B. Preliminary Limited Offering Memorandum-Retail Appraisal Report Posted 09-26-2016 PDF

APPRAISAL OF REAL PROPERTY
Ballston Quarter
4238 Wilson Boulevard
Arlington, Arlington County, VA 22203
IN AN APPRAISAL REPORT
As of August 2, 2015
Prepared For:
Forest City Finance Corporation
50 Public Square, Suite 1140
Cleveland, OH 44113
Prepared By:
Cushman & Wakefield of Oregon, Inc.
Valuation & Advisory
200 S.W. Market Street, Suite 200
Portland, OR 97201
Cushman & Wakefield File ID: 16-34001-900566-001
CUSHMAN & WAKEFIELD OF OREGON, INC.
200 S.W. MARKET STREET, SUITE 200
PORTLAND, OR 97201
(Rendering of property frontage along Wilson Boulevard following redevelopment)
Ballston Quarter
CUSHMAN & WAKEFIELD

200 S.W. Market Street, Suite 200
Portland, OR 97201
Tel +1 (503) 279-1700
cushmanwakefield.com
August 15, 2016
Mr. Steven H. Kurland

President
50 Public Square, Suite 1140
Cleveland, OH 44113
Re: Appraisal Report
Ballston Quarter
Dear Mr. Kurland:
In fulfillment of our agreement, as outlined in the Letter of Engagement, we are pleased to transmit our Appraisal
Report dated August 15, 2016. The effective date of value is August 02, 2015.
This Appraisal Report has been prepared in compliance with the Uniform Standards of Professional Appraisal
Practice (USPAP). In addition, the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA)
specifies that a Federally regulated financial institution must be the Client in the appraiser-client relationship under
the terms of an assignment agreement. To the extent the Client is governed by FIRREA, this appraisal meets all
applicable requirements.
Property Overview
Ballston Common is an enclosed, three-story urban center that currently contains 574,903 square feet of total gross
leasable area (including the non-owned, 148,353 square foot Macy’s department store). Built in 1986 and expanded
in 1999, the center is considered to be average in quality and average in condition. At this writing, ownership has
closed virtually the entire enclosed mall section in preparation for redevelopment. Occupancy is approximately 47.0
percent, including the six remaining retailers (Capital One, Lenscrafters, CVS, Sport & Health, Regal Cinemas, and
Macy’s).
Upon completion of its redevelopment, the subject will be rebranded as Ballston Quarter, with a total gross leasable
area of 507,745 square feet on a 6.50-acre assemblage of land. The center will be anchored by Macy’s, Regal
Cinemas, Sport & Health, and CVS. Macy’s owns its store and underlying land. Therefore, the owned GLA of the
subject will be calculated to be 359,392 square feet, with owned land area calculated to be 4.99 acres. Following
redevelopment, the property will be considered to be excellent condition.
Mr. Steven H. Kurland Cushman & Wakefield of Oregon, Inc.
August 15, 2016
Page 4
Value Opinion(s)
Based on the agreed-to Scope of Work, and as outlined in the report, we developed the following opinions of Market
Value:
Value Conclusions
Real Property
Appraisal Premise Interest Date Of Value Value Conclusion
Market Value As-Is Leased Fee August 02, 2015 $93,900,000
Prospective Market Value Upon Completion Leased Fee January 01, 2018 $229,500,000
Prospective Market Value Upon Stabilization Leased Fee January 01, 2020 $252,000,000
Insurable Value N/A August 02, 2015 $115,600,000
Compiled by Cushman & Wakefield of Oregon, Inc.
The value opinions in this report are qualified by certain assumptions, limiting conditions, certifications, and
definitions, as well as the following extraordinary assumptions.
Extraordinary Assumptions
For a definition of Extraordinary Assumptions please see the Glossary of Terms & Definitions. The use of
extraordinary assumptions, if any, might have affected the assignment results.
The prospective market value estimates in this report are based upon market participant attitudes and perceptions
existing as of the effective date of our appraisal, and assume that the subject property is completed and/or achieves
stabilization as of the prospective future dates herein. We assume no material change in the anticipated physical
characteristics and condition of the subject property, or in overall market conditions, between the date of inspection
and effective date of value, except for those identified within the report. Should the timely completion of construction
or leasing assumptions employed in the analysis very substantially from what is reported in the appraisal, a material
impact on value could be expected.
Hypothetical Conditions
For a definition of Hypothetical Conditions please see the Glossary of Terms & Definitions. The use of hypothetical
conditions, if any, might have affected the assignment results.
This appraisal does not employ any hypothetical conditions.

Mr. Steven H. Kurland Cushman & Wakefield of Oregon, Inc.
August 15, 2016
Page 5
This letter is invalid as an opinion of value if detached from the report, which contains the text, exhibits, and
Addenda.
Respectfully submitted,
CUSHMAN & WAKEFIELD OF OREGON, INC.
___________________________________ ___________________________________
Jay F. Booth, MAI Richard W Latella, MAI, FRICS
Senior Managing Director Executive Managing Director, Practice Lead – Retail
Virginia Certified General Appraiser Virginia Certified General Appraiser
License No. Temporary Practice Permit License No. 4001015323
jay.booth@cushwake.com richard.latella@cushwake.com
(503) 279-1709 Office Direct 212-841-7675 Office Direct
BALLSTON QUARTER CLIENT SATISFACTION SURVEY
Client Satisfaction Survey
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Simply click https://www.surveymonkey.com/r/vaclientsatisfaction?c=16-34001-900566-001 to respond or
print out the survey in the Addenda to submit a hard copy.
Contact our Quality Control Committee with any questions or comments:
Scott Schafer, MAI, MRICS Clarke Lewis, MAI Paul Ping, MAI Sid Womack, MAI, AI-GRS, FRICS
Senior Managing Director Senior Managing Director National Director Senior Managing Director
National Quality Control Appraisal Management Alternative Valuation Products Kansas | Missouri | Nebraska
Valuation & Advisory Valuation & Advisory Valuation & Advisory Valuation & Advisory
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scott.schafer@cushwake.com clarke.lewis@cushwake.com paul.ping@cushwake.com sid.womack@cushwake.com
CUSHMAN & WAKEFIELD I

BALLSTON QUARTER SUMMARY OF SALIENT FACTS AND CONCLUSIONS
Summary of Salient Facts and Conclusions

Ballston Common is an enclosed, three-story urban center that currently contains 574,903 square feet of total gross
leasable area (including non-owned Macy’s). Built in 1986 and expanded in 1999, the center is considered to be
average in quality and average in condition. At this writing, ownership has closed virtually the entire enclosed mall
section in preparation of redevelopment.
Upon completion, the subject will be rebranded as Ballston Quarter, with a total gross leasable area of 507,745
square feet on a 6.50-acre assemblage of land. The subject property is (and will be) anchored by Macy's, Regal
Cinemas, Sport & Health and CVS. The Regal Cinemas, Sport & Health, and CVS units are owned by mall
ownership and leased to the respective retailers. Macy's owns their store and underlying land and, as such, is
excluded from the subject of this appraisal. However, to the extent that they provide an economic contribution to
the operation of the mall, we will recognize and address such in our appraisal. Therefore, the owned GLA of the
subject is calculated to be 359,392 square feet, and the owned land area is calculated to be 4.99 acres. Following
redevelopment, the property will be considered to be excellent condition.
Below is a summary of salient facts and conclusions described in the attached report.
BASIC INFORMATION
Common Property Name: Ballston Quarter
Address: 4238 Wilson Boulevard
Arlington, Virginia 22203
County: Arlington
Property Ownership Entity: FC Ballston Commons LLC and Ballston Acquisition Comp
SITE INFORMATION
Land Area: Square Feet Acres
Main Parcel 217,324 4.99
Other Parcels 65,913 1.51
Total Land Area: 283,237 6.50
Site Shape: Irregularly shaped
Site Topography: Level at street grade
Frontage: Average
Site Utility: Good
Flood Zone Status:
Flood Zone: X
Flood Map Number: 51013C 0038C
Flood Map Date: August 19, 2013
CUSHMAN & WAKEFIELD II

BUILDING INFORMATION
Type of Property: Shopping Center
Building Area
Total GLA 507,745 SF
Owned GLA 359,392 SF
Land-to-Building Ratio: 0.43:1
Number of Stories: Three
Actual Age: 29 Years
Quality: Average-to-good
Year Built: 1986
Year Renovated: 2016/2017
Condition (upon completion): Excellent
Parking:
Number of Parking Spaces: 3,300
Parking Ratio (per 1,000 sf): 6.50:1
Parking Type: Garage
MUNICIPAL INFORMATION
Assessment Information:
Assessing Authority Arlington
Assessor's Parcel Identification Multiple - please see Property Taxes and Assessments
Current Tax Year 2015
Taxable Assessment $85,389,800
Current Tax Liability $1,025,481
Taxes per square foot $2.85
Are taxes current? Taxes are current
Is a grievance underway? Not to our knowledge
Subject's assessment is At or near market levels
Zoning Information:
Municipality Governing Zoning Arlington
Current Zoning C-0-2.5, Mixed Use District
Is current use permitted? Yes
Current Use Compliance Complying use
Zoning Change Pending No
Zoning Variance Applied For Not applicable
HIGHEST & BEST USE

As Though Vacant:
A mixed-use development, built to its maximum feasible building area, time and circumstances warranting
As Improved:
An urban regional shopping center, as it is currently improved
CUSHMAN & WAKEFIELD III

Market Value Prospective Market Value Prospective Market Value

VALUATION INDICES As-Is Upon Completion Upon Stabilization
VALUE DATE August 2, 2015 January 1, 2018 January 1, 2020
Land Value
Indicated Value: $40,000,000 $41,950,000 $43,650,000
Per Building Square Foot: $111.30 $116.72 $121.46
SALES COMPARISON APPROACH
Indicated Value: $106,100,000 $241,700,000 $264,200,000
Per Square Foot (GLA): $295.22 $672.52 $735.13
INCOME CAPITALIZATION APPROACH
Yield Capitalization
Projection Period: N/A 13 Years 11 Years
Holding Period: N/A 12 Years 10 Years
Terminal Capitalization Rate: N/A 5.75% 5.75%
Internal Rate of Return: N/A 7.25% 7.00%
Indicated Value: $90,500,000 $226,100,000 $249,000,000
Direct Capitalization
Net Operating Income: N/A $8,536,730 $13,339,035
Capitalization Rate: N/A N/A 5.25%
Preliminary Value: $231,576,857 $254,076,857 N/A
Value (Rounded): $231,600,000 $254,100,000 N/A
LESS Lease-Up Costs ($135,600,000) ($22,500,000) N/A
Indicated Value: $96,000,000 $231,576,857 $254,076,857
Indicated Value Rounded: $96,000,000 $231,600,000 $254,100,000
Income Capitalization Approach
Indicated Value: $92,900,000 $228,500,000 $251,000,000
FINAL VALUE CONCLUSION

Real Property Interest: Leased Fee Leased Fee Leased Fee
Concluded Value: $93,900,000 $229,500,000 $252,000,000
Implied Capitalization Rate: N/A 3.72% 5.29%
EXPOSURE AND MARKETING TIME
Exposure Time: 9 Months
Marketing Time: 9 Months
INSURABLE VALUE
Conclusion: $115,600,000 N/A N/A
CUSHMAN & WAKEFIELD IV

CUSHMAN & WAKEFIELD V

BALLSTON QUARTER SUMMARY OF CRITICAL OBSERVATIONS
Summary of Critical Observations

SUM MAR Y O F CR IT ICAL OB SER VAT IONS
The strengths and weaknesses analysis applies both specifically (attributes internal or specific to the subject) and
generally (external or economic considerations that influence the subject).
Strengths
 The subject has a central location in the Ballston section of Arlington, along a major commercial arterial, near
the Ballston-MU mass transit rail station.
 The subject is surrounded by a number of major office buildings and residential projects, in a densely populated
trade area.
 Ballston Common is anchored by Macy’s, CVS, Sport & Health, and Regal Cinemas and, upon completion, will
provide a high-quality retail, dining and entertainment experience for residents and office employees alike.
 The subject is located in a primary market area that is poised for stable-to-average growth, featuring new
medium- to high-density multi-family development, above-average income levels, and a strong employment
base.
Weaknesses
 Urban vertical retail centers can sometimes struggle with leasing and occupancy on levels above the second
floor. The subject’s design, configuration, and merchandising strategy appear to be focused on addressing this
potential risk factor.
 Direct vehicular access to the center is somewhat limited due to the urban nature of the local area, lack of direct
exposure on a major interstate, and ingress/egress into the adjacent parking structure. Customer access into
the center from the parking areas appears to be adequate.
 In the mall’s present condition and configuration, the subject’s Regal Cinemas performs below industry and
company norms. Regal’s sales are anticipated to improve following redevelopment of the center.
Conclusions
Based on the preceding strengths and weaknesses, the subject property's specific outlook is considered to be
stable-to-improving, while the general outlook for the overall market is concluded to be stable-to-improving.
CUSHMAN & WAKEFIELD VI

BALLSTON QUARTER PROPERTY PHOTOGRAPHS
Property Photographs
AERIAL PHOTOGRAPH
CUSHMAN & WAKEFIELD VII

BIRD’S EYE VIEW OF BALLSTON COMMON FROM SOUTH
BIRD’S EYE VIEW OF BALLSTON COMMON FROM NORTH
CUSHMAN & WAKEFIELD VIII

VIEW OF FORMER MACY’S HOME AND MEN’S AT CORNER OF RANDOLPH AND WILSON
RENDERING OF FORMER MACY’S HOME AND MEN’S AT RANDOLPH AND WILSON
CUSHMAN & WAKEFIELD IX

VIEW FROM WILSON AND RANDOLPH (BEFORE)
RENDERING FROM WILSON AND RANDOPLH (AFTER)
CUSHMAN & WAKEFIELD X

INTERIOR CONCOURSE VIEW (BEFORE)
INTERIOR CONCOURSE RENDERING (AFTER)
CUSHMAN & WAKEFIELD XI

VIEW FROM WILSON AND STEWART (BEFORE)
RENDERING FROM WILSON AND STEWART (AFTER)
CUSHMAN & WAKEFIELD XII

LOOKING EAST ON WILSON TOWARD RANDOLPH (BEFORE)
RENDERING LOOKING EAST ON WILSON TOWARD RANDOLPH (AFTER)
CUSHMAN & WAKEFIELD XIII

RENDERING OF DINING GALLERY
ADDITIONAL RENDERING OF DINING GALLERY
CUSHMAN & WAKEFIELD XIV

RENDERING OF INTERIOR COURT AREA
ADDITIONAL INTERIOR RENDERING
CUSHMAN & WAKEFIELD XV

EXTERIOR RENDERING
EXTERIOR RENDERING
CUSHMAN & WAKEFIELD XVI

BALLSTON QUARTER TABLE OF CONTENTS
Table of Contents
Summary of Salient Facts and Conclusions .............................................................................................................. II
Property Photographs ............................................................................................................................................. VII
Scope of Work .......................................................................................................................................................... 19
Overview .............................................................................................................................................................. 19
Report Option Description .................................................................................................................................... 20
Identification Of Property ...................................................................................................................................... 20
Property Ownership And Recent History ............................................................................................................. 21
Dates Of Inspection And Valuation ...................................................................................................................... 22
Client, Intended Use And Users Of The Appraisal............................................................................................... 22
Extraordinary Assumptions .................................................................................................................................. 22
Hypothetical Conditions ....................................................................................................................................... 23
Regional Analysis..................................................................................................................................................... 24
Introduction........................................................................................................................................................... 25
Demographic Trends ............................................................................................................................................ 27
Economic Trends ................................................................................................................................................. 31
Summary/Conclusion/Observations ..................................................................................................................... 37
Local Area Analysis.................................................................................................................................................. 39
Introduction........................................................................................................................................................... 40
Location Overview ................................................................................................................................................ 40
Transportation/Access ......................................................................................................................................... 40
Local Area Characteristics ................................................................................................................................... 41
Summary/Conclusion/Observations ..................................................................................................................... 45
Retail Market Analysis.............................................................................................................................................. 47
Introduction........................................................................................................................................................... 47
National Retail Market Overview .......................................................................................................................... 47
Local Retail Market Overview .............................................................................................................................. 58
Submarket Analysis.............................................................................................................................................. 66
Trade Area Overview ........................................................................................................................................... 75
Major/Anchor Tenant Alignment........................................................................................................................... 81
Trade Area Analysis ............................................................................................................................................. 86
Retail Sales .......................................................................................................................................................... 92
Subject Property Sales Potential.......................................................................................................................... 93
Subject Sales Allocation ..................................................................................................................................... 101
Market Share Analysis ....................................................................................................................................... 102
Summary/Conclusion/Observations ................................................................................................................... 105
Marketability and Marketing Period .................................................................................................................... 106
Property Analysis ................................................................................................................................................... 108
Site Description .................................................................................................................................................. 108
Improvements Description ................................................................................................................................. 118
Real Property Taxes and Assessments ............................................................................................................. 123
Zoning ................................................................................................................................................................ 125
Valuation ................................................................................................................................................................ 128
Highest and Best Use ........................................................................................................................................ 128
Valuation Process .............................................................................................................................................. 131
Land Valuation ................................................................................................................................................... 133
CUSHMAN & WAKEFIELD XVII

BALLSTON QUARTER TABLE OF CONTENTS
Sales Comparison Approach ............................................................................................................................. 144

Income Capitalization Approach ........................................................................................................................ 165
Reconciliation and Final Value Opinion ............................................................................................................. 226
Insurable Replacement Cost/Insurable Value.................................................................................................... 228
Assumptions and Limiting Conditions ................................................................................................................ 230
Certification of Appraisal .................................................................................................................................... 233
Addenda Contents ................................................................................................................................................. 234
CUSHMAN & WAKEFIELD XVIII

BALLSTON QUARTER SCOPE OF WORK
Scope of Work
Overview
Scope of work is the type and extent of research and analyses involved in an assignment. To determine the
appropriate scope of work for the assignment, we considered the intended use of the appraisal, the needs of the
user, the relevant characteristics of the subject property, and other pertinent factors. Our concluded scope of work
is summarized below, and in some instances, additional scope details are included in the appropriate sections of
the report:
Research
 We inspected the property and its environs. Physical information on the subject was obtained from the property
owner’s representative, public records, and/or third-party sources.
 Regional economic and demographic trends, as well as the specifics of the subject’s local area were
investigated. Data on the local and regional property market (supply and demand trends, rent levels, etc.) was
also obtained. This process was based on interviews with regional and/or local market participants, primary
research, available published data, and other various resources.
 Other relevant data was collected, verified, and analyzed. Comparable property data was obtained from various
sources (public records, third-party data-reporting services, etc.) and confirmed with a party to the transaction
(buyer, seller, broker, owner, tenant, etc.) wherever possible. It is, however, sometimes necessary to rely on
other sources deemed reliable, such as data reporting services.
Analysis
 Based upon the subject property characteristics, prevailing market dynamics, and other information, we
developed an opinion of the property’s Highest and Best Use.
 We analyzed the data gathered using generally accepted appraisal methodology to arrive at a probable value
indication via each applicable approach to value.
 The results of each valuation approach are considered and reconciled into a reasonable value estimate.
This report is intended to comply with the reporting requirements outlined under USPAP for an Appraisal Report.
In addition, the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) specifies that a financial
services institution must be the Client in the appraiser-client relationship under the terms of an assignment
agreement. To the extent the Client is governed by FIRREA, this appraisal meets all applicable requirements.
Cushman & Wakefield of Oregon, Inc. has an internal Quality Control Oversight Program. This Program mandates
a “second read” of all appraisals. Assignments prepared and signed solely by designated members (MAIs) are read
by another MAI who is not participating in the assignment. Assignments prepared, in whole or in part, by non-
designated appraisers require MAI participation, Quality Control Oversight, and signature.
For this assignment, Quality Control Oversight was provided by Richard W. Latella, MAI, FRICS. In addition to a
qualitative assessment of the Appraisal Report, Richard W. Latella, MAI, FRICS is a signatory to the Appraisal
Report and concurs in the value estimate(s) set forth herein.
This appraisal employs the Sales Comparison Approach and the Income Capitalization Approach. Based on our
analysis and knowledge of the subject property type and relevant investor profiles, it is our opinion that these
approaches would be considered applicable and/or necessary for market participants. Typical purchasers do not
CUSHMAN & WAKEFIELD 19

generally rely on the Cost Approach when purchasing a property such as the subject of this report. Therefore, we
have not utilized the Cost Approach to develop an opinion of market value.
Report Option Description

USPAP identifies two written report options: Appraisal Report and Restricted Appraisal Report. This document is
prepared as an Appraisal Report in accordance with USPAP guidelines. The terms “describe,” summarize,” and
“state” connote different levels of detail, with “describe” as the most comprehensive approach and “state” as the
least detailed. As such, the following provides specific descriptions about the level of detail and explanation included
within the report:
 Describes the real estate and/or personal property that is the subject of the appraisal, including physical,
economic, and other characteristics that are relevant
 States the type and definition of value and its source
 Describes the Scope of Work used to develop the appraisal
 Describes the information analyzed, the appraisal methods used, and the reasoning supporting the analyses
and opinions; explains the exclusion of any valuation approaches
 States the use of the property as of the valuation date
 Describes the rationale for the Highest and Best Use opinion (if included)
Identification Of Property
Common Property Name: Ballston Quarter
Location: 4238 Wilson Boulevard

Arlington, Arlington County, Virginia 22203
The subject property is located in the southeasterly quadrant of Wilson Boulevard

and N. Glebe Road in Arlington, Virginia; part of the greater Washington D.C.
CBSA.
Property Description: Upon completion, Ballston Quarter will consist of a three-story urban regional
shopping center containing 507,745 square feet of total leasable area on a 6.50-
acre assemblage of land.
The subject property is (and will be) anchored by Macy's, Regal Cinemas, Sport &
Health and CVS. The Regal Cinemas, Sport & Health, and CVS units are owned
by mall ownership and leased to the respective retailers. Macy's owns their store
and underlying land and, as such, is excluded from the subject of this appraisal.
However, to the extent that they provide an economic contribution to the operation
of the mall, we will recognize and address such in our appraisal.
Therefore, excluding non-owned components, the owned GLA included in this

appraisal is calculated to be 359,392 square feet on a 4.99-acre assemblage of
land. Mall shop space consists 248,132 square feet inclusive of the food court and
kiosks.

Assessor's Parcel No(s): Multiple - please see Property Taxes and Assessments section
Legal Description: We have not been provided with a complete metes and bounds legal description of
the property. However, we have reviewed a property survey completed by Vika
Virginia, LLC (dated January 6, 2016, revised), as well as public records. A list of
the subject’s parcel identification numbers is included in the Property Taxes and
Assessments section, and reference is made thereto. The property can generally
be described as follows:
 Parcel 14-059-035 (Owner: FC Ballston Common LLC) – Parcel F-1A Resub
F-1 Resub Hecht Company Property & Glebewood Terrace Lot A. Note: Parcel
14-059-034 (Ballston Office Center LLC) is an air space parcel above this
section of the mall that is not part of the appraised property. The air space
parcel is improved with Ballston Common Office Center; a Class A office
building containing 257,000 square feet on 11 floors. The air space parcel and
office building are not part of this appraisal.
 Parcel 14-059-036 (Owner: FC Ballston Common LLC) – Parcel F-1B Resub
Parcel F-1 Resub Hecht Company Property & Glebewood Terrace Lot A. Note:
Parcel 14-059-037 (Consortium Ballston LLC) is an air space parcel above this
section of the mall that is not part of the appraised property. The air space
parcel is improved with Ballston Tower; a Class A office building containing
225,000 square feet on 11 floors. The air space parcel and office building are
not part of this appraisal.
 Parcel 14-059-028 (Owner: Ballston Acquisition Company LLC) – Parcel A-1
Resub Hecht Company Property & Glebewood Terrace Lot A. This is the former
Macy’s Home and Men’s store that will be subdivided to include an air space
parcel above two levels of retail. The planned subdivision and development will
create 20 floors of residential above the retail, plus four levels of subterranean
parking. The air space parcel and residential development are not part of this
appraisal.
Longitude: 38.8790402
Latitude: -77.1107465028
Property Ownership And Recent History

Current Ownership: FC Ballston Commons LLC and Ballston Acquisition Comp LLC
Property History: The subject property was built in 1986, on site of the former Parkington Shopping
center, which dated back to 1951. The project was expanded in 1999 to include
Regal Cinemas and Ballston Tower (E-Trade Tower).
In early 2016, nearly the entire enclosed mall area was closed in preparation for
redevelopment.
Sale History: We are advised that a partial interest in the property (49.0% joint venture interest)
was acquired by QIC from Forest City in April 2016. The reported transaction

implied an $87.0 million price for the mall, excluding the allocated price for the
former Macy’s Home and Men’s store.
The former Macy’s Home and Men’s store was acquired in 2013, along with the air
rights above the Macy’s store. It is our understanding that the sale price for the site
and air rights was $13.0 million.
To the best of our knowledge, other than what has been noted, there have been no
other transfers of the property within the past three years.
Current Disposition: To the best of our knowledge, the property is not under contract of sale nor is it
being marketed for sale.
Dates Of Inspection And Valuation

Effective Date(s) of Valuation:
As Is: August 2, 2015
Upon Completion: January 1, 2018
Upon Stabilization: January 1, 2020
Date of Inspection: August 2, 2015
Property Inspected by: Kelly J. Small (Jay F. Booth, MAI previously inspected the property)
Client, Intended Use And Users Of The Appraisal

Client: Forest City Finance Corporation
Intended Use: This appraisal is intended to provide an opinion of the Market Value of the Leased
Fee interest in the property for the use of the client in evaluating a potential
financing. This report is not intended for any other use.
Intended User: This appraisal report was prepared for the exclusive use of Forest City Finance
Corporation and Pacific Life Insurance Company. Use of this report by others is not
intended by the appraiser. Please see the Engagement Letter in the addenda.


BALLSTON QUARTER REGIONAL ANALYSIS
Regional Analysis
REGIONAL MAP

Regional Analysis
Introduction
The first section of this report presents an overview of the subject’s region. The short- and long-term value of real
estate is influenced by a variety of interacting factors. Regional analysis identifies those factors that affect property
value, and the role they play within the region. The four primary forces that determine the supply and demand for
real property, and consequently affect market value, are: environmental characteristics, governmental forces, social
factors, and economic trends.
The subject property is located in the City of Arlington, in the central portion of the Washington D.C. CBSA. The
following analysis focuses trends found throughout the region.
Market Overview
Situated near the midpoint of the nation’s Mid-Atlantic coast, the Washington, D.C. Metropolitan Statistical Area
(MSA) is the seventh most populous metropolitan area in the nation. The Washington, D.C. MSA is located roughly
equal distance between Norfolk, Virginia and New York City. Encompassing more than 5,627 square miles, the
region is comprised of fifteen counties and six independent cities within the states of Maryland, Virginia and West
Virginia. The District of Columbia (the District), which is the nation’s capital and the region’s urban core, sits on the
northeast bank of the Potomac River and contains approximately 61.0 square miles of land.
Listed below are some key points regarding the present condition of the Washington, D.C. MSA:
 The Washington, D.C. MSA has a strong reputation as one of the most desirable markets in the nation, due in
large part to the stability of the Federal Government. The region has a diverse economic base, primarily made
up of companies that support the Federal Government or feed off the ever-increasing population. This typically
insulates the Washington, D.C. region from economic cycles. However, it also makes the region vulnerable in
times of reduced government spending or political uncertainty.
 Metrorail (Metro) is one of the top public transportation systems in the nation and supports the Washington,
D.C. MSA. The Washington Metro is comprised of six transit lines (Red, Blue, Orange, Green, Yellow, and
Silver), and is the second busiest in the nation, with 91 stations throughout the MSA. Construction of the first
phase of the Dulles Metrorail project (the Silver Line) finished and officially opened in July 2014. The second
phase will extend the railway 11.7 miles into northwest Loudoun County and link the western portion of the
Washington, D.C. metro area, including the Washington Dulles International Airport, with the rest of the region.
 The Washington, D.C. metro area is home to the Ronald Reagan Washington National Airport (DCA) and the
Washington Dulles International Airport (IAD). About 23.4 million passengers utilized DCA over the twelve-
month period ending March 2016, which was up 10.2 percent on a year-over-year basis. Traffic at IAD increased
slightly as well, with approximately 21.6 million passengers over the same time period. This represents an
increase of 1.1 percent on a year-over-year basis.
The following map illustrates the Washington, D.C. Metropolitan Statistical Area:

Current Trends
The Washington, D.C. MSA region continued to expand in early 2016, as the private sector continues to make up
for federal payroll losses. As such, the regional economy continued to expand despite federal budget battles. Strong
job gains in the private sector, particularly the Leisure and Hospitality and Education and Health Services industries,
are keeping the expansion afloat. The region’s Gross Metro Product (GMP) rose by 2.2 percent in 2015 and is
projected to rise an estimated 2.9 percent in 2016. This follows a mere 0.9 percent growth rate in 2014. Employment
figures are also strong, with 1.8 percent growth in 2015 and a projected 2.0 percent growth rate in 2016. The region
continued to acclimate to Federal budget cuts and workforce reductions in 2014 and, as such, the region’s workforce
grew a sluggish 0.6 percent at that time. Overall, the region’s employment and GMP figures are anticipated to grow
at an accelerated pace over the next three years, as consumer confidence improves and the national economy
picks up steam, boosting local spending through higher payrolls and increased tourism activity.
Notable trends are discussed below:
 The region’s GMP is projected to grow by 2.6 percent annually over the next five years, which is up more than
twofold when compared to the region’s annual average over the past decade. The Federal Government,
Defense, and High Technology sectors are the primary economic drivers in the Washington, D.C. MSA.
 Sectors such as Leisure and Hospitality and Construction, which are highly correlated with the national
economy, should experience strong growth over the next five years as the improving national economy
increases overall consumer demand. The Construction sector is projected to increase its workforce by an
average 2.9 percent annually from 2016 to 2020. High office vacancy rates will limit office construction, but
multifamily construction is anticipated to remain robust as the area’s younger demographic continues to drive
demand for multifamily housing. Furthermore, the Washington, D.C. metro area continues to be a popular
tourist destination and, as such, the Leisure and Hospitality industry’s workforce is estimated to grow by about
1.6 percent annually over the next five years, with particularly robust growth in 2016 and 2017.

 The Government sector plays an important role in the region’s job market as it employs an estimated 21.5
percent of the region’s labor force. This is significantly higher than the national average of 15.3 percent. The
sector also plays an important role in driving demand for other industries, including the high technology and
defense contractor sectors, which are not captured in the figure above. As such, a reduction in spending from
the Federal Government has large repercussions for the area. The Government workforce contracted by 0.1
percent and 0.7 percent in 2013 and 2014, respectively, due to heavy federal budget cuts at that time.
Nonetheless, going forward the sector is anticipated to stabilize. Employment in the Government sector grew
by 0.9 percent in 2015 and is projected to grow another 0.7 percent this year.
 Over the past few years, metropolitan areas with an emphasis on high technology – such as San Francisco,
Seattle, Houston, and Denver – have experienced robust gains in employment. Taking advantage of rising
demand for high-technology services like cyber security and counterterrorism, coupled with an abundance of
the young and highly educated workforce, tech companies are continuing to invest in the Washington, D.C.
metro. The Interstate 270 Technology Corridor, which is located in Montgomery County, Maryland, is home to
numerous software and biotechnology companies. In total, the corridor is home to over 200 IT companies and
over 190 life sciences companies.
Demographic Trends
Demographic Characteristics
The Washington, D.C. metro region has particularly strong demographic fundamentals. The region has a highly
educated workforce, which when coupled with a healthy job market, allows its residents to enjoy high per capita
incomes and quality of life. As such, the region’s income and education levels are well above the national average.
Additionally, the prospect of stable, well-paying jobs routinely attracts young people to the area, resulting in a
median age that is slightly lower than the nation’s as a whole. Numerous post-secondary institutions and a healthy
job market should continue to contribute towards the region’s economic growth over the foreseeable future.
Additional features of the region’s demographics are listed below:

 The Washington, D.C. MSA has a median age of 36.0 years, which is younger than the national median age of
37.0 years. This is the result of a variety of factors, none of which is more important that the region’s ability to
retain young talent coming out of the nearby universities. The region’s healthy job market offers high paying
jobs across a variety of industries.
 The Washington, D.C. MSA has one of the most well-educated and well-paid populations in the country. About
47.3 percent of the region’s residents hold a four-year degree or higher, compared to 28.8 percent at the
national level. Furthermore, roughly 22.6 percent of the region’s population have received, or are pursuing, an
advanced degree, which is more than double the national average of 10.7 percent.
 A well-educated population, coupled with the presence of the Federal Government, attracts numerous
companies that require highly skilled labor and typically pay higher wages. As a result, households in the region
earn an average annual income of $125,333. This is about 61.8 percent higher than the United States’ average
annual household income level of $77,468.
 Moody’s Analytics cost of living index lists the Washington, D.C. MSA at 124.0 percent. This is well above the
U.S. base of 100.0 percent, and higher than neighboring MSAs’ such as Richmond, Baltimore, and
Philadelphia. To some extent, the region’s high cost of living offsets the significant gap between the national
and regional income levels.

The following table compares the demographic characteristics of the Washington, D.C. MSA with the demographic
characteristics of the U.S.:
Demographic Characteristics
Washington DC MSA vs. United States
2015 Estim ates
Washington United
Characteristic DC MSA States
Median Age (years) 36.0 38.0
Average Annual Household Income $125,333 $77,468
Median Annual Household Income $91,574 $54,148
Households by Annual Income Level:
<$25,000 11.2% 23.1%
$25,000 to $49,999 14.6% 23.5%
$50,000 to $74,999 15.1% 18.5%
$75,000 to $99,999 13.5% 12.4%
$100,000 plus 45.6% 22.5%
Education Breakdown:
< High School 10.1% 14.1%
High School Graduate 19.6% 28.2%
College < Bachelor Degree 23.0% 29.0%
Bachelor Degree 24.7% 18.1%
Advanced Degree 22.6% 10.7%
Source: © 2015 Experian Marketing Solutions, Inc. •All rights reserved•
Cushman & Wakefield Valuation & Advisory
Population
Historically, Washington, D.C. MSA’s population growth has outpaced the national average, as abundant job
opportunities brought many people to the region. From 2005 to 2015, the region’s population increased at a per
annum rate of 1.5 percent. This was roughly 70 basis points above the national rate of 0.8 percent over the same
time. The region witnessed the strongest population growth from 2009 to 2011, when the area’s population
increased by an average rate of 2.0 percent each year. It is not by chance that this was during the economic
downturn, as the region’s stability and higher prospect for employment brought many people to the area. Since
then, the population growth rate has decelerated a bit, but nonetheless continues to outpace the national average.
Further considerations regarding population growth are as follows:
 In 2015, the region’s population increased at a post-recessionary low of 1.1 percent. The slower population
growth was due in large part to the combination of regional fiscal drag and the gradual improvement in the
national economy, which has made it easier for people to find a job in other parts of the country.
 Population in the Washington, D.C. metro area is projected to increase at an annual rate of 1.1 percent through
2020. Although lower than the region’s previous ten-year average, the figure will continue to outpace the
national per annum population growth rate over the same time.
The following graph compares historical and projected population growth between the Washington, D.C. MSA and
the U.S. as a whole:

POPULATION GROWTH BY YEAR

Washington DC MSA vs. United States, 2005-2020
2.5%
United States Washington, D.C. Forecast
Annual Percent Change
2.0%
1.5%
1.0%
0.5%
0.0%
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Source: Data Courtesy of Moody's Analytics and Cushman & Wakefield Valuation & Advisory
Note: Shaded bars indicate periods of recession
The suburban areas of Northern Virginia experienced the most significant population growth over the past ten years.
The trend was most evident in areas such as Loudoun County and Prince William County/Manassas/Manassas
Park, due in large part to the relative abundance of developable land, lower housing costs, the perception of better
quality schools, and a lower cost of living. Conversely, heavily populated areas such as Prince George’s County,
Montgomery County, and the District experienced weaker population growth, as they have a relatively higher cost
of living and a lower amount of available land.
Additional points concerning population are discussed below:
 The Fairfax County/Fairfax City/Falls Church area has the largest population in the Washington, D.C. metro
area with nearly 1.2 million people. This is primarily because of its proximity to the District, the Capital Beltway,
and access to the region’s Metrorail.
 Loudoun County experienced the strongest population growth rate over the past ten years, as its population
increased by about 3.9 percent annually from 2005 to 2015. Going forward, the area is anticipated to continue
to outpace the rest of the region, with an average 2.5 percent annual growth rate through 2020.
 The District’s population increased by 1.7 percent annually over the past ten years, ending 2015 with roughly
672,200 residents. Going forward, Moody’s Analytics predicts the District’s population to increase by 0.8
percent annually through 2020.
The following table depicts the Washington, D.C. MSA’s annualized population growth (actual and projected) for
each county and independent city from 2005 to 2020:

Annualized Population Growth by County

Washington DC MSA
2005-2020
Com pound Com pound
Annual Annual
Forecast Forecast Grow th Rate Grow th Rate
Population (000’s) 2005 2015 2016 2020 05-15 16-20
United States 295,516.6 321,418.8 324,110.5 334,842.1 0.8% 0.8%
Washington DC MSA 5,273.6 6,097.7 6,166.1 6,450.0 1.5% 1.1%
District of Columbia 567.1 672.2 680.6 703.9 1.7% 0.8%
Calvert County 86.3 90.4 90.3 90.4 0.5% 0.0%
Charles County 138.6 155.4 156.2 160.7 1.2% 0.7%
Frederick County 221.2 244.8 247.9 261.0 1.0% 1.3%
Montgomery County 921.5 1,040.6 1,058.1 1,130.2 1.2% 1.7%
Prince George's County 853.3 905.3 908.0 927.2 0.6% 0.5%
Arlington County 187.8 230.3 233.8 247.0 2.1% 1.4%
Clarke County 13.7 14.3 14.3 14.3 0.4% 0.0%
Culpeper County 41.9 49.3 49.5 50.8 1.6% 0.7%
Fauquier County 62.7 68.6 68.7 70.2 0.9% 0.5%
Loudoun County 254.9 373.1 382.4 422.3 3.9% 2.5%
Rappahannock County 7.4 7.3 7.3 7.1 -0.1% -0.7%
Stafford County 117.6 141.7 143.3 151.0 1.9% 1.3%
Warren County 35.4 39.1 39.1 39.9 1.0% 0.5%
Alexandria City 128.2 153.7 155.7 163.8 1.8% 1.3%
Fairfax/Fairfax City/Falls Church 1,051.2 1,185.4 1,193.8 1,229.5 1.2% 0.7%
Prince William/Manassas/Manassas Park 399.5 511.3 521.0 556.8 2.5% 1.7%
Spotsylvania/Fredericksburg 136.7 158.7 160.0 166.5 1.5% 1.0%
Jefferson County 48.7 56.0 56.3 57.4 1.4% 0.5%
Source: Data Courtesy of Moody's Analytics, Cushman & Wakefield Valuation & Advisory
Household Formation
A region’s household formation rate typically follows the pattern of its population growth rate, as an increase in the
population is the primary driver for new households. As such, the number of households in the Washington, D.C.
MSA increased by about 1.4 percent annually over the past decade. Household formations were particularly strong
from 2009 to 2011, as the number of households increased by an average of 2.0 percent each year. As expected,
there were robust population gains during the same time.
The following are notable points regarding the region’s household formations:
 In 2015, the number of households in the region increased by 1.3 percent. That figure is forecasted to grow by
another 1.9 percent in 2016 as the economy continues to improve, allowing a greater number of people the
opportunity to live on their own.
 The region’s overall annual household formation rate is projected to grow by an average of 1.7 percent over
the next five years. This will outpace the forecasted national household formation rate by about 50 basis points.
The following graph compares historical and projected household growth between the Washington, D.C. MSA and
U.S. as a whole:

HOUSEHOLD FORMATION BY YEAR

3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Economic Trends
Gross Metro Product
Defined as the market value of all final goods and services produced within a metropolitan area, the Gross Metro
Product (GMP) can help determine shifting trends for a region when compared to the nation’s Gross Domestic
Product (GDP). Additionally, the GMP can help identify the economic characteristics of the region. Typically, the
Washington, D.C. MSA is one of the healthiest and well-insulated economies in the nation. The presence of the
Federal Government is the underlying generator of demand; yet, the region has a diverse economic base that caters
to a wide array of industries. Despite its revered stability and diversity, the region’s economy is susceptible to slower
growth during times of political uncertainty.
Notable points regarding Washington, D.C. MSA’s Gross Metro Product follow:
 The economic output for the Washington, D.C. MSA totaled approximately $412.3 billion in 2015, an increase
of 2.2 percent over the previous year. Going forward, it is projected to strengthen and grow by an annual
average of 2.6 percent over the next five years. Growth is expected to be particularly robust in 2016-2018, as
the national economy also continues to pick up steam during the same time frame.
 The Washington, D.C. region recorded a per annum Gross Metro Product growth rate of 1.2 percent from 2005
to 2015, which was 20 basis points below the national GDP growth rate over the same time. However, the
region’s economy did not contract as much as the nation during the economic downturn. The metro area’s
economic output remained relatively stagnant in 2009 at the height of the economic recession, whereas the
national economic output contracted by 2.8 percent during the same time.
 Sequestration has had a heavy impact on the region’s GMP over the past few years as it creates uncertainly.
Furthermore, many of the businesses in the Washington, D.C. metro provide a service that supports the Federal
Government. Nonetheless, regional output is expected to pick up over the next five years as the private sector
continues to drive growth in the region.

The following graph compares historical and projected GMP growth by year for the Washington, D.C. MSA and
U.S. as a whole:
REAL GROSS PRODUCT GROWTH BY YEAR
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Employment Distribution
As the seat of the Federal Government, unsurprisingly the Government sector provides work for approximately 21.5
percent of the Washington, D.C. MSA employment base. This is well above the national average of about 15.3
percent. Nonetheless, the region’s employment is still diverse, as six of the eleven industries (including the
Government) that make up the employment base have an employment share greater than 6.0 percent. This is on
par with the national average. The Professional and Business Services, Government, Education and Health
Services, and Trade, Transportation and Utilities industries all have employment shares greater than 12.0 percent
in the metro area. Together, these four industries employ over 70.0 percent of the region’s workforce.
Further considerations regarding employment distribution in the region are as follows:

 With an employment share of roughly 22.8 percent, the Business and Professional Services industry is the
region’s largest employer. Many companies have expanded and/or relocated to the region in an effort to
capitalize on Federal spending increases over the years. Although has been a reduced amount of Federal
spending, the industry will continue to be a top performer with a projected employment share of 23.5 percent
by the end of 2020.
 The sheer size of the Trade, Transportation and Utilities industry typically gives it an outsized employment
share in a given region. In the Washington, D.C. MSA, the industry constitutes 12.7 percent of the region’s total
workforce, which is about 6.2 percentage points lower than the industry’s employment share nationally.
 The Education and Health Services industry has an estimated employment share of 13.0 percent, which is the
third highest employment share in the Washington, D.C. region. This is due in large part to the expansive health
care systems and large universities that support the region. In fact, the stable industry withstood the economic
downturn fairly well and has been the region’s top performer over the past decade with an average annual
employment growth rate of 2.8 percent. Going forward, the region’s mounting emphasis on education and an
increase in demand for healthcare will increase the industry’s employment share to a projected 13.2 percent.

 The Leisure and Hospitality industry only employs about 10.0 percent of the region’s workforce. However, the
industry’s employment share is on the rise as the national economy continues to improve and visitors are drawn
to the area. By the end of 2020, the industry’s employment share is projected to reach 10.2 percent.
 Going forward, the region’s workforce will continue to be concentrated in the Professional and Business
Services, Government, and Education and Health Services sectors.
The following graph compares non-farm employment sectors for the Washington, D.C. MSA and the U.S. as a
whole:
EMPLOYMENT BY SECTOR
Washington DC MSA vs. United States
2016 Estimates
Construction
Manufacturing
Trade, Transportation & Utilities
Information United States
Financial Activities Washington, D.C.
Professional & Business Services
Education & Health Services
Leisure & Hospitality
Other Services (except Govt.)
Government
0% 4% 8% 12% 16% 20% 24%
Major Employers
Given the heavy presence of the Government industry, it is no wonder that many of the largest private-sector
employers in the Washington, D.C. metro area are defense manufacturers, government contractors, law firms, and
other services that support the Federal Government. Additionally, due to the vast size of the population and the
young and highly skilled workforce, several large education and healthcare systems are located in the region.
Further considerations are as follows:
 Fourteen Fortune 500 companies have headquarters located in the greater Washington, D.C. metro area.
Headquartered in the District, Fannie Mae (17th) is the highest ranked company in the region. Freddie Mac is
headquartered in McLean and ranked 42nd, which is the second highest designation for the region. Despite a
government takeover of the two government sponsored enterprises (GSEs) in 2008, both organizations still
have a considerably strong impact on the Washington job market.
 Inova Health System is the largest private employer in the region with approximately 16,000 employees. Most
of its medical facilities are located throughout Northern Virginia. In addition, Medstar Health employs over
14,000 people throughout the Washington, D.C area.
 SAIC, Northrop Grumman, Lockheed Martin and General Dynamics are the four largest defense contractors in
the region. Together, they employ more than 50,000 people. Contracts from the Federal Government generate
a large portion of the demand for these companies, which led most to cut costs in 2013 and 2014 to cope with
Sequestration.

 Other large employers such as Verizon, Giant Food LLC, Marriott International, and Booz Allen Hamilton span
a variety of industries, including Professional and Business Services, Retail, and Leisure and Hospitality. In the
coming years, Marriott International plans to relocate from its 900,000 square foot headquarters in Bethesda,
MD, but will most likely stay in the Washington, D.C. MSA. The company’s current lease expires in 2022.
The following table lists the Washington, D.C. MSA’s largest private employers, and highlights the concentration of
professional and business services employment in the region:
Largest Private Employers

Washington-Arlington-Alexandria, DC-VA-MD-WV
No. of Business
Com pany Em ployees Type
Inova Health System 16,000 Education and Health Services
SAIC Inc. 15,441 Professional and Business Services
Northrop Grumman Corp. 15,053 Defense and Technology
MedStar Health 14,158 Education and Health Services
Booz Allen Hamilton 14,000 Professional and Business Services
Marriott International Inc. 13,727 Leisure and Hospitality
University of Maryland at College Park 13,451 Education and Health Services
Verizon Communications 13,100 Professional and Business Services
Giant Food Stores 12,110 Retail Trade
Lockheed Martin Global Telecommunications 12,000 Defense and Technology
Washington Metropolitan Area Transit Authority 11,319 Trade, Transportation, and Utilities
McDonald’s Corp. 10,853 Retail Trade
General Dynamics 8,200 Professional and Business Services
Safew ay Inc. 8,000 Retail Trade
Source: Moody's Analytics, Book of Lists, 2013 & Cushman & Wakefield Valuation & Advisory
The following table illustrates the Fortune 500 companies, and their rank, located in the region:
Fortune 500 Companies

Washington-Arlington-Alexandria, DC-VA-MD-WV
Rank Com pany City

17 Fannie Mae District of Columbia
42 Freddie Mac McLean, VA
64 Lockheed Martin Bethesda, MD
100 General Dynamics Corp. Falls Church, VA
124 Northrop Grumman Corp. Falls Church, VA
126 Capital One Financial Corp. McLean, VA
147 Danaher Corporation District of Columbia
178 The AES Corp. Arlington, VA
221 Marriott International Inc. Bethesda, MD
229 Computer Sciences Corp. Falls Church, VA
280 Hilton Worldw ide Holdings Inc. McLean, VA
430 Discovery Communications Inc. Silver Spring, MD
441 Gannett Co. Inc. McLean, VA
472 Booz Allen Hamilton Holding Corp. McLean, VA
485 Host Hotels & Resorts Inc. Bethesda, MD
Source: Fortune 500, 2015

Employment Growth
The Washington, D.C. metro region has long been viewed as one of the premier job markets in the country. A key
component to this perception is the market’s stability, as the high amount of Federal spending tends to insulate
most of the region’s industries during an economic downturn. For example, the region witnessed an employment
decline of just 1.7 percent in 2009 during the height of the national economic downturn, as compared to a 4.3
percent decline nationally. However, reductions in Federal spending can have a significant negative impact on the
region’s employment growth, as illustrated by growth rates of just 1.0 percent and 0.6 percent in 2013 and 2014,
respectively. The region recorded an annualized employment growth rate of 0.8 percent from 2005 to 2015. This
was 20 basis points higher than the national employment growth during the same time.
 The Business and Professional Services industry recorded an annual employment growth rate of 1.1 percent
from 2005 to 2015. More recently, reductions in Federal spending hampered the industry’s employment growth,
as the workforce contracted by 0.3 percent in 2014. Nonetheless, the industry’s employment growth improved
in 2015, growing by 2.3 percent at that time. Going forward, the industry has a forecasted per annum
employment growth rate of 1.9 percent through 2020.
 A recovering national economy, coupled with improvements in the housing market, is driving an increase in
employment in the Construction and Leisure and Hospitality industries. Both sectors are anticipated to
experience significant improvements over the next five years, with projected per annum employment growth
rates of 2.9 percent and 1.6 percent, respectively, through 2020.
 Employment growth in the Government sector has fared well in the past. After contracting at an average rate
of 0.3 percent annually from 2012 to 2014, the sector grew by 0.9 percent in 2015. Nevertheless, going forward
Moody’s Analytics estimates that Government employment will stabilize and remain relatively unchanged, with
virtually no net growth over the next five years.
 Employment in the Education and Health Services industry increased by 2.8 percent annually from 2005 to
2015, due in large part to the growing need for health care and increasing enrollment in the region’s post-
secondary institutions. Going forward, the industry’s employment is projected to increase a healthy 1.5 percent
annually through 2020.
 Over the next five years, the overall employment in the Washington, D.C. MSA is estimated to increase at a
per annum rate of 1.1 percent. The primary drivers of employment growth over the next five years will be the
Construction, Professional and Business Services, Leisure and Hospitality, and Education and Health Services
industries.
The following graph illustrates total non-farm employment growth per year, for the Washington, D.C. MSA, and the
U.S.

TOTAL EMPLOYMENT GROWTH BY YEAR

3.5%
1.5%
-0.5%
-2.5%
-4.5%
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Unemployment
Typically, the unemployment rate in the Washington, D.C. MSA is lower than the national unemployment rate.
During first quarter 2016, the unemployment rate was 4.1 percent, which represents a decline of roughly 60 basis
points on a year-over-year basis. The increase in employment continued to be strong enough to offset the increase
in the labor force. Moody’s Analytics projects that the unemployment rate in the Washington, D.C. MSA will continue
to decline and close out 2016 at 4.0 percent.
 The effects of the economic recession caused the MSA’s unemployment rate to peak at 6.4 percent in 2010.
However, the region fared much better than the nation, which saw the unemployment rate rise to 9.6 percent
during the same time.
 Over the long-term, Moody’s Analytics expects the Washington, D.C. MSA’s unemployment rate to experience
a gradual decline over the next few years and ultimately bottom out at 3.9 percent in 2018. The rate will remain
well below the nation’s forecasted unemployment rate of 4.4 percent during the same time.
The following graph compares historical and projected unemployment levels for the Washington, D.C. MSA and
the U.S. as a whole:

UNEMPLOYMENT RATE BY YEAR

11%
8%
5%
2%
05 06 07 08 09 10 11 12 13 14 15 16* 17 18 19 20
*First Quarter 2016
Summary/Conclusion/Observations
The Washington, D.C. MSA’s economy continued to expand in early 2016. Going forward, the region is projected
to experience accelerated growth as consumer confidence improves and incomes rise, boosting discretionary
income for consumer spending. GMP growth is projected to rise to an estimated 2.9 percent while regional
employment expands by a projected 2.0 percent in 2016. However, businesses will continue to adjust to the Federal
Government spending cuts over the long-term. Overall, the outlook for the region is positive, as the presence of the
Federal Government (despite the reduced spending), the strong demographic characteristics, and the above-
average population growth will allow the region to sustain its position as the premier metropolitan area on the East
Coast over the foreseeable future.
Listed below are some notable circumstances affecting Washington’s competitiveness:
 The region’s traditionally strong industries, such as Professional and Business Services and Education and
Health Services, will continue to drive growth over the next five years. However, industries such as Construction
and Leisure and Hospitality, which are highly correlated with the national economy, should also experience
strong growth as the improving national economy increases overall consumer demand. Tourism is anticipated
to increase in the region as numerous conventions and high-profile events, including the 2017 presidential
inauguration, brings visitors to the area.
 Job growth in the region is projected to continue to strengthen throughout 2016, as the region’s economy picks
up steam and the effects of federal spending cuts lessen. As such, overall employment is estimated to grow by
2.0 percent in 2016. This is 30 basis points above the national forecast during the same time.
 The Washington, D.C. MSA’s housing market will to continue to improve, boosting construction employment in
the region. As such, over the next five years employment in the construction industry is projected to grow at a
healthy per annum employment growth rate of 2.9 percent through 2020. In fact, it is anticipated to be the
region’s fastest growing employment sector over the next five years.

 The Washington, D.C. MSA should continue to have an edge over other large metropolitan areas along the
East Coast as its above average population growth, coupled with its highly skilled and well-educated workforce,
promotes the area’s long-term outlook. Accordingly, companies will continually relocate to the area to take
advantage of the affluent and technology savvy population. However, the region’s traffic congestion continually
ranks among the worst in the country. Furthermore, the metro system is proving to be unreliable, with numerous
accidents and delays most recently. If traffic and metro delays continue to get worse, it could undermine the
resident’s quality of life and the region’s competitive advantage over the long-term.
Relative to the subject, Ballston Common (and its redeveloped Ballston Quarter branding) consists of major
shopping center along a primary office and residential corridor spanning from Rosslyn to Ballston, immediately west
of the District. As positioned, the property is heavily dependent on retail sales. Based on this review of the region,
it would appear that that the current economic climate impacting the greater Washington D.C. region has continued
to have a mostly positive impact on properties similar to the subject, due to its retail nature and reliance on area
consumer spending. As the economy and population continue to grow, so too will consumer spending and demand
for retail goods and services, which should have a positive influence on centers such as the subject.
In light of the social and economic attributes of the greater Washington D.C. area, we are generally optimistic about
the short-term outlook. Long-term, the region should see stability and moderate-to-above-average growth, with
increasing real estate values.

BALLSTON QUARTER LOCAL AREA ANALYSIS
Local Area Analysis

LOCAL AREA MAP

Introduction
The next section of the report focuses more closely on the subject’s immediate, local area. A local market area
(neighborhood) is defined as a grouping of complimentary land uses affected by similar operations of the social,
economic, governmental, and environmental forces that influence property value. The area most closely
surrounding the subject, whether it contains residential property, or a mixture of commercial and residential
properties, is called a neighborhood.
Location Overview
The subject property is located in the southeastern quadrant of Wilson Boulevard and Glebe Road, in the central
portion of an area of Arlington known as Ballston. Ballston forms the western section of the Rosslyn-Ballston
Corridor, which spans a northeast-to-southwest direction from the Potomac River; between Interstate 66 (on the
north) and Arlington Boulevard (U.S. Highway 50) (on the south); and ending around George Mason Drive to the
west of the subject. This corridor is heavily developed with medium- to high-density residential uses, as well as
major office, retail and commercial activity.
Arlington (Arlington County) is the second-largest principal city of the Washington metropolitan area. The county is
situated in Northern Virginia, on the south bank of the Potomac River, directly across from Washington, D.C.
Arlington is bordered by Fairfax County and Falls Church (on the northwest, west and southwest), and the City of
Alexandria (on the southeast). With a land area of approximately 26.1 square miles, there are no other incorporated
towns within its borders.
The general boundaries of the local area include:
North: Interstate 66
South: Arlington Boulevard
East: Clarendon/Washington Boulevard
West: George Mason Drive
Transportation/Access
The subject has generally good access from surrounding roadways and primary arterials, with accessibility
enhanced by the public transportation system serving the local area. Arlington forms part of the region's core
transportation network. The county is traversed by two interstate highways, Interstate 66 (in the northern part of the
county), and Interstate 395 (in the eastern part). In addition, the county is served by the George Washington
Memorial Parkway.
Local area accessibility relies on the following transportation arteries and services:
Local North/South Arterials: N. Glebe Road; Washington Boulevard; George Mason Drive
Local East/West Arterials: Wilson Boulevard; Fairfax Drive
Highways & Freeways: Interstate 66; U.S. Highway 50 (Arlington Boulevard)
Other: Reagan National Airport (6.6 road miles southeast); Dulles International Airport (21.4
road miles west); ample public mass transit service (bus and rail). Ballston-MU Metro
Station is located two blocks north of the subject (0.2 miles) at Fairfax Drive and N.

Stuart Street. Ballston–MU is a side platformed Washington Metro station operated

by the Washington Metropolitan Area Transit Authority (WMATA), serving both the
Orange and Silver Lines. The station serves the transit-oriented community of
Ballston and Ballston Common Mall, as well as Marymount University (MU).
Ballston–MU is also a major Metrobus transfer station. The station entrance is
located at North Fairfax Drive and North Stuart Street, near the intersection of Wilson
Boulevard and North Glebe Road. It is the last underground station for outbound
trains on both lines. West of this station, the tracks rise above ground inside the
median of Interstate 66.
Ballston-MU opened on December 1, 1979. Its opening coincided with the

completion of approximately 3 miles of rail west of the Rosslyn station, and the
opening of the Court House, Clarendon, and Virginia Square stations. Ballston would
serve as the western terminus of the Orange Line from its opening through the
opening of its extension to the Vienna station on June 7, 1986.
On September 24, 2013, the Arlington County Board approved a funding plan for the
county's share of revenue generated by Virginia's new transportation legislation. The
plan calls for $500,000 to be allocated for the planning of a new western entrance to
the Ballston–MU station, which would be located at the intersection of N. Fairfax and
Vermont Streets. The funding request implied that the entrance could be built by
2018, with the desire to improve pedestrian congestion accessing the lines. The
station reports average weekday boardings of 11,520 passengers (2015).
It is reported that 40.0 percent of Virginia's mass-transit transit trips begin or end in
Arlington, with the vast majority originating from Washington Metro stations.
Arlington is served by the Orange, Blue, Yellow, and Silver lines of the Washington
Metro.
Additionally, Arlington is served by Virginia Railway Express commuter rail,

Metrobus (regional public bus), Fairfax Connector (regional public bus), Potomac
and Rappahannock Transportation Commission (PRTC) (regional public bus), and
a county public bus system, Arlington Transit (ART). Metroway, the first bus rapid
transit (BRT) in the D.C. area, is a joint project between the City of Alexandria,
Arlington County, and the Washington Metropolitan Area Transit Authority.
Local Area Characteristics

The general area has a mix of commercial, office, professional and retail uses, as well as residential communities
and commercial/business uses. Much of the area’s commercial and retail development is situated in the subject’s
immediate area, along Wilson Boulevard and Fairfax Drive.
Historically, the subject property has acted as a commercial/retail hub for the immediate area, anchoring retail
development for this densely developed section of Ballston. Residential areas surrounding the local area are both
single-family and multi-family in character, with higher-density multi-family uses found intermittent along the major
arterials such as Wilson and Fairfax.
For a number of years, Arlington has pursued a development strategy of concentrating new development near its
transit facilities. Within the transit areas, the government has had a policy of encouraging mixed-use and pedestrian-

and transit-oriented development. Some of these "urban village" communities include: Ballston, Clarendon,
Courthouse, Crystal City, Pentagon City, and Roslyn, among others.
Due to its proximity to Washington, D.C., Arlington is headquarters to many departments and agencies of the federal
government, including the Department of Defense (at the Pentagon), Drug Enforcement Administration,
Transportation Security Administration (TSA), and Defense Advanced Research Projects Agency (DARPA). It is
also home to Ronald Reagan Washington National Airport. In turn, Arlington has historically had the lowest
unemployment rate of any jurisdiction in Virginia. As a result of these influences, office development for supporting
and related businesses is significant in the Arlington area, and particularly within the Rosslyn-Ballston Corridor.
Nearby and Adjacent Uses

Primary uses in the local area include a number of mixed-use and commercial office projects, as well as other
supporting and complementary uses such as retail, service, and hospitality development. Secondary uses in the
local area include numerous medium- to high-density residential areas that surround the vicinity to the north, south,
east and west. As noted, a number of higher-density/high-rise residential projects can be found within the Rosslyn-
Ballston Corridor.
Within the subject’s local area (one-mile radius), there exists some 10.326 million square feet of office uses. The
current vacancy rate is reported to be 19.4 percent, with average asking rents of $41.62 per square foot. In regards
to retail uses, the local area includes 1.546 million square feet, with a current vacancy rate of 6.4 percent, and
average asking rents of $61.81 per square foot (figures according to CoStar).
High-density apartment uses are also a significant feature of the local area. According to CoStar, the local area
(one-mile radius) contains 12,825 apartment units. The average unit size is 850 square feet. The current average
asking rental rate amounts to $2,122 per month ($2.50 per square foot), with a local area vacancy rate of 6.3
percent.
Adjacent Uses (to the subject)
North: Wilson Boulevard; followed by a mix of high-density uses, including Safford Place
I and II (748,066 SF of offices); Lincoln Towers apartments; One and Two Liberty
Center (505,000 SF of offices); the Residences at Liberty Center; and Stuart Park
apartments.
South: N. Glebe Road; followed by several mid- to high-rise residential projects

interspersed with car dealerships. Multi-family and townhouse uses extend further
to the south from the medium- and higher-density uses along Glebe.
East: N. Randolph Street; followed by Founders Square (planned offices as well as 13-
story 350,000 SF office built in 2010), Residence Inn (183 units built in 2012), The
Views (17-story, 257-unit apartments built in 2012), and N. Quincy Street.
West: N. Glebe Road; followed by a mix of mostly older commercial/car dealership uses
planned for mid- to high-rise multi-family development (see summary of 750 N.
Glebe and 672 Flats below). Townhouse and multi-family uses extend further to
the west from the uses along Glebe.
Development Characteristics
The age of the improvements in the local area generally ranges from the mid-1970s to the mid-2000s for much of
the commercial, office, retail, and residential development in the neighborhood. Recent residential development

has also occurred within of the subject’s local area, including predominantly high-rise condominiums over the past
decade or so.
The following chart presents a summary of residential units constructed by year in the local area, with comparison
to Arlington County and the Washington D.C. CBSA:
Local Area Housing Stock

Local Arlington Washington
Area County D.C. CBSA
Housing Units Built 20,096 111,648 2,320,383

Median Year Built 1985 1970 1980
Built 2005-present 13.48% 13.86% 10.61%
Built 2000-04 14.84% 8.04% 9.09%
Built 1990-99 14.94% 7.60% 13.67%
Built 1980-89 12.35% 11.96% 16.04%
Built 1970-79 8.97% 8.45% 14.21%
Built 1960-69 5.79% 11.42% 12.66%
Built 1950-59 6.89% 16.03% 9.88%
Built 1940-49 11.84% 15.16% 5.86%
Built Before 1940 10.91% 7.46% 7.98%
Source: Experian Marketing Solutions, Inc.

* Local area defined as 1.0-mile radius around property.
As shown, the median year built for housing in the local area (1.0-mile radius) is 1985 compared with 1970 for
Arlington and 1980 for Washington D.C., as a whole. Given the local area’s proximity to D.C. and transportation
services, additional residential development is expected (in the former of high-rise projects) in the local area.
Overall, the subject’s local area is viewed as being a mature area that is in a growth/redevelopment stage of its life
cycle.
Development Activity
The subject’s local area has a number of projects planned for development; some that will replace under-utilized
parcels with substantially higher-density development. At this writing, the subject’s redevelopment and new
residential component are among the more significant projects underway in the local area. Other major projects of
note include:
 750 N Glebe Road – The plan for 750 N. Glebe Road was recently approved (June 2016), including the
proposed rezoning of the 121,574 square foot assemblage to RA4.8. The former Mazda dealership will be
razed in favor of a 12-story mixed-use project featuring 483 dwelling units and up to 68,185 square feet of
commercial/retail space, including a grocery and car rental business. Saul Centers is developer.
 672 Flats – 672 Flats is a planned project at 670 N. Glebe Road, adjacent west of the subject. The 43,936
square foot assemblage (improved with Exxon gas station) was approved for re-zoning in October 2015 (from
C-2 Service Commercial to RC Apartment Dwelling), and will contain 173 units among six stories, plus 4,326
square feet of ground floor retail. Gross floor area will comprise 184,129 square feet. The project is planned to
provide a transition from Ballston Common to long-established townhome communities to the west. Penrose
Group is developer.

 Founders Square – Shooshan Company has proposed a site plan amendment to the Founder’s Square plan
for the remaining approved, but unbuilt building known as 4040 Wilson. This is will be the final building to be
built of the five-building development, which is located adjacent east of the subject property. As planned, the
22-story building at the corner of Wilson and Randolph would feature a vertical mix of uses, including one- to
two-levels of retail, eight stories of office, and 12 stories of residential. The building would sit atop five level of
existing below-ground parking (544 spaces). Moreover, the site is planned to have a higher-end fitness center
and spa as one of its primary tenants. The developer expects to complete the project 14 months after signing
an anchor tenant.
 1000 N. Glebe Road – Marymount University and the Shooshan Company have approvals to replace the
existing “Blue Goose” building with office, residential, and educational uses. Plans call for a nine-story building
with 109,981 square feet of educational space and 55,067 square feet of office space, accompanied by a
fifteen- story residential building with 267 units. Approved in January 2014, the project is now under construction
in the Ballston Metro Station area on a block bounded by 11th Street (north), Fairfax Drive (south), Glebe Road
(east), and Wakefield Street (west), two blocks to the north/northwest of the subject. Expected delivery is
planned for 2017.
 4318 N. Carlin Springs Road – The Arlington Partnership for Affordable Housing (APAH) was approval for a
five-story, 104-unit residential building at 4318 N. Carlin Springs Road, approximately three blocks from the
Ballston Common Mall. In addition to affordable housing units, plans call for 5,630 square feet of ground floor
office space to be occupied by APAH. Twenty-one of the existing units are committed affordable. Completion
is expected by Q4 2016.
 3901 N. Fairfax Drive – Located at the eastern edge of the Ballston boundaries, two blocks to the northeast of
the subject, 3901 North Fairfax is a LEED Gold certified 9-story Class A office building currently under
development with over 184,000 SF of space. This will be a mixed-use project with 173,131 square feet of office
and 3,200 square feet of retail. The building will also include a 13,000 square foot performing arts theatre and
conference facility, a state-of-the-art fitness center, and an expansive public plaza. Crimson Partners is
developer, with completion slated for 2016.
 4000 & 4040 N. Fairfax Drive – Two blocks north of the subject, Lionstone Investments and Penzance have
been approved (December 2015) to amend an existing site plan for the Webb Office Building by adding the site
currently occupied by the Carpool restaurant. On the combined site, the applicant has proposed to construct a
22-story, 330-unit apartment building with 8,400 square feet of ground floor retail. The Webb Building will remain
as-is for the near future. Expected delivery is 2018.
 Hyatt Place – Though located at the outer-fringe of the subject’s defined local area, the new Hyatt Place
Arlington/Courthouse Plaza is expected to open in mid-August 2016. Located at 2401 Wilson Boulevard,
approximately 1.6 miles east of the subject, the property will feature 168 rooms.
Demographic Trends
Population growth in the subject’s region has been stable-to-above-average. Within the subject’s local area, given
the established, heavily built-out nature of the immediate vicinity, population growth has, at times, been more
moderate than other suburban areas of the region. This is largely due to the local area’s heavily built-out nature, as
well as its more commercially-oriented development pattern.
In recent years, population growth in the subject’s local area has outpaced other segments of the market; due
largely to the higher-density multi-family uses being developed. Over the next five-years, population growth in the
local area is expected to increase at an above-average clip of 1.33 percent per year.
The following chart presents a summary of recent demographic trends in the local area:

Local Area Demographic Trends

No. Avg HH
Population Households Income
2000 30,302 14,399 $ 82,995

2010 35,972 17,931 --
2015 39,897 19,944 $ 146,428
2020 42,615 21,759 $ 175,486
CAGR 00-15 1.85% 2.20% 3.86%

CAGR 10-15 2.09% 2.15% --
CAGR 15-20 1.33% 1.76% 3.69%
Source: Experian Marketing Solutions, Inc.

* Local area defined as 1.0-mile radius around property.
As evident, population growth in the subject’s local area has been at or slightly above regional growth over the past
five years (2.09% annual average growth compared with Washington D.C.’s 1.54% growth), with a moderation of
this trend anticipated for the local area over the next five years. Average household income in the local area
($146,428) is higher than the regional figure ($125,333).
Special Hazards or Adverse Influences

We observed no detrimental influences in the local market area, such as landfills, flood areas, noisy or air polluting
industrial plants, or chemical factories.
In summary, the subject’s local area represents a major commercial/office district for Arlington. Combined with
Rosslyn, Clarendon, and Virginia Square, this corridor consists of a significant office and residential area for the
region. Clearly, the area’s location is one that is benefited by good local and regional accessibility, as well as mass
transit.
As noted, a number of federal agencies are headquartered in Arlington, including the Air Force Office of Scientific
Research, DARPA, Drug Enforcement Administration, Foreign Service Institute, National Science Foundation,
Office of Naval Research, Transportation Security Administration, United States Department of Defense, United
States Fish and Wildlife Service, United States Marshals Service, and the United States Trade and Development
Agency. Companies headquartered in Arlington include AES, Alcalde and Fay, Arlington Asset Investment, CACI,
Corporate Executive Board, Environ International Corporation, ESI International, FBR Capital Markets, Interstate
Hotels & Resorts, Rosetta Stone, and Strayer Education. These entities support a large number of workers in the
local area, as well as related and supporting commercial activity.
Another major landmark in the area is Arlington National Cemetery, an American military cemetery established
during the American Civil War on the grounds of Confederate General Robert E. Lee's home. It is directly across
the Potomac River from Washington, D.C., north of the Pentagon. With nearly 300,000 graves, Arlington National
Cemetery is the second-largest national cemetery in the United States. Other frequently visited sites near the
cemetery are the U.S. Marine Corps War Memorial, commonly known as the "Iwo Jima Memorial," the U.S. Air
Force Memorial, the Women in Military Service for America Memorial, the Netherlands Carillon, and the U.S. Army's
Fort Myer.

On balance, the outlook for the subject’s local area (neighborhood) is generally optimistic, with stability and average
growth anticipated. Over the long-term, we maintain a stable outlook regarding the subject’s local area in terms of
growth and stability. The area’s location is benefited by good local and regional accessibility, as well as mass transit
services that are not found in all sections of the region. Moreover, the local economy is relatively stable and is
expected to continue to expand, while local demographic trends continue to be stable. Seeing above-average
growth in recent years, population and household trends are expected to experience continued average-to-stable
growth into the foreseeable future.
Given the outlook for the local area, we believe the prospect for net appreciation in real estate remains moderate-
to-good. After reviewing the local area data, a positive effect on real estate values is anticipated in the foreseeable
future.

BALLSTON QUARTER RETAIL MARKET ANALYSIS
Retail Market Analysis

Following the regional and local area analyses, the next section of the report provides an overview of the retail
market in which the subject competes. This type of analysis helps to place the subject’s performance into
perspective, and to establish expectations of future performance relative to investor behavior, supply and demand,
and so forth. Following the review of national and local market trends, the subject’s trade area and demographic
profile are reviewed.
Introduction
A variety of factors influence the performance of a property in the market. In this section, we provide an in-depth
analysis of both the market in which the subject property competes, and its position within that market. Our analysis
begins by defining the subject’s property type so that it can be understood in the context of the local retail structure.
Next, we thoroughly review current market statistics such as supply, absorption, vacancy, effective rental rates and
new and proposed construction. Following a review of the competition in the market, the subject’s anchor profile
can be compared to other properties in the region. Having quantified these components, we then determine a
reasonable trading area for the subject based on highway accessibility, geographic constraints, and area growth
patterns, including planned infrastructure improvements. We finish the Market Analysis by examining the underlying
demographic indices that define the trade area, such as population, household income and retail sales potential.
Comparisons are made to larger study areas such as the CBSA, state and U.S., as a whole, in order to place the
historical and prospective performance of the subject trade area in context.
A retail center's trade area contains people who are likely to patronize that particular center, and its ability to draw
these people comes from the strength of the anchor tenants, complemented by regional and local tenants.
Customers are drawn by a given class of goods and services, and a successful combination of these elements
creates a destination for customers seeking both variety and the comfort and convenience of an integrated shopping
environment.
Given its size and configuration, the subject is, perhaps, best described as a Regional Center. Regional centers
reflect a general merchandise or fashion-oriented concept and are typically enclosed malls encompassing 400,000
to 800,000 square feet of GLA on 40 to 100 acres. They will typically have two or more anchors (full-line department
store, junior department store, mass merchant, discount department store, fashion apparel) with a 50 to 70 percent
anchor ratio and a primary trade area of 5 to 15 miles.
To define and analyze the market potential for Ballston Quarter, we must first establish the boundaries of the trade
area from which customers will be drawn. In some cases, defining the trade area may be complicated by the
existence of other retail facilities on main thoroughfares in trade areas that are not clearly defined or whose trade
areas overlap with that of the subject.
Once the trade area is defined, the area's demographics and economic profile can be analyzed. This will provide
key insight into the area's dynamics as it relates to the subject.
National Retail Market Overview

The first portion of this market analysis provides a brief overview of national retail market trends, followed by an
analysis of the local retail market.

Introduction
Even almost a decade after the sub-prime mortgage crisis, the U.S. hasn’t quite yet been able to return to pre-crisis
growth levels. Through 2015, the U.S. economy expanded at a sub-par rate of 2.4 percent year over year. According
to Forbes, throughout last year, the country confronted weakened exports stemming from the strong dollar, falling
commodity prices due to the Chinese slowdown, and a broader global weakening in demand as commodities-
dependent emerging market economies lost strength. Even the stock markets, which had rallied for six years
continuously, finished flat in 2015. Volatility has plagued the stock market through the first-half of 2016. In recent
months however stocks have performed at record levels. Nonetheless, experts warn that a dip in the second half
may be eminent as there are many uncertainties; including Brexit negotiations, China’s attempt to manage its
slowdown, and the upcoming presidential election in the U.S.
The slump in oil prices, which began in 2014, intensified in 2015 and caused prices to sink to an 11-year low in
December 2015. In 2015, advanced economies saw nearly 175,000 layoffs in the energy sector; roughly 59,000 of
those occurred in the U.S. Commercial banks do have a fair amount of exposure to the energy sector: an estimated
1.5 percent to 3.5 percent of loans on bank balance sheets are linked to the energy industry. But overall, the fall in
oil prices is a net positive for the U.S. economy as lower oil prices spur increased consumer and business
consumption, benefiting the majority of U.S. property markets.
Consumer spending, which jumped 4.2 percent in the second quarter, helped offset lower investment by
businesses. As such, the U.S. economy continues to plod along albeit in uninspiring fashion, as evidenced by the
fact that the gross domestic product climbed at just a 1.2 percent annualized rate in the second quarter. For the
year as a whole, we now see U.S. GDP growing by about 1.4 percent, versus 2.6 percent in 2015. Growth in the
second half of the year is estimated to be at a 2.0 percent pace, moderately higher than first-half growth that
averaged just 1.0 percent. However, the possibility of a U.S. dollar growing stronger, uncertainty surrounding the
U.S. presidential contest and other risks could further dampen business investment and make consumers more
cautious, too. GDP growth in 2017 will likely be a little better, at around 2.0 percent. Continuing job and wage gains
will further pad Americans’ pockets with disposable income.
After a sturdy reversal in June, the underlying strength in the U.S. labor market was cemented in July. The month
saw the addition of 255,000 new jobs, which is significantly above the 180,000 rise expected by analysts. The
unemployment rate remained at 4.9 percent. However, the figure was short of the June addition, which was revised
up to 292,000 from 287,000 new jobs reported earlier.
House sales and prices are rising. Home sales in June were 5.57 million at annual rates, the highest since February
2007 when national home prices peaked. Currently prices as measured by the S&P/Case-Shiller National Home
Price Index are climbing at a 5.0 percent annual rate and are a mere 3.0 percent from their all-time peak. Factors
that are boosting house prices include a decrease in the number of house listed for sale, the availability of cheap
mortgages and recent increases in residential construction. Total existing-home sales, which are completed
transactions that include single-family homes, townhomes, condominiums and co-ops, inched 0.4 percent to a
seasonally adjusted annual rate of 5.47 million in January from a downwardly revised 5.45 million in December.
Sales are now 11.0 percent higher than a year ago – the largest year-over-year gain since July 2013 (16.3 percent).
According to the National Association of Realtors, in 2016, existing sales are expected to grow between 1.0 and
2.0 percent (5.30 to 5.40 million) and prices between 5.0 and 6.0 percent.
Retail and food service sales have grown at a compound average rate of 2.7 percent over the last 10 years. In 2015
they were up 2.3 percent annually. More recently, in June 2016 they were up 0.6 percent compared with the month
before, and the industry overall posted a solid 2.7 percent rise in revenue compared with the same period in 2015.
Nonstore retailers emerged the clear winners as more and more consumers turned online to shop. Online retailers,
including online marketplaces such as Amazon and Etsy, plus retailers with e-commerce sites—Walmart, Target
and others—posted a strong 14.2 percent gain over the same month a year ago. The last couple years, retail

industry sales have grown at a rate faster than many other industries. Retail sales growth has been driven by rising
employment and income along with lower oil prices, which free up income for spending on other goods and services.
The National Retail Federation is predicting steady growth for 2016 projecting that sales will rise above the 10-year
average of 3.4 percent.
Annual retail sales are as follows:
Annual Retail and Food Service Sales
$5.32
$5.21
$5.01
Annual Retail Sales (in trillions)
$4.83
$4.60
$4.44
$4.39
$5
$4.29
$4.29
$4.09
$4.07
$3.85
$3.61
$3.46
$3.38
$4
$2.66
$3
$2
Source: U.S. Department of Commerce
National Retail Investment Sales Market

Retail Transaction Activity
As the economy improves, retail transaction volumes are beginning to rebound. Pricing metrics have strengthened
for retail properties with per-square-foot prices rising, average cap rates for primary assets falling and the
Moody’s/RCA Commercial Property Price Index (‘CPPI”) reaching its highest post-recession level with a 13.0
percent rise in 2015. Year-end 2015 data available from Real Capital Analytics indicates that retail transactions
have totaled over $87.6 billion, a 4.8 percent increase over the $83.6 billion in transactions recorded in the previous
year. This was the highest sales volume since RCA began tracking the market in 2001. The increased volumes are
a strong indication that investors feel there is growth potential in the retail market. Through the first half of 2016,
transaction volumes reached just $36.6 billion. This figure is down nearly 20 percent from year earlier figures.
Cross-border activity as well as private equity investment volumes were down in the first half of 2016 compared to
2015.
The following graph displays annual retail transaction volume since 2001:

Annual Retail Transaction Volume
$87.6
Transaction Totals (in billions)
$83.6
$81.6
$100
$90
$63.9
$62.9
$80
$61.1
$58.0
$57.1
$70
$44.6
$60
$36.6
$36.2
$50 $28.6
$25.5
$22.1
$40
$16.3
$14.0
$30
$20
$10
$0
Source: Real Capital Analytics, Inc.

