UW 2013 NAIOP Proposal by Aqua View

BLOCK 25 + LAKE UNION WATERFRONT 2013 NAIOP Challenge University of Washington Runstad Center for Real Estate Studies MSRE Studio

Prepared for VULCAN REAL ESTATE by AQUA VIEW CONSULTING

THANK YOU! Thank you to NAIOP and Vulcan Real Estate for the incredible opportunity to challenge ourselves and hopefully make a meaningful contribution to an exciting new chapter in Seattle’s history.

Our team received tremendous help from the NAIOP Competition Committee, our professors Al Levine and Chris Bitter, as well as the following professionals who went out of their way to inform and provide feedback for our proposal:

Maria Barientos, Barrientos Development Dana Behar, HAL Real Estate Frank Bosl, CBRE Susie Detmer, Cushman & Wakefield Hal Ferris, Spectrum Development John D. Gordon, Kidder Mathews Matt Goyer, RedFin, Urbnlivn.com Gabe Grant, HAL Real Estate John Hempelmann, Cairncross & Hempelmann Douglas Howe, Touchstone Greg Johnson, Wright Runstad & Company Judith Kalitzki, Foster School of Business Bruce Lorig, Lorig Associates John McAllister, Northwestern Mutual Real Estate Investments, LLC Steven O’Connor, University of Washington Runstad Center for Real Estate Studies PJ Santos, Lorax Partners Scott Shapiro, Eagle Rock Ventures, LLC Jonas Sylvester, Unico Val Thomas, Val Thomas, Inc. Jason Twill, Vulcan Real Estate

It has been exciting and enlightening working with so many talented people thoughout this process.

Sincerely,

Aqua View Consultants

Obi Amobi Michael Kaiser Daren Dai Leanna Li

Drew Dresman James Mayton Liat Gofman Yasuhiro Sakaue

Yoshinori Hirano Ji Shon

Alvaro Jimenez Jimenez

Aqua View Consultants Obi Amobi Obinna Amobi, is a second year Masters of Urban Design and Planning with a specialization in Real Estate Studies. His interests are in affordable housing, GIS mapping, and inter-disciplinary collaboration. He likes to fish.

Daren Dai Daren is this year's graduates and he is in Master of Urban Planning program in UW, with a specialization of real estate.

He has a construction background and has been interning in commercial real estate industry for 1 year.

Drew Dresman Drew Dresman is a concurrent Master of Urban Planning and Master of Public Affairs candidate. He currently works for the Seattle Department of transportation in Policy and Planning. He has enjoyed this project for the opportunity it provided to merge the knowledge and perspectives of real estate development and urban planning.

Liat Gofman Liat is a Visiting Graduate at the UW Master of Science in Real Estate program from the University of Melbourne, Australia.

She holds an undergraduate degree in Architectural Design and has worked within an Australian architectural firm on medium scale residential development projects. Liat would like to return to Seattle upon graduation in July to work with a local or international development company in commercial and residential development.

Yoshinori Hirano Yoshinori Hirano is a second year graduate student of Master of Science in Real Estate. Prior to join the UW, Yoshi worked for CapitaLand Japan KK where he was Chief of Asset Management and Investment team. He managed residential portfolio in Japan.

Certified Real Estate Appraiser in Japan.

Alvaro Jimenez Jimenez Alvaro’s core background relies on real estate, banking, and economics. In his young career, Alvaro has received important awards and recognitions. He also has studied and worked in major cities like Barcelona, LA, London, and Seattle. His expertise focuses in financial analysis, entrepreneurship, and management. His personal and professional philosophy is: “As far as I can, with everything I have”.

Michael Kaiser Originally from Vancouver, BC, Michael moved to Seattle for the Master of Architecture program at UW, adding a Master of Science in Real Estate along the way. He is looking forward to the conclusion of both degrees, with the presentation of a Seattle-based speculative alternative-tourism project this June. But most importantly, he is also the proud father of a two-month-old daughter.

Leanna Man Li Leanna’s passion in real estate is the intersection of urban planning and corporate development. She has worked for Siemens, Seattle Preservation and Development Authority (SCIDPDA) and a Washington based Real Estate Fund Management Company, focusing on real estate project due diligence, market research, feasibility analysis, and business strategy. She holds a Bachelor of Management in Real Estate and was awarded a CoreNet Scholarship in 2012.

James Mayton James' experience with CBRE on the Microsoft corporate services account and on the Washington CoreNet Chapter board gives him a unique understanding of the future needs of corporate tech tenants. As such, he's passionate about helping Seattle develop into a competitive global city capable of growing, attracting, and retaining world-class human capital.

Yasuhiro Sakaue Yasuhiro is a banker with 11 years of experience in real estate financing and investment. His employer, the Norinchukin Bank invests about $700 billion into various asset classes all over the world, including more than $10 billion in real estate related assets. His experience in finance & investment were instrumental for developing the financial plans in this proposal.

Ji Shon Ji is pursuing a concurrent Master of Architecture and Master of Science in Real Estate from the University of Washington. Ji studied architecture at Smith College and was a driving force behind the design and vision for this proposal.

Table of Contents 1 Executive Summary 2

Context

3

Uses & Programming

4

Design

5

Financial Analysis

6

Conclusion

Appendix

Herzog & de Meuron’s 56 Leonard Street; one of the case studies which informed our design

Executive Summary 1.0 1.1 1.2 1.3 1.4

Synopsis Primary Conclusions Vision Design Overview Uses & Programming Overview

1.0 Synopsis Aquaview Consultants advise Vulcan to develop the Block 25 and Lake Union Waterfront Sites in accordance with the following proposal: Block 25 is best suited for a tower-and-podium project. The tower is an upscale 24 story condominium tower, and the podium contains an eight story, high-end hotel. The podium also contains upscale fitness, cinema and dining facilities, with parking and grocery uses as well.

The Lake Union Waterfront site is best suited for a waterfront destination center, adding a world class thermal pools facility, restaurants, and event space in the form of a repurposed Discovery Center. The site is enhanced by boardwalks, plazas and small scale retail.

1.1 Primary Conclusions

Birds-eye view of the Waterfront (foreground) with Block 25 at rear.

1. The Waterfront as Catalyst

The Lake Union Waterfront has the potential to increase the value of the Mercer Blocks and beyond. South Lake Union will increase its competitiveness as a technology and life sciences hub by capitalizing on its best natural asset—the urban Lake—which simply cannot be duplicated.

However, besides Gasworks Park on the north end of the Lake, there are few places for Seattleites to relax and engage with the Lake. Lake Union Park is a component of a destination, not a destination unto itself.

By developing and reprogramming Henry Pier and Chandler’s Cove with destination entertainment, event space and dining, enabled by boardwalks and small plazas, we create a true multi-use destination. This development will create value for the Mercer

Blocks--especially Block 25--and the rest of South Lake Union.

2. Fulfilling Vulcan’s requirement for a 24/7 community In our analysis of the site and its locational context in South Lake Union, we found it to be a few amenities short of a well-rounded, 24/7 community. The Waterfront fulfills some missing recreation and leisure amenities, while Block 25 provides for hotel, condominium, fitness, entertainment, dining and grocery.

3. Iconic Site and Neighborhood Identity The Mercer Blocks and The Lake Union Waterfront have a once in a lifetime opportunity to develop a truly iconic piece of Seattle; the shore of an urban Lake in the fastest growing district in a city known for its water imagery. These are high profile sites, with an ability to shape how South Lake Union is perceived. A successful development here can give South Lake Union the identity it has lacked until now; partly through iconic, landmark architecture, and partly through its ability to create holistic experiences at the ground plane and along the lakeshore. Needless to say, a landmark hotel and condominium will command premiums in excess of a generic development at this location, and this proposal targets high end product in each category.

4. Development timing.

Block 25 and the Waterfront are to be developed simultaneously, with a 2017 completion date. The market projects favorably for both hotel and condominium uses, and South Lake Union is expected to continue its growth in the near future. Key financial metrics are discussed in greater detail in the Financial section of this proposal.

1.2 Vision VISION: A Strong Identity for a World Class Community SLU has become a national success in the tech and life science industries, but it is still on a search for a lasting identity. A stronger identity will make for a stronger South Lake Union. South Lake Union needs to continue to develop into a world class neighborhood to continue to attract world class talent, and Block 25 and the Waterfront provide this once-in-a-lifetime opportunity.

By capitalizing on South Lake Union’s connection to the Lake, we provide an identity for SLU that cannot be duplicated or replicated.

The AquaView Proposal links South Lake Union with its namesake, creating a true destination leisure and recreation area. This proposal adds much needed Boardwalk/Promenade View rendering.

on

Chandler’s

Cove.

Aqua

Executive Summary amenities to the already-successful South Lake Union district, cementing its standing as a livable, workable, 24/7 community, achieving Vulcan’s investment goals while adding value to the entire area.

We believe that by implementing the AquaView Proposal, South Lake Union will continue its forward momentum, developing into the amenity-rich, world class, perpetually competitive community that it aspires to be.

1.3 Design Overview The Aqua View Proposal considers the Mercer Blocks and the Waterfront as a cohesive whole, establishing synergies of use that will enable both projects. As a whole, the area becomes a pedestrian-centered destination worth traveling to, whether it be from across busy Mercer Street, or from across town.

By creating a destination waterfront, we provide South Lake Union with its strongest identity. This identity is strengthened by the iconic architecture of the Mercer Blocks, specifically the 240’ towers, setting South Lake Union apart from its competition.

View of the Aloha Path through Henry Pier’s system of multi-level deck space. Aqua View Rendering

The amenities on the ways; through dining, relaxing outdoors. On destination, where the

The Waterfront also provides South Lake Union with a recreational/leisure area that is both escapist and connective. Pedestrian/Cyclist paths run through the site, connecting the user with the Lake, and providing a respite from pavement and traffic.

Waterfront enable the visitor to experience the Site in a variety of bathing, boating and special events, or simply strolling, exercising or the long pedestrian path around Lake Union, this is the only true Lake meets the City.

1.4 Uses & Programming Overview The Aquaview Proposal carefully considers the potential uses on this synergy between the Mercer Blocks and the Waterfront. The ideal use identity of the Sites as unique destinations, attracting both residents providing the amenities that South Lake Union needs to become a neighborhood.

USES & PROGRAMMING: BLOCK 25

site for maximum will strengthen the and visitors, while truly livable, 24/7

Block 25 turns the existing north-south alley into a linear east-west plaza, bisecting the site. This allows lower, non-view hotel rooms to have a quiet ‘courtyard’ environment, and all uses benefit from the interior street. The interior street also provides a more immediate respite from the hum of Mercer, from those crossing the street on their way to Block 25 or the Waterfront. Furthermore, if the same east-west linear plaza is continued through to Blocks 26 and 27, the three blocks can function as a cohesive whole, strengthening the sub-district between Mercer Street and Lake Union.

In addition, the tower is placed according to the zoning requirements of the site. The unique architecture suggested in the renderings confirm the building as an iconic new piece of the Seattle skyline, visible from points throughout Seattle.

Block 25 is the obvious choice of the three Mercer Blocks to contain the high end hotel that the district needs, given that it is the first to be developed, and that it is directly across Valley Street from the Waterfront and its inevitable tourist traffic.

BLOCK 25 OVERVIEW: CONDOMINIUMS: The project is scheduled to come on line in 2017, when we forsee an increase in demand in the Seattle condominium market.

HOTEL: South Lake Union needs an upscale hotel closer to the heart of the district, surrounded by the type of amenities that are desirable to visitors.

BLOCK 25 OVERVIEW Total SF 560,345 Condominium SF: 220,500 Hotel SF: 116,000 Retail SF: 57,600 Parking SF: 161,184 Grocery SF: 5,000 BLOCK 25 CONDOMINIUMS Total SF: 220,500 Number of Units: 156 high end units Average SF/Unit: 1,200 Average Sale Price: $1,200,000 Tower floors 4th through 24th Condo Parking Stalls: 172 (1.1 ratio)

BLOCK 25 HOTEL HOTEL: Total SF: 116,000 Number of Units: 168 Average SF/Unit: 400 Average Daily Rate: $200 Assumed Occupancy: 75% RevPAR: $150 Hotel Parking Stalls: 78 (0.46 ratio) BLOCK 25 RETAIL Total SF: 57,600 General SF: 17,200 Restaurant SF: 10,400 (4 Rest.)

Fitness SF: 8,000 Cinema SF: 22,000 (3 screens) Retail Parking Stalls: 188 (1 per 306 SF) BLOCK 25 PARKING Total SF: 161,184 Total Stalls: 437 Below ground Stalls: 242 Above ground Stalls: 195

Executive Summary

1.4 Uses & Programming Overview RETAIL: Block 25 includes an upscale Fitness Club, an iPic-type Cinema, two primary restaurants with great views of Lake Union, a couple of smaller casual dining options, and a smaller Grocery store.

PARKING Due to the high water table, only one underground parking floor is permissible. The full floor of underground parking is supplemented by parking areas on Floors 1-3.

USES & PROGRAMMING: WATERFRONT – HENRY PIER Henry Pier will be transformed with public boardwalks and plazas, with one new café and a new bar in new buildings. The Discovery Center, currently serving as the marketing center for South Lake Union, was always intended to be dismantled in large pieces and moved; The Proposal suggests that the Discovery Center should be split into two units OVERVIEW: HENRY PIER and placed on the Henry Pier site, Total Interior Space SF: 13,300 one piece facing Valley Street and Discovery Center Event Space SF: 7,500 one facing Lake Union. The larger of Discovery Sales Center SF:

3,500 the two will be used for event space Small shops (café, bar, etc.) SF: 2,300 on the Waterfront, the smaller will be a Sales and Promotion Center for the Mercer Blocks and the Waterfront, OVERVIEW: CHANDLER’S COVE eventually transitioning to an information/ Building 1 (Joey’s) SF: 13,300 tourism center. Small scale retail space will Building 2 (North) SF: 42,800 also be provided for seasonal uses. The Thermal Pools 28,900 undulating boardwalk will be one of the best Restaurant 10,800 places in Seattle to connect with people and General 3,100 the water during the summer, and the retail Building 3 (South) SF: 26,300 uses will ensure that the Pier remains a Restaurant 20,000 year-round destination.

General 6,300 USES & PROGRAMMING: WATERFRONT – CHANDLER’S COVE PIER Chandler’s Cove Pier starts with the continuation of the Aloha Path boardwalk and additional outdoor spaces for gathering and people watching. When the weather is less desirable, Chandler’s Cove Pier also shines with a world class thermal pools attraction, supplemented by high end restaurants. This proposal allows Joey’s restaurant to remain as is.

The Thermal Pools are situated at the very north end of the pier, as close to the Lake as possible. While Lake Union is actually rather toxic and cold, the heated indoor and outdoor Thermal Pools provide a great way to engage the water during the long Seattle winters.

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Context 2.0 2.1 2.2 2.3 2.4

Context Overview History & Neighborhood Context Site Analysis Key Demographic Trends Key Market Trends

2.0 Context Overview In a globalized world where more and more people are finding their dreams in urban environments, there is still a certain mystique to be found in living near the water. Seattle derives tremendous value from its relationship with its many bodies of water. Made up of almost 41% water, Seattle is one of the few cities in the nation with the ability to provide residents and businesses to take advantage of the incredible possibilities that come with waterfront development. Yet despite the potential for greatness, opportunity is not always realized on an individual basis; but in an ever-changing urban environment opportunity is always around the corner.

With the changes that will be set in motion due to the rezone of South Lake Union, our site holds tremendous potential to become Seattle’s next landmark. Our proposal seeks to take advantage of this once in a lifetime opportunity and bring new vibrancy to the neighborhood. The combination of views of Lake Union, a central location, high visibility, and one of the fastest growing neighborhoods in the city position our site to accommodate a high performing, visually stunning development that will enhance the neighborhood and add value to current as well as future Vulcan investments.

2.1 History & Neighborhood Context Already the largest city in the Northwest region of the United States, Seattle boasts one of the fastest growing economies and populations in the nation. Since its earliest stages of

urban development, the city of Seattle grew around industry. From its inception as a timber town, to its boom during the gold rush, to the prominent rise of Boeing, to its present status as a national hub for biotech and software development.

Throughout Seattle’s many stages of growth, its central regions have always played a key role due to the city’s intricate connection to the water that surrounds it, with the ship canal running through the middle of the city and the city’s port having been established as one of the busiest in the nation. That being said, it should be no surprise that the neighborhood that developed on the edge of the water even today remains one of the key regions of the city.

Located in the heart of Seattle, the neighborhood of South Lake Union was one of the first of the city to be developed by early settlers. The neighborhood soon rose in prominence as pioneer David Denny bought a land claim to a large portion of land, now known as the Denny Triangle, which led to the eventual development of the city’s largest saw mill, as Seattle was primarily a timber town at the time.

Drawing of the Bogue Plan for South Lake Thus South Lake Union became home to industry, Union from 1911 and the families of workers from the mill. In the years to come, Denny’s impact was made more permanent as he participated in the extension of the canal to connect the Puget Sound to Lake Washington.

Denny, however was not the only visionary to realize the importance of owning and establishing the prominence of the most central location of the city. Although South Lake Union received a diminished amount of attention for several decades as the city’s downtown continued to develop, residential neighborhoods grew in population, and the city spread out geographically, the neighborhood was still referenced as a key location in the city’s growth and development. In the 1911 proposal, the Plan of Seattle (also known as the Bogue Plan), the area around South Lake Union was designed to become the centerpiece of the city’s future development with the creation of a Civic Center just southwest of the lake. The Plan, proposed by Virgil Bogue, saw this region as a key location due to its unobstructed connection to the rest of the city and the early expectation of a future rapid transit hub. Although these plans never came to fruition, its farsighted impact would be revisited several times in the years to come as the city continued to grow in size and population.

Fast-forwarding several decades, yet another Seattle pioneer would set his mind and wallet on turning the neighborhood into a major hub of the city.

In 1991, a plan similar to the Bogue plan was

Draft Plan for the unrealised Seattle Commons

Context proposed by Seattle Times writer John Hinterberger in which he envisioned the neighborhood becoming home to a large spanning city park, similar to New York’s Central Park. Although this plan was eventually turned down by public vote, the proposal spurred local software and real estate developer Paul Allen (founder of Vulcan and co-founder of Microsoft), to action as he subsequently invested between $20-30 million in South Lake Union property to bring the vision to light. This plan too was voted down by the public, yet nevertheless the acquired land would eventually bring a new phase of vitality and development to the neighborhood.

The neighborhood continued to develop in the form of numerous industrial and technology tenants, with an accumulation of biotech and software companies choosing to locate in South Lake Union such as the Fred Hutchinson Cancer Research Center, Zymogenetics, and the University of Washington School of Medicine. More specifically, with the recent relocation of Amazon’s headquarters to the neighborhood, South Lake Union has become one of the fastest growing areas in the city. Currently, the neighborhood is expected to accommodate an estimated 7,400 new residents and 11,800 additional employees by 2020. How the city will do this is yet to be seen, but there is little doubt that South Lake Union and its continued development will serve as a driving force to carry the city through the coming years.

2.2 Site Analysis

The neighborhood’s location in the middle of the city makes it a clear choice as one of the employment centers of Seattle though the growth in employment has also ushered in rapid population growth and a variety of improvements. The site itself is particularly well poised for high-end residential and supporting retail, restaurants and amenities.

ACCESS The site is in close proximity to several major arterial streets (Mercer, Dexter, Fairview, etc.) as well as the I-5 to the east and route 99 to the west.

With Mercer being one of the most heavily trafficked off-ramps in the city, the site will have no issue in terms of visibility, given that there is something to be seen. However, the high volume of traffic can also Valley Street Rendering with proposed improvements Source: South Lake Union Mobility Plan, 2012

be problematic, making access to the waterfront difficult by car, though the road layout is slated to change in the near future. Construction is underway to transform Mercer into a 2-way, 6 lane thoroughfare to easy freeway access. Valley St. on the other hand, will become a 2-way, 2 lane, pedestrian oriented street which would serve to calm the intensity of traffic flow adjacent to the waterfront. These traffic improvements should also ease pedestrian and bicycle access and overall make getting through the neighborhood a less daunting activity.

In addition to improvements for personal vehicle mobility, the city is also working to improve access to public transportation, an improvement that will be particularly advantageous to our site. At present, there Recently developed properties in South Lake Union is relatively good Source: Vulcan Real Estate transit service. More importantly, potential changes to the Seattle street car have been rumored, which could eventually be extended to connect the current streetcar line to First Hill, Fremont, Ballard and the U-District in the years to come.

SURROUNDING USES The site is adjacent to a variety of local amenities (dining, entertainment, etc.). The neighborhood is host to a diverse mix of businesses and uses distributed throughout, however its predominant land uses are office and commercial. Between 1995 and 2012 over 5 million sq. ft. of office space was developed within South Lake Union alone, as well as 2.4 million sq. ft. of biotech/industrial space. Alternatively, only 3.4 million sq. ft. of residential space was developed during the same time frame, accompanied by an additional 540,000 sq. ft. of retail space. That being said, much of the rezoned areas call for mixed-use development, implying the incorporation of additional spaces devoted to retail and residential uses to serve the neighborhood’s expected growth of roughly 23,000 new employees over the next decade.

According to a study released by Downtown Seattle Association, “State of Downtown 2013 Economic Report,” the neighborhood, along with the adjacent region of Denny Triangle, is home to an estimated 10,755 residents compared to 7,599 in the retail core and Western edge of Downtown Seattle. Yet despite the larger number of residents, the Lake Union/ Denny Triangle region is comprised of only 148 restaurants and 100 options for retail,

Context figures way below Downtown’s 390 and 536 respectively. Given the current mix of uses, there is a relative lack of residential and retail establishments to compliment the neighborhood’s abundance of employees and job oriented development. There is also a notable disconnect in the neighborhood as a whole due to the major barriers created by Mercer and its connection to I-5 and SR-99. Thus despite the spread of retail, office, and residential developments, establishments along the waterfront (our site included) and areas north of Mercer remain both under-utilized and under-serviced.

LINKAGES As the neighborhood is known more for its major employers rather than visitor attractions and residential accommodations, it experiences more commuters coming into the neighborhood simply for work over entertainment. In other words, the necessary

Highlights of Coming Transportation Improvements

linkages to the neighborhood are areas of abundant residents (employees) and retail.

That being said, the neighborhood is adjacent to several others that are largely residential, such as Fremont, Wallingford, Capitol Hill, Magnolia, and Queen Anne. Thus the neighborhood is well connected to several key locations from which employees can commute. Similarly, residents living in South Lake Union have easy access to several major shopping centers such as the retail core of Downtown Seattle as well as a relatively short distance to further options in Northgate and Bellevue, and the nightlife amenities of Fremont, Capitol Hill and Ballard. Also in close proximity are the major institutions located in the U-District (University of Washington), Capitol Hill (Seattle University), and Queen Anne (Seattle Pacific University).

SEATTLE At present the city’s population is estimated to be 616,500 according to the city’s website. Growth has been steady in recent years. In general the population experienced growth in almost every age group, with the largest increases in persons aged 55 74, and moderate increases in adults aged 20 - 45. With adults (25 - 55) comprising roughly 50% of the population, the median age is 36.1. The city is projected to accommodate an additional 40,000 over the next 7 years, cumulatively 76,000 more by 2030.

Lake Union While the individual neighborhood’s boundaries are rather vague, and therefore unclassified

by Census data, Lake Union as a forecast analysis zone (FAZ) has been determined by the PSRC to include South Lake Union, Eastlake, Westlake and a small portion of South Queen Anne.

LAKE UNION Lake Union’s population growth in particular has been impressive over the last 10 years as it outpaced several other largely residential neighborhoods, and will likely continue to do so given the recent rezone and the implicit height bonuses for residential development. According to PSRC projections based on 2010 Census data, growth in the Lake Union region will outpace neighborhoods such as Fremont, Ballard and the U-District in terms of population, number of households and employment in coming years.

While specific over the last groups; these similar growth

forecasts can be misleading 10 years in the Lake Union will serve as a key market trends will continue through

at such a small scale, population growth region has been focused in several key age for our proposal under the assumption that the near future.

At present, the population ranging from age 20-55 has experienced the most growth in the region and now accounts for 77% of the regions’ residents, with a median age of 33.4 based on 2010 Census data. The average household income is $60,790, while the average family income stands at $92,643. It should also be noted that about 52% of households earn between $25 – 100,000 per year.

Based on these demographic trends, Lake Union’s forecasted share of residential growth, expected increases in Amazon’s physical presence and employment, as well as the general economic condition of the city and neighborhood, we envision our proposed development to serve a range of future residents. As the neighborhood continues to improve economically, driven by major Lake Union employers, we imagine that future employees will likely be the same people seeking to live, stay and play in the neighborhood. Not far from reality, we envision a neighborhood of young professionals, mostly singles but with young couples, small families and empty nesters in the mix as well. A subclass of employees from Amazon, Fred Hutchinson, UW School of Medicine, and several other key industry workers; A subclass of future residents that are fairly well off, with a healthy amount of disposable income, looking to start a life in the fastest growing neighborhood of a city on the brink of innovation.

Context 2.3 Key Economic Trends OVERVIEW As with the rest of the nation, Seattle’s economy continues to recover from the economic recession, which has distressed global finances since 2009. The United States GDP has been on the rise and is expected to continue to improve, with forecasts showing growth through the year 2022.

Washington State as well has shown signs of recovery in recent years with its GDP having improved since 2009.

The Seattle MSA is expected to experience significant growth in the near future, having outpaced the increase in the economies of both the US and Washington State in recent years.

EMPLOYMENT Despite the economic recession, Seattle continues to prosper, albeit at a depleted rate, due to the growth in population and specialized job force. Overall, the city has a Hachman Index of .955, up from .91 in 2001. This figure reflects the Seattle MSA’s highly diversified job force, which is fairly resistant to fluctuations in the national job market. Between 2001 and 2010, Seattle job force increased by an estimated 33,000 workers. Several industry sectors have grown at rates higher than the national level; specifically, the industries of Services, Arts & Entertainment, Real Estate, Information Technology, Transportation, Professional & Technical Services, and Manufacturing, have all remained strong in terms of employment over the last 10 years. These industries, particularly Information Technology and Professional & Technical services, which are the regions leading industries, will continue to drive the cities economy in years to come as major sources of jobs and innovation. Although these industries together, along with health care, account for only 27% of the MSA’s jobs, several of the associated major employers are located in South Lake Union.

Looking forward, Seattle’s work force is forecasted to increase by 72,000 employees by the year 2020. According to forecasts estimated by the PSRC’s data analysts, this increase in jobs will favor South Lake Union over a several other Seattle neighborhoods as its share of employees continues to grow.

REAL ESTATE MARKET Since 2009, the volume of investment in commercial real estate has been increasing due to historically low interest rates and attractive prices. The volume of US investment in 2012 reached approximately $230 billion, which is almost same volume as in 2011.

Although there is some global uncertainty and a lack of seller motivation, and buyer

confidence, we expect this trend continue in next couple of years. According to ULI Consensus Forecast, after a mainly flat 2012 with respect to investment volumes, activity in US is anticipated to re-accelerate by mid-year 2013, and reach up to 12% growth from 2012 levels.

Uses & Programming 3.0 Overview 3.1 Block 25 Uses & Market Analysis 3.2 Waterfront Uses & Market Analysis 3.0 Overview OVERVIEW Based on our analysis of the historical and physical condition of the sites, the current and forecasted local market conditions, and relevant land use code and regulations, we will recommend a series of uses for the subject properties on both sites and provide the hypothetical development programs with further details in this chapter.

For the Block 25 site, we are planning to develop a residential tower grounded by an innovative boutique hotel and retail site, supported by parking. For the Waterfront sites, the primary goal of the future development is to create an innovative, self-supporting mix of leisure and retail uses. The Waterfront gives an identity to South Lake Union, connecting Chandler’s Cove and Block 25 (as well as Blocks 26 and 27 in the future).

Block 25 is intended to become a multi-functional place for people to stay, play and live on the site. On Block 25, we propose an iconic high-end condominium tower, surrounded by an architecturally significant four-star hotel anchored by lifestyle amenities such as an upscale athletic club.

In order to ensure flexibility for project financing and disposition strategies, a Master Association will be established for Block 25 with a Master Condominium Agreement. While legal fees will

Birds-eye view of Block 25 & Waterfront

BLOCK 25 PROGRAMMING SUMMARY (Unit: SF) Stories Total SF Condominium 21 220,500 Retail 55,600 General 22,000 Restaurant 10,400 Gym 2 15,000 Movie Theater 2 8,000 Hotel 116,000 Total Parking 161,184 Broken down per type: Above ground 89,184

Below ground 72,000 Broken down per use:

Parking for Condominium 63,297

Parking for Hotel 28,737

Parking for Retail 69,150 Open Space 14,400 Total Total 567,684

increase (as seen on the project Proforma), the Master Association organization will allow Vulcan to refinance the hotel and retail components of the Block 25 development with a permanent loan while the condominium units are sold through at a conservatively projected rate of five per month. Furthermore, the hotel and retail components can be sold independently of each other to specialized REITs or other institutional investors, allowing for optimal exit capitalization rates during those transactions.

3.1 Block 25 Uses & Market Analysis CONDOMINIUM TOWER OVERVIEW The iconic condominium tower featured in Block 25 is the backbone of this development proposal in many respects窶馬ot only does it offer a public face in the form of an identifiable landmark that will define South Lake Union to the rest of Seattle, but it also is projected to capture much of the externalized value that is created by the amenities that are being proposed for the waterfront sites. The decision to develop condominiums was made based on a few important analyses: 窶｢ Premium location in an amenity-rich neighborhood 窶｢ Apartment and condominium supply forecasts favor new

condominium projects 窶｢ Job growth and demand in the Seattle market

LUXURY CONDOMINIUM RESIDENCES Land Value per Unit $81,067/Unit Hard+Soft Costs ($/GSF )$460 Sales Costs 3% of sales revenue Condominium Gross SF 220,500 Efficiency Factor 80% Net SF (NSF) 187,425 Average Unit NSF 1,200 Average Unit Sale Price $1,200,000 Average Unit Sale Price/NSF $1,000/NSF HOA dues $1.00/SF Parking Ratio 1.1 per Unit Average Parking Unit Sale Price $50,000 Floors 4-24 Unit Sale Timing 44 pre-sales, assumed 5/month

Uses & Programming LUXURY CONDOMINIUM FOR AN AMENITY RICH NEIGHBORHOOD Our condominium site on Block 25 is unparalleled in locational attributes and amenities.

Located in a desirable neighborhood of South Lake Union, it boasts a Walkscore rating of 95, a Walker’s Paradise with excellent transit. Furthermore, our residents will have uncontested views of Lake Union and the city skyline as the proposed zoning change of ‘one tower per Mercer block’ results in a permanent and panoramic view that is extremely rare in the rest of the city.

CONDOMINIUM SUPPLY & COMPETITION Current condominium stock is rapidly declining, especially at the higher end of the market while apartment deliveries are set to spike with over 4,855 units planned or under construction for inner-urban Seattle neighborhoods between now and 2015 Q1. Insignia by Bosa Development with 600 plus units entering the market in 2015 will be the only other new condominiums at the time of our projected delivery in 2017.

1 Four Seasons The sheer number of units at Insignia suggests that they will 2 1521 2ND Ave 6 carry diverse inventory for different income levels and we expect 3 Escala 5 4 to compete only with their top 3 luxury units. Considering that 4 Cristalla 2 relatively few condominium projects have been announced due to 5 Olive 8 1 the lingering residential market hangover, bold developers such as 6 Insignia Vulcan who are willing to make the first move have an opportunity to deliver in an environment with little competition.

There is no direct competition for our luxury condominium tower. Similar condominiums with comparable

Source: Realogics Sotheby’s International Realty (RSIR) Source: Realogics Sotheby’s International Realty (RSIR)

amenities in downtown Seattle are selling from $500/SF to $1,000/SF. In this wide range, Four Seasons positioned itself at the top of the tier with $1,000+/SF sale price. With its exclusivity of 36 residences on top of the 5-star hotel, offering top amenities and views, it is one of the better comparables. According to UrbnLivn blog, Escala with $700-800/ SF sales prices have sold 8 units in Feburary 2013 while 1521 2nd Ave, at $895/ SF “commanded approximately 50% of market share for $1M+ condos since delivery in 2009.” (Urbnlivn) Both Escala and 1521 2nd Ave speak to the optimistic recovery in the luxury condominium market, and our condominium tower with permanent views of Lake Union and the city skyline, unparalleled amenities, iconic design, and SLU locational attributes, is expected to be the most competitive condominium tower in Seattle. Our average sales price of $1000/SF, an assumption of $850/SF base price plus $150/SF upgrades, will be outfitted with a very high quality of amenities with the construction cost Club House: Fitness Room, of $470/sf.

Top Amenities

Lounge, Wine Bar Discounted Membership to JOB GROWTH & DEMOGRAPHICS fitness club in Block 25 With the average sale price at $1.2 million, our condominium buyers include Parking, individuals or households with Valet an income of $200,000 or above. Included in this target Optional Package

demographics are empty nesters or baby boomers, typically with equity to invest, looking to downsize their current homes, or executives with high paying jobs looking to live in close proximity to diverse amenities.

- 6.3% (18,418) of Seattle makes 200k+. This $1.2 million average price number will grow to be 6.7% (21,500) in 2017. less 20% equity ($240,000) $960,000 Mortgage An increase of 16.7%! @3.5 % interest rate; 30YR Fixed - Currently 14.17% of the Lake Union population $4,310 monthly payment + $1,200 HOA fee is made up of 55+ age demographics. $5,510 total monthly payment - Forbes magazine ranked Seattle as number $66,130 annual payment one in their ‘Top Ten Cities of Tech Job $198,000 Annual Income @ 30% towards housing Growth,’ with 43% job growth since 2000, 12%

WHO

Top Amenities Club House: Fitness Room, Lounge, Wine Bar Discounted Membership to fitness club in Block 25 Parking, Optional Valet Package

Uses & Programming since 2010 in high-tech industry (7.6% STEM growth), surpassing the San Francisco Bay area.

FOUR STAR HOTEL On Block 25, we propose a state-of-the-art, iconic, four-star hotel that will be a reference point in Seattle and part of the South Lake Union neighborhood’s heart. The concept does not intend to maximize the building envelope, but instead creates a scaled, distinctive building that maximizes views and offers a sense of privacy, belonging, and individuality, as well as private balconies for most rooms. The building envelope will be distributed along Block 25, and will benefit from the direct connections with the waterfront spa and thermal pools, as well as lifestyle retail amenities. All are contained within a unique destination landmark—the South Lake Union waterfront.

The proposed hotel is composed of approximately 116,000 GSF with 168 rooms that average at 400SF/room in size.

15% of these rooms will be slightly larger suites, while another will serve as an exclusive presidential room. The hotel will also feature a high-end restaurant with excellent views of Lake Union. The Average Daily Room is projected at $220 with a 75% occupancy rate, yielding a RevPAR of $165.

The main customers the hotel will attract are higher-income leisure travelers who want to stay in a neighborhood surrounded by amenities, especially the convenient access to compelling entertainment choices on the waterfront in the form of a destination thermal pool complex, top restaurants, the Museum of History and Industry, seaplane tours, and various boating opportunities. While some business travelers will inevitably be attracted to this destination, the target market is the overnight visitor that has come to Seattle for leisure and to sample the best of what the city can offer—a segment said to compose 80% of Seattle’s overnight visitors, most of whom arrive by plane and Existing Hotels Proposed Hotels

will seek a pedestrianoriented destination.

In order to stay competitive with some of the other bestin-class hotels in central Seattle, the proposed hotel concept should seek a flag such as W Hotels.

This modern-styled flag already operates one hotel RevPAR $220 in downtown Seattle and ADR $165 would likely be interested in operating a complementary hotel that is better oriented towards relaxation visitors that will prefer a quieter central neighborhood with waterfront proximity, low crime rates, and superior transit access for facilitating trips to Seattle’s top destinations. W Hotels have experience linking their hotel operations to high-end spa businesses—a perfect fit with the neighboring thermal pool complex, and perfect for synergistic business tie-ins.

The nearest key competitor is the SLU Pan-Pacific, also owned by Vulcan. While the proposed hotel assumes ADRs similar to the Pan-Pacific, we expect this location to be more competitive than the Pan-Pacific due to the superior location and amenities mentioned previously.

That said, the overall allure of SLU will be enhanced by this proposal, generating more visitor interest in the neighborhood and benefitting the Pan-Pacific by establishing a critical mass of tourism-oriented business agglomeration. We can expect both of these Vulcanowned hotel properties to maintain an occupancy rate near the historical norm of 75% per the forecast below.

Top - W Seattle King Room Bottom - The Living Room at W Seattle

HOTEL NOTES In order to continue growing as a holistic, mixed-use district, South Lake Union needs an upscale hotel closer to the heart of the district so that overnight visitors can experience the best of what the neighborhood offers throughout their stay in Seattle.

We assume it requires two years to stabilize hotel performance, and the hotel will operate 8,000 SF of retail space for a restaurant, bar and small shops. These spaces will be leased to tenants with $28/SF. As a result, we expect an unleveraged IRR of 8.9% and a leveraged IRR of 19.6%.

Uses & Programming The podium design adopts the “stacked blocks” strategy, terracing individual hotel units on top of ground floor retail.

Some hotel units terrace down towards the courtyard while others towards the water but most units, as a result of the terracing, have a private balcony. On the ground plane, retail stores front both sides of the interior plaza. This is an intentional strategy to bring more activities in and through the block, allowing the public to experience this landmark in many ways.

Retail

LIFESTYLE RETAIL Restaurants & General Retail Block 25 is projected to both generate and fulfill a strong local demand for Restaurants and Cafés. The surrounding retail market has provided a history of consumer behavior and preferences for dining places, with primary customers being employees from Amazon, Fred Hutchinson Cancer Research, and other nearby companies We define our major retail market as leisure travelers attracted to the SLU waterfront’s amenities, as well as the employees and residents that live in the neighborhood and earn above-average disposable income and Block 25 prefer a high-quality urban life style. As a Specialized Fitness Studios Comprehensive Fitness Centers result, we target two main categories for future dining retail at Block 25: mid-to-high end and diverse restaurants & cafes with substantial public seating space and a good view of the lake. The average size we are targeting for restaurants is 4,000 SF, on either the first and second floor of the building; the proposed average floor size for general retail is 1,000–2,500 SF, only on the first floor (no retail will front on Mercer due to the heavy traffic).

In addition to mid-to-high end restaurants, bars and Cafés, we propose other types of Small Boutique Retail and will include 5-8 stores in Block 25. Successful Projects in SLU are often local and small. We are continuing this model and offering more local/ small retail tenants that are focused on food and beverage, grocery stores and some small boutique shops.

Block 25 Retail Restaurants General Retail Cinema Fitness Center Type Mid-­‐to-­‐high end restaurants Cafe, boutique shops 3 Screens, iPic Model Upscale Basic Total SF 10,400 22,200 8,000 15,000 Avg Floor Size 4,000 2,000 2,000 15,000 Rent/SF $34 $30 $25 $28 Construction Cost/SF $220 $220 $180 $180 Space Requirements 14' height, 1st & 2nd Floor Lease Structure NNN TI $100 $100 $80 $80 Op. Ex. $1.15 $1.15 $2.00 $2.00 6.00% Cap Rate Parking Ratio 1/1000SF ENTERTAINMENT We plan to include a movie theater and a fitness club in Block 25.

For the movie theater concept, we propose an 8,000 SF cinema with three intimate screening rooms, each seating 100-150 guests. The cinema features food and alcohol table service that can be summoned with a digital menu system. Considering the local corporate and high-end residential presence, it is foreseen that movie screens will be rented out for special events., For the gym, we propose a high-end athletic club, providing lots of amenities and diverse studios (yoga, dances, zumba, etc.) We offer an “exclusive & luxury” athletic club atmosphere, such as Athletic Wellness Center, in-door Spa, club events, food & wine, special events & meetings.

According to Diversified Health and Fitness (diversifiedhf.com), health club members are affluent. The mean household income of a club member in 2005 was $82,900; members with household incomes of over $100,000 accounted for 33% of all club memberships, as of 2005. According to Health Club 2007

The Living Room, Portland, OR

Uses & Programming Industry Review by active marketing group, as of 2005, 50% of health club users have household incomes over $75,000. The medium user age is 41, while 69% of them are at the age between 18 and 54. Currently there are at least 9 fitness places within 0.5 mile from our site. Considering the demographics of the neighborhood and the increased demand that is projected due to new employment and residences in SLU, a health club concept is projected to do well at this location.

3.2 Waterfront Uses / Market Analysis “I’ll meet you by the water…”

Our proposal will turn the waterfront into a year round destination for both residents and visitors alike and will further assert South Lake Union’s position as ‘the place to be’ in Seattle.

Chandler’s cove will be transformed into a waterfront leisure precinct composed of modern thermal pools and spa, award winning restaurants and a waterside promenade with casual sitting and café and ice creamery and concealed parking.

Henry Pier will become a place for social gatherings of all sizes with a multi layered deck which wraps around an open air concert stage, flexible indoor event space and casual dining and bar.

BLOCK 25

Waterfront Zoning Compliance Key Elements: Zoning: C2-40

ALOHA PATH

WATERFRONT

Aloha Path diagram

Uses and Programming

THERMAL POOLS & SPA The 29,000 SF of destination thermal spa offers a unique attraction to the South Lake Union waterfront that is perfectly tailored to the Seattle weather and lifestyle. The center is comprised of indoor and outdoor heated soaking pools, spa treatment rooms, a reception area, a small cafĂŠ, showers and changing rooms. The thermal soaking pools will vary in size and depth, offering different levels of privacy and social interaction.

The pools will have a total capacity of 120 guests with an estimated average of 2,000 visitors per week, including hotel guests and tower residents from Block 25.

Thermal Pools & Spa Total NSF: 26,000 SF Sales/Revenue: $70/ per visit ConstructionCost: $250/SF Lease structure: NNN (All included) Lease term: 30yrs+10yrs option Rent:

$23.5/SF TI(Concession): $100/SF OperatingExpense: $2/SF Cap Rate: 7% Parking Ratio: 500SF/Stall

Thermal Pools and Spa at Chandler’s Cove

The pools will be heated using a sustainable geothermal heating system and will use on-site recycled water. The structure we purpose will be built in cooperation with the spa management company, which will run the thermal spa center on a long-term lease agreement. The main pool is located outdoors at the end of the pier, with panoramic views of Lake Union and an infinity edge.

RESTAURANTS Two new fine dining restaurants will be built elevated on the Chandler’s Cove site with premium views of the water. Current tenant Daniel’s Broiler will be extended the opportunity to relocate to the new venue, due to design changes to the site’s orientation, once development has been completed. Joey’s restaurant will be kept as is on the site. with some landscaping and site work to improve connectivity.

