THE WATCH LIST NEWSLETTER 1

A WEEKLY NEWSLETTER FOCUSING ON CHANGING MARKET CONDITIONS, COMMERCIAL REAL ESTATE, MORTGAGES AND CORPORATIONS PUBLISHED BY COSTAR NEWS

IN THIS WEEK'S ISSUE:

High Turnover in Office Ownership Confirms Growing Strength of Secondary Markets .................................................................... 1 A New Trading Platform for Owning Office Property? ....................................................................................................................... 2 Capital Market Round-Up: Five REITs File for New IPOs ................................................................................................................. 5 Global Investable Real Estate To Grow to $45 Trillion by 2020 ........................................................................................................ 8 Bi-Lo Shedding 25 Stores After Delhaize Merger .............................................................................................................................. 9 Gordon Brothers Group To Close All 360 Dots Stores .................................................................................................................... 10 L.A. Landlord EVOQ Properties Explores Possible Sale of Company ............................................................................................. 10 Mack-Cali Strikes Deal to Sell Office Portfolio to Keystone for $230.8M ......................................................................................... 11 KKR-Backed Consortium Buying Nassau County's Broadway Mall ................................................................................................ 12

High Turnover in Office Ownership Confirms Growing Strength of

Secondary Markets Office Investors Increasingly Active Across More Secondary Markets Even as Core Gateways Maintain

Their Luster

Last year saw the return of a thriving office investment market, so much so in fact, that several local markets saw significant chunks of their overall stock of buildings change hands in 2013. Analyzing such office inventory turnover can provide a good barometer of where office investment dollars are flowing, and also reveal markets that offer opportunities for further investment. "While overall CRE investment volume rose 14% in 2013 from 2012 levels, office sector activity increased 17% to over $104 billion, the highest annual volume recorded for the four major property types,” said Nancy Muscatello, senior real estate economist with CoStar Group. "Although last year’s haul was still shy of the peak office investment levels we saw in 2007, it does demonstrate the return of strong investor interest in office property, although that wasn’t necessarily the case everywhere.” Looking at office inventory turnover trends across the top 54 U.S. office markets, five Southern and Western markets saw more 10% or more of their total office market inventory change hands last year: Austin, Dallas/Fort Worth, Atlanta, Houston and Denver. Austin was especially popular with office investors as 13% of its office space was acquired by new owners in 2013. Six office markets saw just 3% or less of their stock change hands: Long Island, Sacramento, Baltimore, Pittsburgh, Honolulu and Richmond, which posted the lowest turnover of 2%. The surge in transaction volume in many of these markets was predictable, Muscatello said. "Houston is a shiny object that investors cannot seem to get enough of, offering a bulletproof demand story and fairly decent yields," as a result trading volume has soared in some key submarkets, she said.

MARK HESCHMEYER, EDITOR WWW.COSTAR.COM MARCH 3, 2014

© 2014 Auction.com, LLC. 1 Mauchly, Irvine, CA 92618. All rights reserved. Auction.com, LLC is duly licensed in all states in which it operates. WI RE Brkr 936870-091; Registered Auction Firm 384-53; Registered Auctioneer Mark P. Buleziuk 2585-52, FL RE Brkr No. CQ1031187; Auctioneer Mark Buleziuk AU3448, Michael E. Carr AU2913, IL RE Brkr 478.012986, MD Janice Zucco 5000013, MI RE Brkr 6505355610, MO RE Brkr 2008027754.

UPCOMING COMMERCIAL EVENTSJuly Nationwide (2nd) Bid Online July 22-24 Submission Deadline May 26

August Nationwide (1st) Bid Online August 6-8Submission Deadline June 9

August Nationwide (2nd) Bid Online August 19-21Submission Deadline June 23

WWW.AUCTION.COM The nation’s leading online real estate marketplace.

