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22HawleyStFinal Appraisal.pdf Real Estate Appraisal Report ST. JOHN CANTIUS CHURCH 10 Hawley Street Northampton, MA 01060 Our File: 22HawleySt Date of Value: March 9, 2022 Prepared For: Mr. Matthew Welter O’Connell Development Group 800 Kelly Way Holyoke, MA 01040 Prepared By: Realty Advisors 785 Williams Street, #128 Longmeadow, Massachusetts, 01106 Date of Report: April 15, 2022 Realty Advisors Commercial Real Estate Valuation 785 Williams St., #128 • Longmeadow, MA 01106 • Phone (413) 565-2220 • realtyadvisors-ma.com • jfish11@msn.com James F. Fisher, MAI MASSComp Real Estate Data Provider April 15, 2022 Mr. Matthew Welter O’Connell Development Group 800 Kelly Way Holyoke, MA 01040 Re: Real Estate Appraisal Report St. John Cantius 10 Hawley Street Northampton, MA 01060 . Dear Mr. Welter, Pursuant to your request, we have completed a Real Estate Appraisal Report for the above captioned property. The purpose of the study is to estimate the change in market value caused by a proposed deed restriction. I have examined the subject property under two development scenarios in order to estimate the loss in market value caused by the proposed restriction. I have considered the costs to construct a new building after demolition versus redevelopment of the existing structure to compare the difference in the “as is” market value. A survey and analysis of market rents using HUD form 22264 was conducted to examine market rents under the two development scenarios. Operating expenses, net operating income financial parameters, development costs and other relevant factors associated with the two development scenarios are analyzed in this report. The intended user of this report is O’Connell Development Group. The intended use of this report is for submission to the City of Northampton for a Community Preservation submission. The appraisal report was prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP). The property being appraised is analyzed under two different development scenarios which are summarized below: A. Development within the existing structure in accordance with a deed restriction. B. Demolition and development to Highest and Best Use. Realty Advisors 3 Mr. Matthew Welter April 15, 2022 Unless otherwise stated in this report, the existence of hazardous substances, including without limitation, asbestos, polychlorinated biphenyls (PCB's), petroleum leakage, or agricultural chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention of nor did the appraiser become aware of such during the appraiser's inspection. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to test such substances or conditions. If the presence of such substances, such as asbestos, urea formaldehyde foam insulation, radon gas, or other hazardous substances or environmental conditions may affect the value of the property, the value estimated is predicated on the assumption that there is no such condition on or in the property, or in such proximity thereto that it would cause a loss in value. No responsibility is assumed for any such conditions or for any expertise or engineering knowledge required to discover them. Based on the facts, assumptions, and procedures outlined in this report, it is estimated that the Market Value of the owner's marketable interest as described herein, as of the date of appraisal, is: Final Market Value Estimate A. Development within the existing structure with a deed restriction “As Is”……….…...$230,000 B. Demolition and development to Highest and Best Use “As Is”……….……………….$870,000 C. Loss in Market Due to Deed Restriction…………………………………….…..………$640,000 This appraisal is subject to the assumptions and limiting conditions contained herein. This letter is part of an inseparable from the appraisal report that follows. Sincerely, James F. Fisher, MAI MA Cert. Gen #325 Realty Advisors 4 Executive Summary Property Location: 10 Hawley Street Northampton, MA Purpose of Appraisal: Estimate loss in market value due to restriction. Intended Use of Appraisal: Internal Decision Making for Community Preservation Application Date of Appraisal: March 9, 2022 Land Area: .35 Acres Property Type: Existing Church proposed for multifamily rental housing. Zoning: CB – Central Business Highest and Best Use: See Report Owner of Record: O’Connell Hawley LLC Final Market Value Estimate A. Development within the existing structure with a deed restriction “As Is”………….$230,000 B. Demolition and development to Highest and Best Use “As Is”……….…………..…$870,000 C. Loss in Market Due to Deed Restriction…………………………………….……..….$640,000 Realty Advisors 5 TABLE OF CONTENTS INTRODUCTION Page Subject Photos ....................................................... 6 Scope …………………………………………………. 15 Identification of the Property................................... 15 Purpose of the Analysis......................................... 15 Date of Valuation .................................................... 15 Legal Description/History ....................................... 16 DESCRIPTIVE SECTION Improvements and Site Data .................................. 16 Area Analysis .......................................................... 19 Neighborhood Data ................................................ 19 Regional Map…………………………………………. 24 Neighborhood Map …………………………………... 26 ANALYSIS Analysis of Market Rents......................................... 34 Analysis and Conclusion......................................... 49 Comparable Rentals................................................ 55 Certification ............................................................. 50 ASSUMPTIONS AND LIMITING CONDITIONS..... 52 ADDENDA............................................................... 54 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 6 1. Northerly view of the subject property. 2. Easterly view of the subject property. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 7 3. Northeasterly view of the subject property. 4. Westerly view of the subject property. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 8 5. Northeasterly view of subject property and neighboring townhomes. 6. Interior View. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 9 7. Interior view of entrance. 8. View from balcony. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 10 9. View of boiler. 10. Interior View. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 11 11. View of rose stained glass window. 12. Westerly View of Hawley Street. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 12 13. Southerly view of the subject property and Hawley Street. 14. Westerly view of Hawley Street. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 13 15. Easterly of subject property from Hawley Street 16. View of the adjacent Hawley Manor townhouse development. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 14 Identification of the Property The property being appraised is located at 10 Hawley Street, Northampton, MA. The subject site contains .35+/- acres of land which is improved with a single story wood frame church with brick exterior built in 1912. The property is further identified in the City of Northampton Assessors office as Map 32A, Lot 171. The property also identified as Parcel B on Plan Book 248 Page 42 of the Hampshire County Land records. Intended Use of the Appraisal The intended user of this report is O’Connell Development Group. Intended User of the Appraisal The intended use of this report is for submission to the City of Northampton for a Community Preservation submission. Personal Property Included in Appraisal Personal property is not included in the market value estimate. Date of Valuation The effective date for the Market Value estimate is March 9, 2022. Legal Description / History The subject property is currently owned by O’Connell Hawley LLC The subject property was transferred from The Roman Catholic Bishop of Springfield to O’Connell Hawley LLC on March 17, 2020 for a consideration amount of $1,260,000. The transfer is recorded in the Hampshire County Land Records in Book 13567; Page 55. The transfer included land and improvements located adjacent properties located north and south of the subject property. A copy of the aforementioned deed is included in the Addenda of this report. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 15 Legal Description / History (continued) Deed Restriction – (Preservation Restriction Agreement) - A copy of the proposed deed restriction agreement for the subject property has not been prepared. I have considered a comparable agreement between the City of Northampton and the Hampshire Council of Governments recorded in book 13255 on Page 163 of the Hampshire County Registry of deeds. The agreement pertains to the Old Hampshire County Courthouse. The documents specifically describe the property in detail and includes guidelines for maintenance, alteration, approvals, inspections, legal remedies, assignment, validity and severability, recording, standards for review, insurance, etc. The agreement further clarifies methods for painting, windows and doors, roofing, landscaping, HVAC, and plumbing. The city may require a review of plans for substantial alterations. A copy of the comparable restriction agreement is included in the Addenda. Definition of Market Value According to the Appraisal Regulations of Federal Banking Agencies, "Market Value" means 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 is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated; 2. Both parties are well informed or well advised, and acting in what they consider their own best interests; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in terms of cash in US dollars or in terms of financial arrangements comparable thereto; and 5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sale concessions granted by anyone associated with the sale. Source: Office of the Comptroller of the Currency under 12 CFR, Part 34, Subpart C -- Appraisals, 34.42 Definitions [f]. Interest Appraised The property right being appraised is the Fee Simple Estate. Fee Simple is defined as the fee simple interest with the rights of use and occupancy conveyed to others. Fee Simple