Securities and Exchange Commission v. Nadel et al

Filing 812

NOTICE by Burton W. Wiand Notice Of Filing Appraisals Of Receivership Real Property Located In Graham, Alamance County, North Carolina (Attachments: #1 Exhibit A - Jeffrey Skeahan Rite Aid Appraisal, #2 Exhibit B - Roscoe Shiplett Rite Aid Appraisal)(Cohen, Jonathan)

EXHIBIT B 

AN APPRAISAL OF REAL PROPERTY
IN A SUMMARY REPORT
RITE-AID
841 South Main Street
Graham, NC 27253

Landauer Job No.: 12-2686-027

PERTINENT DATES:
“As Is” Valuation Date:
Report Date:

March 30, 2012
April 4, 2012

PREPARED FOR:
Mr. Burton Wiand
Wiand Law
3000 Bayport Drive, Suite 600
Tampa, Fl 33607

PREPARED BY:
GRUBB & ELLIS LANDAUER VALUATION ADVISORY SERVICES, LLC
7621 Little Avenue, Suite 450
Charlotte, NC 28226

April 4, 2012

Mr. Burton Wiand
Wiand Law
3000 Bayport Drive, Suite 600
Tampa, Fl 33607

RE:

An Appraisal of Real Property
Rite-Aid
841 South Main Street
Graham, NC 27253

Landauer Job No.:

12-2686-027

Dear Mr. Burton Wiand,
At the request and authorization of Wiand Law , Grubb & Ellis Landauer Valuation Advisory Services
(“Landauer”) has prepared an appraisal to determine the market value of the referenced property and
presented our analysis in the following Summary Report. Based on the intended use and in consideration
of the subject’s physical and economic characteristics, we have prepared an appropriate scope of work
that will provide for a credible market value opinion.
The significant elements of the scope of work include: i) observation of the subject and its surroundings; ii)
collection, verification and analysis of sales and rental data; iii) analysis of the subject’s existing and/or
pro-forma economic operating characteristics; and iv) completion of the appropriate approaches to value.
The subject is a 13,824 square foot Rite Aid drug store. The improvements were constructed in 2004 and
are 100% leased as of the date of value. The site contains 1.18 acres and is zoned B-2 by the City of
Graham
Data, information, and calculations leading to the value conclusion(s) are incorporated in the report
following this letter. The report, in its entirety, including all assumptions and limiting conditions, is an
integral part of, and inseparable from, this letter.
Based on the analysis contained in the following report, and after considering the extraordinary
assumptions and hypothetical conditions listed in the Introduction section of this report, the opinion of
value for the subject is shown below. Your attention is directed to the extraordinary assumptions. This
report assumes that the buyer will renegotiate the current lease and the opinion of value contained in this
report is contingent upon that assumption.

Page 2
Mr. Burton Wiand

MARKET VALUE CONCLUSION
Appraisal Premise
Market Value "As Is"

Interest Appraised
Leased Fee

Date of Value
March 30, 2012

Value Conclusion
$2,600,000

The following appraisal sets forth the most pertinent data gathered, the techniques employed, and the
reasoning leading to the opinion of value. The analyses, opinions and conclusions were developed based
on, and this report has been prepared in conformance with, our interpretation of the guidelines and
recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), the
requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the
Appraisal Institute, the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA),
Title XI Regulations, the appraisal guidelines of Wiand Law , and all applicable local and state
requirements.
It has been a pleasure to assist you in this assignment. If you have any questions concerning the analysis,
or if Grubb & Ellis Landauer Valuation Advisory Services, LLC can be of further service, please contact us.
Respectfully submitted,
GRUBB & ELLIS LANDAUER VALUATION ADVISORY SERVICES, LLC
Digitally signed by Roscoe W. Shiplett
DN: cn=Roscoe W. Shiplett, o=Grubb
and Ellis Landauer, ou=Charlotte,
email=[e-mail],
c=US
Date: 2012.04.05 09:52:02 -04'00'

Roscoe Shiplett, MAI
Managing Director
Certified General
North Carolina – A1366; Exp. June 30, 2012
Phone: [phone]
E-Mail: [e-mail]

Digitally signed by Michael McCaskill
DN: cn=Michael McCaskill, o=Grubb and
Ellis Landauer, ou=Charlotte,
email=[e-mail],
c=US
Date: 2012.04.05 09:51:29 -04'00'

Michael McCaskill
Appraiser
Licensed Appraiser Trainee
North Carolina – T5427; Exp. June 30, 2012
Phone: [phone]
E-Mail: [e-mail]

© GRUBB & ELLIS LANDAUER VALUATION ADVISORY SERVICES, LLC
7621 LITTLE AVENUE, SUITE 450 | CHARLOTTE, NC 28226
PHONE: [phone] | W EB: WWW.GRUBB-ELLIS.COM

RITE-AID

CERTIFICATION

CERTIFICATION
We certify to the best of our 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 our personal, impartial and unbiased professional analyses, opinions, and conclusions.
3. We have no present or prospective interest in the property that is the subject of this report and have no
personal interest with respect to the parties involved.
4. We have no bias with respect to the property that is the subject of this report or to the parties involved with
this assignment.
5. Our engagement in this assignment was not contingent upon developing or reporting predetermined results.
6. 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.
7. 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.
8. Roscoe Shiplett, MAI and Michael McCaskill have made a personal inspection of the property that is the
subject of this report.
9. No one provided significant real property appraisal assistance to the persons signing this certification.
10. The appraiser(s) have performed no other services, as an appraiser or in any other capacity regarding the
subject property within the three year period immediately preceding the date of acceptance of this
assignment.
11. This appraisal assignment was not based upon a requested minimum valuation, a specific valuation, or the
approval of a loan.
12. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly
authorized representatives.
13. As of the date of this report, Roscoe W. Shiplett has completed the continuing education program of the
Appraisal Institute.

Digitally signed by Roscoe W. Shiplett
DN: cn=Roscoe W. Shiplett, o=Grubb and
Ellis Landauer, ou=Charlotte,
email=[e-mail],
c=US
Date: 2012.04.05 09:51:51 -04'00'

Roscoe Shiplett, MAI
Managing Director
Certified General Real Estate Appraiser
North Carolina – A1366; Exp. June 30, 2012

Digitally signed by Michael McCaskill
DN: cn=Michael McCaskill, o=Grubb
and Ellis Landauer, ou=Charlotte,
email=[e-mail], c=US
Date: 2012.04.05 09:51:39 -04'00'

Michael McCaskill
Appraiser
Licensed Appraiser Trainee
North Carolina – T5427; Exp. June 30, 2012

CERTIFICATION

RITE-AID

SUBJECT PHOTOGRAPHS

Front Entrance

Drive-thru

Rear of building

Side of building

Dumpsters

View east along West Crescent Square Drive

SUBJECT PHOTOGRAPHS

RITE-AID

SUBJECT PHOTOGRAPHS

View west along West Crescent Square Drive

Interior of Subject

AERIAL

SUBJECT PHOTOGRAPHS

RITE-AID

INTRODUCTION

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................................................................ 2
REGIONAL ANALYSIS ......................................................................................................................................................................6
NEIGHBORHOOD ANALYSIS ...........................................................................................................................................................9
PROPERTY DESCRIPTION ............................................................................................................................................................ 12
IMPROVEMENT DESCRIPTION ..................................................................................................................................................... 14
ASSESSMENT & TAXES ............................................................................................................................................................... 18
HIGHEST & BEST USE ................................................................................................................................................................... 19
APPRAISAL METHODOLOGY ........................................................................................................................................................ 20
SALES COMPARISON APPROACH ............................................................................................................................................... 21
INCOME CAPITALIZATION APPROACH ........................................................................................................................................ 25
RECONCILIATION........................................................................................................................................................................... 32
ASSUMPTIONS & LIMITING CONDITIONS .................................................................................................................................... 33

ADDENDA
ADDENDUM A:

DEFINITIONS

ADDENDUM B:

DEMOGRAPHICS

ADDENDUM C:

AGREEMENT OF PURCHASE AND SALE

ADDENDUM D:

COMPARABLE IMPROVED SALE SUMMARIES

ADDENDUM E:

COMPARABLE RENT SUMMARIES

ADDENDUM F:

CLIENT ENGAGEMENT LETTER

ADDENDUM G:

APPRAISER QUALIFICATIONS

Page | 2

RITE-AID

INTRODUCTION

APPRAISAL AND SCOPE OF WORK SUMMARY
General
Client
Client Contact
Intended User(s)
Intended Use(s)
Interest Appraised
Type of Value

Wiand Law
Mr. Burton Wiand
Wiand Law
Estimate The Market Value Of The Property
Leased Fee - See extraordinary assumption
Market Value (Defined below)

As defined by the Office of the Comptroller of the Currency under 12 CFR, Part 34, Sub-part C – Appraisals, 34.42 Definitions (g), market value
is defined as:
“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:
• 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.”
This definition of market value is generally accepted by agencies regulating financial institutions in the United States.

Report Date
Current Use of the Property
Highest & Best Use - As Vacant
Highest & Best Use - As Improved
Extent to Which Property Was Inspected
Personnel Inspecting the Property
Date(s) of Inspection
Type and Extent of Data Research

April 4, 2012
Drug Store
Hold For Future Retail Development
Retail Use
Complete Interior And Exterior; Photographs Taken
Roscoe Shiplett, MAI & Michael McCaskill
March 30, 2012
The appraiser(s) analyzed the micro and/or macro market
environments with respect to physical and economic factors
relevant to the valuation process; expanded this knowledge
through interviews with regional and/or local market participants,
and available published data and other various resources.
Market and comparable data has been analyzed and confirmed
with sources assumed to be reliable.
The appraiser(s) analyzed the property and market data
gathered through the use of accepted market-derived methods
and procedures, employed the appropriate approaches to value,
and correlated and reconciled the results into an estimate of
market value, as defined within the appraisal report.
None

Type and Extent of Analysis Applied

Significant Appraisal Assistance
Applicable
No

Comments
A cost approach was considered and was not developed
because there is inadequate data to develop a land value, and
the age of the improvements makes the depreciation difficult to
accurately measure. Additionally, market participants seldom
use a cost approach to base purchasing decisions for this
property type.

Sales Comparison Approach

Yes

Income Capitalization Approach

Yes

A sales/direct comparison approach was considered and was
developed because there is adequate data to develop a value
estimate and this approach reflects market behavior for this
property type.
An income capitalization approach was considered and was
developed because the subject is an income producing property
and there is adequate data to develop a value estimate with this
approach. For credit tenant leased single tenant properties this
is the most relevant indicator and the approach used most often
by buyers.

Additional Scope of Work Conditions
Cost Approach

Page | 3

RITE-AID

INTRODUCTION

LOCATION AND PHYSICAL PROPERTY CHARACTERISTICS
Property Name
Location
County
Metropolitan Statistical Area
Property Tax Parcel No.

Rite-Aid
841 South Main Street
Graham, NC 27253
Alamance
Burlington
144069

Physical Characteristics
Land Area (Gross)
Land Area (Net)
Surplus/Excess Land Area
No. of Buildings
Gross Building Area (Est.)
Gross Leaseable Area (GLA)
No. of Stories
Year Built
Year Renovated (if applicable)
Actual Age
Effective Age
Remaining Economic Life (est.)
Zoning
Property Condition

1.18 Ac. - 51,401 SF
1.18 Ac. - 51,401 SF
0.00 Ac. - 0 SF
1
13,824 SF
13,824 SF
1
2004
0
8 Years
8 Years
37 Years
B-2
Very Good

OWNERSHIP HISTORY AND TRANSACTION SUMMARY
Category
Current Ownership
Contract Status
Contract Price
Property Rights Conveyed

Indication
Scoop Real Estate, LP
Under Contract
$2,400,000
Leased fee

VALUATION SUMMARY
Valuation Data - As Is
Cost Approach
Sales Comparison Approach
Income Capitalization Approach

$ Nominal
$0
$2,281,000
$2,610,000

$/SF
$0.00
$165.00
$188.80

Reconciled Market Values
Reconciled Market Value - "As Is"
Est. Exposure Time

$ Nominal
$2,600,000
9 months

$/SF
$188.08

The property is currently under contract for $2,400,000 between Burton W. Wiand, Receiver for Scoop
Real Estate, LP and Trinet West, LLC. The contract price is similar to our estimate of market value and
therefore seems reasonable.

EXTRAORDINARY ASSUMPTIONS AND HYPOTHETICAL CONDITIONS
Extraordinary Assumptions
This appraisal employs the following extraordinary assumptions:

Page | 4

RITE-AID

INTRODUCTION

The property is currently under contract to a buyer that plans to renegotiate the contract lease. We have
assumed the lease will be renegotiated to current market rent for a Rite Aid. If this assumption proves to
be false, we reserve the right to amend our market value estimates.
The appraiser(s) were not provided with building plans and therefore relied upon the rent roll provided for
the net rentable area. We assume the data utilized is correct and reserves the right to amend the market
value estimates reported herein should it be determined otherwise.
Hypothetical Conditions
This appraisal employs the following hypothetical conditions: None
The use of Extraordinary Assumptions and/or Hypothetical Conditions may have affected assignment
results.

Page | 5

RITE-AID

REGIONAL ANALYSIS

REGIONAL ANALYSIS
The purpose of this chapter is to identify factual data regarding these forces and to analyze their impacts
on real property values - in particular, that of the subject property. Primary sources of data include
Moody’s Economy.com, Claritas, the U.S. Bureau of Census, U.S. Bureau of Labor, area Chambers of
Commerce, area city and county governments, and others, as noted. The map below depicts the subject’s
physical location within the Burlington region.

The following gives an overview of the MSA, as presented by Moody’s (Economy.com).
REGIONAL SUMMARY
Recent Performance
Labor market improvement is sustaining Burlington’s sluggish recovery. Renewed hiring in leisure and
hospitality services is compensating for modest job loss in goods production. The strength in public sector
payrolls is more noteworthy; local government was responsible for the largest contribution to payrolls over
the past three months. At 10.7%, the unemployment rate has edged down from its highest level of the year
Page | 6

RITE-AID

REGIONAL ANALYSIS

and is approaching the state average. Housing’s drag is lifting, as price declines are slowing and singlefamily permitting is rising from its recessionary trough. Elevated foreclosure inventories are still worrying,
however.
Manufacturing
Manufacturing will shift from a recovery support to a drag as textile and apparel manufacturers cut
production. National apparel output is expected to dip by 5%, while overall industrial production is
expected to rise 3% over the same time frame. Because of Burlington’s significant exposure to textile mill
and apparel manufacturing industries that will be squeezed over the next year, manufacturing employment
is expected to fall in the metro area. Moreover, clothing producers uprooting or closing operations is a real
threat, as evidenced by Gold Toe Moretz’s factory closure in 2008. This trend will play out in the long term.
Manufacturing will diminish as producers look for cheaper labor elsewhere and productivity gains weigh on
payrolls.
Healthcare services
Slow and steady growth in health services will supplement the short-term stability provided by Burlington’s
goods producers. Healthcare, which has remained stagnant this year in contrast to the national trend of
consistent growth, is poised for expansion. Labcorp, a clinical laboratory testing company, is in the
process of acquiring a DNA testing company, thereby expanding its footprint among the world’s medical
and diagnostic laboratories. Labcorp already provides a wide variety of testing services for hospitals,
laboratories, and pharmaceutical and biotechnology companies. Industry payrolls are expected to rise in
the coming years, as the firm will have to add to payrolls to meet increasing demand for these types of
activities. Moreover, above-average population growth will maintain healthcare’s position as a key driver
for the area’s economy in the long run.
Consumers
Healthy consumer balance sheets will enable Burlington’s recovery to proceed. House prices are down
less than 7% from their 2007 peak, which is roughly half of the statewide price decline and one-quarter of
that nationally. The relatively modest decline in house prices has preserved household equity, mitigating
the damage to household finances. The area’s personal bankruptcy rate is noticeably below the national
average. Relatively stable finances will allow residents to spend a greater percentage of their income. On
the downside, a lack of high-paying positions outside manufacturing and healthcare will limit income
growth, keeping per capita incomes depressed. Consumer spending will continue to grow, albeit slowly.

