AMERICAN YACHT HARBOR & MARINA

AMERICAN YACHT HARBOR & MARINA 6100 Red Hook Quarters #2 St. Thomas, USVI CBRE File No. 07-396OR-0510 Prepared for: Mark Lande IGY-AYH ST. THOMAS HOLDINGS, LLC 717 Fifth Avenue, 18th Floor New York, NY 10022 AND Cassandra P. Webster-Hodge Assistant Vice President BANCO POPULAR VIRGIN ISLANDS St. Thomas, VI 00801 VALUATION & ADVISORY SERVICES Self Contained Appraisal Report CBRE CB RICHARD ELLIS © 2007 CB Richor EFTA00787768 VALUATION & ADVISORY SERVICES June 30, 2007 Mark Lande IGY-AYH ST. THOMAS HOLDINGS, LLC 717 Fifth Avenue, 18th Floor New York, NY 10022 AND Cassandra P. Webster-Hodge Assistant Vice President BANCO POPULAR VIRGIN ISLANDS St. Thomas, VI 00801 RE: Appraisal of American Yacht Harbor & Marina 6100 Red Hook Quarters #2 St. Thomas, County, USVI CBRE File No 07-396OR-0510 Dear Ms. Webster-Hodge: CBRE CU RICHARD ELLIS 777 Brickell Avenue, Suite 910 Miami, Florida 33131 T F At your request and authorization, CBRE hos prepared an appraisal of the market value of the referenced property and presented our analysis in the following Self Contained Appraisal Report. The subject is an existing mixed use retail/office/marina property that was developed as it is now in 1992 and situated adjacent to a 2.12-acre upland site and 3.20-acre submerged land in Red Hook, St. Thomas, USVI. The majority of the property is submerged land owned by the St. Thomas Coastal Zone Management Commission and assigned to the current owners of the marina. The submerged land area is located along the southeastern boundary of the upland site. Currently the property is operated as a mixed use properly including retail and office on the landside site and a marina facility, with 130 dock slips, fuel docks, in-dock fueling and dock master's office. Of the 130 slips, 25 slips known as P Dock are leased to the owner's of American Yacht Harbor via a management agreement. The subject is more fully described, legally and physically within the enclosed report. Data, information, and calculations leading to the value conclusion are incorporated in the report following this letter. The report, in its entirety, including all assumptions and limiting conditions, is an integral part of, and inseparable from, this letter. Based on the analysis contained in the following report, the market value of the subject is concluded as follows: O 2007 CB Richard Ellis, Inc. EFTA00787769 Mark Lande and Cassandra P. Webster-Hodge Assistant Vice President June 30, 2007 Page 2 MARKET VALUE CONCLUSION Appraisal Premise Interest Appraised Date of Value Exposure Time Value Conclusion As Is Compiled by CURE Leased Fee/Leasehold Interest June 19, 2007 6 Months 521,000,000 The following appraisal sets forth the most pertinent data gathered, the techniques employed, and the reasoning leading to the opinion of value. The analyses, opinions and conclusions were developed based on, and this report has been prepared in conformance with, our interpretation of the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Title XI Regulations. The report is for the sole use of the client; however, client may provide only complete, final copies of the appraisal report in its entirety (but not component parts) to third parties who shall review such reports in connection with loan underwriting or securitization efforts. Appraiser is not required to explain or testify as to appraisal results other than to respond to the client for routine and customary questions. Please note that our consent to allow an appraisal report prepared by CBRE or portions of such report, to become part of or be referenced in any public offering, the granting of such consent will be at our sole discretion and, if given, will be on condition that we will be provided with an Indemnification Agreement and/or Non-Reliance letter, in a form and content satisfactory to us, by a party satisfactory to us. We do consent to your submission of the reports to rating agencies, loan participants or your auditors in its entirety (but not component parts) without the need to provide us with an Indemnification Agreement and/or Non-Reliance letter. It has been a pleasure to assist you in this assignment. If you have any questions concerning the analysis, or if CBRE can be of further service, please contact us. Respectfully submitted, CBRE - VALUATION & ADVISORY SERVICES Buddy R. Urban, MAI Vice President Florida St. Cert. Gen. REA RZ2815 Phone: Fax: Email: James E. Agner, MAI Managing Director Florida St. Cert. Gen. REA R/382 Phone: Fax: Email: 1=. CBRE O 2007 CB Richard Ellis, Inc. Ca RICI4ARO ELLIS EFTA00787770 AMERICAN YACHT HARBOR & MARINA CERTIFICATION OF THE APPRAISAL CERTIFICATION OF THE APPRAISAL We certify to the best of our knowledge and belief: 1. The statements of fact contained in this report ore true and correct. 2. The reported analyses, opinions, and conclusions ore limited only by the reported assumptions and limiting conditions and are our personal, impartial and unbiased professional analyses, opinions, and conclusions. 