These restaurant spaces will have premium views and a growing number of walk-in traffic from neighborhood residents, in addition to those who come to the area for the lakefront views and upscale dining.

Waterfront Fine Dining Restaurants

Upscale Restaurants on Chandler’s Cove

Total NSF: 27,220 SF AverageFloorSize 9,000 SF Sales/Revenue: $600/SF/Yr ConstructionCost: $185/SF Lease structure: NNN (All included) Rent:

$31/SF TI(Concession): $100/SF OperatingExpense: $1.15/SF Cap Rate: 7% Parking Ratio: 500SF/Stall

Uses and Programming

FLEXIBLE EVENT SPACE As part of the proposal, the South Lake Union Discovery center will be relocated to the waterfront in two sections. The structure was built in such a way that it could be moved if such a need should arise; we feel that the center would be better utilized in this vibrant location, as well as provide a cost Flexible Event Space efficient means to enhance the site. The larger structure will function as a flexible Total NSF: 6,900SF waterfront event space, which can be hired ConstructionCost: $70,000 to Relocate Lease structure: On per use basis out for private functions and local events.

Rent: $550/day Next to the indoor event space will be OperatingExpense: $6/SF an open-air concert stage to accommodate Cap Rate: 7% large outdoor functions.

Casual Dining

Event Space Casual Dining Sales office Henry Pier

Total NSF: 13,000SF AverageFloorSize 2,100SF ConstructionCost: $160 / SF Lease structure: NNN (All included) Rent:

$26/SF TI(Concession): $80/SF OperatingExpense: $1.15/SF Cap Rate: 7% Parking Ratio: 500SF/Stall

South Lake Union Discovery Center Relocation

CASUAL DINING Chandler’s Cove will also be re-structured to include a stepped promenade along the waterfront with casual outdoor sitting, a café, an ice cream parlor, and small-scale retail.

Henry Pier will also feature a bistro and a bar overlooking the park and lake.

SOUTH LAKE UNION MARKET & TOURISM CENTER The smaller portion of the Discovery Center will be located on Henry Pier, closer to Valley Street, and will be used as a sales office for the new developments on blocks 25, 26 and 27. Once it is no longer required as a sales office, the structure will function as a tourist information center and can provide small-scale retail.

MARINA & YACHT RETAIL The existing marina will be kept in its current form with maintenance work done as required.

Opportunities to use boats to host events, parties and draw tour groups will be pursued at the end of Henry Pier.

The current marine related retail offices will be accommodated within the Joey’s Restaurant building and within the new Chandler’s Cove structure.

SLU Marketing & Sales Office Total NSF: 3,000SF ConstructionCost: $40,000 to Relocate Lease structure: Used by Vulcan Rent:

$0 OperatingExpense: $6/SF Cap Rate: 7%

Marina Total NSF:

81Deck (4,806 Lineal Foot) Rent:

$15/Lineal Foot/month Operating Expense: 20% Gross Revenue DNR Lease: $119,050/year Cap Rate: 12%

Yacht Retail Total NSF: 14,858SF AverageFloorSize 1,000SF ConstructionCost: $130 / SF Lease structure: NNN (All included) Rent:

$25/SF TI(Concession): $80/SF OperatingExpense: $1.15/SF Cap Rate: 7% Parking Ratio: 500SF/Stall

Uses and Programming PARKING Chandler’s Cove will offer 128 stalls of concealed car parking to service the spa, marina and restaurant users.

Our proposal removes parking from the street level and relocates it out of the line of vision to allow for a smooth transition from the street to the site. An additional 30 stall surface parking will be available on the Henry Pier site. Since the waterfront will have prime connections to public transportation, lower parking ratios are anticipated per use. If extra parking is required on days when large events take place, this can be fulfilled by utilizing parking on the Mercer blocks and adjacent Union Park parking.

Parking Total NSF: 128 stalls (44,790SF) Average Stall size: 350 SF Construction Cost: $10,000/stall Rent :

$140/stall/mth, $4.00/h\r Operating Expense: $1.15/SF Cap Rate: 7%

Concealed Parking Garage at Chandler’s Cove

THERMAL POOLS RESTAURANTS RETAIL PARKING Waterfront Section

Intentionally left blank

Design 4.0 Design Strategy 4.1 Sustainability 4.2 Project Phasing & Timeline 4.0 Design Strategy The overall design strategy for the proposal is to create an Urban Playground across both the Block 25 and Waterfront sites. The Waterfront site will be dedicated to leisure and recreation through the provision of outdoor space for gathering, celebrating, relaxing and more. The Waterfront is what positions Block 25 to offer one of a kind condominiums and a world class hotel: landmark architecture in a lakefront neighborhood rich with amenities and instant access to all Seattle has to offer.

BLOCK 25 With the iconic design of the tower and the podium we are proposing to establish Block 25 as a visual landmark for South Lake Union. The condominium tower, soaring at 240 feet, is a steel-framed, glass structure that can be seen from many points throughout the city.

Built on a 10,500 SF floor plate, the units are laid out encircling a core offering views of both the water and the Seattle skyline.

As the first building to take advantage of the lakefront block rezone, this tower will set the stage for how people perceive the area. A building of architectural significance will raise the profile of South Lake Union as a place to live and draw future residents to the adjacent blocks. Condominium buyers will have permanent views and the ability to walk across the street and enjoy the new Lake Union waterfront.

Fig. 1 Tower precedent, Herzog and de Meuron

Fig. 2 Hotel massing precedent, BIG

The podium hotel design also adopts the “stacked blocks� strategy, terracing individual hotel units on top of ground floor retail. Some hotel units terrace down Fig. 3 Courtyard rendering, Aqua View

towards the courtyard while others towards the water but most units, as a result of the terracing, have a private balcony. On the ground plane, retail stores front both sides of the interior plaza. This is an intentional strategy to bring more activities in and through the block, allowing the public to experience this landmark in many ways.

THE WATERFRONT Waterfront Concept: Urban Playground/ Connectivity The design strategy for the Waterfront prioritizes the Aloha Path, which will connect Aloha Street W to Aloha Street E, using the existing pedestrian bridge on the west side of MOHAI, and creating a new boardwalk path through the Henry Pier and Chandler’s Cove Pier sites. The Aloha Path meanders through boardwalks to open spaces to undulating decks, offering a variety of avenues for people to engage the waterfront.

It is essential that the Waterfront and the Mercer Blocks become a sub-district of their own, with a variety of uses to provide for visitors’ needs once they are there. Acknowledging that Mercer Street traffic provides a logistical and psychological barrier to some potential visitors, our aim is to provide a space for activity and entertainment for hours, making it ‘worth the trip’ in every regard.

Chandler’s Cove Boardwalk rendering, Aqua View

BLOCK 25

ALOHA PATH

WATERFRONT

Aloha Path diagram

Once completed, the waterfront will feel like one continuous public space from Lake Union Park to Chandler’s Cove. The eastern end of this stretch will have the most intensive uses with restaurants, retail and the thermal pools with a gradual transition to the museum, followed by park Replanted swale on Chandler’s Cove Pier

space at Lake Union Park. Henry Pier will operate as the bridge between these two ends offering more public space than Chandler’s Cove and more amenities than Lake Union Park.

Together, the waterfront will be the perfect
place to set out on a run, take a romantic stroll, meet friends for lunch, or take a date for a memorable evening. The ability to cater to visitors both day and night, rain or shine, is what will ensure Blocks 25, 26, and 27 are the premiere residential properties in central Seattle.

PRECEDENTS INFORMING WATERFRONT DESIGN

Yokohama Ferry Terminal, FOA

The Highline, James Corner Field Operations

4.1 Sustainability Key sustainability strategies in the proposal include storm water management, transportation considerations, and LEED certification.

All the buildings in Block 25 will aim for a LEED Gold standard. Plants and landscaping will both create a beautiful place as well as help with ecological functions. The individual balconies of the hotel rooms will use captured rainwater for planter boxes while the Chandler’s Cove Pier will dedicate over 5000SF of soil (originally landfill) to be replanted with native species to mitigate storm water runoff from the area.

While we recognize the need for parking, particularly for luxury condominiums, the site will build on transit investments and continue Vulcan’s strategy of creating attractive neighborhoods through walkability, both in terms of proximity of uses and attractive urban design. Once Blocks 26 and 27 have been developed we recommend creating car share opportunities, subsidized transit fares and bicycle share programs for condo residents, employees and hotel guests to reduce the need for parking and provide attractive and useful amenities.

We recommend that Vulcan lobby the city to ensure completion of the proposed streetcar expansion as well as improved Lake Union pedestrian and bicycle paths. We believe that demonstrated progress on these efforts in 2017, along with Vulcan continuing as a leader in comprehensive sustainability will add significant value to the project and its neighbors.

4.2 Phasing & Timeline VULCAN’S OVERALL STRATEGY The development of Block 25 and the waterfront sites will begin Vulcan’s formation of a new neighborhood along Lake Union. In addition to the proposal we have outlined, Vulcan will need to devise a strategy for the subsequent development of the other tower blocks along Valley Street. By focusing first on the waterfront and Block 25, the following two residential tower blocks should be easier and more profitable to develop.

Timeline for the Waterfront and Block 25 We recommend that Vulcan begin development immediately and simultaneously on the Waterfront and Block 25. The number of components, shoreline regulations, the prominence of the location and the controversy surrounding the tower height will inevitably require a longer than average time for design, planning and securement of entitlements.

We feel that two years is an appropriate estimate for this process for the following reasons:

Design The Henry Pier site should be relatively easy to entitle by shoreline permit standards.

We are not proposing any new conditional uses or requesting variances. By avoiding both substantial development overwater and alteration of the shoreline itself, the shoreline permitting process will not need to involve the Army Corps of Engineers or the Department of Ecology. We initially proposed a pedestrian bridge to the Center for Wooden Boats but decided it would be better to pursue that idea separately at a later time to ensure it would not hold up the rest of the development.

The Chandler’s Cove site is similarly in line with the city’s goals outlined in the shoreline plan; though the thermal pools and the new promenade along the water present

Project Scheduling Block 25

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2013

2014

2015

2016

2017

2018

2019

2020

2021

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2023

Legal and Entitlement Planning and Design Construction Marketing/Lease up/ Stabilization Condos Hotel Retail Parking Operations Disposition/Sale Condos Hotel Retail Parking Waterfront Building 1 & Marina Land Contribtion Operations Building 2/ Parking, Building 3 & Open Space Legal and Entitlement Planning and Design Demolition Construction Marketing/Lease up/ Stabilization Operations Discovery Center & Small Shops Legal and Entitlement Planning and Design Demolition Relocation (Discovery Center) Construction (Small shops) Marketing/Lease up/ Stabilization Operations Disposition/Sale (All properties) (not recommended but assumed)

(Only Discovery Center open in 2015)

potential delays. However, even if this results in revisions and exorbitant delays, the development will not suffer dramatically as the site will continue generating revenue throughout the permitting process.

The largest potential delays for Block 25 will come from the alley vacation process and design review. The alley vacation process should not be controversial as the reconfigured alley will be a major improvement for circulation over the current alley, which intersects Mercer, and zoning prohibits alley access on Mercer. The design review process could bring out a large number of citizens who oppose the height of the building. However, we feel that a unique, high-end building will have greater appeal to design review board members than a generic building and the high construction budget can easily absorb any revisions required by the board. Ultimately, the development cannot be delayed based on height alone and the goal of our proposal is to make this relatively small tower as attractive as possible.

By moving quickly, this project can be well timed to capitalize on excellent market conditions for condominium sales between 2017 and 2019 (see Condominium section in Uses and Programming for more information). Completing the waterfront before the tower is finished ensures condominium buyers will be able to see the new amenities and urban design, which will elevate Block 25 above all other high-end condominiums in the Seattle core. At the same time, the rest of South Lake Union will continue to mature and develop into a thriving neighborhood, thanks to the fresh infusion of retail, restaurants, and other amenities in the area.

Financial Analysis Block 25 and the Waterfront have more than 10 development components including parking, open space, and many other uses. These components have been comprehensively detailed, modeled and considered. Consequently, this section intends to provide a quick overview of the finances broken down by the two sites and main uses. For more detail on each aspect, we recommend the comprehensive proformas and summaries attached in the appendix of this report. These proformas present important elements such as the financing and land value distribution to the best of our knowledge on a use-byuse basis, capturing the important, strategic financial considerations. This section is an introduction and overview, supplemented by the attached Appendix.

1.

Block 25 The main purpose of Block 25’s financial summary is to reflect the potential of a unique landmark through numbers. Block 25 is the Leveraged IRR Unleveraged IRR Cash on Cash (incl. Sale) most profitable component of the Waterfront 8.69% 6.40% 111.89% project, and we have devised a Block 25 16.92% 12.47% 192.47% financial strategy that balances risk-return according to the usual Project Returns preferences of our client, Vulcan.

Waterfront Block 25 We believe the financial risks of the project have been optimally 192.47% managed, yielding an unleveraged IRR of 12.7%, and a leveraged IRR of 18%.

111.89% (1) Condominium Tower: This 16.92% component of our landmark de12.47% 8.69% 6.40% velopment is also a key in the Leveraged IRR Unleveraged IRR Cash on Cash (incl. Sale) financial performance of Block 25.

Composed of 21 stories, with a floor plate of 10,500 SF, and an average unit size of 1,200 SF, the impressive and modern tower features 147 luxury high-end units with unique and exquisite finishes – with all its associated hard costs accounted for and reflected in the development costs. The average unit will sell for $1,200,000, translating in a sale price of $1,000 per SF. The ratio of parking reserved for the condominiums is 110%, meaning that each owner will have the option of having at least one parking stall associated with the unit for an additional $50,000 per stall. The projected condominium sales will start with 30% in presales during construction and 5 units/month after completion due to a timing strategy. The bulk will be sold mainly during 2018 and 2019 with 61% and 29% of the stock being sold each of the years respectively.

An important side note is that the affordable housing required by code has been accounted through a payment in lieu, which means no affordable housing is included in the development, but a payment of

$2.5 million has been added in development costs.

(2) Hotel: In our hotel project, we plan to develop and start managing 168 rooms in a four star hotel in 2017. Our room price (ADR) assumption is $220, stabilized occupancy rate is 75% and expense rate is 80%. We assume it requires two years to stabilize hotel performance. Also, we assume the hotel will operate 8,000 SF of retail space for a restaurant, bar and small shops. These spaces will be leased to tenants with $28/SF. As aresult, we expect an unleveraged IRR of 11.1% and a leveraged IRR of 17.2%.

(3) Retail: Retail is comprised of four parts, restaurants, gym, movie theater and general retail shops which includes a small grocery store. For restaurants, we assumed four spaces averaging 2,340 sf. Based on market analysis, these restaurants would lease for $34/SF. The gym is 13,500 sf and leases for $28/SF. The movie theater is 6,000 sf and leases for $25/SF. We assumed that both the gym and cinema spaces rent under a ten year lease term. The other retail uses, restaurant and general retail lease with five years contracts. We assume all tenants will accept NNN lease contracts and receive 3 months free rent.

Regarding retail parking, our development plan has 208 parking spaces for retail use.

188 spaces are hourly parking for retail customers. We assume a $6.00 hourly parking charge and the stabilized utilization rate is 30%. We distribute the other 20 spaces for monthly parking.

Based on above assumptions, the unleveraged and leveraged IRR of the retail portion are 11.1% and 17.2% respectively.

2. Waterfront As previously explained in other sections of this report, the waterfront developments provide social, spatial, and cultural amenities to South Lake Union with acceptable return.

Overall, the combined yield for the waterfront project is 6.4% unleveraged IRR and a leveraged IRR of 8.7%.

General Assumption (1) Initial site value is given at $17.5 million. Aqua View recommends to continue to use existing retail & office building with Joey’s restaurant on Chandler’s Cove (“Building 1”) and marinas in both Chandler’s cove and H.C. Henry Pier as existing (“Marina”).

The value of Building 1 and the Marina is evaluated based on direct capitalization. Remaining land value per SF is $23.38.

(Insert table for prorated site value) (2) Total project cost will be $53 million and financed by $17.5 million of initial contribution as equity, loan of $32.9 million and cash flow from Building 1, Marina and

Financial Analysis Event Space; Discovery center will be relocated in 2014.

(3) Vulcan will not be required cash contribution because the waterfront site can be financed even in permitting phase by collateral with Building 1 and Marina. Conservatively, all cash flow from Building 1 and Marina during construction will not be distributed to Vulcan, used for development.

(Insert table for financing summary 2013-2016) (4) Retail complex building in Chandler’s cove consists of north side building (“Building 2”), south side (“Building 3”) and semi-ground parking below retail complex (“Parking”).

(5) In consideration for the particularity of waterfront site permits, especially for the thermal pools, $1.5 million of fees are accounted for permits and consulting.

Assumption of Uses (1) Building 1: The current home of Joey’s restaurant has an occupancy rate of more than 95%, therefore we will leave Building 1 as is. Cash flow from Building 1 will support waterfront development and attractive return with unleveraged IRR of 8.1% helps return a yield for the waterfront project.

(2) Building 2: consists of thermal pools and a restaurant. The thermal pool space will be leased to an operating company as NNN lease ($23.5/SF). Restaurant space will enjoy spectacular views and generate higher rent than general retail ($31/SF).

(3) Parking: 114 parking spaces are used as existing but covered by surface for walking access to Building 2. 13 parking spaces will be added on the same level of current parking.

(4) Building 3: Located south of Building 2 and connected to Building 2 by the board walk. The second floor restaurant space will also enjoy a great water view and can generate higher rent ($30) Tenants of 1st floor will be casual dining and marina related retail that attract boat owners and casual visitors. Rent of these space should be lower than the 2nd floor restaurant (Casual Dining: $26/SF, Retail: $25/SF) (5) H.C. Henry Pier: Discovery Center in South Lake Union will be relocated to H.C. Henry Pier and split into an event space and marketing office. A Café/bar will also be provided at H.C. Henry Pier. The Discovery Center will be relocated from its current site in year 2 (2014) and start to operate in year 3. We assume the event space will be utilized 60% of rentable days after stabilization, assuming use for corporate events and meetings 2 to 3 times during the week, with approximately 80% occupancy on weekends.

(6) Marina: Existing to remain. Vacancy rate is currently lower than 5%, however, in consideration of the 10%+ vacancy rate during the last recession, 7% vacancy is used for the proforma. Cash flow from the Marina will also support waterfront development with an attractive return, earning an unleveraged IRR of 15.2%.

(7) Open Space: Our waterfront plan includes an investment of $3.6 million on open space such as boardwalks, decks, and landscaping (excluding land cost) in order to attract visitors and serve as an amenity for adjacent Vulcan properties.

3.

Exit Strategy (1) Block 25 For condominiums, we assume all units will be sold by 2019. We recommend Vulcan sell the hotel and retail portion to a REIT or other institutional investors in 2023, because these investors can offer more competitive and attractive prices than other local investors and developers.

(2) Waterfront We recommend that Vulcan holds onto the waterfront space, since the site will profit the whole of Southlake Union and can generate some return by refinancing proceeds.

If Vulcan planned to sell the project as part of an exit strategy, we recommend Vulcan packages the sites with the Marina space since retail space will be difficult to sell with its relatively lower return.

BLOCK 25: SOURCES & USES 2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Sources Equity Land Cash

$25,000,000 $22,984,209

$0 $23,889,005

$0 $789,889

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

Debt NOI Sales TOTAL

$0 $0 $0 $47,984,209

$0 $0 $0 $23,889,005

$75,377,647 $0 $0 $76,167,535

$76,590,752 $0 $0 $76,590,752

$0 $0 $3,254,292 $0 $523,346 $118,380,518 $122,158,156

$0 $6,060,634 $57,304,265 $63,364,899

$0 $8,320,904 $20,524,779 $28,845,683

$0 $8,613,321 $0 $8,613,321

$0 $8,916,221 $0 $8,916,221

$0 $8,636,118 $0 $8,636,118

$0 $9,555,020 $139,412,274 $148,967,294

Uses Development Cost Debt Service Principal Repayment Return on Equity TOTAL

$47,984,209 $0 $0 $0 $47,984,209

$23,889,005 $0 $0 $0 $23,889,005

$75,397,713 $769,822 $0 $0 $76,167,535

$75,057,175 $1,533,577 $0 $0 $76,590,752

$0 $8,850,182 $108,151,924 $5,163,727 $122,165,833

$0 $2,361,067 $0 $61,003,832 $63,364,899

$0 $2,361,067 $0 $26,484,616 $28,845,683

$0 $2,361,067 $0 $6,252,254 $8,613,321

$0 $2,361,067 $0 $6,555,154 $8,916,221

$0 $2,361,067 $0 $6,275,051 $8,636,118

$0 $2,361,067 $39,536,553 $107,069,675 $148,967,294

WATERFRONT: SOURCES & USES

Source

Use

Equity Debt NOI Sales Proceeds TOTAL Development Cost Debt Service Principal Repay Return on Equity TOTAL

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

$18,275,000 $0 $0

$0 $2,918,101 $915,181

$0 $14,945,166 $996,256

$0 $15,017,582 $1,091,953

$0 $0 $2,705,798

$0 $0 $3,425,569

$0 $0 $3,667,042

$0 $0 $3,777,054

$0 $0 $3,855,206

$0 $0 $3,790,171

$18,275,000

$3,833,282

$15,941,421

$16,109,535

$2,705,798

$3,425,569

$3,667,042

$3,777,054

$3,855,206

$3,790,171

$0 $0 $4,075,146 $52,151,562 $56,226,708

$18,275,000 $0

$2,956,148 $102,134

$15,316,207 $625,214

$14,958,705 $1,150,830

$0 $1,771,796

$0 $1,771,796

$0 $1,771,796

$0 $1,771,796

$0 $1,771,796

$0 $1,771,796

$0 $18,275,000

$775,000 $3,833,282

$0 $15,941,421

$0 $16,109,535

$934,001 $2,705,798

$1,653,773 $3,425,569

$1,895,246 $3,667,042

$2,005,257 $3,777,054

$2,083,410 $3,855,206

$2,018,374 $3,790,171

$0 $1,771,796 $27,963,398 $26,491,513 $56,226,708

Conclusion The Mercer Blocks and The Lake Union Waterfront have a once in a lifetime opportunity to develop a truly iconic piece of Seattle—the shore of an urban Lake next to the city’s fastest growing district. These are high profile sites, with an ability to shape how South Lake Union is perceived both locally and globally. A successful development here can give South Lake Union the identity it has lacked until now; partly through iconic, landmark architecture, and partly through its ability to create holistic, memorable experiences at the ground plane and along the lakeshore.

Block 25 and the Waterfront are to be developed simultaneously with a 2017 target delivery date, leaving room for two years of entitlement and design, and an additional two years for construction. The market forecast is favorable for both hotel and condominium uses, and South Lake Union is expected to continue its impressive growth for the foreseeable future. On Block 25, we propose an iconic high-end condominium tower, surrounded by an architecturally significant 4-star hotel with upscale amenities and retail. Complementing Block 25 will be the new and improved Lake Union Waterfront, where we will increase open public leisure space while bringing thousands of new tourists and customers into the area with an extensive Thermal Pool destination situated amongst Restaurants, Retail, and Event Space, all connected by the new Aloha Path for pedestrians and cyclists.

The proposed improvements to the Lake Union Waterfront will generate external value for the Mercer Blocks and beyond, much of which will be captured by the investments on Block 25. In turn, Block 25’s financial returns will enable otherwise ambitious investment on the Waterfront sites. The new Waterfront development--combined with Lake Union Park, MOHAI, and the Center for Wooden Boats--will establish the district as a true multi-use destination for regional, domestic and global visitors.

Activation of South Lake Union’s tourism potential will help the neighborhood grow into a true 24/7 urban community, capable of attracting world-class talent to a rapidly expanding hub for life science and technology industries.

In conclusion, this development proposal for both Block 25 and Chandler’s Cove will be profitable and supported by the sites’ natural advantages, local economic growth, employment prospects, demographic trends, zoning changes, synergy of uses, and design and community characteristics. The Aqua View Proposal links the South Lake Union neighborhood with its namesake, achieving Vulcan’s investment goals while offering Seattle a destination to be proud of.

Intentionally left blank

Occupancy Rate Forecast

Appendix: Hotel

80.0

Forecast

75.0 70.0 65.0 60.0 55.0 50.0

Supplemental Market Data for Block 25 Hotel

2010

2011 Seattle

2012 Seattle Downtown (All subtypes)

2013

South Lake Union (Up Scale/Mid Price)

Source: Visitor Impact to Seattle/King County -

80% of overnight visitors to Seattle/King County are tourists.

15% is for business purpose Half of those visitors arrived by Air

Total Overnight Visitors 9.9 Million, Seattle-King Co. Source: Dean Runyan Associates for Seattle’s Convention and Visitors Bureau

Hotel Market Analysis

1. Seattle Hotel Market Overview

2014

2015

Seattle Hotel Market Overview 45,000

74.00

40,000

72.00 70.00

35,000

66.00 25,000

Rooms

250 200

68.00

30,000

15,000

150

64.00

100

62.00

50

60.00

0

20,000

2010

2011

2012(est)

58.00

DownTown Seattle (Luxury)

174

183

197

5,000

56.00

132

133

141

0

54.00

Seattle South Lake Union (Upscale/Mid Price)

10,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Supply

36,275

36,397

36,560

36,261

36,814

37,421

38,176

39,232

40,129

40,564

Demand

22,213

22,769

23,711

24,930

26,193

26,825

25,996

24,127

26,415

28,063

Occ. Rate (%)

61.20

62.60

64.90

68.80

71.20

71.70

68.10

61.50

65.80

69.20

Rev PAR

Seattle Hotel ADR, Rev PAR 160.00

20.00

140.00

15.00 10.00

120.00

5.00

100.00

$/Rm

ADR

0.00

80.00

-­‐5.00

60.00

20.00 0.00

2010

2011

2012(est)

-­‐15.00

DownTown Seattle (Luxury)

130

140

152

-­‐20.00

Seattle South Lake Union (Upscale/Mid Price)

96

99

107

-­‐10.00

40.00

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

ADR

96.59

95.49

98.14 104.26 116.76 125.87 130.23 115.98 113.23 117.62 124.14 128.68 131.73 135.59 138.52 140.97

RevPAR

59.15

59.74

63.65

71.68

83.08

90.23

88.68

71.32

74.53

81.38

87.97

89.24

92.06

93.93

95.25

96.73

RevPAR -­‐6.70 (% Chg YOY)

1.00

6.50

12.60

15.90

8.60

-­‐1.70

-­‐19.60

4.50

9.20

8.10

1.40

3.20

2.00

1.40

1.60

-­‐25.00

3. Downtown SLU Hotel Demand Analysis 3.1 Historical Demand

Visitor to Seattle King County

2. Downtown SLU Market Overview

10,000,000 9,800,000 9,600,000 9,400,000 9,200,000 9,000,000 8,800,000 8,600,000 8,400,000 8,200,000

Hotel Room Occupancy Rate 78.0% 77.0% 76.0% 75.0% 74.0% 73.0% 72.0% 71.0% 70.0%

2017

160 140 120 100 80 60 40 20 0

2010

2011

2012(est)

DownTown Seattle (Luxury)

74.8%

76.7%

77.0%

Seattle South Lake Union (Upscale/Mid Price)

72.7%

74.4%

76.0%

Total Overnight Visitors Visitor Lodging Expenditure(Million)

1200 1000

800 600 400 200 2009

2010

2011

8,800,000

9,300,000

9,900,000

533

1,100

1,000

0

New Hotel Supply in Downtown Seattle since 2005 Hotel Name Sheraton Seattle Hotel&Towers Olive 8 Marriott Courtyard-Downtown Seattle Stadium Silver Cloud Hotel Max The 2200 Hyatt Place Seattle/6th&Denny Apartments Four Seasons Hotel and Private Residences Hotel 1000/ Madison Tower Arctic Club Hotel (renovation) Alexis Hotel (renovation and addition)

Purpose of Overnight Trip (2010) Other 5%

Convention/C onference 5%

Visiting Friends/Relati ves 37%

Business 10%

Pleasure/Vaca tion 43%

Transportation

Rooms 415 349 250 237 165 160 158 149 120 120 12

Others 3%

Supplied Hotel Room in Downtown Seattle 700

Arrived by Air 51%

600 500 Rooms

Arrived by Auto 46%

400 300

200 100

Seatac Air Passanger Levels 40,000,000

10%

35,000,000

8%

30,000,000

6%

25,000,000

4%

20,000,000

2%

15,000,000

0%

10,000,000

-­‐2%

5,000,000

-­‐4%

0

0

Supplied Room

2006

2007

2008

2009

2010

2011

2012

280

652

269

429

408

0

0

4.2 Supply Forecast

-­‐6%

2000

2001

2002

2003

2004

2005

2006

2007

Changing Percentage

3.2 Demand Forecast 4. Downtown SLU Hotel Supply Analysis 4.1 Historical Supply

2008 Total

2009

2010

2011

2012

2013

2014

Future Hotel Development Project in Downtown Seattle as at 2012 Name Status Red Union Hotel Renovation Under Construction Stadium Place Phase 2 Permitted and Scheduled 2000 Third Ave Apartments On Hold Best Western Exective Inn (expansion) Proposed, Unpermitted 1903 5th Ave Hotel Proposed, Unpermitted Hill7 Proposed, Unpermitted Stanford Hotel Proposed, Unpermitted Hyatt House Proposed, Unpermitted 2nd and Pine Proposed, Unpermitted 417 Broad St Proposed, Unpermitted GreyHound Station Site Proposed, Unpermitted 1900 1st Ave Proposed, Unpermitted 1200 Stewart Proposed, Unpermitted 2nd and Virginia Proposed, Unpermitted Second & Stewart Proposed, Unpermitted

Address 1415 5th Ave 201 S King St 2000 3rd Ave 200 Taylor Ave N 1903 5th Ave Stewart and Boren 300 Terry Ave N 416 John St 1608 2nd Ave 417 Broad St 811 Stewart St 1900 1st Ave 1200 Stewart St 1931 2nd Ave 1613 2nd Ave

Completion 2014 2015 TBD TBD TBD TBD TBD 2015 2016 TBD TBD TBD TBD TBD TBD

Category Hotel Hotel/Residential Hotel/Residential Hotel Hotel Hotel Hotel Hotel/Residential Hotel/Residential Hotel/Residential Hotel/Residential Hotel/Residential Hotel/Residential Hotel/Residential Hotel/Residential

Appendix: Waterfront

NAIOP Real Estate Challenge Financial Underwriting Summary NAIOP Real Estate Challenge Waterfront Financial Underwriting Summary

Waterfront Total

Waterfront

NAIOP Real Estate Challenge Financial Underwriting Summary

Building 1

Building 2 w/ Parking

Building 3

WATERFRONT KEY ASSUMPTIONS

Discovery C

Total ASSUMPTIONS Building 1 Building 2 w/ Parking Building 3 Discovery Center Marina DESIGN GROSS SF 154,478 19,625 84,490 24,118 26,244 Total Building 1 Building 2 w/ Parking Building 3 Discovery Center Marina DESIGN ASSUMPTIONS Waterfront Efficiency Factor 90% 90% 90% 90% 90% GROSS SF RENTABLE SF 143,509 17,663 80,520 21,706 23,620 154,478 19,625 84,490 24,118 26,244 NA DESIGN ASSUMPTIONS Restaurant: 8,438 NSF Spa: 26,010 Restaurant: NA 9,063 NSF Event Space: 6, Efficiency 90% 90% 90% 90% 90% NSF GROSSFactor SF 154,478 19,625 84,490 26,244 NAMarina Total Building 1 Building 2 w/ Parking Marine24,118 Building 3 Discovery Center Retail & office: Restaurant: 9,720 NSF Casual Dining: Sales Office: 3,0 RENTABLE SF 143,509 17,663 80,520 21,706 23,620 NA8,937NSF Efficiency Factor 90% 90% 90% 90% 90% NA 11,188 NSF 9,063 NSF Parking: 44,790 NSF Marine Retail: 3,670 NSF Restaurant: 8,438 NSF Spa: 26,010 NSF Restaurant: Event Space: 6,900NSF 81 Deck (4,806 Lineal Foot) Café and Bar: 4,2 RENTABLE SF 143,509 17,663 80,520 21,706 23,620 NA Parking: 10,50 Marine Retail & office: Restaurant: 9,720 NSF Casual Dining: 8,937NSF Sales Office: 3,000NSF DESIGN ASSUMPTIONS Foot) Restaurant: 8,438 NSF Spa: 26,010 NSFNSF Restaurant: 9,063 NSFNSF Event 6,900NSF 11,188 NSF Parking: 44,790 Marine Retail: 3,670 CaféSpace: and Bar: 4,270 NSF 81 Deck (4,806 Lineal GROSS SF 154,478 24,118 26,244 NA Marine Retail &19,625 office: Restaurant: 84,490 9,720 NSF Casual Dining: 8,937NSF Sales Office: 3,000NSF Parking: 10,500 SF Average Unit SFParking: 44,790 NA NSF NA NSF space NA NA 350SF/ surface Efficiency Factor 90% 90% 90% 90% 90% NSF 11,188 NSF Marine Retail: 3,670 Café 350SF/ and Bar:parking 4,270 PARKING 2.29/1,000 N 127 1.69/1,000 NSF RENTABLE SF 143,509 17,663 STALLS 80,520 21,706 23,620 NA Parking: 10,500 SF Average Unit SF NA 350SF/ NA 9,063 NSF 350SF/ surface 6,900NSF parking NA Lineal Foot) Restaurant:NA 8,438 NSF Spa:parking 26,010space NSF Restaurant: Event Space: 81 Deck (4,806 PARKING STALLS 2.29/1,000 NA Marine Retail & office: Restaurant: Casual Dining: 8,937NSF Sales Office: NSF 3,000NSF 127 ASSUMPTIONS 1.69/1,000 9,720 NSF NSF COST Average Unit SF NA NA 350SF/ parking spaceNSF parking NA 11,188 NSF Parking: 44,790 Marine NA Retail: 3,670 NSF 350SF/ Cafésurface and Bar: 4,270 NSF $52/NSF Building is used as existing $27/NSF $69/NSF $63/NSF LAND VALUE PER DEVELOPMENT UNIT PARKING STALLS 2.29/1,000 NSF NA 127 1.69/1,000 NSF Parking: 10,500 SF SITE - INFRASTRUCTURE ( $ / SF OF SITE ) $30.0 NA $30 $30 $30 COST ASSUMPTIONS BUILDING SHELL ( $as / Gross SF ) NA Building$69/NSF is used as existing Spa: $250/SF Restaurant:NA $185/SF Discovery Cente $52/NSF Building is used existing $27/NSF $63/NSF LAND VALUE PER DEVELOPMENT UNIT COST ASSUMPTIONS Restaurant: Casual Dining: $160/SF for Movin SITE - INFRASTRUCTURE ( $ /Average SF OF SITE ) $30.0 NA $30 $30 $185/SF NA Unit SF NA NA 350SF/$30 parking space NA 350SF/ surface parking NA $52/NSF Building is used as as existing $27/NSF $69/NSF$185/SF $63/NSF LAND VALUE PER DEVELOPMENT UNIT Marina $130/SF Café & Bar: $1 BUILDING SHELLPARKING ( $ / Gross SF ) NA Building is used existing Spa: $250/SF Restaurant: Discovery Center:NSF $110K Marina Retail: isNA used as existing STALLS 2.29/1,000 NA 127 1.69/1,000 NSF SITE - INFRASTRUCTURE ( $ / SF OF SITE ) $30.0 NA $30 $185/SF $30 NA Restaurant: Casual $30 Dining: $160/SF for Moving TENANT IMPROVEMENT ($ / Net SF ) Spa: $250/SF NA Building is used as existing Spa: $100/SF Restaurant: $100/SF Café & Bar: $9 BUILDING SHELL ( $ / Gross SF ) NA Building is used as existing Restaurant: $185/SF $110K Marina is used as existing Marina Retail: $130/SF Discovery Café &Center: Bar: $160/SF COST ASSUMPTIONS Restaurant: Casual Dining: $100/SF Restaurant: $185/SF Casual Dining: $160/SF for Moving$100/SF $52/NSF Building used existing $69/NSF NA LAND VALUE PER DEVELOPMENT UNIT Marina is Retail: $80/SF TENANT IMPROVEMENT ($ / Net SF ) NA Building is is used asas existing Spa:$27/NSF $100/SF Restaurant: $100/SF Café & $63/NSF Bar: $90/SF Marina used as existing Marina Retail: $130/SF Café & Bar: $160/SF SITE - INFRASTRUCTURE ( $ / SF OF SITE ) $30.0 NA $30 $30$100/SF $30 NA Restaurant: $100/SF Casual Dining: TENANTBUILDING IMPROVEMENT ($ / Net SF ) NA Building is used as existing Spa: $100/SF Restaurant: $100/SF Café & Bar: $90/SF Marina is used as SHELL ( $ / Gross SF ) NA Building is used as existing Spa: $250/SF Restaurant: Discovery Center: $110K Marina is usedexisting as existing Marina Retail: $185/SF $80/SF $100/SF Dining: $100/SF PARKING ABOVE GRADE ($ / STALL)Restaurant: Surface Parking: $ Restaurant: $185/SF Casual Casual Dining: $160/SF for Moving Surface Cost: Marina Retail: $80/SF stall Marina Retail: $130/SF Café & Bar: $160/SF $10,000/stall (Parking is PARKING ABOVE GRADE ($ / STALL) Surface Parking: $15,000/ PARKING BELOW GRADE ($ / STALL) used and TENANT IMPROVEMENT ($ / Net SF ) NA Building is used as existing Spa: $100/SF Restaurant: $100/SF Caféas & existing Bar: $90/SF Marina is used as existing Surface Cost: stall surface) Restaurant: $100/SF Casual Dining: $100/SFSurfacecovered PARKING ABOVE GRADE ($ / STALL) $10,000/stall (Parking is Parking:by$15,000/ NA PARKING BELOW GRADE ($ / STALL) Surface Cost: and Marina Retail: $80/SFstall used as existing (Parking is NA Included Building Shell Included Building Shell Included Building Shell Included Parking SOFT COST ( % of hard costs$10,000/stall ) covered by surface) NA PARKING BELOW GRADE ($ / STALL) BASE YR. OPERATING EXPENSES ( $ / Grossused SF / as YRexisting ) NA and $1.15/SF Spa: $2.00/SF $1.15/SF Event & Sales: $ covered surface)Shell Resutaurant: $1.15/SF Café & Bar: $1 PARKING ABOVE ($ / costs STALL) NA Included Building Shell IncludedbyBuilding Included Building Shell Included Parking Bld Cost NA SOFT COSTGRADE ( % of hard ) Surface Parking: $15,000/ Surface Cost: BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) NA $1.15/SF Spa: $2.00/SF $1.15/SF Event 20% Gross Revenue stall & Sales: $6.00/SF $10,000/stall (Parking is Included Building Shell SOFT COST ( % of hard costs ) NA Included Building Shell Included Building Shell Included Bld Cost NA Resutaurant: $1.15/SF CaféParking & Bar: $1.15/SF NA PARKING BELOW GRADE ($ / STALL) used$2.00/SF as existing and BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) NA $1.15/SF Spa: $1.15/SF Event & Sales: $6.00/SF 20% Gross Revenue covered by surface) Resutaurant: $1.15/SF Café & Bar: $1.15/SF INCOME ASSUMPTIONS $30/NSF Spa: Parking $23.5/NSF Restaurant: $30/ NA Included Building Shell Included Building Shell Included Bld Cost NA NSF Marina$1.15/SF Retail & Office: Restaurant: $31/NSF Dining: $26/ NSF $1.15/SF Spa: $2.00/SF Event & Sales: $6.00/SF Casual 20% Gross Revenue $25/NSF Marina Retail:Foot/month $25/NSF $30/NSF Spa: $23.5/NSF Restaurant: $30/ NSF Event: $15/Lineal Resutaurant: $1.15/SF Café$550/day/space & Bar: $1.15/SF Marina Retail & Office: Restaurant: $31/NSF Casual Dining: $26/ NSF Café & Bar: $26/NSF $30/NSF Restaurant: $30/ NSF Event: $550/day/space $15/LinealNA Foot/month PARKING INCOME ( $ / SF / MO ) Spa: $23.5/NSF NA NA$25/NSF $140/stall/ mo $25/NSF Marina Retail: Marina Retail & Office: Restaurant: $31/NSF Casual Dining: $26/ NSF Café & Bar: $26/NSF $4.00/hour $25/NSF Marina Retail: $25/NSF NA NA $140/stall/ mo NA $4.00/hour NA $4.00/hour VALUE ASSUMPTION $30/NSF Spa: $23.5/NSF Restaurant: $30/ NSF Event: $550/day/space $15/Lineal NA NA NA $140/stall/ mo NA $4.00/hour NA Foot/month Discount Rate NA 8.00% 8.00% 8.00% Marina Retail & Office: Restaurant: Casual Dining: $26/ NSF Café & Bar: $26/NSF $4.00/hour $31/NSF Exit Capitalization Rate NA 7.00% 7.00% 7.00% $25/NSF Marina Retail: $25/NSF NET PRESENT 8.00% VALUE ( $ / NSF ) ($40.46) $1.77 ($71.51) ($71.62) NA 8.00% 8.00% 8.00% 8.00% VALUE TOTAL $ ($5,806,561) $31,346 ($5,757,870) ($1,554,684) NA 7.00% 7.00% mo 7.00% 7.00% 12.00% NA NA $140/stall/ NA $4.00/hour NA NA 8.00% 8.00% 8.00% 8.00% 8.00% Unleveraged$1.77 IRR Before Taxes 6.4% 8.1% 4.3% 4.9% ($40.46) ($71.51) ($71.62) ($17.48) $4.00/hour NA 7.00% 7.00% 7.00% 7.00% 12.00% Leveraged IRR Before Taxes 8.7% NA NA NA ($5,806,561) $31,346 ($5,757,870) ($1,554,684) ($412,933) $1,887,580 ($40.46) $1.77 ($71.51) ($71.62) ($17.48) 6.4% 8.1% 4.3% 4.9% 7.0% 15.2% ($5,806,561) $31,346 ($5,757,870) ($1,554,684) ($412,933) $1,887,580 8.7% NA NA NA NA NA DEBT ASSUMPTIONS NA 8.00% 8.00% 8.00% 8.00% 8.00% 6.4% 8.1% 4.3% 4.9% 7.0% 15.2% LOAN TO VALUE 65% NA NA NA NA 7.00% 7.00% 7.00% 7.00% 12.00% 8.7% NA NA NA NA NA 1.90 NA NA NA ($40.46)Average DEBT SERVICE $1.77COVERAGE ($71.51) ($71.62) ($17.48) $32,880,848 NA NA NA 65% NA TOTAL DEBT NA NA NA NA ($5,806,561) $31,346 ($5,757,870) ($1,554,684) ($412,933) $1,887,580 NET EQUITY During Development $17,500,000 NA NA NA 1.90 NA NA NA NA NA 6.4% 8.1%(Inclu Land) 4.3% 4.9% 7.0% 15.2% 65% NANA NANA NANA NANA NANA $32,880,848 8.7% NA NA NA NA NA 1.90 NA NA NA NA NA $17,500,000 NA NA NA NA NA $32,880,848 NA NA NA NA NA Hard & Soft Cost Notes $17,500,000 NA NA NA NA NA Excludes 65% 9.5% Washington State NA Sales Tax NA NA NA NA Assumes pricing in the construction year 1.90 NA NA NA NA NA LEED Silver certificate $32,880,848 NA NA NA NA NA $17,500,000 NA NA NA NA NA Includes contingencies

NA SOFT COST ( % of hard costs ) INCOME ASSUMPTIONS BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) NA RENTAL INCOME ( $ / Net SF / MO ) NA INCOME ASSUMPTIONS RENTAL INCOME ( $ / Net SF / MO ) NA PARKING INCOME ( $ / SF / MO ) INCOME ASSUMPTIONS RENTAL INCOME INCOME (( $$ // SF Net/ SF PARKING MO/ )MO ) VALUE ASSUMPTION

Discount Rate VALUE ASSUMPTION Capitalization PARKINGExit INCOME ( $ / SF Rate / MO ) Discount NET PRESENT VALUE ( $ /Rate NSF ) Exit Capitalization Rate VALUE TOTAL $ NET PRESENT VALUE $ / NSF ) Unleveraged IRR (Before Taxes VALUE ASSUMPTION TOTAL $ LeveragedVALUE IRR Before Taxes Discount Unleveraged IRR Before TaxesRate Exit Capitalization Leveraged IRR Before TaxesRate DEBT ASSUMPTIONS NET PRESENT VALUE ( $ / NSF ) LOAN TO VALUE VALUE TOTAL $ DEBT ASSUMPTIONS Average DEBT SERVICE Unleveraged IRRCOVERAGE Before Taxes LOAN TOTAL TO VALUE DEBT Leveraged IRR Before Taxes AverageDuring DEBT Development SERVICE COVERAGE NET EQUITY (Inclu Land) TOTAL DEBT DEBT ASSUMPTIONS NET EQUITY During Development (Inclu Land) LOAN TO VALUE Hard & Soft Cost Notes Average DEBT SERVICE COVERAGE Excludes 9.5% Washington State TOTAL Sales Tax DEBT Hard & Soft Cost Notes Assumes pricingDuring in theDevelopment construction(Inclu yearLand) NET EQUITY Excludes 9.5% Washington State Sales Tax LEED Silver certificate Assumes pricing in the construction year Includes contingencies LEED Silver certificate

RENTAL INCOME / Net SF / MO ) Included( $Building Shell

Event: $550/da Café & Bar: $2

$4.00/hou

8.00% 7.00% ($17.48) ($412,933 7.0% NA

NA NA NA NA

WATERFRONT SUMMARY

NAIOP Real Estate Challenge Financial Underwriting Summary

Waterfront

1. Space Summary

Land Program FAR Land UseDESIGN ASSUMPTIONS Candler's Cove Building 1 w/ open space Building 2 w/ open space Building 3 w/ open space ( Total Open Space bldg 1-3) H.C. Henry Pier

Building NSF Building 2 w/ Parking Space Center Total Summary Building 1 Building 3 Discovery Marina Stories Total SF Efficiency Factor NSF Avg. space sf No of Unit Unit Cost Total Cost Building 1 19,625 (sf.)