Page | 7

RITE-AID

REGIONAL ANALYSIS

BURLINGTON, NC
2007
4.6
1.4
61.1
3.3
5.1
6.6
144.8
1,441
0
118.8
736
2.7
276

2008
4.5
-2.6
60.6
-0.9
6.5
4.5
147.9
704
56
115.6
550
2.5
300

2009
4.2
-5.6
56.4
-6.9
11.9
-4.6
150.2
441
120
111.9
713
1.8
304

2010
Indicators
4.4 Gross metro product (C$B)
3.9
% change
55.5
Total employment (000)
-1.6
% change
11.4
Unemployment rate
3.5 Personal income growth
151.8
Population (000)
443
Single-family permits
404
Multifamily permits
110.7 Existing-home price ($ths)
532 Mortgage originations ($mil)
1.1
Net migration (000)
296
Personal bankruptcies

2011
4.5
3.4
55.6
0.2
10.7
4.2
153.1
474
171
109.8
428
0.8
412

2012
4.6
2.9
55.4
-0.4
12.2
3.7
154.8
698
50
111.4
323
1.2
463

2013
4.8
3.5
55.6
0.4
12.6
4.4
156.7
1,117
58
114.1
327
1.4
470

2014
5.0
3.4
56.8
2.2
11.2
6.0
158.7
1,316
54
121.7
387
1.5
470

2015
5.2
3.7
58.1
2.3
10.1
5.6
160.8
1,337
50
128.7
451
1.6
421

*Source: Moody's Economy.com Precis Metro Report
14.0

165.0

Conclusion
12.0

160.0

10.0
Burlington’s recovery remains on course, but it will proceed more slowly than the national recovery. To
155.0
some extent, manufacturing will provide near-term stability while the economy transitions into a service8.0
150.0
oriented economy driven by healthcare, but employment growth across industries will be weak. Instead,
6.0
Burlington will have to rely on its proximity to more dynamic areas for support. Longer term, strong
145.0
demographics, driven by rapid in-migration, will increase the tax base and support service growth.
4.0
Nevertheless, the metro area will struggle to attract new growth drivers to fill the void left by the secularly
140.0
2.0
declining manufacturing base, resulting in a below-average performance over the long term.
0.0

135.0
2007

2008

2009

2010

2011

Unemployment rate

2012

2013

2014

2015

Population (000)

Page | 8

RITE-AID

NEIGHBORHOOD ANALYSIS

NEIGHBORHOOD ANALYSIS
LOCATION
The subject is located on the west side of South Main Street, approximately .25 mile south of I-85. The
town is a mature suburban community that is proximate to the region’s highway, rail and air transportation
network. Graham is served by Interstates 40/85, NC Highway 54, NC Highway 87, NC Highway 49, and is
located less than four miles east of Burlington-Alamance Regional Airport. Nearby jurisdictions include
Burlington to the north, Alamance to the south, Mebane to the east and Elon to the west.
ACCESS
Access to and from the subject neighborhood is good. Graham is served by Interstates 40/85, NC
Highway 54, NC Highway 87, NC Highway 49. All of these highways provide convenient access to the
surrounding region. Main Street and Moore street are primary north-south thoroughfares, while Ivey Road
and Cheeks Lane are primary east-west roadways. The subject’s neighborhood is also traversed by
Interstate 40, which connects Wilmington to the Asheville and continues into Tennessee.
Access to the subject is via South Main Street and West Crescent Square Drive to the east and north
respectively.
The aerial and street maps below depict the subject’s physical location within the neighborhood.

Page | 9

RITE-AID

NEIGHBORHOOD ANALYSIS

LAND USE PATTERNS AND TRENDS
The dominant land use in the neighborhood is commercial with residential (single and multifamily) located
to the south and east. The subject property is along South Main Street approximately .25 mile south of I85. The subject’s immediate area is heavily developed and mature in nature. There is minimal vacant land
available for new construction.
IMMEDIATE SUBJECT SURROUNDINGS
The subject’s immediate surrounding area is considered to extend for about a block in any direction from
the subject. The following table summarizes our findings for this immediate surrounding area.

SURROUNDING LAND USES
Direction

Land Use

North

Shopping Center

South

Office

East

Strip Retail

West

Multifamily

DEMOGRAPHIC PROFILE
The following table summarizes the select neighborhood demographics in the one-, three- and five-mile
concentric circles from the subject as well as the metro area.

Page | 10

RITE-AID

NEIGHBORHOOD ANALYSIS

NEIGHBORHOOD DEMOGRAPHIC ANALYSIS
1-Mile Radius

3-Mile Radius

5-Mile Radius

Burlington MSA

Population 2000

4,148

29,276

66,636

130,800

Population 2012

4,239

31,730

72,013

154,498

Population 2017

4,292

32,655

74,459

163,778

% Growth 2000 - 2012

2.2%

8.4%

8.1%

18.1%

% Growth 2012 - 2017

1.3%

2.9%

3.4%

6.0%

Households 2000

1,693

11,826

27,094

51,584

Households 2012

1,821

12,640

29,245

61,458

Households 2017

1,843

13,016

30,400

65,479

% Growth 2000 - 2012

7.6%

6.9%

7.9%

19.1%

% Growth 2012 - 2017

1.2%

3.0%

3.9%

6.5%

Median Household Income 2012

$43,748

$37,313

$37,983

$42,084

Average Household Income 2012

$50,707

$45,211

$47,333

$52,827

2.3

2.5

2.4

2.4

% Owner-Occupied Housing

64.1%

62.8%

63.1%

68.7%

% Renter-Occupied Housing

35.9%

37.2%

36.9%

31.3%

Average Household Size

Source: Claritas

As presented, the one-, three-, and five-mile radii have experienced slower population and household
growth relative to the metro area as a whole. Income levels are relatively similar to the metro area as a
whole.
NEIGHBORHOOD SUMMARY
As shown above, the population within a one-, three- and five-mile radius has generally shown positive
trends since 2000. The subject neighborhood is described as a mature and stable residential community.
All told, the neighborhood should see nominal to declining growth typical of a mature community with
limited to no available land and the outlook for the neighborhood and subject—overall—appears to be
somewhat favorable in both the near and long term due to high barriers to entry.

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RITE-AID

PROPERTY DESCRIPTION

PROPERTY DESCRIPTION
SITE DESCRIPTION
The subject is located on the west side of South Main Street, approximately .25 mile south of I-85. The
following description is based on our property inspection, assessment records, property deeds, survey
dated 12/6/2004 prepared by Roberston & Associates and information provided by property management.
SITE SUMMARY
Land Data
Gross Site Area
Excess Site Area
Net Site Area
Source
Shape
Accessibility
Corner Lot
Visibility
Topography
Infrastructure
Primary Road
Primary Road Frontage
Secondary Road
Secondary Road Frontage
Sidewalks/Curbs & Gutters
Traffic Lanes
Traffic Signal
Utilities
Flood Information
Flood Map Panel
Flood Map Date
Flood Zone
Flood Zone Description

1.18 Acres
51,401 SF
0.00 Acres
0 SF
1.18 Acres
51,401 SF
Survey
Roughly Rectangular
Very Good
Yes
Very Good
Level, At Street Grade

South Main Street
170 Feet (Est.)
Crescent Square Drive
231.52 Feet (Est.)
Yes / Yes
Two lanes in each direction with a central turn lane
Traffic light at intersection of Crescent Square Drive and Main Street
All available

3710888300J
September 6, 2006
Zone X
Areas of minimal flood hazard, usually depicted on FIRMs as above the 500-year flood
level. Zone X is the area determined to be outside the 500-year flood and protected by levee
from 100-year flood. Mandatory flood insurance purchase requirements do not apply.

The site summary is continued below to include the appraiser’s observations relative to detrimental
easements, encroachments, deed restrictions, reciprocal park rights, and/or common ingress/egress, as
applicable.

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RITE-AID

PROPERTY DESCRIPTION

ZONING
The applicable zoning information for the subject is summarized as follows:
ZONING SUMMARY
Component
Zoning Jurisdiction
Zoning Code
Zoning Description
Permitted Uses
Legally Conforming
Zoning Change

Detail
City of Graham
B-2
General Business
Drugstore, Restaurant, Dental/Medical Office, Barber/Beauty Shop, Carwash,
Convenience Store
Appears To Conform
No

The appraisers are not experts in the interpretation of complex zoning ordinances but the subject property
appears to be a conforming use based on a review of public information. Please note that the
determination of compliance is beyond the scope of a real estate appraisal. It is recommended that local
planning and zoning personnel be contacted regarding more specific information that might be applicable
to the subject.
In addition, 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, however, 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. Thus, we recommend a title search to
determine if any such restrictions do exist.
SITE SUMMARY
The subject site is roughly rectangular in shape with Very Good frontage along South Main Street and
Crescent Square Drive. The site is generally typical of the neighborhood and there are no known
detrimental uses in the immediate vicinity. Further, the site is located in an area of minimal flood risk and
does not suffer from any known environmental conditions. Based upon the foregoing, we are not aware of
any physical issues with the subject site that would prevent it from being developed with its highest and
best use, as vacant, or as improved.

Page | 13

RITE-AID

PROPERTY DESCRIPTION

IMPROVEMENT DESCRIPTION
The subject property is a Class A - Drug Store, known as Rite-Aid, containing 13,824 gross square feet.
The following table provides a summary of subject improvements. Building plans were not provided in
conjunction with this appraisal. The following is a description of the subject improvements and basic
construction features derived from our physical inspection.

IMPROVEMENT SUMMARY
Component
Property (Investment) Class & Type
Construction Class
Gross Building Size
Gross Leaseable Area
Year Built
Building Actual Age
Building Effective Age
Current Condition
No. of Buildings
No. of Stories
Parking Type
Parking Spaces
Parking Ratio
Floor Area Ratio (FAR)

Detail
Class A - Drug Store
Class C - Masonry Frame
13,824 SF
13,824 SF
2004
8 Years
8 Years
Very Good
1
1
Paved open surface parking
55 Spaces
3.98 spaces per 1,000 square feet
0.27

IMPROVEMENT DESCRIPTION - EXTERIOR
Exterior Components

Condition

Comments

Foundation - assumed to be poured concrete slab

Very Good

(none)

Structure - structural steel frame

Very Good

(none)

Exterior Walls - brick

Very Good

(none)

Windows / Storefront - aluminum storefront

Very Good

(none)

Roof - flat rubber membrane

Very Good

(none)

Page | 14

RITE-AID

PROPERTY DESCRIPTION

IMPROVEMENT DESCRIPTION - INTERIOR
Interior Components

Condition

Comments

Interior Walls - painted drywall

Very Good

(none)

Flooring - carpet

Very Good

(none)

Ceiling Cover - suspended

Very Good

(none)

Interior Lighting - a mix of fluorescent and
incandescent lighting

Very Good

(none)

Doors - glass in aluminum

Very Good

(none)

Windows - aluminum storefront

Very Good

(none)

Electrical - typical; assumed to be adequate and
to code

(none)

Plumbing - typical; assumed to be adequate and
to code

(none)

HVAC - forced air

(none)

Fire Sprinklers - wet system - 100%

(none)

IMPROVEMENT DESCRIPTION - SITE
Site & Common Area Components
Parking & driveways - ashphalt paved w/ concrete
curbs and sidewalks

Condition

Comments

Very Good

(none)

Site Lighting - pole and building mounted fixtures

Very Good

(none)

Signage - monument and pylon fixtures

Very Good

(none)

Landscaping - the subject has average
landscaping consistent with prevailing retail uses

Very Good

(none)

FUNCTIONAL UTILITY
The current design characteristics of the subject project as constructed and demised for single tenant use
meet modern standards and are adequately suited to their current use. Based on our inspection and
consideration of its current and future use, there do not appear to be any significant items of functional
obsolescence.

Page | 15

RITE-AID

PROPERTY DESCRIPTION

ADA COMPLIANCE
The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made, nor are
we qualified by training to make, a specific compliance survey and analysis of this property to determine
whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a
compliance survey and a detailed analysis of the requirements of the ADA could reveal that the property is
not in compliance with one or more of the requirements of the Act. If so, this fact may have a negative
influence upon the value of the property. Since we have not been provided with the results of a survey, we
did not analyze the results of possible non-compliance.
FURNITURE, FIXTURES AND EQUIPMENT (PERSONAL PROPERTY)
There are no personal property items that would be significant to the overall valuation.
ENVIRONMENTAL ISSUES
We were provided with a Phase I Environmental Assessment for preparation of this report. Between 1985
and 2003, the site was occupied by a retail gasoline dispensing station and in 2003 the underground
storage tanks were removed. During the UST removal, soil samples revealed concentrations of petroleum
hydrocarbons greater than the applicable State of North Carolina Clean-up standard. In 2004, Servco
excavated and removed from the site approximately 293 tons of petroleum impacted soil and submitted a
request for No Further Action to the NCDENR. On December 17, 2004 the NCDENR approved the No
Further Action request. As required by the NCDENR No Further Action approval, the site property deed
has been annotated with a Notice of Residual Petroleum.
DEFERRED MAINTENANCE / CAPITAL EXPENDITURES
Our observation of the property indicated no significant items of deferred maintenance. We are not aware
of, nor were we provided with documentation indicating planned capital expenditures.
ECONOMIC AGE AND LIFE
The appraiser(s) estimate of the subject improvements effective age and remaining economic life is
depicted in the following table:

ECONOMIC AGE & LIFE
Component
Actual Age
Effective Age
Ratio (Effective vs. Actual Age)
MVS Expected Life
Remaining Economic Life

Years
8.0 Years
8.0 Years
100.0%
45.0 Years
37.0 Years

IMPROVEMENT SUMMARY
The existing improvements maintain good overall design and functional utility. Furthermore, there were no
signs of major deferred maintenance upon inspection and we are unaware of any major planned capital

Page | 16

RITE-AID

PROPERTY DESCRIPTION

improvements. Consequently, there are no known physical factors that could be considered to adversely
impact the marketability of the improvements.

Page | 17

RITE-AID

ASSESSMENT & TAXES

ASSESSMENT & TAXES
The assessed values in Alamance County are based upon the current conversion assessment ratio of
100% of the Assessor’s market value. Below we have summarized the pertinent information with regard to
the subject’s historical (where available) and current assessment and real estate taxes. Additional
discussion and detailed will be provided as needed in the section which follows.
ASSESSMENT & TAX SUMMARY
Description
Total Assessed Value
Assessed Value per SF
Tax Rate
Total Tax Burden
Total Taxes per SF

2009
$2,041,514
$147.68
0.97
$19,701
$1.43

2010
$2,041,514
$147.68
0.97
$19,701
$1.43

2011
$2,041,514
$147.68
0.97
$19,701
$1.43

Taxes are due September 1, with a 2% discount if paid by August 31. Taxes become delinquent after
January 5, with a 2% penalty added on January 6. Interest will accrue at a rate of .75% until taxes are paid
in full every month thereafter.
TAX COMPARABLE ANALYSIS
We have analyzed the assessment and corresponding taxation of competitive properties in the
marketplace as a test of reasonableness against that of the subject’s current assessment and taxation.

TAX COMPARABLE SUMMARY
No.
1
2
3
4

Property Name
CVS
Walgreens
Rite-Aid
Rite-Aid

GLA (SF)
10,394
14,736
11,703
9,842

Total Assessed
Value
$1,587,296
$2,276,408
$2,235,838
$1,527,679

Assessed
Value / SF
$152.71
$154.48
$191.05
$155.22

As presented, assessments for like-kind assets in the marketplace range from $1,527,679 to $2,276,408
per square foot, with an average of $1,906,805 per square foot. This compares to the subject’s current
assessment of $147.68 per square foot. Therefore, it appears as though the subject’s current assessment
is fair under the equal and uniform tax provision of the State’s constitution.
CONCLUSION
Going forward, it is our opinion that most prudent investors are allowing for change in real estate
assessment/taxes in instances where the current assessment is notably different than the market value.
Therefore, since the subject’s current assessment is slightly lower than our estimate of market value, we
expect the tax burden to increase upon the next revaluation.

