42 - 1-7 100% See method: - - Market Retail, Suite: 452 R-1 5,865 $950,000 Nov-2021 $203.18 Panera See assumption: Nov-2011 to May-2027 0.68% $13.50 ra Bread ($350) 187 Months $79,167

32 STAPLES $107.64 Dec-2016 $118.12 - - - See method: - - Market Retail, Suite: 452 R-2 17,657 $1,900,631 Dec-2021 $129.64 Staples 452 See assumption: Dec-2011 to Dec-2026 2.04% $8.97 Dec-2026 $139.45 etail - Staples 181 Months $158,386

33 HSBC - 452 (Cellar) $24.30 Apr-2015 $26.52 - - - Full Service: - - Option Industrial, Suite: H00 10,440 $253,688 Pays no expense See assumption: Apr-2010 to Apr-2020 1.21% $2.02 reimbursement. Storage 121 Months $21,141

34 HSBC - VLT Storage $42.93 Apr-2015 $47.23 - - - See method: - - Option Office, Suite: SubC1 11,825 $507,682 Storage (elec) See assumption: Apr-2010 to Apr-2020 1.37% $3.58 Storage VLT 121 Months $42,307

35 HSBC - VLT Storage $42.93 Apr-2015 $47.23 - - - See method: - - Option Office, Suite: SubC2 19,270 $827,318 Storage (elec) See assumption: Apr-2010 to Apr-2020 2.23% $3.58 Storage VLT 121 Months $68,943

Total Occupied SqFt 861,200 Total Available SqFt 4,139 HSBC BUILDING | ADDENDA

ADDENDUM F

ENGAGEMENT LETTER

HSBC BUILDING | ADDENDA

ADDENDUM G

QUALIFICATIONS

HSBC BUILDING | ADDENDA

QUALIFICATIONS OF

HELENE JACOBSON, MAI Managing Director

CB RICHARD ELLIS, INC. VALUATION & ADVISORY SERVICES

One Penn Plaza, Suite 1835 New York, NY 10119 (212) 207-6106

EDUCATION

Master of Science in Real Estate: Valuation and Analysis, New York University New York, NY Bachelor of Business Administration - Finance, George Washington University Washington, D.C.

Appraisal Institute Course work at NYU Masters Program fulfills all requirements for Appraisal Institute courses.

Standards of Professional Practice A & B.

LICENSES/CERTIFICATIONS

Certified Real Estate General Appraiser: State of New York State (#46000026005) Certified Real Estate General Appraiser: State of New Jersey (RG 01924) General Appraiser: Pennsylvania (GA-001790-R)

PROFESSIONAL Appraisal Institute

Designated Member (MAI), Certificate No. 11050

EMPLOYMENT EXPERIENCE

15 years of Real Estate appraisal and Consulting experience throughout the Northeast region.

1989-1991 Office of Thrift Supervision Bowie, Maryland 1992 - Present CB Richard Ellis Inc. New York, New York Assignments include full and partial interest appraisals of office buildings, commercial lofts, malls, shopping centers, apartments, cooperatives, condominiums, townhouses, industrial facilities, residential and office market studies, portfolio valuations and multi-property

HSBC BUILDING | ADDENDA

QUALIFICATIONS OF

MARK T. GODFREY Vice President

CB RICHARD ELLIS, INC. VALUATION & ADVISORY SERVICES

One Penn Plaza, Suite 1835 New York, NY 10119 (212) 715 5719

PROFESSIONAL Associate Member of the Appraisal Institute (membership #400010)

Certified Real Estate General Appraiser: State of New York State (#46000041668)

EDUCATION Bachelor of Business Administration, Specialization in Accounting Hofstra University, Hempstead, New York, 1995

Certificate in the Appraisal of Investment Properties New York University SCPS, New York, New York, Spring 2002

Completed all required coursework to qualify for MAI Appraisal Institute & NYU, New York, NY

EMPLOYMENT EXPERIENCE

1998-present CB Richard Ellis, Inc. New York, NY Vice President

1995-1997 CB Richard Ellis, Inc. New York, NY Regional Director of Research

Engaged in the appraisal and consultation of commercial real estate throughout the Northeastern United States. Assignments include full and partial interest appraisals of investment grade office buildings, hotels, high-rise residential buildings, condominium conversions, garden apartment complexes, industrial buildings, headquarters facilities, laboratory facilities, regional malls, community retail facilities, automobile dealerships, self-storage facilities, stand-alone retail properties and golf courses.