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2011 04-04 CCP Board of Appeal & Equalization
1 � CITY OF BROOKLYN CENTER 2011 1 LOCAL BOARD OF APPEAL AND ' EQUALIZATION 1 APRIL 4, 2011 1 1 1 1 1 1 1 'i City of Brooklyn Center A Millennium Community April 4, 2011 Letter of Transmittal 2011 Local Board of Appeal and Equalization To The Honorable Mayor and City Council: As you know, each year the City Council is required by our Charter to sit as the Local Board of Appeal and Equalization. The purpose of this board is to review the work of the Office of the City Assessor and to hear valuation and classification appeals. The 2011 Local Board of Appeal and Equalization is scheduled to begin at 7:00 p.m. on Monday, April 4, 2011. In addition to the valuation notices mailed to all individual property owners on February 25, 2011, the City Clerk has published and posted notices of this meeting as required by state statute. The attached report is presented for your information. This report contains a review of the Board's powers and responsibilities, information from our office regarding the 2011 assessment and an overview of recent market activity. The issues before the Local Board of Appeal and Equalization are questions of estimated market value and classification of Brooklyn Center properties for the January 2, 2011 assessment for taxes payable in 2012. Respectfully submitted, Nancy J. Wojcik, S.A.M.A. _ City Assessor _ 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 w w w. cityolbrooklyncenter. org 2011 Brooklyn Center Local Board of Appeal and Equalization Meeting Agenda: 1. Meeting called to order, roll call (7:00 p.m.) 2. Local Board of Appeal and Equalization (LBAE) Certification Form: 3. The purpose of the Local Board of Appeal and Equalization. 4. Questions regarding the Local Board of Appeal and Equalization duties. 5. The Assessor's Report. 6. Questions regarding the assessment report. _r 7. Appearances by taxpayers with appointments. 8. Appearances by taxpayers without an appointment. 9. Consideration of written appeals. 10. Set date of Local Board of Appeal and Equalization reconvene meeting. 11. Adjourn 1 Local Board of Appeal and Equalization Certification Form The Local Board of Appeal and Equalization must sign and complete the LBAE Certification form for each meeting of the local board. Since all boards are required to comply with the training and quorum requirements, this form must be completed even if no appeals are heard. This form certifies that a quorum was present, with a majority of the voting members of the Local Board of Appeal and Equalization in attendance and that at least one of the members present has attended an appeals and equalization course approved by the Commissioner of Revenue within the last four years. If the above requirements are not met the meeting will become an open book meeting. Additional training of Local Board members will be offered on an ongoing basis but not until all local boards are completed. An addition, the Minnesota Department of Revenue states that they will be monitoring changes to "parcels owned by a member of the board, the spouse, parent, son or daughter of a board member, or property in which a board member has a financial or other interest in the property ". It is the recommendation that the board vote "no change" to avoid the appearance of having a conflict of interest, and forward the appeal to the county board. While making changes is not prohibited, these changes will be monitored and must be noted on the LBAE certification form. The Minnesota Department of Revenue will be conducting random surveys of persons who attended the local boards to monitor the public's perception of the board's performance. 2 ' Purpose of the Local Board of Appeal n Equalization p ppea and a The purpose of the Local Board of Appeal and Equalization is to provide a fair and objective forum for property owners to appeal their valuation or classification. One of the most important duties placed by law upon the governing body of a township or city is to serve as the Local Board of Appeal and Equalization. Effective actions taken by the local board may potentially make a direct contribution to attaining assessment equality. The goal of the Local Board of Appeal and Equalization should be to attempt to address property owners' issues efficiently, fairly and objectively. Always keep in mind that any changes made by the board must be substantiated by facts. Any value reductions must be justified because they have the effect of shifting the tax burden to other property in the jurisdiction. Minnesota Statutes, Section 274.01, provides that the governing body of each city or a duly appointed board will serve as the Local Board of Appeal and Equalization. This review is held each spring. The board has the responsibility to review the assessed valuation and classification of property within the city. This year's review is limited to the 2011 assessment; which affects taxes payable in 2012. Role of the Local Board in the Assessment Process The Local Board of Appeal and Equalization has the authority to change the valuation or classification of a property for the current assessment year (2011). Taxes or prior year assessments are not within the jurisdiction of the local board In order to make an informed decision on these two items, it is important to understand them. Excerpts from the Minnesota Revenue Local Board of Appeal and Equalization handbook have been enclosed to assist in the definition of market value and classification. 3 Limits of Authority for the Local Board of Appeal and Eaualization The authority of the board extends over individual parcels only. Changes of value are made to the estimated market value. No changes may be made by percentage, class, or property type. Changes in the aggregate assessment may be made by the state board of equalization. The total of all changes made by the local board of review must not reduce the aggregate assessment by more than 1 %. Should this occur, none of the changes of the local board of review will be accepted. This limitation does not apply to clerical corrections. The local board of review does not have the authority to reopen previous assessments. An example of this is the 2010 assessment for the taxes payable in 2011. Homeowner's that received their 2011 tax statement in March, 2011, are not able to appeal the 2010 estimated market value listed on the notice. Should the board wish to raise any assessment, the owner must be notified. It is necessary for a majority of the board be present for any valid board action to be taken. The board should carefully consider any cases where taxpayers feel aggrieved by the proposed assessment. All available evidence should be considered. The board then has authority to adjust the assessment as it deems just. The initial 2011 meeting s scheduled for April 4 2011. The board must complete 9 p p its work within 20 days or receive a written extension from the Commissioner of Revenue. Any actions taken after 20 days without an authorized extension will be invalid. The assessor's recommendation is to complete all board business at the first meeting, if possible. Should a second reconvene meeting be necessary, it must be held no later than Sunday, April 24, 2011. A tentative reconvene meeting date has been set for Monday, April 18, 2011. A motion to sustain the assessment or to adjust the assessment may be made upon completion of the discussion of each property or may be held until all appeals have been heard. 4 Review Procedures - 2011 Assessment Informal 1. Discuss assessment procedures and the valuation methodologies employed by the assessor's office. 2. Review market information, sales and property characteristics with the owner by phone or in the assessors office. 3. Provide the owner with nearby assessed values and /or sales of homes similar to the subject property. 4. Suggest the owner have a market analysis provided by a local Realtor. 5. Review by physically inspecting the property and recalculating the value based on characteristics gathered in the new inspection. 6. Discuss with the owner the valuation recommendation based on the review performed. Formal f 1. Local Board of Review / City Board of Equalization April 4, 2011 2. County Board of Equalization June 13, 2011. 3. Minnesota Tax Court _4. Abatement Summary The assessor's office will make every effort to resolve as many questions possible prior to the board. Those property owners still wishing to be heard at the board will be given an opportunity to express their individual concerns. The assessor's office will have an appraisal prepared for all properties where the owner has notified the assessor's office of their intent to appear at this year's board of review. A copy of this report will be provided to each board member and the property owner. Please remember that the issue at hand is the market value or classification of the property at hand, not the taxes. Cases that the board feels may be too difficult or complex to decide may be affirmed. The property owner will then have the opportunity to continue on to the County Board of Appeal and Equalization: 5 Hennepin County Board of Appeal and Equalization The 2011 County Board of Appeal and Equalization will be held beginning June 13, 2011. Taxpayers wishing to appear must have appealed to their local board of review and must register with the county no later than May 25, 2011. You must call in advance to be placed on the agenda, appointments are available by calling (612) 348 -7050. At the County Board level the county assessor's office will perform an independent appraisal of each property. Should a reduction to the assessment be indicated, it is offered to the owner. The county will also notify the owner if their review indicates either no change or an increase. At this point, the owner can accept the reduction, withdraw the appeal, or continue on, to be heard by the County Board of Equalization. Minnesota Tax Court For information regarding a tax court appeal, contact (651) 296 - 2806. Information is also available at the following link: httQ: / /www. henner)inattorney.ora/ Divisions/ AdministrationCiviI /TaxPetitions /tabid /58 /Def ault.aspx Abatements This is a process that allows assessors to correct a clerical or appraisal error only Application must be received by the assessor no later than December 31 for the year the taxes are payable. This is a discretionary process and decision of the assessor is final. The City of Brooklyn Center charges a $45.00 application fee for abatements when it is not an error of the assessment process. However, in most cases the assessor's office is able to inform the property owner prior to application if approval is likely. s Assessment Valuation Procedures Residential Open market sales occurring in the prescribed study period, October 1, 2009 through September 30, 2010, are analyzed by comparing them to the previous assessment and the preliminary assessment in process. Adjustments are then made either to the land values or to the computerized rate tables employed by the CAMA system in calculating the building values. This computer assisted mass appraisal system allows the assessor's office to value properties according to their individual characteristics. Examples of these characteristics include age, condition, size, style, amenities, functionality, and location. The preliminary final assessment is then analyzed statistically to ensure accuracy and uniformity. This process is greatly assisted by the relatively large sample of residential sales each year, giving the statistical analyses a high degree of reliability. The Brooklyn Center residential assessment falls well within all accepted _measurement guidelines for mass appraisal accuracy and uniformity. Hennepin County completes the assessment review by checking sample values, sales ratio measurements and the co- ' efficient of dispersion. The county requires a level of assessment that falls within the MN. Department of Revenue guidelines, and is fair and equitable within the county. Commercial / Industrial The valuation of these properties is primarily accomplished through an analysis of the rental market, potential income, and the sale market. What the investor's expectations are and the yield requirements for different market segments. These are two key questions where market activity can provide some guidance. The potential market (economic) income to a property is best estimated by analyzing recent leases, rental surveys, rental listings, and published data like the Minnesota Real Estate Journal and the NorthMarq Compass report. All of these sources and more have been employed by the assessor's office to ensure that the current assessed values follow the market as closely as possible. Sales data used is provided from a shared sales exchange program with Hennepin County that provides sale data, property characteristics and verified information on both open and non -open market transactions, within Anoka, Hennepin, Ramsey, and Carver ' County. Apartment The apartment assessment is based on a combination of market sale activity and analysis of the rental market. Even in years without adequate sale information, changes in rental rates and occupancy levels are valid, accurate measures of changes in market value. Apartments are sold primarily for their potential to generate future income for the ' buyer. Therefore, the analysis of the likely (economic) income is a proven and widely accepted approach to valuation. Apartment surveys are sent out annually to collect market trends in rental income and vacancy within the City of Brooklyn Center. Information regarding expenses and improvement costs are also included, to give a complete picture of the apartment market. r 2010 Re- Inspection Program for the 2011 Assessment During the summer of 2010 our office conducted property reviews within an area located south of 65 Avenue N., west of Shingle Creek and North of 59 Avenue N. to the western city limits. In addition, a portion of commercial, industrial, apartment and ' exempt properties were also included. The summer inspections began May 4, 2010, and included approximately 1,894 parcels. The quintile inspections were completed by the end of October. The re- inspections were performed by Nancy Wojcik, City Assessor, Jill Brenna, Appraiser, and Karen Casto Appraiser Technician. 9 COMPARISON OF THE BROOKLYN CENTER ASSESSED VALUE BY PROPERTY TYPE 2010 to 2012 TAX PAYABLE YEARS TOTAL PAY PERCENTAGE TOTAL PAY PERCENTAGE TOTAL PAY PERCENTAGE PROPERTY 2010 OF PAY 2010 2011 OF PAY 2011 2012 OF PAY 2012 TYPE VALUATION VALUE VALUATION VALUE VALUATION VALUE APARTMENT $177,305,000 9.42% $166,084,000 9.88% $169,771,000 10.37% COMMERCIAL $280,509,500 14.90 % $256,644,900 15.27% $248,335,400 16.17% INDUSTRIAL $134,967,900 7.17% $121,814,500 7.25% $117,814,100 7.20% RESIDENTIAL $1,289,874,400 68.51% $1,136,414,800 67.60% $1,101,261,800 67.26 % FARM $167,100 0.01% $167,100 0.01% $168,300 0.01 % TOTALS $1,882,823,900 $1,681,125,300 $1,637,340,600 NOTE: Payable 2012 valuation totals are based on values as of March 3, 2011. Residential taxable market value total for 2011 pay 2012 is $1,095,957,400. A total of .48% or $5,294,400 of the residential estimated market value is excluded from taxation due to the Veterans and "This Old House" exclusions. There are no longer any residential properties in Brooklyn Center receiving limited market value, 40 residential properties are receiving the Veterans Exclusion and 69 properties are receiving the "This Old House Exclusion" for taxes payable in 2012. Prepared by the Brooklyn Center Assessor's Office 10 3/29/2011 \p - NOR fhertkz�eter3ce�12912d11 ' City Wide - All (Includes all property types) -2.60% (Excluding new construction) -3.20% City Wide - Resid. (Single Family - Detached Only) -2.76% (Excluding new construction) - 2.92 % erc'a d u Seri y vi i , ,X r —� - = _- a r �� - � ...,., Vii. & � � 4 . AN VOW u \� m aF-1 21 Fl TRI mqq s. „> 60 A ll Res►den� v r _ #50 - #55 Residential Off Water -2.60% Vft - Res enl la Wate 10 '\BOAR DM11 R11 Change xlsx]2011 Change Res 11 BROOKLYNCTR - 2/7/2011 RESIDENTIAL STATISTICS SALES:100f7287 1.4% CONDO STATISTICS SALES:1 /157 0.6% APTS= A,HL,HL DIRECT RATIOS MEDIAN MEAN COD DIRECT RATIOS MEDIAN MEAN COD COM= C,GC,ND,NP,SC,SL,SM 2011 95.4% 96.3% 6.3 2011 94.6% 94.6% 0.0 FARM= BF,F,FF,FP,LF,LV 2010 97.2% 98.9% 7.9 2010 - 102.9% 102.9% 0.0 C/VA LAND= LA,LC,LI, RES LAND =LL,LR INFERRED RATIOS SALES GROWTH: -2.4% INFERRED RATIOS SALES GROWTH: -8.1% RES= B,BJ,D,DJ,P,R,RL OTHER = CHANGED PROP TYPE SAMPLE GROWTH: -2.7% PROP TYPE GROWTH: -2.9% SAMPLE GROWTH: -8.1% PROP TYPE GROWTH: -4.4% X MEDIAN: 94.6% X MEDIAN: 94.4% X MEDIAN: 94.6% X MEDIAN: 98.3% Printed: 217/11 12:45 PM X MEAN: 96.2% X MEAN: 96.0% X MEAN: 94.6% X MEAN: 98.3% COMAND STATISTICS SALES:2 /186 1.1% RES ON LAKE STATISTICS SALES :0/108 0.0% TOWNHOUSE STATISTICS SALES:10 /676 1.5% DIRECT RATIOS MEDIAN MEAN COD DIRECT RATIOS MEDIAN MEAN COD DIRECT RATIOS MEDIAN MEAN COD 2011 100.2% 100.2% 3.1 2011 0.0% 0.0% 0.0 2011 93.9% 94.5% 3.5 2010 100.0% 100.0% OA 2010 0.0% 0.0% 0.0 2010 103.3% 100.8% 7.4 INFERRED RATIOS SALES GROWTH: 1.0% INFERRED RATIOS SALES GROWTH: 0.0% INFERRED RATIOS SALES GROWTH: -5.6% SAMPLE GROWTH: -3.1% PROP TYPE GROWTH: -4.2% SAMPLE GROWTH: 0.0% PROP TYPE GROWTH: -8.0% SAMPLE GROWTH: -7.9% PROP TYPE GROWTH: -6.7% X MEDIAN: 96.9% X MEDIAN: 95.8% X MEDIAN: 0.0% X MEDIAN: 0.0% X MEDIAN: 95.1% X MEDIAN: 96.3% X MEAN: 96.9% X MEAN: 95.8% X MEAN: 0.0% X MEAN: 0.0 X MEAN: 92.8% X MEAN: 94.0% APARTMENT STATISTICS SALESA/99 1.0% RES OFF LAKE STATISTICS SALES:10017179 1.4% DB, TP STATISTICS SALES:1 /64 1.6% DIRECT RATIOS MEDIAN MEAN COD DIRECT RATIOS MEDIAN MEAN COD DIRECT RATIOS MEDIAN MEAN COD 2011 74.9% 74.9% 0.0 2011 95.4% 96.3% 6.3 2011 104.3% 104.3% 0.0 n3 2010 79.5% 79.5% 0.0 2010 97.2% 98.9% 7.9 2010 119.0 119.0% 0.0 INFERRED RATIOS SALES GROWTH: -5.7% INFERRED RATIOS SALES GROWTH: -2.4% INFERRED RATIOS SALES GROWTH: - 12.4% SAMPLE GROWTH: -10.3% PROP TYPE GROWTH: 0.5% SAMPLE GROWTH: -2.7% PROP TYPE GROWTH: -2.7% SAMPLE GROWTH: -6.9 PROP TYPE GROWTH: -6.8% X MEDIAN: 71.3% X MEDIAN: 79.9% X MEDIAN: 94.6% X MEDIAN: 94.5% X MEDIAN: 110.8% X MEDIAN: 110.9% X MEAN: 71.3% X MEAN: 79.9% X MEAN: 96.2% X MEAN: 96.2% X MEAN: 110.8% X MEAN: 11 0.9% STRATIFICATION(SINGLE FAMILY HOMES) RZ STATISTICS SALES:0 /0 0.0% BY EMV BY PRICE DIRECT RATIOS MEDIAN MEAN COD # % # % 2011 0.0% 0.0% 0.0 100 UNDER 175K 95.9% 99 UNDER 175K 96.2% 2010 0.0% 0.0% 0.0 3 175 -250K 103.1% 4 175 -250K 93.1% 0 250 -350K 0.0% 0 250 -350K 0.0% INFERRED RATIOS SALES GROWTH: 0.0% 0 350 -500K 0.0% 0 350 -WOK 0.0% 0 500 -700K 0.0% 0 500 -700K 0.0 SAMPLE GROWTH: 0.0% PROP TYPE GROWTH: 0.0% 0 700K -1MIL 0.0 0 70OK -1MIL 0.0% X MEDIAN: 0.0% X MEDIAN: 0.0% 0 OVER 1MIL 0.0 0 OVER 1MIL 0.0 X MEAN: 0.0% X MEAN: 0.0% BROOKLYNCTR - 2/712011 RESIDENTIAL STATISTICS SALES:10017287 1.4% CONDO STATISTICS SALESA /157 0.6% APTS= A,HL,HL DIRECT RATIOS MEDIAN MEAN COD DIRECT RATIOS MEDIAN MEAN COD COM= C,GC,ND,NP.SC,SL,SM 2011 95.4% 96.3% 6.3 2011 94.6% 94.6% 0.0 FARM= BF,F,FF,FP,LF,LV 2010 97.2% 98.9% 7.9 2010 - 102.9 % 102.9% 0.0 CA/A LAND- LA,LC,LI, RES LAND =LL.LR INFERRED RATIOS SALES GROWTH: -2.4% INFERRED RATIOS SALES GROWTH: -8.1% RES= B,BJ,D,DJ,P,R,RI OTHER= CHANGED PROP TYPE SAMPLE GROWTH: -2.7% PROP TYPE GROWTH: -2.9% SAMPLE GROWTH: -8.1% PROP TYPE GROWTH: 4.4% X MEDIAN: 94.6% X MEDIAN: 94.4% X MEDIAN: 94.6 X MEDIAN: 98.3% Printed: 2/711112 PM X MEAN: 96.2% X MEAN: 98.0% X MEAN: 94.6 X MEAN: 98.3% COMIIND STATISTICS SALES:2/186 1.1% RES ON LAKE STATISTICS SALES:01108 0.0% TOWNHOUSE STATISTICS SALES:10A676 1.5% DIRECT RATIOS MEDIAN MEAN. COD DIRECT RATIOS MEDIAN MEAN COD DIRECT RATIOS MEDIAN MEAN COD 2011 100.2% 100.2% 3.1 2011 0.0% 0.0% 0.0 2011 93.9% 94.5% 3.5 2010 100.0% 100.0% 0.0 2010 0.0% 0.0 0.0 " 2010 103.3% 100.8% 7.4 INFERRED RATIOS SALES GROWTH: 1.0% INFERRED RATIOS SALES GROWTH: 0.0% INFERRED` RATIOS SALES GROWTH: -5.6% SAMPLE GROWTH: -3.1% PROP TYPE GROWTH: -42% SAMPLE GROWTH: 0.0% PROP TYPE GROWTH: -8.0% SAMPLE GROWTH: -7.9% PROP TYPE GROWTH: -6.7% X MEDIAN: 96.9% X MEDIAN: 95.8% X MEDIAN: 0.0% X MEDIAN: 0.0% X MEDIAN: 95.1% X MEDIAN: 96.3% X MEAN: 96.9% X MEAN: 95.8% X MEAN: 0.0% X MEAN: 0.0% X MEAN: 92.8% X MEAN: 94.0% APARTMENT STATISTICS SALES:1199 1.0% RES OFF LAKE STATISTICS SALES:10017179 1.4% DB, TP STATISTICS SALESAM4 1.6% DIRECT RATIOS MEDIAN MEAN COD DIRECT RATIOS MEDIAN MEAN COD DIRECT RATIOS MEDIAN MEAN COD 2011 74.9% 74.9% 0.0 2011 95.4% 96.3% 6.3 2011 104.3% 104.3 0.0 ry 2010 79.5% 79.5% 0.0 2010 97.2% 98.9% 7.9 201 Q 119.0 119.0% 0.0 INFERRED RATIOS SALES GROWTH: -5.7% INFERRED RATIOS SALES GROWTH: -2.4% INFERRED RATIOS SALES GROWTH: -12.4% SAMPLE GROWTH: 40.3% PROP TYPE GROWTH: 0.5% SAMPLE GROWTH: -2.7% . PROP TYPE GROWTH: -2.7% SAMPLE GROWTH: -6.9% PROP TYPE GROWTH: -6.8 X MEDIAN: 71.3% X MEDIAN: 79.9% X MEDIAN: 94.6% X MEDIAN: 94.5% X MEDIAN: 110.8% X MEDIAN: 110.9% X MEAN: 71.3% X MEAN: 79.9% X M EAN: 86.2% X MEAN: 96.2% X MEAN: 110.8% X MEAN: 110.9% STRATIFICATION(SINGLE FAMILY HOMES) RZSTATISTICS SALES *0 /0 0.0% BY EMV BY PRICE DIRECT RATIOS MEDIAN MEAN COD # % # % 2011 0.0% 0.0% 0.0 100 UNDER 175K 95.9% 99 UNDER 175K 96.2% 2010 0.0% 0.0% 0.0 3 175 -250K 103.1% 4 175 -250K 93.1% 0 250 -350K 0.0% 0 250350K 0.0% INFERRED RATIOS SALES GROWTH: 0.0% 0 350 -500K .0.0% 0 950 -5WK 0.0% 0 500 -700K 0.0% 0 500 -700K 0.0% SAMPLE GROWTH: 0.0% PROP TYPE GROWTH: 0.0% 0 700K 1MIL 0.0% 0 70OK -1MIL, 0.0% X MEDIAN: 0.0% X MEDIAN: 0.0% 0 OVER 1MIL 0.0% 0 OVER 1MIL 0.0% X MEAN: 0.0% X MEAN: 0.00/0 ■� r - - -- m BROOKLYNCTR - 2712011 AS SUBMITTED GROWTH ANALYSIS STATIC PROPERTY TYPE 2010 TAXABLE 2011 IMPROVE NET % TAXABLE 2010 TAXABLE 2011 IMPROV- NET % TAXABLE EMV PARCELS EMV AMOUNT CHANGE CHANGE PARCELS EMV PARCELS EMV AMOUNT CHANGECHANGE PARCELS APTS' 166,003,200 99 169,826,200 3,000,000 823,000 0.5% 99 166,03,20 99 169,826,200 3,000,000 823,000 0.5% 99 COM' 241,051,400 146 233,628,400 4,295,000 - 11,718,000 .4.9% 145 COW 218,080,90 138 211,477,200 1,345,000 - 7,948,700 -3.6% 138 CR,CT 1,478,500 4 1,478,500 0 0 0.0% 4 CR,CT 1,478,500 4 1,478,500 0 0 0.0% 4 DB,TP,HR 13,486,600 65 12,433,600 32,000 - 1,085,000 -8.0% 64 DB,TP,HR 13,312,800 64 12,433,600 32,000 - 911,200 -6.8% 64 FARM` 167,100 1 168,300 0 1,200 0.7% 1 FARM• 167,100 1 168,300 0 1,200 0.7% 1 1 1 116,414,200 48 112,992,800 210,00 - 3,631,400 -3.1% 49 1 116,414,200 48 110,632,800 210,000 - 5,991,400 -5.1% 48 K 0 46 0 0 0 6.0% 46 K 0 46 0 0 0 0.0% 46 CNA LAND' 18,262,700 33 15,775,70 0 - 2,487,00 - 13.6% 33 CNA LAND* 15,262,700 32 14,977,200 0 - 285,50 -1.9% 32 RES LAND' 2,790,50 53 2,850,900 0 60,40 2.2% 56 RES LAND" 2,790,50 53 2,566,80 0 - 223,70 -8.0% 53 MH 0 0 0 0 0 0.0% 0 MH 0 0 0 0 0 0.0 0 NH 0 0 0 0 0 0.0% 0 NH 0 0 0 0 0 0.0°/0 0 RES' 1,038,787,70 7,290 1,010,077,50 1,742,70 - 30.452,90 -2.9% 7,288 RES' 1,038,364,90 7,287 1,009,918,70 1,742,70 30,188,900 -2.9% 7,287 RZ 0 0 0 0 0 0.0% 0 RZ 0 0 0 0 0 0.0% 0 S 0 0 0 0 0 0.0% 0 S 0 0 0 0 0 0.0% 0 U 2,718,60 3 2,718,60 0 0 0.0% 3 U 2,718,60 3 2,718,60 0 0 0.0% 3 X,XC,AX,XM 8,979,300 157 8,817,206 0 - 162,10 -1.8% 161 X,XCXMAX 8,979,30 157 8,580,20 0 - 399,10 -4.4% 157 Y 72,178,10 680 67,093,50 9,500 - 5,094,10 -7.1% 676 Y 71,927,200 676 67,093,50 9,50 -4,843,20 -6.7% 676 z 0 0 0 0 0 0.0% 0 z 0 0 0 0 0 0.0% 0 OTHERS' 0 0 0 0 0 0.0% 0 OTHERS' 26,818,00 17 25,989,600 2,950,00 - 3,778,400 -14.1% 17 TOTAL 1,682,317,900 8,625 1,637,861,20 9,289,20 - 53,745,90 3.2% 8,625 TOTAL 1,682,317,90 8,626 1,637,861,20 9,289,20 - 53,745,90 -3.2% 8,625 CHANGE -2.6% GROSS -32% NET CHECK 1,682,317,90 8,625 1,637,861,20 9,289,20 53,745,90 -3.2% 8,625 APTSrAHF,HL COM-C,GC,ND,NP,SC,SL, SM STATE RES. STATE RES. FARM= BF,DF,F,FF,FP,PF,LF,LV IMPR. TOTAL 1,764,20 GROWTH CALC. 1,135,374,70 1,100,592,800 1,784,20 - 36,566,10 3.2% CILIA LAND=LA LC,LI, RES LAND =1_L LR GROWTH -3.2% STATE RESIDENTIAL PROPERTY TYPES - B,BJ,D,DJ,P,R,RL,RM,DB,TP X,XC,XM,AX,RZ,Y 8 Z RES= B.BJ,D,DJ,P,R.RL,RM OTHER -CHANGED PROP TYPE STATE TIME ADJUSTED RES: 97.5% X 8,979,300 157 8,817,20 0 - 162,100 -1.8% 161 STATE BOARD INFERRED RES RATIO: 94.4% XC 0 0 0 0 0 0.0% 0 AX Q 0 0 0 0 0.0% 0 STATE BOARD NEW METHOD RES RATIO: 95.3% XM 0 0 0 0 0 0.0% 0 2011 Brooklyn Center Assessment ' Residential Summary by Property Type For 2011 the land CAMA (computer aided mass appraisal) system was incorporated to value ' land, which removed the calculated adjustments for influences from the structure values to the land values for all property types. Condominiums We had one open market condo sale with a sale price of $68,000, and an EMV of $64,300. Our condos in Brooklyn Center incorporate two large complexes. The Beach condo's; which has ' seen relatively stable sales until this year when units began listing as bank or short sales, and the Humboldt Condos, which have all been bad sales since they were converted from apartments and initially sold in 2005 and 2006. For the 2011 assessment, we moved the , Humboldt condos significantly higher, increasing 28% on average. These units are now predominantly valued in the high $20's to low $30s. Our Beach and Beard condos saw decreases. The average decrease of these condo units was 7.62 %. All condominiums had $2,000 decreases to site values for the 2011 assessment. Influences for water view were increased from 4% of bldg value to 12% of the land value for the condominiums that view Twin Lake. Townhomes , We had ten open market sales, with an average sale price of $109,255, an average EMV of $103,270, and a COD of 3.5. Overall change was a reduction of 6.7 %. We have a variety of styles and locations for townhomes throughout the city. All complexes have seen reductions to EMV and have experienced foreclosures within their complexes. All townhomes also had $2,000 decreases to land value for the 2011 assessment. Influences for waterfront lots were increased from 4% of the bldg value to 12% of the land value for the 2011 assessment. , Double Bungalows We had one open market double sale for the 2011 assessment. This 'double' had a small 1 br unit up in a single family home and had been grandfathered in as a DB. It sold for $150,000 with an EMV of $156,400. To date, the new owner has not applied for rental license on this property. It may be getting converted back into a single family dwelling. Attempts to contact the new owner have gone unanswered. Overall, values on DBs have comedown 6.8 %. 2011 ' values on DB's,range from $152,900 to $295,300 with a median value of $193,500. In Brooklyn Center the doubles encompass a wide variety of styles and sizes. Both structure and land values were reduced for 2011. All double bungalow lots saw $5,000 decreases to their site value for the 2011 assessment. Residential Off Water We had a total of 552 off -water residential sales, with 112 residential off water open market ' sales in Brooklyn Center. Our average residential lot values were held from the 2010 assessment, with the exception of changes to influences, as we corrected adjustments to land rather than structures. Structure values were adjusted downward again this assessment cycle. ' Our average open market sale price is $140,800, with an average EMV of $135,000 and a COD of 6.8. The majority of our sales are under the $175,000 EMV stratification, occurring in the 125,000 to 175,000 range. Overall values are dropping 3 %. Residential On Waterr ' We had no open market on -water sales in Brooklyn Center for the 2011 assessment. Waterfront land is valued by site in BC and our site values were reduced approximately $20,000 ' from the 2010 assessment. Waterfront lots are predominantly valued at between $140,000 and $150,000 on Twin Lake, and between $135,000 and $162,000 on the Mississippi River. Overall, waterfront properties are down approximately 8 %. , 14 The City of Brooklyn Center % of Parcels Changing in Estimated Market Value 2010 to 2011 Single Family Homes Townhomes 11% 2% 7% 0% 5% 0% 19% ■ Increase 23 % ■Increase ■ No Change ' °r " ■ No Change ■ -.01% to - 5% ■ -.01% to - 5% ■ -5.01 to -10% ■ -5.01 to -10% ■ Greater than -10% ■ Greater than -10% 80% 53% Condominiums Double Bungalows 22% 19% ■Increase � ■ Increase 0% ■ No Change ■ No Change 5% ■ -.01% to - 5% ■ -.01% to - 5% ■ -5.01 to -10% ■ -5.01 to -10% IN Greater than -10% IN Greater than -10% 71% 78% 15 Residential 2011 Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' Residential 2011 Values RE67SED 01 /1l /1011 Average overall Target 95.0 Number Median % % land Avers Averse Cash E uiv Ratio # Ratios % Ratios # Ratios % Ratios Area of Sales Ratio C.O.D. thane Chan a Imd Value E.M.V. Sale Price Ran an Under 85% Under 85% Over 106% Over 106% City SF 50.56 112 95.5 6.8 -2.8 -2.1% S 46.000 5134,984 $1407816 78.9-123.8 8 7.14% 15 1339% 4 /10 - 9/10 SF 50.56 51 96.1 6.8 $138486 5141 85A - 123.8 0 0.00% 10 19.61% 56 river 0 -7.1 -12.6 S 149,800 56 lake 0 -7.4 -113 1 S 140 N50 RIVER INFL 0 -2.9 -2.0% S 55,100 N 51 NW 13 94.1 7.2 -2.6 -1.2% S 470 $136 $145,193 84.2-111.6 1 7.69% 3 23.08 N 52 NE 15 94.2 4.5 -2.7 -1.5% S 47,200 $135,706 $146 80.6-102.9 1 6.67% 0 0.00% N 53 W CENT 40 95.6 75 -2.8 -13% S 46,600 $137,925 $143,662 80.1-123.7 3 7.50% 6 15.00% N 54 SE 26 97.1 7.4 -2.4 -2.0% S 46,200 $125 5 $128 70 78.9 - 1185 2 7.69% 4 1538% ' N55 SW 18 95.8 5.6 -23 -13 % S 47 0 $140,2p S145,162 $1.7-123.8 1 5.56% 3 16.67% N56 WATERFRONT 0 -73 -12.2% S 147,500 auClasa 01 0 aUClass 02 0 al/Class 03 0 ' aUClass 04 4 95.4 3.1 S 178 950 $ 184,556 93.5 - 104.9 0 0.00% 0 0.00% aUClass 05 8 96.9 9.2 1 S 155,300 S 150,797 95.4 - 123.8 0 0.00% 3 3750 aUClass 06 25 96.8 5.6 S 144,812 $147,172 86-117A 117A 0 0.00% 4 16.00% aUClass 07 75 94.2 7.0 S 127,197 S135,255 78.9-123.7 8 10.67% 1 8 10.67% aUClass 08 0 AUClass 09 0 ' aVClass 10 0 eUClass 11 0 al/Class 12 0 Sale Price to $100,000 0 Sale Prim 5100,001 to $125,000 30 103.2 6.0 S 120,140 S115 75 92.6-123.8 0 0.00% 10 3333% Sale Prim S125 to $150,000 46 94.6 5.6 S 133 }08 $ 139.798 73.9-118.5 1 2 435% 5 10 .87 Sale Prim $150,001 to 5175,000 33 925 63 S 145,593 S159,543 $0.1 -104.9 6 18.18% 0 0.00% Sale Prim $175,001 to 5200,000 2 95.6 0.1 S 174 ,350 S132 50 955 - "A 0 0.00% 0 0.00% Sale Prim $200 to 250,000 1 952 S 228 $240,225 95.2 0 0.00% 0 0.00% ' Sale Prim 5250,001 to $300,000 0 Sale Prim 530001 and Over 0 EMV to $100,000 0 EMV 5100,001 to $125,000 34 95.4 7.1 S 118,332 S123,652 78.9 - 1163 3 9.82% 4 11.76 EMV $125,001 to $150,000 59 95.1 7.1 S 136,071 $143,445 80.1 - 123.8 5 8.47% 1 8 13.56% ' EMV 5150,001 to S175,000 15 983 4.9 S 159,146 S161,638 86. - 111.7 0 0.00% 2 1333 EMV 5175,001 to 200,000 2 107.1 10.7 S 176,750 $ 167,000 "A - 1185 0 0.00% 1 50.00 EMV 5200,001 to 250,000 1 952 S 22SAN S240,225 952 0 0.00% 0 0.00% EMV 5250,001 to 5300 0 EMV $300,001 and Over 0 Rambler 87 95.4 6.8 S133,157 5139 68 78.9-123.8 6 6.90% 11 12.64% Split Entry 4 103.2 9.0 $147,425 $146,300 98.4-111.5 0 0.00% 2 50.00% Split Level 8 985 6.3 5152,075 $158 82 82.6.110. 1 12.50% 1 12.50% 11/4 E :. 11 96.1 5.7 5129,154 S135,855 81.7-105.8 1 9.09% 0 0.00 1 1/2 Ex p. 1 108.1 5129 700 $120 000 98.1 0 0.00% 1 100.00% ' 13/4 Ex p, 0 2 Story 1 "A 5176 $185 95.6 0 0.00% 0 0.00% Airport 0 0 AparUmts -.05 3 94.6 4.8 5144 $152,500 98.3-102 0 0.00% 0 0.00% ' CommerciaUlndustrial -.03 2 88.4 7.6 $145 $163,850 82.6 -%.2 0 0.00% 0 0.00% Highway/Freeway (-.10 4 97.3 1 8.8 S149,025 S148 26 88.4 - 1185 0 0.00% 1 25.00 Railroad -.OS 0 Thru Street -.10 12 95.2 6.0 5126,808 $133 14 78.9-110.1 1 8.33% 2 16.67% Park 604 4 100.0 95 S136d2 5137 75 88.4 -112.6 0 0.00% 2 50.00%. ' AO Townhouses 637 10 94 3.8 -6.7% -6.8% S 23,900 $103,270 $109,266 90.0 -100.4 0 0.00% 0 0.00% RAMBLERS 2 92.5 0.9 $120400 $129950 91.7-93.3 0 0.00% 0 0.00 SERF 8 97 3.1 $102,533 $106100 09.8 -100.4 0 0.00% 0 0.00% SPLIT LEVEL 0 1112 Ep 1 90 $96,400 $106000 90 0 0.00% 0 0.00 2 STORY 1 90.3 1 $81,300 $90.052 90.3 0 0.00% 0 0.00 Condominiums 1 84.8 -4.6 .12.4 $ 13,100 $84,300 588 000 94.6 0 0.00% 0 0.00% Double's 1 1043 -6.8% -9.6% S54 $156,400 5150 000 1043 0 0.00% 0 0.00% , i\ 201 I asmt final ratios readsheet.XLS final 2011 A ant 16 CITY OF BROOKLYN CENTER RESIDENTIAL MEDIAN ASSESSED VALUE AND TAX CAPACITY TAX YEARS 2002 - 2012 Median Value Percentage Tax Capacity Percentage Change Change Single Family Residential ° ° Payable 2002 $119,300 12.97/° $1,193.00 - 4.44/° Single Family Residential ° ' Payable 2003 $140,200 17.52 /° $1,402.00 17.52% Single Family Residential ' Payable 2004 $152,000 8.42% $1,520.00 8.42% Single Family Residential ' Payable 2005 $164,100 7.96% $1,641.00 7.96% Single Family Residential ' Payable 2006 $176,400 7.50% $1,764.00 7.50% Single Family Residential ° ' Payable 2007 $190,400 7.94 /° $1,904.00 7.94% Single Family Residential ° ' Payable 2008 $196,100 2.99 /° $1,961.00 2.99% Single Family Residential $180,400 - 8.01% $1,804.00 - 8.01% Payable 2009 Single Family Residential ° ° ' Payable 2010 $156,500 13.25/° $1,565.00 - 13.25/° Single Family Residential ° ° ' Payable 2011 $137,500 -12.14% $1,375.00 -12.14 /° Single Family Residential ' Payable 2012 $133,900 2.62% $1,339.00 - 2.62% ' 3/29/2011 17 t CITY OF BROOKLYN CENTER e RESIDENTIAL NEIGHBORHOODS , 2011 ASSESSMENT AVG. LOT VALUE RIVER INFLUENCE ' UM NORTHWES 1® 01 AVG LOT $55,100 ffi AVG LOT $47,000 d� ®® M13M o m [ ®® ®e �® L � NORTHEAST ' ® ®© ® AVG LOT $47,200 0 ®� AVERAGE RIVERFRONT AVG LOT $160,000 t ®� WEST CENTRAL OVERSIZE RIVERFRONT � AVG LOT $46,600 AVG LOT $162,000 SMALL RIVERFRONT ' ®m ® ® ® ® ®® AVG LOT $135,000 �® FLOOD PLAIN RIVERFRONF' dmmmmm AVG LOT $147,200 OEM 1 a ® SOUTHEAST r l MOB ® AVG LOT $46,200 ME o UPPER TWIN LAKE HM A MR$ VG LOT $150,000 WIFEM ttuttittlttriEoeF r , SOUTHWEST 0 AVG LOT $47,600 MIDDLE TWIN LAKE ' AVG LOT $140,000 B e N 18 This map prepared by the assessing division for illustrative purposes only. ' Brooklyn Center Single Family Residential Open Market Sales 10/112009 - 09/30/2010 Bsmt Deck Porch Total Total Cash Equiv. # Street Name Style Age GBA Bsmt Area Finish % Gar Location H Cars Central Air Area Area Bdrm Baths Sale Date Sale Price 5626 Logan Ave N Rambler 1951 775 775 0% Detached 2 Yes 0 0 2 1 3/18/2010 $101,773 5433 Dupont Ave N Rambler 1950 780 780 75% Detached 2 Yes 0 0 3 2 10/16/2009 $140,000 5951 Dupont Ave N Rambler 1950 850 850 50% Detached 1 Yes 0 0 2 2 10/15/2009 $140,900 5410 Girard Ave N Rambler 1932 892 892 50% Detached 1 Yes 0 0 3 2 2/26/2010 $105,000 4924 Beard Ave N Rambler 1950 896 896 75% Attached 2 No 256 0 3 2 8/6/2010 $145,000 6900 Newton Ave N Rambler 1955 912 912 90% Detached 2 No 0 0 2 2 11/19/2009 $122,000 6407 Emerson Ave N Rambler 1955 912 912 85% Detached 2 Yes 0 0 4 1 2/16/2010 $129,525 6337 Colfax Ave N Rambler 1955 912 912 50% Detached 2 Yes 0 0 3 2 5/20/2010 $116,303 5306 Northport Dr Rambler 1955 912 912 50% Attached 1 Yes 0 0 4 2 2/24/2010 $125,000 5338 James Ave N Rambler 1954 921 921 50% Detached 1 Yes 0 0 2 1 5/26/2010 $105,185 6837 Scott Ave N Rambler 1955 922 912 85% Detached 1 Yes 0 0 4 2 10/26/2009 $143,800 6406 Colfax Ave N Rambler 1956 932 912 85% Detached 2 Yes 0 0 4 1 10/30/2009 $154,650 5419 Irving Ave N Rambler 1955 939 939 75% Detached 1 Yes 0 0 3 1 11/13/2009 $122,425 5101 66th Ave N Rambler 1959 958 950 75% Detached 2 Yes 0 0 3 1 1/29/2010 $132,890 5200 66th Ave N Rambler 1959 958 950 50% Detached 2 Yes 0 0 3 1 1/7/2010 $115,500 6436 Perry Ave N Rambler 1959 958 950 75% Detached 2 Yes 0 0 3 1 4/26/2010 $129,000 3706 Violet Ave Rambler 1958 960 960 85% Detached 2 Yes 0 0 4 2 11/12/2009 $155,000 7001 Drew Ave N Rambler 1958 960 960 85% Detached 2 Yes 342 0 4 2 11/16/2009 $152,500 7130 Ewing Ave N Rambler 1957 960 960 50% Detached 2 Yes 0 0 3 2 11/19/2009 $125,000 5537 Judy La Rambler 1955 960 960 75% Detached 2 Yes 0 0 4 2 4/16/2010 $140,000 5842 Abbott Ave N Rambler 1954 962 962 75% Attached 1 Yes 478 64 2 1 8/30/2010 $144,000 6215 B rya nt Ave N Rambler 1954 975 960 50% Detached 2 Yes 0 0 3 1 1/14/2010 $110,500 6719 Drew Ave N Rambler 1956 976 960 50% Detached 2 Yes 0 0 3 1 9/30/2010 $105,000 6206 Brooklyn Blvd Rambler 1956 976 960 25% Attached 1 Yes 0 0 3 2 12/30/2009 $135,000 5942 Zenith Ave N Rambler 1955 976 976 85% Detached 4 Yes 0 0 4 2 5/25/2010 $155,103 5936 Abbott Ave N Rambler 1955 976 976 50% Detached 1 Yes 0 0 3 2 5/20/2010 $120,000 5707 Fremont Ave N Rambler 1952 988 988 90% Detached 1 Yes 0 0 3 2 11/10/2009 $161,650 6807 Regent Ave N Rambler 1957 992 992 75% Detached 2 Yes 0 0 4 2 7/30/2010 $155,199 7232 France Ave N Rambler 1958 1000 1000 75% Detached 2 No 0 0 2 2 4/14/2010 $126,500 3912 57th Ave N Rambler 1955 1000 1000 30% Detached 1 Yes 0 0 3 1 3/22/2010 $102,500 5428 Camden Ave N Rambler 1925 1004 776 25% Detached 2 Yes 102 0 2 2 9/29/2010 $117,900 6418 Quail Ave N Rambler 1958 1008 1000 75% Detached 2 Yes 0 0 4 2 3/18/2010 $162,700 4513 64th Ave N Rambler 1960 1017 1000 85% Attached 1 Yes 0 0 4 2 4/9/2010 $149,000 5024 Abbott Ave N Rambler 1956 1020 1020 75% Detached 1 Yes 0 144 4 1 4/26/2010 $124,800 505 61st Ave N Rambler 1954 1032 1032 50% Attached 1 Yes 0 0 2 2 6/16/2010 $150,000 5631 Aldrich Ave N Rambler 1954 1032 768 50% Detached 2 Yes 0 0 3 1 8/26/2010 $119,000 3019 Quarles Rd Rambler 1960 1034 1034 25% Detached 1 Yes 0 0 3 1 2/26/2010 $128,000 19 This information was provided by the City of Brooklyn Center Assessor's office. Brooklyn Center Single Family Residential Open Market Sales 1011/2009 - 09/30/2010 Bsmt Deck Porch Total Total Cash Equiv. # Street Name Style Age GBA Bsmt Area Finish % Gar Location # Cars Central Air Area Area Bdrm Baths Sale Date Sale Price 7013 Girard Ave N Rambler 1965 1036 1032 75% Detached 2 Yes 0 0 3 2 3/24/2010 $123,000 6413 Girard Ave N Rambler 1957 1040 1040 75% Detached 2 Yes 0 0 3 2 6/8/2010 $144,000 6206 Xerxes Ave N Rambler 1958 1040 1054 50% Attached 2 Yes 254 0 3 2 3/30/2010 $139,471 5455 Fremont Ave N Rambler 1963 1040 1040 50% Detached 2 Yes 120 0 3 1 6/3/2010 $121,000 5300 Girard Ave N Rambler 1972 1040 1040 70% Detached 2 Yes 344 0 5 2 6/30/2010 $135,800 5721 Major Ave N Rambler 1959 1040 1040 75% Attached 2 Yes 231 0 3 1 3/31/2010 $151,000 3018 65th Ave N Rambler 1959 1046 1025 50% Attached 1 Yes 210 0 3 2 4/26/2010 $135,000 6719 Dupont Ave N Rambler 1971 1050 1008 75% Attached 2 Yes 276 0 3 2 8/31/2010 $140,900 5736 Northport Dr Rambler 1956 1050 1050 85% Detached 2 Yes 0 0 5 2 8/31/2010 $134,000 3117 Lawrence Rd Rambler 1959 1052 1040 75% Attached 1 Yes 238 0 3 2 11/24/2009 $123,800 3025 Mumford Rd Rambler 1958 1056 1056 75% Detached 1 Yes 0 0 3 2 6/11/2010 $103,000 1613 Amy La Rambler 1967 1058 1032 80% Detached 2 Yes 298 0 4 2 5/26/2010 $155,000 7249 Emerson Ave N Rambler 1965 1060 1032 50% Detached 2 Yes 0 0 4 1 3/19/2010 $127,000 3119 65th Ave N Rambler 1959 1065 1056 75% Detached 2 Yes 0 0 3 2 10/15/2009 $159,000 5431 Irving Ave N Rambler 1955 1070 950 75% Attached 2 Yes 228 0 4 2 9/17/2010 $144,740 6737 Ewing Ave N Rambler 1957 1071 1060 75% Detached 2 Yes 0 0 4 2 10/2/2009 $159,900 6907 Halifax Ave N Rambler 1962 1076 1056 75% Detached 2 Yes 0 0 4 2 11/5/2009 $143,000 5414 Queen Ave N Rambler 1956 1085 1085 50% Attached 1 Yes 0 154 3 1 11/12/2009 $119,000 6612 Dupont Ave N Rambler 1972 1092 1092 60% Attached 1 Yes 448 0 3 2 5/17/2010 $145,000 6707 5th St N Rambler 1968 1092 1092 60% Attached 2 Yes 480 0 3 2 6/24/2010 $158,000 3712 53rd PI N Rambler 1955 1112 912 75% Attached 1 Yes 120 0 3 2 2/26/2010 $139,925 3024 Quarles Rd Rambler 1960 1122 1122 50% Detached 2 Yes 0 0 3 2 5/5/2010 $152,000 3024 Quarles Rd Rambler 1960 1122 1122 50% Detached 2 Yes 0 0 3 2 4/30/2010 $152,000 5931 Pearson Dr Rambler 1955 1132 1168 50% Attached 1 Yes 0 0 3 2 1/26/2010 $141,000 5842 Vincent Ave N Rambler 1956 1176 1176 50% Detached 2 Yes 0 0 4 2 1/29/2010 $121,920 5535 Bryant Ave N Rambler 1950 1184 896 75% Detached 2 Yes 0 0 4 2 11/9/2009 $150,000 5549 Logan Ave N Rambler 1955 1193 1010 75% Attached 1 Yes 0 0 3 2 5/7/2010 $141,000 6919 Halifax Ave N Rambler 1959 1226 1226 75% Detached 2 Yes 340 170 3 2 4/26/2010 $155,400 1600 72nd Ave N Rambler 1967 1232 1032 75% Detached 4 Yes 318 0 3 2 1/12/2010 $175,000 6512 Indiana Ave N Rambler 1958 1232 1232 75% Detached 1 Yes 0 0 4 2 4/2/2010 $154,000 6012 Halifax Ave N Rambler 1955 1232 1232 75% Attached 1 Yes 96 0 4 2 5/19/2010 $161,900 5725 Northport Dr Rambler 1955 1232 1232 75% Attached 1 Yes 468 252 3 2 10/30/2009 $168,500 4007 Janet La Rambler 1956 1248 1248 75% Detached 2 Yes 0 0 5 2 5/14/2010 $160,000 3513 53rd PI N Rambler 1955 1250 1050 50% Attached 1 Yes 224 0 3 1 2/26/2010 $141,373 5406 Twin Lake Blvd E Rambler 1951 1258 1258 0% Attached 2 Yes 168 100 3 2 11/20/2009 $155,200 3112 Chenry Rd Rambler 1958 1266 1266 80% Attached 1 Yes 180 168 5 2 8/24/2010 $169,653 6036 June Ave N Rambler 1959 1270 1144 75% Attached 1 Yes 0 0 3 2 3/9/2010 $132,828 20 This information was provided by the City of Brooklyn Center Assessor's office. Brooklyn Center Single Family Residential Open Market Sales 10/112009 - 09/30/2010 Bsmt Deck Porch Total Total Cash Equiv. # Street Name Style Age GBA Bsmt Area Finish % Gar Location # Cars Central Air Area Area Bdrm Baths Sale Date Sale Price 3307 Lawrence Rd Rambler 1958 1272 1248 50% Attached 1 Yes 0 0 4 3 4/29/2010 $144,650 5630 Fremont Ave N Rambler 1955 1340 1200 50% Attached 1 Yes 0 0 3 2 12/30/2009 $122,000 7236 Halifax Ave N Rambler 1962 1348 1312 75% Attached 3 Yes 0 192 4 2 3/2/2010 $154,207 7001 Fremont Ave N Rambler 1964 1400 1392 85% Detached 2 Yes 0 0 4 2 5/28/2010 $171,000 5320 Colfax Ave N Rambler 1947 1414 1113 0% Attached 1 No 0 0 3 1 12/30/2009 $117,000 3619 Commodore Dr Rambler 1955 1428 1232 75% Attached 1 Yes 0 0 4 3 9/16/2010 $139,340 6015 Lyndale Ave N Rambler 1948 1440 1092 80% Detached 2 Yes 448 0 3 2 5/14/2010 $149,000 3007 64th Ave N Rambler 1959 1513 1056 90% Detached 2 Yes 0 0 5 3 7/16/2010 $173,500 6325 Xerxes Ave N Rambler 1959 1536 1050 90% Detached 2 Yes 0 0 5 2 3/9/2010 $167,325 5615 Halifax Ave N Rambler 1956 1540 0 0% Attached 3 No 240 0 3 1 8/27/2010 $105,000 6830 Dupont Ave N Rambler 1968 1560 1200 95% Attached 2 Yes 200 200 4 2 7/15/2010 $179,900 5843 Halifax Ave N Rambler 1955 1620 1775 40% Tuck Under 2 Yes 240 348 4 2 6/3/2010 $155,000 5601 Girard Ave N Expansion 1950 872 576 50% Detached 2 Yes 0 0 3 2 6/14/2010 $114,900 5037 Ewing Ave N Expansion 1955 1024 768 75% Detached 2 No 0 0 3 1 10/15/2009 $143,500 5233 Drew Ave N Expansion 1955 1024 768 75% Detached 1 Yes 144 0 3 2 11/23/2009 $130,700 6512 Chowen Ave N Expansion 1955 1040 704 75% Detached 1 Yes 153 100 5 2 12/14/2009 $121,250 5624 Camden Ave N Expansion 1953 1152 832 75% Detached 2 Yes 84 0 3 2 10/30/2009 $134,304 5328 Emerson Ave N Expansion 1938 1235 906 0% Detached 2 No 0 0 2 1 10/23/2009 $104,500 5130 France Ave N Expansion 1956 1248 768 20% Detached 2 No 0 0 3 3 4/16/2010 $145,000 6012 Aldrich Ave N Expansion 1951 1256 832 50% Detached 1 Yes 154 126 4 3 1/6/2010 $142,250 6115 Colfax Ave N Expansion 1953 1258 832 60% Detached 2 No 0 0 3 2 3/12/2010 $120,000 5101 Drew Ave N Expansion 1960 1352 1072 75% Detached 2 Yes 0 0 3 1 1/29/2010 $150,000 6600 Bryant Ave N Expansion 1965 1368 954 0% Attached 2 No 0 0 3 2 10/13/2009 $150,000 4950 Abbott Ave N Expansion 1951 1680 938 50% Attached 2 Yes 0 0 4 2 5/7/2010 $158,000 6912 Indiana Ave N Split Entry/Foyer 1970 1070 1014 75 Attached 2 Central 180 0 4 2 7/2/2010 $127,000 4110 66th Ave N Split Entry/Foyer 1977 944 912 90 Attached 2 Central 80 0 4 2 3/2/2010 $162,000 5801 Drew Ave N Split Entry/Foyer 1971 1200 1200 80 Attached 4 Central 160 0 3 3 6/8/2010 $143,000 3931 51st Ave N Split Entry/Foyer 1993 952 952 75 Attached 3 Central 396 0 3 2 1/8/2010 $153,200 6318 Beard Ave N Split Level 1959 1149 1103 75 Attached 2 Yes 80 0 4 2 11/12/2009 $174,500 3112 64th Ave N Split Level 1959 1320 1320 64 Tuck 2 Yes 0 0 4 2 11/30/2009 $150,350 3000 Quarles Rd Split Level 1960 1056 1008 69 Tuck 1 Yes 336 0 3 2 11/12/2009 $113,000 6223 Brooklyn Dr Split Level 1957 896 896 75 Attached 1 No 0 0 3 2 12/11/2009 $142,000 6325 Brooklyn Dr Split Level 1958 1316 1242 50 Tuck 2 Yes 0 0 4 3 2/4/2010 $148,000 3109 Lawrence Rd Split Level 1958 1281 1227 50 Tuck 2 Yes 0 0 5 2 9/30/2010 $162,480 3318 Poe Rd Split Level 1958 1257 1203 50 Tuck 2 Yes 0 0 3 2 9/30/2010 $136,500 5701 June Ave N Split Level 1969 1724 1610 75 Attached 2 Yes 595 0 5 3 3/31/2010 $240,225 7000 Halifax Ave N Two Story 1964 1683 825 50 Attached 2 Central 0 120 4 2 10/28/2009 $185,000 21 This information was provided by the City of Brooklyn Center Assessor's office. 2010 Annual Report on the Twin Cities Housing Market i MINNEAPOLIS AREA Association uic Facts the 13- County Metro Area (cont.) °f REALTORS' Days on Market Until Sale Percent of Original List Price Received 143 1 96.8% 0 121 130 1 ° 91.8% 92.8% 92.1% I 1 1 1 1 I 1 1 � 2007 2008 2009 2010 2006 2007 2008 2009 2010 ' 1 Top 5 MLS Areas: Shortest Days on Market Until Sale in 2010 ' Top 5 MLS Areas: Percent Of Original Price Received in 2010 303 - MPLS - Longfellow 74 ; 363 - Brooklyn Center 95.9% 306 - MPLS - Northeast 84 ' 303 - MPLS - Longfellow 95.3% ' 305 - MPLS - North 91 I 305 - MPLS - North 94.5% 363 - Brooklyn Center 91 742 - SP- Central 94.5% 769 - Anoka 92 1 307 - MPLS - Phillips 94.3% 1 Bottom 5 MLS Areas: Longest Days on Market Until Sale in 2010 ' Bottom 5 MLS Areas: Percent Of Original Price Received in 2010 1 618 - Eastern Dakota County 222 721 - Lakeland /Afton /Denmark 89.4% 628 - Southern Dakota County 212 1 784 - Northern Chisago County 88.8% 784 - Northern Chisago County 207 ; 381 - Lake Minnetonka 88.5% 741 - SP- Downtown Stp /Capital Hg 205 ' 628 - Southern Dakota County 87.9% 1 721 - Lakeland /Afton /Denmark 196 618 - Eastern Dakota County 78.9% Months Supply at Year End , pp Y Homes for Sale at Year End 8.4 ' 7.9 7.5 1 27,576 7 1 24,347 25,505 ' 20,782 22,332 , 5.5 ' 1 1 1 n r 1 2006 2007 2008 2009 2010 i 2006 2007 2008 2009 2010 Top 5 MLS Areas: Shortest Months Supply at Year End I Top 5 MLS Areas: Change in Homes for Sale from 2009 618 - Eastern Dakota County 2.9 628 - Southern Dakota County +68.8% 750 - SP- Mac /Groveland /River Road 4.0 1 398 - Victoria +35.7% 386 - Hopkins 4.8 748 - SP -Town and Country/Merriam Park +22.5% 309 - MPLS - Southwest 4.8 1 702 - Falcon Hghts /Lauderdale /Rosedale +18.3% 628 - Southern Dakota County 4.9 741 - SP- Downtown Stp /Capital Hg +15.1% Bottom 5 MLS Areas: Longest Months Supply at Year End ; Bottom 5 MLS Areas: Change in Homes for Sale from 2009 , 805 - Western Wisconsin 11.5 ' 713 - Bethel -44.9% 630 - Northfield 10.9 ; 363 - Brooklyn Center -45.5% 368 - Hennepin - Northwest 10.9 ' 307 - MPLS - Phillips -46.5% 721 - Lakeland /Afton /Denmark 10.8 ; 310 - MPLS - University -51.5% 381 - Lake Minnetonka 10.6 ' 308 - MPLS - Powderhorn -55.6% C Sponsored by Royal Credit Union 1 www.rcu.org ©2011. All data from Northstar RMLS. Provided by the Minneapolis Area Association IfEALTORSO. Powered by 1 OK Research and Marketing. I Click for Table of Contents 1 4 363 - Brooklyn Center Median Sales Price Rolling 12 Months MINNEAPOLIS AREA Association -f REALTORS' IN Mar 08 thru Feb 09 E3 Mar 09 thru Feb 10 Mar 10 thru Feb 11 $149,435 $135,000 $135,000 $124,250 W $96,100 $95,000 - $98,000 $85,000 $75,000 , g k -9.7% 0.0% -22.0% +13.3% - 23.5 % +3.2% Traditional Foreclosures Short Sales Data comes from the Regional Multiple Listing Service of Minnesota, Inc. Data deemed reliable but not guaranteed. Powered by 10K Research and Marketing. I CITY OF BROOKLYN CENTER TOWNHOME SALE ANALYSIS FOR 2011 ASSESSMENT SALES FROM OCTOBER, 2009 TO SEPTEMBER, 2010 NBHD TOWNHOME COMPLEX # of Units # SALES AVG. SALE PRICE , 100 Evergreen Estates 8 1 $89,000 105 Rosemary Terrace 10 0 No Sales 110 Humboldt Square 8 0 No Sales 115 Riverwood 21 0 No Sales 120 Brookwood 32 1 $90,100 125 Northbrook Est. 8 0 No Sales 130 Madsen Floral 28 0 No Sales 140 Moorwood 36 1 $110,000 150 -152 Hi -Crest 60 0 No Sales ' 160 Earle Brown Farm Estates 100 0 No Sales 170 -172 Earle Brown Farm Townhomes 20 1 $106,000 180 Creek Villas 103 0 No Sales , 190 -194 Mallard Creek 206 5 $109,500 196 Riverwood Estates Townhomes 21 1 $149,900 197 France Ave 4 0 No Sales 198 Tanami 2nd Addn - Bristol Village 21 0 No Sales Totals 686 10 TOWNHOME SALES BY STYLE # SALES TOWNHOME STYLE AVG. MKT VALUE AVG. SALE PRICE 2 Rambler $121,700 $130,000 6 Split Entry /Split Foyer $103,500 $106,100 0 Split Level No Sales No Sales 1 1 112 Expansion $97,400 $106,000 ' 1 1 Two Story $81,800 $90,100 G: \BOARD\2011 \[THSALES 11 ASMT.XLS]Townhomes Sales 24 ' CITY OF BROOKLYN CENTER CONDOMINIUM SALE ANALYSIS FOR 2011 ASSESSMENT SALES FROM OCTOBER, 2009 TO SEPTEMBER, 2010 ' NBHD TOWNHOME COMPLEX # of Units # SALES AVG. SALE PRICE 201 -203 The Beach Condos 122 1 $68,000 204 Humboldt Court Condos 36 9 -all rejected $31,200 205 Beard Ave Condos 4 0 No Sales Totals 1 162 1 e Nbad # Condominium Complex Percent of Growth 201 -203 The Beach Condos -7.7% 204 Humboldt Court Condos 26.5% 205 Beard Ave Condos -5.5% Condos in Brooklyn Center saw an average decrease of 4.5% in the 2011 assessment for taxes payable in 2012. 25 CITY OF BROOKLYN CENTER , COMMERCIAL AND INDUSTRIAL ANALYSIS BY USE 2010 VS. 2011 ' 2010 2011 New % Change % Change ' Type of Property EMV Totals EMV Totals Construction Excluding Improv. Including Improv. Auto Retail & Gas Station $9,933,600 $10,224,100 $525,000 -2.4% 2.9% Auto Dealers $25,090,000 $25,330,000 $0 1.0% 1.0% Banks $5,995,800 $5,967,400 $0 -0.5% -0.5% Bowling $1,443,000 $1,432,000 $0 -0.8% -0.8% Day Care $1,989,000 $1,989,000 $0 0.0 0.0% ' Fast -Food $6,473,000 $6,341 $0 -2.0% -2.0% Greenhouse /Farm (Green Acres) $1,404,700 $1,400,700 $0 -0.3% -0.3% ' Hotel / Motel $26,672,600 $24,400,600 $0 -8.5% -8.5% Medical Office $11,606,000 $11,815,200 $0 1.8% 1.8% ' Mortuary $882,000 $830,000 $0 -5.9 -5.9% Office Large $36 $39,258,200 $2,950,000 -0.6% 7.5% , Office Small $12,994,700 $12,678,500 $O -2.4% -2.4% Office Condominiums $2,516,900 $2,441 $0 -3.0% -3.0% Restaurant $7 $7,271,000 $0 -0.4% -0.4% Retail w /Anchors $58,416,000 $57,667,000 5820,000 -2.7% -1.3% Shopping Centers $24 $24,016,400 $0 -0.7% -0.7% , Theater $11,825,400 $11,825,400 $0 0.0 0.0% Veterinary $520 $520,000 $0 0.0% 0.0% ' Vacant Land Comm / Ind $6 $5,807,500 $0 -9.4% -9.4% Industrial North $77,966,000 $74,937,000 $210,000 -4.2% -3.9% , Industrial South $41,285,100 $39,770 $0 -3.7% -3.7% , Totals $371,428,100 $365 $4,505,000 -2.7% -1.5% G : \SPREDSHTWssessor\2011CIAl2011 Growth.x1sx]2011 C& I , 26 m = == m = == m == i m m r m COMMERCIAL - INDUSTRIAL SALES 2010 - RATIO STUDY 11/29/2010 100 (22 ) BROOKLYN CENTER WOJCIK PID SALE PRICE DATE CE PRICE 2008 -IMP 2008 -EMV 2009 -IMP 2009 -EMV 2010 -IMP 2010 -EMV PT SC UC PER PROP ADJ. PRICE RATIO 03- 118 -21 -12 -0001 875,000 200912 875,000 0 1,406,000 0 1,406,000 0 875,000 C W 344 0 875,000 100.0% 5901 BROOKLYN BLVD, BROOKDALE WEST PROF. BLDG. AUD #: 9545 COMMENTS: 03- 118 -21 -14 -0033 1,530,000 201002 1,530,000 0 2,500,000 0 2,200,000 0 1,530,000 C W 344 0 1,530,000 100.0% 3300 CORD NO 10, BROOKLYN CROSSINGS AUD#: 12468 COMMENTS: CITY TOTALS COUNTY TOTALS SALES: 2 SALES: 67 MEDIAN: 100.0% MEDIAN: 98.0% MEAN: 100.0% MEAN: 103.5% AGGREGATE: 100.0% AGGREGATE: 97.4% COD: 0.0 COD: 14.3 I I I 27 City of Brooklyn Center Apartment Assessment Details APARTMENT ANALYSIS 2011 VS. 2010 2011 EMV 2010 EMV % Change 2011 Average 2010 Average ' Totals Totals New Construction Excluding Improv. Average EMV EMV Per Unit EMV Per Unit 4-5 Units $4,623,000 $4,659,000 $0 -0.77% $216,095 $55,036 $55,464 Average 558,179 unit Average S59,107 unit ' $73,800 for $73,800 for 6 -8 Units $2,055,000 $2,075,000 $0 -0.96% $411,000 LakefronUWalkout LakefronUWalkout 10 -12 Units $7,216,000 $7,197,000 $0 0.26% $555,077 $49,425 $49,295 $47,260 Apt $49,376 Apt 18-36 Units $10,256,000 $10,295,000 $80,000 -1.16% $1,282,000 $82,217Townhomeunit $70,391Townhomeunit 546,444 Apt $47,684 Apt , $60,610 Townhome Unit 560,610 Townhome Unit 48 -75 Units $27,708,000 $28,065,000 $0 - 1.27% $3 $63,623 Sr. Unit $63,623 Sr. Unit $45,414 Apt $43,113 Apt, $60,770 Townhome Apt $60,770 Townhome Apt 76+ $117,913,000 $113,793,000 $2„500,000 1.42% $6,965,294 $60,518 Sr. Apt $61,395 Sr. Apt Total Apartment ' Asmt $169,771,000 $166,084,000 $2,580 0.67% $50,283 550,333 28 ® �r rr rr r ri rr rr r rr rr r rr rr �r rr r■i ar rr 2010 Apartment 12 Month Study KII I-INIO PID# ADDRESS DATE SALE PRICE CASH EQUIV I 20081MP I 2008EMV 2009IMP I 2009EMV 12010IMPI 2010EMV I PT I SC JUNITJ PER PROP I ADJ PRICE I COMMENTS RATIO 22 34- 119 -21-43 -0057 6200 FRANCE AVE N 200912 2,062,500.00 2,062,500.00 0.00 1,645,000.00 0.00 1.645,000.00 0.00 1,619,000.00 H M 23 25,000.00 2,037,500.00 INCL 0058 & 0059 79.46% 46 06- 028 -24 -12 -0045 3030 LYNN AVE S '.201004 910,000.00 910,000.00 0.00'. 780,000.00 0.00 780,000.00 0.00_ 756,600.00 A W 13 26.000.00 884,000.00 85.59% -. 28 04117 -21 -21 -0004 5601 GLENWOODAVE 201002 1,600,000.00 1,600,000.00 0.00 1,751,000.00 0.00 1,75100 0.003 0.00 1503,000.00A W 35 8600.00 1,5 91,400. 00 94.45% _ .__._ .-.. _ __..... .�__._... . 86 05 116 -21 -22 -0063 7701 62ND - AV - EN 200912 860,000.00 869,022.00 0.00 1,200,000.00 0.00 1,200,000.00 0.00 830,000.00 A M 28 6,200.00 862,822.00 INCL _ 0064,0065 &0066 1 96.20 42 26 028 -24 -14 -0124 6532 16TH AVE S 201007 957,000.00 957,000.00 0.00 1,123,000.00 0.00 996,000.00 0.00 910,000.00 A W 14 14,000.00 943,000.00 1 X34 22- 117 -22-42 -0007 13401 LAKE ST EXTENSION 200912 2,625,372.00 2,625,372.00 0.00 2,035,000.00 0.00 2,035,000.00 0.00 2,448,000.00 A W 36 140,000.00 2,485,372.00 96.50% 24 29- 028- 24-21 -0006 6300 YORK AVE S 201002 1,739,750.00 1,739,750.00 0.00 1,932,600.00 0.00 1,932,600.00'. 0.00 1,700,000.00 A W 22 24,000.00 1,715,750.00 99.08% 20 11- 027 - 24-14 -0073 8843 18TH AVE S ,201008 260,000.00 264,422.00 0.00 252,200.00 0.00 201,700.00, 0.00 261,000.00 A W 4 2,000.00 262,422.00 S4,422 IN SPECIALS 99.46%- 20 15- 027 -24 -32 -0008 325 98TH ST W X01001 2,588,000.00 2,588,000.00 0.00 2.646,000.00 0.00 2,646 000001 0.00 2,460,800.00 A W 42 119,400.00 2,468.600.00 99.68 %1 48 28- 119 -21 -24 -0003 5700 73RD AVE N 2 0_1007 4.850,000.00 4,850,000.00 0.00 4,034,400.00 0.00 4,800,000.00 0.00 4,800,000.00 A W 96 144,000.00 4,706,000.00 102.00 %' 28 04- 117 -21 -21 -0006 5747 GLENWOOD AVE 21006 1,548,000.00 1,548,000.00 0.00 1,809,000.00 0.00 1,809,000.00 0.00 1,651,000.00 A M 36 52,400.00 1,495,600.00 INCL 0008 110.39% Number of Sales: 11 Median: 98.5% Mean: 96.5% Aggregate: 97.4% COD: 5.4% 29 l JANUARY ■ II _ Helping Yo u ate Today's Commercial Real Estate Market • . ' EXECUTIVE SUMMARY....... 1 OFFICE ............................. 2 �. Space users easing back / into market MEDICAL OFFICE ............... 3 / Remains stable with 90,000 sq. ft. / ® of positive absorption (. I, 1P INDUSTRIAL , bu 4 Vacancy still hig but leasing / and sale activity picking up LAND . ............................... 5 ` Demand driven by opportunistic users, build -to -suit needs RETAIL ............................. 6 Stabilizing as absorption turns positive and vacancy . declines slightly MULTI - FAMILY .................. 7 Apartment market fundamentals recovering, but investment activity remains slow INVESTMENT AND ............. 8 CAPITAL MARKETS Recovery inching along, focused on high - quality properties, distressed assets LOCATION The "Twin Cities" of Minneapolis and St. Paul form the core of a metropolitan region encompassing 6,046 square miles and consisting of 13 counties: Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, Washington, Isanti, Chisago, Sherburne and Wright in Minnesota, as well as Pierce and St. Croix counties in Wisconsin. The Minneapolis /St. Paul metro area ranked ninth among major metro areas in the American Institute for Economic Research's 2009 College Destinations Index, which gives prospective students an idea of an area's attractiveness versus an institution's attractiveness. POPULATION According to ESRI* 2009 population estimates, the Minneapolis -St. Paul MSA (Metropolitan Statistical Area) ranks 16th in population in the United States with a population of 3,314,039. INCOME According to 2009 ESRI estimates, the Twin Cities' median household income of $73,045 is ranked ninth among the top 50 most populous MSAs. HOUSING PRICES The Twin Cities median single - family home price (as of third - quarter 2010) is $171,400 compared with $177,700 at the end of 2009. (Source. National Association of Realtors) BUSINESS STRENGTHS Major business strengths in the Twin Cities include a highly educated workforce, excellent ' transportation services, a diverse economic base and available capital. The metro area is home to 20 Fortune 500 companies representing a broad spectrum of industries. The Minneapolis/ St. Paul area's employment base does not rely on any single industry, which allows it to weather recessions and economic downturns in specific industries. r The Minneapolis /St. Paul metro economy is the 14th largest in the nation, according to a 2009 report by the U.S. Bureau of Economic Analysis. l Forbes magazine ranked Minnesota No. 15 on its 2010 list of top states for business. l TWIN CITIES LABOR FORCE, EMPLOYMENT & UNEMPLOYMENT • Employment labor Force • Unemployment Rate 7t 7 8 s- 5 1.75 4.1 4.1 -. 4 Z 1.7 2 f' _ 39 3.9 3 F- O w 1.65 - _._.__. ______ _____.__ _ -- 2 w 1.6 1 00 01 '02 03 '04 '05 '06 '07 '08 '09 '10 Source: The Bureau or Labor Statistics 31 * Environmental Research Systems Institute Ex,ecutive Summary ■ NC3 RTHMARQ Hard Landing: Twin Cities Commercial Real Estate Market Hits Bottom, 2011 Looking Like a Turnaround Year Less was definitely more for the of overall positive absorption. Overall sales are increasing. Select retailers are Twin Cities commercial real estate vacancy remained steady at 19.9%. stepping up their efforts to purchase e markets in the second half of 2010: choice locations. less drastic increases in vacancy rates, Retail vacancy dipped below 10% less negative absorption and less on the heels of a modest rebound in Investment sales activity improved uncertainty. It's a signal that the space demand, resulting in 374,000 sq. in the second half, although the market has likely bottomed out. ft. of positive second -half absorption. number of transactions taking place However, this bottom is much lower High - quality retail centers experi- remained well below average across than those of recent memory —the enced increased demand, allowing virtually all property types. Indica- ' lowest in perhaps 20 years or more. landlords to hold —and in select cases, tions were that buyers and sellers were Overall market vacancy increased raise — rental rates. drawing closer together on pricing. , slightly, finishing the year at 15.8% for Industrial market fundamentals Construction costs may increase in the combined office, industrial and re- remain weak, reflected by an upward 2011, due both to increased activity tail markets. That was up just 0.5�� on tick in vacancy to 17.2% —the highest and higher costs for materials and the year, however, after soaring more mark in more than a decade. Negative energy. The first signs of rising ' than 3% between 2008 and 2009.This absorption totaled 216,000 sq. ft. in the construction costs appeared in the is progress in terms of a slower pace of second half. fourth quarter of 2010, following 18 decline, which is also reflected in the months of flat pricing. , absorption numbers —just 365,000 sq. The medical office market is on the ft. of negative absorption was posted mend, evidenced by a decline in the ON THE HORIZON in 2010, versus 4.3 million square feet overall vacancy rate to 11.1% and The overall market for commercial , of negative absorption in 2009. 90,000 sq. ft. of positive second -half real estate appears to have bottomed absorption. out in the Twin Cities. However, Demand for office space began to per - fundamentals are still very weak and colate in the second half, resulting in a The market for speculative land recent economic indicators have set ' modest but encouraging 202,000 sq. ft. remains cold, but user -driven land the stage for a slow rebound in 2011. ABSORPTION, CONSTRUCTION AND VACANCY In this environment, landlords are , Twin Cities office, Retail, Industrial, Medical* Mufti- Tenant Market advised to remain aggressive to attract in Absorption in Construction a Vacancy and retain tenants in the coming year. 10 20 Rental rates will continue to be under , 8 801 851 downward pressure, even as demand 726 15.6. 16 picks up. 126 12.1 6.84 12.2 6 _ _.:_J13 --- _____ 11.7 11.5 89 497 433 4.31 ° 4.38 More investment sale activity appears 4_. _ 0 4 3.18 � 4* z.no - --------- -- 6 to be on the horizon in 2011. Demand 2 - - -1 - - --IS - T31 - 203 � 15 _ L85 ----- __ 4 for commercial real estate is strength - 0 0.18 0 z ening and credit markets are easing. w 11 ' 121 __ --__ - _ ___ _ .___ _ 037 (41 > LL u, - " -- - - - - -- Overall recovery is on the way, but it a 141 _ __- -_ _ -- -- _ _. -. -- _- -__ -._ -- -._ -._ 181 W will be a longer —and bumpier —ride y 181 ( 423) w than those of recent times, perhaps , — -- 1121 a 1 00 01 '02 '03 '04 05 . 06 '07 . 08 09 10 even more challenging than that of the Source: NorthMarq *Medical data included as of 2002 early 1990s. ■ Additional charts and complete submarket reports available at w.northmargco ww mpass.com e ffi c e ■ - - w 1 Space Users Easing Back into Twin Cities Multi- Tenant Office Market The theme for the second half of the market recorded just 7,000 sq. ft. would probably be "taking advan- of negative absorption for the year, MORE ONLINE tage," whether in terms of trading up compared to a 1.8- million- square-foot in quality of space or taking advan- contraction in 2009. • Large space users active in ' tage of favorable economics. Southwest STABILITY RESURFACES IN • West End's "halo effect" Virtually every submarket saw some MINNEAPOLIS CBD evidence of recession -weary space Slowly but surely the downtown • St. Paul landlords still struggling users coming back into the market. Minneapolis office market is coming Landlords, weary of too few deals and back to life. It's especially evident in too little cash flow, proved that they the Class A market, where a hand- ' were ready to deal. ful of leasing transactions boosted zone or at Plymouth Corporate Center absorption to positive 291,000 sq. ft. in Plymouth —a repositioned building For the most part, larger space users in the second half while reducing the with something new to offer tenants. ' were the most active, especially those Class A vacancy rate to 11.7% / 14.97o. with the wherewithal to lock in long- Not that the Minneapolis CBD is The West submarket finished the year term leases. Smaller space users seem totally out of the woods yet. Overall with a 15.37o overall vacancy rate, the to be still treading water, economically vacancy is still 19.1 %/21.5%, but the lowest in the Twin Cities, and 13.17o ' speaking, and most are just negotiat- downward slide seems to have hit for Class A space. ing with their existing landlords. bottom. Vacancy along the Nicollet Mall corridor is below 5% again. ON THE HORIZON ' Overall vacancy topped out at 19.9 17o, Tough times may not be over for land - unchanged since the summer. Even WEST END SHAPING UP AS WEST lords in the Twin Cities office market, so, it's evidence that the market has SIDE SUCCESS STORY but for the most part they're not bottomed, since vacancy had steadily The West End in St. Louis Park is nearly as bad as they were a year ago. ' increased since 2007. More evidence emerging as one of the most desirable Based on current projections, 2011 is of a bottom —and even the first hints new business districts in the Twin shaping up to be a decent year for of recovery—is seen in the 202,000 sq. Cities. Most of the office leasing most submarkets. Overall absorption ' ft. of positive absorption posted in activity in the West submarket could be as much as positive 700,000 the second half. More impressively, occurred either in the West End trade sq ft in the first half and positive 1 million square feet for the year. The ' OFFICE ABSORPTION, CONSTRUCTION AND VACANCY West, Southwest and Minneapolis CBD submarkets seem to be best -posi- ■ Absorption ■ Construction • vacancy tioned for growth in 2011, followed by 5 . ___ saa. 9ss _- _ —_- ise iss n.0 20 the Northeast and the South/ Airport ' Z a aos _ 127 _. _____. �_ _____ ' i52_.�5z._ X _ submarkets. The St. Paul CBD and the J Zi 3 _z� ----- ..------ _-- .---- _..- _- - - - -__ __--- _-- - - - - -- __ - _ - - .— 12 Northwest submarket will struggle to - o.0 2oa —_ - _ �- see a turnaround in 2011. 2 - ' tai - - -- - e Z 125 135 w 1 - --- - -- -arm - -- -- - - - Q60 Os5 0 52 .. _ - a Q LLJ ° °� 0.23 o.ta 0 -1a ° 000 F Rental rates will likely remain vola- LU nl _ 10.151 (0°°I (a) the and depressed until more excess - - - d space is soaked up, and 2011 —at least rn (2) __ tfi831 - — - — . -- - -- - 1.63) 00 01 '02 '03 04 ro5 .06 07 06 09 to the first half —might seem to be only Source: NorthMarq slightly better than 2010. ■ 2 Additional charts and complete submarket reports available at www.northmargcompass.com IN Medic O ffice NORTHMARQ 1 � Despite Softness, Medical Office Market Appears ReIatively 'Re cession- Resistant' While not immune to the effects of the PERIPHERAL LAND PRESENTS , recession and capital market crisis, POTENTIAL OPPORTUNITY MO ONLINE t the Twin Cities medical office market Due to the recession and softening remains stable. Of the 5.76 million land prices, peripheral land around - Off campus vacancy drops square feet in the market, 640,080 hospital campuses is a potential - Healthcare providers seek , sq. ft., or 11.1 %, is vacant. Absorption opportunity for redevelopment at retail sites was 90,220 sq. ft. in the second half, reduced prices. Examples include primarily the result of two significant- property adjacent to St. John's campus - Downward pressure on rates ly preleased buildings opening. For in Maplewood, United Hospital's - Reform will drive demand ' the year, absorption was 93,902 sq. ft. campus in St. Paul and Fairview -Watch consolidation trend Southdale's campus in Edina. These While the medical office market peripheral, off - campus sites pose , essentially remained stable overall, it potential opportunities for hospitals continues to outperform the general or users looking for alternatives in office market, which reported a 19.9``% typically tight markets. projects, are partnering with third- ' vacancy rate. party developers to help finance and SOUTHWEST SEES DEVELOPMENT develop projects. This is largely due to favorable Two off - campus developments demographic trends, including aging are underway in the Southwest ON THE HORIZON ' baby - boomers' need for more medical submarket — Ridgeview Medical Demand for space in the next 6 -12 services. This need, combined with Center's Two Twelve Medical Center months will be moderate. Absorption the anticipated demand resulting in Chaska and the Savage Medical will likely be flat to approximately , from healthcare reform, will provide Building. Two Twelve Medical Center 50,000 sq. ft. Part of this lack of resistance to the trend of increasing will feature the state's first free- activity is due to the "retail effect" vacancy associated with the current standing emergency room and is as more retail sites are evaluated as , recession and will help support the first major project along the new options for clinics and outpatient uses. expansion in the medical office market Highway 212, which has excellent in the future. access to the Southwest and is Downward pressure on rents and expected to be a major growth increasing concessions will continue, , On- campus space reported an 8.5% corridor. Ridgeview teamed up particularly in pockets with higher vacancy rate and 41,663 sq. ft. of with private developers on the vacancies. absorption, largely due to the open- building, which is a growing trend. ' ing of the fully leased Fridley Medical Many healthcare systems, due to a Although some pent -up demand Center on Unity Hospital's campus. restriction on funds for capital exists, healthcare providers are strapped for cash and development ' will remain slow. Since capital re- MEDICAL VACANCY AND ABSORPTION mains frozen, providers are focusing TOTAL VACANT % %VACANT LAST12MOMS on their existing business and looking BUILDINGS NRA SPACE VACANT W ISUBL E AS E AB for more strategic ways to compete. ' ON CAMPUS 38 2,888,721 244,653 8.5% 9.3% 74,669 OFF CAMPUS 64 2,875,705 395,427 13.8% 14.4% 19,233 Consolidations will continue in an TOTAL MEDICAL 102 5,764,426 640■8 11.1% 112% 93,802 effort to drive efficiency. Acquisitions ' will continue on strategic practice Source:NorthMarq See www.northmarqcompass.com for historical vacancy and more submarket highlights groups as capital becomes available. ■ Additional charts and complete submarket reports available at www.northmargcompass.com 3 ' Industrial NORTHMARQ Industrial Vacancies Still at Record Highs, but Leasing, ' Sales Activity Pick Up Despite higher levels of leasing and down the vacancy rate to 15.5 %. The ' sales transaction activity, tenants Northwest boasted the lowest bulk MORE ONLINE continued vacating more space than vacancy rate at 12.1% vacancy. Office they leased, resulting in 216,321 sq. ft. showroom product was hit hard with • User - building sales take off ' of negative absorption and 17.5 a 20.1% vacancy rate. Some tenants • Expectation gap narrowing million square feet of vacant indus- vacated showroom to upgrade to tra- trial space market -wide. The vacancy ditional office space, taking advantage •Companies leave Minnesota rate increased to 17.2 %, marking the of deals offered by landlords in a weak • Getting creative with space users highest rate in more than a decade. office market. Office warehouse prop- . Development is at a halt erties posted a 17.2% vacancy rate. While some consolidations, downsiz- ' ings and closings occurred, the worst "HAVES" AND "HAVE -NOTS" appears to be over. The consensus is Anytime there is a softening with that the market is near the bottom and 20% vacancy rates, the best buildings vacancy rates, most landlords will could soon begin a gradual upward lease up first at higher rates and the likely be aggressive in filling va- climb. The Southwest submarket weaker buildings struggle. Many of cancies. In the Southwest alone, 36 boasted positive absorption for the the deals signed were in higher -qual- options of 50,000 sq. ft. or larger exist. first time in two years, pushing down ity, 24- foot -clear properties. Tenants This competition among building ' its vacancy rate to 17.3 %. The North- with the resources are moving into owners is forcing them to lower rates west remained the tightest at 16.1% newer, upgraded buildings while and increase concessions. vacancy. more functionally obsolete properties ' or those in less- sought -after locations ON THE HORIZON BULK FLEXES ITS MUSCLES will continue struggling. Absorption is expected to be approxi- Bulk warehouse properties showed mately 50,000 sq. ft. in the next six the biggest improvement with 129,603 DOWNWARD PRESSURE ON RATES months. By year -end 2011, it could sq. ft. of positive absorption, pushing Until the market sees improving jump to positive 550,000 sq. ft., likely led by activity in the Southwest and Northeast. Users with the resources ' INDUSTRIAL ABSORPTION, CONSTRUCTION AND VACANCY will continue taking advantage of market opportunities to upgrade ■ Absorption ■ construction • Vacancy facilities and /or renew space at dis- - -- - 20 counted rates. 17.2 q. 155 152. .... 3.77 11 8 - 16 Ta U = —_ _ 331 13.3 13.0 13.0 123 Rates will be flat with downward 3 _ 11.9 0. _ 3 2.16 pressure, and concessions will es 2 ' 1.93 1 - -- .... - 9 increase. Once vacancies start improv- - . -- _ - .__.._ - 372.. z 124 1 -- --- -. -. -u 9 - - - -- - -- 1.os 1.10 1.01 - -- a in& rents will likely firm up in the -i 0.x1 0.55 OA3 tightest pockets. But until then, expect o 0M 0 of 0.00 o z $ P P ' w (o.aol LL a some very aggressive, select deals cut 111 - - -_ ___ _.___ -___- ____ ____ __ __._ (0.711 ( in 2011. Functionally obsolete proper - 9 w ties will face an even more challeng- a 21 - - - - - - -- - _...-- - - -191 c, cc W ing market, and more unconventional (3) ( 12) -- -- 12 d . 00 Ol '02 03 . 04 05 . 06 '07 '06 09 10 users could take long -time vacancies Source: NorthMarq moving forward. ■ 4 Additional charts and complete submarket reports available at www.northmargcompass.com Land NC3RTHMARQ Land Purchases Continue to be User - Specific; Opportunistic Retailers Industrial Build -to -Suit Users Driving Demand for commercial land is being potential site for a significant specu- driven by users such as expansion- lative development —a large bulk ' minded retailers and industrial users warehouse property that would be with specific build -to -suit needs in uniquely positioned to meet the needs - Farmers harvesting more than corn mind. Speculative land prices appear of larger space users in the Northwest - Lender influence in the market ' to be near the bottom, after declining submarket. - Build -to -suit activity on the upswing by as much as 80% from their 2006- 2007 peaks. On that note, the new Industrial build -to -suit activity is also - Highlights for Retail, Industrial, ' pricing floor for land can be readily on the upswing. Companies with Office, Residential and Agricultural gauged by looking at prices for specialized space needs are looking land farmland adjacent to the Twin Cities. at this as a good time to build. SALE ACTIVITY STILL SOFT DISCOUNTED LAND VALUES , BUT ON THE UPSWING ATTRACT RETAILER INTEREST interest from users looking for build - Despite continuing softness in land Big -box retailers such as Menards and to -suit sites for specialized space in ' prices overall, land sales are relatively Walmart are taking advantage of low the office, industrial and medical light and sporadic, particularly for land prices in various submarkets to office markets. raw speculative land. Owners who both trade up and expand. Walmart ' bought land on speculation during recently announced plans for a new On the residential side, there will the peak have seen the value of their store in Blaine and also purchased likely be an increasing number of investments drop below their original the troubled Four Seasons Mall, a opportunities for buyers to purchase , purchase prices. Many were forced to well - located, multi-tenant retail center well - located in -fill sites in a variety sell or lost control of their land to the in Plymouth with redevelopment po- of communities. These are sites that lender. The survivors are clinging to tential. In the Southwest submarket, come to market due to life -cycle their properties in anticipation of a home improvement retailer Menards changes such as an individual estate ' rising tide of new development that is expanding its store on 60 acres of sale, cash requirements or retirement. will lift land values back to pre -col- land in Eden Prairie. This develop - lapse levels. Unless they have a specific ment is notable in that the company There will likely be an active market , motivation to sell, they're more likely is taking on some developer respon- for agricultural land in the outlying to hold rather than take a loss. sibilities since the site is large enough suburbs. Assuming that the farm to accommodate a variety of other, economy remains strong, farmers will , BUILD -TO -SUITS BOUNCE BACK AS non - Menards related retail outlets. be motivated to increase their output INDUSTRIAL USERS LOOK by adding more land for production. FOR SPECIALIZED SPACE ON THE HORIZON Additional interest will be forthcom- New development is virtually all New development will remain user- ing from investors who want to , user- driven at this point in the recov- driven. Select retailers will continue to accumulate land at relatively low ery cycle. With vacancy still in the aggressively seek new opportunities for prices now, before the next cycle of mid - teens, most new industrial land expansion and repositioning, hoping to development kicks into gear. , development is on hold. There are a strike while pricing is still low. Much of few exceptions, however. In Rogers, this will be redevelopment - focused. One of the key question marks for for example, Liberty Property Trust 2011 is whether lenders will more ' has announced plans to purchase a Greenfield development will lag, aggressively market land they now 55 -acre tract of industrial land as a although there will be continuing control, either directly or indirectly. ■ Additional charts and complete submarket reports available at www.northmargcompass.com 5 Retail NORTHMARQ Twin Cities Retail Centers Stabilizing, Reporting Uptick in Leasing ' Activity; More Absorption Expected in 2011 Signs indicate future growth for aggressive lease terms to backfill II' ' Twin Cities retail centers as the retail excess space. All but the very prime MORE ONLINE downturn appears to be turning the centers cut rates and /or are offering corner. Some retailers that undertook concessions. Progress is being made - Select restaurant concepts growing ' cost - cutting strategies are now leaner, as users take advantage of favorable - Retailers scouting locations stronger and better - positioned to lease terms, but a glut of big -box - Development at record lows capitalize on today's attractive inventory remains. Some could be - Grocers being squeezed leasing terms. Some are using this carved up to attract smaller retailers. ' advantage to upgrade locations or expand into markets that were NOT ALL CENTERS CREATED EQUAL previously unavailable. Premier centers are seeing the most RATES REMAIN LOW ' activity; as a result, strong centers are Rental rates dropped as much as 30% Market fundamentals are slowly becoming stronger and weak centers from high -water marks, in some cases. improving, and demand for retail are becoming weaker. The top -tier While overall rates have not changed ' space moderately increased. Follow- properties are holding or pushing much during the past year, conces- ing 374,163 sq. ft. of positive absorp- rates. Meanwhile, pressure exists to sions are softening, so net effective tion in the second half, led by activity reposition well - located but struggling rates are improving for landlords. at community and neighborhood centers into retail better suited to Retailers, however, will continue ' centers, the vacancy rate dropped today's market conditions. keeping landlords competitive on slightly to 9.8 %. For the year, the leasing deals. market recorded a total of 255,566 Other weaker properties could be ON THE HORIZON ' sq. ft. of positive absorption. "re- purposed" into non - retail uses like schools, churches, or government or While leasing activity remains Many landlords continue to offer medical facilities. relatively slow compared with peak years, it definitely improved from a ' year ago and is gaining momentum. 700,000 - 800,000 sq. ft. of absorption RETAIL ABSORPTION, CONSTRUCTION AND VACANCY is expected in 2011, led by activity in ' ■ Absorption ■ Construction • Vacancy community centers' empty big boxes. Vacancy rates will be chipped down, 101 and limited development could occur. 5 10 Due to the lead time needed for new __ 4.5 - - -- - -- - --- s development, there could be a period a . _ --- -- 3-8 -- -.- 7.9 s of time where vacancies are tight and 3.5 ¢fl . _._... _ ss.__ 7 retailers could struggle to find space 3.17 63 ' 3 3.00 - 3.10 5.7 6 - - - -- __._ g in the next 18 -24 months. 51 Z 25 - -S 5.0223 2.35 _ - - - -- - 5 Z 173 205tsa 204 a Healthier centers will likely become g 15 1 1u _ z healthier, and there will be upward ' w 1 1 1.33 1.31 0.93 12 2 Q pressure on rates at the best centers. u, - — LL F The remaining centers' rates will a 5 0.37 1 o 00 0.08 0 w remain flat, but concessions are wan- d 155) iozol w ing in some cases. More repositioning ' y Isi 'oo '01 'oz 03 '04 05 . 06 '07 oe '09 i-0- (1) and re- purposing of struggling centers Source: NorthMarq is likely. ■ 1 6 Additional charts and complete submarket reports available at www.northmargcompass.com Multi Family N ORTHMARQ Apartment Market Fundamentals Recovering; Landlords Seeing Improving Business Conditions The Twin Cities apartment market's weak market fundamentals and lack ; I O NLINE vacancy rate dropped for three of financing, several projects moved consecutive quarters to 4.2 % —a two- forward. Deliveries in 2011 will only year low. This is a significant decrease be approximately 500 -600 units, • Factors driving apartment rentals from the 6.4% vacancy reported including CityWalk in Woodbury, • Vacancy rates by market/city , one year ago and a high of 7.3% at 412 Lofts in Dinkytown, Mill District year -end 2009. Improvements are City Apartments in downtown • Impact of historic tax credits widespread, though urban properties Minneapolis and F1oCo Fusion Apart- ' are generally performing better than ments in Minneapolis. Development suburban properties. in urban, high - density pockets is still more likely to progress than suburban INVESTMENT ACTIVITY IS SLOW In analyzing vacancies by rental rates, projects. Urban developments under- Institutional investors are seeking ' the lowest vacancy rate —at 3.6 %— way include the Flux Apartments and core, well - leased properties, and low was for units in the $900 - $1,000 price a project at Lake Street /Knox Avenue, interest rates and aggressive agency range. The highest vacancy rates —at both in Minneapolis' Uptown. lenders are making acquiring multi- ' 4.7% —were for units priced between family assets attractive. However, $600 and $700 and more than $1,400. While a couple of larger projects will few local properties are for sale. One be completed in 2012, it is difficult to reason is that refinancing options are Average market rents were stable at estimate how many units will open very attractive, giving owners the , $905, a drop of 0.4% from one year in 2012 -13 because many rehabilita- opportunity to pull out cheap capital ago but up slightly from $902 the tion and new construction deals are and deploy it elsewhere. This has put previous quarter. Concessions are stuck in the financing phase. Financ- a lid on transactions. The market's ' waning, except for weaker pockets. ing is primarily offered through HUD, pent -up demand is creating strong which is backed up due to the high pricing opportunities for sellers DEVELOPERS KEPT NEW SUPPLY demand for capital. This may contrib- looking to capitalize on the lack of IN CHECK ute to a slowdown in the pace of new investment offerings. ' While construction slowed drasti- units. Meanwhile, developers with A+ cally during the past few years due to projects are finding access to capital THE HORIZON through institutional partnerships, V will likely flatten in 2011. , which was nonexistent in 2009. The market is currently at equilibrium. MULTI - FAMILY VACANCY The increased demand for apartments STUDENT HOUSING IS NICHE will likely be offset by new construe- , e tion, which is now warranted, and 7.3 7.3 Student housing is in high demand i due to stable rents and occupancy projects are in various stages of plan- e � 6 - rates, and developers are obtaining rang, financing and development. 5 47 az a.2 financing for these niche projects. Rents will tick up slightly and cones- Sydne ' ai Doran Companies completed S d � 4 P P Y Y sions will continue disappearing. Rent U a Hall in Dinkytown and launched the growth is expected to be approximate- Y s nearb 412 Lofts. Solhaus' Curt , 2 ly 2% in 2011. The job engine is still not W Gunsbury is developing student strong enough to push rates higher. U i housing near the University of Cr LU IL o oa '05 os 'o� oe '09 io Minnesota, and Opus purchased a The market will see opportunistic site near the University to develop sellers looking to take advantage of ' Source: Apartment Trends by GVA Marquette AeMsors Stadium Village Flats. the lack of new offerings. ■ Additional charts and complete submarket reports available at www.northmargcompass.com 7 • Investm Mark ■ - - w Slow Thaw Continues for Investment Market, Recovery Inches Along Recovery is underway in the Twin decline in the vacancy rate to 4.2 %. M ORE �® Cities commercial real estate invest- Institutional -grade apartment com- ment market, but it's proceeding at plexes are in demand by investors, a crawl. and four such transactions took place - Credit markets still tight during the second half. • Capital for real estate investment Most of the major transactions taking will be abundant place in the market are at either the Private capital for investment is high end or the loin end of the abundant across the country, and - Highlights for Retail Office, ' investment spectrum. On the high institutional investors are starting Multi family, Industrial, and side are the quality properties such to feel pressured to put capital into Capital Markets as well - positioned grocery- anchored commercial real estate again. That's ' retail centers or well - leased Class a major change from just six months A office properties. On the low side ago when many institutional are the distressed assets — properties investors were pulling back from transactions with an eye to rising with serious physical or financial investing in commercial real estate. cap rates and a higher interest rate issues such as a foreclosure or lender Publicly -held real estate investment environment over the next five years. workout. trusts (REITs), with their ready access to low -cost capital, are among the ON THE HORIZON 1 MULTI - FAMILY ROARS BACK most aggressive investors nationally Now that the leasing markets are Debt capital continued to flow and regionally. stabilizing, investment demand is into the multi- family market due starting to pick up again. It hasn't to ongoing liquidity provided by Cash flow is of primary concern to translated into a lot of new sales ' government - sponsored financing buyers. They are willing to acquiesce volume, but that should change in agencies Fannie Mae and Freddie to lower projected IRRs (internal rates 2011. Buyers are lowering their expec- Mac. Multi- family emerged as the of return) in exchange for steady, tations for investment returns in the ' strongest performing property class in predictable cash flow and credit. real estate market and focusing more the Twin Cities, on the heels of a steep Many buyers are underwriting narrowly on properties that deliver solid fundamentals such as predict- ' able and positive cash flow, supported SALES VOLUME AND CAPITALIZATION RATES by good - quality tenants. Twin Cities Office, Retail, Industrial and Mufti- Family Properties Market Volume • Cap Rate Ongoing softness in the leasing markets will keep lenders in a con- servative mode, albeit with a slightly $5 84_ .— -_ - - -- - - -------------- - - - - -- - -- - - - - -- 6.5 more open underwriting stance. ' $ o n" t Changes in accounting standards may $4 __ _ . __ _ __ _ .._ rg _. 8 take the wind out of the sale - leaseback 7. z market, since companies may opt to S3 - - i 7.5 J -- _._.__..__... � / own rather than lease properties. ' J- .�.......__ W az ° O F Distressed asset sales will likely LU $1 - - 6.5 W continue to emerge, especially in the °> so °5 office and retail sectors. More office DEC'03 DEC'04 DEC'05 DEC'06 DEC'07 DEC'08 DEC'09 DEC'10 6 property owners are expected to test Source: Real Capital Analytics, Inc. I the sale market in 2011. ■ 8 Additional charts and complete submarket reports available at www.northmargcompass.com Helping You Navigate Today's I Real Estate Market ABOUT NORTHMARO: NorthMarq offers commercial real estate services for investors, developers, corporations and tenants. The , company provides mortgage banking and commercial loan servicing in 32 offices coast - to-coast, with an average of $7 billion in annual production volume and services a loan portfolio of nearly $40 billion. NorthMarq manages more than 60 million sq. ft. of ' retail, industrial and office space in 22 markets around the country and handles more than 7,500 leasing, sales and mortgage banking transactions annually. For more information, please visit www.northmarq.com. REGISTER FOR OUR COMPLETE ONLINE REPORT: Visit www.northmargcompass.com. Additional charts and complete submarket reports are available online. Definitions EXECUTIVE SUMMARY INDUSTRIAL ' Absorption: The difference in occupied space from one time frame to another. Bulk Warehouse: These facilities have 24' or more clear height ceilings and Vacancy: The percent of space that is not leased. are generally located near major transportation corridors. OFFICE Office Warehouse: Facilities with 16' -24' clear height ceilings. ' Class A: Generally 200,000 sq. ft. or larger, constructed after 1980, offering a Office Showroom: Buildings typically offer smaller bay sizes and heavier than host of business /support amenities and providing a strong and identifiable Iota- normal finishes and landscaping. Typical clear height ceilings are less than 16'. tion and /or access. Class A properties in either of the CBDs are skyway- RETAIL connected. In the smaller submarkets in our report, Class A buildings may be Community Centers: These centers are greater than approximately 100,000 defined as such simply because they are the highest quality buildings in the area sq. ft. and have at least two anchor tenants, which may include a general in terms of finish, location and amenities, although they may not fit the standard merchandise store (as a major tenant) in addition to a supermarket or drug store. definition of Class A as far as square footage and age, for example. Limited small shop space is occupied by a mix of service - oriented tenants and , Class B: Older Class B buildings are sometimes renovated and in a good soft -goods retailers. This classification also includes power centers, which are location. Newer Class B buildings are smaller in size and in a non -prime location. built around large format category killers such as electronic, home improvement May include skyway linkage if located in a CBD. and sporting goods stores. Class C: Older, unrenovated building of any size in average to poor condition. Neighborhood Centers: Usually anchored by a grocery store and /or a ' May include skyway linkage. drug store. This type of center fulfills the day -to -day needs of the surrounding neighborhood, is located at major street intersections and is approximately 30,000 MEDICAL OFFICE to 100,000 sq. ft. Medical: A property where 50% or more of the tenants are medical- oriented in Regional Centers: A major shopping area generally with two or more anchor a multi- tenant building greater than 20,000 sq. ft. Generally marketed to medical department stores and a variety of additional shops. These centers draw custom - tenants and have the infrastructure capable of accommodating medical tenants. ers from a broad geographical area. Campus: Connected b a tunnel or s Specialty Centers: These centers are un- anchored and have a theme or On Cam ' p y skyway to a hospital or major ambula- specialty tenants with a different character than the other center types. These tory surgery center. centers are not located in CBDs. These centers may be a part of a larger Com- Off Campus: Not connected or immediately adjacent to a hospital or major munity Center development. ambulatory surgery center. Minneapolis or St. Paul CBDs: Centers located in the Central Business District (CBD) of Minneapolis or St. Paul. This includes space located on the ' skyway or street fronts. To properly reflect the status of these submarkets, some of these centers may be smaller than 20,000 sq. ft. due to the smaller size and scope of this market. DISCLAIMER: This report was created by NorthNlarq Real Estate Services and Capital Markets experts using Twin Cities commercial property data from the , last six months of 2010. The data used for this report has been obtained from sources which we deem reliable. While every effort has been made to report accurate data, NorthMarq cannot guarantee the accuracy of this market report. Furthermore, we cannot assume responsibility for any omission of data which may occur. It is our intent to provide the best possible information regarding the office, industrial, land, retail, multi- family and investment markets while leaving the reader the responsibility of further verification before using this report for business and /or financial decisions. , This report includes information for multi- tenant office, industrial and retail projects greater than 20,000 sq. ft. and multi- family for -rent properties. Not included are owner - occupied, government or single- tenant buildings. Not all information and insights we've collected can be published in any given volume. 1 40 M arket x e i t s Minneapolis • St. Paul NORTHMARO LEADERSHIP r• Jeff Eaton 952 - 893 -8808 President, NorthMarq Real Estate Services Ed Padilla 952- 356 -0101 CEO, NorthMarq Capital and Investment YrS \ \\\ r'rrr iir L F � r udiu�uuhii Services BROKERAGE Mike Ohmes 952 - 893 -8838 Executive Vice President OFFICE INDUSTRIAL LAND Minneapolis CBD Southeast Metro Luke Appert 952 - 893 -8238 Sonja Breyfogle 612 - 305 -2144 Tony DelDotto 952 - 893 -8893 Lonnie Provencher 952 - 820 -8722 Paul Donovan 612 - 305 -2113 Lonnie Provencher 952 - 820 -8722 Jon Rausch 952 - 893 -8251 Brent Erickson 612 - 305 -2110 Tom Sullivan 952 - 837 -8657 Jaclyn May 612 - 305 - 2109 HEALTHCARE REAL ESTATE Jim Montez 612- 305 -2107 North Metro Stephen Brown 952 - 837 -8517 Kevin Peck 612 - 305 -2129 Todd Hanson 952 - 820 -8737 Chris Jacobson Mike Jacobso 952 - 837 -8520 952 - 893 -8845 Brent Robertson 612- 305 -2114 Jason Sell 952- 837 -8515 Chantily Malibago 952- 837 -8590 St. Paul CBD and East Metro West Metro INVESTMENT SALES Rob Davis 651 - 734 -2386 Bruce Hoberman 952 -820 -8775 Eric Bjelland 952 - 893 -8282 Eric King 651 - 734 -2385 Sydney Johnson 952 - 893 -8840 Scott Pollock 952 - 893 -7590 Tom Stella 651- 734 -2383 Dan Lofgren 952 - 893 -8227 Pete Rand 952 - 837 -8585 Brent Masica 952 - 893 -8231 Evan Richardson 952 - 837 -8681 South Metro Jason Meyer 952- 820 -8735 Lance Steiger 952- 893 -8863 Larissa Champeau 952-893-8847 Dave Paradise 952 - 893 -8226 Leah Truax 952- 893 -8825 Dan Gleason 952- 893 -8 884 Kris Smeltzer 952 - 837 -8575 Jeff Hart 952 - 893 -8855 CAPITAL MARKETS Chris Weirens 952 - 893 -8219 Jim Jetland 952 - 893 -8888 Jon Yanta 952 - 820 -8734 Brian Hennen 952 - 356 -0092 John McCarthy 952- 893 -7591 Jim Hoopes 952 - 356 -0106 Dan Nechanicky 952 - 820 -8765 Pat Minea 952 - 356 -0111 Zach Pettus 952 - 893 -8278 RETAIL Mike Padilla 952 - 837 -8710 Bill Rothstein 952- 893 -8214 Peter Armbrust 952 - 893 -8255 Dan Trebil 952 - 356 -0090 Tom Sampair 952- 893 -8283 David Daly 952- 837 -8607 Court Storey 952- 893 -8833 Jon Helm 952- 893 -8264 GIS & MARKET ANALYTICS Tom Tracy 952 - 921 -2021 Brad Kaplan 952 - 893 -8830 Dirk Koentopf 952 - 837 -8578 Dan Wicker 952 - 893 -8254 Jim Larson 952 - 837 -8637 Patrick Hamilton 952 - 837 -8574 Tom Martin 952 - 893 -8232 West and Northwest Metro Tricia Pitchford 952 - 820 - 8763 MARKETING COMMUNICATIONS Greg McMillan 952 - 837 -8577 Ned Rukavina 952 - 820 -8738 AND MEDIA RELATIONS Bob Revoir 952 - 893 -7586 Tedd Schuster 952- 837 -8529 Martha Nevanen 952 - 893 -7539 Avery Ticer 952 - 893 -7592 Ronn Thomas 952 - 893 -8230 Kathy Conniff 952 - 893 -8292 Info @northmarq:com • www.northmarq.com 3500 American Blvd W, Suite 200 • Minneapolis, MN 55431 •952- 831 -1000 � *� � �. > .r i � � cs�s ltara�ataa 3sa�tyttct •ssiMt � , M Ap /• r F �� a fso Isle 4 w � c Q 4� �F rr c .