Self-Contained Appraisal Report Prepared For · property that is the subject of this report. 13. No...

JACKSON SQUARE PROMENADE 2460 Terry Road Jackson, Hinds County, Mississippi 39204 CBRE, Inc. File No. 11-341AT-3621

Self-Contained Appraisal Report

Prepared For: Jessie Wright ENTERGLOBE ENTERPRISES LLC 23133 Hawthorne Boulevard, Suite 110 Torrance, California 90505

VALUATION & ADVISORY SERVICES

V A L U A T I O N & A D V I S O R Y S E R V I C E S

3280 Peachtree Road, Suite 1400 Atlanta, GA 30305

T (404) 812-5010 F (404) 812-5051

www.cbre.com

November 21, 2011 Jessie Wright ENTERGLOBE ENTERPRISES LLC 23133 Hawthorne Boulevard, Suite 110 Torrance, California 90505 RE: Appraisal of Jackson Square Promenade 2460 Terry Road Jackson, Hinds County, Mississippi 39204 CBRE, Inc. File No. 11-341AT-3621

Dear Mr. Wright:

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

The subject is a 323,467-square foot retail property (neighborhood/community center) located at 2460 Terry Road in Jackson. The improvements were constructed in 1968, renovated in 2008 and are situated on a 31.530-acre site. Currently, the property is 42.4% occupied and is considered to be in average overall condition. The subject tenants are considered local in nature. The subject is more fully described, legally and physically, within the enclosed report.

Based on the analysis contained in the following report, the market value of the subject is concluded as follows:

MARKET VALUE CONCLUSION

Appraisal Premise Interest Appraised Date of Value Value Conclusion

As Is Leased Fee Interest November 4, 2011 $4,100,000

Compiled by CBRE

Data, information, and calculations leading to the value conclusion are incorporated in the report following this letter. The report, in its entirety, including all assumptions and limiting conditions, is an integral part of, and inseparable from, this letter.

The following appraisal sets forth the most pertinent data gathered, the techniques employed, and the reasoning leading to the opinion of value. The analyses, opinions and conclusions were developed

Jessie Wright November 21, 2011 Page 2

based on, and this report has been prepared in conformance with, our interpretation of the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. It also conforms to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and Title XI Regulations.

The report is for the sole use of the client; however, client may provide only complete, final copies of the appraisal report in its entirety (but not component parts) to third parties who shall review such reports in connection with loan underwriting or securitization efforts. The appraiser is not required to explain or testify as to appraisal results other than to respond to the client for routine and customary questions. Please note that our consent to allow an appraisal report prepared by CBRE, Inc. or portions of such report, to become part of or be referenced in any public offering, the granting of such consent will be at our sole discretion and, if given, will be on condition that we will be provided with an Indemnification Agreement and/or Non-Reliance letter, in a form and content satisfactory to us, by a party satisfactory to us. We do consent to your submission of the reports to rating agencies, loan participants or your auditors in its entirety (but not component parts) without the need to provide us with an Indemnification Agreement and/or Non-Reliance letter.

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

Respectfully submitted, CBRE, Inc. - VALUATION & ADVISORY SERVICES

Decker Dickson Ronald A. Neyhart, MAI Senior Appraiser Senior Managing Director Mississippi Temporary Permit Applied For Mississippi Certification No. GA-829 Phone: 404.812.5015 Phone: 404.812.5020 Fax: 404.812.5051 Fax: 404.812.5051 Email: [email protected] Email: [email protected]

JACKSON SQUARE PROMENADE | CERTIFICATION OF THE APPRAISAL

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CERTIFICATION OF THE APPRAISAL

We certify to the best of our knowledge and belief:

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

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

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

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

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

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

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

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

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

10. As of the date of this report, Ronald A. Neyhart, MAI have completed the continuing education program of the Appraisal Institute.

11. As of the date of this report, Decker Dickson has completed the Standards and Ethics Education Requirement of the Appraisal Institute for Associate Members.

12. Decker Dickson has and Ronald A. Neyhart, MAI has not made a personal inspection of the property that is the subject of this report.

13. No one provided significant real property appraisal assistance to the persons signing this report. 14. Valuation & Advisory Services operates as an independent economic entity within CBRE, Inc.

Although employees of other CBRE, Inc. divisions may be contacted as a part of our routine market research investigations, absolute client confidentiality and privacy were maintained at all times with regard to this assignment without conflict of interest.

15. Decker Dickson and Ronald A. Neyhart, MAI have not provided any real estate related services on this property in the three years prior to accepting this assignment.

Decker Dickson Ronald A. Neyhart, MAI Mississippi Temporary Permit Applied For Mississippi Certification No. GA-829

JACKSON SQUARE PROMENADE | SUBJECT PHOTOGRAPHS

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SUBJECT PHOTOGRAPHS

AERIAL VIEW

Subject

Subject


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TYPICAL VIEW OF THE SUBJECT

TYPICAL VIEW OF THE SUBJECT


iv

VIEW OF THE PARKING AREA

VIEW OF SUBJECT STORE FRONTS


v

VIEW OF A TYPICAL RETAIL STORE INTERIOR

VIEW OF A TYPICAL RETAIL STORE INTERIOR


vi

VIEW OF THE VACANT SPACE

VIEW OF THE SUBJECT’S SIGNAGE


vii

VIEW OF THE SUBJECT’S VISIBILITY FROM INTERSTATE 55

VIEW OF THE SUBJECT’S WALKWAYS

JACKSON SQUARE PROMENADE | SUMMARY OF SALIENT FACTS

viii

SUMMARY OF SALIENT FACTS

Property Name

Location

Assessor’s Parcel Number

Highest and Best Use

As If Vacant

As Improved

Property Rights Appraised

Land Area 31.53 AC 1,373,447 SF

Improvements

Property Type Retail

Number of Buildings

Number of Stories

Gross Leasable Area

Year Built 1968 Renovated: 2008

Condition

Estimated Exposure Time

Financial Indicators

Current Occupancy (Stabilized) 42.4%

Stabilized Credit Loss 1.0%

Overall Capitalization Rate 12.00%

Pro Forma Operating Data Total Per SF

Effective Gross Income $1,257,724 $3.89

Operating Expenses $295,992 $0.92

Expense Ratio 23.53%

Net Operating Income $961,731 $2.97

207-2-2

1

3

Jackson Square Promenade

Leased Fee Interest

Retail

Retail

2460 Terry Road, Jackson, Hinds County, Mississippi 39204

(Neighborhood/Community Center)

9 Months

Average

323,467 SF

VALUATION Total Per SF

Sales Comparison Approach $3,900,000 $12.06

Income Capitalization Approach $4,100,000 $12.68

CONCLUDED MARKET VALUE

Appraisal Premise Interest Appraised Value

As Is Leased Fee Interest $4,100,000

Compiled by CBRE

Date of Value

November 4, 2011

JACKSON SQUARE PROMENADE | SUMMARY OF SALIENT FACTS

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STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT)

Strengths and weaknesses are internal to the subject; opportunities & threats are external to the subject

Strengths

The subject has undergone renovations of approximately $975,000 including a new roof recently The subject is located along a major thoroughfare within the neighborhood and enjoys visibility on

Interstate 55 with traffic counts of 79,000 cars per day

Weaknesses

The subject is located in a low-income area with slightly declining demographics based upon historical trends

Opportunities

None noted

Threats

The weakened overall economy has contributed to depressed levels of consumer spending

EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS

None noted.

JACKSON SQUARE PROMENADE | TABLE OF CONTENTS

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TABLE OF CONTENTS

CERTIFICATION OF THE APPRAISAL ............................................................................................. i

SUBJECT PHOTOGRAPHS .......................................................................................................... ii

SUMMARY OF SALIENT FACTS ................................................................................................. viii

TABLE OF CONTENTS ................................................................................................................ x

INTRODUCTION ...................................................................................................................... 1

AREA ANALYSIS ......................................................................................................................... 6

NEIGHBORHOOD ANALYSIS .................................................................................................... 9

MARKET ANALYSIS .................................................................................................................. 12

SITE ANALYSIS ........................................................................................................................ 22

IMPROVEMENTS ANALYSIS ...................................................................................................... 26

ZONING ................................................................................................................................ 30

TAX AND ASSESSMENT DATA .................................................................................................. 31

HIGHEST AND BEST USE ......................................................................................................... 32

APPRAISAL METHODOLOGY ................................................................................................... 34

SALES COMPARISON APPROACH ............................................................................................ 35

INCOME CAPITALIZATION APPROACH .................................................................................... 39

RECONCILIATION OF VALUE .................................................................................................. 54

ASSUMPTIONS AND LIMITING CONDITIONS .......................................................................... 55

ADDENDA A Glossary of Terms B Improved Sale Data Sheets C Rent Comparable Data Sheets D Qualifications

JACKSON SQUARE PROMENADE | INTRODUCTION

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INTRODUCTION

PROPERTY IDENTIFICATION

The subject is a 323,467-square foot retail property (neighborhood/community center) located at

2460 Terry Road in Jackson. The improvements were constructed in 1968, renovated in 2008 and

are situated on a 31.530-acre site. Currently, the property is 42.4% occupied and is considered to be

in average overall condition. The subject tenants are considered local in nature. The subject is more

fully described, legally and physically, within the enclosed report.

OWNERSHIP AND PROPERTY HISTORY

Title to the property is currently vested in the name of BRC Jackson Square LLC. To the best of our

knowledge, there has been no ownership transfer of the property during the previous three years.

PREMISE OF THE APPRAISAL

The following table illustrates the various dates associated with the valuation of the subject, the

valuation premise(s) and the rights appraised for each premise/date:

PREMISE OF THE APPRAISAL

Item Date Interest Appraised

Date of Report: November 21, 2011

Date of Inspection: November 4, 2011

Dates of ValueAs Is: November 4, 2011 Leased Fee Interest

Compiled by CBRE

PURPOSE OF THE APPRAISAL

The purpose of this appraisal is to estimate the market value of the subject property. The current

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

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

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

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

assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of

a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

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

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

comparable thereto; and


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5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. 1

TERMS AND DEFINITIONS

The Glossary of Terms in the Addenda provides definitions for additional terms that are, and may be

used in this appraisal.

INTENDED USE AND USER OF REPORT

This appraisal is to be used by the client for internal decision making purposes.

SCOPE OF WORK

The scope of the assignment relates to the extent and manner in which research is conducted, data is

gathered and analysis is applied, all based upon the following problem-identifying factors stated

elsewhere in this report:

Client Intended use Intended user Type of opinion Effective date of opinion Relevant characteristics about the subject Assignment conditions

This appraisal of the subject has been presented in the form of a Self-Contained Appraisal Report,

which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(a) of

USPAP. That is, this report incorporates, to the fullest extent possible, practical explanation of the

data, reasoning and analysis that were used to develop the opinion of value. This report also includes

thorough descriptions of the subject and the market for the property type. CBRE, Inc. completed the

following steps for this assignment:

1 Office of Comptroller of the Currency (OCC), 12 CFR Part 34, Subpart C – Appraisals, 34.42 (g); Office of Thrift

Supervision (OTS), 12 CFR 564.2 (g); Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002), 177-178. This is also compatible with the RTC, FDIC, FRS and NCUA definitions of market value as well as the example referenced in the Uniform Standards of Professional Appraisal Practice (USPAP).


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Data Resources Utilized in the Analysis

RESOURCE VERIFICATION

Site Data Source/Verification:Size County Assessor

Improved Data Source/Verification:Net Size/Units Rent RollNo. Bldgs. Site InspectionParking Spaces Site InspectionYOC County Assessor

Economic Data Source/Verification:Income Data: Client ProvidedExpense Data: CBRE

Compiled by CBRE

Extent to Which the Property is Identified

CBRE, Inc. collected the relevant information about the subject from the owner (or representatives),

public records and through an inspection of the subject property. The property was legally identified

through the following sources:

postal address assessor’s records

Economic characteristics of the subject were identified via:

analysis of leases and/or lease briefs between the lessor and lessee recent rent roll

Extent to Which the Property is Inspected

CBRE, Inc. inspected both the interior and exterior of the subject, as well as its surrounding environs

on the effective date of appraisal.

Type and Extent of the Data Researched

CBRE, Inc. reviewed the micro and/or macro market environments with respect to physical and

economic factors relevant to the valuation process. This process included interviews with regional

and/or local market participants, available published data, and other various resources. CBRE, Inc.

also conducted regional and/or local research with respect to the following:

applicable tax data zoning requirements flood zone status demographics income and expense data comparable data


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Type and Extent of Analysis Applied

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

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

steps required to complete each approach are discussed in the methodology section. CBRE, Inc. then

correlated and reconciled the results into a reasonable and defensible value conclusion, as defined

herein. A reasonable exposure time associated with the value estimate presented has also been

considered.

EXPOSURE/MARKETING TIME

Current appraisal guidelines require an estimate of a reasonable time period in which the subject

could be brought to market and sold. This reasonable time frame can either be examined historically

or prospectively. In a historical analysis, this is referred to as exposure time. Exposure time always

precedes the date of value, with the underlying premise being the time a property would have been on

the market prior to the date of value, such that it would sell at its appraised value as of the date of

value. On a prospective basis, the term marketing time is most often used. The exposure/marketing

time is a function of price, time, and use. It is not an isolated estimate of time alone. In consideration

of these factors, we have analyzed the following:

exposure periods for comparable sales used in this appraisal; exposure/marketing time information from the CBRE, Inc. National Investor Survey and the

Korpacz Real Estate Investor Survey; and the opinions of market participants.

The following table presents the information derived from these sources.

EXPOSURE/MARKETING TIME INFORMATION

Exposure/Mktg. (Months)Investment Type Range Average

CBRE Community Centers

Class C 2.0 - 18.0 8.8

CBRE Neighborhood Centers

Class C 2.0 - 18.0 7.6

PwC Strip Shopping Center

National Data 2.0 - 18.0 8.1

CBRE Exposure Time Estimate

Source: CBRE National Investor Survey & PwC Real Estate Investor Survey

9 Months

CBRE, Inc. has concluded an exposure/marketing time of 9 months to be reasonable for the subject.

This exposure/marketing time reflects current economic conditions, current real estate investment

market conditions, the terms and availability of financing for real estate acquisitions, and property and


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market-specific factors. It assumes that the subject is (or has been) actively and professionally

marketed. The marketing/exposure time would apply to all valuation premises included in this report.

JACKSON SQUARE PROMENADE | AREA ANALYSIS

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AREA ANALYSIS

Moody’s Economy.com provides the following Jackson, MS metro area economic summary as of Jul-

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

JACKSON, MS - ECONOMIC ANALYSISIndicators 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Gross Metro Product (C$B) 19.0 19.2 19.7 20.5 20.6 20.4 20.4 20.7 21.3 22.0 22.7 23.2

% Change 1.1 1.1 2.6 3.9 0.7 -1.3 0.0 1.5 3.3 3.2 2.9 2.5

Total Employment (000) 255.8 256.6 260.8 261.6 260.4 252.4 250.4 252.6 255.9 261.4 270.0 276.0

% Change 2.3 0.3 1.6 0.3 -0.4 -3.1 -0.8 0.9 1.3 2.2 3.3 2.2

Unemployment Rate 5.2 6.0 5.3 5.1 5.5 7.6 8.4 8.0 8.0 7.3 5.7 5.0

Personal Income Growth 7.2 6.3 8.3 3.2 5.4 -0.8 1.9 1.9 3.1 5.9 6.2 5.1

Population (000) 514.2 519.2 528.0 530.5 533.5 536.5 540.4 546.0 552.0 558.3 564.5 570.7

Single-Family Permits 3,406.0 3,493.0 3,536.0 2,890.0 2,081.0 1,185.0 1,303.0 1,237.8 1,666.2 2,172.1 2,977.6 3,114.0

Multifamily Permits 1,100.0 42.0 198.0 167.0 50.0 6.0 88.0 55.3 93.3 90.9 112.9 104.8

Existing-Home Price ($Ths) 117.5 133.5 146.8 138.3 128.6 133.8 132.2 135.0 132.5 135.1 145.6 152.9

Mortgage Originations ($Mil) 2,395.7 2,574.4 2,729.5 2,657.6 1,830.8 2,144.8 1,685.9 1,570.8 1,812.0 1,983.3 2,060.9 2,134.7

Net Migration (000) 3.4 2.0 5.3 -1.6 -1.0 -0.7 0.4 2.2 2.6 3.1 3.0 3.0

Personal Bankruptcies 4,348.0 4,920.0 2,234.0 2,922.0 2,751.0 3,100.0 3,136.0 3,025.0 1,516.1 1,075.9 1,030.6 591.9

Source: Moody's Economy.com

RECENT PERFORMANCE

Jackson's economy is recovering, boosted by growth in commercial construction and retail trade. The

unemployment rate has declined since the beginning of the year. At 8.1%, the jobless rate is below

both the state and national averages. Manufacturing and finance have finally resumed hiring since the


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beginning of the year and are supporting an expanding labor force. As the state capital, it is

encouraging that public sector employment is holding up. The housing market, however, is not

improving as higher than average foreclosure starts and inventories are keeping a lid on prices.

