Bayside.skyrise Appr

8/12/2019 Bayside.skyrise Appr.

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Market Rent Study forBayside Marketplace, Parkingand Proposed Skyrise Tower

401 and 501 Biscayne BoulevardMiami, Miami-Dade County, FL 33132

Prepared For: Mr. Henrique TorreDirector - Public Facilities DivisionCity of Miami444 SW 2nd Avenue, 3rd FloorMiami, FL 33130

Prepared By: Joseph J. Blake and Associates, Inc.4000 Ponce de Leon Boulevard, Suite 410Miami, FL 33146


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J o s e p h J . B l a k e a n d A s s o c i a t e s , I n c .

Real Estate Valuation and Consulting

4000 Ponce De Leon Boulevard, Suite 410 | Miami, Florida 33146 | Phone: 305-448-1663 | Fax: 305-448-7077 | www.josephjblake.com

Corporate Headquarters: 425 Broad Hollow Road, Suite 429 | Melville, New York 11747 | (516) 827-0222

Regional Offices: Atlanta | Boston | Chicago | Dallas | Los Angeles | Miami | New York City | San Francisco | Washington D.C.

Blake & Sanyu Alliance: Tokyo | Osaka | Nagoya | Sendai

April 29, 2014

Mr. Henrique TorreDirector - Public Facilities DivisionCity of Miami444 SW 2nd Avenue, 3rd FloorMiami, FL 33130

Re: Market Rent Study forBayside Marketplace, Parking and Proposed Skyrise Tower401 and 501 Biscayne BoulevardMiami, Florida 33132

Dear Mr. Torre:

As requested, we have prepared a market rent study of the property referenced above.

The purpose of this report is to provide opinions of the market and percentage rent for thesubject, assuming its continued use as festival retail center, Bayside Marketplace and associatedparking, as of the date of inspection, March 25, 2014. We have also provided our opinion of themarket rent and percentage rent for the subject, as proposed, which includes additional retailspace, additional parking spaces and the proposed Skyrise Tower, as of the date of inspection,March 25, 2014. It is noted that the study is to result in specific conclusions regarding the marketrent. The opinions of market rent are in terms of cash or of financing terms equivalent to cash.

The property is currently developed with the Bayside Marketplace, a festival retail center with

associated parking. The allowable FLR, based on the original approvals for the development, were267,000 SF for the retail component and 420,000 SF for the parking structures, approximately1,200 parking spaces, 687,000 of FLR.

The property owner is considering additional development for the site that will include additionalparking of 216,660 SF above the existing parking garages, additional retail of 17,255 along theground floor of the parking garages and a new Skyrise Tower that will contain approximately277,177 SF of which 4,470 SF will be set aside for the City of Miamis marina and fire departmentoffices. The increased approvals, which are based on a gross buildable square footage, have alsotaken into consideration the actual square footage that was built on the site, after the originalapprovals for the property in 1985.


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April 29, 2014Mr. Henrique TorrePage 2 of 3

Buildable Component (FLR) Original Approvals (FAR) Increased Approvals (FLR)Commercial (Retail and Office) 267,000 561,432 Parking SF 420,000 636,660

Less: City of Miami Space - (4,470) Net Buildable FLR 687,000 1,193,622

Parking Spaces (Above and Below Grade) 1,242 1,944 Less: City of Miami Parking Spaces (42) (42)Net Parking Spaces 1,200 1,902

The site that will be developed with the Skyrise Tower will require the relocation of some of theCity of Miamis offices and the parking that is associated with the Miamimarina, approximately4,470 SF of office space and 42 parking spaces. This office space and the 42 parking spaces arenot included in the revenue generating components for the property.

Therefore, the revised approved developable square footage for the site is 1,193,622 SF, an FLR of1.63, based on the size of the site. Within the City of Miamis zoning code, FLR is considered thetotal gross building area, including parking and common areas. The proposed FLR of a property isbased on the site plan approvals for the property.

The subject consists of two contiguous parcels of land that contain a total of approximately733,929 SF or approximately 16.85 acres of land. The tracts are irregular in shape and are leveland at street grade. The property is zoned "T6-8 O," Urban Core Transect District Open, under the

jurisdiction of the City of Miami, under the Miami 21 zoning code.

The site is owned by the City of Miami and leased to the owner of Bayside Marketplace, BaysideCenter Ltd. Partnership, a subsidiary of General Growth Properties. The center was completed in1987. There are two separate leases in place for the retail and parking components both of whichoriginated in 1987 and were for terms of 45 years with two, 15-year options.

As of the date of value, the subject is being utilized as a festival retail center with associatedparking, subject to the development restrictions imposed by the original development approvals forthe Bayside Marketplace. For the purposes of this report, the subject will be analyzed based on theoriginal development approvals and under a second scenario with the additional proposeddevelopment, based on the new proposed components and increased FLR.

This letter must remain attached to the report, which contains 70 pages plus related exhibits, inorder for the value opinion set forth to be considered valid. The ensuing report, in a self-containedreport, has been prepared in conformity with and is subject to the Code of Professional Ethics andStandards of Professional Appraisal Practice of the Appraisal Institute and the Uniform Standardsof Professional Appraisal Practice of the Appraisal Foundation (USPAP). The report is subject to theattached Assumptions and Limiting Conditions and Definition of Market Value.

We performed a market rental rate study for the subject in May of 2013. We have not providedany other services regarding the subject within the prior three years, as appraisers or in any othercapacity.


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April 29, 2014Mr. Henrique TorrePage 3 of 3

After an inspection of the subject, and analysis of pertinent physical and economic factors thatimpact value, we are of the opinion that the market rent for the site underlying the BaysideMarketplace and parking structures, assuming its continued use as a festival retail center, as of the

date of inspection, March 25, 2014, is:$3,200,000/Year

THREE MILLION TWO HUNDRED THOUSAND DOLLARS

Plus, an additional 6.00% percentage rent on gross retail revenues over a naturalbreakpoint and an additional 15.00% percentage rent on gross parking revenues overa natural breakpoint.

We are of the opinion that the market rent for the site underlying the Bayside Marketplace, parkingstructures and proposed Skyrise Tower, based on the proposed development plans, as of the dateof inspection, March 25, 2014, is:

$4,600,000/YearFOUR MILLION SIX HUNDRED THOUSAND DOLLARS


We invite your attention to the ensuing report, which details the documentation and analysis insupport of our conclusion. If you have any questions or require further information about theensuing report, please feel free to contact the undersigned. We thank you for retaining theservices of our firm for your valuation and related needs.

Respectfully submitted,

Joseph J. Blake and Associates, Inc.DRAFT

Tracy Gaskins-Courtney Assistant DirectorState-Certified General Real Estate AppraiserNo. RZ2076

DRAFT

Ted Allen, MAIManaging PartnerState-Certified General Real Estate AppraiserNo. RZ426


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14-108-02 Bayside Marketplace Land TABLE OF CONTENTS

___________________Joseph J. Blake and Associates, Inc.__________________Real Estate Valuation and Consulting

Title PageTransmittal Letter

Table of Contents

Executive Summary ......................................................................................................... 1Photographs of the Subject .............................................................................................. 4Certification of the Report ................................................................................................ 7

Assumptions and Limiting Conditions ................................................................................ 9Identification of Report Format ......................................................................................... 11Purpose of the Report ..................................................................................................... 11Intended User and Use of the Report ................................................................................ 11Pertinent Dates of Inspection, Report Value and Report ..................................................... 11Definition of Market Value ................................................................................................ 11Scope of the Report ........................................................................................................ 11Identification of the Property ............................................................................................ 13Current Use of the Subject ............................................................................................... 13History of the Subject ...................................................................................................... 14

Area Analysis .................................................................................................................. 16Neighborhood Analysis .................................................................................................... 23Market Analysis ............................................................................................................... 28Description of the Site ..................................................................................................... 49Zoning and Taxes ............................................................................................................ 51Highest and Best Use ...................................................................................................... 52The Sales Comparison Approach ....................................................................................... 56Reconciliation and Final Value .......................................................................................... 70

ADDENDA

Miami Dade County Property Record Cards2013 Tax BillsZoning InformationFlood ZoneLegal DescriptionsBayside Marketplace Lease (Retail)Garage Parcel Lease2013 Bayside Operating StatementSite PlansEngagement ContractQualifications of the Appraisers


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14-108-02 Bayside Marketplace Land EXECUTIVE SUMMARY

_____________________Joseph J. Blake and Associates, Inc.___________________Real Estate Valuation and Consulting

1

PROPERTY APPRAISED: Bayside Marketplace Land

PROPERTY ADDRESS: 401 and 501 Biscayne BoulevardMiami, Miami-Dade County, FL 33132

FOLIO #: 01-0100-000-052501-0100-000-052201-0100-000-0523

PROPERTY LOCATION: East side of Biscayne Boulevard, at NE 4th Street, Miami,Miami-Dade County, FL 33132

PURPOSE OF THE REPORT: The purpose of this report is to provide opinions of themarket and percentage rent for the subject, assuming itscontinued use as festival retail center, Bayside Marketplaceand associated parking, as of the date of inspection, March25, 2014. We have also provided our opinion of the marketrent and percentage rent for subject, as proposed, whichincludes additional retail space, additional parking spacesand the proposed Skyrise Tower, as of the date ofinspection, March 25, 2014. The opinions of market rent arein terms of cash or of financing terms equivalent to cash.