� � CD Cassidy 'I�urleY� ' Contents Metro Overview Dear Clients and Friends, pgs 2 - 3 ' 2010 was a year in which we embraced change. We made it through the toughest market cycle in decades, and are about to celebrate our first year as Cassidy Turley. Office Market pgs 4-8 Following our launch on March 1, 2010, Cassidy Turley has quickly become a leading commercial real estate services provider with 3,000 professionals in 60 offices nationwide. The company represents a wide range of clients —from small businesses to Industrial Market Fortune 500 companies, from local non - profits to major institutions. pgs 9 -11 ' Despite market conditions, our firm completed transactions valued at $17 billion in Retail Market 2010, and manages 430 million square feet on behalf of private, institutional and corporate clients and supports over 25,000 domestic corporate services locations. pgs 12 - 15 In the past 10 months, the firm enhanced its global service delivery outside of North ' America through its partnership with GVA. Multifamily Market pgs Multifamily With a breadth of enhanced services and an incredible depth of knowledge from our national team, Cassidy Turley remains committed to providing world -class market research. Local knowledge remains a critical component in understanding Investment Market the dynamics of commercial real estate. Cassidy Turley offers a wealth of in -depth pgs 20-22 information and insights on the markets that we serve, giving you the market intelligence to make sound real estate decisions. We analyze trends and relationships ' between key economic indicators and use that knowledge to predict the direction of the Sector Maps market. This information helps our brokers and clients develop a better understanding pg 23 of important issues and trends that impact commercial real estate locally and nationally. As always, we strive to create integrated, tailored solutions for our clients through a Key Definitions relationship- driven approach. Let our team at Cassidy Turley leverage our local market pg 24 knowledge and expertise to your advantage. ' Directory pg 25 Sincerely, ' Dennis Panzer Managing Principal - Minneapolis, Cassidy Turley 43 cassidyturley.com 1 1' Metro Overview Metro Overview 4,500 jobs as well. Mining, logging and The Twin Cities Metropolitan Area construction continued to shed jobs, ' continues its slow recovery from losing 2,200 jobs for the year. the recent recession. Consisting of approximately 3.3 million people There are 21 Minnesota -based firms across a 13- county area, it supports listed in the most recent Fortune 500, 1 a labor force of 1.86 million people. up from 19 last year. St. Jude Medical Unemployment in the metro area, and Alliant Techsystems have been as of January 2011, was 7.0 %. This added to the list, coming in at 445 and compares to 8.9% nationally as of 454, respectively. Among the largest February 2011, the most recent data Minnesota companies, Target moved up available. Both local and national in ranking from 38 to 30, and Best Buy unemployment rates continue a slow rose from 54 to 45. and tenuous downward trend. The economic recovery is proceeding at The Twin Cities gained 17,000 jobs in a slower rate when compared to those 2010. This compares quite favorably that followed recent recessions. GDP is 1 Market Indicators to a year- over -year loss of 52,000 jobs expected to grow at a rate less than 3% 2010 2011 reported in 2009. Service industries for 2011, compared to between 4% and Population —, accounted for 14,700 of that growth, 7% following the recession of the early with leisure and hospitality, and 1980s. As well, small businesses are 1 Jobs professional and business services struggling, and they typically represent Real Estate T leading the way with growth of 11,100 60% of job creation. Taxes and 5,800, respectively. Also notable 1 Crime was manufacturing, which increased by Home Construction Home Prices 1 Minnesota -Based Fortune 500 Companies 1 State National Company City Revenue (Millions) Rank Rank Twin Cities Job Growth (Loss) By Industry 2010 1 UnitedHealth Group 21 Minnetonka 87,138.00 1 2 Target 30 Minneapolis 65,357.00 Industry Growth 3 Best Buy 45 Richfield 45,015.00 w cW4G -.y. ZAOO 4 Supervalu 47 Eden Prairie 44,564.00 Mining. Logging and Construction 2 200 5 CHS 91 Inver Grove Heights 25,729.90 1 Manufacturing 4,500 6 3M 106 St. Paul 23,123.00 7 U.S. Bancorp 121 Minneapolis 19,490.00 s g 14,700 Trade, Transportation 8 General Mills 155 Golden Valley 14,691.30 and Utilities 600 9 Medtronic 160 Fridley 14,599.00 , Information 400 10 Land O'Lakes 226 Arden Hills 10,408.50 Financial Activities 400 11 Mosaic 231 Plymouth 10,298.00 Professional and 5,800 12 Xcel Energy 244 Minneapolis 9,644.30 Business Services 13 Ameriprise Financial 288 Minneapolis 7,946.00 , Educational and 100 Health 2 14 C.H. Robinson Worldwide 301 Eden Prairie 7,577.20 Leisure and Hospitality 11,100 15 Hormel Foods 340 Austin 6,533.70 Other services (Private 16 Thrivent Financial for Lutherans 342 Minneapolis 6,514.80 Only) -2'600 17 Ecolab 365 St. Paul 5,900.60 Government -3,100 18 Nash -Finch 400 Edina 5,212.70 1 Total 17,000 19 St. Jude Medical 445 St. Paul 4,681.30 Source: Mmnasola Department ofEmployment 20 Alliant Techsystems 454 Plymouth 4,583.20 aid Ec ornmc Development 21 PepsiAmericas 464 Minneapolis 4,421.30 ' Source: Fortune, Inc 44 cassidyturley.com 2 i Positive indicators in 2011 include in specific industries like renewable Despite the Fed's attempts to keep ' anticipated continued growth in energy. Overall, Moody's Analytics interest rates low, they continue to rise in corporate profits and a Production estimates 1.6 million jobs could be the U.S. and around the world. Whether Managers Index (PMI) of 56.6% (a added to the economy in 2011. We that is a function of elevated risks related reading above 50% indicates an expect growth in Minnesota as well. to long term U.S. debt or economic ' expanding manufacturing sector). recovery remains to be seen, although Consumer confidence is up. Worker Despite encouraging signs in the typically rising rates are a harbinger productivity surged from 2007 to 2009, short -term, the growing Federal debt of the latter. Therefore, if interest rate but leveled off in 2010, an indication casts a notable uncertainty on the increases are related to recovery, then that there may be pressure for employers future economic health of the country. metrics such as stronger absorption, to begin hiring again. Historically, divided government, lower vacancy and higher rents tied regardless of political party, has generally to real estate should be improving. ' Job creation will be a significant increased federal spending. The key is However, because of slow job growth determining factor on demand for what programs are cut or expanded, as and an oversupply of empty space, it is commercial real estate. All indications typically every federal job created results not likely that net operating income will are that job growth is occurring in 1.1 to 3 contractor jobs created in the keep pace with a sudden increase in ' nationwide, but the economy is far private sector. treasuries. from replacing the 6.7 million jobs that were lost during 2008 and The Federal Reserve will continue to Of course, there are factors other than ' 2009. It is expected that the national keep interest rates low, and Moody's interest rates to consider in determining unemployment rate will decline Analytics estimates that a second round the future direction of property values. In throughout 2011, and the metro area of U.S. Treasury bonds issued by the 2010, national investment sales volume, rate will mirror that. Government Fed could lower the unemployment though better than 2009, was still down ' stimulus is expected to help incent rate by a half percentage point. The 82 percent from its peak in 2007. In some of that employment growth. The increase in liquidity should also result other words, record low interest rates December enactment of the $858 in increased loan volume for real estate have not translated into robust sales. A billion tax cut package by Congress may transactions. primary reason for this is the fact that ' encourage additional hiring, particularly in 2010 large commercial banks were still, on net, paying down debt. If lending United States Overall Job Growth vs. Minnesota Job Growth (Non -Farm) conditions return to normal prompted ' by a stronger economic recovery, a% which will be reflected in part in rising interest rates, then debt should begin 3% to resemble something that looks a bit ' like normal. That would create a new 2% wave of demand which would ultimately o produce cap rate compression and drive 1% - - _ - — commercial real estate values upward in ' ° the metro area and nationwide. 0% r _2% - -- -- - V_____ -- -3% _ United States 5% ___- ■Minnesota -6% - - - -- -- — - - -- - -- - - - - -- - ' 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Minnesota Department of Employment and Economic Development 45 cassidyturley.com 3 1 1 Office Market 1 1 Signs of Improvement negligible and were offset by losses The challenges from 2009 continued overall. 1 into 2010, although there are signs that the office market may be improving Still, the significant gains in Class A slightly. The good news is that there was space in the two largest office sectors some absorption in 2010, but most of it of the Twin Cities is good news indeed, .,_. was in Class A space and was isolated especially compared to a forgettable in the Minneapolis CBD and Southwest 2009. The glimmers of hope in the ■4„ market sectors. market were twofold; tenants taking advantage of concessions, free rent and 1 The overall Twin Cities office absorption landlord-paid tenant improvements to Z' for 2010 was ositive, with 649,838 upgrade pgrade to a better space, and genuine square feet of space. This figure is growth for some users. Upgrades to somewhat misleading, as together Class A space from Class B or even C 1 the Minneapolis CBD and Southwest was a common occurrence in 2010, with sectors had 759,888 square feet of tenants generally recognizing the chance Market Indicators positive absorption. This means that to lock in new market rates. Demand for 1 the remainder of the Twin Cities office new space came most notably from the 2010 2011 market actually had negative absorption financial, education, and government Vacancy Rate of 110,050 square feet. Furthermore, sectors. Net Absorption T Class A space in the Minneapolis CBD 1 and Southwest sectors outperformed Class B and C space continues to Construction 1 all others, with 826,430 square feet struggle. The challenge falls into Rental Rate of positive absorption. Gains in all three categories, abundance of space other classes and sectors were largely available, poor location, deferred 1 Office Vacancy And Absorption 1 12 ------------------------ - - - - -- - - -- zz% 10 20% ' O 0o g - —. - - -- - -- 18 0 6 16% Q 4 14% 1 0 n 2 - - -- 12% `o 0 10% 1 -- ------ ------ -- -- -- -- - -- - - -- -- — - 8% -4 ■ Absorption — Vacancy 6 % 1 -6 ■ Class A Absorption ® Class A Vacancy 4% $ -- 2% 1 -10 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 0% 2004 2005 2006 2007 2008 2009 2010 Source: Cassidy Turley 1 46 cassidyturley.com 4 1 i ' maintenance, and inability making for owners to u negative absorption of similar -sized space in the Campbell g p for g ative absor p be flexible enough on deal parameters. 86,149 square feet in Class B and a Mithun Tower. ' Additionally, with rates remaining small gain of 9,036 square feet in Class competitive for Class A space, more C space. The absorption in Class A Advisor Net moved from 1221 tenants are looking to upgrade if they are buildings brought the vacancy rate down Nicollet Mall to 701 4th Avenue, taking on 34,000 going to make a move. More shifting of 3.5% to just 10.8 %, leaving it in far g square feet. q tenants has occurred over the last 12 better condition than the Class B and C Capella University expanded months, which accounts for some of the categories, in which vacancy remains at significantly, adding 90,000 square market activity, but where one space is 22.0% and 22.2 %, respectively. feet in to its existing 395,600 space ' filled, another often larger space is left on the market. The improvement in Class A product is in the Capella Tower. driven by both tenants upgrading from VisionShare moved from its 28,000 Downtown Minneapolis Class B or C space, as well as actual square foot space at University Park ' With 26,470,378 square feet, Downtown growth among existing and new tenants. Plaza into 51,000 square feet at Minneapolis is the largest office market Some key transactions for 2010 Butler Square. in the Twin Cities, with approximately included: ' 37% of the total universe. It was also U.S. Bank expanded by 45,000 the best performing market in 2010, Eide Bailly has announced plans square feet in U.S. Bank Plaza. with 392,134 square feet of positive to move to an as -yet undisclosed The American Academy of absorption. This pushed vacancy down amount of space in the U.S. Neurology will build a 62,000 ' 1.5% to 17.9 %. While this doesn't yet Bancorp Center, vacating 40,000 square foot office building in the Mill represent a stabilized market, most square feet at the Norman Pointe District, due for completion in early agree it has turned a corner. office building in Bloomington. 2012 ' Class A office in Downtown Minneapolis Oppenheimer announced plans to performed the best among building move its 100,000 square foot space HGA Architects and Engineers will lease 80,000 square feet in the classes in 2010. Annual absorption in the Plaza Seven building to a renovated Ford Center, moving from ' totaled 469,247 in Class A buildings, its 125,000 square foot space at 701 Washington Avenue North. ' 2010 Office Vacancy • Wells Fargo renewed 83,000 square 25.00% feet in the Northstar Center. 22. 22.20% The opening of Target Field has added ' a major attraction and amenity to an 20.00 % already extensive list. This has an 17.90% indirect but tangible effect on the 15.60% downtown Minneapolis office market. 15.00% - - - - — Light rail service, retail, entertainment and restaurant options, as well as 10.80% established residential areas in and near ' 10.00% - - - - -- - —_ downtown add to the livability of the area. 5.00% i 0.00% Class A Class B Class C CBD Total CBD Class A ' Source: Cassidy Turley 47 cassidyturley.com 5 1 Minneapolis/St. Paul Non -CBD office space. This was driven by a Office space in the non -CBD in combination of business expansion ' Minneapolis remains the best performing and companies taking advantage of of all sectors, edging out the non -CBD the soft market to upgrade to better in St. Paul with a 14.5% vacancy space. Overall vacant office space in the rate. Class A and Class B improved Southwest declined from 22.3% in 4th ' occupancy, with 13,061 and 29,457 Quarter 2009 to 19.9% in 4th Quarter square feet of positive absorption, 2010. respectively. This brought Class A vacancy down to 8.5% and Class B Similar to the Minneapolis CBD, Class ' down to 11.6 %. Class C vacancy rose A space performed the best in 2010, significantly due to the addition of with 357,183 square feet of positive 128,000 square feet of space at the absorption. This resulted in a 4.7% Pillsbury A Mill to the tracked universe. vacancy reduction, bringing the total to , 20.5 %. The non -CBD in St. Paul had 31,469 Significant Lease Transaction Notable leases in the Southwest sector in Norman Pointe II square feet of positive absorption in ' 2010, bringing its vacancy rate down to 2010 included: Bloomington, MN 14.8 %. 0 U.S. Bank signed a 340,000 square Size: 244,561 sq ft foot lease at Meridian Crossings in Lessor: Duke Realty Corp. Southwest Richfield. ' Lessee: U.S. General Services The Southwest sector saw annual Administration absorption of 367,754 square feet of • p q Rasmussen College has signed a lease for 30,000 square feet at ' Two MarketPointe in Bloomington, Selected Office Lease Transactions - 50,000 sq ft + relocating its Eden Prairie campus. PROPERTY • ' Meridian Crossings 340,000 US Bank Richfield Valuation Information Technology renewed a lease and expanded Norman Pointe II 244,600 U.S. General Services Administration Bloomington at Riverview Office Tower in ' Opus Building 132,000 Digital River Minnetonka Bloomington, adding 30,000 square feet of space, bringing its total to Campbell Mithun Tower 100,000 Oppenheimer Wolff & Donnelly Minneapolis 90,000 sq ft. Wells Fargo Place 89,600 MNSCU St. Paul • The U.S. General Services M Capella Tower 85,000 Capella Education Company Minneapolis Administration leased 244,000 , square feet in the Norman Pointe II Northstar Center 83,600 Wells Fargo Minneapolis building in Bloomington. 8500 Normandale Tower 82,000 Schwanns Bloomington . Schwans signed a lease renewal ' Ford Center 80,000 HGA Architects and Engineers Minneapolis for 82,000 square feet at the 8500 Normandale Tower in Bloomington. Prairie Lakes Corporate Center I 77,000 Univita Health Eden Prairie , Plymouth Office Center 75,000 Assurance Health Plymouth Towers Watson, which took 69,000 square feet in the 8400 Normandale Wells Fargo Place 74,700 AgriBank St. Paul Tower in Bloomington, moved and Crosstown Business Center 65,000 Bioscrip Eden Prairie expanded its space within the same , building. Midway Corporate Business Center 60,000 Fairview St. Paul Butler Square 51,000 VisionShare Minneapolis ' Northland Corporate Center 50,000 RJF Brooklyn Park 48 Source: Cassidy Turley cassidyturley.com 6 1 ' Downtown St. Paul Dakota County The St. Paul CBD saw negative The poorest performing market in the ' absorption of 31,973 square feet for metro was Dakota County, which had 2010, but positive absorption of 46,943 negative absorption of 155,108 square square feet in the 4th Quarter. Overall feet in 2010. This brought the overall vacancy inched up to 23.3 %. vacancy rate up to 24.0 %, a 4.7% Class A space in the St. Paul CBD had increase. negative absorption of 20,960 square Class A space had 116,532 square feet ' feet, bringing vacancy up to 11.5 %. of negative absorption in 2010, pushing vacancy up to 26.9 %. This spike was Class B space had negative absorption largely due to the 100,000 square foot for the year, but performed considerably Buffet's Inc. building, which was added ' better in the 4th Quarter, absorbing to the market in the 1st Quarter of 2010. 50,016 square feet, mostly driven by ' Class B space had negative absorption several tenants that leased a total of of 39,581 square feet, and while Class C ' 47,000 square feet at 180 East 5th Significant Lease Transaction had positive absorption of 1,005 square Street. Of all office space in the St. Paul feet, both vacancy rates remain above Median Crossings CBD, the vast majority is Class B, with 20% Richfield, MN a vacancy rate of 29.4 %. It will take Size: 340,000 sci ft ' increased deal velocity or increased West Lessor: State Teachers of Ohio space demands by the government The West sector saw vacancy increase Lessee: U.S. Bank sector to make a significant dent in the 1.3% overall on negative absorption of Downtown St. Paul vacancy rate. 93,188 square feet. Within those totals ' are negative absorption of 206,841 Anoka County /Northwest square feet of Class A space, somewhat Forecast Anoka County posted negative offset b absorption of 23,419 square feet Y Positive absorption of 113,653 Generally speaking, companies appear ' square feet of Class B space. more confident and some are hiring in 2010, with the resulting vacancy again, and the unemployment rate is increasing 3.9% to 18.8% overall. Plymouth Corporate Center gained two slowly trending downward, all of which Class A vacant space in Anoka County new tenants in the 4th Quarter, with indicate improvement in the office ' increased to 13.7% with negative Assurant Health and Meritain Health market. However, a trend that has absorption of 5,395 square feet. Class signing leases for 70,000 square feet been accelerated by the recession is B and C saw negative absorption as well, and 49,800 square feet, respectively. for companies to require less space ' with vacancy rates of 21.0% and 18.4 %, Assurant Health moved from 100,000 overall and /or on a per employee basis. respectively. square feet at Bass Creek Corporate In a revenue - challenged environment, Center. companies are paying more attention The Northwest sector had overall to the bottom line, with some trimming positive absorption of 1 square Washington County /Northeast office space requirements by having feet in with a vacaancy ncy rate decline The Northeast sector had negative employees share workstations or work this 11.2% % t to o 24.7% overall. Most absorption of 43,288 square feet for the from home. We believe this is part of this activity can attributed to the e year, pushing vacancy up to 23.2 %. a broader trend that will affect space ' Northland Corporate Center, which was needs in the future, as the current added to the Northwest sector universe Washington County experienced minimal industry rule of thumb of 200 square in 2009 and signed tenants in 2010, negative absorption, leaving vacancy feet of office space per employee could ' with the 50,000 square foot lease by RJF at 29.0 %. However, its Class A office be declining. We will continue to pay leading the way. space saw positive absorption of 6,710 close attention to this trend. square feet for the year and boasts a relatively healthy vacancy rate of 11.8 %. 1 49 cassidyturley.com 7 r r r r We expect Class A space in quality National Overall Job Growth vs. Office Using Job Growth locations like the Minneapolis CBD and 6% r Southwest sectors to continue to show signs of improvement. In their wake, Class B and C space will continue to ai n languish, although the best locations well perhaps begin to show positive 19 r absorption. c2 0 0 °% Concessions, free rent and tenant r improvements will have to burn off r _2q before rents can rise. While the time is right for tenants to take advantage of ° low rent, these deals will continue to be > - 4% r attractive to landlords as well because they reduce the carrying costs of vacant -6% space and the uncertainty of future cash r flows for the property. -8% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Minnesota Department of Employment and Economic Development There will be one new multitenant office project starting construction in 2011, r Mozaic by Ackerberg Development will include 65,000 sq ft of Class A office space along Lagoon Avenue in Uptown. The most likely location for additional office development is the Minneapolis CBD to due to the lack of large blocks Selected Office Sale Transactions - 50,000 sq ft + of space available, but it is believed that PROPERTY SF BUYER SELLER PRICE CITY r such new development is still several 50 South 6th St 690,000 Hines Global REIT 50 KanAm Grund $180,000,000 Minneapolis years out. South Sixth, LLC TCF Bank Building 470,000 Franklin Street Properties Ryan Companies $40,500,000 Minneapolis Corp. Somewhat of a wild card is the number r 1 & 2 Meridian Grassing 368,700 Meridian Crossings, LLC OTR $65,611,121 Richfield of buildings that will be returned to the lender during the course of the year. We Northwoods Office Building 73,000 Ram Development LLC Cornerstone $9,170,000 Arden Hills are seeing situations where a prospective Wayzata Executive Park 105,600 J.E. Robert Co. Inc. Continental Properly $9025000 Wayzata tenant and building owner are willing to Group Inc , r sign a lease, but the lender is unwilling Brooklyn Off— 55,200 FTK Properties CSM Corp. $1,530,000 Brooklyn Center to provide a loan because there is not an Source: Cassidy Turley agreement on the value of the property. r In most cases, the value is significantly less than a couple of years ago, but the parties cannot agree as to who will take the loss. r r r 50 cassidyturley.com 8 r 1 1 i Industrial Market 1 Signs of a Turnaround on a triple -net basis for office and $4.50 Whereas in 2009, many deals were for warehouse space are renegotiating i completed in the form of consolidations renewal packages at rates 20% to 30% and short term renewals, many in lower, along with as much as one month of 2010 represented genuine growth. net free rent per annum of the lease term. i Confidence is higher in manufacturing, food companies, medical device, and Even with the market having substantial consumer goods firms, all of which is vacancy, larger industrial users will need mr- reflected in signs of an improving industrial to consider build -to -suit options. Users in 1 market in the Twin Cities. This is evident this market seeking 100,000 square feet in the absorption that was overall negative or more will find a limited supply of space for 2010, but there was significant positive in the market or realize that some of the activity in the 4th Quarter. existing inventory is functionally obsolete. i Annual absorption for the Twin Cities Northwest industrial market was negative 255,617 The Northwest sector remains arguably i Market Indicators square feet for the year, but positive the most dynamic in the Twin Cities, square feet for the 4th Quarter. 260,862 s q with 28,512,218 square feet, or 24.5% 2010 2011 The overall vacancy rate remains high, at of the 116,238,340 square foot Twin Vacancy Rate _ 13.0 %. Cities universe. This sector saw negative 1 Net Absorption IN a Bulk Warehouse saw the biggest gains absorption of 315,057 square feet for the year, although positive absorption of Construction y � in 2010, with 217,998 square feet of 21,089 for the 4th Quarter. The Bulk positive absorption, helping its vacancy Warehouse market had 50,600 square feet i Rental Rate rate recover slightly to 15.5 %. Office Showroom and Office Warehouse both of absorption for the year, and 228,735 had negative absorption for the year, but square feet in the 4th Quarter offsetting i positive 4th Quarters. earlier losses. Lease rates are still 20% to 30% off the We are encouraged that this represents a turnaround in the economy, with the peak of the market prior to the recession. Northwest sector being representative of i Companies that had leased space at $9.50 Industrial Vacancy And Absorption 20 18°% i . Absorption _ 16 % o -® Vacancy 0 0 10 - - - -- -- - - - -- - - - - - -- - -- - - - - -- 14% 0 0 1 x 5 12 - °% 4' a 0 10% C 0 a -5 - - - - -- - - 8% IN a -10 6% -15 4°% i -20 2% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ql Q2 03 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Gil Q2 Q3 Q4 0% i 2004 2005 2006 2007 2008 2009 2010 Source: Cassidy Turley 51 cassidyturley.com 9 1 the Twin Cities overall. Several areas of the Southwest/Scott County was BAE Systems vacating 280,000 economy were represented in leases for The Southwest sector saw slight negative square feet at River Road Industrial ' new or expanded space in the Northwest, absorption in 2010, losing 2,154 square Center in Fridley. Generally, newer, including demand from manufacturing, feet of occupied space. However, 4th well - located buildings perform well in medical and consumer goods companies Quarter absorption was positive with this sector. Although this sector had alike. 75,873 square feet, and the overall negative absorption in 2010, it has the ' vacancy rate is 14.6 %. lowest vacancy rate in the metro area. Significant leasing activity in 2010 Adjusting the vacancy to remove older, included: Scott County remains a small sector of the less functional properties would lower the ' Twin Cities industrial market. Deals both vacancy rate even more. • Mocon leased 60,000 square feet large and small can impact the overall in Northland Interstate Business numbers greatly. 2010 brought significant Significant leasing activity in 2010 Center IV in Brooklyn Park. reductions in vacancy, as 303,532 square included: ' • New Horizon leased 50,000 square feet were absorbed, reducing overall vacancy by 8.8% to a reasonably healthy • RISE, Inc. leased 80,000 squar feet at the Plymouth Business e Center in Plymouth. 10.4 %. feet at 807 Hampden Avenue in St. ' • Caterpillar took 118,000 square feet St. Paul/Northeast/Washington County Paul's Midway area. . Americraft Carton leased 100,000 at the 11601 93rd Avenue North St. Paul /Northeast is the largest industrial square feet in St. Paul at 2228 building in Maple Grove. sector in the Twin Cities. The sector had Territorial Road when its property , negative absorption of 353,267 square was taken by MnDOT for a highway feet in 2010, driving vacancy up 1.2% construction project. to 11.5 %. A leading driver of this spike The St. Paul market saw some new , Selected Industrial Sale Transactions - 80,000 sq ft + construction, including the following PROPERTY owner - occupied buildings: Norlhpoint I, II, II 207,300 Artis REIT AMB Property Corp. $10,300.000 Fridley • In 2011, Baldinger Bakery will 7500Selzler Parkway 119,600 Artis REIT AMB Property Corp. $7,500,000 Brooklyn Park complete construction of a 140,000 square foot industrial building at Parkside 120,400 Artis REIT AMB Property Corp. $6,850,000 New Hope one of the St. Paul Port Authority's ' Rogers Distribution Center 147,200 Artis REIT AMB Property Corp. $6,400,000 Rogers newest business parks, Beacon Bluff, on Phalen Blvd. 10700 165th Ave. NW 103,900 Great River Energy Resource Recovery $6,063,800 Elk River Technologies, LLC HealthEast built a 45,000 square ' Eagle Creek 122,900 Antis REIT AMB Property Corp. $5,800,000 Savage foot industrial facility to house its 10000 Valley View Rd 115,900 Hamlet Blue, LLC CIMA Labs, LLC $5,000,000 Eden Prairie transportation and ambulance vehicles at Beacon Bluff as well. , 21925 -22201 Industrial Blvd. 265,300 Reynolds Food Packaging, Rogers Plastic Center, $4,867,700 Rogers ILC LLC FR Investment Properties, Additionally, this market may see the first 9200 10th Ave N 132,000 Yellowlhroat, LLC LLC $4,400,000 Golden Valley speculative new development in 2011, as Continental Nitrogen Site 210,000 Feed Products North, Inc. Continental Nitrogen Resources $4.367,700 Rosemount the St. Paul Port Authority has acquired Southwest Metro Transit a site in the Midway and is negotiating Chaska Industrial Center 95,800 Commission CSM Equities LLC $4,300,000 Chaska with Industrial Equities to partner on the North Star Trout Brook Building win City Concrete Christ Household of g 100,000 Products Co. Faith, Inc. $3,500,000 St. Paul development. This deal is not yet finalized, ' 410 11th Ave. S. 110,000 Midland Glass Co. Private Seller $2,800,000 Hopkins but is a great location, near the southeast corner of 1 -94 and Hwy 280. .3800 Washington Ave N 129,500 Precision Associates, Inc. Pinta Foamtech Inc. $2.152,000 Minneapolis ' 7000 Washington Ave. S. 119,000 Continental Washington, LLC Banta Corporation $1.700,000 Eden Prairie 16430 Highway 65 NE 89,100 American Woodmark Fleetwoods $1,575,000 Ham Lake 5121 Winnetka Ave 108,000 Hillcrest Development Conseco $750,000 New Hope ' Source: Cassidy Turley 52 cassidyturley.com 10 I I ' Dakota Count Selected Industrial Lease Transactions - 80 000 s ft + Y r q Dakota County had negative absorption PROPERTY SF TENANT CITY ' of 79,147 square feet for the year, but positive absorption of 58,213 in 4th Bohn Distribution Center 145,000 Davisco Savage Quarter, mirroring the Twin Cities overall. 11601 93rd Ave_ N. 118,000 Caterpillar Maple Grove This is likely due to the fact that this sector has some of the newest and most Continental Distribution Center 106,000 NFI Distribution Shakopee functional buildings in the Twin Cities, but MSP Midway Industrial Park #13 100 ,631 AmericraR Carton St. Paul needs to work through an abundance of vacant space. Proximity to Minneapolis/ 35113 Crossings 100,480 titetouch Burnsville St. Paul International Airport will continue River Road Industrial Center 100,000 Bunzl Fridley to present an advantage for buildings in this sector, particularly those in Mendota 14101 Southcross Dc (Renewa0 83,400 Asset Marketing Services Burnsville ' Heights and Eagan. Pilot Knob Distribution center 80,700 us oil Mendota Heights In Eagan, Factory Motor Parts moved Source: Cassidy Turley into a new building at 2782 Eagandale Minneapolis that overall deal structure will moderately ' Boulevard, moving out of a 73,405 The Minneapolis market had positive improve in favor of landlords as the market square foot building nearby. Additionally, absorption of 115,571 square feet for recovers. Lockheed Martin announced it will close the year, and 89,360 in the 4th Quarter. ' its 620,000 square foot plant at 3333 Pilot Overall vacancy is a healthy 9.3 %. Absorption is anticipated to improve by Knob Road in Eagan by 2013. mid -year 2011. The industrial market is Bulk Warehouse saw the biggest gains, poised to experience moderate levels of with 265,576 square feet of positive positive absorption in all three product ' absorption for the year. This halved the types. Bulk Warehouse has already begun vacancy rate to 14.0 %. to rebound and will be followed by Office Warehouse and Office Showroom product. The major lease in 2010 was the University As absorption increases and deal velocity ' of Minnesota taking 125,000 square feet improves, tenants will have fewer choices at University Industrial Park III. in the market. We anticipate these activity levels to be widely disbursed around the Forecast metro, with the northwest and southeast Lack of quality, functional distribution submarkets leading the way. space is creating opportunity for build-to- suit development as users are driven by There will also be a continuation of bank ' specific needs such as clear height, docks, workouts and lender foreclosed properties. ttt parking and location that the multitenant The process of working through the system market does not always provide. As well, will pick up speed through this coming land prices have come down enough to year. For the investor and owner /occupier be below historical averages, thus fitting with the glove -fit for a building, there will today's market value requirements. Look be some opportunities as prices will be low Significant Sale Transaction for land -hold opportunities to capitalize and interest rates remain attractive. AMB Portfolio on the distribution hubs of the Twin Cities metro. The distribution product of the Twin Cities Metro -wide future will provide a minimum of 32' clear Size: 2,000,000 sq ft height. ' Seller: AMB Property Corporation Buyer: Artis REIT We do not expect most rents to increase Final sales price: $115,000,000 In 2011 as there are still concessions being offered. That said, we do expect 53 cassidyturley.com 11 i Retail M 1 arket 1 The New Normal — I'll Buy It if I Need It absorption of 13,892 square feet, with a The story of retail space in the Twin lot of turnover in mid -size boxes, pushing , Cities is one of "back -to- basics." The vacancy to 5.0 %. Neighborhood Centers retail market continues to struggle, but had 309,984 square feet of negative the activity occurring generally revolves absorption as smaller mom - and -pop around food and daily needs. businesses struggled, for a vacancy rate 1 First the good news — the 2010 holiday of 8.9 %. shopping season recovered significantly, Grocery Churn with sales increasing 4% to 6% over 2010 saw the first signs of major 2009. Although not back to its reported changes coming to the grocery market, 1 2006 peak, 2010 did surpass pre- both nationwide and in the Twin recession 2007 in terms of retail sales. Cities. Walmart has announced plans The Twin Cities tracked retail universe to add 300 new stores in the next 18 1 includes 63,204,591 square feet of months, and several of those could be space and has a present vacancy rate in the Twin Cities. It is eyeing sites in Market indkatom of 7.6 %. Vacancy increased slightly Plymouth, Brooklyn Center, Blaine and 1 due to 158,711 square feet of negative Burnsville, and most new stores in the 2010 2011 absorption over the past year. Twin Cities are likely to be SuperCenters, Vacancy Rate as groceries make up 51% of the T —> 1 The back - basics trend has had company's sales. The chain is also Net Absorption T varying affects on different retail property rolling out much smaller formats, some Construction 1 types. Regional Malls had the best as little as 20,000 square feet, consisting Rental Rate y performance in 2010, despite the mostly of groceries and targeted to urban 1 closing of Brookdale Mall in Brooklyn areas. Center. Regional Mall absorption was positive with 155,388 square feet for Target Corp. announced in 2010 the year, bringing vacancy down to a smaller store format, with stores 1 7.6 %. Community Centers had negative between 60,000 and 100,000 square feet. Similar to Walmart, it will also have Retail Vacancy And Absorption 1 00 30 10% o � d °0 25 < 1 0 0 x o w 20 9% Q N 0 15 10 7.6% 8 % 1 5 0 1 7% -5 10 Absorption 6% 1 -15 Vacancy 20 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 5% Source: Cassidy Turley 1 54 cassidyturley.com 12 1 an emphasis on groceries. The first feet for 2010, although overall vacancy Big Box Re -Use in the Twin Cities ' smaller format store will open in Seattle remains a relatively healthy 5.6 0 /0. in 2012, but Target is eyeing other urban store Name Size city FormerTenw* markets, including St. Paul. Target has Simon Property Group, Inc., the owner (ay Ft) added grocery space twice to its flagship of the 1.34 million square foot Southdale PMsedeom downtown Minneapolis store, and has Mall, has announced the signing of G,ne,y -� Edina Wickes Furniture ' remodeled most area stores to include a Herberger's to fill the 133,000 square standard supply of groceries. foot space formerly occupied by Becker a Furniture 53,000 Blaine Steve& Barr Mervyn's. ' Meanwhile, the grocer A & P filed for Cost Plus World bankruptcy in late 2010, and Supervalu Cowboy Jack's has announced plans c°mr"'° 50,000 Woodbury Market has announced plans to close stores. to move into a 14,000 square foot These announcements are evidence that space along Interstate 494 near Xerxes enter Furniture 40 Burnsville Schneiderman's ' old -line grocery chains are struggling Avenue in Bloomington. The building Worm Furniture against competition from all directions, was previously occupied by Steak & Ale, including Walmart, Target, Whole Foods, which closed in 2008. WIaN Foods 33,225 Minnetonka Circuit City Trader Joes, Fresh & Easy and Aldi. The only new construction in the ' Whole Pearls 32,000 Edina Storables Whole Foods, Aldi and Trader Joes Southwest was a 7,700 square foot retail opened new stores or announced center developed by Oppidan in Eden expansion plans in 2010, and there Prairie. It is fully occupied with tenants advw 20.000 Bloomington Circuit City will likely be additional turnover in the that include Verizon Wireless, Sports Twin Cities grocery market in 2011 and Clips and Smash Burger. AN 17,929 Crystal Office Depot beyond. Look for significant activity and deals in the coming years to be grocery- Minneapolis ' . related. All eyes are on the CBD where retailers New restaurants near Target Field continue to struggle even as activity include Kieran's Irish Pub in Block E, Big Box Reuse picks up near the new Target Field. Roy Smalley's 87 Club in Butler Square, ' Of the 11.6 billion square feet of retail Absorption in the CBD was positive and Rosa Mexicano, which will open in space nationwide, 870 million was 9,867 square feet, but the vacancy rate City Center in 2011. vacant in mid -2010, and of that, around remained high at 14.7 %. ' 300 million was vacant big -box space. Major big -box closings since 2006 include Linens -n- Things, Circuit City, 5 Year Retail Vacancy by Specific Use Steve & Barry's, Cost Plus World Market ' and Wickes Furniture, all of which 18% affected the Twin Cities' inventory. 16% This glut of big boxes offers an 14.70% ' opportunity for retailers to lease space, 14% albeit at significantly discounted rates. Several examples of big -box reuse are lz% � Downtown Retail popping up around the Twin Cities are 10% — Neighborhood Centers R Centers highlighted in the upper right of this � R 9.10% ' page. 8% 7.60% I Southwest 6% 5.00 The Southwest is the largest retail sector in the Twin Cities and experienced 4% negative absorption of 77,191 square z% ' 7006 zoo? Zoos zoos 2010 Source: Cassidy Turley 55 cassidyturley.com 13 and 2.3 %, respectively. This is generally Anoka County r„ due to greater population density and The Anoka County retail sector was one dedication to established mom - and -pop of the few to report positive absorption in ' establishments. 2010, and was the best - performing, with 113,344 square feet absorbed. Vacancy - ► The Uptown area continues to evolve. declined 1.4% to 5.5% overall. New tenants to Calhoun Square ' included II Gatto, the Uptown Cafeteria This was driven in large part by the - and Support Group, Dogwood Coffee, announcement of Becker Furniture Geetanjoli Sari Fashion, and CB2 (a World, which opened a store in the ' Crate & Barrel concept) is proposed as 53,000 square foot space in Northtown well. The Apple store and a Columbia Mall in Blaine, in the space previously Sportswear also opened in 2010 across occupied by Steve & Barry's. Wild Bill's Hennepin Avenue from Calhoun Square. Sports Saloon will open a new location at , Peace Coffee opened a retail location on 109th and Highway 65 in Blaine as well. Minnehaha Avenue and the Town Hall Significant Sale Transaction Brewery opened a second location on Dakota County /Scott County Woodbury Lakes Chicago Avenue in South Minneapolis. The Dakota County sector saw positive ' Woodbury, MN absorption of 36,080 square feet overall, Size: 413,000 sci It on 50 acres West bringing vacancy down to 6.8 %. Buyer: RED Development The West sector experienced 19,886 ' Seller: LNR Partners, Inc. square feet of negative absorption in Becker Furniture World moved into a Sale price: $35,000,000 2010, although the overall vacancy rate 40,000 square foot vacant space at ticked up to a still - healthy 4.7 %. Burnsville Crossings formerly occupied by Schneiderman's Furniture. Omaha- ' Whole Foods announced plans at the based Gordmans plans to open a 50,000 end of 2010 to open a 33,225 square square foot store at Burnsville Center. Despite the notable addition of Kieran's foot store in the former Circuit City near Irish Pub, occupying the 10,000 square Ridgedale Mall in Minnetonka. This Mendota Plaza was given an extensive ' foot former Bellanotte space, Block E is on the heels of the 2009 opening facelift in 2010, with several new continued to shed tenants. Hooters of Trader Joe's in a former Cost Plus tenants, including a rebuilt Walgreens. closed its doors in 2010, and last year World Market, follows on the big box Renovations increased the size of the also saw the sale of the development to re -use theme and is evidence of the center by about 5,000 square feet to ' Atalus. A significant renovation of the grocery churn already occurring in the 60,578 sq ft. Future plans for the site less- than -a- decade -old facility is likely. Twin Cities.Oppidan remodeled the include an additional 19,000 square feet former Home Valu in Minnetonka and of retail and restaurant space, as well as Elsewhere in the CBD, the transformed the roe Into a Goodwill a daycare, a senior housing project, and implementation of the Downtown property p retail store, and Walmart has purchased a medical office building. Improvement District (DID) has been the Four Seasons Mall in Plymouth met with positive reviews from retail for redevelopment and is considering United Growth is expecting to complete , tenants. The DID has resulted in a construction of a SuperCenter. construction in early 2011 of an 11,800 cleaner and safer downtown, which square foot retail center in West St. translates to fewer hassles for tenants. Paul. The center, which is on a pad site It is too early to know exact impact on ' retail sales, but we suspect the effect is Selected Retail Sale Transactions - 20,000 sq ft + positive. PROPERTY Elsewhere in Minneapolis, Neighborhood Woodbury Lakes 413.000 RED Development LNR Partners Inc. $35.000,000 Woodbury , and Community Centers outside of the CBD remain among the healthiest in the 6880 Boudin SL 29,000 Boudin Crossings, LLC EFH Realty Advisors $1.775.000 Prior Lake Twin Cities, with vacancy rates of 0.6% Former Marketplace Foods 27,200 Family Pathways Setterholm Family LLC $1,400,000 Forest Lake Source: MNCAR ' 56 cassidyturley.com 14 Selected Retail Lease Transactions - 20,000 sq R + to do so. As a result, the core city and �PROPERTY SIF TENANT CITY ' first -ring suburbs will continue to recover more quickly, with second- and third -ring Tamarack Village (Renewal) 89,000 Dicks Sporting Goods, Inc Woodbury suburbs realizing more tentative activity. Tamarack Village 52,000 Gordmans Stores, Inc. Woodbury Taxes and common area maintenance ' Burnsville Center 50,000 Gordmans Stores, Inc. Burnsville (CAM) fees represent a larger percentage of retail tenants' overall Burnsville Crossings 32,900 Becker Furniture Wald Burnsville expenses, particularly related to rents. t 14100 Wayzata Boulevard 26,000 Toys R Us Minnetonka As rents have come down, taxes and CAM have tended to go up. We expect Woodbury Lakes (Renewal) 23,900 Michaels Woodbury this to continue as rents won't likely Hilicrest Shopping Center 23,400 ARC Valu Village Saint Paul recover much, if at all in 2011. The only ' exception may be for retail center owners Office Depot Center (Renewal) 23,000 Office Depot, Inc Minnetonka that appeal their value based on NOI, as they may see a tax reduction that can be Coon Rapids Square 22,500 Goodwill Industries Coon Rapids passed on to tenants. ' Roseville Marketplace (Renewal) 21,900 Office Max Roseville We will continue to see growth in 8450 City Center Dr. 21,000 MN Autism Center Woodbury retailing that is not conducted through traditional stores. Christmas 2010 t 13820 Wayzata Blvd. 20.300 Goodwill Industries Minnetonka brought a record for online sales, and Southdale 494 Center (formerly Circuit 20.100 Staples, Inc. Bloomington will continue to grow. Other changes City Plaza) to retailing include smartphone apps Source: MNCAR that can scan a price tag and provide ' formerly occupied by a Pizza Hut and The Northeast submarket experienced automatic price comparison, as well as in front of an existing SuperTarget, is annual absorption of 61,726 square V- Retailing, where brand name stores fully leased and tenants include Panera feet, driven by new tenants like H & M in sell products using vending machines. ' Bread Co., Panda Express, Mattress Maplewood Mall. Overall vacancy in the Examples of W retailing include Best Buy Giant, T- Mobile, and Regis Salon. Northeast sector is 5.6 %. and Redbox video rental, the latter of which is common in grocery stores, for Northwest The Washington County submarket example. On a related note, Blockbuster ' The Northwest submarket saw vacancy experienced positive absorption of Video is closing a number of stores increase by 2.8% to 15.0% overall. 34,921 square feet, bringing vacancy around the metro area in key locations Much of the negative absorption of down to 10.7 %. that will be attractive to a number of ' 254,012 square feet can be traced to tenants. A SuperTarget is under construction on the closing of the Brookdale Mall. One Radio Drive south of Interstate 94 in A variety of tenants, particularly mid - proposed redevelopment of the 984,114 Woodbury. oodwill opened a 20,600 square foot mall is for Walmart to build a ry ' p size tenants, will continue to find good ' square foot store in Woodbury, and opportunities in second generation big - store as part of a larger retail plan. Gordmans announced plans to open a box space. Additional activity included Aldi leasing 52,000 square foot store at Tamarack p 17,900 square feet of space from Paster Village. Quality product in the best locations Enterprises in the Crystal Town Center. will perform the best, and there will be ' The store will open June 2011 in a space Forecast scattered opportunity to redevelop in previously occupied by Office Depot. The combination of the challenging good locations. Old tired retail centers housing market and the effects of the will continue to struggle, and proactive ' St. PaulMortheast/Washington County 2008 spike in the price of gas, and owners will seek to reposition or The St. Paul retail market saw negative specter of future instability, have affected redevelop. absorption of 45,962 square feet, today's shopper. They spend only what ' pushing vacancy up to 8.2 %. they need to and drive a shorter distance 57 cassidyturley.com 15 i 1 Multifamily Market 1 1 The Darling of the Real Estate Industry Twin Cities. There are 5,032 units The apartment market is the darling of currently proposed in the metro area. A 1 the real estate industry. Overall vacancy substantial amount of this activity can be is down to 3.8 %, the lowest point in found in the core of Minneapolis and the a decade, and rents are beginning first -ring suburbs, with a lot of activity to increase in some instances as in the Minneapolis CBD, as well as r most concessions have gone away. Uptown, the University area and along 1 Remarkably, all of this has occurred in a the Hiawatha light rail line. !� relatively weak job market. Examples of activity include recently 1 Several forces are creating this completed projects like The Ellipse in situation: a lack of new product being St. Louis Park and Mill City Apartments developed, Generation Y continues to in the Minneapolis CBD. Rents in new create households, many of which are buildings in downtown Minneapolis ' rental, an increasing number of baby are leasing ahead of schedule and are boomer households are choosing urban approaching $2 per square foot, a new apartment living, and the economy is market high! Market Indicators starting to recover, albeit slowly. 1 Of the total units proposed in the Twin 2010 2011 In a commercial real estate market just Cities, 1,353 of them, or 27% of the Vacancy Rate so _31 beginning to again find capital available total, are in the Minneapolis CBD. for development, the apartment market Furthermore, 45% are either in the T � CBD 1 Net Absorption is the farthest along. The agencies and or Uptown, and fully 73% of all proposed Construction — .> T HUD provide a sizable percentage of the apartments are in the two core cities of debt. Plus, life companies are making a Minneapolis and St. Paul, with only 27% Rental Rate T �' slow comeback to this roduct e. in the suburbs. P type. 1 Stars Are Aligning for a Development Demographic Drivers Boom Demographics are driving not only 1 Cassidy Turley tracks apartment the demand for apartments, but the trends and construction activity in the location as well. The proliferation of Economic Vacancy 1 145 12% 1 10% 10.10 8% - 1 6% 1 4.90% 4% 2% — Economic Vacancy 1 Physical Vacancy 0% Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Source: Cassidy Turley 1 58 cassidyturley.com 16 1 urban apartments is driven by the who are new to the product type. We rate is under 3 %, down 9.8% from one two largest demographic segments last saw this during the condo boom in year ago. in the marketplace at this time, and the middle of the past decade. specifically their stage of life and its Average rents across the metro area are corresponding affect on housing choice. $908, up slightly from one year ago. Rental Rates, Vacancy and Absorption Downtown Minneapolis rents are up to Homeownership has less appeal among ' The latest rent and vacancy information $1,244 from $1,197 one year ago. It is young urban dwellers, which is also pushing demand. provided by GVA Marquette Advisors expected that rents will show increases indicates a sharp drop in vacancy in much of the market during the course The baby boom generation (born year- over -year. The current metro area of 2011. ' between 1946 and 1964) numbers 76 vacancy rate is 3.8 %, down from 7.3% million, and the oldest among them are one year previous. Most submarkets in Overall, the Twin Cities absorbed 6,400 entering retirement age. As a result, the metro report a vacancy rate of less units in 2010, an all -time record and many are empty- nesters and /or newly than 5.0 %, and the core cities perform a nearly 10,000 unit swing from 2009 retired and interested in selling suburban better than the suburbs overall, with when absorption was negative 3,450 single - family homes in favor of urban Minneapolis vacancy at 3.0% overall. units. GVA cites a combination of living. Additionally, the decline in the for- The downtown Minneapolis vacancy additional jobs created in 2010 and a ' sale housing market makes apartments more attractive to this generation as well, which indicates a shift in mentality Multifamily $ /Unit Multifamily Cap Rates towards housing. ' 140 _ 10% Echo - boomers (born between 1977 and 1995) is 80 million- strong, and 120 - -_ -- - 9% NationalAvg— demonstrating a strong preference for — Market Avg urban living as well. They are more diverse, putting off marriage and child 100 $� bearing, and the investment in a home W4�V V or condo doesn't hold the same luster it so 7 % once did. Together, these groups total 156 60 6% VV ' million people or more than half of the U.S. population, and they certainly 40 02 03 04 05 06 07 08 09 10 5% 02 03 04 05 06 07 08 09 to are impacting the apartment market Source: Real CapitalAna/ytics especially in urban areas. The flurry ' of new and proposed apartments in Minneapolis and St. Paul, particularly the Uptown and Minneapolis CBD, is Selected Multifamily Sale Transactions evidence of this shift. Property Name City Price/Unit Year Built ' Chasewood Gates Minnetonka $110,417 1988 Several newly -built condo projects have White Bear Woods White Bear Lake $100,329 1987 been converted to apartments in the past couple years, and several others Southview Gables Inver Grove Heights $95,401 1987 originally proposed as condos are now Hampshire Hills Bloomington $87,079 1986 proposed to be apartment projects, Stratf wo Minnetonka $84,706 1979 perhaps most notably the Penfield Granada Lakes Townhomes Oakdale $83,559 1976 in St. Paul and Track 29 in Uptown Minneapolis. Valley c Woodbury $83,085 1987 Northgate Woods Blaine $70,667 1980 Established apartment owners and WoodiawnTerrace St. Paul $51,150 1968 developers are competing with others ` Source: Real Capital Analytics 59 cassidyturley.com 17 shift towards ads renting from owning Multifamily Developments Proposed or Under Construction in Minneapolis housing. Developer Brighton Greenleaf Affordable New Forecast Lyndale & 28th Street West 63 The stars are lining up for a development CPM Development 18W Lake 57 Market New boom, as new projects are proposed Dominium 1006 Lake Street 120 Affordable Rehab almost weekly. We expect a significant Doran Development 412 Lofts 102 student New number of these to move forward in Everwood Development 730 Hennepin 45 Affordable Rehab 2011 as financing improves and the overall health of the market continues. G1Cco Flux ®2838Fren,ont 216 Market New ' We expect modest rent growth in 2011. Greco Holden Building 120 Mix Rehab Klodt 38th Street Station 64 Market New The Minneapolis CBD and Uptown 372529th Avenue South will continue to be the most popular L&N Development Former Brown Institute 500 Mix Rehab ' locations for development, with transit MetroPlains LLC Audubon Crossing 30 Affordable New corridors and the University of Minnesota Minn Development 5202nd street Southeast 91 Affordable New area also attracting attention. In Wail Companies particular, the Minneapolis CBD will be Norm Bjomnes 46th & Hiawatha 104 Market New watched closely. opus Stadium Village Flats 120 Student New Phoenix Development Track 29 (two phases) 198 Market New Student Housing near the University Source GVA Marquette ' of Minnesota will continue to be in demand, though sites are still difficult to find or assemble and costs for land until more new product returns us to are rising. The younger generations' equilibrium once again. That may be preferences for technology and other a few years away given the lead time amenities are driving new design and construction timelines for this new standards and upgrades never seen product to come on line. before. ' The suburbs will see some new CBD market rate sites will continue to be construction as rent levels will be in demand for new product required to tested, pushing through the ceilings meet the growing momentum for urban that have held back new starts due to ' living in Minneapolis and St. Paul. The economic constraints on feasibility. Some increasing availability and appeal of pioneering may occur but we believe it mass transit along with rising fuel prices can be successful if well- designed for ' will further drive this demand. Boomers the "new renter ". Rehabs of older class will become the newest "renters by B and C suburban product will become choice" and will enter the market essential to maintain occupancy as many in larger numbers. Their tastes and renters will vacate in favor of the newer ' preferences for quality will bring new amenities and design. demands on developers to offer higher architectural creativity, more attractive Exciting times for rental housing are on common areas and unit finishes that the the horizon as it garners new respect , rental market has never seen before. and even dominance in the quest for capital. Capital is still accumulating for apartment acquisitions and demand will be high. More joint ventures with Institutional Equity players are just around the corner. Values will rise 60 cassidyturley.com 18 1 1 1 Investment Market 1 The Bottom of the Cycle Across property sectors, improvements 1 The bottom of the cycle has been slow have not occurred evenly, as the and painful, not just in the Twin Cities multifamily investment market is but nationwide. The recession has in recovering while the other property types many ways created three investment are just getting their footing. 1 categories - the top end, the bottom end and the muddy middle. Nationally, the interest has been in the Tier 1 cities (e.g. Washington D.C., New Overall, there were very few investment York) that show rent and value increases 1 property sales in 2010. An example of over time, through the cycles. Tier 2 this is the first office sale did not occur cities, such as Minneapolis have rents until June, and much of the activity took and values that do not trend upward place in the 4th Quarter of the year. This over the long term, but just cycle (except 1 — _ is not for a lack of buyers in general, but for apartments). mostly because sellers are unwilling to Market Indicators consider deflated prices. What is Selling 1 The growing interest among investors Well- occupied, well - located properties 2010 2011 with credit - worthy tenants and long - is toward quality properties, in the term leases are achieving sale prices Multifamily T T best locations, generating strong and comparable to pre- recession levels. Office 0 T sometimes premium values. Sales of With the high cost of re- tenanting, it Industrial � � Class A properties in the best locations is particularly important to have stable are barely off the previous market highs. tenants and demonstrate predictable Retail - Distressed properties are at the bottom cash flows. 1 and generally driven by sellers seeking to get them off the books. Examples of investment sales of Class The muddy middle is Class B and C A properties with high - quality tenants ' properties, sales of which had no traction and low vacancy were very limited, but last year. These properties are not in include 50 South Sixth (office) in the receivership, but are slow to sell because Minneapolis CBD. 50 South Sixth was 1 buyers were underwriting conservatively purchased by Hines for $180 million, or due to the lack of tenant demand and $258 per square foot. high cost of tenanting, and sellers have Strong fundamentals are making the 1 not adjusted their price expectations to apartment market the darling of the the market and remain cautious as they industry, spurring significant new deal with issues surrounding debt. We development. Vacancies are low and call this "price discovery," and expect it rents are stable and expected to increase 1 to be a long process before transaction in many parts of the metro. These volume picks up. favorable factors have the investment We are entering a cycle of new names in community actively seeking to buy 1 the Twin Cities investment community. apartments. For example, Artis REIT entered the With business travel generally Twin Cities industrial market through its rebounding, the hotel investors are purchase of some of AMB's portfolio. As emerging and sales are representative well, some local investors who have been of what makes economic sense. The silent for years are coming back to the story is the same for new and recently market. renovated hotels in prime locations - 1 61 cassidyturley.com 19 1 they are getting top dollar. The sale of Woodbury Lakes is an example of Office $ /sq ft the Hilton in downtown Minneapolis is a retail center that sold in 2010 for 300 an example. $114 per square foot, a fraction of its 2006 sale price of $324 per Distressed Sales square foot. 250 A vast opportunity still exists to purchase The Sheraton in Bloomington is an , properties at distressed prices, either to example of a distressed sale of a 200 reposition, re- tenant or redevelop. hotel, as it sold for approximately • The Four Seasons Mall in Plymouth $35,000 per room, primarily due to 150 ' is an example of a proposed deferred maintenance and its ability redevelopment, as the retail center to attract financing. 100 has languished with high vacancy ' and was purchased by Walmart for To date in this cycle, the foreclosed 50 properties in the Minneapolis metro 02 03 04 05 06 07 08 09 10 redevelopment. have been residential land and lots, • Block E is another example, and commercial land, small commercial Office Cap Rates ' was purchased from the former properties and a handful of quality real lender by Atalus essentially for estate. Many more quality properties 11% the value of its 550 underground will cycle through the foreclosure parking spaces. Plans are not process in 2011, affording investors the 10% — National Aug yet known, but will likely involve opportunities they have been waiting for — Market Avg 9°6 a significant makeover before since 2008. Cash and very credit worthy successful re- tenanting. buyers have a distinct advantage over all 8% , other buyers, as sellers want to know the sale they make is going to close. There 796 is still a lot of price discovery occurring. It is particularly tough for lenders who 6% ' receive only one offer for a property. 5% 02 03 04 05 06 07 08 09 10 Investment Considerations Source: Real Capital AnaVics Office: The two largest office markets ' in the Twin Cities (the Minneapolis amount of space per person and some CBD and Southwest) have shown are increasingly relying on employees to significant signs of recovery, but given share workstations or work from home. the bifurcation of the market, the recovery has only been seen in the Multifamily: The darling of the industry, Class A market. Well leased Class A the apartment market is recovering office buildings in this submarket and the best. Vacancy is low, rents are ! Y ' other quality locations may generate increasing and likely to continue to do very competitive prices, and they are so, and debt and equity capital are Significant Sale Transaction also the most likely to retain value and most readily available. Demand is Fifty South Sixth outperform the rest of the office market. high, cap rates are trending down, and Minneapolis, MN opportunities exist. Given fundamentals, ' Size: 698,606 sq ft Carefully pick and choose among other expect strong competition for good Price: $180,000,000 office properties. Vacancies are high, product in high - profile locations. Seller: KanArn Grund rents are soft, concessions are prevalent, Buyer: Hines Global REIT and transaction costs are not going Industrial: With vacancy at 13% and away. Companies are shrinking the positive 4th Quarter 2010 absorption, 1 62 cassidyturley.com 2 0 the industrial market is in better shape Industrial $ /sq ft Industrial Cap Rates ' relative to office. Despite signs of job 11 — growth and increased demand for 80 space, interest among investors remains 70 low. Fundamentals are the same as for 10% � National Avg - Market Avg ' office – well - located, high functionality buildings are getting the tenants. 50 9% 40 Complicating the issue is the fact that, despite significant vacancies in 30 $ the marketplace, much of it is older, 20 obsolete or otherwise not what users 7% seek. Therefore, many larger, growing 10 ' companies are choosing build -t0 -suits ° 02 03 04 05 06 07 08 09 10 6% 02 03 04 05 06 07 08 09 10 rather than making due with what is Source: Real Capital Analytics available in the market. Nonetheless, ' buildings with higher clear height (at least 24 feet) and less office build -out have the advantage in the marketplace. Retall $/sq ft Retail Cap Rates ' Retail: There is very little interest in retail 275 lo% property as an investment. Population density matters – urban infill locations like 50th and France, Uptown and Grand National Avg Avenue or near key suburban shopping 225 9% Market Avg nodes like Rosedale, Southdale, Ridgedale and Eden Prairie are where 175 s% ' there is low vacancy, and rent pricing power exists in these areas. -fP Hotel: The market for hotels is starting 125 7 ' to come back. Occupancy and room rates have both shown signs of recovery. 75 6% 02 03 oa 05 06 07 os 09 10 02 03 oa 05 06 07 oa 09 10 We expect healthy growth in ADR and Source: Real Cap anaryres RevPAR in 2011, albeit some it that ' offsetting losses stemming from the recession. NOls will increase as well, with likely double -digit growth in 2011. ' With incomes growing, valuations will grow modestly, and sales will occur. There are opportunities to purchase hotels that, while not technically ' distressed, are achieving relatively low prices historically. We view the hotel market to be an area of potential ' s' ngnificant wealth. n conclusion, expect 2011 sales nationally to start off slow, but step up in ' the second half of the year. 63 cassidyturley.com 21 1 1 Sector Maps 1 1 Office, Retail Industrial � ANOKA COUNTY - 1 NORTHWEST ao sl NOR HEAST - / NORTHWEST 'y I PAVE/ NOR NO E/ / 1 NOR HEAST WEST gyp. rr aa d+ S` WASHINGTON COUNTY xNINNAPO4 � � 1 '� SOU WEST SCOTT 1 DAKOTA j \l, SCOTT DA KO A COUNTY COUNTY COU Y COUNTY Minneapolis Northeast Southwest Minneapolis Hastings Southwest ' Saint Paul . Arden Hills • Bloomington • Inver Grove . Bloomington • Little Canada Chanhassen Saint Paul/ Heights 0 Chanhassen Anoka County 0 Maplewood 0 Chaska Northeast a Lakeville Chaska ' • Andover • Mounds View 0 Eden Prairie Andover 0 Mendota Heights . Eden Prairie • Anoka • New Brighton 4 Edina Anoka 0 Rosemount 0 Edina Hopkins Arden Hills South Saint Paul 1 • Blaine • North Oaks • p s Excelsior • Columbia Heights 0 North St. Paul • Minnetonka • Blaine 0 West Saint Paul 0 Hopkins • Coon Rapids 0 Roseville a Richfield & Columbia Heights 0 Minnetonka Coon Rap ids Northwest • Fridley Shoreview p�ds . Mound Washington County 1 • Lino Lakes Saint Anthony � t Y Fridley Alb Richfield • Cottage Grove . Lino Lakes Brooklyn Center • Ramsey Vadnais Heights Saint Louis Park • Spring Lake Park • White Bear Lake ' Forest Lake • Little Canada • Brooklyn Park . Wayzata • Lake Elmo Maplewood 0 Champlin Dakota County Northwest 0 Newport a Mounds View 0 Crystal Washington County ' • Apple Valley Albertville • Oakdale New Brighton Golden Valley • Cottage Grove • Burnsville 0 Brooklyn Center a Oak Park Heights 0 North Oaks Maple Grove 0 Forest Lake • Eagan • Brooklyn Park 0 Stillwater & North St. Paul Medina 0 Lake Elmo • Farmington • Champlin 0 Saint Paul Park a Ramsey New Hope • Newport ' • Hastings a Crystal Woodbury 0 Roseville Osseo Oakdale • Inver Grove 0 Maple Grove Shoreview • Plymouth 0 Oak Park Heights Heights New Hope Yrlflt Spring Lake Park Robbinsdale 0 Stillwater ' Osseo • Lakeville • Excelsior Saint Anthony Rogers a Saint Paul Park • Mendota Heights Robbinsdale Golden Valley . Vadnais Heights Woodbury • • Hopkins Scott County • Rosemount Rogers • White Bear Lake • Medina Chaska 1 • South Saint Paul Scott COWL • Minnetonka • County Dakota County Prior Lake West Saint Paul • Chaska • Mound Apple Valley • Savage • Prior Lake Plymouth 0 Burnsville • Shakopee • Savage Saint Louis Park 0 Eagan , • Shakopee • Wayzata • Farmington 64 cassidyturley.com 2 2 1 Key Definitions ' Net Absorption Rentable Area Total Expenses The net change in the occupied space The portion of the gross floor area on which The annual cost per sq ft of all operating between the beginning and end of a rent can be obtained (BOMA Standard). expenses, including real estate taxes. period. Shadow Space Vacant Area Net Rent The vacant space within the office market The total square feet of unoccupied The quoted asking rent, less total resulting from excess space leased, but space including sublease space and ' expenses, not occupied by office tenants. unimproved areas of completed buildings. ' Office Classifications Industrial Classifications Retail Classifications For multi- tenant office buildings 30,000 For multi- tenant industrial buildings Shopping Centers in this study have a sq ft or greater minimum of 30,000 SF of gross leasable area ' (GLA), including anchor stores. Also included Central Business District (CBD) Office Showroom in the downtown markets is retail space in • Class A The office showroom (OS) is defined excess of 20,000 SF within a mixed -use ' Newer building in first class in this study as one -story multi- tenant development, such as office. Not included are condition, design and d6cor. Large projects over 25,000 rentable SF with single - tenant, free- standing retail stores. and /or tall in size with mostly more than 30% finished office space, multiple skyway linkage. typical clear ceiling heights of 12' to 16', Neighborhood Centers with nearby freeway access and high Range in size from 30,000 to 180,000 SF • Class B visibility. Usage flexibility, smaller bay of GLA and may have a supermarket as a Seasoned buildings good sizes and better than average landscaping major anchor. condition and generally over ten are key criteria of an OS. years old. Mid -rise in size and may Community Centers include skyway linkage. Office Warehouse Typically range between 180,000 and • Class C The office warehouse (OW) buildings 500,000 SF of GLA, although some Older buildings of any size that may included in this survey are defined as centers are larger (up to 800,000 SF). ' include skyway linkage. multi- tenant facilities of 25,000 rentable They are usually anchored by a discount, SF or larger. These facilities typically offer small department or variety store Suburban — Class A 10% to 20% office finish and have 16' to and quite often include a drug store, ' Newer building, in first -class condition 20' clear ceiling heights. supermarket or warehouse grocer. Power and d6cor. Large and /or tall in size with centers from 100,000 to 750,000 SF are excellent visibility and highway access. Bulk Warehouse included as community centers. ' Prominence and identity are key criteria The bulk warehouse (BW) buildings, per for this group. this report, are described as multi- tenant Regional Centers projects with 50,000 rentable SF or larger, Include what are typically considered ' Suburban — Class B constructed during the postwar era. regional or super - regional shopping Seasoned buildings, generally over ten These buildings offer 5% to 10% office malls. These indoor centers have at least years old. Lower or smaller in size with less finish and have 20' or greater clear ceiling 300,000 SF of GLA and must include a ' than prime visibility and highway access. heights. minimum of one major department store. 65 cassidyturley.com 2 3 Directory 1 Industrial Sales & Leasing Office Sales & Leasing Corporate Services Tom Dunsmore William J. Buckley Frank J. Sherwood ' Associate Vice President Associate _'�"' Vice President 612.347.9335 612.347.9319 �� 612.347.9323 Kevin Lied Peter J. Dufour, CCIM Brian W. Woolsey ' Associate Vice President Vice President t 612.347.9346 612.347.9342 612.347.9308 Timothy Olsen Erik J. Heltne 1 Managing Principal Associate Vice President Associate Dennis L. Panzer 612.347.9344 612.347.9359 Managing Principal 1 Ronald R. Scholder, SIOR Norma E. Jaeger, CCIM, RPA 612347.9309 Senior Vice President Vice President 612.347.9304 612.347.9333 Property Management 1 Dean R. Freeman, CCIM, RPA Mark F. Sims Richard L. Keller Principal, Senior Vice President Principal, Senior Vice President Principal, Senior Vice President 612.347.9312 ' 612.347.9345 612.347.9354 Asset Management David M. Stokes, SIOR Mark A. Stevens Dawn M. Grant, CCIM, CPM, RPA Vice President Associate Vice President Principal, Senior Vice President ' 612.347.9366 612.347.9365 2 612.347.9301 Capital Markets Kai M. Thomsen 1 Mark W. Kolsrud, SIOR, CPM Vice President Marketing Principal, Senior Vice President 612.347.9318 Jennifer L. Umberger, PCM 612.347.9373 Senior Manager Retail Sales & Leasing 612.347.9332 1 Julie L. Lux, CCIM Andrea L. Christenson Associate Vice President Vice President Research , 612.347.9316 612.347.9395 Mark Jadin Associate James M. McCaffrey, SIOR, CCIM Jennifer A. F. Pelant 612.347.9311 ` Principal, Senior Vice President Associate ' 612.347.9355 612.347.9315 Mark W. Reiling, CRE, SIOR Molly S. Townsend 1 Principal Associate Vice President 612.347.9303 612.347.9313 66 cassidyturley.com 2 4 Cassidy Turley `rS 1 Acknowledgements ' Investor Services Occupier Services The Cassidy Turley Minneapolis —Saint Paul • Capital Markets • Corporate Services Annual Market Report was made possible ' through the continuing cooperation of • Land Acquisition and Disposition • Land Acquisition and Disposition property representatives who gave their time • Landlord Representation • Owner /Occupier Sales to provide and verify the information used in this report. Cassidy Turley extends its ' • Owner /Occupier Sales • Project and Development Services appreciation to these individuals. • Project and Development Services • Strategic Consulting Research, Analysis & Production • Property Management • Tenant Representation Research, data collection, and analysis by Mark Jadin, Dennis Panzer, and GVA Marquette ' Advisors (Apartment Data). Specialty Services Practice Groups Jennifer Umberger, PCM - Editor, Senior • Auction Services • Automotive Manager - Marketing ' • Distressed Asset Services • Food Facilities Jaime Hammer - Graphic Production • Location Advisory and • Healthcare Sam Newberg - Freelance Writer Incentives Practice • Higher Education Permission is granted to quote from this ' • Logistics /Multi -Modal Hospitality publication only when Cassidy Turley is credited as the source. The information • Mission Critical Services • Law Firm contained in this report was provided by • Real Estate Tax • Life Sciences sources deemed to be reliable. However, ' Consulting/Appeal no guarantee is made as to the accuracy • Not - for - Profit or reliability. As new, corrected, or updated • Receivership Services Retail information is obtained, it is incorporated • • Sustainability Consulting into both current and historical data, which ' Valuation Service may invalidate comparison to previously • issued reports. Electronic versions of all reports may be accessed via www.cassidyturley.com. About Cassidy Turley Cassidy Turley is a leading commercial real estate services provider with 3,000 professionals In 60 offices nationwide. The company represents a wide range of clients --from small businesses to Fortune 500 companies, from local non - profits to major institutions. The firm ' completed transactions valued at $17 billion in 2010, manages 430 million square feet on behalf of private, institutional and corporate clients and supports over 25,000 domestic corporate services locations. Cassidy Turley serves owners, investors and occupiers with a full spectrum of integrated commercial real estate services — including capital markets, tenant representation, corporate services, project leasing, property management, project and development services, and research and consulting. In 2010, the firm enhanced its global service delivery outside of North America through its partnership with GVA. Please visit httpl/wwwcassidyturieycom for more information ' about Cassidy Turley. Copyright ® 2011 Cassidy Turley All rights reserved. 67 cassldyturley.com ' Appearances by Taxpayers with an Appointment Abraham & Lizeth Montemayor Residential 5307 Knox Ave N. PID # 02- 118 -21 -44 -0066 Tony Yang Commercial Kashia Adult Daycare ' 5650 Lilac Dr. N. PID # 02- 118 -21 -42 -0032 9816 Palm St. LLC Residential 6300 France Ave N. PID # 34- 119 -21 -42 -0008 I Abraham & Lizeth Montemayor 15307 Knox Ave N. Mr. Montemayor contacted the Assessor's office February 24, 2011, regarding the 2011 estimated market value of $213,000 on his property. Mr. Montemayor provided a copy of a refinance appraisal completed December, 2010 indicating a market value of $201,000. Mr. Montemayor provided an appeal application requesting an estimated market value of $190,000. A property review was completed by the City Assessor on March 1, 2011. The review indicated only changes to the basement quality of finishing and progress on a roughed -in full bathroom in the basement. The Assessor's updated characteristics indicate an estimated market value of $215,200. As the basement finish and basement bathroom are considered partially complete for the 2011 assessment, and these improvements will be reviewed in the fall of 2011, it is the Assessor's ' recommendation to sustain the 2011 estimated market value at $213,000. The completion of the partial improvements will be calculated with the 2012 assessment. ' Owner(s) statement of estimated market value or classification and presentation of factual information regarding the property. Questions addressed to the owner regarding the market value or classification. • Assessor's statement of value or classification and presentation of factual information regarding the property. ' Questions addressed to the Assessor. • Action by the Local Board of Appeal and Equalization Local Board of Appeal will select one of the following: Make no change and sustain the 2011 estimated market value or 1 classification. Reduce the 2011 estimated market value. Increase the 2011 estimated market value. If the owner is not satisfied with the outcome of the Local Board of Appeal and Equalization they may appeal to the County Board of Appeal and Equalization. X City of Brooklyn Center A Millennium Community ' TO: 2011 Brooklyn Center Local Board of Appeal and Equalization RE: Abraham Montemayor Lizeth Montemayor 5307 Knox Ave N. Brooklyn Center, MN 55430 th Mr. Montemayor contacted the Assessor's office February 24 , 2011 regarding the 2011 estimated market value of $213,000 for taxes payable in 2012, on his property at 5307 ' Knox Ave N. A review of the property was completed on March 1 st, 2011 with the City Assessor. The ro ert is a 2,320 s . ft. two story home with a two car tuck -under garage in P p Y q rY g excellent condition. The main level includes a living, dining, kitchen, family room, and a half bathroom. The first floor area finish includes ceramic the flooring, six panel interior ' doors, and a fireplace. The kitchen area is large and includes a breakfast bar with seating, and raised panel cupboards. The second floor finish includes four bedrooms, one small office, laundry facilities, and two full size deluxe bathrooms. The basement finished area includes one family room and one additional finished room, but no bedrooms. Both rooms include large egress windows, ceramic tile flooring, sheetrock walls, sprayed ' ceilings and recessed lighting. The basement finish is missing final electrical plates, trim and door finishing and also includes a partially completed full bathroom, with all fixtures present but no connections at the time of review. The property has a gas forced air furnace and central air conditioning. After reviewing the property, changes were made in physical characteristics to the quality ' of the basement finish and verification of a rough -in full bathroom. The property was reviewed in the fall of 2009 for completion and at that time the basement area was noted as having 75% of the basement finished with framing, insulation and poly, and graded as ' substandard. After reflecting the characteristic changes based on the March 1, 2011 review, the property has an estimated market value of $215,200. Mr. Montemayor was contacted March 9 2011 with the findings of the review and the recommendation to sustain his 2011 estimated market value at $213,000. The Assessor noted that the remaining basement finishing and completion of the basement bathroom ' would be considered completed on the 2012 assessment. He declined this offer and indicated his intention to appear before the Local Board of Appeal and Equalization. ' The enclosed sales comparables included by the Assessor's office compares the subject property to two similar sized homes in Brooklyn Center. Due to the lack of two story home sales in Brooklyn Center, additional two story sales were included from Crystal and Minneapolis. The subject property is larger than the average 1,000 sq. ft. home in Brooklyn Center, and all five comparables. Comparable six, located in Minneapolis is more recent than the sales study period, but was provided as a comparable, in the 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 ' FAX (763) 569 -3494 www. cityo fbrooklyncenter. org refinance appraisal, and is the closest comparable property to the subject. The comparables sold indicate a price per square foot range of $109 - $176. The enclosed i sales comparables indicate a range of sale prices from $185,000 to $240,225. Mr. Montemayor provided an appeal application requesting a 2011 estimated market ' value of $190,000. Mr. Montemayor also provided a copy of a refinance appraisal from December, 2010 completed by Derick Schultz. The refinance appraisal indicated a market value of $201,000. A copy of this appraisal has been included as part of this ' report. The appraisal includes three comparable sales. Sale comparable one and two are not considered open market as they were sold as "shorts ", short of the mortgage. Comparable three is also considered a rejected sale due to a corporate entity sale. The appraiser also included an active sale, which was canceled on February 7, 2011 and a pending sale that sold December 23rd, 2010, for $210,000. It is the assessor's recommendation to sustain the 2011 estimated market value of $213,000 for taxes payable in 2012, as indicated by physical review, and sales ' comparables. Respectfully submitted, ' Nancy W jcik, SA A City Assessor r t City of ' BROOKLYN CENTER ' 2011 Local Board of Appeal and Equalization pp q 1 #1 Abraham Montemayor 1 Lizeth Montemayor 5307 Knox Ave N 1 02- 118 -21 -44 -0066 I l k e N r NSA ¢ rE � ■ i e�n ' 2011 Assessed Value: $213,000 Recommendation: Sustain Value of $213,000 ' This report is not an appraisal as defined in M.S. ,§82B.02 (subd.3) nor does it comply with the Uniform Standards of Professional Appraisal Practice. It is intended to be used as a reference only and any use other than its intended use is prohibited and unlawful The author does not represent this to bean appraisal and is not responsible for any inappropriate use. ' It is a report ofpublic records using a mass appraisal technique. City of Brooklyn Center Assessing Department 2011 Local Board of Appeal and Equalization Staff Report #1 Abraham Montemayor ' Lizeth Montemayor 5307 Knox Ave N ' 02- 118 -21 -44 -0066 ' Assessment Year 2011 $213,000 Assessment Year 2010 $218,300 Assessment Year 2009 $185,000 LJune9, 2005 - 134,200 (05 - Personal Representatives Deed) Orig. home on oversized lot I , 1 ! 1 Em NEEMM Mr. Montemayor contacted the Assessor's office on February 24, 2011 regarding his 2011 estimated market value of $213,000. He had recently had an appraisal completed for refinance that determined a value of $201,000 by sales comparison approach and $240,778 for the cost approach. An interior review of the home was completed on March 1, 2011. Based on a complete review of the property, the only characteristic changes to the property since the prior inspection were the quality /class of basement finish, and the addition of fixtures to a full basement bath rough -in. The basement was previously as 75% finish at sub- standard due to only ' framing, insulation and poly. The basement finish upon inspection is above averaage finish and includes sheetrock walls, ceramic tile floors, sprayed ceilings and recessed lighting. All that remained to complete was trim work. The basement bathroom fixtures were present, but not ' connected. The 2011 recommendation is to sustain the EMV of $213,000 OEM ' Sustain Value of $213,000 Nancy Wojcik March 1, 2011 2011 Board of Appeal and Equalization 2 # 1 Subject Data Summary ' PID #: 02 -118 -2144 -0066 Property Address: 5307 Knox Ave N Brooklyn Center, MN 55430 Multiple Address: No Lot/Block: 000/004 Addition: Humbolt Addition Legal(120): LOTS 1 AND 2 Owner(s): Abraham Montemayor Lizeth Montemayor Property Classification: Residential - Homestead 2011 EMV: 213,000 2010 EMV: 218,300 2009 EMV: 185,000 Last Sale: 6/29/2005 - 134,200 - Personal Representatives Deed - 05 Lot Size: 11,936 Sq.Ft. / Acres ' Zoning: R2 Dwelling T Sin le Famil ype: g y Style: Two Story ' Bedrooms: 4 Baths: 3 Actual Year Built: 2005 Gross Building Area: 2,320 Basement Area: 940 Bsmt Finished %: 75 Garage #1: 2 Car Attached ' Garage #2: None 2011 Board of Appeal and Equalization 3 # 1 1 Additional Subject Photos ." Nor Nor all i OF � L meriol 0 11 1 201 1 x R y X • a °:n ti r n• ' Exterior 2011 Board of Appeal and Equalization 4 # I Additional Subject Photos t ' Exterior Rear e 1 Kitchen 03 -01 -2011 2011 Board of Appeal and Equalization 5 # I Additional Subject Photos ., u 1 Basement Finish 3 -1 -2011 1 _ M1 ' Basement Finish 3 -1 -2011 ' 2011 Board of Appeal and Equalization 6 # 1 Subject Sketch 35' 35' 35' ' Basement First Floor 930 st N 930 st N 5307 KNOX Second Floor c cO i 20' M 20''x, 1380 st r eC (D 440 st N t5' y5' 310 st 15. OPN PCH cO 90 st 20' 20' Sketch by Fger Medina'"' Sketch 2011 Board of Appeal and Equalization 7 #1 Sales Comparables Y 1 _ 1 Comparable 1 1; . Comparable 2 �w r 1 - j Comparable 3 1 V Y �II r Ii�.. era ■ I'I �./. ��� ��._ ■ - ........, Item Subiect Comparable 1 Comparable 2 Comparable 3 PID 0211821440066 2711921340041 0311821240022 2011821110063 Address 5307 Knox Ave N 7000 Halifax Ave N 5701 June Ave N 3413 Georgia Ave City Brooklyn Center Brooklyn Center Brooklyn Center Crystal ' Sale Price $185,000 $240,225 $200,000 Sale Date 10/28/2009 03/31/2010 8/23/2010 Cash Equivalent Price $185,000 $240,225 $193,640 ' Price Per Sq. Ft. $91.81 $109.92 $139.34 $119.53 Style Two Story Two Story Split Level Two Story Property Area 11,936 12,420 17,280 8464 Actual Age 2005 1964 1969 1974 Quality Class A04 A04 A04 A4 ' 1 st Floor Area 940 858 1,724 810 Total GBA 2,320 1,683 1,724 1620 Finished Area 3,025 2,096 2,932 1990 ' Basement Area 940 825 1,610 810 Basement Finished ( %) 75 % 50% 75 % 45% ' Total Bedrooms 4 4 5 4 Total Bathrooms 3 2 3 2 Garage 1 Floor Area 440 440 594 ' Garage 1# of Cars 2 2 2 2 Garage 1 Placement Attached Attached Attached Attached ' Walkout Type Standard Walkout Air Conditioning Central Central Central Central Fireplaces 1 1 Deck Area -Total 595 304 Porches 90 120 ' Influences Subjects Estimated Market Value $213,000 / $91.81 per Sq. Ft. GBA t t J a;i~a M Q W r .S 4. �,,�� a ,a- ao- Item Subiect Comparable 4 Comparable 5 Comparable 6 PID 0211821440066 2011821410056 0811821440134 1111821110253 ' Address 5307 Knox Ave N 6611 31 st Ave N. 6406 45th PI N 5109 Humboldt Ave N City Brooklyn Center Crystal Crystal Minneapolis ' Sale Price $225,000 $215,000 $210,000 Sale Date 6/16/2010 4/2/2010 12/23/2010 Cash Equivalent Price $221,000 $206,400 $203,700 Price Per Sq. Ft. $91.81 $120.44 $123.74 $176.82 Style Two Story Two Story Two Story Two Story Property Area 11,936 25482 10,200 5227 Actual Age 2005 1950 1994 2003 Quality Class A04 A4 A4 A4 ' 1 st Floor Area 940 1291 1243 1036 Total GBA 2,320 1835 1668 1152 ' Finished Area 3,025 2285 2436 3224 Basement Area 940 450 1243 1036 Basement Finished ( %) 75 % 35% 30% 85% ' Total Bedrooms 4 5 3 4 Total Bathrooms 3 3 3 4 Garage 1 Floor Area 440 Garage 1# of Cars 2 1 2 2 Garage 1 Placement Attached Attached Attached Detached ' Walkout Type Standard Walkout Air Conditioning Central Central Central Central Fireplaces 1 2 1 ' Deck Area -Total 160 Porches 90 144 Influences Pond Alley Subjects Estimated Market Value $213,000 / $91.81 per Sq. Ft. GBA i i I 815tAve NE c ` .... �....... _.... 4 N q °^ K 109 85th Ave N 85th Ave NJ rooklyn Park W Q 4C : 82 �jvti 81 p 1 3rd Ave N � n z F Leo is le Grove �'' 61 tr u n��e N , 73rd Aw NE T ' p 130 , ,*okdale BroOdale Locke Park 88 n °1 N_ 159' 152 Park 252 z r arl Ciom i 73rd ALr. N o Frldley g 44 Are.y . t 71s P ° 252 I w o z 69th Ave N 6sth L, :F ra I vj : y E Ea_4'le a li1i , 52 a SA _ r _ rn 2 q = Lake a °o = m ': 651h Ave N Center 1 z Pike 63rd Ave N 3, M &y Lake D ry 100 Z r.. 45 zi 159 rs s Comp 2 z v 65 t 7tJa St NV. 58th A"� N= Q z ' Bass Lake Rd �Zo '* 5th St NW EUgF,e Hilltop e Comp 6 y 45th Ana NE 4 15 53rdAvcN ��_._ Lake w l \Ndt Lal 9 \ Iv 51st Av Er °. COIU z .� - = 50tH Ave h 1J � � ! Columbia � �� l'er ' Sc 'f'd C � N e wopee ............ ' '� N�.cg �, __ N 49th Atie } 2 t Heights o Lq ;e d r a C3 i a 371h Ave NE 93 - r� Rocddord Rd 9 Crystal Robbin5dale ' r _ U 61 W ' z o +� z ,o z c z r 4 Z St Anthoil 4q Y Clifton I 'Comp tic E d f ', r E 8 136 French 36th Ave tJ P 3 ° ri °' 23 Re ' j E f :� Park T 1. 0 1 , r Z U A . LL f� Comp 4 e z \. X ��, z z v . 4 7: c _ 7 - " U o Lowry Ave N �_ 66 ` NE Lrnvry Ave 88 : R fD L 7 Pdedieine M Z 25th Ave N s> N 7 11 Ave 4A Lake 70 Medicine Lake Rd w uI w C 1911, Ave NE > , ° 81 26th Ave rJ z z z ar Hi'i5'de ' 23,d Ave N C 23rd Ave N � Gi1uth Si GoldEd Valley Rd v S � �� 2.5 mae Medicine Lace Z �: 156 Theodore 14thAveNY� ,2c�11 Microsordl orparatid © 2010 NAVTEQ © ANIP- Golden Wirth COMPARABLE SALES MAP ' COMPARABLE #1 7000 Halifax Ave., Brooklyn Center COMPARABLE #2 5701 June Ave., Brooklyn Center ' COMPARABLE #3 3413 Georgia Ave. Crystal g Y COMPARABLE #4 6611 31 Ave., Crystal COMPARABLE #5 640645 th Place, Crystal COMPARABLE #6 5109 Humboldt Ave., Minneapolis RECEIVED MAR 1.4 2011 CITY OF BROOKLYN CENTER ' LOCAL BOARD OF APPEAL AND EQUALIZATION 2011 Assessment APPLICATION FOR APPEAL ' February 21, 2011 through March 18, 2011 You must return this application by March 18, 2011, to be placed on the Agenda for the Local Board of Appeal and Equalization held April 4, 2011 at 7:00 P.M. ' Names ' Abraham and /or Lizeth Montema or ' Daytime Contact Number: 612 -532 -2707 Property Address 5307 Knox Ave N, Brooklyn Center, MN 55430 i P roperty Identification Number 02- 118 -21-44 -0066 Assessor's 2011 Estimated Market Value $213,000 Is your property residential, commercial or multi - family? Residential If you are appealing a commercial, multi- family or residential rental property you must include income and expense data for calendar year 2010 with your application. What is the reason you are appealing your 2011 assessment? Appraised Value Too High When did you purchase your home? Date of Purchase 06/2005 Purchase Price $134,200 Did you purchase your property from a bank, as a foreclosure or short sale? Private Party Has our roe physically changed since the purchase? maintenance, upgrades, Y property rtY Y Y 9 P � remodeling or structural damage) Please list a brief description below with an estimated cost. ' New Construction- +- $150000 Have you had a recent appraisal for refinancing, a purchase agreement or a market analysis by a real estate agent completed within the last year? Yes If so, what was the determination of value? $ 201.000 What do you think the market value of your property should be? $ 190,000 ' Please provide any documentation supporting your claim of overvaluation or erroneous classification with this application. Appraisal already emailed. 1 Borrower /Client Abraham &Lizeth Montema or - — File No. 9717302 Property Address 5307 Knox Ave N City Brooklyn Center County Hen nepin _ __ _ _ State MN Zi Code 55430 -3057 Lender Pentagon Federal Credit Union L TABLE OF CONTENTS 1 �r 1 I URAR................ ................................................................. ................ ...... ... ......................................................................... ............................... 1 AdditionalComparables 4- 6 .................... ................. ......... ........... ...... ........ - -__._ ........................................................................... ............................... 7 Subject Photos ........ ............................... ................ .............................._ _ __ ........................................................................... ............................... 8 Subject Photos ............................................................ .............................._ .......................................................................... ............................... 9 Subject Photos ............................................................. ............................... __ .......................................................................... ............................... 10 ComparablePhotos 1 -3 ............................................. ............................... ..................................................................................... ............................... 11 ComparablePhotos 4 -6 ............. .......................................... ..... ............... ..... - ............................................................................... ............................... 12 Market Conditions Addendum to the Appraisal Report ................ ........ ...... .._,.., ............................................................................. ............................... 13 USPAPIdentification ......................................................................................................................................................................... ............................... 14 LocationMap ..................................................................... ............................_._ ., ..... ....................................................................................................... 15 Location Map ................................................... ............................... ............................... 16 .............................................................. ............................... BuildingSketch (Page - 1) ............ ................................ ....... ........... ....... ......._. ......... ............................................. ... .................................... ................. 17 i 1 1 1 1 1 1 Form TOCP — 'TOTAL for Windows" appraisal software by a la mode, inc. — 1- 800- ALAMODE Rle No. 9717302 Paae #13 Market Conditions Addendum to the Appraisal Re ort File No . 9717302 The purpose of this addendum is to provide the lender /client with a clear and accurate understanding of the market trends and conditions prevalent in the subject neighborhood. This is a required addendum for all a raisal reports with an effective date on or after April 1.2009. , Property Address 5307 Knox Ave N City Brooklyn Corder State MN ZIP Code 55430 -3057 Borrower Abraham&Lizeth Montemayor Instructions: The appraiser must use the information required on this form as the basis for his/her conclusions, and must provide support for those conclusions, regarding housing trends and overall market conditions as reported in the Neighborhood section of the appraisal report form. The appraiser must fill in all the information to the extant , it is available and reliable and must provide analysis as indicated below. If any required data is unavailable or is considered unreliable, the appraiser must provide an explanation. It is recognized that not all data sources win be able to provide data for the shaded areas below; if it is available, however, the appraiser must include the data in the analysis. it data sources provide the required information as an average instead of the median, the appraiser should report the available figure and identify 4 as an average. Sales and listings must be properties that compete with the subject properly, determined by applying the criteria that would be used by a prospective buyer of the subject property. The appraiser must explain any anomalies in the data, such as seasonal markets, new construction, foreclosures, etc. , In"niory Analysis Prior 7 -12 Months Prior 4-6 Months Current - 3 Months overall Trend Total # of Comparable Sales Settled 2 2 3 Increasing Stable JU Declnm Absorption Rate Uotal Sales/Months 0.33 0.67 1.00 oceeas Stable D%fin In Total # of Comparable Active Listings 1 2 2 Declining Stable , llCrea ' Months of Housing Su (Total Lis' s/Ab.Rate 3.0 3.0 2.0 Dechi Stable Imes ` ' Median Safe & List Price, DOM, Sale /List % Prior 7 -12 Months Prior 4-6 Months Current - 3 Months Overall Trend Median Comparable Safe Price 232,500 201.900 1 200,000 LJ Increasing Stable E Declining Median Comparable Sales Days on Market 71 86 65 Declinina Stable Increasi Median Comparable List Price 219,000 207 400 208,000 Increasing Stable Decfi ' ' Median Comparable Listings Days on Market 86 76 65 DecBn Stable Increa Median Sale Price as % of List Price 97% 98% 98% Increasin Stable Declini Salver- deveoper, builder, etc. paid financial assistance prevalent? Yes No DecUrtf Stable lncreasi Explain in detail the seller concessions trends for the past 12 months (e.g., seller contributions increased from 3% to 5%, increasing use of buydowns, closing casts, condo fees, options, etc:. If seller concessions are used in the Sub'ects market but at this time appear to have a nominaf impact and usually under ' 4.5 %. Are foreclosure sales REO sales a factor in the market? Yes No If yes, in (including the trends in listings and sales of foreclosed properties). ' Cite data sources for above information. MILS / Tax Records / Appraisercoop.com. Summarize the above information as support for your conclusions in the Neighborhood section of the appraisal report form. 9 you used any additional information, such as , an analysis of pending sales and/or expired and withdrawn listings, to formulate your conckusions, provide both an eiplanatic n and support for Tour conclusions. 7 -12 months sales data most likely is accounted for seasonal sales in the Subjects market other data supWs stable number of sales. If the subject Is a unit In a condominium or cooperative projed , com a the owing: Name: ' Subject Project Data I Prior 7 -12 Months Prior 4-6 Months I Curren - 3 Monts Overall Trend Total # of Comparable Sales Settled Increasing Stable DBCN ' Absorption Rate otel Sales/Morths Increasing Stable Declining' Total # of Active C rebla Listings s S11111 ltcr Months of Unt S otal Lisfin s/Ab.Rate Declining Stable lncrea ' Are foreclosure sates (REO sales) a factor in the project? Yes No if yes, indicate the number of REO listings and explain the trends in listings and sales of foreclosed properties. . Summarize the above trends and address the impact on the subject unit and project. Si nature - a Sign ature AppraisaLfAme ck Sc Supervisory Aggiser Name Company Narre Derrick B Schultz C me Na Company Address 10143 Abbott AveS,Bloominaton,MN,55431 Company Address State License/Cerfificat m # 20217224 State MN State LicensalCertification # State ' Email Address Email Address Freda Mac Form 71 March 2009 Page 1 of 1 Fannie Mae Form 1004W March 2009 " Form tO04MC2 — 'TOTAL for Nfmdows' appraise software by a la mode, inc. -1. 800- ALAMODE ' l Re No, 9717 302 P e # Subject Photo Page Borr ower /Client Abr aham &Lizeth Montema Pro y Adtlress 5307 Knox A ve N __ __ CJy Brockl r, ;enter County Hen _ Slate MN Zip Code 55430 -3057 Lender Pentagon Federal Credit Union Subject Front 5307 Knox Ave N Sales Price Refinance v ` Gross Living Area 2,320 Total Rooms 8 z Total Bedrooms 4 Total Bathrooms 2.5 Location Residential View Residential Site .27 Acre(s) Quality Average Age 5 Subject Rear y .I. 4 * 1 Subject Street 57 ti Form PICPXSR — "TOTAL for Windows" appraisal Q�fnvare by a Is mode, Inc. —1- 800- ALAMODE File No. 9717302 Page #9 Subject Photo Page Borrower Client Abraham &Lizeth Montema or _ Property Address 5307 Knox Ave N City Brooklyn Center Coun Henn epin_ _ _ State MN Zip Code 55430 -3057 Lender Pentagon Federal Credit Union {. Subject Kitchen to r� ` + 5307 Knox Ave N Sales Price Refinance Gross Living Area 2,320 Total Rooms 8 Total Bedrooms 4 Total Bathrooms 2.5 – ^^ – – Location Residential View Residential Site .27 Acre(s) Quality Average Age 5 i Subject Family Room I W II[�i - Subject Main HB ..