The shopping center is assessed at $2,100,000 with an annual tax rate of $1.20 per $100 of assessed value. This tax amount should increase annually at 2% Management Fees are 3% of collected revenue (does not include CAM reimbursements) Leasing commissions for the new space (currently vacant) will be 3% of total rent revenue, paid at lease start date Vacancy/credit loss is estimated at 2% of total collected revenue throughout the projection period (does not include CAM reimbursement income) Question No. 1 Construct a Five (5) year Income/Expense statement with year 1 beginning at January 1, 2018 on an unlevered basis. Question No. 2 Loan 1,500,000 Interest Rate 4.25% Amortization Period 20 years What is the annual Payment? What is the principal balance at the end of 5 years? Question NO. 3 List the leveraged net cash flow throughout the five years Question 4 - Assuming an appropriate discount of 12% on unleveraged cash flows, and a reversion cap rate of 9.5%, what would be an appropriate purchase price for the property? Question 5 - Using the same reversion as above, what is the IRR% on a leveraged basis?

Shopping Center A small, neighborhood retail strip center Purchasing January 1, 2018 Square Footage 30,000 Anchor Tenant Food Utopia 20,000 SF Triple Net Lease (tenant pays all expenses, 10 year term, $6.00/SF per year Base Rent Increases 2% per year. Also pays Percentage Rent in the amount of 5% of sales over $1,000,000 Forecasted sales for 2018 are $1,100,000, and this increase 2% per year Lease states tenant pays $1.00/SF CAM expenses, capped at 2% increase per year Excellent credit tenant Other Tenants Little Antonios 3,000 SF Triple Net Lease 5 year term began 1/1/2018 Rent $10.00/SF per year, flat for 5 years Pays prorate share of CAM Expenses Local tenant Jennys Curves 5,000 SF Triple Net Lease 7 year lease Starts January 1, 2018 $12.00/SF per year, Flat for 3 years, increases 6% in Year 4, and level for Years 5, 6, 7 Pays prorate share of Cam expenses Classy Tattoo Space 2,000 SF Currently negotiating lease assume that this lease will start on January 1, 2019 for a 5year term Landlord will pay $10,000 in Tenant Improvements Base Rent will be $8.00/SF with 3 free months rent in Year 1 Lease will increase by $1.00/SF per year throughout the five year term Triplenet lease, but tenant does NOT pay any CAM reimbursements Expenses CAM expenses include all common area expenses including maintenance, common area utilities, parking area cleaning, landscaping, etc. along with property taxes, fire hazard property insurance. CAM does not include Management Fees. CAM maintenance is estimated at $1.75/SF per Year, not including property taxes, increasing at 2% per year