Revolutionizing real estate with a superior way to buy and sell

$11 Billion In Commercial Assets Sold Since 2010BUY: www.auction.com/commercial SELL: www.auction.com/sell or call 888.774.3852

Upcoming Commercial Asset Auctions:

Contact: Dan MaloofLicense: IL 475.122647Phone: 309-693-3000Email: dan@maloofcom.com

36,436 SF • Peoria, ILStarting Bid: $400,000Search Code: B123-130Bid Online: March 10-12

OFFICE

ILLINOIS

ILLINOIS

RETAIL

64,845 SF • Chicago, ILStarting Bid: $1,750,000Search Code: B125-115Bid Online: March 24-26

MARYLAND

OFFICE

244,359 SF • Greenbelt, MDStarting Bid: $6,000,000Search Code: B125-105Bid Online: March 24-26

Contact: Jud RyanLicense: MD 582154Phone: 202-463-1118Email: jud.ryan@cassidyturley.com

HOTEL

WISCONSIN

98 Keys • Eau Claire, WIStarting Bid: $500,000Search Code: B123-137Bid Online: March 10-12

Contact: David Perin/Jeff WestgorLicense: WI 50066-90Phone: 703-839-8103Email: david.perrin@hunterhotels.com

388 Units • St. Louis, MOStarting Bid: $2,500,000Search Code: B125-107Bid Online: March 24-26

Contact: Michael HanrahanLicense: MO 2000173213Phone: 314-746-0371Email: michael.hanrahan@cassidyturley.com

Contact: Ryan NelsonLicense: IL 475.119549Phone: 847-939-6017Email: rnelson@forestitereality.com

MISSOURI

MULTI-FAMILY

Contact: Anthony Falor/David ZippinLicense: FL 3204422Phone: 973-727-0314Email: afalor@rockwoodrea.com

60 Keys • Atlantic Beach, FLStarting Bid: $500,000Search Code: B123-140Bid Online: March 10-12

HOTEL

FLORIDA

Contact: Barry SwatsenbargLicense: MI 6501294779Phone: 248-848-4178Email: barry.swatsenbarg@freg.com

75,286 SF • Farmington Hills, MIStarting Bid: $3,000,000Search Code: B125-104Bid Online: March 24-26

OFFICE

HOTEL

WISCONSIN

104 Keys • Green Bay, WIStarting Bid: $500,000Search Code: B123-136Bid Online: March 10-12

Contact: David Perin/Jeff WestgorLicense: WI 50066-90Phone: 703-839-8103Email: david.perrin@hunterhotels.com

MICHIGAN

THE WATCH LIST NEWSLETTER 2

“Austin has also been on the radar of investors for quite some time. The metro had a huge inventory turnover in 2013 (13.1% of inventory,) although a sizable portion of that (40%) was due to portfolio sales," Muscatello noted. The biggest portfolio to trade hands last year in Austin was the sale of the Thomas Properties Group portfolio of five trophy CBD towers as part of the firm’s acquisition by Parkway Properties. "With a large chunk of the CBD inventory having already traded in this market, I would expect sales to remain strong, but turnover rates to moderate in the near term," Muscatello added. Chris Hightower, an investment broker with Marcus & Millichap in Austin, said the ownership changes demonstrate the evolution of the Austin market. Historically, big institutional buyers have eschewed the ‘Live Music Capital of the World’ due to its relatively small size compared to major markets. “However Austin has become real estate darling due to the hard charging Austin economy,” Hightower said. Meanwhile, some of the nation’s core coastal markets saw relatively lower inventory turnover, including Washington, DC, San Francisco and New York, where just 5% of inventory traded hands. As a way of comparison, the average across the top 54 U.S. office markets was 6.33% turnover. "Of course, that’s due in part to the size of those markets,” Muscatello noted. “Not only were they at the forefront of investment activity early in the recovery, but markets like New York and Washington DC have office inventories that are much larger than the average market. Investment volume in New York for example, still accounted for 23% of all office sales in 2013, even though New York’s share of the office inventory is only 10%. San Francisco also pulled in an outsized share of sales volume in 2013.” Andrea Cross, national office research manager for Colliers International, also noted the turnover trend in the gateway markets. "New York, San Francisco and Boston experienced the strongest demand from investors coming out of the recession, so many office assets in those markets have already traded. Lower inventory turnover in 2013 is attributable to a shortage of available assets and strong price increases in recent years rather than a lack of interest in those markets,” Cross said. It's not so much that investor interest has waned in those markets, but rather it has expanded to include others. “Office turnover in markets outside of the core gateway markets has picked up with broader economic growth and higher investor confidence in the office market’s recovery,” Cross said. “We are seeing higher turnover in many markets that were out of favor earlier in the recovery.” Markets such as Nashville, Jacksonville, New Orleans and Las Vegas all saw 8% turnover in office inventory last year, according to CoStar data. “Office sales volume is certainly on the rise in secondary markets as the recovery spreads to more markets and investors move out on the risk spectrum in search of higher yields,” Muscatello said.