` fl ! Form PICPIX.SR — "TOTAL for Windows" appraisal software by a la mode, inc. — 1- 800 - ALAMODE Fil No. 717 2 Pa #10 Subject Photo Page B orrower /Client Abraham &Lizeth Montemayor Pra er[ Address 5307 Knox Ave N Cit Brooklyn Center County Henne _ State MN Zi Code 55430 -3057 Lender Pentagon Federal Credit Union _ Subject Upper Bath � Knox Ave N y _ Sales Price Refinance Ae ' Gross Living Area 2,320 Total Rooms 8 Total Bedrooms 4 k . Total Bathrooms 2.5 Location Residential y * by View Residential Site .27 Acre(s) a Quality Average x Age 5 Subject Master Bath Subject Living Room (< X � Form PICPIX.SR — "TOTAL for'Mndows" appralsa! scfnyare by a la mode, inc. —1- 800 - ALAMODE File No. 97173021 Page #11 Comparable Photo Page Borrower /Client Abraham &Lizeth Montemayor Property Address 5307 Knox Ave N City Brooklyn Center County Hennepin State MN Zip Co de 55430 -3057 Lender Pentagon Federal Credit Union Comparable 1 5135 Humboldt Avenue N Prox. to Subject 3110 Mile Sale Price 168,000 k Gross Living Area 1,924 Total Rooms 7 Total Bedrooms 3 Total Bathrooms 1 L� Location Residential taw. ter• rrr �'�. View Residential Site .14 Acre(s) Quality Average Age 7 W Comparable 2 PNI 5006 Humboldt Lane N Prox. to Subject 4/10 Mile x �kE Sale Price 200,000 Grass Living Area 1,919 Total Rooms 8 Total Bedrooms 4 Total Bathrooms 2.5 Location Residential ' View Residential Site 11 Acre(s) Quality Average Age 4 3 Comparable 3 6617 - 45th Avenue N Prox. to Subject 3 2/10 Mile Sale Price 201,900 Gross Living Area 2,035 Total Rooms 7 Total Bedrooms 3 Total Bathrooms 2.5 ••r* �•,, Location Residential ' a� View Residential Site .20 Acre(s) Quality Average A 8 i Form PICPIX.CR — "TOTAL for Windows" appraisal software by a is mode, inc. —1- 800- AL4MODE File No 9717302 Page #12 Comparable Photo Page Borrowe /Client Abraham &Lizeth Montemayor — — — Property Address 5307 Knox Ave N City Broo n Cen County Hennep State MN Zip Code 55430 -3057 Lender Pentagon Federal Credit Union Active 811 Bellvue Lane N 4 z Prox. to Subject 7110 Mile u a Sale Price 250,000 r w Gross Living Area 2,340 Total Rooms 8 Total Bedrooms 4 t Total Bathrooms 2.5 3 Location Residential View Residential Site .29 Acre(s) Quality Average Age 11 ,x Pending5 5109 Humboldt Avenue N Prox, to Subject 3/10 Mile , ti Sale Price 224,900 l n f CJ ( _ l Gross Living Area 2,388 (J Total Rooms 8 ( 0 f M '<<''�.- `" Total Bedrooms 4 1 Total Bathrooms 2.5 7', -r °""" Location Residential k ^` View Residential Site 12 Acre(s) f err �i� Quality Average Age 7 6 Prox. to Subject Sale Price Gross Living Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality Age Form PICPIX.CR —"TOTAL for Windows" appraisal scitware by a la made, inc. — 1- 800- ALAMODE File No. 9717302 Paoe #13 Market Conditions Addendum to the Appraisal Report File No. 9717302 The purpose of this addendum is to provide the lender /client with a clear and accurate understanding of the market trends and conditions prevalent in the subject neigh borhood, This Is a required addendum for all appraisal reports with an effective date an or after April 1, 2009. P roperty Ad _ 53 Knox Ave N City B rook' n Certter State MN ZIP Code 55430 -3057 Borrower Abraham &Lizeth Montema or Instructions: The appraiser must use the Information required on this form as the basis far his /her conclusions, and must provide support for those conclusions, regarding housing trends and overall market conditions as reported in the Neighborhood section of the appraisal report form. The appraiser must fill in all the information to the extent it is available and reliable and must provide analysis as indicated below. If any required data is unavailable or is considered unreliable, the appraiser must provide an explanation. It is recognized that not all data sources will be able to provide data for the shaded areas below; if it is available, however, the appraiser must include the data in the analysis. If data sources provide the required information as an average instead of the median, the appraiser should report the available figure and identify it as an average. Sales and listings must be properties that compete with the subject property, determined by applying the criteria that would be used by a prospective buyer of the subject property. The appraiser must explain any anomalies in the data, such as seasonal markets, new construction, foreclosures, etc. Inventory Analysis Prior 7 -12 Months Prior 4-6 Months Current - 3 Months Overall Trend Total # of Comparable Sales Settled 2 2 3 Increasing X1 Stable _J Declining Absorption Rate (Total Sales /Months 0.33 0.67 1.00 ❑ Increasing i❑❑ Stable ❑ Declining Total # of Comparable Active Listings 1 2 2 ❑ Declining ❑ Stable ❑ Increasing Months of Housing Supply Jotal Listings /Ab. Rate) 3.0 3.0 2.0 ❑ Declining ® Stable ❑ Increasing Median Sale & List Price, DOM, Sale /List % Prior 7 -12 Months Prior 4-6 Months Current - 3 Months Overall Trend Median Comparable Sale Price 232,500 201,900 200,000 ❑increasing Stable ❑ Declining Median Comparable Sales Days on Market 71 86 65 E] Declining V j Stable ❑ Increasing Median Comparable List Price 219 207 208,000 ❑ Increasin Stable ❑ Declinin Median Comparable Listings Days on Market 86 76 65 Declining ® Stable Increasing Median Sale Price as % of List Price 97% 98% 98% ❑ Increasing Z Stable ❑ Declining Seller- (developer, builder, eic.)paid financial assistance prevalent? ❑Yes ❑ No E] Declining N Stable ❑ Increasing Explain in detail the seller concessions trends for the past 12 months (e.g., seller contributions increased from 3% to 5 %, increasing use of buydowns, closing costs, condo fees, options, etc.). If seller concessions are used in the Subjects market but at this time appear to have a nomin impact and usually under 4.5 %. Are foreclosure sales RED sales a factor in the market? ❑ Yes ❑ No If yes, explain including the trends in listings and sales of foreclosed properties). Cite data sources for above information. MLS / Tax Records / Appraisercoop.com. Summarize the above information as support for your conclusions in the Neighborhood section of the appraisal report form. If you used any additional information, such as an analysis of pending sales and /or expired and withdrawn listings, to formulate your conclusions, provide both an explanation and support for your conclusions. 7 -12 months sales data most likely is accounted for seasonal sales in the Subjects market other data supports stable number of sales. If the subject is a unit in a condominium or cooperative project , complete the following: Project Name: Subject Project Data Prior 7 -12 Months Prior 4-6 Months Current - 3 Months Overall Trend Total # of Comparable Sales Settled ❑ Increasing -J Stable ❑ Declining Absorption Rate (Total Sales/Months) ❑ Increasing 9[t�ffiate) Total # of Active Comparable Listings Declining Months of Unit Supply (Total Listings /Ab.RDeclining Are foreclosure sales (REO sales) a factor i n the project? ❑ Yes ❑ No It yes, indicate the number of RED listings and explain the trends in listings and sales of foreclosed properties. . Summarize the above trends and address the impact on the subject unit and project. Signature Signature Aopr a me Sc Supervisory Appraiser Name Company Name Derrick B Schultz Company Name Company Address 10143 Abbott AveS,Bloomin ton,MN,55431 Company Address t State License/Centication # 20217224 State MN State License /Certification # State Email Address Email Address Freddie Mac Form 71 March 2009 Page 1 of 1 Fannie Mae Form 1004MC March 2009 Form 1004MC2 — "TOTAL for Windows" appraisal software by a la mode, inc. — 1- 800 - ALAMODE ' Derrick Schultz File No 97173Q2 Paae #141 Borrower Abraham &Lizeth Montemayor File No. 9717302 ' Property Address 5307 Knox Ave N city Brooklyn Center County Hennepin State MN Do Code 55430 -3057 Lender Client Pentagon Federal Credit Union APPRAISAL AND REPORT IDENTIFICATION This Appraisal Report is = of the following types: El Self Contained (A written report prepared under Standards Rule 2 -2(a) , persuant to the Scope of Work, as disclosed elsewhere in this report.) Summary (A written report prepared under Standards Rule 2 -2(b) , persuant to the Scope of Work, as disclosed elsewhere in this report.) ;' ❑ Restricted Use (A written report prepared under Standards Rule 2 -2(c) , persuant to the Scope of Work, as disclosed elsewhere in this report, restricted to the stated intended use by the specified client or intended user.) Comments on Standards Rule 2 -3 1 certify Coat, to the best of my knowledge and belief: • The statements of tact contained in this report are true and Correct. • The reported analyses, opinions, and conclusions are limited only by, the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses; opinions, and conclusions. • 1 have no (or the specified) present or prospective interest in the property that is the subject of this report and no (or the specified) personal interest with respect to the parties involved. ' I have no bias with respect to the property that is the subject of this repot or the parties invoked with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetemtrsd results. My 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 amourd of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent evert directly related to the intended use of this appraisal. My analyses, opinions and conclusions were developed and this report has been prepared, In conformity with the Uniform Standards of Professional Appraisal Practice. ' l have (or have not) made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal assistance to the person signing this certification. of there are exceptions, the name of each individual providing significant real property appraisal assistance is stated elsewhere in this report.) Comments on Appraisal and Report Identification Note any USPAP related issues requiring disclosure and any State mandated requirements. ' APPRAISER: VI RY APPRAISER (only if required): SUPER. SO 1 y oq : ) ' Si lu / Signa ture: d Name: De_f ,BSc /I _ 4� Dal Signed: 12106/2010 Date Signed: ' State Certification #: State Certification #: or State License #: 20217224 or State License #: State: MN State: Uotratiorn Date of Certification or License: 08/3112011 50ration Date of Certification or license: Supervisory Appraiser inspection of Subject Property: Effective Date of Appraisal: 12/03/2010 ❑ Did Not ❑ Exterior-only from street ❑ interior and Wery ' Form 1006 — 'TOTAL for Windows' appraisal software by a la mode, inc. —1- 800- ALAMODE File No. 9717302 Location Map BorrowerlChw Abraham&Uzeth Montema or 1 Propeny Address 5307 Knox Ave N City Brooklyn Center CourdV Hennepin State MN Zp Code 554303057 Lender Pentagon Federal Credit Union 1 1 i a mm :. 40. td }_.; 3 f W Y 0'a y h,,... ,' , .t Y y z 1 51ET A N N ... z z z z z' �14ateeaJ • '_ 8 57 Y$ A N,.... $ ? .... / -z tgtN F AVE '« 4 4 J ti - � I E!)TR 4VE.N : g I 4J � .rytW ',• >' D 974 AVEN .+741 w L P TNA N f * z v $TN AVEN a 597,4 AVEtt i ' � RTN'?'°' �tsn :'� 4' _ ,.. WTNA N1 i H E,N JUCLnf A' k ,' A i -9 zr 'N A ti P� z QQ .; EST! AV °Tfl E' �, F4ANCE ATTN A E 11 ( R uC3 'T Y r z LOYERG,. zz 6�T4 AVE N AV ; $LgpU> N lN�. .3u+: ,yA qnt I - '0TN AVE 14 .<z j w z < ;} C6TN � pT�" 2 IRENTIl < ECvAE p 13 .. 4 flP$xom I n L.10 w t PLC ` 5SNAV z Tc N OR6GL.N A ? I C z 4 { x z 53R AVq 4} •} 53RL AY r C AVE N z A1G E N=aNC AVEN t io 52NA E PI i < AYE4 1b.Rlea <}�1 — aERt+ARi? AVE V , ' .:.._ _ t St AVE N . � P!lll6Efgg � Cafl�F iN G z ,�� .SPSrAY�N w I I COAVALLI$'',,AVfr N t d i Y: }< 50TH AYL;,H z zf T4 YEN , Air N } j s - R4YE k A51E N O 9TH AVE H g' 46TH AVE ,agTNA}EN,IL_ RCE t''Iq iCtY1A�£�°; :, ill f z A't. V r 46 k4utjtr /y Uf 4'TN AVEN, �Yl ' � eTMA�E / 1 45TH' .. a,y f SFNit.7 , BN` I f m I 45TtiA 1metFxA f i K r�, 4TH AVEN �- Y 1 '' t... kdw ��1 g A wm•� 4 4 �i > # V�1, -.. HtcMwmCPYi i.y O A�tf A. ' , .. • z. Ll 1 Q lE 'b I aaM4rpxl3 t4 1 3 > .f � t4A � � NI i • +, Al fJN <o�4AVE $ N +fig ._ , 4aEq CYRU[ L 9 Et A N I W 1 40 V2 A�VEt� t } T TNwyEN .+WD 48 T" i } ,tg7'! ST i 1 1 Form MAP -LOG — 'TOTAL for windows' appraisal software by a ia node, inc. — 1- 80aALAMODE ale No _ 97173Q21 Paae #16 Appraiser Lic. Exp. 8/31 /2011 ' Borrow or Clierd AbrahamBLizeth Montema r Pro Address 5307 Knox Ave N C ity Brooklyn Center County Hennepin State MN ho C ade 55430 -3057 Lender Pentagon Federal Credit Union ' STATE OF MINNESOTA DERRICK BRANDT SCHULT2 10143 ABBOTT AVE 3 ' BLOOMINGTON. MN 5U31 Department of Commerce The Underslpnsd COMMISSIONER OF COMMERCE for the SWs of Mnnesota hereby oerwas that _ DERRICK BRANDY SMULTZ 10143 ABBOTT AVE 3 BLOOMINGTON, MN 55431 has eompUed with the Wvs of the State of Minnesota and Is hereby licensed to transact the business of Reeldent Appraker : Uosneed ReekbotllN Licone Natlber: 20217224 ' unless this authority is suspended, revoked, or o#wwise lepoly tem0nated. This license shah be in effect until August 31, 2011. IN TESTIMONY WHEREOF 1 have herouhie set my hand this August 11. 2W9. ' CQI1f1M1881t)NER OF COMMERCE Flinnesm Depsrinwea of con "Mm CanGrou kV.Bduiam on: ' LioaOng Division CE Realirement Type CE Ramiked Hours 06 7#h Plscs EsK Suit 500 Tatal - Apprallow 30 St. Paul, MN 551013166 USPAP 7 TNsphors: (051) 20MIG EmsY: uo•nuftoon mateettAwus ' WWst' oonrrraoostat.rrfn.us Notes: • CDMInW aduaadon: lS hews t tsquiN N ens inl rsrrsrrst psrMd, vdUdr kreleYdss �rs+. • 7 hour US~ mums. 30 horns k TWvrsd� ssdr suYssquws rshssrd psAod, whidr hdndss aJ hour USMP�O. - baw RssldwAY You now held • d Csra%d Rssldw*K w OwWed Qs m+Y quMMo t in Drew PsPPrslssY Ow lsd-.* ".416.1 lyshnss M M duellryl For R.N .r Whlhlb. pW. vi!'ow vnbsils Donumrros.slN.rm.us. Form MARLOC - 'TOTAL for WmdowV appraisal software by a la mode, inc. —1- 800- ALAMODE Ifile No. 9717U n , Building Sketch (Page - 1) Borrower /Clierl Abraham &Lizeth Montema or Propegy Address 5307 Knox Ave N City Brooklyn Center County Hennepin State MN 4 Code 55430 -3057 Lender Pentagon Federal Credft Union Dr Kit HB FR LR. , Be... Be Br Br AREA CALCULATIONS SUMMARY LIVING AREA BREAKDOWN Code 0e9aripd- Nat . Stas - Nst TOWS Break Subtohls GLAS First Floor 940.0 First Floor second floor 1380.0 2320.0 - 20.0 x 35.0 700.0 14.0 x 16..0 - 240 . .0 second .floor 35.0 x ':36.0 .1260:0 6;0 x 20.0 120.0 Net LIVABLE Area (Rounded) 2320 4 Items (Rounded) 1 2320 I= %T.Bk W - 'TOTAL for Windows' appraisal software by a la mode, inc. —1- 800- ALAMODE ' r ' Tony Yang - Kashia Adult Daycare 1 5650 Lilac Dr. An Appraiser, Carrie Jacobson, representing Mr. Yang, contacted the Assessor's office ' on February 24, 2011, with a concern regarding the 2011 valuation of the Kashia Adult Daycare located at 5650 Lilac Dr., Brooklyn Center. Ms. Jacobson had completed an appraisal of the property as of February 5, 2011. Mr. Yang has indicated on his appeal ' application that he is requesting a 2011 estimated market value of $390,000. Ms. Jacobson provided an appraisal dated, February 5, 2011 indicating a market value ' of $396,000. A review of the property was completed by the City Assessor on March 1, 2011, indicating no changes to the subject property. The Assessor reviewed comparable sales and found a sale price range of $94.75 to $135.51 per sq. ft. The ' subject property estimated market value is $122.93 per sq. ft. falling within the sales comparable range. A market derived income approach indicates an estimated market value of $478,700. r It is the Assessor's recommendation to sustain the 2011 estimated market value of $478,700 for taxes payable in 2012. 1 . Owner(s) statement of estimated market value or classification and presentation of factual information regarding the property. 1 Questions addressed to the owner regarding the market value or r classification. ' • Assessor's statement of value or classification and presentation of factual information regarding the property. Questions addressed to the Assessor. ' • Action by the Local Board of Appeal and Equalization ' Local Board of Appeal will select one of the following: Make no change and sustain the 2011 estimated market value or ' classification. ' Reduce the 2011 estimated market value. ' Increase the 2011 estimated market value. If the owner is not satisfied with the outcome of the Local Board of Appeal and Equalization they may appeal to the County Board of Appeal and Equalization. 1 T City of Brooklyn Center A Millennium Community ' TO: 2011 Brooklyn Center Local Board of Appeal and Equalization RE: Tony Yang Kashia Adult Daycare 5650 Lilac Dr. N. Brooklyn Center, MN 55430 Carrie Jacobson an A PP representing g g raiser, resentin Mr. Yang, - contacted the Assessor's office on February 24, 2011, with a concern regarding the 2011 valuation of the Kashia Adult Daycare located at 5650 Lilac Dr., Brooklyn Center. Ms. Jacobson had completed an appraisal of the property as of February 5, 2011. Mr. Yang has indicated on his appeal application that he is requesting a 2011 estimated market value of $390,000. A review of the property was completed b the City Assessor on March 1, 2011. The last review P Y Y of the property was completed December 11, 2006. The property is a 3,894 square foot building built in 1965, and renovated in 2006. The property has an effective age of 1985. The property is considered in average condition, has wood frame construction with a brick exterior and gable roof. The property has gas forced air heat and central air conditioning. The property includes a vestibule entry, an open area, director's office, exercise room, recreation room, coat/storage pass through, nurses' office, quiet room, mechanical room, kitchen/prep, and male /female restrooms. Photographs were updated and the dimensions verified. There were no ' physical changes to the property since the last review. Ms. Jacobson provided a copy of the February 5, 2011 appraisal indicating a market value of t $396,000. The conclusion of value was based on office comparable properties that sold from 2007 through 2010. The comparables provided included a 2007 office sale, a 2010 exempt church sale, a 2008 office condominium sale, and an office sale from November, 2010. The ' most recent sale provided was from November, 2010 and indicated a price per sq. ft. of $112.96. In discussion with Ms. Jacobson, she indicated that location was her primary factor for including older sales. The property was purchased in October of 2003 for $475,000. The property was an office building at the time of purchase, and based on building permits, there have been approximately $26,000 in improvements to convert the office to a daycare facility. In reviewing sales of comparable properties, there were no daycare sales in Brooklyn Center so comparables were reviewed outside the city jurisdiction. Three daycare facility sales were available in Hennepin ' County, within the last two years. One sale was within the sales ratio period, and the other two were a few months prior. The daycare sales comparables indicate an unadjusted sale price range of $94.75 to $135.51 per sq. ft. Comparable one was purchased by a related party, but was ' purchased based on the generation of rental income. Comparable two was vacant at the time of sale, and an appraisal had been completed prior to the sale. 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 ww w. cityofbrooklyncenter. org Comparable three was sold for close to the list price and will be owner occupied. The subject property has an estimated market value of $478,700 or $122.93 per sq. ft of gba, which falls within the sales comparable range. The subject property is owner occupied so lease income data is not available. A market based income approach was included with the report indicating a market value of $478,700. Due to the age of the property, the cost approach was considered but not used. It is my recommendation to sustain the 2011 estimated market value of $478,700 for taxes payable in 2012. ' Respectfully submitted, Nancy W jcik, JA CL City Assessor ' City of BROOKLYN ' CENTER 2011 Local Board of Appeal and Equalization #2 Tony Yang 5650 Lilac Dr N ' 02- 118 -21 -42 -0032 'y Y ,l '4M1 b i . v` ashia ,Adult Da i Services ' 2011 Assessed Value: $478,700 Recommendation: Sustain Value of $478,700 This report is not an appraisal as defined in M.S. §82B.02 (subd.3) nor does it comply with the Uniform Standards of ' Professional Appraisal Practice. It is intended to be used as a reference only and any use other than its intended use is prohibited and unlawful. The author does not represent this to bean appraisal and is not responsible for any inappropriate use. It is a report of public records using a mass appraisal technique. ' City of Brooklyn Center Assessing Department ' 2011 Local Board of Appeal and Equalization 3r Staff Report #2 Property Owner(s): Tony Yang Property Address: 5650 Lilac Dr PID #: 02- 118 -21 -42 -0032 Market Value ' Assessment Year 2011 $478,700 Assessment Year 2010 $568,100 Assessment Year 2009 $599,000 Sale: October 1, 2003 - 475,000 (11 - Other) ' Comments: An Appraiser, Carrie Jacobson, contacted the Assessor's office regarding Mr. Yang's property at 5650 Lilac Dr.on February 24, 2011. The appraiser's conclusion of value was $396,000. The ' property was originally purchased as an office but has been remodeled to include a kitchen food preparation area, and separate rooms along the outside walls, including a recreation area, excercise room, nurse's, office, quiet room, director's office, mechanical room and male /female ' restrooms. The interior is open to allow for seating, activities and serving of meals. There is a pass through closet area to hold coats and supplies. The property includes GFA furnace, and centrail air conditioning. There is an additional small storage shed on -site. ' The property was reviewed on March 1, 2011, and physical characteristics were found to be correct. The subject property is considered to be most comparable to a daycare facility. There were no daycare facility sales within the City of Brooklyn Center for the sales study period. Only three daycare facilities were sold within Hennepin County. If we do not have properties within our city, we must find sales data within our county area. The sale price range per sq. ft. for the three sales was $94.75 to $135.51. The subject property has an estimated value per sq. ft. of $122.93. ' The recommendation is to sustain the estimated market value of $478,700. The property owner purchased the property October 1, 2003 for $475,000 and has done some remodeling to convert the property from an office to adult daycare, including approximately $26,000 of improvments ' from 2003 to 2011. Assessor Recommendation: ' Sustain Value of $478,700 Appraiser: Last Inspection Date: Nancy Wojcik March 1. 1 2011 Board of Appeal and Equalization 2 - ' Subject Data Summary PID #: 02- 118 -21 -42 -0032 ' Buildings on File: 1 Property Name: Kashia Adult Daycare Property Address: 5650 Lilac Dr N Brooklyn Center, MN 55429 ' Multiple Address: No Lot/Block: 000 /000 Addition: Registered Land Survey No. 1114 Hennepin County, Minnesota Legal(120): COM AT MOST WLY COR OF TRACT A TH SELY T t O MOST SLY COR THOF TH NELY TO ANGLE PT IN SLY LINE THOF TH E TO SE COR THOF TH .... More ' Owner(s): Tony Yang Property Classification: Commercial 2011 EMV: 478,700 2010 EMV: 568,100 ' 2009 EMV: 599,000 EMV /GBA: 122.93 Lot Size: 31,365 Sq.Ft. /.78 Acres ' Zoning: C1 Gross Office Area Percent: Building Use: 426 - Day Care Center /100% # Stories: 1 Avg Story Height: 10 Avg Clear Height: 9 Actual Year Built: 1965 Effective Year Built: 1985 ' Renovated Year: 2006 First Floor Area: 3,894 Gross Building Area: 3,894 ' Basement: No Parking: Parking- Surface 1 ' 2111 Board of Appeal and Equalization 3 #2 ' Additional Subject Photos I L ' J` � • �, , � s' t i �' � _may.- Rxtcrior 2011 k � n Side View Exterior 2011 2011 Board of Appeal and Equalization 4 #2 ' Additional Subject Photos t, { Rear Exterior Vida 2011 ' Entry and Open Area 2011 2011 Board of Appeal and Equalization 5 #2 Additional Subject Photos rf ' flilllllil Ilyfl; il�tlllw>ti�_ y F _ 1 — cc. and Open 2007 ii J a I <, � t `Ito. I ' Kitchen Remodel 2006 2011 Board of Appeal and Equalization 6 42 ' Subject Sketch ' 10' ° 16tchen ° 26 g 0 15 v u � Fist Floor 3891 u Z $ O S 13' 7" i 10 59' til.et�h I i I 21111 Board ofAppeal and liqualization 7 #2 Report Name: Permit List City of Brooklyn Center Printed: 3/28/2011 Permit List Page: 1 Permit List for: 5650 LILAC DR N Permit # Unit Value Permit Tvoe Sub Tyne Work Tvoe Description Cancelled Issued Date Final Date Dead Date Expiration Date Refund Date BCO32060 $0 Electrical Commercial Remodel /Alteration INSTALL CIRCUIT 11/13/2006 11/21/2006 FOR ANSIL SYSTEM &L BCO31801 $13,500 Mechanical Ductwork Remodel /Alteration GREASE HOOD /ADJ 10/11/2006 11/16/2006 HVAC SYSTEM BCO31748 $600 Plumbing Commercial Remodel /Alteration RELOCATING SINKS 09/29/2006 03/25/2008 BCO31595 $1,725 Fire Sprinkler System (Wet) Remodel /Alteration ANSUL R -102 FIRE 09/13/2006 11/16/2006 SUPP SYSTEM BCO31443 $1,000 Building Commercial Remodel /Alteration KITCHEN 08/25/2006 11/14/2008 11/14/2008 BCO24193 $55 Sign Wall Remodel /Alteration KASHIA ADULT DAY 04/09/2004 07/12/2006 SERVICES SIGN BCO24034 $150 Electrical Residential I & 2 Famil: Replace INSTALL OUTLETS 03/16/2004 02/20/2004 IN KITCHEN BCO23821 $4,600 Plumbing Commercial Remodel /Alteration TENANT FINISH 02/05/2004 02/24/2004 BCO23565 $1,000 Building Commercial Remodel /Alteration TENANT FINISH 12/19/2003 03/01/2004 BCO23515 $3,450 Building Fire Monitoring System Tenant Finish FIRE ALARM 12/11/2003 03/01/2004 MONITORING SYSTEM BC014935 $18 Sign Freestanding Addition STEEN ENGINEERING 03/01/2000 04/27/2000 BC014884 $3,000 Building Commercial Addition STEEN ENG - SHED 02/17/2000 06/02/2004 BC014708 $24,000 Building Commercial Remodel /Alteration STEEN ENGINEERING 01/20/2000 01/30/2001 BC014724 $300 Plumbing Commercial Remodel /Alteration STEEN ENGINEERING 01/13/2000 01/30/2001 BC014640 $4,500 Mechanical Undefined Remodel /Alteration ductwork 12/23/1999 01/30/2001 Permit Count: 15 Sales Comparables Comparable Comparable Comparable ' Daycare Sales Information within Hennepin County ' GBA from 3,000 to 7,000 sq. ft. Subject Comparable #1 ." Comparable #2 Comparable #3 ,. Day Care Center's Kashia Adult Day Kinder Care Learning Children's World ame: Care Center Learning Center T New - Horizon Daycare ddress: 5650 Lilac Drive 9745 Revere Lane N 12455 62nd PI N 15200 Wayzata Blvd City: Brooklyn Center Maple Grove Maple Grove Minnetonka ID #: 02- 118 -21 -42 -0032 12- 119 -22 -24 -0065 35- 119 -22 -33 -0048 04- 117 -22 -24 -0022 Year of Construction: 1965 1980 1979 1975 . - - - -- ffective Year: 1985 1980 _ 1985- 1980 onstructio Qua lity ! Co ndition Av g. / Avg. _ Avg. Av I Avg. / Avg. Av Av -- g• g. 9- 9- 9- 9- 9 - _�_- - -- xterior: � --j- -- Bric Brick Vinyl & Br ick Stucc & Broc irst Floor Area_ 3,894 4,475 6,016 Not listed Gross Building Aran- 4,475 6,016 6,734 asement: - 0 0 0 Garden Style i Stories: - 1 1 1 2 tear Ht: 91 91 10 I 8 I seable Land Area: 31,365 27,359 i 36,000 21,592 /B Ratio: 8.05 6.11 5.98 3.21 ale Date (Date of Deed): 9/14/2009 7/_3 12/1/2009 Original Purchase ale Price: $475,000 $600,000 $580,000 $700,000 -- -- ase Equ ivalent Pric - $606 $570,000 $700,000 Personal Property: - -- -- —— - - - -- $0 I $10 $0_ _ pecial Assessments: `- - - $6,405 $0 _ $0 _ Property was Property was vacant at Property openly listed purcchased based on time of sale. Appraisal with Coldwell Banker he income generated 7/2009 prior to sale for sale price close to from lease in place, $600,000. Personal Tasking price. Property purchased by related property was alloted for will be owner occupied. party but good income playground equipment. comparable. Seller paid; special assessments dditional Comments: ash Equiva o f Real Estate_ $606,405 $570,000 $700,000 ale Price Per S . Ft. GBA EMV $1'22.93 $135.51 $94.75 $103.95 PROPEPTY USE: Day Care Center MUNICIPALITY: MAPLE GROVE Code: 426 D RC: 02 COMPLEX NAME: Kinder Care Learning Center COUNTY: HENNEPIN GBA 4475 WD ' ADDRESS: 9745 Revere Lane North PIN #: 12- 119 -22 -24 -0065 Seq #: 2 Ratio N Comp: Y AUDITOR ID: 2535 MULTI PID: N COMMUNITY: NBRHOOD: ' PROPERTY DESCRIPTION MARKET DATA Year Built/Effective Year Built: 1980 1980 Buyer: Benzinger, Jay & Alicia Const Quality/ Condition: AVERAGE AVERAGE Seller: Revere Investments LLC Const Class / No. of Bldgs: WD or Steel Stud Frm 1 Sale Data: Date of Sale: 9/14/09 Exterior Type/ Roof Type: Brick Flat Total Purchase Price: $600,000 2nd Exterior Type/ R C vr: Built -Up Membrane SIZE & USES Down Payment Amount: $0 ' First Floor Area/ GBA: 4,475 SF 4,475 SF Other Terms: Total Floor Area / NRA: 4,475 SF TERMS Bldg Perim./ Shape/ Units: 285 FT Rectangle 1 No Data Available Mezzanine Area/ Use: SF Cash Equivalent Price: 5.06% $600,000 Bsmt Area / %Fin/ %: SF 0% 0% GBA Cash Equivalent Adj: Bsmt Use: LESS: Personal Property: $0 ' Bsmt Fin/ %: SF 0% GBA PLUS: Special Assessments: Ind:Y $6,405 First Floor Use: Daycare Cash Equivalent of Real Estate: $606,405 First Floor SF/ °70: 4,475 SF 100% GBA 2nd+ Floor Use: Sale Analysis: Sale Price Per Sq. Ft. TFA: $135.51 1 2nd+ Floor SF/ W SF 0% GBA Sale Price Per Sq. R. GBA: $135.51 Tot Off Area: SF 0% GBA Sale Price Per Sq. Ft. NRA: Primary Heating / Pct: Package Unit 100% Sale Price Per Sq. Ft. Land Area: $22.16 ' Secondary Heating/ Pct; Sale Price Per Room: $606,405 Air Conditioning Pct: 100% Spriniders Elevators: Income Data! / ' Garage/ Ramp Spaces: PRIVATE DATA Surface Parking Space: 12 Parking Surface Type: Asphalt Rent Schedule ' Multiple Tenancy: N PRIVATE DATA Bldg Ht/ Avg Clear Ht: 11.0 FT 9.0 FT # Stories: 1.0 Avg. Finished Ceiling Ht: 9.0 FT ' Total land Area/ Topography: 27,359 SF Level Useable Land Area: 27,359 SF Zoning/ Land Def Cd: Business F ' Trackage/ Utilities: N All Public Land Big Ratio/ Excess Land: 6.11 to One N Environmental Concern Ind: N Other Amenities: Summary Comments: Property was purchased based on the income generated from a recent lease signing. The property was purchased by a relative. Sale could be used asa comparable, based on value of the lease. See additional comments. PROPERTY ! JSE: Day/ Care Center MUNICIPALITY: MAPLE GROVE Code: 426 D RC: 00 COMPLEX (NAME: Children's World Learning Center COUNTY: HENNEPIN GBA 6016 WD ' ADDRESS: 12455 62nd Place North PIN #: 35-119 -22 -33 -0048 Seq #: A Ratio Y Comp: Y AUDITOR ID: 997748 MULTI PID: N COMMUNITY: NBRHOOD: ' PROPERTY DESCRIPTION MARKET DATA Year Built /Effective Year Built: 1979 1985 Buyer: MSSP Mounds View, LLC Const Quality/ Condition: AVEwcE AVERAGE Seller. KC Propco, LLC Const Class/ No. of Bidgs: WD or Steel StL4 Frm 1 Sale Data: Date of Sale: 7/22/09 Exterior Type/ Roof Type: vinyl Hip 2nd Exterior Type/ Roof C vr. Brick Shingles /Composition Total Purchase Price: $580,000 Down `Pay ment Amount: $25,000 SIZE & USES ' First Floor Area/ GBA: 6,016 SF 6,016 SF Other Terms: Total Floor Area/ NRA: 6,016 SF TERMS Bldg Perim./ Shape/ Units: 316 FT Rectangle 1 No Data Available ' Mezzanine Area / Use: SF Cash Equivalent Price: 5.22% $580,000 Bsmt Area/ %Fin/ %: SF 0% 0% GBA Cash Equivalent Adj: Bsmt Use: LESS: Personal Property: $10,000 ' Bsmt Fin/ 0 k: SF 0% GBA PLUS: Special Assessments: Ind:Y $0 First Floor Use: Daycare Cash Equivalent of Real Estate: $570,000 First Floor SF/ %: 6 SF 100% GBA 2nd+ Floor Use: Sale Analysis: Sale Price Per Sq. Ft. TFA`. $94.7S 2nd+ Floor SF/ %: SF 0% GBA Sale Price Per Sq. Ft. GBA: $94.75 Tot Off Area: SF 0% GBA Sale Price Per Sq. Ft. NRA: Primary Heating/ Pct: Forced Air 100% Sale Price Per Sq. Ft. Land Area: $15.83 Secondary Heating/ Pct: Sale Price Per Room: $570,000 Air Conditioning Pct: 100% Income Data: Sprinklers/ Elevators: ' Garage/ Ramp Spaces: PRIVATE DATA Surface Parking Space: 19 Parking Surface Type: Asphalt Rent Schedule: Multiple Tenancy: N PRIVATE DATA Bldg Ht/ Avg Clear Ht: 12.0 FT 10.0 FT # Stories: 1.0 Avg. Finished Ceiling Ht: 10.0 FT Total Land Area/ Topography: 36,000 SF Level Useable Land Area: 36,000 SF Zoning/ Land Def Cd: Business F ' Trackage/ Utilities: N All Public Land Big Ratio/ Excess Land: 5.98 to One N Environmental Concern Ind: Other Amenities: Summary Comments: Property was vacant at time of sale. Buyer plans to do some some cosmetic interior unpdating and operate a daycare facility. $10,000 of personal property was alioted for playground equipment and misc. toys. PROPERTY USA: Day Care Center MUNICIPALITY: MINNETONKA Code: 426 C RC: 00 COMP;; - ;X NAME: New Horizon Day Care COUNTY: HENNEPIN GBA 6734 WD ' ADDRESS: 15200 Wayzata Boulevard PIN #: 04- 117 -22 -24 -0022 Seq #: 1 Ratio Y Comp: Y AUDITOR ID: 8098 MULTI PID: N COMMUNITY: NBRHOOD: , ' .OPERTY DESCRIPTION MARKET DATA Year Built/Effective Year Built: 1975 1980 Buyer: MSSP Minnetonka, LLC Const Quality/ Condition: AVERAGE AVERAGE Seller: Carlson Center Land <LP II Const Class/ No. of Bldgs: WD or steel Stud Frm 1 ' 'Exterior Type/ Roof Type: Stucco Gable Sale Data: Date of Sale: 12/1/09 . 2nd Exterior Type/ Roof C vr: Brick Shingles /Compositi Total Purchase Price: $700,000 SIZE & USES Down Payment Amount: $0 ' First Floor Area/ GBA: SF 6,734 SF Other Terms: Total Floor Area/ NRA: SF TERMS Bldg Perim. / Shape/ Units: FT Multiple Angles No Data Available Mezzanine Area/ Use: SF Cash Equivalent Price: 4.92% $700,000 Bsmt Area/ %Fin/ %: SF 0% 0% GBA Cash Equivalent Adj: Bsmt Use: LESS: Personal Property: - $0 ' Bsmt Fin/ %: SF 0% GBA PLUS: Special Assessments: Ind:N $0 First Floor Use: Daycare Cash Equivalent of Real Estate: $700,000 First Floor SF/ %: SF 0% GBA 2nd+ Floor Use: Daycare Sale Analysis: Sale Price Per Sq. Ft. TFA: ' 2nd+ Floor SF/ %: SF 0% GBA Sale Price Per Sq. Ft. GBA: $103.95 Tot Off Area: SF 0% GBA Sale Price Per Sq. R. NRA: Primary Heating / Pct: Forced Air 100 °k Sale Price Per Sq. Ft. Land Area: $32.42 ' Secondary Heating/ Pct: Sale Price Per Room: Air Conditioning Pct: 100% Income Data: Sprinklers/ Elevators: 100 ' Garage/ Ramp spaces: PRIVATE DATA - rface Parking Space: 30 rking Surface Type: Asphalt Rent Schedule: Multiple Tenancy: N PRIVATE DATA Bldg Ht/ Avg Clear Ht: 10.0 FT 8.0 FT # Stories: 2.0 Avg. Finished Ceiling Ht: 10.0 FT Total Land Area/ Topography: 21,592 SF Slopes down to road Useable Land Area: SF Zoning/ Land Def Cd: PID F Trackage/ Utilities: N All Public Land Big Ratio/ Excess Land: 3.21 to One N Environmental Concern Ind: N ' Other Amenities: Summary Comments: Spoke with owner and property was listed with Coldweli Banker but owner couldn't remember list price, said sale price was dose to list price. Property is owner occupied and will be a new day care /learning center (Creative Kids Academy). Owner felt price was fair and liked demogrpahics of the area. Good arms length transaction. t MARKET INCOME WORKSHEET 2011 pay 2012 PID 02- 118 =21- 42-0032 PROJECT NAME Ton-Yang, Ad It Daycare ADDRESS 5650 Lilac Dr N ZONING C2 OWNER PROPERTY TYPE - Office Net leases ' C - Commercial YEAR BUILT 1965 INCOME ANALYSIS ' GROSS BUILDING AREA 3,894 OFFICE INCOME $46,728 MISC. INCOME $0 ' DAYCARE AREA 3,894 PGI $46,728 0 LESS: VACANCY $2,804 ' Daycare Market Rent $12.00 Note: no vacancy allowance to misc. income. EGI (before concessions) $43,924 Miscellaneous income $0.00 ' LESS: RENT CONCESSIONS $0 VACANCY ALLOWANCE 6.00% FREE RENT $0 SQUARE FEET VACANT 234 SQUARE FEET OCC. 3,660 EGI $43,924 ' % OF EGI RENT CONCESSIONS 0.00% LESS: EXPENSES (to 67 %) $818 1.86% FREE RENT 0.00% LEASING $1,730 3.94 % ' TURNOVER RATE 35.00% TENANT IMPROVEMENTS $0 0.00% TENANTS REMAINING 65.00% RESERVES $878 2.00% AV. LEASING PERIOD 5 MANAGEMENT $1,318 3.00% TOTAL EXPENSES - $4,743 10.80% EXPENSES /SQ. FT. $3.50 NOI $39,181 MANAGEMENT 3.00% TENANT IMP. COST - NEW $0.00 RENEWAL $0.00 ' EXPENDABLE VAL. OF TI 25.00% PER SQ.FT. GBA $122.93 RES. FOR REPLACEMENT 2.00% ' EXPENSE RATIO - 10.80% LEASE COMMISSIONS -NEW $3.50 SQ FT LAND AREA - 31,365 RENEWAL $1.75 SQ FT EFFECTIVE TAX RATE 3.0800% ' 2010 EMV $ 568,100 145.89 CAP RATE 8.00 %: PERCENTAGE CHANGE - - 15.74% TAX RATE 0.18 % land value $ 255,000 8.13 ' OVERALL RATE 8.18% building value $ 223,700 57.45 LAND TO BUILDING RATIO 8.05 : 1 3/28/2011 City of Brooklyn Center ' 2011 Assessment ...Day Care Centers 2011 Unit 2010 Unit 2009 Unit # .AREAS 2011 EMV Values 2010 EMV Values 2009 EMV Values 1 Kinder Care - LAND 39,789 Land $330,000 $8.29 Land $330,000. $8.29 Land $330,000 $8.29 6020 Earle Brown Dr.. GBA 6,056 - Building $368,000 $59.11 Building $358,000 $59.11 Building $483,000 $79.76 PID 02- 118 -21 -11 -0010 L/Bidg. Ratio 6.57 Total $688,000 $113.61 Total $688,000.. $113.61 Total $813,000 $134.25 Year Built 1987. ' Growth 0.00% Growth - 15.38% Growth 18.17% 2 Arena Early Learning Ctr LAND 54,460 Land $450,000 $8.26 land $450,000 $8.26 Land $450,000 $8.26 6415 Brooklyn Blvd GBA 9,345 Building $804,000 $86.04 Building $804,000 $86.04 Building $1,037,000 ' $110.97 34- 119 -21 -31 -0106 NRA 9,345 Total $1,264,000 $134.19 Total $1,254000 $134.19 Total $1,487,000 $15912 Sold 8/3112007 $850,000 L:B Ratio 5.83 Improv $0 Improv so Improv $650,000 Interior gutted after sale Growth 0.00% Growth - 15.67% Growth 0.59% Conversion to Daycare in 08 $0 $0 so Year built 1961 1 Eff: Age 2008 ' 3 Kashia Adult Daycare Center LAND 31,365 Land $266,000 $8.13 Land $255,000 $8.13 Land $255,000 $8.13 5650 Lilac Dr. GBA 3,894 Building $223,700 $67.45 Budding $313,100 $8041 Building $344;000 $88.34 02- 118 -21 -42 -0032 NRA 3,894 Total $478,700 $122.93 Total $568,100 $145.89 Total $599,000 $153.83 ' Sold 10/1/2003 $475,000 L;B Ratio 5.83 Improv s0 Improv $0 Improv $0 Year Built 19651 Eff. Age 1985 Growth - 15.74% Growth -5.16% Growth 0.00% $0 $0 s0 ' 3 Kids World Preschool LAND 600 Land $13,200 $26.40 Land $13,200 $26.40 Land $13,200 $2840 7200 Brooklyn Blvd GBA 500 Building $33,900 $68 Building $33,800 $68 Budding $41,800 $84 PID 28- 119 -21-41 -0212 Total $47,000 $94 Total - $47,000 - $94 .Total $55,000 $110 Located in Brooklyn United Methodist Church ' Vetiffeation of size and Income '06' Growth 0.00% Growth - 14.55% Growth 0.00% Vote TOTAL$ LAND 39,789 Land $1,048,200 $26.34 Land $1,048,200 $26.34 Land $1,048,200 $8.63 GBA 6,066 Building $1,419,500 $21011.40 Bulk" $1,508,900 $249.16 Butldtng $1,906,800 $86166 L/Bldg. Ratio 6.67 Total $2,467,700 $407.48 Total $2,567,100 $389,198 Total $2,964,000 $143.33 linprovement $0 Improvement s0 kt6xovemerd $650.000 ' %Change -3.60% %Change 13.44% , %Change 46.28% G:% SPREDSHT% Assessort2011ClAgDayC are.xisx]Daycare2011 (2) 3/28/2011 CITY OF BROOKLYN CENTER ' LOCAL BOARD OF APPEAL AND EQUALIZATION 2011 Assessment APPLICATION FOR APPEAL February 21, 2011 through March 18, 2011 You must return this application by March 18, 2011 be placed on the Agenda for the Local Board of Appeal and Equalization held April 4, 2011- at 7:00 P.M. ' qtly Y , 1c 4 Names) f Daytime Contact Number: /Tss" Property Address 57o -SZ ' Iden tific ation Property Numbe r ' Assessor's 2011 Estimated Market Value q-7 7� Is your property residential, commercial or multi- family? If you are appealing a commercial, multi- family or residential rental property you must include income and ' expense data for calendar year 2010 with your application. What is the reason you are appealing your 2011 assessment? /jl When did you purchase you home? Date of Purchase yv 03 Purchase 'Price Did you purchase your property from a bank, as a foreclosure or short sale? Has your property physically changed sine ft purchase? (maintenance, upgrades., remodeling or structural damage) Please list a brief description below with an estimated cost. At P A 9Ms &-t- Have you had a recent appraisal for refinancing, a purchase agreement or a market analysis by a real estate agent completed within the last year? or No If so, what was the determination of value? 3 q 4 0016 What do you think the market value of your property should be ? dfi4 Please provide any documentation suppoiting your claim of overvaluation or erroneous classification with this application. ' SUMMARY REPORT REAL ESTATE APPRAISAL Of Kashia Adult Day Services , Y 5650 Lilac Drive Brooklyn Center, MN As of February 5, 2010 Prepared For Mr. Tony Yang i 5650 Lilac Drive ' Brooklyn Center, MN 55430 Client File: Tax Appeal Prepared by ' MIDWEST VALUATION CO, LLC Mari Jacobson Certified General Real Property Appraiser 1 _, MIDWEST VALUATION CO, LLC PO Box 1558 www.midwestvationco.com 612.306.2713 ' Maple Grove, MN 55369 midwestvaluationco@gmail.com February 5, 2011 Mr. Tony Yang Kashia Adult Day Service ' 5650 Lilac Drive Brooklyn Center, MN 55430 , Re: Summary Report, Real Estate Appraisal ' Kashia Adult Day Services 5640 Lilac Drive File Name: Tax Appeal ' Dear Mr. Yang: At your request, we have re ared an appraisal for the above referenced ro ert . Please ' P P PP P P Y reference this report for important information regarding the scope of research and analysis for this appraisal, including property identification, inspection, highest and best ' use analysis, and valuation methodology. We certify that we have no present or contemplated future interest in the property beyond ' this estimate of value. Your attention is directed to the Limiting Conditions and Assumptions in the Addenda section of this report. Acceptance of this report constitutes an agreement with these conditions and assumptions. In particular, we note the following: Hypothetical Conditions: • There are no h otheical co al ' yp conditions for this appraisal. Extraordinary Assumptions: • There are no Extraordinary for this appraisal. �'Y 2 ' -Mr. Tony Yang ' Kashia Adult Day Services February 14, 2011 l Page 2 I , Based on the appraisal described in the accompanying report, subject to the Limiting Conditions and Assumptions, Extraordinary Assumptions and Hypothetical Conditions 1 (if any), we have made the following value conclusion(s): Current As Is Market Valuer The "As Is" market value of the Fee Simple estate of the property, as of February 5, 2011, is: $396,000 Three Hundred Ninety Six Thousand Dollars The market exposure time' preceding February 5, 2011 would have been 6 -12 months and the estimated marketing period' as of February 5, 2011 is 6 -12 months. l Respectfully submitted, ' v Midwest Valuation Co, LLC Kari Jacobson Certified General Real Property Appraiser ' Exposure Time: see definition ' Marketing Time: see definition 3 Summary of Important Facts and Conclusions , GENERAL Subject: Kashia Adult Care Services 5650 Lilac Drive Brooklyn Center, Hennepin County, MN Adult care services Owner: Tony Yang Legal Description: COM AT MOST WLY COR OF TRACT A TH SELY TO MOST SLY COR THOF TH NELY TO ANGLE PT IN SLY LINE THOF TH E TO SE COR THOF TH, N TO SE COR OF R ,L S Note: This is a Partial Metes & Bounds Description. Tax Identification: 02- 118 -21 -42 -0032 Date of Report; February 5, 2011 Intended Use: The intended use is for tax appeal. ' Intended User(s): Tony Yang, City of Brooklyn Center Assessor. Assessed Value: Land: $255,000 Building: $344,000 Total: $599,000 ' Taxes: Taxes: $21,994.37 Assessments: $734.57 Total: $22,728.94 Sale History; The subject was not sold in the last three years, according to public records. The subject sold for $475,000 in October, 2003 to present owner. Current The subject is not currently listed for sale, or under Listing/Contract(s): contract. Midwest Valuation Co, LLC wv,'k, 11, Ick, 'l ' PROPERTY Land Area: Total: .72 Acres t Usable: .72 Acres Improvements: t Building Building ID: Kashia Adult Care Services Year Built: 1965 Renovations: Approximately 2000, kitchen after 2003 purchase Condition: o Average v a g e Number of Stories; 1 Gross Building Area (GBA): 3,924 SF ' Rentable Area (RA): 3,924 SF Gross Leasable Area (GLA): 3,924 SF Number of Units: 1 Property Totals: GBA RA GLA Units 3,924 3,924 3,924, 1 Zoning: C -1 1 Highest and Best Use Current Use, Office/Retail of the Site: Highest and Best Use Current Use, Office/Retail as Improved: VALUE INDICATIONS Land Value: Cost Approach: NA ' Sales Comparison $396,000 Approach: Income Approach: NA Reconciled Value(s): $396,000 Value Conclusion(s) ' Effective Date(s) February 5, 2011 Property Rights Fee Simple Midwest Valuation Co, LLC 5 Definitions Market Value: As defined by the Office of the Comptroller of Currency (OCC) under 12 CFR, Part 34, Subpart C- Appraisals, 34.42 Definitions, the Board of Governors of the Federal Reserve System (FRS) and the Federal Deposit Insurance Corporation in compliance with Title XI of FIRREA, as well as by the Uniform Standards of Appraisal Practice as promulgated by the Appraisal Foundation, is as follows. Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and - seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the ' consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby, 1.. Buyer and seller are typically motivated; ' 2. Both parties are will informed or well advised, and acting in what they consider their own best interest; 3. A reasonable time is allowed for exposure in the open market; 4. Payment ent is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5. The rice represents the normal consideration for the property sold P P P P Y unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. ' • Fee Simple interest is defined3 as: 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. • Leased Fee interest is defined as: An ownership interest held by a landlord with the rights of use and occupancy . conveyed by a lease to others. The rights of the lessor (the leased fee owner) ' and the leased fee are specified by contract terms contained within the lease. Marketing Time is defined as: 3 Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002). Midwest Valuation Co, LLC « 6' I The time it takes an interest in real property to sell on the market sub ' sequent to the date of an appraisal. 2. Reasonable marketing time is an estimate of the amount of time it ' might take to sell an interest in real property at its estimated market value during_ the period immediately after the effective date of the appraisal; the anticipated time required to expose the property to a 1 pool of prospective purchasers and to allow appropriate time for negotiation, the exercise of due diligence, and the consummation of a sale at a price supportable by concurrent market conditions. Marketing ' time differs from exposure time, which is always presumed to precede the effective date of the appraisal. (Advisory Opinion 7 of the Appraisal Standards Board of The Appraisal Foundation and Statement on Appraisal Standards No. 6, 'Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions" address the determination of reasonable exposure and marketing time.) Exposure Time is defined as: 1. The time a property remains on the market. 2. The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. Exposure time is different for various types of real estate and value ranges and under various market conditions. (Appraisal Standards Board of The Appraisal Foundation, Statement on Appraisal Standards No. 6, "Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions ") Market value estimates imply that an adequate marketing effort and reasonable ' time for exposure occurred prior to the effective date of the appraisal. In the case of disposition value, the time frame allowed for marketing the property rights is somewhat limited, but the marketing effort is orderly and adequate. With liquidation value, the time frame for marketing the property rights is so severely limited that an adequate marketing program cannot be implemented. (The Report of the Appraisal Institute Special Task Force on Value Definitions qualifies exposure time in terms of the three above - mentioned values.) See also marketing time. Gross Building Area (GBA) is the total floor area of a building, including below -grade space but excluding unenclosed areas, measured from the exterior of the walls. Gross building area for office buildings is computed by measuring to the outside finished Midwest Valuation Co, LLC XV,V. III A kk �•n hal onc, r 7 1 surface of permanent outer building walls without any deductions. All enclosed floors of the building including basements, mechanical equipment floors, penthouses, and the like are included in the measurement. Parking spaces and parking garages are excluded .3 Rentable Area (RA) is the amount of space on which the rent is based; calculated ' according to local practice.3 Gross Leasable Area (GLA) the total floor area designed for the occupancy and ' exclusive use of tenants, including basements and mezzanines, and measured from the center of interior partitioning to outside wall surfaces; the standard measure for " determining the size of shopping centers where rent is calculated based on the GLA ' occupied. The area for which tenants pay rent. 3 As Is Value ' The value of specific ownership rights to an identified parcel of real estate as of the effective date of the appraisal; relates to what physically exists and is legally permissible and excludes all assumptions concerning hypothetical market conditions or possible rezoning. 3 Stabilized Value 1. A value opinion that excludes from consideration any abnormal relationship between supply and demand such as is experienced in boom periods, when cost and sale price may exceed the long -term value, or during periods of depression, when cost and sale price may fall short of long -term value. r 2. A value opinion that excludes from consideration any transitory condition that may cause excessive construction costs, e.g., a bonus or premium for material, the ' abnormal inefficiency of labor, the cost of delay or an excessive sale price, e.g., a premium paid due to a temporary shortage of supply. In layman's to v v v f r after y s rms, stabilized value is the prospective slue o a property construction has been completed and market occupancy and cash flow have been achieved. Midwest Valuation Co, LLC 8 ' Scope of Work According to the Uniform Standards of Professional Appraisal Practice, it is the appraiser's responsibility to develop and report a scope of work that results in credible ' results that are appropriate for the appraisal problem and intended user(s). Therefore, the appraiser must identify and consider: ' • the client and intended users; • the intended use of the report; • the type and definition of value; • the effective date of value; • assignment conditions; G • typical client expectations; and • typical appraisal work by peers for similar assignments. This appraisal is prepared for Mr./Ms. Ima Lender, -- Bank & Trust, Co.. The problem to ' be solved is to estimate the 'as is' market value of the subject property. The intended use is for mortgage financing. This appraisal is intended for the use of client and property owner. iw Report Type: This is a Summary Report as defined by Uniform Standards of Professional Appraisal Practice under Standards Rule 2 -2(B). This format provides a. summary of the appraisal process, subject and market data and valuation analyses. Property Identification: The subject has been identified by the legal description and the assessors' parcel number. Inspection: A complete interior and exterior inspection of the subject property has been made, and photographs taken. Market Area and Analysis of A complete analysis of market conditions' has been Market Conditions: made. The appraiser maintains a comprehensive database for this market area and has reviewed the market for sales and listings relevant to this analysis. ' Highest and Best Use Analysis: A complete v Land as improved hi hest an g y as vacant g d best use analysis for the subject has been made. ' Physically possible, legally permissible and financially feasible uses were considered, and the maximally productive use was concluded. Midwest Valuation Co, LLC 9 Valuation Analyses Cost Approach: A cost approach was applied as there is adequate data to develop a land value and the depreciation accrued to the improvements can be reasonably measured. Sales Comparison Ap A sales a p p roach was ap as there is adequate data ' P PP PP PP q to develop a value estimate and this approach reflects market behavior for this property type. Income Approach: An income approach was not applied as the subject is not an income producing property and there is , adequate data to develop a value estimate with this approach. Hy Conditio appraisal. o s. T hypothetical conditions for this a yp here are no ypothetica o pp ' Extraordinary Assumptions: There are no Extraordinary Assumptions for this appraisal. Midwest Valuation Co, LLC wN, m du A`Idhl,a;en;I.I�.nrt 10 History of the Property The subject property was originally built in 1965 and was significantly remodeled in 2000. It was purchased by the current owner in 2003 for $475,000. Prior to it's purchase, it was used as an office for a mechanical engineering and drafting company. Steen Engineering owned the property during this period since 1999. According to the property owner, they sold the building because they outgrew the space. Since its purchase, the property has been used as an adult care facility. There have been ' few or no remodels since the purchase other than a kitchen addition. The subject property's target market is the Asian community. Midwest Valuation Co, LLC Property Description The bulding is built on a slab grade with exterior walls composed of brick over concrete block. Location: The subject is located on the south side of Route, at the ' southwest region of the downtown commercial district. Current Use of the Adult Services ' Property: Site Size: Total: .72 acres; 3,924 square feet Usable: .72 acres; 3,924 square fee ' Shape: The site is irregular , Frontage /Access: The subject property has good access with frontage as follows: Lilac Drive: Frontage ' Visibility: Average Topography: The subject has level topography at grade and no areas of J Po �'a Py g wetlands. Soil Conditions: The soil conditions observed at the subject appear to be typical of the region and adequate to support development. Utilities: Electricity: Public Sewer: Public Sewer' Water: Public Water ' Natural Gas: Public Gas Underground Utilities: UndergroundUtilities - Adequacy: Adequate Site Improvements: • StreetLights • Sidewalk ' 9 CurbGutter Flood Zone: The subject is located in an area mapped by the Federal ' Emergency Management Agency (FEMA). The subject is located in FEMA flood zone X, which is not classified as a flood hazard area. FEMA Map Number: 11 -22 -33 Midwest Valuation Co, LLC d afula. i I „,.., n'l 12 1 1 FEMA Map Date: January 1, 19$8 r The subject is not in a flood zone. r Environmental Issues: There are no known environmental issues related to the subject property. Encumbrance / None known Easements: r 1 r r 1 r r 1 r r r r r Midwest Valuation Co, LLC ;z, de i:..I ir:hcmco.nct 13 r Site Plat Map , Hiennepiln County Property Map Print Page I of 1 r r« r Hennepin County Property Map - Tax Year: 2010 'nsa+eA+..s+wmew pyert.rrw M1a�e+mrtpMlonr ne:W rryarnr�.sAr+dvyaertreen aap.s. eriAr A7 s�m+war+wr PrAV- r+Ar +��+++ , �rars4r :17- PNra+rrrW w QrWn targA r .v+I w�ew.mrrar n~ a.rr eswArsa 11r kmmrpr .. uY wa.nw rwr Ar tirws AMr+ra.h4 ; r. rawcnMmr.+ �Awnr.. n ay. aae�rw. ra. bw. s. wr+at�rWRw.w'.�r�+riw.prsua�rar Mp�tlra arr e.M1A... ' ' HJI A. � 7901 r r .�' �.2L13 J3 u. sw =A 2266 2624 w 5 xur -. � 4 5 x• ►Asa 2au•7 .� . _ `.• 9632 �. �,. r' 9628 A91LL •. Ar' 6626 `. w1 • 2126 i 2102 2292, 4 e .� 9684 � ' i f `i roc 2264: -•�.. � I — -� ' %L9 E 2760 ,r \ �+ RA•9t f t 4 w N L 2 + Xf-'n ^.;wt .. f. ��ti' r i s !C'w .. YF1 �t2•x: - ,I AYCA +.* mL ''� w 2927 t ' .r 9•SQL` F F . ti � f66C f 4 , w sA9v 2313 } �, / TT79ww ww r alrt `. f F F ^• rAltdY '� . ?19 P. TMAAyl wl F fA.2:t "` ! dOyA''1• a ' 2724,, • vS 1 I t fld @iirow t - a . '..,,•...- F..M, �'f'�lAt 3/1'7/26168 33rS6t11tM �` - faN Ilk A2Y1W21-42WWW Commat fraraM Dow 214/208.1 r . Po rgff SW LILAC OR IS, RROOfO;YR CflIMM, MIN $5430 - P"PootY FPM QO6OWNCjAk4ftW ifafa fMe4r !+1 73p0O.Q0 - ff64aafL6n�e MMfffr4ffflillOTlAf9 0116 Dodaw 20/20a2 Am* (aq/R)t U319 Oda Cade WARRAIM Ofm ,�� s Ana (ae2arji 0.72 _. .... Tax TAY #22.728.14. x IJ ' co.henne n.aslHC M ?!17/2011 ' �• F �Y a�alLocator.aspx Midwest Valuation CO, LLC 14 ' TMPROVEMI+;NTS DE SCRIPTION _ Development/Property Kashia Adult Services Name: Property Type: Commercial BUILDING S UMMARY ' Building Class: The subject prop is predominantly improved office /retail . J P P Y P Y P building. ' Construction: Brick and Concrete ' Quality: Average. Year Built: 1965 Condition: The redominant condition is r c� diti average. ' Areas, Ratios & Gross Building Area: 3,924 Numbers: Gross Leasable Area: 3,924 Rentable Area: 3,924 ' Building Efficiency Ratio Number of Units: 1 C Midwest Valuation Co, LLC 15 Building Description:- One story brick building containing two restrooms, two conference areas, a utility room, three offices, a kitchen, an entrance area, and a large open space activity area Construction: Steel and masonry Construction Quality: ConstructionQuality ' Year Built: 1965 Renovations: 1999 -2000 Effective Age: 26 years` ' Remaining Useful Life: 52 Years Condition: Average Appeal/Appearance: Average Areas, Ratios & Number of Stories: One Numbers: Gross Building Area: 3,294 SF ' Gross Leasable Area: 3,294 SF Rentable Area: 3,294 SF Number of Units: 1 , �_ Foundation: Poured concrete slab Basement/Sublevels: None , Basement Use: NA Exterior: Brick Windows: Windows , Roof /Cover: Flat Service Access/ The building is served by entrance door to the front of the Overhead Doors: building and an exit door to the rear. Midwest Valuation Co, LLC , .:,. , ,a«., ,. ,: »;,:, .., t 16 4N T Floor Cover: Carpet Walls: Carpet Ceilings & Ceiling Painted drywall Height: Lighting: Acoustic ceiling panels A mix of florescent and incandescent lighting. Restrooms Two Restrooms Nit I#ANI&AL SY M S Heating: Forced Air ' Cooling: AC Electrical:_ Public /200 Amp CBP Plumbing ondition: Average e g ' Elevators/Escalators: None PARKIl�TG Parking Type and . Type: On site Number of Spaces: Spaces: Condition: Average ' Parking: Approximately 38 PP Y PROPERTY A1�1A , 5 5 f Design & Functional Average Utility: Deferred Maintenance: None known Midwest Valuation Co, LLC 17 Americans With Disabilities Act Please reference the Limiting Conditions and Assumptions section of this report. , Hazardous Substances Please reference the Limiting Conditions and Assumptions section of this report. ' Midwest Valuation Co, LLC 18 1 Improvements Plan 1 Floor Nan 1 a� �xfs U Mach ►s.ax a �� (D to Cy I X O �a!lelt g 11 � gaeq O ' _U I fOX10 xF Nam =3 9-0 0 1 0 C L,5 � I _ foxto �-� ff �O J r Goata ISK I O fn }i 7x7 x 1 Ofri e orrte IS%la 1 to"' n -a�cJi 1 i 1 Midwest Valuation Co, LZ.0 wti+ it:idae al lati in. .m t 19 Subject Photographs f' "t � f M 2 , w Subject Front Y 5 F Subject/Front Side Midwest Valuation Co. LLC 20 Subject Side t r Subject Street Midwest Valuation Co, LLC 21 9} f � t v Subject Side Midwest Valuation Co, LLC 22 ■ i I_. ® Front Entrance ■ j 4; Front Desk/Reception Area Midwest Valuation Co, LLC 23 I . � .� y . .g . . .... . � . Subject Office , . . . � Subject Activity Area I . � Midwest ValuatonCo, LLC 2 : RIMY � t` is nr r d k� e� 5 a y �Y Subject Restroom x r f X Subject Utility Room Midwest Valuation Co, LLC 25 s: b ?tS i 3� r , .r 1 gr a� 1 Subject Kitchen 4 a fF w x Subject Rear Exit Door Midwest Valuation Co, LLC 26 r r r iHd f t r r r r µ A .1 e � T r r s3 r r Subject Conference Room r r Midwest Valuation Co, LLC 27 r ■ Assessment and Taxes REAL ESTATE ASSESSMENT AND TAXES Taxing Authority Taxing Authority Assessment Year 2010 ASSESSED VALUES Tax Identification Number TaxID Land Assessed Value $255,000 Building Assessed Value $344,000 Other Property Assessed Value 0 Total Assessed Value $599,000 e Midwest Valuation Co, LLC 28 pciottletails jsp Pale 7 of 2 1 Ak* tanaw Papabi f "11 ("Id V&%W) wX be s wofthk an ta0i web sift aporoxkAmov 07101 Parcel Daft for Taxes Payable 2010 prtearty Litt 02- 111 -21- 12401$2 Additm Sele LILAC DR N Naakd"Myt aR00KLYN armit Sob" Dub Coaftwedon Vean 1955 %vabrsball a Aprprow. Paraw Met IRREGULAR Stwnr Dish *waw Nana TONY YANG : - Taxp"w Namt TOM' YANG ' a Addram 41 05 115TH AVE NAM .LAKE MN 553" Sale Snfora 00" ' 110114; prk" art t"Orttd ttt Rtlibd an tae Ca Wktab of Real fame vtaet and are not rrareanted t0 rsprtaew[ aroo4o faantreb"s. Sant Data txmeK. MW Sab ftftat y175,0W Traata47d" TTptr Warranty Deed Tax Partial D edlarkAjon Addition Mawta REG. LAND SURVEY NO. 1114 Lob _.atatltt Nobs a SOMMUt COM AT MOST WLY COR Of TRACT A TH SELY TO MOST SLY ODA THOF TH HELY TO ANGLE PT IN SLY LINE THOF TH E TO S! COR TWO! TH N TO SE COR Of R L S NNet Tl to 10 a P&ANIA FNfMS a aauada D0$&iV 011% To raoriw fall tax peroM 0060&4000, 00101E to I - .. - 1 1ptlan�¢a bep»epUt nin.et . AbstxaetorTat+tafat TORRENS ' Vakte and Tax SUOU111try AW TAXAS Payable 2010 Valaatfs E bklft aed by Aareaaser as of 3800ary 2, 2009 letltgebd Nsrkrt vsritra #59+1',000 TaxalMe MaMwL V'aWnet 1:949,000 U0111 IffloV errant Am"ab TORN Nat Tate 521,944.77 TOW!pedal 411 $734.57 StN 1 Was" fttr Tonal Taxi $22,721.90 Properly Information Detail fir TaxeS Payablis 2010 Values WabliShed by Asaessor as of 3anuary 2, 2009 ' Vaawp Land Nrrfcot $255,000 OwNdtay ratttrt $744.000 Nadkimry /ltrktt Total MAN bob $594.000 t�auarykp imprtwrnaKS Matnans bxcktsitn daadacatiorui qtr Type CONItdACIAL hV/Iwwwl6.00l mtepiammuSfpin &VrintdebWLjsp?pii=Mtt82142G032. 2/1712011 Midwest Valuation Co, LLC 29 Zoning 1 LAND USE CONTROLS Zoning Code C -1 _ Zoning Description See report Current Use Legally Conforming Current Use Legally Conforming 1 Zoning Change. Likely Unlikely i 1 1 1 1 1 1 1 r 1 Midwest Valuation Co, LLC 30 1 r r ' Highest and Best Use Highest and best use may be defined as r the reasonably probable and legal use of vacant land or improved property, which is physically possible, appropriately supported, financially feasible, and that results in ' the highest value.5 1. Legally Permissible: What uses are permitted by zoning and other legal r restrictions? 2. Physically Possible: To what use is the site physically adaptable? r 3. Financial) Feasible: Which possible and permissible use will produce an net Y _ P, P p Y return to the owner of the site? r 4. Maximally Productive. Among the feasible uses which use will produce the highest net return, (i.e., the highest present worth)? Highest and Best Use of the Site ' The Highest and Best Use of the Site is it's current use or that of an office /retail use. Highest and Best Use as Improved The Highest and Best Use of the Site is it's current use or that of an office /retail use. 1 r 1 1 1 1 5 The Appraisal of Real Estate 12" Edition, Page 305, Appraisal Institute 1 Midwest Valuation Co, LLC ,k mva Ii iari onc, nN 31 " 1 Valuation Methodology ' Three basic approaches may be used to arrive at an estimate of market value. They are: 1. The Cost Approach 2. The Income Approach 3. The Sales Comparison Approach Cost Approach The Cost Approach is summarized as follows: Cost New - Depreciation + Land Value Value Income Approach ' The Income Approach converts the anticipated flow of future benefits (income) to a present value estimate through a capitalization and or a discounting process. Sales Comparison Approach The Sales Comparison Approach compares sales of similar properties with the subject property. Each comparable sale is adjusted for its inferior or superior characteristics. The ' values derived from the adjusted comparable sales form a range of value for the subject. By process of correlation and analysis, a final indicated value is derived Final Reconciliation The appraisal process concludes with the Final Reconciliation of the values derived from the approaches applied for a single estimate of market value. Different properties require , different means of analysis and lend themselves to one approach over the others. Analyses Applied ' A cost analysis was considered and was developed because there is adequate data to develop a land value and the depreciation accrued to the improvements can be reasonably measured, ' A sales comparison analysis was considered and was developed because there is adequate data to develop a value estimate and this approach reflects market behavior for ' this property type. An income analysis was considered and was developed because the subject is an income producing property and there is adequate data to develop a value estimate with this approach. Midwest Valuation Co, LLC :: s ; ..,,,.;, .,, 32 ' Cost Approach The Cost Approach is based on the principle of substitution that a prudent and rational ' person would pay no more for a property than the cost to construct a similar and competitive property, assuming no undue delay in the process. The Cost Approach tends to set the upper limit of value before depreciation is considered. The applied process is as ' follows: • Estimate the land value, according to its Highest and Best Use. We have used the ' Sales Comparison Approach; the process is as follows: o Comparable sales, contracts for sale and current offerings are researched ' and documented. o Each comparable is analyzed and adjusted to equate with the subject property. o ` The value indication of each comparable is analyzed and the data reconciled for a land value indication. i • Estimate the replacement cost of the building and site improvements. • Estimate the physical, functional and/or external depreciation accrued to the improvements. • Sum the depreciated value of the improvements with the value of the land for an indication of value: Land Value The subject's land value has been developed via the sales comparison approach. I , Midwest Valuation Co, LLC 33 Sales Comparison Approach — Land Valuation The Sales Comparison Approach is based on the premise that a buyer would pay no more , for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership. It is based on the principles of supply and demand, balance, substitution and externalities. The following steps describe the applied process ' of the Sales Comparison Approach. _ • The market in which the subject property competes is investigated; comparable sales, contracts for sale and current offerings are reviewed. • The most pertinent data is further analyzed and the quality of the transaction is Y determined. • The most meaningful unit of value for the subject property is determined. ' g J P P Y • Each comparable sale is analyzed and where appropriate, adjusted to equate with , the subject property. • . The value indication of each comparable sale is analyzed and the data reconciled ' for a final indication of value via the Sales Comparison Approach. I Midwest Valuation Co, LLC W �k 34 Sales Comparison Approach The Sales Comparison Approach is based on the premise that a buyer would pay no more ' for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership. It is based on the principles of supply and demand, balance, substitution and externalities. The following steps describe the applied process ' of the Sales Comparison Approach. • The market in which the subject property competes is investigated; comparable ' sales, contracts for sale and current offerings are reviewed. • The most pertinent data is further analyzed and the quality of the transaction is ' determined. • The most meaningful unit of value for the subject property is determined. ' • Each comparable sale is analyzed and where appropriate, adjusted toequate with P Y J q the subject property. • The value indication of each comparable sale is analyzed and the data reconciled P Y for a final indication of value via the Sales Comparison Approach. Comparables ' We have researched three comparables for this analysis; these are documented on the following pages followed by a location map and analysis grid. All sales have been ' researched through numerous sources, inspected and verified by a party to the transaction. Midwest Valuation Co, LLC 35 Comparable One PID:3411921310106 J 'tai y z " x V. W ' , e'�''dh'" ti�u ,iti xz� 3 m.ic, Site Information Information Sources: Hennepin County Records Site Size: Acres ' Site Topography: Flat Access: Average Utilities: Public Site Improvements: Office Building Easements: None known F iransaction Data Address: 6415 Brooklyn Blvd Sale Date: 08/31/2007 City: Brooklyn Center Sale Price: $850,000 ' State: MN GBA Unit Price: $87.79 Tax ID: 3411921310106 Transaction Type: Closed/Foreclosed ' Grantor: Financing: Conventional Grantee: The Nicole Group LLC Property Rights: Fee Simple Site Acres: 1.29 Terrain: Flat Land SF: 55,594 SF Use: Multi - Tenant Office Flood Zone: No Shape: Rectangular Encumbrance/ Easements: None known Utilities: Public Zoning: C1 Improvements and Financial Data ' GBA: 9,682 SF Land to Building Ratio: 5.78 Rentable Area: 9,682 No of Units: 1 Year Built: 1965 Condition: Class B Parking: 68 Estimate Midwest Valuation Co, LLC 36 Comparable Two PID:1111921430002 :,kar .4 Site Information ' Information Sources: Hennepin County Records Site Size: 6.37Acres Site Topography: Flat Access: Average Utilities: Public Site Improvements: Child Care Center Easements: None known Transaction Data Address: 2100 93� Way Sale Date: 06/09/2010 ' City: Brooklyn Park Sale Price: $700,000 State: MN GBA Unit Price: $98.62 Tax ID: 3411921310106 Transaction Type: Religious /Charitable Buyer: 2100 93rd Way North, LLC Financing: Conventional Seller: Riverview United Methodist Church Property Rights: Fee Simple Site ' Acres: 6.37 Acres Terrain: Flat Land SF: 277,493 SF Use: Childcare Center ' Flood Zone: No Shape: Rectangular Encumbrance/ Easements: None known Utilities: Public Zoning: B1 Improvements and Financial Data GBA: 7,098 SF Land to Building Ratio: Rentable Area: 7,098 SF No of Units: 1 Year Built: 1961/1997 Parking: 48 Estimate Midwest Valuation Co, LLC 37 e Comparable Three PID: 271 1 921 330090 ' Site Information e Information Sources: Hennepin County Records Site Size: 1.92 Acres Site Topography: Flat Access: Average Utilities: Public Site Improvements: Office Building Easements: None known t Transaction Data Address: 7062 Brooklyn Blvd Sale Date: 12/31/2008 ' City: Brooklyn Center Sale Price: $178,000 State: MN GBA Unit Price: $92.71 Tax ID: 2711921330090 Transaction Type: Conventional Seller: CBS Construction Services, Inc Financing: Conventional Buyer: Jayco I, LLC Property Rights: Fee Simple Site Acres: 1.29 Terrain: Flat Land SF: 55,594 SF Use: Office , Flood Zone: No Shape: Rectangular Encumbrance/ Easements: None known Utilities: Public Zoning: C1 e Improvements and Financial Data GBA: 1920 SF Land to Building Ratio: Rentable Area: 1920 , No of Units: 1 Year Built: 1965 Condition: Class B Parking: 6 Estimate Midwest Valuation Co, LLC 38 Comparable Four PID:3011921340002 WA 6 W� �' W '+ Site Information Information Sources: Hennepin County Records Site Size: 1.15 Acres Site Topography: Flat Access: Average Utilities: Public ' Site Improvements: Office Building Easements: None known Transaction Data Address: 7000 Northland Drive Sale Date: 11/30/2010 City: Brooklyn Park Sale Price: $340,000 State: NIN GBA Unit Price: $112.96 Tax ID : 3011921340002 Transaction Type: Buyer: Postma, LLC Financing: Conventional Seller: Rush Creek Meadows, LLC Property Rights- Fee Simple ' Site Acres: 1.15 Terrain: Flat ' Land SF: 49,981 SF Use: Office Flood Zone: No Shape: Rectangular Encumbrance/ Easements: None known Utilities: Public Zoning: Improvements and Financial Data GBA: 3010 SF Land to Building Ratio: 16.16 ' Rentable Area: 3010 No of Units: 1 Year Built: 1955 Condition: Class B Parking: 30 Estimate Midwest Valuation Co, LLC 39 Analysis Grid The above sales have been analyzed and compared with the subject property. We have considered adjustments in the areas of: • Property Rights Sold • Market Trends ' • Financing • Location • Conditions of Sale • Physical Characteristics ' On the following page is a sales comparison grid displaying the subject property, the comparables and the adjustments applied. Comparable Sale Adjustments Sales Comparison Approach Conclusion The adjusted values of the comparable properties range from $73.90 to$123.00; the , average is $99.00. All of the value indications have been considered, and in the final analysis, comparables < # >,_ < #> and <#>, have been given most weight in arriving at our ' final reconciled per square foot value of $101.00. As Is Market Value ' Indicated Value per Square Foot: $102.00 Subject Size: 3,924 SF Indicated Value: $396,324 ' Rounded: $396,000 Three Hundred Ninety Six Thousand' Dollars Midwest Valuation Co, LLC 1,,;V: III Id %k I'al ailol,!_V.;wl 40 ' Final Reconciliation The process of reconciliation involves the analysis of each approach to value. The quality of data applied, the significance of each approach as it relates to market behavior and ' defensibility of each approach are considered and weighed. Finally, each is considered separately and comparatively with each other. Value Indications Land Value: ' Cost Approach: NA Sales Comparison Approach: $396,000 Income Approach: NA Cost Approach Due to the age of the subject property, the Cost Approach is not applicable Safes Comparison Approach The Sales Comparison Approach was given the most weight. Income Approach ' The Income Approach was not deemed applicable because this is not an income producing property. ' Value Conclusion Based on the data and analyses developed in this appraisal, we have reconciled to the following value conclusion, as of February 5, 2011, subject to the Limiting Conditions and Assumptions of this appraisal. ' Reconciled Value(s): Premise: As Is Interest: Fee Simple Value Conclusion: 396,000 Three Hundred Ninety Six Thousand Dollars Midwest Valuation Co, LLC 41 Addenda 1 1 1 1 1 Midwest Valuation Co, LLC �,.n ;i \k cc t .jan< mc n 42 ' Certification Statement We certify that, to the best of our knowledge and belief: •. The statements of fact contained in this report are true and correct. • The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, unbiased professional analyses, opinions and conclusions. • We have no present or contemplated future interest in the property that is the subject of this report, and have no personal interest or bias with respect to the parties involved. • Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. • Our analyses, opinions, and conclusions were developed and this report has been prepared inconformity with the Uniform Standards of Professional Appraisal Practice (USPAP). ' We have made a ersonal inspection of property t is the subject of this pect the p p y tha report. bj p • No one outside of the signatories below provided significant professional assistance in the development of the conclusions contained in this report. ' We certify sufficient competence to appraise this property through education and experience, in addition to the internal resources of the appraisal firm. • The value conclusion(s) and other opinions expressed herein are not based on a requested minimum value, a specific value or approval of a loan. • Kari Jacobson has made an inspection of the subject property. Kari Jacobson Certified General Real Property Appraiser Midwest Valuation Co; LLC �k.nm � tvaI.mnonc .nct 43 Limiting Conditions and Assumptions Acceptance of and/or use of this report constitutes acceptance of the following limiting conditions and assumptions; these can only be modified by written documents executed by both parties. Midwest Valuation Co, LLC This appraisal is to be used only for the purpose stated herein. While distribution of this ' appraisal in its entirety is at the discretion of the client, individual sections shall not be distributed; this report is intended to be used in whole and not in part. No part of this appraisal, its value estimates or the identity of the firm or the appraiser(s) may be communicated to the public through advertising, public relations, media sales, or other media. All files, work papers and documents developed in connection with this assignment are the property of Midwest Valuation Co, LLC. Information, estimates and opinions are ' verified where possible, but cannot be guaranteed. Plans provided are intended to assist the client in visualizing the property; no other use of these plans is intended or permitted. No hidden or unapparent conditions of the property, subsoil or structure, which would make the property more or less valuable, were discovered by the appraiser(s) or made known to the appraiser(s). No responsibility is assumed for such conditions or engineering necessary to discover them. Unless otherwise stated, this appraisal assumes there is no existence of hazardous materials or conditions, in any form, on or near the subject property. Unless otherwise state in this _re report, the existence of hazardous substances, including g without limitation asbestos, polychlorinated biphenyl, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, was not called to the attention of the appraiser nor did the appraiser become aware of such during the appraiser's inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however, is not qualified to test for such substances. The presence of such hazardous substances may affect the value of the property. The value opinion developed herein is predicated on the assumption that ' no such hazardous substances exist on or in the property or in such proximity thereto, which would cause a loss in value. No responsibility is assumed for any such hazardous substances, nor for any expertise or knowledge required to discover them. Unless stated herein, the P P Y ro ert is assumed to be outside of areas where flood hazard insurance is mandatory. Maps used by public and private agencies to determine these areas are limited with respect to accuracy. Due diligence has been exercised in interpreting these maps, but no responsibility is assumed for misinterpretation. ' Good title, free of liens, encumbrances and special assessments is assumed. No responsibility is assumed for matters of a legal nature. ' Necessary licenses, permits, consents, legislative or administrative authority from any local, state or Federal government or private entity are assumed to be in place or reasonably obtainable. It is assumed there are no zoning violations, encroachments, easements or other restrictions which would affect the subject property, unless otherwise stated. Midwest Valuation Co, LLC 45 The appraiser(s) are not required to give testimony in Court in connection with this appraisal. If the appraisers are subpoenaed pursuant to a court order, the client agrees to pay the appraiser(s) Appraisal Co. Valuation & Consulting's regular per diem rate plus expenses. Appraisals are based on the data available at the time the assignment is completed. Amendments /modifications to appraisals based on new information made available after the appraisal was completed will be made, as soon as reasonably possible, for an additional fee. Americans with Disabilities Act (ADA ) of 1990 A civil rights act passed by Congress guaranteeing individuals with disabilities equal opportunity in public accommodations, employment, transportation, government services, and telecommunications. Statutory deadlines become effective on various dates between 1990 and 1997. Appraisal Co. Valuation & Consulting has not made a determination regarding the subject's ADA compliance or non - compliance. Non - compliance could have a negative impact on value, however this has not been considered or analyzed in this appraisal. i ■ BROCHURE Midwest Valuation Co, LLC 46 I i Midwest Valuation Co, LLC Maple Grove, MN 55311 612.306.2713 n www.midwestval uati onco.com February 4. 2011 Subject: Adult Care Facility 5650 Lilac Drive Brooklyn. Center, MN P ID: 02-118-21-42-0032 Dear Tony Yang, This is to confirm our assignment to appraise the above referenced properties located in Brooklyn Center, Minnesota. Your credit union requires a Summary Appraisal format to be completed on the above referenced properties. Tony. Yang is my client for this assignment. The appraisal report and the invoice for payment of the appraisal fee are to be addressed to: Midwest Valuation Co, LLC PO Box Maple Grove, MN 55311 ' A down payment of $1,100 is to be made upon commencement of the report. Total charges for the report shall range from $2200 -2600. A final' payment is to be made before delivery of the final report. In addition, any modifications, and letters of enhancement, etc. requested by your company after review of this appraisal report must be completed and returned to Midwest Valuation Co, LLC within nine calendar days. The purpose of this appraisal is to provide a supported opinion of the "As Is Market Value' of the real estate as of the date of the appraisal inspection, in accordance with Title XI (FIItl2EA) and confirming to the Uniform Standards of Professional Appraisal Practice. The effective date of the "As Is" value conclusion should be as close to the delivery date as possible to be used for tax and assessment deliberations. The following value is requested: Midwest Valuation Co, LLC 47 Market Value Fee Simple Interest for Legal parcel retained with this property. A copy of this letter and any other written instructions from your company will be ' included in the appraisal analysis. Your appraisal will state our supported opinion of Market Value and will state a reasonable marketing and absorption period at the indicated value, with market documentation. This appraisal willspecifically di uss the Com Competency Provision and discuss PP Pe Y Exposure Time, in addition to Marketing Time. Should the scope of work be more limited, the exceptions will be identified in the appraisal cover letter. This certification of the appraisal must state the appraisal assignment is not based on a minimum value, a specific value, or approval of a loart. This assignment will state that our knowledge and experience to compete this appraisal assignment and that Midwest Valuation Co, LLC has not been sued by a regulatory agency or financial institution for fraud or negligence involving an appraisal report. Midwest Valuation is not an expert on the existence of hazardous waste. This appraisal assignment will not include this information concerning apparent contamination. If physical signs are evident, a notation of such will be incorporated in the letter of transmittal. If this letter represents your understand of our discussion and you agree to engage Midwest Valuation for the above reference appraisal report, please sign a copy of this, letter and promptly return to Midwest Valuation Co, LLC at the address below ar a mail a' scanned copy to tbe-e mail address listed below. Sincerely, t Kari Jacobson Tony Yang Certified General Real Property Appraiser 5650 Lilac Drive President Brooklyn Center, MN Midwest Valuation Co, LLC Maple Grove, MN 55744 612.306.2713 tnidwe-,tvaluationco@gmail.com www,midwesty altiationco.conn I , Midwest Valuation Co, LLC a ,..,...,;.,,,. 48 x lJ ur mission is to t a provide an environment in Which all that occurs is directed toward * ` `a impoving the quality of W each adult's life. We (, accomplish this by - O treating every participant , with the hightest level of s ` !' dignity and respect. We r pledge to deliver the best adult care program to communities with i structured activites, nurtuing relationships and ' iJ a � professional care for body mind and spirit, aS, - U O - . . ett > i WO iliac Drive ?t xyk Br t 1 vn Center. MN 55430 > (76S;,%&4000 i KASHIA TSEV LAUS YOG IB QUO C A W PAB `+ COV LAUS KOM SAWV DAWS MUAJ KEV KAJ ps SIAS THIAB NO] OAB NYOB ZOO, Peb"kev pab muah taws li nratti no: g er v ices g Tsheb a the followin services: :3 Web muaj tsheb tuaj tos throb xa txhua (� txhua hnub, yog Ieej twg ho tsis ntuaj. We provide needed support for elderly Transportation , and adult with mental impairment Transportation will be provided to clients that Kev noj qab jyob zoo through supervisetl and structured ` require it. Client gill be picked up in the morning ♦Pab coj mus hoos maum programs in a group setting far and dropped off in the afternoon by our van daily. V Pab coj nqa tshuaj senior citizens to be m ageddn social, , V Pab ntsuas mob recreational and rehabilitative t- Health Care ♦ Ob a twg kev noj tshoai activities while they retain their YAssistance with Personal Care individual and community living. The Assistancr Medications Exercise V Monthly Health Monitoring ♦ Peb Muaj exercise txhua hnub y objective is to maintain each Clients Vlndividual Care Plan V Peb muaj tshuab tau cov ua ho xav _. functional abilities for as long as " •Health and Wellness Education . , .exercise thiab possible, thereby avoiding premature institutionalization in more intensive Exercise Kev noj haus .tare facilities. . - 4Daily Exercise Program V Peb muaj zaub mov hmoob ran sawn VExercise Equipment on Site for All dews noj sus txhua hnub { Parricipants to Utilize ♦ Peb Muaj khoom ran sawvdaws txom ' ncauj thaum sawv utxov thaib tav sus dua Nutrition s, , • Peb muaj dej thiab kasfes ran sawn dews ♦Daily Nutritious Lunch g hausta hnub I TAM & PM Snacks a Kev ua si Social Activities V Bingo Games V Lasvoos M Social Dance • Saib movies Monthly Field Trip to Places of Interest in ♦ Hais kwv txhiaj the Area ♦ Tso dag tsoivag � -1 ♦ Tua pool Guest Speakers f WTVNideo • it Coj mus xyuas ub no ib hlis ib zaug i Other Services: Services such as interpletation and Lwm yam I transportation to conduct personal aciivities my be ♦ Pab txhais lus available upon request.. V Pab saib niaub ntawv Ir YOG NEJ LEE] TWG MUAJ COV r LAOS XAV TUAJ NO HU RAU PEB TAU (763) 566 -4000 O ' I LICENSE STATE OF MINNESOTA JACOBSON, KART D PO BOX 73 GRAND RAPIDS, MN 55744 Department of Commerce The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that KARI D JACOBSON PO BOX 73 GRAND RAPIDS, MN 55744 has compiled with the laws of the State of Minnesota and is hereby licensed to transact the business of ' Resident Appraiser : Certified General License Number: 20346057 unless this authority is suspended, revoked, or otherwise legally terminated. This license shall be in effect unfit August 31, 2011. IN TESTIMONY WHEREOF, I have hereunto set my hand this October 13, -2009. COMMISSIONER OF COMMERCE Minnesota Department of Commerce Continuing Education: Licensing Division CE Requirement Type CE Required Hours 85 7th Place East, Suite 500 Total - Appraiser 30 St. Paul, MN 55101 -3165 USPAP 7 Telephone: (651) 296 -6319 Email: ficensing.commorce@state.mn.us Websitei commerce.state.mn.ua Notes: Continuing Education; 15 Mwre is required In the Met renewal period, which includes a 7 hour USPAP course 30 hours is required for each subsequent renewal period, which includes a 7 hour USPAP course. APpralsm: You must hold a licensed Residential, Certified Residential, or Certified General quatfication in order to perform appraisals for hderaity- related transactions. Trainees do not qualify. For further detaas, please visit our websde at conxnerce.state.mn.us. Midwest Valuation Co, LLC ;,e,;tv „i:,:,tloi;:o,,:t 51 Materials handed out at meeting. • SUMMARY REPORT • REAL ESTATE APPRAISAL Of Kashia Adult Day Services r • ltshla Adult Day Servic • 5650 Lilac Drive • Brooklyn Center,MN As of December 31, 2010 Prepared For Mr. Tony Yang 5650 Lilac Drive Brooklyn Center, MN 55430 • Client File: Tax Appeal Prepared by MIDWEST VALUATION CO,LLC Kari Jacobson Certified General Real Property Appraiser 1 • MIDWEST VALUATION CO,LLC PO Box 1558 www.midwestvationco.com 612.306.2713 Maple Grove,MN 55369 midwestvaluationco @gmail.com • February 5, 2011 Mr. Tony Yang • Kashia Adult Day Service 5650 Lilac Drive Brooklyn Center, MN 55430 Re: Summary Report, Real Estate Appraisal Kashia Adult Day Services . 5640 Lilac Drive File Name: Tax Appeal Dear Mr. Yang: At your request, we have prepared an appraisal for the above referenced property. Please reference this report for important information regarding the scope of research and analysis for this appraisal, including property identification, inspection, highest and best use analysis, and valuation methodology. We certify that we have no present or contemplated future interest in the property beyond this estimate of value. Your attention is directed to the Limiting Conditions and • Assumptions in the Addenda section of this report. Acceptance of this report constitutes an agreement with these conditions and assumptions. In particular, we note the following: • Hypothetical Conditions: • There are no hypotheical conditions for this appraisal. s Extraordinary Assumptions: • This appraisal was performed under the extraordinary assumption that the subject property was as of December 31, 2010 in the condition as of the date of the inspection date of February 5, 2011. 2 • • • • • • Mr. Tony Yang Kashia Adult Day Services • February 14, 2011 • Page 2 Based on the appraisal described in the accompanying report, subject to the Limiting • Conditions and Assumptions, Extraordinary Assumptions and Hypothetical Conditions • (if any), we have made the following value conclusion(s): Current As Is Market Value: The "As Is"market value of the Fee Simple estate of the property, as of December 31, • 2010, is: $396,000 Three Hundred Ninety Six Thousand Dollars • The market exposure time' preceding December 31, 2010 would have been 6-12 months and the estimated marketing period as of December, 31, 2010 is 6-12 months. • • Respectfully submitted, Midwest Valuation Co, LLC �In • • • • Kari Jacobson • Certified General Real Property Appraiser • • • • • • • • • • • ' Exposure Time: see definition • 2 Marketing Time: see definition 3 • • • • • • • • • Summary of Important Facts and Conclusions • • GENERAL • Subject: Kashia Adult Care Services • 5650 Lilac Drive Brooklyn Center, Hennepin County, MN • Adult care services Owner: Tony Yang • Legal Description: COM AT MOST WLY COR OF TRACT A TH SELY TO MOST SLY COR THOF TH NELY TO • ANGLE PT IN SLY LINE THOF TH E TO SE COR THOF TH N TO SE COR OF R L S • Note: This is a Partial Metes & Bounds Description. • Tax Identification: 02-118-21-42-0032 • Date of Report: February 5, 2011 • Intended Use: The intended use is for tax appeal. • Intended User(s): Tony Yang, City of Brooklyn Center Assessor. • • Assessed Value: Land: $255,000 Building: $344,000 • Total: $599,000 • • Taxes: Taxes: $21,994.37 Assessments: $734.57 • Total: $22,728.94 Sale History: The subject was not sold in the last three years, • according to public records. • The subject sold for$475,000 in October, 2003 to • present owner. Current The subject is not currently listed for sale, or under • Listing/Contract(s): contract. • • • • • • Midwest Valuation Co, LLC 4 • • • PROPERTY Land Area: Total: .72 Acres • Usable: .72 Acres Improvements: Building Building ID: Kashia Adult • Care Services Year Built: 1965 Renovations: Approximately 2000/kitchen • after 2003 purchase Condition: Average Number of Stories: 1 Gross Building Area(GBA): 3,924 SF Rentable Area(RA): 3,924 SF • Gross Leasable Area(GLA): 3,924 SF Number of Units: l Property Totals: GBA* RA GLA Units 3,924 3,924 3,924, 1 Zoning: C-1 Highest and Best Use Current Use, Office/Retail • of the Site: Highest and Best Use Current Use, Office/Retail as Improved: • VALUE INDICATIONS Land Value: Cost Approach: NA • Sales Comparison $396,000 Approach: Income Approach: NA • Reconciled Value(s): $396,000 Value Conclusion(s) Effective Date(s) December 31, 2011 . Property Rights Fee Simple • Midwest Valuation Co, LLC 5 Definitions • Market Value: As defined by the Office of the Comptroller of Currency (OCC) under 12 CFR, Part 34, Subpart C-Appraisals, 34.42 Definitions, the Board of Governors of the Federal Reserve System (FRS) and the Federal Deposit Insurance Corporation in compliance with Title XI of FIRREA, as well as by the Uniform Standards of Appraisal • Practice as promulgated by the Appraisal Foundation, is as follows. Market value means the most probable price which a property should bring in • a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from • seller to buyer under conditions whereby, 1. Buyer and seller are typically motivated; 2. Both parties are will informed or well advised,and acting in what they consider their own best interest; . 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. A Fee Simple interest is defined as: • 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. A Leased Fee interest is defined as: An ownership interest held by a landlord with the rights of use and occupancy • conveyed by a lease to others. The rights of the lessor (the leased fee owner) • and the leased fee are specified by contract terms contained within the lease. Marketing Time is defined as: • 3 Appraisal Institute,The Dictionary of Real Estate Appraisal,4th ed.(Chicago: Appraisal Institute,2002). Midwest Valuation Co, LLC 6 -No I i 1. The time it takes an interest in real property to sell on the market sub- sequent to the date of an appraisal. • 2. Reasonable marketing time is an estimate of the amount of time it • might take to sell an interest in real property at its estimated market value during the period immediately after the effective date of the appraisal; the anticipated time required to expose the property to a • pool of prospective purchasers and to allow appropriate time for • negotiation, the exercise of due diligence, and the consummation of a sale at a price supportable by concurrent market conditions. Marketing time differs from exposure time, which is always presumed to precede the effective date of the appraisal. (Advisory Opinion 7 of the . Appraisal Standards Board of The Appraisal Foundation and Statement on Appraisal Standards No. 6, "Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions" address the determination of reasonable exposure and marketing time.) Exposure Time is defined as: • 1. The time a property remains on the market. 2. The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at • market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient • and reasonable time but also adequate, sufficient and reasonable effort. Exposure • time is different for various types of real estate and value ranges and under various market conditions. (Appraisal Standards Board of The Appraisal i Foundation, Statement on Appraisal Standards No. 6, 'Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions") Market value estimates imply that an adequate marketing effort and reasonable time for exposure occurred prior to the effective date of the appraisal. In the case i of disposition value, the time frame allowed for marketing the property rights is somewhat limited, but the marketing effort is orderly and adequate. With liquidation value, the time frame for marketing the property rights is so severely • limited that an adequate marketing program cannot be implemented. (The Report • of the Appraisal Institute Special Task Force on Value Definitions qualifies exposure time in terms of the three above-mentioned values.) See also marketing time. Gross Building Area (GBA) is the total floor area of a building, including below-grade space but excluding unenclosed areas, measured from the exterior of the walls. Gross building area for office buildings is computed by measuring to the outside finished • Midwest Valuation Co, LLC 7 • • • • • • surface of permanent outer building walls without any deductions. All enclosed floors of the building including basements, mechanical equipment floors,penthouses, and the like • are included in the measurement. Parking spaces and parking garages are excluded.3 • Rentable Area (RA) is the amount of space on which the rent is based; calculated according to local practice.3 • • Gross Leasable Area (GLA) the total floor area designed for the occupancy and • exclusive use of tenants, including basements and mezzanines, and measured from the center of interior partitioning to outside wall surfaces; the standard measure for • determining the size of shopping centers where rent is calculated based on the GLA • occupied. The area for which tenants pay rent. As Is Value • The value of specific ownership rights to an identified parcel of real estate as of the • effective date of the appraisal; relates to what physically exists and is legally permissible • and excludes all assumptions concerning hypothetical market conditions or possible rezoning.3 • • Stabilized Value • l. A value opinion that excludes from consideration any abnormal relationship between supply and demand such as is experienced in boom periods, when cost and sale price may exceed the long-term value, or during periods of depression, • when cost and sale price may fall short of long-term value. 2. A value opinion that excludes from consideration any transitory condition that • may cause excessive construction costs, e.g., a bonus or premium for material, the • abnormal inefficiency of labor, the cost of delay or an excessive sale price, e.g., a • premium paid due to a temporary shortage of supply.3 • In layman's terms, stabilized value is the prospective value of a property after • construction has been completed and market occupancy and cash flow have been achieved.4 • • • • • • • • • • • • • Midwest Valuation Co, LLC 8 • • • • • • • • • • Scope of Work According to the Uniform Standards of Professional Appraisal Practice, it is the • appraiser's responsibility to develop and report a scope of work that results in credible • results that are appropriate for the appraisal problem and intended user(s). Therefore, the appraiser must identify and consider: • • • the client and intended users; • • the intended use of the report; • the type and definition of value; • the effective date of value; • • assignment conditions; • • typical client expectations; and • typical appraisal work by peers for similar assignments. • • This appraisal is prepared for Mr./Ms. Ima Lender, -- Bank &Trust, Co.. The problem to • be solved is to estimate the 'as is'market value of the subject property. The intended use is for mortgage financing. This appraisal is intended for the use of client and property • owner. • SCOPE OF WORK Report Type: This is a Summary Report as defined by Uniform • Standards of Professional Appraisal Practice under Standards Rule 2-2(B). This format provides a summary of the appraisal process, subject and market data and valuation analyses. • • Property Identification: The subject has been identified by the legal description and the assessors'parcel number. • Inspection: A complete interior and exterior inspection of the • subject property has been made, and photographs taken. • Market Area and Analysis of A complete analysis of market conditions has been • Market Conditions: made. The appraiser maintains a comprehensive database for this market area and has reviewed the market for sales and listings relevant to this analysis. • Highest and Best Use Analysis: A complete as vacant and as improved highest and • best use analysis for the subject has been made. • Physically possible, legally permissible and financially i feasible uses were considered, and the maximally • productive use was concluded. • • Midwest Valuation Co, LLC 9 • • • • • • Valuation Analyses Cost Approach: A cost approach was applied as there is adequate data • to develop a land value and the depreciation accrued to • the improvements can be reasonably measured. • Sales Comparison Approach: A sales approach was applied as there is adequate data • to develop a value estimate and this approach reflects • market behavior for this property type. Income Approach: An income approach was not applied as the subject is • not an income producing property and there is adequate data to develop a value estimate with this • approach. Hypothetical Conditions: There are no hypothetical conditions for this appraisal. • Extraordinary Assumptions: This appraisal was performed under the extraordinary • assumption that the subject property was as of • December 31, 2010 in the condition as of the date of • the inspection date of February 5, 2011. • • • • • • • • • • • • • • • • • • • • • • Midwest Valuation Co, LLC 10 • • • ! ! • • • ! ! Regional Overview • ! Regional Map • • ! • . arre P.