APPRAISAL OF A 384 UNIT MULTI-FAMILY APARTMENT COMPLEX

APPRAISAL OF

A 384 UNIT MULTI-FAMILY APARTMENT COMPLEX LOCATED AT

2000 SOUTH MAIN STREET BELLE GLADE, FLORIDA 33430

FOR

VAN JOHNSON, EXECUTIVE DIRECTOR PALM BEACH COUNTY HOUSING AUTHORITY

BY

ROBERT B. BANTING, MAI, SRA

STATE-CERTIFIED GENERAL REAL ESTATE APPRAISER RZ4

AND

MARK L. HEROLD STATE-CERTIFIED GENERAL REAL ESTATE APPRAISER RZ3138

WITH

ANDERSON & CARR, INC.

521 SOUTH OLIVE AVENUE WEST PALM BEACH, FLORIDA 33401

DATE OF INSPECTION: OCTOBER 12, 2011

DATE OF REPORT: DECEMBER 5, 2011 DATES OF VALUE AS-IS: OCTOBER 12, 2011

PROSPECTIVE (AS-COMPLETE): JUNE 1, 2012

FILE NO.: 2110513.000


««««««««««««««««««««««««««««««««««««««Appraisers • Realtors »»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»» ROBERT B. BANTING, MAI, SRA, PRESIDENT State-Certified General Real Estate Appraiser RZ4

521 South Olive Avenue West Palm Beach, Florida 33401-5907

www.andersoncarr.com Telephone (561) 833-1661

Fax (561) 833-0234

Quality Service Since 1947

December 5, 2011 Mr. Van Johnson Executive Director Palm Beach County Housing Authority 3432 West 45th Street, West Palm Beach, FL 33407 Dear Mr. Johnson: Pursuant to your request, we have personally appraised the real property being a 384 unit apartment complex called Belle Glade Gardens. The property contains 350,600 square feet of building area on a 1,422,234 square foot or 32.65 acre site. The subject has 27 apartment buildings, an office, a daycare/headstart facility, two community centers, a laundry room, and a convenience store. The subject property is located along the north side of Main Street, south of Downtown Belle Glade. The property address is 2000 South Main Street, Belle Glade, Florida 33430. We were provided with a survey of the subject but it was not legible. We contacted the company that originally prepared the survey and they informed us the survey was drawn so long ago they could not provide us with a more legible copy. Based on this we have relied on the building size information provided to us by the Palm Beach County Property Appraiser’s office. The Property Appraiser’s information appears to be accurate; however, if it were to prove incorrect, we reserve the right to amend this report. The subject property is currently under contract to be purchased by the Palm Beach County Housing Authority for a price of $17,500,000. This sales price equates to $45,572 per unit or $49.91 per square foot of enclosed building area. The buyer intends to use the property as affordable housing. The buyer is purchasing the property in “as is” condition. The contract is contingent on the value of this appraisal being at least $17,675,000, among other contingencies. Additionally, it is our understanding that according to the Department of Housing and Urban Development Neighborhood Stabilization Program Guidelines, the Palm Beach County Housing Authority can pay no more than 99% of the appraised value contained in this report, to purchase the subject property. The purpose of this self-contained narrative appraisal is to estimate the market value as-is and prospective market value as-renovated, fee simple estate, of the subject property as of October 12, 2011. The intended use of the report is to assist the client and intended user in acquisition by a public agency. This report has been prepared for no other purpose and for use by no other person or entity than for use by the client for the purpose stated herein. Any other use of this appraisal is considered a misuse and thus the appraisers will not be held responsible for any outcome associated with use by another entity or for another purpose.


Van Johnson Page 2 December 5, 2011 Our as-renovated market value estimate represents a condition that for the subject does not currently exist and so is considered a hypothetical condition. The as-renovated market value estimate is a prospective value opinion. The prospective value assumes the subject has been renovated and is based on conditions in effect, as of the appraisal's effective date; October 12, 2011. It assumes no change in underlying economic or market conditions. Any change in underlying economic or market conditions, or any change in the condition of the improvements, may impact value. Due to the unpredictability of future events, the actual value, as of the date of renovation, may differ from the value estimated in this report. We have forecast a six month renovation period; therefore, the date at which the stabilized conditions of valuation would exist would be June 1, 2012. We have utilized the sales comparison and income capitalization approaches to value, the most common methods used for valuing properties such as the subject property. As a result of our analysis, we have developed an opinion that based on conditions in effect as of October 12, 2011 the market value as-is and prospective market value as-renovated/complete (estimated to occur on January 0, 1900) of the fee simple estate (as defined in the report), subject to the definitions, certifications, and limiting conditions set forth in the attached report are as follows: MARKET VALUE AS-IS: PROSPECTIVE MARKET VALUE AS-RENOVATED/COMPLETE:

$10,000,000

$11,150,000

The following presents the appraisal in a self-contained narrative format. This letter must remain attached to the report, which contains 96 pages plus related exhibits, in order for the value opinion set forth to be considered valid. Your attention is directed to the Assumptions and Limiting Conditions contained within this report. Respectfully submitted, ANDERSON & CARR, INC. Robert B. Banting, MAI, SRA State-Certified General Real Estate Appraiser RZ4 Mark L. Herold State-Certified General Real Estate Appraiser RZ3138 RBB/MLH:cmp

Belle Glade Gardens A&C Job No.: 2110513.000

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TABLE OF CONTENTS Page No. Summary Of Important Facts And Conclusions .......................................................................................................................................................................... 1 Certification ..................................................................................................................................................................................................................................... 3 Assumptions And Limiting Conditions ......................................................................................................................................................................................... 4 Subject Property Photos (Taken October 12, 2011) .................................................................................................................................................................... 7 Aerial Photograph ......................................................................................................................................................................................................................... 18 Area/Location Maps...................................................................................................................................................................................................................... 20 Parcel Map ..................................................................................................................................................................................................................................... 21 Purpose And Date Of Report ...................................................................................................................................................................................................... 22 Property Appraised ....................................................................................................................................................................................................................... 22 Legal Description .......................................................................................................................................................................................................................... 22 Disclosure Of Competency........................................................................................................................................................................................................... 22 Intended Use And User................................................................................................................................................................................................................ 23 Client............................................................................................................................................................................................................................................... 23 Function To Emphasize Privity .................................................................................................................................................................................................... 23 Definitions ...................................................................................................................................................................................................................................... 23

Market Value............................................................................................................................................................................................................... 23 Personal Property, Furniture, Fixtures And Equipment........................................................................................................................................................... 24 Property Rights Appraised ........................................................................................................................................................................................................... 24 Typical Buyer Profile..................................................................................................................................................................................................................... 24 Scope Of Assignment .................................................................................................................................................................................................................... 24 Palm Beach County Summary...................................................................................................................................................................................................... 26 Everglades Agricultural Area (Eaa)............................................................................................................................................................................................ 30 The City Of Belle Glade ............................................................................................................................................................................................................... 32 Property Data................................................................................................................................................................................................................................. 35

Taxpayer Of Record.................................................................................................................................................................................................... 35 Palm Beach County Property Control Number(S) .................................................................................................................................................. 35 Assessed Value And Taxes For 2011 ........................................................................................................................................................................ 35 Census Tract ................................................................................................................................................................................................................ 35 Flood Zone Designation............................................................................................................................................................................................. 35 Zoning And Future Land Use ................................................................................................................................................................................... 36 Concurrency ................................................................................................................................................................................................................. 36 Utilities ......................................................................................................................................................................................................................... 36 Subject Property Sales History................................................................................................................................................................................... 37 Site Analysis ................................................................................................................................................................................................................. 37 Site Improvement Analysis......................................................................................................................................................................................... 38 Survey ........................................................................................................................................................................................................................... 39 Building Improvement Analysis................................................................................................................................................................................. 40 Building Area Calculations ........................................................................................................................................................................................ 41

Highest And Best Use................................................................................................................................................................................................................... 42 Exposure Time And Marketing Time ......................................................................................................................................................................................... 43 Income Capitalization Approach................................................................................................................................................................................................. 44

Subject Property Situation.......................................................................................................................................................................................... 45 Estimate Of Market Rent........................................................................................................................................................................................... 54 Rent Comparable Photos ........................................................................................................................................................................................... 57 Occupancy / Vacancy .................................................................................................................................................................................................. 60 Operating Expenses .................................................................................................................................................................................................... 60 Overall Capitalization Rate Selection....................................................................................................................................................................... 64 Capitalization Into Value ........................................................................................................................................................................................... 65

Sales Comparison Approach ........................................................................................................................................................................................................ 66 Comparable Sales Location Maps ............................................................................................................................................................................. 85 Sales Summary And Discussion................................................................................................................................................................................. 87 Conclusion.................................................................................................................................................................................................................... 92

Correlation And Final Value Opinion ........................................................................................................................................................................................ 94 Prospective Value Opinion........................................................................................................................................................................................................... 95 Qualifications for Robert B. Banting, MAI, SRA (St. Cert. Gen. REA RZ4) Qualifications for Mark L. Herold (St. Cert. Gen. REA RZ3138) Addendum – Bridge Design Associates Cost Estimate

Belle Glade Gardens A&C Job No.: 2110513.000


SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Client: Van Johnson, Executive Director Palm Beach County Housing Authority Intended User: Palm Beach County Housing Authority Taxpayer of Record: Prince of Belle Glade Gardens LLC Property Rights Appraised: Fee Simple Estate Special Assumptions Reference: None Location: The subject site is located along the north side of

Main Street, south of Downtown Belle Glade. Site/Land Area: The subject site contains 1,422,234 square feet or

32.65 acres. Improvements: Year Built: 1991 Condition: Average Building Size: 350,600 square feet an office, a daycare/headstart

facility, a two community centers, a laundry room, and a convenience store

FAR: 0.25 Zoning: RM – Residential Multifamily by Palm Beach County Flood Zone & Map Reference: Zone "B", Community Panel Number 120192 0100,

effective date of October 15, 1982. Current Use: Multi-family apartments Highest and Best Use: Multi-family apartments Exposure Time: Six to twelve months Marketing Time: Six to twelve months Estimated Property Values:

Value via Cost Approach: NA Value via Income Capitalization Approach: $10,050,000 Value via Sales Comparison Approach: $9,850,000

Belle Glade Gardens A&C Job No.: 2110513.000 1


Market Value Conclusion - As-Renovated: Market Value Conclusion - As-Is:

$11,150,000 $10,000,000

Date of Inspection: October 12, 2011 Date of Report: December 5, 2011 Date of Value: Date of Prospective Value (As-Complete):

October 12, 2011 June 1, 2012

Appraisers: Robert B. Banting, MAI, SRA State-Certified General Real Estate Appraiser RZ4 Mark L. Herold State-Certified General Real Estate Appraiser RZ3138



CERTIFICATION I 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, conclusions, and recommendations. We have not previously appraised this property in the prior three years. I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest with respect to the parties involved. I have no bias with respect to any property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. Mark L. Herold and Robert B. Banting, MAI, SRA have made a personal inspection of the property that is the subject of this report. No one provided significant real property appraisal or appraisal consulting assistance to the person signing this certification. As of the date of this report, Robert B. Banting, MAI, SRA has completed the continuing education program of the Appraisal Institute. As of the date of this report, Mark L. Herold has completed the Standards and Ethics Education Requirement of the Appraisal Institute for Associate Members. Robert B. Banting, MAI, SRA Mark L. Herold State-Certified General Real Estate Appraiser RZ4

State-Certified General Real Estate Appraiser RZ3138


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ASSUMPTIONS AND LIMITING CONDITIONS 1. Unless otherwise stated, the value appearing in this appraisal represents our opinion of the market value or the value defined as of the date specified. Values of real estate are affected by national and local economic conditions and consequently will vary with future changes in such conditions. 2. Possession of this report or any copy thereof does not carry with it the right of publication nor may it be used for other than its intended use. The physical report(s) remains the property of the appraiser for the use of the client. The fee being for the analytical services only. The report may not be copied or used for any purpose by any person or corporation other than the client or the party to whom it is addressed, without the written consent of an officer of the appraisal firm of Anderson & Carr, Inc. and then only in its entirety. 3. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations efforts, news, sales or other media without written consent and approval of an officer of Anderson & Carr, Inc. nor may any reference be made in such public communication to the Appraisal Institute or the MAI, SRA or SRPA designations. 4. The appraiser may not divulge the material contents of the report, analytical findings or conclusions, or give a copy of the report to anyone other than the client or his designee, as specified in writing except as may be required by the Appraisal Institute, as they may request in confidence for ethics enforcement or by a court of law or body with the power of subpoena. 5. Liability of Anderson & Carr, Inc. and its employees is limited to the fee collected for the appraisal. There is no accountability or liability to any third party. 6. It is assumed that there are no hidden or unapparent conditions of the property, sub-soil, or structures which make it more or less valuable. The appraiser assumes no responsibility for such conditions or the engineering which might be required to discover these facts. 7. This appraisal is to be used only in its entirety. All conclusions and opinions concerning the analysis which are set forth in the report were prepared by the appraisers whose signatures appear on the appraisal report. No change of any item in the report shall be made by anyone other than the appraiser and the appraiser and firm shall have no responsibility if any such unauthorized change is made. 8. No responsibility is assumed for the legal description provided or other matters legal in character or nature, or matters of survey, nor of any architectural, structural, mechanical, or engineering in nature. No opinion is rendered as to the title which is presumed to be good and merchantable. The property is valued as if free and clear of any and all liens and encumbrances and under responsible ownership and competent property management unless otherwise stated in particular parts of the report. 9. No responsibility is assumed for accuracy of information furnished by or from others, the clients, their designee, or public records. We are not liable for such information or the work of subcontractors. The comparable data relied upon in this report has been confirmed with one or more parties familiar with the transaction or from affidavit when possible. All are considered appropriate for inclusion to the best of our knowledge and belief. 10. The contract for appraisal, consultation or analytical service is fulfilled and the total fee payable upon completion of the report. The appraiser or those assisting the preparation of the report will not be asked or required to give testimony in court or hearing because of having made the appraisal in full or in part; nor engaged in post-appraisal consultation with client or third parties, except under separate and special arrangement and at an additional fee.



11. The sketches and maps in this report are included to assist the reader and are not necessarily to scale. Various photos, if any, are included for the same purpose and are not intended to represent the property in other than actual status as of the date of the photos. 12. Unless otherwise stated in this report, the appraisers have no reason to believe that there may be hazardous materials stored and used at the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. 13. The distribution of the total valuation of this report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal, no matter how similar and are invalid if so used. 14. No environmental or impact studies, special market studies or analysis, highest and best use analysis study or feasibility study has been requested or made unless otherwise specified in an agreement for services or in the report. Anderson & Carr, Inc. reserves the unlimited right to alter, amend, revise or rescind any of the statements, findings, opinions, values, estimates or conclusions upon any previous or subsequent study or analysis becoming known to the appraiser. 15. It is assumed that the property is in full compliance with all applicable federal, state, and local environmental regulations and laws unless the lack of compliance is stated, described, and considered in this appraisal report. 16. The value estimated in this appraisal report is gross without consideration given to any encumbrance, lien, restriction, or question of title, unless specifically defined. The estimate of value in the appraisal report is not based in whole or in part upon the race, color, or national origin of the present owners or occupants of the properties in the vicinity of the property appraised. 17. It is assumed that the property conforms to all applicable zoning, use regulations, and restrictions unless a nonconformity has been identified, described, and considered in this appraisal report. 18. It is assumed that all required licenses, certificates of occupancy, consents, and 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 opinion of value contained in this report is based. 19. It is assumed that the use of the land and improvements is confined within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report. 20. The Americans with Disabilities Act (ADA) became effective January 26, 1992. The appraisers have not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since the appraisers have no direct evidence relating to this issue, possible non-compliance with the requirements of the ADA in estimating the value of the property has not been considered.



21. This appraisal report has been prepared for the exclusive benefit of the client and intended users, Van Johnson, Palm Beach County Housing Authority. It may not be used or relied upon by any other party. Any party who uses or relies upon any information in this report, without the preparer's written consent, does so at his own risk. If this report is placed in the hands of anyone but the client, client shall make such party aware of all the assumptions and limiting conditions of this assignment. 22. We were provided with a survey of the subject but it was not legible. We contacted the company that originally drew the survey and they informed us the survey was drawn so long ago they could not provide us with a more legible copy. Based on this we have relied on the building size information provided to us by the Palm Beach County Property Appraiser’s office. The Property Appraiser’s information appears to be accurate; however, if it were to prove incorrect, we reserve the right to amend this report. 22. ACCEPTANCE OF, AND/OR USE OF THIS APPRAISAL REPORT CONSTITUTES ACCEPTANCE OF THE PRECEDING CONDITIONS.



