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HomeMy WebLinkAboutBack-Up Documents - MFP Appraisals CombinedKTR REAL ESTATE ADVISORS 551 Madison Avenue, New York, New York 10022 Tel: 212.906.9400 Fax: 212.935.5935 Independent Review of Appraisal Reports Prepared by Deloitte Transactions and Business Analytics LLP and Houlihan Lokey Pertaining to Melreese Country Club 1400 NW 37th Avenue Miami, Florida 33125 11101.11.4 KTR REAL ESTATE ADVISORS February 25, 2021 Florentino L. Gonzalez, Esq. Shutts & Bowen LLP 200 South Biscayne Boulevard, Suite 400 Miami, Florida 33131 Re: Deloitte Transactions and Business Analytics LLP and Houlihan Lokey Appraisal Reports of Miami Freedom Park LLC Melreese Country Club 1400 NW 37th Avenue Miami, Florida 33125 KTR No.: 19-1-00137 Dear Mr. Gonzalez: In accordance with our agreement dated October 16, 2019, KTR Real Estate Advisors LLC ("KTR") has performed independent Appraisal Reviews of the above -referenced appraisal reports. The appraisal reports were prepared by Nathan Florio, CRE, MAI, MRICS of Deloitte Transactions and Business Analytics LLP (the "Deloitte") with a valuation date of October 23, 2019 (the "Deloitte Appraisal") and Michael P. Hedden, CRE, MAI, FRICS of Houlihan Lokey ("Houlihan Lokey") with a valuation date of October 24, 2019 (the "Houlihan Lokey Appraisal"). The Deloitte Appraisal is dated September 21, 2020. The Houlihan Lokey Appraisal does not state the date of the report; however, the electronic document reviewed indicates that the date modified was September 24, 2020, which is assumed to be reflect the date of the report. Mr. Florio and Mr. Hedden are collectively referred to herein as the "Primary Appraisers" and their appraisal reports as the "Primary Appraisals." The purpose of this review is to provide 1) an opinion as to the completeness of the Primary Appraisals; 2) an opinion as to the adequacy and relevance of the data utilized in the Primary Appraisals and 3) an opinion as to the appropriateness of the appraisal methods and techniques used. The scope of work does not include the development of an opinion of value by the Reviewer; rather, this report sets forth the Reviewer's opinion as to which of the Primary Appraisals provides the most reliable value conclusion and selects the most appropriate rental value (the "Final Award") within the range established by the Primary Appraisals. The Final Award is not intended to represent or communicate the Reviewer's opinion of the fair market rent if the Reviewer had performed an appraisal. Furthermore, the review process did not include 1) an inspection of the subject, 2) an inspection of the market data, 3) independent research or verification of data supplied by the appraisal within the report. Factual information provided is assumed to be correct unless indicated in this review. KTR requested, but was not provided, the Primary Appraisers' cash flow models (Argus, MS Excel, etc.). As such, a review of the input assumptions and verification of mathematical accuracy of the cash flows was not possible (See extraordinary assumptions on page 12 of this review report). The scope of this review assignment included the communication of questions and potential deficiencies relating to the Primary Appraisals and requesting responses related thereto from the Primary Appraisers (the "Initial Review Letters"). The Reviewer transmitted the Initial Review Letters to the Primary Appraisers on November 12, 2020. On January 27, 2021 and February 6, 2021, the Reviewer received confirmation that the Primary Appraisers would not respond to the Initial Review Letters. Absent responses from the Primary Appraisers and/or revisions to the Primary Appraisals, this review has been conducted subject to 551 Madison Avenue, New York, NY 10022 TEL 212.906.9400 # #ax 212.935.5935 KTR REAL ESTATE ADVISORS Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 2 clarification ofthe issues presented in the Initial Review Letters. Copies ofthe Deloitte and Houlihan Lokey Initial Review Letters are attached as an addenda to this Review Report. This review investigated the factors which support the rental value conclusions of the Primary Appraisals in light of the development requirements set forth in Resolution R-18-0309 dated July 18, 2018, providing for a potential 99-year lease, with an initial 39-year term and two 30-year options to renew. It is understood that a preliminary rental value estimate has been proffered at the greater of the fair market rental value determined by the Primary Appraisers or 5% ofthe rent to be derived from the various commercial elements of the property, but not less than $3,577,365 per annum. The Primary Appraisals provide opinions of value under two appraisal premises, "As If Remediated" and "As Is" (referred to in the Houlihan Lokey Appraisal as "As Unimpaired by Environmental Remediation" and "As Impaired by Environmental Remediation", respectively). It is noted in the Primary Appraisals that the Subject Property is subject to a "no net loss" provision for public park land. The Primary Appraisals indicate that the scope of the work excluded consideration of any contributions or costs for the creation and/or maintenance of a city park pursuant to the "no let loss of park space" provisions of the City of Miami Municipal Code. The Appraisal Review is intended for use by Shutts & Bowen LLP and its client, the City of Miami, (collectively the "Client") in conjunction with the fair market rent determination that will be paid by the prospective ground lease tenant, Miami Freedom Park LLC, for the subject property, subject to a four -fifths favorable vote by the Miami City Council. The subject of the Appraisal Review is approximately 73.5 acres of a 131± acre site, commonly known as the Melreese Country Club, located at 1400 Northwest 37t" Avenue, Miami, Florida 33125. The overall site is identified as folio numbers 01-3121-000-0080 and 01-3132-000-0090 by the Miami -Dade County Assessor. According to the Primary Appraisals, the subject property is proposed for development with a 25,000-seat soccer stadium, 600,000 square feet of retail and entertainment space, 400,000 square feet of office (Tech Hub) space, two hotels (full service and limited service) totaling 750 rooms, and surface parking. The interest appraised in the Primary Appraisals is identified as the Fee Simple Estate. The Deloitte Appraisal indicates that "market rent for the Property based on a leased fee interest" has been estimated. This technical distinction does not impact the assignment results. This Appraisal Review Report was prepared in compliance with the USPAP Standards 3 and 4 as set forth by the Appraisal Foundation and in accordance with the Code of Professional Ethics and Standards of Professional Practice of the Appraisal. The following table summarizes the value conclusions reported within each of the Primary Appraisals: Company Houlihan Lokey Deloitte Date of Value Date of Inspection Appraiser Florida License Interest Appraised Concluded Market Value - As Is Concluded Market Value - As if remediated Concluded Fair Market Rent - As Is Concluded Fair Market Rent - As if remediated Ground Rent Percentage of Land Value October 24, 2019 October 24, 2019 Michael P. Hedden, MAI, DRE, FRICS RZ3081 Fee Simple/Market (Ground) Rent S38,000,000 S60,000,000 S2,280,000 S3,600,000 6.00% October 23, 2019 October 23, 2019 Nathan Florio, CRE, MAI, MRICS RZ4032 Fee Simple/Market (Ground) Rent S48,900,000 S65,900,000 S3,178,500 S4,283,500 6.50% jKTR Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 3 REAL ESTATE ADVISORS REVIEW OF DELOITTE APPRAISAL The Deloitte Appraisal incorporates and is based on the following Extraordinary Assumptions: • "As per discussions with the Client and based on our understanding the Miami Comprehensive Neighborhood Plan designates the Leased Premises as Recreation and Zoning Ordinance 13114 (i.e. Miami 21) designates the Lease Premises as Civic Space. Development thresholds include a maximum Lot Coverage of 25% of the net lot area of the CS -zoned property. Approximately 10.5 acres of the Leased Premises will seek to be rezoned to accommodate for the new MLS Soccer Stadium, Hotel and Office Uses which will require a zoning application process review by the City of Miami and State of Florida for the changes to be considered at various public hearing. The remaining acreage of the Leased Premises will remain with the Recreation and Civic Space designations. • There will be an extraordinary assumption that cost estimates supplied or provided by the City will not be independently reviewed, audited or corroborated by the Advisor. In addition, the analysis will not consider the $20,000,000 contribution for the maintenance of a 57.6-acre public park or the $5,000,000 contribution for the Baywalk-Riverwalk Project. • In addition, for Value B (as outlined below) there is an extraordinary assumption that cost estimates supplied by the City will not be independently reviewed, audited or corroborated by the Advisor. In addition, it is outside the scope of this analysis to consider any proposed contributions for the creation and/or maintenance of a city park pursuant to the "no net loss of park space" provisions of the City of Miami Municipal Code." The Deloitte Appraisal incorporates and is based on the following Hypothetical Conditions: • "This appraisal is based on the hypothetical condition that the City of Miami can achieve a land use amendment and rezoning of the site to Special Area Plan ("SAP") necessary to develop the subject site to a higher density, mixed -use, and its highest and best use. If not, our analysis and value conclusions will be impacted, and we reserve the right to amend this report entirely. • As per discussions with the Client, and based on our understanding, pursuant to Corrective Action Plans filed with Miami Dade County DERM dated April 16, 2014, by SCS Engineers on behalf of the City of Miami, the City discovered buried incinerator on the Subject Property during a 2005 Limited Phase II soil Assessment. In order to permit the construction of the New Park and allow for the development of the Leased Premises, the Subject Property will require environmental remediation. Pursuant to the terms of the Lease Agreement, MFP will be responsible for the cost of the remediation necessary to obtain required approvals to allow public access to New Park and to permit for development of the Leased Premises. • As it is known that the Property contains an environmental substance and/or material that requires remediation prior to or during development, the market value of the Property for purposes of calculating Value A (as set forth below) will be considered on an "as if remediated" (ie "clean" or "unimpaired") basis and, as such, the Value A estimate will exclude any cost or time considerations relative to the remediation of the Property as of the Valuation Date." References to "(as set forth below)" and ("as outlined below") within the above excerpts from the Deloitte Appraisal report do not correspond to specific text set forth or outlined below. It is assumed that these parenthetical statements are referencing the "As Is" and "As If Remediated" appraisal premises defined elsewhere in the report. JKTR REAL ESTATE ADVISORS Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 4 Based on my review of the Deloitte Appraisal report, the Reviewer finds the Appraisal Report to be complete and in general compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) as set forth by the Appraisal Foundation, with the following exceptions: • The Deloitte Appraisal is identified as a "restricted report" in the transmittal letter and on page 7 of the report. This appears to be a typographical error as it is contrary to the disclosure in the Report Type section on pg. 5 of the report, which identifies the report format as being "intended to comply with the requirements of an Appraisal Report." A restricted report format is not consistent with the intended use and users of the report. • The Deloitte Appraisal incorporates Extraordinary Assumptions and Hypothetical Conditions on pages 7 and 8 that need clarification and require an appropriate warning to the reader stating that "their use might have affected the assignment results." • The Deloitte Appraisal appears to misclassify certain extraordinary assumptions and hypothetical conditions. • See Reporting, Assignment Elements and Conditions section of Deloitte Initial Review Letter in Addenda of this appraisal review report. Based on my review of the Deloitte Appraisal report, the Reviewer is of the opinion that the data utilized in the Appraisal Report is relevant and adequately analyzed to support the "As Is" and "As If Remediated" Fair Market Rental Value as of October 23, 2019, subject to clarification of the following areas of concern: • As described within in the Analysis, Assumptions and Conclusions section of the Deloitte Initial Review Letter, in light of the data presented in the Deloitte Appraisal, the rationale for certain assumptions and conclusions processed in the Income Capitalization Approach (Land Residual) is not adequately presented and requires clarification. See pages 2-6 of the Deloitte Initial Review Letter for details. • The Income Capitalization Approach (Land Residual) failed to incorporate projected income and development costs (hard, soft and entrepreneurial incentive) from the Stadium component of the proposed development. As the Stadium is an income -generating, specialty use property, the exclusion of this component in the derivation of the residual land value and fair market rental value is a significant concern. The Deloitte Appraisal presents an alternative approach under which the residual land value "for the land allocated to the mixed -use development (63 acres)" is estimated and "a 30% discount to the land designated for the stadium" is applied to the remaining 10.5 acres. The rationale for and derivation of the 30% discount (presented in the Stadium Rate of Return Discussion) is not adequately explained within the Deloitte Appraisal. • The Sales Comparison Approach presents sales with materially different zoning. While adjustments are processed "for less intense uses", no adjustments were processed for the disparate zoning. Considering the restrictions and requirements of the SAP and the height limitations associated with the subject's proximity to Miami International Airport, the absence of adjustments for differences in Zoning is not adequately explained within the Appraisal Report. Furthermore, the analysis on pages 94 and 130 conclude to a 30% discount to the land designated for the stadium. While this adjustment was processed in the Income Approach, no corresponding adjustment was discussed or applied in the Sales Comparison Approach. The absence of adjustment for this factor in the Sales Comparison Approach appears to represent a material inconsistency in the analysis of the data presented within the Deloitte Appraisal. jKTR REAL ESTATE ADVISORS Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 5 • The ground rent capitalization rate analysis, utilized to develop an opinion of the Fair Market Rent relative to the concluded land value, presents an Investor Survey sourced from RealtyRates.com involving ground leases for various property types. Although minimum, maximum and average capitalization rates are reported within the survey, the limited analysis presented focuses on the average capitalization rates for Lodging, Office and Retail land leases. There appears to be no consideration for the Stadium component of this mixed -use development in the rate selection. Although the Deloitte Appraisal indicates that "a portion of subject site is a stadium which will likely achieve a lower internal rate of return for the developer than a purely commercial development," the concluded capitalization rate is in line with the average capitalization rate of for office ground leases presented in the RealtyRates.com survey. Additionally, the Deloitte Appraisal does not address the relationship between ground lease term (years) and capitalization rates. See the Land Market Rent section on page 7 of the Deloitte Initial Review Letter for additional details of the areas of concern that require clarification. Based on my review of the Deloitte Appraisal report, the Reviewer is of the opinion that the appraisal methods and techniques used in the Appraisal Report are appropriately and adequately employed support to the "As Is" and "As If Remediated" Fair Market Rental Value as of October 23, 2019, subject to clarification of the following areas of concern: • The final reconciliation of value "gave primary weight to the income approach, as the Property is a unique piece of land" and concluded to the value indicated by the Income Approach. As previously noted, the Income Capitalization Approach (Land Residual) excluded the income attributable to and construction costs associated with the most unique component of this mixed -use development, the Stadium. Although the Deloitte Appraisal presents an alternative approach to valuing the Stadium land, the methods and techniques employed are not sufficiently explained. As such, the Reviewer has concerns about reliability of the conclusion derived via the Income Approach, which has been given primary weight in the Deloitte Appraisal. • The Deloitte Initial Review Letter details other areas of concern that require clarification. In addition, the Reviewer has the following observations that require clarification by the Appraiser: • The Deloitte Appraisal is silent on the commencement of rent payments relative to the entitlement period and provides no discussion of ground rent abatements. • The proposed lease will have an initial term of 39 years and two (2) options to extend the Term, each for thirty years. The option rent provisions are not discussed within the Deloitte Appraisal. The renewal provisions of the two options should be presented, analyzed and considered in the determination of the ground rent capitalization rate (pp.143-144) appropriate to the fair market rent conclusions for Scenario A and B. • The Deloitte Appraisal presents no discussion of market rent increases during the initial term and two option periods. UNIONIENN KTR REAL ESTATE ADVISORS REVIEW OF HOULIHAN LOKEY APPRAISAL Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 6 The Houlihan Lokey Appraisal incorporates and is based on the following Extraordinary Assumptions: • "There are extraordinary assumptions in our appraisal. Specifically, construction timeline estimates supplied or provided by the City or MFP were not independently verified, audited or corroborated by the appraiser. The $16.5 million cost to remediate the environmental impairment has been provided by the client. A one-year remediation timeline has been assumed. In addition, the appraisal does not consider the $20,000,000 contribution for the maintenance of a 58-acre public park, the $5,000,000 contribution for the Baywalk-Riverwalk Project, costs associated with the No -Net -Loss policy or extraordinary off -site development costs." The Houlihan Lokey Appraisal incorporates and is based on the following Hypothetical Conditions: • "For the purpose of our analysis, we have assumed in Scenarios A and B that the Property has receive all necessary government approvals permitting immediate development of the Subject Property consistent with the proposed plan. • It is recognized that the Subject Property contains a substance and/or hazardous environmental material that will need to be removed from the site during development. The "As -If Clean Market Value" of the Subject Property was developed under the hypothetical condition that the property is not contaminated and therefore, excludes any cost and the time relative to remediation of the Subject Property." Reviewer's Note: The Ground Lease and Master Development Agreement cited on page 19 states that the "Fair Market Value will be based on the highest and best use of the Demised Property taking into consideration the actual cost of environmental remediation for the Demised Property, the site development cost for the Public Park Parcel, and such other impositions and limitations on the use of the Demised Property" [emphasis added] consistent with USPAP. The Houlihan Lokey Appraisal does not explain how "the site development cost for the Public Park Parcel, and such other impositions and limitations on the use of the Demised Property" have been "taken into consideration" in the determination of the Fair Market Value (rent). The cited definition appears to be contrary to the Extraordinary Assumption on page 13. Based on my review of the Houlihan Lokey Appraisal report, the Reviewer finds the Appraisal Report to be complete and in general compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) as set forth by the Appraisal Foundation, with the following exceptions: • Pursuant to USPAP Standards Rule 2-2(a)(vi) an Appraisal Report must "state the effective date of the appraisal and the date of the report". The Houlihan Lokey Appraisal report does not state the date of the report. • In general, the reporting level of the Appraisal Report tends to present the minimum requirements for this report format and presents summaries of the analysis rather than detailed analysis that might be more appropriate for the intended use. Cognizant of the intended use and users, the Appraisal Report would benefit from more detailed analysis. See Item 5 of the Reporting, Assignment Elements and Conditions section of the Houlihan Lokey Initial Review Letter in the Addenda of this appraisal review report for critical areas that would benefit from more detailed analysis. jKTR REAL ESTATE ADVISORS Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 7 • The Houlihan Lokey Appraisal incorporates Extraordinary Assumptions and Hypothetical Conditions on page 13 that need clarification and require an appropriate warning to the reader stating that "their use might have affected the assignment results." • See Reporting, Assignment Elements and Conditions section of the Houlihan Lokey Initial Review Letter in the Addenda of this appraisal review report. Based on my review of the Houlihan Lokey Appraisal report, the Reviewer is of the opinion that the data utilized in the Appraisal Report is relevant and adequately analyzed to support the "As Is" and "As -If Clean" Fair Market Rental Value as of October 24, 2019, subject to clarification of the following areas of concern: • As described within in the Analysis, Assumptions and Conclusions section of the Deloitte Initial Review Letter, in light of the data presented in the Houlihan Lokey Appraisal, the rationale for certain assumptions and conclusions processed in the Income Capitalization Approach (Land Residual) is not adequately presented and requires clarification. See pages 4-6 of the Houlihan Lokey Initial Review Letter for details. • The Sales Comparison Approach presents sales with materially different zoning. No adjustments were processed for the disparate zoning. Considering the restrictions and requirements of the SAP, as well as the height limitations associated with the subject's proximity to Miami International Airport, the absence of adjustments for differences in Zoning is not adequately explained within the Appraisal Report and appears to represent a material inconsistency in the analysis of the data presented within the Houlihan Lokey Appraisal. • The Sales Comparison Approach excludes the sale of 4400-02 NW 87th Ave Doral FL ($17.12 per square foot). This transaction represents the sale of a golf course proposed for mixed -use redevelopment and appears to be a relevant sale transaction. While this sale was analyzed in the Deloitte Appraisal, no explanation has been provided why this sale was not considered in the Houlihan Lokey Appraisal. • The Rent Multiplier (ground rent capitalization rate) analysis on page 47 fails to adequately explain the derivation of the concluded rent multiplier. The concluded rent multiplier is derived from the analysis of the yields of 30-Year T-Notes and High Yield Bonds, as well as Overall Cap Rate Averages extracted from the 3Q19 PwC Real Estate Investor Survey for the Southeast Florida Office Market, the National Strip Shopping Center Market, the National Full -Service and Limited - Service Lodging Segments, and the reported cap rate of a Triple Net Lease transaction involving a CVS store in West Palm Beach, Florida. The Appraisal Report does not provide any rent multipliers for ground lease transactions. • There appears to be no consideration for the Stadium component of this mixed -use development in the rate selection. The concluded Rent Multiplier of 6.0% used to establish the appraiser's opinion of the Fair Market Rent is equal to the Stadium Percentage Rent Multiplier derived on page 40. Since, as stated on page 40, "MFP's developer will have a higher risk profile in comparison to a municipality and slightly lower that [sic] high yield bonds," the rationale for concluding to the same rate for the less risky ground lease position requires more detailed explanation. • Lastly, the Houlihan Lokey Appraisal does not address the relationship between ground lease term (years) and rent multipliers (capitalization rates). See the Rent Multiplier section on page 6 of the Houlihan Lokey Initial Review Letter for additional details of the areas of concern that require clarification. JKTR REAL ESTATE ADVISORS Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 8 Based on my review of the Houlihan Lokey Appraisal report, the Reviewer is of the opinion that the appraisal methods and techniques used in the Appraisal Report are appropriately and adequately employed support the "As Is" and "As If Clean" Fair Market Rental Value as of October 24, 2019, subject to clarification of the following areas of concern: • The "As -If Clean" Market Value conclusion derived via the Sales Comparison Approach ($64,000,000) is 16.4% higher than the conclusion of the Land Residual Approach ($55,000,000). The residual value derived from a Development Valuation Model represents the highest price a developer can pay for the land under the assumptions processed to generate the specified, that is desired, yield rate. In reconciling to a land value above the Land Residual, the resultant yield would be below the 8.5% market -derived discount rate concluded to on page 45 of the Appraisal Report. Therefore, it appears that the concluded land value of $60,000,000 would not provide an adequate return based on the analysis presented in the Appraisal Report. As such, the Reviewer has concerns about reliability of the final reconciliation of value in the Houlihan Lokey Appraisal. • The Houlihan Lokey Review Letter details other areas of concern that require clarification. In addition, the Reviewer has the following observations that require clarification by the Appraiser: • The Houlihan Lokey Appraisal is silent on the commencement of rent payments relative to the entitlement period and provides no discussion of ground rent abatements. • The proposed lease will have an initial term of 39 years and two (2) options to extend the Term, each for thirty years. The option rent provisions are not discussed within the Houlihan Lokey Appraisal. The renewal provisions of the two options should be presented, analyzed and considered in the determination of the rent multiplier (page 47) appropriate to the fair market rent conclusions for Scenario A and B. • The Houlihan Lokey Appraisal presents no discussion of market rent increases during the initial term and two option periods. FINAL AWARD The scope of this review assignment included communication of questions and potential deficiencies relating to the Primary Appraisals (the "Initial Review Letters"). The Reviewer transmitted the Initial Review Letters to the Primary Appraisers on November 12, 2020 requesting responses that would be considered in the appraisal review. On January 27, 2021 and February 6, 2021, the Reviewer received confirmation that the Primary Appraisers would not respond to the Initial Review Letters. Absent responses from the Primary Appraisers and/or revisions to the Primary Appraisals, this review has been conducted subject to clarification of the issues presented in the Initial Review Letters. As noted within this appraisal review and the Initial Review Letters, there are significant concerns about the comparability of the land sales analyzed and the adequacy of adjustments processed within the Primary Appraisals. Absent clarification of these concerns, it is the Reviewer's opinion that minimal weight should be afforded to the conclusions derived via the Sales Comparison Approach. The "As If Remediated" residual land value conclusion ($65,900,000) derived via the Income Capitalization Approach in the Deloitte Appraisal is approximately 20% higher than the "As -If Clean" residual land value ($55,000,000) of the Houlihan Lokey Appraisal. This difference may be attributable to the exclusion of Stadium income and development costs from the discounted cash flow analysis integral to Deloitte's Income Capitalization Approach. Although the Deloitte Appraisal presents an alternative approach to valuing the 10.5 KTR REAL ESTATE ADVISORS Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 9 acres intended for development of the stadium, the rationale for and appraisal methodology applied in the alternative approach is not adequately explained within the Deloitte Appraisal. By virtue of incorporating projected income and development costs for the proposed stadium in the Income Capitalization Approach, the Houlihan Lokey Land Residual is deemed by the Reviewer to have greater reliability than that of the Deloitte Appraisal. Houlihan Lokey's reconciled "As -If Clean" market value represents a slightly higher weighting ofthe value indication derived via the Sales Comparison Approach than the Income Capitalization Approach. In reconciling to a land value above the Income Capitalization Approach (Land Residual), it appears that the resultant yield would not provide an adequate return based on the analysis presented on page 45 of the Houlihan Lokey Appraisal. Accordingly, the report lacks support for reconciling to a final value conclusion above the value derived via the Income Capitalization Approach. Application of the concluded rent multipliers (6.0% and 6.5%) from both Primary Appraisals to the Market Value derived via the Income Capitalization Approach ($55,000,000) would correlate to a ground rent between $3,300,000 and $3,575,000. It is noted that the "As Is" Fair Market Rental Values in the Primary Appraisals have been developed solely via the Income Capitalization Approach. For the same reasons noted in the review of the "As Remediated" Fair Market Rental Value, the Houlihan Lokey Appraisal is deemed by the Reviewer to have greater reliability than the Deloitte Appraisal in the "As Is" Fair Market Rental Value. Based on this review, weighing the reliability, data and credibility of each Primary Appraisal, the Reviewer is ofthe opinion that the most appropriate rental value within the range established by the Primary Appraisals, as of the effective date of the Primary Appraisals, under the hypothetical condition that environmental remediation of the subject property is complete (referred to in the Primary Appraisals as the "As Remediated" or "As -If -Clean" Fair Market Rental Value), was: THREE MILLION SIX HUNDRED THOUSAND DOLLARS PER YEAR ($3,600,000 Per Year) Based on this review, weighing the reliability, data and credibility of each Primary Appraisal, the Reviewer is of the opinion that the most appropriate rental value (referred to in the Primary Appraisals as the "As Is" Fair Market Rental Value) within the range established by the Primary Appraisals, as of the effective date of the Primary Appraisals, was: TWO MILLION TWO HUNDRED EIGHTY THOUSAND DOLLARS PER YEAR ($2,280,000 Per Year) Very truly yours, KTR REAL ESTATE ADVISORS LLC By: Tho s J. T ner, MAI Manage ember State -certified general real estate appraiser (RZ4117) KTR REAL ESTATE ADVISORS CERTIFICATION I, Thomas J. Tener, MAI certify that to the best of our knowledge and belief: Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 10 1) The statements of fact contained in this report are true and correct 2) The analyses, opinions, and conclusions in this review are limited only by the assumptions and limiting conditions stated in this review report and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3) I have no present or prospective interest in the property that is the subject of the work under review and no personal interest with respect to the parties involved. 4) I have no bias with respect to the property that is the subject of the work under review or to the parties involved with this assignment. 5) My compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in this review or from its use. 4) My compensation for completing this assignment is not contingent upon the development or reporting of predetermined assignment results or assignment results that favors the cause of the client, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal review. 5) My engagement in this assignment was not contingent upon developing or reporting predetermined results. 6) My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Standards Board of the Appraisal Foundation. 7) My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. 8) The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 7) I have performed no other services, as an appraiser or in any other capacity, regarding the property that is the subject of the work under review within the three-year period immediately preceding acceptance of this assignment. 7) I have not made a personal inspection of the property that is the subject of the work under review. 8) No one provided significant appraisal, appraisal review, or appraisal consulting assistance to the individuals signing this certification. 9) As of the date of this report, I have completed the continuing education program for Designated Members of the Appraisal Institute. 11) Thomas J. Tener, MAI has been duly certified to transact business as a State -certified general real estate appraiser in the State of Florida (RZ4117). KTR REAL ESTATE ADVISORS LLC By: Thom er, MAI Managi . ember State -certified general real estate appraiser (RZ4117) jKTR Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 11 REAL ESTATE ADVISORS BASIC ASSUMPTIONS AND LIMITING CONDITIONS This appraisal review report is subject to the following assumptions and limiting conditions: No responsibility is assumed for the legal description or for matters including legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. The property is assumed to be free and clear of any or all liens or encumbrances unless otherwise stated. Responsible ownership and competent property management are assumed. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. All engineering is assumed to be correct. The plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 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 review report or the reports under review. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined, and considered in the review report or the reports under review. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the conclusions contained in the reports under review are based. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the review report or the reports under review. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. The appraiser, by reason of this appraisal review, is not required to give further consultation, testimony, or be in attendance in court with reference to the property in question unless arrangements have been previously made. Possession of this report, or a copy thereof, does not carry with it the right of publication. Neither all nor any part of the contents of this report shall be disseminated to the public through advertising, public relations, news, sales, or other media without prior written consent and approval of the appraiser. The appraiser is authorized by the Client to disclose all or any portion of this report and the related data to appropriate representatives of the Appraisal Institute, or other professional organizations of which the appraiser is a member or affiliate, if such disclosure is required to enable the appraiser to comply with bylaws and regulations of such organizations. Client agrees to limit KTR's liability to Client, Miami Freedom Park LLC, or any third party arising from breach of Agreement or professional acts, errors or omissions, such that the total aggregate liability of KTR to all those named shall not exceed $100,000 or KTR's fee for this assignment, whichever is greater. No personal liability shall be jKTR REAL ESTATE ADVISORS Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Page 12 asserted or enforceable against the partners, members, managers, shareholders, directors, officers, employees and affiliates of KTR for matters arising out of or in connection with this Appraisal Review. In no event shall either party be liable to the other party for any consequential, incidental, or indirect damages including, though not limited to, loss of income, loss of profits, loss or restriction of use of property, or any other business losses. HYPOTHETICAL CONDITIONS Hypothetical Condition is defined in the 2018-2019 Uniform Standards of Professional Appraisal Practice as "a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of assignment results, but is used for the purpose of analysis. Comment: Hypothetical conditions are 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 the analysis." The following hypothetical conditions have been used in this appraisal review: 1. This appraisal review incorporates the hypothetical conditions noted within the Houlihan Lokey and Deloitte Appraisal reports. Use of the noted hypothetical conditions use might have affected the assignment results. EXTRAORDINARY ASSUMPTIONS Extraordinary Assumption is defined in the 2018-2019 Uniform Standards of Professional Appraisal Practice as "an assignment specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser's opinions or conclusions. Comment: Uncertain information might include physical, legal, or economic characteristics of the subject property; or conditions external to the property, such as market conditions or trends, or about the integrity of data used in an analysis." The following extraordinary assumptions have been used in this appraisal review: 1. KTR requested, but was not provided, the cash flow models (Argus, MS Excel, etc.) from the Primary Appraisers. KTR's appraisal reviews and selection of "the most appropriate rental value within the range established by the Primary Appraisals" assumes that the cash flow models accurately reflect the Primary Appraisers' assumptions and conclusions. 2. KTR was provided with a revised discounted cash flow projection for the surface parking (pg. 129 of the Deloitte Appraisal) correcting discrepancies between this West & South Parking cash flow detail and the summary of the Total Cash Flow presented on page 130. The review of the Deloitte Appraisal assumes that the submitted replacement surface parking cash flow projection is accurately reflected in the Income Approach. See replacement page 129 in the addenda of this review report. 3. The Houlihan Lokey Appraisal concludes to a "Feasible Ground Rent" rather than the Fair Market Rent or "Fair Market Value" as defined on page 19 of the Houlihan Lokey Appraisal. This appraisal review assumes that the terminology "Feasible Ground Rent" is used interchangeably with "Fair Market Value" in the Houlihan Lokey Appraisal when referring to the concluded Fair Market Rent to be paid by MFP under the proposed ground lease. 4. This appraisal review incorporates the extraordinary assumptions noted within the Houlihan Lokey and Deloitte Appraisal reports. Use of the noted extraordinary assumptions might have affected the assignment results. 0-4;*1 KTR REAL ESTATE ADVISORS ADDENDA Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Addenda 0-4;*1 KTR REAL ESTATE ADVISORS DELOITTE INITIAL REVIEW LETTER Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Addenda jKTR REAL ESTATE ADVISORS November 12, 2020 Mr. Nathan Florio, CRE, MAI, MRICS Deloitte Transactions and Business Analytics LLP 30 Rockefeller Plaza New York, New York 10112 Tel: (212) 436-2000 Via email: naflorio@deloitte.com Re: Miami Freedom Park Melreese Country Club 1400 NW 37' Avenue Miami, Florida 33125 Dear Mr. Florio: KTR Real Estate Advisors LLC ("KTR") has been retained by Shutts & Bowen LLP on behalf of the City of Miami (collectively the "Client") to review your September 21, 2020 appraisal of the above referenced property (the "Appraisal Report") with an effective date of October 23, 2019. The scope of the review assignment provides for the communication of questions and potential deficiencies relating to the Appraisal Report. This letter is intended to summarize issues identified within the Appraisal Report that require clarification. It is not intended to comply with the development and reporting standards (Standards 3 and 4) of the Uniform Standards of Professional Appraisal Practice. Upon receipt of your responses, including any revisions to the Appraisal Report deemed appropriate by you, KTR will complete its formal appraisal review and communicate the results of the review to the Client. REPORTING, ASSIGNMENT ELEMENTS AND CONDITIONS 1. The Appraisal Report indicates in the transmittal letter and on pg. 7 that the report is a "restricted" report. This is contrary to the disclosure in the Report Type section on pg. 5 of the report, which identifies the report format as being "intended to comply with the requirements of an Appraisal Report." Please confirm that the reporting is intended to comply with the requirements of an Appraisal Report and edit the report accordingly. 2. The Appraisal Report incorporates Extraordinary Assumptions and Hypothetical Conditions in the Executive Summary that need clarification and require an appropriate warning to the reader stating that "their use might have affected the assignment results." a. The first extraordinary assumption assumes that only 10.5 acres of the 73.5 leased acres will be "rezoned to accommodate for the new MLS Soccer Stadium, Hotel and Office Uses which will require a zoning application process review by the City of Miami and State of Florida for the changes to be considered at various public hearings. The remaining acreage of the Leased Premises will remain with the Recreation and Civic Space designations." This assumption does not appear to correctly reflect the proposed rezoning under the Special Area Plan, which would rezone all of the 73.5 acres to accommodate the proposed mixed -use development. It is my understanding that 10.5 acres of the Leased Premises would be dedicated to the stadium. Please review and clarify. b. The second extraordinary assumption states that the "costs supplied or provided by the City will not be independently reviewed, audited or corroborated by the Advisor." The specific costs provided by the City, if utilized in the analysis, should be identified within this extraordinary assumption and assumed to be correct. 551 Madison Avenue, New York, NY 10022 rep 212.906.9400 • FAx 212.935.5935 jKTR REAL ESTATE ADVISORS Mr. Nathan Florio, CRE, MAI, MRICS Deloitte Transactions and Business Analytics LLP Miami Freedom Park November 12, 2020 Page 2 c. The second extraordinary assumption also notes that "the analysis will not consider the $20,000,000 contribution for the maintenance of a 57.6-acre public park or the $5,000,000 contribution for the Baywalk-Riverwalk Project." This appears to be a Hypothetical Condition, rather than an Extraordinary Assumption. Please review and edit the Appraisal Report accordingly. d. The third extraordinary assumption indicates that the costs (I assume you are referring to the costs associated with the environmental remediation) "supplied or provided by the City will not be independently reviewed, audited or corroborated by the Advisor." The specific remediation costs provided by the City, if utilized in the analysis, should be identified within this extraordinary assumption. e. The third extraordinary assumption also notes that the scope of the analysis does not "consider any proposed contributions ... pursuant to the 'no net loss of park space' provisions of the City of Miami Municipal Code." This appears to be either a Hypothetical Condition or a specific assignment element, rather than an Extraordinary Assumption and should be appropriated noted. f. The first Hypothetical Condition cited in the Executive Summary appears to be an extraordinary assumption that the City can rezone the subject under the Special Area Plan ("SAP") necessary to develop the proposed mixed -use development, rather than a hypothetical condition that the SAP is place as of the effective date of the appraisal. This is inconsistent with the statement on page 30, which indicates that "it is a hypothetical condition that...the appropriate SAP zoning necessary to develop the Property to its highest and best use is in place as of the date of Value." Please clarify which hypothetical condition/extraordinary assumption is employed in the analysis and how this hypothetical condition/extraordinary assumption impacted the construction timeline. The second Hypothetical Condition in the Executive Summary appears to be an assignment element rather than a hypothetical condition, as this statement is not contrary to what was known by the appraiser to exist on the effective date of the appraisal. Please confirm that this statement is an ordinary assignment condition rather than a hypothetical condition. 3. Based on the hypothetical condition noted on page 30 that "the appropriate SAP zoning necessary to develop the Property to its highest and best use is in place as of the date of Value," is the residual land value in the Income Approach potentially overstated due to the exclusion of the time and carrying costs related to the SAP entitlement period? a. If so, do the analysis and conclusions presented in Income Approach presume that the Ground Lease would commence upon entitlement; that is, when SAP zoning is approved? b. On page 99, it is noted that "Year 1 is considered a planning and pre -construction year while approvals are being finalized." Please confirm that this planning and pre -construction year is in addition to the SAP entitlement period. g. ANALYSIS, ASSUMPTIONS AND CONCLUSIONS Retail Component Pp. 34-37 The Costar and REIS data presented illustrates vacancy rates of 3.7% to 6.2% in Miami with projections well above 3.0%. In light of the data presented within the report, please explain the rationale for the combined 3.0% retail vacancy and credit loss processed on p. 106. Pp. 34-36 The Costar data on pages 34 and 35 illustrate retail growth rates below the 2.5% retail growth rate processed on page 103. The Miami specific data cited on page 103 appears to present market rent growth rates of 2.0% or less. With the exception of the statement on page 36 that "REIS projects annualized rent growth of 3.20% between years 2020 and 2023," the report does not appear to present support for the concluded retail market growth rate processed in the income approach. In light of the data jKTR REAL ESTATE ADVISORS Mr. Nathan Florio, CRE, MAI, MRICS Deloitte Transactions and Business Analytics LLP Miami Freedom Park November 12, 2020 Page 3 presented within the report, please explain the rationale for the 2.5 % retail market rent growth rate processed on p. 106. Pp. 44-45 The Miami Airport Retail Submarket information presented represents "Asking NNN Rents." Was any consideration given to the difference between asking rents and taking rents in the analysis? P. 45 The table summarizing the REIS competitive set survey indicates "Current Asking Rent/SF" for non -anchor and anchor retail tenants. The mean is cited in the report as $30.66 per square foot for non - anchor tenants and $17.40 for anchor tenants. Does the market rent conclusion of $35.00 per square foot NNN on page 106 take into consideration anchor and non -anchor tenancy within the proposed development? Pp. 34-50 The local retail market data presented within the report does not provide any indication of market based concessions or leasing commissions in Miami. The concession and leasing commission analysis on pages 103 and 104 appear to be based on PwC National Strip Shopping Center survey data. Were local market concessions (free rent and TI) and local leasing commission rate schedules considered in the analysis? Are the concessions and leasing commissions processed in the appraisal consistent with local market practice? P. 106 The analysis assumes that 67% of the retail will be pre -leased and the balance will be leased up within 4 months of completion of each phase. Is this level of absorption supported by market statistics in the Appraisal Report? Please identify the pages and discussions within the Appraisal Report that supports this absorption. Pp. 107-108 Unlike the hotel and office cashflows, the retail cash flow does not include a projection of parking income. Is it assumed that the parking for the retail component will be satisfied by the West and South Parking? Under the market rent assumption processed for the retail tenants, would parking need to be made available to the retail tenants and their customers without charge? If not, how was the market rent conclusion for the retail component adjusted to account for the absence of free parking. How many spaces will the 600,000 square foot retail component require? Should the potential gross income for the West & South Parking be reduced to account for the number of parking spaces required by the retail component? P. 104 The discount rates illustrated in the table presents 7 sources citing average return requirements for existing cashflowing retail properties ranging from 7.4% to 8.4%. The Appraisal Report includes land development rates (RealtyRates Developer Survey - Florida/Caribbean Retail) illustrating discount rates of 13.01% to 28.03%. Considering the land development rates presented, please expand on the rationale for concluding below this range at 10.5%. Office (Tech Hub) Component P. 109 The Parking Rent discussion indicates that the appraiser analyzed 8 recent office sale transactions with monthly rents for covered parking. Is it common in this market to lease office space without free parking provided to tenants? Was the office rent of the 8 sale transactions analyzed negatively impacted by the absence of free parking? If so, how was this factor considered in the office market rent conclusion? 0-4;*1 KTR REAL ESTATE ADVISORS Mr. Nathan Florio, CRE, MAI, MRICS Deloitte Transactions and Business Analytics LLP Miami Freedom Park November 12, 2020 Page 4 P. 109 The office market statistics on pages 51-52 and 62-64 illustrate vacancy rate projections (2019-2023) between 8.6% and 19.9%. Please provide support for the concluded vacancy and credit loss of 4.0% processed in the Tech -Hub DCF analysis. How was credit loss considered relative to the risk of an asset class targeted at "start-up" tech companies? Pp. 62-64 The data on pages 62-64 illustrate office growth rates below the 3.0% growth rate processed on page 110. The Miami specific data cited on page 110 appears to present market rent growth rates of 2.0% or less. The report does not appear to present support for the concluded Tech -Hub (office) market rent growth rate processed in the income approach. In light of the data presented within the report, please explain the rationale for the 3.0% Tech -Hub market rent growth rate processed in the cash flow. Pp. 52-71 The office and Tech -Hub market data presented within the report does not provide any indication of market -based concessions or leasing commissions in Miami. The concession and leasing commission analysis on page 110 appear to be based on PwC Southeast Florida Office survey data. Were local market concessions (free rent and TI) and local leasing commission rate schedules considered in the analysis? Are the concessions and leasing commissions processed in the appraisal consistent with local market practice? Is free rent prevalent in the local market? Would the tenant improvement allowance for Tech -Hub tenants differ from traditional office tenants? Pp. 113-115 The DCF does not appear to consider non -reimbursable expenses beyond management fee and reserves. Even under a NNN lease scenario, wouldn't there be non -reimbursable expenses? Furthermore, interim vacancy, as well as credit loss, would result in expenses to the landlord. Shouldn't this be incorporated into the DCF? P. 112 The table entitle Discount Rates — Office includes 17 sources providing average return requirements for existing cash flowing office properties ranging from 5.25% to 11.4%. The table also includes land development (RealtyRates Developer Survey - Florida/Caribbean Urban and Suburban Office) discount rates ranging from 12.03% to 24.80%. Considering the office land development rates presented, please expand on the rationale for concluding below this range at 10.25% for the Tech -Hub (office) cash flow. Hotel Component P. 116 The Hotel Market analysis portrays weakening market conditions; however, the analysis incorporates an ADR growth rate assumption of 3.5% per year. Please explain the basis for this growth assumption. P. 116 The analysis concludes to a 2019 ADR of $155 for the limited service hotel and $200 for the full service hotel. This appears to be an aggressive assumption based on the ADR data discussed on pages 82 and 83 of the report. Please explain the basis for these ADR assumptions. P. 116 The analysis processes a 90% stabilized occupancy in the second year of operations. This stabilized occupancy rate is well above the "highest occupancy rate for the five-year period from 2013 to jKTR REAL ESTATE ADVISORS Mr. Nathan Florio, CRE, MAI, MRICS Deloitte Transactions and Business Analytics LLP Miami Freedom Park November 12, 2020 Page 5 2018 at 86%." It is also well above the hotel occupancy data presented on pages 83-84. Please explain the basis for the projected occupancy rate. P. 122 The real estate taxes are estimated based on "construction costs (as a proxy) and the current millage rate." Were local real estate tax comparables considered in this expense analysis? P. 123 The appraisal processes the same discount rate (11.5%) for the full service and limited service hotel components. The discount rate data presented on page 124 illustrates yield rates of 7.5% to 14.0% for existing, cash -flowing hotels. The table references discount rates for "Florida/Caribbean Commercial/Industrial" development investments. It is unclear how this Commercial/Industrial data relates to the return requirements for proposed hotel development. Please provide additional insight into the selection of the discount rate for the hotel component. Additionally, please provide insight into the rationale for processing the same rate for full service and limited service hotel development. West and South Parking Component P. 101 According to the Appraisal Report, the proposed parking component will consist of 3,310 surface parking spaces (identified as "Parking West and South") and 1,910 spaces within enclosed garage structures. The Houlihan Lokey report indicates proposed parking of 3,472 surface parking spaces and 2,387 spaces within enclosed garage structures. Please review and confirm the physical characteristics of the proposed parking component and cite the source of this information. If necessary, please update the cash flow to reflect any changes. P. 128 The concluded parking rent of $1,200 per space per year processed for the proposed 3,310 surface parking spaces is the same market rent processed for the indoor garage spaces in the hotel and Tech - Hub cash flows. The parking rent survey discussed on page 109 is for "covered parking spaces." The Appraisal Report presents no data relative to surface parking rents. Please explain the rationale for processing the same market rent for surface (open) and garage (covered) parking. P. 128 The West & South Parking DCF Assumptions incorporate operating costs equivalent to 30.0% of the Income Per Space. Within the hotel and Tech -Hub cash flow projections, the parking income is projected without deducting an equivalent 30% operating cost. Please explain the rationale for excluding parking operating costs from the hotel and Tech -Hub cash flow projections. P. 128 The Appraisal Report provides no support for the selection of the Discount Rate and Terminal Capitalization Rate processed for the parking income. Please provide some insight into the derivation of these rates. P. 129 The West & South Parking DCF Assumptions include income attributable to the parking spaces required to support the retail component. Should the potential gross income be reduced to reflect free parking for the retail component? P. 129 Please replace the Surface Parking Cash Flow table on page 129 with the table emailed to me on October 15, 2020 correcting the timing of the surface parking cash flow. Please incorporate any edits necessary, based on the above noted comments and questions. jKTR REAL ESTATE ADVISORS Stadium Analysis Mr. Nathan Florio, CRE, MAI, MRICS Deloitte Transactions and Business Analytics LLP Miami Freedom Park November 12, 2020 Page 6 P. 93 The Recent MLS Stadium Construction Cost Summary table appears to contain typographical errors relating to the size (25,130 seats) and site area (18.0 acres) of the proposed subject stadium. The cited stadium cost for the subject ($310,845,290) differs from the cost sited in the Houlihan Lokey report of $267,300,000. Please review and advise if this data has a material impact on the analysis presented. P. 94 The Income Approach on page 130 does not incorporate construction costs or income projections for the soccer stadium component. Considering the relevant stadium cost data presented on page 94, why wasn't market rent researched and projected for the stadium and a discounted cash flow projected for this major component of the proposed development? P. 130 Absent a discounted cash flow projection for the stadium development component, the Appraisal Report discounts the concluded land value for the mixed -use development by 30% in concluding to a land value of $655,556 per acre for 10.5 acres allocated to the stadium development. It appears that the rationale for this 30% discount is summarized in the Rate of Return Stadium Discussion on page 94. Please provide a clearer understanding of the logic behind using this specific yield rate comparison (the yield with and without ground rent deducted from the developer's Stadco cashflow) to estimate land value for the stadium development relative to the land value of the Office/Retail/Hospitality development. Also, please review the rationale for using the ratio between the two yield rates (12.8% vs. 9.8%) as a measure of the impact on land. A 30% reduction in the yield rate does not necessarily equate to a 30% difference in value. Sales Comparison Approach P 137 The Appraisal Report presents four sales with materially different zoning. While adjustments are processed "for less intense uses", no adjustments were processed for the disparate zoning. Considering the restrictions and requirements of the SAP and the height limitations associated with the subject's proximity to Miami International Airport, the absence of adjustments for differences in Zoning is not adequately explained within the Appraisal Report. P 137 The analysis on pages 94 and 130 conclude to a 30% discount to the land designated for the stadium. While this adjustment was processed in the Income Approach, no corresponding adjustment was discussed or applied in the Sales Comparison Approach. Consistent adjustments should be processed in each approach. P 137 Comparable Sale No. 4 is proposed to include a significant residential component, including condominium towers. The SAP will not permit residential development. Please explain the rationale for not adjusting Comparable Sale No. 4 for this difference. KTR REAL ESTATE ADVISORS Land Market Rent Mr. Nathan Florio, CRE, MAI, MRICS Deloitte Transactions and Business Analytics LLP Miami Freedom Park November 12, 2020 Page 7 P 143 The Investor Survey summarizing Land Lease Capitalization Rates and Discount Rates for various property types is sourced from RealtyRates.com. Does this source of data include any information about the length of lease terms reflected in the survey? Lease term (years) can impact ground rents and lease structures. The Appraisal Report does not address the relationship between ground lease term and capitalization rates. Please provide an explanation of the subject's proposed lease term relative to the comparable data analyzed and how it was considered in the 6.5% ground rent capitalization rate conclusion. P 143 The Appraisal Report briefly discusses the derivation of an implied rental capitalization rate of between 6.0% and 7.0% from the analysis of the Ground Lease between the City of Miami and the developer of SkyRise Miami. This high-level analysis of this ground lease comparable appears to have been given significant consideration in the concluded ground rent capitalization rate. Support for the concluded capitalization rate would benefit from additional details and analysis of this ground lease. The consultant for Miami Freedom Park submitted comments pertaining to the Appraisal Report. The consultant suggested that the City of Miami has entered into numerous ground leases that are public record. If such data is available and relevant to analysis, please consider supplementing the analysis on page 143 to include additional comparable ground leases in the influencing market. P 143 In concluding to a ground rent capitalization rate of 6.5%, was consideration given to the magnitude of investment of the developer, the type of development, and the unique provisions of the ground lease which assign much of the risk (including environmental remediation) to the developer and include a percentage rent provision. These provisions are considered favorable to the ground lessor and could have an impact on the ground rent capitalization rate. Please explain if and how these factors were considered. General Please confirm that the illustration on page 144 of Projected Revenue is intended for informational purposes and that the 5.0% of Revenue provision of the ground lease has not been incorporated into the discounted cash flow projections of the land residual (the Income Approach). Once you have had the opportunity to review this letter, please provide an estimated timeframe for the submission of your responses and/or any necessary revisions to the Appraisal Report. Thank you for the straightforward manner in which you have approached this complex appraisal problem. I look forward to receiving your responses and insight relative to the questions presented in this letter. Very truly yours, KTR REAL ESTATE ADVISORS LLC By: Thom J. Te er, MAI Manage tuber State -certified General Real Estate Appraiser RZ4117 (212) 906-9499 0-4;*1 KTR REAL ESTATE ADVISORS HOULIHAN LOKEY INITIAL REVIEW LETTER Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Addenda jKTR REAL ESTATE ADVISORS November 12, 2020 Mr. Michael P. Hedden, CRE, MAI, FRICS Houlihan Lokey 245 Park Avenue New York, New York 10029 Via email: mhedden@hl.com Re: Miami Freedom Park Melreese Country Club 1400 NW 37th Avenue Miami, Florida 33125 Dear Mr. Hedden: KTR Real Estate Advisors LLC ("KTR") has been retained by Shutts & Bowen LLP on behalf of the City of Miami (collectively the "Client") to review your appraisal of the above referenced property (the "Appraisal Report") with an effective date of October 24, 2019. The scope of the review assignment provides for the communication of questions and potential deficiencies relating to the Appraisal Report. This letter is intended to summarize issues identified within the Appraisal Report that require clarification. It is not intended to comply with the development and reporting standards (Standards 3 and 4) of the Uniform Standards of Professional Appraisal Practice. Upon receipt of your responses, including any revisions to the Appraisal Report deemed appropriate by you, KTR will complete its formal appraisal review and communicate the results of the review to the Client. REPORTING, ASSIGNMENT ELEMENTS AND CONDITIONS 1. Pursuant to USPAP Standards Rule 2-2(a)(vi) an Appraisal Report must "state the effective date of the appraisal and the date of the report". The Appraisal Report does not state the date of the report. 