AUTO MANUFACTURING

As the Japanese tsunami-related supply chain bottlenecks ease, JAM's auto manufacturing will resume

expanding. Nissan North America, among the metro area's largest employers, reported a sales

increase of 11.4% in June compared with the previous year. Nissan's plant in Canton produces the

Altima, Titan, and the NV commercial vehicles. Sales of the fuel-efficient Altima rose 22.7% in June

before, and sales for the first half of the year were 17.6% higher than during the same period last

year. The NV commercial vehicles, a new addition to the plant, also enjoyed a sizable improvement in

sales. Sales of the Titan pickup truck, however, have risen only modestly over the past year, hurt by

high energy prices and low residential construction nationwide.

Nissan's plan to expand production at its Canton plant brightens the auto industry's long-term outlook

in JAM. Soon after the tsunami in Japan, Nissan announced that it will shift production of the Xterra

SUV and the Frontier pickup to the Canton plant by the end of 2012. This will create jobs, both

directly and indirectly, since auto manufacturing enjoys a high employment multiplier in the state. The

plant's expansion will also support an increase in consumer spending given the high wages.

CONSTRUCTION

Unlike the nation, commercial construction payrolls will expand in JAM in the coming months. The

Mississippi Museum of Art recently announced that it will receive a grant from the National

Endowment of the Arts to support the construction of an Art Garden as part of its Cultural District

Project. A civil rights museum and a Mississippi museum of history have also been approved by the

state and are on target for a 2017 completion. In addition to these planned projects, commercial

construction will also benefit from growth in office-using employment in JAM. Office-using

employment accounts for one-fifth of the total employment in JAM and is supported by the metro

area's highly educated workforce. About one-third of adults in the metro area have a college degree,

compared with one-fifth in Mississippi. The new satellite campuses of Tulane University and Strayer

University will further strengthen this comparative advantage.

CONSUMER

The economy will benefit from strong consumer fundamentals. Although delinquency rates for most

loans, especially first mortgages, rose in JAM during the recession, they have since been declining and

are now below the state average. The metro area also enjoys a lower than average loan-to-value

ratio and higher than average home equity. Equity per household in JAM is 10% higher than the state

average and almost 20% higher than the national average.


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CONCLUSION

Jackson will recover over the next few years as production expansion at Nissan's Canton plant

generates high-paying jobs through a strong multiplier effect and declining household debt boosts

consumer spending. Construction, education, health and retail trade will also support the recovery.

Long term, the area will benefit from its skilled workforce and its concentration of universities and

medical centers and will perform in line with the state and nation.

JACKSON SQUARE PROMENADE | NEIGHBORHOOD ANALYSIS

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NEIGHBORHOOD ANALYSIS

LOCATION

The subject property is located along the west side of Terry Road approximately three miles south of

downtown Jackson and within the southern city limits of Jackson. A neighborhood map is shown

above.

BOUNDARIES

The neighborhood boundaries are not exact and generally comprise a three- to five-mile radius

surrounding the subject property.

LAND USE

The subject neighborhood can be considered mature and is approximately 90% built out, with primary

development in the immediate area consisting of restaurants, gas station/convenience stores, retail

stores and service activities oriented to the proximity of Interstate 55 and Terry Road. Commercial

development in the neighborhood is concentrated along Terry Road, which is the main commercial

thoroughfare in the neighborhood. Much of the development in the neighborhood is 20 years old or

more. Many of the buildings’ original tenants have vacated the area and the buildings and have

been, or are being, re-tenanted with discount stores and local tenants.


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Residential development is most heavily concentrated in the northern and western portions of the

neighborhood, with limited new residential development occurring. According to information

obtained from Claritas, approximately 53% of the housing units are renter occupied within a three

mile radius. In addition, approximately 8% of the housing units within a three-mile radius were

constructed since 1990, while 60% were built prior to 1970. The majority of the single-family

residential development within a three-mile radius of the subject may be described as single family

homes in the $40,000 to $100,000 price range.

ACCESS

The accessibility to the neighborhood in general and the subject property in particular, is considered

good. Interstate 55 and Terry Road both extend through the neighborhood in a north/south direction,

while Interstate 20 extends through the neighborhood in an east/west direction. In addition, Interstate

220 extends from Interstate 20 in the northwest portion of the neighborhood through the northwest

portion of Jackson, intersecting with Interstate 55 north of Jackson. This results in easy access to all

areas of metropolitan Jackson.

The primary local traffic arteries include Terry Road, Daniel Lake Boulevard, Cooper Road, and

McClure Road. Daniel Lake Boulevard, Cooper Road and McClure Road extend in an east/west

direction, while Terry Road runs in a north/south direction as can be seen in the map above.

DEMOGRAPHICS

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

following table:


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SELECTED NEIGHBORHOOD DEMOGRAPHICS

2460 Terry RoadJackson, MS

Population

2016 Population 6,362 48,236 97,685

2011 Population 6,642 50,473 101,040

2000 Population 7,233 55,878 108,802

1990 Population 6,690 60,729 117,830

Annual Growth 2011 - 2016 -0.86% -0.90% -0.67%

Annual Growth 2000 - 2011 -0.77% -0.92% -0.67%

Annual Growth 1990 - 2000 0.78% -0.83% -0.79%

Households

2016 Households 2,368 16,849 35,195

2011 Households 2,511 17,868 36,671

2000 Households 2,767 19,899 39,284

1990 Households 2,800 22,196 42,732

Annual Growth 2011 - 2016 -1.17% -1.17% -0.82%

Annual Growth 2000 - 2011 -0.88% -0.97% -0.62%

Annual Growth 1990 - 2000 -0.12% -1.09% -0.84%

Income

2011 Median HH Inc $23,601 $25,933 $28,221

2011 Estimated Average Household Income $31,345 $35,041 $38,160

2011 Estimated Per Capita Income $11,712 $12,766 $14,238

Age 25+ College Graduates - 2010 475 4,728 11,151

Age 25+ Percent College Graduates - 2011 13.4% 16.9% 19.3%

Source: Claritas

1 Mile Radius

3 Mile Radius

5 Mile Radius

CONCLUSION

As shown above, the population within the subject neighborhood has shown a slight decline over the

past 10 years. The neighborhood currently has a lower-middle class demographic profile based on

income and education statistics. The subject property is located in an area that has good access, with

the overall development characteristics of the neighborhood considered conducive to commercial

development. The subject is conveniently located to area employment centers in addition to a variety

of support services and retail options. Furthermore, we anticipate that the overall demographic nature

and development character of the neighborhood will remain the same in the near-term future,

suggesting continued moderate acceptance of the subject property and similar free standing retail

facilities.

JACKSON SQUARE PROMENADE | MARKET ANALYSIS

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MARKET ANALYSIS

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

and indications of financial feasibility. Primary data sources utilized for this analysis include CoStar

Market Report First Quarter 2011.

The subject is in the Jackson market and is considered a Class C unanchored retail center with a

primary trade area of approximately three to five miles. According to the Urban Land Institute (ULI) (in

Dollars & Cents of Shopping Centers), the following retail property definitions may be applicable

towards the subject:

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

DEMOGRAPHIC ANALYSIS

Demand for additional retail property is a direct function of population change and household

income. Retail properties are products of a clearly definable demand relating directly to population

shifts and income patterns.

Housing, Population and Household Formation

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

with primary focus on the 3-mile radius.

POPULATION AND HOUSEHOLD PROJECTIONS

Population

2016 Population 6,362 48,236 97,685

2011 Population 6,642 50,473 101,040

2000 Population 7,233 55,878 108,802

1990 Population 6,690 60,729 117,830

Annual Growth 2011 - 2016 -0.86% -0.90% -0.67%

Annual Growth 2000 - 2011 -0.77% -0.92% -0.67%

Annual Growth 1990 - 2000 0.78% -0.83% -0.79%

Households

2016 Households 2,368 16,849 35,195

2011 Households 2,511 17,868 36,671

2000 Households 2,767 19,899 39,284

1990 Households 2,800 22,196 42,732

Annual Growth 2011 - 2016 -1.17% -1.17% -0.82%

Annual Growth 2000 - 2011 -0.88% -0.97% -0.62%

Annual Growth 1990 - 2000 -0.12% -1.09% -0.84%Source: Claritas

1 Mile Radius

3 Mile Radius

5 Mile Radius


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As shown, the subject’s neighborhood is experiencing moderate decreases in both population and

households.

Income Distributions

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

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

household income identifies (in gross terms) the market from which the subject submarket draws. The

following table illustrates estimated household income distribution for the subject neighborhood.

HOUSEHOLD INCOME DISTRIBUTION

Households by Income Distribution - 2011

Less than $15K 32.62% 29.73% 27.62%$15K - $25K 20.03% 18.73% 17.41%$25K - $35K 17.12% 14.67% 14.46%$35K - $50K 13.38% 15.93% 16.14%$50K - $75K 10.55% 13.04% 14.34%$75K - $100K 3.35% 4.37% 5.32%$100K - $150K 1.71% 2.22% 3.15%$150K - $250K 0.64% 0.34% 0.55%$250K - $500K 0.52% 0.91% 0.93%$500K or more 0.04% 0.04% 0.10%

Source: Claritas

1 Mile Radius

3 Mile Radius

5 Mile Radius

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

neighborhood.

HOUSEHOLD INCOME LEVELS

Income

2011 Median HH Inc $23,601 $25,933 $28,221

2011 Estimated Average Household Income $31,345 $35,041 $38,160

2011 Estimated Per Capita Income $11,712 $12,766 $14,238

Source: Claritas

1 Mile Radius

3 Mile Radius

5 Mile Radius

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

economic cohort groups, which include the target groups to which the subject is oriented.

Retail Sales Volumes

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

subject.


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

1 Mile Radius 3 Mile Radius 5 Mile Radius

Product Sample 2011 2016 %/Yr 2011 2016 %/Yr 2011 2016 %/Yr

All Retail Stores 48,180 47,044 -0.5% 375,803 371,355 -0.2% 784,191 793,928 0.2%

Grocery Stores 9,787 9,364 -0.9% 72,802 70,182 -0.7% 150,356 147,921 -0.3%

Eating Places 3,173 2,920 -1.6% 24,714 23,263 -1.2% 51,872 50,213 -0.6%

Drinking Places 70 65 -1.4% 628 597 -1.0% 1,316 1,287 -0.5%

Health and Personal Care Stores 3,710 3,643 -0.4% 29,214 28,935 -0.2% 62,361 63,317 0.3%

Building Material & Garden Equipment & Supplies 1,071 1,030 -0.8% 8,475 8,282 -0.5% 18,693 18,903 0.2%

Hardware Stores 132 128 -0.6% 1,061 1,047 -0.3% 2,321 2,366 0.4%

Lawn & Garden Equipment & Supplies Dealers 179 173 -0.7% 1,413 1,388 -0.4% 3,075 3,117 0.3%

Furniture Stores 695 678 -0.5% 5,415 5,346 -0.3% 11,705 11,942 0.4%

Other Home Furnishing Stores 445 428 -0.8% 3,546 3,477 -0.4% 7,832 7,962 0.3%

Household Appliance Stores 180 189 1.0% 1,407 1,497 1.2% 3,052 3,339 1.8%

Radio/TV/Other Electronics Stores 623 784 4.7% 5,227 6,695 5.1% 11,020 14,499 5.6%

Department Stores (Excluding Leased) 4,278 4,351 0.3% 33,053 33,867 0.5% 69,194 72,573 1.0%

Clothing and Clothing Accessory Stores 3,555 3,631 0.4% 27,425 27,993 0.4% 56,629 58,941 0.8%

Shoe Stores 630 660 0.9% 4,649 4,861 0.9% 9,398 9,978 1.2%

General Merchandise Stores 8,638 8,656 0.0% 66,116 66,881 0.2% 138,079 142,962 0.7%

Warehouse Clubs and Superstores 4,405 4,354 -0.2% 33,450 33,441 0.0% 69,721 71,343 0.5%

Full Service Restaurants 846 754 -2.3% 6,767 6,266 -1.5% 14,565 13,980 -0.8%

Fast Food Restaurants 1,211 1,142 -1.2% 9,245 8,818 -0.9% 18,894 18,402 -0.5%

Jewelry Stores 426 400 -1.2% 3,657 3,511 -0.8% 8,076 8,072 0.0%

Book Stores 346 337 -0.5% 3,357 3,384 0.2% 6,702 6,872 0.5%

Gift, Novelty, and Souvenir Shops 141 136 -0.7% 1,093 1,082 -0.2% 2,336 2,384 0.4%

Florists 376 354 -1.2% 2,971 2,851 -0.8% 6,615 6,587 -0.1%

Hobby, Toy, and Game Shops 322 320 -0.1% 2,460 2,482 0.2% 5,143 5,330 0.7%

Sporting Goods Stores 439 499 2.6% 3,478 4,026 3.0% 7,274 8,679 3.6%

Camera/Photographic Supply Stores 38 46 4.1% 350 426 4.0% 758 955 4.7%

Luggage and Leather Goods Stores 28 26 -1.2% 242 232 -0.8% 535 535 0.0%

Sew/Needlework/Piece Goods Stores 73 72 -0.4% 573 573 0.0% 1,240 1,280 0.6%

Convenience Stores 522 500 -0.9% 3,805 3,689 -0.6% 7,837 7,767 -0.2%

Home Centers 490 474 -0.7% 3,895 3,832 -0.3% 8,584 8,738 0.4%

Nursery and Garden Centers 160 154 -0.8% 1,261 1,227 -0.5% 2,745 2,757 0.1%

Computer and Software Stores 240 303 4.8% 2,128 2,752 5.3% 4,465 5,939 5.9%

Clothing Accessory Stores 49 50 0.4% 393 398 0.2% 821 848 0.6%

Auto Dealers 7,212 6,829 -1.1% 60,363 58,076 -0.8% 125,043 123,435 -0.3%

Automotive Part, Accessories & Tire Stores 507 471 -1.5% 4,083 3,834 -1.2% 8,413 8,104 -0.7%

Gasoline Stations with Convenience Stores 4,642 4,225 -1.9% 34,408 31,555 -1.7% 70,729 66,304 -1.3%

Gasoline Stations without Convenience Stores 1,282 1,133 -2.4% 9,689 8,632 -2.3% 19,960 18,193 -1.8%

Electronic Shopping and Mail Order 1,947 2,054 1.1% 16,024 17,252 1.5% 33,764 37,284 2.0%

Total Accommodation and Food Services 4,057 3,728 -1.7% 32,188 30,293 -1.2% 68,280 66,243 -0.6%

Source: Claritas

The annual rate of change for All Retail Stores is indicated as -0.5%, -0.2% and 0.2% on 1-, 3-, and

5-mile radii, respectively.