A New Trading Platform for Owning Office Property? If ETRE Financial has its Way, Investors Will Be Able to Buy and Sell Shares in Individual Properties,

Just Like Stocks for Individual Companies

Very soon, if everything goes according to plan, individual investors will be able to buy and trade ownership stock in a single commercial real estate property, just like they would shares of common stock in a single company. The first property set as a test case for such trading is a noteworthy downtown Washington, DC, office building. ETRE Financial LLC, a New York-based real estate financial services and technology company, is launching what it calls a first-of-its-kind, exchange-traded real estate platform for investing in shares of individual commercial real estate assets and portfolio REITs listed on national exchanges.

THE WATCH LIST NEWSLETTER 3

The company this week filed paperwork with the U.S. Securities and Exchange Commission for an initial public offering of ETRE REIT, which will actually be a limited liability corporation formed to permit public investment in individual commercial real estate properties. The twist is that each of the properties is to be held by the LLC will be held as a separate real estate investment trust, with shares traded on the NASDAQ exchange. In its IPO, ETRE REIT is looking to raise $53 million that will be used to finance its first purchase. ETRE has cut a deal to buy 1201 Connecticut Ave. NW, also known as the Longfellow Building, from Mack-Cali Realty Corp. A final sales price has not been negotiated. Mack-Cali purchased the property for $32 million in 1999. The selling price is expected to be much higher. ETRE has received a loan term sheet from Morgan Stanley Mortgage Capital Holdings LLC for a 10-year commercial mortgage, which will enable the borrowing of up to $44.6 million of the purchase price of the property. The proposed loan, providing for an interest-only payment feature for 10 years, is expected to bear interest at a fixed rate of 4.35% per annum. Longfellow is a 12-story office building with 173,688 total rentable square feet located at the intersection of Connecticut and Rhode Island avenues, one block from the Farragut North metro station. The building contains both office and retail space and, as of year-end, was 86.7% leased to such tenants as Qorvis Communications, Brooks Brothers, Leo A. Daly, and Radio Free Europe/Radio Liberty. Qorvis, the largest tenant, occupies 17.9% of the building as its headquarters. In its IPO, ETRE is selling only Series A-1 common shares, which has been established specifically for the purpose of allowing investors who acquire the A-1 common shares in this offering to own 1201 Connecticut Ave.

THE WATCH LIST NEWSLETTER 4

THE WATCH LIST NEWSLETTER 5

ETRE seeks to broaden the investment opportunity in commercial real estate through creation of what it calls the Electronic Traded Property (ETP), a new process for investing in individual commercial real estate assets and REIT equity shares that claims to support mark-to-market simultaneous pricing in price per share, price per square foot, price per unit, and price per key in real time, for both the single-asset entities and the larger portfolio REIT counterparts. "ETRE is the next evolutionary step in real estate investing," claims Paul Frischer, ETRE's co-founder and CEO, who launched the company last year, saying he wanted to bring single-asset REITs to the market. As envisioned, the ETRE program would also offer an alternative way to buy and sell real estate, allowing owners of single assets and smaller real estate portfolios to sell a portion or the entire stake in their properties to the public market. Prior to establishing the company in August 2012 and setting up the platform this winter, Frischer was executive managing director of research and real estate strategies at the former Newmark Knight Frank (now Newmark Grubb Knight Frank) from January 2009 to February 2012. Frischer was also the founder and managing member of Rexx Index LLC, formed in 2006, which described itself as a "benchmark provider in the emerging real estate derivatives market that utilizes algorithmic and econometric models to standardize commercial real estate in U.S. markets." His partner in the ETRE venture is Jesse Stein, who serves as COO. Stein previously served as the executive vice president of acquisitions for United Realty Advisors, LP, an affiliate of United Realty Partners, a privately held real estate investment and advisory firm. Stein said the idea behind the ETRE platform is to deliver unprecedented transparency into publicly-traded real estate in real-time metrics for both equity and real estate investors. "The platform provides investors with the ability to create their own diversified real estate portfolios, and allocate investments based on geographic, asset type and yield criteria," said Stein.

