Part of Argus Enterptise Manual

ARGUS Enterprise 11.0.4.
65 AE Case Study Manual –

Updated July 6, 2016
Hunnicutt Outlets – Case Study

Hunnicutt Outlets are a newly established retail center located in Richmond, Virginia.
Since its recent opening in May, it has become a successful and attractive area for
owners to start and grow their businesses. The owners of the property, Mr. and Mrs.
Poole, would like to see what the return on the center would be after a 10-year period.
The total purchase price for Hunnicutt was $18,500,000.
The total size of the outlet center is 100,000 SF. The analysis will begin in July of 2018
and will run on a calendar basis with General, Expense, and CPI inflation projected at
3.5% annually. Due to the desirability of the location, Market Rents are expected to
inflate at 6.0% annually.
The Outlet center has the following expenses that the tenants will reimburse. The
expenses are all growing at the Expense Inflation rate and are 100.0% fixed unless
otherwise noted.
Operating Expenses
Real Estate Taxes $250,000 paid in July of each year growing by 3.0%
Repairs & Maintenance $5.50/Rentable Area/Annually based on the Building Total,
25.0% Fixed
Insurance $130,000/Annually
The shopping center also has a Property Management Fee that is 4.0% of the Effective
Gross Revenue. This operating expense is not reimbursed by the tenants.
Market Data
In-Line Tenant New Market Renewal Market
Term Lengths: 5 years
Renewal Probability: 60.0%
Downtime: 3 months
Base Rent: $31.00/SF/Year $29.00/SF/Year
Reimbursement Method: Net
Tenant Improvements: $9.00/SF $7.00/SF
Leasing Commissions: 6.00% - Fixed % 3.0% - Fixed %
Percentage Rent: Continue Prior
Anchor Tenant New Market Renewal Market

Term Lengths: 10 years
Renewal Probability: 75.0%
Downtime: 3 months
Base Rent: $26.00/SF/Year $23.00/SF/Year
Reimbursement Method: Net
Tenant Improvements: $9.00/SF $7.00/SF
Leasing Commissions: 5.00% - Fixed % 3.0% - Fixed %
© 2016 ARGUS Software, Inc. All Rights Reserved.

ARGUS Enterprise 11.0.4.65 AE Case Study Manual –
Updated July 6, 2016
Percentage Rent: Continue Prior
Tenant Name Suite

Fixed Step Percentage Market
Start Date Size Recoveries
CPI Increase Rent Leasing
Term Length (SF)
$1,500,000
Mo’licious Cakes in Sales Net of all
Suite A In-Line
July 1, 2018 None 4.0% over a recoverable
22,500 Renew
6 years Natural expenses
Breakpoint
Bob’s Comics
$250.00/SF
Available: Analysis
in Sales Net share of
Begin Suite B 2.0% Fixed In-Line
2.0% over a Taxes &
Start: August 1, 15,000 Step Increase Market
Natural Insurance
2018
Breakpoint
8 years
Net of all
recoverable
Houston Doggie
$2.00/SF/Year, expenses +
Bakery Suite C In-Line
Increase each None 10% admin
June 1, 2018 12,000 Market
lease year fee on
5 years
Repairs &
Maintenance
Net share of
$650.00/SF Taxes &
Mack Daddy’s CPI increase in Sales Insurance
Suite D Anchor
July 1, 2018 Each Lease 3.0% over a $50,000
50,000 Market
10 years 6 months Anniversary Natural Fixed Amount
Breakpoint for Repairs &
Maintenance
Terminal Value
Cap the NOI in the 11th year / Cap NOI at 9.5% with 3.0% commission. Use a 10.5%
discount rate to determine the present value of the property.
Financing
There is a loan and it originates on the Analysis Begin date at $11,000,000 with an
interest rate of 9.25%. It is a 360 month note.
© 2016 ARGUS Software, Inc. All Rights Reserved.

Property Summary
Hunnicutt Outlets (Amounts in USD, Measures in SF)
Jul, 2018 through Jun, 2029
Property Information Purchase & Investment
Property Name Hunnicutt Outlets Purchase Price $18,500,000
Property ID # Closing Costs (0.00%) $0
Address Total Purchase Price $18,500,000
City, State Richmond, Virginia Less Debt Amount (59.46%) $11,000,000
Property Type Retail Equity $7,500,000
Building Area 100,000 SF
Analysis Begin Date Jul, 2018 Valuation & Yield
Length of Analysis 10 Years 0 Months Discount Rate 10.50%
General Inflation 3.50% Unleveraged PV $23,039,365 [$230.39/SF]
Market Inflation 6.00% Cap Rate 9.50%
Expense Inflation 3.50% Gross Income Multiplier N/A
CPI Inflation 3.50% Property Resale(Jun, 2028) $32,958,987 [$329.59/SF]
General Vacancy Rate 0.00% Direct Cap Rate 9.50%
Credit Loss Rate 0.00% Direct Cap Value $15,326,044 [$153.26/SF]
Occupancy (Year End) 99.50% Unleveraged IRR 13.72%
Occupancy (Average) 98.25% Recommended Hold End Jul, 2029
W A L E (Area) 8 Years 5 Months 5 Days IRR for Recommended Hold 15.20%
W A L E (Rent) 8 Years 2 Months 24 Days Breakeven Date Apr, 2028
NOI Yield 7.87%
Summary Cash Flow (Year 1) Amount Per SF Cash On Cash Yield -141.73%
Potential Gross Revenue 2490229 $24.90

Vacancy & Adjustments 0 0 Debt Financing Commercial Mortgage
Effective Gross Revenue 2490229 24.9 Loan Begins Jul, 2018
Operating Expenses -1034254 -10.34 Amount $11,000,000
Ground Lease Expenses 0 0 Interest Rate 9.25%
Net Operating Income 1455974 14.56 Term 360 Months
Leasing & Capital Costs 0 0 Payment $90,494 Monthly
Cash Flow Before Debt Service 1455974 14.56 Loan Costs
Debt Service -1085932 -10.86 Additional Loans 0 $0
Cash Flow After Debt Service 370042 $3.70 Loan to Present Value 47.74%
* Results displayed are based on Forecast data only Debt Coverage 1.34
Printed on 10/28/2016 1:18:16 PM
Tenant Summary
Tenant Information for the Period ending 6/30/2019
4 Tenants have been input 8 Years 5 Months 5 Days Avg remaining term 6.65% Avg occupancy cost
4 Current tenants totaling 99,500 SF $18.10 Avg lease rate / SF / Year
100.00% Stabilized Occupancy Not Reached $376.26 Avg sales / SF / Year
Top 5 Tenants by Area
Name Suite Lease Status Area % of NRA Start End Base Rent Market Rent Upon Expiry
1.Mack Daddy's D Contract 50000 50.00% 7/1/2018 12/31/2028 $18.25/SF/Year $23.75/SF/Year Market
2.Mo'licious Cakes A Contract 22500 22.50% 7/1/2018 6/30/2024 $19.00/SF/Year $29.80/SF/Year Renew
3.Bob's Comics B Contract 15000 15.00% 8/1/2018 7/31/2026 $17.25/SF/Year $29.80/SF/Year Market
4.Houston Doggie Bakery C Contract 12000 12.00% 6/1/2018 5/31/2023 $18.50/SF/Year $29.80/SF/Year Market
Market Leasing Assumptions In-Line Tenant Anchor Tenant