MARKET OVERVIEW

Inventory & Construction

The Jackson retail market experienced a slight decline in market conditions in the third quarter 2011.

The vacancy rate went from 6.0% in the previous quarter to 6.2% in the current quarter. Net

absorption was negative (59,223) square feet, and vacant sublease space increased by 9,300 square

feet. Quoted rental rates decreased from second quarter 2011 levels, ending at $9.27 per square

foot per year. There were no properties under construction at the end of the quarter.


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Net Absorption

Retail net absorption was moderately negative in Jackson third quarter 2011, with negative (59,223)

square feet absorbed in the quarter. In second quarter 2011, net absorption was negative (63,534)

square feet, while in first quarter 2011, absorption came in at negative (87,267) square feet. In fourth

quarter 2010, negative (6,340) square feet was absorbed in the market.

Vacancy

Jackson’s retail vacancy rate increased in the third quarter 2011, ending the quarter at 6.2%. Over

the past four quarters, the market has seen an overall increase in the vacancy rate, with the rate going

from 5.6% in the fourth quarter 2010, to 5.8% at the end of the first quarter 2011, 6.0% at the end of

the second quarter 2011, to 6.2% in the current quarter. The amount of vacant sublease space in the

Jackson market has trended up over the past four quarters. At the end of the fourth quarter 2010,

there were 11,777 square feet of vacant sublease space. Currently, there are 23,577 square feet

vacant in the market.

Largest Lease Signings

The largest lease signings occurring in 2011 included: the 17,500-square-foot-lease signed by Freds

Discount Store at 6240 Old Canton Rd; the 7,500-square-foot-deal signed by Aaron’s Rent at

Copiah Trade Center; and the 3,600-square-foot-lease signed by Share A Life Foundation at Metro

Station Bldg 1.

Rental Rates

Average quoted asking rental rates in the Jackson retail market are down over previous quarter levels,

and down from their levels four quarters ago. Quoted rents ended the third quarter 2011 at $9.27

per square foot per year. That compares to $9.47 per square foot in the second quarter 2011, and

$10.00 per square foot at the end of the fourth quarter 2010. This represents a 2.1% decrease in

rental rates in the current quarter, and a 7.87% decrease from four quarters ago.

Inventory & Construction

During the third quarter 2011, no new space was completed in the Jackson retail market. Over the

past four quarters, a total of 22,000 square feet of retail space has been built in Jackson. In addition

to the current quarter, nothing was completed in second quarter 2011, nothing completed in first

quarter 2011, and 22,000 square feet in one building completed in fourth quarter 2010. There was

no retail space under construction at the end of the third quarter 2011. Total retail inventory in the

Jackson market area amounted to 34,734,105 square feet in 2,610 buildings and 255 centers as of

the end of the third quarter 2011.


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During the first quarter 2010, no new space was completed in the Jackson retail market. Over the

past four quarters, a total of 139,883 square feet of retail space has been built in Jackson. In

addition to the current quarter, one building with 2,443 square feet were completed in fourth quarter

2009, one building totaling 135,000 square feet completed in third quarter 2009, and 2,440 square

feet in one building completed in second quarter 2009. There were 6,200 square feet of retail space

under construction at the end of the first quarter 2010. Total retail inventory in the Jackson market

area amounted to 34,784,981 square feet in 2,576 buildings and 255 centers as of the end of the

first quarter 2010.

Some of the notable 2009 deliveries include: Sam’s Club, a 135,000-square-foot facility that

delivered in third quarter 2009 and is now 100% occupied, and NorthPark Commons, a 6,400-

square-foot building that delivered in first quarter 2009 and is now 100% occupied.

Total retail inventory in the Jackson market area amounted to 34,784,981 square feet in 2,576

buildings and 244 centers as of the end of the first quarter 2010.

Shopping Center

The Shopping Center market in Jackson currently consists of 246 projects with 8,980,827 square feet

of retail space in 313 buildings. In this report the Shopping Center market is comprised of all


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Community Center, Neighborhood Center, and Strip Centers. After absorbing (43,159) square feet

and delivering no new space in the current quarter, the Shopping Center sector saw the vacancy rate

go from 10.6% at the end of the second quarter 2011 to 11.1% this quarter.

Over the past four quarters, the Shopping Center vacancy rate has gone from 9.8% at the end of the

fourth quarter 2010, to 10.9% at the end of the first quarter 2011, to 10.6% at the end of the second

quarter 2011, and finally to 11.1% at the end of the current quarter. Rental rates ended the third

quarter 2011 at $8.75 per square foot, down from the $9.28 they were at the end of second quarter

2011. Rental rates have trended down over the past year, going from $10.41 per square foot a year

ago to their current levels.

Net absorption in the Shopping Center sector has totaled (110,086) square feet over the past four

quarters. In addition to the negative (43,159) square feet absorbed this quarter, positive 25,631

square feet was absorbed in the second quarter 2011, negative (102,202) square feet was absorbed

in the first quarter 2011, and positive 9,644 square feet was absorbed in the fourth quarter 2010.

Submarket Trends

The subject’s South Jackson submarket trends are detailed as follows:


18


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BARRIERS TO ENTRY

The neighborhood was generally characterized as mature with opportunities for new development

limited to redevelopment of existing uses. Prime corners and preferred locations are scarce along the

established retail corridors, unless they are incorporated into a redevelopment. City government

appears to be amenable to retail development with no moratoriums in place. Currently, the most

significant barrier to entry identified is weak demand for expansion among retailers to absorb vacant

inventory or support additional development. Additional moderate barriers are created by the lack of

readily available development sites.

COMPETITIVE PROPERTIES

Comparable properties have been surveyed in order to identify the occupancy trends within the

immediate submarket. The comparable data is summarized in the following table:

SUMMARY OF COMPARABLE RETAIL RENTALS

Comp. No. Name Location Occupancy

1 Apple Ridge Shopping Center 2515 Mcfadden Road,Jackson, MS

75%

2 Ellis Avenue Plaza 1335 Ellis Avenue,Jackson, MS

70%

3 Metro Crossing 4820 Highway 18,Jackson, MS

45%

4 McDowell Square Shopping Center

SS of McDowell at Sucrest Drive,Jackson, MS

100%

5 Southgate Shopping Center 2885 Terry Road,Jackson, MS

100%

Subject Jackson Square Promenade 2460 Terry Road,Jackson, Mississippi

42%

Compiled by CBRE

The majority of comparable properties surveyed reported occupancy rates of 75% or better. There are

also outliers with very low occupancies. As noted the subject is only 42% occupied.

SUBJECT TRENDS AND PROJECTIONS

Occupancy

Occupancy rate is the relationship between the actual income received from a property and the

income that would be received if the entire space were occupied. Consequently, the occupancy rate

is a product of both (1) the relationship between the amount of occupied space in a building or


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market (physical) and (2) the relationship between the contract rent for the occupied building or

market space and the total rent estimated for all space in the building or market (economic).

Conclusion

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

illustrated in the following table. This estimate considers the physical factors of the market.

OCCUPANCY CONCLUSIONS

Jackson Area 94.6%

Submarket 90.7%

Rent Comparables 87.4%

Subject's Current Occupancy 42.4%

Compiled by CBRE

We note that the subject has a low occupancy as compared to the Jackson market, submarket and

rent comparables. The center has leased up a large amount of space recently to reach its current

occupancy position.

The subject would require to lease a large vacant grocery space in the north building, which would

require significant tenant improvements to be move-in ready. At this point we have not given credit to

possibility of leasing this space until market conditions improve to a point where the renovations

would be financially feasible.

Tenant Analysis

The subject is considered a Class C property and the tenants are local in nature.

CONCLUSION

With respect to the subject in particular, we believe the subject is reasonably well located for a retail

project and benefits from its access/exposure via two main roadways, albeit in an older part of town.

However, given large blocks of space that would require significant renovations before occupancy, we

expect the subject to continue to experience below average market acceptance in the near term.

JACKSON SQUARE PROMENADE | SITE ANALYSIS

21

PLAT MAP


22

SITE ANALYSIS

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

SITE SUMMARY

Physical DescriptionGross Site Area 31.53 Acres 1,373,447 Sq. Ft.

Net Site Area 31.53 Acres 1,373,447 Sq. Ft.

Primary Road Frontage Terry Road

Secondary Road Frontage Wagwood Street

Excess Land Area None

Surplus Land Area None

Primary Traffic Counts (24 hrs.) Terry Road 15,000

Secondary Traffic Counts (24 hrs.) Interstate 55 South 79,000

Zoning District

Flood Map Panel No. & Date 28049C0314H 18-Nov-09

Flood Zone Zone AE and Zone X

Source: Various sources compiled by CBRE

C-3, General Commercial

LOCATION

The subject is located on the east side of Terry Road, less than one-half mile north of McDowell Road.

The street address is 2460 Terry Road.

LAND AREA

The site is considered adequate in terms of size and utility. There is no unusable, excess or surplus

land area. Please refer to the Resource Verification table within the Scope of Work for the source of

the land area size.

SHAPE AND FRONTAGE

The site is generally rectangular and has adequate frontage along a primary thoroughfare within the

neighborhood.

INGRESS/EGRESS

Ingress and egress is available to the site via Terry Road and Wagwood Street.

TRAFFIC COUNTS

The subject is located along a major thoroughfare within the neighborhood and enjoys an above

average traffic count. We note that the property also benefits from visibility from Interstate 55 which

has a traffic count of 79,000 vehicles per day.


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TOPOGRAPHY AND DRAINAGE

The site is generally level and at street grade. The topography of the site is not seen as an impediment

to the development of the property. During our inspection of the site, we observed no drainage

problems and assume that none exist.

SOILS

A soils analysis for the site has not been provided for the preparation of this appraisal. In the absence

of a soils report, it is a specific assumption that the site has adequate soils to support the highest and

best use.

EASEMENTS AND ENCROACHMENTS

There are no known easements or encroachments impacting the site that are considered to affect the

marketability or highest and best use. It is recommended that the client/reader obtain a current title

policy outlining all easements and encroachments on the property, if any, prior to making a business

decision.

COVENANTS, CONDITIONS AND RESTRICTIONS

There are no known covenants, conditions or restrictions impacting the site that are considered to

affect the marketability or highest and best use. It is recommended that the client/reader obtain a

copy of the current covenants, conditions and restrictions, if any, prior to making a business decision.

UTILITIES AND SERVICES

The site is within the jurisdiction of Hinds County or Jackson and is provided all municipal services,

including police, fire and refuse garbage collection

FLOOD ZONE

According to flood hazard maps published by the Federal Emergency Management Agency (FEMA),

the site is within Zone AE and Zone X, as indicated on Community Map Panel No. 28049C0314H.

FEMA defines the flood zone(s) as follows:

Zones AE and A1-A30 are the flood insurance rate zones used for the 1-percent-

annual-chance floodplains that are determined for the Flood Insurance Study (FIS) by

detailed methods of analysis. In most instances, Base Flood Elevations (BFEs) derived

from the detailed hydraulic analyses are shown at selected intervals in this zone.

Mandatory flood insurance purchase requirements apply. AE zones are areas of

inundation by the 1-percent-annual-chance flood, including areas with the 2-percent

wave runup, elevation less than 3.0 feet above the ground, and areas with wave

heights less than 3.0 feet. These areas are subdivided into elevation zones with Base


24

Flood Elevations (BFEs) assigned. The AE zone will generally extend inland to the limit

of the 1-percent-annual-chance Stillwater Flood Level (SWEL).

Zones C and X (unshaded) are flood insurance rate zones used for areas outside the

0.2-percent-annual-chance floodplain. No Base Flood Elevations (BFEs) or depths are

shown in this zone, and insurance purchase is not required.

ENVIRONMENTAL ISSUES

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

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

underground storage tanks may affect the value of the property. For this appraisal, CBRE, Inc. has

specifically assumed that the property is not affected by any hazardous materials that may be present

on or near the property.

ADJACENT PROPERTIES

The adjacent land uses are summarized as follows:


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North: Single-family residential South: Single-family residential East: Interstate 55 West: Commercial uses

CONCLUSION

The site is well located and afforded good access and visibility from roadway frontage. However, we

note a significant portion of the subject’s south parking lot to be in Flood Zone AE. The existing

vertical improvements however do not appear to be hindered by an adverse flood zone.

JACKSON SQUARE PROMENADE | IMPROVEMENTS ANALYSIS

26

IMPROVEMENTS ANALYSIS

The following chart shows a summary of the improvements.

IMPROVEMENTS SUMMARY

Retail

1968 Renovated: 2008

Source: Various sources compiled by CBRE

Site Coverage

Land-to-Building Ratio

Parking Improvements

4.25 : 1

Open

3

323,467 SF

1

Number of Buildings

Number of Stories

Gross Leasable Area

Year Built

Area Breakdown by Market Rent Categories

23.6%

Property Type

In-line

Anchors 245,640 SF

77,827 SF

(Neighborhood/Community Center)

BUILDING AREA

Please refer to the Resource Verification table in the Scope of Work for the source of the building area

size. The following is a description of the subject improvements and basic construction features

derived from CBRE, Inc.’s inspection.

YEAR BUILT

The subject was built in 1968 and was most recently renovated in 2008. Renovations completed

include a new roof and repaving of the parking lot. Renovations were ongoing at the date of this

appraisal.

FOUNDATION

The foundation is assumed to be of adequate load-bearing capacity to support the improvements.

CONSTRUCTION COMPONENTS

The construction components are assumed to be in working condition and adequate for the building.

FLOOR STRUCTURE

The floor structure is summarized as follows:

Ground Floor: Concrete slab on compacted fill

EXTERIOR WALLS

The exterior wall structure is brick.


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ROOF COVER

The building has a pitched metal standing-seam roof with 2” fiberglass insulation.

INTERIOR FINISHES

The typical interior finish of the retail shop space is summarized as follows:

Floor Coverings: Commercial grade short loop carpeting and vinyl tile over concrete.

Walls: Painted sheetrock.

Ceilings: Painted sheetrock and suspended acoustical tile. We note that the vacant spaces appear to be in need of significant ceiling replacement.

Lighting: Standard commercial fluorescent fixtures.

Summary: The interior areas are typical building standard retail showroom finish, and are commensurate with older product in the area.

HVAC

The HVAC system consists of roof mounted units is assumed to be in average working order and

adequate for the building.

ELECTRICAL

The electrical system is assumed to be in average working order and adequate for the building.

PLUMBING

The plumbing system is assumed to be in average working order and adequate for the building.

RESTROOMS

The restrooms are adequate and are assumed built to local code.

FIRE PROTECTION

The subject is not sprinklered; however, the improvements have adequate fire alarm systems, fire exits,

fire extinguishers, fire escapes and/or other fire protection measures to meet local fire marshal

requirements. CBRE, Inc. is not qualified to determine adequate levels of safety & fire protection,

whereby it is recommended that the client/reader review available permits, etc. prior to making a

business decision.


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SECURITY

The subject leases an office to the Hinds County Sheriff’s office with no rent charge.

PARKING AND DRIVES

The property features an adequate number of surface parking spaces, including reserved

handicapped spaces. All parking spaces and vehicle drives are concrete paved and considered to be

in average condition. Patron parking areas are along the front and sides of the building. However,

we note a significant portion of the subject’s south parking lot to be in Flood Zone AE.

ACCESS

Access to the site is available via Terry Road and Wagwood Street, an I-55 frontage road.

LANDSCAPING

Landscaping is considered to be in average condition and well maintained.

QUALITY AND STRUCTURAL CONDITION

The overall quality of the facility is considered to be average for the neighborhood and age.