Note: Data excludes transactions less than $5.0 million,
Retail Capitalization Rates
As the credit markets continue to loosen, transaction activity is on the rise. Investors have increasingly focused on
real assets, such as commercial real estate, as a hedge against inflation in the wake of previous economic
uncertainty. During 2015 capitalization rates (OARs) continued to compress as demand increased.
The PwC Real Estate Investor Survey reports that national power center and strip shopping center OARs are now
below pre-recession levels. Through second quarter 2016, power center OARs averaged 6.4 percent, while regional
mall and strip shopping center OARs averaged 6.0 and 6.3 percent, respectively. In the current market, investors
are viewing higher-quality assets in primary urban and first-tier suburban markets most favorably.
With significant investor interest in the most dominate markets, capitalization rates have compressed notably among
much of the most desirable product. As such, secondary markets are gathering more attention as sources of
opportunity. It should also be noted that the combination of low interest rates and increasing loan-to-value ratios
are driving many investors to turn to real estate as an alternative investment vehicle. However, we would note that
as we continue into Q3 2016, despite strong market fundamentals there is a growing consensus that with the
exception of trophy assets, cap rates have stabilized for most other retail asset classes.
The following graph depicts quarterly national retail capitalization rates by property type since 2008:

National Retail Cap Rates
9.0%
8.5%
8.0%
7.5%
7.0%
6.5%
6.0%
5.5%
National Power Center National Regional Mall National Strip Shopping Center
Source: PwC Real Estate Investor Survey
CMBS Market
The availability of debt including the resurgence of Commercial Mortgage Backed Securities (CMBS) has
contributed to increases in transaction activity. CMBS issuance was up for the sixth straight year while commercial
real estate prices continued to increase in nearly all sectors, despite increased economic volatility.
Commercial Mortgage Alert, an industry publication, estimated that new CMBS loan originations totaled $100.9
billion in 2015, up 7.2 percent from $94.1 billion the year before. At the end of 2015 the thought was that total
volume in 2016 might come in at roughly $115 billion to $125 billion. However, the first half of the year has seen
substantial volatility in MBS spreads. This volatility has resulted in some of the biggest losses since the sectors
revival in 2010. The uncertainty has prompted conduit programs to significantly scale back lending as the market
adjusts. Through August 2016, CMBS issuance totaled just $39.0 billion. Life Companies and other balance sheet
lenders have taken up some of the slack but the feeling is that CMBS lenders will have a strong finish this year.
The following table compares annual CMBS volume over the last eight years:
U.S. CMBS ISSUANCE (IN BILLIONS)

YTD August
2007 2008 2009 2010 2011 2012 2013 2014 2015
2016
TOTALS $228.6 $12.1 $2.7 $11.6 $32.7 $48.2 $86.1 $94.1 $100.9 $39.0
Source: Commercial Mortgage Alert
The prominent concern is the amount of CMBS loans that are set to mature in the near future. According to Trepp
LLC, between now and 2018, $205.2 billion of conduit loans come due, with $87.1 billion maturing in 2016 and
$105.8 billion in 2017. Maturities scheduled for 2018 drop off to $12.8 billion. The peak of maturity defaults will
occur in 2016 and 2017, when the CMBS loans that were underwritten at the height of the market in 2006 and 2007
will come due. Approximately $169 billion of CMBS loans were issued in 2005; in 2007, that number reached $229
billion. With issuance hovering at $100 million, there is a vast gap between issuance and what will come due.

Further, current capital is subject to underwriting standards that are more stringent than those that were used at
the time of origination.
The volume of loans coming due in the next two years remains daunting. However, healthy real estate market
fundamentals have enabled many owners to increase rents and income, which has contributed to an increase in
property values and made refinancing easier than it otherwise would be. According to the latest from Trepp LLC,
the delinquency rate moved higher for the fifth straight month in July. The delinquency rate for US commercial real
estate loans in CMBS is now 4.76 percent, an increase of 16 basis points from June. The rate is 66 basis points
lower than the year-ago level and 41 basis points lower since the beginning of the year. However, the rate is now
61 basis points above its multi-year low of 4.15 percent that was reached in February 2016. The all-time high was
10.34 percent in July 2012.
Commercial Property Price Index
The Moody’s/RCA Commercial Property Price Index (CPPI) is a periodic same price change index of U.S.
commercial investment properties. The Moody’s/RCA CPPI uses advanced repeat-sale regression analytics to
measure price changes in U.S. commercial real estate.
As of March 2016, the most recent figures published, Moody’s/RCA CPPI for all properties measured an increase
over 13.0 percent year-over-year. Currently at 205.5, the index has surpassed its previous peak of 186.06 measured
in the December 2007. For retail properties, CPPI figures reported by Moody’s/RCA have indicated growth of 10.2
percent during the year-ending March 2016. The current Moody’s/RCA CPPI figure for retail properties is 182.6,
shy of the index peak of 190.8 witnessed in September 2007.
The following graph displays the CPPI Index between January 2001 and March 2016:
Commercial Property Price Index Comparison
220 510
200 460
180
410
160
360
140
310
120
100 260
80 210
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Moody's National - All Property (left axis) Moody's National Retail (left axis) NCREIF National Aggregate (right axis)
Sources: Moody's/RCA
Similarly, the National Council of Real Estate Investment Fiduciaries (NCREIF) also compiles a property price index
based on a large pool of individual commercial real estate properties. The NCREIF Property Price Index is a
quarterly time series composite total rate of return measure of investment performance of said commercial real
estate properties acquired in the private market for investment purposes only. Based on data from NCREIF, the
property price index peaked in the first quarter of 2008 at 419.88 before falling 29.3 percent to 296.81 in the first
quarter of 2010. Since bottoming, the NCREIF Property Price Index has surpassed its pre-recession levels by 15.0

percent, standing at 489.67 as of March 2016, reflecting an increase in commercial real estate values over recent
quarters.
Retail Market Conditions

Retail Construction Activity
Despite improving fundamentals in the retail real estate market, developers and lenders are still cautious about
investing in new construction projects. The exception being outlet center development and projects located in the
highest-performing markets with strong tenant mixes possibly including grocery retailers, drug stores or similar net
leased properties that have shown notable strength in the current market. According to data from the CoStar Group,
retail construction starts peaked at 66.0 million square feet in the second quarter of 2006. Given the collapse of
credit markets and consumer demand during the recent recession, construction starts fell significantly in the ensuing
years and continues to show only modest improvement. Recently, retail construction starts totaled just 9.9 million
square feet in the first quarter of 2016.
The following graph shows retail construction starts from the second quarter of 2006 through first quarter 2016:
Retail Construction Starts (SF in Millions)
70.0 Retail Construction Starts Peaked at 66.0 Million Square Feet in Q2 2006
60.0
SQUARE FEET IN MILLIONS
50.0
40.0
30.0 9.9 Million Square Feet Commenced in 1Q2016
20.0
10.0
66.0
64.2
36.2
54.0
52.2
55.1
28.6
40.4
33.2
26.2
18.9
15.4
13.4
12.8
10.3
10.6
13.1
10.9
14.2
13.9
12.2
20.4
16.9
17.1
11.8
16.4
18.2
16.9
13.9
16.4
20.1
18.9
16.5
12.0
9.7
8.9
7.0
9.3
9.2
9.9
0.0
Source: CoStar Group
Looking forward, new construction activity is expected to remain tepid until the industry works through the large
amounts of debt maturities scheduled to come due between now and 2017. Vacancy amongst top-tier product
across the country’s primary markets is tightening. In fact, the national vacancy rate as reported by CoStar was 5.9
percent which is weighted lower by the primary markets which benefited from 20 million square feet of net
absorption. Green Street Advisors notes that the occupancy gap between high-quality and average-quality centers
is the widest it has been in recent years. High-quality centers are seeing occupancy rates in the mid- to high- 90.0
percent range while average-quality centers struggle to reach the high- 80.0 percent range. Significant blocks of
space remain available within secondary and tertiary markets. This space can be increasingly difficult to fill as many
national retailers reevaluate their real estate positions with a focus on efficiency across their current holdings and
strengthening of their online presence. Suzanne Mulvee, Director of Retail Research for CoStar notes that the 70.0

million square feet of new shopping center space currently under construction across the U.S is the highest level
since the last recession. We expect retail construction starts to continue this upward trend over the next 12 to 18
months.
Retail Price Per Square Foot
Unit pricing levels achieved by shopping centers has generally followed broader economic patterns. Between 2003
and 2008, a time from when the market had picked up after the last recession, up until the most recent market fall-
out, the average price per square foot for retail assets increased by 50.8 percent to a peak of $187 per square foot
in 2008. However, in 2010, the average price per square foot for all retail property would sharply decline to a low of
$142 per square foot. Not until late 2010/early 2011 did the price per square foot begin to recover, and in 2012 it
jumped to $182 per square foot, a 28.1 percent increase over 2010.
Second-quarter 2016 data, continued to indicate strength. Total retail property sales are averaging over $200 per
square foot. The recent averages surpass the 2008 peak, and baring some shift in fundamentals should continue
to set new highs for the foreseeable future. We would note that RCA reports that there is a widening gap between
unit prices paid in primary markets vs. secondary and tertiary markets. A flight to quality is prevalent in all of the
major CRE market groups, including retail.
The following graph depicts the historical average price per square foot for retail assets as surveyed by RCA through
second-quarter 2016:
$338
National Average Price Per Square Foot
$325
$300
$235
$275
$250
$179
$225
$200
$175
$150
$125
$100
$75
Source: Real Capital Analytics, Inc. Mall & Other Strip Total Retail
Note: Data excludes transactions less than $5.0 million
Vacancy and Rental Rates
The graph below shows the severity of the last recession in terms of declining absorption and rising vacancy rates.
In 2008, retail absorption was negative for the first time since Reis began collecting data in 1986. Mirroring the
rebound in other commercial property sectors, leasing and occupancy of U.S. malls and shopping centers saw
improved fundamentals through 2015. According to Reis, the low amount of new supply of retail space should
reflect as a decline in retail vacancy rates through 2020. Between 2016 and 2020, Reis data forecasts absorption
in the retail market to average approximately 22.5 million square feet per year while construction completions
average approximately 17.3 million square feet per year. Given this forecast, overall vacancy rates in the national
retail market are projected to fall approximately 160 basis points to 8.4 percent from their current reading near 10.0
percent.

The subsequent graph depicts annual market conditions within retail markets across the U.S.:
During 2016, falling vacancy rates and rising demand in the retail market has brought the start of meaningful rent
growth for landlords in major U.S. retail markets. According to Reis data, prior to the latest economic recession,
annual effective retail rental rates grew at an average rate of 2.4 percent. Following nearly four years of negative
rent growth during the economic fallout from 2008 to 2011, effective retail rental rate growth figures are now
averaging near pre-recession levels.
The following graph shows a composite of asking and effective annual rent growth within retail markets across the
U.S.:

Store Closings
According to the most recent annual data collected by the International Council of Shopping Centers (ICSC),
retailers and restaurateurs announced that approximately 2,190 establishments closed in the first half of 2016.
Store closing in the first half of 2016 equates to over 58.8 million square feet. The majority of retailers announcing
store closings are mall-based tenants which have proven very problematic for mall owners with class-B and class–
C properties.
The following is a list of annual store closings:
ANNUAL STORE CLOSINGS

1ST HALF-YEAR 2ND HALF-YEAR
2016 2,190
2015 5,130 736
2014 4,403 1,080
2013 1,310 1,282
2012 3,511 953
2011 2,329 1,743
2010 4,396 1,176
2009 2,917 1,894
2008 3,272 3,641
2007 3,081 1,522
2006 2,749 1,981
2005 1,897 2,372
2004 3,750 2,553
2003 2,972 2,001
2002 3,227 2,723
2001 4,149 2,892
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
Source: ICSC
Discount department store retailers announced that they will close over 2.0 million square feet. In addition, Wal-
Mart announced it will close 269 stores, including 154 within the U.S. J.C.Penney will be permanently shutting down
47 more stores after closing a total of 40 stores in 2015. Sears has shut down approximately 600 locations over the
past year or so, as sales continue to suffer at stores that remain open. As well, Macy’s recently reported that it will
close 36 stores and eliminate 4,500 positions in 2016. Office Depot/Office Max has closed 400 stores and expects
to close another 400 more over the next few years. Other contractions were seen in the teen apparel, sporting
goods and office supply chains.
While declining sales have forced many retailer chains to pare down their number of outlets, other retailers are
closing due to shifts in the marketplace. As such, many struggling retailers have been forced to reinvent how they
reach customers.
Mergers and Acquisitions
It was a banner year for mergers and acquisitions as an estimated $5.03 trillion worth of deals were struck
worldwide, exceeding the $4.30 trillion announced in 2007. According to PNC Research, acquisitions involving 22

major retailers were announced during the year, translating to total deal volume of approximately $43.6 billion, well
above the $34.0 billion among 35 major company acquisitions in 2014.
Less than two years after the merger of Office Depot and OfficeMax, Staples has offered to buy the combined entity
for $6.3 billion. However, the FTC has rejected the combined entity. The companies said they would not appeal the
decision and would instead abandon the deal.
Aeropostale Inc has been negotiating a potential sale to private equity firm Versa Capital Management LLC that
would save thousands of jobs at the bankrupt U.S. retail chain and keep many of its stores open, according to a
court filing. Versa, which specializes in distressed investments, would pay cash for Aeropostale's inventory and
take on over 500 of the chain's leases, located mostly in malls across the United States.
Ascena Retail Group Inc. purchased Ann Inc. in August 2015 for roughly $2.16 billion, adding the Ann Taylor and
Ann Taylor Loft chains to its collection of women’s apparel brands. The combined company has approximately $7.3
billion in annual sales and operates more than 4,900 stores focused exclusively on women’s clothing and
accessories.
Walgreens Boots Alliance Inc. agreed to purchase Rite Aid Corporation for about $9.4 billion. Including assumed
debt, the transaction is valued at $17.2 billion, making it the second largest deal involving a retailer in 2015. While
the combination would more than double Walgreens’ footprint in 14 states (including Pennsylvania, New York, and
Michigan), there does not appear to be significant overlap in key states such as Florida, Texas, and Illinois.
In the grocery segment, Royal Ahold and Delhaize Group combined their business as Ahold Delhaize, which
created one of the largest supermarket chains in the U.S. The merger, valued at $29.11 billion, results in roughly
2,000 U.S. stores and 6,500 locations worldwide, with sales of more than $60.0 million. Additionally, Kroger
purchased Roundy’s Supermarkets for approximately $800.0 million. The deal provides Kroger with 151 new stores
and 101 pharmacies in new geographies including Milwaukee, Madison, and Northern Wisconsin, which are served
under the Pick ‘n Save, Copps, and Metro Market banners. The merger also expands Kroger’s presence in the
Chicagoland area, where Roundy’s operates 34 stores under the Mariano’s banner.
E-Commerce
In the age of Amazon.com, stores are trying to reinvent themselves, generally using one of two strategies: deliver
products more quickly than and nearly as inexpensively as online sellers, or offer shopping experiences that entice
people to visit their establishment and buy something. With the rise of online purchasing and increased price-
sensitivity from consumers, retailers without a notable e-commerce platform will suffer while online-sales and sales
from smartphones continue to grow at a quicker pace than brick-and-mortar sales.
Online sales in the United States are expected to reach $523 billion in the next five years, up 56 percent from $335
million in 2015, and mobile devices are expected to be a key driver in that growth, Forrester Research Inc. says.
Forrester predicts online sales will grow by an average annual rate of 9.3 percent over the next five years. In the
first quarter of 2016, U.S. e-commerce sales grew 15.1 percent. U.S. e-commerce sales growth continues to
outpace stores. In the first quarter of 2016, the web represented 11.2 percent of total retail sales when factoring out
items not normally bought online like fuel and automobiles. This is the highest e-commerce penetration in history.
The following chart tracks annual e-commerce sales from 2013 to 2015 with forecasts thru 2018, as reported by
InternetRetailer.com and Forrester Inc.:

Additionally, many retailers are beginning to realize that rather than close stores, they can sustain them by giving
them a much-needed facelift. Reinventing the store involves a thorough rework that often includes creating a "brand
story" to engage and involve a consumer in the shopping experience. In a recent study conducted by Westfield, the
five trends that point toward a new era in retail include; Rental Retail, Enhanced Realty Retail, Classroom Retail,
Sensory Retail and Loyalty programs that recognize good choices. While it’s not the topic of this overview to address
the specifics of these trends, the point here is that the Evolution of Retail will continue to result in engaging and
experiential venues that will entice and stimulate consumer behavior.
National Retail Market Summary

The overall picture for retail is positive over the near-term. With another year of increasing e-commerce sales,
retailers are starting the year off by “right-sizing” and revisiting their real estate strategy to become more omni-
channel. While this will result in a greater number of store closures this year, the trend will only impact a few retail
sectors (primarily apparel and department stores). As a result, malls and lifestyle centers will feel most of the pain
with trophy centers and prime urban locations will only be minimally impacted.
The U.S. economy continues to be in a period of growth that we expect to carry through the second half of 2016
and into 2017. Employment, income and output will all continue to reach new highs. Nonetheless, recognizing the
uncertainty that comes with an election year, we still believe the risks to this outlook are modest. The result should
be a good year for the commercial real estate sector in general and retail in particular.
Local Retail Market Overview

Next, an analysis of retail market trends in the subject region is warranted.
Introduction
Data for the analysis of the Suburban Virginia Retail market was provided by Reis, Inc., a leading provider of
multifamily and commercial real estate performance information since 1980. Their proprietary database includes
trends, forecasts, news and analyses for approximately 200,000 multifamily and commercial properties in 232
metropolitan markets (4 property types multiplied by 58 metropolitan areas) and roughly 2,500 submarkets.

Current and historical figures are compiled by highly qualified industry analysts. Surveyors, as they are called, are
responsible for gathering information on property availabilities, rents and lease terms, etc. by directly contacting
owners, managers and leasing agents. Projected data is calculated using a suite of economic forecasting models
developed by The Economic Research Group, a team led by Ph.D. economists.
Reis’ data are released on a quarterly basis, and is widely recognized as a fundamental tool for appraisers
throughout the country.
It is acknowledged that the Reis survey does not include major regional shopping centers such as the subject in its
dataset. Nevertheless, the survey can be used to provide an illustration of the trends impacting the subject’s local
area retail market.
Suburban Virginia Retail Market
Reis, Inc. classifies the Suburban Virginia Retail market into five submarkets, and segregates inventory by type of
space (community versus neighborhood shopping centers).
According to Reis, the subject lies in the Arlington/Alexandria submarket of Suburban Virginia.
Submarket Snapshot
In the current Reis survey, the Suburban Virginia Retail market contains 40,293,000 square feet of space. Suburban
Fairfax County is the largest submarket, comprising 32.0 percent of the area's total inventory. Arlington/Alexandria
is the smallest submarket with 12.3 percent of total inventory.
The following table presents the geographic distribution of inventory, along with other statistical information for the
most recent quarter.
GEOGRAPHIC DISTRIBUTION OF INVENTORY

Community Inventory % Vacancy Net Asking Rent
Submarket Neighborhood (SF) Total Rate (%) Absorption ($/SF)
Arlington/Alexandria C 2,383,000 5.9 2.9 5,000 $34.49
Arlington/Alexandria N 2,567,000 6.4 8.4 0 $35.52
Arlington/Alexandria NC 4,950,000 12.3 5.8 5,000 $35.02
Loudoun County C 3,839,000 9.5 4.6 -16,000 $28.40
Loudoun County N 2,909,000 7.2 6.9 8,000 $25.93
Loudoun County NC 6,748,000 16.7 5.6 -8,000 $27.34
Prince William County C 6,142,000 15.2 6.3 12,000 $21.28
Prince William County N 3,635,000 9.0 5.0 11,000 $20.85
Prince William County NC 9,777,000 24.3 5.8 23,000 $21.12
Southeast Fairfax County C 2,738,000 6.8 5.1 0 $32.41
Southeast Fairfax County N 3,202,000 7.9 3.3 6,000 $30.31
Southeast Fairfax County NC 5,940,000 14.7 4.1 6,000 $31.28
Suburban Fairfax County C 7,130,000 17.7 4.3 -15,000 $34.04
Suburban Fairfax County N 5,748,000 14.3 4.9 -18,000 $33.78
Suburban Fairfax County NC 12,878,000 32.0 4.6 -33,000 $33.92
Total Community C 22,232,000 55.2 4.9 -14,000 $29.39
Total Neighborhood N 18,061,000 44.8 5.5 7,000 $29.55
Total/Average NC 40,293,000 100.0 5.1 -7,000 $29.46
Source:
© Reis, Inc. 2016
Reprinted with the permission of Reis, Inc.
All Rights reserved.
As of first quarter 2016, the overall vacancy rate for the region was 5.1 percent. Arlington/Alexandria has the highest
overall vacancy rate of 5.8 percent, while Southeast Fairfax County has the lowest vacancy of 4.1 percent.

The average asking rental rate for all types of space in the region is $29.46 per square foot. The highest average
asking rent of $35.02 per square foot is being achieved in Arlington/Alexandria. Conversely, the lowest rent is being
achieved in Prince William County at $21.12 per square foot.
Community shopping centers constitute 55.2 percent of existing inventory and are exhibiting a lower vacancy rate
(4.9 percent) than Neighborhood centers (5.5 percent) and lower average asking rents of $29.39 versus $29.55 per
square foot.
Supply Analysis
Vacancy Rates
As noted, the first quarter 2016 overall vacancy rate for the Suburban Virginia region is 5.1 percent. As shown in
the chart below, vacancy rates decreased from 6.7 percent in 2011 to 5.1 percent in 2015. Over the near term, Reis
projects a continued decline in vacancy levels for Suburban Virginia, with vacancy varying between 4.9 percent in
2016 and 4.7 percent in 2020.
In the subject’s Arlington/Alexandria submarket, the first quarter 2016 overall vacancy is higher than the region, at
5.8 percent. Between 2011 and first quarter 2016, vacancy rates decreased from 6.2 percent to 5.9 percent. Over
the near term, Reis is projecting a rise in vacancy for the subject submarket, with vacancy levels ranging from 5.6
percent in 2016 to 8.8 percent in 2020.
As will be discussed in a subsequent section, it appears that forecasts within the subject’s submarket area are
being impacted by a mathematical change in the area’s inventory, which has caused net absorption calculations in
Arlington/Alexandria to be negative; thereby impacting the forecasting models for data groups such as Reis and
CoStar. Please see Retail Submarket Analysis in a later subsection of this report for additional explanation.
The following table presents historical and projected vacancy for the region and subject submarket.
HISTORICAL AND PROJECTED VACANCY RATES (%)

Suburban Virginia Arlington/Alexandria
Year Community Neighborhood Total Community Neighborhood Total
2011 6.0 7.5 6.7 3.1 9.0 6.2
2012 6.1 7.9 6.9 3.7 9.1 6.5
2013 5.6 7.2 6.3 4.2 8.8 6.6
2014 5.2 6.0 5.6 3.2 9.5 6.5
2015 4.8 5.5 5.1 3.1 8.4 5.9
1Q16 4.9 5.5 5.1 2.9 8.4 5.8
2016 --- --- 4.9 --- --- 5.6
2017 --- --- 4.8 --- --- 6.4
2018 --- --- 4.8 --- --- 7.4
2019 --- --- 4.7 --- --- 8.2
2020 --- --- 4.7 --- --- 8.8
Source: Reis, Inc.
Note: Reis does not differentiate between space that is available directly from the landlord or as a sublease. Any space that is
available immediately for leasing (i.e. within 30 days) is considered vacant by Reis' standards.
As shown, community shopping centers within the region are exhibiting a lower vacancy rate (4.9 percent) than
neighborhood centers (5.5 percent). Within the subject submarket, community centers are exhibiting lower
vacancies than neighborhood centers (2.9 percent versus 8.4 percent).

Construction Completions
Between 2011 and 2015, a total of 765,000 square feet of retail space was completed throughout the Suburban
Virginia region, or an average of 153,000 square feet per year. A total of 0 square feet of space was completed as
of first quarter 2016. Over the next five years, Reis projects that an additional 1,722,000 square feet of new space
will be completed in the Suburban Virginia market.
In the Arlington/Alexandria submarket, a total of 0 square feet of space was completed between 2011 and 2015, or
an average of 0 square feet per year. This equates to 0.0 percent of new construction for the region. Over the next
five years, Reis projects that an additional 273,000 square feet of new space will be completed in the
Arlington/Alexandria submarket.
The following table presents historical inventory and projected completions for the region and subject submarket.
HISTORICAL AND PROJECTED INVENTORY & COMPLETIONS (SF)

Inventory Inventory Total Inventory Inventory Total % of
Year Community Completions Neighborhood Completions Completions Community Completions Neighborhood Completions Completions Region
2011 21,967,000 0 17,579,000 18,000 18,000 2,383,000 0 2,567,000 0 0 0.0%
2012 21,967,000 0 17,796,000 217,000 217,000 2,383,000 0 2,567,000 0 0 0.0%
2013 21,967,000 0 17,828,000 32,000 32,000 2,383,000 0 2,567,000 0 0 0.0%
2014 21,967,000 0 17,841,000 13,000 13,000 2,383,000 0 2,567,000 0 0 0.0%
2015 22,232,000 265,000 18,061,000 220,000 485,000 2,383,000 0 2,567,000 0 0 0.0%
1Q16 22,232,000 0 18,061,000 0 0 2,383,000 0 2,567,000 0 0 0.0%
2016 --- --- --- --- 56,000 --- --- --- --- 0 0.0%
2017 --- --- --- --- 305,000 --- --- --- --- 50,000 16.4%
2018 --- --- --- --- 411,000 --- --- --- --- 67,000 16.3%
2019 --- --- --- --- 459,000 --- --- --- --- 75,000 16.3%
2020 --- --- --- --- 491,000 --- --- --- --- 81,000 16.5%
2011-2015
Total Completions 265,000 500,000 765,000 0 0 0
Annual Average 53,000 100,000 153,000 0 0 0 0.0%
Source: Reis, Inc.
Further discussion of new construction projects is included in a following subsection of this Local Retail Market
Analysis.
Demand Analysis
Rental Rates
As shown in the following chart, effective rents in the region have increased from $24.37 per square foot in 2011,
to $26.03 per square in 2015; indicating a compound annual growth rate (CAGR) of 1.7 percent. Over the next five
years, effective rents are expected to increase between $26.91 per square foot in 2016 and $31.90 per square foot
in 2020.
In similar fashion, effective rental rates in the Arlington/Alexandria submarket have increased, ranging from $28.63
per square foot in 2011 to $30.94 per square foot in 2015; demonstrating a CAGR of 2.0 percent. Currently, the
average rent in the subject submarket is $30.88. Over the next five years, average asking rents are expected to
increase between $31.99 per square foot in 2016 and $35.05 per square foot in 2020.
The following table presents historical and projected average asking rental rates for the region and subject
submarket.

Historical and Projected Average Asking Rental Rates ($/SF)

% Effective % Effective
Year Community Neighborhood Total Change Rent Community Neighborhood Total Change Rent
2011 $27.67 $27.59 $27.64 0.2 $24.37 $32.22 $32.98 $32.61 0.9 $28.63
2012 $27.83 $27.54 $27.70 0.2 $24.45 $31.83 $32.06 $31.95 -2.0 $28.08
2013 $27.84 $27.65 $27.75 0.2 $24.56 $31.98 $32.14 $32.06 0.3 $28.21
2014 $28.32 $28.46 $28.38 2.3 $25.15 $33.88 $34.40 $34.15 6.5 $29.99
2015 $29.24 $29.43 $29.33 3.3 $26.03 $34.36 $35.86 $35.14 2.9 $30.94
1Q16 $29.39 $29.55 $29.46 0.4 $26.16 $34.49 $35.52 $35.02 -0.3 $30.88
2016 --- --- $30.28 3.2 $26.91 --- --- $36.26 3.2 $31.99
2017 --- --- $31.36 3.6 $27.96 --- --- $37.21 2.6 $32.96
2018 --- --- $32.58 3.9 $29.16 --- --- $37.82 1.6 $33.73
2019 --- --- $34.02 4.4 $30.49 --- --- $38.40 1.5 $34.47
2020 --- --- $35.58 4.6 $31.90 --- --- $38.98 1.5 $35.05
2011-2015
CAGR 1.39% 1.63% 1.49% 1.66% 1.62% 2.12% 1.89% 1.96%
Source: Reis, Inc.
Notes: CAGR stands for Compound Annual Growth Rate. Asking rents cited by Reis reflect the advertised rental rates for actively marketed space. Effective rents net of
any rental concessions, expressed over the life of the lease term. Reis quotes Retail rents on a Triple Net (NNN) basis.
As shown, community shopping centers in the region are exhibiting lower average asking rents ($29.39 per square
foot) than neighborhood centers ($29.55 per square foot). Within the subject submarket, neighborhood centers
have higher asking rents than community centers ($35.52 per square foot versus $34.49 per square foot).
Absorption
Absorption measures change in the level of occupied space in a geographic region over a specific period of time.
Absorption is not a measure of leasing activity. It reflects increasing, stable or decreasing demand for space. If the
level of occupied space increases from one period to the next, demand has increased. If no change has occurred,
demand is stable. If the level of occupied space is lower, demand has decreased. All things being equal, positive
absorption lowers vacancy rates and negative absorption increases vacancy rates. A newly constructed building
that enters the marketplace vacant will adversely affect the vacancy rate but have no bearing on absorption since
it has not altered the level of occupancy.
Over the past few years, new construction activity in the Suburban Virginia region has trailed absorption. This has
led to a declining vacancy trend. As shown below, an annual average of 153,000 square feet of space was
completed in the region between 2011 and 2015, while 225,000 square feet was absorbed. Over the next five years,
Reis projects that construction will trail absorption, with new construction totaling 1,722,000 square feet, and
absorption totaling 1,826,000 square feet.
The following table presents historical absorption levels and completions for the region and the subject submarket.

HISTORIC AND PROJECTED NET ABSORPTION (SF)

Total Total Total Total
Year Community Neighborhood Absorption Completions Community Neighborhood Absorption Completions
2011 -116,000 -98,000 -214,000 18,000 -10,000 -28,000 -38,000 0
2012 -6,000 134,000 128,000 217,000 -14,000 -3,000 -17,000 0
2013 94,000 166,000 260,000 32,000 -12,000 8,000 -4,000 0
2014 94,000 214,000 308,000 13,000 24,000 -18,000 6,000 0
2015 343,000 300,000 643,000 485,000 2,000 28,000 30,000 0
1Q16 -14,000 7,000 -7,000 0 5,000 0 5,000 0
2016 --- --- 143,000 56,000 --- --- 13,000 0
2017 --- --- 332,000 305,000 --- --- 7,000 50,000
2018 --- --- 391,000 411,000 --- --- 12,000 67,000
2019 --- --- 456,000 459,000 --- --- 28,000 75,000
2020 --- --- 504,000 491,000 --- --- 43,000 81,000
2011-2015
Total Absorption 409,000 716,000 1,125,000 765,000 -10,000 -13,000 -23,000 0
Annual Average 81,800 143,200 225,000 153,000 -2,000 -2,600 -4,600 0
Source: Reis, Inc.
Between 2011 and 2015, new construction in the Arlington/Alexandria submarket reportedly outpaced absorption,
with an annual average of 0 square feet completed and -4,600 square feet absorbed. Over the next five years, Reis’
model forecasts that new construction will surpass absorption (new construction will total 273,000 square feet, and
103,000 square feet is expected to be absorbed). This results in the escalation in vacancy previously reported.
However, as noted before, it is unclear if the forecasting models used by Reis and CoStar take into account the net
loss of inventory that has occurred over the past several years in the submarket. As will be discussed in the Retail
Submarket Analysis later in this section, it appears that the declining inventory has impacted the calculation of net
absorption, leading, in part, to the negative figures projected into the foreseeable future.
New Construction Activity
According to Reis, there was 1,165,790 square feet of space recently completed in 12 projects in the Suburban
Virginia market. The following table presents a summary of recently completed retail projects in the region.
New Construction Activity - Completed Est. Completion
Name Type Location City Submarket Year Month Size (SF)
University Mall Ph II Neighborhood 10621 Braddock Rd @ Ox Rd Fairfax Suburban Fairfax County 2015 February 7,500
Goose Creek Village Retail Expansion Neighborhood 42780-42840 Creek View Plz @ Belmont Ridge Rd Ashburn Loudoun County 2015 March 25,000
Hilltop Village Center Community 7950 Telegraph Road Alexandria Southeast Fairfax County 2015 June 265,000
Bristow Commons Mixed Use 9081 Linton Hall Rd @ Hunting Cove Ct Bristow Prince William County 2015 July 55,000
Belmont Chase Neighborhood Rusell Branch Pkwy & Clairborne Pkwy @ Ashburn Loudoun County 2015 August 90,608
Dulles Landing Ph I Power Center John Mosby Hwy @ Loudon County Pkwy Chantilly Loudoun County 2015 September 410,000
Mill Creek Retail Mixed Use 2920 District Ave @ Lee Hwy Fairfax Suburban Fairfax County 2015 September 60,000
Heritage Marketplace Neighborhood 13901 Heathcote Blvd @ Catharpin Rd Gainesville Prince William County 2015 September 59,230
One Loudoun Downtown Bldg J - Matchbox Mixed Use 44720 Thorndike St @ Bashan Dr Ashburn Loudoun County 2015 November 7,500
Lowes Of Fairfax Free Standing 4080 Jermantown Rd @ Lee Hwy Fairfax Suburban Fairfax County 2015 December 87,518
Gainesville Commerce Center Bldg A Neighborhood 5615 Wellington Rd @ University Blvd Gainesville Prince William County 2015 December 37,434
One Loudoun Downtown Bldg A Mixed Use 44693 Brimfield Drive @ Exchange St Ashburn Loudoun County 2016 January 61,000
Total Complete 1,165,790
As exhibited, there have been no new completions in the subject’s submarket over the past year. In fact, a majority
of the centers recently completed are located in the more suburban areas of the Northern Virginia, and comprise
neighborhood and community centers.
Reis reports that there are currently 392,600 square feet under construction within seven projects throughout the
market, as summarized in the following table.

New Construction Activity - Under Construction Est. Completion

Capital One Wegmans Mixed Use Route 123 @ Scotts Crossing Rd Mclean Southeast Fairfax County --- --- 80,000
Reston Station-Retail Mixed Use 1908 Reston Metro Plaza @ Wiehle Ave Reston Suburban Fairfax County --- --- 120,000
Town Center At Aquia Retail Mixed Use 475 Aquia Towne Center Dr Stafford Non-Submarketed Areas --- --- 76,000
Bristow Shopping Center Expansion Neighborhood 10438 Bristow Center Dr Gainesville Prince William County --- --- 15,600
Nokes Plaza Neighborhood Nokes Blvd @ City Center Blvd Sterling Loudoun County 2016 May 56,000
Lovettsville Square (Retail) Mixed Use 1 N Berlin Tpk @ Broad Way Lovettsville Loudoun County 2016 June 18,000
One Loudoun Downtown Bldg O Mixed Use 20426 Exchange St @ Brimfield Dr/Provincetown Dr Ashburn Loudoun County 2016 June 27,000
Total Under Construction 392,600
As with recent completions, most of the projects under construction are situated in the more suburbanized areas of
the Northern Virginia market.
Finally, Reis is tracking some 7,927,050 square feet of planned/proposed retail space in 59 projects throughout the
market. The following table presents proposed construction activity for the region.
New Construction Activity - Planned//Proposed Est. Completion
The Exchange At Potomac Yard (Retail) Mixed Use Jefferson Davis Hwy @ E Glebe Rd Alexandria Arlington/Alexandria --- --- 80,000
Richmond Highway Retail Neighborhood 2923 E Lee Ave @ Richmond Hwy Alexandria Southeast Fairfax County --- --- 6,000
Franconia Shopping Center Neighborhood 6309 Grovedale Dr @ Franconia Rd Alexandria Southeast Fairfax County --- --- 12,500
The New Landmark Community 5801 Duke St @ N Van Dorn St Alexandria Arlington/Alexandria --- --- 285,000
Mark Center Retail Community Beauregard St @ Reading Ave/Roanoke Ave Alexandria Arlington/Alexandria --- --- 150,000
Oakville Triangle (Retail) Mixed Use Jefferson Davis Hwy @ Calvert Ave Alexandria Arlington/Alexandria --- --- 125,000
Wegmans Food Store Free Standing Telegraph Rd @ Beulah Rd Alexandria Southeast Fairfax County --- --- 140,000
Ballston Quarter Redevelopment - Retail Mixed Use 4100 Wilson Blvd Arlington Arlington/Alexandria --- --- 93,000
750 N Glebe Road (Retail) Mixed Use 730-750 N Glebe Rd @ Wilson Blvd Arlington Arlington/Alexandria --- --- 68,285
Kincora Village (Retail) Mixed Use Sully Rd @ Harry Byrd Hwy Ashburn Loudoun County --- --- 475,000
Brambleton Town Center Ph Iib Neighborhood Rte 659 @ Ryan Rd Ashburn Loudoun County --- --- 30,000
Brambleton Town Center Ph III Community Rte 659 @ Ryan Rd Ashburn Loudoun County --- --- 123,000
One Loudoun (Future Retail Development) Lifestyle Center Harry Byrd Hwy @ Loudoun County Pkwy Ashburn Loudoun County --- --- 500,000
Village Center At Belmont Greene Ph II Neighborhood 42920 Piccadilly Plaza @ Hwy 7/Portsmouth Ashburn Loudoun County --- --- 20,375
Loudoun Parkway Center South - Retail Mixed Use Dulles Greenway @ Loudoun County Pkwy Ashburn Loudoun County --- --- 75,000
One Loudoun Downtown Bldg G Mixed Use Exchange St @ Sprage Dr/Endicott Dr Ashburn Loudoun County --- --- 20,800
One Loudoun Downtown Bldg H Mixed Use Exchange St @ Endicott Dr/Sprague Dr Ashburn Loudoun County --- --- 20,800
One Loudoun Downtown Bldg K Mixed Use Thorndike St @ Bashan Dr Ashburn Loudoun County --- --- 10,000
One Loudoun Downtown Bldg Q Mixed Use Thorndike St @ Bashan Dr Ashburn Loudoun County --- --- 6,500
East Gate Marketplace (Retail) Ph II Neighborhood John Mosby Hwy @ Poland Rd Chantilly Loudoun County --- --- 14,000
Shoppes At Commonwealth Neighborhood 14360 Newbrook Dr @ Rte 28 Chantilly Southeast Fairfax County --- --- 75,000
South Riding Market Square Ph III Community Rte 50 @ Loudon County Pkwy Chantilly Loudoun County --- --- 300,000
Fox Gate Town Center (Retail) Mixed Use John Mosby Hwy @ Pleasant Valley Rd Chantilly Loudoun County --- --- 300,000
Dulles Landing Ph II Power Center John Mosby Hwy @ Loudon County Pkwy Chantilly Loudoun County --- --- 190,000
Potomac Shores - Retail Mixed Use Cherry Hill Rd @ Cockpit Point Rd Dumfries Prince William County --- --- 160,000
Kellys Ridge Center Neighborhood 17014 Jefferson Davis Hwy @ Allen Dent Rd Dumfries Prince William County --- --- 16,000
First Town Center (Retail) Mixed Use Main St @ Canal Rd Dumfries Prince William County --- --- 100,000
Saks Off 5Th Free Standing 12995 Fair Lakes Shopping Ctr Fairfax Suburban Fairfax County --- --- 21,185
Mason Row (Mixed-Use Retail) Mixed Use 900 Block Of West Broad St @ N West St Falls Church Arlington/Alexandria --- --- 46,931
Heritage Hunt Retail Center Ph II Neighborhood Heathcote Blvd @ Heritage Village Plaza Gainesville Prince William County --- --- 16,000
Village Place At Gainesville (Retail) Community John Marshall Hwy @ Catharpin Rd Gainesville Prince William County --- --- 320,000
The Village At Heathcote Retail Neighborhood Rte 15 @ I-66 Haymarket Prince William County --- --- 100,000
The Winterham Property Development Mixed Use 15081 Washington St @ Fayette St Haymarket Prince William County --- --- 17,836
Arrowbrook Centre Retail A-5 Neighborhood Centreville Rd @ Dulles Toll Rd Herndon Suburban Fairfax County --- --- 30,000
Arrowbrook Centre Retail D3 Neighborhood Centreville Rd @ Dulles Toll Rd Herndon Suburban Fairfax County --- --- 13,000
Crosstrail (Retail) Mixed Use Dulles Greenway @ Tolbert Ln Leesburg Loudoun County --- --- 900,000
Lowes Homes Improvement Center- Leesburg Free Standing Battlefield Pkwy @ E Market St Leesburg Loudoun County --- --- 152,000
Crescent Place Mixed Use Harrison St @ Catoctin St Leesburg Loudoun County --- --- 35,000
Liberty Crest At Laurel Hill - Retail Neighborhood Silverbrook Rd @ Lorton Rd Lorton Suburban Fairfax County --- --- 70,000
Manassas Landing (Retail) Mixed Use Rte 234 @ Rte 28 Manassas Prince William County --- --- 250,000
Blackburn (Retail) Mixed Use Ballsford Rd @ Sudley Rd Manassas Prince William County --- --- 115,000
Ashton Ave Retail Neighborhood 8130 Ashton Ave @ Sudley Manor Dr Manassas Prince William County --- --- 15,472
The Highland District Bldg A (Retail) Mixed Use Old Meadow Rd @ Old Meadow Ln Mclean Suburban Fairfax County --- --- 80,000
Catoctin Circle Center Mixed Use W Colonial Hwy @ Rte 287 Purcellville Loudoun County --- --- 48,800
Harrison Crossing South Neighborhood Plank Rd @ Harrison Rd Fredericksburg Non-Submarketed Areas --- --- 37,000
Sumner Falls Run Neighborhood Warrenton Rd @ Village Pkwy Fredericksburg Non-Submarketed Areas --- --- 144,500
Jackson Village (Retail) Mixed Use Jefferson Davis Hwy @ Spotsylvania Pkwy Fredericksburg Non-Submarketed Areas --- --- 298,000
Cedarville Center Power Center Hwy-522 @ Hwy-340 Front Royal Non-Submarketed Areas --- --- 770,000
Reston Heights West - Retail Mixed Use Dulles Toll Rd @ Sunrise Vally Dr Reston Suburban Fairfax County --- --- 245,000
Stafford Lakes Commercial Retail Center Neighborhood 10 & 14 Stafford Lake Pkwy @ Route 17 Stafford Non-Submarketed Areas --- --- 13,000

NEW CONSTRUCTION ACTIVITY - PLANNED/PROPOSED (CONTINUED) Est. Completion

Dulles World Center Retail Ph I Mixed Use Rte 28 (Sully Rd) @ Dulles Toll Rd Sterling Loudoun County --- --- 250,000
Dulles World Center Retail Ph II Mixed Use Rte 28 (Sully Rd) @ Dulles Toll Rd Sterling Loudoun County --- --- 100,000
Promenade At Tysons West (Retail) Mixed Use Leesburg Pike @ Westwood Center Dr Tysons Corner Suburban Fairfax County --- --- 120,000
Fauquier Crossing Neighborhood Broad Run Church Rd @ Rte 29 Warrenton Non-Submarketed Areas --- --- 70,000
At Home Free Standing 2851 Dale Blvd Woodbridge Prince William County --- --- 91,162
Cabela'S Free Standing Linton Hall Rd @ Lee Hwy Gainesville Prince William County 2017 March 79,999
Rtc West (Retail) Mixed Use Sunset Hills Rd @ Town Center Pkwy Reston Suburban Fairfax County 2017 March 25,000
The Shoppes At Bailey'S Crossroads Neighborhood 5885 Leesburg Pike @ Charles St & Washington Dr Falls Church Southeast Fairfax County 2017 August 25,905
Vineyard Square Mixed Use 130-138 N 21St St @ O St Purcellville Loudoun County 2019 May 30,000
Total Planned/Proposed 7,927,050
In the subject’s submarket, the redevelopment of Landmark Mall is among the larger retail projects reported, with
some 285,000 square feet of retail expected. This is actually a downsizing of the former mall, which included over
1.0 million square feet of GLA and roughly 500,000 square feet of shop space (excluding anchors such as Macy’s
and Sears). The New Landmark is located approximately 7.7 road miles to the south of Ballston Common.
The subject property also is listed, while many other of the centers are largely neighborhood and community
oriented, or reflect smaller retail components within mixed-use developments.
Suburban Virginia Retail Market Conclusion

In summary, the Suburban Virginia Retail market has experienced decreased vacancy levels since 2011. Over the
near-term, new construction activity is expected to trail absorption. In turn, over the next five years, vacancy should
decline from 4.9 to 4.7 percent, while average asking rental rates are expected to increase from $26.91 per square
foot to $31.90 per square foot.
Completions, Absorptions, and, Vacancies

700,000 8%
600,000 7%
500,000
6%
400,000
300,000 5%
200,000 4%
100,000 3%
0
2%
-100,000
-200,000 1%
-300,000 0%
Total Completions Total Absorption
Source: Reis, Inc.
Relatively similar trends have been seen in the subject’s submarket area, with vacancy declining and rental rates
rising. However, looking forward, slightly varied trends are forecast for the subject’s submarket area, with vacancy
potentially increasing moderately over the next five years. This forecast is believed to be somewhat impacted by
the removal of inventory from the Reis database, which impacts the calculation of net absorption, and may be
influencing the slower lease-up of space projected in their model. As inventory has been reduced, vacancy rates
have declined, with no new completions in the past five years. With newer quality space planned for the submarket,
the potential for leasing activity and positive net absorption should become evident over the next several years.

On balance, the long-term fundamentals for retail—ongoing population growth and residential development—are
expected to remain stable throughout the Washington D.C. market. As the local economy continues to grow, the
climate for retailing, generally strong in any case, should only grow along with it.
Over the long-term, the forecast for the metro Washington D.C. retail market is one of generally positive growth, as
transportation corridors and new housing developments continue to be built throughout the area, along with infill
development in densely populated areas. And as the housing market grows, so too will retail follow.
Submarket Analysis
Overview
For additional perspective on the national and metro area retail market analyses, the following subsection further
discusses trends in the subject’s retail submarket. The data for this portion of the discussion has been obtained
from CoStar Property, which differs from some of the previous data shown regarding the metro area market due to
differences in the size/inventory of the survey, etc. Unlike Reis, CoStar’s data includes regional malls and major
power centers that are typically excluded from the Reis data.
Market Definition
The following table presents an overview of the entire Washington D.C. Retail market, as surveyed by CoStar as
of mid-year 2016.
Total Retail Market Statistics -- Mid-Year 2016

(existing inventory)
Washington D.C. Metro Area
Direct Total Total Quoted

# Total Vacant Vacant Vacant YTD Net YTD Under Rental
Submarket Bldgs GLA GLA GLA % Absorption Deliveries Construction Rates
Alexandria/I-395 Area 1,005 13,753,386 382,998 411,074 2.99% 68,010 16,742 0 $ 31.58
Bethesda/Chevy Chase 325 4,077,316 129,504 131,579 3.23% 6,106 2,800 58,800 $ 41.31
Capitol Hill Area 702 3,381,677 214,960 214,960 6.36% (17,246) 0 58,100 $ 39.57
Downtown DC 336 2,751,639 98,095 107,095 3.89% 1,804 0 82,423 $ 58.66
Dulles Corridor 782 18,460,310 536,139 536,139 2.90% 58,382 36,755 199,101 $ 33.59
E Prince Georges County 313 7,254,799 369,230 369,230 5.09% 22,880 0 128,114 $ 18.98
East Falls Church 144 1,092,454 22,252 22,252 2.04% (553) 0 0 $ 37.63
Frederick 1,078 12,679,701 982,004 983,057 7.75% (6,090) 20,751 220,529 $ 18.89
Georgetown/Uptown 2,316 11,453,301 514,556 562,928 4.91% (61,409) 0 0 $ 48.56
Greater Fairfax County 1,196 24,819,357 480,037 523,955 2.11% (69,011) 2,200 13,391 $ 30.36
I-270 Corridor 986 23,514,657 827,918 843,037 3.59% (34,426) 3,328 601,500 $ 28.59
Leesburg/Route 7 Corridor 579 8,624,525 336,599 337,641 3.91% 153,678 122,482 340,500 $ 28.92
Manassas/Route 29/I-66 724 12,080,792 665,794 667,394 5.52% 74,983 33,450 87,678 $ 21.95
N Prince Georges County 1,621 19,471,149 1,127,250 1,134,783 5.83% 77,902 98,428 183,000 $ 21.73
Northeast/Southeast 835 5,473,234 323,106 325,050 5.94% 34,284 0 236,397 $ 21.39
R-B Corridor 201 2,200,909 124,422 124,422 5.65% (53,472) 0 0 $ 60.46
S Prince Georges County 896 12,507,521 648,818 648,818 5.19% 2,262 120,000 139,289 $ 16.33
SE Fairfax County 620 12,618,679 235,646 238,321 1.89% 48,310 0 12,000 $ 29.59
SE Montgomery County 835 11,454,903 389,426 447,061 3.90% 19,604 0 4,000 $ 27.16
Winchester City 401 5,157,172 150,516 150,516 2.92% 3,781 0 11,090 $ 12.75
Woodbridge/I-95 Corridor 625 12,317,309 549,916 549,916 4.46% 128,239 0 6,900 $ 19.42
Totals 16,520 225,144,790 9,109,186 9,329,228 4.14% 458,018 456,936 2,382,812 $ 16.33
Source: CoStar Property
According to CoStar’s mapping of the market, the subject resides in the Rosslyn-Ballston Corridor submarket. As
is initially evident from the data, CoStar reports a slightly higher vacancy rate for the submarket (as compared to

the region), which is likely due, at least in part, to the subject’s current status. It is also evident that some of the
highest rents in the region are found in the subject’s general submarket area.
Arlington/Alexandria Submarket
The following chart presents trends in the Arlington/Alexandria submarket over the past several years, as tracked
by CoStar Property.
Retail Market Trends

Arlington-Alexandria Market
Total Sq/Ft Under Quoted

Inventory Vacancy Leased Absorption Deliveries Construction Rents
Per Net Absorp
Total Total Absorp- Per
Inventory Change Change Vacant Vacant Total GLA tion GLA # # NNN/
(Sq/Ft) (Sq/Ft) (%) (Sq/Ft) (%) (Sq/Ft) (%) (Sq/Ft) (%) Sq/Ft Bldgs Sq/Ft Bldgs Sq/Ft
2007 14,365,021 -- -- 590,174 4.11% 245,373 1.71% 13,848 0.10% 29,537 4 328,777 13 $24.51
2008 14,664,495 299,474 2.08% 537,012 3.66% 101,401 0.69% 352,636 2.40% 331,339 14 13,197 1 $29.53
2009 14,639,250 (25,245) -0.17% 542,054 3.70% 271,842 1.86% (30,287) -0.21% 14,445 2 0 0 $30.68
2010 14,620,446 (18,804) -0.13% 516,115 3.53% 162,269 1.11% 7,135 0.05% 46,100 1 0 0 $27.37
2011 14,591,193 (29,253) -0.20% 633,908 4.34% 285,745 1.96% (147,046) -1.01% 10,425 2 24,346 4 $30.43
2012 14,472,836 (118,357) -0.81% 571,102 3.95% 268,434 1.85% (55,551) -0.38% 13,346 3 18,826 4 $32.36
2013 14,389,086 (83,750) -0.58% 538,235 3.74% 257,939 1.79% (50,883) -0.35% 18,826 4 25,825 3 $33.94
2014 14,383,832 (5,254) -0.04% 506,435 3.52% 164,180 1.14% 26,546 0.18% 87,148 4 0 0 $31.79
2015 14,355,003 (28,829) -0.20% 480,609 3.35% 238,473 1.66% (3,003) -0.02% 14,350 2 10,500 1 $30.24
Current Qtr 14,314,531 (40,472) -0.28% 442,567 3.09% 111,824 0.78% (2,430) -0.02% 10,500 1 16,356 1 $31.75
Average 2007-2015 (1,252) -0.01% 546,183 3.77% 221,740 1.53% 12,599 0.08% 62,835 4 46,830 3 $30.09
Average 2010-2015 (47,375) -0.33% 541,067 3.74% 229,507 1.59% (37,134) -0.26% 31,699 3 13,250 2 $31.02
Average 2012-2015 (59,048) -0.41% 524,095 3.64% 232,257 1.61% (20,723) -0.14% 33,418 3 13,788 2 $32.08
Submarket Snapshot
The following chart presents trends in the subject’s defined submarket area (Rosslyn-Ballston submarket) over the
past several years, as tracked by CoStar Property.
Retail Market Trends

Total Retail Market (All Retail Classifications)
Rosslyn-Ballston Retail Corridor
Total Sq/Ft Under Quoted

Inventory Vacancy Leased Absorption Deliveries Construction Rents
Per Net Absorp

Total Total Absorp- Per
Inventory Change Change Vacant Vacant Total GLA tion GLA # # NNN/
(Sq/Ft) (Sq/Ft) (%) (Sq/Ft) (%) (Sq/Ft) (%) (Sq/Ft) (%) Sq/Ft Bldgs Sq/Ft Bldgs Sq/Ft
2007 2,499,917 -- -- 91,649 3.67% 79,748 3.19% 24,164 0.97% 4,290 1 0 0 $14.99
2008 2,478,826 (21,091) -0.84% 75,286 3.04% 8,966 0.36% (4,728) -0.19% 0 0 0 0 $29.68
2009 2,446,068 (32,758) -1.32% 67,073 2.74% 81,428 3.33% (24,545) -1.00% 0 0 0 0 $23.39
2010 2,395,004 (51,064) -2.09% 88,724 3.70% 20,289 0.85% (72,715) -3.04% 0 0 0 0 $20.17
2011 2,401,209 6,205 0.26% 188,157 7.84% 86,690 3.61% (93,228) -3.88% 8,000 1 0 0 $31.68
2012 2,314,047 (87,162) -3.63% 109,184 4.72% 92,812 4.01% (8,189) -0.35% 0 0 5,880 2 $32.90
2013 2,310,087 (3,960) -0.17% 99,162 4.29% 17,654 0.76% 6,062 0.26% 5,880 2 0 0 $43.40
2014 2,230,145 (79,942) -3.46% 84,131 3.77% 16,606 0.74% (64,911) -2.91% 0 0 0 0 $33.88
2015 2,244,495 14,350 0.64% 117,229 5.22% 55,534 2.47% (18,748) -0.84% 14,350 2 0 0 $23.37
Current Qtr 2,193,523 (50,972) -2.27% 116,522 5.31% 13,748 0.63% (50,265) -2.29% 0 0 0 0 $65.70
Average 2007-2015 (31,928) -1.33% 102,288 4.33% 51,081 2.15% (28,538) -1.22% 3,613 1 653 0 $28.16
Average 2010-2015 (33,596) -1.41% 114,431 4.92% 48,264 2.08% (41,955) -1.79% 4,705 1 980 0 $30.90
Average 2012-2015 (39,179) -1.65% 102,427 4.50% 45,652 2.00% (21,447) -0.96% 5,058 1 1,470 1 $33.39
As shown, a reduction in the size of R-B’s inventory has generally been in evidence over the past several years. In
turn, it is believed that this reduction has contributed, at least in part, to the negative net absorption calculated for

the subject’s submarket. As well, vacancy levels have fluctuated over this time period, but are generally lower than
the peak vacancy in 2011. Rental rates have been inconsistent year-over-year in the CoStar survey.
Supply Analysis
The following illustration presents construction completion trends in the subject’s defined submarket area.
Rosslyn-Ballston Retail Corridor Submarket Construction Completions (Sq/Ft)
R-B Arlington Washington 16,000.00
Submarket County D.C. Metro
14,000.00
Period Completions (SF) Completions (SF) Completions (SF)
2007 4,290 12,154 6,418,703 12,000.00 2010 2011 2012 2013 2014 2015
2008 0 0 5,888,145 Vacancy Rate
10,000.00 0.00% ###### 0.00% ###### 0.00% ######
2009 0 1,248 2,889,686
2010 0 46,100 2,270,088 8,000.00
2011 8,000 8,000 1,826,550 6,000.00
2012 0 0 1,671,061
2013 5,880 16,880 2,575,665 4,000.00
2014 0 0 2,285,766 2,000.00
2015 14,350 14,350 1,669,571
0.00
Average 2007-15 3,613 10,970 3,055,026
2010 2011 2012 2013 2014 2015
Average 2011-15 5,646 7,846 2,005,723
Source: CoStar Property Source: CoStar Property
As exhibited, the submarket area presents a trend of generally increasing new construction activity, though this
trend is based upon a small amount of development activity in terms of square footage added to the submarket.
Vacancy Trends
The following chart and graphic present vacancy trends in the subject’s defined submarket area.
Vacancy Trends
Rosslyn-Ballston Retail Corridor Submarket Retail Vacancy Rate Trends (%)
R-B Arlington Washington 9.00%
Submarket County D.C. Metro 8.00%
Period Vacancy (%) Vacancy (%) Vacancy (%)
7.00%
2007 3.67% 2.77% 3.72% 2010 2011 2012 2013 2014 2015
2008 3.04% 3.04% 4.62% 6.00%
Vacancy Rate 3.70% 7.84% 4.72% 4.29% 3.77% 5.22%
2009 2.74% 3.16% 5.60% 5.00%
2010 3.70% 3.16% 5.21% 4.00%
2011 7.84% 4.83% 5.13%
2012 4.72% 3.91% 5.09% 3.00%
2013 4.29% 2.91% 4.95% 2.00%
2014 3.77% 2.92% 4.60%
1.00%
2015 5.22% 2.97% 4.49%
0.00%
Average 2007-15 4.33% 3.30% 4.82%
2010 2011 2012 2013 2014 2015
Average 2011-15 5.17% 3.51% 4.85%
Despite the new construction activity and changes in inventory within the submarket, the general trajectory for
vacancy has been moderately declining. This trend is expected to continue so long as true net absorption is positive
and outpaces new construction.

Demand Analysis
New Construction
The following exhibit summarizes recent and planned construction activity in the subject’s defined submarket area,
along with a graph/depiction of the trend.
New Construction Activity

Rosslyn-Ballston Retail Corridor Submarket New Construction Forecast (Sq/Ft)
R-B Arlington Washington 7,000
Submarket County D.C. Metro 6,000
Period Construction (SF) Construction (SF) Construction (SF)
2009 0 1,248 2,889,686 5,000 2012 2013 2014 2015 2016 2017
2010 0 46,100 2,270,088 Construction 0 5,880 0 0 0 0
4,000
2011 8,000 8,000 1,826,550
2012 0 0 1,671,061 3,000
2013 5,880 16,880 2,575,665
2014 0 0 2,285,766 2,000
2015 0 0 2,305,032
2016 0 0 703,433 1,000
2017 0 0 0
0
Average 2009-15 1,542 8,025 1,836,365 2012 2013 2014 2015 2016 2017
Average 2015-17 0 0 1,002,822
Based on information in the CoStar Property survey, the subject’s submarket area should experience very little-to-
below-average new retail construction over the next two years. This will continue to drive down vacancy levels and
place pressure on rental rates. Nevertheless, over time, additional retail construction is anticipated in the submarket
area. The subject’s redevelopment will occur in 2018, the year following the graph.
Rental Rates
The following chart and graph show average rental rate trends in the subject’s submarket area.
Rental Rate Trends

Rosslyn-Ballston Retail Corridor Submarket Retail Rental Rate Trends ($/SF)
R-B Arlington Washington $50.00
Submarket County D.C. Metro $45.00
Period Avg Rent ($/SF) Avg Rent ($/SF) Avg Rent ($/SF) $40.00
2007 $14.99 $18.41 $25.78 $35.00 2010 2011 2012 2013 2014 2015
2008 $29.68 $28.33 $23.81 Vacancy Rate ###### ###### ###### ###### ###### ######
$30.00
2009 $23.39 $29.87 $22.96
2010 $20.17 $24.96 $22.38 $25.00
2011 $31.68 $29.29 $22.55 $20.00
2012 $32.90 $28.93 $21.82 $15.00
2013 $43.40 $28.72 $22.40 $10.00
2014 $33.88 $30.47 $24.04
$5.00
2015 $23.37 $28.45 $24.36
$0.00
Average 2007-15 $28.16 $27.49 $23.34
2010 2011 2012 2013 2014 2015
Average 2011-15 $33.05 $29.17 $23.03
Rental rates can be impacted by any number of factors, not the least of which are supply and demand within the
market, as well as the quality of space available, and so forth. As illustrated, the rental rate trend has been on a
generally increasing trajectory that has been moderating, and is anticipated to continue to improve over the next
several years.

Absorption
The final consideration of this submarket analysis involves net absorption trends in the subject’s defined submarket
area. The following table and chart present this information.
Absorption Trends
Rosslyn-Ballston Retail Corridor Submarket Net Absorption Trends (Sq/Ft)
R-B Arlington Washington 20,000.00
Submarket County D.C. Metro
Period Absorption (SF) Absorption (SF) Absorption (SF) 0.00
2007 24,164 24,767 4,645,920 2010
2010 2011 2012
2011 2012 2013 20132014 2014
2015 2015
2008 (4,728) (49,185) 2,934,549 ‐20,000.00
Vacancy Rate ###### ###### ###### ###### ###### ######
2009 (24,545) (38,672) (315,961)
2010 (72,715) (9,627) 2,379,499 ‐40,000.00
2011 (93,228) (138,318) 1,098,376
2012 (8,189) (47,564) 1,144,656
‐60,000.00
2013 6,062 47,179 1,277,971
2014 (64,911) (86,210) 2,270,924
‐80,000.00
2015 (18,748) (23,157) 612,618
Average 2007-15 (28,538) (35,643) 1,783,172
‐100,000.00
Average 2011-15 (35,803) (49,614) 1,280,909
From the chart, it is clear that the general trend has been for negative, but improving net absorption trends in the
subject’s submarket over the past several years. As noted previously, with a declining inventory surveyed each
year, it follows that the occupied area used to measure net absorption would also be declining. In turn, this simple
calculation of absorption has been negative in the subject’s submarket due to factors cited.
With continued growth in the local economy and positive demographic changes, this trend is expected to show
positive net absorption into the foreseeable future, though fluctuating from year-to-year.
Demand Forecast
GLA Per Capita

To test the reasonableness of supply and demand forecasts in the subject’s market area—and to calculate an
estimate of demand for space in relation to the current inventory and vacancy—we have constructed a comparison
of average shopping center GLA per capita for the subject’s market area in comparison to the Washington D.C.
CBSA and State of Virginia. For this comparison, we have run CoStar retail inventory for the following defined
areas.
GLA Per Capita Comparison
Size 2.0-Mile 3.0-Mile 4.0-Mile Arlington Arlington- Washington DC State of

Category Radius Radius Radius County Alexandria CBSA Virginia
Total Retail Market Statistics 3,994,751 ± 10,397,071 ± 16,007,484 ± 6,354,301 ± 14,314,531 ± 265,921,111 ± 444,419,073 ±
Source: CoStar Property Market Reports
According to our survey and analysis of shopping center inventories available in the CoStar Property database, we
have determined that the average shopping center GLA per capita for the subject region (Washington D.C.) and
State of Virginia are about 43.72± and 53.04± square feet, respectively.
By comparison, the 3.0-mile radius around the subject contains approximately 39.81± square feet per capita, while
the 2.0-mile radius is 28.89± square feet. This initial comparison might suggest that the subject’s immediate market
area is under-retailed in comparison to the state and region. However, given the urban/high-density nature of its

immediate environs, it is not surprising or uncommon to see that its overall GLA per capita should fall below the
larger metro area, as a whole.
The following chart presents a summary of GLA per capita calculations based on the data:
GLA Per Capita Comparison
Size 2.0-Mile 3.0-Mile 4.0-Mile Arlington Arlington- Washington DC State of

Category Radius Radius Radius County Alexandria CBSA Virginia
Total 28.89 ± 39.81 ± 37.77 ± 27.65 ± 37.31 ± 43.72 ± 53.04 ±
- Number of Households 63,185 115,538 ± 190,831 ± 109,200 184,236 2,260,901 3,196,247

- Average Household Income $ 139,605 $ 137,492 ± $ 140,948 ± $ 142,282 $ 135,195 $ 125,333 $ 93,883
- Retail Sales Per Household $ 54,999 $ 54,663 ± $ 55,033 ± $ 55,928 $ 53,976 $ 55,273 $ 48,288
- GAFO Sales Per Household $ 13,451 $ 13,350 ± $ 13,579 ± $ 13,610 $ 13,146 $ 13,590 $ 11,633
Retail Vacancy Rate 4.40% 3.36% 4.89% 3.67% 4.53% 4.35% 6.79%
Source: CoStar Property Market Reports; demographic data from Claritas, Inc.
As shown, the 2.0-mile radius has a total per capita GLA figure estimated to be around 28.89± square feet, while
the 3.0-mile radius is 39.81± square feet. The 3.0-mile radius encompasses what we will later define as the subject’s
primary trade area. Within this radius, the average household income is shown to be above the regional and
statewide averages, while the retail sales potential and GAFO sales potential per household are fairly consistent
with the Washington D.C. benchmarks. With a slightly below average representation of retail GLA per capita, it
would be expected that the subject’s primary trade area could support a higher level of GLA when compared to the
regional and statewide norms. In comparison to the Arlington/Alexandria submarket, the subject’s trade area
appears to be fairly similar. With retail vacancy in the area hovering between 4.0 percent and 5.0 percent, the
overall view of the market is that it is at or near equilibrium and fairly well-balanced at this writing.
Future Demand
With consideration to the general supply and demand factors inherent in the data, we can utilize the GLA per capita
figures to develop a forecast for potential demand going forward. Keeping the per capita figures fixed, we have
constructed the following potential demand projection for retail space in the Arlington-Alexandria submarket over
the next five years:
Arlington-Alexandria GLA Per Capita Demand Calculation

(assuming current GLA per capita benchmarks for defined area to calculate growth)
Size Net
Category 2015 2020 Increase
Population: 383,636 399,622 15,986
Total GLA Per Capita: 37.31 37.31

- Square Feet: 14,314,531 14,911,013 596,482
With net population forecasted to increase by 15,986± residents over the next five years, we see that the subject
submarket area could (theoretically) expect to support an additional 596,482± square feet of total retail GLA.
By this measure, this level of per capita demand would equate to approximately 119,296± square feet of absorption
per year (29,824± square feet per quarter). This forecast is clearly higher than the recent historic net absorption
figures previously discussed. Generally, a more moderate-to-optimistic forecast for absorption based upon this
simple population growth calculation would appear reasonable in light of improving market conditions.

In similar fashion, we have projected a demand forecast for the subject’s primary trade area (3.0-mile radius). This
comparison projection is shown in the following illustration.
3.0-Mile Radius GLA Per Capita Demand Calculation

(assuming Arlington-Alexandria GLA per capita benchmarks to calculate growth)
Size Net
Category 2015 2020 Increase
Population: 261,137 270,018 8,881
Total GLA Per Capita: 37.31 37.31

- Square Feet: 9,743,751 10,075,126 331,375
As shown, the total demand projection for the 3.0-mile radius is forecast to be 331,375± square feet over the next
five years. On average, the calculation suggests support for 66,275± square feet of net absorption per year through
2020, or 16,569± square feet per quarter.
Within this 3.0-mile radius, there are only four projects of note for the next five years, including the subject’s 310,000
square foot renovation (as classified and measured by CoStar). The other projects of note include a 15,305 square
foot CVS at 5885 Leesburg Pike (currently under construction); 10,600 square feet of strip retail space planned at
5885 Leesburg Pike (completion slated for November 2017); and 82,000 square feet of retail space planned at
Village Center (940 S. George Mason Drive planned to break ground in August 2016 and be completed by May
2018). These projects total some 417,905 square feet of space for the subject’s 3.0-mile radius anticipated to be
built over the next five years.
Overall, total retail GLA for Arlington/Alexandria and the subject’s 3.0-mile radius is generally considered to be
reasonable in light of the benchmarks set by the data, particularly in light of the stable-to- average population growth
occurring within the region and low overall vacancy rate for the market area. These figures are based solely on
current resident population data and do not include the influx of office workers into the Rosslyn-Ballston Corridor
each day. Coupled with the continued population growth occurring in the region, these per capita figures would
appear more reasonable in light of this growth, and lower development profile for the region in the near-term.
Vacancy/Demand Forecast Conclusion

With current retail vacancies within the Arlington/Alexandria submarket totaling some 442,567± square feet
(according to CoStar Property), the demand projection for some 596,482± square feet of additional space would
appear to exhibit that there would ultimately be a shortage of shopping center space in the region over the next five
years if not for new construction, as a 4.0 to 6.0 percent vacancy rate is typically considered desirable for an efficient
market.
Based upon our review, however, planned/proposed centers in the defined market area account for nearly
1,298,479± square feet of potential additional space (according to CoStar and C&W research, including centers
currently under construction, and centers planned for construction). If all these centers were to be built within the
next five years, which is highly unlikely and speculative at this time, vacancy levels throughout the region would
likely trend slightly higher, to an estimated level of about 7.33 percent (see following calculation). If, however, only
75.0 percent of this space were to be built and completed, which might be more realistic, if not still optimistic,
vacancy levels throughout the defined market area would likely increase marginally to a level of about 5.36 percent.
The following chart presents a summary of these projections/calculations. [Note: Some of the planned projects in
the development pipeline have timelines that are expected to extend beyond this 5-year projection.]

Retail Vacancy Trend & Demand Projection

Arlington-Alexandria Market
(using GLA per capita benchmarks for local area as demand factor)
Total Occupied Vacant Vacancy

Inventory Stock Stock Rate
Projection #1
Current 14,314,531 ± SF (1) 13,871,964 ± SF (1) 442,567 ± SF (1) 3.09%
Planned 1,298,479 ± SF (2) 596,482 ± SF (3) -- ± SF
Total 15,613,010 ± SF 14,468,446 ± SF 1,144,564 ± SF 7.33%
Projection #2
Current 14,314,531 ± SF (1) 13,871,964 ± SF (1) 442,567 ± SF (1) 3.09%
Planned 973,859 ± SF (2) 596,482 ± SF (3) -- ± SF
Total 15,288,390 ± SF 14,468,446 ± SF 819,944 ± SF 5.36%
Projection #3
Current 14,314,531 ± SF (1) 13,871,964 ± SF (1) 442,567 ± SF (1) 3.09%
Planned 649,240 ± SF (2) 596,482 ± SF (3) -- ± SF
Total 14,963,771 ± SF 14,468,446 ± SF 495,324 ± SF 3.31%
(1) Current inventory and current occupancy per CoStar Property.

(2) Planned project GLA per CoStar/REIS + C&W Research + Addition of proposed centers to CoStar/REIS list, if any.
(3) Projected occupancy figures per 5-year demand projection based on GLA per capita analysis (using local per capita benchmarks).
Assum ptions
Projection #1 % of Planned Construction Completed: 100.0%
As shown on the chart, the final calculation (Projection #3) calculates that, if only 50.0 percent of planned retail
development occurs over the next five years, vacancy rates might remain mostly level throughout the market,
increasing vacancy to a level of approximately 3.31 percent from the current 3.09 percent level for
Arlington/Alexandria.
Using the same formula for calculations in the subject’s 3.0-mile radius, the following chart indicates that, if all of
the proposed projects are built over the next five years, vacancy would possibly increase to approximately 3.22
percent from the 2.54 percent vacancy calculated by CoStar today. Again, based upon current market conditions,
it does not appear likely that all of the projects will be built in the next five years.

Retail Vacancy Trend & Demand Projection

3.0-Mile Radius
(using GLA per capita benchmarks for local area as demand factor)
Total Occupied Vacant Vacancy

Inventory Stock Stock Rate
Projection #1
Current 10,643,671 ± SF (1) 10,373,680 ± SF (1) 269,991 ± SF (1) 2.54%
Planned 417,905 ± SF (2) 331,375 ± SF (3) -- ± SF
Total 11,061,576 ± SF 10,705,055 ± SF 356,521 ± SF 3.22%
Projection #2
Current 10,643,671 ± SF (1) 10,373,680 ± SF (1) 269,991 ± SF (1) 2.54%
Planned 313,429 ± SF (2) 331,375 ± SF (3) -- ± SF
Total 10,957,100 ± SF 10,705,055 ± SF 252,045 ± SF 2.30%
Projection #3
Current 10,643,671 ± SF (1) 10,373,680 ± SF (1) 269,991 ± SF (1) 2.54%
Planned 208,953 ± SF (2) 331,375 ± SF (3) -- ± SF
Total 10,852,624 ± SF 10,705,055 ± SF 147,569 ± SF 1.36%
(1) Current inventory and current occupancy per CoStar Property.

(2) Planned project GLA per CoStar/REIS + C&W Research + Addition of proposed centers to CoStar/REIS list, if any.
(3) Projected occupancy figures per 5-year demand projection based on GLA per capita analysis (using local per capita benchmarks).
Assum ptions
Assuming only 75.0 percent of the projects are built, the calculation suggests that the area’s retail vacancy rate
could drop from 2.54 percent (current) to 2.30 percent over the next five years.
On balance, the industry benchmarks tend to suggest support for additional retail GLA in the region (and subject’s
submarket area in particular). As noted, due to continued population growth and residential development, the
Arlington/Alexandria area should be able to support these assumptions.
Submarket Summary/Conclusion
From the data, it is apparent that the subject’s defined submarket area has performed slightly below that of the
region, in general, with slightly higher vacancy rates but slightly higher rents in comparison. Still, the trends in the
subject’s retail submarket have generally tracked in similar fashion as the CBSA.
In comparison to the region and submarket, overall, it is apparent that occupancy trends at several competing
regional/lifestyle centers have generally out-performed the market in recent years, with tenants showing fairly strong
demand for the type of space and amenities offered at projects similar to the subject redevelopment. This is due,
in part, to the properties’ superior quality and conditions, but also the configuration of space and amenities offered.

With the subject’s newly renovated condition (upon completion) and initial leasing, it is anticipated that the subject
will continue to see stable demand into the foreseeable future.
In consideration of the on-going residential development in trade area, in general, the subject appears relatively
well-positioned to capture its fair share of this future growth potential.
Trade Area Overview

Scope of Trade Area
After reviewing national and local retail market trends, we can determine the scope of the subject’s trade area by
looking at the location of competing centers, area development patterns, and transportation nodes.
Traditionally, a retail center's sales are principally generated from within its primary trade area, which is typically
within reasonably close geographic proximity to the center itself. Generally, between 55.0 and 65.0 percent of a
regional center's sales are generated within its primary trade area. The secondary trade area generally refers to
more outlying areas that provide less frequent customers to the center. Residents within the secondary trade area
would be more likely to shop closer to home due to time and travel constraints. Typically, an additional 20.0 to 25.0
percent of a center's sales will be generated from within the secondary area. For centers that have above-average
regional accessibility, this percentage can sometimes be greater.
The tertiary or peripheral trade area refers to more distant areas from which occasional customers to the mall
reside. These residents may be drawn to the center by a particular service or store that is not found locally. Industry
experience shows that between 10.0 and 15.0 percent of a center's sales are derived from customers residing
outside of the trade area. This potential is commonly referred to as inflow. In areas that are benefited by an excellent
interstate highway system or are noted as prime tourist destination centers, the percentage of sales generated by
inflow patrons can often run upwards of 25.0 percent or higher.
Competitive Retail Structure

To define the subject’s potential trade area, we must thoroughly review the retail market and the competitive
structure of the general marketplace, as well as the subject's position within that marketplace. The subject property’s
position within the area’s retail structure will be further examined by profiling the stores that anchor the subject.
Competition comes from a variety of sources, including existing regional malls, freestanding department stores,
category killers, off-price retailers, and large strip centers in the area. Upon completion, Ballston Quarter will be a
fairly traditionally merchandised enclosed urban shopping center with a wide mix of tenants.
The following chart provides a summary of the subject’s primary and secondary competitors, which are viewed as
having an impact on the subject’s potential trade area. The map following the competition summary displays the
subject’s location in relation to its primary and secondary competitors.

COMPETITIVE SHOPPING CENTERS

Traffic Mass Total Shop Distance
No. Property Description Anchor Tenants Rent/SF Sales/SF Count Transit Vacancy Vacancy to Subject
S Ballston Quarter Centre Type: Super-Regional Center/Mall Total GLA: 507,745 Macy's $30.00 - $50.00 - Glebe Ballston-MU -- -- --
4238 Wilson Boulevard Year Built: 1986 Anchor GLA: 259,613 Regal Cinemas per budget 19,874 0.2 miles
Arlington, VA Renovation: 2016/2017 Anchor Ratio: 51% Sport & Health Randolph 11,520
CVS 9,008
PRIMARY COMPETITION
1 The Market Commons Clarendo Sub-Type: Lifestyle Center Total GLA: 299,978 Whole Foods - - Clarendon Clarendon 2.3% 5.0% 1.6 miles
2690-2801 Clarendon Blvd. Year Built: 1995 Anchor GLA: 162,018 Barnes & Noble 19,260 0.2 miles road miles
Arlington, VA Ren/Exp: 01/04 Anchor Ratio: 54% Crate & Barrel Fillmore 4,882 E / NE
Container Store 5,583
Health Club
2 Fashion Centre at Pentagon CitySub-Type: Super-Regional Center/Mall Total GLA: 985,407 Macy's $60.00 - $75.00 $731.00 - $901.00 Hayes Pentagon City 1.0% 2.0% 4.3 miles
1100 S. Hayes St. Year Built: 1989 Anchor GLA: 472,729 Nordstrom 18,408 0.1 miles road miles
Arlington, VA Ren/Exp: 02/16 Anchor Ratio: 48% Army Navy 14,427 SE
7,473
3 Tysons Corner Center Sub-Type: Super-Regional Center/Mall Total GLA: 1,967,000 Macy's $55.00 - $75.00 $830.00 - $860.00 I-495 Tysons Corner 0.6% 1.1% 7.4 miles
1961 Chain Bridge Rd. Year Built: 1968 Anchor GLA: 885,000 Nordstrom 194,624 0.2 miles road miles
McLean, VA Ren/Exp: 05/14 Anchor Ratio: 45% Lord & Taylor Chain Bridge 3,141 W / NW
Bloomingdale's 40,813
Cinemas
4 Tysons Galleria Sub-Type: Super-Regional Center/Mall Total GLA: 820,000 Macy's $60.00 - $85.00 $973.00 - $973.00 I-495 Tysons Corner 1.6% 4.3% 9.4 miles
1651-2255 International Dr. Year Built: 1987 Anchor GLA: 511,933 Neiman Marcus 194,624 0.2 miles road miles
McLean, VA Ren/Exp: 97 Anchor Ratio: 62% Saks Fifth Avenue Chain Bridge 3,141 W / NW
40,813
5 Mosaic District Sub-Type: Lifestyle Center Total GLA: 575,617 Target - - Lee Hwy. Dunn-Loring 11.0% 18.8% 8.1 miles
2905 District Ave. Year Built: 2012 Anchor GLA: 238,944 Last Call Neiman 15,509 0.9 miles road miles
Falls Church, VA Ren/Exp: N/a Anchor Ratio: 42% Organic Market Gallows Rd. 4,386 W
Cinemas 39,278
SECONDARY COMPETITION
6 D.C. USA Sub-Type: Power Center Total GLA: 540,000 Target $35.00 - $40.00 - 14th St. Columbia Hts 3.3% 9.8% 8.5 miles
3100 14th St. NW Year Built: 2008 Anchor GLA: 358,677 Bed Bath & Beyond 23,976 0.2 miles road miles
Washington D.C. Ren/Exp: N/a Anchor Ratio: 66% Health Club Irving St. 12,415 NE
Other/Big Box 13,119
7 Wisconsin Place Sub-Type: Lifestyle Center Total GLA: 300,000 Bloomingdale's $40.00 - $60.00 $425.00 - $475.00 Wisconsin Friendship Hts 2.4% 10.1% 8.5 miles
5404 Wisconsin Ave. Year Built: 2009 Anchor GLA: 228,746 Whole Foods 22,086 0.2 miles road miles
Chevy Chase, MD Ren/Exp: N/a Anchor Ratio: 76% Western 9,466 N
20,711
8 Mazza Gallerie Sub-Type: Regional Center Total GLA: 300,000 Neiman Marcus $35.00 - $50.00 $490.00 - $500.00 Wisconsin Friendship Hts 10.9% 43.2% 8.5 miles
5300 Wisconsin Ave. NW Year Built: 1975 Anchor GLA: 224,540 Saks Fifth Avenue 22,086 0 road miles
Washington D.C. Ren/Exp: 99 Anchor Ratio: 75% T.J. Maxx Western 9,466 N
Cinemas 20,711
9 Springfield Town Center Sub-Type: Super-Regional Center/Mall Total GLA: 1,364,479 Macy's $25.00 - $40.00 $450.00 - $500.00 Franconia Franconia 7.3% 14.2% 11.3 miles
6500 Springfield Mall Year Built: 1973 Anchor GLA: 664,479 JCPenney 61,384 0.9 miles road miles
Springfield, VA Ren/Exp: 14 Anchor Ratio: 49% Target Frontier 7,771 S / SW
Dick's Sporting Goods 28,737
Cinemas
Health Club
Other/Big Box
10 Bethesda Row Sub-Type: Lifestyle Center Total GLA: 533,000 Barnes & Noble $40.00 - $55.00 - Montgomery Bethesda 3.6% 4.9% 10.5 miles
4801-4809 Bethesda Ave. Year Built: 1945/51 Anchor GLA: 139,580 Giant Food 10,470 0.4 miles road miles
Bethesda, MD Ren/Exp: 91/01/08 Anchor Ratio: 26% Cinemas -- 10,708 N
Health Club --
Survey Total GLA 7,685,481
Survey Minimum 299,978 $25.00 - $40.00 $425.00 - $475.00 5,583 0 0.6% 1.1%
Survey Maximum 1,967,000 $60.00 - $85.00 $973.00 - $973.00 194,624 14,427 11.0% 43.2%
Survey Average 768,548 $42.22 - $58.89 $649.83 - $701.50 39,455 7,610 3.7% 7.4%

COMPETITION MAP
Primary Competition
From the chart and map and comparison, it is clear that, based upon distance and market convenience, the centers
that are generally proximate to the subject are viewed as being the most direct competitors. There are also several
lifestyle and power centers in the region that, because of their merchandising mix, compete to some degree with
the subject.
The subject’s principal competition is seen in the major super-regional and traditional malls within the greater
Washington D.C. region. Also included in the survey are other urban and lifestyle/mainstreet projects that were
deeded to compete with the subject, on some level.
The Market Commons Clarendon consists of an urban lifestyle type center, anchored by Whole Foods, Barnes &
Noble, Cate & Barrel, The Container Store, and a health club. It is part of a mixed-use development that includes
97,000 square feet of office, plus residential. Market Commons is situated 1.6 miles to the east/northeast of the
subject near the Clarendon transit stop. While merchandised differently than the subject, this project forms a partial
barrier to the east/northeast of the subject’s potential trade area.
Fashion Centre at Pentagon City is among the closest competing and most dominant centers to the subject. This
high-end project is situated to the southeast of Ballston, along the Blue and Yellow Lines of the Metro System. In
2016, Fashion Centre has been adding 50,000 square feet that will include Shake Shack, Honeygrow, Zara,
Matchbox, and Sugar Factory. Macy’s sales are reported to be $262/SF ($66.37M), while Nordstrom’s are $266/SF
($58.36M). The tenant sales shown on the exhibit range from $731/SF (excluding Apple), to $901/SF (including
Apple); all for tenants under 10,000 square feet. This project, combined with physical/geographic barriers, forms a
fairly clear boundary to the subject’s potential trade area.

