233 WEST STREET On Pier 26 in Hudson River Park NEW YORK, NY 10013

Transcription

1 APPRAISAL REPORT MARKET RENT ANALYSIS FOR RETAIL SPACE IN BUILDING Located at 233 WEST STREET On Pier 26 in Hudson River Park NEW YORK, NY AS OF JUNE 18, 2015 FOR HUDSON RIVER PARK TRUST PIER 40, 2 ND FLOOR 353 WEST STREET NEW YORK, NY BY PATJO APPRAISAL SERVICES, INC. 245 PARK AVENUE, 39 th FLOOR NEW YORK, NY TEL: / FAX: PatjoAppraisal@aol.com / FILE#CM Your Contract # G4670

2 PHOTOGRAPH OF SUBJECT BUILDING PATJO Appraisal Services, Inc. Page 2

3 September 9, 2015 Hudson River Park Trust Pier 40, 2 nd Floor 353 West Street New York, New York Re: Market Rental Study for Retail Space located in the building at 233 West Street on Pier 26 in Hudson River Park, New York, NY Dear Sir/Madam, In keeping with your request, we have conducted a market rental study for the retail space in the building located at 233 West Street on Pier 26 in Hudson River Park on the western waterfront of Downtown Manhattan, City and State of New York. The subject building is a single-story metal and glass contemporary structure situated on one of the revitalized piers projecting into the Hudson River and constitutes part of the Hudson River Park. Pier #26 is situated on the west side of the West Side Highway (West Street), between Hubert Street and North Moore Street in the Tribeca neighborhood of Lower Manhattan. Based on our calculations, the subject building contains 9,364± square feet of gross area at ground level and 570± square feet at second floor (penthouse) level. It also has 5,293± square feet of outdoor patio space, 5,342± square feet of roof terrace and a separate utility building close by containing 1,277± square feet. Approximately 57% of the main building is currently occupied by a boathouse and the vacant portion (approximately 43%) is intended for restaurant use. Based on our calculations, the gross area to be leased for restaurant use comprises of 4,052± square feet at ground floor level and 570± square feet at second floor (penthouse level) for a total of 4,622± square feet. The building was constructed in at a cost of approximately $7.5 million and the vacant interior space is still not yet completely finished. We have been informed that a Certificate of Occupancy for the building has not yet been issued. The land area exclusively associated with the subject building is approximately 19, 200 square feet. The remainder of dock/pier land area is public space part of the Hudson River Park. Documents provided by the client indicate that the space to be leased for restaurant use contains 3,735± square feet (3,135 sf of prime space and 600 sf of storage/utility space at ground level), 460± square feet at second floor (penthouse) level, 3,500± square feet of outdoor patio space and 4,460± square feet of roof terrace. This report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) and the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute. /Continues PATJO Appraisal Services, Inc. Page 3

4 Page 2/ Letter of Transmittal/ Based on our research and analysis, and based on the terms of the proposed lease, we conclude that the annual market rental value for the subject space proposed to be leased, as of June 18, 2015 is; Three Hundred and Forty Thousand Dollars ($340,000) per annum. Proposed lease of 3,135± sf of Retail $108.45/SF per annum = $340,000 The proposed lease calls for the Fixed Minimum Rent to be abated by one-third in the first three years due to expected business disruption to be caused by proposed construction on Pier 26. The Fair Market Rent estimate in this report does not take into consideration the expected business disruption since it will be temporary in nature. It was a pleasure serving you. Respectfully Submitted, PATJO Appraisal Services, Inc Patrick A. Josephs, M.S., MRICS, MAI, AI-GRS NYS CREA # PATJO Appraisal Services, Inc. Page 4

5 PART ONE: INTRODUCTION TABLE OF CONTENTS 01. Title page 02. Photograph of Subject Property 03. Letter of transmittal 05. Table of Contents 06. Certification 08. Assumptions and limiting conditions 10. Extraordinary Assumptions 10. Hypothetical Conditions 11. Purpose of the Appraisal 11. Intended User and Intended Use of Report 11. Definition of Value and Date of Value 11. Ownership History of Subject Property 13. Scope of Market Rental Survey PART TWO: THE SUBJECT PROPERTY 14. Neighborhood Analysis 18. Regional Map & County Map 20. Neighborhood Maps 22. Tax Map of Subject Property 23. Aerial Photograph of Subject Property 24. Site and Improvement Description 27. Layout Plans of Subject Space 31. Photographs of Subject Property PART THREE: MARKET AND COMPARABLE RENTAL ANALYSIS 34. Retail Market Demand/Supply Analysis 39. Summary of Proposed Lease 40. Retail Market Rental Survey 42. Summary of Comparable Rentals 48. Analysis of Comparable Rentals PART FOUR: RECONCILIATION 53. Final Rental Value Opinion 54. PART FIVE: ADDENDUM Engagement Contract Lease Abstract Qualification of Appraiser Appraiser s License PATJO Appraisal Services, Inc. Page 5

6 CERTIFICATION I (Patrick A. Josephs) certify that, to the best of my 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 my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I 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. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined 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 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. 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 & Standards of Professional Appraisal Practice of the Appraisal Institute. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. I have 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. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. PATJO Appraisal Services, Inc. Page 6

7 As of the date of this report, I (Patrick A. Josephs) have completed the continuing education program of the Appraisal Institute. September 9, Patrick A. Josephs, MS, MRICS, MAI, AI-GRS Date PATJO Appraisal Services, Inc. Page 7