However, CBRE, Inc. is not qualified to determine structural integrity and it is recommended that the

client/reader retain the services of a qualified, independent engineer or contractor to determine the

structural integrity of the improvements prior to making a business decision.

FUNCTIONAL UTILITY

The overall layout of the property is considered functional in utility and provides adequate accessibility

and visibility to the individual retail spaces.

ADA COMPLIANCE

All common areas of the property appear to have handicap accessibility. The client/reader’s attention

is directed to the specific limiting conditions regarding ADA compliance.

FURNITURE, FIXTURES AND EQUIPMENT

Any personal property items contained in the property are not considered in to contribute significantly

to the overall value of the real estate.

ENVIRONMENTAL ISSUES

CBRE, Inc. is not qualified to detect the existence of any potentially hazardous materials such as lead

paint, asbestos, urea formaldehyde foam insulation, or other potentially hazardous construction

materials on or in the improvements. The existence of such substances may affect the value of the


29

property. For the purpose of this assignment, we have specifically assumed that any hazardous

materials that would cause a loss in value do not affect the subject.

ANALYSIS OF VACANT SPACE

The subject was in poor condition when the current owners bought the property; however, the subject

has undergone renovations for the last several years improving the space in order to be leased. The

former grocery space, known as the ‘2nd phase’, consisting of 81,839 square feet, has not been

improved and is still in poor condition. The rest of the center’s vacant space is considered in average

condition.

DEFERRED MAINTENANCE

We were not provided with an estimate of deferred maintenance; however, from our site inspection

there appears to be a significant amount which lends support to our conclusion of analyzing the

property on an income in-place basis.

ECONOMIC AGE AND LIFE

CBRE, Inc.’s estimate of the subject improvements effective age and remaining economic life is

depicted in the following chart:

ECONOMIC AGE AND LIFE

Actual Age 43 Years

Effective Age 30 Years

MVS Expected Life 45 Years

Remaining Economic Life 15 Years

Accrued Physical Incurable Depreciation 66.7%

Compiled by CBRE

The overall life expectancy is based upon our on-site observations and a comparative analysis of

typical life expectancies reported for buildings of similar construction as published by Marshall and

Swift, LLC, in the Marshall Valuation Service cost guide. Since the center has undergone several

renovations we have concluded at an effective age which differs from the actual age.

CONCLUSION

The improvements are in average overall condition. Overall, there are no known factors that adversely

impact the marketability of the improvements.

JACKSON SQUARE PROMENADE | ZONING

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ZONING

The following chart summarizes the subject’s zoning requirements.

ZONING SUMMARYCurrent Zoning C-3, General Commercial

Legally Conforming Yes

Uses Permitted Commercial uses serving neighborhoods andcommunity needs

Zoning Change Not likely

Category Zoning Requirement

Minimum Lot Size None

Minimum Setbacks

Front Yard 15 Feet

Bordering Residential Development 25 Feet

Bordering Commercial Development 0 Feet

Maximum Bldg. Coverage None

Source: City of Jackson Planning & Zoning Dept.

ANALYSIS AND CONCLUSION

The improvements represent a legally-conforming use. Additional information may be obtained from

the appropriate governmental authority.

JACKSON SQUARE PROMENADE | TAX AND ASSESSMENT DATA

31

TAX AND ASSESSMENT DATA

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

and taxes, and does not include any furniture, fixtures or equipment.

AD VALOREM TAX INFORMATION

Assessor's Market Value 2011 Pro Forma

207-2-2 $1,245,820

Subtotal $1,245,820 $1,245,820

Assessed Value @ 15% 15%

$186,873 $186,873

General Tax Rate (per $100 A.V.) 17.035 17.035

Total Taxes $31,834 $31,834

Source: Assessor's Office

The local Assessor’s methodology for valuation is 15% of market value. According to a representative

of the Hinds County Assessor’s office, all subject taxes for 2010 have been paid as of the date of this

appraisal. All previous years taxes have been paid in full.

CONCLUSION

Based on the foregoing, the total taxes for the subject have been estimated as $31,834 for the base

year of our analysis, based upon an assessed value of $186,873 or $0.58 per square foot. This is in

line with the current and historical assessment.

For purposes of this analysis we are assuming any outstanding property tax liability has been paid.

CBRE assumes that all taxes are current. If the subject sold for the value estimate in this report, a

reassessment at that value could occur.

JACKSON SQUARE PROMENADE | HIGHEST AND BEST USE

32

HIGHEST AND BEST USE

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

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

legal permissibility; physical possibility; financial feasibility; and maximum profitability.

The highest and best use analysis of the subject is discussed on the following pages. This analysis

incorporates the information presented in the Market Analysis section, as well as any unique

characteristics of the subject described previously.

AS VACANT

Legal Permissibility

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

Physical Possibility

The subject is adequately served by utilities, and has an adequate shape and size, sufficient access,

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

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

Financial Feasibility

Potential uses of the site are limited to retail related uses due to zoning restrictions. The determination

of financial feasibility is dependent primarily on the relationship of supply and demand for the legally

probable land uses versus the cost to create the uses.

New retail projects have not been developed in this market due to economic conditions. Specifically,

there are proposed developments which are no longer moving forward due to inadequate

construction financing and market conditions (increasing vacancy, declining effective rental rates,

higher cap rates, etc.). Overall, there is significant risk in the retail market and most investors would

not move forward with new construction at this time.

Maximum Profitability

The final test of highest and best use of the site as if vacant is that the use be maximally productive,

yielding the highest return to the land. In the case of the subject as if vacant, the analysis has indicated

that a new retail project would be most appropriate.

JACKSON SQUARE PROMENADE | HIGHEST AND BEST USE

33

CONCLUSION: HIGHEST AND BEST USE AS VACANT

As noted, new development is not financially feasible at this time. Therefore, the highest and best use

of the site, as vacant, would be to hold for future retail development when economic conditions

improve.

AS IMPROVED

Legal Permissibility

As discussed, the subject site’s zoning and legal restrictions permit a variety of land uses. The site has

been improved with a retail development that is a legal, conforming use.

Physical Possibility

The physical characteristics of the subject improvements were discussed in detail in the improvements

analysis. Both the layout and positioning of the improvements are considered functional for retail use.

While it would be physically possible for a wide variety of uses, based on the legal restrictions and the

design of the improvements, the continued use of the property for retail users would be the most

functional use.

Financial Feasibility

The financial feasibility of a retail property is based on the amount of rent which can be generated,

less operating expenses required to generate that income; if a residual amount exists, then the land is

being put to a productive use. As will be indicated in the income capitalization approach, the subject

is producing a positive net cash flow and continued utilization of the improvements for retail purposes

is considered financially feasible.

Maximum Profitability

The maximally profitable use of the subject as improved should conform to neighborhood trends and

be consistent with existing land uses. Although several uses may generate sufficient revenue to satisfy

the required rate of return on investment and provide a return on the land, the single use that

produces the highest price or value is typically the highest and best use. As shown in the applicable

valuation sections, buildings that are similar to the subject have been acquired or continue to be used

by retail owners/tenants. None of the comparable buildings have been acquired for conversion to an

alternative use. These comparables would indicate that the maximally productive use of the property is

consistent with the existing use as a retail property.

CONCLUSION: HIGHEST AND BEST USE AS IMPROVED

Based on the foregoing, the highest and best use of the property, as improved, is consistent with the

existing use as a retail development.

JACKSON SQUARE PROMENADE | APPRAISAL METHODOLOGY

34

APPRAISAL METHODOLOGY

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

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

COST APPROACH

The cost approach is based on the proposition that the informed purchaser would pay no more for the

subject than the cost to produce a substitute property with equivalent utility. This approach is

particularly applicable when the property being appraised involves relatively new improvements that

represent the highest and best use of the land, or when it is improved with relatively unique or

specialized improvements for which there exist few sales or leases of comparable properties.

SALES COMPARISON APPROACH

The sales comparison approach utilizes sales of comparable properties, adjusted for differences, to

indicate a value for the subject. Valuation is typically accomplished using physical units of comparison

such as price per square foot, price per unit, price per floor, etc., or economic units of comparison

such as gross rent multiplier. Adjustments are applied to the physical units of comparison derived

from the comparable sale. The unit of comparison chosen for the subject is then used to yield a total

value. Economic units of comparison are not adjusted, but rather analyzed as to relevant differences,

with the final estimate derived based on the general comparisons.

INCOME CAPITALIZATION APPROACH

The income capitalization approach reflects the subject’s income-producing capabilities. This

approach is based on the assumption that value is created by the expectation of benefits to be derived

in the future. Specifically estimated is the amount an investor would be willing to pay to receive an

income stream plus reversion value from a property over a period of time. The two common

valuation techniques associated with the income capitalization approach are direct capitalization and

the discounted cash flow (DCF) analysis.

METHODOLOGY APPLICABLE TO THE SUBJECT

In valuing the subject, only the sales comparison and income capitalization approaches are

applicable and have been used. The cost approach is not applicable in the estimation of market

value due to age of the property.

JACKSON SQUARE PROMENADE | SALES COMPARISON APPROACH

35


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

detailed description of each transaction is included in the addenda.

SUMMARY OF COMPARABLE RETAIL SALES

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

1 Douglas Square,Brewton, AL

Sale Jun-11 1990 114,891 $746,792 $746,792 $6.50 22% $0.00 0.00%

2 Eufaula Towne Center,Eufaula, AL

Sale Jun-11 1990 89,959 $1,330,500 $1,330,500 $14.79 20% $1.27 8.56%

3 Market at Byram,Byram, MS

Sale Nov-10 1991 69,054 $2,955,000 $2,955,000 $42.79 94% $5.12 11.97%

4 Kroger West Shopping Center,Rome, GA

Sale Jul-10 1988 58,114 $1,000,000 $1,000,000 $17.21 10% $0.00 0.00%

5 Village Hills Shopping Center,Forestdale, AL

Sale Feb-10 1975 48,405 $1,100,000 $1,100,000 $22.72 90% $3.18 14.00%

Subj.Pro

Forma

Jackson Square Promenade,Jackson, Mississippi

--- --- 1968 323,467 --- --- --- 85% $2.97 ---

1 Transaction amount adjusted for cash equivalency and/or deferred maintenance (where applicable)

Compiled by CBRE

Transaction


36

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

selected from our research of comparable improved sales within the southeast region.

DISCUSSION/ANALYSIS OF IMPROVED SALES

Improved Sale One

This comparable represents the sale of Douglas Square, a 114,891 square feet neighborhood

shopping center located at the northwest corner of Douglas Avenue and Stadium Street in Brewton,

AL. The center sold from Regions Bank. It features a 73,338 square foot vacant former Wal-Mart

box and a 41,553 square foot retail center. The center was 22% occupied at the time of sale.

Goody's occupies 16,849 square feet. The center is also adjacent to a Piggly Wiggly Supermarket

that is separately owned. The property sold in June 2011 for $6.50 per square foot. The buyer

purchases distressed assets around the southeast.

An upward adjustment was warranted for the comparables inferior location. A downward adjustment

was required for size as smaller properties as compared to the subject typically sell for a premium on

a price per square foot basis. Additionally a downward adjustment was warranted for the

comparable’s superior age. An upward adjustment was required for inferior occupancy as the

comparable was vacant at its date of sale. No other adjustments were necessary.

Improved Sale Two

This comparable represents an 89,959-square foot neighborhood center located at 1218 South

Eufaula Avenue in Eufaula. The improvements were constructed in 1990 and are situated on a 16.32-

acre site. Currently, the property is 19.8% occupied and is considered to be in average overall

condition. The former anchor tenant, Wal-Mart (71,159 SF), vacated the space prior to their lease

expiring in November 2010. The property sold for $1,330,500 or $14.79 PSF. The income in place

at the time of sale was $113,933, indicating an 8.56% cap rate. Since the sale the buyer has leased

the vacated Wal-Mart space to Marvins (33,000 sf) and Burkes (25,990 sf).

A downward adjustment was required for size as smaller properties as compared to the subject

typically sell for a premium on a price per square foot basis. Additionally a downward adjustment was

warranted for the comparable’s superior age. An upward adjustment was required for inferior

occupancy as the comparable was vacant at its date of sale. No other adjustments were necessary.

Improved Sale Three

This comparable represents the sale of a 69,054 square foot neighborhood center located on Terry

Road in Byram just outside of Jackson. The property sold for $2,955,000 or $42.79 per square foot

in November 2010. The property was built in 1991 and was 94% occupied at the date of sale.

According to the brokers underwriting the cap rate used was 11.97% indicating a NOI of $353,713.


37



warranted for the comparable’s superior age. A downward adjustment was required for the

comparable’s superior occupancy. No other adjustments were necessary.

Improved Sale Four

This represents the acquisition of a 58,114-square foot neighborhood retail center located along

Shorter Avenue in Rome. The property was formerly anchored by Kroger and built in 1988.

Randolph Oswalt (Jo Rand, LLC) acquired the property in July 2010 for $1,000,000, or $17.21 per

square foot. The broker confirmed an arms length transaction with no special financing

considerations. The property was originally marketed for $1,700,000, resulting in a 70% SP to LP

ratio.



warranted for the comparable’s superior age. An upward adjustment was required for inferior

occupancy as the comparable was vacant at its date of sale. No other adjustments were necessary.

Improved Sale Five

This represents the sale of a 48,405 square foot neighborhood shopping center located at the

southeast corner of Echo Drive and US Highway 78 (Forestdale Boulevard) in Forestdale, Jefferson

County, Alabama. The improvements were constructed in 1975 and are situated on 4.32-acres. The

center is anchored by Piggly Wiggly and Family Dollar. According to the broker, the center sold in

February 2010 for $1,100,000, or $22.72 per square foot, indicating a 14% cap rate. The

purchaser is a local, private investor.



warranted for the comparable’s superior age. A downward adjustment was required for the

comparable’s superior occupancy. No other adjustments were necessary

SUMMARY OF ADJUSTMENTS

Based on our comparative analysis, the following chart summarizes the adjustments warranted to each

comparable.


38

RETAIL SALES ADJUSTMENT GRID

Comparable Number 1 2 3 4 5Subj.Pro

FormaTransaction Type Sale Sale Sale Sale Sale ---Transaction Date Jun-11 Jun-11 Nov-10 Jul-10 Feb-10 ---

Year Built 1990 1990 1991 1988 1975 1968

GLA (SF) 114,891 89,959 69,054 58,114 48,405 323,467Actual Sale Price $746,792 $1,330,500 $2,955,000 $1,000,000 $1,100,000 ---Adjusted Sale Price 1 $746,792 $1,330,500 $2,955,000 $1,000,000 $1,100,000 ---Price Per SF 1 $6.50 $14.79 $42.79 $17.21 $22.72 ---

Occupancy 22% 20% 94% 10% 90% 42%

NOI Per SF $0.00 $1.27 $5.12 $0.00 $3.18 $2.97

OAR 0.00% 8.56% 11.97% 0.00% 14.00% ---

Adj. Price Per SF $6.50 $14.79 $42.79 $17.21 $22.72

Property Rights Conveyed 0% 0% 0% 0% 0%Financing Terms 1 0% 0% 0% 0% 0%

Conditions of Sale 0% 0% 0% 0% 0%

Market Conditions (Time) 0% 0% 0% 0% 0%

Subtotal - Price Per SF $6.50 $14.79 $42.79 $17.21 $22.72

Location 10% 0% 0% 0% 0%

Size -10% -10% -15% -15% -15%

Age/Condition -5% -5% -5% -5% 0%

Quality of Construction 0% 0% 0% 0% 0%

Traffic Counts/Exposure 0% 0% 0% 0% 0%

Parking 0% 0% 0% 0% 0%

Tenancy 0% 0% 0% 0% 0%

Occupancy 5% 10% -25% 10% -25%

Total Other Adjustments 0% -5% -45% -10% -40%

Indicated Value Per SF $6.50 $14.05 $23.53 $15.49 $13.63

1 Transaction amount adjusted for cash equivalency and/or deferred maintenance (where applicable)

Compiled by CBRE

SALE PRICE PER SQUARE FOOT CONCLUSION

The majority of the comparables are in the $6 - $15 adjusted square foot range. Sale 3 is in close

proximity to the subject but is considered a superior property for its age and occupancy. Therefore we

have concluded towards the middle of the tighter range. The following chart presents the valuation

conclusion:


GLA (SF) X Value Per SF = Value

323,467 X $12.00 = $3,881,604

VALUE CONCLUSION

Indicated Stabilized Value $3,881,604

Rounded $3,900,000

Value Per SF $12.06

Compiled by CBRE

JACKSON SQUARE PROMENADE | INCOME CAPITALIZATION APPROACH

39

INCOME CAPITALIZATION APPROACH

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

detailed description of each transaction is included in the addenda.