Tysons Corner Center is the largest retail center in the region and one of the top malls in the country in terms of
aggregate sales. Nearby, Tysons Galleria is also a strong performer, with a slightly more upscale merchandising
mix. It is our understanding that Macy’s sales are around $119/SF ($31M), while Neiman Marcus produces sales
of $886/SF ($117M), and Saks $325/SF ($39M).
The Mosaic District comprises the retail component of a mixed-use development. Target anchors this project, along
with Last Call Neiman Marcus, a grocery, and cinemas. Combined with Tysons Galleria and Tysons Corner, these
properties form a boundary on the western side of the subject’s potential trade area.
Secondary Competition
From a geographic and transportation perspective, the primary competitors cited are viewed as being the subject’s
most direct competition. Due to distance, merchandising mix, and/or transportation infrastructure between the
subject and the balance of “regional” type centers in the market, the remaining projects are viewed as being
secondary, if not tertiary, in nature. These centers further solidify the potential boundaries to the subject’s trade
area.
D.C. USA is an urban power center concept built in Washington D.C. in 2008. It is anchored by Target, Bed Bath &
Beyond, and a fitness/health club. While the Potomac River provides a clear physical/geographic boundary to the
subject’s trade area on the east and northeast, the projects located on the D.C. side of the river further clarify the
subject’s trade area boundaries.
Wisconsin Place is a two-level lifestyle center comprised of four buildings. The Wisconsin Place development
includes a 432-unit luxury apartment complex and an 11-story Class A office tower with 295,000 square feet. The
site is just north of the Friendship Heights Metro Station. The retail component has approximately 588 subterranean
parking spaces allocated for use. While competitive only secondarily with the subject, this project—and others like
it—provide support for the subject’s potential rent achievement and sales productivity, upon completion. It is our
understanding that Wisconsin Place is currently being marketed for sale.
Mazza Gallerie is situated across from Wisconsin Place and sits atop the Friendship Heights Metro Center. This
four-level center is anchored by Neiman Marcus, and includes a small Saks Fifth Avenue store, T.J. Maxx, and
AMC Cinemas. The main entrance to the T.J. Maxx is located on the concourse level. Neiman Marcus is situated
on Levels 1, 2 and 3 on the northern elevation of the property. Saks occupies two levels on the south side, while
AMC is located on the third level along with Neiman. The primary mall entrance is from Wisconsin Avenue, between
Saks and Neiman. It is our understanding that Mazza Gallerie is currently being marketed for sale.
Springfield Town Center is an enclosed mall to the south of the subject’s potential trade area.
Bethesda Row is another urban-oriented project, but with more of a lifestyle center orientation than the enclosed
Mazza Gallerie and Wisconsin Place.
Other Competition
Other competition to the subject property comes from various neighborhood and community centers throughout the
local area, including freestanding stores and/or off-price, or discount-oriented big box users. Various other nodes
of retail development exist throughout the area that offer varying degrees of competition to the subject. There are
a number of larger strip centers, freestanding stores, and big box specialty retailers that, because of their major
tenants and merchandising, do compete to some degree with the subject.
Proposed Competition
Our research for this assignment included investigation of potential near-term changes in the retail structure of the
area. To the best of our knowledge, other than what may be discussed herein, there are no proposed or planned

shopping center developments in the subject’s immediate market area/trade area that would compete directly with
the subject property.
One of the closest projects of note is the repositioning and redevelopment of the Landmark Mall in Alexandria. As
noted previously in the Local Retail Market Overview, this one-time 1.0 million square foot mall is being downsized,
with some 285,000 square feet of retail space anticipated in the project following its repositioning, along with the
primary focus of the redevelopment: medium- to high-density residential use.
Competition Summary
Overall, the properties presented represent the bulk of large-scale retail development in the competitive market
area that the subject property competes with, either directly, or secondarily. Not included in the survey are projects
located further outside of the potential trade area, as well as the numerous community and neighborhood shopping
facilities in the market area.
Market Rental Rates

Retail rental rates range widely in the subject’s market, and are driven largely by location and center configuration.
Newer centers in the region tend to obtain the highest rents as compared to some of the more seasoned product.
Moreover, in multi-level urban projects, ground floor and street front units tend to command higher rental rates than
second or third floor spaces.
From the competitive market survey, the properties viewed as being competitive with the subject show an array of
rent levels that range from $25.00 to $85.00 per square foot for in-line shops (on average). The low mean rental
rate is calculated to be about $42.22 per square foot for in-line tenants, while the high mean rental rate for retail
space is about $58.89 per foot.
Obviously, some of the projects included on the survey are not truly comparable to the subject. Nevertheless, the
survey is believed to provide a reasonable range of supportable rent levels for the subject’s competitive market
area. Generally speaking, each of Tysons Corner, Tysons Galleria, and Fashion Centre at Pentagon City are viewed
as being superior to the potential rental rates achievable at the subject. Excluding these projects, the low and high
mean rental rates are calculated to be $34.17 per square foot and $49.17 per square foot, respectively. This is,
perhaps, a more supportable and appropriate range of rental rates for comparison with the subject property.
Based on the survey, with consideration given to the subject’s market position and comparison to competing
properties, we believe that the budgeted rental rates at the property are generally trending at or near reasonable
market levels. Please see Income Capitalization Approach for additional discussion of market rents as they pertain
to Ballston Quarter.
Market Sales Levels

As also exhibited in the survey of competing properties, average mall shop tenant sales range widely, from roughly
$425 to $975 per square foot. The low mean calculated from the mall shop sales at competing properties is $650
per square foot, while the high mean is calculated at $702 per square foot.
As with the rental rates seen at other area malls, mall shop tenant sales levels range widely and are driven largely
by location, quality, and center orientation. Certainly, several projects on the survey are superior to the subject.
Excluding, say, Tysons Galleria, Tysons Corner, and Fashion Centre at Pentagon City, the low and high mean
sales indications adjust to $455 and $492 per square foot, respectively. Overall this level of sales appears to be
more supportable and appropriate for comparison with Ballston Quarter.

Market Vacancy Levels

Based upon our survey of competitive properties in the subject’s trade area, an overall weighted average vacancy
rate of approximately 3.7 percent is estimated. Note that this is inclusive of all properties on the survey, but excludes
the subject.
For non-anchor/mall shop areas, the average vacancy rate among the properties in the survey is around 7.4 percent
at this writing. The survey is dragged down by the likes of Mazza Gallerie; which is shown to have a high level of
mall shop vacancy at this writing. A high amount of this vacancy (10,861 SF) is situated on the concourse level,
with the second level having approximately 17,155 square feet available. Excluding this center, the vacancy rate
for non-anchor/in-line shops is calculated to be 6.7 percent at this time.
From our observations of the local area, market-wide vacancy is estimated to be around 4.0 to 6.0 percent, which
is generally within a reasonable range of the vacancy rate reported by CoStar (4.35% region wide). As reported,
CoStar reports a retail vacancy rate of 2.96 percent for Arlington County, with the Rosslyn-Ballston Corridor at 5.31
percent. These figures compare with the Reis vacancy rate of 5.1 percent for Washington D.C., as a whole, and
5.8 percent for Arlington/Alexandria.
Obviously vacancy rates vary depending upon location, accessibility, property configuration, quality and condition
of space, anchor tenancy, and competition. In general terms, we believe the survey bodes relatively well for the
subject, with generally strong occupancy levels in evidence at several of the stronger (and typically newer) regional
and lifestyle-oriented centers. The relatively strong occupancy levels at Market Commons Clarendon is also
supportive of this assertion.
Over the long-term, with a moderate amount of new construction proposed (including the subject’s repositioning),
and stable-to-above average population and income trends, we believe that the subject’s market area should
experience a stabilized vacancy rate between 4.0 and 6.0 percent.
Typical Market Lease Terms

Typical Lease Term
Typical lease terms in the subject region vary from 3 to 10 years, for smaller in-line shops tenants, with larger
regional and national tenants commanding longer terms of 7 to upwards of 15 years. Major/anchor leases typically
run a range of 10 to 20 years, with 15 years being typical.
Expense Reimbursement
Typically, retail leases are structured on a net basis, with tenants responsible for a full pro-rata share of taxes and
operating expenses. Common area maintenance recoveries (including insurance) will typically have an
administrative surcharge of 10.0 to 15.0 percent in addition to the pro-rata pass-through. Periodically, the
management fee may be recovered in lieu of this administrative fee add-on structure.
Recent trends suggest that fixed CAM structures are becoming more prevalent (as opposed to pro-rata share).
Such CAM charges carry a fixed increase, annually, often based upon a multiple-of CPI, or a stipulated annual
escalation of 3.0 percent per year, 4.0 percent per annum, or sometimes even 5.0 percent per year.
Rent Escalations
Rental increases in the form of a CPI increase or a fixed step-up are usually sought, but not always achieved. The
strength of a particular property or location generally dictates the ability of a landlord to command rental increases.
The two most common structures in the subject market appear to be annual escalations or fixed steps. Annual
increases are typically based upon CPI, or a lower stipulated rate, usually around 2.0 to 3.0 percent per year. Fixed

steps appear to equal nearly 5.0 to 10.0 percent every three years over the course of the term. At a number of the
stronger or higher-end projects in region, fixed increases can range from 3.0 percent, 4.0 percent, or 5.0 percent
per annum.
Overage Rent
In addition to the minimum base rent, many retail tenants contract to pay a percentage of their gross annual sales
over a pre-established base amount as overage rent. Most leases in the market appear to have a natural breakpoint.
The average overage percentage for small space retail tenants is in a range of 4.0 to 6.0 percent. Anchor tenants
typically have the lowest percentage clauses, with ranges of 1.0 to 3.0 percent being most common.
Concessions
Concessions will vary considerably by property and tenant type. The level of rent that tenants are willing to pay is
often influenced by the magnitude of the build-out offered, as well as the amount, if any, of free rent granted. Anchor
tenants and major national retailers are generally in a better negotiating position to extract concessions in the form
of free rent or improvement allowances. However, if an anchor is strongly motivated to be in a particular market, it
is not unusual for an owner to be able to maintain a firm bargaining position, yielding little or no concessions.
We typically see tenant allowances ranging from $0.00 (zero) to $40.00 per square foot in this marketplace within
the more traditional retail centers (typically second-generation space), with renewal leases usually not providing
any allowance to the tenant. Raw space, or leases requiring higher levels of finish, tend to show TIs of $30.00 to
$50.00 per square foot. Likewise, restaurants typically command higher TI allowances and, depending upon the
rental rate negotiated, can range upwards of $100 to $200 per square foot.
Free rent concessions may range from 1 to 4 months, but are considered atypical of the subject’s market. When
free rent has been given, the tenant has typically been responsible for all interior build-out costs to finish the space.
Leasing Commissions
Leasing commissions in the local market area typically vary. Brokers we interviewed indicated each transaction is
different depending on tenant quality and the specific property in which it is placed. Generally commissions are
about 4.0 to 6.0 percent of the aggregate rent for new tenants, generally paid out up front, with renewal tenant
commissions being half the rate. Alternatively, many commission structures have been fixed at a rate per square
foot of building area. Typically, we have seen commissions of $4.00-$6.00 per square foot for new shop leases,
and anywhere from $1.50-$3.00 per square foot for new anchor tenants.
Major/Anchor Tenant Alignment

The final step before determining the subject’s potential trade area is to review the major/anchor tenants that
comprise (or will comprise) the center, and consider their relation to other competing major/anchors or overlapping
stores in the marketplace.
The subject property is (and will be) anchored by Macy's, Regal Cinemas, Sport & Health and CVS. Upon
redevelopment, these major/anchors will remain vital components of the center. Moreover, these major/anchors
are targeted primarily toward the middle-income consumer, which appears to fit well with the demographic profile
of the subject’s immediate market area.
Below are profiles of the major/anchors tenants located at the subject.

Macy's
Macy’s, Inc. is the largest department store chain in the United States. The company’s retail stores sell a wide range
of merchandise including men’s, women’s and children’s apparel and accessories, cosmetics, home furnishings
and other consumer goods. Macy’s operates 870 department stores in 45 states, the District of Columbia, Guam
and Puerto Rico under the Macy’s and Bloomingdale’s banners.
Formerly known as Federated Department Stores, the Company voted in March 2007 to change its name to Macy’s
Inc. Federated shareholders approved the revised proposal during the company’s annual meeting in May, 2007.
Along with the change of the stock ticker symbol, the Company’s headquarters moved from the original Lazarus
flagship store in Columbus, Ohio, to the Macy’s flagship store at Herald Square in New York City. The company’s
fiscal year ends at the end of January.
Macy’s completed the sale of its David's Bridal and Priscilla of Boston businesses to an affiliate of Los Angeles-
based Leonard Green & Partners, L.P. for approximately $750.0 million in January, 2007. The sale includes 273
David's Bridal stores and 10 Priscilla of Boston locations. Following the sale, Macy’s will continue to be David
Bridal’s exclusive department store wedding gift registry partner.
Credit Ratings
Macy’s is rated investment grade by Moody’s, Fitch and Standard & Poor’s.
CREDIT RATINGS
Issuer Rating Last Rating Date Outlook

Moody's Baa2 Sep-15 Stable
Fitch BBB Apr-16 Stable
S&P BBB Mar-16 Negative
Source: Moody's, Fitch, S&P
Annual Filing Data

Macy’s net sales in fiscal 2015 shrank by 3.7 percent from the prior year to $27.1 billion. The company’s net income
for the year was $1.1 million, compared to $1.5 million in fiscal 2014. Further, comparable store sales fell by 3.0
percent for the year, which represents the end of five consecutive years of comparable sales growth.
The following is a profile of Macy’s annual financial performance:
MACY'S FINANCIAL OVERVIEW

FY 2015 FY 2014 FY 2013 FY 2012 FY 2011
Net Sales (in mil) $27,079 $28,105 $27,931 $27,686 $26,405
Net Revenue Growth -3.7% 0.6% 0.9% 4.9% 5.6%
Net Income (in mil) $1,072 $1,526 $1,486 $1,335 $1,256
Same Store Revenue Change -3.0% 0.7% 1.9% 3.7% 5.3%
Gross Leasable Area (SF in millions) 141.9 147.4 150.1 150.6 151.9
Revenue per Square Foot $191 $191 $186 $184 $174
Number of Stores 870 823 840 841 842
Average Store Size 182,000 182,000 182,000 182,000 182,000
Number of Employees 157,900 166,900 172,500 175,700 171,000
Source: Company filings

Store Openings / Closings

Macy’s has announced that, in 2016, it intends to open one new Macy's store in Kapolei, HI, approximately 42 new
Bluemercury locations (24 freestanding and 18 inside existing Macy's stores), and 16 new Macy's Backstage
locations (one freestanding and 15 inside existing Macy's stores).
In 2017, the company intends to open a new Macy's store in Murray, UT, a Macy's replacement store in Los
Angeles, CA, and a new Bloomingdale's store in San Jose, CA. In 2018, the Company intends to open a new
Bloomingdale's store in Norwalk, CT. In addition, a new Bloomingdale's store is expected to open in Kuwait in 2017
and new Macy's and Bloomingdale's stores are planned to open in Abu Dhabi, United Arab Emirates in 2018 under
license agreements with Al Tayer Group, LLC.
Regal Cinemas
Regal Entertainment Group is the U.S.'s largest theater owner. The company has 7,361 screens within 572 theaters
in 42 states through its Regal Cinemas, Edwards Theatres, United Artists Theatre Company, and Hoyts Cinema
brands. Regal Entertainment Group was founded in 2002 when Philip Anschutz bought and combined controlling
interests in the bankrupt Regal Cinemas, United Artists, and Edwards Theatres through his firm, The Anschutz
Corporation. Anschutz owns about half of Regal Entertainment Group and controls 78.0 percent of its voting power.
Regal Entertainment Group's theaters house an average of 12 screens, and more than 80.0 percent of its screens
are in theaters with stadium seating. The company makes nearly 70.0 percent of its revenues from ticket sales, and
generates about a quarter of its revenues from concession sales. Additional revenues come from vendor marketing
programs, gift cards, and discount ticket programs.
The company operates solely in the U.S., and targets midsized metropolitan markets and suburban growth areas
of larger cities. It has a large number of theaters in California, Florida, and New York; those three states together
account for more than a third of REG's locations.
Regal Entertainment Group is in the process of converting all of its theatres from 35 mm film projection to digital
projection, and it is financing the move through a joint venture (called Digital Cinema Implementation Partners) with
AMC and Cinemark. An additional digital effort includes Regal Entertainment Group's proprietary format known as
"Regal Premium Experience," or RPX. The company also has a partnership with IMAX, and operates some 66
screens in the giant digital format.
Credit Ratings
Regal Entertainment Group is rated below investment grade by Moody’s, Fitch, and S&P.
CREDIT RATINGS
Agency Issuer Rating Last Rating Date Outlook

Moody's B1 Sep-15 Stable
Fitch B+ Sep-15 Stable
S&P B+ Jan-15 Stable
So urce: M o o dy's, Fitch, S&P
Annual Filing Data

Company-wide revenue for fiscal 2015 increased 4.6 percent over the prior year, to over $3.1 billion. As well, Regal
Entertainment Group’s net income for the year rose to $153.4 million, up from net income of $105.6 million in fiscal
2014. Total attendance in fiscal 2015 was 216.7 million.
The following table depicts Regal Entertainment Group’s financial performance over the last five years:

REGAL ENTERTAINMENT FINANCIAL OVERVIEW

FY 2015 FY 2014 FY 2013 FY 2012 FY 2011
Revenues (in millions) $3,127.3 $2,990.1 $3,038.1 $2,820.0 $2,675.9
Change in Revenues 4.6% -1.6% 7.7% 5.4% -4.5%
Net Income (in millions) $153.4 $105.6 $157.7 $142.3 $36.8
Attendance (in millions) 216.7 220.2 228.6 216.4 211.9
Average Screens Per Theatre 12.9 12.8 12.7 12.7 12.6
Number of Locations (Year End) 572 574 580 540 527
Number of Screens 7,361 7,367 7,394 6,880 6,614
Revenue Per Screen $424,847 $405,878 $410,887 $409,884 $404,581
Number of Employees (Year End) 25,915 23,168 24,201 22,056 20,728

In addition to the acquisition of five theatres and 61 screens from entities affiliated with Georgia Theatre Company,
Regal continued to actively manage their asset base during the fiscal 2015 Period by opening two theatres with 24
screens and closing nine underperforming theatres with 91 screens, ending the fiscal 2015 period with 572 theatres
and 7,361 screens.
CVS
CVS Health Corp. (formerly CVS Caremark) is the nation's number two drugstore chain, and a leading pharmacy
benefits manager, with nearly 65.0 million plan members. With 7,866 retail and specialty drugstores under the CVS,
Navarro, and Longs Drug banners, it trails rival Walgreens (8,300) in store count. CVS has grown rapidly through
a string of acquisitions that included the Eckerd and Longs Drug Stores chains. Also, CVS now owns prescription
benefits management (PBM) company Caremark Rx. Caremark Rx was combined with CVS's PBM and specialty
pharmacy unit PharmaCare Management Services to form Caremark Pharmacy Services. Its MinuteClinic retail
health network has some 900 locations inside CVS stores.
In a significant deal for the pharmacy sector, CVS in mid-2015 purchased Omnicare, one of the country's largest
nursing home pharmacies, for $12.7 billion. The deal strengthened CVS' specialty pharmaceuticals business and
placed it in a more optimal position to renegotiate supply contracts.
A few months later, in late 2015, CVS acquired Target's pharmacy and clinic operations for $1.9 billion. As part of
the deal, CVS acquired more than 1,600 pharmacies from Target in 47 states and is operating them under the CVS
name in Target stores. CVS will also operate branded pharmacies in new Target stores that offer pharmacy
services.
The company struck a sizable deal to expand its specialty pharmacy operations in 2014 when it acquired Coram,
a provider of specialty pharmaceuticals and infusion therapy services. CVS paid some $2.1 billion to purchase
Coram from its former parent, home health provider Apria Healthcare.
In 2014, CVS bought California-based drugstore chain Navarro Discount Pharmacy; marking its largest acquisition
since its Longs Drug purchase in 2008. Navarro, the largest Hispanic-owned drugstore chain in the country, gives
CVS entrée into the fastest growing segment of the population; the stores will, therefore, keep the Navarro name.
Its Navarro Health Services also boosts CVS' specialty pharmacy segment, keeping with its plan to fuel growth
beyond its drugstore arms race with Walgreen and pharmacy management battle with Express Scripts.
Credit Ratings
CVS Health Corp. is rated investment grade by Moody’s and Standard & Poor’s.

CREDIT RATINGS
Agency Issuer Rating Last Rating Action Outlook

Moody's Baa1 Jun-15 Stable
Fitch - - -
S&P BBB+ Sep-15 Stable
Source: Moody's, Fitch, S&P
Annual Filing Data
CVS Health’s net revenue in fiscal 2014 totaled $139.4 billion, a 9.9 percent increase from $126.8 billion in fiscal
2013. Net revenues from the company’s retail pharmacy segment increased $2.2 billion, or 5.1 percent to $67.8
billion for fiscal 2014, as compared to the prior year. This increase was primarily driven by the same store sales
increase of 2.1 percent and net revenues from new stores. CVS Health’s net income for fiscal 2014 was over $4.6
billion, a 1.1 percent increase year-over-year.
The following is a profile of CVS Health’s annual sales and income performance:
CVS HEALTH CORPORATION FINANCIAL OVERVIEW

FY 2014 FY 2013 FY 2012 FY 2011 FY 2010
Net Revenues (in millions) $139,367 $126,761 $123,133 $107,100 $95,778
Change in Revenues 9.9% 2.9% 15.0% 11.8% -2.5%
Net Income (in millions) $4,644 $4,592 $3,877 $3,461 $3,427
Same Store Revenue Change 2.1% 1.7% 5.6% 2.3% 2.1%
Gross Leasable Area (SF in millions) 76.7 75.0 73.1 71.5 69.3
Net Stores Opened 206 140 120 -22 330
Number of Stores (Year End) 7,866 7,660 7,520 7,400 7,422
Number of Employees (Year End) 217,800 208,000 203,000 202,000 201,000
The company's Retail Pharmacy Store Development plan – focused on entering new markets, adding stores in
existing markets, and relocating stores to more convenient sites – has been essential for business growth. The
company anticipates annual square footage growth of between 2.0 to 3.0 percent.
Sport & Health

Sport & Health is a locally owned and operated club “built around integrating fun and fitness into the busy lifestyles
that define our nation's capital and its ever-expanding communities.” The company opened its first club in Arlington,
Virginia in 1973. Since then, they have grown to be one of the largest fitness companies in the country, with over
half a million workouts taking place in their clubs each month. Sport & Health has some 22 facilities throughout the
Washington D.C. metropolitan area.
Major/Anchor Tenant Alignment Summary

Duplication in major/anchor tenancy is seen as typically limiting a property’s potential trade area, as it is unlikely
that customers will travel past one store’s location to frequent a similar store at the subject property. Conversely,
unique major/anchors may help to extend the subject’s trade area.
The following table presents the anchor tenant alignment of the subject’s competitors.

ANCHOR TENANT ALIGNMENT
The Market Fashion

Ballston Commons Centre at Tysons Tysons Mosaic Wisconsin Springfield
Anchor Quarter Clarendon Pentagon City Corner Center Galleria District D.C. USA Place Mazza Gallerie Town Center Bethesda Row
Macy's X X X X X X
Cinemas X X X X X X
Health Club X X X X X
CVS X
Grocery X X X X X
Barnes & Noble X X X
Crate & Barrel X
Container Store X
Nordstrom X X
Lord & Taylor X
Bloomingdale's X X
Neiman Marcus X X
Saks Fifth Avenue X X
Target X X X
Last Call Neiman X
JCPenney X
Dick's Sporting Goods X
Other/Big Box X X X
From our review of the subject, its competition, and the market area in which it operates, it is apparent that none of
the subject’s major/anchor tenants is particularly unique to the trade area. With this in mind, it is unlikely that the
subject’s trade area would extend beyond the bounds set by some of its competitors. The subject’s Macy’s
department store has overlapping units throughout Washington D.C., while there are cinemas located at Tysons,
The Mosaic, and other projects. In addition, there is an 8-screen AMC Theater between Clarendon and Rosslyn at
Courthouse.
In conjunction with the subject’s major/anchor and entertainment alignment, ownership is planning to have a number
of in-line shops and food offerings that will be unique to the market. This too will be an important factor in the
customer draw to Ballston Quarter.
Certainly, these differentiations of the subject property from other major malls and regional/lifestyle centers in the
market appear to be a relative strength for the drawing power of the center, and should help to propel the
performance of the subject property and gain market acceptance. While there will not be any truly unique
major/anchor tenants, the somewhat unique merchandising mix of the project, as planned, appears to match up
well with the demographic profile within its trade area. Moreover, the quality of environment created for shoppers
will be a unique feature for the immediate market area. These comparisons further help to decipher an appropriate,
reasonable trade area for the subject.
Trade Area Analysis

We have considered several factors in defining boundaries for the subject's potential trade area. First, the property's
location with respect to transportation provides the basis for regional access to the area. Second, regional
competition and geographic boundaries help to define the potential size of the trade area as a measure of distance
from the property. Third, the merchandising mix and anchor alignment will provide the basic draw of customers that
are likely to patronize the property.
The Ballston Quarter is located at the western end of the Rosslyn-Ballston Corridor in the Washington D.C. CBSA.
It is benefited by good regional and local accessibility, as well as the mass transit options available in the local area.
Major roadway and transit proximity to the center provides the necessary access to more regional destinations
throughout the trade area, while the property’s major/anchor stores, restaurants, and shops should provide the
necessary drawing power for the property.

As discussed, the location and accessibility of competing centers has direct bearing on the formation and make-up
of the subject's potential trade area. Based upon our review, the subject competes (or will compete) most directly
with the traditional regional malls, urban malls, and regional/lifestyle centers within the region. It will also compete
with several of the larger local area centers, although its merchandising mix should allow it to draw from a more
expanded trade area that overlaps with some of the surrounding local centers. Finally, the subject will also compete,
to some degree, with other freestanding stores and power/community centers in the region, particularly those that
include similarly merchandised major/anchor stores, or cinema/entertainment components. Secondary competition
is seen in other area community centers that are anchored by competing major tenants; namely off-price or discount
retailers.
It is also important to note that other freestanding "category killers" represent a relatively strong force in the market's
competitive environment. However, their primary stores (discount department stores, drugs, home improvement
centers and warehouse clubs) are generally different from those that will comprise the subject property. Certainly,
there is a place for both in most retail environments, including the subject region. Collectively, they balance out the
retail infill of the region.
To summarize, the foundation of our analysis in the delineation of the subject's trade area may be summarized as
follows:
 Highway accessibility, including area traffic patterns, geographical constraints, and nodes of residential
development;
 The position and nature of the area's retail structure, including the location of destination retail centers that
compete with the subject and the strength and composition of the retail infill; and
 The size, anchor tenancy, and merchandising composition of the subject property's tenants.
After our review of the subject’s location and the proximity of competing properties, we have estimated the subject’s
primary trade area based upon observations of the market. Looking at the subject’s competition, as well as the
geographic constraints created by transportation and natural barriers, we have considered delineation of the
subject’s potential trade area on the basis of a radius-based survey that considers the competitive constraints,
traffic patterns, accessibility, geographic boundaries, and surrounding residential development.
Given all of the above, we believe the subject property’s primary trade area would likely span an area encompassing
about three miles around the center. The subject's secondary trade area might span up to four miles from the site
given its regional accessibility and location of competitive properties.
Using these observations, we have analyzed a primary demographic profile for the subject based on a radius of
approximately three miles from the property. To add perspective to this analysis, we have segregated our survey
into two-, three-, and four-mile concentric circles, with a comparison to the County, CBSA, and State. This data is
presented on the following chart.

DEMOGRAPHIC SUMMARY
2.0-mile 3.0-mile 4.0-mile Arlington Washington State of
Radius Radius Radius County D.C. CBSA Virginia
POPULATION STATISTICS
2000 112,648 223,041 354,252 189,878 4,837,095 7,077,765
2015 138,285 261,137 423,812 229,841 6,082,735 8,379,068
2020 143,620 270,018 438,730 239,875 6,410,788 8,780,467
Compound Annual Change

2000 - 2015 1.38% 1.06% 1.20% 1.28% 1.54% 1.13%
2015 - 2020 0.76% 0.67% 0.69% 0.86% 1.06% 0.94%
HOUSEHOLD STATISTICS
2000 49,843 95,761 157,912 86,363 1,815,067 2,698,906
2015 63,185 115,538 190,831 109,200 2,260,901 3,196,247
2020 66,555 120,681 199,452 115,446 2,395,287 3,365,500

2000 - 2015 1.59% 1.26% 1.27% 1.58% 1.48% 1.13%
2015 - 2020 1.04% 0.87% 0.89% 1.12% 1.16% 1.04%
AVERAGE HOUSEHOLD INCOME

2000 $78,881 $79,472 $85,676 $81,831 $80,506 $61,644
2015 $139,605 $137,492 $140,948 $142,282 $125,333 $93,883
2020 $167,572 $163,925 $165,419 $170,075 $142,636 $108,247

2000 - 2015 3.88% 3.72% 3.37% 3.76% 2.99% 2.84%
2015 - 2020 3.72% 3.58% 3.25% 3.63% 2.62% 2.89%
RETAIL SALES POTENTIAL

Total Retail Sales ($Mil) $3,475 $6,316 $10,502 $6,107 $124,967 $154,339
General Merchandise $450 $821 $1,397 $786 $16,631 $20,116
Apparel & Accessory $168 $303 $502 $293 $5,843 $7,349
Furniture & Home Furnish.** $141 $254 $420 $248 $5,002 $5,704
Other Sales*** $111 $202 $336 $195 $3,999 $4,939
Total GAFO Sales $871 $1,580 $2,654 $1,523 $31,475 $38,108
Total Expenditure Potential* $8,821 $15,886 $26,897 $15,537 $283,366 $300,073
GAFO % of Total Retail Sales 25.06% 25.02% 25.27% 24.93% 25.19% 24.69%
GAFO % of Total Expenditure Potential 9.87% 9.95% 9.87% 9.80% 11.11% 12.70%
SOURCE: © 2016 Experian Marketing Solutions, Inc. •All rights reserved

* Households x Total Household Income
** Includes Home Appliance, Radio, T.V. Stores
***Other Sales estimated at 3.20% of Total Retail Sales
Population
Having established the subject’s trade area, our analysis focuses on the trade area's population. Experian
Marketing Solutions, Inc., provides historical, current and forecasted population estimates for the total trade area.
Patterns of development density and migration are reflected in the current levels of population estimates.
Between 2000 and 2015, Experian Marketing Solutions, Inc., reports that the population within the primary trade
area (3-mile radius) increased at a compound annual rate of 1.06 percent. This is fairly characteristic of the closer-
in areas in this market, with slightly higher growth evident in some of the more suburbanized areas. This trend is

expected to continue into the near future, albeit at a slightly slower pace. Expanding to the total trade area (4-mile
radius), population is expected to increase 0.69 percent per annum over the next five years.
The following map contains a graphic representation of the current population distribution within the subject’s trade
area and region. As can be seen, the subject is situated in a relatively densely populated section of the market.
CURRENT POPULATION MAP
In similar fashion, the graphic below illustrates projected population growth within the trade area over the next five
years. As can be seen, the trade area is clearly characterized by various levels of growth.

POPULATION GROWTH MAP
As evident, despite continued growth in the suburbs, a fairly high amount of the region’s population growth is also
forecasted for the closer-in areas where higher-density multi-family development is occurring.
Households
A household consists of a person or group of people occupying a single housing unit, and is not necessarily a family
unit. When an individual purchases goods and services, these purchases are a reflection of the entire household’s
needs and decisions, making the household a critical unit to be considered when reviewing market data and forming
conclusions about the trade area as it impacts the retail center.
Figures provided by Experian Marketing Solutions, Inc., indicate that, historically, the number of households have
been increasing at a faster rate than the growth of the population. Several changes in the way households are being
formed have caused this acceleration, specifically:
 The population is living longer on average. This results in an increase of single- and two-person households;
 Higher divorce rates have resulted in an increase in single-person households; and

 Many individuals have postponed marriage, also resulting in more single-person households.
According to Experian Marketing Solutions, Inc., the primary trade area added households at a compound annual
rate of 1.26 percent between 2000 and 2015. Consistent with national trends, the trade area has been experiencing
household changes at a rate that varies from population changes. That pace is expected to continue through 2020,
and is estimated at 0.87 percent.
Correspondingly, a greater number of smaller households with fewer children generally indicates more disposable
income. In 2000, there were 2.23 persons per household in the primary trade area and, by 2015, this number is
estimated to have decreased to 2.18 persons. Through 2020, the average number of persons per household is
forecasted to decline to 2.16 persons.
Trade Area Income

Income levels—either on a per capita, per family or household basis—indicate the economic level of the residents
of the trade area and form an important component of this total analysis. Average household income, when
combined with the number of households, is a major determinant of an area's retail sales potential.
Trade area income figures for the subject support the profile of a broad middle-income market. According to
Experian Marketing Solutions, Inc., average household income in the primary trade area in 2015 was approximately
$137,492, 96.63 percent of the Arlington County average ($142,282), and 109.70 percent of the Washington D.C.
regional average ($125,333).
Further analysis shows a relatively broad-based distribution of income, although skewed toward the upper-income
brackets, which is relatively similar to the distribution within the larger County and CBSA figures. This information
is summarized as follows:
DISTRIBUTION OF HOUSEHOLD INCOME

2.0-mile 3.0-mile 4.0-mile Arlington Washington State of
Category Radius Radius Radius County D.C. CBSA Virginia
$150,000 or more 28.55% 27.68% 28.35% 29.23% 24.16% 14.39%
$125,000 to $149,999 9.42% 8.96% 8.89% 9.54% 9.10% 6.21%
$100,000 to $124,999 12.32% 12.31% 12.23% 12.68% 12.33% 9.70%
$75,000 to $99,999 12.64% 12.86% 12.65% 13.41% 13.53% 13.19%
$50,000 to $74,999 13.97% 14.41% 14.22% 13.93% 15.11% 17.99%
$35,000 to $49,999 7.66% 7.61% 7.76% 6.77% 9.01% 12.27%
$25,000 to $34,999 5.09% 5.15% 5.01% 4.58% 5.55% 8.36%
$15,000 to $24,999 4.57% 4.89% 4.44% 4.05% 4.88% 8.29%
Under $15,000 5.79% 6.12% 6.45% 5.82% 6.34% 9.60%
Below is a graphic presentation of the household income distribution throughout the trade area that clearly shows
the area surrounding the subject to be characterized by middle- and upper-income households. Higher income
areas are also located in surrounding suburban communities.

HOUSEHOLD INCOME MAP
Retail Sales
Perhaps an even more important measure of area income is the amount spent on retail purchases. Retail sales
and growth are also tracked by Experian Marketing Solutions, Inc.
At the end of last year, the subject’s primary trade area (3-mile radius) had an aggregate retail sales level of $7.38
billion, with average retail sales per household of $67,604. By comparison, Arlington County had average sales per
household of $67,604, while the Washington D.C. CBSA and State averages were $67,037 and $57,177,
respectively. Part of the higher per capita spending in Washington D.C. is due to the influx of visitor expenditure
potential into the market.
Experian’s forecast for retail sales is presented on the following table.

RETAIL SALES
CAGR
Area 2015 2020 2015-20
2-mile radius $4,207,106 $4,935,574 3.2%
3-mile radius $7,625,445 $8,868,288 3.1%
4-mile radius $12,612,241 $14,670,301 3.1%
Arlington County $7,382,348 $8,669,609 3.3%
D.C. CBSA $151,564,130 $178,521,745 3.3%
State of Virginia $182,753,031 $218,384,479 3.6%
As can be seen, Experian Marketing Solutions, Inc., projects that retail sales in the County will grow at a pace that
is fairly consistent with regional trends, and slightly below the state. In the subject’s trade area, mostly similar
projections for growth are exhibited.
Subject Property Sales Potential

Although sales trends within the subject’s region lend important insight into such an analysis, it is the subject’s
potential sales productivity that is, perhaps, most germane. Sales—and sales growth—are the driving impetus for
rental rates and rent growth at retail properties, and have significant bearing on the occupancy costs tenants are
willing to pay.
As a new project, it is difficult to forecast potential sales for the subject. To try and quantify the sales potential of
the property, we have considered several factors. First, ownership’s sales forecasts and/or historical sales
performance at the property can provide an important basis from which to estimate potential sales at the project (if
available). Second, industry averages can provide some indication of the subject’s ultimate sales potential, both in
terms of in-line shop sales and major/anchor store sales. Next, comparable sales at centers within the subject’s
general area provide insight as to potential sales achievable at the subject (if available). Finally, an analysis of the
subject’s market share potential can be used to support the projections/assumptions utilized in the analysis. The
following subsections follow this general format, beginning with mall shop sales and finishing with major/anchor
stores.
In-Line/Mall Shop Sales

This subsection considers the mall shop sales potential for the subject. As noted, the analysis is based on several
factors, including ownership’s projections or historical figures, industry averages, and mall shop sales at competing
centers.
Subject Property Tenant Sales History
First, we have looked at the historical tenant sales trends at the subject property as an initial basis to consider for
its potential. Granted, the historical sales available for analysis are from only a select grouping of remaining tenants,
generated in a declining mall that had been readied for redevelopment and partially closed off in sections.
We have reviewed actual sales reports for the last several years of the subject’s operating history. From this data,
we have considered a comp-store (or same-store) sales comparison. Such a comparison tends to provide a more
accurate measure of a mall’s performance, since comp-store or same-store sales compare sales from tenants open
and operating for at least one year. The following chart presents the historical trend:

COMPARABLE SALES - Mall Shop Sales

Rolling Twelve Months Rolling Twelve Months Rolling Twelve Months
As of December 2013 As of December 2014 As of December 2015
Total Total Total Total Total Total
Category Sales Sq/Ft Sales/SF Sales Sq/Ft Sales/SF Sales Sq/Ft Sales/SF
Comparable Sales < 10,000 SF $35,554 119,721 $296.97 $33,282 120,973 $275.12 $31,484 110,022 $286.16
Comparable Sales > 10,000 SF $0 0 $0.00 $0 0 $0.00 $0 0 $0.00
Total Comparable Sales $35,554 119,721 $296.97 $33,282 120,973 $275.12 $31,484 110,022 $286.16
As exhibited, the tenants remaining in the center during 2015 generated in-line mall shop sales of $286.16 per
square foot. This was up from $275.12 per square foot in 2014, and down from $296.97 in 2013.
These figures include all non-anchor stores at the subject property. Large store formats do not typically generate
the same sales volume (on per square foot basis) as their smaller counter parts and, as such, most mall operators
analyze their center sales performance in terms of stores of over and under 10,000 square feet. As well, the above
report includes the subject’s former food court tenants, which generated sales of $504.41 per square foot in 2015.
Excluding the food court tenants, in-line shops produced sales of $265.4 for the year.
COMPARABLE SALES - Inline Stores

Rolling Twelve Months Rolling Twelve Months Rolling Twelve Months
Total Total Total Total Total Total
Category Sales Sq/Ft Sales/SF Sales Sq/Ft Sales/SF Sales Sq/Ft Sales/SF
Total Comparable Sales $35,554 119,721 $296.97 $33,282 120,973 $275.12 $31,484 110,022 $286.16
Less Food Court $5,104 7,307 $698.49 $4,991 9,665 $516.39 $4,875 9,665 $504.41
Inline Comparable Sales $30,450 112,414 $270.87 $28,291 111,308 $254.17 $26,609 100,357 $265.14
Generally speaking, the decline in sales productivity shown is considered to be reflective of property-related
declines and, to some degree, macro economic conditions, as the competitive landscape did not change materially
during this time frame.
Obviously, these sales indications are not viewed as reflecting the subject’s ultimate potential, upon redevelopment.
Nonetheless, the benchmarks tend to provide a baseline from which to project sales in the future. As will be seen,
we see the subject as having better sales potential following the redevelopment, re-sizing, and renovation.
Given the current and anticipated economic conditions and supply and demand trends in the market, coupled with
investor-supported assumptions for similar projects, we have projected tenant sales growth at 2.5% per year.
Industry Average Sales (Mall Shops)
Next, we have considered industry average sales for regional malls.
The International Council of Shopping Centers compiles a monthly U.S. Mall Report. The report represents a
proprietary database containing non-anchor sales and square footage information on nearly 500 regional and
super-regional malls. For 2015, the malls included in the survey generated average mall sales of $472 per square
foot, nationally. A comparison of national and regional figures is shown on the following chart.

MALL SHOP SALES
Compound
Annual 2015 2014 2013 2012 2011 2010
Region Growth Rate* Sales Change Sales Change Sales Change Sales Change Sales Change Sales
Northeast
New England 3.12% $492 -7.5% $539 1.7% $530 8.2% $490 11.4% $440 4.3% $422
Middle Atlantic 4.85% $593 1.3% $586 1.9% $575 6.6% $540 7.1% $504 7.7% $468
New York Metro 3.06% $593 2.0% $581 -2.6% $597 1.9% $586 5.6% $555 8.8% $510
Subtotal 4.25% $553 -1.9% $567 1.9% $557 7.2% $519 8.6% $478 6.5% $449
Midwest
Great Lakes 1.69% $360 1.8% $353 -1.9% $360 -1.5% $365 5.2% $347 4.8% $331
Plains 0.65% $346 0.2% $346 -4.5% $362 -2.0% $370 6.6% $347 3.6% $335
Subtotal 1.35% $355 1.2% $351 -2.8% $361 -1.7% $367 5.8% $347 4.5% $332
South
South Atlantic 3.33% $483 -0.6% $488 -1.7% $497 2.1% $487 9.9% $443 8.0% $410
Southeast 0.12% $348 1.7% $343 -4.2% $358 -3.5% $371 6.0% $350 1.2% $346
Southwest 3.37% $458 -0.2% $461 0.9% $457 2.2% $447 8.5% $412 6.2% $388
Subtotal 3.00% $459 -0.4% $462 -1.1% $468 1.5% $461 9.0% $423 6.8% $396
West
Mountain 5.25% $554 1.4% $549 -1.4% $557 6.0% $525 11.2% $472 10.0% $429
Pacific 6.84% $639 3.7% $618 6.5% $581 4.3% $557 10.3% $505 10.0% $459
Subtotal 6.25% $604 2.8% $590 3.3% $571 5.0% $544 10.8% $491 10.1% $446
United States 3.42% $472 0.0% $474 -0.2% $475 2.5% $463 8.7% $426 6.8% $399
Source: ICSC U.S. Mall Report
* Compound Annual Growth Rate calculated from 2010 through 2015 figures
The subject’s prior sales for stores of under 10,000 square feet of $286.16 per square foot are well below both the
national and regional averages. Its sales performance of $286.16 per square foot can be compared to its peer group
as shown below:
MALL SHOP SALES COMPARISON

Median Subject Variance
United States $472 $286 61%
Northeast U.S. $553 $286 52%
Mid-Atlantic U.S. $593 $286 48%
Although not specifically noted in the survey, our discussions with ICSC researchers indicated that it is believed
that the figures are based on stores of less than 10,000 square feet. The subject’s performance, when compared
to similar malls within the region, has been at lower-end of the range, reflecting its relative position in the market in
its previous condition/state.
Further, these benchmarks appear to provide a reasonable level of sales expectations for mall shop tenants in this
market. However, as will be seen, we do not necessarily believe the subject will produce sales at these levels
regional levels following redevelopment, particularly considering the sales levels from competing properties, which
are discussed in a following subsection.
Ownership’s Sales Projections
With the subject’s prior sales levels in mind, we can next review ownership’s sales forecast for retailers at the
subject property, as summarized in the “Tax Revenue Projections & Comparison of Debt Service” dated June 9,
2016. The following table presents the information extracted from the document.

Ownership's Tenant Sales Assumptions
Retail Annual
Tenant/ Sales Retail
Use Sq/Ft Per Sq/Ft Sales
Macy's 127,294 $ 196.81 $ 25,052,640

Fitness 34,730 $ - $ -
Cinemas 67,062 $ 76.05 $ 5,100,000
CVS (included below) -- -- $ -
Subtotal - Major/Anchors 229,086 $ 131.62 $ 30,152,640

Specialty Retail 138,584 $ 461.00 $ 63,887,224
Service Retail 11,593 $ 378.00 $ 4,382,154
Food Court 8,223 $ 1,251.52 $ 10,291,250
Restaurants 72,553 $ 775.00 $ 56,228,575
Punch Bowl 22,892 $ 510.00 $ 11,674,920
Subtotal - Non-Anchors 253,845 $ 576.98 $ 146,464,123
Total Project 482,931 $ 365.72 $ 176,616,763
Source: Ballston Quarter Tax Revenue Projections
The above sales were forecast for use in the tax increment financing agreement with Arlington County.
In total, the subject’s mall shop component is projected to generate some $146.46 million in sales, or approximately
$576.98 per square foot of reported GLA in the report (which varies slightly from the current rent roll and budget).
Moreover, this aggregate number includes CVS, which we treat separately. Excluding CVS’ current sales of $13.3
million), the average in-line shop performance would be around $549.59 per square foot. Excluding the food court
tenants noted in ownership’s forecast ($1,251.52/SF), the average in-line shop tenant sales level adjusts to $524.93
per square foot.
Generally, this level of sales projection is at the higher end of what might be initially expected when compared with
some of the subject’s competing properties. Nevertheless, this level of sales is fairly well bracketed by competing
projects, and is reflective of what ownership plans in terms of merchandising and retailers at the center.
Competing Properties (Mall Shops)
Next, we have looked at sales levels among competing properties in the market. This information is summarized in
the following chart.

Mall Shop Sales Potential

Sales/ SF
Indicator
Source Low - High
C&W Survey of Competitive Centers
Subject Property $ 280 - $ 300
Fashion Centre at Pentagon City $ 731 - $ 901
Tysons Corner Center $ 830 - $ 860
Tysons Galleria $ 973 - $ 973
Wisconsin Place $ 425 - $ 475
Mazza Gallerie $ 490 - $ 500
Springfield Town Center $ 450 - $ 500
- Survey Low $ 280 - $ 300
- Survey High $ 973 - $ 973
- Survey Median $ 490 - $ 500
- Survey Mean $ 597 - $ 644
Based upon the configuration, quality, and condition of the subject, upon completion, coupled with the planned
tenancy and merchandising strategy, we would view several of the above centers as being more similar to the
subject than others on the survey. Among them, Wisconsin Place, Mazza Gallerie, and Springfield Town Center
would be viewed as being the better comparisons for Ballston Quarter. These projects all show average in-line shop
sales toward the lower- to mid-range of the survey.
Sales/ SF
Indicator
Source Low - High
C&W Survey of Select Competitive Centers
- Survey Median $ 450 - $ 500
- Survey Mean $ 455 - $ 492
As presented in the comparison of malls earlier in this section, the subject’s demographic profile, traffic counts, and
other comparisons generally provide support for these potential tenant sales ranges as indicated by the competing
properties. We have excluded Fashion Centre and both Tysons properties due to their superiority in this more select
grouping of competitors.
Conclusion (Mall Shops)
Based on the total analysis herein, we can forecast a potential sales estimate for the subject property. Clearly, the
process at hand is difficult, at best. By comparison to typical industry benchmarks, coupled with our review of the
region, and the subject’s trade area in particular, it would appear reasonable that a projected sales level of $400 to
$500 per square foot, on average, would be possible, or at least within the expected range for a project of this
caliber.


Sales/ SF
Indicator
Source Low - High
Ownership Forecasts & Existing Operations
Existing Mall Shop Sales Levels $ 280 - $ 300
Projection For In-Line Shops $ 525 - $ 550
Industry Benchmarks
ICSC Mall Index (National) $ 472 - $ 472
ICSC Mall Index (Northeast) $ 553 - $ 553
ICSC Mall Index (Mid-Atlantic) $ 593 - $ 593
C&W Survey of Competitive Centers

Fashion Centre at Pentagon City $ 731 - $ 901
Survey Median: $ 490 - $ 500

Survey Mean: $ 502 - $ 538
Implied in the conclusion of sales for the subject is the fact that we have also tried to consider the types of tenants
interested and/or committed to the subject property and their sales levels nationally. While this type of data does
not implicitly suggest that the subject would perform at these levels, it does provide an indication of the respective
chain’s expectations for sales performance at the property.
Finally, we have also considered current and budgeted leasing underway within the property itself. With average
achieved rents tracking at about $40.00 per square foot in the non-anchor/in-line shop areas, this would imply that
retailers perceive average sales levels achievable at Ballston Quarter to equal something in the range of $444 to
$500 per square foot (using rent-to-sales ratios of 8.0 percent to 9.0 percent). This range appears supportable in
comparison to the data presented from competing properties in the market.
On balance, we have estimated a current achievable sales level of around $400 to $500 per square foot for in-line
shops/non-anchor tenants at the subject property. We have broken down this estimate to allocate $460 per square
foot for enclosed mall shops, and $850 per square foot for food court tenants. The weighted average sales level for
the project, as calculated at the end of this subsection, is inclusive of all shops, restaurants, and so forth.
Major/Anchor Store Sales

The next subsection considers the anchor department store and major tenant sales potential for the subject. As
noted, the analysis is based on several factors, including ownership’s projections (if available), industry averages,
and tenant sales at competing centers.
Subject Property Tenant Sales History
The first consideration for major/anchor sales at the subject are the actual sales being achieved at Ballston Common
at this time. However, since Macy’s is separately owned, they do not report sales. In the absence of actual sales,
estimates have been made for each of these anchors. These estimates have been based on past knowledge of
management estimates regarding the store, along with sales at other units in the market. The following chart
summarizes this information.

ANCHOR TENANT SALES ($000)

Tenant Sq/Ft Annual SF Sales/SF Annual SF Sales/SF Annual SF Sales/SF
Macy's 148,353 $20,000 148,353 $134.81 $20,000 148,353 $134.81 $20,000 148,353 $134.81
Regal Cinemas 67,062 $4,135 67,062 $61.66 $3,354 67,062 $50.01 $3,454 67,062 $51.51
Sport & Health 32,605 $2,893 32,605 $88.73 $3,125 32,605 $95.83 $3,101 32,605 $95.11
CVS 11,593 $13,328 11,593 $1,149.62 $13,145 11,593 $1,133.90 $13,324 11,593 $1,149.31
Total/Average 259,613 $40,356 259,613 $155.45 $39,624 259,613 $152.63 $39,879 259,613 $153.61
As can be seen, major/anchor tenant sales range from $51.51 per square foot (Regal Cinemas), to $1,149.31 per
square foot (CVS). Overall, major/anchor tenant sales average around $153.61 per square foot.
Industry Average Sales (Anchor Stores)
We can also consider industry averages for the subject’s potential major/anchor sales following redevelopment.
For this, we have looked to various industry publications, as well as data extracted from 10-K reports of the
department store and big-box retailers.
Unlike the U.S. Mall Report, ICSC does not report per square foot sales for the department stores. Therefore we
compiled the following information from the annual reports of the selected department store chains. The reader is
cautioned that the information presented represents all stores for the individual chains whereas the ICSC data is
based on selected markets.
SELECTED DEPARTMENT STORE CHAINS - SALES PRODUCTIVITY

2015 Average Comparable Store Sales PSF
Total Total Square
No. Department Store Name # of Units Sales ($Mil) Feet (Mil) 2010 2011 2012 2013 2014 2015
1 Bon-Ton1 267 $2,718 20.4 $136 $133 $135 $130 $132 $131
2 Dillards 297 $6,596 50.5 $116 $121 $129 $130 $131 $130
3 J.C. Penney 1,021 $12,625 104.7 $153 $154 $116 $107 $113 $120
4 Kmart-Sears5 1,672 $25,146 207.9 $135 $149 $163 $167 $143 $121
5 Macy's 870 $27,079 141.9 $160 $162 $174 $186 $191 $191
6 Neiman Marcus2 41 $5,095 5.5 $466 $505 $535 $552 $579 $590
7 Nordstrom3 323 $14,095 28.6 $397 $431 $470 $474 $493 $507
9 Kohl's 1,164 $19,204 83.8 $231 $232 $231 $227 $226 $228
10 Target 1,792 $73,785 239.5 $286 $290 $308 $286 $302 $308
11 Wal-Mart4 3,907 $298,378 662.4 $410 $408 $428 $424 $424 $450
Survey Low: 41 $2,718 5.5 $116 $121 $116 $107 $113 $120
Survey High: 3,907 $298,378 662.4 $466 $505 $535 $552 $579 $590
Survey Mean: 1,135 $48,472 154.5 $249 $259 $269 $268 $273 $278
Survey Totals: 11,354 $484,720 1,545.2 Not Applicable
Weighted Average: 2,409 $87,490 376.2 $290 $293 $306 $302 $302 $312
Wtd. Average Excluding Wal-Mart: 1,285 $13,807 161.4 $201 $207 $215 $210 $211 $209
Wtd. Average Excluding Discounters: 1,086 $6,801 139.7 $160 $168 $172 $175 $170 $164
Source: Cushman & Wakefield Retail Industry Group, Company filings
Notes: $186,342.39 $93,353
(1) Bon-Ton GLA includes comparable stores only
(2) Comparable store sales include Neiman Marcus clearance centers
(3) Comparable store sales include Nordstrom Rack stores
(4) Wal-Mart figures include US discount department and supercenters only
(5) Kmart-Sears figures include US locations only
As illustrated, the selected department store and discount chains generated average sales of $278 per square foot
in 2015, and weighted average sales of $312 per square foot. These figures, however, are somewhat skewed by

the inclusion of discount department stores such as Walmart, Kohl’s, and Target. Excluding these discounters, the
traditional departments had an overall weighted average sales of $164 per square foot.
Competing Properties (Department Stores)
The following chart presents sales information for other Macy’s units in the Greater Washington D.C. market area,
which are at competing projects.
Macy's Sales Comparisons

GLA/ Sales/ Store ($Mil) Sales/ SF
Square Feet Indicator Indicator
Source Low - High Low - High Low - High
Subject Property 148,353 - 148,353 $ 20.0 - $ 25.0 $ 135 - $ 169
Confidential Washington D.C. 253,314 - 253,314 $ 66.3 - $ 66.3 $ 262 - $ 262
Confidential Washington D.C. 260,504 - 260,504 $ 31.0 - $ 31.0 $ 119 - $ 119
Survey Median: 253,314 - 253,314 $ 31.0 - $ 31.0 $ 135 - $ 169

Survey Mean: 220,724 - 220,724 $ 39.1 - $ 40.8 $ 172 - $ 183
Conclusion (Major/Anchor Tenants)
Based on the analysis herein, we can forecast a potential sales estimate for the subject property’s major/anchor
tenants. By comparison to typical industry benchmarks, coupled with our review of the region, and the subject’s
trade area in particular, we have considered sales estimates for the subject’s major/anchor tenants along the lines
of their existing performance, with Macy’s anticipated to have sales in a range of $25.0 million upon completion.
Subject Property Sales Conclusion

Based upon the total analysis herein, we have estimated potential sales for the subject property. The following chart
presents a summary of current sales projections:
Subject Property Sales Projection
Property Forecasted Forecasted Total Effective Sales/ % of

Component Sales/SF Vacancy Area Sales Sales * Sq/Ft * Total
Major/Anchor Stores
Macy's $ 168.52 0.0% 148,353 SF $ 25,000,000 $ 25,000,000 $ 168.52 16.0%
Regal Cinemas $ 59.65 1.5% 67,062 SF $ 4,000,000 $ 3,940,000 $ 58.75 2.5%
Sport & Health $ 96.61 1.5% 32,605 SF $ 3,150,000 $ 3,102,750 $ 95.16 2.0%
CVS $ 1,155.87 1.5% 11,593 SF $ 13,400,000 $ 13,199,000 $ 1,138.53 8.4%
Subtotal $ 175.45 259,613 SF $ 45,550,000 $ 45,241,750 $ 174.27 28.9%
Non-Anchor Stores
In-Line Shops $ 460.00 5.0% 239,899 SF $110,353,540 $104,835,863 $ 437.00 67.1%
Food Court $ 800.00 5.0% 8,233 SF $ 6,586,400 $ 6,257,080 $ 760.00 4.0%
Subtotal $ 471.28 248,132 SF $116,939,940 $111,092,943 $ 447.72 71.1%
Total Center Sales $ 320.02 507,745 SF $162,489,940 $156,334,693 $ 307.90 100.0%

* Effective sales reflect vacancy/credit loss reduction.
** Alternatively, non-anchor/mall shop sales are forecast to equate( 245.6% ) of major/anchor store sales.

Subject Sales Allocation

Based upon the projected sales, we have forecast aggregate mall shop sales to be approximately $111.09 million
at the subject property upon completion, or approximately 70.92 percent of the mall’s total sales of $156.64 million.
Major/anchor store sales are projected to be about $45.55 million, or 29.08 percent of total property sales. Stated
another way, mall shop sales will comprise approximately 243.89 percent of anchor store sales. The following table
summarizes total sales forecasted at the property:
SUBJECT'S SALES ALLOCATION

% of
Component Sales Total
Total Anchor Sales $ 45,550,000 29.1%
Mall Shop Sales $ 111,092,943 70.9%
Total Property Sales $ 156,642,943 100.0%
Mall Shop/Anchor Ratio 243.9%
As will be seen, the subject’s projected sales ratios are out of the typical range expected for a regional mall, but not
necessarily unusual for a more urban-oriented project. This is due, in large part, to the higher amount of food and
restaurant offerings included in the development, as well as the single-department store alignment for the center.
Based upon our experience with other malls, typical mall shop sales ratios tend to fall between 75.0 and 125.0
percent of department store/anchor store sales. It is not uncommon, however, for higher-end, fashion-oriented
centers, or centers with a high ratio of mall shop GLA, to fall toward the upper-end of the range.
The subject’s configuration tends to fall within this ladder categorization, with a higher degree of non-anchor GLA.
It’s somewhat hybrid approach to development—with lifestyle elements substantial exterior shop space (and
several major tenants as opposed to several department stores)—also contributes to the higher ratio of sales
attributable to non-anchor stores. While the subject’s hybrid urban/regional/lifestyle center approach to
development may be difficult to compare with more traditional malls, the subject’s sales allocation, appears to be
mostly reasonable in light of these general parameters, the higher percentage of non-anchor shops, and the street
fronting shop components.
Provided in the following chart is a summary of actual sales performance at a number of malls and regional centers
with which we have had direct experience. Among the survey, the average mall shop ratio (mall shop GLA to total
GLA) is 36.70 percent. Furthermore, it is shown that mall shop sales, as a ratio of total anchor store sales, average
about 120.28 percent.
SALES RATIO COMPARISON / MALL SHOP GLA COMPARISON
Center Mall Shop Mall Shop Total Mall Shop Mall Shop Mall Shop
Center Size GLA GLA GLA Ratio Sales Sales Sales/Total Sales/Anchors
Under 500,000 SF 385,254 187,766 49.93% $ 129,179,037 $ 73,504,079 53.80% 126.19%
500,001 to 750,000 SF 638,165 243,730 38.50% $ 153,436,704 $ 74,825,320 46.92% 96.42%
750,001 to 1,000,000 SF 874,232 278,173 31.83% $ 127,124,250 $ 62,871,821 50.27% 111.02%
Over 1,000,000 SF 1,316,825 438,849 33.07% $ 397,792,974 $ 214,696,040 53.32% 130.59%
Survey Median: 995,699 325,127 33.59% $ 195,280,000 $ 102,216,940 54.65% 120.52%
Survey Average: 967,453 336,300 36.70% $ 266,787,673 $ 142,193,349 51.69% 120.28%
Survey Total/Avg.: 107,387,274 37,329,329 34.76% $ 29,613,431,711 $ 15,783,461,775 53.30% 114.13%
Alternatively, mall shop sales account for 53.3 percent of total mall sales, on average.

What is not reflected in detail above are the higher-end centers that have a typically higher mall shop sales-to-
department store sales ratios. As noted, these centers typically have higher ratios, as exhibited by the higher end
of the range. The same can be said at a number of lifestyle centers that we are familiar with—projects that typically
have fewer department stores than traditional malls, and more specialty shops and restaurants that drive sales.
Certainly, the number of department stores and the ratio of mall shop GLA to total GLA has an important bearing
on the relationship. Nonetheless, we see that the “leverage effect” of anchor sales on shop sales is generally in the
75.0 to 125.0 percent range.
At the subject, mall shop GLA will account for 48.87 percent of total GLA, which is higher than the average indicated
in the chart (34.76%). As noted, the subject will also include a far greater number of exterior facing shops and
restaurant and food offerings due to its urban orientation. Thus, with a higher amount of mall shop and restaurant
and exterior facing GLA, it would be expected that the subject’s non-anchor sections would account for a higher
ratio of sales, similar to others among our survey.
Based on the comparisons, the subject’s sales allocation, as projected, therefore appears more reasonable in light
of these general parameters.
Market Share Analysis

Following our tenant sales analysis and forecast, we can test the reasonableness of our estimates using share of
market analysis.
To estimate the subject’s potential market share of trade area expenditure potential, we have developed a model
that calculates the expenditure potential of the subject’s market area, as well as the potential trade area. This
expenditure potential is primarily comprised of the resident population base and its GAFO expenditure potential.
Trade Area Expenditure Potential

On the basis of detailed population, income, and spending pattern analysis, estimates of household expenditures
for shoppers’ goods merchandise have been developed for the trade area. Shoppers goods, or department store
type merchandise (DSTM), comprise the overwhelming bulk of goods and products carried in regional malls and
department stores. Specifically, shoppers’ goods expenditure potentials represent the dollar amounts available for
the merchandise that is primarily sold in the following store types:
 General merchandise stores including department and other stores;

 Apparel and accessory stores;
 Furniture and home furnishing stores, and
 Other miscellaneous shoppers’ goods stores.
These categories are also commonly referred to as GAFO goods.
DSTM or GAFO expenditure potential measures the ability of the market to purchase department store type goods.
This expenditure potential is typically based upon current average household or per capita income levels in the
market, and the estimated share of that income that has historically been spent on department store type
merchandise.
Retail sales potential of a trade area is determined after estimating the percent of total aggregate income spent on
GAFO goods. The Department of Commerce tabulates the total GAFO sales by city, county and state. Taking these
figures for the pertinent area and dividing them against total aggregate income yields the percentage of total
aggregate income spent on GAFO goods within an area. For 2015, the United States average is approximately
14.0 percent; in Virginia, Experian Marketing Solutions calculates the percentage to be 12.70 percent.

Nationally, it is estimated that 75.0 to 80.0 percent of specialty and in-line tenant regional shopping center sales
are of shoppers’ goods. Experian Marketing Solutions, Inc. produces a Retail Expenditure Potential Report, the
results of which were summarized previously on our Summary of Demographic Statistics. This data shows that
GAFO sales, as a percent of total expenditure potential, is approximately 9.95 percent in the primary trade area.
By comparison, the ratio is shown to be 9.80 percent in Arlington County, and 11.11 percent for the greater
Washington D.C. region.
This analysis relies on the 9.95 percent average for the primary trade area.
Market Share Calculation

With these GAFO calculations in mind, we can test the subject's sales potential on the basis of its implied market
share of GAFO expenditure potential within the primary trade area.
To estimate market share, the amount previously calculated for center sales is divided by the trade area GAFO
potential. The GAFO potential has been estimated to be approximately 20.00 percent of the total trade area's
aggregate income. Total center sales are typically reduced by non-GAFO center sales (i.e. restaurant, convenience
and service establishments) which range from 15.0 to 25.0 percent industry-wide. This number has been derived
from conversations we had with market research personnel at some of the nation's largest retail development
companies. In addition, the ICSC reports that, GAFO sales account for approximately 78.0 percent of all mall sales
as reported in their property data base, Monthly Mall Merchandise Index.
In our analysis, we identified certain non-GAFO categories (entertainment, restaurants) and deducted a
contingency of 20.00 percent for other non-GAFO items (miscellaneous retail, etc.). These calculations can be seen
on the following chart.
The model also presumes that 15.00 percent of the subject’s sales will be inflow from outside of the primary market,
which, while low by industry standards, we feel is a reasonable estimate given the higher-density/urban nature of
the subject’s trade area. In this sense, we believe the subject’s capture rate of these secondary and tertiary areas
is more limited given the transportation, access, and linkages serving the property, coupled with the significant
competition residing outside of the subject’s primary trade area. This estimate also considers the hybrid
configuration of the project, which will include a significant amount of exterior shops, which may tend to serve a
more localized trade area in comparison to major super-regional malls that can draw from larger geographic areas.
Below is a summary of the market share calculation.

MARKET SHARE ANALYSIS

SUBJECT SALES VOLUME
Major/Anchor Stores Area Sales
Macy's 148,353 $25,000,000
Regal Cinemas 67,062 $4,000,000
Sport & Health 32,605 $3,150,000
CVS 11,593 $13,400,000
Total Anchors 259,613 $45,550,000
Mall Shops : 248,132 $111,092,943
Total Center Sales: 507,745 $156,642,943
SUBJECT GAFO SALES

Total Subject Sales: $156,642,943
Less: Cinema Sales ($4,000,000)
Less: Non-GAFO Sales (%) at 20.00% ($22,218,589)
Total Subject GAFO Sales: $130,424,354
Less: Sales Inflow (%) at: 15.00% ($19,563,653)
Total Primary Market GAFO Sales: $110,860,701
TRADE AREA GAFO ANALYSIS

Number of Households 115,538
x Average Household Income $137,492
Trade Area Aggregate Income: $15,885,550,696
GAFO Potential (%) at 9.95% $1,580,327,580
MARKET SHARE CALCULATION

Total Subject GAFO Sales: $110,860,701
Trade Area GAFO Potential: $1,580,327,580
Market Share of Primary Trade Area GAFO Potential: 7.02%
As shown, based upon the forecast sales for the property, a current market share of primary trade area GAFO
potential would therefore be calculated to be about 7.02 percent based on 2015 population and household statistics
provided by Experian Marketing Solutions, Inc.. For a center such as Ballston Quarter, this capture ratio is
considered to be reasonable.
For other properties for which we have direct insight, market share of GAFO potential tends to range from 8.0 to
25.0 percent of the primary trade area. Thus, for the predominantly traditional regional centers for which we have
information, this necessary capture ratio is considered to be below the expected range, which we believe adds to
the reasonableness of the projections and capture rate necessary to achieve the sales forecast for the property.
Obviously, this ratio is impacted dramatically by the make-up of each market and competing centers.
On balance, we view the subject’s projected sales performance and market share capture ratios to be reasonable
and supportable based upon share of market analysis and our comparison to competing projects.

We have analyzed the retail trade history and profile of the subject's region and primary trade area in order to make
reasonable assumptions as to the continued and/or future performance of the property. A metropolitan and
locational overview has been presented, which highlighted important points about the study area. In addition,
demographic and economic data specific to the trade area have also been presented. Marketing information relating
to these sectors was presented and analyzed in order to determine patterns of change and growth as it impacts
Ballston Quarter. Next, we discussed the subject's retail sales history, along with forecasts for the future. The data
is useful in giving quantitative dimensions of the total trade area, while our comments serve to provide qualitative
insight into the market. A compilation of this data provides the basis for our projections and forecasts particular to
the subject property. The following summarizes our key conclusions.
 The subject enjoys a relatively visible, accessible location in the heart of the Ballston District of Arlington County/
Washington D.C. The region is expected to maintain an above-average growth pattern benefiting from a
relatively diverse economy (though heavily reliant on government), and a general perception that the region
has a good quality of life. The local area has fairly good vehicular access, with regional accessibility provided
by the major arterials that connect Ballston with Interstate 66. Moreover, the subject has good exposure and
access along Wilson Boulevard, the primary commercial arterial for the market. As well, surrounding office
development, medium-to-high-density residential development, and proximity to the Ballston-MU Metro Station
are viewed as positive attributes of the property. In this sense, the subject appears to be well-located to serve
the primary core of residents in the local area, as well as the numerous office users in the Ballston area.
 According to Reis, the Suburban Virginia Retail market has been performing better since 2011, mainly as a
result of improved vacancy levels and continued demographic growth creating demand for retail goods and
services. Over the near term, new construction activity is expected to trail absorption, resulting in a continued
decline in vacancy levels. In fact, over the next five years, Reis projects that vacancy will decline from 4.90 to
4.70 percent, while asking rental rates are expected to increase from $31.99 per square foot to $35.05 per
square foot. Mostly similar trends are anticipated in the subject’s submarket area, though, as discussed, the
net absorption figures may be impacting forecasts in the near-term due to reclassification of space and reduced
retail inventories in the Reis and CoStar data. Given the current vacancy rate in the market, coupled with the
fairly strong occupancy levels at competing centers, we believe the subject is poised to capture its fair share of
absorption within the market into the foreseeable future.
 The existing trade area structure is largely characterized by urban and regional mall projects, lifestyle centers,
larger community/power centers, neighborhood shopping centers, and numerous strip center projects. These
properties are generally well-maintained and have predominantly high occupancy rates. When compared
against these projects and their location relative to Ballston Quarter, the subject property appears to have a
fairly secure position within this section of the region that should enable it to capture and maintain its fair share
of expenditure potential due to its major/anchor alignment, planned merchandising mix, quality of construction,
environment, accessibility, and entertainment component.
 Trade area boundaries have been set based upon the location of existing retail development, conforming with
drive-time capabilities, and location convenience of the subject site. These observations have been used to
delineate the primary trade area based upon a radius-based survey around the property (3.0-mile radius). In
view of the trade area demographics, the subject should benefit from a relatively stable-to-average trending
trade area population base that is expected see annual growth of 0.67 percent per year into the foreseeable
future. Household formation is projected to increase at a rate of 0.87 percent per annum for the primary trade
area. Income levels are generally above regional averages, and slightly below the county norm, with growth of
3.58 percent per annum projected into the future.

 With its location and historic retail use, the subject site appears relatively well positioned to serve the growing
needs of the population base around Rosslyn-Clarendon-Ballston, and particularly those more densely
populated communities surrounding the Ballston area, up and down Wilson Avenue and Glebe Road. With this
in mind, we believe the subject property is capable of capturing and maintaining its fair share portion of resident
expenditure potential within this section of the market (the subject’s primary trade area).
 Overall, the subject, as proposed for redevelopment, will be viewed as a good quality and fairly uniquely
positioned urban/regional center for its market. Upon completion, the center will be in excellent condition, and
provide residents of the trade area with a quality regional shopping center experience that has been lacking
since the decline of the subject’s existing mall, over time. With its location, accessibility, tenant mix,
major/anchor alignment, lifestyle and entertainment component(s), appearance, and merchandising, Foothills
Mall should become a viable, competitive center for the region. As of this writing, we see a low-to-moderate
near-term threat of new competition being introduced into the market that would directly compete with the
subject, with less of a threat of a traditional regional mall being built in the subject’s trade area in the foreseeable
future. This would appear to bode well for the subject, its potential absorption of space, and the timing of its
completion.
On balance, it is our opinion that, with competent management, aggressive marketing, and a responsive
maintenance program, the subject should become a viable retail entity within the Ballston/Arlington County market
area and capture/maintain a fair share of market expenditure potential. Our outlook for the area is generally positive,
with stable-to-average prospects for population and income growth. Overall, we see moderate-to-stable potential
for appreciating real estate values.
Marketability and Marketing Period

In this subsection, we consider the potential market appeal, marketability, and demand for a center like the subject
in light of the current real estate investment market. As discussed in this report, the subject involves (or will involve)
an enclosed 3-level retail mall anchored by 4 major/anchor stores (including one department store), for a combined
GLA of approximately 507,745 square feet. Upon completion, the property will be excellent in condition and feature
a strong tenant mix.
We have considered the potential market demand and investor risk in our analysis and valuation of the subject
property through our selection of investment parameters, growth rates, and various assumptions employed. In our
analysis, we have attempted to reflect current market conditions and investor criteria. Most of the shopping center
properties that have been offered for sale at a "reasonable" price, have sold within 12 months exposure to the open
market or less. Properties for which seller expectations of value exceed the market's perception have required more
extended marketing periods, and have generally sold below the initial asking price, or have been pulled off the
market. A "reasonable" price is defined as that price which offers a sufficient return to the investor relative to the
demand for and the risk associated with the property. These returns vary widely in the current market depending
on the particular investment, its occupancy level, the surrounding demographics, and upside or downside of the
income stream.
Upon completion, the subject will be characterized as average quality, excellent condition urban regional center
that, along with the other centers in the area, will represent a strong barrier to future competitive development. The
subject will contain a fairly typical anchor alignment (Macy’s), as well as several unique major/anchors, restaurants,
and cinemas. Moreover, the anticipated sales volumes for tenants are generally consistent with chain averages
and/or competing projects, with most indications providing evidence of support for the redevelopment.
The subject's primary trade area has a current population of approximately 261,137 people, and is projected to
experience stable-to-average population and household growth into the foreseeable future. In addition, the subject
is situated proximate to the broad majority of residents in the Ballston market, at a location that has long been a

major retail hub for the market. In all, potential future growth in the region, coupled with the subject’s perceived
future in the market, should provide sufficient investor interest in the property (upon completion and stabilization).
On balance, we believe that, if the subject were offered for sale, it would represent a good investment opportunity
that would attract regional and national investors interested in primary markets. Based on the above, it is our
estimate that a market sale of the subject property should be realized within 9 months exposure on the market. In
it’s as-is state, exposure time could potentially be longer; estimated to be 12 months.

BALLSTON QUARTER SITE DESCRIPTION
Property Analysis
Site Description
Location: 4238 Wilson Boulevard

Arlington, Arlington County, Virginia 22203
The subject property is located in the southeasterly quadrant of Wilson Boulevard and N.
Glebe Road in Arlington, Virginia; part of the greater Washington D.C. CBSA.
Land Area: Ballston Quarter is situated on an assemblage totaling 6.50 acres. The subject property is
(and will be) anchored by Macy's, Regal Cinemas, Sport & Health and CVS. The Regal
Cinemas, Sport & Health, and CVS units are owned by mall ownership and leased to the
respective retailers. Macy's owns their store and underlying land and, as such, is excluded
from the subject of this appraisal. However, to the extent that they provide an economic
contribution to the operation of the mall, we will recognize and address such in our
appraisal. Thus the portion of the property which is the subject of this appraisal totals
approximately 4.99 acres as detailed below:
LAND AREA SUMMARY

Site Area Site Area
Parcel Owned (Sq/Ft) (Acres)
14-059-044 Macy's 65,913 SF 1.513 AC
14-059-035 FC Ballston Commons LLC x 133,233 SF 3.059 AC
14-059-036 FC Ballston Commons LLC x 43,156 SF 0.991 AC
14-059-028 Ballston Acquisition Company LLC x 40,935 SF 0.940 AC
Total Owned Site Area 217,324 SF 4.989 AC
Total Center Site Area 283,237 SF 6.502 AC
Source: Arlington County Assessment Records
As noted in the Introduction section of the report, several air space parcels are situated
above sections of the subject assemblage.
Shape: Irregularly shaped
Topography: Level at street grade
Frontage: The subject property is considered to have average frontage. The frontage dimensions are
listed below:
Wilson Boulevard: 800 Feet (approximate)
N. Glebe Road: 975 Feet (approximate)
N. Randolph Street: 890 Feet (approximate)

Access: The subject property is considered to have average-to-good access.
Visibility: The subject property is considered to have average-to-good visibility.
Utilities: All necessary utilities are available to the site, including water, sewer, electric, gas, and
telephone service.
Site Improvements: Site improvements include asphalt paved parking areas, curbing, signage, landscaping,
yard lighting and drainage.
Soil Conditions: We were not given a soil report to review. However, we assume that the soil's load-bearing
capacity is sufficient to support existing and/or proposed structure(s). We did not observe
any evidence to the contrary during our physical inspection of the property. Drainage
appears to be adequate.
Land Use Restrictions: We were not given a title report to review. We do not know of any easements,
encroachments, or restrictions that would adversely affect the site's use. However, we
recommend a title search to determine whether any adverse conditions exist.
As previously discussed, there are several air space parcels situated above portions of the
subject assemblage, which impact development and land use. Additionally, there are
reported to be operating agreements with the adjacent city parking garage and the non-
owned Macy’s.
Flood Zone Description: The subject property appears to be located in Flood Zone X (Areas determined to be
outside the 500 year flood plain) as indicated by FEMA Map 51013C 0038C, dated August
19, 2013.
The flood zone determination and other related data are provided by a third party vendor
deemed to be reliable. If further details are required, additional research is required that is
beyond the scope of this analysis.
Wetlands: We were not given a wetlands survey to review. If subsequent engineering data reveal the
presence of regulated wetlands, it could materially affect property value. We recommend
a wetlands survey by a professional engineer with expertise in this field.
Hazardous Substances: We observed no evidence of toxic or hazardous substances during our inspection of the
site. However, we are not trained to perform technical environmental inspections and
recommend the hiring of a professional engineer with expertise in this field.
Overall Site Utility: The subject site is functional for its current intended use.
Location Rating: Good
Comments: Overall, the subject site is large enough in size to accommodate the existing (and planned)
improvements. Moreover, it is well configured and has a relatively level topography. The
site's access and visibility are also considered good. Overall, we conclude that the site is
conducive for its existing (and planned) retail use.

The subject site is relatively level at street grade. The parking areas are accessed via curb
cuts off of Glebe Road and Randolph Road, with ample off-street parking available.
Considering these features, the site appears to be functional for its current and intended
use.