Capital Market Round-Up: Five REITs File for New IPOs American Realty Capital Continues its Recent Dominance of Capital Markets; Plus Additional Funding

News from Bascom, Farallon, Greystone, Investco, Heitman, iStar and others

In one of the busiest weeks in recent memory for real estate activity in the capital markets, five REITs filed paperwork with the U.S. Securities & Exchange Commission preparing for initial public stock offerings seeking to raise more $3.4 billion. Three filings came from American Realty Capital, one from Griffin American Capital, and one from a new entity, ETRE Financial.

AMERICAN REALTY CAPITAL

American Realty Capital New York Recovery REIT Inc. has hired Barclays Capital Inc. and RCS Capital, a division of Realty Capital Securities LLC, as financial advisors to assist the company in evaluating strategic alternatives following the successful closing of its $1.5 billion IPO. The company has decided to pursue a listing of its common stock on the New York Stock Exchange and shorten its name to "New York REIT Inc." If all goes according to plan, the REIT expects to have its stock listed on the Big Board by this summer. The company received $240 million of additional commitments to its financing facility, including $100 million each from Barclays Bank PLC and RBS Citizens, N.A., and a $40 million commitment from SunTrust Bank. The additional commitments increases the company’s aggregate borrowings available under its credit facility to $630 million. "We’ve built a high quality New York City portfolio acquired at an attractive time in the real estate cycle," said Michael Happel, executive vice president and chief investment officer of American Realty Capital New York Recovery REIT. "In addition, we have a pristine balance sheet and active acquisitions pipeline that positions us

THE WATCH LIST NEWSLETTER 6

THE WATCH LIST NEWSLETTER 7

well for future growth. In our view, the public markets will be very receptive to our pure play strategy focused on New York City, one of the world’s premier real estate markets.” In a separate action, American Realty Capital filed plans for a second New York City-focused REIT to operate as American Realty Capital New York City REIT. The new REIT, which is seeking to raise up to $750 million, plans to invest in office properties located in the five boroughs of New York City, focusing on Manhattan. It may also invest in retail spaces and amenities, as well as hospitality assets, residential assets and other property types located in New York City. For those of you at home keeping track, this would be one of 13 publicly offered, non-traded REITs sponsored by the extremely active American Realty Capital. And they're not done yet. In a third ARC deal, United Development Funding Income Fund V registered for a $750 million IPO offering. UDF V is a newly organized REIT that expects to originate and buy secured loans for the acquisition and/or development of single-family residential lots. It will also make direct investments in land for single-family lot development. UDF V is advised by American Realty Capital Residential Advisors LLC, an affiliate of Nicholas Schorsch’s AR Capital, one of its co-sponsors. American Realty Capital will be responsible for coordinating the management of our day-to-day operations and for identifying and making investments.

GRIFFIN-AMERICAN CAPITAL

Also this past week, the SEC declared effective Griffin-American Healthcare REIT III’s IPO of $1.9 billion. Griffin-American Healthcare REIT III intends to acquire a portfolio of health care real estate, focusing primarily on medical office buildings, senior housing facilities, skilled nursing facilities and hospitals. This is the third REIT for Irvine, CA-based Griffin American Capital, and both the two previous ones are focused on health care facilities. Griffin Capital and affiliates have acquired or constructed more than 28 million square feet of space since 1995, and currently owns, manages, sponsors or co-sponsors a portfolio of more than 26.08 million square feet In 32 states, representing approximately $4.7 billion in asset value.

ETRE FINANCIAL

In a fifth filing, ETRE Financial LLC, a New York-based real estate financial services and technology company, filed paperwork with the U.S. Securities and Exchange Commission for an initial public offering of ETRE REIT, which will actually be a limited liability corporation formed to permit public investment in individual commercial real estate properties. The twist is that each of the properties held by the LLC will be held as a separate real estate investment trust, with shares traded on the NASDAQ exchange. In its IPO, ETRE REIT is looking to raise $53 million that will be used to finance its first purchase. ETRE has cut a deal to buy 1201 Connecticut Ave. NW, also known as the Longfellow Building, from Mack-Cali Realty Corp., in Washington, D.C. A final sales price has not been negotiated. Mack-Cali purchased the property for $32 million in 1999. The selling price is expected to be much higher. CoStar News covered this story in more detail, which you can read here.