SUMMARY OF COMPARABLE RETAIL RENTALS

Comp. No. Property Name Location

Year Built Occ. GLA (SF)

QuotedRental Rate

Expense Basis

1 1960 75% 66,000 $2 - $5 NNN

2 1967 70% 48,271 $7.00 PSF NNN

3 Unknown 45% 13,333 $15.00 PSF NNN

4 1973 100% 82,371 $10.00 PSF NNN and Gross

5 1959 100% 94,562 $3 - $5 Gross & NNN

Subj. Jackson Square Promenade 2460 Terry Road,Jackson, Mississippi

1968 42% 323,467 --- ---

Compiled by CBRE

SS of McDowell at Sucrest Drive,Jackson, MS

McDowell Square Shopping Center

Apple Ridge Shopping Center 2515 Mcfadden Road,Jackson, MS

Metro Crossing

Southgate Shopping Center 2885 Terry Road,Jackson, MS

4820 Highway 18,Jackson, MS

1335 Ellis Avenue,Jackson, MS

Ellis Avenue Plaza

The rentals utilized represent the best data available for comparison with the subject. They were

selected from our research within the Jackson area. The following table shows a summary of the

space allocation for the subject.


40

MARKET RENT CATEGORIES

Space Allocation Size

Anchors 245,640 SF

In-line 77,827 SF

Compiled by CBRE

DISCUSSION/ANALYSIS OF RENT COMPARABLES

Rent Comparable One

This comparable represents a 66,000 square foot retail center located along Mcfadden Road in

Jackson. The center is 75% occupied and was built in 1960. Currently there are two open suites with

the 14,000 square foot space going for $2.06 PSF and the 2,200 square foot space going for $4.77

PSF on a triple net basis.

As compared to the subject this comparable is similar with respect to construction quality and age. No

adjustments were necessary.

Rent Comparable Two

This comparable represents a strip retail center located along Ellis Avenue, just north of Highway 80

in Jackson. The center was developed in 1967 with three additional phases with the most recent

completed around 1994. The center is un-anchored and has a mix of national and local tenants.

The center currently has around 24,000 square feet available, which is being marketed at $7.00 per

square foot on a NNN basis. Free rent is not currently offered but reportedly might be available

during any build-out period, i.e. 1-2 months. Tenant improvement allowances if given would be

minimal.



Rent Comparable Three

This comparable represents a strip retail center located along Highway 18 at the entrance to a Wal-

Mart and across the street from Lowes in southwest Jackson. The center is currently 45% occupied.

The vacant space is being marketed for $15.00 per square foot on a NNN basis. The broker

indicated that free rent of 2-3 months would be considered as would tenant improvement allowances.

In comparison to the subject, this property has a superior location in close proximity to a Wal-Mart.

This property is considered superior to the subject.


41

Rent Comparable Four

This neighborhood center has good access, visibility and exposure. The center was developed in

1973 and has average overall market appeal. The center is anchored by Piggly Wiggly. The leasing

agent/owner indicated the rental rates are higher for smaller spaces than larger spaces. Mr. Lambert

reported the Dollar General is currently paying about $6.00 per square foot and the smaller shop

space averages around $10.00 per square foot. The leases vary from gross to NNN, where the

tenant pays their pro rata share of taxes and insurance. Expenses were not estimated. Free rent is not

currently offered but would be negotiable and tenant improvement allowances are not offered. Rental

rate escalations are negotiable. The owner indicates that the rents have not changed over the past few

years and that the center has maintained 100% occupancy.

This comparable has an established grocery anchor as well as a national discount chain. Thus, this

comparable is considered superior to the subject.

Rent Comparable Five

This comparable represents a 94,562 square foot neighborhood center located on the west side of

Terry Road in Jackson. The property was built in 1959 and is anchored by Roses and Freds. The

center is currently 100% leased. According to the property manager, because they are 100% leased

they did not have an asking rent; however, she did say their effective rents are between $3 and $6

PSF. The anchor tenants are on a triple net basis with $1.21 pass throughs plus percentage rent

based on sales. The smaller space is on a gross basis. The majority of the leases expire in 2014.



LARGE SECOND-GENERATION SPACE

LARGE SECOND-GENERATION LEASE TERMSTenant Location Lease Date Annual Rent Size (SF) Rent PSF Lease Type Term

Burkes Eufaula, AL Nov-11 $81,869 25,990 $3.15 NNN 5 Yrs.

Marvins Eufaula, AL Oct-11 $140,250 33,000 $4.25 NNN 10 Yrs.

Hobby Lobby Northpoint, AL Sep-11 $180,000 60,000 $3.00 NNN N/A

Super 1 Foods New Iberia, LA May-11 $291,642 79,902 $3.65 NNN 5 Yrs.

Goodwill Ocean Springs, MS Mar-11 $99,000 18,000 $5.50 NNN 5 Yrs.

Dollar General Leesville, LA Jan-11 $31,500 9,000 $3.50 NNN 3 Yrs.

CATO Gulfport, MS Oct-10 $72,000 12,000 $6.00 NNN 5 Yrs.

Aplle Market LOI Fairfield, AL Feb-10 $75,000 30,000 $2.50 NNN 10 Yrs.

Beauty Mark LOI Fairfield, AL Feb-10 $200,870 104,620 $1.92 NNN 3 Yrs.

Ross Dress for Less Florence, AL Jan-10 $164,250 32,850 $5.00 NNN 5 Yrs.

Fli-Bingo Fairfield, AL Jan-10 $142,844 35,711 $4.00 NNN 10 Yrs.

Com Workforce Center Bossier City, LA Jan-10 $61,898 18,422 $3.36 NNN 5 Yrs.

Compiled by CB Richard Ellis Average $3.82


42

SUBJECT RENTAL INFORMATION

The subject’s recent rental information is detailed below.

SUMMARY OF RECENT LEASES

New/ Term Commence Size Rental Rate ExpenseTenant Renewal (Yrs.) Date (SF) $/SF/Yr. $/Yr. Reimb.

Asking RatesVacant Space New 3 --- 186,394 $6.00 $1,118,364 NNN

Actual LeasesThe Water Warehouse New 3 Mar-11 910 $10.55 $9,601 NNNJulian's Thrift Store New 1 Oct-11 1,493 $7.23 $10,794 NNNKids First Academy New 2 Mar-11 2,281 $7.89 $17,997 NNN$7 Shop for Women New 3 Aug-11 1,014 $10.06 $10,201 NNNDiscount Purses New 2 Nov-11 1,015 $9.46 $9,602 NNNGreat Expectations New 5 Nov-11 10,581 $3.97 $42,007 NNNPPP Church New 3 Sep-11 1,668 $6.47 $10,792 NNNThe Galleria New 10 Mar-11 18,500 $2.27 $41,995 NNNAuto Shop New 3 Nov-11 6,198 $2.90 $17,974 NNNBernies Sports Grill New 3 Sep-11 3,258 $5.52 $17,984 NNNSplit Images Salon New 3 Jun-11 2,230 $5.38 $11,997 NNNWilson Fitness Plex New 5 Jun-11 2,730 $6.59 $17,991 NNNRegent Teen Club New 5 Oct-11 6,965 $2.58 $17,970 NNNOld Skool Club New 5 Jun-10 4,338 $4.01 $17,395 NNNThe Warehouse Live New 5 Feb-11 8,415 $4.99 $41,991 NNNPlus Size New 3 Oct-11 6,550 $2.75 $18,013 NNN

Subtotal Actual Leases 78,146 $4.02 $314,303

Compiled by CBRE

MARKET RENT ESTIMATE

The most recently executed leases within the subject have typically been consistent with trends

exhibited in the competitive market and by the rent comparables.

Base Rental Rate

The estimate of base rental rates is shown in the following chart.

BASE RENTAL RATES

Category

Subject's Quoted Terms N/A $6.00

Rent Comparable Data $1.92 - $6.00 $2 - $15

CBRE Estimate $3.50 $5.50

Compiled by CBRE

Anchors In-line

Based upon the indication of the market comparables, it would appear that the subject’s current

contract rental rates are in-line with market.

Concessions

The estimate of concessions is shown in the following chart.


43

CONCESSIONS

Category

Subject's Quoted Terms N/A 1-3 Months

Rent Comparable Data None 1-3 Months

CBRE Estimate None 3 Months

Compiled by CBRE

Anchors In-line

Reimbursements

The estimate of reimbursements is shown in the following chart.

REIMBURSEMENTS

Category

Subject's Quoted Terms NNN NNN

Rent Comparable Data NNN NNN

CBRE Estimate NNN NNN

Compiled by CBRE

Anchors In-line

Escalations

The market rental rate for the subject is a base rate and does not include potential annual escalations.

At the present time, annual escalations are not prevalent in the local market and the market rental

rate reflects a flat rate over the term of the lease.

Tenant Improvements

The estimate of tenant improvements is shown in the following chart.

TENANT IMPROVEMENTS

Category

CBRE Estimate

New Tenants $1.00 $2.00

Renewals As Is As Is

Compiled by CBRE

Anchors In-line

Lease Term

The estimate of lease terms is shown in the following chart.


44

LEASE TERM

Category

Subject's Quoted Terms N/A 3-5 YRS

Rent Comparable Data 5-10 YRS 3-5 YRS

CBRE Estimate 5 YRS 3 YRS

Compiled by CBRE

Anchors In-line

MARKET RENT CONCLUSIONS

The following chart shows the market rent conclusions for the subject:

MARKET RENT CONCLUSIONS

Category

GLA (SF) 245,640 77,827

Percent of Total SF 75.9% 24.1%

Market Rent ($/SF/Yr.) $3.50 $5.50

Concessions None 3 Months

Reimbursements NNN NNN

Annual Escalation None None

Tenant Improvements (New Tenants) $1.00 $2.00

Tenant Improvements (Renewals) As Is As Is

Average Lease Term 5 Years 3 Years

Compiled by CBRE

Anchors In-line


45

RENT ROLL ANALYSIS

The subject’s rent roll is illustrated as follows:

RENT ROLL ANALYSIS

Suite Lease Lease Term Size (GLA) Contract Rental RateNo. Tenant Start Expiration (Yrs.) SF % Total $/SF/Yr. $/Yr.

100 Bingo Rama May-06 Jun-12 6 14,467 4.5% $6.81 $98,520

150 The Water Warehouse Mar-11 Mar-14 3 910 0.3% $10.55 $9,601

200 Leasing Office N/A N/A N/A 910 0.3% $0.00 $0

300 Julian's Thrift Store Oct-11 Oct-12 1 1,493 0.5% $7.23 $10,794

400 Rlevant Ministries, Inc. Jun-09 Jan-12 3 3,229 1.0% $7.40 $23,895

500 Kids First Academy Mar-11 Feb-13 2 2,281 0.7% $7.89 $17,997

600 $7 Shop for Women Aug-11 Aug-14 3 1,014 0.3% $10.06 $10,201

700 Discount Purses Nov-11 Nov-13 2 1,015 0.3% $9.46 $9,602

800 Great Expectations Learning Center Nov-11 Nov-16 5 10,581 3.3% $3.97 $42,007

900 PPP Church Sep-11 Sep-14 3 1,668 0.5% $6.47 $10,792

1000 The Galleria Mar-11 Mar-21 10 18,500 5.7% $2.27 $41,995

1200 Auto Shop Nov-11 Nov-14 3 6,198 1.9% $2.90 $17,974

1300 Bernies Sports Grill Sep-11 Oct-14 3 3,258 1.0% $5.52 $17,984

1400 Split Images Salon Jun-11 Jun-14 3 2,230 0.7% $5.38 $11,997

1500 Wilson Fitness Plex Jun-11 Jun-16 5 2,730 0.8% $6.59 $17,991

1700 Regent Teen Club Oct-11 Jun-16 5 6,965 2.2% $2.58 $17,970

1800 Old Skool Club Jul-10 Jun-15 5 4,338 1.3% $4.01 $17,395

1900 The Warehouse Live Feb-11 Jan-16 5 8,415 2.6% $4.99 $41,991

2000 Optimum Dance Studio Sep-11 Sep-14 3 6,550 2.0% $2.75 $18,013

2100 Freight Access N/A N/A N/A 5,562 1.7% $0.00 $0

2200 Plus Size Oct-11 Oct-14 3 6,550 2.0% $2.75 $18,013

2400 Hinds County Sheriff N/A N/A N/A 2,396 0.7% $0.00 $0

2900 Bingo Depo Jul-95 Jul-13 18 25,813 8.0% $5.58 $144,037

Occupied Subtotals 137,073 42.4% $4.37 $598,767

1100 Vacant --- --- 24,900 7.7% $3.50 $87,150

1600 Vacant --- --- 14,540 4.5% $3.50 $50,890

2300 Vacant --- --- 3,100 1.0% $5.50 $17,050

2500 Vacant --- --- 7,015 2.2% $5.50 $38,583

2600 Vacant --- --- 40,108 12.4% $3.50 $140,378

2700 Vacant --- --- 41,731 12.9% $3.50 $146,059

2800 Vacant --- --- 15,000 4.6% $3.50 $52,500

3000 Vacant --- --- 40,000 12.4% $3.50 $140,000

Property Totals - Contract Rent 323,467 100.0% $3.93 $1,271,376

Property Totals - Market Rent 323,467 100.0% $3.98 $1,287,789

Compiled by CBRE

Anticipated Changes/Rollover to Rent Roll

As shown above there has been a lot of recent lease activity with the majority of those leases on 3-5

year terms. Thus there is not significant rollover expected. The center does have a fairly significant


46

waiting list to fill the vacant space. Once it is ready, we would anticipate the center to continue to

lease up.

POTENTIAL RENTAL INCOME CONCLUSION

Within this analysis, potential rental income is estimated based upon actual income in-place. This

method of calculating rental income is most prevalent in the local market and is consistent with the

method used to derive overall capitalization rates from the comparable sales data.

OPERATING HISTORY

In estimating the subject’s pro forma operating data, the current operating budget has been analyzed.

The following table presents the available operating data for the subject.

OPERATING HISTORY

Year Budget

Total $/SFIncome

Rental Income $598,752 $1.85Expense Reimbursements 67,271 0.21 Effective Gross Income $666,023 $2.06

ExpensesReal Estate Taxes $32,000 $0.10Property Insurance 24,000 0.07 Common Area Maintenance 74,600 0.23 Management Fee 36,000 0.11 Nonreimbursable Landlord Expense - - Reserves for Replacement - - Operating Expenses $166,600 $0.52

Net Operating Income $499,423 $1.54

Source: Operating statements

VACANCY

The subject’s estimated stabilized occupancy rate was previously discussed in the market analysis and

has been concluded based upon the current income in-place.

Our estimate is inclusive of a credit loss factor.