2. Throughout the Appraisal Report, the phrases "As Unimpaired by Environmental Remediation" and "As Impaired by Environmental Remediation" are utilized. For the sake of clarity, please consider incorporating the descriptive "by Environmental Contamination" rather than "by Environmental Remediation." 3. The descriptive of Value A on page 11 "As Unimpaired by Environmental Remediation and No -Net Loss." Based on the scope of work, the exclusion of "the cost of No -Net -Loss" applies to both Value A and Value B. This exclusion appears to be a Hypothetical Condition or a specific assignment condition that applies to both valuation scenarios and should be noted accordingly in the Appraisal Report. 4. The Appraisal Report incorporates Extraordinary Assumptions and Hypothetical Conditions on page 13 that need clarification and require an appropriate warning to the reader stating that "their use might have affected the assignment results." a. The extraordinary assumption states that the "appraisal does not consider the $20,000,000 contribution for the maintenance of a 58-acre public park, the $5,000,0000 contribution for the Baywalk-Riverwalk Project, costs associated with the No -Net -Loss Policy or extraordinary off -site development costs." These appear to be hypothetical conditions, rather than extraordinary assumptions. Please review and appropriately identify within the Appraisal Report. 551 Madison Avenue, New York, NY 10022 rep 212.906.9400 • FAx 212.935.5935 jKTR REAL ESTATE ADVISORS Mr. Michael P. Hedden, CRE, MAI, FRICS Houlihan Lokey Miami Freedom Park November 12, 2020 Page 2 b. A "one-year remediation timeline has been assumed." Please confirm the basis for this timeline and the reasonableness of this extraordinary assumption. c. The first Hypothetical Condition assumes "that the Property has received all necessary government approvals permitting immediate development of the Subject Property consistent with the proposed plan." Based on this Hypothetical Condition, is the residual land value in the Income Approach potentially overstated due to the exclusion of the time and carrying costs related to the entitlement period? d. Does the appraisal presume that the Ground Lease would commence upon entitlement; that is, when "all necessary government approvals permitting immediate development" are received? 5. In general, the reporting level of the Appraisal Report tends to present the minimum requirements for this report format and presents summaries of the analysis rather than detailed analysis that might be more appropriate for the intended use. Cognizant of the intended use and users, the Appraisal Report would benefit from more detailed analysis in the following sections: a. Location - The subject location is described as 1802 NW 37th Avenue, Miami, Miami -Dade County, Florida 33125. The subject's alternative addresses should be included. b. Site Description — Minimal details are provided relative to the site description. The shape is described as regular, which incorrectly describes the physical characteristics of this irregular L- shaped site with a concave interior. The Appraisal Report lacks a survey or other illustrative representation of the site and provides no discussion of the property's extensive frontage along several roadways. The physical characteristics should be adequately described and analyzed relative to the proposed development and the comparable sales. c. Zoning — The zoning analysis is limited to a statement of the current CS — Civic Space Zoning and notes that it is "subject to No -Net Loss Policy." No description or analysis is provided of the proposed zoning change (Special Area Plan and Transect Zone) or of height limitations associated with the subject's proximity to the Miami International Airport. The zoning analysis should be expanded to present and analyze the limitations of the proposed zoning change. Any use restrictions associated with the proposed zoning and existing height restrictions should be considered in the Sales Comparison Approach. Although the Appraisal Report is based on the Hypothetical Condition that "the Property has received all necessary government approvals permitting immediate development of the Subject Property consistent with the proposed plan," the Zoning Analysis should present a discussion of the likely timeframe to achieve the zoning change and government approvals. d. Proposed development and lease provisions (Terms and Conditions) — The Appraisal Report indicates that the proposed lease will have an initial term of 39 years and "two (2) options to extend the Term, each for thirty years." The option rent provisions are not discussed. The renewal provisions of the two options should be presented, analyzed and considered in the determination of the "Rent Multiplier" (page 47) appropriate to the fair market rent conclusions for Scenario A and B. e. Income Approach — The Income Approach (Land Residual) provides minimal analysis of the data that form the basis for the key assumptions summarized on page 39. The Appraisal Report would benefit from more detailed analysis highlighting the rationale for the concluded assumptions. f. Income Approach — The Appraisal Report does not include the supporting worksheets utilized to model the discounted cash flow projection on pages 43, 46, 49 and 50. Absent these supporting worksheets (ie. Argus files, MS Excel worksheets), the integrity of the cash flow projection cannot be reviewed. It is our understanding that Houlihan Lokey's company policy prohibits distribution of these workfile documents. The appraiser should consider supplementing the Appraisal Report with supporting schedules from the Argus model. jKTR REAL ESTATE ADVISORS g. Mr. Michael P. Hedden, CRE, MAI, FRICS Houlihan Lokey Miami Freedom Park November 12, 2020 Page 3 Sales Comparison Approach — No analysis of market conditions is provided. Due to the absence of significant digits in the Adjusted Sale Price, it is impossible to assess the magnitude of adjustment for market conditions. The Appraisal Report would benefit from a more detailed discussion of the market condition adjustment. h. Sales Comparison Approach - No analysis is provided for differences in Zoning/Use. None of the comparables are adjusted for differences in Zoning or Intended Use. The absence of any Zoning/Use adjustment does not appear to be supported considering the restrictions associated with subject's proposed SAP rezoning or the height restrictions related to the proximity to the Miami International Airport. Please explain the rationale for no adjustment. How does the Sales Comparison Approach account for the restrictions associated with subject's proposed rezoning? 6. The Ground Lease and Master Development Agreement cited on page 19 states that the "Fair Market Value will be based on the highest and best use of the Demised Property taking into consideration the actual cost of environmental remediation for the Demised Property, the site development cost for the Public Park Parcel, and such other impositions and limitations on the use of the Demised Property" [emphasis added] consistent with USPAP. How has "the site development cost for the Public Park Parcel, and such other impositions and limitations on the use of the Demised Property" been "taken into consideration" in the determination of the Fair Market Value (rent)? This definition appears to be contrary to the Extraordinary Assumption on page 13. Should and have these factors be considered in the determination of the Fair Market Value. If not, please consider adding an explanatory note on page 19 of the Appraisal Report. ANALYSIS, ASSUMPTIONS AND CONCLUSIONS Sales Comparison Approach P. 37 The Appraisal Report excludes the sale of 4400-02 NW 87th Ave Doral FL ($17.12 psf). This transaction represents the sale of a golf course proposed for mixed -use redevelopment and appears to be a relevant sale transaction. It was analyzed in the Deloitte Appraisal Report. Please explain why this sale was not considered. P. 37 The Appraisal Report presents four sales with materially different zoning. No adjustments were processed for the disparate zoning. Considering the restrictions and requirements of the SAP, as well as the height limitations associated with the subject's proximity to Miami International Airport, the absence of adjustments for differences in Zoning is not adequately explained within the Appraisal Report. P. 37 The table on page 37 describes the subject shape as "Rectangular" and earlier (p. 16) as "regular in shape." The leased premises are neither rectangular nor regular in shape. None of the comparable sales are adjusted for differences in shape. The absence of adjustments for differences in shape is not adequately explained within the Appraisal Report P. 36 The discussion of Sale 2 (7777 NW 41' Street) indicates that both demolition costs ($1 million) and the lease back value ($5 million) "were deducted from the original sale price to arrive at an effective sale price." Demolition costs are typically added as an expenditure after sale (not deducted). It appears that this may be a typographical error, as the mathematical difference between the sale price ($40,268,000) and the effective sale price ($36,268,000) is $4,000,000, not the $6,000,000 implied by this statement. jKTR REAL ESTATE ADVISORS Mr. Michael P. Hedden, CRE, MAI, FRICS Houlihan Lokey Miami Freedom Park November 12, 2020 Page 4 P. 36 The Appraisal Report provides no explanation of how the $5.0M short-term lease back adjustment was estimated for Sale 2. The Appraisal Report would benefit from additional details explaining how this significant quantitative adjustment was estimated. In addition to the $5.0M downward adjustment for the sale -lease back, a downward qualitative adjustment is processed for Conditions of Sale. Since the estimated value of the lease back ($5 million) was deducted from the Sale Price reflected in the adjustment grid, please explain the additional downward adjustment processed under Conditions of Sale. Income Approach (Land Residual) P. 39 In general, the Appraisal Report provides limited data and minimal analysis in support of the assumptions processed in the Income Approach. The Appraisal Report would benefit from a more detailed discussion of the following assumptions: 1. The appraisal processes an office market rent assumption of $26.00 per square foot, triple net. The comparable data includes three lease transactions and seven listings of office space. The description of the office component on pages 6 and 20 indicates that the subject office will be Tech Hub space. The comparables do not appear to be Tech Hub lease transactions. What is the relationship between Tech Hub and traditional office rents in this market? What factors were considered in establishing market rent for Tech Hub space? 2. The analysis processes a retail market rent assumption of $35.00 per square foot, triple net. The comparable data reflects three lease transactions and three listings of retail space, only one of which is over 6,500 square feet. The proposed retail development will have 600,000 square feet of space. Does the land residual anticipate the inclusion of anchor tenants within the retail development? Does the concluded retail market rent assumption of $35.00 psf reflect a blend of anchor and in - line retail lease rates? If so, please provide a summary of these rental rate assumptions. 3. The Appraisal Report presents no comparable data for lease concessions and no support for the 2.5% leasing commission assumption processed in the discounted cash flow. Were local market concessions (free rent and TI) and local leasing commission rate schedules considered in the analysis? The Appraisal Report would benefit from the presentation and analysis of market concession packages. Commentary received from MFP's consultant suggests that the 2.5% leasing commission appears low by local market standards. Please review and provide support for these assumptions. 4. The cash flow assumptions indicate stabilized occupancy of 95% for the retail and office components, which is consistent with Note 3 in the DCF Analysis on pages 43 and 49. Years 3-6 of the DCF reflect no vacancy or credit loss. Although the appraiser's Argus files were not provided for review, the exclusion of vacancy/credit losses in Years 3-6 is likely due to a modeling assumption that reduces vacancy and credit loss by interim vacancy during the initial lease up period. Is this modeling assumption consistent with investor (developer) sentiments for proposed mixed -use developments in this market? 5. The DCF does not consider non -reimbursable expenses beyond management fee and reserves. Even under the proposed NNN lease scenario, wouldn't the proposed development anticipate some non - reimbursable expenses? 6. The Hospitality ADR statistics on page 27 do not appear to support the Full Service and Limited Service ADR assumptions of $275 and $175 per night, respectively. The data appears to suggest ADRs below $140 per night in the Miami Airport market for Upper Upscale and Upscale hotels. Please provide support for the concluded ADR assumptions. 7. The Hospitality Occupancy statistics on page 27 do not appear to support the 75% Stabilized Occupancy assumption. The data illustrates historical occupancy rates in excess of 82% in the 0-4;*1 KTR REAL ESTATE ADVISORS Mr. Michael P. Hedden, CRE, MAI, FRICS Houlihan Lokey Miami Freedom Park November 12, 2020 Page 5 Miami Airport market for Upper Upscale and Upscale hotels. Please provide additional support for the concluded Stabilized Occupancy assumptions. P. 40 Absent improved stadium lease comparables, market rent for the proposed stadium is estimated based on a derived 6.0% return on the cost to construct the stadium. It appears that the stadium cost used in this calculation is comprised of the estimated $295,600,000 replacement cost new (p. 70) and a 14.3% allocation (10.5/73.5) of the estimated $14,055,000 site improvement costs, inflated by 2.5% per year. Please confirm that this is the basis for the projected $19,232,378 annual net stadium rent in Year 3. If not, please provide the calculation of this stadium rent projection. P. 45 The Investor Surveys, utilized to develop the concluded 8.5% discount rate, reflect return requirements relative to the investment risk of existing, cashflowing properties. How did the appraisal consider the additional risk of development? P. 45 The concluded discount rate is applied to the projected cash flow for the entire mixed -use development. The Investor Surveys do not include data pertaining to hotel investments. The projected Hotel Revenue represents 27.1% of the PGR in Year 3 and 23.5% of the PGR in Year 11. The full -service and limited -service hotel capitalization rates presented on page 47 appear to illustrate greater investor return requirements for hotel properties than for office and retail properties. How did the appraisal consider the risk associated with the two hotel properties? P. 45 The concluded 8.5% discount rate appears to be based solely on the return requirements for the Retail and Office components. The projected Stadium income represents 37.9% of the PGR in Year 3 and 25.7% of the PGR in Year 11. How did the appraisal consider the additional risk of associated with the Stadium component, a specialty purpose, income producing property? P. 39 Similar to the discount rate assumption, the terminal capitalization rate processed in the DCF does not appear to take into consideration the return requirements of hotel investments or the additional risk associated with the Stadium component. How did the appraisal consider these significant income components in the selection of the terminal capitalization rate? P. 49 Scenario B represents the "As Impaired" valuation and appears to only differ from the cash flow projection of Scenario A in that it processes an estimated environmental remediation cost of $16,500,000 in the first year of the analysis and commences construction in the second year. The Scenario B cash flow projection does not incorporate the 2.5% annual market rent growth assumption in the first year of the analysis. As such, the revenue projection for the 2021/22 fiscal year in Scenario A is exactly the same as the revenue projection for the 2022/23 fiscal year in Scenario B. If appropriate, please revise the cashflow projection accordingly or explain the disparate modeling of this assumption. P. 49 The "As Impaired" valuation processes the same 8.5% discount rate as the "As If Remediated" valuation. Considering the additional risk associated with remediation and regulatory closure, would investors expect a higher return for land in which the buyer is assuming the responsibility for environmental remediation? How is this risk accounted for in the Scenario B valuation? "Neu. cogeowm. jKTR REAL ESTATE ADVISORS Rent Multiplier Mr. Michael P. Hedden, CRE, MAI, FRICS Houlihan Lokey Miami Freedom Park November 12, 2020 Page 6 P. 47 The concluded rent multiplier is derived from the analysis of the yields of 30-Year T-Notes and High Yield Bonds, as well as Overall Cap Rate Averages extracted from the 3Q19 PwC Real Estate Investor Survey for the Southeast Florida Office Market, the National Strip Shopping Center Market, the National Full -Service and Limited -Service Lodging Segments, and the reported cap rate of a Triple Net Lease transaction involving a CVS store in West Palm Beach, Florida. The Appraisal Report does not provide any rent multipliers for ground lease transactions. The consultant for Miami Freedom Park suggested that the City of Miami has entered into numerous ground leases that are public record. If such data is available and relevant to analysis, please consider supplementing the analysis on page 47 to include comparable ground lease data in the influencing market. P. 47 The analysis of the data presented in the Multiplier Comparison table does not include a discussion of the typical term (years) of the multiplier investments relative to the subject's proposed ground lease term. See item 5(d) in the Reporting, Assignment Elements and Conditions section of this letter. P. 47 In concluding to a Rent Multiplier of 6.0%, was consideration given to the magnitude of investment of the developer, the type of development, and the unique provisions of the ground lease which assign much of the risk (including environmental remediation) to the developer and include a percentage rent provision. These provisions are considered favorable to the ground lessor and could have an impact on the Rent Multiplier. Please explain how these factors were considered. P. 47 The concluded Rent Multiplier of 6.0% used to establish the appraiser's opinion of the Fair Market Rent is equal to the Stadium Percentage Rent Multiplier derived on page 40. If, as stated on page 40, "MFP's developer will have a higher risk profile in comparison to a municipality and slightly lower that [sic] high yield bonds", please explain the rationale for concluding to the same rate for the less risky ground lease position? Value Conclusions P. 53 The "As If Clean" Market Value conclusion derived via the Sales Comparison Approach ($64,000,000) is 16.4% higher than the conclusion of the Land Residual Approach ($55,000,000). The residual value derived from a Development Valuation Model represents the highest price a developer can pay for the land under the assumptions processed to generate the specified, that is desired, yield rate. In reconciling to a land value above the Land Residual, the resultant yield would be below the 8.5% market - derived discount rate concluded to on page 45 of the Appraisal Report. Therefore, wouldn't the concluded land value of $60,000,000 provide an inadequate return based on the analysis presented in the Appraisal Report? jKTR REAL ESTATE ADVISORS General Mr. Michael P. Hedden, CRE, MAI, FRICS Houlihan Lokey Miami Freedom Park November 12, 2020 Page 7 Please confirm that the Rent Schedule illustrations on pages 67 and 68 are intended for informational purposes and that the Percent of Revenue provision of the ground lease has not been incorporated into the discounted cash flow projections of the land residual (the Income Approach). P. 67 Note (3) indicates that "market rent and the minimum rent will begin to grow starting in the 10th year, at a rate equal to the Consumer Price Index as of the valuation date." Does Note (3) represent: 1. an assumption utilized to generate the Rent Schedule; 2. a provision specified by the proposed ground lease document; or 3. your conclusion of market -derived ground lease provisions for the subject property? If the noted CPI rent steps are either a provision of the proposed ground lease document or your conclusion of market rent steps, please provide a citation for the source or support for the conclusion within the Appraisal Report. Pp. 70-71 According to Cost Data in the Appraisal Report, the proposed parking component will consist of 3,472 surface parking spaces and 2,387 spaces within enclosed garage structures. The Deloitte report indicates proposed parking of 3,310 surface parking spaces (identified as "Parking West and South") and 1,910 spaces within enclosed garage structures. Please review and confirm the physical characteristics of the proposed parking component and cite the source of this information. Once you have had the opportunity to review this letter, please provide an estimated timeframe for the submission of your responses and/or any necessary revisions to the Appraisal Report. Thank you for the straightforward manner in which you have approached this complex appraisal problem. I look forward to receiving your responses and insight relative to the questions presented in this letter. Very truly yours, KTR REAL ESTATE ADVISORS LLC By: Thomas Tene , MAI Managing,Mem er State-certifed-General Real Estate Appraiser RZ4117 (212) 906-9499 0-4;*1 KTR REAL ESTATE ADVISORS DELOITTE APPRAISAL PAGE 129 REPLACEMENT Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Addenda Shutts & Bowen, LIP September 21, 2020 Surface Parking Cash Flows West k South parking 04n$m1r nob Pk. 1f_1 ■W7 Yr} T6aT• Yr5 You{ fir 7 7 • 4rW! m74110 ;ram 61 1i40. 11 M. 16/11776= 107}7/1111 fa7}OA111 101}1J}p.3 10675P7036 I•711/254 19R171020 12R}27}111 44/71111413 11375171010 30R112542 I4.47U1071 T.rtal G•.[. ]nw,nu s3.05 ;0 60 $0 i0 10 40 fa $a 40 46 l0 Lrs Err. Cr... Irmskerte Iv. 6..Pe0u.: Lxx,aeraCosts 3.53% 00 30 30 12,136,705 04.366.215 14,493.153 14,606,302 14,22.4,460 16,830,696 44,500.434 15,684.496 15,21L,006 50 60 SO •$74,553'• ; f153,4i2'.. if457.2535 's16a,:2:. I $165,2511 if166,337) 's473,3,7: `6177,027 1f462.an E. SO f0 80 42.633,6E0 ;4,230.893 44.335,665 84,445,062 71,556.205 44,670,114 44,756,567 44:434,535 $3,629,202 40 $0 16 15519.1558 s1.359.240, ! 51,301.0001 141 333,525E 11.360,6037 :41,401.0341 151 n35,0947 141471.962, ,1.1,506,7515 Taal 01.1sp64n s0 fl,n 4y. I71odaf 10 L.r4a1 [a1u 6T.l 64..rvo '. lvsI2 s096 10 Tp...in, L .Resewa. {{6 Ey Cash Flu..s Rem., '.aloe Tce n•u'la 5 3,5- 1.035. $0 $6 $0 $n f0 $0 s6 i6 0 ,4E19,355) isls55.3n15 !31301.0093 141_33,523,, 1s1,366,6435 , 11,40 ,0341 11--,4.35,060 141,471,062, I,11,509,7615 *1.444935 13151625 $36356E6 43111,557 $3169,340 33,293060 63,350¢67 63,136}77 53,525p11 '19524, .3117,255'. f$2022263 7• 2 :7.7771 '1223a22'� L^.30602'. [1234=]29 .19E�2"4�2'• 'tt97.25 fi fs20I.=29 4 7.3771 .12232aa'� "216J7. 2345221 3s,3.¢7a53 $1,)64,523 52,933,436 f] _„7i s .43. 52 a51,301 3,3,137�5 f3,265�775 f3.285;919 e.511% 541,415,352 f44E4 170, Wj. R.w..l,.. 4.1.•. 341,303,797 L6.1, N�a. m5o s asc 40 155,53051. ist �14 014 41,344.453 11,764,329 12,422.430 63.904.234 72,975,060 53.091.322 44,123.503 344,201,96E 029 f. 751 n 3,. n :..•- ,E35 0.393 46a4.:1 Is5.0J 47J, This report is intended solely for the information and internal use of the intended users) and should not be used or relied upon by any other person or entity. ❑eloitte Advisory 129 �.� KTR REAL ESTATE ADVISORS QUALIFICATIONS Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Addenda jKTR REAL ESTATE ADVISORS PROFESSIONAL QUALIFICATIONS THOMAS J. TENER, MAI MANAGING MEMBER Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Addenda EXPERIENCE Mr. Tener is a founding principal of KTR Real Estate Advisors LLC. He has more than 30 years of broad based experience as a real estate professional, including appraisal, physical condition assessments, environmental site assessments, construction, development, brokerage, property management and receivership. Prior to forming KTR, Mr. Tener was the Chief Operating Officer of a national full service commercial due diligence firm. Under his direction, this firm provided appraisal, environmental, engineering and construction consultation on thousands of investment grade properties annually. Mr. Tener has extensive experience in appraisal, including such unique properties as the former Shoreham Nuclear power plant, the Capital Automotive REIT Portfolio, and Kaufman Astoria Studios, as well as complex mixed -use development projects and conversions (such as Manhattan West, the Dime at 277 South Fifth Avenue, Essex Crossing, 108 Leonard Street and 9t' & Colorado in Denver, CO), and numerous trophy office buildings. He has served as a neutral and party appointed arbitrator on numerous valuation issues, including ground rent and fair market rent determinations. Mr. Tener has been a guest lecturer and panel member on various appraisal and due diligence topics. In addition, Mr. Tener has been qualified as an expert witness in New York State Supreme Court and in conjunction with arbitration proceedings. Mr. Tener is a Board Member and Vice President of the New York Metropolitan Chapter of the Appraisal Institute. LICENSES New York Certified General Appraiser #46000033225 Colorado Certified General Appraiser #100040701 Florida State -Certified General Appraiser RZ4117 Georgia Certified General Appraiser #343948 Michigan Certified General Appraiser #1201074378 New York Real Estate Broker USCG — Third Assistant Engineer (Inactive) MEMBERSHIPS Appraisal Institute —Designated Member MBA of New York National Council of Real Estate Investment Fiduciaries Mortgage Bankers Association of America Institute of Real Estate Management EDUCATION United States Merchant Marine Academy, Kings Point, NY • BS Marine Engineering BS Mechanical Engineering and Thermal Systems Design Melonim KTR REAL ESTATE ADVISORS Florentino L. Gonzalez, Esq. Shutts & Bowen LLP Miami Freedom Park February 25, 2021 Addenda Ron DeSantis, Governor db»r STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION Halsey Beshears, Secretary FLORIDA REAL ESTATE APPRAISAL BD THE CERTIFIED GENERAL APPRAISER HEREIN IS CERTIFIED UNDER THE PROVISIONS OF CHAPTER 475, FLORIDA STATUTES TENER, THOMAS 1 EXPIRATION DATE: NOVEMBER 30, 2020 Always verify licenses online at MyFloridaLicense.com Do not alter this document in any form. This is your license. It is unlawful for anyone other than the licensee to use this document. Ron DeSantis. Governor Halsey Beshears, Secretary STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION FLORIDA REAL ESTATE APPRAISAL BD LICENSE NUMBER: RZ4117 EXPIRATION DATE: NOVEMBER 30, 2022 THE CERTIFIED GENERAL APPRAISER HEREIN IS CERTIFIED UNDER THE PROVISIONS OF CHAPTER 475, FLORIDA STATUTES TENER, THOMAS J 551 MADISON AVE SUITE 301 NEW YORK NY 10022 ISSUED: 11/19/2020 Always verify licenses online at MyFloridaLicense.com Do not alter this document in any form. This is your license It is unlawful for anyone other than the licensee to use this document. Deloitte Deloitte Advisory Shutts & Bowen, LLP Appraisal Report of: Melreese Golf Course (Miami Stadium) 1400 NW 37th Avenue Miami, Miami -Dade County, FL 33125 Date of Value: October 23, 2019 Report Date: September 21, 2020 This appraisal report is intended solely for the informational purposes and internal use of the Client (as defined below), and is not intended to be and should not be used by any other person or entity. No other person or entity is entitled to rely, in any manner or for any purpose, on this report. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory Deloitte Florentino Gonzalez, Esq. Partner Shutts & Bowen, LLP 200 South Biscayne Boulevard, Suite 4100 Miami, Florida 33131 September 21, 2020 Re: Professional Real Estate Valuation Services for Shutts & Bowen, LLP Dear Mr. Gonzalez: Shutts & Bowen, LLP September 21, 2020 Deloitte Transactions and Business Analytics LLP 30 Rockefeller Plaza New York, NY 10112 USA Tel: +1212 436 2000 Fa: +1 212 436 5000 www.deloitte.com Deloitte Advisory' ("Advisor" or "we" or "our") is pleased to have assisted Shutts & Bowen, LLP ("Counsel") in connection with its representation of the City of Miami (the "City") with the provision of the services described in our engagement letter dated September 12, 2019. Each of Counsel and the City is hereinafter referred to individually and collectively as "Client." Subsequent to your request and authorization, we have completed a valuation of a portion of the property commonly known as the Melreese Golf Course (hereinafter the "Property" or the "Subject") located at 1400 NW 37th Avenue, Miami, Florida. The Property is planned to be ground - leased to Miami Freedom Park, LLC ("MFP") for the proposed development of a mixed -use commercial real estate project including retail and ' As used in this report, "Deloitte Advisory" means Deloitte Transactions and Business Analytics LLP. Shutts & Bowen, LLP September 21, 2020 entertainment, tech -hub, hotel and a 25,000-seat soccer stadium to house a major league soccer ("MLS") team. The purpose of this valuation is to estimate the market value of the fee simple interest in the Property as of the effective date of value, October 23, 2019 (the "Valuation Date"), and subsequently estimate the market ground rent of the Property. This appraisal is based on conditions and market data available as of the Valuation Date. The intended use of this valuation report is to assist the Client by providing valuation advice and recommendations to assist it in estimating the market rent of the land for its management planning requirements. The analysis was conducted in accordance with generally accepted standards, as set forth by the Appraisal Institute. This valuation report is prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation, the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. Accordingly, we performed such tests and procedures, as we considered appropriate under the circumstances. In accordance with the guidelines set out by the Appraisal Institute, we are independent of the Client and MFP. We have no current or prospective financial interest in the Property. Our fee for this appraisal was in no way dependent upon or influenced by the results of our analysis. As part of this appraisal, the Client provided us with certain information, upon which we have relied upon. Furthermore, we have had meetings and discussions with the Client personnel and MFP advisors concerning the Property and planned development included in this appraisal. In performing the analysis contained in this report, we have relied on written information provided to us by the Client and have incorporated, to the extent we considered it reasonable to do so, such information into our analysis of the Property. This opinion was prepared by Deloitte Advisory for the Client. The value conclusion is made in response to a request for an appraisal opinion as to specified matters set forth by the Client. In preparing our analysis, we have not performed an analysis of the Client, MFP or any other party and its ability to meet its obligations. The conclusion in this appraisal reflects, among other things, information obtained regarding its specifications, and information concerning the Property. As part of this appraisal we have not audited this data. Therefore, we issue no warranty or other form of assurance regarding their accuracy. Accordingly, our conclusions reflect our best judgment as appraisers in light of the information available to us at the time of preparation. Any use in which any party, other than the Client, makes of this opinion or any reliance on or decisions to be made based on it, are the responsibility of that party. By using this opinion, such any party other than the Client ("Other Party"), consents that Deloitte Advisory has no liability with respect to such reliance or decisions. Deloitte Advisory accepts no liability for damages, if any, suffered by any such Other Party as a result of decisions made or actions taken based on this opinion. While the Client may rely on the information and conclusions contained in this report, any decisions made by the Client regarding such information is the responsibility of the Client. This report is not to be reproduced in whole or in part without the written permission of Deloitte Advisory. Shutts & Bowen, LLP September 21, 2020 We made no investigation of and assume no responsibility for title or liabilities against the property appraised. This report is subject to the General Business Terms and Conditions between Deloitte Advisory and the Client. The report, which delineates the scope, procedures and conclusions, is presented in summary format as a restricted appraisal report. The accompanying statement of appraisal assumptions and limiting conditions, certification, and appraisers' qualifications are integral parts of the report. If you have any questions regarding the results of the analysis, contact Nathan Florio (212) 436-3451. Respectfully submitted, Z7e.gs.t-t& / ta.e-ftac.-&-ert-d- 9ce- gazia-142.4-d-- Igrtagita.ez.- 4,4/13 Deloitte Transactions and Business Analytics LLP By Nathan C. Florio, Principal Our valuation does not include any consideration of the likely impact of Coronavirus (COVID-19) on the real estate market. Our opinion is based on prevailing economic, market and other conditions as of the Effective Date. Such conditions can change significantly over relatively short periods of time. Recent volatility in capital markets and the current economic outlook have created significant uncertainty with respect to the valuation of real estate. Therefore, our conclusions may be more susceptible to change than would normally be the case. Shutts & Bowen, LLP September 21, 2020 Executive Summary Property Name: Property Address: CBSA: Location: Assessor Parcel Number(s): Property Type: Property Sub Type: Interest Appraised: Intended Use (No other use or uses authorized without express written consent): Intended User (No other user or users authorized without express written consent): Effective Date of Value: Valuation Date Type: Owner of Record: Zoning: Land Area: Excess Land: Ground Lease: Melreese Golf Course 1400 NW 37th Avenue, Miami, FL Miami -Fort Lauderdale -Pompano Beach, FL MSA Six miles northwest of downtown Miami CBD and adjacent to Miami International Airport. 01-3132-000-0080 / 01-3132-000-0090 Land Current Use - Golf Course Proposed Use - Mixed Use Commercial & Park / Recreation Fee Simple Management Planning Shutts & Bowen, LLP / City of Miami 10/23/2019 Retrospective Valuation City of Miami Special Area Plan ("SAP") 73.50 Acres or 3,201,660 Square Feet No No Comments: The Property represents a 73.50 acre portion of a 131.1 acre site owned by the City of Miami. According to the Miami -Dade County tax assessor website the Property spans two respective tax parcels as listed above. Shutts & Bowen, LLP September 21, 2020 Executive Summary 1400 NW 37th Avenue, Miami, FL Improvements: Number of Buildings: Number of Stories: Gross Building Area: Net Rentable Area: Year Built: Year Renovated: Investment Class: Construction Class MVS: Construction Quality/Cost Type MVS: Building Condition Observed: Value Type and Definition: Highest and Best Use: As Vacant: As Improved: 4 1 10,470 Square Feet 1972 2007 & 2009 N/A N/A Good Average Condition Market Value, which is defined in The Dictionary of Real Estate Appraisal, 6th Edition, 2015 as: "The most probable price that the specified property interest should sell for in a competitive market after a reasonable exposure time, as of a specified date, in cash, or in terms equivalent to cash, under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, for self-interest, and assuming that neither is under duress." Mixed -Use Commercial Development Hold for Mixed -Use Commercial Development Current use at date of value: City of Miami Public Golf Course (a.k.a. Mereese Golf Course) Shutts & Bowen, LLP September 21, 2020 Executive Summary 1400 NW 37th Avenue, Miami, FL Valuation Assumptions: Retail Phase I & Retail Phase II Tech Hub Phase I & Tech Hub Phase II Current Occupancy: N/A Current Occupancy: N/A Stabilized Occupancy: 97.00% Stabilized Occupancy: 96.00% Overall Capitalization Rate: N/A Overall Cap talization Rate: N/A Terminal Capitalization Rate: 7.00% Terminal Capitalization Rate: 6.50% Discount Rate: 10.50% Discount Rate: 10.25% Full Service Hotel Limited Service Hotel Current Occupancy: N/A Current Occupancy: N/A Stabilized Occupancy: 90.00% Stabilized Occupancy: 90.00% Overall Capitalization Rate: N/A Overall Cap talization Rate: N/A Terminal Capitalization Rate: 7.75% Terminal Capitalization Rate: 8.25% Discount Rate: 11.50% Discount Rate: 11.50% West & South Parking Current Occupancy: N/A Stabilized Occupancy: 96.50% Overall Capitalization Rate: N/A Terminal Capitalization Rate: 8.50% Discount Rate: 10.00% Value Indicators Total Income Capitalization Approach: $65,900,000 Direct Cap talization Method: N/A Discounted Cash Flow Method: $65,900,000 Sales Comparison Approach: $60,800,000 To $67,200,000 Cost Approach: Not Applicable ESTIMATED MARKET VALUE Value ID Appraisal Premise Interest Appraised Date of Value S/PSF Value Value A As If Remediated Fee Simple 10/23/2019 $20.58 $65,900,000 Value B As Is Fee Simple 10/23/2019 $15.27 $48,900,000 GROUND RENT OPTION SUMMARY Options Interest Appraised Date of Value Market Rent Total Rent Scenario A Leased Fee 10/23/2019 $1.34 $4,283,500 Scenario B Leased Fee 10/23/2019 $0.99 $3,178,500 5% of Revenues Leased Fee 10/23/2019 $1.62 $5,173,334 Minimum Rent per Contract Leased Fee 10/23/2019 $1.12 $3,577,365 Shutts & Bowen, LLP September 21, 2020 Executive Summary 1400 NW 37th Avenue, Miami, FL Exposure Period (Months): Extraordinary Assumptions: Hypothetical Conditions: 12 to 24 months - As per discussions with the Client and based on our understanding the Miami Comprehensive Neighborhood Plan designates the Leased Premises as Recreation and Zoning Ordinance 13114 (i.e. Miami 21) designates the Leased Premises as Civic Space. Development thresholds include a maximum Lot Coverage of 25% of the net lot area of the CS -zoned property. Approximately 10.5 acres of the Leased Premises will seek to be rezoned to accommodate for the new MLS Soccer Stadium, Hotel and Off ce Uses wh ch will require a zoning application process review by the City of Miami and State of Florida for the changes to be cons dered at various public hearings. The remaining acreage of the Leased Premises will remain with the Recreation and Civic Space designations. - There will be an extraordinary assumption that cost estimates supplied or provided by the City will not be independently reviewed, audited or corroborated by the Advisor. In addition, the analysis will not consider the $20,000,000 contribution for the maintenance of a 57.6-acre public park or the $5,000,000 contribution for the Baywalk-Riverwalk Project. - In addition, for Value B (as outlined below) there is an extraordinary assumption that cost estimates supplied or prov ded by the City will not be independently analyzed, audited or corroborated by the Advisor. In addition, it is outside the scope of this analysis to consider any proposed contributions for the creation and/or maintenance of a city park pursuant to the "no net loss of park space" provisions of the City of Miami Municipal Code. - This appraisal is based on the hypothet cal condition that the City of Miami can achieve a land use amendment and rezoning of the site to Special Area Plan ("SAP") necessary to develop the subject s to to a higher density, mixed -use, and its highest and best use. If not, our analysis and value conclusions will be impacted, and we reserve the right to amend this report entirely. - As per discussions with the Client, and based on our understanding, pursuant to Corrective Action Plans filed w th Miami Dade County DERM dated April 16, 2014, by SCS Engineers on behalf of the City of Miami, the City discovered buried incinerator on the Subject Property during a 2005 Lim ted Phase II Soil Assessment. In order to permit the construction of the New Park and allow for the development of the Leased Premises, the Subject Property will require environmental remediation. Pursuant to the terms of the Lease Agreement, MFP will be responsible for the cost of the remediation necessary to obtain required approvals to allow public access to the New Park and to permit for development of the Leased Premises. - As it is known that the Property contains an environmental substance and/or material that requires remediation prior to or during development, the market value of the Property for purposes of calculating Value A (as set forth below) will be cons dered on an "as if remediated" (ie "clean" or "unimpaired") basis and, as such, the Value A estimate will exclude any cost or time considerat ons relative to the remediat on of the Property as of the Valuat on Date. Shutts & Bowen, LLP September 21, 2020 Executive Summary - Subject Aerial Photograph Table of Contents Introduction 4 Property Identification 4 Purpose of the Appraisal 4 Report Type 5 Use of the Appraisal and Intended User 5 Definition of Market Value 5 Definition of Appraised Interests 5 Date of Inspection and Date of Analysis 6 Exposure Time 6 Property History 6 Scope of the Appraisal 6 Extraordinary Assumptions and Hypothetical Conditions 7 Competency Provision 8 Regional Economic Analysis Neighborhood Analysis This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. 9 19 Shutts & Bowen, LLP September 21, 2020 Deloitte Advisory 1 Shutts & Bowen, LLP September 21, 2020 Property Information 21 Site Description 21 Proposed Site Plan 24 Property Tax 26 Zoning 29 Market Analysis 34 Miami Retail Market 34 Miami Office Market 51 Miami Tech -Hub Market 70 Miami Hotel Market 72 Mixed -Use Developments 90 Soccer Stadium Analysis 93 Highest and Best Use 95 Valuation Analysis 96 Sources of Information 96 Approaches to Value 96 Applicability of Approaches 97 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 2 Income Capitalization Approach Scenario A (As if Remediated) Sales Comparison Approach Reconciliation of Value As -If Remediated Income Capitalization Approach Continued 98 98 132 140 141 Scenario B (As Is) 141 Land Market Rent Assumptions and Limiting Conditions Certification Qualifications This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. 142 146 149 151 Shutts & Bowen, LLP September 21, 2020 Deloitte Advisory 3 Shutts & Bowen, LLP September 21, 2020 Introduction Property Identification The Property is currently known as the Melreese International Links — Melreese Country Club and operates as a golf course managed by Delucca Enterprises under a professional services agreement that expires on or about September 30, 2021. The Property spans two adjacent tax parcels, 01-3132-000-0080 and 01-3132-000-0090, totaling approximately 152 acres and located at 1400 NW 37th Avenue and 1802 NW 37th Avenue in Miami, Florida, respectively. The parcels are improved with a golf course and four golf course related buildings that total approximately 10,470 square feet. At the southeast corner of the overall site is Grapeland Park which has multiple baseball fields, sports courts, and a water park. Both parcels are under ownership of the City of Miami Department of P&D Asset Management Division. The Property represents a 73.50-acre portion of the Melreese Golf Course and is planned to be leased to MFP for the proposed development of a mixed -use commercial development which will include a 25,000-seat soccer stadium to house a MLS team. According to a Client provided draft Ground Lease and Master Development Agreement by and between the City of Miami and Miami Freedom Park, LLC, the Property consists of 73.5 acres of land. The Agreement notes the exact acreage of the Property is subject to confirmation upon completion of a survey, which shall exclude Grapeland Park and adjacent County owned properties. The Property is identified by the Miami - Dade County tax assessor of the following parcel as follows: Property Address 1400 NW 37th Avenue 1802 NW 37th Avenue County Parcel No. Miami -Dade 01-3132-000-0080 Miami -Dade 01-3132-000-0090 Further, we understand that the Property is known to contain hazardous materials and/or substances that will require environmental remediation. Purpose of the Appraisal The purpose of this appraisal is to estimate the market value of the Property as of the Valuation Date and subsequently estimate the market ground rent of the Property. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 4 Shutts & Bowen, LLP September 21, 2020 Report Type Standards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice sets forth two reporting options, as follows: • Appraisal Report: should summarize all pertinent data considered and summarize all analyses developed in arriving at the conclusion of value. • Restricted Appraisal Report: merely states the major conclusions without discussion of the data considered and the analyses conducted. This report is intended to comply with the requirements for an Appraisal Report. Use of the Appraisal and Intended User The intended use of this valuation report is to assist the Client in estimating the market rent of the Property for its management planning activities. Any other use of this document for any other purpose or by any other party is strictly prohibited. Definition of Market Value The type of value is market value as defined as follows: Market Value — "The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress."2 Definition of Appraised Interests This appraisal considers the applicable interest in the Property which is the fee simple estate. We have also estimated a market rent for the Property based on a leased fee interest. The formal definition of this interest is as follows: 'The Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: The Appraisal Institute, 2015). This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 5 Shutts & Bowen, LLP September 21, 2020 Leased Fee Estate — "An ownership interest held by the lessor, which includes the right to the contract rent specified in the lease plus the reversionary right when the lease agreement expires."3 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."4 Date of Inspection and Date of Analysis Nathan C. Florio, MAI, CRE, MRICS has made an inspection of the Property that is the subject of this report on October 23, 2019. Exposure Time Exposure time is defined as 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 the market value on the effective date of the appraisal. Exposure time is presumed to precede the effective appraisal date. Based on discussions with market participants familiar with the Property and its market, the appropriate exposure time is estimated to be approximately 12 to 24 months. Property History The Standard Rule 1-5(b) states that an appraiser must consider and analyze any sales of the appraised property that occurred within the last three years. To the best of our knowledge and belief, there has been no executed sales transactions, contracts, or options impacting the Property during the three years prior to the Valuation Date. Scope of the Appraisal The purpose of this analysis is to estimate the market value of the Property as of the Valuation Date. In estimating the market value of the Property, we have considered the three approaches to value generally recognized by the appraisal profession. These include the cost, income, and sales comparison approaches. 3 The Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: The Appraisal lnstitute, 2015). The Appraisal lnstitute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: The Appraisal lnstitute, 2015). This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 6 Shutts & Bowen, LLP September 21, 2020 This valuation engagement was conducted and this report was prepared in accordance with our understanding and interpretation of the USPAP of The Appraisal Foundation. This report is identified as a Restricted Appraisal Report as defined in Standard 2 of USPAP. The opinions and conclusions set forth in this restricted report may not be understood properly without additional information contained within our work file. The scope of the appraisal relates to the extent to which information is collected, confirmed and reported in this document. In preparing this report, we have: o received information provided by the Client related to the Property; o collected market information from the marketplace; and o considered the cost, income, and sales comparison approaches to value the Property and the potential market ground rent thereof. We relied on the income and sales comparison approaches to value because we believe (1) each is appropriate for the valuation analysis, and (2) sufficient information was available for their use. Note that this appraisal is of the real property and only includes deductions of furniture, fixtures, or equipment related to the hotels in the income approach portion of the analysis. Extraordinary Assumptions and Hypothetical Conditions According to the 2018-2019 Edition of USPAP, an extraordinary assumption is defined as follows: An assignment -specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser's opinions or conclusions. • As per discussions with the Client and based on our understanding the Miami Comprehensive Neighborhood Plan designates the Leased Premises as Recreation and Zoning Ordinance 13114 (i.e. Miami 21) designates the Leased Premises as Civic Space. Development thresholds include a maximum Lot Coverage of 25% of the net lot area of the CS -zoned property. Approximately 10.5 acres of the Leased Premises will seek to be rezoned to accommodate for the new MLS Soccer Stadium, Hotel and Office Uses which will require a zoning application process review by the City of Miami and State of Florida for the changes to be considered at various public hearings. The remaining acreage of the Leased Premises will remain with the Recreation and Civic Space designations. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 7 Shutts & Bowen, LLP September 21, 2020 • There will be an extraordinary assumption that cost estimates supplied or provided by the City will not be independently reviewed, audited or corroborated by the Advisor. In addition, the analysis will not consider the $20,000,000 contribution for the maintenance of a 57.6-acre public park or the $5,000,000 contribution for the Baywalk-Riverwalk Project. • In addition, for Value B (as outlined below) there is an extraordinary assumption that cost estimates supplied or provided by the City will not be independently analyzed, audited or corroborated by the Advisor. In addition, it is outside the scope of this analysis to consider any proposed contributions for the creation and/or maintenance of a city park pursuant to the "no net loss of park space" provisions of the City of Miami Municipal Code. According to 2018-2019 Edition of USPAP, a hypothetical condition is defined as follows: A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results but is used for the purpose of analysis. • This appraisal is based on the hypothetical condition that the City of Miami can achieve a land use amendment and rezoning of the site to Special Area Plan ("SAP") necessary to develop the subject site to a higher density, mixed -use, and its highest and best use. If not, our analysis and value conclusions will be impacted, and we reserve the right to amend this report entirely. • As per discussions with the Client, and based on our understanding, pursuant to Corrective Action Plans filed with Miami Dade County DERM dated April 16, 2014, by SCS Engineers on behalf of the City of Miami, the City discovered buried incinerator on the Subject Property during a 2005 Limited Phase II Soil Assessment. In order to permit the construction of the New Park and allow for the development of the Leased Premises, the Subject Property will require environmental remediation. Pursuant to the terms of the Lease Agreement, MFP will be responsible for the cost of the remediation necessary to obtain required approvals to allow public access to the New Park and to permit for development of the Leased Premises. • As it is known that the Property contains an environmental substance and/or material that requires remediation prior to or during development, the market value of the Property for purposes of calculating Value A (as set forth below) will be considered on an "as if remediated" (ie "clean" or "unimpaired") basis and, as such, the Value A estimate will exclude any cost or time considerations relative to the remediation of the Property as of the Valuation Date. Competency Provision The appraiser identified in this report meet the Competency Provision of USPAP. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 8 Shutts & Bowen, LLP September 21, 2020 Regional Economic Analysis The following narrative and tables are excerpts from Moody Analyticss describing the economic state of the Miami Regional Area: Recent Performance. The economic expansion in Miami -Miami Beach -Kendall (MIA) has slowed. Though the area's jobless rate has dipped to a 12-year low, the decline over the last year has been the weakest since the start of the recovery. Average hourly wages have reached an all-time high, but wage growth has retreated to less than half the statewide and national rates. After accelerating at the end of last year, house price growth slowed in the first half 2019. International Appeal. By some measures, MIA is America's leading global city. It is the only metro area or division in the U.S. where more than half of its residents are foreign -born. The area welcomed 6% of the nation's immigrants in 2018, even though it is home to less than 1% of the U.S. population; MIA easily ranks first in immigration based on the location quotient computed from the ratio of these percentages. It is the second most popular U.S. destination for overseas visitors, after New York City, and the airport handles the nation's second largest volume of international cargo, after Anchorage AK. The economy is shaped by these global linkages. The area's outsize employment in wholesale trade, logistics, finance and leisure/hospitality is tied to its standing as a leading global city. MIA will enjoy above -average job growth in each of these industries over the next 12 months, but growth will be tested soon afterward as a worldwide slowdown weakens demand for its global service providers. Over the long run, MIA's international appeal will add diversity and vitality to its labor force, and its economy will strengthen as a result, but opposition to immigration among the U.S. electorate is a risk. Construction. New jobs for builders and contractors should provide support during the next slowdown. Since the end of the recession, homebuilding in MIA has been tilted toward multifamily dwellings —over the last year, nearly 80% of all permits were issued for apartments and condominiums. Among metro areas with more than 1 million residents, only San Francisco and New York City issued a larger share of multifamily permits over this period. More construction jobs will be added over the next few years as developers bring single-family homebuilding in balance with multifamily construction, which was the tendency in MIA for 15 years prior to the Great Recession. 5 Moody's Analytic, Precis® U.S. Metro, Miami -Miami Beach -Kendall, Florida, by Kwame Donaldson, August 2019. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 9 Shutts & Bowen, LLP September 21, 2020 The scarcity of developable land adds risk to this forecast. Builders may favor multifamily construction because the area is hemmed in by the Atlantic Ocean and the Everglades, and it is running low on vacant tracts of land. If so, construction job growth will be somewhat less robust than anticipated, new midrise complexes will replace existing single -story buildings, and housing affordability will tumble. Media Capital. MIA's status as the media capital of Spanish-speaking America will contribute to its growth. Three of the most widely available Spanish -language cable channels in the U.S.-Univision, Telemundo and UniMas-have headquarters or major production operations in MIA. Employment at these networks is not at risk in the short or intermediate term; the Hispanic population in the U.S. is growing six times faster than the non -Hispanic population. Benefits will also accrue in the long term; the nationwide exposure that is generated by these cable channels makes visiting and living in MIA attractive to Hispanics, the nation's largest minority. The economy in Miami -Miami Beach -Kendall will grow in the short run, but o global slowdown will be a challenge by the end of next year. MIA's international character and its high -skilled, bilingual workforce will help it to outperform the nation in the long run. 2013 2014 2015 2016 2017 2018 INDICATORS 2019 2020 2021 2022 2023 2024, 115.2 118.1 122.3 125.7 128.7 132.7 7.8 2.5 3.5 2.8 2.5 3.1 1,056.6 1,089.2 1,125,6 1,157.6 1.174.3 1,197.2 2.4 3.7 3.3 2.8 7.5 7.9 7.5 6.6 5.6 4.9 4.3 3.7 0.4 8.6 7.1 0.9 4.3 4.8 Gross metro product (C12$ bit) % change Total employment (ths) % change Unemployment rate (%) Personal income growth (°ra) 43.1 43.7 44.8 46.9 49 9 53.0 Median household income ($ ths) 2,635.6 2,660.4 2,688.2 2,722.6 2,744.9 2.761.6 Population (ths) 7.3 0.9 7.0 1.3 0.8 0.6 % change 21.6 11.5 14.7 21.8 10.6 7.1 Net migration (ths) 2,266 2,077 2,800 2,873 2,285 2,449 Single-family permits (#) 8,050 5,654 9,817 6,444 8,269 9,254 Multifamily permits (#) 207.1 232.2 255.1 280.0 303.4 329.2 FHFA house price (1995Q1=100) 1361 138.2 140.8 144.6 147.7 150.7 2.5 7.5 7.9 2.8 2.7 2.0 1,223.5 1,242.6 1,240.2 1, 251.7 1,262.8 1,271.3 2.2 7.6 -0.2 0.9 0.9 0.7 3.4 3.8 4.3 4.5 4.5 45 5.7 5.9 4.7 6.3 5.8 5.3 56.1 58.7 60.1 62.2 64.4 66.7 2,790.2 2,818.4 2,845.8 2,875.1 2,904.7 2,934.6 1.0 7.0 7.0 1.0 7.0 7.0 19.4 18.7 181 20.2 20.8 21.4 2,768 4,414 5,976 7,163 7,334 7,207 7,068 6,912 6,952 7,233 7,298 7,214 345.1 344.4 335.4 324.1 316.4 316.8 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 10 Shutts & Bowen, LLP September 21, 2020 • 3-MO MA Feb19 Mar19 Apr19 May19 jun19 Ju119 1.6 2.7 3.0 .6 3.5 3.4 61.8 62.2 62.4 62.5 1 62.4 59.9 60.2 60.3 60 3 60.3 351 34.9 35.0 35.3 3 107.8 107.6 107.3 107.2 1071 1; 7 7.11 2,846 2,696 2,505 2,231 2,233 7,735 9,u96 12,921 10,825 7,592 Employment, change, the Unemployment rate, % Labor force participation rate, 96 Employment -to -population ratio, % Average weekly hours, Industrial production, 2O12-100 Residential permits, single-family, it Residential permits, multifamily, It .54; Unchanged from prior 3-mo MA 1 Sources: BLS, Census Bureau Moody's Analytics 130 125 120 115 110 105 100 95 90 85 JAN 2009=100 09 10 11 12 13 14 15 16 17 18 19 MIA FL Source: Moody'sAnalytics U.S. CURRENT EMPLOYMENT TRENDS DIFFUSION INDEX 10 8 6 4 2 0 -2 -4 % CHANGE YR AGO 1 1 1 14 15 16 17 18 19 •� Government Goods producing Private services Sources: BL5, Moody'sAnalyucs % CHANGE YR AGO, 3-MO MA Total Mining Construction Manufacturing Trade Trans/Utilities Information Financial Activities Prof & Business Svcs. £du & Health Svcs. Leisure & Hospitality Other Services, Government CJ Sources: BLS. Moody's A nalyucs Ju118 1.4 0.0 9.3 -0.1 -0.❑ 5,0 1.0 0.8 3.2 1.1 -0.3 0.3 0.4 Jan 19 Jul 19 2.1 2.4 - 0.0 -0.0 9.0 6.0 2.5 1.5 - 0.5 0.1 6.7 6.0 4.1 2.0 -0.1 -0.6 75 70 65 60 55 3.2 2.4 2.4 5.3 50 2.3 3.1 1.9 2.5 0.6 0.2 3-DIGIT NAICS LEVEL, 6-MO MA 13 14 15 16 17 18 u. s MIA FL Sources BL 5, M000'y's Analytics 19 This report Is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 11 Shuns & Bowen, LLP September 21, 2020 RELATIVE EMPLOYMENT PERFORMANCE HOUSE PRICE JAN 2009=100 FORECAST VS. 6 MO PRIOR 1998Q1-100, NSA 130 ' 350 125 2-Yr 5-Yr 300 120 250 115 110 200 105 150 100 <1> <! 100 95 90 1 1 1 1 1 1 1 1 1 1 1 1 1 1 09 10 11 12 13 14 15 16 17 18 19F 20F 2IF 22F 23F 50 I I I I I I I 98 01 04 07 10 13 16 19 ! MIA — FL — U.S. Sources: FHFA, Moody's Analytirs 11/4.11A — FL — U.S. Sources. BLS, Moody'sAnalytics VACANCY RATES HOUSE PRICE TRENDS HOUSING AFFORDABILITY HOMEOWNER, % HOUSES FOR SALE % GREATER THAN 100=MORE AFFORDABLE 80 240 220 60 200 -} 180 0 1 2 3 40 160 140, OROR RENT RENTAL, % INVENJT1F 20 120 '100 1 a le_ 60 i Z0 40 20 1 1 I 1 I I I 96 99 02 05 08 11 14 17 - MIA FL U.S. Sources: NAR, Moody's Ana tytics 0 2 4 6 8 10 12 ■ '.IIA 1111 FL . U.S. Sources: Census Bureau, ACS, Moody's Ana1ytic , 2077 40 1 1 I I 1 98 01 04 07 10 13 16 19 ■ Overvalued Undervalued Sources: FHFA, Moody'sAna[ytics This report Is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 12 Shuns & Bowen, LLP September 21, 2020 EMPLOYMENT AND INDUSTRY TOP EMPLOYERS University of Miami Jackson Health System Publix Super Markets Inc. Baptist Health Systems of Southern Florida 11,353 American Airlines 11,031 Miami Cardio Vascular Institute 10,000 AT&T 6,629 12,818 12,100 12,000 West Kendall Outpatient Center 5,000-9,999 Florida International University 3,534 American Sales & Management 3,500 Carnival Cruise Lines 3,500 Miami Children's Hosplta1 3,500 Macy's 3,368 Mount Sinai Medical Center 3,321 Homestead Air Reserve Base _ 3,250 JPMorgan Chase and Co. 3,200 Florida Power & Light Co. 3,011 Winn -Dixie Stores Inc. 3,000 Royal Caribbean Intl .A Celebrity Cruise 2,989 Veterans Affairs Medical Center 2,500 5nurres: Gty of Miami Beach, 2016, Crypt Miarn i, 2016, Florida - earch and Economic information Database; 2017, South Florida ius+nessJoernaf Book cf lists, 2017 PUBLIC Federal 20,140 State 25,950 Local 95,662 2018 INDUSTRIAL DIVERSITY Most Diverse (U.S.) 1.00- 0.80 0.60 0.40 - 0.20 0.00 0.61 Least Diverse EMPLOYMENT VOLATILITY Due to U.S. fluctuations Relative to U.S. 1009'e - 80% 60% 40% 20% 97 140 IL Not due to U.S Due to U S ■ MIA US This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 13 Shutts & Bowen, LLP September 21, 2020 EXPORTS Product Food and kindred products Chemicals Primary metal manufacturing Fabricated metal products $ mil ND 2,226.1 2,S94.i ND Machinery, except electrical 2,355.6 Computer and electronic products 9,112.0 Transportation equipment 5,668,8 Miscellaneous manufacturing N❑ Other products 12,823.8 Total 34,780.5 Destination $ i7311 Africa 309.6 Asia 4,156.5 European Union 3,989.9 Canada & Mexico 3,629.9 South America 11,734.4 Rest of world 10,9601 Total 34,780.5 %ofCDP 10.1 Rank among all metro areas Sources: BEA, International Trade Administration, Moody's Analytics, 2017 67 EMPLOYMENT IN NEW COMPANIES, % OFTOTAL I 0.0 0.5 1.0 1.5 2.0 . MIA ■ FL ■ U.S. Sources: Census Bureau, Moody's Analytics, avg 2010-2014 PRODUCTIVITY REAL OUTPUT PER WORKER, $ 501 74,365 II MIA FL El VS Sources: BEA. Moody's Analytics, 2011 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 14 Shutts & Bowen, LLP September 21, 2020 , , i i BY WAGE TIER U.5.=100 HIGH-TECH EMPLOYMENT Location Employees NAICS Industry Quotient (ths) Total Ths 96 of total 6211 Officesot physicians 1.3 24.8 5411 Legal services 2.6 22.5 z GVF Federal Government 0-9 19.7 5221 D o toiy rredrt IntermedlatIon 1.2 15.4 lltltlt■ Undlabor Energy" Stele and local taxes Moe rent l MIA 30.6 2.6 U.S. 7261.0 4-9 GVL Local Government 0.8 92.8 o 6221 General medical and swat hospitals 1.3 44.7 HOUSING -RELATED EMPLOYMENT 1 4811 Scheduled air transportabon 4 5 151 2382 Building equipment contractors 4.8 13.2 Ths % of total 7725 Restaurants and other eating places 1.0 81.8 7211 Traveler accommodation 2.2 32.0 CJ GVS State Government 0.7 26.0 4451 Gower," stores 1.2 25 e" 'o-- 5CKi(Ce Molody s Ar ayGG, 2018 MIA 120.8 10.1 1 1 { { { o :.0 40 60 Bo 1 G 7 1ZZa 140 2012 ■ 2017 source Moody's Analyt cs t BC U.S. 14,296-2 9.6 Source Moody's Anafytics, 2018 GENERATIONAL BREAKDOWN EDUCATIONAL ATTAINMENT POPULATION BY AGE, % POPULATION BY GENERATION, % % OF ADULTS 25 AND OLDER r75 70-74 - = ===65-69 ke1. G 2 %mama! Gee x Ban 8 arxn 100 80 10 19 25 11 19 30 12 20 29 55-59 50,54 .60 a. _ 5-4 40-44 35-39 b. 1 44 20 Q y 28 1 29 12 27 12 30-34 255-29 20-24 15-19 Siam a G,ea e1 MIA FL U.J. ■ < High school II ligi school II Some college it Co ksge Graduate stood cxmces Census Bureau, ACS, Mcxxy's Analytks, 20T7 1Qr 14 1 0 5 10 iMA Sources census Bureau, Moody's 1 15 20 25 US. Matyl7cs, 2018 30 - 0 1 2 3 4 5 6 MIA U.S. Sources: Census Burear t. Moody`s Anayt1Cs, 2018 7 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 15 Shutts & Bowen, LLP September 21, 2020 Lan tten HS Heph z f iod Some Canoe Aaaoaste'80011,106 Graduate SKILLS MISMATCH %OF TOTAL 0 5 10 15 20 25 30 Oocupshens I ParmAithal Shl rag. Census&ura. AC5, M0odg1 AAalytla, 2017 35 Urderedunated Bdrlrwd Qrereduessed MIA U.S ECONOMIC DISENFRANCHISEMENT 54 48 41 34 _ PER CAPITA INCOME STHS i f f l l f t t 09 10 11 12 13 14 15 16 17 18 2016 MIA S4e•047 }i 341,41T U.S. 353,112 sarca BEA, A 04X111AlWrFa bidets 2017 Glnico4Hkient 0.51 Palma ratio 3,6 Poverty rate 16.6% 'Moot ullg4af=1. MoSt equal- 403 HOUSEHOLDS BY INCOME, % 0-19.999 20,000-39,999 40,000-59,999 60,000-74.999 75,000-99.999 100,000-124,999 125.(633-149.999 150,004193.999 200.000e 0 5 1. MIA Rank' 18 58 99 10 15 20 U.S. source coma Bureau ACs. wed/ 5Ana ryL13, 2017 25 COMMUTER FLOWS RESIDENTS WHO WORK IN MIA Top Fire Outside Sources of Jobs Miami FL Fort Lauderdale FL West Palm Beach FL New York NY Orlando FL Tempe FL WORKERS WHO LIVE IN MIA Top Five Outside Sources of Workers Share Miami FL 6.1 fort Lauderdale FL 0.3 West Palm Beach FL 0.1 Orlando FL 0.1 Port St. Lucie FL 0.1 Cape Coral FL SALIM. COMA 9UAau Moody5 M'2 O, an/ 2009- 2013 Shan 10-7 07 0,1 0-1 0.1 MIGRATION FLOWS INTO MIAMI FL Fort Lauderdale FL New York NY Austin TX West Palm Beach FL Orlando FL Tampa FL Atlanta CA Houston TX Cape Coral FL Washington DC Torelin- mlgrercon FROM MIAMI FL Fort Lauderdale FL Orlando FL West Paine Beach FL New York NY Tampa FL Atlanta GA Cape Coral FL Houston TX Jacksonville FL Austin TX Toro i out- miyat7on Number of Migrants 16.54E 5,448 3,645 2,237 2,o8c+ 1,641 1,141) 959 920 911 61.07, 28,294 4,303 3,951 3,098 3,007_ 2,485 1.925 1.669 1,309 1,10+7 85,069 Net migration -23,054 25.000 20.000 15,000 10,000 5,000 0 DomeStlt Foreign Total NET MIGRATION, # 1 III 16 17 18 15 2015 -32,032 46709 14,677 2016 2017 201E -34,011-47,004-51.671 55,023 57,714 59,732 21.792 10,630 7,061 SOerca. IRS {1.0p1 2014 CRIMPS 9uraaP, 1400dfr5 4412 11CS This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 16 Shutts & Bowen, LLP September 21, 2020 Residents par squ a ra mile This report is intended solely far the information and internal use of the intended user(s) and should not be used or retied upon by any other person or entity. Deloitte Advisory 17 Shutts & Bowen, LLP September 21, 2020 MEDIAN HOUSEHOLD INCOME MEDIAN COMMUTE TIME ROF1LE - - POPULATION & HOUSING CHARACTERISTICS Units Value Rank* Total area Total water area Total land area Land area - developable Land area - undevelopable sq mi sq mi sq mi sgmi sq mi 2,431.2 142 532 6 40 1,897.7 169 600.2 258 1,298 4 111 Population density Total population US, citizen at birth Naturalized U.S. citizen Not a U.S. citizen popto developable land ths % of population % of population % of population 4,497.2 6 2,761.6 20 43.2 403 30.9 1 23.2 1 Median age 40.1 128 Total housing units Owner occupied Renter occupied Vacant ths % of total % of total % of total 1,024.3 43.5 41.7 14.8 23 388 13 107 1-unit; detached 1-unit; attached Multifamily Median year built % of total % oftotal % of total 39.7 9.8 49.2 197E 400 34 • Areas & pop derslq,, out cf 4 W metro areasr(i',Wons, Including metros in Puerto Rico. afl arhen. out c'403 metros. Sources Census Bureau. Moody'SAnahytres, 2017 except land Yea 2010 Sauces ACS, Moodr'SAnatyr'L This report is intended solely for the information and internal use of the intended userls) and should not be used or relied upon by any other person or entity. Deloitte Advisory 18 Shutts & Bowen, LLP September 21, 2020 Neighborhood Analysis We have defined the neighborhood based on CoStar's office and retail submarket, "Miami Airport" and CoStar's multi -family submarket "Miami Springs/Doral". See maps at the end of this section for the neighborhood boundaries and identification. Neighborhood Analysis Subject Address 1400 NW 37th Avenue, Miami, Miami -Dade County, FL MSA Miami -Fort Lauderdale -Pompano Beach, FL MSA Location Type Suburban Neighborhood District Type Concentrat on of single family residences directly east of the Subject. Commercial areas north and west of the Subject, with Miami Internat onal Airport directly west. Mix of commercial / single family res dences south of the Subject. Neighborhood Life Cycle Stage Expans on: sustained growth in demand and increasing construct on Specialized District Not Applicable New construction observed Yes - See comments ADJACENT LAND USES North: Miami River and Commercial Development (Airport) East: NW 37th Avenue and Single Family Homes South: Highway 836 and Commercial/Res dential West: NW 42nd Avenue/Lejeune Road and Miami International Airport NEIGHBORHOOD LAND MIX Vacant Land 0 / Single-family 450/0 Multifamily 0 / Retail 0 / Industrial 00/0 Off ce 00/0 Open/Public 00/0 Other 55°/0 ACCESS/LINKAGES Distances Neighborhood District Type: Value Influences Mix of Residential and Commercial Residential and commercial characterist cs. Proximity to Miami International Airport, hosp tal ty, retail, and single family res dences. Freeway/Access Within 1 mile Major roadways Within 1 mile Reg onal/International Airport Within 1 mile Public Transportat on - Bus Within 1 mile Public Transportat on - Train Within 1 mile Employment Centers Within 1 mile Hotel/Motels Within 1 mile Shopping Facilities Within 1 mile Dining Facilities Within 1 mile Grammar Schools 2 to 4 miles Community Colleges 2 to 4 miles Universities 2 to 4 miles Total 1000/0 Comment Other represents mixed commercial including retail, hosp tal ty, Miami International Airport. COMMENTS Miami Intermodal Center ("MIC") located north of the Subject Property, a $2.0 bill on multi -year program of ground access improvements to the Miami International Airport including a Miami Central Stat on, Metrorail, commuter rail, Amtrak, rental car, and bus sery ce. Stages of the MIC project opened to the publ c in phases from 2010 - 2015. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 19 Shutts & Bowen, LLP September 21, 2020 Neighborhood Analysis - Demographics 1 Mile 2 Mile 3 Mile Population 2010 Census 13,933 239,696 2019 Total Population: 13,506 251,563 2024 Populat ran: 13,742 259,441 Pop Growth 2019-202 1.8% 3.1% Growth 2010-2019 -3.1% 5.0% Average Age: 42.6 41.8 2019 Households by Household Inc <$25,000 1,761 $25,000-$50,000 1,239 $50,000 - $75,000 $75,000 - 5100,000 $100,000 - $125,000 $125,000 - $150,000 $150,000 - $200,000 $200,000+ % Above $100,000 646 275 148 149 16 8 7.6% 36,62D 23,420 12,556 5,887 3,565 1,781 1,646 1,944 10.2% 617,152 701,654 732,539 4.4% 13.7% 40.8 88,149 62,139 38,835 22,219 16,177 8,338 9,147 13,231 18.2 % omments Mile 2 Mile 3 Mlle Households 2010.Census 2019 Total Households: 2024 Project on Growth 2010 - 2019 HH Growth 2019-2024: Median Household Inc: 2019 Avg Household lncoW Avg Household Size: 2019 Avg HH Vehicles: Halealeig Median Home value: Median Year Built: Owner Occupied Renter Occupied Owner Occupied % Renter Occupied W. 4,624 4,242 4,268 -8.3% 0.6% $31,950 $41,592 3.0 86,395 87,419 89,516 1.2% 2.4% $ 30, 782 $47,326 2.7 1 1 $238,636 1963 1,732 2,51D 40.8% 59.2% $272,500 1965 30,389 57,030 34.8% 65.'_% 230,061 258,235 268,844 12.3% 4.1% $40,333 $63,527 2.6 1 $312,421 1971 94,138 164,097 36.5% 63.5% Businesses & Employees Total Businesses Retail & Wholesale FinanciaHnsur/Real Estate Services Information Health Care & Social Assistance Manufacturing Construction Utilities & Waste Management Public Administration & Sales Agriculture, Mining, Fishing # Businesses 1 Mile 2 Mile 3 Mile 612 18,502 51,913 225 3,506 11,998 29 1,070 2,992 191 7,716 20,624 9 292 1,089 46 4.171 8.696 32 428 1,461 35 557 2,024 37 548 1,842 7 202 742 1 12 45 # Employees 1 tile 2 Mile 8,139 191,428 4,158 42,549 108 8,618 1,571 71,583 56 2,854 213 42,626 570 5,573 240 4,105 400 4,849 821 8,563 2 108 3 Mile 504,496 128,596 25,450 182,364 12,540 77,040 16,743 13,344 22,375 25,327 717 Employees Per Business 1 htile 2 We 3 Mile 13 10 10 18 12 11 4 8 9 8 9 9 6 10 12 5 10 9 18 13 11 7 7 7 11 9 12 117 42 34 2 9 16 In the subject's area, the current year populat on is 13,506. In 2010, the Census count in the area was 13,933. The rate of change since 2010 was 1.75% annually. The five-year projection for the population in the area is 13,742 respresenting a change of -3.06% annually from 2019 to 2024. Current median household income is $31,950 in the area, and an average household income of $41,592. Further, approximately 7.57% of the 4,242 households have incomes greater than $100,000. W thin the subject's area, the median home value is $238,636 and have a median Year built date of 1963. With approximately 4,242 households in the area, an estimated 59.17%of the households are renter occupied. W thin 3 miles of the subject, there are an estimated 51,913 businesses employing nearly 504,496 people. Source: Costar This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 20 Shutts & Bowen, LLP September 21, 2020 Property Information Site Description Site Analysis - Parcel Map Parcel (s) : 01-3132-000-0080 BOUNDARY SURVEY 110. • DETAL A -A, LOCA1 N HAP • This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 21 Shutts & Bowen, LLP September 21, 2020 Name: Public/Private: rontage feet: Frontage Type: Frontage No 1. NW 37th Ave Public 2,693 Commercial Corr dor Site Analysis - Frontage Frontage No 2. Frontage No 3. Nw 42nt1 Ave NW 14th St Public Puhhr 2,673 2,182 State Highway Commercial Corr dor Lanes: 4 4 4 2-wayll-way: 2-way 1-way 2-w Direction of Traffic: 2-way 1-way 2-way Median: No No No Signal/Traffic control: Yes No Yes Access/curb cuts: 1 None 1 Paving type: N/Ap N/Ap N/Ap Curbs: N/Ap N/Ap N/Ap Sidewalks: N/Ap N/Ap N/Ap Condition: N/Ap N/Ap N/Ap Traffic level: Good Good Good Traffic count: 6,353 94,894 9,757 Exposure/Visibility: Good Good Good Traffic Cross Street Distance Count Year NW 21st St NW 37th 0.06 E 18,421 2018 NW 25th St NW 39th Ave 0.08 E 9,507 2018 NW 42nd Ave NW 18th St 0.14 N 94,894 2018 E West Expy NW 37th Ave 0.10 E 143,886 2018 E West Expy NW 14th St 0.05 NW 9,757 2018 NW 37th Ave NW 13th St 0.02 SW 6,353 2018 NW 42nd Ave NW 26th St 0.02 S 61,623 2018 NW 27th St NW 42nd Ave 0.03 W 1,523 2018 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 22 Shutts & Bowen, LLP September 21, 2020 Site Analysis SITE DESCRIPTION Flood Plain Information Descriptive Location Six miles northwest of downtown Miami CBD and adjacent to Miami Internatic Address 1400 NW 37th Avenue, Miami, FL Frontage (Ft) 7,548 Depth (Ft) N/A Site Size (SF) 3,201,660 73.5 Acres Land size source: Client Usable Land Area (SF) 3,201,660 73.5 Acres Excess Land Area (SF) 0 Parcel Type Entire block Shape Mostly rectangular Topography Level Site View/Amenity Not Applicable Zoning Special Area Plan ("SAP") Map No 12086CO292L Zone Code AE Date 9/11/2009 Description: Area subject to inundation by one percent annual chance flood event. Mandatory flood insurance purchase requirements and floodplain management standards apply. Poor Fair Average Good Excellent Comments Access x Drainage x Based on site vist, no drainage issues were observed at the subject. Function/Utility x Street Frontage x Traffic Pattern x Traffic Volume x Utilities x All utilities are available to the site and assumed adequate. Comments: remediation. The site has adequate access and is known to contain hazardous materials and/or substances that will require environmental This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 23 Shutts & Bowen, LLP September 21, 2020 Proposed Site Plan The following two aerial pictures show the subject as it currently exists (before) and as proposed (after). This report is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 24 Shutts & Bowen, LLP September 21, 2020 Source: https://mramifreedompark.com/ This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 25 Shutts & Bowen, LLP September 21, 2020 Property Tax Property Tax - Assessment Data 1400 NW 37th Avenue, Miami, FL PROPERTY ASSESSMENT INFORMATION Assessor's Parcel Number(s) (APN) Assessing Authority Tax Year 01-3132-000-0080 Miami -Dade County, FL 2017 2018 2019 ASSESSMENT INFORMATION Assessed Value Land Improvements Extra Feature Value Less Non -Homestead Cap Total Exemptions Taxable Assessment $2,345,940 $2,345,940 $2,345,940 $177,716 $176,363 $175,010 $0 $0 $0 - - - $2,523,656 $2,522,303 $2,520,950 $2,523,656 $2,522,303 $2,520,950 TAX LIABILITY Total Tax Rate Ad Valorem Property Taxes Special/Direct Assessments Total Tax Assessed Value Trend Property Tax Rate Trend Property Tax Exemption Trend Special/Direct Assessment Tax Trend 2.1184% 2.0945% 2.1346% - - - - - - $53,462 $52,831 $53,813 Decreasing Comments: Static or Flat We note the Property is exempt from real estate property taxes Static or Flat based on municipal government ownership. However, we have Static or Flat calculated the estimated property taxes for the subject parcels to be used as a basis for holding costs. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 26 Shutts & Bowen, LLP September 21, 2020 Property Tax - Assessment Data 1800 NW 37th Avenue PROPERTY ASSESSMENT INFORMATION Assessor's Parcel Number(s) (APN) Assessing Authority Tax Year 01-3132-000-0090 Miami -Dade County, FL 2017 2018 2019 ASSESSMENT INFORMATION Assessed Value Land Improvements Extra Feature Value Less Non -Homestead Cap Total Exemptions Taxable Assessment $827,982 $871,560 $871,560 $3,167,499 $3,133,825 $3,100,146 $1,845,013 $1,825,256 $1,805,496 ($26,868) - - $5,813,626 $5,830,641 $5,777,202 - - - $5,813,626 $5,830,641 $5,777,202 TAX LIABILITY Total Tax Rate Ad Valorem Property Taxes Special/Direct Assessments Total Tax Assessed Value Trend Property Tax Rate Trend Property Tax Exemption Trend Special/Direct Assessment Tax Trend 2.1184% 2.0945% 2.1346% - - - - - - $123,157 $122,125 $123,322 Decreasing Comments: Static or Flat We note the Property is exempt from real estate property taxes Static or Flat based on municipal government ownership. However, we have Static or Flat calculated the estimated property taxes for the subject parcels to be used as a basis for holding costs. The previous two tables indicate total real estate taxes to be $177,136 for the two parcels. According to the property cards, these parcels total 178.75 acres. However, based our research the parcels are closer to 152 acres. We have used the current taxes as basis for holding costs by only accounting for the allocated taxes for the Subject Property. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 27 Shutts & Bowen, LLP September 21, 2020 Property Tax Assessment Data 1800 NW 37th Avenue PARCELS MAP 01-3132-000-0080 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 28 Shutts & Bowen, LLP September 21, 2020 Zoning The Property is currently zoned Civic Space ("CS"): "A zone with mainly outdoor area dedicated for functioning for community purposes." As per the City of Miami's Miami 21 Zoning Code, Civic Space ("CS") prohibits Residential, Lodging, Office, and Industrial use. (Source: Miami 21 Zoning Code) As per discussions with the Client, and according to our understanding, the Site is designated "Recreation" pursuant to the Miami Neighborhood Comprehensive Plan and Future Land Use Map. Further, the City has a no net loss policy for public park land and will adopt procedures to this effect for park land in the City of Miami Zoning Ordinances, as described in the 2007 Parks and Public Spaces Master Plan. Per our discussions with the Client, the Client described the following proposed plans and process for the site. We note that the acreages in the following proposals have changed since this proposal language was originally drafted. Proposal: Includes a Future Land Use Map Change for 9.7 Acres from Recreation to Major Institutional Facilities to accommodate the Stadium and 11.3 acres from Recreation to Restricted Commercial to accommodate the Hotel, Retail and Office Uses. Process and timing: Requires a minimum of three (3) public hearings before the City of Miami and review by the State of Florida's Department of Economic Opportunity. Amendments to the FLUM usually take approximately 7-9 months. The Site is designated "Civic Space" pursuant to City of Miami Ordinance 13114, as amended ("Miami 21"). Proposal: Includes a rezoning for 9.7 Acres from Civic Space to Civic Institutional to accommodate the Stadium and 11.3 acres from Civic Space to T6-8 to accommodate the Hotel, Retail and Office Uses. Process and timing: Requires a minimum of three (3) public hearings before the City of Miami. Rezonings usually take approximately 7-9 months. This appreciation would run concurrently with the Comprehensive Plan Amendment. A portion of the Site is platted with various rights of way, while the remaining portion of the Site is unplatted. Said rights of way will need to be vacated as part of the redevelopment. The City Code typically prohibits a building permit from being issued on unplatted (non - subdivided land); however, Section 55-10 of the City Code provides that a permit may be issued for the construction by the city, its agent or lessee on city -owned land, platted or unplatted, of a structure or other on -site improvements. Proposal: Includes a replotting of the Site to close and vacate the existing rights of way in order to permit construction at the Site. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 29 Shutts & Bowen, LLP September 21, 2020 Process and timing: Requires a minimum of two (2) public hearings before the City of Miami and review by the Miami -Dade County Plat Committee. Replotting usually takes approximately 2 years; however, a building permit may be obtained during the process following satisfaction of certain requirements. Because of the Site's location adjacent to Miami International Airport, any development on the Site will require Miami -Dade County Aviation Department (MDAD) approval. Prior to obtaining MDAD approval, the Federal Aviation Authority (FAA) must issue a determination no hazard to air navigation for the proposed structures within the project. Prior to commencing construction, MFP will be required to file FAA Form 7460-1 (Notice of Proposed Construction or Alteration) and FAA Form 7460-2 (Supplemental Notice) to seek a determination of no hazard from the FAA. Miami Dade County has proposed an ordinance to amend the MDAD Height Constraints around Miami International Airport, which will affect the Site. Below, please find the existing MDAD Height Constraints vs the proposed MDAD Height Constraints. The proposed MDAD Height Constraints may impact the development of the Site. As noted below, the Site is located within the Outer Safety Zone, which prohibits any new residential construction, educational facilities, hospitals, religious facilities, or buildings for public assemblage. Proposal: Includes a submittal of the development program to the FAA for a determination of no hazard. Once the FAA has issued a determination of no hazard, the submittal of the development program to MDAD can be processed. Process and timing: Requires a 90-day review for the FAA and a 10-day review by MDAD. It is a hypothetical condition that our analysis assumes that the appropriate SAP zoning necessary to develop the Property to its highest and best use is in place as of the date of Value. Under the Miami 21 Zoning Code, a Special Area Plan is as follows: 3.9 Special Area Plans' The purpose of a Special Area Plan is to allow parcels greater than nine (9) Abutting acres in size to be master planned so as to allow greater integration of public improvements and Infrastructure, and greater flexibility so as to result in higher or specialized quality building and Streetscape design within the Special Area Plan. The purpose of a Special Area Plan further is to encourage the assembly and master planning of parcels greater than nine (9) Abutting acres in size, in order to provide greater integration of public and private improvements and Infrastructure; to enable Thoroughfare 6 https://codehub.gridics.com/us/fl/miami#/cd9d9570-550f-47be-b530-33c1d29c4db3 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 30 Shutts & Bowen, LLP September 21, 2020 connectivity; to encourage a variety of Building Heights, massing and Streetscape design, and to provide high quality design elements, all in order to further the intent of this Code expressed in Article 2. General a. The single or multiple owner(s) of Abutting properties in excess of nine (9) acres may apply for a rezoning to a Special Area Plan. b. A Special Area Plan shall be approved by the process of rezoning with or without Transect changes. c. A Special Area Plan shall assign Thoroughfares, Transect Zones and Civic Space Types, with appropriate transitions to Abutting areas. Guidelines for Thoroughfares and Public Frontages may be adjusted to the particular circumstances of the Special Area Plan. d. A Special Area Plan shall include a map of the Thoroughfares and Transect Zones, and the standards that deviate from the requirements of Article 5. e. A Special Area Plan shall assign at least five percent (5%) of its aggregated Lot Area to a Civic Space Type. Civic Building sites are to be located within or adjacent to Civic Space Types or at the axial termination of significant Thoroughfares. The developer shall be responsible for constructing the public improvements within the Special Area Plan, including but not limited to the Civic Space Types and Thoroughfares. f. Development within the Special Area Plan shall be pursuant to a recorded development agreement that will establish the allocation of Thoroughfares and Civic Space Types and Building Area among the Building sites, and the creation and retention of the public benefits. g. Unless a Building is specifically approved as part of the Special Area Plan, any Building shall be reviewed by the Planning Director, after referral to and recommendation from the CRC for conformance to the Plan, prior to issuance of the Building Permit. h. A Special Area Plan may include: 1. A differentiation of the Thoroughfares as a Primary -Grid (A -Grid) and a Secondary -Grid (B-Grid). Buildings along the A - Grid shall be held to the highest standard of this Code in support of pedestrian activity. Buildings along the B-Grid may be more readily considered for automobile -oriented standards allowing surface parking lots, unlined parking decks, and drive-throughs. The Frontages assigned to the B-Grid shall not exceed thirty percent (30%) of the total length within a Special Area Plan. For Frontages on the B-Grid, parking areas may be allowed in the Second Layer. 2. Retail Frontage requiring that a Building provide a Commercial Use at sidewalk level along the entire length of the Frontage. The Commercial Use Building shall be no less than seventy percent (70%) glazed in clear glass and provided with an Awning overlapping the sidewalk as generally illustrated in Article 4, Table 6. The first floor should be confined to Retail Use through the depth of the Second Layer. 3. Gallery or Arcade Frontage, requiring that a Building provide a permanent cover over the sidewalk, either cantilevered or supported by columns. The Gallery or Arcade Frontage may be combined with a Retail Frontage as shown in Article 4, Table 6. Gallery or Arcade Frontage within the First Layer may apply towards Open Space requirements. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 31 Shutts & Bowen, LLP September 21, 2020 4. Build -to -lines that differ from Transect Zone Setback requirement. 5. A Terminated Vista location, requiring that the Building be provided with architectural articulation of a Type and character that responds to the location. 6. A Pedestrian Passage, requiring a minimum ten (10) foot wide pedestrian access be reserved between Buildings. 7. A preservation plan acceptable to the Historic and Environmental Preservation Board for any historic resources in the area of the Special Area Plan. 8. Area Design Guidelines. 9. A parking management program that enables shared parking among public and private Uses. 10. Flexible allocation of development capacity and Height, excluding Density on individual sites within the Special Area Plan shall be allowed so long as the capacity or Height distribution does not result in development that is out of Scale or character with the surrounding area, and provides for appropriate transitions. Additionally, from our understanding, under the Miami 21 Zoning Code a Special Area Plan, the Property's location adjacent to a major international airport makes any form of residential development unlikely. As per the Client provided information, the proposed rezoning of the Subject site will include 11.3 acres from Civic Space to T6-8 zoning to accommodate the Hotel and Office Uses. The Miami 21 Code designates a Transect Zone, with applicable corresponding standards of development, for all lands within the City of Miami. The Miami 21 Code defines Transect Zones as follows: Transect Zone (T-Zone): The identification of areas of varying Density whose character is determined by the requirements for Use, Height, Setback and the form of Building and the form of the enfronting public streetscape. The elements are determined by their location on the Transect scale. The T-Zones are: T1 Natural, T2 Rural, T3 Sub -Urban, T4 Urban General, T5 Urban Center, and T6 Urban Core, CS Civic Space, CI Civic Institutional, CI -HD Civic Institution — Health District, D1 Work Place, D2 Industrial and D3 Waterfront Industrial. Within T3 through T6 Zones are additional categories, Restricted (R), Limited (L) and Open (0), and each category shall also be considered a T-Zone. According to the City of Miami a Special Area Plan typically has its own regulations and criteria for the uses within its boundaries. We have considered the requirements of T6-8 Transect Zones in our analysis. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 32 Shutts & Bowen, LLP September 21, 2020 Zoning Requirements 1400 NW 37th Avenue, Miami, FL Transect Zone - Urban Core Zone ("T6-8") Inning nescriotion• Consists of the highest Density and greatest variety of Uses, including Civic Buildings of regional importance. A network of small blocks has Thoroughfares with wide Sidewalks, with steady tree planting and Buildings set close to the Frontage with frequent doors and windows. Subsections consist of T6-8, T6-12, T6-24, T6-36, T6-48, T6-60, and T6-80. The number located after each T6 is the number of stories that can be built in that transect zone by right. Lot Size (Sq. Ft) 5,000 - 40,000 Minimum Lot Width (Ft) 50 Height (Stories) 2 - 8 Building Minimum Setbacks (Ft) Principal Front 10; and 20 above 8th Story Secondary Front 10; and 20 above 8th Story Side 0; and 30 above 8th Story Rear 0; and 30 above 8th Story Front Yard Lanscaped and/or paved Street Side Yard Lanscaped and/or paved Rear Yard Lanscaped and/or paved Maximum FAR/Density 5 / 25% additional Public Benefit Maximum DU/Acre (Multifamily only) 150 Parking Requirements Residential 1.5 parking spaces per dwelling Unit Parking Requirements Lodging 1 parking space for every 2 lodging units Parking Requirements Office 3 parking spaces per 1,000 square feet of office use Parking Requirements Commercial 3 parking spaces per 1,000 square feet of commercial use Permitted Uses See Comments COMMENTS The front yard, street side yard, and rear yard apply to the First Layer. The Miami 21 Code defines the First Layer as: the area of a lot comprised of the distance between the Base Building Line and the required Setback including the Private Frontage. The Public Benefits Program is to allow bonus Building Height and FLR in T6 Zones and bonus Building Height in D1 Zones in exchange for the developer's contribution to specified programs that provide benefits to the public. For T6-8, bonus to 12 stories, FLR 5; bonus of twenty five percent. For T6-12, bonus to 20 stories, FLR 8; bonus of thirty percent. As per the City of Miami's Miami 21 Zoning Code, T6 transect zones allow for multi -family housing, limited and open density hotel & office, and general commercial uses with additional commercial uses allowed by warrant or exception. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 33 Shutts & Bowen, LLP September 21, 2020 Market Analysis Miami Retail Market The Miami -Fort Lauderdale -West Palm Beach Metropolitan Statistical Area (MSA) encompasses Broward, Miami -Dade, Monroe and Palm Beach counties. The Subject is located in Miami -Dade County, Florida and the following information is for the Miami -Dade Retail Market. Asking NNN Rents and Rent Growth According to the CoStar Miami Retail Market Report as of October 2019, the overall retail market is estimated to have an average rent of $36.73 per square foot in 2019 and is forecast to have average rents increasing from $37.30 to $38.60 per square foot from 2020 to 2023. Additionally, neighborhood center retail rents are estimated to have an average rent of $33.37 per square foot in 2019 and are forecast to have average rents increasing from $34.10 to $35.51 per square foot from 2020 to 2023. OVERALL RENT IL VACANCY Ysar 2023 2022 2021 2020 2019 1 Market Rent Vacancy For SF Index . Growth Vs Fist Peak SF Morcott Ppts Chg 538.60 142 1.0% 6.1% 6.587.416 4.7% 0% $3822 141 1.1°% 5.1% 6,500,894 4.7% 0.1% 537.80 139 1.3% 3.9% 6.223.556 4.6% -0.2% 537.30 138 1.6°% 2.5% 6.370,657 4.8% 0% 536.73 136 1.0% 1.0% 6.258.947 4.7% 0.9% Source: Costar Retail Market Report: Miami Retail. CoStar, Retail Market Report: Miami Retail. Electronic PDF, 2019. a REIS Inc., Retail Metro: Miami. Electronic PDF, 2019 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deioitte Advisory 34 NEIGHBORHOOD CEN-ER RENT &VACANCY Year Per Sr index 2023 $35.51 1 -- 142 2022 $35.12 141 2021 2020 2019 $31.67 139 Maid Rod liersolh Vacancy 1/Nit Push IF $31.10 137 533.37 134 1.1% 1.316 1.7% 2.2% 2.3% Source: CoStar Retail Market Report: Miami Retail. 9.9% 7.6% 6.3% 4.5% 2-3% 1,485,185 4.1% 1,459,515 4.1% 1,399,366 3.9% 1,352,680 3.8% 1,354,915 3.8% IPplbt 0% 0.1% 0.1% 0% 0% Shutts & Bowen, LLP September 21, 2020 According to REIS Metro Miami Retail Report as of October 2019, current asking rents in the Miami non -anchor neighborhood shopping center retail market range from $15.24 to $59.45 per square foot with roughly 75.00% of surveyed properties indicating rents of $37.55 or below. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Del oitte Advisory 35 Shutts & Bowen, LLP September 21, 2020 NonanchorAsking Rent by Age Year 9ui 1 Rent Before 1970 $36.33 1970-1975 $29.34 1980-1989 $30.55 1990-1999 $37.64 2000-2009 $33.20 Ater 2009 $30 73 All $29.32 As of 06130/19 Non Of Asking Rent Distribution Low 25% Mean Median 75% High $15.24 $25.22 $29.32 $30.48 537.55 $59.45 58 us 111011!irimi735 0.2421 11 s $2C30 $26 d8 S3266 S3B84 S45025573a D Unde53B.85 S51.211. per As of D6.60•19 Nonanchor Asking Rent Growth Rate Distribution Low 25% Mean Median 75% Hlgh 2a a 0.0% 0.3% 1.0% 1.3% 1.6% Number of Properties Jndcr I. 0.9 % - 0.6%I-0.3% O.D% 0.3% 0.6% 0.9. - 1.0% - 0.7% - 0.4% -0.1% 02% 0.5% D.O'% Over Nevetive Grow8 Positive Growt Anchor Asking Rent Distribution Low 25%. Mean Median Olr Ending Urii3U111J 75% High $10.37 $15.48 S71.33 S21.53 S27.92 S47. 04 Source: REIS Retail Metro: Miami. CoStar indicated slight declines in projected rent growth over the next five-year period. As of the CoStar report date October 2019, rent growth currently stands at 1.60%, a decrease from the prior year (2018) rent growth rate of 4,40%. Rent growth was at 3.70% and 4.00% for 2016 and 2017, respectively. REIS indicated moderate rent growth. As of second quarter 2019, asking rent growth rate for the Miami retail market was 0,30% compared to the second quarter 2019 growth rates of 0.40% and 0.40% for the South Atlantic region and the United States, respectively. REIS projects annualized rent growth of 3.20% between the years 2020 and 2023. This report is Intended solely for the information and internal use of the intended users} and should not be used or relied upon by any other person or entity. Deloitte Advisory 36 Shutts & Bowen, LLP September 21, 2020 Miami South Atlantic Untied Slates Asking Rent Growth Quarterly Annualized 2019. 1019 YID Avg 1 Year 3Year 5Yea, 0.3% 0.7% 0.5% 2.4% 3.27E 3.4% 0.41'/a 3 3' 3.4 % 2.0% 2.1% 2.1% 0.4% 0-5% 0-4% 1.8% 1.9% 2.0% Period Lading. 05130/19 03/31119 06/30/19 12/31/10 12/31/10 12/31/18 kleau Rank Cwroarod tu: South Allanlic United Stites Total hiet+',:s Metro Ranks 2019 1014 YTD 1 Year 3Year 5 Year 25 16 r 13 6 2 1 e0 46 28 37 17 4 3 Purge ifdlrg 06/30111 4.0 3.0 2.0 1.0 0.0 Asking Rent Growth Rate Trends 2014 2015 21tl 2317 214 •--- Mom - - South Allante. — US Pe•:,e rc -: • Source: REIS Retail Metro: Miami. Vacancy According to REIS, vacancy rates across the Miami Retail market have been rising, second quarter 2019 ended at 5.70% overall and 6.20% for neighborhood shopping centers. According to CoStar, vacancy rates for Miami retail are at 3.70% for neighborhood centers and 4.10% for the overall retail market. Vacancy rates were 3.40% and 3.80% for year end 2017 and 2018 respectively. This report is Intended solely for the Information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 37 Shutts & Bowen, LLP September 21, 2020 Demand CoStar projects annualized inventory growth of 1.13% and annualized absorption growth of 1.08% between 2019 and 2023 for the overall retail supply. Additionally, CoStar projects annualized inventory growth of 0.53% and absorption growth of 0.45% for the time period for neighborhood retail center supply. OVERALL SUPPLY & DEMAND Inventory Not Abet:notion Year SF SF Growth % Growth SF % elm 2023 138,805.173 1.570.864 1.1 % 1.463.407 1.1 % 1.1 2022 137.234.309 1,785,745 1.3% 1.487,940 1 MD 1.2 2021 135.448.564 1.406,744 1.0% 1.537,381 1.1 % 0.9 2020 134,041,820 1,455,827 1.1 % 1.352.373 1.0% 1.1 2019 132.586.993 1,983,692 1.5% 663,351 0.5% 3.0 Source: CoStar Retail Market Report: Miami Retail Construction Ratio NEIGHBORHOOD CENTER SUPPLY & DEMAND Inventory Year SF SF Growth % Growth 2023 36.166.122 237,613 0.7% 2022 35,928,509 263.278 0.7% 2021 35,665.231 212,654 0.6% 2020 35,452.577 18.112 0.1 % 2019 35,434.4 65 483.360 1.4 % Source: CoStar Retail Market Report: Miami Retail. SF 209.882 201,107 164,635 20,970 462.600 Not Absorption %oflnr 0.6% 0.6% 0.5% 0.1 % 1.3% Con Wooden Ratlo 1.1 1.3 1.3 0.9 1.0 REIS projects net absorption of 217,000 square feet in 2019 with an increase in 2020 of 255,000 square feet and decreasing down to 171,000 square feet by 2023. We note that the average absorption is 237,500 square feet between 2020 and 2023. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 38 Shutts & Bowen, LLP September 21, 2020 Year 2019 Car Y-B Inventory SF1IJnits CamplatYons tory G+rInvennwlhY. VskCant Stack 1,522.000 Vacancy Rat• Vacancy Chang. PS) -30 Occuplad Stock Not Absorption g Ask Runt % asking Rent Ghg S29.91 2.4% A.030,000 148,000 0.6% 5.8% 24,508,000 217,000 2020 Y-B 26,265,000 235,000 0.9% 1,502.000 5.7% -10 24,763,000 255,000 530.51 2.0% 2321 Y-Y3 26,616,000 351,000 1.3% 1,496,000 5.6% -10 25,120,000 357,000 S31.18 2.2% 2022 Y-8 28.744,000 128,000 0.5% 1,457,000 5.4% -20 25,287,000 167,000 S32.01 2.7% 2023 Y-B 26.870,000 126,000 0.5% 1,412.000 5.3% -10 25,458,000 171,000 S32.9: 2.8% Source: REIS Retail Metro: Miami. Recent Transactions According to the CoStar Miami Retail market report as of October 2019, 20 sales over the past 12 months have ranged from $8,705,000 to $62,615,244 ranging from 8,500 to 209,097 square feet. Capitalization rates have ranged from 4.00% to 8.10% and year built ranged from 1934 to 2018. Excluding the sales below 60,000 square feet, the sale prices ranged from $9,700,000 to $62,615,244 and $124 to $622 per square foot with median and average per square foot prices $212 and $286 respectively. Additionally, REIS noted 35 sales for the second quarter of 2019, totaling $316,100,000. Average selling prices for the second quarter were $330 per square foot with mean capitalization rate of 7.70%. Address CoStar - Retail Sales Miami Sale Date Sale Price Oct-19 •19 000 000 Size 60 870 Price Per SF Iligng 1075 SE 6th Ave 9709-9779 NW 41st St Jun-19 62 615 244 _ _ _ 100 671 622 2457 NE 10th Ct Ma -19 •44 311 633 209 097 17800 NE 5th Ave Mar-19 •9 700 000 60 622 5160 401 Bisca ne Blvd Jan-19 •• 17 488 187 140 850 $124 Minimum $9,700,000 $124 Maximum $62,615,244 $622 Median $19,000,000 $212 Avera • e .- 30 623 013 . 286 Source: Costar Retail Market Report: Mier i Retail. Additionally, we have researched Miami area sales over the last three years excluding downtown Miami and did not source any additional relevant comparable transactions. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 39 Shutts & Bowen, LLP September 21, 2020 Going forward, CoStar projects overall retail market per square foot sales trends of $392 to $421 from 2019 to 2023 with capitalization rates projected to rise 20 basis points over this time period. CoStar also projects per square foot sales trends for neighborhood retail center properties of $323 to $352 per square foot from 2019 to 2023 with capitalization rates also projected to rise 20 basis points over this time period. OVERALL SALES Completed Transactions (1) Market Pricing Trends (2) Tut Deals Volume Turnover Avg Price Avg Pnce+SF Avg Cap Rate Price/SF Price Index Cap Rate 2023 - $421.12 198 5.8% 2022 $416.32 195 5.7% 2021 - - - S412.81 194 5.7% 2020 $405.73 190 5.6% 2019 - - - - - $392.15 184 5.6% Source: CoStar Retail Market Report: Miami Retail. NEIGHBORHOOD CENTER SALES Year 2023 2022 2021 2020 2019 Completed Transactions (1) Market Pricing Trends (2) Deals Volume Turnover Avg Price Avg Price/SF Avg Cap Rate Price)SF Price Index Cap Rate S352.64 190 5.9 % $348.16 187 5.8% $344.38 185 5.7% $337.23 181 5.7% $323.96 174 5.7% mlINNIMP Source: Costar Retail Marker Report: Miami Retail. Capitalization Rates We researched retail capitalization rates on a regional and metro scale. Below data includes Class A & B, Anchor and Un-Anchored, and Neighborhood and Community retail data. Capitalization rates ranged from 4.25% to 10.00% averaging 7.45%. This report is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 40 Shutts & Bowen, LLP September 21, 2020 Source Date Market Capitalization Rates - Retail Minimum Maximum Average RealtyRates Market Survey RealtyRates Market Survey RealtyRates Market Survey RealtyRates Market Survey PwC RERC RERC RERC IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint 3Q 2019 Miami/Dade; Anch. Retail: Class A & B 3Q 2019 Miami/Dade; Un-Anch. Retail: Class A & B 2Q 2019 Miami/Dade; Anch. Retail: Class A & B 2Q 2019 Miami/Dade; Un-Anch. Retail: Class A & B 2Q 2019 National Strip Shopping Center 2Q 2019 Flash Report Nat onal Neigh/Comm Retail 1Q 2019 Miami Neigh/Comm Retail First Tier 1Q 2019 South Region Neigh/Comm Retail First Tier 2019 South Region Commun ty Retail Market 2019 South Region Neighborhood Retail Market 2019 Miami Community Retail Market: Class A 2019 Miami Neighborhood Retail Market: Class A 4.25- % 5.50% 6.00- % 8.80% 8.70% 8.80% 8.70% 10.0- 0% 6.75% 6.30% 5.90% 6.30% 9.00- % 7.10% 7.07% 7.11 % 7.40% 6.75% Minimum Maximum Average 4.25% 10.00% 7.45 % Source: PwC Investor Survey, Realty Rates Market Survey, RERC, IRR Viewpoint. Construction According to CoStar, Miami currently has 52 retail properties under construction totaling 2,867,795 square feet, of which 78.70% is pre -leased. Of the 52 properties, 22 are under 100,000 square feet with completion ranging dates from November 2019 to March 2022. Deliveries will peak this year and next, with close to three million square feet set to hit the market by the end of 2020. The retail component of the Miami Worldcenter, a mega mixed -used project, part of which is currently under construction in the heart of Downtown Miami, is focused on experiential retail skewed towards services such as fitness, food, and entertainment. The development includes a 45-story, 600,000 square foot ("SF") office tower; two residential towers with 500 luxury units; an open-air retail development; an 1800-room Marriot Marquis hotel; and a full-sized convention center. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 41 Shutts & Bowen, LLP September 21, 2020 DELIVERIES a OEMOLIT1ONS 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 -0.2 _q.y Forecast 11 i 2014 2015 2016 2017 i 201e 2019 2020 2021 7 2022 2023 Delr:e^es • Demdrahed • Net Dehrvenes Source: CoStar Retail Market Report: Miami Retail. According to REIS, construction and planning of new buildings in Miami remains active. REIS notes the 31,500 square foot "The Shoppes at Hidden Lake Phase 2" mixed -use complex on SW 128th Street in Miami, several miles southwest of downtown Miami, is expected to deliver in November 2019. Additionally, REIS indicated total completed and under construction office for Miami 2018 and later includes 3,504,110 square feet. This report is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 42 Shutts & Bowen, LLP September 21, 2020 I Section 23 - Construction Deliveries Cornpi.t.d 2018 SF YTD 2019 SF Under Construction 2019 2020 and Later Totals 2018 and Later Neighborhood 102,600 0 109,116 0 211,716 Comroutrty 297,499 23,842 0 250,000 571,341 Power Center 0 0 0 0 0 Regional 0 0 0 0 0 Mixed Use 423,865 325,534 425,484 951,170 2,126.053 Other 369,000 226,000 0 0 595,000 Totals 1,19Z964 575,376 534.600 1,201,170 3,504,110 Planned Proposed Total: 506.116 407,776 913,892 170.000 232.711 402.711 0 0 0 3.866.507 675,000 4.741,507 1.895,002 1,374,295 3,269,297 655.250 0 655,250 7,092.975 2,889,782 9,982,657 Section 24 - Metro Construction Breakdown 40.0 1,2 +, Metro Construction by Project Type 2018 and Later 3% -9.3 % f Commonly ■ Mmostn. ▪ Nignocr+ood • Otear 35.294 111 * CO Me/ I ,.C41 a -roe-Ty CO''00411d., under C0e1M110.1 pun 0ed bed +"n : te'E a 0- case. Metro Construction by Top Five Submarket Share 2018 and Later 43.4 % 4-14w 7 % 3 %12% • Misn solar r Basch • t7p:4..ocsaiHewac • Corsi 4sb aiVKandi/ • Sou Dada • West Dada *CI prat)rt»i *a '0 1'4 t.a+ a o-;,we. Mat0 trait soma vrr°f.d ust tar Id r+d proponot 1YO04r141 oa rrn yet nav4 a Source: REIS Retail Metro: Miami. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 43 Shutts & Bowen, LLP September 21, 2020 Miami Airport Retail Submarket 9 �0 Asking NNN Rents and Rent Growth According to the CoStar Miami Airport Retail Submarket Report as of October 2019, the overall retail market is estimated to have an average rent of $32.96 per square foot for 2019 and is forecast to have average rents from $33.84 to $35.36 per square foot from 2020 to 2023. Additionally, neighborhood retail center rents are estimated to have an average rent of $35.44 per square foot for in 2019 and are forecast to have average rents increasing from $36.57 to $38.35 per square foot from 2020 to 2023. OVERALL RENT 3 VACANCY MOM Perri Ymr NMr OF 2023 S3E 2'- 2022 S34.95 2021 $34.47 2020 533.84 201g S32.05 UMW % Werth 145 143 141 139 277E 135 227E 11% 1.4'lt VC Hill P M llF Mord IBMs Ole e 7% 721,870 43% 0% 8 4' a 700170 4.33% 027E 8.0% 608.050 4.17E 0.47E 5.0% 505,500 3.7% 0.1% 2.2% 575,330 35% 1.2% mosis Source: CoStar Retail Submarket Report: Miami Airport.. 'CoStar, Retail Submarket Report: Miami Airport. Electronic PDF, 2019. i° REIS Inc„ Retail Metro: West Dade, Miami/Miami Beach, Opa-Locka/l- ialeah. Electronic PDF, 2019 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Qeloitte Advisory 44 Shutts & Bowen, LLP September 21, 2020 NEIGHBORHOOD CEN TBi RENT & VACANCY Yirfrt Rent row 'war NOe' si tls'atrlr• 2023 S38+ - 145 1.2% 2022 337.88 144 15% 2021 $3733 142 2 1% 2020 S3557 13B 327E 2010 335.41 135 2 4% venom tit Hid Pee IF Maid !it stag 10.874 1 198.187 389E 0.17E 08% 189,890 3.77E 0.3% 7.0% 1 174885 3.4% 5.7% 152.09e 3.0% 2.4% 117.450 23% 0.7% 0.8% Source: Costar Retail Submarket Report: Miami Airport. As per a REIS competitive set survey of 23 properties in the Subject's submarket as of October 2019, average asking and effective rents are $30.66 and $17.40 per square foot, respectively. The average year built is 1972. 23 PROPERTIES As of 06/30/19 LOW Current Asking Rent/SF (Nonanchor) 515.31 Current Asking Rent/SF (Anchor) $13.06 Current Vacancy Rate 0.0% Total Operating Expenses PSF Property Size (SF) Year Built MEAN 330.66 $17.40 3.0% $2.00 57.18 14,000 96,358 1948 1972 MEDIAN $25.80 520.49 1.4% $8.10 60.000 1984 HIGH 5201.95 $41.20 39.3% $29.07 502,923 2004 Source: REIS Retail Metro: Coral Gables/Kendall/Richmond CoStar indicated healthy rent growth over the past year at 2.70% for the submarket, and continues to grow in forecasted rent growth over the next five-year period. REIS indicates asking rent growth rates of (0.50%) for the competitive set and 0.70% for the Subject submarket year to date. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Del oitte Advisory 45 Shutts & Bowen, LLP September 21, 2020 ASKING RENT GROWTH RATES Comp Group 0.7% Coral Gables/Kendall 1.9% Miami 0.9% QUARTERLY 10 2019 ANNUALIZED 3 YEAR 0.2% 0.5% 4.8% 3.6% 5.3% -0.4% 0.7% 1.5% 3.3% 4.2% 0.7% 0.8% 2.5% 3.0% 3.5% Source: REIS Retail Metro: Coral Gables/Kendall/Richmond Vacancy According to the REIS, current vacancy is 3.20% and 5.70% for the competitive set and the Subject submarket respectively. Comp Group 3.2% Coral Gables/Kendal l 5.7% Miami 5.7% QUARTERLY 10 2019 VACANCY RATES 620ANNUALIZED 3 YEAR 3.3% 3.3% 3.4% 4.2% 4.4% 5.7% 5.7% 5.4% 5,3% 5.9% 5.9% 5.8% 5.9% 5.9% 6.3% Source: REIS Retail Metro: Coral Gables/Kendall/Richmond According to CoStar, overall Miami Airport retail submarket vacancy is estimated to be 3.10% in 2019. The submarket is forecasted to increase to 3.70% in 2020 and to 4.30% in 2023. Neighborhood retail center vacancy is estimated to be 1.80% in 2019. Similarly, vacancy among neighborhood retail center properties is expected to increase over the next year to 2.30%, but generally holding steady around 3.80% through 2023. This report is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 46 Shutts & Bowen, LLP September 21, 2020 Demand CoStar projects annualized inventory growth of 0.48% and annualized absorption growth of 0.80% from 2019 to 2023 for the overall office supply. For the neighborhood retail center supply, CoStar projects annualized inventory growth of 0.88% and annualized absorption growth of 0.68% for the same period. NEIGHBORHOOD CENTER SUPPLY & DEMAND Inventory Year SF SF Growth % Growth 2023 5,181,515 32,260 06% 2U22 5,149,255 35,714 0 7% 2021 5,113,541 28,838 0 6% 2020 5,084,703 i4641 0% 2019 5,085.167 5.753 0.106 Net Absorption SF °-. o1 Inv Construction Ratio 23,701 0 5% 1 4 20.402 0 4% 1 8 6,528 0 1 % 4 4 (35,637) -0.7% (24,699) -0.5% Source: Costar Retail Submarket Report: Miami Airport. OVERALL SUPPLY & DEMAND Inventory Net Absorption Year SF SF falrotrti %Gie Is SF % of itty 2023 16,807,356 189,765 1.1 % 175,657 1.006 2022 16,617,591 209,864 1.3% 167,765 1.006 2021 16,407,727 169,901 1.0% 96,089 0.606 2020 16,237,826 11,812 0.106 (8,056) 0% 2019 16,226.014 32,433 0.206 (162,766) -1 0% Construction Ratio 1.1 1.3 1.8 Source: CoStar Retail Subrnarket Report: Miami Airport. Recent Transactions According to CoStar, the Miami Airport retail submarket sale price per square foot ranges from $121 to $735 with an average price per square foot of $381, and an average capitalization rate of 5.70%. The CoStar submarket report indicates 26 transactions over the past 12 months; however, only five sales were similar to the subject property. This report is intended solely for the information and internal use of the intended user(s) and should not be used or reified upon by any other person or entity. Deloitte Advisory 47 Shutts & Bowen, LLP September 21, 2020 RECENT SIGNIFICANT SALES 9 Doral Plaza Shopping Cr... 9700-0779 NW 41st St Gateway Shopping Center MOO NW 25th St 1645 NW 107th Are 1635 NW 107th Ave Bird Point Playa 13353-13309 SW 42nd St Praparty sae W 6Iop SF Vacancy sop Gas Pm* mews, Cl, rue* * * * * .