TAX MAP

TAX MAP

FLOOD MAP

LEASING PLAN – CONCOURSE LEVEL

LEASING PLAN – LEVEL 1



BALLSTON QUARTER IMPROVEMENTS DESCRIPTION
Improvements Description
The following description of improvements is based on our physical inspection of the property, our review of plans
and specifications for the redevelopment, and our discussions with the property’s owner’s representative.
GENERAL DESCRIPTION
General Overview: In its present state, Ballston Common consists of a three-story urban regional mall
containing approximately 574,903 square feet of total gross leasable area (GLA).
The property is anchored by Macy’s, Regal Cinemas, Sport & Health, and CVS.
The former Macy’s Home and Men’s store is vacant (112,798 SF). Improvements
were constructed in 1986, with various renovations having occurred over the years.
Currently, the center is considered to be of average quality, and has been
maintained in average condition.
In early-2016, ownership closed a majority of the enclosed mall to prepare for

redevelopment. The renovation and redevelopment of Ballston Common will
include new retail space that will be incorporated within the first two levels of a new
residential tower. This component will be built on-site of the former Macy’s Home
and Men’s store, which was acquired by ownership in 2013 and remains vacant.
When complete, in 2018, the re-positioned retail portion of the center will be
rebranded as Ballston Quarter.
Gross Leasable Area: Upon completion, Ballston Quarter will contain a total of 507,745 square feet of
gross leasable area. The subject property is (and will be) anchored by Macy's,
Regal Cinemas, Sport & Health and CVS. The Regal Cinemas, Sport & Health, and
CVS units are owned by mall ownership and leased to the respective retailers.
Macy's owns their store and underlying land and, as such, is excluded from the
subject of this appraisal. However, to the extent that they provide an economic
contribution to the operation of the mall, we will recognize and address such in our
appraisal. Therefore, the owned GLA of the subject is calculated to be 359,392
square feet as presented below:
RETAIL GLA SUMMARY

Component Owned Area % of Total
Macy's 148,353 SF 29.22%
Regal Cinemas x 67,062 SF 13.21%
Sport & Health x 32,605 SF 6.42%
CVS x 11,593 SF 2.28%
Subtotal-Major/Anchor GLA 259,613 SF 51.13%
In-Line x 239,899 SF 47.25%
Food Court x 8,233 SF 1.62%
Subtotal-Mall Shop GLA 248,132 SF 48.87%
Total Center GLA 507,745 SF 100.00%
Total Owned GLA 359,392 SF 70.78%

Gross Leasable Area: 507,745 SF (total)
359,392 SF (owned)
Year(s) Built: 1986
Year(s) Renovated: 2016/2017
Year(s) Expanded: 1999 and 2016/2017
Number of Stories: 3
Land To Building Ratio: 0.43 to 1
CONSTRUCTION DETAIL
Basic Construction: Structural steel with composite decking
Foundation: Poured concrete slab
Framing: Structural steel with masonry and concrete encasement
Floors: Concrete poured over a metal deck
Exterior Walls: Brick, stone panels, and curtain wall with some exterior insulated finish system
(EIFS) above roof
Roof Type: Flat with parapet walls
Roof Cover: Thermo Plastic Roof Membrane (TPO) with new rigid insulation will be installed
over the existing roof
Windows: Double glazed insulated glazing unit (IGUs) in gasketed aluminum framed windows
and window wall
Pedestrian Doors: Glass, wood and metal
MECHANICAL DETAIL
HVAC: HVAC is provided by VAV and VRV system
Plumbing: Water and sanitary sewer are master-metered within the property. The plumbing
system is assumed to be adequate for existing use and in compliance with local
law and building codes.
Electrical Service to all tenants is through a common distribution system. Energy is

purchased by mall ownership and re-sold to the individual tenants at retail rates.
This result in a profit center to ownership. All electric work is assumed to be in
accordance with local law and building codes.
Emergency Power: The building has a back-up generator
Vertical Transportation: The building contains two sets of escalators, four passenger elevators, and three
freight elevators. In addition, Macy’s has their own escalators and elevators.

The four existing passenger elevators serve all levels of the mall (Concourse
through Level 3) and all levels of the adjacent garage (Concourse through Level 8).
The 3 existing service elevators serve all levels of the mall. All elevators will be
upgraded during redevelopment.
As well, new vertical transportation improvements will include: one new passenger
elevator will be added, serving all levels of the mall; one new passenger elevator
serving Levels 1 and 2 will be added; one passenger jump elevator for mall Level
3 to Garage Level 8/Washington Capitals Iceplex Training Facility will be added;
one new service elevator serving all levels of the mall will be added; and one new
service elevator serving the Concourse Level through Level 2 will be added.
Fire Protection: 100% sprinklered
Security: Exterior monitors
INTERIOR DETAIL
Floor Covering: Mix of sealed concrete, porcelain tile, carpet, wood decking, and ceramic tile
flooring.
Walls: Drywall
Ceilings: Mix of open/exposed, smooth finish skim-coat, painted, and metal panel. Ceilings
in the individual tenant spaces vary, but include (or will include) drop acoustical tile,
painted drywall, and exposed truss work.
Lighting: Lighting is provided by fluorescent and incandescent fixtures.
Store Fronts: Store fronts will generally include mix of flush and "pop-out" type, with all reflecting
the most recent tenant designs for the respective chain(s).
Tenant Rest Rooms: Each tenant space has a rest room facility.
Public Rest Rooms: The property has a set of public restrooms on each of the retail levels. Additional
restrooms are found in the anchor stores.
SITE IMPROVEMENTS
Parking: We are advised that the property contains approximately 3,300 garage parking
spaces in the adjacent structure, reflecting an overall parking ratio of 6.50 spaces
per 1,000 square feet of gross leasable area. This somewhat higher ratio is due to
the inclusion of parking for some of the offices and ice complex, whose building
areas are not included in the calculation. Overall, the parking appears to adequately
support the existing (and proposed) users, with a variety of linkages into the retail
component of the property.
Additional below-grade parking will be added to the property when the Macy’s
Home and Men’s store is demolished in favor of two levels of retail shops (included
in this appraisal) along with a high-rise multi-family residential tower (not part of this
appraisal).

Onsite Landscaping: The site is landscaped with a variety of trees, shrubbery and grass.
Other: Site improvements include asphalt paved parking areas, curbing, signage,
landscaping, yard lighting and drainage.
PERSONAL PROPERTY
Personal property was excluded from our valuation.
SUMMARY
Condition: Excellent (upon completion)
Average (as is)
Quality: Average-to-good (upon completion)
Average (as is)
Property Rating: After considering all of the physical characteristics of the subject, we have
concluded that this property has an overall rating that is good, when measured
against other properties in this marketplace.
Roof & Mechanical We did not inspect the roof nor did we make a detailed inspection of the mechanical
Inspections: systems. The appraisers are not qualified to render an opinion regarding the
adequacy or condition of these components. The client is urged to retain an expert
in this field if detailed information is needed.
Actual Age: 29 years
Effective Age: 10 years (upon completion)
Expected Economic Life: 50 years
Remaining Economic Life: 40 years (upon completion)
CAPITAL EXPENDITURES
Known Costs: As part of the redevelopment, there are a number of planned capital expenditures
that would have an impact on the subject property, as-is.
PHYSICAL DETERIORATION
Cost to Cure: Curable physical deterioration refers to those items that are economically feasible
to cure as of the effective date of the appraisal. One category of physical
deterioration is deferred maintenance and is measured as the cost repairing or
restoring the item to new or reasonably new condition. We have not been provided
with a capital expenditure plan or an engineering report that would identify specific
costs required to repair deficiencies at the subject property.
During our inspection, we did not notice any apparent physical deterioration that
would require immediate repair, though it has been noted that the mall has been
maintained in average condition and is in need of renovation.

FUNCTIONAL OBSOLESCENCE
Description: There is no apparent functional obsolescence present at the subject property.
EXTERNAL OBSOLESCENCE
Description External obsolescence is the adverse effect on value resulting from influences
outside the property. External obsolescence may be the result of market softness,
proximity to environmental hazards, or other undesirable conditions, spikes in
construction costs, cost estimates that don’t properly reflect changes in the local
market, the lack of an adequate labor force, changing land use patterns, or other
factors.
Based on a review of the location of the subject as well as local market conditions,
external obsolescence is estimated at 0.00% percent.

BALLSTON QUARTER REAL PROPERTY TAXES AND ASSESSMENTS
Real Property Taxes and Assessments

Current Property Taxes
The subject property is located in the taxing jurisdiction of the Arlington County, and the assessor’s parcel
identification numbers are shown in a subsequent chart. Taxes are levied against all real property in this locale for
the purposes of providing funding for various municipal services and schools. According to the local tax collector’s
office, taxes are current. A summary of the assessment and taxes for the subject property are presented below:
PROPERTY ASSESSMENT INFORMATION

Assessing Authority: Arlington
Current Tax Year: 2015
Assessment Ratio (% of market Value): 100%
Are taxes current? Taxes are current
Is there a grievance underway? Not to our knowledge
The subject's assessment and taxes are: At or near market levels
ASSESSMENT INFORMATION
Assessed Value 14-059-035 14-059-036 14-059-028 Totals

Land: $13,192,100 $5,040,600 $24,963,700 $43,196,400
Improved Assessment $30,379,300 $11,814,100 $0 $42,193,400
Total: $43,571,400 $16,854,700 $24,963,700 $85,389,800
Personal Property: $0 $0 $0 $0
Taxable Assessment: $43,571,400 $16,854,700 $24,963,700 $85,389,800
Tax Rate $12.216 $12.068 $11.610 $12.009
Tax Liability $532,253.46 $203,399.04 $289,828.54 $1,025,481.04
Assessor's Implied Market Value $85,389,800
TAX LIABILITY
Total Tax Rate (Per $1,000 Assessed Value) $12.009
Total Property Taxes $1,025,481.04
Building Area ( SF ) 359,392
Property Taxes per Square Foot $2.85
As exhibited, total taxes for the property are currently $1,025,481, or $2.85 per square foot. The assessed value of
the property is $85.39 million. The mill rate is $12.009 per $1,000 of assessed value. A detail of the subject’s
assessment is shown in the following chart.
Site Site
Area Area Land Improved Total Taxable Tax Tax
Lot Number (Acres) (Sq/Ft) Assessment Assessment Assessment Assessment Rate Liability
Real Property
14-059-035 FC Ballston Commons LLC 3.059 133,233 $13,192,100 $30,379,300 $43,571,400 $43,571,400 1.22157% $532,253.46
14-059-036 FC Ballston Commons LLC 0.991 43,156 $5,040,600 $11,814,100 $16,854,700 $16,854,700 1.20678% $203,399.04
14-059-028 Ballston Acquisition Company LLC 0.940 40,935 $24,963,700 $0 $24,963,700 $24,963,700 1.16100% $289,828.54
- Subtotal 4.989 217,324 $43,196,400 $42,193,400 $85,389,800 $85,389,800 1.20094% $1,025,481.04
Macy's
14-059-044 Macy's 1.513 65,913 $11,270,600 $340,500 $11,611,100 $11,611,100 1.16100% $134,804.82
Grand Total 4.989 217,324 $43,196,400 $42,193,400 $85,389,800 $85,389,800 1.20094% $1,025,481.04

BALLSTON QUARTER REAL PROPERTY TAXES AND ASSESSMENTS
Ownership Budget
In ownership’s operating expense budget, a first year tax expense of $2,014,526 is projected, which equates to
$5.61 per square foot of included/owned GLA (excluding Macy’s). We are advised that this level of expense has
been estimated in conjunction with their tax advisor and in preparation for the tax increment financing agreement
with the county. The basis for the estimate was founded in the assessed values of other projects in the market.
Tax Comparable Analysis

To determine if the existing and budgeted taxes on the property are reasonable, we have examined the actual tax
burdens of similar properties in the market. These are illustrated in the table below.
REAL ESTATE TAX COMPARABLES
Land Building Year Assessment Land Imps A.V. Taxes/

No. Property Name & Location Jurisdiction Area (AC) Area (SF) Built Stories Year PSF PSF PSF Tax Rate Total Taxes Sq/Ft
S Subject Property 4.99 359,392 1986 3 2015 $198.76 $117.40 $237.60 1.2009% $1,025,481 $2.85
4.99 359,392 Per Budget $198.76 $346.56 $466.75 1.2009% $2,014,526 $5.61
1 Market Commons Clarendon Arlington County, VA 6.25 234,571 1995 1-2 2016 $136.13 $351.05 $405.42 1.0425% $991,399 $4.23
2 Shops at Wisconsin Place Montgomery County, MD 2.55 117,202 2009 1-2 2016 $215.59 $275.59 $479.92 1.1538% $649,003 $5.54
3 Mazza Gallerie Washington DC 2.61 293,170 1975 2-3 2016 $263.06 $237.28 $339.30 1.8425% $1,832,735 $6.25
4 Fashion Centre at Pentagon Arlington County, VA 15.03 1,080,200 1989 2-3 2016 $102.25 $583.23 $645.20 1.1160% $7,777,904 $7.20
5 Pentagon Centre Arlington County, VA 16.80 371,900 1994 1-2 2016 $88.25 $131.21 $304.87 1.1160% $1,265,354 $3.40
6 D.C. USA Washington DC 3.46 512,707 2009 2-3 2016 $61.51 $287.15 $305.25 0.9212% $1,441,660 $2.81
STATISTICS
Low: 2.55 117,202 1975 $61.51 $131.21 $304.87 $649,003 $2.81
High: 16.80 1,080,200 2009 $263.06 $583.23 $645.20 $7,777,904 $7.20
Average: 7.78 434,958 1995 $144.47 $310.92 $413.33 $2,326,343 $4.91
As exhibited, the properties surveyed reflect real estate taxes ranging from $2.81 per square foot to $7.20 per
square foot, with survey mean of approximately $4.91 per square foot of gross leasable area.
Alternatively, the tax comparables show assessed values ranging from $304.87 to $645.20 per square foot, with an
average of about $413.33 per foot. One of the key variances involves land value, as well as quality of building and
tax jurisdiction. Market Commons and Fashion Centre are each located in the subject’s jurisdiction and bracket the
budgeted tax expense. The lower-end of this range would be Market Commons, which varies from the subject’s
budgeted tax expense predominantly on land value, with the improved value being similar to the subject. Fashion
Centre at Pentagon City is the highest of these comparisons in Arlington, with a land value that falls below the
subject’s current assessment.
Based upon these comparisons, the subject’s assessment—both as-is and as budgeted—appear to be reasonable
and generally assessed commensurate with comparable properties in the market.
Real Property Tax Conclusion

In the final analysis, we have estimated taxes based upon the total analysis herein. Both ownership projections,
comparisons of tax billings at other projects in the market, and actual tax billings tend to support the expense
budgeted by ownership. With all of this in mind, we have estimated the subject’s first-year tax expense consistent
with ownership’s forecast.
On balance, the subject’s assessment and tax liability appear relatively comparable to other competing properties
in the region. Based on our review, we believe that tax expenses at the subject property should increase at an
annual rate of approximately 3.00 percent per annum over the projection period.

BALLSTON QUARTER ZONING
Zoning
General Information
The property is zoned C-0-2.5, Mixed Use District by the Arlington.
The purpose of the C-O-2.5, Mixed Use District is to “provide for limited office building land use and, under
appropriate conditions high-rise office building, hotel, commercial and/or multiple-family redevelopment within
"Metro Transit Corridors" as designated by the County Board. Appropriate mixtures of use and densities under the
terms of this district are to be determined in accordance with the conditional use provisions of this zoning ordinance
and shall be consistent with the General Land Use Plan or approved plans for the area. Determinations as to the
actual types and densities of uses to be allowed will be based on the characteristics of individual sites in their
neighborhood and on the need for community facilities, open and landscaped areas, circulation and utilities.”
ZONING MAP
For projects of the subject’s magnitude and caliber, specific site plan review is typically required for the numerous
array of factors that come to bear within the approval process. Accordingly, while certain bulk area requirements
may come into consideration, it is the full plan review that considers all influencing factors that has the primary
weight.
A summary of the subject’s zoning is provided below:

ZONING
Municipality Governing Zoning: Arlington
Current Zoning: C-0-2.5, Mixed Use District
Current Use: Super-Regional Center/Mall
Is current use permitted: Yes
Permit details:
Proposed Use: Mixed Use
Is proposed use permitted: Not applicable
Change In Zone Likely: No
Change To: Comment
Zoning Change Applied For: No
Zoning Variance Applied For: Not applicable
Permitted Uses: Permitted uses within this district generally include a variety of office, retail,
hospitality, high-density residential, and various commercial uses
Prohibited Uses: Prohibited uses within this district generally include low-density residential and
industrial uses
ZONING REQUIREMENTS CODE SUBJECT COMPLIANCE

Minimum Lot Area: 20,000 SF Complying
Maximum Building Height: 35 Feet Complying
12 Stories For Commercial/Office Complying
16 Stories For Multi-Family Complying
16 Stories For Hotel Not Applicable
Maximum Floor Area Ratio (FAR): 2.5 Times For Commercial/Office Complying
0.6 Times For Other Uses Not Applicable
Required On-Site Parking
Retail & Service: 1 Per 250 SF - Ground Floor Complying
1 Per 300 SF - Other Floors Complying
Restaurants: 1 Per 6 Seats Complying
Athletic Clubs: 1 Per 50 SF of Building Area Complying
Zoning Compliance
Property value is affected by whether or not an existing or proposed improvement complies to zoning regulations,
as discussed below.
Complying Uses
An existing or proposed use that complies to zoning regulations implies that there is no legal risk and that the
existing improvements could be replaced “as-of-right.”
Pre-Existing, Non-Complying Uses
In many areas, existing buildings pre-date the current zoning regulations. When this is the case, it is possible for
an existing building that represents a non-complying use to still be considered a legal use of the property. Whether
or not the rights of continued use of the building exist depends on local laws. Local laws will also determine if the
existing building may be replicated in the event of loss or damage.

Non-Complying Uses
A proposed non-complying use to an existing building might remain legal via variance or special use permit. When
appraising a property that has such a non-complying use, it is important to understand the local laws governing this
use.
Other Restrictions
We know of no deed restrictions, private or public, that further limit the subject property's use. The research required
to determine whether or not such restrictions exist is beyond the scope of this appraisal assignment. Deed
restrictions are a legal matter and only a title examination by an attorney or Title Company can usually uncover
such restrictive covenants. We recommend a title examination to determine if any such restrictions exist.
Zoning Conclusions
We have analyzed the zoning requirements in relation to the subject property, and considered the compliance of
the existing or proposed use. We are not experts in the interpretation of complex zoning ordinances but, based on
our review of public information, the subject property appears to be a complying use. This assertion appears to be
confirmed given the county’s approval of the redevelopment plan.
Detailed zoning studies are typically performed by a zoning or land use expert, including attorneys, land use
planners, or architects. The depth of our study correlates directly with the scope of this assignment, and it considers
all pertinent issues that have been discovered through our due diligence.
We note that this appraisal is not intended to be a detailed determination of compliance, as that determination is
beyond the scope of this real estate appraisal assignment.

BALLSTON QUARTER HIGHEST AND BEST USE
Valuation
Highest and Best Use
Highest and Best Use Definition
The Dictionary of Real Estate Appraisal, Sixth Edition (2016), a publication of the Appraisal Institute, defines the
highest and best use as:
The reasonably probable use of property that results in the highest value. The four criteria that
the highest and best use must meet are legal permissibility, physical possibility, financial
feasibility, and maximum productivity.
To determine the highest and best use we typically evaluate the subject site under two scenarios: as though vacant
land and as presently improved. In both cases, the property’s highest and best use must meet the four criteria
described above.
Highest and Best Use of Site as though Vacant

Legally Permissible
The first constraint imposed on the possible use of the site is dictated by the legal aspects of the parcel itself and
permitted uses. Legal factors influencing the highest and best use of the subject property involve local land use
guidelines, including comprehensive plans, zoning, and building codes. The intensity of development may also be
affected by surrounding land uses, neighborhood concerns, and the local planning process.
The zoning regulations in effect at the time of the appraisal determine the legal permissibility of a potential use of
the subject site. As described in the Zoning section, the subject site is zoned C-0-2.5, Mixed Use District by Arlington
County. Permitted uses within this district generally include a variety of office, retail, hospitality, high-density
residential, and various commercial uses. We are not aware of any further legal restrictions that limit the potential
uses of the subject. In addition, rezoning of the site is not likely due to the character of the area.
Physically Possible
The second constraint imposed on the possible use of the site is dictated by the physical aspects of the parcel itself.
Physical factors influencing the use of the site include location, size, shape, topography, soils, abutting uses, the
availability of utilities, and other characteristics.
The physical possibility of a use is dictated by the size, shape, topography, availability of utilities, and any other
physical aspects of the site. The subject site contains 4.99 acres, or 217,324 square feet. Moreover, the site is
irregularly shaped and level at street grade. It has average frontage, average-to-good access, and average-to-good
visibility. The overall utility of the site is considered to be good. As well, all public utilities are available to the site
including public water and sewer, gas, electric and telephone. Overall, the site is considered adequate to
accommodate most permitted development possibilities.
Financially Feasible and Maximally Productive
The third and fourth tests are, respectively, what is feasible and what will produce the highest net return. After
determining those uses that are legally permissible and physically possible, the uses considered must be analyzed
in light of their financial feasibility. For a potential use to be seriously considered, it must have the potential to

provide a sufficient return to attract investment capital over alternative forms of investment. A positive net income
or acceptable rate of return would indicate that a use is financially feasible.
Financially feasible uses are those uses that can generate a profit over and above the cost of acquiring the site,
and constructing the improvements. Of the uses that are permitted, possible, and financially feasible, the one that
will result in the maximum value for the property is considered the highest and best use.
Under current national, regional and local economic conditions, it is unlikely that financing would be available for
speculative development on the subject site.
Conclusion
In arriving at a conclusion for the highest and best use of the subject site, consideration has been given to the
criteria noted above, as well as various other factors, including location, neighboring property improvements,
accessibility, traffic and transportation patterns, population, and, most importantly, improvement trends, market
demand, and economic factors.
Several features of the subject site indicate that a large-scale mixed-use development with retail, office, and
residential uses would be the highest and best use. First, its location is one that offers a level of location recognition
to retail tenants, local shoppers/consumers, office users, and residents alike. Second, surrounding development in
the area is also a positive and influential consideration. With an urban setting near the metro rail station, high-
density development prevails in the local area. Third, the need for large-scale residential, office, and shopping
facilities with such locational attributes as the subject is generally in demand for the subject’s market area. Finally,
demographic influences on the property, including resident population growth trends, appear to support this
assertion.
Considering the site's size, location, and accessibility, we are of the opinion that the property's highest and best
use would be for a use that utilizes this location and relies upon the draw of customers both locally and regionally.
Given the zoning effect on the site, nearby land use patterns, and accessibility, we are of the opinion that the highest
and best use of the subject site, as if vacant, is for mixed-use development built to its maximum feasible F.A.R.
Based on the preceding analysis, it is our opinion that the Highest and Best Use of the subject site, as though
vacant, is for development with a mixed-use development, built to its maximum feasible building area, time and
circumstances warranting.
Highest and Best Use of Property as Improved

The Dictionary of Real Estate Appraisal defines highest and best use of the property as improved as:
The use that should be made of a property as it exists. An existing improvement should be
renovated or retained as is so long as it continues to contribute to the total market value of the
property, or until the return from a new improvement would more than offset the cost of
demolishing the existing building and constructing a new one.
In analyzing the Highest and Best Use of a property as improved, it is recognized that the improvements should
continue to be used until it is financially advantageous to alter physical elements of the structure or to demolish it
and build a new one.
Legally Permissible
As described in the Zoning Analysis section of this report, the subject site is zoned C-0-2.5, Mixed Use District. The
site is improved with an enclosed shopping center containing 574,903 square feet of gross leasable area (507,745
square feet proposed following redevelopment). In the Zoning section of this appraisal, we determined that the

existing (and proposed) improvements represent a complying use. We also determined that the existing (and
proposed) use is a permitted use in this zone.
Physically Possible
The subject improvements were constructed in 1986 and were expanded in 1999. At this writing, the improvements
are considered to be average in condition and in need of renovation and/or redevelopment. Upon completion of the
redevelopment, improvements will be in excellent condition. We know of no current or pending municipal actions
or covenants that would require a change to the current improvements.
Financially Feasible and Maximally Productive
In the Reconciliation section, we concluded to a market value for the subject property, as improved, of $93,900,000,
which is viewed as being greater than the value of the site, as though vacant. In our opinion, the improvements
contribute significantly to the value of the site; particularly upon completion of the renovation and redevelopment. It
is unlikely that an alternative use would result in a higher return at this time.
Conclusion
It is our opinion that the existing improvements add value to the site, as though vacant, dictating a continuation of
its current use. In addition, the existing leases and easement agreements with adjacent properties dictate a
continued regional retail use of the property. Thus, it becomes our opinion that the Highest and Best Use of the
subject property, as improved, is an urban regional shopping center, as it is currently improved.
Most Likely Buyer

The subject property is configured for multi-tenant occupancy. Its size, type, and configuration make it ideally suited
for multiple-tenant occupancy. An examination of recent rental activity in the area suggests that there is demand
for similar space in such properties by tenants within the market, and recent comparable sales indicate such
properties are typically purchased by real estate investors. As a result, we conclude that the most likely purchaser
of the subject is an investor, who would typically rely on the income approach to value the property.

BALLSTON QUARTER VALUATION PROCESS
Valuation Process
Methodology
There are three generally accepted approaches to developing an opinion of value: Cost, Sales Comparison and
Income Capitalization. We considered each in this appraisal to develop an opinion of the market value of the subject
property. In appraisal practice, an approach to value is included or eliminated based on its applicability to the
property type being valued and the quality of information available. The reliability of each approach depends on the
availability and comparability of market data as well as the motivation and thinking of purchasers.
The valuation process is concluded by analyzing each approach to value used in the appraisal. When more than
one approach is used, each approach is judged based on its applicability, reliability, and the quantity and quality of
its data. A final value opinion is chosen that either corresponds to one of the approaches to value, or is a correlation
of all the approaches used in the appraisal.
We considered each approach in developing our opinion of the market value of the subject property. We discuss
each approach below and conclude with a summary of their applicability to the subject property.
Cost Approach
The Cost Approach is based on the proposition that an informed purchaser would pay no more for the subject than
the cost to produce a substitute property with equivalent utility. This approach is particularly applicable when the
property being appraised involves relatively new improvements which represent the Highest and Best Use of the
land; or when relatively unique or specialized improvements are located on the site for which there are few improved
sales or leases of comparable properties.
In the Cost Approach, the appraiser forms an opinion of the cost of all improvements, depreciating them to reflect
any value loss from physical, functional and external causes. Land value, entrepreneurial profit and depreciated
improvement costs are then added, resulting in an opinion of value for the subject property.
Sales Comparison Approach
In the Sales Comparison Approach, sales of comparable properties are adjusted for differences to estimate a value
for the subject property. A unit of comparison such as price per square foot of building area or effective gross
income multiplier is typically used to value the property. When developing an opinion of land value the analysis is
based on recent sales of sites of comparable zoning and utility, and the typical units of comparison are price per
square foot of land, price per acre, price per unit, or price per square foot of potential building area. In both cases,
adjustments are applied to the unit of comparison from an analysis of comparable sales, and the adjusted unit of
comparison is then used to derive an opinion of value for the subject property.
In the Income Capitalization Approach the income-producing capacity of a property is estimated by using contract
rents on existing leases and by estimating market rent from rental activity at competing properties for the vacant
space. Deductions are then made for vacancy and collection loss and operating expenses. The resulting net
operating income is divided by an overall capitalization rate to derive an opinion of value for the subject property.
The capitalization rate represents the relationship between net operating income and value. This method is referred
to as Direct Capitalization.
Related to the Direct Capitalization Method is the Yield Capitalization Method. In this method periodic cash flows
(which consist of net operating income less capital costs) and a reversionary value are developed and discounted

BALLSTON QUARTER VALUATION PROCESS
to a present value using an internal rate of return that is determined by analyzing current investor yield requirements
for similar investments.
Summary

BALLSTON QUARTER LAND VALUATION
Land Valuation
Introduction
The valuation of the underlying land for a regional mall such as the subject property presents unique challenges.
Oftentimes, there are few recent transfers of similarly sized tracts of land within the immediate market area.
Furthermore, the entitlements to construct the center add value to the property, which is not easily quantified via a
traditional Sales Comparison Analysis. Our analysis has therefore employed several different methodologies, which
have helped to establish general parameters for land value for this type of development. This has included:
 Sales Comparison Approach

 Survey of Large Retail Land Assemblages
 Comparison of Land Acquisition to Total Development Costs
 Comparison of Land and Total Assessment Ratios
 Land Residual Analysis

In the first technique, we have used the Sales Comparison Approach as the primary method to develop an opinion
of land value for the subject property. In so doing, we have examined current offerings and analyzed prices that
buyers have recently paid for comparable sites in the market. Generally, if a comparable was considered to be
superior to the subject, a downward adjustment has been made to the comparable sale; if inferior, an upward
adjustment has been made.
The most widely used and market-oriented units of comparison for properties with characteristics similar to those
of the subject are price per square foot of land, price per acre, and/or price per square foot of potential building
area. All transactions used in this analysis have been based on the most appropriate method used in the local
market. The major elements of comparison used to value the subject site include the property rights conveyed, the
financial terms incorporated into the transaction, the conditions or motivations surrounding the sale, changes in
market conditions since the sale, the location of the real estate, its utility and the physical characteristics of the
property.
The comparables and our analysis are presented on the following pages, beginning with a summary chart of the
sales considered. The qualitative adjustments included herein are presented for informational purposes, and are
intended only to convey to the reader our thought process in arriving at comparisons between the sales and the
subject in order to develop an opinion of value. While a matched-pair breakdown is the preferred method in
analyzing sales, none of the comparables presented offers enough similarity from which to complete such an
analysis and calculation. Therefore, our adjustments represent a qualitative rather than truly quantitative analysis.
The comparables and our analysis are presented on the following pages, beginning with a summary chart of the
sales considered.

SUMMARY OF LAND SALES

PROPERTY INFORMATION TRANSACTION INFORMATION
Property
Size Max Potential Public Rights Sale $/SF
No. Location Size (sf) (Acres) FAR Building Area Proposed Use Zoning Site Utility Utilities Grantor Grantee Conveyed Date Sale Price $/SF Land Build.
S Subject Property 217,324 4.99 2.50 543,310 Mixed Use C-0-2.5, Good All available
Mixed Use
District
1 660 Glebe Road Assemblage 17,868 0.41 4.20 75,046 Mixed Use C-2 Good All Available Mount Vernon 670 Glebe Road Fee Simple 1/15 $8,000,000 $447.73 $106.60
660 N. Glebe Road, Petroleum Associates LLC
Arlington, VA Realty LLC
2 750 North Glebe Mixed-Use site 96,570 2.22 3.50 337,995 Mixed Use C-2/R-5 Good All Available CARS-DBI, LLC 750 North Fee Simple 8/14 $40,000,000 $414.21 $118.34
750 North Glebe Road, Gleble, LLC
Arlington, VA
3 Latitude Apartment Land 42,127 0.97 6.40 269,615 Mixed Use C-2 Good All Available Multiple The Penrose Fee Simple 4/14 $23,000,000 $545.97 $85.31
3601-3625 North Fairfax Drive, Group
Arlington, VA
4 670 Glebe Assemblage 26,780 0.61 4.20 112,476 Mixed Use C-2 Good All Available Multiple 670 Glebe Road Fee Simple 1/14 $7,550,100 $281.93 $67.13
670-672 N. Glebe Road, Associates LLC
Arlington, VA
5 Central Place Residences 37,840 0.87 11.57 437,765 Mixed Use C-0 Mixed Good All Available Central Place Central Place Fee Simple 1/14 $42,300,000 $1,117.86 $96.63
1811 North Moore Street, Use Rosslyn LLC Residences LLC
Arlington, VA District
6 Former Macy's Men and Home 40,933 0.94 2.50 102,333 Mixed Use C-0-2.5 Good All Available Macy's, Inc. Ballston Fee Simple 8/13 $9,000,000 $219.87 $87.95
4100 Wilson Boulevard, Acquisition
Arlington, VA Company LLC
7 The Frasier at Potomac Yards 70,021 1.61 3.64 255,148 Residential- CDD 10 Good All Available Potomac Yard Potomac Yard Fee Simple 8/13 $20,500,000 $292.77 $80.35
2500 Main Line Boulevard, Multi-Family Development Apartments LLC
Alexandria, VA LLC
8 Arlington Redevelopment Site 16,988 0.39 5.00 84,940 Office C-3 Good All Available BB&T Clarendon Fee Simple 3/12 $5,560,930 $327.34 $65.47
3005 Washington Boulevard, Investors LLC
Arlington, VA (Invesco)
STATISTICS
Low 16,988 0.39 2.50 75,046 3/12 $5,560,930 $219.87 $65.47
High 96,570 2.22 11.57 437,765 1/15 $42,300,000 $1,117.86 $118.34
Average 43,641 1.00 5.13 209,415 11/13 $19,488,879 $455.96 $88.47

LAND SALE ADJUSTMENT GRID

Economic Adjustments (Cumulative) Property Characteristic Adjustments (Additive)
Property PSF of Adj. Adj. Price

(1)
Price PSF Price PSF of Rights Conditions Market PSF Land Building Public Price PSF of
(2)
No. Land & Date Building Conveyed of Sale Financing Conditions Subtotal Subtotal Location Size Utilities Utility Other PSF Land Building Overall
1 $447.73 $106.60 Fee Simple Arm's-Length None Inferior $453.10 $107.88 Similar Smaller Similar Similar Similar $475.76 $113.27 Inferior
1/15 1/15 0.0% 0.0% 0.0% 1.2% 1.2% 1.2% 0.0% 5.0% 0.0% 0.0% 0.0% 5.0% 5.0%
2 $414.21 $118.34 Fee Simple Arm's-Length None Inferior $422.49 $120.71 Similar Similar Similar Similar Similar $422.49 $120.71 Similar
8/14 8/14 0.0% 0.0% 0.0% 2.0% 2.0% 2.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
3 $545.97 $85.31 Fee Simple Arm's-Length None Inferior $560.71 $87.61 Similar Similar Similar Similar Inferior $588.74 $91.99 Inferior
4/14 4/14 0.0% 0.0% 0.0% 2.7% 2.7% 2.7% 0.0% 0.0% 0.0% 0.0% 5.0% 5.0% 5.0%
4 $281.93 $67.13 Fee Simple Arm's-Length None Inferior $290.95 $69.27 Similar Smaller Similar Inferior Similar $320.05 $76.20 Inferior
1/14 1/14 0.0% 0.0% 0.0% 3.2% 3.2% 3.2% 0.0% 5.0% 0.0% 5.0% 0.0% 10.0% 10.0%
5 $1,117.86 $96.63 Fee Simple Arm's-Length None Inferior $1,153.64 $99.72 Superior Similar Similar Similar Similar $1,095.95 $94.73 Superior
1/14 1/14 0.0% 0.0% 0.0% 3.2% 3.2% 3.2% -5.0% 0.0% 0.0% 0.0% 0.0% -5.0% -5.0%
6 $219.87 $87.95 Fee Simple Arm's-Length None Inferior $228.67 $91.47 Similar Similar Similar Similar Similar $228.67 $91.47 Similar
8/13 8/13 0.0% 0.0% 0.0% 4.0% 4.0% 4.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
7 $292.77 $80.35 Fee Simple Arm's-Length None Inferior $304.48 $83.56 Inferior Similar Similar Similar Inferior $334.93 $91.92 Inferior
8/13 8/13 0.0% 0.0% 0.0% 4.0% 4.0% 4.0% 5.0% 0.0% 0.0% 0.0% 5.0% 10.0% 10.0%
8 $327.34 $65.47 Fee Simple Arm's-Length None Inferior $350.26 $70.05 Inferior Smaller Similar Inferior Inferior $420.31 $84.06 Inferior
3/12 3/12 0.0% 0.0% 0.0% 7.0% 7.0% 7.0% 5.0% 5.0% 0.0% 5.0% 5.0% 20.0% 20.0%
STATISTICS
$219.87 $65.47 - Low Low - $228.67 $76.20
$1,117.86 $118.34 - High High - $1,095.95 $120.71
$455.96 $88.47 - Average Average - $485.86 $95.54
(1) Market Conditions Adjustment Footnote (2) Utility Footnote
Compound annual change in market conditions: 2.00% Utility includes shape, access, frontage and visibility.
Date of Value (for adjustment calculations): 8/2/15

LAND SALE LOCATION MAP

Discussion of Adjustments
Property Rights Conveyed
The property rights conveyed in a transaction typically have an impact on the sale price of a property. Acquiring the
fee simple interest implies that the buyer is acquiring the full bundle of rights. Acquiring a leased fee interest typically
means that the property being acquired is encumbered by at least one lease, which is a binding agreement
transferring rights of use and occupancy to the tenant. A leasehold interest involves the acquisition of a lease, which
conveys the rights to use and occupy the property to the buyer for a finite period of time. At the end of the lease
term, there is typically no reversionary value to the leasehold interest.
Since we are valuing the fee simple interest in the underlying land, as reflected by each of the comparables, an
adjustment for property rights is not required.
Market Conditions
The sales that are included in this analysis occurred between March 2012 and January 2015. As the market has
improved over this time period, we applied an annual adjustment of 2.00 percent.
Financial Terms
The financial terms of a transaction can have an impact on the sale price of a property. A buyer who purchases an
asset with favorable financing might pay a higher price, as the reduced cost of debt creates a favorable debt
coverage ratio. A transaction involving above-market debt will typically involve a lower purchase price tied to the
lower equity returns after debt service. We analyzed all of the transactions to account for atypical financing terms.
To the best of our knowledge, all of the sales used in this analysis were accomplished with cash or market-oriented
financing. Therefore, no adjustments were required.
Conditions of Sale
Adjustments for conditions of sale usually reflect the motivations of the buyer and the seller. In many situations the
conditions of sale may significantly affect transaction prices. However, all sales used in this analysis are considered
to be "arms-length" market transactions between both knowledgeable buyers and sellers on the open market.
Therefore, no adjustments were required.
Location
An adjustment for location is required when the locational characteristics of a comparable property differ from those
of the subject property. Overall, the subject site is large enough in size to accommodate the existing (and planned)
improvements. Moreover, it is well configured and has a relatively level topography. The site's access and visibility
are also considered good. Overall, we conclude that the site is conducive for its existing (and planned) retail use.
For analysis purposes, we made a downward adjustment to those comparables considered superior in location
compared to the subject. Conversely, upward adjustments were made to those comparables considered inferior.
Size
The adjustment for size generally reflects the inverse relationship between unit price and lot size. Smaller lots tend
to sell for higher unit prices than larger lots, and vice versa. In urban environments like the subject, the opposite
may be true for larger sites offering greater flexibility and development options.
Given these considerations, coupled with our review of the sales, we have therefore made several minor upward
adjustments to the smaller land parcels in the analysis.

Public Utilities
The availability of public utilities has a significant impact on the value of a property. Municipal utility providers often,
but not always, provide utilities such as gas, water, electric, sewer, and telephone. It is therefore important to
understand any differences that may exist in the availability of public utilities to the subject property and its
comparables. All of the sales, like the subject, had full access to public utilities at the time of sale. Therefore, no
adjustments were required.
Utility
The subject parcel is adequately shaped to accommodate a typical building. It has average-to-good access,
average frontage and average-to-good visibility. Overall, it has been determined that the site has good utility.
In comparison to the subject, adjustments were made where a comparable was considered to have superior or
inferior utility.
Other
In some cases, other variables will have an impact on the price of a land transaction. Examples include soil or slope
conditions, restrictive zoning, easements, wetlands or external influences.
In our analysis of the comparables, we found that no unusual conditions existed at the time of sale. As a result, no
material adjustments were required. However, for three of the sales, where there was no retail included in the
development potential, we made minor upward adjustments.
Summary
After a thorough analysis, the comparable land sales reflect adjusted unit values ranging from $76.20 per building
square foot to $120.71 per building square foot, with an average of $95.54 per building square foot. Broadly
speaking, this range of adjusted unit rates would suggest a land value for the subject between $27.9 million and
$44.3 million (using the subject’s owned GLA). With this range of potential values in mind, we have next considered
the other methods available.
Survey of Large Retail Site Assemblages

For the second approach to valuing the subject’s underlying land, we have considered retail land sales that have
involved large retail sites, many of which include the benefit of entitled land. The most pertinent way to examine the
value of these parcels is to compare the value of the whole mall site, and then allocate the unit value based upon
its site size. This analysis best represents the value of these parcels, as similar land tracts do not frequently sell in
the open market.
In total, we examined 179 land sales between January 2007 and December 2015. The weighted average site area
from the comparables included in the survey was 70.4 acres, with an average of 592,000 square feet of proposed
building area. Sale prices in the survey ranged from $995,000 to $128,000,000, or $0.29 to $40.25 per square foot
of land area (calculated mean of $6.50 per square foot).
On the basis of total building area, either constructed or approved, the mean unit rates range from $5.63 to $153.33
per square foot (survey mean calculated at $41.36 per square foot).
The following table provides a summary of our survey results:

LARGE FORMAT RETAIL LAND SALES

2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Survey
No. of Transactions 81 24 10 1 2 18 11 22 10 179
Total Volume (000) $ 1,515,338 $ 446,188 $ 84,714 $ 4,000 $ 17,177 $ 279,390 $ 88,722 $ 158,800 $ 313,295 $ 2,907,624
Mean Size (Acres) 83.71 100.74 61.29 45.71 37.57 40.15 78.90 24.22 53.80 70.41
Mean Sale Price $ 18,707,877 $18,591,161 $ 9,412,674 $ 4,000,000 $ 8,588,580 $ 15,521,669 $ 8,065,676 $ 7,218,161 $ 31,329,525 $16,334,969
per Square Foot $ 6.01 $ 4.51 $ 3.58 $ 2.01 $ 5.69 $ 8.80 $ 5.89 $ 7.25 $ 13.43 $ 6.50
Upper Quartile $ 19.24 $ 11.72 $ 6.04 - $ 9.46 $ 33.61 $ 18.95 $ 37.99 $ 40.25 $ 40.25
Lower Quartile $ 3.35 $ 2.71 $ 3.32 - $ 3.81 $ 3.29 $ 0.98 $ 3.61 $ 5.46 $ 2.99
per Acre $ 261,780 $ 196,673 $ 149,201 $ 87,508 $ 247,988 $ 383,414 $ 256,500 $ 315,700 $ 585,193 $ 283,329
Upper Quartile $ 838,095 $ 510,622 $ 262,931 - $ 411,928 $ 1,463,891 $ 825,677 $ 1,654,676 $ 1,753,425 $ 1,753,425
Lower Quartile $ 128,068 $ 118,175 $ 144,545 - $ 166,018 $ 143,516 $ 42,583 $ 157,342 $ 237,622 $ 130,239
per Building Area $ 35.10 $ 33.21 $ 27.62 $ 13.33 $ 24.54 $ 71.59 $ 27.17 $ 61.29 $ 45.70 $ 41.36
Upper Quartile $ 125.71 $ 56.22 $ 30.91 - $ 38.99 $ 143.57 $ 46.12 $ 153.33 $ 78.99 $ 153.33
Lower Quartile $ 18.18 $ 20.35 $ 25.97 - $ 17.31 $ 43.08 $ 12.43 $ 23.36 $ 29.44 $ 19.52
Source: Cushman & Wakefield
As depicted in the preceding table, investment in large retail sites has declined substantially since 2007. While 81
transactions occurred in 2007, just 98 have been tracked from 2008 through 2015. From 2007 to 2015, the
calculated mean price per square foot of all large retail site assemblages that have been tracked in our survey is
$6.50 per square foot of site area. Alternatively, the mean price per acre identified in our survey is $283,329.
In terms of sale price per proposed square foot of building area, the surveyed mean equates to $41.36 per building
area square foot.
While we may place less weight on this method, it can, nevertheless, be used as supporting evidence of the
subject’s ultimate land value; particularly given the difficulty in assembling such sites in most markets.
In our opinion, given the subject’s location, urban orientation, demographic profile, and development potential, a
price per square foot of building area toward the high-end of the indications in the chart would be warranted. Please
see conclusion at end of section for additional detail.
Allocation Method
In the next method, we have considered an allocation of land value from the property’s total value, as determined
in the appraisal. To establish a ratio of land value to the total value of the project for allocation purposes, we have
looked at two different measurements of this potential ratio; the first being a comparison of land acquisition costs in
comparison to total development costs; the second being land assessments in relation to total property
assessments. From these two considerations, we can determine an appropriate ratio of contributory land value to
the project, as a whole.
Comparison of Land Acquisition to Total Development Costs
By examining the proportion of the land acquisition price to total development costs for recently completed or
proposed shopping centers we are able to extract the contribution of the land to the total property value. We
therefore surveyed recent public filings and press releases from large shopping center Real Estate Investment
Trusts (REITS) over the past several years. We were able to extract a number of comparables, with land acquisition
dates between 2008 and 2014.
A description of each comparable is provided in the following chart:

MALL AND LARGE RETAIL LAND SALES AND DEVELOPMENT COSTS

Land as % of
Total Total
Development Site Area Land Sale Land Sale Development
Developer Center Name City State Costs (Acres) Date Price Costs Notes
Confidential National Confidential Confidential -- $ 239,687,227 23.30 Nov-14 $ 14,436,081 6.02% This transaction involves a land contribution to a joint-venture partnership for
Developer Lifestyle Center construction of a new, high-end lifestyle center. The land allocation, at $14.22 per
square foot, was considered to be below-market.
Simon Property Charlotte Premium Charlotte NC $ 92,000,000 42.00 Aug-13 $ 8,700,000 9.46% The land sale is a joint venture between Simon Property Group Inc. and Tanger
Group/Taubman Outlets Factory Outlet Centers Inc.The parcel is 42 acres of land in the Steele Creek area in
Centers, Inc. southwest Charlotte, where the companies plan to develop a 400,000-square-foot
retail outlet that is slated to open in 2014.
Simon Property Twin Cities Eagan MN $ 108,500,000 29.00 May-13 $ 5,800,000 5.35% Baltimore-based Paragon Outlet Partners paid $5.8 million for 29 acres of city-
Group/Paragon Outlet Premium Outlets owned land associated with the Twin Cities Premium Outlet project. Paragon plans
Partners to construct a six-building, open-air retail complex spanning more than 400,000
square feet at the southeast quadrant of Hwy. 77 and Hwy. 13
Confidential National Confidential Confidential -- $ 316,931,176 73.25 Feb-13 $ 78,150,000 24.66% This transaction involving the land underlying a proposed super-regional mall was
Mall Developer Enclosed Super- reported as being at-market, but included some related parties that were to become
Regional Mall partners in the development. The site was fully entitled at the time of sale.
Taubman Centers, Taubman Prestige Chesterfield MO $ 150,000,000 48.63 Jul-12 $ 15,200,000 10.13% The 49-acre tract of land is located near the Boone's Crossing exit off of Highway 40
Inc. Outlets outside of St. Louis, MO. The tract is being developed into the Taubman Prestige
Chesterfield Outlets Chesterfield. The oulet mall is expected to total 350,000 square feet. The
outlet mall would also anchor the 131-acre Chesterfield Blue Valley mixed-use
development on Old Olive Street Road. Major tenants will include Gap Outlet, Banana
Republic, J.Crew, Brooks Brothers, American Eagle and Lucky Brand Jeans among
others.
Westwood University Station Westwood MA $ 1,500,000,000 140.00 Apr-12 $ 59,000,000 3.93% This sale is for the land of the stalled Westwood Station development site. Now
Marketplace Holdings renamed University Station, the concept will include over 1.3 million square feet of
LLC retail, 1000 residential units, 1.5 million square feet of office space and 2 hotels. The
new developers plan to develop a scaled down mixed-use development to include
500,000 square feet of retail, housing, office and a hotel by early 2014.
Confidential National Confidential Super- Confidential -- $ 644,650,669 7.27 2012 $ 201,436,322 31.25% This transaction involved the acquisition of land for expansion of a super-regional
Mall Developer Regional Mall mall. The site was improved with older buildings at the time of sale, which were
razed in favor of new development.
Weingarten Realty Hilltop Village Alexandria VA $ 67,000,000 33.13 Nov-11 $ 13,647,160 20.37% This transaction repersents the sale of approximately 33 acres located on the
Investors Center northeast quadrant of Beulah Street and Telegraph Road in Alexandria, VA for the
development of Hilltop Village Center. The center is being developed by Weingarten
Realty Investors and will total 350,000 square feet; 250,000 square feet retail
anchored by Wegmans grocery and 100,000 square feet of office space. According to
Robert Smith, Weingarten's senior vice president, the center is expected to have a
$67,000,000 final investment.
Tanger Tanger Outlet Mebane NC $ 68,540,500 52.00 Oct-09 $ 8,540,500 12.46% This tract is located along Arrowhead Boulevard off of Exit 154 of Interstate 40/85.
Center of the The site is near the Orange County line. A 317,000 square foot outlet center was
Piedmont under development as of April 2010. It will have 80 stores, including Saks Fifth
Avenue Off 5th, Banana Republic Factory Shop, Gap Outlet, J Crew, Nike Factory
Store, Tommy Hilfiger and others. The buyers indicated that approximately 75
percent of the center was pre-leased. Projected construction costs are approximately
$60 million project, and the center should open in late 2010.
Simon Property Merrimack Nashua NH $ 100,000,000 170.00 Apr-09 $ 16,832,744 16.83% Buyer will invest over $100M to develop site into a premium outlet center. Usable
Group Premium Outlets land area was reported to be 80 to 90 acres. The land sold with full approvals to
develop an outlet mall of up to 550,000-SF. Officials project the mall will bring in 7-8
million visitors per year. Escrow time was reported to be 3.5+ years due to approval
process. Buyer reports GLA will be 447,000-SF with 120 designer and brand name
outlets. The projected opening is to be determined. Water line extensions to serve
the site had an estimated cost of $2 million.
Ironwood Property Tilden Ridge Hamburg PA $ 75,000,000 63.00 Apr-09 $ 10,000,000 13.33% The project will include 2 large anchor tenants, approximately 60,000-SF of in-line
Group Shopping Center retail space and five free-standing outparcels. The property is zoned C-2, highway
interchange commercial. The buyer purchased a total of 63 acres from different
individuals, in a total of 14 separate transactions. All of the closings occurred
simultaneously. All of the properties closed on 4/2/2009. The sale price of $10m
reflects the price for the land only. That price does not include any approvals,
roadways or development costs. The buyer estimates that the cost to develop will be
approximately $75M.
Confidential Regional Confidential Confidential -- $ 236,393,335 89.80 Jul-08 $ 34,420,285 14.56% Site acquired for development of major mixed-use lifestyle and office development,
Developer Lifestyle Center with adjacent power center and peripheral development. The land pricing was
considered to be at or near market.
Low: $ 67,000,000 7.27 Jul-05 $ 5,800,000 3.93%
High: $ 1,500,000,000 170.00 Nov-14 $ 201,436,322 31.25%
Mean: $ 299,891,909 64.28 Oct-02 $ 38,846,924 14.03%
Total/Avearge: $ 3,598,702,907 771.37 $ 466,163,092 12.95%
As shown, the average total development cost from the comparables included in our survey was $299.89 million.
The average land price from the survey was approximately $38.85 million, or 12.95 percent of the total development
costs. The land acquisition price, as a percent of total development costs, ranges from 3.9 percent to 31.3 percent,
with a calculated mean of 14.0 percent.
At a recent lifestyle development in Colorado (2014), ownership reported a land acquisition cost of $39.67 million,
equating to 16.5 percent of the total cost budget, which appears reasonable in relation to the survey.
Comparison of Land Assessments to Total Assessed Value
An additional analysis to estimate a reasonable land value ratio, samplings of a number of large format retail centers
across the country have been selected from our files. In this sample, total assessed property values range from a
low of $9.46 million to a high of $508.35 million, with a mean of $123.25 million, while land assessments range from
a low of $3.58 million to a high of $149.75 million, and have a mean of approximately $26.98 million.

The following table presents a summary of the assessments for each comparable included in the survey:
MALL AND LARGE FORMAT CENTERS LAND ASSESSMENTS AS A PERCENT OF TOTAL ASSESSED VALUE
Land Improvements Total Assessed Land % of Total
Property ST Assessment Assessment Value Assessed Value
Enclo sed M all AZ $ 5,800,442 $ 15,553,220 $ 21,353,662 27.16%
Enclo sed M all CA $ 73,984,364 $ 402,002,152 $ 475,986,516 15.54%
Enclo sed M all CA $ 29,988,270 $ 138,189,428 $ 168,177,698 17.83%
Enclo sed M all CA $ 38,299,434 $ 168,372,867 $ 206,672,301 18.53%
Enclo sed Value Center CA $ 149,748,826 $ 170,502,457 $ 320,251,283 46.76%
Enclo sed M all CA $ 41,648,841 $ 196,216,269 $ 237,865,110 17.51%
Enclo sed M all CA $ 18,224,276 $ 82,599,091 $ 100,823,367 18.08%
Enclo sed Value Center CA $ 59,586,820 $ 318,781,280 $ 378,368,100 15.75%
Enclo sed M all CA $ 31,046,972 $ 147,065,650 $ 178,112,622 17.43%
Enclo sed M all CA $ 100,673,760 $ 407,674,361 $ 508,348,121 19.80%
Regio nal/Lifestyle Center CO $ 31,142,700 $ 88,243,746 $ 119,386,446 26.09%
Enclo sed M all CO $ 13,368,200 $ 47,325,900 $ 60,694,100 22.03%
Regio nal/Lifestyle Center CO $ 17,719,500 $ 80,878,600 $ 98,598,100 17.97%
Enclo sed M all CT $ 5,644,410 $ 80,291,870 $ 85,936,280 6.57%
Enclo sed M all GA $ 7,592,232 $ 29,207,552 $ 36,799,784 20.63%
Enclo sed M all HI $ 90,055,700 $ 188,520,100 $ 278,575,800 32.33%
Enclo sed M all HI $ 15,877,300 $ 46,041,900 $ 61,919,200 25.64%
Enclo sed M all ID $ 10,799,890 $ 45,540,587 $ 56,340,477 19.17%
Enclo sed M all ID $ 7,851,663 $ 10,010,585 $ 17,862,248 43.96%
Enclo sed M all IL $ 3,576,804 $ 6,225,932 $ 9,802,736 36.49%
Enclo sed M all IL $ 7,187,329 $ 65,409,829 $ 72,597,158 9.90%
Enclo sed M all KY $ 5,275,000 $ 22,325,000 $ 27,600,000 19.11%
Enclo sed M all KY $ 8,560,620 $ 29,183,080 $ 37,743,700 22.68%
Enclo sed M all MA $ 15,625,300 $ 41,890,800 $ 57,516,100 27.17%
Enclo sed M all MA $ 6,417,400 $ 40,484,700 $ 46,902,100 13.68%
Enclo sed M all MA $ 21,242,000 $ 92,810,300 $ 114,052,300 18.62%
Enclo sed M all MD $ 93,140,400 $ 218,846,800 $ 311,987,200 29.85%
Enclo sed M all MD $ 28,329,700 $ 155,233,900 $ 183,563,600 15.43%
Enclo sed M all MN $ 22,717,000 $ 51,631,100 $ 74,348,100 30.55%
Enclo sed M all NJ $ 24,220,000 $ 113,780,000 $ 138,000,000 17.55%
Enclo sed M all NJ $ 15,592,500 $ 30,729,500 $ 46,322,000 33.66%
Enclo sed M all NM $ 18,892,400 $ 33,581,400 $ 52,473,800 36.00%
Enclo sed M all NM $ 13,653,100 $ 34,233,900 $ 47,887,000 28.51%
Enclo sed M all NY $ 11,085,600 $ 88,521,800 $ 99,607,400 11.13%
Enclo sed M all NY $ 26,943,600 $ 204,202,800 $ 231,146,400 11.66%
Enclo sed M all NV $ 6,658,137 $ 31,010,580 $ 37,668,717 17.68%
Enclo sed M all OH $ 4,231,745 $ 5,232,535 $ 9,464,280 44.71%
Enclo sed M all OH $ 4,538,120 $ 29,123,850 $ 33,661,970 13.48%
Enclo sed M all OH $ 5,330,100 $ 18,926,500 $ 24,256,600 21.97%
Enclo sed M all OK $ 5,184,750 $ 23,282,258 $ 28,467,008 18.21%
Enclo sed M all OR $ 21,970,680 $ 53,688,710 $ 75,659,390 29.04%
Enclo sed M all OR $ 64,839,890 $ 178,480,310 $ 243,320,200 26.65%
Enclo sed M all PA $ 22,985,000 $ 51,938,100 $ 74,923,100 30.68%
Enclo sed M all PA $ 8,996,600 $ 21,621,500 $ 30,618,100 29.38%
Enclo sed M all PA $ 6,820,500 $ 38,113,200 $ 44,933,700 15.18%
Enclo sed M all RI $ 33,419,900 $ 24,227,100 $ 57,647,000 57.97%
Enclo sed M all TN $ 24,807,800 $ 125,075,000 $ 149,882,800 16.55%
Enclo sed Value Center TN $ 10,855,520 $ 34,130,010 $ 44,985,530 24.13%
Enclo sed M all TX $ 20,385,162 $ 119,872,905 $ 140,258,067 14.53%
Enclo sed M all TX $ 20,805,098 $ 94,213,068 $ 115,018,166 18.09%
Enclo sed M all TX $ 26,173,756 $ 193,500,632 $ 219,674,388 11.91%
Enclo sed M all TX $ 37,341,580 $ 103,096,661 $ 140,438,241 26.59%
Enclo sed M all UT $ 22,646,100 $ 61,046,100 $ 83,692,200 27.06%
Enclo sed M all UT $ 9,973,592 $ 36,925,992 $ 46,899,584 21.27%
Enclo sed M all UT $ 12,792,000 $ 38,499,800 $ 51,291,800 24.94%
Enclo sed M all VA $ 19,844,000 $ 98,878,900 $ 118,722,900 16.71%
Enclo sed M all VA $ 13,841,800 $ 55,878,700 $ 69,720,500 19.85%
Enclo sed M all VA $ 55,794,260 $ 283,336,850 $ 339,131,110 16.45%
Enclo sed/Urban M all VA $ 23,002,900 $ 49,174,400 $ 72,177,300 31.87%
Enclo sed M all WA $ 15,013,001 $ 27,112,341 $ 42,125,342 35.64%
Enclo sed M all WA $ 21,947,780 $ 55,655,300 $ 77,603,080 28.28%
Enclo sed M all WA $ 92,778,000 $ 198,585,700 $ 291,363,700 31.84%
Enclo sed M all WA $ 15,995,304 $ 57,156,796 $ 73,152,100 21.87%
Enclo sed M all WI $ 46,803,500 $ 230,032,100 $ 276,835,600 16.91%
Enclo sed M all WY $ 6,587,996 $ 27,266,985 $ 33,854,981 19.46%
Low $ 3,576,804 $ 5,232,535 $ 9,464,280 6.57%

High $ 149,748,826 $ 407,674,361 $ 508,348,121 57.97%
Mean $ 26,982,722 $ 96,264,482 $ 123,247,204 23.38%
Total/Average $ 1,753,876,924 $ 6,257,191,339 $ 8,011,068,263 21.89%

As exhibited, the land assessment, as a percentage of the total assessed value, ranges from a low of 6.6 percent
to a high of 58.0 percent, with a mean of 23.4 percent. The weighted average of the survey amounts to 21.9 percent.
We have also looked at a portfolio of malls from one of the regional mall REITs wherein we have been able to
isolate the land assessment component of the property’s total assessed value. Our analysis shows that the mean
land assessment ratio for the survey of nearly 100 properties is 23.5 percent.
Allocation Method conclusion
From the analysis above, we see that developers have reported land costs at about 12.8 percent of total project
costs. Land assessment ratios generally range from 20.0 to 25.0 percent of total assessed value, on average.
Obviously, land value is a function of a particular market’s dynamics, including location, demographic characteristics
and availability of developable sites. Considering the total analysis herein, we have concluded to the following ratios
to total property value for the following asset classes.
 Small Market: 15.0 percent

 Suburban Middle Market: 17.5 percent
 Large Suburban Market: 20.0 percent
 High Density Suburban Market: 22.5 percent
The results of these allocations have been checked against the implied land value on the following bases:
 Value per acre

 Value per square foot of land area
 Value per square foot of total owned GLA
Where necessary, we have made adjustments to the indicated ratios based upon local market transactional
evidence and appraiser judgment given the economic viability of the mall and its location.
The subject property is located in a fairly high-density/urban-type setting, with higher-density development and
higher land values than some of the more extended suburban areas of the market.
Given the characteristics of the area, we would classify the subject as a medium- to high-density urban market, and
have looked to a land ratio range of approximately 17.5 to 22.5 percent of total value as a means of testing the
reasonableness of the potential land value of the parcel.
Conclusion of Site Value

After considering all of the characteristics involved with the land sale comparables (and potential listings), an overall
comparative rating has been completed to show the general comparability of the sales with the subject property
(please see previous chart, which presents a summary of this adjustment process).
The adjustments applied to the comparable sales in the Land Sale Adjustment Chart reflect what we determined is
appropriate in the marketplace. Despite the subjectivity, the adjustments were considered reasonable and were
applied consistently.
After a thorough analysis, the comparable land sales reflect adjusted unit values ranging from $76.20 per building
square foot to $120.71 per building square foot, with an average of $95.54 per building square foot.
The adjustment chart presents an overview of the thinking in our analysis. It is noted that the percentage rate
adjustments are provided for analysis purposes only and are not intended to be precise measurements of the

differences between the comparables and the subject. Rather, they are used to provide a better understanding of
the thinking used herein.
With this in mind, larger percentage adjustments (say, 25% to 35%) would indicate more substantial differences
between the sales and the subject. Smaller adjustments therefore indicate only minor differences. We acknowledge
that the adjustment process is somewhat subjective in nature. However, we have been unable to support the
magnitude of the adjustments by paired sale analysis.
In conclusion, we acknowledged that the methods presented show a wide range of value indications for the subject’s
potential land value. The local land sales were relatively reasonable to compare with the subject; therefore strong
weight would typically be placed on this component of the analysis.
At the other end of the spectrum, the value/price per square foot of building area shown from the national site
assemblage survey is more difficult to compare with the subject, and less weight may be placed on this type of
analysis.
Given the income characteristics of the property and the available support for the allocation and land residual
methods, we have placed fair weight on these results, which show a wide range in land value; the former allocation
method being predominantly supportive of the local land sale indications.
On balance, we have concluded that the indicated land value, by the methods utilized, is as follows:
Price Per Allocation

AS IS VALUE CONCLUSION Building SF Method
Indicated Value $105.00 $252,000,000
SQFT Measure x 359,392 x 20.00%
Indicated Value $37,736,160 $50,400,000
Rounded to nearest $50,000 $37,750,000 $50,400,000
$/SF Basis $105.04 $140.24
LAND VALUE CONCLUSION $40,000,000

$/SF Basis $111.30
Prospective Land Value

Within this appraisal, we are also providing a prospective value Upon Completion and Upon Stabilization. As the
value of the land will be a component of the prospective value, we forecast the prospective land value for the future
prospective value date(s) as follows:
PROSPECTIVE VALUE CONCLUSION

Prospective Market* Prospective Land
Prospective Land Values Date Conditions Value Rounded Price Per Build. SF
Prospective Value Upon Completion: 1/18 4.91% $41,962,885 $41,950,000 $116.72
Prospective Value Upon Stabilization: 1/20 9.15% $43,658,186 $43,650,000 $121.46
* Forecast compound annual change in market conditions from the as is value date through prospective value date.

BALLSTON QUARTER SALES COMPARISON APPROACH

Methodology
Using the Sales Comparison Approach, we developed an opinion of value by comparing the subject property to
similar, recently sold properties in the surrounding or competing area. This approach relies on the principle of
substitution, which holds that when a property is replaceable in the market, its value tends to be set at the cost of
acquiring an equally desirable substitute property, assuming that no costly delay is encountered in making the
substitution.
By analyzing sales that qualify as “arm’s-length” transactions between willing and knowledgeable buyers and
sellers, we can identify value and price trends. The basic steps of this approach are:
 Research recent, relevant property sales and current offerings in the competitive marketplace;
 Select and analyze properties considered most similar to the subject, giving consideration to the time of sale,
change in economic conditions which may have occurred since date of sale, and other physical, functional, or
locational factors;
 Identify sales which include favorable financing and calculate the cash equivalent price; and
 Reduce the sale prices to a common unit of comparison, such as price per square foot of gross leasable area
sold;
 Make appropriate adjustments between the comparable properties and the property appraised; and
 Interpret the adjusted sales data and draw a logical value conclusion.
The most widely-used, market-oriented units of comparison for properties such as the subject are the sale price per
square foot of gross leasable area (GLA) purchased, and the overall capitalization rate extracted from the sale.
This latter measure will be addressed in the Income Capitalization Approach, which follows this methodology. An
analysis of the inherent sales multiple, where applicable, also lends additional support to the Sales Comparison
Approach.
It is noted that the qualitative adjustments included herein are presented for informational purposes, and are
intended only to convey to the reader our thought process in arriving at comparisons between the sales and the
subject in order to develop an opinion of value. While a matched-pair breakdown is the preferred method in
analyzing sales, none of the comparables presented offers enough similarity from which to complete such an
analysis and calculation. Therefore, our adjustments represent a qualitative rather than truly quantitative analysis.
Our analysis starts with an overview of the regional mall investment market, which can also lend perspective to the
lifestyle and regional centers such as the subject. The selected sales and the appropriate adjustments for
comparison with the subject are then discussed.
Regional Mall Market Overview

Stabilized regional malls are typically viewed as institutional grade assets that attract a wide range of investors,
including foreign and domestic insurance companies, large retail developers, pension funds, and real estate
investment trusts (REITs). The large capital requirements necessary to participate in this market, and the expertise
demanded to successfully operate an investment of this caliber, both limit the number of active participants and, at
the same time, expand the geographic boundaries of the marketplace. Due to the relatively small number of market
participants and the moderate amount of quality product typically available in the marketplace, strong demand exists
for the nation's quality retail developments under normal market conditions.

Following the collapse of the credit markets and subsequent recession that began at the end of 2007 liquidity was
extremely low. These events precipitated a nearly 80.0 percent decline in mall transaction volume between 2007
and 2008. However, a gradual thawing of the credit markets and the increased use of joint venture ownership
structures in late 2009 resulted in more than double the number of transaction being completed. This increased
activity continued through 2015 but is still well below the levels experienced prior to 2007.
Most institutional grade retail properties are seasoned centers with good inflation protection. These centers offer
stability in income and are strongly positioned to the extent that they are formidable barriers to new competition.
They tend to be characterized as having three to five department store anchors, most of which are dominant in the
market. Mall shop sales are at least $350 per square foot and the trade area offers good growth potential in terms
of population and income levels. Equally important are centers which offer good upside potential after face-lifting,
renovations, or expansion. With new construction down, owners have accelerated their renovation and
remerchandising programs. Little competition from over-building is likely in most mature markets within which these
centers are located. Environmental concerns and "no-growth" mentalities in communities continue to be serious
impediments to new retail developments.
To better understand where investors stand in today’s marketplace, we surveyed active participants in the retail
investment market. Based upon our survey, the following points summarize some of the more important “hot
buttons” concerning investors:
Occupancy Costs – This “health ratio” measure is of fundamental concern today. The typical range for total
occupancy cost-to-sales ratios falls between 10.0 and 15.0 percent. With operating expenses growing faster than
sales in many malls, this issue has become even more important. As a general rule of thumb, malls with sales under
$250 per square foot generally support ratios of under 10 percent; $250 to $300 per square foot support 10.0 to
12.0 percent; $300 to $400 per square foot support 12.0 to 14.0 percent; over $400 per square foot support 14.0 to
16.0 percent. Experience and research show that most tenants will resist total occupancy costs that exceed 15.0
to 18.0 percent of sales. However, ratios of upwards to 20.0 percent are sometimes achieved for certain higher
margin tenants. This appears to be by far the most important issue to an investor today. Investors are looking for
long term growth in cash flow and want to realize this growth through real rent increases. High occupancy costs
limit the amount of upside through lease rollovers.
Market Dominance – The mall should truly be the dominant mall in the market, affording it a strong barrier to entry
for new competition. Some respondents feel this is more important than the size of the trade area itself.
Strong Anchor Alignment – Having at least three department stores (four are ideal), two of which are dominant
in that market. The importance of the traditional department store as an anchor tenant has returned to favor after
several years of weak performance and confusion as to the direction of the industry. As a general rule, most
institutional investors would not be attracted to a two-anchor mall, unless the two anchors are strong performers or
include a better department store such as Nordstrom or Bloomingdale’s, for example.
Entertainment – Entertainment has become a critical element at larger centers as it is designed to increase
customer traffic and extend customer staying time. This loosely defined term covers a myriad of concepts available
ranging from mini-amusement parks, to multiplex theater and restaurant themes, to interactive virtual reality
applications. The capacity of regional/super-regional centers to provide a balanced entertainment experience will
serve to distinguish these properties from less distinctive formats such as power and smaller outlet centers.
Dense Marketplace – Several of the institutional investors favor markets of 300,000 to 500,000 people or greater
within a 5 to 7 mile radius. Population growth in the trade area is also very important. One advisor likes to see
growth 50.0 percent better than the U.S. average. Another investor cited that they will look at trade areas of
200,000± but that if there is no population growth forecasted in the market, a 50± basis point adjustment to the cap
rate at the minimum is warranted.

Income Levels – Household incomes of $60,000+ which tends to be limited in many cases to top 50 CBSA
locations. Real growth with spreads of 200 to 300 basis points over inflation are ideal.
Good Access - Interstate access with good visibility and a location within or proximate to the growth path of the
community.
Tenant Mix – A complementary tenant mix is important. Mall shop ratios of 35± percent of total GLA are considered
average with 75.0 to 80.0 percent allocated to national tenants. Mall shop sales of at least $350 per square foot
with a demonstrated positive trend in sales is also considered to be important.
Physical Condition – Malls that have good sight lines, an updated interior appearance and a physical plant in good
shape are looked upon more favorably. While several developers are interested in turn-around situations, the risk
associated with large capital infusions can add at least 200 to 300 basis points onto a cap rate.
Environmental Issues – The impact of environmental problems cannot be overstated. There are several investors
who won’t even look at a deal if there are any potential environmental issues no matter how seemingly insignificant.
Operating Covenants – Some buyers indicated that they would not be interested in buying a mall if the anchor
store operating covenants were to expire over the initial holding period. Others weigh each situation on its own
merit. If it is a dominant center with little likelihood of someone coming into the market with a new mall, they are not
as concerned about the prospects of losing a department store. If there is a chance of losing an anchor, the cost of
keeping them must be weighed against the benefit. In many of their malls they are finding that traditional department
stores are not always the optimum tenant but that a category killer or other big box use would be a more logical
choice.
Regional Mall Property Sales

The elements summarized above are all considered important from an investor’s perspective. Department stores
have also been, and continue to be, the critical element on the feasibility and long-term visibility of a regional mall.
Evidence has shown that mall property sales that include anchor stores have lowered the square foot unit prices
for some comparables, and have affected investor perceptions. In our discussions with major shopping center
owners and investors, we learned that capitalization rates and underwriting criteria have become more sensitive to
the contemporary issues affecting department store anchors. Traditionally, department stores have been an integral
component of a successful shopping center and, therefore, of similar investment quality if they were performing
satisfactorily.
Consolidation and increased competition from discount department stores such as Walmart and Target has resulted
in dramatic changes in this industry as many of the traditional department store operators have merged with other,
stronger operators or have closed their doors forever. We currently see a much more defined bifurcation in the
market between discount, mid-market and upscale department stores as they search to establish a branded identity
in the eyes of today’s sophisticated consumer. With all this in mind, investors are looking more closely at the strength
of the anchors when evaluating an acquisition. Most of our survey respondents were of the opinion that they were
indifferent to acquiring a center that included the anchors versus stores that were independently owned if they were
good performers. However, where an acquisition includes anchor stores, the resulting cash flow is typically
segregated with the income attributed to anchors (base plus percentage rent) analyzed at a higher cap rate then
that produced by the mall shops.
Cushman & Wakefield has extensively tracked regional mall transaction activity since 1991. We summarize the
most recent transactions on the following chart. These sales are inclusive of good quality Class A or B± properties
that are dominant in their market. Also included are weaker properties in second tier cities that have a narrower
investment appeal, such as the subject. As such, the most recent mall sales presented in this analysis show a wide
variety of prices on a per unit basis.


One obvious explanation for the wide unit variation is the inclusion (or exclusion) of anchor store square footage
which has the tendency to distort unit prices for some comparables. Other sales include only mall shop area where
small space tenants have higher rents and higher retail sales per square foot. A shopping center sale without
anchors, therefore, gains all the benefits of anchor/small space synergy without the purchase of the anchor square
footage. This drives up unit prices to over $500 per square foot of salable area.
While these unit prices implicitly contain both the physical and economic factors affecting the real estate, the
statistics do not explicitly convey many of the details surrounding a specific property. Thus, this single index to the
valuation of the subject property has limited direct application. The price per square foot of mall shop GLA acquired
yields one common form of comparison. However, this can be distorted if anchor and/or other major tenants
generate a significant amount of income. The following chart shows this relationship along with other selected
indices.
SELECTED AVERAGE TRANSACTION INDICES

Price Per Square Mean Price Price Per Square Mean Price Per Mean
Number of Foot of GLA Sold Per Square Foot of Mall Shop Square Foot of Sales Mean Cap
Year Transactions (Range) Foot GLA (Range) Mall Shop GLA Multiple Rate
1991 14 $156 - $556 $282 $203 - $556 $357 1.17 6.44%
1992 11 $136 - $511 $259 $226 - $511 $320 1.07 7.31%
1993 16 $73 - $471 $242 $173 - $647 $363 1.15 7.92%
1994 14 $83 - $387 $197 $129 - $502 $288 0.96 8.37%
1995 19 $53 - $686 $193 $93 - $686 $284 0.96 9.13%
1996 29 $44 - $534 $187 $119 - $534 $243 0.85 9.44%
1997 56 $21 - $594 $140 $36 - $770 $247 0.83 9.63%
1998 58 $27 - $571 $163 $80 - $1,021 $266 0.89 9.16%
1999 27 $31 - $614 $217 $39 - $571 $322 0.82 9.49%
2000 14 $25 - $602 $210 $85 - $1,021 $289 0.85 10.04%
2001 16 $22 - $1,046 $248 $65 - $784 $356 0.85 9.84%
2002 49 $41 - $688 $230 $52 - $1,127 $329 0.87 9.63%
2003 51 $36 - $1,226 $252 $81 - $837 $405 1.12 8.56%
2004 55 $32 - $1,427 $249 $63 - $1,226 $399 1.05 8.23%
2005 41 $29 - $797 $199 $29 - $1,170 $301 1.02 8.28%
2006 39 $21 - $656 $175 $70 - $818 $301 0.91 7.75%
2007 34 $47 - $828 $216 $74 - $1,104 $416 1.31 7.12%
2008 7 $21 - $941 $249 $39 - $1,792 $477 0.90 7.19%
2009 7 $30 - $1,586 $454 $56 - $1,586 $585 0.81 8.42%
2010 16 $7 - $1,078 $184 $26 - $1,182 $278 0.77 11.14%
2011 19 $13 - $1,050 $326 $24 - $1,107 $482 1.09 8.99%
2012 27 $13 - $1,303 $388 $26 - $1,850 $583 1.20 8.52%
2013 51 $17 - $1,387 $329 $17 - $2,928 $559 1.29 8.16%
2014 30 $12 - $3,594 $394 $30 - $3,594 $622 1.16 8.88%
2015 25 $4 - $2,150 $480 $11 - $4,234 $928 1.63 9.22%
2016 10 $109 - $1,458 $624 $203 - $2,230 $874 1.67 6.83%
Survey Low: $4 - $387 $140 $11 - $502 $243 0.77 6.44%
Survey High: $156 - $3,594 $624 $226 - $4,234 $928 1.67 11.14%
Mean: $42 - $1,029 $273 $79 - $1,323 $418 1.05 8.60%
Source: Cushman & Wakefield Retail Industry Group
The chart above shows that up until 1998, a declining trend in price has generally been in evidence as cap rates
have risen. Between 1999 and 2001, this trend continued, albeit at a more moderate pace. Beginning in mid- 2002
the market for regional malls began to heat up. This trend accelerated in 2003 with the average capitalization rate
decreasing over 100 basis points, and continued through 2007 decreasing an additional 144 basis points over the
four year period. In 2008, the market for regional malls slowed considerably with only 7 transactions completed.

While the limited number of transactions makes it difficult to draw conclusions, the average overall rate increased
slightly to 7.19 percent. In 2009 the number of transactions increased to 13, as the financial crisis began to ease.
However the average overall rate increased considerably, which is partially attributed to the quality of assets which
sold. In 2010, there were 16 transfers of regional malls, indicating an average capitalization rate of 11.14 percent.
Again the increase in capitalization rate is largely influenced by the quality of the centers transferring. In 2011, sales
activity increased slightly to 19 transactions. However the average capitalization rate declined significantly to 8.99
percent as the quality of the assets improved and included several Class A assets. Transaction activity remained
strong in 2012 with 27 sales at an average capitalization rate of 8.52 percent. This trend has continued in 2013
with 51 transaction at an average capitalization rate of 8.16 percent. We would note that transaction activity in
2013 includes several portfolio transfers. At year-end 2014, confirmed transactions totaled 30 with an average
capitalization rate of 8.88 percent. The increased capitalization rate is not necessarily indicative of a softening
market overall but rather a reflection of the strength of the individual assets that transferred during the year. In 2015,
twenty five transactions were confirmed with an average capitalization rate of 9.22 percent. Through the first half of
2016, ten recent mall transactions have been confirmed. Capitalization rates range from the low 4.0 percent territory
to 13.0 percent. The average capitalization rate is 6.83 percent. Through the end of the year, the expectation is that
capitalization rates will continue to compress as demand strengthens for premiere properties and secondary quality
alike.
As discussed, one of the factors that may influence the unit rate is whether or not anchor stores are included in the
total GLA that is transferred. Thus, a further refinement can be made between those malls that have transferred
with anchor space, and those which have included only mall shop GLA. From the survey, the average price per
square foot of mall shop GLA has performed within a broad range of $92 to $871 per square foot. This metric is
influenced by both the quality of the assets that trade in a particular year as well as the extent of income that was
contributed by non-shop GLA.
Analysis of Sales
We presented a summary of several transactions involving regional and super-regional-sized retail shopping malls
from which price trends may be identified for the extraction of value parameters. These transactions have been
segregated by year of acquisition so as to lend additional perspective on our analysis. Comparability in both physical
and economic characteristics are the most important criteria for analyzing sales in relation to the subject property.
However, it is also important to recognize the fact that regional shopping malls are distinct entities by virtue of age
and design, visibility and accessibility, the market segmentation created by anchor stores and tenant mix, the size
and purchasing power of the particular trade area, and competency of management. Thus, the Sales Comparison
Approach, when applied to a property such as the subject can, at best, only outline the parameters in which the
typical investor operates.
The sales deemed most comparable to the subject property are presented in the following table. It is noted that we
have considered a cross-section of sales for comparison with the subject, ranging from more urban-oriented and
lifestyle centers, to enclosed regional malls.

SUMMARY OF COMPARABLE IMPROVED SALES

PROPERTY INFORMATION TRANSACTION INFORMATION
Land to Total Parking Price/ Mall Mall
Property Name Land Building Center Shop Shop Year Year Ratio per Sold Shop Shop
No. Address, City, State (AC) Ratio GLA Sold GLA GLA Ratio Anchors Built Ren. 1,000 sf Quality Cond. Grantor Grantee Sale Date Sale Price GLA NOI/SF OAR Occup. Sales
1 Market Commons at Clarendon 8.41 0.92:1 396,978 396,978 137,960 35% Barnes & Noble, Crate & 2001 3.07 Excellent Excellent TIAA 485 Regency 5/16 $285,700,000 $719.69 $28.97 4.03% 97%
2800 Clarendon Boulevard Barrel, Container Store, Clarendon, Center
Arlington, VA Washington Sports, LLC
Pottery Barn, and Whole
Foods (GL)
2 Quaker Bridge Mall 59.47 2.39:1 1,083,428 356,062 356,062 33% JC Penney, Lord & 1976 2014 5.17 Good Excellent Simon IMI 2/16 $345,000,000 $968.93 $42.92 4.43% 97% $674
150 Quaker Bridge Mall Road Taylor, Macy's, and Sears Property
Lawrenceville, NJ Group
3 Deptford Mall 64.31 2.69:1 1,040,960 373,108 373,108 36% Macy's, JC Penney, 1975 2001 4.90 Good Good Macerich Heitman 1/16 $544,000,000 $1,458.02 $61.24 4.20% 94% $595
1750 Deptford Center Road Boscov's, and Sears
Deptford, NJ
4 Stonebridge at Potomac Towne 80.80 7.28:1 483,631 483,631 222,642 46% REI, Sport & Health, 2007 2012 5.45 Excellent Excellent Diamond JBG/Woodbri 12/15 $185,250,000 $383.04 $20.26 5.29% 89%
Center DSW, Golf Smith, Old Potomac dge Retail,
14900 Potomac Towne Place Navy, and Wegmans-GL Town Center, LLC
Woodbridge, VA LLC
5 Shops @ Skyview Center 13.34 0.86:1 676,492 508,817 99,521 15% BJ's Wholesale, Target, 2010 3.19 Good Good Onex Real The 6/15 $400,000,000 $786.14 $36.95 4.70% 100%
40-24 College Point Boulevard Nordstrom Rack, Estate Blackstone
Flushing, NY Marshall's, Best Buy, and Partners Group
Other Jr. Anchors
6 Downtown Crown (Retail 20.00 3.38:1 257,967 257,967 165,257 64% Harris Teeter and LA 2013 5.45 Excellent Excellent JBG Crown Retail 1/15 $162,800,000 $631.09 $30.75 4.87% 96%
Component) Fitness Retail,LLC Properties of
1106 Crown Park Highway America Inc
Gaithersburg, MD
7 Merrifield Town Center (Retail 7.48 3.84:1 84,928 84,928 39,928 47% XSports Fitness 2008 8.01 Good Good MTC RPAI Falls 1/15 $56,500,000 $665.27 $35.58 5.35% 100%
Condo Component) Commercial, Church
8190 Strawberry Lane LLC Merrifield,
Falls Church, VA (Uniwest) LLC
8 The Shops at Georgetown Park 3.84 0.55:1 303,574 303,574 111,181 37% Washington Sports, TJ 1871 2013 2.20 Excellent Excellent AG Jamestown 8/14 $272,500,000 $897.64 $44.58 4.97% 92%
3222-3276 M Street, NW Maxx/Homegoods, Georgetown Premier
Washington, DC Pinestripes, H&M, and Park Holdings Georgetown
Forever 21
I, LLC Park Corp
STATISTICS
Low 3.84 0.55:1 84,928 84,928 39,928 15% 1871 2001 0.00 Aug-14 $56,500,000 $383.04 $20.26 4.03% 89% $595
High 80.80 7.28:1 1,083,428 508,817 373,108 64% 2013 2014 0.00 May-16 $544,000,000 $1,458.02 $61.24 5.35% 100% $674
8 Mean 32.21 2.74:1 540,995 345,633 188,207 39% 1983 2010 #DIV/0! Jul-15 $281,468,750 $813.73 $37.66 4.73% 96% $635
Compiled by Cushman & Wakefield, Inc.