PERTINENT DATESDate of Inspection: March 25, 2014Effective Date of Report: March 25, 2014Effective Date of Report: March 25, 2014

HIGHEST AND BEST USE

As Improved: The existing use, a festival retail center and associatedparking with the proposed Skyrise Tower, subject to themost recent approvals by the City of Miami.

As If Vacant: Construction of a festival retail development associatedparking and proposed Skyrise Tower up to the maximumallowable FLR, per the most recent approvals by the City ofMiami.


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IMPROVEMENT DATA: The property is currently developed with the BaysideMarketplace, a festival retail center with associated parking,1,200 spaces within two, five-story parking garages. Theallowable FLR, based on the original approvals for thedevelopment, is 267,000 SF for the retail component. Theactual square footage of the parking structures isapproximately 420,000 SF for a total of 687,000 SF of FLR.

The property owner is considered additional developmentfor the site that will include additional parking of 216,660 SFabove the existing parking garages, additional retail of17,255 along the ground floor of the parking garages and anew Skyrise Tower that will contain approximately 277,177SF of net rentable area.

Therefore, the revised approved developable square footagefor the site is 1,193,622 SF, an FLR of 1.63, based on the

size of the site.PARKING: Based on the original approvals for the site, there were

1,200 parking spaces to be built between two multi-storyparking structures, approximately 420,000 SF (350 SF perspace). Documents provided by the client indicate that thereare an additional 131 parking spaces on a surface lot thatare divided between Bayside parkers (89 parking spaces)and the City of Miamis Miamimarina (42 spaces). Thedeveloper of Skyrise Tower is required to relocate these 131parking spaces to the existing parking structures. TheSkyrise Tower will be situated on this surface parking area.

The Skyrise developer will add 596 parking spaces for thereplacement and required parking for the Skyrise Towercommercial space and 148 parking spaces below the SkyriseTower, for a total of 1,944 total parking spaces on the site,upon completion of the additions to the property. Of thetotal, 42 spaces will be assigned to the Miamimarina and arenot included in the revenue generating components of theproject, as proposed.

SITE DESCRIPTION: The subject consists of a two, contiguous parcels of landthat contain a total of approximately 733,929 SF orapproximately 16.85 acres of land. The tracts are irregularin shape and are level and at street grade. The property iszoned "T6-8 O," Urban Core Transect District Open, underthe jurisdiction of the City of Miami, under the Miami 21zoning code. The site is owned by the City of Miami andleased to the owner of Bayside Marketplace, Bayside Center,Ltd, a subsidiary of General Growth Properties.


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CURRENT USE: As of the date of value, the subject is being utilized as afestival retail center with associated parking, subject to thedevelopment restrictions imposed by the originaldevelopment approvals for the Bayside Marketplace. For thepurposes of this report, the subject will be analyzed basedfirst on the original development and second with theadditional proposed development, based on the newproposed components and FLR.

ZONING: "T6-8 O," Urban Core Transect District Open

Conclusions:

Market Rent As Is

$3,200,000/YearTHREE MILLION TWO HUNDRED THOUSAND DOLLARS

Plus, an additional 6.00% percentage rent on gross retail revenues over a natural breakpoint andan additional 15.00% percentage rent on gross parking revenues over a natural breakpoint.

Market Rent As Proposed


Plus, an additional 6.00% percentage rent on gross retail revenues over a natural breakpoint andan additional 15.00% percentage rent on gross parking revenues over a natural breakpoint.


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14-108-02 Bayside Marketplace Land PHOTOGRAPHS OF THE SUBJECT


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Aerial Photo of Bayside Marketplace

Land Underlying the Retail Component Land Underlying the Parking Garage Component


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Hard Rock Cafe Surface Parking Area on East Side of Site

Surface Parking Area (Future Skyrise Site) View of Bayside from East Side of Site

Bayside Exterior Entrance to Parking Garages


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Interior of Parking Garages Adjacent Property (American Airlines Arena)

Exterior of Shop Space Exterior Walkways

Exterior Seating Areas and Bay Walk Main Entrance


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14-108-02 Bayside Marketplace Land CERTIFICATION OF REPORT


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We, the undersigned, certify that, to the best of our knowledge and belief:

Tracy Gaskins-Courtney and Ted Allen, MAI, have made a personal inspection of theproperty that is the subject of this report.

As of the date of this report, Ted Allen, MAI has completed the continuing educationprogram for Designated Members of the Appraisal Institute.

As of the date of this report, Ted Allen, MAI, has completed the continuing educationrequirements for designated members of the Appraisal Institute.

The statements of fact contained in this report are true and correct.

The reported analyses, opinions, and conclusions are limited only by the reportedassumptions and limiting conditions and are our personal, impartial, and unbiasedprofessional analyses, opinions, and conclusions.

We have no present or prospective interest in the property that is the subject of this report

and no personal interest with respect to the parties involved.

We have no bias with respect to the property that is the subject of this report or to theparties involved with this assignment.

Our engagement in this assignment was not contingent upon developing or reportingpredetermined results.

Our compensation for completing this assignment is not contingent upon the developmentor reporting of a predetermined value or direction in value that favors the cause of theclient, the amount of the value opinion, the attainment of a stipulated result, or theoccurrence of a subsequent event directly related to the intended use of this report.

The report is not based on a requested minimum valuation, a specific valuation, or theapproval of a loan. In addition, our engagement was not contingent upon the reportproducing a specific value and neither engagement, nor employment, nor compensation, isbased upon approval of any related loan application.

Our analyses, opinions and conclusions were developed, and this report has been prepared,in conformity with the Uniform Standards of Professional Appraisal Practice.

The reported analyses, opinions and conclusions were developed, and this report has beenprepared, in conformity with the requirements of the Code of Professional Ethics andStandards of Professional Appraisal Practice of the Appraisal Institute.

No one provided significant real property assistance to the persons signing this certificate.

The use of this report is subject to the requirements of the State of Florida relating toreview by the Real Estate Appraisal Subcommittee of the Florida Real Estate Commission.

The use of this report is subject to the requirements of the Appraisal Institute relating toreview by its duly authorized representatives.


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14-108-02 Bayside Marketplace Land CERTIFICATION OF REPORT


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We have not performed any services regarding the subject within the prior three years, asappraisers or in any other capacity.

After an inspection of the subject, and analysis of pertinent physical and economic factors thatimpact value, we are of the opinion that the market rent for the site underlying the BaysideMarketplace and parking structures, assuming its continued use as a festival retail center, as of thedate of inspection, March 25, 2014, is:

$3,200,000/YearTHREE MILLION TWO HUNDRED THOUSAND DOLLARS


We are of the opinion that the market rent for the site underlying the Bayside Marketplace, parkingstructures and proposed Skyrise Tower, based on the proposed development plans, as of the dateof inspection, March 25, 2014, is:



We invite your attention to the ensuing report, which details the documentation and analysis insupport of our conclusion. If you have any questions or require further information about the

ensuing report, please feel free to contact the undersigned. We thank you for retaining theservices of our firm for your valuation and related needs.