ADDITIONAL FUNDING NEWS

Bascom Group in Irvine, CA, closed its second fully discretionary real estate investment fund. The fund, Bascom Value Added Apartment Investors II LLC, which will provide up to $300 million of buying power including leverage, will be used to buy value-added multifamily property in 11 Western states. To date the fund has acquired Andalucia Apartments in Palm Springs, CA, - 175 units; Arcadia Cove in Phoenix, AZ, - 432 units; Campbell Plaza in Campbell, CA, - 121 units; The Terraces in Prescott, AZ, - 226 units; Broadstone Montecito in Las Vegas,- 336 units; and Huntington Villas in Huntington Beach, CA, - 114 units.

THE WATCH LIST NEWSLETTER 8

Farallon Capital Management in San Francisco completed fundraising for Farallon Real Estate Partners with commitments of $375 million. FREP is targeting undervalued income-producing office, multifamily, retail, and industrial properties. Greystone, a New York-based real estate investment and development firm, and Quilvest & Partners, a global independent private equity investor, formed a joint venture to acquire multifamily assets across the U.S. Initial target markets for asset acquisition include areas in the Southeast, Mid-Atlantic and Midwest. They will seek to acquire multifamily properties that have a “value-add” component, including repositioning through light rehabilitation and improved management. The ideal acquisition targets are of 1980s vintage - or newer - and over 200 units in size. Illinois Teachers’ Retirement System increased allocations within its $5.1 billion real estate portfolio to three of its external property managers by a total of $350 million. The goal is to increase the long-term real estate allocation to 14% of the entire investment portfolio from the current 11.7%. Capri Capital Partners, of Chicago, which currently manages $1 billion in TRS assets, will receive an additional $125 million. Invesco Real Estate, of Dallas, which currently manages $456.6 million in TRS assets, will receive an additional $125 million. Heitman LLC, of Chicago, which currently manages $1.2 billion in TRS assets, will receive an additional $100 million. iStar Financial Inc. in New York partnered with a sovereign wealth fund to form a venture in which the partners plan to contribute up to an aggregate $500 million of equity to acquire and develop up to $1.25 billion of net lease assets over time. iStar will own approximately 52% of the venture and will be responsible for sourcing new opportunities and managing the venture and its assets in exchange for a promotional and management fee. The venture’s first investment is a 410,000-square-foot office and data campus outside of Washington DC net leased to AT&T through 2025. It was acquired by iStar for $94 million during the fourth quarter and was subsequently contributed to the venture.

Global Investable Real Estate To Grow to $45 Trillion by 2020 PwC Anticipates Total Investable CRE in North America To Rise 38% to $11 Trillion

Rapid urbanization and demographic changes, especially within emerging markets, is anticipated to lead to substantial growth in the real estate investment industry over the next six years, according to Real Estate 2020: Building the future, a new report from PwC. At the same time as the industry's opportunities grow, so too will assets invested into the sector. The report anticipates that the global stock of investable real estate will rise by more than 55% to around $45.3 trillion by 2020, from a 2012 total of $29 trillion, and is expected to expand again by a similar proportion by 2030. The expansion will be greatest in emerging economies, where economic development should lead to better tenant quality and, in some countries, clearer property rights and will play out across housing, commercial real estate and infrastructure. The report also finds that private capital is expected to play a critical role in funding the growing and changing need for real estate and its supporting infrastructure. Intense competition for prime real estate will likely cause real estate managers and investors to seek out new opportunities for yield. Yet the growing and changing real estate world will present them with a far wider range of risks, which they should be equipped to manage. "The real estate industry is currently undergoing fundamental changes today that we expect will significantly reshape the landscape in 2020," said Byron Carlock, U.S. real estate practice leader, PwC. "And with $40 trillion to $50 trillion of infrastructure investment forecasted, there will be significant new real estate opportunities, especially for urban density housing and transit-oriented development – and urban high street retail. Real estate managers and investors need the vision to anticipate emerging trends in the medium-term and prepare for them now in order to be successful in 2020." Other changes in real estate by 2020 will include:

THE WATCH LIST NEWSLETTER 9

Growth in emerging markets is anticipated to ratchet up competition for real estate assets and competition between real estate organizations. Sustainability will transform design of buildings and developments, presenting opportunities and risks for real estate asset managers. Technology will disrupt real estate economics: growth in online shopping will continue to reduce the need for retail space, but shorter delivery times increase the need for warehouse space close to customers. As workers increasingly work from home or satellite offices, the need for office space will decrease. For developers, technology advances will make eco-efficient building more practical. Real estate capital will take financial center stage. Private capital will play a critical role in funding the growing and changing need for real estate and its supporting infrastructure. Real estate managers will need to leverage the full range of financing possibilities to take on new types of risk, often with long-term investment horizons. "Demographic shifts will affect demand for real estate fundamentally in 2020 with the aging Baby Boomers creating an increase in demand for specialist types of real estate like senior and intergenerational housing, while there will be a rise in micro-units for the younger population," said Mitch Roschelle, partner, U.S. real estate advisory practice leader, PwC.

Bi-Lo Shedding 25 Stores After Delhaize Merger Bi-Lo Holdings LLC and Delhaize Group (received approval from the Federal Trade Commission (FTC) to proceed with the transaction in which Bi-Lo Holdings will acquire substantially all of the stores in the Sweetbay, Harveys and Reid’s supermarket chains from Delhaize. Bi-Lo Holdings agreed to divest 12 Delhaize America stores Florida, Georgia and South Carolina; and to close eight of the acquired Delhaize and five Bi-Lo Holdings stores due to close geographic proximity. In addition, Delhaize Group agreed to retain two additional stores and convert them to the Food Lion banner. “We have been preparing for the integration of the Sweetbay, Harveys and Reid’s banners and store associates for many months and are delighted to now move forward and welcome them to the Bi-Lo Holdings family,” said R. Randall Onstead, president and CEO of Bi-Lo Holdings. “Given the number of stores we are acquiring, we anticipated that we may be asked by the FTC to divest some stores to close the deal. In addition, with the close proximity of some of the Bi-Lo Holdings and Delhaize stores, we also knew that we would have to close a few stores as part of the acquisition,” Onstead said. The stores planned for closure are as follows:

Store Location Closure Date Store Location

Closure Date

Sweetbay #1906 Naples, Fla. 22-Mar-14 Reid’s #2612 Orangeburg, S.C. 31-May-14

Sweetbay #1798 Dade City, Fla. 5-Apr-14 Winn-Dixie #699 St. Petersburg, Fla. 10-May-14

Sweetbay #1872 Zephyrhills, Fla. 5-Apr-14 Winn-Dixie #624 Tarpon Springs, Fla. 17-May-14

Harveys #2360 Green Cove Springs, Fla. 3-May-14 Winn-Dixie #647 Seffner, Fla. 24-May-14

Harveys #2364 Tallahassee, Fla. 3-May-14 Winn-Dixie #101 Moultrie, Ga. 14-Jun-14

Reid’s #1507 Walterboro, S.C. 31-May-14 BI-LO #5423 Aiken, S.C. 12-Jul-14

Reid’s #2158 Cayce, S.C. 31-May-14

The 12 divested stores and their respective buyers, the two Delhaize America retained stores, and the anticipated transition dates for each store are as follows: Store Location Buyer Banner *eal Closing Dates

Sweetbay #1883 Arcadia, Fla. Rowe’s IGA X LLC Rowe’s IGA 3/22/2014

Sweetbay #1791 Wauchula, Fla. Rowe’s IGA VIII LLC Rowe’s IGA 3/29/2014

Sweetbay #1879 Lake Placid, Fla. Rowe’s IGA VII LLC Rowe’s IGA 4/5/2014

THE WATCH LIST NEWSLETTER 10

Store Location Buyer Banner *eal Closing Dates

Sweetbay #1795 Dunnellon, Fla. Rowe’s IGA IX LLC Rowe’s IGA 4/12/2014

Harveys #2374 Statesboro, Ga. Homeland Food World 5/3/2014

Harveys #2375 Statesboro, Ga. Homeland Food World 5/3/2014

Harveys #2336 Vidalia, Ga. Homeland Food World 5/3/2014

Harveys #2378 Bainbridge, Ga. Food Giant Supermarkets Inc. Food Giant 5/10/2014

Harveys #2379 Madison, Fla. Food Giant Supermarkets Inc. Food Giant 5/10/2014

Harveys #2349 Waynesboro, Ga. W. Lee Flowers and Company Inc. KJ’s Market IGA 5/10/2014