is defined as "Absolute ownership unencumbered by any other interest or estate; subject only to the governmental powers of taxation, eminent domain, police power, and escheat. Leased Fee Interest is defined as The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires. Source: Dictionary of Real Estate Appraisal, 2nd Ed., The Appraisal Institute, Chicago, IL 2015 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 16 Scope of Work The scope of our engagement included the following: ▪ An inspection of the subject property was completed on March 9, 2022 by Mr. Fisher to determine the property's physical and functional characteristics. Mr. Fisher inspected exterior grounds and the interior. ▪ Mr. Fisher researched comparable apartment rental activity in the subject and competing locations. The research included analysis of data from Internet sites, local newspapers and rental publications, town records, owners and managers of local apartment properties. ▪ The City of Northampton Assessor's, Zoning office records were relied on for information regarding the subject property, comparable sales, and general market data. The Institute of Real Estate Management (IREM), Department of Employment and Training, the final 2000 and 2010 Federal Census Reports, as well as the local chamber of commerce were relied upon for community, neighborhood, employment, and market data. ▪ Preparation of a narrative appraisal report providing a description of the property appraised; an explanation of the valuation methodology; and employing the Income Approach to Value. Marketing Period and Reasonable Exposure Marketing Period - The reasonable marketing time for a property is the most probable amount of time necessary to expose and actively market a property and achieve a sale price consistent with the final value estimate and on terms that are consistent with the definition of market value. The Marketing Period begins as of the date of appraisal and the estimated time frame is based on the assumption that an appropriate and competent marketing program will be implemented by a professional brokerage/marketing agent. Qualified marketing personnel and aggressive marketing techniques should be employed. Lack of attention to this critical aspect may yield less than favorable results. The marketing time for an apartment property is likely to be shorter than for other forms of commercial real estate as there are few properties on the market, limited new construction of new apartment buildings, high occupancy rates and consistent tenant demand for units. The likelihood of the subject property being financed is considered average as lenders currently view apartment properties more attractive risks than other property types. It is our opinion that the subject property could most likely be marketed within a 12-month period. Reasonable Exposure - Exposure time is similar to Marketing Period except that it is assumed to have occurred prior to the appraiser's Market Value estimate. A reasonable exposure time for the subject property, if marketed to the appropriate investment community and priced consistent with our value estimate would be 12 months. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 17 Summary of Site and Building Characteristics The following is a summary of the proposed unit-mix within the existing church structure: Topography: Generally level and slightly above street grade elevation. Parking: No on-site parking. Metered on street parking on Hawley Street and Philips Street. Utilities: Town water and sewer Improvements: Single story wood frame church with brick exterior. Year Built: 1912 Foundation: Concrete foundation. A portion of the basement beneath the altar is improved with a concrete slab. The majority of the building has a dirt crawl space which makes renovation labor intensive. Building Exterior: Brick Roof: Gable roof Floors: One floor proposed for complete replacement including structural floor system. Windows: Long rectangular windows. Stained glass windows have been removed. Utilities Unit #Description Rms Brms Baths GLA Units Incl. in Rent 1 TH-Loft North Corner 3 1 1.5 822 sf 1 None 2 TH-Loft East Corner 3 1 1.5 747 sf 1 None 3 TH-Loft East Side w/ Circular 3 1 1.5 914 sf 1 None 4 TH-Loft East Corner 3 1 1.5 821 sf 1 None 5 1 Story Front Accessible 4 2 2 1251 sf 1 None 6 TH-Loft North Corner 3 1 1.5 914 sf 1 None 7 TH-Loft East Corner 3 1 1.5 913 sf 1 None 8 TH-Loft East Side w/ Circular 3 1 1.5 748 sf 1 None 9 TH-Loft East Corner 3 1 1.5 1160 sf 1 None 10 2 Upper Story Front 4 2 2.5 1728 sf 1 None 10018 10 Wtd Ave GLA 1002 Common Hall - 1st Floor 727 sf Parcel Size 0.35 acre Units 10 Units per Acre 28 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 18 Summary of Site and Building Characteristics (continued) The following is a summary of features for the proposed rental units: HVAC: A new gas fire hot air heating and air conditional unit with be installed as part of rehabilitation. Hot Water: New individual systems. Hot water will be paid by tenants. Electric: Circuit breaker panels in each unit Electric will be paid by tenants Utilities: Gas: To be paid by tenants. Electric: To be paid by tenants. Water/Sewer: To be paid by tenants. Kitchens: Electric stove / range with hood, refrigerators. Dishwashers. Garbage disposals. (Only in handicap accessible units) New wood cabinets Sold surface kitchen counters Baths: Units will have 1.5 or 2 bathrooms. Interior Finish: Average quality finish with painted walls; sprayed ceilings, wall to wall carpeting or vinyl floors in the living room and dining areas; vinyl tile kitchens and baths. Common Areas: Common hallway on first floor. Laundry: Washer / Dryer units in each unit. Contact: Matthew Welter of O’Connell Development Group Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 19 Summary of Site and Building Characteristics (continued) The subject property is identified as Parcel B on the following plan: Survey / Site Plan Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 20 Proposed Floor Plans Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 21 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 22 Community Data Summary The City of Northampton is located in the central part of Western Massachusetts and Hampshire County. It is bordered to the east by the Connecticut River and the Town of Hadley, to the south by the Town of Easthampton, to the west by the Town of Westhampton and to the north by the Towns of Hatfield and Williamsburg. The city is comprised of approximately 35.62 square miles and has a 1990 population density of 822.26 persons per square mile. Northampton is the only incorporated city in Hampshire County and is the seat of county government. Northampton has a well-developed central business district centered at the intersection of Routes 5 and 9. The industrial village of Florence is located to the northwest with the suburban Leeds section further northwest along Route 9. Land to the south and west of town becomes more rural. Northampton is best known as the home of Smith College, one of the nation’s top women’s colleges which is located near the center of town. The college adds museums and other cultural facilities to the amenities offered by the town and exerts a strong influence on downtown retail, restaurants and nightlife. Considered by many to be the cultural center of the Connecticut Valley region, the town's restaurants, shops and nightclubs attract regular patrons on a year-round basis. The variety of goods available in downtown Northampton rivals that of area shopping malls and exceeds that of the much larger core cities. The following chart summarizes the salient features: Population 2010 Growth 2000-2010 Unemployment November 2020 Median Household Income 2017 Northampton Amherst Belchertown Easthampton Hadley South Hadley Westhampton Williamsburg Hampshire County 28,549 37,819 14,649 16,053 5,250 17,514 1,607 2,482 158,080 -1.5% 8.4% 13.0% 0.4% 9.5% 1.8% 9.5% 2.3% 3.8% 5.3% 5.1% 5.9% 5.8% 8.0% 5.5% 6.2% 7.5% 5.6% $61,662 $59,020 $59,364 $66,642 $76,474 $68,844 $88,624 $69,688 $67,989 Northampton experienced a decline in population increase between 2000 and 2010. Median Household income in Northampton is below the county median. The unemployment rate for the city and region have declined over the past year. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 23 Community Data (continued) Northampton, although quite small as cities go, is a varied and cosmopolitan community with a densely developed retail business center, blue collar neighborhoods and suburban and rural areas. The dominant influence in the city and the surrounding area are Smith College and the other area colleges and universities with their considerable economic and social impacts. Three of the schools are located in nearby Amherst, including The University of Massachusetts, Amherst College and Hampshire College. Mount Holyoke College is located in South Hadley and Smith College is located in the center of Northampton. These institutions are the major employers in the area, and their resources are a draw for both businesses and resident commuters from the Springfield Area. The center of Northampton has a high concentration of retail businesses and restaurants which focus on students but in the process also attract regional patronage. Northampton continues to be a desirable retail location. The business center of town has grown in popularity over the years and has expanded and experienced increases in values. The downtown area was initially popularized as a center for local merchants, crafts people, and artists. From this beginning, other businesses have located here and have thrived. The area is regionally known for its restaurants and night-life. A major advantage of this area is the lack of crime and the positive influence of the colleges. At the present time, retail space along Main Street and some the adjoining streets are in high demand with rent levels being the highest in Western Massachusetts. Vacancies are rare and if one becomes available, the marketing time is very brief. Due to the success of locally owned businesses, national chains and franchises have now targeted this area for a location. Transportation The City of Northampton is situated approximately 90 miles west of Boston, 20 miles north of Springfield and 150 miles northeast of New York City. Air transportation is available from the Northampton Municipal Airport and from Bradley International Airport, which is located approximately 40 miles to the south in Windsor Locks, Connecticut. Interstate Route 91, which runs north/south, offers access in three locations within the city. This limited access highway is the major connector with the City of Springfield and the State of Connecticut to the south and with the city of Greenfield and the state of Vermont to the north. I- 91 also intersects with Route 90 (Massachusetts Turnpike) approximately 10 miles south in Holyoke. Route 90 is the major east/west toll road in the state and accesses the City of Boston to the east and the City of Pittsfield and the State of New York to the west. Other highways traversing Northampton include Routes 5, 9, 10 and 66. Bus transportation is provided by the PVTA, which services the surrounding towns. Regional service is provided by Peter Pan Bus Lines which has a terminal located in downtown Northampton. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 24 Regional Map Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 25 Neighborhood Description The subject property is located in Downtown Northampton. The adjacent property to the north is the Hawley Manor Townhouse Condominium Development. This development consists of high quality townhouse units with ground floor garages. Asking prices in this development range from $750,000 to $850,000. The adjacent property to the north is a single-family residence. The southerly side of Philips Street is a paved parking lot formerly used by the Saint John Cantius Church. This property is reportedly proposed for multi-family residential use in the future. The property is located two parcels south of properties with frontage on Bridge Street at the east end of the historic central business district. Bridge Street connects the central business to the Calvin Coolidge Bridge over the Connecticut River and to points west including Hadley and Amherst. The Northampton Post Office is located just north of the subject property on Bridge Street. Hawley Street is separated from the core of the central business district by a rail line. An underpass exists just north of the subject property on Bridge Street which becomes Main Street. Main Street (Route 9) is a densely developed retail corridor with a mix of local and national owned businesses. Pleasant Street (Route 5) cross Main Street .25 miles west of the subject property. Further north on North Pleasant Street development includes a greater number of national tenants with surface parking. Further west, development density declines north of the Smith College Campus. The Village Hill neighborhood is a recently developed mixed use community construction on the former Northampton State Hospital Grounds. Village Hill is a 126-acre mixed use development that includes multiple development phases of a variety of residential housing types primarily constructed by Wright Builders and Kuhn Riddle Architects creating the first and largest sustainable neighborhood in Massachusetts. The site is the former location of the Northampton State Hospital and with development led by MassDevelopment and other community partners. Commercial buildings improvements in this newly developed neighborhood includes an office/engineering buildings occupied by ServiceNet and L3 KEO. The neighborhood includes new and renovated structures occupied by a wide range of users including Massachusetts Department of Mental Health, The Columns at Rockwell Place and Christopher Heights of Northampton, Hilltop Apartments and The Villages at Hospital Hill. Interstate 91 is located .50 miles east of the neighborhood. Bridge Street is State Route 9. Route 5 is generally parallel to I-91. Route 10 connects to Easthampton and points south. Route 66 connects to lower density communities to the west. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 26 Neighborhood Map Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 27 Zoning and Use Restrictions The subject property is located in a Central Business zoning district. I have assumed the proposed 10-unit development is legally permitted under both development scenarios. Zoning Map Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 28 Assessment and Tax Data The following is a summary of the assessment and tax burden calculation for the subject property: Assessment and Tax Data - As Is Address 10 Hawley Street, Northampton, MA Map/Block/ Lot 32A 171 Fiscal Year 2022 Assessment Land Assessment $0 Building Assessment $450,000 Other Improvements $0 Total $450,000 Tax Rate $17.37 per thousand Total Tax Burden $7,816.50 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 29 Highest and Best Use Real estate is valued in terms of its Highest and Best Use. Highest and Best Use is the use that supports the highest present value of the improved property or vacant land as of the date of appraisal. The highest and best use of a property estimated by the appraiser gives consideration to all possible uses of the real estate tested against the following examination criteria: 1. Physically Possible: A site's utilization is restricted by its physical characteristics. These characteristics include, but are not limited to: size, shape, terrain, soil composition, and accessibility to public utilities. 2. Legally Permissible: The uses of a site are also restricted by various building codes, environmental regulations, deed or ground lease restrictions, etc. 3. Financially Feasible: Assuming a use satisfies the above conditions, it is then tested for economic viability. That is, can the proposed use provide a reasonable financial return to warrant its development? 4. Maximally Productive: This last criterion is satisfied when it is shown that the proposed use is shown to be economically superior to otherwise feasible alternatives, in effect enabling the developer of a property conforming to such use to pay the highest possible price for the underlying land. The highest and best use of an improved property is normally analyzed under two scenarios: (1) as if vacant, and (2) as if improved. The analysis presented in this report is similar to an expanded study of the highest and best use of the subject property. Based on the analysis in this report, the highest and best use of the property is demolition of the existing church and improvement with a multi-family residential development. As there is the potential to receive public funding if a historic preservation restriction agreement is executed, the highest and best use could change if there is a sufficient public funding to justify developing the property using the existing church structure. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 30 The Appraisal Process In order to develop an estimate of market value for the subject property, the following techniques have been considered: ▪ The Cost Approach considers the current cost of replacing a property less depreciation from three sources: physical deterioration, functional obsolescence, and external obsolescence. A summation of the market value of land, assumed vacant, and the depreciated replacement cost of the improvements provides an indication of the total value of the property. ▪ The Sales Comparison Approach (Market) derives an estimate of value by comparing the subject property to sales of similar properties in the same or competing areas. This approach is used to indicate the value from transactions between informed buyers and sellers in the market. ▪ The Income Approach is based on either an analysis of the subject property's estimated net operating income (capitalized analysis) or estimated cash flow (DCF analysis). The net operating income is capitalized to arrive at an indication of value from the standpoint of an investment. This method, direct capitalization, is suited only for situations in which income is expected to change at a steady rate. The DCF analysis is well suited for situations where income is expected to change from year to year, because of lease expirations or absorption. This approach measures the present worth of anticipated future benefits (cash flow) derived from a property. The Cost Approach is not used in this report. The subject building has an older date of construction. Due to lower reliability of calculating reproduction costs and accrued depreciation, this approach is less reliable and not relied on by the typical purchaser. The Direct Sales Comparison Approach can be reasonably applied if there are adequate sales of properties similar to the subject from which a defensible and convincing indication of value can be derived. This approach is based on the principle of substitution, whereby value tends to be set at the cost of acquiring an equally desirable substitute property, assuming no costly delay in making the substitution. Since two properties are seldom identical, it is necessary to make adjustments for significant dissimilarities such as size, age, location, date of sale, terms of sale, condition, special features, common area, and seller/buyer motivation. A survey of comparable apartment rents was conducted for this assignment. The market rent conclusions are used within the Income Approach section of this report. The Income Approach to Value is used within this report. The subject property and similar properties are typically purchased by investors for their ability to produce a net operating income. This approach is the most applicable method of analyzing the subject property under two development scenarios as summarized below: A. Estimated Market Value assuming substantial rehabilitation of the existing structure. B. Estimated Market Value assuming demolition and development with a new multi-family development. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 31 The Income Approach Introduction The Income Approach to value is based upon the principal of anticipation. This approach considers the motivations of typical investors in the market whose purchase activities tend to set a property's value in terms of the income benefits expected to be derived from ownership. Depending on property type, leasing structure, occupancy levels and market conditions, either one or both common methodologies are employed. Direct Capitalization is employed to capitalize a single stabilized net annual income into value using a capitalization rate that reflects both return of and on similar investments adjusted for appropriate market or property specific risks. Discounted Cash Flow values a property's income potential over time by applying a market derived discount rate to a projected income stream plus final sales proceeds at the end of an appropriate holding period. DIRECT CAPITALIZATION is most appropriate when a property's income is fixed, stable or predictable with regard to future inflation as well as consistent with similar properties. It can also be applied to properties that are owner occupied when it is possible to impute such a stabilized income based on similar properties available for rent. The basic steps involved in Direct Capitalization are: ▪ Develop an estimate of Potential Gross Income (PGI). ▪ Deduct an estimate of vacancy and collection loss. ▪ Estimate and deduct applicable operating expenses. ▪ Capitalize the resulting Net Operating Income (NOI) into value. The key valuation parameter used is the overall capitalization rate. The selection of the appropriate rate is central to the valuation process. The overall rate must reflect risk factors from all sources, and contemporary financial returns available to alternative investments. When available, the best source of an appropriate capitalization rate is actual market transactions for similar properties. However, even when sales are plentiful, reliable income data may not be. The most common methodology employed by appraisers is the mortgage equity technique which recognizes that most transactions are financed and that the availability of financing is a basic support to real estate transactions. In this technique, risk rated mortgage and equity yield requirements are blended and adjusted for amortization and anticipated changes in property value over a typical holding period. The resulting overall capitalization rate is divided into the Net Operating Income estimate to produce the value estimate. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 32 The Income Approach (continued) DISCOUNTED CASH FLOW is most appropriate for properties with uneven income streams, properties with substantial vacancies that are anticipated to be cured over time, development properties in lease-up or construction phase, and multi-tenant properties with varying lease expirations, rent levels. The basic steps involved in Discounted Cash Flow are: ▪ Develop an estimate of Net Operating Income over an assumed holding period. ▪ Deduct an estimate of capital items including commissions and tenant improvements. ▪ Select an appropriate discount rate, reversion cap rate and sales costs. ▪ Discount the Net Cash Flow or income stream into value. As in Direct Capitalization, the key to the Discounted Cash Flow (DCF) valuation process is the selection of the various parameters. Here the appraiser’s task is made somewhat more difficult as there are more parameters to deal with, each capable of skewing the final valuation in various directions. The appraiser must be able to blend each element of the cash flow projection and application of rates in such a way as a typical investor would evaluate a similar property for purchase. All elements must be consistent and reasonable. In addition to evaluating near and long-term risks and building these factors into cash flow and reversion discount rates, and selecting the appropriate reversion cap rate, the appraiser must also estimate appropriate inflation rates to be used for income and expense projections. While the Direct Capitalization implicitly includes all these factors, Discounted Cash flow analysis enables, (and requires), the appraiser to quantify all of these factors. The choice of whether to employ Direct Capitalization versus Discounted Cash Flow is based on property type and anticipated income pattern and most importantly, the analysis methodology most likely to be applied by buyers/investors in the relevant marketplace. Direct Capitalization is considered most appropriate for this analysis. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 33 A. The Income Approach – Substantial Rehabilitation of Structure (continued) Analysis of Rental Income – Rehabilitated Development The Gross Potential Income (GPI) refers to the total income from all possible sources from a property as if fully occupied at actual or market rents. The estimate of Gross Potential Income for the subject property is based on the actual contract rent agreement in place. The monthly rent is then annualized for use in determining the Gross Potential Income for the subject property. Rental Market Overview Revenue for the subject property currently comes from one source; the rental of the apartments. I have surveyed the local market in order to estimate market rents for this category. The demand for apartments in Northampton and surrounding communities is stable. Most properties are experiencing very low vacancy rates. Many developments have increased rental rates during the past 12 months. Rent incentives are not being offered in the subject market due to the low vacancy and high demand. On the following page, I have estimated the market rent for the typical unit in the subject development assuming rehabilitation of the existing church structure. The estimate is based on a comprehensive survey of the Northampton market for the most comparable developments. Supporting data from the comparable development is located in the Addenda section of this report. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 34 Rent Comparability Grid Unit Type Subject St. John Cantius Data 10 Hawley Street on Northampton, MA Subject A. Rents Charged Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj 1 $ Last Rent / Restricted?$2,000 $2,000 $2,100 $1,925 $2,100 $1,830 2 Date Last Leased (mo/yr)Mar-22 Apr-22 Apr-22 Mar-22 Mar-22 Apr-22 3 Rent Concessions N N N N N N 4 Occupancy for Unit Type 95%100%100%100%99%95% 5 Effective Rent & Rent/ sq. ft $2,000 2.85 $2,000 2.76 $2,100 2.60 $1,925 3.22 $2,100 3.14 $1,830 2.60 B. Design, Location, Condition Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj 6 Structure / Stories WU/2 WU/2 WU/2 WU/2 E/3 ($5)WU/3 WU/4 7 Yr. Built/Yr. Renovated 1912/2022 1972 / 2015 $75 1930 / 2015 $75 1991 / 2021 $50 2021 $50 1920 / 2021 $50 2022 $50 8 Condition /Street Appeal G+G $50 G $50 G $50 G+$50 G+$25 G+$50 9 Neighborhood G G $25 G $25 G $25 G $50 G G $50 10 Same Market? Miles to Subj Y/1 Y/2 Y/2 Y/7 Y/0 Y/4 C. Unit Equipment/ Amenities Data Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj 11 # Bedrooms 1 1 1 2 ($50)1 1 1 12 # Baths 1.5 1 $25 1 $25 1.5 1 $25 1 $25 1 $25 13 Unit Interior Sq. Ft.914 702 $106 725 $95 809 $53 598 $158 669 $123 705 $105 14 Balcony/ Patio N/N N/Y ($10)N/Y ($10)N/Y ($10)N/N N/N N/N 15 AC: Central/ Wall CAC W $10 CAC W $10 CAC W $10 CAC 16 Range/ refrigerator R/F R/F R/F R/F R/F R/F R/F 17 Microwave/ Dishwasher Y/Y Y/Y Y/Y N/Y $5 Y/Y N/Y $10 N/Y $5 18 Washer/Dryer W/D W/D W/D W/D $0 W/D LR LR 19 Floor Coverings W/C C/V W W/C W C/V V 20 Window Coverings B B B B B B B 21 Cable/ Satellite/Internet N C/I C/I C/I C/I C/I C/I 22 Special Features N N N N N N N 23 D Site Equipment/ Amenities Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj 24 Parking ( $ Fee)N Lot/$0 ($10)Lot/$0 ($10)Lot/$0 ($10)Lot/$0 ($10)N Lot/$0 ($10) 25 Extra Storage N N N N N N Y ($5) 26 Security N N N N Y ($5)N N 27 Clubhouse/ Meeting Rooms N/N N/N N/N N/N N/N N/N Y/N ($5) 28 Pool/Exercise Rm/Rec Areas N/N/N N/N/Y ($5)N/N/N N/N/Y ($5)N/N/N N/N/N N/Y/Y ($15) 29 Business Ctr / Nbhd Netwk N/N N/N N/N N/N N/N N/N N/N 30 Service Coordination N N N N N N N 31 Non-shelter Services N N N N N N N 32 Neighborhood Networks N N N N N N N E.Utilities Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj 33 Heat (in rent?/ type)N N/Electric N/Electric N/Electric N/Electic N/Gas N/Electic 34 Cooling (in rent?/ type)N N/Electric N/Electric N/Electric N/Electic N/Electic N/Electic 35 Cooking (in rent?/ type)N N/Electric N/Electric N/Electric N/Electic N/Gas N/Electic 36 Hot Water (in rent?/ type)N N/Electric N/Electric N/Electric N/Electic N/Electic N/Electic 37 Other Electric N N N N N N N 38 Cold Water/ Sewer N Y/Y ($5)Y/Y ($5)Y/Y ($5)Y/Y ($5)Y/Y ($5)Y/Y ($5) 39 Trash /Recycling Y/Y Y/Y Y/Y Y/Y Y/Y Y/Y Y/Y F. Adjustments Recap Pos Neg Pos Neg Pos Neg Pos Neg Pos Neg Pos Neg 40 # Adjustments B to D 6 3 5 2 6 4 5 3 6 0 6 4 41 Sum Adjustments B to D $291 ($25)$270 ($20)$193 ($75)$333 ($20)$243 $0 $285 ($35) 42 Sum Utility Adjustments $0 ($5)$0 ($5)$0 ($5)$0 ($5)$0 ($5)$0 ($5) Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross 43 Net/ Gross Adjmts B to E $261 $321 $245 $295 $113 $273 $308 $358 $238 $248 $245 $325 G.Adjusted & Market Rents Adj. Rent Adj. Rent Adj. Rent Adj. Rent Adj. Rent Adj. Rent 44 Adjusted Rent (5+ 43)$2,261 $2,245 $2,213 $2,233 $2,338 $2,075 45 Adj Rent/Last rent 113%112%105%116%111%113% 46 Estimated Market Rent $2,125 $2.32 4/15/22 Appraiser's Signature Date Northampton, MA Seventy Amherst, MA 70 University Drive Northampton, MA Northampton, MA 32 Masonic #1 Northampton, MA Comp #1 73 Barrett Street Hathaway Farms Round Hill Grove St Apt 48 Round Hill Road 266 Grove St #7 Masonic St Apartments Comp #5 Comp #11 Ferry Street Apartments 5 Ferry Street Easthampton, MA Church RehabOne-Bedroom Comp #2 Comp #3 Comp #9 Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 35 A. The Income Approach - Rehabilitation of Existing Structure (continued) Analysis of Rental Income (continued) Analysis and Conclusion – One Bedroom (Rehabilitation of Existing Structure) A Rent Comparability Grid was prepared for the unit type. The primary selection criteria are location, building type, unit type and building condition. The following is a summary of the mean, median and range of rents used in the adjustment grid: Conclusion of Market Rent – The following is a summary of the adjusted average, median and range: All adjusted rents were considered in our final opinion of market rent. The Estimated Market Rent selected is within the range developed on the Rent Comparability Grid. The appraiser concluded the monthly market rent as indicated below: 1-Bedroom Unit (Rehabilitation)……........ $2,125 $1,993 Average $2,000 Median $1,830 Low Range To $2,100 High Range Summary of Unadjusted Market Rents $2,227 Average $2,239 Median $2,075 Low Range To $2,338 High Range Market Rents Summary of Adjusted Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 36 A. The Income Approach - Rehabilitation of Existing Structure (continued) Analysis of Rental Income (continued) Gross Potential Income - Based the previous analysis of the typical unit, I have estimated the market rent for the subject property as summarized below: The annual gross potential income is estimated at $257,400. Vacancy and Collection Loss - I have used a stabilized vacancy and collection loss rate of 3% in the analysis. Estimated Operating Expenses On the following page is a summary of comparable income and expense data. The far-right columns are the appraiser’s estimated income and expense estimate. Summary of Unit Mix and Estimated Gross Potential Income - Rehab. Utilities Est . Market Est. Market Gross Potential Gross Potential Unit #Description Rms Brms Baths GLA Units Incl. in Rent Rent/Mo.Rent/sf Annual Income Annual per sf 1 TH-Loft North Corner 3 1 1.5 822 sf 1 None $2,075 $2.52 $24,900 $30.29 2 TH-Loft East Corner 3 1 1.5 747 sf 1 None $2,050 $2.74 $24,600 $32.93 3 TH-Loft East Side w/ Circular 3 1 1.5 914 sf 1 None $2,125 $2.32 $25,500 $27.90 4 TH-Loft East Corner 3 1 1.5 821 sf 1 None $2,075 $2.53 $24,900 $30.33 5 1 Story Front Accessible 4 2 2 1251 sf 1 None $2,250 $1.80 $27,000 $21.58 6 TH-Loft North Corner 3 1 1.5 914 sf 1 None $2,125 $2.32 $25,500 $27.90 7 TH-Loft East Corner 3 1 1.5 913 sf 1 None $2,125 $2.33 $25,500 $27.93 8 TH-Loft East Side w/ Circular 3 1 1.5 748 sf 1 None $2,050 $2.74 $24,600 $32.89 9 TH-Loft East Corner 3 1 1.5 1160 sf 1 None $2,175 $1.88 $26,100 $22.50 10 2 Upper Story Front 4 2 2.5 1728 sf 1 None $2,400 $1.39 $28,800 $16.67 10018 10 $21,450 $257,400 $25.69 Wtd Ave GLA 1002 Common Hall - 1st Floor 727 sf Parcel Size 0.35 acre Units 10 Units per Acre 28 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 37 Comparable Operating Expenses and Appraiser's Estimated Stabilized Net Operating Income Church Rehabilitation IREM Appraiser's Pro-forma Built Built Amherst, MA Ware, MA Northampton 91 Athol, MA Westfield, MA Northampton, MA South Hadley, MA 1965-79 1980-89 Year Built 1830 Year Built 1959 Year Built 1900 Year Built 2007 Year Built 2022 Sample 2113Sample Size 475 6 Units 12 Units 6 Units 12 Units 10 Units 6 Units 60 Units 10 Units Median Median $ /Unit $ /Unit Annual $ /Unit Annual $ /Unit Annual $ /Unit Annual $ /Unit Annual $ /Unit Annual $ /Unit Annual $ /Unit Annual $ /Unit Rental Income Revenue $17,959 $18,252 $74,917 $12,486 $114,600 $9,550 $95,904 $15,984 $132,817 $11,068 $104,400 $10,440 $73,300 $12,217 $825,416 $13,757 $257,400 $25,740 Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Income $0 $0 $74,917 $12,486 $114,600 $9,550 $95,904 $15,984 $132,817 $11,068 $104,400 $10,440 $73,300 $12,217 $825,416 $13,757 $257,400 $25,740 Vacancies Vacancies $0 $0 $0 0.00%$0 $0 0.00%$0 $0 0.00%$0 $0 0.00%$0 $0 0.00%$0 $0 0.00%$0 -$34,461 -4.17%-$574 -$7,722 3.00%-$772 Total Vacancy $0 $0 $0 0.00%$0 $0 0.00%$0 $0 0.00%$0 $0 0.00%$0 $0 0.00%$0 $0 0.00%$0 -$34,461 -4.17%-$574 -$7,722 -3.00%-$772 Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Effective Gross Income $0 $0 $74,917 $12,486 $114,600 $9,550 $95,904 $15,984 $132,817 $11,068 $104,400 $10,440 $73,300 $12,217 $790,955 $13,183 $249,678 $24,968 Expenses Management Fee $932 $851 $0 $0 $5,444 $454 $0 $0 $0 $0 $0 $0 $0 $0 $55,367 $923 $12,484 5.00%$1,248 Admin Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $101,000 $1,683 $0 $0 Electric $0 $0 $1,002 $167 $0 $0 $0 $0 $0 $0 $1,836 $184 $0 $0 $0 $0 $0 $0 Other Utilities (Common)$0 $0 $0 $0 $0 $0 $1,844 $307 $3,296 $275 $0 $0 $0 $0 $0 $0 $2,500 $250 Natural Gas (landlord paid)$0 $0 $3,345 $558 $0 $0 $0 $0 $0 $0 $0 $0 $8,568 $1,428 $122,000 $2,033 $0 $0 Garbage and Trash Rem.$0 $0 $0 $0 $0 $0 $1,566 $261 $2,693 $224 $2,160 $216 $2,400 $400 $0 $0 $2,500 $250 Water and Sewer $0 $0 $1,348 $225 $6,200 $517 $3,293 $549 $0 $0 $2,992 $299 $0 $0 $0 $0 $0 $0 Repairs & Maintenance: $570 $636 $7,780 $1,297 $11,300 $942 $5,098 $850 $13,002 $1,084 $4,130 $413 $6,880 $1,147 $137,000 $2,283 $7,500 $750 Snow Removal and Grounds $559 $537 $1,240 $207 $0 $0 $1,210 $202 $0 $0 $0 $0 $0 $0 $0 $0 $2,000 $200 Insurance $296 $369 $1,722 $287 $4,500 $375 $5,512 $919 $6,993 $583 $4,885 $489 $3,899 $650 $35,000 $583 $6,500 $650 Real Estate Taxes $692 $1,298 $10,295 $1,716 $0 $0 $19,138 $3,190 $25,004 $2,084 $9,652 $965 $9,668 $1,611 $50,000 $833 $43,425 $4,343 Reserves *$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Expenses $9,128 $10,137 $26,732 $4,455 $27,444 $2,287 $37,661 $6,277 $50,988 $4,249 $25,655 $2,566 $31,415 $5,236 $500,367 $8,339 $76,909 $7,691 Net Operating Income $7,787 $7,821 $48,185 $8,031 $87,156 $7,263 $58,243 $9,707 $81,829 $6,819 $78,745 $7,875 $41,885 $6,981 $290,588 $4,843 $172,769 $17,277 Expense Ratio 54.50%50.60%35.68%23.95%39.27%38.39%24.57%42.86%63.26%30.80% Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 38 A. The Income Approach - Rehabilitation of Existing Structure (continued) Estimated Operating Expenses The following data highlights trends for conventional apartments: Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 39 A. The Income Approach - Rehabilitation of Existing Structure (continued) VALUATION A Direct Capitalization Technique is used in this report as the income stream is estimated to be relatively stable in the future. Rate Selection The following table summarizes a major investor survey conducted by Korpacz Real Estate Investor Survey for the Second Quarter, 2021 and reported in the Third Quarter, 2021 edition of Valuation Insights depicting yields, overall cap rates and terminal cap growth rates for real estate investments nationwide. INVESTOR SURVEY Yield OAR Term OAR Apartment Investment Parameters 5.00% - 10.00% 6.69% 3.50% - 7.00% 4.96% 4.00% - 7.00% 5.31% The above investment parameters apply to investment properties nationwide. These are typically "Top Tier" properties with appeal to national investors. Market Survey Data - The above rate is tested for reasonableness against published surveys. The chart below is a summary of capitalization rate survey published by Realty Rates.com. Based on the above data, capitalization rates for apartments are lower than rates for other property sectors. The calculated rate of 6.32% is below the RealtyRates survey and above published rates reported by Korpacz which reports an average rate of 4.96%. Year End Apartments Retail 2021 7.52%8.61% 2020 7.41%8.49% 2019 7.92%8.93% 2018 8.42%9.38% 2017 8.16%9.19% 2016 8.13%9.27% 2015 8.15%9.15% 2014 8.24%9.26%9.52% 9.15% 9.64% 9.42% 9.48% 9.40% RealtyRates.com Investor Survey Current and Historical Cap Rate Indices Composite Indx Weighted 8.65% 8.76% Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 40 A. The Income Approach - Rehabilitation of Existing Structure (continued) Rate Selection (continued) Market Derived Capitalization Rates- I have considered going in capitalizations for recent property sales and active listings in the region. The supporting data is retained in our appraisal file. Based on the data, a capitalization rate ranging from 6.00% to 6.50% is reasonable and appropriate for the subject property. I have selected an equity capitalization rate of 8.00% as most reflecting the risk profile of this property as an alternative investment to bonds and other real estate investments. The rate is predictably higher than the average shown for the national market. The rate is slightly above average for high yield corporate bonds, which are at the high risk end of the bond market and must be adjusted to reflect the relative liquidity of the investment type as well as the security and predictability of the income stream which includes a higher degree of business risk when compared to a typical apartment property. Mortgage – I have estimated a mortgage rate of the 4.25% in the analysis. Direct Capitalization Parameters - I have used the mortgage equity technique in building up a Capitalization rate using a and 80% loan to value ratio, a 4.25% mortgage rate, 8% equity capitalization rate. Based on the above inputs, the capitalization rate is 6.32% (rounded). Rate Selection – After considering the above data; along with the risk and durability of the contract rents; the anticipated lower than typical net operating income growth potential and other that influence capitalization rates, the following is the selected capitalization rate: Capitalization Rate 6.32% Lump Sum Deduction for Capital Expenditures- The focus of this analysis is the “as is” market value of the subject property. Therefore, a capital expenditure deduction from the “as if built and stabilized” analysis is necessary as the property would need to be constructed and leased to stabilized occupancy. I have considered the cost to construct similar properties along with data provided by the CoreLogic/Swift Estimator data service which provides cost data throughout the United States and generates local estimates using local cost inputs. I have used a deduction of $250,000 per apartment unit in my analysis. On the following page is a summary of the stabilized net operating income estimate; cap rate derivation and selection; and the market value calculation via the Income Approach. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 41 A. The Income Approach - Rehabilitation of Existing Structure (continued) 10 Hawley Street, Northampton, MA As Rehabilitated Total GLA 10,018 sf Units 10 Appraisers Estimated Income and Expenses Annual Annual Gross Income Units Annual Monthly per sf per unit Rental Income 10 $257,400 $21,450 $25.69 $25,740 Other Income .