Full Narrative Appraisalopartinvestorsgroup.org/PDFs/Appraisal _ Oakville _ Aug 2015.pdf · 54-60 Shepherd Road, Oakville File Reference: TOR-15-617 Page 3 provided by parties and

Full Narrative Appraisal54-60 Shepherd Road

Oakville, Ontario

August 2015

PREPARED BY:PREPARED BY:PREPARED BY:PREPARED BY:

Matthew Bruchkowsky

Senior Director

Valuation & Advisory Services

PREPARED FOR:PREPARED FOR:PREPARED FOR:PREPARED FOR:

John Neilas

Neilas Inc.

One Queen Street East

Suite 2200

Toronto, Ontario M5C 2Z2

www.colliers.com

MAIN 416 777 2200

FAX 416 643 3470

Our File: TOR-15-617

August 18, 2015

Neilas Inc.

263 Adelaide Street West, Suite 503

Toronto, Ontario M5H 1Y2

Attention: Attention: Attention: Attention: John NeilasJohn NeilasJohn NeilasJohn Neilas

Vice PresidentVice PresidentVice PresidentVice President

Dear Mr. Neilas;

RE:RE:RE:RE: FULL FULL FULL FULL NARRATIVE APPRAISAL NARRATIVE APPRAISAL NARRATIVE APPRAISAL NARRATIVE APPRAISAL “AS IS” AND “AS COMP“AS IS” AND “AS COMP“AS IS” AND “AS COMP“AS IS” AND “AS COMPLETE” OFLETE” OFLETE” OFLETE” OF 54545454----60 SHEPHERD ROAD60 SHEPHERD ROAD60 SHEPHERD ROAD60 SHEPHERD ROAD,,,,

OAKVILLEOAKVILLEOAKVILLEOAKVILLE, ONTARIO, ONTARIO, ONTARIO, ONTARIO

In accordance with your request, we have inspected the above property and have carried out a full analysis in

order to estimate its current market value.

Based on our investigations, it is our opinion that the market value of the Subject property “As Is” as at August

17, 2015 is estimated to be:

Six Six Six Six Million Million Million Million Seventy Seventy Seventy Seventy Thousand Thousand Thousand Thousand DollarsDollarsDollarsDollars

$$$$6666,,,,000077770000,000,000,000,000

Development land is subjective and includes many influencing factors including service availability, land

entitlements, restricted development areas and other planning, heritage and built form restrictions. The value

conclusion contained herein is predicated on documentation provided by the client and information sourced

from municipal agents, brokers and developers in the market. In addition, we have relied on several

Extraordinary Assumptions. Any alterations to either the information provided or the assumptions in this report

may have a material impact on the value contained herein.

Based on our investigations, it is our opinion that the market value of the Subject property “As Complete”, as at

August 17, 2015 is estimated to be:

Ninety ThreeNinety ThreeNinety ThreeNinety Three Million Million Million Million FiveFiveFiveFive Hundred Thousand Hundred Thousand Hundred Thousand Hundred Thousand DollarsDollarsDollarsDollars

$$$$93939393,,,,555500,00000,00000,00000,000

The above value estimate is predicated on an exposure period of two to four months assuming the basis of a

transaction involving cash to the vendor. This report describes the methods and approaches to value in support

of the conclusion and contains the pertinent data gathered in our investigation of the market.

One Queen Street East

Suite 2200

Toronto, Ontario M5C 2Z2

www.colliers.com

MAIN 416 777 2200

FAX 416 643 3470

Yours truly,

COLLIERS INTERNATIONAL REALTY ADVISORS INC.COLLIERS INTERNATIONAL REALTY ADVISORS INC.COLLIERS INTERNATIONAL REALTY ADVISORS INC.COLLIERS INTERNATIONAL REALTY ADVISORS INC.

Matthew Bruchkowsky, AACI, P.App

Senior Director

Valuation & Advisory Services, Toronto

54-60 Shepherd Road, Oakville

Table of Contents

Executive Summary .............................................................................. i

Terms of Reference ............................................................................. 2

Property Data ....................................................................................... 7

Neighbourhood Overview ........................................................................................... 8

Site Description.......................................................................................................... 11

Development Description .......................................................................................... 14

Market Overview ................................................................................. 15

August 2015 Canadian Economic Overview .............................................................15

August 2015 Ontario Economic Overview ................................................................ 19

Valuation ............................................................................................. 22

Highest and Best Use ............................................................................................... 22

Valuation Methodology .............................................................................................. 24

“As Is” Scenario ................................................................................. 26

Direct Comparison Approach ................................................................................... 26

“As Complete” Scenario ..................................................................... 36

Overall Income Capitalization ................................................................................... 36

Direct Comparison Approach ................................................................................... 53

Reconciliation ............................................................................................................ 56

Appendices ......................................................................................... 57

Appendix A Contingent and Limiting Conditions

Appendix B Definitions

Appendix C Comparable Sales - As Is

Appendix D Comparable Sales - As Complete

Appendix E Certification


File Reference: TOR-15-617 I

Executive Summary

Property Information "AsComplete" ScenarioAddress 54-60 Shepherd Rd Direct Income CapitalizationNearest Major Intersection Oxford/Wonderland Stabilized Net Operating Income $3,974,014

Property Type Multi Residential Vacancy Allowance 2.00%

Number of Storeys 10 Overall Capitalization Rate Range 4.00% to 4.50%

Value Indication $88,300,000 to $99,400,000

Unit Mix Direct Comparison Approach Work Live 9 Concluded Unit Value Range $450,000 to $470,000

One Bedroom 103 Size (Units) 203

One Bedroom Plus Den 16 Value Indication $91,400,000 to $95,400,000

Two Bedroom 66

Two Bedroom Plus Den 1 Value Conclusion "As Complete"Three Bedroom 4 Final Value Estimate $93,500,000$93,500,000$93,500,000$93,500,000

Three Bedroom Plus Den 2 Effective Date August 17, 2015

Guest Suite 2 Operating Expense Ratio 24%

Value Per Unit $460,591

Property Data Going-In Overall Capitalization Rate 4.25%

Size (Units) 203

Occupany 100% (Assumed) "As Is" ScenarioYear Built 2015 (Assumed) Proposed Density 202,439 SF

Quality/Condition Very Good/Very Good (Assumed) Rate per Buidable Square Foot $30

Land Use/Zoning MU3 Estimated Value (rounded) $6,070,000$6,070,000$6,070,000$6,070,000


File Reference: TOR-15-617 II

Maps

Regional Location Map

Aerial View

Location Map


File Reference: TOR-15-617 Page 1

Photographs of Subject Property

View along Shepherd Road View of Subject

Subject Neighbourhood Proposed Development Signage

Subject Neighbourhood

Subject Neighbourhood



Terms of Reference Purpose and Intended Use of Report

The purpose of this valuation is to estimate the current market value of

the property described herein.

This appraisal is provided on a confidential basis and for the sole and

exclusive use by Neilas Inc. for financing purposes. Any third party use

of or reliance on this Appraisal Report or any materials prepared by

Colliers International Realty Advisors Inc., is strictly prohibited, except

to the extent that Colliers International Realty Advisors Inc. has

provided prior permission in writing, such permission to be provided or

withheld in Colliers International Realty Advisors Inc.’s sole and

exclusive discretion. In the event that Colliers International Realty

Advisors Inc. has provided said permission, Neilas Inc. shall ensure

and be responsible for notifying the third party in writing that it should

not rely on the Appraisal Report and any use by such third party of the

Appraisal Report or any materials prepared by Colliers International

Realty Advisors Inc. shall be at its own risk and that Colliers

International Realty Advisors Inc. makes no representations or

warranties of any kind. Notwithstanding anything to the contrary,

Colliers International Realty Advisors Inc. shall not owe any duty to any

third party with respect to the Appraisal Report. Neilas Inc. shall

indemnify, defend and hold harmless Colliers International Realty

Advisors Inc. for any and all claims, liabilities, damages, costs and

expenses (including court costs and reasonable legal fees) in

connection with or arising out of any breach of this Agreement by

Neilas Inc. or any unauthorized use or reliance by third parties of the

Appraisal Report or any materials prepared by Colliers International

Realty Advisors Inc.

Property Rights

The property rights appraised in the “As Is” Scenario are those of the

fee simple estate while those appraised in the “As Complete” Scenario

are the leased fee estate.

Effective Date The effective date of this valuation is August 17, 2015.

This Appraisal Report is prepared in the context of the market

conditions and other factors (including assumptions and/or materials



provided by parties and sources outside of the control of Colliers

Realty Advisors Inc.) prevailing as of the effective date. Real estate

markets and assets are subject to significant volatility and change; and

can be affected by numerous economic and political conditions as well

as other conditions. The value contained (if any) in this Appraisal

Report is made as of the effective date only and should not be relied

on as of any other date without receiving prior written authorization

from Colliers International Realty Advisors Inc. Colliers International

Realty Advisors Inc. cannot be held liable for any errors in the

information that was provided by third parties or by John Neilas of

Neilas Inc.. The Appraisal Report must be used in its entirety and any

reliance on any portion of the appraisal report independent of others

may lead to erroneous conclusions.

Inspection Date An inspection of the property was conducted on August 17, 2015 by

Matthew Bruchkowsky.

Market Value Definition

For the purposes of this valuation, 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 the specific date and the passing of title

from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised, and acting in

what they consider their best interests;

3. A reasonable time is allowed for exposure in the open market;

4. Payment is made in terms of cash in Canadian Dollars or in

financial arrangements comparable thereto; and

5. 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."

(The Appraisal Institute of Canada "Canadian Uniform Standards of Professional

Appraisal Practice". 2010 ed., p. 55)



Exposure Time An estimate of market value is related to the concept of reasonable

exposure time. Exposure time is the property's estimated marketing

time prior to a hypothetical sale at market value on the effective date

of the appraisal. Reasonable exposure time is a necessary element of a

market value definition but is not a prediction of a specific date of sale.

The market value estimated herein is predicated on an exposure period

of two to four months.

Marketing Time

Marketing time is an estimate of the amount of time it most likely

would require to sell an interest in real property as its estimated

market value during the period immediately after the effective date of

the appraisal.

Based on discussions with brokers familiar with the local market, an

analysis of recent transactions, and the prevailing conditions of the

local real estate market, a marketing time of one to three months from

the effective date of the appraisal would be required to sell the subject

property at its estimated market value.

Scope of the Valuation This is a Narrative Appraisal ReportNarrative Appraisal ReportNarrative Appraisal ReportNarrative Appraisal Report and complies with the reporting

requirements set forth under the Canadian Uniform Standards of the

Appraisal Institute of Canada. As such, all relevant material is provided

in this report including the discussion of appropriate data, reasoning,

and analyses that were used in the appraisal process to develop the

appraiser’s opinion of value. Additional supporting documentation

concerning the data, reasoning, and analyses are retained in the

appraiser’s file. The depth of discussion contained in this report is

specific to the needs of the client and for the intended use stated

herein.

During the course of preparing this valuation, the following was

completed:

• A personal inspection of the property and surrounding area

• Review of historical income and expense statements

• A review of available data regarding the local market

• Verification of current land use and zoning regulations



• An examination of market conditions and analysis of their potential

effects on the property.

• A review of the local competitive market

• A review of sales and listing data on comparable properties

• Interview(s) with market participants

Contingent and Limiting Conditions The report is subject to the Contingent and Limiting Conditions set

forth herein in addition to any specific assumptions that may be stated

in the body of the report.

Extraordinary Limiting Conditions Within the appraisal of the property referred to herein, no

Extraordinary Limiting Conditions were invoked.

Extraordinary Assumptions

We have relied on information provided to us by our client with respect

to the status of the tenancy and their contractual rights and obligations,

physical attributes of the property and environmental condition of the

site. The assumptions stated herein are critical to the value estimate

contained herein and the authors of this report and Colliers

International Realty Advisors Inc. reserve the right to amend our

estimates should any of these assumptions be altered in whole or in

part.

We have not undertaken a detailed soil analysis, and as we are not

qualified to comment on soil conditions, we have assumed that there

are no contaminants affecting the site. However, a full environmental

assessment would be required for certainty and any cost of remedy

should be deducted from the reported value herein. The sub-soil is

assumed to be similar to other lands in the area and suitable in

drainage qualities and load bearing capacity to support the existing

development.

We have assumed that the Subject is permitted for development with a

gross floor area of 202,439 square feet.

In the “As Complete” Scenario, we have assumed that the proposed

development been completed in a good and workmanlike manner as

per the client specifications as of the effective date of this report. In

addition, we have assumed that the development is fully occupied.



In the “As Complete” Scenario, we have relied upon the tax estimate

provided by the Client. Any alteration to these figures may impact the

valuation contained herein.



Property Data Municipal AddressMunicipal AddressMunicipal AddressMunicipal Address

54-60 Shepherd Road, Oakville, Ontario

Legal DescriptionLegal DescriptionLegal DescriptionLegal Description

54 Shepherd Road : PT LT 16, CON 3 TRAF SDS; PT RDAL BTN LTS 15 & 16, CON 3 TRAF SDS,

AS CLOSED BY BYLAW 608; AS IN 702148 TOWN OF OAKVILLE

60 Shepherd Road : PT LT 16, CON 3 TRAF SDS, AS IN 732417 TOWN OF OAKVILLE

Ownership and HistoryOwnership and HistoryOwnership and HistoryOwnership and History

Current OwnershipCurrent OwnershipCurrent OwnershipCurrent Ownership

As of the effective date, the Subject property is registered to Neilas Inc. 54 Shepherd Road last transferred on

October 28, 2008 for a consideration of $1,444,000, while 60 Shepherd Road last transferred on October 28,

2008 for a consideration of $1,183,333. In addition, it was reported that the sale included an assignment fee of

$922,667.

Current ContractsCurrent ContractsCurrent ContractsCurrent Contracts

As far as we are aware, the Subject is not the object of an Agreement of Purchase and Sale.

EncumbrancesEncumbrancesEncumbrancesEncumbrances

We are not aware of any easements or rights of way that adversely affect the market value of the subject

property. For greater certainty, a legal opinion should be solicited for a full explanation of the effects of these

encumbrances. Additionally, the property has been valued as if it were free and clear of any financing.

Assessment and Realty Tax DataAssessment and Realty Tax DataAssessment and Realty Tax DataAssessment and Realty Tax Data

Roll Numbers

Total 2015 Phased-in Assessment

2401030130020000000 & 2401030130021000000

$1,783,000

Upon redevelopment, the site will be reassessed and taxed accordingly. We have not been provided with a realty

tax bill and in the “As Complete” scenario we have relied on the 2015 tax estimate for the Subject as provided by

the client.



Neighbourhood Overview

The Subject development is located in an area which is designated for growth by the Town of Oakville Official

Plan with specific plans to accommodate intensification. The immediate area is known as Kerr Village which is

intended to be a vibrant business district and cultural area. The subject is located within a commercial node

consisting primarily of retail plazas. Several sites have started the process of being redeveloped including a

development at the southeast corner of Kerr Street and Shepherd Road. South of the Subject are established

residential neighborhoods with commercial uses along the arterial routes. Access to the area is considered to be

good with the Oakville GO station located 1.1 kilometers east of the Subject.

Vehicular access to the area is considered very good with the limited access Queen Elizabeth Way in close

proximity to the Subject. This route provides access to neighboring communities and to the GTA at large. Its

closest onramp can be accessed approximately 900 metres west of the Subject. Furthermore, public transit is

easily accessible with bus service available along Shepherd Road, Kerr Street and Speers Road. In addition, the

Oakville GO Station, which provides easy access to downtown Toronto, which is located approximately 850

meters north of the Subject.



Development in the area has largely taken the form of high-density residential and mixed-use developments,

which are primarily located along both major arterials and adjacent streets on commercial sites. Developments in

the area include Rain Condominiums, a two tower connected by a five-storey podium, 533 residential units with

931 square metres retail at grade development fronting onto Kerr Street, just south of the Subject at 521 Kerr

Street.

The surrounding areas provide prospective tenants with numerous amenities including a retail plaza and a

shopping center occupied by national tenants such as Food Basics and Shoppers Drug Mart located just west and

south of the Subject, numerous retail stores along Kerr Street, Oakwood Public School 200 metres southeast,

and the École élémentaire catholique Sainte-Marie 600 metres south of the Subject. The Lake is less than two

kilometers southeast of the property.

Adjacent Land Uses

North • Immediately north of the Subject, along Shepherd Road, are single storey industrial buildings.

Beyond is the Hogs Back Park crossed by the Sixteen Mile Creek. Further north are shopping

centers occupied by local and national tenants such as The Home Depot, Tim Hortons or No

Frills, as well as the GO Train Station and the Queen Elizabeth Way. Beyond the Queen

Elizabeth Way are established residential neighbourhoods comprised of single tenant detached

dwellings.

South • Immediately south of the Subject is Rain Condominiums, a 533 residential units with 931

square metres retail at grade development fronting onto Kerr Street. Beyond are retail stores

along Kerr Street and Oakville Commons, a shopping center occupied by national tenants such

as Food Basics and Shoppers Drug Mart. South of Kerr Street is a an established residential

neighbourhood, comprised mainly of single family residential dwellings, interspersed with

institutional uses. The École élémentaire catholique Sainte-Marie is approximately 600 metres

south of the Subject.

