1510-1526 Lakeshore Road W (Gardens), Oakville

APPRAISAL REPORT OF:

THE GARDENS at CORONATION Located at 1510-1526 Lakeshore Road,

Effective Date: January 19, 2015

Prepared for:

March 31, 2015

The Fuller Landau Group Inc. in its capacity as court-appointed Monitor of Hush Homes Inc., Hush Inc., 2122763 Ontario Inc., 2142301 Ontario Inc. and 2164566 Ontario Inc. As Proposed Monitor or the Hush Applicant 151 Bloor Street West, 12th Floor Toronto, ON M5S 1S4

ATTENTION: Mr. Gary Abramson

Re: Appraisal of the Gardens Housing Development Located at 1510-1526 Lakeshore Road W, Oakville, Ontario Property of Hush Homes Inc. Our File No. 60000486

Dear Mr. Abramson: In accordance with your request, we hereby submit an appraisal report of the property located at 1510-1526 Lakeshore Road W, Oakville, Ontario. The purpose of the appraisal is to estimate the a) “as-is” and b) “as-if completed” market value for the Gardens at Coronation (Garde2828ns) housing development. We understand the appraisal will serve to assist a CCAA court ordered function. The appraisal report has been developed in accordance with the Canadian Uniform Standards of Professional Appraisal Practice (“The Standards”) as developed by the Standards Board of the Appraisal Institute of Canada. A copy of the corporate curriculum vitae is included in Appendix A. This is a Narrative Appraisal Report, and as such it presents a detailed and concise description of the appraisal process with supporting documentation concerning the data, reasoning and analysis also retained in the appraiser’s file. Definitions of Appraisal Terms and Explanations are included in the Addendum as Appendix B. The depth of discussion contained in this report is specific to the needs of the client and is for the intended use as stated in the report. The report is for the sole use of our client, The Fuller Landau Group Inc. in its capacity as court-appointed Monitor of Hush Homes Inc., Hush Inc., 2122763 Ontario Inc., 2142301 Ontario Inc. and 2164566 Ontario Inc.

/…1

Page 2 Mr. Abramson March 31, 2015

As a result of our investigations and analysis, it is our opinion that estimated market value of the subject property as at the effective date of January 19, 2015 (date of initial order date made by Justice Penny), is estimated as follows:

Final Estimate of Market Value

A) "As-Is" Market Value $9,610,000

B) "As if Complete" Market Value $17,140,000

HYPOTHETICAL LIMITING CONDITION & EXTRAORDINARY ASSUMPTION The market value estimates contained herein are made on the Hypothetical Conditions and Extraordinary Assumptions as follows:

1. In the completion of this appraisal assignment we have relied on product and financial information supplied by HUSH Homes Inc., as it relates to Agreements of Purchase and Sale, project budget costs, costs to complete, housing product type standard finishes, etc.; and, 2. The unsold vacant residential building lots are assumed to have full services at the site boundary (water, sanitary and storm) and development charges paid; and, 3. That the proposed home building works are completed in a proper workmanship like manner in accordance with the plans, specifications and budget provided by Hush Homes Inc.; 4. The “as-if-completed” value is an aggregate total based on an overall average rate per square foot and does not include any upgrades or premiums that is common with custom homes; and, 5. The value estimates herein for the “as-if-completed” reflects actual gross sale price of the sold homes, exclusive of deposits; and, 6. We did not obtain an opinion on the state of title or any of the encumbrances, and are not qualified in these legal matters and have not read the documents registered against title; and, 7. That the subject site is free and clear of any environmental contamination.

Any variance from these assumptions and the development specifics provided to us could alter the market value opinion contained herein; and as such, we retain the right to alter our final estimate of value if this assumption is later proven inaccurate.

Details of our investigation and analysis are set out in the following report. If further information is required we would be pleased to furnish it upon request. Respectfully submitted,

Gus Dal Colle, AACI, MRICS, PLE

TABLE OF CONTENTS

Summary of Salient Facts ...... 1 Regional Overview ...... 3 Site Description ...... 11 The Gardens at Coronation ...... 12 Project “Snapshot” – As of January 19, 2015 ...... 13 Site Plan Outlining Remaining and Sold Inventory ...... 14 Photographs of the Subject Property ...... 16 Architect Rendering / Picture of Partially Completed Dwelling and Floor Plans...... 23 Land Use Policy ...... 33 Highest and Best Use ...... 35 Approach to Value ...... 44 Direct Comparison Approach – “As-Is Market Value” ...... 45 Direct Comparison Approach – “As-If Completed”...... 54 Final Estimate of Value ...... 65 Certification ...... 66 Assumptions and Limiting Conditions ...... 67 Scope of the Appraisal ...... 70 Addendum ...... 71

Addendum

Appendix A Corporate Curriculum Vitae

Appendix B Definitions of Appraisal Terms and Explanations

1510-1526 Lakeshore Road W (Gardens), Oakville

SUMMARY OF SALIENT FACTS

Property Details The Fuller Landau Group Inc. in its capacity as court-appointed Monitor of Hush Client: Homes Inc., Hush Inc., 2122763 Ontario Inc., 2142301 Ontario Inc. and 2164566 Ontario Inc. Municipal Address: 51 & 55 Belvedere Drive; 29, 37, 38, 41, 45, 54, 57, 58 Hamlet Common, Oakville

Effective Date: January 19, 2015

Date of Inspection: January 19, 2015 PIN: 24770-0125, -0126, -0127, -0129, -0130, -0131, -0134, -0135, -0136, -0137 Lots 2 & 3, Plan 20M1105 Subject to an Easement in Gross as in HR986468; Subject to an Easement in Gross as in HR986471; Subject to an Easement in Gross as in HR986474; Subject to an Easement in Gross as in HR986477; Town of Oakville. & Legal Description: Lots 4, 6, 7, 8, 11, 12, 13 & 14 Plan 20M1105 T/W an undivided common interest in Halton Common Elements Condominium Corporation No. 622; Subject to an Easement in Gross as in HR986468; Subject to an Easement in Gross as in HR986471; Subject to an Easement in Gross as in HR986474; Subject to an Easement in Gross as in HR986477; Town of Oakville. Owner of Record: Hush Homes Inc.

Purpose of Appraisal: To estimate current market value

Function of Appraisal: Serve a CCAA court ordered function

Property Rights Appraised: Fee Simple

Exposure Time: 4 to 8 months Property Description

Located on the south side of Lakeshore Road West, east of Third Line, in the City Location: of Oakville We understand that Oakville Facility Inc. assembled the Subject's entire site in 2006 and 2007. Hush Homes Inc. then acquired the assembled site on August 31, 2007 for a consideration of $8,000,000. Hush Homes Inc. then acquired a small triangular parcel (approx. 1,819 sq. ft.) along the sites LakeShore Road Frontage History: for a consideration of $71,216. Hush Homes Inc. proposed the development of fourteen detached dwelling lots for the site, 11 on a private condominium road. Hush Homes Inc. has since sold, built and closed on four of the parcels leaving the remaining 10 parcels and roadway (Hamlet Common) make up the current subject property. Easement/Right of Way: Multiple Easements noted within subject property

Configuration: Mix of irregular and rectangular shaped parcels Land Use Control

Greenbelt: Not Applicable

Official Plan: Low Density Residential

Zoning: Mix of RL2-0 sp:294 & RL5-0 sp:293 Highest & Best Use

Existing Use Infill single family residential development Highest & Best Use (as if Infill single family residential development vacant) Highest & Best Use (as Not applicable improved)

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1510-1526 Lakeshore Road W (Gardens), Oakville

AERIAL MAP

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1510-1526 Lakeshore Road W (Gardens), Oakville

REGIONAL OVERVIEW

The Greater Toronto area, which includes Toronto and the surrounding regions of Halton, Peel, Durham and York, is the largest economic centre in Canada. Population figures according to the 2001 Census were 5.1 million for the Greater Toronto Area and 2.48 million for the City of Toronto. That represents growth rates of 9.8% and 4% respectively over the 1996 census. The Town of Oakville is part of Halton Region within the Greater Toronto Area. Both the Town of Oakville and the Region of Halton have experienced tremendous population growth and this trend is expected to continue. Between 2006 and 2011, the Town of Oakville’s population increased slightly over 10 per cent.

REGIONAL LOCATION MAP

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1510-1526 Lakeshore Road W (Gardens), Oakville

ECONOMIC AND DEMOGRAPHIC PROFILE – TOWN OF OAKVILLE

Population 182,520 (2011 Census) Median Household Income $105,563 (2011 Census) Unemployment rate 5.3% (2011 Census) Labour Force 87,390 (2011 Census)

Tax Rates (2015) Residential - 0.834726% Multi-Residential– 1.643454% Commercial – 1.817263% Industrial – 2.984843%

House Prices (2014) Average Residential Dwelling Value - $795,229 (all home types)

Number of Households 62,412 (2011 Census)

Participation Rate 70.9% (2011 Census)

Major Employers Ford Motor Company of Canada – 3491 Sheridan College – 1500 DL Group Corp.-761 The Regional Municipality of Halton – 1650 Halton District School Board – 4000 Town of Oakville (Municipal Government) – 690

INFRASTRUCTURE The principal artery is the QEW providing quick access to the City of Toronto to the east and Burlington, Hamilton and Niagara to the west and south. Highway No. 403 and 407 can be accessed a short distance to the northeast providing access north to Mississauga and the Greater Toronto Area beyond. Surface bus service is available along major arterial roadways throughout the built-up areas of the town.

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1510-1526 Lakeshore Road W (Gardens), Oakville

NEIGHBOURHOOD MAP

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1510-1526 Lakeshore Road W (Gardens), Oakville

Neighbourhood Profile

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1510-1526 Lakeshore Road W (Gardens), Oakville

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1510-1526 Lakeshore Road W (Gardens), Oakville

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1510-1526 Lakeshore Road W (Gardens), Oakville

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1510-1526 Lakeshore Road W (Gardens), Oakville

Neighbourhood Uses and Trends

The subject property is located in an established single family residential area referred to as Old Oakville. The area is bounded by Rebecca Street to the north, Woodhaven Park Drive to the east, Third Line to the west, and Lake Ontario to the south. The area consists mainly of single- family residential homes settled amongst a number of parks and within close proximity to Lake Ontario. The dwellings are a mix of older bungalows and newer executive residential dwellings. The area is considered almost fully developed, with new development primarily consisting of infill residential and the redevelopment of older dwellings. The newer development consists mainly of custom luxury and estate-type homes The neighbourhood has excellent access to a broad range of public and private amenities and public transit. It has excellent access to the QEW highway, public transportation (along Lakeshore Road) and is within close proximity to the historic downtown core of Old Oakville. The neighbourhood has great access to schools, churches, parks with the subject abutting Coronation Park to the east. The neighbourhood is underpinned by its proximity and access to Lake Ontario and is considered a highly desirable residential destination, in particular for luxury custom housing.

Adjacent Uses North: Single Family Residential

South: Single Family Residential

East: Coronation Park

West: Single Family Residential

ADJACENT USES MAP:

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1510-1526 Lakeshore Road W (Gardens), Oakville

SITE DESCRIPTION

General Description

Located on the south side of Lakeshore Road West, east of Third Line, in the City of Location: Oakville

Municipal Address(es): 51 & 55 Belvedere Drive; 29, 37, 38, 41, 45, 54, 57, 58 Hamlet Common, Oakville

PIN(s): 24770-0125, -0126, -0127, -0129, -0130, -0131, -0134, -0135, -0136, -0137 Lots 2 & 3, Plan 20M1105 Subject to an Easement in Gross as in HR986468; Subject to an Easement in Gross as in HR986471; Subject to an Easement in Gross as in HR986474; Subject to an Easement in Gross as in HR986477; Town of Oakville. & Legal Description: Lots 4, 6, 7, 8, 11, 12, 13 & 14 Plan 20M1105 T/W an undivided common interest in Halton Common Elements Condominium Corporation No. 622; Subject to an Easement in Gross as in HR986468; Subject to an Easement in Gross as in HR986471; Subject to an Easement in Gross as in HR986474; Subject to an Easement in Gross as in HR986477; Town of Oakville.

Ownership: Hush Homes Inc.

Site Configuration: Irregular

Adjacent Land Uses: Single family residential

Lot Access Points: Belvedere Drive and Hamlet Common via Lakeshore Road West

Lot Nos. on Private Road: 4, 6, 7, 8, 11, 12, 13, 14

Lots Nos. Public Road: 2 and 3 Front of the site is generally level and at road grade while the rear of the site is Topography: generally undulating and drops towards the rear. Easements/Rights-of-way: Multiple easements registered on title

Environmental: None noted - See Assumptions and Limiting Conditions

Building Improvements: Ranges from vacant lots to partially completed dwellings

Current Use: Residential

Zoning: Mix of RL2-0 sp:294 & RL5-0 sp:293 Services Street Surface: Paved Hydro: Yes

Sidewalks: Yes Well: No

Street Lights: Yes Septic: No

Municipal Water: Yes Sanitary Sewer: Yes Comments The subject is an infill residential development site which initially consisted of 14 lots to be developed with single family detached dwellings. Of the initial 14 lots, 4 lots were sold, built and are now occupied. These parcels have transferred to new ownership and are not part of the valuation of the subject property. As at the Effective Date the subject consists of the 10 remaining lots, 3 of which have been sold and partially built with detached dwellings. The remaining 7 lots are vacant and unsold. We understand that the lots which only have access from Hamlet Common are part of a Condominium Corporation; while the lots accessible from Belvedere Drive are considered independent sites.