8 ASSUMPTIONS AND LIMITING CONDITION 1. Ownership information and legal description were obtained from sources generally considered reliable. Title to the property is assumed to be good and marketable unless otherwise stated. 2. We have relied on various sources for economic and demographic data and other market information. These sources are considered to be reliable and the information utilized is believed to be accurate. However, no warranty is given for its accuracy. 3. A personal inspection of the property was made and some measurements were taken on site. Area calculations and dimensions are based on these measurements. Plot sizes were obtained from Tax Assessor s record. Maps and sketches included in this report, if any, are meant to assist the reader in visualizing the property. We have made no survey of the property and assume no responsibility for the accuracy of any plans, maps or charts supplied to us that have been included herein or relied upon. 4. It is assumed that there is full compliance with all-applicable federal, state and local building and housing regulations and laws unless non-compliance is stated, defined and considered in this report. 5. All the facts, conclusions and observations contained herein are consistent with information available as of the effective date of this analysis. Forecasts are based on our analysis and interpretation of market trends, economic conditions and historic operating data for the subject property and other similar properties. No guarantee or representation is made that forecasts made will materialize and we assume no liability for any unforeseen precipitous change in the real estate market, the local, state or national economy. 6. The Bylaws and Regulations of the Appraisal Institute govern disclosure of the contents of this report. Neither all nor part of the contents of this report shall be disseminated to the public without the prior written consent and approval of the author. 7. The liability of PATJO Appraisal Services, Inc. and employees is limited to the fee collected for this assignment and the analyst shall not be held liable in any cause of action resulting in litigation for any dollar amount, which exceeds the total fee collected. There shall be no liability to any third party. 8. We have no obligation to automatically update this report for events and circumstances occurring after its effective date. 9. This report should be read and used in its entirety and not in parts. Separation of any section or page from the main body of the report is expressly forbidden and invalidates the conclusions/recommendation contained herein. PATJO Appraisal Services, Inc. Page 8

9 10. The use of this report implies that all the limiting conditions stated in 1 through 9 above have been read, fully understood and accepted by the user. PATJO Appraisal Services, Inc. Page 9

10 EXTRAORDINARY ASSUMPTIONS The Uniform Standards of Professional Appraisal Practice ( Edition) defines Extraordinary Assumption as follows; An assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser's opinions or conclusions. UAPAP also has the following comment: Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. 1 We have made the following extraordinary assumptions: 1. That the Rentable Area provided by the client is correct. The rent will be calculated using the Rentable Area provided by the client. 2. That the proposed use of the subject space as a restaurant is legally permissible under New York City building and zoning codes. 3. That no percentage rent is due and payable for the duration of the lease. 4. That the tenant will spend the required minimum of $1,100,000 on improvement work to the subject building and that all the proposed work will be completed prior to the rent commencement date of May 1, That the proposed lease terms are final and that the proposed lease will take effect on the date of inspection, June 18, HYPOTHETICAL CONDITIONS The Uniform Standards of Professional Appraisal Practice ( Edition) defines Hypothetical Condition as follows; A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of the analysis. USPAP also has the following comment: Hypothetical Conditions are contrary to know facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. 2 We have inferred the following hypothetical conditions: 1. None. 1 USPAP ( ), The Appraisal Foundation, Page U-3. 2 ibid 1, Page U-3. PATJO Appraisal Services, Inc. Page 10

11 PURPOSE OF THE APPRAISAL The purpose of this appraisal is to determine the market rental value of the subject space in the building located at 233 West Street on Pier 26 in Hudson River Park in Manhattan to be leased for Restaurant Use. The tenant proposes to take a 10-year Lease with one 5-year renewal option. INTENDED USER AND INTENDED USE OF REPORT The intended user of this report is Hudson River Park Trust. Hudson River Park Trust is a New York State Public Benefit Corporation responsible for developing, operating and maintaining Hudson River Park between 59 th Street and Battery Park City on the west side of Manhattan. The intended use of the appraisal report is to provide information in connection with a potential disposition of the Trust s leasehold interest under the proposed lease. The use of this report is restricted to the client and its representatives for the purpose specified herein. The use of this report by any other and for any other purpose is unauthorized. DEFINITION OF VALUE AND DATE OF VALUE The objective of this assignment is to determine market rental value. defined by the Appraisal Institute 3 as follows; Market rent is The most probable rent that a property should bring in a competitive and open market reflecting all conditions and restrictions of the lease agreement, including permitted uses, use restrictions, expense obligations, term, concessions, renewals, purchase options, and tenant improvements (TIs). The effective date of this value opinion is June 18, The property was inspected on June 18, Data collection, analysis and the preparation of this report took place in the days immediately subsequent to the inspection date. OWNERSHIP HISTORY OF SUBJECT PROPERTY Based on the public record, the fee simple interest in the land is owned by The State of New York. However, the State of New York has appropriated partial interests in the land to various other New York State and New York City agencies. The property is subject to a long term ground lease between the State of New York, by and through its Office of Parks, Recreation and Historic Preservation and its Department of 3 Appraisal Institute (2010) The Dictionary of Real Estate Appraisal (Fifth Edition); Page 121. PATJO Appraisal Services, Inc. Page 11

12 Environmental Conservation, and the Hudson River Park Trust, dated April 3, 1999 as amended, conveying a possessory interest in the property pursuant to the Hudson River Park Act approved and enacted as of September 8, PATJO Appraisal Services, Inc. Page 12

13 SCOPE OF MARKET RENTAL STUDY Formal instruction was received from Mr. Daniel P. Kurtz, CFO/EVP Finance & Real Estate for the Hudson River Park Trust. The subject property was inspected on June 18, 2015 by Patrick A. Josephs and Dustin Tenenbaum of PATJO Appraisal Services, Inc. in the company of Mr. Daniel Kurtz and Ms. Nicole Dooskin (AVP Planning & Real Estate) of the Trust. The proposal is for the client to negotiate a 10-year lease with one 5-year renewal option for the subject space. To perform this appraisal, we took the following steps to gather, confirm and analyze relevant data. Physically inspected the interior and exterior of the subject building and the surrounding area and take photographs. Researched comparable rentals, inspected the exterior of the comparable properties and took photographs. Reviewed client-provided documents such as lease abstract (proposed lease terms), site plans, building floor plans, Landlord and Tenant Scope of Work (where applicable) and public records pertaining to the subject property. Collected physical, economic and demographic information about the subject neighborhood and the surrounding market area and confirm the information with various sources. Analyzed market information and developed indication of market rental value. We have researched comparable rentals using various sources and we have confirmed the details of these transactions to the best of our ability. Data sources include RealQuest, CoStar, Real Estate Professionals (Brokers & Appraisers) and participants in the local real estate market. Our research for rentals was limited to the Borough of Manhattan. PATJO Appraisal Services, Inc. Page 13