Harveys #2370 Sylvania, Ga. W. Lee Flowers and Company Inc. KJ’s Market IGA 5/17/2014

Reid’s #442 Batesburg, S.C. W. Lee Flowers and Company Inc. KJ’s Market IGA 5/31/2014

Reid’s #2167 Hampton, S.C. Retained by Delhaize Group Food Lion N/A

Harveys #2398 Americus, Ga. Retained by Delhaize Group Food Lion N/A

Gordon Brothers Group To Close All 360 Dots Stores After over 25 years in business, Dots LLC, an Ohio-based women's fashion discount retailer, is closing its doors. The company filed for Chapter 11 protection in January and this past week, Gordon Brothers Group, a global advisory, restructuring and investment firm, was awarded the store closing process for all locations by the bankruptcy court. Dots currently operates 360 retail locations across the United States. Store closing sales will begin on March 1st and will involve sale of store furniture, fixtures and equipment in order to wind down company operations. Dots, known for its affordable women's fashion, has struggled against competition from both online retailers and other brick and mortar discount retailers that have greater resources and wider brand recognition. The retail chain has experienced trouble throughout the economic downturn with a significant decline in store traffic. Dots' financial difficulties have been exacerbated by a number of largely unsuccessful changes in product pricing and marketing, as well as a burdensome lease portfolio. Store locations will remain open until all merchandise has been sold. Dots is currently owned by Irving Place Capital, a middle-market private equity firm.

L.A. Landlord EVOQ Properties Explores Possible Sale of Company By: Randyl Drummer The company that took over the downtown Los Angeles development sites and buildings of Meruelo Maddux Properties, Inc. after its 2011 bankruptcy announced it is exploring potential strategic options, including a possible sale. The board of directors of EVOQ Properties, Inc. announced the decision on Wednesday, adding the company will continue to operate during the process. EVOQ, which trades publicly on the OTC exchanges, had about $36.7 million cash at year-end 2013. EVOQ Properties, formerly Meruelo Maddux, one of the Los Angeles CBD's largest landlords, struggled during the downturn and filed for Chapter 11 bankruptcy in September 2009. When Meruelo Maddux emerged from reorganization in 2011, the board appointed 20-year real estate veteran Martin Caverly as CEO, replacing company founder Richard Meruelo. The company changed its name to EVOQ Properties in 2012. EVOQ has retained Houlihan Lokey and Eastdil Secured as financial advisors. Jeffrey Altman, managing director at Houlihan Lokey, and Stephen Somer, managing director at Eastdil Secured, will lead the review. The board authorized Houlihan Lokey to "undertake a comprehensive marketing process for a sale of the entire company, including soliciting acquisition proposals from all interested parties." the company said in a statement.

THE WATCH LIST NEWSLETTER 11

"The EVOQ Board of Directors and management team are committed to maximizing shareholder value," said Martin Caverly, CEO of EVOQ. "Authorizing a marketing of the company for sale demonstrates our commitment to achieving this important objective." The company said it cannot assure the process will lead to a transaction and doesn't plan to comment unless and until it approves a transaction or otherwise concludes the review. EVOQ’s portfolio includes more than 2 million square feet and more than 13 total acres of prime development land in downtown LA, anchored by Alameda Square, an office campus and "innovation hub" on 32 acres near the Arts and Fashion districts.