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1510-1526 Lakeshore Road W (Gardens), Oakville

THE GARDENS AT CORONATION

The Gardens at Coronation is a luxury custom home infill housing development approved for 14 residential building lots. As at the effective date, only ten lots remain of which three lots have been sold and contain homes that are partially built. The remaining seven lots are serviced, but not sold and vacant. The lots that have access from Hamlet Common are part of a Condominium Corporation (Lots 4, 6, 7, 8, 11, 12, 13 & 14); while lots 2 & 3 fronting Belvedere Drive, a public road, are not part of the Condominium Corporation. A summary of the development is tabled below:

Gardens Development Lot Details

Lot Frontage Avg. Lot Lot Area Sale Lot # Sold (Ft.) Depth (Ft.) (Sq. Ft.) Status 1 Yes 73.9 126.2 9,010 Closed 2 No 79.5 113.9 8,999 For Sale 3 No 108.5 104.8 10,215 For Sale 4 No 49.2 102.6 5,002 For Sale 5 Yes 49.2 97.7 5,074 Closed 6 Yes 49.2 97.0 5,005 Sold 7 No 49.2 114.9 6,866 For Sale 8 Yes 49.2 113.9 7,408 Sold 9 Yes 49.2 97.5 5,063 Closed 10 Yes 49.2 103.4 5,259 Closed 11 Yes 49.5 108.0 5,469 Sold 12 No 46.6 114.7 5,137 For Sale 13 No 44.6 110.5 5,045 For Sale 14 No 52.8 105.2 5,007 For Sale Low 44.6 97.0 5,002 High 108.5 126.2 10,215 Average 57.1 107.9 6,326 We note that of the 14 building lots, four lots (No.’s 1, 5, 9 and 10) are sold, built and ownership transferred to the respective home owner(s). As such, these four lots do not form part of this appraisal and market value estimate. Building lots 6, 8 and 11 are sold; however, construction of the homes has not been completed and therefore forms part of the subject property and market value estimates made herein. Lot 6 has been sold, but construction has not started, therefore lot 6 it will be treated as a vacant residential lot. Construction has begun on the homes on lots 8 and 11; however, construction is only partially completed. As per our site visit and discussions with the Site Supervisor, we understand that lot 8 has foundation poured and is close to being fully framed; while Lot 11 is almost fully built.

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1510-1526 Lakeshore Road W (Gardens), Oakville

PROJECT “SNAPSHOT” – AS OF JANUARY 19, 2015 Below provides a current “snapshot” of the Gardens project, including the sold lots which have closed.

The Gardens at Coronation, Oakville, ON Sales & Deposit Summary Dwelling Size Asking/Selling Deposit Deposit Total Closing Construction Sale Lot # Sold Purchaser Sale Date (Sq. Ft.) Price (HUSH) (OMH) Deposits Date Status Status 1 Yes Anne Braun & Jeff 3,395 $1,606,450 $40,000 $195,967 $235,967 18-Feb-11 26-Jun-12 Complete Closed 2 No - 3,426 $1,979,900 - - $0 - - - For Sale 3 No - 3,729 $2,149,900 - - $0 - - - For Sale 4 No - 3,134 $1,697,900 - - $0 - - - For Sale 5 Yes Judy DeLuca 2,367 $1,175,000 $40,000 $141,038 $181,038 7-Nov-11 28-Feb-14 Complete Closed 6 Yes Sylvia Bandoian 2,538 $1,467,350 $40,000 $180,103 $220,103 9-Jun-14 TBD Not Started Sold 7 No - 4,529 $2,400,000 - - $0 - - - For Sale 8 Yes Jun Li 4,431 $2,011,494 $40,000 $256,640 $296,640 7-Nov-11 TBD Framing Sold 9 Yes James & Kathryn 1,622 $919,900 $40,000 $97,985 $137,985 26-Apr-12 28-Jan-14 Complete Closed 10 Yes Neil & Susan 3,170 $1,583,900 $40,000 $78,793 $118,793 30-Jul-12 29-Jul-14 Finishing Closed Anita Simon & 11 Yes 3,070 $1,530,900 $40,000 $74,818 $114,818 30-Jul-12 TBD Finishing Sold Christopher Pickett 12 No - 3,053 $1,580,900 - - $0 - - For Sale 13 No - 3,318 $1,714,900 - - $0 - - For Sale 14 No - 2,966 $1,538,900 - - $0 - - For Sale Totals 44,748 $23,357,394 $280,000 $1,025,344 $1,305,344

We note that 4 lots (No.’s 1, 5, 9 and 10) are sold, built and ownership transferred to the respective home owner(s). As such, these four lots do not form part of this appraisal and market value estimate.

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1510-1526 Lakeshore Road W (Gardens), Oakville

SITE PLAN OUTLINING REMAINING AND SOLD INVENTORY

12 11 1 13 10

2 14 9

Sold & Closed 8 Sold (not finished) 3 4 5 6 7 For Sale

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1510-1526 Lakeshore Road W (Gardens), Oakville

Detailed Description of Remaining Inventory

Detailed Lot Descriptions Taxes / Assessment Estimated Lot Lot Size Lot Construction Lot # Address Roll Number Sq. Ft. Lot Lot Character (2015) Taxes* Frontage (Sq. Ft.) Configuration Status Area At grade with Belvedere Drive; slightly below grade with Hamlet Common; 2 55 Belvedere Drive 240102001007707 $611,250 $5,102.26 79.5 8,999 $0.57 Irregular Vacant generally slopes downward from east to west. At grade with Belvedere Drive; slightly below grade with Hamlet Common; 3 51 Belvedere Drive 240102001007710 $657,500 $5,488.32 108.5 10,215 $0.54 Irregular Vacant generally slopes downward from east to west. Northern portion of lot is level and at grade with Hamlet Common; however, 4 29 Hamlet Common 240102001007713 $434,000 $3,622.71 49.2 5,002 $0.72 Irregular Vacant the lot slopes slightly downward toward the southern boundary. Northern portion of lot is level and at grade with Hamlet Common; however, 6 37 Hamlet Common 240102001007719 $434,000 $3,622.71 49.2 5,005 $0.72 Rectangular Vacant the lot slopes slightly downward toward the southern boundary. Northern portion of lot is level and at grade with Hamlet Common; however, 7 41 Hamlet Common 240102001007722 $524,000 $4,373.96 49.2 6,866 $0.64 Irregular Vacant the lot slopes slightly downward toward the southern boundary. Generally level and at road grade Partially around partially completed dwelling; 8 45 Hamlet Common 240102001007725 $547,250 $4,568.04 49.2 7,408 $0.62 Irregular Completed however, slopes slightly toward (Framing) southeastern boundary. Partially 11 57 Hamlet Common 240102001007734 $421,000 $3,514.20 49.5 5,469 $0.64 Rectangular Completed Generally level and at road grade. (Finishing) 12 58 Hamlet Common 240102001007737 $406,000 $3,388.99 46.6 5,137 $0.66 Rectangular Generally level and at road grade. 13 54 Hamlet Common 240102001007740 $436,000 $3,639.41 44.6 5,045 $0.72 Rectangular Generally level and at road grade 14 38 Hamlet Common 240102001007743 $436,000 $3,639.41 52.8 5,007 $0.73 Irregular Generally level and at road grade. *Taxes are estimated by multiplying the 2015 Assessment Values by Oakvilles 2015 Residential Tax Rate

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1510-1526 Lakeshore Road W (Gardens), Oakville

PHOTOGRAPHS OF THE SUBJECT PROPERTY

Lot #2 Lot #3

Lot #4 Lot #6

Lot #7 Lot #8 (Partially Constructed – Framing)

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1510-1526 Lakeshore Road W (Gardens), Oakville

PHOTOGRAPHS OF THE SUBJECT PROPERTY

Lot #11 (Partially Constructed – Finishing) Lot #12

Lot #13 Lot #14

Belvedere Drive Looking Southerly Hamlet Common Looking Northerly

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1510-1526 Lakeshore Road W (Gardens), Oakville

PHOTOGRAPHS OF THE SUBJECT PROPERTY

Hamlet Common Looking Southerly Lakeshore Road West Looking Westerly

Lakeshore Road West Looking Easterly

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1510-1526 Lakeshore Road W (Gardens), Oakville

PHOTOGRAPHS OF COMPLETED INVENTORY (SOLD, CLOSED AND NOT PART OF THE APPRAISAL)

Lot #1 Lot #5

Lot #10

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1510-1526 Lakeshore Road W (Gardens), Oakville

GARDENS PROJECT INVENTORY AND STATUS OVERVIEW AS AT EFFECTIVE DATE The table below provides a detailed inventory overview and status, as at the effective date, of the Gardens housing development:

The Gardens at Coronation, Oakville, ON Project Status as at Effective Date Asking/Selling Dwelling Size # of # of Frontage Lot Area Price Per Price Per Sale Lot # Sold Purchaser Price (Sq. Ft.) Beds Baths (Ft.) (Sq. Ft.) Sq. Ft. Front Foot Status 2 No - $1,979,900 3,426 4 5 79.5 8,999 $578 $24,906 For Sale 3 No - $2,149,900 3,729 4 4 108.5 10,215 $577 $19,821 For Sale 4 No - $1,697,900 3,134 4 5 49.2 5,002 $542 $34,478 For Sale Sylvia 6 Yes $1,467,350 2,538 N/A N/A 49.2 5,005 $578 $29,817 Sold Bandoian 7 No - $2,400,000 4,529 4 5 49.2 6,866 $530 $48,768 For Sale 8 Yes Jun Li $2,011,494 4,431 N/A N/A 49.2 7,408 $454 $40,874 Sold Anita Simon 11 Yes & Christopher $1,530,900 3,316 N/A N/A 49.5 5,469 $462 $30,922 Sold Pickett 12 No - $1,580,900 3,053 4 4 46.6 5,137 $518 $33,934 For Sale 13 No - $1,714,900 3,318 4 4 44.6 5,045 $517 $38,462 For Sale 14 No - $1,538,900 2,966 4 4 52.8 5,007 $519 $29,134 For Sale Low $1,467,350 2,538 44.6 5,002 $454 $19,821 High $2,400,000 4,529 108.5 10,215 $578 $48,768 Average $1,807,214 3,444 57.8 6,415 $527 $33,112

The table above outlines the standard square footage and floor plans of the development. For the purpose of this appraisal, we will value the development, “as-if completed”, based on the above noted home size (sq. ft.), no. of beds, no. of baths and standard finishes. We have included the standard home features and finishes that are offered by the current home builder to a potential home buyer. The standard finishes appear to be typical for this type of custom home offering. We note that the standard finish does not include a finished basement or upgrades that are typical with this type of luxury and custom housing product. The standard features and finishes are provided in the following pages.

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1510-1526 Lakeshore Road W (Gardens), Oakville

STANDARD HOME FEATURES AND FINISHES

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1510-1526 Lakeshore Road W (Gardens), Oakville

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1510-1526 Lakeshore Road W (Gardens), Oakville

ARCHITECT RENDERING / PICTURE OF PARTIALLY COMPLETED DWELLING AND FLOOR PLANS

LOT 2 – FOR SALE

Main Floor Plan: Second Storey Floor Plan:

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1510-1526 Lakeshore Road W (Gardens), Oakville

LOT 3 – FOR SALE

Main Floor Plan: Second Storey Floor Plan:

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1510-1526 Lakeshore Road W (Gardens), Oakville

LOT 4 – FOR SALE

Main Floor Plan: Second Storey Floor Plan:

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1510-1526 Lakeshore Road W (Gardens), Oakville

LOT 6 – SOLD (SITE IS STILL VACANT)

Main Floor Plan: Second Storey Floor Plan:

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1510-1526 Lakeshore Road W (Gardens), Oakville

LOT 7 – FOR SALE

Main Floor Plan: Second Storey Floor Plan:

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1510-1526 Lakeshore Road W (Gardens), Oakville

LOT 8 – SOLD (PARTIALLY BUILT)

Main Floor Plan: Second Storey Floor Plan:

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1510-1526 Lakeshore Road W (Gardens), Oakville

LOT 11- SOLD (PARTIALLY BUILT)

Main Floor Plan: Second Storey Floor Plan:

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1510-1526 Lakeshore Road W (Gardens), Oakville

LOT 12 – FOR SALE

Main Floor Plan: Second Storey Floor Plan:

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1510-1526 Lakeshore Road W (Gardens), Oakville

LOT 13 – FOR SALE

Main Floor Plan: Second Storey Floor Plan:

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1510-1526 Lakeshore Road W (Gardens), Oakville

LOT 14 – FOR SALE

Main Floor Plan: Second Storey Floor Plan:

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1510-1526 Lakeshore Road W (Gardens), Oakville

LAND USE POLICY OAKVILLE OFFICIAL PLAN The subject property is designated Low Density Residential in accordance with Schedule F of the Town of Oakville Official Plan, as identified below:

Subject

The Low Density Residential designation reflects a range of low density housing types that include detached, semi-detached dwellings and duplexes.