SUBJECT PROPERTY PHOTOS (TAKEN OCTOBER 12, 2011)

Front of subject, looking east on Main Street

Security gate



Community store/clubhouse/laundry

Community office



Front of apartment building

Community daycare/headstart facility



Interior of property

Close up of apartment building



Interior of property

Rear of apartment building, notice separate electric meters



Rear of apartment buildings

Interior of office building



Community laundry room

One of two community pools



Community store

Community daycare



Kitchen of typical apartment

Typical bathroom



Another typical bathroom

Master bedroom, in typical 3 bedroom unit



Typical bedroom in one bedroom/one bath, second floor

Kitchen in one bedroom



AERIAL PHOTOGRAPH

Subject



Belle Glade

Subject



AREA/LOCATION MAPS



PARCEL MAP

Subject



PURPOSE AND DATE OF REPORT The purpose of this appraisal is to estimate the market value as-is and prospective market value as-renovated/complete, fee simple estate, of the subject property as of October 12, 2011. PROPERTY APPRAISED The subject is a 384 unit apartment complex called Belle Glade Gardens. The property contains 350,600 square feet of building area on a 1,422,234 square foot or 32.65 acre site. The subject has 27 apartment buildings, an office, a daycare/headstart facility, two community centers, a laundry room, and a convenience store. The subject property is located along the north side of Main Street, south of Downtown Belle Glade. The property address is 2000 South Main Street, Belle Glade, Florida 33430. We were provided with a survey of the subject but it was not legible. We contacted the company that originally prepared the survey and they informed us the survey was drawn so long ago they could not provide us with a more legible copy. Based on this we have relied on the building size information provided to us by the Palm Beach County Property Appraiser’s office. The Property Appraiser’s information appears to be accurate; however, if it were to prove incorrect, we reserve the right to amend this report. The subject property is currently under contract to be purchased by the Palm Beach County Housing Authority for a price of $17,500,000. This sales price equates to $45,572 per unit or $49.91 per square foot of enclosed building area. The buyer intends to use the property as affordable housing. The buyer is purchasing the property in “as is” condition. The contract is contingent on the value of this appraisal being at least $17,675,000, among other contingencies. Additionally, it is our understanding that according to the Department of Housing and Urban Development Neighborhood Stabilization Program Guidelines, the Palm Beach County Housing Authority can pay no more than 99% of the appraised value contained in this report, to purchase the subject property. LEGAL DESCRIPTION The following legal description for the subject property was taken from a survey provided by the property manager, a copy of which is provided in this report. Parcels A, C, D, E, F and G, Palm Glade Development PUD – Phases A & B according to the plat thereof, as recorded in Plat Book 62, Pages 83 through 85 of the Public Record of Palm Beach County. DISCLOSURE OF COMPETENCY Per the Competency Rule contained within the Uniform Standards of Professional Appraisal Practice, the appraisers hereby affirm that they are competent to complete the appraisal assignment for which they have been engaged by the client.



INTENDED USE AND USER The intended use of this report is to assist the client and intended user in acquisition by a public agency. The intended user of the report is Palm Beach County Housing Authority. This report has been prepared utilizing generally accepted appraisal guidelines, techniques, and methodologies as contained within the Uniform Standard of Professional Practice (USPAP), as promulgated by the Appraisal Foundation. As a State-Certified, Licensed or Registered Appraiser, the appraisers preparing this report are bound by these standards and regulated by the Florida Real Estate Appraisal Board of the Florida Department of Professional Regulation. This appraisal report has been prepared in a manner believed to be consistent with the guidelines contained in Title XI of the Financial Institution Reform Recovery and Enforcement Act of 1989 (FIRREA). CLIENT Van Johnson, Executive Director Palm Beach County Housing Authority 3432 West 45th Street, West Palm Beach, FL 33407 FUNCTION TO EMPHASIZE PRIVITY This appraisal report has been prepared for the exclusive benefit of Van Johnson, Palm Beach County Housing Authority, to assist the client and intended user in acquisition by a public agency. It may not be used or relied upon by any other party or for any other use. Any party who uses or relies upon any information in this report, without the preparer’s written consent, does so at his own risk. DEFINITIONS Market Value The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) Buyer and seller are typically motivated; (2) Both parties are well informed or well advised, and acting in what they consider their own best interests; (3) A reasonable time is allowed for exposure in the open market; (4) Payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) The price represents normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Source: Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA") and the Interagency Appraisal and Evaluation Guidelines, Federal Register, Volume 75, No. 237, December 10, 2010.



PERSONAL PROPERTY, FURNITURE, FIXTURES AND EQUIPMENT This appraised value does not include the personal property, furniture, fixtures and equipment (FF&E), if any, used in the operation of the intended use of the property. PROPERTY RIGHTS APPRAISED The property rights appraised are those of the fee simple estate. 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.”

Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal Institute, 2010).

TYPICAL BUYER PROFILE We found that buyers of similar properties in this market tend to be more experienced income investors such as individual trusts, limited partnerships or a corporation, with their main investment objective being the income stream. The income approach to value reflects the actions of typical buyers within this market. SCOPE OF ASSIGNMENT The traditional appraisal approaches include the cost approach, the sales comparison approach, and the income capitalization approach. We have considered all three and applied the sales comparison and the income capitalization approaches to value in this assignment. The cost approach is based on the principle of substitution, i.e. a buyer would pay no more for a property than the cost of acquiring a like site and constructing improvements with the same utility. This approach is most applicable when improvements are new and represent the highest and best use of the property and for special purpose properties when no comparisons are available. The older the improvements, however, the less reliable the approach becomes, due to the difficulty in estimating and supporting depreciation for older improvements. The subject was built in 1991 and has significant depreciation. Depreciation is difficult to isolate and quantify in older buildings and this limits the reliability of the cost approach. The cost approach was not developed because it was not considered necessary for credible assignment results, given the intended use of the appraisal. It is the appraiser’s view that a buyer in the case of the subject would not make a purchase decision based on a cost analysis. The appraisers have relied on the income capitalization and sales comparison approaches in valuing the subject property. These are the approaches a prudent investor would also rely upon in the decision making process. In the process of gathering data for the sales comparison approach to value, we conducted a search of our appraisal files and public information services such as the Palm Beach County Property Appraiser’s public access system and the Palm Beach County Clerk’s Office, as well as subscription based information sources such as CoStar.com and RealQuest.com for comparable sales in the relevant market area. We searched for the most similar sales to the subject property. Our sale search included similar size properties sold throughout the surrounding area with a primary focus on properties purchased within the recent past.



The sales ultimately selected for further analysis were the best comparable sales we were able to find in this market. We inspected the exterior of the comparables. We obtained and verified additional information on the comparable properties with a party to the transaction, or a broker or agent of the parties when possible. Rental data was gathered through the use of online services such as CoStar.com and Loopnet.com. A field search of the local market, review of this office’s past appraisal files of similar type properties and discussions with local brokers were also used to gather rental data. We inspected the interior and exterior of the subject property. Physical data pertaining to the subject property was obtained from an inspection of the premises and public information sources such as the Palm Beach County Property Appraiser’s records. Other data pertaining to the subject property was obtained from the Palm Beach County Clerk’s and Tax Collector’s offices and local planning and zoning departments. We were provided with a survey of the subject but it was not legible. We contacted the company that originally drew the survey and they informed us the survey was drawn so long ago they could not provide us with a more legible copy. Based on this we have based the subject size on information provided to us by the Palm Beach County Property Appraiser’s office. The Property Appraiser’s information appears to be accurate; however, if it were to prove incorrect, we would not be responsible. We make no warranty as to the authenticity and reliability of representations made by those with whom we verified sales, rental and other information. We have taken due care in attempting to verify the data utilized in this analysis. We based our analysis and conclusions on overall patterns rather than on specific representations. The product of our research and analysis is formulated within this report for analysis of and direct comparison with the subject property being appraised. Additionally, we have used original research performed in preparation of other appraisals by this office, which is considered appropriate for the subject property. This appraisal assignment is presented in a self-contained narrative report.



PALM BEACH COUNTY SUMMARY

Palm Beach County is located along Florida’s Southeast coast. It is bordered by Martin County to the north, Hendry County to the west, Broward County to the south and the Atlantic Ocean to the east. Palm Beach County is approximately 80 miles north of Miami and 260 miles south of Jacksonville. Interstate 95 is a major north/south thoroughfare connecting the county to the southeastern and northeastern portions of the state. Florida’s Turnpike also passes through the county and provides connections to the north central area of the state and Miami to the south. Other north/south highways include A1A, U.S. Highway 1, Congress Avenue, Military Trail and U.S. 441. There are numerous local east/west roadways with Southern Boulevard providing access to the western portions of the county, as well as Florida’s West Coast. Palm Beach County encompasses approximately 2,203 square miles with roughly 1,974 square miles of land area, 229 square miles of water, and 47 miles of coastline. The local weather features an average high temperature of 83 degrees and an average low temperature of 67 degrees. The average annual rainfall is 61 inches.



According to the U.S. Census Bureau’s 2010 statistics, Palm Beach County has an estimated population of 1,290,971. The vast majority of this growth has been a result of in-migration from the northern states as well

as from Miami- Dade and Broward Counties to the south. Palm Beach County ranks as the third most populous county in Florida behind Miami-Dade and Broward Counties.

The expanded Palm Beach International Airport is conveniently located to provide air service to Palm Beach County. The airport’s growth necessitated a new direct access overpass interchange with I-95 which significantly improved ingress and egress for PBIA. Other transportation services in Palm Beach County include the Florida East Coast Railway for rail service and The Port of Palm Beach. Tri-Rail provides commuter service through Miami-Dade, Broward and Palm Beach Counties. The unemployment rate in Palm Beach County was 11.7% for 2010 with the most recent figures for 2011 showing a drop to 10.6% according to the Florida Agency for Workforce Innovation. Tourism is the county's leading industry, employing over 70,000 people and generating about $2 billion dollars annually. The other multi-billion dollar industries have been construction and agriculture. All three industries have declined due to the current economic conditions. The largest employer in Palm Beach County is the Palm Beach County School Board with 21,495 employees and a $2.5 billion dollar budget for the 2010-2011 school year. The five largest private sector employers for Palm Beach County are shown on the following chart.

FIVE LARGEST PRIVATE SECTOR EMPLOYERS

Employer Type of Business Employees Tenant Healthcare Corp. Healthcare 4,500 Hospital Corp. of America Healthcare 3,411 Florida Power &Light Utilities 3,250 The Breakers Hotel 2,300 Office Depot Headquarters 2,180

The county includes 38 incorporated municipalities; the largest of which is West Palm Beach, the county seat. Boca Raton, located at the south end of the county, is the second largest city and one of the highest income retail trade areas in the United States. The Town of Palm Beach, Gulf Stream, and Manalapan are some of the wealthiest communities in the United States. Palm Beach County had a 2010 real estate tax base of more than 600,000 properties valued at nearly $126 billion, representing a value decrease of roughly 11% over 2009 figures which totaled approximately $141 billion. The residential and condo markets accounted for roughly 70% of the tax roll with 20% for commercial properties. The balance of the tax roll was made up of agricultural properties and tangible personal property. Commercial Real Estate According to CoStar’s Second Quarter 2011 data, the Palm Beach County commercial real estate market moderately improved during the second quarter of 2011 with specifics of each property class as follows.



Office The total vacancy rate for the Palm Beach County office market second quarter 2011 was 17.4%, down from 17.9% the previous quarter. Rental rates averaged $25.98 per square foot, a decrease from $26.05 per square foot the previous quarter. Net absorption for the second quarter 2011 was positive 317,688 square feet; up from positive 140,118 square feet in the prior quarter.

Industrial The Palm Beach County industrial market ended the second quarter 2011 with a 9.9% vacancy rate as compared to the 10.1% rate at the end of the first quarter 2011. Rental rates ended the second quarter 2011 at $8.08 per square foot, up from $8.07 per square foot the previous quarter. Net absorption was positive 141,867 square feet in the first quarter compared to positive 180,893 square feet in the second quarter 2011.



Retail The Palm Beach County retail market experienced fairly stabilized market conditions in the second quarter 2011. Vacancy rates remained stable at 7.9% in the first and second quarters. Average rental rates were up from $18.06 per square foot in the first quarter to $18.27 per square foot in the second quarter while second quarter net absorption of 33,194 square feet was down from 294,608 square feet the previous quarter.

Conclusion Some factors that have fed Palm Beach County’s past growth have diminished. In recent years, population growth has slowed and property values have declined. In the second quarter 2011, sales activity showed some recovery partially due to the declining values. All indications are that the current economic conditions are making a slow but steady recovery. The long-term outlook for the county is considered positive due to the broad employment base and desirability as a winter tourist destination. As population grows, more supporting commercial, industrial, and service development will be required. These factors, combined with a finite quantity of developable land, create a positive real estate outlook for the future.



EVERGLADES AGRICULTURAL AREA (EAA)

The Everglades Agricultural Area (EAA) consists of approximately 700,000 acres of farmland located south of Lake Okeechobee in central Florida. The agricultural region was created from the drainage of the northern Everglades by the Central and Southern Florida Project for Flood Control and Other Purposes (C&SF Project) of 1948. The Everglades Agricultural Area encompasses about 27% of the historic Everglades. It is defined by Florida Statute 373.4592 (15) as extending from the town of Clewiston in the northwest, toward the northeast following the U.S. Army Corps of Engineer’s Levee D-9 along the southern and southeastern portion of Lake Okeechobee to the L-8 canal in northwestern Palm Beach County. The L-8 canal forms the northeastern boundary of the EAA as it follows the L-8 canal southeast to Southern Boulevard. The line then extends south and west along the western boundary of the Arthur R. Marshall Loxahatchee National Wildlife Refuge to the Palm Beach County/Broward County line. The boundary extends westward along the county line following the path of the L-4 & L-5 canals to the Hendry County line in the west where it turns northward to return to the town of Clewiston.



The major crop of the EAA is sugar cane. Currently sugar cane is planted on approximately 440,000 acres in the EAA making it the most extensively grown row crop in Florida. Production of sugar cane is centered in Palm Beach County with 80% of the crop grown on the high organic matter muck soils within the EAA. Other major crops include sweet corn, bell peppers, cucumbers, radishes, lettuce, celery, herbs, and eggplant. Agriculture within the EAA depends on a relatively thin, continually shrinking layer of peat soil that overlies the limestone bedrock. In the sixty years since the area has been drained there has been substantial subsidence of the organic muck soil within the region. The causes include mechanical compaction, burning, shrinkage due to dehydration and most importantly oxidation of organic matter. Oxidation is a process that converts organic carbon in the soil to carbon dioxide gas and water. Protection of the muck soils from oxidation has lead in recent years to the introduction of rice cultivation in the region. Growing rice in the EAA is generally not very profitable. Most growers plant rice because flooding of the fields during rice production greatly reduces both oxidation and harmful soil pests such as nematodes. The rice itself contributes large amounts of straw to the fields which improves soil tillage and drainage. These and other factors can result in higher sugar cane yields. Commercial sod production has risen in Florida and approximately 14,000 acres of sod are currently grown in Palm Beach County. The muck soils of the EAA are conducive for growing sod because of its high fertility. Additionally the soil’s low bulk density makes sod grown on muck less expensive to ship than sod grown on heavier soils The EAA’s central location allows easy shipment to both the east and west coasts of Florida. The future of the sugar cane industry in Florida in general and within the EAA in particular has been called into question in recent years. In addition to subsidence and eventual potential depletion of the muck soils, foreign competition will play a major factor. The South Florida Water Management District, the state agency most knowledgeable regarding regional water related environmental issues, negotiated with US Sugar Corporation to purchase 73,000 acres of sugarcane land in the EAA for future reclamation as natural area. The long term effect on the labor force is not certain at this time. Conclusion In summary, the Everglades Agricultural Area has had a long history of production of a variety of agricultural products, most notably sugar cane. However, the long term climate for the agricultural industry in the EAA is uncertain due to both soil subsidence and foreign competition. The long range impact of the Everglades Restoration Project cannot be gauged. Water management, land conservation, and other environmental protection measures will play a vital role in determining how long the area can continue to support the vast agricultural industry.



THE CITY OF BELLE GLADE

The City of Belle Glade, in the western agricultural area of Palm Beach County, lies along the southeastern shore of Lake Okeechobee and is often referred to as the “Gateway to the Everglades”. It is located within an area known as the Everglades Agricultural Area (EAA). The area is dominated by sugar cane production, with some vegetable and sod production. There are three municipalities in the area, the largest of which is Belle Glade, followed by Pahokee and South Bay. State Road 80, known as Southern Boulevard in the eastern portion of the county, connects the region with the West Palm Beach metropolitan area, located about 45 miles to the east. This area of the road has undergone reconstruction and widening that resulted in an eight lane nonstop connector with elevated intersections which dramatically reduced the amount of time it takes to travel to and from the coast. State Road 80 also extends to the Fort Myers metro area, located about 90 miles to the west. US 441 extends northwest to the town of Okeechobee, in Okeechobee County and central Florida to the north. State Road 715 runs north and south immediately east of Lake Okeechobee, connecting South Bay and Belle Glade with Pahokee. The subject property is located along the north side of Main Street, a stretch of State Road 80 that runs through downtown Belle Glade. It is situated south of the central business district of the city. Many of the businesses located in the area are retail distributors for the growers and other retail businesses that service the needs of the agricultural base and its employees.



The two most important activities that have contributed to the development of Belle Glade are the agricultural industry and water sports on Lake Okeechobee. The agricultural industry is dominated by sugar cane production, however, an array of winter vegetable crops such as celery, lettuce, sweet corn, and peppers are also grown. There are numerous sod farms in the area and there has been a recent introduction of rice as a crop. Known for its largemouth bass, Lake Okeechobee offers world class fishing and boating. It is the second largest freshwater lake in the continental United States covering approximately 730 square miles or 467,000 acres. As of the 2010 census there were 17,467 people in the City of Belle Glade; 5,468 households; and 6,368 housing units. The census data from 2000 to 2010 shows a growth in the population of 17.2 percent. The median household income for 2010 was $28,409 for Belle Glade with 33.6 percent of the population living in poverty. This is compared to the State of Florida at $47,450 median income and only 13.2 percent poverty level. Conclusion The 2010 census data reflects several stark contrasts between the State of Florida and the City of Belle Glade. Most notable are:

• Percentage of people living in poverty • Median family income • Median value for owner occupied housing units

In conclusion, the City of Belle Glade is located in a low to moderate income agricultural area. Property values have declined noticeably over the past several years with recessionary economic conditions and high unemployment. The coastal regions are beginning to experience a slow economic recovery, but as yet, no evidence of that recovery can be seen in the City of Belle Glade.