IMPROVED SALE ADJUSTMENT GRID

ECONOMIC ADJUSTMENTS (CUMULATIVE) PROPERTY CHARACTERISTIC ADJUSTMENTS (ADDITIVE)
Price PSF Property Age, Adj.
& Rights Conditions Market (1) Quality & Anchor Price
No. Date Conveyed of Sale Financing Conditions Subtotal Location Size Condition Alignment Economics Other PSF Overall
1 $719.69 Leased Fee Arm's-Length None Inferior $773.66 Similar Smaller Inferior Superior Inferior Similar $773.66 Similar
5/16 0.0% 0.0% 0.0% 7.5% 7.5% 0.0% -5.0% 5.0% -5.0% 5.0% 0.0% 0.0%
2 $968.93 Partial Interest Arm's-Length None Inferior $1,047.42 Similar Larger Similar Superior Superior Similar $785.56 Superior
2/16 0.0% 0.0% 0.0% 8.1% 8.1% 0.0% 5.0% 0.0% -15.0% -15.0% 0.0% -25.0%
3 $1,458.02 Partial Interest Arm's-Length None Inferior $1,577.58 Similar Larger Inferior Superior Superior Similar $709.91 Superior
1/16 0.0% 0.0% 0.0% 8.2% 8.2% 0.0% 5.0% 5.0% -15.0% -50.0% 0.0% -55.0%
4 $383.04 Leased Fee Arm's-Length None Inferior $415.22 Inferior Similar Similar Superior Inferior Similar $726.63 Inferior
12/15 0.0% 0.0% 0.0% 8.4% 8.4% 5.0% 0.0% 0.0% -5.0% 75.0% 0.0% 75.0%
5 $786.14 Leased Fee Arm's-Length None Inferior $860.82 Superior Similar Similar Superior Similar Similar $731.70 Superior
6/15 0.0% 0.0% 0.0% 9.5% 9.5% -5.0% 0.0% 0.0% -10.0% 0.0% 0.0% -15.0%
6 $631.09 Leased Fee Arm's-Length None Inferior $696.72 Similar Smaller Similar Inferior Inferior Similar $731.56 Inferior
1/15 0.0% 0.0% 0.0% 10.4% 10.4% 0.0% -5.0% 0.0% 5.0% 5.0% 0.0% 5.0%
7 $665.27 Leased Fee Arm's-Length None Inferior $734.46 Similar Smaller Similar Inferior Inferior Similar $734.46 Similar
1/15 0.0% 0.0% 0.0% 10.4% 10.4% 0.0% -10.0% 0.0% 5.0% 5.0% 0.0% 0.0%
8 $897.64 Leased Fee Arm's-Length None Inferior $999.07 Superior Similar Inferior Similar Superior Similar $749.30 Superior
8/14 0.0% 0.0% 0.0% 11.3% 11.3% -5.0% 0.0% 10.0% 0.0% -30.0% 0.0% -25.0%
STATISTICS
$383.04 - Low Low - $709.91
$1,458.02 - High High - $785.56
$813.73 - Average Average - $742.85
(1)
Market Conditions Adjustment
Compound annual change in market conditions: 2.00%
Date of Value (for adjustment calculations): 1/1/20

IMPROVED SALE LOCATION MAP

Percentage Adjustment Method

Adjustment Process
The sales we used were deemed the best available comparables to the subject property. The major points of
comparison for this type of analysis include the property rights conveyed, the financial terms incorporated into the
transaction, the conditions or motivations surrounding the sale, changes in market conditions since the sale, the
location of the real estate, its physical traits and the economic characteristics of the property.
The first adjustment made to the market data takes into account differences between the subject property and the
comparable property sales with regard to the legal interest transferred. Advantageous financing terms or atypical
conditions of sale are then adjusted to reflect a normal market transaction. Next, changes in market conditions are
accounted for, creating a time adjusted price. Lastly, adjustments for location, physical traits and the economic
characteristics of the market data are made in order to generate the final adjusted unit rate for the subject property.
We made a downward adjustment to those comparables considered superior to the subject and an upward
adjustment to those comparables considered inferior. Where expenditures upon sale exist, we included them in
the sales price.
Property Rights Conveyed
The property rights conveyed in a transaction typically have an impact on the price that is paid. Acquiring the fee
simple interest implies that the buyer is acquiring the full bundle of rights. Acquiring a leased fee interest typically
means that the property being acquired is encumbered by at least one lease, which is a binding agreement
transferring rights of use and occupancy to the tenant. A leasehold interest involves the acquisition of a lease, which
conveys the rights to use and occupy the property to the buyer for a finite period of time. At the end of the lease
term, there is typically no reversionary value to the leasehold interest.
This analysis has considered the leased fee interest in the subject property, similar to the comparable sales. As
such, no adjustment is considered necessary for property rights conveyed. Several of the sales involved partial
interest transactions, and therefore did not include a full bundle of ownership rights. However, in speaking with the
buyer’s representative and/or other brokers in the market, it was confirmed that they did not view the partial-interest
aspect to have influenced the pricing in the current market, but that in downturns, the partial-interest can have a
negative influence. Given the generally strong market for good quality malls at this time, no adjustments have been
made to the sales for partial-interest influences.
Market Conditions
The sales that are included in this analysis occurred between August 2014 and May 2016. As the market has
improved over this time period, we applied an annual adjustment of 2.00 percent.
Financial Terms
The financial terms of a transaction can have an impact on the sale price of a property. A buyer who purchases an
asset with favorable financing might pay a higher price, as the reduced cost of debt creates a favorable debt
coverage ratio. A transaction involving above-market debt will typically involve a lower purchase price tied to the
lower equity returns after debt service.
We analyzed all of the transactions to account for atypical financing terms. To the best of our knowledge, all of the
sales used in this analysis were accomplished with cash or market-oriented financing. Therefore, no adjustments
are required.

Conditions of Sale
Adjustments for conditions of sale usually reflect the motivations of the buyer and the seller. In many situations the
conditions of sale may significantly affect transaction prices. However, all sales used in this analysis are considered
to be "arm’s-length" market transactions between both knowledgeable buyers and sellers on the open market.
Therefore, no adjustments are required.
Location
An adjustment for location is required when the locational characteristics of a comparable property differ from those
of the subject property. As previously discussed, investors look for properties that are dominant in the market, have
dense population bases and where income levels are commensurate with or exceed national averages.
The location of the subject property is rated good, and it has average-to-good access and average-to-good visibility.
Each comparable has been adjusted accordingly.
Physical Traits
Each property has various physical traits that determine its appeal. These traits include size, age, condition, quality,
parking ratio and utility. Each comparable has been adjusted accordingly.
Economic Characteristics
The economic characteristics of a property include its occupancy levels, operating expense ratios, tenant quality,
and other items not covered under prior adjustments that would have an economic impact on the transaction. In
the case of the subject property, this can be an important consideration, yet subjective on many levels. In our
considerations for economic adjustments, the following points have been reviewed:
 Where mall shop sales productivity is inferior or superior to the subject, upward or downward adjustments are
viewed as being necessary to account for productivity of the project. The mall shop sales levels impact the
rental rates (and therefore income) generated at the comparables, supporting potential adjustments in this
category.
 Where occupancy levels vary significantly from the subject, adjustments have been considered.
 Tenant quality can be a subjective consideration, though this characteristic has been taken into consideration
in the overall thinking.
 Significant variances in net operating income, on a per square foot basis, can provide an indication of the
economic differences between the comparable and the subject. While this is inherently an income capitalization
approach method—it is effectively an inverse correlation to the capitalization rate—many appraisers will look
at this variance as a guide to how significant the economic differences may be. In theory, the variance here can
reflect differences in rental rates, operating expense ratios, occupancy, and the impact that the “GLA sold” can
have as an influence on the price per square foot variable. Ground lease income can also play into this
consideration, as providing revenue to the property, but GLA that is not included in the calculation of “owned”
area.
 Finally, where the transaction included only (or predominantly) mall shop spaces in the “sold” GLA, we have
scaled back the economic adjustment consideration due to this influence on the pricing (the subject’s “sold”
GLA includes major/anchor tenants).
On balance, we recognize that this adjustment can be relatively subjective. The NOI comparison can potentially be
a more precise adjustment, though it is an income capitalization approach view of the property. Comparisons to the
mall shop sales, rental rates and occupancy levels can help to quantify this type of adjustment, but remain on the

subjective side. We have taken steps to keep this consideration as objective as possible, but acknowledge the
difficulties in making comparisons with the subject. Each comparable has been adjusted accordingly.
Other
This category accounts for any other adjustments not previously discussed. Based on our analysis of these sales,
none require any additional adjustment.
Discussion of Comparable Sales

With the adjustments noted in mind, the following presents a brief discussion of the comparable sales utilized in the
analysis.
Comparable Sale No. 1
The first comparable sales is a May 2016 transaction involving Market Commons at Clarendon, located at 2800
Clarendon Boulevard in Arlington, VA. This urban-oriented lifestyle center is anchored by Barnes & Noble, Crate &
Barrel, Container Store, Washington Sports, Pottery Barn, and Whole Foods (GL), and is situated on a site totaling
8.41 acres. Its total gross leasable area (GLA) is 396,978 square feet, and 396,978 square feet were included in
this transaction. Anchor tenants occupy 40.8 percent of the total GLA. The property was constructed in 2001, with
the improvements considered to be of excellent quality and excellent condition. The property has a land-to-building
ratio of 0.92:1.00 and a parking ratio of 3.07 spaces per 1,000 square feet of building area.
The leased fee interest in this property sold from TIAA 485 Clarendon, LLC to Regency Center for $285,700,000,
or $719.69 per square foot of sold GLA. The overall rate at the time of sale was 4.03 percent and the occupancy
was 97.00 percent.
This represents the sale of the lifestyle center and office components of a larger 680,000 square foot mixed-use
development known as Market Commons Clarendon, located in the heart of the Clarendon neighborhood of
Arlington. The lifestyle center contains 296,000 square feet of retail space and was developed between 2001 and
2004. The office component contains approximately 97,000 square feet and was constructed in the 1940s and
renovated in the 1990s. The property also includes two parking garages totaling 1,219 spaces, which serve the
office, retail, and multi-family components. The NOI is based on year one pro forma. The parking garage represents
approximately 4.03 percent of the NOI, while the office represents approximately 8.5 percent of NOI. Whole Foods
exercised their first of four, 5-year renewal options in 2016. The retail component was 95 percent occupied, while
the office component was only 41.3 percent occupied. The office is being leased by Gridpoint, and the space is
currently being offered for sublease (the tenant is expected to vacant upon their lease expiration in December
2017). The office may be relet or possibly redeveloped with a higher density use, if approved by the county.
After all adjustments, this comparable indicates a value of $773.66 per square foot for the subject property upon
stabilization.
The next comparable involves a February 2016 sale in which a partial interest in Quaker Bridge Mall, located in
Lawrenceville, NJ, was sold from Simon Property Group to IMI for $345,000,000, or $968.93 per square foot of sold
GLA. The GLA included in this transaction was 356,062 square feet. This super regional center/mall is anchored
by JC Penney, Lord & Taylor, Macy's, and Sears and contains a total GLA of 1,083,428 square feet, with anchor
tenants occupying 63.4 percent. At the time of sale, the property was 97.00 percent occupied. The property
encompasses 59.47 acres, with a land-to-building ratio of 2.39:1.00 and a parking ratio of 5.17 spaces per 1,000
square feet of building area. It was constructed in 1976 and last renovated in 2014, with the improvements on this
property being considered to be good in quality, and in excellent condition.

This transaction involves the sale of a 50% interest. Quaker Bridge Mall is a two-level center with frontage along
U.S. Route 1, midway between Princeton and Trenton. The center was owned in a partnership with RREEF and
Simon Property Group. RREEF's 50% interest was marketed by Eastdil (the targeted marketing was launched in
September 2015, with final offers received from 3 bidders, with TIAA-CREF offering a gross price of $337.5 million.
Simon exercised a ROFR on 2/1/16 and flipped it on the same day to IMI (on behalf of CALPERs) at a gross price
of $345 million). Development approvals were in-place at the time of the sale for an additional 600,000 square feet
of GLA, including two department stores. While it is understood that these approvals expired in 2015, ownership
was in negotiations to extend them. Two fashion anchors that had been interested have since passed on the project.
Inline store sales were $530 per square foot excluding Apple in November 2015. Anchors perform near their
respective chain averages, except Sears, which is at 50% of its chain average. A $65.6 million renovation was
recently completed, which included new vertical transportation and a 600-seat food court on the second level. The
center was also substantially retenanted. Cheesecake Factory was added in 2013 and Brio in 2014. Property taxes
were reduced from approximately $4.3 million to approximately $3.5 million annually due to a successful tax appeal.
The overall rate at the time of sale was 4.43 percent.
stabilization.
Comparable No. 3 is a super regional center/mall known as Deptford Mall, located in Deptford, NJ. At the time of
sale, this center was anchored by Macy's, JC Penney, Boscov's, and Sears and was 94.00 percent occupied. The
total GLA of the center is 1,040,960 square feet, and 373,108 square feet were included in the sale. Anchor tenants
occupy 64.2 percent of this center’s foot GLA. The center’s site contains 64.31 acres, with a land-to-building ratio
of 2.69:1.00 and a parking ratio of 4.90 spaces per 1,000 square feet of building area. The center was constructed
in 1975, last renovated in 2001, and the improvements are considered to be of good quality and good condition.
Deptford Mall is a major shopping destination in southern New Jersey. This was part of a transaction in which
Heitman purchased a 49% interest in three properties (Deptford, FlatIron Crossing, and Twenty Ninth Street). The
occupancy and in-line sales reported were per Macerich as of contract date. Macerich acquired the center in 2007.
The partial interest in this property sold from Macerich to Heitman for $544,000,000, or $1,458.02 per square foot
of sold GLA in January 2016. The overall rate at the time of sale was 4.20 percent.
After all adjustments, this comparable indicates a value of $709.91 per square foot.
Next, Stonebridge at Potomac Towne Center is a lifestyle center located at 14900 Potomac Towne Place in
Woodbridge, VA. It is anchored by REI, Sport & Health, DSW, Golf Smith, Old Navy, and Wegmans-GL. The leased
fee interest in 483,631 square feet of this property sold in December 2015 from Diamond Potomac Town Center,
LLC to JBG/Woodbridge Retail, LLC for $185,250,000, or $383.04 per square foot of sold GLA. Situated on an
80.80 acre site, this center contains a total of 483,631 square feet, of which anchor tenants occupy 53.2 percent.
The occupancy rate at the time of sale was 89.00 percent. This center was constructed in 2007, last expanded/
renovated in 2012, and its improvements are of excellent quality and sold in excellent condition. The property has
a land-to-building ratio of 7.28:1.00 and a parking ratio of 5.45 spaces per 1,000 square feet of building area.
This is a sale of a Class A lifestyle center asset with the opportunity to add value and increase cash flow through
lease up of the remaining vacant space as well as the development of 25,500 square feet of additional retail space.
Wegmans is on a long-term ground lease until August 2028. Sports & Health is in a separate three-story building
until Sept 2027. The average occupancy cost for tenants that reported sales was 10.6 percent, with a Rent to Sale
ratio of 8.77 percent. NOI is based on year one proforma. The prospective buyer is plans to demolish a portion of
building 5 and redevelop and expand the building with an entertainment user. The total amount of retail space to

be demolished is 24,907 square feet, which includes 20,000 square foot anchor space and two in line retail spaces
totaling 4,907 square feet. The prospective buyer is planning on redeveloping the building with a 51,145 square
foot entertainment tenant. The buyer is also plans to develop a separate 25,500 square foot in line retail building.
Therefore, the total gross leasable area will increase to 534,369 square feet, upon completion of the proposed
redevelopment. The site also includes an additional density of 440,000 square feet of office space in Phase III, or
Land Bay 3. According to the potential buyer, they attributed very little to the office land in their sale price. The
overall rate at the time of sale was 5.29 percent.
stabilization.
In June 2015, the leased fee interest in Comparable No. 5, known as Shops @ Skyview Center, sold from Onex
Real Estate Partners to The Blackstone Group for $400,000,000, or $786.14 per square foot of sold GLA. This
transaction included GLA of 508,817 square feet. The overall rate at the time of sale was 4.70 percent. Located at
40-24 College Point Boulevard in Flushing, NY, this regional center is situated on a site measuring 13.34 acres and
contains a total GLA of 676,492 square feet. Anchors such as BJ's Wholesale, Target, Nordstrom Rack, Marshall's,
Best Buy, and Other Jr. Anchors occupy 84.9 percent of the total GLA. The center was constructed in 2010, and its
improvements are of good quality and good condition. The property’s land-to-building ratio is 0.86:1.00 and its
parking ratio is 3.19 spaces per 1,000 square feet of building area.
This is the sale of the retail portion of a larger mixed-use development that includes three residential towers with
448 residential units, medical office space and a six level parking garage. This is a strong retail location in the New
York Metro area. The Target, store is owned separately and was not included in the sale. Reportedly, 27 percent
of the retail space is net leased to credit tenants. At the time of sale this center was 100.00 percent occupied.
Comparable No. 6 is a lifestyle center known as Downtown Crown (Retail Component), which is located in
Gaithersburg, MD. Its total GLA is 257,967. Harris Teeter and LA Fitness anchor this center and occupy 35.9
percent of its total GLA. This property has a land area of 20.00 acres, a land-to-building ratio of 3.38:1.00, and a
parking ratio of 5.45 spaces per 1,000 square feet of building area. In January 2015, JBG Crown Retail,LLC sold
the leased fee interest in 257,967 square feet of GLA to Retail Properties of America Inc for $162,800,000, or
$631.09 per square foot of sold GLA. The overall rate at the time of sale was 4.87 percent. The center was 96.00
percent occupied. The center was constructed in 2013, exhibiting excellent quality and excellent condition.
Downtown Crown is the retail and residential mixed-use component of the 180-acre Crown Development.
Downtown Crown consists of 257,967 square feet of ground floor retail space (included in sale), and 538 residential
apartment units (owned by a third party), which are located within six stand alone retail buildings and two-mixed
use buildings spanning approximately 20 acres. Downtown Crown also includes three parking garages and a
parking lot. Harris Teeter is on a long-term ground lease (2034), along with a second bank pad site that will be
ground leased to Sun Trust Bank. Restaurants include Ruth's Chris, Ted's Montana Grill, Old Town Pour House,
and Coastal Flats. At the time of sale, the center was 73.7 percent occupied, but of the remaining 67,906 square
feet, 16,329 square feet was under active lease negotiations and 41,258 square feet was under active LOIs. NOI
is based on 96.0 percent occupancy, including the current leases in-place and active LOIs. The average household
income within a 3-mile radius was $129,000, with a population over 137,000.
stabilization.

In January 2015, the leased fee interest in 84,928 square feet of Comparable No. 7 sold from MTC Commercial,
LLC (Uniwest) to RPAI Falls Church Merrifield, LLC for $56,500,000, or $665.27 per square foot of sold GLA. This
lifestyle center is known as Merrifield Town Center (Retail Condo Component), which is located at 8190 Strawberry
Lane in Falls Church, VA on a 7.48-acre parcel. Its GLA is 84,928 square feet and anchors such as XSports Fitness
occupy 53.0 percent. The property’s land-to-building ratio is 3.84:1.00 and parking ratio is 8.01 spaces per 1,000
square feet of building area. At the time of sale, the property was 100.00 percent occupied. This center was
constructed in 2008. Its improvements are good in quality and in good condition.
This transaction involves the retail condominium portion of a mixed-use development known as Merrifield Town
Center. The retail component includes 85,000 square feet of space. This mixed use development includes 270
residential apartment/condo units, along with 23,850 SF of office space (not included in the transaction). There are
over 680 parking spaces dedicated to the commercial uses. National tenants include Cold Stone Creamery,
Chipotle, Noodles & Co., Citi and Panera Bread. The center is anchored by Xsports Fitness whose lease expires
in January 2023. The three-mile radius trade area population is over 142,000, with an average household income
over $140,000. The net operating income was derived from pro forma (5/14-4/15), and excludes the office space.
Condo units C1S, B2S, B1S, C1N, C2N, B1N, A1N of Phase 2 Vantage of Merrifield Town Center Condo. The site
is zoned PRM. The overall rate at the time of sale was 5.35 percent.
Finally, Comparable Sale No. 8 is a lifestyle center known as The Shops at Georgetown Park, located at 3222-
3276 M Street, NW in Washington, DC on a 3.84-acre site. The center contains a total GLA of 303,574 square feet,
with anchor tenants like Washington Sports, TJ Maxx/Homegoods, Pinestripes, H&M, and Forever 21 occupying
52.0 percent of the center. It was originally constructed in 1871 and last renovated in 2013, and its quality is
excellent and condition excellent. The property’s a land-to-building ratio is 0.55:1.00 and a parking ratio is 2.20
spaces per 1,000 square feet of building area.
In August 2014, the leased fee interest in 303,574 square feet of this property sold from AG Georgetown Park
Holdings I, LLC to Jamestown Premier Georgetown Park Corp for $272,500,000, or $897.64 per square foot of sold
GLA. The overall rate at the time of sale was 4.97 percent and the center’s occupancy rate was 92.00 percent.
In 2013, the property was redeveloped from an enclosed regional mall into an urban lifestyle center with large
anchor tenant spaces. All interior mall space was demolished and the floors had been filled in with reinforced
concrete. Today, the Shops of Georgetown contains 303,574 square feet within three buildings. The main building
contains 251,442 SF, the office building known as Canal House contains 34,415 SF, and the Market House,
occupied by Dean & Deluca, contains 17,717 SF. The property also includes a four-level parking garage with 668
spaces. Residential condominiums are located on top of the main shopping center building, but were not included
in this transaction. This property is the largest retail project in Georgetown, which is one of Washington's most
recognized and coveted retail destinations. Located at the intersection of two premiere shopping streets (M Street
and Wisconsin St NW). The property was free and clear of existing debt. NOI was based on the 2015 pro forma.
stabilization.
Summary of Percentage Adjustment Method

We have used the Sales Comparison Approach to first determine the Prospective Market Value Upon Stabilization
of the subject property. From that value, we have made certain adjustments to derive the Prospective Value Upon

Completion, as well as the As-Is Market Value. A detailed discussion of the adjustments is described later in this
section. It is obviously difficult to compare the subject with these varying sales. Nevertheless, the process utilized
here is a way of bringing the sales into a better comparison with the subject.
Prior to adjustments, the comparable improved sales reflect unit prices ranging from $383.04 to $1,458.02 per
square foot, with an average pre-adjusted price of $813.73 per square foot.
After adjustments, the comparable improved sales reflect unit prices ranging from $709.91 to $785.56 per square
foot, with an average adjusted price of $742.85 per square foot. Excluding the low and high indicators, a slightly
more narrow range of adjusted unit rates is evident, ranging from $726.63 to $773.66 per square foot, with a
calculated mean of $741.22 per foot.
It is noted that the adjustment chart presents an overview of the thinking in our analysis. It is noted that the
percentage rate adjustments are provided for analysis purposes only and are not intended to be precise
measurements of the differences between the comparables and the subject. Rather, they are used to provide a
better understanding of the thinking used herein.
With this in mind, larger percentage adjustments (say over 50%) would indicate more substantial differences
between the sales and the subject. Smaller adjustments therefore indicate only minor differences. We acknowledge
that the adjustment process is somewhat subjective in nature. However, we have been unable to support the
magnitude of the adjustments by paired sale analysis.
On balance, we are inclined to place more weight on those sales that required the least amount and magnitude of
adjustments, and therefore would reasonably be viewed as being most comparable with the subject. Likewise, we
would place less weight on the sales requiring more adjustments.
In the analysis herein, we have placed a fair amount of weight on Sale Nos. 1, 5, 6 and 7 for their general similarities
with the subject and lower adjustments. These sales reflect adjusted unit rates of $773.66, $731.70, $731.56 and
$734.46 per square foot, respectively, for the subject property.
Given the adjusted figures, coupled with supported from the remaining sales and the survey mean, we believe that
a value square foot within the range of $730.00 to $740.00 per square foot is supported for the subject property.
Therefore, we have concluded that the indicated value by the Percentage Adjustment Method was:
PERCENT ADJUSTMENT METHOD SUMMARY

Prospective Market Value Upon Stabilization
Indicated Value per Square Foot GLA $735.00
Owned GLA in Square Feet x 359,392
Indicated Value $264,153,120
LESS Deferred Maintenance $0
Adjusted Value $264,153,120
Rounded to nearest $100,000 $264,200,000
Per square foot $735.13
Prospective Value Upon Completion

General Overview
With this preliminary prospective value upon stabilization in mind, we can apply the Sales Comparison Approach
to value the subject upon completion. This analysis takes into consideration the leasing that is taking place during
the lease-up period of the forecast. When analyzing the subject on the basis of its first year income, at completion,

an investor would be cognizant of the additional risks and costs associated with bringing the property to stabilization.
Typically, consideration must be given to any costs of lease-up, including tenant improvements, leasing
commissions, and any concessions to be given.
Prospective Value Upon Completion (Method 1)
In order to estimate the value of the subject property on a prospective, upon completion valuation premise, we have
discounted the prospective stabilized value indication and discounted all appropriate costs and interim cash flows
into a present value in order to estimate the market value of the subject property.
Therefore, by deducting all appropriate lease-up costs, plus the interim income until the subject property reaches
stabilization on a present value basis, the following present value calculation is evidenced:
Method 1 Adjustment
"Upon Completion" Operating Basis
As Stabilized NPV
Net Present Value @ 7.25% $ 264,200,000 $ 228,638,615

NPV of Year 1 Cash Flow $6,273,307 $ 5,835,861
NPV of Year 2 Cash Flow $8,897,693 $ 7,700,061
Subtotal: $ 279,371,000 $ 242,174,537
Estimated Value "Upon Completion" $ 242,200,000
The interim costs and cash flows during our estimated holding period until the subject property reaches stabilization
are detailed in the Income Capitalization Approach section of this report, and reference is made thereto.
Prospective Value Upon Completion (Method 2)
With this first value indication in mind, we have also pursued a more traditional adjustment method to the
prospective value. In this second method of estimating a prospective, upon completion value of the property, we
have again utilized the prospective value indication upon stabilization (depreciating the prospective value by 2.0
percent per year), and deducted the costs associated with reaching stabilization such as rent loss during absorption,
leasing commissions, and tenant improvement costs.
Net Income Loss During Absorption

The loss of income during absorption has been calculated by taking the difference between the net operating
income “upon stabilization” and the net operating income “upon completion.” This calculation has been based on
our projected NOI at stabilization, calculated as follows:
CY 2018 CY 2019 CY 2020

Net Operating Income $ 8,536,730 $ 11,475,588 $ 13,339,035
Calculated Income Loss $ (4,802,305) $ (1,863,447) -
Capital Expenses
Since construction will be complete, there is no capital expense deduction included in this analysis of the property
upon completion (aside from the tenant improvements and leasing commissions discussed below).

Tenant Improvements
This deduction is based upon our estimate that, “upon completion,” there will remain a certain amount of space to
be leased. For this analysis, we have included specific deductions for TIs based upon the “upon completion” cash
flow projection included in the Income Capitalization Approach, and reference is made thereto.
Leasing Commissions
For this analysis, we have taken a specific deduction for leasing commissions, which has also been based upon
the “upon completion” cash flow projection developed in the Income Capitalization Approach.
Lease-Up Risk
Finally, since the buyer of the project “upon completion” is taking on additional risks associated with the lease-up
of space to bring the property to stabilization, we have included an entrepreneurial profit here to account for these
risks. We have applied a 10.0 percent risk factor to the above figures to account for a buyer’s potential risk with
absorption at the property.
Summary
Therefore, by deducting all appropriate lease-up costs, plus the interim income until the subject property reaches
stabilization on a present value basis, the following value calculation is evidenced:
Method 2 Adjustment
Prospective Value Upon Stabilization $ 264,200,000

Depreciated Value As-Is $ 253,940,792
Less:
Net Income Lost During Absorption $ (6,665,752)
Capital Improvement Costs $ -
Tenant Improvement Costs $ (4,174,012)
Leasing Commissions $ (521,753)
Profit @ 10.0% $ (1,136,152)
Subtotal: $ (12,497,669)

Rounded $ 241,400,000
Prospective Value Upon Completion Conclusion
To summarize, the following “upon completion” value indications are suggested based upon the two methods that
have been employed.

Summary
Method 1 $ 242,200,000
Method 2 $ 241,400,000
Concluded Value Upon Stabilization $ 264,200,000

Concluded Adjustment From Stabilization $ (22,500,000)
Overall, the two methods would imply that the variance between the prospective value upon stabilization and the
prospective value upon completion ranges between $22.0 million and $22.8 million. By comparison, the discounted
cash flow projection would suggest a variance between $226.1 million (upon completion) and $249.0 billion (upon
stabilization), or $22.9 million. On balance, we have considered a $22.5 million adjustment for the analysis, which
has been included in the value summary chart to develop the prospective value upon completion.
Thus, the prospective value opinion for the subject property, upon completion, via the Sales Comparison Approach,
will be based upon the following deduction calculation:
Prospective Stabilized Value Via Sales Comparison Approach $ 264,200,000

Less: Adjustment/Costs ($ 22,500,000)
Prospective Value Upon Completion $ 241,700,000
As-Is Market Value

In similar fashion, we have utilized the prospective market value(s) of the subject property to estimate the “as-is”
market value of the property today. In its present condition, the property requires completion of a majority of the
redevelopment, including leasing risk. To account for the costs associated with the redevelopment, we have
summarized ownership’s construction cost budget in the following chart.

Redevelopment Cost Budget

Ballston Quarter
(retail component allocation)
Cost Budgeted Per Sq/Ft

Component Cost 359,392
Acquisition Costs
Acquisition Costs $88,109,568 $245.16
Public Improvements $19,303,902 $53.71
- Subtotal $107,413,470 $298.88
Hard Costs
Demolition $2,286,387 $6.36
Above Grade Construction $55,020,097 $153.09
Permits/Utilities/Other $3,330,252 $9.27
Hard Cost Contingency $5,977,714 $16.63
- Subtotal $66,614,449 $185.35
Soft Costs
Architectural & Engineering $5,014,229 $13.95
Predevelopment/Other $2,230,153 $6.21
Tenant Allowances $29,360,260 $81.69
Leasing Commissions $6,703,337 $18.65
Tenant Coordination/Tenant Buyout/Leasing Legal $3,521,000 $9.80
Marketing & Advertising $3,059,000 $8.51
Legal & Accounting $995,000 $2.77
Financing $7,315,161 $20.35
Taxes/Insurance $1,416,835 $3.94
FF&E/Office/Travel/Lodging $1,001,890 $2.79
Soft Cost Contingency $6,047,969 $16.83
Development Fee $4,788,374 $13.32
- Subtotal $71,453,209 $198.82
Total Cost Estimate $245,481,128 $683.05
Less: CDA Taxable Net Proceeds/County Contributions ($19,303,902) ($53.71)
Less: CDA Tax Exempt Net Bond Proceeds ($15,441,843) ($42.97)
Less: Acquisition Costs ($88,109,568) ($245.16)
- Subtotal $122,625,815 $341.20
Source: Ballston Common Redevelopment Budget
In developing an “as-is” market value, we have taken the net construction cost figure from ownership’s budget
($122.6 million), which excludes their reported acquisition costs and the public financing aspects of the project.
Since the prospective value upon completion analysis incorporates certain tenant improvement allowance and
lease commission expenses, we have reduced the $122.6 million construction cost budget by those numbers.
Finally, we have added an allowance for entrepreneurial profit/risk.
The following chart presents a summary of this calculation for the net adjustment to the value.

As-Is Adjustment
Cost Cost/ Per Sq/Ft

Component Expense 359,392
Net Construction Costs $122,625,815 $341.20

Less: Tenant Allowances Included $ (4,174,012) ($11.61)
Less: Leasing Commissions Included $ (521,753) ($1.45)
- Subtotal $117,930,050 $328.14
Plus: Entrepreneurial Profit 15.0% $17,689,507 $49.22
Equals: Net As-Is Adjustment $135,619,557 $377.36
Rounded $135,600,000 $377.30
Source: Ballston Common Redevelopment Budget
Thus, we have estimated the as-is value of the subject property via the Sales Comparison Approach, based upon
the following deduction calculation:
Prospective Completion Value Via Sales Comparison Approach $ 241,700,000

As-Is Market Value $ 106,100,000

BALLSTON QUARTER INCOME CAPITALIZATION APPROACH

Methodology
The Income Capitalization Approach determines the value of a property based on the anticipated economic benefits.
The principle of “anticipation” is essential to this approach, which recognizes the relationship between an asset’s
potential future income and its value. To value the anticipated economic benefits of a property, potential income
and expenses must be projected, and the most appropriate capitalization method must be selected.
The most common methods of converting net income into value are Direct Capitalization and Yield Capitalization.
In direct capitalization, net operating income is divided by an overall capitalization rate to indicate an opinion of
market value. In the yield capitalization method, anticipated future cash flows and a reversionary value are
discounted to an opinion of net present value at a chosen yield rate (internal rate of return).
Investors acquiring this type of asset will typically look at year one returns but must also consider long-term
strategies. Hence, depending on certain factors, each of the income approach methods has merit. We used both
Yield and Direct capitalization, and each method is well-supported by ample, recent market data. As a result, we
placed roughly equal reliance on each of the techniques, and feel that a prospective purchaser would follow this
approach.
Potential Gross Income

Potential gross income is generated by a number of distinct elements:
 Minimum rent determined by the lease agreement

 Reimbursement of certain expenses incurred in the ownership and operation of the real estate
 Other miscellaneous revenues
Minimum base rent is a legal contract between landlord and tenant establishing a return to investors in the real
estate. The lease terms also dictate specific expense reimbursement charges that can be billed to the tenant.
Finally, miscellaneous income can be generated from a variety of sources. The first step in this approach is to
analyze all potential gross income, starting with an analysis of the subject’s tenancy.
Minimum Rental Income

Minimum rent produced by the subject property is derived from that paid by the various tenant types. The projection
utilized in this analysis is based upon the actual rent roll and our projected leasing schedule in-place as of the date
of appraisal, together with our assumptions as to the absorption of the vacant space, market rent growth, and
renewal/turnover probability. We incorporated all executed leases in our analysis. These transactions represent a
reasonable and prudent assumption from an investor's standpoint.
The rental income that an asset such as the subject property will generate for an investor is analyzed as to its
quality, quantity, and durability. The quality and probable duration of income will affect the amount of risk that an
informed investor may expect over the property's useful life. Segregation of the income stream along these lines
allows us to control the variables related to the center's forecasted performance with greater accuracy. Each tenant
type lends itself to a specific weighting of these variables as the risk associated with each varies.
Minimum rents forecasted at the subject property are essentially derived from various tenant categories, namely
specialty tenant revenues consisting of all in-line shops, food court, and anchor/major tenant revenues. In our
investigation and analysis of the marketplace, we surveyed, and ascertained where possible, rent levels being
commanded by competing centers. However, it should be recognized that large retail shopping centers are

generally considered to be separate entities by virtue of age and design, accessibility, visibility, tenant mix, and the
size and purchasing power of its trade area. Consequently, the best measure of minimum rental income is its actual
rent roll leasing schedule. As such, our analysis of recently negotiated leases for tenants at the subject provides
important insight into perceived market rent levels for the property. Inasmuch as a tenant's ability to pay rent is
based upon expected sales achievement, the level of negotiated rents is directly related to the individual tenant's
perception of their expected performance at the center.
Market Rent Estimate

Our analysis of market rent levels for tenants at the subject property has resolved itself to a variety of influencing
factors. Although it is typical that larger tenant spaces are leased at lower per square foot rates, the type of tenant
as well as the variable of location within the property can often distort this size/rate relationship. Please note that
our analysis of subject property rents is performed along various tenant lines, with segregation based upon
“specialty” tenants and “anchor/major” tenants.
In order to forecast market rent levels at the subject, current rent levels attained at the property must first be
analyzed. Second, a review of recent leasing can provide an indication of the property’s position in the market as it
exists today. Next—and perhaps most important for the analysis at hand—an analysis of market rent levels at
competing projects is considered. Finally, an occupancy cost analysis will provide a test of reasonableness to our
projections.
In-Line Shops
Leases In-Place
Upon completion, the subject property will contain a total of 248,132 square feet of in-line space. At this writing,
there are virtually no in-line shop leases due to the closure of the mall in preparation for redevelopment. The only
remaining ground level non-anchor tenant is Capital One, which recently signed a new lease to remain at the center;
but one which included several reduced rental rates in the interim until the redevelopment is complete.
Prior to vacating all of the shop tenants, it is our understanding that the average rental rate of in-line shops was
around $25.00 per square foot, with roughly 110,000 square feet of space occupied at year-end 2015 prior to
redevelopment. Given the condition of the center and the lack of leasing to prepare for redevelopment, this level of
rent for the subject property is viewed as being suppressed and not reflective of market upon completion of the
renovation, redevelopment, and repositioning.
With this in mind, we have considered ownership’s budgeted rents for the re-branded center, as well as comparable
rents at other centers in the market.
Budgeted Rents
Given the lack of recent leasing, we have placed our initial emphasis on ownership’s budgeted rents.
Analysis of the subject’s current leasing schedule can provide insight into our analysis of market rental rates at the
property. This information will then be compared to the market in order to make reasonable assumptions as to
market rent levels. As noted, there are a variety of influencing factors for rental rates, including the size of suite,
build-out, location, tenant merchandising strategy, and sales projections.
The following chart presents a summary of ownership’s budgeted rental rates for the in-line shops at Ballston
Quarter.

Budgeted Rents
Ballston Quarter
Mall Tower Retail Total Shops

Property Annual Rent/ Annual Rent/ Annual Rent/
Level Sq/Ft Rent Sq/Ft Sq/Ft Rent Sq/Ft Sq/Ft Rent Sq/Ft
All Non-Anchor Tenants

0 Concourse Level 15,764 $994,393 $63.08 -- -- -- 15,764 $994,393 $63.08
1 First Level 70,324 $3,225,326 $45.86 21,806 $959,057 $43.98 92,130 $4,184,383 $45.42
2 Second Level 68,145 $2,639,049 $38.73 30,201 $907,779 $30.06 98,346 $3,546,828 $36.06
3 Third Level 41,147 $1,143,248 $27.78 745 $20,115 $27.00 41,892 $1,163,363 $27.77
Total 195,380 $8,002,016 $40.96 52,752 $1,886,951 $35.77 248,132 $9,888,967 $39.85
Excluding Food Court

0 Concourse Level 7,531 $356,855 $47.38 -- -- -- 7,531 $356,855 $47.38
1 First Level 70,324 $3,225,326 $45.86 21,806 $959,057 $43.98 92,130 $4,184,383 $45.42
2 Second Level 68,145 $2,639,049 $38.73 30,201 $907,779 $30.06 98,346 $3,546,828 $36.06
3 Third Level 41,147 $1,143,248 $27.78 745 $20,115 $27.00 41,892 $1,163,363 $27.77
Total 187,147 $7,364,478 $39.35 52,752 $1,886,951 $35.77 239,899 $9,251,429 $38.56
As exhibited, rental rates tend to vary by location/level of the mall, with the concourse level being influenced by the
food court area, which has higher rents forecast than a majority of mall shops. Excluding the food court units, the
overall average rent for the project is budgeted at $38.56 per square foot.
From the above chart, we would expect to see a general pattern of an inverse relationship between mall level and
rent (or suite size and rent). That is, after the ground level, rental rates decrease on higher levels of the center. This
would typically be true of lower level/concourse space. However, in the case of the subject, a large open dining
concept (similar to food court) is planned that will feature high quality finish and seating areas unlike most food
courts in regional malls. Moreover, two restaurants will be incorporated into the concourse level food concept.
The objective here is to demonstrate a reasonably quantifiable pattern between property level and rent. As such, a
declining rental rate trend relative to level in the mall is generally in evidence.
Market Comparisons – Competing Properties

The next consideration made in determining market rent for the subject focuses on rents achieved at competing or
similar properties in the market. In this subsection, we present rent comparables for a myriad of properties in the
subject’s region that can be compared with budgeted rents at Ballston Quarter.
In this manner, we can first revisit the competing properties surveyed in the Retail Market Analysis section of this
report. These properties are listed below.

COMPETITIVE SHOPPING CENTERS

Traffic Mass Total Shop Distance
No. Property Description Anchor Tenants Rent/SF Sales/SF Count Transit Vacancy Vacancy to Subject
S Ballston Quarter Centre Type: Super-Regional Center/Mall Total GLA: 454,993 Macy's $30.00 - $50.00 - Glebe Ballston-MU -- -- --
4238 Wilson Boulevard Year Built: 1986 Anchor GLA: 259,613 Regal Cinemas per budget 19,874 0.2 miles
Arlington, VA Renovation: N/A Anchor Ratio: 57% Sport & Health Randolph 11,520
CVS 9,008
PRIMARY COMPETITION
1 The Market Com m ons ClareSub-Type: Lifestyle Center Total GLA: 299,978 Whole Foods - - Clarendon Clarendon 2.3% 5.0% 1.6 miles
2690-2801 Clarendon Blvd. Year Built: 1995 Anchor GLA: 162,018 Barnes & Noble 19,260 0.2 miles road miles
Arlington, VA Ren/Exp: 01/04 Anchor Ratio: 54% Crate & Barrel Fillmore 4,882 E / NE
Container Store 5,583
Health Club
2 Fashion Centre at Pentagon Sub-Type: Super-Regional Center/Mall Total GLA: 985,407 Macy's $60.00 - $75.00 $731.00 - $901.00 Hayes Pentagon City 1.0% 2.0% 4.3 miles
1100 S. Hayes St. Year Built: 1989 Anchor GLA: 472,729 Nordstrom 18,408 0.1 miles road miles
Arlington, VA Ren/Exp: 02/16 Anchor Ratio: 48% Army Navy 14,427 SE
7,473
3 Tysons Corner Center Sub-Type: Super-Regional Center/Mall Total GLA: 1,967,000 Macy's $55.00 - $75.00 $830.00 - $860.00 I-495 Tysons Corner 0.6% 1.1% 7.4 miles
1961 Chain Bridge Rd. Year Built: 1968 Anchor GLA: 885,000 Nordstrom 194,624 0.2 miles road miles
McLean, VA Ren/Exp: 05/14 Anchor Ratio: 45% Lord & Taylor Chain Bridge 3,141 W / NW
Bloomingdale's 40,813
Cinemas
4 Tysons Galleria Sub-Type: Super-Regional Center/Mall Total GLA: 820,000 Macy's $60.00 - $85.00 $973.00 - $973.00 I-495 Tysons Corner 1.6% 4.3% 9.4 miles
1651-2255 International Dr. Year Built: 1987 Anchor GLA: 511,933 Neiman Marcus 194,624 0.2 miles road miles
McLean, VA Ren/Exp: 97 Anchor Ratio: 62% Saks Fifth Avenue Chain Bridge 3,141 W / NW
40,813
5 Mosaic District Sub-Type: Lifestyle Center Total GLA: 575,617 Target - - Lee Hw y. Dunn-Loring 11.0% 18.8% 8.1 miles
2905 District Ave. Year Built: 2012 Anchor GLA: 238,944 Last Call Neiman 15,509 0.9 miles road miles
Falls Church, VA Ren/Exp: N/a Anchor Ratio: 42% Organic Market Gallow s Rd. 4,386 W
Cinemas 39,278
SECONDARY COMPETITION
6 D.C. USA Sub-Type: Regional Center Total GLA: 540,000 Target $35.00 - $40.00 - 14th St. Columbia Hts 3.3% 9.8% 8.5 miles
3200 14th St. NW Year Built: 2008 Anchor GLA: 358,677 Bed Bath & Beyond 23,976 0.2 miles road miles
Washington D.C. Ren/Exp: N/a Anchor Ratio: 66% Health Club Irving St. 12,415 NE
Other/Big Box 13,119
7 Wisconsin Place Sub-Type: Lifestyle Center Total GLA: 300,000 Bloomingdale's $40.00 - $60.00 $425.00 - $475.00 Wisconsin Friendship Hts 2.4% 10.1% 8.5 miles
5404 Wisconsin Ave. Year Built: 2009 Anchor GLA: 228,746 Whole Foods 22,086 0.2 miles road miles
Chevy Chase, MD Ren/Exp: N/a Anchor Ratio: 76% Western 9,466 N
20,711
8 Mazza Gallerie Sub-Type: Regional Center Total GLA: 300,000 Neiman Marcus $35.00 - $50.00 $490.00 - $500.00 Wisconsin Friendship Hts 10.9% 43.2% 8.5 miles
5300 Wisconsin Ave. NW Year Built: 1975 Anchor GLA: 224,540 Saks Fifth Avenue 22,086 0 road miles
Washington D.C. Ren/Exp: 99 Anchor Ratio: 75% T.J. Maxx Western 9,466 N
Cinemas 20,711
9 Springfield Tow n Center Sub-Type: Super-Regional Center/Mall Total GLA: 1,364,479 Macy's $25.00 - $40.00 $450.00 - $500.00 Franconia Franconia 7.3% 14.2% 11.3 miles
6500 Springfield Mall Year Built: 1973 Anchor GLA: 664,479 JCPenney 61,384 0.9 miles road miles
Springfield, VA Ren/Exp: 14 Anchor Ratio: 49% Target Frontier 7,771 S / SW
Dick's Sporting Goods 28,737
Cinemas
Health Club
Other/Big Box
10 Bethesda Row Sub-Type: Lifestyle Center Total GLA: 533,000 Barnes & Noble $40.00 - $55.00 - Montgomery Bethesda 3.6% 4.9% 10.5 miles
4801-4809 Bethesda Ave. Year Built: 1945/51 Anchor GLA: 139,580 Giant Food 10,470 0.4 miles road miles
Bethesda, MD Ren/Exp: 91/01/08 Anchor Ratio: 26% Cinemas -- 10,708 N
Health Club --
Survey Total GLA 7,685,481
Survey Minimum 299,978 $25.00 - $40.00 $425.00 - $475.00 5,583 0 0.6% 1.1%
Survey Maximum 1,967,000 $60.00 - $85.00 $973.00 - $973.00 194,624 14,427 11.0% 43.2%
Survey Average 768,548 $42.22 - $58.89 $649.83 - $701.50 39,455 7,610 3.7% 7.4%
From the survey, we can see that rental rates for in-line shops range widely; from approximately $25.00 to $85.00
per square foot, on average. The low calculated mean is shown to be $42.22 per square foot, while the high mean
is calculated to be $58.89 per square foot.
In general, projects such as Tysons Corner, Tysons Galleria, and Fashion Centre are viewed as being superior to
the subject, while other projects on the list would be considered similar or inferior. Excluding both Tysons properties
and Fashion Centre, the low and high mean rental rates calculate at $34.17 and $49.17 per square foot,
respectively. This moderately lower range of rents is considered to be a fair indicator of the subject’s ultimate
potential and is clearly more in-line with the subject’s budgeted rent levels.
Taking the analysis further, we have surveyed a number of recent lease transactions at several retail projects
around the metro area deemed to be mostly similar to the subject. Below is a table summarizing a number of in-
line shop leases at other relatively similar centers across the Washington D.C. market.

In-Line Lease Transactions

Cushman & Wakefield
Tenant
Rent CAM Tax Tenant Rent- Total Allowance
Property Name/ Property Total Occu- Year Mass Lease Term Per Per Per Sales/ Sales OccCost Rent Lease Per
No. Location Type GLA Levels pancy Built Transit Tenant Date (years) Sq/Ft Sq/Ft Sq/Ft Sq/Ft Sq/Ft Ratio Ratio Increases Type Sq/Ft
1 Confidential Center Urban 300,000 2 94.6% 2000- Yes Food LOI 10 1,738 $71.00 $16.00 $7.00 -- -- -- 10% in year 6 Net $50 This project is an urban/lifestyle center in a mixed
Washington D.C. Metro Lifestyle 2010 Men's Shoes LOI 10 1,501 $80.00 $16.00 $7.00 -- -- -- 3.0% per annum Net $60 use environment, anchored by an upscale grocery
Center Women's Apparel Feb-17 10 3,350 $65.00 $16.00 $7.00 -- -- -- 3.0% per annum Net $90 and shadow -anchored by a department store.
Nails Sep-16 10 872 $40.00 $16.00 $7.00 -- -- -- 3.0% per annum Net --
Food May-13 10 1,331 $70.00 $16.08 $7.44 $687 10.2% 13.6% One step Net --
Fashion Aug-13 5 1,931 $70.00 $18.36 $6.72 $287 24.4% 33.1% Flat Net --
Pilates/Fitness Mar-13 5 1,420 $23.37 $16.32 $7.44 -- -- -- 3.0% per annum Net $0
2 Confidential Center Urban 293,000 4 86.1% 1970- Yes Café Jul-13 3 251 $119.52 $0.00 $0.00 $596 20.0% 20.0% Flat Gross -- This project is an urban enclosed center anchored by
Washington D.C. Metro Enclosed 1980 Confidential Aug-11 6 2,389 $25.00 $0.00 $0.00 $88 28.3% 28.3% Flat Gross -- tw o department stores, w ith a traditional-to-upscale
Center Food Aug-10 10 3,255 $36.00 $25.80 $16.08 $596 6.0% 13.1% One step Net -- orientation.
Luggage Apr-10 10 981 $45.00 $25.80 $16.08 $497 9.1% 17.5% One step Net --
Fashion Jan-10 10 2,059 $37.00 $24.12 $7.08 $623 5.9% 10.9% Fixed steps Net --
Fashion Jan-09 10 1,688 $59.00 $25.80 $16.08 $870 6.8% 11.6% Fixed steps Net --
3 National Harbor Lifestyle 215,347 1 97.4% 2008 Bus Burger Bach Sep-15 10 3,086 $38.00 Fixed steps Net N/A National Harbor is a 4.5 M SF mixed-use development
137 National Plaza Center Starbucks Coffee Aug-15 10 1,592 $40.00 10% in year 6 Net N/A on the Potomac River, just south of Woodrow Wilson
Oxon Hill, MD Walrus Sep-14 10 6,706 $53.00 12% in year 6 Net N/A Bridge. The retail component contains 215,347 SF.
Elevation Burger Aug-14 10 1,722 $60.50 7.4% in year 6 Net N/A Base rents range from $30 to $80 per square foot.
4 Bethesda Row Urban 533,000 2 96.4% 1945/51 Yes Kit & Ace Apr-15 10 3,753 $40.00 One step Net N/A This is a new lease w ithin an urban-oriented lifestyle
4801 Bethesda Ave. Lifestyle center.
Bethesda, MD Center
5 Chevy Chase Center Urban -- -- -- -- Yes Pro Feed Pet Cent Oct-14 10 2,287 $40.00 One step Net N/A Pro Feed is a new lease w ithin a mixed-use develop-
5425 Wisconsin Ave. Mixed Use ment that includes office space above street level
Chevy Chase, MD Center retail.
6 Chavey Chase Plaza Urban -- -- -- -- Yes Santoria de Pandi Feb-13 10 1,580 $53.00 3.0% per annum Net N/A This is a new lease w ithin the street level retail area
5500 Wisconsin Ave. Mixed Use of a project in Chevy Chase.
Chevy Chase, MD Center
7 Chevy Chase Pavilion Power 146,003 1 98.6% 1990 Yes H&M Dec-13 10 28,218 $45.00 2.0% per annum Gross $40 Tenant took 3 floors, plus storage space in this
5335 Wisconsin Ave. Center pow er type center.
Chevy Chase, MD
8 Georgetown Park Power 254,475 2 1981 Yes Forever 21 Apr-14 15 20,722 $43.43 10% every 5 yrs. Net N/A These are new leases w ithin a redeveloped pow er
3222 M Street Center DMV Jan-14 15 12,753 $40.24 3.0% per annum Net N/A type center along M Street in Georgetow n. DSW
Washington D.C. DSW Shoes Jan-14 10 23,190 $20.00 $1.00/SF in yr. 6 Net N/A leased low er level space w ith less exposure.
9 Plaza at Landmark Com- 437,299 2 1963 No Dickey's BBQ Jan-16 10 2,000 $36.00 12% every 5 yrs. Net $19 In-line restaurant space in center anchored by L.A.
6198 Little River Tnpk. munity Fitness, Ross, Total Wine, Marshalls, Shoppers
Alexandria, VA Center Food Warehouse.
Survey Low 146,003 1 86.1% Jan-09 3 251 $20.00 $0.00 $0.00 $88 5.9% 10.9% $0
Survey High 533,000 4 98.6% Feb-17 15 28,218 $119.52 $25.80 $16.08 $870 28.3% 33.1% $90
Survey Median 293,000 2 96.4% Jan-14 10 2,000 $43.43 $16.08 $7.00 $596 9.6% 15.6% $45
Survey Mean 311,303 2 94.6% Sep-13 10 5,215 $50.00 $16.64 $8.07 $531 13.8% 18.5% $43
As shown, rental rates range from $20.00 to $119.52 per square foot, with a survey median of $43.43 per square
foot, and a calculated mean of $50.00 per square foot.
As with the previous rental rate indicators, some of the rents would be viewed as superior to the subject, while
others might be considered inferior. There are also a variety of retailer categories on the survey, which tend to
support some of the subject’s budget forecast; whereas food tenants would be expected to pay higher rental rates
than restaurants or larger suites. Moreover, while not explicitly broken out on the survey, rental rates tend to be
higher on the ground level or street front, with second level suites being lower, and third level tenants lower still.
Market Comparisons - Occupancy Cost Ratios

In further support of our forecast for market rent levels, we undertook a comparison of minimum rent-to-sales and
total occupancy costs-to-sales ratios. Generally, our research and experience with other regional malls shows that
the ratio of minimum rent-to-sales falls within the 7.0 to 10.0 percent range in the initial year of the lease, with 7.5
percent to 8.5 percent being most typical. By adding additional costs to the tenant, such as real estate tax and
common area maintenance recoveries, a total occupancy cost may be derived. Expense recoveries and other
tenant charges can add up to 100.0 percent of minimum rent and comprise the balance of total tenant costs.
The typical range for total occupancy cost-to-sales ratios falls between 11.0 and 15.0 percent. As a general rule,
where sales exceed $300 per square foot, 13.0 to 14.0 percent would be a reasonable cost of occupancy.
Experience and research show that most tenants will resist total occupancy costs that exceed 16.0 to 18.0 percent
of sales. Obviously, this comparison will vary from tenant to tenant and property to property.
In higher-end markets where tenants are able to generate sales above industry averages, tenants can generally
pay rents that fall toward the upper-end of the ratio range. Moreover, if tenants perceive that their sales will be
increasing at real rates that are in excess of inflation, they will typically be more inclined to pay higher initial base
rents. Obviously, the opposite would be true for poorer performing centers, in that tenants would be squeezed by

the thin margins related to below average sales. With fixed expenses accounting for a significant portion of the
tenants’ contractual obligation, there would be little room left for base rent.
In this context, we provided an occupancy cost analysis for a number of regional malls with which we had direct
insight over the past several years. This information is provided on the following chart. On average, these ratio
comparisons provide a realistic check against projected market rental rate assumptions.
MALL SHOP OCCUPANCY COST ANALYSIS / COMPARISON
Center Mall Shop Avg Expense Avg Rent/
Classification GLA GLA Rent Recovery Sales Sales Total Cost
Centers with Sales Over $500/SF 1,205,737 437,783 $ 65.74 $ 37.22 $ 721.45 9.09% 14.65%
Centers with Sales of $400-$499/SF 994,749 357,290 $ 34.28 $ 25.09 $ 439.30 7.84% 13.53%
Centers with Sales of $300-$399/SF 1,025,836 339,482 $ 28.04 $ 17.19 $ 349.46 8.03% 12.95%
Centers with Sales of $200-$299/SF 964,211 315,584 $ 20.14 $ 8.86 $ 254.76 7.91% 11.18%
Centers with Sales Below $200/SF 908,321 315,123 $ 14.30 $ 2.36 $ 168.73 8.40% 9.44%
Overall Survey Low: 203,430 66,833 $ 7.13 $ 0.21 $ 92.50 4.70% 7.48%
Overall Survey High: 2,615,026 1,070,471 $ 221.09 $ 79.24 $ 2,877.83 15.32% 23.58%
Overall Survey Median: 885,925 308,030 $ 29.14 $ 18.33 $ 374.68 7.99% 13.01%
Overall Survey Average: 914,346 319,929 $ 36.31 $ 21.18 $ 429.56 8.26% 12.87%
From this analysis we see that the ratio of base rent-to-sales ranges from approximately 4.70 to 15.32 percent,
while the total occupancy cost ratios vary from 7.48 to 23.58 percent when all recoverable expenses are included.
The surveyed average for the malls analyzed is 7.99 percent and 13.01 percent, respectively. Some of the higher
ratios are found in older malls situated in urban areas that have higher operating structures due to less efficient
layout and designs, older physical plants, and higher security costs.
We have also looked to the portfolio performance of several publicly traded companies to ascertain further support
for rent-to-sales ratios and total occupancy cost ratios. The following chart presents a summary of these findings:
PORTFOLIO OCCUPANCY ANALYSIS - YEAR END 2015
Comparable
No. of Mall Total Mall Average Average Mall shop Rent-Sales Occupancy
Company/REIT Properties GLA (000) Occupancy Rent/SF Sales/SF Ratio Cost Ratio1
General Growth Properties* 131 129,001 96.9% $73.12 $588 12.4% 13.4%
Simon Property Group 108 122,724 96.1% $48.96 $620 7.9% 12.6%
Macerich Company, The 50 48,479 96.1% $52.64 $635 8.3% 13.4%
CBL & Associates 82 63,548 93.6% $31.47 $374 8.4% 12.6%
Pennsylvania REIT 29 24,300 94.9% $51.64 $432 12.0% 12.5%
Taubman Centers 19 8,804 94.2% $60.38 $800 7.5% 14.0%
Washington Prime Group (Glimcher) 62 54,092 91.8% $21.63 $365 5.9% 12.7%
Westfield Corporation 34 43,600 95.9% $86.59 $726 11.9% 14.5%
Rouse Properties 36 24,889 90.9% $39.11 $350 11.2% 11.0%
Weighted Average 61 57,715 95.2% $53.32 $547 9.60% 13.09%
Footnotes
1 Ratio of Rent and reimbursement to sales for in-line mall shop tenants. Does not include overage rent.
*Includes all Retail Properties

Source: Annual 10K filings and various analyst reports.
As displayed, the regional mall REITs outlined above show rent to sales ratios averaging 5.9 to 12.4 percent
portfoliowide, with an overall average of 9.6 percent. Occupancy cost averages range from 11.0 to 14.5 percent,
averaging 13.1 percent overall. In general, while the rental ranges and ratio of base rent-to-sales vary substantially
from mall to mall and tenant to tenant, they do provide general support for the rental ranges and ratios that are
projected for the subject property.

Conclusion - Market Rent Estimate for In-Line Shops

Our conclusion for market rental rates at the subject property focuses on four primary factors: 1) existing or prior
rents in the center; 2) recent leasing; 3) market rental rates; and 4) projected tenant sales levels and occupancy
costs.
Since tenant recoveries are forecasted to be near the low- to mid-range for a property of the subject’s caliber, we
believe that the subject’s rent-to-sales ratio could support a range of 8.00 to 9.00 percent range. Further, based
upon the property’s projected sales levels, we do not believe that total occupancy costs should exceed 13.00 to
14.00 percent. We can test the subject’s rent achievement potential relative to forecasted sales levels. This
sensitivity is shown below.
RENT TO SALES CALCULATION

Average Rent to Average
Sales/SF Sales Ratio Rent
$ 460.00 x 8.00% = $ 36.80
$ 460.00 x 8.25% = $ 37.95
$ 460.00 x 8.50% = $ 39.10
$ 460.00 x 8.75% = $ 40.25
$ 460.00 x 9.00% = $ 41.40
From this rent-to-sales ratio analysis, we would be inclined to look toward an average market rental rate between
$37.00 and $41.50 per square foot for the subject property. This range of rates is generally supportive of
ownership’s budgeted rental rates, as well as the market rent levels seen at other properties in the region.
Again, some sensitivity must also be given to the total occupancy cost (see occupancy cost analysis in following
subsection).
Based upon the analysis, we have developed an average rental rate for the subject property. The following chart
presents a comparison of budgeted leases with our projected market rental rates for the property.
Rent Conclusion
Suite Size Applicable Pro-Rata Budgeted Market Rent
Category SqFt Share Rents Conclusion
Concourse Level 7,531 SF 3.1% $47.38 $46.00
First Level 70,324 SF 29.3% $45.86 $46.00
Second Level 68,145 SF 28.4% $38.73 $38.50
Third Level 41,147 SF 17.2% $27.78 $27.50
Tower Retail 1 21,806 SF 9.1% $43.98 $44.00
Tower Retail 2 30,201 SF 12.6% $30.06 $30.00
Tower Retail 3 745 SF 0.3% $27.00 $27.00
Total/Average: 239,899 SF 100.0% $38.56 $38.44
After considering all of the above, relative to the subject’s position in the market, we have developed a weighted
average rental rate of approximately $38.44 per square foot for the entire property based upon a relative weighting
of tenant space by size and location/level within the mall. This average rent is a weighted average rent for all in-
line mall tenants only, and excludes food court tenants and major/anchors.
In our analysis of the property, we have utilized the contract rents negotiated for current tenants within the property.
Upon expiration of these leases, the space is assumed to roll to our market rent conclusions.

Occupancy Cost - Test of Reasonableness

Our weighted average rent can next be tested against total occupancy costs in the mall based upon the standard
recoveries for new mall tenants. A total built-up occupancy cost can be derived by taking the weighted average rent
and adding projected occupancy costs for tenants in the mall. We have tested it on the basis of the total weighted
average rent for the entire mall, exclusive of the food court, which is treated separately. Our total occupancy cost
analyses can be found on the following chart.
OCCUPANCY COST ANALYSIS - Mall Shops

Estimated
Tenant Cost $/SqFt
Economic Base Rent
Weighted Average Rent $ 38.44
Occupancy Costs
Common Area Maintenance $ 13.27
Real Estate Taxes $ 5.61
Total Tenant Costs $ 57.33
Projected Average Sales $ 460.00

Rent-to-Sales Ratio 8.36%
Cost of Occupancy Ratio 12.46%
Our concluded average market rent equates to a rent-to-sales ratio of 8.36 percent, and a total occupancy cost of
12.46 percent of forecasted mall shop sales, which is reasonable, if not relatively low, and would suggest some
possible upside in rental rates. It is noted that the average CAM reimbursement in the above chart incorporates
ownership’s budgeted fixed CAM charge of $13.48 per square foot for mall shop tenants. A slightly lower rate of
$12.48 per square foot has been included for lower/concourse level and third level shop tenants.
Food Court Tenants
Furthering the analysis, we have ascribed an individual unit market rate to the concourse food court/food market
tenants. The leasing plan provides for an 8,233 square foot food court with 17 tenant units.
As noted previously, ownership has budgeted for an average food market rent of $77.44 per square foot, with sales
projected at $1,252 per square foot.
These budgeted figures are higher than the property’s former food court, which had attained rents averaging
approximately $50.00 per square foot, and average sales of $504 per foot. However, as with the in-line shops, the
subject’s prior food court area was average in condition and configuration compared to the redeveloped center.
The food court was also larger than the planned configuration.
In order to estimate a market rent for the food court area, we have also looked at a sampling of recent leasing
activity in other mall food courts for which we have direct insight. The following table illustrates the average rent
attainment levels for food courts in various malls for which we documented information. In total we surveyed 120
centers and have presented our findings based on both size classifications and overall survey median and average.

COMPARABLE FOOD COURT RENTS (AND SALES PRODUCTIVITY)

Avg Rent/ Total
Mall Shop FC FC FC FC FC Sales FC OCC OCC
Center Size GLA GLA # Units Size/Unit Rent Sales Ratio Cost Ratio
Under 500,000 SF 162,890 4,963 6 1,109 $ 50.90 $ 516.67 10.87% $ 43.14 18.24%
500,001 to 750,000 SF 206,532 5,180 6 818 $ 68.77 $ 557.58 13.07% $ 42.02 20.96%
750,001 to 1,000,000 SF 272,131 6,828 8 841 $ 69.64 $ 629.37 11.47% $ 57.94 21.75%
Over 1,000,000 SF 445,482 9,170 11 851 $ 126.11 $ 1,028.97 12.24% $ 91.57 21.65%
Survey Median: 312,864 7,052 9 788 $ 83.86 $ 725.89 11.46% $ 58.51 19.13%
Survey Average: 333,488 7,466 9 865 $ 95.35 $ 799.70 12.12% $ 70.40 21.26%
As exhibited, the chart shows that the surveyed food courts average 7,466 square feet. The average attained rent
is approximately $95.35 while the average food court sales are $799.70 per square foot. This results in an average
base rent-to-sales ratio of 12.12 percent. When all occupancy costs are included, the average occupancy cost ratio
is 21.26 percent.
Occupancy costs tend to be much higher for food court tenants compared to the other in-line shops. In addition to
paying all mall charges, food court tenants are usually assessed an additional charge for operation and
maintenance of the common seating area which typically contains 400 to 600 seats. These costs typically include
housekeeping, supplies, and other expenses associated with operation of the food court. Based on our survey
these costs can range from $3.75 to $285.26 per square foot with an overall average of $70.40 per square foot.
A number of reimbursement structures are common, including a pro-rata pass-through of the expense; a flat amount
per square foot; a multiple of tenant sales; or some combination of each. Probably the most common charge
involves a fixed rate charge increasing annually, which is similar to what is planned at the subject.
After analysis of leasing in comparable food courts, as well as our analysis of occupancy costs, we have ascribed
an average rental rate of $77.00 per square foot to the subject’s food market tenants. This amount appears
reasonable in light of the subject's market position, the leasing structure, and our experience with other regional
malls. A summary of total occupancy costs for food court tenants at the subject is shown in the following table.
OCCUPANCY COST ANALYSIS - Food Court

Estimated
Tenant Cost $/SqFt
Economic Base Rent
Weighted Average Rent $ 77.00
Occupancy Costs
Common Area Maintenance $ 15.48
Real Estate Taxes $ 5.61
Total Tenant Costs $ 98.09
Projected Average Sales $ 800.00

Rent-to-Sales Ratio 9.63%
Cost of Occupancy Ratio 12.26%
Major/Anchor Tenants
Overview
The final rent category to consider involves the subject’s major/anchor tenants.

The subject property is (and will be) anchored by Macy's, Regal Cinemas, Sport & Health and CVS. The Regal
Cinemas, Sport & Health, and CVS units are owned by mall ownership and leased to the respective retailers. Macy's
owns their store and underlying land and, as such, is excluded from the subject of this appraisal. However, to the
extent that they provide an economic contribution to the operation of the mall, we will recognize and address such
in our appraisal.
A summary of the contractual lease obligations for the subject’s major/anchor tenants is presented in the following
chart.
RENT ROLL SCHEDULE

As Of Value Date: Aug-15
Start End Area Contract Contract Lease
Tenant Name Suite Date Date ( SF ) Rent/Year Rent/SF Type(1)
Drug
CVS 1175 Dec-09 Jan-25 11,593 $405,744 $35.00
1 tenant subtotal 11,593 $405,744 $35.00
Health Club
Sport & Health 3018 Jul-98 Jun-20 32,605 $521,676 $16.00
1 tenant subtotal 32,605 $521,676 $16.00
Cinemas
Regal Cinemas 3300 Jul-99 Jun-19 67,062 $1,274,184 $19.00
1 tenant subtotal 67,062 $1,274,184 $19.00
GRAND-TOTALS 3 tenants in occupancy 111,260 $2,201,604 $19.79
Anchor Tenants
Macy's MAJ1 Oct-86 Nov-36 148,353 $0 $0.00
1 tenant subtotal 148,353 $0 $0.00
Note: Attained rent equals current rent annualized for twelve months, and it excludes contractual rent increases
(1) Lease Types as defined by The Appraisal Institute
All of the major/anchor tenants also have nominal obligations towards common area maintenance and real estate
taxes, with Macy’s being separately owned and assessed. Moreover, many of the major/anchor tenants have initial
base terms or renewal options that extend beyond our projection period and, as such, are not subject to rollover.
Major/Anchor Lease Comparables

To put the contract rents into perspective, we have considered other big-box/major/anchor lease agreements that
might be considered comparable to the subject property. These comparables are included in the following chart.

Major/Anchor Lease Transactions

Cushman & Wakefield
Tenant
Rent Free Allowance
Property Name/ Property Total Occu- Year Mass Lease Term Per Rent Lease Rent Per
No. Location Type GLA Levels pancy Built Transit Tenant Date (years) Sq/Ft Sq/Ft Increases Type (months) Sq/Ft
1 Shops at Dakiota Crossing Power 418,425 1 2012 Dick's Sporting Nov-16 10 50,018 $18.25 10% every 5 Net N/A N/A This is a new ly developed pow er center at New
3810 Fort Lincoln Dr. NE Center Goods years York and Dakiota in NE D.C. The project is shadow -
Washington D.C. anchored by Low e's and Costco.
2 Shops at Dakiota Crossing Power 418,425 1 2012 Marshall's Nov-16 10 22,500 $16.50 10% every 5 Net N/A N/A This is a new ly developed pow er center at New
3810 Fort Lincoln Dr. NE Center years York and Dakiota in NE D.C. The project is shadow -
Washington D.C. anchored by Low e's and Costco.
3 Virginia Gateway IV Lifestyle 665,563 1 1999 Total Wine and Apr-16 10 18,527 $16.75 10% every 5 Net N/A $45 Tenant's lease includes three 5-year options. The
13301 Gateway Center Dr. Center More years space is adjacent to Stein Mart.
Gainesville, VA
4 Cornerstone of Bethesda Community 76,664 3 1988 Staples Feb-16 10 15,771 $42.00 10% every 5 Net N/A $25 Staples is dow nsizing (4,050 SF) in a renew lease
6700 Wisconsin Ave. Center years that w ill begin summer 2017 after remodeling their
Chevy Chase, MD store.
5 Plaza America Community 66,594 1 1995 Staples Nov-14 10 15,097 $30.00 10% every 5 Net N/A N/A This is a suburban Washington D.C. community
11610 Plaza America Dr. Center years center anchored by Whole Foods and Michael's.
Reston, VA
6 Shops at Waldord Center Power 497,529 1 1992 Party City Apr-14 10 12,093 $14.50 10% every 5 Net N/A N/A This is a new major tenant lease in a suburban
2925 Festival Way Center years project south of Washington D.C.
Waldorf, MD
7 Ritchie Station Marketplace Power -- 1 2010 Modell's Feb-14 10 15,000 $13.00 10% every 5 Net N/A $5 Modell's leased this space in a new center
1771 Ritchie Station Court Center years anchored by BJ's Wholesale, Bed Bath & Beyond,
Capital Heights, MD and T.J. Maxx.
8 Cathedral Commons Mixed-Use 125,000 2 2014 Giant Food Jan-14 20 56,000 $20.00 Every 5 years Net N/A N/A This is a new grocery lease on the ground floor of
3400 Wisconsin Ave. a mixed-use multi-family development considered to
Washington D.C. be excellent in quality and condition.
9 The Yards Mixed-Use 2014 Harris Teeter Jan-14 20 49,180 $25.00 $2.00/SF in year Net N/A N/A Harris Teeter leased this ground floor retail space in
1212 4th Street 11 a mixed-use residential building that is excellent in
Washington D.C. quality and condition.
10 Mazza Gallerie Urban 293,000 4 86.1% 1975 Yes T.J. Maxx Oct-13 10 41,165 $22.75 One step Net -- -- This project is an urban enclosed center anchored
5300 Wisconsin Ave. Enclosed by tw o department stores, w ith traditional-to-
Washington D.C. Center upscale orientation.
11 Georgetown Park Power 254,475 2 1981 Yes HomeGoods Sep-13 10 47,800 $28.00 $2.00/SF yr. 6 Net -- $45 This is in a redeveloped pow er type center along M
3222 M Street Center Street in Georgetow n.
Washington D.C.
12 D.C. USA Urban 540,000 3 96.7% 2008 Yes DSW Shoes Jan-12 10 22,360 $23.50 10% every 5 Net -- $20 Three-level pow er center in Columbia Heights area
3100 14th Street NW Power years anchored by Target, Bed Bath, Washington Sports
Washington D.C. Center Club.
A Eastover Shopping Center Community 272,117 1 -- 1957 Planet Fitness Jan-16 10 18,932 $15.75 10% every 5 Net N/A $40 This is a new lease w ithin a suburban Washington
4805 Indian Head Highway Center years D.C. community center anchored by Giant, CVS,
Oxon Hill, MD and Dollar Tree.
B Winchester Plaza Community 88,413 1 1988/ Planet Fitness Nov-15 10 16,778 $14.00 10% every 5 Net N/A $15 Project involves former Kmart converted into three-
1675 S. Pleasant Valley Rd. Center 15 years tenant big-box w ith Dick's and Fresh Market. LL
Wincheter, VA spent $582,232 to bring space into shell condition.
C Marmusco Plaza Community 257,245 1 1961/ Gold's Gym Jul-14 11 22,500 $14.24 1.0% per yr. Net 6 $57 Todos Supermarket and Big Lots anchor this
13905 Jefferson-Davis Hwy. Center 12 staring in yr. 4 suburban center. Tenant also received 12 mos.
Woodbridge, VA Reduced rent (50%).
D CVS Pharmacy Free- 1 2016 CVS Pharmacy Oct-15 25 9,139 $24.07 Every 5 years Net 0 BTS Former store damaged by fire w as razed in favor
2509 Pennsylvania Ave. standing of new CVS, w hich w as completed and open in
Baltimore, MD March 2016.
E CVS Pharmacy Free- 1 2015 CVS Pharmacy Oct-15 25 13,225 $32.77 Flat Net 0 BTS This build-to-suit is located at a developing retail
1910 Crain Highway standing node near car dealership.
Bowie, MD
F Walgreens Strip Retail 1 2013 Walgreens Jul-13 25 15,878 $44.40 Flat Net 0 N/A Former strip center (built 1935) gutted for drug
1507 Mount Vernon Ave. Center store (no drive-thru).
Alexandria, VA
Survey Low 66,594 1 86.1% Jan-12 10 9,139 $13.00 0 $5

Survey High 665,563 4 96.7% Nov-16 25 56,000 $44.40 6 $57
Survey Median 272,117 1 91.4% Aug-14 10 18,730 $21.38 0 $33
Survey Mean 305,650 2 91.4% Nov-14 14 25,665 $23.08 2 $31
As shown, we have surveyed 12 big-box leases, 3 fitness/health club leases, and 3 pharmacy/drug store leases in
the general market area. The spaces range from 9,139 square feet to 56,000 square feet, averaging 25,665 square
feet. Rental rates range from $13.00 to $44.40 per square foot, with the survey mean calculated to be $23.08 per
square foot.
From the comparison, it would appear that the subject’s major/anchor tenant rents are at or near market levels. The
subject’s CVS lease (at $35.00/SF) is bracketed by the comparable drug store leases, which are difficult to compare
since these are typically freestanding with drive-thru facilities. Likewise, the subject’s Sport & Health lease (at
$16.00/SF) appears to be fairly well supported by the other fitness leases on the survey.
Cinema Lease Comparables

The subject’s cinema lease shows a current rental rate of $19.00 per square foot. Alternatively, Regal’s rent equates
to $106,181.50 per screen.