-ey ! r ping take P '. ark – ^ Brooklyn Park Mounoy V- '.;taU Vii,_,„ 65 as Wh.Ie Rear Be, ! ,Iry Aroen Hilly Shoreview Be cF%t White Bear Lake 61 Bry�Jlyn Vatlnan Bnchwootl Village • Ce.�ter New Brighton Mahto—i la He,Ghl> Gem Lake n -Iilllnp New a HO Pine spring•. 55 9 p Crystal 40hbinx:ale Neighly 5r Anlhpnv • Pl rm0011 c5 Roseville Lillie � Canada Norlh 5'.Paul st a6 Maplewood • t o 6n iauderdFe tt,•,c, Med�crne Lake Falcon ! Golden Height, Valle Minneapolis 9aa w,.yzata T wayvu a'°a Y L Oakdale Q 152 = • 169 7 Minnetonka Beach Woo"l", $t t0Ur5 Pa'k 1 Vtl 5t PdUI ntl Spar Park Minnetonka H . c • DeePhaven \^,q,aa.� Hopkins } Woad:; a • EG Tonka Bay Edina - -1 57 `y son Caroa*— Lilydale ` ei,. • The subject property is located within the City of Brooklyn Center lying south of • Interstate Highway 694 and east of Highway 100.The subject is part of an established commercial district containing auto service centers,office,and retail • shopping.A residential area lies south and east to the subject property. • • • • ! • ! 0 • Midwest Valuation Co, LLC 1 1 • • Brooklyn Center is a multi-culteral community with serving a variety of cultural interests. Of significant proportion is the Asian population. The subject property is currently operating to serve the Asian community. BROOKLY CENTER DEMOGRAPHIC COMPARISON TO OTHER COMMUNITIES o e "ftk Population ; 5,266,214 1,156,212 30,330 75,156 59,932 51,480 56377 Median Age - 35.4 35 35 27.6 35.3 40.2 33.5 Average 57318 51711 44570 42960 89864 83437 59219 Household Income Unemployment 6.7 4.9 9.2 8 1.9 2.3 7.5 6;te The above grade shows the demographic comparison between Brooklyn Center and other commities within the area as well as state and county statistics.The population of Brooklyn i Center is less than half of the population of some of its surrounding communities.The average household income is similar to Brooklyn Park, however,it deviates from Maple Grove and Minnetonka by almost half.The unemployment rate is almost four times the rate of Maple Grove and Minnetonka and almost 30% higher than the state of Minnesota. • Midwest Valuation Co, LLC 12 History of the Property The subject property was originally built in 1965 and was significantly remodeled in 2000. It was purchased by the current owner in 2003 for$475,000. Prior to it's purchase, it was used as an office for a mechanical engineering and drafting company. Steen • Engineering owned the property during this period since 1999. According to the property owner, they sold the building because they outgrew the space. • Since its purchase, the property has been used as an adult care facility. There have been few or no remodels since the purchase other than a kitchen addition. The subject property's target market is the Asian community. • Midwest Valuation Co, LLC 13 • • • • i Property Description • The bulding is built on a slab grade with exterior walls composed of brick over concrete block. • • SITE Location: The subject is located on the south side of Route, at the southwest region of the downtown commercial district. • Current Use of the Adult Services • Property: • Site Size: Total: .72 acres; 3,924 square feet Usable: .72 acres; 3,924 square fee • Shape: The site is irregular Frontage/Access: The subject property has good access with frontage as follows: Lilac Drive: Frontage • Visibility: Average • Topography: The subject has level topography at grade and no areas of • wetlands. Soil Conditions: The soil conditions observed at the subject appear to be typical of the region and adequate to support development. Utilities: Electricity: Public i Sewer: Public Sewer • Water: Public Water • Natural Gas: Public Gas Underground Utilities: UndergroundUtilities e Adequacy: Adequate • e Site Improvements: • StreetLights • • Sidewalk • CurbGutter • • Flood Zone: The subject is located in an area mapped by the Federal e Emergency Management Agency (FEMA). The subject is located in FEMA flood zone X, which is not classified as a • flood hazard area. • FEMA Map Number: 11-22-33 e • e Midwest Valuation Co, LLC 14 • • • • • • • FEMA Map Date: January 1, 1988 • • The subject is not in a flood zone. • Environmental Issues: There are no known environmental issues related to the subject • property. • Encumbrance/ None known • Easements: • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Midwest Valuation Co, LLC 15 • • • Flood Map Popq• Cfert Auras 5650 We Dr N Cig Brooklyn Cane► COI Slue MN TV Coe 554342867 Lmdw KadmAduk Day Service • • • • a Prepared for; InterFlood ,,nn I www r!Mfliye rrm• 1 Ff- ?S: FAV BrcokKn l_e-,e- PAI E=430 2:�U1>1 �s f ZC�I f ZOM _ x Fi er..nsr.naF • ZONE - I Koc I lazares I,ap . .— •I :ffrdive isle � "�pl•.m-n: 5711 • LON(,) — • ZONE 77- — i:mck:C�I eooLc4•ce �s:r.G?7f:Lerxrr,r sr.:� rox:,orx Ca•DCbtps.AI iyhu•ex-,s0.rr c'b F SK.'!2r7:anj b.rb.3•:..Gtt•:r ar_-i:cam:+: -e Ir•�.r.':f°o:c�,;�:e.ca1 • • • • • • • Site Plat Map • ticnnepm County Property Map Print Page I of I • • Hennepin County Property Map - Tax Year: 2010 . TTr bb[awatiM m.L Cr1Y a SwNM'1nrt�¢,rptrbvl N vdr rrC nrp M[mr,u�rti 6con[a, w o).ssk t�esdlw�)M�m,n,r u-T'Or'w•rre tt�rr w rye v/rrw.Tr primer nk rti:q,rn Iookaer W swl rr�nswrr w��n pss.rpeea 1M n,emYes�at ttv Vrer New M�r0 nr tiwr NKr sr ry Ynr,gF Car1t,epr ptt Iunrer,ti rarfry MrrWY1,rpn urtM+r���net r�r�elp h�prt wYr[�rtarp�trbl d tl•Mp,nrevl ar b rrNKr • f J, • � e � s`6 / V • _ Cp NC N•� !r • - - -- �� �'� iiTN 4YEy �. • JJJf 25Ci � • f �pFs 130'_ • • "IL \,x7 113 t1u nVp 130C 20:1 • fr � y t 43$ • - as A, to • - �U 2, .. - 1205 ___ _ — — J �E In • Il t •.__ `�}+' 5101 ' SC0[ 2' • Selected Parcel Data Date PMnted:2117/2011 13:56:12 PM • Parcel ID:02-II W 21-42-0032 Current Parcel Dab:2/4/2011 Owner Name:TONY YANG • Parcel Addros:5650 LILAC OR N.BROOKLYN CENTER.MN SS430 Property Type:COMMERCIAL-PREF SeM Price:$47S,000.00 • Homestead:NON-HOMESTEAD Safe Dab:10/2003 Area(Sgrt Cafe:31319 Soft Ca :WARRANT/DEED • Area acres):0.72 A-T-6:TORRENS • Market Total:$599,D00.00 Tax Total $22,725.94 • • • htqy.#gis.co.hennepin.mn.us/HCPropertyMapflocator.aspx 2!17/2011 • • • • Midwest Valuation Co, LLC 17 • • • IMPROVEMENTS DESCRIPTION Development/Property Kashia Adult Services Name: Property Type: Commercial • BUILDING SUMMARY Building Class: The subject property is predominantly improved office/retail • building. Construction: Brick and Concrete • Quality: Average. Year Built: 1965 Condition: The predominant condition is average. Areas, Ratios & Gross Building Area: 3,924 • Numbers: Gross Leasable Area: 3,924 • Rentable Area: 3,924 Building Efficiency Ratio Number of Units: 1 • Midwest Valuation Co, LLC 18 Building Description: One story brick building containing two restrooms, two • conference areas, a utility room, three offices, a kitchen, an entrance area, and a large open space activity area Construction: Steel and masonry • Construction Quality: ConstructionQuality Year Built: 1965 Renovations: 1999-2000 Effective Age: 26 years' • Remaining Useful Life: 52 Years Condition: Average • Appeal/Appearance: Average i Areas, Ratios & Number of Stories: One Numbers: Gross Building Area: 3,294 SF Gross Leasable Area: 3,294 SF Rentable Area: 3,294 SF Number of Units: 1 • FOUNDATION,FRAME &EXTERIOR-BUILDING 1 Foundation: Poured concrete slab • Basement/Sublevels: None Basement Use: NA • Exterior: Brick Windows: Windows Roof/Cover: Flat Service Access/ The building is served by entrance door to the front of the . Overhead Doors: building and an exit door to the rear. i • Midwest Valuation Co, LLC 19 • • • • • • INTERIOR- • Floor Cover: Carpet Walls: Carpet Ceilings & Ceiling Painted drywall • Height: • Lighting: Acoustic ceiling panels A mix of florescent and incandescent lighting. • • Restrooms Two Restrooms • MECHANICAL SYSTEMS • Heating: Forced Air • Cooling: AC • Electrical: Public/200 Amp CBP • Plumbing Condition: Average • • Elevators/Escalators: None PARKING Parking Type and Type: On site • Number of Spaces: Spaces: • Condition: Average • Parking: Approximately 38 • • PROPERTY ANALYSIS • Design & Functional Average Utility: • • Deferred Maintenance: None known • • • • • • • • • • Midwest Valuation Co, LLC 20 • • • • • • • • Americans With Disabilities Act • Please reference the Limiting Conditions and Assumptions section of this report. • Hazardous Substances • Please reference the Limiting Conditions and Assumptions section of this report. • • • • • • • • • • • • • • • • i • • • • • • • • • • • • • • • Midwest Valuation Co, LLC 21 • • i Improvements Plan i i • Floor Plan I� 19x IS 0 neck n Q 13X I l j 18.Sx 11 ,�F—'1 Ac-fi viTiES O 13X10 a >rms G lJl: p4EA 0 x� I' Q iii C? 1 Rerrmuo� o ;� Room IoXlO . I U�L. Exerciee Room • i 16X13 fZ S • M i Coate 01,actors p ISKIO M G Offtca Ul a 1 Fy 7X7sc i • NXeed orrice I5Xf0 ,� L, Q 7X7 MDS�Ck21CC�"� D�kJinry 3�ii/D,{ • • • • • Midwest Valuation Co, LLC 22 • • • • • ,i Subject Photographs • • • • a Adult Da Services Jo • j II+ • i • Subject Front • • • • • • i Subject/Front Side • • • i • • • • i Midwest Valuation Co, LLC 23 • • • • • • • • ! • ! • w y N' • 1 . • • I • I • • Subject Side i • • • • • • • • • Subject Street • • ! • • • • Midwest Valuation Co, LLC 24 • • • • • ! • • • • i • • • • • A w • Front Entrance • • • • ! • w • • i • • • Front Desk/Reception Area • • w • • Midwest Valuation Co, LLC 26 • • • • • • • �.v • • • • i Subject Office • i i • • • • • • • • • • Subject Activity Area • • • • • i Midwest Valuation Co, LLC 27 • • • • • • • • • • • • • • • • • • Subject Restroom i • • • • • • • • • • • i • • Subject Utility Room • • • • • • Midwest Valuation Co, LLC 28 • • • • • • • i • • • • • Subject Kitchen • • • • • e • • Subject Rear Exit Door • • • • • Midwest Valuation Co, LLC 29 • • • • • • • • • • 1 • • • • • • • • • • • • • • • w • • • • • • Subject Conference Room • • • • • Midwest Valuation Co, LLC 30 • • Assessment and Taxes REAL ESTATE ASSESSMENT AND TAXES . Taxing Authority Taxing Authority Assessment Year 2010 • ASSESSED VALUES • Tax Identification Number TaxID Land Assessed Value $255,000 Building Assessed Value $344,000 • Other Property Assessed Value 0 a Total Assessed Value $599,000 r r S Midwest Valuation Co, LLC 31 • • • • • printdetails.jsp Pagc I of 2 • • • Mohr Taxes Parable 2011(2010 Vilues)w1N be syslh8le on this web sole apprexlnlstefy 03101 • Parcel Data for Taxes Payable 2010 Property ID: 02-119-21-42-0072 Address: 5860 LILAC DR N • Municipality; BROOKLYN CENTER School Dkst: 286 Construction year:1965 • Watershed: 8 Approx.Parcel Sizet IRREGULAR Sewer Dist: • Owner Name: TONY YANG Taxpayer Name TONY YANG • B Address: 4108 146TH AVE HAM LAKE MN 55304 • Sale Information • Sales prices are reported as listed on the Certificate of Real Estate Value and are not warranted to represent arms-iength transactions. • sale Date: October,2003 Sale Price: $175,000 • Transaction Type: Warranty Deed • Tax Parcel Description • Addition Name: REG-LAND SURVEY NO,1114 Lot: ! Bk x*: Metes A Bounds: COM AT MOST WLY COR Of TRACT A TH • SELY TO MOST SLY CDR THOf TH NELY TO ANGLE PT IN SLY LINE THDF TH E TO • SE CDR THOF TM N TO SE COR Of R L S Netet This is a Partial Metes a Bounds Description. Too ocedwe h1R tax parcel description,email request to • taxdescription0co.hen nepi n.mn.u s Abstract or Torrens: TORRENS • Value and Tax Summary for Taxes Payable 2010 • Values Established by Assessor as of January 2,2009 Estimated Market Value: $599,000 • Taxable Market Value: $599,000 • Total Improvement Amount: Total Net Tax: $21,994.37 ! Total Special Assessments; $734.57 Solid Waste Fee: • Total Tax: $22,728.94 • Property Information Detail for Taxes Payable 2010 Values Established by Assessor as of January 2,2009 • Valuer Land Market $255,000 • Building Market :344,000 Machinery Market • Total Market: 5599,000 Qualifying Improvements • Veterans Exclusion Ctassificstionr, • Property Type C0004ElCAL • • htlp llx%,ww 16.co.hennepin.mn.us/pinstprinidetails.jsp'.Ipki--0211821420032 2/17/2011 • • • • ! Midwest Valuation Co, LLC 32 ! ! • • • • • • Zoning LAND USE CONTROLS • Zoning Code C-1 • • Zoning Description See report • Current Use Legally Conforming Current Use Legally Conforming • • Zoning Change Likely Unlikely • • • • • • ! • • • • • • • • • • • • • • • • • • • ! • • Midwest Valuation Co, LLC 33 • • • • • • • Highest and Best Use • • Highest and best use may be defined as: • the reasonably probable and legal use of vacant land or improved property, which is • physically possible, appropriately supported, financially feasible, and that results in • the highest value. • 1. Legally Permissible: What uses are permitted by zoning and other legal • restrictions? • • 2. Physically Possible: To what use is the site physically adaptable? • • 3. Financially Feasible: Which possible and permissible use will produce any net • return to the owner of the site? • 4. Maximally Productive. Among the feasible uses which use will produce the • highest net return, (i.e., the highest present worth)? • • HIGHEST AND BEST USE OF THE LAND AS IF VACANT • • The physical aspects of the site impose the first constraints on the possible uses of the property. Size, shape, soils, and topography are key determinants on possible uses. • The highest and best use of the subject site as if vacant is for commercial use such • as an adult daycare facility or professional office facility. This use would capitalize on • the Brooklyn Center commercial district location. Such a use would be complementary to • the urban fringe developing residential and commercial neighborhood. The commercial use would also conform to the zoning requirements of the City of Brooklyn Center. Neighboring properties include office buildings, auto service, retail stores, strip centers, • and other commercial properties. The property has excellent linkages to public transportation, and other commercial services. A search of the title was not completed • and this analysis assumes no private deed restrictions. • Public legal restrictions, or zoning requirements, place an additional set of constraints • on any future potential use. The subject parcel is zoned "C-1" by the City of Brooklyn • Center. Legal restrictions as they apply to the subject property consist of the public • restrictions of zoning and the private constraints of deed restrictions. • • • • • • Midwest Valuation Co, LLC 34 we • The first test involves a determination of what uses are legally permissible. Existing leases, deed restrictions,zoning,building codes and environmental regulations may all influence potential use. • The subject improved ownership is currentI N,used and managed for an adult daycare facility. Its zoning would legally permit normal use for an adult daycare facility or office use. Once the test of legally permissible uses is completed,the test of physically possible uses must be addressed. The size,topography and shape of the property must be considered. The subject's topography physically allows its use for an adult daycare facility or office use. After applying the first two tests in Highest and Best Use determination, potential uses that are not legally permissible or physically possible are eliminated form consideration. The potential uses that do satisfy the first two elements are then subjected to a third element of financially • feasible. Financial feasibility is a criteria that is analvzed to determine which uses are likely to produce an income, or return equal to or greater than the amount needed to satisfy operating expenses,financial obligations, and capital amortization. All uses that are expected to produce a positive return are regarded as financially feasible. The financial feasibility of the subject for use as an adult daycare facility or office use is supported by sale of similar properties. The fourth and final element involves determining which uses that have been determined to be legally permissible,physically possible and financially feasible,is maximally productive. The use produces the highest price or value consistent with the rate of return indicated by the market • is considered to be maximally productive. The use affords the highest economic return to this parcel as reflected in land values is adult daycare facility or office land. r In conclusion, the highest and best use of the subject site, as if vacant and available for development, is for commercial development to the limit of the zoning envelope, • consistent with the current improvements. This use would also conform to the neighborhood planning and zoning requirements of the City of Brooklyn Center. Determination of Highest and Best Use: Adult Da}•care Facility or Office Use. Midwest Valuation Co, LLC 35 • HIGHEST AND BEST USE OF THE LAND AS IMPROVED The Highest and Best Use (HBU) of a property is the reasonable and probable use that supports the highest present value, as defined, as of the effective date of the appraisal. i Alternatively, the use, from among reasonably probable and legal alternative uses, found to be physically possible, appropriately supported, financially feasible, that results in the highest land valueln estimating highest and best use,four tests are included in the • analysis: Highest and best use may be defined as: • The reasonably probable and legal use of vacant land and/or improve property, of which is physically possible, appropriately supported,financially feasible, and results in the highest value. • • Permissible Use: What uses are permitted by zoning and other legal restrictions? • Possible Use:To What use is the site physically adaptable? • Feasible Use: Which possible and permissible use will produce and net return to the owner of the site? • • Maximally Productive: among the feasible uses which use will produce the highest net return, (ie;the highest present worth)? Comparables were provided by the City of Brooklyn Center to suggest that the Highest and Best Use is that of a child care facility. Below is a grid which we have constructed to show the recent sales of the childcare facilities within the area and the adjustments made to each comparable to properly weigh individual attributes. One of the Comparables • provided by the City of Brooklyn Center was a relative sale. This sale was not considered in the overall value analysis. Additionally, the comparables include a sale of a property within close proximity to the subject property which is a daycare facility previously a church. This facility was converted to a daycare facility, thus making this comparable a • viable property to use for comparative purposes. Additional considerations for a childcare facility as Highest and Best Use were: • Additional expenses involved in converting the adult care facility to meet the standards and building requirements of a childcare center. These expenses range from $10-20 per square foot. • • Limited space of the subject property. Childcare centers within the area show a significantly large gross building area than the subject property • Lack of evidence of a marketable need for an additional childcare facility with i limited space within the subject area of Brooklyn Center. • Lack of land area for outside facilities for a childcare center such as fencing and playgrounds. • Midwest Valuation Co, LLC 36 Daycare Sales Comparison Adjustment Grid • Comparable Number Subject Sale 1 Sale 2 Sale 3 Sale 4 LOCATION arc Daycare �ce%HoHAMN 152(X) Was rna • Pl;i, 131vd Kashia Adult Care If ookk n I'.r- ItL ALil,lr(,I, Minnetonka SALEPRICE 51.(XX).M "NO.M) S77, GBA 7.098.0 11.5(100) 6.175.(X) ► 6."v.,r Sale Price per Unit! $98.62 $86.46 $93.93 $112.00 • PROPERTY RIGHFS CONVEYED Adjustment 0`7r $0.00 n'' $0.00 O9, $0.00 014 $0.00 . Adjusted Price per Unit $98.62 $86.46 $93.93 S112.00 FINANCING TERW Adjustment 0% S0.(X) 0%r S(),(X) 017b S0.(X) 0% • Adjusted Price per Unit $98.62 $86.46 $93.93 $112.00 CONDITIONS OF SALE Adjustment 0% SO,(X) 0%r SO.(X) 51.14 0% tiU.UU Adjusted Price per Unit $98.62 $86.46 $95.07 $112.00 DATEOFSALE 31-Dec-10 -4.(X)% Mar-10-4.(N)I, Mar-10 -4.(X)`% Jul-09 #### Dec-09 Adjustment -3% ($2.96) -3% ($2.59) -6% $0.29 -4% ($4.48) Ad'ustedPrice per Unit $95.66 $83.87 $95.36 $107.52 LOCATIONAL&PHYSICAL CHARACTERISTICS Established Coi Established Commercial)Est/Commercial/Abov Est/Commercial/Abo LOCATION/NEIGID Average Superior Superior Superior Adjustment Location $0.00 -6'1 ($5.03) -15`7, ($1.98) -1517 ($16.13) Interior Location.good il Intrri„i 101J6om/(K)id a (i)od Access (k)od Access/Fronta ACCESS&VISDIILac Frontage Rd Similar Similar Superior Similar Adjustment 017 $0.00 $0.00 017 $0.00 0`7 $0.00 • ZONING C-I R-3 Superior li-' Inferior 13 Similar Superior • Adjustment 6`4 $5.74 6'; $5.03 617 $0.00 6`7 $6.45 • SIZE 3,9240) 11,566SF 6175.00 Similar #### Inferior Adjustment 5(7 $4.78 7' $5.87 5`7, $0.00 5`7 $5.38 • Assumed Stable Condition/Age 1961/97,Average 1998/Average+ 1979,Average 1979,Average • Adjustment 1 017 $0.00 11`7 ($9.23) -89( $0.99 914 ($9.68) Assumed Stable Land Area/Land to Building Ratio 6.37 Acres,39.09 1.46 Acres,5.51 .83 Acres,5.83 .67 Acres,4.6 • Adjustment 1 $4.78 3'7 $2.52 217 $0.99 314 $3.23 • ADJUSTED SALES PRICEPER UNIT $110.96 $83.03 $95.36 $96.77 • Kashia Adult Care • Range of Adjusted S; $83.03 • to $96.77 • Concluded Value Per $9653 • SO Rounded To $97.00 • • Midwest Valuation Co, LLC 37 HIGHEST AND BEST USE OF THE LAND AS IMPROVED • Final analysis concludes that the Highest and Best Use of the land as improved is that of its current use, an adult daycare facility, or office/retail use. • Midwest Valuation Co, LLC 38 w Valuation Methodology Three basic approaches may be used to arrive at an estimate of market value. They are: 1. The Cost Approach • 2. The Income Approach 3. The Sales Comparison Approach Cost Approach • The Cost Approach is summarized as follows: Cost New - Depreciation • +Land Value i =Value Income Approach • The Income Approach converts the anticipated flow of future benefits (income) to a • present value estimate through a capitalization and or a discounting process. Sales Comparison Approach The Sales Comparison Approach compares sales of similar properties with the subject • property. Each comparable sale is adjusted for its inferior or superior characteristics. The values derived from the adjusted comparable sales form a range of value for the subject. By process of correlation and analysis, a final indicated value is derived. • Final Reconciliation • The appraisal process concludes with the Final Reconciliation of the values derived from the approaches applied for a single estimate of market value. Different properties require different means of analysis and lend themselves to one approach over the others. Analyses Applied S A cost analysis was considered and was developed because there is adequate data to develop a land value and the depreciation accrued to the improvements can be reasonably measured. A sales comparison analysis was considered and was developed because there is adequate data to develop a value estimate and this approach reflects market behavior for this property type. An income analysis was considered and was developed because the subject is an income producing property and there is adequate data to develop a value estimate with this S approach. • Midwest Valuation Co, LLC 39 Cost Approach The Cost Approach is based on the principle of substitution - that a prudent and rational person would pay no more for a property than the cost to construct a similar and competitive property, assuming no undue delay in the process. The Cost Approach tends • to set the upper limit of value before depreciation is considered. The applied process is as follows: • Estimate the land value according to its Highest and Best Use. We have used the • Sales Comparison Approach; the process is as follows: o Comparable sales, contracts for sale and current offerings are researched and documented. o Each comparable is analyzed and adjusted to equate with the subject property. i • o The value indication of each comparable is analyzed and the data reconciled for a land value indication. • Estimate the replacement cost of the building and site improvements. • • Estimate the physical, functional and/or external depreciation accrued to the improvements. • • Sum the depreciated value of the improvements with the value of the land for an indication of value. i Midwest Valuation Co, LLC 40 • • • • • • Sales Comparison Approach • The Sales Comparison Approach is based on the premise that a buyer would pay no more • for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership. It is based on the principles of supply and demand, balance, substitution and externalities. The following steps describe the applied process • of the Sales Comparison Approach. • 0 The market in which the subject property competes is investigated; comparable • sales, contracts for sale and current offerings are reviewed. • • The most pertinent data is further analyzed and the quality of the transaction is • determined. • • The most meaningful unit of value for the subject property is determined. • • • Each comparable sale is analyzed and where appropriate, adjusted to equate with • the subject property. • • The value indication of each comparable sale is analyzed and the data reconciled • for a final indication of value via the Sales Comparison Approach. • Comparables • We have researched four comparables for this analysis; these are documented on the • following pages followed by a location map and analysis grid. All sales have been researched through numerous sources, inspected and verified by a party to the • transaction. • • • • • • i • • i • • • • • Midwest Valuation Co, LLC 41 • • • • • • 58th Ave N "ec/ 0 • 0 C, 57th Ave IN • A,p. z 6,1,A-N cc" Z; 6',h Ave N od Bec— 56th Avery P3, E V • Sind Ave N Glen Haven 2 Z. 49th Ave N N49 Fairview Ave IN 1, all Va 47M Ave IN "C' 81 :1 • t 102 P"'k 152 Z • 6 z 4LO•A-N 9 45th Ave N 44th Ave N 44th Ave N • • 0 The above map depicts the subject property in relationship to the locational attributes of the comparables used in the analysis. • • • • • • • • • • • • • • • • • • • Midwest Valuation Co, LLC 42 • • S Comparable One PID: 0411821310007 Site Information Information Sources: Hennepin County Records • Site Size: .39 Acres • Site Topography: Flat Access: Average Utilities: Public Site Improvements: Office Building • Easements: None known FWansaction Data Address: 5618 56` Avenue North Sale Date: 04/2009 City: Crystal Sale Price: $235,000 State: MN GBA Unit Price: $123.81 • Tax ID: 0411821310007 Transaction Type: Fee Simple Buyer: DE Investments LLC (Mike McAlpin) Financing: Conventional Seller: Irene Gleason Property Rights: Fee Simple Site Acres: .39 Acres Terrain: Flat Land SF: 17,039 SF Use: Multi-Tenant Office Flood Zone: No Shape: Rectangular Encumbrance/Easements: None known Utilities: Public Zoning: Cl Improvements and Financial Data GBA: 1,898 SF Land to Building Ratio: Rentable Area: 1,898 • No of Units: 1 Year Built: 1950 Condition: Average Parking: 68 Estimate • Midwest Valuation Co, LLC 43 • • • • • • Comparable Two PID: 2911921120032 • • • • • Y A. a x S Site Information • Information Sources: Hennepin County Records • Site Size: .33 Acres • Site Topography: Flat Access: Average • Utilities: Public Site Improvements: Office • Easements: None known Transaction Data Address: 7827 Brooklyn Blvd Sale Date: 10/12/2009 • City: Brooklyn Park Sale Price: $210,000 • State: MN GBA Unit Price: $62.80 • Tax ID: 2911921120032 Transaction Type: Fee Simple S Buyer: Asian Chiropractic. Inc (2/3); Luke Adam (1/3) Financing: Conventional Seller: Gulf Coast Bank&Trust Property Rights: Fee Simple • Site • Acres: .33 Acres Terrain: Flat • Land SF: 14,325 SF Use: Childcare Center • Flood Zone: No Shape: Rectangular Encumbrance/Easements: None known •� Utilities: Public Zoning: B3 • • • • Midwest Valuation Co, LLC 44 • • • • • • • • Improvements and Financial DataGBA: 3344 SF • Land to Building Ratio: • No of Units: 4.28 Year Built: 1966 Parking: 48 • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Midwest Valuation Co, LLC 45 • • • • • • • Comparable Three PID: 2711921330090 • • • • • • • • • • Site Information Information Sources: Hennepin County Records • Site Size: 1.92 Acres +� Site Topography: Flat Access: Average Utilities: Public • Site Improvements: Office Building • Easements: None known Transaction Data Address: 7062 Brooklyn Blvd Sale Date: 12/31/2008 • City: Brooklyn Center Sale Price: $178,000 State: MN GBA Unit Price: $92.71 Tax ID: 2711921330090 Transaction Type: Conventional • Seller: CBS Construction Services, Inc Financing: Conventional • Buyer: Jayco I, LLC Property Rights: Fee Simple Site • Acres: 1.29 Terrain: Flat Land SF: 55,594 SF Use: Office Flood Zone: No Shape: Rectangular Encumbrance/Easements: None known • Utilities: Public Zoning: C1 Improvements and Financial Data • GBA: 1920 SF Land to Building Ratio: Rentable Area: 1920 No of Units: 1 Year Built: 1965 Condition: Class B Parking: 6 Estimate • • Midwest Valuation Co, LLC 46 • • • • • Comparable Four • PID: 3011921340002 i • • • • • Site Information Information Sources: Hennepin County Records Site Size: 1.15 Acres • Site Topography: Flat Access: Average Utilities: Public Site Improvements: Office Building • Easements: None known • Transaction Data • Address: 7000 Northland Drive Sale Date: 11/30/2010 City: Brooklyn Park Sale Price: $340,000 • State: MN GBA Unit Price: $112.96 Tax ID: 3011921340002 Transaction Type: • Buyer: Postma, LLC Financing: Conventional • Seller: Rush Creek Meadows, LLC Property Rights: Fee Simple Site Acres: 1.15 Terrain: Flat • Land SF: 49,981 SF Use: Office • Flood Zone: No Shape: Rectangular • Encumbrance/Easements: None known Utilities: Public Zoning: B • Improvements and Financial Data • GBA: 3010 SF Land to Building Ratio: 16.16 • Rentable Area: 3010 • No of Units: 1 Year Built: 1955 • Condition: Class B Parking: 30 Estimate • • Midwest Valuation Co, LLC 47 • • • • • • • • Analysis Grid • The above sales have been analyzed and compared with the subject property. We have • considered adjustments in the areas of: • • Property Rights Sold • Market Trends • • Financing • Location • • Conditions of Sale • Physical Characteristics • On the following page is a sales comparison grid displaying the subject property, the • comparables and the adjustments applied. • Comparable Sale Adjustments • • • • • i • • • • • • • • • • • • • • • • • • • • • • Midwest Valuation Co, LLC 48 • • • Comparable Sale Adjustment Grid • Comparable Number Subject Sale I Sale 2 Sale 3 Sale 4 LOCATION Office Office Office IS�rqh 7827Broukhn 106,[if 7M)Northland rnue\onh Bbd Ori" • Kashia Adult Care ('n IA Bruukl)it Park Noukh n l cnu i Brooklyn Park SALEPRICE S2351xx S210.(Nx) 517- $340.000 GBA LS68.I :.144(01 17PU.�.AI 3.010.00 Sale Price per Unit $123.81 $62.80 $92.71 $112.00 • PROPERTY RIGHTS CONVEYM Per Usable SF Adjustment $0.00 $0.00 $0.0D $0.00 • Adjusted Price per Unit $123.81 $62.80 $92.71 $112.00 FINANCING TERNS Adjustment 0% 0% $0.(R) 0% 5).0 Adjusted Price per Unit $C3_s l >62.8U $92.71 $112.00 • CONDITIONS OF SALE Adjustment 07 110(X) 0% $0.00 0% Adjusted Price per Unit $12't ,1 $62.80 $92.71 till'ixi DATEOFSALE 3'I Dec 10 -a.(X)'; \I" kt tx) 4(N)/ Iko08 Adjustment -7k ($8.671 ($3.14) 8 ($7.42) SI_I_'t Adjusted Price per Unit 5115.1-i $59.66 $85.29 $110.88 • LOCATIONAL&PHYSICAL CHARACTERISTICS • Neighborhood/Conu»erc Fstahlished Commercial Aret Established Commercial A Established Commercial LOCATION/NEIGHBORHO A,enwe Inferior Similar Similar Similar Ad•ustment Il�cation I'.; $3.45 $0.00 01I $0.00 (Y $0.00 Interior location Ili,•hrnt Intciim kx,vion.,_ooJ i till Again Roads Off Road Off Road • ACCESS&VSMILITY l.iloc I runta_•e Rd Similar Similar Similar Similar Adjustment $0.00 $0.00 01/1 $0.00 O`4 $0.00 • ZONING Similar B + Inferior CI Similar B Inferior Adjustment $0.00 $3.58 01/1 $0.00 ("'e $6.65 SIZE 3.`24)x 1868.00 Superior 3314.00 Superior 1920.00 Superior 3010.00 Superior Adjustment -317 ($3.45) 1', ($0.60) is ($2.56) 14 ($1.11) • Condition/Age A,ela,•r 1950.Average 1966/Average 1065/Avemge+ 1955/1air Adjustment ()'ri $0.00 $0.00 ($2.56) $3.33 . 1..unx•d Stator. Land Area/Land toBuilding: 7'_Acrc. .39 Acres .33/4.28 1.29/ 1.15 Ac,16.16 Adjustment ($2.30) ($1.19) $1.71 2111, $2.22 • ADJUSTED SALES PRICE-PER UNIT $112.84 $61.45 $81.88 $121.97 Kashia Adult Care Range of Adjusted Sale Price $4.33 to $121.97 • Concluded Value Per Square $101.00 Rounded To $1(11.(1(1 • • • • • • • • • Midwest Valuation Co, LLC 49 Sales Comparison Approach Conclusion The adjusted values of the comparable properties range from $61.45 to$121.97; the average is $99.00. All of the value indications have been considered, and in the final i analysis, comparables<#>, <#> and<#>, have been given most weight in arriving at our final reconciled per square foot value of$101.00. As Is Market Value • Indicated Value per Square Foot: $101.00 i Subject Size: 3,924 SF Indicated Value: $396,324 Rounded: $396,000 i Three Hundred Ninety Six Thousand Dollars • Midwest Valuation Co, LLC 50 • • • s • • Final Reconciliation • The process of reconciliation involves the analysis of each approach to value. The quality • of data applied, the significance of each approach as it relates to market behavior and defensibility of each approach are considered and weighed. Finally, each is considered • separately and comparatively with each other. • Value Indications i Land Value: • Cost Approach: NA Sales Comparison Approach: $396,000 • Income Approach: NA • • • Cost Approach • Due to the age of the subject property, the Cost Approach is not applicable • Sales Comparison Approach • • The Sales Comparison Approach was given the most weight. Income Approach • The Income Approach was not deemed applicable because this is not an income • producing property. i Value Conclusion • Based on the data and analyses developed in this appraisal, we have reconciled to the • following value conclusion, as of February 5, 2011, subject to the Limiting Conditions and Assumptions of this appraisal. i Reconciled Value(s): Premise: As Is • Interest: Fee Simple • Value Conclusion: 396,000 • i The Fee Simple value of the subject property as of December 31, 2010 • is: • $396,000 Three Hundred Ninety Six Thousand Dollars • • • i Midwest Valuation Co, LLC 51 • • i Certification Statement • We certify that, to the best of our knowledge and belief: • The statements of fact contained in this report are true and correct. i • The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, unbiased professional • analyses, opinions and conclusions. • We have no present or contemplated future interest in the property that is the subject • of this report, and have no personal interest or bias with respect to the parties • involved. • Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. • Our analyses, opinions, and conclusions were developed and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice • (USPAP). • We have made a personal inspection of the property that is the subject of this report. • No one outside of the signatories below provided significant professional assistance in the development of the conclusions contained in this report. r We certify sufficient competence to appraise this property through education and experience, in addition to the internal resources of the appraisal firm. • The value conclusion(s) and other opinions expressed herein are not based on a • requested minimum value, a specific value or approval of a loan. • Kari Jacobson has made an inspection of the subject property. Kari Jacobson Certified General Real Property Appraiser Midwest Valuation Co, LLC 53 s U 0 U c 0 .� :� f a� 3 �_ • • • • • • Limiting Conditions and Assumptions Acceptance of and/or use of this report constitutes acceptance of the following limiting • conditions and assumptions; these can only be modified by written documents executed by both parties. • • This appraisal is.to be used only for the purpose stated herein. While distribution of this appraisal in its entirety is at the discretion of the client, individual sections shall not be distributed; this report is intended to be used in whole and not in part. • • No part of this appraisal, its value estimates or the identity of the firm or the appraiser(s) may be communicated to the public through advertising, public relations, media sales, or other media. • All files, work papers and documents developed in connection with this assignment are • the property of Midwest Valuation Co, LLC. Information, estimates and opinions are verified where possible, but cannot be guaranteed. Plans provided are intended to assist the client in visualizing the property; no other use of these plans is intended or permitted. • No hidden or unapparent conditions of the property, subsoil or structure, which would • make the property more or less valuable, were discovered by the appraiser(s)or made • known to the appraiser(s). No responsibility is assumed for such conditions or • engineering necessary to discover them. Unless otherwise stated, this appraisal assumes there is no existence of hazardous materials or conditions, in any form, on or near the • subject property. • Unless otherwise state in this report, the existence of hazardous substances, including without limitation asbestos,polychlorinated biphenyl, petroleum leakage, or agricultural • chemicals, which may or may not be present on the property, was not called to the attention of the appraiser nor did the appraiser become aware of such during the • appraiser's inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however, is not qualified to • test for such substances. The presence of such hazardous substances may affect the value • of the property. The value opinion developed herein is predicated on the assumption that • no such hazardous substances exist on or in the property or in such proximity thereto, which would cause a loss in value. No responsibility is assumed for any such hazardous substances, nor for any expertise or knowledge required to discover them. • Unless stated herein,the property is assumed to be outside of areas where flood hazard • insurance is mandatory. Maps used by public and private agencies to determine these areas are limited with respect to accuracy. Due diligence has been exercised in • interpreting these maps, but no responsibility is assumed for misinterpretation. Good title, free of liens, encumbrances and special assessments is assumed. No responsibility is assumed for matters of a legal nature. • • • • Midwest Valuation Co, LLC 55 • • • Necessary licenses, permits, consents, legislative or administrative authority from any local, state or Federal government or private entity are assumed to be in place or reasonably obtainable. It is assumed there are no zoning violations, encroachments, easements or other restrictions which would affect the subject property, unless otherwise stated. • The appraiser(s) are not required to give testimony in Court in connection with this w appraisal. If the appraisers are subpoenaed pursuant to a court order, the client agrees to pay the appraiser(s) Appraisal Co. Valuation & Consulting's regular per diem rate plus expenses. Appraisals are based on the data available at the time the assignment is completed. Amendments/modifications to appraisals based on new information made available after the appraisal was completed will be made, as soon as reasonably possible, for an additional fee. Americans with Disabilities Act(ADA) of 1990 A civil rights act passed by Congress guaranteeing individuals with disabilities equal opportunity in public accommodations,employment, transportation, government services, and telecommunications. Statutory deadlines become effective on various dates between 1990 and 1997. Appraisal Co. Valuation &Consulting has not made a determination regarding the subject's ADA compliance or non-compliance. Non- compliance could have a negative impact on value,however this has not been • considered or analyzed in this appraisal. • Midwest Valuation Co, LLC 56 Engagement Letter • Midwest Valuation Co,LLC • Maple Grove,MN 55311 • 612.306.27 13 midwestval uationco @ gmail.com �+_�+�_mi�h�_c.t�ainaicnco.rum • February 4.2011 • Subject: • Adult Care Facility • 5650 Lilac Drive Brooklyn Center,MN • PID:02-118-21-42-0032 Dear Tony Yang, • This is to confirm our assignment to appraise the above referenced properties located in Brooklyn Center,Minnesota.Your credit union requires a Summary Appraisal format to he completed on the above referenced properties. • Tony Yang is my client for this assignment.The appraisal report and the invoice for payment of the appraisal fee are to be addressed to: Midwest Valuation Co.LLC • PO Box • Maple Grove,MN 55311 • A down payment of$1,100 is to he made upon commencement of the report.Total charges for the report shall range from$2200-2600.A final payment is to be made before • delivery of the final report. • In addition,any modifications,and letters of enhancement,etc.requested by your company after review of this appraisal report must be completed and returned to Midwest • Valuation Co,LLC within nine calendar days. • The purpose of this appraisal is to provide a supported opinion of the"As Is Market Value"of the real estate as of the date of the appraisal inspection,in accordance with • Title XI(FIRREA)and confirming to the Uniform Standards of Professional Appraisal Practice.The effective date of the"As Is"value conclusion should be as close to the • delivery date as possible to be used for tax and assessment deliberations.The following value is requested: • • • Midwest Valuation Co, LLC 57 • • • • • • ! Market Value Fee Simple Interest for Legal parcel retained with this property. ! A copy of this letter and any other written instructions from your company will be • included in the appraisal analysis. • Your appraisal will state our supported opinion of Market Value and will state a reasonable marketing and absorption period at the indicated value,with market ! documentation.This appraisal will specifically discuss the Competency Provision and Exposure Time,in addition to Marketing Time. Should the scope of work be more limited,the exceptions will be identified in the appraisal cover letter.This certification of the appraisal must state the appraisal • assignment is not based on a minimum value,a specific value,or approval of a loan.This assignment will state that our knowledge and experience to compete this appraisal • assignment and that Midwest Valuation Co,LLC has not been sued by a regulatory agency or financial institution for fraud or negligence involving an appraisal report. Midwest Valuation is not an expert on the existence of hazardous waste.This appraisal • assignment will not include this information concerning apparent contamination.If physical signs are evident,a notation of such will be incorporated in the letter of • transmittal. ! If this letter represents your understand of our discussion and you agree to engage Midwest Valuation for the above reference appraisal report,please sign a copy of this ! letter and promptly return to Midwest Valuation Co,LLC at the address below or a mail a scanned copy to the a mail address listed below. • Sincerely, ! Kari Jacobson Tony Yang ! Certified General Real Property Appraiser 5650 Lilac Drive President Brooklyn Center,MN ! Midwest Valuation Co,LLC Maple Grove,MN 55744 ! 612.306.2713 midwestvaluationco@gmail.com ! www.midx�csiN aluationco.com ! ! • • ! ! • ! ! ! ! ! Midwest Valuation Co, LLC 58 • ! a\ OLIT mission is to provide an enviromnent in which all that occurs is directed toward impovinp,the qualm ,f' accomplish this bt treating e%ery participant a/ with the hightest levcl of dignitN and respect.We Pledge to deliver the hest adult care program to communities with structured activites, nurtuing relationship U nrnfessional care tur mind and spirit O U a 0 a; rD o ervices e?l, offer the following scivlccs: (� We provide needed support for elderly Transportation and adult with mental impairment Transportation will bc 1—v,d-1 t, Itc t— i,.,; Kev not qah tyoh zoo l through supervised and structured require it.Client will be picked up in the morning •Pab coj mus hoo. programs in a group setting for and dropped off in the afternoon by our van daily. T Pab coj nqa tshua; senior citizens to be engaged in social, r Pali ntsuas mob recreational and rehabilitative Health Care •Qhia txog kev not tshu.n activities while they retain their V Assistance with Personal Care ♦Assistancr with Medications Exercise individual and community living.The ♦Monthly Health Monit,tring •Peb Muaj exercise txhua haul- objective is to maintain each client's ♦Individual Care Plan •Pelt nnnj tihuah rail cov ua ho Functional abilities for as long as ♦Health and Wellness Education rxer,-ice thigh possible.thereby avoiding premature institutionalization in more intensive Exercise Kev noj haus are facilities. Tail, bxei P-gram •Peb muej Rauh no,loo V kxerrtse Equipment on Sue fur All dawn no;sus txhua hnub Pair is'pants to t�til¢e •Pch Muaj khoom rail sawv daws ncauj thaum sawv ntxov thaib tav%i s dua Nutrition •Peb moat del thiab kasfes rao<;,,wv daws ♦Daily Nutritious Lout It haul tag ltnub VAM&PM Snacks Kev ua tit i Social Activities •Iji"�" r t'amcs ♦L.asvoos ♦Social It:wre V Sail,movies ' ♦Monthly HvId Trip u,Via—,ni lutri.- ♦Bats kwv txhiaj the Arc;i ♦Tsodagis(,luag . ♦Tin pool •Cmcet Speakers r t V:i%kl •"f ee :oj mus xy uas ill. e hli,ib zau,_ Other Services:Services such as interpiretation and 1•t`t transportation to conduct personal activities in, V I ai,tx6ai,lit, available upon req,"'.0 •I'ab sail,ntaub ntawv YOG NE)LEE)"T'WG\It �I ;XAYTItAINOIII'k • LICENSE STATE OF MINNESOTA JACOBSON,KARI D PO BOX 73 • GRAND RAPIDS,MN 55744 Department Of Commerce • The Undersigned COMMISSIONER OF COMMERCE for the State of Minnesota hereby certifies that • KARIDJACOBSON • • PO BOX 73 GRAND RAPIDS,MN 55744 . has complied with the laws of the State of Minnesota and is hereby licensed to transact the business of • Resident Appraiser:Certified General • License Number:20345057 unless this authority is suspended,revoked,or otherwise legally terminated This license shall be in effect • until August 31,2011. • IN TESTIMONY WHEREOF,I have hereunto set my hand this October 13,2009. COMMISSIONER OF COMMERCE Continuing Education: Minnesota Department of Commerce CE Requirement Type CE Required Hours Licensing Division 85 7th Place East,Suite 500 Total-Appraiser 30 • St.Paul,MN 55101-3165 USPAP 7 Telephone:(651)296-6319 Email:licensing.commerce@state.mn.us Website:commerce.state.mri • Notes: • Continuing Education:15 hours is required in the first renewal period,which includes a 7 hour USPAP course.30 hours is required for each subsequent renewal period,which includes a 7 hour USPAP course. Appraisers:You must hold a licensed Residential,Certified Residential,or Certified General qualification in order to • perform appraisals for federally-related transactions Trainees do not qualify.For further details,please visit our website at commerce.slate.mn.us. • • • • • • • Midwest Valuation Co, LLC 61 9816 Palm St.. LLC / 6300 France Ave N. Mr. Derek Lanz as a representative for 9816 Palm St LLC contacted the Assessor's office ' February 22 " 2011 regarding the 2011 estimated market value of $143,300 on the rental property at 6300 France Ave. A review of the property was completed on March 11 t h, 2011 with an appraiser from the Assessor's office. 9816 Palm St. LLC is requesting an estimated market ' value of $125,000. The property was assumed during the last quintile review. After reflecting the characteristic changes the property has an estimated market value of $139,900. Mr. Lanz, provided the 2010 income and expenses documentation, however due to the confidential nature of the information, ' it was reviewed by the Assessor's office, but not included in this report. A market based income approach indicated a value of $146,000 for a 1,000 sq. ft. standard three bedroom home in ' Brooklyn Center. The sales comparables provided by the assessor's office indicate a range of sale prices from $171,000 to $173,500. These comparables indicated a price per square foot range of $109 - $122. Mr. Wade Klick, 9816 Palm St LLC provided a market analysis comparing this property to three sales of properties in Brooklyn Center. The sale price per square foot on each of these three transactions ranges from $98 - $119. The subject property had a price per square foot of $95 for the 2011 estimated market value. It is the assessor's recommendation to reduce the 2011 estimated market value of $143,300 to ' $139,900 for taxes payable in 2012, as indicated by physical review, and sales comparables. ' • Owner(s) statement of estimated market value or classification and presentation of factual information regarding the property. ' Questions addressed to the owner regarding the market value or classification. • Assessors statement of value or classification and presentation of factual ' information regarding the property. Questions addressed to the Assessor. • Action by the Local Board of Appeal and Equalization Local Board of Appeal will select one of the following: Make no change and sustain the 2011 estimated market value or classification. Reduce the 2011 estimated market value. 1 T City of Brooklyn Center A Millennium Community TO: 2011 Brooklyn Center Local Board of Appeal and Equalization ' RE: 9816 Palm St LLC 6300 France Ave N Brooklyn Center, MN 55429 Mr. Derek Lanz as a representative for 9816 Palm St LLC contacted the Assessor's office February 22 2011 regarding the 2011 estimated market value of $143,300 on the rental property at 6300 France Ave. A review of the property was completed on March l l 2011 with an appraiser from the Assessor's office. ' The property is a 1,502 sq. ft. rambler with a two car detached garage in average condition. The garage is accessed via 63 Ave, giving this property a through street ' influence. The main level includes a living, dining, kitchen, family room, three bedrooms, one full bathroom and a fireplace. The basement finished area includes one family room and two additional finished rooms, but no bedrooms. The property has a gas ' forced air furnace, replaced in 2009, and central air conditioning. After reviewing the property, changes were made in physical characteristics to the condition of the basement finish and bathroom. The property was assumed during the last quintile review. After ' reflecting the characteristic changes the property has an estimated market value of $139,900. Mr. Wade Klick, 9816 Palm St LLC, was contacted March 14 2011 with an offer to reduce his 2011 estimated market value to $139,900 for this property. He declined this offer and indicated his intention to appear before the Local Board of Appeal and Equalization. ' Mr. Lanz, was requested to provide a copy of the 2010 income and expense documentation for the subject property as he had indicated that the property was currently rental. The information was provided however due to the confidential nature of the ' information, it was reviewed by the Assessor's office, but not included in this report. An income approach to valuation was included in this report using market rents. The indicated market rent used was at the higher end of the rental scale for a three bedroom unit to account for the two stall garage, large square footage, and useable finished basement area. The market based income approach indicated a value of $146,000 for a 1,000 sq. ft. standard three bedroom home in Brooklyn Center. Specific rental data was ' not available for a larger than average single family home. The enclosed sales comparables completed by the Assessor's office compares the subject ' property to three similar sized homes in Brooklyn Center. The subject property and all three comparables are larger than the average 1,000 square foot Brooklyn Center property. These comparables sold within a price per square foot range of $109 - $122. Comparable one shares a similar through street influence and is considered to be the most comparable to the subject property. The enclosed sales comparables indicate a range of sale prices from $171,000 to $173,500. ' 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 ' FAX (763) 569 -3494 www.cityofbrooklyncenter. org _ Mr. Wade Klick, 9816 Palm St LLC provided a market analysis comparing this property 1 to three sales of properties in Brooklyn Center. These sales comparables have been included as part of this report. None of the three sold properties exceeds 1,100 square feet. Two of these sales were considered not open market by Hennepin County. The sale 1 price per square foot on each of these three transactions ranges from $98 - $119. The subject property had a price per square foot of $95 for the 2011 estimated market value, below the provided sales comparable range. It is the assessors recommendation to reduce the 2011 estimated market value of $143,300 to $139,900 for taxes payable in 2012, as indicated by physical review, and ' sales comparables. Respectfully submitted, 1 1 Nancy Wojcik, SAMA City Assessor 1 i 1 1 1 i 1 1 ' City of BROOKLYN ' CENTER 2011 Local Board of Appeal and Equalization #3 ' 9816 Palm St LLC 6300 France Ave N ' 34- 119 -21 -42 -0008 W s 'y: { de � t s� ' 2011 Assessed Value: $143 Recommendation: Reduce 2011 EMV from $143,300 to ' $139,900 This report is not an appraisal as defined in M.S. § 82B.02 (subd.3) nor does it comply with the Uniform Standards of ' Professional Appraisal Practice. It is intended to be used as a reference only and any use other than its intended use is prohibited and unlam f 1. The author does not represent this to be an appraisal and is not responsible for any inappropriate use. It is a report ofpublic records using a mass appraisal technique. ' City of Brooklyn Center Assessing Department 2011 Local Board of Appeal and Equalization 3r Staff Report #3 Property Owner(s): 9816 Palm St LLC Property Address: 6300 France Ave N PID #: 34- 119 -21 -42 -0008 Market Value ' Assessment Year 2011 $143,300 Assessment Year 2010 $145,900 Assessment Year 2009 $168,100 ' Sale: Auust 1, 2004 - 185,000 (10 - Trustee Deed) Comments: Subject property is a 1,502 square foot rambler with 3 bedrooms and both a full and a half bath. It is located on France Ave, but its garage is accessed via 63rd Ave, giving it a through street ' influence. Property is rental in generally average condition. Interior kitchen updates, and an attached single garage conversion were constructed presumably in the 70s, creating a main level family room. The main level includes a living, dining, kitchen, family room with fireplace, 3 ' bedrooms and a full ceramic tile bath. The basement finish is paneling and both sprayed and suspended ceiling, both down in places, and floor tile. The basement finish includes a family room, two other finished rooms, and a half bath. This home has its original exterior and ' windows that show some deferred maintenance. The furnace was replaced in December 2009. Assessor Recommendation: Reduce 2011 FNIV from S 143,300 to S 139,900 Appraiser: Last Inspection Date: Jill Brenna March 11, 2011 2011 Board of Appeal and Equalization 2 #, ' Subject Data Summary ' PID #: 34- 119 -21 -42 -0008 Property Address: 6300 France Ave N Brooklyn Center, MN 55429 Multiple Address: No LotBlock: 006/002 Addition: Fair Meadows Legal(120): Owner(s): 9816 Palm St LLC Property Classification: Residential - Non - Homestead ' 2011 EMV: 143,300 2010 EMV: 145,900 2009 EMV: 168,100 ' Last Sale: 8/1/2004 - 185,000 - Trustee Deed - 10 Lot Size: 10,304 Sq.Ft. /.24 Acres Zoning: Rl Dwelling Type: Single Family ' Style: One Level./Rambler Bedrooms: 3 Baths: 2 Actual Year Built: 1956 Gross Building Area: 1,502 Basement Area: 1,250 Bsmt Finished %: 60 Garage #1: 2 Car Detached Garage 92: None 2011 Board of Appeal and Equalization 3 #3 ' Additional Subject Photos ,$fig ° y n t Front i i I 1 ' Front Entry ' 2011 Board of Appeal and Equalization 4 #3 ' Additional Subject Photos N 1 Rear view i 3 Es 1 ' Kitchen 2011 Board of Appeal and Equalization 5 #3 I Additional Subject Photos Main bathroom I I i I 1 ' Basement finished room 2011 Board of Appeal and Equalization 6 #3 ' Additional Subject Photos 1 Basement bathroom �t 1 µir I } N A �" fi r•° d ' Basement finished room 2 1 2011 Board of Appeal and Equalization 7 #3 Additional Subject Photos . ti . 711 )Ill I3��.unu�t fur ly roe r 6 ' Basement laundry room 2011 Board of Appeal and E,ualization 8 #3 1 ' Additional Subject Photos e Basement unfinished area 1 1 2011 Board of Appeal and Equalization 9 #3 e ' Subject Sketch ,I t " 14 M h ]E' iI Basement 1I50' 1 ,I 20' 14' IC' }� Ganee 440 First Floor 1507 10' 12 SketcA by Apex N'"' I 1 2011 Board of Appeal and Equalization 10 #3 s 1 � ` 1 :r a. N `S.t t .. li ' Sales Comparables Item Subject Comparable 1 Comparable Comparable � 7 ' PID 3411921420008 3411921410034 3411921410035 2511921330065 Address 6300 France Ave N 6325 Xerxes Ave N 3007 64th Ave N 7001 Fremont Ave N District Sale Price $185,000 $172,500 $173,500 $171,000 ' Sale Date 08/01/2004 03/0942010 07/16/2010 05/28/2010 Cash Equivalent $167,325 Price Per Sq. Ft. $123.17 $108.94 $114.67 $122.14 Dwelling Type Single Family Single Family Single Family Single Family ' Style One Level/Rambler One Level/Rambler One Level/Rambler One Level /Rambler Property Area 10,304 10,044 10,332 12,021 Actual Age 1956 1959 1959 1964 Effective Age 1980 1985 1985 1980 Quality Class B05 B05 B05 B05 Ist Floor Area 1,502 1,536 1,513 1,400 Total GBA 1,502 1,536 1,513 1,400 Finished Area 2,252 2,481 2,463 2,583 Basement Area 1,250 1,050 1,056 1,392 ' Basement Finished ( %) 60% 90% 90% 85% Total Bedrooms 3 5 5 4 Total Bathrooms 2 2 3 2 Garage 1 Floor Area 440 400 576 528 Garage 1# of Cars 2 2 2 2 Garage 1 Placement Detached Detached Detached Detached Total # of Cars 2 2 2 2 Walkout Type ' Air Conditioning Central Central Central Central Pool Area -Total Fireplaces 1 1 1 1 Deck Area -Total ' Porches River Lake Influences Thru Street Thru Street Apartment I 1 2011 Board of Appeal and Equalization 12 73 i t71lNh4AiV rmn < ( Pafk Patmcr Lake a e� Environmental z Meadoov*=d Ur N 74tt+AF Arcs t ltit 71thM 73rd Ave N !r i 73rd Ava N Wopy4 ' West j 4�kttit�ncLn 1 13 palmcr ast I x �? I A ve V E z N S' I •. X z 4 Lake Palmer , �' e 71*1A%e {; g 1 ' Park take a Z a n y Amy 7 rtr s i Park Q 5 ,, o p::1 rillow 70t1 AYe N me Z � z - � King Ln N Ark ' { _ ` i r G',AAh Aver N / Goth Ave N 5 K ,te Grcek FOVY 252 Ttwte, z i _ ti Fs a _ 671n Avo N rchard Lana Goth Ave N � Park Wwfiester Ln i$ Frrxaoy Bled Ga"1hAvoN Comp $ „ , 411 r P .� a1 Comp 2 Brooklyn Wh Ave N 7 ro - ,r a bHenq R � Garden City C ente 52 X63 N ,xa i X Z ae m � �2� Park 152 MurR, 4 m z �hY �1•e N q tb ' "Ave N fir. tln G1etAveN' K I. vrrt Ave N z Gist Ave N 2 r i 1 Park - f; GfAn.N < < c z I Goth A-. W c Y( s a 2 a ! 59ih A-m Iv X � I � � �. � Gilt#, MJ., N Ales ..2011 Microsoft CorRRjpXWN ”? 2 NA y 7iQ AN� y i i COMPARABLE SALES MAP 1 . i COMPARABLE #1 7001 Fremont Ave N, Brooklyn Center COMPARABLE #2 6325 Xerxes Ave N, Brooklyn Center i COMPARABLE #3 3007 64 Ave N, Brooklyn Center 1 1 2 d.PR NC ... A aCYSI . ...................... ......... .............. t Owner Name: 9816 Palm St LLC Yr Built: 1956 Property Address: 6300 France Ave N PID: 34 119 2142 0008 1: . U .. .... EGON : AIw...... .. ..... >::1Y.TAL IT > R : ,. A :::: : ::.UN ..S.......... MIX:::: RENTpar 0 Studios $480 $0 $0 $0 ' 0 1 Bdrm $650 $0 $0 $0 0 2 Bdrm $1,000 $0 $0 $0 1 3 Bdrm $1,250 $1,236 $1,250 $1,236 I ' 0 4 Bdm $1,350 $0 $0 $0 0 5 Bdm $1,550 $0 $0 $0 2 Garages $50 $0 $100 $0 ' ECONOMIC ACTUAL MONTHLY ADJ. RENT $1,350 $1,236 ' TOTAL ANNUAL ADJ. RENT $16,200 $14,832 TOTAL NUMBER OF UNITS 1 ' GROSS BUILDING AREA 1,502 [/J TOTAL NUMBER OF BEDROOMS 3 Gross Rent Multiplier I G.R.M. 9.00 9.00 9.00 CAPITALIZED VALUE OF PROPERTY $146,000 $133,000 CAPITALIZED VALUE PER UNIT 146000 133000 ' LV per Unit $42,300 BV per 2011 Land $42,300- $42,300 2011 Bldg $103,700 $69.04 CORRELATED 2011 VALUE BY INCOME APPROACH $146,000 a 01i Asmen#�i�' rtalge 81dg lfalue ENV SR,1BfD $103,700146,0 ' x 20 4 $9T ZO ' Totat ry„ $42,300 $103 700 $146,000 2011 er Unit $146;00Q Comments: The property is a 1,502 sq, ft. rambler with a two car detached garage in average condition. The main level includes a living, dining, kitchen, family room, three bedrooms, one full bathroom and a fireplace. The basement finished area includes one family room and two additional finished rooms, but no bedrooms. The property has a gas forced air furnace and central air conditioning. The indicated market rent used is at the higher end of the rental scale for a three bedroom unit to account for the two stall garage, large square footage, and useable finished basement area. The market income approach indicated a value of $146,000 for a 1,000 sq, ft. standard three bedroom home in Brooklyn Center. More specific rental data was not available for a larger than average property. t CITY OF BROOKLYN CENTER ' LOCAL BOARD OF APPEAL AND EQUALIZATION 2011 Assessment APPLICATION FOR APPEAL February 21, 2011 through March 18, 2011 You must return this application by March 18, 2011, to be placed on the Agenda for the Local Board of Appeal and Equalization held April 4,2011 at 7 :00 P.M. Names at .�,�r� uc ' Daytime Contact Number: 6 Property Address� anct, Av e- 'V Property Identification Number N rty Assessor's 2011 Estimated Market Value �( Is your property residential, commercial or multi- family? �►. If are appealing a commercial, multi - family or residential rental property you must include income and expense data for calendar year 2010 with your application. ' What is the reason you are appealing your 2011 assess nt? wo When did you purchase your home? Date of Purchase Purchase Price Did you purchase your property from a bank, as a foreclosure or short sale? Has our roe physically changed since the purchase? maintenance, upgrades, Y property rtY P Y Y 9 P C remodeling or structural damage) Please list a brief description below with an estimated cost. Have you had a recent appraisal for refinancing, a purchase agreement or a market analysis by a real estate agent completed within the last year? Yes or No If so, what was the determination of value? What do you think the market value of your property should be? �_T Qoc Please provide any documentation. supporting your claim of overvaluation or erroneous classification with this application._ ro�' e } Researched and prepared by Subject Property Wade Klick Prepared exclusively for Wade A Klick Wade Klick RE/MAX Results 2605 Campus Dr Plymouth, MN 55441 763- 227 -8163 wade@klicksystems.com � � r r • i r ' • ® • Monday, March 14, 2011' Summary of Comparable Listings This page summarizes the comparable listings contained in this market analysis. Cancelled Listings Address Price Bds Bth TFSF $ /Sq Built Style Off Market DOM CDOM S =6300 France Ave N $129,900 3 2 3,004 $43 1956 (SF) One St 02111/2011 74 74 6300 France Avenue $129,900 3 2 3004 $43 1956 (SF) One St 02/11/2011 74 74 Averages: $129,900 3.0 2.0 3004 $43 1956 74 74 Sold Listings Address Price Bds Bth TFSF $ /Sq Built Style Sold Date DOM CDOM S =6300 France Ave N $129,900 3 2 3,004 $43 1956 (SF) One St 02/11/2011 74 74 3025 Mumford Road $106,185 3 1 1056 $101 1958 (SF) One St 06/11/2010 7 7 , 1 One St 02/19/2010 42 42 4318 65Th Avenue 119000 4 2 1420 8 4 959 S F 3113 Mumford Road $119,000 3 2 1636 $73 1958 (SF) One St 06/16/2010 21 21 Averages: $114,728 3.3 1.7 1371 $86 1958 23 23 Median of Comparable Listings: $119,000 Average of Comparable Listings: $118,521 On Average, the 'Sold' status comparable listings sold in 23.33 days for $114,728 r 2605 Campus Or Plymouth, MN 55441-2612 763-227-8163 Res ••.... it' ll � 1 • r • r _ • e • Monday, March 14, 2011 CMA Price Adjustments This page outlines the subject property versus comparables properties. i , T e Subiect Property ( Details Adiust Details Adiust 6300 France Ave N 3025 Mumford Rd 4318 65th Ave N MLS* 3993608 3908425 3844194 Status Cancelled Sold Sold Sch Dist 279- Osseo 286 - Brooklyn Center 279- Osseo List Price $129,900 $94,500 $115,000 Sold Price $106,185 $119,000 S. Cntrbtn $3,185 -3,185 $4,025 - 4,025 Off Mrkt 2/11/2011 04/15/2010 11/18/2009 Dt Closed 06/11/2010 02/19/2010 ' CDOM 74 7 42 Beds 3 3 4 5,000 Baths 2 1 2 Style (SF) One Story (SF) One Story (SF) One Story Abv Sgft 2,253 1,056 1,020 Blw Sqft 751 0 400 Total Sgft 3,004 1,056 1,420 Grg Stls 2 1.00 2.00 Prk Char Detached Garage Detached Garage, None Attached Garage, Driveway Asphalt Year Built 1956 1958 1959 Lk /Wt Lot Sz W 65X140 75 X 128.95 80 X 134.7 Acres 0.24 0.22 0.25 Fdtn Size 1,502 1,056 1,020 Ext Wood, Brick/Stone Wood Stucco t *FP 0 0 0 Bsmt Full, Finished (Livable) Full Walkout, Full ' Amenit Patio, Kitchen Window, Natural Woodwork, Deck, Hardwood Floors, Hardwood Floors Kitchen Window Washer /Dryer Hookup Price $106,185 $119,000 Total Adjustments $- 3,185 $975 Adjusted Price $103,000 $119,975 pp", Researched and prepared by Wade Klick 2 C ampus Dr Plymouth • 12 7. ' M CMA Price Adjustments This page outlines the subject property versus comparables properties. P x, No . I I�vq Subject Property - Details Adjust Details Adiust 6300 France Ave N 3113 Mumford Rd 6300 France Ave N MLS# 3993608 3906505 3993608 Status Cancelled Sold Cancelled Sch Dist 279- Osseo 279- Osseo 279- Osseo List Price $129,900 $124,900 $129,900 Sold Price $119,000 S. Cntrbtn $5,100 5,100 0 Off Mrkt 2/11 /2011 04/27/2010 02/11/2011 Dt Closed 06/16/2010 CDOM 74 21 74 , Beds 3 3 3 Baths 2 2 2 Style (SF) One Story (SF) One Story (SF) One Story Abv Sgft 2,253 1,056 2,253 BIw Sqft 751 580 751 Total Sgft 3,004 1,636 3,004 Grg Stls 2 1.00 2.00 Prk Char Detached Garage Attached Garage, Detached Garage Insulated Garage, Year Built 1956 1958 1956 Lk /Wt Lot Sz W 65X140 75 X 128.95 W 65X140 Acres 0.24 0.22 0.24 Fdtn Size 1,502 1,056 1,502 Ext Wood, Brick/Stone ' MetalNinyl Wood, Brick/Stone # FP 0 0 0 , Bsmt Full, Finished (Livable) Full, Finished (Livable) Full, Finished (Livable) Amenit_ Patio, Kitchen Window, Natural Woodwork, Patio, Kitchen Window, ' Hardwood Floors Kitchen Window, Hardwood Floors N Price $119 $129 Total Adjustments $ -5,100 Adjusted Price $113,900 $129,900 Researched and prepared by Wade Klick -2612 763-227-8163 2 605 D Plymouth MN 55441 Monday, March 14, 2011 Minimums and Maximums This page summarizes key fields of the Listings in this analysis. The listings in this analysis can be summarized as follows: Priced between $94,500 and $129,900 3 to 4 Bedrooms 1.00 to 2.00 Bathrooms 1,056 to 3,004 Square Feet $43 to $89 per Square Foot Built between 1956 and 1959 52 to 55 years old —PP Researched 1 prepared by Wade A Klick 2605 D Plymouth, IVIN 55441-2612 763-227 8163 Monday, March 14, 2011, CMA Comparables This page outlines the subject property versus comparables properties. r Subiect Property Details Details 6300 France Ave N 3025 Mumford Rd 4318 65th Ave N MLS# 3993608 3908425 3844194 Status Cancelled Sold Sold Sch Dist 279 - Osseo 286 - Brooklyn Center 279- Osseo List Price $129,900 $94,500 $115,000 Sold Price $106,185 $119,000 Sr Cntrbtn $3,185 $4,025 Off Mrkt 2/11/2011 04/15/2010 11/1812009 Dt Closed 06/11/2010 02/19/2010 CDOM 74 7 42 Beds 3 3 4 Baths 2 _1 2 Style (SF) One Story (SF) One Story (SF) One Story Abv Sgft 2,253 1,056 1,020 Blw Sgft 751 0 400 Total Sqft 3,004 1,056 1,420 Grg Stls 2 1.00 2.00 Prk Char Detached Garage Detached Garage, None Attached Garage, Driveway = Asphalt Year Built 1956 1958 1959 Lk /Wt Lot Sz W 65X140 75 X 128.95 80 X 134.7 Acres 0.24 0.22 0.25 , Fdtn Size 1,502 1,056 1,020 Ext Wood, Brick/Stone Wood Stucco # FP 0 0 0 '. Bsmt Full, Finished (Livable) Full Walkout, Full Amenit Patio, Kitchen Window, Natural Woodwork, Kitchen Window Deck, Hardwood Floors, Hardwood Floors Washer /Dryer Hookup Researched and prepared by Wade Klick 2605 Campus Dr Plymouth, MN 5540 261Z � 763-227-8163 Ki S f f Y • ' °' • Monday, March 14, 2011 CMA Comparables This page outlines the subject property versus comparables properties. y � H . x, Subject Property Details Details 6300 France Ave N 3113 Mumford Rd 6300 France Ave N MLS# 3993608 3906505 3993608 Status Cancelled Sold Cancelled Sch Dist 279- Osseo ` 279 - Osseo 279 Osseo List Price $129,900 $124,900 $129,900 Sold Price $1 19,000 S. Cntrbtn $5,100 Off Mrkt 2/11/2011 '04/27/2010 02/11/2011 Dt Closed 06/16/2010 ' CDOM 74 21 74 Beds 3 3 3 - Baths 2 2 2 Style (SF) One Story (SF) One Story (SF) One Story Abv Sqft 2,253 _ 1,056 2,253 Blw Sqft 751 580 751 Total Sqft 3,004 1,636 3,004 Grg Stls 2 1.00 2.00 Prk Char Detached Garage Attached Garage, Insulated Garage, Detached Garage Driveway - Concrete, Garage Door Year Built 1956 1958 1956 Lk/ Wt ' Lot Sz W 65X140 75 X 128.95 W 65X140 Acres 0.24 _0.22 0.24 Fdtn Size 1,502 1,056 1,502 Ext Wood, Brick/Stone MetalNinyl Wood, Brick/Stone ' # FP 0 0 0 Bsmt Full, Finished (Livable) Full, Finished (Livable) Full, Finished (Livable) Amenit Patio, Kitchen Window, Natural Woodwork, Kitchen Window, Patio, Kitchen Window, Hardwood Hardwood Floors Washer /Dryer Hookup Floors 1 , Researche d and prepared i W ad e Klick 2 605 • Or • • • • y Monday, March 14, 2011 t Table Summary of Comparable Solds This page summarizes the comparable sold listings in this market analysis. Sold Listings $ Change o Change ' Address List Price Sale Price LP to SP LP to SP Sold Date DOM CDOM 3025 Mumford Road $94,500 $106,185 $11,685 12.37 06/11/2010 7 7 4318 65Th Avenue $115,000 $119,000 $4,000 3.48 02/19/2010 42 42 3113 Mumford Road $124,900 $119,000 $-5,900 -4.72 06/16/2010 21 21 Average $111,467 $114,725 $3,262 3.71 23 23 , Median $115,000 $119,000 $ -4,000 3.48 21 21 Minimum $94,500 $106,185 $- 5,900 4.72 7 7 Maximum $124,900 $119,000 $11,685 12.37 42 42 Researched and prepared by Wade A Klick i I 1 t' 1 i 1 1 61 * Dr Plymouth • • Monday, March 14, 2011 ' Number of Days On Market This graph illustrates the number of days on market for the listings in this analysis. Days On Market 8 0 70 ' 60 d x e`a 50 O 440 IoM to - ' i0 30 20 10 0 h � MLS# Researched and prepared by Wade A Kfick 2 C ampus P " `• • Monday, March 14, 2011 r List Price and Sale Price t This graph illustrates the list price, along with sale price in Sold listings. r Price Graph P 140K 120K 100K 80K � 0 List Price V Sum of L 60K, SingleFamily.SalesClosePrlce CL 40K 20K OK d MLS# Researched and prepared by Wade A Klick pp, 2605 Campus Dr Plymouth, IMN 55441-2612 763-227 3 ® Monday, March 14, 2011 Pricing Recommendation This page suggests a recommended selling price based on a thorough analysis of your property. After analyzing.your property, comparable properties on the market now, recent sales and comparable properties that failed to sell, 1 conclude that in the current market, your property is most likely to sell for pp Researched and prepared by Wade A r i 2605 3 -1 -11 Derek Lanz has permission to deal with the City of Brooklyn Center, on behalf of 9816 Palm Street LLC in the matter of the Estimated Market Value for 6300 France Ave. , Materials handed out at meeting. pp- tk Researched and prepared by Subject Property Wade Klick Prepared exclusively for Wade A Klick Wade Klick RE/MAX Results 2605 Campus Dr Plymouth, MN 55441 763-227-8163 wade@kiicksystems.com •• • Thursday, March 24,2011 Summary of Comparable Listings This page summarizes the comparable listings contained in this market analysis. Cancelled Listings Address Price Bds Bth TFSF $/Sq Built Style Off Market DOM CDOM S=6300 France Ave N $129,900 3 2 3,004 $43 1956 (SF)One St 0211112011 74 74 6300 France Avenue $129,900 3 2 3004 $43 1956 (SF)One St 02/11/2011 74 74 Averages: $129,900 3.0 2.0 3004 $43 1956 74 74 Median of Comparable Listings: $129,900 Average of Comparable Listings: $129,900 •1 f I� • • • b Y OM Thursday, March 24,2011 CMA Price Adjustments I This page outlines the subject property versus comparables properties. If yx f�i Ili III M ,� d I q i� IU�f VIII'1111 Subiect Property Details Adjust 6300 France Ave N 6300 France Ave N MLS# 3993608 3993608 Status Cancelled Canceiled- Sch Dist 279-Osseo 279-Osseo List Price $129,900 $129,900 Sold Price S.Cntrbtn 0 Off Mrkt 2/11/2011 02/11/2011 Dt Closed CDOM 74 74 Beds 3 3 Baths 2 2 Style (SF)One Story (SF)One Story Abv Sgft 2,253 2,253 Blw Sqft 751 751 Total Sgft 3,004 3,004 Grg Stis 2 2.00 Prk Char Detached Garage Detached Garage Year Built 1956 1956 Lk/Wt Lot Sz W 65X140 W 65X140 Acres 0.24 0.24 Fdtn Size 1,502 1,502 Ext Wood, Brick/Stone Wood, Brick/Stone # FP 0 0 Bsmt Full, Finished(Livable) Full, Finished(Livable) Amenit Patio, Kitchen Window, Patio, Kitchen Window, Hardwood Floors Hardwood Floors Price $129,900 Total Adjustments Adjusted Price $129,900 Thursday, March 24,2011 Minimums and Maximums This page summarizes key fields of the listings in this analysis. The listings in this analysis can be summarized as follows: Priced at $129,900 3 Bedrooms 2.00 Bathrooms 3,004 Square Feet $43 per Square Foot Built in 1956 55 years old r► . -. and . -.. -. . M I • ii Thursday, March 24, 2011 CMA Comparables This page outlines the subject property versus comparables properties. 'Vp Subject Property Details 6300 France Ave N 6300 France Ave N MLS# 3993608 3993608 Status Cancelled Cancelled Sch Dist 279-Osseo 279-Osseo List Price $129,900 $129,900 Sold Price S. Cntrbtn Off Mrkt 2/11/2011 02/11/2011 Dt Closed CDOM 74 74 Beds 3 3 Baths 2 2 Style (SF)One Story (SF)One Story Abv Sqft 2,253 2,253 Biw Sqft 751 751 Total Sqft 3,004 3,004 Grg Stis 2 2.00 Prk Char Detached Garage Detached Garage Year Built 1956 1958 Lk/Wt Lot Sz W 65X140 W 65X140 Acres 0.24 0.24 Fdtn Size 1,502 1,502 Ext Wood, Brick/Stone Wood, Brick/Stone #'FP 0 0 Bsmt Full, Finished(Livable) Full, Finished(Livable) Amenit Patio,Kitchen Window, Patio, Kitchen Window, Hardwood Hardwood Floors Floors as Thursday, March 24,2011 Table Summary of Comparable Solds This page summarizes the comparable sold listings in this market analysis. INr r • ` • r 11 a- •• Thursday, March 24,2011 Number of Days On Market This graph illustrates the number of days on market for the listings in this analysis. 80 70 60 50 40 DOM 30 20 10 0 O`b 3�O Thursday, March 24,2011 List Price and Sale Price This graph illustrates the list price, along with sale price in Sold listings. Price Graph 140K 120K 100K 80K - --- d I� List Price V Sum of •L 60K SingleFamily.SalesClosePrice 40K 20K OK O`b 0�O 000 M LS# 0 • r • r Thursday, March 24,2011 Pricing Recommendation This page suggests a recommended selling price based on a thorough analysis of your property. After analyzing your property,comparable properties on the market now,recent sales and comparable properties that failed to sell,I conclude that in the current market,your property is most likely to sell for 00000110,11 ' Appearances by Taxpayers Without an Appointment The following format is recommended for each walk -in appeal. Please state owner(s) name and address. Owner(s) statement of estimated market value or classification and presentation of factual information regarding the property. ' • Questions addressed to the owner(s). ' Assessor's statement classification and p resentation of o s e ent of estimated market value or classif�cat o p factual information regarding the property. • Questions addressed to the Assessor. The Local Board of Appeal and Equalization considers the appeal and makes one of the ' following motions: • Refer the appeal to the Assessor's office for an interior review of the property if and Assessor's recommendation at a Local Board reconvene meeting on April 18, 2011. • Make no change and sustain the 2011 estimated market value or classification ' of the property. If the owner is not satisfied with the outcome of the Local Board of Appeal they may ' appeal to the County Board of Appeal and Equalization. City of Brooklyn Center Local Board of Appeal and Equalization 2011 Assessment April 4, 2011 Walk-in Appeals Registration: 1 . iv rV fL. 2. aJ_ „ 3. 4. 5". ' LA f 6."-B L. - 7. 8. 9. 10, 11 . 12. _13. CITY OF BROOKLYN CENTER 2011 LOCAL BOARD OF APPEAL AND EQUALIZATION Walk-- In Appeal Application Local Board of Appeal and Equalization held April 4, 2011 at 7:00 P.M. Name(s) Daytime Contact Number: 2- --2/!R -- 3 O 5 Property Address Q),.j Property Identification Number Assessor's 2011 Estimated Market Value Is your property residential, commercial or multi-family? r:c- �,1 If you are appealing a commercial, multi-family or residential rental property you will need to submit income and expense data for calendar year 2010 with your application. What is the reason you are appealing your 2011 assessment? X C When did you purchase your home? ` Date of Purchase /Z9/711 Purchase Price Did you purchase your property from a bank, as a foreclosure or short sale? Has your property physically changed since the purchase?(maintenance, upgrades, remodeling or structural damage) Please list brief es ' t' below with an estimated cost. cz� r Have you had a recent appraisal for refinancing, purchase or a market analysis by a real estate agent completed within the last year? (yesl or No f If so, what was the determination of value? 6 00 CCU cr/ What do you think the market value of your property should be? 6 Co c©O We will need to schedule an interior review of your property within t,4e,week, is erej specifi date or time that works best for you? Cc e C1 42fce, 1 5 Please provide any documentation supporting your claim of overvaluation or erroneous classification with this application. In order to appeal your valuation an appointment to view the property will be required. Report Name: Taxpayer Inquiry Printed:4/4/2011 City of Brooklyn Center. pager l Taxpayer Inquiry DisillaX P1D House Nbr Street N me Tini Zip Cod (+4) 10-118-21-22.0001 5306 Perry Ave N 55429 Last Nam First Name mi Owner Taxpayer Resident Kevitt Scott Y Y Y Frontage Left Side Rear•Side Right Sid g Eff•Width Eff.Dellth PropelU Area Acreag Zonin g P/S Exempt Code School Dist Watershed Yr Built 0 0, 1,144 0 0 0 100,687 2.31 R1 0281 13 1960 Year Ver #Subs Land Value Bldg Value Mach Value Tot Mkt Value Tax Cap Hmstd Midyr Rel H PQ %Own 2011 1 1 465,000 221,000 0 686,000 7,325 Y N N RL 100 N 2010 1 1 485,000 225,700 0 710,700 7,634 Y N N RL 100 N 2009 1 1 460,800 215,000 0 675,800 7,198 Y N N RL 100 N Lot: 000 Block: 000 Addition: Unplatted 10 118 21 LOT 5 EX R R LAND �ti 'i► Touchstone Appraisal Services, LLC Real Estate Valuation Services File No.6312545 APPRAISAL OF .. ten• _ Detached Single Family Residende:` LOCATED AT: 5306 Ferry Avenue North Brooklyn Center,MN 55429 FOR: Fifth Third Bards 5001 Kingsley Drive,2nd Floor Residential Mortgage Cincinnati,OH 45227 BORROWER Scott Kevitt AS OF: November 5,2010 BY: John W.Grif'fendort Certified General Real Property Appraiser 3744 Cleveland Avenue,#125,Arden Hills,MN 55112-3265 Touchstone Appraisal Services, LLC Real Estate Valuation Service File No.6312545 11/07/2010 Firth Third Bank 5001 Kingsley!hive,2nd Floor Residential Mortgage Cincinnati,OH 46227 File Number: 6312545 Dear Sir or Madam: In accordance with your.request,I have appraised the real property at: 5306 Perry Avenue North Brooklyn Center,MN`55429 The purpose of this appraisal is to develop an opinion of the market value of the subject property,as Improved. The property rights appraised are the,,fee simple interest in the site and improvements. In.my opinion,the market value of the property as of November 5,2010 is: $600,000 Six Hundred Thousand Dollars The attached report contains the description,analysis and supportive data for the conclusions, - final opinion of value,descriptive photographs, limiting conditions and appropriate certifications. Yours very truly, JbKn W.Griffendorf Certified General Real Property Appraiser 3744 Cleveland Avenue,#125,Arden.Hills,MN 55112-3265 i Touchstone Appraisal Services,LLC • Uniform Residential Appraisal Report File No.6312545 The purpose of this summary appraisal report is to provide the lendericlient with an accurate,and adequately supported,opinion of the market value of the subject plope!j. Property Address 5306 P Avenue North city Brooklyn Center stme MN zipcode 55429 Borrower Scott Kevitt Owner of Public Record Scott Kevitt county Hennepin L ton Lot 0 Block 0 Un latted 10 118 21 Lot 5 Ex RR Land. Assessor's Parcel x 1011821220001 Tax year 2010 R.E.Taxes It 11 296.60 N' Name None. Reference Ma 92 Coordinate A2 Census Tract 207 X Owner Tenant vacua S $0.00 Pull) HDA$WA r r month Pr R' ailed X Fee ' Leasehold Other d.W Type LIPLuchaseTransacion X Refinance Transatton Other describe Lenaeraw Fifth Third Bank Address 5001 Kinasley Drive 2nd Floor Residential MO a Cincinnati OH 45227 Cir Is the subject curt offered to sale w has•t been offered for sale it the twelve months ro the of ecM date of dos appraisal? Yes X No Report data source(s)used,offering price(s),and date(s). The data sources we the owner,Multi Listing Service and county records. I Udid LX j did not aWM the contract for sale for the subject purchase transact ion.ExpYku fie restdcs of dre analysis of the contract for safe or why the analysis was not perkmned. The purpose of the appraisal-4s refinancing. The su • has not been offered for sale in the last three" ears. Contact Price$N/A Date of contact N/A Is the seller the owner of public record? Yes LINO Data Sour s WA • Is there any financial assistance(ban charges,sale concessions,gift or downpeyment assistemx,etc.)to be paid by any party on behalf of the borrower? uYes UNO ff Yes,report the total dollar amount and describe the items to be paid. N/A Note:Raoa and the raeiar coon Position of the nefoliberhood are ftetnewalsel teeters. Location Urban' X Suburban Rural Pt Values Increasing I Stable 1XIDeclining PRICE AGE One-Unt 90%' Buit-U X Over 75% 25.75% Under 25% DernamYS e I lin Balance IX lover S DW 24 Unit % • Growth Ll Ra o SW* JMaqgMT#ne LjUnJer3mths X 3fi mths I JCver6mths 19 Law 20 Mhdt- 6% • Neighborhood Boundaries See Attached Addendum. 1,000 High 80 commercial 5% • 112 Pred. 50 Other % Neighborhood Description To the northwest is Crystal Airport,to the west is Lion's Soo Line Park and to the northeast is Brookdale Mall. The subject is an overim rovement but the market for this unique property would be within 10 miles. Consequently,I do notbelleve there would be a roblem a sellina the sub•ect. The One-Unit Housina hiah end includes lake-front properties within 7.5 miles. Market conditions(including support tot the above conclusions) See Attached Addendum. Dimensions Irregular Area 2.31 Acres Shape Irr ular view Aversoe cscz Ctassitcetion R1 z One Fsmj Residence Zon' co 'ice X L L INmuonkmni Ganhliadhenahll No at desabx Is the highest and best use of the subject property as inxroved(or as proposed per plans and spedbcat=)the present use? Yes UNo If Noy describe.. udlides Public Ocher,describe PabBe r describe ON-aite awmen4—T e. Public Private Electricity X 400 Amp.,Brkrs. water X Well Street haft Gas 1XI I I P,sewer tic ft None' FEMA daI Ftaod Hazard Area Yes JXjNo FEMA Hood zone X FEMA Ma k 27053CO212E FEMA Dw%0910212004 Ate the uttities and off-site• avementa typical for the market area? I IYOS 1XjNo g No,tlescrApe. The Market area has egblic water and-sffrniLh •. Are there any adverse s�conditions or external factors(easements,encroaclmhenta,environmental conditions,INN uses,ek.)? Yes No ff Yes,describe.checked the land r ecords for recorded easements and haver rted oil a rent easements encroacllsstents a other adverse conditions. The nin classifrcabon and descri lion were determined readin the zoni ma on web Units X One LL11 one with Accessory uni Concrele Stab 1--jCFawfSpace Foundation wags Cone.Block/Ave. Roma C t.&HW%Ave. p of stories One 1XIFullBasement LIParlialBaserment Exterior webs Wd.Sidi /Ave. weds ll/Ave. T X Der. I JAII. S-Det&ndUnb Basement Area 1532.5 sq.t Root Surface As h.Sh. " TrkMFkhish Stained HW/AV. X Exist. I ]PTRosed, ElUnderConst. Basement Finish 100% Ghatns&Downspouts Galvanized/Ave. Bath Fluor CT/Ave. Design s 4-Lvl.Split [XIOutsideEnuvrexit Rumopurno window Type Casement/Ave. Bath wainscot CT/Ave. Year Built 1960 Evidence of m1esUUon Samm sasihr nsuiated Combination/Ave. Car Storage I None Effective rs 10 F]Damrmess I settemem Screens Combination/Ave.I IDriveway d of Cara " Attic I None LXJPJVAII JHWB8jj Radiant Amenities WDodSI # Dmv-y Surface Drop Stan Stales I Fuel Gas X Fn s N 2 Fenn X Gera tmCars 6 Fluor X Scuttle Cool Cenral Ale X PatiolDeck Porch #of Cars Finished Heated In#Vhdual Ocher Pool Other MAIL jXJDeL I Ilk" nces X R raeor X R tpuetn X DWmwasher X Microwave X Washer r Other describe Fnished area above grade contains: 4 Roams 1 Bedroom 1.00 Be s 1 533 square Feet of Goss Living Area Above Grade Additional features(special energy efficient aeons,etc.). Water softener,water fitter,heated garage floor,wet bar in family room two full wall flag stone fireplaces,high-efficient furnace and water heater, are drain and sink. • Describe the condition of the property(bcknthng needed sepals,detarmarioon,tenantons,remodeling,mc.). The subject is improved with top-of-the-line materials. It is an overimprovement for the immediate neighborhood. Are there any physical detciennues or adverse conditions that affect the fwebbity,soundness,or structural integrity of the popery? OYes ON9 b Yes:descn be. Does the propeM generally conform b the neigbbodmod(functional lhfilty,style,condilem,use,construction,etc.)? UYes Ohio ff No,desedbe. It is an overimprovement for the immediate nei0hborhood. Fmeae Mac Form A WIM epos - ga0we m.p raeh•re,emrurm euwee escam Fame Mee M WX MM PeOe 1016 taw E6MMM Touchstone Appraisal Services,LLC AP Uniform Residential Appraisal Report File No. 6312545 There are 71 comparable properties curve offered tot sale in the subjectneoWhood ranging in price tom S 49,900 to s 329,900 There are 106 c able sales in pre subtewa ' baud within the pM Nwhie months i in sale price from s 64.900 to s 275,000 FEATURE SUBJECT COMPARABLE SALE NO.1 COIJPARABLE SALE NO.2 COMPARABLE SALE NO.3 5306 Perry Avenue North 6435 Eagle Lake Drive 267 Peninsula Road 4400 25th Street West Address Brookiyn Center _Maple Grove MN 55369 Medicine Lake MN 55441 St.Louis MN 55416 «w._ Pro a Subject � 3.5 Miles Northwest 5.2 Miles Southwest 6.4 Miles South Sale Price $ N/A $ 660,000 : 'E 600 000 ' w i $ 530 000 See PdceVossLiv.Area s 330.00 sq.lt ''s tt,., T $ 535.71 sq.p. s 265.00 .k: 4. Data Source(s) Northstar MLS#:3942114 Northstar MLS#:3863786 Northstar MLS#:3849664 Verification Soorce s < Cumulative DOM:75 Cumulative DOM:253 Cumulative DOM:212 VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION .-S DESCRIPTION •-s DESCRIPTION " -$ Sale or Financing N/A :' Conventional Conventional Conventional Concessions None None $15,600 -15,600 Dafe ofSateRinhe NIA""" °'"� 09/16/2010 13 200 12/23!2009 60 000 04128/2010 -31,800 Location Suburban Aud.Subd.316 ReDlat ML Replat Cedarwood 2nd LeasenoWee ' Fee Simple Fee Simple Fee Simple Fee Simple site 2.31 Acres 0.65 Acres Lake 1 50,000 0.70 Acres Lake 1 50,000 0.26 Acres Lake 50,000 view Averse Averse Averse Average Design 4-Lvl.Split 4-Levels lit SOlit Entry Rambler of Construction Averaoe Averse: Average Average Actual Age 50+/-Years 9 Years 44 Years 53 Years Condition Averacte Average Average Averaoe Above Grarfe Tore ads Tow teas -10,000 raw gees Tow Immod arks -10,000 Room Cow 4 1 1 1 1.00 6 1 3 1 3.00 -1 0 0 0 4 1 0 D15 7 1 3 1 1.75 -5 000 Area 0. Gass ' 5 00 1 533 sq.k 2000 so.tL -23,350 1,120 sq.iL 20,650, 2000 sq,tt -23.350 Basement&Finished 1532 SF,WO 2500 SF,WO 1600 SF,WO 2000 SF,WO Rooms Below Grade 1532 SF 1,00Ba. 2500SF 0.75Ba. -19,360 938 SF 1.00 Ba. 11,880 360 SF 0.75 Ba. 23,440 Functional Utility Averse Avers e era Av a Averaae HeafingfCoohN FWA C/Air FWCA FHA/CA FHA/CA `Energy Efficient Items .,Avla.Ener Eff. A .Ener Eff. Avg.Energy Eff. Avg.Ener Z Eff. Gafage/Carport 6 Car Garage 2 Att.&2 Det. 10,000 2 Attached 20,000 2 Attached 20,000 PorchPa#wDeck Patio&Deck Deck&Patio PorchDeckPatio -5,000 Patio 2,000 a 2 F/P 1 Fire lace 5,000 2 Fireplaces 2 Fireplaces • None None None None N/A COE:10/15/10 COE:02122/10 COE:05/20110 Net Atijustment + X- Is 11M lZ $ 37,5301 IX I+ Is 9,690 Adjusted Sale Price NetAdj: 1.7% NetAdj. 6.3% NetAdj. Of co Obits '" Gross '. 21.3% 649 090 Gross 7. 637 530 Groh 34. 539,690 I LX Jrfid UdW not research the sale or transfer history of pre subject property and comparable sales.o riot,explain M research did X Ift rat reveal any ior sales or transfers of floc subject Property for the three years prior to pre effective date of pals appraisal. tJata�urce s Cow records. M research did II did not reveal any for sales or transfers of the comparable salas for the year prior to the date of sale of the co able safe. Data sources County records. Report the results of the tesearch and an of the Prior safe or transfer history of the iabject property Will able sales(report arklitionaf Prior sales at rTEM SUBJECT COMPARABLE SALE NO.1 I COMPARABLE SALE NO.2 COMPARABLE SALE N0:3 Date of Prior Salertiansfer 04/01/1986 08/01/2000 No other record. No other record. Price or Prior Saterrransfer $115,000,Warranty Deed $270,000, rran Deed N/A N/A Data Source(s) MLS&County Records MLS&County Records MLS&County Records MLS&County Records Epective Date of Dab Sources 11/05/2010 11/05/2010 11/05/2010 11/0512010 Analysis of prior sale or transfer history of the subject property and comparable sales Three-year sales history:According to the.Northster Multiple Listing Service the subject is not listed for sale and has not been listed in the last 12 months: Summary of Sales Comparison approach. See Attached Addendum. Indicated value by Sales comparison Approach s 6W 000 rnsrcatedvaiueb: Sales Comparison A roach$BOO 000 ComA oach fdevalo a 604,600 Incomes each fdevel` II The most weight was given to Comparable 1 because it had the least adjustment and was the closest to the sub-Oct. This appraisat s made X 'as is, LJ subject to complebon per plans and specdcalorns on the basis of a hypothetical corillbort that&a improvements have beencanpteted, Qsubject to file krilm g repairs o alterations on pee basis of a hypothetical coodbon that t he repairs or alteratons have been completed,or ❑subject fe the lotowlM etjuaed inspection based on the extraordinary assurr"a that the condition or deficiency does not require alteration or repair; Based on a earn plate visual inspection of the interior and exterior areas of the subject property,defined scope of work,atatomertt of assumptl*as and limiting conditions,and appraiser's certification,my(out)opinion of the market value,"defined,of the real property that is file subject of this report Isa 600,000 "of 11/05/2010 which is the date ofinspection and the effective sue ofthisappWaal. cwoae wee ram ai xwen axrs caama aervA0adrax,ew2"sma-m aemm reds wee cam moo ird mm Page 2 da ieo4 p;.oaaloe. Touchstone Appraisal Service Touchstone Appraisal Services,LLC Uniform Residential Appraisal Report File No.6312545 The subject is in Brooklyn Center not Minneapolis. The order is Market values are declinina as determined in the 1004MC consequently the market is in oversupply. The subject is an overim rovement but the market for this unique property would be up to 10 miles. Consequently,I do not believe there would be a Problem selling the subject. There are no other sales in competing areas. All the available sales are in the appraisal. The following requirement cannot be met "At minimum 2 closed comps are required to have sold within the past 90 days from the effective date of the appraisal. If 2 sales cannot be located in the sub'ect immediate area then please expand your search to competing areas in order to comply with this guideline and comment that these sales were provided to add support in current market conditions." The site ad'ustment was derived from my experience what a small medium and large lake-front lot would sell for in the subject's market. There is no market data except for the inferior lot that sold more than a year ago in Robbinsdale see cost approach). The con Tables would also be overim rovements. Provide adequate information for the lenderkhentur EMRMte the below cost kures sml cadculatim. Support for the opinion of site value(summary of compuable land sales or other medtods for esd=*V site value) A smaller and'(nferior lake front site sold In Robbinsdale for$160,000 on 06/22/2009 3920 Lakeland Avenue North Robbinsdale The assessor's estimated site value is $460,800. A rou h site value would be$240,000. ESTIMATED LIREPRoDucTioNoR REPLACEMENT COST NEW OPINION OF SITE VALUE... ......... ... .=$ 240,000 Source ofcostdam Marshall&Swift and RS Means cost services Dwelling 1,533sq.FLD$ 151.03........... $ 231,529 ' Quality Lan tom cost service Good Ellective date of cost data Current Bsmt:1532 S.Ft 0$ 32.59............=$ 4%928 Comments on Cost Approach(gross area calculations depreciation,etc. Physical depreciation was calculated using the effective Garagelcawn 572 Sq.R.a$ ............=S 90,341 a eleconomic life method. No si nificant functional or external Total Estimate of cost-New ........:..._$ 371,798 depreciation was noted. The land value to total value ratio is 40 Lela 65 P ical Furr1-1 External percent which falls within the range for competing ro ies. De ecittion $57,199 1 1 =$( 57 199 Depreciated Cost of l .......... .....................=S 314,599 'As•ie Value of Site Improvements................................= 50'000 Estimated R Econonac LiFe HUD and VA 55 Veers MIDICATED VALUE BY COST APPROACH .,_....:. ..:....:: S 604.600 Estimated Monthly Market Rem$ X Gross Rent Multiplier N/A =S 0 Indicated Vale by Income Approach Summary of Income Approach(inclndmg support for market rem and GRM) Is the developPribuildel in control of the Homeowners'Association A? Ljyes No Unit s DDeracheril Atached Provide the folowingi information for PUDs ONLY A the developer/builder is in control of the HOA and the subriect property is an attached ftdmg unit. Legal new of project Total mmnber of phasm - Total number of units Tel number of was soli Total number of units rented Total number of units lor sale Data source(a) Was the project created by the conversion of an s mto a PUD? Yes No d Yes date of conversion. Does the contam m ums? vas No Dots Barr s Are the units,common elements,and recreation facades compim? U Yes U No d No,describe the status of completion. Are dre common es mems leased to or by the HemeownerV Association? Yes UW d Yes,descfbe the rental terms and options. Describe common elements and recreational facilities.. fetae Yet form 70 Tae a ameuaa raraaor+m.rronum..r,c.mcan Fade Nee ram moo M06 Touchstone Appraisal Services,LLC Uniform Residential Appraisal Report File No.6312545 This report form is designed to report an appraisal of a one-unit property or a one-unit property with an accessory unit;including a unit in a planned unit development(PUD). This report form is not designed to report an appraisal of a manufactured home or a unit in a condominium or cooperative project. This appraisal report is subject to the following scope of work,intended use,intended user,definition of market value,statement of assumptions and limiting conditions,and certifications. Modifications;additions,or deletions to the intended use,intended user, definition of market value,or assumptions and limiting conditions are not permitted. The appraiser may expand the scope of work to include any additional research or analysis necessary based on the complexity of this appraisal assignment. Modifications or deletions to the certifications are also not permitted. However,additional certifications that do not constitute material alterations to this appraisal report,such as those required by law or those related to the appraiser's continuing education or membership in an appraisal organization,are permitted. SCOPE Of WORK: The scope of work for this appraisal is defined by the complexity of this appraisal assignment and the reporting requirements of this appraisal report form,including the following definition of market value,statement of assumptions and limiting conditions,and certifications. The appraiser must,at a minimum:(1)perform a complete visual inspection of the interior and exterior areas of the subject property,(2)inspect the neighborhood,(3)inspect each of the comparable sales from at least the street,(4)research,verify,and analyze data from reliable public and/or private sources,and(5)report his or her analysis, opinions,and conclusions in this appraisal report. - INTENDED USE: The intended use of this appraisal report is for the lender/client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction. INTENDED USER: The intended user of this appraisal report is the lender/client. DEFINITION OF MARKET VALUE: 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,knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:(1)buyer and seller are typically motivated;(2)both parties are well informed or well advised,and each acting in what he or she considers his or her own best interest;(3)a reasonable time is allowed for exposure in the open market; 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. *Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; casts are readily. identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar rcost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS:The appraiser's certification in this report is subject to the following assumptions and limiting conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it,except for information that he or she became aware of during the research involved in performing this appraisal. The appraiser assumes that the title is good and marketable and will not render any opinions about the title. 2. The appraiser has provided a sketch in this appraisal report to show the approximate dimensions of the Improvements. The sketch is included only to assist the reader in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency(or other data sources)and has noted in this appraisal report whether any portion of the subject site is located in an Identified Special Flood Hazard Area. Because the appraiser is not a surveyor,he or she makes no guarantees,express or implied,regarding this determination. 4. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property inquestion, unless specific arrangements to do so have been made beforehand,or as otherwise required by law. 5. The appraiser has noted in this appraisal report any adverse conditions(such as needed repairs,deterioration,the presence of hazardous wastes,toxic substances,etc.)observed during the inspection of the subject property or that he or she became aware of' during the research involved in performing this appraisal Unless otherwise stated in this appraisal report,the appraiser has no knowledge of any hidden or ursapparent physical deficiencies or adverse conditions of the property(such as,but not limited to, needed repairs,'deterioration,the presence of hazardous wastes,toxic substances,adverse environmental conditions,etc.)that would make the property less valuable,and has assumed that there are no such conditions and makes no guarantees or warranties,express or implied. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards,this appraisal report must not be considered as an environmental assessment of the property. 6. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion;repairs,or alterations on the assumption that the completion,repairs,or alterations of the subject property will be performed in a professional manner. k6ift MK wren 70 W.0 nos amaue*a -ft—eoo2u.9727.w.n.«..,.e.mr� F~MW FaM 1004 M-11 2M PV 41 d s 10o+_oS 000608 Touchstone Appraisal Services,LLC Uniform-Residential Appraisal Report File No.6312545 APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: 1. 1 have,at a minimum,developed and reported this appraisal in accordance with the scope of work requirements stated in this - appraisal report. 2. I performed a complete visual inspection of the interior and exterior areas of the subject property.I reported the condition of the improvements in factual,specific terms.I identified and reported the physical deficiencies that could affect the livability, soundness,or structural integrity of the property. 3. 1 performed this appraisal in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place at the time this appraisal report was prepared. 4. 1 developed my opinion of the market value of thereat property that is the subject of this report based on the sales comparison approach to value. I have adequate comparable market data to develop a reliable sales comparison approach for this appraisal assignment. I further certify that I considered the cost and income approaches to value but did not develop them,unless otherwise indicated in this report. 5. 1 researched;verified,analyzed,and reported on any current agreement for sale for the subject property,any offering for sale of the subject property in the twelve months prior to the effective date of this appraisal,and the prior sales of the subject property for a minimum of three years prior to the effective date of this appraisal,unless otherwise indicated in this report. 6. 1 researched,verified,analyzed,and reported on the prior sales of the comparable sales for a minimum of one year prior to the date of sale of the comparable sate,unless otherwise indicated in this report. 7. 1 selected and used comparable sales that are locationaily,physically,and functionally the most similar to the subject property. 8. 1 have not used comparable sales that were the result of combining a land sale with the contract purchase price of a home that has been built or will be built on the land. 9. 1 have reported adjustments to the comparable sales that retied the market's reaction to the differences between the subject property and the comparable sales. 10. I verified,from a disinterested source,all information in this report that was provided by parties who have a financial interest in the sale or financing of the subject property. 11. 1 have knowledge and experience in appraising this type of property in this market area. 12. 1 am aware of,and have access to,the necessary and appropriate public and private data sources,such as multiple listing services,tax assessment records,public land records and other such data sources for the area In which the property Is located. 13. 1 obtained the information,estimates,and opinions furnished by other parties and expressed in this appraisal report from reliable sources that I believe to be true and correct. 14. 1 have taken into consideration the factors that have an impact on value with respect to the subject neighborhood,subject property,and the proximity of the subject property to adverse influences in the development of my opinion of market value. I have noted in this appraisal report any adverse conditions(such as,but not limited to,needed repairs,deterioration,the presence of hazardous wastes,toxic substances,adverse environmental conditions,etc.)observed during the inspection of the subject property or that i became aware of during the research involved in performing this appraisal. I have considered these adverse conditions in my analysis of the property value,and have reported on the effect of the conditions on the value and marketability of the subject prosy. 15. I have not knowingly withheld any significant information from this appraisal report and,to the best of my knowledge,all statements and information in this appraisal report are true and correct. 16. 1 stated in this appraisal report my own personal,unbiased,and professional analysis;opinions,and conclusions,which are subject only to the assumptions and limiting conditions in this appraisal report. 17. 1 have no present or prospective interest in the property that is the subject of this report,and i have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base,either partially or completely,my analysis and/or opinion of market value in this appraisal report on the race,color,religion,sex,age,marital status,handicap, familial status,or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 18. My employment and/or compensation for performing this appraisal or any future or anticipated appraisals was not conditioned on any agreement or understanding,written or otherwise,that I would report(or present analysis supporting)a predetermined specific value,a predetermined minimum value,a range or direction in value,a value that favors the cause of any party,or the attainment of a specific result or occurrence of a specific subsequent event(such as approval of a pending mortgage ban application): 19. 1 personally prepared all conclusions and opinions about the real estate that were set forth in this appraisal report: If I relied on significant real property appraisal assistance from any individual or individuals in the performance of this appraisal or the preparation of this appraisal report,i have named such individual(s)and disclosed the specific tasks performed in this appraisal report. t certify that any individual so named is qualified to perform the tasks. i have not authorized anyone to make a change to any item in this appraisal report;therefore,any change made to this appraisal is unauthorized and I will take no responsibility for it. 20. 1 identified the lender/client in this appraisal report who is the individual,organization,or agent for the organization that ordered and will receive this appraisal report. 21. The tender/client may disclose or distribute this appraisal report to:the borrower;another tender at the request of the borrower; the mortgagee or its successors and assigns;mortgage insurers;government sponsored enterprises;other secondary market participants;data collection or reporting services;professional appraisal organizations;any department,agency,or instrumentality of the United States;and any state;the District of Columbia,or other jurisdictions;without having to obtain the appraiser's or supervisory appraiser's(if applicable)consent. Such consent must be obtained before this appraisal report may be disclosed or distributed to any other party(including,but not limited to,the public through advertising,public relations,news,sales,or other media). we d,MM rromc.a,.wAa..*—8 o.M.en��,.....a.,w. M.FM AN MM . Par d6 - tOUe_u509oBOe Touchstone Appraisal Services,LLC Uniform Residential Appraisal Report File No.6312545 22. 1 am aware that any disclosure or distribution of this appraisal report by me or the lender/client may be subject to certain laws and regulations. Further,i am also subject to the provisions of the Uniform Standards of Professional Appraisal Practice that pertain to disclosure or distribution by me. 23. The borrower,another lender at the request of the borrower,the mortgagee or its successors and assigns,mortgage insurers, government sponsored enterprises,and other secondary market participants may rely on this appraisal report as part of any mortgage finance transaction that involves anyone or more of these parties: 24. If this appraisal report was transmitted as an"electronic record"containing my"electronic signature,*as those terms are defined in applicable federal and/or state laws(excluding audio and video recordings),or a facsimile transmission of this appraisal report containing a copy or representation of my signature,the appraisal report shall be as effective,enforceable and valid as if a paper version of this appraisal report were delivered containing my original hand written signature. 25. Any intentional or negligent misrepresentation(s)contained in this appraisal report may result in civil liability"arid/or criminal penalties including,but not limited to,fine or imprisonment or both under the provisions of Title 18,United States Code,Section 1001,et seq.,or similar state laws. SUPERVISORY APPRAISER'S CERTIFICATION: The Supervisory Appraiser certifies and agrees that: 1. 1 directly supervised the appraiser for this appraisal assignment,have read the appraisal report,and agree with the appraiser's analysis,opinions,statements,conclusions,and the appraiser's certification. 2. 1 accept full responsibility for the contents of this appraisal report including,but not limited to,the appraiser's analysis, opinions,statements,conclusions,and the appraiser's certification. 3. The appraiser identified in this appraisal report is either sub-contractor or an employee of the supervisory appraiser(or the appraisal firm),is qualified to perform this appraisal,and is acceptable to perform this appraisal under the applicable state law. 4. This appraisal report complies with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place at the time this appraisal report was prepared. 5. If this appraisal report was transmitted as an"electronic record containing my"electronic signature,"as those ems are defined in applicable federal and/or state laws(excluding audio and video recordings),or a facsimile transmission of this appraisal report containing a copy or representation of my signature,the appraisal report shall be as effective,enforceable and valid as If a paper version of this appraisal report were delivered containing my original hand written signature. APPRAISER SUPERVISORY APPRAISER(ONLY IF REQUIRED) Signature_&Lr+n�J,. Signature Name John W.Griffendorf Name Company Name Touchstone Appraisal Services,LLC Company Name Company Address 3744 Cleveland Avenue,#125 Company Address Arden Hills MN 55112-3265 Telephone Number(651)483-0937 Telephone Number Email Address johngrif0earthlink.net Email Address Date of Signature and Report 1110812010 Date of Signature Effective Date of Appraisal 11/05/2010 State Certification# State Certification#4000624 or State License# or State License# State or Other(describe) State# Expiration Date of Certification or License State Minnesota Expiration Date of Certification or License 08/31/2012 ADDRESS OF PROPERTY APPRAISED SUBJECT PROPERTY 5306 Perry Avenue North ❑Did not inspect subject property Brooklyn Center,MN 55429 Did inspect exterior of subject property from street Date of Inspection APPRAISED VALUE OF SUBJECT PROPERTY$600,000 Q Did inspect interior and exterior of subject property Date of inspection LENDER/CLIENT Name COMPARABLE SALES Company Name Fifth Third Bank ❑Did not inspect exterior of comparable sates from street Company Address 5001 Kingsley Drive,2nd Floor Residential I Did inspect exterior of comparable sales from street Date of Inspection Email Address 90;Feet Farm 70 M"MM P�,wq AG wa re.M-2U$727 n..c+.we.wm FW—Mee FM Pagesae - Boa os oaoeoti Touchstone Appraisal Service Touchstone Appraisal Services,LLC Uniform Residential Appraisal Report File No.6312545 FEATURE SUBJECT COMPARABLE SALE NO.4 COMPARABLE SALE N0:5 COMPARABLE SALE NO.6 5306 Perry Avenue North 2601 Silver Lane NE Address Brook! n Center St.Anthony,MN 55421 P10)(irRity to ElUv. � � a:.' ,. 5.9 Mite East Sale Price s N/A . E 521 000 °.,: E SatePnmCaa $ 0.00 .ft. s .240.76 .k. ,_=:.' .$ .ft. =as :. s Data Sour " � ,` Northstar M LS#:3852619 verification . ..;Cumulative DOM:32 VALUE ADJUSTMENTS- DESCRIPTION DESCRIPTION -s DESCRIPTION .•S DESCRIPTION -a Sale or Financing "°y a Conventional Concessions None Date of salef ime "'- 11/09/2009 -62,520 Location Suburban Metes&Bounds LeasehoWlFee Simple Fee Simple Fee Simple Site 2.31 Acres 1.45 Acres Lake 25,000 view Avera a Averaqe Design S 4-Lvl.Split 4-Level SDlit Quality of Construction Average Average Actual Age 50+/-Years 59 Years Condition Avera a Averane Above Grade Tw I gam Tao soft -10.000 Tar e.ws Tar Mnre Room Count 4 1 1 1 1.00 7 3 1.75 -5,000 Grass Lity Lit Area 50.00 1 533 sq.tt. 2J64 sq.t -31,550 sq.it, sq.1< Basement&Finshed 1532 SF,WO 2164 SF,WO Rooms Below Grade 1532 SF 1,00121a. 1376 SF 015 BE 3,120 Functional Utility, Averaoe Avers e Heatin/Coohn FWA C/Air FHA/CA Energy Efficient ems Av .Energy Eff. Av .Energy Eff. Garage/Carport 6 Car rGara e 2 Attached 20,000 Porch/Patio/Deck Patio&Deck Deck 1 000 2 F/P 1 Fire tace 5.000 None None N/A COE:12/18109 Net Ad' t ota + 1x1- Is 54.9501 [X1+ 0 + 0 Adjusted sate Price Net Adj. -10.5% Net Adj 0:0% Net Adj. 0.0% Of tables Gross 31.3% 48 050 Gmss 0.0% E 0 Grass . 0.0% 0 REM SUBJECT COMPARABLE SALE NO.4 COMPARABLE SALE No.5 COMPARABLE SALE NO.6 Date of Prior Sale/Transfer 04/0111986 04/08/2002 Price of Prior Sale/Transfer $115,000,Warranty Deed 1$650,000,Warranty Deed Data soure s MLS&County Records I MLS&County Records . Effective Date of Data sour s 11/05/2010 11/05/2010 Summary of Sales Comparison Approach Frntlae bYC a1 NH1Ch 1005 - Pv0um0 m g AD argue.e02342M r.vxswba - FUMMeFM SW 2005. 3004aaaa Touchstone Appraisal Services,LLC Uniform Residential Appraisal Report File No.6312545 FEATURE SUBJECT COMPARABLE SALE NO.7 COMPARABLE SALE NO.8 COMPARABLE SALE NO.9 5306 Perry Avenue North 12500 58th Avenue North 1432 18th Street NW 1040 Angelo Drive ' Address Brooklyn Center Pi mouth MN 55442 New Brighton,MN 55112 Golden Va Lley,MN 55422 Pr ' to Subject ,,`t 4.8 Miles-West 6.9 Miles-Northeast 4.2 Mile.South Sale Price $ N/A Is 699.90 'is 745,000, � Wit"7:,--1$ 849,900 Safe vrice4Grass W.Area s 0.00 sq.ft. $ 354.92 ft. s 274.609 q.it " .z ;'<„° .s 467.49 .ft Data sowc s Northstar MLS#:-3936596 Northstar MLS#:3040532 Northstar MLS#:3954136 Verification Sorac s - ;-, Cumulative DOM:148 Cumulative DOM:136 Cumulative DOM:68 VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION -s DESCRIPTION -s assent. DESCRIPTION .-s Sale or Financing N/A""., LD:W/10/2010 LD:06/22/2010 LD:07129/2010 Concessions OLP:$769,900 OLP:$745,000 OLP:$945000 Dare of SaWrim WA .,. I Active Listing Active Listing PendiM Sale Location Suburban BassLkHi hlands Windward Ter. Metes&Bounds LeasetwMrFee s fe Fee Simple Fee Simple Fee Simple I Fee Simple site 2.31 Acres 0.60 Acres Lake 60,000 0.41 Acres Lake 50.000 1.27 Acres Lake 25,000 view Averse Average Averse Average Design S 4-Lvl.Split Rambler Mod.Two Story Rambler Quality of construction Average Average Average Average Actual Age 50+/-Years 33 Years 42 Years 55 Years Condition Averse Average Average Average Above Grade Tar mars .- Tow lwnwj soft -5,000 Tar W. Taw Iq*wJ maa Room Count 4 1 1.00 5 1 2 1 2.00 -5000 5 1 1 1 1.50 3000 5 1 1 1 1.50 -3 000 Gross LWV Area 50.00 1,.533 sq.t 1 972 so.tt -21,950 2,713 sq.R -59,000 1,818 sctt -14,250 Basement&Finished 1532 SF,WO 1972 SF,WO 1352 SF,WO 1818 SF,WO Rooms Below Grade 1532 SF,1.00Ba. 1972SF 0.75Ba. -8,800 500 SF 1.00 Be. 20,640 2062SF 1.00Ba. 10600 Functional utility Average Averse Average Average Hearin cool' FWA C/Air FHA/CA FHA/CA HW/Central EneMy Efkienthems Avg.Enera Eff. Avg.Energy Eff. Avg.Energy Eff. A' .Energy Eff. Garager.ittlion 6 Car Garage 3 Attached 15,000 2 Attached 20,000 2 Attached 20,000 Porch/Patio/Deck Patio&Deck Deck 1 000 Deck&Patio PorchDeckPatio -5,000 2 F/P 2 Fireplaces 2 Fireplaces 1 Fireplace 5,000 None None None None NIA I SP/LP Adimt. -38.914 1 SP/LP Ad'mt. -41,422,SP/LPAd'mt. -47,254 Net Adjustment otall 1 1. X Is 13.6641 . X• Is 12 782 + s 30 104 ; Adjusted Sale Price °'Te'.` Net Adj. -2.046 Net Adj. -1.7% Net Adj. -3.596 - of Co ambles Gross . 20.8% S 686,236 26.0% 732,218 1 Gross Adi. 15.3%1$ 819,79L ITEM SUBJECT COMPARABLE SALE NO.7 COMPARABLE SALE NO.8 1 COMPARABLE SALE NO.9 Date of Prior Sale/Transfer 04/01/1986 11/04/1998 No other record. 07/25/1997 Price of Prior sale/rrarder $115,000,Warranty Deed $125,000,Warranty Deed N/A $287.500.ContractForDee Data Source(s) MLS&County Records MLS&County Records MLS&County Records MLS&Countv Records Effective Date of Data Source(s) 11/05/2010 11/05/2010 11/05/2010 11/0512010 Summary of Sales Comparison Approach Habae arc Fa 7e Mod 2705 vwau a.1 ACIs�+,WO-n Jm.. � cea.e we ram woa Not a emw ADDENDUM Fite No. 6312545 Neighborhood Boundaries The immediate neighborhood boundaries are 63rd Avenue North to the north,Humboldt Avenue North to the east,42nd Avenue North to the south,and Winnetka Avenue North to the west. The immediate neighborhood wdeends approximately 1 mile from the subject Property. Neighborhood Market Conditions According to the Regional MLS Economic and Market Watch Report 2nd Quarter,2010,homes sold for'100.3 percent of the asking price in the subject's zip code. According to the Minneapolis Area Association of Realtors Foreclosures and Short Sales in the Twin Cities Housing Market 2nd Quarter,2010 Update. Lender mediated share was 70 percent of sales. Market values are declining as determined in the 1004MC,consequently the market is in oversupply. Comments on Sales Comparison Sales or Financing Concessions: Sales and financing concessions were adjusted for on a dollar for dollar basis. Date of Sale/Time The contract date was used as the date of sale. Tim adjustments are based on the contract date,not the closed date. According to the RMLS Economic and Market Watch Report values in the subject's zip code appreciated overall by 0,3 percent in the last year. The 1004MC study indicates depreciation. A 1 percent per month time adjustment was made. Sale abbreviation description:SD=Sale Date,COE-Close of Escrow and LD-List Date, Location The subdivision name was used to denote the location. The subject property and the comparables are in the same or similar neighborhoods. No adjustment for this characteristic was warranted, Leasehold/Fee Simple The ownership rights for the subject property and comparables are fee simple. No adjustment for this characteristic was warranted. Site An adjustment was made for site size. View The subject property and comparable sales have similar residential views. No adjustments for this characteristic were ' necessary. Design(Style) No adjustments for this characteristic were warranted. Quality of Construction The quality of construction for the subject and the comparable sales is about the same.No adjustments for this characteristic are warranted. It is average when compared to each other. Actual Age No adjustments were made for actual age. The differences are better addressed in the condition and quality of construction categories. Condition The condition of the subject and of the comparable sales was about the same. No adjustments for this characteristic were warranted. Above Grade Room and Bath Count The subject bedroom count is bracketed by the comparables. Bedrooms were adjusted for at$5000 per bedroom. Baths were adjusted for on a depreciated cost between 1.00 and 2.00 baths at$5000. The first line reflects the bedroom count adjustment,the second line reflects the bathroom count adjustment,and the third line reflects the gross living area adjustment Gross Living Area The gross living area is bracketed by the comparables. The differences in this characteristic between the subject property Addendum Page 1 or 2 ADDENDUM File No. 6312545 and the comparables is adjusted by a depreciated cost factor of$50 per square foot: Basement&Finished Rooms Below Grade The basement finished area is bracketed by the comparables. This characteristic is adjusted by a depreciated cost factor of $20 per square foot Functional Utility Adjustment No adjustments were made for functional utility. The functional utility of the subject property and comparables appears to be similar. Heating/Cooling Heating systems were essentially the same and no adjustment was made. Energy Efficient Items No adjustments were made for energy efficient items. The subject property and comparables appear to have.similar energy efficient items. Garage/Carport The differences in garage stalls between the subject property and comparables was adjusted on a depreciated cost of$5000 per stall. Porch/PatWDeck The difference in the presence or the lack of porch,deck and patio between the subject and the comparables was adjusted for on a depreciated cost basis of$5000,$2000 and$1000. Fireplaces The difference in the presence or the lack of a fireplace between the subject and the comparables was adjusted for on a depreciated coat basis of$5000. Closed Price/Sale Price to Listing Price Ratio The active listings were adjusted to account for the average closed price/listing price ratio of 94.4 percent according to the RMLS Economic and Market Watch Report values in the subject's zip code: More Than a Mile It was necessary to find comparable sales beyond one mile from the subject property due to the lack of similar comparable sales located within the immediate subject neighborhood. Older than Six Months It was necessary to search for comparable sales older than six months from the off market date due to the lack of more recent similar comparable sales located within the subject neighborhood. I Addendum Page 2 of 2 - Touchstone Appraisal Services,LLC Market Conditions Addendum to the Appraisal Report File No.6312545 The purpose of this addendum is to provide the lender/client with a clear and accurate understanding of the market trends and conditions prevalent in the subject neighborhood.This is a required addendum for all appraisal reports with an effective date on or after April 1.2009. Property Address 5306 Perry Avenue North city Brooklyn Center state MN zi code 55429 Borrower Scott Kevitt Instructions: The appraiser must use the information required on this form as the basis for his/her conclusions,and must provide support for those conclusions,regarding housing trends and overall market conditions as reported in the Neighborhood section of the appraisal report form.The appraiser must fill in all the information to the extent it is available and reliable and must provide analysis as indicated below.If any required data is unavailable or is considered unreliable,the appraiser must provide an explanation.It is recognized that not all data sources will be able to provide data for the shaded areas below,if it is available,however,the appraiser must include the data in the analysis.g data sources provide the required information as an average instead of the median,the appraiser should report the available figure and identify it as an average,Saks and listings must be properties that compete with the subject property,determined by applying the criteria that would be used by a prospective buyer of the subject pro)erty.The appraiser must explain any anomalies in the data,such as seasonal markets,new construction,foreclosures etc. Inventory Analysis Prior 7-12 Months Prior 4-6 Months Current-3 Months Overall Trend Total#of Comparable Sales(Settled) 56 27 23 Increasing Stable X Declining Absorption Rate(Total Sales/Months) 9.33 9.00 7.67 Increasing Stable X Declining Total#of Comparable Active Listings 25 49 70 Oechnmg 11 Sfeble X Increasing Months of Housing Supply(Total Listings/Ab.Rate) 2.68 5.44 9.13 7 DecGnin 1-1 Stable I X I Increasing Median Safe&List Price,DOM,Sale/List% Prior 7-12 Months Prior 4-6 Months Current-3 Months Overall Trend Median Comparable Sale Price 139,950 145,000 103.000 Increasing Stable X I Declining Median Comparable Sales Days on Market 53 44 61 Declining Stable X Increasing Median Comparable List Price '145000 ` 132500 ` 129,900 Increasing Stable" X Declning'; _. Median Comparable Listings Days on Market _ 72 81 _ Des6dm ,l(',S - - I{uc,. Median Sale Price as%of List Price 99.53% 100.00% 94.44% Increasing Stable X Declining ._ Seller-(developer,builder,etc.)paid financial assistance prevalent? I X JYes No Declining X Stable Increasing Explain in detail the seller concessions trends for the past 12 months(e.g.,seller contributions increased from 3%to 5%,increasing use of buydowns,closing costs,condo fees,options,etc.). According to the NorthstarMLS homes sold for 100.3 percent of the asking rice in the subject's zip code. The above 94.44 percent figure was used to adjust the listings. Are foreclosure sales(REO sales)a factor in the market? 0 Yes LJ No tt yes,explain(including the trends in listings and sales of foreclosed properties). According to the Minneapolis Area Association of Realtors Foreclosures and Short Sales in the Twin Cities Housing Market September 2010 U date. Lender mediated share was 70 percent of sales. Cite data sources for above information. NorthstarMLS Summarize the above information as support for your conclusions in the Neighborhood section of the appraisal report form.If you used any additional information,such as an analysis of pending sales and/or expired and withdrawn listings,to formulate your conclusions,provide both an explanation and support for your conclusions. The subject's market is declining. If the subject is a unit in a condominium or cooperative project,complete the following: Project Name: Subject Project Data Prior 7-12Months Prior 4-6 Months Current-3 Months Overall Trend Total#of Comparable Sales(Settled) increasing Stable Declining Absorption Rate(Total Sales/Months) Increasing Stable Declining Total#of Active Comparable Listings DacHnat' ' Stable tnnueasing" Months of Unit Supply(Total Listings/Ab.Rate) DecliningSable. ., ,Ittgea5m A Are foreclosure sales(REO sales)a factor in the project? Yes No d yes,indicate the number of REO listings and explain the trends in listings and sales of foreclosed properties. Summarize the above trends and address the impact on the subject unit and project. APPRAISER SUPERVISORY APPRAISER(ONLY IF REQUIRED) Signature tM W. Signature Name John.Gnf .rf Name Company Name Touchstone Appraisal Services,LLC Company Name Company Address 3744 Cleveland Avenue,#125 Company Address Arden Hills,MN 55112-3265 State License/Certification#4000624 State Minnes State License/Certification# State Email Address johngrif @earthlink.net Email Address FiCddi Mac Fa m 71 Mar&2OD9 mu„c�4 usxc h...wrtxe„B�:<']a F','wwsrnvz0mm Fe Mae Form 1004mc March 2009 Fd9f 1 d 1 1WM1_POS OAA05 SUBJECT PROPERTY PHOTO ADDENDUM Borrower:Scott Kevitt File No.: 6312545 Property Address:5306 Perry Avenue North Case No.: City: Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank ,aTaR=,r-as - - FRONT VIEW OF SUBJECT PROPERTY s Appraised Dater November 5,2010 { Appraised Value:$600,000 ,° . .; xA � ^u c h r REARVIEWOF SUBJECT PROPERTY 4 i STREET SCENE s. v y T 6 i i 1 SUBJECT PROPERTY PHOTO ADDENDUM Borrower:Scott Kevitt File No.: 6312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank x; . FRONT VIEW OF SUBJECT PROPERTY Appraised Date:November 5,2010 Appraised Value:$660,000 5 REAR VIEW OF SUBJECT PROPERTY x STREET SCENE COMPARABLE PROPERTY PHOTO ADDENDUM Borrower:Scott Kevitt File No.: 6312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank • i r COMPARABLE SALE#1 l ' 6435 Eagle Lake Drive :.� Maple Grove MN 55 369 r r Sale Date:09/1612010. ' Sate Price:$660,000 I COMPARABLE SALE#2 267 Peninsula Road Medicine Lake,MN 55441 ? Sale Date:12123/2009 Sale Price:$600,000 matt COMPARABLE SALE#3 4400 25th Street West- St.Louis Park,MN 55416 Sate Date:04/26/2010 Sale Price:$530,000 COMPARABLE PROPERTY PHOTO ADDENDUM Borrower:Scott Kevitt File No.: 6312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank it I COMPARABLE SALE#4 t 2601 Silver Lane NE St.Anthony,MN 55421 Sale Date:11/09!2009 s . Sale Price:$521,000 COMPARABLESALE#S Sale Date: Sale Price:$ COMPARABLE SALE Sate Date: Sale Price: COMPARABLE PROPERTY PHOTO ADDENDUM Borrower:Scott Kevin File No.: 6312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank COMPARABLE SALE#7 d 12500 58th Avenue North Plymouth,MN 55442 Sale Date:Active Listing Sale Price:$699,900 COMPARABLE SALE#8 1432 18th Street NW New Brighton,MN 55112 Sale Date:Active Listing Sale Price:S 745,000 COMPARABLE SALE#9 r 1040 Angelo Drive Golden Valley;MN 55422 r. Sale Date:Pending Sale Sale Price:$849,900 FLOORPLAN Borrower:Scoff Kevin File No.: 8312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank w � R 0 s Sketch by Apex IV Windows"" AREA�ALCLJLATlONS'SUMMiRY IIVtNf� ft EAKOOWN Coos `" DuaH on _.8iri-.s tOte(s :` BMkdewn. $ubtdb�k aLal First Floor 1532.50 -1532.50 First door DOW Dasaoaat 1532.50 1532.50 25.0 x 30.5 762.50 aarags :572.00 572.00 27.5 x 28.0 770.00- ` TOTAL LIVABLE (round 1533 2 Areas Total(rounded) 1533 3744 Cleveland Avenue,#125,Arden Hills,MN 55112-3285 PLAT MAP Borrower:Scott Kevitt File No.: 6312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center" State:MN Zip:55429 Lender:Fifth Third Bank !Hennepin County Property Map - Tax Year: 2010 The lots wittao,ad on 9+9sa demad from s cempdeLan of rear+ds and xiaps aMysentaw dnaapanews that can any Oe dsdoaa6 ty an aCanit sarwY 9eRe by a linnsad 4nd sweeyor.The ommrter.anr.awe(-o-.foo".and acre)ane aaa onotes and n ov cawn diamaaanws TM iideermatam on Ono Page eho>dd 6e used for 10—o. -MY.� 1 Hennapm County does not 9—Ame the aGturaeY of natant hmift t&,nod and m not tesaon ible for any mows or mioppn tm mam of thn admmatiori er da dwk,.Coes. 5320 i i I I $Ila )j aatR" i A :Ff C # x s S r � .. .y ♦..�., .. . `§? ,. .... : y .ts a � ""` �:titlMt t.. 4 s "} r III � it i J , S y' 'ry,V ,Z.dG3pFt-{ 1 s N Selected Parcel Data Date Prirmd:1116/20io 1;30-17 Phi Parcel IDs 10-118-21-2;=0001 current Perot!Dow,ll/sj.291D Owner Name:SCOTT KEVITT Parcel Address:5306 PERRY AVE N,BROOKLYN CENTER,MN 55429 Property Type:RESIDENTIAL LAK Sale Price:$115,500.00 Homestead HOMESTEAD Sale Date:0411 Area(sgft):100687 Sale Code:WARRANTY DEED Area(acres):2.31 A-T-8:ABSTRACT Market Total $675,800.00 Tax Totals$11,296.60 3744 Cleveland Avenue,!#125,Arden Hills,MN 55112-3265 LOCATION MAP Borrower:Scott Kevitt File NO.: 6312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center State'MN Zip:55429 Lender:Fifth Third Bank .'S w N: Bphle Aft 00 t 4T ,1161f+11i 't 884m •. den � f}. t' s.`.• �M � � �:� �� �µ v X t }i yn N 269�'tliwer of NE S UaSnD3 a r e !' ?' I i N r ��''... .-{sd`� ..� ; ._ .. i •.'rid A�.{i x• y i. i usaos - Data use subject to license: Q DeLotme:DeLorme Street Alias USA®2011_ N 2 3 www-delorme.com MN(0.8°E)' Data Zoom tat 3744 Cleveland Avenue,#125,Arden Hills,MN 55112-3265 Borrower:Scott Kevitt File No.: 6312545, Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank Ii [ STATE OF MINNESOTA t GRIFFIENDOO,JOHN NtAt CiSR jjjj a The !#f fwr#�r#IbrMat artMArrl�t", 3744CLEi!@WIi Me" AROM M!",#M 551112-UM tim=nVW*011h b1e gw+s'pt e.BtMt Ot taunnMOle and t by No tMe io ksr�wct ltue mat" �AppniiMr:ri: •! " unlMS iMs aupwAty ds a�lPrntdaef. .KIlpl�fwll"i1W19r THs �I ►tMAdD! UM AuqustAl, 2t11z mTUTWOR 13►iGW.�Nwaram�ositillgrlrr :this #i,"iEClftk. F 1 30 85 F a Ew ffi-PauLl� Nekptitelfs:(r 1}m4wo, tAraherh�at+enkn�aaonur � x`a + �;; Notwo.� &lua�ra�w�tbhwrd� 1uluifiMlri�w iwaWws'fUadfltairlP's�leiRaeksas_" `.. 3744 Cleveland Avenue,#125,Arden Hills,MN 55112-3265 Borrower:Scott Kevitt File NO.: 6312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center Stater MN Zip:55429 Lender:Fifth Third Bank ffi I 5 `��'...i�id� .��;/��f�� � Y^'T' •,« 3sIC AVEN f I ai of 3)� t[ M ,E3. P-. e , 1�ga MiX EVE» asjIl u E L 0 0.25 0.5 1 Moss ZONING DISTRICTS C1 02 R2 C1/R1 PUDICIA R3; RESIDENCE INDUSTRY C1/R5/R4 PUDIC2 R4 RT-TMOfNALY REDIOENCE G-OEIiERK ttDIMTRY ' 10.1A1ATg1E FAWY EEE10ENfE OPEN SPACE C1A PUDAI R5 r (T—A 0w6nAPPe ) M.RtR.TIPff fAM0.° 01-PUN-*-dPM SPACE RESERVED V W2P 28-w 02-PMIC MR)PRIVATE OPEN SPLICE RESERM RS.ittta"31q.Y B l�ipENCE PL44NM UNIT DEVE�OPMENr G2 � PUD/R1 � R6 &&T"31 e COMMERCE PUIWIt PLANNED UNIT pEVE10PAENT :.:... c,.EEEIn�EIt>rfcE (ft w4ft"v nmv Ua.pASrou Petrol ,. 11 PUDIR3 R7 Reelmmf nA.eEelTrc{afncE •+«EPI•r,gXS fgn+N ) m-affiallam - 12 PUDMiXED oeR.AY 160 YEAR FLOOD ELEVATIONS AT SELECTED LOCKnON6 WATERWAY LOCATM ELEVATIM("N9V6) I 01 I R1 xrEAlOawaw o Critical River Boundary 0 Central Commerce District E CIty Parks 3744 Cleveland Avenue.#125,Arden Hills,MN 55112-3265 Borrower:Scott Kevitt File No.: 6312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank U.S. Census Bureau mil { Search You are here: Main ►Search►Advanced Geography Search general search keyword geography Choose a geography selection method list name search address search map ■ Select a year and program _ Census 2000 ■ Enter a street address,city and state,or a street address and ZIP code.Crick 106 Street Address Quick tip 5306 Perry Avenue North City State ZIP Code Brooklyn Center Minnesota ` 55429 ■ Geographies containing 5306 Perry.Ave N.Brooklyn V ettber,Minne"U,'6 9: ,aelect_q geography and_click OK`. State:Minnesota County:Hennepin County ....County Subdivision:Crystal city I ; Census Tract:Census Tract 207 Block Group:Block Group 3 .....Block:Block 3014 Voting DistrictlRemainder:Crystal W-4 P-1 Va ft:Cihaoat ..,� ..Traffic Analysis Zone:723 AYE M6wP 9 c' tfd0, < o • ►iwu tats "Ti AVE.N. FIRM PCOY " FLO" INSIOUNCE un ft? ikt Vie: ZONE X t 70111# 57 ; 5M AVE.Ic t+JISEt N M M AUK �{1,1r 1101a 1W4/,iA 1NtB YY9UN N p OA bAbaP 4lKYR a: fY4 r r W rwrarr we. do t Z to AVE. N. Mwea.ier• ser -e ,WT Z Si AVE.N. FT- ZONE wow xt meamo LM RrYN Nrl/rr.ysr rw. rrr-ra rrw aiy: ' wl�wOatMf�PaNT�w T,•Wylkr,1pflMRaFerw wraa.grwt� �o+ `irr«r��hw�giwrwo. -. iwpM„aaYwp•Nwek Ne,�aAlWey,NPelw.ssrwcnir, 3744 Cleveland Avenue,#125,Arden Hills,MN 55112-3265 Borrower:Scott Kevitt File No.: 6312545 Property Address:5306 Perry Avenue North Case No..: City:Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank Water Filter&Water Softener h 1 t.., High-efficiency Water Heater Electrical Service Borrower:Scott Kevitt File No.: 6312545 Property Address 5306 Perry Avenue North Case No.: Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank Garage Floor beating .:.. Family Room li Furnace t� �R y �a i } : i� Ili r I Ili Borrower:Scott Kevitt File No.: 6312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center State:MN Zip:55429 Lender:Fifth Third Bank Bedroom t v Bath r_ Laundry Room ` �V Borrower:Scott Kevitt File No.: 8312545 Property Address:5306 Perry Avenue North Case No.: City:Brooklyn Center State:MN Zip-55429 Lender:Fifth Third Bank Bedroom Dining Room } Kitchen jp Borrower:Scott Kevitt File No.: 6312545 ProaeMf Address:5306 Perry Avenue North Case No.' City:Brooklyn Center State:MN Zip:55429 Lender Fifth Third Bank Living Room F� Master Bedroom r� w y ` L -, ,. :. Master Bath- x h v Borrower:Scott Kevitt Fite No.: 6312545 Property Address:5306 Perry Avenue North Case No.: City:Brookhp Center State:MN Zip:55429 Lender:Fft Third Bank Garage Garage -— to "'R� � �.` s" ,� •- st� t t COMPLIANCE CERTIFICATE ORDER NUMBER: 6312545 DELIVERED TO CLIENT ON: 11-09-2010 PROPERTY ADDRESS: 5306 Perry Ave.N., Brooklyn Center,NIN 55429 CoreLogic Valuation and Property Solutions(VPS),a premiere,nationwide provider of appraisal management services,certifies to the best of its knowledge that the appraisal for the above-referenced property was completed in compliance with the Home Value Code of Conduct(HVCC)or applicable requirements of the Federal Housing Administration(FHA). VPS provided no estimates of value,desired value or loan amounts to the appraiser.For purchase transactions, the purchase agreement was provided to the appraiser to assist the appraiser with complying with the Uniform Standards ofProfessional Appraisal Practice Standards Rule 1-5(a)and Federal National Mortgage Association's guidelines. VPS is responsible for appraiser selection,retention and compensation."Appraiser selection"considers the following:appraiser panel member status,competency to complete the order,proper licensure,quality, service and turn times metrics,and current capacity. . VPS has HVCC-compliant processes for removing appraisers from its panel,which include appraiser notification,as well as for ordering second appraisals. . VPS recognizes and fully supports the functions of the Independent Valuation Protection Institute(when instituted)and provides training to its employees on appraiser independence. VPS maintains an appraiser independence hotline for reporting any suspected undue influence or impropriety at(800)363-0841. CoreLogic Valuation and Property Solutions 5 Cherry Hill Drive, Suite 200 Danvers, MA 01923• www.coreloizic.com C4'PQ Leg(c° s cne.ry Mni Drive,Ste.zoo,Danvers,MA 01923 Invoice ORDER INFORMATION ORDER RECEIVED DATE ORDER NO. INVOICE DATE CLIENT NO, INVOICE NO. 10/25/2010 11:07 CT 16312545 11/09/2010 10:38 CT 3004824 1631254S, BORROWER PROPERTY ADDRESS CTfYATATE ZIP Scott Kevitt 5306 Perry Ave. N. Brooklyn Center,MN 55429 CUSTOMER REF/TRACI(ING NO. LOAN/ACCOUNT NO. REQUESTOR 0411546864 5th 3rd 2300943 INVOICE INFORMATION BILL TO MAIL PAYMENTS TO(PLEASE NOTE CLIENT AND INVOICE NUMBERS ON CHECK) Fifth Third Bank-Wholesale CoreLogic Valuation Services, LLC Attn: Accounts Payable PO Box 848550, 5001 Kingsley Drive, 2nd Floor Dallas,TX 75284-8550 Cincinnati,OH 45227 For Billing Inquiry: 800-281-6200 Phone 800-845-2203 Fax PRODUCT DESCPJVnoN PRICE 1004 URAR Single Family 460.00 Credit Card Payment -460.00 I TOTALS 460.00 I NET DUES .00 COMMENTS Total amount due net 30 days upon invoice date. If you have any questions regarding this invoice please e-mail AceounffiReceivabie*CoreLoyic.com or call 800-791-7146 CITY OF BROOKLYN CENTER LOCAL BOARD OF APPEAL AND EQUALIZATION 2011 Assessment APPLICATION FOR APPEAL February 21, 2011 through March 18,2011 You must return this application by March 18, 2011, to be placed on the Agenda for the Local Board of Appeal and Equalization held April 4, 2011 at 7:00 P.M. Name(s) � Daytime Contact Number: Property Address Q/ 4.P ems!'-- Property Identification Number_O Assessor's 2011 Estimated Market Value :3V;2 401 Is your property residential, commercial or multi-family? If you are appealing a commercial, multi-family or residential rental property you must include inco a and expense data for calendar year 2010 with your application. What is the reason you are appealing your 2011 assessment? .� cs When did you purchase our ome? Date of Purchase �' / Purchase Pricep Did you purchase your property from a bank, as a foreclosure or short sale? Has your property physically changed since the purchase? (maintenance, upgrades, remodeling or structural damage) Please list a brief description below with an estimated cost. Have you had a recent appraisal for refinancing, a purchase agreement or a market analysis by a real estate agent completed within the last year? Yes or No If so, what was the determination of value? What do you think the mar et value of our property/should be? Y Y ���----'--- Please,provide any documentation supporting your claim of overvaluation or erroneous classification with this application. Report Name: Taxpayer Inquiry City of Brooklyn Centel' Printed:4/4/2011 Taxpayer Inquiry Pager 1 Display PID House Nbr Street Name Unit Zill Code L2 03-118-21-31-0082 5601 Indiana Ave N 55429 Last Name First Name mi Owner Taxpayer Resident Bryskina Ludmila Y Y Y Bryskin Leonid Y Y Y Frontage Left Side Rear Side Right Sid Eff.Width Eff.Depth Property Area Acreag e Z n'n P/S Exempt Code School Dist Watershed Yr Built 84 162 82 162 84 162 14,323 0.00 RI 0281 13 1963 Year Ver #Subs Land Value Bldg Value Mach Value Tot Mkt Value- Tax Cali Hrnstd Midvr Rel H P/T % wn P/C 2011 1 1 150,000 151,300 0 301,300 3,013 Y N N RL 100 N 2010 1 1 169,800 155,200 0 325,000 3,250 Y N N RL 100 N 2009 1 1 179,300 160,000 0 339,300 3,393 Y N N RL 100 N Lot: 000 Block: 000 Addition: Registered Land Survey No.0960 Hennepin County,Minnesota TRACT B 'S - Mariner Professional Services 2355 Fairview Avenue#200 Roseville,MN 55113 PhoneiFax:(612)216.2573 Toll Free/Fax:(877)233.9606 Web:www.mariner-os.com Email:infogbmariner-ps.com FEMA Elevation Determination Letter 8601 Indiana Avenue, Brooklyn Center, MN 55429 - March 15,2011 Ludmilla Bryskina 9132 35th Ave N New Hope,MN 55427 Dear Ludmilla: I have completed the elevation determinations for the property located at 8601 Indiana Avenue in Brooklyn Center,MN. Following final computations and map elevation determinations,and adjusting to the proper map datum,the final structure elevations areas follows(all elevations NGVD29): Lowest Adjacent Grade LAG back door opening facing lake 854.6 100-Year HWL of North Twin Lake(from Hennepin County Flood Insurance 855.5 Study summary of stillwater elevations Other Elevations(FYI): Garage Floor Elevation=855.9 Upper Floor Elevation(south side of home)=863.1 The elevation determinations were conducted using GPS CORS base/rover system and multiple shots were taken surrounding the perimeter of the home and at home entrances. The estimated accuracy range of those shots are less than 2 tenths of a foot.The shots were verified with benchmarks(known elevations)which include two hydrants located on Indiana Avenue,and a MNDOT"Sears-2"benchmark. ' When researching similar properties along Twin Lake and Indiana Avenue,a nearby property, (-'n 5607 Indiana,has qualified for amap amendment(out of floodplain). The yearly difference in costs for flood insurance is estimated to be over$1200 per year for 5601 compared to 5607 and should be considered when comparing the 5601 property to other similar lake properties on Indiana Avenue. The 5601 property is also located at the lowest street point on Indiana Avenue. The work was performed under my supervision and I am a licensed engineer within the State of Minnesota. The elevations show the above property has a LAG that is approximately one-foot below the FEMA established 100-Year flood elevation and is a higher risk for flooding based on FEMA policies. The LAG of this property is located immediately adjacent to North Twin Lake. If you have any questions, let me know. Sincerely, G Adam arker,PE(WI,MN),President Mariner Professional Services ' t i � u Mhfl'4Pr0i d0 uimlish�ihip .' 15430 W.Capitol Drive,Suite 1001 Br(x-)kficld,WI 53005 VI lelr. {2G2):373-079( TTax.. (362) 373-1641 Toll .rcc. (8£1$)834-6655 It's YOU that natters! 2/21/2011 Leonid Bryskin 627307 Method of Delivery: _X_1 st Class Mail Email Dear Leonid Bryskin: Enclosed is a copy of the appraisal report(s) that will be used in connection with your current loan application. To comply with our lending policies, we may provide you with multiple appraisal reports for the following reasons: 1) our underwriting policies require more than one appraisal to evaluate your loan application; 2) our appraisal quality process produced a review appraisal report in addition to the originally ordered appraisal report; or 3) we received a request for reconsideration of value from you or on your behalf resulting in a new appraisal report or a revised value on your originally ordered appraisal report. Please note that at this time we may not have fully determined the acceptability of the enclosed appraisal(s) for use in connection with your loan application. The appraisal(s) used in connection with your loan application was or were prepared solely for our use in evaluating your loan application. The appraisal(s) should not be relied upon by any other person or entity. We make no express or implied representation or warranty of any kind, and we expressly disclaim any liability to any person or entity with respect to the appraisal(s). Please also be advised that an appraiser must follow certain professional appraisal standards and is not allowed to discuss the appraisal(s) with you or provide a copy of the appraisal directly to you Sincerely, u�.u,✓a �,�esao Amanda Ulens Quality Control/Compliance Member Better Business Bureau of Wisconsin Bwmwff/CIW LeoNd SryskhIludmHa Bryskina File No. 627307 PrOperty Address 5601 Indiana Ave N City Brooklyn Center CourdY Hennepin State MN ZIP Code 55429-2901 Caert GSF Mortgage C2,Wation TABLE OF CONTENTS Letterof Transmittal..:.... ...................................................................................... ...................................... ......... ................. 1 Cover Pap ..........° . ........ ......... ......... .............................. ........ ......... ......... .................. 2 t1RAR....... .... . .................. .. ............................. .... ........ ......... ................ 3 Add9iorW Comparables 4.6 ...:..... ........:..................... .............................. ......... ...... ................. 9 AdditionalCompares 19................... .............................. .............................. ......... ........ ......... ................. 10 Supplemental Addendum .......:.. ... .: .. ........ .............................. ......... ......... ........: ::..............1 11 Market Conditions Addendum:........._: . .......................... ............................. .............................. ...................................... 12 BWWVSiattch(Page-1)...................................... `. ................................................... .....:... ........ ....................:............: 13 SubjectRON...................................................................................................................... .......................................... ....... 14 SubjectPhotos(3)....................... .. ........................:...................1........................... ......... ........................................................ 15 Subject Photos(4).......... ..... ................. 16 Sit Photos(6).......: ......... . ........ .....................I........ .......... . ....... ......... .. 17 Subject Pholos(3)........ ........ ..: ...... ..................................::...................................: ......... ......... .................. 16 Comparable Photos 1-3 ......... ......... ......... .............................. ......... ............. 19 Comparable Photos 4.6 ......... I ......... ........:..................... ......... .................. 20 ComparablePhotos 7-9.................................................................................................................................................................................................... 21 Location Map ........: .......: ......... ......... .............................. ............................. ........ ................ 22 RoodMap..............:........................................................................................................................................................................................................... 23 Appraiser's License...........................`. : . ..................................................................... ......... .....: ....... 24 Form TOMP—WnTOTAL"appraisal software by a Is mode,Inc.—1-MALAMODE I' I FWain File No.627 Home Run Appraisals' ' 13314 Narcissus St NW Andover,MN 55304 (763)576-3055 http://www.HomeRunAppraisals.com 02/18/2011 GSF Mortgage Corporation Brookfield 15430 West Capitol Dr Brookfield,WI 53005 Re: Property:' 5601 Indiana Ave N Brooklyn Center,MN 55429-2901 Borrower. Leonid Bryskin/Ludmila Bryskina File No.: 627307 Opinion of Value:$ 272,000 Effective Date: . 02/17/11 In accordance with your request,we have appraised the above referenced property.The report of that appraisal is attached. The purpose of the appraisal is to develop an opinion of market value for the property described in this appraisal report, as improved: This report is based on a physical analysis of the site and improvements,a locationad analysis of the neighborhood and city,and an economic analysis of the market for properties such as the subject.The appraisal was developed and the report was prepared in accordance with the Uniform Standards of Professional Appraisal Practice. The opinion of value reported above is as of the stated effective date. It has been a pleasure to assist you.Please do not hesitate to contact me or any of my staff if we can be of additional service to you. Sincerely, Mark Sibinski License or Certification#:2031-2901 Certified Residential Real Property State:MN Expires:8/31/2011 HomeRunAppraisals@comcast.net www.HomeRunAppralsals.com [Main File No.62730PTPioe—#� HR11-1946 Uniform Residential Appmlsal Re art File#627307 The purpose of this summary appraisal r ort is to provide the lander/client with an accurate,and ad uat supported,a idon of the market vakm of the subject property. Propn Address 5601 Indiana Ave N City Brooklyn Center State MN Zip Code 55429-2901 Borrower Leonid B kin/Ludmila Bryskina Owner of Public Record GRAYDON R BOECK County Hennepin Legal Description Lot 0 Blk 0 REG.LANDSURVEY NO.0960 Tract B Assessor's Parcel# 0311821310082 Tax Year 2010 R.E.Taxes$ $5,313.34 N'hbOrhood Name BROOKLYN CENTER Map Reference 92 Al Census Traci 0204.00 Oc ant Owrter Tenant El Vacant Special Assessments$ 0.00 Ej PUD HOA$N/A per year El Per month Pro Ri s Appraised fee Si Leasehold Mw(describe) Assignment Type Z Purchase Transaction Refinance Transaction Otter describe Lender/Client GSF Mortgage r t Address IWO West Capitol Dr.Brookfield,WI 5300 Is the subject property currently offered for sale or has If been offered for sale In the twelve months rto the effective date of this appraisal? 9 Yes El No Re ort data sources used offering price(s),and dates. oT S I Z did ❑did not analyze the con4ct for sale for the subject purchase transaction.Explain the results of the analysis of the contract for sale or why the analysis was not performed. The subJect has an executed ourchase agreement for$272,000 dated 12110/10. Contract Price$272,000 Date of Contract 12/10/10 Is the properly seer the owner of pubic record? MYes No Data Solaces Tax Is there any financial assistance(ban charges,sale concessions,gift or downpaymerd assistance,etc.)to be paid by any party on behalf of the borrower? [:]Yes No If Yes report the total dollar amount and describe the ltarc to be paid. None Noted Note:Race and the racial composition of the neighborhood are not aoDralsal factors. Location El Urban 0 Suburban Ronal Values U Increasing Stable m LJ Declining PRICE AGE One-Unk 70% Buift-up I ISUDDIV Shortage Z In Balance Over S $000 rs) 2-4 Unit 5% Growth Li Ranid Stable Slow Market Time Under 3 rmahs 3 fi rtalhs Over 6 mths 40 Low 17 MUIIJ•Fa� 5% Neighborhood Boundaries The sub'ect is bounded b Hwy 610 on the North The Mississippi River on the 240 High 81 Commercial 10% East 1394 on the South and 1694 on the West. 130 Pred 50 Other '10 % Neighborhood Desc`tion The subject is in a desirable neighborhood of single family homes with compatible styles and vak>es.Some have lakefronts lakeviews or deeded Take access.Local shoppin schools and em ent ara witM 3 miles. `Other=Vacant MarW Conditions(Inckrding support for the above conclusions FinarwAng is readily available to qualified borrowers at market rates....typkial P011ft paid by severs rancie from 0 to 5. Dimensions E 89X170X82X180 Area .32 Acre Shape RectarwtAar View Lakefront Specific Zoning Classification R-1 Zoft Description S' le Family Residential ZoA Corn ante Z Legal Legal Nonconforming Grandlathered Use No Zoni al describe Is the highest and best use of subject as improved or as proposed per plans and specifications)the present use? IR Yes No t No,describe tRubw Public Othher(describe) Publk O#w(describe) al-she vanants-Type Public Private Electrk� 150am Fuse/Brkrs Water 0 El Street AsOaft Gas Sanitary Sewer Z 0 Alley None Li FEMA Special Flood Hazard Area Z Yes No FEMA Flood Zone AE FEMA Ma # 27053CO212E: FEMA Map Date 912/2004 Are the utilities and off-site Improvements.typical for the market area? Myes No t No,describe Are there any adverse site conditions or external factors easements encroachments swronhmerdaf conditions,land uses etc.)? Yes 0 No t Yes describe There were no adverse conditions apparent. 474 Unite One Omre with Accagory Unit Ll Concrete Slab Crawl Space Foundation Walls Concrete Block/Gd Floors CPtCerVyUGoocI #of Stories 1 Full Basemerd F1 Partial Basetent Exterior Walls SteeiStone/ ood Wass DrywalltGood Type M Det. Att. S-DetAnd Unit Basement Area 1,604 s-ft.Roof Surface As haltSh' Ies/New Trim/Finish Oak/Good Existing Proposed D Under Const,Basement Finish 75 %Gutters 8 Downspouts Yes/Good Bath Floor Qe[@mWGqod Desi h(Style) 1 Story Outside EviryNt Sump Runp Window Type Casement/Good Bath Wainscot CeramWGood Year Built 1963 lEvidenceof Westation NoneNtd Storm Sash/Insulated Insulate Good Car Storer Nobs Effective Age(Yrs) 0 Dampness. Settlerrhent Screens Yes/Good Driveway #of Cars 4 Attic I None Heafi FWA IN HWBB Radiant Arnerdtes n Woodstove s # Drivewa Surface Conc/Good Drop Stair Ll Stairs IFuel Gas Z Fir aces # 2 Fence PartFen Garane #of Cars 3CarDet Lj Floor 2 Scuttle Cooling Central Air Conditioning M Patio/Deck Both Pesch Cvd x 2 Carport #of Cars Finish ed Heated 1dividuai Other Poo Other BoatHous At. M Det. El Built-in Appliances Redd erator M Ran m Z Dishwasher g Disposal 0 Microwave Washer/Dryer Other describe BI BBQ Grill Finished area above grade contains: 6 Rooms 3 Bedrooms 1.5 Baths 1,6o4 are Feet of Gross Living Area Above Grade Additional features(special energy efficient terns etc.. Se Addendum. Describe the condition of the property Mchiding needed.repairs,deterioratiah runtions remodefing,etc.. Minimal physical depreciation.No functional or external obsolescence was observed.The sub ect is in aood condition and of 000d quality construction.No repairs are re wired. Are there any physical deficiencies or adverse conditions that affect the livability,sou Buss or structural integrity of the property? Yes No t Yes describe Does the property generally conform to the neighborhood(functional difily,style,condition use construction,etc.)? Z Yes El No If No,describe Freddie Mac Form 70 March 2005 Page 1 of 6 Fannie Mae Form 1004 March 2005 Form 1004—"WknMTAL•appraisal software by a b mode,inc.—1-800-&AMORE HR11-1946 Uniform Residential Appraisal Report Fie#627307 There are 9 comparable properties currently offered for sale in the subject neighborhood ranging in price from$ 164,500 to$ 575 000 Three are 13 cOmpar able sales in the sub nei hborhood within the past twelve moms r ' in sale ice from$ 119900 to$ 836,200 FEATURE SUBJECT COMPARABLE SALE#1 COMPARABLE SALE#2 COMPARABLE SALE#3 Address 5601 Indiana Ave N Brooklyn Center MN 55429-2901 4741 Perry Ave Crystal,MN 55429 5046 Quad Ave N Crystal,MN 55429 6633 Eagle Lake Dr Maple Grove MN 55369 Pr to subject 7 1.22 miles SW 10.92 blocks SW 3.84 miles W Sale Price $ � 272 000 $ 210 000 ':. ,.. ll$ NUN Is 300,000 Safe Price/Gross Liv.Area 169.58 s.ft: $ 141.60 s.it. $ 193.55 s-ft. $ 195.95 s.ft. ,.°" Data Sources l^, .,.:` 183 CDOM-MLS 31 CDOM-MLS CDOM-MLS Verification Sources Courtly Records County Records Coun Records VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION 41 S Alliustment DESCRIPTION I t• $Adjustment DESCRIPTION + $Md stmerd Saks or Fhlatfcing, Concessions .; FHA 9400 -2100 Come NoneNOted Caw NoneNoted Date of Sale(Time ,"r 0 /11/11 02125110 04/01110 Location Suburban Suburban Suburbardinf +5,000 Suburban/Su -35,000 Leasehold/Fee S' Fee Simcde Fee Simple Fee Simole Fee Simple Site .32 Acre :22 Ac +2.500 .31 Ac .24 Ac +2 000 Mew 2'Lakefront 0'Lakefront 90'Lakefront Lek front 200 Des le 1 Story 1 Story 1 story 1.5St Quaff of Construction Good Equal E u 1 E ual Actual Age 48 55 +3.50048 69 +10,500 Condition Good E ual E ual Su error -115 000 Above Grade Total B#=. Baths Total Bdrms. Baths Total Bems Baths Tots I Bdrms.1 Bahl Room Count 6 3 1.5 6—T-3 1 +I,QO0 5 1 2 11.6 +2,000 5 1 3 1 2 -1.000 Gross '' Area 1,604 s .fL 1,483 s.fL +4,200 1,240 s.ft. +12,700 1,531 s-11L Baserrea3Finished Rooms Below Grade FulUWO 1203 Floished Partial/WO 1296 Finished +6,000 Fua/WO 900 Finished +3.000 Partial 0 Finished +9,000 +12,000 Functional Utility Good Eoual E ual Equal Heating/Cooling GFA/Central GFAtCentral GFA/Central GFA/None +1500 Energy Efficient:Ran Typical Equal Equal Equal G Caz ort 3CarDet 2CarB1 +5,000 2CarAtt +5.000 1 CarBl +10,000 PorchlPaDA/Deck idle shd ten Dk Pat Fen 3sn +4.000 Dk Patio Fen +7,000 Dk 3sn +5,000 Fireplace(s) 2FP 2FP 1 FP +2,000 1 FP +2,000 • Net Ad' old + $ 24100 Z+ is 36,7001 + $ -2,200 Adjusted Sale Price N C Net Mi. 11.5 %1 Ad'. 13.5 %1$ 234,100 Net Mj. 15.3 % Gross Ad j. 15.3 % $ 276 700 Net Adj. 0.7 % Gross Ad'. 35.4 % $ 297 800 U"did I did did not research the sale or transfer of the subject o and comparable sales.h lain My research El did 2 did riot reveal any prior sales or transfers of the subject property for the three years prior to the effective date of this appraisal. Data Sources Tax/MLS My research did 0 did not reveal a——lor sales or transfers of the comparable sales for the year prior to the date of sale of the comparable sale. Data Sources Tax/MLS Report the results of the research and analvsis of the odor sale or transfer history of the subject propedNy and c arable sales(reDorl additional sales on page 3). ITEM SUBJECT COMPARABLE SALE#1 1 COMPARABLE SALE#2 COMPARABLE SALE#3 Date of Prior Sale/Transfer None in 3 years None None None Prkx of Prior SWransfer None None None None Data Source(s)C0 .Tax/MLS Co.Tax/ML CO.Ta)dMLS Co:TaYJMLS Effective Date of Data Sources 02117/11 02/17/11 02/17/11 02/17/11 Analysis of prior sale or transfer history of the subject property and comparable sales The sub*ect has not sold in the as 36 months. The compo have not sold in the 12 months prior to sale date fisted above on each.Source:Tax/MLS Summary of Sales Comparison Approach All camps were considered in the final analysis for their relative similarities to the subject. Awro)dmate Montinly Taxes:$442.78 Indicated Value by Sales Comparison Approach 272,000 Ntdicated Value by:Sales oach$ 272 000 Cost roach H developed)$ N/A Income AWoach(Y de $ WA Most welaht was given to the sales comparison analysis as it is the most reliable indicator of value.Cost approach is no r r ukad by • Fannie Mae.Income approach was not used due to ft lack of reliable data in this area. This appraisal is made 0'as Is", subject to completion per darts and specifications on the basis of a hypothetical condition that the improvements have been completed, ❑subject to the following repairs or alterations m the basis of a hypothetical condition that the repairs or alterations have been completed,or❑subject to the • following required inspection based on the edraordinary ass n that the condition or deficiency does riot require alteration or repair: Appralead'as-is'--no repairs;are called f Eluad on a corpode visual Inspection of the Interior and exterior areas of the subjerd propertyy,defined scope of work,statement of assumptions and Bmitktg conditions,and appraiser's cer ifkation,my(our)opinion of the market value,as def Tied,of Ufa rest property that is the subject of this report is $ 272,000 as of 02/17/11 which Is the date of Inspection and the effective date of this appraisal. Freddie Mac Form 70 March 2005 Page 2 of 6 Fannie Mae Form 1004 March 2005 Form 1004—'MnTOTAL"appraisal software by a Is moor,Inc.—1.800-ALAMODE I Main He No.627307FP-la—ae—.#-51 Uniform Residential Appraisal Report File#8 307_ .The appraiser,Mark Sibinski personally inspected the subject property.Professional assistance was igovided by Robin Sibinski MN Certified Residential Real PrjDggM Avpraiser license e#2032-7388,review,selection and hot ra of comparable Proverfies.and in writ' this appraLsai re ort.This report meets the requirements of a complete summary appraisal report.and adheres to all USPAP provisions.This appraisal Is Intended for use in a mort a e finance transaction oW,it is not Intended for any other use. The final estimate of value is determined in consideration of the Cost Approach,with oftary emphasis given to the Sales Comperison Approach. The Income Approach is considered unreliable due to the lack of sufficient rental data.Note:I hereby certify that I am fully qualified and competent by train'trainina and knowledfle to Worm this appraisal.Original photos for the appraisal pmddecl b appraiser were d' itai color.The reproduction of the report after electronic transmission to the lender may resVft in the use of black and white photos if lender chooses).if black and white photos are used appraiser tes that no material los in information results from the use of black and white photos. See addrn. M Provide adequate k totma0on for the lender/client to re .ate the blow cost f es and calculations. SupW for the opinion of site value(summary of coraparable land sales or other metals for estirmfing site value The cost approach is no Ion er re tdred by Fannie Mae.Theopinion of site value is derived from county records.The cost approach or the subtraction of the opinion of site value from the appreisees oDinion of value for the sub'ect Is not to be relied upon to determine hazard insurance of the improvement.The appraiser is not held responsible if used for sornetWww other than the intended. u ose.The land-to-value ratio is tvpical for the market. ESTimATED REPRODWT NOR R€PLACEMENT COST NEW OPINION OF SITE VALUE...:..: ... . . : . :.... ... .----..... =$ 179,300 Source of cost data DWELLWG .Ft.@$ _$ Quality rating from cost sbvice Effective date of cost data S:Ft. ..........I.. _$ Comments on Cost Approach(gross Rv' area calculations,deixeciation,etc. -........... =$ Estimated Remaining economic 1rfe is based on 100 total years. Gara Car ort S.Ft @$ ... _$ Total Estimate of Cost-New ------------- =$ Less Physical Ifunctional jbdemal Depreciation I I _$ Depreciated Cost of Improvements ............................................... ::._$ "As-Is"Value of Site ImDrovernents .: =S Estimated Remaknin Economic Lif and VA oai Years 99MCATED VALUE BY COST APPROACH ........ ...::. ........_=$ NIG4ME�PPft4' Tfl AlUE flpt rill) Fatlrlf'AI#- Estimated Montlily Market Rend� X Gross Rend Mull er =$ Indicated Value by income Approach Surnmary of Income Anroach(including suppod for market rent and GRM w , Is the devel !builder in cw*oi of the Homeowners`Association OA? Yes No Unit s Detached LlAftached Provide tta following Information for PUDs ONLY I the dev /badlda Is in control of the NOA and to su property is an attached dwelling trait. Legal Name of Project Total nomdrer of phases Total number of units Total number of units sold Total number of unts rented Total number of units for sale Data source(s) Was the project created by the conversion of exist' badidfn s into a PUD? Yes El No It Yes date of conversion. Does the project contain any muti-dwelling units? El Yes Lj No Data Source Are the units,common elements and recreation facilities co e? El Yes No I No,describe the status of completion. Are the common elements leased to or by the Homeowners'Association? Yes El No N Yes describe the rental terms and options. Describe common dements and recreational facilities. Freddie Mac Form 70 March 2005 Page 3 of 6 Fannie Mae form 1004 March 2005 Form 1004—"VMTOTAV appraisal software by a la mode,ire.—1-I300•ALAMODE Freddie Mac Form 70 March 2005 Page 4 of 6 Fannie Mae Form 1004 March 2005 Fmm 1004—IftTOTAL'appraisal software by a Is mok Inc:—1.800-ALAMODE Wain File No.62730ai� HR11-1946 Uniform Residential Appraisal Report He#627307 APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: 1, l have, at a minimum,developed and reported this appraisal in accordance with the scope of work requirements stated in this appraisal report. 2. 1 performed a complete visual inspection of the interior and exterior areas of the subject property. I reported the condition of the improvements in factual, specific terms. I identified and reported the physical deficiencies that could affect the livability, soundness, or structural integrity of the property. 3. I performed this appraisal In accordance with the requirements of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that.were in place at the time this appraisal report was prepared. 4. 1 developed my opinion of the market value of the real property that is the subject of this report based on the sales comparison approach to value. I_have adequate comparable market data to develop a reliable sales comparison approach for this appraisal assignment. I further certify that I considered the cost and income approaches to value but did not develop them, unless otherwise indicated in this report. 5. 1 researched, verified, analyzed, and reported on any current agreement for sale for the subject property, any offering for sale of the subject property in the twelve months prior to the effective date of this appraisal, and the prior sales of the subject property for a minimum of three years prior to the effective date of this appraisal, unless otherwise indicated in this report. 6. I researched, verified, analyzed, and reported on the prior sales of the comparable sales for a minimum of one year prior to the date of sale of the comparable sale, unless otherwise Indicated in this report. 7. 1 selected and used comparable sales that are locationally,physically,and functionally the most similar to the subject property. 8. 1 have not used comparable sales that were the result of combining a land sale with the contract purchase price of a home that has been built or will be built on the land. 9. 1 have reported adjustments to the comparable sales that reflect the market's reaction to the differences between the subject property and the comparable sales. 10. 1 verified,from a disinterested source,all information in this report that was provided by parties who have a financial Interest in the sale or financing of the subject property. 11. 1 have knowledge and experience in appraising this type of property in this market area. 12. 1 am aware of,and have access to,the necessary and appropriate public and private data sources,such as multiple listing services,tax assessment records, public,land records and other such data sources for the area in which the property is located. 13. 1 obtained the information, estimates, and opinions furnished by other parties and expressed in this appraisal report from reliable sources that I believe to be true and correct. 14, 1 have taken into consideration the factors that have an impact on value with respect to the subject neighborhood, subject property, and the proximity of the subject property to adverse influences in the development of my opinion of market value. I have noted in this appraisal report any adverse conditions (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) observed during the Inspection of the subject property or that I became aware of during the research Involved in performing this appraisal. I have considered these adverse conditions in my analysis of the property value, and have reported on the effect of the conditions on the value and marketability of the subject property. 15, I have not knowingly withheld any significant information from this appraisal report and, to the best of my knowledge, all statements and information in this appraisal report are true and correct. 16. 1 stated In this appraisal report my own personal,unbiased, and professional analysis, opinions, and conclusions, which are subject only to the assumptions and limiting conditions in this appraisal report. 17. 1 have no presets or prospective interest in the property that is the subject of this report,and I have no present or prospective personal interest or bias with respect to the participants in the transaction.I did not base,either partially or completely,my analysis and/or opinion of market value in this appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 18. My employment and/or compensation for performing this appraisal or any future or anticipated appraisals was not conditioned on any agreement or understanding, written or otherwise, that I would report (or present analysis supporting) a predetermined specific value, a predetermined minimum value, a range or direction in value, a value that favors the cause of any party,or the attainment of a specific result or occurrence of a specific subsequent event (such as approval of a pending mortgage loan application). 19. 1 personally prepared all conclusions and opinions about the real estate that were set forth in this appraisal report. If I relied on significant real property appraisal assistance from any individual or individuals in the performance of this appraisal or'the preparation of this appraisal report,l have named such Individual(s) and disclosed the specific tasks performed in this appraisal report. I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any ftem in this appraisal report; therefore, any change made to this appraisal is unauthorized and I will take no responsibility for It. 20. 1 identified the lender/client in this appraisal report who Is the individual, organization, or agent for the organization that ordered and will receive this appraisal report. Freddie Mac Form 70 March 2005 Page 5 of 6 Fannie Mae Form 1004 March 2005 Fan"1004—WnTOTAL'appraisal software by a 6 mode,Inc.—1.800•ALAMODE Freddie Mac form 70 March 2005 Page 6 of.6 Fannie Mae Form 1004 March 2005 Form 1004—"WinTOTAC appraisal software by a la mode,inc.—1-800-AIAMODE Wain Fie No.62730EiaiE HR11-1946 Uniform Residential A ppralsal Report File#627307 FEATURE SUBJECT COMPARABLE SALE#4 COMPARABLE SALE#5 COMPARABLE SALE#6 Address 5601 Indiana Ave N 1615 W Medicine Lake Dr 4917 Bernard Ave N 5708 Twin takes Tarr N Brooktvn Center.MN 55429-2901 Plymouth,MN 55441 Crystal,MN 55429 Crystal,MN 55429 PWft to Subect 6.19 miles SW 9,72 blocks SW 3.48 blocks W Sale Price $ 272-000 $ 268 500 - S 205,000 ;' $ 299,900 Sale P' oss Uv.Area $ 169.58 5.ft.$ 209,77 S.ft. ` $ 17 .98 S91.1, $ 211.20 s.ft. Data Sources 59 CDOM-MLS 160 CDOM-MLS 400 CDOM-MLS Verification Soirc s Countv Records County Records Auent VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +- $Adiustment DESCRIPTION I + $Ad'ustmerd DESCRIPTION +• $Adjustment Sales or Fine ' 9 FHA FHA ACTIVE Concessions NoneNoted Nonalloted ACTIVE Date M SaWTime 10 12130/10 Sale-To-List 1 Location Suburban Suburban/Sup 40.00 Suburban Suburban LegsehWee Simple Fee Simple Fee Simple Fee Simple Fee Sim le Site .32 Acre .22 Ac +2.500.30 Ac .27 Ac View 82'Lakefront 52'Lak fr t +6 50'Lakefront +6,400 85`Lakefront Design(Style) 1 story 1.5story 1 Story Story of Construction Good Equal Equal E ual Actual Age 48 63 +7 500 60 +6.0 54 +3.000 Condition G2.r4 E uai Inferior +15.000 Su erior -10,000 • Above Grade ToW I Borms.I Baths Total Bath Bdure. s Total Brims Baths Tdat likirms.I Baft Room Could 6 1 +3,0 6 3 1 +1,000 6 3 2 +1.0001 Gross Uving Area 1,604 S4.11. 1,280 s.ft. +11,3 1 199 5.ft. +14,200 1,420 s.ft. +6,400 Basement 6 Rnished FuWWO Partial +9,000 Full +3,000 Fu1UWO Rooms Below Grade 1203 Finished 0 Finished +12,000 473 Finished +7,300 1250 Finished Lwgmg L"Ity Goo Eaual E ual Eaual HeaftCooft GFACCentral GFAfCentral GFAICentral GFA/Central Eneray EfticUant kerns Typical E ual E ual Equal GaraIle/Carport 3CarDet 2CarAtt +5 000 2CarAtt +5,000 2CarAtt +5,000 Pach/Pabaeck ddk d a shd fen Dk Fen +8 Dk Pat 3sn +4,000 Dk Patio +8,000 Rr laces 2FP 1 FP +2.0 None +4,000 2FP None +2.500 None +2.5001 Net Ad'stment otai + ET is 28,800 0+ $ 65,900 Z+ $ 5,900 Adjusted Sale Price Net Adj. 10.7 % Net Adj. 32.1 % Net Adj. 2.0 % of Comparables Gross Ad. 40.5 %$ 297,300 Gross Adj. 32.1 %$ 270 900 Gross Ad. 15.3 %$ 305,800 Report the results of the research and ana sis of the prior sale or transfer history of the subject property and c arable sales(report additional pnor sales on page 3 ITEM- SUBJECT COMPARABLE SALE#4 COMPARABLE SALE#5 COMPARABLE SALE#6 Date of Pia SaWTranster None in 3 years None None None Price of Prior SaWTransfer None None Nome None Data Sources Co.Tax1MLS Co.Tax/MLS Co.Tax(MLS gg,TaYJMLS Effective Date of Data Sources 2/17111 02/17/11 02/17111 O21i7111 AMIYsis M prior sale or transfer tislory of`the subject property and comparable sales Ana sislCommeMs r i Freddie Mac Form 70 March 2005 Fannie Mae Form 1004 March 2005 Form'1804.(AC)-'WinTOTAL•appraisal software by a b mode,im.—1.800-ALAMM h [Main fie No.627 HR11-1946 Uniform Residential A raisal Report File#627307 FEATURE I SUBJECT COMPARABLE SALE#7 COMPARABLE SALE#8 COMPARABLE SALE#9 Address 5601 Indiana Ave N Brookivn Center MN 55429-2901 5433 Twin Lakes Blvd Brooklyn Center MN 55429 6633 Eagle Lake Dr Pro to Subject " 3.24 Olool SE Sale Price $ 272,111 $ 299 900 $ $ Sale Price/Gross Uv.Area J69.58 SOX $ 186.27 s.ft. $ Data Sauces 167 CDOM-MLS Verification Sources n VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +- $Adjushnerd DESCRIPTION +- $Ad'stment DESCRIPTION +• $Ad'shnerd Sakes or Financing Conrxsslons ACTIVE ACTIVE Data of SWTirne ' Sale-To-List -10 Locatim Suburban Suburban Leasehold/Fee Sirnple Fee Simole Fee Simple Site .32 Acre .90 Ac -14,50 Yew 82'Lakefront 99'Lakefront 1 Story 1S Quality of Construction Q>md Equal ' Acts Age 48 57 +4.50 Condition Good Ectual • Above Grade Room Cowl Total IBMm.l Baths Total Wns. Baths Total Bdrms. Baths Taal Bdrms. Bps 6 1 3 1 1.5 5 1 +3 0 Gross Livft Area 1.604 S-ft: -; 1.610 SO. s .ft. s.ft. Basement&Rirdshed Roans Below Grade FrAIIWO 1203 Finished FuWWO 1610 Finished -4,1 I'mdon#Utility Good EQual Healing/Coolng GFAtCentral GFA1Centrat Energy Efficient Items Typical Equal Garage/Carport Garage/Carport 3CarDet 2CarAit +5 000 PordVP&Q0eqk AdkxtDatdwmfsn, Dk Pat' +8.000 Fir lm s 2FP 2FP No +2.5001 Net AdjusbTmt oW) + - $ -5.6 + - $ M+ 0. is Adjusted Sale Price of C aides Net Adj. 1.9 % Gross Ad l. 17.2 % $ 294,30 Net Adj. % Gross Adj. % $ Net Adj. % Gross Ad". % $ Report the remits of the research arhd analysis of the prior sale or transfer h'story of the subject property and c arable sales(report addlional sales on page 3). ITEM SUBJECT COMPARABLE SALE#7 1 COMPARABLE SALE#8 COMPARABLE SALE#9 Date of Prior SaWTrmter None In 3 years None Price of Prior Wrahsfer None None Data Sources Co.Ta)WI_S Co.Ta)dMLS Effecliae Date of Data Source(s)0 02117/11 0217111 M!bEh of prior sale or transfer history of the EkLd property and corrparable sales matys"mrnerds Freddie Mac Form 70 March 2005 Fannie Mae Form 1004 March 2005 Form 1004.(AC)-`NfrnTOTAL"appraisal software by a la mode,Inc.—1-8DO-ALAMODE I I Wain File No.627307FP_a_a_e_#_1_11 Supplemental Addendum File No.627307 Borrower/Gent Leonid BryskWLudmOa Bryskina Property Address 5601 Indiana Ave N city Brooklyn Center CourAY Hennepin State MN Zip Code 55429-2901 Client GSF Mort a e Co ration The FEMA mapping has indicated the subject to be zoned AE and in a special flood hazard area.This issue is deferred to a FEMA flood specialist. COMMENTS ON SUBJECT AND SALES COMPARISON The subject is located on.32 acre with 82'of lake frontage on Twin Lake.It is a 1-story style home with 3 bedrooms and 1.5 bathrooms.The lower level is a walkout and includes a recreation room,1 bedroom,a den and a bathroom.The subject has a 2-car detached garage with additional concrete parking.Amenities include central air conditioning,a fireplace,a built-in indoor BBQ,built-in millwork,a walk-in closet,a cedar closet,a concrete driveway,a partial chain link fence,a large covered wood deck with a covered porch beneath it,an extra large concrete patio,and a large drive-through boathouse/shed.The subject is in good condition and has good market appeal. The dosing date of some cramps are over three months old.The comps chosen are the most recent comps available. According to the attached 1004MC form analysis,the prices of homes in this area appear to be stabilizing therefore,no adjustment has been made.This does not affect their reliability as a good indicators of current market value. Due to the sparsity of lakefront homes in the area,some comps are over 1 mile from the subject but are the closest other comps available.All comps are in competing neighborhoods and are the best available.The dosed comps in this report have dosed within the last year.All adjustments conform to the guideline limits. The net percentage adjustments on some comps exceed the USPAP guideline of 15%and the gross percentage adjustments on some comps exceed the USPAP guideline of 25%and the largest adjustments on some comps exceed the USPAP guideline of 10%.These comps are similar to the subject,have similar functional utility and are still a good indicators of value. The subject is approximately 1 mile from the Crystal Airport. It is common for the residents in this area to contend with the slight airport noise associated with the airport. All comps are similar in size,age and functional utility and all comps are approximately the same distance from the airport and thus,no adjustments were made,except for comp 4 which is a bit further away.See LOCATIONNIEW below. The predominant value Indicated on page one of the URAR is lower than the appraiser's opinion of value.The appraiser used a search that included all homes in a polygon area around the subject:1694 on the N,Hwy 100 on the E and S,and Hwy 81 on the W,that sold in the past year.This means that all homes located within this radius are included in this summary and not all have been maintained as well as the subject,have lake frontage,are as large as or have the amenities that the subject has,or some may be distressed sales. ADJUSTMENTS SALE/LIST RATIO Based on information from the Regional Multiple Listing Service of Minnesota,Inc.for the 4th quarter of 2010 for zip code 55429,the sale to list ratio was 96.6%.The active comps In this report have been adjusted accordingly.Comp 5 has been on and off the market since 9/3/09.Original list:$449,900. SELLER CONCESSIONS Since it is typical to have the seller contribute 3%and since comp 1 has contributions in excess over 3%this comp has been adjusted. LOCATIONNIEW Comp 2 is located right across from an elementary school with an inferior view and has been adjusted.Comp 3 is located on Eagle Lake.Comp 4 is located on Medicine Lake.These lakes are larger and more superior and have been adjusted accordingly.Comps 1,2&6 have similar lakefront feet.Comp 7 has slightly more but is offset since it is only deeded access. Comp 3 has more lakefront feet and camps 4&5 have fewer lakefront feet.These comps have been adjusted accordingly. QUALITY/CONDITION According to the agents'comments and photos,comp 3 has been updated more recently than the subject and has superior millwork,fixtures and finishes.Comp 5 has not been updated as recently as the subject and has inferior millwork,built-ins, features and amenities.Comp 6 has superior updates,features,flooring,millwork and fixtures.These comps have been adjusted accordingly.All other features are considered equal and offsetting. ROOMS ABOVE GRADE/GLA< All comps were adjusted at the rate of$2000 per room/full bathroom and$1000 per.5 bathroom.GLA was calculated at $35/SF.Differences of under IOOSF are not adjusted for as it is doubtful that the market would recognize such a small difference. DECKS/PORCHES/ETC No comps with as many outdoor amenities,porches,boathouse/shed,patios,etc were available. Form TADD—VinTOTAL'appraisal software by a b mode,Inc.-1.800-ALAMWE [Main File No.6273071 Page#121 HR11-1946 Market Conditions Addendum to the Appraisal Report F�No. 627307 The purpose of this addendum is to provide the tender/client with a clear and accurate understanding of the market trends and conditions prevalent In ge subject neighborhood.This is a required addendum for all appraisal reports with an effective date on or after April 1 2009. Property Address 5801 Indiana Ave N City Brooklyn Center State MN 21P Code 55429-2901 Borrower Leonid B kin/Ludmla Bryskina Instructions:The appraiser must use the information required on this form as the basis for his/her conclusions,and waist provide support for gorse conclusions,regarding housing trends and overall market conditions as reported In the Neighborhood section of the appraisal report form.The appraiser must fill in all the information to the extort g is available and reliable and must provide analos as indicated below.If any required data is unavailable or is considered unreliable,the appraiser must provide an Milanagon.Il is recogoized that not all data sources will be able to provide data for the shaded areas below;it it is available,however,the appraiser must include the data in the analysis.I data sources provide the required information as an average instead of the median,the appraiser should report the available figure and identify it as an average..Sales and listings must be properties that compete with the subject property,determined by applying the criteria that would be used by a prospective buyer of the sublect property.The Weer must!!Vain any anamaHas in the data,such as seasonal markets new construction,foreclosures etc. In sit Prior 7-12 Moths I Prior 4-6 Moths Current-3 Months Overall Trend Total#of Comparable Sales Settled 13 2 7 "creasing Stable Abs tion Rate o Sales/Marths 2.17 0.67 2.33 Increasi Stable Total#of C Active Usti s 27 21 12 Decgit Stable nDeccinim Months of Hou' Su otal Lis /Ah.Rate 1 .4 3t. 5.2 Stable Median Sob&list No,WK Salellkt% Prior 7-12 Months Prior 4-6 Months Current-3 Monf Overall Trend Mean Comparable Sale Price 250,000 500.600 205,000 Increasing Stable 10 Declinina Median Comparable Sates Days on Market 53 92 39 Declining Stable Increasing Median Comparable List Price 32T450 + 337,000 329,900 kicteasl Stable Declining' Manlier Comparable Lis' s Days on Market 1 2 1 128 BMW Stable Increasing Median Sale Price as%of List Rice 96.47 99.19 93.39 Increasing Stable Dechning ,builder,etc. aid financial assistance pre WO Yes No Seller-deveb ota Declining Stable ihcrea' Explain in detali the seller concessions trends for the past 12 months(e.g.,seller contributions increased from 3%to 5%,Increasing use of buydowns,closing costs,condo fees,options,etc.. Seller concessions for the past 12 months have remained stable.3-5 points are normal have remained consistent and do not affect the market.The above median comparable.sales Price data shows that the market increased sharply from 7-12 mo to 4-6 mo then decreased s from 4-6 mo to current-3 mo causes this data to be misleading.There are a few exceptions that have sold in the area that are skavvina the data.It appears the current fist prices reflect that the market is indeed stable. Are foreclosure sales RED sales a factor In the market? R Yes rl No 9 yes,explain fincluding hie trends In listings and sales of foreclosed properties). The sub ect area has experienced a number of foreclosures in the past 12 months.The appraiser did a search of what he considers the sub eel's market over the last 365 days of sales.Out of the 246 dosed sales 143 were sold In a distressed state i.e.foreclosed shat-sale lender-owned).Therefore distressed sales in the subject's market appear to be a definite factor. Cite data sources for above information. http:/Imatrixnorthstarmis.com Summarize hie above information as support for you conclusions in the Neighborhood section of the appraisal report form.0 you used any additional information,such as an analym of pending sales andlor expired and withdrawn listings,to formulate your conclusions,provide both an explanation and support for your conclusions. The information proWded on this addendum are conclusions drawn from coin arables of the subject property.In particular the appraiser searched for all home styles with GLA of 1100-1900SF with lakefront lots or deeded lake access built 1940-1980 in a 7-mile radius around the sub•ect.The appraiser's opinion of value was derived from the camps listed in the attached appraisal. Note:The Information provided on page one of the URAR of this report is indicative of the neighborhood as a whole back 365 days and all styles of homes were researched and inducted in the conclusion.The information provided on the MC Addm.are conclusions drawn from uantkative can arables of the subject property.The information provided at the top of a e two of the URAR regarding comps fisted/sold is gggifitattlyo analysis of actual comps that are considered true coin arables. information contained in this addendum is taken from the RMLS. The"samples used are too small to provide meaningful results.These were added at the request of the lender and are inconclusive and misleading.The appraiser cautions the lender from usina this data for any purpose. If the subject Is a unit Ina condom jum or coWws relive project,complete the following: Proiect Nacre: Subject Proect Dais Prior 7-12 Months Prior 4-6 Months Current-3 Months Overall Trend' Total#of Comparable Sales Settled Increasing Stable Declining Absorption Rate otal SAWor#is Increasi Stable Decg Total#of Active Comparable Listings Decaiu Stable Increa ` Months of Unit otal Ustin s/Ab.Rate Stable Waasim Are foreclosure sales(RED sales)a factor in the project? Lj Yes Lj No If yes,Indicate the number of RED listings and explain the trends in listings and sales of Ortcbsed . Summarize the above trends and address the Impact on the subject unit and project. Slow -'° Signature Appraiser Name Mark Sfbi nsid Supervisory Walser Name COMM Name Home Run sisals CmWy Name Companit Address 13314 Narcissus St NW Andover,MN 55304 Company Address Stale LiceroanCertilcation# 2031-2901 Certified Real State MN State LicenseXuartificallm# state Email Address HomeRUnAppraisals @comcast.net Email Address reddie Mac Form 71 March 2009 Page 1 of 1 Fannie Mae Form 1004MC March 2009 Form 1004MC2-WmTOTAL'appraisal software by a la mode,Inc. 1-800-ALAMODE Main File No.627307FP-ETT13� Building Sketch Borrower CGenF Leonid Bryskk&udmile Brvskina P(OPertY Address 5601 Indiana Ave N City Brooklyn Center CountY Henne ' State MN Zip Code 55429-2901 CNent GSF Mortgage Corporation Shad Bat NOOw 31 22 10 PWo Cowed Coyxrad 14 peck WNk Out 13 0— PWo 12- 25 LiWv Room Olnmq Room S- S-- 24 owag* 24 KkoMn DWM6 Roan Dn IooP 25 I Comments I AREA CALCULATIONS SUMMARY LIVM AREA BREAKDOWN Cxds NN Sho NdT4U% SM'ASrn SubwAs ©Al Asst F1oo: 16" SSW tirxt P1eex 65A lixrxax 571 371 25 25 706 OTS StoreSe snvxlld 0.5: 5 x 5 13 27 2 408 x- S x .29 145 0.5x 5x 5 13 5 x 22 116 S x 27 216 r Net LIVABLE Arft Rounded 1604 7 kerns (Rounded) 1604 Form SKT.BIdSid—'1 WTOTAV appraisal software by a Is mode,im.—1-800-ALAMODE Main He No.627307T&e#141 Subject Photos Borrower CNera Leonid BryskW&udmila Bryskina Pr Address 5601 Indiana Ave N city Brooklyn Center C Hennepin State MN hp Code 55429-2901 Chw GSF Mortgage Corporation x �k r k 3.aiiaia L • w� k�! �rse Main File No.627307[PiFe� Subject Photos (3) Borrower Cierd Leonid B kin/Ludmila B skin Property Address 5601 Indiana Ave N City Brooklyn Center Courdy Hennepin State MN Zip Code 55429-2901 Clierd GSF Mortgage Corporation Subject's Side 4 y Subject's Side A ��a Garage Form GPIC3M 'MMTOTAL"appraisal software by a la node,Im—1-800•ALAMODE e� [Main He No.62730 Subject Photos(4) Borrows C5eM Leonid BryskirAudmila Rrvskina Pro Address 5601 Indian Ave N city BrookhM Center COUntY Henne ' State MN Zip Code 55429-2901 Ckttf GSF Mortgage Corporation Wain File No.6273071 Page#171 Subject Photos (6) Borrower/Clierd Leonid B skin/Ludmila Bryskina PrOMMY Address 5801 Indiana Ave N City Brooklyn Center Coulty Hennepin State MN hp Code 55429-2901 Clierd GSF Mort a e Corporation t Dining Room & Built-In Hutch Dining Room M F IN Z? • ': r Kitchen Stove a I Built-In Dishwasher Living Room Form PICSO(2-WTOTAL'appraisal software by a la mode,mc.—1.800-ALAMODE Subject Photos (3) BormwerlCGelt 'Leonid BryskirdLudmila Bryskina Pr Address 5601 Indiana Ave N City Brooklyn Center COLM Hennepin State MN 71 Code 55429-2901 CGerd G F Mort e e Corporation Photograph Addendum Borrower/Client Leonid 8 kin/I udmila Bryskina Propeq Address 5601 Indiana Ave N Ply Brook n Center County Hennepin State MN Zip Code 55429-2901 4 Client GSF Mortgage Corporation i I S Rec Room Built-in BBQ Grill Y t Y.Z.• ��, Den Laundry n.> Y Y , Bath 1/2 Bath Form PICSD22—"WinTOTAL`appraisal software by a la mode,Inc.—1-800-ALAMODE i Wain File No.627307 Comparable Photos 1-3 Borrower lend Leonid BryskirdLudmila Bryskina Pro Address 5601 Indiana Ave N city Brooklyn Center County Hennepin State MN Zip Code 55429-2901 Client GSF Mortqaiw Corporation Comparable 1 4741 Percy Ave Prox to Subject 1.22 miles SW Sale Price 210,000 Gross Living Area 1,483 Total Rooms 6 - Total Bedrooms 3 TEA x°. m Total Bathrooms 1 Location Suburban thew MY Lakefront Site .22 Ac Quality Equal 3 Age 55 a'MP r ' MON " Comparable 2 5046 Quail Ave N Prey to Subject 10.92 flocks SW k> Sale Price 240,000 Cross Living Area 1,240 d Total Rooms 5 (' 4 Total Bedrooms 2 Total Bathrooms 1.5 Location SuMxbanfinf View 90'Lakefront Site .31 Ac Quality Equal Age 48 �A Comparable 3 6633 Eagle Lake Dr Prox to Subject 3.84 miles W .. s u.. Sale Price 300,000 III Boss Living Area 1,531 Total Rooms 5 Total Bedrooms 3 Total Bathrooms 2 Location Suburban/Sup View 98'Lakefront .. �1 'x Site .24 Ac Quality Equal Age 89 Form PIC3x5.CR "W!nTOTAL'appraisal software by a la mode,inc.—1.800-ALAMODE Main Flhe No.627307FP—aa—e W-261 Comparable Photos 4-6 Borrower/Client Leonid BryskirdLudmila Bryskina Property Address 5601 Indiana Ave'N city Brooklyn Center County Hennepin State MN Zip Code 55429-2901 Client GSF Mortgage Corporation Comparable 4 �� 1615 W Medicine Lake Dr 1 °: "A � Prox to Subject 6.19 miles SW A Saks Price 268,500 b * a Gross Livbtg Area 1,280 Total Roans 6 Total Bedrooms 2 s Total Bathrooms 1 Location Suburban/Sup Yew 52'Lakefront Site .22 Ac Quality Equal pge 63 Comparable 5 4917 Bemard Ave N _ Prox to Subject 9.72 blocks SW xs Sales Price 205,000 Cross Living Area 1,199 Total Rooms 6 Total Bedrooms 3 y'h Total Bathrooms 1 Location Suburban View 50'Lakefront Site .30 Ac Quality Equal r Age 60 Comparable 6 5708 Twin Lakes Terr N Prox to Subect -3.48 blocks W Saks Price 299,900 Gross Loring Area 1,420 Total Rooms 6 a Total Bedrooms 3 Total Bathrooms 2 Location Suburban Yew 85'Lakefront She .27 Ac Quality Equal Age 54 Form PIC3x5.CR—INnTOTAL"appraisal software by a Is mode,Inc.-1.800-M AMODE Wain File No.6273071 Paae#211 Comparable Photo Page Borrower(ClIent Leonid B skin/Ludmila Brvskina Property Address 5601 Indiana Ave N Ci Brooklyn Center CoUrIty Hennepin State MN Zip Code 55429-2901 Client GSF Mortgage Corporation Comparable T 5433 Twin Lakes Blvd Prox.to Subject 3.24 blocks SE Sales Price 299,900 Bross Living Area 1,610 Total Rooms 5 Total Bedrooms 2 Total Bathrooms 1 Location Suburban Yew 99 Lakefront Site .90 Ac Quality Equal Age 57 Comparable 8 6633 Eagle Lake Dr Photo from MLS q Comparable 9 Prox.to Subject Sales Price ce Gross Uvmg Area Total Rooms Total Bedrooms Total Bathrooms Location View Site Quality A9e Form PIC3x5.CR-'WinTOTAL°appraisal software by a la mode,kic.—1-800-ALAMODE F�ue#221 Location Map Barower Ne Leonid BryskirVLudmila Bryskiria PrWAY Address 5601 Indiana Ave N Cq Brooklyn Center County Henna ' State MN Code 55429-2901 Clint GSF Mort a e Corporation Wain File No.627307 Paae#23 Flood Map Borrower/Client Leonid B kin/Ludmila Brvskina Properly Address 5601 Indiana Ave N city Brooklyn Center C Hennepin State MN 4 Code 55429-2901 Client GSF Mortgage Corporation . , Prepared for: InterFloo d , * Home Run Appraisals 0r 4'a moae 5601 Indiana Avenue N. www.interflood.com. 1800-252-6633 Brooklyn Center,MN 55429 ZONE-.....,..... .r..y {SS tir ONE �--_.•_•.._...�� _. ZONErr 1 x 71 K ZONE X FLOt?DSCAPE N � s t I "Hazards Map Map Number 27053CO212E \ \ s3 Effective Date 1 September 2,2004 w t ZONE t: a* Pawn id 3y FWd ftme L VAA �va.ESZdsaurtr.can iD 1344.2x10 SouraePrresa a(4'x FbedScum*Cwp AUM.AN%hL-re vcf-Fatwte 3.631,126 vW 6.379.611.OtW paw M, p&w r4. Foy We:ia£o�Ybodscyrurae.aom. Form MARFLOOD—"WinTOTAV appraisal software by a b mode,inc.—1-WO-ALAMODE i CITY OF BROOKLYN CENTER 2011 LOCAL BOARD OF APPEAL AND EQUALIZATION Walk — In Appeal Application Local Board of Appeal and Equalization held April 4, 2011 at 7:00 P.M. Names) ry YZ Daytime Contact Number: `7r 3-dd7-- gfLf Property Address Property Identification Number t . Assessor's 2011 Estimated Market Value Is your property residential, commercial or multi-family? If you are appealing a commercial, multi-family or residential rental property you will need to submit income and expense data for calendar year 2010 with your application. What is the reason you are appealing your 2011 assessment? 46fL When did you purchase your home? -XI Date of Purchase o Purchase Price Did you purchase your property from a bank, as a foreclosure or short sale? Has your property physically changed since the purchase? (maintenance, upgrades, remodeling or structural damage) Please list a brief description below w i t h an estimated imated cost.: �/. Y•`'Jl✓a-1 � ��n �'�'qih�� �h �GC�G- �' T�i.SZ2� �c�-1 'f Have you had a recent appraisal for refinancing, purchase or a market analysis by a real estate agent completed within the last year? Yes or No Ir if so, what was the determination of value? What do you think the market value of your property should be? 1" ' We will need to schedule an interior review of your property"within the week, is there a specific date or time that works best for you? Please provide any documentation supporting y ur claim of overvaluation or erroneous classification with this application. In order to appeal your valuation an appointment to view the property will be required. Report Name: Taxpayer Inquiry Printed:4/4/2011 City of Brooklyn Center Taxpayer Inquiry Page: 1 Display PID House Nbr Street Name unit Zip Code 25-119-21-34-0008 720 69th Ave N 55430 Last Name First Name MA Owner Tax1jaye Residen t The 720 Company LLC Y Y N Fronta2 weft Side Rear Side Right Side tuff.Width Eff•Depth Proper Area &reagg Zoning P/ , Exempt Code School Dist Watershed Yr Built 160 239 160 239 0 0 38,240 0.00 RI 0011 15 1964 Year Yer #Subs Land Value Bldg_Value Mach Value Tot Mkt Valu e Tax Cap limstd Midvr Rel H P/ %oOwn P/C 2611 1 1 76,000 89,200 0 165,200 1,652 N N N R 0 N 2010 1 1 90,000 88,100 0 178,100 1,781 N N N R 0 N 2009 1 1 108,900 96,700 0 205,600 2,056 N N N R 0 N Lot: 053 Block: 000 Addition: Auditor's Subdivision No.309 Hennepin County,Minn S 239 25/100 FT OF W 160 FT p , i a M1 5 2 h z + $f4^y ptF Researched and prepared by Subject Property Brett Hildreth Prepared exclusively for Brett`s Transactions Brett Hildreth Coldwell Banker Burnet 8616 Riverview Lane Brooklyn Park, MN 55444 (763)227-8614 BrHikireth @CBBumet.com a Comparative 0 69th Ave BC -Brooklyn Center, • Monday,April 4,2011 Summary of Comparable Listings This page summarizes the comparable listings contained in this market analysis. Sold Listings Address Price Bds Bth TFSF $1Sq ,Buift Style Sold Date DOM CDOM S=720 69th Ave N 3 2 1,918 1964 (SF)One St 10 3007 64Th Avenue $173,500 5 3 2625 $66 1959 (SF)One St 07/1612010 153 153 3112 Ohenry Road $174,900 5 2 2292 $76 1958 (SF)One St. 08124/2010 136 136 6807 Regent Avenue $159,999 4 2 1890 $85 1957 (SF)One St 06=/2010 112 112 5842 Abbott Avenue $150,000 2 2 1391 $108 1954 (SF)One St 0813012010 87 87 7124 France Avenue $136,700 3 1 1040 $131 1957-(SF)One St 10122/2010 69 69 3218 67Th Avenue $150,000 -4 2 "1597 $94 1966 (SF)One St 09/1712010 11 11 5201 Eleanor Lane $149,000 5 3 2148 $69 1958 (SF)One St 10/29/2010 33 41 4106 71 St Avenue $145,000 4 3 1946 $75 1959 (SF)One St "0924/2010 109 109 6236 Regent Avenue $146,900 5 2 1728 $85 1958 (SF)One St 10/19/2010 53 67 7125 W Palmer Lake Drive $144,900 4 2 1800 $81 1959 (SF)One St 0601/2010 45 45 7231 Bryant Avenue $140,000 3 2 1875 $75 1964 (SF)One St 06124/2010 11 73 7055 Perry Avenue $140,500 4 2 1666 $84 1957 (SF)One St 06108/2010 59 59 6800 Beard Avenue $136,000 3 2 1649 $82 1959 (SF)One St 06124/2010 92 92 5736 Northport Drive $134,000 5 2 2178 $62 1956 (SF)One St 09/03/2010 75 103 4512 66Th Avenue $140,000 3 2 2000 $70 1959 (SF)One St 11/15/2010 49 -49 3800 66Th Avenue $135,000 .3 2 1887 $72 1953 (SF)One St 05127/2010 15 104 5300 Girard Avenue $140,000 `4 2 1579 $89 1972 (SF)'One St 06!3012010 8 8 4825 71 St Avenue $130,000 4 2 1950 $67 1960 (SF)One + 07/21/2010 23 43 6306 Indiana Avenue $131,800 3 2 2020 $65 1958 (SF)One:St 4210112010 110 110 5925 Ewing Avenue $127,500 3 2 1484 $86 1956 (SF)On Sb 06(3012010 52 52 5827 Camden Avenue $127,500 2 1 1040 $123 2004 (SF)One St �"06MO/2010 22 22 7019 Quail Avenue $119,900 2' 2 1640 $73 1957 (SF)One St 11104/2010 179 179 Averages: $142,414 3.6 2.0 1792 $83 1961 68 78 Median of Comparable Listings; $140,000 Average of Comparable Listings: $142,414 On Average,the'Sold'status comparable listings sold in 68.32 days for$142,414 Researched and prepared by B 941 Hillwind Rd NE Fridley, MN 55432-5962 763-227-8614 Comparative Market Analysis 69th Ave N Brooklyn - • Monday,April 4,2011 Minimums and Maximums This page summarizes key fields of the listings in this analysis. The listings in this analysis can be summarized as follows: Priced between $119,900 and $199,900 2 to 5 Bedrooms 1.00 to 3.00 Bathrooms 1,040 to 2,625 Square feet $64 to $144 per Square Foot Built between 1953 and 2004 7 to 58 years old -PP- Researched and prepared by Brett Hildreth 941 Hillwind -. NE Fridley, Comparative 720 69th Ave N BC-Brooklyn Center,55430 Monday,April 4,2011 CMA Comparabtes This page outlines the subject property versus comparables properties. � r � a Subject Prove rty Details Details 720 69th Ave N 3007 64th Ave N 3112 Ohenry Rd M LS# 3881947 3888089 Status Sall ; Sold Sold Sch Dist 11 -Anoka-Hennepin 279-Osseo 279-Osseo List Price $199,900 $179;900 Sold Price $173,500 $174,900 S.Cntrbtn . $5,397 Off t4rkt 07/19/2010 07/12/2010 Ot Ckaseid 07/1 10 08/241'2010 CDOM 1 136 Beds 3 5 5 Baths, 2 3 2 Style (SF)ane.Story (SF)One Story,. (SF)One Story " Abv Sqft 1,218 1,569 1,266 BIw Sgft 700, 1,056 1,026 TotaISgft 1,918 2,625 2,292 Grg sts 2 2./30 3.00 Prk Char Detached Garage Driveway-Concrete Attached Garage, Detached Garage, Driveway-Concrete Driveway Year Built 1964 1959 1958 Lk/Wt ()�CR N 75X123X90X129 80x130 Sz 239X180(8/1 Acres 0.8 0.23 0.25 Fdtn Size 1,218 " 1,056 1,266 Ext Hardboard/Masonite MetaWinyl Metal/Vinyl,Stucco #FP 0 -1 0 Bsmt Full,Partially Finished Finished(Livable),Egress Windows Full Amenit Hardwood Floors Kitchen Window,Hardwood Floors, Deck,Patio,,Natural Woodwork, Tiled Floors Kitchen Wridow,Vaulted Ceifing(s), Researched and prepared by Brett Hildreth . -. NE Fridley, MN 55432-5962 763-227-8614 Comparative Market Analysis 69th Ave N BC -Brooklyn Center, • 0 Monday,April 4,2011 CMA Comparables This page outlines the subject property versus comparables properties. , , r s g, .. Sublect Property Details Details 720 69th Ave N 6807 Regent Ave N 5842 Abbott Ave N MLS# 3905570 3925923 Status Sold Sold Sold Sch Dist 11 -Anoka-Hennepin 286-Brooklyn Center 281-Robbinsdale Lost Price $159,999 $151,000 Sold Price $159,999 $150;000 S.Cntrbtn $4,800 Off Mrkt 07/25/2010 08112/2010 Dt Clod 06/3012010 08/30)2010 CDOM 112 87 Beds ? 