14 NEIGHBORHOOD ANALYSIS The subject property is located in Lower Manhattan, also known as Downtown Manhattan, in the neighborhood referred to as Tribeca. Downtown Manhattan is the southernmost part of the island of Manhattan, the main island and center of business and government of the City of New York. The area is defined most commonly as the area delineated on the north by 14 th Street, on the east by the East River, on the south by New York Harbor, also knows as Upper New York Bay and on the west by the Hudson River. When referring specifically to the Lower Manhattan business district and its immediate environs, the northern border is commonly designated as Chambers Street from near the Hudson River east towards the Brooklyn Bridge entrances and overpass. The Lower Manhattan business district forms the core of the area below Chambers Street. It includes the Financial District, often referred to as Wall Street, and the World Trade Center site. City Hall is just to the north of the Financial District. The subject property is also located in Manhattan Community District #1 which covers 1.5 square miles of the southernmost tip of Manhattan Island, including Ellis Island, Liberty Island and Governors Island. The area is bordered by Canal Street to the north, the Hudson River to the west and the East River to the east. It encompasses neighborhoods such as the Financial District, Battery Park City, City Hall, Tribeca, Chinatown, Civic Center and Two Bridges. The subject neighborhood is primarily commercial in character where 1-2 family residences are a very small percentage of total land use accounting for only 0.1%. Approximately 5.0% of all lots are multi-family residential; 9.2% are mixed-use residential and 22.9% are commercial/office buildings. The area is quite mature and was built up primarily in the 1800s. The 16-acre World Trade Center site is located approximately ten-blocks to the southeast of the subject property. The destruction of the two WTC office towers and the surrounding buildings on September 11, 2001 constitutes the most dramatic terrorist attack on the United States and it had a severe adverse impact on the local real estate market. Approximately 17 million square feet of prime commercial (office/retail) space was destroyed. The attack also hastened a trend towards financial firms moving to midtown and contributed to the loss of business on Wall Street, due to temporary and/or permanent relocation to New Jersey and further decentralization with establishments transferred to cities like Chicago, Denver, and Boston. On the other hand, this incident also spurred development on a scale never seen before in Downtown Manhattan. The World Trade Center towers are being rebuilt and notably the new One World Trade Center, formerly known as the Freedom Tower, is the tallest skyscraper in the Western Hemisphere and the fourth-tallest in the world, at 1,776 feet, was completed in November Goldman Sachs is building a tower near the former Trade Center Site. Tax incentives provided by federal, state and local governments encouraged development. A new World Trade Center complex, centered on Daniel Liebeskind s Memory Foundations plans is being constructed in phases with several phases completed. New residential buildings are being built and office space is being converted to residential units, also benefiting from tax incentives. Wall Street itself was made primarily pedestrian to guard against vehicular bombings. The area s economy has rebounded significantly since then. In October 2012, Hurricane Sandy ravaged portions of Lower PATJO Appraisal Services, Inc. Page 14

15 Manhattan with record-high storm surges from New York Harbor, severe flooding and high winds causing power outages and disruption of mass transit systems. Again, there have been extensive redevelopment and restoration activities in Lower Manhattan as a result and today much of the real estate are being renovated and brought back to the market. Other important sites in the Downtown Manhattan Area are the World Financial Center with four office towers, Battery Park City, which is a large residential apartment community, South Street Seaport, which is a seaside marketplace, and the New York Stock Exchange. Rebuilding activities on the site and surrounding properties remains a huge tourist attraction as does several stops within the Financial District itself, including the New York Stock Exchange Building, the Federal Hall National Memorial, the Woolworth Building, 40 Wall Street (Trump Building), the Standard Oil Building at 26 Broadway, Trinity Church, and the American International Building to name a few. The 2000 population of Community District #1, which covers a 1.5-square mile area, was 34,420 persons. This represented an increase of 35.7% since In the previous decade ( ), the population growth was 59.4%. Before September 11, 2001, there were a number of programs aimed at attracting New Yorkers back to Downtown Manhattan to live. That effort was dealt a severe blow on September 11, 2001 and immediately after the attack on the World Trade Center, the State and Local governments unleashed a whole new incentive package aimed at encouraging businesses and individuals to move to Downtown Manhattan or to expand existing businesses in the area. Some of those incentive programs remain in place today and have been successful as reflected in the 77.2% growth in the population between the 2000 and 2010 Census when the recorded population count was 60,978. Previously, the neighborhood was considered to be primarily a destination for daytime traders and office workers from around New York City and the surrounding areas. The neighborhood now has a growing number of full-time residents, with a 2008 estimate of 56,000 people living in the Financial District, an increase from the 15,000 to 20,000 people estimated to be living there in Many of the buildings in the area are being converted from office space to apartments and condominiums and New York University (NYU) has added dormitory residences in the area. In 2014, approximately 3,671 persons or 6.0% of the population received public assistance. This figure represents an increase of 11.18% over the 3,302 persons or 9.6% of the population who were assisted in This is an indication that the population of Community District #1 might be getting poorer. Based on income figures, the subject neighborhood may be described as middle to upper-income neighborhood. The 2014 Land-use breakdown of Manhattan Community District #1 is as follows; Residential 1-2 Family 0.1% Multi-Family Residential 5.4% Mixed Resid. /Commercial 9.3% Commercial / Office 22.9% Industrial 1.0% Open Space / Recreation 3.7% Institutions 28.0% PATJO Appraisal Services, Inc. Page 15