The following chart compares census data for the City of Belle Glade to the State of Florida.



PROPERTY DATA Taxpayer of Record Prince of Belle Glade Gardens LLC Palm Beach County Property Control Number(s) 04-37-44-06-03-001-0000; 04-37-44-06-03-003-0000; 04-37-44-06-03-004-0000; 04-37-44-06-03-006-0000 Assessed Value and Taxes for 2011 The following information was taken from the Palm Beach County Property Appraiser’s and Tax Collector’s Web site.

Parcel ID Land ImprovementsTotal

AssessmentAd

Valorem TaxNon Ad

Valorem TaxTotal Tax

04-37-44-06-03-001-0000 $0 $0 $7,000,000 $183,681 $40,060 $223,741

04-37-44-06-03-003-0000 $24,776 $248,120 $272,896 $7,161 $1,164 $8,325

04-37-44-06-03-004-000 $230 $342,707 $342,937 $8,999 $1,729 $10,728

04-37-44-06-03-006-0000 $330 $0 $330 $9 $216 $225

Totals $25,336 $590,827 $7,616,163 $199,850.00 $43,169 $243,019

2011 SUBJECT ASSESSMENTS & TAXES

A typical informed buyer would recognize the probability of a reassessment following a sale of the property and the possibility that taxes could change as a result, if the assessed value is substantially different than the true market value. Our value conclusion does not discount for any taxes owed on the property, current or delinquent. The value assumes the property is free and clear and not subject to any prior year’s delinquencies or outstanding tax certificates. The appraisers strongly suggest any potential buyer, mortgagee or other investor in the property fully investigate the tax status of the subject property with the County’s Tax Collectors office. Census Tract The subject property is located in census tract 0082.03. Flood Zone Designation The subject property is located on the National Flood Insurance Program Map on Community Panel Number 120192 0100, effective date of October 15, 1982. The subject appears to lie in an area designated as zone "B". Flood Zone "B" is defined as areas between limits of the 100-year flood and 500-year flood; or certain areas subject to 100-year flooding with average depths less than one (1) foot or where the contributing drainage area is less than one (1) square mile; or areas protected by levees from the base flood.



Zoning and Future Land Use The subject property was annexed into the City of Belle Glade, however, the subject use is still dictated by the Palm Beach County Zoning Code and Comprehensive Plan. The Palm Beach County zoning maps indicate the subject property has a zoning designation of RM – Residential Multifamily. Permitted uses under this zoning category generally include, but are not limited to; residential uses, including single family homes, multi-family and parks. The subject’s current use as multifamily apartments is in line with the current zoning as a permitted use and the current zoning is in harmony with the future land use designation. The appraisers have not independently verified that the subject complies with current site development regulations (set backs, site coverage, etc.). It has been assumed that by virtue of the subject’s on-going use, should there be any areas of non-compliance, a variance has been issued or some other form of special exception has been made. Concurrency The strongest growth control measure ever imposed was passed by the Florida Legislature and became effective on February 1, 1990. This was mandated by Chapter 163, Florida Statutes, otherwise known as the "Growth Management Law." One provision of this law is referred to as "Concurrency" which dramatically limits the ability to develop real property. It is basically the requirement that adequate infrastructure be available to serve new development. Eight types of infrastructure are affected including traffic, potable water, sewer, drainage, solid waste, recreation and open space, mass transit, and fire rescue. In May of 2011, House Bill 7172 amended the Growth Management act in an effort to spur economic growth through streamlining and lessening growth management controls. Transportation concurrency requirements were exempted in dense urban land areas with populations of a least 1,000 people per square mile. Also, within dense urban land areas, the DRI process has been exempted. State review of local comprehensive plans was streamlined and zoning changes are now allowed to be considered concurrently with land use plan amendments. School concurrency timelines were extended until December 1, 2011 and penalties for failing to adopt school concurrency were removed. It is the appraisers’ understanding that the subject, as constructed, is not subject to any concurrency restrictions. Should the property be altered or redeveloped, the matter of concurrency would need to be revisited at that time. Utilities The subject property has all normal and customary public utilities available.



Subject Property Sales History The appraisers have not been provided with a title abstract on the property appraised nor have they conducted a title search of their own. The Palm Beach County Property Appraiser’s records indicate that the subject property last sold on January 24, 2008 for a price of $1. This sale was recorded in Palm Beach County OR Book 22410, Page 0153. The subject property is currently under contract to be purchased by the Palm Beach County Housing Authority for a price of $17,500,000. This sales price equates to $45,572 per unit or $49.91 per square foot of enclosed building area. The buyer intends to use the property as affordable housing. The buyer is purchasing the property in “as is” condition. The contract is contingent on the value of this appraisal being at least $17,675,000, among other contingencies. Additionally, it is our understanding that according to the Department of Housing and Urban Development Neighborhood Stabilization Program Guidelines, the Palm Beach County Housing Authority can pay no more than 99% of the appraised value contained in this report, to purchase the subject property. Site Analysis The following analysis is based upon the survey of the property provided to us by the property manager, a personal inspection of the site and Palm Beach County Public Records. Location The subject property is located along the north side of Main Street, south of Downtown Belle Glade. The property address is 2000 South Main Street, Belle Glade, Florida 33430. Size and Shape We have relied on the site size for the property from the Palm Beach County Property Appraiser. The site is an irregular shaped parcel of land having roughly 285 feet of frontage on South Main Street. The subject site area is approximately 1,422,234 square feet or 32.65 acres. Topography and Drainage Drainage appears to be adequate for its current use. No apparent drainage problems were noted during the inspection. However, the appraisers have not had the opportunity to visit the site during a time of heavy rainfall. It is assumed that the subject does not suffer from any detrimental drainage problems. Access Access is via east and west bound South Main Street.



Easements or Encroachments Typical utility easements are believed to exist. The survey that was provided did not delineate the boundaries of any potentially detrimental easements or encroachments. The appraisers did not note any such conditions nor did the property owner disclose any during our onsite inspection. We have no reason to believe that there are any easements or encroachments on the property that would affect its use in such a way as to have a negative impact on value Soil/Environmental Conditions We have not been provided with nor have we commissioned a soil or sub-soil condition report. The subject’s land appears to be composed of typical loose South Florida sand. The subject property is in an area known to contain muck. We have assumed de-mucking was preformed prior to construction. The appraisers have no reason to believe that there may be hazardous materials stored and used at the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. Site Improvement Analysis Site improvements include concrete aprons and drives, parking areas, signage, site lighting, and perimeter fencing. Landscape consists of grass sod areas, small trees and shrubs. The overall condition and appearance of the site improvements is average.



Survey



Building Improvement Analysis We have relied upon a personal inspection of the building as well as the Palm Beach County Public Records for the following building description. Year Built: 1991 Foundations: Poured concrete Basic Construction: Frame stucco Exterior Finish: Painted stucco Roof Support/Covering: Hip and gable, composition shingle roof over wood trusses Doors: Metal, solid core Windows: Double hung glass in metal frame Floors: Tile first floor, carpet second floor Ceiling: Painted drywall Interior Walls: Painted drywall Lighting: Fluorescent lighting Electric Service: Appears adequate Plumbing: Appears adequate Heating and Cooling: Central heat and air Fire Detection: None Appliances: Typical for market; oven and range, refrigerator and freezer Site Area: 1,422,234 square feet or 32.65 acres Building Area: 350,600 square feet an office, a daycare/headstart facility, a two community

centers, a laundry room, and a convenience store FAR: 0.25 Building Comments/ Condition: Property appeared to be in average overall condition. Signs of deferred

maintenance were noted during the appraisers' inspection, such as rotting wooden stairwells, fascia rot, parking lot repair, painting and general upkeep.



Actual Age: 20 Total Economic Life: 45 Effective Age: 15 Remaining Economic Life: 25 Physical Depreciation: 33% Functional Utility: The property appears to have good functional utility and does not appear to

suffer from functional obsolescence. Economic/External Obsolescence: No particular economic obsolescence due to the subject site, building, or

neighborhood characteristics. There is, however, general market wide economic obsolescence due to nationwide recessionary economic conditions.

Building Area Calculations We were provided with a survey of the subject but it was not legible. We contacted the company that originally prepared the survey and they informed us the survey was drawn so long ago they could not provide us with a more legible copy. Based on this we have relied on the building size information provided to us by the Palm Beach County Property Appraiser’s office. The Property Appraiser’s information appears to be accurate; however, if it were to prove incorrect, we reserve the right to amend this report.

Building SFClubhouse/Store 3,842

1,120Clubhouse 2,780Headstart 5,273Office 4,634Security Gate 164Service Building 2,379Total Other Buildings 20,192

ApartmentsTotal Apartment Buildings 330,408Total All Buildings 350,600

BELLE GLADE GARDENS



HIGHEST AND BEST USE The Appraisal Institute defines "highest and best use" as follows: 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. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Alternatively, the probable use of land or improved property—specific with respect to the user and timing of the use—that is adequately supported and results in the highest present value.


The analysis of highest and best use normally applies these considerations in a three step process, involving the analysis of the highest and best use of the site as if vacant, determination of the ideal improvement, and a comparison of the existing improvement with the ideal improvement, in order to estimate the highest and best use as improved. As Vacant The subject site is of sufficient size and configuration that it could physically support numerous uses, limited only by the fact that such uses must be legal, reasonable, probable, and a logical continuation of surrounding uses within the subject property's neighborhood. The subject is zoned RM – Residential Multifamily. Any number of uses would be legally possible. It is located in an area that is developed with a variety of uses. In consideration of the site's location, land use classification, zoning and surrounding uses, the highest and best use for the subject, as if vacant, would be future development with some type of multi-family residential building in keeping with the zoning, land use, and neighborhood uses. As Improved In the process of researching the subject market, the appraisers have determined that the subject improvements are substantial enough and in good enough condition that they add value to the site and it would not be economically justified to remove them at the present time. In consideration of the subject’s location, land use classification, zoning, surrounding uses and type and condition of current improvements, the highest and best use for the subject is its current use.



EXPOSURE TIME AND MARKETING TIME Exposure time is: 1) The time a property remains on the market; 2) The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Marketing time is an opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. (Advisory Opinion 7 of the Appraisal Standards Board of The Appraisal Foundation and Statement on Appraisal Standards No. 6, “Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions” address the determination of reasonable exposure and marketing time.)


In their third quarter 2011 issue, PwC Real Estate Investor Survey (formerly the Korpacz Real Estate Investor Survey) published by PwC (formerly PricewaterhouseCoopers), indicates an average marketing time of approximately 6.75 months for properties in the Southeast Region Apartment market. This is the same as the prior quarter and down from 7.58 months a year ago. The overall range was listed at three to 12 months. Additionally, we were able to locate marketing times for sale four in the sales comparison approach in this report. Sale four was marketed for 158 days prior to the sale. This marketing time support our conclusion of six to twelve months. Considering the preceding, as well as sales that have taken place in the local market, and assuming a prudent pricing strategy, we estimate an exposure time of six to twelve months. Looking forward, we feel this would be a reasonable estimate for marketing time as well.



INCOME CAPITALIZATION APPROACH The premise behind the income capitalization approach is that typical investors value a property based upon its ability to generate a net income. The Dictionary Of Real Estate Appraisal, Fourth Edition, 2002, by the Appraisal Institute, defines income capitalization approach as follows: “A set of procedures through which an appraiser derives a value indication for an income-producing property by converting its anticipated benefits (cash flows and reversion) into property value. This conversion can be accomplished in two ways. One year's income expectancy can be capitalized at a market-derived capitalization rate or at a capitalization rate that reflects a specified income pattern, return on investment, and change in the value of the investment. Alternatively, the annual cash flows for the holding period and the reversion can be discounted at a specified yield rate." The definition indicates that there are two methods, which may be applied under this approach: direct capitalization and discounted cash flow (DCF). Direct capitalization involves estimating the market rent, vacancy and collection losses, and expenses by comparing the subject property, with comparable properties, in order to arrive at an estimate of net operating income. The estimated net operating income is then capitalized at a market-oriented rate to estimate value. According to the Appraisal Institute's definition, one year's income expectancy can be capitalized at a rate, which reflects a specific income pattern. We derived capitalization rates both from national survey data, and from local sales, based on an analysis of the sale property's actual income and expenses at the time of sale, or on the buyer's estimate of income and expenses, when it could be ascertained. We then applied an appropriate cap rate, derived from the sales data, to an estimate of the subject's net operating income, as if leased at market rent. The following section of the appraisal describes this approach.



Subject Property Situation The subject is a 384 unit apartment complex called Belle Glade Gardens. The property contains 350,600 square feet of building area on a 1,422,234 square foot or 32.65 acre site. The subject property is located along the north side of Main Street, south of Downtown Belle Glade. The property address is 2000 South Main Street, Belle Glade, Florida 33430. The subject property is currently under contract to be purchased by the Palm Beach County Housing Authority for a price of $17,500,000. This sales price equates to $45,572 per unit or $54.25 per square foot. The buyer intends to use the property as affordable housing. The buyer is purchasing the property in “as is” condition. The contract is contingent on the value of this appraisal being at least $17,675,000, amongst other contingencies. The subject has a unit mix of 40 one bedroom/one bath units which have 637 square feet each, 192 two bedroom/two bath units which have 816 square feet each, 136 three bedroom/two bath units which have 950 square feet, and 16 four bedroom/two bath units which have 1,067 square feet. The subject is currently 48% occupied. Based on our discussions with the property manager, the subject occupancy is highly seasonal. Migrant workers who follow crop harvest and plantings make up a significant percentage of the rental income for the property. The income data we were provided for 2011 was as of June and did not yet reflect this. It is our understanding that the migrant workers typically begin to arrive in late October. Additionally, we were informed that the migrant housing is required to provide each worker 50 square feet of space and that the rent is $50.00 per week, per person. Based on this the subjects income could fluctuate widely based on the demand from migrant workers and the needs of the local agricultural businesses. It is not practical to project how many migrant workers might occupy the various apartments. On the following page is a current rent roll for the subject.



Unit TenantSquare

FootageMonthly

RentYearly Rent

Rent per SF

Move in Date

101 VACANT 950 $0.00 $0.00 $0.00 NA102 TEFFANIE WEST 950 $695.00 $8,340.00 $8.78 08/16/10103 VACANT 950 $0.00 $0.00 $0.00 NA104 ROBIN OTTIS 950 $695.00 $8,340.00 $8.78 02/02/11105 VACANT 816 $0.00 $0.00 $0.00 NA106 KEETHIA TOULOUTE 816 $595.00 $7,140.00 $8.75 02/07/11107 VACANT 816 $0.00 $0.00 $0.00 NA108 VACANT 816 $0.00 $0.00 $0.00 NA109 DANIEl DONALD 816 $595.00 $7,140.00 $8.75 12/08/99110 EDWARD SIMS & DAPHENE SIMS 816 $595.00 $7,140.00 $8.75 04/01/10111 EARLKEVIOUS T EBANKS 816 $595.00 $7,140.00 $8.75 12/08/99112 LASHIKA EARLEY 816 $595.00 $7,140.00 $8.75 03/11/11113 FREDDIE HICKS 950 $695.00 $8,340.00 $8.78 12/08/99114 VERONICA BUCKNER section 8 950 $724.00 $8,688.00 $9.15 08/01/09115 LATOYA A BLACK 950 $695.00 $8,340.00 $8.78 10/02/09116 JOHNNY POSEY 950 $695.00 $8,340.00 $8.78 NA201 JOHNNY McINTOSH/NEW 950 $695.00 $8,340.00 $8.78 01/02/10202 ROBERT L MARTIN 950 $695.00 $8,340.00 $8.78 03/16/09203 ROSIE B. ANDERSON 950 $695.00 $8,340.00 $8.78 02/05/10204 VACANT 950 $0.00 $0.00 $0.00 NA205 VACANT 816 $0.00 $0.00 $0.00 NA206 COLEMISHA SHERROD 816 $595.00 $7,140.00 $8.75 08/01/11207 SARA QUINTERO/EMPLOYEE 816 $0.00 $0.00 $0.00 03/16/09208 FREDDY ROBINSON 816 $595.00 $7,140.00 $8.75 09/24/10209 PAULINE LUCAS WPBHA"" 816 $745.00 $8,940.00 $10.96 01/01/05210 MARYBELL MATHIS wpbha 816 $795.00 $9,540.00 $11.69 02/01/09211 WILLIE LUMPKIN 816 $595.00 $7,140.00 $8.75 02/01/11212 BOBBY DEAN 816 $595.00 $7,140.00 $8.75 03/01/10213 ED HATCHER & WILLIE ARETHA JR. 950 $595.00 $7,140.00 $7.52 NA214 DIEDRA HOLLAND 950 $695.00 $8,340.00 $8.78 05/08/10215 VACANT 950 $0.00 $0.00 $0.00 NA216 TONYA DUCKWORTH 950 $695.00 $8,340.00 $8.78 12/01/09301 ELI BYLE & KAREN 950 $795.00 $9,540.00 $10.04 04/23/04302 WINNIE JACKSON 950 $745.00 $8,940.00 $9.41 08/01/89303 THERANCE KEARSE HA"" 950 $895.00 $10,740.00 $11.31 01/01/93304 FERNANDO BURITICA/EMPLOYEE 950 $0.00 $0.00 $0.00 NA305 SHIRLEY CLEMONES RBHA"" 816 $820.00 $9,840.00 $12.06 01/04/08306 JUANITA LYMAN 816 $595.00 $7,140.00 $8.75 11/11/09307 JAMES JACKSON JR. 816 $825.00 $9,900.00 $12.13 10/10/97308 VACANT 816 $0.00 $0.00 $0.00 NA309 TALISHA BROWN 816 $595.00 $7,140.00 $8.75 08/01/11310 TIFFANY STEWART 816 $595.00 $7,140.00 $8.75 03/15/11311 JESSICA PITTS 816 $595.00 $7,140.00 $8.75 03/01/11312 FRED WILLIAMS 816 $595.00 $7,140.00 $8.75 07/02/11313 SANDRA STEWART 950 $695.00 $8,340.00 $8.78 03/18/09314 VACANT 950 $0.00 $0.00 $0.00 NA315 MARIA CHAVEZ 950 $695.00 $8,340.00 $8.78 02/27/08316 VACANT 950 $0.00 $0.00 $0.00 NA