3 t 2 Baths 2 2 2 Style (SF}One Story (SF)One Story (SF}One Story Abv Sqft 1,218 1,040 1,035 Biw Sgft 700 850 356 Tota l Sqft 1,918 1,890 1,391 Gry Stls 2 2.00 3.00 Prk Char Detached Garage Detached Garage, Driveway- Attached Garage,Detached Garage, Asphalt,Garage Door Opener,No1nt Insulated Garage, Driveway- Year Saiit 1964? 1957 1954 Lk/Wt Lot Szi 239X160(8110)ACR 75 X 134 82.2 X 135.73 Acres 0.8 - 0.23 0.25 Fdtn Size 1,218 1,040 1,035 Ext Hardboard/Masonits Metal/Vinyl, Brick/Stone Metal/Vnyl,Brick/Stone #FP Bsmt Full, Partially Finished Full,Finished(Livable), Day/Lookout Full,Finished(Livable), Day/Lookout Windows, Egress Windows, Concrete Windows Amenk Hardwood Floors Natural Woodwork,Kitchen Window, Deck,Porch,Kitchen Window,Tiled Hardwood Floors,Tiled'Floom, Floors Fridley,Researched and prepared by Brett Hildreth 941 Hillwind Rd NE Comparative 720 Brooklyn - Monday,April 4,2011. CMA Comparables This page outlines the subject property versus comparables properties. s � ,. a s z 4wF Subiect Property Details Details 720 69th Ave N 7124 France Ave N 3218 67th Ave IN M LS# 3948796 3951609 Status Said ; Sold Sold Sch Dist 11 -Anoka-Hennepin 279-Osseo 279 Osseo List Prue $149,9 $149,900 Sold Price $136,700 $150,000 S.Cntrbtn $4,700; $7'IM Off Mrkt 09/22/2010 08102/2010 Dt C1066d 10/22/2010 09/17/2010 CDO M 69 11 Bedls 3 3. 4 Baths 2 1 2 Style (SF)tine Story {SF)One Story (SF)One Story Abv Sqft 1,218 1,040 1,162 Blw Sgft 700 0 435 Tota l Sqft 1,918 1,040 1,597 G St s. 2.00 rg 200 Prk Char Detached Garage Detached Garage, Driveway- Detached Garage Concrete, Driveway-Asphalt,Garage Year Built 1964 1957 1966 Lk/Wt Lot Sz 239X160(8/1tT)ACit 0 S 75X155X78X149 Acres 0.8 0.22 0.27 Fdtn Size 1,218 1,040 1,162 Ext Hardboard/Masonite Stucco, BrickiStone Stucco, Brick/Stone # p © 0 2 Bsmt Full,Partially Finished Full Full,finished(Livable), Sump Pump, Egress Windows Amenit Hardwood floors Patio,Natural Woodwork,Kitchen Patio Window,Hardwood Floors,Tiled Researched and p - Hildreth 941 Hillwind Rd NE Fridley, *. Comparative Analysis 69th Ave .. - • Monday,April 4,2011.. CMA Comparables This page outlines the subject property versus comparables properties. z_ ;. ?z � ., c , Subject Prooertv Details details 720 69th Ave N 5201 Eleanor Ln 4106 71 st Ave N M LS# 3964487 3916174 status Sold Sold Sold Sch Dist 11 -Anoka-Hennepin 279-Osseo 279-Osseo List Price $149,9W $147,000 Sold Price $149,000 $145,000 5.Cntrbtn $6,705 $4,350 Off Mrkt 09/28/2010 08109/2010 Dt Closed 100/2010 09/24/2010 CDOM 41 109 Beds 31, 5 4 Baths 2 3 3 Style {SF)One Story (SF),One Story (SF)Ore Story Abv Sqft 1,218 1,248 1,200 B1w Sgf.t 700 900 746 Total Sqft 1,918, 2,148 1,946 Grg Stis 2 2.00 2.00 Prk Char Detached Garage Detached Garage Detached Garage,Garage Door Opener Year Built 1964 1958 1958 Lk/Wt Lot sz 239Xt60(8/10)ACR 90 X 127 S106040x78095 Acres 0.8 0.26 0.31 IF On size 11,2181 1,248 1,200 Ext Hardboard/Masonite Wood,Shakes Metal/Vinyl #FP 0 D p Bsmt Full,Partially Finished Full,Finished(Livable), Egress Full,Finished(Livable) Windows Amenit Hardwood Floors Patio,Natural Woodwork,Kitchen Patio,Kitchen Window,Hardwood Window,Hardwood Floors,Tiled Floors,Tiled Floors,Washer/Dryer FP"- Researched and prepared by Brett Hildreth . -. :. Comparative Analysis 720 69th Ave N Center,BC-Brooklyn • Monday,April 4,2011 CMA Comparables This page outlines the subject property versus comparables properties. Subiect Propert Details Details 720 69th Ave N 6236 Regent Ave N 7125 W Palmer Lake Dr M LS# 3925361 3939072 Status Sold Sold Sold Sch Dist 11 -Anoka-Hennepin 279-Osseo 279-Osseo List Prise $144,900 $144;900 Sold Price $146,900 $144,900 S.Cntrbtn $7,949 $4,5M Off Mrkt 07/29/2010 08/0212010 Ut Cued 10/1912010 08/31!2010 CDOM 67 45 Beds 3 4 Baths 2 2 2 Style {5F)One Story ('SF)One Story (SF)one Story Abv Sqft 1,216 960 1,024 01W Sqft 700 768 776 Tota l Sqft 1,918 1,728 1,800 Grg stis 2 2.00 2.00 Prk Char Detached Garage Detached Garage Attached Garage, Driveway- Concrete,Garage Door Opener Year Built 1964' 1958 1959 Lk/Wt Lot Sz 239X160(8110)ACR 75X135 E90XIIWX86X125 - Acres 0.8 0.24 0.23 Fdtn Sizes 1,218; 1,000' 1,024' Ext Hardboard/Masonite Metal/Vinyl Wood,Stucco FPI 1 0 1 0 Bsmt Full,Partially Finished Full,Finished(Livable), Egress Full,Finished(Livable), Egress Windows Windows Amenit Hardwood Floors Deck Patio,Hardwood Floors Researched■ P�W 941 Hillwind Rd NE Fridley, MN 5 prepared-5962 by Brett Hildreth Comparative , 720 BC-Brooklyn Center, • Monday,April 4,2011 CMA Comparables This page outlines the subject property versus comparables properties. Z 4s a A �E �i 3q5a58iY6Z ,. - Subject Procerty Details Qftallfs 720 69th Ave N 7231 Bryant Ave N 7055 Perry Ave N M LS# 3930237 3890192 status Sold Sold Sold Sch Dist 11 -Anoka-Hennepin 11 -Anoka-Hennepin 279-Osseo List Price $139,900 $139;0 Sold Price $140,000 $140,500 S.Cntrbtn $4,000 $6,500 Off Mrkt 06/05/2010 05/05/2010 Dt Closed 06/24/2010 06108/2010 CDOM 73 _ 59 Beds 3 3 4 Baths 2 2 2 Style ", (SF)One Story . (SF)One Story (SF)( Story Abv Sgft 1,218 1,156 1,166 Blw Sgft 700 719 500 Tots i Sgft 1,918 1,875 1,666 Grg St>k 2 2.00 1:Do Prk Char Detached Garage Detached Garage,Garage Door Detached Garage Opener Year Built 1964 1964 1957; Lk/Wt Lot Sz 239X160(8/1P)ACIR 76 X 125.58 75 X 132.5 Acres 0.8 0.22 0.23 Fdtn Size 1,218 1,156- 1,166 Ext HardboardtMasonite Metal/Vinyl Metal/Vinyl #FP 0 0 0. Bsmt Full,Partially Finished Full,Finished(Livable) Full,Finished(Livable),Egress Windows Amenit Hardwood Floors Patio,Natural Woodwork, Kitchen Hardwood Floors Window,Hardwood Floors, RResearched and prepared by Brett Hildreth 941 Hillwind Rd NE Fridley, MN 55432-5962 763-227-8614 i Comparative • Ave N Brooklyn Monday,April 4,2011 CMA Comparables This page outlines the subject property versus comparables properties. skifi K k° �I F p Sub ect Property Details Details 720 69th Ave N 6800 Beard Ave N 5736 Northport Dr M LS# 3890809 3942089 status Sold Sold Sold Sch Dist 11 -Anoka-Hennepin 279-Osseo 281 -Robbinsdale List Price $139,000 $139,000 Sold Price $136,000 $134,000 S. Cntrbtn $5,540 $4,383 Off Mrkt 06/05/2010 09/08/2010 L)t Chet! . 06/24/2010 09/03%2010 CDOM 92 103 Belo 3 '3 5 Baths - 2 2 2 Style (5F)One Story (SF)One Story (SF}One Story Abv Sqft 1,218 1,028 1,198 Biw Sgft 700 621 980 Total Sgft 1,918 1,649 2,178 Grg Stls 2 2.00 2.00 PTk Char Detached Garage Detached Garage, Garage Door Detached Garage Opener Year Buidt 1964 1959 19561 Lk/Wt Lot Sz 239X960($/1Q)A£R 75x130 73.67X 110 Acres 0.8 0.21 0.19 Fdtn Size 1,218 1,028 1,198 Ext Hardboard/Masonite Stucco Stucco, Brick/Stone #FP 0 0 0 Bsmt Full,Partially Finished Full,Finished(Livable) Finished(Livable),Egress Windows Amenit Hardwood Floors Patio,Natural Woodwork,VJt hen Deck,Kitchen Window,Hardwood Window,Hardwood Floors Floors,Tiled Floors,Washer/Dryer PP_ Researched NON . prepared MN 55432-5962 763-227-8614 Comparative Market 720 BC-Brooklyn Center,55430 Monday,April 4,2011 CMA Comparables This page outlines the subject property versus comparables properties. tur Y r.a. Subject Property Details Details 720 69th Ave N 4512 66th Ave N 3800 66th Ave N M LS# 3958139 3918991 Status Sold Sold Sold Sch Dist 11 -Anoka-Hennepin 279-Osseo 279-Ossea List Price $139,000 $135,000 Sold Price $140,000 $135,000 5. Cntrbtn $6,000 $5,000 Off Mrkt 0927/2010 05/14/2010 Dt MOW 11/15/2010 05/2712010 CDOM 49 104 Beds 3 3 3 Baths. 2 2 2 Style {SF)One Storir . {SF)One Story {SF)One Story Abv Sgft 1,218 1,090 1,110 811W Sgft 700 810 7" Total Sgft 1,918 2,000 1,887 Grg Std 2 2400 2.00 Prk Char ' Detached Garage Detached Garage,Driveway- Attached Garage,Driveway- Asphalt, Garage Door Opener Concrete Year Built 1 g64 1953 Lk/Wt Lot:St:, 239X160(8/I[0)AgR 75 X 161.92 128X91 X1 58X84 Acres 0.8 0.28 0.00 fdtn Size 1,218 1,090 1,100 Ext Hardboard/Masonite Other Shakes, Brick/Stone #FP 0 1 0 Bsmt Full,Partially Finished Full,Finished(Livable) Full,Finished(Livable) Amenit Hardwood Floors Ratio, Vitchen Window Deck,Natural Woodwork,Kitchen Wirxiow,Hardwood Room Researched and prepared by Brett Hildreth F 941 . -. NE Fridley, Comparative Market - 720 69th Ave N Brooklyn - Monday,April 4,2011 CMA Comparables This page outlines the subject property versus comparables properties. w . �4 Subject Prove Details Details 720 69th Ave N 5300 Girard Ave N 4825 71 st Ave N MILS# 3921367 3931699 States. Sold rr Sold Sold Sch Dist 11 -Anoka-Hennepin 286 Brooklyn Center 279-Osseo List Price $135,000 $129;900 Sold Price $140,000 $130;000 S.Cntrbtn $4,200 $4,500 Off Mrkt 05115/2010 06/24/2010 Dt Closed 0613010 0712112010 CDOM 8 43 Beds 3 4 ;' 4 Baths 2 2 2 Style {SF)Cane Stour (SF)One Story {SF)tjne Story Abv Sqft 1,218 1,029 1,098 BIW Sqft 700 550 852 Tota l Sqft 1,918 1,579 1,950 Grg StIs 2 2.00 1.00 Prk Char Detached Garage Detached Garage Attached Garage, Driveway-Asphalt Year Built 1964_ 1 1960 Lk/Wt Lot Sz 239XI60(8110)ACR 75 X 13418 75x154x75x145 Acres 0.8 0.23 0.27 fdtn Size 1,218 1,029 1,098> Ext Hardboard/Masonite MetaWinyl Metal/Vinyl #FP 0 D 0 Bsmt Full,Partially Finished Full,Finished(Livable), Egress Full,Finished(Livable) Windows Amenjt Hardwood Floors Natural Woodwork,Kitchen Window, Tiled Floors Researched and prepared by Brett Hildreth 941 Hillwind Rd NE Fridley, MN 55432-5962 763-227-8614 Comparative Analysis 720 69th e N BC-Brooklyn Center, • Monday,April 4,2011 CMA Comparables This page outlines the subject property versus comparables properties. x . 3 + Subject Prope Details Details 720 69th Ave N 6306 Indiana Ave N 5925 Ewing Ave N M LS# 3933459 3919552 Status` Sold Sold Sold Sch Dist 11 -Anoka-Hennepin 279-Osseo 281 Robbinsdale List Price $129,900 $127,500 Sold Price $131,800 $127,500 S.Cntrbtn' $3,954 $4,463 Off Mrkt 09/30/2010 06/2112010 , 2 0fi/3012010 St Ck6s�cl CDOM 110 52 Beds 3 3 3 Baths 2 2 2 style (SF)One Story (SF)One Story (SF)fine Story Abv Sqft 1,218 1,120 1,000 91w Sgft - 700 900 484 Total Sgft 1,918 2,020 1,484 Grq Stls 2 1.00 2.00 Prk Char Detached Garage Attached Garage Detached Garage Year Built 1964 1958 1956 Lk/Wt Lot Sz 239X160(&1 O)ACR 75X160: 75 X 138.2 Acres 0.8 0.28 0.24 Fdtn 5iae 1,218 1,120 1,020 Fact Hardboard/Masonite Metal/Vinyl Metal/Vinyl,Brick/Stone #FP 0 0 0 Bsmt Full,partially Finished Walkout,Full,Finished(Livable), Full,Finished(Livable) Day/Lookout Windows Amanit Hardwood Floors Natural Woodwork,Kitchen Window, Natural Woodwork Hardwood Floors ENEEP -, and p 62 Comparative 0 69th Ave - - • Monday,April 4,2011 CMA Comparabtes This page outlines the subject property versus comparables properties. 4 :7 4, �' j yk Subiect Property Details Details 720 69th Ave N 5827 Camden Ave N 7019 Quail Ave N M LS# 3910815 3887318 Status Sold Sold Sold Sch Dist 11 -Anoka-Hennepin, 286-Brooklyn Center 279-Osseo List Price $124,900 $119;900 Sold Price $127,500 $119,900 S.Cftrbtn $S,OCIt) Off Mrkt 05105/2010 08/23/2010 Dt Closed 06/10/2040 11/04/2090 CDOM 22 179 Beds 3 2 ' Baths 2 1 2 Style (SF)One Story (SF)One Story (SF)One Sbcsry Abv Sqft 1,218 1,040 1,040 Blw soft 700 0. 600 Tots l Sqft 1,918 1,040 1,640 Grg Stls 2.00 1.00 - Prk Char Detached Garage Attached Garage Detached Garage, Driveway- Concrete, Driveway Asphalt, Garage Year Built 1964 2004 A957 Lk/Wt Lot Sz 239X160(WO)ACR irregular 75x136x75x137 Acres 0.8 0.25 0.24 Fdtn Size 1,218' 1,040 1,040' Ext Hardboard/Masonite Metal/Vinyl Stucco FP 0 0 0 Bsmt Full, Partially Finished Full,Egress Windows Full Amen t Hardwood Floors Deck,Porch Deck,Natural Woodwork, Kitdhen Window,Ceiling Fan(s), PPP'_ Researched and prepared by Brett Hildreth 941 Hillwind Rd NE Fridley, MN 55432-5962 763-227-8614 Comparative Analysis 69th Ave N Brooklyn - Monday,April 4,2011 Table Summary of Comparable Solds This page summarizes the comparable sold listings in this market analysis. Sold Listings $Change %Change Address List Price Sale Price LP to SP LP to SP Sold Date DON CDOM - 3007 64Th Avenue $199,900 $173,500 $-26,400 -13.21 07/16/2010 153 153 3112 Ohenry Road $179,900 $174,900 $-5,000 -2.78 08/24/2010 136 136 6807 Regent Avenue $159,999 $159,999 $0 0.00 06/30/2010 112 112 5842 Abbott Avenue $151,000 $150,000 $-1,000 -0.66 08/30/2010 87 87 7124 France Avenue $149,900, $136,700 $-13,200 -8.81 10/22/2010 69 69 3218 67Th Avenue $149,900 $150,000 $100 0.07 09/17/2010 11 11 5201 Eleanor Lane $149,900 $149,000 $-900 -0.60 10/29/2010 33 41 4106 71St Avenue $147,000 $145,000 $-2,000 -1.36 09/24/2010 109 109 6236 Regent Avenue $144,900 $146,900 $2,000 1.38 10/19/2010 53 67 7125 W Palmer Lake Drive $144,900 $144,900 $0 0.00 08/31/2010 45 45 7231 Bryant Avenue $139,900 $140,000 $100 0.07 06/24/2010 11 73 7055 Perry Avenue $139,000 $140,500 $1,500 1.08 06/08/2010 59 59 6800 Beard Avenue $139,000 $136,000 $-3,000 - 2.16 _ 06/24/2010 92 92 5736 Northport Drive $139,000 $134,000 $-5,000 -3.60 09/03/2010 75 103 4512 66Th Avenue $139,000 $140,000 $1,000 0.72 11/15/2010 49 49 3800 66Th Avenue $135,000 $135,000 $0 0.00 05/27/2010 15 104 5300 Girard Avenue $135,000 $140,000 $5,000 3.70 06/30/2010 8 8 4825 71St Avenue $129,900 $130,000 $100 0.08 07/21/2010 23 43 6306 Indiana Avenue $129,900 $131,800 $1,900 1.46 12/01/2010 110 110 5925 Ewing Avenue $127,500 $127,500 $0 0.00 06/30/2010 52 52 5827 Camden Avenue $124,900 • $127,500 $2,600 2.08 06/10/2010 22 22 7019 Quail Avenue $119,900 $119,900 $0 0.00 11/04/2010 179 179 Average $144,332 $142,414 $-1,918 -1.02 68 78 Median $139,450 $140,000 $0 0.00 56 71 Minimum $119,900 $119,900 $-26,400 -13.21 8 8 Maximum $199,900 $174,900 $5,000 3.70 179 179 Fridley,Researched and prepared by Brett Hildreth W R 941 Hillwind Rd NE Comparative Market Analysis 720 Brooklyn - - • Monday,.April 4,2011 Pricing Recommendation This page suggests a recommended selling price based on a thorough analysis of your property. After analyzing your property,comparable properties on the market now,recent sales and comparable properties that failed to sell,I conclude that in the current market,your property in most likely,to sell for ..........-- ._.�I Researched and p -•- by Brett Hildreth 941 Hillwind Rd NE Fridley, MN 55432-5962 763-227-8614 S Written Appeals by Taxpayers David Trepanier Residential 5801 Knox Ave N., PID # 02- 118 -21 -14 -0020 Bill Stoner Commercial Stoner & Associates, Inca 5001 Drew Ave N. t PID # 10- 118 -21 -13 -0003 ' Michael Seery Commercial 615 66 Ave N PID # 36- 119 -21 -13 -0119 BRE /ESA P Portfolio Commercial Extended Stay Hotel 2701 Freeway Blvd. PID # 35- 119 -21 -23 -0088 Consideration of Written Appeals ' The following format is recommended for each written appeal. Please state owner(s) name and address. Review owner(s) statement of estimated market value or classification and presentation of factual information regarding the property. Assessors statement of value or classification and presentation of factual information regarding the property. • Questions addressed to the Assessor. The Local Board of Appeal and Equalization considers the appeal and makes one of the following motions: • Refer the appeal to the Assessor's office for an interior review of the property and the Assessor's recommendation at the Local Board reconvene meeting on April 18, 2011. Make no change and sustain the 2011 estimated market value or classification. If the owner(s) is not satisfied with the outcome of the Local Board of Appeal and ' Equalization they may appeal to the County Board of Appeal and Equalization. 1 Y, 2 ■ Written Appeal ■ David Trepanier 5801 Knox Ave N., Brooklyn Center e PID # 02- 118 -21 -14 -0020 The following format is recommended for each written appeal. Please state owner(s) name and address. Review owner(s) statement of estimated market value or classification and presentation of factual information regarding the property. Assessor's statement of value or classification and presentation of factual information regarding the property. I Questions addressed to the Assessor. The Local Board of Appeal and Equalization considers the appeal and makes one of the following motions: • Refer the appeal to the Assessors office for an interior review of the property and the Assessor's recommendation at the Local Board reconvene meeting on April 18, 2011. • Make no change and sustain the 2011 estimated market value or classification. If the owner(s) is not satisfied with the outcome of the Local Board of Appeal and ' Equalization they may appeal to the County Board of Appeal and Equalization. RECEIVED MAR 28 1011 David do Pat Trepanier 439 Birchwood Courts -Birchwood MN 55110 -1805 1 651- 426 -9336 Mar 27, 11 1 Sub j: 2011 valuation notice. 5801 Knox Ave E. Dear Board members: ' I strongly disagree with the appraiser's high valuation. As stated in my protest letter to the assessors, they cannot compare a sale unless the property is within the polluted plume. And they must f ind out that if any sales within the plume were made, the purchaser was informed. I have given the assessors appraisals in the past and they tried to get them excluded from evidence in court. The office must come to grips with this problem or the city s left o or a class a ction ty o p e n f sa su t All the real estate a9 ents I have contacted valued the house at $100,000 or less, and due to loan restrictions, I would have to carry a CO to sell it. I cannot appear in person at your meeting, due to being out of town. An contact at t i rry may me he above number to d isc uss, the issue. I � 0 0avid A Tr r i "CEIVED MAR 2'1 2011 David Pat Trepanier ' 439 Birchwood Courts Birchwood MN 55110 -1805 651 -426 -9336 March 16 2011 Subj: 5801 Know Ave N. 02 118 2114 0020 Dear Assessor: Received our 2011- Notice of valuation. I am in total disagreement with Y � your assessment. Reading your counties own papers, it is widely known that values have dropped 11 to 18 %. It will take a lot of numbers to convince me that my property which is in a heavily polluted area has only dropped $1900 in value. I hope that his is not another valuation that I will have to take to court. As I am out of town until May, I request that you contact me in writing to set up a property tour and review. I have tried to call, and cannot seem to get thru. I wish that this letter be appeal to the local board. ' Thank vou , ' v' �i T City of Brooklyn Center A Millennium Community TO: 2011 Brooklyn Center Local Board of Appeal and Equalization RE: David Trepanier 5801 Knox Ave N. Brooklyn Center, MN 55429 Mr. Trepanier contacted our office via voicemail March 17 2011 regarding the 2011 estimated market value of $130,000 for his rental property located at 5801 Knox Ave N. An appraiser from the Assessor's office returned Mr. Trepanier's call March 17 leaving a 1 message requesting he call back to schedule an interior review. When Mr. Trepanier again called the Assessor's office March 18th, he indicated that he was out of town until May, but that he had sent a letter to the Assessor's office he wanted used as a written ' appeal. This letter has been included for your information. To date, the Assessor's office has not received any market data or income and expense information from Mr. Trepanier. ' As Mr. Trepanier did not contact the Assessor's office until March 17 regarding his appeal, the last interior inspection of the property was completed March 27 2008. His 2011 estimated market value is based on the characteristics on file from the 2008 review. ' The property is a 1,216 square foot rambler with a three car attached garage in good condition. The garage had a functioning furnace installed, but not hooked up at the 2008 review. The main level includes a living, dining, kitchen, one other room, one full ' bathroom, and two bedrooms. One bedroom is large with a walk in closet made from the combination of two smaller bedrooms. Basement family room finish is comprised of sheetrock interior walls, with no ceiling. An income approach to valuation was included in this report using market rents. The indicated market rent used was at the higher end of the rental scale for a two bedroom unit to account for the three stall garage, large square footage, and useable finished area. The market based income approach indicated a value of $124,000 for a 1,000 sq. ft. standard two bedroom home in Brooklyn Center. Specific rental data was not available for a larger than average single family home. An appeal packet and comparable sales information were mailed to Mr. Trepanier at his Birchwood MN address on March 21 st. The Assessor's office used both similarly sized ramblers, as well as smaller homes of different styles that were located within the soil vapor intrusion study area. All comparables were open market sales that occurred within the state study period for the 2011 assessment. ' Comparable two is similar in size and age, located close to the subject property, and is considered the most comparable sale. Comparable seven has three garage stalls, the same as the subject property. Comparables five and six are significantly smaller than the ' subject property, and comparable six is a different style, however both are located within the investigation area for the Logan Soil Vapor Study. The investigation of properties in ' 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 www.cityofbrooklyncenter.org the study area relative to soil vapor intrusion is underway, but as yet, no definitive ' information is available regarding the total extent of potential soil vapor contamination in the study area. Presently there has not been any market data to specifically indicate that sale prices in this area have declined due to the soil vapor intrusion study. ' The enclosed sales comparables provided by the Assessor's office compare the subject property to nine open market sales in Brooklyn Center. These comparables sold within a ' price per square foot range of $113 - $137. The enclosed sales comparables indicate a range of sale prices from $107,500 to $174,900. For the 2011 assessment, the subject property was valued at a price per square foot of $107, lower than the indicated sales ' comparable range. A current review of the exterior and interior characteristics of the home will be necessary for the Assessor's office to reappraise the property to make a recommendation to the local ' board. Respectfully submitted, Nancy Wojcik, SAMA City Assessor City of 1 BROOKLYN CENTER ' 2011 Local Board of Appeal and Equalization pp q ' Written Appeal #1 David A. Trepanier Patricia Trepanier 5801 Knox Ave N 02- 118 -21 -14 -0020 t E ■ 1 2007 12 21 v ' 2011 Assessed Value: $130,000 Recommendation: Interior review required to reappraise 1 1 This report is not an appraisal as defined in M.S. §82B.02 (subd.3) nor does it comply with the Uniform Standards of Professional Appraisal Practice. It is intended to be used as a reference only and any use other than its intended use is prohibited and unlawful The author does not represent this to bean appraisal and is not responsible for any inappropriate use. 1 It is a report ofpublic records using a mass appraisal technique. i City of Brooklyn Center Assessing Department 2011 Local Board of Appeal and Equalization ' W ritten Appeal #I Staff Report Property Owner(s): David A. Trepanier Patricia Trepanier Property Address: 5801 Knox Ave N PID #: 02- 118 -21 -14 -0020 Market Value Assessment Year 2011 $130,000 Assessment Year 2010 $131,500 Assessment Year 2009 $149,100 Sale: November 1, 2001 - 113,000 (11 - Other) ' Comments: Subject property is a 1,216 square loot rambler located in an area of similar properties. Subject ' property has a living, dining, kitchen, one other room, a full bath, and two main floor bedrooms, including a larger than average Master Bedroom with walk -in closet made from the combination of two original main floor bedrooms, Basement finish of subject property is block exterior walls, sheetrock interior walls and no ceiling. Subject property has a three car attached garage, which is superior to the average Brooklyn Center property. The home is currently rental and is in generally good condition. This home has it's original exterior and windows. The furnace was replaced in December 2009. Assessor Recommendation: ' Interior review required to reappraise ' Appraiser: Last Inspection Date: Jill Brenna March 27. 2008 1 ' 2011 Board of Appeal and Equalization 2 Written Appeal #I Subject Data Summary ' PID #: 02- 118 -21 -14 -0020 Property Address: 5801 Knox Ave N Brooklyn Center, MN 55430 ' Multiple Address: No Lot /Block: 057/000 Addition: Auditor's Subdivision No. 218 Hennepin County, Minn ' Legal(120): N 72 6/10 FT OF S 102 6/10 FT OF E 165 F T OF W 314 3/10 FT Owner(s): David A Trepanier Patricia Trepanier Property Classification: Residential - Non - Homestead 2011 EMV: 130,000 ' 2010 EMV: 131,500 2009 EMV: 149,100 Last Sale: 11/1/2001 - 113,000 - Other - 11 ' Lot Size: 10,125 Sq.Ft. / Acres Zoning: RI Dwelling Type: Single Family Style: One Level/Rambler Bedrooms: 2 Baths: 1 Actual Year Built: 1955 ' Gross Building Area: 1,216 Basement Area: 960 Bsmt Finished %: 50 Garage #1: 3 Car Attached Garage #2: None ' 2011 Board of Appeal and Equalization 3 Written Appeal # 1 Additional Subject Photos 1 A 1 .. i 1 rn 2007 12 ?i Front View 1 1 1 1 1 1 i 1 1 2011 Board of Appeal and Equalization 4 Written Appeal # I Subject Sketch ' p. 10' r 1G' 24' Gal aqe 4 Fil st Flool �* 792 N 121 50' r -'- -- - --- -- - -'- -' 30' Zo• °ego" r -'--� N Basement N FREESTAlID111G 960 ' 40' Sketch by Cpex fW Sketch 2011 board ofAppeal and I?qualization Written Appeal #I , 16 1 \ F 2 Y �4 N ,.� 7 7.11 .yg. -f.: .+w. .. ... z 1` 1 Sales Comparables ' item Subject Comparable 1 Comparable 2 Comparable 3 PID 0211821140020 0311821430075 0211821420008 0111821310051 Address 5801 Knox Ave N 3513 53rd PI N 5549 Logan Ave N 5535 Bryant Ave N District Sale Price $113,000 $146,500 $141,000 $150,000 Sale Date 11/01/2001 02/26/2010 05/07/2010 11/09/2009 ' Cash Equivalent $141,373 Price Per Sq. Ft. $92.93 $113.10 $118.19 $126.69 Dwelling Type Single Family Single Family Single Family Single Family Style One Level/Rambler One Level/Rambler One Level/Rambler One Level/Rambler ' Property Area 10,125 16,639 9,576 10,125 Actual Age 1955 1955 1955 1950 Effective Age 1980 1980 1980 1980 Quality Class B06 B06 B07 B07 1st Floor Area 1,216 1,250 1,193 1,184 Total GBA 1,216 1,250 1,193 1,184 Finished Area 1,696 1,775 1,951 1,856 Basement Area 960 1,050 1,010 896 Basement Finished ( %) 50% 50% 75% 75% Total Bedrooms 2 3 3 4 Total Bathrooms 1 1 2 2 Garage 1 Floor Area 792 280 472 480 ' Garage 1# of Cars 3 1 2 2 Garage 1 Placement Attached Attached Attached Tandem Detached Total # of Cars 3 1 2 2 Walkout Type ' Air Conditioning Central Central Central Central Pool Area -Total Fireplaces 1 2 Deck Area -Total 224 ' Porches 200 River Lake Influences Apartment Thru Street I I I I I 2011 13oard of A cal and lic utilization 7 Written Appeal # 1 PP 1 P 1 1 r 1 1 1 c:» ' 1 1 t n f .w rnt Sales Comparables ' item Subject Comparable 4 Comparable 5 Comparable 6 PID 0211821140020 3411921340027 0211821410079 0111821320051 Address 5801 Knox Ave N 4007 Janet La 5626 Logan Ave N 5601 Girard Ave N District Sale Price $113,000 $166,000 $107,500 $114,900 Sale Date 11/01/2001 05/14/2010 03/18/2010 06/14/2010 Cash Equivalent $160,000 $101,773 ' Price Per Sq. Ft. $92.93 $128.21 $131.32 $131.77 Dwelling Type Single Family Single Family Single Family Single Family Style One Level/Rambler One Level/Rambler One Level/Rambler 1 1/4 Property Area 10,125 9,750 9,975 11,440 ' Actual Age 1955 1956 1951 1950 Effective Age 1980 1985 1985 1980 Quality Class B06 B06 B07 B07 ' 1st Floor Area 1,216 1,248 775 680 Total GBA 1,216 1,248 775 872 Finished Area 1,696 2,184 1,163 1,160 Basement Area 960 1,248 775 576 ' Basement Finished ( %) 50% 75% 50% 50% Total Bedrooms 2 5 2 3 Total Bathrooms 1 2 1 2 Garage 1 Floor Area 792 624 396 440 ' Garage 1# of Cars 3 2 2 2 Garage I Placement Attached Detached Detached Detached Total # of Cars 3 2 2 2 Walkout Type Air Conditioning Central Central Central Central Pool Area -Total Fireplaces 1 Deck Area -Total Porches 200 64 River Lake ' Influences Apartment Thru Street 1 2011 Board of Appeal and Equalization 9 Written Appeal #I Sales Com arables a ' Comparable 7 i 0• \ " 1 r ' Comparable 8 I Comparable 9 2011 Board of Appeal and Equalization 1() Written Appeal 4 1 Sales Comparables ' item Subject Comparable 7 Comparable 8 Comparable 9 PID 0211821140020 4 3411921410061 0211821440083 0311821130077 Address 5801 Knox Ave N 3112 Ohenry Rd 5431 Irving Ave N 5725 Northport Dr ' District Sale Price $113,000 $174,900 $145,000 $168,500 Sale Date 11/01/2001 08/24/2010 09/17/2010 10/30/2009 Cash Equivalent $169,653 $144,740 ' Price Per Sq. Ft. $92.93 $134.01 $135.27 $136.77 Dwelling Type Single Family Single Family Single Family Single Family Style One Level/Rambler One Level/Rambler One Level/Rambler One Level/Rambler Property Area 10,125 10,950 10,087 10,504 Actual Age 1955 1958 1955 1955 Effective Age 1980 1980 1985 1980 Quality Class B06 B06 B07 B06 ' Ist Floor Area 1,216 1,266 1,070 1,232 Total GBA 1,216 1,266 1,070 1,232 Finished Area 1,696 2,279 1,783 2,156 Basement Area 960 1,266 950 1,232 ' Basement Finished ( %) 50% 80% 75% 75% Total Bedrooms 2 5 4 3 Total Bathrooms 1 2 2 2 Garage I Floor Area 792 308 598 280 ' Garage I# of Cars 3 1 2 1 Garage I Placement Attached Attached Attached Attached Total # of Cars 3 3 2 1 Walkout Type ' Air Conditioning Central Central Central Central Pool Area -Total Fireplaces Deck Area -Total 180 228 468 ' Porches 200 168 252 River Lake Influences Apartment ' 2011 Board of Appeal and Equalization 11 Written Appeal #I 6,rtArer! ��i Isla i �. J - c6rhA'wrr ' •, a II f ; l ( 1 +( :� .� k i Wwbd ester Lr . _ 1 - 650 Ave N _ - F rer�vey 65m T m Comp 7 0 40% ! ' rookl t m y Ptin� B n q 11veN z¢. " Q'HenryJ2d p` CEJ3t@Iy m �G3rdAveN - G3rcigvoN Garden Cityo — — ' �W. L z �1�7Y Nam,Rd�c� Park �rJel3ros� 9 1, :Q i 62 a - q fid U �, t �? t ' Comp 4 - w� dAvn N Glstrwel� f-t. Gistkv N v Kylawn GistA.'eN` Park z 4a GOL { c `�g ! 60thA�reN I n r o ti Fd Ua c t o c� ' 69th A4S 10,�58h Ave N C omp 9 k' t 68tlAw. N' I I 4j Comp 5 _ ! CCE P 6 t BrookdaleCenter. ,` Cofnp 3 mu, Ave N � � Comp 2 � < ' a P Northport i ��1 g z 0 i a m Twin Park & i z 3?, I r Lake � Erictta C omp 8 s? Z c Peninsula rr' vaN a� e: 35 1 Lions k Gs i� r i ci x L Park z Comp 140 Park 2 54thAveN = E k Upper Twin ! I I j i u i ( Bell Ln k ' Lake �T�e 53rd Av N i 100 r S Z a G3rd Ave N - N 53rd Ave Az L Z 521)d AvetJ N52ndAve t j j Oai 5111 X ° 4 s tAtie tJ u a ?~ - d GistkveN 51 s L tJ5lstAve m V. Iles - L z ~ I C i 50th Ave M ° GUth Aae N { 2011�1icr sogg�C rporation � X11( NW TEQ' jQ AND c1Q r,. 4Utih,�' e r ' COMPARABLE SALES MAP ' COMPARABLE #1 351353 rd Place, Brooklyn Center COMPARABLE #2 5549 Logan Ave N, Brooklyn Center COMPARABLE #3 5535 Bryant Ave N Brook Center v v ' COMPARABLE #4 4007 Janet Lane, Brooklyn Center ' COMPARABLE #5 5626 Logan Ave N, Brooklyn Center COMPARABLE #6 5601 Girard Ave N, Brooklyn Center COMPARABLE #7 3112 Ohenry Road, Brooklyn Center ' COMPARABLE #S 5431 Irving Ave N, Brooklyn Center COMPARABLE #9 5725 Northport Dr, Brooklyn Center 41'}► .. M . ..... C APPR eria ............................ ............................... R r :: I ::: e to D..... Owner Name: David Trepanier Yr Built: 1955 ' Property Address: 5801 Knox Ave N PID: 02 118 21 14 0020 ..... ..... .. .. .. 1. .. :...... iT: >:::::LCON : » >:: ACTUAL.: TOTAL: >:::: >:::: TOTAL:.:. `.` . . ;T .......... ..` ' :' >.U ..$.......... MI R .eNT : RF�IQF >: Fz.CO RENT. >:::Aid,'TUA4:RATF 0 Studios $480 $0 $0 $0 ' 0 1 Bdrm $650 $0 $0 $0 1 2 Bdrm $1,000 $0 $1,000 $0 0 3 Bdrm $1,250 $0 $0 $0 0 4 Bdm $1,350 $0 $0 $0 0 5 Bdm $1,550 $0 $0 $0 3 Garages $50 $0 $150 $0 ECONOMIC ACTUAL MONTHLY ADJ. RENT $1,150 $0 ' TOTAL ANNUAL ADJ. RENT $13,800 $0 TOTAL NUMBER OF UNITS 1 ' GROSS BUILDING AREA 1,216 [/] TOTAL NUMBER OF BEDROOMS 2 ' Gross Rent Multiplier G.R.M. 9.00 9.00 9.00 ' CAPITALIZED VALUE OF PROPERTY $124,000 $0 CAPITALIZED VALUE PER UNIT 124000 0 ' LV per Unit $44,600 BV per 2011 Land $44,600 $44,600 2011 Bldg $79,400 $65.30 CORRELATED 2011 VALUE BY INCOME APPROACH $124,000 yll 201:1 Ass - sarfient r Lati f Ya1ue ' ""+ F Bldg Value � BR 1 A ° n hst $44, Ot ; $79,400 tj2,4 t10 , s � � 2011 per �J �i f:97 Total 00 $44;800 $79 $14 0Q0 . :; 2011 Per Unit $1Z4 Comments: The property is a 1,216 sq. ft. rambler with a three car attached garage in good condition. The main level includes a living, dining, - kitchen, other room, two bedrooms, including one large bedroom with walk in closet comprised of the combination of two smaller bedrooms, and one full bathroom. The basement finished area includes one family room. The property has a gas forced air ' furnace, replaced in 2009, and central air conditioning. The indicated market rent used is at the higher end of the rental scale for a two bedroom unit to account for the three stall garage, large square footage, and useable finished basement area. The market income approach indicated a value of $124,000 for a 1,000 sq. ft. standard home in Brooklyn Center. More specific rental data was not available for a larger than average property. Written Appeal Bill Stoner Stoner & Associates, Inc. 5001 Drew Ave N., Brooklyn Center PID # 10-118-21-13-0003 The following format is recommended for each written appeal. Please state owner(s) name and address. Review owner(s) statement of estimated market value or classification and presentation of factual information regarding the property. Assessor's statement of value or classification and presentation of factual information regarding the property. • Questions addressed to the Assessor. '' The Local Board of Appeal and Equalization considers the appeal and makes one of the following motions: 0 Refer the, appeal to the Assessor's office for an interior review of the property and the Assessor's recommendation at the Local Board reconvene meeting on April 18, 2011. • Make no change and sustain the 2011 estimated market value or classification. If the owner(s) is not satisfied with the outcome of the Local Board of Appeal and Equalization they may appeal to the County Board of Appeal and Equalization. T City of Brooklyn Center ' A Millennium Community ' TO: 2011 Brooklyn Center Local Board of Appeal and Equalization RE: Bill Stoner ' Stoner & Associates, Inc. 5001 Drew Ave N. Brooklyn Center, MN 55429 Mr. Stoner contacted the Assessor's office on February 25, 2011 regarding the 2011 estimated market value of $447,000 for taxes payable in 2012. The assessor completed a review of the on March 4, 2011, and found no changes to the h property sical characteristics. Mr. Stoner g physical was provided with some data regarding smaller industrial /warehouse type properties (predominant in the area) and the appeal procedures at the appointment. Mr. Stoner indicated ' he had questions regarding renting out office space within his building, and the required parking. Mr. Stoner was directed to call Gary Eitel, Business & Development Director, regarding his concerns. Mr. Stoner had general questions regarding the property taxes of commercial properties. t . Ms. Randi Erickson, a representative for Mr. Stoner, contacted the Assessor's office on March 25, 2011 regarding the valuation of Mr. Stoner's property. Ms. Erickson discussed the subject ' property and disclosed that there was a restrictive covenant on the property. Ms. Erickson was given some market sale information over the phone on small industrial /warehouse properties in Hennepin County, typical for subject property area. During review, it was assumed that the ' property showroom area could be converted to manufacture or warehouse due to the high ceiling, but evidence of the covenant may remove this option. The subject property is much smaller in size than a typical office /showroom, and further research will be needed to review very small showroom property values, highest and best use, and the available permitted uses of the property. Ms. Erickson indicated that she would provide market information with a written appeal or appear at the board with documents /and or a presentation. Mr. Stoner also ' contacted the Assessor's office requesting an appeal application. The appeal application and a copy of the restrictive covenant were provided to the Assessor's office on March 25, 2011. ' The Assessor is requesting to do further review of the office /showroom market, the restrictive covenant documentation, and any additional information that will be provided by Ms. Erickson or Mr. Stoner on the property, and report back to the Local Board of Appeal and Equalization at the reconvene. ' Respectfully, s ' Nancy Woj Wk, SAMA City Assessor 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 www. cityo fbrooklyncenter. org City of ' BROOKLYN CENTER ' 2011 Local Board of Appeal and Equalization pp q ' Bill Stoner Stoner & Assoc. Inc. 5001 Drew Ave N 10-118-21-13-0003 M 7 r r 1 2011 Assessed Value: $447,000 ' Recommendation: Review Covenants & Market Report 1 ' This report is not an appraisal as defined in M.S. §82B.02 (subd.3) nor does it comply with the Uniform Standards of Professional Appraisal Practice. It is intended to be used as a reference only and any use other than its intended use is prohibited and unlawful The author does not represent this to bean appraisal and is not responsible for any inappropriate use. ' It is a report ofpublic records using a mass appraisal technique. City of Brooklyn Center ' Assessing Department 2011 Local Board of Appeal and Equalization ' Staff Report Bill Stoner Property Owners) Stoner & Assoc. Inc. ' Property Address: 5001 Drew Ave N PID #: 10- 118 -21 -13 -0003 ' Market Value Assessment Year 2011 $447,000 ' Assessment Year 2010 $460,000 Assessment Year 2009 $460,000 ' Sale: September 1, 1998 - 220,000 (11 - Other) Comments: Mr. Stoner contacted the Assessor's office on 1 28, 2011 regarding an appeal on his 2011 estimated market value. The assessor completed a review of the property on March 4, 2011, and ' found no changes to the physical characteristics. Mr. Stoner was provided with some data regarding smaller industrial /warehouse type properties at the appointment. Mr. Stone indicated he had questions regariding renting out office space within his building, and the required parking. ' Mr. Stoner was directed to call Gary Eitel, Business & Development Director, regarding parking requirements. ' Ms. Randi Erickson, a representative for Mr. Stoner, contacted the Assessor's office on March 25, 2011 regarding the valuation of Mr. Stoner's property. She discussed information on the property and disclosed that there was a restrictive covenant on the property. She was given some ' market sale information on small industrial /warehouse properties in Hennepin County, that are typical in that area. The subject property is much smaller in size than a typical office /showroom. ' Ms. Erickson indicated that she would provide market information with a written appeal or appear at the board with documents /and or a presentation. ' A copy of the restrictive comvenant was provided with the written appeal, but the Assessor is requesting further review of market documentation that will be provided on the property. Assessor Recommendation: 1 Review Covenants & Market Report Appraiser: Last Inspection Date: Nancy Wojcik March 4. - 1 011 ' 2011 Board of Appeal and Equalization 2 Bill Stoner Subject Data Summary 1 ' PID #: 10- 118 -21 -13 -0003 Buildings on File: 1 Property Name: Stoner & Associates ' Property Address: 5001 Drew Ave N Brooklyn Center, MN 55429 Multiple Address: No ' Lot /Block: 000 /000 Addition: Unplatted 10 118 21 Legal(120): W 135 FT OF E 165 FT OF N 150 FT OF S 18 3 FT OF NW 1/4 OF SW 1/4 OF NE 1/4 Owner(s): Stoner & Assoc. Inc. Property Classification: Commercial ' 2011 EMV: 447,000 2010 EMV: 460,000 2009 EMV: 460,000 ' EMV /GBA: 90.78 Lot Size: 20,424 Sq.Ft. /.46 Acres Zoning: Cl Gross Office Area Percent: Building Use: 471 -Light Commercial Utility Bldg/100% ' # Stories: 1 Avg Story Height: 12 ' Avg Clear Height: 10 Actual Year Built: 1955 Effective Year Built: 1995 Renovated Year: 2001 e First Floor Area: 4,924 Gross Building Area: 4,924 Basement: No ' Parking: Parking- Surface 1 ' 2011 Board of Appeal and Equalization 3 Bill Stoner Additional Subject Photos M f • Op X ' Photo Side 6 -2007 k 3 8 �S d S 4 � w� ' Side Photo 8 -2010 2011 Board of Appeal and Equalization 4 Bill Stoner Additional Subject Photos 1 w� Y ' Reception Area 3 -4 -2011 I 1 I r . l W r 1, ' Showroom 3 -4 -2011 2011 Board of Appeal and Equalization 5 Bill Stoner � .. . Add,bonalSub ectPhoto S \ <�(� <\ ■ y.z� . . . � .�. . � x :\ � � y �� \ ;. . ,� � �,■ , \ �: .. . :� . . . ... . A . a . Delm9/Warehouse a-4-211 � 2011 Boa of Appeal and Equalization 6 Bill Stoner ! Additional Subject Photos 1 1 }. 1 WH Sery & Gar Entr. 3-4-2011 ! ! 1 ! ! ! 1 1 ! ! 2011 Board of Appeal and Equalization 7 Bill Stoner Subject Sketch 1 27' 64' 4' ' 54 First Floor 4924 sf 1' 7 . ' 62' 1 10 lU'7, 10 ' sk.we byOfox k14na" Conversion 1 1 1 2011 Board of Appeal and Equalization 8 Bill Stoner 569 3�3] CITY OF BROOKLYN CENTER LOCAL BOARD OF APPEAL AND EQUALIZATION 2011 Assessment ' APPLICATION FOR APPEAL February 21, 2011 through March 18, 2011 You must return this application by March 18. 2011. to be placed on the Agenda for the ' Local Board of Appeal and Equalization held April 4, 2011 at 7:00 P.M. Name(s) LEI/ iL t.1,4 &4 'K , Sno ve Dayt Contact Number: 7 6.x- S3Y - 336 ° 0-144 T-k a-F•F; �r � �t � 3�S -� qS?a Property Address .5 Property Identification Number f a° 0 3 Assessor's 2011 E i ate Market V alu e L Iq 7 o ©ta stem d Ma et a e ' Is your property residential, commercial or multi-family? co /61 M E R C id L. If you are appealing a commercial, multi- family or residential rental property you must include income and expense data for calendar year 2010 with your application. What is the reason ou are appealing our 2011 assessment? t au.a� y V d-4- k IS ' When did you purchase your home? Date of Purchase Purchase Price Did you purchase your property from a bank, as a foreclosure or short sale? ) 4 Has your property physically changed since the purchase? (maintenance, upgrades, ■ remodeling or structural damage) Please list a brief description below with an estimated cost. Have you had a recent appraisal for refinancing, a purchase agreement or a market analysis by a real estate agent completed within the last year? Yes or No If so what was the determination of value? D 4 a fld What do you think the market value of your property should be? Please provide any documentation supporting your claim of overvaluation or erroneous classification with this application_ T . d 668ip -669 (89G l 3W I 30SSUT83WOlS Wd8 T Z T T Oa sa -SEW Randi Erickson 763- 427 -1424 p.1 ' Luc aw 1 S � 1 `can � ��• �� `� � � 1 1 1 W.NDI EWWON, G Rl, CRS 1 RFALTORa Senior Cornmereial Sales Associate _ (612) 701 -9800 CELL (612) 920 -4706 FAX randiQrealestateexperts.com 1 BURNET t Minneapolis takes Office ' 3033 EmelsiorBlvd., #100 Minneapolis, MN 55416 -4678 www6burnetcom 4 OparMetl by Bumet Really LLG 1 STONER &.ASSOCIATES, INC. representing manufacturers worldwide 1 W. R. ` ly" Stoner ,.: (763) 533 -3360 •fax: (763) 533 -4899 E -mail; billv0stonerassociales.com - - ww.stonerassociates.co m .'• .; , 5001 brew Avenue North • Minneapolis, MN 55429 ' Randi Erickson 763 -427 -1424 p.2 ' DECLARATION OF COVENANTS AND RESTRICTIONS , This Declaration is made this 20 day of : . ,1 , 2001, by Stoner and Associates, Inc., a ' Minnesota corporation (hereinafter the "Declarant'. ' L RECITALS 1.1. Declarant is the owner of real property in the City of Brooklyn Center, Hennepin County, Minnesota, legally described as the West 135 feet of the East 165 feet of the North 150 feet of the South 183 feet of the Northwest Quarter of the Southwest Quarter of the Northeast Quarter of Section 10, Township 11 S, Range 21, Hennepin County, Minnesota (hereinafter ' the "Subject Property"). I.2. Declarant, by its agent, has applied to the City of Brooklyn Center for site and building plan ' approval for construction of a 1829 square foot addition connecting two existing buildings resulting in a total building square footage of 4927 feet. U. The Declarant proposes to provide 14 parlang spaces on the Subject Property, 14 parking spaces will comply with the requirements of Brooklyn Center City Code providing that 1977 square feet of the floor area of the building proposed is limited to office space (which, ' under current code, would require 10 parking spaces at 1 space per 200 square feet) and 2950 square feet of floor area is used for storage/studio space (which, under current code, ' would require 4 spaces at 1 space per 800 square feet). IA. The City granted approval of Planning Commission application number 2000 -23 on January 8, 2001, conditioned on execution by Declarant of these covenants and restrictions to assure ' continuing cornpliance with the parking requirements of the City of Brooklyn Center. ' 1.5. The City has granted site and building plan approval for the development described above on flue basis of the representations by Declarant about the use to be put of the Subject Property, and the square footage of space that will be put to various specified uses, and but for such representations and agreements, the site and building plan approvals would not 1 have been granted. Cu,-198724Yi 1 BR29( Zia Randi Erickson 763- 427 -1424 p•3 ' 3 R L6. To secure the benefits and advantages of such site and building plan approval, Declarant desires to subject the Subject Property to the terms hereof. NOW, THEREFORE, the Declarant declares that the Subject Fropeny is, and shall be, held, transfenect, sold, conveyed, and occupied subject to the covenants, conditions and restrictions hereinafter set forth. 1. At least 2950 square feet of the floor area of the building on the Subject Property will be used for storagetstudio space, display space acid non-office accessory space; and no more than 1977 square feet of the floor space of the buildings on the Subject Property will be used for office space. No other uses may be made of the buildings on the Subject Properly without first securing the approval by the Brooklyn Center City Council of an amendment to this Declaration of Covenants and Restrictions. 2. The obligations and restrictions.of this Declaration nun with the land of the Subject Property and shall be enforceable against Declarant, its successors and assigns, by the City acting through its City Council. This Declaration may be amended from time to time by a written amendment executed by the City. IN WITNESS WHEREOF, the undersigned as fw duly authorized agent, officer or repmentative of Declarant has hereunto aet his hand and seal as of the day and year first above written. ' STONER AND ASSOCIATES, INC. 13y� Its ' BR291 -254 Randi Erickson 763- 427 -1424 p.4 1 STATE OF MINNESOTA ) 1 )SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me his ,e day of 2001 b A) , 64 V of Stoner and Associates,, Inc., a corp on under the laws of Minnesota, on behalf ofthe Co agBg SPJMJC-WN'OM CRA SS Notary Pubtic WTA} J ,11n S1� 2p06 1 " 1 1 1 1 1 1 1 1 _ 1 1 c11r199724vl 3 BR291214 1 Randi Erickson 763- 427 - 1424 p -5 APPROVED BY THE CITY OF BROOKLYN CENTER , BY Its By , is City Mara STATE OF NOWESOTA ) SS ' COUNTY OF HENNEPIN } My foregoing instrument was acknowledged before me this �Y of � , 2004, by � 1� lull Kra ess and Michael McCauley, the Mayor and Manager, respectively, of the City of Brooklyn Center, a public body corporate and politic under the laws of Miumesota, on behalf of the City. ' PAI•R1 WTARY PUB A PAS Notary Public t�clAltq rll a„�e�a�.a�.s°°a ' s , CUP19s72 A 4 UR291 214 w 7497341 ��L'VYti1AM M �{ x aF�1ee aF cctrHrY Reeu�� rt �s��cK�Prx c0uKrv, rs�x��,s ©�t� ,� •, ,:, � SiED ON CIO �� v ,. �- 2001 JUN 29 PM 2.38 CO. AU IA !.� fiv5i. { Yom, � ♦ i c o U L W C Cap's V IE f> T fit. -� 2 ; ate a � ' Written Appeal Michael Seery SP Brooklyn Center, LLC 61566 th Ave N.,` Brooklyn Center PI D # 36- 119 -21 -13 -0119 The following format is recommended for each written appeal. Please state owner(s) name and address. Review owner(s) statement of estimated market value or classification and presentation of factual information regarding the property. Assessor's statement of value or classification and presentation of factual information regarding the property. • Questions addressed to the Assessor. The Local Board of Appeal and Equalization considers the appeal and makes one of the following motions: • Refer the appeal to the Assessor's office for an interior review of the property and the Assessor's recommendation at the Local Board reconvene meeting on April 18, 2011. • Make no change and sustain the 2011 estimated market value or classification. If the owner(s) is not satisfied with the outcome of the Local Board of Appeal and Equalization they may appeal to the County Board of Appeal and Equalization. 'X City of Brooklyn Center A Millennium Community TO: 2011 Brooklyn Center Local Board of Appeal and Equalization RE: Mr. Michael Seery ' SP Brooklyn Center, LLC 61566 th Ave N. Brooklyn Center, MN 55430 Mr. Seery contacted the Assessor's office on March 28, 2011 regarding the 2011 estimated ' market value of $1,480,000 for taxes payable in 2012. Mr. Seery indicated that an appraisal had been completed on the property in August of 2010. Mr. Seery was provided with some market data regarding small neighborhood retail shopping properties. Mr. Seery was given the options of the appeal process and indicated that he would request to have a written appeal read by the board, as he is located out of state. Mr. Seery returned a completed appeal application on March 29, 2011, along with a copy of his appraisal and income and expense data as requested. It is the Assessor's request to complete a physical review of the property and to review the appraisal report and income /expense documentation provided, and report back to the Local'' Board of Appeal and Equalization at the reconvene. Respectfully, Nancy Wojcik, SAMA City Assessor I I ' 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 565 -3300 FAX (763) 569 -3434 ' FAX (763) 569 -3494 www. cityolbrooklyncenter. org ' City of BROOKLYN ' CENTER 2011 Local Board of Appeal and Equalization 1 � Michael Seery ' SP Brooklyn Center, LLC 615 66th Ave N ' 36- 119 -21 -13 -0119 Rf-GAL CHIROPRACTIC ' 2011 Assessed Value: $1,480,000 l Recommendation: Review of Provided Appraisal & Inc /Exp. i Data 1 This report is not an appraisal as defined in M.S. § 828.02 (subd.3) nor does it comply with the Uniform Standards of ' Professional Appraisal Practice. It is intended to be used as a reference only and any use other than its intended use is prohibited and unlawful The author does not represent this to bean appraisal and is not responsible for any inappropriate use. It is a report of public records using a mass appraisal technique. ' City of Brooklyn Center Assessing Department ' 2011 Local Board of Appeal and Equalization Staff Report Michael Seery ' Property Owner(s): SP Brooklyn Center, LLC Property Address: 615 66th Ave N PID #: 36- 119 -21 -13 -0119 Market Value ' Assessment Year 2011 $1,480,000 Assessment Year 2010 $1,460,000 Assessment Year 2009 $1,360,000 ' Sale: March 14, 2006 - 787,838 (01 - Warranty Deed) Comments: Mr. Seery contacted the Assessor's office on March 28, 2011 regarding the 2011 estimated market value of $1,480,000 for taxes payable in 2012. Mr. Seery indicated that an appraisal had ' been completed on the property in August of 2010. Mr. Seery was provided with some market data regarding small neighborhood retail shopping properties. Mr. Seery was given the options of the appeal process and indicated that he would request to have a written appeal read by the board, ' as he is located out of state. Mr. Seery returned a completed appeal application on March 29, 2011, along with a copy of his ' appraisal and income and expense data as requested. Further review of sales, the appraisal and income and expense documents is required to review the 2011 estimated market value. ' Assessor Recommendation: Rcview of Provided Appraisal (N-- Inc /1"Ap. 1)ata ' Appraiser: Last Inspection Date: Nancy Wc,jcil: October 4, 2010 ' 2011 Board of Appeal and Equalization 2 Michael Seery ' Subject Data Summary PiD #: 36- 119 -21 -13 -0119 ' Buildings on File: 1 Property Name: Retail - 7 Tenant Property Address: 615 66th Ave N Brooklyn Center, MN 55430 Multiple Address: No Lot /Block: 002/001 Addition: Regal Road Development 2nd Addition Legal(120): Owner(s): SP Brooklyn Center, L Property Classification: Commercial 2011 EMV: 1,480,000 ' 2010 EMV: 1,460,000 2009 EMV: 1,360,000 EMV /GBA: 147.85 Lot Size: 55,917 Sq.Ft. / 1.28 Acres ' Zoning: PUD /C2 Gross Office Area Percent: Building Use: 353 - Retail Store /100% #Stories: 1 Avg Story Height: 16 Avg Clear Height: 14 Actual Year Built: 2006 ' Effective Year Built: 2006 Renovated Year: First Floor Area: 10,010 Gross Building Area: 10,010 ' Basement: No Parking: Parking- Surface 2011 Board of Appeal and Equalization 3 Michael Seery 1 Additional Subject Photos I r y Iqf CMRGPRACIIC Awd I� o 10 -4 -2010 Mall 100 occupancy Rolm— ka 1 1 ' Building Rear 12/11/2006 2111 Board of Appeal and Equalization 4 Michael Seery ' Subject Sketch ft* P~ t s• ftoo A Spne ! Spue C *pme o SpW i : saps* f US i Conversion 2011 Board of Appeal and Equalization 5 Michael Seery CITY OF BROOKLYN CENTER 2 2Oj1 ' LOCAL BOARD OF APPEAL AND EQUALIZATION 2011 Assessment APPLICATION FOR APPEAL February 21, 2011 through March 18, 2011 You must return this application by March 18 2011 to be placed on the Agenda for the Local Board of Appeal and Equalization held April 4, 2011 at 7:00 P.M. Name(s) M i C t- A EL S 5" EP Daytime Contact Number ( Z 46) 3- o - Property Address � t S t, Aye. ' Property Identification Number S ( -- 11 'q { 3 p ll? _ Assessor's 2011 Estimated Market Value 1 , N &0 0 0 Is your property residential commercial «:ia! or multi- family? If you are appeafrng a commerdal, mu&family ar residentla/ rental ' expense data for calendar year 2010 with your ap9p ion, p ro p ert y you mast Include income and What is the reason you are appealing your 2011 assessment? 145s lr�rr { 5 l t 1 When did ou purchase y p chase your. home? Date of Purchase Purchase Price I Did you purchase your property from a bank as a foreclosure or short sale? �{ o Has your property physically changed since the purchase? (maintenance, upgrades, remodeling or structural damage) Please list a brief description below with an estimated cost. ' Have you had a recent appraisal for refinancing, a purchase agreement or a market r1C t analysrs by a real estate agent completed within the last year? es or No ' If so, what was the determination of value? h q0C1, 0d o ' What do you think the market value of your property should be? Please provide any documentation supporting pp rg your claim of overvaluation or erroneous ' classification with this application. APPRAISAL OF REAL PROPERTY Brooklyn Center Strip Retail Center Retail Property 615 66th Avenue North Brooklyn Center, Hennepin County, Minnesota 55430 -1667 Client Reference Number: 524703 PREPARED FOR: Mr. Todd Wise Valuation Coordinator PNC Bank 1900 East Ninth Street, 22nd Floor B7 -YB 13 -22 -4 Cleveland, OH 44114 EFFECTIVE DATE OF THE APPRAISAL: August 20, 2010 REPORT FORMAT: Summary INTEGRA REALTY RESOURCES - MINNEAPOLIS /ST. PAUL File Number: 124 - 2010 -0293 K ,r . ti k A N GFA TJL-d e: Realty Reso, r _ LOCAL EXPERTISE.. NAT70.. zz �5 a 7 � 1 1 i 1 1 1 x 1 1 _! 1 1 Brooklyn Center Strip Retail Center 615 66th Avenue North ' Brooklyn Center, Minnesota 1 NI TEGRAReal"ty Resources local Expertise ... Nationally ' August 31, 2010 ' Mr. Todd Wise Valuation Coordinator PNC Bank ' 1900 East Ninth Street, 22nd Floor B7 -YB 13 -22 -4 Cleveland, OH 44114 ' SUBJECT: Market Value Appraisal Brooklyn Center Strip Retail Center ' 615 66th Avenue North Brooklyn Center, Hennepin County, Minnesota 55430 -1667 Client Reference Number: 524703 ' Integra Minneapolis /St. Paul File No. 124- 2010 -0293 Dear Mr. Wise: ' Integra Realty Resources - Minneapolis /St. Paul is pleased to submit the accompanying appraisal of the referenced property. The purpose of the appraisal is to develop an opinion of ' the market value as is of the leased fee interest in the property. The client for the assignment is PNC Bank and the intended use is for loan underwriting purposes. The appraisal is intended to conform with the Uniform Standards of Professional Appraisal Practice (USPAP), the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, and the appraisal guidelines of PNC Bank. The appraisal is also prepared in accordance with the appraisal regulations issued in connection with the ' Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). To report the assignments results, we use the summary report option of Standards Rule 2 -2 of ' USPAP. Accordingly, this report contains summary discussions of the data, reasoning, and analyses that are used in the appraisal process whereas supporting documentation is retained in our file. The depth of discussion contained in this report is specific to the needs of the ' client and the intended use of the appraisal. The subject is an existing retail property containing 10,000 square feet of gross leasable area. ' The improvements were constructed in 2006, and are 100% leased as of the effective appraisal date. The site area is 1.22 acres, or 53,120 square feet. ' I RR. 8012 Old Cedar Ave. S. • Minneapolis, MN 55425 • Phone: 612 -339 -7700 • Fax: 612- 339 -7937 Mr. Todd Wise PNC Bank ' August 31, 2010 Page 2 Based on the valuation analysis in the accompanying report, and subject to the definitions, assumptions, and limiting conditions expressed in the report, our opinion of value is as ' follows: VALUE CONCLUSION ' Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value As Is Leased Fee August 20, 2010 $1,400,000 The opinions of value expressed in this report are based on estimates and forecasts that are prospective in nature and subject to considerable risk and uncertainty. Events may occur that could cause the performance of the property to differ materially from our estimates, such as ' changes in the economy, interest rates, capitalization rates, financial strength of tenants, and behavior of investors, lenders, and consumers. Additionally, our opinions and forecasts are based partly on data obtained from interviews and third party sources, which are not always ' completely reliable. Although we are of the opinion that our findings are reasonable based on available evidence, we are not responsible for the effects of future occurrences that cannot be reasonably foreseen at this time. ' It is noted that current financial and real estate markets are in a state of instability and there are limited transactions that provide reliable evidence of current market value. There is not a consensus of market participants concerning the duration and ultimate severity of the current ' economic downturn. We have analyzed available data and have applied adjustments that we consider reasonable in light of current uncertainties; however, we caution the users of this appraisal that the value conclusion reported herein may have a lesser degree of reliability ' than it would in a more normal market. Mr. Todd Wise ' PNC Bank August 31, 2010 Page 3 If you have any questions or comments, please contact the undersigned. Thank you for the ' opportunity to be of service. Respectfully submitted, ' INTEGRA ALTY RESOUR ES -MINNEAPOLIS /ST. PAUL r Mitchell Simonson Michael F. Amundson, MAI, CCIM, MRICS ' Analyst Principal Certified General Real Property Appraiser Certified General Real Property Appraiser Minnesota Certificate # 20573344 Minnesota Certificate # 4000884 ' Telephone: (952) 905 -2414 Telephone: (952) 905 -2401 Email: msimonson @irr.com Email: mamundson @irr.com BROOKLYN CENTER STRIP RETAIL CENTER TABLE OF CONTENTS ' TABLE OF CONTENTS PAGE NO. SUMMARY OF SALIENT FACTS AND CONCLUSIONS ............................... ..............................1 ' GENERALINFORMATION ....................................................................... ............................... 2 Identification of Subject ................................................................ ..............................2 Current Ownership and Sales History .......................................... ............................... 2 ' Type of Value, Property Rights and Effective Date .................... ............................... 2 Definitionof Market Value .......................................................... ............................... 2 Definition of Property Rights Appraised ..................................... ............................... 3 ' Client, Intended User and Intended Use ...................................... ............................... 3 ApplicableRequirements ............................................................. ............................... 3 Scopeof Work ............................................ ............................... ............................... 3 , ECONOMICANALYSIS ............................................................................ ............................... 5 RegionalAnalysis Summary ........................................................ ............................... 5 CommunityDescription ............................................................... .............................12 ' SurroundingArea Analysis .......................................................... .............................17 Twin Cities Retail Market Analysis ........................................... ............................... 20 PROPERTYANALYSIS ........................................................................... ............................... 30 , Land Description and Analysis .................................................. ............................... 30 Improvements Description and Analysis ................................... ............................... 31 Real Estate Tax Analysis ........................................................... ............................... 33 Highest and Best Use Analysis.. ................................................ ............................... 34 VALUATIONANALYSIS ......................................................................... ............................... 35 ' ValuationMethodology ............................................................. ............................... 35 LandValuation ............................................................................. .............................36 CostApproach ........................................................................... ............................... 42 Sales Comparison Approach ...................................................... ............................... 44 Income Capitalization Approach .............................................. ............................... 52 Reconciliation and Conclusion of Value ................................... ............................... 68 ' CERTIFICATION.................................................................................... ............................... 69 ASSUMPTIONS AND LIMITING CONDITIONS ........................................ ............................... 71 ADDENDA ' Appraiser Qualifications ................................. ............................... .......................Addendum A Subject Photographs .............................................................. ............................... Addendum B , Property Information ..................................... ............................... Addendum C ........................ ComparableData ............................................ ............................... .......................Addendum D DCFReports .......................................................................... ............................... Addendum E ' Letter of Authorization .......................................................... ............................... Addendum F IPR FILE NUMBER 124 - 2010 -0293 © 2010 BY INTEGRA REALTY RESOURCES Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER SUMMARY OF SALIENT FACTS AND CONCLUSIONS ' SUMMARY OF SALIENT FACTS AND CONCLUSIONS Property Name Brooklyn Center Strip Retail Center Address . 615 66th Avenue North Brooklyn Center, Minnesota 55430 -1667 ' Property Type Retail - Convenience Retail Strip Center Owner of Record SP Brooklyn Center LLC Tax ID 36- 119 -21 -13 -0119 Land Area 1.22 acres; 53,120 SF ' Gross Building Area 10,010 SF Gross Leasable Area 10,000 SF Percent Leased 100% ' Year Built 2006 Zoning Designation PUD /C2 Highest and Best Use As if Vacant Retail use As Improved Continued retail use ' Exposure Time; Marketing Period 9 to 12 months; 9 to 12 months Effective Date of the Appraisal August 20, 2010 Property Interest Appraised Leased Fee ' Market Value Indications Cost Approach $1,430,000 Sales Comparison Approach $1,450,000 ' Income Capitalization Approach $1,400,000 Market Value Conclusion $1,400,000 FILE NUMBER 124 - 2010 -0293 PAGE 1 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER GENERAL INFORMATION ' GENERAL INFORMATION ' IDENTIFICATION OF SUBJECT The subject is an existing retail property containing 10,000 square feet of gross leasable ' area. The improvements were constructed in 2006, and are 100% leased as of the effective appraisal date. The site area is 1.22 acres, or 53,120 square feet. A legal description of the property is in the addenda. ' PROPERTY IDENTIFICATION ' Property Name Brooklyn Center Strip Retail Center Address 615 66th Avenue North Brooklyn Center, Minnesota 55430 -1667 ' Tax ID 36- 119 -21 -13 -0119 Legal Description Lot 2, Block 1, Regal Road Development 2nd Addit CURRENT OWNERSHIP AND SALES HISTORY ' The owner of record is SP Brooklyn Center LLC. This party acquired the property as vacant land from Crown Brawley LLC on March 14, 2006 for a price of $787,838, or , $14.83 per square foot. In 2006, the existing 10,010 square foot strip retail center was constructed and is 100% occupied as of the effective date of appraisal. To the best of our knowledge, no other sale or transfer of ownership has occurred within ' the past three years, and as of the effective date of this appraisal, the property is not subject to an agreement of sale or option to buy, nor is it listed for sale. ' TYPE OF VALUE, PROPERTY RIGHTS AND EFFECTIVE DATE The purpose of the appraisal is to develop an opinion of the market value as is of the ' leased fee interest in the . r i property as of the effective date of the appraisal, August 20, 2010. DEFINITION OF MARKET VALUE Market value is defined as: ' "The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and ' knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: • Buyer and seller are typically motivated; • Both parties are well informed or well advised, and acting in what they consider , their best interests; • A reasonable time is allowed for exposure in the open market; N FILE NUMBER 124- 2010 -0293 PAGE 2 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER GENERAL INFORMATION • Payment is made in terms of cash in United States dollars or in terms of financial 1 arrangements comparable thereto; and • 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." (Source: 12 C.F.R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994) DEFINITION OF PROPERTY RIGHTS APPRAISED ' Leased fee interest is defined as: "An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease." (Source: ' The Dictionary of Real Estate Appraisal, Fourth Edition, 2002) CLIENT, INTENDED USER AND INTENDED USE ' The client and intended user is PNC Bank. The intended use is for loan underwriting purposes. The appraisal is not intended for any other use or user. ' APPLICABLE REQUIREMENTS This appraisal is intended to conform to the requirements of the following: ■ Uniform Standards of Professional Appraisal Practice (USPAP); ■ Code of Professional Ethics and Standards of Professional Appraisal Practice of the ' Appraisal Institute; ■ Appraisal requirements of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), revised June 7, 1994; ■ Appraisal guidelines of PNC Bank. SCOPE OF WORK ' To determine the appropriate scope of work for the assignment, we considered the intended use of the appraisal, the needs of the user, the complexity of the property, and ' other pertinent factors. Our concluded scope of work is described below. VALUATION METHODOLOGY Appraisers usually consider the use of three approaches to value when developing a market value opinion for real property. These are the cost approach, sales comparison approach, and income capitalization approach. Use of the approaches in this ' assignment is summarized as follows: APPROACHES TO VALUE Approach Applicability to Subject Use in Assignment Cost Approach Applicable Utilized Sales Comparison Approach Applicable Utilized Income Capitalization Approach Applicable Utilized �R FILE NUMBER 124 - 2010 -0293 PAGE 3 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER GENERAL INFORMATION The income capitalization approach is the most reliable valuation method for the subject due to the following: ' • The probable buyer of the subject would base a purchase price decision primarily on the income generating potential of the property and an anticipated ' rate of return. • Sufficient market data regarding income, expenses, and rates of return, is available for analysis. ' The sales comparison approach is an applicable valuation method because: • There is an active market for similar properties, and sufficient sales data is , available for analysis. • This approach directly considers the prices of alternative properties having similar utility. The cost approach is applicable to the assignment considering the following: ■ The subject represents nearly new construction, which reduces the subjectivity of estimating accrued depreciation. ■ There is an active land market, making estimates of underlying land value reasonably reliable. DATA RESEARCH AND ANALYSIS The process employed to collect, verify, and analyze relevant data is detailed in individual sections of the report. This includes the steps we took to verify comparable sales, which are disclosed in the comparable sale profile sheets in the addenda to the ' report. Although we make a concerted effort to confirm the arms - length nature of each sale with a party to the transaction, it is sometimes necessary to rely on secondary verification from sources deemed reliable. ' PROPERTY INSPECTION Mitchell Simonson conducted an interior and exterior inspection of the property on ' August 20, 2010. Michael F. Amundson, MAI, CCIM, MRICS conducted an inspection on August 23, 2010. REPORT FORMAT , The report has been prepared under the summary report option of Standards Rule 2- 2(b) of USPAP. As such, .it contains summary discussions of the data, reasoning, and , analyses that are used in the appraisal process whereas supporting documentation is retained in our file. The depth of discussion contained in this report is specific to the needs of the client and the intended use of the appraisal. ' �R FILE NUMBER 124- 2010 -0293 PAGE 4 Integra Realty Resources , BROOKLYN CENTER STRIP RETAIL CENTER REGIONAL ANALYSIS SUMMARY ECONOMIC ANALYSIS REGIONAL ANALYSIS SUMMARY The subject property is located in a Developed Community in the Minneapolis /St. Paul metropolitan area. A brief description summarizing the important characteristics of this type of geographic planning area follows. DEVELOPMENT PATTERN Minneapolis and St. Paul began their existence on the banks of the Mississippi River in the late 1840's and within 20 years became important lumber cutting, milling and manufacturing centers. Similar to other older Midwestern and Eastern cities that evolved before automobiles were in common use, the Minneapolis /St. Paul area grew into an urbanized region. A regional planning agency called the Metropolitan Council was created in 1967 to help facilitate smart growth for the seven - county metropolitan area. The Metropolitan Council discusses the following geographic planning areas in their 2030 Regional Development Framework. ■ Central Cities: Minneapolis and St. Paul ■ "Developed Communities are cities where more than 85% of the land is developed, infrastructure is well established and efforts must go toward keeping it in good repair. These communities have the greatest opportunities to adapt or replace obsolete buildings, improve community amenities, and remodel or replace infrastructure to increase their economic competitiveness and enhance their quality of life." ■ "Developing Communities are cities where the most substantial amount of new growth — about 60 percent of new households and 40 percent of new jobs will occur. The amount of infill and redevelopment and the way in which new areas are developed directly influence when and how much additional land in Developing Communities will need urban services — services that will call for substantial new regional and local investments." ■ Rural Areas are cities and townships that are predominantly rural in character. ■ "Rural Centers are small towns located throughout the Rural Areas. Rural Centers include residential neighborhoods surrounding a center that provides basic consumer services and community activities." The map on the following page shows the above geographic planning areas in the seven -county metropolitan area. FILE NUMBER 124- 2010 -0293 PAGE 5 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER REGIONAL ANALYSIS SUMMARY Twin Cities Metropolitan Area Regional Framework 2030 Planning Areas' Central Cities Developed Area «aY T-P r Developing Area�T i 771 Rural Centers Rural Area r i 1 GdunD�n + Outside Council jurisdiction ""az°`� =r I n�ntYw ! w n,taxt t suWo � I Aswan rr:4°'x` I i C+oPn :°°n WPa gym, r tw tWys fqy T,�p. _. J/ CaYOa klaye Groe eaot¢ Y>i S tlrI Fk<tlr' ,-•. �, snP..ybr Toy, t naexrdtnca 't pYmwR+ I . RepGmt e Sr. t+'.ie C, n + �"^' j zP6nn � I RUSaWh St P.A --,. MI3- TRbpsecdt Wre£ ro +atAa >nl°.m — j coax F' i 1 } � Y w LA i T ttiaPt. Sc. T P"A _...._ k t+dry..00Yw YnTeewan Twp. 4snnecriie. W tb . i W. ft R g,. in tWaf°ary&. PWm °'.. —.^.. £Yet qq C.wNan Twp: EYtnPtYfY -•�. �•^• Lakebwn TnP, � ..tee $(•., , Egan trG +Ave XtTn Cant OrmY Via+ N<Twp qC WW I nTiTP DM4wn � BWnFMbt - � ✓ rt r� tt Iwry Up t ) Strdge i AP*Vdey W& takt rm T Aewnawd �Wn°YrrT °p ` .. I I I I H � LasfiYe T'aR I ( f f �+W6R T^'i $9n FeprgpW Tvrp. .III . [ WppyRgh Tc`P. Y'La f 311" mN R.vw T'D. takn&t E.P. T�'P. y � Y¢ m Atanlu°T -1, Sre�+naTl Lake T � , 4 I � >�eit OW-W, Trp Sb% 7M. Np: aTnp, CMr LNa T'^F I �+itRt Txa. C.01 Radc'rk-r 4-0 Tp. i0.$— T„P. ' 0 5 10 20 Miles L i r 1 r I I t a*TS �Wa T ..,> V& AarY T I "Generalized to whole municipalities. Metropolitan Council �R FILE NUMBER 124 - 2010 -0293 PAGE 6 Integra Realty Resources ' BROOKLYN CENTER STRIP RETAIL CENTER REGIONAL ANALYSIS SUMMARY ' Throughout most of their history, Minneapolis and St. Paul have been even rivals. But in the last 30 years, Minneapolis has surpassed St. Paul as a commercial center for three main reasons: ' 1. Minneapolis has been highly successful with downtown urban renewal projects. 2. More and larger affluent residential areas (where high ranking business executives live) are concentrated closer to Minneapolis than St. Paul 3. The interstate highway system on the Minneapolis side of the Mississippi River ' was completed before the St. Paul side was finished. As a result of these circumstances, new development and population growth is skewed more toward the developing ring suburbs west of Minneapolis and to those southern suburbs with good freeway access to Minneapolis. However, the east metro area also continues to grow in both population and employment. DEMOGRAPHICS Unlike many other northern and eastern cities in the region commonly referred to as either the "Rust" or "Snow" Belt, the Minneapolis /St. Paul area has shown healthy gains in population, employment, households and income. Important statistics are summarized as follows: DEMOGRAPHIC TRENDS MINNEAPOLIS /ST. PAUL METRO AREA ' % Annual Change 1980 1990 2000 2010 2015 2010- 2015 ' Population 2,113,533' 2,538,834 2,968,806 3,328,053 3,449,566 0.72% Households 762,376' 960,170 1,136,615 1,289,983 1,341,183 0.78% ' Employment 1,019,009 1,260,314 1,619,473 1,670,747 1,773,616 1.20% Median Household Effective $22,788 $33,773 $50,028 $54,816 N/A N/A Buying Income ' Source: US Census (10- county metro area) 2 Source: US Census (13- county metro area) 3 Source: MN Dept. of Employment and Economic Development (7 -county metro area) 4 Source: ESRI forecasts (13 -county metro area) s Source: Sales and Marketing Management (1980 & 1990 reflect 1I -county metro area; 2000 reflects 13 -county metro area) FILE NUMBER 124- 2010 -0293 PAGE 7 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER REGIONAL ANALYSIS SUMMARY ' TRANSPORTATION SYSTEMS Transportations systems in the Twin Cities area are well- developed, but include less mass transit than most metropolitan. areas of similar population. The roadway systems include numerous Interstate freeways, including the east -west Interstate 94 and the north -south Interstate 35. Interstate 94 "divides" and forms a ring freeway system around the Twin Cities, with I -494 comprising the southern and western portion, and I- 694 forming the northern portion. Interstate 94 also extends through downtown Minneapolis and St. Paul. Interstate 35 also divides into 1-35W through downtown Minneapolis and I -35E through downtown St. Paul. The only other Interstate Highway in the area is the twelve -mile long 1 -394, which extends from downtown Minneapolis to the western suburb of Wayzata. All of these freeways are depicted in green on the map which follows this section of the report. Numerous other freeways service the metro area, including U.S. highways and State of Minnesota highways, and are depicted in red on the map. Overall, transportation for trucks and automobiles is considered excellent in the Twin Cities area. The Twin Cities area has long een served b an extensive buss stem that reaches all g Y Y developed areas in the seven - county metropolitan core. In 2004, the first light rail line opened, linking downtown Minneapolis with the International Airport and the Mall of America. In November 2009, the Northstar commuter rail system began its long - planned operations with a route between Big Lake in Sherburne County (northwest of the Twin Cities) and downtown Minneapolis: Construction is planned to commence in , 2010 for the Central Corridor line running from downtown St. Paul to downtown Minneapolis via University Avenue and through the University of Minnesota. Commercial transportation systems include the Minneapolis /St. Paul International , Airport, which is served by most major domestic airlines, and also Amtrak, with a station in St. Paul. Overall transportation system development is considered very good by residents of the Twin Cities area. i ECONOMIC BASE Minneapolis /St. Paul has a relatively diverse economic base that allows the metro area , to consistently remain under the national average unemployment rate. The diverse and strong local economy has also permitted the State and metro area governments to adopt a limited role in economic development. As of May 2010, the metro area seasonally- unadjusted unemployment rate was 6.4 %, compared to the Minnesota average of 6.4% and the national average of 9.3 %. Minneapolis /St. Paul retains a sizeable manufacturing base that employs about one out of every 9.7 workers in the 7- county metro area. However, the highest concentration of employment is contained - within the service industries. The percentage breakdown for employment by industry type is as follows: FILE NUMBER 124 - 2010 -0293 PAGE 8 Integra Realty Resources ' BROOKLYN CENTER STRIP RETAIL CENTER REGIONAL ANALYSIS SUMMARY ' EMPLOYMENT BY INDUSTRY CLASSIFICATION Minneapolis /St. Paul Metro Area Total in Employment Industry Classification (000) % of Total Mining, Logging, and Construction 49.4 2.9% Manufacturing 176.4 10.3% Trade, Transportation, and Utilities 303.1 17.8% Information 39.1 2.3% ' Financial Activities 131.9 7.7% Professional and Business Services 251.8 14.8% Educational and Health Services 268.1 15.7% Leisure and Hospitality 162.5 9.5% Other Services 74.4 4.4% Government 247.9 14.5% Total* 1,704.6 100.0% Source: MN Department of Employment and Economic Development, "Minnesota Employment Review" ' June Issue (May 2010 data) * Total may not equal the sum of the components due to rounding Minneapolis /St. Paul's prosperity is due in part to its status as a regional commercial 1 center serving Minnesota, North and South Dakota, western Wisconsin, northern Iowa and eastern Montana. As the largest metropolitan area in the Midwest west of Chicago and north of St. Louis, the Twin Cities region is an important distribution hub for the ' upper Midwest as well as a governmental and cultural center. A listing of the largest employers in the Twin Cities area is included on the following page. FILE NUMBER 124- 2010 -0293 PAGE 9 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER REGIONAL ANALYSIS SUMMARY MAJOR EMPLOYERS # Employer Headquarter City # of Employees* ' 1 State of Minnesota Saint Paul, MN 53,729 2 United States Federal Government Saint Paul, MN 33,000 , 3 Target Corporation Minneapolis, MN 29,000 4 Allina Health System Minneapolis, MN 23,818 5 Fairview Health Services Minneapolis, MN 21,507 6 Wells Fargo Minnesota Minneapolis, MN 20,613 7 Wal -Mart Stores, Inc. Benton, AR 20,230 8 University of Minnesota Minneapolis, MN 19,718 9 3M Co. Maplewood, MN 15,000 10 HealthPartners Bloomington, MN 10,322 11 U.S. Bancorp Minneapolis, MN 10,184 12 Delta Air Lines Inc. Eagan, MN /Atlanta 10,000 13 UnitedHealth Group Minnetonka, MN 9,967 14 SuperValu, Inc. Eden Prairie, MN 9,867 , 15 Park Nicollet Health Services St. Louis Park, MN 8,449 16 Hennepin County Minneapolis, MN 8,372 17 Medtronic, Inc. Fridley MN 7,992 ' 18 Best Buy Co. Inc'. Richfield, MN 7,601 19 HealthEast Care System Saint Paul, MN 7,300 20 Thomson Reuters Legal Eagan, MN 6,600 21 Sears Holding Corp. Hoffman Estates, IL 6,000 22 Cargill, Inc. Minnetonka, MN 5,740 23 Boston Scientific Natick, MA 5,624 24 Xcel Energy, Inc. Minneapolis, MN 5,454 25 General Mills, Inc. Golden Valley, MN 5,400 ' * # of employees is the total number employed by the company in the State of Minnesota. Source: Minneapolis /St. Paul Business Journal; 2010 Book of Lists CONCLUSION The Minneapolis /St. Paul region is an affluent urban area of over 3.3 million people in ' the thirteen - county area that is consistently rated by demographers and business analysts as one of the most desirable metropolitan areas in which to live or work. As the largest urban area in the upper... Midwest, the. Twin- Cities should always remain a. major commercial, governmental and cultural center — thus allowing the region to remain prosperous and in a strong position to cope with the societal problems that affect almost every major urban area in the country. , FILE NUMBER 124- 2010 -0293 PAGE 10 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER REGIONAL ANALYSIS SUMMARY ' GENERAL LOCATION MAP j ST. PMNCIS '- -- - EL uNWDOo I ' e � r# Brows OAK GROVE ' I RAMBEY COLUMBUS - - -- - t NAM ANDOYBR LAKE NEW FOREer SCANDIA U 5 LAKE PAS �: ^.. OAYfON COO .._.. .. -. >�� g� I BLAINE HUGO MAY '. EORD CBRCORAN G B - - - f f OAKS r Y . � ' . 17 LI 000 ! I �„ � :GPANf ( ATEIi �TT PL 7d e " �I IA �/ n B u L D T N NCE li N � ��, OAK BY 00 i I �a 111111110 WATEy�NSWn IATW� D VXX ypME 6T. - I %BEACH HASSEN Flel � N�T ' f CWAOEN 3 IAKEYOIMN I -� -f ./'� I EDEN N MEN t 'I' COTTAGE 3 I HE GROVE BENTDN owI.G SHAKOPEE I MY ---- - • , - • - APPLE ROSE Nf 1MN68t O I VALLEY � . P 4 .! NPNCOCK �- 3 'T^4P' LAKEVILLEm SANF I CREDIT Ell— YEFtFAIllLION � MARSNAN r R SPRING RIVER '� r 7➢ -____ �___.._____.._._._._ � r I i IBEl.E� i IYI 1 I NEL�rWER ,An f J r PWNE caw NEW }, CASTIE ROCK TON I OOUG'l`YA9G' LAM EY GREENVALE 9 BCK)TA{''.,�r' .�_ N W }}�� +9 sYS R FILE NUMBER 124- 2010 -0293 PAGE 11 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER COMMUNITY DESCRIPTION , COMMUNITY DESCRIPTION INTRODUCTION The subject property is located in Brooklyn Center, a relatively small (in terms of land area), 8.5 square mile, inner ring suburb adjacent to the north side of Minneapolis. First settled in the mid- 1850's, the area that became Brooklyn Center was populated mostly farmers growing produce to sell in nearby Minneapolis. In 1911 the truck Y Y g gp Y p farmers, fearful that continued northward expansion b a rapidly growing Minneapolis p Y p Yg g p would engulf their farms organized an election that legally created the Village of g g g Y g Brooklyn Center. LINKAGES Similar to almost all other inner ring and developing ring suburbs in the seven- county metropolitan area, Brooklyn Center has excellent transportation linkages, especially via ' interstate highways. Major roads serving the city include the following: • Interstate 94 leads the ten miles south to downtown Minneapolis and west to the western suburbs , • Interstate 694 connects Brooklyn Center to the east metro area • State Highway 100 travels through the center of the city and connects 1- 94/694 with other suburbs to the south; State Highway 100 leads directly to the 1 -494 corridor in southern Hennepin County, which is a major, suburban employment area and commercial district , • Brooklyn Boulevard is the rima commercial street in Brooklyn Center and a p rY Y major transportation route bringing commuters and shoppers to the city Several rail lines serve Brooklyn Center's industrial companies and, while the city does not have its own local airport, a small community airport is adjacent to the west side of Brooklyn Center in neighboring Crystal. POPULATION GROWTH From its beginning as a small agricultural village in 1911, Brooklyn Center's growth was relatively slow until post World War II suburbanization unleashed a residential development boom that caused the city's population to increase from 4,300 in 1950 to , 24,536 in 1960. By 1970, the population had risen to 35,173. However, as the baby boom generation finished high school and left home, Brooklyn Center, with little vacant land to accommodate new residential building has slowly decreased in , population. According to the 2000 Census, Brooklyn Center's population was 29,172. ESRI forecasted 2010 population to be 28,580 and projected the city to have 28,591 residents by 2015. Population growth in Brooklyn Center is compared to Hennepin County, the metro area, Minnesota and the entire United States in the following table. FILE NUMBER 124 - 2010 -0293 PAGE 12 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER COMMUNITY DESCRIPTION POPULATION Annual % Change Area 1980 1990 2000 2010 2015 2010 -2015 ' Brooklyn Center 31,230 28,887 29,172 28,580 28,591 0.01 % Hennepin County 941,411 1,032,431 1,116,200 1,168,999 1,195,705 0.45% 13- County Metro Area 2,198,190 2,538,834 2,968,806 3,328,053 3,449,566 0.72% ' Minnesota 4,075,970 4,375,099 4,919,479 5,334,772 5,461,840 0.47% United States 226,545,805 248,709,873 281,421,906 311,212,863 323,209,391 0.76% Source: 1980, 1990 & 2000 US Census; 2010 & 2015 forecasts by ESRI HOUSEHOLD GROWTH ' The number of households in Brooklyn Center has decreased slightly since 2000 and is forecasted to increase slightly over the next five years. Household growth in the area is depicted in the following table. ' HOUSEHOLDS Annual ' % Change Area 1980 1990 2000 2010 2015 2010 -2015 Brooklyn Center 10,751 11,226 11,430 11,413 11,461 0.08% Hennepin County 365,536 419,060 456,129 483,409 495,834 0.51% 13 -County Metro Area 788,675 960,170 1,136,615 1,289,983 1,341,183 0,78% Minnesota 1,445,222 1,647,853 1,895,127 2,092,019 2,150,988 0.56% United States 80,776,000 91,947,410 105,480,101 116,761,140 121,359,604 0.78% ' Source: 1980, 1990 & 2000 US Census; 2010 & 2015 forecasts by ESR1 INCOME ' Based on the ESRI data shown in the following table, the median household income in Brooklyn Center is projected to increase approximately 9.5% from $62,775 in 2010 to ' $68,730 in 2015. Approximately 62.5% of all households in Brooklyn Center are projected to earn more than $50,000 in 2010. ' BROOKLYN CENTER INCOME 2000 2010 2015 Median Household Income $44,587 $62,775 $68,730 ' Average Household Income $49,732 $68,351 $78,127 Per Capita Income $19,695 $27,498 $31,549 Source: 2000 US Census; 2010 & 2015 forecasts by ESRI FILE NUMBER 124- 2010 -0293 PAGE 13 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER COMMUNITY DESCRIPTION , PERCENT DISTRIBUTION OF HOUSEHOLDS BY INCOME , BROOKLYN CENTER - 2010 Income Group Percentage , Less than $15,000 5.6% $15,000 to $24,999 7,4% $25,000 to $34,999 9.1% , $35,000 to $49,999 15.4% $50,000 to $74,999 27.7% $75,000 to $99,999 17.2 %` ' $100,000 to $149,999 14.2% $150,000 to $199,999 2.2% $200,000 or more 1.2% , Source: ESRI Business Information Solutions EMPLOYMENT/ECONOMIC BASE Commercial /industrial development in Brooklyn Center is concentrated near the State Highway 100 and I- 94/694 intersection in the center of the city. Dominating this area was Brookdale Shopping Center, a 992,000 square foot regional mall that featured , Macy's, Sears, and Barnes & Noble as anchor tenants. As of April, 2010, Brookdale Shopping Center closed its doors; although, Sears is still open because they own the land where the store sits. Satellite shopping centers, free standing retail structures, and ' office buildings have developed north and northeast of Brookdale. The largest office buildings are concentrated at the southwest corner of the intersection. Industrial development in Brooklyn Center occurs primarily in the 75 -acre Shingle Creek ' Business Center, located in the northwest quadrant of the intersection of Highway 100 and Interstate 94/694. Average covered employment in Brooklyn Center was estimated at 11,391 in 2009 by ' the Minnesota Department of Employment and Economic Development. Covered employment applies only to workers whose employers contribute to the State Unemployment Insurance Fund. This covers an estimated 97% of all workers in the state. Average covered employment for Brooklyn Center and its related geographies from 2005 to 2009 is shown in the following table. ' AVERAGE COVERED EMPLOYMENT - 2005 TO 2009 % Change Projected ' Area 2005 2006 2007 2008 2009 2005 -2009 2020 Brooklyn Center 12,979 13,267 12,912 12,317 11,391 -12.2% 18,600 Hennepin County 833,732 842,852 848,932 843,011 803,143 -3.7% 1,039,300 7 -County Metro Area 1,593,972 1 -1,622;696 .1,612,664 1 -3.5% 1,990,000 11 -County Metro Area 1,677,741 1,701,653 1,709,443 1,697,719 1,619,644 -3.5% N/A Minnesota 2,637,323 2,676,793 2,688,406 2,680,298 2,568,657 -2.6% N/A Source: MM Department of Employment and Economic Development; ' Projections by the Metropolitan Council FILE NUMBER 124 - 2010 -0293 PAGE 14 Integra Realty Resources , ' BROOKLYN CENTER STRIP RETAIL CENTER COMMUNITY DESCRIPTION Average covered employment by major NAICS industry super- sector industry ' classifications for Brooklyn Center is depicted in the following table. ' BROOKLYN CENTER AVERAGE COVERED EMPLOYMENT BY INDUSTRY — 2005 to 2009 NAICS % Change ' Code Industry 2005 2006 2007 2008 2009 2005 -2009 1011 Natural Resources & Mining N/A N/A N/A N/A N/A N/A 1012 Construction N/A N/A N/A N/A N/A N/A ' 1013 Manufacturing 2,136 2,404 2,376 2,083 1,961 -8.2% 1021 Trade, Transportation & Utilities 2,671 2,917 3,043 2,695 2,299 -13.9% 1022 Information 152 267 251 197 N/A N/A ' 1023 Financial Activities 914 1,176 1,125 1,094 1,008 10.3% 1024 Professional & Business Services 986 790 824 891 827 -16.1% 1025 Education and Health Services 3,179 3,069 2,761 2,864 2,622 -17.5% ' 1026 Leisure and Hospitality 1,546 1,284 1,187 1,083 1,187 -23.2% 1027 Other Services 393 346 355 467 433 10.2% 1028 Public Administration 473 480 471 469 475 0.4% ' Total All Industries 12,979 13,267 12,912 12,317 11,391 -12.2% Source: Minnesota Department of Employment and E conom ic Development ' RETAIL SALES From 2005 through 2008 (the latest year for which data is available) retail sales in ' Brooklyn Center grew approximately 7.6 %, or 2.49% annually. Sales growth for the city, county, metro area, and the state is compared in the following table: ' RETAIL SALES - 2005 TO 2008 Annual % Change ' Area 2005 2006 2007 2008 2005 -2008 Brooklyn Center $517,151,888 $1,021,506,686 $586,726,221 $556,712,316 2.49% Hennepin County $18,065,284,003 $18,223,448,897 $17,853,067,153 $17,412,367,117 -1.22% ' 7- County Metro Area $40,516,541,062 $41,116,297,489 $39,585,360,087 $38,928,242,400 -1.32% ' 11- County Metro Area $43,315,328,733 $44,330,698,926 $42,580,082,401 $42,017,766,981 -1.01% Minnesota $72,986,897,550 $73,860,206,805 $73,893,276,510 $73,638,873,420 0.30% Source: Minnesota Department. of Revenue SUMMARY Brooklyn Center is an older, but stable inner ring suburb of Minneapolis with excellent connections to the remainder of the metropolitan area via the interstate highway system. The city is completely developed and no vacant land remains available for new projects. Thus, Brooklyn Center has moved from a development period to a redevelopment phase. We envision Brooklyn Center remaining stable for the foreseeable future, redevelopment of old, obsolete properties occurring when market conditions dictate a change in the highest and best use. Ra FILE NUMBER 124- 2010 -0293 PAGE IS ' Integra Reahy Resources BROOKLYN CENTER STRIP RETAIL CENTER COMMUNITY DESCRIPTION , AREA MAP Bmakdaie Dr N >8 h Ave _. _Ea. A - Z Ayg �. , A Sgjarioaf 7rt ' �3 z Plaza ark ¢_ Brooklyn Park a z Srookdala Dr T fi 0 to KLYN PARK CITY �' t 5 z Locklr� s A4tdc'vrrwb0d 7srn Ave� rif ;) 'Uth A N z 252 a 72nd Ave N ° 252 ; 71st Ave N Mh Ave N 6 Pvgt m� c' S6 Ave N 152 Z s MInri&bta 69ihAveN < 60th Ave to e rn Thur Shar>i!� Creek Pkwy m x herRd z ��[ 'Nay pa , 67 (hA veN - �_ `66th Ave N th Ave o� 5uf� Ave N 65th Ave N I� 95th Are N F s a o 1 r ttt Ave N dt Ave N. m 6 3rd -x < BROOKLYN CENTEf(CITY z CetPark F'arfds 62nttAv® FRIDf_EY C Y z ' a , 61st Ave N m z� FfidI@ 101 B 4 c = a „ n. x y �' '' I3nve•va , h Ave N Bass Lake Rd z nokd2le 5 pnin4 Cent r Z 58th Ave 56th A ve ._^ a 57th Ava N - 'itarc�.ost U9, �wat <' c <C. 56th Ave . 71h Ave 57th Ave K 7 h Ave N oy Urorse, �. as tal Sho ent tak Rd TWrn lakes r * p 54th Ave N 88Bvue Pa -_o $� 53rd Pi N c Dt y 3tg/ 54th AvaN CR I "t O _ -� �... 52nd Ate 0 ' � ° 52nd Ave N s *1.�3 p 1st Xve N 4 51stAve N Y 31st Ave N u �c 101: ` >z SQtn Ave N £: . n ' _ 48ftt Ave 491h Ave N ' 1 Ave < A714 Ave N LIS_CITY ' 46th Ave N Z k , . yam rxi F - Vi +n'Y Memo Membnat Pkvy a "'"•±d =';,4. m. o a Q k, > �VNSDALECITY �, D 43rd Ave N b lZbinsda /@ z xaO w A Ave N �'. o Ave N c ~ R ter m: i 266 ESRI, Tt a At#as ,..0 � �`#,.ake 2 41st �ve N Z 2 � - � A FILE NUMBER 124 - 2010-0293 PAGE 16 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER SURROUNDING AREA ANALYSIS SURROUNDING AREA ANALYSIS ' LOCATION The subject is located in the northeast area of the City of Brooklyn Center on 66 Avenue North and west of Highway 252. Neighborhood boundaries are generally as follows: ' North: City of Brooklyn Center/Brooklyn Park border South: Interstate 694 East: Mississippi River ' West: Shingle Creek Parkway/Palmer Lake Park ACCESS AND LINKAGES Primary highway access to the area is via Highway 252, Interstate 694 and Interstate 94. Access to the subject is via 66 Avenue North, a stoplight controlled intersection with Highway 252. Public transportation is provided by Metro Transit and provides access to the metropolitan area. Overall, the primary mode of transportation in the area is the automobile. ' DEMOGRAPHIC FACTORS Demographic and Income Profile ' Prepared by STDBonline 615 66th Ave N, Brooklyn Center, MN 55430 - 1667 att Ring: 3 miles radius Population 97,362 96,324 95,974 Households 38,085 38,565 38,615 Families 24,770 23,781 23,427 ' Average Household Size 2.53 2.47 2.46 Owner Occupied Housing 28,158 27,646 27,525 Renter Occupied Housing 9 927 10,920 11,090 P 9 , Median Age 35.5 37.4 37.8 Trends : 201Q 2015 Annual Area ,Stae National. Population 0.07% 0.47% 0.76% Households 0.03% 0.56% 0.78% Families - 0.30% 0.37% 0.64% Owner HI-Is - 0.09% 0.58% 0.82% Median Household Income 2.38% 2 68% 2 36% 2000 F 2010 2015` Households,by Income Numbe Percent Number ; Pefcent Dumber Percent , <$15,000 3,696 ' 9.7% 2,206 5.7% 1,821 4.7% $15,000 - $24,999 4,412 11.6% 2,855 7.4% 2,026 5.2% $25,000 - $34,999 5,320 14.0% 3,070 8.0% 2,366 6.1% $35,000 - $49,999 7,202 18.9% 5,806 15.1% 4,144 10.7% $50,000 - $74,999 9,465 24.9% 9,827 25.5 % 9,946 25.8% ' $75,000 - $99,999 4,706 12.4% 6,515 16.9% 6,367 16.5 % $100,000 - $149,999 2,589 6.8% 6,336 16.4% 8,939 23.1% $150,000 - $199,999 458 1.2% 1,324 3.4% 2,083 5.4% $200,000+ 231 0.6% 627 1.6% 923 2.4 % ' Median Household Income $46,17 $63,999 $71,975 Average Household $52,84 $71,949 $82,411 Per Capita Income $20,90 $28,990 $33,373 Data Note: Income is expressed in current dollars Source: U.S. Bureau of the Census, 2000 Census of Population and Housing. ESRI forecasts for 2010 and 2015. FILE NUMBER 124- 2010 -0293 PAGE 17 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER SURROUNDING AREA ANALYSIS , As shown above, the current population within a three mile radius of the subject is 96,324. Population in the area has declined slightly over the past 10 years and this , trend is expected to continue in the foreseeable future. This contrasts with the Twin Cities metro area overall which is projected to grow at a steady pace. Although population is projected to decline slightly, the area is fully developed and considered ' stable. Income levels in the area are less than income levels in the Twin Cities metro area as a ' whole. LAND USE The area is suburban in character and approximately 100% developed, with redevelopment occurring on a regular basis. Land uses immediately surrounding the subject are predominantly commercial and ' residential with typical ages of building improvements ranging from new to 60 years. Property types adjoining the subject include retail uses to the northeast, east, and south and multi - family residential uses to the west and north. ' NEARBY RETAIL USES The following nearby retail property has significant drawing power that benefits the ' subject and other retail properties in the area: Regal Brooklyn Center Stadium 20 (movie theater) immediately to the south. Convenience gas stations are located east of the subject on the southwest and northwest corners of Highway 252 and 66 Avenue ' Nbrth. OUTLOOK AND CONCLUSIONS ' The area is in the stability and redevelopment stage of its life cycle. Recent development activity has been moderate and requiring site clearance. We anticipate that property values will remain stable or decline in the current economic climate. ' FILE NUMBER 124- 2010 -0293 PAGE 18 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER SURROUNDING AREA ANALYSIS ' SURROUNDING AREA MAP . ft- ,vx,�a9' ( I 5 q nm�. -. Y - L A � 5 I Q 0 a e ►� 11 Palmer Lake rk � { ook - �L I t — r f ( @ - 4� ��a� n 'Park, }� f* Palmer Lake '. i oC d Fndle i J - A park (252 i.