16 Other 28.6% Vacant Land 0.9% Community District #1 has seven public schools and seven post secondary degree granting institutions. There are several colleges nearby, including Borough of Manhattan Community College, New York Law School, Pace University, New York University School of Business and College of New Rochelle DC 37 Campus. The closest hospital to the subject property is New York Downtown Hospital at 170 William Street, a 300-bed facility. New York City, like most of the country is enjoying low unemployment and rising real estate prices and rents. The Manhattan Chambers of Commerce has been actively involved in the revitalization of the area. According to the 2010 Census, the population of Manhattan Community District #1 was 60,978 persons in 13,724 households. There were 16,141 housing units of which 13,724 were occupied housing units. Owner-occupation represents 25.0% of all occupied units or 3,278 units and 75.0% of all occupied units are renters. The median household income was $104,116 in The American Community Survey Year estimates reported median household income at $111,579 for community districts 1 & 2 and median family income at $176,367. The per capita income was reported at $96,931. The population is highly educated with almost 73.0% of the population having completed high school and some college and 40.8% completed a Bachelor degree or higher. Approximately 70.6% of the population in Community District #1 is employed in a professional or related occupation, while 25.6% are involved in the management, business and financial operations. 21.7% are employed in sales and office occupations and 5.3% in Service Occupations. Recreational facilities in Manhattan District #1 include Battery Park (20 acres) at State Street and Whitehall Street, City Hall Park (8.8 acres) at Broadway and Chambers Street and Foley Square Park (2.5 acres) at Worth Street and Centre Street. The Staten Island Ferry runs from Battery Park to Staten Island every day of the week and the terminal recently underwent a comprehensive overhaul. Lower Manhattan is the fourth largest business district in the United States, after Midtown Manhattan, the Chicago Loop, and Washington D.C. and will regain the title of third after the completion of 1 World Trade Center, and the three other skyscrapers at the site. This neighborhood is home to the New York Stock Exchange and the corporate headquarters of NASDAQ, representing the world s largest and second largest stock exchanges, respectively. Other large companies with headquarters in Lower Manhattan include, Ambac Financial Group, AOL, EmblemHealth, Standard & Poor, Goldman Sachs, IBT,Media, Nielsen Company, PRNewswire, and Verizon Communication. Over the last two years, there has been a steady increase of Technology companies moving into Lower Manhattan. In conclusion, the subject neighborhood is considered stable. The economic trend of the Downtown Manhattan neighborhood is encouraging. The flight of individuals and businesses from Downtown after the World Trade Center attack was much less than anticipated. The cleanup of the trade center site was completed for the one-year anniversary and the city has rebuilt the damaged subway system. The rebuilding of the World Trade Center towers are in PATJO Appraisal Services, Inc. Page 16

17 full swing and the space is currently being leased. Access to public transportation is good. There are several ferry services linking the area with Staten Island, La Guardia Airport, Bay Ridge in Brooklyn, various points in New Jersey, Ellis Island and the Statue of Liberty. Commercial support is excellent. Public services in the area such as police, fire, sanitation and medical are generally as good as other areas of the Borough. The area has a good mix of residential, commercial and recreational uses and it has become a magnet for tourist attraction. Occupancy level in residential and commercial properties appears to be very stable. It is true to say that Downtown Manhattan has fully recovered from the September 11, 2001 disaster, and Hurricane Sandy in October 2012, has provided an opportunity for significant renovation and further building activity in this section of the city. PATJO Appraisal Services, Inc. Page 17

18 REGIONAL MAP PATJO Appraisal Services, Inc. Page 18

19 MAP OF MANHATTAN PATJO Appraisal Services, Inc. Page 19

20 PATJO Appraisal Services, Inc. Page 20

21 NEIGHBORHOOD MAP PATJO Appraisal Services, Inc. Page 21

22 TAX MAP OF SUBJECT PROPERTY PATJO Appraisal Services, Inc. Page 22

23 AERIAL PHOTOGRAPH OF SUBJECT PROPERTY PATJO Appraisal Services, Inc. Page 23

24 SITE AND IMPROVEMENT DESCRIPTION The subject property has a very unusual location. It is part of Pier 26 in Hudson River Park. Hudson River Park is a reclaimed public space located on the edge of the Hudson River on the west side of Manhattan and it includes several rehabilitated piers. The West Side Highway or West Street is the closest street and the adjacent area is called the Tribeca neighborhood of Manhattan. The subject property has no street frontage but it is identified as 233 West Street. It is further identified on the New York City Tax Map as Block 184, Lot 8. THE LAND: The subject building is surrounded by dock space. The dock that projects into the Hudson River for approximately 950 feet is part of an underwater parcel that is 7.87 acres in size. The site is located on the west side of the West Side Highway (aka West Street), between N Moore Street and Hubert Street. It has frontage of feet along the Hudson River. The site is rectangular in shape and contains a total of 7.87 acres (342,930± square feet) of pier, dock, bulkhead and underwater land. We estimate the dock area dedicated exclusively to the subject building as 19,200± square feet. The remainder of the dock space is part of the public space called Hudson River Park. The West Side Highway (aka West Street) is a seven-lane, macadam-paved, tree lined divided roadway running in a north-south direction and conveying traffic in both directions. It is a well travelled roadway with access to the George Washington Bridge to the north and the Holland and Lincoln Tunnels in Downtown and Midtown Manhattan respectively. The property is located in the M2-3: Manufacturing zoning district. THE SUBJECT BUILDING: The subject building is a single-story contemporary structure that was constructed on Pier 26 in at a cost of approximately $7.5 million. We have been informed that the intended uses are restaurant and boathouse but an official Certificate of Occupancy was not yet issued. Part of the structure (±57%) is currently occupied by a boating business but the section intended for restaurant use (±43%) is still vacant. The structure is made of a steel frame with metal and glass enclosure. It is irregular in shape, surrounded by dock space and it has patios and a roof deck suitable for outdoor recreational activities. Based on a combination of on-site measurements and the review of building plans, we estimate the area of the various sections as follows; Gross Area of Main Structure Gross Area of Boathouse Gross Area of Restaurant Outdoor Patio/Terrace to Restaurant Roof Terrace above Restaurant Utility Building serving main structure 9,364± square feet (foot print) 570± square feet (penthouse) 5,312± square feet 4,052± square feet 5,293 square feet 5,342 square feet 1,277 square feet Floor plans provided by the client break down the space in the building as follows; 1. Restaurant 1,670 square feet. PATJO Appraisal Services, Inc. Page 24

25 2. Restaurant Toilets 245 square feet 3. Mechanical Room 195 square feet 4. Kitchen 900 square feet 5. Dumbwaiter to concession 6. Office 107 square feet 7. Walk-in refrigerator 125 square feet 8. Trash Room 95 square feet 9. Boathouse 5,470 square feet 10. Terraces 3,200 square feet 11. ADA accessible elevator to roof 195 square feet The ceiling height in the restaurant is approximately 14 feet. Heat and hot water is fueled by gas. Air conditioning is fueled by electricity. A utility building (1,277± square feet) located between the main structure and the West Side Highway, contains the various utility connections and meters necessary for the efficient operation of the main structure in addition to storage and waste disposal area. The main building and the utility building are both located near the eastern end of Pier 26, within 150 feet of the West Side Highway. We have been informed that the owner (Hudson River Park Trust) has plans to develop Pier 26 further, including the construction of a two-story building at the western end of the Pier. THE SUBJECT SPACE: According to the client, the space to be leased for use as a restaurant comprises of 3,135± square feet in the main building at ground level and 460± square feet at second floor (penthouse) level, 400± square feet in the utility building, 3,500± square feet of outdoor patio space and 4,460± square feet of roof terrace. The interior of the space in the main building is unfinished, needing wall, floor and ceiling finishes. The walls are mostly unfinished concrete blocks and unfinished plasterboard and the floor is concrete slab. The ceiling is open with exposed metal sheeting and roof trusses. The interior space is divided among dining room, kitchen, lavatories, administrative office, walk-in refrigeration room, store room, trash room and mechanical room. Exterior walls are complete and patios and roof deck is also complete. The passenger elevator and staircases to the roof deck are also complete. HVAC system is in place. PATJO Appraisal Services, Inc. Page 25

