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Executive Summary --------------------------------- <br />VALUATION <br />Sales Comparison Approach <br />Income Capitalization Approach <br />Insurable Value <br />Appraisal Premise <br />As Is <br />Compiled by CBRE <br />CONCLUDED MARKET VALUE <br />Interest Appraised <br />Leased Fee Interest <br />Total <br />$7,100,000 <br />$6,600,000 <br />$6,500,000 <br />Date of Value <br />April 2, 2019 <br />STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) <br />Strengths/ Opportunities <br />•The subject is located on the corner of a heavily travelled intersection within Fargo. <br />•The subject is l 00% occupied by three nationally-oriented tenants. <br />Per Sf <br />$74.72 <br />$69.46 <br />$68.40 <br />Value <br />$6,700,000 <br />•The subject has roughly 4,500 of 'dead space' which could be leased to an ancillary tenant <br />for general storage or non-investment grade commercial tenancy. <br />•Ownership reports that the Hobby Lobby is one of the highest performing stores in the <br />country at $9M in sales per year ($150 PSF). Further, the Dollar Tree tenant achieves revenue <br />in the $3M range ($185 PSF) where the average sales for this tenant are typically $1 M-$2M. <br />Weaknesses/ Threats <br />•The subject's out parcels are not owned. <br />•The existing assessment of $8, 134,000 is above the recent transaction price and concluded <br />market value. <br />•The subject was originally developed as a K-Mart in 1991, was later converted to its current <br />multi-tenant design and is in average condition. <br />•The surface lots are in fair to average condition. <br />•The existing tenancy has limited remaining term (excluding renewal options). <br />EXTRAORDINARY ASSUMPTIONS <br />An extraordinary assumption is defined as "an assignment-specific assumption as of the effective <br />date regarding uncertain information used in an analysis which, if found to be false, could alter <br />the appraiser's opinions or conclusions." <br />•Historical financial performance was not made available for this appraisal. The valuation is <br />therefore market-derived and assumes no atypical property liabilities. <br />•Written documentation of tenant sales were not provided, although ownership stated Hobby <br />Lobby has historically achieved $9M in annual sales and Dollar Tree 3M in annual sales. <br />Hobby Lobby lease does contain a clause for percentage rent but the breakpoint is $12 .SM. <br />No percentage rent has been projected. <br />1 The Appraisal Foundation, USPAP, 2018-2019 <br />VII <br />Hobby Lobby Center, Fargo, North Dakota CBRE <br />Page 47