dash design and architecture schoolpdfs.dadeschools.net/dash/cbre appraisal report - dash.pdf ·...

Owner: Miami-Dade County Public Schools1450 NE 2nd Ave, Miami, FL 33132(305) 995-1000

DASH DESIGN AND ARCHITECTURE SCHOOL4001 NE 2nd Ave, Miami, FL 33137

PrePared By: CBre, InCAPPRAISAL

APPRAISAL REPORT DASH SCHOOL SITE 4001 NE 2nd Avenue Miami, Miami-Dade County, Florida 33137 CBRE, Inc. File No. 15-397MI-1336

Jose Murguido Vice President ZYSCOVICH ARCHITECTS 100 N. Biscayne Boulevard, 27th Floor Miami, Florida 33132

Miami-Dade County Public Schools – School Board 1450 N.E. 2nd Avenue Miami, Florida 33132

www.cbre.com/valuation

© 2015 CBRE, Inc.

VALUATION & ADVISORY SERVICES

777 Brickell Avenue, #910 Miami, FL 33131

T (305) 381-6472 F (305) 381-6441

www.cbre.com

November 24, 2015 Jose Murguido, Vice President Miami-Dade County Public Schools - ZYSCOVICH ARCHITECTS School Board 100 N. Biscayne Boulevard, 27th Floor 1450 N.E. 2nd Avenue Miami, Florida 33132 Miami, Florida 33132 RE: Appraisal of DASH School Site 4001 NE 2nd Avenue Miami, Miami-Dade County, Florida CBRE, Inc. File No. 15-397MI-1336

Dear Mr. Murguido:

At your request and authorization, CBRE, Inc. has prepared an appraisal of the market value of the referenced property. Our analysis is presented in the following Appraisal Report.

The subject property is a 1.66-acre civic institution zoned site located within the edgy and rapidly redeveloping Design District within the City of Miami in Miami-Dade County, Florida. The subject site is currently improved with the 101,224-square foot Design and Architecture Senior High (DASH) school building that dates to 1938 and extensively renovated in 1981. However, the current use for DASH is considered an underutilization of the subject site based on the submarket transformation underway as the Design District, a high street retail shopping destination with luxury boutique retail, hotel & multi-family residential developments recently delivered & under construction. As such, the Miami-Dade County School Board is considering a proposed successional rezoning of the subject site from CI, Civic Institutional District to T6-8 O, Urban Core Transect Zone, which permits higher density mixed-use retail, office, hotel & residential uses better suited for the subject site location & NE 2nd Avenue frontage.

As part of the potential for successional rezoning, we have been asked to consider the highest & best use of the subject site under two (2) scenarios, whereby the Miami-Dade County School Board would consider sell-off of the prime street frontage along NE 2nd Avenue while retaining a portion of the subject site for redevelopment of a new, multi-story DASH school facility to be funded by the proposed sell-off to a third party developer/investor.

Scenario One for potential sell-off is identified as Option 2 comprising 40,655-square feet of site area with 168.12 front feet along NE 2nd Avenue, while the Miami-Dade County School Board retains 31,600-square feet of site area fronting NE 39th Street.

© 2015 CBRE, Inc.

Jose Murguido November 24, 2015 Page 2

Scenario Two for potential sell-off is identified as Option 3.1 comprising 37,102-square feet of site area with 168.12 front feet along NE 2nd Avenue and 60.13 front feet along NE 39th Street, while the Miami-Dade County School Board retains 28,026-square feet of site area at the northeast corner of the site, i.e. setback, with a shared access easement from NE 39th Street.

Based on the foregoing scenarios and our analysis contained in the following report, the market value and highest & best use of the subject property, subject to delivering a clear & level site, successional rezoning and providing a shared access easement, is concluded as follows:

MARKET VALUE CONCLUSIONS Appraisal Premise Interest Appraised Date of Value Value Conclusion

As Is Land Value - Scenario 1 - Option 2 Fee Simple Estate August 27, 2015 $40,000,000As Is Land Value - Scenario 2 - Option 3.1 Fee Simple Estate August 27, 2015 $41,000,000

Compiled by CBRE

The report, in its entirety, including all assumptions and limiting conditions, is an integral part of, and inseparable from, this letter.

The following appraisal sets forth the most pertinent data gathered, the techniques employed, and the reasoning leading to the opinion of value. The analyses, opinions and conclusions were developed based on, and this report has been prepared in conformance with, the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), and the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

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

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

Respectfully submitted, CBRE - VALUATION & ADVISORY SERVICES

Stuart J. Lieberman, MAI James E. Agner, MAI, AI-GRS, SGA, MRICS Vice President Cert Gen RZ1074

Senior Managing Director – Florida/Caribbean

Cert Gen RZ382 www.cbre.com/stuart.lieberman www.cbre.com/james.agner Phone: (305) 381-6472 Phone: (305) 381-6480 Fax: (305) 381-6441 Fax: (305) 381-6441 Email: [email protected] Email: [email protected]

© 2015 CBRE, Inc.

Certification

i

Certification

We certify to the best of our knowledge and belief:

1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported

assumptions and limiting conditions and is our personal, impartial and unbiased professional analyses, opinions, and conclusions.

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

4. Our engagement in this assignment was not contingent upon developing or reporting predetermined results.

5. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

6. This appraisal assignment was not based upon a requested minimum valuation, a specific valuation, or the approval of a loan.

7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice, as well as the requirements of the State of Florida.

8. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

9. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

10. As of the date of this report, Stuart J. Lieberman, MAI and James E. Agner, MAI have completed the continuing education program for Designated Members of the Appraisal Institute.

11. Stuart J. Lieberman, MAI has and James E. Agner, MAI has not made a personal inspection of the property that is the subject of this report.

12. No one provided significant real property appraisal assistance to the persons signing this report.

13. Valuation & Advisory Services operates as an independent economic entity within CBRE, Inc. Although employees of other CBRE, Inc. divisions may be contacted as a part of our routine market research investigations, absolute client confidentiality and privacy were maintained at all times with regard to this assignment without conflict of interest.

14. Stuart J. Lieberman, MAI and James E. Agner, MAI have not provided any services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

Stuart J. Lieberman, MAI James E. Agner, MAI, AI-GRS, SGA, MRICS Cert Gen RZ1074 Cert Gen RZ382

© 2015 CBRE, Inc.

Subject Photographs

ii

Subject Photographs

Aerial View

© 2015 CBRE, Inc.

Subject Photographs

iii

Photo 1 – NE 2nd Avenue Frontage Photo 2 – NE 2nd Avenue Pedestrian View

Photo 3 – NE 39th Street Frontage Photo 4 – FEC Right-of-Way Easement

Photo 5 – View From NE 39th Street Photo 6 – FEC Right-of-Way Looking North

© 2015 CBRE, Inc.

Subject Photographs

iv

Photo 7 – NE 2nd Avenue Looking North Photo 8 – NE 2nd Avenue Looking South

Photo 9 – NE 39th Street Looking East Photo 10 – NE 39th Street Looking West

© 2015 CBRE, Inc.

Executive Summary

v

Executive Summary

Property Name

Location

Highest and Best Use

As If Vacant

As Improved

Property Rights Appraised

Date of Report

Date of Inspection

Estimated Exposure Time

Estimated Marketing Time

Land Area - Total Miami-Dade County School Board Owned 1.66 AC 72,255 SF

Land Area - Proposed Option 2 for Sell-Off 0.93 AC 40,655 SF

Land Area - Proposed Option 3.1 for Sell-Off 0.85 AC 37,102 SF

Improvements - Existing School

Property Type Retail

Number of Buildings

Number of Stories

Gross Leasable Area

Year Built 1938 Renovated: 1981

Condition

Buyer Profile

(School)

Developer

Average

1

DASH School Site

August 27, 2015

Fee Simple Estate

Redevelop with mixed-use retail, office, residential & civic uses

Mixed-use retail, office, residential & civic

4001 NE 2nd Avenue, Miami, Miami-Dade County, Florida 33137

1

101,224 SF

November 24, 2015

6 Months

6 Months

VALUATION Total Per SF

Market Value As Is - Option 2 August 27, 2015

Cost Approach Not Applicable ---

Sales Comparison Approach $39,000,000 $959.29

Income Approach - Land Residual Method $41,400,000 $1,018.32

Market Value As Is - Option 3.1 August 27, 2015Cost Approach Not Applicable ---

Sales Comparison Approach $40,000,000 $1,078.11

Income Approach - Land Residual Method $43,500,000 $1,172.44

CONCLUDED MARKET VALUES

Appraisal Premise Interest Appraised Value

As Is Land Value - Scenario 1 - Option 2 Fee Simple Estate $40,000,000

As Is Land Value - Scenario 2 - Option 3.1 Fee Simple Estate $41,000,000

Compiled by CBRE

Date of Value

August 27, 2015

August 27, 2015

© 2015 CBRE, Inc.

Executive Summary

vi

STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT)

Strengths/ Opportunities

The subject fronts a primary north-south avenue within the Design District. The subject property has high density, mixed-use redevelopment potential, subject to

successional rezoning. Several New York based hedge funds are targeting the Design District and have committed

substantial resources to assembling & redeveloping obsolete properties, such as the subject property.

The Design District is attracting substantial attention from investors & developers based on the luxury brand retailers and DACRA Realty in partnership with L Real Estate (LVMH, Louis Vuitton Moet Hennessy). DACRA Realty has been successful in deploying a $312 million investment and master plan, including demolitions, major renovations, and new, ground up construction totaling 1.1 million square feet with a 30 foot wide pedestrian plaza connecting N.E. 38th Street to N.E. 42nd Street to public plazas and two (2) department stores.

Weaknesses/ Threats

The subject site possesses a quirky configuration with approximately 60% of the overall site possessing primary & desirable frontage along NE 2nd Avenue and NE 39th Street, while the remaining 40% +/-fronts the FEC right-of-way creating a less desirable redevelopment opportunity.

EXTRAORDINARY ASSUMPTIONS

An extraordinary assumption is defined as “an assumption directly related to a specific

assignment, as of the effective date of the assignment results, which if found to be false, could

alter the appraiser’s opinions or conclusions.” 1

We were provided with two scenario Option drawings created by the client. We have relied upon these Option drawings for site size & value estimate calculations. If the site size or configurations change our value conclusions could be impacted and we reserve the right to amend this report and our value conclusions according to any changes in the Option drawings.

At the specific direction of the client, we assume the subject site would be delivered to market in clear & level condition; with successional re-zoning to T6-8 O readily achievable in a timely manner; and, with a shared access driveway/easement along FEC right-of-way that will support back-of-site access.

The use of these extraordinary assumptions may have affected the assignment results.

1 The Appraisal Foundation, USPAP, 2014-2015 ed., U-3.

© 2015 CBRE, Inc.

Executive Summary

vii

HYPOTHETICAL CONDITIONS

A hypothetical condition is defined as “a condition, directly related to a specific assignment,

which is contrary to what is known by the appraiser to exist on the effective date of the

assignment results, but is used for the purposes of analysis.” 2

None noted

2 The Appraisal Foundation, USPAP, 2014-2015 ed., U-3.

© 2015 CBRE, Inc.

Table of Contents

viii

Table of Contents

Certification ......................................................................................................................... i

Subject Photographs ............................................................................................................ ii

Executive Summary .............................................................................................................. v

Table of Contents .............................................................................................................. viii

Introduction ........................................................................................................................ 1

Area Analysis ...................................................................................................................... 4

Neighborhood Analysis ....................................................................................................... 7

Site Analysis ...................................................................................................................... 19

Zoning .............................................................................................................................. 22

Tax and Assessment Data .................................................................................................. 25

Highest and Best Use ........................................................................................................ 37

Appraisal Methodology ..................................................................................................... 43

Land Value ........................................................................................................................ 45

Reconciliation of Value ...................................................................................................... 55

Assumptions and Limiting Conditions ................................................................................ 56

ADDENDA A Land Sale Data Sheets B Legal Description C Précis METRO Report - Economy.com, Inc. D Client Contract Information E Qualifications

© 2015 CBRE, Inc.

Introduction

1

Introduction

OWNERSHIP AND PROPERTY HISTORY

Title to the property is currently vested in the name of Miami-Dade County Public Schools –

School Board, who acquired title to the property in June 1985 for $4,500,000 and may have

been an internal municipal government transfer. We are unaware of the circumstance or

condition of sale given this dated transfer.

INTENDED USE OF REPORT

This appraisal is to be used by the client, Zyscovich Architects and Miami-Dade County Public

Schools – School Board, for internal decision making purposes and potential sell-off strategy, and

no other use is permitted.

INTENDED USER OF REPORT

This appraisal is to be used by the client, Zyscovich Architects and the School Board of Miami-

Dade County, LLC, and no other user may rely on our report unless as specifically indicated in

the report.

Intended Users - the intended user is the person (or entity) who the appraiser intends will use the results of the appraisal. The client may provide the appraiser with information about other potential users of the appraisal, but the appraiser ultimately determines who the appropriate users are given the appraisal problem to be solved. Identifying the intended users is necessary so that the appraiser can report the opinions and conclusions developed in the appraisal in a manner that is clear and understandable to the intended users. Parties who receive or might receive a copy of the appraisal are not necessarily intended users. The appraiser’s responsibility is to the intended users identified in the report, not to all readers of the appraisal report. 3

PURPOSE OF THE APPRAISAL

The purpose of this appraisal is to estimate the market value of the subject property as if vacant

and available to be put to the highest & best use.

DEFINITION OF VALUE

The current economic definition of market value agreed upon by agencies that regulate federal

financial institutions in the U.S. (and used herein) is as follows:

The most probable price which a property should bring in a competitive and open market under

all conditions requisite to a fair sale, the buyer and seller each acting prudently and

knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this

3 Appraisal Institute, The Appraisal of Real Estate, 14th ed. (Chicago: Appraisal Institute, 2013), 50.

© 2015 CBRE, Inc.

Introduction

2

definition is the consummation of a sale as of a specified date and the passing of title from seller

to buyer under conditions whereby:

1. buyer and seller are typically motivated; 2. both parties are well informed or well advised, and acting in what they consider their own

best interests; 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements

comparable thereto; and 5. the price represents the normal consideration for the property sold unaffected by special

or creative financing or sales concessions granted by anyone associated with the sale. 4

INTEREST APPRAISED

The value estimated represents fee simple interest and defined as follows:

Fee Simple Estate - Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat. 5

SCOPE OF WORK

This Appraisal Report is intended to comply with the reporting requirements set forth under

Standards Rule 2 of USPAP. The scope of the assignment relates to the extent and manner in

which research is conducted, data is gathered and analysis is applied. CBRE, Inc. completed the

following steps for this assignment:

Extent to Which the Property is Identified

The property is identified through the following sources:

postal address assessor’s records legal description client provided option drawings

Extent to Which the Property is Inspected

The extent of the inspection included the following: on-site and surrounding environs.

Type and Extent of the Data Researched

CBRE reviewed the following:

applicable tax data zoning requirements flood zone status demographics

4 Interagency Appraisal and Evaluation Guidelines; December 10, 2010, Federal Register, Volume 75 Number 237,

Page 77472.

5 Dictionary of Real Estate Appraisal, 78.

© 2015 CBRE, Inc.

Introduction

3

comparable sale & listing data

Type and Extent of Analysis Applied

CBRE, Inc. analyzed the data gathered through the use of appropriate and accepted appraisal

methodology to arrive at a probable value indication via each applicable approach to value. For

vacant land, the sales comparison approach has been employed for this assignment.

Data Resources Utilized in the Analysis

DATA SOURCES

Item: Source(s):

Site DataSize Legal description, recorded plat and option drawings provided by client

Improved DataBuilding Area Public records and Miami-Dade County Property Appraiser's websiteNo. Bldgs. Public records and Miami-Dade County Property Appraiser's websiteYear Built/Developed Public records and Miami-Dade County Property Appraiser's website

Economic DataDeferred Maintenance: ObservationsBuilding Costs: Not applicableIncome Data: Market dataExpense Data: Market data

Compiled by CBRE

© 2015 CBRE, Inc.

Area Analysis

4

Area Analysis

Moody’s Economy.com provides the following Miami, FL metro area economic summary as of

July 2015. The full Moody’s Economy.com report is presented in the Addenda.

MIAMI-MIAMI BEACH-KENDALL, FL - ECONOMIC INDICATORSIndicators 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Gross Metro Product (C$B) 104.8 104.3 104.5 106.5 108.3 110.9 114.4 119.1 123.6 127.9 131.5 134.6

% Change -6.0 -0.6 0.2 1.9 1.7 2.4 3.1 4.1 3.8 3.5 2.8 2.4

Total Employment (Ths) 988.6 985.1 1,007.3 1,031.3 1,056.7 1,087.7 1,115.9 1,150.1 1,187.8 1,214.9 1,228.7 1,233.9

% Change -5.6 -0.3 2.3 2.4 2.5 2.9 2.6 3.1 3.3 2.3 1.1 0.4

Unemployment Rate (%) 10.4 11.1 9.5 8.4 7.6 6.8 6.0 5.2 4.5 4.2 4.2 4.4

Personal Income Growth (%) -3.5 5.3 7.1 4.2 2.0 5.9 6.2 7.4 8.0 7.3 5.5 4.8

Median Household Income ($ Ths) 41.2 40.5 40.3 40.9 41.9 43.7 45.2 46.9 49.2 51.4 53.1 54.6

Population (Ths) 2,463.9 2,508.7 2,579.9 2,611.0 2,641.9 2,662.9 2,696.2 2,732.6 2,772.4 2,813.9 2,855.9 2,898.0

% Change 1.1 1.8 2.8 1.2 1.2 0.8 1.3 1.3 1.5 1.5 1.5 1.5

Net Migration (000) 13.4 31.1 58.1 17.8 17.8 11.6 23.3 26.4 29.8 31.6 32.3 32.5

Single-Family Permits 624.0 941.0 962.0 1,819.0 2,266.0 2,077.0 2,800.2 4,637.6 6,055.9 6,403.0 6,551.5 6,638.1

Multifamily Permits 771.0 2,262.0 1,656.0 3,250.0 8,050.0 5,654.0 17,229.1 16,797.3 14,070.7 9,837.6 9,042.5 9,096.6

Fhfa House Price (1995Q1=100) 210.8 196.0 183.6 186.7 208.5 234.1 252.8 260.0 264.2 263.9 263.6 266.8

Source: Moody's Economy.com

© 2015 CBRE, Inc.

Area Analysis

5

RECENT PERFORMANCE

The economy in Miami is showing signs of weakness. The area's unemployment rate has not

budged over the last six months, and hourly wages and weekly hours worked have taken a step

backward during that time. According to CoreLogic, house prices rose by only a fraction in May,

and growth has slowed for four consecutive months. House price growth in Miami is partially

constrained by the share of the area's homes in foreclosure, which is the highest in the South. But

home sales are a bright spot; according to the Miami Association of Realtors, the area set a

record for single-family home sales in June.

FINANCIAL SERVICES

Job growth in Miami's pivotal financial services industry will maintain a healthy pace over the next

several years. After dipping to a 20-year low in 2010, employment has fully rebounded. More

employees work in financial services than at any previous time in the area's history. These

positions, which pay 50% more than the typical job in Miami, are a critical component of the

recovery because they support industries that service the local economy such as homebuilding,

retail and healthcare.

Financial services will expand because Miami is the operational financial capital of Latin America,

and the largest economies in that region will hit the bottom of a cyclical downturn this year.

Though 2015 will be a year of almost no growth for Latin America, the next two years will bring a

mild recovery. Warmer diplomatic relations between the U.S. and Cuba should provide

additional opportunities for Miami's financial industry. The area's financial institutions will also

benefit from increased foreign trade through Latin America as a result of the Trans-Pacific

Partnership. Speedier economic growth throughout the Caribbean, Central America and South

America brightens the prospects for financial services in Miami.

POPULATION GROWTH

Last year, Miami added residents at the slowest rate since 2007, but this rate will accelerate over

the next five years. Faster gains are likely because growth is originating with Hispanic residents,

who make up the nation's fastest-growing demographic group. In 2013 and 2014, Miami added

more Hispanic residents than during any two-year period since 2000-2001, and the area's total

population would have declined in each of the last two years if not for strong in-migration of

Latinos. Across the nation, Latinos constitute 17% of the U.S. population, but they accounted for

49% of U.S. population growth last year. Miami will sustain above-average population growth

because it will remain attractive to the fastest-growing segment of the U.S. population.

MIAMI WORLDCENTER

Construction employment in Miami is about to accelerate. Project managers at the massive

Worldcenter development on the north end of downtown have begun hosting job fairs for local

builders and contractors. The first phase of the development, which should be completed by

© 2015 CBRE, Inc.

Area Analysis

6

2018, is projected to support at least 10,000 jobs from various building trades. Developers have

promised to give preferential employment to inner-city residents who live in the shadow of the

project. The first phase of the $1.7 billion development will include an 1,800-room Marriott

Marquis, a 765,000-square-foot mall anchored by Bloomingdale's and Macy's, and 899

residential units.

CONCLUSION

In the near term, growth in Miami will outpace that of the nation thanks to strength in finance,

retail and construction. Over the forecast horizon, Miami's international character, combined with

its high-skilled, bilingual workforce, will help growth in household income outperform that of the

nation.

© 2015 CBRE, Inc.

Neighborhood Analysis

7


LOCATION

The subject is located on the north side of N.E. 39th Street, just east of North Miami Avenue and

west of N.E. 1st Avenue, in the heart of the Design District. The Design District spans

approximately four (4) city blocks from N.E. 38th Street on the south, to N.E. 42nd Street on the

north; and, North Miami Avenue on the west, to Federal Highway/East Coast Railway on the east.

The subject neighborhood also borders Biscayne Boulevard and Biscayne Bay to the east;

Interstate 195/Julia Tuttle Causeway and the Midtown Miami, Wynwood, Edgewater & Omni

submarkets to the south/southeast; Interstate 95 to the west; and, N.E. 54th Street and the

Morningside submarket to the north/northeast. All of which provide convenient proximity to

major employment centers, ocean front resort & entertainment areas on South Beach and

regional transportation links.

© 2015 CBRE, Inc.