To determine a market rent estimate for the subject cinemas, we have looked to market support from other theater
leases. Due to the lack of data from the subject’s immediate region, we have extended our search to other areas
of the country.
Nationally, C&W has tracked over 150± cinema leases that range in size from 17,495 to 140,300 square feet, with
a survey mean of about 65,850 square feet. These leases show a wide range in rents from $4.77 to $49.16 per
square foot. The survey median is calculated to be $17.34 per square foot, with a mean rent of $18.60 per foot, and
an overall weighted average of $19.69 per square foot. Alternatively, these transactions suggest rents ranging from
$23,293 to $230,769 per screen, with a survey median of $71,438 and a mean of $85,134 per screen.
From this list, we have selected several leases for specific comparison to the subject property. In total, 17 leases
have been included, most of which have been selected for comparability in market size, property location, size of
cinema, and/or market orientation and age.
CINEMA LEASE COMPARABLES
Cushman & Wakefield
Allow- Rent-
Lease Leased # Sq/Ft Per Rent/ Rent/ Overage ance Sales/ Sales/ Sales
No. Name/Location Start Tenant Term Area (SF) Screens Screen Sq/Ft Screen Steps Rent PSF Comments Sq/Ft Screen Ratio
1 Shops at Avenue North Jan-16 AMC Theaters 15 yrs. 37,511 7 5,359 $ 16.31 $ 87,401 N/A N/A -- Second-generation lease on second level of -- -- --
Philadephia, Pennsylvania + opt. center adjacent to Temple University. Built in
2006, imps considered average in condition.
2 Confidential Jun-15 Confidential 15 yrs. 43,655 10 4,366 $ 18.00 $ 78,579 $19.00/sf (6-10) 5.0% over $6.0 $108.57 Gross lease at a mall redevelopment. $ 103.08 $ 450,000 17.46%
U.S. Mountain Region + opt. $20.00/sf (11-15) million Cinema will anchor lifestyle section of project,
adjacent mall and new parking deck.
3 Convention Centre 2015 Carmike 20 yrs. 47,475 12 3,956 $ 20.00 $ 79,125 10% every 5 yrs. Yes -- Newly constructed cinema adjacent Walmart, -- -- --
Altoona, Pennsylvania Cinemas + opt. Sam's Club, and Target.
4 Confidential Nov-14 Regal 15 yrs. 52,000 12 4,333 $ 23.00 $ 99,667 $25.30/sf (6-10) 15.0% over fixed Build to This is a gross lease in former department $ 156.54 $ 678,333 14.69%
U.S. Southwest Region Cinemas + opt. $27.83/sf (11-15) break and 10.0% Suit store space at mall. Tenant to pay increases
over secondary over base year assessment if property
break reassessed. NNN est at $8-$9/SF.
5 Regal Cinemas Avalon Aug-14 Regal 20 yrs. 57,000 12 4,750 $ 25.00 $118,750 Stepped increases N/A -- First generation lease in new lifestyle center -- -- --
Alpharetta, Georgia Cinemas + opt. anchored by Whole Foods.
6 Loudoun Station May-14 Starplex 10 yrs. 53,000 11 4,818 $ 23.00 $110,818 $24.00/sf (6-10) N/a -- This is the net lease of a new cinema in a -- -- --
43751 Central Station Dr. Cinema + opt. newly constructed lifestyle center.
Ashburn, Virginia
7 Marley Station Mall Apr-14 Marley Statio 7 yrs. 24,486 8 3,061 $ 10.00 $ 30,608 $11.00/sf (3-7) N/a -- Former Regal that vacated 1/14. Marley is a B- $ 60.00 $ 183,645 16.67%
Blen Burnie, Maryland Movies + opt. mall with Macy's, JCP, Sears. This is a gross
lease. Tenant took space as-is and planned
$300,000 in upgrades.
8 Snellville Exchange Apr-14 Carmike 20 yrs. 55,000 12 4,583 $ 21.00 $ 96,250 Stepped increases N/a -- First generation lease serving as anchor to -- -- --
Snellville, Georgia Cinemas + opt. Snellville Exchange, a 43-acre mixed-use
project across from The Avenue.
9 Confidential Nov-13 Confidential 20 yrs. 55,309 15 3,687 $ 20.69 $ 76,290 $20.80/sf (6-10) N/a -- Net lease for cinema anchor in new main $ 120.23 $ 443,333 17.21%
U.S. Mountain Region + opt. $21.78/sf (11-15) street lifestyle center with urban mixed use
$23.96/sf (16-20) design. CAM $2.65/SF, taxes $2.78/SF.
10 Worldgate Centre May-13 AMC Cinemas 15 yrs. 38,238 9 4,249 $ 17.00 $ 72,227 10% every 5 yrs. Yes $30.00 This is the renewal of an existing tenant that -- -- --
Herndon, Virginia + opt. was provided with TI allowance of $30/SF.
11 Westfield Vancouver Jan-13 Cinetopia 20 yrs. 84,167 23 3,659 $ 17.00 $ 62,210 10% every 5 yrs. 8.0% over fixed $150.00 Cinema, restaurant and wine bar in former $ 116.34 $ 425,729 14.61%
Vancouver, Washington + opt. breakpoints Mervyn's dept. store space at enclosed mall.
Tenant pays property taxes on premises.
Landlord paid for shell and tenant improve-
ments.
12 Brunswick Square Mall May-12 Starplex 10 yrs. 49,313 13 3,793 $ 10.00 $ 37,933 $11.00/sf (6-10) N/A -- Lease renewal in center anchored by Macy's, -- -- --
East Brunswick, New Jersey Cinema JCP. Tenant to renovate space to luxury
seating.
13 Village at Leesburg Jul-11 Cobb Theater 15 yrs. 51,297 12 4,275 $ 22.00 $ 94,045 5% every 5 yrs. N/A -- This is a 1,900-seat movie theater in a -- -- --
Leesburg, Virginia + opt. lifestyle center anchored by Wegman's, built
in 2011.
14 Country Club Mall Jun-11 Country Club 20 yrs. 22,326 6 3,721 $ 7.25 $ 26,977 10% every 5 yrs. N/A $50.00 This is the lease of an existing 6-screen $ 80.00 $ 297,680 9.06%
Cumberland, Maryland Cinema + opt. cinema in an enclosed center anchored by
Bon Ton, JCP, Sears. Reimbursements are
$10.50/SF.
15 Westfield Southcenter Aug-08 AMC Cinemas 15 yrs. 70,000 16 4,375 $ 29.60 $129,500 $32.56/sf (6-10) 8.0% of sales over -- New cinema added as a third level to mall $ 134.36 $ 587,813 22.03%
Tukwila, Washington + opt. $35.82/sf (11-15) natural breakpoint being expanded and renovated. Escalators
provide access into cinema from second level
food court area.
16 The Orchard at Westminster Apr-08 AMC Cinemas 15 yrs. 52,234 12 4,353 $ 24.00 $104,468 $25.00/sf (6-10) 8.0% of sales over $200.00 Cinema anchor at new regional/lifestyle $ 105.30 $ 458,333 22.79%
144th Ave. & Interstate 25 + 4 5-yr. $26.00/sf (11-15) natural breakpoint center w/ Super Target, Macy's, & JCPenney,
Westminster, Colorado opt. plus big-box units. Fixed CAM of $1.00/SF,
increasing every 5 year, plus pro-rata share of
taxes.
17 Kingstowne Town Center Feb-05 Consolidated 20 yrs. 68,950 12 5,746 $ 23.00 $ 132,154 10% incr every 5 yrs 10.0% of sales over $ 120.00 New cinema in mixed-use development that -- -- --
(PhII) Completi + 4 5-yr. thereafter $8.5 mil breakpoint includes options. Turn-key construction
Alexandria, Virginia on opt. allowance of $120/sf provided.
Suvey Low: 22,326 6 3,061 $ 7.25 $ 26,977 $ 30.00 $ 60.00 $ 183,645 9.06%
Survey High: 84,167 23 5,746 $ 29.60 $132,154 $ 200.00 $ 156.54 $ 678,333 22.79%
Survey Median: 52,000 12 4,333 $ 20.69 $ 87,401 $ 114.29 $ 110.82 $ 446,667 16.94%
Survey Mean: 50,704 12 4,299 $ 19.23 $ 84,529 $ 109.76 $ 109.48 $ 440,608 16.82%
Survey Total/Average: 861,961 202 -- $ 20.31 -- -- -- -- --
Obviously, the rental rates achieved for cinemas are highly impacted by the degree of construction and tenant
allowances covered by the landlord. Where landlords have materially constructed a majority of the unit and provided
allowances, rental rates often exceed the $20.00 per square foot mark. On the other hand, where tenants provide

much of the build-out, with an allowance provided by the landlord, rents typically fall below $15.00-$16.00 per
square foot.
For older cinemas that do not feature modern amenities such as stadium-style seating, or that have been impacted
by newer cinemas opening in their market, second-generation leases, if applicable or viable, typically range from
$5.00 to $10.00 per square foot.
In a somewhat dated survey, Dollars & Cents of Shopping Centers indicated that, typically, cinemas pay base rent-
to-sales ratios in a range of 16.0 percent, with total occupancy costs being around 21.0 percent. National chains
indicate a median total occupancy cost ratio of 22.1 percent. These general benchmarks appear well supported by
the comparable rent survey, which indicates rent-to-sales ratios ranging from 9.0 percent to 23.4 percent. The
median rent-to-sales ratio has been calculated at 19.6 percent; the mean at 18.5 percent.
As displayed in the rent comparables, rent-to-sale ratios, where available, range from 9.1 percent to 22.8 percent,
with a survey mean of 16.8 percent.
As it operates today, the subject’s rent-to-sales ratio is about 36.9 percent. Including reimbursements—which, in
this case includes CAM and tax recoveries amounting to $8.20 per square foot—the subject’s total occupancy cost
ratio is around 52.8 percent; fairly high and trending toward the higher-end of the expected range when compared
with the figures reported by Dollars & Cents and our survey of comparable leases. Assuming the increase in sales
utilized in the market share analysis, presented earlier in the report, a rent-to-sales ratio of 31.8 percent is indicated,
with total occupancy costs around 45.6 percent.
Using the subject’s assumes sales and applying the Dollars & Cents total cost ratio of 22.1 percent, a potential total
rent of about $13.18 per square foot is indicated, which results in a potential base rent of $4.98 after deducting
reimbursements.
On balance, based upon the analysis, with consideration given to the comparable leases and the subject’s location
and configuration (along with the number of competing screens in the market), it would appear that the in-place
rent is above market. However, the subject’s current sales levels are not viewed as being indicative of the cinema’s
potential; particularly following redevelopment. As such, we have placed a fair amount of weight on the market rent
comparisons. As suggested, rental rates at other theaters in the subject’s general market rage from $7.25 to $29.60
per square foot, with a survey mean of $19.23 per square foot. Alternatively, rents range from $26,977 per screen,
to $132,154 per screen, with a mean of $84,529.
Conclusion - Market Rent Estimate for Major/Anchor Tenants

Based upon our analysis of the market, in-place leases, recent leases, and rental rates at comparable projects, we
have determined market rental rates for each of the subject’s major/anchor categories. The market rent for the
subject’s health club/fitness tenant been estimated at $16.00 per square foot. For CVS, a market rent of $35.00 per
square foot has been utilized. Finally, we have estimated a market rent for the subject cinema at $14.00 per square
foot.
It is noted that Regal Cinemas lease includes three remaining 5-year option periods, with rents of $21.00, $23.00
and $25.30 per square foot, respectively. Since we view these rents to be above market and unsupportable at
Regal’s current and anticipated sales levels, we have allowed the options to stand using market rent at the time of
each option period.
Market Rent Synopsis

The following chart summarizes our market rent conclusion for each tenant category in the subject property.

MARKET RENT SYNOPSIS

Concourse Concourse Second Tower Retail Tower Retail Tower Retail Anchor
TENANT CATEGORY Food Level First Level Level Third Level 1 2 3 Drug Health Club Cinemas Tenants
Market Rent $77.00 $46.00 $46.00 $38.50 $27.50 $44.00 $30.00 $27.00 $35.00 $16.00 $14.00 $0.00
Lease Term (years) 7 7 7 7 7 7 7 7 10 10 10 10
Lease Type (reimbursements) Net Net Net Net Net Net Net Net Net Net Net Net
Contract Rent Increase Projection 2.5% per 2.5% per 2.5% per 2.5% per 2.5% per 2.5% per 2.5% per 2.5% per 10% every 10% every 10% every 10% every
annum annum annum annum annum annum annum annum 5 years 5 years 5 years 5 years
Opening Occupancy & Absorption of Vacant Space

At this writing, we are advised that Ballston Quarter is committed to a level of 29.21 percent of total GLA, as
summarized in the following chart.
Lease Status Report

Ballston Quarter
% of
Level of Total No.
Commitment Sq/Ft GLA Tenants Tenants
1 Leases Executed 115,005 22.65% 4 CVS, Regal, Sport & Health, Capital One
2 Leases Out For Signature 26,380 5.20% 3 Punch Bowl, AT&T, Luxury Nail Spa
3 Letters Of Intent 6,914 1.36% 4 Drybar, Alex & Ani, Bartaco, Bartaco Market
4 Negotiations 359,446 70.79% 58 58 potential tenants identified on report
Total 507,745 100.00% 69

Source: Lease Projection Report dated 6/6/2016 and current rent roll
The actual lease commitments reported for “leases executed” are only the four tenants listed and discussed herein.
For the next category, only three tenants are currently listed, including 23,040 square feet designated for Punch
Bowl, which is an entertainment tenant planned for levels one, two and three of the center. The third grouping
shows four tenants in the “letters of intent” (LOI) stage, while the final category includes approximately 58 units with
multiple potential tenants that ownership has identified for the redevelopment; all of which have varying degrees of
progress to-date. Included among this latter category are tenants such as Buredo, District Donut, Mason Dixie
Biscuit, and Red Hook Lobster Pound (among others) anticipated for the food court/market area, as well as in-line
shop tenants and restaurants such as Shake Shop, Potomac Running, Starbucks, Indigo, Verizon, Footlocker,
Lenscrafters, Kay Jewelers/Jared, Chick Fil A, Madewell/Talbot’s, Ulta, Aveda, Victoria’s Secret/Pink, Lush, Oakley,
GNC, Sunglass Hut, and Tumi (among others). In a number of cases, multiple tenants have been identified for
available tenant spaces in the mall. As well, some of the tenants were previous retailers in the property.
With this initial level of tenant interest and commitment in mind, the next step in the analysis involves projecting an
opening level of occupancy within the center, as well as a reasonable time period in which to lease-up space to
stabilization.
To support a projection for lease-up at the subject, and to get an indication of potential absorption, we have taken
into consideration a number of factors, including the subject’s location and configuration, supply and demand trends
in the subject’s market area, the demographic profile of the trade area, and tenant commitments to the project,
among other factors. We have also considered the prior operations of the center, prior occupancy history, and
competing projects in the market.

To begin, we have analyzed a schedule of mall and power center openings nationwide. This information is provided
on the following chart. The chart is divided into regional malls and power centers for comparison.
OPENING OCCUPANCY & ABSORPTION COMPARABLES - Cushman & Wak efield
Total In-Line
Center Opening Total Mall Shop Mall Shop Opening Opening Absorption Absorption
Property Location Type Date GLA GLA * Ratio Occupancy Occupancy Period (Yrs.) Period (Mos.)
REGIONAL MALLS & SPECIALTY CENTERS
1 New City Chicago, IL Urban Mixed Use 9/1/2015 400,000 235,354 58.8% 85.0% 74.5% 1.01 12.07
2 The Mall at University Tow n Center Sarasota, FL Super-Regional 10/16/2014 862,000 440,000 51.0% 90.0% 80.4% 1.63 19.58
3 Avalon Alpharetta, GA Mixed Use 10/29/2014 474,000 292,154 61.6% 90.0% 83.8% 1.60 19.15
4 Liberty Center West Chester, OH Mixed Use 10/22/2015 452,000 232,000 51.3% 86.0% 72.7% 1.20 14.41
5 City Creek Center Salt Lake City, UT Urban Regional Mall 3/22/2012 629,034 348,637 55.4% 90.0% 81.9% 1.17 14.00
6 Confidential Regional Center Casa Grande AZ Regional Open Air 11/1/2007 1,034,080 596,647 57.7% 86.6% 48.8% 5.30 63.56
7 Confidential Regional Center SanTan Village Regional Center Regional Open Air 11/1/2007 1,128,867 537,015 47.6% 80.0% 60.0% 6.59 79.09
8 The Mall at Partridge Creek Macomb, MI Super-Regional 10/14/2007 640,000 342,251 53.5% 100.0% -- --
9 Confidential Lifestyle Center Southern California Lifestyle Center 1/1/2007 422,080 75.0% 61.3% 5.68 68.21
10 The Prom enade at Sacram ento Gatew ay Sacramento, CA Lifestyle Center 12/6/2006 665,000 232,750 35.0% 91.5%
11 Coconut Point Estero, FL Lifestyle Center 11/10/2006 1,200,000 170,122 14.2% 94.6%
12 The Mall at Turtle Creek Jonesboro, AR Super-Regional 10/15/2006 750,000 90.0%
13 Pinnacle Hills Prom enade Rogers, AR Lifestyle Center 10/1/2006 600,000 515,924 86.0% 69.4%
14 Northfield at Stapleton Denver, CO Lifestyle Center 10/1/2006 1,200,000 258,000 21.5% 81.0%
15 Confidential Lifestyle Center North Denver Market CO Lifestyle Center 11/1/2005 663,260 65.1% 31.6% 3.59 43.12
16 Sim i Valley Tow n Center Simi Valley, Ventura County, CA Regional Open Air 10/1/2005 600,830 350,830 58.4% 86.3% -- --
17 Confidential Lifestyle Center Central Denver Market CO Lifestyle Center 10/1/2005 1,112,424 94.2% 81.0% 3.68 44.14
18 Confidential Lifestyle Center Reno, NV Lifestyle Center 10/1/2005 647,028 74.0% 66.8% 5.68 68.21
19 The Shops at La Cantera San Antonio, TX Lifestyle Center 9/1/2005 1,018,577 389,577 38.2% 96.8% 91.7% 1.00 12.00
20 Northlake Mall Charlotte, NC Super-Regional 9/1/2005 1,072,610 371,712 34.7% 95.6% 87.4% 0.42 5.00
21 Im perial Valley El Centro, CA Super-Regional 3/5/2005 765,950 212,704 27.8% 96.0% 88.0% -- --
22 Vaughan Mills Ontario, Toronto Super-Regional 11/5/2004 1,200,000 497,220 41.4% 93.0% 68.5% -- --
23 Jordan Creek Tow n Center West Des Moines, IA Super-Regional 10/1/2004 1,468,340 456,255 31.1% 89.9% 86.2% -- --
24 Victoria Gardens Rancho Cucamonga, CA Regional Open Air 10/1/2004 1,054,464 565,504 53.6% 95.0% 80.9% -- --
25 Cincinnati Mills Cincinnati, OH Super-Regional 8/10/2004 1,481,426 401,751 27.1% 90.0% 84.0% -- --
26 Coastal Grand Mall Mrytle Beach, SC Super-Regional 3/17/2004 905,103 298,437 33.0% 95.0% 86.0% -- --
27 Queens Center Elmhurst, NY Super-Regional 3/10/2004 622,297 154,154 24.8% 98.0% 95.0% -- --
28 Saint Louis Mills St. Louis, MO Super-Regional 11/1/2003 1,083,400 504,839 46.6% 80.0% 70.0% -- --
29 Fashion Show Las Vegas, NV Super-Regional 10/1/2003 1,751,000 536,352 30.6% 84.0% -- --
30 Colorado Mills Denver, CO Super-Regional 11/14/2002 1,153,663 569,845 49.4% 81.2% 6.57 78.90
31 Mall At Wellington Green Wellington, FL Super-Regional 11/1/2002 1,300,000 490,000 37.7% 83.0% -- --
32 Discover Mills Atlanta, GA Super-Regional 10/2/2002 1,200,000 519,666 43.3% 80.1% -- --
33 Mall at Millenia Orlando,FL Super-Regional 10/2/2002 1,200,000 565,000 47.1% 80.0% -- 4.00
34 Parkw ay Place Mall Huntsville, AL Super-Regional 10/2/2002 635,000 281,000 44.3% 75.0% -- --
35 The Village at Merrick Park Coral Gables, FL Super-Regional 9/2/2002 4,360,000 370,000 8.5% 65.0% -- --
36 Triangle Tow n Center Raleigh, NC Super-Regional 8/2/2002 1,400,000 456,000 32.6% 90.0% -- --
37 Streets at Southpoint Durham, NC Super-Regional 3/8/2002 1,300,000 592,600 45.6% 95.0% -- --
38 Robinson Tow n Center Pittsburgh, PA Super-Regional 10/26/2001 850,000 315,000 37.1% 85.0% -- --
39 Polaris Fashion Place Columbus, OH Super-Regional 10/25/2001 1,500,000 447,000 29.8% 81.0% 1.33 16.00
40 Chandler Fashion Center Chandler, AZ Super-Regional 10/17/2001 1,300,000 510,000 39.2% 94.0% -- --
41 International Plaza Tampa, FL Super-Regional 9/1/2001 1,260,000 581,000 46.1% 83.0% 0.33 4.00
42 The Lakes Mall Muskegon, MI Super-Regional 8/15/2001 553,000 200,000 36.2% 85.0% -- --
43 Galleria at Roseville ** Roseville,CA Super-Regional 8/25/2000 1,070,000 467,000 43.6% 99.0% -- --
44 FlatIron Crossing ** Broomfield,Colorado Super-Regional 8/11/2000 1,120,000 688,000 61.4% 85.0% 0.50 8.00
45 Opry Mills Nashville,Tennessee Super-Regional 5/11/2000 1,200,000 559,200 46.6% 93.0% -- --
POWER CENTERS/ OUTLET CENTERS

1 Outlet Shoppes at Oklahom a City Oklahoma City, OK Outlet Center 8/1/2011 348,000 348,000 100.0% 96.0%
2 Hilton Head I Outlet Center Hilton Head, SC Outlet Center 3/1/2011 177,199 98.0%
3 Shops at Grand River Birmingham, AL Pow er Center 11/1/2010 330,000 86.0%
4 Mebane Outlet Center Mebane, NC Outlet Center 11/1/2010 319,000 319,000 100.0% 100.0%
5 Gatew ay Center New York, NY Pow er Center 9/21/2009 1,000,000 550,000 55.0% 90.0%
6 Cincinnati Prem ium Outlets Monroe, OH Outlet Center 8/6/2009 400,000 400,000 100.0% 85.0% 85.0%
7 Orlando Prem ium Outlets Phase II Orlando, FL Outlet Center 11/1/2008 114,000 114,000 100.0% 100.0%
8 Philadelphia Prem ium Outlets Limerick, PA Outlet Center 11/8/2008 548,902 441,778 80.5% 88.0% 84.6% 0.58 7.00
9 Deer Park Outlet Center Long Island, NY Outlet Center 10/23/2008 682,000 682,000 100.0% 70.0% 70.0%
10 The Streets of Indian Lake Hendersonville, TN Lifestyle Center 3/1/2008 235,851 141,630 60.1% 92.7% 86.2% -- --
11 Confidential Pow er Center South Denver Market CO Pow er Center 1/1/2007 785,000 59.1% 38.8% 2.42 29.08
12 St. John's Tow n Center Jacksonville, FL Pow er Center 3/1/2005 1,500,000 1,500,000 100.0% 100.0% 100.0% -- --
13 The Streets at Tanasbourne Hillsboro, OR Lifestyle Center 10/23/2004 367,000 95.0% -- --
14 Denton Crossing Denton, TX Pow er Center 10/1/2004 391,663 329,663 84.2% 96.0% -- --
15 Destin Com m ons Destin, FL Lifestyle Center 11/1/2003 660,000 660,000 100.0% 98.2% -- --
16 Prescott Gatew ay Prescott, AZ Pow er Center 3/1/2002 547,335 303,147 55.4% 80.0% -- --
17 The Crossing at Sm ithfield Smithfield, RI Pow er Center 7/2/2002 642,015 122,481 19.1% 100.0% -- 8.00
18 Hollyw ood & Highland Hollyw ood, CA Lifestyle Center 11/9/2001 630,000 233,000 37.0% 89.0% -- --
19 Desert Passage at Aladdin Las Vegas, NV Specialty Center 8/17/2000 462,000 462,000 100.0% 95.0% -- --
Survey Mean - Regional Malls: Survey Mean - Regional 1,051,232 413,788 42.2% 87.7% 79.7% 2.78 32
Survey Mean - Pow er Centers: M ll
Survey Mean - Pow er 533,682 440,447 79.4% 89.2% 85.2% 1.50 15
Survey Mean - Overall: C t Mean - Overall:
Survey 897,584 421,058 52.4% 88.2% 81.0% 2.65 29
Survey Median - Overall: Survey Median - Overall: 775,475 401,751 46.6% 90.0% 84.0% 1.60 16
* Pow er centers represent total GLA.
** Total GLA includes attached Lifestyle Center
As can be seen, these mall, lifestyle, and power center openings have had mixed performance regarding opening
occupancy levels, with absorption periods ranging anywhere from zero (0) months, to up to six (6) years. The overall

mean opening occupancy level is approximately 88.2 percent, with 29 months being the average absorption period
to stabilization.
For regional malls, the mean opening occupancy is approximately 87.7 percent, with an average lease-up period
of about 32 months. Among the most recent mall openings on the survey: City Creek in Salt Lake City opened with
in-line shop occupancy levels at 81.9 percent, while the Mall at University Center in Sarasota opened with in-line
shop occupancy levels around 80.4 percent. The lease-up to stabilization period at the Cherry Creek project was
about 14 months; University Center was approximately 19.6 months (estimated). Cherry Creek was a mall
redevelopment project in downtown, while University Town Center was a new super-regional mall.
For power centers on the survey, the mean opening occupancy is approximately 89.2 percent, with an average
lease-up period of about 15 months.
Other notable centers on the survey include several recent urban mixed use projects that had relatively strong
openings and one- to two-year lease-up periods.
It is noted that the average absorption periods calculated from the survey may be skewed by the exclusion of malls
where stabilization was not known, or by malls that had elongated lease-up periods. Moreover, in some instances,
overall demand in the market for major retail projects such as the subject has increased since the opening of several
of the projects on the survey. As a result, space leasing at some of the centers would likely occur at a moderately
faster pace under current market conditions. Finally, we would also note that, in some cases, the opening
occupancy reported may not represent stores open, but rather space that is leased, with stores opening in
subsequent months following grand opening.
In attempting to forecast the subject’s opening occupancy and absorption, we have taken several factors into
consideration. First, the Ballston Common/Ballston Quarter redevelopment is a known entity within its market to the
extent that it has been in planning at this location for several years now. In addition, the subject has (and will
continue to have) the necessary major/anchor commitments, including Macy’s, CVS, Regal, and Sport & Health.
Given the history of preparations to redevelopment Ballston Common, the fact that ground has broken, approvals
given, and public financing put into place should also give retailers confidence that this project will now proceed
and be completed in a timely manner.
Second, the region’s economy has been stable-to-growing. Despite some office vacancies occurring in the Rosslyn-
Ballston Corridor due to relocations and government spending reductions, the subject’s market area should remain
a desirable office and residential area for the Washington D.C. region.
Several other factors to consider:
 Project Timing – The subject’s completion period will take place over the next 18± months, with portions of the
project likely being completed in late-2017/early-2018, while other spaces will become available beginning in
January 2018 through April of that year. The official completion date is planned to be between January 2018
and April 2018. The lease-up period for the subject will therefore have nearly 18± months prior to the actual
completion date, with the balance of openings and lease-up occurring after approximately January 2018.
 Demographics – Population growth within the primary trade area is expected to add 8,881 people over the next
five years. Assuming a total GLA per capita figure of, say, 25 to 30 square feet per person, the implied additional
demand for the trade area will support 222,025 square feet to 266,430 square feet of new retail space. As
evident in the Market Analysis section, the subject appears to be well-positioned to capture its fair share of this
potential demand.

 GLA Per Capita – The subject trade area and region appear to be relatively balanced in terms of total GLA per
capita when considering the retail vacancy rate. As discussed in the Market Analysis section, the subject’s trade
area appears to be relatively balanced, if not under-built, in terms of total retail GLA. This should bode well for
the potential lease-up of the subject property, in as much as it appears to be well-positioned to capture and
maintain its fair share of the market potential, coupled with the lack of quality regional mall space available in
the immediate market area.
 Market Vacancy Levels – As discussed in the Market Analysis section, the overall vacancy rate in the Rosslyn-
Ballston Corridor is currently reported to be 5.31 percent (in comparison to 2.96 percent for Arlington County
and 4.35 percent for the Greater Washington D.C. CBSA). With the market generally in balance, at this level of
vacancy, retailers have very few options for good quality space in the subject’s market at this time. Upon
completion of the redevelopment, the subject will offer itself as a good quality opportunity for retailers looking
to enter into or expand within the Rosslyn-Ballston Corridor.
 Market Absorption – As projected in the Market Analysis section, positive net absorption of retail space in the
subject’s general market area is anticipated into the foreseeable future, despite the negative net absorption
reported in recent periods. Given the fewer options available to retailers interested in the Rosslyn-Ballston
Corridor market, the subject redevelopment should be capable of capturing a significant portion of the
absorption forecast into the foreseeable future.
 Absorption Comparables – The absorption comparables provide a fair indication of the subject’s potential lease-
up period, with particular emphasis on several centers. It is fairly clear that a period of economic turbulence
slowed absorption in a number of projects that opened between 2007 and 2009. This slow-down appears to
have stabilized and improved, with an expectation that demand for space will continue to progress in the near-
term as retailers look toward store expansion and outlooks improve. As one of the only enclosed regional
centers to be built in the next several years, we would expect the subject to garner strong interest from retailers.
Generally speaking, each of these indicators would suggest fairly stable demand for space at the subject. Moreover,
the expected population growth of the subject’s immediate market area is certainly an influence on retailers’
expectations of a trade area. Finally, vacancy trends in the market, and the subject’s submarket in particular, appear
to be favorable. With all of this in mind, we believe that retailers can be confident in the subject’s location,
configuration, and major/anchor store line-up.
In the end, to forecast an absorption period for the subject, we have considered the previously discussed properties
as well as the points noted above. As planned, we believe the subject should become one of the more unique urban
regional centers in this segment of the market. Thus, with few alternatives for tenants at competitive properties
within the region, we believe the subject has good potential for lease-up and absorption of space.
Based on this discussion, it becomes our opinion that the subject should experience an opening occupancy level
in a range of 70.0 percent and 85.0 percent, overall, with non-anchor shop spaces in a range of 55.0 to 70.0 percent.
Moreover, we believe that it is reasonable to forecast a 24- to 36-month absorption period to reach stabilization
from the current date of analysis, or 18-24 months following completion. Given the lead time before completion,
coupled with the current commitments in-place, these forecasts appear reasonable and supportable.
Our analysis concludes that, upon completion, vacant space at the subject will be absorbed over an approximate
24-month period.
The following chart summarizes our absorption forecast for the property following completion.

ABSORPTION SCHEDULE
Tenant Market
Vacant Space Name GLA Date Category Rent (1) Annual
* First Level - Vacant *** 1105 5,276 Jun-18 First Level $46.00 $242,696
* First Level - Vacant *** 1106 5,276 Dec-18 First Level $46.00 $242,696
* First Level - Vacant *** 1107 5,276 Jun-19 First Level $46.00 $242,696
* First Level - Vacant *** 1108 5,276 Dec-19 First Level $46.00 $242,696
* Second Level - Vacant *** 2105 6,815 Jun-18 Second Level $38.00 $258,970
* Second Level - Vacant *** 2106 6,815 Dec-18 Second Level $38.00 $258,970
* Second Level - Vacant *** 2107 6,815 Jun-19 Second Level $38.00 $258,970
* Second Level - Vacant *** 2108 6,815 Sep-19 Second Level $38.00 $258,970
* Second Level - Vacant *** 2109 6,815 Dec-19 Second Level $38.00 $258,970
* Third Level - Vacant *** 3104 4,647 Sep-18 Third Level $27.00 $125,469
* Third Level - Vacant *** 3105 4,000 Dec-18 Third Level $27.00 $108,000
* Third Level - Vacant *** 3106 4,000 Mar-19 Third Level $27.00 $108,000
* Third Level - Vacant *** 3107 4,000 Jun-19 Third Level $27.00 $108,000
* Third Level - Vacant *** 3108 4,000 Dec-19 Third Level $27.00 $108,000
* Concourse Food - Vacant *** C105 1,033 Dec-18 Concourse Food $77.00 $79,541
* Concourse Food - Vacant *** C106 1,000 Jun-19 Concourse Food $77.00 $77,000
* Concourse Food - Vacant *** C107 1,000 Sep-19 Concourse Food $77.00 $77,000
* Concourse Food - Vacant *** C108 1,000 Dec-19 Concourse Food $77.00 $77,000
* Concourse Level - Vacant *** C201 3,766 Oct-18 Concourse Level $45.00 $169,470
* Concourse Level - Vacant *** C202 3,765 Oct-19 Concourse Level $45.00 $169,425
* Tower Retail 1 - Vacant *** TR04 1,636 Mar-18 Tower Retail 1 $44.00 $71,984
* Tower Retail 1 - Vacant *** TR05 1,636 Jun-18 Tower Retail 1 $44.00 $71,984
* Tower Retail 1 - Vacant *** TR06 1,635 Sep-18 Tower Retail 1 $44.00 $71,940
* Tower Retail 1 - Vacant *** TR07 1,635 Dec-18 Tower Retail 1 $44.00 $71,940
Total 102,993 $39.15 $4,032,217
(1) Reflects current market rent, which will grow at our forecasted growth rate discussed herein.
ABSORPTION STATISTICS
Analysis Start Date 01/01/18
Absorption Commencement 03/01/18
Absorption Completion 12/01/19
Total Absorption Period (Months) 23
Absorption Per Month (SF) 4,482
As exhibited, we have forecast an absorption period of approximately 23 months to lease space following
completion of redevelopment. Moreover, the market rent noted in the chart reflects a current market rent estimate.
If the space is forecast to lease beyond year one of the analysis, the market rent listed above will have grown at
our market rent growth rate derived in this report.
To add perspective to this forecast, we have considered the opening occupancy and lease-up relative to type of
space within the center. Provided below is a summary of the subject’s occupancy forecasts, broken out by in-line
shops and major/anchor tenants.

ABSORPTION & OCCUPANCY PROJECTIONS

Ballston Quarter
Cushman & Wakefield
In-Line Shops Major/Anchor Tenants Total Project

CY CY CY CY CY CY CY CY CY
CY 2018 2019 2020 2018 2019 2020 2018 2019 2020
January 2018 145,139 193,840 248,132 259,613 259,613 259,613 404,752 453,453 507,745
February 2018 145,139 193,840 248,132 259,613 259,613 259,613 404,752 453,453 507,745
March 2018 146,775 197,840 248,132 259,613 259,613 259,613 406,388 457,453 507,745
April 2018 146,775 197,840 248,132 259,613 259,613 259,613 406,388 457,453 507,745
May 2018 146,775 197,840 248,132 259,613 259,613 259,613 406,388 457,453 507,745
June 2018 162,768 217,196 248,132 259,613 259,613 259,613 422,381 476,809 507,745
July 2018 162,768 217,196 248,132 259,613 259,613 227,008 422,381 476,809 475,140
August 2018 162,768 217,196 248,132 259,613 259,613 227,008 422,381 476,809 475,140
September 2018 169,050 225,011 248,132 259,613 259,613 259,613 428,663 484,624 507,745
October 2018 172,816 228,776 248,132 259,613 259,613 259,613 432,429 488,389 507,745
November 2018 172,816 228,776 248,132 259,613 259,613 259,613 432,429 488,389 507,745
December 2018 193,840 248,132 248,132 259,613 259,613 259,613 453,453 507,745 507,745
Average SF 160,619 213,624 248,132 259,613 259,613 254,179 420,232 473,237 502,311
Total GLA SF 248,132 248,132 248,132 259,613 259,613 259,613 507,745 507,745 507,745
January 2018 58.5% 78.1% 100.0% 100.0% 100.0% 100.0% 79.7% 89.3% 100.0%
February 2018 58.5% 78.1% 100.0% 100.0% 100.0% 100.0% 79.7% 89.3% 100.0%
March 2018 59.2% 79.7% 100.0% 100.0% 100.0% 100.0% 80.0% 90.1% 100.0%
April 2018 59.2% 79.7% 100.0% 100.0% 100.0% 100.0% 80.0% 90.1% 100.0%
May 2018 59.2% 79.7% 100.0% 100.0% 100.0% 100.0% 80.0% 90.1% 100.0%
June 2018 65.6% 87.5% 100.0% 100.0% 100.0% 100.0% 83.2% 93.9% 100.0%
July 2018 65.6% 87.5% 100.0% 100.0% 100.0% 87.4% 83.2% 93.9% 93.6%
August 2018 65.6% 87.5% 100.0% 100.0% 100.0% 87.4% 83.2% 93.9% 93.6%
September 2018 68.1% 90.7% 100.0% 100.0% 100.0% 100.0% 84.4% 95.4% 100.0%
October 2018 69.6% 92.2% 100.0% 100.0% 100.0% 100.0% 85.2% 96.2% 100.0%
November 2018 69.6% 92.2% 100.0% 100.0% 100.0% 100.0% 85.2% 96.2% 100.0%
December 2018 78.1% 100.0% 100.0% 100.0% 100.0% 100.0% 89.3% 100.0% 100.0%
Average % 64.7% 86.1% 100.0% 100.0% 100.0% 97.9% 82.8% 93.2% 98.9%
As shown, the assumptions employed in the cash flow projection imply an overall opening occupancy level of 79.7
percent, with major/anchors being 100.0 percent open and occupied, and in-line shops being 58.5 percent leased.
These forecasts are marginally below ownership’s projections, which anticipate having 92.0 percent of the total
project committed by January 2018 (but not necessarily open).
Lease Expirations
The lease expiration schedule is an important investment consideration. As leases rollover, the landlord will be
required to negotiate a renewal lease with the existing tenant, or to secure a new tenant for the space. Below is
the projected lease expiration schedule for this property incorporating all projected lease expirations forecast during
the analysis period.

In the second year of the cash flow, the subject’s cinema lease term ends (Regal has two 5-year option periods
following this expiration). In the third year, the Sport & Health lease expires (tenant does not have a renewal option
period remaining). As noted, we have allowed the Regal option periods to remain in-place, but at market rent levels
as opposed to the stipulated contract rents that are viewed as being above market.
The following table provides a synopsis of the lease expiration anticipated at this property during the analysis period.

LEASE EXPIRATION ANALYSIS

Total GLA of Subject Property (SF) 359,392 100.00%
Year of Peak Expiration 12
SF Expiring in Peak Year 93,183 25.93%
Five Year Cumulative Expirations (SF) 132,823 36.96%
Twelve Year Cumulative Expirations (SF) 426,454 118.66%
The most desirable scenario from a leasing risk standpoint is to have expirations spread evenly over the holding
period. In reality, expirations are typically not evenly dispersed. Depending upon expectations of market
performance, excessive leasing exposure can increase risk and impact discount and capitalization rates for a
property.
To summarize, the average amount of space expiring annually at the subject property is approximately 35,538
square feet per annum. However, the rollover percentage varies significantly by year, and ranges from a minimal
amount of expirations, up to roughly 25.93% percent of space later in the analysis period. Overall, a total of 118.66%
of the leasable area expires over the holding period. This is not uncommon in multi-tenant properties and, overall,
the turnover risk is considered typical for properties such as the subject.
A complete lease expiration schedule is contained in the Addenda of this report.
Assumptions Regarding Existing Leases

Lease Option Periods
We have modeled all existing leases in accordance with the lease terms provided by ownership. We are not aware
of any of the tenants being in default, and we assume that they will fulfill the obligations of their leases. As typical
of industry practice, we would generally assume that tenants with favorable renewal options would exercise those
options. In instances when a tenant has a renewal option that is above market, we would assume a rollover to the
weighted market parameters.
As a new center, projecting tenants that will extend into option periods is speculative. Moreover, it is our experience
that investors will not give credit to such option periods unless a reasonable comparison to actual performance and
rent can be made. As such, in keeping with industry practice, we have not modeled tenant option periods for
speculative tenants in the cash flow. However, after comparing the options terms of the existing tenants with our
projection of market rent, we have included the following renewal options in our analysis, as they are generally
favorable to the tenant and thus likely to be exercised.
LEASE OPTION SUMMARY

Option Option Option Initial Option Market Market
Suite Start End Term Area Option Rent Rent at Rent PSF
Tenant Name Number Date Date Years SF Rent PSF Option at Option
Capital One 1145 Jan-29 Dec-33 5.0 3,745 $241,103 $64.38 $226,033 $60.36
Regal Cinemas * 3300 Jul-19 Jun-29 10.0 67,062 $1,408,302 $21.00 $962,340 $14.35
* Regal Cinemas assumed to renew at market rent level as opposed to contract rent.
As shown in the chart, Regal’s option rent is deemed to be above-market. As discussed previously, we have allowed
the option period to remain in-place, but using market rent at the time of renewal.

Co-Tenancy & Volume-Out Clauses
Co-tenancy and volume-out clauses are fairly common clauses in retail lease contracts, providing tenants certain
rights or penalties (typically early cancellation or rent reductions) in the event that a named co-tenant closes its
store, certain occupancy thresholds are not maintained, or store performance fails to meet a specified sales volume.
While such co-tenancy, sales volume and minimum occupancy clauses are meant to protect a tenant, they can
exacerbate the impact of the loss of a co-tenant or reduction in occupancy in a center. Traditionally, named co-
tenants have been limited to the anchor stores of a center, but, in some cases, have expanded over the past decade
to include notable in-line tenants as well.
Another fairly common lease covenant in new retail centers involves the tenant’s or landlord’s ability to terminate a
lease if certain sales thresholds are not reached. Here, a defined measurement period is often set out in the lease.
During this time, if the tenant’s sales do not meet or exceed the defined volume, a cancellation of the lease can be
completed.
As part of our due diligence, we requested but were not provided with a summary of co-tenancy, occupancy, and
volume-out clauses at the subject property. This request was not unreasonably met since there is very little actual
leasing within the property at this time. However, it is likely that a number of tenants will negotiate such clauses in
their leases.
Several observations of typical co-tenancy or volume-out clauses:
 Co-tenancy provisions tend to run the entire length of a tenant’s lease. Among the most common provisions,
some leases will specify (for example) that if one (or two) of the subject’s major/anchor stores (or qualified
replacement tenants) are not open for six successive months, a co-tenancy violation can be triggered, if not
cured. Some of the subject’s leases would be expected to have a defined scenario similar to this, that would
require the closure of one major/anchor, a decline in shop occupancy below 75.0 percent, and a tenant’s sales
to have declined 15.0 percent for a 12 consecutive month period before any alternative rents or kick-out
provisions come into play. Alternative rents will typically be based on a percentage rent in lieu of base minimum
rent and reimbursements.
 Sales volume-out clauses often have a sundown or set time frame in which it is available to the tenant and/or
landlord. Our experience suggests that many of the tenant’s measurement periods will occur during the third,
fourth or fifth years of a tenant’s lease, while others may be ongoing. Most leases will typically stipulate the
measurement period in either year four or year five of the lease. If a tenant’s sales are below the threshold
agreed to, the tenant will usually have a one-time right to terminate the lease. Landlords will also typically have
the right to cancel the lease at that time.
Given the subject's projected performance—or perceived future performance—and expected long-term forecasts
for the property, coupled with the anticipated opening occupancy, it would appear unlikely that any co-tenancy or
occupancy triggers would be at risk in the near-term.
Further, given the quality, condition and location of the subject property, coupled with a low near-term probability of
any materially competitive projects being built in the foreseeable future, we do not view such lease clauses to be
any more impacting on the subject property than other typical malls and major retail centers. Nonetheless, we
believe it worthwhile to note such risks that are inherent in the forecast, particularly with the potential risks
associated with any tenants having sales volume kick-out clauses in the third year, fourth year, and/or fifth year of
property operations (2021/2022/2024).
Going forward, any co-tenancy issues facing the subject would involve a significant decline in occupancy, or the
closing of a defined major/anchor or department store, which, if this were to occur, could have a negative impact
on the property while ownership remedied the vacancy. In the case of properties like the subject, investors are

currently looking at this issue very closely. The question becomes: will the project remain viable, or will it spiral into
significantly higher vacancy with additional major/anchor stores that leave? Based upon the sale comparables
utilized in the Sales Comparison Approach, coupled with our other assumptions, we believe that the cash flow
projection herein has reasonably taken these risks into account.
Revenue & Expense Analysis

We have developed an opinion of the property’s annual income and operating expenses after reviewing both its
budgeted operating performance, and the operating income and expense levels of similar properties. In turn, we
have analyzed each item of expense and developed an opinion regarding what an informed investor would consider
typical.
A budget for the subject’s income and expense levels, and our opinion of future income and expenses are presented
on the following chart, followed by an analysis of subject property’s revenue and expenses.
Cushman & Wakefield recognizes the standards defined by the CRE Finance Council as the definitive standards
by which operating expense data should be analyzed. All operating statements provided by ownership have been
recast to reflect these categories, which are provided in the Glossary section of this Appraisal Report. In forecasting
expenses, we relied on the owner’s historical statements and budgets and analyzed expense levels at competing
properties. Our expense forecast is presented below, followed by a discussion of each expense line item.
Operating Expense Comparables

The second following table illustrates detailed expense levels for the buildings that have varying degrees of similarity
with the subject property in terms of age, size, tenancy and quality. As will be discussed in further detail, in our
judgment, a reconciled expense figure of $11.01 per square foot (not including real estate taxes) is reasonable for
the subject property considering its age, size and budgeted expense figures.

REVENUE AND EXPENSE ANALYSIS SUBJECT PROPERTY

Cushman & Wakefield Cushman & Wakefield
(1) (2)
2018 Forecast 2019 Forecast 2020 Forecast Year One Forecast
REVENUE Total PSF Total PSF Total PSF Total PSF Total PSF
Base Rental Revenue $12,511,420 $34.81 $12,870,412 $35.81 $13,264,634 $36.91 $ 8,544,399 $23.77 $ 12,067,379 $33.58
Percentage Rent $0 $0.00 $0 $0.00 $0 $0.00 $0 $0.00 $3,955 $0.01
Expense Reimbursement $6,004,465 $16.71 $6,219,527 $17.31 $6,417,655 $17.86 $ 5,867,113 $16.33 $ 7,765,391 $21.61
Parking Income Gross $0 $0.00 $0 $0.00 $0 $0.00 $0 $0.00 $0 $0.00
Other Income $607,000 $1.69 $622,870 $1.73 $638,416 $1.78 $607,000 $1.69 $638,416 $1.78
POTENTIAL GROSS REVENUE $19,122,885 $53.21 $19,712,809 $54.85 $20,320,705 $56.54 $15,018,512 $41.79 $20,475,141 $56.97
Vacancy and Collection Loss ($3,473,481) ($9.66) ($1,613,297) ($4.49) ($1,663,047) ($4.63) ($509,751) ($1.42) ($705,242) ($1.96)
EFFECTIVE GROSS REVENUE $15,649,404 $43.54 $18,099,512 $50.36 $18,657,658 $51.91 $14,508,761 $40.37 $19,769,899 $55.01
OPERATING EXPENSES $0 $0.00 $0 $0.00
Utilities $290,761 $0.81 $296,576 $0.83 $302,506 $0.84 $290,761 $0.81 $305,481 $0.85
Repairs & Maintenance $2,208,081 $6.14 $2,254,648 $6.27 $2,302,231 $6.41 $2,208,081 $6.14 $2,319,865 $6.45
Management Fees $425,725 $1.18 $491,284 $1.37 $506,233 $1.41 $435,263 $1.21 $593,097 $1.65
Advertising & Marketing $750,000 $2.09 $765,000 $2.13 $780,300 $2.17 $750,000 $2.09 $787,969 $2.19
General & Administrative $263,131 $0.73 $268,392 $0.75 $273,760 $0.76 $250,000 $0.70 $262,656 $0.73
Other Expenses $1,860 $0.01 $1,897 $0.01 $1,935 $0.01 $23,400 $0.07 $24,585 $0.07
Total Operating Expenses $3,939,558 $10.96 $4,077,797 $11.35 $4,166,965 $11.59 $3,957,505 $11.01 $4,293,653 $11.95
Real Estate Taxes $2,014,526 $5.61 $2,074,961 $5.77 $2,137,210 $5.95 $2,014,526 $5.61 $2,137,211 $5.95
TOTAL EXPENSES $5,954,084 $16.57 $6,152,758 $17.12 $6,304,175 $17.54 $5,972,031 $16.62 $6,430,864 $17.89
NET OPERATING INCOME $9,695,320 $26.98 $11,946,754 $33.24 $12,353,483 $34.37 $8,536,730 $23.75 $13,339,035 $37.12
(1) Calendar Year Beginning: 1/01/2018

SUBJECT PROPERTY COMPARABLES REVENUE AND EXPENSE ANALYSIS

Property Subject Property Confidential Confidential Confidential Confidential Confidential
Location Washington D.C. Metro Washington D.C. Metro Washington D.C. Metro Washington D.C. Metro Western U.S. Western U.S.
Type Urban Regional Center Urban Lifestyle Center Urban Regional Center Regional Mall Urban Regional Center Urban Regional Center
Levels 3 3 3 2 4 4
Year Built 1986 2009 1975 1987 1998 1990
Year Renovated 2016/2017 N/A 1999 1997 N/A 2013
Rentable Square Feet 359,392 117,202 293,170 308,067 339,545 350,605
Year of Record 2016 2016 2016 2013 2015 2016
Actual/Budget/Annualized 2018-2020 2016 2016 2014 2016 2016
Cushman & Cushman & Cushman &

Wakefield Wakefield Wakefield
Year One (1) Forecast (2) Forecast (2) Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Min Min Max Max Average Average
REVENUE PSF PSF % EGI Total PSF % EGI Total PSF % EGI Total PSF % EGI Total PSF % EGI Total PSF % EGI Total PSF Total PSF Total PSF
EFFECTIVE GROSS REVENUE $40.37 $55.01 100.00% $8,559,226 $73.03 100.0% $8,495,110 $28.98 100.0% $29,503,940 $95.77 100.0% $18,246,966 $53.74 100.0% $17,445,699 $49.76 100.0% $8,495,110 $28.98 $29,503,940 $95.77 $16,450,188 $60.26
OPERATING EXPENSES
Insurance $0.00 $0.00 0.00% $16,764 $0.14 0.20% $73,980 $0.25 0.87% $148,789 $0.48 0.50% $67,909 $0.20 0.37% $87,651 $0.25 0.50% $16,764 $0.14 $148,789 $0.48 $79,019 $0.27
Utilities $0.81 $0.85 1.55% $0 $0.00 0.00% $0 $0.00 0.00% $0 $0.00 0.00% $280,641 $0.83 1.54% $198,868 $0.57 1.14% $0 $0.00 $280,641 $0.83 $95,902 $0.28
Repairs & Maintenance $6.14 $6.45 11.73% $1,009,744 $8.62 11.80% $3,040,403 $10.37 35.79% $3,079,611 $10.00 10.44% $3,608,364 $10.63 19.78% $2,144,827 $6.12 12.29% $1,009,744 $6.12 $3,608,364 $10.63 $2,576,590 $9.15
Management Fees $1.21 $1.65 3.00% $76,130 $0.65 0.89% $84,951 $0.29 1.00% $413,414 $1.34 1.40% $491,053 $1.45 2.69% $348,914 $1.00 2.00% $76,130 $0.29 $491,053 $1.45 $282,892 $0.94
Advertising & Marketing $2.09 $2.19 3.99% $78,228 $0.67 0.91% $225,000 $0.77 2.65% $633,311 $2.06 2.15% $333,446 $0.98 1.83% $776,436 $2.21 4.45% $78,228 $0.67 $776,436 $2.21 $409,284 $1.34
General & Administrative $0.70 $0.73 1.33% $434,066 $3.70 5.07% $98,446 $0.34 1.16% $174,427 $0.57 0.59% $430,502 $1.27 2.36% $214,200 $0.61 1.23% $98,446 $0.34 $434,066 $3.70 $270,328 $1.30
Other Expenses $0.07 $0.07 0.12% $0 $0.00 0.00% $0 $0.00 0.00% $0 $0.00 0.00% $129,375 $0.38 0.71% $0 $0.00 0.00% $0 $0.00 $129,375 $0.38 $25,875 $0.08
Total Operating Expenses $11.01 $11.95 21.72% $1,614,932 $13.78 18.87% $3,522,780 $12.02 41.47% $4,449,552 $14.44 15.08% $5,341,290 $15.73 29.27% $3,770,896 $10.76 21.62% $1,614,932 $10.76 $5,341,290 $15.73 $3,739,890 $13.34
Real Estate Taxes $5.61 $5.95 10.81% $892,198 $7.61 10.42% $2,066,362 $7.05 24.32% $2,770,587 $8.99 9.39% $2,056,773 $6.06 11.27% $1,747,109 $4.98 10.01% $892,198 $4.98 $2,770,587 $8.99 $1,906,606 $6.94
Ground Rent $0.00 $0.00 0.00% $0 $0.00 0.00% $0 $0.00 0.00% $0 $0.00 0.00% $0 $0.00 0.00% $274,300 $0.78 1.57% $0 $0.00 $274,300 $0.78 $54,860 $0.16
TOTAL EXPENSES $16.62 $17.89 32.53% $2,507,130 $21.39 29.29% $5,589,142 $19.06 65.79% $7,220,139 $23.44 24.47% $7,398,063 $21.79 40.54% $5,792,305 $16.52 33.20% $2,507,130 $16.52 $7,398,063 $23.44 $5,701,356 $20.44
NET OPERATING INCOME $23.75 $37.12 $6,052,096 $51.64 $2,905,968 $9.91 $22,283,801 $72.33 $10,848,903 $31.95 $11,653,394 $33.24 $2,905,968 $9.91 $22,283,801 $72.33 $10,748,832 $39.81


The five expense comparables reflect expense comparables reflect operating expenses (excluding real estate
taxes) ranging from $10.76 to $16.51 with an average of $13.50 per square foot.
Based on our analysis of the expense levels at comparable properties, we have concluded that there is adequate
support for our operating expense conclusions.
Discussion of Revenue Items

We have analyzed each revenue item in making our forecast, with our conclusions summarized on the previous
table. In most cases, our forecast is well supported by the historical or budget information. However, in some cases,
further clarification is provided below:
Base Rental Revenue
Years PSF Totals
2018 Forecast $34.81 $12,511,420

2019 Forecast $35.81 $12,870,412
2020 Forecast $36.91 $13,264,634
Cushman & Wakefield - Year 1 $1 $23.77 $8,544,399
Cushman & Wakefield - Stabilized Year $0 $33.58 $12,067,379
The projected base rental revenue for year one of our analysis is an amalgamation of various factors, including
contractual rents and increases, base rent that is generated by vacant space as it is absorbed, as well as rent
that is lost/generated for leases expiring in the first year, weighted by our rollover assumptions.
Base rental revenue is comprised of actual contract rent from existing leases, and potential rent that can be
generated by vacant or rollover space.
It is noted that our forecast for stabilized rental income is slightly lower than ownership’s budget. This is due, in
part, to ownership later making a deduction for certain vacancy factors, which bring the forecasts closer than
shown in the chart.
Percentage Rent
Years PSF Totals
2018 Forecast $0.00 $0

2019 Forecast $0.00 $0
2020 Forecast $0.00 $0
Cushman & Wakefield - Year 1 $1 $0.00 $0
Cushman & Wakefield - Stabilized Year $0 $0.01 $3,955
Tenants of the subject property are (and will be) contracted to pay a percentage of their gross annual sales over
a pre-established base amount as overage rent. Many leases have (or will have) a natural breakpoint although a
number have stipulated breakpoints.
The average overage percentage for small space retail tenants will typically be in a range of 5.0 to 6.0 percent.
Major/anchor tenants will usually have the lowest percentage clauses, with ranges of 1.0 to 3.0 percent being
common.

Ownership has not budgeted any percentage rent to be generated at the property, which appears to be reasonable,
if not slightly conservative in comparison to other projects in the market. Our forecast includes a moderate level of
percentage rent that becomes generated by CVS using their current sales levels.
Traditionally, it takes a number of years for a retail center to mature and gain acceptance before generating any
sizable percentage income. As a center matures, the level of overage rents typically becomes a larger percentage
of total revenue. It is a major ingredient protecting the equity investor against inflation.
In the Market Analysis section of this report, we discussed the subject’s actual historic performance, as well as the
sales levels at other competitive retail projects. Because of the dynamics of the economy and marketplace, it is
difficult to predict with accuracy what sales will be on an individual tenant level.
Generally, our experience has shown that a certain number of tenants will likely be into a percentage rent situation
by at least the mid-point of their lease. Obviously this will vary depending on the tenant’s sales productivity,
percentage clause, breakpoint and lease structure. Nevertheless, by excluding any forecast of percentage rent in
the cash flow, there will remain a certain level of upside potential to the income stream, over time, as evident in the
percentage rent comparables shown below.
Percentage Rent Comparison
Metro Year Avg ShopAvg Shop Total Mall Shop Mall Shop Budget % As %
Property Area Built Rent/SF Sales/SF GLA GLA Occupancy Year Rent of PGI
S Balslton Quarter Washington DC 0-5 Years $40.00 -- 507,745 248,132 -- 2020 $ - 0.0%
Balslton Quarter Washington DC 0-5 Years $40.00 -- 507,745 248,132 -- 2018 $ - 0.0%
1 Urban Regional Washington DC 5-10 Years $50.00 $450 300,000 71,654 89.9% 2016 $ - 0.0%
2 Urban Regional Washington DC 40-50 Years $42.50 $495 293,170 68,630 60.0% 2016 $ 557,807 6.6%
3 Super-Regional Washington DC 30-40 Years $72.50 $973 820,000 308,067 95.7% 2015 $ 2,483,755 8.4%
4 Urban Regional Pacific NW 15-20 Years $42.92 $519 339,545 241,564 83.3% 2016 $ 292,987 1.6%
5 Urban Regional Pacific NW 20-30 Years $40.00 $415 350,605 208,334 77.6% 2016 $ 1,520,917 8.4%
6 Semi-Urban Regional Denver-Boulder 20-30 Years $65.00 $602 1,089,416 547,425 93.0% 2016 $ 1,026,000 1.5%
7 Semi-Urban Regional Albuquerque 40-50 Years $34.12 $376 1,101,950 362,316 98.6% 2014 $ 350,871 1.3%
8 Lifestyle Denver-Boulder 5-10 Years $36.86 $375 992,460 326,573 87.0% 2012 $ 81,261 0.7%
9 Lifestyle Denver-Boulder 5-10 Years $34.60 $372 828,840 350,095 94.6% 2011 $ 529,808 2.8%
10 Urban Regional Salt Lake City 0-5 Years $42.79 $430 629,034 348,637 96.9% 2013 $ 657,333 2.4%
11 Open-Air Regional Phoenix-Mesa 0-5 Years $35.57 $380 1,128,867 537,015 83.7% 2013 $ 293,665 1.2%
Survey Low $34.12 $372 293,170 68,630 60.0% 2011 $ - 0.0%

Survey High $72.50 $973 1,128,867 547,425 98.6% 2020 $ 2,483,755 8.4%
Survey Median $40.00 $430 629,034 308,067 89.9% 2016 $ 350,871 1.5%
Survey Mean $44.37 $490 683,798 297,429 87.3% 2015 $ 599,570 2.7%
Total/Average -- -- 8,889,377 3,866,574 -- -- $ 7,794,404 2.6%
Note: Where applicable, only percentage rent has been included; tenants paying % rent in lieu have been excluded
The standard lease at the subject will provide for a natural breakpoint, which, for mall shops, is typically 5.0 to 6.0
percent. Assuming an average initial mall shop rent of, say, $38.00 per square foot and a 6.0 percent natural
breakpoint, a tenant would need to achieve a sales level of $633 per square foot before generating overage rent.
On average, this level of sales is above those forecast for the property.
All considered, we have not initially forecast any percentage rent to be achieved at the subject property, other than
that generated by CVS.

Expense Reimbursement Revenue
Years PSF Totals
2018 Forecast $16.71 $6,004,465

2019 Forecast $17.31 $6,219,527
2020 Forecast $17.86 $6,417,655
The contractual lease obligations of the tenants specify that certain operating expenses are reimbursed to the
landlord. The expense reimbursements that we forecast for the subject property are shown in the above chart
and discussed below.
Common Area Maintenance

Common area maintenance reimbursements to ownership represent tenant contributions to help pay for the costs
of maintaining and operating the common areas of the property. The budgeted CAM reimbursement charge for in-
line shop tenants is $10.00 per square foot, with concourse level/food court/market tenants paying $12.00 per
square foot. These fixed charges escalate annually (budgeted to increase 2.00 percent annually in accordance with
ownership’s operating expense growth rate of 2.00 percent). Several tenant spaces have been budgeted with lower
CAM obligations, thereby lowering the actual collection of this income. In addition, major/anchor tenants have
differing CAM reimbursement obligations to ownership that vary from the in-line shops.
CAM/Utilities
In addition to the fixed CAM charge noted, ownership has budgeted for a CAM/Utilities charge of $3.48 per square
foot for non-anchor tenants. This charge, like CAM, is forecast to increase annually based upon ownership’s
expense growth rate assumption.
CAM Charge Assumption

In our analysis, we have included a fixed CAM charge of $13.48 per square foot for most non-anchor tenants, which
incorporates ownership’s CAM and CAM/Utilities charges. This reimbursement is forecast to increase annually. For
lower level and third level shop tenants, a slightly lower fixed CAM charge of $12.48 per square foot has been
included. Likewise, for lower level food court/market tenants, a higher CAM charge of $15.48 per square foot has
been assumed.
Real Estate Taxes

In addition to the major/anchor tenant contributions for taxes, in-line shop tenants will be responsible for their pro-
rata share of the tax expense allocation. Most tenants will pay their pro-rata share based upon mall shop occupancy
as the denominator, after major/anchor contributions.
Tenant HVAC
As is common at enclosed mall facilities, ownership has budgeted for an additional HVAC charge to a majority of
the non-anchor tenants. This charge, budgeted based upon a rate of $1.07 per square foot, has been included in
our cash flow forecast under miscellaneous income.

Other Income / Miscellaneous Income
Years PSF Totals
2018 Forecast $1.69 $607,000

2019 Forecast $1.73 $622,870
2020 Forecast $1.78 $638,416
Cushman & Wakefield - Year 1 $1 $1.69 $607,000
Miscellaneous income at centers such as the subject is typically derived from specialty leasing for temporary and
seasonal tenants, as well as from push-carts and kiosks. In addition, collections for certain other revenues—
comprised of forfeited security deposits, telephone commissions, storage rents, vending machine income, etc.—
are generally evidenced. Our projection for this analysis has relied largely on ownership’s budget (and prior
historical revenues), but also on our experience with other projects, which support the achievement of some level
of miscellaneous income.
Specialty Leasing
Ownership has budgeted for specialty leasing income of $468,000 in year one ($491,693 in stabilized year three),
which we are advised is based upon their prior experience with the property as well as the number of push-carts
and kiosks planned in the center.
To place this level of expense into perspective and support our forecast, we have considered the following
comparable properties in the subject’s general market, as well as several similar urban properties in other markets.
Specialty Leasing
Metro Year Avg Shop Avg Shop Total Mall Shop Mall Shop Budget Specialty $/SF $/SF As %
Property Area Built Rent/SF Sales/SF GLA GLA Occupancy Year Leasing Total Shops of PGI
S Balslton Quarter Washington DC 0-5 Years $40.00 -- 507,745 248,132 -- 2020 $ 491,693 $0.97 $1.98 2.4%
Balslton Quarter Washington DC 0-5 Years $40.00 -- 507,745 248,132 -- 2018 $ 468,000 $0.92 $1.89 2.4%
1 Urban Regional Washington DC 5-10 Years $50.00 $450 300,000 71,654 89.9% 2016 $ 49,830 $0.17 $0.70 0.6%
3 Super-Regional Washington DC 30-40 Years $72.50 $973 820,000 308,067 95.7% 2015 $ 1,307,279 $1.59 $4.24 4.4%
4 Urban Regional Pacific NW 15-20 Years $42.92 $519 339,545 241,564 83.3% 2016 $ 367,136 $1.08 $1.52 2.0%
6 Semi-Urban Regional Denver-Boulder 20-30 Years $65.00 $602 1,089,416 547,425 93.0% 2016 $ 1,606,783 $1.47 $2.94 2.3%
7 Semi-Urban Regional Albuquerque 40-50 Years $30.80 $451 1,101,950 362,316 98.6% 2014 $ 2,144,890 $1.95 $5.92 7.8%
Survey Low $30.80 $415 293,170 68,630 60.0% 2014 $ 42,000 $0.14 $0.61 0.5%
Survey High $72.50 $973 1,101,950 547,425 98.6% 2020 $ 2,144,890 $1.95 $5.92 7.8%
Survey Median $42.50 $495 507,745 248,132 89.9% 2016 $ 491,693 $1.08 $1.98 2.4%
Survey Mean $47.08 $558 590,020 256,028 85.4% 2016 $ 781,070 $1.10 $2.49 2.8%
Total/Average -- -- 5,310,176 2,304,254 -- -- $ 7,029,628 $1.32 $3.05 3.2%
As exhibited, specialty leasing ranges from 0.5 percent to 7.8 percent of potential gross income (PGI), with a mean
calculated at 2.8 percent, and a median of 2.4 percent.
At approximately 2.4 percent of ownership’s budgeted PGI, the subject’s budgeted specialty leasing revenues
appear reasonable. It is noted that the two urban centers in the D.C. market have far less enclosed common area
space in which to accommodate push-carts and kiosks, which impacts the amount of specialty leasing generated
at these two centers. The two most similar comparisons can be made with the urban regional centers from the
Pacific Northwest, which have many similarities to the subject, including their connectivity to surrounding office
buildings, and, in the case of No. 5, a subterranean concourse with food court.

Miscellaneous Income
Ownership has budgeted for miscellaneous income of $67,000 in year one ($71,080 in stabilized year three), as
well as $72,000 in CAM contributions from Ballston Office Tower in year one ($75,643 in year three).
As with the specialty leasing forecast, we have compared ownership’s budgeted miscellaneous income with other
similar properties in the market. These are summarized in the following chart.
Miscellaneous Income
Metro Year Avg Shop Avg Shop Total Mall Shop Mall Shop Budget Miscellaneous $/SF $/SF As %
Property Area Built Rent/SF Sales/SF GLA GLA Occupancy Year Income Total Shops of PGI
S Balslton Quarter Washington DC 0-5 Years $40.00 -- 507,745 248,132 -- 2020 $ 146,723 $0.29 $0.59 0.7%
Balslton Quarter Washington DC 0-5 Years $40.00 -- 507,745 248,132 -- 2018 $ 139,000 $0.27 $0.56 0.7%
3 Super-Regional Washington DC 30-40 Years $72.50 $973 820,000 308,067 95.7% 2015 $ 253,244 $0.31 $0.82 0.9%
6 Semi-Urban Regional Denver-Boulder 20-30 Years $65.00 $602 1,089,416 547,425 93.0% 2016 $ 329,392 $0.30 $0.60 0.5%
7 Semi-Urban Regional Albuquerque 40-50 Years $30.80 $451 1,101,950 362,316 98.6% 2014 $ 140,678 $0.13 $0.39 0.5%
Survey Low $30.80 $415 293,170 68,630 60.0% 2014 $ 99,100 $0.13 $0.39 0.5%
Survey High $72.50 $973 1,101,950 547,425 98.6% 2020 $ 329,392 $0.61 $1.62 1.4%
Survey Median $42.50 $495 507,745 248,132 89.9% 2016 $ 146,723 $0.31 $0.78 0.9%
Survey Mean $47.08 $558 590,020 256,028 85.4% 2016 $ 176,945 $0.34 $0.85 0.9%
Total/Average -- -- 5,310,176 2,304,254 -- -- $ 1,592,503 $0.30 $0.69 0.7%
From the data, we can see that miscellaneous income at competing properties typically ranges from 0.5 percent to
1.4 percent of potential gross income, with a calculated mean calculated of 0.9 percent, and a median of 0.9 percent.
Ownership has budgeted miscellaneous income at 0.7 percent of PGI, upon completion and stabilization, which
appears reasonable, and well-bracketed by the range set by the market.
Vacancy and Collection Loss

Overview
Vacancy and collection loss is a function of the interrelationship between absorption, lease expiration, renewal
probability, estimated downtime between leases, and a collection loss factor based on the relative stability and
credit of the subject’s tenant base. Earlier in the report we discussed the vacancy rates for the market in which the
subject property is located. We also discussed the subject’s occupancy level, which conversely represents its
current vacancy level. The following are key statistics that we considered in projecting the appropriate vacancy and
collection loss for the subject property.
VACANCY ANALYSIS
Vacancy Statistics Rate Building Class and Market
Forecast Vacancy at Opening 20.0% Based on total GLA
Regional Vacancy Statistics 4.4% Retail Market - Washington D.C. Region - CoStar Q2 2016
Local Vacancy Statistics 5.3% Retail Submarket - Rosslyn-Ballston Corridor - CoStar Q2 2016
Competitive Property Vacancy Statistics 3.7% Survey of Competing Properties - Based on total GLA
Competitive Property Vacancy Statistics 7.4% Survey of Competing Properties - Based on non-anchor GLA
Based on the prior historical occupancy of the subject, the current vacancy in the market, and our perception of
future market vacancy, we have projected a global stabilized vacancy rate of 3.00 percent for all non-anchor tenants

in the center. In addition, we have also deducted a collection loss of 1.00 percent. Total vacancy and collection loss
is therefore equal to 4.00 percent. These rates apply to all non-anchor tenants within the center.
For major/anchor and department store tenants in the project, whose creditworthiness is perceived as being better
than traditional in-line shop space, we view the tenancy, or typical tenancy, of these types of spaces as having
better credit and long-term lease prospects when compared to the in-line shop portion of the property. With this in
mind, we have utilized a lower vacancy factor for these tenants. This is a common practice among investors.
For anchor department store credit tenants (non-owned Macy’s), we have modeled the cash flow to allow for an
override rate for vacancy and collection loss. The credit tenant override rate for the general vacancy rate is 0.00
percent, and for collection loss is 0.00 percent. These override rates apply to the subject’s anchor tenant (Macy’s).
In similar fashion, for major tenants in the center, a lower vacancy factor of 1.00 percent has been utilized, with
credit loss of 0.50 percent. These major/anchor override rates apply to Regal Cinemas, CVS, and Sport & Health.
In year one, vacancy and collection loss is projected to be $509,751.
In addition to these assumptions, we have also forecasted that there is a 75.00 percent probability that an existing
(retail) tenant will renew their lease. Upon turnover, we have forecasted that rent loss equivalent to 9± months
would be incurred to account for the time and/or costs associated with bringing space back on line. Based upon our
renewal probability, the average downtime between tenants is approximately 2.25± months (weighted average).
Thus, minimum rent as well as overage rent and certain other income has been reduced by this forecasted
probability.
Vacancy Deduction Method
We have used ARGUS - Version 15 cash flow software for the Vacancy Deduction Method. ARGUS - Version 15
is the industry standard commercial real estate cash flow projection, transaction analysis and asset valuation
solution. ARGUS - Version 15 allows specific vacancy deductions, which impact the cash flow in different ways.
We selected the following, below-defined options in our cash flow model:
A. If this option is selected, the Cash Flow report line will be reduced by the absorption and turnover vacancy. If
this option is not selected, ARGUS will add the absorption and turnover vacancy back into the Cash Flow revenue
line before calculating the amount of general vacancy. This results in the general vacancy being calculated on the
potential revenue instead of the scheduled revenue.
B. If this option is selected, ARGUS subtracts absorption and turnover vacancy from the general vacancy. The
reduced amount of general vacancy will then be subtracted from the cash flow. If absorption and turnover vacancy
is greater than the initial general vacancy, there will be no deduction for general vacancy and the initial general
vacancy will be treated as a minimum vacancy loss. If this option is not selected, ARGUS subtracts the entire
general vacancy from the cash flow without any adjustment for absorption and turnover vacancy. The initial general
vacancy amount calculated in the previous section would be reported on the cash flow with no adjustment.
Discussion of Expenses
We have analyzed each expense item in making our forecast, with our conclusions summarized on the previous
table. In most cases, our forecast is well supported by the historical or budget information. However, in some cases,
further clarification is provided below:

Repairs & Maintenance / Common Area Maintenance
This expense category includes all expenses incurred for general repairs and maintenance, including HVAC,
electrical, plumbing, safety systems, roads and grounds, and pest control/exterminating. This expense category
also typically includes all outside maintenance service contracts and the cost of maintenance and repairs supplies.
For the analysis herein, we have grouped all common area maintenance expenses into this category. Common
area maintenance costs include a variety of expenses related to operation of the center, including janitorial and
cleaning, landscaping, parking lot maintenance, etc. Insurance is also typically included in this figure. Additionally,
we have grouped the subject’s food court expense into this category.
The subject’s expense forecast is detailed in the table below, along with a summary comparison of ownership’s
budget along with the expense comparables previously cited.
Years PSF Totals
2018 Forecast $6.14 $2,208,081

2019 Forecast $6.27 $2,254,648
2020 Forecast $6.41 $2,302,231
Expense Comparable Low $3 $6.12 $1,009,744
Expense Comparable Average $3 $9.15 $2,576,590
Expense Comparable High $3 $10.63 $3,608,364
Based upon our review of ownership’s budget, coupled with our comparison to other properties in the market, we
have utilized ownership’s year one expense budget for common area maintenance. However, whereas ownership
has projected annual increases of 2.00 percent in the CAM expense, we have allowed Argus to escalate operating
expenses by 2.50 percent per year.
Real Estate Taxes
A complete discussion of taxes for the subject property is included in the Real Property Taxes and Assessments
section of this report, and reference is made thereto. The subject’s property tax expense budget and forecast is
detailed in the table below.
Years PSF Totals
2018 Forecast $5.61 $2,014,526

2019 Forecast $5.77 $2,074,961
2020 Forecast $5.95 $2,137,210
Expense Comparable Low $3 $4.98 $892,198

Unlike other expenses in ownership’s budget, property taxes have been assumed to increase 3.00 percent per
year; an assumption we have maintained in our projection as well.
Utilities / Tenant HVAC / Central Plant
This expense category includes tenant reimbursed expenses related to utilities and the central plant. Utilities and
central plant expenses are generally property-specific and vary considerably from property-to-property in the
subject’s market based on the utilities paid by the tenant and the owner, and the efficiency of the HVAC systems.
Therefore, we have placed particular weight on ownership’s budgeted expenses for this category, which are
summarized below.
Years PSF Totals
2018 Forecast $0.81 $290,761

2019 Forecast $0.83 $296,576
2020 Forecast $0.84 $302,506
Expense Comparable Low $3 $0.00 $0
Expense Comparable Average $3 $0.28 $95,902
Expense Comparable High $3 $0.83 $280,641
As with common area maintenance, ownership has utilized a 2.00 percent annual increase in this expense; whereas
we have incorporated annual increases of 2.50 percent per annum.
Advertising & Marketing
This expense category includes expenses related to advertising, promotion, sales, and publicity and all related
printing, stationary, artwork, magazine space, internet/web site, broadcasting, and postage related to marketing
the center. Below is a summary of ownership’s budget, along with expense levels at other centers and our
forecast for marketing and promotion costs.
Years PSF Totals
2018 Forecast $2.09 $750,000

2019 Forecast $2.13 $765,000
2020 Forecast $2.17 $780,300
As noted previously, many of ownership’s expenses are projected to increase 2.00 percent per year. Our analysis
has utilized operating expense growth of 2.50 percent per year.

General & Administrative
This expense category generally includes professional fees such as legal, audit and accounting, and other
expenses that are not reimbursed by tenants. Ownership’s budgeted expense levels for G&A are shown below,
along with comparisons to the expense comparables previously presented.
Years PSF Totals
2018 Forecast $0.73 $263,131

2019 Forecast $0.75 $268,392
2020 Forecast $0.76 $273,760
Based on our total analysis of the center, along with our slightly higher expense growth rate assumption and higher
specialty leasing expense (discussed below), we have included a marginally lower level of expense of the non-
reimbursable costs associated with operating the subject center.
Other Expenses / Specialty Leasing Expense
This expense is typically related to operating and managing the specialty leasing program. At many projects, this
expense will not be reported outright, but rather netted out of the reported revenue, or embedded within the
management fee agreement. At other projects, we see that the expense can be based on a number of different
arrangements, but oftentimes charged based upon a percent of the income generated (typically in a range of 5.0
percent to 15.0 percent). Ownership has budgeted only a small/nominal specialty leasing expense in their forecast,
which is summarized below.
Years PSF Totals
2018 Forecast $0.01 $1,860

2019 Forecast $0.01 $1,897
2020 Forecast $0.01 $1,935
Expense Comparable Low $3 $0.00 $0
Based on our analysis, we have based the specialty leasing and sponsorship expense on 5.0 percent of specialty
leasing and sponsorship revenues.

Management Fees
This expense includes the costs paid for professional management services. Management services may be
contracted for or provided by the property owner. Management fees for this type of property typically range from
2.00 to 4.00 percent of effective gross income (EGI), but are often sensitive to cost on a rate per square foot.
Alternatively, third-party management fees are also often based upon a percentage of minimum rental income,
reimbursement income, and miscellaneous income.
Years PSF Totals
2018 Forecast $1.18 $425,725

2019 Forecast $1.37 $491,284
2020 Forecast $1.41 $506,233
In their budget forecast, ownership has budgeted a management fee that generally correlates to an expense ratio
of 2.71 percent of effective gross income.
For this analysis, we have utilized a management fee based upon 3.00 percent of effective gross income, which
we consider to be market-oriented.
Operating Expense Conclusion

We have thoroughly analyzed the subject’s prior operating expense history and current budget forecasts. In turn,
we have used this information to make our projections, along with support from expense comparables analyzed
herein.
In the end, we have forecast total operating expenses for the subject (excluding real estate taxes) to be $3,957,505
(in year one), which equates to $11.01 per square foot of owned/included GLA. Alternatively, this level of expense
(excluding real estate taxes) reflects an operating expense ratio of 21.72 percent of effective gross income.
Including real estate taxes, we have projected total operating expenses for the subject property (including real
estate taxes) to be $5,972,031, or $16.62 per square foot. This level of expense (including real estate taxes) implies
an operating expense ratio of 32.53 percent of effective gross income.
The operating expense comparisons presented in the operating expense analysis table in the beginning of this
section tend to support our opinion of operating expenses for the subject property. To summarize, the following
expense comparisons with budgeted levels, support our opinion of operating expenses for the subject.

Years PSF Totals
2018 Forecast $10.96 $3,939,558

2019 Forecast $11.35 $4,077,797
2020 Forecast $11.59 $4,166,965
Expense Comparable Low $3 $10.76 $1,614,932
Operating Expense Ratios—Test Of Reasonableness

As a test to the reasonableness of income and expense levels forecast at the property, we have also looked at
operating expense ratios for retail portfolios, as well as competing properties, in order to support the projections
utilized. With an operating expense ratio of 32.53 percent forecast, the subject appears to reflect a fairly typical
level of expenses as compared to operating income. The following table presents a summary of operating expense
levels for a number of retail REITs and publicly traded companies:
PORTFOLIO OPERATING ANALYSIS - YEAR END 2015
Overage
Comparable Operating Operating Operating Rent to
No. of Mall Total Mall Average Average Mall shop Revenues Expenses Expense Overage Operating
Company/REIT Properties GLA (000) Occupancy Rent/SF Sales/SF ($000) ($000)1 Ratio Rent ($000) Revenue
General Growth Properties* 131 129,001 96.9% $73.12 $588 $2,403,906 $785,919 32.69% $44,024 1.83%
Simon Property Group 108 122,724 96.1% $48.96 $620 $5,266,103 $1,204,517 22.87% $194,070 3.69%
Macerich Company, The 68 48,479 96.1% $52.64 $635 $1,288,149 $470,668 36.54% $25,693 1.99%
CBL & Associates 82 63,548 93.6% $31.47 $374 $1,055,018 $283,345 26.86% $16,876 1.60%
Pennsylvania REIT 29 24,300 94.9% $51.64 $432 $425,411 $170,047 39.97% $5,724 1.35%
Taubman Centers 19 8,804 94.2% $60.38 $800 $557,172 $209,163 37.54% $20,233 3.63%
Washington Prime Group (Glimcher) 62 54,092 91.8% $21.63 $365 $921,656 $359,534 39.01% $14,040 1.52%
Westfield Corporation 34 43,600 95.9% $86.59 $726 $1,894,600 $437,700 23.10% $35,950 1.90%
Rouse Properties 36 24,889 90.9% $39.11 $350 $305,384 $119,351 39.08% $7,372 2.41%
Footnotes
1 Excludes General & Admin expense, depreciation, interest, and home office costs
*Overage Rent for Westfield America is estimated

Source: Annual 10K filings and various analyst reports.
As shown, the OERs (operating expenses ÷ operating income) reported by public companies reflect a range of
22.87 percent to 39.97 percent, with an overall average of approximately 33.07 percent. This range of ratios (and
average) further support the forecasts utilized in our cash flow.
Income and Expense Pro Forma

With the income and expense discussion concluded, the following chart summarizes our opinion of income and
expenses for the subject property as of year three of the cash flow, which is the first stabilized year in the analysis,
following completion of the redevelopment and lease-up of space.

SUMMARY OF REVENUE AND EXPENSES

Stabilized Year For Direct Capitalization: Year Three
REVENUE Annual $/SF % of EGI
Base Rental Revenue $12,067,379 $33.58
Percentage Rent $3,955 $0.01
Expense Reimbursement $7,765,391 $21.61
Other Income $638,416 $1.78
POTENTIAL GROSS REVENUE $20,475,141 $56.97
Vacancy and Collection Loss ($705,242) ($1.96)
EFFECTIVE GROSS REVENUE $19,769,899 $55.01 100.00%
OPERATING EXPENSES 0
Utilities $305,481 $0.85 1.55%
Repairs & Maintenance $2,319,865 $6.45 11.73%
Management Fees $593,097 $1.65 3.00%
Advertising & Marketing $787,969 $2.19 3.99%
General & Administrative $262,656 $0.73 1.33%
Other Expenses $24,585 $0.07 0.12%
Total Operating Expenses $4,293,653 $11.95 21.72%
Real Estate Taxes $2,137,211 $5.95 10.81%
TOTAL EXPENSES $6,430,864 $17.89 32.53%
NET OPERATING INCOME $13,339,035 $37.12 67.47%
Investment Considerations
Before determining an appropriate capitalization rate to apply to the subject’s net operating income, a review of
recent market conditions, particularly in the financial markets, is warranted. The following subsection(s) provide a
review of these trends, ending with a summary of the investment considerations impacting the subject property.
Overview
A new year again started with significant market turbulence. However, the U.S. economy and property markets are
starting to fire up again now that the early-year financial market volatility has diminished. The volatility was a
contributing factor to the slowdown in U.S. investment sales in the first quarter 2016 as well as leasing activity for
most product types. However, through this period of heightened uncertainty, U.S. job growth continued, a reminder,
that the core drivers of the U.S. economy remain healthy. The strength of the U.S. economy is most clearly evident
in the labor markets. Despite the volatility, the U.S. economy continued to crank out new jobs. In first quarter 2016,
nonfarm payroll growth averaged 196,000 per month, in line with the robust pace observed over the past five years.
Consumer confidence turned around in March due in large part to a combination of sustained and accelerating
hourly wage growth and steady job creation, which helped the domestic demand side of the economy remain
resilient in the face of softening global demand.
The primary concerns in the first eight weeks of the year were a slowdown in the Chinese economy and declining
oil and commodity prices, which stoked fears that an end was in sight for the current expansion, have mostly
subsided. China’s economy posted positive GDP growth of 6.7 percent in first quarter 2016 and oil and commodity
prices firmed and generally trended upwards since February. There have been first quarter dips in U.S. economic
activity for the last several years, and none of them have amounted to more than a temporary blip. For 2016, worries
about China and oil prices caused stock markets around the world to stumble. Looking back, real U.S. GDP growth
has been weak or negative in the first quarter in each of the last three years. We continue to expect moderate
growth for the U.S. economy.