3. We hove no present or prospective interest in or bins with respect to the property that is the subject of this report and have no personal interest in or bias with respect to the parties involved with this assignment. 4. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 5. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 6. This appraisal assignment was not based upon o requested minimum valuation, o specific valuation, or the approval of a loan. 7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal, as well as the requirements of the State of Florida. 8. The reported analyses, opinions, and conclusions were developed, and this report hos been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. 9. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 10. As of the dote of the report, Buddy R. Urban, MAI and James E. Agner, MAI have completed the requirements of the continuing education program of the Appraisal Institute. 11. Buddy R. Urban, MAI hos and James E. Agner, MAI has not made a personal inspection of the property that is the subject of this report. 12. Donna Urban provided significant real property appraisal assistance to the persons signing this report. 13. Valuation & Advisory Services operates as on independent economic entity within CBRE. Although employees of other CBRE divisions may be contacted as a port of our routine market research investigations, absolute client confidentiality and privacy are maintained at all times with regard to this assignment without conflict of interest. te" Buddy R. Urban, MAI James E. Agner, MAI Florida St. Cert. Gen. REA RZ2815 Florida St. Cert. Gen. REA RZ382 CBRE CH RICHARD ELLIS © 2007 CB Richard Ellis, Mc. EFTA00787771 AMERICAN YACHT HARBOR & MARINA SUBJECT PHOTOGRAPHS SUBJECT PHOTOGRAPHS 1 TYPICAL VIEW OF THE RETAVOFFICE PORTION 0 FTHE SUBJECT TYPICAL VIEW OF THE SUBJECT MARINA II t 2007 CB Richord Ellis, Inc. EFTA00787772 AMERICAN YACHT HARBOR & MARINA SUMMARY OF SALIENT FACTS SUMMARY OF SALIENT FACTS Properly Name Location American Yacht Harbor & Marina 6100 Red Hook Quarters #2, St. Thomas, USVI Assessor's Parcel Number 1-07702-0134-00 1-07702-0133-00 1-07702-0135-00 Properly Type Retail/Office/Marina Highest and Best Use As Though Vacant Retail/Office/Marina As Improved Retail/Office/Marina Properly Rights Appraised Fee Simple Land Area (Landside) 2.12 AC 92,347 SF Submerged Land Area 3.20 AC 139,392 SF Improvements Number of Buildings - Retail/Office 6 Number of Dock Slips 130 Net Rentable Area - Retail/Office 47,344 SF Site Amenities Fuel Dock, In-dock Fueling, Dock Master's Office, Retail & Restuarants Year Built 1992 Condition Average Estimated Exposure Time 9 Months Financial Indicators Stabilized Occupancy 80.0% Stabilized Average Wet Slip Rate/Foot 527.00 Income Growth Rate 3.0% Expense Growth Rate 3.0% Going-In Capitalization Rate 9.00% Terminal Capitalization Rate 9.50% Discount Rate 11.50% iii W' 2007 CB Richard Ellis, Mc. EFTA00787773 AMERICAN YACHT HARBOR 8 MARINA SUMMARY OF SALIENT FACTS Stabilized Operating Data Total Revenue Operating Expenses Expense Ratio Net Operating Income VALUATION Sales Comparison Approach Income Capitalization Approach Total Per Slip 56,626,402 54,730,646 71.39% 51,895,756 521,200,000 521,000,000 550,972 536,390 514,583 5163,077 5161,538 CONCLUDED MARKET VALUE Appraisal Premise Interest Appraised Date of Value Value As Is Leased Fee/Leasehold Interest June 19, 2007 521,000,000 Compiled by CAE SPECIAL ASSUMPTIONS The portion of the value attributed to the marina is based on on approved permit from the Coastal Zone Management Commission. Operation of the marina would not be possible if the permit were not in place or available to the marina operator. As such, our value is assumes the permit will continue to be renewed and the existing operations not be interrupted or halted. The subject property is currently granted on exemption from real estate taxes through December 31, 2011. The exemption was granted via the Economic Development Commission in on effort to promote development and/or redevelopment in the Red Hook area. Our value assumes the exemption will be extended after the current exemption expires and that the subject will remain 100% real estate tax free. iv © 2007 CB Richard Ellis, Inc. EFTA00787774 AMERICAN YACHT HARBOR & MARINA TABLE OF CONTENTS TABLE OF CONTENTS CERTIFICATION OF THE APPRAISAL SUBJECT PHOTOGRAPHS ii SUMMARY OF SALIENT FACTS iii TABLE OF CONTENTS INTRODUCTION 1 AREA ANALYSIS 6 NEIGHBORHOOD ANALYSIS 11 SITE ANALYSIS 15 IMPROVEMENT ANALYSIS 19 ZONING 24 TAX AND ASSESSMENT DATA 25 HIGHEST AND BEST USE 26 APPRAISAL METHODOLOGY 29 SALES COMPARISON APPROACH 30 INCOME CAPITALIZATION APPROACH 40 RECONCILIATION OF VALUE 77 ASSUMPTIONS AND LIMITING CONDITIONS 78 ADDENDA A Glossary of Terms B Additional Photographs C Improved Marina and Retail/Office Soles D Competitive Marinas and