Page | 18

RITE-AID

HIGHEST & BEST USE

HIGHEST & BEST USE
In appraisal practice, the concept of highest and best use represents the premise upon which value is
based. The four criteria the highest and best use must analyze include: legally permissible; physically
possible; financially feasible; and maximum profitability. Highest and best use analysis involves assessing
the subject both as if vacant and as improved.
AS VACANT
The subject site is zoned B-2 by the City of Graham. Legally permissible uses within this zoning district
include drugstore, restaurant, dental/medical office, barber/beauty shop, carwash, convenience store
uses. The subject is adequately served by utilities, has an adequate shape and size, sufficient access,
etc., to be a separately developable site. The subject site would support a site layout for any of the legally
probable uses, which include retail uses. Given the overall depressed, but stabilizing nature of the current
economic environment, it appears that retail development would have a value only marginally
commensurate with its cost. In the case of the subject as if vacant, the analysis indicates that holding the
site for future retail development would be most appropriate.
Based on the information presented above and upon information contained in the market and
neighborhood analysis, we conclude that the highest and best use of the subject as if vacant, would be to
hold for future retail development when market conditions improve.
AS IMPROVED
The subject site is improved with a retail property, which is consistent with the highest and best use as
vacant previously analyzed. The subject site is currently improved with a drug store consisting of 13,824
gross leasable square feet. The improvements have been well designed for their intended use and are
considered to be in very good overall condition. The improvements currently meet the market’s
expectations for a drug store and do not suffer from any measurable functional obsolescence. The existing
improvements have an estimated 37.0 years of remaining economic life. As will be indicated in the
forthcoming income capitalization approach, the subject is capable of producing a positive net cash flow
and continued utilization of the subject as a retail property is financially feasible. Overall, it appears there
are no alternative uses of the existing improvements that would produce a higher net income and/or value
over time than the current use.
The current improvements add value to the site as if vacant, therefore dictating a continuation of its current
use. Further, no renovations or expansions are warranted. Based on the foregoing, the highest and best
use as improved of the subject property is consistent with its existing use as a retail use.

Page | 19

RITE-AID

APPRAISAL METHODOLOGY

APPRAISAL METHODOLOGY
In appraisal practice, an approach to value is included or omitted based on its applicability to the property
type being valued and the quality and quantity of information available.
APPRAISAL METHODOLOGY
Applicable
No

Comments
A cost approach was considered and was not developed
because there is inadequate data to develop a land value, and
the age of the improvements makes the depreciation difficult to
accurately measure. Additionally, market participants seldom
use a cost approach to base purchasing decisions for this
property type.

Sales Comparison Approach

Yes

Income Capitalization Approach

Yes

A sales/direct comparison approach was considered and was
developed because there is adequate data to develop a value
estimate and this approach reflects market behavior for this
property type.
An income capitalization approach was considered and was
developed because the subject is an income producing property
and there is adequate data to develop a value estimate with this
approach. For credit tenant leased single tenant properties this
is the most relevant indicator and the approach used most often
by buyers.

Cost Approach

Page | 20

RITE-AID

SALES COMPARISON APPROACH

SALES COMPARISON APPROACH
In this sales comparison analysis, the price per square foot is used as it mirrors that of market participants
when making retail investment decisions. The market was researched for sales of similar retail properties,
particularly those with similar physical and income generating characteristics within reasonable proximity
to the subject. These sales represent the best data available for comparison.
IMPROVED SALES MAP AND SUMMARY
The following map provides a visual representation of the improved sale locations relative to the subject.

IMPROVED SALES SUMMARY
Improved Sale No. 1

Improved Sale No. 2

Improved Sale No. 3

Improved Sale No. 4

Improved Sale No. 5

Property Name

Rite Aid

Rite Aid

Rite Aid

Rite Aid

Rite Aid

Rite-Aid

Address

1485 River Ridge Drive

3645 Concord Parkw ay South

101 West Main Street

201 Trade Street

101 Plaza Road

841 South Main Street

City

Clemmons

Concord

Havelock

Henderson

Laurinburg

Graham

County

Forsyth

Cabarrus

Craven

Vance

Scotland

Alamance

State

NC

NC

NC

NC

NC

NC

Property Type

Retail

Retail

Retail

Retail

Retail

Retail

Transaction Type

Sale

Sale

Sale

Sale

Sale

--

Parcel ID

4433E-0005

5509-34-9233-0000

6-060-021

0012-01036

01001601008

127-683-001-0001

Grantor

Sovereign Ra, LLC

DDR Southeast Concord, LLC

Sovereign Ra, LLC

Sovereign Ra, LLC

Sovereign Ra, LLC

--

Grantee

37 RA, LLC

RA Concord, LLC

Stanhope Apartments, LLC

Diverse Real Estate Group,

Avidoc Holding Corp.

--

Marketing Time

N/Av

N/Av

N/Av

N/Av

N/Av

--

Sale Date

3/2011

1/2012

3/2010

11/2010

9/2011

--

Adj. Sale Price*

$2,314,782

$1,670,636

$2,509,822

$2,385,542

$2,050,000

--

Year Built

2003

2002

2004

2003

2003

2004

Condition

Good

Good

Good

Good

Good

Land Size

73,181 SF

Gross Leasable Area

14,547 SF

10,908 SF

13,813 SF

14,735 SF

14,388 SF

13,824 SF

Construction

Brick

Brick

Brick

Brick

Brick

brick

Occupancy

100%

100%

100%

100%

100%

Net Operating Income

$212,960

Cap Rate

9.20%

N/Av

8.45%

8.30%

8.97%

--

Sale Price Per SF

$159.12

$153.16

$181.70

$161.90

$142.48

--

Verification

Sperry Van Ness

Colliers International

Sperry Van Ness

Sperry Van Ness

Sperry Van Ness

--

1.68 Acres

$14.64/SF

41,382 SF

N/Av

0.95 Acres

N/Av

76,666 SF

$212,080

1.76 Acres

$15.35/SF

83,200 SF

$198,000

1.91 Acres

$13.44/SF

82,764 SF

$183,885

Subject

Very Good
1.90 Acres

51,401 SF

1.18 Acres

100.0%
$12.78/SF

$235,008

$17.00/SF

* Sale price adjusted for cash equivalency, lease-up and/or development costs (where applicable)

Page | 21

RITE-AID

SALES COMPARISON APPROACH

ADJUSTMENT PROCESS
Adjustments for the valuation analysis include the following transactional and property adjustments.
Transactional adjustments applied typically applied in sequential order before property adjustments.

TRANSACTIONAL AND PROPERTY ADJUSTMENTS
Transactional
Property Rights Conveyed
Financing Terms (Cash Equivalency)
Conditions of Sale (Motivation)
Expenditures Immediately After Purchase
Market Conditions (Time)

Property
Location
Physical Characteristics
Economic Characteristics
Use
Non-Realty Components

Due to the imperfect nature of real estate markets, we have analyzed the comparables through the
application of adjustments based on qualitative comparison. The adjustments made are subjective and are
based on market evidence as well the appraiser’s research, judgment and experience. The adjustments
are not based on a quantitative analysis tool such as “paired sales” due to the lack of paired sales data; or
on multiple regression analysis, due to the lack of enough comparable sales to constitute a statistically
valid sample. Therefore, the percentage adjustments summarized on the following grid should be viewed
as conveying the degree of subjective adjustment applied, and not the result of a quantitative analysis.

Page | 22

RITE-AID

SALES COMPARISON APPROACH

IMPROVED SALES COMPARISON ADJUSTMENT ANALYSIS
Comparable
Property Name
Address

Improved Sale No. 1
Improved Sale No. 2
Rite Aid
Rite Aid
1485 River Ridge Drive 3645 Concord Parkway
South
Clemmons
Concord
Forsyth
Cabarrus
NC
NC
Retail
Retail
1.68 Ac.
0.95 Ac.
2003
2002
14,547 SF
10,908 SF
Sale
Sale
3/2011
1/2012
$2,314,782
$1,670,636

Improved Sale No. 3
Rite Aid
101 West Main Street

Improved Sale No. 4
Rite Aid
201 Trade Street

Improved Sale No. 5
Rite Aid
101 Plaza Road

Havelock
Craven
NC
Retail
1.76 Ac.
2004
13,813 SF
Sale
3/2010
$2,509,822

Henderson
Vance
NC
Retail
1.91 Ac.
2003
14,735 SF
Sale
11/2010
$2,385,542

Laurinburg
Scotland
NC
Retail
1.90 Ac.
2003
14,388 SF
Sale
9/2011
$2,050,000

Sale Price Per SF
Transaction Adjustments

$159.12

$153.16

$181.70

$161.90

$142.48

Property Rights

Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%

Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%

Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%

Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%

Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%

Subtotal
Physical Adjustments

$159.12

$153.16

$181.70

$161.90

$142.48

Location/Access/Exposure

Gross Adjustments
Net Adjustments

Superior
-5.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
5.00%
-5.00%

Superior
-5.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
5.00%
-5.00%

Superior
-5.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
5.00%
-5.00%

Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
0.00%
0.00%

Inferior
5.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
Similar
0.00%
5.00%
5.00%

Indicated Price Per SF

$151.16

$145.50

$172.62

$161.90

$149.60

City
County
State
Property Type
Land Size (Ac.)
Year Built
Gross Leasable Area
Transaction Type
Sale Date
Adj. Sale Price*

Financing
Conditions of Sale
Market Conditions (Time)

Size
Age/Condition
Parking
Zoning
Design/Quality

Subject
Rite-Aid
841 South Main Street
Graham
Alamance
NC
Retail

Prior to adjustments the improved sales had prices ranging from $142.48 to $181.70 per square foot with
a mean of $159.67 per square foot. After adjustments, the sales reflect unit prices ranging from $145.50 to
$172.62 per square foot with an average of $156.16 per square foot.
The subject is most similar to Sales 3 and 4 which indicate an adjusted value range of about $161.90 to
$172.62 per square foot for the subject.
Sale Comparable 1 is located in a good location just off Hwy 421 and is shadow anchored by a Food Lion
shopping center and was adjusted downward.
Sale Comparable 2 is located in a good location near the Charlotte Motor Speedway and located along a
major thoroughfare connecting a large residential area to a commercial area and was adjusted downward.
Sale Comparable 3 is located in a growing area near Cherry Point Marine Corps Air Base and was
adjusted downward.
Sale Comparable 4 is considered the strongest comp as it required no adjustments.

Page | 23

RITE-AID

SALES COMPARISON APPROACH

Sale Comparable 5 is located in a tertiary market considered inferior to the subject and was adjusted
upward.
Placing primary reliance on Sales 3 and 4 we conclude an improved value indication of $165.00 per
square foot.
We have also considered the current contract on the property of $2,400,000 or $173.61 per square foot,
this falls at the high end of our range but seems reasonable.
SALES COMPARISON APPROACH CONCLUSION
Based on the preceding comparison analysis, the subject value via the sales comparison approach is
computed as follows:

SALES COMPARISON APPROACH CONCLUSION
Indicated Value per SF - Low
Indicated Value per SF - High
Reconciled Value per SF
Subject GLA
"As Is" Value Indication (Rd)

"As Is"
$145.50
$172.62
$165.00
13,824 SF
$2,281,000

Page | 24

RITE-AID

INCOME CAPITALIZATION APPROACH

INCOME CAPITALIZATION APPROACH
The subject is a single tenant retail asset and investors typically rely on the direct capitalization method.
As such, to echo the market and considering the subject exhibits stable income and expense trends, we
solely rely on the direct capitalization method.

CONTRACT LEASE SYNOPSIS
General Information
Property Name
Address
City, State

Rite-Aid
841 South Main Street
Graham, NC

Leased Premises
Gross Leaseable Area (GLA)

Drug Store
13,824 SF

Lease Information
Lease Commencement
Lease Expiration
Primary Term - Months
Remaining Term - Months
Applicable Annual Rent:
Expense Treatment:
Lessee's Expense Responsibility
Lessor's Expense Responsibility

Initial Term
Option
Option
Option
Option

November 25, 2004
November 24, 2024
240 mos.
152 mos.
Annual rent per schedule below
Triple Net (NNN)
Real Estate Taxes, Insurance, Maintenance, & Utilities
None
Period Start
11/25/2004
11/25/2024
11/25/2029
11/25/2034
11/25/2039

-

Period End
11/24/2024
11/24/2029
11/24/2034
11/24/2039
11/24/2044

Annual Rent
$396,876.96
$403,788.96
$410,700.96
$417,612.96
$424,524.96

$ Per SF
$28.71
$29.21
$29.71
$30.21
$30.71

Page | 25

RITE-AID

INCOME CAPITALIZATION APPROACH

MARKET RENT ANALYSIS
The market, or economic, rent for the subject is estimated by comparing the subject’s unit types to other
comparable retail properties located within its competitive area. The rent comparables were chosen based
upon similar location, age, and utility.
RENT COMPARABLE MAP
The following map provides a visual representation of the rent comparables’ locations relative to the
subject.

Page | 26

RITE-AID

INCOME CAPITALIZATION APPROACH

RENT COMPARABLE SUMMARY
The following table provides a brief summary of the rent comparables used in the derivation of market rent
for the subject space. A detailed write up of each rent comparable is provided in the Addenda.
COMPARABLE RENTAL SUMMARY
Property Information
No.

Lease Information

Anchor(s)

Property Nam e
Location

Year
Built

Reported
Occ. %

GLA (SF)

Quoted Rental
Rate

Exp. Treatm ent Tenant Nam e

Leased
Area

1
1
1
1
1

Rite Aid
599 South Enota Drive
Gainesville, GA

Rite Aid

1996

100%

11,352 SF

$15.05

Absolute Net

Rite Aid

11,352 SF

2
2
2
2
2

Rite Aid
3465 South Church Street
Burlington, NC

Rite Aid

2003

100%

14,470 SF

$21.53

Absolute Net

Rite Aid

14,470 SF

3

Rite Aid

Rite Aid

2003

100%

14,547 SF

$14.64

Absolute Net

Rite Aid

14,547 SF

3
3
3
3

1485 River Ridge Drive
Clemmons, NC

4
4
4
4
4

Rite Aid
1605 East Innes Street
Salisbury, NC

Rite Aid

2004

100%

14,569 SF

$17.52

Absolute Net

Rite Aid

14,569 SF

5

Rite Aid

Rite Aid

2003

100%

14,765 SF

$13.47

Absolute Net

Rite Aid

14,765 SF

5
5
5
5

1500 Martin Luther King Parkw ay SE
Wilson, NC

2004

100.0%

13,824 SF

Subject Rite-Aid
841 South Main Street
Graham, NC

COMPARABLE RENTAL ANALYSIS
Space Type:
Comp
1
2
3
4
5
Sub .

Property Name
Rite Aid
Rite Aid
Rite Aid
Rite Aid
Rite Aid
Rite-Aid

Location
599 South Enota Drive
3465 South Church Street
1485 River Ridge Drive
1605 East Innes Street
1500 Martin Luther King Parkway SE
841 South Main Street

Tenant
Rite Aid
Rite Aid
Rite Aid
Rite Aid
Rite Aid

Size
11,352 SF
14,470 SF
14,547 SF
14,569 SF
14,765 SF

Exp.
Treatment
Absolute Net
Absolute Net
Absolute Net
Absolute Net
Absolute Net

Rental Rate / SF Qualatative Rating
(Annual)
Relative to Subject
$15.05/SF
Similar
$21.53/SF
Similar
$14.64/SF
Similar
$17.52/SF
Similar
$13.47/SF
Similar

Analytics
Minimum
Mean
Maximum
Concluded

$13.47
$16.44
$21.53
$17.00

Page | 27

RITE-AID

INCOME CAPITALIZATION APPROACH

The previous chart shows leases at Rite Aid locations in North Carolina. These rents are representative of
stores where Rite Aid renegotiated the original lease to a lower rent with a new 20-year term. Overall,
these leases represent market activity for properties very similar to the subject. Some variations among
the comparables include date of lease inception and location. The comparable lease rates range from
$13.47 to $21.53 per square foot, with an average of $16.44 per square foot. We have assumed the
subject lease will be renegotiated (see extraordinary assumptions) to fall within the range of the
comparable properties and to be representative of a market rental rate and terms.
COMPARABLE FORMER RITE AID RENTAL SUMMARY
Property Information
Property Nam e
Location

1

Former Eckerd - Trade It! Sublease

1

Lease Information

105 South West Greenville Boulevard

No.