At the December 2015 meeting of the Federal Open Market Committee (FOMC), Federal Reserve Board
Chairwoman Janet Yellen announced that the FOMC voted to raise the federal funds rate for the first time in almost
10 years. The initial rate hike was miniscule and the action was just the first step in what will likely be a very lengthy
process of monetary policy normalization. It reflected the consensus that a solid foundation was propelling the
economic expansion. The Federal Reserve, consistent with its past communication, did not vote to raise the federal
funds rate in January, March or April, signaling its willingness to wait for the effects of the global headwinds to
dissipate before further normalization. Indicators pointed towards a rate hike in June 2016 but was delayed once
again as the committee intended to let the “Brexit” vote play out. On June 23rd 2016, the United Kingdom held a
referendum-a vote on whether to remain in or leave the European Union (EU). Although polls of the referendum
indicated that the “Remain” campaign would prevail by a thin margin, when the votes were tallied, it went the other
way, surprising the global equity markets into turmoil. A period of further uncertainty and increased volatility can be
expected over the coming weeks and months as financial markets and the political establishment in the UK and
Europe come to terms with what a UK exit means, or if it may even occur at all. The US dollar will likely receive a
boost as nervous investors will pour foreign money into safety of the US, the globe’s reserve currency. However, a
stronger US dollar will negatively impact US exports. Commodity and energy-producing markets in the US and the
emerging markets may face renewed headwinds as global demand stumbles yet again. Whether the next rate hike
is in September will likely depend on how the global financial markets behave in the weeks following the referendum
and ensuing UK exit from the EU.
Current Economic Conditions
The evidence of a stronger economy, in 2014, prompted the FOMC to announce that the Central Bank would
gradually reduce its purchases of long-term Treasury securities and mortgage backed securities widely referred to
as quantitative easing. During 2014, the FOMC reduced the amount of bonds purchased each month, indicating
the Central Bank’s confidence that the economy does not require the additional stimulation that this policy was
providing. A statement released after the final FOMC meeting of 2014 was the clearest indication that the Central
Bank would begin to raise interest rates in 2015. However, the FOMC’s mid-year 2015 statement made it clear that
the key driver of the decision to raise short-term interest rates, the condition of the labor market, was a bit soft to
start the year. As a result of the soft market, the FOMC further delayed their decision to hike interest rates. On the
other hand, positive signs from the last three labor market reports of 2015, combined with wage growth information,
resulted in the Federal Reserve using its last meeting of the year to raise rates by year-end 2015.
The shift to higher interest rates was anticipated and signaled by the FOMC in its press releases for over 18 months.
In the December 2015 release, the FOMC followed through on its promise and raised rates 25 basis points, largely
a symbolic move but the first step in monetary policy normalization. Once again, the Federal Reserve did not vote
to raise rates any further in June 2016. The committee will take the UK exit from the EU and incoming employment
and economic data into consideration to be sure economic growth is picking up and not grinding to a halt. There is
still some uncertainty as to how financial markets will be effected by the “Brexit”, but we do expect a large pause in
investment activity over the next few weeks, as investors and lenders take a “wait and see” approach.
The following graph displays historical and projected U.S. Real GDP percent change (annualized on a quarterly
basis) from second quarter 2009 through second quarter 2019 (red bar highlights the most recent quarter-16Q1):

Notable concerns regarding current economic conditions are as follows:
 In the first quarter 2016, real GDP increased at 1.1 percent after a third revision by the Bureau of Economic
Analysis (BEA). Real GDP increased at 1.4 percent in fourth quarter 2015, according to the latest estimate by
the BEA. The increase in real GDP in the first quarter primarily reflected positive contributions from personal
consumption expenditures (PCE), residential fixed investment, and state and local government spending that
were partly offset by negative contributions from nonresidential fixed investment, exports, private inventory
investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP,
decreased.
 Employment growth through the first quarter of 2016 saw the nation add jobs at a higher rate than through the
same period last year. Through first quarter 2016 employment growth averaged 196,000 jobs per month, higher
than the 190,000 added through first quarter 2015. However, figures began to dwindle through May 2016 as
the month of May only added 38,000 new jobs and the average fell to 150,000. Since 2012 the first five months
of the year job growth averaged at least 205,000 new jobs added. A drop off in employment growth and leasing
demand can have a significant and lasting effect on the real estate market. Investors need to adjust to changes
in interest rates, but when the market hurts due to a lack of job growth and tenant demand, it can be isolating
and damaging to the commercial real estate market.
 Labor markets do continue to tighten. The national unemployment fell 30 basis points over the previous month
to 4.7 percent in May 2016 and signs point towards improving wage growth over the coming months, which
should boost income and spending at a faster pace in 2016. As the unemployment rate approaches a range
traditionally associated with full employment the upward pressure on wages will intensify.
U.S. Real Estate Market Implications
The commercial real estate volume picked up in 2012, a pace that continued through 2015. According to Real
Capital Analytics, 23,015 properties traded hands in 2013 for a total transaction volume of approximately $338.9
billion. Commercial real estate sales volume remained strong throughout 2014, as transaction volume totaled
$401.9 billion. Property prices at an aggregate level surpassed the 2007 peak and cap rates in many sectors are
at all-time lows. As volume and price levels headed into uncharted territory, investors reassessed risk and took their
foot off of the gas towards the end of 2014. Through 2015, 24,921 properties changed hands as volume reached
$509.4 billion in 2015, up significantly from year-end 2014 when the total was nearly $402.0 billion. This level marks
2015 as the second highest investment volume over time behind the peak of $538.8 billion in activity seen in 2007.
In first quarter 2016 U.S. commercial property transaction volume fell in a year-over-year comparison, and only
reached $106.4 billion. Despite a yearly decline, the level of activity in the market in first quarter 2016 is still elevated.
Over the last 11 years there were only two other first quarter periods where deal volume was above $100.0 billion.
One might expect that with volume falling off at such sharp rates that pricing would begin to adjust as well. For most
property sectors however cap rates are largely unchanged from a year earlier. The combination of largely flat cap
rates and falling volume suggests a bit of a hung market.

There are several important signs for the commercial real estate sector. Employment in the key office-using sectors
is expected to grow, but at a decelerating rate. After increasing by 800,000 jobs in 2015, office-using employment
is forecast to rise by 786,000 payrolls in 2016 and 724,000 in 2017. Due to the anticipated slowdown in hiring,
aggregate demand for office space will also slow. Warehouse/distribution space will benefit from both a more
confident, higher-spending consumer and the positive outlook for the U.S. labor market, all factors behind several
years of robust absorption. Retail demand will largely remain focused on Class A product and/or new space. The
apartment sector posted positive growth in sales volume in first quarter 2016, the only sector to do so. Despite a
slowdown caused by financial market volatility in the first eight weeks of the year, capital markets activity is generally
expected to accelerate in 2016.
Uncertainty in CMBS financing had been growing through fourth quarter 2015 and first quarter 2016. With
uncertainty on financing and cap rates still at record low levels, potential buyers were simply more hesitant to step
up to transactions as they were a year earlier. According to the PriceWaterhouseCoopers Real Estate Investor
Survey for second quarter 2016, the average cap rate decreased in 17 survey markets, held steady in 10 and
increased in 7. The quarterly shifts remain very diverse like they have been in the past few quarters with a higher
number of markets now reporting declines and smaller number posting increases in their average cap rates. The
magnitude of these shifts are very similar to what was reported a year ago. This quarter’s average overall cap rate
shifts suggest varied viewpoints by investors across the industry. In the office sector, for example, some investors
are showing optimism for Seattle, the Pacific Northwest, Charlotte, and Dallas, but appear more cautious with
regard to the Washington, DC metro office markets. Cap rate shifts for the Survey’s warehouse markets reveal a
positive outlooks despite growing levels of new supply. The same sentiment is shown for the Survey’s apartments
markets, where average cap rates decline in three of the four Survey markets. Even though surveyed investors
hold a positive outlook for the commercial real estate industry for the near term, they are mindful of the potential for
interest rate increases, market corrections and the need for caution. While overall cap rates are expected to hold
steady in most markets over the next six months, a greater portion of investors foresee cap rates rising over that
time period, compared to last quarter.
The following graph compares national transaction volume by property between 2004 and first quarter 2016:
National Transaction Volume By Property Type

600.0
Retail Office
500.0 Industrial Hotel
Apartment
Volume, billions $
400.0
300.0
200.0
100.0
0.0
Source: Real Capital Analytics, Inc. Note: Hotel data not avail. until 2005,
Conclusion
Fundamentals will top panic. For instance, earlier in the year equity markets and the REITs demonstrated great
resiliency when concerns flared up about the health of China’s economy, which is four times larger than the United

Kingdom’s. After the hysteria about China calmed down, the economic fundamentals took over, leading equity
markets and REITs to rebound swiftly in most regions of the world. Nationally, consumer conditions will continue to
improve; consumer spending will be one of the major contributors to growth for the rest of the cycle. Further, as the
headwinds from the start of the year dissipated and the impact of low oil and commodity prices subsided—at least
from metrics like growth in inflation and changes in corporate profits—business investment started to pick up.
Slower than expected monetary policy normalization will help to buoy job growth in the near term, though economic
conditions will likely warrant more rate hikes next year. Property markets, which responded to the year-end and
early-year weakness, are also turning a corner. Already, leasing and sales activity is firming. Demand will remain
strong, vacancy will tighten, and rental growth will continue this year—albeit unevenly for some asset classes.
Nevertheless, investors are watching job growth, supply pipelines, and leasing trends, which some feel could have
more of an impact on property values than interest rate changes.
Considering this discussion, the factors listed below have been considered in our valuation of this property and will
have an impact on our selection of all investor rates.
INVESTMENT CONSIDERATIONS
NOI Growth: The subject's NOI is expected to grow 2.59 percent per annum from the first
stabilized year of the analysis through the holding period. This rate of growth is
considered acceptable.
Lease Expiration Exposure: Within the first five years of the analysis a total of 36.95 percent of the total net
rentable area is scheduled to rollover. Extending to a ten-year period, a total of
118.65 percent of the space is scheduled to expire. The peak expiration occurs in
year 12, when a total of 93,183 square feet is scheduled to expire. This is
considered a moderate rollover exposure within this market.
Real Estate Market Trends: Real estate market trends have a significant bearing on the value of real property.
The real estate market in which the subject property is located is currently
improving.
Tenant Quality: The quality of a property's tenant base is an important factor that is scrutinized by
investors prior to acquiring real property. The quality of the subject's tenant roster is
considered to be average-to-good.
Property Rating: After considering all of the physical characteristics of the subject, we have
concluded that this property has an overall rating that is good, when measured
against other properties in this marketplace.
Location Rating: After considering all of the locational aspects of the subject, including regional and
local accessibility as well as overall visibility, we have concluded that the location of
this property is good.
Overall Investment Appeal: There are many factors that are considered prior to investing in this type of property.
After considering all of these factors, we conclude that this property has good
overall investment appeal.
Investor Survey Trends

Next we review recent trends in investment rates. Historic trends in real estate investment help us understand the
current and future direction of the market. Investors’ return requirements are a benchmark by which real estate
assets are bought and sold. The following graph shows the historic trends for the subject’s asset class spanning a
period of four years as reported in the PwC Real Estate Investor Survey published by PricewaterhouseCoopers.

INVESTOR SURVEY HISTORICAL RESULTS

Survey: PwC End Quarter:
Property Type: NATIONAL REGIONAL MALL MARKET 2Q 16

Quarter 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16
OAR (average) 7.06% 6.83% 6.92% 6.51% 6.50% 6.56% 6.56% 6.60% 6.58% 6.21% 6.38% 6.13% 6.03% 6.03% 6.00% 6.00%
Terminal OAR (average) 7.38% 7.23% 7.19% 7.06% 7.04% 7.08% 7.02% 6.94% 6.94% 6.79% 6.96% 6.65% 6.63% 6.53% 6.50% 6.50%
IRR (average) 9.38% 9.25% 9.25% 8.75% 8.79% 8.81% 8.92% 8.67% 8.63% 8.15% 8.19% 7.83% 7.78% 7.65% 7.63% 7.65%
INVESTOR SURVEY HISTORICAL RESULTS
OAR (average) Terminal OAR (average) IRR (average)
9.50%
9.25%
9.00%
8.75%
8.50%
8.25%
8.00%
7.75%
RATES
7.50%
7.25%
7.00%
6.75%
6.50%
6.25%
6.00%
5.75%
5.50%
3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16
ANALYSIS PERIOD
Source: Pw C Real Estate Investor Survey
The return requirements cited by investors has been declining, following their climb to more conservative levels
from Third Quarter 2008 through Third Quarter 2009. The financial crisis clearly made investors more cautious and
risk-averse during this period, resulting in higher return requirements. Since this time period, investment rates have
subsequently stabilized and declined, as access to capital has increased and a greater number of quality properties
have traded. The low-interest rate environment and capital available for regional mall acquisitions remains at this
writing, which have helped to drive down investment rates to their current levels.
Capitalization Rate Analysis

On the following pages we further discuss the process of how we determine an appropriate overall capitalization
rate to apply to the subject’s forecast net income, including a review of sale transactions in the market, coupled with
an analysis of mortgage-equity requirements.

Capitalization Rate from Comparable Sales

The following table summarizes overall capitalization rates derived from the improved property sales.
CAPITALIZATION RATE SUMMARY

Capitalization
No. Name and Location Sale Date Rate
1 Market Commons at Clarendon 5/2016 4.03%
Arlington, VA
2 Quaker Bridge Mall 2/2016 4.43%
Lawrenceville, NJ
3 Deptford Mall 1/2016 4.20%
Deptford, NJ
4 Stonebridge at Potomac Towne Center 12/2015 5.29%
Woodbridge, VA
5 Shops @ Skyview Center 6/2015 4.70%
Flushing, NY
6 Downtown Crown (Retail Component) 1/2015 4.87%
Gaithersburg, MD
7 Merrifield Town Center (Retail Condo 1/2015 5.35%
Component)
8 The Shops at Georgetown Park 8/2014 4.97%
Washington, DC
STATISTICS
Sample Size 8 8
Low 8/2014 4.03%
High 5/2016 5.35%
Median 8/2015 4.79%
Average 7/2015 4.73%
Clearly, it is difficult to relate the subject to comparable properties that are in such widely divergent markets with
different cash flow characteristics. However, several of the sales selected for comparison with Ballston Quarter are
believed to be mostly similar to the subject along a number of lines, including project orientation, tenancy, and so
forth. The predominant differences to account for are viewed as being location, changes in market conditions, and
project economics (including achievable rents, tenant sales, occupancy and so forth).
As apparent in the Sales Comparison Approach, many of the sales were given fair weight in the methodology due
to the fact that only a few of the centers are viewed as being truly “comparable” to the subject. With this in mind,
the transactions can only really set a range or bracket into which the subject would likely fall. Each of the centers
has varying degrees of risk, credit quality, and property characteristics in comparison to the subject.
Comparables 1, 5, 6 and 7 required among the least amount of adjustments when compared to the subject in the
Sales Comparison Approach, and consideration to these capitalization rates has been given. These sales suggest
cap rates ranging from 4.03 percent to 5.35 percent. With the subject’s near-term upside in income being less
realizable than these sales (since rents will be predominantly at or near market upon completion and stabilization),
it would therefore make sense for the subject’s cap rate to hedge toward the higher-end of this range.
On balance, we believe the sales tend to bracket a range in which the subject’s cap rate should fall. We have also
given weight to the average and median rates indicated by the survey.
With these thoughts in mind, the subject’s likely cap rate would fall somewhere toward the mid- to high-range of the
comparables, particularly since stabilization is still several years out, which would require some consideration for

future inflation risk that might push cap rates higher. As a result, we believe the comparable sales suggest an overall
capitalization rate for the subject ranging between 4.75% - 5.50%.
Capitalization Rate from Investor Surveys

Next, we have considered data extracted from the PwC Real Estate Investor Survey for competitive properties.
Earlier in the report, we presented historical capitalization rates for the prior four-year period. The most recent
information from this survey is listed below:
CAPITALIZATION RATES
Survey Date Range Average
PwC Second Quarter 2016 4.00% - 9.00% 6.00%
RERC First Quarter 2016 4.00% - 8.00% 5.70%
PwC - Refers to National Regional Mall Market market regardless of class or occupancy
Most retail properties that are considered institutional grade are existing, seasoned centers with good inflation
protection that offer stability in income and are strongly positioned to the extent that they are formidable barriers to
new competition. Equally important are centers which offer good upside potential after face-lifting, renovations, or
expansion. With new construction down substantially, owners have accelerated renovation and re-merchandising
programs. Little competition from over-building is likely in most mature markets within which these centers are
located. Environmental concerns and "no-growth" mentalities in communities are now serious impediments to new
retail development.
Investors have recognized that the retail landscape has been fundamentally altered by consumer lifestyles changes,
industry consolidations and bankruptcies. This trend has strongly been in evidence during the past two years.
Regional malls are finding increased competition from other retail formats such as power centers anchored by
discounters and other strong category killers and more recently from lifestyle centers.
Trends toward more casual dress at work and consumers growing pre-occupation with their leisure and home lives
have created the need for refocused leasing efforts to bring those tenants to the mall that help differentiate them
from the competition. As such, entertainment, a loosely defined concept, is one of the most common directions
malls have taken. A trend toward bringing in larger specialty and category tenants to the mall is also in evidence.
The risk from an owner’s standpoint is finding that mix which works the best. Finally, we see a dichotomy in
underwriting issues. Even though traditional anchors remain under pressure, stronger interest in regional malls has
clearly resulted in downward pressure on capitalization rates.
Based upon this discussion, we are inclined to group and characterize regional malls into the general categories
following:

M ALL GRAD ING MATR IX

MALL GRADING MATRIX
A+ A A- B+ B B- C D
PRIMARY TRADE AREA
Market Characteristics Primary Primary Primary Primary/Secondary Secondary Secondary/Tertiary Tertiary Opportunistic/Speculative
Population >500,000 >400,000 300,000-400,000 >300,000 >300,000 >250,000 >200,000 <200,000
Growth Strong Growth Stable to growing Stable to growing Stable to growing Stable to growing Stable to declining Stable to declining Declining
Income (Average Household) >market average >market average >market average >/= Market average = Market average </= Market average </= Market average <Market average
PHYSICAL ATTRIBUTES
Functional Issues None None None to minor issues None to minor issues Minor to some obsolescence. Some obsolescence Some obsolescence Substantial Obsolescence
Physical Condition Excellent condition with good sight Excellent condition with quality Good condition with typical Good condition with typical Average condition with typical Noticeable deferred maintenance; Deferred maintenance, dated Dated and obsolete appearance;
lines and functional layout. finishes; remodeled and appealing. ornamentation. May have been ornamentation. May have been ornamentation. Approaching end of need of cosmetic renovation. appearance. cap X needs present feasibility
renovated in last 5 to 10 yrs. renovated in last 10+ yrs. life cycle of last renovation. issues.
Expansion Potential May have expansion potential May have expansion potential May have expansion potential Expansion possibilities limited Expansion possibilities limited Expansion possibilities limited Expansion not probable. Expansion not probable.
associated with strong tenant
demand
ANCHORS
Number Four or more Three or more Three or more Three or more Three or more Two or more Two or more Two or fewer
Description Market share leaders, flagship & Market share leaders, flagship & Market share leaders, mixed with Market share leaders mixed with May have a mix of traditional and May have a mix of traditional and Mix of traditional & non-traditional Secondary players,
fashion orientation. May have a fashion orientation. Strong regional/national chains. traditional national and regional non-traditional stores. Department non-traditional stores. Department stores. At least one dark anchor. local, on-credit tenants. One or
successful open-air lifestyle attraction to alternative destination Reasonable attraction to alternative chains. Possible attraction to stores operate below chain-wide stores operate below chain-wide Operating stores at or below $100 more dark anchors. Operating
addition. anchors. destination anchors. alternative destination anchors. average. Higher risk of anchor average. Possible dark anchor(s) psf. Replacement depth is very stores well under $100 psf and risk
closures. with limited reuse potential. challenging. of store closure is very high.
MALL SHOP TENANTS
Occupancy (Perm. In-line) >97% >95% 90%-95% >90% >85% >80% 75%-85% <75%,trending down
Preferred Occ. Cost Ratio 17% or less 16% or less 15% to 16% 15% or less 13% or less 12% or less Under 11% preferred but often Under 10% preferred but usually
higher higher
Comp.Sales/SqFt* $750+ $600- $750 $500 - $600 $400 - $500 $300 - $400 $275 - $325 $200 - $300 <$200
Sales Change Strong Growth Good Growth Stable to growing Stable to growing Stable Stable to declining Stable to declining Declining
Tenant Mix Upscale, high % of unique shops. Upscale to traditional mix. Many Upscale to traditional mix. Many Traditional tenant mix. Some Traditional mix with some local or Traditional or value oriented, higher Traditional or value oriented, higher Non-cohesive, high % of
Many tenants display newest tenants display newest prototype tenants display newest prototype appeal to new store concepts. temp tenants. Some % of local/temps; mix of gross and % of local/temps, many on short local/temps. Many on % only or
prototype designs or unique designs. Some unique concepts. designs. Some unique concepts. Some Entertainment/Restaurants in Entertainment/Restaurants in mix. net deals. Minimal Entertainment term non-economic leases. No gross leases. No Entertainment
concepts. Strong option for new Entertainment/Restaurants part of mix. component. Entertainment component. component.
Entertainment/Restaurants big part Entertainment/Restaurant draw.
of draw. concepts.
COMPETITIVE POSITION
Aggregate Sales $500.0 mil+ $400.0 mil + $300.0 to 400.0 mil + $300.0 mil + $200.0 mil+ <$200.0 mil <$150.0 mil N/A
Location Absolute primary retail location in Very good location with good Good location with good peripheral Good location, stable residential Average location, likely not the Secondary location in the market, Secondary location which has a Location characterized by above
the market. Very strong peripheral peripheral and residential back up. and residential back up. Generally and proximate to employment primary retail quadrant in the below average demographics, high likelihood of further decline. average socio-economic
retail and ancillary commercial. Generally proximate to an interstate proximate to an interstate centers. market. higher vacancy in the commercial Unemployment above average and challenges, low percentage of
Strong sales from in-flow and interchange or major highway. interchange or major highway. sector. older housing stock with limited home ownership and deteriorating
tourism patrons. resale appeal. public infrastructure.
Existing Competition Inferior to subject Inferior to subject Inferior to equal Inferior to equal Equal to subject Better than the subject Better than subject Better than subject
Market Position Absolute barrier to entry. Strong Subject presents barrier to entry by Well positioned in its primary
Subject presents strong barrier to Established market position but Weak barrier to newer competitors Very vulnerable to changes in May be listed on Deadmalls.com
Franchise position, above average entry by competitors; above competitors; above average market market with evidence of erosion in vulnerable to newer competition; and formats; below average market competitive landscape. Is there a
market share. average market share. share. fringe areas; average to above average market share. share. potential to stabilize or is it on it's
average market share. way to a "D" mall?
In-flow Sales Strong sales in-flow from non- Good sales in-flow from non- Good sales in-flow from non- Some inflow of sales from non Some inflow of sales from non Tourism/In-Flow sales component N/A N/A
residents residents residents market visitors market visitors not material
Upside Good upside. Positive leasing Good upside with positive leasing Good upside with positive leasing Possible upside with positive Possible upside but positive leasing Limited upside; positive leasing Declining rents, many leases going Alternative highest and best use
spreads; high tenant appeal and spreads; good tenant appeal and spreads; good tenant appeal and leasing spreads; better than spreads may be challenging; spreads not likely; moderate tenant to gross or percent only; potential likely. Redevelopment may be
retention ratios; possible expansion retention ratios; possible expansion retention ratios; possible expansion average tenant appeal and moderate tenant appeal and appeal and retention ratios; redevelopment but likely not possible at some point depending
potential; above average NOI potential; above average NOI potential; above average NOI retention ratios; possible expansion retention ratios; possible expansion fluctuations in NOI growth. feasible in short term. on the feasibility of the economics.
growth. growth. growth. potential; average to above potential and moderate NOI growth
average NOI growth. potential.
COMMENTS
Fortress-type Mall, strong health Market-dominant, strong health Market-dominant, strong health Good quality investment grade Broad range of appeal tending Limited appeal with Limited appeal with No longer feasible to
ratios and upside growth. Typically ratios and upside growth make truly ratios and upside growth make truly asset in primary MSAs & 2nd tier toward investors attracted to some risk, likely not be significant risk, will function as enclosed
top 25 MSA's in Coastal regions. investment grade. Typically top 50 investment grade. Typically located cities. Health ratios may be 2nd tier locations and tertiary investment grade. Will attract only select group of regional mall in current
Good demand from REIT's and MSA's. Cap X funding has been in a top 75 MSA's. Cap X funding challenged.ratios; stable markets. Risk-reward profile attract a more limited pool of entrepreneurial investors. Possible condition. Will likely go dark in near
Institutional buyers. Partial interest adequate to maintain market has been adequate to hold market investment potential with broad gaining greater acceptance due to investors, may lend itself to a redevelopment opportunity. term. Price per pound is best
sales have become a popular position.Good demand from REIT's position. Demand from REIT's and buyer pool. Overall the broad "B" greater compression on higher repositioning strategy. Weaker Capitalization rates may vary investor metric.
capital raising mechanism. and Institutional buyers. Debt Institutional buyers. CMBS is a segment is being underwritten more quality cap rates. Alternatively assets in this category are finding significantly due to risk.
market spreads remain attractive. viable financing mechanism. conservatively. If center "has a lower quality malls more affected by financing harder to obtain.
story" it will command low end of current debt markets.
cap rate range.
Capitalization Rate Range 3.50%-4.25% 4.25%-5.25% 5.25%-6.00% 5.75%-6.75% 6.75%-9.00% 9.00%-11.00% 11.00%-18.00% Cap Rate N/A
IRR Range 5.50%-6.00% 6.00%-6.75% 6.50%-7.50% 7.50%-8.50% 8.00%-11.00% 11.00%-13.00% 13.00%-20.00% IRR N/A
Source: Cushman & Wakefield Retail Practice Group – Second Quarter 2016

As illustrated (please note the shading for the subject’s placement among the grading matrix), our grading of the
subject center tends to place the asset between the categories of Class A- and Class B+ malls, with a few rankings
falling into the Class A category, and two falling into the Class B grouping. The Class B+ grouping has capitalization
rates quoted between 5.25 percent and 6.00 percent, with the B+ segment ranging from 5.75 percent to 6.75
percent.
All considered, the characteristics and aspects of the subject property that would influence the overall rate appear
to support a capitalization rate within a broad range of, say, 5.25 percent and 6.00 percent.
Derivation of Ro from Mortgage-Equity Analysis

Most properties are purchased with debt and equity capital; therefore, the overall capitalization rate must satisfy
the market return requirements of both investment positions. The lender/mortgagee must anticipate a rate of return
that is appropriate for the investment’s perceived risk in order to make the loan; the loan principal is typically repaid
through periodic amortization payments. The equity investor/mortgagor must also anticipate a rate of return that is
commensurate with the investment’s perceived risk or they opt for an alternative investment.
Mortgage-equity analysis is defined by the sixth edition of The Dictionary of Real Estate Appraisal as “capitalization
and investment analysis procedures that recognize how mortgage terms and equity requirements affect the value
of income-producing property.” This analysis is also known as the Ellwood Formula, which is defined as a “yield
capitalization method that provides a formulaic solution for developing a capitalization rate for various combinations
of equity yields and mortgage terms. The formula is applicable only to properties with stable or stabilized income
streams and properties with income streams expected to change according to the J- or K-factor pattern.” Thus,
rates of return for debt and equity are analyzed as well as anticipated changes in both income and value.
The Ellwood formula is as follows:
YE – M(YE + P1/Sn – RM) - ∆O1/Sn

RO =
1 + ∆IJ
Where:
RO = overall capitalization rate
YE = equity yield rate
M = loan-to-value ratio
P = percentage of loan paid off
1/Sn = sinking fund factor at the equity yield rate
RM = mortgage capitalization rate or mortgage constant
∆O = change in total property value
∆I = total ratio change in income
J = J factor
The portion of the formula represented as: YE – M(YE + P1/Sn – RM) can be referred to as the basic capitalization
rate, which satisfies the lender’s requirement and adjustments for amortization; it also satisfies the investor’s equity
requirement before an adjustment is made for income and value changes. Therefore, the basic rate starts with an
investor’s yield requirement and adjusts it to reflect the effect of financing. The resulting basic capitalization rate is
the building block from which an overall capitalization rate can be developed with additional assumptions.

If level income and no change in value are anticipated, the basic rate will be identical to the overall capitalization
rate. The last part of the numerator, ∆O1/Sn, allows the appraiser to adjust the basic rate to reflect an expected
change in overall property value. If the value change is positive, referred to as property appreciation, the overall
capitalization rate is reduced to reflect this anticipated monetary benefit; if the change is negative, referred to as
depreciation, the overall capitalization rate is increased.
Finally, the denominator, 1 + ∆IJ, accounts for any change in income. The J-factor is always positive. Thus, if the
change in income is positive, the denominator will be greater than one and the overall rate will be reduced. If the
change in income is negative, the overall rate will be increased. For level-income applications, ∆ = 0, so the
denominator is 1 + 0, or 1.
The mortgage-equity procedure developed by Charles B. Akerson substitutes an arithmetic format for the algebraic
equation in the Ellwood formula. This format is applicable to level income situations; when modified with the J or K
factors, it can also be applied to changing income situations.
The Akerson formula for a level income situation is:
Loan Ratio x Annual Mortgage Constant = Mortgage Component

+ (Equity Ratio x Equity Yield Rate) + Equity Component
=
- (Loan Ratio x % Paid off in Projection Period x 1/Sn) – Credit for Equity Buildup
= Basic Rate = Basic Capitalization Rate
+ depreciation or – appreciation x 1/Sn ± Appreciation/Depreciation adjustment
= Overall Capitalization Rate = RO
In the following sections, we discuss the various components used in the Akerson formula, which are then followed
by a calculation of the overall capitalization rate.
Mortgage Terms
The following mortgage interest rate is based on periodic conversations with representatives of lending institutions
providing local mortgage financing. Thus, given the physical and economic characteristics of the subject property,
and on the basis of our research, the market terms for conventional loans made on properties similar to the subject
are as follows:
MORTGAGE COMPONENT
TYPICAL LOAN TERMS
Mortgage Rate 4.25%
Amortization Term (Years) 30
Number of Payments 360
Loan-to-Value Ratio (M) 60.00%
Equity Ratio (E) 40.00%
Mortgage Constant (RM) 5.90%
The preceding data are used in the development of an overall capitalization rate (RO) for the subject property.
The capitalization rate for debt (indicated in the preceding table) is known as the mortgage constant (RM); it is the
ratio of annual debt service to the principal amount of the mortgage loan. It is calculated as follows:

Monthly Payment x 12
RM =
Amount of Loan
The monthly payment of a loan is calculated using the following formula:
Interest Rate (i)

Monthly Payment =
1 – Present Value Factor
The Present Value Factor can be obtained from financial tables that show the six functions of a dollar.
Equity Yield Rate (Ye)
The Appraisal Institute defines equity yield rate as a rate of return on equity capital over the investment period. It is
the equity investor’s internal rate of return. The equity yield rate that will be employed in this analysis is a reflection
of current rates of return sought by equity investors.
Our selected YE is as follows:
EQUITY COMPONENT
Equity Yield Rate (YE) 10.00%
Projection Assumptions
Projection assumptions are as follows:
PROJECTION ASSUMPTIONS
Projection Period (n) 10 Years
Annual Appreciation/Depreciation 2.25% per Year
Total Appreciation/Depreciation 24.92%
The projection period represents a typical holding period for commercial real estate; this projected holding period
is also consistent with the typical yield capitalization projections. The annual appreciation/depreciation is projected
based on our view of current market conditions as well as future conditions anticipated during the holding period.
Both assumptions are considered reasonable for the subject property.
Sinking Fund Factor & Percentage of Loan Paid Off
The Sinking Fund Factor (1/Sn) that is employed in this analysis is calculated based on the estimated Equity Yield
Rate (YE) and the Projection Period using the following formula:
1/Sn = YE ÷ ((1+ YE)n – 1)
The portion of the loan that is paid off during the projection period is calculated based on the mortgage rate,
mortgage amortization term and the length of the projection period; this calculation is as follows:
1/Sn
Percentage of Loan Paid Off =
1/SNp
Where:

(Mortgage Rate ÷ 12)

1/SnP =
((1 + (Mortgage Rate ÷ 12))n in months – 1)
The sinking fund factor and the percentage of the loan paid off during the projection period, which are calculated
based on the foregoing assumptions, are as follows:
SINKING FUND FACTOR & PERCENTAGE PAID OFF

Sinking Fund Factor (1/Sn) 6.27%
Percentage of Loan Paid Off 20.56%
Calculation of Overall Capitalization Rate (RO)
The calculation of the overall capitalization rate (RO) using the mortgage-equity technique is as follows:
MORTGAGE-EQUITY PROCEDURE - DEVELOPMENT OF CAPITALIZATION RATE

Loan-to-Value Ratio x Mortgage Constant = 60.00% x 5.90% = 3.54%
Equity Ratio x Equity Yield Rate = 40.00% x 10.00% = 4.00%
Weighted Average 7.54%
Less Credit for Equity Build-up

Loan-to-Value Ratio x % of Loan Paid off x Sinking Fund Factor = 60.00% x 20.56% x 6.27% = 0.77%
Basic Rate 6.77%
Less Appreciation/Depreciation
Appreciation/Depreciation x Sinking Fund Factor = 24.92% x 6.27% = 1.56%
Indicated Overall Rate (RO) 5.20%
Capitalization Rate Conclusion

Based upon this analysis, we can develop a going-in capitalization rate for the subject based upon its existing and
proposed tenancy, investment appeal, quality, and inherent risks. We have considered all of the above relative to
the physical and economic characteristics of the subject property.
In our selection of cap rates for the subject, we have placed specific emphasis on the quality and durability of the
forecasted income stream. Included in our selection of the appropriate capitalization rate:
 Property Characteristics – Our selection of an appropriate capitalization rate for the subject has tried to take
into account all of the property characteristics and circumstances discussed in this report. Included among
these considerations are the level of in-line shop sales, the expiration schedule of tenants in the next two to
three years, if applicable, the historic occupancy found within the center, the demographic profile of the trade
area, and the quality and condition of improvements, among other factors. All of these items come to bear on
this process, and influence our selection of sale comparables and investment rates for comparison with the
subject.

 Improved Sale Comparables – The improved sales utilized in the Sales Comparison Approach are viewed as
being fair indicators of value for the subject property, many with fairly similar physical characteristics as the
subject. These sales are viewed as providing a fair indicator of the potential cap rate for the subject. As
discussed, the analysis of sales tend to support a capitalization rate for the subject ranging from 4.75% - 5.50%.
As also noted, the future prospective nature of the value upon stabilization, which is still several years out,
tends to suggest a cap rate toward the middle- to upper-end of this range.
 Grading Matrix – The grading matrix utilized in this analysis has been given strong credence when determining
an appropriate capitalization rate. As shown, we have been able to analyze the subject property in consideration
of several key aspects that the market considers in pricing and value. The subject’s ranking as a predominantly
“A-” to “B+” center plays heavily into our selection of the capitalization rate. These groupings center around a
capitalization rate 5.25 percent to 6.00 percent (“A-”) and 5.75 percent to 6.75 percent (“B+”). As suggested,
we believe the ranking tends to support a cap rate for the subject in a range of 5.25 percent to 6.00 percent.
 Mortgage Equity Analysis – Though this component to the analysis has many more inputs that can influence
the outcome of the cap rate calculation, the analysis can be used to test the other indications in light of the
subject’s market position. While less weight might typically be given to the mortgage equity outcome, the
analysis tends to support the cap rate indicators of the other methods.
On balance, we find that the subject, upon completion and stabilization, can be classified as a very good quality,
well-located center, in an area that has seen stable demographic trends in terms of population and household
growth, with stable-to-average demographic forecasts into the foreseeable future.
In addition to the above observations and considerations, we have also considered the following points:
 Ballston Quarter is situated in a strong trade area, with good exposure in the heart of Ballston, and supported
by a dense population base with above-average income levels. This location is relatively unique, providing the
center with good visibility and access to the local market area and office-using employment base.
 The property contains a typical-to-average major/anchor tenant alignment that helps establish the subject as a
major retail center for this segment of the market.
 Upon completion of the redevelopment, Ballston Quarter will be in excellent condition.
 Tenant sales at the subject property have traditionally been below-average, but are anticipated to be much
stronger following redevelopment and repositioning.
 Occupancy costs are projected to be quite reasonable for an urban/enclosed mall of this nature, suggesting
some potential upside in market rent and reimbursement levels.
 Finally, the property appears to be well-positioned to capture its fair share of market expenditure potential, as
well as future growth of the region.
In the end, we have considered OARs indicated by sales of comparable properties, national investor surveys, and
the opinions of brokers, owners, and prospective purchasers. The indications from these various sources are
summarized as follows:

CAPITALIZATION RATE SUMMARY

Comparable Sales All Sales: 4.03% - 5.35% 4.73%
Concluded Range: 4.75%
to 5.50%
Investor Survey Data PwC 4.00% - 9.00% 6.00%
RERC 4.00% - 8.00% 5.70%
Grading Matrix Concluded Range: 5.25%
to 6.00%
Market Participants 4.75% - 5.75% 5.25%
Mortgage Equity Analysis 5.20%
Conclusion 5.25%
We believe that data derived from our discussions with market participants most clearly reflects current market
parameters. Given the property attributes and prevailing market return rates, we conclude that a 5.25 percent
capitalization rate represents reasonable investor criteria under current market conditions, and incorporating
additional basis points for the risks associated with projecting a prospective, future value.
Direct Capitalization Method Conclusion

Prospective Value Upon Stabilization
In the Direct Capitalization Method, we developed an opinion of market value by dividing year three net operating
income by our selected overall capitalization rate. Our conclusion using the Direct Capitalization Method is as
follows:
DIRECT CAPITALIZATION METHOD

Prospective Market Value Upon Stabilization
NET OPERATING INCOME $13,339,035 $37.12
Sensitivity Analysis (0.50% OAR Spread) Value $/SF GLA
Based on Low-Range of 4.75% $280,821,789 $781.38
Based on Most Probable Range of 5.25% $254,076,857 $706.96
Based on High-Range of 5.75% $231,983,217 $645.49
Preliminary Value $254,076,857 $706.96
Rounded to nearest $100,000 $254,100,000 $707.03
$254,076,857
ADJUSTMENTS TO PRELIMINARY VALUE
LESS Lease-Up Costs ($22,500,000) ($62.61)
Indicated Value $231,576,857 $644.36
Prospective Value Upon Completion

With this first stabilized value in mind, we have estimated the prospective value of the property upon completion,
using the adjustment discussed in the Sales Comparison Approach. Based upon the analysis, we have estimated
the Prospective Value Upon Completion as follows:
Prospective Stabilized Value Via Direct Capitalization $ 254,100,000

Prospective Value Upon Completion $ 231,600,000

As-Is Market Value

In similar fashion, we have estimated the as-is market value of the property, using the adjustment discussed in the
Sales Comparison Approach. Based upon the analysis, we have estimated the As-Is Market Value as follows:
Prospective Completion Value Via Direct Capitalization $ 231,600,000

As-Is Market Value $ 96,000,000
Yield Capitalization Method

In the Yield Capitalization Method, we have employed ARGUS - Version 15 software to model the income
characteristics of the property and to make a variety of cash flow assumptions. In so doing, we have attempted to
reflect the most likely investment assumptions of typical buyers and sellers in this market segment.
General Cash Flow Assumptions
The initial start date of the Yield Capitalization analysis is January 01, 2018 (the forecasted date of completion). In
turn, we performed the analysis on a calendar year basis. On an at-completion basis, the analysis incorporates a
forecast period of 13 years, and a holding period of 12 years, which corresponds to an optimum year for reversion,
as well as the reversion year utilized in the stabilized cash flow.
The following table outlines the assumptions used in the Yield Capitalization analysis.
DISCOUNTED CASH FLOW MODELING ASSUMPTIONS
VALUATION SCENARIO: Prospective Market Value Upon Completion
GENERAL CASH FLOW ASSUMPTIONS GROWTH RATES
Cash Flow Software: ARGUS - Version 15 Market Rent: 2.50%
Cash Flow Start Date: January 1, 2018 Retail Sales: 2.50%
Calendar or Fiscal Analysis: Calendar Expenses: 2.50%
Investment Holding Period: 12 Years Tenant Improvements: 2.50%
Analysis Projection Period: 13 Years Real Estate Taxes: 3.00%
Tenant Sales Growth 2.5% per year
VACANCY & COLLECTION LOSS RATES OF RETURN

Global Vacancy: 3.00% Internal Rate of Return: (Cash Flow) 7.25%
Global Collection Loss: 1.00% Internal Rate of Return: (Reversion) 7.25%
Total Vacancy & Collection Loss: 4.00% Terminal Capitalization Rate: 5.75%
Reversionary Sales Cost: 2.00%
Credit Tenant Overide Rate (Vacancy): 0.00% Basis Point Spread (OARout vs. OARin) 50 pts
Credit Tenant Overide Rate (Collection Loss): 0.00%
VALUATION
CAPITAL EXPENDITURES Prospective Market Value Upon Completion $226,074,354
Reserves for Replacement ($/SF): $0.20 Adjustments to Value $0
Other Deductions ($) N/A Adjusted Value $226,074,354
Rounded to nearest $100,000 $226,100,000
Value $/SF $629.12

Growth Rate Assumptions
The following information was extracted from the PwC and RERC Investor Surveys, and was used to help determine
our growth rate assumptions.
OTHER INVESTOR SURVEY INFORMATION

Survey Data Range Average
PwC Second Quarter 2016 Rent Change Rate 0.00% - 5.00% 2.65%
Expense Change Rate 2.00% - 5.00% 3.00%
RERC First Quarter 2016 Rent Change Rate 2.00% - 4.50% 3.10%
Expense Change Rate 2.00% - 3.00% 2.80%
Leasing Assumptions
The contract lease terms for the existing tenants were used within the Yield Capitalization analysis, with market
leasing assumptions applied for renewals and absorption tenants. The income and expense information that was
previously presented has been used as the basis for our market leasing projections.
The following chart summarizes the leasing assumptions that were used in preparing our Yield Capitalization
analysis.
LEASING ASSUMPTIONS
Concourse Concourse Second Tower Retail Tower Retail Tower Retail Anchor
TENANT CATEGORY Food Level First Level Level Third Level 1 2 3 Drug Health Club Cinemas Tenants
WEIGHTED ITEMS
Renewal Probability 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00%
Market Rent $77.00 $46.00 $46.00 $38.50 $27.50 $44.00 $30.00 $27.00 $35.00 $16.00 $14.00 $0.00
Months Vacant 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00
Tenant Improvements
New Leases $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $20.00 $20.00 $20.00 $0.00
Renewal Leases $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Vacant Suites $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 -- -- -- --
Leasing Commissions (1)
New Leases $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $3.50 $3.50 $3.50 $0.00
Renewal Leases $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $1.75 $1.75 $1.75 $0.00
Free Rent
New Leases 0 0 0 0 0 0 0 0 0 0 0 0
Renewal Leases 0 0 0 0 0 0 0 0 0 0 0 0
NON-WEIGHTED ITEMS
Lease Term (years) 7 7 7 7 7 7 7 7 10 10 10 10
Lease Type (reimbursements) Net Net Net Net Net Net Net Net Net Net Net Net
Contract Rent Increase Projection 2.5% per 2.5% per 2.5% per 2.5% per 2.5% per 2.5% per 2.5% per 2.5% per 10% every 10% every 10% every 10% every
annum annum annum annum annum annum annum annum 5 years 5 years 5 years 5 years
(1) Leasing Commissions are detailed below
Renewal Probability
Upon lease expiration, it is our best estimate that there is a 75.00 percent probability that an existing tenant will
renew their lease. While this figure might be low by some industry benchmarks, we believe it is a reasonable
assumption for an investor to make. It is noted that most of the major mall owner’s in the U.S. report average tenant
retention ratios of 80.0 to 85.0 percent for expiring specialty store leases across their portfolios.
The renewal probability utilized in the cash flow has been derived from our experience with similar properties, as
well as our review of recent leasing trends at the property and our understanding of how investors and brokers
develop assumptions for properties such as the subject. Perhaps more importantly, the renewal probability should
be reflective of what current investors may deem as appropriate in the current market. The renewal probability used
in this analysis tends to be similar to other centers with similar ratings.

Leasing Commissions
Leasing commissions have been based upon the generally accepted standard schedule. Major/anchor tenants
have different leasing commission schedules than in-line shops or satellite tenants. For major/anchor tenants, we
have modeled a leasing commission of $3.50 per square foot for new leases, with renewals garnering half that rate.
For smaller in-line shop tenants, the standard schedule for new leases has been based upon $5.00 per square foot
for new tenants, and $2.50 per square foot for renewals. Leasing commissions are typically higher for new tenants
than renewal tenants. A new tenant causes a full commission to be paid, whereas a renewing tenant typically results
in a half commission. We have incorporated these standard assumptions in our cash flow projection.
Tenant Improvements
The principal component of this expense is ownership's estimated cost to prepare a vacant suite for tenant use. At
the start of a new lease or at the expiration of an existing lease, we have made a provision for the likely expenditure
of some monies on ownership's part for tenant improvement allowances. In this regard, we have forecasted a cost
of $30.00 per square foot for turnover space (initial cost growing at expense growth rate) weighted by our turnover
probability of 25.0 percent. We have provided for a $0.00 per square foot alteration allowance on renewal (rollover)
retail tenants. The blended rate based on our 75/25 turnover probability is therefore $7.50 per square foot. These
costs are forecasted to increase at our implied expense growth rate.
For suites that remain vacant at completion, a higher TI allowance of $40.00 per square foot has been included to
help facilitate lease-up and prepare suites for occupancy.
The aforementioned costs apply to in-line small shop space. For major tenants, TI allowances of $20.00 for new
tenants and $0.00 per square foot for renewal tenants have been provided.
The allowances provided for in the cash flow forecast take into consideration historical trends, as well as what we
believe a prudent investor would consider reasonable and prudent.
Replacement Reserve
It is customary and prudent to set aside an amount annually for the replacement of short-lived capital items such
as the roof, parking lot and certain mechanical items. Some of the repairs and maintenance expense category can
often be passed through to the tenants. This appears to be a fairly common practice among most retail centers.
However, we feel that, over a holding period, some repairs or replacements will be needed that will not be passed
on to the tenants.
Typical replacement reserves range anywhere from $0.10 to $0.30 per square foot depending upon the age and
quality of the center. Upon completion, the subject property will be considered to be in excellent condition. For
purposes of this report, we have estimated an expense of $0.20 per square foot of GLA to cover these potential
expenses, thereafter increasing by our expense growth rate.
Financial Assumptions
The financial assumptions used in the Yield Capitalization process are discussed in the following commentary.
Terminal Capitalization Rate Selection
A terminal capitalization rate was used to develop an opinion of the market value of the property at the end of the
assumed investment holding period. The rate is applied to the net operating income following year 12 before making
deductions for leasing commissions, tenant improvement allowances and reserves for replacement. We developed
an opinion of an appropriate terminal capitalization rate based on rates in current investor surveys.

TERMINAL CAPITALIZATION RATES (OARout)

Investors will typically use a slightly more conservative overall rate when exiting an investment versus the rate that
would be used going into the investment. This accounts both for the aging associated with the improvements over
the course of the holding period, and for any unforeseen risks that might arise over that time period.
As a result, we applied a terminal rate of 5.75 percent in our analysis. This rate is 50 basis points above the overall
rate going into the investment (used in the direct capitalization method), which is considered reasonable.
Reversionary Sales Costs
We estimated the cost of sale at the time of reversion to be 2.00 percent, which is in keeping with local market
practice.
Discount Rate Selection
We developed an opinion of future cash flows, including property value at reversion, and discounted that income
stream at an internal rate of return (IRR) currently required by investors for similar-quality real property. The IRR
(also known as yield) is the single rate that discounts all future equity benefits (cash flows and equity reversion) to
an opinion of net present value.
The PwC and RERC Investor Surveys indicate the following internal rates of return for competitive properties:
DISCOUNT RATES (IRR)

The above table summarizes the investment parameters of some of the most prominent investors currently
acquiring similar investment properties in the United States. We realize that this type of survey reflects target rather
than transactional rates. Transactional rates are usually difficult to obtain in the verification process and are actually
only target rates of the buyer at the time of sale. The property’s performance will ultimately determine the actual
yield at the time of sale after a specific holding period.
The yield rate on a long-term real estate investment can also be compared with yield rates offered by alternative
financial investments since real estate must compete in the open market for capital. In developing an appropriate
risk rate for the subject, consideration has been given to a number of different investment opportunities. The
following is a list of rates offered by other types of securities.

MARKET RATES AND BOND YIELDS (%)

April 22, 2016
Instrument Rate
Reserve Bank Discount Rate 1.00%
Prime Rate 3.50%
3-Month Treasury Bills 0.23%
U.S. 10-Year Bonds 1.88%
U.S. 20-Year Bonds 2.29%
Corporate Bonds (Moody’s Aaa rated) 3.57%
Source: Federal Reserve Statistical Release
Real estate investment typically requires a higher rate of return (yield) and is much influenced by the relative health
of financial markets. A retail center investment tends to incorporate a blend of risk and credit based on the tenant
mix, the anchors that are included (or excluded) in the transaction, and the assumptions of growth incorporated
within the cash flow analysis. An appropriate discount rate selected for a retail center thus attempts to consider the
underlying credit and security of the income stream, and includes an appropriate premium for liquidity issues relating
to the asset.
There has historically been a consistent relationship between the spread in rates of return for real estate and the
“safe” rate available through long-term treasuries or high-grade corporate bonds. A narrower gap between return
requirements for real estate and alternative investments has been created in recent years due to the abundance of
third party financing, and the rise in property values. The Korpacz Real Estate Investor survey provides a historical
analysis that shows the differential between 10 Year Treasuries and Average yield rates. Historically, this differential
has been from 400 to 700 basis points. Korpacz also includes a comparison between long-term mortgage rates
and yield rates. It appears that this relationship ranges from about 200 to 400 basis points. The relationship between
average yields, mortgages and 10 Year Treasuries is summarized on the following chart:
YIELD COMPARISON
2010 2011 2012 2013 2014 2015 2015 2016
Yield Indicators Average Average Average Average Average Average October January
PwC Yield Indicator 9.58% 9.05% 8.77% 8.39% 8.11% 7.82% 7.75% 7.73%
Long-Term Mortgages 5.60% 5.21% 4.48% 4.16% 4.48% 4.31% 4.31% 4.49%
10-Year Treasuries 3.31% 2.96% 1.86% 2.22% 2.69% 2.34% 2.05% 2.24%
Consumer Price Index Change 1.17% 3.49% 2.16% 0.97% 1.66% 0.19% -1.37% -1.55%
Spread to PYI (Basis Points)

Long-Term Mortgages/Yield Rate Differential 398 384 429 423 363 351 344 324
10-Year Treasuries/Yield Rate Differential 627 609 691 617 542 548 570 549
Consumer Price Index Change/Yield Rate Differential 841 556 661 742 645 763 912 928
Source: PriceWaterhouseCoopers, Investory Survey - First Quarter 2016
In addition to the survey, we have also estimated an appropriate discount rate based on the formula Y = R + CR.
This formula states that the discount rate is equal to the overall rate (Going in rate), plus the value increase over
the holding period. The reversion value derived in the twelfth year of the discounted cash flow analysis is
approximately $296,800,000. In the direct capitalization analysis, the value conclusion is $231,600,000. This value
increase over the nine-year period (from stabilization) indicates an annual value increase of 2.79 percent. When
added to the 5.25 percent used in the direct capitalization analysis, the indicated yield rate is 8.04 percent.
Finally, as shown previously among the C&W Grading Matrix investment rates, IRRs for properties of the subject’s
general classification average between 6.50 and 7.50 percent (Class A- malls), and 7.50 to 8.50 percent (Class B+
malls). Generally, the rates cited tend to be supported through conversations we have had with acquisitions

professionals with several major investment and institutional buyers, as well as our understanding of discounts
used in some of the comparable sales.
We previously discussed all factors that would influence our selection of a discount rate for the subject property.
Upon completion, the risks associated with the project in it’s as-is condition (i.e. still requiring redevelopment), are
reduced as uncertainties concerning construction costs and some of the leasing have been eliminated. Accordingly,
we believe a discount rate of 7.25 percent is appropriate for the Upon Completion analysis.
Upon stabilization, the risks associated with the project are further reduced by the date of stabilization, as all the
risks associated with construction costs and tenant procurement have been eliminated, and the property will have
established a bit of a track record. Therefore, we believe a lower discount rate of 7.00 percent is appropriate for the
Upon Stabilization analysis.
Yield Capitalization Method Conclusion
The ARGUS - Version 15 cash flow is presented on the following page. The cash flow commencement date is
January 1, 2018. Our cash flow projection and valuation matrix are presented at the end of this section.

ANNUAL CASH FLOW REPORT Annual Annual Annual

Ballston Quarter Growth Growth Growth
1 2 3 4 5 6 7 8 9 10 11 12 13 Year 1 - Year 1 - Year 3 -
For the Years Beginnning Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 Jan-29 Jan-30
For the Years Ending Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Dec-29 Dec-30 Year 12 Year 12 Year 12
Base Rental Revenue $8,544,399 $10,636,124 $12,158,727 $12,424,556 $12,683,495 $12,958,731 $13,393,855 $13,792,298 $14,118,181 $14,423,074 $14,721,934 $15,106,163 $15,562,207 5.32% 5.32% 2.44%
Absorption & Turnover Vacancy 0 0 (91,348) 0 0 (331,502) 0 (583,758) (223,674) (60,578) (602,719) (235,820) (530,928) 11.11%
Scheduled Base Rental Revenue $ 8,544,399 $ 10,636,124 $ 12,067,379 $ 12,424,556 $ 12,683,495 $ 12,627,229 $ 13,393,855 $ 13,208,540 $ 13,894,507 $ 14,362,496 $ 14,119,215 $ 14,870,343 $ 15,031,279 5.17% 5.17% 2.35%
Retail Sales Revenue 0 3,955 3,955 3,955 4,634 15,664 26,970 32,132 50,437 62,613 75,092 87,884 100,996 41.14%
Common Area Maintenance 2,891,955 3,683,665 4,192,410 4,365,889 4,475,042 4,478,934 4,752,317 4,658,436 4,921,161 5,101,582 5,050,887 5,298,726 5,287,442 5.66% 5.66% 2.64%
Real Estate Taxes 1,613,430 1,977,332 2,131,858 2,201,328 2,267,374 2,320,495 2,405,451 2,437,908 2,546,719 2,627,172 2,657,967 2,782,421 2,846,306 5.08% 5.08% 3.00%
Total Reimbursement Revenue $ 4,505,385 $ 5,660,997 $ 6,324,268 $ 6,567,217 $ 6,742,416 $ 6,799,429 $ 7,157,768 $ 7,096,344 $ 7,467,880 $ 7,728,754 $ 7,708,854 $ 8,081,147 $ 8,133,748 5.46% 5.46% 2.76%
Tenant Utilities 1,169,589 1,192,980 1,216,843 1,247,264 1,278,446 1,310,407 1,343,167 1,376,746 1,411,165 1,446,444 1,482,605 1,519,670 1,557,662 2.41% 2.41% 2.50%
Tenant HVAC 192,139 219,882 224,280 229,887 235,634 241,525 247,563 253,752 260,096 266,598 273,263 280,095 287,097 3.49% 3.49% 2.50%
Specialty Leasing 468,000 479,700 491,693 503,985 516,585 529,500 542,737 556,305 570,213 584,468 599,080 614,057 629,409 2.50% 2.50% 2.50%
Other Income 139,000 143,170 146,723 150,391 154,151 158,005 161,955 166,004 170,154 174,408 178,768 183,237 187,818 2.54% 2.54% 2.50%
TOTAL GROSS REVENUE $ 15,018,512 $ 18,336,808 $ 20,475,141 $ 21,127,255 $ 21,615,361 $ 21,681,759 $ 22,874,015 $ 22,689,823 $ 23,824,452 $ 24,625,781 $ 24,436,877 $ 25,636,433 $ 25,928,009 4.98% 4.98% 2.53%
General Vacancy (377,838) (479,572) (516,910) (563,631) (577,416) (256,762) (611,703) (80,173) (417,728) (598,760) (65,972) (455,142) (250,403) 1.71% 1.71% -1.40%
Collection Loss (131,913) (165,640) (188,332) (193,626) (198,290) (198,679) (210,003) (207,969) (218,121) (225,829) (223,626) (234,941) (238,054) 5.39% 5.39% 2.49%
EFFECTIVE GROSS REVENUE $ 14,508,761 $ 17,691,596 $ 19,769,899 $ 20,369,998 $ 20,839,655 $ 21,226,318 $ 22,052,309 $ 22,401,681 $ 23,188,603 $ 23,801,192 $ 24,147,279 $ 24,946,350 $ 25,439,552 5.05% 5.05% 2.62%
Common Area Maintenance 2,047,713 2,098,906 2,151,378 2,205,163 2,260,292 2,316,799 2,374,719 2,434,087 2,494,939 2,557,313 2,621,246 2,686,777 2,753,946 2.50% 2.50% 2.50%
Real Estate Taxes 2,014,526 2,074,962 2,137,211 2,201,327 2,267,367 2,335,388 2,405,449 2,477,613 2,551,941 2,628,500 2,707,354 2,788,575 2,872,232 3.00% 3.00% 3.00%
Food Court 160,368 164,377 168,487 172,699 177,016 181,442 185,978 190,627 195,393 200,278 205,285 210,417 215,677 2.50% 2.50% 2.50%
Tenant HVAC 290,761 298,030 305,481 313,118 320,946 328,969 337,194 345,623 354,264 363,121 372,199 381,504 391,041 2.50% 2.50% 2.50%
Marketing & Promotion 750,000 768,750 787,969 807,668 827,860 848,556 869,770 891,514 913,802 936,647 960,063 984,065 1,008,667 2.50% 2.50% 2.50%
General & Administrative 250,000 256,250 262,656 269,223 275,953 282,852 289,923 297,171 304,601 312,216 320,021 328,022 336,222 2.50% 2.50% 2.50%
Specialty Leasing 23,400 23,985 24,585 25,199 25,829 26,475 27,137 27,815 28,511 29,223 29,954 30,703 31,470 2.50% 2.50% 2.50%
Management Fee 435,263 530,748 593,097 611,100 625,190 636,790 661,569 672,050 695,658 714,036 724,418 748,390 763,187 5.05% 5.05% 2.62%
TOTAL OPERATING EXPENSES $ 5,972,031 $ 6,216,008 $ 6,430,864 $ 6,605,497 $ 6,780,453 $ 6,957,271 $ 7,151,739 $ 7,336,500 $ 7,539,109 $ 7,741,334 $ 7,940,540 $ 8,158,453 $ 8,372,442 2.88% 2.88% 2.68%
NET OPERATING INCOME $ 8,536,730 $ 11,475,588 $ 13,339,035 $ 13,764,501 $ 14,059,202 $ 14,269,047 $ 14,900,570 $ 15,065,181 $ 15,649,494 $ 16,059,858 $ 16,206,739 $ 16,787,897 $ 17,067,110 6.34% 6.34% 2.59%
Replacement Reserve 71,878 73,675 75,517 77,405 79,340 81,324 83,357 85,441 87,577 89,766 92,010 94,311 96,668 2.50% 2.50% 2.50%
Tenant Improvements 1,948,040 2,225,972 171,278 0 0 379,433 0 611,933 232,006 122,617 609,113 300,838 686,597 -15.62% -15.62% 6.46%
Leasing Commissions 243,505 278,248 74,934 0 0 158,096 0 256,409 96,669 51,091 253,795 125,349 290,650 -5.86% -5.86% 5.88%
TOTAL LEASING & CAPITAL COSTS $ 2,263,423 $ 2,577,895 $ 321,729 $ 77,405 $ 79,340 $ 618,853 $ 83,357 $ 953,783 $ 416,252 $ 263,474 $ 954,918 $ 520,498 $ 1,073,915 -12.51% -12.51% 5.49%
CASH FLOW BEFORE DEBT SERVICE $6,273,307 $8,897,693 $13,017,306 $13,687,096 $13,979,862 $13,650,194 $14,817,213 $14,111,398 $15,233,242 $15,796,384 $15,251,821 $16,267,399 $15,993,195 9.05% 9.05% 2.51%
Implied Overall Rate 3.78% 5.08% 5.90% 6.09% 6.22% 6.31% 6.59% 6.66% 6.92% 7.10% 7.17% 7.43%
Cash on Cash Return 2.78% 3.94% 5.76% 6.05% 6.18% 6.04% 6.55% 6.24% 6.74% 6.99% 6.75% 7.20%

The following graph depicts the forecasted change in both net income and net cash flow over the analysis period.
NOI vs. Cash Flow
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$-
1 2 3 4 5 6 7 8 9 10 11 12 13
Net Operating Income Cash Flow Before Debt Service
Yield Capitalization Method Conclusion – Prospective Value Upon Completion
The following table summarizes the parameters used to determine the prospective value of the subject property
upon completion of construction. The value conclusion is also presented below:
VALUATION SCENARIO: Prospective Market Value Upon Completion
ADDITIONAL ASSUMPTIONS VALUATION
Holding Period: 12 Years Prospective Market Value Upon Completion $226,074,354
Projection Period: 13 Years Adjustments to Value $0
Start Date: 1/1/2018 Adjusted Value $226,074,354
Internal Rate of Return: (Cash Flow) 7.25% Rounded to nearest $100,000 $226,100,000
Internal Rate of Return: (Reversion) 7.25% Value $/SF $629.12
Terminal Capitalization Rate: 5.75%
The value matrix correlating to this valuation is presented below:
PRICING MATRIX - Prospective Market Value Upon Completion

Terminal Discount Rate (IRR) for Cash Flow
Cap Rates 6.75% 7.00% 7.25% 7.50% 7.75%
5.25% $ 249,011,005 $ 243,446,762 $ 238,035,184 $ 232,771,582 $ 227,651,427
5.50% $ 242,398,143 $ 237,016,943 $ 231,782,932 $ 226,691,597 $ 221,738,579
5.75% $ 236,360,312 $ 231,146,239 $ 226,074,354 $ 221,140,307 $ 216,339,891
6.00% $ 230,825,634 $ 225,764,760 $ 220,841,491 $ 216,051,624 $ 211,391,094
6.25% $ 225,733,730 $ 220,813,799 $ 216,027,257 $ 211,370,035 $ 206,838,201
IRR Reversion 6.75% 7.00% 7.25% 7.50% 7.75%

Cost of Sale at Reversion: 2.00%
Percent Residual: 55.55%

Based on the rates selected, the value via the Yield Capitalization analysis is estimated at $226,100,000, rounded.
The reversion contributes 55.55 percent to this value estimate.
Yield Capitalization Method Conclusion – Prospective Value Upon Stabilization
The following table summarizes the parameters used to determine the prospective value of the subject property
upon stabilization. The value conclusion is also presented below:
VALUATION SCENARIO: Prospective Market Value Upon Stabilization
ADDITIONAL ASSUMPTIONS VALUATION
Holding Period: 10 Years Prospective Market Value Upon Stabilization $249,029,197
Projection Period: 11 Years Adjustments to Value $0
Start Date: 1/1/2020 Adjusted Value $249,029,197
Internal Rate of Return: (Cash Flow) 7.00% Rounded to nearest $100,000 $249,000,000
Internal Rate of Return: (Reversion) 7.00% Value $/SF $692.84
Terminal Capitalization Rate: 5.75%
The value matrix correlating to this valuation is presented below:
PRICING MATRIX - Prospective Market Value Upon Stabilization

Terminal Discount Rate (IRR) for Cash Flow
Cap Rates 6.50% 6.75% 7.00% 7.25% 7.50%
5.25% $ 273,345,503 $ 268,167,599 $ 263,112,066 $ 258,175,643 $ 253,355,162
5.50% $ 265,630,999 $ 260,631,870 $ 255,750,567 $ 250,983,951 $ 246,328,979
5.75% $ 258,587,322 $ 253,751,423 $ 249,029,197 $ 244,417,624 $ 239,913,769
6.00% $ 252,130,617 $ 247,444,346 $ 242,867,942 $ 238,398,490 $ 234,033,159
6.25% $ 246,190,449 $ 241,641,835 $ 237,199,587 $ 232,860,888 $ 228,622,999
IRR Reversion 6.50% 6.75% 7.00% 7.25% 7.50%

Cost of Sale at Reversion: 2.00%
Percent Residual: 59.38%
Based on the rates selected, the value via the Yield Capitalization analysis is estimated at $249,000,000, rounded.
The reversion contributes 59.38 percent to this value estimate.
Reconciliation within the Income Capitalization Approach

The following is a summary of our concluded values in the Income Capitalization Approach:
INCOME CAPITALIZATION APPROACH CONCLUSION

Prospective Market Prospective Market
Market Value Value Value
Methodology As-Is PSF Upon Completion PSF Upon Stabilization PSF
Yield Capitalization $90,500,000 $251.81 $226,100,000 $629.12 $249,000,000 $692.84
Direct Capitalization $96,000,000 $267.12 $231,600,000 $644.42 $254,100,000 $707.03
Income Approach Conclusion $92,900,000 $258.49 $228,500,000 $635.80 $251,000,000 $698.40

In our analysis of the property, we have given relatively equal weight to the discounted cash flow and direct
capitalization methods due to the availability of information and data. The DCF method may be better suited to take
into consideration some of the costs associated with re-leasing space over the holding period and, as such, should

be considered as such. However, the capitalization rate utilized herein appears well-supported by several of the
improved property sales. Thus, fair weight has been placed on the direct capitalization method as well, which
emphasizes the property’s actual performance and potential in the current market.

BALLSTON QUARTER RECONCILIATION AND FINAL VALUE OPINION
Reconciliation and Final Value Opinion

Valuation Methodology Review and Reconciliation
The approaches to value included in this report indicated the following:
FINAL VALUE RECONCILIATION

Prospective Market Prospective Market
Market Value Value Value
As-Is PSF Upon Completion PSF Upon Stabilization PSF
Date of Value August 2, 2015 January 1, 2018 January 1, 2020
Land Valuation
Land Value $40,000,000 $250.09 $41,950,000 $193.03 $43,650,000 $200.85

Percentage Adjustment Method $106,100,000 $295.22 $241,700,000 $672.52 $264,200,000 $735.13
Conclusion $106,100,000 $295.22 $241,700,000 $672.52 $264,200,000 $735.13

Yield Capitalization $90,500,000 $251.81 $226,100,000 $629.12 $249,000,000 $692.84
Direct Capitalization $96,000,000 $267.12 $231,600,000 $644.42 $254,100,000 $707.03
Conclusion $92,900,000 $258.49 $228,500,000 $635.80 $251,000,000 $698.40
Final Value Conclusion $93,900,000 $261.27 $229,500,000 $638.58 $252,000,000 $701.18

We have briefly discussed the applicability of each of the methods presented. Because of certain vulnerable
characteristics in the Sales Comparison Approach, it has been used as supporting evidence and as a final check
on the value conclusion indicated by the Income Capitalization Approach methodologies. As noted, the use of sales
transactions that may not be reflective of current market trends lends to placing less weight on this component of
the valuation.
The ranges in value exhibited by the Income Capitalization Approach are generally consistent with the leasing
profile of the property, with the discounted cash flow suggesting income and value attributable to future years,
whereby the direct capitalization method places greater weight on current income. Each indicates fairly
complimentary results, the conclusions being supportive of each method employed, and neither range being
extremely high or low in terms of the other.
Given the current state of the market, some believe that greater weight should be given to the direct capitalization
method due to the risks associated with attributing value to future revenue streams in the discounted cash flow.
Considering all of the characteristics of the subject, we have given slightly more weight to the discounted cash flow,
with supporting evidence considered within the direct capitalization method.
In summary, we have developed the Sales Comparison and Income Capitalization Approaches to value, with
primary emphasis on the Income Capitalization Approach, because this tends to mirror the methodology most used
by purchasers of this property type in the current market.
Thus, our conclusion of value can be summarized as follows:

BALLSTON QUARTER RECONCILIATION AND FINAL VALUE OPINION
Value Conclusions
Real Property
Appraisal Premise Interest Date Of Value Value Conclusion
Market Value As-Is Leased Fee August 02, 2015 $93,900,000
Prospective Market Value Upon Completion Leased Fee January 01, 2018 $229,500,000
Prospective Market Value Upon Stabilization Leased Fee January 01, 2020 $252,000,000
Insurable Value N/A August 02, 2015 $115,600,000
From the value conclusion, the implied “going in” capitalization rate for the subject (upon stabilization) is calculated
to be 5.29 percent. In comparison, the overall capitalization rates derived from the improved property sales are
between 4.03 percent and 5.35 percent, averaging 4.73 percent. On balance, the implied going-in cap rate for the
valuation appears to be in-line with going-in capitalization rates indicated by the sales and the most recent Investor
Surveys.
Exposure Time and Marketing Time

Based on our review of national investor surveys, discussions with market participants and information gathered
during the sales verification process, a reasonable exposure time for the subject property at the value concluded
within this report would have been approximately nine (9) months. This assumes an active and professional
marketing plan would have been employed by the current owner.
We believe, based on the assumptions employed in our analysis, as well as our selection of investment parameters
for the subject, that our value conclusion represents a price achievable within nine (9) months.

BALLSTON QUARTER INSURABLE REPLACEMENT COST/INSURABLE VALUE
Insurable Replacement Cost/Insurable Value

At the Client's request, we provided an insurable value (commonly referred to as insurable replacement cost)
estimate. The estimate is based on figures typically derived from the Marshall and Swift (M&S) Commercial Cost
Explorer and is developed consistent with industry practices. However, actual local and regional construction costs
may vary significantly from our estimate and individual insurance policies and underwriters have varied
specifications, exclusions, and non-insurable items. As such, we strongly recommend that the Client obtain
estimates from professionals experienced in establishing insurance coverage for replacing any structure. This
analysis should not be relied upon to determine insurance coverage. Furthermore, we make no warranties regarding
the accuracy of this estimate.
Insurable Replacement Cost and/or Insurable Value are directly related to the portion of the real estate that is
covered under the asset’s insurance policy. We based this opinion on the building’s replacement cost new (RCN)
which has no direct correlation with its actual market value.
There are many variations and requirements specified by various clients. Hence, we employed the Client’s
requirements as defined in their letter of engagement attached in the addenda hereto, unless of course the Client
and/or engagement letter is silent, in which case we employed our typical method for estimating Insurable
Value/Insurable Replacement Cost described below.
Unless overridden by the Client’s letter of engagement/requirements, we developed an opinion of RCN using the
Calculator Method developed by Marshall & Swift. The RCN is the total construction cost of a new building with the
same specifications and utility as the building being appraised, but built using modern technology, materials,
standards and design. For insurance purposes, RCN includes all direct costs necessary to construct the building
improvements. Items that are not considered include land value, site improvements, indirect costs, depreciation
and entrepreneurial profit. To develop an opinion of insurable value/insurable replacement cost, exclusions for
below-grade foundations and architectural fees were deducted from RCN.
The Insurable Replacement Cost and/or Insurable Value summary is presented on the following page:

INSURABLE REPLACEMENT COST/INSURABLE VALUE SUMMARY

IMPROVEMENTS (STRUCTURES)
DESCRIPTION In-Line Shops/ Mall
Marshall & Swift - Improvement Type Retail Stores Cinemas Concourse
Construction Class A/B C A/B
Quality of Construction Excellent Very Good Excellent
Marshall & Swift - Section Section 13 Section 16 Section 13
Marshall & Swift - Page Page 35 Page 13 Page 36
Date May-16 Aug-15 May-16
Number of Stories 3 1 3
Base SF Cost $188.84 $177.75 $150.87
SQUARE FOOT REFINEMENTS
HVAC Refinements $0.00 $0.00 $0.00
Sprinklers $1.93 $2.74 $1.93
Elevators $0.00 $0.00 $0.00
Adjusted Base Cost $190.77 $180.49 $152.80
HEIGHT AND SIZE REFINEMENTS
Number of Stories 1.000 1.000 1.000
Height Per Story 1.000 1.000 1.000
Perimeter 1.000 1.000 1.000
Adjusted Base Cost $190.77 $180.49 $152.80
FINAL CALCULATIONS
Current Cost Multiplier 1.030 1.030 1.030
Local Area Multiplier 1.090 1.080 1.090
Prospective Multiplier 1.051 1.051 1.051
Adjusted SF Cost $225.02 $210.94 $180.23
TIMES: SF for Replacement Cost Purposes 292,330 67,062 50,000
Adjusted Cost $65,780,159 $14,146,153 $9,011,660
REPLACEMENT COST SUMMARY (STRUCTURES)
Adjusted Base Costs $65,780,159 $14,146,153 $9,011,660
PLUS: Indirect Costs 30.0% $19,734,048 $4,243,846 $2,703,498
$85,514,207 $18,389,999 $11,715,158
Total includes all component / building costs as detailed above
INSURABLE REPLACEMENT COST/INSURABLE VALUE SUMMARY
Insurable Value Type Insurable Value As-Is
Cost Source: Marshall Valuation Service
Replacement Cost New $85,514,207 $18,389,999 $11,715,158

Insurance Exclusions
Foundations Below Grade 0.0% 0.0% 0.0%
Piping Below Grade (Negligible) 0.0% 0.0% 0.0%
Architect Fees 0.0% 0.0% 0.0%
Total Insurance Exclusion Adjustment 0.0% 0.0% 0.0%
Total Insurance Exclusion Amount $0 $0 $0
Adjusted Costs (Structures) $85,514,207 $18,389,999 $11,715,158

INDICATED INSURABLE REPLACEMENT COST $115,619,364
Rounded to the Nearest $50,000 $115,600,000
Total Structures (SF) 359,392
Conclusion PSF of All Structures $321.65

Assumptions and Limiting Conditions

"Report" means the appraisal or consulting report and conclusions stated therein, to which these Assumptions and Limiting
Conditions are annexed.
"Property" means the subject of the Report.
"Cushman & Wakefield" means Cushman & Wakefield, Inc. or its subsidiary that issued the Report.
"Appraiser(s)" means the employee(s) of Cushman & Wakefield who prepared and signed the Report.
The Report has been made subject to the following assumptions and limiting conditions:
 No opinion is intended to be expressed and no responsibility is assumed for the legal description or for any matters that are
legal in nature or require legal expertise or specialized knowledge beyond that of a real estate appraiser. Title to the Property
is assumed to be good and marketable and the Property is assumed to be free and clear of all liens unless otherwise stated.
No survey of the Property was undertaken.
 The information contained in the Report or upon which the Report is based has been gathered from sources the Appraiser
assumes to be reliable and accurate. The owner of the Property may have provided some of such information. Neither the
Appraiser nor Cushman & Wakefield shall be responsible for the accuracy or completeness of such information, including
the correctness of estimates, opinions, dimensions, sketches, exhibits and factual matters. Any authorized user of the
Report is obligated to bring to the attention of Cushman & Wakefield any inaccuracies or errors that it believes are contained
in the Report.
 The opinions are only as of the date stated in the Report. Changes since that date in external and market factors or in the
Property itself can significantly affect the conclusions in the Report.
 The Report is to be used in whole and not in part. No part of the Report shall be used in conjunction with any other analyses.
Publication of the Report or any portion thereof without the prior written consent of Cushman & Wakefield is prohibited.
Reference to the Appraisal Institute or to the MAI designation is prohibited. Except as may be otherwise stated in the letter
of engagement, the Report may not be used by any person(s) other than the party(ies) to whom it is addressed or for
purposes other than that for which it was prepared. No part of the Report shall be conveyed to the public through advertising,
or used in any sales, promotion, offering or SEC material without Cushman & Wakefield's prior written consent. Any
authorized user(s) of this Report who provides a copy to, or permits reliance thereon by, any person or entity not authorized
by Cushman & Wakefield in writing to use or rely thereon, hereby agrees to indemnify and hold Cushman & Wakefield, its
affiliates and their respective shareholders, directors, officers and employees, harmless from and against all damages,
expenses, claims and costs, including attorneys' fees, incurred in investigating and defending any claim arising from or in
any way connected to the use of, or reliance upon, the Report by any such unauthorized person(s) or entity(ies).
 Except as may be otherwise stated in the letter of engagement, the Appraiser shall not be required to give testimony in any
court or administrative proceeding relating to the Property or the Appraisal.
 The Report assumes (a) responsible ownership and competent management of the Property; (b) there are no hidden or
unapparent conditions of the Property, subsoil or structures that render the Property more or less valuable (no responsibility
is assumed for such conditions or for arranging for engineering studies that may be required to discover them); (c) full
compliance with all applicable federal, state and local zoning and environmental regulations and laws, unless
noncompliance is stated, defined and considered in the Report; and (d) all required licenses, certificates of occupancy and
other governmental consents have been or can be obtained and renewed for any use on which the value opinion contained
in the Report is based.
 The physical condition of the improvements considered by the Report is based on visual inspection by the Appraiser or
other person identified in the Report. Cushman & Wakefield assumes no responsibility for the soundness of structural
components or for the condition of mechanical equipment, plumbing or electrical components.
 The forecasted potential gross income referred to in the Report may be based on lease summaries provided by the owner
or third parties. The Report assumes no responsibility for the authenticity or completeness of lease information provided by
others. Cushman & Wakefield recommends that legal advice be obtained regarding the interpretation of lease provisions
and the contractual rights of parties.

 The forecasts of income and expenses are not predictions of the future. Rather, they are the Appraiser's best opinions of
current market thinking on future income and expenses. The Appraiser and Cushman & Wakefield make no warranty or
representation that these forecasts will materialize. The real estate market is constantly fluctuating and changing. It is not
the Appraiser's task to predict or in any way warrant the conditions of a future real estate market; the Appraiser can only
reflect what the investment community, as of the date of the Report, envisages for the future in terms of rental rates,
expenses, and supply and demand.
 Unless otherwise stated in the Report, the existence of potentially hazardous or toxic materials that may have been used
in the construction or maintenance of the improvements or may be located at or about the Property was not considered in
arriving at the opinion of value. These materials (such as formaldehyde foam insulation, asbestos insulation and other
potentially hazardous materials) may adversely affect the value of the Property. The Appraisers are not qualified to detect
such substances. Cushman & Wakefield recommends that an environmental expert be employed to determine the impact
of these matters on the opinion of value.
 Unless otherwise stated in the Report, compliance with the requirements of the Americans with Disabilities Act of 1990
(ADA) has not been considered in arriving at the opinion of value. Failure to comply with the requirements of the ADA may
adversely affect the value of the Property. Cushman & Wakefield recommends that an expert in this field be employed to
determine the compliance of the Property with the requirements of the ADA and the impact of these matters on the opinion
of value.
 If the Report is submitted to a lender or investor with the prior approval of Cushman & Wakefield, such party should consider
this Report as only one factor, together with its independent investment considerations and underwriting criteria, in its overall
investment decision. Such lender or investor is specifically cautioned to understand all Extraordinary Assumptions and
Hypothetical Conditions and the Assumptions and Limiting Conditions incorporated in this Report.
 In the event of a claim against Cushman & Wakefield or its affiliates or their respective officers or employees or the
Appraisers in connection with or in any way relating to this Report or this engagement, the maximum damages recoverable
shall be the amount of the monies actually collected by Cushman & Wakefield or its affiliates for this Report and under no
circumstances shall any claim for consequential damages be made.
 If the Report is referred to or included in any offering material or prospectus, the Report shall be deemed referred to or
included for informational purposes only and Cushman & Wakefield, its employees and the Appraiser have no liability to
such recipients. Cushman & Wakefield disclaims any and all liability to any party other than the party that retained Cushman
& Wakefield to prepare the Report.
 Any estimate of insurable value, if included within the agreed upon scope of work and presented within this report, is based
upon figures derived from a national cost estimating service and is developed consistent with industry practices. However,
actual local and regional construction costs may vary significantly from our estimate and individual insurance policies and
underwriters have varied specifications, exclusions, and non-insurable items. As such, we strongly recommend that the
Client obtain estimates from professionals experienced in establishing insurance coverage for replacing any structure. This
analysis should not be relied upon to determine insurance coverage. Furthermore, we make no warranties regarding the
accuracy of this estimate.
 Unless otherwise noted, we were not given a soil report to review. However, we assume that the soil’s load-bearing capacity
is sufficient to support existing and/or proposed structure(s). We did not observe any evidence to the contrary during our
physical inspection of the property. Drainage appears to be adequate.
 Unless otherwise noted, we were not given a title report to review. We do not know of any easements, encroachments, or
restrictions that would adversely affect the site’s use. However, we recommend a title search to determine whether any
adverse conditions exist.
 Unless otherwise noted, we were not given a wetlands survey to review. If subsequent engineering data reveal the presence
of regulated wetlands, it could materially affect property value. We recommend a wetlands survey by a professional engineer
with expertise in this field.
 Unless otherwise noted, we observed no evidence of toxic or hazardous substances during our inspection of the site.
However, we are not trained to perform technical environmental inspections and recommend the hiring of a professional
engineer with expertise in this field.