Retail/Office Rentals E Historical Operating Statements F CZM Permits G Legal Description H Engagement Letter I Qualifications O 2007 CB Richard Ellis, Inc. EFTA00787775 AMERICAN YACHT HARBOR & MARINA INTRODUCTION INTRODUCTION PROPERTY IDENTIFICATION The subject property consists of a fully developed marina currently operating os American Yacht Harbor & Marina, as well as 47,344 square feet of retail and office space situated on the landside portion of the site. The subject's street address is 6100 Red Hook Quarters #2, in St. Thomas, USVI. OWNERSHIP AND PROPERTY HISTORY Title to the upland portion of the property is currently vested in the name of IGY-AYH St. Thomas Holdings, LLC, who acquired title to the property in January 2007, os recorded in the St. Thomas/St. Johns Deed Records. The submerged land is currently under the ownership of the Coastal Zone Management Commission and leased to IGY-AYH St. Thomas Holdings, LLC through September 14, 2010 via an assignment under a Coastal Zone Management Permit (CZM). The current lease began on September, 2000 with a ten year term. Renewal of the CZM permits is not prohibitive and will likely be granted upon expiration of the current permit. The total consideration for the January 2007 transaction was $25,500,000. The subject was part of a larger purchase of four marinas properties in the Caribbean. The seller was Sun Resorts, which owned the subject outright and various interests in the other three marinas. The sale price is slightly higher than our value estimate, which could be the result of allocated costs of the portfolio sale. Other than that noted herein, there hos been no other ownership transfer of the property during the previous three years. As of the dote of value, the subject is not being marketed for sale. RELEVANT DATES The following table illustrates the various dotes associated with the valuation of the subject property: RELEVANT DATES Date of Report: Date of Inspection: Date of Value As Is June 30, 2007 June 19, 2007 June 19, 2007 Compiled by CBRE PURPOSE OF THE APPRAISAL The purpose of this appraisal is to estimate the market value of the leasehold interest in the subject property. The current economic definition agreed upon by agencies that regulate federal financial institutions in the U.S. (and used herein) is as follows: 1 2007 CB Richard Ellis, Inc. EFTA00787776 AMERICAN YACHT HARBOR & MARINA INTRODUCTION The most probable price which o property should bring in a competitive and open market under all conditions requisite to a fair sole, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified dote and the passing of title from seller to buyer under conditions whereby: 1. buyer and seller are typically motivated; 2. both parties ore well informed or well advised, and acting in what they consider their own best interests; 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cosh in U.S. dollars or in terms of financial arrangements comparable thereto; and 5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sole. PREMISE OF THE APPRAISAL The premise of this appraisal valuation is "as is" and leased fee/leasehold interest on the dote of value. TERMS AND DEFINITIONS The Glossary of Terms in the Addenda provides definitions for terms that ore, and may be used in this appraisal. INTENDED USE AND USER OF REPORT This appraisal is to be used for internal decision making by the client, Banco Popular Virgin Islands. PROPERTY RIGHTS APPRAISED The interest appraised represents the leased fee/leasehold estate. SCOPE OF WORK The scope of the assignment relates to the extent and manner in which research is conducted, data is gathered and analysis is applied, all based upon the following problem-identifying factors stated elsewhere in this report: • Client • Intended use • Intended user • Type of opinion Office of Comptroller of the Currency (OCC), 12 CFR Pall 34, Subpart C - Appraisals, 34.42 (g); Office of Thrih Supervision (OTS), 12 CFR 564.2 (g); Appraisal Institute, The Dictionary of Real Estate Appraisal, ed. (Chicago: Appraisal Institute, 2002), 177-178. This is also compatible with the RTC, FDIC, FRS and NCUA definitions of market value as well as the example referenced in the Uniform Standards of Professional Appraisal Practice (USPAP). 