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1510-1526 Lakeshore Road W (Gardens), Oakville

ZONING According to the Town of Oakville’s Zoning By-law, the subject property is zoned “RL5-0 sp:293 & RL2-0 sp:294 – Residential Low. The RL2 & RL5 zoning classifications generally permits detached dwellings, accessory dwellings, bed and breakfast establishments, home occupation, lodging house, private home day care, day care, emergency service facility, conservation use, public park and a stormwater management facility.

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1510-1526 Lakeshore Road W (Gardens), Oakville

HIGHEST AND BEST USE

The foundation of market value rests on the Highest and Best use defined as: "The reasonably probable and legal use of vacant land or of an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value"

Source: The Dictionary of Real Estate Appraisal, Third Edition, 1993, Appraisal Institute

The four criteria that the Highest and Best use must meet are: 1. Legally permissible 2. Physically possible 3. Financially feasible 4. Maximally productive

LEGALLY PERMISSIBLE In determining the Highest and Best Use of a property, it is important for the appraiser to ascertain the range of uses that are legally permissible. In cases where modifications to Zoning By-law and Official Plan designations are likely, these uses should also be considered. Consideration should also be given to public planning initiatives and economic and political conditions that affect planning decisions. These considerations will assist the appraiser in determining whether amendments to official plan and/or zoning designations are probable. The subject is designated and zoned to permit the current use.

PHYSICALLY POSSIBLE The proposed use for a site cannot be considered its highest and best use unless that use is physically and functionally possible and adaptable to the characteristics of the site. The size, shape, area, topography and soil conditions may affect the potential uses that can be developed. The physical possibility of development for the Subject also reasonably expects that development can occur without additional costs above those of a typical vacant site. In cases where there are unusual costs associated with development (e.g. soil clean, demolition, external costs, etc.) these costs should be deducted from market value. We have assumed the site is free and clear of contaminants and has soil bearing capacity to accommodate development.

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1510-1526 Lakeshore Road W (Gardens), Oakville

The subject is generally rectangular in configuration with frontage and exposure to Lakeshore Road West. The site also has frontage on the east side of Belvedere Drive and abuts open space park lands to the east. The site is assumed to have full services (water, sanitary and storm sewers). Overall, there does not appear to be any physical impediments for development.

FINANCIALLY FEASIBLE The estimate of market value is based on the market demand for residential development, expecting that the purchasers have rationalized a positive financial benefit or utility for the basis of an acquisition. There is strong evidence in the market for similar residential infill acquisitions motivated for custom home development. We have outlined both lots sales acquired for custom home development and completed custom home sales.

MAXIMALLY PRODUCTIVE A use cannot be considered a site's highest and best use unless it's anticipated earnings ability is sufficient to generate a reasonable return on costs of acquisition and development. This aspect of highest and best use inherently involves a cost benefit analysis whereby the use that generates the highest profit or greatest return logically represents the highest and best use. In order to estimate the maximum productivity and market demand for residential development use, we have reviewed current economic market conditions and housing market conditions that are likely have an effect on developments for such uses.

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1510-1526 Lakeshore Road W (Gardens), Oakville

ECONOMIC OVERVIEW

CURRENT TRENDS UPDATE — CANADA Update – January 23, 2015 (RBC Ecotrend)

OVERVIEW October GDP increased a solid 0.3%, which built further onto to the 0.4% jump recorded in September. Employment dipped marginally in December by 4,300 following on November's 10,700 decline but only denting the quarter's increase which still stood at 28,100. On a volumes basis, overall retail sales in November rose by a robust 0.8% after unchanged activity in October. Housing starts fell by 6.5% to an annualized 180,600 in December 2014 from a revised 193,200 in November (was 195,000). The Canadian merchandise balance deteriorated to a $0.6 billion deficit in November from a downwardly revised $0.3 billion shortfall (previously a $0.1 billion surplus) in October. Canada’s headline consumer price index fell by 0.7% in December 2014, thereby reflecting a 5.0% drop in energy prices, which was a larger decline than market expectations for a 0.6% decline.

CANADIAN OCTOBER GDP RISES 0.3% Latest available: October Release date: December 23, 2014 October GDP increased a solid 0.3%, which built further onto to the 0.4% jump recorded in September. Activity was boosted by robust gains in mining (1.2%) and manufacturing (0.7%). Service- producing industries also contributed to the gain, rising 0.3% boosted by a 2.6% jump in educational services output. The increase in October GDP builds further onto the strong gain in September and bodes well for annualized Q4 growth remaining at an abovepotential rate. Beyond the end of this year, the above-potential pace is projected to be maintained into 2015. As the economic data provide confirmation that this solid pace of growth is being sustained, the Bank of Canada is expected to start to return to tightening mode in mid- 2015.

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1510-1526 Lakeshore Road W (Gardens), Oakville

CANADIAN EMPLOYMENT DIPPED IN NOVEMBER Latest available: December Release date: January 9, 2015

Canadian employment surprised to the downside with the economy losing 4,300 jobs in December 2014 as forecasters looked for a 10,000 increase. The unemployment rate held steady at 6.6%. Losses were concentrated in the services sector where employment fell by 26,400, while goods- producing industries showed a 22,100 rise in the month. The unemployment rate ended 2014 at 6.6%; the participation rate inched downward to 65.9%.

CANADIAN NOVEMBER RETAIL SALES RISE 0.4% IN THE MONTH Latest available: November Release date: January 23, 2015

Nominal retail sales in November 2014 unexpectedly increased by 0.4% in the month following unchanged activity in October. Higher sales occurred despite declines in sales at gasoline stations (0.8%) and motor vehicle dealerships (0.3%). Excluding the auto and gasoline station components, so called core sales rose by a much stronger than expected 1.0%, thereby building further on a 0.5% gain in October. On a volumes basis, overall retail sales in November rose by a robust 0.8% after unchanged activity in October.

CANADIAN HOUSING STARTS FALL TO A NINE-MONTH LOW IN DECEMBER Latest available: December Release date: January 9, 2015

Housing starts fell by 6.5% to an annualized 180,600 in December 2014 from a revised 193,200 in November (was 195,000). Market expectations had been for a modest decline to 192,000 in December. The drop in overall housing starts reflected declines in both urban single-unit (-4.8%) and urban multiple- unit (-7.0%) starts. Rural starts also declined (-9.8%) in the month. Weakness was concentrated in the

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1510-1526 Lakeshore Road W (Gardens), Oakville

Prairies (-10.2%), Quebec (-17.6%), and in Atlantic Canada (-19.4%). In contrast, strength in the multiples component drove an overall increase in Ontario (2.0%) while starts in British Columbia also rose (1.9%) to provide some offset.

CANADA TRADE BALANCE POSTED A $0.6 BILLION DEFICIT IN NOVEMBER Latest available: November Release date: January 7, 2015

The Canadian merchandise balance posted a $0.6 billion deficit in November 2014, which was down from a revised $0.3 billion shortfall (previously reported as a $0.1 billion surplus) in October. Market expectations had been for a $0.2 billion deficit in November. Nominal exports declined by 3.5% after falling 0.2% (previously up 0.1%) in October. Imports fell by 2.7% in November to retrace a revised 1.2% (was 0.5%) increase in October. Controlling for the effect of prices, the volume of exports, in chained 2007 dollars, declined by 2.2%. Imports declined as well but by a moderate 1.6%, thereby resulting in a fourth consecutive monthly deterioration in the real trade balance.

CANADIAN HEADLINE INFLATION RATE DROPPED ON LOWER ENERGY PRICES IN DECEMBER; CORE MEASURE TICKED UP RELATIVE TO DECEMBER 2013 Latest available: December Release date: January 23, 2015

Canada’s headline consumer price index fell by 0.7% in December 2014, thereby reflecting a 5.0% drop in energy prices, which was a larger decline than market expectations for a 0.6% decline. Prices were 1.5% higher than a year earlier, which was a slower pace than November’s 2.0%. The Bank of Canada’s core measure slipped by 0.3% in December, thereby meeting market expectations. The annual core rate inched upward to 2.2% from 2.1% in November.

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1510-1526 Lakeshore Road W (Gardens), Oakville

COMMENTARY The indicators are mixed with some signs of stability, with Real GDP recovering strongly in the second quarter of 2014 with the economy growing at an annualized 3.1% rate then unexpectedly dropping by 0.1% in August. The second-quarter gain was firmer than the Bank of Canada’s projection; however, combined with the downgrade of first quarter’s growth rate to 0.9% from 1.2% and the recent drop in August of 0.1%, the net result was that economic growth seems to be declining. Canadian employment surprised to the downside with the economy losing 4,300 jobs in December 2014 as forecasters looked for a 10,000 increase. The Canadian merchandise balance posted a $0.6 billion deficit in November 2014, which was down from a revised $0.3 billion shortfall (previously reported as a $0.1 billion surplus) in October. Weakening oil prices may be cited as a factor weighing on growth; however, it is not expected to significantly alter the Bank’s annual forecast for real GDP growth of 2.2% in 2014 and 2.4% in 2015. The real estate market, from the standpoint of investment remains reasonably attractive. The lack of investment product on the market is a main reason as investors remain very active in the pursuit of real estate investments and debt capital remains abundantly available at low rates with inflation rates expected to remain close to the lower end of the Bank of Canada’s 0.75% target.

Source: http://www.rbc.com/economics/market/pdf/ecotrend.pdf

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1510-1526 Lakeshore Road W (Gardens), Oakville

RESIDENTIAL MARKET OVERVIEW

A synopsis of the current trends affecting the housing market as examined by economist Will Dunning is as follows:

“The housing market impacts of plunging oil prices will play out in phases. The initial impact (tied to stock market volatility) may be increased caution by home buyers, due to fear and uncertainty. For the GTA, mid-term and longer-term impacts should be positive overall. Job creation will be supported by a weaker dollar, lower business costs, and more discretionary income for consumers; there will be less pressure for interest rates to rise.”

A précis from the Will Dunning Inc. Housing Market Digest (January 2015) is presented as follows

The December employment numbers caught Dunning by surprise, with drops for both Toronto CMA (minus 11,100 month-over-month) and Canada (minus 4,300). Year-over-year growth is negative for Toronto (-0.6%) and weak for Canada (1.0%). In drawing conclusions about “artifacts”, one of the things I consider is the “labour force participation rate” (the percentage of adults that are either employed or looking for work). As shown in this chart, the data is highly volatile. It fell again in December - Dunning was expecting it to rebound from the big drop that occurred six months earlier.

Interest Rates

Bond yields have plunged further during the past month. It appears that mortgage interest rates are now starting to follow (probably to 3.00%). During the past month, the Canadian dollar has dropped by 3-3.5 cents US (currently below 83 cents US per $Canada, or more than $1.20 Canada per USD). The TSX index has been wild, which is adding to uncertainty. It is down by about 1,300 points (9%) from the record high reached during the summer.

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1510-1526 Lakeshore Road W (Gardens), Oakville

Resale Market

Sales slowed in December, to a rate of 88,600 (based on 4,446 actual sales). TREB’s mid- month rate for January hints at a similar rate (close to 90,000). Price growth remains very rapid. The average price for December - $556,602 - is up by 6.0% year-over-year. However, CREA’s seasonal adjustment of the price data hints that the price trend is flattening.

For all of Canada, the seasonally-adjusted sales rate also dipped in December (sales have plunged in Alberta). Price growth is decelerating. For December the year-over-year increase was 3.8%, down from 7% just six months ago (again, this change is centered in Alberta).

New Homes Market

New home sales were at a healthy rate in December (39,800, based on 1,991 actual sales). Low-rise activity was at 16,000 (815 actual sales). Sales rates have been below the trend for two months. There just aren’t enough new project openings. It is also possible that the effect of low interest rates is starting to wear off. The high-rise rate remains very high, at 23,800 (1,176 actual sales).

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1510-1526 Lakeshore Road W (Gardens), Oakville

The Outlook

The Dunning forecast is summarized in the table below:

Source: Will Dunning Inc. Economic Research

HIGHEST& BEST USE CONCLUSION

The Highest and Best Use is deemed to be the current use.

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1510-1526 Lakeshore Road W (Gardens), Oakville

APPROACH TO VALUE

METHOD OF VALUATION

The most common approaches used to value land are namely; The Direct Comparison Approach, The Abstraction Method, The Subdivision Development Method and Land Residual Method. Either approach is typically used in conjunction with the Direct Comparison Approach in estimating market value for land. The Cost Approach and Income Approach to value have also been considered, but are not deemed appropriate to value land.

DIRECT COMPARISON APPROACH The Direct Comparison Approach, based on the Principle of Substitution, is more common and uses a comparison of transactions that have occurred, involving similar vacant land, and acting as a proxy for the Subject property. The approach is successfully applied where there is a reasonable volume of transactions and/or listings having similar characteristics when compared to the Subject property. According to the principle, a buyer would not pay more for one property than for another that was equally desirable.

