RESTRICTED APPRAISAL:

Multi-Tenant Office Building 3111 Unicorn Lake Boulevard, Denton TX 76210

PRESENTED TO: Mr. Marc Moffitt University of North Texas 1307 W. Highland St. Denton, TX 76207

EFFECTIVE DATE OF VALUATION: November 30, 2015

PREPARED BY: Jacob Brown University of North Texas 1307W. Highland St. Denton, TX76207

November 30, 2015 Mr. Marc Moffitt University of North Texas 1307 W. Highland St. Denton, TX 76207 Re: Our File No. A-2015-30-11

Multi-Tenant Office Building 3111 Unicorn Lake Boulevard City of Denton, Denton County, Texas

Dear Mr. Marc Moffitt: Per your request, investigations and analyses have been concluded to determine a market value estimate of the leased fee estate in the subject property, "as is". It is the appraiser’s understanding that the intended use of this restricted appraisal report is to assist the client in evaluation of loan renewal. The appraiser has read and attempted to comply with the Uniform Standards of Professional Appraisal Practice as approved by the Appraisal Standards Board and promulgated by the Appraisal Foundation; and believe this report is in compliance with the aforementioned. Based upon the data, analyses and conclusions, the Market Value of the leased fee estate in the subject property, "as is", as of November 30, 2015, subject to the specific and general underlying assumptions and limiting conditions, set forth in this report, is: - - TWO MILLION-FOUR HUNDRED AND TWENTY ONE THOUSAND - - - - - $2,421,000- - - My firm appreciates the opportunity to provide this appraisal for you. If we can be of further service, please contact us. Respectfully submitted, BROWN APPRAISAL GROUP, LLC

___________________________________ Jacob P. Brown, President State Certified General Real Estate Appraiser Number: TX-1323488-G Date of Expiration: January 1, 2016

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SUMMARY OF PERTINANT INFORMATION Client/Intended user Marc Moffitt Intended Use Assist the client in evaluation of a loan renewal

Identification of Property Multi-Tenant Office Building, 3111 Unicorn Lake Boulevard, Denton, TX 76210

Current Use Office

Ownership History Bushwood Properties since 2010

Highest and Best Use Continue in the current use as an office facility.

Real Property Interest Valued Leased Fee Estate

Purpose of Assignment

To develop an opinion of the market value as defined by the agencies that regulate financial institutions in the United States and published by the Appraisal Institute in the Dictionary of Real Estate Appraisal, 3rd Edition.

Effective Date of Value Opinion November 30, 2015

Date of Report November 30, 2015

Scope of Work

Provide a restricted appraisal in conformance with USPAP. Investigations and analysis were implemented to estimate subject property value. There is limited presentation of information in this report. Supporting documentation, adequate to prepare a Summary report, is retained in the appraiser’s file. The Cost Approach, Sales Comparison Approach and Income Approach are developed to estimate subject property value.

Report Option

This report is a Restricted Appraisal Report in accordance with Standards Rule 2-2 (c) of the Uniform Standards of Professional Appraisal Practice. As such, it presents limited discussions of the data, reasoning and analysis that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, reasoning and analysis is retained in the appraiser’s file.

Extra-Ordinary Assumptions None Hypothetical Conditions None Departures from Standard 1 None Market Value Estimate $2,421,000 Marketing Period 1-Year

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AREA COMMENTARY The subject property is situated in the D/FW Region. The region experienced economic decline from 2008-2010, showing some gradual improvements in 2011-2013. Conditions in D/FW are superior to the majority other Metro areas in the U.S. Job growth remains positive, exceeding most areas of the State and Nation, solid increase noted from mid-year 2012-2013. Subsequently to most property types being over-built during the peak period of 2006-2008, new construction has slowed and absorption is positive for most property types within the region, some types and submarkets approaching equilibrium demand/supply. The subject property is located in the south-western section of the community of Denton in an area of relatively new commercial properties. Much development around the area is of mixed use and is a result of the expanding Denton population into this area of the city. The neighborhoods surrounding the site pose medium to high income households most of which are residential. Restaurants, a movie theatre, a hotel, and higher quality roads and development bring a great deal of the local demographic into this area.