East • Immediately east of the Subject, on the west side of Speers Road, is a high rise residential

building, followed by three high rise residential buildings located on the east side of Speers

Road. Beyond is the Oakwood Public School. Further east are established residential

neighbourhoods comprised of a mixture of single-family residential dwellings and low to mid-

rise multi-family residential buildings. Approximately 1.9 kilometers southeast of the Subject is

the Lake.

West • Immediately west of the Subject is a retail plaza occupied by local tenants. Beyond are

commercial and industrial properties along Wyecroft Road, south of the Queen Elizabeth Way.

Beyond this limited access highway is a major shopping center (Dorval Crossin) occupied by

national tenants such as Winners, Bulk Barn, LCBO or Scotiabank, followed by mid to high rise

multi-family residential buildings. Further west are established residential neighbourhoods

comprised of single-family detached dwellings, and the Glen Abbey Golf Club.



Major Arterials & Access

Access • General access to the neighborhood is considered to be very good.

Arterials • Kerr Street/Speers Road

• Queen Elizabeth Way/Lakeshore Road

Summary The Subject development is located in an area which is designated for transition from predominantly low density

residential and commercial uses to high density residential and mixed use developments. Access to the area is

considered to be very good with the close proximity of arterial routes and public transit including the Oakville GO

Station.


FILE REFERENCE: TOR-15-617 11

Site Description At the date of inspection the site was improved with a one storey industrial building. The Subject is comprised of

two rectangular shaped parcels totaling 1.37 acres of residential land. The property is located on the east side of

Shepherd Road, north of Kerr Street in Oakville.

ConfigurationConfigurationConfigurationConfiguration • Rectangular

TopographyTopographyTopographyTopography • The site appears to be at grade with the surrounding properties.

ServicesServicesServicesServices • Full municipal services available at street frontage.

AAAAccessccessccessccess • Access to the Subject is provided via Shepherd Road.

Title InstrumentsTitle InstrumentsTitle InstrumentsTitle Instruments • For the purposes of this analysis, the instruments registered against the

title(s) to the property are assumed not to have a significant effect on the

property’s marketability or its market value. For greater certainty a legal

opinion should be solicited for a full explanation of the effects of any

existing encumbrances.

• For the purposes of this analysis we assume the title is marketable without

any encumbrances.

Soil ConditionSoil ConditionSoil ConditionSoil Conditionssss • We have not undertaken a detailed soil analysis, and as we are not

qualified to comment on soil conditions, we have assumed that there are

no contaminants affecting the site. However, a full environmental

assessment would be required for certainty and any cost of remedy should

be deducted from the reported value herein. The sub-soil is assumed to be

similar to other lands in the area and suitable in drainage qualities and load

bearing capacity to support future development.

ConclusionConclusionConclusionConclusion • The Subject is well located within an area of Oakville that is designated for

significant intensification in the short to medium term. The Subject has a

shape, topography, soil conditions, and access which would likely permit

development.



Land Use / Zoning Official PlanOfficial PlanOfficial PlanOfficial Plan

As per the City of Oakville Official Plan, the subject is designated as being Urban Centre within the Secondary

Plan of Kerr Village, more specifically in the Upper Kerr Village District. The Urban Centre designation shall

incorporate a mix of uses including retail and service commercial, office and residential uses. Development

should be oriented to the street and shall contribute to a high quality pedestrian-oriented and transit-supportive

environment. A wide range of retail and service commercial uses, including restaurants, offices and residential

uses may be permitted in the Urban Centre designation. Retail and service commercial uses are to be provided on

the ground floor. These uses may also extend to other floors. Entertainment facilities and hotels may also be

permitted. Office uses and ancillary residential uses may be provided on the ground floor and/or above the

ground floor. Buildings within the Urban Centre shall be a minimum of 6 storeys in height and a maximum of 8

storeys in height. Additional building height may be considered in accordance with the applicable bonusing

policies in this Plan.

Kerr Village is comprised of three land use districts that are structured to provide an appropriate transition in

land use and built form between the existing residential areas and any future development and redevelopment.

The Upper Kerr Village District will become a transit-supportive and mixed use area. Higher density forms of

development are permitted to achieve the critical mass required for enhanced transit. The District will include

appropriate gateway features, an urban park with pedestrian mid-block connections and opportunities for

affordable housing.

Official Plan MapOfficial Plan MapOfficial Plan MapOfficial Plan Map

SUBJECTSUBJECTSUBJECTSUBJECT



ZoningZoningZoningZoning

Zoning By-laws contain very specific and legally enforceable regulations while putting the policies and objectives

of the Official Plan into effect and providing for their day-to-day administration. Zoning By-laws define zones for

various types of uses and establish specific types of land use in each zone. They also set standards for erecting

buildings (i.e., minimum lot size, frontage, set-backs from streets, coverage, side-yard clearances, building heights

and densities, parking requirements, etc.).

The City of Oakville Zoning By-Law 2011-90, amended by By-law 2014-014, designates the Subject as being MU3

- mixed-use. Under this designation, building height where bonussing is applied shall be a maximum of 37.5

metres (10 storeys), exclusive of mechanical penthouses, rooftop equipment, elevator tower, stair tower and/or

architectural features such as parapets. The amending by-laws permit the construction of a two 8-storey

residential condominium linked by a 2-storey podium and incorporating at-grade live/work and residential units.

Zoning MapZoning MapZoning MapZoning Map

SummarySummarySummarySummary

Based on the land use controls in place, development of the Subject with high density residential is permitted,

however, we have assumed that the Subject is permitted for development with 202,439 square feet as per the

client.

SUBJECSUBJECSUBJECSUBJECTTTT



Development Description The Subject site is currently improved with a single storey industrial building located on the parcel known as 54

& 60 Shepherd Road. This building will be demolished prior to the construction of the project. The total Gross

Floor Area for the development is assumed to be approximately 153,983 square feet. There will be 268 parking

spaces and 201 lockers available on site. The development will include a total of 203 units and comprises a

mixture of guest, Live Work, one bedroom, one bedroom + den, two bedroom, two bedroom + den, three bedroom

and three bedroom + den suites and include terrace with barbeques.

Finishes and Amenities

Units within the development feature painted walls, bulkheads and drop ceilings in kitchens and bathrooms,

skimmed and painted ceilings throughout bedrooms and living areas, engineered hardwood flooring, hollowcore

slab wood doors and ceiling mounted light fixtures in all rooms except living room and bathroom. The kitchens

are reported to include porcelain or ceramic tile to kitchen floors, porcelain or ceramic backsplashes, standard

stainless clad appliances (fridge, range, dishwasher and microwave), plastic laminate or wood veneer cabinets,

while the bathrooms will be finished with porcelain or ceramic tiles to bathrooms floors and tub/shower

enclosures, including ceilings, on cement board, plastic laminate or wood veneer cabinets. The units also feature

standard stackable white washers and dryers.

Development Rendering



Market Overview August 2015 Canadian Economic Overview With lower growth across a variety of sectors and a near-record trade deficit, Canada’s second-quarter

expectations have dimmed, fuelling speculation that the Canadian economy could be in recession. The Canadian

economy lost 6,400 jobs in June, with the unemployment rate holding at 6.8% for the fifth consecutive month.

Overall, employment has fluctuated a great deal in the first half of 2015 which suggests that Canada’s labour

market is still adjusting to the drop in oil prices.

Net exports also continued their downward trajectory in May with exports to the United States falling 0.3%.

Exports of energy products, however, rose for the second consecutive month, largely the result of modest

increase in prices over that period. This suggests that, excluding energy products, Canadian economic activity in

international markets may well have contracted in the second quarter. With the U.S. economy projected to pick

up later this year, many economists have highlighted increased trade with the U.S. as an expected driver of

Canadian growth in 2015.

On the International scene, Greece has accepted a new bailout package worth as much as $96 billion as the

country tottered on the brink of bankruptcy and China’s stock market has stabilized ending a stock-market rout

that threatened to drag down the country’s economic growth. Both of these events should improve international

market stability which should benefit foreign investments in Canada.

Average Annual Compound Growth Rate

Economic IndicatorEconomic IndicatorEconomic IndicatorEconomic Indicator HistoricalHistoricalHistoricalHistorical

2012 2012 2012 2012 ---- 2014201420142014

Current Period Current Period Current Period Current Period

Forecast 2015Forecast 2015Forecast 2015Forecast 2015

MidMidMidMid----Term Term Term Term

ForecastForecastForecastForecast

2016201620162016----2019201920192019

Forecast Forecast Forecast Forecast

TrendTrendTrendTrend

GDP 2.2% 1.9% 2.1%

Employment 1.0% 1.0% 1.4%

Unemployment (improvement) 2.8% 1.4% 4.8%

Personal Income per capita 2.6% 2.8% 2.9%

Population 0.7% 1.1% 1.1%

Retail Sales per Capita 2.7% 1.6% 2.6%

CPI 1.4% 1.2% 2.0%

Housing Starts -6.1% -9.3% 4.7%

Forecast Risk

A slower than expected U.S. economy would lead to a softer outlook for exports.



Real Gross Domestic Product (GDP)

Canada’s economy is forecast to expand by just 1.9% in 2015. The sharp

drop in oil prices will cost producers more than US$40 billion in lost

revenue, resulting in a substantial decline in business investment that will

ripple through the economy. The non-energy export market, however, is

expected to make a large contribution to the nation’s overall economic

growth in 2015. The challenges that the trade sector faced over the past

several years – most notably, a rapidly appreciating Canadian dollar and a

lackluster U.S. economic recovery – have largely dissipated.

Employment

Canada’s total employment is expected to grow 1.0% in 2015 adding

187,000 jobs. Total employment mid-term growth is expected at an

average rate of 1.4% annually. By 2019, there will be over 19.1 million

employed Canadians.

Unemployment

Canada’s unemployment rate is expected to edge down only slightly from

6.9% last year to 6.8% this year. Nationally, business Investment is

expected to stay weak as capital budgets are being significantly cut

across the oil and gas industry. Investment in residential construction is

also expected to cool this year.

Personal Income per Capita

Canadians have received consecutive real wage gains since 2012

averaging 2.6% per annum. Per capita personal income growth is

expected to cool this year to 2.1% but is forecast to accelerate in the mid-

term to average 2.9% annually. Personal income is expected to rise from

$42,300 in 2015 to nearly $47,500 in 2019.



Population

The country’s population growth has grown 1.1% annually the last two

years. The nation’s population growth is expected to maintain this

growth rate this year and into the mid-term. Canada’s population is

expected to grow from 35.8 million this year to 37.5 million by 2019.

Retail Sales per Capita

Historically, Canada’s retail sales per capita has grown an average of

2.7% since 2012. However, consumer spending will be restrained this

year by soft employment growth, including the threat of job losses in oil-

rich provinces, weak wage gains, and high levels of household debt and

easing real estate markets. Nationally, retail sales per capita is expected

to grow 1.6% this year, and is expected to average 2.6% growth over the

mid-term.

Consumer Price Index

After posting a CPI growth of 1.9% in 2014, the nation’s CPI growth will

slow to 1.2% this year due to the decline in oil prices. Future mid-term

CPI growth is projected to accelerate to an average of 2.0% annually.

Housing Starts

Residential construction investment is expected to cool this year. A

combination of declining oil prices and oversupply in some cities’

condominium markets will prompt a 9.3% decline in new home

construction, as housing starts fall from 189,400 units in 2014 to 171,700

units in 2015.

The information is sourced from:

a) The Conference Board of Canada, Metropolitan Outlook 1 Spring 2015, based on November 28, 2014 Canadian economic accounts

b) Statistics Canada



Bond Yields The Bank of Canada lowered its trend-setting overnight rate a quarter percentage point on July 15 to 0.50% in

the hopes of stimulating some momentum to offset faltering global growth, slumping prices for oil and weak

exports. The central bank states, “Additional monetary stimulus is required at this time to help return the

economy to full capacity and inflation sustainably to target.” Now the bank foresees a growth of 1.1 % this year,

down from a 1.9% percent expansion predicted three months ago. “The Canadian economy will return to full

capacity until the first half of 2017, instead of late 2016 estimated previously.”

The Canadian dollar plunges to a post-recession low after the Bank of Canada most recent rate cut. According to

some analyst, the perfect storm for the Canadian Dollar has arrived: a Bank of Canada rate cut, weak oil prices, a

sluggish economy and a looming Federal election all ganging up against Canada’s currency. Forecasts predict

the Canadian dollar to continue to depreciate, averaging C$1.33 in October. Presuming the absence of post-

election policy uncertainty and more stable oil prices, the Canadian dollar should average a cent or stronger by

end of 2015.


a) Bank of Canada, Government of Canada benchmark bond yields 10 year

b) RBC Economics, Financial Market Monthly, June 5, 2015

c) TD Economics, Dollars & Sense, June 24, 2015

d) Scotia Bank Global Economics, Global Forecast Update, June 26, 2015, 2015

e) CIBC Interest & Exchange Rate Forecast Update, June 3, 2015

f) BMO Economic Research, Rates Scenario, July 3, 2015

* based on Bank of Canada monthly mid-market closing yields

** Canada's five major banks averaged forecast



August 2015 Ontario Economic Overview The economic expansion in Ontario appears to be on track to accelerate further in 2015 after it gained noticeable

momentum in 2014. Solid merchandise export activity remains a primary engine propelling the expansion this

year and a boost to tourism from the Greater Toronto Area hosting the Pan Am and Parapan Am Games this

summer will add a strong services component. An impressively dynamic household sector in the early months of

2015 also points to consumer spending and housing contributing much to the expansion this year. That being

said, job creation to date has been somewhat weaker than it has been anticipated and the province’s real GDP is

projected to expand by 2.9%.

The outlook for Ontario exports remains robust. Increased competitiveness of Canadian manufacturers through a

lower Canadian dollar coupled with a growing US economy which buys nearly 80% of the province’s exports is

projected to grow exports by 4.5% this year. Overall, the trade sector will be a positive contributor to Ontario’s

economy over the next two years, boosting real GDP growth by 0.9 percentage points in 2015 and 0.3

percentage points in 2016.

Average Annual Compound Growth Rate

Economic IndicatorEconomic IndicatorEconomic IndicatorEconomic Indicator HistoricalHistoricalHistoricalHistorical

2012 2012 2012 2012 ---- 2014201420142014

Current Period Current Period Current Period Current Period

ForeForeForeForecast 2015cast 2015cast 2015cast 2015

MidMidMidMid----Term ForecastTerm ForecastTerm ForecastTerm Forecast

2012012012016666----2019201920192019

Forecast Forecast Forecast Forecast

TrendTrendTrendTrend

GDP 1.7% 2.9% 2.3%

Employment 1.3% 1.2% 1.5%

Unemployment (improvement) 3.9% 4.1% 5.2%

Personal Income per capita 2.2% 2.9% 2.7%

Population 1.0% 0.8% 1.2%

Retail Sales per Capita 2.4% 3.6% 2.3%

CPI 1.7% 1.1% 2.0%

Housing Starts -12.3% -2.5% 11.8%

Forecast Risk

A market correction in the housing sector remains the biggest risk to forecast for the next few years, as it could

disrupt the balance sheets of Ontario households, weakening consumer spending.



Real Gross Domestic Product (GDP)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2012 2013 2014 2015 2016 2017 2018 2019

Ch

an

ge

Canada Ontario

Ontario’s economic growth is expected to accelerate by 2.9% as business

investment finally ends its two-year slump. From 2016 to 2019, Ontario’s

economy is forecast to grow by an average of 2.4% driven by growth in

exports and an improving job market. Comparatively, Canada GDP

growth is estimated at 2.1% for the same period.

Employment

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

2012 2013 2014 2015 2016 2017 2018 2019

Ch

an

ge

Canada Ontario

The province’s job growth is expected to pick up its pace this year

boosting employment growth by 1.2%, up from a five-year low of 0.8% in

2014. Employment within the manufacturing sector, surprisingly,

continues to track lower in February despite manufacturing output

growth. It is anticipated that the employment outlook for the

manufacturing sector will change with longer term vitality.

Unemployment

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Ch

an

ge

Ra

te

Ontario Canada % Chg ON % Chg

After posting an unemployment rate of 7.3% in 2014, Ontario’s

unemployment rate is forecasted to improve this year declining to 7.0%.

The mid-term forecast indicates that the province’s unemployment rate

will continue to decline and reach 5.7% by 2019.

Personal Income per Capita

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2012 2013 2014 2015 2016 2017 2018 2019

Ch

an

ge

Canada Ontario

Ontario’s personal income per capita is expected to grow by 2.9% this

year resulting from employment growth, stronger exports, a lower

Canadian dollar as well as government support. Personal income per

capita is expected to increase from nearly $42,200 this year to over

$47,100 by 2019 with average annual growth forecasted at 2.7%

annually.



Population

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

2012 2013 2014 2015 2016 2017 2018 2019

Ch

an

ge

Canada Ontario

Ontario’s population has steadily grown an average of 1.0% annually since

2012 lagging slightly behind the national growth rate of 1.1%. The

province’s population growth is expected to slow to 0.8% this year then

accelerate in the mid-term to average 1.2% annually. In comparison,

Canada’s population growth is projected at 1.1% this year and beyond. By

the end of 2019. Ontario’s population is projected to reach over 14 million.