- f I I (DI X �M�C�57 East, Palmer r Lake -- - - � aline Park` c° d ( E kE 1!r- gob -- �4 s a i 1 I Z" —39t Q I r; + s � -� z f' F �, tie- 1 f�� n� � 9 r _ I a I ,e« 1 - �n Li y F 1 Brook" ' Garden City Par ) f' UI q�,� irk LjLj i J_ ' ! I' I 1 I� I Ot - gf 14 �8 Fg1 � �f 1 �1 " t i the ri i ' Co, ht @and P 19,88- 2009,6Aicrosoft Cor r orationjand or -itssu liers:All - -ri hts_reserved I FILE NUMBER 124- 2010 -0293 PAGE 19 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER TWIN CITIES RETAIL MARKET ANALYSIS ' TWIN CITIES RETAIL MARKET ANALYSIS The Minneapolis /St. Paul metro area retail market consists of numerous multi- tenant ' shopping center properties and free standing retail stores. In this retail sector analysis we Took at multi- tenant shopping center income - producing properties. REGIONAL DEMOGRAPHICS Demographics directly affect the retail real estate market. Growth in supply of retail ' space generally follows growth in population or effective buyin g income. Effective buying income reflects personal income minus taxes, or "disposable income ". The Minneapolis /St. Paul Metropolitan area population has been growing steadily over the ' last few years. With over 3.3 million people living in the metro area in 2009 it has been growing at a faster rate than both the state and the nation as a whole, as shown in the table below. , POPULATION GROWTH COMPARISON Source: NPA Data Services, Inc.; Compiled by Integra Realty Resources - I Mmneapolis/St Paul 1.75% *-{ � s { f > A e +�� o 1.25% 1.00% � 0.75 Tw_ b '3. O :%.` 0.50 2003 2004 2005 2006 2007 2008 2009 ' --0— Twin Cities Metro Area —0-- State of Minnesota --0— Unites States of America In 2009, median disposable income was reported at $55,914 for the 13- county metro ' area, $49,088 for Minnesota, and $43,361 for the United States according to ESRI, Inc. The following table shows historical median household Effective Buying Income (EBI) as reported by Sales and Marketing Management magazine in their Survey of Buying Power annual publications. Sales and Marketing Management magazine discontinued the Survey of Buying Power after the 2005 issue. FILE NUMBER 124 - 2010 -0293 PAGE 20 Integra Realty Resources , ' BROOKLYN CENTER STRIP RETAIL CENTER TWIN CITIES RETAIL MARKET ANALYSIS ' MEDIAN HOUSEHOLD EFFECTIVE BUYING INCOME (EBI) Source: *Sales and Marketing Management, Survey of Buying Power 2002 -2005; * *ESRI $55,000 $52,500 A, $50,000 a +. $47,500 $45,000 s $42,500 n $40,000 xa fir r 37 500* *� * * ** ** ** ` 2 8 2009 ** 2002 2003 2004 2006 2007 00 ' Ej4CMA $47,389 $47,632 $48,419 $51,554 $52,918 $56,116 $55,914 $41,662 $41,846 $42,930 $44,681 $46,541 $49,570 $49,088 $38,035 $38,201 $39,324 $40,602 $41,637 $43,373 $43,361 SALES ' The following table shows retail sales in the Twin Cities metropolitan area, the state of Minnesota and the United States from 2005 to 2008 (note: 2008 is the most recent data available at this time). ' HISTORIC RETAIL SALES (in $ Thousands) 2005 2006 2007 2008 ' 7 -County Minneapolis -St. Paul Metro* $40,516,541 $41,116,297 $39,585,360 $38,928,242 MSP Growth ( %) over Prior Year: 6.87% 1.48% - 3.72% - 1.66% State of Minnesota* $72,986,898 $73,860,207 $73,893,277 $73,638,873 ' MN Growth ( %) over Prior Year: 5.41% 1.20% 0.04% -0.34% United States of America ** $4,095,471,000 $4,305,813,000 $4,451,521,000 $4,417,318,000 US Growth ( %) over Prior Year: 6.25 % 5.1 3.38% - 0.77% *Source: Minnesota Department of Revenue * *Source: US Census Bureau Annual Retail Trade Survey ' REGIONAL SUPPLY OF RETAIL SPACE The Minnesota Shopping Center Association (MSCA) reported in their 2009 Retail Real Estate Report that the total retail market supply now consists of about 62,369,817 ' square feet. According to Viewpoint 2009 published by Integra Realty Resources, the Twin Cities metropolitan area is ranked as the twenty -first largest retail market in the United States. This current market supply consists of four categories of basic retail ' property types: 1. Neighborhood centers (about 30,000 - 149,999 sq ft.) ' 2. Community centers (about 150,000 - 399,999 sq ft.) 3. Regional malls (400,000 sq ft. and over) ' 4. Central business districts (CBDs) of Minneapolis and St. Paul The distribution of this total square footage supply by property type is illustrated in the following chart. lilt FILE N UMBER 124- 2010 -0293 PAGE 21 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER TWIN CITIES RETAIL MARKET ANALYSIS ' Distribution of Retail Supply Square Footage by , Property Type Source: MSCA 2009 Retail Real Estate Report 0.7% 2.2% ■ Neighborhood Center El Community Center ' E Regional Mall L 350% E Mpls CBD 6 O 0 -adlet Another way of segmenting this total existing supply is to look at it by geographic regions. We use the same geographic areas as the MSCA market study report which divided this metropolitan area into four regions (southwest, northwest, northeast, and ' southeast) plus the two downtown central business districts. The geographic sectors are defined as: 1. Southwest: south of and including the I -394 freeway corridor, west of the ' Mississippi River ,west of and including 1-35W freeway corridor to the south. 2. Northwest: north of I -394 and west of the Anoka/Ramsey county line. ' 3. Northeast: north of and including the I -94 freeway corridor and east of the Anoka/Ramsey county line. ' 4. Southeast: south of I -94 and east of the Mississippi River and the I -35W freeway. The map below illustrates this delineation of the total market into geographic sectors. ' The subject property is located in the Northwest sector. FILE NUMBER 124- 2010 -0293 PAGE 22 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER TWIN CITIES RETAIL MARKET ANALYSIS s; t i E OR � ♦ LYN PARK NOTH O THE ST f#.itSS. ' 152 RRI LE ARDEN HILLS WHIMR s2 NEW M MUCHTa! ' NEW HOPE 5t HE PLYMOUTH NEIGHTS 47 eS MAPL.EWOOD EViLLE 36 NORTH ST. PAUL 55 V EN ALLEY s[i INNEAPOLIS It 5T. btu. WAYZATA 200 r8 ST.LOUIS t2 IN, a PARK 7 tx x: >' HOPKIk5 . WE ST p ,. 5T. PAU N4c ' EOINA SOUTH 5T, PAUL 62 Ila "eIG� S "a ' EDEN PRAIRIE 55 H INVER EIGHT GROVE S C OTTAGE si GROVE BLOOMINGTON 23 EAGAN SOUTHW AGE Std THEIST ' APPLE VALLEY ROSEMOUNT MSCA The following chart shows the distribution of this region's retail space by geographic ' sector, with the largest supplier being the northwest (31,4 %) and the smallest being Minneapolis CBD (2.2 %). ' Distribution of Retail Supply by Region Source: MSCA 2009 Retail Real Estate Report ty . ® Southwest El Soullicast ® Northwest ' ® Northeast El FILE N UMBER 124 - 2010 -0293 PAGE 23 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER TWIN CITIES RETAIL MARKET ANALYSIS , The supply of retail space has been increasing over the last several years. There are a number of firms and organizations that also research this retail real estate market. Reis Reports, Inc. is a private market research company specializing in real estate. The Minnesota Shopping Center Association (MSCA) sponsors a research study of this retail market and publishes their report once a year. Supply statistics from Reis, and ' the MSCA are summarized in the following table. MARKET RESEARCH REPORTS ON SUPPLY OF RETAIL SPACE Reis Reports, Inc. * 2004 2005 2006 2007 2008 _ 2009 ' Estimated Supply in SF at year -end 129,799,000 130,986,000 132,630,000 133,283,000 133,816,000 33,970,000 Growth in Supply (SF) by y ear -end 1 312,000 1 1,187,000 1 1,644,000 1 653,000 1 533,000 1 154,000 Percent Change: 1.1% 4.0% 5.3% 2.0% 1.6% 0.5% MN Shopping Center Assoc. 2004 2005 2006 2007 2008 2009 Estimated Supply in SF at year -end 157,004,100 158,059,383 158,123,506 161,321,528 62,258,796 62,369,817 ' Growth in Supply (SF) by year -end 7,060,828 1,055,283 64,123 3,198,022 937,268 111,021 Percent Change: 14.1% 1.9% 0.1% 5.5% 1.5% 0.2% * Reis data only includes Neighborhood and Community Centers , DEMAND AND ABSORPTION The current demand (occupied square footage) for retail space as reported in the ' MSCA 2009 Retail Real Estate Report is about 57,068,383 square feet. The following table gives a summary of historical demand and absorption. MARKET RESEARCH REPORTS ON DEMAND OF RETAIL SPACE ' Reis Reports, Inc.* 2004 2005 2006 2007 2008 2009 Estimated Demand in SF at ear -end 28,079,000 1 29,202,000 1 30,232,000 30,786,000 30,535,000 29,700,000 ' Net Absorption (SF) by year -end 40,000 2 1,123,000 1,030,000 1 554,000 251,000) 835,000) Absorption as % of Existing Demand: 0.9% 3.8% 3.4% 1.8% -0.8% -2.8% MN Shopping Center Assoc. 2004 2005 2006 2007 2008 2009 ' Estimated Demand in SF at year -end 1 53,469,846 1 54,575,820 1 54,519,849 1 57,703,558 58,647,786 j 57,068,383 Net Absorption (SF) by ear -end 1 7,172,433 1 1,105,974 (55,971 )1 3,183,709 1 944,228 1 (1,579,403 Absorption as % of Existing Demand: 13.4% 2.0% -0.1% 5.5% 1.6% -2.8% * Reis data only includes Neighborhood and Community Centers VACANCY Vacancy rates combine demand and supply for space and generally measure the , strength of the market. The table below shows the most recent vacancy rates from MSCA and NorthMarq, ' FILE NUMBER 124 - 2010 -0293 PAGE 24 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER TWIN CITIES RETAIL MARKET ANALYSIS VACANCY BY PROPERTY TYPE 25.0% b g� 23:Q° u, 20.0% 2 15.0% V C � 10.0% $ ,... K 3 r 5.0% 040" i Aw w r' ' Neighborhood Community Regional Mpls. CBD St. Paul CBD Overall Centers Centers Centers ■ MSCA 2009 Retail Real Estate Report O NorthMarq Compass Jul 2010 ' Note: MSCA does not report data forSt. P auICBD Historical vacancy figures by geographical location and property type are summarized in the following tables. ' HISTORICAL AVERAGE VACANCY BY GEOGRAMCAL SECTOR Source: 2004 -2009 MSCA Retail Real Estate Report 25.0% a a r 7 I s d z fi t e 20.0% 5.0% 0.0% - ' 2004 2005 2006 2007 2008 2009 ■ Northeast 5.1% 4.7% 5.5% 6.8% 5.9% 10.8% Northwest 9.0% 8.8% 7.3% 6.5% 5.6% 7.4% ' Southeast 6.0% 3.8% 5.4% 4.9% 6.0% 7.5% 0 Southwest 2.5% 3.6% 5.3% 4.6% 5.0% 7.9% ■Mpls. CBD 16.0% 18.0% 18.0% 17.5% 16.1% 23.0% ' 'a Overall 6.2% 6.0% 6.2% 5.9% 5.8% 8.5% 11�[t FILE NUMBER 124 - 2010 -0293 PAGE 25 ' Integra Realty Resources - BROOKLYN CENTER STRIP RETAIL CENTER TWIN CITIES RETAIL MARKET ANALYSIS HISTORICAL AVERAGE VACANCY BY PROPERTY TYPE 2004 2005 2006 2007 2008 2009 Neighborhood Centers 6.2% 6.3% 7.5% 7.1% 6.8% 10.1% Community Centers 3.6% 3.5% 3.4% 4.9% 5.2% 8.4% Regional Centers 8.8% 6.0% 6.5% 5.1% 4.8% 6.1% C13D 16.0% 18.0% 18.0% 17.5% 16.1% 23.0% Overall 6.2% 6.0% 6.2% 5.9% 5.8% 8.5% Source: 2004-2009 MSCA Retail Report Average vacancy increased to 8.5% in 2009 from 5.8% in 2008. The increase in vacancy occurred in all product types. Usually median vacancy rates more closely reflect the market's condition in that the midpoint does not allow the results of any one property to skew the data. In 2009, the median vacancy rate was 4.8% for the overall metro area. MSCA data indicated that overall market median vacancy was 2.0% in 2008. The following table shows the comparison of average and median vacancy rates in 2009 by geographical sector and property type. 2009 Vacancy by Geography and Type Source: MSCA 2009 Retail Real Estate Report 18.0% 4s f A 16.0% 14.0 - �-M 12.0% ILL- l c� 10.0 R -M , 32 WIN I 6.0% > 4.0 2.0%- 0.0 Average Median Average IMedian Average I Median Neighborhood Community Regional Malls ■ Northeast 10.9 5.1% 15.5% 4.9% 8.3% 6.2% sNorthwest 9.6% 4.3% 7.0% 2.7% 6.6% 5.8% Southeast 11.3% 6.9% 8.3% 5.5% 8.3% 8.6% a Southwest 10.5% 4.6% 1 5.3% 4.0% 2.8% 1 15% ■ Overall Metro 10.5% 5.3% 8.8% 4.0% 6.2% 2.6% Note that that the 2009 Vacancy by Geography and Type statistics are calculated by Integra Realty Resources-Minneapolis/St. Paul based on MSCA source data. TR FILE NUMBER 124-2010-0293 PAGE 26 Integra Realty Resources ' BROOKLYN CENTER STRIP RETAIL CENTER TWIN CITIES RETAIL MARKET ANALYSIS RENTS Rent ranges by property type are shown in the table below. ' Property Type Rent Range Per SF New Construction* $18.00 to $32.00 Neighborhood Centers $8.00 to $32.00 Community Centers $18.00 to $35.00 Regional Malls $20.00 to $75.00 ' Minneapolis CBD $15.00 to $40.00 *Anchored or shadow anchored centers • Rents in this market are forecasted to remain generally stable over the next year, with concessions or reduced rent required to retain some tenants. ' • Typical tenants can expect occupancy costs (occupancy costs are total of rent, rent, CAM and taxes) of 10 -15% of gross annual sales. ' • Big -box tenants can expect occupancy costs of 6 -10 % of gross annual sales. TAXES AND COMMON AREA MAINTENANCE EXPENSES ' Taxes and common area expenses have been increasing moderately. The table below shows their current ranges. ' Property Type e Taxes per SF CAM per SF P Neighborhood Centers $1.50 to $7.50 $1.50 to $3.75 Community Centers $1.50 to $6.00 $2.00 to $4.00 Regional Malls $4.00 to $10.00 $6.00 to $15.00 ' Central Business District $4.00 to $7.00 $6.00 to $15.00 FILE NUMBER 124 - 2010 -0293 PAGE27 ' Integra Realty Resources r BROOKLYN CENTER STRIP RETAIL CENTER TWIN CITIES RETAIL MARKET ANALYSIS r INVESTMENT RATES Capitalization rates and yield rates have been declining steadily. Debt and equity monies are readily available. The following table shows historical investment criteria. INVESTMENT CRITERIA - RETAIL MARKET; MINNEAPOLIS /ST. PAUL, MN ' Regional Malls 2004 2005 2006 2007 2008 2009 Discount Rate (unleveraged Yield - Y o ) 10.00 % 9.00% 1 8.00% 7.75% 8.25% 8.50% r Market Rent Inflator per year 2.50% 3.00% 3.00% 3.00% 0.00 0.00% Expense Growth Rate per year 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Reversion Cap Rate (R 9.00% 7.50% 7.00% 7.00% 7.50% 7.75% Going -In Cap Rate (R o ) 8.50% 6.50% 6.25% 6.25% 6.75% 7.25% ' Community Centers 2004 2005 2006 2007 2008 2009 Discount Rate (unleveraged Yield - Y o ) 10.00% 10.00% 9.00% 8.50% 8.25% 9.25% Market Rent Inflator per year 2.50% 2.50 % 3.00% 3.00% 3.00% - 2.00% r Expense Growth Rate per year 2.50% 3.00% 3.00% 3.00% 3.00% 3.00% Reversion Cap Rate (R) 9.00% 8.00% 8.00% 7.00% 7.00% 8.75% Going -In Cap Rate (R.) 8.50% 7.50% 7.00% 6.50% 6.50 % 8.25% Neighborhood Strips 2004 2005 2006 2007 2008 2009 r Discount Rate (unleveraged Yield - Y o ) 10.50% 10.25% 9.50 % 8.75 % 8.50% 9.75% Market Rent Inflator per year 2.50 % 2.50% 3.00% 3.00% 3.00% - 2.00% , Expense Growth Rate per year 2.50% 3.00% 3.00% 3.00% 3.00% 3.00 % Reversion Cap Rate (R 9.50% 8.50% 8.00% 7.25% 7.25% 9.25% Going -In Cap Rate (R a ) 9.00% 8.00% 7.00% 6.75% 6.75% 8.75% Source: Market Research by Integra Realty Resouces Minneapolis/St. Paul The reader is cautioned that the above chart is of average rates only and the actual range of market pricing does result in spreads for each property type that can be quite wide. r r r r r r r FILE NUMBER 124 - 2010 -0293 PAGE 28 Integra Realty Resources r BROOKLYN CENTER STRIP RETAIL CENTER TWIN CITIES RETAIL MARKET ANALYSIS SUMMARY ' - Supply is now about 62 million square feet according to the MSCA 2009 Retail Real Estate Report. ' - Supply is distributed as 26.6% Community Centers, 35.5% Neighborhood Centers, 0.7% Outlet Centers and 35.0% Regional Malls; Minneapolis CBD is approximately 2.2 %. - Supply is distributed geographically as 23.5% Southwest Sector, 31.4% Northwest Sector, 17.1% Northeast Sector, .25.8% Southeast Sector, and 2.2% Minneapolis CBD. - Metro area (13- County) estimated population stands at over 3.3 million. ' - Median disposable income is now $55,914 for the 13- county metro area. ' - Demand is now about 57.1 million square feet according to data taken from the MSCA 2009 Retail Real Estate Report. ' • The MSCA reports current overall vacancy rate in the metro area is 8.5 %. Vacancy in the Northwest subject submarket is 7.4 % for all retail property types and 9.6% for neighborhood shopping centers. ' - Typical market rents are $8.00 to $32.00 per square foot for Neighborhood Centers, $18.00 to $35.00 per square foot for Community Centers, and $20.00 to $75.00 per square foot for Regional Malls. - Most retail tenants have overall occupancy costs of 10% to 15% of sales; big box tenants have overall occupancy costs of 6% to 10 % of sales. FILE NUMBER 124- 2010 -0293 PAGE 29 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL,CENTER LAND DESCRIPTION AND ANALYSIS ' PROPERTY ANALYSIS ' LAND DESCRIPTION AND ANALYSIS LAND DESCRIPTION ' Land Area - Acres 1.22 Land Area - Square Feet 53,120 Source of Land Area Public Records Primary Street Frontage 66th Avenue North - 296 feet Secondary Street Frontage Camden Avenue North - 176 feet Shape Irregular rectangular Corner Yes , Topography Generally level and at street grade Drainage No problems reported or observed Environmental Hazards None reported or observed Ground Stability No problems reported or observed Flood Area Panel Number 27053CO208E Date September 2, 2004 Zone X Description Outside of 500 -year floodplain , Insurance Required? No ZONING; OTHER REGULATIONS Zoning Jurisdiction City of Brooklyn Center Zoning Designation PUD /C2 , Description Planned Unit Development/Commerce District Legally Conforming? Yes Zoning Change Likely? No Permitted Uses Retail services, eating establishments provided they do not offer live ' entertainment and further provided that the category does not permit drive -in eating places and convenience -food restaurants, retail services, and serviceJoffice uses. Minimum Lot Area No minimum requirement , Minimum Lot Width (Feet) 100 feet Minimum Setbacks (Feet) Front: 35 feet. Rear: 40 feet. Side Interior: 10 feet. Side Comer: 25 feet. Parking Requirement Eating & drinking places: One space for every two seats and one space for every two employees on the average maximum shift. General retail stores: 1 I spaces for the first 2,000 SF; 5.5 spaces for each additional 1,000 SF exceeding 2,000 SF. Other Land Use Regulat No reported or observed UTILITIES , Service Provider Water City of Brooklyn Center Sewer City of Brooklyn Center Electricity Xcel Energy Natural Gas Centerpoint Energy ' Local Phone Qwest Communications EASEMENTS, ENCROACHMENTS AND RESTRICTIONS: ' We were not provided a current title report to review. We are not ,aware of any easements, encumbrances, or restrictions that would adversely affect value. Our valuation assumes no adverse easements, encroachments. or restrictions and that the subject has a clear and marketable title. CONCLUSION OF LAND ANALYSIS ' Overall, the physical characteristics of the site and the availability of utilities result in functional utility suitable for a variety of uses including those permitted by zoning. There are no other particular restrictions on development noted in the analysis. ' U FILE NUMBER 124 - 2010 -0293 PAGE 30 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER IMPROVEMENTS DESCRIPTION AND ANALYSIS ' IMPROVEMENTS DESCRIPTION AND ANALYSIS The subject is an existing retail property containing .10,000 square feet of gross leasable area. The improvements were constructed in 2006, and are 100% leased as of the effective ' appraisal date. The site area is 1.22 acres, or 53,120 square feet. The following description is based on our inspection and discussions with ownership. EVIPROVEMENTS DESCRIPTION Name of Property Brooklyn Center Strip Retail Center General Property Type Retail Property Sub Type Convenience Retail Strip Center Occupancy Type Multi- Tenant Percent Leased 100% ' Number of Tenants 7 Tenant Size Range (SF) 1,240 - 1,800 Number of Buildings 1 Stories 1 Construction Class C Construction Type Masonry Construction Quality Good ' Condition Good Gross Building Area (SF) 10,010 Gross Leasable Area (SF) 10,000 ' Land Area (SF) 53,120 Floor Area Ratio (GLA /Land SF) 0.19 Floor Area Ratio (GBA/Land SF) 0.19 Building Area Source Public records and rent roll ' Year Built 2006 Actual Age (Yrs.) 4 Estimated Effective Age (Yrs.) 4 Estimated Economic Life (Yrs.) 45 Remaining Economic Life (Yrs.) 41 Number of Parking Spaces 64 Parking Type Surface Parking Spaces /1,000 SF GLA 6.40 FILE NUMBER 124 - 2010 -0293 PAGE 31 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER IMPROVEMENTS DESCRIPTION AND ANALYSIS ' CONSTRUCTION DETAILS , Foundation Concrete Basement None Structural Frame Masonry with steel frame and steel columns Exterior Walls Concrete block and EIFS , Windows Anodized aluminum double pane Roof Membrane with ballast Bay Depth in Feet 70 Floors Carpet, ceramic file or vinyl file Walls Primarily painted gypsum board Ceilings Exposed to roof trusses or acoustic tile ceiling panels Lighting , Fluorescent lighting, recessed lighting and hanging light fixtures HVAC Rooftop HVAC units Electrical Assumed adquate and code compliant Plumbing Assumed adquate and code compliant Elevators None ' Sp 100% wet sprinkler system IMPROVEMENTS ANALYSIS , Quality and Condition The quality and condition of the subject is considered to be consistent with that of , competing properties. Functional Utility ' The improvements appear to be adequately suited to their current use, and there do not appear to be any significant items of functional obsolescence. Deferred Maintenance ' No deferred maintenance is apparent from our inspection and none is identified based on discussions with ownership , ADA Compliance Based on our inspection and information provided, we are not aware of any ADA , issues. However, we are not expert in ADA matters, and further study by an appropriately qualified professional would be recommended to assess ADA ' compliance. Hazardous Substances We are not aware of the presence of any hazardous substances at the property; however, we are not qualified to detect such substances. Personal Property ' There are no personal property items that would be significant to the overall valuation. CONCLUSION OF IMPROVEMENTS ANALYSIS ' Overall, the quality, condition, and functional utility of the improvements are typical for their age and location. ' R& FILE NUMBER 124- 2010 -0293 PAGE 32 Integra Realty Resources , BROOKLYN CENTER STRIP RETAIL CENTER REAL ESTATE TAX ANALYSIS ' REAL ESTATE TAX ANALYSIS Real estate taxes are a key determinant of value in Minnesota, because properties are taxed at rates that are higher than rates for comparable properties in neighboring states. Commercial properties are taxed at about 3.0% to 4.0% of the assessor's estimated market value of the property each year. Taxes are paid one year in arrears in Minnesota, which means that the taxes payable in 2010 relate to the January 2, 2009 assessor's estimated ' market values. Real estate taxes and assessments for the current tax year are shown in the following table. TAXES AND ASSESSMENTS - 2010 Assessed Value Taxes and Assessments Ad Valorem Direct Tax ID Land Improvements Total Tax Rate Taxes Assessments Total 36- 119 -21 -13 -0119 $700,000 $660,000 $1,360,000 3.5769% $48,645.18 $0 $ 48,645.18 ' According to Hennepin County, the first half of the 2010 real estate taxes are paid. The second half is due by October 15, 2010. Additionally, there are no prior year taxes due on this property. ' The effective tax rate equates to 3.5769 %. Based on our estimate of market value included herein, the subject's current AEMV and real estate taxes are considered ' reasonable and in line with the market. SPECIAL ASSESSMENTS ' Special assessments are charges levied by the city and/or county on a property to pay for public infrastructure that directly benefits that property. In theory, the value of a property should increase at least by the amount of the special assessment. ' Special assessments are often charged to property owners for public works such as streets and roads, water lines, sanitary sewer lines, storm sewer lines, and storm water ' retention areas. According to the Hennepin County Treasurer's Office, no special assessments are currently levied against the subject property. ' Our value estimate assumes special assessments are aid in full. p p MR FILE NUMBER 124 - 2010 -0293 PAGE 33 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER HIGHEST AND BEST USE ANALYSIS ' HIGHEST AND BEST USE ANALYSIS As IF VACANT ' Legally Permissible The only permitted use under zoning that is consistent with prevailing land use patterns ' in the area is retail use. Physically Possible There are no physical limitations that would prohibit development of a retail use on the site. Financially Feasible Based on our analysis of the market, there is limited demand for additional retail development at the current time. It appears that a newly developed retail use on the site ' would not have a value commensurate with its cost; therefore retail use is not considered to be financially feasible. Nevertheless, we expect an eventual recovery of the market accompanied by a rise in property values to a level that will justify the cost , of new construction. Thus, it is anticipated that retail development will become financially feasible in the future. Maximally Productive There does not appear to be any reasonably probable use of the site that would generate a higher residual land value than holding the property for future development of a retail , use. Accordingly, it is our opinion that holding the property for future retail use, based on the normal market density level permitted by zoning, is the maximally productive use of the property.. ' Conclusion Holding the property for future development of a retail use is the only use that meets the four tests of highest and best use. Therefore, it is concluded to be the highest and , best use of the property as if vacant. ASIMPROVED ' The subject site is developed with a 10,000 square foot retail strip center, which is consistent with the highest and best use of the site as if it were vacant. The existing improvements are currently leased and produce a significant positive cash ' flow that we expect will continue. Therefore, a continuation of this use is concluded to be financially feasible. Based on our analysis, there does not appear to be any alternative use that could ' reasonably be expected to provide a higher present value than the current use, and the value of the existing improved property exceeds the value of the site, as if vacant. For ' these reasons, continued retail use is concluded to be maximally productive, and the highest and best use of the property as improved. MOST PROBABLE BUYER , Taking into account the size and characteristics of the property and its multitenant occupancy, the likely buyer is a local or regional investor such as an individual or partnership. ' FILE NUMBER 124- 2010 -0293 PAGE 34 Integra Really Resources , ' BROOKLYN CENTER STRIP RETAIL CENTER VALUATION METHODOLOGY ' VALUATION ANALYSIS VALUATION_ METHODOLOGY ' Appraisers usually consider three approaches to estimating the market value of real property. These are the cost approach, sales comparison approach and the income ' capitalization approach. The cost approach assumes that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility. This approach is particularly ' applicable when the improvements being appraised are relatively new and represent the highest and best use of the land, or when the property has unique or specialized improvements for which there is little or no sales data from comparable properties. The sales comparison approach assumes that an informed purchaser would pay no more for a property than the cost of acquiring another existing property with the same utility. This approach is especially appropriate when an active market provides sufficient reliable data. The sales comparison approach is less reliable in an inactive market, or when estimating the value of properties for which no directly comparable sales data is available. ' The sales comparison approach is often relied upon for owner -user properties. The income capitalization approach reflects the market's perception of a relationship ' between a property's potential income and its market value. This approach converts the anticipated net income from ownership of a property into a value indication through capitalization. The primary methods are direct capitalization and discounted cash flow ' analysis, with one or both methods applied, as appropriate. This approach is widely used in appraising income - producing properties. ' Reconciliation of the various indications into a conclusion of value is based on an evaluation of the quantity and quality of available data in each approach and the applicability of each approach to the property type. ' Use of the approaches in this assignment is summarized as follows: ' APPROACHES TO VALUE Approach Applicability to Sub Use in Assignment Cost Approach Applicable Utilized Sales Comparison Approach Applicable Utilized ' Income Capitalization Approach Applicable Ut ilized, FILE NUMBER 124 - 2010 -0293 PAGE 35 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER LAND VALUATION , LAND VALUATION To develop an opinion of the subject's land value, as if vacant and available to be ' developed to its highest and best use, we utilize the sales comparison approach. Our search for comparable sales focused on transactions most relevant to the subject in terms ' of location, size, highest and best use, and transaction date. For this analysis, we use price per square foot as the appropriate unit of comparison because market participants typically compare sale prices and property values on this ' basis. The most relevant sales are summarized in the following table. SUMMARY OF COMPARABLE LAND SALES ' Sale Effective SF; $ /SF No. Name /Address Date Sale Price Acres Zoning Land ' 1 'Aldi Site Jul -10 $1,550,000 97,574 B4, Limited $15.89 SEC Hwy 36 and Nova Scotia Ave. 2.24 Business Oak Park Heights District Washington County ' MN 2 Discount Tire Site Jun -10 $675,000 50,000 TC, Town $13.50 NWC of Zane Ave. & Hwy. 610 1.15 Center ' Brooklyn Park Hennepin County MN 3 Auto Zone Site Oct -09 $625,000 39,870 PBD $15.68 , 11679 Ulysses Ln. NE. 0.92 Blaine Anoka County ' MN 4 Enterprise Auto Rental Site Aug -09 $350,000 37,661 B -3, $9.29 8200 Lakeland Ave. N. 0.86 Commercial ' Brooklyn Park Hennepin County MN FILE NUMBER 124 - 2010 -0293 PAGE 36 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER LAND VALUATION COMPARABLE LAND SALES MA P 1 ' �' ( h Stac 19 " Francil y 24 �1 �'� t - -- 28 85 r> �j In oFT Chisago Cdy ! ' a 13 Ea Bathe 75 30 ti aae p t65 7 Linwood �' a j 47} Wyoming. + 25 + =w; Oak G ver I' 24 F f Cedar 22 x Burman y 58 ates Park taste .. ... ... kt 18 $ , a K I arigs h Per 59 �,. �ore§f Lake � •� 1 � t r' t : -�i 20 78 i s, 19� 3 �� Scan dla I i' ?i Lake — am msey � A dovef t _ _ 97 Manor` . " 9 a O K A t7 23 Park 116 3 b 52 x 3 a -y r 14 242 �( 168 1 l E I Do Lino�Lake a m f • Cent 51 r le =iugo N E S O A lain =«� t � !' M` N T � � VI'�6j_ � •—� 3 Plfie S are 8 ex ` do 21 P k "- F o r o ke r' t 1 t: (Whlt s `r t rook �r � � •dsl�il 80 ��.- ,Beaeh�� 55 11 mer L keiir 252 s� 5s t DeIlWOOd den S1 i {sills t North Oaks. w - 6 130 " - ,� ._ i e a al s u B rt Lak 6a 8€ .- 0 on 12 LK M ; b . kJ 12 e ? s em L W 1.� 16 x!81 i a 38 C ` a2ibbi sa Igh 5 ? SeVIII ana 19 me Spnngs ( k Par 24 � 158 ': 10D - �i• 57 153 1 ``� � � , ��,, r ? � iHelghl3 Lake Elm to 16a - Goi 66 2 ` L 25 ale 152 Fal on eig s, " 30 ,r � k, 64 12 A '� ' 31 ._ akd Ie r , r - , 15 t u 3 � ... 5 0 7a •� ' .. � 33 �� 48 � i ^''`+ 20 22 35 38 � •I M1 � °� ' � _r. ?3• Uty Eros -. Afto I IF 31 C ei H '- 17 a f % _•'. - 63 -- x10 �� 19 l .f �4 2 52 13. � . � _ ° . � s }k eWport '�, 21 ` r 56 20 l95 28 (q Y00 le tq - Co n'htmand, P 1988- 20091MIcrosoft�Eo "oration andlo, itssu Iiers.fill ri �. ", ` 0 a f01/e FILE N UMBER 124 - 2010 -0293 PAGE 37 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER LAND VALUATION , ANALYSIS AND ADJUSTMENT OF SALES The sales are compared to the subject and adjusted to account for material differences ' that affect value. Adjustments are considered for the following factors, in the sequence shown below. ' ' ADJUSTMENT FACTORS. Effective Sale Price Accounts for atypical economics of a transaction, such as demolition cost, expenditures by the buyer at time of purchase, ' or other similar factors. Usually applied directly to sale price on a lump sum basis. Real Property Rights Fee simple, leased fee, leasehold, partial interest, etc. ' Financing Terms Seller financing, or assumption of existing financing, at non - market terms. ' Conditions of Sale Extraordinary motivation of buyer or seller, assemblage, forced sale, related parties transaction. Market Conditions Changes in the economic environment over time that affect the ' appreciation and depreciation of real estate. Location Market or submarket area influences on sale price; surrounding , land use influences. Access/Exposure Convenience to transportation facilities; ease of site access; visibility from main thoroughfares; traffic counts. , Size Inverse relationship that often exists between parcel size. and unit value. Shape and Topography Primary physical factors that affect the utility of a site for its , highest and best use. Zoning Government regulations that affect the types and intensities of ' uses allowable on a site. Entitlements The specific level of governmental approvals attained pertaining to development of a site. ' ANALYSIS AND ADJUSTMENT OF SALES ' The adjustment process is typically applied through either quantitative or qualitative analysis, or a combination of the two. Quantitative adjustments are often developed as dollar or percentage amounts and are most credible when there is sufficient data to , perform a paired sales or statistical analysis. While we present numerical adjustments in the Land Sales Adjustment Grid that follows, they are based on qualitative judgment , rather than empirical data as there is not sufficient data to develop a sound quantified estimate within a reasonable degree of confidence. Our qualitative adjustments are based on a scale calibrated in 5% increments, with a minor adjustment considered to be 5% and a substantial adjustment considered to be 25 %. ' I T FILE NUMBER 124 - 2010 -0293 PAGE 38 Integra Realty Realty Resources , BROOKLYN CENTER STRIP RETAIL CENTER LAND VALUATION Adjustments are based on our rating of each comparable sale in relation to the subject. ' If the comparable is superior to the subject, the sale price is adjusted downward to reflect the subject's relative inferiority; if the comparable is inferior, its price is adjusted upward. The adjustable elements of comparison are: Real Property Rights Conveyed P Y This adjustment is generally applied to reflect the transfer of property rights different ' from those being appraised, such as differences between properties owned in fee simple and in leased fee. ' In this analysis, no adjustments are required. Financing Terms This adjustment is generally applied to a property that transfers with atypical financing, such as having assumed an existing mortgage at a favorable interest rate. Conversely, a property may be encumbered with an above - market mortgage which has no prepayment clause or a very Y prepayment costl clause. Such atypical financing often plays a role in the negotiated sale price. ' In this analysis, no adjustments are required. Conditions of Sale ' This adjustment category reflects extraordinary motivations of the buyer or seller to complete the sale. Examples include a purchase for assemblage involving anticipated incremental value or a quick sale for cash. This adjustment category may also reflect a ' distress- related sale, or a corporation recording a non - market price. In this analysis, no adjustments are required. ' Expenditures at Purchase This adjustment is appropriate in situations where the sale price has been influenced by ' expenditures that the buyer intended to make immediately after purchase. Examples include buyer -paid sales commissions, buyer -paid back taxes, costs to cure deferred maintenance, costs to demolish obsolete structures to clear a site for redevelopment, t and costs to remediate environmental contamination. In this analysis, no adjustments are required. The previous adjustments, if required, are applied sequentially. Time - Market Conditions Real estate values normally change over time. The rate of this change fluctuates due to investors' perceptions of prevailing market conditions. This adjustment category 1 reflects value changes if any, that have occurred between the date of the sale and the effective date of the appraisal. FILE NUMBER 124- 2010 -0293 PAGE 39 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER LAND VALUATION The sales took place from August 2009 to July 2010. Market conditions for select retail sites have been generally stable over this period through the effective date of value. As a result, we apply no adjustment to account for this trend. Time - Market Conditions adjustments are applied after the previous adjustments, but ' before any of the following adjustments. Location ' Location has a great impact on property values. This adjustment category considers general market area influences. In this analysis, Land Sales 1 and 2 are considered to have superior retail locations in , comparison to the subject. Downward adjustments are applied to the selling price of these comparables. Land Sale 4 is considered to have an inferior retail location in comparison to the subject and an upward adjustment is made. Access/Exposure The access to the site from freeways and other major roads are significant drivers of real estate site value. In addition, exposure from average daily traffic volumes is also a significant driver of retail site value. The subject property has average exposure and ' good access from 66 Avenue North and Highway 252. Land Sales 1 and 3 are considered to have superior exposure in comparison to ' the subject. Therefore, downward adjustments are made to these comparables. ' Size Reasonable adjustments were made to reflect the tendency that as land size increases, ' the price per unit of land area decreases with all other factors being equal. In this analysis, an upward adjustment is applied to Land Sale 1 for larger site size in comparison to the subject. ' Shape/Topography The subject is irregular rectangular shaped and level. This adjustment category ' generally reflects differences such as configuration and topography. Land Sale 3 is a narrow, rectangular shaped parcel and adjusted up. Zoning/Use This adjustment category generally addresses any differences between the highest and best use of the subject and the comparables. In addition, zoning classifications impose development restrictions and allowances on properties which can affect prices. The subject is zoned PUD, Planned Unit Development/C2, Commerce District. The comparables are zoned similarly as planned- commercial developments or a comparable commercial category. No adjustments are made. The following table summarizes the adjustments we make to the comparable sales. , MR FILE NUMBER 124 - 2010 -0293 PAGE 40 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER LAND VALUATION LAND SALES ADJUSTMENT GRID ' Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4 Name Brooklyn Aldi Site Discount Tire Auto Zone Site Enterprise Center Strip Site Auto Rental Retail Center Site ' Address 615 66th SEC Hwy 36 NWC of Zane 11679 Ulysses 8200 Lakeland Avenue North and Nova Ave. & Hwy. Ln. NE. Ave. N. Scotia Ave. 610 City Brooklyn Oak Park Brooklyn Park Blaine Brooklyn Park Center Heights County Hennepin Washington Hennepin Anoka Hennepin State Minnesota MN MN MN MN Sale Date Jul -10 Jun -10 Oct -09 Aug -09 ' Sale Price $1,550,000 $675,000 $625,000 $350,000 Effective Sale Price $1,550,000 $675,000 $625,000 $350,000 Square Feet 53,120 97,574 50,000 39,870 37,661 Acres 1.22 2.24 1.15 0.92 0.86 Price per Square Foot $15.89 $13.50 $15.68 $9.29 PROPERTY RIGHTS Fee Simple Fee Simple Fee Simple Fee Simple %ADJUSTMENT 0 % 0% 0% 0% FINANCING TERMS Cash sale Cash to seller Cash to seller cash to seller %ADJUSTMENT 0% 0% 0% 0% CONDITIONS OF SALE % ADJUSTMENT 0% 0% 0% 0% MARKET CONDITIONS 8/20/2010 Jul -10 Jun -10 Oct -09 Aug -09 0% 0% 0% 0% CUMULATIVE ADJUSTED PRICE $15.89 $13.50 $15.68 $9.29 LOCATION Superior Superior Similar Inferior %ADJUSTMENT -10% -5% 0% 10% ' ACCESS/EXPOSURE Superior Similar Superior Similar %ADJUSTMENT -15% 0% -15% 0% SIZE Inferior Similar Similar Similar %ADJUSTMENT 5% 0% 0% 0% ' SHAPE AND TOPOGRAPHY Similar Similar Similar Inferior % ADJUSTMENT 0% 0% 0% 20% ZONING/USE Similar Similar Similar Similar % ADJUSTMENT 0% 0% 0% 0% Net $ Adjustment 43.18 -$0.68 -$2.35 $2.79 Net % Adjustment 1 -20% -5% -15% 30 % Final Adjusted Price $12.71 $12.83 $13.32 $12.08 ' Overall Adjustment -20% -5% -15% 30% Range of Adjusted Prices $12.08 - $13.32 Average $12.73 Indicated Value $12.75 ' LAND VALUE CONCLUSION P We give equal weight to all of the sales, and arrive at a land value conclusion as follows: LAND VALUE CONCLUSION Indicated Value per Square Foot $12.75 Subject Square Feet 53,120 Indicated Value $677,280 ' Rounded $680,000 FILE NUMBER 124 - 2010 -0293 PAGE 41 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER COST APPROACH , COST APPROACH The tables below summarize our valuation by the cost approach. The replacement cost new of the improvements is estimated using Marshall Valuation Service. REPLACEMENT COST ESTIMATE ' Building Improvements MVS Building MVS Bldg Name Type Class Quality Quantity Unit Unit Cost Cost New Brooklyn Center Strip Retail Center Neighborhood C Good 10,010 SF $100.26 $1,003,603 Center Subtotal - Replacement Cost New $1,003,603 Plus: Indirect Cost 5% $50,180 Subtotal $1,053,783 Plus: Entrepreneurial Incentive 10% $105,378 Total Replacement Cost New $1,159,161 Site Improvements Item Quality Quantity Unit Unit Cost Cost New Parking & Circulation Average 1 Total $65,000.00 $65,000 Signage & Lighting Average 1 Total $25,000.00 $25,000 Landscaping Average 1 Total $35,000.00 $35,000 Subtotal - Replacement Cost New $125,000 Plus: Indirect Cost 5% $6,250 Subtotal $131,250 Plus: Entrepreneurial Incentive 10% $13,125 Total Replacement Cost New $144,375 Overall Property Building Improvements $1,003,603 Site Improvements $125,000 Subtotal - Replacement Cost New $1,128,603 Plus: Indirect Cost 5% $56,430 Subtotal $1,185,033 Plus: Entrepreneurial Incentive 10% $118,503 Total Replacement Cost New $1,303,536 Source: Marshall Valuation Service except for Indirect Costs and Entrepreneurial Incentive, which are appraiser's estimates. FILE NUMBER 124- 2010 -0293 PAGE 42 Integra Realty Resources ' BROOKLYN CENTER STRIP RETAIL CENTER COST APPROACH ' ESTIMATE OF ACCRUED DEPRECIATION Building Improvements Replacement Cost New $1,159,161 Less: Deferred Maintenance $0 Remaining Cost $1,159,161 Age -Life Depreciation 9% - $104,324 Additional Functional Obsolescence 0 % $0 ' External Obsolescence 35% - $405,706 Total Accrued Depreciation - $510,031 Depreciated Replacement Cost $649,130 Site Improvements Replacement Cost New $144,375 Less: Deferred Maintenance $0 Remaining Cost $144,375 Age -Life Depreciation 27% - $38,981 Additional Functional Obsolescence 0% $0 External Obsolescence 0% $0 Total Accrued Depreciation - $38,981 Depreciated Replacement Cost $105,394 Overall Property Replacement Cost New $1,303,536 Deferred Maintenance $0 ' Remaining Cost $1,303,536 Age -Life Depreciation - $143,306 Additional Functional Obsolescence $0 ' External Obsolescence - $405,706 Total Accrued Depreciation - $549,012 Depreciated Replacement Cost $754,524 ' Rounded: $750,000 VALUE INDICATION BY COST APPROACH 1 By combining our land value conclusion with the depreciated replacement cost of the improvements, we arrive at a value indication by the cost approach as shown in the table below. ' VALUE INDICATION BY COST APPROACH Depreciated Replacement Cost $750,000 Land Value $680,000 Indicated Property Value $1,430,000 Rounded $1,430,000 r FILE NUMBER 124 - 2010 -0293 PAGE 43 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER SALES COMPARISON APPROACH SALES COMPARISON APPROACH The sales comparison approach develops an indication of value by comparing the subject , to sales of similar properties. The steps taken to apply this approach are: ■ Identify relevant property sales; ■ Research, assemble, and verify pertinent data for the most relevant sales; Analyze the sales for material differences in comparison to the subject; ' ■ Reconcile the analysis of the sales into a value indication for the subject. To apply the sales comparison approach, we searched for sale transactions most relevant to the subject in terms of property type, location, size, age, quality, and transaction date. We use price per square foot of gross leasable area as the appropriate unit of comparison because market participants typically compare sale prices and property values on this ' basis. The most relevant sales are summarized in the following table. SUMMARY OF COMPARABLE IMPROVED SALES Acres; Yr. Built; FAR; Sale # Stories; Parking Effective Leasable $/Leasable Cap No. Name /Address Date % Occ. Ratio Sale Price SF SF Rate 1 Eden Prairie Strip Retail Center Jun -10 2007 1.79 $2,400,000 12,000 $200.00 9.50% 10165 Hennepin Town Rd. 1 0.15 Eden Prairie 92% 6.08/1,000 Hennepin County ' MN 2 Promenade Place Retail Center Sep -09 1996 1.35 $1,350,000 6,500 $207.69 10.25% 1298 Promenade Pl. 1 0.11 Eagan 100% 14.31/1,00 Dakota County MN 3 Plymouth Town Center Jun -09 1997 3.76 $5,500,000 26,330 $208.89 8.75% 3500 Vicksburg Lane 1 0.16 Plymouth 95% 9.3/1,000 ' Hennepin County MN 4 Blaine Retail Center Mar -09 2004 1.97 $1,845,000 12,500 $147.60 9.11% ' 2320 -2330 Cloud Drive NE 1 0.14 Blaine 100% 5.2/1,000 Anoka County MN 5 Brooklyn Park Retail Center Mar -09 2004 1.49 $2,150,000 11,735 $183.21 8.14% ' 9310 Zane Avenue North 1 0.18 Brooklyn Park 88% 5.1111,000 Hennepin County MN IFR FILE NUMBER 124 -2010 -0293 PAGE 44 Integra Realty Resources ' BROOKLYN CENTER STRIP RETAIL CENTER SALES COMPARISON APPROACH ' COMPARABLE IMPROVED SALES MAP Andover E a 7 A N 0 K A ' ,s 118 78 52 118 23 1Dt 144 13"`" 10 _ Da, 242 14—< M le- h I 61 Thereen 53 121 oil Ids Park 17 ti Lmo Champlin ,5s t t i2 laine Lakes Cgmer 103 1 30 t I rooklynP r� Coreot ` ap e tog i g r " `e 3 r Palmer 7. 0 130 152 aketrlh 252 ' ip _ ' horeVlew Nortr Oaks .` 59 Fri 45 is le r ve r en- Ills ~ � Cart? p , ; i r - Hel 47 81 Pfarffi t f 12 y t 55 Fren 189} = 67 s 44 >`s 4 B 15 18 Fteg14[ti a le _ M iglj s 51 a itt PII 158 81 ' 1;hnlle ` 99 t B ? Mae Icine 102 �. - .2 „H Ic n s 3 1t4� Go a B ei 8 53 t 28 aytl w 30Y �,, � �� �� t � I X56 c� E � '` � ''•..._ irc f, Wayz a 12 Ha We dlatd� dUl- 5 Clare Q i Minn on - 0i bro d tMbr ok 22 33 ,38 37 '� rk N t o Deepha � 7 11 20 21 r k f . t J di L g ti Lllydrl 1 '80 61 H At I N g M of s - c , s 4 189 100 82 53 � Hc' a i4 17 ' ocn nhasse 212 eav ro k 13 - - 83 s r geld 35 312 ej 1 " 43 X55 3 17 on Ea n x� - —' 28 ti k 30 '4 W w a o 7 1 ` log + 101 13 Valle LNb�Y l r� �1_ Burn _Co i S1111 _Paf 3 38 ' htCs1 and P 1988 2009 Micraso Cor ,oration andlorAs su hers. All n hts reserved. MR FILE NUMBER 124 -2010 -0293 PAGE 45 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER SALES COMPARISON APPROACH 0 1 1�' � i '� .t f F �. f Y` Sale 1 Sale 2 Eden Prairie Strip t Center Center � Promenade Place Retail P Retail Prome S ` g g# � Z ST ✓. ,+ag k / f � ?y u µ 3 ` .? s n z + f 6 .5 : , x d 's +_ ° .�, n' it�`�IS�S�2f�W�caa+ a * <r t t Sale 3 Sale 4 Plymouth Town Center Blaine Retail Center rr £ i , � bW f Aytkt�y7K � '' # li� 3gYi 1 f Tr��.tt� E t, t al Sale 5 ' Brooklyn Park Retail Center FILE NUMBER 124 - 2010 -0293 PAGE 46 Integra Realty Resources r BROOKLYN CENTER STRIP RETAIL CENTER SALES COMPARISON APPROACH ANALYSIS AND ADJUSTMENT OF SALES ' The sales are compared to the subject and adjusted to account for material differences that affect value. Adjustments are considered for the following factors, in the sequence shown below. ADJUSTMENT FACTORS ' Effective Sale Price Accounts for atypical economics of a transaction, such as excess land, non - realty components, expenditures by the buyer at time of purchase, or other similar factors. Usually applied directly to sale price on a lump sum basis. ' Real Property Rights Leased fee, fee simple, leasehold, partial interest, etc. Financing Terms Seller financing, or assumption of existing financing, at non- market terms. Conditions of Sale Extraordinary motivation of buyer or seller, such as 1031 exchange transaction, assemblage, or forced sale. Market Conditions Changes in the economic environment over time that affect the appreciation and depreciation of real estate. Location Market or submarket area influences on sale price; surrounding land use influences. Access/Exposure Convenience to transportation facilities; ease of site access; I visibility from main thoroughfares; traffic counts. Size Inverse relationship that often exists between building size ' and unit value. Parking Ratio of parking spaces to building area. Building to Land Ratio Ratio of building area to land area; also known as floor area ratio (FAR). Building Quality Construction quality, amenities, market appeal, functional utility. Age /Condition Effective age; physical condition. Economic Characteristics Non - stabilized occupancy, above/below market rents, and other economic factors. Excludes differences in rent levels that are already considered in previous adjustments, such as for location or quality, FILE NUMBER 124- 2010 -0293 PAGE 47 1 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER SALES COMPARISON APPROACH ' ANALYSIS AND ADJUSTMENT OF SALES The adjustment process is typically applied through either quantitative or qualitative , analysis, or a combination of the two. Quantitative adjustments are often developed as dollar or percentage amounts and are most credible when there is sufficient data to perform a paired sales or statistical analysis. While we present numerical adjustments in the Improved Sales Adjustment Grid that follows, they are based on qualitative judgment rather than empirical data as there is not sufficient data to develop a sound quantified estimate within a reasonable degree of confidence. Our qualitative adjustments are based on a scale calibrated in 5% increments, with a minor adjustment 0 0 considered to be 5% and a substantial adjustment considered to be 25%. Adjustments are based on our rating of each comparable sale in relation to the subject. , If the comparable is superior to the subject, the sale price is adjusted downward to reflect the subject's relative inferiority; if the comparable is inferior, its price is adjusted upward. The adjustable elements of comparison are: Real Property Rights Conveyed This adjustment is generally applied to reflect the transfer of property rights different from those being appraised, such as differences between properties owned in fee simple and in leased fee. In this analysis, no adjustments are required. Financing Terms This adjustment is generally applied to a property that transfers with atypical financing, such as having assumed an existing at a favorable interest rate. Conversely, a g Y property may be encumbered with an above - market mortgage which has no prepayment clause or a very costly prepayment clause. Such atypical financing often plays a role in the negotiated sale price. In this analysis, no adjustments are required. Conditions of Sale This adjustment category reflects extraordinary motivations of the buyer or seller to complete the sale. Examples include a purchase for assemblage involving anticipated ' incremental value or a quick sale for cash. This adjustment category may also reflect a distress- related sale, or a corporation recording a non - market price. In this analysis, no adjustments are required. , Expenditures at Purchase This adjustment is appropriate in situations where the sale price has been influenced by expenditures that the buyer intended to make immediately after purchase. Examples include buyer -paid sales commissions, buyer -paid back taxes, costs to cure deferred ' maintenance, costs to demolish obsolete structures to clear a site for redevelopment, and costs to remediate environmental contamination. MR FILE NUMBER 124 - 2010 -0293 PAGE 48 Integra Realty Resources - '. ' BROOKLYN CENTER STRIP RETAIL CENTER SALES COMPARISON APPROACH In this analysis, no adjustments are required. ' The revious adjustments, if required, area lied sequentially. P J q � pP . q Y ' Time - Market Conditions Real estate values normally change over time. The rate of this change fluctuates due to investors' perceptions of prevailing market conditions. This adjustment category ' reflects value changes if any, that have occurred between the date of the sale and the effective date of the appraisal. ' Quantifying the market condition or time adjustment downward is very difficult given the overall lack of sales and the inability to extract time adjustments from the market. Nevertheless market indicators based on brokerage and sales activity and investor and ' broker surveys assist in the selection of an appropriate time adjustment. The SIOR Commercial Real Estate Index has declined for eight consecutive quarters and the lack or difficulty in obtaining commercial credit has resulted in the slow down of ' investment activity. This coupled with job losses has reduced the demand for space. The retail market has been very stagnant with increasing vacancy rates and declining rents. Given our review of the above, we have applied a 15% downward adjustment for declining market conditions over time. ' Time - Market Conditions adjustments are applied after the previous adjustments, but before any of the following adjustments. Location ' Location has a great impact on property values. This adjustment category considers general market area influences as well as a property's accessibility and visibility from a ' main thoroughfare. Differing rent levels or land values are typically good indications that a location adjustment is required. ' Sales 1, 2 and 3 are considered to have superior retail locations (adjacent to grocery anchored centers and demographics) in comparison to the subject and downward adjustments are appropriate. Sale 4 is located further north from the Minneapolis /St. ' Paul metropolitan area in an area with lower traffic counts and is considered inferior to the subject in terms of location. An upward adjustment is applied to this comparable. Sale 5 is considered generally similar location in comparison to the subject and no adjustment is required. Size With all other factors being equal, the sale price per square foot tends to decrease as building size increases. in our opinion, this reflects more potential buyers for small properties and mirrors the tendency for per -unit construction costs to decline as building size increases. A slight downward adjustment is applied to Sale 2 for smaller building size. Sale 3 ' warrants an upward adjustment for larger building size. The remaining comparables are relatively similar in size to the subject and no adjustments are necessary. MR FILE NUMBER 124 - 2010 -0293 PAGE 49 ' Integra Realty Resources r BROOKLYN CENTER STRIP RETAIL CENTER SALES COMPARISON APPROACH , Land to Building Ratio Land to building ratios impacts parking and circulation of a shopping center. The land ' to building ratio of the subject is 5.31:1 and the comparables range from 5.2:1 to 14.31:1. Based on an analysis of land to building ratios, Sales 2 and 3 require downward adjustment. Age /Condition Adjustments for age are based on the effective age differential between the comparable r sales (as of the date of sale) and the subject property as of the date of valuation. The effective age of the comparable sales is estimated after viewing or inspecting the buildings and reviewing file date on the year of original construction and any subsequent addition or major renovations. Varying degrees of upward adjustment are applied to Sales 2, 3, 4 and 5 for older age /condition. A slight downward adjustment is applied to Sale 1 for newer building age in comparison to the subject. Building Quality This adjustment category generally reflects differences between the subject and the ' comparables in quality of construction, amenities, functional utility, ceiling height or any other physical characteristics that influence sale prices. The proposed subject , property is of average to good quality construction and has a typical layout and design for a neighborhood shopping center. All of the comparables, except Sale 4, are considered to have similar building quality in comparison to. the subject's and no ' adjustments are necessary. Sale 4 is considered to have inferior building quality in comparison to the subject. Therefore, an upward adjustment is warranted. The following table summarizes the adjustments we make to the comparable sales. ' 1 1 1 r 1 1 1 FILE NUMBER 124 - 2010 -0293 PAGE 50 Integra Realty Resources , l ' BROOKLYN CENTER STRIP RETAIL CENTER SALES COMPARISON APPROACH IMPROVED SALES ADJUSTMENT GRID ' Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4 Comparable 5 Property Name Brooklyn Eden Prairie Promenade Plymouth Blaine Retail Brooklyn Park Center Strip Strip Retail Place Retail Town Center Center Retail Center Retail Center Center Center ' Address 615 66th 10165 1298 3500 2320 -2330 9310 Zane Avenue North Hennepin Promenade Pl. Vicksburg Cloud Drive Avenue North Town Rd. Lane NE City Brooklyn Eden Prairie Eagan Plymouth Blaine Brooklyn Park ' Center County Hennepin Hennepin Dakota Hennepin Anoka Hennepin State Minnesota MN MN MN MN MN Sale Date Jun -10 Sep -09 Jun -09 Mar -09 Mar -09 Sale Price $2,400,000 $1,350,000 $5,500,000 $1,845,000 $2,150,000 ' Rentable Area 10,000 12,000 6,500 26,330 12.500 11 Price per SF of Gross Leasable Area $200.00 $207.69 $208.89 $147.60 $183.21 PROPERTY RIGHTS Leased Fee Leased Fee Leased Fee Leased Fee Leased Fee % ADJUSTMENT 0% 0% 0% 0% 0% FINANCING TERMS Cash sale Cash sale Cash to seller thly payment, Cash sale % ADJUSTMENT 0% 0% 0% 0% 0% CONDITIONS OF SALE % ADJUSTMENT 0% 0% 0% 0% 0% MARKET CONDITIONS 8/20/2010 Jun -10 Sep -09 Jun -09 Mar -09 Mar -09 ANNUAL %ADJUSTMENT -2% -13% -17% -20% -20% CUMULATIVE ADJUSTED PRICE $195.30 $181.30 $173.65 $118.71 $147.22 LOCATION Superior Superior Superior Inferior Similar % ADJUSTMENT -20% -25% -25% 10% 0% SIZE Similar Superior Inferior Similar Similar % ADJUSTMENT 0% -5% 5% 0% 0% LAND TO BUILDING RATIO Similar Superior Superior Similar Similar %ADJUSTMENT 0% -10% -5% 0% 0% BUILDING QUALITY Similar Similar Similar Inferior Similar ' %ADJUSTMENT 0% 0% 0% 5% 0% AGE /CONDITION Superior Inferior Inferior Inferior Inferior % ADJUSTMENT -2% 16% 14% 2% 2% Net$ Adjustment - $42.48 - $43.97 - $19.10 $19.88 $2.58 Net % Adjustment -22% -24% -11% 17% 2% Final Adjusted Price $152.82 $137.34 $154.55 $138.59 $149.80 Overall Adjustment -24% -34% -26% -6% -18% Range of Adjusted Prices $137.34 - $154.55 Average $146.62 ' Indicated Value $145.00 VALUE INDICATION - SALES COMPARISON APPROACH We give similar weight to all of the sales and arrive at a value indication by the sales comparison approach as follows: ' VALUE INDICATION BY SALES COMPARISON Indicated Value per SF $145.00 Subject Square Feet 10, 000 Indicated Value $1,450,000 Ro u n ded $1,450,000 FILE NUMBER 124- 2010 -0293 PAGE 51 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH INCOME CAPITALIZATION APPROACH LEASED STATUS OF THE PROPERTY A rent roll for the property is shown below, based on our review of leases and the owner's rent roll. ' RENT ROLL Lease Lease Tenn Lease Contract Blended Rent PGR PGR/ ' Suite Tenant SF Start End (Mos) Type Rent/SF Rent Applied Projected SF 1 Checkers 1,800 03/01/09 02/28/19 120 Net $23.00 $23.00 Contract $41,400 $23.00 2 Regal Chiropractic 1,435 09/11/07 09/10/17 120 Net $26.00 $26.00 Contract $37,310 $26.00 3 Soleil Beauty 1,300 05/15/09 05/14/12 36 Gross $18.46 $15.39 Contract $24,000 $18.46 4 Pure Nail 1,240 02/01/10 01/31/13 36 Gross $19.35 $17.34 Blend $21,499 $17.34 5 Dollar 1,300 06/01/10 05/31/13 36 Gross $18.46 $18.46 Contract $24,000 $18.46 6 Wireless Store 1,425 06/01/10 05/31/12 24 Gross $12.63 $13.68 Blend $19 $13.68 7 Jimmy John's 1,500 02/10/10 02/09/19 108 Net $23.00 $23.00 Contract $34,500 $23.00 Total /Average• 10,000 $20.32 $202,206 $20.22 ' Vacant SF 0 0% Leased SF 10,000 100% " Average contract rent is based on leased square feet The above contract rents reflect a range from $13.68 to $26.00 per square foot with an ' average of $20.32 per square foot. However, it is noted four of the seven tenants have gross leases and remaining tenants have net leases. Blended rents are applied to Pure , Nail to reflect a fluctuating contract rent and Wireless Store which increases to $16.84 per square foot in June 2010. The following table shows the division of expense responsibilities between the owner and tenants. SUBJECT EXPENSE STRUCTURES ' Space Type Retail - End Cap Inline Space Lease Type Net Gross Owner Tenant Owner Tenant , Real Estate Taxes x x Insurance x x Common Area Maintenance x x General /Administrative x x Management x x Replacement Reserves x x The two end cap tenants have net leases similar to the structure in the above table. Three of the four inline tenants have leases written on a gross basis with the property owner responsible for all operating expenses. Regal Chiropractic is an inline tenant ' with a net lease which commenced prior to the current economic downturn. Based on conversations with brokers in the northwest submarket, most landlords continue to structure leases on a net basis, - but greater rent- discounts are required to generate ' demand. In the leased fee analysis, we have utilized the existing in -place rent structure at the ' subject. In the DCF analysis, market rent for inline space is projected using a net lease structure. TR FILE NUMBER 124- 2010 -0293 PAGE 52 Integra Realty Resources - , BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH MARKET RENT ANALYSIS Contract rents typically establish income for leased space, while market rent is the basis for estimating income for current vacant space and future speculative re- leasing of space due to expired leases. To estimate market rent, we analyze comparable rentals most relevant to the subject in terms of location, property type, size, and transaction date. Comparables used in our analysis are summarized in the following table. ' SUMMARY OF COMPARABLE RENTALS - RETAIL Lease Term Lease No. Property Information Description Tenant SF Start (Mos.) Rent/SF Type I Park Place on France Yr Bit. 2010 Confidential 1,320 10 /10 120 $20.00 Net 10700 France Avenue South Stories: 1 Bloomington GLA: 19,893 Hennepin County Parking Ratio: — MN Comments: Rent increases 10% in year 6 $20.00 per square foot TI's. Proposed retail center with original nticipated completion date of October 1, 2010. However, as of the effective date of appraisal, August 20, 2010, construction has not started. Rental rates vary from $17.00 to $19.00 per square food. 2 Marketplace West Phase I Yr Bit. 2003 Confidential 1,520 06/10 60 $13.00 Net ' 9175 & 9201 Quaday Avenue Stories: 1 Otsego GLA: 31,076 Wright County Parking Ratio: 4.6/1,000 MN ' Comments: Rent increases 3% per year. Building is 82% occupied. 3 Township Theater Shops Yr Bit. 2004 Confidential 1,537 06 /10 14 $14.00 Net 1190 County Road J Stories: 1 White Bear Township GLA: 19,110 ' Ramsey County Parking Ratio: 4.4/1,000 MN. Comments: Rate flat over term. Retail center in north metro fringe suburb is currently 52% vacant. 4 Cedar Marketplace Yr Bit. 1999 Caribou 1,600 10/09 60 $19.00 Net 14638 Cedar Avenue South Stories: I Coffee ' Apple Valley GLA: 26,729 Dakota County Parking Ratio: — MN Comments: Renewal tenant in a multi - tenant neighborhood retail center. This is an endcap space with visibility along Cedar Avenue South. Rental rates in the center range /rom $13.00 to $20.00 psr 5 Fridley Commerce Center Yr Bit 2000 Listing 5,000 Listing — $12.50 Net 201 -205 57th Avenue NE Stories: 1 Fridley GLA: 7,973 Anoka County Parking Ratio: 5.0 /1,000 MN Comments: Asking rate ranges from $10.00 to $1 5.00 per square foot. Property is located one block off l- -694 dnd University Avenue. Adjacent to Cub Foods and Home Depot. Tenants include Cash N Pawn, Papa Murphy's and Beauty Nails. 6 Park Commons Shopping Yr Bit. 1982 Listing 2,400 Listing — $22.00 Net Center 7625 -7655 Jolly Lane Stories: 1 Brooklyn Center GLA: 14,000 ' Hennepin County Parking Ratio: 8.6/1,000 MN Comments: Major tenants include Chipolte, Caribou Coffee, Jimmy Johns, Petco, and Game Stop. Building is 83% occupied. 7 Edinburgh Plaza Yr Bit. 1988 Listing 2,230 Listing — $17.00 Net 1400 85th Avenue N. Stories: 1 Brooklyn Park GLA: 18,925 Hennepin County Parking Ratio: — MN ' Comments: Located on 851h Avenue North, east of Highway 252. Major tenant is Oasis Market. FILE NUMBER 124 - 2010 -0293 PAGE 53 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ' COMPARABLE RENTALS MAP SHEIEII2NE Otsego Ra sey ' "Ham Lake ' WRIGHT ., o Andover .101 � * • "-..,,� i _* ..t: •.. 7 M4 '.T f l A N O KI A ,-;, Dayton t0; Ro ers ' g '}Coon Rapids r Lino Lake Champlin 0 p ` Blaine °„ e er Ills _`. C ni V Reshe ^nau La t 41) Circle Pines , t' Osseo �;61D Spring �. ° Lake Park- s Corcoran G Ma pl e Park I < ouncis YieW� Pleasant Wf e , ( Lt Bear 4 ` Fridley d Arde Hills S horevie w Lake ,... .o �__O.. .---� 98 4. •� argyle Lake ,+�Gr�o 1 , B ; New Vadnais � Lake ♦ - 1 Brighton Heights $ mbia fights, �` New H obbinsd' ... 88 9 C Medina Little Wa ds rystal M t l N N E R T A ° Plymout 81 St. A j hony "Roseville 38 I #i )ne La auder le ° hAapl N on Lake Gold valley f ° Mi eapoI Falcon ' R A Ad E Y ' Maxwell Heights 08 Bay ayxata i 1;51,1 n n `• :.�„ St Louis St. Paul L . 15 101 Parka 25 4' r t9 Minnetonka °O Lake Ca arrn 4 `h, Dee aven' a ° ° fake arriet Pigs Ey �x �opkins Edina Cresb� ° � Lake " West St ° Excelsior Lake -, ' Paul '� Srpo6%Wood..... f ee i 77 Ric field M data Heights ° keMinrtewashta BryantL e2t2. ° So R Lake _..' Chanhassen _ _ z de`,Prairi l Lon 312 ver 66 =- rove i E. • . CARVE she: '�, er9ht Bloomin an f gt Eagan -- ,• .r.• ms s." ` Fisher' ke s 69 Shak ask opee 13. S C O T T ° .Burns le ik Apple valley Rosemount 189a {` D A K Prior Lake Co ri hit ® and P 1988 -2009 Microsoft &r oration and/or its su • Iieis. A11 rights reserved. TR FILE NUMBER 124 2010 -0293 PAGE 54 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ' Rental Analysis Factors For this analysis, we select rent per square foot of gross leasable area as the appropriate unit of comparison. The following elements of comparison are considered in our analysis of the comparable rentals. RENTAL ANALYSIS FACTORS Expense Structure Division of expense responsibilities between landlord and tenants. Conditions of Lease Extraordinary motivations of either landlord or tenant to complete the transaction. ' Market Conditions Changes in the economic environment over time that affect the appreciation and depreciation of real estate. ' Location Market or submarket area influences on rent; surrounding land use influences. Access/Exposure Convenience to transportation facilities; ease of site access; ' visibility from main thoroughfares; traffic counts. Size Difference in rental rates that is often attributable to variation in sizes of leased space. ' Building Quality Construction quality, amenities, market appeal, functional utility. Age /Condition Effective age; physical condition. ' Economic Variations in rental rate attributable to such factors as free rent or Characteristics other concessions, pattern of rent changes over lease term, or tenant improvement allowances. Analysis of Comparable Rentals ' The comparable rentals are compared to the subject and adjusted to account for material differences that affect market rental value. The following table summarizes our analysis of each comparable. FILE NUMBER 124 - 2010 -0293 PAGE 55 ' Integra Rea@y Resources . BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ' RENTAL ANALYSIS SUMMARY - RETAIL , Overall Property Name; Leased Comparison No. Tenant SF Rent/SF to Subject Comments 1 Park Place on France 1,320 $20.00 Superior Downward adjustment for ' Confidential location and age. 2 Marketplace West Phase I 1,520 $13.00 Inferior Upward adjustments for Confidential building age and inferior ' location. 3 Township Theater Shops 1,537 $14.00 Inferior Upward adjustment for inferior Confidential location. 4 Cedar Marketplace 1,600 $19.00 Similar Downward adjustment for ' Caribou Coffee location. 5 Fridley Commerce Center 5,000 $12.50 Inferior Upward adjustment for building Listing age. Downward adjustment for asking status. 6 Park Commons Shopping 2,400 $22.00 Similar Downward adjustment to reflect Center current asking status. Listing , 7 Edinburgh Plaza 2,230 $17.00 Similar Similar location. Downward Listing adjustment to reflect asking status is offset by older building ' age. Recent Subject Leases Recent subject leasing activity is summarized in the table below. RECENT SUBJECT LEASES ' Term Initial Lease Suite Tenant SF Type Lease Start (Mos.) Rent/SF Type. 5 Dollar 1,300 New 06/01/10 36 $18.46 Gross ' 6 Wireless Store 1,425 New 06/01/10 24 $12.63 Gross 7 Jimmy John's 1,500 New 02/10/10 108 $23.00 Net 4 Pure Nail 1,240 New 02/01/10 36 $17.34 Gross FILE NUMBER 124 - 2010 -0293 PAGE 66 Integra Realty Resources ' BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ' Market Rent Conclusion For purposes of this analysis, we have divided the tenant spaces into two categories as shown in the following table: ' LEASED STATUS BY SPACE TYPE Space Type SF Leased Vacant % Leased Retail - End Cap 3,300 3,300 0 100% Inline Space 6,700 6,700 0 100% Total 10,000 10,000 0 100% ' The two end caps are occupied by Checkers and Jimmy Johns and command a higher rent than inline space. ' Based on the preceding analysis of comparable rentals and recent leases at the subject, we conclude market lease terms for the subject as follows. 1 CONCLUDED MARKET LEASE TERMS Market Lease Rent/ Rent Lease Term TUSF TI /SF ' Space Type SF SF/Yr Escal. Type (Mos.) New Renew Retail - End Cap 3,300 $22.00 3% annually Net 60 $10.00 $3.00 Inline Space 6, $ 12. 00 3% ann Net 60 $7.00 $2.00 ' STABILIZED INCOME AND EXPENSE ESTIMATE Potential Gross Rent ' Potential gross rent is estimated based on contract rents from leases in place plus market rents for vacant space. Income is projected for the 12 -month period following the effective date of the appraisal. Expense Reimbursements Net Lease - (Checkers, Regal Chiropractic, and Jimmy John's): Reimbursement income is based on the terms of existing leases that require tenants to reimburse the owner for all operating expenses, except replacement reserves. Expense ' reimbursements are calculated on a lease -by -lease basis. Gross Lease - (Soleil Beauty, Pure Nail, Dollar, Wireless Store): Tenants with gross ' leases are not responsible for expense reimbursements. Vacancy & Collection Loss ' As discussed in the Market Analysis, the current average submarket vacancy rate for neighborhood centers is 9.6% and the median is 4.3 %. Vacancy rates among surveyed directly competitive properties range from 11.8% to 73.8 %, with an average of about 28.6 %. Stabilized vacancy and collection loss is estimated at 10.0 %. This estimate considers the submarket vacancy rate, vacancy rates at competing properties, and the credit risk of the subject's tenants. TR FILE NUMBER 124 -2010 -0293 PAGE 57 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ' Expenses Operating expenses are estimated based on the operating history of the subject, expense , data from comparable properties, and industry benchmarks, as summarized in the following tables. OPERATING HISTORY & PROJECTIONS Actual Actual Actual Annualized Budget IRR 2007 2008 2009 2010 2010 Projection ' INCOME Base Rent $106,847 $408,612 $145,473 $200,002 $0 $202,206 Expense Reimbursements $0 $0 $0 $0 $0 $41,776 POTENTIAL GROSS INCOME* $106,847 $408,612 $145,473 $200,002 $0 $243,982 , Vacancy & Collection Loss a7 10.0% $0 $0 $0 $0 $0 - $24,398 EFFECTIVE GROSS INCOME $106,847 $408,612 $145,473 $200,002 $0 $219,584 EXPENSES Real Estate Taxes $14,207 $24,440 $51,422 $41,695 $48,200 $48,645 ' Insurance $3,612 $3,353 $3,230 $5,503 $3,300 $3,300 Common Area Maintenance $17,724 $34,304 $27,311 $19,121 $19,750 $25,000 General/Administrative $23,010 $1,826 $3,712 $183 $2,000 $2,500 ' Management $0 $0 $0 $0 $0 $8,783 Replacement Reserves $0 $0 $0 $0 $0 $1,000 TOTAL EXPEN $ 58,553 $ 63,92 3 $ 85,675 $ 66,502 $73,250 $89,229 NET OPERATING INCOME $48,294 $344,689 $59,798 $133,500 - $73,250 $130,356 , * IRR projected income is the total potential income attributable to the property before deduction of vacancy and collection loss. Historical income is the actual income that has been collected by the property owner. EXPENSE ANALYSIS PER SQUARE FOOT ' Comp Data* Subject Comp 1 Comp 2 Comp 3 ULI Historical and Projected Expenses Year Built 1990 2003 2004 2006 ' SF 25,000 32,000 11,602 10,000 Type Actual Actual Actual Actual Actual Actual Annualized Budget IRR Year 2008 2009 2009 2008 2007 2008 2009 2010 2010 Projection Real Estate Taxes $4.19 $4.18 $7.34 $1.65 $1.42 _ $2.44 $5.14 $4.17 $4.82 $4.86 ' Insurance $0.21 $0.31 $0.36 $0.19 $0.36 $0.34 $032 $0.55 $0.33 $0.33 Common Area Maintenance $2.22 $2.66 $1.63 $1.28 $1.77 $3.43 $2.73 $1.91 $1.98 $2.50 General /Administrative $0.18 $0.52 $0.82 $0.17 $2.30 $0.18 $0.37 $0.02 $0.20 $0.25 Management $1.08 $0.81 $0.00 $0.54 $0.00 $0.00 $0.00 $0.00 $0.00 $0.88 Replacement Reserves $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.10 , Total $7.88 $8.48 $10.15 $3.83 $5.86 $6.39 $8.57 $6.65 $7.33 $8.92 *Comp 1: Neighborhood Center, Eagan, MN Comp 2: Neighborhood Center, Otsego, MN Comp 3: Neighborhood Center, Eagan, MN , Industry Benchmark: ULI Dollars & Cents of Shopping Centers 2008, US Neighborhood Shopping Centers in the Midwest CAPITALIZATION RATE SELECTION A capitalization rate is used to convert net income into an indication of value. Selection ' of an appropriate capitalization rate considers the future income pattern of the property and investment risk associated with ownership. We use the following methods to derive a capitalization rate for the subject: analysis of comparable sales and review of national investor surveys. Analysis of Comparable Sales ' Capitalization rates derived from comparable sales are shown in the following table. MR R FILE NUMBER 124 - 2010 -0293 PAGE 58 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ' CAPITALIZATION RATE COMPARABLES Gross Effective Year Sale Leasable Price Overall No. Property Name Built Date Area /SF Cap Rate ' 1 Eden Prairie Strip Retail Center 2007 Jun -10 12,000 $200.00 9.50% 2 Promenade Place Retail Center 1996 Sep -09 6,500 $207.69 10.25% 3 Plymouth Town Center 1997 Jun -09 26,330 $208.89 8.75% ' 4 Blaine Retail Center 2004 Mar -09 12,500 $147.60 9.11% 5 B Park Retail C 2004 Mar -09 11,735 $183.21 8.14% Average (Mean) Cap Rate: 9.15% ' Based on this information a capitalization rate within a range of 9.0 % to 10.0% could P g be expected for the subject. National Investor Surveys Data pertaining to investment grade properties from the Korpacz, ACLI, and ' Viewpoint surveys are summarized below. CAPITALIZATION RATE SURVEYS- RETAIL PROPERTIES ' IRR- Viewpoint IRR- Viewpoint Korpacz Korpaez ACLI Year End 2009 Year End 2009 2Q -2010 2Q -2010 1Q -2010 National National Natl Strip Shopping National Power National Neighborhood Strip Community Center Center Center Retail Range 7.5 %- 10.5% 7.0 % -9.8% 7.00 % - 11.40% 7.5% -10.0% NA Average 8.8% 8.4 8.38% 8.70% 7.9% Source: IRR - Viewpoint 2010; Korpacz Real Estate Investor Survey; American Council of Life Insurers Investment Bulletin. CAPITALIZATION RATE TRENDS - RETAIL PROPERTIE 8.70 0 • - - -- -- --- 8.20 A - a 7.70 7.20 6.70 3Q -08 4Q-08 IQ -09 2Q -09 3Q -09 4Q-09 IQ -10 2Q -10 -t- -STRIP 7.33 7.49 7.63 7.91 8.41 8.53 1 8.49 8.38 - i - PWR 7.17 7.57 7.98 8.04 8.63 8.60 1 8.55 8.70 -fir ACLI 7.00 7.30 7.70 8.40 8.30 8.20 1 7.90 Quarter/Year STRIP - Korpacz Real Estate Investor Survey - National Strip Shopping Center Market ' PWR - Korpacz Real Estate Investor-Survey - National Power Center Market ACLI - American Council oftife Insurers Investment Bulletin - Retail Properties FILE NUMBER 124 - 2010 -0293 PAGE 59 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH The Korpacz survey indicates that a going -in capitalization rate for national strip shopping center properties ranges from 7.0% to 11.40% and averages 8.38 %. We , would expect the rate appropriate to the subject to be above the average rate in the survey data because of the short term lease exposure and below average retail location. Accordingly, based on the survey data, a capitalization rate within a range of 8.75% to ' 9.75% could be expected for the subject. The following chart, published by Real Capital Analytics for the Second Quarter 2010, , indicates that capitalization rates averaged 8.4% for unanchored retail strip centers with a median of 8.1 %, up 85 basis points over the past 12 months. The average sale price was $120 per square foot, or 40% less than the previous 12 months. ' With only three sales considered in the Midwest analysis, less emphasis is placed on regional data. The average capitalization rate for unanchored retail strips in the Midwest is lower at 7.0% and the average sale price is lower at $53 per square foot. ' past 12 months s m a all cling* cling"' cling cling volume ($ mil), $555 - 56% $13,970 38% $114, pr operties sold,, ry 62 - 640% 962 3% 1 024��� � �# avg $Isq ft $120 - 46 °. $142 -16 % $141 top quartile $2901 -20% 5384 -17% $378 median $ /un;t $192 -21% °r $176 - $180 bottom quar� 38% S103 - 11% $103 � a wtd avg cap rate; 8. 155 8.4 % 122 84 % tom top quar�le 7.? 70 7.5 ° r`r. 100 ! � %sue median $ /unit' 8.1 %° 85 8.0% 80 8.0% bottom q€artileft u.0% 148 8.8% 98 % ask achieved 90% 90% 90 % °t° eking offerings - 7I4ro -38 ° l0 -42% °percent or firs ch3rga vs. rrior'12 coos. ' past 12 months U Strips by Region* Southeast $231 -4 20 5957 $103 $15 9.0% 8.5% 8.0% West $179.2 23 $422 $136 $55 9.0% 7.3% 6.0% Southwest $77.8 9 5341 $207 $61 10.8 9.4% 8.3% Northeast $40.3 6 $495 $164 $63 7.9% 7.9% 7.9% ' Midwest $19.5 3 $84 $53 $40 7.0% 7.0% 7.0 Mad- Atlantic . .5 °; 1: 5147 $147 $147 Unanchored Ships Total J $554 6 ` 62 5957 $120 $15 10.8% 8.2 %n 6.0% ' snot including all portfolio properties FILE NUMBER 124 - 2010 -0293 PAGE 60 Integra Realty Resources , BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH Capitalization Rate Conclusion ' To conclude a capitalization rate, we consider each of the following investment risk factors to determine its impact on the capitalization rate. The direction of each arrow in ' the table below indicates our judgment of an upward, downward, or neutral impact of each factor. ' Impact on Risk Factor Issues Rate Income Characteristics Rollover risk, escalation pattern, above/below T market rents, major tenant credit strength. Competitive Market Position Construction quality, appeal, condition, H effective age, functional utility. 1 Location Market area demographics and life cycle H trends; proximity issues; access and support ' services. Market Vacancy rates and trends; rental rate trends; T supply and demand. Highest & Best Use Upside potential from redevelopment, H adaptation, expansion. Overall Impact T Accordingly, we conclude a capitalization rate as follows: ' CAPITALIZATION RATE CONCLUSION Going -In Capitalization Rate 9.50% DIRECT CAPITALIZATION ANALYSIS ' Net operating income is divided by the capitalization rate to indicate the stabilized value of the subject. Valuation of the subject by direct capitalization is shown below. FILE NUMBER 124 - 2010 -0293 PAGE 61 '' Integra Reafty Resources BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ' DIRECT CAPITALIZATION ANALYSIS Rent SF Type Applied $ /SF Annual $ /SF Bldg. INCOME Base Rent Checkers 1,800 Retail - End Cap Contract $23.00 $41,400 — ' Regal Chiropractic 1,435 Inline Space Contract $26.00 $37,310 — Soleil Beauty 1,300 Inline Space Contract $18.46 $24,000 — Pure Nail 1,240 Inline Space Blend $17.34 $21,499 — Dollar 1,300 Inline Space Contract $18.46 $24,000 — Wireless Store 1,425 Inline Space Blend $13.68 $19,498 — Jimmy John's 1,500 R - End Cap Contract $23.00 $34,500 — Potential Gross Rent 10,000 $202,206 $20.22 Expense Reimb $41,776 $4.18 Potential Gross Income $243,982 $24.40 Vacancy & Co ll e c t i o n Loss 10.00% - $24,398 -$2.44 Effective Gross Income 2 $219,584 $21.96 EXPENSES Real Estate Taxes $48,645 $4.86 Insurance $3,300 $0.33 Common Area Maintenance $25,000 $2.50 General /Administrative $2,500 $0.25 Management 4.00% $8,783 $0.88 Replace Reserves $1,000 $0.10 Total Expenses $89,229 $8.92 NET OPERATING INCOME $130,356 $13.04 Capitalization Rate 9.50% Indicated Value $1,372,163 $137.22 Rounded $1,370,000 $137.00 DISCOUNTED CASH FLOW ANALYSIS In addition to direct capitalization, we also perform a discounted cash flow analysis. Basic estimates and assumptions utilized in our analysis are summarized in the following tables. FILE NUMBER 124 - 2010 -0293 PAGE 62 Integra RealW Resources ' BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ' DISCOUNTED CASH FLOW ANALYSIS GENERAL ASSUMPTIONS Cash Flow Software ' Program Argus Version 14 Period of Analysis Analysis Start Date 09/01/10 Holding Period (Yrs) 10 ' Discount Rate and Reversion Can Rate Discount Rate 10.50% Reversion Capitalization Rate 9.50% Market Rent Growth Rate Year 2 3.0% Year 3 3.0% Year 4 3.0% ' Year 5 & after 3.0% Other Growth Rates General Expenses 3.0% Real Estate Tax 3.0% ' Absorption of Vacant Space Total Gross Leasable Area (SF) 10,000 Vacant SF 0 ' # Months to Absorb N/A Collection Loss - Holding Period Collection Loss Included with general vacancy Turnover Vacancy - Holding Period Argus General Vacancy Used? Yes a Argus General Vacancy 10% Argus General Vacancy Convention Applied to Income Net of Turnover Vacancy ' Capital Expenditures Capital Budget Deducted per Capital Budget Summary Reserves (SF) $0.10 Reserves Deducted Below NOI? Yes ' Reversion Analysis Factors Vacancy /Collection Loss Treatment Collection Loss Included with general vacancy General Vacancy 10.0% Vacancy Gross -up 0.0% Selling Expenses 2.0% Adjustments To Sale Price None t Presented below are other.market leasing assumptions utilized in the discounted cash flow analysis. SPECULATIVE RENEWAL ASSUMPTIONS Mos. ' Vacant Wtd. Avg. Renewal LC- LC- LC- Btwn. Down- Space Type Probability TI- Weighted New Renewal Weighted Leases time Retail - End Cap 70% $5.10 $5.00 $2.50 $3.25 3 .1 Inline Space 70% $3.50 $5.00 $2.50 $3.25 3 1 1 FILE NUMBER 124 -2010 -0293 PAGE 63 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ' DISCOUNT RATE AND REVERSION CAPITALIZATION RATE SELECTION Discount Rate ' Data from national investor surveys that we consider in selecting discount and reversion capitalization rates is shown below. INVESTOR SURVEYS - RETAIL PROPERTIES IRR- Viewpoint IRR- Viewpoint Korpacz Korpacz Year End 2009 Year End 2009 2Q -2010 2Q -2010 National National National Strip National Neighborhood Community Shopping Power Strip Center Center Market Center Market DISCOUNT RATE Range 8.8% -13.0% 8.3% -12.0% 7.00 % - 12.50% 8.50 % - 12.00% ' Average 10.10% 9.90% 9.46% 9.90% REVERSION CAPITALIZATION RATE Range 8.0% -11.0% 8.2% -11.5% 7.00 % - 12.00% 7.50 % - 10.00% Average 9.25% 9.04% 8.63% 8.65% MARKET RENT GROWTH RATE Range - 15.0 % -2.5% - 13.0 % -2.5% 0.00 % -3.00% (10.00 %) -3.00% , Averag -2.21% -1.84% 0.50% -0.70% EXPENSE GROWTH RATE Range 0.0 % -3.0% 0.0 % -3.0% 1.0 % -4.0% 2.00% -3.00% ' Average 2.58% 2.57% 2.89% 2.90% Source: IRR- Viewpoint 2010, published by Integra Realty Resources; Korpacz Real Estate Investor Survey. RETAIL PROPERTY DISCOUNT RATE TRENDS to d 9.6 9 4 W 9.2 a �• ,� 2 A 8.4 $. 8 3Q -08 4Q -08 IQ -09 2Q-09 3Q -09 4Q-09 IQ -10 2Q -10 -1 -STRIP 8.39 8.49 8.59 8.98 9.38 9.44 9.58 9.46 - i - PWR 8.39 8.95 9.52 9.38 9.92 10.08 10.05 9.9 Quarter/Year STRIP - Korpacz Real Estate Investor Survey - National Strip Shopping Center Market. -- PWR - Korpacz Real Estate Investor Survey - National Power CenterMarkei. The Korpacz survey indicates that discount rates for National Strip Shopping Center properties range from 7.0 to 12.5% and average 9.46 %. Rates have moved upward over the past year. Considering the subject's short term lease expiration risk, we conclude that a discount rate of 10.5% is appropriate for the analysis. FILE NUMBER 124 - 2010 -0293 PAGE 64 Integra Realty Resources ' BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ' Reversion Capitalization Rate The Korpacz survey indicates a range of 7.0% to 12.0 %, with an average of 8.63 %, for the National Strip Shopping Center property type. In general, reversion rates are typically 25 to 100 basis points greater than going -in rates. We conclude a reversion capitalization rate of 9.50 %. This rate is similar to our concluded stabilized going -in rate of 9.50 %, which appears to be within the range of market figures. VALUE INDICATION — DISCOUNTED CASH FLOW ANALYSIS The value indication produced by the discounted cash flow analysis is as follows: DISCOUNTED CASH FLOW ANALYSIS INDICATED VALUE Appraisal Premise Indicated Value Market Value As Is $1,400,000 �R FILE NUMBER 124 -2010 -0293 PAGE 65 ,' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ARGUS CASH FLOW TABLE Schedule Of Prospective Cash Flow In Inflated Dollars for the Fiscal Year Beginning 911/2010 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Potential Gross Revenue Base Rental Revenue $202,210 $202,470 $190,468 $186,558 $191,908 $193,158 $193,158 $173,296 $176,588 $179,162 $179,162 Absorption & Turnover Vacancy (2,807) (2,695) (1,765) (7,664) Scheduled Base Rental Revenue 202,210 199,663 187,773 186,558 191,908 193,158 193,158 171,531 168,924 179,162 179,162 Expense Reimbursement Revenue Real Estate Taxes 23,038 26,576 42,867 53,167 54,760 56,404 58,095 59,137 59,922 63,483 65,387 Insurance 1,563 1,804 2,907 3,607 3,715 3,825 3,941 4,012 4,065 4,307 4,436 Common Area Maintenance 11,840 13,658 22,031 27,324 28,144 28,987 29,856 30,392 30,796 32,626 33,606 General/Administrative 1,184 1,367 2,203 2,732 2,815 2,899 2,984 3,039 3,080 3,262 3,361 Management 4,174 4,831 7,980 10,153 10,497 10,652 10,524 10,231 9,985 10,479 10,678 Total Reimbursement Revenue 41,799 48,236 77,988 96,983 99,931 102,767 105,400 106,811 107,848 114,157 117,468 Total Potential Gross Revenue 244,009 247,899 265,761 283,541 291,839 295,925 298,558 278,342 276,772 293,319 296,630 General Vacancy (24,401) (22,264) (24,151) (28,354) (29,184) (29,592) (29,856) (26,246) (20,780) (29,332) (29,663) Effective Gross Revenue 219,608 225,635 241,610 255,187 262,655 266,333 268,702 252,096 255,992 263,987 266,967 Operating Expenses Real Estate Taxes 48,645 50,104 51,607 53,156 54,750 56,393 58,085 59,827 61,622 63,471 65,375 Insurance 3,300 3,399 3,501 3,606 3,714 3,826 3,940 4,059 4,180 4,306 4,435 Common Area Maintenance 25,000 25,750 26,523 27,318 28,138 28,982 29,851 30,747 31,669 32,619 33,598 General /Administrative 2,500 2,575 2,652 2,732 2,814 2,898 2,985 3,075 3,167 3,262 3,360 Management 8,784 9,025 9,664 10,207 10,506 10,653 10,748 10,084 10,240 10,559 10,679 Replacement Reserves 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267 1,305 1,344 Total Operating Expenses 89,229 91,883 95,008 98,112 101,048 103,911 106,803 109,022 112,145 115,522 118,791 Net Operating Income 130,379 133,752 146,602 157,075 161,607 162,422 161,899 143,074 143,847 148,465 148,176 Leasing & Capital Costs Tenant Improvements 9,824 9,431 6,177 21,320 Leasing Commissions 9,122 8,757 5,736 13,587 Total Leasing & Capital Costs 18,946 18,188 11,913 34,907 Cash Flow Before Debt Service $130,379 $114,806 $128,414 $157,Q75 $161,607 $162,422 $161,899 $131,161 $108,940 $148,465 $148,176 & Taxes == -------- ----- - - - - -- ----- - - - - -- - - - - -- -- FILE NUMBER 124- 2010 -0293 PAGE 66 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER INCOME CAPITALIZATION APPROACH ARGUS PRESENT VALUE SCHEDULE Prospective Present Value Cash Flow Before Debt Service plus Property Resale Discounted Annually (Endpoint on Cash Flow & Resale) over a 10 -Year Period ' For the P.V. of P.V. of P.V. of P.V. of P.V. of Analysis. Year Annual Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Period Ending Cash Flow @ 9.50% @ 10.00% @ 10.50% @ 11.00% @ 11.50% ' Year 1 Aug -2011 $130,379 $119,068 $118,526 $117,990 $117,459 $116,932 Year 2 Aug -2012 114,806 95,749 94,881 94,024 93,179 92,345 Year 3 Aug -2013 128,414 97,807 96,480 95,176 93,895 92,638 Year 4 Aug -2014 157,075 109,257 107,284 105,356 103,470 101,626 Year 5 Aug -2015 161,607 102,658 100,345 98,095 95,906 93,775 Year 6 Aug -2016 162,422 94,223 91,683 89,222 86,837 84,527 Year 7 Aug -2017 161,899 85,772 83,080 80,484 77,980 75,565 Year 8 Aug -2018 131,161 63,459 61,188 59,007 56,915 54,904 Year 9 Aug -2019 108,940 48,135 46,201 44,353 42,587 40,899 Year 10 Aug -2020 148,465 59,908 57,239 54,702 52,287 49,990 Total Cash Flow 1,405,168 876,036 856,907 838,409 820,515 803,201 Property Resale @ 9.50% Cap 1,528,552 616,792 589,323 563,1 93 538,332 514,673 Total Property Present Value $1,492,828 $1,446,230 $1,401,602 $1,358,847 $1,317,874 ' Rounded to Thousands $1,493,000 $1,446,000 $1,402,000 $1,359,000 $1,318,000 Per SgFt 149.28 144.62 140.16 135.88 131.79 VALUE INDICATION - INCOME CAPITALIZATION APPROACH ' The income capitalization approach results in the following value indications. INCOME CAPITALIZATION APPROACH ' INDICATED VALUE Direct Capitalization $1,370,000 Discounted Cash Flow $1, 400,000 Reconciled Value $1,400,000 $ /SF $140.00 ' The discounted cash flow analysis is given greatest weight since it better accounts for the impact of an irregular cash flow pattern on value, and is the method most typically relied upon by investors in this property type. MR FILE NUMBER 124 -2010 -0293 PAGE 67 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER RECONCILIATION AND CONCLUSION OF VALUE , RECONCILIATION AND CONCLUSION OF VALUE The values indicated by our analyses are as follows: SUMMARY OF VALUE INDICATIONS ' Cost Approach $1,430,000 Sales Comparison Approach $1,450,000 Income Capitalization Approach $1,400,000 Reconciled $1,400,000 i The income capitalization approach is given the greatest weight because it is the most ' reliable valuation method for the subject. The sales comparison approach and cost approach are given less weight because they do not directly consider the income characteristics of the property. Accordingly, our value opinion follows. ' VALUE CONCLUSION Appraisal Premise Interest Appraised Date of Value Value Conclusion , Market Value A Is Leased Fee August 20, 2010 $1,400,000 The opinions of value expressed in this report are based on estimates and forecasts that are prospective in nature and subject to considerable risk and uncertainty. Events may occur ' that could cause the performance of the property to differ materially from our estimates, such as changes in the economy, interest rates, capitalization rates, financial strength of tenants, and behavior of investors, lenders, and consumers. Additionally, our opinions and ' forecasts are based partly on data obtained from interviews and third party sources, which are not always completely reliable. Although we are of the opinion that our findings are reasonable based on available evidence, we are not responsible for the effects of future ' occurrences that cannot be reasonably foreseen at this time. It is noted that current financial and real estate markets are in a state of instability and ' there are limited transactions that provide reliable evidence of current market value. There is not a consensus of market participants concerning the duration and ultimate severity of the current economic downturn. We have analyzed, available data and have applied ' adjustments that we consider reasonable in light of current uncertainties; however, we caution the users of this appraisal that the value conclusion reported herein may have a lesser degree of reliability than it would in a more normal market. ' EXPOSURE AND MARKETING TIMES Our estimates of exposure and marketing times are as follows: ' EXPOSURE TIME AND MARKETING , PERIOD. Exposure Time (Months) 9 to 12 Marketing Period (Months) 9 to 12 r FILE NUMBER 124 - 2010 -0293 PAGE 68 Integra Realty Resources ' BROOKLYN CENTER STRIP RETAIL CENTER CERTIFICATION ' CERTIFICATION We certify that, to the best of our knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions. 1 3. We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. ' 4. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 5. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. ' 6. 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. ' 7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal practice. ' 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. Mitchell Simonson made a personal inspection of the property that is the subject of this report. Michael F. Amundson, MAI, CCIM, MRICS has personally inspected ' the subject. 11. No one provided significant real property appraisal assistance to the persons ' signing this certification. 12. We have not performed a previous appraisal of the subject property within the 3 year period immediately preceding acceptance of this appraisal assignment. 13. We have experience in appraising properties similar to the subject and are in p pP g p P J compliance with the Competency Rule of USPAP. FILE NUMBER 124 - 2010 -0293 PAGE 69 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER CERTIFICATION 14. As of the date of this report, Michael F. Amundson, MAI, CCIM, MRICS has completed the continuing education program of the Appraisal Institute. ' Mitchell Simonson Michael F. Amundson, MAI, CCIM, MRICS Analyst Principal Certified General Real Property Appraiser Certified General Real Property Appraiser , Minnesota Certificate # 20573344 Minnesota Certificate # 4000884 FILE NUMBER 124- 2010 -0293 PAGE 70 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER ASSUMPTIONS AND LIMITING CONDITIONS ' ASSUMPTIONS AND LIMITING CONDITIONS This appraisal is based on the following assumptions, except as otherwise noted in the ' report. 1. The title is marketable and free and clear of all liens, encumbrances, encroachments, easements and restrictions. The property is under responsible ownership and competent management and is available for its highest and best use. 2. There are no existing judgments or pending or threatened litigation that could affect ' the value of the property. 3. There are no hidden or undisclosed conditions of the land or of the improvements that would render the property more or less valuable. Furthermore, there is no asbestos in the property. 4. The revenue stamps placed on any deed referenced herein to indicate the sale price ' are in correct relation to the actual dollar amount of the transaction. 5. The property is in compliance with all applicable building, environmental, zoning, ' and other federal, state and local laws, regulations and codes. 6. The information furnished by others is believed to be reliable, but no warranty is given for its accuracy. ' This appraisal is subject to the following limiting conditions, except as otherwise noted in the report. ' I. An appraisal is inherently subjective and represents our opinion as to the value of the property appraised. 2. The conclusions stated in our appraisal apply only as of the effective date of the appraisal, and no representation is made as to the effect of subsequent events. 3. No changes in any federal, state or local laws, regulations or codes (including, '. without limitation, the Internal Revenue Code) are anticipated. 4. No environmental impact studies were either requested or made in conjunction with this appraisal, and we reserve the right to revise or rescind any of the value opinions ' based upon any subsequent environmental impact studies. If any environmental impact statement is required by law, the appraisal assumes that such statement will be favorable and will be approved by the appropriate regulatory bodies. ' 5. Unless otherwise agreed to in writing, we are not required to give testimony, respond to any subpoena or attend any court, governmental or other hearing with reference to ' the property without compensation relative to such additional employment. 6. We have made no survey of the property and assume no responsibility in connection with such matters. Any sketch or survey of the property included in this report is for ' illustrative purposes only and should not be considered to be scaled accurately for size. The appraisal covers the property as described in this report, and the areas and dimensions set forth are assumed to be correct. FILE NUMBER 124 -2010 -0293 PAGE 71 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER ASSUMPTIONS AND LIMITING CONDITIONS ' 7. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any, and we have assumed that the property is not subject to surface entry for the ' exploration or removal of such materials, unless otherwise noted in our appraisal. 8. We accept no responsibility for considerations requiring expertise in other fields. , Such considerations include, but are not limited to, legal descriptions and other legal matters such as legal title, geologic considerations such as soils and seismic stability, and civil, mechanical, electrical, structural and other engineering and environmental matters. t 9. The distribution of the total valuation in the report between land and improvements applies only under the reported highest and best use of the property. The allocations ' of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. The appraisal report shall be considered only in its entirety. No part of the appraisal report shall be utilized separately or out of context. 10. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or any reference to the Appraisal Institute) shall , be disseminated through advertising media, public relations media, news media or an other means of communication (including without limitation prospectuses, y mumcatlon ( lud g p p , private offering memoranda and other offering material provided to prospective ' investors) without the prior written consent of the person signing the report. 11. Information, estimates and opinions contained in the report; obtained from third -parry sources are assumed to be reliable and have not been independently verified. , 12. Any income and expense estimates contained in the appraisal report are used only for the purpose of estimating value and do not constitute predictions of future operating , results. 13. If the property is subject to one or more leases, any estimate of residual value contained in the appraisal may be particularly affected by significant changes in the condition of the economy, of the real estate industry, or of the appraised property at ' the time these leases expire or otherwise terminate. 14. No consideration has been given to personal property located on the premises or to the cost of moving or relocating such personal property; only the real property has been considered. 15. The current value stated in our e cu a purchasing power of the dollar is the basis for the va t ' p p appraisal; we have assumed that no extreme fluctuations in economic cycles will occur. 16. The value found herein is subject to these and to any other assumptions or conditions set forth in the body of this report but which may have been omitted from this list of Assumptions and Limiting Conditions. P g 17. The analyses contained in the report necessarily incorporate numerous estimates and assumptions regarding property performance, general and local business and economic conditions, the absence of material changes in the competitive environment ' and other matters. Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual jm FILE NUMBER 124 - 2010 -0293 PAGE 72 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER ASSUMPTIONS AND LIMITING CONDITIONS results achieved during the period covered by our analysis will vary from our ' estimates, and the variations may be material. 18. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We ' have not made a specific survey or analysis of the property to determine whether the physical aspects of the improvements meet the ADA accessibility guidelines. We claim no expertise in ADA issues, and render no opinion regarding compliance of the ' subject with ADA regulations. Inasmuch as compliance matches each owner's financial ability with the cost to cure the non - conforming physical characteristics of a property, a specific study of both the owner's financial ability and the cost to cure any deficiencies would be needed for the Department of Justice to determine compliance. ' 19. The appraisal report is prepared for the exclusive benefit of the Client, its subsidiaries and/or affiliates. It may not be used or relied upon by any other party. All parties who use or rely upon any information in the report without our written consent do so at their own risk. 20. No studies have been provided to us indicating the presence or absence of hazardous materials on the subject property or in the improvements, and our valuation is predicated upon the assumption that the subject property is free and clear of any environment hazards including, without limitation, hazardous wastes, toxic ' substances and mold. No representations or warranties are made regarding the environmental condition of the subject property and the person signing the report shall not be responsible for any such environmental conditions that do exist or for any ' engineering or testing that might be required to discover whether such conditions exist. Because we are not experts in the field of environmental conditions, the appraisal report cannot be considered as an environmental assessment of the subject ' property. 21. The person signing the report may have reviewed available flood maps and may have noted in the appraisal report whether the subject property is located in an identified ' Special Flood Hazard Area: We are not qualified to detect such areas and therefore do not guarantee such determinations. The presence of flood plain areas and/or wetlands may affect the value of the property, and the value conclusion is predicated on the ' assumption that wetlands are non - existent or minimal. 22. Integra Realty Resources Minneapolis /St. Paul is not a building or environmental ' inspector. Integra Minneapolis /St. Paul does not guarantee that the subject property is free of defects or environmental problems. Mold may be present in the subject property and a professional inspection is recommended. ' 23. The appraisal report and value conclusion for an appraisal assumes the satisfactory completion of construction, repairs or alterations in a workmanlike manner. 24. It is expressly acknowledged that in any action which may be brought against Integra ' Realty Resources — Minneapolis /St. Paul, Integra Realty Resources, Inc. or their respective officers, owners, managers, directors, agents, subcontractors or employees (the "Integra Parties "), arising out of, relating to, or in any way pertaining to this ' engagement, the appraisal reports, or any estimates or information contained therein, the Integra Parties shall not be responsible or liable for an incidental or consequential damages or losses, unless the appraisal was fraudulent or prepared with gross FILE NUMBER 124 -2010 -0293 PAGE 73 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER ASSUMPTIONS AND LIMITING CONDITIONS negligence. It is further acknowledged that the collective liability of the Integra Parties in any such action shall not exceed the fees paid for the preparation of the ' appraisal report unless the appraisal was fraudulent or prepared with gross negligence. Finally, it is acknowledged that the fees charged herein are in reliance upon the foregoing limitations of liability. ' 25. Integra Realty Resources — Minneapolis /St. Paul, an independently owned and operated company, has prepared the appraisal for the specific purpose stated elsewhere in the report. The intended use of the appraisal is stated in the General ' Information section of the report. The use of the appraisal report by anyone other than the Client is prohibited except as otherwise provided. Accordingly, the appraisal report is addressed to and shall be solely for the Client's use and benefit unless we , provide our prior written consent. We expressly reserve the unrestricted right to withhold our consent to your disclosure of the appraisal report (or any part thereof including, without limitation, conclusions of value and our identity), to any third ' parties. Stated again for clarification, unless our prior written consent is obtained, no third party may rely on the appraisal report (even if their reliance was foreseeable). 26. The conclusions of this report are estimates based on known current trends and ' reasonably foreseeable future occurrences. These estimates are based partly on property information, data obtained in public records, interviews, existing trends, buyer- seller decision criteria in the current market, and research conducted by third ' parties, and such data are not always completely reliable. Integra Realty Resources, Inc. and the undersigned are not responsible for these and other future occurrences that could not have reasonably been foreseen on the effective date of this assignment. , Furthermore, it is inevitable that some assumptions will not materialize and that unanticipated events may occur that will likely affect actual performance. While we are of the opinion that our findings are reasonable based on current market conditions, , we do not represent that these estimates will actually be achieved, as they are subject to considerable risk and uncertainty. Moreover, we assume competent and effective management and marketing for the duration of the projected holding period of this , property. 27. All prospective value estimates presented in this report are estimates and forecasts , which are prospective in nature and are subject to considerable risk and uncertainty. In addition to the contingencies noted in the preceding paragraph, several events may occur that could substantially alter the outcome of our estimates such as, but not limited to changes in the economy, interest rates, and capitalization rates, behavior of ' consumers, investors and lenders, fire and other physical destruction, changes in title or conveyances of easements and deed restrictions, etc. It is assumed that conditions ' reasonably foreseeable at the present time are consistent or similar with the future. FILE NUMBER 124- 2010 -0293 PAGE 74 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER APPRAISER QUALIFICATIONS ADDENDUM A 1 APPRAISER QUALIFICATIONS 1 1 1 1 1 1 FILE NUMBER 124 -2010 -0293 PAGE Al Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER APPRAISER QUALIFICATIONS , PROFESSIONAL QUALIFICATIONS OF , MITCHELL E. SIMONSON EXPERIENCE: • Integra Realty Resources — Minneapolis /St. Paul — Since March 2006 ' • Integra Winius Realty Analysts — Phoenix, Arizona — from February 2005 to February 2006 Experience includes valuation and analysis of all types of real estate ranging ' from commercial, industrial, residential, and special purpose properties. Clients served include private and public agencies, lenders, law firms, and investment firms. Valuations have been performed for condemnation purposes, estates, ' financing, equity participation and due diligence support. Valuations and market studies have been done on proposed, partially completed, renovated and existing structures. Valuations have been performed on various properties including, but not limited to, neighborhood and community shopping centers, apartment ' complexes, single and multi- tenant industrial buildings, low to high rise office buildings, mixed use facilities, and vacant land for different uses. Specialized real estate valued includes limited - service hotels, marinas, auto dealerships, medical offices, and residential land subdivisions. , PROFESSIONAL Licensed: Certified General Real Estate Appraiser in the State of Minnesota, ACTIVITIES: License No. 20573344 Licensed: Certified General Real Estate Appraiser in the State of Arizona, ' License No. 31616 Member: Associate of Appraisal Institute , Member: Commercial Real Estate Development Association (NAIOP) Member: St. Cloud State University Real Estate Alumni Association Participant: MLLC Building Committee Chairman , EDUCATION: St. Cloud State University, Bachelor of Science Degree in Business, Real Estate Appraisal Successfully completed re l estate related courses n seminars numerous a ou ses a d se i y sponsored by Appraisal Institute, including: • Advanced Income Capitalization , • General Market Analysis and Highest and Best Use • Advanced Sales Comparison and Cost Approaches , • Report Writing and Valuation Analysis • Advanced Applications ' FILE NUMBER 124 - 2010 -0293 PAGE A2 Integra Realty Resources ' ' BROOKLYN CENTER STRIP RETAIL CENTER APPRAISER QUALIFICATIONS ' PROFESSIONAL QUALIFICATIONS OF MICHAEL F. AMUNDS MAI, CCIM, MRICS EXPERIENCE: Director for Integra Realty Resources — Minneapolis /St.. Paul of ' Minneapolis, Minnesota. Actively engaged in real estate valuation and consulting since 1985, working with a private firm in the Minneapolis /St. Paul area. Experience includes valuation and analysis of all types of real estate including commercial, industrial, office, multiple family, mixed -use, and special purpose properties. Particular expertise in the valuation of investment grade real property and vacant land. Clients served include private investors and public agencies, lenders, law firms, and investment firms. Valuations have been ' performed for condemnation purposes, estates, financing, equity participation and due diligence support. Valuations and market studies have been completed on proposed, partially completed, renovated and existing structures. Valuations have been performed on various properties including, but not limited to, neighborhood and community shopping centers, apartment complexes, single and multi- tenant industrial buildings, low to high rise office buildings, hotels, mixed use facilities, and vacant land for different uses. Specialized real estate ' valued includes shopping centers, limited and full - service hotels, landfills, theaters, special purpose properties, Section 42 apartments, and cooperatives. PROFESSIONAL Member: Appraisal Institute (MAI No. 10093) ' ACTIVITIES: Member: Commercial Investment Real Estate Institute (CCIM) Member: Royal Institute of Chartered Surveyors (MRICS No. 1273006) Licensed: Minnesota Certified General Real Property Appraiser License No ' 4000884 Wisconsin Certified Appraiser License No. 1092 Member: NAIOP Commercial Real Estate Development Association ' Member: Building Owners and Managers Association (BOMA) Member: Minnesota Shopping Center Association (MSCA) Member: International Council of Shopping Centers (ICSC) Member: Baytown Township Board, Baytown Township, Minnesota Lecturer: Former Associate Instructor for the Appraisal Institute, Highest and Best Use and Market Analysis ' Author: Co- author of Shopping Center Appraisal and Analysis, 2 "d Ed., published by The Appraisal Institute EDUCATION: University of Wisconsin -Stout Bachelor of Science Degree in Industrial Education, Master of Science Degree from University of Wisconsin- Madison, in Real Estate Appraisal and Investment Analysis. ' Successfully completed numerous real estate related courses and seminars sponsored by the Appraisal Institute, Commercial Investment Real Estate Institute, accredited universities, and others. ' Currently certified by the Appraisal Institute's voluntary program of continuing education for its designated members. QUALIFIED BEFORE Hennepin County, Minnesota. ' COURTS AND ADMINISTRATIVE BODIES: FILE NUMBER 124 - 2010 -0293 PAGE A3 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER APPRAISER QUALIFICATIONS , INTEGRA REALTY RESOURCES, INC. CORPORATE PROFILE Integra Realty Resources Inc. offers the most comprehensive property valuation and ' counseling coverage in the United States with 58 independently owned and operated offices in 33 states. Integra was created for the purpose of combining the intimate knowledge of well- established local firms with the powerful resources and capabilities of a national ' company. Integra offers integrated technology, national data and information systems, as well as standardized valuation models and report formats for ease of client review and analysis. Integra's local offices have an average of 25 years of service in the local market, and each is headed by a Managing Director who is an MAI member of the Appraisal ' Institute. A listing of IRR's local offices and their Managing Directors follows: ATLANTA, GA — Sherry L. Watkins., MAI, MRICS MINNEAPOLIS, AN — Michael Amundson, MAI, CCIM, MRICS ATLANTIC COAST, NJ - Anthony Graziano, MAI, CRE, FRICS NAPLES, FL — Carlton J. Lloyd, MAI ' AUSTIN, TX - Randy A. Williams, MA/, SRIWA, FRICS NASHVILLE, TN— R. Paul Perutelli, MAI, SRA, MRICS BALTIMORE, MD - G. Edward Kerr, MAI, MRICS NEW YORK, NY— Raymond T. Cirz, MAI, CRE, FRICS BOISE, ID - Bradford T. Knipe, MAI, ARA, CCIM, CRE, FRICS NORTHERN NJ— Barry J. Krauser, MAI, CRE, FRICS BOSTON, MA - David L. Cary, M4I, MRICS ORANGE COUNTY, CA — Larry D. Webb, MAI, FRICS CHARLOTTE, NC - Fitzhugh L. Stout, MAI, CRE, FRICS ORLANDO, FL — Charles J. Lentz, MAI, MRICS , CHICAGO, IL - Gary K. DeClark, MAI, CRE, FRICS PHILADELPHIA, PA —Joseph Pasquarella, MAI, CRE, FRICS CHICAGO, IL — Eric L. Enloe, MAI, MRICS PHOENIX, AZ— Walter Winius, Jr., MAI, CRE, FRICS CINCINNATI, OH- Gary S Wright, MAI, SRA, FRICS PITTSBURGH, PA — Paul D. Griffith, M,41, MRICS CLEVELAND, OH— Douglas P. Sloan, MAI, MRICS PORTLAND, OR — Brian A. Glanville, MAI, CRE, FRICS ' COL UMBL4, SC - Michael B. Dodds, MAI, CCIM MRICS PROVIDENCE, RI —Gerard K McDonough, MAI COLUMBUS, OH— Bruce A. Daubner, MAI, MRICS RICHMOND, VA — Kenneth L. Brown, MAI, CCIM, MRICS DALLAS, TX - Mark R. Lamb, MAI, CPA, MRICS SACRAMENTO, CA — Scott Beebe, MAI, FRICS DAYTON, OH - Gary S. Wright, MAI, SRA, FRICS ST. LO UIS, MO — Roland G. Hoffman, MAI, SRA, MRICS DENVER, CO - Brad A. Weiman, MAI, MRICS SALT LAKE CITY, UT— Darrin Liddell, MAI, CCIM MRICS ' DETROIT, MI -Anthony Sanna, MAI, CRE, FRICS SANANTONIO, TX— Martyn C. Glen, M,41, CRE, FRICS FORT WORTH, TX- Donald Sherwood, MAI, SR/WA, FRICS SAN DIEGO, CA —Jeff Greenwald, MAI, FRICS GREENVILLE, SC — Michael B. Dodds, MAI, CCIM, MRICS SAN FRANCISCO, CA — Jan Kleczewski, MAI, FRICS HARTFORD, CT - Mark F. Bates, MAI, CRE, FRICS SARASOTA, FL — Carlton J. Lloyd, MAI HOUSTON, TX - David R. Dominy, MAI, CRE, FRICS SARASOTA, FL- Craig L. Smith, MAI, MRICS ' INDIANAPOLIS, IN— Michael C. Lady, MAI, SRA, CCIM, MRICS SAVANNAH, GA — J Carl Schultz, Jr., MAI, SRA, CRE, FRICS KANSAS CITY, MO /KS - Kenneth Jaggers, MAI, FRICS SEATTLE, WA —Allen N. Safer, MAI, MRICS LAS VEGAS, NV - Shelli L. Lowe, MAI, SRA, MRICS SYRACUSE, NY— William J Kimball, MAI, FRICS LOS ANGELES, CA - John G. Ellis, MAI, CRE, FRICS TAMPA, FL — Bradford L. Johnson, MAI, MRICS ' LOS ANGELES, CA - Matthew Swanson, MAi TULSA, OK — Robert E. Gray, MAI, FRICS LOUISVILLE, KY - George Chapman, MAI, SRA, CRE, FRICS WASHINGTON, DC — Patrick C. Kerr, MAI, SRA, MRICS MEMPHIS, TN - J. Walter Allen, MAI, MRICS WILMINGTON, DE —Douglas L. Nickel, MAI, FRICS MIAMI, FL — Stephen Matoms, MAI IRR de MEXICO — Oscar J. Franck Terrazas MILWAUKEE, WI— Nicholas F. Solano, MAI, MRICS ' Corporate Office ' 1133 Avenue of the Americas, 27 th Floor, New York, New York 10036 Telephone: (212) 255 -7858; Fax: (646) 424 -1869; E -mail infong,irr.com Website: www.irr.com ' FILE NUMBER 124 - 2010 -0293 PAGE A4 Integra Realty Resources , BROOKLYN CENTER STRIP RETAIL CENTE SUBJECT PHOTOGRAPHS ADDENDUM B SUBJECT PHOTOGRAPHS FILE NUMBER 124- 2010 -0293 PAGE B1 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER SUBJECT PHOTOGRAPHS e R E , 2K " a r, a Northeast elevation of subject Northwest elevation of subject Photo Taken on August 20, 201 U Photo Taken on August 20, 2010 �6 fey 7/4w 7 O � Y� i L �•k r' iru.� , 1fPifi ist, t r Southwest elevation of subject Southeast elevation of subject (Photo Taken on August 20, 2010) (Photo Taken on August 20, 20 10) nn x4'4 x � f Y4x'� uy� Checkers drive -up window View east along 66 Ave. N. towards Hwy. 252 (Photo Taken on August 20, 2010) (Photo Taken on August 20, 2010) �R FILE NUMBER 124- 2010 -0293 PAGE B2 Integra Realty Resources BRO OKLYN CENTER STRIP RETAIL CENTE _ SU P HOTOG RAPH S w f w .i 9- t .. r Y r d l s s; :• °+a �" e �! `, �, � "�,. ; ' „ �', .,;: _ ,r. .. ,�,� r .z f < '+.fi `" -' -s , `. View west along 66 Avenue North View south on Camden Avenue North (Photo Taken on August 20, 2010) (Photo Taken on August 20, 2010) r y 8 f > �Z' t t A i dni" (� tY i Checkers Dollar store tenant (Photo Taken on August 20, 2010) (Photo Taken on Au ust 20, 2010) a �a' ✓y i v r i L Front retail store area of Wireless store Unfinished space in Wireless suite (Photo Taken on August 20, 20 10) (Photo Taken on August 20, 2010) FILE Nur, °BF� 124-2010 -0293 PAGE B3 Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER PROPERTY INFORMATION ADDENDUM C PROPERTY INFORMATION BILE NUMBER 124 - 2010 -0293 PAGE C1 Integra Realty Resources ' BROOKLYN CENTER STRIP RETAIL CENTER PROPERTY INFORMATION LEGAL DESCRIPTION Lot 2 Block 1 , Re al Road Development 2 nd Addition Hennepin County, , g p � P Y, R FILE NUMBER 124 - 2010 -0293 PAGE C2 ' Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER PROPERTY INFORMATION ' PLAT MAP s t.w} t• 2 r L II 1 8T 3 Bo MO r0 i 00C N0 69794 88 96a °•--------- - -- - -- _' i� d t 4 'J >!� PART OF pffLOf A Nq 4 9 1 t t1071 �'. aM •a725°B 1 k '��� W K. ' t to ___._ 69M .. - - 50.44 p 9 586•'aS'E . .. t ( y t•U s i ' t• 9 t93 �^ m i 1 wiJ - 194 015) q r Y t106) ooc Na ,69xx6e t y °s 242.05 I I t96 p� ��'1 971 a3 wz 66i,l i � SBS'oz -------- - -_- � - .......1 T 1 t6 4t� .y 98) - ip it i `Cn or 5900KL c. oS 9•i3 J` CY { )---------- w T BC 0 j 4 �i n I i K--L N LEN 9 3 Uf i 1{ 4 YR'T 0T 101 2 z 41$i ( . ( 11 PARCEL 9' 02 41141 s ," uv�: € co t t TA 509996 46 S9S•02•.9'" (/ �„ ..{-! t '-`- PAR! 0f LD4 3 IO - M• 46 PARtEt � PARCEL u 1 .• _ - - - --- - �` -�. --. - _ t k �b•T;tO � 6 y R - - -- AVE 10 s�'y') -- 5- -"�'lr a T 5•Sn-sc� — i � i i i 2 .�"� ~ -- .a' "~ 1 a PARCEL 6A PAR i � � : ` A' rA° LEL- 530— sd.,.•• � �,es nr•,art�R,.c. �a. a6o +�'� s, S N 1} i i � r °' J - -- �• °' ¢L saa'3 a '•fa t" i t { � ' PARCELS., A . 5691 _ , t i -9.55 �Nf:Te 1 lI ^-. t t 63J6 tNFS'0P30•E _ t 1 ' 3[3 � S.S4. "� # i Sam Y tt { ! l ! ° 5 163.92 ' •4 f i@ as9. { 1 {+201 r 1t 1 T 1 t + j ,&g Jj fp,/} ! � �t s i+37�J�r Uxt C�f/AD 33 � y3 1 � t � - S69'S9'S9•E l . SO NO ti } SO NO 286 affyie -- 2t2•�' �I - , ss- - so 30, (311 -T l FILE NUMBER 124 -2010 -0293 PAGE C3 Integra Realty Resources ' 1 BROOKLYN CENTER STRIP RETAIL CENTER PROPERTY INFORMATION 1 ZONING MAP t t p � p C2 C2 4 � b 4�f PUDIR3' 1 PUDIR 3 PU DIC2 ; PUD /C2 PUDIR3 PUD /R3 R5 ,_.._,_ .�. � PUD /R3 PUDIR3 ,,Y . H'aVE 1 'II RS RS PUDIC2 R5 ` R5 R5 1 �3 O� A R.7 1 1 RESIDENCE INDUSTRY RI - ONE FAMLYR E CENCE It- INDUSTRIAL PARK R2 -TW0 F I1LY E I' C.- L- GENERAL INDUSTRY 1 T R3- MULTIPLE FkiLi= IC -NC_ OPEN SPACE R4 -MULTIPLE FP 1 Lf RESIDENCE 41 - PUBLIC OPEN SPACE RESERVED i - (11122 .42 Zi wp 02- PUBLIC AND PRIVATE OPEN SPACE RESERVER R5- MULTIPLE F, M LYRESIC_NCE (212am31 PLANNED UNITDEVELOPh4ENT ,,., COM PUD1Ri- PLANNED UNIT DEVELOPMENT 1 r ) a (The undedying rotting Is designalad aft—th. / s >t GI 4 t a �' CS - SENC - FOFF +CE Th. zxa pW shaves R1 -Ono Family Resid --n C2•C064.t RCE CL- �..FJ4TAAL CC411, a ovmAYoI - 1CO YEAR FLOOD ELEVATIONS AT SELECTED LOCATIONS WATERWAY LOCATION ELEVATIO.'N PT. NGVD ( ) V:t£CF•EBC AT ATWMAVEAMEN N AT Us AT 3 ,W 5:v d +M 5 5RD ANEVEN Bia 9 -Vt} gr� Al wR4P.N WYFA r-M. VE a ' SHDI UNE EN tip S 5HJPJJNE We 1 FILE NUMBER 124 - 2010 -0293 PAGE C4 1 Integra Realty Resources W m o _ z -•'.." k3�5� A?'� R�otUJt „ , wire . q _.. T-- �..— .,.te — -• �...- C�tS�s (� q .J �M1l1.Rd ,Z� _• 4 hi j �. �... �,t . w,.. -.- •.�+3yxr^'� "` � � 1�a �4 - a..,... ��t�srlA ».rriwa•� ...e..� .' i ..J .L• ff J 4 1 �' � '. , " !1. - � . , =y- e � yam,- `• � � u+. - hl, � � ,, •,;• sus►�t►tssa��t _ � � n � � O z ' BROOKLYN CENTER STRIP RETAIL CENTER PROPERTY INFORMATION FLOOD MAP PROPERTY ADDRESS: STDB O N LI NE"Co rx1 * � E' 615 66th Ave N, Brooklyn Center, MN 55430 -1667 FLOODSOURC,E U N- 1 North ZONE X T, 1 l -...x 36 ' 002470 . FLOODSCAPE �- X E Fto6d Hazards Map Map Number 9� s 27053CO208E E00-426 Effective Date X f s September 2, 2004 C1O542 ti .� Flood Legend High flood risk El Moderate flood risk e J24 b 1" t7�12429 E-11-ow flood risk 00 242 5 This report makes no ZONE X representations or warranties � concerning its content. accuracy or completeness. ' STDOon6ne corn 3c ' 469574.1234 0' 0V 600' . Ott 1200' .Powered by Flood Source 877.77.FLOOD wwwJloodsource.com a u xiCi✓�5a4 - --�- -: ' a ©1999.2019 SouroeProse Corporation. A rights reserved. Protected by U.S. Patent Numbers 6631326, 6678615, 6842898, and 7038681. FILE NUMBER 124- 2010 -0293 PAGE C6 ' - Integra Realty Resources BROOKLYN CENTER STRIP RETAIL CENTER COMPARABLE DATA ' ADDENDUM D 1 COMPARABLE DATA 1 1 1 1 1 1 1 1 FILE NUMBER 124- 2010 -0293 PAGE D1 Integra Realty Resources ' ' LAND SALE PR OFILE oc o ro rtydent� ficat�on'£ <G� 1Eitt+ - Property Name: Aldi Site Sub - Property T h .I (A " ' Type: Land: Retail i (P Address: SEC of Hwy. 36 & Nova tm %, 1 i g Scotia Ave. afro , sti City /State /Zip: Oak Park Heights, MN 55082 ., 'a.Ar.m County: Washington -_- 4 GOODWILL ADDITION �s .n4 �. Market Orientation: Suburban.w.,...<.r. s, `\ ., �wt�' `fir /".` ci �i Property Location: West 300 feet of the East s \� 1,013 feet of the North 325 feet of the NE1 /4 of iRR Event ID (412568) ' the NE1 /4 of Section 5, Township 29, Range 20 `�` MSA: Minneapolis /St. Paul ' Sale Price: $1,550,000 Legal /Tax /Parcel ID: 05- 029 -20 -11 -0042 Acres (Usable /Gross): 2.24/2.24 Eff. R.E. Sale Price: $1,550,000 Land -SF (Usable /Gross): 97,574/97,574 Sale Date: 07/22/2010 Usable /Gross Ratio: 1.00 Sale Status: Closed Shape: Rectangular $ /Acre (Gross): $691,964 Topography: Level ' $ /Land SF (Gross): $15.89 Frontage Feet: 300 $ /Acre (Usable): $691,964 Frontage Desc. Highway 36 $ /Land SF (Usable): $15.89 Traffic Count: 29,000 vpd (2009 count) ' Case Study Type: None Zoning Desc. B4, Limited Business Grantor /Seller: CSM Equities, LLC Flood Plain: No Grantee /Buyer: Aldi Inc. (Minnesota) Utilities: Electricity, Water Public, ' Prop. Rights Conveyed: Fee Simple Sewer, Gas, Telephone % of Interest Conveyed: 100.00 Source of Land Info. Past Appraisal . Terms of Sale: Cash to seller Comments Document Type: Warranty Deed Site acquired for development of Aldi grocery store. Verification Type: Confirmed -Buyer Located next to Lowe's and Wal -Mart Supercenter. Current Use: Vacant site Proposed Use Change: Yes ' Proposed Use Desc. Aldi grocery store e Aldi Site R » Copyright 2010 Integra Realty Resources, Inc. 1i\(1 Data P(, ht An IM System LAND, SALE PR OFILE Property Name: Discount Tire Site 1 Sub - Property Type: Land: Retail�r- Address: NWC of Zane Ave. & Hwy. 610 ..� a `; .: .. r City /State /Zip: Brooklyn Park, MN 55445 County: Hennepin �~ -..a . � Ot ; f - Market Orientation: Suburban IRR Event ID (382773) a or �wio � Comments 13 Sale Price: $675,000 This 50,000 square foot site closed in mid - August. Sale Eff. R.E. Sale Price: $675,000 date is approximate. A Discount Tire store is to be built ' Sale Date: 08/15/2010 on the property. Sale Status: Closed $ /Acre (Gross): $586,957 , $ /Land SF (Gross): $13.50 $ /Acre (Usable): $586,957 $ /Land SF (Usable): $13.50 Case Study Type: None Grantor /Seller: Union Bank Grantee /Buyer: Unknown Entity for Discount Tire Prop. Rights Conveyed: Fee Simple of Interest Conveyed: 100.00 ' Document Type: Other Verification Type: Confirmed - Seller MSA: Minneapolis /St. Paul Acres (Usable /Gross): 1.15/1.15 ' Land -SF (Usable /Gross): 50,000 /50,000 Usable /Gross Ratio: 1.00 Shape: Irregular Topography: Level Zoning Desc. TC, Town Center Utilities: Electricity, Water Public, ' Sewer, Gas, Telephone Source of Land Info. Other D iscount m Copyright 2010 Integra Realty Resources, Inc. ERR. -Da a 1""(, ht MiRRSyst&" ' 1 ' LAND SALE PR OFILE' =� nom, ert y € Identilficatilon yr r ..h'..a3b..o.xa.., ie- iG 65 Property Name: Auto Zone Site ' Sub - Property Type: Land: Retail bf� Address: 11679- Ulysses Ln. NE kf City /State /Zip: Blaine, MN 55434_ �zy 3'17TH AVE .. County: Anoka "'�� iiaa ,Ilan 7 Market Orientation: Suburban Property Location: Lot 1, Block 1, Central. Avenue Acres Third J x Addition IRR Event ID (400515) rel Zoning Desc. PBD, Planned Business ..> District ' Sale Price: $625,000 Utilities: Electricity, Water Public, Eff. R.E. Sale Price: $625,000 Sewer, Gas, Telephone Sale Date: 10/26/2009 Source of Land Info. Other - Sale Status: Closed Comments r } X t $ /Acre (Gross): $679,348 Site is located in the southwest quadrant of Highway $ /Land SF (Gross): $15.68 65 and 117th Ave in Blaine. It was purchased for the ' $ /Acre (Usable): $679,348 development of an Auto Zone retail store. $ /Land SF (Usable): $15.68 Case Study Type: None Grantor /Seller: Ryan Companies US, Inc. Grantee /Buyer: AutoZone Development Corporation ' Prop. Rights Conveyed: Fee Simple % of Interest Conveyed: 100.00 Terms of Sale: Cash to seller Document Type: Deed Verification Type: Secondary Verification MP o d Stte M Data N' SI z R 3 MSA: Minneapolis /St. Paul Legal/Tax /Parcel ID: 17- 31 -23 -21 -0018 ' Acres (Usable /Gross): 0.92/0.92 Land -SF (Usable /Gross): 39,870/39,870 Usable /Gross Ratio: 1.00 Shape: Rectangular Topography: Level Auto • Copyright 2010 Integra Realty Resources, Inc. I.L— D ata Point ' An (RR $ysfem LAND S PR Sale No. 4 ation° o ert Identific f�on r P a , L Property Name: Enterprise Auto Rental Site Sub - Property Type: Land: Retail Address: 8200 Lakeland Ave. N. City /State /Zip: Brooklyn Park, MN 55445,. County: Hennepin ;\ Market Orientation: Suburban Property Location: Part of the SW1 /4 of the NE1 /4 of Section 19, Township 119, Range 21 IRR Event ID (408120) Frontage Desc. Lakeland Ave N (Cty Rd Sale Price: $350,000 Traffic Count: 21,600 Eff. R.E. Sale Price: $350,000 Zoning Desc. B -3, Commercial Sale Date: 08/11/2009 Easements: No ' Sale Status: Closed Environmental Issues: No $ /Acre (Gross): $406,977 Flood Plain: No $ /Land SF (Gross): $9.29 Utilities: Electricity, Water Public, $ /Acre (Usable): $406,977 Gas, Telephone, Cable TV $ /Land SF (Usable): $9.29 Source of Land Info. Other Case Study Type: None Grantor /Seller: Jeffrey Hawk and Anthony Hawk Grantee /Buyer: Pingree 2000 Real Estate , Holdings, LLC % of Interest Conveyed: 100,00 Terms of Sale: Cash to seller Document Type: Warranty Deed ' Verification Type: Confirmed - Seller o; d S ata MSA: Minneapolis /St. Paul� � Legal/Tax /Parcel ID: 19- 119 -21 -13 -0006 Acres (Usable /Gross): 0.86/0.86 ' Land -SF (Usable /Gross): 37,661/37,661 Usable /Gross Ratio: 1.00 Shape: Rectangular Topography: Level Frontage Feet: 100 Enterprise Auto Rental Site, Copyright 2010 Integra Realty Resources, Inc. 11111- Da a polfit An 7RRSyste ' ' R ET A IL S • • , • b - Z . . . . . . . . . . . . , Property Name: Eden Prairie Strip Retail v� Center Sub- Property Type: Shopping Center: 4_ Convenience /Strip Centerr ' Address: 10165 Hennepin Town Rd. City /State /Zip: Eden Prairie, MN 55344 County: Hennepin .3 . Market Orientation: Suburban4 - ' Property Location: Lot 1 Block 1 Bluff Country Village 2nd` Addition IRR Event ID (412524) Year Built: 2007 O I Sale Price: No. of Buildings /Stories: 1/1 $2,400,000 Total Parking Spaces:. 73 ' Eff. R.E. Sale Price: $2,400,000 Park. Ratio 1000 SF GLA: 6.08 Sale Date: 06/24/2010 No. Surface Spaces: 73 Contract Date: 04/24/2010 Park. Ratio 1000 SF GBA: 6.08 Sale Status: Closed No. Of Elevators: None $ /SF GBA: $200.00 Fire Sprinkler Type: Wet $ /SF NRA: $200.00 Shaper Irregular Case Study Type: None Topography: Level Grantor /Seller: Bluff Country Retail, LLC Frontage Feet: 205 Grantee /Buyer: Artisan Properties, LLC Frontage Desc. Hennepin Town Road ' Prop. Rights Conveyed: Leased Fee Bldg. to Land Ratio FAR: 0.15 % of Interest Conveyed: 100.00 Zoning Desc. N -Com Terms of Sale: Cash sale Easements Desc. Shared access with adjacent undeveloped Document Type: Warranty Deed parcels Verification Type:. Confirmed -Buyer Utilities: Electricity, Water Public, •� ; wand= Key�Ind�eators Sewer, Gas, Telephone ,,�' Improve. Info. Source: Public Records Vacancy Rate: 8% Source of Land Info. Public Records OAR (Cap. Rate) 9.50% �* r C O r3"t 173 s? �"? t S Site Data W The property was 92% occupied at the time of sale. MSA: Minneapolis /St. Paul Buyer reported they previously had the property under Legal /Tax /Parcel ID: 25- 116 -22 -44 -0126 contract to purchase in 2007, but pulped out. The cap ' GBA -SF: 12,000 rate was reported in the range from 9% to 10% based GLA -SF: 12,000 on in -place income at time of sale. Prairie Strip Retail Center' � • Copyright 2010 Integra Realty Resources, Inc. I ilk Data Pollht AnfBR System RETAIL SALE PROFILE' � o_�a$i on� &� � c�pert den tification - � � = h ' Property Name: Promenade Place Retail Center s �. � Sub - Property Type: Shopping Center: Convenience /Strip Center Address: 1298 Promenade PI. 7 City /State /Zip: Eagan, MN 55121 V County: Dakota a s Market Orientation: Suburban��, Property Location: Lot 2, Block 2, Eagan x Promenade Addition -` ' IRR Event ID (412541) a Ia orma w ��� '`�, �, � � _ Improvement �D Sale Price: $1,350,000 MSA: Minneapolis /St. Paul Eff. R.E. Sale Price: $1,350,000 Legal /Tax /Parcel ID: 102247202002 Sale Date: 09/30/2009 GBA -SF: 6,500 Contract Date: 08/15/2009 GLA -SF: 6,500 Year Built: 1996 Sale Status: Closed Construction Desc. Steel and concrete frame $ /SF GBA: $207.69 No. of Buildings /Stories: 1/1 $ /SF NRA: $207.69 Total Parking Spaces: 93 Case Study Type: None Park. Ratio 1000 SF GLA: 14.31 Grantor /Seller: Walter A. Fill Jr. Trust Park. Ratio 1000 SF GBA: 14.31 ' Grantee /Buyer: Eagan Promenade 2009, No. Of Elevators: None LLC Fire Sprinkler Type: Wet Prop. Rights Conveyed: Leased Fee Shape: Rectangular % of Interest Conveyed: 100.00 Topography:. Level Terms of Sate: Cash sale Frontage Desc. Denmark Avenue Document Type: Trust Deed Traffic Count: 17,100 vpd (2007 count) Verification Type: Secondary Verification Bldg. to Land Ratio FAR: 0.11 x ; Zoning Desc. PD, Planned Development ., Flood Plain: No Potential Gross Income: $152,685 Utilities: Electricity, Water Public, Net Operating Income: $138,346 Sewer, Gas, Telephone Reserves Included: Yes Improve. Info. Source: Other Operating Data Type: Stabilized Source of Land Info. Public Records ' GRM Actual: 8.84 OAR (Cap. rate) Actual: 10.25% , Management Included: Yes Prgmenade Place Retail Center MR . Copyright 2010 Integra Realty Resources, Inc. MR 1 ata Poft An fRR ll RETAIL ` i No Building is 100% leased to Blockbuster Video who has subleased 2,183 square feet to Potbelly Sandwich. ' Cap rate includes a 5% vacancy and collection loss. Well located near intersection of I -35E and Yankee Doodle Road. Part of Eagan Promenade Center development. ' Located on an outlot of the 280,000 square foot Eagan Promenade Center anchored by Byerly's, Bed, Bath & Beyond, T] Maxx and Best Buy. r Promenade Copyright 2010 Integra Realty Resources, Inc. jn( Data PQlnt An IM S-WEM RETAIL SALE PR OFILE - ocatio _ Pr ,�e�rt �dentif�cation ���, yy:_ _�.4�� Property Name: Plymouth Town Center Sub- Property Type: Shopping Center Address: 3500 Vicksburg Lane City /State /Zip: Plymouth, MN 55447g Al County: Hennepin Market Orientation: Suburban ' Property Location: Lot 2, Block 1, Plymouth� Hills 6th Addition IRR Event ID (361505) Year Built: 1997 ' Improvements Cond.: Good Sale Price: $5,500,000 Construction Desc. Foundation - reinforced Eff. R.E. Sale Price: $5,500,000 concrete, no basement , Sale Date: 06/05/2009 Frame-structural steel Sale Status: Closed Walls -brick & EIFS, pre- finished metal coping $ /SF NRA: $208.89 Windows- insulated glass Eff. Price /Unit: $550,000 /Tenant in anodized aluminum Case Study Type: None frames Grantor /Seller: Principal Life Insurance No.. of Buildings /Stories: 2/1 Grantee /Buyer: West PTC, LLC No. of Units /Unit Type: 10 /Tenants Prop. Rights Conveyed: Leased Fee Multi- Tenant /Condo.: Yes /No % of Interest Conveyed: 100.00 Ceiling Height Minimum: 16.00 , Exposure Time: 0:00 (months) Total Parking Spaces: 245 Park. Ratio 1000 SF GLA: 9.30 Terms of Sale: Cash to seller No. Surface Spaces: 245 Document Type: Deed Park. Ratio 1000 SF GBA: 9.30 ' Verification Type: Confirmed - Seller Broker Park Ratio (Space /Unit): 24.50 [ .a - n: ICe Ind�'�ators No. Of Elevators: None PAM Az_ " —MA Fire Sprinkler Type: Wet OAR (Cap. Rate) 8.75% Air - Conditioning Type: Roof Central Mounted e nd Sze ;Data Roof Comm.: Roof - built -up roof with insulation over metal deck MSA: Minneapolis /St. Paul & steel bar joist Legal /Tax /Parcel ID: 21- 118 -22 -22 -0016 Shape: Irregular GBA -SF: 26,330 Topography: Level GLA -SF: 26,330 Frontage Feet: 152 Acres (Usable /Gross): 3.76/3.76 Frontage Desc. 34' on Vicksburg Ln & 118' Land -SF (Usable /Gross): 163,716/163,716 on 35th Ave N ' Usable /Gross Ratio: 1.00 Traffic Count: 16700 vpd U-� Plymouth T Center' , I R ® Copyright 2010 Integra Realty Resources, Inc. ) (\L1 DataPofnt MiRRSYSWR ' R ETAIL ' $ tImpr �reme n��nd Site Data`(Cont`d) Density -Unit /Gross Acre: 2.66 Density- Unit /Usable Acre: 2.66 Bldg. to Land Ratio FAR: 0.16 Zoning Desc., CC, City Center, and R & E, Retail & Entertainment Flood Plain: No Flood Zone: Outside of 500 -year floodplain ' Utilities: Electricity, Water Public, Sewer, Gas, Telephone Utilities Desc. Tenants - electric & gas metered I ' Central -water & sewer metered Improve. Info. Source: Inspection ' Source of Land Info Inspection Rentable area is 26,330 square feet, broken down I ' between the westerly building (16,778 SF) and the easterly building (9,552 SF). The property was 95% leased at the time of sale. According to one of the buyers, the property was not formally marketed. Rather, the buyers were aware that Inland Real Estate, owner of the neighboring Cub Foods, was negotiating with Principal for the center. They informed Principal ' that if negotiations with Inland broke down, they would be interested in purchasing the property. Inland eventually bowed out and negotiations began between Principal and the buyer. The sale represents an end -leg ' of a 1031 exchange. With respect to run -off water affecting both quantity and quality, the property is served by a regional off -site pond located approximately 1/8 mile east of the site. This is atypical of the market. The Plymouth Town Center Shopping Center is subject to an Operating and Easement Agreement whereby all neighboring properties pay a share of the costs of maintaining and repairing the common drive and landscaping along the north side of the project. The owner of the subject of this sale has administered the OEA agreement which includes the ' coordination of all services. Participants pay their pro -rata share of the costs based on land area. Rest rooms -in each retail unit, maintained by tenant Security- individual tenant system / Roof - built -up roof with insulation over metal deck & steel bar joist Plymouth Town Center! M ■ Copyright 2010 Integra Realty Resources, Inc. lt\[ — Da CaPol6t AnfiM5yV m R a S ALE PR OfW��' . i • , Identification Property Name: Blaine Retail Center Sub- Property Type: Shopping Center:xr' Convenience /Strip Center / P Address: 2320 -2330 Cloud Drive NE City /State /Zip: Blaine ' MN 55449 ^; F '._ County: Anoka '" Market Orientation: Suburban Property Location: Lot 2, Block 1, Egret Plaza IRR Event ID (332098) z Document Type: Other $1,845,000 Verification Type Confirmed- Seller Broker Sale Price:, Eff. R.E. Sale Price: $1,845,000 Operating Data and Key,Ind� y Sale Date: 03/18/2009 Net Operating Income: $168,000 Contract Date: 10/31/2008 Operating Data Type: In -Place Income Sale Status: Closed OAR (Cap. rate) Actual: 9.11% $ /SF GBA: $ Analysrs'� $ /SF NRA: $147.60 " .. Case Study Type: None Current Use: Shopping center ' Proposed Use Change: No Grantor /Seller: Egret Plaza Investments, - ��..• LLC Improvement -and Siiex_l Grantee /Buyer: Egret Plaza Service, LLC M SA• Minneap olis/St. Paul Prop. Rights Conveyed: Leased Fee Legal /Tax /Parcel ID 09- 31 -23 -13 -0060 of Interest Conveyed: 100.00 GBA -SF: 12,500 ' Terms of Sale: Broker reported buyer GLA -SF: 12,500 assumed mortgage wi h t Acres Usable Gross 1.97/1.97 about 15% down payment Land -SF (Usable /Gross): 85,813/85,813 and 6.0% interest rate. Usable /Gross Ratio: 1.00 ' Reported terms differ from certificate of real estate Year Built: 2004 value. CREV terms are: No. of Buildings /Stories: 2/1 $1,669,037.61 assumed Total Parking Spaces: 65 ' mortgage with Park. Ratio 1000 SF GLA: 5.20 $172,962.39 down Park. Ratio 1000 SF GBA: 5.20 payment, $12,000 Fire Sprinkler Type: Wet ' monthly payment, 6.5% er r for Shape: Irregular interest est ate r 8 years, balloon payment. Topography: Level 7/1/2017. Bldg. to Land Ratio FAR: 0.14 ' Bla ine Retail Center, i Copyright 2010 Integra Realty Resources, Inc. 1L R Da aPolfit - MIHHSystem ' RETAIL SA IM • peen and Site Data (Cont'd Zoning Desc. B -2, Community Commercial Utilities: Electricity, Water Public, Sewer, Gas, Telephone Source of Land Info. Public Records f ' The buyer purchased the property through a mortgage assumption. Wells Fargo was the lender. 100% ' occupancy at time of sale with average rent of $18.00 per square foot. Based on in -place income, indicated cap rate was 9.11 %. Blaine Retail Center E ,, . Copyright 2010 Integra Realty Resources, Inc. MR-Data Point .............. .. ... . .. . . . Lo cao °8c` o a <fjentificat�on Property Name: Brooklyn Park Retail Center Sub- Property Type: Shopping Center: Convenience /Strip Center Address: 9310 Zane Avenue North City /State /Zip: Brooklyn Park, MN 55443 County: Hennepin Submarket: Northwest Market Orientation: Suburban Property Location: Lot 2, Block 1, ' Superamerica 2nd Addition IRR Event ID (332157) Ifor =` Current Use: Strip retail center Proposed Use Change: No Sale Price: $2,150,000. Im rovemen and ite Dat Eff. R.E. Sale Price: $2,150,000 Sale Date: 03/16/2009 MSA: Minneapolis /St. Paul Contract Date: 12/16/2008 Legal /Tax /Parcel ID: 09- 119 -21 -34 -0009 Sale Status: Closed GBA -SF: 11,735 $ /SF GBA: $183.21 GLA -SF: 11,735 ' $ /SF NRA: $183.21 Acres (Usable /Gross): 1.49/1.49 Case Study Type: None Land -SF (Usable /Gross): 64,926/64,926 , Grantor /Seller: Development 101, LLP Usable /Gross Ratio: 1.00 Year Built: 2004 Grantee /Buyer: Honey -Tel, LLC & AWH, Total Parking Spaces: 60 LLC Park. Ratio 1000 SF GLA: 5.11 Prop. Rights Conveyed: Leased Fee Park. Ratio 1000 SF GBA: 5.11 % of Interest Conveyed: 100.00 Frontage Desc. Zane Avenue Terms of Sale: Cash sale Bldg. to Land Ratio FAR: 0.18 Document Type: Warranty Deed Source of Land Info Public Records , Verification Type: Confirmed - Seller Broker r Comment u; fir_ Property was 87.8% occupied with one, 1,428 square Vacancy Rate: 12% foot vacant suite. Capitalization rate based on actual Reserves Included: Yes in -place income was 8.14 %. Property is located a short distance south of the Highway 610 /Zane Avenue Operating Data Type: In -Place Income interchange. ' Management Included: Yes OAR (Cap. Rate) 8.14% 1130�60klyn Park Retail Center Copyright 2010Integra Realty Resources, Inc. 1[\(\ — Data Point AMRRS,ystem ' ' BROOKLYN CENTER STRIP RETAIL CENTER DCF REPORTS L ADDENDUM E '1 DCF REPORTS 1 1 1 1 1 1 1 FILE NUMBER 124 - 2010 -0293 PAGE El ' Integra Realty Resources �.„ Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 O F T W A R F S k 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Penter, MN 55430 Property Type : Retail Portfolio : Date : 8/31 A 0 Time: 3:19 pm Ref# : ADU Schedule Of Prospective Cash Flow Page:1 In Inflated Dollars for the Fiscal Year Beginning 9/1/2010 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Potential Gross Revenue Base Rental Revenue $202,210 $202,470 $190,468 $186,558 $191,908 $193,158 $193,158 $173,296 $176,588 $179,162 $179,162 Absorption & Turnover Vacancy (2 (2,695) (1,765) (7,664 Scheduled Base Rental Revenue 202,210 199,663 187,773 186,558 191,908 193,158 193,158 171,531 168,924 179,162 179,162 Expense Reimbursement Revenue Real Estate Taxes 23,038 26,576 42,867 53,167 54,760 56,404 58,095 59,137 59,922 63,483 65,387 Insurance 1,563 1,804 2,907 3,607 3,715 3,825 3,941 4,012 4,065 4,307 4,436 Common Area Maintenance 11,840 13,658 22,031 27,324 28,144 28,987 29,856 30,392 30,796 32,626 33,606 General /Administrative 1,184 1,367 2,203 2,732 2,815 2,899 2,984 3,039 3,080 3,262 3,361 Management 4,174 4,831 7,980 10,153 10,497 10,652 10,524 10,231 9,985 10,479 10,678 Total Reimbursement Revenue 41,799 48,236 77,988 96,983 99,931 102,767 105,400 106,811 107,848 114,157 117,468 Total Potential Gross Revenue 244,009 247,899 265,761 283,541 291,839 295,925 298,558 278,342 276,772 293,319 296,630 General Vacancy (24,401) (22,264) (24,151) (28,354) (29,184) (29,592) (29,856) (26,246) (20,780) (29,332) (29,663) Effective Gross Revenue 219,608 225,635 241,610 255,187 262,655 266,333 268,702 252,096 255,992 263,987 266,967 Operating Expenses Real Estate Taxes 48,645 50,104 51,607 53,156 54,750 56,393 58,085 59,827 61,622 63,471 65,375 Insurance 3,300 3,399 3,501 3,606 3,714 3,826 3,940 4,059 4,180 4,306 4,435 Common Area Maintenance 25,000 25,750 26,523 27,318 28,138 28,982 29,851 30,747 31,669 32,619 33,598 General /Administrative 2,500 2,575 2,652 2,732 2,814 2,898 2,985 3,075 3,167 3,262 3,360 Management 8,784 9,025 9,664 10,207 10,506 10,653 10,748 10,084 10,240 10,559 10,679 Replacement Reserves 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267 1,305 1,344 Total Operating Expenses 89,229 91,883 95,008 98,112 101,048 103,911 106,803 109,022 112,145 115,522 118,791 Net Operating Income 130,379 133,752 146,602 157,075 161,607 162,422 161,899 143,074 143,847 148,465 148,176 Leasing & Capital Costs Tenant Improvements 9,824 9,431 6,177 21,320 Leasing Commissions 9,122 8,757 5,736 13,587 Total Leasing & Capital Costs 18,946 18,188 11,913 34,907 Cash Flow Before Debt Service $130,379 $114,806 $128,414 $157,075 $161,607 $162,422 $161,899 $131,161 $108,940 $148,465 $148,176 & Taxes ___________ ----- - - - - -- ----- - - - - -- ----- - - - - -- I R G U 5 ' Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 s o F Ter A s e 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date: 8/31/10 Time: 3:19 pm Ref# : ADU Page: 2 Schedule Of Expense Reimbursement Revenue Fiscal Year Reimbursable Operating Expenses Adjusted for Actual Occupancy Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Reimbursable Expenses Real Estate Taxes $48,645 $50,104 $51,607 $53,156 $54,750 $56,393 $58,085 $59,827 $61,622 $63,471 $65,375 Insurance 3,300 3,399 3,501 3,606 3,714 3,826 3,940 4,059 4,180 4,306 4,435 Common Area Maintenance 25,000 25,750 26,523 27,318 28,138 28,982 29,851 30,747 31,669 32,619 33,598 General /Administrative 2,500 2,575 2,652 2,732 2,814 2,898 2,985 3,075 3,167 3,262 3,360 Management 8,784 9,025 9,664 10,207 10,506 10,653 10,748 10,083 10,239 10,559 10,678 Total Reimbursable Expenses $88,229 $90,853 $93,947 $97,019 $99,922 $102,752 $105,609 $107,791 $110,877 $114,217 $117,446 Calendar Year Reimbursable Operating Expenses used for Reimbursement Calculations For the Years Ending Dec -2010 Dec-2011 Dec-2012 Dec-2013 Dec-2014 Dec -2015 Dea2016 Dec -2017 Dec -2018 Dec -2019 Dee-2020 Reimbursable Expenses Real Estate Taxes $47,700 $49,131 $50,605 $52,124 $53,687 $55,298 $56,957 $58,666 $60,425 $62,238 $64,105 Insurance 3,236 3,333 3,433 3,536 3,642 3,751 3,864 3,980 4,099 4,222 4,349 Common Area Maintenance 24,515 25,250 26,008 26,788 27,591 28,419 29,272 30,150 31,054 31,986 32,946 General /Administrative 2,451 2,525 2,601 2,679 2,759 2,842 2,927 3,015 3,105 3,199 3,295 Management 8,627 8,909 9,210 9,791 10,333 10,578 10,687 10,444 10,314 10,242 10,600 Total Reimbursable Expenses $86,529 $89,148 $91,857 $94,918 $98,012 $100,888 $103,707 $106,255 $108,997 $111,887 $115,295 Resulting Fiscal Year Property Expense Reimbursement Revenue Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Expense Reimbursements Real Estate Taxes $23,038 $26,576 $42,867 $53,167 $54,760 $56,404 $58,095 $59,137 $59,922 $63,483 $65,387 Insurance 1,563 1,804 2,907 3,607 3,715 3,825 3,941 4,012 4,065 4,307 4,436 Common Area Maintenance 11,840 13,658 22,031 27,324 28,144 28,987 29,856 30,392 30,796 32,626 33,606 General/Administrative 1,184 1,367 2,203 2,732 2,815 2,899 2,984 3,039 3,080 3,262. 3,361 Management 4,174 4,831 7,980 10,153 10,497 10,652 10,524 10,231 9,985 10,479 10,678 Total Expense Reimbursement $41,799 $48,236 $77,988 $96,983 $99,931 $102,767 $105,400 $106,811 $107,848 $114,157 $117,468 (continued on next page) Aacus I A R G U S' Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 o F T W A R E 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center s r Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date: 8/31/10 Time: 3:19 pm Ref# : ADU Schedule Of Expense Reimbursement Revenue Page:3 (continued from previous page) Percentage of Reimbursable Expenses Collected as Expense Reimbursement Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Expense Reimbursements Real Estate Taxes 47.36% 53.04% 83.06% 100.02% 100.02% 100.02% 100.02% 98.85% 97.24% 100.02 100.02% Insurance 47.36% 53.07% 83.03% 100.03% 100.03% 99.97% 100.03% 98.84% 97.25% 100.02% 100.02% Common Area Maintenance 47.36% 53.04% 83.06% 100.02% 100.02% 100.02% 100.02% 98.85% 97.24% 100.02% 100.02% General /Administrative 47.36% 53.09% 83.07% 100.00% 100.04% 100.03% 99.97% 98.83% 97.25% 100.00% 100.03% Management 47.52% 53.53% 82.57% 99.47% 99.91% 99.99% 97.92% 101.47% 97.52% 99.24% 100.00% Total Expense Reimbursement 47.38% 53.09% 83.01% 99.96% 100.01% 100.01% 99.80% 99.09% 97.27% 99.95% 100.02% A R G U S - Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 3 Of TWA R E 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date: 8/31/10 Time: 3:19 pm Ref# : ADU Prospective Pro Page: 4 Pros p party Resale Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Resale Amount Gross Proceeds from Sale $1,407,916 $1,543,179 $1,653,421 $1,701,126 $1,709,705 $1,704,200 $1,506,042 $1,514,179 $1,562,789 $1,559,747 Commissions & Adjustments (28,158) (30,864) (33,068) (34,023) (34,194) (34,084) (30,121) (30284) (31,256) (31,195) Net Proceeds From Sale $1,379,758 $1,512,315 $1,620,353 $1,667,103 $1,675,511 $1,670,116 $1,475,921 $1,483,895 $1,531,533 $1,528,552 I yy A R G US" Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 5 0 f T N A R E 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date: 8/31/10 Time: 3:19 pm Ref# : ADU Prospective Present Value Page : 5 Cash Flow Before Debt Service plus Property Resale Discounted Annually (Endpoint on Cash Flow & Resale) over a 10 -Year Period For the P.V. of P.V. of P.V. of P.V. of P.V. of Analysis Year Annual Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Period Ending Cash Flow @ 9.50% 10.00% @ 10.50% @ 11.00% @ 11.50% Year 1 Aug -2011 $130,379 $119,068 $118,526 $117,990 $117,459 $116,932 Year 2 Aug -2012 114,806 95,749 94,881 94,024 93,179 92,345 Year 3 Aug -2013 128,414 97,807 96,480 95,176 93,895 92,638 Year 4 Aug -2014 157,075 109,257 107,284 105,356 103,470 101,626 Year 5 Aug -2015 161,607 102,658 100,345 98,095 95,906 93,775 Year 6 Aug -2016 162,422 94,223 91,683 89,222 86,837 84,527 Year 7 Aug -2017 161,899 85,772 83,080 80,484 77,980 75,565 Year 8 Aug -2018 131,161 63,459 61,188 59,007 56,915 54,904 Year 9 Aug -2019 108,940 48,135 46,201 44,353 42,587 40,899 Year 10 Aug -2020 148,465 59,908 57,239 54,702 52,287 49,990 Total Cash Flow 1,405,168 876,036 856,907 838,409 820,515 803,201 Property Resale @ 9.50% Cap 1,528,552 616,792 589,323 563,193 538,332 514,673 Total Property Present Value $1,492,828 $1,446,230 $1,401,602 $1,358,847 $1,317,874 Rounded to Thousands $1,493,000 $1,446,000 $1,402,000 $1,359,000 $1,318,000 Per SgFt 149.28 144.62 140.16 135.88 131.79 Percentage Value Distribution Assured Income 48.18% 48.87% 49.56% 50.25% 50.94% Prospective Income 10.50% 10.38% 10.26% 10.13% 10.01% Prospective Property Resale 41.32% 40.75% 40.18% 39.62% 39.05% 100,00% 100.00% 100.00% 100.00% 100.00% A R G U S TM Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 s o G U a 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date: 8/31/10 Time: 3:19 pm Ref# : ADU Page: 6 Property Summary Report Timing & Inflation Reporting Period: September 1, 2010 to August 31, 2020; 10 years Inflation Month: Analysis Start General Inflation Rate: 3.00% Property Size & Occupancy Property Size: 10,000 Square Feet Alternate Size: 1 Square Foot Number of rent roll tenants: 7 Total Occupied Area: 10,000 Square Feet, 100.00 %, during first month of analysis General Vacancy Method: Percent of Potential Gross Revenue Rate: 10.00% Property Purchase & Resale Purchase Price: - Resale Method: Capitalize Net Operating Income Cap Rate: 9.50% Cap Year: Year 11 Commission /Closing Cost: $31,195 Net Cash Flow from Sale: $1,528,552 Present Value Discounting Discount Method: Annually (Endpoint on Cash Flow & Resale) Unleveraged Discount Rate: 10.50% Unleveraged Present Value: $1,401,602 at 10.50% A R G U S" Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 615 66th Avenue North File : 2010-0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property p y :Retail Portfolio: Date: 8/31/10 Time: 3:20 pm Ref# : ADU Presentation Rent Roll &Current Term Tenant Summary Page:1 As of Sep -2010 for 10,000 Square Feet Description Area Base Rent Rent Adjustments & Categories Abatements Reimbursement Leasing Costs Upon Expiration Tenant Name Floor Rate & Amount CPI & Current Months Pcnt Description of lmprvmnts Commssns Assumption about Type & Suite Number SgFt per Year Changes Changes Porters' Wage to to Operating Expense Rate Rate subsequent terms Lease Dates & Term Bldg Share per Month on to Miscellaneous Abate Abate Reimbursements Amount Amount for this tenant 1 Checkers $23.00 Mar - 2014 $27.00 - Net: Pays a full Market Retail, Suite: 1 1,800 $41,400 pro -rata share of See assumption: Mar 2009 to Feb -2019 18.00% $1.92 all reimbursable Retail -End Cap 120 Months $3,450 expenses. 2 Regal Chiropractic $26.00 Sep -2012 $28.60 Net: Pays a full Market Retail, Suite: 2 1,435 $37,310 pro -rata share of See assumption: Sep -2007 to Aug -2017 14.35% $2.17 all reimbursable Inline Space 120 Months $3,109 expenses. 3 Soleil Beauty $13.85 May -2010 $18.46 - - - Full Service: - - Market Retail, Suite: 3 1,300 $18,000 Pays no expense See assumption: May -2009 to Apr -2012 13.00% $1.15 reimbursement. Inline Space 36 Months $1,500 4 Pure Nail $14.52 Apr -2010 $19.35 Full Service: Market Retail, Suite: 4 1,240 $18,000 Nov -2010 $14.52 Pays no expense See assumption: Feb -2010 to Jan -2013 12.40% $1.21 Apr -2011 $19.35 reimbursement. Inline Space 36 Months $1,500 Nov -2011 $14.52 Apr -2012 $19.35 Nov 2012 $14.52 5 Dollar $18.46 Full Service: Market Retail, Suite: 5 1,300 $24,000 Pays no expense See assumption: Jun -2010 to May -2013 13.00% $1.54 reimbursement. Inline Space 36 Months $2,000 6 Wireless Store $12.63 Jun -2011 $16.84 Full Service: Market Retail, Suite: 6 1,425 $18,000 Pays no expense See assumption: Jun -2010 to May -2012 14.25% $1.05 reimbursement. Inline Space 24 Months $1,500 7 Jimmy John's $23.00 Feb 2015 $25.00 Net: Pays a full Market Retail, Suite: 7 1,500 $34,500 pro-rata share of See assumption: Feb -2010 to Jan -2019 15.00% $1.92 all reimbursable Retail -End Cap 108 Months $2,875 expenses. Total Occupied SgFt 10,000 Total Available SgFt 0 _� Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 s o e r w n a e 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date: 8/31/10 Time: 3:23 pm Ref# : ADU Page : 1 Occupancy Rates - Occupied Total Physical Occupancy Based on Absorption & Turnover Vacancy Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Square Feet Occupied September 10,000 10,000 10,000 10,000 10,000 10,000 10,000 8,565 10,000 10,000 10,000 October 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 November 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 December 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 January 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 February 10,000 10,000 8,760 10,000 10,000 10,000 10,000 10,000 8,500 10,000 10,000 March 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 8,200 10,000 10,000 April 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 May 10,000 8,700 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 June 10,000 8,575 8,700 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 July 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 August 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Average Occupied For The Year 10,000 9,773 9,788 10,000 10,000 10,000 10,000 9,880. 9,725 10,000 10,000 I i A R G U 5,, Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 P jk 5O F I w � a E 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date: 8/31/10 Time: 3:24 pm Ref# : ADU Retail -End Cap Page: 1 Market Leasing Assumption Results In Inflated Dollars for the Fiscal Year Beginning 9/01/10 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Renewal Probability 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% Market Rent $ /SgFt/Yr New: 22.00 22.66 23.34 24.04 24.76 25.50 26.27 27.06 27.87 28.71 29.57 Renewal: 22.00 22.66 23.34 24.04 24.76 25.50 26.27 27.06 27.87 28.71 29.57 Result: 22.00 22.66 23.34 24.04 24.76 25.50 26.27 27.06 27.87 28.71 29.57 Months Vacant New: 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Renewal: 0 0 0 0 0 0 0 0 0 0 0 Rounded: 1 1 1 1 1 1 1 1 1 1 1 Tenant Improvements $ /SgFt New: 10.00 10.30 10.61 10.93 11.26 11.59 11.94 12.30 12.67 13.05 13.44 Renewal: 3.00 3.09 3.18 3.28 3.38 3.48 3.58 3.69 3.80 3.91 4.03 Result: 5.10 5.25 5.41 5.57 5.74 5.91 6.09 6.27 6.46 6.65 6.85 Leasing Commissions $ /SgFt New: 5.00 5.15 5.30 5.46 5.63 5.80 5.97 6.15 6.33 6.52 6.72 Renewal: 2.50 2.58 2.65 2.73 2.81 2.90 2.99 3.07 3.17 3.26 3.36 Result: 3.25 3.35 3.45 3.55 3.66 3.77 3.88 4.00 4.12 4.24 4.37 Rent Abatements New: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Renewal: 0.00 0.00 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Result: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (continued on next page) j °L A R G U S �" Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 5 p F T Y10. R E 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date : 8/31/10 Time: 3:24 pm Ref# : ADU Page: 2 Retail -End Cap Market Leasing Assumption Results In Inflated Dollars for the Fiscal Year Beginning 9101/10 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Non - Weighted Items Rent Changes Retail Rent Changes Reimbursements Net Net Net Net Net Net Net Net Net Net Net Term Lengths in Year 60 60 60 60 60 60 60 60 60 60 60 No Term Overrides A R G U S'" Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 s o t i W A R E 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date: 8131/10 Time: 3:24 pm Ref# : ADU Page:3 Inline Space Market Leasing Assumption Results In Inflated Dollars for the Fiscal Year Beginning 9/01/10 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Renewal Probability 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% Market Rent $ /SgFt/Yr New: 12.00 12.36 12.73 13.11 13.51 13.91 14.33 14.76 15.20 15.66 16.13 Renewal: 12.00 12.36 12.73 13.11 13.51 13.91 14,33 14.76 15.20 15.66 16.13 Result: 12.00 12.36 12.73 13.11 13.51 13.91 14.33 14.76 15.20 15.66 16.13 Months Vacant New. 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Renewal: 0 0 0 0 0 0 0 0 0 0 0 Rounded: 1 1 1 1 1 1 1 1 1 1 1 Tenant Improvements $ /SgFt New. 7.00 7.21 7.43 7.65 7.88 8.11 8.36 8.61 8.87 9.13 9.41 Renewal: 2.00 2.06 2.12 2.19 2.25 2.32 2.39 2.46 2.53 2.61 2.69 Result: 3.50 3.61 3.71 3.82 3.94 4.06 4.18 4.30 4.43 4.57 4.70 Leasing Commissions $ /SgFt New: 5.00 5.15 5.30 5.46 5.63 5.80 5.97 6.15 6.33 6.52 6.72 Renewal: 2.50 2.58 2.65 2.73 2.81 2.90 2.99 3.07 3.17 3.26 3.36 Result: 3.25 3.35 3.45 3.55 3.66 3.77 3.88 4.00 4.12 4.24 4.37 Rent Abatements New: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Renewal: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Result: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (continued on next page) I fi R G U S - Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 615 66th Avenue North file 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date: 8 /31/10 Time: 3:24 pm Ref# : ADU Page: 4 Inline Space Market Leasing Assumption Results In Inflated Dollars for the Fiscal Year Beginning 9/01/10 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Non - Weighted Items Rent Changes Retail Rent Changes Reimbursements Net Net Net Net Net Net Net Net Net Net Net Term Lengths in Year 60 60 60 60 60 60 60 60 60 60 60 No Term Overrides A R G U 5 T" Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 o F. w � a e 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center s r Brooklyn Center, MN 55430 Property Type: Retail Portfolio: Date: 8/31/10 Time: 3:24 pm Ref# : ADU Page: 5 For the Year Ending 8/31/11 Market Leasing Assumption Results In Inflated Dollars for the Fiscal Year Beginning 9/01/10 MLA Categories Retail -End Inline Spac Renewal Probability 70.00% 70.00% Market Rent $ /SgFt/Yr $ /SgFt/Yr New: 22.00 12.00 Renewal: 22.00 12.00 Result: 22.00 12.00 Months Vacant New: 3.00 3.00 Renewal: 0 0 Rounded: 1 1 Tenant Improvements $ /SgFt $ /SgFt New: 10.00 7.00 Renewal: 3.00 2.00 Result: 5.10 3.50 Leasing Commissions $ /SgFt $ /SgFt New. 5.00 5.00 Renewal: 2.50 2.50 Result: 3.25 3.25 Rent Abatements New: 0.00 0.00 Renewal: 0.00 0.00 Result: 0.00 0.00 (continued on next page) rr r r� r� r■r rr r rr rr r � r rr �r rr� r r■� r rr G U .. Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 so F T n x e 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio: Date: 8/31110 Time: 3:24 pm Ref# : ADU Page: 6 For the Year Ending 8/31/11 Market Leasing Assumption Results In Inflated Dollars for the Fiscal Year Beginning 9/01/10 Non - Weighted Items Rent Changes Retail Rent Changes Reimbursements Net Net Term Lengths 60 60 Years Years Term Overrides No No _., >.. n. A ARGUS" A R G US' Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 5 OF T , A RE 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date: 8/31/10 Time: 3:24 pm Ref# : ADU Supporting Schedule — Detailed Lease Expiration Schedule (First Term Only) Page: 1 Market Base Rent Expiration Percent of No Tenant Suite Leasing /SgFt/Yr Date Square Feet Total 3 Soleil Beauty 3 Wine Spec 15.40 4/12 1,300 13.0 6 Wireless Store 6 Inline Spec 14.69 5/12 1,425 14.3 Total for Year Ending Aug- 2,725 27.3% 4 Pure Nail 4 Inline Spec 13.22 1/13 1,240 12.4 5 Dollar 5 Inline Spac 15.97 5/13 1,300 13.0 ----- - - - - -- ----- - - - - -- Total for Year Ending Aug- 2,540 25.4% 2 Regal Chiropractic 2 Inline Spec 28.60 8117 1,435 14.4 Total for Year Ending Aug- 1,435 14.4% 7 Jimmy John's 7 Retail -End 24.35 1/19 1,500 15.0 1 Checkers 1 Retail -End 25.11 2/19 1,800 18.0 Total for Year Ending Aug- 3,300 33.0% Building Total 10,000 100.0% rr rr r r r r r r r r rr rr r rr �r r rr rr rr A R G U 5 "' Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 s a F r w n a e 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date: 8/31/10 Time: 3:24 pm Ref# : ADU Page: 2 Supporting Schedule - Square Feet Expiring - (All Terms) Month One Lease First Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 For the Years Ending Occupied Area Start Expiration Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Tenant Suite Soleil Beauty 3 1,300 5/09 4/12 1,300 Wireless Store 6 1,425 6/10 5/12 1,425 Pure Nail 4 1,240 2110 1/13 1,240 Dollar 5 1,300 6/10 5/13 1,300 Regal Chiropractic 2 1,435 9107 8/17 1,435 Jimmy John's - 7 1,500 2/10 1/19 Checkers 1 1,800 3/09 2119 Total SgFt Expiring 10,000 2,725 2,540 1,435 Percent Of Total Expiring 27.3% 25.4% 14.4% I I A R G U S` Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 s OFT W A RE 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center k Brooklyn Center, MN 55430 Property Type: Retail Portfolio: Date : 8/31/10 Time: 3:24 pm Ref# : ADU Supporting Schedule — Square Feet Expiring — (All Terms) Page: 3 Month One Lease First Year 9 Year 10 Year 11 For the Years Ending Occupied Area Start Expiration Aug -2019 Aug -2020 Aug -2021 Tenant Suite Soleil Beauty 3 1,300 5/09 4/12 Wireless Store 6 1,425 6/10 5/12 Pure Nail 4 1,240 2/10 1113 Dollar 5 1,300 6/10 5/13 Regal Chiropractic 2 1,435 9/07 8/17 Jimmy John's 7 1,500 2/10 1/19 1,500 Checkers 1 1,800 3/09 2/19 1,800 Total SgFt Expiring 10,000 3,300 - ---- - - -- -- --- -- - - - - -- ----- -- - - -- Percent Of Total Expiring 33.0% A Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 R G US' s o f T w a a E 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio Date: 8/31110 Time: 3:24 pm Ref# : ADU Page : 4 Supporting Schedule - Occupancy & Absorption Rates Physical Occupancy Based on Absorption & Turnover Vacancy Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 SgFt Occupied September 10,000 10,000 10,000 10,000 10,000 10,000 10,000 8,565 10,000 10,000 10,000 October 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 November 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 December 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 January 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 February 10,000 10,000 8,760 10,000 10,000 10,000 10,000 10,000 8,500 10,000 10,000 March 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 8,200 10,000 10,000 April 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 May 10,000 8,700 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 June 10,000 8,575 8,700 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 July 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 August 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Average Occupied For The Year 10,000 - 9,773 9,788 10,000 10,000 10,000 10,000 9,880 9,725 10,000 10,000 ----------- ----- - - - - -- Net Absorption Annual Square Feet Absorbed Average Monthly Absorption Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Aug -2019 Aug -2020 Aug -2021 Percentage Occupancy September 100.00% 100.00% 100.00% 100.00% 100.00% 100,00% 100.00% 85.65% 100.00% 100.00% 100.00% October 100.00% 100.00 % 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% November 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% December 100.00% 100.00% 100.00% 100.00 % 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% January 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% February 100.00% 100.00% 87.60% 100.00% 100.00% 100.00% 100.00% 100.00% 85.00% 100.00% 100.00% March 100.00% 100.00% 100.00 % 100.00% 100.00% 100.00% 100.00% 100.00% 82.00% 100.00% 100.00% April 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% May 100.00% 87.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% June 100.00% 85.75% 87.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% July 100.00% 100.00% 100.00% 100,00% 100.00% 100.00 % 100.00% 100.00% 100.00% 100.00 % 100.00 August 100.00% 100.00 % 100.00 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Average Occupancy For The Year 100.00% 97.73% 97.88% 100.00% 100.00% 100.00% 100.00% 98.80% 97.25% 100.00% 100.00% Net Absorption Annual Percentage Absorbed Average Monthly Percentage A R G U S TI Brooklyn Center Retail Center ` Software: ARGUS Ver. 14.0.2 E o F T w A R E 615 66th Avenue North File: 2010-0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date : 8 131/10 Time: 3:24 pm Ref# : ADU Supporting Schedule - Average Square Feet Occupancy Page: 5 Month One Lease First Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 For the Years Ending Occupied Area Start Expiration Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Tenant Suite Checkers 1 1,800 3/09 2/19 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 Regal Chiropractic 2 1,435 9/07 8/17 1,435 1,435 1,435 1,435 1,435 1,435 1,435 1,315 Soleii Beauty 3 1,300 5/09 4/12 1,300 1,192 1,300 1,300 1,300 1,300 1,300 1,300 Pure Nail 4 1,240 2/10 1/13 1,240 1,240 1,137 1,240 1,240 1,240 1,240 1,240 Dollar 5 1,300 6/10 5113 1,300 1,300 1,192 1,300 1,300 1,300 1,300 1,300 Wireless Store 6 1,425 6/10 5/12 1,425 1,306 1,425 1,425 1,425 1,425 1,425 1,425 Jimmy John's 7 1,500 2/10 1/19 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 Total Amount Per Year 10,000 10,000 9,773 9,788 10,000 10,000 10,000 10,000 9,880 ----------- ----- - -- - -- ---- - - - - - -- ----- - - - - -- ----- - - - - -- ----- - - - - -- Average Percent Occupancy 100.00% 97.73% 97.88% 100.00% 100.00% 100.00% 100.00% 98.80% i R 0 us r r rr rr �r rr r rr rr r r ■r �r rr rr rr r rr r A R G US' Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date : 8/31110 Time: 3:24 pm Ref# : ADU Page : 6 Supporting Schedule - Average Square Feet Occupancy Month One Lease First Year 9 Year 10 Year 11 For the Years Ending Occupied Area Start Expiration Aug -2019 Aug -2020 Aug -2021 Tenant Suite Checkers 1 1,800 3/09 2/19 1,650 1,800 1,800 Regal Chiropractic 2 1,435 9/07 8/17 1,435 1,435 1,435 Soleil Beauty 3 1,300 5/09 4/12 1,300 1,300 1,300 Pure Nail 4 1,240 2/10 1/13 1,240 1,240 1,240 Dollar 5 1,300 6/10 5/13 1,300 1,300 1,300 Wireless Store 6 1,425 6/10 5/12 1,425 1,425 1,425 Jimmy John's 7 1,500 2/10 1/19 1,375 1,500 1,500 Total Amount Per Year 10,000 9,725 10,000 10,000 Average Percent Occupancy 97.25% 100.00% 100.00% A R G U S" Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 o t T W A R E 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date: 8/31110 Time: 3:24 pm Ref# : ADU Supporting Schedule - Scheduled Base Rental Revenue Page:? Month One Lease First Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 For the Years Ending Occupied Area Start Expiration Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Tenant Suite Checkers 1 1,800 3/09 2/19 41,400 41,400 41,400 45,000 48,600 48,600 48,600 48,600 Regal Chiropractic 2 1,435 9/07 8/17 37,310 37,310 41,041 41,041 41,041 41,041 41,041 19,414 Soleil Beauty 3 1,300 5/09 4/12 24,000 20,017 16,068 16,068 16,068 16,068 16,068 16,068 Pure Nail 4 1,240 2/10 1/13 21,500 21,500 16,393 15,786 15,786 15,786 15,786 15,786 Dollar 5 1,300 6/10 5/13 24,000 24,000 20,758 16,550 16,550 16,550 16,550 16,550 Wireless Store 6 1,425 6/10. 5/12 19,500 20,936 17,613 17,613 17,613 17,613 17,613 17,613 Jimmy John's 7 1,500 2/10 1/19 34,500 34,500 34,500 34,500 36,250 37,500 37,500 37,500 Total Amount Per Year 10,000 202,210 199,663 187,773 186,558 191,908 193,158 193,158 171,531 Weighted Average Per SgFt 20.22 19.97 18.78 18.66 19.19 19.32 19.32 17.15 A S - Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 5 o F r 1 +� c r 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date: 8/31/10 Time: 3:24 pm Ref# : ADU Page: 8 Supporting Schedule - Scheduled Base Rental Revenue Month One Lease First Year 9 Year 10 Year 11 For the Years Ending Occupied Area Start Expiration Aug -2019 Aug -2020 Aug -2021 Total Tenant Suite Checkers 1 1,800 3/09 2/19 45,202 50,164 50,164 509,130 Regal Chiropractic 2 1,435 9/07 8/17 21,178 21,178 21,178 362,773 Soleil Beauty 3 1,300 5/09 4/12 16,068 16,068 16,068 188,629 Pure Nail 4 1,240 2/10 1/13 15,786 15,786 15,786 185,681 Dollar 5 1,300 6/10 5113 16,550 16,550 16,550 201,158 Wireless Store 6 1,425 6/10 5/12 17,613 17,613 17,613 198,953 Jimmy John's 7 1,500 2/10 1/19 36,527 41,803 41,803 406,883 Total Amount Per Year 10,000 168,924 179,162 179,162 2,053,207 Weighted Average Per SgFt 16.89 17.92 17.92 ----------- ----- - - - - -- ----- - - - - -- ----- - - - - -- A A R G US Ilk S * Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date : 8/31/10 Time: 3:24 pm Ref# : ADU Page:9 Supporting Schedule — Absorption & Turnover Vacancy Month One Lease First Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 For the Years Ending Occupied Area Start Expiration Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Tenant Suite Checkers 1 1,800 3/09 2/19 Regal Chiropractic 2 1,435 9107 8/17 1,765 Soleil Beauty 3 1,300' 5/09 4/12 1,339 Pure Nail 4 1,240 2/10 1/13 1,316 Dollar 5 1,300 6/10 5113 1,379 Wireless Store 6 1,425 6/10 5/12 1,468 Jimmy John's 7 1,500 2/10 1119 Total Amount Per Year 10,000 2,807 2,695 1,765 Weighted Average Per SgFt 0.28 0.27 0.18 i .ra„" n�ARGUS'" R G U S ' Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 s u . T w n a e 615 66th Avenue North File : 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio : Date: 8/31/10 Time: 3:24 pm Ref# : ADU Page: 10 Supporting Schedule — Absorption & Turnover Vacancy Month One Lease First Year 9 Year 10 Year 11 For the Years Ending Occupied Area Start Expiration Aug -2019 Aug -2020 Aug -2021 Total Tenant Suite Checkers 1 1,800 3/09 2/19 4,180 4,180 Regal Chiropractic 2 1,435 9/07 8/17 1,765 Soleil Beauty 3 1,300 5/09 4/12 1,339 Pure Nail 4 1,240 2/10 1/13 1,316 Dollar 5 1,300 6/10 5/13 1,379 Wireless Store 6 1,425 6/10 5/12 1,468 Jimmy John's 7 1,500 2/10 1/19 3,484 3,484 Total Amount Per Year 10,000 7,664 14,931 Weighted Average Per SgFt 0.77 i I ' I .._ t pARG US" R G U Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 3 o F T w n R e 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date: 8/31/10 Time: 3:24 pm Ref# : ADU Supporting Schedule - Expense Reimbursement Revenue Page:11 Month One Lease First Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 For the Years Ending Occupied Area Start Expiration Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Tenant Suite Checkers 1 1,800 3/09 2/19 15,890 16,373 16,901 17,456 17,988 18 18,971 19,456 Regal Chiropractic 2 1,435 9/07 8/17 12,668 13,052 13,474 13,917 14,340 14,747 15,125 14,238 Soleil Beauty 3 1,300 5/09 4/12 2,986 12,207 12,608 12,992 13,359 13,701 14,051 Pure Nail 4 1,240 2/10 1/13 5,885 12,026 12,392 12,742 13,070 13,401 Dollar 5 1,300 6/10 5/13 2,056 12,608 12,992 13,359 13,701 14,051 Wireless Store 6 1,425 6/10 5/12 2,183 13,380 13,820 14,239 14,645 15,021 15,401 Jimmy John's 7 1,500 2/10 1/19 13,241 13,642 14,085 14,548 14,988 15,416 15,811 16,213 Total Amount Per Year 10,000 41,799 48,236 77,988 96,983 99,931 102,767 105,400 106,811 Weighted Average Per SgFt 4.18 4.82 7.80 9.70 9.99 10.28 10.54 = = = == = 10.68 I i 'I� A ' Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 5 O F T itl R R E 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date: 8131110 Time: 3:24 pm Ref# : ADU Page:12 Supporting Schedule - Expense Reimbursement Revenue Month One Lease First Year 9 Year 10 Year 11 For the Years Ending Occupied Area Start Expiration Aug -2019 Aug -2020 Aug -2021 Total Tenant Suite Checkers 1 1,800 3/09 2/19 18,288 20,548 21,144 201,514 Regal Chiropractic 2 1,435 9/07 8/17 15,917 16,382 16,856 160,716 Soleil Beauty 3 1,300 5/09 4/12 14,421 14,840 15,271 126,436 Pure Nail 4 1,240 2/10 1/13 13,755 14,157 14,566 111,994 Dollar 5 1,300 6/10 5/13 14,421 14,840 15,271 113,299 Wireless Store 6 1,425 6/10 5/12 15,807 16,267 16,740 137,503 Jimmy John's 7 1,500 2/10 1/19 15,239 17,123 17,620 167,926 Total Amount Per Year 10,000 107,848 114,157 117,468 1,019,388 ----- - - - - -- - ---- - - - - -- --- -- - - - - -- -- --- - - - - -- Weighted Average Per SgFt 10.78 11.42 11.75 ----- - - - - -- ----- - - - - -- ----- - - - - -- ----- - - - - -- ----------- ----- - - - - -- ----- - - - --- ----- -- - - -- i .,...,n..-, ARGU5.. R C U 5 "" Brooklyn Center Retail Center A 615 66th Avenue North Software: ARGUS Ver. 14.0.2 : o F T w A a F File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date: 8/31/10 Time: 3:24 pm Ref# : ADU . Supporting Schedule - Tenant Improvements Page: 13 Month One Lease First Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 For the Years Ending Occupied Area Start Expiration Aug -2011 Aug -2012 Aug -2013 _ Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Tenant Suite Checkers 1 1,800 3/09 2119 Regal Chiropractic 2 1,435 9/07 8/17 6,177 Soleil Beauty 3 1,300 5/09 4/12 4,687 Pure Nail 4 1,240 2110 1/13 4,604 Dollar 5 1,300 6/10 5/13 4,827 Wireless Store 6 1,425 6/10 5/12 5,137 Jimmy John's 7 1,500 2/10 1119 Total Amount Per Year 10,000 9,824 9,431 6,177 ----- - - - - -- ----- - - - - -- ----- - - - - -- - Weighted Average Per SgFt 0.98 0.94 0.62 I A R G U 5 Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 : o F T W A s E 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date: 8/31/10 Time: 3:24 pm Ref# : ADU Page: 14 Supporting Schedule — Tenant Improvements Month One Lease First Year 9 Year 10 Year 11 For the Years Ending Occupied Area Start Expiration Aug -2019 Aug -2020 Aug -2021 Total Tenant Suite Checkers 1 1,800 3109 2/19 11,629 11,629 Regal Chiropractic 2 1,435 9/07 8117 6,177 Soleil Beauty 3 1,300 5/09 4/12 4,687 Pure Nail 4 1,240 2/10 1/13 4,604 Dollar 5 1,300 6/10 5/13 4,827 Wireless Store 6 1,425 6/10 5112 5,137 Jimmy John's 7 1,500 2/10 1/19 9,691 9,691 Total Amount Per Year 10,000 21,320 46,752 Weighted Average Per SgFt 2.13 ----- - - - --- ----- - - - - -- ----- - - - - -- -- --- - - - --- I A R G U 5- Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 s of twa a e 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type : Retail Portfolio : Date : 8/31/10 Time: 3:24 pm Ref# : ADU Supporting Schedule — Leasing Commissions Page: 15 Month One Lease First Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 For the Years Ending Occupied Area Start Expiration Aug -2011 Aug -2012 Aug -2013 Aug -2014 Aug -2015 Aug -2016 Aug -2017 Aug -2018 Tenant Suite Checkers 1 1,800 X3/09 2/19 Regal Chiropractic 2 1,435 9/07 8/17 5,736 Soleil Beauty 3 1,300 5/09 4/12 4,352 Pure Nail 4 1,240 2/10 1/13 4,275 Dollar 5 1,300 6/10 5/13 4,482 Wireless Store 6 1,425 6/10 5/12 4,770 Jimmy John's 7 1,500 2/10 1/19 Total Amount Per Year 10,000 9,122 8,757 5,736 Weighted Average Per SgFt 0.91 0.88 == =0.57 Brooklyn Center Retail Center Software: ARGUS Ver. 14.0.2 A R G U S' 615 66th Avenue North File: 2010 -0293 Brooklyn Center Strip Retail Center Brooklyn Center, MN 55430 Property Type: Retail Portfolio: Date: 8/31/10 Time: 3:24 pm Ref# : ADU Page: 16 Supporting Schedule — Leasing Commissions Month One Lease First Year 9 Year 10 Year 11 For the Years Ending Occupied Area Start Expiration Aug -2019 Aug -2020 Aug -2021 Total Tenant Suite Checkers 1 1,800 3/09 2/19 7,411 7,411 Regal Chiropractic 2 1,435 9/07 8/17 5,736 Soleil Beauty 3 1,300 5109 4/12 4,352 Pure Nail 4 1,240 2/10 1/13 4,275 Dollar 5 1,300 6/10 5/13 4,482 Wireless Store 6 1,425 6/10 5/12 4,770 Jimmy John's 7 1,500 2/10 1/19 6,176 6,176 Total Amount Per Year 10,000 13,587 37,202 Weighted Average Per SgFt 1.36 I I j k R 1 BROOKLYN CENTER STRIP RETAIL CENTER LETTER OF AUTHORIZATION i 1 1 1 1 1 1 1 ADDENDUM F 1 LETTER OF AUTHORIZATION i 1 1 1 i 1 1 i FILE NUMBER 124 - 2010 -0293 PAGE F1 Integra Realty Resources i BROOKLYN CENTER STRIP RETAIL CENTER LETTER OF AUTHORIZATION Status : A'wardedlContirmed Date Confirmed : 0am=010 Appraisal Requlred Date: 081 2010 ' Bid By Date: 0ah'11 Property Name : SP Brooklyn Center LLC Stre Address : 615 66th Avenue North ' Street Address 2: City : Brooklyn Center State : MN Zip Code : 55+430 - 1667 County : Hennepin Country : USA Property Contact: hkke Seery company: Street Address : Street Address 2 City Stste : Zip coda: - ' Phone : 24 32o-do19 Fax Email : Asset Class : Retail Property Status : Existing Proms Type : Other Retail Year BUMProposed Year Comp : 2007 Year Renovated Gross Building Area: 16,1000 sf #of Units: 7 Units Net Rentable Area : 0 st # of Tenants: 0 % Occupied: % Owner Occupied: 0 Land Area 112 Acres # of ]parcels: 0 # of Buildings : 1 # of Stories: 1 ' L2escra otIon Shopping Center ' Property Rights Appraised: Leased Fee Type of Report: Summary Scope of Work ; Standard Scope The appraisal includes any necessary data and analysis in swpart of the assignment remits with a thorough presenta6ari of the relevant ' data, analysis, and projections using all relevant approaches to value to produce credible value conclusion(s). Arrtsralser Inst Udi Please provide a summary appraisal report for the "as W market vakde of the property for the Leased Fee irrtarezt Please use the sates comparison appraadi end the income approach W 11hin bie report. If the cost approach is required to complete a credible opinion of value please Include It in bre report as vied. The appraisal should include any necessary data and analysis in support at the assignment results with a thorough presentation of the relevant data, analy and proJections using an relevant approaches to value to produce credible value co icdusion(s). Although the presentation of the appraisal Is a summary report, the market analysis section of the report must be detailed enough for the resider to understand the oasis for any oonc tussons, Please provide a fee quote vvith your earliest delivery. More favorable lining wits be considered in the selection of the appraiser. All tnfOrmatim aarill be provided by the property contact PNC Contact. TODD WISE Phone: 216 -222 -7233 Send to: TODD urISE Final hard cop 3 # Final report CD 's: 0 ' Print Re�cp:Ast �Clase 1r'yinderuv , 1 FILE NUMBER 124 -2010 -0293 PAGE F2 ' Integra Realty Resources 7, 7 :?F': r Written ADDeaI BRE / ESA P Portfolio LLC Extended Stay Hotel 2701 Freeway Blvd., Brooklyn Center PID # 35- 119 -21 -23 -0088 The following format is recommended for each written appeal. Please state owner(s) name and address. Review owner(s) statement of estimated market value or classification and presentation of factual information regarding the property. Assessor's statement of value or classification and presentation of factual information regarding the property. • Questions addressed to the Assessor. The Local Board of Appeal and Equalization considers the appeal and makes one of the following motions: • Refer the appeal to the Assessor's office for an interior review of the property and ' the Assessor's recommendation at the Local Board reconvene meeting on April 18, 2011. • Make no change and sustain the 2011 estimated market value or classification. If the owner(s) is not satisfied with the outcome of the Local Board of Appeal and Equalization they may appeal to the County Board of Appeal and Equalization. T City of Brooklyn Center ' A Millennium Community T0: 2011 Brooklyn Center Local Board of Appeal and Equalization RE: BRE /ESA P Portfolio LLC Extended Stay Hotel 2701 Freeway Blvd. Brooklyn Center, MN 55430 Katie Lightbourn, of Thomson Reuters Inc. (Property Tax Services), contacted the Assessor's office on ' March 27, 2011 regarding the 2011 estimated market value of $2,530,000 on the Extended Stay America Hotel. Ms. Lightbourn returned an application of appeal, along with a letter of representation, and income records. While the income and expense data was provided, it is considered confidential data and was reviewed by the city assessor but not included with this report. Ms. Lightbourn is requesting a reduction in the 2011 estimated market value to $2,224,219 based on a reduction in revenue. There was only one open market sale within the sales ratio study period, of a hotel of this size. The sale was an Americlnn hotel located in Andover, MN.. The hotel sold for $1,997,000 in June, 2010. The sale price did not include an additional $218,000 that was paid for personal property over and above the sale price. The buyer is expected to make $350,000 in improvements to the property to bring the property up to Americlnn standards. The property was constructed in 1998, and is in average condition. The property is the typical Americlnn model with large lobby, pool area and continental breakfast area, and includes 53 rooms. The sale price per room is $37,679. The income and expense proforma's on hotels are completed annual to arrive at an actual income approach, based on the income reported on the city lodging tax reports. The information provided by Ms. Lightbourn was reviewed but did not match the cities lodging tax report for the Extended Stay hotel. Lodging tax reports do not include "extended -long stays ", and after review with the City Finance Department, we determined an amount of "extended stay income" that should be added to the reported income on the lodging tax report to give a total income reflection on the proforma. As part of the review process the assessor requested Ms. Lightbourn contact her client for additional details corresponding to the income reported, including the average daily rate of typical lodging and extended stay rates. As of March 30, 2011, Ms. Lightbourn was unable to provide the data from her client. As the actual income approach is used to determine the 2011 estimated market value, the Assessor's is recommending sustaining the 2011 estimated market value at $2,530,000, or $24,327 per room, for taxes payable in 2012. Ms. Lightbourn was aware of the Assessor's recommendation and understood that should her client retrieve the requested data they could provide it by April 4, 2011 or appeal the 2011 estimated market value to the County Board. Respectfully, Nancy W ik, SAM City Assessor 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 www.cityof brooklyncenterorg ' City of BROOKLYN ' CENTER 2011 Local Board of Appeal and Equalization Katie Lightbourn - Thomson Reuters ' BRE /ESA P Portfolio LLC 2701 Freeway Blvd 35- 119 -21 -23 -0088 1 3 � ' 2011 Assessed Value: $2,530,000 Recommendation: Sustain Value of $2,530,000 1 This report is not an appraisal as defined in M.S. §82R02 (subd.3) nor does it comply with the Uniform Standards of ' Professional Appraisal Practice. It is intended to be used as a reference only and any use other than its intended use is prohibited and unlawfuL The author does not represent this to bean appraisal and is not responsible for any inappropriate use. It is a report ofpublic records using a mass appraisal technique. 1 City of Brooklyn Center Assessing Department ' 2011 Local Board of Appeal and Equalization Staff Report Katie Lightbourn - Thomson Reuters Property Owner(s): BRE/ESA P Portfolio LLC Property Address: 2701 Freeway Blvd ' PID #: 35- 119 -21 -23 -0088 Market Value Assessment Year 2011 $2,530,000 ' Assessment Year 2010 $2,993,600 Assessment Year 2009 $3,646,000 Sale «, July 11, 2005 - 3,630,000 (Ol - Warranty Deed) ' Comments: Katie Lightbourn, of Thomson Reuters Inc. (Property Tax Services), contacted the city on March 27, 2011 regarding the estimated market value of $2,530,000 on the Extended Stay America Hotel. Ms. Lightbourn completed an appeal application and letter of representation along with the requested income and expense data. The income and expense data is confidential and was reviewed by the city assessor' but not included with this report. The open market sales within the ' sales ratio study period included only one sale of a hotel of this size. This sale was an AmericInn hotel located in Andover, MN.. The hotel sold for $1,997,000 June 11, 2010. The sale price does not include $218,000 for personal property paid over and above the sale price. The buyer is expected to make $350,000 in improvements to bring the property up to AmericInn standards. The property was constructed in 1998, is in average condition and includes 53 rooms. The sale price per room is $37,679. The income and expense proforma's on hotels are completed based on the income reported on the lodging tax reports. The information provided by Ms. Lightbourn was reviewed but did not match the cities lodging tax report. Lodging tax reports do not include "extended -long stays" , after review with the City Finance Department we determined an amount ' of "extended stay income" that should be included in the income based proforma. As part of the review process the assessor requested from Ms. Lightbourn, additional details corresponding to the income reported, the average daily rate of typical lodging and extended stay rates. As of ' March 30, 2011, Ms. Lightbourn was unable to provide the data from her client. Assessor Recommendation: Sustain Value of $2.530,000 Appraiser: Last Inspection Date: Nancy Woicil: April 22, 2005 2011 Board of Appeal and Equalization 2 Katie Lightboum - Thomson Reuters Subject Data Summary ' P1D #: 35- 119 -21 -23 -0088 Buildings on File: 1 ' Property Name: Extended Stay America Property Address: 2701 Freeway Blvd Brooklyn Center, MN 55430 ' Multiple Address: No Lot /Block: 003/001 Addition: Shingle Creek 5th Addition Legal(120): ' Owner(s): BRE /ESA P Portfolio L Property Classification: Commercial 2011 EMV: 2,530,000 2010 EMV: 2,993,600 2009 EMV: 3,646,000 EMV /G BA: 55.67 Lot Size: 116,913 Sq.Ft. / 2.68 Acres ' Zoning: PUD /I 1 Gross Office Area Percent: Building Use: 343 - Motel /100% # Stories: 3 Avg Story Height: 10 Avg Clear Height: 8 Actual Year Built: 1998 ' Effective Year Built: 1999 Renovated Year: First Floor Area: 15,150 Gross Building Area: 45,450 ' Basement: No Parking: 2011 Board of Appeal and Equalization 3 Katie Lightbourn - Thomson Reuters Additional Subject Photos sr . a x 1 Nest Side 07/20/07 1 ' 2011 Board of Appeal and Equalization 4 Katie Lightbourn - Thomson Reuters ' Report Name: Images Cit y y of Brooklyn Center Printed: 3/30/2011 PID: 35- 119 -21 -23 -0088 Page: 1 Property Images gw HOTELS /MOTELS Brooklyn Center, Minnesota L:B 2011 Unit 2010 Unit # LOCATION AREAS Ratio 2011 EMV Values 2010 EMV Values 2009 EMV 1 Amedclnn Land 80,497 1.89 Land $670,000 $8.32 [/j Land $684,000 $8.50 (/j Land $684,000 2050 Freeway Blvd GBA 42,612 Building $1,314,000 $30.84 [q Building $1,316,000 $30.88 (I] Building $1,716,000 35- 119 -21.13 -0021 Rooms 83 Total $1,984,000 992.99 [/] Total $2,000,000 $46.94 (/] Total $2,400,000 Age 1998 Change 0.8 °% JIM Change 16.7% `- $24,Q96. R1 Change -35.3°% Scud l21)OB 84,000;000 n Bale E $$,6'8ow ' 2 Super 8 Land 104,085 2.84 Land $845,000 $8.12 [/] Land $885,000 $8.50 In Land $885,000 6445 James Circle GBA 36,696 Building $1,101,000 $30.00 [Q Building $1,061,000 $28.91 In Building $1,651,000 35- 119 -21-42 -0006 Rooms 102 $1,946,000 982.83 $1,946,000 $53.03 (/j $2,536,000 Age 1 980 Change 0.0% _ Change -23.3% $14,07 „ ,R Change -25.1% S fS/ CE ¢2,009 3 Days Inn Land 91,935 2.38 Land $745,000 $8.10 [>7 Land $790,000 $8.59 [/J land $790,000 6415 James Circle North GBA 38,700 Building $1,025,000 $26.49 [/J Building $1,035,000 $26.74 [/] Building $1,071,600 35. 119.21 -42 -0011 Rooms 92 Total $1,770,000 Total $1,825,000 $47.16 [/] Total $1,861,600 Age 1980 Change -3.0% 893.94 Change -2.0% $19;8 Rm Change 0.0% el _, 072 2211,S53,o00 . , 4 Comfort Inn Land 47,681 Land $410,000 $8.60 [q Land $420,000 $8.81 [g Land $420,000 1600 James Circle North GBA 27,504 Building $1,003,000 $36.47 [Q Building $993,000 $36.10 [n Building $1,470,000 35- 119.21.41 -0016 Rooms 60 Total $1,413,000 708.27 [I] Total $1,413,000 $51.37 [/] Total $1,890,000 Age 1995 Change 0.0% Change -25.2% $3,tS Rm', Change 1.0% ' 5 Crowne Plaza Land 264,528 2.15 Land $2,115,000 $8.00 [Q Land $2,115,000 $8.00 In Land $2,115,000 200 Freeway Blvd GBA 123,069 Building $1,485,000 $12.07 [/] Building $1,485,000 $12.07 (/j Building $3,620,000 35 -119 -21.13 -0012 Rooms 176 Total $3,600,000 1813.60 [!J Total $3,600,000 $29.25 [/] Total $5,735,000 Age 1985 Change 0.0% * Change -37.2% $20,465 , Change -13.4% Soul 100004 $s a5a,000 '.. (il W ' 6 Country Inn Land 231,000 7.77 Land $932,600 $4.04 [/j Land $1,035,000 $4.48 [Q Land $1,035,000 2550 Freeway Blvd. GBA 29,736 Building $1,350,000 $45.40 [ij Building $1,702,500 $57.25 [/] Building $2,637,500 35- 119 -21- 24.0008 Rooms 85 Total $2,282,600 1,143.01 [Q Total $2,737,500 $92.06 [Q Total $3,672,500 Age 1997 Change -16.6% $26,854 Rm Change - 25.5% 2 , ,Rrz v, Change -1.9% Said112tW5 419# , ,+ Useable Land 100,320 SR 2 102400 w /Antenna 7 Motel Land 100,016 2.42 Land $800,000 $8.00 m Land $850,000 $8.50 [/] Land $850,000 2741 Freeway Blvd GBA 41,412 Building $1,800,000 $43.47 [/1 Building $2,350,000 $56.75 [/] Building $3,100,400 36. 119 -21 -23 -0087 Rooms 127 Total $2,600,000 130000 /J Total $3,200,000 $77.27 [/] Total $3,950,400 Age 2000 Change - 18.8% Change -19.0% $25;1197 Rm , Change -2.0% �tiFET�et 08pa9 09]31 ' 8 Extended Stay America Land 116,970 2.57 Land $700,000 $5.98 [/] Land $792,600 $6.78 [!] Land $740,000 2701 Freeway Blvd GBA 45,450 Building $1,830,000 $40.26 [n Building $2,201,000 $48.43 [!] Building $2,906,000 35.119 -21.23 -0088 Rooms 104 Total $2,530,000 1,265.63 �n . Total $2,993,600 $65.87 [!] Total $3,646,000 So(d 7111/2405 CE $8, 4 " '', Age 1999 Change -15.5% � � ° Change - 17.9% $28,7 Ro- Change -4.7% ' Useable 87,077 Land 9 Embassy Suites Land 177,781 Land $1,475,000 $8.30 [q Land $1,475,000 $8.30 [/] Land $1,475,000 6300 Earle Brown Dr. GBA 164,335 Building $4,800,000 $29.21 1/1 Building $5,482,500 $33.36 [!] Building $5,954,000 ' 35 119 21 43 -0018 Rooms 175 Total $6,275,000 3,126.00 [q Total $6,957,500 $42.34 [1] Total $7,429,000 1 tI2�A0j 0jp0 Age 2008 Change -9.8% _ Change -17.1% $977 , Rm f Change 38.3% Gi1vf. EeraRG SdJa „{1 11e0 Improv $800,000 IMPROV $5,954 TOTALS Useable 1,214,493 Land $8,682,600 $7.16 M Land r $9,046,500 $7.45 [q Land $8,994;000 and GBA $49,514 Building $15,708,000 $28.59 [/J Building $17,626,000 $32.08 (/]_ Building $24,126,500 ' AVERAGES #Rms 1,004 Total $24,400,600 44.40 (/j Total $26,672,600 $48.54 [/] Total $33,120,500 Change 8:5 °% Change 21.9°% : u $26,666 Rm' Change! -9.9°% excluding Improv excluding Improv $800,000 excluding Improv 3/30/2011 RC: PROPERTY USE: Hotel MUNICIPALITY: ANDOVER Code: 332 RC . 00 COMPLEX NAME: AmericInn COUNTY: ANOKA GBA 26614 WD ADDRESS: 3430 Northdale Blvd PIN #: 05- 31 -24 -13 -0043 Seq #: 1 Ratio Y Comp: Y AUDITOR ID: MULTI PID: N COMMUNITY: NBRHOOD: a ' PROPERTY DESCRIPTION MARKET DATA Year Built/Effective Year Built: 1998 1998 Buyer: N/A ConstQuality/ Condition: AVERAGE AVERAGE Seller: Coon Rapids Lodge LLC Const Class/ No. of Bidgs: WD or steel stud Frm 1 Sale Data; Date of Sale: 6/11/10 Exterior Type/ Roof Type: Brick Gable Total Purchase Price: $1,997,000 2nd Exterior Typ Roof Cvr: Down Payment Amount: $430,000 SIZE & USES First Floor Area/ GBA: 15,354 SF 26,614 SF Other Terms: Total Floor Area/ NRA: SF TERMS Bldg Perim./ Shape/ Units: FT No Data Available ' Mezzanine Area/ Use: SF Cash Equivalent Price: 5.95% $1,997,000 Bsmt Area/ %Fin/ %: 0 SF 0% 0% GBA Cash Equivalent Adj: Bsmt Use: LESS: Personal Property: $0 Bsmt Fin/ W SF 0% GBA PLUS: Special Assessments: Ind:N $0 ' First Floor Use: Cash Equivalent of Real Estate: $1,997,000 First Floor SF/ %: 15,354 SF 58% GBA 2nd+ Floor Use: Sale Analysis: Sale Price Per Sq. R. TFA: ' 2nd+ Floor SF/ %: SF 0% GBA Sale Price Per Sq. Ft. GBA: $75.04 Tot Off Area: SF 0% GBA Sale Price Per Sq. Ft. NRA: Primary Heating/ Pct: Electric 100% Sale Price Per Sq. R. Land Area: $29.15 ' Secondary Heating/ Pct: Sale Price Per Room: Air Conditioning Pct: 100% Income Data: Sprinklers/ Elevators: ' Garage/ Ramp Spaces: PRIVATE DATA Surface Parking Space: Parking Surface Type: Rent Schedule: Multiple Tenancy: PRIVATE DATA ' Bldg Ht/ Avg Clear Ht: FT 9.0 FT # Stories: Avg. Finished Ceiling Ht: FT ' Total Land Area/ Topography: 68,500 SF Useable Land Area: 68,500 SF Zoning / Land Def Cd: c/i F Trackage/ Utilities: N Land Big Ratio / Excess Land: 2.57 to One N Environmental Concern Ind: ' Other Amenities: Summary Comments: Property originally listed in September of 2009 for $2,950,000, 53 room AmericInn. New 20 year franchise agreement. Buyer place 20% and utlized a SBA loan for financing. $350,000 capital requirement to bring deficiencies up to AmericInn standards. (THE $1,997,000 IS FROM THE CRV) Per buyer $218,000 was paid for the per property "FFE" He paid that above and over the RE sale price of $1,997,000. i. ' 1- 888 -4: 3-9432 THOMSON REUTERS 02:19:35 p.m. 17 -03 -2011 1/8 CITY OF BROOKLYN CENTER LOCAL BOARD OF APPEAL AND EQUALIZATION 2011 Assessment APPLICATION FOR APPEAL t - euruary 11, 4u 1 1 Li itUu9it marcri '10, /-U 1 i You must return this application by March 18 2011 to be placed on the Agenda for.the Local Board of Appeal and Equalization held April 4, 2011 at 7 :00 P.M. ' Name(s) BRE / ESA P Portfolio LLC Daytime Contact Number: ( 312) 980-1138 ' Property Address 2701 Freeway Boulevard Property Identification Number 35-119-21-23-0088 ' Assessor's 2011 Estimated Market Value $2, 530, 000 Is your property residential, commercial or multi - family? Commercial ' If you are appealing a commercial, multi- family or residential rental property you must include income and expense data For calendar year 2010 with your application. ' What is the reason you are appealing your 2011 assessment? See attached letter When did you purchase Y our home? Date of Purchase N/A Purchase Price ' Did you purchase your property from a bank, as a foreclosure or short sale? ' Has your property physically changed since the purchase? (maintenance, upgrades, remodeling or structural damage) Please list a brief description below with an estimated cost. Have you had a recent appraisal for refinancing, a purchase agreement or a market analysis ' by a real estate agent completed within the last year? Yes or No If so, what was the determination of value? What do you think the market value of your property should be? $2,224,219 ' Please provide any documentation supporting your claim of overvaluation or erroneous classification with this application. LAI 1- 888 -4'`3 -9432 THOMSON REUTERS 02 :20:00 p.m. 17 -03 -2011 2/8 ' t 1 EXTENDEDSTAY LETTER OF AUTHORIZATION — 2011 To Whom It May Concern: THE FOLLOWING PROPERTY OWNERIASSESSEE (JAMES: ESA Canada Properties Trust ESA P Portfolio LLC 1 ESA P Portfolio MD Trust ESA UD Properties LLC ESD #5050 - Houston - Katy Freeway LLC , ESD #5059 - Houston - Sugar Land LLC ESHITN Properties LLC HFI Acquisitions Company ' Hereby appoints Thomson Reuters (Property Tax Services) Inc, as authorized representative on matters pertaining to ad valorem taxes for property owned or otherwise controlled by our company, its ' subsidiaries or partnerships. Thomson Reuters (Property Tax Services) Inc. may examine records, obtain copies of tax statements (all original tax bills are to be mailed to owner), discuss flax assessments with property tax authorities and assist with appeals of valu lions. BY: NAME: it W Shaw- Tax Director - HVM 11C, Robert W ' . Shaw as manager For the Extended Stay Hotels Companies TITLE Tax Director 864.573.1869 rshaw @extendedstay.com Subscribed and sworn before me this / & +• day,of January 4 2011. Frances P. Parker AVirsstaa es Qctoberl3, 2013 , NOTARY PUBLIC, STATE OF South Carolina COUNTY OF: 8oartanburo My commission expires the 13th day of October 2013. Extended Stay Hotels" Extended Stay America® too Dunbar Street Homestead Studio Suites® Spartanburg, South Carolina 29306 , StudioPLUSe Tel 84573.t600 Extended Stay Deluxe`" Extended StayHotels.com 1- 888 -08 -9432 THOMSON REUTERS 02:20:25 .m. 17 -03 -2011 318 1 p THOMSON REUTERS March 17, 2011 Via Fax 1 City of Brooklyn Center 1 Local Board of Appeal and Equalization 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 -2199 1 RE: 2011 Real Estate Valuation Appeal BRE/ESA P Portfolio LLC 2701 Freeway Boulevard, Brooklyn Center, MN Pro a Identification Number: 35-119-21-23-0088 1 u rty Dear Members of the Board: ' This letter tt r represents the 2011 Real Estate Valuation Appeal for the above - referenced property ( "subject property ") which is owned by our client, BRE /ESA P Portfolio LLC. Description of the Subiect Property The subject property consists of a 104 -room Extended Stay otel located at 2701 Freeway Blvd in y y Brooklyn Center, MN. The proposed 2011 assessed value is $2,530,000 ($24,327/room). We � believe this proposed assessment is excessive and unwarranted for the reason stated below. Reconstructed Income and Expense Analysis 1 Enclosed is our year -end 2010 income and expense analysis, using actual 2010 income and expense data. The year -end 2010 revenue decreased approximately 6.0% from 2009 and our analysis indicates a value of $2,224,219 ($21,387/room). Based on these trends, we are requesting ' a value of $2,224,219. Thank you in advance for your cooperation and consideration of this matter. If you or your staff 1 has any questions or requires additional information, please contact either me at (312) 980 -1138 or Dan Tucker at (312) 980 -1172. Respectfully submitted, t ' Katie Lightbourn 311 South Wacker Drive ' Suite 2100 0+1312 9801122 Chicago, EL 60606 F +1888 488 9432 • thomsonreuters.com ' The reconvene of the Local Board of Appeal and Equalization as been set for Monday, April 18, 2011, at 6:00 p.m. in the Council Chambers.