Term Length 5 Years 10 Years
Renewal Probability 60.00% 75.00%
Months Vacant 3.00 months 3.00 months
Months Vacant (Blended) 1.20 months 0.75 months
Market Base Rent (New) $31.00/SF/Year $26.00/SF/Year
Market Base Rent (Renewal) $29.00/SF/Year $23.00/SF/Year
Market Base Rent (Blended) $29.80/SF/Year $23.75/SF/Year
Market Rental Value Continue Prior Continue Prior
Use Market or Prior N/A N/A
Prior Rent N/A N/A
Fixed Steps None None
CPI Increase None None
Free Rent (New) 0.00 months 0.00 months
Free Rent (Renewal) 0.00 months 0.00 months
Free Rent (Blended) 0.00 months 0.00 months
Recovery Type Net Net
Miscellaneous Rent None None
Incentives None None
Tenant Improvements (New) $9.00/SF $9.00/SF
Tenant Improvements (Renew) $7.00/SF $7.00/SF
Tenant Improvements (Blended) $7.80/SF $7.50/SF
Leasing Commissions (New) 5.00% 5.00%
Leasing Commissions (Renew) 3.00% 3.00%
Leasing Commissions (Blended) 3.80% 3.50%
Sales Percentage ContinuePrior ContinuePrior
Sales Volume ContinuePrior ContinuePrior
Sales Breakpoint ContinuePrior ContinuePrior
Upon Expiration In-Line Tenant Anchor Tenant
* Results displayed are based on Forecast data only
Printed on 10/28/2016 1:18:18
PM
Executive Summary Report
10/28/2016 1:18:21 PM
Property Information Operations (Year 1)

Property Name Hunnicutt Outlets Effective Gross Revenue (% EGR) 2,490,229 (100.00%)
1,034,254 (41.53% /
Property ID # Operating Expenses (% EGR/$/SF)
10.34)
Property Type Retail Ground Lease Expenses (% EGR/$/SF) 0 (0.00% / 0.00)
Building Area 100,000 Net Operating Income (% EGR) 1,455,974 (58.47%)
City, State Richmond / Virginia Total Leasing & Capital Costs 0
Zip / Postal Code Cash Flow Before Debt Service 1,455,974
Country United States Debt Service (DSC) 1,085,932 (1.34)
Cash Flow after Debt Service 370,042
Purchase Price / Acquisition Investment (Net) 0
Acquisition / Valuation Date 7/1/2018 Cash Flow Available for Distribution 370,042
Purchase Price 18,500,000
Closing Costs 0 / 0.00% Occupancy Summary (Year 1)
Total Purchase Price 18,500,000 Average Occupancy - NRA / % 98,250 / 98.25%
Total Debt (% LTC) 11,000,000 / 59.46% Available SF for Absorption as of 7/1/2018 15,500
Total Equity 7,500,000 Net Absorption - NRA / % 15,000 / 15.00%
Property Assumptions (Year 1) WALE (as of PV/IRR Date)

General Inflation (Year 2) 3.50% WALE (Area) 8 Years 5 Months 5 Days
Market Inflation (Year 2) 6.00% WALE (Income) 8 Years 2 Months 24 Days
Expense Inflation (Year 2) 3.50%
CPI Inflation (Year 2) 3.50% Debt Overview (As of Loan Start Date) Commercial Mortgage
Capital Expenditures ($/SF) 0.00 Loan Start Date 7/1/2018
General Vacancy (%) 0.00% Loan Term 360 Months
Credit Loss Reserve (%) 0.00% Amortization Term 360 Months
Interest Rate 9.25%
Debt Service Payment 90,494 Monthly
Valuation and Returns

Unleveraged Cash Flow Rate 10.50%
Unleveraged Resale Rate 10.50%
Leveraged Cash Flow Rate 10.50%
Leveraged Resale Rate 10.50%
Exit Cap. Rate 9.50%
Present Value (Unleveraged) 23,039,365
Direct Capitalization Value @ 9.50 % 15,326,044
NOI Yield (Yr. 1) 7.87%
Cash on Cash Return (Yr. 1) 4.93%
IRR (Unleveraged) 13.72%
IRR (Leveraged) 17.75%
Optimal Sale Date and IRR July 2029[15.20%]

Printed on 10/28/2016 1:18:21
Cash Flow Report
Hunnicutt Outlets (Amounts in USD)
10/28/2016 1:18:22 PM
Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
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 Jun-2019 Jun-2020 Jun-2021 Jun-2022 Jun-2023 Jun-2024 Jun-2025 Jun-2026 Jun-2027 Jun-2028 Jun-2029 Total
Rental Revenue
Potential Base Rent 1,838,438 1,851,494 1,880,764 1,910,139 1,948,743 2,103,764 2,607,552 2,613,370 2,994,481 3,029,083 3,798,007 26,575,833
Absorption & Turnover
-37,250 0 0 0 -37,622 0 0 0 -59,371 0 -230,587 -364,829
Vacancy
Scheduled Base Rent 1,801,188 1,851,494 1,880,764 1,910,139 1,911,122 2,103,764 2,607,552 2,613,370 2,935,110 3,029,083 3,567,420 26,211,004
CPI Increases 0 31,937 64,993 99,205 134,615 171,264 209,195 248,455 289,088 331,144 187,336 1,767,232
Total Rental Revenue 1,801,188 1,883,431 1,945,756 2,009,344 2,045,736 2,275,027 2,816,747 2,861,825 3,224,198 3,360,227 3,754,756 27,978,236
Other Tenant Revenue