2 (6) 2007 CB Richard Ellis, Inc. EFTA00787777 AMERICAN YACHT HARBOR & MARINA INTRODUCTION • Effective dote of opinion • Relevant characteristics about the subject • Assignment conditions This appraisal of the subject has been presented in the form of a Self-Contained Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(a) of USPAP. That is, this report incorporates, to the fullest extent possible, practical explanation of the data, reasoning and analysis that were used to develop the opinion of value. This report also includes thorough descriptions of the subject and the market for the property type. CBRE completed the following steps for this assignment: Extent to Which the Property is Identified CBRE collected the relevant information about the subject from the owner (or representatives), public records and through an inspection of the subject. The property was legally identified through its postal address, assessor's records and legal description. Economic characteristics of the subject were identified via an analysis of a recent rent roll for both the marina and retail/office space and historical operating statements. Extent to Which the Property is Inspected CBRE inspected both the interior and exterior of the subject, os well as its surrounding environs on the effective date of appraisal. Type and Extent of the Data Researched CBRE reviewed the micro and/or macro market environments with respect to physical and economic factors relevant to the valuation process. This process included interviews with regional and/or local market participants, available published data, and other various resources. CBRE also conducted regional and/or local research with respect to applicable tax data, zoning requirements, flood zone status, demographics, income and expense data, and comparable listing, sale and rental information. Type and Extent of Analysis Applied CBRE analyzed the data gathered through the use of appropriate and accepted appraisal methodology to arrive at a probable value indication via each applicable approach to value. Approaches to value used include the Sales Comparison Approach and the Income Approach. The steps required to complete each approach are discussed in the methodology section. CBRE then correlated and reconciled the results into a reasonable and defensible value conclusion, as defined herein. A reasonable exposure time and marketing time associated with the value estimate presented hos also been concluded. 3 O 2007 CB Richard Ellis, Inc. EFTA00787778 AMERICAN YACHT HARBOR & MARINA INTRODUCTION SPECIAL APPRAISAL INSTRUCTIONS There have been no special appraisal instructions for this assignment. EXPOSURE/MARKETING TIME Current appraisal guidelines require an estimate of a reasonable time period in which the subject property could be brought to market and sold. This reasonable time frame can either be examined historically or prospectively. In a historic analysis, this is referred to as exposure time. Exposure time always precedes the date of value, with the underlying premise being the time a property would have been on the market prior to the date of value, such that it would sell at its appraised value as of the date of value. On a prospective basis, the term marketing time is most often used. The exposure/marketing time is a function of price, time, and use. It is not an isolated estimate of time alone. It is different for various types of real estate and under various market conditions. A discussion of an appropriate exposure/marketing time estimate for the subject properly is presented in the following sections. In consideration of these factors, we have analyzed the following: • exposure periods for comparable sales used in this appraisal; • marketing time information from the CBRE National Investor Survey; and • the opinions of market participants. The following table presents the information derived from these sources. EXPOSURE TIME INFORMATION Data Source Exposure Time (Months) Range Average Strip Centers Class A Class B Class C Local Market Professionals CBRE Estimate 3.0 6.0 6.0 3.0 - 12.0 6.6 - 12.0 7.8 - 12.0 9.0 - 9.0 6.0 9 Months Source: CBRE National Investor Survey The CBRE Notional Investor Survey does not have a classification for marinas; therefore we have chosen the asset class most similar to the ownership position in the subject site. In addition to the survey data, we have also reviewed the assumptions and conclusions reached in the Valuation section of this report, particularly the income estimates and rotes of return. Based on these analyses, we hove concluded an exposure/marketing time of 9 months or less would be considered reasonable for the subject property. 4 O2007 CB Richard Ellis, Inc. EFTA00787779 AMERICAN YACHT HARBOR & MARINA INTRODUCTION This exposure/marketing time reflects current economic conditions, current real estate investment market conditions, the terms and availability of financing for real estate acquisitions, and property and market-specific factors. It assumes that the subject property is (or has been) actively and professionally marketed. The marketing/exposure time would apply to all valuation premises included in this report. 5 O 2007 CB Richard Ellis, Inc. EFTA00787780 AMERICAN YACHT HARBOR & MARINA AREA ANALYSIS AREA ANALYSIS 'firteicoa• till BAHAWI linaona,""" Sep, b •lat• lis..... Osr. pin* ...Not .e.. 1..." c.a..: .e.a amt. Lnxe .,70 .. •••• CUBA pan. rm..8 ton Tose . .111fles ....... Wads , jib% • ts. ". • ''.1 . M , .C•ena. .1w1)0••• or Caaal . a .. r SW MP /egg? HAT .. sante ::!,-.7: T"'e.g,„,fre, 't. ;It. o.......,:. 'steer. 0,......., M.n9o® . • aoto, _ .W. hob in ••••• Th. Vet. Pin mann us....” La.... "ns"... sods c•-•.