8

BOUNDARIES

The overall neighborhood boundaries generally detailed as follows:

North: N.E. 54th Street South: Interstate I95 & the Julia Tuttle Causeway East: Biscayne Boulevard West: Interstate 95

LAND USE

The subject property is located at the heart of the Design District, which is an eclectic mix of

outdated, low-rise warehouses and gallery spaces that have been reconverted into retail, office,

designer showroom, art galleries, restaurants and cafés. The Design District is in the crossroads

of many prominent Miami neighborhoods, with the artsy Wynwood neighborhood to the south,

Little Haiti and the historic 1920s Buena Vista neighborhood to the north, and the wealthy Upper

East Side neighborhoods to the east. After decades of falling to urban decay, the Design District

has risen to fame as a destination for the arts, design, and fashion.

According to historic accounts and Wikipedia, the area today known as the Design District was

originally known as Buena Vista. Signs and names with the name Buena Vista can still be seen

throughout the area such as the Buena Vista Post Office, and Buena Vista School. By the 1980s

and early-1990s, the Design District had fallen to urban decay, and it wasn't until the late 1990s,

and early 2000s, that art and design stores began opening up in the Design District. Throughout

the 2000s, the Design District continued to grow in popularity, and with heavy public and private

investment in the neighborhood, the streets and sidewalks were redone, and new trees were

planted.

Credited to jump starting the renaissance in the district is Craig Robins of DACRA Realty, who

purchased many run-down buildings in the 18 square block area and persuaded many top

designers, such as Alison Spear, Holly Hunt and Peter Page to relocate. In 2009, the first luxury

retailer opened in the Design District, Christian Louboutin, marking a new era for the Design

District. Later that year, Yohji Yamamoto opened in the Design District.

In 2011, Louis Vuitton announced plans to open a Louis Vuitton store in the neighborhood by

2014 after announcing its closure of its Bal Harbour Shops store (the first Louis Vuitton store to

open outside of New York City), along with opening other brands from the LVMH company in the

Design District, including stores such as Sephora, Marc Jacobs, Givenchy, and Fendi.

The Design District is now a diverse and edgy neighborhood with art, design, fashion, food and

entertainment users noted as follows:

Art occupants include 101, Adamar Fine Arts, Arevalo Gallery, De La Cruz Collection

Contemporary Art Space, Etra Fine Art, Karen Dunn Photography, Locust Projects, Markowicz

Fien Art, Primary Projects, Swamp Space and The Haitian Heritage Museum.

© 2015 CBRE, Inc.


9

Design occupants include Abitare, Adiana Hoyos, Advanced Trading, Inc., AM Profile, Amir Rug

Gallery, Ann Sacks, Armani / Casa, Artisan Antiques, Baltus, Bisazza, Bobby Berk Home,

Bulthaup, Ceramic Matrix, Christian Liaigre, Clima Outdoor Collections, Coulisse, Inc., Deco

One Interiors Group, Decorator’s Plumbing, Design Within Reach, Dileto, Driade, Drimmers

Appliances, E.G. Cody, Granite Transformations, Hausscape, Holly Hunt, Inside Out 2, Internum

& Design, Janus Et Cie, Jonathan Adler, Kartell, Laure De Mazieres, Ligne Roset, Luispons Design

Lab, Luminaire Lab, Luxe Cable + Light, Luxury Living (exclusive retailer for Fendi Casa), Mad

Initialy, Michael Dawkins Home, Mobili Moderni, Molteni & C Dada, Monica James & Co.,

NuHouse Furniture + Design, Inc., Niba Home, Niba Rug Collections, Oceanview Shades &

Drapery, Oggetti, One of a Kind, Opustone, Ornare, Pampaloni Corp., Poliform USA, Poltrona

Frau Group Miami, Spazio Di Casa Fine Italian Furniture & Kitchens, Susane R Lifestle Boutique,

Team 7 Missoni Home, The Rug Company, Thre Adcount, Vitra and Waterworks.

Fashion & Luxury occupants include Agnona, Anya Ponorovskaya, Apt. 606, Baby Cottons,

Cartier, Celine, Christian Louboutin, Dior Homme, En Avance, Hermes, I On The District, Inglot

Miami, Louis Vuitton, Maison Martin Margiela, Marni, OC Orianne Collins, Petite Chic Gifts,

Prada, Scotch & Soda, Sebastian James and Turchin Love & Light Collection.

Food & Entertainment occupants include Buena Vista Bistro, Buena Vista Deli, Crumb On

Parchment, Egg & Dart, Gavanna, Harry’s Pizzeria, Lemoni Café, Mandolin Aegean Bistro, MC

Kitchen, Mercato, Michael’s Genuine Food & Drink, Oak Tavern, Orange Café Art, South Street,

The Cypress Room, The Embassy and The Stage.

Going forward, Craig Robbins, in partnership with L Real Estate, the venture fund for Luis Vuitton

Moet Hennessy, S.A. (LVMH) has designed a four (4) block, 19-acre, open-air, pedestrian

promenade that will include 318,342-SF of new luxury boutique retail & 490,096-SF of existing

showroom/office buildings and be anchored by two department stores totaling 143,280-SF. The

$312 million investment is intended to compete with Bal Harbour Shops and other luxury

shopping malls in South Florida, including Lincoln Road mall and the under construction Brickell

CitiCentre.

Service businesses include ABC Imaging, Always Flowers & Events, Bridge House Events,

Brownes & Co., Chariff Realty Group, Clear Company, Communikatz, Inc., Complot Media

Group, Inc., Emena Spa, Emilio Robba, Inc., Fulano, Ivette Arango Interior Design, Miami

Magazine, Oppenheim Architecture + Design, LLP, Quintessentially, Saruski Design Studio,

SIINC, The BRPR Group and The Perfect Shade & Sound Collection.

The Design District master plan, designed by Duany Plater-Zyberk & Co., would comprise more

than 1.1 million square feet of floor area on the 19-acres spread amongst 51 parcels bounded

by N.E. 43rd Street, N.E. 38th Street, North Miami Avenue and Biscayne Boulevard. The master

plan includes 96 new residential units, a 53-room hotel, 2,571 above-ground and below-ground

parking spaces, 35,000-SF of open space and 42,000-SF of civic space.

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On the following page is a more detailed presentation of existing and proposed building layouts.

As of the date of this appraisal, construction funding of $312 million was secured, the majority of

the sites at the south end of the district are have been cleared & graded, and the first phase of

construction, including a public parking garage and Palm Court on the south side of N.E. 39th

Street, between N.E. 1st Avenue & N.E. 2nd Avenue, has been completed and recently opened to

the public.

Recently opened stores include the following:

Lladro Burberry Cartier Ermenegildo

Giorgio Armani Givenchy Hublot IWC Schaffhausen

Jason of Beverly Hills Loewe Longchamp Rolex Boutique

Max Mara Omega Boutique Piaget Tag Heuer

Tiffany & Co. Tourbillon Valentino Versace

Vhernier Yvel Zadig & Voltaire

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Stores Opening Soon:

Alchemist Harry Winston John Lobb Panerai

Parmigiani Tom Ford Zilli Abaco Wines

Femme Coiffure

In addition, to the Design District, on the south side of Interstate 195, is Midtown Miami, a 56

acre former Florida East Coast rail & container yard that has been master planned into a mixed-

use residential, retail & office community located between N.E. /N.W. 29th Street to N.E./N.W.

36th Street and N. Miami Avenue to N.E. 2nd Avenue. The overall Midtown Miami project is also

within the gentrifying Wynwood/Edgewater submarket. Wynwood is a sub-district of Midtown

and is on the western side and is sometimes called an "arts district" due to its prevalence of artist

studios and is also home to the Miami Fashion District on N.W. 5th Avenue from N.W. 23rd

Street to N.W. 29th Street.

Edgewater, another sub-district of Midtown forms the eastern side of Midtown and is mostly

residential with many high-rise residential towers. The northern side of Midtown is home to Shops

at Midtown, an outdoor shopping area owned & developed by Developers Diversified Realty,

which is home to many national retail chains, including Target, Ross Dress for Less and is the

headquarters for Ocean Drive Magazine.

As noted, Midtown Miami is a 56 acre, multi-phase, master planned, mixed-use development

with the following land uses:

Use Phase I Phase 2 TotalRetail 660,000 400,000 1,060,000Office 60,000 130,000 190,000Residential/Air Rights 1,100,000 2,500,000 3,600,000

908 Units Air RightsParking 3,074 1,034 4,108

MIDTOWN MIAMI DRI

The majority of the retail component is represented by the Shops at Midtown Miami, a 635,000

square foot shopping center situated on three blocks. In addition to a number of specialty shops

and lifestyle retailers, the center offers consumers national anchors including Target, Ross Dress

for Less, Marshalls, West Elm and Lehmann’s. Recent new tenant absorption that replaced

Circuit City and Linen’s N Things, include Homegoods and Sports Authority.

The office component is represented by second, third and fourth floor levels of office above the

retail and lining the parking garage along North Miami Avenue, as well as, a rotunda fronting

Midtown Boulevard and adjoining residential and retail shop space.

The residential component comprises 2 Midtown, 4 Midtown and Midblock, all of which are

mixed-use residential condominium towers with ground floor retail space owned & leased by the

master developer Midtown Equities (MEQS).

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The residential units are situated in the three (3) buildings including studio, one-, two-, and three-

bedroom varieties, ranging from 603-SF to 6,022-SF. The residential rates range from $1,500

to $6,000 or $1.60 to $2.20 per square foot of living area. It should also be noted, in October

2011, Gold Crown Financial acquired 538 of the residential units from HSBC in a post

foreclosure transaction totaling $110 million or an average of $204,461 per unit, and according

to more recent sales activity reports, Gold Crown Financial has almost sold out the remainder,

with over 60 percent of the buyers being from Florida, and not international.

In addition to the foregoing bulk residential unit transaction, Midtown Opportunities, LLC, led by

Alex Vadia, in December 2011, purchased the remaining 22 +/- acres of the 56-acre Midtown

Miami master plan from Midtown Equities, including 16 acres on the west side of the railroad

tracks, plus 6 acres (former Chiquita Banana facility) on the east side of the tracks, including the

Midtown Miami sales center. The group previously announced and intended to develop two (2)

new condominium towers totaling 600 units for the 22-acre site. However, AMLI Residential has

the site under contract and has submitted an application with the City of Miami for 700

apartments in buildings that were tentatively titled Chiquita North and Chiquita South because

the site was previously a banana shipping facility. The vacant, buildable & entitled land at 2900

to 3010 N.E. 2nd Ave. is currently owned by Midtown Opportunities XIVB LLC, while Chicago-

based apartment developer AMLI is listed on the application as having it under contract.

Of concern, is the proposed 184,000-SF Wal-Mart to Midtown Miami, between North Miami

Avenue and N.E. 1st Avenue. The decision was being objected to by Midtown Opportunities, the

owner of the remaining 22-acres and various business owners within Midtown Miami who object

to the scale and impact of the “big box” retailer in light of the existing Target store. However,

despite community objections, Wal-Mart recently achieved municipal approvals and is ready to

proceed with construction.

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The area east of Biscayne Boulevard includes the Omni or newly created Media, Arts and

Entertainment District, which is generally delineated as being bounded by Interstate 395 to the

south, North Miami Avenue to the west, NE 20th Street to the north and Biscayne Bay to the east.

This is the district in which the Performing Arts Center and the Omni are located.

The former 1.07 million square foot Omni Mall which had previously been slated for

redevelopment as a telecommunications facility, but that project failed. The Omni property is a

prime, high-density zoned, 11-acre site that has a 598-room hotel, nearly 700,000 square feet

of retail “shell” space, a 100,000 square foot art school and approximately 3 million square feet

of unused development rights. Reconstruction had already begun to convert much of the shell

space to office loft space. However, more recently, the Genting Group purchased the $161

million note on the troubled Omni Center from Miami real estate investors Jorge Perez, Jimmy

Tate and Sergio Rok. The Genting Group is a Malaysian gaming company that plans to

redevelop the site with a mixed-use hotel/convention center, multi-family residential, retail,

restaurants, entertainment and ultimately a gaming casino in concert with the Herald Plaza site, if

State law ever allows it. The deal, whose purchase price was not disclosed, gives Genting control

over the entire $206 million mortgage on the Omni, which is currently in the midst of foreclosure.

Genting previously purchased the other $45 million note which provides the Genting Group

(d/b/a Resorts World Miami) with the ability to open a casino with restaurants, bars and

entertainment facilities once there is approval from state legislators for a gambling license.

The Omni mortgage acquisition came on the same day Genting unveiled its $3 billion master

plan for Resorts World Miami. The mixed-use project includes plans for four hotels, two

condominium towers, more than 50 restaurants and bars and a luxury retail shopping mall. The

design of the 10 million-square-foot development draws inspiration from the region’s coral reefs.

The centerpiece is a 3.6-acre outdoor lagoon, equivalent to 12 Olympic-size swimming pools

and surrounded by natural sand beaches, that would allow visitors to literally swim from Biscayne

Boulevard to the edge of Biscayne Bay.

The Genting Group also acquired The Herald Plaza for $236,000,000 in 2011. The site was

improved with a 7-story, 604,000-SF office and a manufacturing plant with high-speed printing

presses that has been the headquarters for the Miami Herald since 1963, but has since

demolished. The site features 779 linear feet of bay front with a dedicated bay walk easement,

improved surface parking lots with dedications for the Metromover Station extension, a

Metromover/Bus Station across the street, the Adrienne Arsht Center for the Performing Arts next

door, a telecommunication easement that will likely be abandoned, and the Miami 21 zoning

that permits a maximum 36-story principal building height and an 11.0 FAR plus flexibility and

bonuses to as high as an 18 FAR.

The area west of Biscayne Boulevard is primarily improved with older wood frame houses,

apartment houses, commercial & warehouse buildings, with the exception of the Miami-Dade

County School Board administrative facilities located on NE 2nd Avenue and NE 15th Street. This

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area has been slated to be redeveloped into a media, arts and entertainment district, with the

lead development being the Performing Arts Center. The Adrienne Arsht Center is located on

both sides of Biscayne Boulevard at NE 13th Street and indicated to cost over $470 million. The

Performing Arts Center houses the Concert Association of Florida, the Florida Grand Opera, the

Florida Philharmonic Orchestra, Miami City Ballet and the New World Symphony and contains

165,000 SF Ballet/Opera House with 2,480-seat auditorium and an 116,000 SF

symphony/concert hall with 2,200-seat Theater. The surrounding areas are proposed for the

development of residential condos, production studios and media/entertainment related facilities.

The Central Business District (CBD) of Miami is generally delineated as being bounded by

NW/NE 6th Street to the north, Interstate 95 to the west, the Miami River to the south and Biscayne

Boulevard/Biscayne Bay to the east. Land uses in the CBD district of Miami consist of

institutional, commercial, hotels, and office uses. Developments in the area include the

Wachovia Financial Center, Miami Center and Intercontinental Hotel, Bayfront Park and Bayside

Shopping Center, Bank of America office tower, One Biscayne Tower, Sun Trust International

Center office building, Courtyard Marriott, Hyatt Regency & James L. Knight Center, the Museum

Tower, Metro-Dade Government center and various low to mid rise buildings to the west. Flagler

Street is the primary retail/office street in the CBD area of Miami. There are a variety of retail

stores, department stores and office fronting along Flagler Street in the CBD area. Public and

Institutional uses in the CBD include the Miami-Dade County Courthouse, Government Center

and the museum of arts & library located on Flagler Street/NW 1st Street and NW 1st Avenue.

Miami Dade Community College has a downtown campus located at NE 3rd Street and NE 1st

Avenue. This community college is operated by the Miami-Dade County Public School System

and has a current enrollment of approximately 27,000 students.

ACCESS

Regional Access to the overall subject area is provided via Interstate 95 (I-95), Biscayne

Boulevard, the Dolphin Expressway (State Road No. 836) leading into State Road No. 395, the

Julia Tuttle Causeway (State Road No. 195). Interstate 95 (I-95) serves to connect the subject

area with areas of northern/southern Miami-Dade County, as well as to provide access to the

primary easterly/westerly expressway systems. Biscayne Boulevard is a well-traveled artery

providing northerly/southerly access from S.E. 3rd street at the south to the Broward County line at

the north. The Dolphin Expressway (State Road No. 836) is an easterly/westerly thoroughfare

providing access from areas of western Miami-Dade County, as well as the Palmetto Expressway

(State Road No. 826) to the overall subject area. State Road Numbers 195 and 395 (Julia Tuttle

Causeway) facilitate travel between areas of western Miami-Dade County and Miami Beach to

the west and east, respectively.

Access to the subject property is provided via NE 2nd Avenue, NE 1st Avenue, N. Miami Avenue,

NE 39th Street and NE 40th Street, which are the main cross streets for the Design District. In

addition, mass transit to the subject area is also provided by Metrobus.

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Overall, regional and local access to and throughout the neighborhood is considered to be very

good.

DEMOGRAPHICS

Selected neighborhood demographics in 1-, 3-, and 5-mile radii from the subject are shown in

the following table:

SELECTED NEIGHBORHOOD DEMOGRAPHICS4001 Ne 2 AvenueMiami, FLPopulation

2020 Population 27,395 207,528 571,8132015 Population 25,981 194,041 538,3332010 Population 24,744 180,149 504,8022000 Population 24,336 167,894 476,878Annual Growth 2015 - 2020 1.07% 1.35% 1.21%Annual Growth 2010 - 2015 0.98% 1.50% 1.29%Annual Growth 2000 - 2010 0.17% 0.71% 0.57%

Households2020 Households 11,226 82,147 233,998 2015 Households 10,526 75,871 218,468 2010 Households 9,885 68,892 201,918 2000 Households 8,551 59,243 180,895 Annual Growth 2015 - 2020 1.30% 1.60% 1.38%Annual Growth 2010 - 2015 1.26% 1.95% 1.59%Annual Growth 2000 - 2010 1.46% 1.52% 1.11%

Income2015 Median HH Inc $36,005 $26,301 $31,7372015 Estimated Average Household Income $52,533 $43,760 $54,7572015 Estimated Per Capita Income $21,283 $17,110 $22,222

Age 25+ College Graduates - 2010 4,579 25,948 100,823 Age 25+ Percent College Graduates - 2015 24.2% 19.2% 25.6%

Source: Nielsen/Claritas

1 Mile Radius

3 Mile Radius

5 Mile Radius

GROWTH PATTERNS

The subject neighborhood is undergoing revitalization, new development and re-development, as

reflected by the various properties that have recently been acquired, demolished, renovated

and/or are in the planning stages of development within the surrounding Wynwood and the

Design District submarkets.

CONCLUSION

The subject location within the Design District is well positioned and benefitting from all of the

existing and proposed developments, including the close proximity of Midtown Miami, Biscayne

Boulevard, Biscayne Bay, the downtown Miami CBD, Interstate 95 and Interstate 195. Because of

this strategic location to the north of downtown, to the west of Miami Beach, and wedged

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between Interstate 95 and Interstate 195, there has been strong developer interest and investor

speculation in redeveloping the Design District from an edgy art & entertainment district to an

upscale, open-air shopping district. As such, it is our opinion that the subject submarket will

continue to enjoy growth through renovations & redevelopment over the near and longer term.

© 2015 CBRE, Inc.

Site Analysis

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SCENARIO ONE – OPTION DRAWING 2

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Site Analysis

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SCENARIO TWO – OPTION DRAWING 3.1

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Site Analysis

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Site Analysis

The following chart summarizes the salient characteristics of the subject site.

SITE SUMMARY

Physical Description1.66 Acres 72,255 Sq. Ft.

Land Area - Proposed Option 2 for Sell-Off 0.93 Acres 40,655 Sq. Ft. Land Area - Proposed Option 3.1 for Sell-Off 0.85 Acres 37,102 Sq. Ft.

NE 2nd Avenue 168 FeetSecondary Road Frontage - Option 3.1 NE 39th Street 60 FeetAdditional Road Frontage - Option 2 FEC Right-of-Way 133 FeetAdditional Road Frontage - Option 3.1 Shared Access Easement 223 FeetShapeTopographyZoning District - ExistingSuccessional Zone - Proposed RezoningFlood Map Panel No. & Date 120650 0304 L 11-Sep-09Flood Zone Zone XAdjacent Land Uses

Comparative AnalysisVisibilityFunctional UtilityTraffic VolumeAdequacy of UtilitiesLandscapingDrainage

Utilities AdequacyWater YesSewer YesNatural Gas YesElectricity YesTelephone Yes

Mass Transit Yes

Other Yes No UnknownDetrimental Easements XEncroachments XDeed Restrictions XReciprocal Parking Rights X

Source: Various sources compiled by CBRE

Gross Site Area - Miami-Dade County Owned

Primary Road Frontage - Option 2 & 3.1

Assumed adequateUrban streetscape

Provider

RatingExcellent pedestrian visibility along NE 2nd Ave.Assumed adequateGood

IrregularLevel and improved to road gradeCI, Civic Institution

Luxury boutique retail, retail showroom, restaurants, office & service business uses

T6-8 0, Urban Core Transect Zone

City of Miami

Assumed adequate

Metrobus, Metrorail, Metromover & STS

City of MiamiContract serviceFPLAT&T land lines

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Site Analysis

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INGRESS/EGRESS

Ingress and egress is available to the site via asphalt paved public rights-of-way and pedestrian

sidewalks fronting NE 2nd Avenue and NE 39th Street.

FEC RIGHT-OF-WAY AND SHARED DRIVEWAY EASEMENT

The subject site backs up to the FEC right-of-way and the proposed site dimensions and option

drawings reflect an 11,564-SF +/- Parcel B to be outside of the subject site area and buffering

the site from the FEC right-of-way. In addition, this Parcel B is deployed for off-street parking in

support of the existing DASH school.

In addition, both Option 2 & 3.1 depicts a 32 foot wide shared access easement leading to the

northeast corner of the subject site necessary for direct ingress/egress under either scenario being

considered for this analysis.

ENVIRONMENTAL ISSUES

CBRE, Inc. is not qualified to detect the existence of potentially hazardous material or

underground storage tanks which may be present on or near the site. The existence of

hazardous materials or underground storage tanks may affect the value of the property. For this

appraisal, CBRE, Inc. has specifically assumed that the property is not affected by any hazardous

materials that may be present on or near the property.

ADJACENT PROPERTIES

The adjacent land uses are summarized as follows:

North: 2-story retail/office building South: Retail showroom East: REF right-of-way and N. Federal Highway West: NE 2nd Avenue, luxury boutique retail stores and showroom/office properties within

the Design District

The subject site is wrapped by existing, recently completed and under construction, multi-level,

luxury boutique retail properties.