Percentage Rent 62,500 64,688 66,952 69,295 71,720 74,230 76,828 79,517 82,301 85,181 44,081 777,293
Total Expense Recoveries 626,541 652,279 672,058 692,491 701,178 726,613 749,706 771,517 880,905 933,493 894,957 8,301,738
Total Other Tenant Revenue 689,041 716,967 739,010 761,786 772,898 800,843 826,534 851,034 963,206 1,018,674 939,038 9,079,031
Total Tenant Revenue 2,490,229 2,600,398 2,684,766 2,771,130 2,818,634 3,075,871 3,643,281 3,712,859 4,187,404 4,378,901 4,693,794 37,057,267
Potential Gross Revenue 2,490,229 2,600,398 2,684,766 2,771,130 2,818,634 3,075,871 3,643,281 3,712,859 4,187,404 4,378,901 4,693,794 37,057,267
Effective Gross Revenue 2,490,229 2,600,398 2,684,766 2,771,130 2,818,634 3,075,871 3,643,281 3,712,859 4,187,404 4,378,901 4,693,794 37,057,267
Operating Expenses
Real Estate Taxes 250,000 257,500 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 335,979 3,201,949
Insurance 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
Property Insurance 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
Repairs & Maintenance 552,370 577,040 597,236 618,139 634,875 662,166 685,342 709,329 727,366 759,851 755,534 7,279,250
Property Management Fee 99,609 104,016 107,391 110,845 112,745 123,035 145,731 148,514 167,496 175,156 187,752 1,482,291
Total Operating Expenses 1,034,254 1,075,460 1,111,548 1,148,822 1,180,786 1,232,121 1,292,186 1,333,603 1,385,736 1,441,478 1,465,852 13,701,847
Net Operating Income 1,455,974 1,524,937 1,573,218 1,622,308 1,637,848 1,843,750 2,351,095 2,379,256 2,801,669 2,937,423 3,227,942 23,355,420
Leasing Costs
Tenant Improvements 0 0 0 0 0 111,167 193,608 0 154,067 0 661,007 1,119,848
Leasing Commissions 0 0 0 0 0 90,924 138,838 0 135,366 0 865,998 1,231,126
Total Leasing Costs 0 0 0 0 0 202,092 332,445 0 289,432 0 1,527,005 2,350,974
Total Leasing & Capital Costs 0 0 0 0 0 202,092 332,445 0 289,432 0 1,527,005 2,350,974
Cash Flow Before Debt Service 1,455,974 1,524,937 1,573,218 1,622,308 1,637,848 1,641,658 2,018,650 2,379,256 2,512,237 2,937,423 1,700,937 21,004,446
Debt Service
Interest
Commercial Mortgage 1,014,523 1,007,630 1,000,073 991,784 982,698 972,733 961,806 949,825 936,688 922,282 0 9,740,042
Total Interest 1,014,523 1,007,630 1,000,073 991,784 982,698 972,733 961,806 949,825 936,688 922,282 0 9,740,042
Principal
Commercial Mortgage 71,409 78,301 85,859 94,147 103,234 113,198 124,126 136,106 149,244 163,650 0 1,119,274
Total Principal 71,409 78,301 85,859 94,147 103,234 113,198 124,126 136,106 149,244 163,650 0 1,119,274
Total Debt Service 1,085,932 1,085,931 1,085,932 1,085,931 1,085,932 1,085,931 1,085,932 1,085,931 1,085,932 1,085,932 0 10,859,316
Cash Flow After Debt Service 370,042 439,006 487,286 536,377 551,916 555,727 932,718 1,293,325 1,426,305 1,851,491 1,700,937 10,145,130
Cash Flow Available for

370,042 439,006 487,286 536,377 551,916 555,727 932,718 1,293,325 1,426,305 1,851,491 1,700,937 10,145,130
Distribution
Printed on 10/28/2016
1:18:22 PM
Assumptions Report
10/28/2016 1:18:23 PM
For the Years Ending Jun-2019 Jun-2020 Jun-2021 Jun-2022 Jun-2023 Jun-2024 Jun-2025 Jun-2026 Jun-2027 Jun-2028 Jun-2029
Property Market Assumptions
General Inflation 0.00% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%
Market Inflation 0.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Expense Inflation 0.00% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%
CPI Inflation 0.00% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%
Capital Expenditures ($/SF) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
General Vacancy (%) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Credit Loss Reserve (%) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Market Leasing Profiles
In-Line Tenant Jun-2019 Jun-2020 Jun-2021 Jun-2022 Jun-2023 Jun-2024 Jun-2025 Jun-2026 Jun-2027 Jun-2028 Jun-2029
Term Length (Years/Months) 5 5 5 5 5 5 5 5 5 5 5
Renewal Probability† 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00%
Months Vacant 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00
Months Vacant (Blended) 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20
Market Base Rent (New, $ / SF / Year) 31.00 32.86 34.83 36.92 39.14 41.48 43.97 46.61 49.41 52.37 55.52
Market Base Rent (Renew, $ / SF / Year) 29.00 30.74 32.58 34.54 36.61 38.81 41.14 43.61 46.22 48.99 51.93
Market Base Rent (Blended, $ / SF / Year) 29.80 31.59 33.48 35.49 37.62 39.88 42.27 44.81 47.50 50.35 53.37
Market Rental Value (Continue Prior) Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior
Use Market or Prior N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Prior Rent N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Fixed Steps (None) None None None None None None None None None None None
CPI Increases None None None None None None None None None None None
Free Rent (New, Months) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Free Rent (Renew, Months) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Free Rent (Blended, Months) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Recovery Type Net Net Net Net Net Net Net Net Net Net Net
Recoveries (Net) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Miscellaneous Rent None None None None None None None None None None None
Incentives None None None None None None None None None None None
Tenant Improvements (New, $ / Area) 9.00 9.32 9.64 9.98 10.33 10.69 11.06 11.45 11.85 12.27 12.70
Tenant Improvements (Renew, $ / Area) 7.00 7.25 7.50 7.76 8.03 8.31 8.60 8.91 9.22 9.54 9.87
Tenant Improvements (Blended, $ / Area) 7.80 8.07 8.36 8.65 8.95 9.26 9.59 9.92 10.27 10.63 11.00
Leasing Commissions (New, Fixed %) 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Leasing Commissions (Renew, Fixed %) 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
Leasing Commissions (Blended, Fixed %) 3.80% 3.80% 3.80% 3.80% 3.80% 3.80% 3.80% 3.80% 3.80% 3.80% 3.80%
Sales Percentage Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior
Sales Volume Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior
Sales Breakpoint Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior
Upon Expiration In-Line Tenant In-Line Tenant In-Line Tenant In-Line Tenant In-Line Tenant In-Line Tenant In-Line Tenant In-Line Tenant In-Line Tenant In-Line Tenant In-Line Tenant
Anchor Tenant Jun-2019 Jun-2020 Jun-2021 Jun-2022 Jun-2023 Jun-2024 Jun-2025 Jun-2026 Jun-2027 Jun-2028 Jun-2029
Term Length (Years/Months) 10 10 10 10 10 10 10 10 10 10 10
Renewal Probability† 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00%
Months Vacant 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00
Months Vacant (Blended) 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75
Market Base Rent (New, $ / SF / Year) 26.00 27.56 29.21 30.97 32.82 34.79 36.88 39.09 41.44 43.93 46.56
Market Base Rent (Renew, $ / SF / Year) 23.00 24.38 25.84 27.39 29.04 30.78 32.63 34.58 36.66 38.86 41.19
Market Base Rent (Blended, $ / SF / Year) 23.75 25.18 26.69 28.29 29.98 31.78 33.69 35.71 37.85 40.13 42.53
Market Rental Value (Continue Prior) Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior
Use Market or Prior N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Prior Rent N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Fixed Steps (None) None None None None None None None None None None None
CPI Increases None None None None None None None None None None None
Free Rent (New, Months) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Free Rent (Renew, Months) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Free Rent (Blended, Months) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Recovery Type Net Net Net Net Net Net Net Net Net Net Net
Recoveries (Net) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Miscellaneous Rent None None None None None None None None None None None
Incentives None None None None None None None None None None None
Tenant Improvements (New, $ / Area) 9.00 9.32 9.64 9.98 10.33 10.69 11.06 11.45 11.85 12.27 12.70
Tenant Improvements (Renew, $ / Area) 7.00 7.25 7.50 7.76 8.03 8.31 8.60 8.91 9.22 9.54 9.87
Tenant Improvements (Blended, $ / Area) 7.50 7.76 8.03 8.32 8.61 8.91 9.22 9.54 9.88 10.22 10.58
Leasing Commissions (New, Fixed %) 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Leasing Commissions (Renew, Fixed %) 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
Leasing Commissions (Blended, Fixed %) 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%
Sales Percentage Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior
Sales Volume Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior
Sales Breakpoint Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior Continue Prior
Upon Expiration Anchor Tenant Anchor Tenant Anchor Tenant Anchor Tenant Anchor Tenant Anchor Tenant Anchor Tenant Anchor Tenant Anchor Tenant Anchor Tenant Anchor Tenant
† This parameter varies within the reporting period.