Respectfully submitted,

Joseph J. Blake and Associates, Inc.DRAFT

Tracy Gaskins-Courtney Assistant DirectorState-Certified General Real Estate AppraiserNo. RZ2076

DRAFT

Ted Allen, MAIManaging PartnerState-Certified General Real Estate AppraiserNo. RZ426


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14-108-02 Bayside Marketplace Land ASSUMPTIONS AND LIMITING CONDITIONS


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General Assumptions and General Limiting Conditions

This Report is subject to underlying assumptions and limiting conditions qualifying the informationcontained in the Report as follows:

The valuation estimate applies only to the property specifically identified and described in theensuing Report.

Information and data contained in the Report, although obtained from public record and otherreliable sources and, where possible, carefully checked by us, is accepted as satisfactory evidenceupon which rests the final expression of property value.

We have made no legal survey, nor have we commissioned one to be prepared, and therefore,reference to a sketch, plat, diagram or previous survey appearing in the report is only for thepurpose of assisting the reader to visualize the property.

It is assumed that all information known to the client and relative to the valuation has beenaccurately furnished and that there are no undisclosed leases, agreements, liens or otherencumbrances affecting the use of the property.

Ownership and management are assumed to be competent and in responsible hands.

No responsibility beyond reasonableness is assumed for matters of a legal nature, whether existingor pending.

We, by reason of this report, shall not be required to give testimony as expert witness in any legalhearing or before any Court of Law unless justly and fairly compensated for such services.

By reason of the Purpose of the Report and the Intended User and Use of the Report herein setforth, the value reported is only applicable to the Property Rights Appraised, and the Report should

not be used for any other purpose.

Disclosure of the contents of this Report is governed by the By-Laws and Regulations of the Appraisal Institute.

Neither all nor any part of the contents of this Report (especially any conclusions as to value, ouridentity, or the firm with which we are connected, or any reference to the Appraisal Institute or tothe MAI Designation) shall be reproduced for dissemination to the public through advertisingmedia, public relations media, news media, sales media or any other public means ofcommunication without our prior consent and written approval.

We have not been furnished with soil or subsoil tests. In the absence of soil boring tests, it is

assumed that there are no unusual subsoil conditions or, if any do exist, they can be or have beencorrected at a reasonable cost through the use of modern construction techniques.

This report is based on the conditions of local and national economies, purchasing power ofmoney, and financing rates prevailing at the effective date of value.

We are not engineers, and any references to physical property characteristics in terms of quality,condition, cost, suitability, soil conditions, flood risk, obsolescence, etc., are strictly related to theireconomic impact on the property. No liability is assumed for any engineering-related issues.


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14-108-02 Bayside Marketplace Land ASSUMPTIONS AND LIMITING CONDITIONS


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Unless otherwise stated in this report, we did not observe the existence of hazardous materials,which may or may not be present on the property. The presence of substances such as asbestos,urea-formaldehyde foam insulation, or other potentially hazardous materials, may affect the valueof the property. The market rent opinion is predicated on the assumption that there is no suchmaterial on or in the property that would cause a loss in value. No responsibility is assumed forany such conditions, or for the expertise or engineering knowledge required to discover them. Theclient is urged to retain an expert in this field, if desired.

Toxic and hazardous substances, if present within a facility, can introduce an actual or potentialliability that may adversely affect marketability and value. Such effects may be in the form ofimmediate clean-up expense or future liability of clean-up costs (stigma). In the development ofour opinion of value, no consideration was given to such liabilities or their impact on value. Theclient releases Joseph J. Blake and Associates, Inc., from any and all liability related in any way toenvironmental matters.

Possession of this report or a copy thereof does not imply right of publication, nor use for anypurpose by any other than the client to whom it is addressed, without our written consent.

Cash flow projections are forecasts of estimated future operating characteristics and are based onthe information and assumptions contained within the report. The achievement of the financialprojections will be affected by fluctuating economic conditions and is dependent upon other futureoccurrences that cannot be assured. Actual results may well vary from the projections containedherein. We do not warrant that these forecasts will occur. Projections may be affected bycircumstances beyond our current realm of knowledge or control.

The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not madea specific compliance survey and analysis of this property to determine whether it is in conformitywith the various detailed requirements of the ADA. It is possible that a compliance survey of theproperty, together with a detailed analysis of the requirements for 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 couldhave a negative effect upon the value of the property. Since we have no direct evidence relating tothis issue, we did not consider possible non-compliance with the requirements of the ADA inestimating the value of the property.

Extraordinary Assumptions

This report is not based on any extraordinary assumptions.

Hypothetical Conditions

This report is not based on any hypothetical conditions.


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14-108-02 Bayside Marketplace Land INTRODUCTION


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IDENTIFICATION OF REPORT FORMAT

This report is presented within a complete, self-contained format.

PURPOSE OF THE REPORT

The purpose of this report is to provide opinions of the market and percentage rent for thesubject, assuming its continued use as festival retail center, Bayside Marketplace and associatedparking, as of the date of inspection, March 25, 2014. We have also provided our opinion of themarket rent and percentage rent for the subject, as proposed, which includes additional retailspace, additional parking spaces and the proposed Skyrise Tower, as of the date of inspection,March 25, 2014. It is noted that the study is to result in specific conclusions regarding the marketrent. The opinions of market rent are in terms of cash or of financing terms equivalent to cash. Itis noted that the study is to result in specific conclusions regarding the market rent. The opinionsof market rent are in terms of cash or of financing terms equivalent to cash.

INTENDED USER AND USE OF THE REPORT

The intended user of this report is the client, the City of Miami. The intended use of the report isto assist the client in leasing decisions regarding the property. This report is not intended to berelied upon by anyone other than its intended user or for any purpose other than that which isstated here.

PERTINENT DATES OF INSPECTION, MARKET RENT AND REPORT

This report, with its analyses, conclusions and final expressions of market value, is specificallyapplicable to the following pertinent dates:

Date of Inspection: March 25, 2014Effective Date of Market Rent: March 25, 2014Effective Date of Report: April 29, 2014

DEFINITION OF MARKET RENT

Market rent is defined as the rental income that a property would m ost likely command in theopen market; indicated by the current rents paid and asked for comparable space as of the date ofthe appraisal 1

SCOPE OF THE REPORT

The scope of the assignment is relative to the intended use of the report. The following outlinesthe extent of property inspection, market data collection, verification and analysis performed forthis assignment.

1 Appraisal Institute, The Dictionary of Real Estate Appraisal , 5 th Edition (Chicago, Illinois; Appraisal Institute, 2010)


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Inspection

Tracy Gaskins-Courtney and Ted Allen, MAI, have made a personal inspection of the property thatis the subject of this report. The inspection was visual in nature, to assess the economic conditionof the property, in order to effectively compare it to other properties in the market. We are notengineers, and we did not assess the property from the standpoint of its environmental integrity,or to determine whether any latent defects were present.

Subject Physical and Economic Characteristics

Information regarding the subject was obtained from representatives of the City of Miami and arepresentative of the subjects tenant. Site and building measurements were obtained from siteplans provided to the consultants. Interviews with both the owner and the tenant were conductedfor other relevant physical and economic data. The subjects year built and lease information wasobtained from public records and City of Miami officials. Information pertaining to the modificationsand additions proposed for the property were provided by the client and the proposed developer ofthe Skyrise Tower.

Type of Analysis Applied

The client has requested a market study be performed on the property such that market rents forthe facility are determined assuming its continued use as a waterfront restaurant. As such, theCost, the Sales Comparison and Income Capitalization Approaches to value were not performed asa market value for the subject was not requested. We have included a Sales Comparison Approachfor the valuation of the site in order to determine an appropriate rental rate for the ground lease.It is noted that the study is to result in specific conclusions regarding the market rent under thepreviously described scenario.

Extent of Data Research

General economic data and market data were reviewed. Comparable sales were compiled frompublished sources, including CoStar Comps and Loopnet. Market data compiled for this reportinclude a variety of land sales. These data are a result of research specific to the subject's areaand pertinent to the subject. The data were verified by buyers, sellers, brokers, managers,government officials or other sources regarded as knowledgeable and reliable.

Information specific to the subject such as site dimensions, subject history and legal description was provided by the City of Miami and public records and is assumed to be correct. Theinformation appeared reliable, based on an inspection of the property on March 25, 2014. Otherinformation, such as zoning and tax records, was obtained from governmental sources. Specificestimates concerning land value, etc., reflect our judgment based on interpretation of the market

data. The reasoning behind such estimates is illustrated throughout the relevant approach tovalue.


