Appraisal Report 12,771 SF/GCA - 10,502 SF/GRA Income Producing Multi-Unit Commercial-Office Property 415 Ing. Manuel V. Domenech Avenue, Reparto Parque Central Development Hato Rey Sur Ward, San Juan, Puerto Rico #20150226022 – Mandy’s BBQ Corporation Requested by Ms. Damaris Figueroa Rivera Appraisal Coordinator, Credit Risk Management Unidad Centralizada de Tasaciones / Oriental-Puerto Rico PO Box 364745 San Juan, Puerto Rico 00936-4745 As of April 21, 2015 Prepared on May 13, 2015 Suite A, 1001 Ponce de León Avenue, San Juan, Puerto Rico, 00907 Tel. 977-1940 / Fax 977-1903 / www.tasadorcomercial.com May 13, 2015 Ms. Damaris Figueroa Rivera Appraisal Coordinator, Credit Risk Management Unidad Centralizada de Tasaciones Oriental-Puerto Rico PO Box 364745 San Juan, Puerto Rico 00936-4745 RE:(13012) Dear Ms. Figueroa: In accordance with your request, we are submitting an appraisal report of a three (3) level multi- unit income producing commercial-office property that comprise 12,771 square feet of gross construction area and 10,502 square feet of gross rentable area, built on a 718.20 square meter site, located at 415 of Manuel V. Domenech Avenue in Reparto Parque Central Development of the Hato Rey Sur Ward in San Juan of Puerto Rico. The subject property enjoy a rear services entrance through Montilla Street. The property is leased/owner occupied yet mostly vacant. The purpose of this appraisal is to form an opinion of the “as is” market and liquidation values of the lease fee interest of the subject property, as defined in the report, subject to the assumptions, limiting conditions and certification also included in the report, as of April 21, 2015. The client/intended user is Oriental-Puerto Rico. The intended use of this appraisal report is for commercial credit administration regarding to the subject property. We have performed a personal inspection of the physical, legal and financial aspects of the subject property. A thorough investigation and analysis of the factors influencing value in subject’s market area was also carried out and is the opinion of the appraisers that the “as is” market and liquidation values of the leased fee interest of the subject property, under the market conditions prevailing as of April 21, 2015, are: Market Value $915,000 (NINE HUNDRED FIFTEEN THOUSAND DOLLARS) Liquidation Value $690,000 (SIX HUNDRED NINETY THOUSAND DOLLARS) Efraín Tirado Appraisal Group, PSC, Suite A, 1001Ponce de León Avenue, San Juan, Puerto Rico Tel. 787-977-1940(41), Fax 787-977-1903, E-mail efraí[email protected] 2 12,771 SF/ GCA - 10,502 SF GRA - Multi-unit Income Producing Commercial-Office Property 415, Ing. Manuel V. Domenech Avenue, Reparto Parque Central Development, Hato Rey Sur Ward, San Juan, Puerto Rico The following is an appraisal report in a narrative format, which presents information considered relevant to the lease fee interest in this property and the methods by which collected data has been analyzed in arriving to our value conclusion. The report, in its entirety, including all assumptions and limiting conditions, is an integral part and inseparable from this letter. The report is for the sole use of the client. However, the client may provider only complete, final copies of the report to third parties who shall review such in connection with loan underwriting or securitizing efforts. The appraiser is not required to testify or explain as to appraisal result other than to respond to the client for routine and customary questions. The value estimate indicated in this report is based on market data and conditions as of the appraisal date, which is projected to remain stable. Any substantial changes in market conditions could have a favorable or unfavorable influence on the real estate value. We accept no responsibility regarding future changes in the market that could not be anticipated as of the effective date of the appraisal report. The appraiser is not responsible for the unauthorized use of this report. It has been a privilege to assist you in this appraisal assignment. If you have any questions concerning the analysis or the report or if we can be of further assistance please don’t hesitate to contact us. Respectfully submitted, Efraín Tirado Mártir, PE, PMP, CMEA Raúl A. del Campo González Certified General Real Estate Appraiser Certified General Real Estate Appraiser 160 GCA, 770 EPA 222 GCA, 885 EPA Efraín Tirado Appraisal Group, PSC, Suite A, 1001Ponce de León Avenue, San Juan, Puerto Rico Tel. 787-977-1940(41), Fax 787-977-1903, E-mail efraí[email protected] 3 12,771 SF/ GCA - 10,502 SF GRA - Multi-unit Income Producing Commercial-Office Property 415, Ing. Manuel V. Domenech Avenue, Reparto Parque Central Development, Hato Rey Sur Ward, San Juan, Puerto Rico TABLE OF CONTENTS SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS ............................................................ 