$0 $0 $0.00 $0 Total Revenue 10 $257,400 $21,450 $25.69 $25,740 Stabilized Vacancy/Collection Loss 3.00%-$7,722 -$644 -$0.77 -$772 Effective Gross Income $249,678 $20,807 $24.92 $24,968 Operating Expenses Total Management/Admin 5.00% $12,484 $1,040 $1.25 $1,248 Other Utilities (Common)$2,500 $208 $0.25 $250 Trash Removal $2,500 $208 $0.25 $250 Repairs and Maintenance $7,500 $625 $0.75 $750 Grounds and Snow $2,000 $167 $0.20 $200 Insurance $6,500 $542 $0.65 $650 Real Estate Taxes $43,425 $3,619 $4.33 $4,343 Reserves for Replacements 0.00%$0 $0 $0.00 $0 Total Expenses 30.80%$76,909 $6,409 $7.68 $7,691 NET OPERATING INCOME [NOI]$172,769 $17.25 $17,277 CAPITALIZATION RATE DETERMINATION LOAN RATIO:80.00% EQUITY RATIO:20.00% INTEREST RATE:4.25% EQUITY CAP RATE:8.00% HOLDING PERIOD:10 YEARS LOAN PERIOD:30 YEARS 80%X 0.05903 =4.723%LTV % X Annual Constant 20%X 8.00%=1.600%LTV % X Equity Cap Rate OVERALL RATE 6.323%6.32% rd VALUATION:10 Hawley Street, Northampton, MA CAPITALIZATION ANNUAL OVERALL PROCESS:INCOME /RATE =VALUE per unit per sf $172,769 /0.0632 =$2,732,554 $273,255 $273 Cost to Build and Stabilize -$2,500,000 -$250,000 -$250 $232,554 "As Is" Estimated Market Value via Income Approach $230,000 $23,000 $23 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 42 B. Demolition and New Construction Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 43 B. The Income Approach – Demolition and New Construction (continued) Analysis of with Demolition and New Construction In this section of the report, the property, is examined under its highest and best use which is demolition and new construction. Although the unit count and unit sizes and features could change under new construction, I have used the same unit count and unit mix in this analysis. The report format is similar to Section A. Therefore, I have stated or summarized key points rather than using a longer explanation of the appraisal process. Analysis and Conclusion – One Bedroom (New Construction) A Rent Comparability Grid was prepared for the typical unit with new construction as shown on the following page: Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 44 Rent Comparability Grid Unit Type Subject St. John Cantius Data 10 Hawley Street on Northampton, MA Subject A. Rents Charged Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj 1 $ Last Rent / Restricted?$2,000 $2,000 $2,100 $1,925 $2,100 $1,830 2 Date Last Leased (mo/yr)Mar-22 Apr-22 Apr-22 Mar-22 Mar-22 Apr-22 3 Rent Concessions N N N N N N 4 Occupancy for Unit Type 95%100%100%100%99%95% 5 Effective Rent & Rent/ sq. ft $2,000 2.85 $2,000 2.76 $2,100 2.60 $1,925 3.22 $2,100 3.14 $1,830 2.60 B. Design, Location, Condition Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj 6 Structure / Stories WU/2 WU/2 WU/2 WU/2 E/3 ($5)WU/3 WU/4 7 Yr. Built/Yr. Renovated 2022 1972 / 2015 $100 1930 / 2015 $100 1991 / 2021 $100 2021 $100 1920 / 2021 $100 2022 $100 8 Condition /Street Appeal G+G $75 G $75 G $75 G+$75 G+$50 G+$75 9 Neighborhood G G $25 G $25 G $25 G $50 G G $50 10 Same Market? Miles to Subj Y/1 Y/2 Y/2 Y/7 Y/0 Y/4 $50 C. Unit Equipment/ Amenities Data Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj 11 # Bedrooms 1 1 1 2 ($50)1 1 1 12 # Baths 1.5 1 $25 1 $25 1.5 1 $25 1 $25 1 $25 13 Unit Interior Sq. Ft.914 702 $106 725 $95 809 $53 598 $158 669 $123 705 $105 14 Balcony/ Patio Y/N N/Y N/Y N/Y N/N $10 N/N $10 N/N $10 15 AC: Central/ Wall CAC W $10 CAC W $10 CAC W $10 CAC 16 Range/ refrigerator R/F R/F R/F R/F R/F R/F R/F 17 Microwave/ Dishwasher Y/Y Y/Y Y/Y N/Y $5 Y/Y N/Y $10 N/Y $5 18 Washer/Dryer W/D W/D W/D W/D $0 W/D LR LR 19 Floor Coverings W/C C/V W W/C W C/V V 20 Window Coverings B B B B B B B 21 Cable/ Satellite/Internet N C/I C/I C/I C/I C/I C/I 22 Special Features N N N N N N N 23 D Site Equipment/ Amenities Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj 24 Parking ( $ Fee)N Lot/$0 ($10)Lot/$0 ($10)Lot/$0 ($10)Lot/$0 ($10)N Lot/$0 ($10) 25 Extra Storage N N N N N N Y ($5) 26 Security N N N N Y ($5)N N 27 Clubhouse/ Meeting Rooms N/N N/N N/N N/N N/N N/N Y/N ($5) 28 Pool/Exercise Rm/Rec Areas N/N/N N/N/Y ($5)N/N/N N/N/Y ($5)N/N/N N/N/N N/Y/Y ($15) 29 Business Ctr / Nbhd Netwk N/N N/N N/N N/N N/N N/N N/N 30 Service Coordination N N N N N N N 31 Non-shelter Services N N N N N N N 32 Neighborhood Networks N N N N N N N E.Utilities Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj 33 Heat (in rent?/ type)N N/Electric N/Electric N/Electric N/Electic N/Gas N/Electic 34 Cooling (in rent?/ type)N N/Electric N/Electric N/Electric N/Electic N/Electic N/Electic 35 Cooking (in rent?/ type)N N/Electric N/Electric N/Electric N/Electic N/Gas N/Electic 36 Hot Water (in rent?/ type)N N/Electric N/Electric N/Electric N/Electic N/Electic N/Electic 37 Other Electric N N N N N N N 38 Cold Water/ Sewer N Y/Y ($5)Y/Y ($5)Y/Y ($5)Y/Y ($5)Y/Y ($5)Y/Y ($5) 39 Trash /Recycling Y/Y Y/Y Y/Y Y/Y Y/Y Y/Y Y/Y F. Adjustments Recap Pos Neg Pos Neg Pos Neg Pos Neg Pos Neg Pos Neg 40 # Adjustments B to D 6 2 5 1 6 3 6 3 7 0 8 4 41 Sum Adjustments B to D $341 ($15)$320 ($10)$268 ($65)$418 ($20)$328 $0 $420 ($35) 42 Sum Utility Adjustments $0 ($5)$0 ($5)$0 ($5)$0 ($5)$0 ($5)$0 ($5) Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross 43 Net/ Gross Adjmts B to E $321 $361 $305 $335 $198 $338 $393 $443 $323 $333 $380 $460 G.Adjusted & Market Rents Adj. Rent Adj. Rent Adj. Rent Adj. Rent Adj. Rent Adj. Rent 44 Adjusted Rent (5+ 43)$2,321 $2,305 $2,298 $2,318 $2,423 $2,210 45 Adj Rent/Last rent 116%115%109%120%115%121% 46 Estimated Market Rent $2,325 $2.54 4/15/22 Appraiser's Signature Date One-Bedroom Comp #2 Comp #3 Comp #9 New Construction Comp #11 Ferry Street Apartments 5 Ferry Street Easthampton, MA Comp #1 73 Barrett Street Hathaway Farms Round Hill Grove St Apt 48 Round Hill Road 266 Grove St #7 Masonic St Apartments Comp #5 Northampton, MA Seventy Amherst, MA 70 University Drive Northampton, MA Northampton, MA 32 Masonic #1 Northampton, MA Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Attached are explanations of : a. why & how each adjustment was made b. how market rent Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 45 B. The Income Approach – Demolition and New Construction (continued) Analysis and Conclusion – One Bedroom (New Construction) The primary selection criteria are location, building type, unit type and building condition. The following is a summary of the mean, median and range of rents used in the adjustment grid: Conclusion of Market Rent – The following is a summary of the adjusted average, median and range: All adjusted rents were considered in our final opinion of market rent. The Estimated Market Rent selected is within the range developed on the Rent Comparability Grid. The appraiser concluded the monthly market rent as indicated below: 1-Bedroom Unit (New Construction)…....... $2,325 $1,993 Average $2,000 Median $1,830 Low Range To $2,100 High Range Summary of Unadjusted Market Rents $2,312 Average $2,311 Median $2,210 Low Range To $2,423 High Range Market Rents Summary of Adjusted Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 46 B. The Income Approach – Demolition and New Construction (continued) Analysis and Conclusion – One Bedroom (New Construction) The following is the estimated market rent with new construction: In this “New Construction” analysis most of the operating expenses and input parameters remain the same. As both development scenarios would include new mechanical systems, I have not made any changes to utility expenses or repairs/maintenance. I have summarized the area where changes are made below: Market Rent- Newly constructed buildings have higher rents when compared to renovated buildings. Market rents are approximately 9% higher in this section of the report. Real Estate Taxes- I have considered the assessment rate per unit for comparable apartments in Northampton along with the projected market value in this report. I have increased property taxes by 8% in the new construction section of the report. Summary of Unit Mix and Estimated Gross Potential Income - New Construction Utilities Est . Market Est. Market Gross Potential Gross Potential Unit #Description Rms Brms Baths GLA Units Incl. in Rent Rent/Mo.Rent/sf Annual Income Annual per sf 1 TH-Loft North Corner 3 1 1.5 822 sf 1 None $2,275 $2.77 $27,300 $33.21 2 TH-Loft East Corner 3 1 1.5 747 sf 1 None $2,250 $3.01 $27,000 $36.14 3 TH-Loft East Side w/ Circular 3 1 1.5 914 sf 1 None $2,325 $2.54 $27,900 $30.53 4 TH-Loft East Corner 3 1 1.5 821 sf 1 None $2,275 $2.77 $27,300 $33.25 5 1 Story Front Accessible 4 2 2 1251 sf 1 None $2,450 $1.96 $29,400 $23.50 6 TH-Loft North Corner 3 1 1.5 914 sf 1 None $2,325 $2.54 $27,900 $30.53 7 TH-Loft East Corner 3 1 1.5 913 sf 1 None $2,325 $2.55 $27,900 $30.56 8 TH-Loft East Side w/ Circular 3 1 1.5 748 sf 1 None $2,250 $3.01 $27,000 $36.10 9 TH-Loft East Corner 3 1 1.5 1160 sf 1 None $2,375 $2.05 $28,500 $24.57 10 2 Upper Story Front 4 2 2.5 1728 sf 1 None $2,600 $1.50 $31,200 $18.06 10018 10 $23,450 $281,400 $28.09 Wtd Ave GLA 1002 Common Hall - 1st Floor 727 sf Parcel Size 0.35 acre Units 10 Units per Acre 28 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 47 B. The Income Approach – Demolition and New Construction (continued) Analysis of with Demolition and New Construction Equity Cap Rate - Financial inputs remain the same in this analysis, except for the equity cap rate which is lower. As the subject building will be in the new construction class of real estate investments, there will likely be greater appeal to regional investors. In addition, there are differences in the remaining economic life, functional utility and overall are appeal associated with new construction. An equity capitalization rate of 6% is used in this analysis, resulting in a lower overall capitalization rate. Demolition Cost- A lump sum deduction for demolition costs is made in the analysis. The estimate is based on a quote by Associated Building Wreckers in 2020 for $113,750 and was updated for inflation. A deduction of $120,000 is made in the analysis Lump Sum Deduction for Capital Expenditures- The cost of new construction is lower when compared to rehabilitation. While there would be some savings associated with the exterior building shell, the need for repointing, roof repair, window costs and other costs eliminate this potential benefit. In addition, the existing floor system will require complete replacement. Many experienced sub-contractors are more cautious or are not interested in rehabilitation projects due to labor cost uncertainties associated with these generally more complicated projects. A deduction of $225,000 per unit is made in the analysis. The market value estimate is summarized on the following page: Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 48 10 Hawley Street, Northampton, MA Demo and New Construction Total GLA 10,018 sf Units 10 Appraisers Estimated Income and Expenses Annual Annual Gross Income Units Annual Monthly per sf per unit Rental Income 10 $281,400 $23,450 $28.09 $28,140 Other Income .