SUBDIVISION DEVELOPMENT METHOD The Subdivision Development Approach (also referred to as the Cost of Development Approach or land Development approach) is based on a proposed development of the land, where the costs (hard & soft) of construction and development profit are deducted from the expected market value or revenue of the completed project. The residual value is that price which the developer would pay for the “raw” land. The Appraisal Institute's The Appraisal of Real Estate, Canadian Edition, (1992) states at p. 297 that;

“... bona fide sales data provide a better indication of value than a subdivision development prospectus. The reliability of the approach is determined by the accuracy of the lot yield, absorption rate, sale prices, servicing costs and soft cost estimates.”

CONCLUSION We have undertaken the Direct Comparison Approach in valuing the subject building lots and homes.

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1510-1526 Lakeshore Road W (Gardens), Oakville

DIRECT COMPARISON APPROACH – “AS-IS MARKET VALUE”

The Direct Comparison Approach studies the interaction of buyers and sellers in the market place. This approach has also been traditionally referred to as the comparative approach and involves a process of comparing the subject property in all respects to similar properties. The “as-is” market value comprises 10 lots of which seven are serviced, vacant and not yet sold. The remaining three lots have been sold of which two lots have been partially built, whilst the last lot is sold, but construction has yet to commence. However, each of the partially completed dwellings has an Agreement of Purchase and Sale in place. As such, for the “as-if complete” value for these three lots we have used the contractual price. The Gardens project status, as of the effective date, is detailed below:

We have provided a breakdown of the subject site based on units sold vs. units available below:

Current Project Status Statistics Sold Available

Frontage Lot Area Price Per Frontage Lot Area Price Per (Ft.) (Sq. Ft.) Sq. Ft. (Ft.) (Sq. Ft.) Sq. Ft.

Minimum 49.2 5,005 $454 44.6 5,002 $517 Maximum 49.5 7,408 $578 108 10,215 $578 Average 49.3 5,961 $498 61.5 6,610 $540

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1510-1526 Lakeshore Road W (Gardens), Oakville

MARKET VALUE ESTIMATE FOR UNSOLD VACANT LOTS

The “as-is” contains a combination of serviced and vacant residential building lots and partially constructed dwellings. As such, a two part analysis has been undertaken to determine the current “as-is” market value. First, we will present sales of comparable residential lots, acquired for luxury custom home development. . Second, we will subtract the estimated cost, as supplied by Hush Inc., to complete each dwelling from the contractual sale price. The total of the two estimates of value are combined to form the total “as-is” market value estimate for the subject. Sales of comparable residential lots are gathered, analyzed and adjusted for differences such as time of sale, size, location and site condition (e.g., demolition, availability of services). The comparable vacant lot sales are presented in the following pages.

VACANT LOT VALUATION – “AS-IS”

VACANT LOT UNIT RATE The unit of comparison relied upon for the vacant lots, is the price expressed as a rate per building lot.

VACANT LOT DETAILS

Vacant Lot Details

Lot Frontage Avg. Lot Lot Area (Sq. Lot # Sold (Ft.) Depth (Ft.) Ft.) 2 No 79.5 113.9 8,999 3 No 108.5 104.8 10,215 4 No 49.2 102.6 5,002 7 No 49.2 114.9 6,866 12 No 46.6 114.7 5,137 13 No 44.6 110.5 5,045 14 No 52.8 105.2 5,007 Low 44.6 102.6 5,002 High 108.5 114.9 10,215 Average 61.5 109.5 6,610 Sales of comparable lots are provided for on the following page. We have identified 10 sales and two listings of similar lots within the subject neighbourhood.

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1510-1526 Lakeshore Road W (Gardens), Oakville

VACANT LOT COMPARABLES

Comparable Lot Sales

Private or Sale Sale Area Frontage Depth Price/Sq. Price/Front Address Nearest Intersection Public Price Comments No. Date (Sq. Ft.) (Ft) (Ft) Ft. Foot Road

1399 Willowdown 3rd Line / Rebecca Vacant building lot located on the North side of 1 Aug-14 13,504 75 166 Public $988,000 $73 $13,186 Road Street Willowdown Rd, east of 3rd Line, north of Lakeshore.

Lakeshore West / Property was improved with an older cottage that had 2 3060 Seneca Drive Jul-14 15,966 79 203 Public $988,000 $62 $12,533 West River been updates; however, value was in the land.

Lakeshore West / Vacant building lot; previosly approved for 3,722 sq. ft. 3 112 Paliser Court Oct-14 4,457 45 100 Private $635,000 $142 $14,209 3rd Line home; located on an executive enclave.

Lakeshore West / Vacant building lot; previosly approved for 3,750 sq. ft. 4 125 Paliser Court Oct-14 7,206 31 98 Private $650,000 $90 $21,277 3rd Line home; located on an executive enclave.

Vacant building lot located on the east side of Vilma 5 287 Vilma Drive Rebecca / Vilma Sep-14 6,012 64 103 Public $475,000 $79 $7,444 Drive, south of Rebecca Street, east of Bronte Road.

Property was improved with an older sidesplit; 6 221 Tracina Drive 3rd Line / Tracina May-14 11,355 76 149 Public $810,000 $71 $10,647 however, value was in the land.

1391 Willowdown 3rd Line / Rebecca Property was improved with an older bungalow; 7 Feb-14 11,250 75 150 Public $810,000 $72 $10,800 Road Street however, value was in the land.

3rd Line / Hixon Improved with an older bungalow; however, value was 8 1355 Hixon Street Dec-14 13,939 67 165 Public $825,000 $59 $12,313 Street in the land.

107 Westminster Lakeshore West / Improved with an older sidesplit; however, value was in 9 Jul-14 14,012 93 150 Public $845,000 $60 $9,046 Drive Westminster the land.

417 Maplehurst 4th Line / Improved with an older bungalow; however, value was 10 Nov-14 16,834 61 276 Public $900,000 $53 $14,730 Avenue Pinegrove in the land.

21 Lambert Lakeshore West / Vacant lot at Edgewater Estates located in southwest L1 Listing 15,021 130 115 Private $1,379,000 $92 $10,624 Common Dorval Oakville. Lakeside Property on private Condo road.

12 Lambert Lakeshore West / Vacant lot at Edgewater Estates located in southwest L2 Listing 15,049 102 155 Private $1,459,000 $97 $14,304 Common Dorval Oakville. Lakeside Property on private Condo road.

Average 12,050 75 152 $897,000 $79 $12,593

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1510-1526 Lakeshore Road W (Gardens), Oakville

COMPARABLE LOT SALES MAP

Comp. 3

Comp. 1

Subject

It is noted that Comparable Listings L1 & L2 are labelled as No.’s 11 & 12, respectively, on the above map.

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1510-1526 Lakeshore Road W (Gardens), Oakville

MAJOR VARIABLES IMPACTING VALUE A comparison of the transaction activity has been made having regard to the following market variables that are likely to have the greatest impact on market value (the weight (%) is not necessarily distributed evenly amongst the variables of comparison):

a) Time of Sale b) Location c) Size d) Site Character (configuration, mid-block, corner, adjacent uses, demolition required, etc.) e) Planning (Official Plan, Zoning) TIME OF SALE The date of the market activity is clearly an important factor to consider with more current transactions typically offering the best insight to value.

LOCATION Location is clearly a major variable affecting market value. Transactions in close proximity to the subject are thus more relevant. Our research has focussed on similar lot sales within the subject neighbourhood. It is noted that generally lots south of Lakeshore Road, similar to the subject lots, are considered to have a superior overall location within the district area.

DEPTH, FRONTAGE & SIZE

As we are valuing the lots on a total per lot basis, lots with larger depths, frontages & sizes will trade at a higher rate per lot.

TOPOGRAPHY / SITE CHARACTER Intrinsic features of each comparable property are reviewed such as configuration, site features (trees, ravine, privacy, etc.), development area, street exposure, access, nature of adjoining properties, demolition if required.

PRIVATE VS. PUBLIC ROAD Through discussions with local real estate professionals, we understand that private roads are seen as a positive attribute with respect to this type of custom home development. Maintenance, garbage pick up, landscaping and snow removal is contracted to a private company. As such, buyers are more confident in the services they will receive when purchasing on a private road and are willing to pay a slight premium for it.

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1510-1526 Lakeshore Road W (Gardens), Oakville

COMPARABLE LOT SALES ANALYSIS

We have undertaken an overall comparative rating with comparable residential lot transactions detailed herein in order to arrive at a market value for the Subject. Our review and overall rating is tabled on the following page (note: not all variables are given similar weight).

The comparable transactions range in price from $475,000 to $1,459,000 per lot. The price range is necessarily broad given the differences in sizes, site features and locations of the comparables. The overall average rate derived from the market transactions is $897,000 per lot; however, it is noted that the two listings on Lambert Common are outliers. Removing these two sales would give us an average of $792,600 per lot. The lower rate of 287 Vilma is also noted to be an outlier; however, it is within an appropriate proximity to the subject and is similar in size to some of the subject’s smaller sites and thus has been included in the average. The sale dates range from February 2014 to December 2014, with the listing being current. As such, from a time of sale perspective the data is considered to offer an excellent current market perspective.

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1510-1526 Lakeshore Road W (Gardens), Oakville

The site areas range from 5,002 sq. ft. to 10,215 sq. ft. with the overall average being 6,326 sq. ft. Overall, the comparables are generally larger in size and require downward adjustments for their superior frontages, depths and overall sizes, as each of their respective averages are larger compared to the subject (lot size – 12,050 sq. ft.; frontage – 75’ & depth – 152’). All of the comparables are located in Oakville, with a strong presence within the subject’s neighbourhood. The high end of the range is reflected by Comparable No.’s 1, 2, L1 & L2 which are larger lots with superior site character. Each of these properties offers superior utility in terms of frontages, depths, site areas and site character. Comparable No. 1’s location is considered slightly inferior, being located to the north of Lakeshore Road West, while Comparable No.’s 2, L1 and L2 offer superior locations due to their distances from major roadways and parks. The area has a generally short active period (days on market); however, the comparable listings have each been on the markets for over 130 days, suggesting that they are priced well above market value. Overall, all of these sales require significant downward adjustments.

The low end of the range is reflected by Comparable Sale Nos. 5. This lot is located in an inferior location, but is similar in frontage, depth and size to the subject lots. The comparables site character is considered inferior and it is not located on a private road. Overall, the subject sites are considered much superior to this comparable. As such, this sale requires an overall upward adjustment. Comparable No.’s 3 and 4 located on Paliser Court, east of the subject property to the north of Lakeshore Road West are considered to be the most similar to the subject properties with respect to sizes (frontages, depths and total site areas); however, it is noted that Comparable No. 4 has a smaller frontage. Although its frontage is smaller, it is a pie shaped lot that expands to the rear and offers a larger site size than Comparable No. 3. The comparables are located in a similar infill site which was also developed by Hush Homes Inc.; however, the subject’s location on the south side of Lakeshore Road West and its more spread out development make its location superior. The subject lots site character is also considered superior with respect to the topography, existing trees and privacy. Overall; these sales require upward adjustments for location and site character. Comparable Sales No.’s 6 through 10 are recent sales of lots in inferior locations and on public roads, but with superior site frontages, depths and areas. Their site sizes range from 11,250 sq. ft. to 16,834 sq. ft. and their sale prices range from $810,000 to $900,000. There is a clear pattern in the sale price of these lots, as the smaller lots are paired with the lower sale prices and the larger lots are paired with the higher sale prices. As such, we expect the downward adjustments for frontage, depth and site area to outweigh the upward adjustments for location and road type (private vs. public); and we expect to achieve lower rates for the subject property.

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1510-1526 Lakeshore Road W (Gardens), Oakville

Through this analysis, it is clear that the main variable attributed to lot value is the lot size. Smaller lots sell at much lower rates compared to larger lots. For demonstrative purposes, we have included the below chart to demonstrate that there is a clear positive correlation between lot size and sale price.

$1,600,000

$1,400,000

$1,200,000

$1,000,000

$800,000 Price $600,000

$400,000

$200,000

$- 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Size

The subject’s lots are superior with respect to location and road type (private vs. public) to most of the comparables above. However, their smaller lot sizes are clearly a limiting factor. As such, the majority of the adjustment weight has been focused on lot size, while the remaining adjustment factors were used to refine the lot estimates.

ESTIMATE OF LOT VALUES – “AS-IS”:

Having regard to the above noted market activity it is our opinion, that the likely range of value for the subject property would be likely fall within the range of $750,000 to $800,000 per lot. Differences in lot prices have been made due to private vs public road, location within subdivision and size/character. Our estimated market value for each of the subject’s remaining vacant building lots is as estimated as follows:

Estimate of Lot Market Values

Lot # Estimated Lot Value

2 $800,000 3 $800,000 4 $750,000 7 $775,000 12 $750,000 13 $750,000 14 $750,000 Total $5,375,000

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PARTIALLY BUILT DWELLING VALUATION – “AS-IS”

As at January 19, 2015, three of the lots within the subject development are under Agreements of Purchase and Sale. As such, the “as-if complete” value for these three lots reflects the contractual sale price in the Agreement of Purchase & Sale.