Anchor(s)

Year
Built

Reported
Occ. %

Quoted
GLA (SF) Rental Rate

Leased
Area

Base
Rent/SF

Trade It!

2000

100%

10,908

$9.75

NNN

Trade It!

10,908 SF

$9.75/SF

Tuesday Morning

1997

100%

10,938

$11.00

Mod. Gross

Tuesday Morning

10,938 SF

$11.00/SF

1997

0%

10,908

$10.00

NNN

Asking

10,908 SF

$10.00/SF

Ace Hardw are

1995

100%

9,600

$9.00

NNN

Ace Hardw are

9,600 SF

$9.00/SF

Verizon

1998

100%

10,908

$10.65

NNN

Verizon

10,908 SF

$10.65/SF

2004

100.0%

13,824 SF

Exp. Treatm ent Tenant Nam e

1
2

Former Rite Aid

2

774 East King Street

2

Boone, NC

2
3

Former Rite Aid

3

2574 South Church Street

3
4

Former Rite Aid (Ace Hardw are)

4

500 Pisgah Church Road

4
5

Former Rite Aid - Verizon Sublease

5

3001 Hope Mills Road

5
Subject Rite-Aid
841 South Main Street

The previous chart summarizes lease rates for second generation Rite Aid locations. Number 3 is an
asking rate of $10.00 per square foot while the others represent locations that have leased to an alternate
use. The rents range from $9.00 to $11.00 per square foot.
POTENTIAL RENTAL REVENUE
Within this analysis, potential rental income is estimated based on the expected rental level that the
subject property could be renegotiated to (See extraordinary assumptions). At $17.00 per square foot
multiplied by 13,824 square feet the annual rent would be $235,008.

POTENTIAL RENTAL REVENUE

Subject Property
$ Nominal
$ Per SF

Landauer
Stabilized
Estimate
$235,008
$17.00

Page | 28

RITE-AID

INCOME CAPITALIZATION APPROACH

VACANCY AND CREDIT LOSS
The subject property is a single tenant property with a long term lease in place. Therefore, we have taken
no vacancy and collection loss. This is consistent with how investors are purchasing similar net lease
investments.
EFFECTIVE GROSS REVENUE
The subject’s effective gross income is detailed as follows:

EFFECTIVE GROSS REVENUE

Subject Property
$ Nominal

Landauer
Stabilized
Estimate
$235,008

OPERATING EXPENSE ANALYSIS
For the purposes of this analysis we have utilized an absolute net structure whereby the tenant is directly
responsible for all operating expenses and interior maintenance, including roof and structure. The landlord
has no responsibility for operating expenses or maintenance. For the purposes of this analysis, we have
utilized the subject’s absolute net structure thus excluding tenant expenses and reimbursement.
OPERATING EXPENSE CONCLUSION
The subject’s total operating expense is detailed as follows:

TOTAL OPERATING EXPENSES

Subject Property
$ Nominal

Landauer
Stabilized
Estimate
$0

NET OPERATING INCOME CONCLUSION
The subject’s net operating income is detailed as follows:

NET OPERATING INCOME

Subject Property
$ Nominal

Landauer
Stabilized
Estimate
$235,008

DIRECT CAPITALIZATION
Direct capitalization is a method used to convert a single year’s estimated stabilized net operating income
into a value indication. The following subsections represent different techniques for deriving an overall
capitalization rate for direct capitalization.
Page | 29

RITE-AID

INCOME CAPITALIZATION APPROACH

Comparable Sales
The OAR’s for the sales used in the sales comparison approach of this report are presented in the
following table. The capitalization rate for Sale 2 was not available.

COMPARABLE CAPITALIZATION RATES
Sale
Property Name
1
Rite Aid
2
Rite Aid
3
Rite Aid
4
Rite Aid
5
Rite Aid
Estimated Cap Rate

Date
3/2011
1/2012
3/2010
11/2010
9/2011

$ / SF
$159.12
$153.16
$181.70
$161.90
$142.48

Occ. (%)
100%
100%
100%
100%
100%

Cap Rate
9.2%
N/Av
8.5%
8.3%
9.0%
9.0%

Published Investor Survey
Investor survey data is presented in the table below:

NATIONAL INVESTOR SURVEYS : CAP RATES
Survey Source
PWC/Korpacz - 1Q12
Estimated Cap Rate

Low
6.00%

High
8.75%

Average
7.46%
8.00%

CAPITALIZATION RATE CONCLUSION
The following table summarizes the OAR conclusions.

SUMMARY OF CAPITALIZATION RATES
Component
Comparable Cap Rates
Investor Surveys
Landauer Stabilized Estimate

Ranges
9.00%
8%
9.00%

In reconciling to an appropriate rate of return, we have considered:
x
x
x
x
x

The survey data is comprised of properties of a higher investment quality/class than that of the subject.
The location of the subject property in a secondary market.
The below average credit rating of the tenant.
The fact the subject is in the bottom 500 Rite Aid locations in terms of performance.
The contract price of $2,400,000 implies a cap rate of 10.21% when using our estimate of $17.00/sf,
which seems high given the comparable sales data.

Our selection of a cap rate is primarily a reflection of the comparable cap rates with support from the
investor surveys. Investor surveys are broad in their formulation and typically out-class the subject in
terms of investment quality. This would inherently understate the rate appropriate for the subject property.
Considering the data presented, the concluded overall capitalization rate appears to be supported in the
local market.
Page | 30

RITE-AID

INCOME CAPITALIZATION APPROACH

DIRECT CAPITALIZATION SUMMARY
A summary of the direct capitalization of the subject at stabilized occupancy is illustrated in the following
table.

DIRECT CAPITALIZATION SUMMARY
Revenue
Potential Rental Revenue
Expense Reimbursements
Potential Gross Revenue
Vacancy & Collection Loss
Effective Gross Revenue
Operating Expenses
Net Operating Income
Capitalization Rate
"As Is" Value Indication (Rd)

Nominal
$235,008
$0
$235,008
$0
$235,008
$0
$235,008
9.00%
$2,610,000

$ SF
$17.00
$0.00
$17.00
$0.00
$17.00
$0.00
$17.00
$188.80

CONCLUSION OF INCOME CAPITALIZATION APPROACH
The conclusion derived through the valuation method employed within this approach is as follows:

INCOME CAPITALIZATION APPROACH CONCLUSION
Direct Income Capitalization
Reconciled Income Capitalization Approach Value

As Is
$2,610,000
$2,610,000

Page | 31

RITE-AID

RECONCILIATION

RECONCILIATION
The value indications from the approaches to value are summarized as follows:

SUMMARY OF VALUE CONCLUSIONS
As Is
Not Used
$2,281,000
$2,610,000
$2,600,000

Cost Approach
Sales Comparison Approach
Income Capitalization Approach
Reconciled Value

In the sales comparison approach, the subject is compared to similar properties that have been sold
recently or for which listing prices or offers are known. The sales used in this analysis are considered
somewhat comparable to the subject. In addition, market participants are currently analyzing purchase
prices on investment properties as they relate to available substitutes in the market. Therefore, the sales
comparison approach is considered to provide a reliable value indication although has been given
secondary emphasis in the final value reconciliation.
The income capitalization approach is applicable to the subject since it is an income producing property
leased in the open market. Market participants are primarily analyzing properties based on their income
generating capability. Therefore, the income capitalization approach is considered a reasonable and
substantiated primary value indicator and has been given greatest emphasis in the final value estimate.
MARKET VALUE CONCLUSION
Appraisal Premise
Market Value "As Is"

Interest Appraised
Leased Fee

Date of Value
March 30, 2012

Value Conclusion
$2,600,000

Page | 32

RITE-AID

ASSUMPTIONS & LIMITING CONDITIONS

ASSUMPTIONS & LIMITING CONDITIONS
1.

Unless otherwise specifically noted in the body of the report, it is assumed that title to the property or properties appraised is clear and
marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value.
Landauer is not aware of any title defects nor has it been advised of any unless such is specifically noted in the report. However, Landauer
has not examined title and makes no representations relative to the condition thereof. Documents dealing with liens, encumbrances,
easements, deed restrictions, clouds and other conditions that may affect the quality of title have not been reviewed. Insurance against
financial loss resulting in claims that may arise out of defects in the subject’s title should be sought from a qualified title company that issues
or insures title to real property.

2.

Unless otherwise specifically noted in the body of this report, it is assumed: that the existing improvements on the property or properties
being appraised are structurally sound, seismically safe and code conforming; that all building systems (mechanical/electrical, HVAC, elevator,
plumbing, etc.) are in good working order with no major deferred maintenance or repair required; that the roof and exterior are in good
condition and free from intrusion by the elements; that the property or properties have been engineered in such a manner that the
improvements, as currently constituted, conform to all applicable local, state, and federal building codes and ordinances. Landauer
professionals are not engineers and are not competent to judge matters of an engineering nature. Landauer has not retained independent
structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the
condition of improvements. Unless otherwise specifically noted in the body of the report: no problems were brought to the attention of
Landauer by ownership or management; Landauer inspected less than 100% of the entire interior and exterior portions of the improvements;
and Landauer was not furnished any engineering studies by the owners or by the party requesting this appraisal. If questions in these areas
are critical to the decision process of the reader, the advice of competent engineering consultants should be obtained and relied upon. It is
specifically assumed that any knowledgeable and prudent purchaser would, as a precondition to closing a sale, obtain a satisfactory
engineering report relative to the structural integrity of the property and the integrity of building systems. Structural problems and/or building
system problems may not be visually detectable. If engineering consultants retained should report negative factors of a material nature, or if
such are later discovered, relative to the condition of improvements, such information could have a substantial negative impact on the
conclusions reported in this appraisal. Accordingly, if negative findings are reported by engineering consultants, Landauer reserves the right
to amend the appraisal conclusions reported herein.

3.

Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property was not
observed by the appraisers. Landauer has no knowledge of the existence of such materials on or in the property. Landauer, however, is not
qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated
groundwater or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the
assumption that there is no such material on or in the property that 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. The Client is urged to retain an expert in this field, if
desired.
Landauer has inspected, as thoroughly as possible by observation, the land; however, it was impossible to personally inspect conditions
beneath the soil. Therefore, no representation is made as to these matters unless specifically considered in the appraisal.

4.

All furnishings, equipment and business operations, except as specifically stated and typically considered as part of real property, have been
disregarded with only real property being considered in the report unless otherwise stated. Any existing or proposed improvements, on or offsite, as well as any alterations or repairs considered, are assumed to be completed in a workmanlike manner according to standard practices
based upon the information submitted to Landauer. This report may be subject to amendment upon re-inspection of the subject subsequent
to repairs, modifications, alterations and completed new construction. Any estimate of Market Value is as of the date indicated; based upon
the information, conditions and projected levels of operation.

5.

It is assumed that all factual data furnished by the Client, property owner, owner’s representative, or persons designated by the Client or
owner to supply said data are accurate and correct unless otherwise specifically noted in the appraisal report. Unless otherwise specifically
noted in the appraisal report, Landauer has no reason to believe that any of the data furnished contain any material error. Information and
data referred to in this paragraph include, without being limited to, numerical street addresses, lot and block numbers, Assessor’s Parcel
Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable
areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any material error in
any of the above data could have a substantial impact on the conclusions reported. Thus, Landauer reserves the right to amend conclusions
reported if made aware of any such error. Accordingly, the Client should carefully review all assumptions, data, relevant calculations, and
conclusions within 30 days after the date of delivery of this report and should immediately notify Landauer of any questions or errors.

6.

The date of value to which any of the conclusions and opinions expressed in this report apply, is set forth in the Letter of Transmittal.
Further, that the dollar amount of any value opinion herein rendered is based upon the purchasing power of the American Dollar on that date.
This appraisal is based on market conditions existing as of the date of this appraisal. Under the terms of the engagement, we will have no
obligation to revise this report to reflect events or conditions that occur subsequent to the date of the appraisal. However, Landauer will be
available to discuss the necessity for revision resulting from changes in economic or market factors affecting the subject.

7.

Landauer assumes no private deed restrictions, limiting the use of the subject in any way.

8.

Unless otherwise noted in the body of the report, it is assumed that there are no mineral deposits or subsurface rights of value involved in this
appraisal, whether they be gas, liquid, or solid. Nor are the rights associated with extraction or exploration of such elements considered
unless otherwise stated in this appraisal report. Unless otherwise stated it is also assumed that there are no air or development rights of
value that may be transferred.

9.

Landauer is not aware of any contemplated public initiatives, governmental development controls, or rent controls that would significantly
affect the value of the subject.

Page | 33

RITE-AID

ASSUMPTIONS & LIMITING CONDITIONS

10.

The estimate of Market Value, which may be defined within the body of this report, is subject to change with market fluctuations over time.
Market value is highly related to exposure, time promotion effort, terms, motivation, and conclusions surrounding the offering. The value
estimate(s) consider the productivity and relative attractiveness of the property, both physically and economically, on the open market.

11.

Any cash flows included in the analysis are forecasts of estimated future operating characteristics are predicated on the information and
assumptions contained within the report. Any projections of income, expenses and economic conditions utilized in this report are not
predictions of the future. Rather, they are estimates of current market expectations of future income and expenses. The achievement of the
financial projections will be affected by fluctuating economic conditions and is dependent upon other future occurrences that cannot be
assured. Actual results may vary from the projections considered herein. Landauer does not warrant these forecasts will occur. Projections
may be affected by circumstances beyond the current realm of knowledge or control of Landauer.

12.

Unless specifically set forth in the body of the report, nothing contained herein shall be construed to represent any direct or indirect
recommendation of Landauer to buy, sell, or hold the properties at the value stated. Such decisions involve substantial investment strategy
questions and must be specifically addressed in consultation form.

13.

Unless otherwise noted in the body of this report, it is assumed that no changes in the present zoning ordinances or regulations governing
use, density, or shape are being considered. The property is appraised assuming that all required licenses, certificates of occupancy,
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 estimates contained in this report is based, unless otherwise stated.

14.

This study may not be duplicated in whole or in part without the specific written consent of Landauer nor may this report or copies hereof be
transmitted to third parties without said consent, which consent Landauer reserves the right to deny. Exempt from this restriction is
duplication for the internal use of the Client-addressee and/or transmission to attorneys, accountants, or advisors of the Client-addressee.
Also exempt from this restriction is transmission of the report to any court, governmental authority, or regulatory agency having jurisdiction
over the party/parties for whom this appraisal was prepared, provided that this report and/or its contents shall not be published, in whole or
in part, in any public document without the express written consent of Landauer which consent Landauer reserves the right to deny. Finally,
this report shall not be advertised to the public or otherwise used to induce a third party to purchase the property or to make a “sale” or “offer
for sale” of any “security”, as such terms are defined and used in the Securities Act of 1933, as amended. Any third party, not covered by the
exemptions herein, who may possess this report, is advised that they should rely on their own independently secured advice for any decision
in connection with this property. Landauer shall have no accountability or responsibility to any such third party.

15.

Any value estimate provided in the report applies to the entire property, and any pro ration or division of the title into fractional interests will
invalidate the value estimate, unless such pro ration or division of interests has been set forth in the report.

16.

The distribution of the total valuation in this report between land and improvements applies only under the existing program of utilization.
Component values for land and/or buildings are not intended to be used in conjunction with any other property or appraisal and are invalid if
so used.

17.

The maps, plats, sketches, graphs, photographs and exhibits included in this report are for illustration purposes only and are to be utilized
only to assist in visualizing matters discussed within this report. Except as specifically stated, data relative to size or area of the subject and
comparable properties has been obtained from sources deemed accurate and reliable. None of the exhibits are to be removed, reproduced,
or used apart from this report.

18.

No opinion is intended to be expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that
customarily employed by real estate appraisers. Values and opinions expressed presume that environmental and other governmental
restrictions/conditions by applicable agencies have been met, including but not limited to seismic hazards, flight patterns, decibel levels/noise
envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, licenses, etc. No survey, engineering study or
architectural analysis has been made known to Landauer unless otherwise stated within the body of this report. If the consultant has not
been supplied with a termite inspection, survey or occupancy permit, no responsibility or representation is assumed or made for any costs
associated with obtaining same or for any deficiencies discovered before or after they are obtained. No representation or warranty is made
concerning obtaining these items. Landauer assumes no responsibility for any costs or consequences arising due to the need, or the lack of
need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for
Flood Hazard Insurance.