26 SKETCH & AREA CALCULATION OF SUBJECT SPACE PATJO Appraisal Services, Inc. Page 26

27 LOCATION OF SUBJECT BUILDING ON PIER 26 PATJO Appraisal Services, Inc. Page 27

28 LAYOUT OF GROUND FLOOR OF SUBJECT BUILDING PATJO Appraisal Services, Inc. Page 28

29 LAYOUT OF ROOF TERRACE SUBJECT BUILDING PATJO Appraisal Services, Inc. Page 29

30 LAYOUT OF ACCESSORY BUILDING PATJO Appraisal Services, Inc. Page 30

31 PHOTOGRAPHS OF SUBJECT PROPERTY VIEW N ACROSS WESTSIDE WATERFRONT EAST ELEVATION OF BUILDING WEST ELEVATION OF BUILDING PATIO ON WEST SIDE OF BUILDING INTERIOR OF RESTAURANT/DINING AREA KITCHEN/DUMBWAITER & STAIRS TO ROOF PATJO Appraisal Services, Inc. Page 31

32 PHOTOGRAPHS OF SUBJECT PROPERTY INTERIOR OF RESTAURANT/LAVATORIES INTERIOR PROPOSED COLD STORAGE ROOM FOOD PREP AREA SECOND FLOOR LEVEL ROOF TERRACE LOOKING NORTH PROPOSED CONSTRUCTION SITE ON PIER VIEW N ALONG BIKE PATH ALONG WEST ST PATJO Appraisal Services, Inc. Page 32

33 PHOTOGRAPHS OF SUBJECT PROPERTY PARK ON PIER 25 SOUTH OF SUBJECT UTILITY BUILDING ON PIER 26 ROOF TERRACE LOOKING SOUTH PASSENGER ELEVATOR AT ROOF TERRACE VIEW W ACROSS HUDSON RIVER - NEW JERSEY VIEW EAST ACROSS WEST SIDE HIGHWAY PATJO Appraisal Services, Inc. Page 33

34 MANHATTAN RETAIL MARKET DEMAND/SUPPLY ANALYSIS We have conducted research into the New York City (Manhattan) retail rental market in general and the Downtown Manhattan sub-market in particular. Overview According to CoStar 4, the New York City (Manhattan) retail market experienced a slight improvement in market conditions in the first quarter of 2015 (1Q2015). The vacancy rate went from 3.7% in the 4Q2014 to 3.4% in the 1Q2015. Net absorption was positive 91,271 square feet, and vacant sublease space increased by 14,135 square feet. Quoted rental rates decreased from 4Q2014 levels, ending at $88.26 per square foot per annum. One retail building with 24,682 square feet of retail space was delivered to the market in the 1Q2015, and 958,913 square feet of retail space was still under construction at the end of the 1Q2015. Inventory During 1Q2015, one building totaling 24,682 square feet was completed in the New York City retail market. Over the previous four quarters, a total of 112,612 square feet of retail space was built in New York City (Manhattan). Two buildings with 32,433 square feet were completed in 4Q2014, one building with 55,497 square feet completed in 3Q2014. There were 958,913 square feet of retail space under construction at the end of 1Q2015. The space completed in 1Q2015 is now 39% occupied. Total retail inventory in the New York City market area amounted to 51,089,072 square feet in 4,282 buildings and 11 centers at the end of 1Q2015. This is broken down into General Retail (1,696,484 square feet); Power Centers (791,154 square feet) and Shopping Centers (1,483,195 square feet). No statistics was available for Shopping Malls for the 1Q2015. The Retail Market in New York City has been experiencing a decline in inventory for the past four quarters, which has continued to the end of 1Q2015. The inventory reported at the end of 4Q2014 was 51,161,717 square feet of gross leasable area, a decline of 0.14% in the inventory of 51,089,072 square feet reported at the end of 1Q2015. This compared to the 51,296,161 square feet reported at the end of 3Q2014, and 51,307,129 square feet reported at the end of 2Q2014. The gross leasable area available at the end of 1Q2014 was 51,407,462, a 0.62% or 318,390 square feet decline over the past year. According to CoStar, the Downtown Manhattan retail market total inventory is 3,697,768 square feet of gross leasable area (GLA) in 370 buildings as at the end of 1Q2015. This is broken down into 3,636,604 square feet of GLA in the General Retail Market segment; no Mall Market or Shopping Center Market and 61,164 square feet of space in the Power Center Market segment of the Downtown Retail Market at the end of 1Q2015. Total retail inventory in the Tribeca submarket is 876,090 square feet of gross leasable area in 84 buildings as of the end of the 1Q2015, all of it in the General Retail category. 5 The subject 4 The CoStar Retail Report; New York City Retail Market; First Quarter Ibid. PATJO Appraisal Services, Inc. Page 34