“AS-IS” ESTIMATE OF VALUE Two of the three parcels were partially constructed, while the third is still a vacant site. In order to estimate their current values based upon the Agreement of Purchase and Sale Prices, we must subtract the estimated cost to complete each dwelling from the contractual sale price. It is noted, that the cost to complete each dwelling has been supplied to us by the owner, Hush Homes Inc. We have relied upon and assumed these estimates to be accurate; if this assumption is later proven inaccurate, we retain the right to alter our final estimate of value. Hush Homes Inc.’s estimates to complete construction on each of the dwellings are provided below:

Sold Lots (Lots 6, 8 & 11) Budget vs. Work Completed (As supplied by Hush Homes Inc.) Dwelling Size Contractual Work Work Cost to Lot # Sold Purchaser Budget (Sq. Ft.) Sale Price Invoiced Competed Finish 6 Yes Sylvia Bandoian 2,538 $1,467,350 $362,803 $18,000 $0 $362,803 8 Yes Jun Li 4,431 $2,011,494 $565,854 $164,352 $152,852 $413,002 Anita Simon & 11 Yes 3,316 1,530,900 $563,444 $15,110 $559,443 $4,001 Christopher Pickett Totals 10,285 $5,009,744 $1,492,101 $712,295 $779,806

It is noted that Hush Homes Inc. has been invoiced and paid $18,000 towards the foundation for lot No. 6. However, it was only a partial payment and no work appears to have commenced. As such, we have subtracted the entire budget amount of $362,803 from the contractual sale price to determine the cost to finish this lot. The $18,000 down payment towards the foundation has not been accounted for in this report. For the purpose of this report, we have only focused on work actually completed within each site and not work invoiced.

ESTIMATE OF PARTIALLY IMPROVED/SOLD LOTS – “AS-IS”:

Our estimates of value for the partially completed/sold lots (lots 6, 8 & 11) are based upon the Agreement of Purchase and Sale prices (Contractual Sale Price) less the cost to finish each dwelling. As of the effective date of this report, January 19, 2015, our current estimate of value of the partially improved lots is:

Current "As is" Market Value of Lots 6, 8 & 11 Contractual Sale Less: Estimated Value of Lot # Price Cost to Finish Partially Built Lots 6 $1,467,350 $362,803 $1,104,547 8 $2,011,494 $413,002 $1,598,492 11 $1,530,900 $4,001 $1,526,899 Totals $5,009,744 $779,806 $4,229,938

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FINAL ESTIMATE OF VALUE – “AS-IS”

The estimate for the “as-is” market value, as of the effective date, of January 19, 2015, is:

Total "As Is" Estimate of Value Estimate of Lot Market Values $5,375,000 Estimated Value of Partially Built Lots $4,229,938 Total $9,604,938 Rounded To: $9,610,000

DIRECT COMPARISON APPROACH – “AS-IF COMPLETED”

The “as-if completed,” value is determined through the Direct Comparison Approach by comparing new custom home sales and re-sales in the subject’s neighbourhood. The focus of our research for new homes and re-sales is centered within Old Oakville and immediate area. Adjustments to the comparable sales are made for time, location, house size, finishes, no. of beds, no. of baths and lot size. We have considered the subject’s standard finishes, as previously outlined, for the basis of comparison with the market transaction activity presented herein.

NEW CUSTOM HOME SALES The unit of comparison relied upon for the homes is the price expressed on a per square foot of dwelling living area, excluding basement area. It is noted that the sold subject properties are at different stages of construction; however, they have been sold at a previously contracted price. As such, for the purpose of this report, these pre-determined prices will be viewed as their current market values. The following is a summary of the new home market transactions researched as well as an analysis of the market data and conclusion of market value.

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1510-1526 Lakeshore Road W (Gardens), Oakville

NEW HOME MARKET ACTIVITY - SOLD LOT COMPARABLES (IMPROVED) – “AS-IS”

Luxury Detached Dwelling Comparables - Oakville

Gardens of Coronation (Subject Development)

Builder: Hush Development Name: Gardens of Coronation (Subject Development) Location: South of Lakeshore Road West, east of Third Line Municipality: Oakville Site Status: Active Tenure: Freehold Product Type: Detached Lot Size (ft): 60 Lot Type: Traditional Opening Date: 2/6/2010 First Occupancy Date: 2011-04 Available Home Sizes (sf): 2,966 to 4,494 Available Home Prices: $1,475,000 to $2,350,000 Avg Size: 2,942 Avg Price: $1,470,713 Avg $/PSF: $510 Exterior: Brick, Stone, Stucco Bedrooms: 3 and 4 Type: SALES HISTORY -DETACHED - 60' - FREEHOLD 2010 2011 2012 2013 2014 SALES SALES SALES SALES SALES LOTS RELEASED EACH MONTH 0 0 -1 0 0 TOTAL LOTS RELEASED 14 14 13 13 13 MONTHLY/ANNUAL SALES 0 0 0 0 0 CUMULATIVE SALES 4 6 6 6 6 TOTAL REMAINING LOTS 10 8 7 7 7

MODEL DESCRIPTION ELEVATION # OF BEDROOMS HOME TYPE SIZE (SF) PRICE PRICE/SF STATUS SALE DATE 1. Angelica Residence Stucco/Stone lot 8 4 bdrm 2 Storey 4,431 $2,011,494 $454 Sold 7-Nov-11 2. Bellflower Residence Stucco/Stone lot 1 3 bdrm 2 Storey 3,395 $1,606,450 $473 Closed 18-Feb-11 5. Foxglove Residence Stucco/Stone lot 9 4 bdrm 2 Storey 1,622 $919,900 $567 Closed 26-Apr-12 6. Gilliflower Residence Stucco/Stone lot 11 4 bdrm 2 Storey 3,070 $1,530,900 $499 Sold 30-Jul-12 7. Honeysuckle Residence Stucco/Stone lot 6 4 bdrm 2 Storey 2,538 $1,467,350 $578 Sold 9-Jun-14 10. Mulberry Residence Stucco/Stone lot 5 4 bdrm 2 Storey 2,367 $1,175,000 $496 Closed 7-Nov-11 11. Periwinkle Residence Stucco/Stone lot 10 4 bdrm 2 Storey 3,170 $1,583,900 $500 Closed 30-Jul-12 Average 2,942 $1,470,713 $510

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1510-1526 Lakeshore Road W (Gardens), Oakville

Avalon Builder: Hush Development Name: Avalon Location: north of Lakeshore Road West, east of Fourth Line Municipality: Oakville Site Status: Active Tenure: Freehold Product Type: Detached Lot Size (ft): 45 Lot Type: Traditional Opening Date: 1/16/2010 First Occupancy Date: 2011-03 Available Home Sizes (sf): 3,636 to 5,010 Available Home Prices: $1,605,000 to $2,600,000 Avg Size: 4,246 Avg Price: $1,793,614 Avg $/PSF: $428 Exterior: Stucco, Stone Bedrooms: 4 Type: 2 Storey Sales History - Detached - 45' - Traditional - Freehold 2010 2011 2012 2013 2014 SALES SALES SALES SALES SALES LOTS RELEASED EACH MONTH 0 0 1 0 8 TOTAL LOTS RELEASED 12 12 13 13 13 MONTHLY/ANNUAL SALES 0 0 0 0 0 CUMULATIVE SALES 2 3 4 5 5 TOTAL REMAINING LOTS 10 9 9 8 8

MODEL DESCRIPTION ELEVATION # OF BEDROOMS HOME TYPE SIZE (SF) PRICE PRICE/SF STATUS 1. Aubergine Chateau Stucco/Stone lot 6 4 bdrm 2 Storey 5,010 $1,645,900 $329 sold out 2. Aubergine Palais Stucco/Stone lot 7 4 bdrm 2 Storey 5,010 $2,600,000 $519 available 3. Chartreuse Chateau To Be Catalogued lot 6 N/A 2 Storey 5,010 $2,080,000 $415 available Stucco/Stone lot 8 4 bdrm 2 Storey 4,903 $1,930,000 $394 available 4. Chartreuse Palais Stucco/Stone lot 5 4 bdrm 2 Storey 4,710 $1,930,000 $410 available 5. Lavande Chateau Stucco/Stone lot 11 4 bdrm 2 Storey 3,766 $1,600,000 $425 sold out 6. Lavande Paris Stucco/Stone lot 2 4 bdrm 2 Storey 4,770 $1,600,000 $335 sold out 7. Merise Chateau Stucco/Stone lot 13 4 bdrm 2 Storey 1,802 $1,000,000 $555 sold out 8. Merise Palais Stucco/Stone lot 12 4 bdrm 2 Storey 3,636 $1,605,000 $441 available 9. Serin Chateau Stucco/Stone lot 4 4 bdrm 2 Storey 4,286 $1,700,000 $397 sold out 10. Serin Palais Stucco/Stone lot 3 4 bdrm 2 Storey 3,888 11. Tourmaline Chateau Stucco/Stone lot 10 4 bdrm 2 Storey 3,907 $1,907,470 $488 sold out 12. Tourmaline Palais Stucco/Stone lot 9 4 bdrm 2 Storey 4,500 $1,925,000 $428 sold out Average 4,246 $1,793,614 $428

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1510-1526 Lakeshore Road W (Gardens), Oakville

Royal Oakville Club Builder: Fernbrook Homes Development Name: Royal Oakville Club Location: north of Rebecca Street, west of Dorval Drive Municipality: Oakville Site Status: Active Tenure: Freehold Product Type: Detached Lot Size (ft): 60 Lot Type: Traditional Opening Date: 8/15/2013 First Occupancy Date: 2014-10 Available Home Sizes (sf): 4,532 to 4,619 Available Home Prices: $1,840,000 to $1,890,000 Avg Size: 4,564 Avg Price: $1,865,000 Avg $/PSF: $409 Exterior: Stone, Stucco Bedrooms: 4 Sales History - Detached - 60' - Traditional - Freehold 2013 2014 2015 SALES SALES SALES LOTS RELEASED EACH MONTH 0 0 0 TOTAL LOTS RELEASED 6 6 6 MONTHLY/ANNUAL SALES 0 0 0 CUMULATIVE SALES 0 1 1 TOTAL REMAINING LOTS 6 5 5

MODEL DESCRIPTION ELEVATION # OF BEDROOMS HOME TYPE SIZE (SF) PRICE PRICE/SF STATUS 1. Champ D'or Stone/Stucco A 4 bdrm 2 Storey 4,559 $1,890,000 $415 available Stone B 4 bdrm 2 Storey 4,563 $1,890,000 $414 available Stone/Stucco C 4 bdrm 2 Storey 4,559 $1,890,000 $415 available 2. Hyde Park Stone/Stucco A 4 bdrm 2 Storey 4,554 $1,840,000 $404 available Stone B 4 bdrm 2 Storey 4,619 $1,840,000 $398 available Stone/Stucco C 4 bdrm 2 Storey 4,532 $1,840,000 $406 available Average 4,564 $1,865,000 $409

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1510-1526 Lakeshore Road W (Gardens), Oakville

Royal Oakville Club Builder: Fernbrook Homes Development Name: Royal Oakville Club Location: north of Rebecca Street, west of Dorval Drive Municipality: Oakville Site Status: Active Tenure: Freehold Product Type: Detached Lot Size (ft): 40 Lot Type: Traditional Opening Date: 8/15/2013 First Occupancy Date: 2014-10 Available Home Sizes (sf): 3,581 to 3,862 Available Home Prices: $1,400,000 to $1,450,000 Avg Size: 3,690 Avg Price: $1,427,222 Avg $/PSF: $387 Exterior: Stone, Stucco Bedrooms: 4 Sales History - Detached - 40' - Traditional - Freehold 2013 2014 2015 SALES SALES SALES LOTS RELEASED EACH MONTH 0 0 0 TOTAL LOTS RELEASED 30 30 30 MONTHLY/ANNUAL SALES 0 0 1 CUMULATIVE SALES 8 15 16 TOTAL REMAINING LOTS 22 15 14

MODEL DESCRIPTION ELEVATION # OF BEDROOMS HOME TYPE SIZE (SF) PRICE PRICE/SF STATUS 1. Arlington Stone/Stucco A 4 bdrm 2 Storey 3,589 $1,440,000 $401 available Stone B 4 bdrm 2 Storey 3,581 $1,430,000 $399 available Stone/Stucco C 4 bdrm 2 Storey 3,582 $1,440,000 $402 available 2. Belmont Stone/Stucco A 4 bdrm 2 Storey 3,605 $1,425,000 $395 available Stone B 4 bdrm 2 Storey 3,605 $1,410,000 $391 available Stone/Stucco C 4 bdrm 2 Storey 3,601 $1,420,000 $394 available 3. Belvedere Stone/Stucco A 4 bdrm 2 Storey 3,604 $1,420,000 $394 available Stone B 4 bdrm 2 Storey 3,604 $1,425,000 $395 available Stone/Stucco C 4 bdrm 2 Storey 3,602 $1,430,000 $397 available 4. Carolands Stone/Stucco A 4 bdrm 2 Storey Loft 3,773 $1,400,000 $371 available Stone B 4 bdrm 2 Storey Loft 3,796 $1,420,000 $374 available Stone/Stucco C 4 bdrm 2 Storey Loft 3,738 $1,400,000 $375 available 5. Evans Ridge Stone/Stucco A 4 bdrm 2 Storey Loft 3,766 $1,430,000 $380 available Stone B 4 bdrm 2 Storey Loft 3,757 $1,430,000 $381 available Stone/Stucco C 4 bdrm 2 Storey Loft 3,751 $1,435,000 $383 available 6. Harbor Hill Stone/Stucco A 4 bdrm 2 Storey Loft 3,862 $1,445,000 $374 available Stone B 4 bdrm 2 Storey Loft 3,861 $1,440,000 $373 available Stone/Stucco C 4 bdrm 2 Storey Loft 3,751 $1,450,000 $387 available Average 3,690 $1,427,222 $387