SITE COMMENTARY Site Size 11,492 SF Site Shape Generally Rectangular

Thoroughfare frontage Unicorn Lane Blvd frontage within close proximity to Interstate 35E, a major highway

Topography Flat with slight downward slope, flush with street grade

Easements/Encroachments None Detrimental. Shared access and utility easements pose no adverse impact.

Hazards Nuisances None Detrimental

Flood Plain Non-Hazardous Portion of Zone X, Outside of 100-Year Flood Plain

Utilities All Available

Zoning “RCC-D”, Regional Center Commercial Downtown (Allows common commercial uses, including office).

Tax Account/Assessment Nos. 583094. Total Assessment is $39,868.

Immediate Area Uses

The subject sits across the street from a man-made lake (Unicorn Lake), and is surrounded by additional office facilities. Nearby is a cinema, multiple restaurants, and the property backs to I-35 E.

IMPROVEMENTS COMMENTARY

Good to Excellent Class C Professional/Medical Office. Site improvements include 20,202 SF concrete-paved parking area and 6,600 SF landscaping that is good quality

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SUMMARY HIGHEST AND BEST ANALYSIS

Highest and Best Use, As Vacant Legally Permissible: Those use-types that are legally permissible are studied further in regard to physical suitability and feasibility of development. The subject property exhibits a zoning designation that allows for common commercial uses, including office and retail. Physically Possible: From a physical standpoint, the subject site is suited to various types of commercial development. All utilities are available with no significant adverse characteristics noted. Financially Feasible: The uses that are physically possible and legally permissible must be analyzed further to determine those that are likely to produce some income, or return, greater than the combined income needed to satisfy operating expenses, financial expenses, and capital amortization. All uses that are expected to produce a positive return are regarded as financially feasible. Retail: As mentioned, common retail uses are legally permissible and physically possible on the subject site. Even so, the subject property exhibits location rated too secondary to support a speculative retail related use, which is a property type commonly situated along primary thoroughfares and intersections that exhibit added traffic exposure. Taking this into consideration, retail uses are not considered further in regard to financial feasibility.

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Office: In assessment of office market conditions, the primary source for data was Costar Property. Market conditions for the region, a submarket area more specific to the subject and immediate surrounding area, are evaluated in following paragraphs. D/FW Region: The following table summarizes office market conditions and trends in the region:

Office vacancy levels have remained above the stabilized level during the last five years. The D/FW region has remained overbuilt with office space since the 1980’s. Solid positive net absorption is noted from 2005 to 2008; however, demand was unable to keep pace with a large level of new space being added. Absorption was negative in 2009 and the first part of 2010, turning positive by a small level in 2011-2013. Office space deliveries are reduced relative to preceding years; however, some are noted with demand keeping pace with a reduced level of new additions, resulting in reduced vacancy relative to the last 4 years. Average rents are reported at $20.30/SF, according to a full service lease structure. Overall, the D/FW area is over-supplied with office space, a trend that has remained in recent decades. Speculative development is warranted only in select submarkets and key development nodes.

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Immediate Subject Area: The appraiser reviewed information regarding market conditions of office properties within the community of Denton, which is considered the competitive market area for the office property type.

Office vacancy in the competitive area is notably below that of the region at 8.75%, which is generally considered to be at the stabilized level. Vacancy declined during the last six months, subsequent to peaking at approximately 12% in the mid-part of 2010. New deliveries in 1Q10 resulted in an increase in vacancy but the space has subsequently absorbed. Demand has been limited during the last year, absorption being nominal at 6,000 SF. Average rents are $19.39/SF, according to a full service lease structure. For relatively new office facilities, rents are commonly according to a NNN Lease structure, relatively new properties ranging from $10.91/SF to $27.39/SF. Similar to retail space, vacancy being at the stabilized level is a positive factor; however, some properties remaining in lease-up are noted and recent demand has been somewhat limited. For those properties with somewhat secondary competitive position, it is noted that rent rates have declined in the last 1-2 years. Even so, the subject property exhibits very good competitive location rating for an office facility. Timing for speculative development that, in accordance with anticipated improvements in the overall economy, estimated at 1-2 years is considered reasonable for the subject property.