CONCLUSION

The site location along the east side of N.E. 2nd Avenue is within the core Design District

submarket and master plan, which provides excellent support for luxury boutique retail use on the

subject site.

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Site Analysis

21

FLOOD PLAIN MAP

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Zoning

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Zoning

The following chart summarizes the subject’s existing zoning requirements.

MIAMI 21 ZONING - EXISTINGZone CI, Civic InstitutionIntended Use The civic category is intended to encompass land use functions predominantly of community-

oriented purposes of objectives including those of not-for-profit organizations dedicated to arts and culture, education, recreation, religion, government and the like.

Definitions A zone with uses primarily dedicated to Functioning for community purposes such as, cultural, educational, environmental, governmental, public transit, public parking and religious facilities.

Transect Zone Description The civic zone consists of public use space and facilities that may contrast in use to their surroundings while reflecting adjacent setbacks and landscape.

Permitted Uses; Allowed by Right See "Allowed by Exception" - All uses require a public hearing granted by PZAB (Planning,

Zoning & Appeals Board)

Allowed by Warrant See "Allowed by Exception" Allowed by Exception Dormitory, office, food service establishment, general commercial, open air retail, place of

assembly, recreational establishment, community facility, recreational facility, religious facility, community support facility, infrastructure & utilities, major facilities, marina, public parking, rescue mission, transit facilities, childcare, college/university, elementary school, learning center, middle & high school, pre-school, research facility and special training & vocational schools.

Category Zoning RequirementResidential Density - Units Per Acre Density and all intensity, parking & loading regulations to match that of the most restrictive

abutting zone.

Commercial Density Building area allowed for commercial use on each lot shall be less than 25% building floor area for total.

Established Setback - Design District Zero (0') feetOff-Street Parking; Office 3 spaces per every 1,000-SF

1 bike space for every 20 vehicle spacesParking may be provided offsite in CI, D, T5 or T6 within 500 feet through a parking management plan/zone.

Commercial 3 spaces per every 1,000-SF1 bike space for every 20 vehicle spacesParking may be reduced according to the shared parking standard.

Civic 1 space for every 5 seats of assembly uses1 space for every 1,000-SF of exhibition or recreation space1 space for every staff member for recreational uses1 space for every 500-SF of building area for recreational uses1 bike space for every 20 vehicle spaces

Educational 2 spaces for 1,000-SF of educational space1 bike space for every 20 vehicle spaces

Parking Reductions See Article 4, Table 5 in Miami 21 based on Transit Corridor, bike rack, Metromover Station, off-site provision and/or shared parking provisions.

Source: Miami 21, As Adopted - October 2009, Revised May 2010, and Amended May 2015

Followed by the proposed successional rezoning chart.

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Zoning

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MIAMI 21 ZONING - PROPOSED SUCCESSIONAL REZONINGZone T6-8 0, Urban Core Transect ZoneDescription The urban core zone consists of the highest density and greatest variety of uses, including civic buildings

of regional importance. A network of small blocks has thoroughfares with wide sidewalks, with steady tree planting and buildings set close to the frontage with frequent doors & windows.

Uses Permitted; Allowed by Right Single family residential, community residence, two family residence, multi-family housing, dormitory,

home office, live-work, bed & breakfast, inn, hotel, office, entertainment establishment, food service,alcohol beverage establishment, general commercial, place of assembly, recreational establishment,learning center, pre-school and research facility.

Allowed by Warrant Auto-related uses, marine related uses, open air retail, community facility, community support facility,infrastructure & utilities, marina, public parking, transit facilities, childcare, college/university,elementary school, middle/high school and special training/vocational.

Category Zoning RequirementLot Area 5,000-SF minimum / 40,000 maximumLot Width 50 feet minimumLot Coverage 80% maximum (see code for specific Transect Zone regulation)Floor Lot Ratio 5 plus 25% with Public BenefitsFrontage at Front Setback 70% minimumOpen Space Requirement 10% lot area minimumDensity - Residential 150 dwelling units per acreDensity - Commercial 0 FeetPublic Benefit Program T6-12: twelve (12) Story maximum, bonus to twenty (20) Stories, FLR 8, bonus of

thirty percent (30%)Setbacks; Established Setback - Design District Zero (0') feet Principal Front Setback 10 feet minimum Secondary Front Setback 10 feet minimum Side Setback (Residential) -0- feet minimum Rear Setback -0- feet minimumPrivate Frontages; Common Lawn Prohibited

Porch & Fence Prohibited Terrace or LC Prohibited Forecourt Permitted Stoop Permitted Shop front Permitted in T6-8 L, T6-8 O Gallery Permitted Arcade PermittedBuilding Height (Stories); Principal Building 2 story minimum / 8 story maximum Benefit Height (abutting T6, T5 & T4 only) 4 maximum (refer to Article 5 for specific Transect Zone regulation)Off-Street Parking; Residential 1.5 spaces / dwelling unit + 1 space for every 10 units for visitor parking Lodging 1 space / every 2 lodging units + 1 space for every 15 units for visitor parking Office 1 space / 800-SF of office use Commercial 3 spaces / every 1,000-SF of commercial uses Civic 1 space / every 5 seats Civil Support 1 space / every 1,000-SF of civil support use Educational 2 space / every 1,000-SF Parking Reductions See Article 4, Table 5 in Miami 21 based on Transit Corridor, bike rack, Metromover Station, off-site

provision and/or shared parking provisions.

Source: Miami 21, As Adopted - October 2009, Revised May 2010, and Amended May 2015

ANALYSIS AND CONCLUSION

The existing improvements represent a legally-conforming use. However, the intended sell-off

scenarios will require portions of the subject site to be rezoned with support and approval City of

Miami Planning & Zoning Department.

According to Article 7.1.2.8 Amendment to Miami 21 Code, the subject property can be rezoned

based on the following successional zoning criteria:

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Zoning

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The City’s growth and evolution over time will inevitably require changes to the

boundaries of certain Transect Zones. These changes shall occur successional, in which

the zoning change may be made only to a lesser Transect Zone; within the same Transect

Zone to a greater or lesser intensity; or to the next higher Transect Zone, or through a

Special Area Plan. All changes shall maintain the goals of this Code to preserve

Neighborhoods and to provide transitions in Intensity, Density, Building Height and Scale.

When a CI zoned property ceases to be used for Civic functions, the successional

rezoning is determined by identifying the lowest Intensity Abutting Transect Zone, and

rezoning to that Zone’s next higher Intensity Zone.

For a property of nine (9) acres or more, a successional change shall require a Special

Area Plan as described in Article 3.

For all successional zoning changes of less than nine (9) acres, refer to the table below.

Based on the forgoing, it is our understanding that the lowest “Intensity Abutting Transect Zone”

to the subject site is T5 O, and rezoning to that Zone’s next higher Intensity Zone would then be

T6-8 O.

Additional information may be obtained from the City of Miami Planning & Zoning Departments.

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Tax and Assessment Data

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Tax and Assessment Data

The following summarizes the local assessor’s estimate of the subject’s market value, assessed

value, and taxes, and does not include any furniture, fixtures or equipment. The CBRE estimated

tax obligation is also shown.

AD VALOREM TAX INFORMATION

Assessor's Market Value 2014 2015Option 2

Pro FormaOption 3.1 Pro Forma

01-3219-014-0011 $2,786,566 $4,052,276 $40,000,000 $41,000,000

Subtotal $2,786,566 $4,052,276 $40,000,000 $41,000,000

Assessed Value @ 100% 100% 65% 65%$2,786,566 $4,052,276 $26,000,000 $26,650,000

General Tax Rate (per $100 A.V.) 2.267860 2.267860 2.267860 2.267860

Total Taxes Exempt Exempt $589,644 $604,385Less: 4% Early Pay Discount --- --- $566,058 $580,209

Source: Assessor's Office

It should also be noted that the subject property is exempt from real estate property taxes based

on municipal government ownership. However, if the subject property were sold-off to a third

party developer the exemption would be rescinded. In addition, under a ground lease scenario,

the land component would remain exempt while the third party leasehold improvements would

be taxable, unless a non-profit or municipal government entity developed and operated the

leasehold improvements.

If the exemption is rescinded through sell-off, the local Assessor’s methodology for valuation

would be sales comparison and-or the recorded sale price. The next re-assessment of the subject

is scheduled for January 1, 2016, which has yet to be posted.

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Market Analysis

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Market Analysis - Retail

The market analysis forms a basis for assessing market area boundaries, supply and demand

factors, and indications of financial feasibility. Primary data sources utilized for this analysis

include REIS, Inc., CoStar Group, Inc., EA Economic Advisor reports and Marketview reports.

The subject is in the City of Miami submarket and the potential redevelopment scenarios will most

likely be luxury boutique retail. As such, a primary trade area of approximately 1-to-5 miles.

According to the Urban Land Institute (ULI) (in Dollars & Cents of Shopping Centers), the

following retail property definitions may be applicable towards the subject:

A shopping center is defined as a group of commercial establishments planned, developed, owned, and managed as a unit related in location, size, and type of shops to the trade area it serves. It provides on-site parking relating to the types and sizes of its stores.

Types of specific shopping centers are further defined below:

A convenience center (strip center) provides for the sale of personal services and convenience goods similar to those of a neighborhood center. It contains a minimum of three stores, with a total gross leasable area of up to 30,000 square feet. Instead of being anchored by a supermarket, a convenience center usually is anchored by some other type of personal/convenience service such as a minimarket. A neighborhood center provides for the sale of convenience goods (foods, drugs and sundries) and personal services (laundry and dry cleaning, barbering, shoe repair, etc.) for the day-to-day living needs of the immediate neighborhood. It is built around a supermarket as the principal tenant and typically contains a gross leasable area of about 60,000 square feet. In practice, it may range in size from 30,000 to 100,000 square feet. In addition to the convenience goods and personal services offered by the neighborhood center, a community center provides a wider range of soft lines (wearing apparel for men, women and children) and hard lines (hardware and appliances). The community center makes merchandise available in a greater variety of sizes, styles, colors and prices. Many centers are built around a junior department store, variety store, super drugstore or discount department store as the major tenant, in addition to a supermarket. Although a community center does not have a full-line department store, it may have a strong specialty store or stores. Its typical size is about 150,000 square feet of gross leasable area, but in practice, it may range from 100,000 to 500,000 or more square feet. Centers that fit the general profile of a community center but contain more than 250,000 square feet are classified as super community centers. In extreme cases, these centers contain more than 1,000,000 square feet. As a result, the community center is the most difficult to estimate for size and pulling power. A power center is a type of super community center. It contains at least four category-specific, off-price anchors of 20,000 or more square feet. These anchors typically emphasize hard goods such as consumer electronics, sporting goods, office supplies, home furnishings, home improvement goods, bulk foods, drugs, health and beauty aids,

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Market Analysis

27

toys, and personal computer hardware/software. They tend to be narrowly focused but deeply merchandised “category killers” together with the more broadly merchandised, price-oriented warehouse club and discount department stores. Anchors in power centers typically occupy 85% or more of the total GLA. A regional center provides general merchandise, apparel, furniture, and home furnishings in depth and variety, as well as a range of services and recreational facilities. It is built around one or two full-line department stores of generally not less than 50,000 square feet. Its typical size is about 500,000 square feet of gross leasable area; in practice, it may range from 250,000 to more than 900,000 square feet. The regional center provides services typical of a business district yet not as extensive as those of the super-regional center. A super-regional center offers extensive variety in general merchandise, apparel, furniture and home furnishings, as well as a variety of services and recreational facilities. It is built around three or more full-line department stores generally of not less than 75,000 square feet each. The typical size of a super-regional center is about 1,000,000 square feet of gross leasable area. In practice, the size ranges from about 500,000 to more than 1,500,000 square feet.

DEMOGRAPHIC ANALYSIS

Demand for retail properties is a direct function of demographic characteristics analyzed on the

following pages.

Housing, Population and Household Formation

The following table illustrates the population and household changes for the subject

neighborhood with primary focus on the 1-to-10 mile radius due to the transportation

connectivity and regional destination uses surrounding the subject property.

© 2015 CBRE, Inc.

Market Analysis

28

POPULATION AND HOUSEHOLD PROJECTIONS

Population

2020 Population 27,395 207,528 571,8132015 Population 25,981 194,041 538,3332010 Population 24,744 180,149 504,8022000 Population 24,336 167,894 476,878Annual Growth 2015 - 2020 1.07% 1.35% 1.21%Annual Growth 2010 - 2015 0.98% 1.50% 1.29%Annual Growth 2000 - 2010 0.17% 0.71% 0.57%

Households2020 Households 11,226 82,147 233,9982015 Households 10,526 75,871 218,4682010 Households 9,885 68,892 201,9182000 Households 8,551 59,243 180,895Annual Growth 2015 - 2020 1.30% 1.60% 1.38%Annual Growth 2010 - 2015 1.26% 1.95% 1.59%Annual Growth 2000 - 2010 1.46% 1.52% 1.11%


1 Mile Radius

3 Mile Radius

5 Mile Radius

As shown, the subject’s neighborhood is experiencing above average positive increases in both

population and households.

Income Distributions

Household income available for expenditure on consumer items is a primary factor in

determining the retail supply and demand levels in a given market area. In the case of this study,

a projection of household income identifies (in gross terms) the market from which the subject

submarket draws. The following table illustrates estimated household income distribution for the

subject neighborhood.

HOUSEHOLD INCOME DISTRIBUTION

Households by Income Distribution - 2015

Less than $15K 22.08% 31.32% 25.83%$15K - $25K 14.39% 16.84% 15.90%$25K - $35K 12.47% 12.25% 11.78%$35K - $50K 13.25% 11.78% 13.26%$50K - $75K 17.85% 12.78% 13.00%$75K - $100K 8.73% 6.42% 6.92%$100K - $150K 7.11% 5.18% 6.69%$150K - $250K 2.35% 1.85% 3.72%$250K - $500K 1.22% 0.99% 1.91%$500K or more 0.54% 0.59% 0.98%


1 Mile Radius

3 Mile Radius

5 Mile Radius

© 2015 CBRE, Inc.

Market Analysis

29

The following table illustrates the median and average household income levels for the subject

neighborhood.

HOUSEHOLD INCOME LEVELS

Income

2015 Median HH Inc $36,005 $26,301 $31,7372015 Estimated Average Household Income $52,533 $43,760 $54,7572015 Estimated Per Capita Income $21,283 $17,110 $22,222


1 Mile Radius

3 Mile Radius

5 Mile Radius

An analysis of the income data indicates that the submarket is generally comprised of middle-to-

upper middle income economic cohort groups. What the above household income levels do not

show is the substantial in flow of disposal income from local, national and international tourists.

Retail Sales Volumes

The following table illustrates retail sales for the subject’s market area at given radii intervals from

the subject.

RETAIL EXPENDITURES ($000's)SUBJECT'S SUBMARKET

1 Mile Radius 3 Mile Radius 5 Mile RadiusProduct Sample 2015 2020 %/Yr 2015 2020 %/Yr 2015 2020 %/YrAll Retail Stores 258,880 283,562 1.8% 1,714,466 1,890,628 2.0% 5,467,582 5,949,792 1.7%Grocery Stores 49,081 54,216 2.0% 340,637 377,297 2.1% 1,036,675 1,135,702 1.8%Eating Places 24,574 26,814 1.8% 153,752 169,374 2.0% 499,597 540,586 1.6%Drinking Places 630 683 1.6% 3,957 4,329 1.8% 13,249 14,249 1.5%Health and Personal Care Stores 21,362 23,783 2.2% 150,236 167,239 2.2% 476,694 524,556 1.9%Building Material & Garden Equipment & Supplies 4,781 5,466 2.7% 31,650 36,486 2.9% 112,070 127,305 2.6%Hardware Stores 639 735 2.8% 4,215 4,888 3.0% 14,566 16,637 2.7%Lawn & Garden Equipment & Supplies Dealers 839 966 2.8% 5,531 6,400 3.0% 18,928 21,684 2.8%Furniture Stores 4,008 4,475 2.2% 26,094 29,355 2.4% 86,420 95,817 2.1%Other Home Furnishing Stores 2,658 3,003 2.5% 17,242 19,601 2.6% 59,710 66,887 2.3%Household Appliance Stores 836 1,045 4.6% 5,511 6,961 4.8% 18,293 22,727 4.4%Radio/TV/Other Electronics Stores 4,059 5,657 6.9% 25,977 36,575 7.1% 83,378 115,784 6.8%Department Stores (Excluding Leased) 22,261 25,436 2.7% 149,927 172,045 2.8% 471,550 535,635 2.6%Clothing and Clothing Accessory Stores 18,783 20,943 2.2% 125,077 140,187 2.3% 389,862 433,480 2.1%Shoe Stores 3,038 3,309 1.7% 21,030 23,123 1.9% 61,822 67,493 1.8%General Merchandise Stores 44,153 50,346 2.7% 299,085 342,066 2.7% 935,002 1,058,271 2.5%Warehouse Clubs and Superstores 22,271 25,412 2.7% 151,574 173,239 2.7% 471,373 533,039 2.5%Full Service Restaurants 7,606 8,351 1.9% 45,915 50,750 2.0% 156,973 169,922 1.6%Fast Food Restaurants 7,956 8,557 1.5% 50,950 55,498 1.7% 157,731 169,114 1.4%Jewelry Stores 3,484 4,068 3.2% 21,369 25,043 3.2% 77,873 89,662 2.9%Book Stores 2,057 2,524 4.2% 12,818 15,451 3.8% 45,326 54,386 3.7%Gift, Novelty, and Souvenir Shops 817 960 3.3% 5,154 6,058 3.3% 17,451 20,157 2.9%Florists 1,818 2,146 3.4% 11,859 14,052 3.5% 42,287 49,431 3.2%Hobby, Toy, and Game Shops 1,672 1,922 2.8% 10,792 12,557 3.1% 34,627 39,553 2.7%Sporting Goods Stores 2,111 2,518 3.6% 13,643 16,223 3.5% 44,525 52,529 3.4%Camera/Photographic Supply Stores 344 467 6.3% 2,231 3,042 6.4% 7,079 9,577 6.2%Luggage and Leather Goods Stores 306 399 5.4% 1,864 2,431 5.5% 6,640 8,510 5.1%Sew/Needlework/Piece Goods Stores 350 388 2.0% 2,273 2,514 2.0% 7,787 8,492 1.7%Convenience Stores 2,446 2,809 2.8% 16,283 18,623 2.7% 49,125 55,417 2.4%Home Centers 2,306 2,640 2.7% 15,234 17,596 2.9% 53,588 60,932 2.6%Nursery and Garden Centers 766 881 2.8% 5,035 5,817 2.9% 17,168 19,633 2.7%Computer and Software Stores 1,700 2,309 6.3% 10,813 14,807 6.5% 35,273 47,634 6.2%Clothing Accessory Stores 292 326 2.2% 1,901 2,123 2.2% 6,079 6,753 2.1%Auto Dealers 44,373 42,080 -1.1% 273,685 263,790 -0.7% 926,363 877,444 -1.1%Automotive Part, Accessories & Tire Stores 2,249 2,173 -0.7% 14,746 14,442 -0.4% 47,478 45,987 -0.6%Gasoline Stations with Convenience Stores 22,333 23,855 1.3% 145,213 156,071 1.5% 445,050 471,878 1.2%Gasoline Stations without Convenience Stores 6,372 6,529 0.5% 41,008 42,509 0.7% 128,128 131,230 0.5%Electronic Shopping and Mail Order 11,471 13,711 3.6% 75,971 90,743 3.6% 247,604 292,571 3.4%Total Accommodation and Food Services 34,217 37,304 1.7% 213,060 234,254 1.9% 708,971 764,981 1.5%


© 2015 CBRE, Inc.

Market Analysis

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The annual rate of change for All Retail Stores is indicated as 1.8%, 2.0% and 1.7% on a 1-, 3-,

and 5-mile radii, respectively.

Outlook

Based on this analysis, the immediate area surrounding the subject is projected to experience

moderate, positive growth relative to households, population, income levels and retail

expenditures into the near future. Given the area demographics, the submarket gentrification

and tourist destination location, it appears that demand for both comparable surrounding area

retail properties and the subject will continue to be very favorable.

RETAIL MARKET OVERVIEW

The following discussion illustrates some general observations in the surrounding retail market.

Miami Retail Market View

According to the most recent Miami retail report published by CBRE Research, developers are

expected to deliver 1.2 million square feet of retail in 2015. The Miami retail market is also

highlighted by the following:

Valentino, Chopard and Cole Haan announced signed leases for ground floor retail at

Brickell City Centre, which will command the highest rents, with mid-level retailers

reserved for the higher floors.

Miami was the fastest-growing “food & drink city” in America followed by Charlotte, Las

Vegas, Orlando and Houston according to a study by Eventbrite due to 117% growth in

wine, beer, food and liquor events.

Miami Worldcenter held a job fair for construction workers for the 765,000 sq. ft. mall

anchored by Bloomingdale’s and Macy’s. Priority in hiring was given to residents living

within Miami’s Overtown, Park West and Omni neighborhoods.

© 2015 CBRE, Inc.

Market Analysis

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Development

To meet consumer demand, developers are rising to the challenge with more than 5 million sq.

ft. of planned projects in the pipeline - not only in the urban areas such as the Design District,

Midtown, Wynwood and Brickell but also in suburban areas. Planned projects include American

Dream Miami in North Miami-Dade County with 2.5 million sq. ft. of retail, Miami Innovation

District in downtown Miami with 250,000 sq. ft. of retail, and the Mediterranean Village in Coral

Gables with 300,000 sq. ft. of retail.

Current projects under construction total 1.9 million sq. ft. with 1.2 million sq. ft. delivering in

2015 and 748,000 sq. ft. delivering in 2016.

© 2015 CBRE, Inc.

Market Analysis

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The Miami retail market sector is performing significantly above the national average, and the

availability rate is among the lowest in the country.

Global retailers consider Miami the second-most desirable location after New York, based on an

increasing number of international visitors, up by 21% in 2014 according to statistics released by

the U. S. Chamber of Commerce.