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IDENTIFICATION OF THE PROPERTY

The property is currently developed with the Bayside Marketplace, a festival retail center withassociated parking, within two, five-story parking garages. The allowable FLR, based on theoriginal approvals for the development, is 267,000 SF for the retail component. The actual squarefootage of the parking structures is approximately 420,000 SF for a total of 687,000 of FLR.

The property owner is considered additional development for the site that will include additionalparking of 216,660 SF, additional retail of 17,255 along the ground floor of the parking garagesand a new Skyrise Tower that will contain approximately 277,177 SF.

Therefore, the revised approved developable square footage for the site is 1,193,622 SF, an FLR of1.63, based on the size of the site.

Buildable Component (FLR) Original Approvals (FAR) Increased Approvals (FLR)Commercial (Retail and Office) 267,000 561,432 Parking SF 420,000 636,660

Less: City of Miami Space - (4,470) Net Buildable FLR 687,000 1,193,622

Parking Spaces (Above and Below Grade) 1,242 1,944 Less: City of Miami Parking Spaces (42) (42)Net Parking Spaces 1,200 1,902

The subject consists of two contiguous parcels of land that contain a total of approximately733,929 SF or approximately 16.85 acres of land. The tracts are irregular in shape and are leveland at street grade. The property is zoned "T6-8 O," Urban Core Transect District Open, under the

jurisdiction of the City of Miami, under the Miami 21 zoning code.

The property is commonly known as:

Bayside Marketplace Land401 and 501 Biscayne Boulevard

Miami, FL 33132

The property is also identified by the Miami-Dade County Tax Assessor's Office as tax parcelnumbers 01-0100-000-0523 (Parking Garage Land), 01-0100-000-0525 (Marketplace Land).

The legal description of the property is found in the Addenda. The legal description was providedby representatives of the owner and is assumed to be correct. We have not commissioned a

survey, nor have we had one verified by legal counsel. Therefore, we suggest legal counsel verifythis legal description before it is used for any other purpose.

CURRENT USE OF THE SUBJECT

As of the date of value, the subject is being utilized as a festival retail center with associatedparking, subject to the development restrictions imposed by the original development approvals forthe Bayside Marketplace. For the purposes of this report, the subject will be analyzed first basedon the original development and second with the additional proposed development, based on thenew proposed components and FLR.


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HISTORY OF THE SUBJECT

Bayside Marketplace was part of the Festival Marketplace concept developed by the RouseCompanies during the 1980s in the major urban markets across the country .Festival marketplaceswere a leading downtown revitalization strategy in American cities during the 1970s and 1980s.The guiding principles are a mix of local tenants instead of chain stores, design of shop stalls andcommon areas to energize the space, and uncomplicated architectural ornament in order tohighlight the goods.

In the second half of the 20th century, Rouse and his company became major developers ofsuburban strip shopping centers and pioneered large shopping malls. In many cities, these wereseen as escalating the failure of retail businesses and causing further deterioration of older,downtown core areas.

In the late 1970s, Rouse and his company responded to critics of their suburban development bystudying inner cities for similar development potential despite the widely held belief of investorsand developers that downtown areas were both dirty and dangerous and not desirable destinations

for their residents. In response, inspired by projects such as Ghirardelli Square in San Francisco,the Rouse Company worked with architects, urban planners, and city governments to develop thefestival marketplace concept as a way to reverse the negative trends and to attract both suburbanresidents and out-of-town visitors to the downtown areas.

A typical festival marketplace would include local involvement in the creation of a safe and trendyattraction intended to serve as a major catalyst for other redevelopment. Generally, a festivalmarketplace offers major restaurants, specialty retail shops, and an international food court. Often,there is an exciting nightlife with music, dancing and live entertainment. The more successfulprojects seemed to benefit from waterfront locations and secure parking.

The City of Miami has historically been protective of its waterfront property and owns the majorityof the sizeable tracts of land that border Biscayne Bay, along the downtown waterfront and inCoconut Grove to the south. In order to protect against unrestrained development, strictdevelopment regulations in terms of height and density have been implemented through zoningdesignations and design criteria. The City of Miami retained the land underlying the BaysideMarketplace and leased the property to the original developer, the Rouse Companies, in 1985 priorto the commencement of the construction.

The original lease was for a term of 45 years with two 15-year options commencing after theconstruction of the project was complete and the occupancy of the property had reached at least80%. The lease calls for the greater of the minimum base rent or 35% of net rental incomeavailable for distribution. With the base rent increasing periodically.

Rental Years Minimum Base Rate1-2 $325,000.003-6 $650,000.00

7-35 $1,000,000.0036-45 Average of the last 3 years

Within the lease, the City of Miami established design and density parameters for the property.The tenant is responsible for all operating expenses and property taxes.


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There is a separate lease for the parking areas that serve Bayside. This lease is also for a term of45 years with two 15-year options. This lease calls for a base rental payment of $10,000 perannum with additional rent of $80,000 when the parking is generating sufficient revenue to paythat additional rent and then 50% of net income, after distributions.

The performance of the Bayside Marketplace has fluctuated over the years with sales in the firstyear exceeding expectations and then falling sharply in the 1990s. The center struggled throughthe 1990s and was adversely affected by the drop in tourism associated with 9/11. Many of thevisitors to the center are international visitors to Miami.

On November 12, 2004, the Rouse Company was sold to Chicago-based General Growth PropertiesInc., another shopping mall developer and Baysides ownership chang ed to General GrowthProperties. General Growth Properties filed for bankruptcy in 2009 and put Bayside on the market.GGP has managed to emerge from bankruptcy and has posted a profit for 2011. Baysides salesand occupancy have been on the upswing recently but many of the leases currently in place werenegotiated during the economic downturn.

Most recently, Bayside is in the process of renegotiating their ground lease with the City of Miamifor the underlying site. A developer is interested in subleasing a portion of the site, approximately80,797 SF or 1.85 acres for the development of a Skyrise Tower, a retail-office-entertainmentstructure that will be the focal point of the City of Miamis bayfront. The tower will occupy a stripof land situated to the east of the Bayside Marketplace, currently utilized for surface parking. Theproposed square footage of the structure is 277,177 SF. Based on the Miami 21 zoning code,street level retail bays will be added to the parking garages as part of the modifications. This isnecessary to improve the appearance of the parking garages at street level and comply with thecurrent zoning code.

Based on the original approvals for the site, there were 1,200 parking spaces to be built betweentwo multi-story parking structures, approximately 420,000 SF (350 SF per space). Documents

provided by the client indicate that there are an additional 131 parking spaces on a surface lot thatare divided between Bayside parkers (89 parking spaces) and the City of Miamis Miamimarina (42spaces). The developer of Skyrise Tower is required to relocate these 131 parking spaces to theexisting parking structures. The Skyrise Tower will be situated on this surface parking area.

The Skyrise developer will add 596 parking spaces for the replacement and required parking forthe Skyrise Tower commercial space and 148 parking spaces below the Skyrise Tower, for a totalof 1,944 total parking spaces on the site, upon completion of the additions to the property. Of thetotal, 42 spaces will be assigned to the Miamimarina and are not included in the revenuegenerating components of the project.

We are not aware of any other real property transactions pertaining to the subject in the three

years prior to the date of value, other than that which is reported here.


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INTRODUCTION

The Miami-Fort Lauderdale-West Palm Beach Metropolitan Statistical Area (MSA) encompassesBroward, Miami-Dade, Monroe and Palm Beach counties. The subject is located in Miami-DadeCounty, Florida. Miami-Dade County is located in the southeast portion of Florida's east coast andis the southernmost county situated on Florida's mainland. Miami is the county seat of Miami-DadeCounty, which includes many other incorporated areas such as Miami Beach, Key Biscayne, CoralGables, South Miami, Pinecrest, Aventura, Hialeah and Homestead.

The major portion of the county is on the west side of Biscayne Bay, the entryway of all dockingfacilities in the city. The Atlantic Ocean is the eastern boundary of the county. The county isaccessible via four causeways in the city proper. Miami-Dade County is Florida's largest county,with an estimated population of 2,547,708 persons living in a 1,946 square-mile area.