35 property is located in the Manhattan neighborhood of Tribeca and the subject space is classified as General Retail space. Leasing Activities Net absorption of retail space was moderate in New York City in the 1Q2015, with positive 91,271 square feet absorbed in the quarter. In 4Q2014, net absorption was negative 155,321 square feet, while in 3Q2014, absorption came in at negative 174,345 square feet. In 2Q2014, negative 155,105 square feet was absorbed in the market. Broken down by sub-markets, the retail market shows the following for the past four quarters; Sub-markets Net Absorption 1Q2015 4Q2014 3Q2014 2Q2014 Downtown 7,968 sf (27,949) sf (82,020) sf (102,442) sf Midtown 100,786 sf (118,344) sf (38,212) sf (10,512) sf Midtown South (13,115) sf 62,682 sf (11,964) sf (46,678) sf Uptown (4,368) sf (71,710) sf (42,149) sf 4,527 sf Source: The CoStar Retail Report (First Quarter 2015, New York City). The Downtown sub-market reported two positive net absorption, 7,968 square feet in the 1Q2015 and positive 3,919 square feet at the end of 1Q2014, a year ago. In the three quarters prior to 1Q2015, there was declining net absorption of negative 102,442 square feet in 2Q2014, negative 82,020 square feet in 3Q2014, and negative 27,949 square feet in 4Q2014. The Uptown sub-market reported two positive net absorption 4,527 square feet at the end of 2Q2014 and 25,580 square feet, a year ago, at the end of 1Q2014. It reported negative net absorption of 42,149 square feet in 3Q2014, 71,710 square feet at the end of 4Q2014, and 4,368 square feet at the end of 1Q2015. The Midtown Manhattan submarket reported its first positive net absorption for the last four quarters at the end of 1Q2015 with a reported positive 100,786 square feet absorbed. The reported net absorption for the four quarters of 2014 has been negative. The Midtown South submarket reported negative 13,115 square feet at the end of 1Q2015 and negative net absorption for the first three quarters of However the year ended with a positive 62,682 square feet net absorption at the end of 4Q2014. Downtown submarket reported only one positive quarter (4Q2013), compared to negative 4,774 square feet, 10,826 square feet and 27 square feet at the end of 3Q2013, 2Q2013 and 1Q2013 respectively. There has been some reported relocation of companies to space Downtown, following the relocation of office tenants and increased residential occupancy in this submarket. Rental Rates According to CoStar, the average quoted asking rental rate in the New York City retail market, all classes, is down below the previous quarter, and down from the level four quarters ago. Average asking rent ended the 1Q2015 at $88.26 per square foot per annum. That compares to $93.75 per square foot in the 4Q2014, and $93.32 per square foot at the PATJO Appraisal Services, Inc. Page 35

36 end of the 2Q2014. This represents a 5.9% decrease in rental rates in the current quarter, and a 5.73% decrease from four quarters ago. The quoted rates for the Manhattan sub-markets at the end of 1Q2015 reveal the following: the Downtown submarket ended the quarter at $145.71, compared to $92.64 for the Midtown sub-market, $ for the Midtown South submarket, and $62.67 for the Uptown submarket. The quoted rental rates for the submarket over the past four quarters are as follows: Sub-markets Average Asking Rental rates 1Q2015 4Q2014 3Q2014 2Q2014 Downtown $ $ $ $ Midtown $92.64 $ $ $ Midtown South $ $ $ $ Uptown $62.67 $66.88 $68.24 $63.18 Source: The CoStar Retail Report (First Qurter 2015, New York City). The Downtown submarket shows an increasing trend over the past four quarters with a dramatic change between the end of 4Q2014 and 1Q2015. The average quoted rental rate at the end of 4Q2014 was $129.37/SF, indicating an increase of 12.63%. In 3Q2014 the Downtown rental rate was $126.60/SF indicating a 2.14% decline from the 2Q2014. The Downtown sub-market is the only sub-market to show an increase in quoted rental rates over the last quarter as tenant s desires have shifted into this market due to the migration of office tenants and the development of residential conversions in this area. The completion and further development of the World Trade Center buildings and further conversion of office space into residential units should continue to fuel the demand for retail space. Availability Rates According to CoStar, the New York City (Manhattan) retail vacancy rates fell in the first quarter of 2015 (1Q2015), ending the quarter at 3.4%. Over the previous four quarters, the market has seen an overall increase in the vacancy rate, with the rate going from 3.3% in the 2Q2014 to 3.7% at the end of the 3Q2014, and 4Q2014, to 3.4% in the 1Q2015. Broken down by Sub-markets, the retail market shows the following: Sub-markets Vacancy Rates 1Q2015 4Q2014 3Q2014 2Q2014 Downtown 6.9% 7.9% 8.9% 6.9% Midtown 2.9% 3.8% 3.3% 3.1% Midtown South 3.2% 3.0% 3.5% 3.4% Uptown 3.3% 3.2% 2.9% 2.6% Source: The CoStar Retail Report (1Q2015, New York City). PATJO Appraisal Services, Inc. Page 36

37 There appears to be some volatility in the New York City retail market especially in the Downtown sub-market, which appears to be experiencing some revitalization. The vacancy rate in this sub-market has declined over the past three quarters, but remains higher than in the other sub-markets. This area was hardest hit by the event of Hurricane Sandy in October 2012 but, is beginning to show evidence of revitalization and growth. While there has been the addition of office and residential space to the Downtown Manhattan area, there has been a slower rate of growth in retail space addition. Demand for space in this area has been growing to support the growth in business activities. New York City (Manhattan) Retail Market Statistics Period Total Inventory (sf) Vacancy Rate Net Absorption (sf) Quoted Rate/sf 1Q ,089, % 91,271 $ Q ,161, % (155,321) $ Q ,296, % (174,345) $ Q ,307, % (155,105) $93.32 Source: The CoStar Retail Report (First Quarter 2015, New York City). New York City (Manhattan) Retail Sub-Market Statistics Sub-Market Total Inventory (sf) Vacancy Rate Net Absorption YTD (sf) Quoted Rate/sf Downtown 3,697, % 7,968 $ Midtown 16,364, % 100,786 $92.64 Midtown South 16,386, % (13,115) $ Uptown 14,639, % (4,368) $62.67 TOTALS 51,089, % 91,271 $99.26 Source: The CoStar Retail Report (First Quarter 2015, New York City). The General Retail Submarket Statistics for New York City (Manhattan) are as follows; Sub-Market Total Inventory (sf) Vacancy Rate Net Absorption YTD (sf) Quoted Rate/sf City Hall 1,675, % 2,968 $ Financial District 328, % 8,000 $0.00 Greenwich Village 1,945, % (12,727) $92.20 Tribeca 875, % (3,000) $0.00 World Trade Center 350, % 0 $ Source: The CoStar Retail Report (First Quarter 2015, New York City). Real Estate Board of New York (REBNY) Retail Market Report The Spring 2015 REBNY Retail Report showed ground floor asking rents increasing in all but one of the corridors surveyed, year over year. The report stated that the physical characteristics of the space (street/avenue frontage, ceiling height, presence of below or above grade space) have a significant impact on its rental value. PATJO Appraisal Services, Inc. Page 37