* 1987 'of71 C% W1212019 132,818.244 3022 4.d% * * * * * 2004 32.054 0% 7112/2010 S14.000,000 5429 * * * * * 1909 70.000 92.9% 11128.2018 38.530.000 3121 * * * * ,. '480 20.424 100% 91L2010 S5.300.000 5259 * * * * ♦ 1987 17,488 0% 6114,2010 $5,103.000 $202 57% Source: CoStar Retaif Subrnarket Report: Miami Airport. CoStar projects sales trends of $400 to $439 per square foot from 2019 to 2023 with capitalization rates projected to increase 10 basis points for the overall supply. For the neighborhood retail center properties, CoStar projects sales trends of $379 to $420 per square foot from 2019 to 2023 with capitalization rates projected to rise 20 basis points. OVERALL SALES velure 2023 2022 2021 2020 2010 YTD 2018 Cnwpirt d Trrsa+tlsist 111 T Jrnc MRr Arc C.r 4 A.2 Prior 5F titlfbd l`rrfp Tnaiat 1t1 • a CIO P ill Pempa r Mee [alien Cy tale 205 5.5% 202 5.5% 200 5.4% 19Q 5.4% 187 5.4% 185 181 5.4% Source: CoStar Retaif Submarke£ Report: Miami Airport. This report is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory CEPCI131 SALES Moe CCetpwisiTlrws iwas lil 1 'MO erwao Tlawrs tx! Ilslrws Twomey Awe Pen /weFrl.allMF Awe CapRi Fhlsar$F Wan wawa CapRiu 2021 2020 2019 YTD 2018 5 284.0 Yi 2.9°,6 516.800.000 Sf --s 27 $18.5IM 1.3% $5.411,933 51-: '_'- $420.08 210 5.5% $414.60 207 5.4% $409.57 205 5.4% S399.53 200 5.3% $379.87 190 5.3% — 46% $37420 187 5.3% _ $385.95 183 5.4% Source: CaStar Retail Submarket Report: Miami Airport. Construction Shutts & Bowen, LLP September 21, 2020 Construction in the submarket remains healthy with proposed construction of 476,202 SF for 2019 through 2020. CoStar projects annualized positive net absorption growth of 0.50% over the next five years for neighborhood center product in the submarket with majority in 2023. NEIGHBORHOOD CENTER SUPPLY & DEMAND Inventory Year SF SF ©north 2023 5.181,515 32.260 2022 5.149.255 36.714 2021 5,113.541 28.S3b 2020 5.084.703 #4I64) 2019 5.085,187 5,753 Groot- : 6 t; 7% �0x IF 23.701 20.402 6.528 (35,837) Witt ADS prptlon % or Inv 0.5% Conitruotlkn Ratic 14 0.4% 1 I 0.1% 4.4 -0.7% 0.1 (24.Q) -0.5% Source: CoStar Retail Subrlaarket Report: Miami Airport. CoStar projects submarket delivery of 35,410 square feet and proposed delivery of 476,202 square feet over the next four quarters. Under construction projects in the vicinity of the Subject include 6600 NW 72nd Ave, a one story 13,000 square foot retail building with expected completion date of November 2019. proposed construction in the vicinity of the Subject includes 10015 NW 41' St, a one story 7,985 square foot retail building with expected completion in April 2020 and 3900 NW 7th St, a one story 4,425 square foot retail building with expected completion in December 2019. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 49 Shutts & Bowen, LLP September 21, 2020 According to REIS, the Subject submarket ranks third in metro Miami for recently completed, under construction, planned, and proposed properties from 2018 onwards, accounting for 5.7% of all new inventory. REIS indicated a total of 767,697 square feet including completed, under construction, and planned projects. Conclusion The Subject is located between Miami International Airport and Downtown Miami submarkets in the Miami Airport retail submarket. The submarket has seen healthy rent growth over the past year. Further, rents are forecast to continue to increase over the next four-year period across the overall retail and neighborhood center supply. Annualized overall and neighborhood center inventory and absorption growth are forecast to increase moderately over the next four years. Market data also projects sales trends to increase in the submarket. The retail submarket is strong and currently ranks number three in metro Miami for recently completed, under construction, planned, and proposed properties. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 50 Shutts & Bowen, LLP September 21, 2020 Miami Office Market 11 The Miami -Fort Lauderdale -West Palm Beach Metropolitan Statistical Area (MSA) encompasses Broward, Miami -Dade, Monroe and Palm Beach counties. The Subject is located in Miami -Dade County, Florida and the following information is for the Miami -Dade Office Market. Asking Gross Rents and Rent Growth According to the CoStar Miami Office Market Report as of October 2019, the overall office market is estimated to have an average rent of $37.63 per square foot in 2019 and is forecast to have average rents increasing from $38.30 to $39.61 per square foot from 2020 to 2023. Additionally, four- and five-star office rents are estimated to have an average rent of $45.42 per square foot in 2019 and are forecast to have average rents increasing from $46.22 to $47.51 per square foot from 2020 to 2023. OVERALL RENT & VACANCY Year 2023 2022 2021 2020 2019 Market Rent Vacancy Per SF index % Growth Vs Hist Peak SF Percent Ppts Chg $39.61 125 0.9% 7 6% 10,719,351 9.5% 0 1% $39.25 124 1.0% 6.7% 10,511.368 9.4% 0.5% S38.85 122 1.4% 5.6% 9,878,499 9.0% 0.1% $33.30 121 1.8% 4,1 % 9,645,486 3.8% 0.3% $37.63 118 2.2% 2.2% 9,238,901 3.69/0 -0 4% w Source: CoStar Office Market Report: Miami Office. " CoStar, Office Market Report: Miami Office. Electronic PDF, 2019 " REIS Inc., Office Metro: Miami. Electronic PDF, 2019 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 51 Shutts & Bowen, LLP September 21, 2020 4 & 5 STAR RENT & VACANCY Market Rent Vacancy Year Per SF Index % Growth Vs Hist Peak SF Percent Ppts Chp 2023 $47.51 124 0.7% 6.5% il 5,639,608 13.3% -0.2% 2022 I $47.17 124 0.8°/a 5.8% 5,561,200 13.4% 0.1% 2021 $46.80 123 1.3% 5.0% 5,319,376 13.3% -0.4% 2020 $46.22 121 1.8% 3.6% 5,335,871 13.7% -0 5' 2019 $45.42 119 1.9% 1.9°/a 5,346.193 14 3% -0 Source: CoStar Office Market Report. Miami Office. According to REIS Metro Miami Office Report as of October 2019, current asking rents in the Miami office market range from $19.46 to $60.50 per square foot with roughly 75.00% of surveyed properties indicating rents of $45.54 or below. Further, REiS indicated an average Class A office rent of $40.69 per square foot as of second quarter 2019 across the Miami market. This report is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 52 Shutts & Bowen, LLP September 21, 2020 Asking Ren by Age Year But Rent Before 1970 $32 36 1970-1979 533.03 1980-1989 537 43 1990-1999 534 47 2000-2009 541 90 After 2009 552 28 All 334.92 As of 06r30 15 Asking Rent Distribution Low 25% Mean Median 75% High $19 46 528 99 $34 92 $37 50 $45.54 360.50 Under24 591S29 72lS334 29 5)5599 98(S45 5i 11 550 24 555 33� ila serer AS 006r30/19 Asking Rent Growth Rate Distribution Low 25% Mean Median 75% High -37% -03% 03% 00% 00% 60% .3 7%- 2 5%(- 1 3%I- 0.1% 0 3 % 2.3% 13 5% 1Over 1111,14egative Growth Posrthe Growth Utr Ending 05r30/19 Source: REIS Office Metro: Miomi. CoStar indicates slight declines in projected rent growth over the next five-year period. As of the CoStar report date October 2019, rent growth currently stands at 2.50%, a decrease from the prior year (2018) rent growth rate of 4,60%. Rent growth was at 5.40% and 3,60% for 2016 and 2017, respectively. REIS indicated moderate rent growth. As of second quarter 2019, asking rent growth rate for the Miami office market was 0.30% compared to the second quarter 2019 growth rates of 0.40% and 0.60% for the South Atlantic region and the United States, respectively. REIS projects annualized rent growth of 1.65% between the years 2020 and 2023. This report is intended solely Far the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 53 Shuns & Bowen, LLP September 21, 2020 Miami South Atlantic United States Asking Rent Growth Trends 2019 1019 YID Avg 4018 3018 2018 1018 4017 3Q17 0.3% 0.7% 0.5% 0.8% 0.6% 0.1% 0.3% 0.6% 0.4% 0.4% 0.5% 0.4°/0 0.8% 0.6% 0.6% 0.6% 0.6% 0.4% 0.6% 0.4% 0.5% D.7% 0.4% 0.7% 0.9% 0.6% 0.4% Period Ending: 06/30/19 03131/19 06/30/19 12/31f18 09/30r18 06f30r18 03/31/18 12+31/17 09130/17 Metro Flanking 2019 N/A 17 1019 WA 51 13 06/30/19 03131 )19 ' OT 26 regbnai metros of 82 u.S. metros 3.0% 2.0% 1.0% 0.0% -1 0% -2.0% Miami South Atlantic United States Asking Rent Growth Rate Trends and Forecasts Trends Forecasts .. y l . r 2014 2015 2018 2017 2018 2019 2020 2021 2022 2023 3.0% 3.5% 3.1% 1.5% 1.8% 2.1% 1.8% 1.8% 1.4% 1.6% Downside Scenario 1 1.7% -0.5% 6.9% 1 1 % 1.3% Downside Scenario 2 1.4% -20% 0.3% 08% 1.2% 1.8% 1.6% 2 1% 1.8% 25% 2.4% 19% 189'n 19% 1,0% 3.1% 3.4% 23% 1.8% 27% 2.6% 21% 2.1% 20% 2,0% Miami am Scenario 1 na■nnnm, Scenario 2 mom •. South Atlantic r,r iry, rn a United Stales Penoc ending 12'731/23 Source: REIS Office Metro: Miami. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 54 Shutts & Bowen, LLP September 21, 2020 Vacancy According to REIS, vacancy rates across the Miami Office market have been rising, second quarter 2019 ended at 16.10% overall and 16.50% for Class A space. Vacancy rates for Class A space were 13.40% and 15.90% for year end 2017 and 2018 respectively. According to CoStar, vacancy rates for Miami office are at 14.50% for four- and five-star Office and 8.50% for the overall office market. A heavy supply pipeline and weakening demand have continued to push vacancy rates up; however, CoStar projects 1.00% decrease in vacancy through 2023, Demand As per CoStar, demand has weakened and will continue across the Miami office market. Forecasted demand is slower, driven by decelerating office employment growth going forward. CoStar projects annualized inventory growth of 1,05% and annualized absorption growth of 0.72% between 2019 and 2023 for the overall office supply. Additionally, CoStar projects annualized inventory growth of 3.25%© and absorption growth of 2.97% for the time period for four- and five-star supply. OVERALL SUPPLY & DEMAND Inventory Net Absorption Year SF SF Growth % Growth SF % of Pnv Construction Rano 2023 112,339,501 974,436 0.9% 771,356 0.7% 1.3 2022 111,365,465 1,306,948 1.3 0 759,061 0.713.4, 1.9 2021 109,978.517 866,806 0.8% 638.867 0.6% 1.4 2020 j 109,111,711 1,338,784 1.2 n 937,100 0.9% 1.4 2019 107,712,927 352,685 0.3% 699,800 0.6% 0.5 Source: CoStar Office Market Report: Miami Office. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 55 Shutts & Bowen, LLP September 21, 2020 4 & 5 STAR SUPPLY & DEMAND Inventory Year SF SF Growth % Growth 2023 42,558,236 1,143,334 2.8% 2022 41,414,902 1,560,562 3.9% 7071 39,854,340 1,045 964 2 7% 2020 38,808,376 1,357,176 3.6% 2019 37,451,200 371,700 1.0% Het Absorption SF % of Inv 1,064,417 2.5% 1,315,233 3.2% 1,061,946 27% 1,367,362 3.5% 415,213 1.1% Conatructioa Ratio 1.1 1.2 1.0 1.0 0.9 .Source: CoStar Office Market Report: Miami Office. REIS projects net absorption of (-37,000) square feet in 2019 with a pickup in 2020 of 684,000 square feet and decreasing down to 30,000 square feet by 2023. We note that the average absorption is 250,750 square feet between 2020 and 2023. Yew 2019 (lit Y-B Inventory SFIlinrts 45,565,000 nl Coatc ,ns 344,000 Inventory c,rowth"'� 0.8% vac Stack am 7,508,000 Vacancy Rate 16 5% Vacancy chanAsking gfIBPS) 70 Occupied Stock 38.057,000 Net Absorption -37.000 Rent $35 30 Ask Rent % Chg 2 1% 2020 Y-B 46,881.000 1.316,000 2.9% 8,140.000 17.4% 90 38.741,000 684.000 $35.92 1.8% 2021 Y-131 47,357,000 476,000 1 0% 8.429.000 17,8% 40 38.928,000 187.000 S36.57 1 8% 2022 Y-B 47,604,000 247,000 0.5% 8,624,000 18.1% 30 38.980,000 52,000 $37.10 1.4% 2023 Y-B 47,826,000 222,000 0.5% 8,766,000 18.3% 20 39.060,000 80.000 S37.68 1.6% Source: REIS Office Metro. Miami. Recent Transactions According to the CoStar Miami Office market report as of October 2019, 20 sales over the past 12 months have ranged from $180,000 to $157,000,000 in price for properties ranging from 18,552 to 344,454 square feet. Capitalization rates on the transactions ranged from 4.40% to 11.30% and year built ranged from 1925 to 2018. Excluding those sales under 100,000 square feet, sale prices ranged from $12,500,000 to $157,000,000 (or $89 to $602 per square foot) with median and average per square foot prices of $335 and $353, respectively, Additionally, REIS noted 15 sales for the second quarter of 2019, totaling $352,300,000. Average selling prices for the second quarter were $339 per square foot with mean capitalization rate of 5.80%. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 56 Shutts & Bowen, LLP September 21, 2020 Sale CoStar Sale Date - Office Sales (Miami) Sale Price Size Price Per SF 1 Jul-19 $157,000,000 344,454 $456 2 Jul-19 $125,500,000 208,325 $602 3 Apr-19 $102,255,106 190,583 $537 4 Apr-19 $68,244,894 127,356 $536 5 Jun-19 $59,750,000 146,202 $409 6 Jun-19 $54,400,000 162,293 $335 7 Aug-19 $37,000,000 146,000 $253 8 Aug-19 $32,988,562 150,350 $219 9 Aug-19 $27,359,789 118,723 $230 10 Aug-19 $25,401,649 118,287 $215 11 Aug-19 $12,500,000 140,000 $89 Minimum $12,500,000 $89 Maximum $157,000,000 $602 Median $54,400,000 $335 Average $63,854,545 $353 Source: CoStar Office Market Report: Miami Office. Additionally, we have researched Miami area sales over the last three years excluding downtown Miami. Sales ranged from $29,615,640 to $96,100,000 ($235 to $341 per square foot) with median and average sales of $272 and $283 per square foot respectively. Deloitte Address Advisory - Office Sale Date Sales Sale Price Size Price Per SF 8600 NW 36th St Aug-19 $37,000,000 146,000 $253 550 Biltmore Jun-19 $54,400,000 162,293 $335 7300 Corporate Center Dr (Part of Multi -Property Sale) Sep-18 $65,822,785 241,594 $272 7650 NW Corporate Center Dr (Part of Multi -Property Sale) Sep-18 $36,197,343 125,822 $288 7600 Corporate Center Dr (Part of Multi -Property Sale) Sep-18 $35,875,576 140,045 $256 7665 Corporate Center Dr (Part of Multi -Property Sale) Sep-18 $29,615,640 125,808 $235 3470 NW 82nd Ave Sep-17 $96,100,000 281,785 $341 Minimum $29,615,640 $235 Maximum $96,100,000 $341 Median $37,000,000 $272 Average $50,715,906 $283 Source: CoStar Miami comparable search. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 57 Shutts & Bowen, LLP September 21, 2020 Going forward, CoStar projects overall office market per square foot sales trends of $333 to $361 from 2019 to 2023 with capitalization rates projected to rise 20 basis points over this time period. CoStar also projects sales trends for four- and five-star office properties of $405 to $436 per square foot from 2019 to 2023 with capitalization rates also projected to rise 20 basis points over this time period. OVERALL SALES Completed Transactions {1l Market Pricing Trends (21 Year Deals Volume Turnover Avg Pnce Av i Pricer Sr Avg Cap Rate Price SF Price Index. Cap Rate 2023 - - - - - $361.40 176 6.1% 2022 - - - - - $356.60 173 6.1 % 2021 I - $352.47 171 6.0% 2020 L -- $346.22 168 6.9% 201$ - - - - 1 $333.72 162 5.9% Source: CoStar Office Market Report: Miami Office. 4 & 5 STAR SALES Year 2023 2022 2021 2020 2019 Completed Transactions {11 Market Pi -icing Trends l2) Deals Volume Turnover Avg Price Avg Price:SF Avg Cap Rate Pnce: SF Price Index Cap Race $430.88 174 5 9% $431.95 172 5.8% 5427.611 1ID 5 T% $420.65 161 5.l% $405.48 161 5.7% Source: CoStar Office Market Report: Miami Office. Capitalization Rates We researched office capitalization rates on a regional and metro scale. Below data includes Class A & B, First Tier, and Central Business District (CBD) & Suburban data. Capitalization rates ranged from 3.00% to 10.00% averaging 6.99%. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 58 Shutts & Bowen, LLP September 21, 2020 Source Date Market Capitalization Rates - Office Minimum Maximum Average RealtyRates Market Survey RealtyRates Market Survey RealtyRates Market Survey RealtyRates Market Survey PwC RERC RERC RERC RERC IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint 3Q 2019 Miami/Dade; Fort Lauderdale CBD Office: Class A & B 3Q 2019 Miami/Dade; Fort Lauderdale SUB Offce: Class A & B 2Q 2019 Miami/Dade; Fort Lauderdale CBD Office Class A & B 2Q 2019 Miami/Dade; Fort Lauderdale SUB Offce Class A & B 2Q 2019 Southeast Florida Office Market 1Q 2019 Miami CBD Office First Tier 1Q 2019 Miami SUB Off ce First Tier 1Q 2019 South Region CBD Office First Tier 1Q 2019 South Region SUB Off ce First Tier 2019 South Region Office Market: CBD Class A 2019 South Region Office Market: CBD Class B 2019 South Region Office Market: SUB Class A 2019 South Region Office Market: SUB Class B 2019 Miami Office Market: CBD Class A 2019 Miami Office Market: SUB Class A 2019 Miami Office Market: CBD Class B 2019 Miami Office Market: SUB Class B 5.00% 9.00- % 5.00- % 7.50- % 6.00% 8.50% 8.70% 9.10% 8.80% 9.20% 6.93 % 6.10% 6.80% 6.60% 7.20% 6.70% 7.64 % 7.09% 7.92 % 5.00% 6.25% 6.10% 6.50% Minimum Maximum Average 5.00% 9.00% 7.21 % Source: PwC Investor Survey, Realty Rates Market Survey, RERC, IRR Viewpoint. Construction According to CoStar, Miami currently has 25 office properties under construction totaling 2,791,275 square feet, of which 50.00% is pre -leased. Of the 25 properties, 10 are over 100,000 square feet with completion ranging dates from March 2020 to January 2022. Net completions in Miami totaled 140,000 SF over the past year with a continued heavy construction pipeline. Miami has seen the development of several large mixed -use projects that have sizable office components. Recent deliveries and propositions of large mixed -use projects includes the two Miami Central office towers delivering 320,000 square feet of office product in the Downtown Miami Submarket and a proposed 45-story office tower that is part of the mixed -use Miami Worldcenter. Miami -Dade County is the heaviest supply pipeline among South Florida's counties; however, demand remains healthy with pre -leasing at 50.00%. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 59 Shutts & Bowen, LLP September 21, 2020 DELIVERIES d DEMOLITIONS L. 1,000 800 600 400 200 0 -200 -400 -600 -800 Forecast } 2014 2015 2016 2017 2018 2019 2020 is f7rtvnrh+s • fl.ImrI, hrd • Nri fl i,e'ners I t " t 2021 2022 2023 i Source: CoStar Office Market Report: Miami Office. According to REIS, construction and planning of new buildings in Miami remains active. REIS notes the 447,700 square foot Plaza at Coral Gables mixed -use complex on Ponce de Leon Boulevard in Coral Gables, several miles southwest of downtown Miami, is expected to deliver in June 2020. Additionally, REIS indicated total completed and under construction office for Miami 2018 and later includes 2,812,241 square feet. This report is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 60 Mutts & Bowen, LLP September 21, 2020 Section 17 - Construction Delivenes Completed SF 2018 YTD 2019 SF Under Construction 2019 Totals 2020 and Later 2018 and Later Mutts and Single Tenant 772.242 201.582 181,670 821,950 1.917,444 Other Office 305.164 246,000 167,633 116,000 834,797 Totals 1,077.406 447.582 349,303 937,950 2.812,241 Planned Proposed Totals 11.900,155 250,000 12,150,155 3.285,480 344,430 3.629,910 15,185,635 594,430 15.780,065 Section 18 - Metro Construction Breakdown Metro Construction by Project Type 2018 and Later 9.9 % • Under 50.000 • 50,000-100,000 ■ 100.000-200.D00 ■ 200,000-500,000 ■ Over500.000 Metro Construction by Top Frye Submarket Share 2018 and Later 25 1 % • B,scsyne Blvd • North Marren' • Downtown • Hialeah 0 Airport West • Other Submarkets in Metro Includes all recently Gompfeled, under pdnstruptPon, planned. and proposed properees from the table above Note that some varied 'Rst,ngs for firm completion date. need ant pip posed prppert*s do not yet have a Source: REDS Office Metro: Miami. This report is Intended solely for the information and internal use of the intended user(s) and should not be used or retried upon by any other person or entity. Deloitte Advisory 61 Shutts & Bowen, LLP September 21, 2020 Miami Airport Office Submarket 13 14 Asking Gross Rents and Rent Growth According to the CoStar Miami Airport Office Submarket Report as of October 2019, the overall office market is estimated to have an average rent of $33.39 per square foot for 2019 and is forecast to have average rents from $34,12 to $35.40 per square foot from 2020 to 2023, Additionally, four- and five-star office rents are estimated to have an average rent of $38.22 per square foot for in 2019 and are forecast to have average rents increasing from $39,30 to $40.82 per square foot from 2020 to 2023. OVERALL RENT & VACANCY War 2023 2022 2021 2020 2019 Market Rent 1 Vacancy Per SF Index % Growth Vs Hist Peat SF Percent PPIs C $35.40 125 1.0% 7.4% 1,813.038 9,5% 02% $35.06 124 1.1% 6.3% 1,775,435 9.3% 0.5% $.34.67 123 1.6% 5.1% 1,665,297 8.8% 0.1 % $34.12 121 2.2% 3.5% 1,652,373 8.7% -0.5ro $33.39 118 1.3% 1.3% 1,747,691 9.3% 0.8% Source: CoStar Office Submarket Report: Miami Airport. 1' CoStar, Office Submarket Report: Miami Airport. Electronic PDF, 2019. 'd REIS Inc., Office Metro: Miami Airport West. Electronic PDF, 2019 This report is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 62 Shutts & Bowen, LLP September 21, 2020 4 & 5 STAR RENT 8 VACANCY Yea 2023 2022 2021 2070 2019 Market Rent Per SF InVeti 4e Grew!' Vs lost Peak S40.82 133 09% 8.5% S40.45 132 1.1 % 7.59/o S40.00 130 1.8% 6.3% S39 30 128 2 8% 4 5% S38.22 124 1.6% 1.6% Vacancy SF Percent Pets Chu 834,334 11.0% 0% 825,182 11.1% 0.6% 712,791 10.5% -0.39fr 789,6.33 10 8% -7 R% 979,070 13.6% 0.7% Source: CoStar Office Subrnarket Report: Miami Airport. As per a REIS competitive set survey of 30 properties in the Subject's submarket as of October 2019, average asking and effective rents are $34.52 and $28.19 per square foot, respectively. The average year built is 1991. 30 PROPERTIES As of 06/30/19 Current Asking Rent' SF Current Effective Rent/ SF Currant Vacancy Rate Operating Expanses: SF Pea Estate Taxes; SF Property Size (SF) Year Bult LOW WAN MEDIAN NIGH $17.4 535.52 535.73 545.50 $13.80 $26.19 528.32 536..07 20.1% 15.3% 100.0% 311.54 511.35 515.20 $0.78 32.90 52.81 35.48 $6.00 34.236 112,441 1924 1991 58,050 1986 251,000 2012 Source: REIS Office Metro: Miami Airport West. CoStar indicated healthy rent growth over the past year at 1.50% for the submarket but declines in forecasted rent growth over the next five- year period. Four- and five-star office rents in the submarket remain 15.00% below metro average giving Miami Airport a pricing advantage in attracting tenants for high quality space at a discount. REIS indicates asking rent growth rates of (-0.40%) for the competitive set and 0.40% for the Subject submarket year to date. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 63 Shutts & Bowen, LLP September 21, 2020 ASKING RENT GROWTH RATES QUARTERLY 20 2019 Comp Group -0.6% Airport West 0.0% Miami 0.3% 10 2019 -0 3% 0.8% 0 7% -U.4% 0.4% 0.5% ANNUALIZED 1 YFAR 3 YEAR 5 YFAR 6.6% 2.5 % 1 8% 4.4% 2.5% 2.1% 4 5'a 2.6% 2 6% Source: REIS Office Metro: Miami Airport West. Vacancy According to REIS, current vacancy is 19.90% and 14.20% for the competitive set and the Subject submarket, respectively. Comp Group I9.9% Airport West 14.3°% Miami 16.1% QUARTERLY 19.8% 14.0% 15.7% VACANCY RATES 610ANNUALIZED 19.9% 15.9% 14.2% 12.7% 15.9% 15.1% 3 YEAR 13.0% 11.9% 14.4% 12.9% 12.3% 14.8% Source: REIS Office Metro: Miami Airport West. According to CoStar, overall Miami Airport office submarket vacancy is estimated to be 9.30% in 2019. It is forecasted to decrease to 8.70% in 2020, but slowly increasing over time to 9.50% in 2023, Four- and five-star vacancy is estimated to be 13.60% in 2019. Similarly, vacancy among the four- and five-star office properties is expected to decline over the next year to 10.80%, but generally holding steady around 11.00% through 2023. This report is Intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 64 Shutts & Bowen, LLP September 21, 2020 Demand CoStar projects annualized inventory growth of 0.40% and annualized absorption growth of 0.30% from 2019 to 2023 for the overall office supply. For the four- and five-star supply, CoStar projects annualized inventory growth of 1.30% and annualized absorption growth of 1.74% for the same period. OVERALL SUPPLY B DEMAND Year 2023 2022 2021 2020 2019 Inventory Net Absorption SF SF Growth % Growth SF % of Inv 19,182,195 92,797 0.5°I° 55,488 0.3% 19,089,398 79,831 0.4% (30,024) .12 19,009,567 38,340 0.2% 25,729 01°%0 18,971,227 96,680 0.5°h 192,385 1.0% 18,874,547 114,167 0.6% (46,509) -0.2°0 Construction Ratio 1.7 1.5 0.5 I Source: Costar Office Submarket Report: Miami Airport. 4 $ 5 STAR SUPPLY & DEMAND Year 2023 2022 2021 2020 2019 Inventory SF SF Growth % Growth 7,576,674 110,726 1.5% 7,465.948 97,648 1.3% 7,368,300 55,937 0.8% 7,312,363 113,941 1.6% 7,198,422 162,407 2.3% Net Absorption SF ', of Inv Construction Ratio 101,486 1.3% 1.1 45,168 0.6% 2.2 72,693 1.0% 0 8 303,345 4.1% 0.4 90,414 1.3% 1.8 Source: CoStar Office Submarket Report: Miami Airport. Recent Transactions According to CoStar, the Miami Airport office submarket is one of the more -liquid submarkets in Miami with pricing 25.00% lower than the metro average and average capitalization rates of 6.00%. The CoStar submarket report indicates 65 transactions over the past 12 months; however, only two sales were around or above 100,000 square feet. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 65 Shutts & Bowen, LLP September 21, 2020 RECENT SIGNIFICANT SALES Property Sale Property Narne - Address Rating Yr Built Bldg SF Vacancy Sale Date Price Prite,SF Cap Rate iitOffices at Dora! Square 8600 NW 36th St * * * * * 1984 146,000 11 1% 8/15/2019 $37,000,000 $253 Q2500 Building 2500 NW 79th Ave * * * * * 1982 97,423 0% 4/18/2019 $12,050, 000 $124 Source: Costar Office Submarket Report: Miami Airport. Additionally, CoStar projects sales trends to increase from $257 per square foot to $281 per square foot from 2019 to 2023, with capitalization rates projected to increase 10 basis points. For the four- and five-star office properties, CoStar projects sales trends of $296 per square foot to $326 per square foot from 2019 to 2023, with capitalization rates projected to rise 20 basis points. OVERALL SALES Year Deals 2023 2022 2021 2020 2019 Completed Transactions Itl Market Pricing Trends I Volume Turnover Avg Price Avg Price SF Avg Cap Rate PrlceISF Puce Index Cap Rau 3281.47 164 6.4% - $277.49 162 6.4% - 5273.72 160 6.3% 3268.15 157 6 2% 3257.35 150 6 3% YTD 376.4 M 1.9% 38,413,906 3217.36 6.7% 3254.99 149 6 2% 2018 3258.3 M 6.3% 313,991,418 3237.37 5.8% 3264.44 154 6 1% Source: Costar Office Submarket Report: Miami Airport. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 66 Shutts & Bowen, LLP September 21, 2020 4 & 5 STAR SALES Year 2023 2022 2021 2020 2019 Deals Volume Completed Transactions (1) Marker Prising Trends 121 Turnover Avg Price Avg Price:SF Avg Cap Rate PnceISF Price Index Cap Rate S326 04 164 6.3% S321.74 162 6.2% S317.34 160 6.2% S310.42 156 6.1% S296.32 149 6.1% Source: Costar Office Submarket Report: Miami Airport. REIS indicated three recent transactions for the Subject submarket for third quarter 2019 ranging from $100 to $249 per square foot, This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 67 Shutts & Bowen, LLP September 21, 2020 Most Recent Transactions City, State 1. Miami Beach, FL Submarket Biscayne Blvd. Year Built 1959 Floors 5 Price Per Sy Ft Range $300 -3374 Sale Dale 03 2019 Reis Sales Comparables Number 5745324 2. Miami, FL Brickell 1960 1984 1 $2,000 - $2,500 03 2019 5765950 3. Coral Gables, FL Coral Gables 3 $375 - 5449 Q3 2019 5721163 4. Miami, FL Airport West 2006 4 $200 - 5249 Q3 2019 5737330 5. Miami, FL Airport West 1984 8 $200 - $249 Q3 2019 5737386 6. Coral Gables, FL Coral Gables 1965 4 $300.5374 03 2019 5752995 7. Miami, FL South Miami/Gables 2017 2 $300 - 5374 Q3 2019 5739144 8. Miami, FL North Miami 1986 4 $150 - $199 Q3 2019 5746272 9. Miami, FL Downtown 1926 14 $25 • $49 Q3 2019 5738042 10. Miami Beach. FL North Miami 1967 1 _ $600 - $699 $600 - $699 03 2019 5730763 11. Miami, FL Brickell 1981 15 03 2019 5703547 12. Miami, FL Airport West 1965 6 $100 • $124 Q3 2019 5712155 13. Miami, FL Coconut Grove 1958 1 $700 - 5799 02 2019 5714072 14. Hialeah, FL Hialeah 2008 1 $75 . $99 02 2019 5722968 15. Hialeah, FL Hialeah 1972 4 $12.5 - S149 42 2019 5721786 16. Miami, FL Biscayne Blvd. 1965 5 $300 - $374 02 2019 5704402 17. Coral Gables, FL Coral Gables 1966 3 $450 • $524 02 2019 5696160 18. Coral Gables. FL Coral Gables 1997 15 $375 • $449 Q2 2019 5663493 19. Coral Gables, FL Coral Gables 1985 13 $300 - $374 Q2 2019 5671585 20. Sunny Isles Beach. FL North Miami 1982 2 3125.5149 Q2 2019 5688589 Source: RE'S Office Metro: Miami Airport West. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Del oitte Advisory 68 Shutts & Bowen, LLP September 21, 2020 Construction CoStar projects annualized positive net absorption growth of 1.74% over the next five years for four- and five-star office product in the submarket with majority slated to come online in 2020. 4 & 5 STAR SUPPLY & DEMAND Year 2023 2022 2021 2020 2019 SF 7,576.674 7.465.948 7.368.300 7.312.363 7,198.422 Inventory SF Growth %Growth 110.726 1.5% 97.648 1.3% 55.937 0.8% 113.941 1.61:Io 162.407 2 3' Net Absorption SF % of Inv Construction Ratio 101,486 45,168 72,693 303,345 90,414 1.1 2.2 0.8 0.4 18 Source: CoStar Office Submorket Report: Miami Airport. According to CoStar, construction has picked up in the Miami Airport submarket, CoStar projects submarket delivery of 219,081 square feet and proposed delivery of 360,288 square feet over the next four quarters. Under construction projects in the vicinity of the Subject include 850 NW 42nd Ave, a six -story 113,081 square foot office building with expected completion date of May 2020. Proposed construction in the vicinity of the Subject includes 4601-4649 NW 36th St, an eleven -story 291,570 square foot office building with expected completion in June 2020. According to REIS, the Subject submarket ranks fifth in metro Miami for recently completed, under construction, planned, and proposed properties from 2018 onwards, accounting for 7.70% of new inventory. REIS indicated a total of 1,422,550 square feet including completed, under construction, and planned projects. Conclusion The Subject is located between the Miami International Airport and Downtown Miami submarkets in the Miami Airport office submarket. The submarket has seen healthy rent growth over the past year and are forecast to continue to increase over the next four-year period across the overall and four- and five-star supply. Annualized four- and five-star inventory and absorption growth are forecast to increase over the next four years. The submarket remains one of the more -liquid submarkets in Miami with sales trends projected to increase as well. Market data implies that the submarket fundamentals are strong. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 69 Shutts & Bowen, LLP September 21, 2020 Miami Tech -Hub Market 15 16 17 According to a September 2019 article from Forbes, Miami has been pushing to become a global startup hub centered on Latin America and currently ranks with New York and Los Angeles as among the hottest markets for startup activity. From 2010 to 2014, Miami was one of five metro areas accounting for 50.00% of all startup activity in the United States, and South Florida ranked number one in startup activity in the United States in 2017. Additionally, the line between software startups and startups is blurring with the majority of startups being tech companies in the current economy. The article noted Softbank announced a $2 billion fund to invest in Latin American startups and an Artificial Intelligence (Al) hub in Miami. A Curbed article as of March 2018 noted the Miami economy is changing from a tourism and hospitality economy, with the tech sector playing a key role in this transition. Tech sector jobs in Miami grew over 27% between 2012 and 2016, and are seeing increased capital coming from Latin America for these types of companies/positions. Additionally, Curbed noted tech companies are blossoming in neighborhoods such as Brickell, Coconut Grove, and Wynwood with good walkability, green space, culture, transportation, and connectivity. According to the Lockheed Martin website, the company operates the Orlando Hub with more than 8,000 tech employees. The Hub services as center to engage with advanced technologies to solve complex problems. Notably, Lockheed Martin recently opened the Lockheed Martin Cyber Innovation Lab at the University of Central Florida and a new Research & Development Facility at the Hub with plans to hire 1,000 additional employees. Advisor spoke with a market participant at CBRE Miami who specializes in this area and indicated that tech -hub workforce numbers for Miami are currently around 25,000 — 50,000 workers in the tech -hub sector. There is a lack of infiltration from core big name tech industries; however, tech is growing in Miami and tech -hub space is expected to substantially increase going forward. Rents Advisor researched tech -hub space market reports and comparable leases in greater Miami. Due to the relatively new and flexible definition of this space category from a commercial real estate perspective and as per discussions with market participants, comparable tech -hub specific spaces are challenging to identify. As such, Advisor conducted a search regionally and nationally for newer construction buildings with is Elizabeth MacBride, Miami Is Rising As A Tech Hub, With Some Surprising Help. Forbes, 2019 16 Lockheed Martin, Tech Hub Series: Developing an Ecosystem Fit for the Sunshine State. Website, 2019 17 Patrick Sisson, Miami's growing tech scene tries to level up: Can South Florida recast itself as a diverse, affordable innovation hub? Curbed, 2018 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 70 Shutts & Bowen, LLP September 21, 2020 descriptions focused on factors including but not limited to open floor plans, diverse mixes of tenants with presence of technology firms, collaborative/co-working spaces, innovation space, tech/lab space, campus atmosphere, and energy efficiency. The recently signed leases in place at the identified comparable properties are on a triple net ("NNN") basis. Based on the search criteria we identified comparable leases in Miami, Florida, Cambridge, Massachusetts, San Jose, California, and Washington D.C. signed from 2016 onwards. We researched CoStar office market and submarket reports for the respective metro areas and analyzed average per square foot gross rent and expense categories for four- and five-star office spaces. We subtracted the expenses from the gross office rents to determine an implied NNN office rent per square foot for each submarket. Finally, we divided the NNN tech -hub rents in each submarket by the implied NNN office rent for an indicated tech -hub to office ratio, on a NNN basis. Submarkets Low Midpoint High Submarket Rent Ratios 0.82 1.09 1.36 The comparable submarkets indicated a tech -hub to office NNN rent ratio average range from 1.01 to 1.18 with a midpoint average of 1.09. According to CoStar, the Miami airport office submarket had an average four- and five-star gross rent of $38.22 per square foot for 2019. Average expenses per square foot totaled $15.08 for 2019 resulting in an implied NNN office rent of $23.14. Given the midpoint ratio from the market research was 1.09, we multiplied the implied NNN office rent for the airport submarket by a ratio of 1.10 to estimate a NNN tech -hub rent of $25.34 per square foot. As such, in our valuation analysis we have estimated a tech -hub NNN rent of $25.50. We note that tech hub facilities typically require more power and utilities based on a high-tech tenant's needs. Given the NNN rent structure, this analysis assumes that all of the additional power usages of the tenant load and building utility expenses will be passed on to the respective tenants, with only minimal expenses being paid by the landlord. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 71 Shutts & Bowen, LLP September 21, 2020 Miami Hotel Market 18 19 20 21 The Miami -Fort Lauderdale -West Palm Beach Metropolitan Statistical Area (MSA) encompasses Broward, Miami -Dade, Monroe and Palm Beach counties. The Property is located in Miami -Dade County, Florida and the following information is for the Miami -Dade Hotel Market. According to HVS Hotel Valuation Index 2019, the Miami hotel market comprises eleven submarkets located throughout Miami -Dade County; the Miami market offered 58,025 hotel rooms as of February 2019 and ranked the fourth best -performing hotel market in the nation in 2018. According to The Plasencia Group Florida Lodging Trends Report from September 2019, the trailing twelve-month number of visitors to Miami as of second quarter 2019 was just over 130 million people. Additionally, Miami International Airport has shown an average annual growth of 2.20% for total passengers served from 2012 to May 2019. HVS notes recent improvements to Miami International Airport and Port of Miami has had a positive impact on visitation and a subsequent increased demand for additional hotels. According to 2019 Host Almanac, Miami places eighth in the top U.S. markets for total hotel revenues. Additionally, Miami as a whole saw 5.50% average daily rate ("ADR") growth in 2018 with little change in occupancy. Gross operating profit ("GOP") per available room growth was 10.90% and total labor growth per available room was 6.50% for Miami in 2018. We also analyzed 2019 Host Almanac publication of STR, Inc. The Host Almanac compiles data from over 10,000 hotels annually, covering more than 2,300,000 rooms around the globe. We examined data for Full & Limited Service hotels for the entire U.S. and for the South Atlantic Region which included both chain hotels and independent hotels located in both suburban and airport locations. In addition, we obtained portions of STR reports for the submarket. The STR reports are for Upscale Class and Upper Upscale Class hotels located in the submarket. STR reports measure a hotel's performance against a competitive set, market, and submarket. The data provides insights covering key metrics such as occupancy, average daily rate and revenue per available room. The reports provided historical, year to date, running three and 12-month, year over year percentage change and index data. The reports noted a census of 456 hotels with 57,897 rooms across the Miami/Hialeah hotel market. Additionally, the reports noted 101 hotels with 13,058 rooms and 81 hotels with 13,321 rooms across the same markets for the Upscale Class and Upper Upscale Class respectively. 8 HVS Hotel Valuation Index, United States — Miami - Hialeah. Electronic PDF, 2019 21 The Plasencia Group, Florida Lodging Trends Report. Electronic PDF, September 2019 0 STR Reports for competitive properties STR Inc., 2019 HOST Almanac Companion Year End 2018. Electronic PDF/Excel, 2019 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 72 Market: Miami/Hialeah, FL Market Class: Upscale Class Submarket: Miami Airport/Civic Center, FL Submarket Scale: Upscale Chains Source: STR Reports Market: Miami/Hialeah, FL Market Class: Upper Upscale Class Submarket: Miami Airport/Civic Center, FL Submarket Scale: Upscale Chains Source: STR Reports Census/Sample - Properties & Rooms Census Sample Properties Rooms Properties 456 57897 101 13058 105 15466 38 7659 Rooms 279 47093 79 11670 86 14312 38 7659 Sample % Rooms 81.3 89.4 92.5 100.0 Census/Sample - Properties & Rooms Census Sample Properties Rooms Properties Sample % Rooms 1 Rooms 456 57897 279 81 13231 64 105 15466 86 38 7659 38 47093 81.3 11827 89.4 14312 92.5 7659 100.0 Shutts & Bowen, LLP September 21, 2020 STR sample percentages within the Census ranged from 81.30% to 89.40% from the entire Miami/Hialeah market. STR referenced a competitive set of six properties for the Upper Upscale hotel and a competitive set of four to six properties across the three Upscale hotels. We note the Upper Upscale STR report represents a full -service hotel with a competitive set of hotels constructed mostly in the 1980's with one in the late 1970's. The Upscale Property STR report represents an extended stay hotel with a competitive set of hotels constructed form the late 1980's through early 2000's. The Upscale Property (select service) report represents hotels with competitive sets constructed from the 1980's to the early 2000's. Revenue Per Available Room ("RevPAR") According to the data from the STR sample, year to date RevPAR as of September 2019 was $149.29 and showed a decrease of 3.00% for the market. The running three month and running 12-month RevPAR's were $101.68 and $148.93 respectively. The Upper Upscale Class showed a year to date RevPAR as of September 2019 of $151.60 with a decrease of 1.60% for the market. The running three month and running 12-month RevPAR's were $105.28 and $149.91 respectively. Market: Miami/Hialeah, FL Market Class: Upper Upscale Class Source: STR Reports This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 73 Shutts & Bowen, LLP September 21, 2020 The Upscale Class showed a year to date RevPAR as of September 2019 of $118.44 with a decrease of 5.50% for the market. The running three month and running 12-month RevPAR's were $85.53 and $117.31 respectively. Current I %Chg Year to Date I % Chg Running 3 j % Chg Running 12 j % Chg Month Month I Month Market: Miami/Hialeah, FL Market Class: Upscale Class Source: STR Reports 81.73 -8,8 71.36 -8.1 149.29 -3.0 118.44 -5.5 101,68 5.1 85.53 -5.1 148.93 -2.8 117.31 -6.3 For Upscale Chains within the submarket, year to date RevPAR was $106.92 showing a decrease of 7.90% for the same period. Running three month and 12-month RevPAR's were $80.13 and $106.06 for Upscale chains in the submarket respectively. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 74 Shuns & Bowen, LLP September 21, 2020 Revenue Per Occupied Room ("RevPOR") We analyzed data from the 2019 Host Almanac for Food and Beverage and Other revenue per occupied room for Full and Limited Service hotels throughout the U.S. and South Atlantic Region. Food and Beverage RevPOR is inclusive of food, beverage, and other food and beverage revenue. Other revenue RevPOR is inclusive of other operated departments and miscellaneous income. Sample F&B RevPOR Full Service RTS Per Occupied Room night Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location 28.30% 28.00% 31.10% 31.00% 27.40% 26.00% $89.44 $86.47 $123.87 $93.83 $67.63 $56.10 Average 28.63% $86.22 Sample Other RevPOR Full Service RTS Per Occupied Room night Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location 7.50% 7.00% 12.00% 8.10% 5.10% 4.40% $23.75 $21.63 $48.26 $24.40 $12.61 $9.57 Average 7.35% $23.37 Sam • le Other RevPOR Limited Service RTS Per Occu • ied Room ni • ht Limited Service Total Limited Service Chain Limited Service Independent Limited Service South Atlantic Region Limited Service Suburban Location Limited Service Airport Location 4.10% 3.60% 9.90% 3.80% 2.40% 2.80% $5.44 $4.62 $19.80 $4.53 $2.62 $3.24 Average 4.43% $6.71 Source: 2019 Host Almanac Average Daily Rate ("ADR") According to the data from STR, year to date ADR as of September 2019 was $196.01 and showed a decrease of 1.10% for the market. The running three month and running 12-month ADRs were $146.86 and $197.32 respectively. The Upper Upscale Class showed a year to date ADR This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 75 Shutts & Bowen, LLP September 21, 2020 as of September 2019 of $200.85 with a decrease of 1.20% for the market. The running three month and running 12-month ADRs were $151.91 and $201.94 respectively. Market: Miami/Hialeah, FL Market Class: Upper Upscale Class Source: STR Reports Average Daily Rate Current I %Chg Month Year to Date I % Chg 134.59 -4.3 140.50 -3.5 Running3 I %Chg Month Running 12 I 196.01 200.85 146.86 -2.7 151.91 -2.6 Month 197.32 201.94 %Chg -0.3 -0.3 The Upscale Class showed a year to date ADR as of September 2019 of $151.44 with a decrease of 3.20% for the market. The running three month and running 12-month ADRs were $117.82 and $151.36 respectively. Market: Miami/Hialeah, FL Market Class: Upscale Class Source: STR Reports Current Month % Chg Average Daily Rate Year to Date I % Chg Running 3 I %Chg Month I Running12 I %Chg Month I 134.59 110.97 -4.3 -4.7 196.01 151.44 -1.1 146.86 -3.2 117.82 -2.7 -4.1 197.32 151.36 -0.3 -2.9 Additionally, we analyzed data from the 2019 Host Almanac for ADR for Full and Limited Service hotels throughout the U.S. and South Atlantic Region. ADR Full Service Sample Full Service Total $202.35 Full Service Chain $200.25 Full Service Independent $226.63 Full Service South Atlantic Region $184.49 Full Service Suburban Location $166.38 Full Service Airport Location $150.25 Average $188.39 Source: 2019 Host Almanac This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 76 Shutts & Bowen, LLP September 21, 2020 ADR Limited Service Sample Limited Service Total Limited Service Chain Limited Service Independent Limited Service South Atlantic Region Limited Service Suburban Location Limited Service Air.ort Location $128.20 $125.30 $180.53 $115.71 $108.15 ..110.61 Avera ' e 128.08 Source: 2019 Host Almanac Occupancy According to the data from STR, year to date occupancy as of September 2019 was 76.20% and showed a decrease of 1.90% for the market. The running three month and running 12-month occupancies were 69.20%and 75.50% respectively. The Upper Upscale Class showed a year to date occupancy as of September 2019 of 75.50% with a decrease of 0.40% for the market. (Market: Miami/Hialeah, FL Market Class: Upper Upscale Class Source: STR Reports Occupancy (%) Current I % Chg Month I Year to Date %Chg Running3 I %Chg g Running 12 I % Chg g 60.7 -4.7 59.7 -3.9 76.2 -1.9 75.5 -0.4 69.2 -2.5 69.3 -0.6 75.5 -2.6 74.2 -1.3 The Upscale Class showed a year to date occupancy as of September 2019 of 78.20% with a decrease of 2.40% for the market. The running three month and running 12-month occupancies were 72.60% and 77.50% respectively. Occupancy (%) Current I Month I Market: Miami/Hialeah, FL Market Class: Upscale Class Source: STR Reports %Chg Year to Date %Chg Running 3 Month % Chg Running 12 Month I 60.7 -4.7 76.2 -1.9 64.3 -3.6I 78.2 -2.4 69.2 -2.5 72.6 -1.0 % Chg 75.5 -2.6 77.5 -3.6 Additionally, we analyzed data from the 2019 Host Almanac for occupancy for Full and Limited Service hotels throughout the U.S. and South Atlantic Region. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 77 Occupancy Full Service Sample Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location 74.40% 74.700/0 70.70% 73.60% 71.50% 79.20% Average 74.02% Source: 2019 Host Almanac Occupancy Limited Service Sample Limited Service Total Limited Service Chain Limited Service Independent Limited Service South Atlantic Region Limited Service Suburban Location Limited Service Airport Location 75.60% 75.60% 75.70% 75.90% 74.00% 77.30% Average 75.68% Source: 2019 Host Almanac Recent Transactions Shutts & Bowen, LLP September 21, 2020 HVS notes fifteen (15) non -portfolio hotel transactions for Miami -Dade County in 2018 with total sales volume of $218,000,000 or 1,377 hotel rooms. Average per key price was $158,315 across the transactions. Among the fifteen transactions were eleven (11) limited service hotels and four full -service hotels. The average per key prices were $130,296 and $219,399 per key, respectively. We note however that based on our research several of these sales were of independent small hotels and several required significant capital expenditures and/or re -positioning. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 78 Shutts & Bowen, LLP September 21, 2020 Change In Value For Market: Significant value increase Moderate value increase Stable values Mraeler.rre value decline Significant value decline legend Moderate Value Increase: Stable Values: Idue Decline: X QNp Greater than +10% Between +3 ,y and +10% Between -3% and *3% Between -3 4 and -10 n Less than -1O% • • • • • N N rJ v v v 4 PI elected Source: HVS Hotel Valuation Index However, we have also searched Miami area sales over the last three years excluding downtown Miami using other sources of available data. Sales ranged from $21,800,000 to $85,000,000 which represent $173,132 to $415,094 per key, with a median and average sales of $306,522 and $283,209 per key, respectively. This report is intended solely for the information and internal use of the intended user(s) and should not be arsed or relied upon by any other person or entity. Deloitte Advisory 79 Shutts & Bowen, LLP September 21, 2020 Address 1350 N Ocean Blvd Deloitte Name/Brand Residence Inn Advisory - Hotel Submarket Pompano Sales Sale Date Sep-19 Sale Price $44,000,000 Keys 106 Price Per Key $415,094 1000 NW 42nd Ave Airport Regency Hotel Miami Airport Aug-19 $31,750,000 176 $180,398 5800 Blue Lagoon Dr Sofitel Miami Airport Jan-19 $48,650,000 281 $173,132 6700 NW 7th St (Part of Portfolio) SpringHill Suites Medley/Hialeah Aug-18 $29,250,000 150 $195,000 3401 NE First Ave Hyde Wynwood-Design Apr-18 $21,800,000 60 $363,333 440 Seabreeze Blvd Courtyard Ft Lauderdale May-17 $85,000,000 261 $325,670 3300 SW 27th Ave Ritz Carlton Coconut Grove Feb-17 $36,000,000 115 $313,043 3255 NW 87th Ave Holiday Inn Miami Airport Feb-16 $36,000,000 120 $300,000 Minimum $21,800,000 60 $173,132 Maximum $85,000,000 281 $415,094 Median $36,000,000 135 $306,522 Average $41,556,250 159 $283,209 Source: CoStar and Real Capital Analytics We note two recent transactions in the Miami Airport submarket from 2019 ranging from $173,132 and $180,398 per key for a Sofitel and Element brand property, respectively. These two properties were built in the early to mid 1980's. There was another transaction of a Holiday Inn built in 1998 located in the Miami Airport submarket which sold for $300,000 per key. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 80 Shutts & Bowen, LLP September 21, 2020 Miami Airport/Civic Center Hotel Submarket The STR reports we analyzed noted a census of 105 hotels with 15,466 rooms across the Miami Airport/Civic Center hotel submarket. Within the submarket, STR noted 38 hotels with 7,659 rooms for the Upscale Class. Market: Miami/Hialeah, FL Market Class: Upscale Class Submarket: Miami Airport/Civic Center, FL Submarket Scale: Upscale Chains Source: STR Reports Market: Miami/Hialeah, FL Market Class: Upper Upscale Class Submarket: Miami Airport/Civic Center, FL Submarket Scale: Upscale Chains Source: STR Reports Census/Sample - Properties & Rooms Census Properties Rooms 456 57897 101 13058 105 15466 38 7659 Sample Properties Rooms 279 47093 79 11670 86 14312 38 7659 Sample Rooms 81.3 89.4 92.5 100.0 Rooms 456 57897 81 13231 105 15466 38 7659 Rooms 279 47093 81.3 64 11827 89.4 86 14312 92.5 38 7659 100.0 The STR sample, or properties and rooms that submit performance data to STR, was 92.50% of the census for the submarket and 100.00% of the census for the upscale chains in the submarket. STR referenced a competitive set of six properties for the Upper Upscale hotel and a competitive set of four to six properties across the three Upscale hotels. Revenue Per Available Room ("RevPAR") According to the data from the STR sample, year to date RevPAR as of September 2019 was $95. The running three month and running 12- month RevPARs were $72.01 and $94.99 respectively. For Upscale Chains within the submarket, year to date RevPAR was $106. Running three month and 12-month RevPARs were $80.13 and $106.06 for Upscale chains in the submarket respectively. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 81 Shutts & Bowen, LLP September 21, 2020 RevPAR STR Sample Year to Date Upper Upscale Property Competitive Set Upscale Property 1 Competitive Set Upscale Property 2 Competitive Set Upscale Property 3 Competitive Set 119.38 $109.03 $119.18 $117.32 $106.02 $88.69 $85.22 $82.77 Running 3 Month Running 12 Month 84.27 $82.77 $76.07 86..99 $77.05 $62.24 $65.41 $60.58 15.65 $108.29 $118.87 $117.39 $104.50 $89.69 $87.12 $83.17 Source: STR Reports Year to date changes in RevPAR as of September 2019 for the Upper Upscale property, its competitive set, and the Upscale properties and their competitive sets from 2017 to 2019 were listed as follows: STR Sample RevPAR - Year to Date 2017 2018 2019 ;Upper Upscale Property Competitive Set Upscale Property 1 Competitive Set (Upscale Property 2 Competitive Set $112.30 $113.33 $129.70 $122.47 $106.69 $102.37 $111.15 $116.86 $132.00 $127.27 $103.44 $107.43 $119.38 $109.03 $119,80 $117.32 $106.02 $88.69 Upscale Property 3 $92.65 Competitive Set $85.86 $102.11 $35,22 $94.64 $32.77 Source: STR Reports Average Daily Rate ("ADR") According to the data from the STR reports, year to date ADR as of September 2019 was $118.11. The running three month and running 12- month ADRs were $94.04 and $117.79 respectively. For Upscale Chains within the submarket, year to date ADR was $133.57. Running three month and 12-month ADRs were $105.56 and $133.49 for Upscale chains in the submarket respectively. The competitive set for the Upper Upscale property had a year to date ADR of $133,25, The running three month and 12-month ADRs were $106.71 and $133.50 respectively for the same set. Year to date ADRs for the three Upscale property competitive sets ranged from $102.70 to $138.65 as of September 2019. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 82 Shutts & Bowen, LLP September 21, 2020 ADR STR Sample Year to Date Upper Upscale Property $146.31 Competitive Set $133.25 Running 3 Month Running 12 Month $114.62 $143.97 $106.71 $133.50 Upscale Property 1 $143.76 Competitive Set $138.65 $118.51 $141.23 $112.85 $137.83 Upscale Property 2 Competitive Set Upscale Property 3 Competitive Set $121.33 $115.67 $105.58 $102.70 $95.29 $91.21 $84.54 $79.07 $118.93 $116.15 $105.60 $102.71 Source: STR Reports Year to date changes in ADR as of September 2019 for the Upper Upscale property, its competitive set, and the Upscale properties and their competitive sets from 2017 to 2019 were listed as follows. STR Sample ADR - Year to Date 2017 2018 2019 Upper Upscale Property Competitive Set Upscale Property 1 Competitive Set 'Upscale Property 2 Competitive Set Upscale Property 3 Competitive Set $109.94 $133.27 $144.90 $138.29 $118.69 $122.15 $118.09 $105.16 $145.63 $135.37 $147.05 $145,09 $127,39 $123.64 $116.45 $113.02 $146.31 $133.25 $143.76 $138.65 $121.33 $115.67 $'105.58 $102.70 Source: STR Reports We note that the properties included in the STR reports are all dated in nature, and most are over 30 years old, except two offerings - an extended stay property and a stand-alone select service offering. Occupancy According to the data from the STR reports, year to date occupancy as of September 2019 was 80.80%. The running three month and running 12-month occupancies were 76.60% and 75.90% respectively. For Upscale Chains within the submarket, year to date occupancy was 80.00%. Running three month and 12-month occupancies were 75.90% and 79.50% for Upscale chains in the submarket respectively. The competitive set for the Upper Upscale property had a year to date occupancy of 81.80%. The running three month and 12-month occupancies were 77.60% and This report is intended solely for the information and internal use of the intended users)and should not be used or relied upon by any other person or entity. Deloitte Advisory 83 Shutts & Bowen, LLP September 21, 2020 81.10% respectively for the same set. Year to date occupancies for the three Upscale property competitive sets ranged from 76.70% to 84.46% as of September 2019, Year to date, running three-month, and running 12-month changes in occupancy as of September 2019 for the Upper Upscale property, its competitive set, and the Upscale properties and their competitive sets were listed as follows: STR Sample Occupancy - Year to Date 2017 2018 2019 Upper Upscale Property Competitive Set Upscale Property 1 Competitive Set 82.30% 85.00% 89.50% 88.60% 76.30% 86.30% 89.80% 87.70% 81.60% 81.80% 82.90% 84.60% Upscale Property 2 Competitive Set Upscale Property 3 ,Competitive Set 90.00% 83.80% 78.50% 81.60% 81.20% 86.90% 87.70% 83.70% 87.40% 76. 70% 80.70% 80.60% Source: STR Reports According to the HVS HVI index, the Airport/Civic Center submarket had the highest occupancy rate for the five-year period from 2013 to 2018 at 86%. Conclusion The Subject is located in the Miami Airport / Civic Center hotel submarket, We analyzed hotel data for the Full and Limited Service chain and independent hotels, both nationally and in the South Atlantic region location in both suburban and airport markets. Further, we analyzed competitive set for hotels in the Subject submarket. We note, the competitive Upper Upscale and Upscale submarket sets were generally comprised of older properties. According to the market data, Miami places eighth in the top U.S.. markets for total hotel revenues and saw roughly 6.00% ADR growth in 2018 with minimal change in occupancy according to Host Almanac. Additionally, recent improvements to Miami International Airport, directly west of the Subject, has had a positive impact on visitation and increased hotel demand. Year to date ADRs for the competitive set properties in the submarket saw moderate ups and downs from 2017 to 2019, and trended slightly lower than the Host national and regional Full and Limited Service data. We note that most of the competitive properties in the submarket are all dated (constructed in the 1970s and 1980's) with the only new properties being an extended stay and stand- alone select service property. Hotel sale volumes in the Miami market are projected to remain stable going into 2020. We note two recent transactions in the Miami Airport submarket from 2019 ranging from $173,132 and $180,398 per key for a Sofitel and Element brand property, This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 84 Shutts & Bowen, LLP September 21, 2020 respectively. These two properties were built in the early to mid-1980's. There was another transaction of a Holiday Inn built in 1998 located in the Miami Airport submarket which sold for $300,000 per key. The proposed development would be a far superior offering than any current hotel in the submarket area due to its age, location and the fact that it would be part of a larger mixed -use development anchored by a stadium (which would drive several high -attendance events per year). This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 85 Shutts & Bowen, LLP September 21, 2020 Miami Airport Submarket (CoStar) East Coast Buffer Water Preserve Area 825) Doral etwater Kendale Lakes The Crossings 875 our de ach each and Fontainebleau Opa-locka 953 Miami S• ' .gs Westchester $z� oral Gables Sunset South ianii 801 Kendall Pinecrest ass? North Miami Miami Shore Ke yne This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 86 Shutts & Bowen, LLP September 21, 2020 Miami Airport Submarket (CoStar) This report is intended solely for the information and internal use of the intended user(s)and should not be used or relied upon by any other person or entity. Deloitte Advisory 87 Shutts & Bowen, LLP September 21, 2020 Miami Springs/Doral Submarket (CoStar) East Coast Buffer Water reserve Area CED Dora! IQ ICd dens I-ialea Medley t, Miami S legs Swetw ater Fontainebleau Westcheste Kendale Lak 826 9J3 Sunse' 3 CID t 1 918 CD 95 Miami mi Shot . ePi9o8 wCoral G- • - The Crossinas Kendall Pinecrf✓st • 440 Mia Iff Fis '4 NiNeit ey our de ach each an•:; This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 88 Miami Springs/Doral Submarket (CoStar) This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory Shutts & Bowen, LLP September 21, 2020 89 Shutts & Bowen, LLP September 21, 2020 Mixed -Use Developments This appraisal is based on the extraordinary assumption that the City of Miami can achieve a land use amendment and rezoning of the site to SAP necessary to develop the subject site to a higher density mixed -use usage and thereby allow it to be developed to its highest and best use. The proposed development for the Subject includes 600,000 square feet of retail and entertainment space, 400,000 square feet of tech -hub space and 750 hotel rooms across separate full service and limited service hotels, and both parking garages and surface parking comprising over 5,800 spaces. The proposed development also includes a 25,000-seat soccer stadium to house a MLS team and multiple practice soccer fields constructed above the proposed surface parking lots. We analyzed eight mixed -use developments located throughout Miami -Dade County to understand what types of mixed -use developments have recently been constructed in the area and specifically the property mixes thereof. We have summarized the developments below. Develo . ment Address Development Cit Proximit to Subject miles Downtown Doral White Course 850 Le Jeune Biscayne Landing / Sole Mia CityPlace Doral Kendall Town Center Magic City Parks at Delray 8551 NW 53rd Street 4402 NW 87th Avenue 850 NW 42nd Avenue 15055 Biscayne Boulevard 8300 NW 36th Street 16204 SW 88th Street NE 62nd Street Between NE 4th Avenue & NE 4th Court 2100 S Congress Avenue Doral Doral Miami North Miami Beach Doral Miami Miami Delray Beach 7.5 8.0 1.0 15.0 7.0 19.0 7.0 50.0 Downtown Doral The Downtown Doral mixed -use development is located at 8551 NW 53rd Street, roughly seven and a half miles from the Subject and west of Miami International Airport. According to CoStar, the city of Doral is located in the Miami Airport submarket for office and retail. According to the CoStar Miami Airport Office Submarket Report from October 2019, Downtown Doral is the developer Codina Partners' largely built out one -billion -dollar mega -development and comprises over one million square feet of office space across five buildings, 70 retail stores and restaurants across 180,000 square feet, and roughly 3,000 residences. White Course The White Course development site is located directly south of the Downtown Doral development at 4402 NW 87th Avenue, eight miles from the Subject in Doral, Florida. According to the South Florida Business Journal from April 2016, Lennar Homes and CC Homes paid a combined $96 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 90 Shutts & Bowen, LLP September 21, 2020 million to acquire the White Course site. Lennar and CC Homes had a pending development application with the City of Dora! for 2,209 residential units, 150,000 square feet of office, and 30,000 square feet of retail. 