Printed on 10/28/2016 1:18:23
PM
Valuation & Return Summary Report
10/28/2016 1:18:24 PM
Valuation Assumptions Return Summary

PV Calculation Date July, 2018 Total Return (Unleveraged) 52,262,496
Unleveraged Cash Flow Rate 10.50% Total Return to Invest (Unleveraged) 2.82
Unleveraged Resale Rate 10.50% PV-Cash Flow (Unleveraged) 10,895,664
Leveraged Cash Flow Rate 10.50% PV-Net Sales Price 12,143,701
Leveraged Resale Rate 10.50% Total PV (Unleveraged) 23,039,365

Discount Method Annual Initial Investment 18,500,000
Hold Period 10 Years NPV (Unleveraged) 4,539,365
Residual Sale Date June, 2028 % of PV-Income 47.29%
Period to Cap 12 Months After Sale % of PV-Net Sales Price 52.71%
Exit Cap Rate 9.50% IRR (Unleveraged) 13.72%

Gross-up NOI No IRR (Leveraged) 17.75%
Selling Costs 3.00% PV-Cash Flow (Unleveraged) / % Total 108.96 47.29%

PV-Net Sales Price / % Total 121.44 52.71%
Sales Proceeds Calculation Total PV (Unleveraged) $/SF 230.39 100.00%
Net Operating Income 3,227,942
Occupancy Gross-up Adjustment 0 Distributions of Net Proceeds
NOI to Capitalize 3,227,942 Net Sale Price 32,958,987
Divided by Cap Rate 9.50% Less: Loan Payoff -9,880,726
Gross Sale Price 33,978,337 Less: Equity (Investment Balance) -7,500,000
Adjusted Gross Sale Price 33,978,337 Ending Proceeds 15,578,261
Commission -1,019,350
Net Sales Price 32,958,987
Less: Loan Balance 9,880,726
Proceeds from Sale 23,078,261
Pv of Net Sales Price 12,143,701
Investment & Cash Flow Summary

Unleveraged Unleveraged PV of Unleveraged Unleveraged Leveraged Leveraged Leveraged
Year-Month Investment Cash Flow Cash Flow @ 10.50% COC Return Investment Cash Flow COC Return
2018-July (Pd. 0) -18,500,000 -7,500,000

2019-June 0 1,455,974 1,317,624 7.87% 0 -10,629,958 -141.73%
2020-June 0 1,524,937 1,248,899 8.24% 0 439,006 5.85%
2021-June 0 1,573,218 1,166,010 8.50% 0 487,286 6.50%
2022-June 0 1,622,308 1,088,139 8.77% 0 536,377 7.15%
2023-June 0 1,637,848 994,173 8.85% 0 551,916 7.36%
2024-June 0 1,641,658 901,797 8.87% 0 555,727 7.41%
2025-June 0 2,018,650 1,003,518 10.91% 0 932,718 12.44%
2026-June 0 2,379,256 1,070,392 12.86% 0 1,293,325 17.24%
2027-June 0 2,512,237 1,022,822 13.58% 0 1,426,305 19.02%
2028-June 0 2,937,423 1,082,290 15.88% 0 1,851,491 24.69%
Totals -18,500,000 19,303,509 10,895,664 -7,500,000 -2,555,807
Printed on 10/28/2016 1:18:24
Present Value Report
10/28/2016 1:18:24 PM
PV/IRR Date: Jul, 2018
Discount Method: Annual
P.V. of P.V. of P.V. of P.V. of P.V. of NOI to

Analysis Period Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Book
Period Ending Before Debt Service @ 9.50 % @ 10.00 % @ 10.50 % @ 11.00 % @ 11.50 % Value
Year 1 Jun-2019 1,455,974 1,329,657 1,323,613 1,317,624 1,311,688 1,305,806 7.87%
Year 2 Jun-2020 1,524,937 1,271,815 1,260,279 1,248,899 1,237,673 1,226,598 8.24%
Year 3 Jun-2021 1,573,218 1,198,248 1,181,982 1,166,010 1,150,324 1,134,918 8.50%
Year 4 Jun-2022 1,622,308 1,128,436 1,108,058 1,088,139 1,068,665 1,049,624 8.77%
Year 5 Jun-2023 1,637,848 1,040,406 1,016,975 994,173 971,983 950,384 8.85%
Year 6 Jun-2024 1,641,658 952,353 926,673 901,797 877,697 854,345 9.86%
Year 7 Jun-2025 2,018,650 1,069,454 1,035,886 1,003,518 972,300 942,186 12.35%
Year 8 Jun-2026 2,379,256 1,151,140 1,109,941 1,070,392 1,032,422 995,961 12.50%
Year 9 Jun-2027 2,512,237 1,110,027 1,065,434 1,022,822 982,095 943,163 14.50%
Year 10 Jun-2028 2,937,423 1,185,292 1,132,504 1,082,290 1,034,515 989,049 15.20%
Totals 19,303,509 11,436,827 11,161,344 10,895,664 10,639,363 10,392,035
Property Resale @ 9.50 % Cap Rate 32,958,987 13,299,419 12,707,116 12,143,701 11,607,644 11,097,501
Total Unleveraged Present Value 24,736,246 23,868,460 23,039,365 22,247,007 21,489,536
Percentage Value Distribution

Income 46.24% 46.76% 47.29% 47.82% 48.36%
Net Sale Price 53.76% 53.24% 52.71% 52.18% 51.64%
100.00% 100.00% 100.00% 100.00% 100.00%
Printed on 10/28/2016 1:18:25
PM
Returns Over Time Report
10/28/2016 1:18:25 PM
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
For the Years Ending Jul-2018 Jun-2019 Jun-2020 Jun-2021 Jun-2022 Jun-2023 Jun-2024 Jun-2025 Jun-2026 Jun-2027 Jun-2028
Amounts in Period
Effective Gross Revenue N/A 2,490,229 2,600,398 2,684,766 2,771,130 2,818,634 3,075,871 3,643,281 3,712,859 4,187,404 4,378,901
Ground Lease Expenses N/A 0 0 0 0 0 0 0 0 0 0
Operating Expenses Paid N/A -1,034,254 -1,075,460 -1,111,548 -1,148,822 -1,180,786 -1,232,121 -1,292,186 -1,333,603 -1,385,736 -1,441,478
Net Operating Income N/A 1,455,974 1,524,937 1,573,218 1,622,308 1,637,848 1,843,750 2,351,095 2,379,256 2,801,669 2,937,423
Total Leasing & Capital Costs (in -
0 0 0 0 0 -202,092 -332,445 0 -289,432 0
period) 18,500,000
Total Leasing & Capital Costs (from - - - - - - - - - - -
start) 18,500,000 18,500,000 18,500,000 18,500,000 18,500,000 18,500,000 18,702,092 19,034,537 19,034,537 19,323,969 19,323,969
Annual Amounts at Resale Date

