1 10/2014 1

Sale / Exchange Report

IAR Church St Property

These transactions were possible only & only with

the blessings of Allah (SWT), your generous

donations and the dedication of the community.

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Report Contents History: Church Street Property

Church Street Purchase/Sale Comparison

IT Work Updates

Options presented by IT

Data on Exchange Properties

Financial Impact

Comparison of Options

IT/Shura Recommendations

10/2014 IT Report for the Church street sale 2

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History: Church Street Property

1.Aug 2001-Sep 2009: IAR Acquired 16.12 AC on Church street , Morrisville

To be used for IAR expansion / Al-Iman School.

Total cost paid over 8 years was $925,000.

2.2011-12: Due to City of Morrisville zoning changes, IAR was unable to obtain

approval from City for building a facility to meet its future needs.

3.2013: IAR Shura directed investment Team (IT) to sell/exchange this land and

acquire other properties.

4.Aug 14, 2014: Sale of Church St Land completed by IT Team

Church street land was sold for a total price of $2,418,000.

Deal included 1.106 AC outparcel in prime location on Tryon road.

This reduced available cash for other exchange properties to $1,887,000.

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AC size Buying

date

Asking

price

Final price Comments

16.12 Aug-14 $2,418,000 $2,418,000 $2,026,000 in cash + 1.106Ac

land in prime location in Tryon

mall worth $392,000

Church street sale

AC size Buying

date

Asking price Final price Comments

11.37 Aug-01 $750,000 $500,000 Paid over 3 years

1.0 Dec-01 $75,000 $50,000

3.75 Sep-09 $ 650,00 $375,000

Total Overall total Prices paid

was $550,000 (37%) less

than market.

16.12 $1,475,000 $925,000

Church street purchase / Sale Comparison

Profit from sale = $1,493,000.

Return On Investment = 160%

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Investment Team (IT) Work Updates:

IT explored over 83 exchange properties in Triangle Area

Final IT proposal included 3 properties below for acquisition:

1. 3104 Page Road, Morrisville:

24.9 ACs purchase price: $1,350,000.

Buy for development to meet future IAR needs

2. 2523 Mid Pine Road, Raleigh: (Almost ready for use) 13+ AC property is minutes away from ICR facility

Ideal for use by Schools, Youth and community for recreation.

The purchase price: $220,000.

It has a rental trailer, soccer field and 50 paved parking spots.

3. 122 International Drive,: 8 Acre purchase price $800,000. Buy as an investment. (This property is intended to be

acquired with objective is to hold until it significantly appreciates in the next 4-5 years,

Inshallah)

When planned Southport Drive extension is complete, it will have access to McCrimmon

Drive as well.

The proceeds (expected to be in the range of $1.4-$1.5 million) from its sale are to be used

for building permanent facility at Page Road.

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3104 PAGE ROAD

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2523 MID PINE ROAD

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122 INTERNATIONAL DR.

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Options presented by IT: Buy all three properties and delay part of payments.

Buy only two properties and pay Taxes on part of profit.

The tax rate of 30% plus was indicated.

In either case, it was necessary to buy exchange properties

in keeping with allowed time to avoid taxes on all the profit.

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Property

address

AC

Size

Asking price Final price Comments

Page

road

25 $1,500,000 $1,350,000 To be developed for

community use.

Mid Pine

road

13 $330,000 $220,000 For Youth, Schools &

Community use. Ready for

use with minimal expense.

Internal

drive

8 $1,000,000 $800,000* Site work mostly complete.

Bought for investment

Total 46 $2,830,000 $2,370,000 Prices reduced by $460,000

or 16.3% vs market

Data on exchange properties

*In exchange for delayed payment ($400,000 at closing

$220,000 in one year and $215,000 in two years) total price

increased to $835,000.

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Immediate Cash Impact Table of available Options

Property

address

Option 1 comment

Page Rd $1,350,000

Mid Pine Rd $220,000

International

drive $400,000

Pay $220,000

1st year. Pay

$215,000

in 2nd year

closing in 10

days

Total $1,970,000

Property

address

Option 2

Page Rd $1,350,000

Mid Pine Rd $220,000

International

drive $0

Total $1,570,000

Net cash from Church St $1,887,000

Net after exchange +

other costs

$-100,000

Net cash from Church St $1,887,000

Net after exchange +other

costs

$317,000

Taxes $-90,000

Net after taxes $227,000

Losing

$$

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Financial impact of two options

Available cash from sale of Church street =$1887,000

Option 1. Buy all three properties &

Delay payments on international drive

1. Page road land = $1,350,000 Delayed Payments:

2. Mid Pine road = $ 220,000

3. International drive* = $ 400,000 $220,000 1st year and

Total = $1,970,000 $215,000 2nd year

Fees = $ 10,000 $435,000 Total

Total cash needed = $1,980,000

Immediate cash Shortfall = $100,000

Total Cash Shortfall = $535,000

Option 2. Do not buy International drive

1. Page road = $1,350,000 Delayed Payments:

2. Mid Pine road = $ 220,000 None

3. International drive* = $ 0

Total cash needed = $1,570,000

Net cash left after exchange = $317,000

Taxes due on profit =-$90,000

Cash after taxes =$227,000

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Comparison of Options:

Option 1: Pros:

•a)Most of the deficit may be paid once Tryon Mall parcel is sold.

•b)If International Dr. can be held for 4-5 years, it will appreciate

and proceeds from its sale can be used for development of Page

road property.

Cons:

•Deficit of $100,000 immediately and overall $535,000

Option 2: Pros:

•No short or long term deficit.

Cons:

•$90,000 Taxes paid on profit will be lost for ever and there is no

chance for appreciation.

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Options to cover deficit:

1. Community Fund Raising to cover the deficit.

2. Sell 1.1 AC in Tryon mall to cover some

of the deficit. However, it may take 2-3

years to sell and may sell for $350,000-

$450,000 .

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IT Recommendation & Shura Decision

1. Acquire all three properties.

2. Delay payment of $400,000.

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Summary IAR sold 16.1 Acres on Church Street and in

exchange acquired total of 46 Acres distributed in

three different locations, AlhamdolilAllah.

These acquisitions will allow IAR to expand its

services and serve Muslim Community much more

effectively in years to come.

These exchange properties are in addition to the

current IAR facility at corner of Ligon/Atwater in

Raleigh and the Cemetery in Zebulon.