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Maximally Productive: Those uses that are legally permissible and physically possible include common commercial uses, such as office and retail. The timing for development for office/retail space is considered similar based on immediate area market conditions. Competitive location rating is considered good for office and average for retail, the property including frontage on a thoroughfare that provides primary interior neighborhood ingress-egress, being reduced regarding corner position or traffic exposure that better accommodate retail uses in the area. The subject site exhibits size that is well-suited to multi-tenant/end-user commercial uses, timing being estimated at the lower-end of the range established for speculative commercial development, say 1-year. The typical purchaser for a site with characteristics to the subject would be a multi-tenant/end-user. Giving consideration to the preceding, the highest and best use of the subject property is to market for multi-tenant/end-user related commercial uses while holding for future speculative commercial development.

HIGHEST AND BEST USE OF THE SITE, AS IMPROVED

The subject site is improved with a multi-tenant office facility. The improvements are functional in layout and design. The value of land and improvements notably exceeds land value. Demolishing or altering the improvements would not result in a property value exceeding the current value of land and improvements. The subject is a good to excellent quality facility; however, it is common for top quality facilities to be constructed in the immediate competitive area. Therefore, considering the preceding, the highest and best use of the subject, as improved, is to continue in the current use.

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APPRAISAL PROCESS – SUMMARY FORMAT The Cost Approach, Sales Comparison Approach and Income Approach are developed in order to estimate the subject property value. The Cost Approach is developed on the basis of the cost of a suitable replacement of the improvements with depreciation taken into account based on the age/life method. The Sales Comparison Approach is based on similar buildings equal in use, design and construction as the subject. Finally, the Income Approach to value analyzes property value based on net income applied to market supported return requirements.

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COST APPROACH – SUMMARY FORMAT The appraisal approach utilized to estimate the value of the subject land as of the date of this report is the Sales Comparison Approach, an approach in appraisal analysis that is predicated on the assumption that an informed purchaser would pay no more for a property than the cost of acquiring an equally desirable substitute in the open market. Land Value Estimate: In order to estimate subject property land value, the appraiser reviewed comparable sales information regarding comparably adapted properties completed during recent years in various sections of the competitive market area. The subject property exhibits secondary thoroughfare frontage in an area mainly composed of office related uses. The typical sales price range for small secondary commercial tracts was determined to be approximately $8.00/SF to $11.00/SF. The upper-end of the range is reflective of sites with added traffic exposure relative to the subject with the lower-end being reflective of sites that have slightly inferior submarket position, situated a greater distance from major community hospitals and areas of relatively new office development, such as the subject location. Based on consideration of subject and physical characteristics, a unit land value estimate of $10.00/SF is deemed reasonable for the subject property. The concluding subject property land value estimate is provided, as follows: $10.00/SF x 44,031 SF = $440,310

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IMPROVEMENTS COST ANALYSIS Replacement Cost New: The first step in determining the cost of reproduction or replacement is to determine which cost is most applicable. Replacement cost estimates are based on substitute materials of equal utility and allow for the benefit of changing construction standards. A summary of replacement cost new is provided in the following table:

Improvements Quantity Unit Unit Price TotalOffice Building 11,492 SF 163.50 $1,878,942Parking/Drives 20,202 SF 4.03 $81,414Landscaping 6,600 SF 4.98 $32,868Total Hard Costs $1,993,224Estimated Total Soft Costs (Approx. 5% Hard Costs) $99,661Entreprenurial Profit -None Applied $0TOTAL REPLACEMENT COST NEW $2,092,885

REPLACEMENT COST NEW

Building cost is within the ranges established for good to excellent quality office space. A common level of soft costs (5% Hard Costs) is included. Entrepreneurial profit is not typically associated with small garden office facilities so none is applied. . Depreciation: Physical depreciation, incurable, is defined as that loss from cost new, which is impossible to offset or which would involve expenditure substantially in excess of the value increase caused by the expenditure. This type of depreciation results from typical wear and tear associated with age. The building and site improvements were constructed approximately 6 years ago with effective age being commensurate with actual age. The effective life span for the property type is 45 years, subject effective age being commensurate with actual age. A summary of physical incurable depreciation is provided in the table on the following page.