90% 17,663 (sf.) (sf./store) $350.20 (per NSF) $7,055,191 179,361 GROSS (sf.)

Restaurant 8,438 (sf.)

90% 7,594 (sf.)

7,594 (sf./ store) 1 (store) SF 154,478 19,625 84,490 24,118 26,244 NA 24,672 Marina Retail & Office 11,187 (sf.)

90% 10,068 (sf.)

1,007 (sf./ store, office) 10 (store) Efficiency Factor 90% 90% 90% 90% 90% NA 88,902 Building 2 39,700 (sf.)

90% 35,730 (sf.) $583.65 (per NSF) $20,853,767 RENTABLE SF 143,509 17,663 80,520 21,706 23,620 NA 65,787 Spa 28,900 (sf.)

90% 26,010 (sf.)

26,010 (sf./spa) 1 (spa) Restaurant: 8,438 NSF Spa: 26,010 NSF Restaurant: 9,063 NSF Event Space: 6,900NSF 81 Deck (4,806 Lineal Foot) 98,660 (s.f.)

Restaurant 10,800 (sf.)Retail & office: 90% 9,720 (sf.) 9,720 NSF 9,720 (sf./store) 1 (restaurant) Marine Restaurant: Casual Dining: 8,937NSF Sales Office: 3,000NSF 153,378 (sf.)

Building 3 24,118 (sf.)

90% 21,706 (sf.)44,790- NSF $482.62 (per NSF) $10,475,718 11,188 NSF Parking: Marine Retail: 3,670 NSF Café and Bar: 4,270 NSF Discovery Center (Event Space + Sales Office) 11,000 Marina Retail & Office 4,078 (sf.)

90% 3,670 (sf.)

1,223 (sf./store) 3 (store) 10,500 SF Parking: Café & Bar 4,744 Restaurant 10,070 (sf.)

90% 9,063 (sf.)

9,063 (sf./store) 1 (restaurnt) Surface Parking 10,500 (sf.)

Casual Dining 9,970 (sf.)

90% 8,973 (sf.)

2,991 (sf./store) 3 (restaurant) Average Unit SF NA NA 350SF/ parking space NA 350SF/ surface parking$14,146 (per stall) NA Parking (Chandler's cove) Open Space 127,134 (sf.)

44,790 (sf.)

100% 44,790 (sf.)

350 (sf./stall) 127 (stall) $1,796,525 PARKING STALLS 2.29/1,000 NSF $318.74 (per NSF) NA 1.69/1,000 NSF Total 332,739 (sf.)

H.C. Henry Pier 127 26,244 (sf.)

90% 23,620 (sf.) $7,528,714 (Marina) of ground lease 45,279 (sf.)

Event Space 7,667 (sf.)

90% 6,900 (sf.)

3,450 (sf/ space) 2 (space) ASSUMPTIONS Sales Office Building COST Foot Print 3,333 (sf.)

90% 3,000 (sf.)

3,000 (sf/ space) 1 (space) Building $69/NSF $63/NSF NA LAND VALUE PER DEVELOPMENT Building 1 11,101 (sf.) UNIT Café & Bar $52/NSF 4,744 (sf.) is used as existing 90% 4,270 $27/NSF (sf.)

2,135 (sf/ store) 2 (restaurant) - INFRASTRUCTURE (40,000 $ / SF OF ) $30.010,500 (sf.)

NA NA Building 2 SITE + Parking (sf.) SITE Surface Parking 100% 10,500 (sf.)$30 350 (sf./ stall)$30 30 (stall)$30 BUILDING SHELL29,600 ( $ / Gross ) NA Building is used as existingSpa: $250/SF Discovery is used as $3,796,144 existing Building 3 (sf.) SFMarina 61Restaurant: (Lenial Foot/$185/SF deck) 72 (deck)Center: $110K $52,724.23Marina (per deck) Restaurant: Casual Dining: $160/SF for Moving Discovery Center 26,244 (sf.)

Total 154,478 (sf.) Total 143,509 (sf.) $185/SF $51,506,060 Marina Retail: $130/SF Café & Bar: $160/SF

TENANT IMPROVEMENT ($ / Net SF ) NA Building is used as existing Spa: $100/SF Restaurant: $100/SF Café & Bar: $90/SF Marina is used as existing 2. Summary Proforma Restaurant: $100/SF Year 0 Year 1 Year 2 Year 3 Year 4 Year 5Casual Dining: Year 6$100/SF Year 7 Year 8 Year 9 Year 10 Marina Retail: $80/SF 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Net Operating Income Rent/ Sales $0 $1,309,680 $1,774,921 $1,828,169 $5,226,303 $5,517,758 $5,821,996 $5,996,656 $6,176,556 $6,361,853 $6,552,708 PARKING ABOVE GRADE ($ / STALL) Surface Parking: $15,000/ Surface Cost: stall Building 1 $0 $493,920 $508,737 $523,999 $539,719 $555,911 $572,588 $589,766 $607,459 $625,682 $644,453 $10,000/stall (Parking is Building 2 $0 $0 $0 $0 $1,027,089 $1,057,901 $1,089,638 $1,122,328 $1,155,997 $1,190,677 NA$1,226,398 PARKING BELOW GRADE ($ / STALL) used as existing and Building 3 $0 $0 $0 $0 covered$671,859 $712,775 $734,158 $756,183 $778,869 $802,235 by surface) $692,015 H.C. Henry Pier $0 $0 $425,951 $438,730 $1,759,981 $1,812,780 $1,867,163 $1,923,178 $1,980,874 $2,040,300 $2,101,509 NA Shell Building Shell$481,006 Included Building Included Parking Bld Cost Parking (Chandler's cove) SOFT COST ( % of hard costs ) $0 $0 Included Building $0 $0Included$336,252 $634,142Shell $653,166 $672,761 $692,944 NA $713,732 $1.15/SF Spa:$891,403 $2.00/SF $1.15/SF Event & Sales: $6.00/SF 20% Gross$1,064,382 Revenue Marina BASE YR. OPERATING EXPENSES ( $ / Gross SF$0/ YR ) NA $815,760 $840,233 $865,440 $918,145 $945,689 $974,060 $1,003,282 $1,033,380 $1.15/SF Café & Bar: $1.15/SF Vacancy & Credit Loss $0 ($81,799) ($403,717) ($350,019)Resutaurant: ($1,670,895) ($1,217,090) ($1,253,603) ($1,291,211) ($1,365,106) ($1,586,751) ($1,463,084) (%) $0 32.0% 22.1% 21.5% 21.5% 22.1% 24.9% 22.3% Building 1 $0 ($24,696) ($25,437) ($26,200) ($26,986) ($27,796) ($28,629) ($29,488) ($30,373) ($31,284) ($32,223) Building 2 $0 $0 $0 $0 ($256,772) $0 $0 $0 $0 ($98,289) ($20,247) INCOME ASSUMPTIONS Building 3 $0 $0 $0 $0 ($128,136) $0 $0 $0 $0 ($118,617) ($24,435) $30/NSF Spa: $23.5/NSF Restaurant: $30/ NSF Event: $550/day/space $15/Lineal Foot/month RENTAL INCOME ( $ / Net SF / MO ) NA H.C. Henry Pier $0 $0 Marina ($319,464) ($263,238)Restaurant: ($1,196,603) ($1,125,024) ($1,158,775) ($1,264,504) ($1,266,225) ($1,311,672) Retail & Office: $31/NSF Casual Dining: $26/ NSF($1,193,538) Café & Bar: $26/NSF Marina $0 ($57,103) ($58,816) ($60,581) ($62,398) ($64,270) ($66,198) ($70,230) ($72,337) ($74,507) $25/NSF Marina Retail: $25/NSF ($68,184) Effective Gross Income $0 $1,227,880 $1,371,205 $1,478,150 $3,555,407 $4,300,668 $4,568,393 $4,705,445 $4,811,449 $4,775,101 $5,089,624 PARKING INCOME ( $ / SF / MO ) $0 NA NA mo NA Operating Cost ($312,700) ($374,949) ($386,197) $140/stall/ ($849,610) ($875,098) ($901,351) ($928,391) $4.00/hour($956,243) ($984,931) NA ($1,014,478) $4.00/hour Building 1 $0 ($23,246) ($23,944) ($24,662) ($25,402) ($26,164) ($26,949) ($27,757) ($28,590) ($29,448) ($30,331) Building 2 $0 $0 $0 $0 ($79,033) ($81,404) ($83,846) ($86,362) ($88,953) ($91,621) ($94,370) ASSUMPTION Building VALUE 3 $0 $0 $0 $0 ($31,216) ($32,153) ($33,118) ($34,111) ($35,134) ($36,188) ($37,274) Discount Rate $0 NA 8.00% 8.00% 8.00% H.C. Henry Pier $0 ($52,868) ($54,454) ($115,245) ($118,702) ($122,263) ($125,931) 8.00% ($129,709) ($133,600)8.00% ($137,608) Exit Capitalization Rate NA 7.00% 7.00% 7.00% 7.00% 12.00% Parking (Chandler's cove) $0 $0 $0 $0 ($218,887) ($225,454) ($232,217) ($239,184) ($246,359) ($253,750) ($261,362) NET PRESENT VALUE ( $ / NSF ) ($40.46) $1.77 ($71.51) ($71.62) ($17.48) Marina $0 ($5,806,561)($289,453) ($298,137) ($307,081) ($316,293) ($325,782) ($1,554,684) ($335,556) ($345,622) ($412,933)($355,991) ($366,671) ($377,671) VALUE TOTAL $ $31,346 ($5,757,870) $1,887,580 Open Space $0 $0 $0 $0 ($63,533) ($65,439) ($67,402) ($69,424) ($71,507) ($73,652) Unleveraged IRR Before Taxes 6.4% 8.1% 4.3% 4.9% 7.0% 15.2%($75,862) Leveraged IRR Before Taxes

NOI DEBT ASSUMPTIONS Sales Proceeds LOAN TO Transaction Cost 3% VALUE Average DEBT SERVICE COVERAGE Net Sales Proceeds TOTAL DEBT NET EQUITY During Development (Inclu Land)

$0

8.7%

$915,181

65% 1.90 $32,880,848 $17,500,000

NA

$996,256

NA NA NA NA

$1,091,953

NA

$2,705,798 NA NA NA NA

$3,425,569

NA

$3,667,042 NA NA NA NA

$3,777,054

NA

NA NA NA NA

$3,855,206

$3,790,171

NA

$4,075,146 $53,764,497 NA ($1,612,935) NA $52,151,562

NA NA

WATERFRONT SUMMARY

NAIOP Real Estate Challenge Financial Underwriting Summary

Waterfront

3. Development Program Total Cost Land Cost DESIGN ASSUMPTIONS Demolishment Cost Development Cost Building 2 Building 3 H.C. Henry Pier Parking (Chandler's cove) Open Space Purchasing Cost Building 1 Marina Total Development Cost

Total

($7,518,318) ($7,518,318) ($1,209,018) $0 GROSS SF 154,478 ($32,797,042) ($775,000) 90% Efficiency Factor ($15,825,620) ($250,000) RENTABLE SF 143,509 ($8,037,686) ($250,000) ($3,476,102) ($250,000) ($1,796,525) ($25,000) ($3,661,110) $0 ($6,185,537) ($6,185,537) NA Average Unit SF ($3,796,144) ($3,796,144) 127 PARKING STALLS ($51,506,060) ($18,275,000)

COST ASSUMPTIONS 4. Source/ Financial LAND VALUE PER DEVELOPMENT UNIT SITE - INFRASTRUCTURE ( $ / SF 3.50% OF SITE ) Debt/ Service / Gross Principal AmortizationBUILDING SHELL ( $ 30 Years SF )

$52/NSF NA

Building 1

Building 2 w/ Parking

($1,209,018) $0 $0 $0 19,625 84,490 ($1,747,130) ($15,316,207) ($14,958,705) $0 90% 90% ($250,000) ($7,373,511) ($7,952,109) 80,520 $0 17,663 ($250,000) ($3,592,648) $0 Restaurant: 8,438 NSF ($3,945,038) Spa: 26,010 NSF ($1,222,130) ($664,981) Marine Retail & office: ($1,338,990) Restaurant: 9,720 $0 NSF ($25,000) ($523,958) ($1,222,568) $0 11,188 NSF Parking: 44,790 NSF $0 ($3,161,110) ($500,000) $0 NA

($2,956,148) ($15,316,207)

350SF/ parking space 1.69/1,000 NSF

($14,958,705)

$0

Building 3

Discovery Center

$0 $0 24,118 $0 90% $0 $0 21,706 $0 $0 $0 Restaurant: 9,063 NSF $0 Dining: 8,937NSF $0 Casual $0 Retail: 3,670$0 Marine NSF $0 $0

$0 26,244 $0 90% $023,620 Event $0 Space: 6,900NSF Sales$0 Office: 3,000NSF $0 Bar: 4,270 NSF Café and $0 10,500 SF Parking:

NA

350SF/ surface parking 2.29/1,000 NSF

$0

$0

Building is used as existing $27/NSF $69/NSF $30.0 NA $30 ($102,134) ($625,214) ($1,150,830) ($1,771,796) ($1,771,796) $30 ($1,771,796) Building is used as existing Spa: $250/SF Restaurant:($676,711) $185/SF ($631,026) ($653,469) Restaurant: $185/SF Casual Dining: $160/SF Marina Retail: $130/SF

$0

Marina

$0 $0 $0 NA $0 $0NA $0 $0 $0NA $0 $0 81 Deck (4,806 $0 Lineal Foot) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0

$63/NSF

$0

NA NA

$0

NA

($1,771,796) $30 ($1,771,796) ($1,771,796)NA ($1,771,796) Discovery Center: $110K is used as existing ($700,780) ($725,704) Marina ($751,515) ($778,244) for Moving ($27,963,398)

Principal Repay at sale Café & Bar: $160/SF Equity (Land + Equity) $18,275,000 $18,275,000 (Cash Contribution) $0 TENANT IMPROVEMENT$775,000 ($ / Net SF ) $775,000 NA Building is used as existing Spa: $100/SF Restaurant: $100/SF Café & Bar: $90/SF Marina is used as existing Net Sales Proceeds to Equity $24,188,163 Restaurant: $100/SF Casual Dining: $100/SF Marina Retail: $80/SF Debt $2,918,101 $14,945,166 $15,017,582 Debt Amount $32,880,848 $2,918,101 $17,863,267 $32,880,848 $32,249,823 $31,596,353 $30,919,642 $30,218,863 $29,493,158 $28,741,643 $27,963,398 Start Period 1 13 25 37 49 61 73 PARKING ABOVE GRADE ($ / STALL) Surface Parking: $15,000/ End Period 24 36 48 60 72 84 Surface Cost:12 stall $10,000/stall (Parking is$45,336,955 Present Value/ Project Cost Yellow: Total Project Cost $53,384,238 $53,384,238 $53,384,238 $48,430,888 $49,883,815 $50,878,055 $49,823,089 $53,764,497 NA PARKING BELOW GRADE ($ / STALL) used as existing and LTC/ LTV 33.5% 61.6% 60.4% 69.7% 63.8% 60.6% 58.0% 57.7% 52.0% covered by surface) DSCR 0.95 1.53 1.93 2.07 2.13 2.18 2.14 2.30 SOFT COST ( % of hard costs )

5. Source & Use BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) Use Development Cost$18,275,000 Debt Service $0 Principal Repay Return on Equity $0 INCOME ASSUMPTIONS Sub Total $18,275,000 RENTAL INCOME Equity ( $ / Net SF / MO$18,275,000 ) Source Debt $0 NOI $0 Sales( $Proceeds PARKING INCOME / SF / MO ) Sub Total $18,275,000

NA NA

NA

NA

Included Building Shell $1.15/SF

$2,956,148 $102,134

$15,316,207 $625,214

$3,833,282

NA

$15,941,421

VALUE ASSUMPTION

1.90 $32,880,848 $17,500,000

$1,150,830

$1,771,796

Included Building Shell $1.15/SF

$0 $1,771,796

$0 $1,771,796

$775,000 $0 $0 $934,001 $1,653,773 $1,895,246 $3,833,282 $15,941,421 $16,109,535 $2,705,798 $3,425,569 $3,667,042 $30/NSF Restaurant: $30/ NSF $0 $0 $0Spa: $23.5/NSF $0 $0 $0 Marina Retail & Office: Restaurant: $31/NSF Casual NSF $2,918,101 $14,945,166 $15,017,582 $0 $0 Dining: $26/$0 $25/NSF Marina Retail: $25/NSF $915,181 $996,256 $1,091,953 $2,705,798 $3,425,569 $3,667,042

6. Return/ Cash Flow Discount Rate NA 8.00% Exit Capitalization Rate 7.00% Net Property Cash Flow ($18,275,000) NA ($2,040,967) ($14,319,951) ) ($40.46) $1.77 $0 Net Equity Cash FlowNET PRESENT VALUE ( $ / NSF($18,275,000) $775,000 ($5,806,561) $31,346 Cash on Cash on Equity per Year (%) VALUE TOTAL $ Unleveraged IRR Before Taxes 6.4% 8.1% Total Return on Project Equity 111.9% NA Cumulative Total Benefit Leveraged IRR Before Taxes ($18,275,000) 8.7% ($17,500,000) ($17,500,000) Net Present Value 8% ($4,251,877) DEBT ASSUMPTIONS Project IRR (Unleveraged) 6.4% LOAN TO VALUE NA Project IRR (Leveraged) 8.7% 65% Average DEBT SERVICE COVERAGE TOTAL DEBT NET EQUITY During Development (Inclu Land)

Included Building Shell Spa: $2.00/SF $14,958,705 $0 Resutaurant: $1.15/SF

NA NA NA

$140/stall/ mo

$16,109,535 $4.00/hour $2,705,798

$3,425,569

NA

$3,667,042

8.00% 8.00% 7.00% $2,705,798 $3,425,569 7.00% $3,667,042 ($71.51) $934,001 $1,653,773 ($71.62) $1,895,246 ($5,757,870) ($1,554,684) 5.3% 9.5% 10.8% 4.3% 4.9% NA NA ($17,500,000) ($16,565,999) ($14,912,226) ($13,016,980)

($13,866,752) $0

NA NA NA NA

NA NA NA NA

Included Parking Bld Cost Event & Sales: $6.00/SF Café$0 & Bar: $1.15/SF $0

NA 20% Gross Revenue

$3,855,206

$0 $1,771,796 $27,963,398 $2,018,374 $26,491,513 $3,790,171 $56,226,708 $15/Lineal $0 Foot/month$0 $0 $0 $3,790,171 $4,075,146 NA$52,151,562 $3,790,171 $56,226,708

$3,777,054 7.00% $3,855,206 $2,005,257($17.48) $2,083,410 ($412,933) 11.5% 11.9%

12.00% $3,790,171 $56,226,708 $2,018,374 $26,491,513 $1,887,580 151.4% 11.5%

$1,771,796

$1,771,796

$2,005,257 $2,083,410 $3,777,054 $3,855,206 Event:$0$550/day/space $0 Café$0 & Bar: $26/NSF $0 $3,777,054 $3,855,206 $4.00/hour

$3,777,054

8.00%

7.0%

($11,011,722) NA NA NA NA NA

$0 $1,771,796

8.00%

15.2%

($8,928,313) ($6,909,938)NA$19,581,575 NA NA NA NA

WATERFRONT: OPEN SPACE

NAIOP Real Estate Challenge Financial Underwriting Summary

Waterfront

Total

OPEN SPACE INFRAESTRUCTURE

Building 1

Building 2 w/ Parking

DESIGN ASSUMPTIONS Development Cost and Operating Cost for Open Space are allocated to each use.

GROSS SF 154,478Year 0 Year 119,625 Year 2 Efficiency Factor RENTABLE SF

Year 84,490 3 Year 4 90% 90% 17,663 80,520 Permiting &Restaurant: Planning 8,438 NSFConstruction Spa: 26,010 NSF Marine Retail & office: Restaurant: NSF 2013 2014 2015 2016 9,720 2017 11,188 NSF Parking: 44,790 NSF

90% 143,509

Input Total Inflation Factor 3% Open Space Development 59% 0% 35% ($5,277,945) ($5,277,945) Land Cost 225,794 sf Average Unit SF NA NA $12.00 ($2,709,523) Landscaping PARKING STALLS($2,709,523)127 $2.00 ($451,587) ($451,587) Public Ammenities ($500,000) Pedestrian Bridge/ Boardwalk COST ASSUMPTIONS ($5,277,945) Building is$0 Subtotal $52/NSF used($3,161,110) as existing LAND VALUE PER DEVELOPMENT UNIT($8,939,055) SITE - INFRASTRUCTURE ( $ / SF OF SITE ) $30.0 NA Operating Cost BUILDING SHELL ( $ / Gross NA Building is used as existing 225,794 s.f. SF ) Operating Cost $0.25 $0.25 $0.26 $0.27 Operating Cost Per sf Cash Flow

TENANT IMPROVEMENT ($ / Net SF )

Total Cash Flow Net Present Value of Costs

NA

($5,277,945) 8%

Building is used as existing

$0 ($3,161,110)

6%

0%

350SF/ parking space 1.69/1,000 NSF

Year24,118 5

Discovery Center

Year 6

90% 21,706 Restaurant: 9,063 NSF Casual2018 Dining: 8,937NSF 2019 Marine Retail: 3,670 NSF

0%

0% NA

Year 8

Year 9NA

Year 10

90% 23,620 Operation Event Space: 6,900NSF Sales2020 Office: 3,000NSF 2021 Café and Bar: 4,270 NSF Parking: 10,500 SF

NA NA 81 Deck (4,806 Lineal Foot)

350SF/ surface parking 2.29/1,000 NSF

NA NA

0%

0%

2022

2023

0%

0%

$0 $0 $0 $0 $0 $0 $0 $69/NSF $63/NSF NA $30 $30 $30 NA Spa: $250/SF($63,533) Restaurant: Center: $110K is used as existing ($65,439)$185/SF ($67,402)Discovery ($69,424) ($71,507) Marina ($73,652) ($75,862) Restaurant: $185/SF Casual Dining: $160/SF for Moving $0.27 $0.28 Marina $0.29 $0.30 $0.31 $0.32 $0.33 $0.34 Retail: $130/SF Café & Bar: $160/SF Spa: $100/SF Restaurant: $100/SF

($500,000)

Restaurant: $100/SF Café & Bar: $90/SF Marina is used as existing Casual Dining: $100/SF ($63,533) Marina ($65,439) ($67,402) ($69,424) ($71,507) ($73,652) ($75,862) Retail: $80/SF Surface Parking: $15,000/ stall

Surface Cost: $10,000/stall (Parking is used as existing and covered by surface)

PARKING BELOW GRADE ($ / STALL)

26,244 Year 7

Marina

($500,000) ($500,000) $27/NSF

($8,027,629)

PARKING ABOVE GRADE ($ / STALL)

Building 3

NA

SOFT COST ( % of hard costs ) BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR )

NA NA

Included Building Shell $1.15/SF

Included Building Shell Spa: $2.00/SF Resutaurant: $1.15/SF

Included Building Shell $1.15/SF

Included Parking Bld Cost Event & Sales: $6.00/SF Café & Bar: $1.15/SF

NA 20% Gross Revenue

INCOME ASSUMPTIONS RENTAL INCOME ( $ / Net SF / MO )

NA

$30/NSF Marina Retail & Office: $25/NSF

Spa: $23.5/NSF Restaurant: $31/NSF

Restaurant: $30/ NSF Casual Dining: $26/ NSF Marina Retail: $25/NSF

Event: $550/day/space Café & Bar: $26/NSF

$15/Lineal Foot/month

PARKING INCOME ( $ / SF / MO )

NA

NA

$140/stall/ mo $4.00/hour

NA

$4.00/hour

NA

NA NA ($40.46) ($5,806,561) 6.4% 8.7%

8.00% 7.00% $1.77 $31,346 8.1% NA

8.00% 7.00% ($71.51) ($5,757,870) 4.3% NA

8.00% 7.00% ($71.62) ($1,554,684) 4.9% NA

8.00% 7.00% ($17.48) ($412,933) 7.0% NA

8.00% 12.00% $1,887,580 15.2% NA

65% 1.90 $32,880,848 $17,500,000

NA NA NA NA

NA NA NA NA

NA NA NA NA

NA NA NA NA

NA NA NA NA

VALUE ASSUMPTION

Discount Rate Exit Capitalization Rate NET PRESENT VALUE ( $ / NSF ) VALUE TOTAL $ Unleveraged IRR Before Taxes Leveraged IRR Before Taxes

DEBT ASSUMPTIONS

LOAN TO VALUE Average DEBT SERVICE COVERAGE TOTAL DEBT NET EQUITY During Development (Inclu Land)

WATERFRONT: BUILDING 1 CF

NAIOP Real Estate Challenge Financial Underwriting Summary

Waterfront

Total

Building 1 DESIGN ASSUMPTIONS

GROSS SF Efficiency Factor RENTABLE SF

Input

Space Program

Unit

Inflation Factor 3% GSF 19,625 s.f.

Average Unit SF Net Rentable AreaPARKING 90% STALLS of GSF Restaurant 90% of GSF Marina Retail & Office 90% of GSF COST ASSUMPTIONS LAND VALUE PER DEVELOPMENT UNIT Net Operating Income SITE - INFRASTRUCTURE Gross Revenue ( $ / SF OF SITE ) BUILDING SHELL ( $ / Gross SF ) Rent (NNN) per s.f. (Restaurant) $30.00 per NSF $25.00 per NSF Rent (NNN) per s.f. (Marina Retail & Office) Vacancy & Credit Loss TENANT IMPROVEMENT ($ / Net SF ) Vacancy & Credit Loss (%) Operations & Maintenance Expenses Expense per s.f. $1.15 per GSF Allocated Operating Cost for Open Space $0.25 per Open Space PARKING ABOVE GRADE ($ / STALL) Net Operating Income

154,478 90% 143,509

Unit Value

Building 1

Building 2 w/ Parking

19,625 84,490 Year 0 Year 1 Year 2 Year 3 90% 90% 17,663 80,520 & Planning Construction Restaurant:Permiting 8,438 NSF Spa: 26,010 NSF Marine Retail & office: 2014 Restaurant: NSF Total 2013 2015 9,720 2016 11,188 NSF Parking: 44,790 NSF

Discount Rate Exit Capitalization Rate NET PRESENT VALUE ( $ / NSF ) VALUE TOTAL $ Unleveraged IRR Before Taxes Leveraged IRR Before Taxes

DEBT ASSUMPTIONS

LOAN TO VALUE Average DEBT SERVICE COVERAGE TOTAL DEBT NET EQUITY During Development (Inclu Land)

24,118 Year 5 90% 21,706 Restaurant: 9,063 NSF Casual 2017Dining: 8,937NSF 2018 Marine Retail: 3,670 NSF

Year 4

19,625 19,625 19,625 19,625 19,625 19,625 NA NA 350SF/ parking space NA @ 127 19,625 s.f.

17,663 s.f.

17,663 17,663 1.69/1,000 17,663 NSF 17,663 17,663 17,663 @ 8,438 s.f.

7,594 s.f.

7,594 7,594 7,594 7,594 7,594 7,594 @ 11,187 s.f. 10,068 s.f.

10,068 10,068 10,068 10,068 10,068 10,068 $52/NSF Building is used as existing $27/NSF $69/NSF $30.0 NA $30 $479,534 $493,920 $508,737 $523,999 $539,719 $30 $555,911 NA Building is used as existing Spa: $250/SF Restaurant: $185/SF @ 8,438 NSF $30.00 $30.90 $31.83 $32.78 $33.77 $34.78 Restaurant: $185/SF Casual Dining: $160/SF @ 11,187 NSF $25.00 $25.75 $26.52 $27.32 Marina $28.14 $28.98 Retail: $130/SF ($23,977) ($24,696) ($25,437) ($26,200) ($26,986) ($27,796) NA Building is used as 5% existing 5% Spa: $100/SF 5% 5% Restaurant: 5% $100/SF 5% Restaurant: $100/SF Casual Dining: $100/SF ($22,569) ($23,246) ($23,944) ($24,662) ($25,402) ($26,164) Marina Retail: $80/SF @ 19,625 s.f. $1.15 $1.18 $1.22 $1.26 $1.29 $1.33 @ 13,571 s.f. $0 $0 $0 $0 ($3,819) ($3,933) $432,988 $445,977 $459,357 $473,137 $483,513 $498,018 Surface Cost: $10,000/stall (Parking is ($6,185,537) ($6,185,537) used as existing and covered by surface) @ 13,571 s.f. ($649,602) ($649,602)

Development Costs PARKING ($ / STALL) Asset Value ofBELOW BuildingGRADE 1 Land Cost of Open Space $47.87 per s.f.

Allocated Development Cost of Open Space per s.f. @ 13,571 ($220,052) $0 Shell $0Included ($189,999) NA s.f.

Included Building Building ($30,053) Shell SOFT COST ( %$16.21 of hard costs ) Development Costs $399.44 per NSF $0 ($189,999) BASE Total YR. OPERATING EXPENSES ( $ / Gross SF / YR@) 17,663 NA s.f. ($7,055,191) ($6,835,139) $1.15/SF Spa: $2.00/SF($30,053) Annual Cash Flow Resutaurant: $1.15/SF Net Operating Income * $445,977 $459,357 $473,137 7.0% (Cap Rate) $6,185,537 $6,371,103 $6,562,237 $6,759,104 Building 1 Asset Value (Exclude Open Space) Transaction Cost 3.0% Development Costs ($6,835,139) ($6,835,139) $0 ($189,999) ($30,053) INCOMETotal ASSUMPTIONS Unleveraged Net INCOME Cash Flow ( $ / Net SF / MO ) ($6,835,139) $445,977 Spa: $269,357 $443,085 $30/NSF $23.5/NSF RENTAL NA Net Present Value 8% $31,346 Marina Retail & Office: Restaurant: $31/NSF Unleveraged IRR Before Taxes 8.1% $25/NSF Net Cash Flow (Chandler's Cove: Building 1-3, Parking & Marina of Chandler's Cove) ($15,990,690) ($1,204,191) ($16,319,822) ($16,693,034) PARKING INCOME (5.5% $ / SF / MO ) NA NA $140/stall/ mo Unleveraged IRR (Chandler's Cove) $4.00/hour * 1: In Year 0, project can not generate cash flow.

VALUE ASSUMPTION

Building 3

Discovery Center

Marina

26,244 NA Year 7 Year 8 Year 9 Year 10 90% NA 23,620 NA Operation Event Space: 6,900NSF 81 Deck (4,806 Lineal Foot) Sales Office: 3,000NSF2021 2019 2020 2022 2023 Café and Bar: 4,270 NSF Parking: 10,500 SF

Year 6

19,625 19,625 19,625 19,625 19,625 350SF/ surface parking NA 17,663 17,663 17,663 17,663 17,663 2.29/1,000 NSF NA 7,594 7,594 7,594 7,594 7,594 10,068 10,068 10,068 10,068 10,068 $63/NSF NA $30 NA $644,453 $572,588 $589,766 $607,459 $625,682 Discovery Center: $110K Marina is used as existing $35.82 $36.90 $38.00 $39.14 $40.32 for Moving $29.85 $32.62 $33.60 Café & Bar:$30.75 $160/SF $31.67 ($28,629) ($29,488) ($30,373) ($31,284) ($32,223) Café Marina is used 5% & Bar: $90/SF 5% 5% 5% as existing 5% ($26,949) ($27,757) ($28,590) ($29,448) ($30,331) $1.37 $1.41 $1.46 $1.50 $1.55 ($4,051) ($4,173) ($4,298) ($4,427) ($4,560) Surface Parking: $15,000/ $512,959 $528,347 $544,198 $560,524 $577,339 stall NA

Included Building Shell $0 $0 $1.15/SF

Included Parking Bld Cost NA $0& Sales: $6.00/SF $0 $0 20% Gross $0 Revenue $0 Event Café & Bar: $1.15/SF $483,513 $498,018 $512,959 $528,347 $544,198 $560,524 $577,339 $6,907,324 $7,114,544 $7,327,980 $7,547,820 $7,774,254 $8,007,482 $8,247,706 ($247,431) $0 $0 $0 $0 $0 $0 $0 $483,513 $30/ $498,018 $512,959 $528,347 $544,198 $15/Lineal $560,524Foot/month $8,577,615 Restaurant: NSF Event: $550/day/space Casual Dining: $26/ NSF Café & Bar: $26/NSF Marina Retail: $25/NSF $2,486,153 $3,223,840 $3,459,261 $3,563,039 $3,669,930 $3,444,505 $54,634,520 NA $4.00/hour NA

NA NA ($40.46) ($5,806,561) 6.4% 8.7%

8.00% 7.00% $1.77 $31,346 8.1% NA

8.00% 7.00% ($71.51) ($5,757,870) 4.3% NA

8.00% 7.00% ($71.62) ($1,554,684) 4.9% NA

8.00% 7.00% ($17.48) ($412,933) 7.0% NA

8.00% 12.00% $1,887,580 15.2% NA

65% 1.90 $32,880,848 $17,500,000

NA NA NA NA

NA NA NA NA

NA NA NA NA

NA NA NA NA

NA NA NA NA

Restaurant $0 $0 $0 $0 ($76,504) $0 $0 $0 $0 ($88,689) ($18,270) Casual Dining ($65,645) $0 $0 $0 $0 ($76,100) ($15,677) Vacancy & Credit Loss (%) Marina Retail & Office 3 Month (Free Rent) 50% 0% 0% 0% 0% 25% 5% Restaurant 3 Month (Free Rent) 25% 0% 0% 0% 0% 25% 5% WATERFRONT: BUILDING 3 CF Casual Dining 3 Month (Free Rent) 25% 0% 0% 0% 0% 25% 5% NAIOP Real Estate Challenge Operations & Maintenance Expenses $0 $0 $0 $0 ($31,216) ($32,153) ($33,118) ($34,111) ($35,134) ($36,188) ($37,274) Financial Underwriting Summary Marina Retail & Office $0 $0 $0 $0 ($5,278) ($5,436) ($5,599) ($5,767) ($5,940) ($6,119) ($6,302) Waterfront Restaurant $0 $0 $0 $0 ($13,034) ($13,425) ($13,828) ($14,243) ($14,670) ($15,110) ($15,563) Casual Dining $0 $0 $0 $0 ($12,905) ($13,292) ($13,690) ($14,101) ($14,524) ($14,960) ($15,409) Expense3per s.f. $1.15 per GSF @ 24,118 s.f. $1.29 $1.33 $1.37 $1.41 $1.46 $1.50 $1.55 Building Building 1$1.15 Building 2 w/$1.22 Parking $1.26 Building Discovery Center Marina Marina Retail & Office $1.15 per GSF @Total 4,078 s.f. $1.18 $1.29 3 $1.33 $1.37 $1.41 $1.46 $1.50 $1.55 Year 0$1.15 Year$1.18 1 Year$1.22 2 Year$1.26 3 Year$1.29 4 Year$1.33 5 Year$1.37 6 Year$1.41 7 Year$1.46 8 Year$1.50 9 Year$1.55 10 Restaurant $1.15 per GSF @ 10,070 s.f.

Casual Dining $1.15 per GSF @ 9,970 s.f. $1.15 $1.18 $1.22 $1.26 $1.29 $1.33 $1.37 $1.41 $1.46 $1.50 $1.55 DESIGN ASSUMPTIONS Permiting$0& Planning $0 Construction $0 Operation Allocated Operating Cost for Open Space $0.25GROSS per Open 36,187 s.f. ($10,182) ($10,488) ($10,802) ($11,460) ($11,804) ($12,158) SF Space @ 154,478 19,625 84,490 $0 24,118 26,244 ($11,126) NA Input Unit Unit Value Total 2013 $0 2014 $0 2015 2016 $0 2017 2018 2019 90% $688,921 2020 2021 2022 2023 Net Operating Income Efficiency $502,324 $649,374 $668,855 $709,589 $612,259 $728,367 Factor 90% 90% 90% $0 90% NA Space Program Development Costs RENTABLE SF 143,509 17,663 80,520 21,706 23,620 NA Inflation 3% Percent Built byFactor year 16.6% 5.8% 39.1% 38.4% 0.0% 6,900NSF 0.0% Restaurant: 8,438 NSF Spa: 26,010 NSF Restaurant:0.0% 9,063 NSF 0.0% Event Space: 81 0.0% Deck (4,8060.0% Lineal Foot)0.0% GSF 24,118 s.f.Existing Building SF @ 12,036 s.f.

0 0 NSF 0 24,1188,937NSF 24,118 Sales24,118 24,118 24,118 24,118 24,118 Demolishment Cost $30.00 ($361,077) ($361,077) per Marine Retail & office: 0 Restaurant: 9,720 Casual Dining: Office: 3,000NSF Marina Retail & Land Office 4,078 s.f.

4,078 4,078 Café and 4,078 4,078 4,078 4,078 $23.38 per s.f. @ 29,600 s.f. ($691,903) ($691,903) 11,188 NSF Parking: 44,790 NSF Marine Retail: 3,670 NSF Bar: 4,2704,078 NSF Restaurant 10,070 s.f.

10,070 10,070 10,070 10,50010,070 10,070 10,070 10,070 Land Cost of Open Space $22.06 per s.f. @ 36,187 s.f. ($798,300) ($798,300) Parking: SF Casual Dining 9,970 s.f.

9,970 9,970 9,970 9,970 9,970 9,970 9,970 Site - Infrastructure $30.00 per s.f. @ 29,600 s.f. ($888,000) ($888,000) NetSoft Rentable 90% @ 24,118 21,706 s.f.

0 0 ($2,392,957) 0 ($1,595,304) 0 21,706 21,706 21,706 21,706 21,706 21,706 21,706 Building Shell (Includes Cost)Area $165.37 of perGSF GSF 24,118s.f. s.f. ($3,988,261) $0 $0 $0 $0 $0 $0 $0 $0 $0 Average Unit SF NA NA 350SF/ parking space NA 350SF/ surface parking NA Marina Retail & Office 90% @ 4,078 s.f.

0 0 0 0 3,670 3,670 3,670 3,670 3,670 3,670 3,670 $130.00 of perGSF GSF 4,078s.f.s.f. 3,670 ($530,111) ($318,067) ($212,044) PARKING STALLS 2.29/1,000 NSF NA 1.69/1,000 NSF Restaurant 90% @ 127 10,070 9,063 s.f.

0 0 ($1,117,770) 0 0 9,063 9,063 9,063 9,063 9,063 9,063 9,063 $185.00 of perGSF GSF 10,070s.f. s.f. ($1,862,950) ($745,180) Casual Dining 90% @ 9,970 8,973 s.f.