Market Rent 2,662,600 2,822,356 2,991,697 3,171,199 3,361,471 3,563,159 3,751,416 3,976,501 4,215,091 4,467,996 4,736,076
Market Inflation N/A 6.00% 6.00% 6.00% 6.00% 6.00% 5.28% 6.00% 6.00% 6.00% 6.00%
Effective Gross Revenue N/A 2,549,800 2,632,558 2,717,257 2,803,961 2,410,427 3,088,126 3,655,062 3,723,851 4,320,983 4,391,883
Ground Lease Expenses N/A 0 0 0 0 0 0 0 0 0 0
Operating Expenses N/A -803,657 -831,526 -860,332 -890,107 -842,804 -956,883 -1,008,728 -1,041,668 -1,096,799 -1,131,973
Net Operating Income N/A 1,746,143 1,801,032 1,856,925 1,913,854 1,567,624 2,131,242 2,646,333 2,682,183 3,224,184 3,259,910
Gross Value 18,500,000 16,051,973 16,560,193 17,076,926 17,240,504 19,407,891 24,748,366 25,044,801 29,491,250 30,920,244 33,978,337
Purchase Costs 0 -481,559 -496,806 -512,308 -517,215 -582,237 -742,451 -751,344 -884,738 -927,607 -1,019,350
Net Value 18,500,000 15,570,414 16,063,387 16,564,618 16,723,289 18,825,654 24,005,915 24,293,457 28,606,512 29,992,637 32,958,987
Vendor's Costs 0 0 0 0 0 0 0 0 0 0 0
Net Realizable Value 18,500,000 15,570,414 16,063,387 16,564,618 16,723,289 18,825,654 24,005,915 24,293,457 28,606,512 29,992,637 32,958,987
Net Realizable Value Change N/A -2,929,586 492,973 501,231 158,671 2,102,365 5,180,261 287,542 4,313,055 1,386,125 2,966,350
Net Realizable Value Change % N/A -15.84% 3.17% 3.12% 0.96% 12.57% 27.52% 1.20% 17.75% 4.85% 9.89%
Resale Yields
IRR (from start) N/A -7.97% 1.52% 4.87% 6.13% 8.70% 12.11% 11.82% 13.25% 13.28% 13.72%
Capitalization Rate 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50%
Initial Yield N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Equivalent Yield N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Reversionary Yield N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Net Rent / Initial Value N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
ERV (gross) Yield N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Performance KPI's
Total Return N/A -7.51% 13.53% 13.48% 11.13% 23.37% 37.19% 9.97% 28.85% 13.99% 20.93%
Compound Mean Average Total
N/A -7.51% 2.47% 6.02% 7.27% 10.31% 14.40% 13.75% 15.54% 15.37% 15.91%
Return
Income Return on Capital N/A 10.10% 10.08% 10.08% 10.09% 9.70% 8.94% 10.20% 9.58% 9.80% 10.16%
Compound Mean Average Income
N/A 10.10% 10.09% 10.09% 10.09% 10.01% 9.83% 9.88% 9.84% 9.84% 9.87%
Return
Capital Growth N/A -15.84% 3.17% 3.12% 0.96% 12.57% 26.16% -0.18% 17.75% 3.83% 9.89%
Compound Mean Average Capital
N/A -15.84% -6.82% -3.62% -2.49% 0.35% 4.25% 3.61% 5.28% 5.12% 5.58%
Growth
Capital Employed N/A 15,553,665 15,760,479 16,256,164 16,758,415 17,495,794 21,178,495 24,126,715 25,774,975 29,672,468 30,224,120

Printed on 10/28/2016 1:18:25
PM
Lease Audit Report
10/28/2016 1:18:26 PM
For the Years Ending Suite Jun-2019 Jun-2020 Jun-2021 Jun-2022 Jun-2023 Jun-2024 Jun-2025 Jun-2026 Jun-2027 Jun-2028 Jun-2029 Total
Area
1. Mo'licious Cakes A 22,500 22,500 22,500 22,500 22,500 22,500 22,500 22,500 22,500 22,500 22,500
2. Bob's Comics B 13,750 15,000 15,000 15,000 15,000 15,000 15,000 15,000 13,750 15,000 15,000
3. Houston Doggie Bakery C 12,000 12,000 12,000 12,000 11,000 12,000 12,000 12,000 12,000 12,000 11,000
4. Mack Daddy's D 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 45,833
Total Area 98,250 99,500 99,500 99,500 98,500 99,500 99,500 99,500 98,250 99,500 94,333
Total Occupancy % 98.25% 99.50% 99.50% 99.50% 98.50% 99.50% 99.50% 99.50% 98.25% 99.50% 94.33%
Potential Base Rent

1. Mo'licious Cakes A 427,500 427,500 427,500 427,500 427,500 427,500 925,584 925,584 925,584 925,584 925,584 7,192,919
2. Bob's Comics B 274,438 263,494 268,764 274,139 279,622 285,214 290,918 296,737 677,848 712,450 712,450 4,336,073
3. Houston Doggie Bakery C 224,000 248,000 272,000 296,000 329,122 478,549 478,549 478,549 478,549 478,549 640,407 4,402,276
4. Mack Daddy's D 912,500 912,500 912,500 912,500 912,500 912,500 912,500 912,500 912,500 912,500 1,519,566 10,644,566
Total Potential Base Rent 1,838,438 1,851,494 1,880,764 1,910,139 1,948,743 2,103,764 2,607,552 2,613,370 2,994,481 3,029,083 3,798,007 26,575,833
Lost Absorption / Turnover Rent

2. Bob's Comics B -37,250 0 0 0 0 0 0 0 -59,371 0 0 -96,621
3. Houston Doggie Bakery C 0 0 0 0 -37,622 0 0 0 0 0 -53,367 -90,989
4. Mack Daddy's D 0 0 0 0 0 0 0 0 0 0 -177,219 -177,219
Total Lost Absorption / Turnover Rent -37,250 0 0 0 -37,622 0 0 0 -59,371 0 -230,587 -364,829
Scheduled Base Rent