• ONiunkli. • JAIAMC A 1010.A•S r.. • 4' C6-01431A IIICAFWOUA .•••••• • v.., „ %sr ruiltdefine, LOCATION THE U.S. US VIRGIN ISLANDS General Data - U.S. US Virgin Islands The U.S. US Virgin Islands, formed by the islands of Saint Croix, Saint John and Saint Thomas and several islets, were acquired by the United States from Denmark in 1917 for military purposes. This group of 3 islands and about 50 islets, most of which ore uninhabited, lie in the Lesser Antilles chain of the West Indies, east of Puerto Rico and between the Caribbean Sea and the Atlantic Ocean approximately 1,000 miles southeast of Miami. The three islands total an area of 133 square miles. The islands were first administered by the U.S. Navy, and in 1931 come under the administration of the U.S. Department of the Interior. Currently, local government organization is derived from the U.S. Congress under the revised Organic Act of 1954, which declared the islands to be an unincorporated territory of the United States. Some decision-making power still rests with the U.S. Congress and Federal agencies. 6 S 2007 CB Richard Ellis, Mc. EFTA00787781 AMERICAN YACHT HARBOR & MARINA AREA ANALYSIS The temperature in the US Virgin Islands ranges from 70.90 degrees year-round, with relatively low humidity. Prolonged periods of rain ore rare, but the islands ore subject to occasional hurricanes. The US Virgin Islands hove no rivers, streams or lakes. The islands are of volcanic origin and hove mainly a hilly topography Population The population of the US Virgin Islands had increased 7% from 1990 to 2000, the most current data available, from 101,809 habitants in year 1990 to 108,612 habitants in year 2000. The sharp rise in population from 1990 to 2000 was followed by a similar increase in the number of housing units. The principal industries of the US Virgin Islands ore tourism and manufacturing. Between 1970 and 1990, tourist expenditures increased more than 30% and now ore estimated to be $500 million annually. The government of the US Virgin Islands conducts a tax incentive program to encourage foreign capitol investments and the establishment of new industries. Special tax incentives on worldwide exports have enticed over 2,500 foreign soles corporations to be established. This has helped spur a related growth in financial service industries taking advantage of the US Virgin Islands good infrastructure, modern communications, excellent transportation links and U.S. currency and postage Government Under legislation passed in 1968, the US Virgin Islands hove had a democratically elected form of government since 1970. Prior to 1970, the Governor of the US Virgin Islands was appointed to by the president of the United States and reported to the Secretory of the Interior under the territory's 1954 revised Organic Act. Internal affairs are under the jurisdiction of on elected Governor, who together with the Lieutenant Governor is elected for a four-year term. A 15-member unicameral Legislature is elected for a two- year term. The legislative consists of seven senators from St. Croix, seven from St. Thomas, and one senator-at-large who must reside in St. John. The Member of Congress from the US Virgin Islands possesses the same powers and privileges as Representatives from the States, with the exception of voting on the House floor. Employment The main employment sources in the U.S.V.I. are tourism and local government. The following table and graphic show the employed civilian population of the U.S.V.I. as 2000 as per the 2000 Census of the U.S. Census Bureau. 7 S 2007 CB Richard Ellis, Mc. EFTA00787782 AMERICAN YACHT HARBOR & MARINA AREA ANALYSIS Industry Employment: U.S.V.I. 2000 Industry Group Average Employment Level Agriculture. forestry. fishing and hunting. and mining 324 0.70% Construction 4900 10.52% Manufacturing 2754 5.91% Wholesale trade 912 1.96% Retail trade 6476 13.91% Transportation and warehousing. and utilities 3321 7.13% Information 931 2.00% Finance. insurance. real estate. and rental and leasing 2330 5.00% Professional, scientific. management. administrative. and waste manage 3058 6.57% Educational. health and social services 6742 14.48% Arts. entertainment. recreation. accomodation and food services 7351 15.79% Other services (except public administration) 2535 5.44% Public administration 4931 10.59% All Industries 46565 100.00% THE ISLAND OF SAINT THOMAS Geographic Location and Physical Environment The appraised property lies at the Red Hook Quarter #2 in the southeastern part of the island of Saint Thomas, about 20 miles east of the Charlotte Amalie Town, Capital of the U.S.V.I. Saint Thomas lies approximately 1,000 miles southeast of Miami between the Atlantic Ocean and the Caribbean Sea. It has on area of 32 square miles and a mostly hilly topography. There are several major roads servicing Saint Thomas. Route 30 is the major road of Saint Thomas, which connects