Several projects broke ground in Q2 2015 including SoLe Mia Mainstreet, a 183-acre mixed- use

project which will include 500,000 sq. ft. of retail, dining and entertainment located at 15045

Biscayne Boulevard. The master plan includes 4,400 luxury residences, 160,000 sq. ft. of office

space, a 150-key hotel, cinema, gourmet grocery and an auto dealership.

Another project to break ground in Q2 2015 was MiamiCentral Station, which will serve as All

Aboard Florida’s southern-most transportation hub. The project is expected to deliver 178,000

sq. ft. of retail and a 32,817 sq. ft. food hall during 2016. District 36, a mixed-use project

located at 3635 NE 1st Avenue between the Design District and Midtown, will deliver 63,000 sq.

ft. of retail, 195 apartment units and restaurant space by Q4 2016.

River Landing, a $300 million project that is in the pre-development stages, is attracting national

and regional tenants by offering 426,000 sq. ft. of retail and restaurant space in addition to 475

luxury apartments, 2,200 parking spaces, green space for enjoyment and a 1,500 linear-foot

riverfront park. Located near Miami's Civic Center area, it is one

Leasing Activity

Demand for retail space continued to increase as grocery chains such as Whole Foods, Publix

and Aldi announced plans to expand in Miami- Dade County. Vacancy remained steady at 3.6%

with net absorption at 62,422 sq. ft. during 2015. The average asking rate was $42.98 with the

highest rates in Miami Beach, where retail space is averaging $192.59 per sq. ft. Retailers are

willing to pay more because of historical performance in Miami. Lincoln Road is signing lease

transactions between $350 and $400 for the smaller, boutique spaces, which is ten times more

than the average asking rates in the rest of Miami-Dade. Lincoln Road was ranked #6 in the

country for the highest retail rents after Fifth Avenue in New York City, Rodeo Drive in Los

Angeles, Union Square in San Francisco, Michigan Avenue in Chicago and Kalakaua Avenue in

Honolulu.

© 2015 CBRE, Inc.

Market Analysis

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Sales Activity

Interest rates remain low, motivating investors to seek investment opportunities in Miami-Dade

and driving prices higher, especially in submarkets like Miami Beach and Brickell. Many foreign

investors are seeking to protect their capital from economic instability in their countries by

investing in Miami.

Economic Influence

According to a recent U.S. Department of Commerce report, Miami’s international visitors

increased by 7.1% in Q1 2015- continuing to be the second most visited city in the U.S. by

international tourists. This attests to a strong tourism industry, augmented by a rapidly growing

retail sector and resilient housing market. The opening of over 50 luxury flagship stores in the

Miami Design District earlier this year indicates

a cohort of stakeholders that recognize the

area’s potential and value, thus helping

substantiate Miami’s position in the global

economy. Job growth is 3.7% higher year over

year and ahead of the national average, which

increased by 2.2% according to the Bureau of

Labor Statistics.

Outlook

Miami-Dade County continues to prove resilient

while other areas in the country are threatened

by uneven growth. Retail activity is concentrated

© 2015 CBRE, Inc.

Market Analysis

34

not only along the waterfront and urban core, but is

expected to grow in both western and southern

areas of Miami-Dade with millions of square feet

under construction or close to breaking ground.

Miami’s expanding retail sector will continue to

solidify its position in South Florida and the greater

Southeast Region. An increasing number of

international visitors, paired with improved

consumer perception and purchasing power, will

ensure a strong future for Miami’s retail market.

COMPETITIVE PROPERTIES

Comparable properties were surveyed in order to identify the current occupancy trends within the

competitive market. The comparable data is summarized in the following table:

COMPARABLE RETAIL RENTALS - DESIGN DISTRICT

Comp. No. Name Location Occupancy

1 Billionaire Italian Couture 4000 N.E. 2nd Avenue,Miami, FL

100%

2 Palm Court 101-136 N.E. 39th Street,Miami, FL

100%

3 Oak Plaza 139 NE 39th Street,Miami, FL

100%

4 JBL 100 NE 40th Street,Miami, FL

93%

5 Atlas Plaza & Magnolia Court 114-130 NE 40th Street 135 N.E. 39th Street,Miami, FL

70%

6 101 NE 40th Street 101 NE 40th Street,Miami, FL

100%

7 111 N.E. 40th Street 111 N.E. 40th Street,MIami, FL

100%

8 2-54 N.E. 40th Street 2-54 N.E. 40th Street,Miami, FL

84%

Compiled by CBRE

© 2015 CBRE, Inc.

Market Analysis

35

The majority of comparable properties surveyed reported occupancy rates of 93% or better, and

all are currently in good-to-excellent condition. Comparable 5 has spiked the asking rental rate

upwards at tenant rollovers and Comparable is a pre-construction, redevelopment lease-up

opportunity.

ABSORPTION

In order to gauge absorption and submarket occupancy, we have presented several data sources

that track retail occupancy & absorption in the Miami market, including the following macro

overview, as published by the REIS report for the following 3-year interval, as follows:

Year

Projected Retail

Absorption for

Miami/Miami Beach Submarket

Projected Retail

Absorption for Miami-

Dade County Market

2015 +110,000 +447,000

2016 +19,000 +476,000

2017 +126,000 +589,000

Source: REIS, Inc.

As presented, the retail component is experiencing and projecting a positive absorption indication

within the subject submarket while the majority of existing and/or new retail development deliveries

would be classified as smaller scale and/or mixed-use components given the severely limited inventory

of buildable sites available for new retail developments within the submarket.

As additional support, we have analyzed the micro absorption trends from the immediate submarket

area using CoStar Group, Inc. subscription services. We have produced a retail absorption report for

the preceding 3-year snapshot of the Design District, Midtown Miami, Wynwood Arts and Biscayne

Boulevard submarket, presented as follows:

And, graphically presented the retail absorption report by year, as follows:

© 2015 CBRE, Inc.

Market Analysis

36

Based on the foregoing presentation, the subject submarket is enjoying hyper growth in both rental

rates and absorption velocity.

Occupancy

Based on the foregoing analysis, CBRE, Inc.’s conclusion of stabilized occupancy for the subject is

illustrated in the following table. This estimate considers both the physical and economic factors

of the market.

OCCUPANCY CONCLUSIONSMiami-Dade County - All Retail 124,958,606 SF 96.4%Design District, Midtown Miami & Wynwood Submarket 4,202,550 SF 95.8%Rent Comparables - Overall Occupancy 209,013 SF 94.9%Rent Comparables - Stable Range 209,013 SF 93% - 100%

Compiled by CBRE

CONCLUSION

The subject property is located in a gentrifying, urban submarket that is exhibiting both pent up

and speculative demand, as well as, upward spiking rental rates as luxury brands and merchant

developers enter the next growth cycle in the wake of the “great recession.”

The subject in particular is strategically positioned to benefit from the emerging Design District as

recently delivered and under construction phases continue to be delivered to market by DACRA

Realty and L Real Estate, the venture fund for Louis Vuitton Moet Hennessy S.A. (LVMH). Hence,

the subject has a very favorable submarket position as of the effective date of this analysis and

looking forward.

© 2015 CBRE, Inc.


37


In appraisal practice, the concept of highest and best use represents the premise upon which

value is based. The four criteria the highest and best use must meet are:

legally permissible; physically possible; financially feasible; and maximally productive.

The highest and best use analysis of the subject is discussed below.

AS VACANT

Legally Permissible & Physically Possible

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

limitations of the existing CI, Civic Institutional district zoning, and the legally permissible

successional rezoning to T6-8 O, the obvious legal strategy would be for the successional

rezoning to allow for high density, mixed-use development options.

In addition, the subject is adequately served by utilities, and has an adequate shape and size,

sufficient access, etc., to be a developable site. There are no known physical reasons why the

subject site would not support any legally probable development (i.e. it appears adequate for

development).

We have also reviewed and considered the following FAR case studies based on recent & actual

approved site plan developments within the immediate submarket area, presented as follows:

No. Location Zoning Site SF Proposed Use

Approved Sellable/

Rentable SFApproved

FAR1 3701 Biscayne Blvd., Miami, FL Rezoned to T6-12 O 35,186 2-story retail with

structured parking40,000 1.14

2 3601 N. Miami Ave., Miami, FL T6-12 O 41,256 20-story mixed-use retail, office & hotel

with structured parking

423,011 10.25

3 3635 NE 1st Ave., Miami, FL T6-12 O 56,497 19-story mixed-use residential rental &

retail with structured

263,057 4.66

4 111 NE 40th Street, Miami, FL T5 O 5,000 2-story retail 6,466 1.29

5 3711 NE 2nd Ave., Miami, FL T6-12 O 11,326 2-story retail & banquet hall

26,398 2.33

Complied by CBRE, inc.

FAR CASE STUDIES

Based on the foregoing FAR case study presentation, the subject property could very reasonably

be developed with at least a 1.0 to 2.0 FAR, subject to successional rezoning and the municipal

site plan approval process. It should also be noted, that Case Studies 2 & 3 both achieved

© 2015 CBRE, Inc.


38

higher densities through bonus density options and TDR (transferable development right)

purchases.

Financially Feasible & Maximally Productive Use

The determination of financial feasibility is dependent primarily on the relationship of supply and

demand for the legally probable land uses versus the cost to create the uses. As presented in the

Neighborhood Analysis and Market Analysis sections of this report, the luxury boutique retail is

the primary feasible use that is driving the high velocity, emerging Design District redevelopment

cycle.

There are also other mixed-use redevelopment opportunities occurring including new hotel and

multi-family residential towers in the planning and under construction stages within the Design

District and Midtown Miami submarket. However, the subject site frontage along NE 2nd Avenue

warrants a retail land use due to the pedestrian traffic & element of the Design District, while the

FEC right-of-way may not be ideal for hotel or multi-family, but better suited for office and-or a

civic use, such as the proposed DASH redevelopment tower. In addition, office is probably the

least feasible within this submarket due to the high land value attributed to luxury retail demand

at present.

As a test for financial feasibility of a proposed retail use along the NE 2nd Avenue frontage, we

have performed a Land Residual Analysis in order to value the subject site scenario options via

the Income Approach.

In order to properly develop the Land Residual Analysis, we have surveyed luxury boutique retail

from within the Design District submarket, and presented in the following table:

© 2015 CBRE, Inc.


39

SUMMARY OF COMPARABLE RETAIL RENTALS

Comp. No.

Property Nameand Location Year Built Occupancy GLA (SF)

Expense Basis

Pass ThruAmount

TenantName

LeaseArea (SF)

LeaseDate

LeaseTerm Base Rent

1 1937 100% 2,287 NNN --- 2,287 Jan-14 10.0 Yrs. $230.00 PSF

2 2014 100% 116,149 $23.80 David Yurman 1,020 Jun-14 10.0 Yrs. $180.00 PSFJewelry - Confidential 3,104 Jun-14 10.0 Yrs. $200.00 PSFJewelry - Confidential 3,286 Jun-14 10.0 Yrs. $130.00 PSFFashion - Confidential 4,252 Jun-14 10.0 Yrs. $130.00 PSF

Quoted --- --- --- $95.00 PSF

3 100% 17,026 NNN $28.80 Celine - 3rd Floor 1,059 Jan-15 10.0 Yrs. $60.00 PSFCeline 3,708 Jan-15 10.0 Yrs. $100.00 PSFTod's 4,524 Jan-15 10.0 Yrs. $75.00 PSF

Cartier 7,735 Jan-15 10.0 Yrs. $100.00 PSFQuoted --- --- --- $75.00 PSF

4 2015 93% 22,457 NNN $28.80 ZILLI 3,849 Jan-15 10.0 Yrs. $125.00 PSFTom Ford 6,509 Jan-15 10.0 Yrs. $135.00 PSF

Zadig & Voltaire 2,398 Jan-15 10.0 Yrs. $100.00 PSFOmega 3,152 Jan-15 10.0 Yrs. $170.00 PSF

Markowicz 2,762 Jan-15 10.0 Yrs. $100.00 PSF

5 1969 70% 18,620 NNN $11.00 Vacant 2,500 Mar-14 5.0 Yrs. $225.00 PSFVacant 2,500 Mar-14 5.0 Yrs. $225.00 PSF

Longchamp 1,722 Jul-13 10.0 Yrs. $187.50 PSFRolex 1,722 Jul-13 10.0 Yrs. $188.00 PSF

Quoted --- --- --- $225.00 PSF

6 1954 100% 4,958 NNN --- Theory & Helmut Lang 4,958 Jul-14 5.0 Yrs. $100.00 PSFQuoted --- --- --- $160.00 PSF

7 1935, Renovated 100% 4,800 NNN --- Rimowa 2,400 Mar-14 10.0 Yrs. $190.00 PSF

Sartorial Boutique 2,400 Mar-14 10.0 Yrs. $190.00 PSF

8 Proposed Renovation

84% 22,716 NNN $12.80 Quoted --- --- --- $125.00 PSF

Compiled by CBRE

1965, Renovated

Billionaire Italian Couture

Palm Court101-136 N.E. 39th Street,Miami, FL

Oak Plaza139 NE 39th Street,Miami, FL

JBL100 NE 40th Street,Miami, FL

Atlas Plaza & Magnolia Court114-130 NE 40th Street 135 N.E. 39th Street,Miami, FL

NNN

Billionaire Italian Couture4000 N.E. 2nd Avenue,Miami, FL

101 NE 40th Street101 NE 40th Street,Miami, FL

2-54 N.E. 40th Street2-54 N.E. 40th Street,Miami, FL

111 N.E. 40th Street111 N.E. 40th Street,MIami, FL

We have also summarized several comparable sales necessary for our Land Residual calculation

and analysis whereby price per square foot and overall capitalization rates can be extracted from

the submarket area and presented in the following table:

COMPARABLE OVERALL CAPITALIZATION RATE CASE STUDIES

Year GLA Actual Sale Adjusted Sale Price NOINo. Name Type Date Built (SF) Price Price 1 Per SF 1 Occ. Per SF OAR

1 663-667 Lincoln Road,663-667 Lincoln Road,Miami Beach, FL

Sale Dec-12 1935 4,950 $15,000,000 $15,000,000 $3,030.30 100% $158.61 5.23%

2 Quiksilver,740 Collins Avenue,Miami Beach, FL

Sale Dec-12 2000 8,129 $12,250,000 $12,250,000 $1,506.95 100% $87.12 5.78%

3 225 Worth Avenue,225 Worth Avenue,Palm Beach, FL

Sale Sep-13 1950 10,205 $28,100,000 $28,100,000 $2,753.55 100% $114.78 4.17%

4 The Guess Building,736 Collins Avenue,Miami Beach, FL

Sale Oct-13 1921 8,322 $12,475,000 $12,475,000 $1,499.04 100% $74.97 5.00%

5 Lincoln Road Retail,720 Lincoln Road,Miami Beach, FL

Sale May-14 1936 6,943 $34,500,000 $34,500,000 $4,969.03 100% $300.00 6.04%

6 Victoria's Secret South Beach,745 Collins Avenue,Miami Beach, FL

Sale Mar-15 1940 13,119 $24,750,000 $24,750,000 $1,886.58 100% $94.87 5.03%

7 70-74 NE 40th Street, Miami, FL

Sale Apr-15 1961 4,530 $14,600,000 $14,600,000 $3,222.96 95% $163.79 5.08%

8 Atlas Plaza & Magnolia Court, 114-130 NE 40th Street, Miami, FL

Sale May-15 1969 & 2013

18,620 $65,000,000 $65,000,000 $3,490.87 93% $164.17 4.70%

9 17-21 NE 39th Street, Miami, FL

Sale Jun-15 1972 8,310 $24,000,000 $24,000,000 $2,888.09 34% $140.40 4.86%

1 Adjusted sale price for cash equivalency, lease-up and/or deferred maintenance (where applicable)Compiled by CBRE

Transaction

© 2015 CBRE, Inc.


40

It should be noted, the Option 2 scenario has a deeper site configuration which produces a lower

frontage to depth ratio and thereby a lower market rent assumption, while Option 3.1 benefits

from NE 2nd Avenue & NE 39th Street frontage.

Once we have extracted and presented the comparable market rental and comparable sale data,

we have estimated the value of the subject site via the Income Approach and Land Residual

Method of the subject site under Scenario One – Option 2, as follows:

SCENARIO ONE LAND RESIDUAL ANALYSIS - OPTION 2

Project DataProject Type: RetailSite Size: 40,655 SF 0.933 Acs.

Building Area Component: Gross NetRetail Space - Ground Floor 35,898 SF 35,898 SFRetail Space - Second Floor 35,898 SF 35,898 SF

Total Leasable/Sellable Building Area: 71,797 SF 71,797 SFIndicated FAR: 1.77

Retail Space - Ground Floor $175.00Retail Space - Second Floor $50.00

Average Rent $112.50

Potential Gross Income (PGI) $112.50 8,077,132$ Vacancy & Credit Loss 5.0% (403,857)$

Net Rental Income 7,673,276$ Operating Expense Reimbursements (with 5% V&C) ($19.00) (1,364,138)$

Effective Gross Income (EGI) 6,309,138$ Operating Expenses ($20.00) (1,435,935)$

Net Operating Income (NOI) $67.88 4,873,203$ Overall Capitalization Rate (OAR) ÷ 5.00%

Indicated Value PSF 1,357.50$

Prospective Value At Completion & Stabilization 97,464,061$

Less: Development Costs PSF Estimated Vertical Box Construction Cost $250.00 Parking Waivers ($45,000 per spot) $150.00 Lease-Up Cost Budget $67.50

Total Construction Cost Budget $467.50 $33,564,971Entrepreneurial Incentive (Construction Costs & Land Value) 30.0% $22,489,491Total $56,054,463

Residual Land Value $41,409,598Round to $41,400,000Residual Land Value ($/SF of Site) $1,018.32

Compiled by CBRE

We have also estimated the value of the subject site via the Income Approach and Land Residual

Method of the subject site under Scenario Two – Option 3.1, as follows:

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SCENARIO TWO LAND RESIDUAL ANALYSIS - OPTION 3.1

Project DataProject Type: RetailSite Size: 37,102 SF 0.852 Acs.

Building Area Component: Gross NetRetail Space - Ground Floor - NE 2nd Ave. Frontage 16,329 SF 16,329 SFRetail Space - Second Floor - NE 2nd Ave. Frontage 16,329 SF 16,329 SFRetail Space - Ground Floor - NE 39th Street Frontage 16,432 SF 16,432 SFRetail Space - Second Floor - NE 39th Street Frontage 16,432 SF 16,432 SF

Total Leasable/Sellable Building Area: 65,522 SF 65,522 SFIndicated FAR: 1.77

Retail Space - Ground Floor - NE 2nd Ave. Frontage $225.00Retail Space - Second Floor - NE 2nd Ave. Frontage $50.00Retail Space - Ground Floor - NE 39th Street Frontage $150.00Retail Space - Second Floor - NE 39th Street Frontage $50.00

Average Rent $118.69

Potential Gross Income (PGI) $118.69 7,776,925$ Vacancy & Credit Loss 5.0% (388,846)$

Net Rental Income 7,388,079$ Operating Expense Reimbursements (with 5% V&C) ($19.00) (1,244,921)$

Effective Gross Income (EGI) 6,143,159$ Operating Expenses ($20.00) (1,310,443)$

Net Operating Income (NOI) $73.76 4,832,716$ Overall Capitalization Rate (OAR) ÷ 5.00%

Indicated Value PSF 1,475.14$

Prospective Value At Completion & Stabilization 96,654,319$

Less: Development Costs PSF Estimated Vertical Box Construction Cost $250.00 Parking Waivers ($45,000 per spot) $150.00 Lease-Up Cost Budget $71.21

Total Construction Cost Budget $471.21 $30,875,008Entrepreneurial Incentive (Construction Costs & Land Value) 30.0% $22,312,502Total $53,187,510

Residual Land Value $43,466,809Round to $43,500,000Residual Land Value ($/SF of Site) $1,172.44

Compiled by CBRE

The foregoing calculations and Land Residual Analysis under both scenario and site configuration

options would support a 2-story, luxury boutique retail complex consistent with the submarket

redevelopment cycle and subject to the successional rezoning of the subject property.

It should also be noted, that Scenario Two – Option 3.1 produces a higher outcome due to

double road frontage along NE 2nd Avenue and NE 39th Street, compared to Scenario One –

Option 2, which only has frontage along NE 2nd Avenue.

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Based upon the income approach conclusion, via land residual analysis, the highest & best use of

the subject site as if vacant is for a 2-story, luxury boutique retail complex as presented under

Scenario Two – Option 3.1. Our conclusion is based on the potential revenue production, profit

incentive and residual land value and is considered the most obvious and financially feasible use.

AS IMPROVED

Legally Permissible & Physically Possible

The site has been improved with a DASH school facility that is a legal, conforming use and

physically possible. However, the successional rezoning option in compliance with the Miami 21

zoning regulations should be considered based on the velocity of redevelopment occurring within

the Design District.

Financially Feasible & Maximally Productive

The financial feasibility of the existing improvements is an underutilization and may no longer

reflect the most productive use of the subject site. Especially if the potential exists to rezone the

subject site to a more dynamic, higher density, mixed-use option in compliance with the Miami

21 zoning regulations.

Based upon the income approach, the subject has the potential to produce substantial positive

net cash flow, entrepreneurial profit and residual land value as a luxury boutique retail complex

well in excess of the current DASH school use.

Based on the foregoing, the highest and best use of the property, as improved, the existing

improvements are an underutilization of the subject site and the proposed successional rezoning

to a higher density mixed-use zoning classification with potential sell-off and redevelopment to

luxury boutique retail is concluded to be the most feasible and maximally productive use of the

subject property under both scenarios with Option 3.1 being the most productive use.

© 2015 CBRE, Inc.

Appraisal Methodology

43


In appraisal practice, an approach to value is included or omitted based on its applicability to the

property type being valued and the quality and quantity of information available. Depending on

a specific appraisal assignment, any of the following four methods may be used to determine the

market value of the fee simple interest of land:

Sales Comparison Approach; Income Capitalization Procedures; Allocation; and Extraction.

The following summaries of each method are paraphrased from the text.

The first is the sales comparison approach. This is a process of analyzing sales of similar,

recently sold parcels in order to derive an indication of the most probable sales price (or value) of

the property being appraised. The reliability of this approach is dependent upon (a) the

availability of comparable sales data, (b) the verification of the sales data regarding size, price,

terms of sale, etc., (c) the degree of comparability or extent of adjustment necessary for

differences between the subject and the comparables, and (d) the absence of nontypical

conditions affecting the sales price. This is the primary and most reliable method used to value

land (if adequate data exists).