Miami-Dade County boasts an excellent geographic location, allowing it to serve as a gateway tothe Caribbean and Latin America. A tourist destination in itself, it is also within a day's drive tosome of Florida's major tourist destination cities, as shown in the following table:

City Miles From MiamiFort Lauderdale 25

West Palm Beach 74Key West 160Orlando 232

Daytona Beach 259Clearwater 286

Tampa 309Source: Rand McNally Florida Mileage Chart

Development and growth in Miami-Dade County are often attributed to the climate, which drawsthe northern United States tourist trade during the winter months. Miami-Dade County remains tobe recognized as a center for international business, especially with Latin America, the Caribbean,and increasingly with Europe and Asia.

Tourism, construction and trade are the area's economic mainstays, with international commerceand finance becoming rapidly growing segments of the economy. Area development can becharacterized as light industrial/commercial in the western and northern sections of the city; thesouthern and southwestern sections consist of residential and light industrial/commercial activity.

The growth in business relations between Latin America and Miami-Dade County has beenaccompanied by ongoing growth in tourism from Latin America. Latin American tourists who enjoy

shopping in the United States represent a major demand segment in Miami-Dade County's lodgingand retail markets.

POPULATION

Miami-Dade County officials project that the local economy's outlook is one of growth. Annualpopulation increases are projected to continue. This growth may be attributed to Miami-DadeCounty's continuing emergence as an international business center, which has the effect ofbroadening the area's economic base and reducing the impact of cyclical variations on the nation'seconomy.


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Miami-Fort Lauderdale-West Palm Beach MSA Population Trends

County 20132009-2013

Average Annual GrowthBroward 1,833,666 1.42%

Miami-Dade 2,598,976 1.34%Monroe 75,022 0.81%

Palm Beach 1,389,931 1.58%Florida 19,661,546 1.21%

Source: Florida Trend Economic Yearbook April 2013

The largest age group represented in Miami-Dade County is the population aged 40 to 64, followedby persons ranging in age from 20 to 39 years old. Younger children aged 0 to 14 years are thethird largest age group within this area. Retirees aged 65 and over represent a small group thatcomprises only 14.7% of the local population. Miami-Dade County has a younger overallpopulation than the state of Florida as a whole. The following chart displays the regional

population by age.County 0 14 15 19 20 39 40 64 65+ TotalBroward 17.9% 6.1% 26.3% 35.0% 14.8% 1,833,666

Miami-Dade 17.5% 6.3% 27.7% 33.9% 14.7% 2,598,976Monroe 12.7% 4.1% 23.5% 41.0% 19.0% 75,022

Palm Beach 16.5% 5.8% 23.0% 32.6% 22.2% 1,389,931

Florida 17.2% 6.0% 25.1% 33.3% 18.3% 19,661,546Source: Florida Trend Economic Yearbook April 2013

PERSONAL AND HOUSEHOLD INCOME

With regard to per capita income, the Miami-Fort Lauderdale-West Palm Beach MSA exhibitsincome levels that compare favorably with national averages. Historical and current per capitapersonal income for the counties within the Miami-Fort Lauderdale-West Palm Beach MSA issummarized on the following chart:

Per Capita Personal IncomeMiami-Fort Lauderdale-West Palm Beach MSA

County 2012 2013Broward $45,540 $44,786

Miami-Dade $41,106 $39,617Monroe $65,651 $63,313

Palm Beach $59,096 $55,980Florida $41,903 $41,418

Source: Florida Trend Economic Yearbook April 2013


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ECONOMIC BASE/EMPLOYMENT

The following table outlines total employment and employment by county for the Miami-FortLauderdale-West Palm Beach metropolitan statistical area:

County Labor Force Employed Jobless Jobless RateBroward 1,025,039 971,664 53,375 5.2%

Miami-Dade 1,276,537 1,186,585 89,952 7.0%Monroe 48,691 46,882 1,809 3.7%

Palm Beach 636,413 595,815 40,598 6.4%Region 3,046,680 2,800,846 185,734 5.6%Florida 9,395,000 8,796,000 599,000 6.4%

Source: Florida Department of Economic Opportunity, November 2013

According to the Florida Department of Economic Opportunity, the total civilian labor force inMiami-Dade County as of November 2013 was 1,276,537, of which 1,186,585 were employed and89,952 were unemployed. The unemployment rate was 7.0%. The following chart outlines thelabor force, employment and unemployment information for Miami-Dade County and Florida.

AreaCivilian Labor

ForceNumber

EmployedNumber

UnemployedUnemployment

RateMiami-Dade 1,276,537 1,186,585 89,952 7.0%

Florida 9,395,000 8,796,000 599,000 6.4%Source: Florida Department of Economic Opportunity, November 2013

The major industries in Miami Dade County with more than 40,000 total employees are indicatedbelow. The largest major industry sector was Health Care and Social Assistance, followed by Retail

Trade, and then Accommodation and Food Services.Major Industries in Miami-Dade County

Industry Establishments EmployeesHealth Care and Social Assistance 8,722 140,920

Retail Trade 11,754 121,018 Accommodation and Food Services 5,096 93,054

Education Services 871 72,866Public Administration 242 65,813

Wholesale Trade 9,254 61,358Professional, Scientific & Technical Svc. 12,921 58,100

Transportation and Warehousing 3,001 55,781 Admin., Support, Waste Mgmt., Remediation 4,371 55,502Source: Florida Research and Economic Database

Miami-Dade County is a recognized banking and finance center, with over 120 financial institutionsfeaturing a growing community of international banks serving Latin America. This internationalactivity has emerged due to the more than 150 multi-national firms that have established theiroffices in Miami-Dade in order to direct their Latin American, Caribbean and in some cases,worldwide operations.


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The following chart outlines the average wage information for Miami-Dade County and Florida. Theaverage hourly wage estimate for Miami-Dade County in 2013 is $19.03. This would be equivalentto $761 per week or $39,619 per year, assuming a 40-hour week worked the year around.

Area Average Weekly WageMiami-Dade County $761

Florida $796Source: Florida Trend Economic Yearbook April 2013

EDUCATION

Miami-Dade County is served by more than 900 public and private secondary and elementaryschools. Seven colleges and universities are located in the county.

Miami-Dade College currently offers more than 175 programs and 1,500 courses, with enrollmentof over 160,000 students. The University of Miami in Coral Gables has more than 15,000 degree-seeking students and offers 150 undergraduate and 192 graduate degree programs. FloridaInternational University, with two campuses, 36,000 students and more than 800 full-time faculty,

received the nations fifth largest philanthropic gift in the history of public higher education theWolfsonian Museum on Miami Beach, with 70,000 artifacts worth an estimated $75 million. It wasdonated to the college in 1997 and features a wide array of objects ranging from high art to popculture. Four-year degree programs are also available at Barry University, St. Thomas University,Florida Memorial College and Miami Christian College.

HOUSING

According to the 2010 U.S. Census, the total number of occupied households throughout Miami-Dade County was 989,435. This represents 827,556 households and a total of 2.88 persons perhousehold for the 2006-2010 timeframe. The percentage of housing that is multi-family is also areflection of the density of Miami- Dade Countys population and the countys development.

The concurrency provision in the 1985 Growth Management Act requires that all water, sewer,roads, schools, parks and storm water facilities necessary to support existing improvements be inplace before new construction is permitted. Thus, if a location is deficient in one or morecategories, the affected infrastructure component must be expanded to support any newconstruction. A developer may choose to provide the various facilities and/or services necessary tosupport their project. However, in some cases the expense associated with offsite improvementsmay render a project economically unfeasible.

TRANSPORTATION

Due to its strategic location and design, Miami International Airport (MIA) has exceeded JFK as the

number one airport in the country in terms of handling international cargo. The airportadministration has embarked on a $5.4 billion capital improvement plan that includes an extensiveground transportation component.

An FAA study indicated that MIA continues to grow faster than nearly any other airport in thenation, as traffic between the United States and Latin America outpaces that of nearly every otherregion. To meet this demand, the airport continues a massive expansion of its facilities, includingadding a fourth runway.


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Also, $1.3 billion are earmarked for a four-story transit hub and new roads east of the airport.Once the 25-acre hub is complete, passengers will shuttle between the terminal and the hub,called the Miami Intermodal Center, aboard automated trains. It will be a central destination anddeparture point for Amtrak, Tri-Rail, Metrorail, Greyhound, county buses and rental cars. It is toconnect to the Port of Miami, so that cruise passengers arriving by plane will be able to hop onto atrain that will take them to the port.