5 SCOPE OF WORK ................................................................................................................................... 8 COMPETENCY PROVISION ................................................................................................................. 9 STATEMENT OF THE APPRAISAL - INTRODUCTION ................................................................... 10 HISTORY OF THE PROPERTY ........................................................................................................... 12 LEGAL DESCRIPTION ......................................................................................................................... 12 AREA ANALYSIS - THE ISLAND OF PUERTO RICO ...................................................................... 19 SAN JUAN MUNICIPALITY ................................................................................................................ 38 NEIGHBORHOOD ANALYSIS ............................................................................................................ 48 PROPERTY PRODUCTIVITY ANALYSIS ......................................................................................... 49 HIGHEST AND BEST USE ANALYSIS .............................................................................................. 68 APPRAISAL PROCESS AND APPROACHES .................................................................................... 70 INSURABLE (VALUE) VALUATION ................................................................................................. 71 THE INCOME CAPITALIZATION APPROACH ................................................................................ 74 LIQUIDATION VALUE ........................................................................................................................ 84 GENERAL LIMITING CONDITIONS .................................................................................................. 86 GENERAL ASSUMPTIONS ................................................................................................................. 88 CERTIFICATE OF THE APPRAISERS ................................................................................................ 90 ADDENDA ............................................................................................................................................. 91 Efraín Tirado Appraisal Group, PSC, Suite A, 1001Ponce de León Avenue, San Juan, Puerto Rico Tel. 787-977-1940(41), Fax 787-977-1903, E-mail efraí[email protected] 4 12,771 SF/ GCA - 10,502 SF GRA - Multi-unit Income Producing Commercial-Office Property 415, Ing. Manuel V. Domenech Avenue, Reparto Parque Central Development, Hato Rey Sur Ward, San Juan, Puerto Rico SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Property Type Multi-unit Income Producing Commercial-Office Property Rights Appraised Lease Fee (Interest) Purpose of Appraisal Determine the “as is” market and liquidation values of the lease fee interest on the subject property as of the effective date Intended Use To assist the client in connection with a financial transaction Location 415 Ing. Manuel V. Domenech Avenue, Reparto Parque Central Development, Hato Rey Sur Ward, San Juan, Puerto Rico Frontage/Access The property enjoys adequate frontage/Access to Ing. Manuel V. Domenech Avenue and a rear service access to the Montilla Street Tax Code number 062-079-617-02 Coordinates 18.413031o -66.068827o Date of Valuation April 21, 2015 Date of Report May 13, 2015 Site Area 718.20 square meter equivalent to 0.1825 “cuerda” Shape/Topography Rectangular/Level Utilities Electric power line, potable water, sewer and telephone Soil & Subsoil/ Drainage Firm and apparently stable Zoning C-1, now C-L (light commercial) as defined by the Territorial Ordinance Regulation of the San Juan Municipality Flood Zone Zone “X” Panel 72000C0365J with an effective date of November 18, 2009 Floor Rentable Areas Area SF Monthly Rent Building Areas Area SF Building Area Commercial L-1 1,325 $3,000 Commercial L-1 1,325 Commercial L-2 1,908 Owner occupied Commercial L-2 1,908 Commercial L-3 1,633 $3,400 Commercial L-3 1,633 Commercial L-4 496 Commercial L-4 496 First $2,500 Mezzanine 467 Mezzanine 467 Common Areas 1,036 Shed 330 G R A 5,829 G C A 7,195 Office 1 1,453 Vacant Office 1 1,453 Office 2 1,570 Vacant Office 2 1,570 Second Office 3 1,650 Vacant Office 3 1,650 Common Areas 371 G R A 4,673 G C A 5,044 Elevator 100 Stair 162 Third Metallic Storage 270 Vacancy 37% G C A 532 Total G R A 10,502 G C A 12,771 Loss Factor 15% Efraín Tirado Appraisal Group, PSC, Suite A, 1001Ponce de León Avenue, San Juan, Puerto