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1510-1526 Lakeshore Road W (Gardens), Oakville

Royal Oakville Club Builder: Fernbrook Homes Development Name: Royal Oakville Club Location: north of Rebecca Street, west of Dorval Drive Municipality: Oakville Site Status: Active Tenure: Freehold Product Type: Detached Lot Size (ft): 50 Lot Type: Traditional Opening Date: 8/15/2013 First Occupancy Date: 2014-10 Available Home Sizes (sf): 3,816 to 4,029 Available Home Prices: $1,620,000 to $1,660,000 Avg Size: 3,939 Avg Price: $1,640,000 Avg $/PSF: $417 Exterior: Stone, Stucco Bedrooms: 4 Sales History - Detached - 50' - Traditional - Freehold 2013 2014 2015 SALES SALES SALES LOTS RELEASED EACH MONTH 0 0 0 TOTAL LOTS RELEASED 10 10 10 MONTHLY/ANNUAL SALES 1 0 1 CUMULATIVE SALES 3 8 9 TOTAL REMAINING LOTS 7 2 1

MODEL DESCRIPTION ELEVATION # OF BEDROOMS HOME TYPE SIZE (SF) PRICE PRICE/SF STATUS 1. Beechwood Stone/Stucco A 4 bdrm 2 Storey 3,965 $1,620,000 $409 available Stone B 4 bdrm 2 Storey 3,949 $1,620,000 $410 available Stone/Stucco C 4 bdrm 2 Storey 3,962 $1,620,000 $409 available 2. Hyannis Port Stone/Stucco A 4 bdrm 2 Storey 3,850 $1,640,000 $426 available Stone B 4 bdrm 2 Storey 3,816 $1,650,000 $432 available Stone/Stucco C 4 bdrm 2 Storey 3,834 $1,640,000 $428 available 3. Lynnewood Stone/Stucco A 4 bdrm 2 Storey 4,024 $1,650,000 $410 available Stone B 4 bdrm 2 Storey 4,019 $1,660,000 $413 available Stone/Stucco C 4 bdrm 2 Storey 4,029 $1,660,000 $412 available Average 3,939 $1,640,000 $417

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1510-1526 Lakeshore Road W (Gardens), Oakville

Royal Oakville Club Builder: Fernbrook Homes Development Name: Royal Oakville Club Location: north of Rebecca Street, west of Dorval Drive Municipality: Oakville Site Status: Active Tenure: Freehold Product Type: Detached Lot Size (ft): 55 Lot Type: Traditional Opening Date: 8/15/2013 First Occupancy Date: 2014-10 Available Home Sizes (sf): 4,113 to 4,439 Available Home Prices: $1,720,000 to $1,765,000 Avg Size: 4,306 Avg Price: $1,747,727 Avg $/PSF: $406 Exterior: Stone, Stucco Bedrooms: 4 to 5 Sales History - Detached - 55' - Traditional - Freehold 2013 2014 2015 SALES SALES SALES LOTS RELEASED EACH MONTH 0 0 0 TOTAL LOTS RELEASED 16 16 16 MONTHLY/ANNUAL SALES 0 0 0 CUMULATIVE SALES 5 11 11 TOTAL REMAINING LOTS 11 5 5

MODEL DESCRIPTION ELEVATION # OF BEDROOMS HOME TYPE SIZE (SF) PRICE PRICE/SF STATUS 1. Champ D'or n/a n/a n/a n/a n/a n/a n/a n/a 2. Hyde Park n/a n/a n/a n/a n/a n/a n/a n/a 3. Springwood Stone/Stucco A 4 bdrm 2 Storey 4,236 $1,735,000 $410 available Stone B 4 bdrm 2 Storey 4,198 $1,735,000 $413 available Stone/Stucco C 4 bdrm 2 Storey 4,185 $1,735,000 $415 available 4. Templeton Stone/Stucco A 5 bdrm 2 Storey 4,389 $1,755,000 $400 available Stone B 5 bdrm 2 Storey 4,403 $1,755,000 $399 available Stone/Stucco C 5 bdrm 2 Storey 4,391 $1,755,000 $400 available 5. Westbrook Stone/Stucco A 4 bdrm 2 Storey 4,430 $1,765,000 $398 available Stone B 4 bdrm 2 Storey 4,432 $1,765,000 $398 available Stone/Stucco C 4 bdrm 2 Storey 4,439 $1,765,000 $398 available 6. White Hall Stone/Stucco A 4 bdrm 2 Storey 4,113 $1,720,000 $418 available Stone B 4 bdrm 2 Storey 4,149 $1,740,000 $419 available Average 4,306 $1,747,727 $406

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1510-1526 Lakeshore Road W (Gardens), Oakville

COMPARABLE LOCATION MAP

Royal Oakville Club

Avalon

Gardens of Coronation

COMPARABLE NEW HOME ACTIVITY ANALYSIS We have analysed sales of new homes from three different development infill sites, including the subject’s own development. These sales are considered most similar to the subject. We have included both active listings and sold dwellings within our research. An overview of the comparables sales are provided for below:

Comparable New Dwelling Sales Overview Avg. Lot Dwelling Avg. Avg. Asking / Avg. Price / Development Name Frontage (Ft.) Size (Sq. Ft.) Selling Price Sq. Ft. Gardens of Coronation (Subject Development) 60 2,942 $1,470,713 $510 Avalon 45 4,246 $1,793,614 $428 Royal Oakville Club 60 4,564 $1,865,000 $409 Royal Oakville Club 40 3,690 $1,427,222 $387 Royal Oakville Club 50 3,939 $1,640,000 $417 Royal Oakville Club 55 4,306 $1,747,727 $406 Averages 52 3,948 $1,657,380 $426

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1510-1526 Lakeshore Road W (Gardens), Oakville

THE GARDENS AT CORONATION SALES We have also considered sold homes within the subject development. The sales are considered relevant and provide a reasonable perspective to market value. There are four closed sales and three pending sales, which are set to close upon completion of the home (s). The four closed sales sold at an average rate of $509 per sq. ft. between February 2011 and July 2012. While the three pending sales sold at an average rate of $510 per sq. ft. between November 2011 and June 2014 with the most recent sale achieving the highest rate per square foot ($578) out of the sales. Overall, the sales provide the best comparison to the subject “as-if completed.”

AVALON This custom home infill development is located a short distance to the east of the subject property in a slightly inferior location on the north side of Lakeshore Road West. The average lot sizes are smaller compared to the subject property; however, construction quality, dwelling features and finishes are considered similar as Hush Homes Inc. is the builder. Furthermore, these dwellings are also located on a private road. Overall, these sales all require upward adjustments for their smaller lot sizes and slightly inferior location, e.g., north side of Lakeshore Rd vs south side of Lakeshore Rd.

ROYAL OAKVILLE CLUB This custom home infill development is located in an inferior location north of Rebecca Street, west of Dorval Drive, to the north of Lakeshore Road in Oakville. This infill development includes both detached dwellings and townhouses; as such, it would not be considered as prestigious as the subject’s development. The subject is to be developed strictly with executive dwellings, while the townhouse construction of the Royal Oakville Club development reduces the overall value of the detached dwellings in the immediate area. Furthermore, the development has inferior features and finishes compared to the subject. As such, these sales require significant overall upward adjustments.

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1510-1526 Lakeshore Road W (Gardens), Oakville

CUSTOM HOME RE-SALES COMPARABLES

We have also analysed re-sales of luxury custom homes in the immediate neighbourhood. These sales are considered most similar to the subject. An overview of the comparable re-sales is provided for below:

DWELLING RESALE ACTIVITY IN THE NEIGHBOURHOOD

Dwelling Sale Sale Price per Sq. No. of No. of Address Type Area Price Comments No. Date Ft. Bedrooms Bathrooms (Sq. Ft.) Custom home on a large lot; fully finished basement; hardwood 139 Travistock Detached 2- 2,500- 1 Jan-15 $1,530,000 $556 4+2 3 throughout; master has Square storey 3,000 ensuite; large deck; pool; attached 2 car garage.

Custom home; fully finished basement; 45 Chisholm Detached 2- 3,500 - 2 Sep-14 $1,950,000 $459 4+1 5 inground pool; attached Street storey 5,000 2 car garage; custom kitchen; large driveway.

Custom home; hardwood throughout; custom kitchen; 242 Burton Detached 2- 3,000 - 3 Sep-14 $1,558,500 $480 4 4 attached 2 car garage; Road storey 3,500 partially finished basement with walk- out. Custom home; hardwood throughout; landscaped backyard; 464 Avon Detached 2- 3,000 - 4 Aug-14 $1,925,000 $592 4 5 fully finished basement; Crescent storey 3,500 5,000 sq. ft. total living space; attached 2 car garage; inground pool. Cewer custom home; hardwood throughout; custom kitchen; 315 Watson Detached 2- 3,500- 5 Jun-14 $2,137,500 $503 4+1 5 finished basement with Avenue storey 5,000 gym; heated floors in washrooms; swim spa; attached 2 car garage. Newer built custom home; large lot; 236 Watson Detached 2- 2,500- finished basement; 6 May-14 $2,000,000 $727 3+1 4 Avenue storey 3,000 hardwood throughout; ensuite washroom; attached 2 car garage.

Newer custom home with balconies; Detached 2- 3,500- 7 470 Drummond May-14 $1,930,000 $454 4 5 unfinished basement; storey 5,000 attached 2 car garage; overlooking ravine.

Newer custom home; finished basement with wakl-out; natural stone 540 Lakeshore Detached 2- 3,500- 8 Feb-14 $1,950,000 $459 4+2 5 & hardwood throughout; Road East storey 5,000 heated floors; custome kitchen; attached 2 car garage. Custom home; partially finished basement; 535 Partricia Detached 2- 3,000- hardwood throughout; L1 Listing $1,779,800 $548 4 5 Drive storey 3,500 custom kitchen; large driveway; attached 2 car garage.

Average 3,500 $1,862,311 $531

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1510-1526 Lakeshore Road W (Gardens), Oakville

COMPARABLE RE-SALES ACTIVITY We have researched 8 re-sales and 1 listing of similar newer custom homes in the neighbourhood. These comparable home re-sales were deemed most similar with respect to the subjects design, size, features and finishes. They range in size from approximately 2,750 to 4,250 sq. ft. and sold at prices between $1,530,000 and $2,137,500, representing a range per square foot of living area from $454 to $727, with an average of $531 per sq. ft. It is noted that most of the higher end comparables have finished basements and include upgrades, thus resulting in a higher rate per square foot of dwelling living area. Nonetheless, the re-sale comparables provide a reasonability check for new custom home prices in the area.

FINAL ESTIMATE OF VALUE – “AS-IF COMPLETED”

Having regard to the above noted market activity and research; it is our opinion, that the likely range of value for completed dwellings at the subject development would likely fall within the range of $490 to $510 per square foot of living area. The lower end of the range is for the larger homes and the upper end of the range is for the smaller homes. We have estimated rates in this range for each of the subject’s homes “as-if completed” and also included the partially completed and sold homes based on the contracted Agreement of Purchase and Sale price. A chart outlining the “As-if Completed Value Estimate” is provided for below:

"As if Completed" - Estimate of Values

Dwelling Estimated Lot # Estimate of Value Size (Sq. Ft.) Price / Sq. Ft.

2 3,426 $500 $1,713,000 3 3,729 $500 $1,864,500 4 3,134 $510 $1,598,340 6 2,538 A of P&S Price $1,467,350 7 4,529 $490 $2,219,210 8 4,431 A of P&S Price $2,011,494 11 3,316 A of P&S Price $1,530,900 12 3,053 $510 $1,557,030 13 3,318 $500 $1,659,000 14 2,966 $510 $1,512,660 Totals 34,440 $501 $17,133,484 Rounded To: $17,140,000

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1510-1526 Lakeshore Road W (Gardens), Oakville

FINAL ESTIMATE OF VALUE

Based upon the data, analysis and conclusions contained herein, it is our opinion that estimated market value of the subject property, located at 1510-1526 Lakeshore Road W, Oakville, Ontario, as at the effective date of January 19, 2015, is estimated to be:

Final Estimate of Market Value

A) "As-Is" Market Value $9,610,000

B) "As if Complete" Market Value $17,140,000

HYPOTHETICAL LIMITING CONDITION & EXTRAORDINARY ASSUMPTION The market value estimates contained herein are made on the Hypothetical Conditions and Extraordinary Assumptions as follows:

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1510-1526 Lakeshore Road W (Gardens), Oakville

CERTIFICATION

Based upon the data, analysis and conclusions contained herein, the market value of the subject property identified as 1510-1526 Lakeshore Road West, Oakville, Ontario as of January 19, 2015, is estimated as follows:

Final Estimate of Market Value

A) "As-Is" Market Value $9,610,000

B) "As if Complete" Market Value $17,140,000

1. To the best of my knowledge and belief 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 my personal, unbiased professional analyses, opinions and conclusions.