The Port of Miami is a leader in the maritime industry and home to nearly a dozen of the worldsmost distinguished cruise lines. The port offers more cargo sailings to more destinations in theWestern hemisphere than any other port, and offers access to virtually every port in the world.

Metrorail is a 21-mile rapid transit system on an elevated railway providing access to DowntownMiami from portions of both south and north Miami-Dade County. It connects with Metromover, a30-station, five-mile system, that loops through the center of Downtown Miami's CBD. Metrobusprovides the feeder system to Metrorail and bus service to all other parts of Miami-Dade County.

A network of 5,640 miles of roadway serves Miami-Dade County, of which I-95, I- 75, FloridasTurnpike, and the Palmetto Expressway (SR-826) are the most utilized north/south highways,while SR-112, SR-826 and SR-836 are the most utilized east/west expressways. US-1 and SR-A1Aare also components of this network. Other primary thoroughfares include I-395 (east/west), I-195(east/west), SR-9, SR-94, SR-874, US-27, US-41 and US-441.

TOURISM/RECREATION

Known mainly for its trendy nightclubs and oceanfront resorts, Miami-Dade County is also arecognized center for the fine arts and the performing arts, offering an array of enriching culturalactivities. These include the Miami Art Museum, Museum of Contemporary Art, Miami Art Central,Wolfsonian-FIU, and the Lowe Art Museum, which are filled with collections and exhibitions fromall parts of the world. Broadway plays, the Repertory Theater, the Philharmonic, the Opera Guild,

and a large number of historical attractions and exhibits are also favorites.Every year, numerous art festivals make their homes in Miami, including the world-renownedCoconut Grove Arts Festival and Art Basel.

The Miami Beach Symphony Orchestra and the Greater Miami Opera Association both offer top-notch performances throughout the year. In add ition, the Coconut Grove Playhouse, the ActorsPlayhouse and the Gusman Center features a variety of plays and dance pieces from local, regionaland national troupes.

MEDICAL

According to the Greater Miami Chamber of Commerce, Miami-Dade County boasts two majormedical networks: the Jackson Health System and Baptist Health South Florida. Jackson HealthSystem, the largest group of medical services in the Southeastern United States, is assembled in amedical complex just west of Downtown Miami. At its hub is the University of Miami School ofMedicine/Jackson Memorial Medical Center, ranked in the top 10 of more than 8,000 hospitals inthe nation and situated in the city limits of Miami. In Miami-Dade County alone, there are morethan 29,000 health care professionals and 28 hospitals. The extensive network of communityhospitals includes: Mount Sinai Medical Center, Columbia Cedars Medical Center, Hialeah Hospital,Baptist Hospital, Jackson Memorial Hospital, Mercy Hospital and Miami Children's Hospital.


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UTILITIES

The following utility companies serve Miami-Dade County:

Telephone: AT&TElectric: Florida Power and Light

Gas: Florida Gas Transmission CompanyWater and Sewer: Miami-Dade Water & Sewer Department

COMMUNICATIONS

Superior communication facilities are available in the area. Telephone service is consistently fastand efficient on local, out-of-town and international calls. Multilingual telephone operators areavailable for assistance on foreign calls, an important factor for businesses with Latin Americanoperations in Miami-Dade County rather than in South America. There are 12 television stations,three cable systems, 28 radio stations, four daily newspapers, seven weekly newspapers, threemonthly magazines and an assortment of other periodicals servicing Miami-Dade County.

CONCLUSION

An analysis of South Florida and more specifically, Miami-Dade County, demonstrates that the areahas historically been on a path of growth. Previous population growth is primarily due to in-migration, which exhibits a trend toward an increasing number of working-aged families moving tothe area. Most of the growth within the area is occurring towards the southwestern portion of theregion.

The recent recession appears to have significantly affected the values of the Co untys office,industrial, commercial and residential properties, with increased vacancies appearing in officecomplexes, industrial neighborhoods, and shopping centers that historically have been fullyoccupied, and homes declining in value or falling into foreclosure.

These trends however, are not unique to Miami-Dade County or the South Florida area. They arecommon throughout the State of Florida. Despite the effects of the recent recession, many of thefactors that lead to Miami- Dade Countys historica l success remain in place. Therefore, it can besurmised that once the effects of the recent recession subside, the county will likely continue togrow.


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14-108-02 Bayside Marketplace Land NEIGHBORHOOD ANALYSIS


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LOCATION

The subject is located on the east side of Biscayne Boulevard (US-1) at NE 4 th Street, north ofMiamis Bayfront Park and south of the American Airlines Arena. Miamimarina, the city marina, islocated along the subject, to the east, in Biscayne Bay and the causeway to the Port of Miami, isdirectly north. Bayside Marketplace and Bayfront Park are the primary tourist attractions thathighlight Miamis downtown neighborhood. There is a bay front walkway that commences atChopin Plaza near the Intercontinental Hotel and travels north to the American Airlines Arena,through the Bayside Marketplace. The subjects neighborhood is considered the Miami CentralBusiness District (CBD) of Miami, and can be defined by variations in dominant land use, in rentand occupancy levels, in the credit worthiness of occupants, and in the ages of buildings.

Over the past decade the Miami CBD has seen tremendous growth. Miami's downtown employeepopulation has grown 27% in ten years. More recently, the downtown area has experiencedrevitalized community interest and growth. Much of the growth has been from large scaleresidential and mixed- use projects aimed at drawing residents back into Miamis CBD and theBrickell Avenue corridor. The area has become popular as an evening and weekend destination

with the addition of retail, restaurants and night clubs within some of the developments.The boundaries for the downtown district are limited to a relatively well-defined area as are mostcentral business districts. The eastern boundary is Biscayne Bay. Development in the downtownarea runs almost the entire length of Biscayne Bay, varying from offices and hotels to outdoormalls and parks. The western boundary for the downtown district is I-95. Primary land use beyondI-95 is less intense with a mixture of low- to mid-rise residential and commercial buildings. Thesouthern boundary for the neighborhood is the Miami River. The northern boundary for theneighborhood is Interstate-395.

ACCESSIBILITY

Metrorail, Miami's 22-mile elevated rapid transit system with 22 stations, transports over 22,000people per day. Metromover, located adjacent to the east of the subject, has three different loops:Downtown, Omni and Brickell. There are nine stations covering a 1.9-mile loop in the downtownarea, with links to Metrorail to provide easy access to downtown businesses, shopping and culturalfacilities. The Metrorail and Metromover schedules are integrated into the 60 Metrobus routescovering all of Miami-Dade County.

Transportation to and from the downtown area is provided via many different routes. I-95 runsnorth and south on the western border of the CBD. Flagler Street bisects the district runningeast/west. SR-836, the primary east/west expressway, provides access to the CBD from thewestern portions of Miami-Dade County and the Miami International Airport. Biscayne Boulevard(US-1) runs north/south through the downtown area along the eastern portion of the CBD.

DEVELOPMENT

Miamis CBD has recently experienced a historic residential construction boom and is beingtransformed into more of a mixed use neighborhood featuring shopping, working, living andentertainment venues. A major investment in infrastructure is also underway to facilitate the newdevelopment. Recent upgrades to the area include $12 million in renovations to Flagler Street, theexpansion of the Port of Miami and the Brickell Village revitalization.


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The newly-completed residential projects within the neighborhood will be a large factor in theCBDs transformation from a banking and legal center to a 24 -hour city. There have been severalprojects serving as catalysts for the growing downtown district. The two major projects that weredeveloped in the early 1980s include Bayfront Park and the Bayside Marketplace. These projectswere intended to revitalize the CBD, specifically the waterfront.

Miami Bayfront Park is located between the Bayside Marketplace project on the north and MiamiCenter on the south, is a 28-acre park that has been redesigned by world-renowned sculptorIsasmu Naguchi. The layout includes a natural amphitheater, an outdoor cafe, a rock garden, amonumental fountain, a light tower and a bay walk.

Downtown Miami also benefits from Flagler's Gusman Cultural Center with its array of programsfrom ballet to jazz, the James L. Knight Convention Center, and the Cultural Center for Fine Arts.The financial and business backbone of the CBD is enhanced by dozens of foreign banks, severalnational law firms and several national accounting firms.

According to realtor.com, condominiums/townhomes in the subjects zip code (33132) are listed

between $60,000 and $8,830, 000. Rentals within the subjects zip code have monthly rental ratesranging from $1,250 to $20,000.