$0 $0 $0.00 $0 Total Revenue 10 $281,400 $23,450 $28.09 $28,140 Stabilized Vacancy/Collection Loss 3.00%-$8,442 -$704 -$0.84 -$844 Effective Gross Income $272,958 $22,747 $27.25 $27,296 Operating Expenses Total Management/Admin 5.00% $13,648 $1,137 $1.36 $1,365 Other Utilities (Common)$2,500 $208 $0.25 $250 Trash Removal $2,500 $208 $0.25 $250 Repairs and Maintenance $7,500 $625 $0.75 $750 Grounds and Snow $1,500 $125 $0.15 $150 Insurance $6,500 $542 $0.65 $650 Real Estate Taxes $46,899 $3,908 $4.68 $4,690 Reserves for Replacements 0.00%$0 $0 $0.00 $0 Total Expenses 29.69%$81,047 $6,754 $8.09 $8,105 NET OPERATING INCOME [NOI]$191,911 $19.16 $19,191 CAPITALIZATION RATE DETERMINATION LOAN RATIO:80.00% EQUITY RATIO:20.00% INTEREST RATE:4.25% EQUITY CAP RATE:6.00% HOLDING PERIOD:10 YEARS LOAN PERIOD:30 YEARS 80%X 0.05903 =4.723%LTV % X Annual Constant 20%X 6.00%=1.200%LTV % X Equity Cap Rate OVERALL RATE 5.923%5.92% rd VALUATION:10 Hawley Street, Northampton, MA CAPITALIZATION ANNUAL OVERALL PROCESS:INCOME /RATE =VALUE per unit per sf $191,911 /0.0592 =$3,240,306 $324,031 $323 Demolition Cost -$120,000 Cost to Build and Stabilize -$2,250,000 -$225,000 -$225 $870,306 "As Is" Estimated Market Value via Income Approach $870,000 $87,000 $87 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 49 B. The Income Approach – Demolition and New Construction (continued) Final Estimate of Value The value of the subject property as indicated by the applicable approaches is: VALUE INDICATION SUMMARY Cost Approach to Value Direct Sales Comparison Approach Income Approach A. Rehabilitation B. New Construction n/a n/a $ 230,000 $ 870,000 The Cost Approach is not used in this report. Elements of the Cost Approach were considered in the estimated capital expenditure section of the Income Approach. The Direct Sales Comparison Approach is not developed in this report. This approach is relied in the market rent section of the Income Approach. The Income Approach to Value is the most reliable method for a proposed apartment development and is the approach used by investors in this property type. The quality and quantity of rental data is good as there is sufficient rental data in the subject market. Based on my analysis as presented herein, the estimated value of the subject property as the date appraisal is estimated to be: Final Market Value Estimate A. Development within the existing structure with a deed restriction “As Is”……………...$230,000 B. Demolition and development to Highest and Best Use “As Is”……….…………………$870,000 C. Loss in Market Due to Deed Restriction…………………………………….…..……….. $640,000 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 50 Certification I certify that to the best of my knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3. I 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. 4. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. 5. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 6. My engagement in this assignment was not contingent upon developing or reporting predetermined results. 7. My 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. 8. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 9. I, James F. Fisher, MAI, MA Cert. Gen. Lic.#325, exp. 11/12/2023 has made a personal inspection of the property that is the subject of this report. 10. No one provided significant real property appraisal assistance to the person signing this certification. 11. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 12. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 51 Certification 13. As of the date of this report, James F. Fisher, MAI has completed the continuing education program of the Appraisal Institute. By reason of our investigation and by virtue of our experience and knowledge of the subject marketplace, it is my opinion that the estimated management services applicable to the subject property is as follows on the date of analysis: Final Market Value Estimate A. Development within the existing structure with a deed restriction “As Is”……….….....$230,000 B. Demolition and development to Highest and Best Use “As Is”……….…………………$870,000 C. Loss in Market Due to Deed Restriction…………………………………….…...……..…$640,000 ________________________________ James F. Fisher, MAI Certified General Appraiser MA Lic. #325 Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 52 Assumptions and Limiting Conditions 1. The legal description furnished is assumed to be correct and no responsibility is assumed for matters legal in character nor is any opinion rendered as to title which is assumed to be marketable. 2. The maps, plans, and exhibits included in this report are for illustration only to help the reader visualize the property. They should not be considered as surveys or relied upon for any other purpose. No appraiser responsibility is assumed in connection therewith. 3. This appraiser, by reason of this report, is not required to give testimony or be in attendance in any court or before any governmental body with reference to the property in question unless arrangements have been previously made. 4. No engineering survey has been furnished to the appraiser, and no responsibility is assumed for engineering matters, mechanical or structural. Good mechanical and structural condition is assumed to exist. 5. Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention of nor did the appraiser become aware of such during the appraiser's inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however, is not qualified to test such substances or conditions. If the presence of such substances, such as asbestos, urea formaldehyde foam insulation, radon gas, or other hazardous substances or environmental conditions, may affect the value of the property, the value estimated is predicated on the assumptions that there is no such condition on or in the property or in such proximity thereto that it would cause a loss in value. No responsibility is assumed for any such conditions or for any expertise or engineering knowledge required to discover them. 6. No soil survey has been furnished, and it is assumed that no surface or subsurface contaminants, pollutants, or discharge is present. The appraiser reserves the right to alter, amend, revise, or rescind any of the value opinions based upon any subsequent environmental impact studies, research, or investigation. 7. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws, unless noncompliance is stated and considered in this report. Real Estate Appraisal – St. John Cantius, 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 53 Assumptions and Limiting Conditions (continued) 8. No soil borings or analyses have been made of the subject. It is assumed that soil conditions are adequate to support standard construction consistent with the highest and best use as stated in this report. 9. It is assumed that all required licenses, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based, unless noncompliance is stated and considered in this report. 10. The individual values estimated for the various components of the subject property are valid only when taken in the context of this report and are invalid if considered individually or as components in connection with any other appraisal. 11. Financial projection and/or estimates are based on information and assumptions outlined in this report. The actual achievement of financial projections may be affected by fluctuating economic conditions and other factors not generally predictable in advance. Therefore, actual results achieved may vary substantially from our projection. Our analysis is not intended as an accurate future forecast, rather it is offered as an example of the type of analysis that an arm’s length purchaser of the subject property would consider. 12. The date of value to which the opinions expressed in this report is set forth in a letter of transmittal. The appraiser assumes no responsibility for subsequent economic or physical factors which may affect the opinions herein stated. Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 54 Addenda Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 55 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 1 Location: Hathaway Farms 73 Barrett Street Northampton, MA Hampshire County Type: Renovated Year Built / Renovated: 1972 / 2015 Total Units: 100 +/- Vacancy Rate: 5% Parking: Lot Amenities: Patio, W/D in unit, common recreational area Additional Charges: None Utilities Included: Heat: No Cooking: No Electricity: No Hot Water: No Comments: Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 100 +/- 702 $2,000 Y N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 56 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 2 Location: Round Hill Apartments 48 Round Hill Road Northampton, MA Hampshire County Type: Renovated Year Built / Renovated: 1930 / 2015 Total Units: 10 +/- Vacancy Rate: 0% Parking: Lot Amenities: Patio, W/D in unit, Central A/C Additional Charges: None Utilities Included: Heat: No Cooking: No Electricity: No Hot Water: No Comments: Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 10 +/- 725 $2,000 Y N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 57 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 3 Location: Grove Street Apartments 266 Grove Street #7 Northampton, MA Hampshire County Type: Renovated Year Built / Renovated: 1991 / 2021 Total Units: 7 +/- Vacancy Rate: 0% Parking: Lot Amenities: Patio, recreation area Additional Charges: None Utilities Included: Heat: No Cooking: No Electricity: No Hot Water: No Comments: Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1.5 Bth 7 +/- 809 $2,100 Y