850 Le Jeune The 850 Le June mixed -use development is located at 850 NW 42" Avenue, roughly one mile from the Subject, and two miles south of Miami International Airport. According to the Century Homebuilders Group developer website as of April 2019, 850 Le Jeune will include 230 multifamily units, two towers with 100,000 square feet of office space, and 40,000 square feet of retail space. Century Homebuilders Group broke ground on the 100,000 square foot Phase I of the project at the end of 2018 with plans to complete by 2020. Magic City Innovation District Magic City Innovation District is located roughly seven miles northeast from the Subject. According to The Real Deal as of June 2019, Magic City Innovation District is a one -billion -dollar mixed -use project including residential, office, hotel, and retail components. According to CoStar the development will include 2,630 residential units, 432 hotel rooms, 344,548 square feet of retail, and 1,987,686 square feet of office. Additionally, the project will include 165,528 square feet of open space. The project is zoned special area purpose, the same as proposed for the Subject. Biscayne Landing / Sole Mia Biscayne Landing / Sole Mia is a mixed -use development, formerly located at 14500 Biscayne Boulevard, now located at 15055 Biscayne Boulevard in North Miami, Florida. According to CoStar, Biscayne Landing / Sole Mia is located in the Northeast Dade submarket for office and retail. Biscayne Landing is 13 miles north of downtown Miami. According to CoStar, Biscayne Landing / Sole Mia is a one -billion -dollar mixed -use community being developed in joint venture with Boca Developers of Deerfield Beach, Florida. According to CoStar, the project will consist of 4,390 apartments, 630,950 square feet of retail, and 150 hotel rooms. According to Miami New Times, the development was renamed Sole Mia from Biscayne Landing in 2015. According to The Miami Herald, Sole Mia, began leasing its first two apartment buildings in January of 2019. The apartments are twin 17-story towers known as The Shoreline. The Miami Herald also noted a 156,000 square foot Costco store relocation to Sole Mia which is currently open. Parks at Delray Parks at Delray is a 50-acre mixed -use development with 650 multifamily units, 100,000 SF of retail and 70,000 SF of office. According to CoStar as of August 2019, the development is the former Office Depot world headquarters and is located at 2100 S Congress Avenue Delray Beach, This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 91 Shutts & Bowen, LLP September 21, 2020 Florida, roughly 50 miles from the Subject. Landowner Centerpointe Delray Holdings is preparing to tear down the headquarters and submit the first of three site plans for Parks at Delray. CityPlace Doral According to the CityPlace Doral website, CityPlace Doral is located at 8300 NW 36th Street in Doral, Florida. CityPlace Doral is a master -planned center for upscale living, dining, entertainment and shopping located in the heart of Doral, Florida. CityPlace Doral was developed by The Related Group as a mixed -use concept opened in 2017. The project features 250,000 square feet of retail and 700 luxury residences located on 16.46 acres. The multifamily component covers 2,600,000 square feet. Kendall Town Center Kendall Town Center is a proposed mixed -use development located at 16204 SW 88th Street in Miami, Florida. The proposed development is located 19 miles from the Subject and will include 100,000 square feet of office, 418,920 square feet of retail, and 600 apartment units on 70 acres of land. According to CoStar, the proposed development is in the Kendall submarket for retail, office, and multi -family. Development Apartments Retail Office Hotel Acres Subject Acres Multiplier Apartments Retail Office Hotel Proposed Development 73 N/A 600,000 400,000 750 Downtown Doral White Course 850 Le Jeune Magic City Biscayne / Sole Kendall Town Mia Center CityPlace Parks at Delray 2,840 2,209 230 2,630 4,390 600 180,000 30,000 26,284 344,548 630,950 418,920 1,000,000 150,000 186,797 1,987,686 - 100,000 - - - 432 150 - 250.00 128.00 4.30 17.75 183.00 70.00 700 250,000 16.46 650 100,000 70,000 50.00 73.00 73.00 73.00 73.00 73.00 73.00 73.00 73.00 0.29 0.57 16.98 4.11 0.40 1.04 4.43 1.46 829 1,260 3,905 10,816 1,751 626 3,104 949 52,560 17,109 446,217 1,417,014 251,690 436,874 1,108,748 146,000 292,000 85,547 3,171,205 8,174,709 - 102,200 1,777 60 We note many of the mixed -use comparables we analyzed include a multi -family component; however, under the Miami 21 Zoning Code, a Special Area Plan, the Property's location adjacent to a major international airport makes any form of residential development questionable. As such, we have excluded multi -family from our analysis. We have compared the mixed -use comparable site sizes to the Subject site size and calculated the potential mixes for the Subject based on the implied multiplier of each comparable. We note that the developer's proposed uses and sizes fall within each property use range of what is implied by the comparable developments, as such we have assumed the proposed commercial property mix for the Subject development. We will review financials provided by the Client and the anticipated financial returns of the proposed soccer stadium in the next section. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 92 Shutts & Bowen, LLP September 21, 2020 Soccer Stadium Analysis MFP plans to develop the site with a 25,000-seat MLS stadium in addition to the mixed -use commercial development. The total land size of the overall development is 73.5 acres with 63 acres allocated to the mixed -use development and 10.5 acres allocated to the stadium site. MFP's estimated construction costs for the stadium is approximately $310 million. Stadium design and construction is unique in nature therefore data is relatively more limited for a special usage property such as this. We have researched stadium costs and ground rent details of other recently constructed or currently proposed MLS stadiums. These details are summarized in the following table: Recent MLS Stadium Construction Proposed b MFP Summary St. Louis 2022 Sacramento Austin Columbus Nashville Allianz Audi Banc of CA Exploria 2022 2021 2021 2021 2019 2018 2018 2017 Square Feet 400 000 420 000 500 000 346 000 542 000 No. of Seats 25,130 22,500 20,000 21,000 20,000 30,000 19,400 20,000 22,000 25,500 Site Acres Total 30 240 24 Site Acres Stadium 18 0 14.0 10.5 12.0 12.5 Remediation Yes Yes Yes Yes Yes Public Cost N/A N/A N/A N/A $140,000,000 $225,000,000 $20,000,000 $150,000,000 N/A N/A Total Cost $310 845 290 $250 000 000 $252 000 000 $242 000 000 $295 000 000 $275 000 000 $250 000 000 $400 000 000 $350 000 000 155 000 000 Lease Term (Years) 20 30 99 52 30 10 Renewals 3 X 10 1 X 30 3 X 5 Annual Rent $550,000 (year 6 thereafter) $10 $200,000 (5% increase every 10 years starting year 30) $556,620 $1 ($2 per ticket years 11-20. $2 per ticket CPI adjusted years 21 thereafter) $400,000 (beginning year 3) Maintenance StadCo. StadCo. Net Lease Lessee CapEx StadCo. City Net Lease Lessee Property Tax Pays for 25 years $27,200,000 reimbursements Exempt Exempt 25% after 5 years 50% after 10 years 75 % after 15 years 100% after 20 years $1,000,000 Cost Per SF - - - $605 $702 $550 $723 - - $286 Cost Per Seat $12 369 $11 111 $12 600 $11 524 $14 750 $9 167 $12 887 $20 000 $15 909 $6 078 We note that MFP's construction costs on a per seat basis fall in line with these comparables. We also note that some of the stadiums are benefiting from below market rents and other tax benefits. This trend of sports team owners benefiting from public funds when construction stadiums started in the 1980's. In 1992, 77% of all professional sports stadiums were partially subsidized or paid for with government money. There are differing opinions on the topic. One side claims that these initiatives are an investment for local governments to spur the economic growth and tax revenue. The other side argues that stadium subsidies create hidden costs for local economies22. Professional sports teams have many other expenses other than paying for a stadium, and the bulk of the revenues only come from a limited games and events (per year). MLS soccer teams have 34 regular season games and typically four (4) preseason games per year and half of those (19 total) are home games. There is also an opportunity for up to four (4) more playoff games. It is also likely that the soccer stadium will be used as a concert venue or for other events. However, in Miami there are multiple other sporting venues that are used for these other events 22 Michael D, Farren & Anne Philpot, 'The Hidden Costs of Stadium Subsidies', Medium, Mercatus Center at George Mason University, 2017, https://medium.com/concentrated-benefits/the-hidden- costs-of-stadium-subsidies-fbc079f335f3 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 93 Shutts & Bowen, LLP September 21, 2020 such as — American Airlines Arena (Miami Heat — basketball), Marlins Park (Marlins — baseball), Hard Rock Stadium (Dolphins — football), and BB&T Center (Panthers — hockey). Furthermore, there is a large theater at the Seminole Hard Rock Hotel & Casino and many other theaters through the Miami metro area. Given the limited revenue opportunities and the cost of owning a professional sports team, the soccer stadium is not considered to be the highest and best use on a stand-alone basis; however, we believe that the stadium will be a catalyst for other usages and the visitors thereof. The hotels will likely see increased ADRs and/or occupancy than that of their peers due to out of town fans, the visiting team/personnel and their respective fans and other MLS business. The retail and entertainment space will have access to a large, captive pool of visitors multiple times per year - on top of regular customers from the office tenants, hotel guest and nearby residents which normally feed the retail components of large mixed -use projects. In the end, the 10.5 acres of stadium land will have a positive value, but lower than the land value the rest of the mixed -use development. RATE OF RETURN STADIUM DISCUSSION In order to evaluate the financials surrounding the team and stadium, it's important to lay out the anticipated entity structures. It is our understanding that upon commencement of development, two entities will be created by the team owner. A Stadium Corporation ("StadCo") will be created to own and operate the stadium. Separately, a Team entity ("TeamCo") will be created to own and operate the team. In order to evaluate the projected financial performance of the stadium, we received projections for stadium revenues and expenses through 2046, or 25 years after the anticipated commencement of construction of the stadium. Analyzing the StadCo projected cash flows line by line was beyond the scope of the assignment, but we did note two items missing upon our review. There were no general ticket sales revenues or team rental payment revenues included within the cash flow projections. However, due to the uncertainty of the revenue projections we did not deem it to be appropriate to provide an independent estimate of these revenue amounts but note the projections may be conservative. Prior to evaluating the internal rate of returns from the cash flow projections for the Stadco, the only modification Advisor made to the cash flows was to add in a ground rent equivalent to a pro-rata share of 14.2% (based upon 10.5 acres / 73.5 total acres) of the concluded ground rent. When adjusting the cash flows for the ground rent and noted an indicated rate of return of 9.8% on an unlevered basis. While this is lower (approximately 30%) than the estimated weighted average return on the rest of the development (12.8%), we do note that it is predicated on no general ticket sales revenues and no team rent. We also acknowledge that StadCo's are set up based upon a limited return expectation in the marketplace, and TeamCo will be a sister company that will provide a buffer on cash flows. Based upon a review of the cash flows, a key finding from this analysis is that development of the Stadium appears to provide an adequate return and it is not anticipated to be a financial drain and/or negatively impact the larger mixed -use development. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 94 Shutts & Bowen, LLP September 21, 2020 Highest and Best Use As described in the Type and Premise of Value section of this report, highest and best use refers to the use of an asset by market participants that might maximize the value of the asset or the group of assets within which the asset may be used. The highest and best use of the asset establishes the valuation premise used to measure the fair value of the asset. The highest and best use analysis evaluates the real property on an as vacant and as improved basis and should be based on the use or uses that are physically possible, legally permissible, financially feasible, and maximally productive. As Vacant The size, physical characteristics, and access linkages of the site adequately accommodate most uses. The characteristics of the site and predominant uses in the immediate area indicate that a commercial use would be most practical for the subject site. As discussed in the Market Analysis section of this report, there have been several new mixed -use commercial developments in the Miami market recently. We note that most of these recent developments have some sort of residential component included. However, under the Miami 21 Zoning Code, a SAP, the Property's location adjacent to a major international airport makes any form of residential development questionable. It is an extraordinary assumption of this appraisal that the appropriate SAP zoning necessary to develop the Property as a mixed -use commercial development is in place as of the date of value. Based on this assumption, market analysis presented earlier in this report, and the feasibility of recent mixed -use developments, we have concluded that the highest and best use of the Property as vacant is a mixed -use commercial development. As Improved The real property, as improved, represents a good public golf course with minimal vertical improvements (restaurant, clubhouse and golf education buildings). Its large size and strong location just off the highway and robust traffic counts make it a desirable site for commercial development. There are many ongoing large mixed -used developments in nearby Dora!, however, though have very large residential (single family and multi -family) portions. The Property's location adjustment to a major international airport makes any form of residential development questionable, however is favorable for office/tech-hub, hotel and retail usages. The highest and best use of the site is to hold for future large scale mixed -use commercial development, as the improvements have minimal demolition costs/time. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 95 Shutts & Bowen, LLP September 21, 2020 Valuation Analysis Sources of Information We researched, collected, and evaluated information obtained from public sources including print and on-line media. We also collected and considered private information provided by the Client and other third -party sources. This report does not constitute an audit conducted in accordance with auditing standards generally accepted in the United States of America or standards of the Public Company Accounting Oversight Board (United States), an examination of internal controls, or other attestation or review services in accordance with standards established by the AICPA. Advisor does not express an opinion or any other form of assurance with respect to (1) financial statements, (2) operating or internal controls of any entity included in the engagement for any date or period, or (3) future operations of any entity included in the engagement. The Services and this report do not constitute (1) a recommendation regarding the acquisition or financing of any business, assets, liabilities, or securities; (2) a market or financial feasibility study; (3) a fairness or solvency opinion; or (4) an examination or compilation of, or the performance of agreed upon procedures with respect to, prospective financial information in accordance with standards established by the American Institute of Certified Public Accountants or the Public Company Accounting Oversight Board. The engagement and the Deliverables are not intended to be and shall not be construed to be "investment advice" within the meaning of the Investment Advisers Act of 1940. Approaches to Value Income Approach The income approach measures the value of an asset by analyzing the present worth of the economic benefits it is expected to produce. These benefits may include earnings, cost savings, tax deductions, and disposition proceeds. An indication of value may be developed under this approach by discounting expected cash flows to their present value at a rate of return that incorporates the risk -free rate for the use of funds, the expected rate of inflation over the asset's holding period, and the risks associated with realizing the cash flows in the amounts and at the times projected. The discount rate selected is typically based on rates of return available from alternative investments of similar type and quality as of the valuation date. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 96 Shutts & Bowen, LLP September 21, 2020 Sales Comparison Approach The value of an asset in the sales comparison approach is measured through an analysis of sales and offerings of comparable property. Sales and offering prices for the comparable assets are adjusted to reflect differences between the asset being valued and the comparable assets, such as location, time and terms of sale, utility, and physical characteristics. Cost Approach The cost approach measures the value of an asset by the cost to reproduce or replace it with another asset of like utility. To the extent that the asset being valued provides less utility than a new asset, the new reproduction or replacement cost is adjusted to reflect appropriate physical deterioration and functional and external obsolescence. Physical deterioration is the loss in value produced by wear and tear, action of the elements, disintegration, use in service, and all physical factors that reduce the life and serviceability of the asset. Functional obsolescence is the loss in value caused by internal factors, including excess capacity, inadequacy, and technological changes, that impact the asset itself or its relationship with other components of a larger asset. External obsolescence is the loss in value initiated by economic forces external to the subject asset itself, including changes in optimum use, legislative enactments, and supply and demand relationships. Applicability of Approaches We considered and evaluated each of the three traditional approaches to value: the income approach, the sales comparison approach, and the cost approach. We relied on the income approach to determine the residual land value of the proposed development and also considered the sales comparison approach using recent land sales in the Miami market. We did not rely upon the cost approach, because it is not applicable to the valuation of land. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 97 Shutts & Bowen, LLP September 21, 2020 Income Capitalization Approach Scenario A (As if Remediated) The income capitalization approach to value is based on the premise that a relationship exists between the income that a property is capable of producing and the value of that property. The principles of anticipation and change are central to this approach. To apply the income capitalization approach, estimate the annual effective income the property can generate; deduct from this the anticipated expenses to be incurred with the operation of the property; determine the appropriate capitalization technique; and then mathematically process the net income stream into an indication of value. Two methods commonly used to value real property are the direct capitalization method and yield capitalization method, also referred to as discounted cash flow analysis (DCF). Both the direct capitalization and the yield capitalization methods are widely used for property types similar to the real property and have been applied. Direct Capitalization Direct capitalization is a method that converts a property's stabilized, single -year net operating income (NOI) into an indication of value. The following steps illustrate the process: • Estimate the Potential Gross Income (PGI) from sources (including reimbursed operating expense income) that a competent owner should be able to generate from the operation of the Subject Property based on contractual and/or market rent. • Estimate vacancy and collection loss from the market and deduct it from the PGI to arrive at an Effective Gross Income (EGI). • Estimate operating expenses from the subject property's history as well as analyzing comparable properties (if available) and deduct from the EGI to arrive at a stabilized NOI estimate. • The stabilized NOI is divided by an overall capitalization rate, derived from market indicators, to arrive at a stabilized property value. • That stabilized value indication is then adjusted for the various nuances of the subject property, which may cause it to vary from the stabilized value, to arrive at an indication of the "as is" value of the subject property as of the date of value. By capitalizing the NOI through an overall capitalization rate derived from market data, the market value indication for the Property can be calculated using the direct capitalization method. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 98 Shutts & Bowen, LLP September 21, 2020 Yield Capitalization Yield capitalization, also referred to as discounted cash flow analysis (DCF) is a method used when the real property's future income is expected to be uneven, usually due to a result of numerous leases, anticipated changes in income and expenses, or a property that has not yet reached stabilization. Yield capitalization also factors in the time value of money, as well as variability, timing and duration of cash flows. Yield capitalization is utilized by institutional market participants who put great weight on this analysis for income producing properties. The following steps illustrate the process: • Estimate the before -tax cash flows for each period of the projected holding period, after deducting any capital expenditures, replacement reserves, tenant improvement allowance and leasing commissions from the NOI estimate. • Estimate a discount rate and terminal capitalization rate from the market. • Estimate a sales cost (typically a percentage of the value) to be deducted from the terminal value at the end of the projected holding period (forward basis). • Discount the cash flows and the terminal value to a present value using the estimated discount or yield rates. According to The Appraisal of Real Estate, 14th Edition, "Net present value (dollar reward) is the difference between the present value of all positive cash flows and the present value of all negative cash flows, or capital outlays." Based on determining the land residual value, we have used the yield capitalization (DCF) approach by analyzing discounted cash flows of the proposed development by use type. Year 1 is considered a planning and pre -construction year while approvals are being finalized. We built a DCF for each use type over a ten-year holding period (once construction begins in Year 2) considering construction costs, lease -up costs, and the net operating income. The cash flows were discounted back to the net present value based on a market derived discount rate. We added the total present value for each component for a combined residual value to the land. Construction Costs We referenced Marshall Valuation Service Cost Manual (MVS) from Marshall & Swift to determine construction costs for the retail, tech -hub and parking components for the Subject. We referenced HVS U.S. Hotel Development Cost survey for 2018-2019 to determine construction costs for the full service and limited service hotel components of the Subject. As per the Client, the proposed retail development at the Subject will include retail and restaurant space. To estimate a base cost per square foot from MVS we considered a mix of Excellent Class A Retail, Good Class A Luxury Retail, and Excellent Class A Restaurant. For the proposed tech -hub development, we estimated a base cost per square foot from MVS considering Good Class A Laboratory/Classroom space. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 99 Shutts & Bowen, LLP September 21, 2020 The proposed development includes two parking components between parking structure space and a surface parking lot. We allocated the parking structure construction costs across the different use types as per the proposed MFP development plans. Our parking structure base cost per space is based on MVS Average cost per space. Our surface parking lot base cost is based on Good cost per space for surface lots. Site development costs including, but not limited to, roads, utilities, and landscaping have been estimated at $7.9 million. These costs have been allocated to the different uses and is included in the per unit costs presenting in the following table. For the purpose of our analysis we assumed one-story to three-story, Eastern Cost multiplier, and Miami Location multiplier across the use types discussed above. We also considered soft costs at 10.00% and entrepreneurial incentive at 15.00%. For the full service and limited service hotels we estimated construction costs based on average full service and average select service price per key. In each respective DCF, construction costs were split evenly across the years of construction with a growth rate of 2.50% applied. We note that MFP's plans include multiple raised soccer fields above the West and South surface parking lots. These costs should not be included in our analysis based our discussions the Client and can potentially achieve a rent for usage that may offset the costs of construction. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 100 Shutts & Bowen, LLP September 21, 2020 Costs Summary MVS/HVS Deloitte Advisory Conclusion Retail Total Gross Retail Area - SF 600,000 Total $193,497,011 Total $195,600,000 Per SF $322.50 Including Site Site Development Costs Per SF $326.33 PSF Assumption $326.00 Tech -Hub Total Gross Office Area - SF 400,000 Total $116,896,626 Total $117,600,000 Per SF $292.24 Including Site Site Development Costs Per SF $294.03 PSF Assumption $294.00 Hotel - Full Service Total Gross Hotel Area - SF 169,500 Total $176,559,500 Total $177,000,000 Total Area - Rooms 500 Per SF $1,041.65 Per Room $353,119 Including Site Site Development Costs Per Room $354,37600m Assumption $354,000 Hotel - Limited Service (at Tech -Hub) Total Gross Hotel Area - SF 96,533 Total $61,003,250 Total $61,250,000 Total Area - Rooms 250 Per SF $631.94 Per Room $244,013 Including Site Site Development Costs Per Room $245,445oom Assumption $245,000 Parking West & South Total Gross Parking Area - SF 1,051,100 Total $8,863,399 Total $12,760,050 Total Area - Spaces 3,310 Per SF $8.43 Per Space $2,678 Cost Per Space $2,678 Including Site Site Development Costs Per Space $3,855pace Assumption $3,855 Parking Structure (for all other uses) Total Gross Parking Area - SF N/A Total $31,883,209 Total $31,920,000 Spaces (excluding Stadium) Per Space $16,781 Cost Per Space $16,800 Retail 0 Tech Hub (or Office) 1,280 Hotel Full Service 480 Hotel Limited Service 140 Total Parking Spaces 1,900 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 101 Shutts & Bowen, LLP September 21, 2020 Carrying costs for real estate taxes through the planning and approval period, construction period, and lease -up time have been allocated across the retail, tech hub, and hotels uses based on the estimated allocated land needed for each use. The taxes that would be allocated to the surface parking land area is also being spread across retail, tech hub, and hotel. All other carrying costs are assumed to be included in the per unit construction costs in the previous table. Retail DCF Property Analysis Based on the Client provided proposed development information, we assumed two construction phases for the retail development with 300,000 square feet constructed in Phase I and 300,000 square feet constructed in Phase II. Phase I retail construction occurs over Years 2 and 3, Phase II retail construction occurs over Years 4 and 5. Total construction for the retail development is assumed to take place over four construction periods. We have assumed that each phase will be 67% pre -leased upon completion (as the developer will have sufficient time to pre -market the development with tenants) with the remaining space being absorbed 25,000 square feet per month thereafter. Market Rent As discussed in the market analysis section of this report we analyzed Miami Retail market and Miami Airport Retail submarket data. Source Date Market Market Rents - Retail Minimum Maximum Average CoStar CoStar CoStar CoStar CoStar REIS REIS 2019 Overall Miami Retail Market 2019 Miami Neighborhood Center 2019 Overall Miami Airport Retail Submarket 2019 Miami Airport Neighborhood Center 2019 Comparable Effective Rents 2019 REIS Competitive Set (Nonanchor) 2019 REIS Competitive Set (Anchor) $36.73 $33.37 $32.96 $35.44 $31.98 $30.66 $17.40 Minimum Maximum Average $17.40 $36.73 $31.22 According to CoStar, rents at comparable properties within a 2-mile radius range from $21.24 to $35.00. Based on the make-up of the proposed property and it being the newest in the area and having a likely higher mix of food services, specialty and entertainment usages, we have assumed a retail rent of $35.00 per square foot for the Phase I and Phase II developments. Vacancy and Collection Loss According to PwC Real Estate Investor Survey third quarter 2019 and CoStar and REIS submarket reports, vacancy and collection loss for the National Strip Shopping center and retail market ranges from 1.00% to 10.00%. Considering the current low vacancy in the submarket noted in our preceding market research section (^'3.1%), we have assumed a vacancy and collection loss of 3.00% across the Phase I and Phase II developments. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 102 Shutts & Bowen, LLP September 21, 2020 Management Fees According to PwC Real Estate Investor Survey first quarter 2019 management fees for the National Strip Shopping center market range from 1.50% to 6.00%, averaging 3.21%. We have assumed management fees of 3.00% for the Phase I and Phase II developments. Reserves for Replacement According to PwC Real Estate Investor Survey first quarter 2019 replacement reserves for the National Strip Shopping center market range from $0.10 to $0.75 per square foot, averaging $0.31 per square foot. We have assumed reserves for replacement of $0.31 per square foot for the Phase I and Phase II developments. Market Rent Growth As discussed in the market analysis section of this report we analyzed Miami Retail market and Miami Airport Retail submarket data. Additionally, we researched PwC Investor Survey and RERC data. Source Date Market Market Rent Growth - Retail Minimum Maximum Average CoStar CoStar CoStar CoStar RERC PwC PwC 2019 Overall Miami Retail Market 2019-2023 2019 Miami Neighborhood Center 2019-2023 2019 Overall Miami Airport Retail Submarket 2019-2023 2019 Miami Airport Neighborhood Center 2019-2023 2Q 2019 South Region Neigh/Comm 3Q 2019 National Strip Shopping Center Initial Year 3Q 2019 National Strip Shopping Center Forecast 0.00% 0.00% 3.00% 3.00% 1.25% 1.57% 1.80% 2.00% 2.20% 1.67% 2.35% Minimum Maximum Average 0.00% 3.00% 1.83% Based on the market data we assumed a retail market rent growth rate of 2.50% for the Phase I and Phase II developments. Leasing Commissions According to PwC Real Estate Investor Survey first quarter 2019 leasing commissions for the National Strip Shopping center market range from 2.00% to 8.00%, averaging 5.00% for new leases. We have assumed leasing commissions of 4.00% for the Phase I and Phase II developments. We have assumed an average lease term of 10 years for prospective tenants and therefore not assumed leasing commissions for lease renewals as our leases are assumed to run through the length of the holding period. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 103 Shutts & Bowen, LLP September 21, 2020 Tenant Improvements According to PwC Real Estate Investor Survey fourth quarter 2018 tenant improvements for the National Strip Shopping center market range from $10.00 to $150.00, averaging $41.43 per square foot for shell space. We have assumed tenant improvements $30.00 for the Phase I and Phase II developments. We have assumed an average lease term of 10 years for prospective tenants and therefore not assumed tenant improvements for renewals as our leases are assumed to run through the length of the holding period. Terminal Capitalization Rate We analyzed terminal capitalization rates for the national, regional, and local retail markets. Source Date Market Terminal Rates - Retail Minimum Maximum Average PwC RERC RERC RERC IRR Viewpoint IRR Viewpoint 3Q 2019 National Strip Shopping Center 2Q 2019 Flash Report National Neigh/Comm Retail 2Q 2019 South Region Neigh/Comm Retail First Tier 2Q 2019 Miami Neigh/Comm Retail First Tier 2019 Miami Community Retail Market: Class A 2019 Miami Neighborhood Retail Market: Class A 4.75% 6.00% 6.50% 10.00% 7.00% 8.50% 6.98% 6.40% 7.40% 6.80% 7.30% 7.30% Minimum Maximum Average 4.75% 10.00% 7.03% We note that in the Market Analysis section, we presented capitalization rates that included RealtyRates which does not publish terminal capitalization rates. Based on the market data we have assumed a terminal capitalization rate of 7.00% for the retail Phase I and Phase II. Discount Rate We analyzed discount rates for the national, regional, and local retail markets. Source Date Market Discount Rates - Retail Minimum Maximum Avera . e PwC RealtyRates Developer Survey RERC RERC IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint 3Q 2019 National Strip Shopping Center 3Q 2019 Florida/Caribbean Retail 2Q 2019 South Region Neigh/Comm Retail First Tier 2Q 2019 Miami Neigh/Comm Retail First Tier 2019 South Region Community Retail Market 2019 South Region Neighborhood Retail Market 2019 Miami Community Retail Market: Class A 2019 Miami Neighborhood Retail Market: Class A 5.50% 13.01% 7.00% 11.00% 28.03% 10.00% 7.81% 19.70% 8.40% 7.40% 8.31% 8.34% 7.90% 8.00% Minimum Maximum Average 5.50% 28.03% 10.54% This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 104 Shutts & Bowen, LLP September 21, 2020 Based on the market data we have assumed a discount rate of 10.50% for the retail Phase I and Phase II, which is greater than the established property discount rate but slightly less than the development rate above due to the mixed -use and specialty nature of the proposed development. Selling Costs According to PwC Real Estate Investor Survey third quarter 2019 selling expenses for the National Strip Shopping center market range from 0.50% to 6.00%. We have assumed selling costs of 1.00% for the Phase I and Phase II developments which also based on the size of the overall development. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 105 Shutts & Bowen, LLP September 21, 2020 Retail DCF Assumptions Retail - Discounted Cash Flow Assumptions Phase I Size Phase II Size Phase I Construction Start Date Phase I Construction End Date Phase II Construction Start Date Phase II Construction End Date Market Rent Vacancy and Collection Loss Management Fees Reserves for Replacement Market Rent Growth Rate Construction Growth Rate Pre -Leased ( % ) Remaining Lease Up / Absorption Leasing Commissions (New) Tenant Improvements (New) Terminal Capitalization Rate Discount Rate Selling Cost 300,000 Square Feet 300,000 Square Feet Year 2 Beginning of Year 2 Year 3 End of Year 3 Year 4 Beginning of Year 4 Year 5 End of Year 5 $35.00 Per Square Foot/NNN 3.00% Deducted from Potential Gross Income 3.00% As a percentage of Effective Gross Revenue $0.31 Percentage of Total Revenue after Stabilization 2.50% Annual Growth 2.50% Annual Growth 67% 25,000 Square Feet per Month 4.00% As a percentage of Market Rent $30.00 Per Square Foot 7. 00% 10.50% 1.00% This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 106 Shutts & Bowen, LLP September 21, 2020 Retail Cash Flows Retail (Phase I) Discounted Cash Flow Square Feet Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Assum. 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 10/31/2025 10/31/2026 10/31/2027 10/31/2028 10/31/2029 10/31/2030 10/31/2031 300,000 Construction Period Costs Construction Costs Holding Costs Total Costs Income $326.00 $21 097 $0 ($21 097) ($21,097) ($50,122,500) ($21 624) ($50,144,124) ($51,375,563) ($22 165) ($51,397,728) $0 ($1 578) ($1,578) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Starting Occupancy Months to Lease Up Ending Occupancy 0 0 0 N/A N/A N/A 0 0 0 200,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 4 N/A N/A N/A N/A N/A N/A N/A N/A 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 Market Rent $35.00 $0 $0 $0 $10,522,119 $11,590,035 Vacancy/Coll. Loss 3.00% $0 $0 $0 ($315,664) ($347,701) Eff. Gross Income $0 $0 $0 $10,206,455 $11,242,334 Op. Expenses: Management Fee 3.00% $0 $0 Total Op. Expenses $0 $0 Net Op. Income Leasing Costs and Reserves $11,879,786 ($356,394) $11,523,393 $12,175,781 ($365,303) $11,811,477 $12,481,200 ($374,436) $12,106,764 $12,793,230 ($383,797) $12,409,434 $13,113,051 ($393,392) $12,719,669 $13,440,888 ($403,227) $13,037,661 $13,776,910 ($413,307) $13,363,603 $0 ($306 194) ($337 270) ($345 702) ($354 344) ($363 203) ($372 283) ($381 590) ($391 130) ($400 908) $0 ($306,194) ($337,270) ($345,702) ($354,344) ($363,203) ($372,283) ($381,590) ($391,130) ($400,908) 90 $0 $0 $9,900,262 $10,905,064 $11,177,691 $11,457,133 $11,743,561 $12,037,151 $12,338,079 $12,646,531 $12,962,595 Repl. Reserves $0.31 $0 $0 $0 $0 ($102,655) ($105,221) ($107,851) ($110,548) ($113,311) ($116,144) ($119,048) 1 , 4 Lease Comm. 4.00% $0 $0 $0 ($3,618,353) $0 $0 $0 $0 $0 $0 $0 $0 TVs $30.00 $0 $0 $0 ($9,692,016) $0 $0 $0 $0 $0 $0 $0 $0 Total Leasing Costs and Reserves $0 $0 $0 ($13 310 368) ($102 655) ($105 221) ($107 851) ($110 548) ($113 311) ($116 144) ($119 048) ($122 024) Property Cash Flows $0 $0 $0 ($3 410 107) $10 802 410 $11 072 470 $11 349 282 $11 633 014 $11 923 839 $12 221 935 $12 527 483 $12 840 670 Reversion Value Terminal Cap. Rate Reversion Value Cost to Sale Adj. Reversion Value 7.00% 1.00% 7.00% $185,181,350 ($1 851 814) $183,329,537 Total Cash Flow Present Value Discount Rate PV Factor 10.50%/0 ($21,097) ($50,144,124) ($51,397,728) ($3,411,684) $10,802,410 $11,072,470 $11,349,282 $11,633,014 $11,923,839 $12,221,935 $195,857,020 0.905 0.819 0.741 0.671 0.607 0.549 0.497 0.450 0.407 0.368 0.333 Retail Ph. 1, PV of CF $6,557,061 $6,082,342 95641,992 $5,233,522 94,854,624 $4,503,158 965,306,151 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 107 Shutts & Bowen, LLP September 21, 2020 Retail (Phase II) Discounted Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Assum. 10/31/202.0 10/31/2021 10/31/2022 10/31/2023 10/31/2024 10/31/2025 10/31/2026 10/31/2027 10/31/2028 10/31/2029 10/31/2030 10/31/2031 3bOO Construction Period Costs Construction Costs Holding Costs Total Costs $326.00 $21,097 $0 ($21,097) ($21 097) $0 ($21,624) ($21 624) $0 ($52,659,952) ($53,976,450) ($22,165) ($22,719) ($23,287) ($22 165) ($52 682 671) ($53 999 738) $0 ($1,658) ($1 658) $0 $0 $0 $0 $o $0 $0 $o $0 $0 $0 $0 $0 $o $0 $0 $o $0 Income Starting Occupancy Months to Lease Up Ending Occupancy N/A 0 0 0 0 0 0 200,000 300,000 300,000 300,000 300,000 300,000 300,000 N/A N/A N/A N/A 4 N/A N/A N/A N/A N/A N/A 0 0 0 0 300,000 300,000 300,000 300,000 300,000 300,000 300,000 Market Rent $35.00 $0 $0 $0 Vacancy/Coll. Loss 3.00% $0 $0 $0 Eff. Gross Income $0 $0 $0 Op. Expenses: Management Fee 3.00 % $0 $0 $0 Total Op. Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $11,054,801 ($331,644) $10,723,157 $12,176,781 ($365,303) $11,811,477 $12,481,200 ($374,436) $12,106,764 $12,793,230 ($383,797) $12,409,434 $13,113,061 ($393,392) $12,719,669 $13,440,888 ($403,227) $13,037,661 $13,776,910 ($413,307) $13,363,603 $0 ($321,695) ($354,344) ($363,203) ($372,283) ($381,590) ($391,130) ($400,908) $0 ($321 695) ($354 344) ($363 203) ($372 283) ($381 590) ($391 130) ($400 908) Net Op. Income $0 $0 $0 $0 $0 $10 401 462 $11 457 133 $11 743 561 $12 037 151 $12 338 079 $12 646 531 $12 962 695 Leasing Costs and Reserves Repl. Reserves $0.31 $0 $0 $0 $0 $0 $0 ($107,851) ($110,548) ($113,311) 11 , 44 11 4($122,024) Lease Comm. 4.00^/0 $0 $0 $0 $0 $0 ($2,851,149) $0 $0 $0 $0 $0 $0 TIis $30.00 $0 $0 $0 $0 $0 ($10 182 674) $0 $0 $0 $0 $0 $0 Total Leasing Costs and Reserves $0 $0 $0 $0 $0 ($13,033,823) ($107,851) ($110,548) ($113,311) ($116,144) ($119,048) ($122,024) Property Cash Flows $0 $0 $0 $0 $0 ($2 632 360) $11 349 282 $11 633 014 $11 923 839 $12 221 935 $12 527 483 $12 840 670 Reversion Value Terminal Cap. Rate Reversion Value Cost to Sale Adj. Reversion Value 7.00% 1.00% 7.00% $185,181,350 ($1,851,814) $183,329,537 Total Cash Flow ($21,097) ($21,624) ($22,165) ($52,682,671) ($53,999,738) ($2,634,018) $11,349,282 $11,633,014 $11,923,839 $12,221,935 $195,857,020 Present Value Discount Rate PV Factor 10.50% 0.905 0.819 0.741 0.671 0.607 0.549 0.497 0.450 0.407 0.368 0.333 Retail Ph. II, PV of CF '.:-,.?''.:.:.. _. ' ' • ,641,992 $5,233,522 $4,854,624 $4,503,158 $65,306,151 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 108 Shutts & Bowen, LLP September 21, 2020 Tech -Hub DCF Property Analysis Based on the client provided proposed development information, we assumed two construction phases for the tech -hub development with 200,000 square feet constructed in Phase I and 200,000 square feet constructed in Phase II. Phase I tech -hub construction occurs over Years 2 and 3, Phase II tech -hub construction occurs over Years 4 and 5. Total construction for the tech -hub development is assumed to take place over four construction periods. We have assumed that each phase will be 67% pre -leased upon completion (as the developer will have sufficient time to market the property due to the long planning and construction period) with the remaining space being absorbed 16,667 square feet per month thereafter. Further, as per the Client provided development information, we assumed 1,280 parking spaces for tech -hub with 640 spaces for each respective phase. We assumed a lease up of the parking to be in line with the tenant space for tech -hub. Market Rent As discussed in the market analysis section of this report we conducted a tech -hub rent analysis. Based on the analysis we assumed a tech -hub rent of $25.50 per square foot for the Phase I and Phase II developments. Parking Rent We analyzed recent office sales in the Miami market for monthly rents of covered parking spaces. We sourced eight office transactions with monthly parking rents ranging from $90.00 to $200.00 per space, averaging $132.00 per space. The closest transaction to the Subject had parking rents ranging from $90.00 per space for non -reserved spaces to $150.00 per space for reserved spaces. In addition, the Subject will benefit from its position adjacent to the Miami International Airport. Based on the market data we assumed a monthly parking space rent of $100.00 per space or $1,200 per year. Vacancy and Collection Loss According to PwC Real Estate Investor Survey third quarter 2019 and the REIS and CoStar office submarket reports vacancy and collection loss for the Southeast Florida office market ranges from 3.00% to 13.00%. We have assumed a vacancy and collection loss of 4.00% across the Phase I and Phase II developments. Management Fees According to PwC Real Estate Investor Survey first quarter 2019 management fees for the Southeast Florida office market range from 2.50% to 3.00%, averaging 2.81%. We have assumed management fees of 3.00% for the Phase I and Phase II developments. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 109 Shutts & Bowen, LLP September 21, 2020 Reserves for Replacement According to PwC Real Estate Investor Survey first quarter 2019 replacement reserves for the Southeast Florida office market range from $0.10 to $1.00 per square foot, averaging $0.38 per square foot. We have assumed reserves for replacement of $0.38 per square foot for the Phase I and Phase 11 developments. Market Rent Growth As discussed in the market analysis section of this report we analyzed Miami Office market and Miami Airport Office submarket data. Additionally, we researched PwC Investor Survey and RERC data. Source Date Market Market Rent Growth - Tech Hub Minimum Maximum Average CoStar CoStar CoStar CoStar RERC PwC PwC 2019 2019 2019 2019 2Q 2019 3Q 2019 3Q 2019 Overall Miami Office Market 2019-2023 Miami 4 & 5 Star Office 2019-2023 Overall Miami Airport Office Submarket 2019-2023 Miami Airport 4 & 5 Star Office 2019-2023 South Region Suburban Office Southeast Florida Office Initial Year Southeast Florida Forecast 0.00% 0.00% 5.00% 5.00% 1.27% 1.15% 1.47% 1.65% 1.90% 2.60% 2.63% Minimum Maximum Average 0.00% 5.00% 1.81% Based on the market data we assumed a tech -hub market rent growth rate of 3.00% for the Phase I and Phase II developments. Leasing Commissions According to PwC Real Estate Investor Survey first quarter 2019 leasing commissions for the Southeast Florida office market range from 4.00% to 7.00%, averaging 5.88% for new leases. We have assumed leasing commissions of 5.00% for the Phase I and Phase II developments. We have assumed an average lease term of ten years for the prospective tech hub tenants and therefore have not assumed leasing commissions for lease renewals as our leases are assumed to run through the length of the holding period. Tenant Improvements According to PwC Real Estate Investor Survey fourth quarter 2018 tenant improvements for the Southeast Florida office market range from $5.00 to $75.00, averaging $40.63 per square foot for shell space. We have assumed tenant improvements $25.00 for the Phase I and Phase II developments. We have assumed an average lease term of ten years for the prospective tech hub tenants and therefore have not assumed tenant improvements for renewals as our leases are assumed to run through the length of the holding period. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 110 Shutts & Bowen, LLP September 21, 2020 Terminal Capitalization Rate We analyzed terminal capitalization rates for the national, regional, and local office markets. Source Date Market Terminal Rates - Tech Hub Minimum Maximum Average PwC PwC PwC RERC RERC RERC RERC IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint 3Q 2019 3Q 2019 3Q 2019 2Q 2019 2Q 2019 2Q 2019 2Q 2019 2019 2019 2019 2019 National CBD Office National Suburban Office Southeast Florida Office Market Miami CBD Office First Tier Miami SUB Office First Tier South Region CBD Office First Tier South Region SUB Office First Tier Miami Office Market: CBD Class A Miami Office Market: SUB Class A Miami Office Market: CBD Class B Miami Office Market: SUB Class B 5.00% 5.25% 4.50% 5.70% 6.50% 7.50% 9.25% 10.50% 8.30% 9.00% 5.91% 6.28% 7.32% 7.40% 8.20% 7.00% 7.60% 5.50% 6.75% 6.50% 7.00% Minimum Maximum Average 4.50% 10.50% 6.86% We note that in the Market Analysis section, we presented capitalization rates that included RealtyRates which does not publish terminal capitalization rates. Based on the market data we have assumed a terminal capitalization rate of 6.50% for the tech -hub Phase I and Phase II. Discount Rate We analyzed discount rates for the national, regional, and local office markets. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 111 Shutts & Bowen, LLP September 21, 2020 Source Date Discount Rates - Office Market Minimum Maximum Average PwC PwC PwC RealtyRates Developer Survey RealtyRates Developer Survey RERC RERC RERC RERC RERC RERC IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint IRR Viewpoint 3Q 2019 3Q 2019 3Q 2019 3Q 2019 3Q 2019 2Q 2019 2Q 2019 2Q 2019 2Q 2019 2Q 2019 2Q 2019 2019 2019 2019 2019 2019 2019 2019 2019 National CBD Office National Suburban Office Southeast Florida Office Market Florida/Caribbean Urban Office Florida/Caribbean Suburban Office Flash Report National CBD Office Flash Report National SUB Office South Region CBD Office First Tier South Region SUB Office First Tier Miami CBD Office First Tier Miami SUB Office First Tier South Region Office Market: CBD Class A South Region Office Market: CBD Class B South Region Office Market: SUB Class A South Region Office Market: SUB Class B Miami Office Market: CBD Class A Miami Office Market: SUB Class A Miami Office Market: CBD Class B Miami Office Market: SUB Class B 5.25% 6.00% 6.00% 13.24% 12.03% 6.50% 7.00% 7.00% 7.30% 10.00% 11.00% 11.00% 24.80% 24.47% 8.00% 8.50% 10.00% 10.00% 6.86% 7.63% 8.34% 18.64% 17.52% 7.30% 7.90% 8.10% 8.50% 7.40% 8.20% 8.02% 8.92% 8.40% 9.12% 7.10% 7.70% 8.10% 8.10% Minimum Maximum Average 5.25% 24.80% 9.04% Based on the market data we have assumed a discount rate of 10.25% for the tech -hub Phase I and Phase II, which is greater than the established property discount rate but slightly less than the development rate above due to the mixed -use and specialty nature of the proposed development. Selling Costs According to PwC Real Estate Investor Survey third quarter 2019 selling expenses for the Southeast Florida office market range from 1.00% to 3.00%. We have assumed selling costs of 1.00% for the Phase I and Phase II developments which also based on the size of the overall development. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 112 Shutts & Bowen, LLP September 21, 2020 Tech -Hub DCF Assumptions Tech -Hub - Discounted Cash Flow Assumptions Phase I Size Phase II Size Parking Phase I Parking Phase II 200,000 Square Feet 200,000 640 Spaces 640 Spaces Phase I Construction Start Date Year 2 Beginning of Year 2 Phase I Construction End Date Year 3 End of Year 3 Phase II Construction Start Date Year 4 Beginning of Year 4 Phase II Construction End Date Year 5 End of Year 5 Market Rent $25.50 Per Square Foot/NNN Parking Rent $1,200 Per Space Per Year Vacancy and Collection Loss 4.00% Deducted from Potential Gross Income Management Fees 3.00% As a percentage of Effective Gross Revenue Reserves for Replacement $0.38 Percentage of Total Revenue after Stabilization Market Rent Growth Rate 3.00% Annual Growth Construction Growth 2.50% Annual Growth Pre -Leased ( % ) 67% Remaining Lease Up / Absorption 16,667 Square Feet per Month Leasing Commissions (New) Tenant Improvements (New) Terminal Capitalization Rate Discount Rate Selling Cost 5.00% As a percentage of Market Rent $25.00 Per Square Foot 6.50% 10.25% 1.00% This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 113 Shutts & Bowen, LLP September 21, 2020 Tech -Hub Cash Flows Tech -Hub (Phase I) Discounted Cash Flow Square Feet Parking Spaces Assum. 200,000 640 Year Year Year Year4 Year5 Year6 Year? Year Year9 Vear10 Year11 Vear12 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 10/31/2025 10/31/2026 10/31/2027 10/31/2028 10/31/2029 10/31/2030 10/31/2031 Construction Period Costs Construction Costs Parking Construction Costs Holding Costs Total Costs $294.00 $16,800 $6,565 $0 $0 ($6,565) ($6,565) ($30,135,000) ($5,510,400) ($6,729) ($35,652,129) ($30,888,375) ($5,648,160) ($6,898) ($36,543,433) 50 50 ($45- ($491) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Starting Occupancy Months to Lease Up Ending Occupancy 0 0 0 N/A N/A N/A 0 0 0 133,333 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 4 N/A N/A N/A N/A N/A N/A N/A N/A 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Market Rent $25.50 $0 $0 $0 $5,185,900 Parking Income $1,200 $0 $0 $0 $780,936 Vacancy/Coll. Loss 4.00% $0 $0 $0 ($207,436) Eff. Gross Income $0 $0 $0 $5,759,400 Op. Expenses: Management Fee 3.00% $0 $0 Total Op. Expenses $0 $0 Net Op. Income Leasing Costs and Reserves $5,740,095 $864,391 ($229,604) $6,374,882 $5,912,298 $890,322 ($236,492) $6,566,128 $6,089,667 $917,032 ($243,587) $6,763,112 $6,272,357 $944,543 ($250,894) $6,966,006 $6,460,527 $972,879 ($258,421) $7,174,986 $6,654,343 $1,002,066 ($266,174) $7,390,235 $6,853,974 $1,032,128 ($274,159) $7,611,942 $7,059,593 $1,063,092 ($282,384) $7,840,301 $0 ($172,782) ($191,246) ($196,984) ($202,893) ($208,980) ($215,250) ($221,707) ($228,358) ($235,209) $0 ($172,782) ($191,246) ($196,984) ($202,893) ($208,980) ($215,250) ($221,707) ($228,358) ($235,209) $0 $0 $0 $5,586,618 $6,183,635 $6,369,145 $6,560,219 $6,757,025 $6,959,736 $7,168,528 $7,383,584 $7,605,092 Repl. Reserves $0.38 $0 $0 $0 $0 ($83,890) ($85,987) ($ ,1 7) ( 4 14($99,719) Lease Comm. 5.00% $0 $0 $0 ($2,229,163) $0 $0 $0 $0 $0 $0 $0 $0 TVs $25.00 $0 $0 $0 ($5 384 453) $0 $0 $0 $0 $0 $0 $0 $0 Total Leasing Costs and Reserves $0 $0 $0 ($7,613,616) ($83,890) ($85,987) ($88,137) ($90,340) ($92,599) ($94,914) ($97,286) ($99,719) Property Cash Flow $0 $0 $0 ($2,026,998) $6,099,746 $6,283,157 $6,472,082 $6,666,685 $6,867,138 $7,073,615 $7,286,298 $7,505,373 Reversion Value Terminal Cap. Rate Reversion Value Cost to Sale Adj. Reversion Value 6.50 1.00% $115,831,396 6.50% $117,001,410 ($1 170 014) Total Cash Flow ($6,565) ($35,652,129) ($36,543,433) ($2,027,489) $6,099,746 $6,283,157 $6,472,082 $6,666,685 $6,867,138 $7,073,615 $123,117,693 Discount Rate PV Factor 10.25% 0.907 0.823 0.746 0.677 0.614 0.557 0.505 0.458 0.416 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 0.377 0.342 114 Shutts & Bowen, LLP September 21, 2020 Tech -Hub (Phase II) Discounted Cash Flow Parking Spaces Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Assum. 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 10/31/2025 10/31/2026 10/31/2027 10/31/2028 10/31/2029 10/31/2030 10/31/2031 Construction Period Costs Construction Costs Parking Construction Costs Holding Costs Total Costs $294.00 50 50 $0 ($31,660,584) ($32,452,099) $16,800 50 s0 $0 ($5,789,364) ($5,934,098) $6,565 (56,565) (56,729) ($6,898) ($7,070) ($7,247) ($6,565) ($6,729) (S6,898) (S37,457,019) (S38,393,444) $0 $0 ($516) ($516) $0 $0 $0 $0 50 s0 $0 $0 50 S0 $0 $0 so 50 $0 $0 so 50 so s0 so 50 so 50 rffig OEcupancy Months to Lease Up Ending Occupancy 0 0 0 0 0 133,333 200,000 200,000 200,000 200,000 N/A N/A N/A N/A N/A 4 N/A N/A N/A N/A N/A N/A 0 0 0 0 0 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Market Rent $25.50 $0 Parking Income $1,200 $0 Vacancy/Coll. Loss 4.00% $0 Eff. Gross Income $0 Op. Expenses: Management Fee Total Op. Expenses Net Op. Income 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 $5,501,722 $6,089,667 96,272,357 $6,460,527 $6,654,343 $6,853,974 $7,059,593 $0 $828,495 $917,032 $944,543 $972,879 $1,002,066 $1,032,128 $1,063,092 90 ($220,069) ($243,587) ($250,894) ($258,421) ($266,174) ($274,159) ($282,384) $0 $6,110,147 $6,763,112 $6,966,006 $7,174,986 $7,390,235 $7,611,942 $7,840,301 3.00 % $0 $0 $0 $0 $0 ($183,304) ($202,893) ($208,980) ($215,250) ($221,707) ($228,358) ($235,209) $0 $0 $0 $0 $0 ($183 304) ($202 893) ($208 980) ($215 250) ($221 707) ($228 358) ($235 209) $0 $0 $0 $0 $0 $5,926,843 $6,560,219 $6,757,025 $6,959,736 $7,168,528 $7,383,584 $7,605,092 Leasing Costs and Reserves Repl. Reserves $0.38 $0 $0 $0 $0 $0 $0 ($88,137) ($90,340 4, 14 7,($99,719) Lease Comm. 5.00%/0 $0 $0 $0 $0 $0 ($1,773,689) $0 $0 $0 $0 $0 $0 TI's $25.00 $0 $0 $0 $0 $0 ($5,657,041) $0 $0 $0 $0 $0 $0 Total Leasing Costs and Reserves $0 $0 $0 $0 $0 ($7 430 730) ($88 137) ($90 340) ($92 599) ($94 914) ($97 286) ($99 719) Property Cash Flow 90 $0 $0 $0 $0 ($1,503,888) $6,472,082 $6,666,685 $6,867,138 $7,073,615 $7,286,298 $7,505,373 Reversion Value Terminal Cap. Rate Reversion Value Cost to Sale Adj. Reversion Value 6.50% 1.00% $115,831,396 6.50% $117,001,410 ($1,170,014) Total Cash Flow ($6,565) ($6,729) ($6,898) ($37,457,019) ($38,393,444) ($1,504,403) $6,472,082 $6,666,685 $6,867,138 $7,073,615 $123,117,693 Discount Rate PV Factor 10.25% 0.907 0.823 0.746 0.677 0.614 0.557 0.505 0.458 0.416 0.377 0.342 Tech Hub, PV of CF 2,853,437 $2,665,971 942,087768 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 115 Shutts & Bowen, LLP September 21, 2020 Hotel DCF Property Analysis Based on the client provided proposed development information, we assumed one construction phase for the full -service hotel and one construction phase for the limited service hotel. Construction occurs for both hotels over Years 2 and 3. We assumed a 65.00% occupancy in Year 4 building up to a stabilized occupancy in Year 5 for both hotels, based on occupied room nights. Further, as per the Client provided proposed development information, we assumed 480 parking spaces for the full -service hotel and 140 parking spaces for the limited service hotel. We assumed a lease up for parking spaces in line with the occupied room nights for both hotels. Average Daily Rate ("ADR") As discussed in the market analysis section of this report we researched ADRs across national and regional markets for full and limited service hotels. Additionally, we analyzed ADRs from property STR reports from the Subject's submarket. Based on our market analysis we assumed an ADR of $200.00 for the full -service hotel and an ADR of $155.00 for the limited service hotel. The proposed offerings would be much newer than competitors in the marketplace (mostly built in the 197O's and 198O's) and would greatly benefit from the proximity to the airport, mixed -used nature of the greater development and anchor draw from the proposed stadium with a number of large draw events. Parking Rent We have assumed a monthly parking space rent of $100.00 per space or $1,200 per year, as discussed in the tech -hub DCF Property Analysis section. ADR Growth According to PwC Real Estate Investor Survey third quarter 2019 ADR growth for the National Full -Service Lodging market ranges from 0.00% to 3.50%, averaging 2.00%. ADR growth for the National Limited Service Lodging market ranges from 0.00% to 4.00%, averaging 2.00%. According to CBRE, the Miami hotel market has averaged 4.00% growth in ADR over the ten-year historical period since 200923. We have assumed an ADR growth rate of 3.50% for the full service and limited service hotels. Management Fees According to PwC Real Estate Investor Survey third quarter 2019, management fees for the National Full -Service Lodging market range from 1.00% to 4.00%, averaging 2.60%. Management fees for the National Limited Service Lodging market range from 2.00% to 5.00%, averaging 23 Source: Miami Lodging Market Overview, CBRE; September 2019. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 116 Shutts & Bowen, LLP September 21, 2020 3.50%. Based on the market data and our prior experience, we have assumed management fees of 3.00% for the full -service hotel and the limited service hotel. Reserves for Replacement According to PwC Real Estate Investor Survey third quarter 2019, reserves for replacement for the National Full -Service Lodging market range from 2.50% to 5.00%, averaging 4.10%. Reserves for replacement for the National Limited Service Lodging market range from 3.00% to 6.00%, averaging 4.40%. Based on the market data and our prior experience, we have assumed reserves for replacement of 4.00% for the full -service hotel and the limited service hotel. Revenue per Occupied Room ("RevPOR") As discussed in the market analysis section, we analyzed data from the 2019 Host Almanac for Food and Beverage and Other revenue per occupied room for full and limited service hotels throughout the U.S. and South Atlantic Region. Food and Beverage RevPOR is inclusive of food, beverage, and other food and beverage revenue. Other revenue RevPOR is inclusive of other operated departments and miscellaneous income. For the full -service hotel, we assumed a RevPOR of $98.00 for Food & Beverage and a RevPOR of $29.50 for Other. For the limited service hotel, we assumed a RevPOR of $8.6 for Other. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 117 Shutts & Bowen, LLP September 21, 2020 Departmental Expenses as Ratio to Sales We researched departmental expenses as a ratio to sales from the 2019 Host Almanac through the U.S. and South Atlantic Region for full and limited service hotels. F&B Expenses - Departmental Full Service Sample RTS Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location 71.60% 71.00% 75.80% 66.70% 69.60% 66.60% Average 70.22% Other Expenses - Departmental Full Service Sample RTS Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location 76.80% 79.30% 65.90% 77.20% 64.70% 54.80% Average 69.78% Room Expenses - Departmental Full Service Sample RTS Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location 26.60% 23.60% 29.50% 29.40% 24.90% 27.00% Average 26.83% We have assumed a ratio to sales departmental expense of 70.00%, 70.00%, and 26.00% for Food & Beverage, Other, and Room expenses respectively, for the full -service hotel. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 118 Shutts & Bowen, LLP September 21, 2020 Other Expenses - Departmental Limited Service Sample RTS Limited Service Total Limited Service Chain Limited Service Independent Limited Service South Atlantic Region Limited Service Suburban Location Limited Service Airport Location 63.60% 60.60% 98.20% 58.90% 59.50% 63.10% Average 67.32% Room Expenses - Departmental Limited Service Sample RTS Limited Service Total Limited Service Chain Limited Service Independent Limited Service South Atlantic Region Limited Service Suburban Location Limited Service Airport Location 25.00% 24.10 % 35.20% 23.60% 23.10% 24.70% Average 25.95% We have assumed a ratio to sales departmental expense of 61.00% and 24.00% for Other and Room expenses respectively, for the limited service hotel. Undistributed Expenses as Ratio to Sales We researched undistributed expenses as a ratio to sales from the 2019 Host Almanac through the U.S. and South Atlantic Region for full and limited service hotels. Administrative - Undistributed Full Service Sample RTS Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location 7.00% 7.60% 9.00% 7.80% 8.10% 7.80% Average 7.88% This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 119 Shutts & Bowen, LLP September 21, 2020 Marketing - Undistributed Full Service Sample RTS Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location 6. 80% 6. 90% 6. 20% 7.00% 7.10% 7.10% Average 6.85% Utility - Undistributed Full Service Sample RTS Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location 2. 90% 2.90% 3. 00% 3. 00% 3.20% 2.90% Average 2.98% R&M - Undistributed Full Service Sample RTS Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location 4. 20% 4.10% 4.60% 4.20% 4. 30% 4.10% Average 4.25% We have assumed a ratio to sales undistributed expense of 7.50%, 7.00%, 3.00% and 4.00% for Administrative, Marketing, Utility, and Repairs & Maintenance expenses respectively, for the full -service hotel. Administrative - Undistributed Limited Service Sample RTS Limited Service Total Limited Service Chain Limited Service Independent Limited Service South Atlantic Region Limited Service Suburban Location Limited Service Airport Location 8.40% 8.30% 8. 80% 8.50% 8. 70% 8. 70% Average 8.57% This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 120 Shutts & Bowen, LLP September 21, 2020 Marketing - Undistributed Limited Service Sample RTS Limited Service Total Limited Service Chain Limited Service Independent Limited Service South Atlantic Region Limited Service Suburban Location Limited Service Airport Location 5. 20% 5.30% 4. 80% 5. 40% 5.30% 5. 20% Average 5.20% Utility - Undistributed Limited Service Sam • le RTS Limited Service Total Limited Service Chain Limited Service Independent Limited Service South Atlantic Region Limited Service Suburban Location Limited Service Airport Location 3.60% 3.70% 3.30% 3.80% 4.10% 3.70% Average 3.70% R&M - Undistributed Limited Service Sample RTS Limited Service Total Limited Service Chain Limited Service Independent Limited Service South Atlantic Region Limited Service Suburban Location Limited Service Airport Location 4. 60% 4.50% 4. 90% 4.90% 5.00% 4. 70% Average 4.77% We have assumed a ratio to sales undistributed expense of 8.50%, 5.00%, 4.00% and 5.00% for Administrative, Marketing, Utility, and Repairs & Maintenance expenses respectively, for the limited service hotel. Fixed Costs per Occupied Room We researched fixed costs per occupied room from the 2019 Host Almanac through the U.S. and South Atlantic Region for full and limited service hotels. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 121 Shutts & Bowen, LLP September 21, 2020 Insurance - Fixed Full Service Sample Per occupied room Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location $2.99 $2.83 $4.78 $3.74 $2.08 $1.72 Average $3.02 We have considered the construction costs (as a proxy) and the current millage rate to estimate the real estate taxes upon completion. We have assumed a fixed cost per occupied room of $23.00 and $3.00 for Real Estate Tax and Insurance respectively, for the full -service hotel. Insurance - Fixed Limited Service Sample Per occupied room Full Service Total Full Service Chain Full Service Independent Full Service South Atlantic Region Full Service Suburban Location Full Service Airport Location $1.34 $1.29 $2.11 $1.46 $1.18 $1.22 Average $1.43 We have considered the construction costs (as a proxy) and the current millage rate to estimate the real estate taxes upon completion. We have assumed a fixed cost per occupied room of $11.00 and $1.50 for Real Estate Tax and Insurance respectively, for the limited service hotel. Terminal Capitalization Rate We analyzed terminal capitalization rates for the national, regional, and local hotel markets. Source Date Market Terminal Rates - Hotel Minimum Maximum Average PwC PwC RERC RERC Minimum Maximum Average 3Q 2019 3Q 2019 2Q 2019 2Q 2019 National Full Service Lodging National Limited Service South Region Hotel First Tier Miami Hotel First Tier 7.00% 7.75% 7.50% 10.00% 12.00% 9.30% 8.25% 9.48% 8.50% 8.20% 7.00% 12.00% 8.61% This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 122 Shutts & Bowen, LLP September 21, 2020 Based on the market data we have assumed a terminal capitalization rate of 7.75% and 8.25% for full service and limited service hotels respectively. Discount Rate We analyzed discount rates for the national, regional, and local hotel markets. Source Date Market Discount Rates - Hotel Minimum Maximum Average PwC PwC RealtyRates Developer Survey RERC RERC 3Q 2019 3Q 2019 3Q 2019 2Q 2019 20 2019 National Full Service Lodging National Limited Service Florida/Caribbean Commercial/Industrial South Region Hotel First Tier Miami Hotel First Tier 8.00% 8.00% 11.85% 7.50% 11.00% 14.00% 28.03% 10.50% 9.90% 10.55% 18.42% 9.10% 8.40% Minimum Maximum Average 7.50% 28.03% 11.27% Based on the market data we have assumed a discount rate of 11.50% for the full service and limited service hotels, which is greater than the established property discount rate but slightly less than the development rate above due to the mixed -use and specialty nature of the proposed development. Selling Costs According to PwC Real Estate Investor Survey third quarter 2019 selling expenses for the National Full -Service Hotel market range from 1.00% to 3.50%. Selling expenses for the National Limited Service Hotel market range from 1.00% to 4.00%. We have assumed selling costs of 1.00% for the full service and limited service hotels which also based on the size of the overall development. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 123 Shutts & Bowen, LLP September 21, 2020 Hotel — Full Service DCF Assumptions Hotel - Full Service - Discounted Cash Flow Assumptions Hotel Full Service Hotel Parking Days open Available Room Nights Occupied Room Nights 169,500 Square Feet 500 Rooms 480 365 Room Nights per Year 182,500 500 rooms*365 days 164,250 90% of 182,500 Post Construction Year 3 First Year of occupancy 65% Stabilized 90% Years to Stabilize 1 Lease Up 9,125 Room Nights Parking Lease Up 27 Spaces per Month Construction Start Date Year 2 Beginning of Year 2 Construction End Date Year 3 End of Year 3 Hotel Full Service Parking Rent Construction Growth ADR Growth Rate F&B Other Room Expense F&B Expense Other Expense Admin Marketing Utility R&M Real Estate Tax Insurance $200.00 $1, 200 2 50% 3 50% $98.00 $29.50 26 00% 70 00% 70 00% 7 50% 7 00% 3 00% 4 00% Average Daily Rate Per Space Per Year Annual Growth Annual Growth Revenue per occupied room Revenue per occupied room Ratio to Sales Ratio to Sales Ratio to Sales Ratio to Sales Ratio to Sales Ratio to Sales Ratio to Sales $23.00 Per Occupied Room after Stabilization $3.00 Per Occupied Room Management Fee 3 00% As a percentage of Gross Operating Profit Reserves for Replacement 4 00% Percentage of Total Revenue after Stabilization Terminal Capitalization Rate 7.75% Discount Rate 11 50% Selling Cost 1 00% This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 124 Shutts & Bowen, LLP September 21, 2020 Hotel — Full -Service Cash Flows Hotel - Full Service Discounted Cash Flow Assum. Year 1 Yea 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 10/31/2025 10/31/2026 10/31/2027 10/31/2028 10/31/2029 Year 11 Year 12 10/31/2030 10/31/2031 Total Room Nigh Stabilized Occup. Stabilized Occuparr Rooms Parkin• S•aces ,500 64,250 90% 500 480 Construction Period Costs Construction Costs Parking Construction Costs Holding Costs Total Costs Income $354,000 $0 ($90,712,500) ($92,980,313) $16,800 $0 ($4,132,800) ($4,236,120) $11 528 ($11 528) ($11 816) ($12 111) ($11,528) ($94,857,116) ($97,228,544) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Occupancy Occupied Room Nights 0% 0% 0 0 or 0 65% 90% 90% 90% 90% 90% 90% 90% 90% 119,625 164,250 164,250 164,250 164,250 164,250 16 4, 250 164,250 164,250 Parking Income $1,200 $0 $0 $0 $461,227 $660,973 Room Revenue (ADR) $200.00 $0 $0 $0 $26,304,332 $37,696,131 F&8 Dept. Revenue $98.00 $0 $0 $0 $12,889,122 $18,471,104 Other Dept. Revenue $29.50 $0 $0 $0 $3,879,889 $5,560,179 Eff. Gross Income $0 $0 Departmental Expenses $684,107 $39,015,495 $19,117,593 $5,754,786 $708,051 $40,381,037 $19,786,708 $5,956,203 $732,833 $41,794,374 $20,479,243 $6,164,670 $758,482 $43,257,177 $21,196,017 $6,380,434 $785,029 $44,771,178 $21,937,877 $6,603,749 $812,505 $46,338,169 $22,705,703 $6,834,880 $840,943 $47,960,005 $23,500,403 $7,074,101 $0 $43,534,570 $62,388,387 $64,571,981 $66,832,000 $69,171,120 $71,592,109 $74,097,833 $76,691,257 $79,375,451 Room Expense 26.00^/n $0 $0 $0 ($6,839,126) ($9,800,994) ($10,144,029) ($10,499,070) ($10,866,537) ($11,246,866) ($11,640,506) ($12,047,924) ($12,469,601) F&e Expense 70.00%/n $0 $0 $0 ($9,022,386) ($12,929,773) ($13,382,315) ($13,850,696) ($14,335,470) ($14,837,212) ($15,356,514) ($15,893,992) ($16,450,282) Other Expense 70.00% $0 $0 $0 ($2,715,922) ($3,892,125) ($4,028,350) ($4,169,342) (54,315,269) ($4,466,304) ($4,622,624) ($4,784,416) ($4,951,871) Total Departmental Expenses $0 $0 $0 ($18 577 434) ($26 622 892) ($27 554 693) ($28 519 108) ($29 517 276) ($30 550 381) ($31 619 645) ($32 726 332) ($33 871 754) Undistributed Expenses Adminstrative 7.50% $0 $0 $0 ($3,265,093) ($4,679,129) ($4,842,899) ($5,012,400) ($5,187,834) ($5,369,408) ($5,557,337) ($5,751,844) ($5,953,159) Sales and Marketing 7.00 % $0 $0 $0 ($3,047,420) ($4,367,187) ($4,520,039) ($4,678,240) ($4,841,978) ($5,011,448) ($5,186,848) ($5,368,388) ($5,556,282) Utility 3.00% $0 $0 $0 ($1,306,037) ($1,871,652) ($1,937,159) ($2,004,960) ($2,075,134) ($2,147,763) ($2,222,935) ($2,300,738) ($2,381,264) R&M 4.00% $0 $0 $0 ($1,741,383) ($2,495,535) ($2,582,879) ($2,673,280) ($2,766,845) ($2,863,684) ($2,963,913) ($3,067,650) ($3,175,018) Total Undistributed Expenses $0 $0 $0 ($9 359 932) ($13 413 503) ($13 882 976) ($14 368 880) ($14 871 791) ($15 392 303) ($15 931 034) ($16 488 620) ($17 065 722) Gross Operating Profit $0 $0 $0 $15 597 203 $22 351 992 $23 134 311 $23 944 012 $24 782 053 $25 649 424 $26 547 154 $27 476 305 $28 437 975 Management Fees 3.00% $0 $0 $0 ($467,916) ($670,560) ($694,029) ($718,320) ($743,462) ($769,483) ($796,415) ($824,289) ($853,139) Insurance $3.00 $0 $0 $0 ($383,238) ($543,904) ($557,501) (5571,439) ($585,725) ($600,368) ($615,377) ($630,762) ($646,531) Real Estate Tax $23.00 $0 $0 $0 ($1 885 000) ($3 770 000) ($3 770 000) ($3 770 000) ($3 770 000) ($3 770 000) ($3 770 000) ($3 770 000) ($3 770 000) Total Insurance / RE Tax / Mgmt Fees $0 $0 $0 ($2,736,155) ($4,984,464) ($5,021,531) (55,059,759) ($5,099,186) (55,139,851) ($5,181,792) (55,225,051) ($5,269,670) Net Op. Income Reserves Replacement Reserves Total Reserves Property Cash Flows Reversion Value Terminal Cap. Rate Reversion Value Cost to Sale Adj. Reversion Value $0 $0 $0 $12,861,048 $17,367,528 $18,112,781 $18,884,253 $19,682,866 $20,509,574 $21,365,362 $22,251,254 $23,168,305 4.00% $0 $0 $0 $0 ($2,495,535) ($2,582,879) ($2,673,280) ($2,766,845) ($2,863,684) ($2,963,913) ($3,067,650) ($3,175,018) $0 $0 $0 $0 ($2,495,535) ($2,582,879) ($2,673,280) ($2,766,845) ($2,863,684) ($2,963,913) ($3,067,650) ($3,175,018) $0 $0 $0 $12 861 048 $14 871 993 $15 529 901 $16 210 973 $16 916 021 $17 645 889 $18 401 449 $19 183 604 $19 993 287 7.75% 1.00% $295,956,418 7.75% $298,945,877 ($2,989,459) Total Cash Flow Present Value Dl scount Rate PV Factor 11.50% ($11,528) ($94,857,116) ($97,228,544) $12,861,048 $14,871,993 $15,529,901 $16,210,973 $16,916,021 $17,645,889 $18,401,449 $315,140,022 0.897 0.804 0.721 0.647 0.580 0.520 0.467 0.419 0.375 0.337 0.302 /vice, PV of CF $10,339 $76,299,235 t-;.:.. $8,321, • . $8,0 ' _ - 6 $6,6 - $6,19' This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 125 Shutts & Bowen, LLP September 21, 2020 Hotel - Limited Service DCF Assumptions Hotel - Limited Service - Discounted Cash Flow Assumptions Hotel Lim ted Service Hotel Parking Days open Available Room Nights Occupied Room Nights 96,533 Square Feet 250 Rooms 140 365 91,250 250 rooms*365 days 82,125 90% of 91,250 Post Construction Year 3 First Year of occupancy 65% Stabilized 90% Years to Stabilize 1 Lease Up 4,563 Room Nights Parking Lease Up 8 Spaces per Month Construction Start Date Year 2 Beginning of Year 2 Construction End Date Year 3 End of Year 3 Hotel Lim ted Service $155.00 Average Daily Rate Parking Rent $1,200 Per Space Per Year Construction Growth 2.50% Annual Growth ADR Growth Rate 3.50% Annual Growth Other Revenue $8.60 Revenue per occupied room Room Expense Other Expense 24.00% 61.00% Rat o to Sales Rat o to Sales Admin 8.50% Rato to Sales Marketing 5.00% Rat o to Sales Util ty 4.00% Rat o to Sales R&M 5.00% Rat o to Sales Real Estate Tax $11.00 Per Occupied Room after Stabilizat on Insurance $1.50 Per Occupied Room Management Fee 3.00% As a percentage of Gross Operating Proft Reserves for Replacement 4.00% Percentage of Total Revenue after Stabilizat on Terminal Cap talizat on Rate 8.25% Discount Rate 11.50% Selling Cost 1.00% This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 126 Shutts & Bowen, LLP September 21, 2020 Hotel - Limited Service Cash Flows Hotel - Limited Service Discounted Cash Flow Assum. Year l Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 10/31/2025 10/31/2026 10/31/2027 10/31/2028 10/31/2029 Year 11 Year 12 10/31/2030 10/31/2031 Total Room Nights Stabilized Occupancy Stabilized Occupancy Rooms Parkin• S•aces 250 140 Construction Period Costs Construction Costs Parking Construction Costs Holding Costs Total Costs $245,000 $0 ($31,390,625) ($32,175,391) $16,800 $0 ($1,205,400) ($1,235,535) $6,565 ($6,565) ($6,729) ($6,898) ($6,565) ($32,602,754) ($33,417,823) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Income Occupancy Occupied Room Nights 0% 0% 0 0 0% 0 65% 90% 90% 90% 90% 90% 90% 90% 90% 59,313 82,125 82,125 82,125 82,125 82,125 82,125 82,125 82,125 Parking Income $1,200 $0 $0 $0 $134,524 $192,784 Room Revenue (ADR) $155.00 $0 $0 $0 $10,192,928 $14,607,251 Other Dept. Revenue $8.60 $0 $0 $0 $565 543 $810 467 Eff. Gross Income $0 $0 Departmental Expenses $199,531 $15,118,504 $838 833 $206,515 $15,647,652 $868 192 $213,743 $16,195,320 $898 579 $221,224 $16,762,156 $930 029 $228,967 $17,348,831 $962 580 $236,981 $17,956,041 $996 271 $245,275 $18,584,502 $1 031 140 $0 $10 892 996 $15 610 501 $16 156 869 $16 722 359 $17 307 642 $17 913 409 $18 540 379 $19 189 292 $19 860 917 Room Expense 24.00% $0 $0 $0 ($2,446,303) ($3,505,740) ($3,628,441) ($3,755,436) ($3,886,877) ($4,022,917) ($4,163,720) ($4,309,450) ($4,460,280) Other Expense 61.00^/0 $0 $0 $0 ($344 981) ($494 385) ($511 688) ($529 597) ($548 133) ($567 318) ($587 174) ($607 725) ($628 995) Total Departmental Expenses $0 $0 $0 ($2,791,284) ($4,000,125) ($4,140,129) ($4,285,034) ($4,435,010) ($4,590,235) ($4,750,894) ($4,917,175) ($5,089,276) Undistributed Expenses Adminstrative 8.50% $0 $0 $0 ($925,905) ($1,326,893) ($1,373,334) ($1,421,401) ($1,471,150) ($1,522,640) ($1,575,932) ($1,631,090) ($1,688,178) Sales and Marketing 5.00% $0 $0 $0 ($544,650) ($780,525) ($807,843) ($836,118) ($865,382) ($895,670) ($927,019) ($959,465) ($993,046) Utility 4.00% $0 $0 $0 ($435,720) ($624,420) ($646,275) ($668,894) ($692,306) ($716,536) ($741,615) ($767,572) ($794,437) R&M 5.00% $0 $0 $0 ($544 650) ($780 525) ($807 843) ($836 118) ($865 382) ($895 670) ($927 019) ($959 465) ($993 046) Total Departmental Expenses $0 $0 $0 ($2,450,924) ($3,512,363) ($3,635,295) ($3,762,531) ($3,894,219) ($4,030,517) ($4,171,585) ($4,317,591) ($4,468,706) Gross Operating Profit $0 $0 $0 $5,650,788 $8,098,014 $8,381,444 $8,674,795 $8,978,412 $9,292,657 $9,617,900 $9,954,526 $10,302,935 Management Fees 3.00% $0 $0 $0 ($169,524) ($242,940) ($251,443) ($260,244) ($269,352) ($278,780) ($288,537) ($298,636) ($309,088) Insurance $1.50 $0 $0 $0 ($95,810) ($135,976) ($139,375) ($142,860) ($146,431) ($150,092) ($153,844) ($157,690) ($161,633) Real Estate Tax $11.00 $0 $0 $0 ($450,000) ($900,000) ($1,270,000) ($1,270,000) ($1,270,000) ($1,270,000) ($1,270,000) ($1,270,000) ($1,270,000) Total Insurance / RE Tax / Mgmt Fees $0 $0 $0 ($715,333) ($1,278,916) ($1,660,819) ($1,673,104) ($1,685,784) ($1,698,872) ($1,712,381) ($1,726,326) ($1,740,721) Net Op. Income $0 $0 $0 $4,935,455 $6,819,097 $6,720,625 $7,001,691 $7,292,629 $7,593,785 $7,905,519 $8,228,200 $8,562,214 Reserves Replacement Reserves Total Reserves 4.00% $0 $0 $0 $0 $0 $0 $0 ($624,420) ($646,275) ($668,894) ($692,306) ($716,536) ($741,615) ($767,572) ($794,437) $0 ($624,420) ($646,275) ($668,894) ($692,306) ($716,536) ($741,615) ($767,572) ($794,437) Property Cash Flows Reversion Value Terminal Cap. Rate Reversion Value Cost to Sale 8.25% 1.00% $0 $0 $0 $4,935,455 $6,194,677 $6,074,351 $6,332,797 $6,600,323 $6,877,249 $7,163,903 $7,460,628 $7,767,777 8.25% $103,784,413 ($1 037 844) Adj. Reversion Value $102,746,588 Total Cash Flow Present Value Discount Rate PV Factor 11.50% ($6,565) ($32,602,754) ($33,417,823) $4,935,455 $6,194,677 $6,074,351 $6,332,797 $6,600,323 $6,877,249 $7,163,903 $110,207,197 0.897 0.804 0.721 0.647 0.580 0.520 0.467 0.419 0.375 0.337 0.302 (95888) ($26,224,339) (924,107577) This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 127 Shutts & Bowen, LLP September 21, 2020 West & South Parking DCF Property Analysis Based on the client provided information, we assumed one construction phase for west & south parking (surface parking lot). Construction occurs for west & south parking over Years 2 and 3. Further, we assumed 3,310 parking spaces with a 50.00% occupancy in Year 4 and stabilized with a 3.50% vacancy thereafter. West & South Parking DCF Assumptions Parking West & South - Discounted Cash Flow Assumptions West & South Asphalt Parking Construction Start Date Construction End Date Parking Rent Vacancy and Collection Loss 1,051,100 Square Feet 3,310 Spaces Year 2 Beginning of Year 2 Year 3 End of Year 3 $1,200 Per Space Per Year 3.50% Deducted from Potential Gross Income Operating Costs 30.00% As a percentage of Income per Space Market Rent Growth Rate 2.50% Annual Growth Construction Growth 2.50% Annual Growth First Year of occupancy 50% Stabilized 100% Years to Stabilize 1 Leasing Commissions (New) 4.50% As a percentage of Market Rent Terminal Capitalization Rate 8.50% Discount Rate 10.00% Selling Cost 1.00% This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 128 Shutts & Bowen, LLP September 21, 2020 Surface Parking Cash Flows West & South Parking Discounted Cash Flow Assum. Year 1 Year 2 Year 3 Year4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 10/31/2025 10/31/2026 10/31/2027 10/31/2028 10/31/2029 Year 11 Year 12 10/31/2030 10/31/2031 Square Feet Spaces First Year Occupancy Stabilized Occu • an Construction Period Costs Construction Costs Total Costs Income $3 855 $0 $0 ($6 703 014) ($6 870 589) $0 $0 ($6,703,014) ($6,870,589) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Market Rent Vacancy/Coll. Loss Eff. Gross Income Op. Expenses: Operating Costs $1,200 $0 $0 $0 $0 $2,192,172 $4,493,953 $4,606,302 $4,721,460 $4,839,496 $4,960,484 $5,084,496 $5,211,608 3.50 % $0 $0 $0 $0 ($76 726) ($157 288) ($161 221) (5165 251) ($169 382) ($173 617) ($177 957) ($182 406) $0 $0 $0 $0 $2,115,446 $4,336,665 $4,445,082 $4,556,209 $4,670,114 $4,786,867 $4,906,538 $5,029,202 30.00% $0 $0 $0 $0 ($634,634) ($1,301,000) ($1,333,525) ($1,366,863) ($1,401,034) ($1,436,060) ($1,471,962) ($1,508,761) Total Op. Expenses Net Op. Income Leasing Costs and Reserves Lease Comm. & Legal Costs Total Leasing Costs and Reserves Property Cash Flow Reversion Value Terminal Cap. Rate Reversion Value Cost to Sale Adj. Reversion Value $0 $0 $0 $0 ($634,634) ($1,301,000) ($1,333,525) ($1,366,863) ($1,401,034) ($1,436,060) ($1,471,962) ($1,508,761) $0 $0 $0 $0 $1,480,812 $3,035,666 $3,111,557 $3,189,346 $3,269,080 $3,350,807 $3,434,577 $3,520,441 4.50 % $0 $0 $0 $0 ($98 648) ($202 228) ($207 284) ($212 466) ($217 777) ($223 222) ($228 802) ($234 522) $0 $0 $0 $0 ($98,648) ($202,228) ($207,284) ($212,466) ($217,777) ($223,222) ($228,802) ($234,522) $0 $0 $0 $0 $1,382,165 $2,833,438 $2,904,274 $2,976,880 $3,051,302 $3,127,585 $3,205,775 $3,285,919 8.50% 1.00% $41,002,787 8.50% $41,416,957 ($414 170) Total Cash Flow Discount Rate PV Factor 10.00% $0 $0 ($6,703,014) ($6,870,589) $1,382,165 $2,833,438 $2,904,274 $2,976,880 $3,051,302 $3,127,585 $44,208,562 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 West & South Parking, PV of CF ($5,036,073) ($4,692,705) $ ,• This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 129 Shutts & Bowen, LLP September 21, 2020 Income Approach (As If Remediated) Based on determining the land residual value, we have used the yield capitalization (DCF) approach by analyzing discounted cash flows of the proposed development by use type. We built a DCF for each use type over a ten-year holding period, after a planning and pre -construction year, considering construction costs, lease -up costs, and the net operating income. The following table presents our summary of all cash flows for the use types and the concluded internal rate of return (IRR). According to The Appraisal of Real Estate, 14th Edition, "The rate of discount that makes the net present value of an investment equal zero is the internal rate of return. In other words, the IRR is the rate that discounts all returns from an investment, including returns from its termination, to a present value that is equal to the original investment." Deloitte Advisory - Total Cash Flow IRR IRR Summary All Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Total Cash Flow 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 10/31/2025 10/31/2026 10/31/2027 10/31/2028 10/31/2029 10/31/2030 13.41% 14.46% 11.06% 11.76% 11.63% 12.63% 25.61% Retail Ph. I Cash Flow Retail Ph. II Cash Flow Tech -Hub Ph. I Cash Flow Tech -Hub Ph. II Cash Flow Hotel - Full Service Cash Flow Hotel - Limited Service Cash Flo West & South Parking Cash Flov $159,906,433 $133,624,874 $88,357,064 $72,828,720 $235,491,637 $88,365,373 $49,972,284 ($21,097) ($21,097) ($6,565) ($6,565) ($11,528) ($6,565) $0 ($50,144,124) ($21,624) ($35,652,129) ($6,729) ($94,857,116) ($32,602,754) ($6,539,526) ($51,397,728) ($22,165) ($36,543,433) ($6,898) ($97,228,544) ($33,417,823) ($6,703,014) ($3,411,684) ($52,682,671) ($2,027,489) ($37,457,019) $12,861,048 $4,935,455 $1, 348,453 $10,802,410 ($53,999,738) $6,099,746 ($38,393,444) $14,871,993 $6,194,677 $2,764,329 $11,072,470 ($2,634,018) $6,283,157 ($1,504,403) $15,529,901 $6,074,351 $2,833,438 $11,349,282 $11,349,282 $6,472,082 $6,472,082 $16,210,973 $6,332,797 $2,904,274 $11,633,014 $11,633,014 $6,666,685 $6,666,685 $16,916,021 $6,600,323 $2,976,880 $11,923,839 $11,923,839 $6,867,138 $6,867,138 $17,645,889 $6,877,249 $3,051,302 $12,221,935 $12,221,935 $7,073,615 $7,073,615 $18,401,449 $7,163,903 $3,127,585 $195,857,020 $195,857,020 $123,117,693 $123,117,693 $315,140,022 $110,207,197 $44,208,562 12.80^/o Totals $828,546,386 ($73,418) ($219,824,004) ($225,319,604) ($76,433,907) ($51,660,027) $37,654,896 $61,090,771 $63,092,623 $65,156,394 $67,284,037 $1,107,505,208 The cash flows were discounted back to the net present value based on a market derived discount rate. We added the total present value for each component for a combined residual value to the land. Deloitte Advisory Land Residual Value Summary All Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Total PV 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 10/31/2025 10/31/2026 10/31/2027 10/31/2028 10/31/2029 10/31/2030 Retail Ph. I, PV of CF Retail Ph. II, PV of CF Tech Hub Ph. I Cash Flow Tech Hub Ph. II Cash Flow Hotel Full Service, PV of CF Hotel Limited Service, PV of CF West &South Parking, PV of CF Totals $16,710,139 $15,925,354 $3,194,908 $4,153,127 $1,216,243 $3,604,107 $14,669,993 ($19,092) ($19,092) ($5,955) ($5,955) ($10,339) ($5,888) $0 ($66,322) ($41,067,238) ($17,710) ($29,331,095) ($5,536) ($76,299,235) ($26,224,339) ($5,404,567) ($178,349,721) ($38,094,044) ($16,428) ($27,269,272) ($5,147) ($70,140,552) ($24,107,577) ($5,036,073) ($164,669,094) ($2,288,336) ($35,336,105) ($1,372,285) ($25,352,385) $8,321,026 $3,193,212 $921,012 ($51,913,860) $6,557,061 ($32,777,835) $3,744,715 ($23,570,244) $8,629,683 $3,594,548 $1,716,431 ($32,105,640) $6,082,342 ($1,446,922) $3,498,697 ($837,708) $8,082,012 $3,161,190 $1,599,402 $20,139,013 $5,641,992 $5,641,992 $3,268,841 $3,268,841 $7,566,325 $2,955,776 $1,490,352 $29,834,118 $5,233,522 $5,233,522 $3,054,085 $3,054,085 $7,081,076 $2,762,907 $1,388,737 $27,807,934 $4,854,624 $4,854,624 $2,853,437 $2,853,437 $6,624,754 $2,581,909 $1,294,050 $25,916,836 $4,503,158 $4, 503,158 $2,665,971 $2,665,971 $6,195,885 $2,412,132 $1,205,819 $24,152,094 $65,306,151 $65,306,151 $42,087,768 $42,087,768 $95,165,606 $33,280,237 $15,494,831 $358,728,511 Residual Value to the Land Rounded $59,473,871 $59,000,000 Per Acre Value (63 Acres) Discount Applied to Stadium Land Implied Per Acre Value (10.5 Acres) Implied Value Stadium Land $936,508 30% $655,556 $6,900,000 Total Value (73.5 Acres) $65,900,000 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 130 Shutts & Bowen, LLP September 21, 2020 The residual land value as if remediated for the land allocated to the mixed -use development (63 acres) is $59,000,000 or $936,508 per acre. We have applied a 30% discount to the land designated for the stadium as discussed in the STADIUM RATE OF RETURN DISCUSSION in the preceding Soccer Stadium Analysis section. This equates to $655,556 per acre or $6,900,000 total. The total value of the subject land as if remediated is $65,900,000. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 131 Shutts & Bowen, LLP September 21, 2020 Sales Comparison Approach The sales comparison approach is based on the on the principle of substitution, which states that the limits of prices, rents, and rates of return tend to be set by the prevailing prices, rents, and rates of return of equally desirable substitutes. The approach is expressive of the value established by informed buyers and sellers in the market. In applying the sales comparison approach, comparisons are made between the subject real property and other similar (comparable) properties in the immediate area or in competing areas that have been sold, for which contracts of sale have been agreed, or for which listings have been arranged. Adjustments are made to the price data to reflect differences between each comparable property and the subject for such factors as property rights conveyed, financing and other conditions of the sale, expenditures made immediately after purchase, the timing of the sale (market conditions), zoning, location, and physical characteristics such as size, age, and condition. The resulting adjusted prices per unit of physical measurement (e.g., acre, square foot, Floor Area Ratio) when applied to the analogous statistic of the subject lead to an estimate of the value of the real property. We have considered the Sales Comparison Approach as a secondary approach in order to determine the value of the Subject land based on the extraordinary assumption that the City of Miami can achieve a land use amendment and rezoning of the site to SAP necessary to develop the subject site to a higher density, mixed -use, and its highest and best use. As such, based on the Subject's 73.5 acres we have researched larger commercial land transactions in the greater Miami area. These sales were chosen based on size, location, zoning, and proposed use in comparison to the Subject assuming that the City of Miami can achieve rezoning at the Subject. The Land Sales are as follows. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 132 Shutts & Bowen, LLP September 21, 2020 Deloitte. Deloitte Transactions and Business Analytics LLP Sala Detail Land Sale 1 Address: 10300 NW 121st Way City, State: Medley, FL County: Miami Dade Property Type: Land Proposed Use: Warehouse Zoning: M-3 Land Area AC: 35.15 Land SF Gross: 1531134 Prapertylp: 4110700 Sales / Asking $35,700,000 Price: Sale Date: 1/11/2018 Price Per AC $1,015,737 Land: Price Per SF $23.32 Land: Property Leased Fee Rights: Financing: Conditions of N/A Sale: Proposed Lots N/A / Units: Utilities: Available Location Type: Industrial Market: Miami MSA Submarket Medley/Hialeah Name: Parcel Number(s): 22-2032-004-0301 Photo: Notes: This comparable land sale represents the sale of 35.15 acres (1,531,134 square feet) on January 1, 2018 Iocated at 10300 NW 121st Way in Medley, Florida. The property sold for $35,700,000. According to CoStar, the sale represents a short-term sale leaseback with the recorded seller as UFP Real Estate, LLC and the recorded buyer as Duke Realty Limited Partnership. At the time of sale, the property operated as a lumberyard. The property was fully leased on a two-year term to an affiliate of the seller to stay at the property. We contacted the buyer broker who confirmed the sale price and sale date. Further, according to the buyer broker, Duke Realty plans to demolish the current building on the site and develop two new warehouses for a total of 400,000 square feet. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory Shutts & Bowen, LLP September 21, 2020 Deloitte, Deloitte Transactions and Business Analytics LLP Sale Detail Land Sale 2 Address: SW 88th St City, State: Miami, FL County: Miami Dade Property Type: Land Proposed Use: Commercial Zoning: BU-2 Land Area AC: 69.8 Land SF Grass: 3040488 PropertyID: N/A Sales / Asking $41,840,000 Price: Sale Date: 12/22/2017 Price Per AC $599,427 Land: Rice Per SF $13.76 Land: Property Fee Simple Rights: Financing: Conditions of WA Sale: Proposed Lots N/A / Units: Utilities: Available Location Type: Residential and Commercial Market: Hiami M5A Submerket Kendall Name: Parcel Number(s): 30-5905-029-0020 Photo: Notes: This comparable land sale represents the sale of 69.80 acres (3,040,488 square Feet) on December 22, 2017 located at 5W 88th St in Mrarru, Flor da. The property sold for $41,840,000, According to CoStar, the sale represents a fee simple transaction the recorded seller as The Howard Hughes Corporation and the recorded buyer as NAI Miami. This report is intended solely for the information and internal use of the Intended user(s) and should not be used or reified upon by any other person or entity. Deloitte Advisory 134 Shutts & Bowen, LLP September 21, 2020 Deloitte. Deloftte Transactions and Business Analytics LLP Sale Detail Land Sale 3 Address: 13220 NW 17th St. City, State: Miami, FL County: Miami Dade Property Type; Land Proposed Use: Warehouse Zoning: Land Area AC: IU-1 0: NAL vimmommimeilingia 30.39 P1 Sales / Asking $31,098,500 Notes: Land SF Gross: 1323933 Price_ Sale Date: 7/20/2016 Price Per AC $1,023,202 Land: Price Per SF $23..49 Land: Property Fee Simple Rights: Financing: Conditions of N/A Sale: Proposed Lots N/A / Units: Utilities: Available Location Type: Industrial Market: Miami MSA Submarket Outlying Miami Dade Name: County Parcel Number(s): 30-3935-019-0015 This comparable land sale represents the sale of 30.39 acres (1,323,399 square feet) on July 20, 2016 located at 13220 NW 17th Street in Miami, Florida. The property sold for $31,980,500. According to the County Assessor's property record, this sale was not exposed to the open market. However, based on our research of other similar sales in the immediate area, this sale appears to be market oriented. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 135 Shutts & Bowen, LLP September 21, 2020 Deloitte. Deloitte Transactions and Business Analytics LLP Sale Detail Land Sale 4 Address: 4400 NW 87th Ave, 4402 NW 87th Ave, 3853 Golf Course Drive City, State: Dora!, FL County: Miami Dade Property Type; Land Proposed Use: Mixed Use Zoning: GU Land Area AC: 128.73 Land SF Gross: 5,607,479 Sales / Asking $96,000,100 Price: Sale Date: 4/25/2016 Price Per AC $745,748 Land: Price Per SF $17.12 Land: Property Fee Simple Rights: Financing: Condit ons of N/A Sale: Proposed Lots N/A / Units: Utilities: Available Location 'type: Residential and Commercial Market: Miami MSA Submarket Miami Airport Name: Parcel 35-3022.000-0011, 35- Number(s): 3022-000-0110, 35-3022- 002-0010 Photo: Notes: This comparable land sale represents the sale of 128.73 acres (5,607,479 square feet) on April 25, 2016 located at 4400 NW 87th Ave, 4402 NW 87th Ave, and 3853 Golf Course Dr. in Dora!, Florida. The property sold for $96,000,100. According to Co5tar, this sale took place as three separate transactions on the same date for the respective addresses; however, the sales were not listed as portfoiic or multi -property sale. The sale represents a former golf course with a planned mixed -use development of residential, office, and general commercial uses. CoStar listed true buyers as Lennar and Codina Partners with true seller as GiC Real Estate. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory Shutts & Bowen, LLP September 21, 2020 Land Sales Grid Location City, State Subject's Metro Market Sales Price Price Per SF Zoning Intended Use Adjustments Property Rights Conveyed Adjusted Unit Sales Price Financing Terms Adjusted Unit Sales Price Conditions of Sale Adjusted Unit Sales Price Market Conditions Adjusted Unit Sales Price Location/Physical Adjustments Location Access/Frontage Timing Size (Acres) Size (Square Feet) Zoning Use Utilities Lot Shape Topography Total Location/Physical Adjustments Adjusted Price Per Square Foot Minimum Adjusted Price Maximum Adjusted Price Mean Adjusted Price Concluded Price Per SF Range Low High SUBJECT Land Sale 1 Land Sale 2 Land Sale 3 Land Sale 4 1400 NW 37th Ave Miami, FL 33125 Miami -Dade County, FL SAP Mixed -Use 10300 NW 121st Way Medley, FL 0 $35 700 000 $23.32 M-3 Warehouse SW 88th St Miami, FL 0 $41 840 000 $13.76 BU-2 Commercial 13220 NW 17th Street Miami, FL 0 $31 098 500 $23.49 IU-1 Warehouse 4400 NW 87th Ave, 4402 NW 87th Ave, 3853 Golf Course Drive Dora!, FL 0 $96 000 100 $17.12 GU Mixed Use Fee Simple Oct-2019 Leased Fee $23.32 Cash Equivalent $23.32 Inferior $24.25 Jan-2018 $25.46 Fee Simple. $13.76 Cash Equivalent $13.76 Normal $13.76 Dec-2017 $14.59 Fee Simple $23.49 Cash Equivalent $23.49 Normal $23.49 Jul-2016 $25.84 Fee Simple $17.12 Cash Equivalent $17.12 Normal $17.12 Apr-2016 $18.83 Good Good Timing for Additional Planning 73.50 3,201,660 SAP Mixed -Use All available Irregular Level Similar Inferior Superior 35.15 1,531,134 M-3 Spec Warehouse All available Similar Similar Superior Inferior Superior 69.80 3,040,488 BU-2 Retail/Garage/Hospitality All available Similar Similar Inferior Similar Superior 30.39 1,323,933 IU-1 Warehouse / Storage All available Similar Similar Superior Similar Superior 128.73 5,607,479 GU Mixed Use All available Similar Similar $24.19 $15 32 $24.55 1 $16.95 $15.32 Notpc• $24.55 - Conditions of Sale: Land Sale 1 was adjusted downward to account for demolition costs of existing improvements. $20.25 - Market Conditions: Adjustments for market conditions are applied based on change in the NCREIF index in Miami -Dade County, FL Subject's metro market. - Location: Adjustments for location are applied based on the median household income of the each Land Sale's immediate area compared to the Subjects. Land Sales 2 and 4 were adjusted downward for superior location . Land Sale 3 was adjusted upward for inferior location. $19.00 $21.00 - Access/Frontage: Land Sales 1 and 2 were adjusted upward for the inferior access. Implied Low Value (Rounded) $60,800,000 - Timing: All Land Sales were adjusted downward to account for the Subjects first year of planning and finalizing approvals. Implied High Value (Rounded) $67,200,000 - Size: Land Sales with smaller size compared to the Subject Property were adjusted downward and Land Sales with larger size compared to the Subject Property were adjusted upwards as smaller parcels have higher marketability. -Zoning: None - Use: Land Sales 1, 2, and 3 were adjusted upwards for less intense uses. - Utilities: None - Lot Shape: None - Topography: None This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 137 Shutts & Bowen, LLP September 21, 2020 Land Sales Map last ^later • Area Pembroke Pines Miramar Miami Lakes Doralg CED CED Hialeah 0 Coral Gables Kendall Pinecrest Palmetto BayG© gle Hollywood Hallandale Beach Aventura CED Miami Beach Miami Beach Miami Key Biscayne This report is intended solely for the information and internal use of the intended users)and should not be used or relied upon by any other person or entity. Deloitte Advisory 138 Shutts & Bowen, LLP September 21, 2020 Conclusion Due to the large size, location and unique proposed use (mixed -used development anchored by a sports stadium) of the Subject Property, there are really no truly comparable sales in the marketplace. The land sales presented on an unadjusted basis resulted in a value range of $13.76 to $23.49 per square foot. After adjustments the land sales resulted in an adjusted value range of $15.32 to $24.55 per square foot with an average of $20.25 per square foot. We have placed equal weight on each land sale when concluding to a value range. Based on the preceding analysis, we concluded to a price per square foot range of $19.00 to $21.00 with an implied total land value range of $60,800,000 to $67,200,000. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 139 Shutts & Bowen, LLP September 21, 2020 Reconciliation of Value As -If Remediated We evaluated and reconciled the results of each approach on which we relied considering its relative merits and, on the quantity, and quality of collected data to arrive at a value. We gave primary weight to the income approach, as the Property is a unique piece of land in a densely populated area and finding comparables is challenging and requires several qualitative adjustments. We did give secondary weight to the sale comparison approach range of value to corroborate the estimate from the income approach. We did not develop the cost approach as this approach is not applicable to this property under the current circumstances. Reconciliation of Value As If Remidiated (Scenario A) Value Indicators Income Capitalization Approach: Direct Cap talization Method: Discounted Cash Flow Method: Sales Comparison Approach: Cost Approach: ESTIMATED MARKET VALUE Value ID Value A Appraisal Premise As If Remediated Interest Appraised Fee Simple Total $65,900,000 N/A $65,900,000 $60,800,000 To $67,200,000 Not Applicable Date of Value S/PSF Value 10/23/2019 $20.58 $65,900,000 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 140 Shutts & Bowen, LLP September 21, 2020 Income Capitalization Approach Continued Scenario B (As Is) As mentioned earlier in the report, the Property contains an environmental substance and/or material that requires remediation prior to or during development. The City of Miami has hired an independent environmental consultant to analyze the site and estimate the costs to remediate the land. The costs have been estimated to be $16,500,000 and it is expected to take one year to clean the site before construction can begin. Based this timeframe, we have delayed our cash analysis by one year and added the costs to remediate the land based the information provided by the Client. Deloitte Advisory Land Residual Value Summary All Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Total PV 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 10/31/2025 10/31/2026 10/31/2027 10/31/2028 10/31/2029 10/31/2030 10/31/2031 Retail Ph. I, PV of CF Retail Ph. II, PV of CF Tech Hub Ph. I Cash Flow Tech Hub Ph. II Cash Flow Hotel Full Service, PV of CF Hotel Llmlted Service, PV of CF West & South Parkl ng, PV of CF Cost of Remedlatlon $15,481,262 ($19,092) ($17,710) ($38,094,044) $14,753,295 ($19,092) ($17,710) ($16,428) $3,253,432 ($5,955) ($5,536) ($27,269,272) $4,111,175 ($5,955) ($5,536) ($5,147) $3,322,122 ($10,339) ($9,504) ($70,140,552) $4,067,264 ($5,888) ($5,413) ($24,107,577) $13,669,767 $0 $0 ($5,036,073) (S16,500,000) $0 ($16,500,000) $0 ($35,336,105) ($2,122,664) $6,082,342 $5,641,992 $5,233,522 $4,854,624 $4,503,158 $4,177,138 $60,578,103 ($15,239) ($32,777,835) ($30,404,779) (S1,342,167) $5,233,522 $4,854,624 $4,503,158 $4,177,138 $60,578,103 ($25,352,385) ($1,265,514) $3,498,697 $3,268,841 $3,054,085 $2,853,437 $2,665,971 $2,490,820 $39,320,242 ($4,785) ($23,570,244) ($21,913,379) (S768,333) $3,054,085 $2,853,437 $2,665,971 $2,490,820 $39,320,242 ($64,478,983) $7,764,509 $8,082,012 $7,566,325 $7,081,076 $6,624,754 $6,195,885 $5,793,042 $88,853,897 ($22,161,674) $2,973,797 $3,353,744 $2,955,776 $2,762,907 $2,581,909 $2,412,132 $2,252,952 $31,054,599 ($4,692,705) $858,216 $1,599,402 $1,490,352 $1,388,737 $1,294,050 $1,205,819 $1,123,604 $14,438,366 $0 $0 $0 $0 $0 $0 $0 $0 $0 Totals Residual Value to the Land $42,158,318 Rounded $42,000,000 ($66,322) ($16,561,410) ($164,669,094) ($152,041,874) ($48,139,736) ($29,701,960) $18,812,785 $27,807,934 $25,916,836 $24,152,094 $22,505,513 $334,143,552 Per Acre Value (63 Acres) $666,667 Discount Applied to Stadium Land 30% Implied Per Acre Value (10.5 Acres) $655,556 Implied Value Stadium Land $6,900,000 Total Value (73.5 Acres) $48,900,000 The residual land value as is for the land allocated to the mixed -use development is $42,000,000. Note that the remediation costs include the costs for the entire site, per the agreement between MFP and the City. As such, the additional 10.5 acres for the Stadium Land is based on the per acre value concluded in Scenario A. Under this Scenario, the concluded value is $48,900,000. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 141 Shutts & Bowen, LLP September 21, 2020 Land Market Rent Our scope also includes estimating the ground rent for the entire 73 acres based on the concluded market of the land. According to The City of Miami Code of Ordinances, Charter and Related Laws, Subpart A— The Charter, Section 29-8. — City -owned property sale or lease — Generally: "the minimum annual base rent payable to the City (for the subject land) equal to the greater of (a) fair market value as determined by state certified appraisers or (b) five percent (5.0%) of rent from the retail, office, and hotel development within the Demised Property, but annual base rent of no less than three million five hundred seventy-seven thousand three hundred sixty-five dollars ($3,577,365.00), in addition to a contribution to the City of twenty million dollars ($20,000,000.00) payable over thirty (30) years in annual installments, and any rent increases and/or additional rents negotiated by the parties; authorizing the use of the Demised Property for a soccer stadium; with at least one (1) million square feet of art and entertainment center including food and beverage venues, offices, retail, and a hotel with at least 750 units and conference center with ancillary commercial uses, guaranteeing a living wage for all on -site employees24, further requiring MFP to undertake the remediation and Site development for a public park of approximately fifty-eight (58) acres to be developed on property adjacent to the Demised Property as MFP's sole cost, with any restrictions, reversions, and retention by the City of all other rights including at least a one (1%) transfer fee payable to the City, with such Lease and Master Development Agreement requiring City Commission approval by a four -fifths (Ysths) vote." Based on the excerpt from this charter, the ground rent shall be equal to the greater of three options: • Fair Market Value of the land divided a by a market -oriented capitalization rate. • Five percent of the revenues from the mixed -use property within the development • Minimum ground rent of $3,577,365 Earlier we concluded to the fair market value of the land based on two Scenarios: ESTIMATED MARKET VALUE Value ID Appraisal Premise Interest Appraised Date of Value S/PSF Value Value A As If Remediated Fee Simple 10/23/2019 $20.58 $65,900,000 Value B As Is Fee Simple 10/23/2019 $15.27 $48,900,000 24 As we have based our development costs from MVS, we have assumed that construction wages are consistent with local norms. Per MVS, "Contractors' overhead and profit including job supervision, workmen's compensation, fire and liability insurance, unemployment insurance, equipment, temporary facilities, security, etc., are included" in the base costs. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 142 Shutts & Bowen, LLP September 21, 2020 To estimate a ground rent under each scenario, the fair market value is multiplied by a capitalization rate. The following table summarizes land lease capitalization rates based on national surveys from RealtyRates Investor Survey Q3. RealtIRates_rcom INVESTOR SURVEY - 34d Quarter 2019" LAND LEASES Proper tg Tips Apartments Golf Health C arelSenlor Housing Industrial Capitalization Rates Discount Rates Min. Mat. Aug. Min. Mat. Avg. 2.43% 10.12% 6.42'/. 5.03v. 10.62% 7.42. 2,49X 18.12 : 8,73X 5.09 X 16,62% 9,73% 2,97''.. 11,20x 7,08% 5.57:% 11.70% B.O8/. 2.57% 11108% 6.78x 5.17;: 10.58% 7.78% 5.52: 16.22K 8.40% Lodging 2.92'% 15.72% 7,40X Mobile Home'R / Park 2.53% 13.02% 7.69X 5.12% 13.52X. 8.69% Oitfic-e 2,75% 9.68% 6,52'. 5.35% 10,18X 7.52'. Restaurant 3.15: 15.26% 8.22% 5.75'r 15,75% 9.22% 5.27 ; 11.70% 7.87 Seif•Sto rage 2.75% 10.20% 7.89 . 5.35% 10.70% 8.89% Special Purpose 3.43% 18.19% 8.61% 8.32% 18.58% 9.37% All Properties 2.43% 18.19% 7.47 % 5.03% 16.62% 8.38% Retail 2.67%' 11.20 ' 6.97 X '2nd rttr 2413 Copyright 2013 RtltyRt .c. riT" Based on the proposed uses of the subject property, retail, tech hub (office), and hotels (lodging), the average capitalization rates range from 6.52% to 7.40%. Also based on our research, we have also sourced a ground lease between the City of Miami and the owner/developer of the Bayside Marketplace retail property in 2014 which opened the door to the development of the SkyRise Miami (a mixed -used tower currently under construction). Based on our research and high-level analysis, we estimated that the implied rental capitalization rate of approximately 6% to 7% of the land value. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 143 Shutts & Bowen, LLP September 21, 2020 Based on the market data presented above and the fact that a portion of the subject site is a stadium which will likely achieve a lower internal rate of return for the developer than a purely commercial development, we estimate a capitalization rate of 6.50%. The implied ground rent under each Scenario is as follows: Options Estimated Ground Rent Fair Market Value Scenario A Scenario B $4,283,500 $3,178,500 We have also estimated the revenues from the mixed -use development to determine the 5% percent -revenue ground rent option. To do this, we estimated stabilized revenues from each use's year of stabilization in today's dollars. This was done by bringing back the revenues to present value "discounting" at the implied growth rates of these revenues through the holding period. Stabilized Values Summary Retail Ph. I Retail Ph. II Tech -Hub Ph. I Tech -Hub Ph. II Hotel - Full Service Hotel - Limited Service West & South Parking Year 5 Year 7 Year 5 Year 7 Year 5 Year 5 Year 5 $11,242,334 Year 7 $11,811,477 Year 7 $6,374,882 Year 7 $6,763,112 Year7 $62,388,387 Year 7 $15,610,501 Year 7 $4,230,893 Year 7 $11,811,477 Year 8 $11,811,477 Year 8 $6,763,112 Year8 $6,763,112 Year8 $66,832,000 Year 8 $16,722,359 Year 8 $4,445,082 Year 8 $12,106,764 $12,106,764 $6,966,006 $6,966,006 $69,171,120 $17,307,642 $4,556,209 Tota I $118,421,587 $125,148,620 $129,180,510 Implied Rev. Growth Yr7 to Yr8 3.22% Implied PV of Stabilization Revenue $5,173,334 The third option is that the ground rent will not fall below $3,577,365. The following table summarizes all the ground rent options as described in the City Charter, Section 29-B. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 144 Shutts & Bowen, LLP September 21, 2020 Ground Rent Option Summary Options Estimated Ground Rent Fair Market Value Scenario A Scenario B 5% of Revenues Minimum Rent $4,283,500 $3,178,500 $5,173,334 $3,577,365 Our valuation does not include any consideration of the likely impact of Coronavirus (COVID-19) on the real estate market. Our opinion is based on prevailing economic, market and other conditions as of the Effective Date. Such conditions can change significantly over relatively short periods of time. Recent volatility in capital markets and the current economic outlook have created significant uncertainty with respect to the valuation of real estate. Therefore, our conclusions may be more susceptible to change than would normally be the case. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 145 Shutts & Bowen, LLP September 21, 2020 Assumptions and Limiting Conditions 1. The analyses, advice, recommendations, opinions, or conclusions contained herein are valid only as of the indicated date and only for the indicated purpose. 2. The analyses, advice, recommendations, opinions, or conclusions contained herein are for the exclusive use of the Client for the sole and specific purposes noted herein and may not be used for any other purpose by the Client or any other party. Furthermore, the analyses, advice, recommendations, opinions, or conclusions are not intended by the author and should not be construed by the reader to be investment advice in any manner whatsoever. The analyses, advice, recommendations, opinions, or conclusions represent the considered opinion of Deloitte Advisory25 ("Advisor") based on information furnished to it by the Client, its representatives, and other sources. 3. Possession of this valuation opinion report, or a copy thereof, does not carry with it the right of publication or distribution to or use by any third party. Any third party that uses the information contained herein does so at its sole risk and agrees to hold Advisor, its subcontractors, and their respective personnel harmless from any claims resulting from use by any other third party. Access by any third party does not create privity between Advisor and any third party. 4. No part of the contents of this report (especially the analyses, advice, recommendations, opinions, or conclusions; the identity of any of Advisor's personnel, or any reference to any of their professional designations or to Advisor) should be disseminated to the public through advertising media, public relations, news media, sales media, mail, direct transmittal, or any other means of communication without the prior written consent of Advisor. 5. No item in this report shall be changed by anyone other than Advisor, and Advisor shall have no responsibility for unauthorized changes. 6. Neither Advisor nor its personnel, by reason of this engagement, is required to furnish a complete valuation report, or to give testimony, or to be in attendance in court with reference to the subject assets, properties, or business interests unless arrangements have been previously made in writing. 7. We conducted interviews with the Client regarding past, present, and prospective operating results and have assumed that the information gathered in such interviews is accurate and complete. 8. Financial statements and related information provided to us in the course of this engagement by the Client or its representatives have been accepted without any verification as fully and correctly reflecting the business conditions and operating results of the relevant assets, properties, or businesses for the respective periods, except as specifically noted herein. We have not audited, reviewed, or 25 "Deloitte Advisory" means Deloitte Transactions and Business Analytics LLP. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 146 Shutts & Bowen, LLP September 21, 2020 compiled any financial information provided to us and, accordingly, we express no audit opinion or any other form of assurance regarding such information. 9. If prospective financial information provided by the Client or its representatives has been used in this analysis, we have not examined or compiled the prospective financial information and, therefore, do not express an audit opinion or any other form of assurance on the prospective financial information or the related assumptions. Events and circumstances frequently do not occur as expected and there will usually be differences between prospective financial information and actual results, and those differences may be material. 10. We do not provide assurance on the achievability of any forecasted results contained herein because events and circumstances frequently do not occur as expected, differences between actual and expected results may be material, and achievement of the forecasted results is dependent on actions, plans, and assumptions of management. 11. We have relied on the representations of the Client or its representatives concerning the usefulness and condition of all real and personal property, intangible assets, or investments used or held in any subject business, as well as the amounts and settlement dates of its liabilities, except as specifically stated to the contrary in this report. We have not attempted to confirm whether all assets of any subject business are free and clear of liens and encumbrances or that the entity has good and marketable title to any assets. 12. We assume that subject assets, properties, or business interests are free and clear of any or all liens or encumbrances unless otherwise stated herein. 13. We believe the information obtained from public sources or furnished to us by other sources is reliable. However, we issue no warranty or other form of assurance regarding the accuracy of such information. 14. We assume that the current level of management expertise and effectiveness would continue to be maintained, and that the character and integrity of any subject asset, property, or business interest through any sale, reorganization, exchange, or diminution of the owners' participation would not be materially or significantly changed. 15. Advisor is not an environmental consultant or auditor, and it takes no responsibility for any actual or potential environmental liabilities. Any person entitled to rely on this report wishing to know whether such liabilities exist, or the scope and their effect on the value of any subject asset, property, or business interest, is encouraged to obtain a professional environmental assessment. Advisor does not conduct or provide environmental assessments and has not performed one in the course of this engagement. 