19.

Acceptance and/or use of this report constitutes full acceptance of the Contingent and Limiting Conditions and special assumptions set forth in
this report. It is the responsibility of the Client, or Client’s designees, to read in full, comprehend and thus become aware of the
aforementioned contingencies and limiting conditions. Neither the Appraiser nor Landauer assumes responsibility for any situation arising out
of the Client’s failure to become familiar with and understand the same. The Client is advised to retain experts in areas that fall outside the
scope of the real estate appraisal/consulting profession if so desired.

20.

Landauer assumes that the subject analyzed herein will be under prudent and competent management and ownership; neither inefficient nor
super-efficient.

21.

It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless
noncompliance is stated, defined and considered in the appraisal report.

22.

No survey of the boundaries of the property was undertaken. All areas and dimensions furnished are presumed to be correct. It is further
assumed that no encroachments to the realty exist.

23.

The Americans with Disabilities Act (ADA) became effective January 26, 1992. Notwithstanding any discussion of possible readily achievable
barrier removal construction items in this report, Landauer has not made a specific compliance survey and analysis of this property to
determine whether it is in conformance with the various detailed requirements of the ADA. It is possible that a compliance survey of the
property together with a detailed analysis of the requirements of the ADA could reveal that the property is not in compliance with one or more
of the requirements of the ADA. If so, this fact could have a negative effect on the value estimated herein. Since Landauer has no specific

Page | 34

RITE-AID

ASSUMPTIONS & LIMITING CONDITIONS

information relating to this issue, nor is Landauer qualified to make such an assessment, the effect of any possible non-compliance with the
requirements of the ADA was not considered in estimating the value of the subject.
24.

Client shall not indemnify Appraiser or hold Appraiser harmless unless and only to the extent that the Client misrepresents, distorts, or
provides incomplete or inaccurate appraisal results to others, which acts of the Client proximately result in damage to Appraiser. The Client
shall indemnify and hold Appraiser harmless from any claims, expenses, judgments or other items or costs arising as a result of the Client’s
failure or the failure of any of the Client’s agents to provide a complete copy of the appraisal report to any third party. In the event of any
litigation between the parties, the prevailing party to such litigation shall be entitled to recover from the other reasonable attorney fees and
costs.

25.

The report is for the sole use of the Client; however, Client may provide only complete, final copies of the appraisal report in its entirety (but
not component parts) to third parties who shall review such reports in connection with loan underwriting or securitization efforts. Appraiser is
not required to explain or testify as to appraisal results other than to respond to the Client for routine and customary questions. Please note
that our consent to allow an appraisal report prepared by Landauer or portions of such report, to become part of or be referenced in any
public offering, the granting of such consent will be at our sole discretion and, if given, will be on condition that we will be provided with an
Indemnification Agreement and/or Non-Reliance letter, in a form and content satisfactory to us, by a party satisfactory to us. We do consent
to your submission of the reports to rating agencies, loan participants or your auditors in its entirety (but not component parts) without the
need to provide us with an Indemnification Agreement and/or Non-Reliance letter.

26.

Provision of an Insurable Value by the appraiser does not change the intended use or user of the appraisal. The appraiser assumes no liability
for the Insurable Value estimate provided and does not guarantee that any estimate or opinion will result in the subject being fully insured for
any possible loss that may be sustained. The appraiser recommends that an insurance professional be consulted. The Insurable Value
estimate may not be a reliable indication of the replacement or reproduction cost for any date other than the effective date of this appraisal
due to changing costs of labor and materials and due to the changing building codes and governmental regulations and requirements.

Page | 35

RITE-AID

ADDENDUM

ADDENDUM A

DEFINITIONS

ADDENDUM

RITE-AID

ADDENDUM

DEFINITIONS
The following definitions are derived from The Dictionary of Real Estate Appraisal, Fifth Edition, published
by the Appraisal Institute.
x

x
x

x
x
x
x

x
x

x

x

x

x
x

x

Absorption Period: The actual or expected period required from the time a property, group of properties, or commodity is
initially offered for lease, purchase, or use by its eventual users until all portions have been sold or stabilized occupancy has
been achieved.
Absorption Rate: The rate at which properties for sale or lease have been or are expected to be successfully marketed,
sold, or leased in a given area over a duration of time.
Ad Valorem Tax: A tax levied in proportion to the value of the thing(s) being taxes; generally refers only to property taxes,
although technically the term is applicable to income taxes, ad valorem tariffs, special property taxes, etc. Exclusive of
exemptions, use value assessment provisions, and the like, the property tax is an ad valorem tax. (IAAO)
Assessed Value: The value of a property according to the tax rolls in ad valorem taxation; may be higher or lower than
market value, or based on an assessment ratio that is a percentage of market value.
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.
Contract Rent: The actual rental income specified in a lease.
Disposition Value: The most probable price that a specified interest in real property should bring under all of the following
conditions: 1) Consummation of a sale will occur within a future exposure time specified by the client; 2) The property is
subjected to market conditions prevailing as of the date of valuation; 3) Both the buyer and seller are acting prudently and
knowledgeably; 4) The seller is under compulsion to sell; 5) The buyer is typically motivated; 6) Both parties are acting in
what they consider their best interests; 7) An adequate marketing effort will be made during the exposure time specified by
the client; 8) Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 9)
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.
Effective Rent: The rental rate net of financial concessions such as periods of no rent during the lease term and above- or
below-market tenant improvements.
Excess Land: Land that is not needed to serve or support the existing improvement. The highest and best use of the
excess land may or may not be the same as the highest and best use of the improved parcel. Excess land may have the
potential to be sold separately and is valued separately.
Excess Rent: The amount by which contract rent exceeds market rent at the time of the appraisal; created by a lease
favorable to the landlord (lessor) and may reflect unusual management, unknowledgeable parties, a lease execution in an
earlier, stronger rental market, or an agreement of the parties. Due to the higher risk inherent in the receipt of excess rent, it
may be calculated separately and capitalized at a higher rate in the income capitalization approach.
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.
Extraordinary Assumption: An assumption, directly related to a specific assignment, which, if found to be false, could alter
the appraiser’s opinions or conclusions. 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. (USPAP 2010-2011 ed.)
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.
Floor Area Ratio (FAR): The relationship between the above-ground floor area of a building, as described by the building
code, and the area of the plot on which it stands; in planning and zoning, often expressed as a decimal, e.g., a ratio of 2.0
indicates that the permissible floor area of a building is twice the total land area.
Fractional Vacancy: The amount of vacant space need in a market for its orderly operation. In a stabilized market, where
supply and demand are in balance, fractional vacancy allows for move-in and move-outs. In markets for income-producing
property, fractional vacancy measures the lost rental income as leases roll over and expire.

ADDENDUM

RITE-AID
x
x

x

x
x
x

x

x
x
x
x
x
x
x

x

x
x

x
x

ADDENDUM

Full Service Lease: See gross lease.
General Vacancy: A method of calculating any remaining vacancy and collection loss considerations when using discounted
cash flow (DCF) analysis, where turnover vacancy has been used as part of the income estimate. The combined effects of
turnover vacancy and general vacancy relate to total vacancy and collection loss.
Going Concern Value: 1) The market value of all the tangible and intangible assets of an established and operating
business with an indefinite life, as if sold in aggregate; more accurately termed the market value of the going concern. 2) The
value of an operating business enterprise. Goodwill may be separately measured but is an integral component of goingconcern value when it exists and is recognizable.
Gross Building Area (GBA): The total floor area of a building, excluding unenclosed areas, measured from the exterior of
the walls of the above-grade area. This includes mezzanines and basements if and when typically included in the region.
Gross Lease: A lease in which the landlord receives stipulated rent and is obligated to pay all of the property’s operating and
fixed expenses; also called full-service lease.
Hypothetical Condition: That which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical
conditions assume conditions 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. (USPAP, 2010-2011 ed.)
Investment Value: The value of a property interest to a particular investor or class of investors based on the investor’s
specific requirements. Investment value may be different from market value because it depends on a set of investment
criteria that are not necessarily typical of the market.
Land-to-Building Ratio: The proportion of land area to gross building area; one of the factors determining comparability of
properties.
Lease: A contract in which the rights to use and occupy land or structures are transferred by the owner to another for a
specified period of time in return for a specified rent.
Leased Fee Interest: A freehold (ownership interest) where the possessory interest has been granted to another party by
creation of a contractual landlord relationship.
Leasehold Interest: The tenant’s possessory interest created by a lease.
Lessee: One who has the right to occupancy and use of the property of another for a period of time according to a lease
agreement.
Lessor: One who conveys the rights of occupancy and use to others under a lease agreement.
Liquidation Value: The most probable price which a specified interest in real property should bring under all of the following
conditions: 1) Consummation of a sale within a short time period; 2) The property is subjected to market conditions prevailing
as of the date of valuation; 3) Both the buyer is acting prudently and knowledgeably; 4) The seller is under extreme
compulsion to sell; 5) The buyer is typically motivated; 6) Both parties are acting in what they considers to be their best
interests; 7) A normal marketing effort is not possible due to the brief exposure time; 8) Payment will be made in cash in U.S.
dollars or in terms of financial arrangements comparable thereto; and 9) 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.
Market Rent: The most probable rent that a property should bring in a competitive and open market reflecting all conditions
and restrictions of the specified lease agreement, including permitted uses, use restrictions, expense obligations,
concessions, renewal and purchase options, and tenant improvements (TIs).
Market Value: See body of report for market value definition used in this appraisal.
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.)
Net Lease: A lease in which the landlord passes on all expenses to the tenant.
Net Net Net Lease: A lease in which the tenant assumes all expenses (fixed and variable) of operating a property except
that the landlord is responsible for structural maintenance, building reserves, and management. Also called NNN, triple net
lease or fully net lease.

ADDENDUM

RITE-AID
x

x
x

x

x

x

x

x

x

x
x

ADDENDUM

Occupancy Rate: 1) The relationship or ratio between the income received from the rented units in a property and the
income that would be received if all the units were occupied. 2) The ratio of occupied space to total rentable space in the
building.
Overage Rent The percentage rent paid over and above the guaranteed minimum rent or base rent; calculated as a
percentage of sales in excess of a specified breakpoint sales volume
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 stabilized level of long-term occupancy.
Rentable Area: For office buildings, the tenant’s pro rata portion of the entire office floor, excluding elements of the building
that penetrate through the floor to the areas below. The rentable area of a floor is computed by measuring to the inside
finished surface of the dominant portion of the permanent building walls, excluding any major vertical penetrations of the floor.
Alternatively, the amount of space on which rent is based; calculated according to local practice.
Retrospective Value Opinion: A value opinion effective as of a specified historical date. The term does not define a type of
value. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific prior
date. Value as of a historical date is frequently sought in connection with property tax appeals, damage models, lease
renegotiation, deficiency judgments, estate tax, and condemnation. Inclusion of the type of value with this term is
appropriate, e.g., “retrospective market value opinion.
Shell Rent: The typical rent paid for retail, office, or industrial tenant space based on minimal “shell” interior finishes (called
vanilla finish in some areas). Usually the landlord delivers the main building shell space or some minimum level of interior
build-out, and the tenant completes the interior finish, which can include wall, ceiling, and floor finishes; mechanical systems,
interior electric, and plumbing. Typically these are long-term leases with tenants paying all or most property expenses.
Surplus Land: Land that is not currently needed to support the existing improvements but cannot be separated from the
property and sold off. Surplus land does not have an independent highest and best use and may or may not contribute value
to the improved parcel.
Turnover Vacancy: A method of calculating vacancy allowance that is estimated or considered as part of the potential
income estimate when using discounted cash flow (DCF) analysis. As units or suites turn over and are available for releasing, the periodic vacancy time frame (vacancy window) to re-lease the space is considered. Accordingly the income
estimate reflects a component of vacancy and is not true potential gross income but some level of effective gross income.
Usable Area: 1) For office buildings, the actual occupied area of a floor or an office space; computed by measuring from the
finished surface or the office side of corridor and other permanent walls, to the center of partitions that separate the office
from adjoining usable areas, and to the inside finished surface of the dominant portion of the permanent outer building walls.
Sometimes called net building area or net floor area. 2) The area that is actually used by the tenants measured from the
inside of the exterior walls to the inside of walls separating the space from hallways and common areas.
Value In Use: The value of a property assuming a specific use, which may or may not be the property’s highest and best use
on the effective date of appraisal. Value in use may or may not be equal to market value but is different conceptually.
Value Indication: An opinion of value derived through application of the appraisal process.

ADDENDUM

RITE-AID

ADDENDUM

ADDENDUM B

DEMOGRAPHICS

ADDENDUM

Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%

0.00 - 3.00 miles
Radius 2
%

0.00 - 5.00 miles
Radius 3
%

4,292
4,239
4,148
3,287

32,655
31,730
29,276
25,221

74,459
72,013
66,636
58,119

1.25%
2.19%
26.19%

2.92%
8.38%
16.08%

3.40%
8.07%
14.65%

4,239

31,730

72,013

3,015 71.13
813 19.18
48 1.13
63 1.49
0 0.00
197 4.65
104 2.45

18,455 58.16
7,366 23.21
457 1.44
525 1.65
4 0.01
4,080 12.86
844 2.66

43,558
17,495
674
978
32
7,444
1,832

4,239

31,730

72,013

3,860 91.06
380 8.96
252 66.32
3 0.79
1 0.26
124 32.63

25,077
6,653
5,109
127
35
1,382

Population
2017 Projection
2012 Estimate
2000 Census
1990 Census
Growth 2012-2017
Growth 2000-2012
Growth 1990-2000
2012 Est. Pop by Single Race Class
White Alone
Black or African American Alone
Amer. Indian and Alaska Native Alone
Asian Alone
Native Hawaiian and Other Pac. Isl. Alone
Some Other Race Alone
Two or More Races
2012 Est. Pop Hisp or Latino by Origin
Not Hispanic or Latino
Hispanic or Latino:
Mexican
Puerto Rican
Cuban
All Other Hispanic or Latino
2012 Est. Hisp or Latino by Single Race Class

380

1

Of 13

6,653

127 33.42
10 2.63
23 6.05
1 0.26
0 0.00
191 50.26
29 7.63

White Alone
Black or African American Alone
American Indian and Alaska Native Alone
Asian Alone
Native Hawaiian and Other Pacific Islander Alone
Some Other Race Alone
Two or More Races

Prepared On: Mon Mar 26, 2012 Page

79.03
20.97
76.79
1.91
0.53
20.77

1,872 28.14
109 1.64
297 4.46
20 0.30
1 0.02
4,019 60.41
335 5.04

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

© 2012 The Nielsen Company. All rights reserved.