0 0 0 0 8,973 8,973 8,973 8,973 8,973 8,973 8,973 $160.00 of perGSF GSF 9,970s.f.s.f. ($1,595,200) ($957,120) ($638,080) COST ASSUMPTIONS Net Operating Income Tenant Improvement $92.48 per NSF @ 21,706 s.f. ($2,007,470) $0 $0 $0 ($2,007,470) $0 $0 $0 $0 $0 $0 $0 $52/NSF Building is used as existing $69/NSF $692,015 $63/NSF NA LAND VALUE DEVELOPMENT UNIT Gross Revenue $0 $0 $27/NSF$0 $0 $671,859 $712,775 $734,158 $756,183 $778,869 $802,235 Marina RetailPER & Office $80.00 per NSF @ 3,670 s.f. ($293,600) ($293,600) SITE - INFRASTRUCTURE ( $ / SF OF SITE ) $30.0 NA $30 $30 $30 NA Marina Retail & Office $0 $0 $0 $0 $103,265 $106,363 $109,554 $112,841 $116,226 $119,713 $123,304 Restaurant $100.00 per NSF @ 9,063 s.f. ($906,300) ($906,300) BUILDING SHELL ( $$90.00 / Gross ) Building is used as existing $110K $344,422 Marina is used as existing Restaurant $0 $0Spa: $250/SF $0 $0Restaurant: $306,015$185/SF $315,195 Discovery $324,651Center: $334,390 $354,755 $365,397 Casual Dining perSF NSF @ NA8,973 s.f. ($807,570) ($807,570) Restaurant: $185/SF Casual Dining: $160/SF for Moving Dining $0 $0 $0 $0 $262,579 $270,456 $278,570 $286,927 $295,535 $304,401 $313,533 Other Fees (Permitting,Casual Consultant) ($500,000) ($250,000) ($250,000) Marina Retail: & Bar: $160/SF Rent (NNN) perWST s.f. $16.75 per NSF 21,706 s.f. $16.75 $17.26 $17.77 $18.31 $30.95$130/SF $31.88 Café $32.84 $33.82 $34.84 $35.88 $36.96 9.5% ($653,954) ($311,691) ($342,264) per Construction Cost @ $6,883,731 Marina Retail & Office $25.00 perSF NSF 3,670 s.f. $25.75 $26.52 $27.32Restaurant: $28.14$100/SF$28.98 $29.85 $30.75 $31.67 $32.62 $33.60 Allocated Development Cost of Open Space $16.21 Open 36,187 s.f. ($586,753) $0 $0Spa: ($506,620) ($80,133) TENANT IMPROVEMENT ($ / Net ) Space @ NA Building is used as$25.00 existing $100/SF Café & Bar: $90/SF Marina is used as existing Restaurant $30.00 per NSF @ 9,063 s.f. ($10,475,718) $30.00 $30.90 $31.83 $32.78 $33.77 $34.78 $35.82 $36.90 $38.00 $39.14 $40.32 Total Development Costs ($1,740,202) ($611,077) ($4,099,267) ($4,025,171) $0 $100/SF $0 $0 $0 $0 $0 $0 Restaurant: $100/SF Casual Dining: Casual Dining $26.00 per NSF @ 8,973 s.f. $26.00 $26.78 $27.58 $28.41 $29.26 $80/SF $30.14 $31.05 $31.98 $32.94 $33.92 $34.94 Annual Cash Flow Marina Retail: Vacancy & CreditIncome Loss $0 $0 $0 $0 ($128,136) $0 $0 $0 $0 ($118,617) ($24,435) Net Operating $502,324 $649,374 $668,855 $688,921 $709,589 $612,259 $728,367 Marina Retail & Office $0 $0 $0 $0 $7,176,056 ($51,633) $9,276,772 $0 $9,555,076 $0 $9,841,728 $0 $10,136,980 $0 $8,746,562 ($29,928) $10,405,249 ($6,165) Asset Value 7.0% (Cap Rate) PARKING ABOVE $15,000/ Restaurant $0 $0 $0 $0 ($76,504) $0Surface Parking: $0 $0 $0 ($88,689) ($312,157) ($18,270) Transaction CostGRADE 3.0%($ / STALL) Surface Cost: Casual Dining ($65,645) $0stall $0 $0 $0 ($76,100) ($15,677) Total Development Costs ($1,740,202) ($611,077) ($4,099,267) ($4,025,171) $0 $0 $0 ($10,475,718) $10,000/stall (Parking is NA Vacancy & Credit LossFlow (%)GRADE ($ / STALL) PARKING Unleveraged NetBELOW Cash ($1,740,202) ($611,077) ($4,099,267) ($4,025,171) $502,324 $649,374 $668,855 $688,921 $709,589 $612,259 $10,821,459 used as existing and 50% 0% 0% 0% 0% 25% 5% (Free Rent) Net Present ValueMarina Retail & Office 3 Month8% ($1,554,684) covered by surface) Restaurant 3 Month4.9% 25% 0% 0% 0% 0% 25% 5% (Free Rent) Unleveraged IRR Before Taxes Casual Dining 25% Shell 0%Included Parking 0% 0% 0% 5% (Free Rent) costs ) NA Included Building Shell Included Building Shell Included Building Bld Cost NA 25% SOFT COST 3(Month % of hard Operations & Maintenance Expenses $0 $0 $0 $0 ($31,216) ($32,153) Event ($33,118) ($34,111) ($35,134) ($36,188) BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) NA $1.15/SF Spa: $2.00/SF $1.15/SF & Sales: $6.00/SF 20% Gross Revenue($37,274) Marina Retail & Office $0 $0 $0 $0 ($5,278) ($5,436) Café ($5,599) ($5,767) ($5,940) ($6,119) ($6,302) Resutaurant: $1.15/SF & Bar: $1.15/SF Restaurant $0 $0 $0 $0 ($13,034) ($13,425) ($13,828) ($14,243) ($14,670) ($15,110) ($15,563) Casual Dining $0 $0 $0 $0 ($12,905) ($13,292) ($13,690) ($14,101) ($14,524) ($14,960) ($15,409) Expense per s.f. $1.15 per GSF @ 24,118 s.f. $1.29 $1.33 $1.37 $1.41 $1.46 $1.50 $1.55 Marina Retail & Office $1.15 per GSF @ 4,078 s.f. $1.15 $1.18 $1.22 $1.26 $1.29 $1.33 $1.37 $1.41 $1.46 $1.50 $1.55 INCOME ASSUMPTIONS GSF @ NA 10,070 s.f. $1.18 $1.22 $1.26 $1.29 $1.41 $1.46 $1.50 $1.55 $30/NSF $1.15 Spa: $23.5/NSF Restaurant: $30/ NSF$1.33 Event:$1.37 $550/day/space $15/Lineal Foot/month RENTALRestaurant INCOME ( $ $1.15 / Net SF per / MO ) Casual Dining $1.15 per GSF @ 9,970 s.f. $1.15 $1.18 $1.26 $1.29$26/ NSF $1.33 Café$1.37 $1.41 $1.46 $1.50 $1.55 Marina Retail & Office: Restaurant: $1.22 $31/NSF Casual Dining: & Bar: $26/NSF Allocated Operating Cost for Open Space $0.25 per Open Space @ 36,187 s.f. $0 $0 $0 $0 ($10,182) ($10,488) ($10,802) ($11,126) ($11,460) ($11,804) ($12,158) $25/NSF Marina Retail: $25/NSF Net Operating Income $0 $0 $0 $0 $502,324 $649,374 $668,855 $688,921 $709,589 $612,259 $728,367 NA NA $140/stall/ mo NA $4.00/hour NA Development Costs PARKING INCOME ( $ / SF / MO ) $4.00/hour Percent Built by year 16.6% 5.8% 39.1% 38.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Demolishment Cost $30.00 12,036 s.f. ($361,077) ($361,077) per Existing Building SF @ VALUE ASSUMPTION Land $23.38 per s.f. @ 29,600 s.f. ($691,903) ($691,903) Discountper Rate 8.00% 8.00% 8.00% 8.00% Land Cost of Open Space $22.06 s.f. @ NA 36,187 s.f. ($798,300) 8.00% ($798,300) Exit Capitalization Rate 7.00% 7.00% 7.00% 12.00% Site - Infrastructure $30.00 per s.f. @ NA 29,600 s.f. ($888,000) 7.00% ($888,000) NET PRESENT VALUE ( $ / NSF ) ($40.46) ($71.62) ($17.48) Building Shell (Includes Soft Cost) $165.37 per GSF @ 24,118 s.f. ($3,988,261) $1.77 $0 $0 ($71.51) ($2,392,957) ($1,595,304) $0 $0 $0 $0 $0 $0 $0 $ ($5,806,561) ($5,757,870) ($412,933) $1,887,580 Marina Retail & Office VALUE $130.00TOTAL per GSF @ 4,078 s.f. ($530,111) $31,346 ($318,067) ($212,044) ($1,554,684) Unleveraged Before per Taxes 4.3% 4.9% 7.0% 15.2% Restaurant IRR $185.00 GSF @ 6.4% 10,070 s.f. ($1,862,950) 8.1% ($1,117,770) ($745,180) Leveraged Before per Taxes NA NA NA NA NA Casual Dining IRR$160.00 GSF @ 8.7%9,970 s.f. ($1,595,200) ($957,120) ($638,080) Tenant Improvement $92.48 per NSF @ 21,706 s.f. ($2,007,470) $0 $0 $0 ($2,007,470) $0 $0 $0 $0 $0 $0 $0 DEBT ASSUMPTIONS Marina Retail & Office $80.00 per NSF @ 3,670 s.f. ($293,600) ($293,600) TO VALUE NA NA NA NA NA Restaurant LOAN $100.00 per NSF @ 65%9,063 s.f. ($906,300) ($906,300) Average DEBT SERVICE$90.00 COVERAGE NA NA NA NA NA Casual Dining per NSF @1.908,973 s.f. ($807,570) ($807,570) TOTAL DEBT $32,880,848 NA($250,000) ($250,000) NA NA NA NA Other Fees (Permitting, Consultant) ($500,000) NET EQUITY During Development Land) NA NA NA NA NA WST 9.5%(Inclu per @ $6,883,731 ($653,954) ($311,691) ($342,264) Construction Cost$17,500,000 Allocated Development Cost of Open Space $16.21 per Open Space @ 36,187 s.f. ($586,753) $0 $0 ($506,620) ($80,133) Total Development Costs ($1,740,202) ($611,077) ($4,099,267) ($4,025,171) $0 $0 $0 $0 $0 $0 $0 ($10,475,718)

WATERFRONT: HENRY PIER CF

NAIOP Real Estate Challenge Financial Underwriting Summary

Waterfront

H.C. Henry Pier Total DESIGN ASSUMPTIONS

Building Year10

2 w/ Year 1Building Year 2 Parking Year 3

Building 3 5 Year 4 Year

Year Discovery 6 YearCenter 7 Year 8

Year 9 Marina Year 10

Operation Permiting & Planning Construction 2013 2014 2015 2016 201724,118 2018 2019 2020 2021 2022 NA 2023 19,625 84,490 26,244 Space Program Efficiency Factor 90% 90% 90% 90% NA Inflation Factor 3% RENTABLE SF 17,663 80,520 21,706 23,620 NA Total GSF (Exclude Parking) 15,744 s.f.

0 0 11,000 11,000 15,744 15,744 15,744 15,744 15,744 15,744 15,744 Restaurant: 8,438 NSF Spa: 26,010 NSF Restaurant: 9,063 NSF Event Space: 6,900NSF 81 Deck (4,806 Lineal Foot) Event Space 7,667 s.f.

7,667 8,937NSF 7,667 7,667 Office: 7,667 7,667 7,667 Marine Retail & office: Restaurant:7,667 9,720 NSF7,667Casual Dining: Sales 3,000NSF 7,667 Sales Office 3,333 s.f.

(No Revenue will be 11,188 generated) 3,333 NSF 3,333Marine Retail: 3,333 3,6703,333 3,333 3,333 3,333 NSF Parking: 44,790 NSF Café and Bar:3,333 4,270 NSF 3,333 Café & Bar 4,744 s.f.

4,744 4,744 4,744 4,744 SF 4,744 4,744 4,744 Parking: 10,500 Surface Parking 10,500 s.f.

0 10,500 10,500 10,500 10,500 10,500 10,500 10,500 NSF (Excludie Parking) 90% of GSF @ 15,744 s.f.

14,170 s.f.

0 0 9,900 9,900 14,170 14,170 14,170 14,170 14,170 14,170 14,170 Average Unit SF NA NA 350SF/ parking space NA 350SF/ surface parking NA Event Space 90% of GSF @ 7,667 s.f.

6,900 s.f.

0 0 6,900 6,900 6,900 6,900 6,900 6,900 6,900 6,900 6,900 2.29/1,000 NSF 127 Sales OfficePARKING 90% STALLS of GSF @ 3,333 s.f.

3,000 s.f.

0 01.69/1,000 3,000NSF 3,000 3,000 3,000 3,000 3,000 3,000 3,000 NA 3,000 Café & Bar 90% of GSF @ 4,744 s.f.

4,270 s.f.

0 0 0 4,270 4,270 4,270 4,270 4,270 4,270 4,270 Surface Parking Space 350 per stall @ 10,500 s.f.

30 stall 0 0 30 30 30 30 30 30 30 COST ASSUMPTIONS Net Operating Income $52/NSF Building is used as existing $27/NSF $69/NSF $63/NSF NA LAND VALUE PER DEVELOPMENT UNIT Gross Revenue $0 $0 $425,951 $438,730 $1,759,981 $1,980,874 $2,040,300NA$2,101,509 SITE - INFRASTRUCTURE ( $ / SF OF SITE ) $30.0 NA $30 $30 $1,812,780 $1,867,163 $1,923,178 $30 Event space $0 $0 Spa: $425,951 $451,892 $185/SF $465,449 $479,412 $508,608 Marina $523,866 $539,582 BUILDING SHELL 365 ( $Days / Gross SF ) NA Building is used as existing $250/SF $438,730 Restaurant: Discovery $493,794 Center: $110K is used as existing Café & Bar $0 $0 $0 $0 Casual $124,954 $128,703 $132,564 for Moving $136,541 $140,637 $144,856 $149,202 Restaurant: $185/SF Dining: $160/SF Surface Parking (Nonworking Days) $0 $0 $0 $0 Marina $350,078 $360,581 $371,398 $382,540 $394,016 $405,837 $418,012 Retail: $130/SF Café & Bar: $160/SF Surface Parking (Working Days) $0 $0 $0 $0 $833,057 $858,048 $883,790 $910,303 $937,613 $965,741 $994,713 Daily Rate forIMPROVEMENT Event Space $550.00 space @ $619.03 $100/SF $637.60 $656.73 $676.43 $717.63 TENANT ($ / NetperSF ) NA 2 space Building is used$550.00 as existing$566.50 Spa:$583.50 $100/SF $601.00 Restaurant: Café & Bar: $90/SF $696.72 Marina is used as$739.15 existing Rent (NNN) per s.f. (café & Bar) $26.00 per NSF @ 4,270 s.f. $26.00 $26.78 $27.58 $30.14 $31.05 $31.98 $32.94 $33.92 $34.94 Restaurant: $100/SF $28.41 Casual$29.26 Dining: $100/SF Surface Parking (Nonworking Days) $4.00 per hour @ 30 stall 108 days $4.00 $4.12 $4.24 $4.37 Marina $4.50 $4.64 $4.78 $4.92 $5.07 $5.22 $5.38 Retail: $80/SF Surface Parking (Working Days) $4.00 per hour @ 30 stall 257 days $4.00 $4.12 $4.24 $4.37 $4.50 $4.64 $4.78 $4.92 $5.07 $5.22 $5.38 Vacancy & Credit Loss $0 $0 ($319,464) ($263,238) ($1,196,603) ($1,125,024) ($1,158,775) ($1,193,538) ($1,264,504) ($1,266,225) ($1,311,672) ABOVE GRADE ($ / STALL) Surface $15,000/ 40% Vacancy & CreditPARKING Loss for Event Space(%) 75% 60% 50% 40% 40%Parking:40% 40% 40% Surface Cost: Vacancy & Credit Loss for Café & Bar(%) 25% 0% 0% stall 0% 0% 25% 0% 5% $10,000/stall (Parking is 80% Vacancy & Ceredit Loss forBELOW Parking (%) (Nonworking Days) 75% 70% 70% 70% 70% 70%NA 70% PARKING GRADE ($ / STALL) used as existing and 90% (Working Days) 85% 80% 80% 80% 80% 80% 80% covered($52,868) by surface)($54,454) ($115,245) ($118,702) ($122,263) ($125,931) ($129,709) ($133,600) ($137,608) Operations & Maintenance Expenses $0 $0 Event Space & Sales Office Expense per s.f. $6.00 per GSF @ 11,000 s.f. $6.00 $6.18 $6.37 $6.56 $6.75 $6.96 $7.16 $7.38 $7.60 $7.83 $8.06 NA Included Building Shell Included Building Shell Included Building Shell Included Parking Bld Cost NA SOFT COST ( % of hard costs ) Café & Bar Expense per s.f. $1.15 per GSF @ 4,744 s.f. $1.15 $1.18 $1.22 $1.26 $1.29 $1.33 $1.37 $1.41 $1.46 $1.50 $1.55 BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) NA $1.15/SF Spa: $2.00/SF $1.15/SF Event & Sales: $6.00/SF 20% Gross Revenue Parking Expenses (Percent of Gross Revenue) 5% per Gross Revenue 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% Resutaurant: $1.15/SF Café & Bar: $1.15/SF Allocated Operating Cost for Open Space $0.25 per Open Space @ 127,134 s.f. $0 $0 $0 $0 ($35,772) ($36,846) ($37,951) ($39,090) ($40,262) ($41,470) ($42,714) Net Operating Income $0 $0 $53,620 $121,038 $412,361 $532,208 $548,174 $564,619 $546,399 $599,005 $609,515 Development Costs Percent Built by year 23.01% 22.99% INCOME ASSUMPTIONS Demolishment Cost $30.00 ($509,058) ($509,058) per Existing Building SF @ 16,968.6 s.f. $30/NSF Spa: $23.5/NSF Restaurant: $30/ NSF Event: $550/day/space $15/Lineal Foot/month RENTAL INCOME ( $ / Net SF / MO ) NA Land $23.38 per s.f. @ 26,244 s.f. ($613,466) ($613,466) Marina Retail & Office: Restaurant: $31/NSF Casual Dining: $26/ NSF Café & Bar: $26/NSF Land Cost of Open Space $6.83 per s.f. @ 127,134 s.f. ($868,692) ($868,692) $25/NSF Marina Retail: $25/NSF Site - Infrastructure $30.00 per s.f. @ 26,244 s.f. ($787,333) ($787,333) Moving Cost $10.00 per GSF @ 11,000 s.f. ($110,000) ($110,000) PARKING INCOME ( $ / SF / MO ) NA NA $140/stall/ mo NA $4.00/hour NA Development Costs $160.00 per GSF @ 4,744 s.f. ($759,111) ($607,289) ($151,822) $4.00/hour ($621,000) TI for Café and Bar $90.00 per NSF @ 4,270 s.f. ($621,000) Development Costs for Surface Parking $15,000 per stall @ 30 stall ($450,000) ($450,000) VALUE ASSUMPTION Other Fees (Permits, Consultant) Allow ($500,000) ($250,000) ($250,000) WST 9.5% ($248,657) 8.00% ($74,797) ($57,692) ($116,168) Construction Cost @ Discountper Rate NA($2,617,444) 8.00% 8.00% 8.00% 8.00% Allocated Development Cost of OpenExit SpaceCapitalization $16.21 per Open Space @ ($2,061,396) 7.00% $0 $0 ($1,779,870) ($281,526) Rate NA127,134 s.f.

7.00% 7.00% 7.00% 12.00% Total Development CostsVALUE ( $ / NSF ) ($7,528,714) $1.77 ($1,732,159) ($1,731,188) ($2,444,851) $0 $0 $0 ($17.48)$0 $0 $0 $0 NET PRESENT ($40.46) ($71.51) ($1,620,516) ($71.62) Annual Cash Flow VALUE TOTAL $ ($5,806,561) $31,346 ($5,757,870) ($1,554,684) ($412,933) $1,887,580 Net Operating Income IRR Before Taxes $0 $53,620 $121,038 $412,361 $548,174 $564,619 $546,399 $599,005 Unleveraged 6.4% 8.1% $0 4.3% 4.9% $532,208 7.0% 15.2%$609,515 Asset Value IRR7.0% (Cap Rate) $0 $0 $765,995 $1,729,110 $5,890,869NA $7,602,971 $7,831,060 $8,065,992 $7,805,697 $8,557,211 NA$8,707,355 Leveraged Before Taxes 8.7% NA NA NA Transaction Cost 3.0% ($261,221) Total Development Costs ($7,528,714) ($1,732,159) ($1,731,188) ($2,444,851) ($1,620,516) $0 $0 $0 $0 $0 $0 $0 DEBT ASSUMPTIONS Unleveraged Net Cash Flow ($1,732,159) ($1,731,188) ($2,391,231) ($1,499,479) $412,361 $532,208 $548,174 $564,619 $546,399 $599,005 $9,055,649 LOAN TO VALUE 65% NA NA NA NA NA Net Present Value 8% ($412,933) Average COVERAGE 1.90 NA NA NA NA NA Unleveraged IRR Before TaxesDEBT SERVICE7.0% TOTAL DEBT $32,880,848 NA NA NA Net Cash Flow (H.C. Henry Pier) ($4,024,512) ($1,447,853) ($2,099,397) ($1,198,889) $721,969NA $851,104 $876,637 $902,936 $894,865 $957,925 NA $12,413,646 NET During (Inclu Land) $17,500,000 NA NA NA NA NA Unleveraged IRREQUITY (H.C. Henry Pier) Development 9.3%

GROSS SF Unit Input

Hard & Soft Cost Notes Excludes 9.5% Washington State Sales Tax

Unit Value 154,478 90% 143,509

Total

WATERFRONT: MARINA CF

NAIOP Real Estate Challenge Financial Underwriting Summary

Waterfront

Marina DESIGN ASSUMPTIONS Space Program

Net Operating Income

Inflation Factor Total Deck Chandler's Cove H.C. Henry Pier

Total GROSS SF Input Unit Efficiency Factor RENTABLE SF 3% 72 Deck 20 Deck 52 Deck

154,478 Unit Value 90% 143,509 Total Lineal Foot Total Lineal Foot Total Lineal Foot

Building 1 Year 0

Year 1

Building 2 w/ Parking Year 2 Year 3

Building 3 Year 4 Year 5

Permiting & Planning Construction 19,625 84,490 24,118 2013 2014 2015 2016 2017 2018 90% 90% 90% 17,663 80,520 21,706 Restaurant: 8,438 NSF Spa: 26,010 NSF Restaurant: 9,063 NSF 4,400 LF 4,400 4,400 4,400 4,400 4,400 4,400 Marine Retail & office: Restaurant: 9,720 NSF Casual Dining: 8,937NSF 1,743 LF 1,743 1,743 1,743 1,743 1,743 1,743 11,188 44,790 NSF2,657 Marine2,657 Retail: 3,670 NSF 2,657 LFNSF 2,657 2,657Parking:2,657 2,657 Total

Gross Revenue $792,000 $815,760 $840,233 $865,440 SFLineal Foot @NA 4,400 LF NA$15.00 parking space Rent per Lineal Foot "LF", per month Average $15.00 Unitper 12 month $15.45350SF/ $15.91 $16.39 Vacancy & Credit LossPARKING STALLS ($55,440) ($57,103) 1.69/1,000 ($58,816) NSF($60,581) 127 Vacancy & Credit Loss (%) 7% 7% 7% 7% Operations & Maintenance Expenses ($158,400) ($163,152) ($168,047) ($173,088) COST ASSUMPTIONS Expense Ratio (%) 20% 20% 20% 20% per Gross Revenue $52/NSF Building is used as existing 20% $27/NSF LAND VALUE PER DEVELOPMENT UNIT Ground Lease ($122,623) ($126,301) ($130,090) ($133,993) SITE - INFRASTRUCTURE ( $ / SF OF SITE ) $30.0 NA $30 Ground Lease 1 $104,188.17 ($107,314) ($110,533) Spa: ($113,849) BUILDING SHELL ( $ / Gross SF ) NA Building is used as existing $250/SF($117,265) Ground Lease 2 $14,862.96 ($15,309) ($15,768) ($16,241)$185/SF ($16,728) Restaurant: Net Operating Income $455,537 $469,203 $483,280 $497,778 Annual Cash Flow TENANT IMPROVEMENT ($ / Net SF ) NA Building is* used as existing $100/SF$497,778 Net Operating Income $469,203 Spa: $483,280 Asset Value 12.0% (Cap Rate) $3,796,144 $3,910,029Restaurant: $4,027,330$100/SF $4,148,150 Transaction Cost 3.0% Total Development Costs ($3,796,144) ($3,796,144) $0 $0 $0 Net Cash Flow ($3,796,144) $469,203 $483,280 $497,778 PARKING ABOVE GRADE ($ / STALL) Net Present Value 8% $1,887,580 Surface Cost: Unleveraged IRR Before Taxes 15.2% $10,000/stall (Parking is PARKING BELOW Cash Flow from Chandler's Cove GRADE ($ / STALL) ($1,503,791) $185,869used $191,445 $197,188 as existing and Cash Flow from H.C. Henry Pier ($2,292,354) $283,335 $291,835 $300,590 covered by surface) * 1: In Year 0, project can not generate cash flow.

NA Included Building Shell Included Building Shell SOFT COST ( % of hard costs ) BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) NA $1.15/SF Spa: $2.00/SF Resutaurant: $1.15/SF

Year 6

Discovery Center Year 7 Year 8

Year 9

Marina Year 10

Operation 26,244 NA 2020 2021 2022 2023 90% NA 23,620 NA Event Space: 6,900NSF 81 Deck (4,806 Lineal Foot) 4,400 4,400 4,400 4,400 4,400 Sales Office: 3,000NSF 1,743 1,743 1,743 1,743 1,743 Café 4,270 NSF2,657 2,657and Bar:2,657 2,657 2,657 Parking: 10,500 SF

2019

$891,403 $918,145 $945,689 $974,060 $1,003,282 $1,033,380 $1,064,382 350SF/ surface $16.88 NA $17.39 $17.91 $18.45parking$19.00 $19.57 NA $20.16 2.29/1,000 NSF ($70,230) ($62,398) ($64,270) ($66,198) ($68,184) ($72,337)NA ($74,507) 7% 7% 7% 7% 7% 7% 7% ($178,281) ($183,629) ($189,138) ($194,812) ($200,656) ($206,676) ($212,876) 20% 20% $63/NSF 20% 20% 20%NA 20% $69/NSF 20% ($138,013)$30($142,153) ($146,418) ($150,810) ($155,335) ($159,995)NA ($164,795) $30 ($120,783) ($124,406) ($135,942) Marina ($140,020) Restaurant: $185/SF ($128,138) Discovery($131,982) Center: $110K is used ($144,221) as existing ($17,230) ($19,393) ($19,975) ($20,574) Casual Dining:($17,747) $160/SF ($18,280) for($18,828) Moving $512,711 $528,093 $543,935 $560,253 $577,061 $594,373 $612,204 Marina Retail: $130/SF Café & Bar: $160/SF

Restaurant: $100/SF Café & $560,253 Bar: $90/SF$577,061 Marina is used $612,204 as existing $512,711 $528,093 $543,935 $594,373 Casual Dining: $100/SF $4,532,795 $4,668,779 $4,808,842 $4,953,108 $5,101,701 $4,272,594 $4,400,772 Marina Retail: $80/SF ($153,051) $0 $0 $0 $0 $0 $0 $0 $512,711 $528,093 $543,935 $560,253 $577,061 $594,373 $5,560,854 Surface Parking: $15,000/ stall $203,104 $209,197 $215,473 $221,937 $228,595 $235,453NA$2,202,856 $309,608 $318,896 $328,463 $338,317 $348,466 $358,920 $3,357,997 Included Building Shell $1.15/SF

Included Parking Bld Cost Event & Sales: $6.00/SF Café & Bar: $1.15/SF

NA 20% Gross Revenue

INCOME ASSUMPTIONS RENTAL INCOME ( $ / Net SF / MO )

NA

$30/NSF Marina Retail & Office: $25/NSF

Spa: $23.5/NSF Restaurant: $31/NSF

Restaurant: $30/ NSF Casual Dining: $26/ NSF Marina Retail: $25/NSF

Event: $550/day/space Café & Bar: $26/NSF

$15/Lineal Foot/month

PARKING INCOME ( $ / SF / MO )

NA

NA

$140/stall/ mo $4.00/hour

NA

$4.00/hour

NA

NA NA ($40.46) ($5,806,561) 6.4% 8.7%

8.00% 7.00% $1.77 $31,346 8.1% NA

8.00% 7.00% ($71.51) ($5,757,870) 4.3% NA

8.00% 7.00% ($71.62) ($1,554,684) 4.9% NA

8.00% 7.00% ($17.48) ($412,933) 7.0% NA

8.00% 12.00% $1,887,580 15.2% NA

65% 1.90 $32,880,848 $17,500,000

NA NA NA NA

NA NA NA NA

NA NA NA NA

NA NA NA NA

NA NA NA NA

VALUE ASSUMPTION

Discount Rate Exit Capitalization Rate NET PRESENT VALUE ( $ / NSF ) VALUE TOTAL $ Unleveraged IRR Before Taxes Leveraged IRR Before Taxes

DEBT ASSUMPTIONS

LOAN TO VALUE Average DEBT SERVICE COVERAGE TOTAL DEBT NET EQUITY During Development (Inclu Land)

Hard & Soft Cost Notes Excludes 9.5% Washington State Sales Tax

WATERFRONT: BUILDING 2 CF

NAIOP Real Estate Challenge Financial Underwriting Summary

Waterfront

Building 2 Building Year 01

Total DESIGN ASSUMPTIONS Space Program

InputGROSS SFUnit

Unit Value 154,478 90% 143,509

2 2w/ Parking Year 1Building Year Year 3

Permiting & Planning Construction 2013 2014 2015 2016 19,625 84,490 90% 90% 17,663 80,5200 0 0 Restaurant: 8,438 NSF Spa: 26,010 NSF Marine Retail & office: Restaurant: 9,720 NSF 11,188 Parking: 44,790 35,730 s.f. NSF 0 0 0 NSF 26,010 s.f.

0 0 0 9,720 s.f.

0 0 0 Total

Building 3 5 Year 4 Year 2017 2018 24,118 90% 21,706 39,700 0 39,700 Restaurant: NSF 28,900 9,06328,900 Casual10,800 Dining: 8,937NSF 10,800 Marine Retail: 3,670 NSF 0 35,730 35,730 0 26,010 26,010 0 9,720 9,720

Year 6Discovery Year 7Center Year 8

Year 9 Marina Year 10

Operation 2020 2021 2022 2023 26,244 NA 90% NA 39,700 23,620 39,700 39,700 39,700 NA 39,700 Event 6,900NSF28,900 81 Deck (4,806 Lineal 28,900 Space: 28,900 28,900 28,900Foot) Sales Office: 3,000NSF10,800 10,800 10,800 10,800 10,800 Café 4,270 NSF 35,730and Bar: 35,730 35,730 35,730 35,730 Parking: 10,500 26,010 26,010 SF 26,010 26,010 26,010 9,720 9,720 9,720 9,720 9,720

2019

Factor Inflation Factor Efficiency 3% RENTABLE GSF 39,700 s.f. SF Spa 28,900 s.f.

Restaurant 10,800 s.f.

Net Rentable Area 90% of GSF @ 39,700 s.f.

Spa 90% of GSF @ 28,900 s.f.

Restaurant 90% of GSF @ 10,800 s.f.

Net Operating Income Average Unit SF NA NA 350SF/ parking space NA 350SF/ surface parking NA Gross Revenue PARKING STALLS $0 $0 $0 $0 $1,027,089 $1,057,901 $1,089,638 $1,122,328 $1,226,398 2.29/1,000 NSF$1,155,997 $1,190,677 NA 127 1.69/1,000 NSF Spa $0 $0 $0 $0 $687,950 $708,589 $729,847 $751,742 $774,294 $797,523 $821,449 Restaurant $0 $0 $0 $0 $339,138 $349,312 $359,792 $370,586 $381,703 $393,154 $404,949 COST ASSUMPTIONS Rent (NNN) per s.f. $25.54 per NSF @ 35,730 s.f. $25.54 $26.31 $27.10 $27.91 $28.75 $29.61 $30.50 $31.41 $32.35 $33.32 $34.32 $52/NSF Building is used as existing $24.21 $27/NSF $69/NSF $27.24 LAND VALUE PER DEVELOPMENT Spa $23.50 perUNIT NSF @ 26,010 s.f. $23.50 $24.93 $25.68 $26.45 $28.06 $63/NSF $28.90 $29.77 $30.66 NA $31.58 SITE - INFRASTRUCTURE SF OF per SITE NA $31.00 $30 $30 $30 Restaurant ( $ / $31.00 NSF) @ 9,720 $30.0 s.f. $31.93 $32.89 $33.87 $34.89 $35.94 $37.02 $38.13 $39.27 $40.45 NA $41.66 BUILDING SHELL ( $ / Gross SF ) NA Building is used as existing Discovery Center: is used ($20,247) as existing Vacancy & Credit Loss $0 $0 Spa: $250/SF $0 $0 Restaurant: ($256,772) $185/SF $0 $0 $0 $110K $0 Marina ($98,289) Restaurant:$0 $185/SF Dining: $160/SF Spa 3 Month (Free Rent) $0 $0 $0 Casual ($171,988) $0 $0 for Moving $0 $0 $0 $0 Retail: $130/SF Café Restaurant 3 Month (Free Rent) $0 $0 $0 $0 Marina ($84,785) $0 $0 & Bar: $160/SF $0 $0 ($98,289) ($20,247) Vacancy & Credit Loss (%) 25% 0% 0% 0% 0% 8% 2% TENANT IMPROVEMENT ($Rent) / Net SF ) NA Building is used as existing Spa: $100/SF Restaurant: Café used as existing Spa 3 Month (Free 25% $100/SF 0% 0% & Bar: $90/SF 0% 0% Marina is0% 0% Restaurant: $100/SF Casual Dining: $100/SF Restaurant 3 Month (Free Rent) 25% 0% 0% 0% 0% 25% 5% Retail: $80/SF Operations & Maintenance Expenses $0 $0 $0 $0 Marina ($79,033) ($81,404) ($83,846) ($86,362) ($88,953) ($91,621) ($94,370) Spa $0 $0 $0 $0 ($65,054) ($67,006) ($69,016) ($71,087) ($73,219) ($75,416) ($77,678) Restaurant $0 $0 $0 $0 ($13,979) ($14,398) ($14,830) ($15,275) ($15,733) ($16,205) ($16,691) PARKING ABOVE GRADE ($ / STALL) Surface $15,000/$2.24 Expense per s.f. $1.15 per GSF @ 39,700 s.f. $1.99 $2.05 $2.11 Parking: $2.18 $2.31 $2.38 Surface Cost: stall$2.39 Spa $2.00 per GSF @ 28,900 s.f. $2.00 $2.06 $2.12 $2.25 $2.32 $2.46 $2.53 $2.61 $2.69 $10,000/stall (Parking is$2.19 PARKING BELOW GRADE$1.15 ($ / STALL) Restaurant per GSF @ 10,800 s.f. $1.15 $1.18 $1.22 $1.29 $1.33 $1.37 $1.41 $1.46 $1.50 NA $1.55 used as existing and $1.26 Allocated Operating Cost for Open Space $0.25 per Open Space @ 48,902 s.f. $0 $0 $0 ($13,760) ($14,173) ($14,598) ($15,036) ($15,487) ($15,951) ($16,430) covered by $0 surface) Net Operating Income $0 $0 $0 $0 $677,524 $962,325 $991,194 $1,020,930 $1,051,558 $984,816 $1,095,350 Development Costs NA Included Building Shell Included Building Shell Included Building Shell Included Parking Bld Cost NA SOFT COST ( % of hard costs ) Percent Built by EXPENSES year 19.88% 2.82% Spa: 38.64% BASE YR. OPERATING ( $ / Gross SF / YR ) NA $1.15/SF $2.00/SF 38.65% $1.15/SF Event & Sales: $6.00/SF 20% Gross Revenue ($338,883) Resutaurant: $1.15/SF Café & Bar: $1.15/SF ($338,883) Demolishment Cost $30.00 per Existing Building SF @ 11,296 s.f. ($935,004) Land $23.38 per s.f. @ 40,000 s.f. ($935,004) Land Cost of Open Space $60.56 per s.f. @ 48,902 s.f. ($2,961,351) ($2,961,351) @ 40,000 s.f. ($1,200,000) ($1,200,000) Site - Infrastructure $30.00 per s.f.

INCOME ASSUMPTIONS Building Shell (Includes Soft Cost) $232.32 per GSF @ 39,700 s.f. ($9,223,000) $0 $0 ($5,533,800) ($3,689,200) $0 $0 $0 $0 $0 $0 $0 Spa: $23.5/NSF Event: $550/day/space $15/Lineal Foot/month RENTAL INCOME Net SFper / MO Spa ( $ /$250.00 GSF) @ NA28,900 s.f. ($7,225,000) $30/NSF ($4,335,000) ($2,890,000) Restaurant: $30/ NSF Marina Retail & Office: Restaurant: $31/NSF Café & Bar: $26/NSF Restaurant $185.00 per GSF @ 10,800 s.f. ($1,998,000) ($1,198,800) ($799,200)Casual Dining: $26/ NSF $25/NSF Tenant Improvement $100.00 per NSF @ 35,730 s.f. ($3,573,000) $25/NSF $0 $0 $0 ($3,573,000)Marina Retail: $0 $0 $0 $0 $0 $0 $0 Spa $100.00 per NSF @ 26,010 s.f. ($2,601,000) ($2,601,000) PARKING INCOME ( $ / SF / MO ) NA NA $140/stall/ mo NA $4.00/hour NA ($972,000) Restaurant $100.00 per NSF @ 9,720 s.f. ($972,000) $4.00/hour ($500,000) Other Fees (Permitting, Consultant) ($250,000) ($250,000) $0 $0 ($639,711) ($689,909) WST 9.5% per Construction Cost @ $13,996,000 ($1,329,620) VALUE ASSUMPTION Allocated Development Cost of Open Space $16.21 per Open Space @ 48,902 s.f. ($792,909) $0 $0 ($684,621) ($108,288) Discount Rate NA 8.00% 8.00% ($8,060,397) 8.00% ($4,146,355) ($588,883) ($8,058,132) $0 $0 $0 8.00%$0 $0 $08.00% $0 Total Development Costs ($20,853,767) Exit Capitalization Rate NA 7.00% 7.00% 7.00% 7.00% 12.00% Annual Cash Flow NET PRESENT VALUE ( $ / NSF ) ($40.46) $1.77 ($71.51) ($71.62) ($17.48) Net Operating Income $0 $0 $0 $0 $677,524 $962,325 $991,194 $1,020,930 $1,051,558 $984,816 $1,095,350 VALUE TOTAL $ ($5,806,561) $31,346 ($5,757,870) ($1,554,684) ($412,933) $1,887,580 Asset Value 7.0% (Cap Rate) $0 $0 $0 $0 $9,678,907 $13,747,494 $14,159,919 $14,584,716 $15,022,258 $14,068,803 $15,647,864 Unleveraged IRR Before Taxes 6.4% 8.1% 4.3% 4.9% 7.0% 15.2% Transaction Cost 3.0% ($469,436) Leveraged IRR Before Taxes 8.7% NA NA NA NA NA ($4,146,355) ($588,883) ($8,058,132) ($8,060,397) $0 $0 $0 $0 $0 $0 $0 Total Development Costs ($20,853,767) Unleveraged Net Cash Flow ($4,146,355) ($588,883) ($8,058,132) ($8,060,397) $677,524 $962,325 $991,194 $1,020,930 $1,051,558 $984,816 $16,273,779 DEBT ASSUMPTIONS Net Present Value 8% ($6,506,313) LOAN TO VALUE 65% NA NA NA NA NA Unleveraged IRR Before Taxes 0.7% Average DEBT SERVICE COVERAGE 1.90 NA NA NA NA NA Net Cash Flow (Building 2+3, Parking) ($5,757,870) ($5,911,558) ($1,224,960) ($12,681,357) ($13,308,136) $1,297,213 $1,867,251 $2,061,974 $2,123,833 $2,187,548 $2,036,269 $33,032,590 TOTAL DEBT $32,880,848 NA NA NA NA NA Unleveraged IRR (Bldg 2+3, Parking 4.3% NET EQUITY During Development (Inclu Land) $17,500,000 NA NA NA NA NA Hard & Soft Cost Notes Excludes 9.5% Washington State Sales Tax

WATERFRONT: PARKING CF

NAIOP Real Estate Challenge Financial Underwriting Summary

Waterfront

Total

Building 1

Building 2 w/ Parking

Building 3

Discovery Center

Marina

DESIGN ASSUMPTIONS

Parking (Attached to Building 2) GROSS SF Efficiency Factor RENTABLE SF

154,478 90% 143,509

19,625 84,490 24,118 90%Year 0 90%2 Year 1 Year Year 3 Year 490% Year 5 17,663 80,520 21,706 Restaurant: 8,438 NSF & PlanningSpa: 26,010 NSF Restaurant: 9,063 NSF Permiting Construction Retail & office: Restaurant: 9,720 NSF Dining: 8,937NSF Unit ValueMarine Total 2013 2014 2015 2016 Casual2017 2018 11,188 NSF Parking: 44,790 NSF Marine Retail: 3,670 NSF

Input Unit Assumptions Inflation Factor 3% Structured Parking Spaces 127 Gross Parking Revenue $0 Average Unit SF NA NA Monthly Fees PARKING STALLS 127 Monthly Parking Fee $140.00 per stall @ 75 $ 140.0 $ Allocation to Monthly Use 75 COST ASSUMPTIONS Percent Occupancy by Monthly Contracts 0% $52/NSF Building is used as existing LAND VALUE PER DEVELOPMENT UNIT Hourly Fees SITE - INFRASTRUCTURE ( $ / SF OF SITE ) $30.0 NA Number of Spaces 52 BUILDING Nonwork SHELL Days ( $ / Gross108 SF ) NA Building is used as existing Daily Parking Hours 24 Percent Utilization 0% Work Days 257 TENANT IMPROVEMENT ($ / Net SF ) NA Building is used as existing Daily Parking Hours 24 Percent Utilization 0% Hourly Parking Rate $4.00 per hour $ 4.00 $ Net Operating Income Parking Revenue PARKING ABOVE GRADE ($ / STALL) Monthly Parking Hourly Parking Total ParkingPARKING Revenue BELOW GRADE ($ / STALL) Expenses Operating Expenses (Percent of Gross Revenue) 10% per Gross Revenue NA Included Building Shell Net Operating Income SOFT COST ( % of hard costs ) Development BASE YR.Costs OPERATING EXPENSES ( $ / Gross SF / YR ) NA $1.15/SF Percent Built by Year 1% Land *Land Cost is allocated to Building 2 Site - Infrastructure *Land Cost is allocated to Building 2 Surface for Current Paking Spot $10,000 per stall @ 114 ($1,270,000) Sturctured Parking Space $25,000 per stall @ 13 ($325,000) INCOME New ASSUMPTIONS Other Fees (Permitting, Consultant) ($50,000) ($25,000) $30/NSF RENTAL INCOME ( $ / Net SF / MO ) NA WST 9.5% per construction cost@ $1,595,000 Marina ($151,525) $0 Retail & Office: Total Development Costs ($1,796,525) ($25,000) $25/NSF Annual Cash Flow Net Operating Income PARKING INCOME ( $ / SF / MO ) NA NA Asset Value 8.0% Costs of Sale 3% Total Development Costs ($25,000) VALUE ASSUMPTION Unleveraged Net Cash Flow ($25,000) Discount Rate NA 8.00% Net Present Value 8% $2,303,127 Rate NA 7.00% Unleveraged IRR Before Taxes Exit Capitalization 26.7% NET PRESENT VALUE ( $ / NSF ) ($40.46) $1.77 VALUE TOTAL $ ($5,806,561) $31,346 Unleveraged IRR Before Taxes 6.4% 8.1% Leveraged IRR Before Taxes 8.7% NA

DEBT ASSUMPTIONS

LOAN TO VALUE Average DEBT SERVICE COVERAGE TOTAL DEBT NET EQUITY During Development (Inclu Land)

65% 1.90 $32,880,848 $17,500,000

NA NA NA NA

26,244 NA 90% Year 7 Year 8 Year 9 NA Year 10 23,620 NA Event Space: 6,900NSF 81 Deck (4,806 Lineal Foot) Operation Sales Office: 3,000NSF2021 2019 2020 2022 2023 Café and Bar: 4,270 NSF Parking: 10,500 SF 127 127 127 127 127 $2,322,171 $2,391,837 $2,463,592 $2,537,499NA $2,613,624 350SF/ surface parking Year 6

127 127 $0 $0 space $0 $2,188,869 350SF/ parking NA $2,254,535 2.29/1,000 NSF NA 1.69/1,000 NSF 144.2 $ 148.5 $ 153.0 $ 157.6 $ 162.3 $ 167.2 $ 172.2 $ 177.3 $ 182.7 $ 188.1 75 75 75 75 75 75 75 0% 0% 0% 50% 70% 90% 90% 90% 90% 90% $27/NSF $69/NSF $63/NSF NA $30 $30 $30 52 52 52 52 52 52NA 52 Spa: $250/SF Restaurant: Discovery Center: used as existing 108 $185/SF 108 108 108$110K 108Marina is108 108 Restaurant: $185/SF Casual Dining: 24 $160/SF 24 24for Moving24 24 24 24 Café 0% 0% 0%Marina Retail: 20% $130/SF 25% 30%& Bar: $160/SF 30% 30% 30% 30% 257 257 257 257 257 257 257 Spa: $100/SF Restaurant: $100/SF24 Café & Bar: $90/SF Marina is used as existing 24 24 24 24 24 24 Restaurant: $100/SF Casual Dining: $100/SF 0% 0% 0% 10% 15% 20% 20% 20% 20% 20% Marina Retail: $80/SF 4.12 $ 4.24 $ 4.37 $ 4.50 $ 4.64 $ 4.78 $ 4.92 $ 5.07 $ 5.22 $ 5.38 $0Surface Cost: $0 $0 $71,001 $102,383 $0 $0 $265,252 $378,623 $10,000/stall (Parking is $0 $0 as existing $0 and $0 $336,252 $481,006 used $0 $0 $0 ($218,887) ($225,454) covered by surface) 10% 10% 10% 10% 10% Included Building Building Shell $0 $0 Shell $0Included $117,365 $255,552 Spa: $2.00/SF $1.15/SF 1% 29% 0% 0% Resutaurant: $1.15/SF 68% ($381,000) ($97,500)

($889,000) ($227,500)

($25,000) Spa: $23.5/NSF Restaurant: $30/ NSF $0 ($45,458) ($106,068) $0 $26/ NSF $0 Restaurant: $31/NSF Casual Dining: ($25,000) ($523,958) ($1,222,568)Marina Retail: $0 $25/NSF $0 $0$140/stall/$0mo $0 $4.00/hour $0 ($25,000) ($25,000)

$0 $0

$117,365 NA $255,552 $1,467,066 $3,194,402

($523,958) ($1,222,568) ($523,958) ($1,222,568) 8.00% 7.00% ($71.51) ($5,757,870) 4.3% NA

$0 $0 $117,365 $255,552 8.00% 7.00% ($71.62) ($1,554,684) 4.9% NA

NA NA NA NA

Surface Parking: $15,000/ $135,584 $139,652 $143,841 $148,156 $152,601 stall $498,558 $513,515 $528,920 $544,788 $561,131 $634,142 $653,166 $672,761 $692,944NA $713,732 ($232,217) ($239,184) ($246,359) ($253,750) ($261,362) 10% 10% 10% 10% 10% Included Bld Cost $401,925 Parking $413,982 $426,402 $439,194NA $452,370 Event & Sales: $6.00/SF 20% Gross Revenue 0%& Bar: $1.15/SF 0% 0% 0% 0% Café

NA NA NA NA

Event: $550/day/space $0& Bar: $26/NSF $0 Café $0 $0 $401,925$4.00/hour $413,982 $5,024,058 $5,174,780 $0 $401,925

$0 $413,982 8.00% 7.00% ($17.48) ($412,933) 7.0% NA

NA NA NA NA

$0 $0

$426,402 $5,330,023 $0 $426,402

$15/Lineal Foot/month $0 $0 $0 $0 $439,194NA $452,370 $5,489,924 $5,654,622 ($169,639) $0 $0 $439,194 $5,937,353 8.00% 12.00%

$1,887,580 15.2% NA

NA NA NA NA

WATERFRONT: BUILDING 3 CF

NAIOP Real Estate Challenge Financial Underwriting Summary

Waterfront

Building 3 DESIGN ASSUMPTIONS

Space Program

Total GROSS SF Input Unit Efficiency Factor RENTABLE SF 3% 24,118 s.f.