38 Manhattan Average Asking Rent Range: Major Retail Neighborhoods (All Available Space) Neighborhood Spring 2015 Spring 2014 % Change Eastside $188 $189-1% Westside $144 $145-1% Midtown $191 $190 +1% Midtown South $145 $136 +7% Downtown $143 $ % Upper Manhattan $72 $65 +11% Manhattan $153 $ % Cushman & Wakefield Retail Market Report According to Cushman and Wakefield 6, the average asking retail rent for the area south of Chambers Street in Lower Manhattan decreased slightly from $406 psf at the close of 2014 (4Q2014) to $394 psf at the end of 1Q2015. However, asking rent was up 57.6% from one year ago (since 1Q2014). In the past year, the retail space availability rate decreased from 9.1% to 8.6%. New retail leases in the 1Q2015 include restaurant giant Nobu which will expand into almost 15,000 square feet at 195 Broadway, Open kitchen which committed to 7,700 square feet at 120 Wall Street, and Starbuck s new lease at 14 Wall Street for 700 square feet. Growth in the demand for retail space Downtown Manhattan has been fueled by increase in tourist volume and the growth in hotel rooms. 6 Cushman & Wakefield; Market Beat; Retail Snapshot (1Q2015). PATJO Appraisal Services, Inc. Page 38

39 SUMMARY OF PROPOSED LEASE A summary of the proposed lease for the subject space is as follows; LANDLORD: TENANT: LOCATION: Hudson River Park Trust. City Vineyard & Wine Garden, LLC. Pier 26 in Hudson River Park, 233 West Street, New York, NY LEASED SPACE: Ground Floor - 3,735± sf Rentable Area Second Floor - 460± sf Rentable Area TOTAL - 4,195± sf Rentable Area Outdoor Patio 3,500± sf Rentable Area Outdoor Roof Terrace 4,460± sf Rentable Area Trash Room in Utility Bldg. 400± sf Rentable Area LEASE TERM: RENT: ESCALATION: COMMENT: 10 Years, to expire 12/31/ one 5-year renewal Initial Rent of $18,750 monthly or $225,000 per annum. ($53.63/SF) starting in May Rent abated by $150,000 in first three years in-lieu of Tenant Improvement Allowance. Unabated rent in year 3 will be $300,000 or $71.51/SF. Plus Percentage rent 5% of Gross Revenue over $4,000,000. 3% per annum. The tenant will pay an initial security deposit of $100,000. The lease calls for the tenant to pay all utilities, maintenance and repair. Tenant required to spend no less than $1,100,000 ($262.22/SF) on Tenant Improvement. The tenant, at his own cost and expense, will make significant improvements to the subject space. The subject property pays no Real Estate Taxes. Fixed Minimum Rent to be abated by one-third in the first three years due to expected business disruption caused by proposed construction on Pier 26. Assuming a lease commencement date of June 2015, the tenant will effectively enjoy a one year rent free period (June 2015 May 2016). PATJO Appraisal Services, Inc. Page 39

40 RETAIL MARKET RENTAL SURVEY We have researched the retail rental market in the subject neighborhood and other similar neighborhoods in Manhattan for recently rented space and space currently available for rent that is similar to the subject space. The subject space is rather unique both in terms of its location on a pier and its physical characteristics (design and layout). The space is new, it is located in a free standing building, it enjoys spectacular views of the Hudson River, and it has a large roof terrace and outdoor patios that can be used for outdoor dining on a seasonal basis. The following transactions were considered in arriving at a market rental value for the subject space. RESULT OF RFP PROCESS FOR SUBJECT SPACE We have been informed by the client that a Request for Proposal (RFP) was issued in late 2013 for prospective tenants to bid for the leasing of the subject space (Pier 26 Restaurant). The RFP was widely advertised. Three submitted proposals were deemed compliant with the RFP requirements and each contemplated similar build-out costs. The respondent with the highest rent offer was conditionally selected in July Negotiations with that conditionally selected respondent (Respondent 1) were terminated in February 2015 when the restaurateur declined to execute the draft lease, citing seasonality and other business risk concerns at the subject location. The other two finalist RFP respondents were then asked to update their financial offers in March 2015, which they both did. The RFP respondent with the next highest offer (Respondent 2) was then selected. The annual rent offers for all three RFP respondents is depicted below: Annual Rental Offer Comparison (as of March 2015) Year Respondent 1 Respondent 2 Respondent 3 (declined to execute) (prospective lessee) 1 250, , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,099 Total 3,289,970 3,048,739 2,056,603 Tenant work offsets of approximately $105,000 (total) for Respondent 1 and $150,000 (total) during the first three years for Respondent 2 and Respondent 3 included in each rent schedule. PATJO Appraisal Services, Inc. Page 40

41 ANALYSIS OF LEASES FOR SIMILAR USES AT OTHER MANHATTAN LOCATIONS Tenant/Concessionaire: Chef Driven Location: Union Square Park in Union Square Type of Business: Restaurant Space Leased: 2,850± sf indoor space; 1,428± sf outdoor space + subway kiosk. Lease Date: 03/26/2012 Current Rent: $318,270 per annum (or $111.67/SF of indoor space). Tenant/Concessionaire: P.D. Hurley Location: Pier 84 at 42 nd Street Hudson River Park Type of Business: Restaurant Space Leased: 2,346± sf of indoor space and 3,100± sf of outdoor space. Lease Date: 02/19/2013 Current Rent: $254,616 per annum (or $108.53/SF of indoor space). Tenant/Concessionaire: Merchant #2 & #3 Location: Pier 15 at South St Seaport Ferry Terminal East River Esplanade Type of Business: Restaurant & Bar Space Leased: 5,548± sf of indoor space and 2,850± sf of outdoor space. Lease Date: 03/01/2012 Current Rent: $358,000 per annum (or $64.53/SF of indoor space). Tenant/Concessionaire: Merchant #1 Location: Pier 62 at 22 nd Street Chelsea Piers in Hudson River Park Type of Business: Beer Garden Space Leased: 6,000± sf of outdoor space. Lease Date: 04/14/2014 Current Rent: $220,000 per annum (or $36.67/SF of outdoor space). It is our opinion that the location of the subject building is inferior to all four properties listed above. PATJO Appraisal Services, Inc. Page 41