RENT ROLL BELLE GLADE GARDENS APARTMENTS



Unit TenantSquare

FootageMonthly

RentYearly Rent

Rent per SF

Move in Date

401 VACANT 950 $0.00 $0.00 $0.00 NA402 VACANT 950 $0.00 $0.00 $0.00 NA403 VACANT 950 $0.00 $0.00 $0.00 NA404 VACANT 950 $0.00 $0.00 $0.00 NA405 PATRICK JOSEPH 637 $495.00 $5,940.00 $9.32 08/01/11406 VALERIA HUGHER 637 $495.00 $5,940.00 $9.32 04/01/11407 VACANT 637 $0.00 $0.00 $0.00 NA408 VACANT 637 $0.00 $0.00 $0.00 NA409 BERNARD BROWN 637 $495.00 $5,940.00 $9.32 04/01/11410 ARCANISHA MEDINA 637 $495.00 $5,940.00 $9.32 03/01/10411 VACANT 637 $0.00 $0.00 $0.00 NA412 MARLON HATCHER 637 $550.00 $6,600.00 $10.36 03/01/08413 TKM 950 $3,160.00 $37,920.00 $39.92 10/01/09414 VERONICA BENITEZ 950 $695.00 $8,340.00 $8.78 10/19/09415 VACANT 950 $0.00 $0.00 $0.00 NA416 VACANT 950 $0.00 $0.00 $0.00 10/01/09501 BERGER, ALTOVIS/BRUCE THOMAS 950 $695.00 $8,340.00 $8.78 03/26/99502 LORETA FLOWERS 950 $695.00 $8,340.00 $8.78 05/11/11503 SHERRY TURNER 950 $695.00 $8,340.00 $8.78 08/01/11504 ANNETTE BENJAMIN 950 $695.00 $8,340.00 $8.78 06/01/11505 LEROY BROOKS 637 $495.00 $5,940.00 $9.32 04/01/05506 ANDREW RUIZ 637 $495.00 $5,940.00 $9.32 08/01/11507 VACANT 637 $0.00 $0.00 $0.00 NA508 TYRONNA ADAMS 637 $495.00 $5,940.00 $9.32 06/01/10509 JAVIER PULIDO 637 $495.00 $5,940.00 $9.32 06/15/10510 ROSANA AGUSTIN 637 $495.00 $5,940.00 $9.32 04/24/09511 CHARLOTE CHISTER 637 $495.00 $5,940.00 $9.32 07/21/09512 JESUS GASPAR 637 $495.00 $5,940.00 $9.32 05/18/11513 AURORA FAUST 950 $695.00 $8,340.00 $8.78 09/06/10514 TAMARA HARRIS 950 $695.00 $8,340.00 $8.78 03/02/11515 VACANT 950 $0.00 $0.00 $0.00 NA516 PAQUITA KING 950 $695.00 $8,340.00 $8.78 02/20/11601 JARMEN GREEN 816 $595.00 $7,140.00 $8.75 07/12/11602 MERVILIEN ALFRED 816 $595.00 $7,140.00 $8.75 09/01/11603 AMALIA GARCIA 816 $595.00 $7,140.00 $8.75 08/01/11604 VACANT 816 $0.00 $0.00 $0.00 NA605 ANGEL MARTINEZ 816 $595.00 $7,140.00 $8.75 08/01/11606 VACANT 816 $0.00 $0.00 $0.00 NA607 ALMEDIA GREENLE HA"" 816 $870.00 $10,440.00 $12.79 02/01/08608 GLENIES CRESPO 816 $595.00 $7,140.00 $8.75 03/07/09701 ANABELLE MATIAS 950 $695.00 $8,340.00 $8.78 08/03/10702 GWENDOLYNE TILLMAN & JAMORRIS WALKER 950 $795.00 $9,540.00 $10.04 NA703 MAXIMILIANO VALDEZ/EMPLOYEE 950 $0.00 $0.00 $0.00 03/13/09704 THELMA DUKES 950 $695.00 $8,340.00 $8.78 07/02/11705 VACANT 816 $0.00 $0.00 $0.00 NA706 VACANT 816 $0.00 $0.00 $0.00 NA707 LAKEDRA THOMAS 816 $595.00 $7,140.00 $8.75 11/08/10708 VACANT 816 $0.00 $0.00 $0.00 NA




Unit TenantSquare

FootageMonthly

RentYearly Rent

Rent per SF

Move in Date

709 MARIA LANUZA 816 $595.00 $7,140.00 $8.75 09/01/11710 WIDNA JOSEPH 816 $595.00 $7,140.00 $8.75 02/10/10711 YOANI REYNSO 816 $595.00 $7,140.00 $8.75 03/10/10712 BONIFACO RUIZ/JANETH MOLINA 816 $595.00 $7,140.00 $8.75 02/15/10713 VACANT 950 $0.00 $0.00 $0.00 NA714 TANGELA UPSHER RBHA"" 950 $925.00 $11,100.00 $11.68 10/02/98715 VACANT 950 $0.00 $0.00 $0.00 NA716 ARTURO MORALES 950 $695.00 $8,340.00 $8.78 01/01/10801 TARANGLIA L. HARDEW 950 $695.00 $8,340.00 $8.78 07/13/09802 DONISHA JHONSON 950 $695.00 $8,340.00 $8.78 09/08/10803 SHIRLEY BROWN 950 $895.00 $10,740.00 $11.31 10/03/05804 CARMEN CRAWFORD PHA"" 950 $895.00 $10,740.00 $11.31 11/09/01805 TAMARA RILEY 816 $595.00 $7,140.00 $8.75 5/5/2010806 VACANT 816 $0.00 $0.00 $0.00 NA807 LAWANDA LAWRENCE 816 $595.00 $7,140.00 $8.75 04/26/11808 LUCILLE HOLLEY & CURTIS HOLLEY SR. 816 $745.00 $8,940.00 $10.96 NA809 MELODY VAN 816 $595.00 $7,140.00 $8.75 07/09/10810 ANA GONZALEZ 816 $595.00 $7,140.00 $8.75 01/10/11811 VACANT 816 $0.00 $0.00 $0.00 NA812 VACANT 816 $0.00 $0.00 $0.00 NA813 VACANT 950 $0.00 $0.00 $0.00 NA814 MELISSA MITCHELL 950 $695.00 $8,340.00 $8.78 02/07/11815 RONNESHIA WILLIAMS 950 $695.00 $8,340.00 $8.78 09/09/11816 ELEXIS HARRIS 950 $695.00 $8,340.00 $8.78 02/07/11901 ADOPT A FAMILY 950 $800.00 $9,600.00 $10.11 09/01/09902 IYA WALKER 950 $695.00 $8,340.00 $8.78 NA903 ADOPT A FAMILY 950 $800.00 $9,600.00 $10.11 09/01/09904 ADOPT A FAMILY 950 $800.00 $9,600.00 $10.11 09/01/09905 ADOPT A FAMILY 816 $800.00 $9,600.00 $11.76 09/01/09906 ROKELA RUSSELL 816 $595.00 $7,140.00 $8.75 05/01/11907 ADOPT A FAMILY 816 $800.00 $9,600.00 $11.76 09/01/09908 ADOPT A FAMILY 816 $800.00 $9,600.00 $11.76 09/01/09909 ADOPT A FAMILY 816 $800.00 $9,600.00 $11.76 09/01/09910 VACANT 816 $0.00 $0.00 $0.00 NA911 ADOPT A FAMILY 816 $800.00 $9,600.00 $11.76 09/01/09912 VACANT 816 $0.00 $0.00 $0.00 NA913 VACANT 950 $0.00 $0.00 $0.00 NA914 ADOPT A FAMILY 950 $850.00 $10,200.00 $10.74 09/01/09915 ADOPT A FAMILY 950 $850.00 $10,200.00 $10.74 09/01/09916 VACANT 950 $0.00 $0.00 $0.00 NA

1001 VACANT 816 $0.00 $0.00 $0.00 NA1002 HARRINETTE JESSIE 816 $595.00 $7,140.00 $8.75 07/20/091003 VACANT 816 $0.00 $0.00 $0.00 NA1004 RUDY 816 $595.00 $7,140.00 $8.75 10/01/101005 VACANT 816 $0.00 $0.00 $0.00 NA1006 VACANT 816 $0.00 $0.00 $0.00 NA1007 LYLLIAM UMANA & TORIBIO UMANA 816 $595.00 $7,140.00 $8.75 04/01/101008 VACANT 816 $0.00 $0.00 $0.00 NA




Unit TenantSquare

FootageMonthly

RentYearly Rent

Rent per SF

Move in Date

1101 VACANT 950 $0.00 $0.00 $0.00 NA1102 VACANT 950 $0.00 $0.00 $0.00 NA1103 VACANT 950 $0.00 $0.00 $0.00 NA1104 VACANT 950 $0.00 $0.00 $0.00 NA1105 VACANT 816 $0.00 $0.00 $0.00 NA1106 VACANT 816 $0.00 $0.00 $0.00 NA1107 VACANT 816 $0.00 $0.00 $0.00 NA1108 VACANT 816 $0.00 $0.00 $0.00 NA1109 VACANT 816 $0.00 $0.00 $0.00 NA1110 VACANT 816 $0.00 $0.00 $0.00 NA1111 VACANT 816 $0.00 $0.00 $0.00 NA1112 ROBERT BUTTS 816 $595.00 $7,140.00 $8.75 12/26/911113 VACANT 950 $0.00 $0.00 $0.00 NA1114 VACANT 950 $0.00 $0.00 $0.00 NA1115 VACANT 950 $0.00 $0.00 $0.00 NA1116 VACANT 950 $0.00 $0.00 $0.00 NA1201 VACANT 1,067 $0.00 $0.00 $0.00 NA1202 VACANT 1,067 $0.00 $0.00 $0.00 NA1203 VACANT 816 $0.00 $0.00 $0.00 NA1204 VACANT 816 $0.00 $0.00 $0.00 NA1205 VACANT 816 $0.00 $0.00 $0.00 NA1206 VACANT 816 $0.00 $0.00 $0.00 NA1207 VACANT 816 $0.00 $0.00 $0.00 NA1208 VACANT 816 $0.00 $0.00 $0.00 NA1209 VACANT 816 $0.00 $0.00 $0.00 NA1210 VACANT 816 $0.00 $0.00 $0.00 NA1211 VACANT 1,067 $0.00 $0.00 $0.00 NA1212 VACANT 1,067 $0.00 $0.00 $0.00 NA1301 VACANT 950 $0.00 $0.00 $0.00 NA1302 VACANT 950 $0.00 $0.00 $0.00 NA1303 VACANT 950 $0.00 $0.00 $0.00 NA1304 VACANT 816 $0.00 $0.00 $0.00 NA1305 VACANT 816 $0.00 $0.00 $0.00 NA1306 VACANT 816 $0.00 $0.00 $0.00 NA1307 VACANT 816 $0.00 $0.00 $0.00 NA1308 VACANT 816 $0.00 $0.00 $0.00 NA1309 VACANT 816 $0.00 $0.00 $0.00 NA1310 VACANT 816 $0.00 $0.00 $0.00 NA1311 VACANT 816 $0.00 $0.00 $0.00 NA1312 VACANT 816 $0.00 $0.00 $0.00 NA1313 VACANT 950 $0.00 $0.00 $0.00 NA1314 VACANT 950 $0.00 $0.00 $0.00 NA1315 VACANT 950 $0.00 $0.00 $0.00 NA1316 VACANT 950 $0.00 $0.00 $0.00 NA1401 VACANT 950 $0.00 $0.00 $0.00 NA1402 JESUS NUÑEZ/EMPLOYEE 950 $0.00 $0.00 $0.00 11/16/061403 VACANT 950 $0.00 $0.00 $0.00 NA1404 VACANT 950 $0.00 $0.00 $0.00 NA




Unit TenantSquare

FootageMonthly

RentYearly Rent

Rent per SF

Move in Date

1405 VACANT 816 $0.00 $0.00 $0.00 NA1406 EDUARDO LORENZO 816 $595.00 $7,140.00 $8.75 08/02/101407 VACANT 950 $0.00 $0.00 $0.00 NA1408 NATALIA CRUZ 816 $595.00 $7,140.00 $8.75 06/01/101409 VACANT 816 $0.00 $0.00 $0.00 NA1410 VACANT 816 $0.00 $0.00 $0.00 NA1411 ERICA THOMAS 816 $595.00 $7,140.00 $8.75 05/16/091412 VACANT 816 $0.00 $0.00 $0.00 NA1413 VACANT 950 $0.00 $0.00 $0.00 NA1414 VACANT 950 $0.00 $0.00 $0.00 NA1415 VACANT 950 $0.00 $0.00 $0.00 NA1416 VACANT 950 $0.00 $0.00 $0.00 NA1501 MARCK JULES 637 $495.00 $5,940.00 $9.32 NA1502 VACANT 637 $0.00 $0.00 $0.00 NA1503 JULIA LEYTON 637 $495.00 $5,940.00 $9.32 01/12/101504 NORMAN/EMPLOYEE 637 $495.00 $5,940.00 $9.32 03/05/101505 VACANT 816 $0.00 $0.00 $0.00 NA1506 IRENE HERRERA/EMPLOYEE 816 $0.00 $0.00 $0.00 10/15/101507 VACANT 816 $0.00 $0.00 $0.00 NA1508 VACANT 816 $0.00 $0.00 $0.00 NA1509 VACANT 816 $0.00 $0.00 $0.00 NA1510 SHARON HILL 816 $595.00 $7,140.00 $8.75 NA1511 VACANT 816 $0.00 $0.00 $0.00 NA1512 VACANT 816 $0.00 $0.00 $0.00 NA1513 VACANT 637 $0.00 $0.00 $0.00 NA1514 VACANT 637 $0.00 $0.00 $0.00 NA1515 ANA BARBOSA 637 $495.00 $5,940.00 $9.32 06/01/111516 FRANTZYJEANTY 637 $495.00 $5,940.00 $9.32 07/15/101601 VACANT 816 $0.00 $0.00 $0.00 NA1602 GLENDA DAFFIN 816 $595.00 $7,140.00 $8.75 07/02/111603 VACANT 816 $0.00 $0.00 $0.00 NA1604 VACANT 816 $0.00 $0.00 $0.00 NA1605 VACANT 816 $0.00 $0.00 $0.00 NA1606 VACANT 816 $0.00 $0.00 $0.00 NA1607 ALEXANDER CORCHO/EMPLOYEE 816 $595.00 $7,140.00 $8.75 03/06/101608 TOMMY CURRINGTON 816 $595.00 $7,140.00 $8.75 07/03/091701 VACANT 950 $0.00 $0.00 $0.00 NA1702 VACANT 950 $0.00 $0.00 $0.00 NA1703 VACANT 950 $0.00 $0.00 $0.00 NA1704 VACANT 950 $0.00 $0.00 $0.00 NA1705 VACANT 816 $0.00 $0.00 $0.00 NA1706 VACANT 816 $0.00 $0.00 $0.00 NA1707 VACANT 816 $0.00 $0.00 $0.00 NA1708 VACANT 816 $0.00 $0.00 $0.00 NA1709 SHAQUASHA DELIA 816 $595.00 $7,140.00 $8.75 05/19/111710 PEDRO MARTINEZ 816 $595.00 $7,140.00 $8.75 11/20/091711 VACANT 816 $0.00 $0.00 $0.00 NA1712 VACANT 816 $0.00 $0.00 $0.00 NA