Retail Sales per Capita

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

$11,000

$11,500

$12,000

$12,500

$13,000

$13,500

$14,000

$14,500

$15,000

Ch

an

ge

Do

llars

Ontario Canada % Chg ON % Chg

2015’s retail sales per capita are projected to increase by 3.6%. The

province’s retail sales per capita are forecasted to continue to grow at an

average rate of 2.4% from 2016 through 2019. Lower gas prices are

leaving households with more discretionary income boosting consumer

spending.

Consumer Price Index

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

2012 2013 2014 2015 2016 2017 2018 2019

Ch

an

ge

Canada Ontario

Both the national and provincial CPI growth are expected to slow by 1.1%

this year and rebound to 2.2% in 2016. The province’s CPI growth

trajectory is expected to mirror the national rate until 2019.

Housing Starts

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

2012 2013 2014 2015 2016 2017 2018 2019

Ch

an

ge

Canada Ontario

After posting 3.3% fewer housing starts in 2014, provincial housing starts

are projected to decrease another 2.5% this year to 57,600 units. From

2016 onwards, housing starts are projected to accelerate by 2.4% in 2016

with 59,000 units and by 5.3% in 2017 with 62,100 units.


a) The Conference Board of Canada, Metropolitan Outlook 2 Spring 2015, based on November 28, 2014 Canadian economic accounts.

b) Statistics Canada.



Valuation

Highest and Best Use

The principle of highest and best use is fundamental to the concept of value in real estate. Highest and best

use, in general, may be defined as follows:

“The reasonably probable and legal use of vacant land of an improved property which is physically

possible, appropriately supported, financially feasible, and that results in the highest value. The four

criteria the highest and best use must meet are legal permissibility, physical possibility, financial

feasibility, and maximum productive.”

Analysis Legal Permissibility The current use is a permitted within the applicable zoning and/or land

use bylaw requirements affecting the property. The development

density indicated by the client is assumed to be correct. Therefore the

current use is legally permissible.

Physical Possibility The site is of a sufficient size, configuration, and topography to

accommodate the property's proposed use as improved in an efficient

and functional manner. Therefore the proposed use is physically

possible.

Financial Feasibility Of the permitted uses, residential or mixed-use development would be

feasible and marketable, based on the Subject’s location and site area.

The transition of the surrounding area indicates a high-demand for

dwellings in this area.

Maximum Productivity We have been requested to value the Subject as vacant residential

development land and have therefore not determined the maximum

productivity of the Subject.



Conclusion

As Vacant

The improvements to the property do not contribute positively and substantially to the overall value of the

property such that the value of the site as though vacant is higher than the value of the property as though

improved. As such, a thorough examination of the highest and best use of the property as vacant has not been

completed. It is our considered and professional opinion that the highest and best use of the land as though

vacant is as a development site for high density residential use.

As Improved

Based on the foregoing, the highest and best use of the property is considered to be for redevelopment with

residential uses. This opinion of the property's highest and best use forms the basis of our valuation.



Valuation Methodology Traditionally, there are three accepted methods of valuing real property:

• Cost Approach;

• Direct Comparison Approach; and

• Income Approach

The selection of a relevant methodology depends upon the nature and characteristics of the real estate under

consideration.

1) The Cost ApproachThe Cost ApproachThe Cost ApproachThe Cost Approach to value is based upon the economic principle of substitution, which holds that the

value of a property should not be more than the amount by which one can obtain, by purchase of a site and

construction of a building without undue delay, a property of equal desirability and utility.

2) The Direct Comparison ApproachThe Direct Comparison ApproachThe Direct Comparison ApproachThe Direct Comparison Approach examines the cost of acquiring equally desirable and valuable substitute

properties, indicated by transactions of comparable properties, within the market area. The characteristics

of the sale properties are compared to the subject property on the basis of time and such features as

location, size and quality of improvements, design features and income generating potential of the property.

3) The Income ApproachThe Income ApproachThe Income ApproachThe Income Approach to value is utilized to estimate real estate value of income-producing or investment

properties.

The Direct Capitalization MethodThe Direct Capitalization MethodThe Direct Capitalization MethodThe Direct Capitalization Method is based on the conversion of current earnings directly into an

expression of market value. The net income for the current or forthcoming fiscal year is capitalized with

an overall rate, which reflects the investment characteristics offered by the asset.

The capitalization rate used is based on the analysis of sales and interviews with people active in the

market.

Discounted Cash Flow AnalysisDiscounted Cash Flow AnalysisDiscounted Cash Flow AnalysisDiscounted Cash Flow Analysis allows the appraiser to account for the anticipated growth or decline in

income over the term of a prescribed holding period.

Two rates must be selected for an application of the DCF process:

• The internal rate of return or discount rate used to discount the projected receivables; and

• An overall capitalization rate used in estimating reversionary value of the asset.



The reversionary capitalization rate utilized is usually similar to the rate that would be applied in present market

conditions.

Selection of Relevant Methodology The Direct Comparison Approach, which is the most common technique used to value land, is the preferred

method when sales of comparable properties are available. Under the “As Is” Scenario, the Subject is a

development site with a highest and best use determined to be residential development. The valuation

methodology employed in this report is limited to the Direct Comparison Approach.

As mentioned above the Direct Comparison Approach is considered the primary method by which investors

evaluate various purchase options. In this regard, it is felt that both the Income and Cost Approach to values are

not widely employed by the general market in evaluating competing land purchase options. As such, the Income

and Cost Approaches to value have not been utilized herein.

Under the “As Complete” Scenario, the property is an income producing asset and purchasers would analyze

the property on the basis of its income generating capability. For this reason, we have valued the Subject

property, under the “As Complete” Scenario, using the Income Approach. The Direct Comparison Approach is

not the preferred method for valuing income producing real estate. In the case of the subject property, the

Direct Comparison Approach can be utilized as a secondary check and balance onsupport to the conclusion of

the Income Approach. Investors or analysts do not typically use the Cost Approach to value properties such as

the subject. The inherent difficulties in accurately estimating developer’s profit and all forms of depreciation

restrict the reliability of this approach. For these reasons, we have not utilized the Cost Approach to value the

property.



“As Is” Scenario Direct Comparison Approach

The Direct Comparison Approach is based on the Principle of Substitution which maintains that a prudent

purchaser would not pay more for a property than the cost to purchase a suitable alternative property which

exhibits similar physical characteristics, tenancy, location, etc. Within this approach, the property being valued is

compared to properties that have sold recently or are currently listed and are considered to be relatively similar

to the subject property. Typically, a unit of comparison (i.e. sale price per square foot, sale price per acre) is

used to facilitate the analysis. In the case of properties similar to the subject, the sale price per square foot of

permitted gross floor area (“psf buildable”(“psf buildable”(“psf buildable”(“psf buildable”)))) is the most commonly used unit of comparison.

The overall site area of the Subject property is approximately 59,868 square feet or 1.37 acres (Source: Client).

The highest and best use of the property is deemed to be a development site for high density residential use.

Selection of ComSelection of ComSelection of ComSelection of Comparable Salesparable Salesparable Salesparable Sales

As one sale is not necessarily indicative of market value, an appraiser examines a number of market

transactions. When properly reconciled, trends emerge, leading to the estimate of market value of the property

being appraised.

A search of comparable land sales in the Town of Oakville was conducted, however, given the limited yield the

search was expanded to include all comparable markets in the GTA with the potential for residential

development. The sale prices ranged from $1,250,000 to $13,879,125. The sales ranged in size from 1.73 to

2.91 acres. When converted to a buildable rate per square foot, the prices ranged from $21 to $51.



Sales of Development LandsSales of Development LandsSales of Development LandsSales of Development Lands

The chart identifies the sales we researched. In valuing the Subject property, we focused on sales most similar to

the Subject in terms of neighbourhood location, potential development, timing and density. A detailed analysis of

each of the key sales outlining our adjustments and reasoning follows.

The basis for comparison included the consideration of the following:

• Sale Date;

• Property Rights Conveyed;

• Financing Terms;

• Conditions of Sale;

• Location;

• Development Timeline.

AnalysisAnalysisAnalysisAnalysis

Sale DateSale DateSale DateSale Date • Where the market is changing, it may be necessary to adjust prices to reflect

the time difference between the date of sale of a comparable property and the

date of valuation.

Property Rights ConveyedProperty Rights ConveyedProperty Rights ConveyedProperty Rights Conveyed • When real property rights are sold, they may be the sole subject of the

contract or the contract may include other rights. In the sales comparison

analysis, it is pertinent that the property rights of the comparable sale be

similar to the property rights of the subject property. All the sales considered

were fee simple transfers, no adjustments were necessary.

Financing Terms Financing Terms Financing Terms Financing Terms • The transaction price of one property may differ from that of a similar

property due to different financing arrangements. Financing arrangements

may include existing mortgages at favourable interest rates or paying cash to

a lender so that a mortgage with a below-market interest rate could be

offered. While selected comparable sales had VTBs in their transactions, the

terms of the mortgage were considered in making adjustments to the sale

price.

Conditions of SaleConditions of SaleConditions of SaleConditions of Sale • Adjustments for conditions of sale usually reflect the motivations of the

purchaser and vendor. In some cases the conditions of sale significantly affect

transaction prices. Sales that reflect unusual situations, require an appropriate

adjustment for motivation or sale condition. For example, power-of-sale

conditions involve a certain degree of urgency on part of the lender - leading



to a somewhat lower sale price than what would otherwise be expected. All

the sales considered were normal market transactions with no undue

motivation, no adjustments were necessary.

Location Location Location Location • An adjustment for location within a market area may be required when the

locational characteristics of a comparable property are different from those of

the subject property. Although no location is inherently desirable or

undesirable, the market recognizes that one location is better than, similar to,

or worse than another.

Development TimelineDevelopment TimelineDevelopment TimelineDevelopment Timeline • An adjustment for the anticipated time to development may be required when

the site requires demolition, rezoning, and site plan approval. The time

required to prepare the site for development may affect the sale price (a

longer development timeline requires a downward adjustment). Development

timeline adjustments were made when necessary.

The Appraisal Institute of Canada recommends the use of "paired sales analysis" in the derivation of

adjustments. This involves locating two very similar sales that sell in a similar time period. If the two sales differ

in only one key feature, then the difference in sale price can be used as the "market indicator" for the

adjustment for that feature. In practice, this concept usually only applies to newer homes in a subdivision.

Commercial and industrial properties tend to be more unique and therefore, it is not usually possible to find

paired sales to derive adjustments. In the absence of paired sales, it is the appraisers' experience and judgment

(based on observation), which is used for adjustments. A table of the relative adjustments is presented on

pages following a descriptive analysis of each of the key sales. Details of the comparable sales are included in

the Appendix.



Land Transactions & AnalysisLand Transactions & AnalysisLand Transactions & AnalysisLand Transactions & Analysis

SubjectSubjectSubjectSubject

Address54-60 Shepherd Road,

Oakville

Transaction Date -----

Transaction Status -----

Transaction Price -----

Land Use/Zoning Urban Centre/H17-M U3

Site Area (Acres) 1.37 Acres

Square Foot Buildable 202,439 SF

Density 3.39 X

Value Per Square Foot Buildable -----

Value per Acre

Property Rights Conveyed Fee Simple Fee Simple None Fee Simple None Fee Simple None Fee Simple None Fee Simple None

Financing ----- Cash None Cash None Cash None Cash None Cash None

Conditions of Sale ----- Arm's Length None Arm's Length None Arm's Length None Arm's Length None Arm's Length None

M arket Conditions (Time) 17-Aug-15 343 days Upward 420 days Upward 542 days Upward 703 days Upward 859 days Upward

Location Very Good Good Excellent Good Very Good Average

Access Very Good Very Good Very Good Very Good Very Good Very Good

Physical Characterisitics

Site Configuration Regular Comparable None Comparable None Comparable None Comparable None Comparable None

Improvements Improved Improved None Improved None Vacant Downward Vacant Downward Improved None

Development Characteristics

Timing of Development Application Submitted Approved DownwardApplication

SubmittedNone

Application

SubmittedNone

Application

SubmittedNone

Application

SubmittedUpward

Development Size 202,439 347,500 SF Upward 270,183 SF Downward 58,530 SF Downward 340,000 SF Upward 113,636 SF Downward

Proposed Uses Res/Comm Residential Upward Res/Comm None Residential None Res/Comm None Res/Comm Downward

M otivation None None NonePurchaser

M otivationDownward None None None None None None

Inferior U pw ard Superior D ow nw ard Inferior U pw ard Sim ilar N one Inferior U pw ard

$1,444,252/Acre

Transaction & O ther A djustm ents

O verall C om parability & A djust.

DownwardSignificantly

Upward

$21/BSF

$3,094,911/Acre $4,815,796/Acre $3,904,725/Acre $689,085/Acre

D escription A dj. A dj.D escription

$51/BSF

$22/BSF $22/BSF $22/BSF $22/BSFConclusionConclusionConclusionConclusion Higher ThanHigher ThanHigher ThanHigher Than Lower ThanLower ThanLower ThanLower Than Higher ThanHigher ThanHigher ThanHigher Than Similar ToSimilar ToSimilar ToSimilar To Higher ThanHigher ThanHigher ThanHigher Than

$26/BSF $26/BSF $26/BSF $26/BSF $51/BSF $51/BSF $51/BSF $51/BSF $21/BSF $21/BSF $21/BSF $21/BSF $29/BSF $29/BSF $29/BSF $29/BSF

D escription A dj. D escription A dj. D escription A dj.

Upward None Upward

$29/BSF

$1,250,000 $10,000,000

2.91 Acres 2.88 Acres 1.81 Acres 2.56 Acres

340,000 SF

2.74 X 2.15 X 0.74 X 3.05 X

347,500 SF 270,183 SF 58,530 SF

$26/BSF

1.73 Acres

$22/BSF

1.51 X

113,636 SF

Closed Closed Closed

Harbour Development/DResidential Low Density II and M ixed

Use/C4 and RM 7Residential/R6-C(5) H-58 M ixed Use/H-DW -373 Central Business District/C1-D

Transaction OneTransaction OneTransaction OneTransaction One Transaction TwoTransaction TwoTransaction TwoTransaction Two Transaction ThreeTransaction ThreeTransaction ThreeTransaction Three Transaction FourTransaction FourTransaction FourTransaction Four Transaction FiveTransaction FiveTransaction FiveTransaction Five

Closed Closed

$9,000,000 $13,879,125

1604-1614 Charles Street, W hitby3-7 Benson Avenue; 125, 127, 131, 135,

139, 141 & 143 High Street W est; and 1658 Ritson Road North, Oshawa

2042-2054 Lakeshore Road,

Burlington716 M ain Street East, M ilton

08-Sep-14 23-Jun-14 21-Feb-14 13-Sep-13 10-Apr-13

$2,500,000





Index 1Index 1Index 1Index 1---- 1604160416041604----1614 Charles Street, Whitby: 1614 Charles Street, Whitby: 1614 Charles Street, Whitby: 1614 Charles Street, Whitby: pertains to the sale of residential redevelopment site totaling 2.908

acres, which registered sold on September 8, 2014 for a total consideration of $9,000,000. The development

had been approved for of 387,500 square feet, indicating a unit rate of $23 per buildable square foot. Research

indicates that as of the date of registration, the site was improved with a vacant industrial building.

An Official Plan Amendment and Rezoning Application were submitted in early 2009 which proposed the

development of two high-rise residential towers on a podium. As of its sale date, the OMB had approved the

development for 387,500 square feet of GFA.

When compared to the Subject location, the location of this index is felt to be inferior, given it is situated at a

greater distance from desirable amenities. As such, an upward adjustment is required. No adjustment is felt

warranted to account for the physical characteristics of this index, as the topography of this index is very similar

to that of the Subject. In terms of size, an upward adjustment is necessary to account for the larger size of the

index. Generally, smaller developments will command a premium over larger developments.

The site had been approved for development, at the date of sale, as such a downward adjustment is necessary to

account for the superior development timing of this index. This index is improved to a similar level as the Subject,

thus requiring no adjustment for demolition costs. This index is proposed for residential use only which is inferior

to the Subject and thus requires an upward adjustment.

This index registered sold in September 2014, since which time the residential development market has

improved. In this regard, an upward adjustment has been applied to account for changing market conditions.

Overall, it is reasonably expected that the Subject achieve a unit rate above the $23 per square foot indicated by

this transaction.

Index 2 Index 2 Index 2 Index 2 –––– 3333----7 Benson Avenue; 125, 127, 131, 135, 139, 141 & 143 High Street; and 266, 274, 280 & 290 7 Benson Avenue; 125, 127, 131, 135, 139, 141 & 143 High Street; and 266, 274, 280 & 290 7 Benson Avenue; 125, 127, 131, 135, 139, 141 & 143 High Street; and 266, 274, 280 & 290 7 Benson Avenue; 125, 127, 131, 135, 139, 141 & 143 High Street; and 266, 274, 280 & 290

Lakeshore Road, Mississauga: Lakeshore Road, Mississauga: Lakeshore Road, Mississauga: Lakeshore Road, Mississauga: This index pertains to a land assembly improved with several commercial,

residential and mixed use buildings, situated on the north side of Lakeshore Road West, west of Mississauga Road

North. This index last registered sold on June 23, 2014, for a total consideration of $13,879,125 representing a

buildable rate per square foot of $51.

At the time of sale a Development Application had been submitted pertaining to the lands in this transaction.