59,577
12,436
9,538
242
52
2,604

60.49
24.29
0.94
1.36
0.04
10.34
2.54

82.73
17.27
76.70
1.95
0.42
20.94

12,436
3,769
246
379
23
1
7,322
696

30.31
1.98
3.05
0.18
0.01
58.88
5.60

Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%
2012 Est. Pop. Asian Alone Race by Cat

63

Chinese, except Taiwanese
Filipino
Japanese
Asian Indian
Korean
Vietnamese
Cambodian
Hmong
Laotian
Thai
All Other Asian Races Including 2+ Category

15
17
0
9
0
9
0
0
12
0
0

2012 Est. Population by Ancestry

525
23.81
26.98
0.00
14.29
0.00
14.29
0.00
0.00
19.05
0.00
0.00

978

42 8.00
115 21.90
0 0.00
31 5.90
2 0.38
213 40.57
0 0.00
0 0.00
122 23.24
0 0.00
0 0.00

45
182
0
115
81
395
0
7
151
0
1

Of 13

26 0.08
23 0.07
10 0.03
93 0.29
2,037 6.42
148 0.47
23 0.07
1,759 5.54
39 0.12
22 0.07
1,427 4.50
535 1.69
26 0.08
2,214 6.98
35 0.11
98 0.31
1 0.00
113 0.36
459 1.45
809 2.55
12 0.04
85 0.27
37 0.12
14 0.04
0 0.00
51 0.16
4 0.01
16,446 51.83

94
30
14
315
5,399
553
41
4,056
66
39
3,506
1,182
32
5,602
91
308
16
287
1,151
2,138
28
312
204
18
10
129
12
34,231

4.60
18.61
0.00
11.76
8.28
40.39
0.00
0.72
15.44
0.00
0.10

72,013

8 0.19
7 0.17
1 0.02
21 0.50
331 7.81
27 0.64
6 0.14
318 7.50
11 0.26
4 0.09
181 4.27
90 2.12
0 0.00
361 8.52
6 0.14
22 0.52
0 0.00
19 0.45
55 1.30
151 3.56
3 0.07
6 0.14
4 0.09
3 0.07
0 0.00
13 0.31
1 0.02
1,905 44.94
2

31,730

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

0.00 - 5.00 miles
Radius 3
%

4,239

Pop, Arab
Pop, Czech
Pop, Danish
Pop, Dutch
Pop, English
Pop, French (except Basque)
Pop, French Canadian
Pop, German
Pop, Greek
Pop, Hungarian
Pop, Irish
Pop, Italian
Pop, Lithuanian
Pop, United States or American
Pop, Norwegian
Pop, Polish
Pop, Portuguese
Pop, Russian
Pop, Scottish
Pop, Scotch-Irish
Pop, Slovak
Pop, Subsaharan African
Pop, Swedish
Pop, Swiss
Pop, Ukrainian
Pop, Welsh
Pop, West Indian (exc Hisp groups)
Pop, Other ancestries
Prepared On: Mon Mar 26, 2012 Page

0.00 - 3.00 miles
Radius 2
%

© 2012 The Nielsen Company. All rights reserved.

0.13
0.04
0.02
0.44
7.50
0.77
0.06
5.63
0.09
0.05
4.87
1.64
0.04
7.78
0.13
0.43
0.02
0.40
1.60
2.97
0.04
0.43
0.28
0.02
0.01
0.18
0.02
47.53

Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%

0.00 - 3.00 miles
Radius 2
%

0.00 - 5.00 miles
Radius 3
%

5,184 16.34

12,148 16.87

2012 Est. Population by Ancestry
Pop, Ancestry Unclassified

687 16.21

2012 Est. Pop Age 5+ by Language Spoken At Home

3,955

31,730

72,013

15,238 48.02
16,492 51.98

34,487 47.89
37,526 52.11

4,239

2012 Est. Population by Age

54,771
780
524
10,486
102

2,004 47.28
2,236 52.75

Male
Female

22,530 77.10
312 1.07
278 0.95
6,093 20.85
7 0.02

4,239

2012 Est. Population by Sex

66,664

3,213 81.24
60 1.52
59 1.49
622 15.73
0 0.00

Speak Only English at Home
Speak Asian/Pac. Isl. Lang. at Home
Speak IndoEuropean Language at Home
Speak Spanish at Home
Speak Other Language at Home

29,221

31,730

72,013

Age 0 - 4
Age 5 - 9
Age 10 - 14
Age 15 - 17
Age 18 - 20
Age 21 - 24
Age 25 - 34
Age 35 - 44
Age 45 - 54
Age 55 - 64
Age 65 - 74
Age 75 - 84
Age 85 and over

284
293
276
135
138
143
548
694
564
458
314
275
117

6.70
6.91
6.51
3.18
3.26
3.37
12.93
16.37
13.31
10.80
7.41
6.49
2.76

Age 16 and over
Age 18 and over
Age 21 and over
Age 65 and over

3,345
3,250
3,112
706

78.91
76.67
73.41
16.65

2,509 7.91
2,546 8.02
2,329 7.34
1,235 3.89
1,066 3.36
1,311 4.13
4,166 13.13
4,957 15.62
4,169 13.14
3,127 9.86
2,132 6.72
1,592 5.02
591 1.86
23,953
23,111
22,045
4,315

75.49
72.84
69.48
13.60

5,349
5,432
4,975
2,835
2,363
3,047
9,308
10,915
9,766
7,610
5,090
3,843
1,478

7.43
7.54
6.91
3.94
3.28
4.23
12.93
15.16
13.56
10.57
7.07
5.34
2.05

55,310
53,421
51,058
10,411

76.81
74.18
70.90
14.46

2012 Est. Median Age

39.36

36.42

37.47

2012 Est. Average Age

39.80

37.00

37.90

Prepared On: Mon Mar 26, 2012 Page

3

Of 13

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

© 2012 The Nielsen Company. All rights reserved.

82.16
1.17
0.79
15.73
0.15

Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%
2012 Est. Male Population by Age
Age 0 - 4
Age 5 - 9
Age 10 - 14
Age 15 - 17
Age 18 - 20
Age 21 - 24
Age 25 - 34
Age 35 - 44
Age 45 - 54
Age 55 - 64
Age 65 - 74
Age 75 - 84
Age 85 and over

145
151
140
68
71
67
275
352
278
204
130
94
27

7.24
7.53
6.99
3.39
3.54
3.34
13.72
17.56
13.87
10.18
6.49
4.69
1.35

0.00 - 5.00 miles
Radius 3
%

15,238

2,004

0.00 - 3.00 miles
Radius 2
%

34,487

1,278 8.39
1,316 8.64
1,186 7.78
648 4.25
566 3.71
649 4.26
2,005 13.16
2,478 16.26
2,060 13.52
1,415 9.29
910 5.97
565 3.71
160 1.05

2,722
2,807
2,536
1,437
1,255
1,521
4,481
5,402
4,849
3,473
2,196
1,392
416

2012 Est. Median Age, Male

37.39

34.85

35.90

2012 Est. Average Age, Male

37.30

35.00

36.10

2012 Est. Female Population by Age

2,236

16,492

7.89
8.14
7.35
4.17
3.64
4.41
12.99
15.66
14.06
10.07
6.37
4.04
1.21

37,526

Age 0 - 4
Age 5 - 9
Age 10 - 14
Age 15 - 17
Age 18 - 20
Age 21 - 24
Age 25 - 34
Age 35 - 44
Age 45 - 54
Age 55 - 64
Age 65 - 74
Age 75 - 84
Age 85 and over

140
142
136
67
67
75
273
341
286
254
184
180
90

6.26
6.35
6.08
3.00
3.00
3.35
12.21
15.25
12.79
11.36
8.23
8.05
4.03

1,231
1,230
1,143
587
500
662
2,161
2,479
2,109
1,712
1,222
1,027
430

7.46
7.46
6.93
3.56
3.03
4.01
13.10
15.03
12.79
10.38
7.41
6.23
2.61

2,627
2,626
2,439
1,398
1,109
1,527
4,827
5,513
4,917
4,137
2,894
2,451
1,062

2012 Est. Median Age, Female

41.37

37.96

39.01

2012 Est. Average Age, Female

42.10

38.70

39.70

Prepared On: Mon Mar 26, 2012 Page

4

Of 13

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

© 2012 The Nielsen Company. All rights reserved.

7.00
7.00
6.50
3.73
2.96
4.07
12.86
14.69
13.10
11.02
7.71
6.53
2.83

Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%
2012 Est. Pop Age 15+ by Marital Status
Total, Never Married
Males, Never Married
Females, Never Married
Married, Spouse present
Married, Spouse absent
Widowed
Males Widowed
Females Widowed
Divorced
Males Divorced
Females Divorced

889
447
442
1,768
182
243
68
175
303
120
183

2012 Est. Pop. Age 25+ by Edu. Attainment

2,970

Less than 9th grade
Some High School, no diploma
High School Graduate (or GED)
Some College, no degree
Associate Degree
Bachelor's Degree
Master's Degree
Professional School Degree
Doctorate Degree

190
328
685
696
260
608
159
25
18

2012 Est Pop Age 25+ by Edu. Attain, Hisp. or Lat

56,256

7,103
3,559
3,544
10,978
1,825
1,687
424
1,263
2,753
1,011
1,742

29.18
14.62
14.56
45.09
7.50
6.93
1.74
5.19
11.31
4.15
7.16

20,734
6.40
11.04
23.06
23.43
8.75
20.47
5.35
0.84
0.61

2,224
2,629
6,134
4,602
1,444
2,830
714
87
71

10.73
12.68
29.58
22.20
6.96
13.65
3.44
0.42
0.34

4,369
5,417
14,493
10,549
3,792
6,820
1,934
420
216

Of 13

3,102
1,894 61.06
546 17.60
450 14.51
97 3.13
46 1.48
59 1.90
12 0.39

3,149
984
1,108
315
113
242
46

9.10
11.28
30.19
21.97
7.90
14.21
4.03
0.87
0.45

5,957

131 71.98
31 17.03
14 7.69
0 0.00
1 0.55
4 2.20
0 0.00

5

28.46
14.41
14.05
44.08
6.93
8.24
1.56
6.68
12.28
4.69
7.58

48,010

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

16,013
8,109
7,903
24,800
3,900
4,637
878
3,760
6,907
2,641
4,266

182

Less than 9th grade
Some High School, no diploma
High School Graduate (or GED)
Some College, no degree
Associate Degree
Bachelor's Degree
Graduate or Professional Degree

Prepared On: Mon Mar 26, 2012 Page

26.26
13.20
13.05
52.22
5.38
7.18
2.01
5.17
8.95
3.54
5.40

0.00 - 5.00 miles
Radius 3
%

24,346

3,386

0.00 - 3.00 miles
Radius 2
%

© 2012 The Nielsen Company. All rights reserved.

52.86
16.52
18.60
5.29
1.90
4.06
0.77

Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%

0.00 - 3.00 miles
Radius 2
%

0.00 - 5.00 miles
Radius 3
%

1,843
1,821
1,693
1,274

13,016
12,640
11,826
10,470

30,400
29,245
27,094
24,155

1.21%
7.56%
32.89%

2.97%
6.88%
12.95%

3.95%
7.94%
12.17%

1,821

12,640

29,245

Households
2017 Projection
2012 Estimate
2000 Census
1990 Census
Growth 2012-2017
Growth 2000-2012
Growth 1990-2000
2012 Est. Households by Household Type
Family Households
Nonfamily Households

1,171 64.31
650 35.69

2012 Est. Group Quarters Population

141

2012 HHs by Ethnicity, Hispanic/Latino

365

97

2012 Est. HHs by HH Income

5.33

1,821

Income Less than $15,000
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $200,000 - $499,999
Income $500,000 and more

251
183
210
456
426
156
83
20
18
16
2

8,479 67.08
4,161 32.92

1,110

1,583 12.52
12,640

13.78
10.05
11.53
25.04
23.39
8.57
4.56
1.10
0.99
0.88
0.11

2,189
1,826
1,907
2,584
2,411
961
419
141
91
102
9

19,260 65.86
9,985 34.14

3,012 10.30
29,245

17.32
14.45
15.09
20.44
19.07
7.60
3.31
1.12
0.72
0.81
0.07

4,832
4,238
4,458
5,501
5,844
2,328
965
429
327
284
39

2012 Est. Average Household Income

$50,707

$45,211

$47,333

2012 Est. Median Household Income

$43,748

$37,313

$37,983

2012 Est. Per Capita Income

$22,197

$18,217

$19,434

Prepared On: Mon Mar 26, 2012 Page

6

Of 13

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

© 2012 The Nielsen Company. All rights reserved.

16.52
14.49
15.24
18.81
19.98
7.96
3.30
1.47
1.12
0.97
0.13

Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%

0.00 - 3.00 miles
Radius 2
%

0.00 - 5.00 miles
Radius 3
%

2012 Median HH Inc by Single Race Class. or Ethn
White Alone
Black or African American Alone
American Indian and Alaska Native Alone
Asian Alone
Native Hawaiian and Other Pacific Islander Alone
Some Other Race Alone
Two or More Races

44,193
38,030
48,889
62,037
0
60,750
27,253

40,742
31,547
28,472
42,911
59,778
33,498
30,505

41,771
30,628
32,128
59,038
42,500
33,669
32,314

Hispanic or Latino
Not Hispanic or Latino

53,052
43,416

36,920
37,368

34,577
38,412

1,171

8,479

19,260

2012 Est. Family HH Type, Presence Own Children
Married-Couple Family, own children
Married-Couple Family, no own children
Male Householder, own children
Male Householder, no own children
Female Householder, own children
Female Householder, no own children

247 21.09
625 53.37
40 3.42
68 5.81
142 12.13
50 4.27

2012 Est. Households by Household Size

1,821

1-person household
2-person household
3-person household
4-person household
5-person household
6-person household
7 or more person household

565 31.03
671 36.85
303 16.64
171 9.39
73 4.01
29 1.59
7 0.38

2012 Est. Average Household Size

Prepared On: Mon Mar 26, 2012 Page

2.25

7

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2,322
3,148
379
365
1,317
948

27.39
37.13
4.47
4.30
15.53
11.18

12,640
3,507
4,276
2,255
1,448
658
293
204

26.72
38.47
4.01
4.02
15.46
11.32

29,245
27.75
33.83
17.84
11.46
5.21
2.32
1.61

2.48

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

5,146
7,409
773
774
2,978
2,180

© 2012 The Nielsen Company. All rights reserved.

8,554
9,791
5,083
3,381
1,461
609
367
2.42

29.25
33.48
17.38
11.56
5.00
2.08
1.25

Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%
2012 Est. Households by Presence of People
Households with 1 or more People under Age 18:
Married-Couple Family
Other Family, Male Householder
Other Family, Female Householder
Nonfamily, Male Householder
Nonfamily, Female Householder

466 25.59
270 57.94
38 8.15
155 33.26
1 0.21
2 0.43

Households no People under Age 18:
Married-Couple Family
Other Family, Male Householder
Other Family, Female Householder
Nonfamily, Male Householder
Nonfamily, Female Householder

1,355
620
75
43
252
365

2012 Est. Households by Number of Vehicles

1,821

No Vehicles
1 Vehicle
2 Vehicles
3 Vehicles
4 Vehicles
5 or more Vehicles

74.41
45.76
5.54
3.17
18.60
26.94

106 5.82
604 33.17
690 37.89
314 17.24
71 3.90
35 1.92

2012 Est. Average Number of Vehicles

0.00 - 5.00 miles
Radius 3
%

12,640

1,821

0.00 - 3.00 miles
Radius 2
%

29,245

4,392 34.75
2,468 56.19
378 8.61
1,528 34.79
4 0.09
15 0.34
8,248
3,005
375
715
1,816
2,336

65.25
36.43
4.55
8.67
22.02
28.32

12,640
721 5.70
4,993 39.50
4,320 34.18
1,941 15.36
420 3.32
244 1.93

9,784
5,445
824
3,465
16
33

33.46
55.65
8.42
35.41
0.16
0.34

19,461
7,068
724
1,638
4,400
5,631

66.54
36.32
3.72
8.42
22.61
28.93

29,245
1,859
10,907
10,186
4,586
1,189
517

6.36
37.30
34.83
15.68
4.07
1.77

1.88

1.79

1.81

1,186
1,171
1,089
936

8,757
8,479
7,854
7,242

20,062
19,260
17,733
16,529

1.28%
7.53%
16.35%

3.28%
7.96%
8.45%

4.16%
8.61%
7.28%

1,171

8,479

19,260

1,011 86.34
373 31.85

6,979 82.31
3,264 38.50

16,261 84.43
7,408 38.46

160 13.66
78 6.66

1,500 17.69
1,128 13.30

2,999 15.57
2,294 11.91

Family Households
2017 Projection
2012 Estimate
2000 Census
1990 Census
Growth 2012-2017
Growth 2000-2012
Growth 1990-2000
2012 Est. Families by Poverty Status
2012 Families at or Above Poverty
2012 Families at or Above Poverty with Children
2012 Families Below Poverty
2012 Families Below Poverty with Children
Prepared On: Mon Mar 26, 2012 Page

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Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%

Architect/Engineer
Arts/Entertain/Sports
Building Grounds Maint
Business/Financial Ops
Community/Soc Svcs
Computer/Mathematical
Construction/Extraction
Edu/Training/Library
Farm/Fish/Forestry
Food Prep/Serving
Health Practitioner/Tec
Healthcare Support
Maintenance Repair
Legal
Life/Phys/Soc Science
Management
Office/Admin Support
Production
Protective Svcs
Sales/Related
Personal Care/Svc
Transportation/Moving

Prepared On: Mon Mar 26, 2012 Page

114
33,491
3,885
17,819

15,736

34,772

11,630 73.91
1,019 6.48
1,005 6.39
847 5.38
122 0.78
1,102 7.00
12 0.08

25,387
2,353
2,154
2,157
245
2,430
45

2,159

2012 Est. Civ Employed Pop 16+ by Occupation

109 0.46
14,164 59.13
2,041 8.52
7,639 31.89

1,456 67.44
145 6.72
236 10.93
121 5.60
16 0.74
185 8.57
0 0.00

For-Profit Private Workers
Non-Profit Private Workers
Local Government Workers
State Government Workers
Federal Government Workers
Self-Emp Workers
Unpaid Family Workers

55,310

2,159

2012 Est. Civ Employed Pop 16+ Class of Worker

23,953

21 0.63
2,192 65.53
191 5.71
941 28.13

In Armed Forces
Civilian - Employed
Civilian - Unemployed
Not in Labor Force

0.00 - 5.00 miles
Radius 3
%

3,345

2012 Est. Pop Age 16+ by Employment Status

0.00 - 3.00 miles
Radius 2
%

15,736

34,772

22 1.02
77 3.57
27 1.25
61 2.83
27 1.25
13 0.60
119 5.51
189 8.75
1 0.05
57 2.64
104 4.82
59 2.73
100 4.63
11 0.51
49 2.27
164 7.60
335 15.52
240 11.12
72 3.33
356 16.49
24 1.11
51 2.36

9

Of 13

261 1.66
257 1.63
726 4.61
430 2.73
232 1.47
116 0.74
864 5.49
834 5.30
99 0.63
666 4.23
684 4.35
490 3.11
1,106 7.03
53 0.34
139 0.88
1,170 7.44
2,217 14.09
1,904 12.10
325 2.07
1,879 11.94
314 2.00
970 6.16

Prepared By:
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Prepared For:

© 2012 The Nielsen Company. All rights reserved.