The income capitalization procedures include three methods: land residual technique, ground

rent capitalization, and Subdivision Development Analysis. A discussion of each of these three

techniques is presented in the following paragraphs.

The land residual method may be used to estimate land value when sales data on similar parcels of vacant land are lacking. This technique is based on the principle of balance and the related concept of contribution, which are concerned with equilibrium among the agents of production--i.e. labor, capital, coordination, and land. The land residual technique can be used to estimate land value when: 1) building value is known or can be accurately estimated, 2) stabilized, annual net operating income to the property is known or estimable, and 3) both building and land capitalization rates can be extracted from the market. Building value can be estimated for new or proposed buildings that represent the highest and best use of the property and have not yet incurred physical deterioration or functional obsolescence.

The subdivision development method is used to value land when subdivision and development represent the highest and best use of the appraised parcel. In this method, an appraiser determines the number and size of lots that can be created from the appraised land physically, legally, and economically. The value of the underlying land is then estimated through a discounted cash flow analysis with revenues based on the achievable sale price of the finished product and expenses based on all costs required to complete and sell the finished product.

The ground rent capitalization procedure is predicated upon the assumption that ground rents can be capitalized at an appropriate rate to indicate the market value of

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a site. Ground rent is paid for the right to use and occupy the land according to the terms of the ground lease; it corresponds to the value of the landowner's interest in the land. Market-derived capitalization rates are used to convert ground rent into market value. This procedure is useful when an analysis of comparable sales of leased land indicates a range of rents and reasonable support for capitalization rates can be obtained.

The allocation method is typically used when sales are so rare that the value cannot be estimated

by direct comparison. This method is based on the principle of balance and the related concept

of contribution, which affirm that there is a normal or typical ratio of land value to property value

for specific categories of real estate in specific locations. This ratio is generally more reliable

when the subject property includes relatively new improvements. The allocation method does not

produce conclusive value indications, but it can be used to establish land value when the number

of vacant land sales is inadequate.

The extraction method is a variant of the allocation method in which land value is extracted from

the sale price of an improved property by deducting the contribution of the improvements, which

is estimated from their depreciated costs. The remaining value represents the value of the land.

Value indications derived in this way are generally unpersuasive because the assessment ratios

may be unreliable and the extraction method does not reflect market considerations.

METHODOLOGY APPLICABLE TO THE SUBJECT

For the purposes of this analysis, we have utilized the sales comparison approach and the income

approach via the land residual analysis as these methodologies are typically used for mixed-use

sites that are feasible for immediate development. The other methodologies are used primarily

when comparable land sales data is non-existent. Therefore, these approaches have not been

used.

© 2015 CBRE, Inc.

Sales Comparison Approach

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Land Value

The following map and table summarize the comparable data used in the valuation of the subject

site. A detailed description of each transaction is included in the addenda.

Actual Sale Adjusted Sale Size PriceNo. Property Location Type Date Proposed Use Price Price 1 (SF) Per SF

1 700-710 Brickell Avenue, Miami, FL

Sale Jul-13 Hold for Future Development

$64,100,000 $64,100,000 67,620 $947.94

2 10 - 56 NE 40th Street 53 - 81 NE 39th Street, Miami, FL

Sale Oct-14 Mixed-use boutique retail, office, residential & hotel

uses

$97,820,000 $97,820,000 65,033 $1,504.16

3 1000 Biscayne Boulevard, Miami, FL

Sale Aug-14 Luxury residential condominium

$36,000,000 $36,000,000 36,200 $994.48

4 3711 N.E. 2nd Avenue, Miami, FL

Sale Jun-15 2-Story Retail/Entertainment $14,000,000 $14,000,000 11,326 $1,236.14

5 601-685 Washington Avenue, Miami Beach, FL

Sale Jun-15 Mixed-use retail, residential & parking

$55,500,000 $57,500,000 68,770 $836.12

Subj. Option 2 --- --- Mixed-use retail, office, residential & civic uses

--- --- 40,655 ---

Subj. Option 3.1 --- --- Mixed-use retail, office, residential & civic uses

--- --- 37,102 ---

1 Adjusted sale price for cash equivalency and/or development costs (where applicable)Compiled by CBRE

Transaction

SUMMARY OF COMPARABLE LAND SALES - OPTIONS 2 & 3.1

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The sales utilized represent the best data available for comparison with the subject and were

selected from the Miami and Miami Beach submarket in a 1-to-3 mile radius of the subject.

These sales were chosen based upon recent transaction dates, physical characteristics and

zoning/density.

DISCUSSION/ANALYSIS OF LAND SALES – NE 2ND AVENUE FRONTAGE

Land Sale One

This is a sale of two parcels totaling 1.55-acres with double corners along Brickell Avenue

spanning between S.W. 8th Street and S.W. 7th Street. Northern Trust Corp. owned & occupied

the 10-story office building on 0.459-acres fronting the S.W. 7th Street and Brickell Avenue

corner and the former Miami Today newspaper building occupied the 1.093-acre parcel fronting

S.W. 8th Street & Brickell Avenue. Northern Trust actually owned the south parcel and

expanded/relocated to the north parcel in the 1970's on a ground leased parcel that was owned

by descendants of Mary Brickell. The south parcel was leased to Miami Today since about 1992

until they relocated out in August 2012 and the building was demolished in preparation for

marketing and sale. Northern Trust will now relocate to the new 600 Brickell Building.

The Northern Trust Bank building on the north parcel is a 10-story office building containing

190,963 SF. The property is zoned T6-48a O, which allows a variety of residential, hotel, office

and commercial uses with a Floor Lot Ratio (FLR) of 11 indicating a total allowable gross building

area of 743,820 SF (including structured parking garage area). The property was sent to auction

by the two sellers (Northern Trust Bank and the Brickell family trust). Several high profile bidders

including The Related Group, Fortune International and Swire competed for the site. However,

Swire controls 9.31-acres of adjacent land area and is developed Brickell CitiCentre with the

acquisition of this site providing a critical window for the entire CitiCentre project on Brickell

Avenue. However, there is no immediate plan to develop the site until other phases of the project

are completed. The site is located in the Brickell quadrant and therefore has an allowable density

of 500 units per acre.

When we blend this comparable sale acquisition of $64,100,000 for 1.552-acres into the entire

9.3109-acre assemblage of $68,400,000, a total, "all-in" assemblage price of $133,400,000 or

$281.91-PSF is produced for the entire 10.863-acres.

Land Sale Two

This comparable land sale represents a seven (7) part assemblage of improved with

approximately 72,163-SF of retail, office and surface parking lots within the core Design District

submarket and fronting NE 40th Street, NE 39th Street and N. Miami Avenue at the west end of

the district submarket. Acquisitions and closings commenced in March 2014 through March

2015. The existing improvements were developed between 1937 and 1980 and in varying

degrees of condition and/or renovation, while the buyer continues to lease & manage until the

assemblage is finalized and a master mixed-use redevelopment plan is presented. According to

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the buyer/developer, the redevelopment plan will be consistent with the Design District master

plan and "as of right" zoning including luxury boutique retail with office, residential and hotel

overbuilds. It should be noted the overall site is split zoned with the higher density T6-8 O,

Urban Core fronting NE 39th Street and the lower, mid-rise density of T5 O, fronting NE 40th

Street.

Land Sale Three

This comparable land sale comprises an obsolete BP gas station/convenience store fronting

Biscayne Boulevard and an obsolete retail store building built in 1946 fronting NE 2nd Avenue

and NE 10th Street. The buyer is a developer who constructed and sold out Ten Museum Park

prior to the "great recession" and recently completed and sold out Regalia in Sunny Isles Beach.

The current development plan is for a 57 story, luxury high-rise condo tower with roof top helipad

and 4,600 to 9,900 square foot units (489,242-SF of livable/sellable) plus large terraces. The

pre-construction pricing ranges from $5,000,000 to $18,542,000 or $1,086 to $1,871 per

square foot of livable/sellable area. Project amenities include pool & recreation terrace, wellness

center & spa, indoor aquatic center, sky lounge, concierge, on-site parking and common area

seating.

Land Sale Four

This comparable land sale is the site of the former Power Studios that was previously acquired by

Ross Power and David Wallach (Mango's Tropical Cafe on Miami Beach) in 1989 for $90,000

and then resold in May 2013 to the 3711 Design District LLC partnership for $8,000,000 who

subsequently demolished the building that dated back to 1925. The property was then re-listed

in January 2014 $16,000,000 or $1,411-PSF. The site is the first lot on the north side of

Interstate 95 when you pass through the underpass on N.E. 2nd Avenue and enter the Design

District. There is also a highway billboard pole & sign on-site.

The more recent resale is to an affiliate of Wharton Equity Partners, a New York based real estate

company operated by Peter C. Lewis and David E. Eisenberg who are currently developing

District 36, a 500,000-Sf mixed-use residential project in Midtown, just south of the Design

District. The acquisition of the Power Studios site included construction plans, designs by Touzet

Studio, entitlements for 26,398-SF in a 2-story retail & banquet building, signed construction bids

and permits for a "ready-to-go" development.

Land Sale Five

This comparable land sale is improved with seven (7) existing 1 & 2 story retail store buildings

fronting Washington Avenue between 6th Street and 7th Street in the Flamingo Park Historic

District on Miami Beach that were owned or were “in contract” to Washington Squared, LLC, as

part of an assemblage for mixed-use redevelopment for a total purchase price of $40,210,436,

including lease buyouts, exiting debt & real estate commission obligations to the buyer. The

assembled site area totals 68,770 square feet of medium intensity zoned land area that is

improved with approximately 63,601 square feet of obsolete retail store building area dating to

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1934, 1936 & 1948. The proposed redevelopment is conceptually site planned for 55,120

square feet of ground floor retail, plus 66-residential condominium units with 56,525 square feet

or an average of 856-SF of living area per unit in a 9-story tower and 2-levels of structured

parking with 240 spaces. In addition, there are several other redevelopment scenario options

including a potential hotel tower instead of the residential condominium units.

The majority of the contracts, excluding 619-627 Washington Avenue, all closed simultaneously

in the third week of June 2015. In addition to the assemblage purchase price, the buyer/investor,

Washington Squared, LLC was able to negotiate & execute a membership interest purchase &

sale to IC 601 Washington LLC, dated May 27, 2015. The forward purchase price is

$55,500,000 for a 96.5% interest in a joint venture agreement between the seller & purchaser.

The seller retains a 3.5% interest in the joint venture valued at $2,000,000, for a total purchase

price valued at $57,500,000 for 100% interest in the joint venture partnership.

Part of the assemblage strategy was the Washington Avenue Vision and Master Plan being

developed with a Washington Avenue Blue Ribbon Panel (WABRP) that was recommending

increasing building height restrictions. The WABRP was recommending a FAR as high as 2.75,

subject to municipal government approvals, versus the current zoning of CD-2, Commercial, and

Medium Intensity District permits a maximum floor area ratio (FAR) of 1.50, plus Code Section

142-307(d) 2.0 FAR where more than 25% of the building is used for residential or hotel units.

SECONDARY LOCATION LAND SALES

The following map and table summarize the comparable data used in the valuation of the subject

site. A detailed description of each transaction is included in the addenda.

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Actual Sale Adjusted Sale Size PriceNo. Property Location Type Date Proposed Use Price Price 1 (SF) Per SF

1 842 Brickell Plaza (S.E. 1st Avenue), Miami, FL

Sale Apr-14 Residential tower $28,500,000 $28,500,000 37,026 $769.73

2 145 - 165 SW 12th Street, Miami, FL

Sale Jul-14 206-Unit Hotel $9,500,000 $9,888,084 22,500 $439.47

3 128 SW 7th Street, Miami, FL

Sale Dec-14 TBD $26,200,000 $22,700,000 43,500 $521.84

4 170 NE 38th Street, Miami, FL

Sale Jun-15 Mixed-use $6,900,000 $6,900,000 10,250 $673.17

Subj. Option 2 --- --- Mixed-use retail, office, residential & civic uses

--- --- 22,162 ---

Subj. Option 3.1 --- --- Mixed-use retail, office, residential & civic uses

--- --- 18,609 ---

Compiled by CBRE

Transaction

SUMMARY OF COMPARABLE LAND SALES - SECONDARY LOCATIONS

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The sales utilized represent the best data available for comparison with the subject and were

selected from the Miami and Miami Beach submarket in a 1-to-2 mile radius of the subject.

These sales were chosen based upon recent transaction dates, physical characteristics and

zoning/density.

DISCUSSION/ANALYSIS OF LAND SALES – SECONDARY LOCATIONS

Land Sale One

This comparable land sale comprises four (4) parcels that were assembled in two (2) separate

transactions. The first part was the $21,500,000 (3 folios totaling 0.671-acre) winning bid on

the former Beacon at Brickell Village site as a result of local developer, Renzo Renzi bankruptcy

proceedings who had received a Major Use Special Permit (M.U.S.P.) in November 2001, as per

C.C. Resolution Number 01-1232. The proposed development program was approved for a 36-

story, 228 unit residential tower, providing a total allowable building area of 226,917 SF. At the

time of sale this portion of the site was improved with an obsolete & fire damaged restaurant with

fenced parking lot on the corner of S.E. 8th Street (Calle Ocho) and S.E. 1st Avenue (Brickell

Plaza), one block off-Brickell. Renzo Renzi had previously assembled the site in 2002 & 2005 for

$4,233,000. The second part of the transaction was for a $7,000,000 sale price from Ambassa

Holdings Inc. for a 9,148-SF site improved with a 2,819-SF building occupied and operating as a

Chicken Kitchen fast food restaurant. The seller had previously acquired this property in

December 2004 for $1,870,000. Even though the Renzo Renzi parcel was acquired out of

bankruptcy, it is one of the highest prices paid per square foot within the Brickell submarket. The

buyer will likely have to go through the approval process again given the outdated MUSP and

expanded site area through assemblage. The site is located within the Brickell quadrant and

according to Miami 21 zoning can be developed to a density of 500 units per acre.

Land Sale Two

This is the sale of a 0.52-acre or 22,500 SF site located along the north side of S.W. 12th Street,

just east of S.W. 2nd Avenue, within the Brickell Financial District of Miami, Miami-Dade County,

Florida. The property is currently improved with three, two-story apartment buildings. The

property is proposed for a 21-story, 206-unit hotel development that will be operated by

Cambria Suites Brickell. The proposed development will consist of 179,278 SF of buildable area,

including garage area. The property transferred on July 3, 2014 for $9,500,000 ($52.99/SF of

buildable area or $422.22/SF of land area) based on land value. There was a 60-day

inspection period and a 30 day closing date indicating an overall 90 days to close. This was an

all-cash transaction and is considered to be arm’s length. It should be noted that in order to

proceed with the proposed development program indicated within this report, the

owner/developer will need to purchase additional 21,778 SF of FLR. In the City of Miami,

property owners are allowed to purchase into the public benefit bonus program in order to

maximize the development potential at the site. The current price for additional FLR at the

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property's location is $17.82 PSF. Therefore, the total adjusted sales price is $9,888,084

($55.16/SF of building area $439.47/SF of land area).

Land Sale Three

This is the sale of a 1.0-acre or 43,500 SF site located between SW 7th Street and SW 8th Street

about 100 feet west of SW 1st Avenue and about 2 blocks west of the large CityCentre

development. The property is currently improved with a functional motel that, according to

documentation supplied by the buyer, throws off $1,748,811 in NOI. There are no permits or

approvals in place for future development. As per zoning for T6-24 O, the property could be

developed with 304,500 SF of as-of-right development or 395,850 SF including a 30% bonus.

The property is also a candidate for an up-zoning since it is greater than 40,000 SF

Pending Sale: The property is reportedly in contract to be sold. The property was originally

contracted to be sold from Rafer Enterprises, Inc. as seller to Fernando Arias, Andrei Gordienko

and/or Assigns as buyer for a purchase price of $18,000,000. That Purchase & Sale Agreement

is dated October 20, 2014.

Addendum to Contract: According to an Addendum to Contract, dated November 14, 2014, the

purchase price was amended and increased to $20,400,000.

Assignment of Contract: According to an Assignment Agreement dated November 18, 2014, the

contract of sale was assigned from Fernando Arias, Andrei Gordienko and/or Assigns to

Optimum USA Investments 6, LLC. The Assignment price to be paid by Assignee to Assignor for

this assignment is to be the sum of $5,800,000 plus reimbursement of the contract deposit of

$700,000 for an aggregate assignment price of $6,500,000.

The total purchase price including the assignment is $26,200,000. However, we estimate two

years of interim income ($3,500,000 Rd.) during the period to potentially pursue an up-zoning

and attain permits and construction financing. Therefore, the adjusted value of the land is

$22,700,000 or $522 PSF of land area, $75.55 PSF of as-of-right FLR and $57.34 PSF of FLR

including bonuses.

Land Sale Four

This comparable land sale is improved with a 3,224-SF obsolete office/warehouse built in 1947

that was recently occupied & vacated by the Stage nightclub. The sellers previously acquired the

property in October 2012 for $2,000,000 as a speculative investment as the Design District was

just starting to emerge, but yet to be developed. This site is on a less desirable side street

location, but across the street from the Palm Court parking garage. The buyer is a private equity

and development firm based in Aventura who intends on demolishing the improvements and

redeveloping the site to a higher & better use. The broker reported a quiet & quick transaction

between buyer & seller.

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SUMMARY OF ADJUSTMENTS – NE 2ND AVENUE FRONTAGE

Based on our comparative analysis, the following chart summarizes the adjustments warranted to

each comparable.

LAND SALES ADJUSTMENT GRID - OPTIONS 2 & 3.1

Comparable Number 1 2 3 4 5 Subject - Option 2

Subject - Option 3.1

Transaction Type Sale Sale Sale Sale Sale --- ---

Transaction Date Jul-13 Mar-14 Aug-14 Jun-15 Jun-15 --- ---Proposed Use Hold for Future

DevelopmentMixed-use

boutique retail, office, residential

& hotel uses

Luxury residential

condominium

2-Story Retail/ Entertainment

Mixed-use retail, residential &

parking

Mixed-use retail, office, residential &

civic uses

Mixed-use retail, office,

residential & civic uses

Actual Sale Price $64,100,000 $97,820,000 $36,000,000 $14,000,000 $55,500,000 --- ---

Adjusted Sale Price 1 $64,100,000 $97,820,000 $36,000,000 $14,000,000 $57,500,000 --- ---Size (Acres) 1.55 1.49 0.83 0.26 1.58 0.93 0.85Size (SF) 67,620 65,033 36,200 11,326 68,770 40,655 37,102Zoning T6-48a O T6-12 O & T5 O T6-80 O T6-12 O CD-2

Allowable Bldg. Area (SF) 743,820 SF --- 489,242 SF 26,398 SF 111,645 --- ---Indicated FAR 11.00 --- 13.51 2.33 1.62 --- ---Price Per SF $947.94 $1,504.16 $994.48 $1,236.14 $836.12 --- ---Price Per Bldg. Area $86.18 --- $73.58 $530.34 --- --- ---Price ($ PSF) $947.94 $1,504.16 $994.48 $1,236.14 $836.12Property Rights Conveyed 0% 0% 0% 0% 0%Financing Terms 1 0% 0% 0% 0% 0%Conditions of Sale 0% -20% 0% 0% 0%Market Conditions (Time) 20% 10% 10% 0% 0%Subtotal $1,137.53 $1,323.66 $1,093.92 $1,236.14 $836.12Size 5% 5% 0% -5% 5%Shape 0% 5% 0% 0% 0%Corner -10% 0% 0% 0% 0%Frontage 0% 0% 0% 0% 0%Topography/Site Conditions 0% 0% 0% 0% 0%Location 0% 0% 0% 0% 10%Zoning/Density/Platting -10% 0% -20% -5% 10%Utilities 0% 0% 0% 0% 0%Highest & Best Use 0% 0% 0% 0% 0%Total Other Adjustments -15% 10% -20% -10% 25%Value Indication for Subject $966.90 $1,456.03 $875.14 $1,112.52 $1,045.151 Adjusted sale price for cash equivalency and/or development costs (where applicable)Compiled by CBRE

CI, Civic Institution & Successional Rezone to T6-8 O

SUMMARY OF ADJUSTMENTS – SECONDARY LOCATIONS

Based on our comparative analysis, the following chart summarizes the adjustments warranted to

each comparable.

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LAND SALES ADJUSTMENT GRID - SECONDARY LOCATIONS

Comparable Number 1 2 3 4 Subject - Option 2

Subject - Option 3.1

Transaction Type Sale Sale Sale Sale --- ---Transaction Date Apr-14 Jul-14 Dec-14 Jun-15 --- ---Proposed Use Residential

tower206-Unit Hotel TBD Mixed-use Mixed-use

retail, office, residential &

Mixed-use retail, office, residential &

Actual Sale Price $28,500,000 $9,500,000 $26,200,000 $6,900,000 --- ---

Adjusted Sale Price 1 $28,500,000 $9,888,084 $22,700,000 $6,900,000 --- ---Size (Acres) 0.85 0.51 0.99 0.24 0.51 0.43Size (SF) 37,026 22,500 43,500 10,250 22,162 18,609Zoning T6-48b O T6-24 O T6-24 O T6-12 O

Allowable Units 425 Units 206 Units --- --- 168 SF 228 SF Allowable Bldg. Area (SF) 666,468 SF 179,278 SF --- --- --- ---Indicated FAR 18.00 7.97 --- --- --- ---Price Per SF $769.73 $439.47 $521.84 $673.17 --- ---Price Per Bldg. Area $42.76 $55.16 --- --- --- ---Price ($ PSF) $769.73 $439.47 $521.84 $673.17Property Rights Conveyed 0% 0% 0% 0%Financing Terms 1 0% 0% 0% 0%Conditions of Sale 0% 0% 0% 0%Market Conditions 10% 10% 10% 0%Subtotal $846.70 $483.42 $574.02 $673.17Size 5% 0% 5% -5%Shape 0% 0% 0% 0%Corner 0% 0% 0% 0%Frontage 0% 0% -10% 0%Topography 0% 0% 0% 0%Location 0% 0% 0% 0%Zoning/Density -10% -5% -5% -5%Utilities 0% 0% 0% 0%Highest & Best Use 0% 0% 0% 0%Total Other Adjustments -5% -5% -10% -10%Value Indication for Subject $804.37 $459.25 $516.62 $605.851 Adjusted sale price for cash equivalency and/or development costs (where applicable)Compiled by CBRE

CI, Civic Institution & Successional Rezone to T6-8 O

CONCLUSIONS

The comparables sales presented produced an overall unadjusted value indicator range from

$836.12 to $1,504.16 per square foot of site area for the primary frontage sites; and, $439.47

to $769.73 per square foot of site area for the secondary location sites.