However, a new Official Plan Amendment and Rezoning Application (No. OZ 13/016 W1) was submitted on

February 3, 2015 pertaining to the lands in this transaction. The Application proposed the development of an 8-

storey, 173 unit rental retirement apartment building with ground floor retail space, an 8-

storey rental apartment building containing 136 units with ground floor retail space and 16



townhouses. The overall development would have a total gross floor area of approximately 270,183 square feet,

including 8,084 square feet of retail space, and would have a total of 325 residential units, as well as 259 parking

spaces which includes 246 underground spaces.

The development proposed for this index of 270,183 square feet is significantly smaller than the Subject,

requiring a downward adjustment as smaller projects typically attract a higher unit rate per square foot. At the

time of sale, the property was improved to a similar level as the Subject, requiring no adjustment for demolition

costs.

This index is considered to be in a significantly superior location to the Subject, given its closer proximity to Lake

Ontario in the City of Mississauga. In this regard, a significant downward adjustment has been applied. This index

is configured in a similar fashion to the Subject parcels. In this regard, no adjustment has been applied. As of the

date of sale, a development application had been submitted pertaining to this index which is comparable to the

Subject, requiring no adjustment.

The index is a land assembly by the Purchaser who acquired the various adjacent properties between March

2012 and June 2014. It is felt that since this period demand for residential development market has improved,

requiring an upward adjustment. Finally, a downward adjustment is required to account for the purchaser’s extra

motivation to complete the property assembly. Overall, it is felt that the Subject parcels would reasonably

command a unit rate lower than the $51 per square foot of GFA, as indicated by this index.

Index Index Index Index 3333 ---- 1658 Ritson Road North, Oshawa: 1658 Ritson Road North, Oshawa: 1658 Ritson Road North, Oshawa: 1658 Ritson Road North, Oshawa: pertains to the sale of a residential development site totaling 1.814

acres, which registered sold on February 21, 2014 for a total consideration of $1,250,000. The site was proposed

to have a gross floor area of 58,530 square feet, indicating a unit rate of $21 per square foot of gross floor area.

Research indicates that as of the date of registration this index was vacant and unimproved.

A Site Plan Application was submitted on December 23, 2013 which proposed the development of a four storey

residential condominium building with 75 units. The rezoning of the site to permit the proposed development had

been approved by the OMB prior to its sale. The Site Plan had not been approved as of its sale date.

When compared to the Subject location, the location of this index is felt to be inferior as it is located in northern

Oshawa with an inferior level of amenities in close proximity. In this regard, an upward adjustment has been

applied. No adjustment is felt warranted to account for the physical characteristics of this index, as the

topography of this index is very similar to that of the Subject. In terms of size, a downward adjustment is

necessary to account for the smaller size of the index. Generally, smaller developments will

command a premium over larger developments.



The parcel had been approved for rezoning, at the date of sale, however, site plan approval had not been

received, which is felt to be similar to the Subject. As such, no is required to account for the superior

development time line of this index. This index was vacant which is felt to be superior to the Subject, thus

requiring a downward adjustment to account for the demolition costs associated. This index is proposed for

residential use only which is inferior to the Subject and thus requires an upward adjustment.

This index registered sold in February 2014, since which time the residential development market has improved.

In this regard, an upward adjustment has been applied to account for changing market conditions. Overall, it is

reasonably expected that the Subject achieve a unit rate above the $21 per square foot indicated by this

transaction.

Index Index Index Index 4444 –––– 2042204220422042----2054 Lakesho2054 Lakesho2054 Lakesho2054 Lakeshore Road, Burlington: re Road, Burlington: re Road, Burlington: re Road, Burlington: pertains to the sale of a residential redevelopment site

totaling 2.561 acres, which registered sold on September 13, 2013 for a total consideration of $10,000,000. The

Site was proposed to have a gross floor area of 340,000 square feet, indicating a unit rate of $29 per square foot

of gross floor area. Research indicates that as of the date of registration this index was vacant and unimproved.

A Site Plan Application was submitted in September, 2012 which proposed the development of two residential

condominium buildings of 7 and 22 storeys, respectively, and an 8-storey hotel. The Site Plan had not been

approved as of its sale date.

When compared to the Subject location, the location of this index is felt to be comparable given both are located

in proximity to a similar level of amenities. As such, no adjustment is required. No adjustment is felt warranted to

account for the physical characteristics of this index, as the topography of this index is very similar to that of the

Subject. In terms of size, an upward adjustment is necessary to account for the larger size of the index.

Generally, smaller developments will command a premium over larger developments.

This index required only Site Plan Approval before development could begin which is felt to be similar to the

Subject, as such no adjustment is necessary to account for the development timing of this index. This index was

vacant which is felt to be superior to the Subject, thus requiring a downward adjustment to account for the

demolition costs associated. This index is proposed for residential and commercial use which is similar to the

Subject and thus requires no adjustment.

This index registered sold in September 2013, since which time the residential development market has



improved. In this regard, an upward adjustment has been applied to account for changing market conditions.

Overall, it is reasonably expected that the Subject achieve a unit rate generally in line with the $29 per square

foot indicated by this transaction.

Index Index Index Index 5555 –––– 716 Main Street East716 Main Street East716 Main Street East716 Main Street East, , , , MiltonMiltonMiltonMilton: : : : pertains to the sale of a residential redevelopment site totaling 1.73

acres, which registered sold on April 10, 2013 for a total consideration of $2,500,000. The site was proposed to

have a gross floor area of 113,636 square feet, indicating a unit rate of $22 per square foot of gross floor area.

Research indicates that as of the date of registration this index was improved with a single tenant industrial

building.

An Official Plan Amendment and Rezoning Application (No. PD-024-14) were submitted on May 12, 2014

pertaining to the land in this transaction. The Application proposed the development of a twelve storey, 118 unit

residential condominium development for a not for profit housing corporation. The development would contain

approximately 133 surface parking spaces.

When compared to the Subject location, the location of this index is felt to be inferior given its location within the

less desirable municipality of Milton. As such, an upward adjustment is required. No adjustment is felt warranted

to account for the physical characteristics of this index, as the topography of this index is very similar to that of

the Subject. In terms of size, a downward adjustment is necessary to account for the smaller size of the index.

Generally, smaller developments will command a premium over larger developments.

This index required both an Official Plan Application and Zoning Amendment to permit development. As the Time

of its sale it was not the object of a development application which is felt to be inferior to the Subject, as such an

upward adjustment is necessary to account for the development timing of this index. This index was improved

with a single tenant industrial building which is felt to be comparable to the Subject, thus requiring no adjustment

to account for the demolition costs associated. This index is proposed for residential use only which is inferior to

the Subject and thus requires an upward adjustment.

This index registered sold in April 2013, since which time the residential development market has improved. In

this regard, an upward adjustment has been applied to account for changing market conditions. Overall, it is

reasonably expected that the Subject achieve a unit rate above the $22 per square foot indicated by this

transaction



The key comparable sales transacted between April 2013 and September 2014 for rates between $22 and $51

per square foot of estimated gross buildable area with an average rate of $30. The Subject features a strong

location in close proximity to desirable residential neighborhoods with convenient access to the amenities and

transit options including the Oakville GO Station.

None of the comparables are considered to be ideal given their locations and sizes, however, Index 4 provides the

best comparison of the Subject in terms of locational characteristics while Index 2 provides the best comparable

in terms of development size. In addition, Index 2 has a similar development timeline as the Subject. These

comparables indicated a range for the Subject of $29 to $51 per square foot range. Overall the comparables

provide a good indication of achievable rates per square foot buildable for high density developments outside of

Metro Toronto and the more popular York Region municipalities.

Given the Subject Property is a well located development site which is the object of a Site Plan Application, it is

felt that a rate at the low end of the narrowed range would be appropriate. We have utilized a rate of $30.00,

which is reflective of the Subject property location.

Based upon the foregoing, it is our opinion that the market value of the subject land by the Direct Comparison

Approach, as at August 17, 2015 is:

Value Matrix - Land ValuationValue Matrix - Land ValuationValue Matrix - Land ValuationValue Matrix - Land Valuation

Development Size Value Per SF Value(1)

202,439 $25 $5,060,000$5,060,000$5,060,000$5,060,000

202,439 $30 $6,070,000$6,070,000$6,070,000$6,070,000

202,439 $35 $7,090,000$7,090,000$7,090,000$7,090,000

(1) Rounded to nearest $10,000

Development land is subjective and includes many influencing factors including service availability, land

entitlements, restricted development areas and other planning, heritage and built form restrictions. The value

conclusion contained herein is predicated on documentation provided by the client and information sourced from

municipal agents, brokers and developers in the market. In addition, we have relied on several Extraordinary

Assumptions. Any alterations to either the information provided or the assumptions in this report may have a

material impact on the value contained herein.



“As Complete” Scenario Overall Income Capitalization Revenue and Expense Analysis To estimate the market value of a property by the Income Approach, the main criteria for the measurement of value is

the property's ability to generate income. To this end, an analysis of the potential income and the probable expenses

associated with maintaining this income stream is undertaken in order to estimate the net operating income the

property is capable of producing.

The net operating income is then converted into an expression of market value through the application of an

appropriate technique. The most commonly utilized methods for valuing real estate such as the subject are the Overall

Income (Direct) Capitalization and Discounted Cash Flow techniques. The Overall Income Capitalization method has

been included in our analysis.

Tenancy Summary and Profile Suite Mix The project includes a total of 203 units and comprises a mixture of guest, live

work, one bedroom, one bedroom + den, two bedroom, two bedroom + den, three

bedroom and three bedroom + den suites.

Occupancy As of the effective date, the property was assumed to be fully leased.

Tenant Profile The tenants in place are all assumed to have been vetted with limited potential for

non-payment of rent. A non-payment allowance will be included in our vacancy

and bad debt provision.

Leasing Practice/Status All units are assumed to be leased on a semi gross basis with tenants responsible

for payment of phone and cable.

CMHC Market Data According to Canada Mortgage and Housing Corporation annual rental market

report, Fall 2014, average rents within the Subject’s market were as follows;

Suite TypeSuite TypeSuite TypeSuite Type Oct-13Oct-13Oct-13Oct-13 Oct-14Oct-14Oct-14Oct-14

One-Bedroom $1,099 $1,131

Two-Bedroom $1,281 $1,317

Three-Bedroom $1,480 $1,523

CMHC : City of OakvilleCMHC : City of OakvilleCMHC : City of OakvilleCMHC : City of Oakville

This data reported acts as a guide as it encompasses many buildings from a large

market area.


File Reference: TOR 15-617 Page 37

Market Lease Survey Our client has conducted an in-depth rental analysis which is beyond the scope of

this report. We have undertaken our own residential rental market survey in order

to determine appropriate market rents. Our survey is summarized below.

Index Address Nearest Major

IntersectionOne Bedroom

Two

BedroomComments

1 -

1499

Nottinghill

Gate, Oakville

Upper Middle Road &

Nottinghill Gaten/a $2,050

1200-1399 sqft. Exercise room, lockers, minutes to

local hospital. Ample parking available. High-end

building in a safe neighbourhood.

2 -

Oakridge

Heights - 40

Old Mill Road,

Oakville

Cross Avenue &

Cornwall Road$1,600 n/a

Parking and lockers available. 800-899 sqft. Party

room, gym or fitness room, library, patio area,

barbecues, billiards, indoor pool, sauna.

3 - 459 Kerr

Street, Oakville

Kerr & Prince Charles

Driven/a $1,850

800-899 sqft. Kerr Villiage location provides easy

access to many neighbourhoods, restuarants and

shops. Surface parking, no building amenities.

4 -

Windemere

Manor - 205

Lakeshore

Road, Oakville

Lakeshore & Garden $2,800 n/a

1,000-1,399 sqft. Parking available. Billiards room,

board room, library, rooftop terrance, exercise &

party room. Lounge & pool.

5 -

Wyndham

Place - 128

Garden Drive,

Oakville

Garden & Rebecca n/a $1,800 - $2,250

875 - 930 sqft. Parking and lockers available.

Upgraded suites, new building with many amenities

including a party room, lounge, and outdoor

terrance.

6 -

One Eleven

Forsythe - 111

Forsythe

Street, Oakville

Lakeshore & Forsythe n/a $6,0002 bedroom + den, 3 bathrooms, 2320 sqft. Parking

and lockers available.

7 -

472 Brock

Avenue,

Burlington

Ontario & Maple $1,345 - $1,670 $2,055 -$2,925

Newly completed building with an exercise room,

party room, billiards & games room, underground

parking, in suite laudry, staunless steel appliances,

and storage lockers on every floor.

SUBJECT

54-60

Shepherd

Road, Oakville

Kerr & Shepherd

AverageAverageAverageAverage $2,200$2,200$2,200$2,200 $3,300$3,300$3,300$3,300



Residential Market Rent The Subject is a high-density residential building. We have conducted a market

rental survey on similar newly built multi-family rental properties which we have

supported with the in-depth rental survey provided by the client. Our preceding

survey indicates market rental rates for one-bedroom units are in the range of

$1,345 to $2,800 per month. Rental rates for two-bedroom units are in the range

of $1,850 to $2,925 per month. Live work and three bedroom units are not typical

for new builds

Our client has conducted in-depth analysis which indicates that rental rates of

approximately $2,294, $1,914, $1,926, $2,109, $2,700, $3,569, and $3,713 for live

work, one bedroom, one bedroom + den, two bedroom, two bedroom + den, three

bedroom and three bedroom + den units, respectively, would be appropriate for

the Subject development. These suggested rents rates are felt to be reasonable

given that they fall within the market ranges displayed on the previous page.

In addition, it should be noted that new developments in Oakville ranged in price

per square foot from $2.64 to $2.96 for one bedrooms and $1.94 to $2.93 for

two bedrooms. The rents selected fall on the lower to middle end of this range.

Market Rent Based on the previous market rental survey rental rates and considering the

Subject is assumed to be newly developed as well as its location, we have

selected market rents of $2,100, $2,290, $1,900, $1,930, $2,100, $2,700, $3,425,

$3,700, and 2,100 for guest suites, Live Work, one bedroom, one bedroom + den,

two bedroom, two bedroom + den, three bedroom and three bedroom + den

units, respectively.

Projected Base Rent Assuming the building is fully occupied at market rental rates base rental revenue

is projected to be $$$$4,965,4804,965,4804,965,4804,965,480....

Parking Revenue The Subject is proposed to feature a total of 268 parking spaces of which 223

are tenant spaces. The Year 1 parking revenues are projected to be $267,600

based on the 223 tenant spaces. Parking spaces will be rented at a rate of $100

per month, which is deemed to be reasonable given the location and size of the

Subject.

Locker Revenue The Year 1 storage lockers revenues are projected to be $120,600. Lockers will

be rented at a rate of $50 per month, which is deemed to be reasonable.



Other Revenue Other revenue includes miscellaneous income from sources such as cable

contracts, NSF Fees, cleaning and damage fees, etc. We have utilized a figure of

$10,000.

Laundry Revenue In suite laundry machines are provided, thus no laundry revenue will be

generated.

Vacancy

According to Canada Mortgage and Housing Corporation annual rental market

report, Fall 2014, the vacancy rate within the Subject’s market were as follows;

Suite TypeSuite TypeSuite TypeSuite Type Oct-13Oct-13Oct-13Oct-13 Oct-14Oct-14Oct-14Oct-14

One-Bedroom 1.40% 1.20%

Two-Bedroom 1.40% 1.60%

Three-Bedroom 0.80% 1.00%

OverallOverallOverallOverall 1.20%1.20%1.20%1.20% 1.27%1.27%1.27%1.27%

CMHC : City of OakvilleCMHC : City of OakvilleCMHC : City of OakvilleCMHC : City of Oakville

Our vacancy allowance selection includes credit loss (slippage due to turnover,

bad debt, etc.) and an allowance for vacancy. With regard to vacancy rates

reported by CMHC, the Subject’s current vacancy rate, and reported vacancy

rates of competing product, we have applied a combined vacancy and credit loss

allowance of 2.0% to all revenue sources as they vary by occupancy level.

Effective Gross Income Deducting the Vacancy Allowance above from the Potential Gross Income

forecast demonstrates the effective gross income for the building. The effective

gross income equates to $5,2$5,2$5,2$5,256565656,,,,406406406406....

Pro FormaPro FormaPro FormaPro FormaColliers Colliers Colliers Colliers

ProjectionProjectionProjectionProjection

Residential Rental Income $4,951,020 $4,965,480

Parking Revenue $321,600 $267,600

Locker Revenue $120,600 $120,600

Other Revenue - $10,000

Potential Gross Income $5,393,220 $5,363,680

Less Vacancy (2.0%) ($107,644) ($107,274)

Effective Gross IncomeEffective Gross IncomeEffective Gross IncomeEffective Gross Income $5,285,576$5,285,576$5,285,576$5,285,576 $5,256,406$5,256,406$5,256,406$5,256,406

Historic & Projected Effective Gross IncomeHistoric & Projected Effective Gross IncomeHistoric & Projected Effective Gross IncomeHistoric & Projected Effective Gross Income



Expense Analysis Actual/Budgeted Actual/Budgeted Actual/Budgeted Actual/Budgeted Operating ExpensesOperating ExpensesOperating ExpensesOperating Expenses

Following are the projected realty tax and operating expenses for the property:

Operating Expenses Operating expenses relate to those items that the property must incur in order to

maintain the income stream of the property. These expenses consist of fixed costs and

variable costs.

Fixed costs tend to remain stable regardless of the occupancy level of the property and

include, but are not limited to, property taxes and insurance.