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Improvements Depreciation TotalParking/Drives 13% $212,927Landscaping 30% $21,212Landscaping 30% $15,300Total Physical Incurable Depreciation $249,439

PHYSICAL INCURABLE DEPRECIATION

6 Year Effective Age/45 Year Life Span6 Year Effective Age/20 Year Life Span6 Year Effective Age/20 Year Life Span

Physical curable depreciation results from deferred maintenance. The subject is well maintained with no deferred maintenance noted. No deduction is made for physical curable depreciation. In addition to physical depreciation, functional and external obsolescence must be examined. External obsolescence is the diminished utility of the building caused by negative influences such as neighborhood decline, the property's location in a community, and/or area market conditions. No added depreciation due to these factors are noted. Although decline in economic climate is noted in recent years, unit price trends of small office facilities have not declined by a level that would warrant deduction of this depreciation item. Functional obsolescence is an element of depreciation that is caused by a deficiency or super adequacy in the materials or design of the building. No super adequacy or deficiency in the improvements is noted. The subject exhibits good to excellent quality construction components. It is common to construct good to excellent quality properties in submarkets exhibiting characteristics similar to the subject area.

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COST APPROACH CONCLUSION

The following tables summarize cost approach value conclusions:

TOTAL COST SUMMARY

Total Replacement Cost New

$2,092,885

Less: Physical Incurable Depreciation

($249,439)

Less: Physical Curable Depreciation

-0-

Less: Functional Obsolescence

-0-

Less: External Obsolescence

-0-

Depreciated Cost of Improvements

$1,843,446

Add: Land Value

$440,310

Total Value Indicated Via Cost Approach

$2,283,756 Rounded to $2,284,000

COST APPROACH VALUE CONCLUSION

$2,284,000

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SALES COMPARISON APPROACH – SUMMARY FORMAT

The Sale Price per Square Foot (SP/SF) unit of comparison is derived by dividing the sale price by the net rentable area (NRA). This physical unit of comparison can be adjusted to account for dissimilarities between market sales and the subject property. This unit of comparison is then applied to the subject's net rentable area to indicate a value for the subject property. The SP/SF Method is developed in this report. A summary of comparable sales deemed indicative of subject property value is provided in the following table with more detailed information and photographs provided in the Addenda section of this report.

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CAMERON APPRAISAL GROUP

SUMMARY OF COMPARABLE IMPROVED SALES

Sale No. & Date Location NRA (SF)

L:B Ratio Quality of Construction

Y.O.C. SP/SF

1 11/14

100 Clark St, Little Elm (Turquoise)

5,133 5:1

Good Class C Office Facility 2005 $230.08

2 04/12

1172 Bent Oaks Dr, Denton (Yellow)

4,948 5.6:1

Good-Excellent Class C Office Facility 1996

$101.05

3 04/12

997 E Main St, Lewisville (Pink)

3,918 36.2:1

Good Class C Office Facility 1996 $141.65

4 01/13

213/215/217 N Oak St, Roanoke (Red)

5,715 4.9:1

Good Class C Office Facility 1997 $126.33

5 09/13

3315 Unicorn Lake Boulevard, Denton (Deep Blue)

5,706 21.8:1

Good-Excellent Class C Office Facility 2011

$304.94

6 02/13

3207/3205 Justin Rd, Flower Mound (Green)