 Unless otherwise noted, we did not inspect the roof nor did we make a detailed inspection of the mechanical systems. The
appraisers are not qualified to render an opinion regarding the adequacy or condition of these components. The client is
urged to retain an expert in this field if detailed information is needed.
 By use of this Report each party that uses this Report agrees to be bound by all of the Assumptions and Limiting Conditions,
Hypothetical Conditions and Extraordinary Assumptions stated herein.

BALLSTON QUARTER CERTIFICATION OF APPRAISAL
Certification of Appraisal
We certify that, to the best of our knowledge and belief:
 The statements of fact contained in this report are true and correct.
 The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and
are our personal, impartial, and unbiased professional analyses, opinions, and conclusions.
 We have no present or prospective interest in the property that is the subject of this report, and no personal interest with
respect to the parties involved.
 We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
 Our engagement in this assignment was not contingent upon developing or reporting predetermined results.
 Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined
value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated
result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
 The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with
the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal
Institute, which include the Uniform Standards of Professional Appraisal Practice.
 The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized
representatives.
 Jay F. Booth, MAI and Kelly J. Small did make a personal inspection of the property that is the subject of this report.
Richard W Latella, MAI, FRICS did not make a personal inspection of the property that is the subject of this report.
 We have performed prior services involving the subject property within the three-year period immediately preceding the
acceptance of the assignment. These service(s) included a previous appraisal of the property two times within the prior
three-year period immediately preceding the acceptance of the assignment.
 Kelly J. Small provided significant real property appraisal assistance to the persons signing this report. This assistance
included inspection of the property.
 As of the date of this report, Jay F. Booth, MAI and Richard W Latella, MAI, FRICS have completed the continuing education
program for Designated Members of the Appraisal Institute.
 As of the date of this report, Kelly J. Small has completed all the Standards and Ethics Education Requirements for
Candidates/Practicing Affiliates of the Appraisal Institute.
___________________________________ ___________________________________
Jay F. Booth, MAI Richard W Latella, MAI, FRICS
Senior Managing Director Executive Managing Director, Practice Lead – Retail
Virginia Certified General Appraiser Virginia Certified General Appraiser
License No. Temporary Practice Permit License No. 4001015323
jay.booth@cushwake.com richard.latella@cushwake.com
(503) 279-1709 Office Direct 212-841-7675 Office Direct

BALLSTON QUARTER ADDENDA CONTENTS
Addenda Contents
Addendum A: Glossary of Terms & Definitions
Addendum B: Client Satisfaction Survey
Addendum C: Engagement Letter
Addendum D: Argus Supporting Schedules
Addendum E: Improved Sale Datasheets
Addendum F: Professional Qualifications

Addendum A:
Glossary of Terms & Definitions
The following definitions of pertinent terms are taken from The Dictionary of Real Estate Appraisal, Sixth Edition (2015), published by the Appraisal Institute, Chicago,
IL, as well as other sources.
As Is Market Value
The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date. (Proposed Interagency Appraisal and
Evaluation Guidelines, OCC-4810-33-P 20%)
Band of Investment
A technique in which the capitalization rates attributable to components of a capital investment are weighted and combined to derive a weighted-average rate
attributable to the total investment.
Cash Equivalency
An analytical process in which the sale price of a transaction with nonmarket financing or financing with unusual conditions or incentives is converted into a price
expressed in terms of cash.
Depreciation
1. In appraising, a loss in property value from any cause; the difference between the cost of an improvement on the effective date of the appraisal and the market
value of the improvement on the same date. 2. In accounting, an allowance made against the loss in value of an asset for a defined purpose and computed using a
specified method.
Disposition Value
The most probable price that a specified interest in real property is likely to bring under all of the following conditions:
 Consummation of a sale will occur within a limited future marketing period specified by the client.
 The actual market conditions currently prevailing are those to which the appraised property interest is subject.
 The buyer and seller is each acting prudently and knowledgeably.
 The seller is under compulsion to sell.
 The buyer is typically motivated.
 Both parties are acting in what they consider their best interest.
 An adequate marketing effort will be made in the limited time allowed for the completion of a sale.
 Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable thereto.
 The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone
associated with the sale.
Note that this definition differs from the definition of market value. The most notable difference relates to the motivation of the seller. In the case of Disposition
value, the seller would be acting under compulsion within a limited future marketing period.
Ellwood Formula
A yield capitalization method that provides a formulaic solution for developing a capitalization rate for various combinations of equity yields and mortgage terms.
The formula is applicable only to properties with stable or stabilized income streams and properties with income streams expected to change according to the J- or
K-factor pattern. The formula is
RO = [YE – M (YE + P 1/Sn¬ – RM) – ∆O 1/S n¬] / [1 + ∆I J]
where
RO = Overall Capitalization Rate
YE = Equity Yield Rate
M = Loan-to-Value Ratio
P = Percentage of Loan Paid Off
1/S n¬ = Sinking Fund Factor at the Equity Yield Rate
RM =Mortgage Capitalization Rate

∆O = Change in Total Property Value

∆I = Total Ratio Change in Income
J = J Factor
Also called mortgage-equity formula.
Exposure Time
1. The time a property remains on the market. 2. The estimated length of time the property interest being appraised would have been offered on the market prior to
the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming
a competitive and open market. See also marketing time.
Extraordinary Assumption
An assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s
opinions or conclusions.
Comment: Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or
about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.
Fee Simple Estate

Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain,
police power, and escheat.
Highest and Best Use

The reasonably probable use of property that results in the highest value. The four criteria that the highest and best use must meet are legal permissibility, physical
possibility, financial feasibility, and maximum productivity.
Highest and Best Use of Property as Improved

The use that should be made of a property as it exists. An existing improvement should be renovated or retained as is so long as it continues to contribute to the
total market value of the property, or until the return from a new improvement would more than offset the cost of demolishing the existing building and constructing
a new one.
A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but
is used for the purpose of analysis.
Comment: Hypothetical conditions are contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external
to the property, such as market conditions or trends; or about the integrity of data used in an analysis.
Insurable Replacement Cost/Insurable Value

A type of value for insurance purposes.
Intended Use
The use or uses of an appraiser’s reported appraisal, appraisal review, or appraisal consulting assignment opinions and conclusions, as identified by the appraiser
based on communication with the client at the time of the assignment.
Intended User
The client and any other party as identified, by name or type, as users of the appraisal, appraisal review, or appraisal consulting report by the appraiser on the basis
of communication with the client at the time of the assignment.
Leased Fee Interest

A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord-tenant relationship (i.e., a
lease).
Leasehold Interest
The tenant’s possessory interest created by a lease. See also negative leasehold; positive leasehold.

Liquidation Value
The most probable price that a specified interest in real property is likely to bring under all of the following conditions:
 Consummation of a sale will occur within a severely limited future marketing period specified by the client.
 The actual market conditions currently prevailing are those to which the appraised property interest is subject.
 The buyer is acting prudently and knowledgeably.
 The seller is under extreme compulsion to sell.
 The buyer is typically motivated.
 The buyer is acting in what he or she considers his or her best interest.
 A limited marketing effort and time will be allowed for the completion of a sale.
 Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable thereto.
 The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone
associated with the sale.
Note that this definition differs from the definition of market value. The most notable difference relates to the motivation of the seller. Under market value, the seller
would be acting in his or her own best interests. The seller would be acting prudently and knowledgeably, assuming the price is not affected by undue stimulus or
atypical motivation. In the case of liquidation value, the seller would be acting under extreme compulsion within a severely limited future marketing period.
Market Rent
The most probable rent that a property should bring in a competitive and open market reflecting all conditions and restrictions of the lease agreement, including
permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements (TIs).
Market Value
As defined in the Agencies’ appraisal regulations, the most probable price which a property should bring in a competitive and open market under all conditions
requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
 Buyer and seller are typically motivated;
 Both parties are well informed or well advised, and acting in what they consider their own best interests;
 A reasonable time is allowed for exposure in the open market;
 Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
 The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone
associated with the sale.1
Marketing Time
An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the
effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. (Advisory Opinion
7 of the Appraisal Standards Board of The Appraisal Foundation and Statement on Appraisal Standards No. 6, “Reasonable Exposure Time in Real Property and
Personal Property Market Value Opinions” address the determination of reasonable exposure and marketing time.) See also exposure time.
Mortgage-Equity Analysis
Capitalization and investment analysis procedures that recognize how mortgage terms and equity requirements affect the value of income-producing property.
Operating Expenses
Other Taxes, Fees & Permits - Personal property taxes, sales taxes, utility taxes, fees and permit expenses.
Property Insurance – Coverage for loss or damage to the property caused by the perils of fire, lightning, extended coverage perils, vandalism and malicious
mischief, and additional perils.
1
“Interagency Appraisal and Evaluation Guidelines.” Federal Register 75:237 (December 10, 2010) p. 77472.

Management Fees - The sum paid for management services. Management services may be contracted for or provided by the property owner. Management
expenses may include supervision, on-site offices or apartments for resident managers, telephone service, clerical help, legal or accounting services, printing
and postage, and advertising. Management fees may occasionally be included among recoverable operating expenses
Total Administrative Fees – Depending on the nature of the real estate, these usually include professional fees and other general administrative expenses,
such as rent of offices and the services needed to operate the property. Administrative expenses can be provided either in the following expense subcategories
or in a bulk total. 1) Professional Fees – Fees paid for any professional services contracted for or incurred in property operation; or 2) Other Administrative –
Any other general administrative expenses incurred in property operation.
Heating Fuel - The cost of heating fuel purchased from outside producers. The cost of heat is generally a tenant expense in single-tenant, industrial or retail
properties, and apartment projects with individual heating units. It is a major expense item shown in operating statements for office buildings and many
apartment properties. The fuel consumed may be coal, oil, or public steam. Heating supplies, maintenance, and workers’ wages are included in this expense
category under certain accounting methods.
Electricity - The cost of electricity purchased from outside producers. Although the cost of electricity for leased space is frequently a tenant expense, and
therefore not included in the operating expense statement, the owner may be responsible for lighting public areas and for the power needed to run elevators
and other building equipment.
Gas - The cost of gas purchased from outside producers. When used for heating and air conditioning, gas can be a major expense item that is either paid by
the tenant or reflected in the rent.
Water & Sewer - The cost of water consumed, including water specially treated for the circulating ice water system, or purchased for drinking purposes. The
cost of water is a major consideration for industrial plants that use processes depending on water and for multifamily projects, in which the cost of sewer
service usually ties to the amount of water used. It is also an important consideration for laundries, restaurants, taverns, hotels, and similar operations.
Other Utilities - The cost of other utilities purchased from outside producers.
Total Utilities - The cost of utilities net of energy sales to stores and others. Utilities are services rendered by public and private utility companies (e.g.,
electricity, gas, heating fuel, water/sewer and other utilities providers). Utility expenses can be provided either in expense subcategories or in a bulk total.
Repairs & Maintenance - All expenses incurred for the general repairs and maintenance of the building, including common areas and general upkeep. Repairs
and maintenance expenses include elevator, HVAC, electrical and plumbing, structural/roof, and other repairs and maintenance expense items. Repairs and
Maintenance expenses can be provided either in the following expense subcategories or in a bulk total. 1) Elevator - The expense of the contract and any
additional expenses for elevator repairs and maintenance. This expense item may also include escalator repairs and maintenance. 2) HVAC – The expense
of the contract and any additional expenses for heating, ventilation and air-conditioning systems. 3) Electrical & Plumbing - The expense of all repairs and
maintenance associated with the property’s electrical and plumbing systems. 4) Structural/Roof - The expense of all repairs and maintenance associated with
the property’s building structure and roof. 5) Pest Control – The expense of insect and rodent control. 6). Other Repairs & Maintenance - The cost of any other
repairs and maintenance items not specifically included in other expense categories.
Common Area Maintenance - The common area is the total area within a property that is not designed for sale or rental, but is available for common use by
all owners, tenants, or their invitees, e.g., parking and its appurtenances, malls, sidewalks, landscaped areas, recreation areas, public toilets, truck and service
facilities. Common Area Maintenance (CAM) expenses can be entered in bulk or through the sub-categories. 1) Utilities – Cost of utilities that are included in
CAM charges and passed through to tenants. 2) Repair & Maintenance – Cost of repair and maintenance items that are included in CAM charges and passed
through to tenants. 3) Parking Lot Maintenance – Cost of parking lot maintenance items that are included in CAM charges and passed through to tenants. 4)
Snow Removal – Cost of snow removal that are included in CAM charges and passed through to tenants. 5) Grounds Maintenance – Cost of ground
maintenance items that are included in CAM charges and passed through to tenants. 6) Other CAM expenses are items that are included in CAM charges and
passed through to tenants.
Painting & Decorating - This expense category is relevant to residential properties where the landlord is required to prepare a dwelling unit for occupancy in
between tenancies.
Cleaning & Janitorial - The expenses for building cleaning and janitorial services, for both daytime and night-time cleaning and janitorial service for tenant
spaces, public areas, atriums, elevators, restrooms, windows, etc. Cleaning and Janitorial expenses can be provided either in the following subcategories or
entered in a bulk total. 1) Contract Services - The expense of cleaning and janitorial services contracted for with outside service providers. 2) Supplies, Materials
& Misc. - The cost any cleaning materials and any other janitorial supplies required for property cleaning and janitorial services and not covered elsewhere. 3)
Trash Removal - The expense of property trash and rubbish removal and related services. Sometimes this expense item includes the cost of pest control
and/or snow removal .4) Other Cleaning/Janitorial - Any other cleaning and janitorial related expenses not included in other specific expense categories.
Advertising & Promotion - Expenses related to advertising, promotion, sales, and publicity and all related printing, stationary, artwork, magazine space,
broadcasting, and postage related to marketing.
Professional Fees - All professional fees associated with property leasing activities including legal, accounting, data processing, and auditing costs to the
extent necessary to satisfy tenant lease requirements and permanent lender requirements.
Total Payroll - The payroll expenses for all employees involved in the ongoing operation of the property, but whose salaries and wages are not included in
other expense categories. Payroll expenses can be provided either in the following subcategories or entered in a bulk total. 1) Administrative Payroll - The
payroll expenses for all employees involved in on-going property administration. 2) Repair & Maintenance Payroll - The expense of all employees involved in
on-going repairs and maintenance of the property. 3) Cleaning Payroll - The expense of all employees involved in providing on-going cleaning and janitorial
services to the property 4) Other Payroll - The expense of any other employees involved in providing services to the property not covered in other specific
categories.
Security - Expenses related to the security of the Lessees and the Property. This expense item includes payroll, contract services and other security expenses
not covered in other expense categories. This item also includes the expense of maintenance of security systems such as alarms and closed circuit television
(CCTV), and ordinary supplies necessary to operate a security program, including batteries, control forms, access cards, and security uniforms.
Roads & Grounds - The cost of maintaining the grounds and parking areas of the property. This expense can vary widely depending on the type of property
and its total area. Landscaping improvements can range from none to extensive beds, gardens and trees. In addition, hard-surfaced public parking areas with
drains, lights, and marked car spaces are subject to intensive wear and can be costly to maintain.
Other Operating Expenses - Any other expenses incurred in the operation of the property not specifically covered elsewhere.
Real Estate Taxes - The tax levied on real estate (i.e., on the land, appurtenances, improvements, structures and buildings); typically by the state, county
and/or municipality in which the property is located.

Prospective Opinion of Value

A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some
specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under
conversion to a new use, or those that have not yet achieved sellout or a stabilized level of long-term occupancy.
Prospective Value upon Reaching Stabilized Occupancy

The value of a property as of a point in time when all improvements have been physically constructed and the property has been leased to its optimum level of long-
term occupancy. At such point, all capital outlays for tenant improvements, leasing commissions, marketing costs and other carrying charges are assumed to have
been incurred.
Special, Unusual, or Extraordinary Assumptions

Before completing the acquisition of a property, a prudent purchaser in the market typically exercises due diligence by making customary enquiries about the
property. It is normal for a Valuer to make assumptions as to the most likely outcome of this due diligence process and to rely on actual information regarding such
matters as provided by the client. Special, unusual, or extraordinary assumptions may be any additional assumptions relating to matters covered in the due diligence
process, or may relate to other issues, such as the identity of the purchaser, the physical state of the property, the presence of environmental pollutants (e.g., ground
water contamination), or the ability to redevelop the property.

Addendum B:
Client Satisfaction Survey
Survey Link: https://www.surveymonkey.com/r/vaclientsatisfaction?c=16-34001-900566-001

Fax Option: (716) 852-0890
1. Based on the scope and complexity of the assignment, please rate the development of the appraisal relative to
the adequacy and relevance of the data, the appropriateness of the techniques used, and the reasonableness of
the analyses, opinions, and conclusions:
__ Excellent
__ Good
__ Average
__ Below Average
__ Poor
Comments:_____________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
2. Please rate the appraisal report on clarity, attention to detail, and the extent to which it was presentable to your
internal/external users without revisions:
__ Excellent
__ Good
__ Average
__ Below Average
__ Poor
Comments:_____________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

3. The appraiser communicated effectively by listening to your concerns, showed a sense of urgency in responding,
and provided convincing support of his/her conclusions:
__ Not Applicable __ Excellent

__ Good
__ Average
__ Below Average
__ Poor
Comments:_____________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
4. The report was on time as agreed, or was received within an acceptable time frame if unforeseen factors occurred
after the engagement:
__ Yes
__ No
Comments:_____________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
5. Please rate your overall satisfaction relative to cost, timing, and quality:
__ Excellent
__ Good
__ Average
__ Below Average
__ Poor
Comments:_____________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
6. Any additional comments or suggestions you feel our National Quality Control Committee should know?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________

7. Would you like a representative of our National Quality Control Committee to contact you?
__ Yes
__ No
Name & Phone (if contact is desired):

__________________________________________________________________
__________________________________________________________________
Contact Information: Scott Schafer

Senior Managing Director, National Quality Control
(716) 852-7500, ext. 121

Addendum C:
Engagement Letter

Addendum D:
Argus Supporting Schedules

Ballston Quarter Software : ARGUS Ver. 15.0.1.26
4238 Wilson Boulevard File : Ballston Quarter
Arlington, VA 22203 Property Type : Retail
Portfolio :
Date : 8/17/16
Time : 13:54
Ref# : HSP
Page : 1
Presentation Rent Roll & Current Term Tenant Summary
As of Jan-2018 for 507,745 Square Feet
Tenant Name Floor Rate & Amount CPI & Current Months Pcnt Description of Imprvmnts Commssns Assumption about
Type & Suite Number SqFt per Year Changes Changes Porters' Wage to to Operating Expense Rate Rate subsequent terms
Lease Dates & Term Bldg Share per Month on to Miscellaneous Abate Abate Reimbursements Amount Amount for this tenant
1 Regal Cinemas AN $19.00 - - - - - See method: Regal - - Option

Retail, Suite: 3300 67,062 $1,274,178 Cinemas See assumption:
Jul-1999 to Jun-2019 13.21% $1.58 Cinemas
240 Months $106,182
1 Regal Cinemas AN $14.35 Jul-2024 $16.24 - - - See method: Regal - - Market

Option, Suite: 3300 67,062 $962,340 Jul-2029 $18.37 Cinemas See assumption:
Jul-2019 to Jun-2034 13.21% $1.20 Cinemas
180 Months $80,195
2 * First Level - Open IL $46.00 Jan-2019 $47.15 - - - See method: - - Market

Retail, Suite: 1100 9,844 $452,824 Jan-2020 $48.33 Standard See assumption:
Jan-2018 to Dec-2022 1.94% $3.83 Jan-2021 $49.54 First Level
60 Months $37,735 Jan-2022 $50.78

120 Months $37,735 Jan-2022 $50.78
Jan-2023 $52.04
Jan-2024 $53.35
Jan-2025 $54.68
Jan-2026 $56.05
Jan-2027 $57.45

84 Months $37,735 Jan-2022 $50.78
Jan-2023 $52.04
Jan-2024 $53.35

120 Months $37,735 Jan-2022 $50.78
Jan-2023 $52.04
Jan-2024 $53.35
Jan-2025 $54.68
Jan-2026 $56.05
Jan-2027 $57.45

84 Months $23,380 Jan-2022 $50.78
Jan-2023 $52.04
Jan-2024 $53.35
7 * First Level - Vacan IL $46.00 Jun-2019 $47.15 - - - See method: $40.00 $5.00 Market
Retail, Suite: 1105 5,276 $242,696 Jun-2020 $48.33 Standard 2.07% See assumption:
Jun-2018 to May-2023 1.04% $3.83 Jun-2021 $49.54 $211,040 $26,380 First Level
60 Months $20,225 Jun-2022 $50.78
8 * First Level - Vacan IL $46.00 Dec-2019 $47.15 - - - See method: $40.00 $5.00 Market
Retail, Suite: 1106 5,276 $242,696 Dec-2020 $48.33 Standard 1.44% See assumption:
Dec-2018 to Nov-2025 1.04% $3.83 Dec-2021 $49.54 $211,040 $26,380 First Level
84 Months $20,225 Dec-2022 $50.78
Dec-2023 $52.04
Dec-2024 $53.35
(continued on next page)

Portfolio :
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Page : 2
(continued from previous page)
9 * First Level - Vacan IL $47.15 Jun-2020 $48.33 - - - See method: $41.00 $5.13 Market
Jun-2019 to May-2029 1.04% $3.93 Jun-2022 $50.78 $216,316 $27,040 First Level
120 Months $20,730 Jun-2023 $52.04
Jun-2024 $53.35
Jun-2025 $54.68
Jun-2026 $56.05
Jun-2027 $57.45
Jun-2028 $58.88
10 * First Level - Vacan IL $47.15 Dec-2020 $48.33 - - - See method: $41.00 $5.13 Market
Dec-2019 to Nov-2026 1.04% $3.93 Dec-2022 $50.78 $216,316 $27,040 First Level
84 Months $20,730 Dec-2023 $52.04
Dec-2024 $53.35
Dec-2025 $54.68
11 Capital One IL $14.00 Jul-2017 $28.00 - - - See method: - - Option

Retail, Suite: 1145 3,745 $52,430 Jul-2018 $31.00 Capital One See assumption:
Jul-2016 to Dec-2028 0.74% $1.17 Dec-2023 $62.50 First Level
150 Months $4,369
11 Capital One IL $64.38 - - - - - See method: - - Market

Option, Suite: 1145 3,745 $241,103 Capital One See assumption:
Jan-2029 to Dec-2033 0.74% $5.36 First Level
60 Months $20,092
12 CVS AN $35.00 Jul-2016 $17.50 - - - See method: CVS - - Market

Retail, Suite: 1175 11,593 $405,755 Jul-2017 $35.00 See assumption:
Dec-2009 to Jan-2025 2.28% $2.92 Nov-2019 $35.90 Drug
182 Months $33,813 Dec-2019 $38.00
13 * Second Level - Open IL $38.50 Jan-2019 $39.46 - - - See method: - - Market

Jan-2018 to Dec-2022 1.34% $3.21 Jan-2021 $41.46 Second Level
60 Months $21,862 Jan-2022 $42.50

84 Months $21,862 Jan-2022 $42.50
Jan-2023 $43.56
Jan-2024 $44.65

120 Months $21,862 Jan-2022 $42.50
Jan-2023 $43.56
Jan-2024 $44.65
Jan-2025 $45.76
Jan-2026 $46.91
Jan-2027 $48.08

84 Months $21,862 Jan-2022 $42.50
Jan-2023 $43.56
Jan-2024 $44.65

Portfolio :
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Time : 13:54
Ref# : HSP
Page : 3

120 Months $21,862 Jan-2022 $42.50
Jan-2023 $43.56
Jan-2024 $44.65
Jan-2025 $45.76
Jan-2026 $46.91
Jan-2027 $48.08
18 * Second Level - Vaca IL $38.50 Jun-2019 $39.46 - - - See method: $40.00 $5.00 Market
Jun-2018 to May-2025 1.34% $3.21 Jun-2021 $41.46 $272,600 $34,075 Second Level
84 Months $21,865 Jun-2022 $42.50
Jun-2023 $43.56
Jun-2024 $44.65
19 * Second Level - Vaca IL $38.50 Dec-2019 $39.46 - - - See method: $40.00 $5.00 Market
Dec-2018 to Nov-2028 1.34% $3.21 Dec-2021 $41.46 $272,600 $34,075 Second Level
120 Months $21,865 Dec-2022 $42.50
Dec-2023 $43.56
Dec-2024 $44.65
Dec-2025 $45.76
Dec-2026 $46.91
Dec-2027 $48.08
20 * Second Level - Vaca IL $39.46 Jun-2020 $40.45 - - - See method: $41.00 $5.13 Market
Jun-2019 to May-2026 1.34% $3.29 Jun-2022 $42.50 $279,415 $34,927 Second Level
84 Months $22,411 Jun-2023 $43.56
Jun-2024 $44.65
Jun-2025 $45.76
21 * Second Level - Vaca IL $39.46 Sep-2020 $40.45 - - - See method: $41.00 $5.13 Market
Retail, Suite: 2108 6,815 $268,937 Sep-2021 $41.46 Standard 1.16% See assumption:
Sep-2019 to Aug-2029 1.34% $3.29 Sep-2022 $42.50 $279,415 $34,927 Second Level
120 Months $22,411 Sep-2023 $43.56
Sep-2024 $44.65
Sep-2025 $45.76
Sep-2026 $46.91
Sep-2027 $48.08
Sep-2028 $49.28
22 * Second Level - Vaca IL $39.46 Dec-2020 $40.45 - - - See method: $41.00 $5.13 Market
Dec-2019 to Nov-2026 1.34% $3.29 Dec-2022 $42.50 $279,415 $34,927 Second Level
84 Months $22,411 Dec-2023 $43.56
Dec-2024 $44.65
Dec-2025 $45.76
23 Sport & Health AN $24.00 Jun-2016 $16.00 - - - See method: Sport - - Market
Retail, Suite: 3018 32,605 $782,520 & Health See assumption:
Jul-1998 to Jun-2020 6.42% $2.00 Health Club
264 Months $65,210
24 * Third Level - Open IL $27.50 Jan-2019 $28.19 - - - See method: Std - - Market
Retail, Suite: 3100 5,125 $140,938 Jan-2020 $28.89 Third Level See assumption:
Jan-2018 to Dec-2022 1.01% $2.29 Jan-2021 $29.61 Third Level
60 Months $11,745 Jan-2022 $30.35

Portfolio :
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Time : 13:54
Ref# : HSP
Page : 4
84 Months $11,745 Jan-2022 $30.35
Jan-2023 $31.11
Jan-2024 $31.89
120 Months $11,745 Jan-2022 $30.35
Jan-2023 $31.11
Jan-2024 $31.89
Jan-2025 $32.69
Jan-2026 $33.51
Jan-2027 $34.34
84 Months $11,745 Jan-2022 $30.35
Jan-2023 $31.11
Jan-2024 $31.89
28 * Third Level - Vacan IL $27.50 Sep-2019 $28.19 - - - See method: Std $40.00 $5.00 Market
Retail, Suite: 3104 4,647 $127,793 Sep-2020 $28.89 Third Level 3.46% See assumption:
Sep-2018 to Aug-2023 0.92% $2.29 Sep-2021 $29.61 $185,880 $23,235 Third Level
60 Months $10,649 Sep-2022 $30.35
29 * Third Level - Vacan IL $27.50 Dec-2019 $28.19 - - - See method: Std $40.00 $5.00 Market
Retail, Suite: 3105 4,000 $110,000 Dec-2020 $28.89 Third Level 2.41% See assumption:
Dec-2018 to Nov-2025 0.79% $2.29 Dec-2021 $29.61 $160,000 $20,000 Third Level
84 Months $9,167 Dec-2022 $30.35
Dec-2023 $31.11
Dec-2024 $31.89
30 * Third Level - Vacan IL $28.19 Mar-2020 $28.89 - - - See method: Std $41.00 $5.13 Market
Retail, Suite: 3106 4,000 $112,750 Mar-2021 $29.61 Third Level 1.62% See assumption:
Mar-2019 to Feb-2029 0.79% $2.35 Mar-2022 $30.35 $164,000 $20,500 Third Level
120 Months $9,396 Mar-2023 $31.11
Mar-2024 $31.89
Mar-2025 $32.69
Mar-2026 $33.51
Mar-2027 $34.34
Mar-2028 $35.20
31 * Third Level - Vacan IL $28.19 Jun-2020 $28.89 - - - See method: Std $41.00 $5.13 Market
Retail, Suite: 3107 4,000 $112,750 Jun-2021 $29.61 Third Level 2.41% See assumption:
Jun-2019 to May-2026 0.79% $2.35 Jun-2022 $30.35 $164,000 $20,500 Third Level
84 Months $9,396 Jun-2023 $31.11
Jun-2024 $31.89
Jun-2025 $32.69
32 * Third Level - Vacan IL $28.19 Dec-2020 $28.89 - - - See method: Std $41.00 $5.13 Market
Retail, Suite: 3108 4,000 $112,750 Dec-2021 $29.61 Third Level 1.62% See assumption:
Dec-2019 to Nov-2029 0.79% $2.35 Dec-2022 $30.35 $164,000 $20,500 Third Level
120 Months $9,396 Dec-2023 $31.11
Dec-2024 $31.89
Dec-2025 $32.69
Dec-2026 $33.51
Dec-2027 $34.34
Dec-2028 $35.20

Portfolio :
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Page : 5
33 * Concourse Food - Op FC $77.00 Jan-2019 $78.93 - - - See method: Std - - Market

Retail, Suite: C101 1,100 $84,700 Jan-2020 $80.90 Food Court See assumption:
Jan-2018 to Dec-2027 0.22% $6.42 Jan-2021 $82.92 Concourse Food
120 Months $7,058 Jan-2022 $84.99
Jan-2023 $87.12
Jan-2024 $89.30
Jan-2025 $91.53
Jan-2026 $93.82
Jan-2027 $96.16

120 Months $7,058 Jan-2022 $84.99
Jan-2023 $87.12
Jan-2024 $89.30
Jan-2025 $91.53
Jan-2026 $93.82
Jan-2027 $96.16

120 Months $6,417 Jan-2022 $84.99
Jan-2023 $87.12
Jan-2024 $89.30
Jan-2025 $91.53
Jan-2026 $93.82
Jan-2027 $96.16

60 Months $6,417 Jan-2022 $84.99
37 * Concourse Food - Va FC $77.00 Dec-2019 $78.93 - - - See method: Std $40.00 $5.00 Market
Retail, Suite: C105 1,033 $79,541 Dec-2020 $80.90 Food Court 0.86% See assumption:
Dec-2018 to Nov-2025 0.20% $6.42 Dec-2021 $82.92 $41,320 $5,165 Concourse Food
84 Months $6,628 Dec-2022 $84.99
Dec-2023 $87.12
Dec-2024 $89.30
38 * Concourse Food - Va FC $78.93 Jun-2020 $80.90 - - - See method: Std $41.00 $5.13 Market
Retail, Suite: C106 1,000 $78,925 Jun-2021 $82.92 Food Court 0.86% See assumption:
Jun-2019 to May-2026 0.20% $6.58 Jun-2022 $84.99 $41,000 $5,125 Concourse Food
84 Months $6,577 Jun-2023 $87.12
Jun-2024 $89.30
Jun-2025 $91.53
39 * Concourse Food - Va FC $78.93 Sep-2020 $80.90 - - - See method: Std $41.00 $5.13 Market
Retail, Suite: C107 1,000 $78,925 Sep-2021 $82.92 Food Court 0.86% See assumption:
Sep-2019 to Aug-2026 0.20% $6.58 Sep-2022 $84.99 $41,000 $5,125 Concourse Food
84 Months $6,577 Sep-2023 $87.12
Sep-2024 $89.30
Sep-2025 $91.53
40 * Concourse Food - Va FC $78.93 Dec-2020 $80.90 - - - See method: Std $41.00 $5.13 Market
Retail, Suite: C108 1,000 $78,925 Dec-2021 $82.92 Food Court 0.86% See assumption:
Dec-2019 to Nov-2026 0.20% $6.58 Dec-2022 $84.99 $41,000 $5,125 Concourse Food
84 Months $6,577 Dec-2023 $87.12
Dec-2024 $89.30
Dec-2025 $91.53

Portfolio :
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Page : 6
41 * Concourse Level - V IL $46.00 Oct-2019 $47.15 - - - See method: Std $40.00 $5.00 Market
Retail, Suite: C201 3,766 $173,236 Oct-2020 $48.33 Concourse 0.97% See assumption:
Oct-2018 to Sep-2028 0.74% $3.83 Oct-2021 $49.54 $150,640 $18,830 Concourse Level
120 Months $14,436 Oct-2022 $50.78
Oct-2023 $52.04
Oct-2024 $53.35
Oct-2025 $54.68
Oct-2026 $56.05
Oct-2027 $57.45
42 * Concourse Level - V IL $47.15 Oct-2020 $48.33 - - - See method: Std $41.00 $5.13 Market
Retail, Suite: C202 3,765 $177,520 Oct-2021 $49.54 Concourse 0.97% See assumption:
Oct-2019 to Sep-2029 0.74% $3.93 Oct-2022 $50.78 $154,365 $19,296 Concourse Level
120 Months $14,793 Oct-2023 $52.04
Oct-2024 $53.35
Oct-2025 $54.68
Oct-2026 $56.05
Oct-2027 $57.45
Oct-2028 $58.88
43 Macy's AN $0.00 - - - - - See method: - - Market

Retail, Suite: MAJ1 148,353 $0 Macy's See assumption:
Oct-1986 to Nov-2036 29.22% $0.00 Anchor Tenants
602 Months $0
44 * Tower Retail 1 - Op IL $44.00 Jan-2019 $45.10 - - - See method: - - Market

Retail, Suite: TR01 5,088 $223,872 Jan-2020 $46.23 Standard See assumption:
Jan-2018 to Dec-2022 1.00% $3.67 Jan-2021 $47.38 Tower Retail 1
60 Months $18,656 Jan-2022 $48.57

84 Months $18,656 Jan-2022 $48.57
Jan-2023 $49.78
Jan-2024 $51.03

120 Months $18,656 Jan-2022 $48.57
Jan-2023 $49.78
Jan-2024 $51.03
Jan-2025 $52.30
Jan-2026 $53.61
Jan-2027 $54.95
47 * Tower Retail 1 - Va IL $44.00 Mar-2019 $45.10 - - - See method: $40.00 $5.00 Market
Retail, Suite: TR04 1,636 $71,984 Mar-2020 $46.23 Standard 2.16% See assumption:
Mar-2018 to Feb-2023 0.32% $3.67 Mar-2021 $47.38 $65,440 $8,180 Tower Retail 1
60 Months $5,999 Mar-2022 $48.57
48 * Tower Retail 1 - Va IL $44.00 Jun-2019 $45.10 - - - See method: $40.00 $5.00 Market
Retail, Suite: TR05 1,636 $71,984 Jun-2020 $46.23 Standard 1.51% See assumption:
Jun-2018 to May-2025 0.32% $3.67 Jun-2021 $47.38 $65,440 $8,180 Tower Retail 1
84 Months $5,999 Jun-2022 $48.57
Jun-2023 $49.78
Jun-2024 $51.03

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49 * Tower Retail 1 - Va IL $44.00 Sep-2019 $45.10 - - - See method: $40.00 $5.00 Market
Retail, Suite: TR06 1,635 $71,940 Sep-2020 $46.23 Standard 1.01% See assumption:
Sep-2018 to Aug-2028 0.32% $3.67 Sep-2021 $47.38 $65,400 $8,175 Tower Retail 1
120 Months $5,995 Sep-2022 $48.57
Sep-2023 $49.78
Sep-2024 $51.03
Sep-2025 $52.30
Sep-2026 $53.61
Sep-2027 $54.95
50 * Tower Retail 1 - Va IL $44.00 Dec-2019 $45.10 - - - See method: $40.00 $5.00 Market
Retail, Suite: TR07 1,635 $71,940 Dec-2020 $46.23 Standard 1.01% See assumption:
Dec-2018 to Nov-2028 0.32% $3.67 Dec-2021 $47.38 $65,400 $8,175 Tower Retail 1
120 Months $5,995 Dec-2022 $48.57
Dec-2023 $49.78
Dec-2024 $51.03
Dec-2025 $52.30
Dec-2026 $53.61
Dec-2027 $54.95

60 Months $13,213 Jan-2022 $33.11

84 Months $13,213 Jan-2022 $33.11
Jan-2023 $33.94
Jan-2024 $34.79

120 Months $13,213 Jan-2022 $33.11
Jan-2023 $33.94
Jan-2024 $34.79
Jan-2025 $35.66
Jan-2026 $36.55
Jan-2027 $37.47

120 Months $13,213 Jan-2022 $33.11
Jan-2023 $33.94
Jan-2024 $34.79
Jan-2025 $35.66
Jan-2026 $36.55
Jan-2027 $37.47
84 Months $5,665 Jun-2022 $33.11
Jun-2023 $33.94
Jun-2024 $34.79

Portfolio :
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Ref# : HSP
Page : 8
120 Months $5,663 Dec-2022 $33.11
Dec-2023 $33.94
Dec-2024 $34.79
Dec-2025 $35.66
Dec-2026 $36.55
Dec-2027 $37.47
84 Months $5,804 Jun-2023 $33.94
Jun-2024 $34.79
Jun-2025 $35.66
120 Months $5,804 Dec-2023 $33.94
Dec-2024 $34.79
Dec-2025 $35.66
Dec-2026 $36.55
Dec-2027 $37.47
Dec-2028 $38.40

Retail, Suite: TR31 745 $20,115 Jan-2020 $28.37 Standard See assumption:
120 Months $1,676 Jan-2022 $29.80
Jan-2023 $30.55
Jan-2024 $31.31
Jan-2025 $32.09
Jan-2026 $32.90
Jan-2027 $33.72
Total Occupied SqFt 404,752

Total Available SqFt 102,993
Portfolio :
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Time : 13:55
Ref# : HSP
Page : 1
Input Assumptions
Property Description Property Timing

Name: Ballston Quarter Analysis Start Date: 1/18
Address: 4238 Wilson Boulevard Reporting Start Date: 1/18
Address2: Years to Report or End Date: 12
City: Arlington
State: VA
Zip: 22203
Country: USA
Portfolio:
Property Type: Retail
Property Reference:
Property Version:
Area Measures Area Measures Determined by Occupancy

Label Area Minimum Adj.Min. Unit
Label Area
LMA - Major Anchors Major & Anchors
Property Size 507,745 SqFt LMA - Mall Shops Mall Shops
Alt. Prop. Size 1 SqFt LMA - Mall Shops (85%) Mall Shops 222,454 SqFt
GLA - Owned 359,392 SqFt
Constants
Label
Total Purchase Price 0
General Inflation
Inflation Month: Analysis Start
Reimbursement Method: Calendar reimbursement using calendar inflation
Overall Inflation Rates
Dec-2018 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026 Dec-2027 Dec-2028 Dec-2029 Dec-2030 Dec-2031
General Inflation 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Miscellaneous Revenues 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Reimbursable Expenses 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Non-Reimbursable Expenses 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Capital Expenditures 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
CPI 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Retail Sales Volume 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Market Rent 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Leasing Costs
Land Costs
Hard Costs
Soft Costs
Portfolio :
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Input Assumptions
Miscellaneous Revenues
Name Acct Code Actuals Budgeted Units Area/Constant Frequency % Fixed Inflation Ref Acct Notes
Tenant Utilities Detail $Amount 100
Tenant HVAC Detail $Amount 100
Specialty Leasing Detail $Amount 100
Other Income Detail $Amount 100
Parking Income 0 $Amount /Year 100
Detail Of Tenant Utilities
Dec-2018 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026 Dec-2027 Dec-2028 Dec-2029 Dec-2030 Dec-2031 Dec-2032
January 97465.75 99415.00 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58
February 97465.75 99415.00 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58
March 97465.75 99415.00 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58
April 97465.75 99415.00 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59
May 97465.75 99415.00 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58
June 97465.75 99415.00 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58
July 97465.75 99415.00 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59
August 97465.75 99415.00 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58
September 97465.75 99415.00 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58
October 97465.75 99415.00 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59
November 97465.75 99415.00 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58 101403.58
December 97465.75 99415.00 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59 101403.59
Annual Total 1169589 1192980 1216843 1216843 1216843 1216843 1216843 1216843 1216843 1216843 1216843 1216843 1216843 1216843 1216843
Inflation 0.0000 0.0000
Inflated Total 1169589 1192980 1216843 1247264 1278446 1310407 1343167 1376746 1411165 1446444 1482605 1519670 1557662 1596603 1636519
Detail Of Tenant HVAC
January 16011.58 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
February 16011.58 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
March 16011.59 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
April 16011.58 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
May 16011.58 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
June 16011.59 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
July 16011.58 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
August 16011.58 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
September 16011.59 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
October 16011.58 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
November 16011.58 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
December 16011.59 18323.50 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00 18690.00
Annual Total 192139.00 219882.00 224280.00 224280.00 224280.00 224280.00 224280.00 224280.00 224280.00 224280.00 224280.00 224280.00 224280.00 224280.00 224280.00
Inflation 0.0000 0.0000
Inflated Total 192139 219882 224280 229887 235634 241525 247563 253752 260096 266598 273263 280095 287097 294275 301632

Portfolio :
Date : 8/17/16
Time : 13:55
Ref# : HSP
Page : 3
Input Assumptions
Detail Of Specialty Leasing
January 39000.00 39975.00 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42
February 39000.00 39975.00 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42
March 39000.00 39975.00 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41
April 39000.00 39975.00 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42
May 39000.00 39975.00 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42
June 39000.00 39975.00 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41
July 39000.00 39975.00 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42
August 39000.00 39975.00 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42
September 39000.00 39975.00 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41
October 39000.00 39975.00 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42
November 39000.00 39975.00 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42 40974.42
December 39000.00 39975.00 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41 40974.41
Annual Total 468000.00 479700.00 491693.00 491693.00 491693.00 491693.00 491693.00 491693.00 491693.00 491693.00 491693.00 491693.00 491693.00 491693.00 491693.00
Inflation 0.0000 0.0000
Inflated Total 468000 479700 491693 503985 516585 529500 542737 556305 570213 584468 599080 614057 629409 645144 661272
Detail Of Other Income
January 11583.33 11930.83 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92
February 11583.33 11930.83 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92
March 11583.34 11930.84 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91
April 11583.33 11930.83 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92
May 11583.33 11930.83 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92
June 11583.34 11930.84 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91
July 11583.33 11930.83 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92
August 11583.33 11930.83 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92
September 11583.34 11930.84 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91
October 11583.33 11930.83 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92
November 11583.33 11930.83 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92 12226.92
December 11583.34 11930.84 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91 12226.91
Annual Total 139000.00 143170.00 146723.00 146723.00 146723.00 146723.00 146723.00 146723.00 146723.00 146723.00 146723.00 146723.00 146723.00 146723.00 146723.00
Inflation 0.0000 0.0000
Inflated Total 139000 143170 146723 150391 154151 158005 161955 166004 170154 174408 178768 183237 187818 192513 197326
Reimbursable Expenses
Common Area Maintenance 2,047,713 $Amount /Year 100
Real Estate Taxes 2,014,526 $Amount /Year 100 3
Food Court 160,368 $Amount /Year 100
Tenant Utilities 1 $Amount /Year 100 Yes
Tenant HVAC 290,761 $Amount /Year 100
Gross Up for Reimbursement: No

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Time : 13:55
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Page : 4
Input Assumptions
Reimbursement Revenue Reporting Group Reporting Group: Real Estate Taxes Reporting Group: Food Court
Reporting Group: Common Area Maintenance Real Estate Taxes Food Court
Reporting Group: Central Plant/HVAC Reporting Group: Tenant Utilities Reporting Group: Real Estate Taxes
Tenant HVAC Tenant Utilities Real Estate Taxes
Reimbursable Expense Reporting Group

Reporting Group: Common Area Maintenance
Reporting Group: Food Court Reporting Group: Central Plant/HVAC Reporting Group: Tenant Utilities
Food Court Tenant HVAC Tenant Utilities
Non-Reimbursable Expenses
Marketing & Promotion 750,000 $Amount /Year 100
General & Administrative 250,000 $Amount /Year 100
Specialty Leasing % of Line
Management Fee 3 % of EGR
Percent of Line Detail for Specialty Leasing
Percent Report Line Label

Detail Total Miscellaneous Revenue
Percent of Line Detail for Total Miscellaneous Revenue
Percent Report Line Label

5 Specialty Leasing
Capital Expenditures
Replacement Reserve 0.2 $/Area GLA - Owned /Year 100
Capital Expense Detail $Amount 100

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Input Assumptions
Detail Of Capital Expense
January
February
March
April
May
June
July
August
September
October
November
December
Annual Total
Inflation 0.0000 0.0000
Inflated Total
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Supporting Schedule -- Square Feet Expiring -- (All Terms)
Month One Lease First Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
For the Years Ending Occupied Area Start Expiration Dec-2018 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026
Tenant Suite
Regal Cinemas 3300 67,062 7/01/99 6/30/19 67,062
Sport & Health 3018 32,605 7/01/98 6/30/20 32,605
* First Level - Open ** 1100 9,844 1/01/18 12/31/22 9,844
* Second Level - Open * 2100 6,814 1/01/18 12/31/22 6,814
* Third Level - Open ** 3100 5,125 1/01/18 12/31/22 5,125
* Concourse Food - Open C104 1,000 1/01/18 12/31/22 1,000
* Tower Retail 1 - Open TR01 5,088 1/01/18 12/31/22 5,088
* Tower Retail 1 - Vaca TR04 3/01/18 2/28/23 1,636
* First Level - Vacant 1105 6/01/18 5/31/23 5,276
* Third Level - Vacant 3104 9/01/18 8/31/23 4,647
* First Level - Open ** 1102 9,844 1/01/18 12/31/24 9,844
* First Level - Open ** 1104 6,099 1/01/18 12/31/24 6,099
* Third Level - Open ** 3101 5,125 1/01/18 12/31/24 5,125
* Third Level - Open ** 3103 5,125 1/01/18 12/31/24 5,125
CVS 1175 11,593 12/01/09 1/31/25 11,593
* Second Level - Vacant 2105 6/01/18 5/31/25 6,815
* Concourse Food - Vaca C105 12/01/18 11/30/25 1,033
* First Level - Open ** 1101 9,844 1/01/18 12/31/27
* First Level - Open ** 1103 9,844 1/01/18 12/31/27
* Second Level - Open * 2102 6,814 1/01/18 12/31/27
* Third Level - Open ** 3102 5,125 1/01/18 12/31/27
* Concourse Food - Open C101 1,100 1/01/18 12/31/27
* Tower Retail 1 - Open TR03 5,088 1/01/18 12/31/27
* Tower Retail 3 - Open TR31 745 1/01/18 12/31/27
* Tower Retail 1 - Vaca TR06 9/01/18 8/31/28
* Concourse Level - Vac C201 10/01/18 9/30/28
* Second Level - Vacant 2106 12/01/18 11/30/28
Capital One 1145 3,745 7/01/16 12/31/28
* Third Level - Vacant 3106 3/01/19 2/28/29
* First Level - Vacant 1107 6/01/19 5/31/29
* Concourse Level - Vac C202 10/01/19 9/30/29
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Month One Lease First Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
For the Years Ending Occupied Area Start Expiration Dec-2018 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026
Tenant Suite
Total SqFt Expiring 67,062 32,605 33,156 11,559 50,194 32,619 28,171
=========== =========== =========== =========== =========== =========== =========== =========== ===========
Percent Of Total Expiring 13.2% 6.4% 6.5% 2.3% 9.9% 6.4% 5.5%
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Month One Lease First Year 10 Year 11 Year 12 Year 13

For the Years Ending Occupied Area Start Expiration Dec-2027 Dec-2028 Dec-2029 Dec-2030
Tenant Suite
Regal Cinemas 3300 67,062 7/01/99 6/30/19
Sport & Health 3018 32,605 7/01/98 6/30/20 32,605
* First Level - Open ** 1100 9,844 1/01/18 12/31/22 9,844
* Third Level - Open ** 3100 5,125 1/01/18 12/31/22 5,125
* First Level - Open ** 1102 9,844 1/01/18 12/31/24
* First Level - Open ** 1104 6,099 1/01/18 12/31/24
* Third Level - Open ** 3101 5,125 1/01/18 12/31/24
* Third Level - Open ** 3103 5,125 1/01/18 12/31/24
CVS 1175 11,593 12/01/09 1/31/25
* Concourse Food - Vaca C105 12/01/18 11/30/25
* First Level - Open ** 1101 9,844 1/01/18 12/31/27 9,844
* First Level - Open ** 1103 9,844 1/01/18 12/31/27 9,844
* Third Level - Open ** 3102 5,125 1/01/18 12/31/27 5,125
* Tower Retail 3 - Open TR31 745 1/01/18 12/31/27 745
* Concourse Level - Vac C201 10/01/18 9/30/28 3,766
Capital One 1145 3,745 7/01/16 12/31/28 3,745
* Concourse Level - Vac C202 10/01/19 9/30/29 3,765
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Month One Lease First Year 10 Year 11 Year 12 Year 13

For the Years Ending Occupied Area Start Expiration Dec-2027 Dec-2028 Dec-2029 Dec-2030
Tenant Suite
Total SqFt Expiring 58,044 19,861 26,121 77,320
=========== =========== =========== ===========
Percent Of Total Expiring 11.4% 3.9% 5.1% 15.2%
Addendum E:
Improved Sale Datasheets

IMPROVED SALE COMPARABLE - 1
Market Commons at Clarendon

2800 Clarendon Boulevard
Arlington VA 22201
MSA: Washington
Arlington County
Property Type: Shopping Center

Property Subtype: Lifestyle Center
ID: 352296
APN: 18-011-008; 18-016-006, 18-010-010; 18-010-005;
18-010-006; 18-010-014; 015 and 019
Included
PROPERTY INFORMATION Anchors in Sale GLA
(SF)
Site Area (Acres): 8.41 Barnes & Noble X 27,069
Site Area (SqFt): 366,340 Crate & Barrel X 36,851
L:B Ratio: 0.92:1 Container Store X 29,070
Parking Spaces: 1,219 Washington Sports X 20,400
Parking Ratio: 3.07:1,000 Pottery Barn X 14,628
Year Built: 2001
Whole Foods (GL) X 34,000
Last Renovation: N/A Total Anchor GLA 162,018
Quality: Excellent Inline GLA X 137,960
Condition: Excellent Other GLA: X 97,000
Total GLA 396,978
Sold GLA 396,978
SALE INFORMATION
Sale Status: Recorded Sale OAR: 4.03%
Transaction Date: 5/2016 NOI: $11,500,000
Sale Price: $285,700,000 NOI per SqFt: $28.97
Price per SqFt: $719.69 Occupancy: 97.00%
Value Interest: Leased Fee Expense Ratio: N/A
Grantor: TIAA 485 Clarendon, LLC EGIM: N/A
Grantee: Regency Center
Condition of Sale: None
VERIFICATION COMMENTS
This transaction was confirmed with CBRE-Bill Kent, TIAA
COMMENTS
This represents the sale of the lifestyle center and office components of a larger 680,000 square foot mixed-use development known as
Market Commons Clarendon, located in the heart of the Clarendon neighborhood of Arlington. The lifestyle center contains 296,000
square feet of retail space and was developed between 2001 and 2004. The office component contains approximately 97,000 square
feet and was constructed in the 1940s and renovated in the 1990s. The property also includes two parking garages totaling 1,219
spaces, which serve the office, retail, and multi-family components. The NOI is based on year one pro forma. The parking garage
represents approximately 4.03 percent of the NOI, while the office represents approximately 8.5 percent of NOI. Whole Foods
exercised their first of four, 5-year renewal options in 2016. The retail component was 95 percent occupied, while the office component
was only 41.3 percent occupied. The office is being leased by Gridpoint, and the space is currently being offered for sublease (the
tenant is expected to vacant upon their lease expiration in December 2017). The office may be relet or possibly redeveloped with a
higher density use, if approved by the county.
VALUATION & ADVISORY

Quaker Bridge Mall

150 Quaker Bridge Mall Road
Lawrenceville NJ 08648
MSA: Trenton
Mercer County

Property Subtype: Super Regional Center/Mall
ID: 335059
APN: Block 4201.1 Lot 3.01 and Block 5201.1 Lot 25
Included
(SF)
Site Area (Acres): 59.47 JC Penney 151,491
Site Area (SqFt): 2,590,513 Lord & Taylor 151,465
L:B Ratio: 2.39:1 Macy's 212,663
Parking Spaces: 5,596 Sears 171,141
Parking Ratio: 5.17:1,000
Year Built: 1976
Last Renovation: 2014 Total Anchor GLA 686,760
Quality: Good Inline GLA X 356,062
Condition: Excellent Other GLA: 40,606
Total GLA 1,083,428
Sold GLA 356,062
SALE INFORMATION
Value Interest: Partial Interest Expense Ratio: N/A
Grantor: Simon Property Group EGIM: N/A
Grantee: IMI Price per SF Mall Shop: $968.93
Condition of Sale: None Comparable Store Sales: $674.00
Sales Multiple: 1.44
This transaction was confirmed with representatives of the buyer (IMI)- Miller Capital (IMI partnership is comprised of CalPERS and
Miller Capital)
COMMENTS
This transaction involves the sale of a 50% interest. Quaker Bridge Mall is a two-level center with frontage along U.S. Route 1, midway
between Princeton and Trenton. The center was owned in a partnership with RREEF and Simon Property Group. RREEF's 50%
interest was marketed by Eastdil (the targeted marketing was launched in September 2015, with final offers received from 3 bidders,
with TIAA-CREF offering a gross price of $337.5 million. Simon exercised a ROFR on 2/1/16 and flipped it on the same day to IMI (on
behalf of CALPERs) at a gross price of $345 million). Development approvals were in-place at the time of the sale for an additional
600,000 square feet of GLA, including two department stores. While it is understood that these approvals expired in 2015, ownership
was in negotiations to extend them. Two fashion anchors that had been interested have since passed on the project. In-line store sales
were $530 per square foot excluding Apple in November 2015. Anchors perform near their respective chain averages, except Sears,
which is at 50% of its chain average. A $65.6 million renovation was recently completed, which included new vertical transportation and
a 600-seat food court on the second level. The center was also substantially re-tenanted. Cheesecake Factory was added in 2013 and
Brio in 2014. Property taxes were reduced from approximately $4.3 million to approximately $3.5 million annually due to a successful
tax appeal.

Deptford Mall
1750 Deptford Center Road
Deptford NJ 08096
MSA: Philadelphia
Gloucester County

Property Subtype: Super Regional Center/Mall
ID: 347982
APN: N/A
Included
(SF)
Site Area (Acres): 64.31 Macy's 202,610
Site Area (SqFt): 2,801,344 JC Penney 143,995
L:B Ratio: 2.69:1 Boscov's 161,360
Parking Spaces: 5,100 Sears 159,887
Year Built: 1975
Condition: Good
Total GLA 1,040,960
Sold GLA 373,108
SALE INFORMATION
Price per SqFt: $1,458.02 Occupancy: 94.00%
Value Interest: Partial Interest Expense Ratio: N/A
Grantor: Macerich EGIM: N/A
Grantee: Heitman Price per SF Mall Shop: $1,458.02
Condition of Sale: None Comparable Store Sales: $595.00
Sales Multiple: 2.45
Public Information, Macerich 10K and Buyer
COMMENTS
Deptford Mall is a major shopping destination in southern New Jersey. This was part of a transaction in which Heitman purchased a
49% interest in three properties (Deptford, FlatIron Crossing, and Twenty Ninth Street). The occupancy and in-line sales reported were
per Macerich as of contract date. Macerich acquired the center in 2007.

Stonebridge at Potomac Towne Center

14900 Potomac Towne Place
Woodbridge VA 22191
MSA: Washington
Prince William County

ID: 333843
APN: 8291-94-2928
Included
(SF)
Site Area (Acres): 80.80 REI X 25,218
Site Area (SqFt): 3,519,648 Sport & Health X 42,401
L:B Ratio: 7.28:1 DSW X 17,688
Parking Spaces: 2,638 Golf Smith X 18,406
Parking Ratio: 5.45:1,000 Old Navy X 15,026
Year Built: 2007
Wegmans-GL X 138,500
Total GLA 483,631
Sold GLA 483,631
SALE INFORMATION
Value Interest: Leased Fee Expense Ratio: 33.60%
Grantor: Diamond Potomac Town Center, LLC EGIM: N/A
Grantee: JBG/Woodbridge Retail, LLC
Purchase contract, buyer, appraiser files
COMMENTS
This is a sale of a Class A lifestyle center asset with the opportunity to add value and increase cash flow through lease up of the
remaining vacant space as well as the development of 25,500 square feet of additional retail space. Wegmans is on a long-term
ground lease until August 2028. Sports & Health is in a separate three-story building until Sept 2027. The average occupancy cost for
tenants that reported sales was 10.6 percent, with a Rent to Sale ratio of 8.77 percent. NOI is based on year one proforma. The
prospective buyer is plans to demolish a portion of building 5 and redevelop and expand the building with an entertainment user. The
total amount of retail space to be demolished is 24,907 square feet, which includes 20,000 square foot anchor space and two in line
retail spaces totaling 4,907 square feet. The prospective buyer is planning on redeveloping the building with a 51,145 square foot
entertainment tenant. The buyer is also plans to develop a separate 25,500 square foot in line retail building. Therefore, the total gross
leasable area will increase to 534,369 square feet, upon completion of the proposed redevelopment. The site also includes an
additional density of 440,000 square feet of office space in Phase III, or Land Bay 3. According to the potential buyer, they attributed
very little to the office land in their sale price.

Shops @ Skyview Center

40-24 College Point Boulevard
Flushing NY 11354
MSA: New York
Queens County

Property Subtype: Regional Center
ID: 317984
APN: N/A
Included
(SF)
Site Area (Acres): 13.34 BJ's Wholesale X 120,860
Site Area (SqFt): 581,090 Target 167,675
L:B Ratio: 0.86:1 Nordstrom Rack X 39,000
Parking Spaces: 2,156 Marshall's X 45,000
Parking Ratio: 3.19:1,000 Best Buy X 45,000
Year Built: 2010
Other Jr. Anchors 156,585
Condition: Good Other GLA: X 2,851
Total GLA 676,492
Sold GLA 508,817
SALE INFORMATION
Value Interest: Leased Fee Expense Ratio: N/A
Grantor: Onex Real Estate Partners EGIM: N/A
Grantee: The Blackstone Group
Costar, Inc., Public Record
COMMENTS
This is the sale of the retail portion of a larger mixed-use development that includes three residential towers with 448 residential units,
medical office space and a six level parking garage. This is a strong retail location in the New York Metro area. The Target, store is
owned separately and was not included in the sale. Reportedly, 27 percent of the retail space is net leased to credit tenants.

Downtown Crown (Retail Component)

1106 Crown Park Highway
Gaithersburg MD
MSA: Washington
Montgomery County

ID: 301248
APN: 09-03702363; 03702385; 03702283; 03702454;
03702317
Included
(SF)
Site Area (Acres): 20.00 Harris Teeter X 53,518
Site Area (SqFt): 871,200 LA Fitness X 39,192
L:B Ratio: 3.38:1
Parking Spaces: 1,406
Year Built: 2013
Condition: Excellent
Total GLA 257,967
Sold GLA 257,967
SALE INFORMATION
Grantor: JBG Crown Retail,LLC EGIM: N/A
Grantee: Retail Properties of America Inc
This transaction was confirmed with the broker, as well as public records and a research service. Document #49728-0452.
COMMENTS
Downtown Crown is the retail and residential mixed-use component of the 180-acre Crown Development. Downtown Crown consists of
257,967 square feet of ground floor retail space (included in sale), and 538 residential apartment units (owned by a third party), which
are located within six stand alone retail buildings and two-mixed use buildings spanning approximately 20 acres. Downtown Crown also
includes three parking garages and a parking lot. Harris Teeter is on a long-term ground lease (2034), along with a second bank pad
site that will be ground leased to Sun Trust Bank. Restaurants include Ruth's Chris, Ted's Montana Grill, Old Town Pour House, and
Coastal Flats. At the time of sale, the center was 73.7 percent occupied, but of the remaining 67,906 square feet, 16,329 square feet
was under active lease negotiations and 41,258 square feet was under active LOIs. NOI is based on 96.0 percent occupancy, including
the current leases in-place and active LOIs. The average household income within a 3-mile radius was $129,000, with a population
over 137,000.

Merrifield Town Center (Retail Condo Component)

8190 Strawberry Lane
8191 Strawberry Lane
Falls Church VA 22042
MSA: Washington
Fairfax County

ID: 302112
APN: 049-4-17-C3; 049-4-17-C2; 049-4-17-C1; 049-4-
1702-C4; 049-17-02-C3; 049-4-17-02-C2; 049-4-17-
02-C1
Included
(SF)
Site Area (Acres): 7.48 XSports Fitness X 45,000
Site Area (SqFt): 325,829
L:B Ratio: 3.84:1
Parking Spaces: 680
Year Built: 2008
Condition: Good
Total GLA 84,928
Sold GLA 84,928
SALE INFORMATION
Grantor: MTC Commercial, LLC (Uniwest) EGIM: N/A
Grantee: RPAI Falls Church Merrifield, LLC
Article, Deed Book 23950 page 2058
COMMENTS
This transaction involves the retail condominium portion of a mixed-use development known as Merrifield Town Center. The retail
component includes 85,000 square feet of space. This mixed use development includes 270 residential apartment/condo units, along
with 23,850 SF of office space (not included in the transaction). There are over 680 parking spaces dedicated to the commercial uses.
National tenants include Cold Stone Creamery, Chipotle, Noodles & Co., Citi and Panera Bread. The center is anchored by Xsports
Fitness whose lease expires in January 2023. The three-mile radius trade area population is over 142,000, with an average household
income over $140,000. The net operating income was derived from pro forma (5/14-4/15), and excludes the office space. Condo units
C1S, B2S, B1S, C1N, C2N, B1N, A1N of Phase 2 Vantage of Merrifield Town Center Condo. The site is zoned PRM.

The Shops at Georgetown Park

3222-3276 M Street, NW
Washington DC 20007
MSA: Washington
District of Columbia County

ID: 288062
APN: Square 1200 Lots 0852; 0866; 0867; 0868
Included
(SF)
Site Area (Acres): 3.84 Washington Sports X 23,369
Site Area (SqFt): 167,112 TJ Maxx/Homegoods X 47,566
L:B Ratio: 0.55:1 Pinestripes X 34,558
Parking Spaces: 668 H&M X 31,763
Parking Ratio: 2.20:1,000 Forever 21 X 20,722
Year Built: 1871
Total GLA 303,574
Sold GLA 303,574
SALE INFORMATION
Grantor: AG Georgetown Park Holdings I, LLC EGIM: N/A
Grantee: Jamestown Premier Georgetown Park
Condition of Sale: Corp
None
Appraiser files, Broker
COMMENTS
In 2013, the property was redeveloped from an enclosed regional mall into an urban lifestyle center with large anchor tenant spaces. All
interior mall space was demolished and the floors had been filled in with reinforced concrete. Today, the Shops of Georgetown contains
303,574 square feet within three buildings. The main building contains 251,442 SF, the office building known as Canal House contains
34,415 SF, and the Market House, occupied by Dean & Deluca, contains 17,717 SF. The property also includes a four-level parking
garage with 668 spaces. Residential condominiums are located on top of the main shopping center building, but were not included in
this transaction. This property is the largest retail project in Georgetown, which is one of Washington's most recognized and coveted
retail destinations. Located at the intersection of two premiere shopping streets (M Street and Wisconsin St NW). The property was free
and clear of existing debt. NOI was based on the 2015 pro forma.

Addendum F:
Professional Qualifications

Jay F. Booth, MAI Senior Managing Director
Practice Group Member | Retail
Cushman & Wakefield of Oregon, Inc.
Professional Expertise
Jay F. Booth currently serves as Senior Managing Director of Cushman & Wakefield’s Valuation &
Advisory, Pacific Northwest region. He also serves in a leadership role within V&A’s Retail Industry
Group. Mr. Booth joined the New York office of Cushman & Wakefield in 1993, and relocated to
Portland, Oregon in 1998. Prior to joining Cushman & Wakefield, Mr. Booth was an Associate with
Appraisal Group, Inc. in Portland, Oregon from 1990 to 1993. AGI was a regional valuation and
advisory firm that later became Columbia Consulting Inc., specializing in all property types, including
industrials, office buildings, retail centers, and special use properties. At AGI, Mr. Booth also
performed extensive work on market analyses and supply and demand studies.
Mr. Booth has a broad range of experience in counseling and valuation for a full array of property
types. As part of Cushman & Wakefield’s Valuation & Advisory Retail Industry Group, Mr. Booth’s
primary focus is major national retail properties, including regional malls, specialty centers,
department stores, power and lifestyle centers, factory outlet centers and other retail formats. He has
appraised or consulted on over 400 regional mall assignments in almost every state.
Memberships, Licenses, Professional Affiliations and Education
 Designated Member, Appraisal Institute (MAI #11142). As of the current date, Jay Booth, MAI has
completed the requirements of the continuing education program of the Appraisal Institute.
 Certified General Real Estate Appraiser in the following states:
 Arizona – 31724
 Colorado – 100013948
 Hawaii – CGA 937
 Idaho – CGA-2312
 Nevada – A.0206117-CG
 Oregon – C000929
 Washington – 1101056
 Affiliate Member, International Council of Shopping Centers, ICSC
 Member, Urban Land Institute
 Member, Experience Review Panel, Appraisal Institute, 2006-2008
 Vice Chair, National Admissions Appeal Board, Appraisal Institute (2003-2005)
 Master of Science in Real Estate, New York University
 Bachelor of Science, Willamette University
 Overseas Study
 Xiamen University
 Kookmin University
 Tokyo International
Other Accomplishments and Awards
 Presentations/Guest Speaker
 “Current Retail Market Trends” – Fall Real Estate Conference 2012, Seattle Chapter of the
Appraisal Institute, Seattle, WA
 “Retail Industry Overview and Valuation Issues” – Cushman & Wakefield WebEx Seminar,
approved by the Appraisal Institute for continuing education
 Publications
 Mr. Booth is a contributing author for a variety of Cushman & Wakefield research and industry
reports, including National Retail Overview, Lifestyle Industry Overview and Factory Outlet
Center Industry Overview, as well as Cushman & Wakefield’s Portland Regional Bulletin.
 Mr. Booth has qualified as an expert witness in the following courts:
 United States Bankruptcy Court, Northern District of California, San Jose Division
 Supreme Court of the State of New York, County of New York
 Special Awards
 Top Valuation & Advisory Professional, Portland (1999, 2006, 2008)

Richard W. Latella, MAI, FRICS Executive Managing Director
Practice Group Leader | Retail
Cushman & Wakefield, Inc.
Professional Expertise
Mr. Latella entered real estate in 1975 in sales and residential appraising with Warren W. Orpen &
Associates, a local real estate appraisal, brokerage and insurance firm. In 1977, he joined the New
Jersey Division of Taxation as a Supervisor in the Local Property Tax and Public Utility Branch. While
assisting and advising state taxpayers on a myriad of issues, he completed the necessary course
work and required examination to become a Certified Tax Assessor in New Jersey. In 1980, he
shifted to a career in commercial real estate valuation with Valuation Counselors Inc., a national
multi-disciplined commercial and institutional valuation firm in their Princeton, New Jersey office.
In1982, he was promoted to Senior Appraiser.
Mr. Latella joined Cushman & Wakefield’s then-national headquarters in Philadelphia in 1983 as a
Senior Appraiser. By the mid-to-late 1980s he began to develop a core specialization in retail
valuation, with an emphasis on regional/superregional malls. His relocation to Cushman &
Wakefield’s World Headquarters in 1988 directly addressed a need to better serve global capital
providers and institutional clients that lend on significant retail properties. Recognizing this need, Mr.
Latella helped establish Cushman & Wakefield’s first specialty appraisal practice in 1990 devoted
exclusively to the retail asset class. Over the ensuing years Cushman & Wakefield’s Valuation &
Advisory group has built its business model around specialization and now has over 20 specialty
practices across a myriad of industries and property classes.
He currently serves as Executive Managing Director, Practice Group Lead for the Retail practice
group. This group is comprised of approximately 120 senior-level appraisers specializing in regional
malls, department stores, and other major retail property types in 99 markets around the world. In
2014 the global team completed nearly 13,000 appraisals and his domestic team completed
valuations on 14 of the top 20 sales and financing transactions in the United States. Mr. Latella’s
appraisal and consulting assignments have been international in scope and have included a full array
of property types, including commercial, industrial, multifamily residential, hotels and special-use
properties such as hospitals and nursing homes. He is qualified as an expert witness in retail matters
and testified in bankruptcy litigation cases. He has been a guest speaker before numerous real estate
and advisory organizations throughout the world.
Memberships, Licenses, Professional Affiliations and Education
 Designated Member, Appraisal Institute (MAI #8346). As of the current date, Richard Latella, MAI
has completed the requirements of the continuing education program of the Appraisal Institute
 Certified General Real Estate Appraiser in the following states:
 Arizona – 31866
 California – AG044466
 Colorado – CG.200000528
 Connecticut – RCG.0001312
 Georgia – 213716
 Illinois – 553.002304
 Louisiana – G2925
 Maryland – 11507
 Minnesota – 40184155
 Nevada – A.0205886-CG
 New Jersey – 42RG00192700
 New York – 46000003892
 North Carolina – A7228
 Ohio – 2002005378
 Pennsylvania – GA-001053-R
 Tennessee – CG 4481
 Texas – 1380524 G
 Virginia – 4001015323
 Fellow, Royal Institution of Chartered Surveyors (FRICS Designation #1256063)
 Affiliate Member, International Council of Shopping Centers, ICSC
 Council Member, Urban Land Institute, Membership #76883
 New Jersey Licensed Real Estate Salesperson, NS-130101-A
 Former Certified Tax Assessor, State of New Jersey
 Bachelor of Science, College of New Jersey
Other Accomplishments and Awards
 2014 New York Area Top Valuation & Advisory Professional
 Recipient of the Leo L. Majzels award for overall professional excellence and quality of services by
the Valuation Advisory Services Group of Cushman & Wakefield in 1997
Guest Speaker/Presentations
 Triovest – Overview of the U.S. Retail Market, April 2016, Toronto, Canada
 Citi Global Markets & Banking REIT Equities Analyst Presentation 2015, NYC – Industry Expert
Speaker
 Fall Real Estate Conference 2012-2015 – Seattle Chapter of the Appraisal Institute, Seattle, WA

 JP Morgan Chase – TCNJ School of Business Alumni Panel Presentation 2015 – Guest Speaker
 ICSC Symposium 2014 Market Intelligence in Latin America Mexico City – Guest Speaker
 Villanova Real Estate Challenge 2014, 2015 and 2016 – Guest Judge
 Cushman & Wakefield EMEA Presentation – Globalization of the Retail Valuation Practice,
Frankfurt, Germany
 Cushman & Wakefield APAC Presentation – Globalization of the Retail Valuation Practice,
Shanghai, China
 Cushman & Wakefield Webinar Series – 1Q2012 – Quarterly State of the Market – Retail
 ICSC/VRN – 2011 VRN Fall Outlet Leasing and Marketing Convention, Keynote speaker – New
Jersey Meadowlands
 C-III Capital 2011 Capital Markets and Valuation Overview – Dallas, TX
 J.E Robert Companies – 2011 Valuation Seminar – Dallas, TX
 Citibank – 2009, Citi Investment Research Retail Days – New York, NY
 Urban Land Institute – 2008, Spring Council Forum – Dallas, TX
 Capmark – 2008, National Sales Meeting – Phoenix, AZ
 ICSC Fall Research Conference – 2006, Houston, TX
 Wharton School – University of Pennsylvania – Real Estate Club – 2005
 New York University – Real Estate Masters Program – 2005
 Columbia Business School, Real Estate Association – 2005
 International Council of Shopping Centers Financial Management Conference 2002, Orlando, FL
 NCREIF – Winter Conference-2002, Snowbird, UT
 International Council of Shopping Centers – Spring Convention – 2001 Las Vegas, NV
 KanAm Investor Presentation – 2000, Dusseldorf, Frankfurt, and Munich, Germany
 Cushman & Wakefield’s Market Trends Seminars
 Capital Company of America – Showcase V 1998, San Francisco, CA
Bankruptcy and Expert Testimony
 Acted as an expert witness in various states
 Has been retained as a consultant and valuation expert in connection with several retail
bankruptcies, restructurings and financings for such retailers as: Albertsons, Burlington Coat
Factory, Mervyns, Toys “R” Us, Lord & Taylor, Saks Fifth Avenue, JC Penney, Sears, Safeway,
Neiman Marcus, Pep Boys, Kroger, O’Reilly Auto, Bally Total Fitness, Loews Cineplex, Kmart,
Service Merchandise, Payless Cashways, Frank’s Nursery, Warnaco, Federated Department
Stores, Macy’s, Merry-Go-Round, Homelife, Homebase, Jacobson’s, Bruners Furniture, Liberty
House, Jitney Jungle, Hechinger, Montgomery Ward, Penn Traffic, Levitz Furniture, Rite-Aid,
Caldor, Bradlees, Stop & Shop and Regal Cinemas.
 Mr. Latella was retained by Weil, Gotshal & Manges LLP as lead appraiser and expert witness for
the General Growth Properties bankruptcy, the largest retail bankruptcy ever.

 Participated in various arbitrations with respect to valuation disputes involving retail property
 July 2015 testified as an expert witness in Maryland Tax Court
 United States District Court, Middle District of Louisiana
 KeyBank National Association, v. Perkins Rowe Associates, L.L.C., et al., July 2010, Case No.
3:09-CV-00497
 United States Bankruptcy Court, Southern District of New York
 General Growth Properties, Inc., et al., May 2009, Case No. 09 – 11077 (ALG)
 Sussex Commons Outlets, LLC, v. Chelsea Property Group, Inc., et al., September 2006, Docket
No. L-554-03 Superior Court of New Jersey, Sussex County
Publications
Mr. Latella is a contributing author and consultant to various retail research reports and periodicals,
including the PriceWaterhouseCoopers (formerly Korpacz) Real Estate Investors Survey, Shopping
Center Business, Shopping Center World, Value Retail News, Real Estate Forum, Crain’s New York
Business, National Real Estate Investor, The New York Times and The Wall Street Journal.
 Over the past 10 years, Mr. Latella has authored a variety of Cushman & Wakefield Research
Reports, produced generally one to two times per year and are provided to clients, brokers and
analysts:
 National Retail Overview
 Lifestyle Industry Overview
 Movie Theatre Industry Overview
 Outlet Industry Overview
 Mart Industry Overview
 Supermarket Industry Overview
 Drug Store Industry Overview
 Retail Net Lease Overview
 Potential for Outlet Center Development in Canada” (Cushman & Wakefield study), September
2012
 “Exuberance in Control, Outlet Sector on a Roll,” Value Retail News, May 2011 (cover)
 PricewaterhouseCoopers (Korpacz) Real Estate Investors Survey:
 “Retail Special Report: The Perfect Storm or More Hot Air,” 2Q 2009
 “Retail Special Report: The 100-Million Square Foot Hangover,” 1Q 2009
 “Frugal is Fashionable,” Urban Land, January 2009
 “The Numbers Don't Lie – Outlet=Opportunity,” Value Retail News, September 2009
 Cushman & Wakefield Business Briefings:
 “Millennial and Retail” 2015
 “National Luxury Retail Overview,” 2012

 “National Luxury Market: Frugality Fatigue Spurs Americans to Trade Up,” 2012
 “When The Storm Passes,” 2009
 “Race to The Bottom,” 2009
 “Frugal is Fashionable,” 2008
 “Changing Tides – Outlook for the Retail Sector,” 2008
 Cushman & Wakefield Retail TrendWatch:
 “Outlet Sector Investment and Productivity at Record Levels,” September 26, 2011
 Developed a two-hour WebEx seminar entitled, “Retail Industry Overview and Valuation Issues,”
approved by the Appraisal Institute for continuing education
Other
 Upper Makefield Township Planning Commission, Bucks County, PA
 401K Committee, Cushman & Wakefield, Inc.
 Cushman & Wakefield Valuation & Advisory-Global Leadership Team; Global Accounts Team;
Quality Control Committee; IT Committee
 Former Board Member, New Hope Historical Society

TEXAS
VIRGINIA

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APPRAISAL OF REAL PROPERTY

(Rendering of property frontage along Wilson Boulevard following redevelopment)

4238 Wilson Boulevard

Arlington, Arlington County, VA 22203

CUSHMAN & WAKEFIELD

August 15, 2016

Mr. Steven H. Kurland

Re: Appraisal Report

Cushman & Wakefield File ID: 16-34001-900566-001

Dear Mr. Kurland:

This appraisal does not employ any hypothetical conditions.

CUSHMAN & WAKEFIELD OF OREGON, INC.

Client Satisfaction Survey

V&A National Quality Control Group values your feedback!

Contact our Quality Control Committee with any questions or comments:

CUSHMAN & WAKEFIELD I

Summary of Salient Facts and Conclusions

CUSHMAN & WAKEFIELD II

HIGHEST & BEST USE

CUSHMAN & WAKEFIELD III

Market Value Prospective Market Value Prospective Market Value

FINAL VALUE CONCLUSION

CUSHMAN & WAKEFIELD IV

This appraisal does not employ any hypothetical conditions.

CUSHMAN & WAKEFIELD V

Summary of Critical Observations

CUSHMAN & WAKEFIELD VI

CUSHMAN & WAKEFIELD VII

BIRD’S EYE VIEW OF BALLSTON COMMON FROM SOUTH

BIRD’S EYE VIEW OF BALLSTON COMMON FROM NORTH

CUSHMAN & WAKEFIELD VIII

RENDERING OF FORMER MACY’S HOME AND MEN’S AT RANDOLPH AND WILSON

CUSHMAN & WAKEFIELD IX

VIEW FROM WILSON AND RANDOLPH (BEFORE)

RENDERING FROM WILSON AND RANDOPLH (AFTER)

CUSHMAN & WAKEFIELD X

INTERIOR CONCOURSE VIEW (BEFORE)

INTERIOR CONCOURSE RENDERING (AFTER)

CUSHMAN & WAKEFIELD XI

VIEW FROM WILSON AND STEWART (BEFORE)

RENDERING FROM WILSON AND STEWART (AFTER)

CUSHMAN & WAKEFIELD XII

LOOKING EAST ON WILSON TOWARD RANDOLPH (BEFORE)

RENDERING LOOKING EAST ON WILSON TOWARD RANDOLPH (AFTER)

CUSHMAN & WAKEFIELD XIII

RENDERING OF DINING GALLERY

ADDITIONAL RENDERING OF DINING GALLERY

CUSHMAN & WAKEFIELD XIV

RENDERING OF INTERIOR COURT AREA

ADDITIONAL INTERIOR RENDERING

CUSHMAN & WAKEFIELD XV

CUSHMAN & WAKEFIELD XVI

CUSHMAN & WAKEFIELD XVII

Sales Comparison Approach ............................................................................................................................. 144

CUSHMAN & WAKEFIELD XVIII

CUSHMAN & WAKEFIELD 19

Report Option Description

Location: 4238 Wilson Boulevard

The subject property is located in the southeasterly quadrant of Wilson Boulevard

Therefore, excluding non-owned components, the owned GLA included in this

CUSHMAN & WAKEFIELD 20

Property Ownership And Recent History

CUSHMAN & WAKEFIELD 21