Variable costs vary with the property’s occupancy level and include, but are not limited

to, utilities and repairs and maintenance.

Pro FormaPro FormaPro FormaPro FormaProjected Projected Projected Projected

ExpensesExpensesExpensesExpenses

Per Per Per Per

SuiteSuiteSuiteSuite%%%%

Property Taxes $470,577 $470,577 $2,318 36.70%

Insurance $33,495 $30,450 $150 2.37%

Utilities $263,900 $263,900 $1,300 20.58%

Management $211,414 $207,891 $1,024 16.21%

Repairs and Maintenance $203,000 $162,400 $800 12.66%

Office and General - $25,375 $125 1.98%

Salaries anad Benefits $120,000 $121,800 $600 9.50%

Total Taxes & Operating Total Taxes & Operating Total Taxes & Operating Total Taxes & Operating

CostsCostsCostsCosts$1,302,386$1,302,386$1,302,386$1,302,386 $1,282,393$1,282,393$1,282,393$1,282,393 $6,317$6,317$6,317$6,317 100%100%100%100%

Projected Realty Taxes & Operating CostsProjected Realty Taxes & Operating CostsProjected Realty Taxes & Operating CostsProjected Realty Taxes & Operating Costs

STABILIZEDSTABILIZEDSTABILIZEDSTABILIZEDHistoric and BudgetedHistoric and BudgetedHistoric and BudgetedHistoric and Budgeted

Realty Taxes We have not been provided with a tax bill and have relied upon the Year 1 amount as

provided by the client. We have assumed this figure to be accurate.



Insurance Insurance premiums are reflective and not limited to the development type, size and

construction, availability and proximity of protective services, previous type of claims

and hindrances (swimming pools, playgrounds). Generally, the per unit expense ranges

from $75 to $125 for a property of this type. We have forecast this expense at $30,450

($150 per unit) which is higher than this range.

Utilities

Utility expenses category relates to water/sewer, heat and electrical supply. The project

utilities from Year 1 are indicated to be $263,900. We have utilized an annual figure of

$263,900 or $1,300 per units which is in line with market norms.

Management

Currently, typical management fees for a property of this size are in the range of 3.0%

to 4.0% of EGI. A purchaser of a rental property would likely negotiate a property

management fee calculated at 3.50% as per industry norm for a building of this size.

We have stabilized this expense at 3.50% of Effective Gross Income (plus HST),

resulting in an estimated management expense of $207,891.

Repairs and

Maintenance

This category includes repairs and maintenance to the garbage removal systems, pest

control, snow removal, landscaping, fire equipment, painting and plastering, recreation

areas, cleaning, general repairs, cleaning supplies, HVAC contract surcharges, non-

capital mechanical, plumbing, appliance and electrical repairs.

The market indicates a range from a low of $650 to high of $850 per unit depending on

the location, complex size, age/condition, type and quality of improvements and

recreation facilities.

As maintenance items can vary, a prudent investor typically stabilizes this expense at a

rate consistent with market levels over the longer term and anticipated over the holding

period of the asset. With respect to the nature, the size, age/condition and quality of

improvements, continued maintenance and repairs to the complex and units is required

to maintain a low occupancy and tenant turnover.

We feel, given the age and quality of the building, this expense should lie at $800 per

unit or $162,400 per annum.



Office and General

This category includes delivery, office supplies, telephone, internet and miscellaneous

expenses. Typically, this expense runs in the range of $75 to $125 per unit. We have

utilized a rate at the high end of the range at $125. This unit rate leads to an expense

total of $23,375.

Salaries and

Benefits

Our estimate of salaries and benefits includes a single superintendent on-site and an

allowance for additional contract or casual staff (leasing/cleaning/maintenance). Our

total estimate of $121,800 represents a rate per unit of $600.

Operating Cost

Survey

In order to determine the reasonableness of the Subject’s operating costs, we have

referenced our database of recently appraised buildings and sales transactions from an

array of buildings in the Toronto Area.

Based on the above noted data, it appears that the subject operating costs are

reasonable. Our survey suggests that buildings that would most represent the Subject

property would operate at an expense ratio between 23% and 35%. The subject’s

operating expense ratio is 24% which falls within this range and is therefore considered

reasonable and stabilized.



PPPProrororo Forma Income Forma Income Forma Income Forma Income StatementStatementStatementStatement

Based on the analysis, a Pro Forma Income Statement for the property has been constructed:

Residential Rental Revenue $4,965,480

Parking Revenue $267,600

Locker Revenue $120,600

Other Revenue $10,000

Potential Gross Income $5,363,680

Residential Vacancy & Bad Debt Allowance @ 2.00% -$107,274

Effective Gross IncomeEffective Gross IncomeEffective Gross IncomeEffective Gross Income $5,256,406$5,256,406$5,256,406$5,256,406

$/Suite$/Suite$/Suite$/Suite % EGI% EGI% EGI% EGI TotalTotalTotalTotal

Property Taxes $2,318 8.95% $470,577

Insurance $150 0.58% $30,450

Utilities $1,300 5.02% $263,900

Management $1,024 3.96% $207,891

Repairs and Maintenance $800 3.09% $162,400

Office and General $125 0.48% $25,375

Salaries and Benefits $600 2.32% $121,800

Total ExpensesTotal ExpensesTotal ExpensesTotal Expenses $1,282,393$1,282,393$1,282,393$1,282,393

24%24%24%24%

$3,974,014$3,974,014$3,974,014$3,974,014Net Operating IncomeNet Operating IncomeNet Operating IncomeNet Operating Income

Operating Expense RatioOperating Expense RatioOperating Expense RatioOperating Expense Ratio

Pro Forma Income StatementPro Forma Income StatementPro Forma Income StatementPro Forma Income Statement

54-60 Shepherd Rd54-60 Shepherd Rd54-60 Shepherd Rd54-60 Shepherd Rd

IncomeIncomeIncomeIncome

Expenses Expenses Expenses Expenses

The 2015 estimated stabilized expense ratio of 54-60 Shepherd Road is 24% of Effective Gross Income which is at

the low end of the normal range for high density multi-family developments such as the Subject.



Investment AnalysisInvestment AnalysisInvestment AnalysisInvestment Analysis Investment AlternativesInvestment AlternativesInvestment AlternativesInvestment Alternatives Following are current investment yields with respect to various alternative

investments.

Current

Pr ime Rate 2.70%

Long Term Canada Bond 2.16%

REIT Un its (CREIT) 4.38%

REIT Un its (RioCan) 5.25%

Sou rce : T D B a nk , B ank o f Cana da, G lob e Inv es to r Las t Upd a te d Ju ly 3 0 , 201 5

Investment Alternatives

Real Estate SurveysReal Estate SurveysReal Estate SurveysReal Estate Surveys Following are the results of the most recent commercial real estate return surveys,

as expressed by overall capitalization rates.

Investment Type Overall Capitalization Rates Discount Rates

Industrial

Single 5.25% - 5.75% 6.00% - 8.00%

Multi 6.25% - 7.25% 6.25% - 8.00%

Downtown Office

Downtown - Class 'A' 4.50% - 5.50% 5.25% - 7.00%

Downtown - Class 'B' 5.25% - 6.25% 7.75% - 8.00%

Suburban Office

Suburban - Class 'A' 6.00% - 7.25%

Suburban - Class 'B' 6.25% - 7.25%

Retail

Regional/Power 4.75% - 5.75% 4.50% - 6.75%

Community Centres 6.00% - 6.75%

Strip Plaza 5.50% - 6.25% 6.25% - 8.00%

Multi-Residential

High Rise 3.50% - 4.75%

Low Rise 3.50% - 4.75% 5.50% - 6.75%

Hotel

Urban Full Service 6.00% - 7.50%

Select Service 7.50% - 8.50%

Limited Service 9.00% - 11.00%

So u rce : C ollie rs (Cap Ra tes)

Q2 2015 Investment Parameters - Toronto

Comparable Comparable Comparable Comparable

TransactionsTransactionsTransactionsTransactions

The most appropriate method of determining an appropriate overall capitalization

rate is best served through an analysis of current market activity. In consideration

of the characteristics described above, the transactions summarized in the table on

the following page have been selected and analyzed.



Market Data Presented are several comparable multi-family rental transactions in the Municipalities of Toronto, Mississauga and Burlington over the past 26 months.

The selected comparables are considered to provide an adequate basis from which to estimate the required investment parameters applicable to the

subject.

Index Index Index Index AddressAddressAddressAddress Sale PriceSale PriceSale PriceSale Price VendorVendorVendorVendor Stabilized OCRStabilized OCRStabilized OCRStabilized OCR

No.No.No.No. CityCityCityCity Sale DateSale DateSale DateSale Date PurchaserPurchaserPurchaserPurchaser Sale Price/UnitSale Price/UnitSale Price/UnitSale Price/Unit CommentsCommentsCommentsComments

# of Units# of Units# of Units# of Units NOI/UnitNOI/UnitNOI/UnitNOI/Unit

2770 Aquitaine Avenue $52,300,000 The England Group 4.50% 9 storey building

Mississauga June-15 Homestead Land Holdings Limited $290,556 94 1BR, 140 2BR, 8 3BR units

180 $13,075 Surface and underground parking

106 Parkway Forest Drive $25,750,000 El-ad Canada Group 4.00% 7 storey building

North York May-15 Homestead Land Holdings Limited $265,464 1, 2, & 3 Bedroom suites


25 Fisherville Road $42,775,000 Marika Corporation 4.00% 18 storey building

North York April-15 Starlight Apartments $199,883 51 1BR, 107 2BR, 56 3BR units


3055 Glencrest Road $23,000,000 K.A.F. Development Limited 3.80% 13 storey building

Burlington March-15 CAPREIT $209,091 39 1BR, 59 2BR, 12 3BR units

110 $7,945 156 parking spaces

120 Dundas Street East $27,700,000 The Skyline Group 4.87% 12 storey apartment building

Mississauga July-13 Starlight Apartments $178,710 1 Bach, 66 1BR, 44 2BR, 44 3BR units


$33,395,000 El-ad Canada Group 4.25%

May-13 Homestead Land Holdings Limited $318,048

Toronto 105 $13,517 30 1BR, 27 2BR, 34 3BR, and 14 4BR units6

472 Brock Avenue $39,850,000 Molinaro Group - 14 Storey Apartment Building

Burlington June-15 Homestead Land Holdings Limited $346,522 43 1BR, 72 2BR units

115 - Surface and underground parking6

7 Storey Apartment Building & Two 3

Storey Townhouse Blocks

2

7

SubjectSubjectSubjectSubject 54-60 Shepherd Rd54-60 Shepherd Rd54-60 Shepherd Rd54-60 Shepherd Rd 203203203203

Capitalization Rate SalesCapitalization Rate SalesCapitalization Rate SalesCapitalization Rate Sales

3

4

6

1

5

85 & 95 Forest Manor Road and 130

Parkway Forest Drive



Significant Investment Characteristics of Subject The following summarizes the major investment attributes of the property that potential investors would consider

when determining an appropriate return and yield when making a purchase decision.

Location The property offers an attractive location within close proximity to Kerr Street and

its associated amenities. The area is characterized by stable residential

neighbourhoods and commercial uses which are designated for redevelopment

with higher density uses.

Physical Attributes The Subject building is attractive and is assumed to be in very good overall

condition which does not require any capital expenditure.

Operational The subject is assumed to be fully occupied as of the effective date of this report.

The operating expense ratio for the Subject is at the low end of the market range.

Multi-residential real estate has demonstrated strong performance in the current

economy and institutional investors are increasing their capital allocation to this

asset class to take advantage of that strength.

Market As per CHMC, rental rates have trended upward over the past year. There is good

demand for rental product throughout the City. Rental rates should remain strong

for the foreseeable future.

Multi-unit residential is typically the most stable asset class and in some respects

is counter cyclical. Capitalization rates have continued to decrease, especially for

well-located assets that have benefitted from capital investment.

Conclusions

Positive Aspects The Subject property demonstrates an attractive location and high quality finishes.

Negative Aspects As a new build the subject has little upside potential. In addition, as a high end

apartment the subject is more susceptible to losing tenants due to low mortgage

rates.



Capitalization rates tend to vary between properties depending to some extent on such factors as location, size

and type of development, quality and condition of improvements, and amenities offered. Combining all of these

features with considerations of leasing history and trends, strength of tenancy and income security, the overall

capitalization rate tends generally to reflect the perceived quality and durability of the property's income earning

capacity.

Properties with a strong rental history and the perceived potential for an increase in revenue tend to trade at

comparatively low overall rates as compared to properties which have a history of vacancy, poor location,

physical deficiencies, or other forms of perceived instability.

Overall capitalization rates have fluctuated substantially through the past few years. A strong investment market,

and readily available financing in the period prior to mid-2008 created a downward trend in acceptable yields in

most major Canadian markets, with capitalization rates declining by 0.5% to 0.75% basis points, and internal

rates of return experiencing a similar reduction, with the average rate consistently down in all markets by

between 0.75% to 1.00%. In 2009, the global credit crisis negatively impacted investor confidence, adversely

impacting the value of commercial real estate. 2009 was characterized by low transaction volume, tightened

lending practices, and an upward movement in capitalization rates and yields in most markets.

Commencing in early 2010, and continuing into 2011 and 2012, the commercial real estate sectors began a

recovery fueled, in part, by less restrictive and more readily available mortgage financing and somewhat of a

consensus between vendors and purchasers that acceptable yield rates experienced a decline. In 2013 and 2014,

multi-family assets have traded at the lowest capitalization rates as compared to any investment grade asset.

Well located quality assets are highly demanded with a limited available supply. A renewed focus on energy

retrofits and efficiencies has been widely implemented coupled with a renewed focus on suite quality. Purpose

built rental stock is slowly being embraced where excess land or density exists.

The sales previously presented are summarized and analyzed below;

Index 1, Index 1, Index 1, Index 1, 2770 Aquitaine Avenue, Mississauga2770 Aquitaine Avenue, Mississauga2770 Aquitaine Avenue, Mississauga2770 Aquitaine Avenue, Mississauga,,,, is a June 2015 transaction of an apartment building located on

the northeast corner of Aquitaine Avenue and Glen Erin Drive. The nine storey building was built in 1980 and

featured 180 units, which included one bedroom, two bedroom, two bedroom + den and three bedroom units. The

property featured both underground and surface parking. This transaction had a reported capitalization rate of

4.50%.

This location is felt to be inferior when compared to the Subject given it is situated in a less desirable

neighborhood. Although this index is in close proximity to numerous desirable amenities, the Subject benefits

from an excellent access to the Queen Elizabeth Way and is close from the Lake. As such, a downward



adjustment is required to account for the location. A slight downward adjustment is required given that this index

is slightly smaller than the Subject, and properties with a larger number of units can operate more efficiently

from a management standpoint. This index was constructed in 1980, whereas the Subject is assumed to be new

and completed in a good and workmanlike manner. As such, a downward adjustment is warranted to account for

the superior condition of the Subject. A significant upward adjustment is required to account for the upside

potential of this index given the affordable rents of this index.

In terms of market conditions, no adjustment is felt warranted given the market for multi residential assets has

remained stable. Overall, given the location, the size and the condition of this index, the Subject should achieve a

capitalization rate lower than the 4.50% indicated by this sale.

Index 2, Index 2, Index 2, Index 2, 106 Parkway Forest Drive, North York106 Parkway Forest Drive, North York106 Parkway Forest Drive, North York106 Parkway Forest Drive, North York,,,, is a May 2015 transaction of a building located on the west

side of Parkway Forrest Drive, south of Sheppard Avenue East. The seven storey building was built in 2014 and

featured 97 units. The property featured both surface and underground parking. This transaction had a reported

capitalization rate of 4.00%.

This location is felt to be superior when compared to the Subject location given its proximity to both highways

401 and 401 that provide an excellent access to Downtown Toronto and to neighboring communities throughout

the GTA, to the Donmills Subway station located 300 metres southwest of this index, and to numerous desirable

amenities including a major shopping center (Fairview Mall) just 200 metres north. As such, an upward

adjustment is required to account for the location. A downward adjustment is required given that this index is

smaller than the Subject, and properties with a larger number of units can operate more efficiently from a

management standpoint. This index was constructed in 2014, as such no adjustment is required for the condition

of the building.


remained stable. Overall, given the superior location of this index, the Subject should achieve a capitalization rate

higher than the 4.00% indicated by this sale.

Index 3, Index 3, Index 3, Index 3, 25 Fisherville Road, North York,25 Fisherville Road, North York,25 Fisherville Road, North York,25 Fisherville Road, North York, is an April 2015 transaction of an eighteen storey apartment building

constructed in 1970 and located on the north side of Fisherville Road, west of Bathurst Street. This index features

one bedroom, two bedroom and three bedroom units. The property featured both surface and underground

parking. The reported capitalization rate for this transaction was 4.00%.



Located in North York, in close proximity to numerous desirable amenities and in a more desirable

neighbourhood, this location is felt to be superior when compared to the Subject. As such, an upward adjustment

is required to account for the location. This index is similar to the Subject in terms of size. As such, no

adjustment is required. This index was constructed in 1970, whereas the Subject is assumed to be new and

completed in a good and workmanlike manner. As such, a downward adjustment is warranted to account for the

superior condition of the Subject. A significant upward adjustment is required to account for the upside potential

of this index given its required capital expenditure as well as its below market rents.


remained stable. Overall, given the superior location and the upside potential of this index, the Subject should

achieve a capitalization rate above the 4.00% indicated by this sale.