797
526
1,578
1,213
591
315
1,839
2,054
218
1,705
1,369
1,110
2,082
198
396
2,688
4,930
3,726
689
3,852
833
2,065

0.21
60.55
7.02
32.22

73.01
6.77
6.19
6.20
0.70
6.99
0.13

2.29
1.51
4.54
3.49
1.70
0.91
5.29
5.91
0.63
4.90
3.94
3.19
5.99
0.57
1.14
7.73
14.18
10.72
1.98
11.08
2.40
5.94

Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%
2012 Est. Pop 16+ by Occupation Classification

2,159

Blue Collar
White Collar
Service and Farm

509 23.58
1,410 65.31
241 11.16

2012 Est. Workers Age 16+, Transp. To Work

0.00 - 3.00 miles
Radius 2
%

0.00 - 5.00 miles
Radius 3
%

15,736

34,772

4,843 30.78
8,273 52.57
2,620 16.65

9,711 27.93
18,927 54.43
6,134 17.64

2,111

34,099

1,856 87.92
174 8.24
0 0.00
19 0.90
1 0.05
15 0.71
46 2.18

Drove Alone
Car Pooled
Public Transportation
Walked
Bicycle
Other Means
Worked at Home

15,364
12,341 80.32
2,589 16.85
2 0.01
99 0.64
31 0.20
69 0.45
233 1.52

27,445
5,445
21
278
58
190
662

80.49
15.97
0.06
0.82
0.17
0.56
1.94

2012 Est. Workers Age 16+ by Travel Time to Work *
Less than 15 Minutes
15 - 29 Minutes
30 - 44 Minutes
45 - 59 Minutes
60 or more Minutes

846
730
324
65
93

5,872
5,569
2,460
591
564

12,852
12,515
5,259
1,545
1,357

2012 Est. Avg Travel Time to Work in Minutes

21.88

22.09

22.43

2012 Est. Tenure of Occupied Housing Units

1,821

12,640

29,245

Owner Occupied
Renter Occupied

1,168 64.14
653 35.86

7,936 62.78
4,704 37.22

18,451 63.09
10,794 36.91

2012 Owner Occ. HUs: Avg. Length of Residence

19

18

19

2012 Renter Occ. HUs: Avg. Length of Residence

6

7

7

Prepared On: Mon Mar 26, 2012 Page

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Pop-Facts: Demographic Snapshot 2012 Report
Radius 1: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 2: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
Radius 3: 841 S MAIN ST, GRAHAM, NC 27253-3763, aggregate
0.00 - 1.00 miles
Description
Radius 1
%
2012 Est. All Owner-Occupied Housing Values
Value Less than $20,000
Value $20,000 - $39,999
Value $40,000 - $59,999
Value $60,000 - $79,999
Value $80,000 - $99,999
Value $100,000 - $149,999
Value $150,000 - $199,999
Value $200,000 - $299,999
Value $300,000 - $399,999
Value $400,000 - $499,999
Value $500,000 - $749,999
Value $750,000 - $999,999
Value $1,000,000 or more

48 4.11
16 1.37
18 1.54
49 4.20
37 3.17
324 27.74
351 30.05
271 23.20
33 2.83
3 0.26
9 0.77
0 0.00
8 0.68

2012 Est. Median All Owner-Occupied Housing Value

18,451

448
415
485
558
847
2,353
1,275
1,151
203
78
96
5
22

5.65
5.23
6.11
7.03
10.67
29.65
16.07
14.50
2.56
0.98
1.21
0.06
0.28

$125,831
14,175

32,908

80 3.98
1,337 66.48
77 3.83
85 4.23
254 12.63
61 3.03
19 0.94
99 4.92
1 0.05

2012 Est. Housing Units by Year Structure Built

2,011

Housing Unit Built 2005 or later
Housing Unit Built 2000 to 2004
Housing Unit Built 1990 to 1999
Housing Unit Built 1980 to 1989
Housing Unit Built 1970 to 1979
Housing Unit Built 1960 to 1969
Housing Unit Built 1950 to 1959
Housing Unit Built 1940 to 1949
Housing Unit Built 1939 or Earlier
2012 Est. Median Year Structure Built **

114
174
494
236
302
196
288
100
107
1981

11

Of 13

5.44
5.30
5.60
5.98
9.98
30.23
15.75
15.10
3.51
1.37
1.38
0.13
0.23

$129,287

2,011

1 Unit Attached
1 Unit Detached
2 Units
3 or 4 Units
5 to 19 Units
20 to 49 Units
50 or More Units
Mobile Home or Trailer
Boat, RV, Van, etc.

381 2.69
9,349 65.95
598 4.22
757 5.34
1,349 9.52
140 0.99
135 0.95
1,463 10.32
2 0.01
14,175

5.67
8.65
24.56
11.74
15.02
9.75
14.32
4.97
5.32

660
1,407
2,756
1,615
1,632
1,486
2,314
1,153
1,151
1976

704
21,222
1,383
1,719
3,344
392
526
3,612
5

2.14
64.49
4.20
5.22
10.16
1.19
1.60
10.98
0.02

32,908
4.66
9.93
19.44
11.39
11.51
10.48
16.32
8.13
8.12

Prepared By:
Nielsen Solution Center 1 800 866 6511

Prepared For:

1,003
977
1,034
1,103
1,842
5,577
2,906
2,786
647
253
255
24
43

$163,169

2012 Est. Housing Units by Units in Structure

Prepared On: Mon Mar 26, 2012 Page

0.00 - 5.00 miles
Radius 3
%

7,936

1,168

0.00 - 3.00 miles
Radius 2
%

© 2012 The Nielsen Company. All rights reserved.

1,381
3,042
5,987
4,228
4,183
3,548
5,234
2,462
2,842
1976

4.20
9.24
18.19
12.85
12.71
10.78
15.90
7.48
8.64

Pop-Facts: Demographic Snapshot 2012 Report

*This row intentionally left blank. No total category data is available.
**1939 will appear when at least half of the Housing Units in this reports area were built in 1939 or earlier.

Prepared On: Mon Mar 26, 2012 Page

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Pop-Facts: Demographic Snapshot 2012 Report

Appendix: Area Listing
Area Name:
Type: Radius 1

Reporting Detail: Aggregate

Reporting Level: Block Group

Radius Definition:
841 S MAIN ST

Latitude/Longitude 36.054927

GRAHAM, NC 27253-3763

Radius

0.00

-

-79.399969
1.00

Area Name:
Type: Radius 2

Reporting Detail: Aggregate

Reporting Level: Block Group

Radius Definition:
841 S MAIN ST

Latitude/Longitude 36.054927

GRAHAM, NC 27253-3763

Radius

0.00

-

-79.399969
3.00

Area Name:
Type: Radius 3

Reporting Detail: Aggregate

Reporting Level: Block Group

Radius Definition:
841 S MAIN ST

Latitude/Longitude 36.054927

GRAHAM, NC 27253-3763

Radius

0.00

Project Information:
Site:

2

Order Number: 970894456

Prepared On: Mon Mar 26, 2012 Page

13

Of 13

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-

-79.399969
5.00

RITE-AID

ADDENDUM

ADDENDUM C

AGREEMENT OF PURCHASE AND SALE

ADDENDUM

RITE-AID

ADDENDUM

ADDENDUM D

COMPARABLE IMPROVED SALE SUMMARIES

ADDENDUM

RETAIL SALE No. 1
Rite Aid
Location Data
Location:
County:

1485 River Ridge Drive
Clemmons,NC 27012
Forsyth

Assessor's Parcel No:

4433E-0005

Physical Data
Type:
Land Area:
Excess Land:
Gross Leasable Area:
Anchors:
Rite Aid

Drug Store
1.68 Acres
N/A

14,547 SF

Financial Data
Anchor Tenant GLA: 14,547 SF
Local Tenant GLA: N/A
Total GLA:

14,547 SF

GLA Purchased:

Source:
Occupancy at Sale:
Existing or ProForma Inc:

Appraiser
100%
N/A

14,547 SF

Year Built:
Parking:
Condition:
Exterior Walls:

2003
46 Surface Spaces
Good
Brick

Potential Gross Income:
Vacancy and Credit Loss:
Effective Gross Income:
Expenses and Reserves:
Net Operating Income:

Sale Data
Transaction Type:
Date:
Marketing Time:
Grantor:
Grantee:
Document No.:
Sale Price:
Financing:
Cash Eq.Price:
Req.Capital Cost:
Adj. Sale Price:
Verification:

Sale
3/2011
N/A
Sovereign Ra, LLC
37 RA, LLC
2992-4229
$2,314,782
Cash to Seller
$2,314,782
$0
$2,314,782
Sperry Van Ness

Total
$212,960
N/A
$212,960
N/A
$212,960

Per SF
$14.64
N/A
$14.64
N/A
$14.64

Analysis
Buyers Underwriting Criteria.:
Overall Cap. Rate (OAR):
Projected IRR:
Eff. Gross Multiplier (EGIM):
Oper. Expense Ratio (OER):
Price Per Square Foot:

Direct Cap
9.20 %
N/A %
10.87
N/A %
$159.12

Comments
This comparable represents the sale of a Rite Aid located in Clemmons, NC. The sale occurred in March 2011 for $2,314,782
($159.12/sf). The improvements were constructed in 2003 and the parcel contains 1.68 acres. The property is 14,547sf and is 100%
leased to Rite Aid.

RETAIL SALE No. 2
Rite Aid
Location Data
Location:
County:

3645 Concord Parkway South
Concord,NC 28027
Cabarrus

Assessor's Parcel No:

5509-34-9233-0000

Physical Data
Type:
Land Area:
Excess Land:
Gross Leasable Area:
Anchors:
Rite Aid

Drug Store
0.95 Acres
N/A

10,908 SF

Financial Data
Anchor Tenant GLA: 10,908 SF
Local Tenant GLA: N/A
Total GLA:

10,908 SF

GLA Purchased:

Source:
Occupancy at Sale:
Existing or ProForma Inc:

N/A
100%
N/A

10,908 SF

Year Built:
Parking:
Condition:
Exterior Walls:

2002
39 Surface spaces
Good
Brick

Total
Potential Gross Income:
Vacancy and Credit Loss:
Effective Gross Income:
Expenses and Reserves:
Net Operating Income:

Sale Data
Transaction Type:
Date:
Marketing Time:
Grantor:
Grantee:
Document No.:
Sale Price:
Financing:
Cash Eq.Price:
Req.Capital Cost:
Adj. Sale Price:
Verification:

Sale
1/2012
N/A
DDR Southeast Concord, LLC
RA Concord, LLC
9847-0093
$1,670,636
Cash to Seller
$1,670,636
$0
$1,670,636
Colliers International

N/A
N/A
N/A
N/A
N/A

Per SF
N/A
N/A
N/A
N/A
N/A

Analysis
Buyers Underwriting Criteria.:
Overall Cap. Rate (OAR):
Projected IRR:
Eff. Gross Multiplier (EGIM):
Oper. Expense Ratio (OER):
Price Per Square Foot:

Other
N/A
N/A %
N/A
N/A %
$153.16

Comments
This comparable represents the sale of a Rite Aid in Concord, NC. The sale occurred in January 2012 for $1,670,636 ($153.16/sf).
The improvements were constructed in 2002 and the site contains .95 acres. The building contains 10,908sf and is 100% leased to
Rite Aid. Colliers International was the listing broker on this deal.

RETAIL SALE No. 3
Rite Aid
Location Data
Location:
County:

101 West Main Street
Havelock,NC 28532
Craven

Assessor's Parcel No:

6-060-021

Physical Data
Type:
Land Area:
Excess Land:
Gross Leasable Area:
Anchors:
Rite Aid

Drug Store
1.76 Acres
N/A

13,813 SF

Financial Data
Anchor Tenant GLA: 13,813 SF
Local Tenant GLA: N/A
Total GLA:

13,813 SF

GLA Purchased:

Source:
Occupancy at Sale:
Existing or ProForma Inc:

Appraiser
100%
N/A

13,813 SF

Year Built:
Parking:
Condition:
Exterior Walls:

2004
N/A
Good
Brick

Potential Gross Income:
Vacancy and Credit Loss:
Effective Gross Income:
Expenses and Reserves:
Net Operating Income:

Sale Data
Transaction Type:
Date:
Marketing Time:
Grantor:
Grantee:
Document No.:
Sale Price:
Financing:
Cash Eq.Price:
Req.Capital Cost:
Adj. Sale Price:
Verification:

Sale
3/2010
N/A
Sovereign Ra, LLC
Stanhope Apartments, LLC
2894-0129
$2,509,822
Cash to Seller
$2,509,822
$0
$2,509,822
Sperry Van Ness

Total
$212,080
N/A
$212,080
N/A
$212,080

Per SF
$15.35
N/A
$15.35
N/A
$15.35

Analysis
Buyers Underwriting Criteria.:
Overall Cap. Rate (OAR):
Projected IRR:
Eff. Gross Multiplier (EGIM):
Oper. Expense Ratio (OER):
Price Per Square Foot:

Direct Cap
8.45 %
N/A %
11.83
N/A %
$181.70

Comments
This comparable represents the sale of a Rite Aid in Havelock, NC. The sale occurred in March 2010 for $2,509,822 ($181.70/sf).
The improvements were constructed in 2004 on a parcel containing 1.76 acres. The building contains 13,813sf and is 100% leased
to Rite Aid.

RETAIL SALE No. 4
Rite Aid
Location Data
Location:
County:

201 Trade Street
Henderson,NC 27536
Vance

Assessor's Parcel No:

0012-01036

Physical Data
Type:
Land Area:
Excess Land:
Gross Leasable Area:
Anchors:
Rite Aid

Drug Store
1.91 Acres
N/A

14,735 SF

Financial Data
Anchor Tenant GLA: 14,735 SF
Local Tenant GLA: N/A
Total GLA:

14,735 SF

GLA Purchased:

Source:
Occupancy at Sale:
Existing or ProForma Inc:

Appraiser
100%
N/A

14,735 SF

Year Built:
Parking:
Condition:
Exterior Walls:

2003
72 Surface spaces
Good
Brick

Potential Gross Income:
Vacancy and Credit Loss:
Effective Gross Income:
Expenses and Reserves:
Net Operating Income:

Sale Data
Transaction Type:
Date:
Marketing Time:
Grantor:
Grantee:
Document No.:
Sale Price:
Financing:
Cash Eq.Price:
Req.Capital Cost:
Adj. Sale Price:
Verification:

Sale
11/2010
N/A
Sovereign Ra, LLC
Diverse Real Estate Group, LLC
012220609
$2,385,542
Cash to Seller
$2,385,542
$0
$2,385,542
Sperry Van Ness

Total
$198,000
N/A
$198,000
N/A
$198,000

Per SF
$13.44
N/A
$13.44
N/A
$13.44

Analysis
Buyers Underwriting Criteria.:
Overall Cap. Rate (OAR):
Projected IRR:
Eff. Gross Multiplier (EGIM):
Oper. Expense Ratio (OER):
Price Per Square Foot:

Direct Cap
8.30 %
N/A %
12.05
N/A %
$161.90

Comments
This comparable represents the sale of a Rite Aid located in Henderson, NC. The sale occurred in November 2010 for $2,385,542
($161.90/sf). The improvements were constructed in 2003 on a site containing 1.91acres. The building contains 14,735sf and is
100% leased to Rite Aid.