4,078 s.f.

10,070 s.f.

9,970 s.f.

90% of GSF Average Unit SF 90% of GSF PARKING STALLS 90% of GSF 90% of GSF

154,478 Unit Value 90% 143,509

Building 1 Year 0

Building 2 w/ Parking Year 1 Year 2 Year 3

Building 3 Year 4 Year 5

Permiting & Planning Construction 19,625 84,490 24,118 2013 2014 2015 2016 2017 2018 90% 90% 90% 17,663 80,520 21,706 Restaurant: 8,438 NSF Spa: 26,010 NSF Restaurant: 9,063 NSF 0 0 NSF 0 24,1188,937NSF 24,118 Marine Retail & office: 0 Restaurant: 9,720 Casual Dining: 4,078 4,078 11,188 NSF Parking: 44,790 NSF Marine Retail: 3,670 NSF 10,070 10,070 9,970 9,970 21,706 s.f.

0 0 0 0 21,706 21,706 NA 350SF/ parking space NA 3,670 s.f.

0 0 0 0 3,670 3,670 1.69/1,000 NSF 9,063 s.f.

0 0 0 0 9,063 9,063 8,973 s.f.

0 0 0 0 8,973 8,973 Total

Discovery Center Year 6 Year 7

Operation 26,244 2019 90% 2020 23,620 Event Space: 6,900NSF 24,118 24,118 Sales Office: 3,000NSF 4,078 Café and Bar: 4,2704,078 NSF 10,070 10,50010,070 Parking: SF 9,970 9,970 21,706 21,706 350SF/ surface parking 3,670 3,670 2.29/1,000 NSF 9,063 9,063 8,973 8,973

Inflation Factor GSF Marina Retail & Office Restaurant Casual Dining Net Rentable Area @ 24,118 s.f.

NA Marina Retail & Office @ 4,078 s.f.

Restaurant @ 127 10,070 s.f.

Casual Dining @ 9,970 s.f.

COST ASSUMPTIONS Net Operating Income $52/NSF Building is used as existing $69/NSF $692,015 $63/NSF LAND VALUE DEVELOPMENT UNIT Gross PER Revenue $0 $0 $27/NSF$0 $0 $671,859 $712,775 $734,158 SITE - INFRASTRUCTURE $30.0 NA $30 $0 $30 Marina Retail & Office ( $ / SF OF SITE ) $0 $0 $0 $103,265 $106,363 $109,554$30 $112,841 BUILDING SHELL ( $ / Gross SF ) NA Building is used as existing $110K Restaurant $0 $0Spa: $250/SF $0 $0Restaurant: $306,015$185/SF $315,195 Discovery $324,651Center: $334,390 Restaurant: $185/SF Casual Dining: $160/SF for Moving Casual Dining $0 $0 $0 $0 $262,579 $270,456 $278,570 $286,927 Marina Retail: & Bar: $160/SF Rent (NNN) per s.f. $16.75 per NSF @ 21,706 s.f. $16.75 $17.26 $17.77 $18.31 $30.95$130/SF $31.88 Café $32.84 $33.82 Marina Retail & Office $25.00 perSF NSF @ NA 3,670 s.f. $26.52 $27.32Restaurant: $28.14$100/SF$28.98 $29.85 $30.75 TENANT IMPROVEMENT ($ / Net ) Building is used as$25.00 existing $25.75Spa: $100/SF Café & Bar: $90/SF Restaurant $30.00 per NSF @ 9,063 s.f. $30.00 $30.90 $33.77 $100/SF $34.78 $35.82 $36.90 Restaurant:$31.83 $100/SF $32.78 Casual Dining: Casual Dining $26.00 per NSF @ 8,973 s.f. $26.00 $26.78 $27.58 $28.41 $29.26 $80/SF $30.14 $31.05 $31.98 Marina Retail: Vacancy & Credit Loss $0 $0 $0 $0 ($128,136) $0 $0 $0 Marina Retail & Office $0 $0 $0 $0 ($51,633) $0 $0 $0 PARKING Restaurant ABOVE GRADE ($ / STALL) $15,000/ $0 $0 $0 $0 ($76,504) $0Surface Parking: $0 $0 Surface Cost: Casual Dining ($65,645) $0stall $0 $0 $10,000/stall (Parking is Vacancy & CreditBELOW Loss (%)GRADE ($ / STALL) PARKING used as existing and Marina Retail & Office 3 Month (Free Rent) 50% 0% 0% 0% covered by surface) Restaurant 3 Month (Free Rent) 25% 0% 0% 0% Casual Dining 25% Shell 0%Included Parking 0% 0% (Free Rent) costs ) NA Included Building Shell Included Building Shell Included Building Bld Cost SOFT COST 3(Month % of hard Operations & Maintenance Expenses $0 $0 $0 $0 ($31,216) ($32,153) Event ($33,118) ($34,111) BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) NA $1.15/SF Spa: $2.00/SF $1.15/SF & Sales: $6.00/SF Marina Retail & Office $0 $0 $0 $0 ($5,278) ($5,436) Café ($5,599) ($5,767) Resutaurant: $1.15/SF & Bar: $1.15/SF Restaurant $0 $0 $0 $0 ($13,034) ($13,425) ($13,828) ($14,243) Casual Dining $0 $0 $0 $0 ($12,905) ($13,292) ($13,690) ($14,101) Expense per s.f. $1.15 per GSF @ 24,118 s.f. $1.29 $1.33 $1.37 $1.41 Marina Retail & Office $1.15 per GSF @ 4,078 s.f. $1.15 $1.18 $1.22 $1.26 $1.29 $1.33 $1.37 $1.41 INCOME ASSUMPTIONS GSF @ NA 10,070 s.f. $1.18 $1.22 $1.26 $1.29 $1.41 $30/NSF $1.15 Spa: $23.5/NSF Restaurant: $30/ NSF$1.33 Event:$1.37 $550/day/space RENTALRestaurant INCOME ( $ $1.15 / Net SF per / MO ) Casual Dining $1.15 per GSF @ 9,970 s.f. $1.15 $1.18 $1.26 $1.29$26/ NSF $1.33 Café$1.37 $1.41 Marina Retail & Office: Restaurant: $1.22 $31/NSF Casual Dining: & Bar: $26/NSF Allocated Operating Cost for Open Space $0.25 per Open Space @ 36,187 s.f. $0 $0 $0 $0 ($10,182) ($10,488) ($10,802) ($11,126) $25/NSF Marina Retail: $25/NSF Net Operating Income $0 $0 $0 $0 $502,324 $649,374 $668,855 $688,921 NA NA $140/stall/ mo NA $4.00/hour Development Costs PARKING INCOME ( $ / SF / MO ) Percent Built by year 16.6% 5.8%$4.00/hour 39.1% 38.4% 0.0% 0.0% 0.0% 0.0% Demolishment Cost $30.00 12,036 s.f. ($361,077) ($361,077) per Existing Building SF @ VALUE ASSUMPTION Land $23.38 per s.f. @ 29,600 s.f. ($691,903) ($691,903) Discountper Rate 8.00% 8.00% 8.00% Land Cost of Open Space $22.06 s.f. @ NA 36,187 s.f. ($798,300) 8.00% ($798,300) Exit Capitalization Rate 7.00% 7.00% 7.00% Site - Infrastructure $30.00 per s.f. @ NA 29,600 s.f. ($888,000) 7.00% ($888,000) NET PRESENT VALUE ( $ / NSF ) ($40.46) ($71.62) ($17.48) Building Shell (Includes Soft Cost) $165.37 per GSF @ 24,118 s.f. ($3,988,261) $1.77 $0 $0 ($71.51) ($2,392,957) ($1,595,304) $0 $0 $0 $0 $ ($5,806,561) ($5,757,870) ($412,933) Marina Retail & Office VALUE $130.00TOTAL per GSF @ 4,078 s.f. ($530,111) $31,346 ($318,067) ($212,044) ($1,554,684) Unleveraged Before per Taxes 4.3% 4.9% 7.0% Restaurant IRR $185.00 GSF @ 6.4% 10,070 s.f. ($1,862,950) 8.1% ($1,117,770) ($745,180) Leveraged Before per Taxes NA NA NA NA Casual Dining IRR$160.00 GSF @ 8.7%9,970 s.f. ($1,595,200) ($957,120) ($638,080) Tenant Improvement $92.48 per NSF @ 21,706 s.f. ($2,007,470) $0 $0 $0 ($2,007,470) $0 $0 $0 $0 DEBT ASSUMPTIONS Marina Retail & Office $80.00 per NSF @ 3,670 s.f. ($293,600) ($293,600) TO VALUE NA NA NA NA Restaurant LOAN $100.00 per NSF @ 65%9,063 s.f. ($906,300) ($906,300) Average DEBT SERVICE$90.00 COVERAGE NA NA NA NA Casual Dining per NSF @1.908,973 s.f. ($807,570) ($807,570) TOTAL DEBT $32,880,848 NA($250,000) ($250,000) NA NA NA Other Fees (Permitting, Consultant) ($500,000) NET EQUITY During Development Land) NA NA NA NA WST 9.5%(Inclu per @ $6,883,731 ($653,954) ($311,691) ($342,264) Construction Cost$17,500,000 Allocated Development Cost of Open Space $16.21 per Open Space @ 36,187 s.f. ($586,753) $0 $0 ($506,620) ($80,133) Total Development Costs ($1,740,202) ($611,077) ($4,099,267) ($4,025,171) $0 $0 $0 $0 ($10,475,718)

Marina Year 9

Year 8

Year 10

NA 2022 2023 NA NA 81 Deck (4,806 Lineal Foot) 24,118 24,118 24,118 4,078 4,078 4,078 10,070 10,070 10,070 9,970 9,970 9,970 21,706 21,706 21,706 NA 3,670 3,670 3,670 NA 9,063 9,063 9,063 8,973 8,973 8,973

2021

NA $756,183 $778,869 $802,235 NA $116,226 $119,713 $123,304 Marina is used as existing $344,422 $354,755 $365,397 $295,535 $304,401 $313,533 $34.84 $35.88 $36.96 $31.67 $32.62 $33.60 Marina is used as existing $38.00 $39.14 $40.32 $32.94 $33.92 $34.94 $0 ($118,617) ($24,435) $0 ($29,928) ($6,165) $0 ($88,689) ($18,270) $0 ($76,100) ($15,677) NA 0% 25% 5% 0% 25% 5% 0% 5% NA 25% ($35,134) ($36,188) 20% Gross Revenue($37,274) ($5,940) ($6,119) ($6,302) ($14,670) ($15,110) ($15,563) ($14,524) ($14,960) ($15,409) $1.46 $1.50 $1.55 $1.46 $1.50 $1.55 $1.46 $1.50 $1.55 $15/Lineal Foot/month $1.46 $1.50 $1.55 ($11,460) ($11,804) ($12,158) $709,589 $612,259 $728,367 NA 0.0% 0.0% 0.0% 8.00% 12.00% $0 $0 $1,887,580 15.2% NA $0 $0

$0

$0

NA NA NA NA

$0

$0

$0

WATERFRONT: MARINA CF

NAIOP Real Estate Challenge Financial Underwriting Summary

Waterfront

Marina DESIGN ASSUMPTIONS Space Program

Net Operating Income

Inflation Factor Total Deck Chandler's Cove H.C. Henry Pier

Total GROSS SF Input Unit Efficiency Factor RENTABLE SF 3% 72 Deck 20 Deck 52 Deck

154,478 Unit Value 90% 143,509 Total Lineal Foot Total Lineal Foot Total Lineal Foot

Building 1 Year 0

Year 1

Building 2 w/ Parking Year 2 Year 3

Permiting & Planning Construction 19,625 84,490 24,118 2013 2014 2015 2016 2017 2018 90% 90% 90% 17,663 80,520 21,706 Restaurant: 8,438 NSF Spa: 26,010 NSF Restaurant: 9,063 NSF 4,400 LF 4,400 4,400 4,400 4,400 4,400 4,400 Marine Retail & office: Restaurant: 9,720 NSF Casual Dining: 8,937NSF 1,743 LF 1,743 1,743 1,743 1,743 1,743 1,743 11,188 44,790 NSF2,657 Marine2,657 Retail: 3,670 NSF 2,657 LFNSF 2,657 2,657Parking:2,657 2,657 Total

Gross Revenue $792,000 $815,760 $840,233 $865,440 SFLineal Foot @NA 4,400 LF NA$15.00 parking space Rent per Lineal Foot "LF", per month Average $15.00 Unitper 12 month $15.45350SF/ $15.91 $16.39 Vacancy & Credit LossPARKING STALLS ($55,440) ($57,103) 1.69/1,000 ($58,816) NSF($60,581) 127 Vacancy & Credit Loss (%) 7% 7% 7% 7% Operations & Maintenance Expenses ($158,400) ($163,152) ($168,047) ($173,088) COST ASSUMPTIONS Expense Ratio (%) 20% 20% 20% 20% per Gross Revenue $52/NSF Building is used as existing 20% $27/NSF LAND VALUE PER DEVELOPMENT UNIT Ground Lease ($122,623) ($126,301) ($130,090) ($133,993) SITE - INFRASTRUCTURE ( $ / SF OF SITE ) $30.0 NA $30 Ground Lease 1 $104,188.17 ($107,314) ($110,533) Spa: ($113,849) BUILDING SHELL ( $ / Gross SF ) NA Building is used as existing $250/SF($117,265) Ground Lease 2 $14,862.96 ($15,309) ($15,768) ($16,241)$185/SF ($16,728) Restaurant: Net Operating Income $455,537 $469,203 $483,280 $497,778 Annual Cash Flow TENANT IMPROVEMENT ($ / Net SF ) NA Building is* used as existing $100/SF$497,778 Net Operating Income $469,203 Spa: $483,280 Asset Value 12.0% (Cap Rate) $3,796,144 $3,910,029Restaurant: $4,027,330$100/SF $4,148,150 Transaction Cost 3.0% Total Development Costs ($3,796,144) ($3,796,144) $0 $0 $0 Net Cash Flow ($3,796,144) $469,203 $483,280 $497,778 PARKING ABOVE GRADE 8% ($ / STALL) Net Present Value $1,887,580 Surface Cost: Unleveraged IRR Before Taxes 15.2% $10,000/stall (Parking is PARKING BELOW Cash Flow from Chandler's Cove GRADE ($ / STALL) ($1,503,791) $185,869used $191,445 $197,188 as existing and Cash Flow from H.C. Henry Pier ($2,292,354) $283,335 $291,835 $300,590 covered by surface) * 1: In Year 0, project can not generate cash flow.

NA Included Building Shell Included Building Shell SOFT COST ( % of hard costs ) BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) NA $1.15/SF Spa: $2.00/SF Resutaurant: $1.15/SF Financing Summary during construction term (2013 - 2016)

Use Land/ Property Value $17,500,000 INCOME (ExistingASSUMPTIONS Retail) $6,185,537 RENTAL INCOME ( $ / Net SF / MO ) (Marina) $3,796,144 (Remained Land Value) $7,518,318 Development Cost $34,006,060 PARKING INCOME ( $ / SF / MO ) Interest $1,878,178 Total $53,384,238 VALUE ASSUMPTION Discount Rate Exit Capitalization Rate Initial Value NET PRESENT VALUE ( $ / NSF ) VALUE TOTAL $ Site Unleveraged IRR$17,500,000 Before Taxes Leveraged IRR Before Taxes $6,185,537

Source Equity (Land/ Property Contribution) $17,500,000 Debt $32,880,848 $30/NSF Spa: $23.5/NSF NA NOI from existing properties Marina Retail & Office: $2,828,732 Restaurant: $31/NSF $25/NSF (Existing Retail) $1,378,471 (Marina) $1,450,261 NA NA $140/stall/ mo $4.00/hour NOI from H.C. Henry Pier $174,657 Total $53,384,238 NA NA Expected NOI in 2013 ($40.46) ($5,806,561) 6.4% 8.7%$432,988

Waterfront Building 1 Marina $3,796,144 $455,537 DEBT ASSUMPTIONS Land for Redvelopment $2,240,373 LOAN TO VALUE 65% Land for Open Space $5,277,945 Average DEBT SERVICE COVERAGE 1.90 TOTAL DEBT $32,880,848 * Land Value = $17.5 million - Marina Value $3.8 million NET EQUITY During Development (Inclu Land)

$17,500,000

Building 3 Year 4 Year 5

Cap

8.00% 7.00% Rate$1.77 Land $31,346 8.1% NA 7%

Value

8.00% 7.00% per SF*($71.51) ($5,757,870) $41.18 4.3% NA

Year 6

Discovery Center Year 7 Year 8

Year 9

Marina Year 10

Operation 26,244 NA 2020 2021 2022 2023 90% NA 23,620 NA Event Space: 6,900NSF 81 Deck (4,806 Lineal Foot) 4,400 4,400 4,400 4,400 4,400 Sales Office: 3,000NSF 1,743 1,743 1,743 1,743 1,743 Café 4,270 NSF2,657 2,657and Bar:2,657 2,657 2,657 Parking: 10,500 SF

2019

$891,403 $918,145 $945,689 $974,060 $1,003,282 $1,033,380 $1,064,382 350SF/ surface $16.88 NA $17.39 $17.91 $18.45parking$19.00 $19.57 NA $20.16 2.29/1,000 NSF ($70,230) ($62,398) ($64,270) ($66,198) ($68,184) ($72,337)NA ($74,507) 7% 7% 7% 7% 7% 7% 7% ($178,281) ($183,629) ($189,138) ($194,812) ($200,656) ($206,676) ($212,876) 20% 20% $63/NSF 20% 20% 20%NA 20% $69/NSF 20% ($138,013)$30($142,153) ($146,418) ($150,810) ($155,335) ($159,995)NA ($164,795) $30 ($120,783) ($124,406) ($135,942) Marina ($140,020) Restaurant: $185/SF ($128,138) Discovery($131,982) Center: $110K is used ($144,221) as existing ($17,230) ($19,393) ($19,975) ($20,574) Casual Dining:($17,747) $160/SF ($18,280) for($18,828) Moving $512,711 $577,061 $594,373 $612,204 Marina Retail:$528,093 $130/SF $543,935 Café & $560,253 Bar: $160/SF

Restaurant: $100/SF Café & $560,253 Bar: $90/SF$577,061 Marina is used $612,204 as existing $512,711 $528,093 $543,935 $594,373 Casual Dining: $100/SF $4,532,795 $4,668,779 $4,808,842 $4,953,108 $5,101,701 $4,272,594 $4,400,772 Marina Retail: $80/SF ($153,051) $0 $0 $0 $0 $0 $0 $0 $512,711 $528,093 $543,935 $560,253 $577,061 $594,373 $5,560,854 Surface Parking: $15,000/ stall $203,104 $209,197 $215,473 $221,937 $228,595 $235,453NA$2,202,856 $309,608 $318,896 $328,463 $338,317 $348,466 $358,920 $3,357,997 Included Building Shell $1.15/SF

Included Parking Bld Cost Event & Sales: $6.00/SF Café & Bar: $1.15/SF

NA 20% Gross Revenue

Restaurant: $30/ NSF Casual Dining: $26/ NSF Marina Retail: $25/NSF

Event: $550/day/space Café & Bar: $26/NSF

$15/Lineal Foot/month

NA

$4.00/hour

NA

8.00% 7.00% ($71.62) ($1,554,684) 4.9% NA

8.00% 7.00% ($17.48) ($412,933) 7.0% NA

8.00% 12.00%

$1,887,580 15.2% NA

NA NA NA NA

NA NA NA NA

NA NA NA NA

WATERFRONT: FINANCING SUMMARY 2013-16

WATERFRONT: LAND VALUE

12% NA NA NA NA

$23.38 $23.38

NA NA NA NA

Appendix: Block 25

BLOCK 25 Key Assumptions for Block 25: The cost of Open Space has been distributed proportinally to the various income producing uses There are three packages to consider towards disposition: Package#1: Condominium Tower Package#2: Hotel Package#3: Retail + Parking The Land Value for Block 25 is proportionaly distributed to each use according to its GSF portion over the overall GSF The Cash contribution needed for Hotel in 2017 will come from the condominium profits in that same year

NAIOP Real Estate Challenge Financial Underwriting Summary

BLOCK 25 KEY ASSUMPTIONS

Block 25

DESIGN ASSUMPTIONS

GROSS SF Efficiency Factor RENTABLE SF Average Unit SF PARKING STALLS

COST ASSUMPTIONS LAND VALUE PER DEVELOPMENT UNIT SITE - INFRASTRUCTURE ( $ / SF OF SITE ) HARD COSTS + SOFT COSTS ( $ / Gross SF )

TENANT IMPROVEMENT ($ / Net SF )

PARKING ABOVE GRADE ($ / STALL) PARKING BELOW GRADE ($ / STALL) BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR )

Total

Condominium

Hotel

553,284 81% 446,565 NA 437

220,500 80% 176,400 1,200 1 per Unit

116,000 65% 67,400 400 50% of Occupancy

$86,089/Unit $30 $460

$37,937/Unit $30 $240

$51/NSF $30 General: $220/SF Restaurant: $220/SF Gym: $180/SF Movie: $180/SF

$23/NSF $30 See Below Parking Cost

NA $0 NA

Included Building Shell

Included Building Shell

General: $100/SF Restaurant: $100/SF Gym: $80/SF Movie: $80/SF

Included Parking Bld Cost

NA

10% Gross Revenue

NA

See below Parking Income

NA NA

$45/NSF NA

NA

NA

$30

Cost of Sales: 3% of sales revenue

Retail

Retail Parking

Open Space

55,600 161,184 0 89% 95% 100% 49,640 153,125 0 NA 350 NA NA Total 208 lots, (3.2 per 1,000 SF) Exclude: For sale and hotel gurst spaces

$20,000 / Stall (350 SF per stall) $35,000 / Stall (350 SF per stall) Expense Rate: 80% of General: $1.15/SF total revenue Restaurant: $1.15/SF Gym: $2.0/SF Movie: $2.0/SF Upscale/Luxyry

INCOME ASSUMPTIONS RENTAL INCOME ( $ / Net SF / MO )

SALE INCOME ( $ / USABLE SF ) PARKING INCOME ( $ / SF / MO ) VALUE ASSUMPTION

DEBT ASSUMPTIONS

NA NA NA

NA $1,200k/Unit $50k/Unit

NA

General: $30/SF Restaurant: $34/SF Gym: $28/SF Movie: $25/SF Rev PAR$165 $25k/Unit

See Parking Section

Monthly Parking Fee: $150 Hourly Parking Rate: $5.0

8.00% 8.00%

NA NA NA NA NA NA

21% 17.75 $2,414,893 $8,479,439

NA NA NA NA

Discount Rate Exit Capitalization Rate VALUE per NSF ( NPV / NSF ) NPV Unleveraged IRR Before Taxes Leveraged IRR Before Taxes

8.00% NA $99.5 $44,432,338 0.0% 16.9%

8.00% NA $104.2 $18,372,145 12.7% 18.0%

8.00% 6.00% $232.0 $15,637,270 11.1% 17.2%

7.00% 6.00%

LOAN TO VALUE Average DEBT SERVICE COVERAGE TOTAL DEBT TOTAL EQUITY(Inclu Land)

67% 8.06 $151,968,399 $75,925,070

65% 0.00 $108,151,924 $38,202,431

54% 2.79 $28,066,740 $20,179,807

45% 2.17 $13,334,842 $9,063,394

Hard Cost + Soft Cost Notes Excludes 9.5% Washington State Sales Tax Assumes 2013 pricing Construction Costs assume Leed Silver certification Included 10% contingency

$85.2 $10,422,922 14.1% 17.2%

NA

NAIOP Real Estate Challenge Financial Underwriting Summary

BLOCK 25 SUMMARY

Block 25

1. Space Summary

DESIGN ASSUMPTIONS Land value distribution

GROSS SF Stories Factor Condominium 28,815.28Efficiency (sf.)

21 SF Retail 7,266 RENTABLE (sf.)

Average Unit SF 2,901 (sf.)

General PARKING STALLS 1,359 (sf.)

Restaurant 1,960 (sf.)

2 Gym COST ASSUMPTIONS 1,045 (sf.)

2 Movie Theater LAND VALUE PER DEVELOPMENT UNIT Hotel 15,159 (sf.)

SITE - INFRASTRUCTURE ( $ / SF OF SITE ) Total Parking HARD COSTS + SOFT21,063.77 (sf.)

COSTS ( $ / Gross SF ) Broken down per type: Above ground Below ground Broken down per use: Parking for Condominium Tower 7,785 (sf.)($ / Net SF ) TENANT IMPROVEMENT Parking for Hotel 3,274 (sf.)

Parking for Retail 10,004.68 (sf.)

Open Space (sf.)

Total 72,304 (sf.)

Total

PARKING ABOVE GRADE ($ / STALL) PARKING BELOW GRADE ($ / STALL) 2. Summary Proforma BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) Year 0 2013 Gross Income Rent/ Sales $396,753,016 Condominium Retail INCOME ASSUMPTIONS General RENTAL INCOME ( $ / Net SF / MO ) Restaurant Gym Movie Theater Hotel SALE INCOME ( $ / USABLE SF ) Parking PARKING INCOME ( $ / SF / MO ) Vacancy & Credit Loss ($8,792,899) Total Vacancy & Credit Loss(%) VALUE Retail ASSUMPTION Discount Rate General Exit Capitalization Rate Restaurant VALUE per NSF ( NPV / NSF ) Gym NPV Movie Theater Unleveraged IRR Before Taxes Hotel Leveraged IRR Before Taxes Parking Effective Gross Income $387,960,117 DEBT ASSUMPTIONS Operating Cost ($137,086,953) LOAN TO VALUE Condominium (Sales cost) Average DEBT SERVICE COVERAGE Retail TOTAL DEBT General TOTAL EQUITY(Inclu Land) Gym Restaurant Movie Theater Hard Hotel Cost + Soft Cost Notes Excludes 9.5% Washington State Sales Tax Parking Assumes Open Space2013 pricing Construction Costs assume Leed Silver certification NOI $250,873,164 Included 10% contingency

Total

Building Summary 553,284 Total SF 81% (sf.)

220,500 446,565 55,600 (sf.)

Condominium 220,500 Efficiency Factor

NA 22,200 (sf.)

437 10,400 (sf.)

80% 80% 176,400 89% 1,200 90% 1 per Unit

15,000 (sf.)

90%

90%

8,000 (sf.)

$45/NSF 116,000 161,184

NA

85%

(sf.) $30 (sf.)

$86,089/Unit 65% $30 $460

89,184 (sf.)

72,000 (sf.)

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

95% 95%

59,574 NA (sf.)

25,053 (sf.)

76,558 (sf.) (sf.)

553,284 (sf.)

95%Shell Included Building

NA Year 1 2014

Cost of Sales: 3% of sales Year 2 revenue Year 3 2015 2016

NA NA NA

95% 95% 100%

Total

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 8.00% NA $0 $0 $99.5 $0$44,432,338 0.0% $0 16.9%

$0 $0 $0 $0 $0 $0

$0 $0 67% $0 8.06 $0 $0$151,968,399 $0$75,925,070 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 NA $0 $1,200k/Unit $0 $50k/Unit $0

Hotel

NSF

Retail

Retail Parking

Open Space

Space

161,184 0 Cost NSF 116,000 Avg. unit space sf 55,600 Number of Units Unit Cost Total 65% 100% 176,400 (sf.)

1,200 (sf./unit) 89% 147 (unit)95% ($957,108) (per unit) ($140,694,854) 49,640 153,125 0 49,640 67,400 (sf.)

1,379 (sf./per store) 36 (stores) ($391) (per sf.) ($21,716,382) 400 NA 350 NA 19,980 (sf.)

650 (sf./per store) 30 (stores) (per sf.)

50% of Occupancy NA Total 208 lots, (3.2 per 1,000 SF) 9,360 (sf.)

2,340 (sf./store) 4 (stores) (per sf.)

Exclude: 13,500 (sf.)

13,500 1 For sale and hotel gurst spaces 6,800 (sf.)

6,000 (sf./screen) 1 (screen) (per sf.) $51/NSF $23/NSF NA 67,400$37,937/Unit (sf.)

400 (sf./room) 168 (room) ($247,995) (per room) ($41,663,188) $30 $240

84,725 (sf.)

68,400 (sf.)

56,595 (sf.)

Included Building Shell

23,800 72,730 446,565

(sf.) (sf.) (sf.) (sf.)

-

$30 General: $220/SF Restaurant: $220/SF 350 (sf/stall) Gym: $180/SF 350 (sf/stall) Movie: $180/SF

$30 See Below Parking Cost

350 (sf/stall) General: $100/SF $100/SF 350 Restaurant: (sf/stall) Gym: $80/SF 350 (sf/stall) - Movie: $80/SF-

162 (stalls) Included Parking Bld Cost

242 (stalls) 195 (stalls)

$0 NA

($20,000) (per stall) ($35,000) (per stall)

68 (stalls) 208 (stalls) -

$20,000 / Stall (350 SF per stall) $35,000 / Stall (350 SF per stall) Expense Rate: 80% of General: $1.15/SF 10% Gross Revenue Year 4revenue Year 5 Restaurant: Year 6 $1.15/SF Year 7 Year 8 total 2017 2018 2019 2020 2021 Gym: $2.0/SF Movie: $2.0/SF

$0 $149,173,194 $84,683,572 $47,433,372 $27,271,513 $28,307,530 Upscale/Luxyry $0 $125,910,671 $59,370,590 $21,159,566 $0 $0 $0 $1,647,570 $1,696,997 $1,747,907 $1,800,344 $1,854,354 $0 $669,237 $689,314 General: $709,994 $731,294 $753,232 $30/SF $0 $355,319 $365,978Restaurant: $376,958 $388,266 $399,914 $34/SF $28/SF $0 $422,042 $434,703 Gym:$447,744 $461,176 $475,011 $25/SF $0 $200,972 $207,001 Movie: $213,211 $219,608 $226,196 See below Parking Income NA $0 $19,368,722 $20,143,471 $20,949,210 $21,787,178 $22,658,666 Rev PAR$165 $0 $2,246,231 $3,472,514 $3,576,690 $3,683,990 $3,794,510 Monthly Parking Fee: $150 $25k/Unit $0 ($6,130,675) ($1,991,596)See Parking ($14,172) ($14,738) Hourly Parking ($15,328) Rate: $5.0 Section -4% -2% 0% 0% 0% $0 $0 ($411,892) $0 $0 $0 $0 8.00% 8.00% 7.00% $0 8.00% $0 $0 ($167,309) $0 $0 $0 6.00% 6.00% $0 8.00% $0NA $0 ($88,830) $0 $0 $0 $104.2 $232.0 $85.2 $0 $0 $0 ($105,510) $0 $0 $0 $18,372,145 $15,637,270 $0 $0 ($50,243) $0 $0 $10,422,922$0 $0 12.7% 11.1% 14.1% $0 $0 ($5,718,783) ($1,991,596) ($14,172) ($14,738) ($15,328) 18.0% 17.2% Included in revenue 17.2% $0 $0 $143,042,519 $82,691,976 $47,419,201 $27,256,774 $28,292,202 ($3,777,320) ($1,781,118) ($17,243,290) ($17,260,753) ($17,938,731) ($18,643,454) ($19,375,981) 65% ($1,781,118) 54% 45% $0 21% ($3,777,320) ($634,787) $0 $0 $0 0.00 2.79 2.17 $0 $0 ($93,969) ($96,788) ($99,691) ($102,682) 17.75 ($105,763) $108,151,924 $28,066,740 $0 $0 ($28,734) ($29,596) $13,334,842 ($30,484) ($31,399) $2,414,893 ($32,341) $38,202,431 $20,179,807 $9,063,394 $0 $0 ($13,461) ($13,865) ($14,281) ($14,709) $8,479,439 ($15,151) $0 $0 ($33,765) ($34,778) ($35,822) ($36,896) ($38,003) $0 $0 ($18,008) ($18,548) ($19,105) ($19,678) ($20,268) $0 $0 ($15,399,522) ($16,015,503) ($16,656,123) ($17,322,368) ($18,015,262) $0 $0 ($1,115,012) ($1,148,462) ($1,182,916) ($1,218,404) ($1,254,956) $0 $0 $0 $0 $0 $0 $0 ($3,777,320) ($1,781,118) $125,799,229 $65,431,223 $29,480,470 $8,613,321 $8,916,221

NA ($5,659,500)

($1,865,929) ($10,728,248)

(sf.) ($222,328,101) Year 9 2022

NA

Year 10 2023

$29,383,343 $0 $1,909,985 $775,829 $411,912 $489,262 $232,982 $23,565,012 $3,908,346 ($609,812) -2% ($593,871) ($387,915) ($205,956) $0 $0 ($15,941)

$30,500,493 $0 $1,967,284 $799,104 $424,269 $503,940 $239,971 NA $24,507,613 NA $4,025,596 NA ($16,579) 0% $0 NA $0 NA $0 NA $0 NA $0 NA ($16,579) NA

$28,773,531 ($20,137,413) $0 ($108,936) ($33,311) ($15,605) ($39,143) ($20,876) ($18,735,873) ($1,292,605) $0 $8,636,118

$30,483,914 ($20,928,894) NA $0 NA ($112,204) NA ($34,310) NA ($16,073) ($40,317) ($21,503) ($19,485,308) ($1,331,383) $0 $9,555,020

NAIOP Real Estate Challenge Financial Underwriting Summary

BLOCK 25 SUMMARY

Block 25

3. Development Program Total Condominium Hotel Retail Retail Parking Open Space Land Cost ($25,000,000) DESIGN ASSUMPTIONS Development Cost ($222,328,101) ($47,984,209) ($23,889,005) ($75,397,713) ($75,057,175) $0 $0 $0 $0 $0 $0 $0 GROSS SF($25,116,819) 553,284 220,500 ($54,769,203) 116,000$0 Condominium ($146,354,354) ($13,085,612) ($53,382,721) $0 55,600 $0 $0161,184 $0 $0 0 $0 Efficiency Factor ($5,392,889) 81% ($2,880,617) 80% 65% $0 89% 100% Retail ($21,716,382) ($6,721,439) ($6,721,439) $0 $0 $0 95% $0 $0 $0 RENTABLE 446,565($5,375,581) 176,400 ($13,566,534) 67,400 $0 Hotel ($43,529,116)SF($11,542,256) ($13,044,744) $0 49,640 $0 $0153,125 $0 $0 0 $0 Average Unit SF ($5,932,245) NA ($2,547,195) 1,200 400 $0 NA Parking ($10,728,248) ($2,248,809) $0 $0 $0 $0 350 $0 $0NA $0 PARKING STALLS 1 per$0 Unit Total 208 Open Space $0 $0 437 $0 $0 50% of Occupancy $0 $0 $0lots, (3.2 per 1,000 $0 SF) $0 $0NA $0 Exclude:$0For sale and hotel Total Cost ($222,328,101) ($47,984,209) ($23,889,005) ($75,397,713) ($75,057,175) $0 $0 $0 $0 gurst spaces$0 $0 COST ASSUMPTIONS $45/NSF $86,089/Unit $37,937/Unit $51/NSF $23/NSF NA 4. Source/ Financial LAND VALUE PER DEVELOPMENT UNIT SITE - INFRASTRUCTURE ( $($133,471,905) / SF OF SITE ) $30 $30 $30 $30 $0 ($2,361,067) Debt/ Service $0 $0 ($769,822) ($1,533,577) ($117,002,106) ($2,361,067) ($2,361,067) ($2,361,067) $30 ($2,361,067) ($2,361,067) HARD COSTS + SOFT COSTS ($112,431,846) ( $ / Gross SF ) $460 $240 General:($588,978) $220/SF See Below Parking Cost NA ($677,348) Principal Repayment $0 NA $0 $0 $0 ($108,701,139) ($568,750) ($609,926) ($631,620) ($654,084) Restaurant: $220/SF Principal Repayment at exit ($39,536,553) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($39,536,553) Equity (Cash + Land) $75,925,070 $47,984,209 $23,889,005 $789,889 $0 $3,261,969 $0Gym: $180/SF $0 $0 $0 $0 $0 Movie: $180/SF (Cash Contribution) $50,925,070 $22,984,209 $23,889,005 $789,889 $0 $3,261,969 $0 $0 $0 $0 $0 $0 Debt $151,968,399 $0 $0 $75,377,647 $76,590,752 $0 $0 $0 $0 $0 $0 $0 TENANT IMPROVEMENT$75,925,070 ($ / Net SF )$47,984,209 NA $71,873,213 Included Building Shell Included Building Shell$75,925,070 General: $100/SF Included Parking Bld Cost Equity Amount $72,663,102 $72,663,102 $75,925,070 $75,925,070 $37,722,640 $37,722,640 $37,722,640NA $37,722,640 Restaurant: $100/SF Debt Amount $151,968,399 $0 $0 $75,377,647 $151,968,399 $43,267,259 $42,698,510 $42,109,531 $41,499,605 $40,867,985 $40,213,901 $39,536,553 Gym: $80/SF Present Value/ Project Cost $222,328,101 $222,328,101 $222,328,101 $110,509,048 $128,707,684 $133,282,067 $138,022,208 $133,036,376 $148,024,446 Movie: $80/SF LTC/ LTV 34% 68% 19% 39% 33% 31% 30% 30% 27% DSCR 1.08 27.71 12.49 3.65 3.78 3.66 4.05 PARKING ABOVE GRADE ($ / STALL) $20,000 / Stall (350 SF per stall) Sales Proceeds $148,024,446 PARKING BELOW GRADE ($ / STALL) $35,000 / Stall (350 SF per stall) Transaction BASE YR.Cost OPERATING EXPENSES ( $ / Gross SF / YR ) NA Cost of Sales: 3% of sales Expense Rate: 80% of General: $1.15/SF 10% Gross Revenue NA ($8,612,172) Net Sales Proceeds $139,412,274 revenue total revenue Restaurant: $1.15/SF Net Sales Proceeds for Equity Participation $99,875,722 Gym: $2.0/SF 5. Return/ Cash Flow Block 25 Cash Flow ($47,984,209) ($23,889,005) Equity Cash Flow ($47,984,209) ($23,889,005) Cumulative Total Benefit ($47,984,209) ($71,873,213) INCOME ASSUMPTIONS Net Present Value 8%INCOME ( $ / Net $36,813,808 RENTAL SF / MO ) Cash on Cash Return per year Cash on Cash Return on $146,133,533 Project 192.47% Project IRR (Unleveraged) 12.5% Project IRR (Leveraged) 16.9% NA SALE INCOME ( $ / USABLE SF ) NA PARKING INCOME ( $ / SF / MO ) NA 2013 2014 Sources VALUE ASSUMPTION Equity Discount Rate 8.00% Land $0 Exit Capitalization Rate$25,000,000 NA Cash( NPV / NSF ) $22,984,209 $99.5$23,889,005 VALUE per NSF Debt $0 $0 NPV $44,432,338 NOI IRR Before Taxes $0 0.0% $0 Unleveraged Leveraged SaleIRR Before Taxes $0 16.9% $0 TOTAL $47,984,209 $23,889,005 Uses DEBT ASSUMPTIONS Development Cost LOAN TO VALUE$47,984,209 67% $23,889,005 Debt Service $0 8.06 $0 Average DEBT SERVICE COVERAGE Principal TOTAL Repayment $0 $0 DEBT $151,968,399 on Equity Land) $0 $0 TOTALReturn EQUITY(Inclu $75,925,070 TOTAL $47,984,209 $23,889,005 Hard Cost + Soft Cost Notes Excludes 9.5% Washington State Sales Tax Assumes 2013 pricing Construction Costs assume Leed Silver certification Included 10% contingency