11,857 4.5:1

Good-Excellent Class C Office Facility 1985

$211.94

7 06/12

4851 S Interstate 35 E-Bldg. 1, Corinth (Orange)

12,927 3.5:1

Good Class C Medical Office 1999 $79.61

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SP/SF ADJUSTMENT ANALYSIS

Property Rights Conveyed: All sales transactions were reported to be common leased fee/fee simple conveyances with no adjustments warranted. Conditions of Sale: Buyer/seller motivation is considered typical among each of the comparable sales with no adjustments applied. Financing Terms: All of the comparable sales were reported to have occurred on either a cash basis or with the grantee obtaining financing at prevailing market rates. Therefore, no adjustments are warranted. Market Conditions: The sales utilized in this analysis occurred between April 2012 and November 2014. The Sales occurred during a time frame when unit sales price trends have remained generally similar, subsequent to decline in economic climate being evident. No adjustments are applied. Location: The subject property is located in newly developed shopping, medical, and office area of Denton just off the major thoroughfare Interstate 35 E and is just across the interstate from Denton Regional Medical Center. As such its’ location is dominant to most of the comparables. Sale 5 is located within the same area and exhibits the same qualities, in addition sale 6 is situated within a similar recently developed retail and office area and is easily accessed from Interstate 35 E, and both sales warrant no adjustment. Sale 2 fronts Teasley Ln making access to I-35 E quick and accessible, however, the property is located a slight distance away from any area hospitals in a submarket position rated modestly inferior, warranting a slight 5% upward adjustment. Sale 7 fronts I-35 E for an easily accessible location, however, the property is situated within an added distance from any office or medical facilities warranting a 5% upward adjustment. Sales 1 and 4 reflect similar characteristics as they are situated in older neighborhoods around little to no medical facilities, as well as having secondary locations to major thoroughfares, however the area has recently been improved and developed, they warrant a 5% upward adjustment. Finally, a 10% upward adjustment has been applied to sale 3 as it exhibits a tertiary location from all major roads and thoroughfares and is situated a distance from any major medical or office facilities, it is also consumed by many large industrial plants. Size: The subject is an 11,492 SF facility. Sale 6 and sale 7 are within a similar size category at 11,587 SF and 12,927 SF respectively, warranting no adjustment. Sales 1-5 involved properties in a slightly smaller size category, ranging from 3,918 SF to 5,715 SF, warranting a moderate 5% upward adjustment.

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Land to Building Ratio: The subject exhibits a 2.6:1 land to building ratio, within the common range for the property type. Sales 1, 2, 4, 6, and 7 reflect a land to building ratio within the common range noted for the property type. These sales have land to building ratios ranging from 3.5:1 to 5.6:1, similar to the subject. Sale 3 and sale 5 exhibit much larger land to building ratios at 36.2:1 and 21.8:1 respectively and will require a downward adjustment of 15% and 10% respectively. Construction Quality: Sale 2, 5, and 6 exhibit good to excellent class C office facilities with a similar office finish-out, warranting no adjustment. Sales 1, 3, and 4 involve good class C office facilities with an interior finish-out that is rated slightly more basic, resulting in a 5% upward adjustment. Sale 7 represents a good class C medical building with an interior finish rated slightly more basic than the subjects warranting a 5% upward adjustment. Condition/Age: The subject was built in 2009. Sale 1, and 5 involved properties built in the mid to late 2000’s exhibiting a similar age category to the subject property, warranting no adjustment. Sales 2, 3, 4, and 7 show construction in the late 1990’s and therefore warrant a slight 10% upward adjustment. Finally, sale 6 exhibits a largely increased effective age with construction occurring in 1985, as such this sale will be adjusted upwards 20%.

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Sale No. 1 2 3 4 5 6 7SP/SF $230.08 $101.05 $141.65 $126.33 $304.94 $211.94 $79.61Conditions of Sale 0% 0% 0% 0% 0% 0% 0%Adjusted SP/SF $230.08 $101.05 $141.65 $126.33 $304.94 $211.94 $79.61Financing Terms 0% 0% 0% 0% 0% 0% 0%Adjusted SP/SF $230.08 $101.05 $141.65 $126.33 $304.94 $211.94 $79.61Market Conditions 0% 0% 0% 0% 0% 0% 0%Adjusted SP/SF $230.08 $101.05 $141.65 $126.33 $304.94 $211.94 $79.61

Location 5% 5% 10% 5% 0% 0% 5%Size 5% 5% 5% 5% 5% 0% 0%Land to Building Ratio 0% 0% -15% 0% -10% 0% 0%Quality of Construction 5% 0% 5% 5% 0% 0% 5%Condition/Age 0% 10% 10% 10% 0% 20% 10%Net Adjustment 15% 20% 15% 25% -5% 20% 20%Adjusted SP/SF $264.59 $121.26 $162.90 $157.91 $289.69 $254.33 $95.53Mean Adjusted SP/SF $192.32Median Adjusted SP/SF $162.90

IMPROVED SALES ADJUSTMENT GRID

The adjusted sale price range is $79.61/SF to $274.45/SF with mean/median adjusted sale prices stated above. Similar emphasis is placed on the adjusted sales price range, overall. In reconciliation, the value estimate determined via the Sales Comparison Approach is $192.32/SF x 11,492 SF = $2,210,141 rounded to $2,210,000.