Index 4, Index 4, Index 4, Index 4, 3055 Glencrest Road, Burlington3055 Glencrest Road, Burlington3055 Glencrest Road, Burlington3055 Glencrest Road, Burlington,,,, is a March 2015 transaction of a 101 unit apartment building located

on the west side of Glencrest Road, north of Guelph Line. This thirteen storey building features one bedroom, two

bedroom, and thee bedroom units. The property, whose improvements were constructed in 1986, features both

surface and underground parking. The reported capitalization rate for this transaction was 3.80%.

Despite being further southwest than the Subject, this is location is felt to be superior when compared to the

Subject given it is situated in a more desirable neighborhood. As such, an upward adjustment is required to

account for the location. A downward adjustment is required given that this index is smaller than the Subject, and

properties with a larger number of units can operate more efficiently from a management standpoint. This index

was constructed in 1986, whereas the Subject is assumed to be new and completed in a good and workmanlike

manner. As such, a downward adjustment is warranted to account for the superior condition of the Subject. A

significant upward adjustment is required to account for the upside potential of this index given its below market

rents.


remained stable. Overall, given mostly to the location and to the upside potential of this index, the Subject should

achieve a capitalization rate above the 3.80% indicated by this sale.

Index 5, Index 5, Index 5, Index 5, 120 Dundas Street East, Mississauga120 Dundas Street East, Mississauga120 Dundas Street East, Mississauga120 Dundas Street East, Mississauga, is a July 2013 purchase of a 155 unit apartment building located

on the south side of Dundas Street East, east of Hurontario Street. This twelve storey apartment building features

bachelor, one bedroom, two bedroom and three bedroom units. The property, whose improvements were

constructed in 1960, features both surface and underground parking. The reported capitalization rate for this

transaction was 4.87%.



This location is felt to be inferior when compared to the Subject given it is situated in a less desirable

neighborhood. Although this index is in close proximity to numerous desirable amenities, the Subject benefits

from an excellent access to the Queen Elizabeth Way and is close from the Lake. As such, a downward



management standpoint. This index was constructed in 1970, whereas the Subject is assumed to be new and

completed in a good and workmanlike manner. As such, a downward adjustment is warranted to account for the

superior condition of the Subject. A significant upward adjustment is required to account for the upside potential

of this index given its required capital expenditure as well as its below market rents.

In terms of market conditions, a downward adjustment is felt warranted given the market for multi residential

assets has improved. Overall, given the location, the size, the date of sale and the upside potential of this index,

the Subject should achieve a capitalization rate lower than the 4.87 % indicated by this sale.

Index 6, Index 6, Index 6, Index 6, 85 & 95 Forrest Manor Road and 130 Parkway Forrest Drive, Toronto85 & 95 Forrest Manor Road and 130 Parkway Forrest Drive, Toronto85 & 95 Forrest Manor Road and 130 Parkway Forrest Drive, Toronto85 & 95 Forrest Manor Road and 130 Parkway Forrest Drive, Toronto, is a May 2013 transaction of

a seven storey apartment building and two townhouse buildings located on the east side of Forrest Manor Road,

south of Sheppard Avenue East. These buildings feature one bedroom, two bedroom and three bedroom units,

and four bedroom townhouse units. The property, whose improvements were constructed in 2001, features both

surface and underground parking. The reported capitalization rate for this transaction was 4.25%.

This location is felt to be superior when compared to the Subject location given its proximity to both highways

401 and 401 that provide an excellent access to Downtown Toronto and to neighboring communities throughout

the GTA, to the Donmills Subway station located 250 metres southwest of this index, and to numerous desirable

amenities including a major shopping center (Fairview Mall) just 200 metres north. As such, an upward



management standpoint. An upward adjustment is required to account for the upside potential of this index given

the townhouse units which are highly desirable assets

In terms of market conditions, a downward adjustment is felt warranted given the market for multi residential

assets has improved. Overall, the Subject should achieve a capitalization rate generally in line with the 4.25 %

indicated by this sale.



Conclusion The sales summarized in the table on the preceding pages relate to seven multi-family transactions which

occurred between May 2013 and June 2015. The overall investments range from a low of $23,000,000 as

indicated by the sale of Index 4, to a high of $42,775,000, as indicated by the sale of Index 3. The range in

stabilized overall capitalization rates suggested by the comparables represents a range of 3.80% to 4.87%. Note

many of the transactions represent an array of unit sizes.

It should also be noted that the target market for the Subject would include pension funds, REIT’s, and large real

estate firms. It has been our experience that this quality of purchaser is aggressively pursuing product. Quality of

the asset and income integrity, are two key factors that would affect the purchase price of the subject.

In selecting a reasonable capitalization rate to be applied to the Subject project, consideration must be given to

the various attributes of the Subject project. The Subject project demonstrates an attractive location and is in

very good condition throughout, however, the Subject would have limited upside potential given that it is a new

build and upscale apartments are at a greater risk of losing tenants due to low mortgage rates.

Taking into consideration the investment characteristics of the Subject including its age, location, strength of

tenancy, parking component, building quality and the stability of the income in place, it is our opinion that an

overall capitalization rate in the order of 4.00% to 4.50% would be appropriate.

With all factors considered, a capitalization rate of 4.25% is considered to be reasonable and applicable to the

Subject. We feel the strong occupancy, location and construction of the building warrants a rate in the middle of

the aforementioned narrowed range.



Direct Capitalization On the basis of our Revenue and Expense Analysis, the Stabilized Net Operating Income for the forthcoming 12

months is projected to be $3,974,014.

As summarized on the previous page, capitalization rates for properties similar to the Subject are trading at

“going-in” returns of 3.80% to 4.87%. Taking into consideration the investment characteristics of the property

including its location, size, building quality and security of income as well as the current debt environment, it is

our opinion that an overall capitalization rate between 4.00% to 4.50% would be appropriate. Applying these

rates to the projected Year One net operating income results in the following estimate of value;

OCR NOI Value Rounded ValueRounded ValueRounded ValueRounded Value (1)(1)(1)(1)

4.00% $3,974,014 $99,350,338 $99,400,000$99,400,000$99,400,000$99,400,000

4.25% $3,974,014 $93,506,201 $93,500,000$93,500,000$93,500,000$93,500,000

4.50% $3,974,014 $88,311,412 $88,300,000$88,300,000$88,300,000$88,300,000


Value Matrix - Direct Income CapitalizationValue Matrix - Direct Income CapitalizationValue Matrix - Direct Income CapitalizationValue Matrix - Direct Income Capitalization

The foregoing analysis indicates an estimated value by way of Direct Income Capitalization of between

$$$$88,88,88,88,333300000000,000,000,000,000 and $$$$99,99,99,99,444400000000,000 ,000 ,000 ,000 (rounded) as of the effective date of this valuation. A low to mid-range value of

$$$$93,93,93,93,555500000000,000,000,000,000 is concluded via the Income Approach for the subject building.



Direct Comparison Approach

The Direct Comparison Approach is based on the Principle of Substitution which maintains that a prudent

purchaser would not pay more for a property than what it would cost to purchase a suitable alternative property

that exhibits similar physical characteristics, tenancy, location, etc. Within this approach, the property being

valued is compared to properties that have sold recently or are currently listed and are considered to be

relatively similar to the subject property. Typically, a unit of comparison is used to facilitate the analysis. In the

case, the sale price per suite is the most commonly used unit of comparison.

The sale indices presented in the previous section represent transactions involving similar investment (multi-

family properties) in the Greater Toronto market area. In valuing the subject property, it has been compared to each

of the index sales. The basis for comparison included the consideration of the following:

• Property Rights Conveyed

• Financing Terms

• Conditions of Sale

• Market Conditions

• Location

• Physical Characteristics

• Economic Characteristics

AnalysisAnalysisAnalysisAnalysis

Property Rights

Conveyed

• Rights conveyed relates to the type of ownership transferred. In this case all the sale

transactions related to the fee simple estate as rented (leased fee estate). As such, no

adjustments under this category are required.

Financing Terms • Refers to the financing arrangements made when the property sold. In this regard,

financing is not believed to have been a significant motivating factor in any of the sales

summarized and therefore no adjustments are required.

Conditions of Sale • It is not believed that any of the vendors were unduly motivated to divest the properties

and therefore no adjustments are required for motivation.

Market Conditions • Unit prices have increased for multi-family properties over the time in which the

comparables were sold. Accordingly, upward adjustments have been applied to

selected sales.



Location • In our opinion, the location influences of the asset are generally reflected in the

operating performance level of the property.

Physical

Characteristics

• As was the case with location, in our opinion differences in overall physical condition

are largely reflected by the property’s operating performance.

• Overall physical attributes reflected in operating performance would include unit floor

plans in terms of number of bedrooms, bathrooms, laundry facilities as well as

age/condition, overall management, security and maintenance of the property, as well

as type of parking, utilities and recreation facilities.

Economic

Characteristics

• As the subject represents an investment property, we have considered the relationship

between net operating income per unit and the indicated sale price per unit of the

comparables relative to that forecast for the subject property. The following chart

summarizes this relationship between net operating income and price, on a per unit

basis, for each of the transactions analyzed, along with NOI adjusted sale prices per

unit for each of the comparable properties.

• Adjustments made under this category are based solely on the relationship between

the stabilized operating performances of the indexed properties relative to that of the

subject. It is recalled, however, that location and physical differences between the

index properties and the subject are implicitly included in this adjustment.

Income Adjusted Direct Comparison

Subject Index 1 Index 2 Index 3 Index 4 Index 5 Index 6 Index 7

Unadjusted Price per Unit ------------------------ $290,556 $265,464 $199,883 $209,091 $178,710 $318,048 $346,522

NOI per Unit $19,576$19,576$19,576$19,576 $13,075 $10,619 $7,995 $7,945 $8,703 $13,517 -

Adjusted Price per suite ------------------------ $435,032$435,032$435,032$435,032 $489,411$489,411$489,411$489,411 $489,411$489,411$489,411$489,411 $515,169$515,169$515,169$515,169 $401,980$401,980$401,980$401,980 $460,622$460,622$460,622$460,622 $346,522$346,522$346,522$346,522

It should be noted that Index 7 is a new building which provides a good indication of achievable rates per unit for

newly developed apartment buildings in the GTA. The building, which features bachelor, one bedroom and two

bedroom units, is located on the south side of Brock Avenue, west of Lakeshore Road in Burlington. The building

which was completed in 2015, transacted for a consideration of $39,850,000 or $346,522 per door on June 11,

2015.

ReconciliationReconciliationReconciliationReconciliation

The above analysis suggests an unadjusted range of values ranging from $178,710 to $346,522 per suite. After

income adjustment, the range narrows between $346,522 and $515,169. The income adjustment process is based

on the premise that a property’s rental income reflects the price tenants are willing to pay and therefore



adjustments for location, size, quality, amenities etc., are built into the rental rates being achieved. As the Direct

Comparison serves as a check against the Income Approach, we have considered this a valid approach.

The Subject building demonstrates a good location, strong occupancy level, rents above market and a building

that is in good condition. Units demonstrate above average rental conditions throughout. Given this, a narrowed

range between $450,000 to $470,000 is felt to be appropriate. Applying the narrowed range in unit values to the

Subject property results in the following range of values:

No. UnitsNo. UnitsNo. UnitsNo. Units $/Suite$/Suite$/Suite$/Suite ValueValueValueValue Rounded ValueRounded ValueRounded ValueRounded Value (1)(1)(1)(1)

203 $450,000 $91,350,000 $91,400,000$91,400,000$91,400,000$91,400,000

203 $460,000 $93,380,000 $93,400,000$93,400,000$93,400,000$93,400,000

203 $470,000 $95,410,000 $95,400,000$95,400,000$95,400,000$95,400,000


Value Matrix - Direct ComparisonValue Matrix - Direct ComparisonValue Matrix - Direct ComparisonValue Matrix - Direct Comparison

In conclusion, a value estimate in the range of $$$$91,40091,40091,40091,400,000 to $,000 to $,000 to $,000 to $95,40095,40095,40095,400,000 ,000 ,000 ,000 using the Direct Comparison

Approach is indicated as of the effective date of the analysis. A value conclusion of $$$$93,40093,40093,40093,400,000 ,000 ,000 ,000 for the Subject

building via the Direct Comparison Approach is concluded in consideration of the overall appeal of the building.



Reconciliation The approaches used in this valuation provide the following values:

Value Conclusion

54-60 Shepherd Rd

Income Approach

Overall Capitalization $93,500,000

Direct Comparison Approach $93,400,000

Cost Approach Not Completed

For Investment properties such as the Subject, potential purchasers would place considerable emphasis on the

income earning potential of the property. In this regard, the Income Approach would be the favoured method of

valuation. Multi-family buildings are typically valued using the Direct Capitalization method within the Income

Approach.

The Direct Comparison Approach, which is primarily used with respect to the valuation of owner occupied building, is

based on the price per unit of similar property transactions. The Direct Comparison Approach, in this case, is

supportive of the indications of value in the Income Approach.

Based on the foregoing, and with most weight applied to the Income Capitalization Method, it is our opinion that the

market value of the property, subject to the assumptions set forth herein, and as at August 17, 2015, was:

Ninety ThreeNinety ThreeNinety ThreeNinety Three Million Million Million Million FiveFiveFiveFive Hundred Thousand Hundred Thousand Hundred Thousand Hundred Thousand DollarsDollarsDollarsDollars

$$$$93,93,93,93,555500000,0000,0000,0000,000

The above value estimate is predicated on an exposure period of two to four months and assumes a sale on the

basis of cash being paid to the vendor.



Appendices

Appendix A Contingent and Limiting Conditions

Appendix B Definitions

Appendix C Comparable Sales – “As Is”

Appendix D Comparable Sales – “As Complete”

Appendix E Certification


File Reference: TOR 15-617

Appendix A

Contingent and Limiting Conditions



Contingent and Limiting Conditions

1.1.1.1. This report has been prepared at the request of John NeilasJohn NeilasJohn NeilasJohn Neilas of Neilas Inc.Neilas Inc.Neilas Inc.Neilas Inc. for the purpose of providing

an estimate of the “As Is” and “As Complete” market values of 54545454----60 Shep60 Shep60 Shep60 Shepherd Roadherd Roadherd Roadherd Road, , , , OakvilleOakvilleOakvilleOakville, , , ,

OntarioOntarioOntarioOntario.... It is not reasonable for any person other than the person or those to whom this report is

addressed to rely upon this appraisal without first obtaining written authorization from John NeilasJohn NeilasJohn NeilasJohn Neilas of

Neilas Inc.Neilas Inc.Neilas Inc.Neilas Inc. and the author of this report. This report has been prepared on the assumption that no other

person will rely on it for any other purpose and all liability to all such persons is denied.

2.2.2.2. This report has been prepared at the request of John NeilasJohn NeilasJohn NeilasJohn Neilas of Neilas Inc.Neilas Inc.Neilas Inc.Neilas Inc. and for the exclusive (and

confidential) use of, the recipient as named herein and for the specific purpose and function as stated

herein. All copyright is reserved to the author and this report is considered confidential by the author

and John NeilasJohn NeilasJohn NeilasJohn Neilas of Neilas Inc.Neilas Inc.Neilas Inc.Neilas Inc. Possession of this report, or a copy thereof, does not carry with it the

right to reproduction or publication in any manner, in whole or in part, nor may it be disclosed, quoted

from or referred to in any manner, in whole or in part, without the prior written consent and approval of

the author as to the purpose, form and content of any such disclosure, quotation or reference. Without

limiting the generality of the foregoing, neither all nor any part of the contents of this report shall be

disseminated or otherwise conveyed to the public in any manner whatsoever or through any media

whatsoever or disclosed, quoted from or referred to in any report, financial statement, prospectus, or

offering memorandum of the client, or in any documents filed with any governmental agency without the

prior written consent and approval of the author as to the purpose, form and content of such

dissemination, disclosure, quotation or reference.

3.3.3.3. The estimated market value of the real estate that is the object of this appraisal pertains to the value of

the leased feeleased feeleased feeleased fee interestinterestinterestinterest in the real property. The property rights appraised herein exclude mineral

rights, if any.

4.4.4.4. The concept of market value presumes reasonable exposure. The exposure period is the estimated

length of time the asset being valued would have been offered on the market prior to the hypothetical

consummation of a sale at market value on the effective date of valuation. The overall concept of

reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate,

sufficient and reasonable effort. The reasonable exposure period is a function not only of time and

effort, but will depend on the type of asset being valued, the state of the market at the date of valuation

and the level at which the asset is priced. (The estimated length of the exposure period needed to

achieve the estimated market value is set forth in the Letter of Transmittal, prefacing this report).

5.5.5.5. The estimate of value contained in this report is founded upon a thorough and diligent examination and

analysis of information gathered and obtained from numerous sources. Certain information has been

accepted at face value, especially if there was no reason to doubt its accuracy. Other empirical data

required interpretative analysis pursuant to the objective of this appraisal. Certain inquiries were outside



the scope of this mandate. For these reasons, the analyses, opinions and conclusions contained in this

report are subject to the following Contingent and Limiting conditions.

6.6.6.6. The property has been valued on the basis that title to the real estate herein appraised is good and

marketable.