16. We have not determined independently whether any subject asset, property, or business interest is subject to (1) any present or future liability relating to environmental matters (including, but not limited to, Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)/Superfund liability) or (2) the scope of any such liabilities. The analyses, advice, recommendations, opinions, or conclusions contained herein take no such liabilities into account, except as have been reported to us by the Client or its representatives or by an environmental consultant working for the Client, and then only to the extent that the liability was reported to us in an actual or estimated dollar amount. Such matters, if any, are noted in the analyses, advice, recommendations, opinions, or conclusions contained This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 147 Shutts & Bowen, LLP September 21, 2020 herein. To the extent such information has been reported to us, we have relied on that information without verification and offer no warranty or representation as to its accuracy or completeness. 17. We have not made a specific compliance survey or analysis of any subject asset, property, or business interest to determine whether it is subject to, or in compliance with, the Americans with Disabilities Act of 1990, and the analyses, advice, recommendations, opinions, or conclusions contained herein do not consider the effect, if any, of noncompliance with such law. 18. We assume no responsibility for the legal description or matters including legal or title considerations. Title to the subject assets, properties, or business interests is assumed to be good and marketable unless otherwise stated herein. 19. We assume that the subject assets, properties, or business interests are responsibly owned and competently managed. 20. We assume that the Client is in full compliance with all applicable federal, state, and local regulations and laws unless noncompliance is stated, defined, and considered in this report. 21. Unless otherwise stated, no effort has been made to determine the possible effect, if any, on any subject asset, property, or business interest due to future federal, state, or local legislation, including any environmental or ecological matters or interpretations thereof. 22. We assume that all required licenses, certificates of occupancy, consents, or legislative or administrative authority from any federal, state or local government, private entity, or organization have been or can be obtained or renewed for any use on which the analyses, advice, recommendations, opinions, or conclusions contained herein are based. 23. We assume no responsibility for any financial or tax reporting requirements; such reporting requirements are the responsibility of the Client for whom this analysis was prepared. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 148 Shutts & Bowen, LLP September 21, 2020 Certification I, Nathan Florio, hereby certify to the best of my knowledge and belief the following statements with respect to the real properties included in this report and identified below: Property Address County Parcel No. 1400 NW 37th Avenue Miami -Dade 01-3132-000-0080 1802 NW 37th Avenue Miami -Dade 01-3132-000-0090 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 my personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3. I have no present or prospective interest in the Property that is the subject of this report and have no personal interest with respect to the parties involved. 4. I have no bias with respect to the Property that is the subject of this report or to the parties involved with this assignment. 5. My engagement in this assignment was not contingent upon developing or reporting predetermined results. 6. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this report. 7. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. 8. I have satisfied the continuing professional education requirements necessary to maintain my professional designation(s). 9. Because of my background, experience, education, and membership in professional associations, I am qualified to make appraisals of the type of property that is the subject of this report. 10. Nick Gibbs and Eric Dicus provided me with significant real property appraisal assistance with respect to the subject property of this report. 11. I personally inspected the Property on October 23, 2019 with Nick Gibbs. 12. As indicated below, I am certified or licensed to perform the appraisal of the real property described in this certification: This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 149 Shutts & Bowen, LLP September 21, 2020 Name State Certification of License Number Nathan Florio Florida RZ4032 13. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 14. As of the date of this report, I have completed the continuing education program of the Appraisal Institute. 15. I have not provided services involving the subject property described in this certification within the three-year period immediately preceding acceptance of this assignment. September 21,2020 By: Date: P Nathan Florio, CRE, MAI, MRICS State -Certified General Real Estate Appraiser FL-RZ4032 This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 150 Shutts & Bowen, LLP September 21, 2020 Qualifications Deloitte Advisory Nathan Florio, MAI, CRE, MRICS Principal I Deloitte Advisory Real Estate Consulting Deloitte Transactions & Business Analytics LLP 3 Second Street Harborside Plaza 10 Jersey City, NJ 07311 Phone: 212-436-3451 naflorio@deloitte.com PROFILE Nathan Florio is a principal with Deloitte Risk and Financial Advisory in the Deloitte Transactions and Business Analytics' Real Estate Consulting practice specializing in real estate valuation, real estate financial advisory, and engineering and depreciation services. Mr. Florio has valuation, advisory and consulting experience in all major classes of commercial and residential real estate. Mr. Florio has performed single- and multi -property valuations, cost segregation analyses, development and due diligence investment analyses, pre- and post - acquisition allocations of purchase price, sale/leaseback analyses, lease audit and lease advisory, and general consulting projects. These services have been performed for both domestic and international clients. Mr. Florio is also commissioned on a regular basis to provide appraisal reviews for a variety of purposes. Mr. Florio has also provided valuation services on multiple international projects located in Europe, South America, Australia and the Middle East. Nathan specializes in serving financial and lending institutions including private equity, banks, insurance companies, and investment managers throughout the United States. This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 151 Shutts & Bowen, LLP September 21, 2020 Mr. Florio has also led the real estate specific portions of various Deloitte projects supporting large financial institutions Comprehensive Capital Analysis and Review (CCAR) processes for Commercial Real Estate (CRE). Nathan has worked with client and Deloitte analytic and modelling professionals to bridge the gap between the CRE lending teams and the CCAR CRE model creation and validation teams. In addition, Mr. Florio has worked to provide gap assessments of various financial and lending institution's commercial and/or residential real estate loan underwriting, asset management (equity, debt and REO), internal valuation and appraisal review functions (and the procedures and policies thereof). PRIOR EXPERIENCE Prior to joining Deloitte, Mr. Florio worked as a project manager for CDM (Camp, Dresser and McKee) a large environmental engineering and construction firm. He worked to oversee the construction of numerous water and wastewater infrastructure projects throughout New England. EDUCATION • Various Continuing Education courses through American Society of Appraisers, The Appraisal Institute, CFA Institute, CAIA, and New York University Schack Institute of Real Estate • Fordham University: MBA in Finance and Accounting • Rensselaer Polytechnic Institute: Bachelor of Environmental Engineering PROFESSIONAL AFFILIATIONS • Member of the Appraisal Institute - #481277 • Counselors of Real Estate • Engineer in Training Designation — State of New York State • Royal Institute of Chartered Surveyors - Member • Mentor in the Urban Land Institute (ULI) Young Leader Mentor/Protege programs • National Association of Real Estate Investment Trusts (NAREIT) - Member • Licensed General Real Estate Appraiser in several states PAPERS/PRESENTATIONS • "Damage Control: Covering Your Assets" (insurable value for real estate): (a) article published in Risk & Insurance April 2009; and (b) presentation, as part of the annual Association for the Advancement of Cost Engineering (AACE) conference, Toronto, ON, June 2008 COURT TESTIMONY • Mr. Florio has provided testimony (e.g., depositions, hearings) and has been identified as an expert witness in gaming and hotel valuation in New Jersey tax court This report is intended solely for the information and internal use of the intended user(s) and should not be used or relied upon by any other person or entity. Deloitte Advisory 152 Miami Freedom Park Table of Contents 1. Executive Summary 5 Introduction and Appraisal Premises 9 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 Economic Ova idustry Specifics 5. Valuation Methodologies 31 Sales Comparable Approach Income Capitalization Approach 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Glossary of Terms ots Sales Comparison Approach 60 Rent Schedules 66 Costs of Structural Improvements 69 Site Inspection 72 HOULIHAN LOKEY 2 Table of Contents rage Construction Timeline 74 Information Relied Upon 76 Qualifications 81 Limiting Factors and Other Assumptions 84 HOULIHAN LOKEY 3 Miami Freedom Park Development Source: Inter Miami FC website HOULIHAN LOKEY 4 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Executive Summary Subject Property • The real estate asset ("Subject Property") is 73.5 acres within the Melreese Country Club owned by the City of Miami. • The Subject is located at 1802 NW 37th Avenue, Miami, Miami -Dade County, FL 33125. Proposed Development • The "Miami Freedom Park" ("MFP") is the proposed development for the 73.5 acres. The development details are the following: • 25,000-seat soccer stadium for Inter Miami CF, • 600,000 Sq. Ft. of restaurants and retail, • 400,000 Sq. Ft. of office (Tech Hub), • 500-room Full Service Hotel and 250-room Limited Service Hotel; and • approximately 1,000,000 Sq. Ft. of parking. • MFP agrees to develop a public park on the remaining 58 acres. Purpose, Use, and Intended Users • The purpose and use of this report is to provide an appraisal of the economic rent for a lease of the 73.5 acres based on the proposed development. • The report contains market value opinions that refer to two scenarios: • Scenario A — As -If Clean Market value, • Scenario B —As Impaired by Environmental Remediation. • The client and intended users are the law firm of Shutts & Bowen, LLP, and its client, the City of Miami ("City"). HOULIHAN LOKEY 6 Executive Summary Real Property Valuation Analysis Summary Based on our analysis, the market value of the 73.5 acres of the Subject Property as of the Valuation Date is presented below. ($ in actuals) Miami Freedom Park Property Street Address: 1802 NW 37th Ave, City, State: Miami, FL Scenario A- As -If Clean Market Value Income Capitalization Approach (Rounded) : Sales Comparison Approach (Rounded): Reconciled Value: Per Square Foot of Land Area $ 55,000,000 $ 64,000,000 $ 60,000,000 $ 18.74 Scenario B - As Impaired by Environmental Reconciled Value $ 38,000,000 Per Square Foot of Land Area $ 11.87 HOULIHAN LOKEY 7 Executive Summary Ground Rent Summary Based on the market value scenarios presented on the previous slide, the respective market rents for the 73.5 acres in Scenarios A and B are as follows: ($ in actuals) Miami Freedom Park Property Street Address: 1802 NW 37th Ave, City, State: Miami, FL Scenario A - As -If Clean Market Value Reconciled Value: $ 60,000,000 Feasible Ground Rent $ 3,600,000 1 Per Square Foot of Land Area $ 1.12 Percent of Revenue (Year 4 after Occupancy) $ 3,810,000 Per Square Foot of Land Area $ 1.19 Scenario B - As Impaired by Environmental Reconciled Value $ 38,000,000 Feasible Ground Rent $ 2,280,000 Per Square Foot of Land Area $ 0.71 Notes: (1) This amount reflects Houlihan Lokey's opinion on market rent considered under the terms of the Ground Lease and Master Development Agreement by and between City of Miami, a municipal corporation of the State of Florida and Miami Freedom Park, LLC, version 1 Extracted from Miami Freedom Park website. HOULIHAN LOKEY 8 1. Executive Summary 5 Introduction and Appraisal Premises 9 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Introduction and Appraisal Premises Valuation Date ■ The Valuation Date is October 24th, 2019 (inspection date). Type of Appraisal • This appraisal report has been developed by Houlihan Lokey, and specifically authored by real estate experts within the Dispute Resolution Consulting Practice. • The report is intended to comply with the reporting requirements outlined under the Uniform Standards of Professional Appraisal Practice ("USPAP") and the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. • The "As -If Clean Market Value" presented in this report is defined as the estimate of the market value of the real property, in its current physical condition after environmental remediation and subject to the proposed use, as of the valuation date. • The Subject Property has been appraised in a fee simple estate. A fee simple estate is defined as "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."1 • A highest and best use analysis for the Subject Property was undertaken assuming the proposed development was legally permitted and entitled. Consideration was given to the physically possible, financially feasible uses and the maximally productive use(s) consistent with the proposed development and were criteria used in the selection of the comparable sales. Ownership History • The Subject Property is owned by the City of Miami on the Valuation Date. To the best of our knowledge, there have been no transactions related to the owned Real Property in the prior ten years of the Valuation Date. Indented User(s) and Use of the Appraisal • The client and intended users are the law firm of Shutts & Bowen, LLP, and its client, City of Miami for the assignment's intended use as discussed herein. Source: (1) Appraisal Institute, Dictionary of Real Estate Appraisal (6th Edition, Page 90). HOULIHAN LOKEY 10 Introduction and Appraisal Premises (cont.) Scope of Work • Houlihan Lokey has been retained to provide an appraisal of the market rent for the lease of a portion (73.5 acres) of the property commonly known as the Melreese Golf Course. • The Subject Property is known to contain hazardous materials and/or substances that will require environmental remediation. • According to City Zoning, the Subject Property is a Civic Space, which is subject to a No -Net -Loss policy for public park land. Under our scope of work, we have been instructed not to account for the cost of No -Net -Loss in our analysis. • The market value opinions in this report include: • Value A - As Unimpaired by Environmental Remediation and No -Net Loss. An "As -If Clean Market Value", using a hypothetical condition, assumes that the environmental remediation of the Subject Property is not necessary and the contamination does not exist. • Value B - As Impaired by Environmental Remediation. An "As -Is Market Value" recognizes the site -specific development costs that would be expected to affect value by market participants, including, but not limited to, extraordinary site -specific development costs (on -site and off -site), environmental remediation costs for the Subject Property and the public park. • The steps taken to value the Subject Property are summarized as follows: • We requested items related to the valuation of the Subject, including legal description for the property, parcel block and lot identifiers, parcel or tax maps, prior appraisals conducted for the property, pro forma estimates, environmental reports and property condition or engineering reports, materials or analyses prepared in connection with the proposed re -development, etc.; • We gathered information regarding comparable vacant land sales, improved sales, and rents, and other MLS stadium deals. We also reviewed online sources and market publications such as CBRE, Costar, Cushman & Wakefield, Integra, JLL, Marcus & Millichap, PwC, Real Capital Analytics, Reis, Smith Travel Research, HVS, etc; • We examined economic and demographic indicators, planning and zoning information, and new articles when available; and • Consulted any relevant public records. HOULIHAN LOKEY 11 Introduction and Appraisal Premises cont.) Approaches to Value • In valuing the Subject Property, the sales comparison and income capitalization approaches were considered. A cost approach was not considered. The steps involved in each approach are described in the following paragraphs. Cost Approach • A cost approach was not applied in this analysis, as this approach does not reflect market behavior for vacant land. Sales Comparison Approach • A sales comparison approach was utilized to value the Subject Property. Adjustments were made to each comparable sale when necessary, so as to make each transaction more comparable to the Subject. Income Capitalization Approach • An income approach, also referred to as a Development Valuation Model (DVM), was applied and relied upon for the Subject, as the proposed development will be an income producing property. The Income Approach analysis considered the market analysis and the economic rental values of the various real estate components within the intended development program, but did not include revenue or expenses associated with the business value of the soccer team, including licensing and other non -realty revenue sources, as stated in the agreed -upon Scope of Work. Market or Economic Rent • In an appraisal, the term economic rent is sometimes used as a synonym for market rent. More precisely, economic rent refers to the amount of rent necessary to provide an adequate return on development costs. • In this case, the economic, market or ground rent is the amount paid for the right to use and occupy the land according to the terms of a ground lease. The economic rent has been estimated based on the opinion of value contained in this report. HOULIHAN LOKEY 12 Introduction and Appraisal Premises Conditions and Assumptions • When a value opinion is subject to extraordinary assumptions or hypothetical conditions, the appraiser will state them so their effect on the value opinion or conclusion is clear. • Extraordinary Assumption. An assumption that is 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 Subject Property such as market conditions or trends; or about the integrity of data used in an analysis. • There are extraordinary assumptions considered in our appraisal. Specifically, construction timeline estimates supplied or provided by the City or MFP were not independently verified, audited or corroborated by the appraiser. The $16.5 million cost to remediate the environmental impairment has been provided by the client. A one-year remediation timeline has been assumed. In addition, the appraisal does not consider the $20,000,000 contribution for the maintenance of a 58-acre public park, the $5,000,000 contribution for the Baywalk-Riverwalk Project, costs associated with the No -Net -Loss policy or extraordinary off -site development costs. • Hypothetical Condition. A condition assumed to be contrary to what exists but 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 Subject Property, such as market conditions or trends; or about the integrity of data used in an analysis. • There are hypothetical conditions considered in this report: • For purposes of our analysis, we have assumed in Scenarios A and B that the Property has received all necessary government approvals permitting immediate development of the Subject Property consistent with the proposed plan. • It is recognized that the Subject Property contains a substance and/or hazardous environmental material that will need to be removed from the site during development. The "As -If Clean Market Value" of the Subject Property was developed under the hypothetical condition that the property is not contaminated and therefore, excludes any cost and the time relative to remediation of the Subject Property. HOULIHAN LOKEY 13 1. Executive Summary Page 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Subject Property Location • The Subject Property consists of 73.5 acres owned by the City of Miami. The Property currently operates as an 18-hole golf course, known as the Miami International Links - Melreese Country Club. • The parcel is located at 1802 NW 37th Avenue, Miami, Miami -Dade County, FL 33125. The Subject is located to the East of the Miami International Airport and approximately five miles away from Downtown Miami and eight miles from Miami Beach. ■ The submarket that corresponds to the Property is the Miami Airport submarket. ▪ 'Hialeah {via hardens Lis Hialeah Hialeah Park Racing & Casino vx r ren:$e raw in:nzi Medley elWarer OuraI (s_a) Fontnincbteau University Park Olympia slwood Heights Aar,. �91 6 Cal Miami Springs Brmvnsville Minna Inlerinational Ca,mo Miami Airporl Weal Lillie River Giadevle Q Ali SS Westchester Wes, Miami Coral Terrace Tropical Park crA Omar Sense[ tieigln� P53 EaLl Rags °`.a rerair Navxrrn Carat Gablev yn UniMerskly of Miami Go :gle My Maps South Miami Pinewood 19.�n'. Miami Shores El PnAal w all �.vx7. Jringle island Marketplace " Dodge Island 4 Miami CORAL wAv ViUcaya ML:^,S 4n'I � iial�?€'rla Miami Rea MA FR11 Miami ri her Island Virginia Rey r^ Crandon Park Source: Map Data © 2019 Google HOULIHAN LOKEY 15 Subject Property Shape • The parcel is regular in shape. The site is generally flat and permits easy access in and out of the Subject Property. Accessibility • A new primary vehicular access to the Subject Property will be developed as a part of MFP plan. Currently, the primary vehicular access to the Subject is afforded by Road FLW-836 W. The main entrance to the Subject is located on NW 37th Avenue. Zoning • The parcels are identified using the following identification numbers: 01-3132-000-0080 and 01-3132-000-0090. • The zoning code is CS — Civic Space Zone. The Subject is public park land and subject to No -Net Loss Policy. Under our scope of work, we have been instructed not to account for the cost of no -net -loss in our analysis. Miami International Airport Source: Map Data © 2019 Google HOULIHAN LOKEY 16 Subject Property Environmental Impairment ■ The Subject Property is known to contain hazardous materials and/or substances that will require environmental remediation. The existing conditions diagnosed are arsenic and ash, based on information provided by SCS. ■ The anticipated remediation will need to comply with commercial/ industrial standards. ■ The client has instructed us to include $16.5 million of remediation costs in Scenario B. ■ It was assumed that the remediation would take one year prior to the commencement of construction. HOULIHAN LOKEY 17 1. Executive Summary 2. Subject Property Page 5 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Proposed development and lease provisions History1 • The City of Miami is the fee simple owner of an approximately 131.5 acres parcel. • The City seeks to partner with MFP to re -develop this parcel, leasing approximately 73.5 acres of land. • On July 18, 2018, the City Commission passed Resolution R-18-0309, authorizing the City Attorney to prepare an amendment to the City Charter for consideration at the election scheduled for November 6, 2018, proposing to authorize the City Commission to waive competitive bidding and by a four -fifths (4/5th) affirmative vote lease the Demised Property to MFP. • On November 6, 2018, the City's residents approved, by public referendum, the Charter Amendment with the expressed provision that the City would not be responsible for any environmental remediation costs. Terms and Conditions • The City and MFP included the following provisions in the initial Ground Lease and Master Development Agreement : • MFP would agree to develop a public park in the remaining 58 acres. • The initial term of the lease proposed will last thirty-nine (39) years following the Possession Date, and MFP would have the right to exercise two (2) options to extend the Term, each for thirty years.' ■ Annual rent is equal to the greater of:1 • Fair Market Value, • Five percent (5%) of Tenant Revenues, • $3,577,000 per year. ■ The Fair Market Value will be based on the highest and best use of the Demised Property taking into consideration the actual cost of environmental remediation for the Demised Property, the site development cost for the Public Park Parcel, and such other impositions and limitations on the use of the Demised Property consistent with the Uniform Standards of Professional Appraisal Practice.' Source: (1) Ground Lease and Master Development Agreement by and between City of Miami, a municipal corporation of the State of Florida and Miami Freedom Park, LLC. Version 1 Extracted from Miami Freedom Park website. HOULIHAN LOKEY 19 Proposed development Income generating developments Sq. Ft. (land area)1 • MLS Stadium Restaurants and Retail Hotel Full Service Hotel Limited Service • Tech Hub Parking Source: Inter Miami CF website Development by asset type (rentable area) Sq. Ft. Office1 400,000 Restaurants and Retail1 600,000 Hotel (Full & Limited Service)2 549,000 Source: (1) Ancillary Development Model provided by Miami Freedom Park (2) Houlihan Lokey estimation base on MDS, Section 87, page 2. HOULIHAN LOKEY 20 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 Economic Overview 22 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Economic Overview ■ We analyzed demographic and economic information as it relates to the interaction of the Miami real estate market's supply and demand. A property is an integral part of its surroundings and must not be treated as a completely independent entity. Economic, political and sociological forces all have significant influence on the value of a property. Population ■ The Miami MSA is one of the 12 largest metropolitan areas in the U.S. ■ Census information shows an increase in the population from 2010 to 2018 and projects steady growth thereafter. Florida Miami -Dade Population Estimates' as of April 1, 2019 21,208,589 Population Projections2 30, 000, 000 25, 000, 000 20, 000, 000 15, 000, 000 10, 000, 000 5,000 000• • 0 - April2020 April 2025 April 2030 April 2035 April 2040 April 2045 Miami -Dade Florida 2,802,426 Employment3 ■ Nonfarm employment as of July 2019: 2,699,800 ■ This is an increase of 2.4% over the previous year, and 0.9% of the national job count, as illustrated in the graph below. ■ Unemployment rate as of July 2019: 3.4% 12-Month Percent Changes in Employment 5.0 4.0 3.0 2.0 1.0 0.0 - 1.0 - 2.0 Aug 16 Source: (1) http://edr.state.fl.us/Content/population-demographics/data/2019 Pop Estimates.pdf (2) Population and Demographic Data. Office of Economic & Demographic Research. http://edr.state.fl.us/Content/index.cfm (3) For Miami -Fort Lauderdale -West Palm Beach. Bureau of Labor Statistics. U.S. Department of Labor. 2019 Aug 17 Aug 18 Miami area United States Aug 19 HOULIHAN LOKEY 23 Economic Overview 'font.) Base Economy • The Miami MSA is composed of Miami -Dade, Broward and Palm Beach counties. With more than six million residents, Miami ranks 8th among the largest metro areas in the U.S. • The City of Miami is located in Miami -Dade County. Tourism • Tourism is Florida's top economic driver. In 2018, Florida received an estimated 127 million visitors.' Miami -Dade County accounted for approximately 13% of the total visitors statewide. Miami International Airport • Although, the Miami International Airport was the 13th busiest airport in the U.S. in terms of total passengers, it was the 3rd busiest airport for international passengers after John F. Kennedy and Los Angeles International. • More than 45 million domestic and international passengers arrived or departed from the Airport in 2018.2 PortM iami • Miami's port is the busiest cruise port worldwide for both passenger traffic and cruise lines. • For fiscal year 2018, the Seaport handled approximately 5.59 million passengers. Source: (1) Visitflorida.org (2) Miami International Airport. U.S. and Worldwide Airport Rankings. Passengers & Freight. 2018. (3) U.S. Bureau of Labor Statistics. Miami, FL, Area Economic Summary. Updated October 11, 2019. Employment Distribution3 Miami ar r (number in thousands) Total nonfarm Mining and logging Construction Manufacturing Trade, transportation, and utilities Information Financial activities Professional and business services Education and health services Leisure and hospitality Other services Government Government Mining and togging _ 0% 12% Other services 5% —a Leisure and hospitality - 12'Vo Aug. 2019 _ construction 5% 2,725.8 0.7 141.7 91.8 606.9 50.1 187.7 461.3 417.0 327.6 126.7 314.3 Marmfacturiny 3% Trade, transportation. and utilities 22°! Information 2% _ Financial activities 7% Education and health services Professional and business services 15% 17% HOULIHAN LOKEY 24 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 Industry Specifics 25 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Industry Specifics Office: Demand vs Supply1 • According to CoStar, as of September 2019, Miami has seen a strong demand resulting in strong absorption and increased office rents. The office supply has also been increasing. Deliveries in Sq. Ft. Absorption it Sq. Ft. 751,000 366,000 Retail: details2 ■ Retail rent YoY3: 2.8% increase • Vacancy rate: 3.8%, has remained stable over the past four quarters. • There is 3.3 million Sq. Ft. currently underway, representing a 3% expansion of the existing inventory. Over the past three years, 3.4 million Sq. Ft. was delivered, representing a cumulative inventory expansion of 2.5%. 8.5% 2.1% Projected Vacancy Rates for the Miami Airport Submarket4 9.3% 9.2% 8.6% 8.4% 8.8% 1�1 3.2% 3.2% 3.5% 3.6% 3.7% Office - Miami Airport Retail - Miami Airport ■ 2019 ■ 2020 ■ 2021 2022 ■ 2023 Notes: (1) Office Market Report. Miami Market. CoStar. Created on October 3, 2019. (2) Retail Market Report. Miami Market. CoStar. Created on October 3, 2019. (3) YoY: Year over year (4) CoStar baseline forecast for the indicated year and geography. HOULIHAN LOKEY 26 Industry Specifics: Hospitality Historical Performance: STR for Miami Airport market for Upper Upscale/Upscale hotels 90% 88% 86% 84% 82% 80% 78% Historical Occupancy and ADR — Full Service Hotels (August YTD) 2013 2014 2015 2016 2017 2018 2019 Occupancy (%) — Average Daily Rate ("ADR") Historical Supply and Demand — Full Service Hotels (August YTD) 1,600,000 1,200,000 800,000 400,000 $145 $140 $135 $130 $125 $120 $115 2013 2014 2015 2016 2017 2018 2019 —0— Supply Demand 91.0% 90.0% 89.0% 88.0% 87.0% 86.0% 85.0% 84.0% 83.0% Historical Occupancy and ADR — Limited Service Hotels (August YTD) 2013 2014 2015 2016 2017 2018 2019 Occupancy (%) Average Daily Rate ("ADR") Historical Supply and Demand - Limited Service Hotels (August YTD) 800,000 600,000 400,000 200,000 2013 2014 2015 2016 2017 2018 2019 Supply Demand $140 $135 $130 $125 $120 $115 $110 $105 Source: STR Trend Report - Miami Airport/Civic Center, FL Tract - UpperUpscale/Upscale by Class - Full Service. Created October 09, 2019 HOULIHAN LOKEY 27 Industry Specifics - MLS Stadium US Interest in Soccer' U.S. Interest in Soccer by Age' • The percentage of people interested in soccer in the U.S. grew from 28% to 32% since 2013 to 2017. Some of the reasons behind this are: • Soccer is one of the top played youth sport in the country • Successive World Cup qualifications for the men team • U.S. women team is one of the most successful in international women soccer, winning four World Cup titles • Increase of Hispanic population • Increase on popularity of the FIFA video game U.S. Interest in Soccer by Income' 2d04 41% 40% of low income earners of medium income earners of high income earners Major League Soccer ("MLS") • The MLS is a soccer league regulated by the United State Soccer Federation, founded in 1996. • Number of teams playing: 24 • Expansion of teams: 29 (including the incorporation of Inter Miami CF) Source: (1) Nielsen Sports. World Football Report. 2018. (2) Forbes. Major League Soccer's Most Valuable Teams 2018: Atlanta United Debuts On Top • Larger interest from the younger population. Of ages 16-24 55.o Of ages 25-34 111111Mli 509,c Of ages 35-44 29% Of ages 45-54 Of ages 55-69 14°%: MLS' Most Valuable Teams 20182 Team Atlanta United LA Galaxy Seattle Sounders Value (in Revenue (in Operating millions) millions) Income (in millions) 330 47 320 63 310 52 -2 6 6 HOULIHAN LOKEY 28 Industry Specifics - MLS Stadium • Below is a review of other MLS Stadium deals for newer franchises: Team Inter Miami l') Minnesota United FC DC United Austin FC Orlando City SC FC Cincinnati Location Miami, FL St Paul, MN District of Columbia Austin, TX Orlando, FL Cincinnati, OH Number of Seats 25,000 19,500 20,000 20,000 25,500 26,000 Stadium Area (in Acres) 19.70 7.90 2019 8.96 2018 24.00 2021 NA 2017 NA 2021 Opening year TBD Funding Source Private Private and Public Private and Public Public Private Private and Public Stadium Construction Cost (in historical $) $267,300,000 $150,000,000 (Private Funding) $286,700,000 $207,500,000 $155,000,000 $212,500,000 Cost perseat(rounded) Government Funding $10,700 None $7,700 $14,300 $10,400 $6,100 $8,200 $16,100,000 $131,000,000 $207,500,000 Initially, the City was willing to provide $20,000,000 $40,000,000 for Improvements Land Owner City of Miami Metropolitan Council (regional government agency) District of Columbia City of Austin Team Team Annual Ground Lease Yes, with a minimum of $3,577,000 $1 annually and $2 per ticket sold until Year 11 $1 After the 35th anniversary of the Possession Date, the Lessee shall pay the District, annually, an amount equal to five percent (5%) of the fair market value of the improvements $550,000 commencing on Year 6 and continuing for the remainder of the term NA FC Cincinnati bought the land from the School Board for $25,000,000 Term of the Lease 30 years with the option to extend the Lease for 2 additional periods of 30 years each 52 years 30 years with the option to extend the Lease for 3 additional periods of 5 years each 20 years with the option to extend the Lease for up to 3 additional periods of 10 years each NA NA Tax Breaks No Yes Tax break until Year 6 and phased structure since then Yes NA NA • None of the lease terms and conditions are similar to the MFP proposal. • As proposed, MFP will be responsible for all real estate taxes without abatements. • MFP ground lease will incorporate, in addition to the stadium rental, 5.00% of the revenue from significant commercial development to the benefit of the City. • Out of the five stadiums surveyed, Orlando City Stadium is the only one without government funding. Notes: NA refers to not available. (1) The information shown above for Inter Miami - MFP Stadium and calculations are based on Ground Lease and Master Development Agreement by and between City of Miami, a municipal corporation of the State of Florida and Miami Freedom Park, LLC. Version 1 Extracted from Miami Freedom Park website. HOULIHAN LOKEY 29 Industry Specifics - MLS Stadium (cont.) • We also reviewed historical costs and financing structures for MLS stadiums in relation to public -private partnerships. • As could be viewed in the table below, conditions around public contribution for the developments, ground leases obligations and tax advantages vary for each case. (in historical $) Stadium BBVA Stadium Children's Mercy Park Providence Park (renovation) Red Bull Arena Talen Energy Stadium Rio Tinto Stadium Dick's Sporting Goods Park Team Houston Dynamo Sporting Kansas City Portland Timbers New York Red Bulls Philadelphia Union Real Salt Lake Colorado Rapids City, State Year Opened Seats Houston, TX 2012 22,039 Kansas City, KS 2011 18,467 Portland, OR 2011 18,000 Harrison, New Jersey 2010 25,000 Chester, PA 2010 18,500 Sandy, UT 2008 20,213 Commerce City, Cobrado 2007 18,061 Total Development Costs $101,100,000 $167, 500, 000 $37, 000, 000 $245, 000, 000 $122,100, 000 $110, 000, 000 $182, 500, 000 Cost of Development per seat $ 4,587 $ 9,070 $ 2,056 $ 9,800 $ 6,600 $ 5,442 $ 10,105 Public Funding $46, 600, 000 $147, 000, 000 $11, 900, 000 $85, 000, 000 $73, 000, 000 $45, 000, 000 $150,400,000 of Public Funding on Development Owner of the Costs 46% 88% 32% 35% 60% 41% 82% Land City Team City Town County City City Annual Ground Lease paid to Public Sector $65,000 $545,455 $875,000 $150, 000 $150, 000 $1 $1 Team Subject to Property Taxes No Yes No Yes No Yes Yes Min $11,900,000 32% $1 Max $150,400,000 88% $875,000 Mean $79, 842, 857 55% $255, 065 Median $73, 000, 000 46% $150, 000 Notes : (1) For the rent paid to public sector for the Sporting KC, the $545,455 is an annul payment from 2010-2021 as repayment for the $6 million land purchase. (2) For the rent paid to public sector for the Portland Timbers, after Year 8 the rent increases $25, 000 per year. (3) For the rent paid to public sector for the Colorado Rapids, there is an extra payment for $1.2 million annually for 10 years to re pay City Bonds.. Source: Cost -Benefit Analysis of the Soccer Stadium Development Act of 2014. The Robert Bobb Group, Conventions Sports CS&L Leisure, Integra Realty Resources. HOULIHAN LOKEY 30 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Valuation Methodology Approach to Value • In valuing the Real Property, each of the three generally accepted valuation methodologies were considered. They are the sales comparison, cost and income capitalization approaches. The steps involved in each approach are described in the following paragraphs. Sales Comparison Approach • In the sales comparison approach ("SCA"), the appraiser develops an opinion of value by comparing the property being valued to similar properties that have been sold within a reasonable period from the Valuation Date, applying appropriate units of comparison, and making adjustments to the sale prices of the comparable market transactions based on the elements of comparison. After reconciling these results, the market value via the sales comparison approach is estimated as of the Valuation Date. Cost Approach • In applying the cost approach to value, the appraiser must first estimate the replacement cost new of the assets. The RCN estimates are based on replacing the Real Property with assets of equal utility and functionality. • In applying the cost approach method, the appraiser generally obtains current RCN estimates from generally accepted real estate cost guides such as Marshall & Swift. Accordingly, the RCN estimates include all applicable direct and indirect costs. • Once RCN estimates are determined, the appraiser estimates appropriate allowances for depreciation based on the effective age of the assets relative to the expected physical lives and conditions of the assets. They would then calculate the physical depreciation based on this information using the age/life depreciation method. The formula for this calculation, in its simplest form, is as follows: Effective Age Physical Life x 100 = Percent of Physical Depreciation Effective Age - defined as the apparent age of a property when compared with a new property of like kind • Land value is subsequently added to RCNLD estimates to ascertain overall value. HOULIHAN LOKEY 32 Valuation Methodology Income Capitalization Approach ■ The income capitalization approach measures the property's capacity to generate future benefits and capitalizes the income into an indication of value. The principal of anticipation is fundamental to the approach. Using the income capitalization approach, a net operating income (or net cash flow) from real estate operations is either capitalized by an appropriate rate of return (if one year's net operating income), or a forecast of net cash flows is projected over an appropriate investment horizon with an assumed sale at the end. The resulting present value of the future cash flow stream represents an indication of value. The technique used is dependent on the characteristics of the asset and the method investors use to value them. Applicability of Approaches • The applicability of the approaches used can differ due to a number of variables. In selecting the appropriate approaches, the quality and quantity of data in each approach are considered, along with the relevance of each to the property or properties, as well as the intended use of the valuation. In order to determine the fair value of the Subject Property, the sales comparison approach and the income capitalization approach (DCF) were used as the primary indicators of value. A cost approach was not applied in this analysis, as this approach does not reflect market behavior for vacant land. • After reconciling the value from the sales comparison and income capitalization approaches, we then used the rent multiplier method to determine the market rent for the Subject Property. HOULIHAN LOKEY 33 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 Sales Comparable Approach 34 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Sale Comparison Approach • The Sales Comparison Approach is a method of estimating fair market value whereby a subject property is compared with similar properties that have sold recently. • For this analysis, we researched land sales in the Miami area that transacted between 2016 and 2019. The comparable sales selected possess a similar highest and best use (i.e. as no residential density is contemplated under the intended use under the lease). • Our investigation of the market uncovered several transactions within the Subject's regional market area. In estimating the value for the Subject Property via the Sales Comparison Approach, we have employed the price per Sq. Ft. as the unit reference of value. This method utilizes an analysis of the sales and concludes to an adjusted value per Sq. Ft.. This is then applied to the Subject Property's total square footage in order to derive an estimate of value. ■ Details pertaining to these sales can be found below, as well as in the Appendices section of this report. Details on Sales Comparison Properties Address City Non Adjusted Non Adjusted ST Submarket Date of Sale Sale Price Size (Acres) Size (Sq. Ft.) Sales Price/Acre Non Adjusted Sales Price Per SF Subject Property 1802 NW 37th Ave Miami FL Miami Airport Sale 1 Sale 2 Sale 3 Sale 4 SW 88th St 7777 NW 41st St 13350 NW 17th St 1620 NW 215th St Miami Doral Doral Miami Gardens FL Kendall FL Miami Airport FL Doral FL Miami Gardens NA NA Dec-17 Dec-17 Jul-16 Nov-16 $41,840,000 $40,268,000 $31,098,500 $26,500,000 73.5 3,201,660 70 24 30 61 3,040,488 1,032,372 1,321,610 2,657,160 $599,427 $1,699,072 $1,025,000 $434,426 $14 $39 $24 $10 Min Max Mean Median $434,426 $1,699,072 $939,481 $812,213 $10 $39 $22 $19 HOULIHAN LOKEY 35 Sale Comparison Approach Adjustment to Sales • Sale 1: SW 88th St. • We adjusted the price per Sq. Ft. upward to account for : 1) The inferior location of this property compared to our Subject Property, considering the highest and best use proposed. 2) The appreciation in the market since its date of sale (December 2017). • Sale 2: 7777 NW 41st St. • We adjusted the price per Sq. Ft. upward to account for: the appreciation in the market since its date of sale (December 2017). • We adjusted the price per Sq. Ft. downward to account for: 1) The conditions of the sale. The property was fully leased to the seller on a short-term basis after the sale and also, the improvements were set to be demolished. We assumed the demolition cost to be approximately $1 million and the lease back has a value of $5 million. Both amounts were deducted from the original sale price to arrive at an effective sale price. 2) The smaller size of the property compare to the Subject. • Sale 3: 13350 NW 17th St. • We adjusted the price per Sq. Ft. upward to account for: the appreciation in the market since its date of sale (July 2016). • We adjusted the price per Sq. Ft. downward to account for: the smaller size of the property compared to the Subject. • Sale 4: 1620 NW 215th St. • We adjusted the price per Sq. Ft. upward to account for: the appreciation in the market since its date of sale (November 2016), and the inferior location compared to the Subject. Reconciliation • The greatest weight is given to Sale 3 (13350 NW 17th St.), which required the least overall adjustment, and secondary weight was given to Sale 1 (SW 88th St.). HOULIHAN LOKEY 36 Sale Comparison Approach `cont.) Sales Comparison Adjustment Grid Location City Submarket Sale price Site Size (Acres) Site Size (Square Feet) Sales price per SF Terms of sale characteristics Property rights conveyed Financing terms Conditions of sale Date of sale (market conditions) Adjusted sale price Location/Physical Adjustments Location Shape/Topography Access/Frontage Site Size (Square Feet) Zoning/ Use Total Adjusted sale price Subject Sale No. 1 Adj. Sale No. 2 Adj. Sale No. 3 Adj. Sale No. 4 Adj. 1802 NW 37th Ave Miami Miami Airport NA 73.50 3,201,660 SW 88th St Miami Kendall $41.840,000 69.80 3,040.488 $13.76 7777 NW 41st St Doral Miami Airport $36,268,000 1 23.70 1,032,372 $35.13 13350 NW 17th St Miami Doral $31,098,500 30.34 1,321,610 $23.32 1620 NW 215th St Miami Gardens Miami Gardens $26,500,000 61.00 2,657,160 $9.97 Fee Simple Similar to Subject = Similar to Subject = Similar to Subject = Similar to Subject = Market Similar to Subject = Similar to Subject = Similar to Subject = Similar to Subject = Normal Similar to Subject = Superior to Subject - Similar to Subject = Similar to Subject = - Dec-17 + Dec-17 + Jul-16 + Nov-16 + $15 $37 $26 $11 Average Inferior to Subject + Similar to Subject = Similar to Subject = Inferior to Subject + Rectangular / Level Similar to Subject = Similar to Subject = Similar to Subject = Similar to Subject = Average Similar to Subject = Similar to Subject = Similar to Subject = Similar to Subject = 3,201,660 3,040.488 = 1,032,372 - 1,321,610 - 2,657,160 = Commercial Similar to Subject = Similar to Subject = Similar to Subject = Similar to Subject = Sales Comparison Value Conclusion $18 $32 Minimum Adjusted Sale Price (rounded): Maximum Adjusted Sale Price (rounded): Mean Adjusted Sale Price (rounded): Median Adjusted Sale Price (rounded): $13.00 $32.00 $21.00 $20.00 Concluded Land Value per Square Foot: $20.00 Indicated value $64,033,200 Concluded Land Value (Rounded): $64,000,000 $22 $13 Notes: (1) The improvements on the land were set to be demolished after the transaction, and the land was fully leased to the seller on a short-term basis. Both factors are reflected in the effective Sale Price presented in the table. HOULIHAN LOKEY 37 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 Income Capitalization Approach 38 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Income Capitalization Approach • An Income Capitalization Approach, also referred to as a Development Valuation Model ("DVM"), was applied and relied upon for the Subject Property, as the proposed development will be an income producing property. There are numerous objective and subjective data inputs used in the model to construct a value estimate with this approach. • The Income Approach considered the market analysis and the economic rental values of the various real estate components within the intended development program. Assumptions Summary of Assumptions Property Name Address City, State Miami Freedom Park 1802 NW 37th Ave, Miami, FL 33125 Miami, FL Site Descri •tion Site Area ( Acres) Site Area (Square Feet) Topography: 73.50 3,201,660 Level at Street Grade Frontage: Access: Site Visibility: Good Good Good Leasin• Assum•tions Office Total Sq. Ft. Office Rent NNN/Sq. Ft. Lease term Stabilized Occupancy Tenant Improvements Leasing Commissions 400,000 $26/Sq. Ft. 10 years 95% $20 2.5% Retail/Entertainment/Restaurant Total Sq. Ft. Retail Rent NNN/Sq. Ft. Lease term Stabilized Occupancy Tenant Improvements Leasing Commissions 600,000 $35/Sq. Ft. 10 years 95% $20 2.5% Hotel Assum•tions Full Service Total Rooms Stabilized Occupancy Year 1 ADR 0 eratin• Mar•in • Discount Rate Terminal Capitalization Rate Rent Multiplier Return on Stadium Investment Selling Expense Limited Service 500 Total Rooms Stabilized Occupancy Year 1 ADR O•eratin• Mar•in 75% $275 29% 8.50% 6.50% 6.00% 6.00% 2.00% Rate Assum•tions Rent Growth Rate Expense Growth Rate 250 75% $175 31% 2.50% 2.50% HOULIHAN LOKEY 39 Income Capitalization Approach cont.) Assumptions • In addition to the assumptions for retail, office and hotel space, our analysis takes into consideration income from the stadium rental. Comparable stadium rentals without government assistance were not discovered during our research. • The stadium rent was assumed equal to a rate of return on the cost of improvements that were allocated to the stadium. • As a proxy to the rate of return for the stadium, we considered a rate between: (1) an average for the coupon rates of municipal bonds issued to finance stadiums, which has implied the issuers lower risk profile, and (2) an average return of high -yield bonds, which has implied a higher risk profile to represent the fact that MFP's private developer will have a higher risk profile in comparison to a municipality and slightly lower that high yield bonds. • The table below displays a 6 percent return as the concluded return on a risk adjusted basis. • The stadium rent was calculated based on a 6 percent return on the cost of improvements that were allocated to the stadium. Municipal Bonds Comparables Purpose No. Issuer Date Issued Coupon Rate Maturity 1 City of Gastonia, North Carolina Taxable Limited Obligation Bonds (Downtown Multi Purpose Stadium Project) October-19 3.46% June39 2 Economic Development Authority Of The City Of Fredericksburg, VA Revenue Bonds (Fredericksburg Stadium Project) Taxable July-19 7.00% September-44 3 City Of Fayetteville, North Carolina Taxable Limited Obligation Bonds (Stadium Project) June-19 3.93% June-38 4 NFaryland Stadium Authority Sports Facilities Lease Revenue Bonds (Football Stadium Issue) May-19 5.00% March-26 5 Louisville/Jefferson County Metro Government, Kentucky Tax -Exempt General Obligation Bonds (Butchertown Stadium District Redevelopment Project) November-18 3.85% December-30 6 City Of Wichita, Kansas Sales Tax Special Obligation Revenue Bonds (River District Stadium Star Bond Project) November-18 4.00% September-38 7 City Of Fayetteville, North Carolina Taxable Limited Obligation Bonds (Stadium And Parking Deck Project) June-18 4.24% June-38 8 Clark County, Nevada General Obligation (Limited Tax) Stadium Improvement Bonds (Additionally Secured With Pledged Revenues) May-18 5.00% May-48 Ave rage Median 4.56% 4.12% High Yield Bonds -Avg. Clearing Yield 6.26% Ave rage Median 5A1% 5.19% Concluded Rate 6% HOULIHAN LOKEY 40 Income Capitalization Approach Office Lease Comps • The table below displays the office lease comparables took into consideration to determine a market rent. • It has been concluded a $26.00 per Sq. Ft. as office market rent for the office component of the Subject Property. Lease Comparables No. Address City/State Date Leasable SF Rent PSF Lease Term Expense Basis 1 1 Alhambra Plz Coral Gables, FL Sep-18 9,422 $31.81 5.00 NNN 2 1450 NW 87th Ave Doral, FL Oct-18 2,446 $27.00 3.00 NNN 3 2500 NW 79th Ave Doral, FL Jun-18 2,501 $24.52 3.00 NNN 4 800 Waterford Way Miami, FL Asking 26,014 $32.00 NA NNN 5 790 Waterford Way Miami, FL Asking 16,304 $27.00 NA NNN 6 701 Waterford Way Miami, FL Asking 16,304 $27.00 NA NNN 7 703 Waterford Way Miami, FL Asking 18,300 $28.00 NA NNN 8 703 Waterford Way Miami, FL Asking 10,726 $26.00 NA NNN 9 657 South Dr Miami Springs, FL Asking 6,000 $22.00 10.00 NNN 10 777 NW 72nd Ave Miami, FL Asking 5,000 $28.00 NA NNN Average Median $27.33 $27.00 Concluded Market Rent Source: (1) Lease comparables were sourced from CoStar and LoopNet. Notes: "NNN" refers to Triple Net Lease. $26.00 HOULIHAN LOKEY 41 Income Capitalization Approach Retail Lease Comps • The table below displays the retail lease comparables took into consideration to determine a market rent. • It has been concluded a $35.00 per Sq. Ft. as retail market rent for the retail component of the Subject Property. Lease Comparables No. Address City/State Start Date Leasable SF Rent PSF Lease Term (Yrs) Expense Basis 1 1547-1561 SW 8th St Miami, FL Feb-18 1,650 $35.00 5.00 NNN 2 2640-2650 NW 5th Ave Miami, FL May-19 2,100 $32.00 3.00 NNN 3 3701 NW 7th St Miami, FL Feb-18 4,500 $35.00 NA NNN 4 741-899 NW 37th Ave Miami, FL Asking 1,400 $32.00 NA NNN 5 860 NW 42nd Ave Miami, FL Asking 6,453 $40.00 NA NNN 6 1 Curtiss Ply Miami, FL Asking 28,000 $38.00 NA NNN Ave rage Median $35.33 $35.00 Concluded Market Rent Source: (1) Lease comparables were sourced from CoStar and LoopNet. Notes: "NNN" refers to Triple Net Lease. $35.00 HOULIHAN LOKEY 42 Income Capitalization Approach: Scenario A Discounted Cash Flow Analysis ($ in actuals) For the Years Ending Forecast Forecast Forecast Forecast Forecast Forecast Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Sep-20 Sep-21 Sep-22 Sep-23 Sep-24 Sep-25 Forecast Forecast Forecast Forecast Forecast Year 7 Year 8 Year 9 Year 10 Year 11 Sep-26 Sep-27 Sep-28 Sep-29 Sep-30 Rental Revenue Potential Base Rent Absorption & Turnover Vacancy Scheduled Retail Base Rent Scheduled Office Base Rent Total Rental Revenue Other Tenant Revenue s Total Parking Revenue Total Other Tenant Revenue Total Tenant Revenue Other Revenue x Total Hotel Revenue Total Stadium Revenue Total Other Revenue Potential Gross Revenue General Vacancy Allowance Vacancy Allowance Total Vacancy Allowance Effective Gross Revenue 7,850,000 16,092,500 22,010,594 31,014,450 34.659,725 35.526,218 7,850,000 16,092,500 7,564,500 10,898,133 7.296,203 2.941,661 11,031,563 15,076,469 20.475,729 23.759,572 - - 3,414,531 5,039,848 6.887,792 8.824,984 14,446,094 20,116,317 27.363,522 32.584,557 3,232,810 3,313,630 4.317,184 4.425,113 3,232,810 3,313,630 4.317,184 4.425,113 17,678,904 23,429,947 31.680,705 37.009,670 13,752,552 16,445,760 18,060,969 18,563,212 19,232,378 19,713,188 20,206,017 20,711,168 32,984,930 36,158,948 38,266,986 39,274,380 36.414,373 37,324,733 38,257,851 39,214,297 40,194,655 24.353,562 24,962,401 25,586,461 26,226,122 26,881,775 10.854,730 12,362,332 12,671,390 12,988,175 13,312,879 35.208,292 37,324,733 38,257,851 39,214,297 40,194,655 4.535,741 4,649,135 4,765,363 4,884,497 5,006,610 4.535,741 4,649,135 4,765,363 4,884,497 5,006,610 39.744,033 41,973,867 43,023,214 44,098,795 45,201,264 18.975,305 19,449,688 19,935,930 20,490,313 20,945,186 21.228,947 21,759,671 22,303,662 22,861,254 22,861,254 40.204,252 41,209,358 42,239,592 43,351,567 43,806,440 50,663,834 59,588,895 69.947,691 76.284,050 79.948,285 83,183,226 85,262,806 87,450,361 89,007,705 - $ $ 50,663,834 $ 59,588,895 1.206,081 1,866,237 1,912,893 1,960,715 2,009,733 1.206,081 1,866,237 1,912,823 1,960,715 2,009,733 $ 69.947,691 $ 76.284,050 $ 78.742,204 $ 81,316,989 $ 83,349,914 $ 85,489,646 $ 86,997,972 Asset Expenses 4 Management Fee Replacement Reserves Total Asset Expenses Net Operating Income Leasing Costs Tenant Improvements Leasing Commissions Total Leasing Costs Cash Flow Before Capital Expenditures Capital Expenditures Construction Costs Total Capital Expenditures Total Capital Costs 1,519,915 1,013,277 2,533,192 1,787,667 1,191,778 2,979,445 48,130,642 56,609,450 8,500,000 3,100,000 361,152 132,727 8,861,152 3,232,727 - $ $ 39,269,490 $ 53,376,723 2,098,431 1.398,954 3,497,385 2,288,521 1.525,681 3.814,202 66.450,307 72.469,847 3,800,000 168,607 3,968,607 2,600,000 113,424 2,713,424 2,362,266 1.574,844 3,937,110 2,439,510 1,626,340 4,065,849 74.805,094 77,251,140 1,200,000 45,228 1,245,228 800,000 30,906 830,906 2,500,497 1,666,998 4,167,496 2,564,689 1,700,793 4,274,482 2,609,939 1,739,959 4,349,899 79,182,418 81,215,164 82,648,073 $ 62.481,699 $ 69.756,423 $ 73.559,866 $ 76,420,234 $ 79,182,418 $ 81,215,164 $ 82,648,073 347,777.500 347,777.500 29,750,000 54,750,000 25.000,000 347,777.500 347,777.500 29,750,000 54,750,000 25.000,000 347,777.500 347,777.500 29,750,000 54,750,000 25.000,000 Cash Flows (CF) $ (347,777,500) $ (347,777,503) $ 9,519,490 $ (1,373,277) $ 37.481,699 $ 69.756,423 $ 73.559,866 $ 76.420,234 $ 79,182,418 $ 81,215,164 $ 82,648,073 The presented Discounted Cash Flows follow the Construction Timeline presented in the Ancillary Development Model provided by Miami Freedom Park. The Construction Timeline can be found in the appendices of this report. Notes: (1) We have assumed the rent for the office and retail spaces are triple net leases, and all operating expenses will be reimbursed. (2) Revenue attributed to the parking areas, hotels and stadium is net of operating expenses. (3) We have assumed a general vacancy allowance of 5 percent. (4) We have estimated management fee to be 3 percent of effective gross revenue and replacement reserves to be 2 percent of gross revenue. HOULIHAN LOKEY 43 Market Survey Information - Terminal Capitalization Rates ■ The table below displays the terminal capitalization rates published by various real estate market publications for office, retail and net lease properties. ■ I have concluded to a terminal capitalization rate of 6.50 percent. Residual Capitalization Rates PwC RE Investor Survey (3Q 2019) Office National CBD Office Market National Suburban Office Market Southeast Florida Office Market Retail National Power Center Market National Strip Shopping Center Market Net Lease National Net Lease Low High Average 5.00% 5.25% 4.50% 7.50% 9.50% 10.50% 5.91% 7.10% 7.32% 5.25% 8.00% 6.40% 4.75% 10.00% 6.98% 6.00% 10.00% 7.45% Average 5.13% 9.25% 6.86% RERC (2Q 2019) Office National CBD Office Market National Suburban Office Market Miami CBD Office Market (First Tier) Miami Suburban Office Market (First Tier) Retail 5.50% 7.00% 6.30% 6.00% 8.00% 7.40% 6.50% 7.30% National Power Center Retail (First Tier) 7.10% 7.90% 7.50% National Neighborhood/Community Retail (First Tier) 6.00% 7.20% 6.50% Miami Power Center Retail (First Tier) 7.60% Miami Neighborhood/Community Retail (First Tier) 6.80% Average 6.15% 7.53% 6.99% HOULIHAN LOKEY 44 Market Survey Information - Discount Rates ■ The table below displays the discount rates published by various real estate market publications for office, retail and net lease properties. ■ Based on the risk profile of the Subject, I have concluded to a discount rate of 8.50 percent. Discount Rate (IRR) PwC RE Investor Survey (3Q 2019) Office National CBD Office Market National Suburban Office Market Southeast Florida Office Market Retail National Power Center Market National Strip Shopping Center Market Net Lease National Net Lease Low High Average 5.25% 10.00% 6.86% 