Unit TenantSquare

FootageMonthly

RentYearly Rent

Rent per SF

Move in Date

1713 VACANT 950 $0.00 $0.00 $0.00 NA1714 VACANT 950 $0.00 $0.00 $0.00 NA1715 VACANT 950 $0.00 $0.00 $0.00 NA1716 ARACELY ARRIGA/EMPLOYEE 950 $0.00 $0.00 $0.00 06/07/091801 GOODWILL 816 $800.00 $9,600.00 $11.76 04/07/091802 GOODWILL 816 $800.00 $9,600.00 $11.76 04/07/091803 VACANT 816 $0.00 $0.00 $0.00 NA1804 GOODWILL 816 $800.00 $9,600.00 $11.76 04/07/091805 GOODWILL 816 $800.00 $9,600.00 $11.76 04/07/091806 GOODWILL 816 $800.00 $9,600.00 $11.76 04/07/091807 GOODWILL 816 $800.00 $9,600.00 $11.76 04/07/091808 GOODWILL 816 $800.00 $9,600.00 $11.76 04/07/091901 VACANT 950 $0.00 $0.00 $0.00 NA1902 CENTLE HARRISON 950 $695.00 $8,340.00 $8.78 06/22/091903 VACANT 950 $0.00 $0.00 $0.00 NA1904 VACANT 950 $0.00 $0.00 $0.00 NA1905 EDDY ALFORD 816 $595.00 $7,140.00 $8.75 09/10/101906 VACANT 816 $0.00 $0.00 $0.00 NA1907 VACANT 816 $0.00 $0.00 $0.00 NA1908 VACANT 816 $0.00 $0.00 $0.00 NA1909 VACANT 816 $0.00 $0.00 $0.00 NA1910 VACANT 816 $0.00 $0.00 $0.00 NA1911 VACANT 816 $0.00 $0.00 $0.00 NA1912 VACANT 816 $0.00 $0.00 $0.00 NA1913 VACANT 950 $0.00 $0.00 $0.00 NA1914 BELINDA FORD 950 $695.00 $8,340.00 $8.78 08/21/091915 VACANT 950 $0.00 $0.00 $0.00 NA1916 VACANT 950 $0.00 $0.00 $0.00 NA2001 CECILLA SPENCER 950 $695.00 $8,340.00 $8.78 NA2002 VACANT 950 $0.00 $0.00 $0.00 NA2003 VACANT 950 $0.00 $0.00 $0.00 NA2004 VACANT 950 $0.00 $0.00 $0.00 NA2005 VACANT 637 $0.00 $0.00 $0.00 NA2006 NICOLAS HERNANDEZ/EMPLOYEE 637 $0.00 $0.00 $0.00 NA2007 LT BUCKNER 637 $495.00 $5,940.00 $9.32 11/11/102008 VACANT 637 $0.00 $0.00 $0.00 NA2009 KAREN SANDERS AND PERRY TRNADER 637 $495.00 $5,940.00 $9.32 07/07/982010 VACANT 637 $0.00 $0.00 $0.00 NA2011 VACANT 637 $0.00 $0.00 $0.00 NA2012 VACANT 637 $0.00 $0.00 $0.00 NA2013 VACANT 950 $0.00 $0.00 $0.00 NA2014 VACANT 950 $0.00 $0.00 $0.00 NA2015 VACANT 950 $0.00 $0.00 $0.00 NA2016 VACANT 950 $0.00 $0.00 $0.00 NA2101 VACANT 1,067 $0.00 $0.00 $0.00 NA2102 EXCELIA CATUL 1,067 $950.00 $11,400.00 $10.68 07/01/112103 VACANT 816 $0.00 $0.00 $0.00 NA2104 VACANT 816 $0.00 $0.00 $0.00 NA




Unit TenantSquare

FootageMonthly

RentYearly Rent

Rent per SF

Move in Date

2105 VACANT 816 $0.00 $0.00 $0.00 NA2106 VACANT 816 $0.00 $0.00 $0.00 NA2107 VACANT 816 $0.00 $0.00 $0.00 NA2108 VACANT 816 $0.00 $0.00 $0.00 NA2109 VACANT 816 $0.00 $0.00 $0.00 NA2110 VACANT 816 $0.00 $0.00 $0.00 NA2111 VACANT 1,067 $0.00 $0.00 $0.00 NA2112 VACANT 1,067 $0.00 $0.00 $0.00 NA2201 VACANT 950 $0.00 $0.00 $0.00 NA2202 VACANT 950 $0.00 $0.00 $0.00 NA2203 VACANT 950 $0.00 $0.00 $0.00 NA2204 VACANT 950 $0.00 $0.00 $0.00 NA2205 VACANT 816 $0.00 $0.00 $0.00 NA2206 VACANT 816 $0.00 $0.00 $0.00 NA2207 VACANT 816 $0.00 $0.00 $0.00 NA2208 VACANT 816 $0.00 $0.00 $0.00 NA2209 VACANT 816 $0.00 $0.00 $0.00 NA2210 VACANT 816 $0.00 $0.00 $0.00 NA2211 VACANT 816 $0.00 $0.00 $0.00 NA2212 VACANT 816 $0.00 $0.00 $0.00 NA2213 VACANT 950 $0.00 $0.00 $0.00 NA2214 VACANT 950 $0.00 $0.00 $0.00 NA2215 VACANT 950 $0.00 $0.00 $0.00 NA2216 VACANT 950 $0.00 $0.00 $0.00 NA2301 TYRON MILLES/ANGELA HAMILTON 1,067 $750.00 $9,000.00 $8.43 08/04/092302 JAMIAH J FORD 1,067 $950.00 $11,400.00 $10.68 08/02/102303 VACANT 816 $0.00 $0.00 $0.00 NA2304 FRANKY COLLINS 816 $595.00 $7,140.00 $8.75 01/01/102305 HERMAN BRYAN 816 $595.00 $7,140.00 $8.75 02/01/112306 HAROLD MUNNING 816 $595.00 $7,140.00 $8.75 03/13/092307 VACANT 816 $0.00 $0.00 $0.00 NA2308 LORENA GAYTON 816 $595.00 $7,140.00 $8.75 12/03/102309 ROBERT THOMAS 816 $595.00 $7,140.00 $8.75 9/1/20112310 WILFRED WALCOTT 816 $595.00 $7,140.00 $8.75 02/01/112311 EBONNIE WEBB 1,067 $950.00 $11,400.00 $10.68 07/02/102312 MARGARITA REZENDES/EMPLOYEE 1,067 $0.00 $0.00 $0.00 06/12/092401 SARA LOUISE MOLDEN 637 $495.00 $5,940.00 $9.32 05/22/112402 VACANT 637 $0.00 $0.00 $0.00 NA2403 VACANT 637 $0.00 $0.00 $0.00 NA2404 RONNY SYLVAN 637 $495.00 $5,940.00 $9.32 09/18/102405 TRACY SALET 816 $595.00 $7,140.00 $8.75 01/20/112406 VACANT 816 $0.00 $0.00 $0.00 NA2407 OSCAR BOATWRIGHT 816 $595.00 $7,140.00 $8.75 02/18/092408 FRANCISCA ROBLERO 816 $595.00 $7,140.00 $8.75 11/08/092409 PETER BELGRAVE 816 $595.00 $7,140.00 $8.75 11/19/092410 TARICK ANDERSON 816 $550.00 $6,600.00 $8.09 06/01/112411 SHIRLEY SAMPLES 816 $695.00 $8,340.00 $10.22 12/18/982412 CAPRECIA MILTON 816 $595.00 $7,140.00 $8.75 11/01/09




Unit TenantSquare

FootageMonthly

RentYearly Rent

Rent per SF

Move in Date

2413 VACANT 637 $0.00 $0.00 $0.00 NA2414 VACANT 637 $0.00 $0.00 $0.00 NA2415 LINCLON JOLLY 637 $495.00 $5,940.00 $9.32 03/13/102416 FARAK LOVVIASANT 637 $495.00 $5,940.00 $9.32 04/01/102501 VACANT 637 $0.00 $0.00 $0.00 NA2502 PATRICIA WILLIAMS 950 $695.00 $8,340.00 $8.78 06/03/092503 VACANT 950 $0.00 $0.00 $0.00 NA2504 VACANT 950 $0.00 $0.00 $0.00 NA2505 LATOYA RAYMOND / FRANCIS MOORE 816 $595.00 $7,140.00 $8.75 04/15/112506 BRITTANY CHRYSTER 816 $595.00 $7,140.00 $8.75 02/01/112507 MARY JEAN 816 $595.00 $7,140.00 $8.75 02/22/112508 RASHEKA BILLINGS 816 $595.00 $7,140.00 $8.75 10/01/102509 VACANT 816 $0.00 $0.00 $0.00 NA2510 REXFORDE BENJAMINE 816 $595.00 $7,140.00 $8.75 07/31/982511 MARY LONGSHAW HA"" 816 $795.00 $9,540.00 $11.69 02/11/942512 VACANT 816 $0.00 $0.00 $0.00 NA2513 VACANT 950 $0.00 $0.00 $0.00 NA2514 LATOYA SMITH 950 $695.00 $8,340.00 $8.78 05/04/092515 ANDREA BROWN 950 $695.00 $8,340.00 $8.78 09/01/112516 NICOLE THOMAS 950 $695.00 $8,340.00 $8.78 02/01/112601 VACANT 1,067 $0.00 $0.00 $0.00 NA2602 VACANT 1,067 $0.00 $0.00 $0.00 NA2603 VACANT 816 $0.00 $0.00 $0.00 NA2604 DELRONSHINA BROWN 816 $595.00 $7,140.00 $8.75 12/01/102605 VACANT 816 $0.00 $0.00 $0.00 NA2606 WARRELE GRAY 816 $595.00 $7,140.00 $8.75 12/04/092607 ALVIN GEORGE LONGSHAW WPBHA"" 816 $840.00 $10,080.00 $12.35 05/01/022608 WILLIAM CLARK 816 $595.00 $7,140.00 $8.75 03/08/112609 MARIANA VELASQUEZ 816 $595.00 $7,140.00 $8.75 11/01/102610 CHEATARA SMITH 816 $595.00 $7,140.00 $8.75 10/01/102611 VACANT 1,067 $0.00 $0.00 $0.00 NA2612 DEMTRIA REY 1,067 $900.00 $10,800.00 $10.12 08/01/092701 BETTY TAYLOR 950 $695.00 $8,340.00 $8.78 05/01/112702 ALICIA COLE 950 $695.00 $8,340.00 $8.78 02/19/102703 GEORGE BLAKE/PAMELA BLAKE 816 $695.00 $8,340.00 $10.22 08/03/102704 VACANT 950 $0.00 $0.00 $0.00 NA2705 ERICA WILLIS 816 $595.00 $7,140.00 $8.75 10/20/092706 VACANT 816 $0.00 $0.00 $0.00 NA2707 DAVID L JONES 816 $795.00 $9,540.00 $11.69 04/03/082708 ANGELA /JASMINETAYLOR 816 $595.00 $7,140.00 $8.75 02/05/102709 ALTON MACDONAL 816 $595.00 $7,140.00 $8.75 11/01/092710 LOUIDOMME DERRONVILLE 816 $595.00 $7,140.00 $8.75 03/01/102711 JACKEST BROWNING/JARVIS JACKSON 816 $595.00 $7,140.00 $8.75 04/15/112712 SHARRIA BENJAMIN 816 $595.00 $7,140.00 $8.75 02/07/112713 VACANT 950 $0.00 $0.00 $0.00 NA2714 VACANT 950 $0.00 $0.00 $0.00 NA2715 VACANT 950 $0.00 $0.00 $0.00 NA2716 ACQUANIITA ROSS 950 $695.00 $8,340.00 $8.78 NA

HEADSTART 5,273 $3,659.00 $43,908.00 $8.33 08/01/06LAUNDRY & STORE 4,962 $1,500.00 $18,000.00 $3.63 08/01/06

338,212 $123,148.00 $1,477,776.00 $4.37


The total square footage number presented here is taken from the property managers marketing materials and it does not agree with our building area calculations based on the information provided to us by the Palm Beach County Property Appraisers office.




Estimate of Market Rent In order to determine a market rental rate, we conducted a rental survey for apartments similar to the subject. These market rental rates were then reconciled to give an indication as to what the subject could be rented for on the open market. Our rental survey and discussion follows.



RComp.

ent Address Building Type Available Area Rent City Number of Units Unit Types Rent (SF) per Occupancy Comments

o. Date of Survey SFSpringBrook Commons Garden Apts. 1 Bed/1 bath $599.00 775 $0.775500 N Haverhill Road 144 Units 2 Bed/2 bath $659.00 955 $0.69 92%

West Palm Beach 3 Bed/2 bath $769.00 1,083 $0.71Merry Place Garden Apts. 1 Bed/1 bath $711.00 795 $0.89

451 Cheerful Court 130 Units 2 Bed/2 bath $847.00 1,084 $0.78 91%West Palm Beach 3 Bed/2 bath $971.00 1,295 $0.75525 SW 8th Street Apartments 2 Bed/1 bath $500.00 667 $0.75

Belle Glade 12 Units 2 Bed/1 bath $450.00 667 $0.67Glades Diamond Apartments 1 Bed/1 bath $1,053.00 650 $1.62100 Downs Circle 65 Units Efficiencies $997.00 450 $2.22 93%

Belle GladeR & D Apartments Apartments 2 Bed/1 bath $425.00 650 $0.65633 SW 8th Street 5 Units Efficiencies $350.00 280 $1.25 100%

Belle GladeBelle Glade Gardens Garden Apts. 1 Bed/1 bath $497.75 637 $0.782000 S Main Street 384 Units 2 Bed/2 bath $633.68 816 $0.78

Belle Glade 3 Bed/2 bath $726.42 950 $0.764 Bed/2 bath $900.00 1,067 $0.84

Property has 12 units and is rented wor without A/C

92%

Property is highly seasonal and would be considered a above average, hig

end property in the area48%

RENT COMPARABLES

1

2

3

5

ect

Property is affordable housing with income minimums and maximums

Property is affordable housing with income minimums and maximums

Property is rented without A/C

4Property is rented mostly as Section 8

housing with tenants paying 30% of rent

N

ith

her Subj

if they have income


Rent Comparables 3, 4, 5 and the subject

All of the rent comparables



Rent Comparable Photos

Rent Comparable 1

Rent Comparable 2



Rent Comparable 3

Rent Comparable 4



Rent Comparable 5

The comparable rental data covers space in Belle Glade and West Palm Beach. Overall rentals 1 and 2 are considered similar to the subject because of their large size, however, they are both located in West Palm Beach and they are both rent restricted. Rents 3 and 5 are in the subject immediate neighborhood; however, they are inferior to the subject in terms of condition and they both have few units and no amenities. Rent 4 is considered the most similar to the subject in terms of location and condition; however, it is rented as Section 8 housing. In short, rent at rent comparable 4 is set by the measuring market rents for the area and then adjusted to a percentage of the tenant’s income. In the preceding chart it appears as if the rent per square foot of rent 4 is much higher than the subject, however, after adjustment the rent per square foot falls to approximately $0.76, which is right in line with the other rentals and with the subject. In short, the subject has been well managed and the subject’s rents are in line with the rents in the area.



Occupancy / Vacancy The subject is currently 48% occupied. Based on our discussions with the property manager, the subject occupancy is highly seasonal. Migrant workers who follow crop harvest and plantings make up a significant percentage of the rental income for the property. The income data we were provided for 2011 was as of June and did not yet reflect this. It is our understanding that the migrant workers typically begin to arrive in late October. Additionally, we were informed that the migrant housing is required to provide each worker 50 square feet of space and that the rent is $50.00 per week, per person. Based on this, the subject’s income could fluctuate widely based on the demand from migrant workers and the needs of the local agricultural businesses. Overall, we estimate that if the subject property managers were able to rent the property to more year round tenants, they would. The subject is considered an above average apartment complex in the area. It is larger in square footage per unit than all of the comparables in Belle Glade. This by extension leads to higher rent than the other properties in the area. The property managers could drop rents in order to fill the property but this would almost certainly limit the ability of the property managers to profit from the migrant workers. Based on our rent comparables, our understanding of the subject area, and our discussion with local participants in this market; we have determined the subject’s current occupancy of 48% is the market occupancy, with the understanding that when the migrant workers arrive occupancy could expand to something nearing 90% for a short period of time. Operating Expenses We have been provided with a rent roll and income statements for 2007, 2008, 2009 and 2010, up to the end of June by the property manager. Because we were provided with income for only the first six months of 2011, the annualized income for 2011 appears to show income dropping substantially. In our discussions with the property manager, the onsite manager and the property owner who handles the books we were assured this was not the case. In previous years income for the property has spiked considerable in November because of the migrant workers arrival. We have based our estimates of effective gross income on the previous four years and the assurances of the management. A chart of income and expenses follows.