7.7.7.7. The author of this report is not qualified to comment on environmental issues that may affect the market

value of the property appraised, including but not limited to pollution or contamination of land, buildings,

water, groundwater or air. Unless expressly stated, the property is assumed to be free and clear of

pollutants and contaminants, including but not limited to moulds or mildews or the conditions that might

give rise to either, and in compliance with all regulatory environmental requirements, government, or

otherwise, and free of any environmental condition, past, present or future, that might affect the market

value of the property appraised. If the party relying on this report requires information about

environmental issues then that party is cautioned to retain an expert qualified in such issues. We

expressly deny any legal liability relating to the effect of environmental issues on the market value of the

property appraised.

8.8.8.8. The legal description of the property and the area of the site were obtained from the Ontario Land

Registry. Further, the plans and sketches contained in this report are included solely to aid the recipient

in visualizing the location of the property, the configuration and boundaries of the site and the relative

position of the improvements on the said lands.

9.9.9.9. The property has been valued on the basis that the real estate is free and clear of all value influencing

encumbrances, encroachments, restrictions or covenants except as may be noted in this report and that

there are no pledges, charges, liens or special assessments outstanding against the property other than

as stated and described herein.

10.10.10.10. The property has been valued on the basis that there are no outstanding liabilities except as expressly

noted herein, pursuant to any agreement with a municipal or other government authority, pursuant to

any contract or agreement pertaining to the ownership and operation of the real estate or pursuant to

any lease or agreement to lease, which may affect the stated value or saleability of the subject property

or any portion thereof.

11.11.11.11. The interpretation of the leases and other contractual agreements, pertaining to the operation and

ownership of the property, as expressed herein, is solely the opinion of the author and should not be

construed as a legal interpretation. Further, the summaries of these contractual agreements are

presented for the sole purpose of giving the reader an overview of the salient facts thereof.

12.12.12.12. The property has been valued on the basis that the real estate complies in all material respects with any

restrictive covenants affecting the site and has been built and is occupied and being operated, in all

material respects, in full compliance with all requirements of law, including all zoning, land use

classification, building, planning, fire and health by-laws, rules, regulations, orders and codes of all

federal, provincial, regional and municipal governmental authorities having jurisdiction with respect

thereto. (It is recognized there may be work orders or other notices of violation of law outstanding with



respect to the real estate and that there may be certain requirements of law preventing occupancy of

the real estate as described in this report. However, such circumstances have not been accounted for in

the appraisal process).

13.13.13.13. Investigations have been undertaken in respect of matters which regulate the use of land. However, no

inquiries have been placed with the fire department, the building inspector, the health department or any

other government regulatory agency, unless such investigations are expressly represented to have been

made in this report. The subject property must comply with such regulations and, if it does not comply,

its non-compliance may affect the market value of this property. To be certain of such compliance,

further investigations may be necessary.

14.14.14.14. The property has been valued on the basis that there is no action, suit, proceeding or investigation

pending or threatened against the real estate or affecting the titular owners of the property, at law or in

equity or before or by any federal, provincial or municipal department, commission, board, bureau,

agency or instrumentality which may adversely influence the value of the real estate herein appraised.

15.15.15.15. The data and statistical information contained herein were gathered from reliable sources and are

believed to be correct. However, these data are not guaranteed for accuracy, even though every attempt

has been made to verify the authenticity of this information as much as possible.

16.16.16.16. The estimated market value of the property does not necessarily represent the value of the underlying

shares, if the asset is so held, as the value of the share could be affected by other considerations.

Further, the estimated market value does not include consideration of any extraordinary financing, rental

or income guarantees, special tax considerations or any other atypical benefits which may influence the

ordinary market value of the property, unless the effects of such special conditions, and the extent of

any special value that may arise therefrom, have been described and measured in this report.

17.17.17.17. Should title to the real estate presently be held (or changed to a holding) by a partnership, in a joint

venture, through a Co-tenancy arrangement or by any other form of divisional ownership, the value of

any fractional interest associated therewith may be more or less than the percentage of ownership

appearing in the contractual agreement pertaining to the structure of such divisional ownership. For the

purposes of our valuation, we have not made any adjustment for the value of a fractional interest.

18.18.18.18. In the event of syndication, the aggregate value of the limited partnership interests may be greater than

the value of the freehold or fee simple interest in the real estate, by reason of the possible contributory

value of non-realty interests or benefits such as provision for tax shelter, potential for capital

appreciation, special investment privileges, particular occupancy and income guarantees, special

financing or extraordinary agreements for management services.

19.19.19.19. Unless otherwise noted, the estimated market value of the property referred to herein is predicated

upon the condition that it would be sold on a cash basis to the vendor subject to any contractual

agreements and encumbrances as noted in this report as-is and where-is, without any contingent

agreements or caveats. Other financial arrangements, good or cumbersome, may affect the price at

which this property might sell in the open market.



20.20.20.20. Should the author of this report be required to give testimony or appear in court or at any

administrative proceeding relating to this appraisal, prior arrangements shall be made beforehand,

including provisions for additional compensation to permit adequate time for preparation and for any

appearances that may be required. However, neither this, nor any other of these assumptions or limiting

conditions, is an attempt to limit the use that might be made of this report should it properly become

evidence in a judicial proceeding. In such a case, it is acknowledged that it is the judicial body which will

decide the use of this report which best serves the administration of justice.

21.21.21.21. Because market conditions, including economic, social and political factors, change rapidly and, on

occasion, without notice or warning, the estimate of market value expressed herein, as of the effective

date of this appraisal, cannot necessarily be relied upon as of any other date without subsequent advice

of the author of this report.

22.22.22.22. The value expressed herein is in Canadian dollars.

23.23.23.23. This report is only valid if it bears the original signature(s) of the author(s).

24.24.24.24. These Contingent and Limiting Conditions shall be read with all changes in number and gender as may

be appropriate or required by the context or by the particulars of this mandate.



Appendix B

Definitions



Definitions

Property InterestsProperty InterestsProperty InterestsProperty Interests

Fee SimpleFee SimpleFee SimpleFee Simple • Absolute ownership unencumbered by any other interest or estate subject only

to the four powers of government.

Leased Fee EstateLeased Fee EstateLeased Fee EstateLeased Fee Estate • An ownership interest held by a landlord with the right of use and occupancy

conveyed by lease to others; the rights of lessor or the leased fee owner and

leased fee are specified by contract terms contained within the lease.

Leasehold EstateLeasehold EstateLeasehold EstateLeasehold Estate • The right to use and occupy real estate for a stated term and under certain

conditions; conveyed by a lease.

General DefinitionsGeneral DefinitionsGeneral DefinitionsGeneral Definitions

Adjusted or Stabilized Overall Capitalization Rate Adjusted or Stabilized Overall Capitalization Rate Adjusted or Stabilized Overall Capitalization Rate Adjusted or Stabilized Overall Capitalization Rate is usually derived from transactions with excessive

vacancy levels or contract rents over/under market levels. In such cases, net operating income is “normalized”

to market levels and the price adjusted to reflect expected costs required to achieve the projected net operating

income.

The Cost ApproachThe Cost ApproachThe Cost ApproachThe Cost Approach to value is based upon the economic principle of substitution, which holds that the value of

a property should not be more than the amount by which one can obtain, by purchase of a site and construction

of a building without undue delay, a property of equal desirability and utility.

Direct or Overall Capitalization Direct or Overall Capitalization Direct or Overall Capitalization Direct or Overall Capitalization refers to the process of converting a single year’s income with a rate or factor

into an indication of value.

The Direct Comparison ApproachThe Direct Comparison ApproachThe Direct Comparison ApproachThe Direct Comparison Approach examines the cost of acquiring equally desirable and valuable substitute

properties, indicated by transactions of comparable properties, within the market area. The characteristics of

the sale properties are compared to the subject property on the basis of time and such features as location, size

and quality of improvements, design features and income generating potential of the property.

Discount RateDiscount RateDiscount RateDiscount Rate is a yield rate used to convert future payments or receipts into a present value.

Discounted Cash Flow AnaDiscounted Cash Flow AnaDiscounted Cash Flow AnaDiscounted Cash Flow Analysislysislysislysis offers an opportunity to account for the anticipated growth or decline in

income over the term of a prescribed holding period. More particularly, the value of the property is equivalent



to the discounted value of future benefits. These benefits represent the annual cash flows (positive or negative)

over a given period of time, plus the net proceeds from the hypothetical sale at the end of the investment

horizon.

Two rates must be selected for an application of the DCF process:

• the internal rate of return or discount rate used to discount the projected receivables;

• an overall capitalization rate used in estimating reversionary value of the asset.

The selection of the discount rate or the internal rate of return is based on comparing the subject to other real

estate opportunities as well as other forms of investments. Some of the more common bench marks in the

selection of the discount rate are the current yields on long term bonds and mortgage interest rates.

Exposure TimeExposure TimeExposure TimeExposure Time is the property's estimated marketing time prior to a hypothetical sale at market value on the

effective date of the appraisal. Reasonable exposure time is a necessary element of a market value definition

but is not a prediction of a specific date of sale.

Highest and Best UsHighest and Best UsHighest and Best UsHighest and Best Use e e e ---- The purpose of a highest and best use analysis is to provide a basis for valuing real

property. Highest and best use is defined by the Appraisal Institute of Canada as:

“that use which is most likely to produce the greatest net return over a period o“that use which is most likely to produce the greatest net return over a period o“that use which is most likely to produce the greatest net return over a period o“that use which is most likely to produce the greatest net return over a period of time.” f time.” f time.” f time.”

The highest and best use must be legally permissible, physically possible, financially The highest and best use must be legally permissible, physically possible, financially The highest and best use must be legally permissible, physically possible, financially The highest and best use must be legally permissible, physically possible, financially

feasible and maximally productive.feasible and maximally productive.feasible and maximally productive.feasible and maximally productive.

The Income ApproachThe Income ApproachThe Income ApproachThe Income Approach to value is utilized to estimate real estate value of income-producing or investment

properties.

InterInterInterInternal Rate of Returnnal Rate of Returnnal Rate of Returnnal Rate of Return is the yield rate that is earned or expected over the period of ownership. It applies to

all expected benefits including the proceeds of sale at the end of the holding period. The IRR is the Rate of

Discount that makes the net present value of an investment equal zero.

Market Value Market Value Market Value Market Value ---- The Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Institute of

Canada define market value as:

"The most probable price which a property should bring in a competitive and o"The most probable price which a property should bring in a competitive and o"The most probable price which a property should bring in a competitive and o"The most probable price which a property should bring in a competitive and open market pen market pen market pen market

under all conditions requisite to a fair sale, the buyer and seller each acting prudently and under all conditions requisite to a fair sale, the buyer and seller each acting prudently and under all conditions requisite to a fair sale, the buyer and seller each acting prudently and 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."knowledgeably, and assuming the price is not affected by undue stimulus."knowledgeably, and assuming the price is not affected by undue stimulus."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 their own best interests;

• A reasonable time is allowed for exposure in the market; and

• Payment is made in cash in Canadian dollars or in terms of financial arrangements comparable thereto.

The price represents the normal consideration for the property sold, unaffected by special or creative financing

or sales concessions granted by anyone associated with the sale.

Net Operating IncomeNet Operating IncomeNet Operating IncomeNet Operating Income is the actual or anticipated net income remaining after all operating expenses are

deducted from effective gross income before debt service and depreciation. Net Operating Income is usually

calculated for the current fiscal year or the forthcoming year.

Overall Capitalization Rate Overall Capitalization Rate Overall Capitalization Rate Overall Capitalization Rate is an income rate that reflects the relationship between a single year’s net

operating income expectancy and the total property price. The Overall Capitalization Rate converts net

operating income into an indication of a property’s overall value.

Reasonable Exposure Time Reasonable Exposure Time Reasonable Exposure Time Reasonable Exposure Time ---- Exposure time is always presumed to precede the effective date of the appraisal.

It may be defined as:

"The estimated length of time the property int"The estimated length of time the property int"The estimated length of time the property int"The estimated length of time the property interest being appraised would have been erest being appraised would have been erest being appraised would have been erest being appraised would have been

offered on the market prior to the hypothetical consummation of a sale at market value offered on the market prior to the hypothetical consummation of a sale at market value offered on the market prior to the hypothetical consummation of a sale at market value offered on the market prior to the hypothetical consummation of a sale at market value

on the effective date of the appraisal. It is a retrospective estimate based upon an on the effective date of the appraisal. It is a retrospective estimate based upon an on the effective date of the appraisal. It is a retrospective estimate based upon an on the effective date of the appraisal. It is a retrospective estimate based upon an

analysis of past events assuming a competitiveanalysis of past events assuming a competitiveanalysis of past events assuming a competitiveanalysis of past events assuming a competitive and open market."and open market."and open market."and open market."

A Yield RateA Yield RateA Yield RateA Yield Rate is applied to a series of individual incomes to obtain a present value of each.



Appendix C

Comparable Sales – “As Is”



Index No. 1 1604 – 1614 Charles Street, Whitby, Ontario

Property DescriptionProperty DescriptionProperty DescriptionProperty Description Location / Legal / Land UseLocation / Legal / Land UseLocation / Legal / Land UseLocation / Legal / Land Use

Property Type Land Address 1604 – 1614 Charles Street Property Sub-Type Residential Municipality Whitby

Site Area 2.908 A Province Ontario

Topography Level

Access/Exposure Very Good Legal 1606 Charles Street: Part of Lots 8, 9, 14 & 15, Block 4, on

Plan H50035 as described in Instrument No. D405505

1610 Charles Street: Part of Lots 8 & 15, Block 4, on Plan

H50035 as described in Instrument No. CO139720 &

designated as Part 18 on Plan 40R-10885

1614 Charles Street: Part of Lots 7 & 16, Block 4, Plan

H50035, Whitby, as described in Instrument No. D374163

Servicing Serviced

Site Improvements Vacant

Transaction DetailsTransaction DetailsTransaction DetailsTransaction Details

Sale Price $9,000,000 (100% Equivalent) Interest Transferred 100 %

Sale Price per BSF $26/BSF

Status Closed

Date 08-Sept-14

Vendor 1675239 Ontario Limited

Purchaser McMurray Street Investments (Scollard

Development Corporation) - Developer

Rights Conveyed Fee Simple

CommentsCommentsCommentsComments

At the time of sale, the property was improved with an industrial building.

An Official Plan Amendment (No. OPA-2009-W/01) and a Rezoning Application (No. Z-02-09) were submitted in early 2009 pertaining to the land in this transaction. The

Applications proposed the development of two 25-storey residential condominium towers with a total of 506 units. The development would have a total gross floor area of

approximately 630,049 square feet and would have 710 parking spaces. It is our understanding that as of the date of sale, municipal services had been provided to the property.

As a result of the foregoing, development can be expected to commence immediately.

Subsequent to the date of sale, the Purchaser had not initiated marketing of the development.



Index No. 2 3-7 Benson Avenue, 125-143 High Street West; and 266-294 Lakeshore Road West, Mississauga, Ontario


Property Type Land Address 3-7 Benson Avenue, 125-143 High Street West; and 266-

294 Lakeshore Road West

Property Sub-Type Residential Municipality Mississauga


Topography Level

Access/Exposure Very Good Legal Part of Lot 10, Range 1, Toronto Township, as as

described in Instrument No. RO804932

Servicing Serviced

Site Improvements Improved Land Assembly: The subject property is part of a land assembly by the Purchaser. Including

this transaction, the Purchaser acquired various adjacent properties along Lakeshore Road

West, High Street West and Benson Avenue (14 total properties) between March 2012 to June

2014.




Status Closed

Date 23-Jun-14

Vendor An individual(s) acting in his/her own

capacity

Purchaser Tiffany Development (2375684 Ontario Inc.)

- Developer

Document No. n/a



At the time of sale, the property was improved with an automotive repair shop.

An Official Plan Amendment and Rezoning Application (No. OZ 13/016 W1) was submitted on February 3, 2015 pertaining to the land in this transaction and adjacent parcels (2.882

acres total). The Application proposed the development of an 8-storey, 173 unit rental retirement apartment building with ground floor retail space, an 8-storey rental apartment

building containing 136 units with ground floor retail space and 16 townhouses. The overall development would have a total gross floor area of approximately 270,183 square feet,

including 8,084 square feet of retail space, and would have a total of 325 residential units, as well as 259 parking spaces which includes 246 underground spaces.



Index No. 3 1658 Ritson Road North, Toronto, Ontario


Property Type Land Address 1658 Ritson Road North Property Sub-Type Residential Municipality Toronto


Topography Level

Access/Exposure Very Good Legal Part of Lot 5, Sheet 9E, Plan 370, designated as

Parts 2 and 3 on Plan 40R-25744

Servicing Vacant

Site Improvements Un-improved



Sale Price per BSF $21

Status Closed

Date 21-Feb-14

Vendor Arcturus Investment Management Ltd.

Purchaser Mahogany Management (873815 Ontario

Limited) - Developer

Document No. n/a



At the time of sale, the property was vacant and unimproved. A Site Plan Application (No. SPA-2013-35) was submitted on December 23, 2013 pertaining to the land in this

transaction. The Application proposed the development of a four storey, 75 unit residential condominium development. The development would have a total gross floor area of

approximately 58,530 square feet. As of February 2014, the Application was still in circulation. Based on the anticipated time required to complete a site plan application, together with

the review and approval process, the estimated time to development is approximately six months to one year from the date of sale. Subsequent to the date of sale, the Purchaser had

not initiated marketing of the development. The total consideration of $1,250,000 represents a price per acre of $689,085, a price per square foot buildable of $21 and a price per unit

buildable of $16,667, based on the Site Plan Application.