EXPENSE REIMBURSEMENTS

The subject’s leases are typically based on a triple net structure whereby the tenant reimburses the

owner for a pro rata share of various expenses. Those expenses considered to be eligible for

reimbursement are as follows:


47

REIMBURSED EXPENSES

Real Estate Taxes

Property Insurance

Common Area Maintenance

Compiled by CBRE

The subject’s expense reimbursements are detailed as follows:

EXPENSE REIMBURSEMENTS

Year Total $/SF

Budget $67,271 $0.21

CBRE Estimate $61,466 $0.19

Compiled by CBRE

EFFECTIVE GROSS INCOME

The subject’s effective gross income is detailed as follows:

EFFECTIVE GROSS INCOME

Year Total $/SF

Budget $666,023 $2.06


Compiled by CBRE

OPERATING EXPENSE ANALYSIS

Expense Comparables

The following chart summarizes expenses obtained from recognized industry publications and/or

comparable properties.


48

EXPENSE COMPARABLES

Comparable Number 1 2 3

Location Jackson, MS Gulfport, MS Fairfield, AL

GLA (SF) 52,617 38,129 293,496

Expense Year 2010 Budget 2010 2009

Effective Gross Income $7.01 $17.46 $2.69

Expenses $/SF $/SF $/SF

Real Estate Taxes $1.53 $0.82 $0.33

Property Insurance 0.19 0.25 0.17

Common Area Maintenance 0.61 0.65 0.59

Management Fee 0.12 1.22 0.08 (as a % of EGI) 1.7% 7.0% 3.0%

Nonreimbursable Landlord Expense - 1.24 0.01

Reserves for Replacement - - -

Operating Expenses $2.45 $4.17 $1.19Operating Expense Ratio 34.9% 23.9% 44.1%

Source: Actual Operating Statements

The following subsections represent the analysis for the pro forma estimate of each category of the

subject’s stabilized expenses.

Real Estate Taxes

The real estate taxes for the subject were previously discussed. The subject’s expense is detailed as

follows:

REAL ESTATE TAXES

Year Total $/SF

Budget $32,000 $0.10

Expense Comparable 1 N/A $1.53




Compiled by CBRE

We note that we have concluded well below the comparable range; however, real estate taxes are a

highly property specific expense. Thus we have concluded at the historical figure for the subject.


49

Property Insurance

Property insurance expenses typically include fire and extended coverage and owner’s liability

coverage. The subject’s expense is detailed as follows:

PROPERTY INSURANCE

Year Total $/SF

Budget $24,000 $0.07





Compiled by CBRE

We have concluded just below the comparable range but in-line with the budgeted amount. Thus, our

conclusion seems reasonable.

Common Area Maintenance

Common area maintenance expenses typically include utilities, parking lot sweeping and

maintenance, and routine repairs and maintenance of the building and site improvements. The

subject’s expense is detailed as follows:

COMMON AREA MAINTENANCE

Year Total $/SF

Budget $74,600 $0.23





Compiled by CBRE

We have concluded in line with the subject’s budget, which is just below the expense comparables.

Management Fee

Management expenses are typically negotiated as a percentage of collected revenues (i.e., effective

gross income). The subject’s expense is detailed as follows:


50

MANAGEMENT FEE

Year Total % EGI

Budget $36,000 5.4%

Expense Comparable 1 N/A 1.7%



CBRE Estimate $33,012 5.0%

Compiled by CBRE

Professional management fees at the expense comparables ranged from approximately 2% up to 7%.

Discussions with a local management company indicated management fees in the 3.0% to 5.0% for

comparable properties. We have concluded at the middle of the range.

Reserves for Replacement

Reserves for replacement have been estimated based on market parameters with an indicated range

of $0.05 to $0.15 per square foot for comparable properties. Given the recent amount of capital

recently spent at the subject property somewhat offsets the subject’s age. Therefore, we have utilized

an expense near the mid-point of the range.

OPERATING EXPENSE CONCLUSION

The subject’s expense is detailed as follows:

OPERATING EXPENSES

Year Total $/SF

Budget $166,600 $0.52





Compiled by CBRE

The subject’s per square foot operating expense pro forma is slightly below the total per square foot

operating expenses indicated by the expense comparables and slightly above the budgeted amount.

We feel this is reasonable due to the subject’s low property tax expense. Additionally, the comparables

expense ratio ranges from 23.9% - 44.1%. For our analysis, our expense ratio indicates 31.87%,

which is in line with the comparables and appears reasonable.

NET OPERATING INCOME CONCLUSION

The subject’s net operating income is detailed as follows:


51

NET OPERATING INCOME

Year Total $/SF

Budget $499,423 $1.54


Compiled by CBRE

Our estimate of net operating income is somewhat less than the subject’s budgeted amount as our

estimate includes market estimates for management fee and reserves expenses.

DIRECT CAPITALIZATION

Direct capitalization is a method used to convert a single year’s estimated stabilized net operating

income into a value indication. The following subsections represent different techniques for deriving

an overall capitalization rate for direct capitalization.

Comparable Sales

The overall capitalization rates (OARs) confirmed for the comparable sales analyzed in the sales

comparison approach are as follows:

COMPARABLE CAPITALIZATION RATES

Sale Sale Price

Sale Date $/SF Occupancy OAR

2 Jun-11 $14.79 20% 8.56%

3 Nov-10 $42.79 94% 11.97%

5 Feb-10 $22.72 90% 14.00%

Indicated OAR: 84% 8.56% - 14.00%

Compiled by: CBRE

Published Investor Surveys

The results of the most recent investor surveys are summarized in the following chart.

OVERALL CAPITALIZATION RATES

Investment Type OAR Range Average

CBRE Community Centers

Class C 9.00% - 12.00% 10.27%

CBRE Neighborhood Centers

Class C 8.00% - 12.00% 9.79%

Indicated OAR: 8.00% - 12.00%

Compiled by: CBRE


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The subject is considered to be a Class C property. Because of the subject’s age and condition, an

OAR near the upper end of the range indicated in the preceding table is considered appropriate.

Band of Investment

The band of the investment technique has been utilized as a crosscheck to the foregoing techniques.

The Mortgage Interest Rate and the Equity Dividend Rate (EDR) are based upon current market yields

for similar investments. The analysis is shown in the following table.

BAND OF INVESTMENT

Mortgage Interest Rate 5.50%

Mortgage Term (Amortization Period) 20 Years

Mortgage Ratio (Loan-to-Value) 50%

Mortgage Constant (monthly payments) 0.08255

Equity Dividend Rate (EDR) 13%

Mortgage Requirement 50% x 0.08255 = 0.04128

Equity Requirement 50% x 0.13000 = 0.06500

100% 0.10628

Indicated OAR: 10.60%

Compiled by: CBRE

Capitalization Rate Conclusion

The following chart summarizes the OAR conclusions.

OVERALL CAPITALIZATION RATE - CONCLUSION

Source Indicated OAR

Comparable Sales 8.56% - 14.00%

National Investor Survey 8.00% - 12.00%

Band of Investment 10.60%

CBRE Estimate 11.00%

Compiled by: CBRE

Direct Capitalization Summary

A summary of the direct capitalization at stabilized occupancy is illustrated in the following chart.


53

DIRECT CAPITALIZATION - INCOME IN-PLACE

Income $/Door/Mo. $/SF/Yr Total Potential Rental Income Income in-place $499 $1.85 $598,767Expense Reimbursements 51 0.19 61,466

Effective Gross Income $550 $2.04 $660,233

ExpensesReal Estate Taxes $0.10 $31,834Property Insurance 0.10 32,347 Common Area Maintenance 0.25 80,867 Management Fee 5.00% 0.10 33,012 Reserves for Replacement 0.10 32,347

Operating Expenses $0.65 $210,406

Operating Expense Ratio 31.87%

Net Operating Income $1.39 $449,827

OAR / 11.00%

Indicated Stabilized Value $4,089,336

Rounded $4,100,000

Value Per SF $12.68

Matrix Analysis Cap Rate Value

10.75% $2,564,400

11.00% $2,469,300

11.25% $2,378,500

Compiled by CBRE

JACKSON SQUARE PROMENADE | RECONCILIATION OF VALUE

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RECONCILIATION OF VALUE

The value indications from the approaches to value are summarized as follows:

SUMMARY OF VALUE CONCLUSIONSSales Comparison Approach $3,900,000

Income Capitalization Approach $4,100,000

Reconciled Value $4,100,000

Compiled by CBRE

In the sales comparison approach, the subject is compared to similar properties that have been sold

recently or for which listing prices or offers are known. The sales used in this analysis are considered

comparable to the subject, and the required adjustments were based on reasonable and well-

supported rationale. In addition, market participants are currently analyzing purchase prices on

investment properties as they relate to available substitutes in the market. Therefore, the sales

comparison approach is considered to provide a reliable value indication, but has been given

secondary emphasis in the final value reconciliation.

The income capitalization approach is applicable to the subject since it is an income producing

property leased in the open market. Market participants are primarily analyzing properties based on

their income generating capability. Therefore, the income capitalization approach is considered a

reasonable and substantiated value indicator and has been given primary emphasis in the final value

estimate.

Based on the foregoing, the market value of the subject has been concluded as follows:

MARKET VALUE CONCLUSION

Appraisal Premise Interest Appraised Date of Value Value Conclusion

As Is Leased Fee Interest November 4, 2011 $4,100,000

Compiled by CBRE

JACKSON SQUARE PROMENADE | ASSUMPTIONS AND LIMITING CONDITIONS

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ASSUMPTIONS AND LIMITING CONDITIONS

1. Unless otherwise specifically noted in the body of the report, it is assumed that title to the property or properties appraised is clear and marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value. CBRE, Inc. is not aware of any title defects nor has it been advised of any unless such is specifically noted in the report. CBRE, Inc., however, has not examined title and makes no representations relative to the condition thereof. Documents dealing with liens, encumbrances, easements, deed restrictions, clouds and other conditions that may affect the quality of title have not been reviewed. Insurance against financial loss resulting in claims that may arise out of defects in the subject’s title should be sought from a qualified title company that issues or insures title to real property.

2. Unless otherwise specifically noted in the body of this report, it is assumed: that the existing improvements on the property or properties being appraised are structurally sound, seismically safe and code conforming; that all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required; that the roof and exterior are in good condition and free from intrusion by the elements; that the property or properties have been engineered in such a manner that the improvements, as currently constituted, conform to all applicable local, state, and federal building codes and ordinances. CBRE, Inc. professionals are not engineers and are not competent to judge matters of an engineering nature. CBRE, Inc. has not retained independent structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the condition of improvements. Unless otherwise specifically noted in the body of the report: no problems were brought to the attention of CBRE, Inc. by ownership or management; CBRE, Inc. inspected less than 100% of the entire interior and exterior portions of the improvements; and CBRE, Inc. was not furnished any engineering studies by the owners or by the party requesting this appraisal. If questions in these areas are critical to the decision process of the reader, the advice of competent engineering consultants should be obtained and relied upon. It is specifically assumed that any knowledgeable and prudent purchaser would, as a precondition to closing a sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity of building systems. Structural problems and/or building system problems may not be visually detectable. If engineering consultants retained should report negative factors of a material nature, or if such are later discovered, relative to the condition of improvements, such information could have a substantial negative impact on the conclusions reported in this appraisal. Accordingly, if negative findings are reported by engineering consultants, CBRE, Inc. reserves the right to amend the appraisal conclusions reported herein.

3. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property was not observed by the appraisers. CBRE, Inc. has no knowledge of the existence of such materials on or in the property. CBRE, Inc., however, is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired.

We have inspected, as thoroughly as possible by observation, the land; however, it was impossible to personally inspect conditions beneath the soil. Therefore, no representation is made as to these matters unless specifically considered in the appraisal.

4. All furnishings, equipment and business operations, except as specifically stated and typically considered as part of real property, have been disregarded with only real property being considered in the report unless otherwise stated. Any existing or proposed improvements, on or off-site, as well as any alterations or repairs considered, are assumed to be completed in a workmanlike manner according to standard practices based upon the information submitted to CBRE, Inc. This report may be subject to amendment upon re-inspection of the subject subsequent to repairs, modifications, alterations and completed new construction. Any estimate of Market Value is as of the date indicated; based upon the information, conditions and projected levels of operation.

5. It is assumed that all factual data furnished by the client, property owner, owner’s representative, or persons designated by the client or owner to supply said data are accurate and correct unless otherwise specifically noted in the appraisal report. Unless otherwise specifically noted in the appraisal report, CBRE, Inc. has no reason to believe that any of the data furnished contain any material error. Information and data referred to in this paragraph include, without being limited to, numerical street addresses, lot and block numbers, Assessor’s Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any material error in any of the above data could have a substantial impact on the conclusions reported. Thus, CBRE, Inc. reserves the right to amend conclusions reported if made aware of any such error. Accordingly, the client-addressee should


56

carefully review all assumptions, data, relevant calculations, and conclusions within 30 days after the date of delivery of this report and should immediately notify CBRE, Inc. of any questions or errors.

6. The date of value to which any of the conclusions and opinions expressed in this report apply, is set forth in the Letter of Transmittal. Further, that the dollar amount of any value opinion herein rendered is based upon the purchasing power of the American Dollar on that date. This appraisal is based on market conditions existing as of the date of this appraisal. Under the terms of the engagement, we will have no obligation to revise this report to reflect events or conditions which occur subsequent to the date of the appraisal. However, CBRE, Inc. will be available to discuss the necessity for revision resulting from changes in economic or market factors affecting the subject.

7. CBRE, Inc. assumes no private deed restrictions, limiting the use of the subject in any way.

8. Unless otherwise noted in the body of the report, it is assumed that there are no mineral deposit or subsurface rights of value involved in this appraisal, whether they be gas, liquid, or solid. Nor are the rights associated with extraction or exploration of such elements considered unless otherwise stated in this appraisal report. Unless otherwise stated it is also assumed that there are no air or development rights of value that may be transferred.

9. CBRE, Inc. is not aware of any contemplated public initiatives, governmental development controls, or rent controls that would significantly affect the value of the subject.

10. The estimate of Market Value, which may be defined within the body of this report, is subject to change with market fluctuations over time. Market value is highly related to exposure, time promotion effort, terms, motivation, and conclusions surrounding the offering. The value estimate(s) consider the productivity and relative attractiveness of the property, both physically and economically, on the open market.

11. Any cash flows included in the analysis are forecasts of estimated future operating characteristics are predicated on the information and assumptions contained within the report. Any projections of income, expenses and economic conditions utilized in this report are not predictions of the future. Rather, they are estimates of current market expectations of future income and expenses. The achievement of the financial projections will be affected by fluctuating economic conditions and is dependent upon other future occurrences that cannot be assured. Actual results may vary from the projections considered herein. CBRE, Inc. does not warrant these forecasts will occur. Projections may be affected by circumstances beyond the current realm of knowledge or control of CBRE, Inc.

12. Unless specifically set forth in the body of the report, nothing contained herein shall be construed to represent any direct or indirect recommendation of CBRE, Inc. to buy, sell, or hold the properties at the value stated. Such decisions involve substantial investment strategy questions and must be specifically addressed in consultation form.

13. Also, unless otherwise noted in the body of this report, it is assumed that no changes in the present zoning ordinances or regulations governing use, density, or shape are being considered. The property is appraised assuming that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, nor national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report is based, unless otherwise stated.

14. This study may not be duplicated in whole or in part without the specific written consent of CBRE, Inc. nor may this report or copies hereof be transmitted to third parties without said consent, which consent CBRE, Inc. reserves the right to deny. Exempt from this restriction is duplication for the internal use of the client-addressee and/or transmission to attorneys, accountants, or advisors of the client-addressee. Also exempt from this restriction is transmission of the report to any court, governmental authority, or regulatory agency having jurisdiction over the party/parties for whom this appraisal was prepared, provided that this report and/or its contents shall not be published, in whole or in part, in any public document without the express written consent of CBRE, Inc. which consent CBRE, Inc. reserves the right to deny. Finally, this report shall not be advertised to the public or otherwise used to induce a third party to purchase the property or to make a “sale” or “offer for sale” of any “security”, as such terms are defined and used in the Securities Act of 1933, as amended. Any third party, not covered by the exemptions herein, who may possess this report, is advised that they should rely on their own independently secured advice for any decision in connection with this property. CBRE, Inc. shall have no accountability or responsibility to any such third party.