Movie: $2.0/SF

($79,175,033) ($789,889) ($72,663,102)

($76,838,293) Upscale/Luxyry $125,799,229 $0 $5,156,051 ($72,663,102) ($67,507,051) 6.8%

NA $1,200k/Unit $50k/Unit

2015

NA

2016

Rev PAR$165 $25k/Unit

2017

$65,431,223 $29,480,470 $61,003,832 $26,484,616 ($6,503,218) $19,981,398 General: $30/SF 80.3% 34.9% Restaurant: $34/SF Gym: $28/SF Movie: $25/SF

See Parking Section 2018 2019

8.00% $0 $0 NA $789,889 $0 $104.2 $75,377,647 $18,372,145 $76,590,752 $0 $0 12.7% 18.0% $0 $0 $76,167,535 $76,590,752

8.00% 6.00% $0 $232.0$0 $0 $15,637,270 $523,346 11.1% 17.2% $118,380,518 $122,158,156

$0 $0 $0 $6,060,634 $57,304,265 $63,364,899

$75,397,713 $75,057,175 65% $769,822 $1,533,577 0.00 $0 $0 $108,151,924 $0 $0 $38,202,431 $76,167,535 $76,590,752

54% $0 $8,850,182 2.79 $108,151,924 $28,066,740 $5,163,727 $20,179,807 $122,165,833

$0 $0 45% $2,361,067 $2,361,067 2.17 $0 $13,334,842$0 $61,003,832 $9,063,394 $26,484,616 $63,364,899 $28,845,683

$8,613,321 $6,252,254 $26,233,652

$8,916,221 $6,555,154 $32,788,806

8.2%

8.6%

$8,636,118 $148,967,294 $6,275,051 $107,069,675 $39,063,858 $146,133,533 8.3%

See below Parking Income Monthly Parking Fee: $150 Hourly Parking Rate: $5.0 2020 2021

7.00% 6.00%

8.00% $0 $0 8.00% $0 $0 $0 $0 $85.2 $0 $10,422,922 $0 $0 $8,320,904 14.1% $8,613,321 $8,916,221 $20,524,779 17.2% $0 $0 $28,845,683 $8,613,321 $8,916,221

$0 21% $0 $2,361,067 17.75 $2,361,067 $0 $0 $2,414,893 $6,252,254 $6,555,154 $8,479,439 $8,613,321 $8,916,221

141.0%

NA NA

2022

NA

2023

NA $0NA $0 $0NA $0 $0NA $0 $8,636,118NA $9,555,020 $0NA$139,412,274 $8,636,118 $148,967,294

$0NA $0 $2,361,067NA $2,361,067 $0NA $39,536,553 $6,275,051NA$107,069,675 $8,636,118 $148,967,294

NAIOP Real Estate Challenge Financial Underwriting Summary

BLOCK 25 CONDOMINIUM TOWER

Block 25

CONDOMINIUMS TOWER

Total

DESIGN ASSUMPTIONS

GROSS SF Efficiency Factor RENTABLE SF Unit Value Input Unit Average Unit SF Assumptions PARKING STALLS Avg Inflation Factor 3% Number of Condominium Units 147 COST ASSUMPTIONS Floor Plate SF LAND VALUE PER 10,500 DEVELOPMENT UNIT SITE - INFRASTRUCTURE Total SF 220,500( $ / SF OF SITE ) # Stories HARD COSTS + SOFT COSTS 21 ( $ / Gross SF ) Average Unit Size 1,200 Net Usable Area 176,400 Efficiency Factor 80% Average Sale price per unitTENANT IMPROVEMENT 1,200,000 ($ / Net SF ) Sale Price per SF $1,000 Parking units 162 110% Parking Unit Price $50,000

553,284 81% 446,565 Total NA 437

$45/NSF NA

Projected Parking Unit Sales Condominium Unit Sale Revenues Parlking Units Sale Revenues Marketing and Legal Allow HOA $1 SF/Year INCOME ASSUMPTIONS Cost of Sales 3% RENTAL INCOME ( $ / Net SF / MO ) Income Development Costs Built per year %

NA

Equity (Cash + Land)

35%

Retail Retail Parking Open Space Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 55,600 161,184 0 89% 95% 100% Operation 49,640 153,125 0 2017 2018 2019 2020 2021 2022 2023 NA 350 NA NA Total 208 lots, (3.2 per 1,000 SF) Exclude: For sale and hotel gurst spaces

$37,937/Unit $30 $240

$51/NSF $30 General: $220/SF Restaurant: $220/SF Gym: $180/SF Movie: $180/SF

$23/NSF $30 See Below Parking Cost

NA $0 NA

Included Building Shell

Included Building Shell

General: $100/SF Restaurant: $100/SF Gym: $80/SF Movie: $80/SF

Included Parking Bld Cost

NA

$20,000 / Stall (350 SF per stall) $35,000 / Stall (350 SF per stall) (30% Presales) 61% 29% 10% Cost of Sales: 3% of sales Expense Rate: 80% of General: $1.15/SF 10% Gross Revenue 89 42 15 0 revenue total revenue Restaurant: $1.15/SF 99 47 16 0 Gym: $2.0/SF Movie: $2.0/SF $56,725,644 $120,339,402 $20,259,159 $0 $5,571,269 $2,644,946 $900,407 $0 Upscale/Luxyry ($300,000) ($200,000) ($198,540) ($85,207) ($3,777,320) ($1,781,118) ($634,787) $0 General: $30/SF $ $ $ $ $121,634,811 $57,304,265 $20,524,779 $0 Restaurant: $34/SF Gym: $28/SF 10% 10% 40% 40% Movie: $25/SF See below Parking Income NA NA ($12,461,759) ($13,085,611.88) ($53,382,720.96) ($54,769,202.59) $1,200k/Unit Rev PAR$165 Monthly Parking Fee: $150 $50k/Unit $25k/Unit ($12,655,060) ($12,655,060) Hourly Parking Rate: $5.0 See Parking Section ($1,098,014)

NA SALE INCOME ( $ / USABLE SF ) NA PARKING INCOME ( $ / SF / MO ) Land Cost $ 12,655,060 NA Site - Infrastructure $30 per SF @ 36,600 Hard Costs + Soft Costs $460 per SF @ 220,500 ($101,430,000) Marketing and Legal Allow VALUE ASSUMPTION Parking (Above ground) $20,000 perDiscount stall @ Rate 0 8.00% Parking (Below ground) $35,000 per stall @ Rate 162 ($5,659,500) Exit Capitalization NA Proportion of Open Space SF /@ $0 VALUE per $0 NSFper( NPV NSF ) $99.5 $44,432,338 Developers Fee IncludedNPV in the other items WST 9.5%IRR Before@Taxes ($108,187,514) Unleveraged 0.0% ($10,277,814) Affordable Housing Payment in Lieu Leveraged $15.50IRR per Before SF @Taxes 162,750 16.9% ($2,522,625) Total Development Costs ($146,354,354) DEBT ASSUMPTIONS Annual Cash Flow LOAN TO VALUE 67% Income Average DEBT SERVICE COVERAGE 8.06 Asset Value 7.0% Exit Cap Rate TOTAL DEBT $151,968,399 Transaction Cost 3.0% EQUITY(Inclu Land) TOTAL $75,925,070 Total Development Costs ($146,354,354) Unleveraged Net Cash Flow Hard Cost + Soft Cost Notes Finance/ Source Excludes 9.5% Washington State Sales Debt/ Service 6.0% Tax Assumes 2013 pricing Principal Payment Construction Costs assume Leed Silver certification Interest Repayment Included contingency Principal 10% Repayment at exit Cost per year

Hotel Year 2 Year 3 116,000 65% Construction 67,400 2015 2016 400 50% of Occupancy

$86,089/Unit $30 $460

$30

NA

Income

PARKING ABOVE GRADE ($ / STALL) PARKING BELOW GRADE ($ / STALL) BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) Projected Condominum Unit Sales

Condominium Year 0 Year 1 220,500 80% & Planning Permiting 176,400 2013 2014 1,200 1 per Unit

$50,664,189.91

($250,000)

8.00% NA $104.2 $18,372,145 12.7% 18.0%

65% $0 $0 0.00 $0 $0 $108,151,924 $0.00 $0.00 $38,202,431 ($25,116,819) ($13,085,612) ($25,116,819) ($13,085,612)

($500,000) 8.00% 6.00% $232.0 $15,637,270 11.1% 17.2%

$25,116,819

$13,085,612

$0

NA

0 $0 $0

$0 $0

NA NA NA

($300,000)

7.00% 6.00%

54% $0 $0 2.79 $0 $0 $28,066,740 $0.00 $0.00 $20,179,807 ($53,382,721) ($54,769,203) ($53,382,721) ($54,769,203) $0

0

$0

45% $121,634,811 2.17 $71,482,525 $13,334,842 ($2,144,476) $9,063,394 $0 $121,634,811 ($114,641,039) ($108,151,924) ($6,489,115)

$85.2 $10,422,922 14.1% 17.2%

$57,304,265 $19,182,036 ($575,461) $0 $57,304,265 $0 $0 $0

8.00% 8.00%

21% $20,524,779 17.75 $0 $2,414,893 $0.00 $8,479,439 $0 $20,524,779 $0 $0 $0

NA NA NA NA NA NA

$0 $0 $0.00 $0 $0 $0 $0 $0

NA $0 NA $0 NA $0.00 NA $0 $0 $0 $0 $0

Average Sale price per unit 1,200,000 $12,461,759 $13,085,612 $0 Sale(Cash PriceContribution) per SF $1,000 Debt 65% 162 $53,382,721 $54,769,203 Parking units 110% Equity Amount $25,116,819 $38,202,431 $38,202,431 $38,202,431 $38,202,431 $38,202,431 $38,202,431 $0 $0 Parking Unit Price $50,000 Accumulated Debt Amount $53,382,721 $108,151,924 $0 $0 $0 $0 $0 Income NAIOP Real Estate Challenge (Principal Underwriting Payment Start) Summary 1 13 25 37 49 61 73 Financial (30% Presales) 61% 29% 10% (Principal Payment End) 12 24 36 48 60 72 84 Return on Equity Projected Condominum Unit Sales 89 42 15 0 0 Equity Cash Flow Unit Sales ($25,116,819) ($13,085,612) $0 $0 $6,993,772 $57,304,265 $20,524,779 $00 $00 $0 $0 Projected Parking 99 47 16 CONDOMINIUMS TOWER Tax Concequences $0 $0 $0 $0 $0 Retail $0 $0 $0 $0 $0 Total Condominium Hotel Retail$0 Parking Open Condominium Unit Sale Revenues $120,339,402 $56,725,644 $20,259,159 $0 $0 Space Total Benefit ($25,116,819) ($13,085,612) $0 $0 $6,993,772 $57,304,265 $20,524,779 $0 $0 $0 $0 DESIGN Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7$0 Year 8$0 Year 9 Year 10 Parlking ASSUMPTIONS Units Sale Revenues $5,571,269 $2,644,946 $900,407 Cumulative Total Benefit ($25,116,819) ($38,202,431) ($38,202,431) ($38,202,431) ($31,208,659) $26,095,606 $46,620,385 $0 $0 $0 $0 GROSS SF 553,284 220,500 116,000 55,600 161,184 0 Marketing and Legal Allow ($300,000) ($200,000) Net Present Value 8% Efficiency Factor $18,372,145 81% 80% 65% 89% 95% 100% HOA $1 SF/Year ($198,540) ($85,207) Permiting & Planning Construction Operation Cash on Cash Return per year 13.8% 113.1% 40.5% RENTABLE SF 446,565 176,400 67,400 49,640 153,125 0 Cost SalesReturn on Project ($3,777,320) ($1,781,118) ($634,787) Unit Value Total 2013 2014 2015 2016 2017 2018 2019 2020 $0 2021 $0 2022 2023 Input 3% Unit Cash onofCash $46,620,385 92.02% Average Unit SF NA 1,200 400 NA 350 NA Unleveraged IRR Before Taxes 12.7% $ $ $ $ $121,634,811 $57,304,265 $20,524,779 $0 $0 Income Assumptions PARKING STALLS 1 per Unit 50% of Occupancy NA 437 Total 208 lots, (3.2 per 1,000 SF) Leveraged IRR Before Taxes 18.0% Development Avg InflationCosts Factor 3% Exclude: For sale and hotel gurst spaces Number of Condominium Units 147 COST ASSUMPTIONS Built per year % 10% 10% 40% 40% Floor Plate SF $45/NSF $86,089/Unit $37,937/Unit $51/NSF $23/NSF NA LAND VALUE PER 10,500 DEVELOPMENT UNIT Cost per year ($12,461,759) ($13,085,611.88) ($53,382,720.96) ($54,769,202.59) SITE - INFRASTRUCTURE $30 $30 $30 $02022 Total SF 220,500( $ / SF OF SITE ) 2013$30 2014 2015$30 2016 2017 2018 2019 2020 2021 2023 HARD COSTS + SOFT COSTS $460 $240 General: $220/SF See Below Parking Cost NA Land Cost $ 12,655,060 ($12,655,060) ($12,655,060) Sources NA # Stories 21 ( $ / Gross SF ) Site - Infrastructure $30 per SF @ 36,600 ($1,098,014) Restaurant: $220/SF Equity Average Unit Size 1,200 Hard Costs + Soft Costs $460 per SF @ 220,500 Land ($101,430,000) $12,655,060 $0 $0 $0 Gym: $180/SF $0 $0 $0 $0 $0 $0 $0 Net Usable Area 176,400 Marketing and Legal Allow ($250,000) ($500,000) ($300,000) Cash $12,461,759 $13,085,612 $0 $0 Movie: $180/SF $0 $0 $0 $0 $0 $0 $0 Efficiency Factor 80% Parking (Above ground) $20,000 per stall @ 0 Debt $0 $0 $53,382,721 $54,769,203 $0 $0 $0 $0 $0 $0 $0 Average Sale price per unitTENANT IMPROVEMENT 1,200,000 Parking (Below ground) $35,000 per stall @ SF ) 162 ($5,659,500)Included Building Sales $0 $0Included Building $0 Shell $0 General: $121,634,811 $20,524,779 $0 NA $0 $0 ($ / Net NAProceeds Shell $100/SF$57,304,265 Included Parking Bld Cost$0 Proportion of Open $0 per SF @ - TOTAL $0 Sale Price per SF Space $1,000 $25,116,819 $13,085,612 $53,382,721 $54,769,203Restaurant: $121,634,811 $57,304,265 $20,524,779 $0 $0 $0 $0 $100/SF Parking unitsFee 162 110% Gym: $80/SF Developers Included in the otherUses items Development Cost $25,116,819 $13,085,612 $53,382,721 $54,769,203 Movie: $80/SF $0 $0 $0 $0 $0 $0 $0 WST 9.5% @ ($108,187,514) ($10,277,814) Parking Unit Price $50,000 Debt Service($2,522,625) $0 Affordable Housing Payment in Lieu $15.50 per SF @ 162,750 Income Principal Repay $0 $0 $0 $0 SF$108,151,924 $0 $0 $0 $0 $0 $0 ABOVE GRADE ($ / STALL) $20,000 / Stall (350 per stall) Total Development Costs PARKING ($146,354,354) Interest Repayment $0 $0 $0Presales) $0 SF per $6,489,115 $0 $0 $0 $0 $0 $0 PARKING BELOW GRADE ($ / STALL) $35,000 / Stall (350 stall) (30% 61% 29% 10% Annual Flow Return $0 80% of $0 General: $6,993,772 $0 NA $0 $0 BASE Cash YR. OPERATING EXPENSES ( $ / Gross SF / YR ) NA on Equity Cost of Sales:$03% of sales $0 Expense Rate: $1.15/SF$57,304,26510%$20,524,779 Gross Revenue $0 Projected 89 42 15 TOTAL $25,116,819 $13,085,612 $53,382,721 $54,769,203 $121,634,811 $57,304,265 $20,524,779 $0 $0 $0 $0 Income Condominum Unit Sales $0 $0 $0 $0Restaurant: $121,634,811 $57,304,265 $20,524,779 $00 $00 revenue total revenue $1.15/SF Asset Value 7.0% $0 $0 $0 $0 $71,482,525 $19,182,036 $0 $00 $00 Projected Parking Unit Sales 99 47 16 Exit Cap Rate Gym: $2.0/SF Transaction Cost 3.0% $0.00 $0.00 $0.00 $0.00 Movie: ($2,144,476) ($575,461) $0.00 $0.00 $0.00 $2.0/SF $56,725,644 Condominium Unit Sale Revenues $120,339,402 $20,259,159 $0 $0 Total Development ($146,354,354) ($25,116,819) ($13,085,612) ($53,382,721) ($54,769,203) $0 $0 $0 Parlking Units Sale Costs Revenues $5,571,269 $2,644,946 $900,407 $0 $0 Unleveraged Cash Flow ($25,116,819) ($13,085,612) Upscale/Luxyry ($53,382,721) ($54,769,203) $121,634,811 $57,304,265 $20,524,779 $0 $0 Marketing andNet Legal Allow ($300,000) ($200,000) Finance/ HOA Source $1 SF/Year ($198,540) ($85,207) INCOME ASSUMPTIONS Cost ofService Sales ($3,777,320) ($1,781,118) ($634,787) Debt/ 6.0% 3% $0 $0 ($114,641,039) $0 $0 $0 $0 General: $30/SF RENTAL INCOME ( $ / Net SF / MO ) ($108,151,924) $0 $0 IncomePrincipal Payment $ $ $ $ $121,634,811 $57,304,265 $20,524,779 $0 $0 Restaurant: $34/SF Interest Repayment ($6,489,115) $0 $0 $0 $0 Development Costs Gym: $28/SF Principal Repayment at exit Built per year % 10% 10% 40% 40% Movie: $25/SF Equity (Cash + Land) 35% $25,116,819 $13,085,612 $0 See below Parking Income NA NA $50,664,189.91 NA NA ($13,085,611.88) Cost(Cash per year ($12,461,759) Contribution) $12,461,759 $13,085,612 ($53,382,720.96) $0 ($54,769,202.59) SALE INCOME ( $ / USABLE SF ) NA $1,200k/Unit Rev PAR$165 NA Monthly Parking Fee: $150 PARKING INCOME ( $ / SF / MO ) $50k/Unit $25k/Unit $54,769,203 Debt 65% $53,382,721 Land Cost $ 12,655,060 ($12,655,060) ($12,655,060) Hourly $38,202,431 Parking Rate: $5.0$0 NA Section Equity Amount $25,116,819 $38,202,431 $38,202,431 $38,202,431 See Parking $38,202,431 $38,202,431 $0 NA Site - Infrastructure $30 per SF @ 36,600 ($1,098,014) Hard Costs + Debt Soft Costs $460 per SF @ 220,500 ($101,430,000) Accumulated Amount $53,382,721 $108,151,924 $0 $0 $0 $0 $0 Marketing and LegalStart) Allow ($250,000) ($500,000) ($300,000) VALUE ASSUMPTION (Principal Payment 1 13 25 37 49 61 73 Parking (Above ground) $20,000 perDiscount stall @ Rate 0 8.00% 8.00% 8.00% 7.00%12 8.00% (Principal Payment End) 24 36 48 60 NA 72 84 Parking (Below ground) $35,000 per stall @ Rate 162 ($5,659,500) Exit Capitalization NA NA 6.00% 6.00% 8.00% NA Return on Equity Proportion of Open Space SF /@ $0 VALUE per $0 NSFper( NPV NSF ) $99.5 $104.2 $232.0 NA $85.2 Equity Cash Flow ($25,116,819) ($13,085,612) $0 $0 $6,993,772 $57,304,265 $20,524,779 $0 $0 $0 $0 $44,432,338 $18,372,145 $15,637,270 NA $10,422,922 Developers Fee IncludedNPV in the other items Tax Concequences $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 WST 9.5% @ ($108,187,514) Unleveraged IRR Before Taxes 0.0% ($10,277,814) 12.7% 11.1% NA 14.1% Total Benefit ($25,116,819) ($13,085,612) $0 $0 $6,993,772 $57,304,265 $20,524,779 $0 $0 $0 $0 Affordable Housing Payment in Lieu Leveraged $15.50IRR per Before SF @Taxes 162,750 16.9% ($2,522,625) 18.0% 17.2% NA 17.2% Cumulative Total Benefit ($25,116,819) ($38,202,431) ($38,202,431) ($38,202,431) ($31,208,659) $26,095,606 $46,620,385 $0 $0 $0 $0 Total Development Costs ($146,354,354) Net Present Value 8% $18,372,145 DEBT ASSUMPTIONS Cash onCash CashFlow Return per year 13.8% 113.1% 40.5% Annual 67% 65% 54% 45% 21% NA Cash on Cash Return on Project $46,620,385 LOAN TO VALUE 92.02% Income $0 $0 $0 $0 $121,634,811 $57,304,265 $20,524,779 $0 $0 Average DEBT SERVICE COVERAGE 8.06 0.00 2.79 2.17 17.75 NA Unleveraged Asset ValueIRR Before Taxes 7.0%12.7% Exit Cap $0 $0 $0 $0 $71,482,525 $19,182,036 $0 $0 $0 Rate TOTAL DEBT $151,968,399 $108,151,924 $28,066,740 $13,334,842 $2,414,893 NA Leveraged IRR Before Taxes 18.0% Transaction Cost 3.0% EQUITY(Inclu Land) $0.00 $0.00 $0.00 $0.00 ($2,144,476) ($575,461) $0.00 $0.00 $0.00 NA TOTAL $75,925,070 $38,202,431 $20,179,807 $9,063,394 $8,479,439 Total Development Costs ($146,354,354) ($25,116,819) ($13,085,612) ($53,382,721) ($54,769,203) $0 $0 $0 $0 $0 Unleveraged Net Cash Flow ($25,116,819) ($13,085,612) ($53,382,721) ($54,769,203) $121,634,811 $57,304,265 $20,524,779 $0 $0 Hard Cost + Soft Cost Notes Finance/ Source 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Excludes 9.5% Washington State Sales Sources Debt/ Service 6.0% Tax $0 $0 ($114,641,039) $0 $0 $0 $0 Equity Assumes 2013 pricing Principal Payment ($108,151,924) $0 $0 $0 $0 Land $12,655,060 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Construction Costs assume Leed Silver certification Interest Repayment ($6,489,115) $0 $0 $0 $0 Cash $12,461,759 $13,085,612 $0 $0 $0 $0 $0 $0 $0 $0 $0 Included contingency Principal 10% Repayment at exit Debt $0 $0 $53,382,721 $54,769,203 $0 $0 $0 $0 $0 $0 $0 Equity (Cash + Land) 35% $50,664,189.91 $25,116,819 $13,085,612 $0

Block 25

BLOCK 25 CONDOMINIUM TOWER

NAIOP Real Estate Challenge Financial Underwriting Summary

BLOCK 25 HOTEL

Block 25

HOTEL

Total

DESIGN ASSUMPTIONS

GROSS SF Efficiency Factor Unit Unit Value RENTABLE SF Average Unit SF PARKING STALLS

Input Basic Assumptions Average Inflation Factor 4% Number of Hotel Rooms 168 Hotel SF 116,000 COST ASSUMPTIONS Hotel Retail NSF 8,000 LAND VALUE Hotel Retail Rent $28.00PER DEVELOPMENT UNIT SITE - INFRASTRUCTURE ( $ / SF OF SITE ) ADR $220.00 HARD COSTS + SOFT COSTS ( $ / Gross SF ) x Occupancy 75% RevPAR $165.00 Gross Operating Income Hotel Room Revenue (RevPAR) 168 Rooms @ $165.00 IMPROVEMENT ($@/ Net$10,117,800 SF ) Food and Beverage Sales TENANT45% Room Revenue Incidentals 10% Room Revenue @ $10,117,800 Guest Parking 63 Spaces/Night @ $25 Retail Rent 8,000 NSF @ $28.00 PARKING 5ABOVE Retail Parking Spaces GRADE ($ @/ STALL) $15,000 PARKING BELOW GRADE ($ / STALL) Less Vacancy/Credit Loss BASE Hotel YR. OPERATING EXPENSES ( $ / Gross SF / YR ) Room Revenue (RevPAR) Food and Beverage Sales Incidentals Guest Parking Retail 5% @ $224,000 Less Operating Expenses INCOME ASSUMPTIONS Hotel Management Fee 3%INCOME Hotel Revenue RENTAL ( $ / Net@SF /$16,257,465 MO ) Departamental Expenses Rooms 30% Room Revenue @ $10,117,800 Food and Beverage 80% F&B Revenue @ $4,553,010 Incidentals 30% Incidentals Revenue @ $1,011,780 Guest Parking 20%INCOME Parking Revenue @ $574,875 SALE ( $ / USABLE SF ) Undistributed Depart Expenses PARKING INCOME ( $ / SF / MO ) Franchise Fee 6% Room Revenue @ $10,117,800 Accounting & General 7% Hotel Revenue @ $16,257,465 Repair & Maintenance 5% Hotel Revenue @ $16,257,465 VALUE ASSUMPTION Sales & Marketing 8% Hotel Revenue Discount @ $16,257,465 Rate Utilities Exit Capitalization Rate Electricity 1% Hotel Revenue @ $16,257,465 VALUE per NSF ( NPV / NSF ) Water/Sewer 1% Hotel Revenue @ $16,257,465 NPV Fixed Costs Unleveraged IRR Before Taxes Parking Lease - Leveraged Spaces @ IRR Before Taxes Insurance 2.5% Hotel Revenue @ $16,257,465 Taxes 5% Hotel Revenue @ $16,257,465 DEBT ASSUMPTIONS Capital Reserves 1% Hotel Revenue @ $16,257,465 LOAN TO VALUE Retail $1.75 SF @ $8,000

Average DEBT SERVICE COVERAGE TOTAL DEBT TOTAL EQUITY(Inclu Land)

Net Operative Income - Hotel Net Operative Income - Hotel Retail Development Costs Built per year % Cost Cost per year+ Soft Cost Notes Hard

553,284 81% Total 446,565 NA 437

$45/NSF NA

Condominium Year 1

$20,000 per stall $35,000 per stall $0 per SF 9.5%

18,433 116,000

@ 34 @ 34 @ Included in the other items @ ($30,258,918)

Year 3

$10,117,800

$37,937/Unit $30 $240

Included Building Shell

$224,000 $75,000

Upscale/Luxyry

($11,200.00)

($487,724)

NA $1,200k/Unit $50k/Unit

($1,138,023) ($812,873) ($1,300,597) 8.00%

($406,436.63) ($812,873.25) ($162,574.65) 67% ($14,000.00)

8.06 $151,968,399 $75,925,070

($6,373,428) ($552,989) ($27,840,000) ($685,429) ($1,180,500) $0 ($2,874,597)

NA

Rev PAR$165 $25k/Unit

8.00% NA $104.2 $18,372,145 12.7% 18.0%

NA ($162,575) $99.5 ($162,575) $44,432,338 0.0% 16.9% $0

$ $

65% 0.00

- $108,151,924 $ - $38,202,431 $ -

($6,373,428)

15% ($5,375,581)

Retail Parking

Year 6

Year 7

Year 8

8.00% 6.00% $232.0 $15,637,270 11.1% 17.2%

$ $

-

35% ($13,044,744)

54% 2.79 $ $28,066,740 $ $20,179,807 35% ($13,566,534)

Open Space

Year 9

Year 10

55,600 161,184 0 Operation 89% 95% 100% 2018 2019 2020 2021 2022 49,640 153,125 0 NA 350 NA NA Total 208 lots, (3.2 per 1,000 SF) Exclude: For sale and hotel gurst spaces $51/NSF $30 General: $220/SF Restaurant: $220/SF Gym: $180/SF Movie: $180/SF

$23/NSF $30 See Below Parking Cost

2023

NA $0 NA

$11,836,395

$12,309,851

$12,802,245

$13,314,335

$13,846,908

$14,400,784 NA $6,480,353 $1,440,078 $818,226

$14,976,816 $6,739,567 $1,497,682 $850,955

$262,048

$272,530

$283,431

$294,769

$306,559

$318,822 $106,748 0%

$331,575 $111,018 0% $0.00 $0.00 $0.00 $0.00 ($16,578.74)

($721,950.59)

$20,000 / Stall$87,739 (350 SF per$91,249 stall) $94,899 $98,695 $102,643 $35,000 / Stall (350 30% SF per stall) 10% 0% 0% 0% Expense Rate: 80% of General: $1.15/SF 10% Gross Revenue total revenue ($3,550,918.48) Restaurant: $1.15/SF $0.00 ($1,230,985.07) $0.00 $0.00 $2.0/SF ($1,597,913.32) Gym: ($553,943.28) $0.00 $0.00 $0.00 $2.0/SF ($355,091.85) Movie: ($123,098.51) $0.00 $0.00 $0.00

Cost of Sales: 3% of sales revenue

($607,068) NA

Year 5

Included Building Shell$5,326,378 General: $100/SF $5,761,010Included Parking Bld $6,231,109 Cost $5,539,433 $5,991,451 Restaurant: $100/SF $1,183,639 $1,230,985 $1,280,224 $1,331,433 $1,384,691 $80/SF $727,400 $672,522 Gym: $699,423 $756,496 $786,756 Movie: $80/SF

$1,011,780 $574,875

($3,035,340) ($3,642,408) ($303,534) NA ($114,975) NA

Retail

Year 4

116,000 Construction 65% 2015 2016 2017 67,400 400 50% of Occupancy

$86,089/Unit $30 $460

$30

NA $4,553,010

NA

Hotel

Year 2

220,500 Permiting & Planning 80% 2013 2014 176,400 1,200 1 per Unit

15% ($5,168,828)

Excludes State Sales Tax Land Cost 9.5% Washington $6,373,428 Site - Infrastructure $30 per SF @ Assumes 2013 pricing Hard Costs + SoftCosts Costs assume Leed $240 per SF certification @ Construction Silver TI $0 Included 10% contingency Parking (Above ground) Parking (Below ground) Proportion of Open Space Developers Fee WST

Year 0

NA

$0.00 ($14,171.57)

$0.00 ($14,738.44)

$0.00 ($15,327.97)

$0.00 $0.00 $0.00 $0.00 ($15,941.09)

($570,568.04) General: ($593,390.76) $30/SF($617,126.39)

($641,811.45)

($667,483.90)

($694,183.26)

($201,756.73) ($13,102.42)

($69,942.33) ($13,626.51)

Restaurant: $34/SF ($3,550,918.48) ($3,692,955.22) Gym: $28/SF($3,840,673.43) ($3,994,300.37) ($4,154,072.38) ($4,261,102) Movie: ($4,431,546) ($4,793,160) ($4,984,887) $25/SF ($4,608,808) ($355,092) ($369,296) ($384,067) ($399,430) ($415,407) See below Parking Income ($134,504)

($139,885)

($145,480)

($1,331,325) ($950,947) ($1,521,515)

($1,384,578) ($988,985) ($1,582,375) 7.00%

($1,439,962) ($1,028,544) ($1,645,670)

($190,189) ($190,189)

($197,797) ($197,797)

($205,709) $85.2 ($205,709) $10,422,922

$0 ($475,473) ($950,947) ($190,189) ($16,378)

$0 ($494,492) ($988,985) ($197,797) 45% ($17,033)

($151,299)

($157,351)

Monthly Parking Fee: $150 Hourly Parking $5.0 ($710,184) ($738,591)Section($768,135) ($798,860) Rate: ($830,814) See Parking

($2,069,890) $320,307

6.00%

2.17 $1,803,253 $13,334,842 $333,120 $9,063,394

($1,497,560) ($1,069,686) ($1,711,497) 8.00%

8.00%

($1,557,462) ($1,112,473) ($1,779,957)

($4,320,235.28) ($5,184,282) ($432,024) NA ($163,645) NA

($4,493,044.69) ($5,391,654) ($449,304) ($170,191)

($864,047) NA ($1,619,761) ($1,156,972) ($1,851,155) NA

($898,609) ($1,684,551) ($1,203,251) ($1,925,202)

NA

($213,937) ($213,937)

($222,495) ($222,495)

($231,394) NA ($231,394) NA

($240,650) ($240,650)

$0 17.2% ($514,272) ($1,028,544) ($205,709) ($17,714)

$0 ($534,843) ($1,069,686) ($213,937) 21% ($18,423)

$0 ($556,237) ($1,112,473) ($222,495) ($19,160)

$0 NA ($578,486) ($1,156,972) ($231,394) NA ($19,926)

$0 ($601,625) ($1,203,251) ($240,650) ($20,723)

$3,932,471 $346,444

$4,089,770 $2,414,893 $360,302 $8,479,439

$4,253,361 $374,714

$4,423,495 NA $389,703 NA

$4,600,435 $405,291

14.1%

17.75

NA

NA

Undistributed Depart Expenses Franchise Fee 6% Room Revenue @ $10,117,800 Accounting & General 7% Hotel Revenue @ $16,257,465 Repair & Maintenance 5% Hotel Revenue @ $16,257,465 Sales & Marketing 8% Hotel Revenue @ $16,257,465 NAIOP Real Estate Challenge Utilities Financial Underwriting Summary Electricity 1% Hotel Revenue @ $16,257,465 Water/Sewer 1% Hotel Revenue @ $16,257,465 Fixed Costs HOTEL Parking Lease Spaces @ Insurance 2.5% Hotel Revenue @ $16,257,465 DESIGN Taxes ASSUMPTIONS 5% Hotel Revenue @ $16,257,465 GROSS SF Capital Reserves 1% Hotel Revenue @ $16,257,465 Input Unit Efficiency Unit Value Retail $1.75 SF @ Factor $8,000 RENTABLE SF Basic Assumptions Net Operative Income - Hotel Average Unit SF Average Income Inflation -Factor 4% Net Operative Hotel Retail PARKING STALLS Number Costs of Hotel Rooms 168 Development SF % 116,000 BuiltHotel per year Retail NSF 8,000 COST ASSUMPTIONS CostHotel per year Hotel Retail Rent $28.00PER DEVELOPMENT UNIT LAND $6,373,428 VALUE Land Cost ADR $220.00 ( $ / SF@OF SITE18,433 ) Site - Infrastructure SITE - INFRASTRUCTURE $30 per SF x Occupancy 75% SOFT ($/@ Gross SF ) Hard Costs + SoftHARD Costs COSTS +$240 perCOSTS SF 116,000 RevPAR $165.00 TI $0 Gross Operating Income Parking (Above ground) $20,000 per stall @ 34 Hotel Parking (Below ground) $35,000 per stall @ 34 Room Revenue (RevPAR) 168 Rooms @ $165.00 Proportion of Open Space $0 per SF @ Food and Beverage Sales TENANT45% Room Revenue @ $10,117,800 IMPROVEMENT ($ in/ Net SFitems ) Included the other Developers Fee Incidentals 10% Room Revenue @ $10,117,800 WST 9.5% @ ($30,258,918) Guest Parking 63 Spaces/Night @ $25 Total Development Costs ($43,529,116) Retail AnnualRent Cash Flow 8,000 NSF @ $28.00 NetRetail Operating Income Parking Spaces GRADE ($ @/ STALL) $15,000 PARKING 5ABOVE Asset Value 6.0% Exit Cap Rate Less Vacancy/Credit Loss PARKING BELOW GRADE ($ / STALL) Transaction Cost 3.0% Hotel

Block 25

BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR )

Total Development Room Revenue Costs (RevPAR) Food and Net Beverage Sales Unleveraged Cash Flow Incidentals Finance/ Source 2.79 Average DSCR Guest Parking Debt/ Service 3.5% Retail 5% @ $224,000 Principal Repayment 30 years Less Operating Expenses Principal Repayment at exit Hotel Equity (Cash + Land) 46% INCOME ASSUMPTIONS Management Fee 3% Hotel Revenue (Cash Contribution) RENTAL INCOME ( $ / Net@SF /$16,257,465 MO ) Departamental Expenses Debt 54% 30% Room Revenue @ $10,117,800 Equity Rooms Amount Food and Beverage 80% F&B Revenue @ $4,553,010 Debt Amount Incidentals 30% Incidentals Revenue @ $1,011,780 (Principal Payment Start) Guest ParkingEnd) 20% Parking Revenue @ $574,875 (Principal Payment SALE INCOME ( $ / USABLE SF ) Undistributed Return on EquityDepart Expenses PARKING INCOME ( $ / SF / MO ) Franchise Fee 6% Room Revenue @ $10,117,800 Equity Cash Flow & General 7% Hotel Revenue @ $16,257,465 TaxAccounting Concequences Repair & Maintenance 5% Hotel Revenue @ $16,257,465 Total Benefit VALUE ASSUMPTION Sales & Marketing 8% Hotel Revenue @ $16,257,465 Cumulative Total Benefit Discount Rate Utilities Net Present Value 8% Exit Capitalization Rate Electricity 1% Hotel Revenue @ $16,257,465 Cash on Cash Return per year VALUE per NSF ( NPV / NSF ) Water/Sewer 1% Hotel Revenue @ $16,257,465 Cash on Cash Return on Project $48,943,445 NPV Fixed Costs Unleveraged IRR Before Taxes 11.1% Unleveraged IRR Before Taxes Parking Lease Spaces @ Leveraged IRR Before Taxes 17.2% Leveraged IRR Before Taxes Insurance 2.5% Hotel Revenue @ $16,257,465 Taxes 5% Hotel Revenue @ $16,257,465 DEBT CapitalASSUMPTIONS Reserves 1% Hotel Revenue @ $16,257,465 LOAN @ TO VALUE Retail $1.75 SF $8,000

Average DEBT SERVICE COVERAGE Net Operative Income - Hotel TOTAL DEBT Net Operative Income - Hotel Retail TOTAL EQUITY(Inclu Land) Development Costs Built per year % Cost per year

Hard Cost + Soft Cost Notes Land Cost 9.5% Washington $6,373,428 Excludes State Sales Tax Site - Infrastructure $30 per SF @ Assumes 2013 pricing Hard Costs + Soft Costs $240 per SF @ Construction Costs assume Leed Silver certification TI $0 Included 10% contingency Parking (Above ground) Parking (Below ground) Proportion of Open Space Developers Fee WST

$20,000 per stall $35,000 per stall $0 per SF 9.5%

18,433 116,000

@ 34 @ 34 @ Included in the other items @ ($30,258,918)

($607,068) ($1,138,023) ($812,873) ($1,300,597)

($710,184) ($1,331,325) ($950,947) ($1,521,515)

($738,591) ($1,384,578) ($988,985) ($1,582,375)

($768,135) ($1,439,962) ($1,028,544) ($1,645,670)

($798,860) ($1,497,560) ($1,069,686) ($1,711,497)

($830,814) ($1,557,462) ($1,112,473) ($1,779,957)

($864,047) ($1,619,761) ($1,156,972) ($1,851,155)

($898,609) ($1,684,551) ($1,203,251) ($1,925,202)

($162,575) ($162,575)

($190,189) ($190,189)

($197,797) ($197,797)

($205,709) ($205,709)

($213,937) ($213,937)

($222,495) ($222,495)

($231,394) ($231,394)

($240,650) ($240,650)

$0 Year 4 ($475,473) ($950,947) ($190,189) 2017 ($16,378)

$0 Retail Year 5 ($494,492) ($988,985) 55,600 ($197,797) 89% 2018 ($17,033)

$0 Year 6 ($514,272) ($1,028,544) ($205,709) 2019 ($17,714)

$0

$0

$0

Total ($406,436.63)

Condominium Year 1

Year 0

($812,873.25)

553,284 ($162,574.65) 81% Total ($14,000.00) 446,565 NA 437

Permiting & 220,500 Planning 80% 2013 2014

116,000 Construction 65% 2015 2016

$ $

$ $

176,400 $ 1,200 $ 1 per Unit

-

15% ($5,168,828)

$45/NSF ($6,373,428)

($552,989) $30 NA ($27,840,000) ($685,429) ($1,180,500) $10,117,800 $0 $4,553,010 NA $1,011,780 ($2,874,597) $574,875 $224,000 $75,000

NA

($43,529,116)

Hotel Year 3

Year 2

15% ($5,375,581)

67,400 $ ($2,069,890) 400 $ $320,307 50% of Occupancy

-

35% ($13,044,744)

($6,373,428)$86,089/Unit

$37,937/Unit $30 $240

$30 $460

$0 $0 $0.00

$0 $0 $0.00

$11,542,256 $5,168,828

$5,375,581 $5,375,581

($3,035,340) ($3,642,408) ($303,534) NA ($114,975)

$11,542,256

$16,917,838

$0 $13,517,870 $16,917,838 $13,517,870

NA $1,200k/Unit $50k/Unit

NA

Sources 8.06 Equity $151,968,399 Land $75,925,070 Cash Debt NOI Sale ($6,373,428) ($552,989) TOTAL ($27,840,000) Uses Development Cost ($685,429) Debt Service ($1,180,500) Principal Repayment $0 Return on Equity TOTAL ($2,874,597)

