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<br />Kmart Corporation <br />Income Approach to Value <br />(Stabilized) <br /> <br />Property: <br />Kmart Store #7792 <br />4427 13th Ave <br />Fargo, ND <br /> <br />Description <br />Discount Store <br /> <br />Square Feet <br />94,950 <br /> <br />Rate <br />$ 5.00 <br /> <br />$ <br /> <br />474,750 <br /> <br />94,950 $ 474,750 <br /> Multiplier X 1 <br />Potential Gross Income $ 474,750 <br />Vacancy and Credit Loss 5% Less 23,738 <br /> % of EGI $/SQFT <br />EFFECTIVE GROSS INCOME: $ 451,013 <br />LESS OPERATING EXPENSES: .80/SF $ 75,960 <br />NET OPERATING INCOME: 83.16% $ 375,053 <br />CAPIT ALlZA TION: <br />Overall Rate 11.00% <br />Effective Tax Rate <br />Capitalization Rate 11.00% <br />INDICATED VALUE: (NOI/ Cap Rate - Rounded to $100.) $ 3,409,600 <br /> <br />INDICATED TOTAL PROPERTY VALUE: <br /> <br />$ <br /> <br />35.91 /SF <br /> <br />$ <br /> <br />3,409,600 <br /> <br />JURISDICTION MARKET VALUE: <br /> <br />$ <br /> <br />50.4 7 /SF <br /> <br />$ <br /> <br />4,792,000 <br /> <br />COMMENTS: <br />ParceI0277-00100 Former Builders Square store built in 1991. BS closed and was subleased to <br />Ernst Home Centers who defaulted within 2 years. Reopened in 11/98 as a Kmart. Kmart had <br />assumed the old lease. Store's continuing poor performance and the fact that it is experiencing <br />a negative operating margin indicates store is likely to close within a few months. For purposes <br />of this Stabilized Income Approach to Value, utilizing a market rent of 5.00/sf. Owner is to pay for <br />parking lot and roof repairs, plus the other "owner expenses". <br />