2. Bob's Comics B 237,188 263,494 268,764 274,139 279,622 285,214 290,918 296,737 618,477 712,450 712,450 4,239,452
4. Mack Daddy's D 912,500 912,500 912,500 912,500 912,500 912,500 912,500 912,500 912,500 912,500 1,342,347 10,467,347
Total Scheduled Base Rent 1,801,188 1,851,494 1,880,764 1,910,139 1,911,122 2,103,764 2,607,552 2,613,370 2,935,110 3,029,083 3,567,420 26,211,004
Fixed Steps
2. Bob's Comics B 0 4,744 10,014 15,389 20,872 26,464 32,168 37,987 3,206 0 0 150,843
3. Houston Doggie Bakery C 2,000 26,000 50,000 74,000 88,000 0 0 0 0 0 0 240,000
Total Fixed Steps 2,000 30,744 60,014 89,389 108,872 26,464 32,168 37,987 3,206 0 0 390,843
CPI Increases
4. Mack Daddy's D 0 31,937 64,993 99,205 134,615 171,264 209,195 248,455 289,088 331,144 187,336 1,767,232
Total CPI Increases 0 31,937 64,993 99,205 134,615 171,264 209,195 248,455 289,088 331,144 187,336 1,767,232
Sales Volume
1. Mo'licious Cakes A 1,500,000 1,552,500 1,606,838 1,663,077 1,721,285 1,781,529 1,843,883 1,908,419 1,975,214 2,044,346 2,115,898 19,712,988
2. Bob's Comics B 3,437,500 3,881,250 4,017,094 4,157,692 4,303,211 4,453,824 4,609,707 4,771,047 4,526,531 5,110,865 5,289,745 48,558,467
4. Mack Daddy's D 32,500,000 33,637,500 34,814,813 36,033,331 37,294,498 38,599,805 39,950,798 41,349,076 42,796,294 44,294,164 42,024,088 423,294,366
Total Sales Volume 37,437,500 39,071,250 40,438,744 41,854,100 43,318,993 44,835,158 46,404,389 48,028,542 49,298,038 51,449,375 49,429,732 491,565,821
Percentage Rent
4. Mack Daddy's D 62,500 64,688 66,952 69,295 71,720 74,230 76,828 79,517 82,301 85,181 44,081 777,293
Total Percentage Rent 62,500 64,688 66,952 69,295 71,720 74,230 76,828 79,517 82,301 85,181 44,081 777,293
Recoveries
2. Bob's Comics B 53,154 59,740 61,635 63,590 65,608 67,690 69,839 72,056 159,991 190,246 167,988 1,031,536
4. Mack Daddy's D 243,013 249,134 255,450 261,968 268,693 275,634 282,795 290,186 297,812 305,682 353,461 3,083,825
Total Recoveries 626,541 652,279 672,058 692,491 701,178 726,613 749,706 771,517 880,905 933,493 894,957 8,301,738
Tenant Income
1. Mo'licious Cakes A 638,639 646,944 654,331 661,967 669,310 677,471 1,184,544 1,192,502 1,201,520 1,210,952 1,177,566 9,915,746
2. Bob's Comics B 290,341 323,234 330,399 337,729 345,230 352,904 360,757 368,792 778,468 902,696 880,438 5,270,988
4. Mack Daddy's D 1,218,013 1,258,259 1,299,894 1,342,967 1,387,528 1,433,628 1,481,319 1,530,658 1,581,701 1,634,507 1,927,224 16,095,697
Total Tenant Income 2,490,229 2,600,398 2,684,766 2,771,130 2,818,634 3,075,871 3,643,281 3,712,859 4,187,404 4,378,901 4,693,794 37,057,267
Tenant Improvements
1. Mo'licious Cakes A 0 0 0 0 0 0 -193,608 0 0 0 0 -193,608
2. Bob's Comics B 0 0 0 0 0 0 0 0 -154,067 0 0 -154,067
3. Houston Doggie Bakery C 0 0 0 0 0 -111,167 0 0 0 0 -132,032 -243,199
4. Mack Daddy's D 0 0 0 0 0 0 0 0 0 0 -528,975 -528,975
Total Tenant Improvements 0 0 0 0 0 -111,167 -193,608 0 -154,067 0 -661,007 -1,119,848
Leasing Commissions
1. Mo'licious Cakes A 0 0 0 0 0 0 -138,838 0 0 0 0 -138,838
2. Bob's Comics B 0 0 0 0 0 0 0 0 -135,366 0 0 -135,366
3. Houston Doggie Bakery C 0 0 0 0 0 -90,924 0 0 0 0 -121,677 -212,602
4. Mack Daddy's D 0 0 0 0 0 0 0 0 0 0 -744,321 -744,321
Total Leasing Commissions 0 0 0 0 0 -90,924 -138,838 0 -135,366 0 -865,998 -1,231,126
Market Rent
1. Mo'licious Cakes A 670,500 710,730 753,374 798,576 846,491 897,280 925,584 981,119 1,039,986 1,102,385 1,168,528 9,894,553
2. Bob's Comics B 447,000 473,820 502,249 532,384 564,327 598,187 634,078 672,123 712,450 755,197 800,509 6,692,324
4. Mack Daddy's D 1,187,500 1,258,750 1,334,275 1,414,332 1,499,191 1,589,143 1,684,491 1,785,561 1,892,695 2,006,256 2,126,632 17,778,826
Total Market Rent 2,662,600 2,822,356 2,991,697 3,171,199 3,361,471 3,563,159 3,751,416 3,976,501 4,215,091 4,467,996 4,736,076 39,719,562
Printed on 10/28/2016 1:18:26

PM
Recovery Audit Report
All Tenants
10/28/2016 1:18:27 PM
For the Years Ending Jun-2019 Jun-2020 Jun-2021 Jun-2022 Jun-2023 Jun-2024 Jun-2025 Jun-2026 Jun-2027 Jun-2028 Jun-2029 Total
Mo'licious Cakes Suite: A 22,500.00 SF 211,139 219,444 226,831 234,467 241,810 249,971 258,960 266,919 275,937 285,369 251,982 2,722,828
Occupied Months 12 12 12 12 12 12 12 12 12 12 12
Pd 1, 07/2018 to 06/2024 211,139 219,444 226,831 234,467 241,810 249,971 0 0 0 0 0 1,383,662
Net
Standard Structure
Method: Net
[+]Fixed Amt ( 100.00% ) 250,000 257,500 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 335,979 3,201,949
[+]Variable Amt after Gross-Up 0 0 0 0 0 0 0 0 0 0 0 0
[+]Fixed Amt ( 25.00% ) 139,906 144,803 149,871 155,117 160,546 166,165 171,981 178,000 184,230 190,678 197,352 1,838,647
[+]Variable Amt after Gross-Up 412,464 432,237 447,365 463,023 474,330 496,002 513,362 531,329 543,136 569,173 558,183 5,440,604
[+]Fixed Amt ( 100.00% ) 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
[+] Recoverable Amount 938,395 975,307 1,008,136 1,042,075 1,074,711 1,110,984 1,150,933 1,186,306 1,226,385 1,268,305 1,119,921
[=] Adjusted Amount 938,395 975,307 1,008,136 1,042,075 1,074,711 1,110,984 1,150,933 1,186,306 1,226,385 1,268,305 1,119,921
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[=] Net Recoverable Amount 938,395 975,307 1,008,136 1,042,075 1,074,711 1,110,984 0 0 0 0 0
[*] Allocation % 22.50% 22.50% 22.50% 22.50% 22.50% 22.50% 0.00% 0.00% 0.00% 0.00% 0.00%
[=] Recovered Amount 211,139 219,444 226,831 234,467 241,810 249,971 0 0 0 0 0
Average Monthly Recovered Amount 17,595 18,287 18,903 19,539 20,151 20,831 0 0 0 0 0
Pd 2, 07/2024 to 06/2029 0 0 0 0 0 0 258,960 266,919 275,937 285,369 251,982 1,339,166

Net
Standard Structure
Method: Net
[+]Fixed Amt ( 100.00% ) 250,000 257,500 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 335,979 3,201,949