$0

($982,335.89)

Upscale/Luxyry

$20,179,807 ($487,724)

($406,436.63) ($812,873.25) ($162,574.65) 67% ($14,000.00)

153,125 $4,089,770 350 $360,302

$4,253,361 $374,714

$4,600,435 $405,291

$12,309,851

$23/NSF $30 See Below Parking Cost

$262,048 ($1,749,582)

NA

($11,542,256)

($5,375,581)

$0

$0 ($11,542,256) ($11,542,256)

$0 ($5,375,581) ($16,917,838) 8.00%

$0 $0 ($16,917,838)

NA $104.2 $18,372,145 12.7% 18.0% 2013

2014 65% 0.00 $ $ $108,151,924 $ $ $6,373,428 $38,202,431$0

$0 $14,548,870 $16,917,838 $28,066,740

Rev PAR$165 $25k/Unit

$12,802,245

$13,314,335

$13,846,908

$272,530 $2,136,373

$283,431 $4,278,916

$294,769 $4,450,072

$306,559 $4,628,075

$0 $0 ($16,917,838) 8.00%

6.00% $232.0 $15,637,270 11.1% 17.2% 2015 $ $

2016 54% 2.79 $ $28,066,740 $ $0 $20,179,807 $0

($201,756.73) ($1,512,386) ($13,102.42) ($538,637)

($69,942.33) ($1,512,386) ($13,626.51) ($557,794)

$0.00 ($1,512,386) ($14,171.57) ($577,633)

$0.00 ($1,512,386) ($14,738.44) ($598,178)

$0.00 ($1,512,386) ($15,327.97) ($619,453)

$3,261,969 ($570,568.04) $3,261,969

$0

$0

$0

$0

($593,390.76) ($641,811.45) ($667,483.90) General: $30/SF($617,126.39) Restaurant: $34/SF ($3,550,918.48) ($3,994,300.37) ($4,154,072.38) $20,179,807 ($3,692,955.22) $20,179,807 $20,179,807 $20,179,807 $20,179,807 Gym: $28/SF($3,840,673.43) ($4,261,102) ($4,431,546) ($4,608,808) ($4,793,160) ($4,984,887) $27,528,103 $26,970,309 $25,794,497 $25,175,044 Movie: $25/SF $26,392,675 ($355,092) ($369,296) ($384,067) ($399,430) ($415,407) 1 13 25 37 49 See below Parking Income ($134,504) 12

0 $4,423,495 NA $389,703

NA $0 NA

$94,899 $98,695 $102,643 $20,000 / Stall$87,739 (350 SF per$91,249 stall) $0 ($29,159,705) $71,315,262 $74,167,872 $77,134,587 30% SF$35,606,214 10% 0% 0% 0% $35,000 / Stall (350 per stall) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Cost of Sales: 3% of sales Expense Rate: 80% of General: $1.15/SF 10% Gross Revenue ($11,542,256) revenue ($5,375,581) ($13,044,744) total ($13,566,534) $0 $0 $0 $0 $0 ($1,230,985.07) $0.00 $0.00 revenue ($3,550,918.48) Restaurant: $1.15/SF $0.00 ($553,943.28) $0.00 $0.00 $0.00 ($11,542,256) ($5,375,581) ($13,044,744) ($13,566,534) ($1,597,913.32) ($1,749,582) Gym: $2,136,373 $4,450,072 $4,628,075 $2.0/SF $4,278,916 ($355,091.85) Movie: ($123,098.51) $0.00 $0.00 $0.00 1.41 2.83 2.94 3.06 $2.0/SF ($473,125.44)

8.00% $15,637,270 NA ($162,575) $99.5 ($162,575) 242.54% $44,432,338 0.0% $0 16.9%

($1,069,686) 161,184 Operation ($213,937) 95% 2020 ($18,423)

NA Total 208 lots, (3.2 per 1,000 SF) Exclude: For sale and hotel gurst spaces

$51/NSF $30 General: $220/SF Restaurant: $220/SF Gym: $180/SF Movie: $180/SF

$11,836,395

$0 $0 $0.00

$3,932,471 $346,444

($1,112,473) ($222,495) 2021 ($19,160)

$0 $0 Open SpaceYear Year 9 10 ($578,486) ($601,625) ($1,156,972) ($1,203,251) 0 ($231,394) ($240,650) 100% 2022 2023 ($19,926) ($20,723)

Retail Year 7 ParkingYear 8 ($534,843) ($556,237)

$5,539,433 $5,991,451 Included Building Shell$5,326,378 General: $100/SF $5,761,010Included Parking Bld$6,231,109 Cost $1,183,639 $1,230,985 $1,280,224 $1,331,433 $1,384,691 Restaurant: $100/SF $672,522 Gym: $699,423 $727,400 $756,496 $786,756 $80/SF Movie: $80/SF

Included Building Shell

($11,200.00)

($607,068) NA ($1,138,023) ($812,873) ($1,300,597)

35% ($13,566,534)

49,640 $1,803,253 NA $333,120

BLOCK 25 HOTEL

($139,885) 24

($145,480) 36

($151,299) 48

($157,351) 60

Monthly Parking Fee: $150 ($710,184) ($738,591) ($768,135) ($798,860) Rate:$3,115,689 ($830,814) ($3,261,969) $623,986Section $2,766,529 Hourly $2,937,686 Parking $5.0 See Parking

$14,400,784 $6,480,353 NA $1,440,078 $818,226

$14,976,816 $6,739,567 $1,497,682 $850,955

$318,822 $4,813,198 $106,748 $80,219,970 0% $0.00

$331,575 $5,005,726 $111,018 $83,428,769 0% ($6,674,302)

$0 $0.00 $0.00 $4,813,198 $0.00 3.18 $0.00 ($1,512,386) ($15,941.09) ($641,485)

$0 $0.00 $0.00 $81,760,194 $0.00 3.31 $0.00 ($1,512,386) ($16,578.74) ($664,301) ($23,869,257) $0 ($721,950.59)

NA

$0 ($694,183.26) ($4,320,235.28) $20,179,807 ($5,184,282) $24,533,559 ($432,024) 61 NA ($163,645) 72

($4,493,044.69) $20,179,807 ($5,391,654) $23,869,257 ($449,304) 73 ($170,191) 84 ($898,609) $56,378,550 ($1,684,551) $0 ($1,203,251) $56,378,550 ($1,925,202) $48,943,445

NA

($1,331,325) $0 ($950,947) ($3,261,969) ($1,521,515) ($20,179,807)

($1,384,578) $0 ($988,985) $623,986 ($1,582,375) ($19,555,820)

($1,439,962) $0 ($1,028,544) $2,766,529 ($1,645,670) ($16,789,291)

($1,497,560) $0 ($1,069,686) $2,937,686 ($1,711,497) ($13,851,605)

($1,557,462) $0 ($1,112,473) $3,115,689 ($1,779,957) ($10,735,916)

($864,047) $3,300,812 NA ($1,619,761) $0 ($1,156,972) $3,300,812 ($1,851,155) ($7,435,105)

($190,189) -16.2% ($190,189)

($197,797) 3.1% ($197,797)

($205,709) 13.7% $85.2 ($205,709)

($213,937) 14.6% ($213,937)

($222,495) 15.4% ($222,495)

($231,394) 16.4% NA ($231,394)

($240,650) 279.4% ($240,650)

$0 ($475,473) ($950,947) ($190,189) 2017 ($16,378)

$0 ($494,492) ($988,985) ($197,797) 2018 45% ($17,033)

($514,272) ($1,028,544) ($205,709) 2019 ($17,714)

$0 ($534,843) ($1,069,686) ($213,937) 2020 21% ($18,423)

$0 ($556,237) ($1,112,473) ($222,495) 2021 ($19,160)

($578,486) ($1,156,972) ($231,394) 2022 NA ($19,926)

$0 ($601,625) ($1,203,251) ($240,650) 2023 ($20,723)

$0 $0 $2,136,373 $0 $2,136,373

$3,932,471 $346,444 $0 $0 $0 $4,278,916 $0 $4,278,916

$4,089,770 $2,414,893 $360,302 $0 $8,479,439 $0 $0 $4,450,072 $0 $4,450,072

$4,253,361 $374,714 $0 $0 $0 $4,628,075 $0 $4,628,075

$4,423,495 NA $389,703 $0 NA $0 $0 $4,813,198 $0 $4,813,198

$4,600,435 $405,291 $0 $0 $0 $5,005,726 $76,754,468 $81,760,194 $0 $1,512,386 $23,869,257 $56,378,550 $81,760,194

7.00% 6.00%

2.17 $1,803,253 $13,334,842 $333,120 $0 $9,063,394

$10,422,922 14.1% $0 17.2%

8.00% 8.00%

17.75

NA NA

NA NA $0 NA

NA

$5,168,828 15% $0 ($5,168,828) $0 ($6,373,428) $0 $11,542,256

$5,375,581 15% $0 ($5,375,581) $0 $0 $5,375,581

$0 35% $13,517,870 ($13,044,744) $0 $0 $13,517,870

$0 35% $14,548,870 ($13,566,534) $0 $0 $14,548,870

($2,069,890) $320,307 $0 $3,261,969 $0 ($1,749,582) $0 $1,512,386

$11,542,256 $0

$5,375,581 $0

$13,044,744 $473,125

$13,566,534 $982,336

$0 $1,512,386

$0 $1,512,386

$0 $1,512,386

$0 $1,512,386

$0 $1,512,386

$0 $1,512,386

$0 $11,542,256

$0 $5,375,581

$0 $13,517,870

$0 $14,548,870

$0 $1,512,386

$623,986 $2,136,373

$2,766,529 $4,278,916

$2,937,686 $4,450,072

$3,115,689 $4,628,075

$3,300,812 $4,813,198

Transaction Cost

3.0%

$0.00 ($43,529,116)

Total Development Costs Unleveraged Net Cash Flow Finance/ Source 2.79 Average DSCR Debt/ Service 3.5% NAIOP Real Estate Challenge Principal Repayment 30 years Financial Underwriting Summary Principal Repayment at exit Equity (Cash + Land) 46% (Cash Contribution) HOTEL Debt 54% Equity Amount DESIGN ASSUMPTIONS Debt Amount GROSS SF (Principal Payment Start) Input Unit Efficiency Factor Unit Value (Principal Payment End) RENTABLE SF Basic Assumptions Return on Equity Average Unit SF Average 4% Equity Cash Inflation Flow Factor PARKING STALLS Number of Hotel Rooms 168 Tax Concequences Hotel SF 116,000 Total Benefit Hotel Retail NSF 8,000 COST ASSUMPTIONS Cumulative Total Benefit Hotel Retail Rent $28.00PER DEVELOPMENT UNIT LAND VALUE Net Present Value 8% ADR $220.00 SITE - INFRASTRUCTURE ( $ / SF OF SITE ) Cash on Cash Return per year x Occupancy 75% HARD COSTS + SOFT COSTS ( $ / Gross SF ) Cash on Cash Return on Project $48,943,445 RevPAR $165.00 Unleveraged IRR Before Taxes 11.1% Gross Operating Income Leveraged IRR Before Taxes 17.2% Hotel Room Revenue (RevPAR) 168 Rooms @ $165.00 Food and Beverage Sales TENANT45% Room Revenue IMPROVEMENT ($@/ Net$10,117,800 SF ) Incidentals 10% Room Revenue @ $10,117,800 Guest Parking 63 Spaces/Night @ $25 Retail Rent 8,000 NSF @ $28.00 Retail Parking Spaces GRADE ($ @/ STALL) $15,000 PARKING 5ABOVE Less Vacancy/Credit Loss PARKING BELOW GRADE ($ / STALL) Hotel YR. OPERATING EXPENSES ( $ / Gross SF / YR ) BASE Room Revenue (RevPAR) Food and Beverage Sales Incidentals Guest Parking Retail 5% @ $224,000 Less Operating Expenses Hotel INCOME ASSUMPTIONS Management Fee 3% Hotel Revenue RENTAL INCOME ( $ / Net@SF /$16,257,465 MO ) Departamental Expenses Rooms 30% Room Revenue @ $10,117,800 Food and Beverage 80% F&B Revenue @ $4,553,010 Incidentals 30% Incidentals Revenue @ $1,011,780 Guest Parking 20% Parking Revenue @ $574,875 SALE INCOME ( $ / USABLE SF ) Undistributed Depart Expenses PARKING INCOME ( $ / SF / MO ) Franchise Fee 6% Room Revenue @ $10,117,800 Accounting & General 7% Hotel Revenue @ $16,257,465 Repair & Maintenance 5% Hotel Revenue @ $16,257,465 VALUE ASSUMPTION Sales & Marketing 8% Hotel Revenue @ $16,257,465 Discount Rate Utilities Exit Capitalization Rate Electricity 1% Hotel Revenue @ $16,257,465 VALUE per NSF ( NPV / NSF ) Water/Sewer 1% Hotel Revenue @ $16,257,465 NPV Fixed Costs Unleveraged IRR Before Taxes Parking Lease Spaces @ Leveraged IRR Before Taxes Insurance 2.5% Hotel Revenue @ $16,257,465 Taxes 5% Hotel Revenue @ $16,257,465 DEBT CapitalASSUMPTIONS Reserves 1% Hotel Revenue @ $16,257,465 LOAN @ TO VALUE Retail $1.75 SF $8,000

Block 25

Average DEBT SERVICE COVERAGE TOTAL DEBT TOTAL EQUITY(Inclu Land)

Net Operative Income - Hotel Net Operative Income - Hotel Retail Development Costs Built per year % Cost per year

Hard Cost + Soft Cost Notes Land Cost 9.5% Washington $6,373,428 Excludes State Sales Tax Site - Infrastructure $30 per SF @ Assumes 2013 pricing Hard Costs + Soft Costs $240 per SF @ Construction Costs assume Leed Silver certification TI $0 Included 10% contingency Parking (Above ground) Parking (Below ground)

$20,000 per stall $35,000 per stall

@ @

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

($11,542,256)

($5,375,581)

($13,044,744)

($13,566,534)

$0

$0

$0

$0

$0

$0

$0

($11,542,256)

($5,375,581)

($13,044,744)

($13,566,534)

($1,749,582)

($473,125.44)

($982,335.89)

($1,512,386) ($538,637)

$2,136,373 1.41 ($1,512,386) ($557,794)

$4,278,916 2.83 ($1,512,386) ($577,633)

$4,450,072 2.94 ($1,512,386) ($598,178)

$4,628,075 3.06 ($1,512,386) ($619,453)

$4,813,198 3.18 ($1,512,386) ($641,485)

$0

$0

$3,261,969 $3,261,969

$0

$0

$0

$0

$0

$81,760,194 3.31 ($1,512,386) ($664,301) ($23,869,257) $0

Year 4 $20,179,807 $27,528,103 1 2017 12

Retail Year 5 $20,179,807 $26,970,309 55,600 13 89%24 2018

Year 6 $20,179,807 $26,392,675 25 2019 36

$20,179,807

$11,542,256 $5,168,828

Total

NA242.54%

$5,375,581 $5,375,581

Year 0 Condominium Year 1 $11,542,256 $16,917,838

553,284 81% Total 446,565 NA 437

$45/NSF $15,637,270

$0.00

Permiting & 220,500 Planning 80% 2013 2014 ($11,542,256) $0 ($11,542,256) ($11,542,256)

176,400 1,200 ($5,375,581) 1 per Unit $0 ($5,375,581) ($16,917,838)

$86,089/Unit $30 $460

$30

$13,517,870 $14,548,870 Hotel Year 2 Year 3 $16,917,838 $16,917,838 $13,517,870 $28,066,740 116,000 Construction 65% 2015 2016

67,400 400 ($3,261,969) 50% of Occupancy $0

$0 $0 ($16,917,838)

$0 $0 ($16,917,838)

$37,937/Unit $30 $240

$10,117,800 $4,553,010 NA

$1,011,780 Sources $574,875 Equity Land$224,000 Cash $75,000 Debt NOI NA Sale TOTAL Uses Development Cost Debt Service ($11,200.00) Principal Repayment Return on Equity TOTAL ($487,724)

2013

2014

$13,566,534 $982,336

$0 $11,542,256

$0 $5,375,581

$0 $13,517,870

$0 $14,548,870

($13,851,605)

($10,735,916)

$12,802,245

$13,314,335

$13,846,908

$0 $1,512,386 ($570,568.04)

$623,986 $2,136,373 ($593,390.76)

$2,766,529 $4,278,916 ($617,126.39)

General: $30/SF

$50k/Unit

$25k/Unit

8.00% NA $104.2 $18,372,145 12.7% 18.0%

($406,436.63) ($812,873.25) ($162,574.65) 67% ($14,000.00)

$ $

65% 0.00

$ $108,151,924 $ -

$38,202,431

15% ($5,168,828) ($6,373,428)

15% ($5,375,581)

8.00% 6.00% $232.0 $15,637,270 11.1% 17.2%

$ $

-

35% ($13,044,744)

54% 2.79 $ $28,066,740 $ $20,179,807 35% ($13,566,534)

($7,435,105) 16.4%

279.4%

NA $0 NA

$14,400,784 $6,480,353 NA 2022 $1,440,078 $818,226

$14,976,816 $6,739,567 2023 $1,497,682 $850,955

$0 $318,822 $0 $106,748 $0 0% $4,813,198 NA $0 $0.00 $4,813,198 $0.00

$0 $331,575 $0 $111,018 $0 0% $5,005,726 $76,754,468 $0.00 $81,760,194 $0.00 $0.00 $0 $0.00 $1,512,386 ($16,578.74) $23,869,257 $56,378,550 $81,760,194 ($721,950.59)

$0.00 $0 $0.00 $1,512,386 ($15,327.97)

$0.00 $0 $0.00 $1,512,386 ($15,941.09)

$2,937,686 $4,450,072 ($641,811.45)

$3,115,689 $4,628,075 ($667,483.90)

$3,300,812 $4,813,198 ($694,183.26)

Monthly Parking Fee: $150 ($710,184) ($738,591)Section($768,135) ($798,860) Rate: ($830,814) Hourly Parking $5.0 See Parking

$56,378,550 $0 $56,378,550 $48,943,445

$0.00 $0 $0.00 $1,512,386 ($14,738.44)

Restaurant: $34/SF No of Rooms Percentage Room Rate ($3,550,918.48) ($3,692,955.22) ($3,840,673.43) ($3,994,300.37) ($4,154,072.38) $28/SF 50 30% 250 75 Gym: ($4,261,102) ($4,431,546) ($4,793,160) ($4,984,887) $25/SF ($4,608,808) 34 20% 180 36 Movie: ($355,092) ($369,296) ($384,067) ($399,430) ($415,407) See below Parking Income NA NA 84 50% 220 110 ($134,504) ($139,885) ($145,480) ($151,299) ($157,351) $1,200k/Unit Rev PAR$165 168 100% ADR 221

8.00% NA ($162,575) $99.5 ($162,575) $44,432,338 0.0% $0 16.9%

($685,429) ($1,180,500)

$12,309,851

Gym: $2.0/SF

$13,044,744 $473,125

($1,138,023) ($812,873) ($1,300,597)

34 34

($16,789,291)

($355,091.85) Movie: ($123,098.51) $0.00 $2.0/SF $0 $0 $0 ($201,756.73) ($69,942.33) $0.00 $1,512,386 $1,512,386 $1,512,386 ($13,626.51) ($14,171.57) Upscale/Luxyry ($13,102.42)

$5,375,581 $0

($607,068) NA

($6,373,428) ($552,989) ($27,840,000)

($19,555,820)

$5,539,433 $5,991,451 Included Building Shell$5,326,378 General: $100/SF $5,761,010Included Parking Bld $6,231,109 Cost 2015 2016 2017 2018 2019 2020 2021 $1,183,639 $1,230,985 $1,280,224 $1,331,433 $1,384,691 Restaurant: $100/SF $672,522 Gym: $699,423 $756,496 $786,756 $80/SF $727,400 Movie: $80/SF

$11,542,256 $0

Open SpaceYear 10 Year 9 $20,179,807 $20,179,807 $24,533,559 $23,869,257 610 73 2022 100% 2023 84 72

49,640 153,125 0 NA 350 NA $623,986 $2,766,529 $2,937,686 $3,115,689 $3,300,812 NA Total 208 lots, (3.2 per 1,000 SF) $0 $0 $0 $0 $0 Exclude:$2,937,686 For sale and$3,115,689 hotel gurst spaces $623,986 $2,766,529 $3,300,812

$6,373,428 $0 $0 $0 $0 $0 $0 $0 $0 $262,048 $272,530 $283,431 $294,769 $306,559 $5,168,828 $5,375,581 $0 $0 $3,261,969 $0 $0 $0 $0 $94,899 $98,695 $102,643 $20,000 / Stall$87,739 (350 SF per$91,249 stall) $0 $0 $13,517,870 $14,548,870 $0 $0 $0 $0 $0 30% 10% 0% 0% 0% $35,000 / Stall (350 SF per stall) $0 $0 $0 $0 ($1,749,582) $2,136,373 $4,278,916 $4,450,072 $4,628,075 Cost of Sales: 3% of sales Expense Rate: 80% of General: $1.15/SF 10% Gross Revenue $0 $0 $0 $0 $0 ($1,230,985.07) $0 $0 $0 $0 $0.00 $0.00 revenue total revenue ($3,550,918.48) Restaurant: $1.15/SF $0.00 $11,542,256 $5,375,581 $13,517,870 $14,548,870 $1,512,386 $2,136,373 $4,278,916 $4,450,072 $4,628,075 ($1,597,913.32) ($553,943.28) $0.00 $0.00 $0.00

NA

18,433 116,000

$20,179,807 $25,175,044 49 2021 60

$51/NSF $23/NSF $30 $30 -16.2% 3.1% 13.7% 14.6% 15.4% General: $220/SF See Below Parking Cost Restaurant: $220/SF Gym: $180/SF Movie: $180/SF

$11,836,395

Included Building Shell

($3,035,340) Water View Room ($3,642,408) Marcer Street ($303,534) NA Court Yard ($114,975)

8.06 $151,968,399 $75,925,070

$0 ($3,261,969) ($20,179,807)

BLOCK 25 HOTEL

Retail Year 7 ParkingYear 8 $20,179,807 $25,794,497 161,184 Operation 37 2020 95% 48

($6,674,302)

($4,320,235.28) ($5,184,282) ($432,024) NA ($163,645)

($4,493,044.69) ($5,391,654) ($449,304) ($170,191)

NA

($1,331,325) ($950,947) ($1,521,515)

($1,384,578) ($988,985) ($1,582,375)

($1,439,962) ($1,028,544) ($1,645,670)

($1,497,560) ($1,069,686) ($1,711,497)

($1,557,462) ($1,112,473) ($1,779,957)

($864,047) NA ($1,619,761) ($1,156,972) ($1,851,155)

($898,609) ($1,684,551) ($1,203,251) ($1,925,202)

($190,189) ($190,189)

($197,797) ($197,797)

($205,709) $85.2 ($205,709)

($213,937) ($213,937)

($222,495) ($222,495)

($231,394) NA ($231,394)

($240,650) ($240,650)

$0 ($475,473) ($950,947) ($190,189) ($16,378)

$0 ($494,492) ($988,985) ($197,797) 45% ($17,033)

($514,272) ($1,028,544) ($205,709) ($17,714)

$0 ($534,843) ($1,069,686) ($213,937) 21% ($18,423)

$0 ($556,237) ($1,112,473) ($222,495) ($19,160)

($578,486) ($1,156,972) ($231,394) NA ($19,926)

$0 ($601,625) ($1,203,251) ($240,650) ($20,723)

$4,253,361 $374,714

$4,423,495 NA $389,703

$4,600,435 $405,291

($2,069,890) $320,307

7.00% 6.00%

2.17 $1,803,253 $13,334,842 $333,120 $9,063,394

$10,422,922 14.1% $0 17.2%

$3,932,471 $346,444

8.00% 8.00%

17.75

$4,089,770 $2,414,893 $360,302

$8,479,439

NA NA

NA NA $0 NA

NA

NA

NAIOP Real Estate Challenge Financial Underwriting Summary

BLOCK 25 RETAIL

Block 25

RETAIL

Total

DESIGN ASSUMPTIONS

Space Program

Input

GROSS SF Efficiency Factor RENTABLE SF AverageUnit UnitValue SF Unit PARKING STALLS

Avg Inflation Factor 3% COST ASSUMPTIONS

SF Total GSF 55,600 LAND VALUE DEVELOPMENT UNIT PER 22,200

SF General SITE - INFRASTRUCTURE ( $ / SF OF SITE )

SF Restaurant 10,400 HARD COSTS + SOFT COSTS ( $ / Gross SF )

SF Gym 15,000 SF Movie Theater 8,000 NSF 89% General 90% TENANT IMPROVEMENT ($ / Net SF ) Restaurant 90% Gym 90% Movie Theater 85% Net Operating Income Gross Revenue PARKING ABOVE GRADE ($ / STALL) General BELOW GRADE ($ / STALL) PARKING Restaurant BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) Gym Movie Theater Rent (NNN) per s.f.

General $30.00 Restaurant $34.00 $28.00 INCOME ASSUMPTIONS Gym Movie Theater RENTAL$25.00 INCOME ( $ / Net SF / MO ) Vacancy & Credit Loss General Restaurant Gym SALE INCOME ( $ / USABLE SF ) Movie Theater PARKING INCOME ( $ / SF / MO ) Vacancy & Credit Loss (%) General Restaurant VALUE ASSUMPTION Gym Discount Rate Movie Theater Exit Capitalization Rate Operations & Maintenance ExpensesVALUE per NSF ( NPV / NSF ) NPV General Restaurant Unleveraged IRR Before Taxes Leveraged IRR Before Taxes Gym Movie Theater DEBT ASSUMPTIONS Expense per s.f.

LOAN TO VALUE General $1.15 SERVICE COVERAGE Average DEBT Restaurant $1.15 TOTAL DEBT Gym $2.00 TOTAL EQUITY(Inclu Land) Movie Theater $2.00 Net Operating Income Hard Cost + Soft Cost Notes Development Costs Excludes 9.5% Washington State Sales Tax Built per year % Assumes 2013 pricing Cost per year Construction Costs assume Leed Silver certification Land Cost ($2,512,272) Included 10% contingency Site - Infrastructure $30 per SF @ 55,600 Hard Costs + Soft Costs

Condominium Year 0

Year 1 220,500 80% Permiting 176,400 & Planning 1,2002014 2013 1 per Unit

553,284 81% 446,565 NA Total 437

$45/NSF NA

$30

NA

$12,624,440 $5,128,005 $2,722,617 NA $3,233,877 $1,539,941

($1,005,763) ($555,224) ($294,786) NA ($105,510) NA ($50,243)

NA

8.00% NA $99.5 ($720,032) $44,432,338 ($220,175) 0.0% ($103,145) 16.9% ($258,725) ($137,987) 67% 8.06 $151,968,399 $75,925,070 $10,898,645

($2,512,272) ($1,668,000) ($11,312,000)

Hotel

Retail

Year 2

Year 3 Year 4 116,000 65% 67,400 Construction 400 2015 2016 2017 50% of Occupancy

0 0 $86,089/Unit $30 $460 0 0 0 0 Included0 Building Shell 0 0 0 0 0

0

Retail Parking

Open Space

Year 5 Year 6 Year 161,184 7 Year 8 Year 9 55,600 0Year 10 89% 95% 100% 49,640 153,125 0 Operation NA2023 2018NA 2019 2020 350 2021 2022 NA Total 208 lots, (3.2 per 1,000 SF) Exclude: For sale and hotel gurst spaces

0 $37,937/Unit $30 $240

55,600 55,600 55,600 55,600 55,600 $51/NSF $23/NSF 22,200 22,200 22,200 22,200 22,200 $30 $30 10,400 10,400 10,400 10,400 10,400 General: $220/SF See Below Parking Cost 15,000 Restaurant: 15,000$220/SF15,000 15,000 15,000 8,000 8,000 8,000 8,000 Gym:8,000 $180/SF 0 0 49640 Movie: 49640 49640 49640 $180/SF 49640 0 0 19,820 19,820 19,820 19,820 19,820 Included Building $100/SF 9,285 Included9,285 Parking Bld9,285 Cost 0 0 Shell 9,285 General: 9,285 0 0 13,392 Restaurant: 13,392$100/SF13,392 13,392 13,392 Gym: $80/SF 0 0 7,142 7,142 7,142 7,142 7,142 Movie: $80/SF

$0 $0 $0 $0 $1,800,344 $1,854,354 $20,000 /$1,647,570 Stall (350 SF$1,696,997 per stall) $1,747,907 $0 $0 $0 $0 $669,237 $709,994 $731,294 $753,232 $35,000 / Stall (350 SF $689,314 per stall) $0 $0 $355,319 General: $365,978 $376,958 10% $388,266 $399,914 Cost of Sales: 3% of$0sales Expense Rate:$080% of $1.15/SF Gross Revenue $0revenue $0 $0 total revenue $0 $422,042Restaurant: $434,703$1.15/SF $447,744 $461,176 $475,011 Gym: $2.0/SF $213,211 $0 $0 $0 $0 $200,972 $207,001 $219,608 $226,196 Movie:$34 $2.0/SF #DIV/0! #DIV/0! #DIV/0! #DIV/0! $33 $35 $36 $37 $30.00 $30.90 $31.83 $32.78 $33.77 $34.78 $35.82 $36.90 $38.00 Upscale/Luxyry $34.00 $35.02 $36.07 $37.15 $38.27 $39.42 $40.60 $41.82 $43.07 $28.00 $28.84 $29.71 $30.60 $31.51 $32.46 $33.43 $34.44 $35.47 $25.00 $25.75 $26.52 $27.32 $28.14 General: $28.98$30/SF $29.85 $30.75 $31.67 $0 $0 $0 $0 ($411,892) Restaurant: $0 $34/SF $0 $0 $0 Gym: $28/SF $0 $0 $0 $0 ($167,309) $0 $0 $0 $0 $0 $0 $0 $0 ($88,830) Movie: $25/SF $0 $0 $0 $0 Parking Income NA $0 $0 NA $0 $0 ($105,510) $0 $0See below $0 $0 $1,200k/Unit Rev PAR$165 $0 $0 ($50,243) $0 $0 $0 $0 $0 $0 Monthly Parking Fee: $150 $50k/Unit $25k/Unit Hourly Parking Rate: $5.0 See Parking Section 25% 0% 0% 0% 0% 25% 0% 0% 0% 0% 25% 0% 0% 0% 0% 8.00% 8.00% 7.00% 8.00% 25% 0% 0% 0% 0% NA 6.00% 6.00% 8.00% $232.0$0 $85.2 ($102,682) $0$104.2 $0 $0 ($93,969) ($96,788) ($99,691) ($105,763) $18,372,145 $10,422,922 $0 $0 $0 $15,637,270 $0 ($28,734) ($29,596) ($30,484) ($31,399) ($32,341) 11.1%$0 14.1% $0 12.7% $0 $0 ($13,461) ($13,865) ($14,281) ($14,709) ($15,151) 18.0% 17.2% 17.2% $0 $0 $0 $0 ($33,765) ($34,778) ($35,822) ($36,896) ($38,003) $0 $0 $0 $0 ($18,008) ($18,548) ($19,105) ($19,678) ($20,268) #DIV/0! #DIV/0! #DIV/0! #DIV/0! $1.69 $1.74 $1.79 $1.85 $1.90 65% 54% 45% 21% $1.15 0.00 $1.18 $1.22 $1.26 $1.29 $1.33 $1.37 $1.41 $1.46 2.79 2.17 17.75 $1.15 $1.18 $1.22 $28,066,740 $1.26 $1.29 $1.33 $1.37 $1.41 $1.46 $108,151,924 $13,334,842 $2,414,893 $2.00 $2.06 $2.12 $2.19 $2.25 $2.32 $2.39 $2.46 $38,202,431 $20,179,807 $9,063,394 $8,479,439 $2.53 $2.00 $2.06 $2.12 $2.19 $2.25 $2.32 $2.39 $2.46 $2.53 $0

$0

$0

55,600 22,200 10,400 15,000 8,000 49640 19,820 9,285 13,392 7,142

NA $0 NA

NA

55,600 22,200 10,400 15,000 8,000 49640 19,820 9,285 13,392 7,142

$1,909,985 $1,967,284 $775,829 $799,104 $411,912 NA $424,269 $489,262 $503,940 $232,982 $239,971 $38 $40 $39.14 $40.32 $44.36 $45.69 $36.53 $37.63 $32.62 $33.60 ($593,871) $0 ($387,915) $0 ($205,956) $0 $0 NA $0 NA $0 $0

NA

50% 50% 0% 0% ($108,936) ($33,311) ($15,605) ($39,143) ($20,876) $1.96 $1.50 $1.50 $2.61 $2.61

0% 0% 0% NA 0% NA NA($112,204) NA ($34,310) NA ($16,073) NA ($40,317) ($21,503) $2.02 NA $1.55 NA NA $1.55 NA $2.69 $2.69

$0

$1,141,709

$1,600,209

$1,648,215

$1,697,662

$1,748,592

$1,207,179

$1,855,081

15.0% 15.0% 35.0% 35.0% ($2,880,617) ($2,880,617) ($6,721,439) ($6,721,439) ($2,512,272)

$0

$0

$0

$0

$0

$0

$0

General Restaurant Gym Movie Theater NAIOP Real Estate Challenge Operations & Maintenance Expenses Financial UnderwritingGeneral Summary Restaurant Gym RETAILMovie Theater Expense per s.f.

DESIGN ASSUMPTIONS General $1.15 GROSS SF Restaurant $1.15 Efficiency Factor Gym $2.00 RENTABLE SF AverageUnit UnitValue SF Movie Theater $2.00 Input Unit PARKING STALLS Space Program Net Operating Income Avg Inflation Factor 3% Development Costs COST ASSUMPTIONS

SF Total%GSF 55,600 Built per year LAND VALUE DEVELOPMENT UNIT PER 22,200

SF Cost per General year SITE - INFRASTRUCTURE ( $ / SF OF SITE ) 10,400

SF Restaurant Land Cost ($2,512,272) HARD COSTS + SOFT COSTS ( $ / Gross SF ) $30 Gym 15,000 Site - Infrastructure perSF SF @ 55,600 SF Movie Theater 8,000 Hard Costs + Soft Costs NSF 89% General $220 per SF @ 22,200 General 90% Restaurant $220 per SF @ 10,400 TENANT SF ) Restaurant 90% Gym IMPROVEMENT $180 per SF ($ @ / Net15,000

Block 25

($720,032) ($220,175) ($103,145) ($258,725) ($137,987) Total

553,284 81% 446,565 NA Total 437 $10,898,645 $45/NSF

$30 ($2,512,272) NA ($1,668,000) ($11,312,000) ($4,884,000) ($2,288,000) NA ($2,700,000)

Gym 90% Movie Theater $180 per SF @ 8,000 ($1,440,000) Theater 85% Tenant Movie Improvement ($4,558,000) Net Operating Income General $100 per SF @ 19,980 ($1,998,000) GrossRestaurant Revenue $12,624,440 $100 per SF @ 9,360 ($936,000) PARKING ABOVE GRADE ($ / STALL) General $5,128,005 Gym BELOW $80 per SF ($ @ / STALL) 13,500 ($1,080,000) PARKING GRADE Restaurant $2,722,617 BASE YR. OPERATING EXPENSES NA Movie Theater $80( $ / Gross per SFSF@/ YR ) 6,800 ($544,000) Gym $3,233,877 Proportion of Open Space $0 per SF @ $0 Movie Theater Included in the other items $1,539,941 Developers Fee Rent (NNN) perFees s.f.

Other $0 General $30.00 ($1,666,110) WST 9.5% @ 17,538,000 $34.00 Total Development CostsRestaurant ($21,716,382) Gym $28.00 Annual Cash Flow INCOME ASSUMPTIONS Movie Theater Net Operating Income RENTAL$25.00 INCOME ( $ / Net SF / MO ) Vacancy & Credit Loss Asset Value ($1,005,763) 6.0% Exit Cap Rate General ($555,224) Transaction Cost 3.0% Restaurant ($294,786) Total Development Costs ($21,716,382) NA Gym ($105,510) Unleveraged Net Cash Flow SALE INCOME ( $ / USABLE SF ) $19,172,736 NA Movie Theater ($50,243) PARKING ( $ / SF / MO ) Finance/ Source 2.17 INCOME Average DSCR Vacancy & Credit Loss (%) NA Debt/ Service 3.5% General Principal Repayment 30 years Restaurant VALUE ASSUMPTION Principal Repayment at exit Gym Discount Rate 8.00% Equity (Cash+Land) 55% $11,944,010 Movie Theater Exit Capitalization Rate NA (Cash Contribution) $6,551,122 $99.5 Operations & Maintenance ExpensesVALUE per NSF ( NPV / NSF ) ($720,032) Debt 45% $13,334,842 NPV $44,432,338 General ($220,175) Equity (Cash + Land) Unleveraged IRR Before Taxes 0.0% Restaurant ($103,145) Debt Amount Leveraged IRR Before Taxes 16.9% Gym ($258,725) (Principal Payment Start) Movie Theater ($137,987) DEBT ASSUMPTIONS (Principal Payment End) Expense per s.f.

LOAN TO VALUE 67% Return on Equity General $1.15 SERVICE COVERAGE Average DEBT 8.06 Equity Cash Flow Restaurant $1.15 TOTAL DEBT $151,968,399 Tax Concequences Gym $2.00 TOTAL EQUITY(Inclu Land) $75,925,070 TotalTheater Benefit Movie $2.00 Cumulative TotalIncome Benefit Net Operating $10,898,645 Hard Cost + Soft Cost Notes Development Costs Excludes 9.5% Washington State Sales Tax Return Retail + Retail Parking Built per year % Assumes pricing Net Present 2013 Value Cost 7% $10,422,922 per year Construction Costs assume Leed Silver certification Cash on Cash Return perLand yearCost ($2,512,272) ($2,512,272) Included 10% contingency Cash on CashSite Return on Project $13,530,812 113.29% - Infrastructure $30 per SF @ 55,600 ($1,668,000) Combined Cash Flow Hard CostsNet + Soft Costs ($11,312,000) Unleveraged IRR Before Taxes 14.1% General $220 per SF @ 22,200 ($4,884,000) Combined Equity Cash Flow Restaurant $220 per SF @ 10,400 ($2,288,000) Leveraged IRR Before Taxes Gym 17.2% $180 per SF @ 15,000 ($2,700,000)

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Condominium #DIV/0! #DIV/0!

Year 0$1.15 Year$1.18 1 220,500 $1.15 80% $1.18 $2.00 $2.06 176,400 Permiting & Planning $2.06 2013$2.00 1,2002014 1 per Unit $0 $0

25% 25% 25% 25% ($93,969) ($28,734) ($13,461) ($33,765) ($18,008) $1.69 Year$1.29 4 $1.29 $2.25 $2.25 2017

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Hotel #DIV/0! #DIV/0!