Ring Study Map


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The following are the demographics for the 1-, 2- and 3-mile radius surrounding the subject:

Demographics2013 2018

Radius 1 mile 2 mile 3 mile 1 mile 2 mile 3 milePopulation 30,275 110,783 209,123 33,378 119,690 223,546

Households 15,945 51,791 91,798 17,728 56,481 98,677Families 5,560 22,337 43,860 6,091 23,955 46,550

Average Household S ize 1.75 2.06 2.04 1.75 2.03 2.20Owner Occupied Housing Units 3,464 11,142 10,439 3,943 11,795 24,299Renter Occupied Housing Units 12,481 37,666 41,352 13,786 44,686 74,378Median Age 34.6 36.4 37.4 35.1 36.7 37.8

Population by Age0 - 4 4.8% 4.4% 4.6% 4.7% 4.3% 4.6%5 - 9 3.5% 3.5% 4.0% 3.4% 3.8% 4.2%10 - 14 2.3% 3.8% 4.3% 2.7% 3.7% 4.2%15 - 19 2.6% 7.7% 7.4% 2.5% 7.7% 7.2%20 - 24 8.6% 22.5% 19.9% 9.0% 21.8% 19.4%25 - 34 29.2% 16.7% 16.0% 27.5% 15.9% 15.3%35 - 44 19.2% 13.0% 13.5% 17.9% 12.3% 12.6%45 - 54 12.4% 10.0% 10.5% 12.3% 10.5% 11.1%55 - 64 9.0% 6.8% 7.3% 9.8% 7.9% 8.5%65 - 74 5.1% 4.2% 4.7% 6.4% 4.5% 5.1%75 - 84 2.3% 1.8% 2.0% 2.8% 1.9% 2.1%85+ 0.8% 0.0% 0.0% 0.9% 0.0% 0.0%

Households by Income


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LIFE CYCLE

A neighborhoods life cycle usually consists of four stages. The growth stage, a period duringwhich the neighborhood gains public favor and acceptance; stability, a period of equilibriumwithout marked gains or losses; decline, a period of diminishing demand; revitalization, a period ofrenewal, modernization, and increasing demand. 2

The subjects area is approximately 95% built -out with a variety of retail, office and culturalbuildings. There is limited land available for future development. The subjects neighborhood isconsidered to be in the revitalization stage of its development with a number of large-scaleprojects underway for existing property and any remaining vacant land. Miamis CBD appears to berebounding from the economic recession and there are over 20 new residential projects planned orunder construction for the area that will add over 2,500 units within the next three years. There issubstantial investment in the area from abroad. Projections from this sector are difficult to gauge.Levels of investment from various parts of the world seem to rise and fall based on the economicconditions in that particular area rather than in the United States.

CONCLUSION

In conclusion, we researched all the germane influences that could possibly affect the value ofproperties in the area. This research showed that the neighborhood is being well maintained anddoes not illustrate factors that could be classified as negative or undesirable. The subject is locatedin the heart of the major employment centers in Miami-Dade County. Overall, several factors havecombined for the success of this area. Accessibility, location, and demographics have been apositive influence. It is our opinion that the neighborhood should experience continuedrevitalization due to the solid foundation that is currently in place.

2 Appraisal Institute, The Appraisal of Real Estate , 14 th Ed. (Chicago, Illinois: Appraisal Institute, 2013)


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14-108-02 Bayside Marketplace Land MARKET ANALYSIS


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MIAMI-DADE COUNTY RETAIL MARKET

According to the Reis Observer, fourth quarter 2013; Miami- Dades low development profi le maybe raised if developers proposing several huge projects have their way. Development here has notbeen easy, even when market conditions lean favorably toward it. For one thing, an inviolable

boundary protecting the wetlands in the western reaches of the South Florida counties (now underchallenge by the way) has prevailed against development of all types. And land is expensive andrelatively scare otherwise.

In downtown Miami, the huge planned Miami Worldcenter mixed-use development has attractedcom mitments from Macys (195,000 SF) and Bloomingdales (120,000 SF) to anchor a 475,000 SFretail mall component, the Miami Herald reported in December. Late 2016 openings areanticipated. Miami Worldcenter Associates is master developer. A total of 505,000 SF of retail areunder development for completion in June of 2015 at the Related Groups three tower $1.05 billionBrickell City Center mixed- use development in the CBD. North Miamis $3 billion Biscayne Landingmaster planned development from Boca Developers has 850,000 SF of retail in the pipeline.Developer Turnberry Associates is proposing a violation of the sacrosanct urban development

boundary (UDB) with plans for a huge upscale mall-entertainment complex to the west. Inaddition, an early 2014 ground breaking is anticipated for the $1 billion, 120-acre Downtown Doralmixed-use projected planned by developers Codina Partner and Lennar. Build-out plans include180,000 SF of retail.

Development otherwise has been sparse. Including 102,000 SF in the expansion of Dadeland Mall,only 170,000 SF of retail will comprise the 2013 completion total (all had delivered per the date ofthis report). In addition to Brickell CityCenter, a 416,000 SF IKEA free standing project is underwayin western suburban Sweetwater. Also a February ground breaking is planned for 475,000 SF ofretail at the River Landing mixed-use development in Miami. Indeed, the standard community andneighborhood center sector sees little activity, only 13,600 SF of such space was completed all toldin 2013. Only a single project, the 60,500 SF Grove Village Shopping Center, scheduled for deliveryin March in Miami, was underway per the report date. Only one power center, with an unspecifiedconstruction schedule, is found in the planned proposed pipeline.

Not surprisingly, both the community-neighborhood and power center markets are tight. Reis putrespective third quarter vacancies at 7.1% and 4.6%, down 10 and 20 basis points year over year.

Vacancies, in both, run well below rates reported for their respective national markets (10.5% and5.6%). The low-key community neighborhood center market saw 30,000 SF of net absorption yearto date through the third quarter, a rough doubling of its negligible portion of new supply. Rentgrowth in both markets has been positive but anemic. At $24.47/SF and $20.86/SF, asking andeffective averages for community-neighborhood center space were up 0.4% each for the quarterand were up 0.8% and 0.7% year over year. A small sum of negative net absorption in October

was accompanied by increases of 0.1% for both rates (and no change in vacancy). The thirdquarter mean asking price for non-anchor power center space was $33.76/SF, also up 0.4% forthe period, up 1.1% year over year.

With the bulk of the action taking place in large mixed-use developments, the community-neighborhood sector should maintain its low profile. Construction is expected to increase butshould remain modest in scale. Tight conditions should persist in this sector while rent growthgradually improves. Gains of 2.0% currently are anticipated for 2014.


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Transaction Analysis

The $161.5 million in 27 retail property sales completed during the third quarter brought the yearto date total to $670.3 million for 85 transactions, a sum barely shy of the dollar total recorded forall of 2012. Average selling prices for the latest quarter and year to date were high at $290/SF and

$294/SF. The mean cap rate for third quarter deals was low at 5.0%. The 12-month rolling meancap rate per quarter-end was 6.3%, down from 6.9% a year earlier. In the latest quarters largestsale, MS Shopping Center, LLC paid Fraga CR, LLC $26.9 million or ($260/SF) in August for103,566 SF Cutler Bay Towne Center on S. Dixie Highway in Miami.

The following chart shows the current metro rental rate details for neighborhood shopping centers.

Non-anchor rental rate growth for neighborhood shopping centers is as follows:


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The following chart shows the current metro rental rate details for community shopping centers.

Non-anchor rental rate growth for community shopping centers is as follows:

The vacancy rate trends for neighborhood shopping centers are as follows:

The vacancy rate trends for community shopping centers are as follows:


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The following chart summarizes the amount of new construction, the amount of absorption andthe vacancy rate from the period of 2008 to the present and projections until the year 2007.

Submarket Analysis Miami/Miami Beach Retail

The subject is situated in the Miami CBD within the Miami/Miami Beach retail submarket which isdefined by the Atlantic Ocean to the east, Douglas Road to the west, the Aventura city limits to thenorth and Coral Way to the south.

The subjects Miami/Miami Beach submarket contains approximately 5.78 million SF ofneighborh ood and community retail space considered the subjects market set. The subject is alarge, festival retail center which contains a mix of specialty retail space, restaurant space andentertainment space.