42 RETAIL RENTAL NUMBER ONE Washington Street, New York, NY BUILDING Type: 5-Sty Mixed-Use Bldg Building Size: 66,400± sf Leased Space: 1,400± sf Monthly Rent: $13,417 Annual Rent: $115.00/SF Date: October 2014 COMMENT This property is situated on the southwest corner of Washington Street and Vestry Street in the Tribeca section of Manhattan. The site is improved with a five-story condominium apartment building with a penthouse floor and retail space on the ground floor. The site contains 24,086± square feet. The building was constructed in the early 1900 s. The total gross building area is 66,400± square feet above grade. The building is called River Lofts. The building was converted to condominium in It was reported that some ground floor retail space was leased in October 2014 to Reines Gallery. The tenant pays all utilities. The total rentable area at street level is 1,400 sf and the annual rental was $161,000 which is equivalent to $115.00/SF. The Landlord provided full build-out. Source: Broker - CoStar - PATJO Appraisal Services, Inc. Page 42

43 RETAIL RENTAL NUMBER TWO 508 Greenwich Street, New York, NY BUILDING Type: 4-Sty Mixed Use Building Size: 5,800± sf Leased Space: 1,450± sf Monthly Rent: $15,000 Annual Rent: $124.14/SF Date: January 2015 COMMENT This property is situated on the west side of Greenwich Street, between Canal Street and Spring Street in the SoHo section of Lower Manhattan. The site is improved with a fourstory masonry attached building with commercial space on the ground floor and apartments above. The site contains 2,000± square feet. The building was constructed in the 1900 s and extensively renovated in The total gross building area is 5,800± square feet above grade. The ground floor commercial space was previously home to the 508 Gastro Brewery, a restaurant and bar that operated in the building for six years. The space was previously occupied by a restaurant, and is fully fixtured and licensed. This ground floor space was reportedly leased in January 2015 to Houseman (a Restaurant) at a rent of $15,000 monthly. The tenant pays electric. The annual rental is equivalent to $124.14/SF. At the time of inspection, the new restaurant was in operation. Source: Broker - CoStar PATJO Appraisal Services, Inc. Page 43

44 RETAIL RENTAL NUMBER THREE Hudson Street, New York, NY BUILDING Type: 6-Sty Mixed-Use Building Size: 7,965± sf Leased Space: 3,300± sf Monthly Rent: $28,000 Annual Rent: $101.82/SF Date: June 2015 COMMENT This property is situated on the west side of Hudson Street, between Harrison and Jay Streets in the Tribeca section of Lower Manhattan. The site is improved with a six-story masonry attached building with condominium apartments above commercial space on the ground floor for a total of 7,965± square feet. The leased space comprises of 1,600 square feet of retail space at street level and finished basement for a total of 3,300 square feet. The site contains 2,000± square feet. The building was constructed in The commercial space on the ground floor and in the basement was rented in June 2015 for restaurant use. The rent is $28,000 per month. The tenant pays all utilities. The space was previously occupied by a restaurant, and is fully fixtured and licensed. The annual rental is equivalent to $101.82/SF. Source: Broker Danielle Lacko PATJO Appraisal Services, Inc. Page 44

45 RETAIL RENTAL NUMBER FOUR 152 Franklin Street, New York, NY BUILDING Type: 7-Sty Mixed Use Building Size: 25,000± sf Leased Space: 2,500± sf Monthly Rent: $25,000 Annual Rent: $120.00/SF Date: April 2015 COMMENT This property is situated on the south side of Franklin Street, between Varick Street and Hudson Street in the Tribeca section of Lower Manhattan. The site is improved with a seven-story masonry attached condominium apartment building with commercial space on the ground floor. The site contains 4,375± square feet. The building was constructed in 1915 and it has been renovated many times over the years. The total gross building area is 25,000± square feet above grade. The ground floor commercial space of 2,500 square feet comes with finished basement space of 1,300 square feet. This ground floor and basement was available for leased in April 2015 at a rent of $25,000 monthly. The tenant will pay all utilities and a proportionate share of increases in real estate taxes over the base year. The annual asking rental is equivalent to $120/SF. It was reported that a lease is currently pending but not yet signed. Source: Broker - Herbert Chou PATJO Appraisal Services, Inc. Page 45

46 RETAIL RENTAL NUMBER FIVE 132 Thompson Street, New York, NY BUILDING Type: 6-Sty Mixed Use Building Size: 24,522± sf Leased Space: 900± sf Monthly Rent: $9,525 Annual Rent: $127.00/SF Date: November 2014 COMMENT This property is situated on the east side of Thompson Street between Prince Street and West Houston Street in the SoHo section of Lower Manhattan. The site is improved with a six-story masonry attached apartment building with commercial space on the ground floor. The site contains 5,760± square feet. The building was constructed in the 1920s and it contains 39 apartments and two commercial units. The total gross building area is 24,522± square feet above grade. The ground floor commercial space comes with unfinished basement. This ground floor was reportedly leased in November 2014 to Thompson Chemists at a rent of $9,525 monthly. The tenant pays electricity. The annual rental is equivalent to $127.00/SF. Source: Broker New York Commercial Real Estate Services PATJO Appraisal Services, Inc. Page 46

47 RETAIL RENTAL NUMBER SIX Greenwich Street, New York, NY BUILDING Type: 6-Sty Mixed Use Building Size: 20,068± sf Leased Space: 1,450± sf Monthly Rent: $18,004 Annual Rent: $149.00/SF Date: March 2015 COMMENT This property is situated on the southeast corner of Greenwich Street and Charlton Street in the SoHo section of Lower Manhattan. The site is improved with a six-story masonry co-op apartment building with commercial space on the ground floor. The site contains 3,750± square feet. The building was constructed in the 1900s. The total gross building area is 20,068± square feet above grade. The building contains 11 apartments and ground floor commercial space. A section of the ground floor (adjacent to an existing restaurant) was reportedly leased in March 2015 to Oishi Judo at a rent of $18,004 monthly. It was reported that this is a gross rent with the Landlord paying all utilities. The annual rental is equivalent to $127.00/SF. Source: Broker New York Commercial Real Estate Services PATJO Appraisal Services, Inc. Page 47

48 RENTAL ADJUSTMENT GRID PATJO Appraisal Services, Inc. Page 48

49 COMPARABLE RENTAL LOCATION MAP PATJO Appraisal Services, Inc. Page 49