15. Any value estimate provided in the report applies to the entire property, and any pro ration or division of the title into fractional interests will invalidate the value estimate, unless such pro ration or division of interests has been set forth in the report.

16. The distribution of the total valuation in this report between land and improvements applies only under the existing program of utilization. Component values for land and/or buildings are not intended to be used in conjunction with any other property or appraisal and are invalid if so used.

17. The maps, plats, sketches, graphs, photographs and exhibits included in this report are for illustration purposes only and are to be utilized only to assist in visualizing matters discussed within this report. Except as specifically stated, data relative to size or area of the subject and comparable properties has been obtained from sources deemed accurate and reliable. None of the exhibits are to be removed, reproduced, or used apart from this report.


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18. No opinion is intended to be expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. Values and opinions expressed presume that environmental and other governmental restrictions/conditions by applicable agencies have been met, including but not limited to seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, licenses, etc. No survey, engineering study or architectural analysis has been made known to CBRE, Inc. unless otherwise stated within the body of this report. If the Consultant has not been supplied with a termite inspection, survey or occupancy permit, no responsibility or representation is assumed or made for any costs associated with obtaining same or for any deficiencies discovered before or after they are obtained. No representation or warranty is made concerning obtaining these items. CBRE, Inc. assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance.

19. Acceptance and/or use of this report constitutes full acceptance of the Contingent and Limiting Conditions and special assumptions set forth in this report. It is the responsibility of the Client, or client’s designees, to read in full, comprehend and thus become aware of the aforementioned contingencies and limiting conditions. Neither the Appraiser nor CBRE, Inc. assumes responsibility for any situation arising out of the Client’s failure to become familiar with and understand the same. The Client is advised to retain experts in areas that fall outside the scope of the real estate appraisal/consulting profession if so desired.

20. CBRE, Inc. assumes that the subject analyzed herein will be under prudent and competent management and ownership; neither inefficient or super-efficient.

21. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined and considered in the appraisal report.

22. No survey of the boundaries of the property was undertaken. All areas and dimensions furnished are presumed to be correct. It is further assumed that no encroachments to the realty exist.

23. The Americans with Disabilities Act (ADA) became effective January 26, 1992. Notwithstanding any discussion of possible readily achievable barrier removal construction items in this report, CBRE, Inc. has not made a specific compliance survey and analysis of this property to determine whether it is in conformance with the various detailed requirements of the ADA. It is possible that a compliance survey of the property together with a detailed analysis of the requirements of the ADA could reveal that the property is not in compliance with one or more of the requirements of the ADA. If so, this fact could have a negative effect on the value estimated herein. Since CBRE, Inc. has no specific information relating to this issue, nor is CBRE, Inc. qualified to make such an assessment, the effect of any possible non-compliance with the requirements of the ADA was not considered in estimating the value of the subject.

24. Client shall not indemnify Appraiser or hold Appraiser harmless unless and only to the extent that the Client misrepresents, distorts, or provides incomplete or inaccurate appraisal results to others, which acts of the Client approximately result in damage to Appraiser. Notwithstanding the foregoing, Appraiser shall have no obligation under this Section with respect to any loss that is caused solely by the active negligence or willful misconduct of a Client and is not contributed to by any act or omission (including any failure to perform any duty imposed by law) by Appraiser. Client shall indemnify and hold Appraiser harmless from any claims, expenses, judgments or other items or costs arising as a result of the Client's failure or the failure of any of the Client's agents to provide a complete copy of the appraisal report to any third party. In the event of any litigation between the parties, the prevailing party to such litigation shall be entitled to recover, from the other, reasonable attorney fees and costs.

25. The report is for the sole use of the client; however, client may provide only complete, final copies of the appraisal report in its entirety (but not component parts) to third parties who shall review such reports in connection with loan underwriting or securitization efforts. Appraiser is not required to explain or testify as to appraisal results other than to respond to the client for routine and customary questions. Please note that our consent to allow an appraisal report prepared by CBRE, Inc. or portions of such report, to become part of or be referenced in any public offering, the granting of such consent will be at our sole discretion and, if given, will be on condition that we will be provided with an Indemnification Agreement and/or Non-Reliance letter, in a form and content satisfactory to us, by a party satisfactory to us. We do consent to your submission of the reports to rating agencies, loan participants or your auditors in its entirety (but not component parts) without the need to provide us with an Indemnification Agreement and/or Non-Reliance letter.

26. As part of the client’s requested scope of work, an estimate of insurable value is provided herein. CBRE, Inc. has followed traditional appraisal standards to develop a reasonable calculation based upon industry practices and industry accepted publications such as the Marshal Valuation Service handbook. The methodology employed is a derivation of the cost approach which is primarily used as an academic exercise to help support the market value estimate and therefore is not reliable for Insurable Value estimates. Actual construction costs and related estimates can vary greatly from this estimate.


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This analysis should not be relied upon to determine proper insurance coverage which can only be properly estimated by consultants considered experts in cost estimation and insurance underwriting. It is provided to aid the client/reader/user as part of their overall decision making process and no representations or warranties are made by CBRE, Inc. regarding the accuracy of this estimate and it is strongly recommend that other sources be utilized to develop any estimate of insurable value.

JACKSON SQUARE PROMENADE | ADDENDA

ADDENDA


ADDENDUM A

GLOSSARY OF TERMS


assessed value Assessed value applies in ad valorem taxation and refers to the value of a property according to the tax rolls. Assessed value may not conform to market value, but it is usually calculated in relation to a market value base. †

cash equivalency The procedure in which the sale prices of comparable properties sold with atypical financing are adjusted to reflect typical market terms.

contract rent The actual rental income specified in a lease. ‡

disposition value The most probable price which a specified interest in real property is likely to bring under all of the following conditions: 1) Consummation of a sale will occur within a limited future marketing period specified by the client; 2) The actual market conditions currently prevailing are those to which the appraised property interest is subject; 3) The buyer and seller is each acting prudently and knowledgeably; 4) The seller is under compulsion to sell; 5) The buyer is typically motivated; 6) Both parties are acting in what they consider their best interests; 7) An adequate marketing effort will be made in the limited time allowed for the completion of a sale; 8) Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 9) The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.‡

effective rent The rental rate net of financial concessions such as periods of no rent during the lease term; may be calculated on a discounted basis, reflecting the time value of money, or on a simple, straight-line basis. ‡

excess land In regard to an improved site, the land not needed to serve or support the existing improvement. In regard to a vacant site or a site considered as though vacant, the land not needed to accommodate the site’s primary highest and best use. Such land may be separated from the larger site and have its own highest and best use, or it may allow for future expansion of the existing or anticipated improvement. See also surplus land. ‡

extraordinary assumption An assumption directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions. 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. See also hypothetical condition. ‡

fee simple estate Absolute ownership unencumbered by any other interest or estate, subject only to the limitations

imposed by the governmental powers of taxation, eminent domain, police power, and escheat. ‡

floor area ratio (FAR) The relationship between the above-ground floor area of a building, as described by the building code, and the area of the plot on which it stands; in planning and zoning, often expressed as a decimal, e.g., a ratio of 2.0 indicates that the permissible floor area of a building is twice the total land area; also called building-to-land ratio. ‡

full service lease A lease in which rent covers all operating expenses. Typically, full service leases are combined with an expense stop, the expense level covered by the contract lease payment. Increases in expenses above the expense stop level are passed through to the tenant and are known as expense pass-throughs.

going concern value Going concern value is the value of a proven property operation. It includes the incremental value associated with the business concern, which is distinct from the value of the real estate only. Going concern value includes an intangible enhancement of the value of an operating business enterprise which is produced by the assemblage of the land, building, labor, equipment, and marketing operation. This process creates an economically viable business that is expected to continue. Going concern value refers to the total value of a property, including both real property and intangible personal property attributed to the business value. †

gross building area (GBA) The total floor area of a building, including below-grade space but excluding unenclosed areas, measured from the exterior of the walls. Gross building area for office buildings is computed by measuring to the outside finished surface of permanent outer building walls without any deductions. All enclosed floors of the building including basements, mechanical equipment floors, penthouses, and the like are included in the measurement. Parking spaces and parking garages are excluded. ‡

hypothetical condition That which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known 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. See also extraordinary assumption. ‡

investment value Investment value is the value of an investment to a particular investor based on his or her investment requirements. In contrast to market value, investment value is value to an individual, not value in the marketplace. Investment value reflects the subjective relationship between a particular investor and a given investment. When measured in dollars, investment value is the price an investor would pay for an investment in light of its perceived capacity to satisfy his or her desires,


needs, or investment goals. To estimate investment value, specific investment criteria must be known. Criteria to evaluate a real estate investment are not necessarily set down by the individual investor; they may be established by an expert on real estate and its value, that is, an appraiser. †

leased fee See leased fee estate

leased fee estate An ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the leased fee are specified by contract terms contained within the lease.‡

leasehold See leasehold estate

leasehold estate The interest held by the lessee (the tenant or renter) through a lease conveying the rights of use and occupancy for a stated term under certain conditions.‡

liquidation value The most probable price which a specified interest in real property is likely to bring under all of the following conditions: 1) Consummation of a sale will occur within a severely limited future marketing period specified by the client; 2) The actual market conditions currently prevailing are those to which the appraised property interest is subject; 3) The buyer is acting prudently and knowledgeably; 4) The seller is under extreme compulsion to sell; 5) The buyer is typically motivated; 6) The buyer is acting in what he or she considers his or her best interests; 7) A limited marketing effort and time will be allowed for the completion of a sale; 8) Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 9) The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. ‡

market rent The most probable rent that a property should bring in a competitive and open market reflecting all conditions and restrictions of the specified lease agreement including term, rental adjustment and revaluation, permitted uses, use restrictions, and expense obligations; the lessee and lessor each acting prudently and knowledgeably, and assuming consummation of a lease contract as of a specified date and the passing of the leasehold from lessor to lessee under conditions whereby: 1) lessee and lessor are typically motivated; 2) both parties are well informed or well advised, and acting in what they consider their best interests; 3) a reasonable time is allowed for exposure in the open market; 4) the rent payment is made in terms of cash in U.S. dollars and is expressed as an amount per time period consistent with the payment schedule of the lease contract; and 5) the rental amount represents the normal consideration for the

property leased unaffected by special fees or concessions granted by anyone associated with the transaction. ‡

market value Market value is one of the central concepts of the appraisal practice. Market value is differentiated from other types of value in that it is created by the collective patterns of the market. Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1) A reasonable time is allowed for exposure in the open market; 2) Both parties are well informed or well advised, and acting in what they consider their own best interests; 3) Buyer and seller are typically motivated; 4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.§

marketing period The time it takes an interest in real property to sell on the market subsequent to the date of an appraisal. ‡

net lease Lease in which all or some of the operating expenses are paid directly by the tenant. The landlord never takes possession of the expense payment. In a Triple Net Lease all operating expenses are the responsibility of the tenant, including property taxes, insurance, interior maintenance, and other miscellaneous expenses. However, management fees and exterior maintenance are often the responsibility of the lessor in a triple net lease. A modified net lease is one in which some expenses are paid separately by the tenant and some are included in the rent.

net rentable area (NRA) 1) The area on which rent is computed. 2) The Rentable Area of a floor shall be computed by measuring to the inside finished surface of the dominant portion of the permanent outer building walls, excluding any major vertical penetrations of the floor. No deductions shall be made for columns and projections necessary to the building. Include space such as mechanical room, janitorial room, restrooms, and lobby of the floor. *

occupancy rate The relationship or ratio between the income received from the rented units in a property and the income that would be received if all the units were occupied.‡

prospective value opinion A forecast of the value expected at a specified future date. A prospective value opinion is most frequently sought in connection with real estate projects that are proposed, under construction, or under conversion to a new us, or those that have not


achieved sellout or a stabilized level of long-term occupancy at the time the appraisal report is written. ‡

reasonable exposure time The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective opinion based upon an analysis of past events assuming a competitive and open market. ††

rent See full service lease net lease market rent contract, coupon, face, or nominal rent effective rent

shell rent The typical rent paid for retail, office, or industrial tenant space based on minimal “shell” interior finishes (called plain vanilla finish in some areas). Usually the landlord delivers the main building shell space or some minimum level of interior build-out, and the tenant completes the interior finish, which can include wall, ceiling, and floor finishes; mechanical systems, interior electric, and plumbing. Typically these are long-term leases with tenants paying all or most property expenses. ‡

surplus land Land not necessary to support the highest and best use of the existing improvement but, because of physical limitations, building placement, or neighborhood norms, cannot be sold off separately. Such land may or may not contribute positively to value and may or may not accommodate future expansion of an existing or anticipated improvement. See also excess land. ‡

usable area 1) The area actually used by individual tenants. 2) The Usable Area of an office building is computed by measuring to the finished surface of the office side of corridor and other permanent walls, to the center of partitions that separate the office from adjoining usable areas, and to the inside finished surface of the dominant portion of the permanent outer building walls. Excludes areas such as mechanical rooms, janitorial room, restrooms, lobby, and any major vertical penetrations of a multi-tenant floor. *

use value Use value is a concept based on the productivity of an economic good. Use value is the value a specific property has for a specific use. Use value focuses on the value the real estate contributes to the enterprise of which it is a part, without regard to the property’s highest and best use or the monetary amount that might be realized upon its sale. †

value indication An opinion of value derived through application of the appraisal process. ‡

† The Appraisal of Real Estate, Thirteenth Edition, Appraisal Institute, 2008.

‡ The Dictionary of Real Estate Appraisal, Fourth Edition, Appraisal Institute, 2002.

§ Office of Comptroller of the Currency (OCC), 12 CFR Part 34, Subpart C – Appraisals, 34.42 (g); Office of Thrift Supervision (OTS), 12 CFR 564.2 (g); Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002), 177-178. This is also compatible with the RTC, FDIC, FRS and NCUA definitions of market value as well as the example referenced in the Uniform Standards of Professional Appraisal Practice (USPAP).

* 2000 BOMA Experience Exchange Report, Income/Expense Analysis for Office Buildings (Building Owners and Managers Association, 2000)

†† Statement on Appraisal Standard No. 6, Appraisal Standards Board of The Appraisal Foundation, September 16, 1993, revised June 15, 2004.


ADDENDUM B

IMPROVED SALE DATA SHEETS

RETAIL SALE No. 1

2041 Douglas AveBrewton,AL 36426Escambia

Financial Data

N/A22%N/A

N/AN/AN/AN/AN/A

TotalN/A

Per SF

Analysis

Overall Cap. Rate (OAR):

Price Per S.F.N/AN/A %N/AN/A %$6.50

Comments

This comparable represents the sale of Douglas Square, a 114,891 square feet neighborhood shopping center located at thenorthwest corner of Douglas Avenue and Stadium Street in Brewton, AL. The center sold from Regions Bank. It features a 73,338square foot vacant former Wal-Mart box and a 41,553 square foot retail center. The center was 22% occupied at the time of sale.Goody's occupies 16,849 square feet. The center is also adjacent to a Piggly Wiggly Supermarket that is separately owned. Theproperty sold in June 2011 for $6.50 per square foot. The buyer purchases distressed assets around the southeast.

Parcel numbers include 30 15 05 16 2 005 005.001 and 30 15 05 16 2 005 005.004.