Mack-Cali Strikes Deal to Sell Office Portfolio to Keystone for $230.8M By: Randyl Drummer Mack-Cali Realty Corp. (NYSE: CLI) has arranged to sell a 2.3-million-square-foot portfolio of 12 office properties in Northern New Jersey, New York and Connecticut to Keystone Property Group for $230.8 million. Pennsylvania-based Keystone and Edison, NJ-based Mack-Cali announced they have agreed to form various joint ventures under which Keystone will pay $201.7 million in cash and the balance in senior and subordinated equity. The tri-state transaction, the fifth deal between Keystone and Mack-Cali, extends Mack-Cali's strategy of selling suburban office properties to enter the apartment business. The deal also furthers Keystone's goal of expanding its regional commercial property footprint. The companies did not give an estimated closing date for the transaction, which is subject to the usual due diligence and obtaining necessary waivers or non-exercise of certain rights of first offer before the sale can close. "This transaction is another step forward in our strategy to redeploy capital into our multifamily platform, while participating in the upside that will be created by the repositioning of this portfolio," said Mitchell E. Hersh, president and CEO of Mack-Cali. Keystone has been Mack-Cali's go to buyer lately. Last year, Keystone acquired 14 office properties and three land parcels in suburban Philadelphia from Mack-Cali. That deal was followed by the JV purchase by Keystone, Mack-Cali and Parkway Corp. of 100 Independence Mall West, a 400,000-square-foot office building in Philadelphia's CBD. In 2012, Keystone bought Moorestown Corporate Center in Moorestown, NJ; and 16 and 18 Sentry Park West in Blue Bell, PA. The Mack-Cali tri-state office portfolio includes the following properties:

Two buildings at 555 and 565 Taxter Road in Taxter Corporate Park in Elmsford, NY, 344,563 square feet;

570 Taxter Road in Elmsford NY, 77,859 square feet;

Two buildings at 200 and 220 White Plains Road in Talleyrand Office Park in Tarrytown, NY, 175,749 square feet;

1717 Route 208 North in Fairlawn, NJ, 150,477 square feet;

30 Knightsbridge Road in Piscataway, NJ, 686,316 square feet;

412 Mt. Kemble Road in Morris Township, NJ, 477,843 square feet;

Three buildings at 470, 400 and 530 Chestnut Ridge Road in Montvale, N.J., 200,444 square feet;

Soundview Plaza at 1266 East Main Street in Stamford, CT, 179,610 square feet.

THE WATCH LIST NEWSLETTER 12

KKR-Backed Consortium Buying Nassau County's Broadway Mall KKR, the Wall Street investment firm founded by Henry Kravis and George Roberts, has partnered with a group of West Coast investors to acquire Broadway Mall, a 1.1 million-square-foot regional mall with more than 100 stores in Hicksville, NY. KKR and Broadway Mall Pacific, a partnership between Pacific Retail Capital Partners, Clifton Realty and Peter Fair of Continuum Partners, agreed to buy the mall from Vornado Realty Trust for $94 million, or approximately $82 per square foot. The sale will result in net proceeds of approximately $92 million to Vornado after closing costs. Vornado took a fourth quarter loss on the sale of $13.4 million. Vornado acquired the mall in December 2005 for $152.5 million, including the assumption of an existing $94.9 million mortgage. Located on approximately 76 acres along Route 106/107, one-half mile south of Northern State Parkway and Long Island Expressway, the mall is anchored by Target, IKEA and Macy’s. According to KKR, the mall produced approximately $300 million in estimated aggregate retail sales in 2013. "Broadway Mall is an institutional quality asset in an irreplaceable location within a strong trade area," said Ralph Rosenberg, KKR's global head of real estate. "With a targeted capital improvement program and a revamped leasing strategy, Broadway will be a more attractive home for current and prospective retailers in Long Island. Our goal is to make the shopping experience even better than it is today." The Long Island retail property is the third regional mall KKR has acquired, and the firm’s 15th real estate fund investment since 2011. Seller Vornado Realty Trust was represented in the transaction by Cushman & Wakefield’s East Rutherford, N.J.-based Metropolitan Capital Markets Group (CMG) team of Andrew Merin, Gary Gabriel, David Bernhaut, Brian Whitmer and Nick Karali, along with Dallas-based Tom Salanty, Miami-based Mark Gilbert, and New York-based John Alascio. “This was a rare Long Island mall offering, and with its great demographics it attracted considerable interest,” said Merin. “It was widely marketed, with more than 120 confidentiality agreements signed and nearly 20 tours. That amount of interest is clearly an indication of the fact that retail continues to be a strong performer in the heavily populated tri-state area. “This acquisition also offers a value-add opportunity for the new ownership through the ability to rework tenancies and lease terms, as well as additional capital upgrades,” Merin added.