N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 58 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 4 Location: Prospect Street Apartments 77 Prospect Street Northampton, MA Hampshire County Type: Renovated Year Built / Renovated: 1932 / 2021 Total Units: 3 +/- Vacancy Rate: 0% Parking: Lot Amenities: Balcony, recreation area Additional Charges: None Utilities Included: Heat: Yes Cooking: No Electricity: No Hot Water: Yes Comments: Below average condition / street appeal Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 3 +/- 720 $1,660 N N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 59 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 5 Location: Seventy Apartments 70 University Drive Amherst, MA Hampshire County Type: New Year Built / Renovated: 2021 Total Units: 30 +/- Vacancy Rate: 0% Parking: Lot Amenities: Central A/C Additional Charges: None Utilities Included: Heat: No Cooking: No Electricity: No Hot Water: No Comments: New construction Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 30 +/- 598 $1,925 Y N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 60 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 6 Location: Seventy Apartments 70 University Drive Amherst, MA Hampshire County Type: New Year Built / Renovated: 2021 Total Units: 30 +/- Vacancy Rate: 0% Parking: Lot Amenities: Central A/C Additional Charges: None Utilities Included: Heat: No Cooking: No Electricity: No Hot Water: No Comments: New construction Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 2 Brm/1 Bth 30 +/- 858 $2,450 N N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 61 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 7 Location: One University Drive South 1 University Drive South Amherst, MA Hampshire County Type: New Year Built / Renovated: 2022 Total Units: 40 +/- Vacancy Rate: 0% Parking: Lot Amenities: Central A/C Additional Charges: None Utilities Included: Heat: No Cooking: No Electricity: No Hot Water: No Comments: New construction Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 40 +/- 577 $1,850 N N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 62 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 8 Location: Masonic Street Apartments 32 Masonic St #3 Northampton, MA Hampshire County Type: Renovated Year Built / Renovated: 1920 / 2021 Total Units: 20 +/- Vacancy Rate: 1% Parking: Street Amenities: Additional Charges: None Utilities Included: Heat: No Cooking: No Electricity: No Hot Water: No Comments: Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 20 +/- 625 $1,850 N N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 63 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 9 Location: Masonic Street Apartments 32 Masonic St #1 Northampton, MA Hampshire County Type: Renovated Year Built / Renovated: 1920 / 2021 Total Units: 20 +/- Vacancy Rate: 1% Parking: Street Amenities: Additional Charges: None Utilities Included: Heat: No Cooking: No Electricity: No Hot Water: No Comments: Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 20 +/- 669 $2,100 Y N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 64 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 10 Location: Salem Place Apartments 34 Salem Place #34 Amherst, MA Hampshire County Type: Renovated Year Built / Renovated: 1999 / 2008 Total Units: 40 +/- Vacancy Rate: 5% Parking: Lot Amenities: Additional Charges: None Utilities Included: Heat: No Cooking: No Electricity: No Hot Water: No Comments: Below average condition & street appeal Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 40 +/- 677 $1,590 N N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 65 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 11 Location: Ferry Street Apartments 5 Ferry Street Easthampton, MA Hampshire County Type: New Year Built / Renovated: 2022 Total Units: 50 +/- Vacancy Rate: 5% Parking: Lot Amenities: Central A/C, exercise room, recreation room Additional Charges: None Utilities Included: Heat: No Cooking: No Electricity: No Hot Water: No Comments: Brand new construction opening Sept. 2022 Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 50 +/- 705 $1,830 Y N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 66 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 12 Location: Laurel Ridge 348 Hatfield Street Northampton, MA Hampshire County Type: Renovated Year Built / Renovated: 1967 / 2008 Total Units: 50 +/- Vacancy Rate: 0% Parking: Lot Amenities: Additional Charges: None Utilities Included: Heat: Yes Cooking: No Electricity: No Hot Water: Yes Comments: Below average condition & street appeal. Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 50 +/- 700 $1,380 N N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 67 Survey of Comparable Market Rents (continued) COMPARABLE RENTAL NO. 13 Location: Hampton Court 20 Hampton Ave Northampton, MA Hampshire County Type: Renovated Year Built / Renovated: 1989 / 2020 Total Units: 50 +/- Vacancy Rate: 0% Parking: Lot Amenities: Elevator, Central A/C, clubhouse/meeting room Additional Charges: None Utilities Included: Heat: Yes Cooking: No Electricity: No Hot Water: Yes Comments: Below market rents. Date Info Verified: 4/2022 Unit Type # of Units SF Market Rent Used as Comp Rent Restriction 1 Brm/1 Bth 50 +/- 586 $1,300 N N Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 68 Appraiser Qualifications Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 69 Realty Advisors Commercial Real Estate Valuation 785 Williams St., #128 • Longmeadow, MA 01106 • Phone (413) 565-2220 • realtyadvisors-ma.com • jfish11@msn.com JAMES F. FISHER, MAI President - Realty Advisors BACKGROUND James F. Fisher, MAI founder of Realty Advisors is a native of Braintree, Massachusetts and a graduate of Babson College in Wellesley, Massachusetts. He began his appraisal career in 1985 as an independent contractor for Connecticut's largest commercial appraisal firm, Edward F. Heberger and Associates of Cheshire, Connecticut. This association continued until 1989 and formed a sound base for his independent appraisal firm venture. Mr. Fisher was awarded the SRPA (Senior Real Property Appraiser) designation from the Society of Real Estate Appraisers in 1987 and was awarded the MAI designation from the American Institute of Real Estate Appraisers in 1991. Mr. Fisher has completed over 2,000 appraisal assignments representing over half a billion dollars in assets throughout New England. He has experience in all commercial property categories, and specializes in complex analysis of income properties. He has also performed various analyses on non traditional property types including: hotels, motels, golf courses, avigation easements, land taking for highways and urban renewal, nursing homes, municipal airports, power centers, travel centers, restaurants, industrial parks, gas stations, mobile home parks, tennis clubs, skating rinks, auto dealerships, complex subdivisions, airport parking facilities, religious facilities, cooperative apartments, private boarding schools, plus a variety of property use conversion studies. Mr. Fisher is co-founder of MassComp Data, formed in 1993 as the first data base of commercial real estate transactions in Massachusetts. The product is now used as part of the Appraisal Institute’s National Commercial Real Estate Data Base. Worcester Superior Court, local housing courts, and has provided valuation services for land damages and right-of-way purposes. Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 70 Appraiser Qualifications (continued) Mr. Fisher has qualified as an expert in U.S. Bankruptcy Court, the Massachusetts Appellate Tax Board, Hampden County District Court, Berkshire County, Middlesex, and EDUCATION Babson College, Babson Park, Wellesley, Massachusetts Degrees: Bachelor of Science in Business Administration Concentration: Investments / Entrepreneurial Studies Appraisal Institute Courses: 1A - Real Estate Appraisal Principles (AIREA) 101 - Introduction to Appraising Real Property 102 - Applied Residential Property Valuation 201 - Principles of Income Property Valuation 202 - Applied Income Property Valuation SRPA - Demonstration Report-Income Property SRPA - Experience Credit Verification MAI - Comprehensive Examination Requirement MAI - Experience Credit Verification Completed numerous appraisal seminars including: Expert Witness Testimony Eminent Doman and Condemnation Single Tenant Distribution Centers Connecticut Appraisal Law Green Building Valuation IRWA- Easement Valuation New Technology for Appraisers Federal Housing Appraisal Process Hotel Valuation Narrative Report Writing Professional Practice The Small Residential Income Property DCF Analysis Appraisal and Fair Lending Federal Regulations and Appraisal Limited Appraisals and Reporting Options Real Estate and GIS High Tech Appraisal Office Eminent Domain & Condemnation Standards of Practice A & B Valuation of Detrimental Conditions Motel Valuation Revenue Forecasting Commercial Appraisal Clients Appraisal Operations USPAP Update GIS Applications Business Practice 420 Feasibility/Option Value Scope of Work Analyzing Distressed Real Estate Marshall Swift Cost Training Nursing Home Appraisal Business Practices and Ethics Real Estate Appraisal – St. John Cantius., 10 Hawley Street, Northampton, MA April 15, 2022 Realty Advisors 71 Appraiser Qualifications (continued) PROFESSIONAL AFFILIATIONS MAI – Designation of the Appraisal Institute – 1991-Present Recognized as being capable of conducting appraisals involving retail, commercial, industrial and numerous types of income generating properties by the largest independent association of appraisers in North America. Appraisal Institute Offices held: President Western Massachusetts Chapter 1993 First Vice President Western Massachusetts Chapter 1992 Admissions Chairman Western Massachusetts Chapter 1991-1992 Director Western Massachusetts Chapter 1991-1992 Real Estate Broker: Massachusetts #136512 Certified General RE Appraiser: Massachusetts # 325 Connecticut #1469 Vermont Realtor Associations: Member National Association of Realtors Mass. Association of Realtors Cape and Island Board of Realtors Other: Operations Board - Western United Pioneers Soccer Club - 1999-2016 Addenda