Income 2007 2008 2009 20102011

(Annualized)Our Estimate

Rental Income $3,274,390 $2,998,362 $3,048,628 $2,865,909 $1,818,882 $2,800,000Effective Gross Income $3,274,390 $2,998,362 $3,048,628 $2,865,909 $1,818,882 $2,800,000

ExpensesAdvertising $11,841 $22,676 $22,150 $1,000 $0 $5,000

Alarm $0 $3,926 $0 $3,252 $500 $1,500Annual Bond Fee $0 $0 $0 $0 $1,800 $1,800

Auto Expense $6,923 $5,787 $0 $2,088 $1,640 $2,000Auto Lease $414 $0 $0 $0 $0 $0

Bank Charges $6,617 $415 $4,052 $3,768 $1,456 $3,200Credit Card Collection Fee $1,822 $0 $0 $0 $0 $0

Casual Labor $0 $900 $0 $0 $0 $0Cable Service $6,749 $398 $1,182 $595 $576 $700

Check Reimbursement $508 $2,000 $0 $0 $0 $0Commissions $3,840 $1,800 $0 $0 $0 $1,000

Collection Fee $0 $0 $449 $116 $0 $100Contract Services $138,394 $102,137 $76,524 $50,489 $31,774 $50,000

Computer Expense $0 $588 $0 $412 $0 $200Dues & Subscriptions $0 $2,360 $0 $0 $0 $0

Entertainment & Promotions $450 $0 $0 $0 $0 $0Exterminator $8,150 $8,579 $400 $1,379 $450 $2,500

Evictions $8,366 $3,815 $2,625 $2,975 $8,048 $5,000Insurance $296,955 $172,010 $466,273 $338,631 $89,896 $250,000Internet $0 $215 $0 $0 $0 $0

Landscaping $42,827 $35,423 $16,055 $4,570 $0 $20,000Investigations $0 $180 $4,510 $5,635 $5,460 $3,100

Janitorial $5,205 $2,625 $1,425 $2,000 $0 $2,250Laundry $2,981 $17,657 $0 $0 $0 $0

Leased Employees $120,250 $508,843 $371,151 $334,795 $48,618 $270,000Legal & Accounting $69,007 $111,307 $62,697 $36,447 $125,970 $80,000Licenses & Permits $4,290 $415 $1,475 $1,300 $8,616 $3,200Management Fee $0 $0 $0 $0 $68,000 $112,000

Miscellaneous $3,400 $0 $0 $200 $0 $700Office Expenses $44,485 $103,504 $14,343 $3,098 $0 $5,000

Penalties $169 $0 $0 $506 $0 $150Professional Fees $22,125 $10,000 $11,658 $33,416 $0 $15,500

Pool Service $12,274 $14,481 $6,243 $7,954 $6,062 $8,000Professional Fees $5,359 $0 $0 $2,500 $0 $0

Promotion $1,900 $610 $986 $0 $0 $0Repairs & Maintenance $45,300 $159,656 $142,296 $88,195 $129,496 $150,000

Salary Officers $72,278 $0 $0 $0 $27,694 $28,000Salary & Wages $149,154 $0 $0 $0 $282,864 $80,000

Security $6,620 $781 $2,600 $0 $0 $2,000Screening Expense $0 $4,500 $0 $0 $0 $0

Storage $650 $0 $0 $0 $0 $0Supplies $32,722 $4,880 $15,287 $8,494 $4,178 $10,000

Tax - FICA $11,787 $0 $0 $0 $12,056 $5,000Tax - Federal Unemployment $881 $0 $0 $0 $0 $0

Tax - Other $68,568 $11,202 $105 $23,232 $0 $10,000Tax - Real Estate $413,174 $118,203 $238,752 $213,322 $213,302 $233,280

Tax - State Unemployment $1,001 $0 $0 $0 $4,412 $1,000Telephone $10,479 $4,531 $6,202 $14,065 $7,230 $8,000

Travel $1,100 $0 $0 $0 $0 $0Utilities $231,184 $225,106 $187,110 $138,555 $140,458 $185,000Waste $0 $2,350 $0 $0 $0 $0

Water & Sewer $444,469 $378,786 $390,555 $375,267 $361,584 $390,000Total Expenses $2,314,668 $2,042,646 $2,047,105 $1,698,256 $1,582,140 $1,945,180

Net Income $959,722 $955,716 $1,001,523 $1,167,653 $236,742 $854,820

Expense Ratio 70.69% 68.13% 67.15% 59.26% 86.98% 69.47%

INCOME STATEMENT FOR BELLE GLADE GARDENS APARTMENTS



Real Estate Taxes The subject is currently assessed at $7,616,163 with a tax liability of about $243,019. The subject is assessed below the value conclusion contained in this report, however, the assessment is within the range of assessed value and we have not changed it. Additionally, it is noted the subject is under contract to a government entity and if the purchase were to close the subjects property taxes would drop to only ad valorem costs. We have, however, assumed prudent management would pay taxes early and get the 4% discount making the taxes $233,280. Insurance Based on the past several years of actual expenses for insurance, we have set this expense at $250,000. Utilities

In the case of the subject, the landlord is responsible for providing water and sewer, common area electric and electric to the migrant workers apartments. It should be noted in our conversations with management, the property has separate water meters for each apartment and could be managed to allow the tenants to pay their own water. It has not been done previously because the meters would require some upgrading; however it could save a considerable amount to the property owner. Barring a change to the tenants paying for their own water and sewer, we consider the expenses as provided to us to be reasonable and have projected similar expenses in our estimates. Repairs and Maintenance / Reserve This category would include routine interior building repair and maintenance. The subject’s income statements contained several categories for this expense, including casual labor, contract services, landscaping, janitorial, and leased employees. The property owner is responsible for most repairs. The property is in average condition and has some deferred maintenance, such as rotting wooden stairwells, fascia rot, parking lot repair, painting and general upkeep. The appraisers have projected the maintenance expenses at approximately the same as the property has experienced over the past several years. Miscellaneous, Legal and Professional These expenses would include legal fees, accounting fees, appraisal fees, and any other professional services that might be required. These expenses can be substantial in some years because of attorney or appraisal fees, while almost non-existent in others when the building is occupied and operating smoothly. The appraisers have projected the miscellaneous, legal and professional expenses at approximately the same as the property has experienced over the past several years. Management Expenses Professional property management rates are generally 3% to 6% of effective gross income (EGI). Some owners self manage, and pay this fee to themselves or a related company. The subject’s management has not charged a management fee for operating the property in the data we were provided until the beginning of 2011. Because these fees are typical we have estimated the subject’s management expense at 4% of EGI going forward.



Reserves for Replacements Long-lived items such as roofs and air conditioning equipment are typically paid on an as needed basis and treated as capital expenditures. Rather than include reserves as its own separate line item expense in this analysis, it has been included within the maintenance and repair estimate, as the property manager has been operating in this manner. Total Expenses The subject has high expenses compared to other apartment properties. Overall we have agreed with the expenses as provided to us by the property owner. Based on this, our estimate reflects expenses at 70% of EGI. This would translate to $5,066 per unit per year in expenses. Based on several recent appraisals of multi-tenant residential properties the subjects expenses are below the range. These other properties had expenses of $8,087 per unit, $5,515 per unit, $6,143 per unit and $5,262 per unit; however these are all smaller properties with lower total units. Based on the subjects large number of units, and the expense data we have for the previous years, our estimate seems reasonable. Additionally, we would note that if the property were purchased by the Palm Beach County Housing Authority, expenses could be brought down dramatically. As a public entity they do not pay real estate taxes and there are opportunities to save on numerous other expenses based on the synergies of owning multiple properties, such as reduced insurance, maintenance, landscaping, office staff, legal fees, management fees and salaries.



Overall Capitalization Rate Selection Capitalization is the process of converting income into value. The estimated net operating income is capitalized by dividing it by an appropriate rate (overall cap rate). The cap rate is an expression of the ratio between net operating income and value. This rate typically reflects an investor's expectations from the anticipated net income as well as future appreciation. Generally, the stronger a property's growth prospects are, the lower is the capitalization rate. Likewise, the lower the quality of the risk, the higher the rate. Since properties such as the Subject are typically leveraged, the availability and cost of mortgage funds can have a significant impact on the overall rate analysis. The overall rate is normally derived via three methods; a) extraction from the market; b) band of investment; and c) investor surveys. These methods are detailed as follows. Market Extraction The equation utilized to extract overall rates directly from market sales is as follows: Ro = I/V Ro = overall capitalization rate (OAR) I = net income V = Value (purchase price) Primarily, a property’s location, age, condition, and other risk factors determine cap rates. Newer properties in the best locations have the lowest rates, because the risk is lower, and the potential for appreciation greater, and vice versa. Properties with below market leases will usually have a lower cap rate, reflecting the potential for rent increases on rollover. The PwC Real Estate Investor Survey (formerly known as Korpacz Real Estate Investor Survey) published by PwC (formerly known as Pricewaterhouse-Coopers), a national real estate market analysis publication, reports OAR’s for the national apartment market (third quarter 2011) from 3.75% to 10.00% with a mean of 5.98%. The RealtyRates Investor Survey (third quarter 2011) reports OAR’s for apartments on a national level from three methods: Debit Coverage Ratio, Band of Investment, and Surveyed Rates. This data has means of 7.76% (DCR), 8.58% (Band of Investment), and 9.09% (surveyed). The RealtyRates Market Survey (third quarter 2011) reports rates on four Florida market segments of 7.5%, 8.1%, 8.0%, and 7.8%, with a regional mean of 7.8%. In addition to the above, we found local sales data from CoStar Group that reported OAR information. This data is shown in the following chart. We were not, however, able to find any OAR’s in the Belle Glade, Pahokee, South Bay area. This is due to the area being a very small market. We have used OAR data from Eastern Palm Beach County as the closest available data.



Sale Date

OR Bk/Page

Property Address Sale Price OAR

23204 1441 Brandywine Rd.1148 West Palm Beach23257 9817 Arbor Oaks Ln.1407 Boca Raton23388 1909 Haverhill Rd.1480 West Palm Beach23412 1014 NE 9th Ave.1385 Delray Beach23598 1561 Stonehaven Dr0586 Boynton Beach24014 3500 Sandpiper Dr0734 Boynton Beach23911 110 N Lakeside Dr0156 Lake Worth24357 2304 N Congress Ave0756 Riviera Beach24529 222 SE 5th Ave0920 Boynton Beach24581 2500 10th Avenue N.1463 Lake Worth

MARKET DERIVED OAR'S

Apr-09 $10,951,794 8.15%

May-09 $39,150,000 9.00%

Jul-09 $4,265,000 10.64%

Aug-09 $1,050,000 10.00%

Dec-09 $18,800,000 7.44%

Aug-10 $33,527,000 7.18%

Jun-10 $1,825,000 8.50%

Feb-11 $14,980,000 8.50%

Jun-11 $9,300,000 6.40%

May-11 $2,400,000 8.80%

The local data reflects an OAR range from 6.40% to 10.64% with a mean of 8.46%. This data is well within the ranges by the published data. Additionally, it should be noted that OAR’s are trending downward, based on this data set. The OAR rates are reflective of typical apartment complexes. Based on the forgoing, an OAR for the subject is concluded at the middle of the range, because of the subject’s location, at 8.5%. Capitalization Into Value A net annual income of $854,820 capitalized with an 8.5% Overall Capitalization Rate calculates into a value of $10,056,706 as of October 12, 2011. Rounded to: VALUE VIA INCOME CAPITALIZATION APPROACH: $10,050,000



SALES COMPARISON APPROACH The sales comparison approach is the process of deriving a value indication for the subject property by comparing market information for similar properties with the property being appraised, identifying appropriate units of comparison, and making qualitative comparisons with or quantitative adjustments to the sale prices (or unit prices, as appropriate) of the comparable properties based on relevant, market-derived elements of comparison.


The sales comparison approach requires that the appraiser locate recent sales of similar properties and through an adjustment process arrive at an indication of what these properties would have sold for if they possessed all of the salient characteristics of the subject property. These adjusted sales prices are then correlated into an estimate of the market value of the property via the sales comparison approach to value. A search of Palm Beach County official records, local multiple listing service records, paid subscription data services, discussions with local brokers and appraisers and a personal inspection of the subject area produced several sales of similar type properties. The sales used in the analysis were the best comparables that we were able to verify with a party to the transaction. We compared the selected sales with the subject, considering differences and possible adjustments. We utilized a quantitative process to compare the subject property with the comparables to reflect a value for the subject property. The appraisers based the comparisons on a standardized unit of measure, the sale price per square foot and the sales price per unit. The sale price per square foot and the sales price per unit correlates well among the comparables and is commonly used by buyers in this type of analysis. The following pages feature a detailed write up of each comparable used in the analysis, a location map and summary of the selected comparable sales data, which is followed by a discussion of the pertinent adjustments and conclusion of value.



SALE NO. 1 - 170 W 3rd Street, 169 Adams Place, 314 Rardin Avenue, Pahokee, FL Our File No.: 290412

OR Book 22744, Page 1361 Type: Residential Sale Status: Sale Sub-Type: Multi-Family (5+ Units) Date: May 30, 2008 Grantor: Investor Solutions Grantee: Dov Baer Sclarow Legal: Lots 1, 2, 3, 4, 9, 11, 12, and 13, Block 1, Washington Park Subdivision, Plat Book 16,

Page 36, Palm Beach County, Florida. Folio No.: 48-37-42-18-16-001-0010, 48-37-42-18-16-001-0090

Location: West side of Rardin Avenue, south side of 3rd Street, and north side of Adams

Place, roughly 4 blocks east of Main Street and 1 block south of Lake Avenue, Pahokee.

Zoning: MF18 - Multifamily Residential, Medium Density by Pahokee Land Use: Residential Medium Density Utilities: All Available



Site Size: Square Feet: 34,848 Acres: 0.00 Front Feet: 0 Shape: Irregular Improvements: Gross Bldg. SF: 26,070 No. Bldgs: 2 Year Built: 1962 Stories: 3 Condition: Below average Construction: CBS Air Conditioning: None Parking: Street Amenities: Onsite Laundry Total Units: 52 Effective Units: 41.00

UNIT MIX Unit Type Quantity Unit Type Quantity

Efficiency 2 3 BR/1 BA 0 1 BR/1 BA 40 3 BR/1.5 BA 0 1 BR/1.5 BA 0 3 BR/2 BA 0 2 BR/1 BA 10 3 BR/2.5 BA 0 2 BR/1.5 BA 0 3 BR/3 BA 0 2 BR/2 BA 0 4 BR/2 BA 0

Use: Current Use: Rental Apartments Intended Use: Rental Apartments Highest and Best Use: Rental Apartments Verification: Source: Bradford Emmer Relationship: Listing Broker with EquityMax, Inc. Conditions of Sale: Arm's length Verified by: B. Arnold Date: August 28, 2009 Sales History: Property was transferred in March 2008 with a recorded price of $835,106, recorded

in OR BK 22510, PG 1387. It was reported that this transfer included a separate unrecorded assignment fee of roughly $463,894. Total transfer price was $1,299,000. It was also indicated that the seller was in default on their loan. Seller purchased the property in 2004 (OR BK 16606, PG 1379) for $875,000.

Sales Price: $1,225,000 Price/SF Building: $46.99 Price/Unit: $23,558 Price/Eff. Unit: $29,878 Financing: $1,188,250 provided by Equitymax Inc.



Comments: The buyer purchased this property as an investment, but soon found that the management needs were beyond their expertise. The buyer quit claimed the property to a new owner in January 2009 (recorded in OR BK 23190, PG 0491). The new owner, Rose Building LLC, assumed the financing. The property was relisted in the MLS on August 06, 2009 with an asking price of $1,300,000.



SALE NO. 2 - 525 SW 8th Street, Belle Glade, FL Our File No.: 2110513

OR Book 23847, Page 1164 Type: Residential Sale Status: Sale Sub-Type: Multi-Family (5+ Units) Date: May 03, 2010 Grantor: Clarence & Cynthia Brown Grantee: James Rhoden Legal: Lots 44, 45 and 46, Block 1, Rutledge Addition, as recorded in Plat Book 20, Page

35, Palm Beach County Folio No.: 04-37-43-42-08-001-0440

Location: East side of SW 8th Street, just south of SW Avenue E, Belle Glade Zoning: R2 - Residential 2 by Belle Glade Land Use: Residential Utilities: All Available

Site Size: Square Feet: 9,148 Acres: 0.21 Front Feet: 91 Shape: Rectangular



Improvements: Gross Bldg. SF: 8,009 No. Bldgs: 1 Year Built: 1966 Stories: 3 Condition: Below average Construction: CBS Air Conditioning: Window units Parking: On-site, adequate Amenities: None Total Units: 12 Effective Units: 12.00



Use: Current Use: Multi-tenant apartments Intended Use: Multi-tenant apartments Highest and Best Use: Multi-tenant apartments Verification: Source: James Rhoden Relationship: Buyer Conditions of Sale: Arm's-length Verified by: Mark L. Herold Date: October 28, 2011 Sales History: Prior sale occurred in February 2010 at a price of $10.00 as recorded in OR Book

24382, Page 0711. This transaction does not appear to be arm's length Sales Price: $180,000 Price/SF Building: $22.47 Price/Unit: $15,000 Price/Eff. Unit: $15,000 Financing: Cash to Seller Comments: Property was purchased as an investment. The property has 12 units and currently 11 are occupied giving it occupancy of 92%. The asking rent for the property is $500 for an air conditioned unit and $450 for a unit without A/C. The property is seasonal and is usually rented by migrant workers.



SALE NO. 3 - 120 North State Market Road 1, Pahokee, FL Our File No.: 2110513

OR Book 23968, Page 0742 Type: Residential Sale Status: Sale Sub-Type: Multi-Family (5+ Units) Date: July 01, 2010 Grantor: John S. Ledakis Grantee: Lake Okeechobee ALF Legal: Lot 1, Friends Subdivision No 2, Plat Book 28, Page 123, less the south 10 feet for

canal right-of-way, Palm Beach County Folio No.: 48-37-42-17-06-000-0010

Location: East side of State Market Road, 3/4 mile north of Muck City Road, Pahokee Zoning: RM - Residential Medium by Pahokee Land Use: Residential Medium District Utilities: All Available

Site Size: Square Feet: 36,887 Acres: 0.85 Front Feet: 140 Shape: Irregular



Improvements: Gross Bldg. SF: 11,421 No. Bldgs: 1 Year Built: 1967 Stories: 1 Condition: Good Construction: CBS Air Conditioning: Central Parking: On-site, adequate Amenities: None Total Units: 23 Effective Units: 19.50



Use: Current Use: Assisted Living Facility Intended Use: Assisted Living Facility Highest and Best Use: Assisted Living Facility Verification: Source: Deborah C. Peck Relationship: Buyer Conditions of Sale: Arm's-length Verified by: Mark L. Herold Date: October 31, 2011 Sales History: The property was foreclosed via Certificate of Title in April 2010, as recorded in OR

Book 23782, Page 1218. The prior sale occurred in September 2008 via Quit Claim for $10, as recorded in OR Book 22841, Page 1087

Sales Price: $375,000 Price/SF Building: $32.83 Price/Unit: $16,304 Price/Eff. Unit: $19,231 Financing: Seller provided financing in the amount of $375,000 with a 20 year term Comments: The buyer confirmed the purchase and that they are licensed to operate as an assisted living facility. Building was renovated in 2005 and was converted from an apartment building with kitchens in the individual units to a group home with smaller units and a central kitchen.