3. I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved.

4. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favours the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event.

5. My analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the “Canadian Uniform Standards of Professional Appraisal Practice” of the

6. As of the date of this report, the undersigned has fulfilled the requirements of the Appraisal Institute of Canada Continuing Professional Development Program for designated members.

7. I have the knowledge and experience to complete the assignment competently.

8. Gus Dal Colle made a personal inspection of the property that is the subject of this report on February 5, 2015.

………………………………...... ……….. Gus Dal Colle, AACI, MRICS, PLE

Dated: March 31, 2015

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1510-1526 Lakeshore Road W (Gardens), Oakville

ASSUMPTIONS AND LIMITING CONDITIONS

RELIABILITY

This report was prepared by Mr. Gus Dal Colle, AACI, MRICS, PLE of Antec Appraisal Group Inc. at the request of The Fuller Landau Group Inc. in its capacity as court-appointed Monitor of Hush Homes Inc., Hush Inc., 2122763 Ontario Inc., 2142301 Ontario Inc. and 2164566 Ontario Inc. for the purpose of estimating the fee simple market value to assist in a court ordered CCAA function. The market value in it reflects Mr. Gus Dal Colle’s best judgment in light of the information available to him at the time of preparation. It is not reasonable for any other person or corporation other than The Fuller Landau Group Inc. in its capacity as court-appointed Monitor of Hush Homes Inc., Hush Inc., 2122763 Ontario Inc., 2142301 Ontario Inc. and 2164566 Ontario Inc. to rely upon this appraisal. The appraisal report was prepared for the Monitor in order to convey independence between the Company (Hush Homes Inc.) and the appraiser named herein. The appraiser will be used by the company in drafting its CCAA plan. Any use which a third party makes of this report, or any reliance on or decision to be made based on it, are the responsibility of such third parties. Mr. Gus Dal Colle, AACI and Antec Appraisal Group Inc. accept no responsibility for damages, if any, suffered by any third party as a result of decisions made or actions based upon this report.

RIGHT OF PUBLICATION

Neither possession of this report nor a copy of it carries with it the right of publication. All copyright is reserved to the author and is considered confidential by the author and his client. It shall not be disclosed, quoted from or referred to, in whole or in part, or published in any manner, without the express written consent of the appraiser. This is subject only to confidential review by the Appraisal Institute of Canada as provided in the Ethics Standard of the Canadian Uniform Standards of Professional Appraisal Practice.

LEGAL ASPECTS

While expert in appraisal matters, the author is not qualified and does not purport to give legal advice. It is assumed that:

• the legal description as set out herein is correct;

• title to the property is good and marketable;

• there are no encroachments, encumbrances, restrictions, leases or covenants that

• would in any way affect the valuation, except as expressly noted herein;

• the existing use is a legally conforming use which may be continued by any

purchaser from the existing owner; and

• rights of way, easements, or encroachments over other real property and leases

or other covenants noted herein are legally enforceable.

Because these assumptions have been made, no investigation, legal or otherwise, has been undertaken which would verify these assumptions, except as expressly noted herein. It is assumed that title to the property is good and marketable and there are no encumbrances which cannot be cleared through the regular processes. The appraiser cannot accept any responsibility for matters which are of a legal nature, nor is any opinion on the title of the property rendered herewith.

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1510-1526 Lakeshore Road W (Gardens), Oakville

SURVEYS AND DRAWINGS

The author is not a qualified surveyor and a site plan concerning the subject has been provided. Other sketches, drawings, diagrams, photographs, etc., are presented in this report for the limited purpose of illustration and are not to be relied upon in themselves.

ENVIRONMENTAL

The appraiser has no knowledge of the existence of hazardous substances, and is not qualified to comment on environmental issues that may affect the market value of the property appraised including without limitation toxic wastes, polychlorinated biphenyls, petroleum leakage, agricultural chemicals, radon gas, pollution or contamination of land, buildings, water, groundwater or air, which may be present on or in the property, or other environmental conditions.

Unless expressly stated, the property is assumed to be free and clear of pollutants and contaminants, including but not limited to moulds or mildews or the conditions that might give rise to either, and is in compliance with all regulatory environmental requirements, government or otherwise, and is free of any environmental condition, past, present or future, that might affect the market value of the property appraised. If the party relying on this report requires information about environmental issues then that party is cautioned to retain an expert qualified in such issues. We expressly deny any legal liability relating to the effect of environmental issues on the market value of the property appraised.

MUNICIPAL DATA

No investigation has been undertaken with the local zoning office, the fire department, the building inspection, the health department, the municipal tax department or any other government regulatory agency unless such investigations are expressly represented to have been made in this report. The subject property must comply with such government regulations and, if it does not comply, its non- compliance may affect market value. To be certain of compliance, further investigations may be necessary.

Archaeological

It is assumed for the purpose of this appraisal that there is no archaeological significance to the subject property and that there are no costs or delays in relation to archaeological investigations or matters.

NATIVE CLAIMS

It is assumed that there are no First Nations Claims to the property.

MARKET DATA

Market data has been obtained, in part, from documents at the Land Registry office, or as reported by the Real Estate Board. As well as using such documented and generally reliable evidence of market transactions, it was necessary to rely on hearsay evidence. Except as noted herein, a reasonable attempt has been made to verify all such information.

MARKET CONDITIONS

Because market conditions, including economic, social and political factors, change rapidly and, on occasion, without warning, the market value expressed as of the date of this appraisal cannot be relied upon to estimate the market value as of any other date except with further advice of the appraiser.

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1510-1526 Lakeshore Road W (Gardens), Oakville

COMPENSATION

The compensation for services rendered in this report does not include a fee for court preparation or court appearance, which must be negotiated separately. However, neither this nor any other of these limiting conditions is an attempt to limit the use that might be made of this report should it properly become evidence in a judicial proceeding. In such a case, it is acknowledged that it is the judicial body which will decide the use of the report which best serves the administration of justice.

ENGINEERING AND CONSTRUCTION

The author is not qualified to give engineering advice. It is assumed that there are no patent or latent defects in the subject improvements. The physical condition of any improvements described herein was based on visual inspection only. It is not possible for practical reasons to inspect those parts of the building which are inaccessible or covered; therefore no opinion can be expressed as to the physical condition of these areas. Electrical, heating, cooling, plumbing, sewer and/or septic system, mechanical equipment and water supply were not specifically tested, but were assumed to be in good working order, and adequate, unless otherwise specified. No liability is assumed for the soundness of structural members, since no engineering tests were made of same. The roof of structures described herein is assumed to be in good repair unless otherwise noted. The existence of potentially hazardous material used in the construction or maintenance of the building or deposited, such as urea formaldehyde foam insulation and/or asbestos insulation, which may or may not be present in the property, has not been considered. The appraiser is not qualified to detect such substances and suggests the client seek an expert opinion, if desired.

FIRE AND SMOKE DETECTORS

It is imperative that the reader or any other interested party be aware that the appraiser did not inspect the premises for fire detection or smoke detection systems, or for the presence of carbon monoxide detectors, nor did the appraiser inspect the condition of such equipment, if present. The appraiser takes no responsibility whatsoever for the lack of, or condition of, detection devices that may be located on the premises, nor does the appraiser warrant compliance in any manner of such equipment, if present.

FINANCING

The reader should be aware that when preparing an appraisal for financing purposes, appraisers do not investigate if the prospective loan and applicant satisfy prudent loan underwriting criteria. Consequently, we assume no responsibility for losses on loans involving our appraisal efforts that result from the lender’s failure to do proper due diligence regarding creditworthiness of the borrower or their ability to service or repay the loan.

VALIDITY

This report is only valid if it bears the original signature of the author.

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1510-1526 Lakeshore Road W (Gardens), Oakville

SCOPE OF THE APPRAISAL

The scope of the appraisal encompasses the necessary research and analysis to prepare a report in accordance with “The Standards” which involved the following steps:

• The subject property was inspected and photographed on February 5, 2015.

• Property data including site and building information was obtained by a personal inspection of the subject, review of the assessment data and examination of other material provided by the client (e.g. site plans, Agreements of Purchase and Sale, architectural renderings, budget costs, etc.).

• Development trends, economic and real estate market conditions in relation to the subject property existing as of the effective date were considered; reviewed and analyzed the sales history of the subject.

• The physical, functional and economic characteristics of the subject property were considered.

• Municipal data was based on information obtained from various sources including government publications, municipal economic development departments and real estate publications.

• Did not complete a search of the title records, but confirmed ownership using Geowarehouse records.

• Appropriate documents including current zoning designation were reviewed but did not discuss the land use controls with Planning Department officials.

• Highest and Best Use of the property was considered and analyzed.

• Market research was conducted with regard to comparable sales, vacancy, overall capitalization rates and rents.

• Sales data was obtained from the local real estate board, Geowarehouse, Realtrack, discussions with real estate agents, other appraisers and our files.

• In considering the purpose and intended use of the appraisal, we utilized the Income and Direct Comparison approaches to value.

• After assembling and analyzing the data, a final estimate of value was determined.

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ADDENDUM

Appendix A Corporate Curriculum Vitae

Appendix B Definitions of Appraisal Terms and Explanations

APPENDIX A

CORPORATE C.V. ANTEC APPRAISAL GROUP INC.

I. BACKGROUND AND OVERVIEW

Based in Hamilton, Toronto, Waterloo and Durham, serving the GTA and, South, Central and Eastern Ontario, Antec Appraisal Group is a leader in real estate valuation and consulting services. We deliver a broad range of valuation, consulting and property tax services to our clients.

Antec Appraisal Group has a professional staff of seven Accredited Appraisers of the Canadian Institute (AACI); three Canadian Residential Appraisers (CRA), five Candidate Member Appraisers, as well as support staff. We offer many years of combined experience, providing our valued clients with real estate appraisals and consulting services for all property types: residential, commercial, industrial, investment and development land in our coverage area.

In addition, we offer various extensive consulting services which require valuation and analyses of property interests; appearances before courts, boards, and tribunals to provide expert testimony in order to settle compensation or damage claims; consulting services in relation to site assemblies, transfers, trades, and sales; valuations, analyses and compensation studies required to satisfactorily resolve issues arising from the extension or widening of highway projects, the acquisition of facilities and/or sites, and urban renewal projects.

II. REAL ESTATE SERVICES

Antec Appraisal Group offers a wide range of consulting services to meet the needs of our diverse clientele. Over the years we have been recognized by the level of professional support provided/extended to our many client groups.

The Business Community Real property valuations, reviews, analyses and recommendations to realize the greatest possible benefit from corporate real estate assets;

Financial Institutions Real property valuations, reviews, analyses and recommendations that will assist lenders in their mortgage underwriting;

The Residential Market Providing quick, effective response to requests for appraisals to confirm lending levels, insurance requirements or to support buy/sell decisions;

The Legal Profession Assisting counsel with comprehensive property analysis and reports, backed by expert testimony, if required;

The Development Sector Professional assistance that covers all aspects of the development process from feasibility and land use studies to marketing and confidential brokerage services;

Trustees, Receivers, Accountants Valuation analysis to assist in marketing decisions, financial restructuring, estate planning, and tax planning;

Government Agencies Valuation reports and feasibility studies necessary for the responsible and effective management of public property; valuations to assist in the acquisition/disposition process including full buyouts or partial property requirements;

Private Institutions Carrying out property utilization studies for insurance damage claims, acquisition or disposition strategies;

Agricultural & Rural Community Valuations as they affect working farms, hobby farms and rural residences for capital gains calculations, development potential, or rezoning considerations.

III. THE PROFESSIONAL TEAM

ANTEC APPRAISAL GROUP INC.