RETAIL SALE No. 5
Rite Aid
Location Data
Location:
County:

101 Plaza Road
Laurinburg,NC 28352
Scotland

Assessor's Parcel No:

01001601008

Physical Data
Type:
Land Area:
Excess Land:
Gross Leasable Area:
Anchors:
Rite Aid

Drug Store
1.90 Acres
N/A

14,388 SF

Financial Data
Anchor Tenant GLA: 14,388 SF
Local Tenant GLA: N/A
Total GLA:

14,388 SF

GLA Purchased:

Source:
Occupancy at Sale:
Existing or ProForma Inc:

Appraiser
100%
N/A

14,388 SF

Year Built:
Parking:
Condition:
Exterior Walls:

2003
83 Surface spaces
Good
Brick

Potential Gross Income:
Vacancy and Credit Loss:
Effective Gross Income:
Expenses and Reserves:
Net Operating Income:

Sale Data
Transaction Type:
Date:
Marketing Time:
Grantor:
Grantee:
Document No.:
Sale Price:
Financing:
Cash Eq.Price:
Req.Capital Cost:
Adj. Sale Price:
Verification:

Sale
9/2011
N/A
Sovereign Ra, LLC
Avidoc Holding Corp.
00002301
$2,050,000
Cash to Seller
$2,050,000
$0
$2,050,000
Sperry Van Ness

Total
$183,885
N/A
$183,885
N/A
$183,885

Per SF
$12.78
N/A
$12.78
N/A
$12.78

Analysis
Buyers Underwriting Criteria.:
Overall Cap. Rate (OAR):
Projected IRR:
Eff. Gross Multiplier (EGIM):
Oper. Expense Ratio (OER):
Price Per Square Foot:

Direct Cap
8.97 %
N/A %
11.15
N/A %
$142.48

Comments
This comparable represents the sale of a Rite Aid located in Laurinburg, NC. The sale occurred in September 2011 for $2,050,000
($142.48/sf). The improvements were constructed in 2003 on a site containing 1.90acres. The building contains 14,388sf and is
100% leased to Rite Aid.

RITE-AID

ADDENDUM

ADDENDUM E

COMPARABLE RENT SUMMARIES

ADDENDUM

RETAIL COMPARABLE No. 1
Rite Aid
Location Data
Location:

599 South Enota Drive
Gainesville,GA

County:

Hall

Assessor's Parcel No: N/A

Physical Data
Type:
Gross Leaseable Area:
Year Built:
Exterior Walls:
Condition:
Parking:
Anchors:
Rite Aid

Drug Store
11,352 SF
1996
Brick
Good
60 Surface spaces
11,352 SF

Anchor Tenant GLA: 11,352 SF
Local Tenant GLA: N/A
Total GLA:

11,352 SF

Lease Data
Occupancy:
Local:
Overall:

100%
N/A
11,352 SF
Typical Size:
N/A
Term:
$15.05
Base Rent PSF:
Rent Escalations:
N/A
Absolute Net
Basis:
Expense Pass-Thru: Absolute Net
Free Rent (months): N/A
Tenant Improvement: N/A
Leasing Agent:
N/A
Phone No.:
N/A
Survey Date:
N/A

Comments
This comparable is located on South Enota Drive in Gainesville, GA. The improvements were constructed in 1996. The property is
leased to Rite Aid on a lease that was renegotiated in August 2010 for $15.05/sf through July 2025 with (5) 5-year options. The lease
is on an absolute net basis with the tenant responsible for roof and structure. Sales were reported as $595/sf for 2008 and $543/sf for
2009.

RETAIL COMPARABLE No. 2
Rite Aid
Location Data
Location:

3465 South Church Street
Burlington,NC

County:

Alamance

Assessor's Parcel No: N/A

Physical Data
Type:
Gross Leaseable Area:
Year Built:
Exterior Walls:
Condition:
Parking:
Anchors:
Rite Aid

Drug Store
14,470 SF
2003
Brick
Good
75 Surface spaces
14,470 SF

Anchor Tenant GLA: 14,470 SF
Local Tenant GLA: N/A
Total GLA:

14,470 SF

Lease Data
Occupancy:
Local:
Overall:

100%
N/A
N/A
Typical Size:
N/A
Term:
$21.53
Base Rent PSF:
Rent Escalations:
N/A
Absolute Net
Basis:
Expense Pass-Thru: Absolute Net
Free Rent (months): N/A
Tenant Improvement: N/A
Leasing Agent:
N/A
Phone No.:
N/A
Survey Date:
N/A

Comments
This comparable is located at a major signalized intersection of South Church Street and Williamson Avenue near Elon University in
the western part of Burlington, NC. The improvements were constructed in 2003. The property was originally leased to Rite Aid in 2003
but was recently renegotiated and re-signed in May 2008 at $21.53/sf through April 2028. The lease increases 10% in Year 11, and
has (8) 5-year options. The lease is on an absolute net basis with tenant responsible for roof and structure.

RETAIL COMPARABLE No. 3
Rite Aid
Location Data
Location:

1485 River Ridge Drive
Clemmons,NC

County:

Forsyth

Assessor's Parcel No: N/A

Physical Data
Type:
Gross Leaseable Area:
Year Built:
Exterior Walls:
Condition:
Parking:
Anchors:
Rite Aid

Drug Store
14,547 SF
2003
Brick
Good
46 Surface spaces
14,547 SF

Anchor Tenant GLA: 14,547 SF
Local Tenant GLA: N/A
Total GLA:

14,547 SF

Lease Data
Occupancy:
Local:
Overall:

100%
N/A
N/A
Typical Size:
N/A
Term:
$14.64
Base Rent PSF:
Rent Escalations:
N/A
Absolute Net
Basis:
Expense Pass-Thru: Absolute Net
Free Rent (months): N/A
Tenant Improvement: N/A
Leasing Agent:
N/A
Phone No.:
N/A
Survey Date:
N/A

Comments
This comparable is located in the southwest quadrant of US 421 and Lewisville Clemmons Road, in the western part of
Winston-Salem. The improvements were constructed in 2003. The property is leased to Rite on a lease that was renegotiated and
re-signed in Augst 2010 at $14.64/sf through June 2028. The lease increases 10% in Year 10, and has (8) 5-year options. The lease
is on an absolute net basis with the tenant responsible for roof and structure.

RETAIL COMPARABLE No. 4
Rite Aid
Location Data
Location:

1605 East Innes Street
Salisbury,NC

County:

Rowan

Assessor's Parcel No: N/A

Physical Data
Type:
Gross Leaseable Area:
Year Built:
Exterior Walls:
Condition:
Parking:
Anchors:
Rite Aid

Drug Store
14,569 SF
2004
Brick
Good
48 Surface spaces
14,569 SF

Anchor Tenant GLA: 14,569 SF
Local Tenant GLA: N/A
Total GLA:

14,569 SF

Lease Data
Occupancy:
Local:
Overall:

100%
N/A
N/A
Typical Size:
N/A
Term:
$17.52
Base Rent PSF:
Rent Escalations:
N/A
Absolute Net
Basis:
Expense Pass-Thru: Absolute Net
Free Rent (months): N/A
Tenant Improvement: N/A
Leasing Agent:
N/A
Phone No.:
N/A
Survey Date:
N/A

Comments
This comparable is located on East Innes Street one-half mile south of I-85 in Salisbury, NC. The property is located just east of a
large retail center anchored by Lowe's, Food Lion, Circuit City and Staples. The improvements were constructed in 2004 but Rite
renegotiated the lease in 2008. The renegotiated lease was signed in May 2008 with a 20 year term at $17.52/sf with a 10% increase
in Year 11 and (8) 5-year options.

RETAIL COMPARABLE No. 5
Rite Aid
Location Data
Location:

1500 Martin Luther King Parkway SE
Wilson,NC

County:

Wilson

Assessor's Parcel No: N/A

Physical Data
Type:
Gross Leaseable Area:
Year Built:
Exterior Walls:
Condition:
Parking:
Anchors:
Rite Aid

Drug Store
14,765 SF
2003
Brick
Good
64 Surface spaces
14,765 SF

Anchor Tenant GLA: 14,765 SF
Local Tenant GLA: N/A
Total GLA:

14,765 SF

Lease Data
Occupancy:
Local:
Overall:

100%
N/A
N/A
Typical Size:
N/A
Term:
$13.47
Base Rent PSF:
Rent Escalations:
N/A
Absolute Net
Basis:
Expense Pass-Thru: Absolute Net
Free Rent (months): N/A
Tenant Improvement: N/A
Leasing Agent:
N/A
Phone No.:
N/A
Survey Date:
N/A

Comments
This comparable is located in Wilson, NC. The property is located near a residential neighborhood and is located at the signalized
intersection of Ward Boulevard (Hwy 301) and Martin Luther King Jr. Boulevard. The improvements were constructed in 2003. Rite Aid
renegotiated a new 20-year lease starting in May 2008 through 2028 at $13.47/sf with a 10% increase in Year 11 and (8) 5-year
options.

RITE-AID

ADDENDUM

ADDENDUM F

CLIENT ENGAGEMENT LETTER

ADDENDUM

RITE-AID

ADDENDUM

ADDENDUM G

APPRAISER QUALIFICATIONS

ADDENDUM

ROSCOE W. SHIPLETT, MAI
Managing Director | Charlotte

PROFESSIONAL EXPERIENCE
Managing Director – Grubb & Ellis Landauer Valuation Advisory Services, LLC, Charlotte, NC
Owner, R. W. Shiplett & Associates, LLC, - 2004 to 2011
Partner, Shiplett-Wilkins & Associates, Inc., Charlotte, NC - 1982 to 2004
Staff Appraiser and Partner, Callaway and Price, Inc., West Palm Beach, Florida - 1974 to 1981
Staff Appraiser, Robert Wilmoth Associates, Mortgage Bankers, Palm Beach, Florida - 1974
Right of Way Appraiser, Florida Department of Transportation, Fort Lauderdale, Florida -1971 to 1974

STATE & REGULATORY LICENSURE
Member, Appraisal Institute with MAI Designation #5860
State Certified General Appraiser in the following states:
North Carolina:
Virginia

A1366
4001 002214

South Carolina: CG1777
West Virginia: CG213

Georgia

003592

PROFESSIONAL ACTIVITIES & AFFILIATIONS
Actively involved in the Appraisal Institute on a local, regional and national level. North Carolina Chapter activities include
serving on the Admissions Committee, 1982 - 1988 (Chair 1986, 1987), Finance Committee, 1989 - 1990, Education
Committee, 1991, Board of Directors, 1988, 2000-2002, Chapter Officer, Secretary (1989), Treasurer (1990), Second Vice
President (1991), First Vice President (1992) and President (1993).
Region V Representative, 1991 – 1992; 1994 – 1996 and 2000 - 2007, Nominating Committee, 1992, 1994, Chair 1999;
Regional Committee, 1996-1998, 2008, 2010-2016 (Chair 1998, Vice Chair 1997, 2011-2012).
National activities include serving on the Non-Residential Demonstration Report Writing Committee and Board of
Examiners, 1980 - 1993 (Chairman 1986-1987, Assistant Chief Examiner, 1988-1989); External Affairs Committee 1987;
Assistant Regional Member Review and Counseling Division, 1988 - 1991; Examinations Subcommittee, 1991; Seminars
Division, 1995, 1996; Board of Directors, 1996-1999, 2011-2014; Audit Committee, 1997-1998; Vice Chair, National
Committee of Regional Chairs, 1998; Executive Committee, 1999; Commercial Database Trust Committee, 2000-2006;
Long Range Planning Committee, 2000-2002, 2004 (Chair, 2002); Instructor Subcommittee, 2000-2003 (Chair 2002,
2003), Educational Programs Committee, 2002-2004 (Vice Chair, 2004), Education Committee, 2008-2010.
Development Team Member and Approved Instructor for the Appraisal Institute's Litigation Valuation Courses (700, 705
and 715). Have taught these courses on both local and national offerings. Co-authored and previous instructor for the
Non-Residential Demonstration Report Seminar.
Recipient of the 2001 Appraisal Institute’s Presidents Award for participation on the Commercial Database Committee
including formation and publication of the Data Standards. In 2003 received the James H. Pritchett Memorial Award for
overall contribution to the Appraisal profession.

Grubb & Ellis | Landauer Valuation Advisory Services, LLC
7621 Little Avenue, Suite 450
Charlotte, NC 28226

Email: [e-mail]
Direct: 704-341-3166
Web: www.grubb-ellis.com

ROSCOE W. SHIPLETT, MAI
Managing Director | Charlotte

EDUCATION
Formal:
Bachelor of Science in Business Administration, University of Florida - 1969; Major, Banking and Finance
Appraisal Related:
Attended and passed the following courses by the Appraisal Institute (or predecessor organizations):
Course IA - Basic Appraisal Principles, 1972
Course IB - Capitalization Theory and Techniques, 1973
Course II - Urban Properties, 1976
Course VI - Investment Analysis, 1977
Standards of Professional Practice, 1981, 1992 (Part B), 1996 (Part A), 1998, 2003 (Part C)
Market Analysis, 1985
Course 320 – General Applications, 2000 (Audit for Instructor)
Attended numerous appraisal related seminars and courses sponsored by the Appraisal Institute (North Carolina and
South Florida Chapter) and various other real estate related organizations. Have met all continuing education
requirements for the Appraisal Institute and those states having certification.

OTHER
Qualified as an expert witness in the Superior Courts of Mecklenburg and Wake Counties, North Carolina, Circuit Courts
of York County, South Carolina, Circuit Courts of Palm Beach, Broward and Dade Counties, Florida, and Western North
Carolina District and South Carolina District Bankruptcy Court.

Grubb & Ellis | Landauer Valuation Advisory Services, LLC
7621 Little Avenue, Suite 450
Charlotte, NC 28226

Email: [e-mail]
Direct: 704-341-3166
Web: www.grubb-ellis.com

Michael McCaskill
Associate Appraiser | Charlotte

PROFESSIONAL EXPERIENCE
Associate Appraiser, Grubb & Ellis Landauer Valuation Advisory Services, LLC – May 2011 - Present
EDUCATION
Attended and passed the following courses at Triangle Appraisal School
Basic Appraisal Principles
Basic Appraisal Procedures
National USPAP 15-Hour
Residential Market Analysis & Highest & Best Use
Master of Science in Real Estate – University of Florida – May 2011
Relevant Course Work:
Real Estate Appraisal
Investment Property Analysis
Real Estate Market & Transaction Analysis
Real Estate Development
Real Estate Law
Real Estate Research and Technology
Bachelor of Science in Business Administration – Western Carolina University – May 2007
Cum Laude, Dean’s List, Pi Gamma Mu Honor Society
PROFESSIONAL ACTIVITIES & AFFILIATIONS
The Appraisal Institute: Associate Member
Urban Land Institute: Young Leaders Group
National Association of Office and Industrial Properties
International Council of Shopping Centers
STATE AND REGULATORY LICENSURE
Registered Trainee in the following states:
North Carolina:

T5427

Grubb & Ellis | Landauer Valuation Advisory Services, LLC
7621 Little Avenue, Suite 450
Charlotte, NC 28226

Email: [e-mail]
Direct: 704-341-3166
Web: www.grubb-ellis.com