After adjustments were applied for property rights conveyed, conditions of sale, market conditions

(time), size, corner or frontage influence, topography/site conditions, location and

zoning/density/entitlements when compared to the subject property, the range of value indicators

was narrowed to $875.14 to $1,456.03 per square foot of site area for the primary frontage;

and, $459.25 to $804.37 per square foot of site area for the secondary location sites.

In conclusion, a price per square foot of site area within the overall unadjusted range and within the

mid-to-upper end of the adjusted range for the primary frontage comparable sales is most

appropriate for valuing the subject property NE 2nd Avenue frontage, subject to delivering a clear &

level site, successional rezoning and providing a shared access easement.

© 2015 CBRE, Inc.


54

While the non-frontage site area under Scenario One – Option 2 would fall at the lower end of

the unadjusted and adjusted ranges, with overall value under Scenario One – Option 2,

calculated as follows:

CONCLUDED LAND VALUE AS IS - OPTION 2

$ PSF NE 2nd Ave Frontage SF Total

$1,100.00 x 18,493 = $20,342,520$1,400.00 x 18,493 = $25,890,480

$ PSF Non-Frontage SF Total$500.00 x 22,162 = $11,080,900$600.00 x 22,162 = $13,297,080

Value As If Clear, Level & Buildable: $39,000,000

Less: Demolition Costs: Delivered Clear & Level

Indicated Value As Is: $39,000,000Rounded: $39,000,000

(Rounded $ PSF) $959.29

Compiled by CBRE

We have also considered the secondary frontage along NE 39th Street to be superior under Scenario

Two – Option 3.1 with the proper value indicator falling within the mid-to-upper end of the

unadjusted and adjusted ranges. Therefore, we have calculated the value for Scenario Two – option 3.1, as follows:

CONCLUDED LAND VALUE AS IS - OPTION 3.1$ PSF NE 2nd Ave Frontage SF Total

$1,100.00 x 18,493 = $20,342,520$1,400.00 x 18,493 = $25,890,480

$ PSF NE 39th Street Frontage SF Total$600.00 x 18,609 = $11,165,280$800.00 x 18,609 = $14,887,040

Value As If Clear, Level & Buildable: $40,000,000Less: Demolition Costs: Delivered Clear & Level

Indicated Value As Is: $40,000,000Rounded: $40,000,000

(Rounded $ PSF) $1,078.11Compiled by CBRE

© 2015 CBRE, Inc.

Reconciliation of Value

55

Reconciliation of Value

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

SUMMARY OF VALUE CONCLUSIONS - SCENARIO 1 - OPTION 2As Is on

August 27, 2015Cost Approach Not applicableSales Comparison Approach $39,000,000 Income Approach - Land Residual Method $41,400,000 Reconciled Values $40,000,000

Compiled by CBRE

SUMMARY OF VALUE CONCLUSIONS - SCENARIO 2 - OPTION 3.1As Is on

August 27, 2015Cost Approach Not ApplicableSales Comparison Approach $40,000,000 Income Approach - Land Residual Method $43,500,000Reconciled Values $41,000,000 Compiled by CBRE

In the sales comparison approach, the subject is compared to similar properties that have been

sold recently or for which listing prices or offers are known. The sales used in this analysis are

considered highly comparable to the subject, and the required adjustments were based on

reasonable and well-supported rationale. In addition, market participants are currently analyzing

purchase prices on other properties as they relate to available substitutes in the market.

Therefore, the sales comparison approach is considered to provide a reliable and primary value

indication.

The income approach we employed a land residual technique to the subject since it is an income

producing development program. Market participants are primarily analyzing properties based

on their income generating potential and valuation at stabilization, less costs-to-build, including

profit. Therefore, the income approach is considered a reasonable and substantiated value

indicator and has been given weighted emphasis in the final value estimate.

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

MARKET VALUE CONCLUSIONS Appraisal Premise Interest Appraised Date of Value Value Conclusion

As Is Land Value - Scenario 1 - Option 2 Fee Simple Estate August 27, 2015 $40,000,000As Is Land Value - Scenario 2 - Option 3.1 Fee Simple Estate August 27, 2015 $41,000,000

Compiled by CBRE

© 2015 CBRE, Inc.

Assumptions and Limiting Conditions

56


1. Unless otherwise specifically noted in the body of the report, it is assumed that title to the property or properties appraised is clear and marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value. CBRE, Inc. is not aware of any title defects nor has it been advised of any unless such is specifically noted in the report. CBRE, Inc., however, has not examined title and makes no representations relative to the condition thereof. Documents dealing with liens, encumbrances, easements, deed restrictions, clouds and other conditions that may affect the quality of title have not been reviewed. Insurance against financial loss resulting in claims that may arise out of defects in the subject’s title should be sought from a qualified title company that issues or insures title to real property.

2. Unless otherwise specifically noted in the body of this report, it is assumed: that the existing improvements on the property or properties being appraised are structurally sound, seismically safe and code conforming; that all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required; that the roof and exterior are in good condition and free from intrusion by the elements; that the property or properties have been engineered in such a manner that the improvements, as currently constituted, conform to all applicable local, state, and federal building codes and ordinances. CBRE, Inc. professionals are not engineers and are not competent to judge matters of an engineering nature. CBRE, Inc. has not retained independent structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the condition of improvements. Unless otherwise specifically noted in the body of the report: no problems were brought to the attention of CBRE, Inc. by ownership or management; CBRE, Inc. inspected less than 100% of the entire interior and exterior portions of the improvements; and CBRE, Inc. was not furnished any engineering studies by the owners or by the party requesting this appraisal. If questions in these areas are critical to the decision process of the reader, the advice of competent engineering consultants should be obtained and relied upon. It is specifically assumed that any knowledgeable and prudent purchaser would, as a precondition to closing a sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity of building systems. Structural problems and/or building system problems may not be visually detectable. If engineering consultants retained should report negative factors of a material nature, or if such are later discovered, relative to the condition of improvements, such information could have a substantial negative impact on the conclusions reported in this appraisal. Accordingly, if negative findings are reported by engineering consultants, CBRE, Inc. reserves the right to amend the appraisal conclusions reported herein.

3. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraisers. CBRE, Inc. has no knowledge of the existence of such materials on or in the property. CBRE, Inc., however, is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired.

We have inspected, as thoroughly as possible by observation, the land; however, it was impossible to personally inspect conditions beneath the soil. Therefore, no representation is made as to these matters unless specifically considered in the appraisal.

4. All furnishings, equipment and business operations, except as specifically stated and typically considered as part of real property, have been disregarded with only real property being considered in the report unless otherwise stated. Any existing or proposed improvements, on or off-site, as well as any alterations or repairs considered, are assumed to be completed in a workmanlike manner according to standard practices based upon the information submitted to CBRE, Inc. This report may be subject to amendment upon re-inspection of the subject subsequent to repairs, modifications, alterations and completed new construction. Any estimate of Market Value is as of the date indicated; based upon the information, conditions and projected levels of operation.

5. It is assumed that all factual data furnished by the client, property owner, owner’s representative, or persons designated by the client or owner to supply said data are accurate and correct unless otherwise specifically noted in the appraisal report. Unless otherwise specifically noted in the appraisal report, CBRE, Inc. has no reason to believe that any of the data furnished contain any material error. Information and data referred to in this paragraph include, without being limited to, numerical street addresses, lot and block numbers, Assessor’s Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any material error in any of the above data could have a substantial impact

© 2015 CBRE, Inc.


57

on the conclusions reported. Thus, CBRE, Inc. reserves the right to amend conclusions reported if made aware of any such error. Accordingly, the client-addressee should carefully review all assumptions, data, relevant calculations, and conclusions within 30 days after the date of delivery of this report and should immediately notify CBRE, Inc. of any questions or errors.

6. The date of value to which any of the conclusions and opinions expressed in this report apply, is set forth in the Letter of Transmittal. Further, that the dollar amount of any value opinion herein rendered is based upon the purchasing power of the American Dollar on that date. This appraisal is based on market conditions existing as of the date of this appraisal. Under the terms of the engagement, we will have no obligation to revise this report to reflect events or conditions which occur subsequent to the date of the appraisal. However, CBRE, Inc. will be available to discuss the necessity for revision resulting from changes in economic or market factors affecting the subject.

7. CBRE, Inc. assumes no private deed restrictions, limiting the use of the subject in any way.

8. Unless otherwise noted in the body of the report, it is assumed that there are no mineral deposits or subsurface rights of value involved in this appraisal, whether they are gas, liquid, or solid. Nor are the rights associated with extraction or exploration of such elements considered unless otherwise stated in this appraisal report. Unless otherwise stated it is also assumed that there are no air or development rights of value that may be transferred.

9. CBRE, Inc. is not aware of any contemplated public initiatives, governmental development controls, or rent controls that would significantly affect the value of the subject.

10. The estimate of Market Value, which may be defined within the body of this report, is subject to change with market fluctuations over time. Market value is highly related to exposure, time promotion effort, terms, motivation, and conclusions surrounding the offering. The value estimate(s) consider the productivity and relative attractiveness of the property, both physically and economically, on the open market.

11. Any cash flows included in the analysis are forecasts of estimated future operating characteristics are predicated on the information and assumptions contained within the report. Any projections of income, expenses and economic conditions utilized in this report are not predictions of the future. Rather, they are estimates of current market expectations of future income and expenses. The achievement of the financial projections will be affected by fluctuating economic conditions and is dependent upon other future occurrences that cannot be assured. Actual results may vary from the projections considered herein. CBRE, Inc. does not warrant these forecasts will occur. Projections may be affected by circumstances beyond the current realm of knowledge or control of CBRE, Inc.

12. Unless specifically set forth in the body of the report, nothing contained herein shall be construed to represent any direct or indirect recommendation of CBRE, Inc. to buy, sell, or hold the properties at the value stated. Such decisions involve substantial investment strategy questions and must be specifically addressed in consultation form.

13. Also, unless otherwise noted in the body of this report, it is assumed that no changes in the present zoning ordinances or regulations governing use, density, or shape are being considered. The property is appraised assuming that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, nor national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report is based, unless otherwise stated.

14. This study may not be duplicated in whole or in part without the specific written consent of CBRE, Inc. nor may this report or copies hereof be transmitted to third parties without said consent, which consent CBRE, Inc. reserves the right to deny. Exempt from this restriction is duplication for the internal use of the client-addressee and/or transmission to attorneys, accountants, or advisors of the client-addressee. Also exempt from this restriction is transmission of the report to any court, governmental authority, or regulatory agency having jurisdiction over the party/parties for whom this appraisal was prepared, provided that this report and/or its contents shall not be published, in whole or in part, in any public document without the express written consent of CBRE, Inc. which consent CBRE, Inc. reserves the right to deny. Finally, this report shall not be advertised to the public or otherwise used to induce a third party to purchase the property or to make a “sale” or “offer for sale” of any “security”, as such terms are defined and used in the Securities Act of 1933, as amended. Any third party, not covered by the exemptions herein, who may possess this report, is advised that they should rely on their own independently secured advice for any decision in connection with this property. CBRE, Inc. shall have no accountability or responsibility to any such third party.

15. Any value estimate provided in the report applies to the entire property, and any pro ration or division of the title into fractional interests will invalidate the value estimate, unless such pro ration or division of interests has been set forth in the report.

© 2015 CBRE, Inc.


58

16. The distribution of the total valuation in this report between land and improvements applies only under the existing program of utilization. Component values for land and/or buildings are not intended to be used in conjunction with any other property or appraisal and are invalid if so used.

17. The maps, plats, sketches, graphs, photographs and exhibits included in this report are for illustration purposes only and are to be utilized only to assist in visualizing matters discussed within this report. Except as specifically stated, data relative to size or area of the subject and comparable properties has been obtained from sources deemed accurate and reliable. None of the exhibits are to be removed, reproduced, or used apart from this report.

18. No opinion is intended to be expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. Values and opinions expressed presume that environmental and other governmental restrictions/conditions by applicable agencies have been met, including but not limited to seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, licenses, etc. No survey, engineering study or architectural analysis has been made known to CBRE, Inc. unless otherwise stated within the body of this report. If the Consultant has not been supplied with a termite inspection, survey or occupancy permit, no responsibility or representation is assumed or made for any costs associated with obtaining same or for any deficiencies discovered before or after they are obtained. No representation or warranty is made concerning obtaining these items. CBRE, Inc. assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance.

19. Acceptance and/or use of this report constitutes full acceptance of the Contingent and Limiting Conditions and special assumptions set forth in this report. It is the responsibility of the Client, or client’s designees, to read in full, comprehend and thus become aware of the aforementioned contingencies and limiting conditions. Neither the Appraiser nor CBRE, Inc. assumes responsibility for any situation arising out of the Client’s failure to become familiar with and understand the same. The Client is advised to retain experts in areas that fall outside the scope of the real estate appraisal/consulting profession if so desired.

20. CBRE, Inc. assumes that the subject analyzed herein will be under prudent and competent management and ownership; neither inefficient nor super-efficient.

21. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined and considered in the appraisal report.

22. No survey of the boundaries of the property was undertaken. All areas and dimensions furnished are presumed to be correct. It is further assumed that no encroachments to the realty exist.

23. The Americans with Disabilities Act (ADA) became effective January 26, 1992. Notwithstanding any discussion of possible readily achievable barrier removal construction items in this report, CBRE, Inc. has not made a specific compliance survey and analysis of this property to determine whether it is in conformance with the various detailed requirements of the ADA. It is possible that a compliance survey of the property together with a detailed analysis of the requirements of the ADA could reveal that the property is not in compliance with one or more of the requirements of the ADA. If so, this fact could have a negative effect on the value estimated herein. Since CBRE, Inc. has no specific information relating to this issue, nor is CBRE, Inc. qualified to make such an assessment, the effect of any possible non-compliance with the requirements of the ADA was not considered in estimating the value of the subject.

24. Client shall not indemnify Appraiser or hold Appraiser harmless unless and only to the extent that the Client misrepresents, distorts, or provides incomplete or inaccurate appraisal results to others, which acts of the Client approximately result in damage to Appraiser. Notwithstanding the foregoing, Appraiser shall have no obligation under this Section with respect to any loss that is caused solely by the active negligence or willful misconduct of a Client and is not contributed to by any act or omission (including any failure to perform any duty imposed by law) by Appraiser. Client shall indemnify and hold Appraiser harmless from any claims, expenses, judgments or other items or costs arising as a result of the Client's failure or the failure of any of the Client's agents to provide a complete copy of the appraisal report to any third party. In the event of any litigation between the parties, the prevailing party to such litigation shall be entitled to recover, from the other, reasonable attorney fees and costs.

© 2015 CBRE, Inc.

Addenda

ADDENDA

© 2015 CBRE, Inc.

Addenda

Addendum A

LAND SALE DATA SHEETS

© 2015 CBRE, Inc.

Sale Land - Mixed-Use No. 1Property Name Brickell CitiCentreAddress 700-710 Brickell Avenue

Miami, FL 33131United States

Government Tax Agency Miami-Dade

Govt./Tax ID 01-0210-030-1310 & 1180

Site/Government Regulations

Acres Square feetLand Area Net 1.550 67,620

Land Area Gross 1.550 67,620

Site Development Status N/AShape RectangularTopography Generally LevelUtilities All Availabe

Maximum FAR 11.00Min Land to Bldg Ratio N/A

Maximum Density N/A

Frontage Distance/Street N/A Brickell AvenueFrontage Distance/Street N/A SW 8th StreetFrontage Distance/Street N/A SW 7th Street

General Plan N/ASpecific Plan N/AZoning T6-48a O, Urban Core

Entitlement Status N/A

Sale Summary

Recorded Buyer Swire Properties, Inc. Marketing Time 4 Month(s)True Buyer N/A Buyer Type DeveloperRecorded Seller Northern Trust Corp. & Linda C. Minor TRS

Robert E. Gallagher JR TRSSeller Type N/A

True Seller N/A Primary Verification CBRE, Inc. Listing

Interest Transferred N/A Type SaleCurrent Use Vacant Land & 10-Story Office Bldg Date 7/1/2013Proposed Use Hold for Future Development Sale Price $64,100,000Listing Broker Chris Lee w/ CBRE Financing Other(See Comments)Selling Broker N/A Cash Equivalent $64,100,000Doc # 28724/1877 Capital Adjustment N/A

Adjusted Price $64,100,000

Transaction Summary plus Five-Year CBRE View HistoryTransaction Date Transaction Type Buyer Seller Price Cash Equivalent Price/sf07/2013 Sale Swire Properties, Inc. Northern Trust Corp. &

Linda C. Minor TRS Robert E. Gallagher JR TRS

$64,100,000 N/A

© 2015 CBRE, Inc.

Sale Land - Mixed-Use No. 1Units of Comparison

$947.94 / sf $82,603 / Unit

$41,293,564.00 / ac $82,603 / Allowable Bldg. Units

$86.18 / Building Area

Financial

No information recorded

Map & Comments

This is a sale of two parcels totalling 1.55-acres with double corners along Brickell Avenue spanning between S.W. 8th Street and S.W. 7th Street. Nothern Trust Corp. owned & occupied the 10-story office building on 0.459-acres fronting the S.W. 7th Street and Brickell Avenue corner and the former Miami Today newspaper building occupied the 1.093-acre parcel fronting S.W. 8th Street & Brickell Avenue. Northern Trust actually owned the south parcel and expanded/relocated to the north parcel in the 1970's on a ground leased parcel that was owned by decendants of Mary Brickell. The south parcel was leased to Miami Today since about 1992 until they relocated out in August 2012 and the building was demolished in preparation for marketing and sale. Northern Trust will now relocate to the new 600 Brickell Building.

The Northern Trust Bank building on the north parcel is a 10-story office building containing 190,963 SF. The property is zoned T6-48a O, which allows a variety of residential, hotel, office and commercial uses with a Floor Lot Ratio (FLR) of 11 indicating a total allowable gross building area of 743,820 SF (including structrued parking garage area). The property was sent to auction by the two sellers (Northern Turst Bank and the Brickell family trust). Several high profile bidders including The Related Group, Fortune International and Swire competed for the site. However, Swire controls 9.31-acres of adjacent land area and is developed Brickell CitiCentre with the acquisition of this site providing a critical window for the entire CitiCentre project on Brickell Avenue. However, there is no immediate plan to develop the site until other phases of the project are completed. The site is located in the Brickell quadrent and therefore has an allowable density of 500 units per acre.

When we blend this comparable sale acquisition of $64,100,000 for 1.552-acres into the entire 9.3109-acre assemblage of $68,400,000, a total, "all-in" assemblage price of $133,400,000 or $281.91-PSF is produced for the entire 10.863-acres.

© 2015 CBRE, Inc.

Sale Land - Mixed-Use No. 2Property Name Design District - Thor Equities AssemblageAddress 10 - 56 NE 40th Street

53 - 81 NE 39th StreetMiami, FL 33137United States


Govt./Tax ID 01-3124-029-0100: Multiple




Site Development Status Other(See Comments)Shape IrregularTopography Level, At Street GradeUtilities N/A

Maximum FAR N/AMin Land to Bldg Ratio N/A

Maximum Density N/A

Frontage Distance/Street N/A NE 40th StreetFrontage Distance/Street N/A NE 39th StreetFrontage Distance/Street N/A N. Miami Ave

General Plan N/ASpecific Plan N/AZoning T6-12 O, Urban Core & T5 O


Sale Summary

Recorded BuyerThor 2-54 NE 40, ASB 75 NE 39th, 53 NE 39th & 3925 North Miami Ave, LLC Marketing Time N/A

True Buyer Thor Equities Buyer Type DeveloperRecorded Seller Multiple Seller Type Private InvestorTrue Seller Multiple Private Investors Primary Verification Scott Sherman, Thor Equities

Interest Transferred Leased Fee Type SaleCurrent Use Obsolete retail & office properties Date 10/13/2014Proposed Use Mixed-use boutique retail, office, residential &

hotel usesSale Price $97,820,000

Listing Broker N/A Financing Cash to SellerSelling Broker N/A Cash Equivalent $97,820,000Doc # Multiple Capital Adjustment $0


Transaction Summary plus Five-Year CBRE View HistoryTransaction Date Transaction Type Buyer Seller Price Cash Equivalent Price/sf10/2014 Sale Thor 2-54 NE 40, ASB 75

NE 39th, 53 NE 39th & 3925 North Miami Ave, LLC

Multiple $97,820,000 $1,356

© 2015 CBRE, Inc.


$1,504.16 / sf N/A / Unit

$65,519,089.08 / ac N/A / Allowable Bldg. Units

N/A / Building Area

Financial


Map & Comments

This comparable land sale represents a seven (7) part assemblage of improved with approximately 72,163-SF of retail, office and surface parking lots within the core Design District submarket and fronting NE 40th Street, NE 39th Street and N. Miami Avenue at the west end of the district submarket. Acquisitions and closings commenced in March 2014 through March 2015. The existing improvements were developed between 1937 and 1980 and in varying degrees of condition and/or renovation, while the buyer continues to lease & manage until the assemblage is finalized and a master mixed-use redevelopment plan is presented. According to the buyer/developer, the redevelopment plan will be consistent with the Design District master plan and "as of right" zoning including luxury boutique retail with office, residential and hotel overbuilds. It should be noted the overall site is split zoned with the higher density T6-12 O, Urban Core fronting NE 39th Street and the lower, mid-rise density of T5 O, fronting NE 40th Street.

© 2015 CBRE, Inc.