Hamilton Office Toronto Office Waterloo Office East Office (Durham)

Kevin Antonides, AACI Scott Stamford David deVries, AACI Brett Puckrin, AACI Managing Partner Managing Partner Managing Partner Managing Partner

Eugene Catania, CRA Gus Dal Colle, AACI, David Castle Shanna James, AACI Managing Partner Managing Partner Candidate Member, AIC Managing Partner

Nathan Stienstra, AACI Jonathan Kowalski Wendy Evelyn Appraiser Candidate Member, AIC CRA

Janine Haanstra, AACI Cindy Morey Appraiser Candidate Member, AIC

Vonny Gunawan, CRA Sheena Christie Appraiser Candidate Member, AIC

Carolyn Grift Candidate Member, AIC

Research & Administrative Team

Dina Schuurman Rosemary Gringhuis Bruno Iacurti Serguei Kaminski Rebecca Woudstra Office Manager Bookkeeper Research Associate Research Associate Junior Appraiser

Rachel Vanderbrugghen Meaghan Blancher Elena McGill Tanya Latreille Research Assistant Administrative Assistant Office Administrator Office Administrator

IV. OFFICES

Antec Appraisal Group - Hamilton Janine Haanstra, B.A., AACI 20 Hughson Street South, Suite 612 [email protected] Hamilton, ON L8N 2A1 ext. 120 Tel: (905) 777-1225

Kevin Antonides, B.E.S., AACI, PLE, R/W - AC Bruno Iacurti, B.A. [email protected] [email protected] ext. 106 ext. 122

Eugene Catania, CRA Vonny Gunawan, CRA [email protected] [email protected] ext. 107 ext. 101

Nathan Stienstra, B.B.A., AACI, P. APP Carolyn Grift, Junior Appraiser [email protected] [email protected] ext. 103 ext. 123

Antec Appraisal Group - Toronto Scott Stamford 4550 Highway 7, Suite 225 [email protected] Woodbridge, ON L4L 4Y7 ext. 301 Tel: (647) 427-4114

Gus Dal Colle, AACI, MRICS, PLE Jonathan Kowalski, Junior Appraiser [email protected] [email protected] ext. 302 ext. 303

Antec Appraisal Group - Waterloo David Castle, Junior Appraiser 656 Colby Drive, Suite 202 [email protected] Waterloo, ON N2V 1A2 ext. 403 Tel: (519) 342-3056

David deVries BA, AACI, P.APP Rebecca Woudstra, Junior Appraiser [email protected] [email protected] ext. 401 ext. 402

Antec Appraisal Group – East Wendy Evelyn, CRA 170 Water Street [email protected] Port Perry, ON L9L 1C4 ext. 506 (905) 985-6291

Brett Puckrin, AACI, P.App, PLE Cindy Morey, Junior Appraiser [email protected] [email protected] ext. 500 ext. 507

Shanna James, B.Comm, AACI, P.App, PLE Sheena Christie, Junior Appraiser [email protected] [email protected]

ext. 503 ext. 504

V. PARTIAL CLIENT LIST

FINANCIAL INSTITUTIONS  AGF Trust  Equitable Trust  Alterna Savings  First National Financial  Bank of Montreal  First Ontario Credit Union  Bank of China  GE  Business Development Bank  Hald-Nor Credit Union  Canada ICI Mortgage Services  Home Trust  Central One Credit Union  HSBC  CIBC  Invis Bank  CIT Financial  Laurentian Bank  Citizens Bank  Manulife Financial  Community Trust  MCAP  Cooperators Trust  Meridian Credit Union  Effort Trust  Montrose Mortgage Corporation  Royal Bank of Canada  Mortgage Intelligence  Scotiabank  Mortgage Architects  Sunlife Financial  National Bank of Canada  TD Canada Trust  Pacific & Western Bank  Teachers Credit Union  Penmore Mortgage Capital  Verico One Mortgage  Peoples Trust  Your Neighbourhood Credit Union

LEGAL FIRMS  Cassels Brock  Osler Hoskin Harcourt  Fogler Rubinoff LLP  Ross McBride  Gowlings  Simpson Wigle  Haber Associates  Sullivan-Mahoney  Heenan Blaikie  Weir Foulds  Miller Thomson  McCarthy Tetrault

GOVERNMENT AGENCIES  Public Works & Government  County of Oxford Services Canada  County of Renfrew  CMHC  City of Brampton  Environment Canada  City of Brantford  Hydro One  City of Burlington  The Fuller Landau Group Inc (GO  City of Hamilton Transit)  City of Cambridge  Ministry of Transportation  City of Woodstock  Infrastructure Ontario  Town of Grimsby  Region of Halton  Town of Lincoln  Region of Niagara  Town of Oakville  Region of Peel  Bruce Trail Conservancy  Region of Waterloo  Nature Conservancy  Region of York  McMaster University  County of Norfolk  University of Waterloo  City of Vaughan  City of Markham

DEVELOPMENT GROUPS/ OTHER

 Agellan Capital  King Sturge, LLP  Avis Budget Group  Landmart Homes  Blair Blanchard Stapleton  Mattamy Homes  CanFirst Capital  New Horizon Homes  CBS Corporation  Pizza Hut  CNR Counsel Corporation  Pizza Pizza  CPR  Redcliff  Emshih Developments  Shell Canada  Fengate  Shoppers Drug Mart  First Gulf Development Corporation  Union Gas  Forum Equity Partners  ZZEN Group of Companies  CREIT  Zentil Group of Companies  Enbridge Gas  Mantella Corporation

APPENDIX B

DEFINITION OF MARKET VALUE "Market Value" is defined as 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 that 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 the 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 best interests; 3) a reasonable time is allowed for exposure in the open market; 4) payment is made in terms of cash in Canadian 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 or concessions granted by anyone associated with the sale."

MARKET VALUE – EXPROPRIATIONS ACT Market Value is also defined by the Expropriation’s Act R.S.O. 1990 as follows: 14(1) (1) The term “Market Value” of land expropriated is defined as the amount that the land might be expected to realize if sold in the open market by a willing seller and a willing buyer.

(2) Where the land expropriated is devoted to a purpose for such nature that there is no general demand or market for land for that purpose, and the owner genuinely intends to relocate in similar premises, the market value shall be deemed to be the reasonable cost of equivalent reinstatement.

(3) Where only part of the land of an owner is taken and such part is of a size, shape or nature for which there is no general demand or market, the market value and the injurious affection caused by the taking may be determined by determining the market value of the whole of the owner’s land and deducting therefrom the market value of the owner’s land after the taking.

(4) In determining the market value of land, no account shall be taken of, (a) the special use to which the expropriating authority will put the land; (b) any increase or decrease in the value of the land resulting from the development in respect of which the expropriation is made or from any expropriation or imminent prospect of expropriation; or (c) any increase in the value of the land resulting from the land being put to use that could be retrained by an court or is contrary to law or is detrimental to the health of the occupants of the land or to the public health.

Market Value, as estimated in this report, reflects cash and/or terms or financial arrangements equivalent to cash.

VALUE-IN-CONTRIBUTION The amount that the property/easement to be conveyed (a) contributes to / detracts from the market value of the subject property and (b) contributes to the market value of the applicant’s property / ownership, (including savings in development costs / enhanced development, if applicable).

OTHER TYPES OF VALUES Other types of value are also considered in real estate: use value, investment value, going- concern value, insurable value, and assessed value. Use Value focuses on the real estate’s contributory value to the enterprise of which it is a part, without regard to the property’s highest and best use. (Limited-market properties may be appraised for market value based on their current use or most likely alternative use.) Investment Value is the value of an investment to a particular investor, based on his or her investment requirements. Going-Concern Value is the value created by a proven property operation in which the physical real estate assets are an integral part of an ongoing business. Insurable Value is the portion of value that is covered by casualty insurance. Assessed Value refers to the property’s value for property tax purposes, according to the requirements of the relevant provincial act.

EFFECTIVE DATE OF VALUE OPINION A current value opinion refers to an effective date that is contemporaneous with the date of the report, or a date that is within a reasonable period of the date of inspection. A retrospective value opinion refers to an effective date that is prior to the date of the report. Since the client has requested a retrospective value, the appraiser will gather and analyze market date pertinent to the retrospective date. A prospective value opinion refers to an effective date following the date of the report. The prospective value opinion is intended to reflect the current perceptions of market participants as to the future. The appraisal is made in accordance to conditions pertaining at the date of the inspection. It is assumed that no significant changes in economic / real estate conditions would occur between now and the estimated effective date of this report that would have any impact on value therefore the appraiser is not responsible for unforeseeable events that alter market conditions prior to the effective date.

PROPERTY RIGHTS APPRAISED Fee Simple can be defined as the highest form of real property ownership, an absolute fee without limitations to a particular class of heirs; however, subj3ct to the restriction of eminent domain, escheat, police power and taxation. The Leased Fee estate or interest is similar to the Fee Simple Estate in that title belongs to the landlord, but some of the Bundle of Rights, including the right of use and occupancy, have been conveyed to others by a lease for a definite period of time. A Condominium, or Strata title, is a form of fee ownership of spate units or portions of multi- unit buildings that provides for formal filing and recording of a divided interest in real property. A condominium unit is a separate ownership, and title is held by an individual owner. The unit may be separately leased, sold or mortgaged. A condominium owner also has title to a partial interest in the total project, whether it is a residential or commercial property. The owner possesses a three-dimensional space within the outer walls, roof or ceiling, and floors and, along with other owners, has an undivided interest in common areas; e.g., the land, the public portions of the building, the foundation, the outer walls and the spaces provided for parking and

recreation. The owners of units in a condominium project usually form an association to manage commonly held real estate in accordance with adopted by-laws that are based on the minimum requirements of provincial legislation. The expenses of management and maintenance are divided pro rata among the owners, who pay a monthly fee.

REASONABLE EXPOSURE TIME Exposure time precedes the effective date of the appraisal. It may be defined as: The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. This estimate is based upon an analysis of past events assuming a competitive and open market. The estimated time may be expressed as a range and can be based on one or more of the following: • Statistical information about days on market; • Information gathered through sales verification; and • Interviews of market participants The reasonable exposure period is a function of price, time and use, not an isolated estimate of time alone. Exposure time is different from various types of real estate and under various market conditions.

ASSESSMENT & TAXES The Provincial Government, through the Ministry of Revenue, Assessment Division, has the authority to administer and establish the assessed value of all properties in Ontario. All municipalities in the Province are now assessed on a “Current Value” basis with a valuation date of June 30, 2005. The amount of realty taxes levied against a property is calculated using the assessment, multiplied by the locally established appropriate tax rate (Residential, Multi-Residential, Commercial or Industrial): $ Assessment X Tax rate = Property Taxes Assessment Data has been included for information purposes only and is not to be construed as indicative of the property’s market value.

OFFICIAL PLAN The Official Plan is defined in the Planning Act as follows: “A document approved by the Minister of Municipal Affairs and Housing, containing objectives and policies established primarily to provide guidance for the physical development of a municipality while having regard to relevant social, economic and environmental matters.” The Purpose of the Official Plan is to provide a formally adopted text of public policies and standards as guidelines for the future development of the community. It is a projection of anticipated growth and planning needs. The Official Plan consists of the texts and maps describing such programs and policies, approved by the Minister of Municipal Affairs from time to time as provided in The Planning Act. Requirements change from year to year and it is often necessary for the municipality to reassess the relevance of their plan to the supply and demand situation. There is, therefore, provision for amendments to the Official Plan, where reasonable grounds exist. The Official Plan does not directly regulate the use of private lands and therefore must be supported by Zoning By-Laws. The Zoning By-Laws implement the policies established by the Official Plan.

ZONING While the Official Plan sets out the framework for future change and development, Zoning By-Laws put such plans into effect and provide for the day-to-day administration of planning. A Zoning By-Law defines what can take place on an area of land and how structures are to be located on a property. Restrictions on use are designed to separate incompatible uses, for instance, prohibiting factories in residential areas. In Zoning By-Laws, zone regulations normally include: The height, floor area and location of any building or structure, the floor area ratio, the size, frontage and depth of the lot on which the buildings or structures are location, the front, side and rear yards on such lots, the maximum coverage and the number and location of off-street parking spaces.

HIGHEST AND BEST USE Real estate is valued in terms of its highest and best use. Highest and best use is defined as: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability Source: The Dictionary of Real Estate Appraisal Third Edition, 1993 Appraisal Institute

To properly analyse highest and best use, two determinations must be made. First, the highest and best development of the site as though vacant and available for use is made. Second, the highest and best use of the property as improved is analysed and estimated. The highest and best use of both the land as though vacant and the property as improved must meet four criteria: physically possible, legally permissible, financially feasible, and maximally productive. Of the uses that satisfy the first three tests, the use that produces the highest price or value consistent with the rate of return warranted by the market is the maximally productive use.

The four criteria that the Highest and Best use must meet are: LEGALLY PERMISSIBLE In determining the Highest and Best Use of a property, it is important for the appraiser to ascertain the range of uses that are legally permissible. In cases where modifications to Zoning By-law and Official Plan designations are likely, these uses should also be considered. Consideration should also be given to public planning initiatives and economic and political conditions that affect planning decisions. These considerations will assist the appraiser in determining whether amendments to official plan and/or zoning designations are likely. PHYSICALLY POSSIBLE The proposed use for a site cannot be considered its highest and best use unless that use is physically and functionally possible and adaptable to the characteristics of the site. The size, shape, area, topography and soil conditions may affect the potential uses that can be developed. The physical possibility of development for the Subject also reasonably expects that development can occur without additional costs above those of a typical vacant site. In cases where there are unusual costs associated with development (e.g. soil clean, demolition, external costs, etc.) these costs should be deducted from market value. FINANCIALLY FEASIBLE The estimate of market value is based on the market demand for properties similar to that of the subject, expecting that the purchasers have rationalized a positive financial benefit or utility for the basis of an acquisition. There is strong evidence in the market for acquisitions, as outlined in the valuation section of the report. MAXIMALLY PRODUCTIVE A use cannot be considered a site's highest and best use unless it's anticipated earnings ability is sufficient to generate a reasonable return on costs of acquisition and development. This aspect of highest and best use inherently involves a cost benefit analysis whereby the use that generates the highest profit or greatest return logically represents the highest and best use.