Douglas Square

N/AN/AN/AN/A

Buyers Underwriting Criteria.:

Source:Occupancy at Sale:Existing or ProForma Inc:

Potential Gross Income:Vacancy and Credit Loss:Effective Gross Income:Expenses and Reserves:

Net Operating Income:

Location:

County:

Location Data

Physical Data

Sale Data Sale

Market Square II, LLC c/o RegionsN/AN/A

Cash to Seller$746,792

$746,792$0$746,792

Buyer, Blue Ridge Capital, Steve Patrick 404.358.2888 (cell)

Neighborhood/CommunityType:

N/A6/2011

Transaction Type:

Sale Price:

Date:Marketing Time:Grantor:

Grantee:Document No.:

Req.Capital Cost:

Financing:Cash Eq.Price:

Adj. Sale Price:Verification:

30 15 05 16 2 005 005.001

N/AAtlas Ref:

Assessor's Parcel No:

Eff. Gross Multiplier (EGIM):

Oper. Expense Ratio (OER):Price Per Square Foot:

Land Area: 12.11 Acres

Projected IRR:

Excess Land:

Year Built:

Condition:Exterior Walls:

Parking:

Gross Leasable Area:

Anchor Tenant GLA:

Anchors:

GLA Purchased:

Vacant FormerGoody'sVacant FormerVacant Former Cato

Total GLA:

Local Tenant GLA:

N/A

1990

AverageMasonry

Surface

98,027 SF

73,338 SF16,849 SF4,200 SF

114,891 SF

3,640 SF

114,891 SF

16,864 SF

RETAIL SALE No. 2

1218 S Eufaula AvenueEufaula,AL 36027Barbour

Financial Data

N/A20%N/A

N/AN/AN/AN/A

$113,933

TotalN/A

Per SF

Analysis


Other8.56 %N/A %N/AN/A %$14.79

Comments

This comparable represents an 89,959-square foot neighborhood center located at 1218 South Eufaula Avenue in Eufaula. Theimprovements were constructed in 1990 and are situated on a 16.32-acre site. Currently, the property is 19.8% occupied and isconsidered to be in average overall condition. The former anchor tenant, Wal-Mart (71,159 SF), vacated the space prior to theirlease expiring in November 2010. The property sold for $1,330,500 or $14.79 PSF. The income in place at the time of sale was$113,933, indicating an 8.56% cap rate. Since the sale the buyer has leased the vacated Wal-Mart space to Marvins (33,000 sf) andBurkes (25,990 sf).

Eufaula Towne Center

N/AN/AN/A

$1.27





Location:

County:

Location Data

Physical Data

Sale Data Sale

N/ADHS II Ventures, LLCN/A

Not Available$1,330,500

$1,330,500$0$1,330,500

Appraisal


N/A6/2011

Transaction Type:

Sale Price:



Req.Capital Cost:



Multiple

N/AAtlas Ref:





Projected IRR:

Excess Land:

Year Built:


Parking:


Anchor Tenant GLA:

Anchors:

GLA Purchased:

Vacant (Former

Total GLA:

Local Tenant GLA:

N/A

1990

AverageCMU Block

Surface

N/A

89,959 SF

N/A

N/A

RETAIL SALE No. 3

5777 Terry RoadByram,MS 39272Hinds

Financial Data

N/A94%N/A

N/AN/AN/AN/A

$353,713

TotalN/A

Per SF

Analysis


Other11.97 %N/A %N/AN/A %$42.79

Comments

This comparable represents the sale of a 69,054 square foot neighborhood center located on Terry Road in Byram just out side ofJackson. The property sold for $2,955,000 or $42.79 per square foot in Novemeber 2010. The property was built in 1991 and was94% occupied at the date of sale. According to the brokers underwriting the cap rate used was 11.97% indicating a NOI of$353,713.

Market at Byram

N/AN/AN/A

$5.12





Location:

County:

Location Data

Physical Data

Sale Data Sale

Southgate Realty, LLCN/AN/A

Not Available$2,955,000

$2,955,000$0$2,955,000

Listing Broker


N/A11/2010

Transaction Type:

Sale Price:



Req.Capital Cost:



N/A

N/AAtlas Ref:





Projected IRR:

Excess Land:

Year Built:


Parking:


Anchor Tenant GLA:

GLA Purchased:

Total GLA:

Local Tenant GLA:

N/A

1991

AverageBrick

Surface

N/A

69,054 SF

N/A

N/A

RETAIL SALE No. 4

2448 Shorter AvenueRome,GA 30165Floyd

Financial Data

N/A10%N/A

N/AN/AN/AN/AN/A

TotalN/A

Per SF

Analysis


Price Per S.F.N/AN/A %N/AN/A %$17.21

Comments

This represents the acquisition of a 58,114-square foot neighborhood retail center located along Shorter Avenue in Rome. Theproperty was formerly anchored by Kroger and built in 1988. Randolph Oswalt (Jo Rand, LLC) acquired the property in July 2010for $1,000,000, or $17.21 per square foot. The broker confirmed an arms length transaction with no special financingconsiderations. The property was originally marketed for $1,700,000, resulting in a 70% SP to LP ratio.

Kroger West Shopping Center

N/AN/AN/AN/A





Location:

County:

Location Data

Physical Data

Sale Data Sale

Topvalco, IncJo Rand, LLC2235/17

Market Terms$1,000,000

$1,000,000$0$1,000,000

Costar, Broker - David Joyner, Colliers International, 404-574-1028


N/A7/2010

Transaction Type:

Sale Price:



Req.Capital Cost:



H13X214

N/AAtlas Ref:





Projected IRR:

Excess Land:

Year Built:


Parking:


Anchor Tenant GLA:

Anchors:

GLA Purchased:

Kroger (Vacant)

Total GLA:

Local Tenant GLA:

N/A

1988

Concrete Block, Bric

N/A

49,314 SF

49,314 SF

58,114 SF

58,114 SF

8,800 SF

RETAIL SALE No. 5

1619-1637 Forestdale BoulevardForestdale,AL 35214Jefferson

Financial Data

Broker90%Existing

N/AN/AN/AN/A

$154,000

TotalN/A

Per SF

Analysis


Direct Cap14.00 %N/A %N/AN/A %$22.72

Comments

This represents the sale of a 48,405 square foot neighborhood shopping center located at the southeast corner of Echo Drive andUS Highway 78 (Forestdale Boulevard) in Forestdale, Jefferson County, Alabama. The improvements were constructed in 1975and are situated on 4.32-acres. The center is anchored by Piggly Wiggly and Family Dollar. According to the broker, the centersold in February 2010 for $1,100,000, or $22.72 per square foot, indicating a 14% cap rate. The purchaser is a local, privateinvestor.

Village Hills Shopping Center

N/AN/AN/A

$3.18





Location:

County:

Location Data

Physical Data

Sale Data Sale

Flint Village Realty AssociatesHorwath Hospitality InvestmentN/A

Cash to Seller$1,100,000

$1,100,000$0$1,100,000

Broker - Southpace Properties - Rich Vanchina - 205-326-2222


N/A2/2010

Transaction Type:

Sale Price:



Req.Capital Cost:



22-07-3-011-003.000-RR-00

N/AAtlas Ref:





Projected IRR:

Excess Land:

Year Built:


Parking:


Anchor Tenant GLA:

Anchors:

GLA Purchased:

Piggly Wiggly

Total GLA:

Local Tenant GLA:

N/A

1975

AverageMasonry

175 spaces

34,720 SF

34,720 SF

48,405 SF

48,405 SF

13,685 SF


ADDENDUM C

RENT COMPARABLE DATA SHEETS

RETAIL COMPARABLE No. 1

Comments

This comparable represents a 66,000 square foot retail center located along Mcfadden Road in Jackson. The center is 75% occupiedand was built in 1960. Currently there are two open suites with the 14,000 square foot space going for $2.06 PSF and the 2,200square foot space going for $4.77 PSF on a triple net basis.

Apple Ridge Shopping Center

Physical Data

Lease Data

Un-Anchored Retail StripType:

2515 Mcfadden RoadJackson,MS 39204Hinds

Location:

County:

Location Data

0311-0005-000

N/AAtlas Ref:


Occupancy:75%

601-371-0944N/AN/ANeg.N/A

Neg.

1-5 Yrs2,000 SF

$2 - $5

NNN

11/2011

Typical Size:

Term:Base Rent PSF:Rent Escalations:Basis:Expense Pass-Thru:Free Rent (months):Tenant Improvement:Leasing Agent:Phone No.:Survey Date:

66,000 SF1960

AverageCMU Block

Gross Leaseable Area:Year Built:


Parking: Surface

75%Local:Overall:

Anchor Tenant GLA:

Total GLA:

Local Tenant GLA:

N/A

66,000 SF

66,000 SF


Comments

This comparable represents a strip retail center located along Ellis Avenue, just north of Highway 80 in Jackson. The center wasdeveloped in 1967 with three additional phases with the most recent completed around 1994. The center is un-anchored and has amix of national and local tenants. The center currently has around 24,000 square feet available, which is being marketed at $7.00per square foot on a NNN basis. Free rent is not currently offered but reportedly might be available during any build-out period, i.e.1-2 months. Tenant improvement allowances if given would be minimal.

Ellis Avenue Plaza

Physical Data

Lease Data


1335 Ellis AvenueJackson,MS 39204Hinds

Location:

County:

Location Data

N/A

N/AAtlas Ref:


Occupancy:70%

601-906-8999Brian EstesSee CommentsSee Comments$2.10

Negotiable

2 - 5 Years2,000 SF

$7.00

NNN

11/2011

Typical Size:


48,271 SF1967

AverageMasonry



Various Additions

Parking: Surface

70%Local:Overall:

Anchor Tenant GLA:

Anchors:Family Dollar

Total GLA:

Local Tenant GLA:

N/A

48,271 SF

48,271 SF


Comments

This comparable represents a strip retail center located along Highway 18 at the entrance to a Wal-MArt and across the street fromLowes in southwest Jackson. The center is currently 45% occupied. The vacant space is being marketed for $15.00 per square footon a NNN basis. The broker indicated that free rent of 2-3 months would be considered as would tenant improvement allowances.

Metro Crossing

Physical Data

Lease Data


4820 Highway 18Jackson,MS 39209Hinds

Location:

County:

Location Data

N/A

N/AAtlas Ref:


Occupancy:45%

504-523-4481Bradley McCoySee CommentsSee Comments$4.10

Negotiable

3 - 5 Years2,400 SF

$15.00

NNN

08/2011

Typical Size:


13,333 SFN/A

AverageMasonry



Parking: 80

45%Local:Overall:

Anchor Tenant GLA:

Total GLA:

Local Tenant GLA:

N/A

13,333 SF

13,333 SF


Comments

This neighborhood center has good access, visibility and exposure. The center was developed in 1973 and has average overallmarket appeal. The center is anchored by Piggly Wiggly. The leasing agent/owner indicated the rental rates are higher for smallerspaces than larger spaces. Mr. Lambert reported the Dollar General is currently paying about $6.00 per square foot and the smallershop space averages around $10.00 per square foot. The leases vary from gross to NNN, where the tenant pays their pro rata shareof taxes and insurance. Expenses were not estimated. Free rent is not currently offered but would be negotiable and tenantimprovement allowances are not offered. Rental rate escalations are negotiable. The owner indicates that the rents have not changedover the past few years and that the center has maintained 100% occupancy.

McDowell Square Shopping Center

Physical Data

Lease Data


SS of McDowell at Sucrest DriveJackson,MS 39212Hinds

Location:

County:

Location Data

0839-0943-000

N/AAtlas Ref:


Occupancy:100%

601-954-8873Rick BennettNoneNoneBuilt into rent

Negotiable

3 - 5 Years1,500 SF

$10.00

NNN and Gross

11/2011

Typical Size:


82,371 SF1973

AverageMasonry



Parking: Surface

100%Local:Overall:

Anchor Tenant GLA:

Anchors:Piggly WigglyDollar General

Total GLA:

Local Tenant GLA:

N/A

82,371 SF

82,371 SF


Comments

This comparable represents a 94,562 square foot neighborhood center located on the west side of Terry Road in Jackson. Theproperty was built in 1959 and is anchored by Roses and Freds. The center is currently 100% leased. According to the propertymanager, because they are 100% leased they did not have an asking rent; however, she did say their effective rents are between $3and $6 PSF. The anchor tenants are on a triple net basis with $1.21 pass throughs plus percentage rent based on sales. The smallerspace is on a gross basis. The majority of the leases expire in 2014.

Southgate Shopping Center

Physical Data

Lease Data


2885 Terry RoadJackson,MSHinds

Location:

County:

Location Data

0614-0001-003

N/AAtlas Ref:


Occupancy:100%

210-349-3636Spigel Properties - JanetteNeg.Neg.$1.21

Neg.

3-5 YrsN/A

$3 - $5

Gross & NNN

11/2011

Typical Size:


94,562 SF1959

AverageConcrete Block



Parking: Surface

100%Local:Overall:

Anchor Tenant GLA:

Anchors:FredsRose

Total GLA:

Local Tenant GLA:

84,000 SF

54,000 SF30,000 SF

94,562 SF

10,562 SF


ADDENDUM D

QUALIFICATIONS

QUALIFICATIONS OF

DECKER D. DICKSON Vice President

CB Richard Ellis, Inc. – Appraisal Services

3280 Peachtree Road, Suite 1400 Atlanta, Georgia 30305

(404) 812-5015 Telephone (404) 812-5051 Facsimile [email protected]

EDUCATIONAL B.B.A., Real Estate – Georgia State University Appraisal Institute Course 410: Standards of Professional Practice, Part A (USPAP) Course 420: Standards of Professional Practice, Part B (USPAP) Course 310: Basic Income Capitalization Course 320: General Applications Course 510: Advanced Income Capitalization Course 550: Advanced Applications

LICENSE(S)/CERTIFICATION(S) Certified General Real Property Appraiser, Georgia – Certification Number 241763 Certified General Real Property Appraiser, Alabama – Certification Number G00887 Certified General Real Property Appraiser, Tennessee – Certification Number 00004136 Certified General Real Property Appraiser, South Carolina – Certification Number 6069

EMPLOYMENT EXPERIENCE

1998 – Present CB Richard Ellis, Inc. Vice President

Atlanta, Georgia

QUALIFICATIONS OF

RONALD A. NEYHART, MAI Senior Managing Director

CBRE, Inc. – Valuation & Advisory Services

3280 Peachtree Road, Suite 1100 Atlanta, Georgia 30305

(404) 812-5020 (404) 812-5051 FAX

EDUCATIONAL B.S. Finance and Real Estate - Florida State University Appraisal Institute

Course 1A-1, 1A-2, 1B-A, 1B-B, 2-1, 2-2, SPP

LICENSE(S)/CERTIFICATION(S) Georgia Real Estate Appraisal Board – Certified General Real Estate Appraiser - C000490 Tennessee Real Estate Commission – Certified General Real Estate Appraiser - 2013 North Carolina Real Estate Appraisal Board – Certified General Real Estate Appraiser - A4051 Alabama Real Estate Appraisal Board – Certified General Real Estate Appraiser - G00484 South Carolina Real Estate Appraisers Board – Certified General Real Estate Appraiser -

CG3429 Mississippi Real Estate Appraisal Board – Certified General Real Estate Appraiser - GA-829 Florida Real Estate Appraisal Board – Certified General Real Estate Appraiser - RZ2581 Kentucky Real Estate Appraisal Board – Certified General Real Estate Appraiser - 002780 Ohio Real Estate Appraisal Board – Certified General Real Estate Appraiser - 2002018920

PROFESSIONAL

Appraisal Institute

Designated Member, (MAI), Certification No. 8484

EMPLOYMENT EXPERIENCE 1979-1982 American Appraisal Associates, Staff Appraiser Atlanta, Georgia 1982-1984 Johnson, Lane, Space, Smith & Co., Account

Executive Atlanta, Georgia

1984 - 1992 CB Commercial Real Estate Group, Inc., Senior Real Estate Analyst

Atlanta, Georgia

1992-Present Senior Managing Director CBRE, Inc. Appraisal Services

Atlanta, Georgia

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