the Fortuna Community in the east with the airport in the southwest and with the town of Nadir in the eastern section of the island passing through Charlotte Amalie. Other major roods are 32, 33, 35, 38 and 40. The Cyril E. King Airport lies at the southwest section of the island and its main carrier is American Airlines. Main cruise ship and ferry docks lie at Long Bay in the Charlotte Amalie town at the south section of the island. Government The administrative political unit is the Government of the United States US Virgin Islands. A Governor and a Lieutenant Governor form the executive body. A unicameral 15-member legislative is the law- making body. There ore 14 branch departments administered by commissioners appointed by the governor and approved by the Legislature. The Planning and Natural Resources Department is responsible for the development of land use and urban development policy and regulations in Saint Thomas. A zoning code classifying and regulating uses, densities and constructions is currently in effect. The enforcement and management of the land use policies is also the function of the Planning and Natural Resources Department. 8 Ce 2007 CB Richard Ellis, inc. EFTA00787783 AMERICAN YACHT HARBOR & MARINA AREA ANALYSIS Population and Social Trends As per the 2000 Census of Population, the total population of Saint Thomas was 51,181 persons. Of the total population 49,263 persons (96%) lived in urban areas and 1,918 (4%) in rural areas. There are a total of 19,458 households and 12,378 families in Saint Thomas as of 2000. The average household and family sizes for 2000 were 2.60 and 3.32. Saint Thomas counts with public and private schools. Higher education options include a campus of the University of the US Virgin Islands. Economy As of 1999, the median household income for Saint Thomas was $26,893, higher than the U.S.V.I. median household income for the same period ($24,704). The population growth hos fueled the increased demand for residential, commercial and industrial developments. Today, Saint Thomas's main economic sectors ore tourism, service and retail. Average employment for calendar 2000 was 24,181 persons. The following table shows Saint Thomas' average employment by industry category for 2000. Industry Employment: Saint Thomas 2000 Industry Group Average Employment Level Agriculture. forestry. fishing and hunting, and mining 133 0.55% Construction 2045 8.46% Manufacturing 518 2.14% Wholesale trade 536 2.22% Retail trade 3924 16.23% Transportation and warehousing. and utilities 2038 8.43% Information 551 2.28% Finance. insurance, real estate. and rental and leasing 1185 4.90% Professional, scientific. management. administrative. and waste manage 1598 6.61% Educational. health and social services 3160 13.07% Arts. entertainment, recreation, accomodation and food services 4329 17.90% Other services (except public administration) 1356 5.61% Public administration 2808 11.61% All Industries 24181 100.00% As is reflected in the table the industry groups contributing more to the island employment level are ads-entertainment -recreation -food, retail trade and public administration. In 2000, 17.90% of the total employment was in the arts•entertainment-recreation-food sector, 16.23% in retail trade and 11.61% in the public administration category. 9 S 2007 CB Richard Ellis, inc. EFTA00787784 AMERICAN YACHT HARBOR & MARINA AREA ANALYSIS Urban Growth Trend St. Thomos had followed a sectorial urban growth trend. Most of the urban growth has followed government and military built infrastructure and tourist developments. There were a total of 24,030 housing units in Saint Thomas as of 2000. Of the total number of units, 23,083 were urban units and 947 rural units. About 81% of the units (19,458) were occupied and 19% were vacant (4,572). Of the occupied housing units about 41% (8,048) were owner occupied and about 59% (11,410) were rented units. The median age of the housing units is 25 years as of 2000. As the figures reveal Saint Thomas is predominantly a housing rental market. St. Thomos' retail and institutional activities have historically taken place around its traditional core towns. There are numerous standalone retail and office buildings within the Charlotte Amalie core urban center and along the principal roads and avenues. The Havensight commercial area and shops along the boulevards and alleys of the Charlotte Amalie district cater mostly the cruise ship tourist population. Red Hook hos two retail centers, American Yacht Harbor and Red Hook Plaza. Adjacent to the east side of the Red Hook Plaza is a new retail/office development under construction. This center is known as East End Plaza and will contain about 72,000 square feet of retail and office. According to the leasing agent, the center has secured two banks, several fast food restaurants and several economic groups moving from established business in Charlotte Amalie. Rents are quoted at $50 to $60 per square foot with a pass through of $5.00, excluding real estate taxes and insurance. The center has applied for an exemption of real estate taxes; however, it has not yet been granted. The leasing agent indicated pass-throughs would increase by $3.00 per square foot if the exemption is not granted. In general, real estate values and rents are expected to remain at the current levels, which is proportionate to the area economic growth. Rental rates hove not changed significantly in a number of years, although in centers in the Red Hook area, rents have increased as the area attracts more attention from businesses wanting to move from the central business district. Further, economic incentives offered to new developments, or developments planning significant capital improvements hos also had a positive effect on rental rate growth in Red Hook. 10 O 2007 CB Richard Ellis, Inc. EFTA00787785 AMERICAN YACHT HARBOR & MARINA NEIGHBORHOOD ANALYSIS NEIGHBORHOOD ANALYSIS LOCATION The neighborhood is located on the island of St. Thomas and is considered a suburban location. The city of Red Hook is located in southeastern portion of the island, about 20 mile east of the Charlotte Amalie Business District. The subject property lies within the Red Hook, Quarter #2, which lies within the east portion of the neighborhood. 11 S 2007 CB Richard Ellis, Mc. EFTA00787786 AMERICAN YACHT HARBOR & MARINA NEIGHBORHOOD ANALYSIS BOUNDARIES The neighborhood boundaries are detailed os follows: North: Highway 38 South: Vessup Boy East: Atlantic Ocean West: Highway 32 LAND USE Land uses within the subject neighborhood consist of a mixture of commercial and residential development. The immediate area surrounding the subject consists of the major commercial developments in Red Hook. The ferry dock for the connection to St. John is adjacent to the east line of the subject and is a major generator of tourist traffic for the area. The majority of the single-family residential development within a one mile radius of the subject may be described as rural homes in the $100,000 to over $1,000,000 price range for homes on the waterfront. The area is somewhat remote and interior subdivision roads ore one-lane asphalt paved facilities. The topography of the subject area is generally sloping, with numerous properties built with the terrain incorporated in to the design. Most of the single-family residences appear to hove been constructed over twenty years ago and are generally in average to good condition. GROWTH PATTERNS Growth patterns on the island generally follow the tourist industry and concentrate mainly in the Charlotte Amalie and Havensight areas, west of the subject. As mentioned, the Red Hook area houses one of the ferries used for inter-island transportation to and from St. Johns and Tortola, BVI. Cowpet Bay, just south of Red Hook is on upscale residential area featuring water views and frontage. In general, the growth patterns of St. Thomas are tied to the cruise lines and tourist, but also depend heavily on improvements made by the local government in terms of roads, utility services and other municipal services. There is limited vacant developable commercial land available; however, there appears to be ample vacant residential land. In most cases, the residential land is along the slopes of the mountains and is difficult to develop. Most sites that have been developed are developed with the improvements on the high side of the lot, affording the best views possible. ACCESS Primary access to the subject neighborhood is provided by Highwoy 30 to Highway 32. Highway 30 and Highway 32 are part of the circular highway around the island. The highway numbering changes several times as it traverses the island; however, Highway 30 is the southern most and busiest portion. Highwoy 30 provides access to and from the Cyril E. King Airport, Charlotte Amalie and Havensight, the predominant developments on the island. Highway 32 provides access to Red Hook and more or 12 O 2007 CB Richard Ellis, Inc. EFTA00787787 AMERICAN YACHT HARBOR & MARINA NEIGHBORHOOD ANALYSIS less forms a circle from Highway 30 to the west as Highway 38 further north and west. For the most port, these highways are two lane asphalt paved facilities with no shoulder. The commute to the Charlotte Amalie Business District from the subject neighborhood is about thirty minutes. The drive to the Cyril E. King Airport takes about forty minutes. The airport provides service to American Airlines and several smaller airlines. CONCLUSION The neighborhood appears to be predominately rural residential in nature with the American Yacht Harbor and Red Hook Plaza, for the most part, comprising the commercial developments in the oreo. Many homes ore second homes for owners and most take advantage of the elevated views of the Caribbean Sea and the surrounding countryside. Smaller communities ore located to the west of Red Hook and comprise of older residential homes with free-standing commercial facilities were demand warrants. The subject property is o 2.12-acre landside site with a southerly view of the Vessup Boy. The view is unobstructed. Very little new development was noted in the immediate area; however, there is o new retail/office development under construction just east of the subject across Red Hook Rood (Highway 32). Red Hook's interior roads are one•lane asphalt paved, with some being grovel paved. In general, the immediate area is rural in nature with supporting facilities concentrated around the subject and the ferry docks. Property values appear to be relatively constant. 