Sale Land - Multi Unit Residential No. 3Property Name One Thousand MuseumAddress 1000 Biscayne Boulevard



Govt./Tax ID 01-0102-000-1050 &1060




Site Development Status N/AShape RectangularTopography Level, At Street GradeUtilities Available to site


Maximum Density N/A

Frontage Distance/Street N/A Biscayne BlvdFrontage Distance/Street N/A NE 10th StreetFrontage Distance/Street N/A NE 2nd Ave

General Plan N/ASpecific Plan N/AZoning T6-80 O, Urban Core


Sale Summary

Recorded Buyer 1000 Biscayne Tower, LLC Marketing Time N/ATrue Buyer N/A Buyer Type DeveloperRecorded Seller S Z Sofi, Inc. & 1000 Biscayne, Inc. Seller Type N/ATrue Seller N/A Primary Verification Kevin Venger, Buyer/Developer

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use Obsolete gas station & retail Date 8/25/2014Proposed Use Luxury residential condominium Sale Price $36,000,000Listing Broker N/A Financing Cash to SellerSelling Broker N/A Cash Equivalent $36,000,000Doc # 28287/2667 Capital Adjustment $0


Transaction Summary plus Five-Year CBRE View HistoryTransaction Date Transaction Type Buyer Seller Price Cash Equivalent Price/sf08/2014 Sale 1000 Biscayne Tower,

LLCS Z Sofi, Inc. & 1000 Biscayne, Inc.

$36,000,000 N/A

08/2014 Sale 1000 Biscayne Tower, LLC

S Z Sofi, Inc. & 1000 Biscayne, Inc.

$36,000,000 N/A

© 2015 CBRE, Inc.

Sale Land - Multi Unit Residential No. 3Units of Comparison

$994.48 / sf $43,321 / Unit



Financial


Map & Comments

This comparable land sale comprises an obsolete BP gas station/convenience store fronting Biscayne Boulevard and an obsolete retail store building built in 1946 fronting NE 2nd Avenue and NE 10th Street. The buyer is a developer who constructed and sold out Ten Museum Park prior to the "great recession" and recently completed and sold out Regalia in Sunny Isles Beach. The current development plan is for a 57 story, luxury high-rise condo tower with roof top helipad and 4,600 to 9,900 square foot units (489,242-SF of livable/sellable) plus large terraces. The pre-construction pricing ranges from $5,000,000 to $18,542,000 or $1,086 to $1,871 per square foot of livable/sellable area. Project amenities include pool & recreation terrace, wellness center & spa, indoor aquatic center, sky lounge, concierge, on-site parking and common area seating.

© 2015 CBRE, Inc.

Sale Land - Retail/Commercial No. 4Property Name Power StudiosAddress 3711 N.E. 2nd Avenue



Govt./Tax ID 01-3219-019-0370




Site Development Status N/AShape RectangularTopography Generally LevelUtilities Available to site

Maximum FAR 2.33Min Land to Bldg Ratio 0.43:1

Maximum Density N/A

Frontage Distance/Street 104 ft NE 2nd AvenueFrontage Distance/Street 109 ft Interstate 95

General Plan Luxury boutique retailSpecific Plan Retail & Banquet HallZoning T6-12 O, Urban Core


Sale Summary

Recorded Buyer Power Design District LLC Marketing Time N/ATrue Buyer Wharton Equity Partners Buyer Type DeveloperRecorded Seller 3711 Design District, LLC Seller Type Private InvestorTrue Seller Lyle Chariff, Mauricio Zapata & Leonard Abess Primary Verification Lyle Chariff, Chariff Realty Group

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use Vacant Date 6/8/2015Proposed Use 2-Story Retail/Entertainment Sale Price $14,000,000Listing Broker Lyle Chariff, Chariff Realty Group Financing Cash to SellerSelling Broker N/A Cash Equivalent $14,000,000Doc # 29651/2925 Capital Adjustment $0


Transaction Summary plus Five-Year CBRE View HistoryTransaction Date Transaction Type Buyer Seller Price Cash Equivalent Price/sf06/2015 Sale Power Design District LLC 3711 Design District, LLC $14,000,000 $53005/2013 Sale 3711 Design District, LLC Power Wallack Real

Estate$8,000,000 N/A

© 2015 CBRE, Inc.

Sale Land - Retail/Commercial No. 4Units of Comparison

$1,236.14 / sf N/A / Unit



Financial


Map & Comments

This comparable land sale is the site of the former Power Studios that was previously acquired by Ross Power and David Wallach (Mango's Tropical Cafe on Miami Beach) in 1989 for $90,000 and then resold in May 2013 to the 3711 Design District LLC partnership for $8,000,000 who subsequently demolished the building that dated back to 1925. The property was then re-listed in January 2014 $16,000,000 or $1,411-PSF. The site is the first lot on the north side of Interstate 95 when you pass through the underpass on N.E. 2nd Avenue and enter the Design District. There is also a highway billboard pole & sign on-site.

The more recent resale is to an affiliate of Wharton Equity Partners, a New York based real estate company operated by Peter C. Lewis and David E. Eisenberg who are currently developiing District 36, a 500,000-Sf mixed-use residential project in Midtown, just south of the Design District. The acquisition of the Power Studios site included construction plans, designs by Touzet Studio, entitlements for 26,398-SF in a 2-story retail & banquet building, signed construction bids and permits for a "ready-to-go" development.

© 2015 CBRE, Inc.

Sale Land - Mixed-Use No. 5Property Name 6th & WashingtonAddress 601-685 Washington Avenue

Miami Beach, FL 33139United States


Govt./Tax ID N/A




Site Development Status FinishedShape RectangularTopography Other(See Comments)Utilities Available to site

Maximum FAR 1.62Min Land to Bldg Ratio 0.62:1

Maximum Density 41.81 per ac

Frontage Distance/Street 549 ft Washington AveFrontage Distance/Street 133 ft 6th StreetFrontage Distance/Street 130 ft 7th StreetFrontage Distance/Street 519 ft Collins Court - Alley

General Plan Mixed-use retail/residential & parkingSpecific Plan Mixed-use retail/residential & parkingZoning CD-2, Commercial (See Comments)

Entitlement Status Other (See Comments)

Sale Summary

Recorded Buyer IC 601 Washington, LLC Marketing Time N/ATrue Buyer Eric Birnbaum Buyer Type DeveloperRecorded Seller Washington Squared, LLC Seller Type Private InvestorTrue Seller Andrew Joblon, Managing Member Primary Verification Contract & Appraisal on-file

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use Obsolete strip retail Date 6/23/2015Proposed Use Mixed-use retail, residential & parking Sale Price $55,500,000Listing Broker N/A Financing Cash to SellerSelling Broker N/A Cash Equivalent $55,500,000Doc # See Comments Capital Adjustment $2,000,000


Transaction Summary plus Five-Year CBRE View HistoryTransaction Date Transaction Type Buyer Seller Price Cash Equivalent Price/sf06/2015 Sale IC 601 Washington, LLC Washington Squared, LLC $55,500,000 $497

© 2015 CBRE, Inc.


$836.12 / sf $871,212 / Unit



Financial


Map & Comments

This comparable land sale is improved with seven (7) existing 1 & 2 story retail store buildings fronting Washington Avenue between 6th Street and 7th Street in the Flamingo Park Historic District on Miami Beach that were owned or were “in contract” to Washington Squared, LLC, as part of an assemblage for mixed-use redevelopment for a total purchase price of $40,210,436, including lease buyouts, exiting debt & real estate commission obligations to the buyer. The assembled site area totals 68,770 square feet of medium intensity zoned land area that is improved with approximately 63,601 square feet of obsolete retail store building area dating to 1934, 1936 & 1948. The proposed redevelopment is conceptually site planned for 55,120 square feet of ground floor retail, plus 66-residential condominium units with 56,525 square feet or an average of 856-SF of living area per unit in a 9-story tower and 2-levels of structured parking with 240 spaces. In addition, there are several other redevelopment scenario options including a potential hotel tower instead of the residential condominium units.

The majority of the contracts, excluding 619-627 Washington Avenue, all closed simultaneously in the third week of June 2015. In addition to the assemblage purchase price, the buyer/investor, Washington Squared, LLC was able to negotiate & execute a membership interest purchase & sale to IC 601 Washington LLC, dated May 27, 2015. The forward purchase price is $55,500,000 for a 96.5% interest in a joint venture agreement between the seller & purchaser. The seller retains a 3.5% interest in the joint venture valued at $2,000,000, for a total purchase price valued at $57,500,000 for 100% interest in the joint venture partnership.

Part of the assemblage strategy was the Washington Avenue Vision and Master Plan being developed with a Washington Avenue Blue Ribbon Panel (WABRP) that was recommending to increase building height restrictions. The WABRP was recommending a FAR as high as 2.75, subject to municipal government approvals, versus the current zoning of CD-2, Commercial, Medium Intensity District permits a maximum floor area ratio (FAR) of 1.50, plus Code Section 142-307(d) 2.0 FAR where more than 25% of the building is used for residential or hotel units.

© 2015 CBRE, Inc.

Sale Land - Mixed-Use No. 6Property Name Brickell PlazaAddress 842 Brickell Plaza (S.E. 1st Avenue)



Govt./Tax ID 01-0205-050-1020, 1010, 1120 & 1110




Site Development Status N/AShape IrregularTopography Level, At Street GradeUtilities Available to site


Maximum Density N/A

Frontage Distance/Street N/A S.E. 8th StreetFrontage Distance/Street N/A Brickell Plaza (S.E. 1st Avenue)

General Plan N/ASpecific Plan N/AZoning T6-48b O, Urban Core Open


Sale Summary

Recorded Buyer Watson Investigations, LLC (Oleg Baibakov) Marketing Time N/ATrue Buyer N/A Buyer Type Foreign InvestorRecorded Seller Ambassa Holdings, Inc. & The Beacon at

Brickell VillageSeller Type N/A

True Seller N/A Primary Verification Juan Loumiet, Attorney for buyer, bankruptcy filings & media releases

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use Obsolete restaurant & parking lot Date 4/30/2014Proposed Use Residential tower Sale Price $28,500,000Listing Broker N/A Financing Cash to SellerSelling Broker N/A Cash Equivalent $28,500,000Doc # 29135/3777 & 28743/1179 Capital Adjustment N/A


Transaction Summary plus Five-Year CBRE View HistoryTransaction Date Transaction Type Buyer Seller Price Cash Equivalent Price/sf04/2014 Sale Watson Investigations,

LLC (Oleg Baibakov)Ambassa Holdings, Inc. & The Beacon at Brickell Village

$28,500,000 N/A

04/2014 Sale Watson Investigations, LLC (Oleg Baibakov)

Ambassa Holdings, Inc. & The Beacon at Brickell Village

$28,500,000 N/A

© 2015 CBRE, Inc.


$769.73 / sf $67,059 / Unit



Financial


Map & Comments

This comparable land sale comprises four (4) parcels that were assembled in two (2) seperate transactions. The first part was the $21,500,000 (3 folios totaling 0.671-acre) winning bid on the former Beacon at Brickell Village site as a result of local developer, Renzo Renzi bankruptcy proceedings who had received a Major Use Special Permit (M.U.S.P.) in November 2001, as per C.C. Resolution Number 01-1232. The proposed development program was approved for a 36-story, 228 unit residential tower, providing a total allowable building area of 226,917 SF. At the time of sale this portion of the site was improved with an obsolete & fire damaged restaurant with fenced parking lot on the corner of S.E. 8th Street (Calle Ocho) and S.E. 1st Avenue (Brickell Plaza), one block off-Brickell. Renzo Renzi had previously assembled the site in 2002 & 2005 for $4,233,000. The second part of the transaction was for a $7,000,000 sale price from Ambassa Holdings Inc. for a 9,148-SF site improved with a 2,819-SF building occupied and operating as a Chicken Kitchen fast food restaurant. The seller had previously acquired this property in December 2004 for $1,870,000. Even though the Renzo Renzi parcel was acquired out of bankruptcy, it is one of the highest prices paid per square foot within the Brickell submarket. The buyer will likely have to go through the approval process again given the outdated MUSP and expanded site area through assemblage. The site is located within the Brickell quadrant and according to Miami 21 zoning can be developed to a density of 500 units per acre.

© 2015 CBRE, Inc.

Sale Land - Hotel/Motel No. 7Property Name Cambria Suites Hotel - LandAddress 145 - 165 SW 12th Street



Govt./Tax ID 01-0208-050-1020; 1021 & 1022




Site Development Status N/AShape RectangularTopography Generally LevelUtilities All Available


Maximum Density N/A

Frontage Distance/Street 150 ft SW 12th Street

General Plan N/ASpecific Plan N/AZoning T6-24 O


Sale Summary

Recorded Buyer CS Brickell LLC (South Side Park Holdings) Marketing Time N/ATrue Buyer N/A Buyer Type DeveloperRecorded Seller Brickell Park, LC Seller Type N/ATrue Seller N/A Primary Verification Buyer's representative

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use 3, 2-Story Apartments Date 7/3/2014Proposed Use 206-Unit Hotel Sale Price $9,500,000Listing Broker N/A Financing Cash to SellerSelling Broker N/A Cash Equivalent $9,500,000Doc # 29220-0929 Capital Adjustment $388,084


Transaction Summary plus Five-Year CBRE View HistoryTransaction Date Transaction Type Buyer Seller Price Cash Equivalent Price/sf07/2014 Sale CS Brickell LLC (South

Side Park Holdings)Brickell Park, LC $9,500,000 N/A

© 2015 CBRE, Inc.

Sale Land - Hotel/Motel No. 7Units of Comparison

$439.47 / sf $48,000 / Unit



Financial


Map & Comments

This is the sale of a 0.52-acre or 22,500 SF site located along the north side of S.W. 12th Street, just east of S.W. 2nd Avenue, within the Brickell Financial District of Miami, Miami-Dade County, Florida. The property is currently improved with three, two-story apartment buildings. The property is proposed for a 21-story, 206-unit hotel development that will be operated by Cambria Suites Brickell. The proposed development will consist of 179,278 SF of buildable area, including garage area. The property transferred on July 3, 2014 for $9,500,000 ($52.99/SF of buildable area or $422.22/SF of land area) based on land value. There was a 60-day inspection period and a 30 day closing date indicating an overall 90 days to close. This was an all-cash transaction and is considered to be arm’s length It should be noted that in order to proceed with the proposed development program indicated within this report, the owner/developer will need to purchase additional 21,778 SF of FLR. In the City of Miami, property owners are allowed to purchase into the public benefit bonus program in order to maximize the development potential at the site. The current price for additional FLR at the property's location is $17.82 PSF. Therefore, the total adjusted sales price is $9,888,084 ($55.16/SF of building area $439.47/SF of land area).

© 2015 CBRE, Inc.

Sale Land - Hotel/Motel No. 8Property Name Starlite East Motel Site - Land (As per Zoning)Address 128 SW 7th Street



Govt./Tax ID 01-0205-020-1030




Site Development Status N/AShape RectangularTopography Generally LevelUtilities All Available


Maximum Density N/A

Frontage Distance/Street 150 ft SW 7th StreetFrontage Distance/Street 150 ft SW 8th Street

General Plan N/ASpecific Plan N/AZoning T6-24 O


Sale Summary

Recorded Buyer Optimum USA Investments 6, LLC Marketing Time N/ATrue Buyer N/A Buyer Type Foreign InvestorRecorded Seller Rafer Enterprises, Inc. Seller Type N/ATrue Seller N/A Primary Verification P&S Agreement, Contract Addendum &

Assignment document

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use Motel Date 12/10/2014Proposed Use TBD Sale Price $26,200,000Listing Broker Keller Williams Financing Cash to SellerSelling Broker N/A Cash Equivalent $26,200,000Doc # 29427/1539 Capital Adjustment $-3,500,000


Transaction Summary plus Five-Year CBRE View HistoryTransaction Date Transaction Type Buyer Seller Price Cash Equivalent Price/sf12/2014 Sale Optimum USA

Investments 6, LLCRafer Enterprises, Inc. $26,200,000 N/A

© 2015 CBRE, Inc.

Sale Land - Hotel/Motel No. 8Units of Comparison

$521.84 / sf $113,500 / Unit



Financial


Map & Comments

This is the sale of a 1.0-acre or 43,500 SF site located betwen SW 7th Street and SW 8th Street about 100 feet west of SW 1st Avenue and about 2 blocks west of the large CityCentre development. The property is currently improved with a functional motel that, according to documentation supplied by the buyer, throws off $1,748,811 in NOI. There are no permits or approvals in place for future development. As per zoning for T6-24 O, the property could be developed with 304,500 SF of as-of-right development or 395,850 SF including a 30% bonus. The property is also a candidate fior an up-zoning since it is greater then 40,000 SFPending Sale: The property is reportedly in contract to be sold. The property was originally contracted to be sold from Rafer Enterprises, Inc. as seller to Fernando Arias, Andrei Gordienko and/or Assigns as buyer for a purchase price of $18,000,000. That Purchase & Sale Agreement is dated October 20, 2014. Addendum to Contract: According to an Addendum to Contract, dated November 14, 2014, the purchase price was amended and increased to $20,400,000. Assignment of Contract: According to an Assignment Agreement dated November 18, 2014, the contract of sale was assigned from Fernando Arias, Andrei Gordienko and/or Assigns to Optimum USA Investments 6, LLC. The Assignment price to be paid by Assignee to Assignor for this assignment is to be the sum of $5,800,000 plus reimbursement of the contract deposit of $700,000 for an aggregate assignment price of $6,500,000. The total purchase price including the assignment is $26,200,000. However, we estimate two years of interim income ($3,500,000 Rd.) during the period to potentially pursue an up-zoning and attain permits and construction financing. Therefore, the adjusted value of the land is $22,700,000 or $522 PSF of land area, $75.55 PSF of as-of-right FLR and $57.34 PSF of FLR including bonuses.

© 2015 CBRE, Inc.

Sale Land - Mixed-Use No. 9Property Name 170 NE 38th StreetAddress 170 NE 38th Street



Govt./Tax ID 01-3124-022-0120




Site Development Status FinishedShape RectangularTopography Level, At Street GradeUtilities Available to site


Maximum Density N/A

Frontage Distance/Street N/A NE 38th StreetFrontage Distance/Street N/A NE 1st Court

General Plan Luxury boutique retail & mixed-useSpecific Plan TBDZoning T6-12 O, Urban Core


Sale Summary

Recorded Buyer Design Stage LLC Marketing Time N/ATrue Buyer Arnaud Sitbon, ESJ Capital Partners, LLC Buyer Type DeveloperRecorded Seller 38th Street DD, LLC Seller Type DeveloperTrue Seller Arnaud Karsenti & Avra Jain Primary Verification Lyle Chariff & Mauricio Zapata

Interest Transferred Fee Simple/Freehold Type SaleCurrent Use Obsolete office/warehouse Date 6/1/2015Proposed Use Mixed-use Sale Price $6,900,000Listing Broker Chariff Realty Group Financing All CashSelling Broker N/A Cash Equivalent $6,900,000Doc # 29640/1908 Capital Adjustment $0


Transaction Summary plus Five-Year CBRE View HistoryTransaction Date Transaction Type Buyer Seller Price Cash Equivalent Price/sf06/2015 Sale Design Stage LLC 38th Street DD, LLC $6,900,000 N/A

© 2015 CBRE, Inc.


$673.17 / sf N/A / Unit


N/A / Building Area

Financial


Map & Comments

This comparable land sale is improved with an 3,224-SF obsolete office/warehouse built in 1947 that was recently occupied & vacated by the Stage nightclub. The sellers previously acquired the property in October 2012 for $2,000,000 as a speculative investment as the Design District was just starting to emerge, but yet to be developed. This site is on a less desirable side street location, but across the street from the Palm Court parking garage. The buyer is a private equity and development firm based in Aventura who intends on demolishing the improvements and redeveloping the site to a higher & better use. The broker reported a quiet & quick transaction between buyer & seller.

© 2015 CBRE, Inc.

Property Information

Folio: 01-3219-014-0011

Property Address: 4005 NE 2 AVE

OwnerSCHOOL BOARD OF MIAMI-DADE COUNTY

Mailing Address1450 NE 2 AVEMIAMI , FL 33132-1308

Primary Zone 8000 COMMUNITY FACILITIES

Primary Land Use8348 BOARD OF PUBLIC INSTRUCTION : BOARD OF PUBLIC INSTRUCTION

Beds / Baths / Half 0 / 0 / 0

Floors 1

Living Units 0

Actual Area Sq.Ft

Living Area Sq.Ft

Adjusted Area 101,224 Sq.Ft

Lot Size 73,121 Sq.Ft

Year Built 1938

Assessment Information

Year 2015 2014 2013

Land Value $2,486,114 $1,243,057 $1,243,057

Building Value $1,281,126 $1,254,920 $1,277,593

XF Value $285,036 $288,589 $292,144

Market Value $4,052,276 $2,786,566 $2,812,794

Assessed Value $3,065,222 $2,786,566 $2,812,794

Benefits Information

Benefit Type 2015 2014 2013

Non-Homestead Cap

Assessment Reduction

$987,054

Board of Public Instr.

Exemption $3,065,222 $2,786,566 $2,812,794

Note: Not all benefits are applicable to all Taxable Values (i.e. County, School Board, City, Regional).

Taxable Value Information

2015 2014 2013

County

Exemption Value $3,065,222 $2,786,566 $2,812,794

Taxable Value $0 $0 $0

School Board

Exemption Value $4,052,276 $2,786,566 $2,812,794


City

Exemption Value $3,065,222 $2,786,566 $2,812,794


Regional

Exemption Value $3,065,222 $2,786,566 $2,812,794


Detailed ReportGenerated On : 8/27/2015

The Office of the Property Appraiser is continually editing and updating the tax roll. This website may not reflect the most current information on record. The Property Appraiser and Miami-Dade County assumes no liability, see full disclaimer and User Agreement at http://www.miamidade.gov/info/disclaimer.asp

Version:

Page 1 of 5Property Search Application - Miami-Dade County

8/27/2015http://www.miamidade.gov/propertysearch/© 2015 CBRE, Inc.