SALE NO. 4 - 2304 North Congress Avenue, Riviera Beach, FL Our File No.: 2110293

OR Book 24357, Page 0756 Type: Residential Sale Status: Sale Sub-Type: Multi-Family (5+ Units) Date: February 03, 2011 Grantor: Seabreeze Harbor Apartments, Ltd. Grantee: Prospect Northlake, LP Legal: Long legal in Tract A of Wedgewood Plaza, Plat Book 56, Page 72, Palm Beach

County, Florida. Folio No.: 56-43-42-30-17-001-0020

Location: Northeast quadrant of West Blue Heron Boulevard and North Congress Avenue,

Riviera Beach. Zoning: RM-15 - Multiple Family by Riviera Beach Land Use: Medium Density Multiple Family Utilities: Water and sewer

Site Size: Square Feet: 1,753,638 Acres: 40.26 Front Feet: 1,250 Shape: Irregular



Improvements: Gross Bldg. SF: 433,243 No. Bldgs: 37 Year Built: 1987 Stories: 2 Condition: Below average Construction: Frame / Brick Air Conditioning: Central Parking: On-site, adequate Amenities: Clubhouse with gym, 2 pools, 2 tennis courts, basketball court, jogging

path around lake. Total Units: 520 Effective Units: 606.00



Use: Current Use: Multi-Family Intended Use: Multi-Family Highest and Best Use: Multi-Family Verification: Source: Peter Mekras, Continental Real Estate Relationship: Listing Broker Conditions of Sale: Arm's-length Verified by: Gary K. Orr Date: July 05, 2011 Sales History: $33,000,000, June 2006, OR 20555/1071; $11,000,000, September 2009, OR

23480/0110. Sales Price: $14,980,000 Price/SF Building: $34.58 Price/Unit: $28,808 Price/Eff. Unit: $24,719 Financing: $16,000,000 mortgage with UCF Trust (acquisition and renovation loan)



Comments: This is a large apartment complex of 37 two-story, wood and brick buildings. The property was listed for $18,500,000 and sold after 158 days on the market. Amenities include a clubhouse with gym, two pools, tennis courts, basketball court, and a jogging path around a five acre lake. The property was 48 percent occupied at the time of sale and needed interior and exterior renovations, including the amenities. The property sold with an OAR of 8.5 percent based on a stabilized occupancy proforma. Rents at the time were $648 for the 1/1 units, $741 for the 2/2 units, and $833 for the 3/2 units. There was about $1,000,000 taken out of the price for renovations which the buyer was to begin. The prior 2009 sale was reportedly a distressed sale with the property in even worse condition.



SALE NO. 5 - 5500 North Haverhill Road, West Palm Beach, FL Our File No.: 2110513

OR Book NA, Page NA Type: Residential Sale Status: Current Contract Sub-Type: Multi-Family (5+ Units) Date: November 02, 2011 Grantor: SpringBrook Commons LTD Grantee: West Palm Beach Housing Authority Legal: Very long legal, Lot 8, Adams Subdivision, Plat Book 20, Page 23, Palm Beach

County Folio No.: 74-42-43-01-01-000-0083

Location: southeast corner of 45th Street and North Haverhill Road (minus the hard corner),

West Palm Beach Zoning: MF32 - Multi-Family High Density by West Palm Beach Land Use: Multi-family Utilities: All Available

Site Size: Square Feet: 364,878 Acres: 8.38 Front Feet: 402 Shape: Irregular



Improvements: Gross Bldg. SF: 140,567 No. Bldgs: 7 Year Built: 1996 Stories: 3 Condition: Average Construction: Frame stucco Air Conditioning: Central Parking: On-site, adequate Amenities: Pool, playground, basketball court, community center Total Units: 144 Effective Units: 186.00



Use: Current Use: Multi-tenant apartments Intended Use: Multi-tenant apartments Highest and Best Use: Multi-tenant apartments Verification: Source: Chris Leonardo, Kevin Brooks Relationship: Seller and Buyer Conditions of Sale: Arm's-length Verified by: Mark L. Herold Date: November 01, 2011 Sales History: No sales in previous five years Sales Price: $2,900,000 Price/SF Building: $20.63 Price/Unit: $20,139 Price/Eff. Unit: $15,591 Financing: Cash to Seller



Comments: The seller confirmed the property is under contract. He was not able to confirm the exact price, however, he did inform us that the contract sales price was slightly under the $3,000,000 appraised value. The purchaser hopes to close by the end of November. The purchaser intends to continue to run the property as affordable housing. The purchaser owns another property next door and intends to run the two properties in conjunction and reduce staff. The purchaser also will be able to reduce expenses because as a government entity, they do not pay real estate taxes. The property is affordable housing and as such it must offer its apartments at below market rents. All residents of the subject must have a qualifying income above minimums and below maximums. Current asking rents are $599 per month for a one bedroom/one bath, $659 per month for a two bedroom/two bath and $769 per month for a three bedroom/two bath. The property is currently 92% occupied.



SALE NO. 6 - 425 SW Avenue D, Belle Glade, FL Our File No.: 2110513

OR Book NA, Page NA Type: Residential Sale Status: Current Listing Sub-Type: Multi-Family (5+ Units) Date: October 31, 2011 Grantor: Belle Glade Garden, LLC Grantee: NA Legal: Lots 3 and 4, Block 4, of Glade, Plat Book 14, Page 55, Palm Beach County Folio No.: 04-37-43-31-15-04-0030

Location: North side of Avenue D, just north of Martin Luther King Boulevard, Belle Glade Zoning: B2 - Business 2 by Belle Glade Land Use: Residential Utilities: All Available

Site Size: Square Feet: 8,500 Acres: 0.20 Front Feet: 100 Shape: Rectangular



Improvements: Gross Bldg. SF: 12,573 No. Bldgs: 1 Year Built: 1962 Stories: 3 Condition: Below average Construction: CBS Air Conditioning: None Parking: On-site, adequate Amenities: None Total Units: 30 Effective Units: 15.00



Use: Current Use: Multi-tenant apartments Intended Use: Multi-tenant apartments Highest and Best Use: Multi-tenant apartments Verification: Source: Patrick Killen Relationship: Listing broker Conditions of Sale: Arm's-length Verified by: Mark L. Herold Date: October 31, 2011 Sales History: Sold in August 2007 for $550,000 as recorded in OR Book 22022, Page 0391 Sales Price: $479,000 Price/SF Building: $38.10 Price/Unit: $15,967 Price/Eff. Unit: $31,933 Financing: NA Comments: Property is in below average condition. The tenants pay all utilities. The marketing materials indicate the property has occupancy of 60%.



SALE NO. 7 - 2000 South Main Street, Belle Glade, FL Our File No.: 2110513

OR Book NA, Page NA Type: Residential Sale Status: Current Contract Sub-Type: Multi-Family (5+ Units) Date: November 07, 2011 Grantor: Prince of Belle Glade Gardens, LLC Grantee: Palm Beach County Housing Authority Legal: Parcels A, C, D, E, F and G, Palm Glade Development PUD – Phases A & B

according to the plat thereof, as recorded in Plat Book 62, Pages 83 through 85 of the Public Record of Palm Beach County

Folio No.: 04-37-44-06-03-001-0000; 04-37-44-06-03-003-0000; 04-37-44-06-03-004-0000; 04-37-

44-06-03-006-0000

Location: North side of Main Street, south of Downtown Belle Glade Zoning: RM - Residential Multifamily by Palm Beach County Land Use: Residential Utilities: All Available

Site Size: Square Feet: 1,422,234 Acres: 32.65 Front Feet: 285 Shape: Irregular



Improvements: Gross Bldg. SF: 350,600 No. Bldgs: 33 Year Built: 1991 Stories: 2 Condition: Average Construction: Frame stucco Air Conditioning: Central Parking: On-site, adequate Amenities: Clubhouse, laundry room, pool, daycare/headstart, security, onsite

convenience store Total Units: 384 Effective Units: 502.00



Use: Current Use: Multi-tenant residential Intended Use: Multi-tenant residential Highest and Best Use: Multi-tenant residential Verification: Source: Van Johnson Relationship: Executive Director, Palm Beach County Housing Authority Conditions of Sale: Arm's-length Verified by: Mark L. Herold Date: November 07, 2011 Sales History: Previously sold for $1 in January 2008, recorded in OR Book 22410, Page 0153 Sales Price: $17,500,000 Price/SF Building: $49.91 Price/Unit: $45,573 Price/Eff. Unit: $34,861 Financing: Cash to Seller



Comments: The property is a 384 unit apartment complex called Belle Glade Gardens. The property has 27 apartment buildings, an office, a daycare/headstart facility, two community centers, a laundry room, and a convenience store. The property has a unit mix of 40 one bedroom/one bath units which have 637 square feet each, 192 two bedroom/two bath units which have 816 square feet each, 136 three bedroom/two bath units which have 950 square feet, and 16 four bedroom/two bath units which have 1,067 square feet. The property is currently 48% occupied. Based on our discussions with the property manager, the property occupancy is highly seasonal. Migrant workers who follow crop harvest and plantings make up a significant percentage of the rental income for the property. It is our understanding that the migrant workers typically begin to arrive in late October. Additionally, we were informed that the migrant housing is required to provide each worker 50 square feet of space and that the rent is $50.00 per week, per person. Based on this the subjects income could fluctuate widely based on the demand from migrant workers and the needs of the local agricultural businesses.




Comparable Sales Location Maps

The subject and sales 1, 2, 3, and 6

The subject and all of the sales



Sait

May-

May-

J

F

Curr.Con

Curr. L

Subjof V

Oct-1

,967

,572

,558

,000

,808

,139

,304

le No.Date

OR BkPage

Property AddressLand SF

AcresYearBuilt

Gross Bldg. SF

No. ofUnits

Average Unit Size

FARSalePrice

Price/ Gross

Bldg. SF

Price/Un

1 22744 170 W 3rd Street 34,848

08 1361 Pahokee 0.80

2 23847 525 SW 8th Street 9,148

10 1164 Belle Glade 0.21

3 23968 120 North State Market Road 36,887

ul-10 742 Pahokee 0.85

4 24357 2304 North Congress Avenue 1,753,638

eb-11 756 Riviera Beach 40.26

5 NA 5500 North Haverhill Road 364,878

t. NA West Palm Beach 8.38

6 NA 425 SW Avenue D 8,500

ist NA Belle Glade 0.20

. Date alue

2000 South Main Street 1,422,234

1 Belle Glade 32.65

$15

$1,225,000

$180,000

$375,000

26,070

N/A $45$49.91913384350,600

$22.47

0.39

1962 12,573 30 419 $479,000 $38.10

17,500,000$

$14,980,000

$2,900,000144 976

1.48

0.25833433,243

497

8,009

11,421

52

667

501 0.75

0.88

0.31

$46.99

$32.83

$23

$15

$28

$20

$16

$34.58

$20.63

0.25

12

23

1996 140,567

5201987

IMPROVED SALES SUMMARY CHART

1962

1966

1967

1991

le No.Date

OR BkPage

Property AddressLand SF

AcresYearBuilt

Gross Bldg. SF

No. ofUnits

Average Unit Size

FARSalePrice

Price/ Gross

Bldg. SF

Price/Un

1 22744 170 W 3rd Street 34,848

08 1361 Pahokee 0.80

2 23847 525 SW 8th Street 9,148

10 1164 Belle Glade 0.21

3 23968 120 North State Market Road 36,887

ul-10 742 Pahokee 0.85

4 24357 2304 North Congress Avenue 1,753,638

eb-11 756 Riviera Beach 40.26

5 NA 5500 North Haverhill Road 364,878

t. NA West Palm Beach 8.38

6 NA 425 SW Avenue D 8,500

ist NA Belle Glade 0.20

. Date alue

2000 South Main Street 1,422,234

1 Belle Glade 32.65

$15

$1,225,000

$180,000

$375,000

26,070

N/A $45$49.91913384350,600

$22.47

0.39

1962 12,573 30 419 $479,000 $38.10

17,500,000$

$14,980,000

$2,900,000144 976

1.48

0.25833433,243

497

8,009

11,421

52

667

501 0.75

0.88

0.31

$46.99

$32.83

$23

$15

$28

$20

$16

$34.58

$20.63

0.25

12

23

1996 140,567

5201987

IMPROVED SALES SUMMARY CHART

1962

1966

1967

1991



Sait

May-

May-

J

F

Curr.Con

Curr. L

Subjof V

Oct-1

,967

,572

,558

,000

,808

,139

,304


Sales Summary and Discussion In this analysis, we considered differences between the sales and the subject in terms of property rights sold, conditions of sale, financing, market conditions (trend or time adjustment), location, unit and project size, and quality and condition of the improvements. Property Rights All of the comparable sale properties were subject to short term leases, none of which were known to the appraisers to be significantly above or below market. Therefore, the property rights transferred were believed to be those of the fee simple estate. No differences between the comparables and the subject are reflected. Conditions of Sale All sales were reportedly market oriented; however, sale 5 is a current listing and is not yet sold. Given current market conditions it seems unlikely any buyer would pay full asking price, therefore, we have adjusted this sale downward for this factor. Financing We considered any indication of favorable financing. All sales were either on a cash basis, or had market oriented financing, therefore, no differences were noted nor were adjustments made. Market Conditions The sales occurred over the period from May 30, 2008 to November, 2011. The market has shown declining market conditions over this time period. Based on this we have adjusted sale 1 downward 0.50% per month. Sales 2, 3, 4, 5 and 6 are more current and they have not been adjusted for this factor. Location The subject property is located along the north side of Main Street, south of Downtown Belle Glade. The property address is 2000 South Main Street, Belle Glade, Florida 33430. The subject’s location is considered similar to the locations of sales 1, 2, 3 and 6. These sales have not been adjusted for this factor. Sale 4 and 5 are located in Riviera Beach and West Palm Beach, in the eastern portion of Palm Beach County. This area is considered much more desirable and income and rents are substantially higher. Based on this we have adjusted sale 4 and 5 downward for their superior location.



Size Generally, larger properties will sell for a somewhat lower price per square foot than smaller ones, and vice versa, when all else is equal. When we looked at the sales on a price per unit basis we found that those sales having a larger average unit size tend to sell for more per unit, because they can generally command higher rents. Such is the case for the comparable sales. The comparables having the larger units tend to represent the upper end of the range when looked at on a price per unit, while the sales with the smaller units tend to represent the low end of the range. The average unit size of the comparables range from 419 square feet per unit up to 976 square feet, while the subject units contain average of 913 square feet per unit. Overall, the average unit size in Belle Glade and Pahokee sales is much smaller than the subject, with only sale 4 and 5 (in Riviera Beach and West Palm Beach) having an average unit size comparable to the subject. Because the subject units are much larger than all of the comparables in the immediate area, we have adjusted sales 1, 2, 3 and 6 upward to account for this factor. When we looked at the sales on a price per square foot of total gross building area basis we found that those sales having a larger total size tend to sell for less per square foot. The comparables having the larger total gross building area tend to represent the lower end of the range, while the sales with the smaller total gross building area tend to represent the high end of the range. Considering the subjects gross building area of 350,600 square feet, sales 1, 2, 3 and 6 have been adjusted downward for their smaller size Sale 4 and 5 are similar enough in size not to warrant direct adjustment. Quality/Condition/Appeal This consideration takes into account differences in quality of construction, the property’s physical condition and overall appeal. The subject property was reportedly built in 1991. The condition of the subject improvements is average, however, in the subjects market, average condition is considered superior to many of the competing properties. The subject has an office, a daycare/headstart facility, two community centers, a laundry room, a convenience store two pools (only one is functional), basketball courts and a playground. Sale 1 is considered similar to the subject in terms of quality and condition, however, it does not have air conditioning and we have adjusted it upward for its inferior appeal. Sale 2 is considered inferior to the subject on the basis of quality, condition and appeal and it has been adjusted upward. Sales 3, 4 and 5 needed renovations at the time of their purchase, however, they were usable, like the subject, and these sales have not been adjusted for this factor. Sale 6 is considered inferior to the subject on the basis of quality, condition and appeal and it has been adjusted upward. Lot Coverage The most significant factors involving lot coverage are the existence of surplus/excess land and the availability of on-site parking. This factor is reflected in site coverage. The floor area ratio (FAR) shows how many square feet of building exist for every square foot of land and is different from lot coverage and may or may not reflect adequate on-site parking or surplus/excess land. Sales 1, 2 and 6 have much less parking than the subject and we have adjusted these sales upward for this factor.




Economic Characteristics Economic characteristics include all the attributes of a property that affect its income. This element of comparison is usually applied to income-producing properties. Characteristics that affect a property’s income include operating expenses, quality of management, tenant mix, rent concessions, lease terms, lease expiration dates, renewal options, and lease provisions such as expense recovery clauses. Sale 5 is affordable housing and as such it must offer its apartments at below market rents. All residents of sale 5 must have a qualifying income above minimums and below maximums. Current asking rents are $599 per month for a one bedroom/one bath, $659 per month for a two bedroom/two bath and $769 per month for a three bedroom/two bath. Based on this and the difference between the effective gross income per unit of sale 5 and the subject we have adjusted this sale upward for its inferior income potential.