SALES COMPARISON APPROACH VALUE CONCLUSION

$2,210,000

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THE INCOME CAPITALIZATION APPROACH – SUMMARY FORMAT

In order to estimate the subject property value via the Income Approach, the Direct Capitalization Method and DCF Method are employed. The appraiser confirmed quoted and actual lease data for similar lease space in the subject submarket area, subsequently evaluated relative to actual income received at the subject facility.

Rental Trends: The following ranges are according to NNN lease structure, which is common of office facilities with similar characteristics to the subject. Relatively new office facilities in the subject competitive market area typically range from $14.00/SF to $19.00/SF. The lower-end of the range is for professional office space positioned an added distance from area hospitals and sections of the community that have a high concentration of relatively new office facilities. Professional office space in areas composed primarily of relatively new office facilities commonly exhibit a range of $15.00/SF to $17.00/SF while medical office space with good competitive location rating typically command a range of $17.00/SF to $19.00/SF. Preceding rental rate ranges are down $1.00/SF to $2.00/SF relative to period of peak market conditions in 2006-2007. Actual Income/Gross Rent Revenues (GRR): The subject property rent roll is provided, as follows:

SUMMARY OF SUBJECT RENTAL INFORMATION

Tenant Rental (SF) Current Lease Rate/SF Rental Information

Internal Medicine Assoc. (Property Owner) 3,605 $20.00

NNN Lease Term: 1/1/2007-1/1/2014

Liberty Insurance 4,300 $16.00 NNN

Lease Term: 11/1/2011-11/1/2017 Lease Rate Escalates to $16.50/SF in 1/1/2014

Dr. Smith, Cardiologist 3,587 $18.00 NNN

Lease Term: 11/1/2011-11/1/2018 Lease Rate Escalates to $19.00/SF in 1/1/2015

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TENANT SIZE (SF) Rate/$SF AnnualRetail Space:Internal Medicine Assoc. 3,605 20.00 $72,100Liberty Insurance 4,300 16.00 68,800Dr. Smith, Cardiologist 3,587 18.00 64,566Total GRR: 11,492 205,466

GROSS RENT REVENUES (GRR)

Reimbursement Income: In our estimation of Potential Gross Income (PGI), pass-through income paid by the tenant for property expenses are added to the gross rental revenue. Gross rental revenue is estimated according to NNN leases where the tenants pay pro-rata share of property tax, insurance and common area maintenance (C.A.M). Management expense is also commonly reimbursed for suburban office facilities in the area, included as reimbursement income below. The additional pass-through income is summarized as follows: Property Tax: $ 39,868 Insurance: $ 4,022 C.A.M. $ 12,067

Management $ 8,219 Total Pass-through Income: $ 64,176 ($5.58/SF)

Potential Gross Income (PGI): Pass-through income generated by tenant payment of NNN expenses is an addition to gross income. Adding Gross Rental Revenue to Pass-through Income results in a PGI estimate of $269,642 ($205,466+ $64,176). Vacancy/Credit Loss: The comparable rentals commonly exhibit vacancy above the stabilized level. Even so, all were small properties that exhibited only one or two vacant rental units with a number of properties within the subject development and immediate neighborhood retaining full occupancy, particularly small facilities. The subject is fully occupied, including a portion by the owner, therefore a stabilized V/CL estimate of 0% is deemed appropriate. Effective Gross Income (EGI): EGI is determined from subtracting V/CL from PGI with the estimate provided in stabilized operating pro-forma provided on the following page. Operating Expenses: Operating expenses are estimated from various sources. Sources include actual expenses confirmed for the property. Management is estimated at 5.6% GRR. Maintenance

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and insurance expense are in accordance with the market. A common reserve allowance is applied, as well as a small level of miscellaneous expense to cover un-scheduled expenses. Tax expense is according to the actual expense for 2012. The operating expenses are summarized in the stabilized operating pro-forma below. Net Operating Income (NOI): NOI is the anticipated net income remaining after deducting all operating expenses from effective gross income. Resulting NOI from estimated income less operating expenses is summarized in the following table:

Per SFTotal GRR: 205,466 $17.90Add: NNN Reimbursement: 64,176 $5.58PGI: $269,642 $23.46Less: V/CL: 0 $0.00Total EGI $269,642 $23.46Less: Operating Expenses:

Expense Per SF Property Tax 39,868 3.47 Management 8,219 0.72 Insurance 4,022 0.35 Maintenance/Repairs 11,492 1.00 Reserves 1,724 0.15 Miscellaneous 575 0.05

Total Expenses ($65,899) (5.73)Net Operating Income $203,743 17.73

STABILIZED OPERATING PRO-FORMA

Direct Capitalization: The appraiser considers Ro ranges that are reported by market sources, according to survey information. The main source of information is provided by Realtyrates.com, which compiles direct capitalization rates from surveying market participants, specific to property type. The information is as of 2Q13, summarized in the following table:

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In reconciliation, an Ro estimate within and toward the upper-end of the range estimated from comparable sales and similar and modestly below the average range in the table above is considered reasonable for the subject property. The concluding Ro estimate is 8.5%. The indicated value determined by the Direct Capitalization Method is provided as follows:

$203,743 NOI ÷ 0.085 = $2,396,976, rounded to $2,397,000.

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DISCOUNTED CASH FLOW ANALYSIS

Income Projection The appraiser constructed a 5-year discounted cash flow (DCF) model for the subject property. Income projection is in accordance with actual remaining lease terms associated with the subject space. Any increases during the course of remaining lease term are reflected. Subsequent to leases expiring, annual rent is increased 2.5% annually in following years, in accordance with inflation/CPI and expense increase.

Vacancy/Collection Loss In the DCF Model, vacancy/collection loss is projected at 0% during the holding term. The subject is a small facility that is currently 100% occupied, a small level of vacancy associated with periodic tenant turn-over being considered reasonable.

Operating Expense Projection Operating expenses are increased 2.5% annually to take inflation and increasing costs into consideration. Management expense is projected at 4% gross rent revenues through the holding period. Reversion: The estimated net operating income for Year 6 is capitalized at a terminal rate of 9.0%. The slightly higher direct capitalization rate associated with the reversion is reflective of added depreciation over the holding period. Year 11 NOI is based on projected rental income increasing in accordance with lease agreements or by 2.5% from Year 10 with 5% V/CL loss factor. A 3% Cost of Sale estimate is deducted from the reversion sale price to reflect brokerage commission paid by the seller. Derivation of the Discount Rate: The rate used to discount the projected cash flows reflect acceptable expectations of yields to be achieved by investors currently dealing with similar properties. Yield rates differ from direct capitalization rates (such as the equity dividend rate) in that all equity benefits, including equity reversion at the time of resale and the annual cash flow are taken into consideration.

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Based on alternative yield analysis, a common yield rate range of 8.35% to 11% is indicated. In addition to alternative yield study, the appraiser referred to the Investor Survey, 3rd Quarter 2013 by RealtyRates.com (data is as of 2Q13), considered most appropriate for the property type. For property types most similar to the subject, the discount rate range is summarized in the table on the following page.

A discount rate estimate at the upper-end of the alternative investment range and slightly below the average in the table above is considered reasonable for the subject. The discount rate estimate for the subject is 9.0%.

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YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 REVERSIONRent Growth 2.5% 2.5% 2.5% 2.5%Base Rental Revenue $205,466 $210,603 $215,868 $221,264 $226,796 $232,466NNN Reimbursements: 64,176 65,191 66,820 68,491 70,203 71,958PGI $269,642 $275,793 $282,688 $289,755 $296,999 $304,424Less: Land Lease V/CL 0 0 0 0 0 0Total EGI $269,642 $275,793 $282,688 $289,755 $296,999 $304,424

Less ExpensesProperty Tax 39,868 40,865 41,886 42,933 44,007 45,107Management 8,219 8,424 8,635 8,851 9,072 9,299Insurance 4,022 4,123 4,226 4,331 4,440 4,551Maintenance/Repairs 11,492 11,779 12,074 12,376 12,685 13,002Reserves 1,724 1,767 1,811 1,857 1,903 1,951Miscellaneous 575 589 604 619 635 651Total OE (65,900) (67,547) (69,236) (70,967) (72,741) (74,559)