[+]Fixed Amt ( 25.00% ) 139,906 144,803 149,871 155,117 160,546 166,165 171,981 178,000 184,230 190,678 197,352 1,838,647
[+]Fixed Amt ( 100.00% ) 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
[=] Adjusted Amount 938,395 975,307 1,008,136 1,042,075 1,074,711 1,110,984 1,150,933 1,186,306 1,226,385 1,268,305 1,119,921
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[=] Net Recoverable Amount 0 0 0 0 0 0 1,150,933 1,186,306 1,226,385 1,268,305 1,119,921
[*] Allocation % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 22.50% 22.50% 22.50% 22.50% 22.50%
[=] Recovered Amount 0 0 0 0 0 0 258,960 266,919 275,937 285,369 251,982
Average Monthly Recovered Amount 0 0 0 0 0 0 21,580 22,243 22,995 23,781 20,999
Bob's Comics Suite: B 15,000.00 SF 53,154 59,740 61,635 63,590 65,608 67,690 69,839 72,056 159,991 190,246 167,988 1,031,536
Occupied Months 11 12 12 12 12 12 12 12 11 12 12
Pd 1, 08/2018 to 07/2026 53,154 59,740 61,635 63,590 65,608 67,690 69,839 72,056 6,098 0 0 519,410
Net - Taxes & Insurance
Real Estate Taxes
Method: Net
Pro-Rata Rentable Area
[+]Fixed Amt ( 100.00% ) 250,000 257,500 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 335,979 3,201,949
[+] Recoverable Amount 253,750 261,363 269,203 277,279 285,598 294,166 302,991 312,080 321,443 331,086 167,990
[=] Adjusted Amount 253,750 261,363 269,203 277,279 285,598 294,166 302,991 312,080 321,443 331,086 167,990
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[=] Net Recoverable Amount 232,917 261,363 269,203 277,279 285,598 294,166 302,991 312,080 26,391 0 0
[*] Allocation % 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 0.00% 0.00%
[=] Recovered Amount 34,938 39,204 40,381 41,592 42,840 44,125 45,449 46,812 3,959 0 0
Average Monthly Recovered Amount 3,176 3,267 3,365 3,466 3,570 3,677 3,787 3,901 360 0 0
Property Insurance
Method: Net
[+]Fixed Amt ( 100.00% ) 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
[=] Adjusted Amount 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[=] Net Recoverable Amount 121,442 136,905 141,696 146,656 151,789 157,101 162,600 168,291 14,265 0 0
[*] Allocation % 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 0.00% 0.00%
[=] Recovered Amount 18,216 20,536 21,254 21,998 22,768 23,565 24,390 25,244 2,140 0 0
Average Monthly Recovered Amount 1,656 1,711 1,771 1,833 1,897 1,964 2,032 2,104 195 0 0
Pd 2, 09/2026 to 08/2031 0 0 0 0 0 0 0 0 153,892 190,246 167,988 512,126

Net
Standard Structure
Method: Net
[+]Fixed Amt ( 100.00% ) 250,000 257,500 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 335,979 3,201,949
[+]Fixed Amt ( 25.00% ) 139,906 144,803 149,871 155,117 160,546 166,165 171,981 178,000 184,230 190,678 197,352 1,838,647
[+]Fixed Amt ( 100.00% ) 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
[=] Adjusted Amount 938,395 975,307 1,008,136 1,042,075 1,074,711 1,110,984 1,150,933 1,186,306 1,226,385 1,268,305 1,119,921
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[=] Net Recoverable Amount 0 0 0 0 0 0 0 0 1,025,949 1,268,305 1,119,921
[*] Allocation % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 15.00% 15.00% 15.00%
[=] Recovered Amount 0 0 0 0 0 0 0 0 153,892 190,246 167,988
Average Monthly Recovered Amount 0 0 0 0 0 0 0 0 13,990 15,854 13,999
Houston Doggie Bakery Suite: C 12,000.00

119,236 123,961 128,143 132,467 125,066 133,318 138,112 142,357 147,166 152,197 121,526 1,463,549
SF
Occupied Months 12 12 12 12 11 12 12 12 12 12 11
Pd 1, 06/2018 to 05/2023 119,236 123,961 128,143 132,467 125,066 0 0 0 0 0 0 628,873
10% Admin Fee
Real Estate Taxes
Method: Net
[+]Fixed Amt ( 100.00% ) 250,000 257,500 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 335,979 3,201,949
[=] Adjusted Amount 253,750 261,363 269,203 277,279 285,598 294,166 302,991 312,080 321,443 331,086 167,990
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[=] Net Recoverable Amount 253,750 261,363 269,203 277,279 261,446 0 0 0 0 0 0
[*] Allocation % 12.00% 12.00% 12.00% 12.00% 12.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
[=] Recovered Amount 30,450 31,364 32,304 33,274 31,374 0 0 0 0 0 0
Average Monthly Recovered Amount 2,538 2,614 2,692 2,773 2,852 0 0 0 0 0 0
Property Insurance
Method: Net
[+]Fixed Amt ( 100.00% ) 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
[=] Adjusted Amount 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[*] Allocation % 12.00% 12.00% 12.00% 12.00% 12.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Repairs & Maintenance

Method: Net
[+]Fixed Amt ( 25.00% ) 139,906 144,803 149,871 155,117 160,546 166,165 171,981 178,000 184,230 190,678 197,352 1,838,647
[+] Admin Fee ( 10.00 % ) 55,237 57,704 59,724 61,814 63,732 65,972 68,534 70,593 73,076 75,694 76,534
[=] Adjusted Amount 607,607 634,744 656,960 679,953 701,057 725,689 753,877 776,528 803,837 832,636 841,879
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[*] Allocation % 12.00% 12.00% 12.00% 12.00% 12.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Pd 2, 07/2023 to 06/2028 0 0 0 0 0 133,318 138,112 142,357 147,166 152,197 0 713,149

Net
Standard Structure
Method: Net
[+]Fixed Amt ( 100.00% ) 250,000 257,500 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 335,979 3,201,949
[+]Fixed Amt ( 25.00% ) 139,906 144,803 149,871 155,117 160,546 166,165 171,981 178,000 184,230 190,678 197,352 1,838,647
[+]Fixed Amt ( 100.00% ) 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
[=] Adjusted Amount 938,395 975,307 1,008,136 1,042,075 1,074,711 1,110,984 1,150,933 1,186,306 1,226,385 1,268,305 1,119,921
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[=] Net Recoverable Amount 0 0 0 0 0 1,110,984 1,150,933 1,186,306 1,226,385 1,268,305 0
[*] Allocation % 0.00% 0.00% 0.00% 0.00% 0.00% 12.00% 12.00% 12.00% 12.00% 12.00% 0.00%
[=] Recovered Amount 0 0 0 0 0 133,318 138,112 142,357 147,166 152,197 0
Average Monthly Recovered Amount 0 0 0 0 0 11,110 11,509 11,863 12,264 12,683 0
Pd 3, 08/2028 to 07/2033 0 0 0 0 0 0 0 0 0 0 121,526 121,526