Sale No./Date

Property AddressAverage Unit Size

Gross Bldg. SF

Price/ Gross

Bldg. SF

Conditions of Sale/

Adj. Price/SF

Market Conditions/

Adj. Price/SFLocation Size

Cond/Appeal

FAR/LotCoverage

Economic Characteristics

Final Combined

Adjustment

OverallIndication

1 170 W 3rd Street 0% -20%

May-08 Pahokee $46.99 $37.59

2 525 SW 8th Street 0% 0%

May-10 Belle Glade $22.47 $22.47

3 120 North State Market Road 0% 0%

Jul-10 Pahokee $32.83 $32.83

4 2304 North Congress Avenue 0% 0%

Feb-11 Riviera Beach $34.58 $34.58

5 5500 North Haverhill Road 0% 0%

Oct-11 West Palm Beach $20.63 $20.63

6 425 SW Avenue D -5% 0%

Jan-00 Belle Glade $36.19 $36.19

Subj. Date of Value

2000 South Main Street 0% 0%

Oct-11 Belle Glade $49.91 $49.910%

0%

0%

0%

0%

15%

0%

QUANTITATIVE SALES ADJUSTMENT CHART - PRICE/SF GROSS BUILDING AREA

5%

-5%

$21.66

$34.38

$35.71

$26.97

$26.27

$31.12

-5%

20%

-20%

-10%

0%

-20% 5% 10%

0% 0%

0% 0% 0%

5% 10%

-15% 25% 10%

-20%

-20%

0%

0% $49.910% 0%0%$49.91

$46.99

$38.10

$22.47

$32.83

$34.58

$20.63

501

667

497

833

976

419

913

26,070

8,009

11,421

433,243

140,567

12,573

350,600

-10%

0%

0%

0%

-10%

0%

0%

0%




SaleDa

erallcation

Ma

Ma

Ju

Fe

Oc

Oc

Subjof Va

Oc

No./te

Property AddressAverage Unit Size

No. of Units

Price/Unit

Conditions of Sale/

Adj. Price/SF

Market Conditions/

Adj. Price/SFLocation Size

Cond/Appeal

FAR/LotCoverage

Economic Characteristics

Final Combined

Adjustment

OvIndi

1 170 W 3rd Street 0% -20%

y-08 Pahokee $23,558 $18,846

2 525 SW 8th Street 0% 0%

y-10 Belle Glade $15,000 $15,000

3 120 North State Market Road 0% 0%

l-10 Pahokee $16,304 $16,304

4 2304 North Congress Avenue 0% 0%

b-11 Riviera Beach $28,808 $28,808

5 5500 North Haverhill Road 0% 0%

t-11 West Palm Beach $20,139 $20,139

6 425 SW Avenue D -5% 0%

t-11 Belle Glade $15,168 $15,168

. Date lue

2000 South Main Street 0% 0%

t-11 Belle Glade $45,572 $45,572

QUANTITATIVE SALES ADJUSTMENT CHART - PRICE/UNIT

5%

40%

35%

50%

25%

-10%

$25,442

$22,500

$20,380

$25,927

$21,146

$21,236

0%

25% 5% 10%

0%0%

0%

0% 0% 0%

0%25%

10%

20% 20% 10%

5%20%

0% 0% 0% 0% $45,572$45,572 0%

$23,558

$15,000

$16,304

$28,808

384

$20,139

$15,967

144

52

12

23

520

30

976

419

501

667

497

833

913

0%

0%

0%

-10%

-10%

0%

0%

0%

0%

0%

15%

0%

0%


Conclusion Considering all of these differences, we developed the preceding quantitative comparison charts listing the sales as they compare to the subject property, based on a price per square foot of building area and price per unit. Not all categories considered are depicted. Those omitted reflect no differences between the sale and the subject property. Per Square Foot Basis The unadjusted range of value indicated by the comparables (excluding the subject) is roughly $20.63 to $46.99 per square foot of building area. The preceding quantitative comparison chart shows the value range for the subject property after adjustment (excluding the subject) based on a price per square foot of building area to be from $21.66 to $35.71 with a mean of $29.35. The subject is most similar to sales 1, 4 and 5, which have the largest unit counts. Sale 1 is the oldest sale and occurred in 2008. Sales 4 and 5 are located in the eastern portion of Palm Beach County and required adjustment for location. Based on the range of the data we have concluded at the average for the data. Considering all of the salient factors discussed previously and prevailing market conditions, the appraisers feel a conclusion in the middle portion of the indicated range is most appropriate. Given the preceding data and discussions, it is concluded that the market reflects a value per square foot of building area for the subject property of $29.00 as of October 12, 2011. Total value was calculated as follows: 350,600 Square Feet @ $29.00 per Square Foot = $10,167,400 Rounded to: Value via Price per Square Foot Method $10,170,000 Per Unit Basis The unadjusted range of value indicated by the comparables (excluding the subject) is roughly $15,000 to $28,808 per unit. The preceding quantitative comparison chart shows the value range for the subject property after adjustment (excluding the subject) based on a price per unit to be from $20,380 to $25,927 with a mean of $22,772. More specifically it indicates a value most similar to comparables 1, 4 and 5. Sale 1 is the oldest sale and occurred in 2008. Sales 4 and 5 are located in the eastern portion of Palm Beach County and required adjustment for location. Based on the range of the data we have concluded at the high end of the range for the data. Considering all of the salient factors discussed previously and prevailing market conditions, the appraisers feel a conclusion in the upper portion of the indicated range is most appropriate. Given the preceding data and discussions, it is concluded that the market reflects a value per unit for the subject property of $25,000 as of October 12, 2011. Total value was calculated as follows: 384 Units @ $25,000 per Unit = $9,600,000 Rounded to: Value via Price per Unit Method $9,600,000



Considering each methodology, the appraisers have concluded the following value via the sales comparison approach as of October 12, 2011 was: MARKET VALUE VIA SALES COMPARISON APPROACH: $9,850,000



CORRELATION AND FINAL VALUE OPINION Value via Cost Approach: N/A Value via Income Approach: $10,050,000 Value via Sales Comparison Approach: $9,850,000 In the final analysis, most weight has been placed upon the value conclusion produced through the income approach to value. As indicated in the scope of the assignment, the cost approach has not been utilized. The income capitalization approach is based upon an analysis of the income producing potential of the subject improvements. The income was well supported by the historic data provided by the property manager. The expenses are considered well supported by analysis of the expenses for the subject as well as the comparable rental data. This approach to value is a good indicator of value for investment type properties where sufficient rental and expense information is available and capitalization rates are sufficient to yield an appropriate rate. We were able to acquire rent comparables from the market, and actual operating expenses for this property. It is our opinion that many buyers in the current environment are willing to pay more than the income approach can support, in anticipation that rents will rebound in the future and they will be able to increase income. The sales comparison approach analyzed a total of six sales. These are all rental complexes that have recently sold or are offered for sale, on the open market. This data is considered reliable evidence of market value in today's market; however, we were not able to locate any sales of multi-tenant apartment complex that were similar to the subject in size in the Belle Glade, Pahokee, and South Bay area. Based on this, we have given the sales comparison approach less weight in our final value conclusion. In the final analysis, most consideration was given to the income approach to value with the sales approach receiving secondary weight. It is concluded that the market value of the subject property, as of October 12, 2011; was:

TEN MILLION DOLLARS

($10,000,000)



PROSPECTIVE VALUE OPINION Our as-renovated market value estimate represents a condition that for the subject does not currently exist and so is considered a hypothetical condition. The as-renovated market value estimate is a prospective value opinion. The prospective value assumes the subject has been renovated and is based on conditions in effect, as of the appraisal's effective date; October 12, 2011. It assumes no change in underlying economic or market conditions. Any change in underlying economic or market conditions, or any change in the condition of the improvements, may impact value. Due to the unpredictability of future events, the actual value, as of the date of renovation, may differ from the value estimated in this report. We have forecast a six month renovation period; therefore, the date at which the stabilized conditions of valuation would exist would be June 1, 2012. The Palm Beach County Housing Authority has proposed to make a number of renovations to the subject property. We have received an estimate of the improvements from the client. They include many upgrades and improvements to the subject property, including new tile, carpet, windows, exterior doors, exterior door handles, tubs, toilets, sinks, vanities, sink faucets, mirrors, medicine cabinets, bathroom light fixtures, dining room light fixtures, kitchen light fixtures, ranges, range hoods, refrigerators, kitchen sinks, sink faucets, overhead cabinets, kitchen countertops, interior door knobs and painting in all of the units. In total, the buyer is proposing to spend $15,780,088 including the unit renovations, site improvements, roof repairs, stair repairs, pools, basketball and tennis courts, new mechanical equipment(air conditioning) and electrical. This equates to $41,094 per unit in renovations cost. We have included this cost estimate in the addendum of this report. It is our understanding that these repairs are required under the guidelines of the grant programs the client is working with to purchase the property. We also discussed the subject property and its condition with the current owner. He conceded that there were some minor repairs that needed to be made to some stairwells, rotting fascia, and patching of asphalt. In total, he felt these repairs could be made for a total of $250,000, which equates to a $651 per unit. In our inspection of the subject property, we did note some deferred maintenance, including rotting fascia, stairwells, and potholes in the asphalt. However, none of these affected the ability of the property to operate and these areas of deferred maintenance are typical of these types of properties within this market. The typical buyer of a multi tenant apartment complex will defer maintenance so long as these items do not affect the income generating capacity of the property. The subject is in overall average condition, however, in the Belle Glade community, this property is above average for the area. This is evident in the rent the property receives as compared to the rent achieved by other properties in the area (please see page 55). In our research of the area, we were able to locate one property where the buyer made substantial renovations after the purchase. Sale 4 in the sales comparison approach of this report needed approximately $1,000,000 in repairs, which equates to $1,923 per unit. This property would be considered to have a very similar condition to the subject at the time of sale and is the only market evidence we have been able to find for the cost to renovate a property like the subject.




Based on all of this, we have concluded the proposed renovation of the Palm Beach County Housing Authority does not make economic sense since they will not significantly affect the ability of the property to generate income. Given the market evidence, we have concluded that a market supported cost to renovate the subject would be $3,000 per unit. In total, we estimate the approximate added value for these repairs at $1,150,000 and that these repairs could be completed in six months. In the final analysis, it is concluded that the prospective market value of the subject property, as if renovated, as of June 1, 2012; is:

ELEVEN MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS

($11,150,000)

QUALIFICATIONS OF APPRAISER ROBERT B. BANTING, MAI, SRA

PROFESSIONAL DESIGNATIONS - YEAR RECEIVED MAI - Member Appraisal Institute - 1984 SRA - Senior Residential Appraiser, Appraisal Institute - 1977 SRPA - Senior Real Property Appraiser, Appraisal Institute - 1980 State-Certified General Real Estate Appraiser, State of Florida, License No. RZ4 - 1991 EDUCATION AND SPECIAL TRAINING Licensed Real Estate Broker - #3748 - State of Florida Graduate, University of Florida, College of Business Administration, BSBA (Major - Real Estate & Urban Land Studies) 1973 Successfully completed and passed the following Society of Real Estate Appraisers (SREA) and American Institute of Real Estate Appraisers (AIREA) courses and/or exams: Note: the SREA & AIREA merged in 1991 to form the Appraisal Institute. SREA R2: Case Study of Single Family Residence SREA 201: Principles of Income Property Appraising SREA: Single Family Residence Demonstration Report SREA: Income Property Demonstration Report AIREA 1B: Capitalization Theory and Techniques SREA 101: Introduction to Appraising Real Property AIREA: Case Studies in Real Estate Valuation AIREA: Standards of Professional Practice AIREA: Introduction to Real Estate Investment Analysis AIREA 2-2: Valuation Analysis and Report Writing AIREA: Comprehensive Examination AIREA: Litigation Valuation AIREA: Standards of Professional Practice Part C ATTENDED VARIOUS APPRAISAL SEMINARS AND COURSES, INCLUDING: The Internet and Appraising Golf Course Valuation Discounting Condominiums & Subdivisions Narrative Report Writing Appraising for Condemnation Condemnation: Legal Rules & Appraisal Practices Condominium Appraisal Reviewing Appraisals Analyzing Commercial Lease Clauses Eminent Domain Trials Tax Considerations in Real Estate Testing Reasonableness/Discounted Cash Flow Mortgage Equity Analysis Partnerships & Syndications Hotel and Motel Valuation Advanced Appraisal Techniques Federal Appraisal Requirements Analytic Uses of Computer in the Appraisal Shop Valuation of Leases and Leaseholds Valuation Litigation Mock Trial Residential Construction From The Inside Out Rates, Ratios, and Reasonableness Analyzing Income Producing Properties Development of Major/Large Residential Projects Standards of Professional Practice Regression Analysis In Appraisal Practice Federal Appraisal Requirements Engaged in appraising and consulting assignments including market research, rental studies, feasibility analysis, expert witness testimony, cash flow analysis, settlement conferences, and brokerage covering all types of real estate since 1972. President of Anderson & Carr, Inc., Realtors and Appraisers, established 1947 Past President Palm Beach County Chapter, Society of Real Estate Appraisers (SREA) Realtor Member of Central Palm Beach County Association of Realtors Special Master for Palm Beach County Property Appraisal Adjustment Board Qualified as an Expert Witness providing testimony in matters of condemnation, property disputes, bankruptcy court, foreclosures, and other issues of real property valuation. Member of Admissions Committee, Appraisal Institute - South Florida Chapter Member of Review and Counseling Committee, Appraisal Institute - South Florida Chapter Approved appraiser for State of Florida, Department of Transportation and Department Natural Resources. Instructor of seminars, sponsored by the West Palm Beach Board of Realtors. Authored articles for The Palm Beach Post and Realtor newsletter. Real Estate Advisory Board Member, University of Florida. TYPES OF PROPERTY APPRAISED - PARTIAL LISTING Air Rights Medical Buildings Apartment Buildings Churches Amusement Parks Department Stores Hotels - Motels Marinas Condominiums Industrial Buildings Office Buildings Residences - All Types Mobile Home Parks Service Stations Special Purpose Buildings Restaurants Auto Dealerships Vacant Lots - Acreage Residential Projects Golf Courses Shopping Centers Leasehold Interests Financial Institutions Easements "I am currently certified under the continuing education program of the Appraisal Institute."

QUALIFICATIONS OF APPRAISER MARK L. HEROLD

PROFESSIONAL DESIGNATION - YEAR RECEIVED State-Certified General Real Estate Appraiser, State of Florida, License No. RZ3138 – 2007 Licensed Real Estate Sales Associate, State of Florida, License No. SL3218125 - 2009 EDUCATION AND SPECIAL TRAINING Graduate, Florida Atlantic University, College of Business Administration, BS (Majors – Finance and Business Economics) 2000 Successfully completed and passed the following courses: Condemnation Appraising: Principles and Applications Office Building Valuation: A Contemporary Perspective Marshall and Swift Cost Approach Overview to Commercial Property Appraisal 2006 Scope of Work and the new USPAP Requirements FREAB Licensed Residential Appraisal Course I and II Uniform Appraisal Standards for Federal Land Acquisitions Report Writing and Valuation Analysis Advanced Applications Advanced Income Capitalization Basic Income Capitalization Valuations of Wetlands National USPAP Course Mastering Real Estate Appraisal Business Practices and Ethics Forecasting Revenue Real Estate Finance Statistics and Valuation Modeling General Market Analysis and Highest and Best Use Hypothetical Conditions and Extraordinary Assumptions Advanced Sales Comparison & Cost Approach Engaged in appraising and researching real estate with Anderson and Carr, Inc. since January 2005 TYPES OF PROPERTY APPRAISED Vacant Commercial Land Industrial Land Commercial Buildings Warehouse Buildings Office Buildings Insurable Value Reports Apartment Buildings Houses of Worship Live Work Units Service Stations Retail Buildings Multi-use Properties Office Condominiums Medical and Dental Buildings Multi tenant Office Buildings Proposed Construction Rights of Way Easements Proposed Developments Automobile Dealerships Day Care Buildings Schools

Appraiser Licenses

ADDENDUM

Mark, As promised the attached cost estimate was prepared by Bridge Design Associates. Their Estimate did not include Site Work (Grading, Utility Upgrades, Paving, Curb and Gutter, Sidewalks and Landscaping, Lighting, Street Furniture), Mechanical and Electrical. I have had our in‐house staff and another consultant work on these numbers. They are as follows: SITE IMPROVEMENTS $ 1,336,000.00 MECHANICAL EQUIPMENT (New Air‐Conditioning) $ 827,000.00 ELECTRICAL $ 348,000.00 Total $ 2,511,000.00 When we add this amount to the Bridge Design estimate we have a total cost of $ 13,842,182.00 + 14% for Overhead, Profit, Insurance and Bond. The Grand Total is $ 15,780,088.00. Please use these numbers to complete your appraisal. They are within 10% of the Budgeted Amount. Please Complete your work as quickly as possible. URGENT!

Van Johnson Executive Director Palm Beach County Housing Authority 3432 West 45th Street West Palm Beach, FL 33407 P (561) 684-2160 ext. 201 F (561) 684-0183 [email protected]

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APPRAISAL OF A 384 UNIT MULTI-FAMILY APARTMENT COMPLEX

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