Index No. 4 2042, 2048 & 2054 Lakeshore Road, Burlington, Ontario


Property Type Land Address 2042, 2048 & 2054 Lakeshore Road Property Sub-Type Residential Municipality Burlington


Topography Level

Access/Exposure Very Good Legal Being Lot 3 and Part of Lot 4, Block T, Compiled Plan

PL92, designated as Part 1 on Plan 20R-12803

Servicing Vacant

Site Improvements Unimproved




Status Closed

Date 13-Sep-13

Vendor Bridgewater Lakeshore Developer Inc.

Purchaser Mady Development Corporation (Mady

Burlington Ltd.) - Developer

Document No. n/a



At the time of sale, the property was vacant and unimproved. A Site Plan Application (No. 535-13/12) was submitted in September 2012 pertaining to the land in this transaction. The

Application proposed the development of a 22-storey condo building, a 7-storey condo building and an 8-storey four star hotel. The development would contain a total of 170

condominium units and 152 hotel rooms and suites with three levels of underground parking. The development would have a total gross floor area of approximately 340,000 square

feet, including approximately 11,000 square feet of retail space. As of September 2013, the application was still in circulation.

Based on the anticipated time required to complete the site plan application, together with the review and approval process, the estimated time to develop is approximately six months

to one year from the date of sale.

The total consideration of $10,000,000 represents a price per acre of $3,904,725, a price per square foot buildable of $29 and a price per unit buildable of $31,056, based on the Site

Plan Application.



Index No. 5 716 Main Street East, Milton, Ontario


Property Type Land Address 716 Main Street East Property Sub-Type Residential Municipality Milton


Topography Level

Access/Exposure Very Good Legal Part of Lot 13, Concession 3, Trafalgar, New Survey,

designated as Part 1 on Plan 20R-9214

Servicing Serviced

Site Improvements Improved



Sale Price per BSF $22

Status Closed

Date 10-Apr-13

Vendor 984158 Ontario Inc.

Purchaser Tim Welch Consulting (TWC) (Creating

Affordable Homes Inc.) - Developer

Document No. n/a



At the time of sale, the property was improved with a single tenant industrial building currently occupied by Super Lube Auto Services & Sales. An Official Plan Amendment and

Rezoning Application (No. PD-024-14) were submitted on May 12, 2014 pertaining to the land in this transaction. The Application proposed the development of a twelve storey, 118

unit residential condominium development for a not for profit housing corporation. The development would contain approximately 133 surface parking spaces. Based on the

anticipated time required to complete an Official Plan Amendment, a rezoning application and a site plan application, together with the review and approval process, the estimated time

to development is approximately two to three years from the date of sale. In June 2014, the Purchaser began marketing the development as Jasper Condos, with units ranging in size

from 543 to 989 square feet and ranging in price from $187,900 to $331,900.The total consideration of $2,500,000 represents a price per acre of $1,444,252, a price per square foot

buildable of $22 and a price per unit buildable of $21,186, based on the current applications.



Appendix D

Comparable Sales – “As Complete”



Index No. 1Index No. 1Index No. 1Index No. 1 2770 Aquitaine Avenue, Mississauga, Ontario


Tenancy Type Multi-Family Address 2770 Aquitaine Avenue Property Type Multi-Residential Municipality Mississauga

Property Sub-Type High Rise Apartment Province Ontario

Construction Brick District Peel

Year Built 1980 Roll No. n/a

No of Units 180 Zoning / Land Use RA3-4

No. of Buildings 1 Legal Description Parcel 1-1, Section M-186, being Lot 1 on Plan M186

Sprinkler Yes Income AnalysisIncome AnalysisIncome AnalysisIncome Analysis

Parking Underground: 240 Spaces Surface: 30

Spaces

Base Rent (stabilized) n/a

One Bedroom 94 Laundry Revenue

Two Bedroom 70 Parking Revenue

Two Bedroom + Den 70 Potential Gross Income n/an/an/an/a

Three Bedroom 8 Less: Vac. Allow. (2.0 %) n/a

Transaction DetailsTransaction DetailsTransaction DetailsTransaction Details Effective Gross Income n/a

Sale Price Sale Price Sale Price Sale Price $52,300,000 Less: Total Operating Expenses n/a SaleSaleSaleSale Price per unitPrice per unitPrice per unitPrice per unit $290,556 Less: Contingency (0.0 %) n/a

Status Closed Net Operating Income $2,353,500

Date June 2015 Occupancy Tenant Occupied NOI per unit $13,075

Vendor The England Group (2284016 Ontario Ltd.)

Purchaser Homestead Land Holdings Limited - Private Return / Yield AnalysisReturn / Yield AnalysisReturn / Yield AnalysisReturn / Yield Analysis

Document No. n/a OCR – Stabilized 4.50%

Interest Transferred 100%



The subject property is located south of Derry Road West, east of Winston Churchill Boulevard. The Vendor had acquired the property in a Power of Sale transaction in April 1996 for

a total consideration of $9,350,000, representing an adjusted price per unit of $58,889.



Index No. 2Index No. 2Index No. 2Index No. 2 106 Parkway Forest Drive, North York, Ontario


Tenancy Type Multi-Family Address 106 Parkway Forest Drive

Property Type Multi-Residential Municipality North York


Construction Brick District Metro


No of Units 97 Zoning / Land Use RM4 & RM6

No. of Buildings 1 Legal Description

10085-0223: Part of Block A on Plan 7329, designated as Part 1 on Plan 66R-26162



10085-1358: Part of Block A on Plan 7239, designated as Parts 11 & 12 on Plan 66R-23771


Parking Underground and Surface Base Rent (stabilized) n/a



Two Bedroom + Den 70 Potential Gross Income n/an/an/an/a


Transaction DetailTransaction DetailTransaction DetailTransaction Detailssss Effective Gross Income n/a

Sale Price $25,750,000 Less: Total Operating Expenses n/a

Sale Price per unit $265,464 Less: Contingency (0.0 %) n/a


Date May 2015 Occupancy Tenant Occupied NOI per unit $10,619

Vendor El-Ad Canada Group Inc. (2322270 Ontario

Inc.)

Purchaser Homestead Land Holdings Limited - Private

Investor - Canadian

Return / Yield AnalysisReturn / Yield AnalysisReturn / Yield AnalysisReturn / Yield Analysis

Interest Transferred 100% OCR – Stabilized 4.00%



The subject property is located south of Sheppard Avenue East, west of Highway No. 404.



Index No. 3Index No. 3Index No. 3Index No. 3 25 Fisherville Road, North York, Ontario


Tenancy Type Multi-Family Address 25 Fisherville Road Property Type Multi-Residential Municipality North York




No of Units 214 Zoning / Land Use RA (f30.0; a1375; d1.5)


Part of Lot 22, Plan 2570, north York, as described in Instrument No. TB932388





Three Bedroom 56 Potential Gross Income n/an/an/an/a

Less: Vac. Allow. (2.0 %) n/a


Sale Price $42,775,000 Less: Total Operating Expenses n/a Sale Price per unit $199,883 Less: Contingency (0.0 %) n/a

Status Closed Net Operating Income $1,688625

Date April 2015 Occupancy Tenant Occupied NOI per unit $7,995

Vendor Marika Corporation

Purchaser Starlight Apartments (IMH 25 Fisherville Ltd.)

- Private Investor - Canadian





The subject property is located south of Steeles Avenue West, west of Bathurst Street. At the time of sale, the building had no vacancy.

Discussions with industry professionals familiar with this transaction indicated that the property was on the marker for approximately 2 months. The asking price for the property was

$45,000,000.



Index No. 4Index No. 4Index No. 4Index No. 4 3055 Glencrest Road, Burlington, Ontario


Tenancy Type Multi-Family Address 3055 Glencrest Road

Property Type Multi-Residential Municipality Burlington


Construction Brick District Halton


No of Units 110 Zoning / Land Use RM4 & RM6


Block 4 on Plan 1305






8 Less: Vac. Allow. (2.0 %) n/a




Status Closed Net Operating Income $874,283

Date March 2015 Occupancy Tenant Occupied NOI per unit $7,945

Vendor K.A.F. Development Limited

Purchaser CAPREIT (CAPREIT Apartments Inc. ) -

Public Investor - Canadian





The subject property is located north of New Street, east of Guelph Line.

This transaction is part of a two property apartment portfolio located in the City of Burlington. The apartment buildings which were approximately 98% occupied at the time of sale

contain a total of 285 residential units. The portfolio was purchased for a total consideration of $53,736,000, representing an aggregate price per unit of $188,547.



Index No. 5Index No. 5Index No. 5Index No. 5 120 Dundas Street East, Mississauga, Ontario


Tenancy Type Multi-Family Address 120 Dundas Street East Property Type Multi-Residential Municipality Mississauga


Construction Brick District Peel




Part of Lot 15, Concession 1, South of Dundas Street, Part of Lots 21 to 24, inclusive, Plan

Tor12, as described in Instrument No. VS153908


Parking Underground: 120 spaces Surface: 48 spaces Base Rent (stabilized) n/a

Bachelor 1 Laundry RevenueLaundry RevenueLaundry RevenueLaundry Revenue

One Bedroom 66 Parking Revenue

Two Bedroom 44 Potential Gross Income n/an/an/an/a


Effective Gross Income n/a

Transaction DetailsTransaction DetailsTransaction DetailsTransaction Details Less: Total Operating Expenses n/a

Sale Price $27,700,000 Less: Contingency (0.0 %) n/a

Sale Price per unit $178,710 Net Operating Income $1,350,000

Status Closed Date July 2013 NOI per unit $8,703

Occupancy Tenant Occupied

Vendor The Skyline Group (Skyline Real Estate

Holdings Inc.)


Purchaser Starlight Apartments (IMH 120 Dundas Ltd.) -

Private Investor - Canadian

OCR – Stabilized 4.87%

Interest Transferred 100%



The subject property is located on the south side of Dundas Street East, east of Hurontario Street.

The Vendor had acquired the property in September 2010 for a total consideration of $18,550,000, representing an adjusted price per unit of $122,258.



Index No. 6Index No. 6Index No. 6Index No. 6 85-95 Forest Manor Road & 130 Parkway Forest Drive, North York, Ontario


Tenancy Type Multi-Family Address 85-95 Forest Manor Road & 130 Parkway Forest Drive

Property Type Multi-Residential Municipality North York

Property Sub-Type High-rise Apartment & Townhouses Province Ontario





10085-1348: Part of Block A, Plan 7239, designated as Part 1 on Plan 66R-23771, save and

except Part 2 on Plan 66R-26161

10085-0206: Part of Block A, Plan 7239, being Part 6 on Plan 66R-23771

10085-1357: Part of Block A, Plan 7239, designated as Part 1 on Plan 66R-26161

10085-1354: Part of Block A, Plan 7239, being Part 1 on Plan 66R-26163



One Bedroom 20 Laundry RevenueLaundry RevenueLaundry RevenueLaundry Revenue



Four Bedroom Townhouse 12 Less: Vac. Allow. (2.0 %) n/a





Date May 2013 Occupancy Tenant Occupied NOI per unit $13,517

Vendor El-Ad Canada Group Inc. (2322283 Ontario


Investor - Canadian




The subject property is located south of Sheppard Avenue East, east of Don Mills Road.

Market rental rates, at the time of sale, were estimated to be approximately $1,500 for a one bedroom unit and approximately $2,500 for a four bedroom townhouse unit.

The owner entered into a `Section 37 Agreement' with the City of Toronto, outlining the conditions which must be met in order for the development to occur.



Index No. 7Index No. 7Index No. 7Index No. 7 472 Brock Avenue, Burlington, Ontario


Tenancy Type Multi-Family Address 472 Brock Avenue

Property Type Multi-Residential Municipality Burlington

Property Sub-Type High-rise Apartment Province Ontario

Construction Brick District Halton


No of Units 115 Zoning / Land Use DRH-425


Lots 54, 55, 56 & Part of Lot 57, Plan 65, Designated as Part 1 on Plan 20R-19030


Parking Underground: 173 Spaces Base Rent (stabilized) n/a

One Bedroom 43 Laundry RevenueLaundry RevenueLaundry RevenueLaundry Revenue


Transaction DetailsTransaction DetailsTransaction DetailsTransaction Details Potential Gross Income n/an/an/an/a

Sale Price $39,850,000 Less: Vac. Allow. (2.0 %) n/a

Sale Price per unit $346,522 Effective Gross Income n/a

StatusStatusStatusStatus Closed Less: Total Operating Expenses n/a

Date June 2015 Less: Contingency (0.0 %) n/a

OccupancyOccupancyOccupancyOccupancy Tenant Occupied Net Operating Income

Vendor Molinaro Group (Brock Street Joint Venture

Inc.)


Investor - Canadian

NOI per unit

Interest TransferredInterest TransferredInterest TransferredInterest Transferred 100%


The subject property is located north of Lakeshore Road, east of Maple The subject property is located north of Lakeshore Road, east of Maple The subject property is located north of Lakeshore Road, east of Maple The subject property is located north of Lakeshore Road, east of Maple

AvenAvenAvenAvenue. ue. ue. ue.

At the time of sale, the building was newly constructed and occupancy had At the time of sale, the building was newly constructed and occupancy had At the time of sale, the building was newly constructed and occupancy had At the time of sale, the building was newly constructed and occupancy had

not taken place. As a result, the building was not generating a significant not taken place. As a result, the building was not generating a significant not taken place. As a result, the building was not generating a significant not taken place. As a result, the building was not generating a significant

positive cash flow, after accounting for the operating costs and realty taxes positive cash flow, after accounting for the operating costs and realty taxes positive cash flow, after accounting for the operating costs and realty taxes positive cash flow, after accounting for the operating costs and realty taxes

on the vacant space. on the vacant space. on the vacant space. on the vacant space.

The Vendor had acquired 476 & 486 Brock Avenue in November 2009 for a The Vendor had acquired 476 & 486 Brock Avenue in November 2009 for a The Vendor had acquired 476 & 486 Brock Avenue in November 2009 for a The Vendor had acquired 476 & 486 Brock Avenue in November 2009 for a


OCR – Stabilized



Appendix E

Certification



Certification 54545454----60 Shepherd Road60 Shepherd Road60 Shepherd Road60 Shepherd Road, , , , TorontoTorontoTorontoToronto, Ontario, Ontario, Ontario, Ontario

I certify that, to the best of my knowledge and belief:

• The statements of fact contained in this report are true and correct;

• The reported analyses, opinions and conclusions are limited only by the reported Contingent and Limiting conditions, and

are my personal, unbiased professional analyses, opinions and conclusions;

• I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest

or bias with respect to the parties involved;

• I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment;

• My engagement in and compensation for this assignment were not contingent upon developing or reporting predetermined

results, the amount of the value estimate, or a conclusion favouring the client;

• My analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the

Canadian Uniform Standards of Professional Appraisal Practice and with the requirements of the Code of Professional

Ethics and Standards of Professional Practice of the Appraisal Institute of Canada;

• I made a personal inspection of the property that is the subject of this report on August 17, 2015;

• I have the knowledge and experience to complete the assignment competently.

• Sebastien Beach (AIC Candidate Member) provided significant professional assistance in the preparation of this report;

• As of the date of this report the undersigned has fulfilled the requirements of The Appraisal Institute of Canada’s

Continuing Professional Development Program for designated and candidate members; and

Final Estimate of Value In accordance with your request, we have inspected the above property and have carried out an analysis in order to estimate its

current market value. Based on our investigations, it is our opinion that the market value of the Subject property “As Is” as at

August 17, 2015 is estimated to be:

Six Six Six Six Million Million Million Million Seventy Seventy Seventy Seventy Thousand DollarsThousand DollarsThousand DollarsThousand Dollars

$$$$6666,,,,000077770,0000,0000,0000,000

Development land is subjective and includes many influencing factors including service availability, land entitlements, restricted

development areas and other planning, heritage and built form restrictions. The value conclusion contained herein is predicated on

documentation provided by the client and information sourced from municipal agents, brokers and developers in the market. In

addition, we have relied on several Extraordinary Assumptions. Any alterations to either the information provided or the assumptions

in this report may have a material impact on the value contained herein.

Based on our investigations, it is our opinion that the market value of the Subject property “As Complete”, as at August 17, 2015 is

estimated to be:

Ninety ThreeNinety ThreeNinety ThreeNinety Three MillionMillionMillionMillion FiveFiveFiveFive Hundred ThousandHundred ThousandHundred ThousandHundred Thousand DollarsDollarsDollarsDollars

$$$$93,93,93,93,555500,00000,00000,00000,000



The above value estimate is predicated on an exposure period of two to four months assuming the basis of a transaction involving

cash to the vendor. This report describes the methods and approaches to value in support of the conclusion and contains the

pertinent data gathered in our investigation of the market.

Matthew Bruchkowsky, AACI, P.App.

Senior Director, Toronto

Valuation & Advisory Services, Toronto

Date: August 17, 2015

Documents

Full Narrative Appraisalopartinvestorsgroup.org/PDFs/Appraisal _ Oakville _ Aug 2015.pdf · 54-60 Shepherd Road, Oakville File Reference: TOR-15-617 Page 3 provided by parties and