6.00% 11.00% 7.63% 6.00% 11.00% 8.34% 5.50% 9.00% 7.06% 5.50% 11.00% 7.81% 5.00% 10.00% 7.38% Average 5.54% 10.33% 7.51% RERC (2Q 2019) National CBD Office Market National Suburban Office Market Miami CBD Office Market (First Tier) Miami Suburban Office Market (First Tier) Retail 6.50% 8.00% 7.30% 7.00% 8.50% 7.90% 7.40% 8.20% National Power Center Retail (First Tier) 7.70% 8.50% 8.30% National Neighborhood/Community Retail (First Tier) 6.30% 7.50% 7.00% Miami Power Center Retail (First Tier) 8.40% Miami Neighborhood/Community Retail (First Tier) 7.40% Average 6.88% 8.13% 7.74% HOULIHAN LOKEY 45 Income Capitalization Approach: Scenario A Discounted Cash Flow Analysis • The table below displays the Present Value of the Cash Flows under Scenario A. • The concluded value of $55 million shown in the table below is based on the application of a 8.50 percent discount rate to the cash flows of the 10-year holding period and a 6.50 percent terminal capitalization rate to the Year 11 cash flows shown on the previous slide. ($ in actuals) For the Years Ending Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Sep-20 Sep-21 Sep-22 Sep-23 Sep-24 Sep-25 Sep-26 Sep-27 Sep-28 Sep-29 Sep-30 Cash Flow Before Capital Expenditures - $ - $ 39,269,490 $ 53,376,723 $ 62,481,699 $ 69,756,423 $ 73,559,866 $ 76,420,234 $ 79,182,418 $ 81,215,164 $ 82,648,073 Capital Expenditures Construction Costs Total Capital Expenditures Total Capital Costs 347,777,500 347,777,500 347,777,500 347,777,500 347,777,500 347,777,500 29,750,000 54,750,000 29,750,000 54,750,000 25,000,000 - 25,000,000 - 29,750,000 54,750,000 25,000,000 - Cash Flows (CF) $ (347,777,500) $ (347,777,500) $ 9,519,490 $ (1,373,277) $ 37,481,699 $ 69,756,423 $ 73,559,866 $ 76,420,234 $ 79,182,418 $ 81,215,164 $ 82,648,073 PV of CF PV of CF after CapEx $ - $ Terminal Value (Exit Cap Rate 6.5%) $ 1,271,508,820 Terminal Value after Selling Expenses (2%) $ 1,246,078,644 - $ 30,744,402 $ 38,515,271 $ 41,553,168 $ 42,756,857 $ 41,555,907 $ 39,789,681 $ 37,998,033 $ 35,920,282 $ 551,122,410 $ (347,777,500) $ (347,777,500) $ 994,402 $ (16,234,729) $ 16,553,168 $ 42,756,857 $ 41,555,907 $ 39,789,681 $ 37,998,033 $ 35,920,282 $ 551,122,410 Total PV of CF after CapEx: $55,000,OOO1 Notes: (1) We have used a terminal capitalization rate of 6.50 percent and a discount rate of 8.50 percent. (2) We have used multipliers ranging from 5 percent to 7 percent to come to the concluded market rent of land. This range is based on capitalization rates published by market surveys as well as rates seen in comparable sales. (3) Any discrepancies are due to rounding. HOULIHAN LOKEY 46 Income Capitalization Approach: Rent Multiplier • To determine the annual rent, we applied a capitalization rate, which becomes a multiplier in this instance, to create the link between value and income (Rate x Value = Income). It also represents the percent return that a developer would require. • To select this level of return, we considered, on the lower -end, different investment alternatives, such as U.S. Bonds or Notes as well as more high risk options such as an average for High Yield Bonds.' • On the higher -end, we considered capitalization rates for different income generating property types, which represent the relationship between net operating income and the asset value. • After applying the 6 percent defined multiplier to the cash flows from the Discounted Cash Flow scenarios presented in the following slides, we arrived at a market annual ground rent. 10% 6% 4% 2% 0% ■ 30-Year T-Note 1 High Yield Bonds - Avg. Clearing Yield 1 Cap Rate Office - SouthEast Florida 1 Multiplier Comparison 30-Year T-Note High Yield Bonds - Avg. Clearing Yield Cap Rate Office - SouthEast Florida Cap Rate Retail - National Cap Rate Hotel - Full Service Cap Rate Hotel - Limited Service Midscale & Economy Cap Rate Triple Net Lease - CVS West Palm Beach, FL 2.06% 6.26% 2 6.91% 3 6.77% 4 7.43% 5 9.15% 6 6.00% Minimum Maximum Median Mean 2.06% 9.15% 6.77% 6.37% 1 1 Cap Rate Retail Cap Rate Hotel -Cap Rate Hotel - Cap Rate Triple - National Full Service Limited Service Net Lease - CVS Midscale & West Palm Economy Beach, FL Source: (1) Information extracted for Bloomberg terminal con October 19th, 2019. (2) Information extracted from 3Q19 PwC Real Estate Investor Survey for Southeast Florida Office Market, Overall Cap Rate Average. (3) Information extracted from 3Q19 PwC Real Estate Investor Survey for National Strip Shopping Center Market, Overall Cap Rate Average. (4) Information extracted from 3Q19 PwC Real Estate Investor Survey for National Full -Service Lodging Segment, Overall Cap Rate Average. (5) Information extracted from 3Q19 PwC Real Estate Investor Survey for National Limited -Service Lodging Segment, Overall Cap Rate Average. (6) Information extracted from The Boulder Group, website. Multiplier used HOULIHAN LOKEY 47 Income Capitalization Approach: Scenario A Market Ground Rent Indication ■ I have estimated the annual market rent of the underlying land to be between 5% and 7% of the total value of the Subject Property. ■ The percentage rent, which is defined as 5 percent of net tenant revenues, exceeds our concluded market rent of $3.300 million and the minimum rent of $3.577 million in Year 6 of the cash flows (Year 4 after occupancy). ■ A complete schedule of the anticipated rent can be found in the appendices of this report. ($ in thousands) Low Mid High Present Value of Cash Flows 1 $55,000 Year 1 Market Rent of Land (rounded) 2 $2,750 $3,300 $3,850 Percent of Revenue (Year 4 after Occupancy) $3,814 Minimum Rent $3,577 Notes: (1) We have used a terminal capitalization rate of 6.50 percent and a discount rate of 8.50 percent. (2) We have used multipliers ranging from 5 percent to 7 percent to come to the concluded market rent of land. This range is based on capitalization rates published by market surveys as well as rates seen in comparable sales. (3) Any discrepancies are due to rounding. HOULIHAN LOKEY 48 Income Capitalization Approach: Scenario B Discounted Cash Flow Analysis ($ in actuals) For the Years Ending Forecast Year 0 Seo-20 Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Seo1 Seo-22 Seo-23 Seo124 Seo-25 Seo-20. Seo127 Seo-28 Sea9 se9-30 sepal Rental Revenue Potential Base Rent Absorption & Turnover Vacancy Free Rent Scheduled Retail Base Rent .1 Scheduled Office Base Rent Total Rental Revenue Other Tenant Revenue 2 Total Parking Revenue Total Other Tenant Revenue Total Tenant Revenue Other Revenue z Total Hotel Revenue Total Stadium Revenue Total Other Revenue Potential Gross Revenue General Vacancy Allowance a Vacancy Allowance Total Vacancy Allowance Effective Gross Revenue 7,850,000 16.092,500 22,010,594 31,014.450 34,659,725 35.526,218 36,414,373 37,324,733 38,257,851 39,214,297 40,194,655 7,850,000 16.092,500 7,564,500 10,896.133 7,296,203 2.941,661 - - - - - 11,031,563 15,076.469 20,475,729 23.759,572 24,353,562 24,962,401 25,586,461 26,226,122 26,881,775 3,414,531 5,039.848 6,887,792 8.824,984 10,854,730 12,362,332 12,671,390 12,988,175 13,312,879 14,446,094 20,116.317 27,363,522 32.584,557 35,208,292 37,324,733 38,257,851 39,214,297 40,194,655 3,232,810 3,313.630 4,317,184 4.425,114 4,535,741 4,649,135 4,765,363 4.884,497 5,006,610 3,232,810 3,313.630 4,317,184 4.425,114 4,535,741 4,649,135 4,765,363 4.884,497 5,006,610 17,678,904 23,429.947 31,680,706 37.009,670 39,744,034 41,973,868 43,023,214 44,098,795 45,201,265 13,752,552 16,445.760 16,060,969 18.563,212 18,975,305 19,449,688 19,935,930 20,490,313 20,945,186 19,232,378 19,713.188 20,206,017 20.711,168 21,228,947 21,759,671 22,303,662 22,861,254 22,861,254 32,964,930 36,156.948 36,266,986 39.274,380 40,204,252 41,209,358 42,239,592 43,351,567 43,806,440 50,663,834 59,586.895 69,947,691 76.284,050 79,948,286 83,183,226 85,262,807 87,450,361 89,007,705 1,206,081 1,866,237 1,912,893 1.960,715 2,009,733 - - - - 1,206,081 1,866,237 1,912,893 1.960,715 2,009,733 $ 50,663,834 $ 59,586.895 $ 69,947,691 $ 76,284,050 $ 78,742,204 $ 81,316,989 $ 83,349,914 $ 85,489,646 $ 86,997,972 Asset Expenses Management Fee Replacement Reserves Total Asset Expenses Net Operating Income Leasing Costs Tenant Improvements Leasing Commissions Total Leasing Costs Cash Flow Before Capital Expenditures 1,519,915 1,787.667 2,098,431 2.288,521 2,362,266 2,439,510 2,500,497 2.564,689 2,609,939 1,013,277 1,191.778 1,398,954 1,525,681 1,574,844 1,626,340 1,666,998 1.709,793 1,739,959 2,533,192 2,979.445 3,497,385 3.814,202 3,937,110 4,065,849 4,167,496 4.274,482 4,349,899 48,130,642 56,609.450 66,450,307 72.469,847 74,805,094 77,251,140 79,182,418 81,215,164 82,648,073 8,500,000 3,100.000 3,600,000 2,600,000 1,200,000 800,000 361,152 132.727 168,607 113,424 45,228 30,906 8,861,152 3,232.727 3,968,607 2.713,424 1,245,228 830,906 - $ 39,269,490 $ 53,376.723 $ 62,481,699 $ 69,756,424 $ 73,559,866 $ 76,420,234 $ 79,182,418 $ 81,215,164 $ 82,648,073 Capital Expenditures Construction Costs - 347,777,500 347,777,500 29,750,000 54,750.000 25,000,000 Remediation Costs ` 16,500,000 Total Capital Expenditures 16,500,000 347,777,500 347,777,500 29,750,000 54,750.000 25,000,000 Total Capital Costs 16,500,000 347,777,500 347,777,500 29,750,000 54,750.000 25,000,000 Cash Flows (CF) $ (16,500,000) $ (347,777.500) $ (347.777,500) $ 9,519,490 $ (1,373,277) $ 37,481,699 $ 69,756,424 $ 73,559,866 $ 76,420,234 5 79,182,418 $ 81,215,164 $ 82,648,073 The client has instructed us to include $16.5 million of remediation costs. It was assumed that the remediation would take a year (Year 0). Notes: (1) We have assumed the rent for the office and retail spaces are triple net leases, and all operating expenses will be reimbursed. (2) Revenue attributed to the parking areas, hotels and stadium is net of operating expenses. We have assumed a general vacancy allowance of 5 percent. (4) We have estimated management fee to be 3 percent of effective gross revenue and replacement reserves to be 2 percent of gross revenue. We have received an estimate of $16.5 million for the site remediation costs from the client. This cost and time has been incorporated in our analysis. (3) (5) HOULIHAN LOKEY 49 Income Capitalization Approach: Scenario B Market Ground Rent Indication • The table below displays the Present Value of the Cash Flows under Scenario B. • The concluded value of $38 million shown in the table below is based on the application of a 8.50 percent discount rate to the cash flows of the 10-year holding period and a 6.50 percent terminal capitalization rate to the Year 11 cash flows shown on the previous slide. • This includes $16.5 million for site remediation costs, which have been provided by the client. ■ It was assumed that the remediation would take a year. ($ in actuals) Forecast Year 0 For the Years Ending eo-20 Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Seo-21 Seo-22 Seo-23 Seo-24 $eo-25 Seo-26 Seo-27 Seo-28 Seo-29 ;,eo-30 Seo-31 Cash Flow Before Capital Expenditures Capital Expenditures Construction Costs Remediation Costs " Total Capital Expenditures Total Capital Costs - $ - $ 39.269,490 $ 53,376,723 $ 62,481,699 $ 69,756,424 $ 73,559,866 $ 76,420,234 $ 79,182,418 $ 81,215,164 $ 82,648,073 347,777.500 16,500,000 16,500,000 347,777.500 16,500,000 347,777.500 347,777.500 29.750,000 347,777.500 29.750,000 347,777.500 29.750,000 54,750,000 25,000,000 54,750,000 25,000,000 54,750,000 25,000,000 Cash Flows (CF) $ (16,500,000) $ (347,777,500) $ (347,777.500) $ 9.519,490 $ (1.373,277) $ 37,481,699 $ 69,756,424 $ 73,559,866 $ 76,420,234 $ 79,182,418 $ 81,215,164 $ 82,648,073 PV of CF PV of CF after CapEx Terminal Value (Exit Cap Rate 6.5%) $ 1,271,508,823 Terminal Value after Selling Expenses (2%) $ 1,246,078,646 - $ 30.744,402 $ 38,515,271 $ 41,553,168 $ 42,756,857 $ 41,555,907 $ 39,789,681 $ 37,998,033 $ 35,920,283 $ 551,122,411 $ (16,500,000) $ (347,777,500) $ (347,777.500) $ 994,402 $ (16.234,729) $ 16,553,168 $ 42,756,857 $ 41,555,907 $ 39,789,681 $ 37,998,033 $ 35,920,283 $ 551,122,411 Total PV of CF after CapEx $38,000,0001 Notes: (1) We have used a terminal capitalization rate of 6.50 percent and a discount rate of 8.50 percent. (2) We have used multipliers ranging from 5 percent to 7 percent to come to the concluded market rent of land. This range is based on capitalization rates published by market surveys as well as rates seen in comparable sales. (3) Any discrepancies are due to rounding. HOULIHAN LOKEY 50 Income Capitalization Approach: Scenario B Market Ground Rent Indication ■ We have estimated the annual market rent of the underlying land to be between 5% and 7% of the total value of the Subject Property. ■ The percentage rent, which is defined as 5 percent of net tenant revenues, exceeds our concluded market rent of $2.280 million and the minimum rent of $3.577 million in Year 6 of the cash flows (Year 4 after occupancy). ■ A complete schedule of the anticipated rent can be found in the appendices of this report. ($ in thousands) Low Mid High Present Value of Cash Flows 1 $38,000 Year 1 Market Rent of Land (rounded) 2 $1,900 $2,280 $2,660 Percent of Revenue (Year 4 of Occupancy) $3,814 Minimum Rent $3,577 Notes: (1) We have used a terminal capitalization rate of 6.50 percent and a discount rate of 8.50 percent. (2) We have used multipliers ranging from 5 percent to 7 percent to come to the concluded market rent of land. This range is based on capitalization rates published by market surveys as well as rates seen in comparable sales. (3) Any discrepancies are due to rounding. HOULIHAN LOKEY 51 Page 1. Executive Summary 5 2. Subject Property 3. Proposed Development 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Value Conclusions Real Property Valuation Analysis Summary ■ Based on our analysis, the market value of the Subject Property, as of the Valuation Date, is presented below. The value is a reconciliation between the Sales Comparison Approach and the Income Capitalization Approach. ($ in actuals) Property Street Address: City, State: Miami Freedom Park 1802 NW 37th Ave, Miami, FL Scenario A- As -If Clean Market Value Income Capitalization Approach (Rounded) : $ 55,000,000 Sales Comparison Approach (Rounded): $ 64,000,000 Reconciled Value: $ 60,000,000 Per Square Foot of Land Area $ 18.74 Scenario B - As Impaired by Environmental Reconciled Value $ 38,000,000 Per Square Foot of Land Area $ 11.87 HOULIHAN LOKEY 53 Value Conclusions - Market Rent Ground Rent Summary ■ According to the market value scenarios presented in the previous slide, the ground lease for the approximately 73.5 acres proposed are as follows: ($ in actuals) Property Street Address: City, State: Miami Freedom Park 1802 NW 37th Ave, Miami, FL Scenario A- As -If Clean Market Value Reconciled Value: $ 60,000,000 Feasible Ground Rent $ 3,600,000 1 Per Square Foot of Land Area $ 1.12 Percent of Revenue (Year 4 after Occupancy) $ 3,810,000 Per Square Foot of Land Area $ 1.19 Scenario B - As Impaired by Environmental Reconciled Value $ 38,000,000 Feasible Ground Rent $ 2,280,000 Per Square Foot of Land Area $ 0.71 Notes: (1) This amount reflects Houlihan Lokey's opinion on market rent considered under the terms of the Ground Lease and Master Development Agreement by and between City of Miami, a municipal corporation of the State of Florida and Miami Freedom Park, LLC, version 1 Extracted from Miami Freedom Park website, presented in Slide 19. HOULIHAN LOKEY 54 Page 1. Executive Summary 5 2. Subject Property 3. Proposed Development 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 7. Certification 55 8. Appendix 57 Certification We certify that, to the best of my knowledge and belief: ■ The statements of fact contained in this report are true and correct. ■ The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. ■ We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. ■ We have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. ■ We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. ■ Our engagement in this assignment was not contingent upon developing or reporting predetermined results. ■ 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. ■ Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. ■ Michael P. Hedden, MAI, CRE, FRICS made a personal inspection of the property that is the subject of this report. ■ No one provided significant real property appraisal assistance to the person signing this certification, other than my colleagues Maggie Coronel and Pierce Skelly. References to "I", "me" or "my" contained herein are only to the undersigned principal appraiser, and not to Houlihan Lokey or any of its affiliates or other employees. ■ The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. ■ The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. ■ As of the date of this report, we have completed the continuing education program for Designated Members of the Appraisal Institute. Michael P. H dden, MAI, CRE, FRICS Florida Certified General Real Estate Appraiser #RZ3081 HOULIHAN LOKEY 56 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 58 'oases L,oi ipar son Appi OCA, 60 Rent Schedules 66 Costs of Structural Improvements 69 Site Inspection 72 Construction Timeline 74 Information Relied Upon 76 Qualifications 81 Limiting Factors and Other Assumptions 84 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Glossary of Terms 58 Rent Schedule 66 Costs of Structural Imps uvements 69 Site Inspection 72 Construction Timeline 74 Information Relied Upon 76 Qualifications 81 Limiting Factors and Other Assumptions 84 Glossary of Terms As -Is Market Value Fee Simple Estate Highest and Best Use analysis The estimate of the value of the real property, in its current physical condition or conditions, use, and zoning, as of the valuation date.' A fee simple estate is defined as "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." 2 The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value. Economic or market or ground rent The amount paid for the right to use and occupy the land according to the terms of a ground lease. Extraordinary Assumption An assumption that is 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 Subject Property such as market conditions or trends; or about the integrity of data used in an analysis. Hypothetical Condition A condition assumed to be contrary to what exists but 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 Subject Property, such as market conditions or trends; or about the integrity of data used in an analysis. Capitalization Rate The relationship between the net operating income to the property value. Source: (1) Appraisal Institute, Dictionary of Real Estate Appraisal (6th Edition, Page 13). (2) Appraisal Institute, Dictionary of Real Estate Appraisal (6th Edition, Page 90). HOULIHAN LOKEY 59 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Sales Comparison Approach 60 e�U ►a Ul Jti' UUlui cll II I ipt uvIi ii I" L Site Inspection Construction Timeline Information Relied Upon Qualifications Limiting Factors and Other Assumptions Sales Comparison Approach Location of the Comparable Sales 9 Subject Property 9 Sale 1 - SW 88th St Sale 2 - 7777 NW 41st St 9 Sale 3 - 13350 NW 17th St Sale 4 -1620 NW 216th St East Coast t9uffer Water Preserve Area 9 Miramar r,pl urrplkc Country Club HahmSprings North Dora! Sweetwater Kendale Lakes The Cros 825 Miami Lakes CID CED esa West Park 4a1 Miami Gardens Cpa•Iocka Hialeah Gardens Hialeah Medley 2I 9Miarni Springs gas Fontainebleau Westchester CED CED CD Coral Gables Sunset South Miami gs Kendall 92 Pinecrest Palmetto Bay Hallandale Beach Aventura North Miami sea�.ir +CD CID North Miami 0 Miami Shores 01 'Y N M (Inc, ITP Miami Ba! Harbour Surf side Miami Beach Miami Beach Al A Fisher Island Virginia Key Key Biscayne Source: Map Data © 2019 Google HOULIHAN LOKEY 61 Sales Comparison Approach: Sale 1 Land Sale Profile General Information Address City State Zip County Submarket Sale Information SW 88th St Miami FL 33196 Miami -Dade Kendall Sale Price $41,840,000 Effective Sale Price $41,840,000 Date of Sale Dec-17 Status of Sale Closed $ per Acre (Gross) $599,427 $ per SF (Gross) $14 $ per Acre (Usable) $599,427 $ per SF (Usable) $14 Seller West Kendall Holdings LLC Buyer KTC SW 88TH ST LLC Property Rights Fee Simple % of Interest Conveyed 100% Document Type Deed Recording Number 30809-2922 Verification Type Secondary Verification Improvement and Site Data Parcel Identification Number Acres SF Usable/Gross Ratio Shape Zoning Code Zoning Description Land Use Market Orientation Source of Information 30-5905-029-0020 70 3,040,488 1 Irregular BU-2 Business Districts, Special Vacant Commercial Miami -Dade Property Appraiser Website Details On December 22, 2017 The Howard Hughes Corporation sold 69.8 acres of land located off of SW 88th Street in Miami, FL to NAI MIAMI Commercial Real Estate Services for 41.84 million, or approximately $599,427 per acre. The buyer financed this acquisition with a $24.94 million loan provided by City National Bank of Florida. HOULIHAN LOKEY 62 Sales Comparison Approach: Sale 2 Land Sale Profile General Information Address City State Zip County Submarket 7777 NW 41st St Dora! FL 33166 Mami-Dade Mami Airport Sale Price Effective Sale Price Date of Sale Status of Sale $ per Acre (Gross) $ per SF (Gross) $ per Acre (Usable) $ per SF (Usable) Seller Buyer Property Rights of Interest Conveyed Document Type Recording Number Verification Type [lprovement and Site Data Parcel Identification Number Acres SF Usable/Gross Ratio Shape Zoning Code Zoning Description Land Use Market Orientation Source of Information 35-3022-000-0101 24 1,032,372 1 Regular ( - Industrial 320 - INDUSTRIAL INTENSIVE, HEAVY - LIGHT MANUFACTURING, AND WAREHOUSING -STORAGE TYPE OF USE Industrial Mami-Dade Property Appraiser Website $40,268,000 $40,268,000 Dec-17 Closed $1,699,072 $39 $1,699,072 $39 BOTTLING GROUP LLC 7777 INVESTMENT LLC C/0 DAVID MARTIN AND S A BITTEL Fee Simple 100% Deed 30813-3815 Secondary Verification JIM Details According to CoStar, On December 26, 2017 PepsiCo, Inc. sold the 228.299 square foot industrial building located at 7777 NW 41st Street in Miami, FL to a joint venture between Terra Group and Terranova Corporation for $40.268 million, or approximately $176 per square foot. Many older industrial properties in the area are being demolished and redeveloped into mixed -use properties. The seller sold the property to take advantage of favorable market conditions. The building sold for its land value as it will be demolished. We assumed a demolition cost at $1 million approx. The buyer will redevelop up to 500,000 square feet of commercial space. The property was fully leased to the seller on a short- term basis. We assumed the lease back cost at $5 million approx. The buyer financed this acquisition with a $37.5 million loan provided by Palmetto Finance & Investment, LLC. HOULIHAN LOKEY 63 Sales Comparison Approach: Sale 3 Land Sale Profile AIME general Information Address City State Zip County Submarket Sale Information Sale Price Effective Sale Price Date of Sale Status of Sale $ per Acre (Gross) $ per SF (Gross) $ per Acre (Usable) $ per SF (Usable) Seller Buyer Property Rights of Interest Conveyed Document Type Recording Number Verification Type Imps - _, „ ite Data 13350 NW 17th St Doral FL 33182 Miami -Dade Doral $31, 098, 500 $31, 098, 500 Jul-16 Closed $1, 025, 000 $24 $1, 025, 000 $24 AMB CO D INA B EAC O N UNITED PARCEL SERVICE INC TOM HEALEY Fee Simple 100% Deed 30163-2081 Secondary Verification Parcel Identification Number Acres SF Usable/Gross Ratio Shape Zoning Code Zoning Description Land Use Market Orientation Source of Information 30-3935-019-0015 30 1,321,610 1 Regular IU-1 INDUSTRIAL DISTRICTS, LIGHT MANUFACTURING General Industrial Miami -Dade Property Appraiser Website Details According to CoStar, On July 20, 2016 an affiliate of Prologis completed the sale of a 30.34 acre parcel of land to United Parcel Service for the confirmed price of $31,098,000. The land is located on Northwest 17th Street, west of Mami International Airport. Although the land is approved for up to 5.3 million square feet of warehouse space with 795,000 square feet of retail space and 175,000 square feet of office space, a representative of the buyer stated they have no immediate plans to begin developing the site and it is too early to even speculate as to what they might build. There was no outside financing obtained to fund the acquisition and the escrow period was approximately 106 days. Neither party used the services of an outside broker. Note: The Qualification Description on the Property Appraiser establishes that the transaction was "not exposed to open -market; atypical motivation" HOULIHAN LOKEY 64 Sales Comparison Approach: Sale 4 Land Sale Profile General Information Address City State Zip County Submarket 1620 NW 215 ST Miami Gardens FL 33056 Miami -Dade Miami Gardens Sale Information IMP IMP Sale Price Effective Sale Price Date of Sale Status of Sale $ per Acre (Gross) $ per SF (Gross) $ per Acre (Usable) $ per SF (Usable) Seller Buyer Property Rights % of Interest Conveyed Document Type Recording Number Verification Type $26,500,000 $26,500,000 Nov-16 Closed $1,025,000 $10 $434,426 $10 Calder Race Course. Inc. EastGroup Properties, L.P. Fee Simple 100% Deed 30302-3608 Secondary Verification Improvement and Site Data Parcel Identification Number Acres SF Usable/Gross Ratio Shape Zoning Code Zoning Description Land Use Market 0 rientation Source of Information 34-1134-014-0015 61 2,657,160 1 Irregular AU Agriculture 115 - SPORTS STADIUMS, ARENAS, AND TRACKS. INSIDE URBAN DEVELOPMENT BOUNDARY Miami -Dade Property Appraiser Website The Property is located 1.5 miles from HardRock/Miami Dolphins Stadium. According to CoStar, on November 8, 2016 Calder Casino sold the 61 acres located at 21001 Northwest 27th Avenue in Miami Gardens, FL to EastGroup Properties, Inc. for $26.5 million, or approximately $434,426 per acre. The seller sold the property because it was excess land. This was an all -cash deal. HOULIHAN LOKEY 65 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Rent Schedules 66 Rent Schedule - Scenario A ($ in thousands) Market Rent of Percent of Market Rent of Percent of Analysis Period 9and Revenue Minimum Rent Annual Rent 1 Analysis Period Land Revenue Minimum Rent Annual Rent Year 1 Sep-20 $3,600 $2,533 $3,577 $3,600 Year 21 Sep-40 $4,566 $5,425 $4,537 $5,425 Year 2 Sep-21 $3,600 $2,533 $3,577 $3,600 Year 22 Sep-41 $4,657 $5,533 $4,627 $5,533 Year 3 Sep-22 $3,600 $2,533 $3,577 $3,600 Year 23 Sep-42 $4,750 $5,644 $4,720 $5,644 Year 4 Sep-23 $3,600 $2,979 $3,577 $3,600 Year 24 Sep-43 $4,845 $5,757 $4,814 $5,757 Year 5 Sep-24 $3,600 $3,497 $3,577 $3,600 Year 25 Sep-44 $4,942 $5,872 $4,910 $5,872 Year 6 Sep-25 $3,600 $3,814 $3,577 $3,814 Year 26 Sep-45 $5,041 $5,990 $5,009 $5,990 Year 7 Sep-26 $3,600 $3,997 $3,577 $3,997 Year 27 Sep-46 $5,142 $6,109 $5,109 $6,109 Year 8 Sep-27 $3,600 $4,159 $3,577 $4,159 Year 28 Sep-47 $5,245 $6,232 $5,211 $6,232 Year 9 Sep-28 $3,600 $4,263 $3,577 $4,263 Year 29 Sep-48 $5,349 $6,356 $5,315 $6,356 Year 30 Sep-49 $5,456 $6,483 $5,422 $6,483 Year 11 Sep-30 $3,745 $4,450 $3,722 $4,450 Year 31 Sep-50 $5,566 $6,613 $5,530 $6,613 Year 12 Sep-31 $3,820 $4,539 $3,796 $4,539 Year 32 Sep-51 $5,677 $6,745 $5,641 $6,745 Year 13 Sep-32 $3,897 $4,630 $3,872 $4,630 Year 33 Sep-52 $5,790 $6,880 $5,753 $6,880 Year 14 Sep-33 $3,975 $4,723 $3,949 $4,723 Year 34 Sep-53 $5,906 $7,018 $5,868 $7,018 Year 15 Sep-34 $4,054 $4,817 $4,028 $4,817 Year 35 Sep-54 $6,024 $7,158 $5,986 $7,158 Year 16 Sep-35 $4,135 $4,914 $4,109 $4,914 Year 36 Sep-55 $6,145 $7,301 $6,106 $7,301 Year 17 Sep-36 $4,218 $5,012 $4,191 $5,012 Year 37 Sep-56 $6,268 $7,447 $6,228 $7,447 Year 18 Sep-37 $4,302 $5,112 $4,275 $5,112 Year 38 Sep-57 $6,393 $7,596 $6,352 $7,596 Year 19 Sep-38 $4,388 $5,214 $4,360 $5,214 Year 39 Sep-58 $6,521 $7,748 $6,479 $7,748 Year 10 Sep-29 $3,672 $4,373 $3,649 $4,373 Year 20 Sep-39 $4,476 $5,319 $4,448 $5,319 Notes: (1) Per the Ground Lease and Master Development Agreement, the annual rent is equal to the greater of the fair market value and five percent of net tenant revenues. In no event shall annual rent be less than $3.577 million per year, prorated for any partial year (2) We have used a multiplier of 6 percent to come to the concluded market rent. (3) The market rent and the minimum rent will begin to grow starting in the 10th year, at a rate equal to the Consumer Price Index as of the valuation date. We have used a growth rate of 2 percent to account for future increases. (4) Any discrepancies are due to rounding. HOULIHAN LOKEY 67 Rent Schedule - Scenario B ($ in thousands) Analysis Period Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Sep-20 Sep-21 Sep-22 Sep-23 Sep-24 Sep-25 Sep-26 Sep-27 Sep-28 Sep-29 Market Rent of Land $2,280 $2,280 $2,280 $2,280 $2,280 $2,280 $2,280 $2,280 $2,280 $2,280 Percent of Revenue $2,533 $2,533 $2,533 $2,533 $2,979 $3,497 $3,814 $3,997 $4,159 $4,263 Minimum Rent $3,577 $3,577 $3,577 $3,577 $3,577 $3,577 $3,577 $3,577 $3,577 $3,577 Annual Rent 1 $3,577 $3,577 $3,577 $3,577 $3,577 $3,577 $3,814 $3,997 $4,159 $4,263 Year 10 Sep-30 $2,326 $4,373 $3,649 $4,373 Year Year Year Year Year Year Year Year Year 11 12 13 14 15 16 17 18 19 Sep-31 Sep-32 Sep-33 Sep-34 Sep-35 Sep-36 Sep-37 Sep-38 Sep-39 $2,372 $2,420 $2,468 $2,517 $2,568 $2,619 $2,671 $2,725 $2,779 $4,450 $4,539 $4,630 $4,723 $4,817 $4,914 $5,012 $5,112 $5,214 $3,722 $3,796 $3,872 $3,949 $4,028 $4,109 $4,191 $4,275 $4,360 $4,450 $4,539 $4,630 $4,723 $4,817 $4,914 $5,012 $5,112 $5,214 Analysis Period Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Sep-40 Sep-41 Sep-42 Sep-43 Sep-44 Sep-45 Sep-46 Sep-47 Sep-48 Sep-49 Sep-50 Sep-51 Sep-52 Sep-53 Sep-54 Sep-55 Sep-56 Sep-57 Sep-58 Market Rent of Land $2,835 $2,892 $2,949 $3,008 $3,069 $3,130 $3,193 $3,256 $3,322 $3,388 $3,456 $3,525 $3,595 $3,667 $3,741 $3,815 $3,892 $3,970 $4,049 Percent of Revenue Minimum Rent Annual Rent $5,319 $4,448 $5,319 $5,425 $4,537 $5,425 $5,533 $4,627 $5,533 $5,644 $4,720 $5,644 $5,757 $4,814 $5,757 $5,872 $4,910 $5,872 $5,990 $5,009 $5,990 $6,109 $5,109 $6,109 $6,232 $5,211 $6,232 $6,356 $5,315 $6,356 $6,483 $5,422 $6,483 $6,613 $5,530 $6,613 $6,745 $5,641 $6,745 $6,880 $5,753 $6,880 $7,018 $5,868 $7,018 $7,158 $5,986 $7,158 $7,301 $6,106 $7,301 $7,447 $6,228 $7,447 $7,596 $6,352 $7,596 Notes: (1) Per the Ground Lease and Master Development Agreement, the annual rent is equal to the greater of the fair market value and five percent of net tenant revenues. In no event shall annual rent be less than $3.577 million per year, prorated for any partial year (2) We have used a multiplier of 6 percent to come to the concluded market rent. (3) The market rent and the minimum rent will begin to grow starting in the 10th year, at a rate equal to the Consumer Price Index as of the valuation date. We have used a growth rate of 2 percent to account for future increases. (4) Any discrepancies are due to rounding. HOULIHAN LOKEY 68 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Costs of Structural Improvements 69 Site Inspection L,anstruction Timeline Information Relied Qualifications Limiting Factors and Other, Costs of Structural Improvements ($ in actuals) Miami Freedom Park 1802 NW 37th Ave, Miami, FL 33125 Miami, FL Structure Type I Retail/Entertainment/RI estauranti Building Class/Quality A/B/Goodl Base Cost [1] $161.00 i Square Foot Refinements 111 Heating & Cooling Sprinklers Lab/Other Space Total Cost Height & Size Refinements 111 No. of stories Height per Story Area/Perimeter Total Multiplier Refined Unit Cost Final Refinements [11 Current Cost Multiplier Local Multiplier Total Multiplier Final Unit Cost Building Area Building Cost Lump Sum Adjustments Total Lump Sum Adjustments Total Hard Cost Soft Costs at 20.00% Entreprenurial Incentive at 10.00% Replacement Cost New Replacement Cost New (Rounded) Office B/Good $208.00 Stadium $9,000.00 Parking Garage Average $15,000.00 Soccer Fields' Full Service Hotel Average $14.48 $260,000 Limited Service Hotel $175,000 j $5.21 2.41 0.00 $168.62 $6.80 2.63 0.00 $217.43 $0.00 0.00 0.00 $9,000.00 $0.00 0.00 0.00 $15,000.00 $0.00 j 0.00 0.00 $14.48 j $0.00 0.00 0.00 $260,000.00 $0.00 i 0.00 0.00 $175,000.00 1.000 ` 1.025 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 € 1.000 1.000 0.900 0.850 1.000 0.900 0.900 1.000 1.000 0.900 0.871 1.000 0.900 0.900 1.000 1.000 $151.76 i $189.38 $9,000.00 $13,500.00 $13.03 j $260,000.00 $175,000.00 1.040 0.950 0.990 1.050 0.950 1.000 1.040 0.950 0.990 1.060 0.950 1.010 1.000 I 1.000 1.000 1.050 i 0.950 1.000 $150.24 600,000 $90,144,000 $189.38 400,000 $75.752,000 $8,910.00 25.130 $223,908,300 $13,635.00 2 387 $32,546,745 $13.03 232,800 $3,033,384 $260,000.00 s 500 $130,000,000 1.050 0.950 1.000 $175,000.00 250 $43,750,000 $0 $0 $0 $0 1 $0 so $90 144 000 j $75.752 000 $223 908 300 $32,546 745 $3 033 384 $130 000 000 $43 750 000 18.028.800 i 15.150.400 44,781,660 ! 6,509,349 ) 606.677 26.000.000 i 8.750.000 j 10817280� 9.090,240 26�868 996996 3 905,609 364,00.6 15 600 000 j 5,250 000 $118,990,080 $99,992,640 $295,558.956 $42,961,703 $4,004,067 $171,600,000 $57,750,000 $119,000,000 $100,000,000 $295,600,000 1 $43,000,000 $4,000,000 1 $171,600,000 $57,800,000 Notes: (1) Soft Cost includes construction loan interest and carrying cost, HOULIHAN LOKEY 70 Costs of Site Improvements ($ in actuals) Miami Freedom Park 1802 NW 37th Ave, Miami, FL 33125 Miami, FL Description Unit Cost [1] No. of Units Unit Measure Subtotal Multipliers [1] Total Hard Cost Soft Cost and El Multiplier [1] Total RCN Cost Effective Age Life [1] Percent Deprec. RCN less Deprec. Current Cost Local Cost Total Multiplier (a) (b) (c ) (d)=(a)x(b) (e) (f) (g)=(e)x(f) (h)=(d)x(g) (i) (j)=(h)x(i) (k) (I) (m)=(k)/(I) (n)=(j)x(m) Asphalt Paving - Road $ 154.00 7,800 Iinealft $1,201,200 1.050 0.950 1.000 $1,201,200 1.320 $1,585,584 0 11 0.0% $1,585,584 Asphalt Paving - Parking $ 1,470.00 3,472 ea $5,103,840 1.050 0.950 1.000 $5,103,840 1.320 $6,737,069 0 11 0.0% $6,737,069 Asphalt Paving - Site $ 3.61 1,075,932 sf $3,884,115 1.050 0.950 1.000 $3,884,115 1.320 $5,127,032 0 11 0.0% $5,127,032 Concrete Paving $ 29.50 7,800 lineal ft 230,100 1.050 0.950 1.000 230,100 1.320 303,732 0 16 0.0% 303,732 Site Lighting $ 1,885.00 100 ea 188,500 1.050 0.950 1.000 188,500 1.320 248,820 0 20 0.0% 248,820 Parking Lot Striping $ 11.09 3,472 ea 38,504 1.050 0.950 1.000 38,504 1.320 50,825 0 3 0.0% 50,825 Total RCN $14,053,062 Total RCNLD $14,053,062 Rounded: $14,055,000 Notes: (1) Base cost, Multipliers and Useful Lives per Marshall & Swift Valuation Service Manual. HOULIHAN LOKEY 71 1. Executive Summary 2. Subject Property 3. Proposed Development 4. Economic & Industry Overview 5. Valuation Methodologies 6. Value Conclusions 7. Certification 8. Appendix pi o Rent Schedules costs of Structural Improvements 5 14 18 21 31 52 55 57 58 60 66 69 Site Inspection 72 onstruL,Lion Timeline 74 Information Relied Upon 76 Quaff 81 Limiting Factors and Other Assumptions 84 Site Inspection ■ The Property was inspected on October 24, 2019 by Michael P. Hedden, MAI, CRE, FRICS. HOULIHAN LOKEY 73 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Construction Timeline 74 Information Relied Upon 76 Qualifications 81 Limiting Factors and Other Assumptions 84 Construction Timeline proposed by Developer MFP's Construction Timeline1 Phase 1 — Retail: 300,000 Sq. Ft. Technology Hub: 400,000 Sq. Ft. Hotel 1 — Full Service Hotel 2 — Limited Service Stadium West & South Parking 2019 2020 2021 —2022 Environmental Remediation Site Development Leased Premises Site Development Public Park Phase 1 — Retail: 300,000 Sq. Ft. Technology Hub: 400,000 Sq. Ft. 2023 R Phase 1 — Retail Technology Hub Hotel 1 — Full Service Hotel 2 — Limited Service West & South Parking 2024 ► Source: (1) Ancillary Development Model provided by Miami Freedom Park HOULIHAN LOKEY 75 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Information Relied Upon 76 Information Relied Upon Received from Client • Attachment-8363.pdf • DERM NFAP.PDF • ESA 02-16-2004.pdf • LeJeune Golf Course 1961 Plans.pdf • Melreese Appraisal BLAKE.PDF • Melreese Appraisal CBRE.PDF • Melreese BOV.PDF • Melreese Survey 2005.pdf • PLANS.PDF • 192286.pdf • 192287.pdf • 192289(1).pdf • 192289.pdf • 192290.pdf • 192300.pdf • 192320.pdf • Sept 19 Agenda.pdf • http://www.miamidade.gov/govaction/matter.asp?matter= 160566&fi le=true&fil eAnalysis=false&yearFolder=Y2016 • http://www.miamidade.gov/govaction/matter.asp?matter= 161583&file=true&fileAnalysis=false&yearFolder=Y2016 • http://www.miamidade.gov/govaction/matter.asp?matter= 161584&file=true&fileAnalysis=false&yearFolder=Y2016 http://www. miamidade.gov/govaction/matter. asp?matter=18 1473&file=true&fileAnalysis=false&yearFolder=Y2018 http://www. miamidade.gov/govaction/matter. asp?matter=18 2741 &file=true&fileAnalysis=false&yearFolder=Y2018 http://www. miamidade.gov/govaction/matter. asp?matter=19 0626&fi l e=tru e&fi leAn alysi s=false&yea rFol de r=Y2019 http://www. miamidade.gov/govaction/matter. asp?matter=19 0989&fi l e=tru e&fi leAn alysi s=false&yea rFol de r=Y2019 http://www. miamidade.gov/govaction/matter. asp?matter=19 1188&file=true&fileAnalysis=false&yearFolder=Y2019 http://www. miamidade.gov/govaction/matter. asp?matter=19 2287&file=true&fi leAn alysi s=false&yea rFol de r=Y2019 http://www. miamidade.gov/govaction/matter. asp?matter=19 2289&file=true&fi leAn alysi s=false&yea rFol de r=Y2019 http://www. miamidade.gov/govaction/matter. asp?matter=19 2300&file=true&fi leAn alysi s=false&yea rFol de r=Y2019 http://www. miamidade.gov/govaction/matter. asp?matter=19 1599&file=false&fileAnalysis=false&yearFolder=Y2019 http://www. miamidade.gov/govaction/matter. asp?matter=19 2320&file=true&fileAnalysis=false&yearFolder=Y2019i Pad City 1 - DERM NFAP.PDF City 2 - ESA 02-16-2004.pdf City 3 - LeJeune Golf Course 1961 Plans.pdf City 4 - Melreese BOV.PDF City 5 - Melreese Survey 2005.pdf • City 5 - Renovation Plans.PDF • Tab la. Net Developable Area + Zoning.pdf • Tab 1 b. Melreese Appraisal BLAKE.PDF • Tab lb. Melreese Appraisal CBRE.PDF • Tab lc. Site Rehabilitation Plan (2018- 3057) - MFP - August 14, 2019.pdf • Tab 1 d. MDAD Height Constrai nts_Flattened. pdf • Tab lh. Zoning and Development Summary.pdf • Ancillary Development Model.xlsx HOULIHAN LOKEY 77 Information Relied Upon Research and other data • 20190918 RCA IU-Investors.xls • CoStar News - Miami's Version of Fifth Avenue and Rodeo Drive Changes Along With Suburban Malls.pdf • MFP - Ground Lease and Master Development Agreement (1).pdf • MFP-Park-Rehabilitation-Agreement.pdf • MFP-Term-Sheet-and-Lease-Comparison_66224949_1-002-1.pdf • Miami Beach Convention Center HQ Hotel - Finance and Citywide Projects C....pdf • Miami Project - General Info.pptx • Relators Miami.xlsx • American Dream Miami • American Dream Miami mega -mall closer to approval by county _ Miami Herald.pdf • When will American Dream Miami mega -mall open in Miami -Dade__ Miami Herald.pdf • Bureau of Labor Statistics • areaemployment_miami.pdf • blssummary_miami.pdf • Florida Economy at a Glance.html • Cap Rates • 2019-Q1-Cap-Rate-Report-Research-STNL.pdf • Calkain-Q2-2019-Cap-Rate-Report.pdf • CVS-West-Palm-Beach-FL.pdf • MacroEc Comparison.xls • Net-Lease-Bank-Ground-Lease-Report.pdf • Census Info • Florida Population 2010-2018.xlsx • Unemployment Data by MSA.xlsx • Cost Info • HVS Report - U.S. Hotel Development Cost Survey 2018_19 - By Luigi Major.pdf • Ground Lease Research • Fed Keeps Net Lease Cap Rates Low _ GlobeSt.pdf • Opa Locka Flea Market Press Release.pdf • STNL-Ground-Lease-Wawa-Margate-FL-OM-Calkain-Net-Lease-Investment.pdf • Market Publications • CBRE • Hotel_SEOR2019_Miami.pdf • Miami Airport Marketing Brochure.pdf • Office_SEOR2019_Miami_5zrv.pdf • Retail Miami.pdf • Trends in the Hotel Industry USA Edition 2018.pdf • CoStar • CoStar 2019Q2 Economic Scenario Descriptions.PDF • Miami Industrial Report.pdf • Miami Multifamily Report.pdf • Miami Office Report.pdf • Miami Retail Report.pdf • Miami Trend Info.xlsx • Cushman & Wakefield • 2018-2019 Miami Retail Major Markets Report.pdf HOULIHAN LOKEY 78 Information Relied Upon Research and other data • Miami_Americas_MarketBeat_Office_Q12019.pdf • Miami_Americas_Marketbeat_Office_Q22019.pdf • Miami_Americas_MarketBeat_Office_Q32018.pdf • Miami_Americas_MarketBeat_Office_Q42018.pdf • Integra • 2019_Annual_Broward-Palm_Beach_FL_Retail_0.pdf • 2019_Annual_Miami_FL_Office_0.pdf • 2019_Mid-Year_Miami_FL_Hospitality.pdf • 2019_Mid-Year_Miami_FL_Office.pdf • 2019_Mid-Year_Miami_FL_Retail.pdf • UM_RealEstatelnitiative_Feb2019.pdf • JLL • Miami, Fort Lauderdale and Orlando on track to expand Office inventory by more than 4.0 percent in next few years_.pdf • Stadiums go for gold with green design.pdf • Marcus & Millichap • Florida 2019 Hospitality Investment Forecast Report.pdf • PwC • 3Q19 PwC Real Estate Investor Survey.pdf • RCA • Average Price Per SF and Unit by Property Type.xlsx • Effective Rent Revenue by Property Type.xlsx • Total SF and Units by Property Type.xlsx • Vacancy Rate by Property Type.xlsx • Reis • Coral Gables Retail Data.xls • Miami 2Q19 Office Report.pdf • Miami 2Q19 Office Transaction Analytics.pdf • Miami 2Q19 Retail Report.pdf • Miami 2Q19 Retail Transaction Analytics.pdf • Miami Airport Office Data.xls • Miami Airport • December 2018 Moving Twelve Months Traffic Report.pdf • July 2019 Monthly Calendar Yr Traffic Report.pdf • OpalockaExecutiveAirportZoningCode.pdf • Miami Hotels • Miami Hotels Export.xlsx • News Articles • alex-sapirs-massive-op.pdf • Austin FC stadium construction to start soon - Austin Business Journal.pdf • Golf course at Miami Beckham stadium site reopened _ Miami Herald.pdf • Melreese Country Club users aren't ready to trade in golf for soccer _ Miami Herald.pdf • Miami's Version of Fifth Avenue and Rodeo Drive Changes Along With Suburban Malls.pdf • Miami-Improving-Office-Market.pdf • More Office Tenants Chase Better Deals Outside Big City Centers.pdf • NREI REIT M&A 10.18.2019.pdf • Retail Shines in State With Four of the Nation's Top Five Rent Growth Markets.pdf\ • South Florida Counties Beyond Miami to Become Prime Spots for Retail.pdf • Tight Land Supply in Miami, Other Coastal Cities Drives Demand for Older, Less Central Property.pdf HOULIHAN LOKEY 79 Information Relied Upon 'cont.) Research and other data • News • Austin FC stadium construction to start soon - Austin Business Journal.pdf • Golf course at Miami Beckham stadium site reopened _ Miami Herald.pdf • Other Stadium - Lease Data • 2017-Baseball-Stadium-District-Lease-Agreement-Colorado.pdf • Amended and Restated Ground Lease - FINAL (07-02-15).pdf • Austin_Stadium_Lease_and_Development_Agreement_Final_.pdf • Chapter 17.20 PROFESSIONAL FOOTBALL STADIUM GROUND LEASE. • Deal for new Portland baseball stadium calls for 55-year lease, up to $1.5M in negotiating payments - oregonlive.com.pdf • downtownstadiumcommission_doc317578663_09122012.pdf • Ground Lease Executes-27-14.pdf • memorandum of 1st ammend - santaclara.pdf • Miami Lease.pdf • Miami Stadium.zip • Microsoft Word - RIVER_CENTER_PROPOSAL part 4.doc.pdf • santaclara lstammend.pdf • santaclara GL.pdf • SDSU Seeks To Buy, Lease Qualcomm Stadium Property _ KPBS.pdf • Soccer.Development_Agreement.FINAL.pdf • Stadium Lease Agreement (Las Vegas Raiders) Working Draft_April 20 SAB Meeting.pdf • StadiumGroundLease_Nashville.pdf • Planning and Zoning • MultiQuery_Oct15 (1).xlsx • Population • 2019_Pop_Estimates.pdf • Soccer Stadium - Fields • 8 New MLS Stadiums Coming This Season And In The Future.pdf • blueprint-successful-stadium-development.pdf • Building Chase Center was perfect situation for Warriors despite cost - Business Insider.html • Chapter 17.20 PROFESSIONAL FOOTBALL STADIUM GROUND LEASE.pdf • Introduction.0.pdf • Soccer in Miami_ The best places for a soccer game, field rentals_ Miami.com _ Miami Herald.pdf • STR • 1130427_MiamiAirportCiv.xls • 1130430_MiamiAirportCiv.xls • Tax Info • 2018 roll details - Real Estate Account at 1550 NW 37 AVE, Miami 33125-1052 - TaxSys - Miami -Dade County Tax Collector.pdf HOULIHAN LOKEY 80 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 58 60 Rent Schedules 66 Costs of Structural Imp.ovements 69 Site Inspection 72 Construction Timeline 74 Information Relied Upon 76 Qualifications 81 Qualifications MCRP OTHEK University of Bridgeport Rutgers University Member, Appraisal Institute Counselor of Real Estate Fellow, Royal Institution of Chartered Surveyors Certified General Real Estate Appraiser FTI Consulting Inc. American Appraisal Associates CBIZ Valuation Group Realty Economics Group Michael P. Hedden, MAI, CRE, FRICS Mr. Hedden is a member of Houlihan Lokey's Financial Advisory Services business. His primary responsibilities include providing valuation and real estate consulting services relating to litigation support, dispute resolution, and expert testimony. Mr. Hedden has extensive experience in the valuation of investment and user -based specialized real estate and real estate -related enterprises. He has over 40 years of experience in all aspects of market analysis and valuation, including industrial, commercial, residential, and special purpose properties. He has developed broad experience in the valuation of properties with detrimental conditions and is a recognized expert in the valuation of property suffering from environmental contamination. Mr. Hedden has appraised properties in many U.S. states for purposes that have included ownership interests, condemnation, property tax, financing, purchase or sale, insurance, rental, tax reporting, and donation. Advisory services performed by Mr. Hedden have included appraisal review, market research, appraisal management, and transaction analysis. Mr. Hedden has significant expert testimony experience and has appeared before U.S. District Courts, U.S. Bankruptcy Court, the Superior Court of New Jersey, the New Jersey State Tax Court, and various arbitration/mediation panels. Before joining Houlihan Lokey, Mr. Hedden served as a Managing Director at FTI Consulting's Real Estate Solutions Group. Earlier, he served as a Managing Director at American Appraisal Associates, Director at CBIZ Valuation Group, and President of Realty Economics Group. HOULIHAN LOKEY 82 Michael P. Hedden, MAI, CRE, FRICS Mr. Hedden received a B.S. from the University of Bridgeport and a Master of City and Regional Planning (MCRP) from Rutgers University. He is a Member of the Appraisal Institute, a Counselor of Real Estate from the National Association of Realtors, and a Fellow in the Royal Institution of Chartered Surveyors. Mr. Hedden has been an instructor of advanced valuation and market analysis courses for the Appraisal Institute as well as a frequent author and lecturer. He has held a New Jersey Real Estate Brokers License since 1978. HOULIHAN LOKEY 83 1. Executive Summary 5 2. Subject Property 14 3. Proposed Development 18 4. Economic & Industry Overview 21 5. Valuation Methodologies 31 6. Value Conclusions 52 7. Certification 55 8. Appendix 57 Limiting Factors and Other Assumptions 84 Limiting Factors and Other Assumptions This report (the "Report") is provided solely for the use of City of Miami(the "Recipient" of "Company") by Houlihan Lokey Financial Advisors, Inc. ("Houlihan Lokey" or "we") for the purpose set forth in the written terms of Houlihan Lokey's engagement letter and may not be relied upon by any other person or entity or used for any other purpose. Use of the Report by any third party is at the sole risk of that party, and access to the Report by any third party does not create privity between Houlihan Lokey and any such party. We have agreed to provide the Report for the use of the Recipient only if it is subject to this statement of Limiting Factors and Other Assumptions. Accordingly, the Recipient's acceptance of the Report shall automatically constitute the Recipient's legally binding acceptance, for consideration the Recipient agrees to be sufficient, of this statement of Limiting Factors and Other Assumptions. If the Recipient does not agree to any portion of this statement of Limiting Factors and Other Assumptions, the Report must be immediately returned to Houlihan Lokey. This statement of Limiting Factors and Other Assumptions is in addition to any other assumptions, qualifications, limitations, conditions or restrictions set forth in the Report, or those set forth in our engagement letter or that have otherwise been disclosed by Houlihan Lokey or any of its employees or affiliates. Any defined terms used in this statement of Limiting Factors and Other Assumptions shall have the meanings set forth in this statement of Limiting Factors and Other Assumptions, even if such capitalized terms have been given different meanings elsewhere in the Report. Any undefined terms used in this statement of Limiting Factors and Other Assumptions shall have the meanings set forth in the Report. Any portion of this statement of Limiting Factors and Other Assumptions might have had an effect on the contents of the Report and any conclusions reached herein. Houlihan Lokey has not undertaken, and is under no obligation, to update, revise, reaffirm or withdraw the Report. Possession of the Report, or a copy thereof, does not carry with it the right of publication or distribution to or use by any third party. No change to any part of the Report may be made by anyone other than Houlihan Lokey, and Houlihan Lokey shall have no responsibility for any such unauthorized change. The Report (including, without limitation, the fact that Houlihan Lokey prepared the Report) may not be disclosed, summarized, reproduced, disseminated or quoted or otherwise referred to, in whole or in part, except to the extent set forth in the written terms of Houlihan Lokey's engagement letter. 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Houlihan Lokey assumes that the Recipient has consulted with appropriate professionals with respect to such matters. Houlihan Lokey's role in reviewing any information is limited solely to performing such work as it shall deem necessary to support its own advice and analysis and shall not be on behalf of the Recipient. The Report has been prepared based on the directions of the Recipient, including directions as to the scope and content of review, and staffing levels and limitations. The scope of the review was determined in consultation with the Recipient and based on that consultation does not deal with all potentially relevant matters or with all aspects of matters that are relevant. The Report is not a summary of all of the reviews conducted by Houlihan Lokey, nor a complete summary of the materials it references. Instead, the Report was designed to provide a summary overview of specific matters identified in discussions between the Recipient and Houlihan Lokey. In addition, certain matters have been discussed via telephone or email with the Recipient and were not included in the Report. Accordingly, the Report does not purport to give a complete assessment of all matters to which it refers. Given the limited scope of Houlihan Lokey's review, the readers of the Report should not assume (or rely upon any assumption), or infer or conclude that the matters summarized in the Report are, individually or collectively, material to the potential buyers or the operations of the Company, or that such matters comprise all the material information with respect to the Company or the operations of the Company or that a person investigating any contemplated transaction may want to be informed of and consider. The Report does not purport to provide a complete and accurate summary of matters pertaining to the Company. HOULIHAN LOKEY 85 Limiting Factors and Other Assumptions Our services did not constitute an audit conducted in accordance with generally accepted auditing standards, an examination of any type, an accounting opinion, or other attestation or review services in accordance with standards established by the AICPA, by the Public Company Accounting Oversight Board or by any other professional governing body, and did not constitute a review to detect fraud or illegal acts or address the effectiveness of internal controls over financial reporting under Section 404 of the Sarbanes-Oxley Act. Accordingly, Houlihan Lokey provides no opinion, representation or any other form of assurance with respect to the services or the information upon which our work was based, including, without limitation regarding the sufficiency of the Report, the scope or procedures it describes for any purpose, the accuracy or applicability of any definitions set forth in the Report or their sufficiency for any general or particular purpose other than setting forth the scope of the Report. No opinion is given by Houlihan Lokey as to any title to, or legal status of, any assets, properties or business interests, which may be involved, whether real, personal, tangible or intangible. Houlihan Lokey has not been requested to make, and has not made, any physical inspection or independent appraisal or evaluation of any of the specific assets, properties or liabilities of any entity. Unless otherwise stated and considered in the Report, Houlihan Lokey assumes that the Company has complied with all applicable federal, state and local regulations, codes, ordinances, statutes and laws, and that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which any analyses or advice contained in the Report are based. References to any law, regulation or pronouncement, or any agreement to which the Recipient, or any other party, is subject, are for informational purposes only. Neither the Report nor any of its contents (including any such reference) addresses whether any analyses prepared by, or advice provided by, Houlihan Lokey are in compliance with, or are otherwise in accordance with, any such law, regulation, pronouncement or agreement. The underlying financial information (including any prospective financial information, budgets, projections, estimates, financial analyses, reports and other information) referred to in the Report was prepared and developed by management, representatives or advisors of the Recipient. We did not prepare, assemble, formulate, develop or process the data or assumptions used to generate such financial information nor did we assist in the preparation or assembly of such financial information or in the development of any assumptions contained therein. Any budgets, projections, estimates, financial analyses, reports and other information with respect to operations or construction reflected in the Report have been prepared by management of the relevant party or are derived from such budgets, projections, estimates, financial analyses, reports and other information or from other sources, which involve numerous and significant subjective determinations made by management of the relevant party and/or which such management has reviewed and found reasonable. To the extent that we have been provided with budgets, projections or estimates, we have been advised, and have assumed, that such budgets, projections and estimates have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of the future financial results and condition of the Company. The budgets, projections and estimates contained in the Report may or may not be achieved and differences between projected results and those actually achieved may be material. To the extent we have made any factual observations about specific assumptions or components of the budgets, projections or estimates herein, such observations do not constitute, and in no event may they be construed as, an opinion or conclusion about any such assumption or component or about the projected financial information as a whole. Houlihan Lokey has assumed and relied upon the accuracy and completeness of the financial and other information provided to, discussed with or reviewed by it without (and without assuming responsibility for) independent verification of such information and makes no representation or warranty (express or implied) in respect of the accuracy or completeness of such information. HOULIHAN LOKEY 86 Limiting Factors and Other Assumptions The information presented in the Report is included solely to assist in the development of the analyses and advice contained therein. The information may be incomplete and contain departures from generally accepted accounting principles and/or other guidelines established by regulatory or other governing bodies. We express no opinion or other assurances on the information presented and it should not be used for any purpose other than to assist the Recipient in understanding the Report. Any analyses, conclusions or estimates presented in the Report apply to the Report only and may not be used out of the context presented therein. Certain historical financial data reviewed in connection with the preparation of the Report were derived from financial statements provided by the Company. The financial statements may include disclosures required by generally accepted accounting principles. Those disclosures required are not repeated herein, and those who are not informed about such matters should refer to such financial statements. Any actions or decisions taken or made by the Recipient (including the implementation of any advice) should be based on its own judgment, and the decision process should consider many factors other than the contents of the Report. The Report cannot be a substitute for the Recipient to perform the proper level of due diligence required to make any decision in connection herewith. In addition, the Report should not be treated as a substitute for, and does not itself constitute, a warranty, indemnity or other protection customary for any contemplated transaction. Any analyses or advice contained in the Report are not intended by Houlihan Lokey, and should not be construed, to be investment advice in any manner whatsoever, or a recommendation to buy or sell any assets or securities of the Company. Houlihan Lokey assumes no responsibility for any financial and tax reporting judgments, which are appropriately those of management. It is Houlihan Lokey's understanding that management accepts the responsibility for any financial statement and tax reporting issues with respect to the assets covered in the Report. The Report does not constitute an opinion with respect to a potential sale of the Gonda Building air rights (the "Transaction"), nor a recommendation to any security holder of the Recipient or any other person as to how such person should vote or act with respect to the Transaction. The Report does not address, among other things: (i) the underlying business decision of any party to proceed with or effect the Transaction, (ii) any aspect of the consideration to be paid or received in, the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the Transaction or otherwise, (iii) the fairness of any portion or aspect of the Transaction to any party, (iv) the relative merits of the Transaction as compared with any alternative business strategies or transactions that might be available for any party, (v) the tax or legal consequences of the Transaction to any party, or (vi) whether or not any party is receiving or paying reasonably equivalent value in the Transaction. HOULIHAN LOKEY 87 Ir HOULIHAN LOKEY CORPORATE FINANCE FINANCIAL AND VALUATION ADVISORY SERVICES FINANCIAL RESTRUCTURING HL.cor