Net
Standard Structure
Method: Net
[+]Fixed Amt ( 100.00% ) 250,000 257,500 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 335,979 3,201,949
[+]Fixed Amt ( 25.00% ) 139,906 144,803 149,871 155,117 160,546 166,165 171,981 178,000 184,230 190,678 197,352 1,838,647
[+]Fixed Amt ( 100.00% ) 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
[=] Adjusted Amount 938,395 975,307 1,008,136 1,042,075 1,074,711 1,110,984 1,150,933 1,186,306 1,226,385 1,268,305 1,119,921
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[=] Net Recoverable Amount 0 0 0 0 0 0 0 0 0 0 1,012,716
[*] Allocation % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 12.00%
[=] Recovered Amount 0 0 0 0 0 0 0 0 0 0 121,526
Average Monthly Recovered Amount 0 0 0 0 0 0 0 0 0 0 11,048
Mack Daddy's Suite: D 50,000.00 SF 243,013 249,134 255,450 261,968 268,693 275,634 282,795 290,186 297,812 305,682 353,461 3,083,825
Occupied Months 12 12 12 12 12 12 12 12 12 12 11
Pd 1, 07/2018 to 12/2028 243,013 249,134 255,450 261,968 268,693 275,634 282,795 290,186 297,812 305,682 154,839 2,885,204
Fixed Amt Repair & Maintenance
Real Estate Taxes

Method: Net
[+]Fixed Amt ( 100.00% ) 250,000 257,500 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 335,979 3,201,949
[=] Adjusted Amount 253,750 261,363 269,203 277,279 285,598 294,166 302,991 312,080 321,443 331,086 167,990
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[=] Net Recoverable Amount 253,750 261,363 269,203 277,279 285,598 294,166 302,991 312,080 321,443 331,086 167,990
[*] Allocation % 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
[=] Recovered Amount 126,875 130,681 134,602 138,640 142,799 147,083 151,495 156,040 160,721 165,543 83,995
Average Monthly Recovered Amount 10,573 10,890 11,217 11,553 11,900 12,257 12,625 13,003 13,393 13,795 7,636
Property Insurance
Method: Net
[+]Fixed Amt ( 100.00% ) 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
[=] Adjusted Amount 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[*] Allocation % 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
Repairs & Maintenance

Method: Fixed Amount
[+]Fixed Amt ( 25.00% ) 139,906 144,803 149,871 155,117 160,546 166,165 171,981 178,000 184,230 190,678 197,352 1,838,647
[=] Adjusted Amount 552,370 577,040 597,236 618,139 637,325 659,717 685,342 705,934 730,761 756,942 765,344
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[*] Allocation % 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
Pd 2, 02/2029 to 01/2039 0 0 0 0 0 0 0 0 0 0 198,621 198,621

Net
Standard Structure
Method: Net
[+]Fixed Amt ( 100.00% ) 250,000 257,500 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 335,979 3,201,949
[+]Fixed Amt ( 25.00% ) 139,906 144,803 149,871 155,117 160,546 166,165 171,981 178,000 184,230 190,678 197,352 1,838,647
[+]Fixed Amt ( 100.00% ) 132,275 136,905 141,696 146,656 151,789 157,101 162,600 168,291 174,181 180,277 186,587 1,738,357
[=] Adjusted Amount 938,395 975,307 1,008,136 1,042,075 1,074,711 1,110,984 1,150,933 1,186,306 1,226,385 1,268,305 1,119,921
[-] Stops 0 0 0 0 0 0 0 0 0 0 0
[=] Net Recoverable Amount 0 0 0 0 0 0 0 0 0 0 397,243
[*] Allocation % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 50.00%
[=] Recovered Amount 0 0 0 0 0 0 0 0 0 0 198,621
Average Monthly Recovered Amount 0 0 0 0 0 0 0 0 0 0 18,056
Total:
626,541 652,279 672,058 692,491 701,178 726,613 749,706 771,517 880,905 933,493 894,957 8,301,738

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ARGUS Enterprise 11.0.4.

65 AE Case Study Manual –

Hunnicutt Outlets – Case Study

Anchor Tenant New Market Renewal Market

© 2016 ARGUS Software, Inc. All Rights Reserved.

Percentage Rent: Continue Prior

Tenant Name Suite

© 2016 ARGUS Software, Inc. All Rights Reserved.

W A L E (Rent) 8 Years 2 Months 24 Days Breakeven Date Apr, 2028

NOI Yield 7.87%

Potential Gross Revenue 2490229 $24.90

Top 5 Tenants by Area

Market Leasing Assumptions In-Line Tenant Anchor Tenant

Property Information Operations (Year 1)

Property Assumptions (Year 1) WALE (as of PV/IRR Date)

Valuation and Returns

* Results displayed are based on Forecast data only

Other Tenant Revenue

Cash Flow Available for

Market Leasing Profiles

† This parameter varies within the reporting period.

Valuation Assumptions Return Summary

Unleveraged Resale Rate 10.50% PV-Cash Flow (Unleveraged) 10,895,664

Leveraged Cash Flow Rate 10.50% PV-Net Sales Price 12,143,701

Leveraged Resale Rate 10.50% Total PV (Unleveraged) 23,039,365

Period to Cap 12 Months After Sale % of PV-Net Sales Price 52.71%

Exit Cap Rate 9.50% IRR (Unleveraged) 13.72%

Selling Costs 3.00% PV-Cash Flow (Unleveraged) / % Total 108.96 47.29%

Investment & Cash Flow Summary

2018-July (Pd. 0) -18,500,000 -7,500,000

P.V. of P.V. of P.V. of P.V. of P.V. of NOI to

Percentage Value Distribution

Annual Amounts at Resale Date

* Results displayed are based on Forecast data only

Potential Base Rent

Lost Absorption / Turnover Rent

Scheduled Base Rent

* Results displayed are based on Forecast data only

Printed on 10/28/2016 1:18:26

[+]Variable Amt after Gross-Up 0 0 0 0 0 0 0 0 0 0 0 0

[+]Variable Amt after Gross-Up 0 0 0 0 0 0 0 0 0 0 0 0

Pd 2, 07/2024 to 06/2029 0 0 0 0 0 0 258,960 266,919 275,937 285,369 251,982 1,339,166

[+]Variable Amt after Gross-Up 0 0 0 0 0 0 0 0 0 0 0 0

[+]Variable Amt after Gross-Up 0 0 0 0 0 0 0 0 0 0 0 0

Average Monthly Recovered Amount 0 0 0 0 0 0 21,580 22,243 22,995 23,781 20,999

[+]Variable Amt after Gross-Up 0 0 0 0 0 0 0 0 0 0 0 0

Pd 2, 09/2026 to 08/2031 0 0 0 0 0 0 0 0 153,892 190,246 167,988 512,126

[+]Variable Amt after Gross-Up 0 0 0 0 0 0 0 0 0 0 0 0

[+]Variable Amt after Gross-Up 0 0 0 0 0 0 0 0 0 0 0 0

Average Monthly Recovered Amount 0 0 0 0 0 0 0 0 13,990 15,854 13,999

Houston Doggie Bakery Suite: C 12,000.00

[+]Variable Amt after Gross-Up 0 0 0 0 0 0 0 0 0 0 0 0

Average Monthly Recovered Amount 2,538 2,614 2,692 2,773 2,852 0 0 0 0 0 0

[+]Variable Amt after Gross-Up 0 0 0 0 0 0 0 0 0 0 0 0

Average Monthly Recovered Amount 1,323 1,369 1,417 1,467 1,516 0 0 0 0 0 0

Repairs & Maintenance

Average Monthly Recovered Amount 6,076 6,347 6,570 6,800 7,002 0 0 0 0 0 0

Pd 2, 07/2023 to 06/2028 0 0 0 0 0 133,318 138,112 142,357 147,166 152,197 0 713,149