According to the REIS report for the fourth quarter of 2013, the subjects overall Miami/MiamiBeach submarket indicated an average asking rental rate of $28.16/SF and an overall vacancy rate


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of 8.7%. The asking rental rate is relatively high compared to the county overall and the vacancyrate is similar. Expenses for this type of space are averaging approximately $7.38/SF which is inline with the subjects quoted figures. The average lease term for this type of space isapproximately 3.9 years.

The size of the submarket has grown incrementally since 2008, likely due to the market downturnthat impacted South Florida commercial and residential markets. Only three retail centers havebeen completed since then.

Rental rates have remained virtually unchanged over that period of time, with effective rates at$24.26/SF as of the most recent survey.


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New construction is expected to increase substantially over the next three year with nearly 4.276million SF under construction or proposed for the subjects submarket.

The new and proposed projects for the sub jects submarket are outline in the following table:


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CONCLUSION

Overall, the subject is located in a market that is considered to be strong, and benefits from thehigh average incomes in the area, as well as continued positive growth to the surroundingcommunity. The available information suggests that that the positive forces that have led to thesubjects success are still present, and should lead to the subjects continued success for theforeseeable future.


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According to information provided by the Bayside leasing personnel, Bayside Marketplace indicatedthat the quoted rates for the available and rolling space at the property range from $40.00/SF to$50.00/SF on a gross basis. Expense pass through were running approximately $13.50/SF. Forthe older leases, expenses are passed through to the tenant. For newer leases, some of whichwere signed during the economic downturn, the lease structure is gross with no pass through of

expenses. According to the draft financial statements for the property for 2013, gross revenues from theretail component of Bayside Marketplace were approximately $25,400,000 or approximately$112.00/SF. We have assumed that this figure includes the base rents, expense pass throughs andany percentage rents that the tenants may be paying.

Occupancy was approximately 84.3% based on the most recent rent roll submitted by the propertymanager. This occupancy is consistent with historical figures and similar to that observed duringthe property inspection.


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GROUND LEASE COMPARABLES

The subject is a commercially zoned parcel of approximately 733,929 SF with a waterfrontlocation, adjacent to a marina, and within walking distance of hotel and condominium units, officebuildings, restaurants, luxury residences, and open park space. The site has approvals in place for

approximately 267,000 SF of festival retail space with supporting parking structures. Theneighborhood is considered to be one of the more popular in Miami, and is very popular with localsand tourists alike.

We searched for gr ound lease comparables within the subjects immed iate neighborhood,specifically. Due to the lack of directly comparable properties we have extended our search toinclude other parts of Miami-Dade County and sites featuring other types of development.

Comparable 1

Lease: Chase BankLocation: Pembroke Pines, FLSize: 77,667 SF or 1.783 acresLease Commencement: December 2012Rent: $280,000 or $3.61/SFTerm: 20 yearsOptions: 4, 5-yearsIncreases 10% every 5 yearsSale Price: $5,600,000Sale Date: 3/29/2013Estimated Capitalization Rate: 5.00%

Comparable 2

Lease: CVS

Location: Miami, FLSize: 95,396 SF or 2.19 acresLease Commencement: January 2007Rent: $725,000 or $7.60/SFTerm: 30 yearsOptions: 4, 5-yearIncreases 10% every 5 yearsSale Price: $12,120,000Sale Date: 12/20/2012Estimated Capitalization Rate: 5.98%


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Comparable 3

Lease: BB & T Bank.Location: Fort Lauderdale, FLSize: 38,768 SF or 0.89 acre

Lease Commencement: January 2008Rent: $280,000 or $7.22/SFTerm: 20 yearsOptions: N/AIncreases N/ASale Price: $4,488,000Sale Date: 12/7/2010Estimated Capitalization Rate: 6.24%

Comparable 4

Lease: JP Morgan Chase BankLocation: Miami, FL

Size: 38,333 SF or 0.88 acresLease Commencement: September 2010Rent: $235,000 or $6.13/SFTerm: 20 yearsOptions: 4, 5-yearsIncreases 17% in Year 6, 12% in Year 11 and 12% in Year 16Sale Price: $3,615,000Sale Date: $9/17/2010Estimated Capitalization Rate: 6.50%

Comparable 5

Lease: Bank UnitedLocation: North MiamiSize: 30,928 SF or 0.71 acresLease Commencement: June 2012Rent: $260,000 or $8.41/SFTerm: 15 yearsOptions: 4, 5 yearsIncreases 10% every 5 yearsSale Price: $4,650,000Sale Date: 12/31/2012Estimated Capitalization Rate: 5.59%


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Comparable 6

Lease: Harbor Beach Marriot Resort and SpaLocation: Fort Lauderdale BeachSize: 714,820 SF or 16.41 acres

Lease Commencement: January 2007Rent: $2,076,360 or $2.90/SFTerm: 99 yearsOptions: N/AIncreases: 10% every 5 yearsSale Price: $48,625,000Sale Date: 11/30/2011Estimated Capitalization Rate: 4.27%

Comparable 7

Lease: Sweet Tomatoes

Location: West Palm Beach, FLSize: 48,352 SF or 1.11 acresLease Commencement: August 2004Rent: $140,000 or $2.90/SFTerm: 20 yearsOptions: 1, 5-yearsIncreases CPI every 5 yearsSale Price: $1,935,000Sale Date: 6/21/2012Estimated Capitalization Rate: 7.23%

We have also included information from a national market survey of sites that are under groundlease with particular property types. The subject would fall under the retail category whichindicated average land lease rates of 7.05%. This represents a slight increase over prior periods.


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Based on the comparables, we have concluded that an appropriate overall rate for the subjectshould be at the lower end of the range, due to the quality and condition of the development andthe strength of the subjects market and the long-term nature of the subjects lease with the Cityof Miami. Therefore, we have concluded to an overall rate toward the lower end of the rangeindicated by the comparables.

We have concluded to an overall rate for the subject of 6.00% which is within the range indicatedby the comparables and supported by ground lease comparables researched for large commerciallydeveloped sites, nationwide.

Percentage Rents

We have researched other municipal owned properties (land) that are leased to the developer orowner of the improved property. We are attempting to determine the appropriate percentages toapply to the subjects various development components, as percentage rent that will be paid to theCity of Miami Beach for the rights to the underlying site.

Case Study 1Grove Key Marina and Scottys Landing (Restaurant and Marina)

The site is owned by the City of Miami and is leased to a lessee (Grove Key Marina) and a sub-lessee (Scotty's Landing Bar). In early 2012, the City of Miami published a request for proposals(RFP) for bids on a new, 40-year lease on the property. A substantial tenant improvement isrequired in the RFP as the city seeks a state-of-the-art marina and bar. The winning bidder mustmake required minimum renovations including renovating the hangars, pavement, and bar kitchen,and repairing the dock and seawall. In exchange, the lease would be 40 years with a 10-yearrenewal option.

Per the RFP, the successful proposer must pay a minimum base rent and percentage rent. Some ofthe City's proposed lease details were as follows:

Minimum Annual Rent: $500,000 and :Percentage Rent:

Marina Operations Minimum 15% of gross revenueBar/Restaurant Sales Minimum 10% of gross revenueMarine Fueling Facility Minimum 10% of gross revenue

The RFP call for substantially higher minimum annual rent and a higher percentage of sales fromthe revenue generating components on the site.

A complete redevelopment of this property is being proposed which would likely result in furthernegotiations regarding the lease.


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Case Study 2

Biscayne Landing (Mixed Use Project Retail/Office/Residential)

The site is owned by the City of North Miami and is leased to a lessee (Oleta Partners, LLC). Thelease was negotiated in 2012 and is based on a proposed build out of the 183.8-acre site withapproximately 900,000 SF of retail, hotel, residential and recreational space. The ground lease isfor 99 years, NNN, with increases in the base rental rate of 15% every ten years. The lease callsfor development deadlines for the construction of the project, a public park and community centerand future rights to developable land with participation in the revenues from this property. Someof the lease details are as follows:

Base Rent: $1,500,000Percentage Rent:

Residential Revenues 1.75% of gross revenueRetail Revenues 1.75% of gross revenueHotel Revenues 2.25% of gross revenue

Sales (Condo or ALF Units) 3.25% or gross revenues

Case Study 3

Village of Merrick Park (Mix