Generated On : 8/27/2015


Folio: 01-3219-014-0011


Roll Year 2015 Land, Building and Extra-Feature DetailsLand Information

Land Use Muni Zone PA Zone Unit Type Units Calc Value

GENERAL CI 8000 Square Ft. 73,121.00 $2,486,114

Building Information

Building Number Sub Area Year Built Actual Sq.Ft. Living Sq.Ft. Adj Sq.Ft. Calc Value

1 1 1938 28,034 $570,716

1 2 1938 25,216 $113,815

2 1 1947 23,987 $488,327

2 2 1947 23,987 $108,268

Extra Features

Description Year Built Units Calc Value

Cent A/C - Comm (Aprox 300 sqft/Ton) 1981 50 $51,750


STL/GD Fence 1981 143 $839

Plumbing Fixtures - Warehouse 1981 22 $20,636


Sprinkler System/Auto - Wet 1981 28,500 $29,498


Light Standard - 10-30 ft High - 1 Fixture 1981 4 $2,484

Patio - Brick, Tile, Flagstone 1981 15,000 $82,200

Wall - CBS unreinforced 1981 1,400 $3,864


Version:





Folio: 01-3219-014-0011







1 1 1938 28,034 $554,457

1 2 1938 25,216 $115,847

2 1 1947 23,987 $474,415

2 2 1947 23,987 $110,201

Extra Features









STL/GD Fence 1981 143 $851




Version:





Folio: 01-3219-014-0011







1 1 1938 28,034 $564,538

1 2 1938 25,216 $117,880

2 1 1947 23,987 $483,041

2 2 1947 23,987 $112,134

Extra Features




STL/GD Fence 1981 143 $863









Version:





Folio: 01-3219-014-0011


Full Legal Description

WALTONS SUB A RESUB PB 39-96

LOTS 1 & K & LOTS 5 THRU 8 OF

MAGNOLIA PARK AMD PL PB 4-150

LOT SIZE IRREGULAR

OR 14379-930 1289 3

Sales Information

Previous Sale Price OR Book-Page Qualification Description

06/01/1985 $4,500,000 99999-9999 Qual on DOS, but significant phy change since time of transfer

06/01/1985 $4,500,000 11111-0000 2008 and prior year sales; Qual by exam of deed


Version:



64 MOODY’S ANALYTICS / Précis® U.S. Metro / South / July 2015

ANALYSIS

EMPLOYMENT GROWTH RANK VITALITY2014-2016

RELATIVE COSTSLIVING BUSINESS2014-2019 RELATIVE RANK

Best=1, Worst=401Best=1, Worst=408 U.S.=100%

STRENGTHS & WEAKNESSES

U.S.=100%

SHORT TERM

FORECAST RISKS

LONG TERM

RISK EXPOSURE 2015-2020

BUSINESS CYCLE STATUS

MOODY’S RATING

ECONOMIC DRIVERS

Highest=1Lowest=401

ECONOMIC & CONSUMER CREDIT ANALYTICS

[email protected]

LOGISTICS

TOURIST

DESTINATION

FINANCIAL

CENTER

$ £€

COUNTYAS OF JUN 03, 2015Aa2

2009 2010 2011 2012 2013 2014 INDICATORS 2015 2016 2017 2018 2019 2020 104.8 104.3 104.5 106.5 108.3 110.9 Gross metro product (C09$ bil) 114.4 119.1 123.6 127.9 131.5 134.6 -6.0 -0.6 0.2 1.9 1.7 2.4 % change 3.1 4.1 3.8 3.5 2.8 2.4 988.6 985.1 1,007.3 1,031.3 1,056.7 1,087.7 Total employment (ths) 1,115.9 1,150.1 1,187.8 1,214.9 1,228.7 1,233.9 -5.6 -0.3 2.3 2.4 2.5 2.9 % change 2.6 3.1 3.3 2.3 1.1 0.4 10.4 11.1 9.5 8.4 7.6 6.8 Unemployment rate (%) 6.0 5.2 4.5 4.2 4.2 4.4 -3.5 5.3 7.1 4.2 2.0 5.9 Personal income growth (%) 6.2 7.4 8.0 7.3 5.5 4.8 41.2 40.5 40.3 40.9 41.9 43.7 Median household income ($ ths) 45.2 46.9 49.2 51.4 53.1 54.6 2,463.9 2,508.7 2,579.9 2,611.0 2,641.9 2,662.9 Population (ths) 2,696.2 2,732.6 2,772.4 2,813.9 2,855.9 2,898.0 1.1 1.8 2.8 1.2 1.2 0.8 % change 1.3 1.3 1.5 1.5 1.5 1.5 13.4 31.1 58.1 17.8 17.8 11.6 Net migration (ths) 23.3 26.4 29.8 31.6 32.3 32.5 624 941 962 1,819 2,266 2,077 Single-family permits (#) 2,800 4,638 6,056 6,403 6,552 6,638 771 2,262 1,656 3,250 8,050 5,654 Multifamily permits (#) 17,229 16,797 14,071 9,838 9,043 9,097 210.8 196.0 183.6 186.7 208.5 234.1 FHFA house price (1995Q1=100) 252.8 260.0 264.2 263.9 263.6 266.8

Recent Performance. The economy in Mi-ami-Miami Beach-Kendall is showing signs of weakness. The area’s unemployment rate has not budged over the last six months, and hourly wages and weekly hours worked have taken a step backward during that time. According to CoreLogic, house prices rose by only a fraction in May, and growth has slowed for four consecutive months. House price growth in MIA is partially constrained by the share of the area’s homes in foreclosure, which is the highest in the South. But home sales are a bright spot; according to the Miami Association of Realtors, the area set a record for single-family home sales in June.

Financial services. Job growth in MIA’s piv-otal financial services industry will maintain a healthy pace over the next several years. After dipping to a 20-year low in 2010, employment has fully rebounded. More employees work in fi-nancial services than at any previous time in the area’s history. These positions, which pay 50% more than the typical job in MIA, are a critical component of the recovery because they sup-port industries that service the local economy such as homebuilding, retail and healthcare.

Financial services will expand because MIA is the operational financial capital of Latin Ameri-ca, and the largest economies in that region will hit the bottom of a cyclical downturn this year. Though 2015 will be a year of almost no growth for Latin America, the next two years will bring a mild recovery. Warmer diplomatic relations between the U.S. and Cuba should provide addi-tional opportunities for MIA’s financial industry. The area’s financial institutions will also ben-efit from increased foreign trade through Latin America as a result of the Trans-Pacific Partner-ship. Speedier economic growth throughout the Caribbean, Central America and South America brightens the prospects for financial services in MIA.

Population growth. Last year, MIA added residents at the slowest rate since 2007, but this rate will accelerate over the next five years. Faster gains are likely because growth is originating with Hispanic residents, who make up the nation’s fastest-growing demographic group. In 2013 and 2014, MIA added more Hispanic residents than during any two-year period since 2000-2001, and the area’s total population would have declined in each of the last two years if not for strong in-migration of Latinos. Across the nation, Latinos constitute 17% of the U.S. population, but they accounted for 49% of U.S. population growth last year. MIA will sustain above-average population growth because it will remain attractive to the fastest-growing segment of the U.S. population.

Miami Worldcenter. Construction employ-ment in MIA is about to accelerate. Project man-agers at the massive Worldcenter development on the north end of downtown have begun host-ing job fairs for local builders and contractors. The first phase of the development, which should be completed by 2018, is projected to support at least 10,000 jobs from various building trades. Developers have promised to give preferential employment to inner-city residents who live in the shadow of the project. The first phase of the $1.7 billion development will include an 1,800-room Marriott Marquis, a 765,000-square-foot mall anchored by Bloomingdale’s and Macy’s, and 899 residential units.

In the near term, growth in Miami-Miami Beach-Kendall will outpace that of the na-tion thanks to strength in finance, retail and construction. Over the forecast horizon, MIA’s international character, combined with its high-skilled, bilingual workforce, will help growth in household income outperform that of the nation.

Kwame DonaldsonJuly 2015

MIAMI-MIAMI BEACH-KENDALL FL Data Buffet® MSA code: IUSA_DMMIA

Expansion

�� RECOVERY ��

At Risk

Moderating Recession

In Recession

STRENGTHS » Strong ties to Latin America. » Luxury status attracts international capital. » International trade poised to accelerate. » Well-developed shipping and distribution

infrastructure.

WEAKNESSES » High household debt burden. » Congested roads and airport. » Industrial structure that leaves economy

susceptible to business cycle downturns.

UPSIDE » International ties boost construction, finance and

trade by more than expected. » Commercial development and transit hub shift

MIA’s growth path upward. » Stronger population growth.

DOWNSIDE » Foreclosures undermine house prices. » International immigration weakens. » Strong dollar restrains international tourism.

X X

82 2nd quintile

62115%111%108%41 1st quintile

56 1st quintile

© 2015 CBRE, Inc.

MOODY’S ANALYTICS / Précis® U.S. Metro / South / July 2015 65

13

28

29

1811

ECONOMIC HEALTH CHECK BUSINESS CYCLE INDEX

RELATIVE EMPLOYMENT PERFORMANCE

CURRENT EMPLOYMENT TRENDS HOUSE PRICE

VACANCY RATES

Sources: Census Bureau, ACS, Moody’s Analytics, 2013

Source: Moody’s Analytics

Sources: FHFA, Moody’s AnalyticsSources: BLS, Moody’s AnalyticsSources: BLS, Moody’s Analytics

Sources: BLS, Moody’s Analytics

EDUCATIONAL ATTAINMENT POPULATION BY AGE, %BUSINESS COSTS

Source: Moody’s Analytics

JAN 2002=100

% CHANGE YR AGO

U.S.

Total

Unit labor

Energy

State and local taxes

Offi ce rent

% OF ADULTS 25 AND OLDERU.S.=100 ≥7570-7465-69 60-64 55-59 50-5445-49 40-4435-3930-3425-2920-2415-1910-145-90-4< High school High school

Some college CollegeGraduate school

JAN 2005=100

Government Goods producing Private services

100%

80%

60%

40%

20%

0%

1998Q1=100, NSA

HOMEOWNER, % HOUSES FOR SALE

Better than prior 3-mo MA Unchanged from prior 3-mo MA Worse than prior 3-mo MASources: BLS, Census Bureau, Moody’s Analytics

3-MO MA

RENTAL, % INVENTORY FOR RENT

2008 2013

Sources: Census Bureau, Moody’s Analytics, 2013 Sources: Census Bureau, Moody’s Analytics, 2013

MIA FL U.S.

0 2 4 6 8 10 12

0 1 2 3 4

MIA FL U.S.

9095

100105110115120125130

05 06 07 08 09 10 11 12 13 14 15F 16F 17F 18F 19F 20F 21F 22F 23F 24F

MIA

MIA FL U.S.

50

100

150

200

250

300

350

98 01 04 07 10 13

MIA FL U.S.

95

100

105

110

115

120

125

06 09 12 15

2006 2011

0 20 40 60 80 100 120 140

Total

Unit Labor

Energy

State and local taxes

Office rent

0 1 2 3 4 5 6 7 8

13

29

30

1810

20

29

25

179

Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15Employment, change, ths 3.5 2.6 2.5 1.9 1.4 0.4Unemployment rate, % 6.2 6.1 6.0 6.0 6.2 6.3Labor force participation rate, % 61.5 61.5 61.4 61.2 60.9 60.6Employment-to-population ratio, % 57.7 57.7 57.7 57.5 57.2 56.8Average weekly hours, # 35.2 35.0 35.1 35.0 34.9 34.8Industrial production, 2007=100 101.7 101.6 101.5 101.4 101.1 100.9Residential permits, single-family, # 2,291 2,102 2,224 2,650 2,374 2,547Residential permits, multifamily, # 10,735 11,899 15,431 10,073 10,364 8,288

% CHANGE YR AGO, 3-MO MA Oct 14 Feb 15 Jun 15Total 3.3 3.4 2.7Construction 12.9 7.4 0.6Manufacturing 3.0 2.1 1.0Trade 3.0 2.9 2.7Trans/Utilities 3.7 3.3 3.7Information 3.6 2.7 1.6Financial Activities 5.3 4.3 4.4Prof & Business Svcs. 4.2 4.7 2.8Edu & Health Svcs. 3.2 4.9 4.0Leisure & Hospitality 3.4 4.2 5.0Other Services 5.1 5.2 3.4Government -1.3 -1.2 -1.2

-15

-10

-5

0

5

10

11 12 13 14 15

PRÉCIS® U.S. METRO SOUTH �� Miami-Miami Beach-Kendall FL

MIA FL U.S.

© 2015 CBRE, Inc.

Sources: IRS (top), 2011, Census Bureau, Moody’s AnalyticsSources: Percent of total employment — BLS, Moody’s Analytics, 2014, Average annual earnings — BEA, Moody’s Analytics, 2013

66 MOODY’S ANALYTICS / Précis® U.S. Metro / South / July 2015

EMPLOYMENT & INDUSTRY MIGRATION FLOWS

COMPARATIVE EMPLOYMENT AND INCOME

PER CAPITA INCOME

Due to U.S. fl uctuations Relative to U.S.

TOP EMPLOYERS

PUBLIC

INDUSTRIAL DIVERSITY

EMPLOYMENT VOLATILITY

Sector % of Total Employment Average Annual Earnings

Due to U.S.

Most Diverse (U.S.)

Least Diverse

MiningConstructionManufacturing Durable NondurableTransportation/UtilitiesWholesale TradeRetail TradeInformationFinancial ActivitiesProf. and Bus. ServicesEduc. and Health ServicesLeisure and Hosp. ServicesOther ServicesGovernment

Not due to U.S.

Sources: BEA, Moody’s Analytics

MID

LOW

HIG

H

NET MIGRATION, #

$ THS

LEADING INDUSTRIES BY WAGE TIER

Ths % of total

Ths % of total

HIGH-TECH EMPLOYMENT

HOUSING-RELATEDEMPLOYMENT

Source: Moody’s Analytics, 2014

0%

20%

40%

60%

80%

100%

97

MIA U.S.

100

139

0.00

0.20

0.40

0.60

0.80

1.00

0.62

INTO MIAMI FLNumber of

MigrantsFort Lauderdale FL 24,398New York NY 5,101Tampa FL 3,895West Palm Beach FL 3,813Orlando FL 3,482Atlanta GA 2,407Cape Coral FL 1,880Jacksonville FL 1,275Naples FL 1,060Los Angeles CA 1,042Total in-migration 86,376

FROM MIAMI FLFort Lauderdale FL 30,191New York NY 3,818West Palm Beach FL 3,702Orlando FL 3,444Tampa FL 3,137Atlanta GA 2,330Cape Coral FL 1,588Washington DC 1,083Jacksonville FL 1,062Houston TX 1,055Total out-migration 81,778

Net migration 4,598

Location Employees NAICS Industry Quotient (ths)

6211 Offices of physicians 1.2 23.65411 Legal services 2.6 22.0GVF Federal Government 1.0 20.15221 Depository credit intermediation 1.2 15.2GVL Local Government 0.9 99.66221 General medical and surgical hospitals 1.3 44.6GVS State Government 0.5 18.04811 Scheduled air transportation 4.6 14.37225 Restaurants and other eating places 1.0 78.67211 Traveler accommodation 2.1 28.84451 Grocery stores 1.2 25.45613 Employment services 0.7 19.2

Source: Moody’s Analytics, 2014

2011 2012 2013 2014Domestic 18,909 -17,993 -21,010 -27,175Foreign 39,202 35,830 38,795 38,734Total 58,111 17,837 17,785 11,559

Federal 19,533State 17,745Local 101,137

2014

MIA FL U.S. 0.0% 0.1% 0.6% 3.4% 5.1% 4.4% 3.5% 4.2% 8.8% 56.8% 67.1% 63.1% 43.2% 32.9% 36.9% 6.0% 3.2% 3.7% 6.7% 4.2% 4.2% 13.2% 13.3% 11.1% 1.7% 1.7% 2.0% 6.9% 6.7% 5.7% 14.0% 14.9% 13.7% 15.3% 14.8% 15.4% 11.9% 13.9% 10.6% 4.5% 4.1% 4.0% 12.7% 13.7% 15.7%

MIA FL U.S. $39,298 $23,498 $103,753 $50,688 $46,933 $60,444 $54,250 $65,938 $77,051 nd $70,180 $78,697 nd $57,988 $74,316 $58,075 $52,991 $64,339 $82,642 $77,516 $81,024 $35,661 $32,868 $33,130 $95,288 $77,912 $102,915 $42,769 $36,003 $52,549 $49,615 $49,782 $64,145 $51,436 $51,200 $51,580 $32,356 $27,909 $24,893 $26,356 $30,361 $35,425 $77,164 $69,501 $72,104

010,00020,00030,00040,00050,00060,00070,000

11 12 13 14

Net Migration, SA_

SA_ - $41,508 FL - $42,645 U.S. - $46,129

29

34

39

44

47

03 04 05 06 07 08 09 10 11 12 13 14 2014 MIA $41,508 FL $42,645 U.S. $46,129

MIA 98.1 9.0

U.S. 12,757.9 9.2

MIA 27.3 2.5

U.S. 6,553.6 4.7

PRÉCIS® U.S. METRO SOUTH �� Miami-Miami Beach-Kendall FL

Baptist Health Systems of Southern Florida 14,627University of Miami 13,428Publix Super Markets, Inc. 12,000Jackson Health System 10,010American Airlines 9,939Miami-Dade Community College 6,787AT&T 6,629Wells Fargo & Co. 5,100American Sales & Management 3,500Macy’s 3,368Miami Children’s Hospital 3,345Royal Caribbean Intl./ Celebrity Cruise 3,331Mount Sinai Medical Center 3,221JPMorgan Chase & Co. 3,200Florida Power & Light Co. 3,178Florida International University 3,132Carnival Cruise Lines 3,065Winn-Dixie Stores Inc. 3,000HCA 2,412Veterans Affairs Medical Center 2,300

Sources: Guide to Military Installations, 2011, South Florida Business Journal, 2014, The Beacon Council, April 2007

© 2015 CBRE, Inc.

© 2015, Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affi liates (collectively, “MOODY’S”). All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT. All information contained herein is obtained by Moody’s from sources believed by it to be accurate and reliable. Because of the possibility of human and mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. Under no circumstances shall Moody’s have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of Moody’s or any of its directors, offi cers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profi ts), even if Moody’s is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The fi nancial reporting, analysis, projections, observations, and other information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell, or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER. Each opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation prior to investing.

About Moody’s AnalyticsEconomic & Consumer Credit Analytics

Moody’s Analytics helps capital markets and credit risk management professionals worldwide respond to an evolving marketplace with confi dence. Through its team of economists, Moody’s Analytics is a leading independent provider of data, analysis, modeling and forecasts on national and regional economies, fi nancial markets, and credit risk.

Moody’s Analytics tracks and analyzes trends in consumer credit and spending, output and income, mortgage activity, population, central bank behavior, and prices. Our customized models, concise and timely reports, and one of the largest assembled fi nancial, economic and demographic databases support fi rms and policymakers in strategic planning, product and sales forecasting, credit risk and sensitivity management, and investment research. Our customers include multinational corporations, governments at all levels, central banks and fi nancial regulators, retailers, mutual funds, fi nancial institutions, utilities, residential and commercial real estate fi rms, insurance companies, and professional investors.

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QUALIFICATIONS OF THE APPRAISER

QUALIFICATIONS OF STUART J. LIEBERMAN, MAI Vice President Retail, Office, Industrial & Multi-Housing Specialist CBRE, Inc., Valuation and Advisory Services 777 Brickell Avenue, Suite 910 Miami, Florida 33131 (305) 381-6472 [email protected] EDUCATIONAL

BA, Political Science, University of South Florida, Tampa, Florida - 1985 Appraisal Institute, American Institute of Real Estate Appraisers, Society of Real Estate Appraisers and

Florida Real Estate Commission core courses, electives and seminars LEED for New Construction Technical Review Workshop – October 11, 2007

PROFESSIONAL LICENSES/CERTIFICATIONS

Registered Real Estate Broker – Associate - State of Florida BK - 0477878 Certified General Real Estate Appraiser – State of Florida RZ - 1074

PROFESSIONAL AFFILIATIONS MAI, Designation No. 12003

APPOINTMENTS Present Treasurer, North Orchard at Forest Ridge Home Owners Association EMPLOYMENT EXPERIENCE

Real Estate Appraisal and Consulting experience throughout the State of Florida and in the Caribbean.

2005 to Present CBRE, Inc., Valuation & Advisory Services Miami, FL 1995 to 2005 American Realty Consultants, Inc. Davie, FL 1986 to 1994 Clobus Valuation Co., Inc. Fort Lauderdale, FL 1986 M.J. Saxon & Associates Plantation, FL

© 2015 CBRE, Inc.

QUALIFICATIONS

QUALIFICATIONS OF JAMES E. AGNER, MAI, AI-GRS, SGA, MRICS Senior Managing Director – Florida/Caribbean National Director - Net Lease Valuation Group National Director – Golf Valuation Group CBRE, Inc., Valuation and Advisory Services 777 Brickell Avenue, Suite 900 Miami, Florida 33131 (305) 381-6480 EDUCATIONAL BS, Marketing, Florida State University, Tallahassee, Florida - 1981 Appraisal Institute Appraisal Institute Courses 1A and 1B. Attended numerous educational seminars sponsored by the

Appraisal Institute including Standards of Professional Practice, Market and Feasibility Studies for Shopping Centers, USPAP, Florida State Law, Public Safety and Property Values, Expert Witness Preparation & Testimony, Review Theory General, Business Practice & Ethics and Real Estate Valuation in the Appraisal Industry.

LICENSE(S)/CERTIFICATION(S) Registered Real Estate Broker-Salesman; State of Florida (No. BL0404088) Certified General Appraiser; State of Florida (No. RZ382) Certified General Real Property Appraiser; State of Georgia (No.345321) PROFESSIONAL Appraisal Institute - Designated Member (MAI), Certificate No. 7791 (1988) Appraisal Institute – General Review Specialist (AI-GRS), Certificate No. 69150 (2015)

Society of Golf Appraisers – Designated Member (SGA) Cert. No. 25 – 2005 Royal Institution of Chartered Surveyors - Designated Member (MRICS), Cert. No. 7505662 (2014)

Qualified Expert Witness

Circuit Courts - State of Florida United States Bankruptcy Courts

EMPLOYMENT EXPERIENCE Over thirty years of Real Estate Appraisal and Consulting experience throughout the State of Florida and in the Caribbean. 1995 - Present CBRE, Inc. – VAS – SMD Florida/Caribbean Miami, FL 4/95 to 10/95 Coastal Appraisal Services Naples, FL 1985 to 1995 Quinlivan Appraisal & Consulting South Miami, FL 1984 to 1985 Raymond Kaiser Engineer Ft. Lauderdale, FL 1981 to 1984 Florida Dept. of Transportation Ft. Lauderdale, FL

© 2015 CBRE, Inc.