Year$1.22 2 Year$1.26 3 116,000 $1.22 $1.26 65% $2.12 $2.19 67,400 Construction 400 $2.12 $2.19 2015 2016 50% $0 of Occupancy $0 $1,141,709

0% 0% 0% 0% 50% 0% 0% 0% 0% 0% 50% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% ($96,788) ($99,691) ($102,682) ($105,763) ($108,936) ($112,204) ($29,596) ($30,484) ($31,399) ($32,341) ($33,311) ($34,310) ($13,865) ($14,281) ($14,709) ($15,151) ($15,605) ($16,073) ($34,778) ($35,822) ($36,896) ($38,003) ($39,143) ($40,317) ($18,548) ($19,105) ($19,678) ($20,268) ($20,876) ($21,503) Retail Retail Parking Open Space $1.74 $1.79 $1.85 $1.90 $1.96 $2.02 $1.33 $1.55 Year 5 Year$1.37 6 Year$1.41 7 Year$1.46 8 Year$1.50 9 55,600 161,184 0Year 10 $1.33 $1.37 $1.41 $1.46 $1.50 100% $1.55 89% 95% $2.32 $2.39 Operation $2.46 $2.53 $2.61 $2.69 49,640 153,125 0 NA 350 2021 $2.32 $2.46 $2.53 $2.61 NA2023$2.69 2018 2019$2.39 2020 2022 Total 208$1,648,215 lots, (3.2 per$1,697,662 1,000 SF) $1,748,592 $1,600,209 $1,207,179 NA$1,855,081 Exclude: For sale and hotel gurst spaces

BLOCK 25 RETAIL

0 0 0 0 15.0% 15.0% 35.0% 35.0% $86,089/Unit $37,937/Unit ($2,880,617) ($2,880,617) ($6,721,439) ($6,721,439) $30 $30 ($2,512,272) $460 $240 0 0 0 0 Included0 Building Shell 0 0 0 0 0

55,600 55,600 55,600 55,600 55,600 $51/NSF $23/NSF 22,200 22,200 22,200 22,200 22,200 $0 $0 $0 $0 $0 $30 $30 10,400 10,400 10,400 10,400 10,400 General: $220/SF See Below Parking Cost 15,000 Restaurant: 15,000$220/SF15,000 15,000 15,000 8,000 8,000 8,000 8,000 8,000 Gym: $180/SF 0 0 49640 Movie: 49640 49640 49640 $180/SF 49640 0 0 19,820 19,820 19,820 19,820 19,820 Included Building $100/SF 9,285 Included9,285 Parking Bld9,285 Cost 0 0 Shell 9,285 General: 9,285 0 0 13,392 Restaurant: 13,392$100/SF13,392 13,392 13,392 Gym: $80/SF 0 0 7,142 7,142 7,142 7,142 7,142 Movie: $80/SF

55,600 22,200 $0 10,400 15,000 8,000 49640 19,820 9,285 13,392 7,142

NA $0 NA

NA

55,600 22,200 $0 10,400 15,000 8,000 49640 19,820 9,285 13,392 7,142

$0 $0 $0 $0 $1,800,344 $1,854,354 $1,909,985 $1,967,284 $20,000 /$1,647,570 Stall (350 SF$1,696,997 per stall) $1,747,907 $0 $0 $0 $0 $669,237 $709,994 $731,294 $753,232 $775,829 $799,104 $35,000 / Stall (350 SF $689,314 per stall) $0 $0 $355,319 General: $365,978 $376,958 10% $388,266 $399,914 $411,912 NA $424,269 Cost of Sales: 3% of$0sales Expense Rate:$080% of $1.15/SF Gross Revenue $0revenue $0 $0 total revenue $0 $422,042Restaurant: $434,703$1.15/SF $447,744 $461,176 $475,011 $489,262 $503,940 Gym: $2.0/SF $213,211 $0 $0 $0 $0 $200,972 $207,001 $219,608 $226,196 $232,982 $239,971 Movie:$34 $2.0/SF #DIV/0! #DIV/0! #DIV/0! #DIV/0! $33 $35 $36 $37 $38 $40 $30.00 $30.90 $31.83 $32.78 $33.77 $34.78 $35.82 $36.90 $38.00 $39.14 $40.32 Upscale/Luxyry $34.00 $35.02 $36.07 $37.15 $38.27 $39.42 $40.60 $41.82 $43.07 $44.36 $45.69 $28.00 $28.84 $29.71 $30.60 $31.51 $32.46 $33.43 $34.44 $35.47 $36.53 $37.63 $25.00 $25.75 $26.52 $27.32 $28.14 General: $28.98$30/SF $29.85 $30.75 $31.67 $32.62 $33.60 $0 $0 $0 $0 $1,141,709 $1,600,209 $1,648,215 $1,697,662 $1,748,592 $1,207,179 $1,855,081 $0 $0 $0 $0 ($411,892) Restaurant: $0 $34/SF $0 $28,294,362 $0 $29,143,192 $0 $20,119,645 ($593,871) $0 $0 $0 $0 $0 $19,028,475 $26,670,150 $27,470,254 $30,918,013 Gym: $28/SF $0 $0 $0 $0 ($167,309) $0 $0 $0 $0 ($387,915) $0 ($927,540) $0 $0 $0 $0 ($88,830) Movie: $25/SF $0 $0 $0 $0 ($205,956) $0 ($5,392,889) ($2,880,617) ($6,721,439) ($6,721,439) $0 $0 $0 $0 $0 $0 $0 Parking Income NA $0 $0 NA $0 $0 ($105,510) $0 $0See below $0 $0 $0 NA $0 ($5,392,889) ($2,880,617) ($6,721,439)Rev ($6,721,439) $1,600,209 $1,648,215 $1,697,662 $1,748,592 $1,207,179 NA $31,845,553 $1,200k/Unit PAR$165 $1,141,709 $0 $0 $0 $0 ($50,243) $0 $0 $0 $0 $0 $0 Fee: $150 $50k/Unit $25k/Unit 1.59 2.23 2.29Monthly Parking 2.36 2.43 1.68 2.58 Parking Rate: $5.0 Parking Section $0 $0 ($215,134) ($466,719) ($718,553) See ($718,553) ($718,553)Hourly ($718,553) ($718,553) ($718,553) NA($718,553) 25% 0% 0% 0% 0% 50% 0% ($8,957) ($9,276) ($9,605) ($9,947) ($10,301) ($10,667) ($11,047) 25% 0% 0% 0% 0% 50% 0% ($13,265,042) 25% 0% 0% 0% 0% 0% NA 0% 8.00% 7.00% 8.00% $5,392,8898.00% $2,880,617 $789,889 25% 0% 0% 0% 0% 0% NA 0% NA 6.00% 6.00% 8.00% $2,880,617 $2,880,617 $789,889 $232.0$0 $85.2 ($102,682) $0$104.2 $0 $0 ($93,969) ($96,788) ($99,691) ($105,763) ($108,936) NA($112,204) $6,146,684 $15,637,270 $7,188,158 $18,372,145 $10,422,922 $0 $0 $0 $0 ($28,734) ($29,596) ($30,484) ($31,399) ($32,341) ($33,311) NA ($34,310) $5,392,88912.7% $8,273,505 $9,063,394 $9,063,394 $9,063,394 $9,063,394 $9,063,394 $9,063,394 $9,063,394 $9,063,394 $9,063,394 11.1%$0 14.1% $0 $0 $0 ($13,461) ($13,865) ($14,281) ($14,709) ($15,151) ($15,605) NA ($16,073) $018.0% $0 $6,146,684 $13,334,842 $13,325,885 $13,316,609 $13,307,004 $13,297,057 $13,286,756 $13,276,089 $13,265,042 17.2% NA 17.2% $0 $0 $0 $0 ($33,765) ($34,778) ($35,822) ($36,896) ($38,003) ($39,143) ($40,317) 1 13 25 37 49 61 73 $0 $0 $0 $0 ($18,008) ($18,548) ($19,105) ($19,678) ($20,268) ($20,876) ($21,503) 12 24 36 48 60 72 84 #DIV/0! #DIV/0! #DIV/0! #DIV/0! $1.69 $1.74 $1.79 $1.85 $1.90 $1.96 $2.02 65% 54% 45% 21% NA $1.15 0.00 $1.18 $1.22 $1.26 $1.29 $1.33 $1.37 $1.41 $1.46 $1.50 $1.55 2.79 $0 2.17 17.75 $1,030,039 NA ($5,392,889) ($2,880,617) ($789,889) $423,156 $881,656 $929,662 $979,109 $488,626 $17,861,958 $1.15 $1.18 $1.22 $28,066,740 $1.26 $1.29 $1.33 $1.37 $1.41 $1.46 $1.50 NA $1.55 $108,151,924 $13,334,842 $2,414,893 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2.00 $2.06 $2.12 $20,179,807 $2.19 $2.25 $2.32 $2.39 $2.46 $2.53 $2.61 NA $2.69 $38,202,431 $9,063,394 $8,479,439 ($5,392,889) ($789,889) $0 $423,156 $881,656 $929,662 $979,109 $1,030,039 $488,626 $17,861,958 $2.00 ($2,880,617) $2.06 $2.12 $2.19 $2.25 $2.32 $2.39 $2.46 $2.53 $2.61 $2.69 ($5,392,889) ($8,640,238) ($7,758,582) ($6,828,919) $13,530,812 $0 ($8,273,505) $0 ($9,063,394) $0 ($9,063,394) $0 $1,141,709 $1,600,209 $1,648,215 ($5,849,810) $1,697,662 ($4,819,772) $1,748,592 ($4,331,146) $1,207,179 $1,855,081 15.0% 15.0% 35.0% 35.0% ($2,880,617) ($2,880,617) ($6,721,439) ($6,721,439) ($2,512,272)

$0 6.5%

$0 13.5%

$0 14.2%

$0 14.9%

$0 15.7%

$0 7.5%

$0 272.7%

($11,325,133)

($5,427,811) ($8,970,248) ($6,721,439)

$2,272,928

$3,924,261

$4,041,989

$4,163,248

$4,288,146

$3,822,920

$67,207,101

($11,325,133)

($5,427,811)

$1,424,248

$3,075,581

$3,193,309

$3,314,568

$3,439,466

$2,974,239

$50,691,125

($789,889)

$0

Transaction Cost

3.0%

($927,540)

Total Development Costs Unleveraged Net Cash Flow Finance/ Source 2.17 Average DSCR NAIOP Real EstateDebt/ Challenge Service 3.5% Financial Underwriting Summary Principal Repayment 30 years Principal Repayment at exit Equity (Cash+Land) 55% (Cash Contribution) RETAIL 45% DESIGN ASSUMPTIONS Debt Equity (Cash + Land) GROSS SF Debt Amount Efficiency Factor RENTABLE SF (Principal Payment Start) AverageUnit UnitValue SF Input Unit (Principal Payment End) PARKING STALLS Space ReturnProgram on Equity Avg Inflation Factor 3% Equity Cash Flow COST ASSUMPTIONS

SF Total GSF 55,600 Tax Concequences LAND VALUE DEVELOPMENT UNIT PER 22,200

SF General Total Benefit SITE - INFRASTRUCTURE ( $ / SF OF SITE ) 10,400

SF Restaurant Cumulative Total Benefit HARD COSTS + SOFT COSTS ( $ / Gross SF )

SF Gym 15,000 SF Movie Theater 8,000 Return Retail + Retail Parking NSF 89% Net Present Value 7% General 90% Cash on Cash Return per year TENANT IMPROVEMENT ($ / Net SF ) Restaurant 90% Cash on Cash Return on Project $13,530,812 Gym 90% Combined Net Cash Flow Movie Theater 85% Unleveraged IRR Before Taxes 14.1% Net Operating Income Combined Equity Cash Flow Gross Revenue PARKING ABOVE Leveraged IRR Before Taxes 17.2% GRADE ($ / STALL) General BELOW GRADE ($ / STALL) PARKING Restaurant BASE YR. OPERATING EXPENSES ( $ / Gross SF / YR ) Gym Movie Theater Rent (NNN) per s.f.

General $30.00 Restaurant $34.00 $28.00 INCOME ASSUMPTIONS Gym Movie Theater RENTAL$25.00 INCOME ( $ / Net SF / MO ) Vacancy & Credit Loss General Restaurant Gym SALE INCOME ( $ / USABLE SF ) Movie Theater PARKING INCOME ( $ / SF / MO ) Vacancy & Credit Loss (%) General Restaurant VALUE ASSUMPTION Gym Discount Rate Movie Theater Exit Capitalization Rate Operations & Maintenance ExpensesVALUE per NSF ( NPV / NSF ) NPV General Restaurant Unleveraged IRR Before Taxes Leveraged IRR Before Taxes Gym Movie Theater DEBT ASSUMPTIONS Expense per s.f.

LOAN TO VALUE General $1.15 SERVICE COVERAGE Average DEBT Restaurant $1.15 TOTAL DEBT Gym $2.00 TOTAL EQUITY(Inclu Land) Movie Theater $2.00

($21,716,382)

($5,392,889) ($2,880,617) ($6,721,439) ($6,721,439)

$0

$0

$0

$0

$0

$0

$0

$19,172,736

($5,392,889) ($2,880,617) ($6,721,439) ($6,721,439)

$1,141,709 1.59 ($718,553) ($8,957)

$1,600,209 2.23 ($718,553) ($9,276)

$1,648,215 2.29 ($718,553) ($9,605)

$1,697,662 2.36 ($718,553) ($9,947)

$1,748,592 2.43 ($718,553) ($10,301)

$1,207,179 1.68 ($718,553) ($10,667)

$31,845,553 2.58 ($718,553) ($11,047) ($13,265,042)

$0

$0

($215,134)

($466,719)

Block 25

Net Operating Income Hard Cost + Soft Cost Notes Development Costs Excludes 9.5% Washington State Sales Built per year % Assumes 2013 pricing Cost per year Construction Costs assume Leed Silver Land Cost ($2,512,272) Included 10% contingency Site - Infrastructure $30 Hard Costs + Soft Costs General $220

$11,944,010 $6,551,122 Total $13,334,842

$10,898,645

per SF @

55,600

per SF @

22,200

($2,512,272) ($1,668,000) ($11,312,000) ($4,884,000)

Year 0 220,500 Year 1 $5,392,889 $8,273,505 $0 80% $0 Permiting 176,400 & Planning 1,2002014 2013 1 per Unit

$789,889 $789,889 Hotel $6,146,684 $7,188,158 Year 2 Year 3 Year 4 $9,063,394 $9,063,394 $9,063,394 116,000 $6,146,684 $13,334,842 $13,325,885 65% 67,400 Construction 1 400 2015 2016 2017 12 50% of Occupancy

Retail

Retail Parking

Open Space

Year 5 Year 6 Year 161,184 7 Year 8 Year 9 10 $9,063,394 $9,063,394 $9,063,394 $9,063,394 $9,063,394 $9,063,394 55,600 0Year $13,316,609 $13,307,004 $13,297,057 $13,265,042 89% 95%$13,286,756 $13,276,089 100% 49,640 153,125 0 13 25 Operation 37 49 61 73 350 2021 60 2018NA 2019 36 2020 48 2022 72 NA2023 84 24 NA Total 208 lots, (3.2 per 1,000 SF) Exclude: For sale and hotel gurst spaces ($5,392,889) ($2,880,617) ($789,889) $0 $423,156 $881,656 $929,662 $979,109 $1,030,039 $488,626 $17,861,958 0 0 0 0 55,600 55,600 55,600 55,600 55,600 55,600 55,600 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $45/NSF $86,089/Unit $37,937/Unit $51/NSF $23/NSF 22,200 22,200 22,200 22,200 22,200 22,200 NA 22,200 ($5,392,889) ($2,880,617) ($789,889) $0 $423,156 $881,656 $929,662 $979,109 $1,030,039 $488,626 $17,861,958 $30 $30 $30 $30 $30 $0 10,400 10,400 10,400 ($5,849,810) 10,400 ($4,819,772) 10,400 ($4,331,146) 10,400 10,400 ($5,392,889)$460 ($8,273,505) ($9,063,394) ($9,063,394) ($8,640,238) ($7,758,582) ($6,828,919) $13,530,812 NA $240 General: $220/SF See Below Parking Cost NA 15,000 Restaurant: 15,000$220/SF15,000 15,000 15,000 15,000 15,000 8,000 8,000 8,000 8,000 8,000 8,000 Gym:8,000 $180/SF 0 0 0 0 49640 Movie: 49640 49640 49640 49640 49640 $180/SF 49640 $10,422,922 0 0 0 0 19,820 19,820 19,820 19,820 19,820 19,820 19,820 6.5% 13.5% 14.2% 14.9% 15.7% 7.5% 272.7% NA Included0 Building Shell Included Building $100/SF 9,285 Included9,285 Parking Bld9,285 Cost 0 0 0 Shell 9,285 General: 9,285 9,285 NA 9,285 113.29% Restaurant: $100/SF 0 0 0 0 13,392 13,392 13,392 13,392 13,392 13,392 13,392 ($11,325,133) ($5,427,811) ($8,970,248) ($6,721,439) $2,272,928 $3,924,261 $4,041,989 $4,163,248 $4,288,146 $3,822,920 $67,207,101 Gym: $80/SF 0 0 0 0 7,142 7,142 7,142 7,142 7,142 7,142 7,142 Movie: $80/SF ($11,325,133) ($5,427,811) ($789,889) $0 $1,424,248 $3,075,581 $3,193,309 $3,314,568 $3,439,466 $2,974,239 $50,691,125 $12,624,440 $0 $0 $0 $0 $1,800,344 $1,854,354 $1,909,985 $1,967,284 $20,000 /$1,647,570 Stall (350 SF$1,696,997 per stall) $1,747,907 $5,128,005 $0 $0 $0 $0 $669,237 $689,314 $709,994 $731,294 $753,232 $775,829 $799,104 $35,000 / Stall (350 SF per stall) $2,722,617 $0 $0 $355,319 General: $365,978 $376,958 10% $388,266 $399,914 $411,912 NA $424,269 NA Cost of Sales: 3% of$0sales Expense Rate:$080% of $1.15/SF Gross Revenue $3,233,877 $0revenue $0 $0 total revenue $0 $422,042Restaurant: $434,703$1.15/SF $447,744 $461,176 $475,011 $489,262 $503,940 2013 2014 2015 2016 2017 2018 $2.0/SF 2019 2020 2021 2022 2023 Gym: $1,539,941 $0 $0 $0 $0 $200,972 $207,001 $213,211 $219,608 $226,196 $232,982 $239,971 Sources Movie:$34 $2.0/SF #DIV/0! #DIV/0! #DIV/0! #DIV/0! $33 $35 $36 $37 $38 $40 Equity $30.00 $30.90 $31.83 $32.78 $33.77 $34.78 $35.82 $36.90 $38.00 $39.14 $40.32 Land $2,512,272 $0 $0Upscale/Luxyry $0 $0 $0 $0 $0 $0 $0 $0 $34.00 $35.02 $36.07 $37.15 $38.27 $39.42 $40.60 $41.82 $43.07 $44.36 $45.69 Cash $2,880,617 $2,880,617 $789,889 $0 $0 $0 $0 $0 $0 $0 $0 $28.00 $28.84 $29.71 $30.60 $31.51 $32.46 $33.43 $34.44 $35.47 $36.53 $37.63 Debt $0 $0 $6,146,684 $7,188,158 $0 $0 $0 $0 $0 $0 $0 $25.00 $25.75 $26.52 $27.32 $28.14 General: $28.98$30/SF $29.85 $30.75 $31.67 $32.62 $33.60 NOI $0 $0 $0 $0 $1,141,709 $1,600,209 $1,648,215 $1,697,662 $1,748,592 $1,207,179 $1,855,081 ($1,005,763) $0 $0 $0 $0 ($411,892) Restaurant: $0 $34/SF $0 $0 $0 ($593,871) $0 Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $29,990,473 Gym: $28/SF ($555,224) $0 $0 $0 $0 ($167,309) $0 $0 $0 $0 ($387,915) $0 TOTAL $5,392,889 $2,880,617 $6,936,572 $7,188,158 $1,141,709 $1,600,209 $1,648,215 $1,697,662 $1,748,592 $1,207,179 $31,845,553 ($294,786) $0 $0 $0 $0 ($88,830) Movie: $25/SF $0 $0 $0 $0 ($205,956) $0 Uses Parking Income NA NA $0 ($105,510) $0 NA $0 $0 ($105,510) $0 $0See below $0 $0 $0 NA $0 Development $5,392,889 $2,880,617 $6,721,439 Rev $6,721,439 $0 $0 $0 $0 $0 $0 NA $0 NA Cost $1,200k/Unit PAR$165 ($50,243) $0 $0 $0 $0 ($50,243) $0 $0 $0 $0 $0 $0 Parking Fee: $150 Debt Service $50k/Unit $0 $0 $215,134 $25k/Unit $466,719 $718,553 $718,553 $718,553Monthly $718,553 $718,553 $718,553 $718,553 Hourly Parking Rate: $5.0 NARepayment See Parking Section NA Principal $13,265,042 25% 0% 0% 0% 0% 50% 0% Return on Equity $0 $423,156 $881,656 $929,662 $979,109 $1,030,039 $488,626 $17,861,958 25% 0% 0% 0% 0% 50% 0% TOTAL $5,392,889 $2,880,617 $6,936,572 $7,188,158 $1,141,709 $1,600,209 $1,648,215 $1,697,662 $1,748,592 $1,207,179 $31,845,553 25% 0% 0% 0% 0% 0% 0% 8.00% 8.00% 7.00% 8.00% $0 8.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 NA $0 25% 0% 0% 0% 0% 0% NA 0% NA NA 6.00% 6.00% 8.00% $99.5 $232.0$0 $85.2 ($102,682) ($720,032) $0$104.2 $0 $0 ($93,969) ($96,788) ($99,691) ($105,763) ($108,936) NA($112,204) $44,432,338 $18,372,145 $10,422,922 ($220,175) $0 $0 $0 $15,637,270 $0 ($28,734) ($29,596) ($30,484) ($31,399) ($32,341) ($33,311) NA ($34,310) 0.0% 11.1%$0 14.1% ($103,145) $0 12.7% $0 $0 ($13,461) ($13,865) ($14,281) ($14,709) ($15,151) ($15,605) NA ($16,073) 16.9% 18.0% 17.2% NA 17.2% ($258,725) $0 $0 $0 $0 ($33,765) ($34,778) ($35,822) ($36,896) ($38,003) ($39,143) ($40,317) ($137,987) $0 $0 $0 $0 ($18,008) ($18,548) ($19,105) ($19,678) ($20,268) ($20,876) ($21,503) #DIV/0! #DIV/0! #DIV/0! #DIV/0! $1.69 $1.74 $1.79 $1.85 $1.90 $1.96 $2.02 67% 65% 54% 45% 21% NA $1.15 0.00 $1.18 $1.22 $1.26 $1.29 $1.33 $1.37 $1.41 $1.46 $1.50 NA $1.55 8.06 2.79 2.17 17.75 $1.15 $1.18 $1.22 $28,066,740 $1.26 $1.29 $1.33 $1.37 $1.41 $1.46 $1.50 NA $1.55 $151,968,399 $108,151,924 $13,334,842 $2,414,893 $2.00 $2.06 $2.12 $20,179,807 $2.19 $2.25 $2.32 $2.39 $2.46 $2.53 $2.61 NA $2.69 $75,925,070 $38,202,431 $9,063,394 $8,479,439 $2.00 $2.06 $2.12 $2.19 $2.25 $2.32 $2.39 $2.46 $2.53 $2.61 $2.69

553,284 81% 446,565 NA Total 437

Tax certification

$5,392,889 $2,880,617 $2,880,617 $2,880,617 Condominium

BLOCK 25 RETAIL

$0

$0

$0

$0

$1,141,709

$1,600,209

$1,648,215

$1,697,662

$1,748,592

$1,207,179

$1,855,081

15.0% 15.0% 35.0% 35.0% ($2,880,617) ($2,880,617) ($6,721,439) ($6,721,439) ($2,512,272)

$0

$0

$0

$0

$0

$0

$0

NAIOP Real Estate Challenge Financial Underwriting Summary

BLOCK 25 RETAIL PARKING

Block 25

RETAIL PARKING

DESIGN ASSUMPTIONS

Total

Condominium

Hotel

Year 0 Year 1 220,500 Year 080% Year 1 Permiting & Planning 176,400 20131,200 2014 1 per Unit

Retail

Year 116,000 2 Year 3 Year 2 65% Year 3 Construction 67,400 2015 400 2016 50% of Occupancy

Year 4 Year 4

Retail Parking

Open Space

Year 5 Year 6 Year 7 Year 8 Year 9 0 Year 10 55,600 161,184 Year 5 Year 6 Year 7 Year 8 Year 9 100% Year 10 89% 95% Operation 49,640 153,125 0 NA 350 2018 2019 2020 2021 2022 NA 2023 NA Total 208 lots, (3.2 per 1,000 SF) Exclude: For sale and hotel gurst spaces

GROSS SF 553,284 Efficiency Factor 81% RENTABLE SF 446,565 NA Total Input Average UnitUnit SFUnit Value 2017 PARKING STALLS 437 Assumptions Inflation Factor 3% COST ASSUMPTIONS Structured Parking Spaces 208 208 208 208 208 208 208 $45/NSF $86,089/Unit $37,937/Unit $51/NSF $23/NSF NA LAND VALUE PER DEVELOPMENT UNIT Monthly Fees SITE - INFRASTRUCTURE $30 $30 $ $30 Monthly Parking Fee $150 ( $ / SF perOF stallSITE ) $ 150.0 154.5 $ 159.1$30$ 163.9 $ 168.8 $$30 173.9 $ 179.1 $ 184.5 $ 190.0 $ 195.7$0 $ 201.6 HARD COSTS + SOFT COSTS ( $ / Gross SF ) NA $460 $240 General: $220/SF See Below Parking Cost NA Allocation to Monthly Use 20 stalls 20 20 20 20 20 20 20 Restaurant: $220/SF Percent Occupancy by Monthly Contracts 0% 0.0% 0.0% 60.0% 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% Gym: $180/SF Hourly Fees Movie: $180/SF Number of Spaces 188 stalls 188 188 188 188 188 188 188 TENANT IMPROVEMENT NA Included Building Shell Included Building Shell General: $100/SF Included Parking Nonwork Days 108 ($ / Net SF ) 108 108 108 108 Bld Cost108 108NA 108 Restaurant: $100/SF Daily Parking Hours 24 24 24 24 24 24 24 24 24 24 24 24 Gym: $80/SF Percent Utilization 0% 0% 0% 20% 30% 30% 30% 30% 30% 30% Movie: $80/SF Work Days 257 257 257 257 257 257 257 257 DailyPARKING Parking Hours 24 24 24 24 24 24per stall) 24 24 24 24 24 24 ABOVE GRADE ($ / STALL) $20,000 / Stall (350 SF Percent Utilization 0% 0%$35,000 /0% 20%per stall) 30% 30% 30% 30% 30% 30% PARKING BELOW GRADE ($ / STALL) Stall (350 SF HourlyEXPENSES Parking Rate ( $ $6.00 6.03%$ of sales6.2 Expense $ 6.4Rate: $ 80%6.6 6.8 $ $1.15/SF 7.0 $ 7.210% $ Gross7.4 $ 7.6 $ 7.8NA$ 8.1 BASE YR. OPERATING / Gross SF / YR ) NA Cost of $Sales: of $ General: Revenue revenue total revenue Restaurant: $1.15/SF Net Operating Income Gym: $2.0/SF Parking Revenue Movie: $2.0/SF Monthly Parking $280,765 $0 $0 $0 $0 $24,311 $39,647 $40,837 $42,062 $43,324 $44,623 $45,962 Hourly Parking $24,427,113 $0 $0 $0 $0 $2,221,921 $3,432,867 $3,535,853 $3,641,929 $3,751,187 $3,863,722 $3,979,634 Upscale/Luxyry Total Parking Revenue $24,707,878 $0 $0 $0 $0 $2,246,231 $3,472,514 $3,576,690 $3,683,990 $3,794,510 $3,908,346 $4,025,596 Expenses ($8,543,738) $0 $0 $0 $0 ($1,115,012) ($1,148,462) ($1,182,916) ($1,218,404) ($1,254,956) ($1,292,605) ($1,331,383) INCOME ASSUMPTIONS Operating Expenses (Percent ofRENTAL Gross Revenue) 10%( $ / Net SF / MO ) 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% General: $30/SF INCOME Net Operating Income Development Costs

$16,164,140

Percent Built by Year NA Cost per year SALE INCOME ( $ / USABLE SF ) NA Land ($3,459,240) PARKING INCOME ( $ / SF / MO ) 76,558 ($2,296,731) Site - Infrastructure $30.00 per SF @ NA Construction Cost Above ground (Inclu Soft Cost) $20,000 per stall @ 208 ($4,155,989) Construction Cost Below ground (Inclu Soft Cost) $35,000 per stall @ $0 VALUE ASSUMPTION Proportion of Open Space $0 Discount per SF @ 1,217 8.00% $0 Rate Included Developers Fee Exit Capitalization Ratein the other itemsNA $99.5 OtherVALUE Fees per NSF ( NPV / NSF ) NPV WST 9.5% @ $6,452,719$44,432,338 ($613,008) Unleveraged IRR Before Taxes 0.0% Total Development Costs ($10,728,248) Leveraged IRR Before Taxes 16.9% Annual Cash Flow Net Operating Income $16,164,140 DEBT ASSUMPTIONS Asset Value 8.0% Exit Cap LOAN TORate VALUE 67% Costs of Sale 3% COVERAGE Average DEBT SERVICE 8.06 TOTAL DEBT $151,968,399 Total Development Costs ($10,728,248) TOTAL EQUITY(Inclu Land) $75,925,070 Unleveraged Net Cash Flow $38,103,226 Finance/ Source 17.7 Because of Equity % Average DSCR Debt/ Service 3.5% Hard Cost + Soft Cost Notes Principal Repayment years Excludes 9.5% Washington State Sales30Tax Principal Repayment at exit Assumes 2013 pricing Equity (Cash+Land) 79% $8,479,439 Because of Land Value contribution Construction Costs assume Leed Silver certification (Cash10% Contribution) $5,020,199 Included contingency Debt 21% $2,414,893 Equity Amount Debt Amount (Principal Payment Start)

$0

$0

$0

$0

35% 35% 30% 0% NA ($2,473,005) ($2,547,195)NA($2,248,809) $0 $1,200k/Unit Rev PAR$165 ($3,459,240) $50k/Unit $25k/Unit

8.00% NA $104.2 $18,372,145 12.7% 18.0%

$1,131,219 $2,324,052 $2,465,587 $2,539,554 Restaurant: $34/SF $2,393,773 Gym: $28/SF Movie: $25/SF See $0 $0 $0 below Parking $0 Income $0

See Parking Section

Monthly Parking Fee: $150 Hourly Parking Rate: $5.0

7.00% 6.00%

8.00% 8.00%

8.00% 6.00% $232.0 $15,637,270 11.1% 17.2%

$0 $0 $0 $0 $0 $054% 65% 0.00 2.79 $108,151,924 $28,066,740 ($5,932,245) ($2,547,195) ($2,248,809) $38,202,431 $20,179,807 ($5,932,245) ($2,547,195) ($2,248,809) $0

$0

$5,932,245 $2,473,005

$2,547,195 $2,547,195

$5,932,245 $0

$8,479,439 $0

$0 $0 $0 $0

($81,563)

($84,521)

$2,330,372 $8,479,439 $2,330,372

$84,521 $8,479,439 $2,414,893

$85.2 $10,422,922 14.1% 17.2%

$2,615,741

$0NA NA

NA NA NA NA NA NA

$2,324,052 $2,393,773 $2,465,587 $2,539,554 $2,615,741 $29,050,649 $29,922,168 $30,819,833 45% 21% $31,744,428 $32,696,761NA 2.17 17.75 NA $2,414,893 $0$13,334,842 $0 $0 $0 $0 $0NA $9,063,394 $8,479,439 NA $1,131,219 $2,324,052 $2,393,773 $2,465,587 $2,539,554 $2,615,741 8.7 17.9 18.4 18.9 19.5 20.1 ($130,127) ($130,127) ($130,127) ($130,127) ($130,127) ($130,127) ($1,622) ($1,680) ($1,740) ($1,801) ($1,865) ($1,932)

$8,479,439 $2,411,592 13

$8,479,439 $2,409,852 25

$8,479,439 $2,408,051 37

$0

NA

$1,131,219 $14,140,243

$8,479,439 $2,413,271 1

$2,694,213

$8,479,439 $2,406,185 49

$8,479,439 $2,404,253 61

$2,694,213 $33,677,664 ($1,010,330) $0 $35,361,547 20.7 ($130,127) ($2,001) ($2,402,253)

$8,479,439 $2,402,253 73

Operating Expenses (Percent of Gross Revenue) 10% Net Operating Income Development Costs Percent Built by Year NAIOP Real Estate Challenge Cost per year Financial Underwriting Summary Land

Block 25

$16,164,140

($3,459,240) ($2,296,731) ($4,155,989) $0 $0

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

$0

$0

$0

$0

$1,131,219

$2,324,052

$2,393,773

$2,465,587

$2,539,554

$2,615,741

$2,694,213

35% 30% ($2,547,195) ($2,248,809)

0% $0

$0

$0

$0

35% ($2,473,005) ($3,459,240)

$0 $0 $0 $0 BLOCK 25 RETAIL PARKING

76,558 Site - Infrastructure $30.00 per SF @ Construction Cost Above ground (Inclu Soft Cost) $20,000 per stall @ 208 ConstructionRETAIL Cost Below ground (Inclu Soft Cost) $35,000 per stall @ PARKING Total Condominium Hotel Retail Retail Parking Open Space Proportion of Open Space $0 per SF @ 1,217 DESIGN ASSUMPTIONS Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 0 Year 10 Included in the other items Developers Fee GROSS SF 553,284 220,500 116,000 55,600 161,184 Year 080% Year 1 Year 2 65% Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 100% Year 10 Other Fees Efficiency Factor 81% 89% 95% Permiting & Planning Construction Operation ($613,008) WST 9.5%RENTABLE@ SF$6,452,719 446,565 176,400 67,400 49,640 153,125 0 NA Total NA 350 Input Average UnitUnit SFUnit Value 20131,200 2014 2015 400 2016 2017 2018 2019 2020 2021 2022 NA 2023 Total Development Costs ($10,728,248) PARKING STALLS 1 per Unit 50% of Occupancy NA 437 Total 208 lots, (3.2 per 1,000 SF) Assumptions Annual Cash Flow Exclude:$2,465,587 For sale and hotel gurst $2,615,741 spaces Inflation FactorIncome 3% Net Operating $16,164,140 $0 $0 $0 $0 $1,131,219 $2,324,052 $2,393,773 $2,539,554 $2,694,213 COST ASSUMPTIONS Structured Parking Spaces - Exit Cap Rate 208 $29,050,649 208 $29,922,168 208 $30,819,833 208 $31,744,428 208 $32,696,761 208 208 $0 $0 $0 $0 $14,140,243 $33,677,664 Asset Value 8.0% $45/NSF $86,089/Unit $37,937/Unit $51/NSF $23/NSF NA ($1,010,330) LAND VALUE PER DEVELOPMENT UNIT Monthly Costs of Fees Sale 3% SITE - INFRASTRUCTURE $30 $30 $ $30 173.9 $ $30 $0 Parking Fee $150 ( $ / SF perOF stallSITE ) $ 150.0 154.5 $ 159.1$30$ 163.9 168.8 179.1 $ 184.5 190.0 195.7 201.6 Total DevelopmentHARD CostsMonthly ($10,728,248) ($5,932,245) $0 $ $0 $ $220/SF $0 $0 Below $0 $ Cost $0 $ $0NA$ $0 COSTS + SOFT COSTS ( $ / Gross SF ) NA $460 ($2,547,195) ($2,248,809) $240 General: See Parking Allocation to Monthly Use 20 stalls 20 20 20 20 20 20 20 Restaurant: $220/SF$2,393,773 Unleveraged Net Cash Flow $38,103,226 ($5,932,245) ($2,547,195) ($2,248,809) $0 $1,131,219 $2,324,052 $2,465,587 $2,539,554 $2,615,741 $35,361,547 Percent Occupancy by Monthly Contracts 0% 0.0% 0.0% 60.0% 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% Gym: $180/SF Finance/ Source 17.7 Average DSCR 8.7 17.9 18.4 18.9 19.5 20.1 20.7 Because of Equity % Hourly Fees Movie: ($130,127) $180/SF Debt/ Service 3.5% $0 $0 ($81,563) ($84,521) ($130,127) ($130,127) ($130,127) ($130,127) ($130,127) ($130,127) Number of Spaces 188 stalls 188 188 188 188 188 188 188 Principal Repayment 30 years ($1,622) ($1,680) ($1,740) ($1,801) ($1,865) ($1,932) ($2,001) TENANT IMPROVEMENT NA Included Building Shell Included Building Shell General: $100/SF Included Parking Nonwork Days 108 ($ / Net SF ) 108 108 108 108 Bld Cost108 108NA 108 Principal Repayment at exit ($2,402,253) Restaurant: $100/SF Daily Parking Hours 24 24 24 24 24 24 24 24 24 24 24 24 Equity (Cash+Land) 79% $8,479,439 $5,932,245 $2,547,195 Because of Land Value contribution Gym: $80/SF Percent Utilization 0% 0% 0% 20% 30% 30% 30% 30% 30% 30% (Cash Contribution) $5,020,199 $2,473,005 $2,547,195 Movie: $80/SF Work Days 257 257 257 257 257 257 257 257 Debt 21% $2,414,893 $2,330,372 $84,521 DailyPARKING Parking Hours 24 24 24 24 24 24per stall) 24 24 24 24 24 24 ABOVE GRADE ($ / STALL) / Stall $8,479,439 (350 SF Equity Amount $5,932,245 $8,479,439 $8,479,439 $20,000 $8,479,439 $8,479,439 $8,479,439 $8,479,439 $8,479,439 $8,479,439 $8,479,439 Percent Utilization 0% 0% 20%per stall) 30% 30% 30% 30% 30% 30% PARKING BELOW GRADE ($ / STALL) /0% Stall $2,413,271 (350 SF Debt Amount $0 $0 $2,330,372 $35,000 $2,414,893 $2,411,592 $2,409,852 $2,408,051 $2,406,185 $2,404,253 $2,402,253 HourlyEXPENSES Parking Rate ( $ $6.00 6.03%$ of sales6.2 Expense $ 6.4Rate: $ 80%6.6 6.8 $ $1.15/SF 7.0 $ 7.210% $ Gross7.4 $ 7.6 $ 7.8NA$ 8.1 BASE YR. OPERATING / Gross SF / YR ) NA Cost of $Sales: of $ General: Revenue (Principal Payment Start) 1 13 25 37 49 61 73 revenue total revenue Restaurant: $1.15/SF Net Operating Income (Principal Payment End) 12 24 36 48 60 72 84 Gym: $2.0/SF Parking Revenue Return on Equity Movie: $2.0/SF Monthly Parking $280,765 $0 $0 $0 $0 $24,311 $39,647 $40,837 $42,062 $43,324 $44,623 $45,962 Equity Cash Flow ($5,932,245) ($2,547,195) $0 $0 $1,001,092 $2,193,925 $2,263,646 $2,335,459 $2,409,427 $2,485,613 $32,829,167 Hourly Parking $24,427,113 $0 $0 $0 $0 $2,221,921 $3,432,867 $3,535,853 $3,641,929 $3,751,187 $3,863,722 $3,979,634 Upscale/Luxyry $0 $0 $0 $0 $0 $0 $3,576,690 $0 $0 $3,794,510 $0 $0 $0 Total Parking Revenue Tax Concequences $24,707,878 $0 $0 $0 $0 $2,246,231 $3,472,514 $3,683,990 $3,908,346 $4,025,596 Total Benefit ($5,932,245) ($2,547,195) $0 $0 ($1,115,012) $1,001,092 ($1,148,462) $2,193,925 ($1,182,916) $2,263,646 ($1,218,404) $2,335,459 ($1,254,956) $2,409,427 ($1,292,605) $2,485,613 $32,829,167 Expenses ($8,543,738) $0 $0 $0 $0 ($1,331,383) INCOME ASSUMPTIONS Total ($5,932,245) ($8,479,439) ($5,284,423) ($685,317) Operating Expenses Cumulative (Percent ofRENTAL GrossBenefit Revenue) 10%( $ / Net SF / MO ) 10% 10% ($8,479,439) 10% ($8,479,439) 10% ($7,478,347) 10% 10% ($3,020,777) 10% 10% $1,724,109 10% $4,209,723 10% $37,038,890 10% General: $30/SF INCOME Net Present Value 8% $13,406,335 Net Operating Income $16,164,140 $0 $0 $0 $0 $1,131,219 $2,324,052 $2,465,587 $2,539,554 $2,615,741 $2,694,213 Restaurant: $34/SF $2,393,773 Cash on CashCosts Return per year 11.8% 25.9% 26.7% 27.5% 28.4% 29.3% 387.2% Gym: $28/SF Development Cash on Cash Return on Project 436.81% Movie: $25/SF Percent Built by Year $37,038,890 35% 35% 30% 0% Unleveraged IRR Before TaxesCost per year 20.3% See NA NA ($2,473,005) ($2,547,195)NA($2,248,809) $0 $0 $0 $0 below Parking $0 Income $0 $0NA $0 SALE INCOME21.8% ( $ / USABLE SF ) NA $1,200k/Unit Rev PAR$165 NA Leveraged IRR Before Taxes Land ($3,459,240) ($3,459,240) Monthly Parking Fee: $150 PARKING INCOME ( $ / SF / MO ) $50k/Unit $25k/Unit 76,558 ($2,296,731) Site - Infrastructure $30.00 per SF @ Hourly Parking Rate: $5.0 NA See Parking Section NA Construction Cost Above ground (Inclu Soft Cost) $20,000 per stall @ 208 ($4,155,989) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Construction Cost Below ground (Inclu Soft Cost) $35,000 per stall @ $0 VALUE ASSUMPTION Sources Proportion of Open Space $0 Discount per SF @ 1,217 $0 Rate 8.00% 8.00% 8.00% 7.00% 8.00% NA Included Developers Fee Exit Capitalization Ratein the other itemsNAEquity NA 6.00% 6.00% 8.00% NA Land $3,459,240 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $99.5 $104.2 $232.0 NA $85.2 OtherVALUE Fees per NSF ( NPV / NSF ) Cash $2,473,005 $2,547,195 $0 $0 $0 $0 $0 $0 $0 $0 $0 NPV $18,372,145 $15,637,270 NA $10,422,922 WST 9.5% @ $6,452,719$44,432,338 ($613,008) Unleveraged IRR Before Taxes 0.0% 12.7% 11.1% $84,521 14.1%$0 Debt $0 $0 $2,330,372 $0 $0 $0 $0 $0NA $0 Total Development Costs ($10,728,248) Leveraged IRR Before Taxes 16.9% 18.0% 17.2% 17.2% NOI $0 $0 $0 $0 $1,131,219 $2,324,052 $2,393,773 $2,465,587 $2,539,554 $2,615,741NA $2,694,213 Annual Cash Flow Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $32,667,334 Net Operating Income $16,164,140 $0 $0 $0 $0 $1,131,219 $2,324,052 $2,393,773 $2,465,587 $2,539,554 $2,615,741 $2,694,213 DEBT ASSUMPTIONS TOTAL $5,932,245 $2,547,195 $2,330,372 $84,521 $1,131,219 $2,324,052 $2,393,773 $2,465,587 $2,539,554 $2,615,741 $35,361,547 $0 $0 $054% $0 $14,140,243 $29,050,649 $29,922,168 $30,819,833 $31,744,428 $32,696,761NA $33,677,664 Asset Value 8.0% Exit Cap LOAN TORate VALUE 67% 65% 45% 21% Uses Costs of Sale 3% COVERAGE Average DEBT SERVICE 8.06Development Cost 0.00 2.79 2.17 17.75 NA ($1,010,330) $5,932,245 $2,547,195 $2,248,809 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEBT $151,968,399 $108,151,924 $28,066,740 $0 $2,414,893 Total Development Costs ($10,728,248) ($5,932,245) ($2,547,195) ($2,248,809) $0$13,334,842 $0 $0 $0 $0 $0NA $0 Debt Service $0 $0 $81,563 $84,521 $130,127$9,063,394 $130,127 $130,127 $130,127 $130,127 $130,127NA $130,127 TOTAL EQUITY(Inclu Land) $75,925,070 $38,202,431 $20,179,807 $8,479,439 Unleveraged Net Cash Flow $38,103,226 ($2,547,195) ($2,248,809) $0 $1,131,219 $2,324,052 $2,393,773 $2,465,587 $2,539,554 $2,615,741 $35,361,547 Principal Repayment ($5,932,245) $2,402,253 Finance/ Source 17.7 Average DSCRon Equity 8.7 $2,193,925 17.9 $2,263,646 18.4 18.9 $2,409,427 19.5 20.1 $32,829,167 20.7 Because of Equity % Return $0 $1,001,092 $2,335,459 $2,485,613 Debt/ Service 3.5% $0 $0 $2,330,372 ($81,563) ($84,521) ($130,127) $2,324,052 ($130,127) $2,393,773 ($130,127) ($130,127) $2,539,554 ($130,127) $2,615,741 ($130,127) $35,361,547 ($130,127) Hard Cost + Soft Cost Notes TOTAL $5,932,245 $2,547,195 $84,521 $1,131,219 $2,465,587 Principal Repayment years ($1,622) ($1,680) ($1,740) ($1,801) ($1,865) ($1,932) ($2,001) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Excludes 9.5% Washington State Sales30Tax Principal Repayment at exit ($2,402,253) Assumes 2013 pricing Equity (Cash+Land) 79% $8,479,439 $5,932,245 $2,547,195 Because of Land Value contribution Construction Costs assume Leed Silver certification (Cash10% Contribution) $5,020,199 $2,473,005 $2,547,195 Included contingency Debt 21% $2,414,893 $2,330,372 $84,521 Equity Amount $5,932,245 $8,479,439 $8,479,439 $8,479,439 $8,479,439 $8,479,439 $8,479,439 $8,479,439 $8,479,439 $8,479,439 $8,479,439 Debt Amount $0 $0 $2,330,372 $2,414,893 $2,413,271 $2,411,592 $2,409,852 $2,408,051 $2,406,185 $2,404,253 $2,402,253

Appendix: Market Data

South Lake Union Growth Trends

Seattle Age Distribution

Seattle Population by Neighborhood