NOI: $203,742 $208,246 $213,452 $218,789 $224,258 $2,638,334DCF: $185,220 $172,104 $160,370 $149,436 $139,247 $1,638,198

Reversion Derived From Direct Capitalization of 6th Year NOI: $2,638,334Less: Sales Commission Estimate: (79,150)Net Sale Proceeds: $2,559,184

Present Value of Future Sale: $1,638,198Net Present Value Of Cash Flows $806,377Total Value Estimate: $2,444,574SUBJECT PROPERTY VALUE ESTIMATE: (Rounded)

DISCOUNTED CASH FLOW MODEL

$2,445,000

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INCOME APPROACH CONCLUSION The appraiser estimated the subject property value by applying the Direct Capitalization Method and Discounted Cash Flow Analysis. The resulting value conclusions are as follows:

Method Value Estimates Direct Capitalization $2,397,000 DCF Analysis $2,445,000

Emphasis is placed on both methods, which had highly similar value indications, exhibiting less than 3% variance. In reconciliation, the value estimates for the subject property determined via the Income Approach are provided, as follows:

INCOME APPROACH VALUE CONCLUSION

$2,421,000

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FINAL RECONCILATION AND VALUE ESTIMATE

The value estimates from each approach are summarized in the following table.

SUBJECT PROPERTY VALUE ESTIMATES – IMPROVEMENTS ON UTILIZED SITE AREA

COST APPROACH $2,284,000

SALES COMPARISON APPROACH $2,210,000

INCOME APPROACH $2,421,000

The approaches utilized to estimate subject property value resulted in generally similar value conclusions, exhibiting less than 9% variance. Most emphasis is placed on the Income Approach considering multi-tenant property type. Remaining concluding value estimates are similar to that determined in the Income Approach. The reconciled value estimate for the subject is provided, as follows:

FINAL MARKET VALUE ESTIMATE

$2,421,000

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CERTIFICATION OF APPRAISER I, Jacob P. Brown, certify that to the best of my knowledge and belief: - the statements of fact contained in this report are true and correct. - the analyses, opinions, and conclusions are limited by the reported assumptions and

limiting conditions set forth, and are my personal, unbiased professional analyses, opinions and conclusions.

- I have no present or prospective interest in the property that is the subject of this report,

and I have no personal interest or bias with respect to the parties involved. - my compensation is not contingent upon the reporting of a predetermined value or

direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event.

- the analyses, opinions, and conclusions were developed, and this report has been

prepared, in conformity with the Code of Professional Ethics established in the Uniform Standards of Professional Appraisal Practice for a Restricted Appraisal.

- as of the date of this report, I, Jacob P. Brown, am currently a State Certified General

Real Estate Appraiser. - I, Jacob P. Brown, made a personal inspection of the property that is the subject of this

report. - no one required the appraisal assignment to be based on a minimum valuation, a

specific valuation, or the approval of a loan. - the value estimate shown on the following page is not valid unless this certification is

included in the complete appraisal. - the reported analyses, opinions and conclusions were developed, and this report has

been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

- the use of this report is subject to the requirements of the Appraisal Institute relating to

review by its duly authorized representatives. - As of the date of this report, I Jacob P. Brown, have completed the Standards and Ethics

Education Requirement of the Appraisal Institute for Associate Members. - I, Jacob P. Brown, have appraised the subject on one prior occasion in 2008.

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Certification of Appraiser - Continued - Based upon the data, analyses and conclusions, the Market Value of the leased fee

estate interest in the subject property, “as is”, as of November 30, 2015, subject to the specific and general underlying assumptions and limiting conditions, set forth in this report, is:

- - TWO MILLION-FOUR HUNDRED AND TWENTY ONE THOUSAND - -

- - - $2,421,000 - - - BROWN APPRAISAL GROUP, LLC

_____________________________________ Jacob P. Brown, President State Certified General Real Estate Appraiser Number: TX- 1323488-G Date of Expiration: January 1, 2016