13 Ce) 2007 CB Richard Ellis, Mc. EFTA00787788 AMERICAN YACHT HARBOR IS MARINA SITE ANALYSIS SITE MAP 14 :1e.,% 2007 CB Richard Ellis, Inc. EFTA00787789 AMERICAN YACHT HARBOR & MARINA SITE ANALYSIS SITE ANALYSIS The following chart provides a summary of the salient features relating to the subject site. SITE SUMMARY Physical Description Gross Site Area (Fee Ownership) Net Site Area (Fee Ownership) Submerged Land Area (Leasehold Interest) Primary Road Access Zoning District Flood Map Panel No. Flood Zone 5.32 Acres 2.12 Acres 3.20 Acres Red Hook W-1, Waterfront - 780000 0020E A 231,739 Sq. Ft. 92,347 Sq. Ft. 139,392 Sq. Ft. Pleasure District Source: Various sources compiled by CBRE LOCATION The subject is on the north side of the Vessup Bay, and the south side of Red Hook Road (Highway 32), adjacent to the west side of the St John/Tortola Ferry landing. The street address is 6100 Red Hook Quarters #2, Red Hook Quarter #2, USVI. ASSESSOR'S PARCEL NUMBER The Tax Assessor's parcel numbers for the upland portion of the subject are 1-07702-0134-00, 1- 07702-0133-00 and 1-07702-0135-00. The submerged portion of the subject is owned by the Coastal Zone Management Commission and is not subject to ad valorem taxes. Further, the landside or upland portion of the subject site is exempt from real estate taxes through December 31, 2001, as a result of an Economic Development Commission (EDC) tax exempt status. This status was granted based on the need for development of properties in the Red Hook area and granted to the subject property due to the renovations and upgrades to the improvements. According to the general manager, the exemption will likely be granted again upon the expiration of the current exemption; however, he indicated the exemption may not be 100%, but hos no way to determine the likely percentage of the exemption. Apparently the exemption will depend on the amount of capital improvements to the property and could conceivably remain at 100%. We have assumed the current exemption will be extended at the current 100% exemption rate. LAND AREA The londside portion of the site contains 2.12 acres or 92,347 square feet of land. The submerged land contains 3.20 acres or 139,392 square feet and is adjacent to the southern boundary of the landside tract. There is no unusable, excess or surplus land area. 15 O 2007 CB Richard Ellis, Inc. EFTA00787790 AMERICAN YACHT HARBOR & MARINA SITE ANALYSIS SHAPE AND FRONTAGE Both portions of the subject site are irregular in shape. Only the landside portion of the subject has direct occess to public roadways. INGRESS/EGRESS Ingress and egress is available to the site via Red Hook Rood (Highway 32), just west of the St. John/Tortola Ferry Landing. Red Hook Road, at the subject property, is o major east/west street that is improved with one lane of traffic in each direction. Street improvements include asphalt paving, open ditches for drainage and no shoulders. Street parking is permitted, and the traffic flow is generally congested. Please refer to the prior site mop for the layout of the street that provide access to the subject property TOPOGRAPHY AND DRAINAGE The portion of the landside site immediately adjacent to Red Hook Road is generally level and at street grade. The topography then slopes significantly towards the southern boundary and Vessup Boy. The topography of the site is not seen as an impediment to the development of the property. During our inspection of the site, we observed no drainage problems and assume that none exist. The southern 3.20 acres of the site is submerged land owned by the government. SOILS A soil analysis for the site has not been provided for the preparation of this appraisal. In the absence of a soil report, it is a specific assumption that the site hos adequate soils to support the highest and best use. EASEMENTS AND ENCROACHMENTS A title policy for the property hos not been provided for the preparation of this appraisal. Based on our visual inspection and review of the site plan, the property does not appear to be adversely affected by any easements or encroachments. It is recommended that the client/reader obtain a current title policy outlining all easements and encroachments on the property, if any, prior to making a business decision. ACCESS AGREEMENTS There ore no known occess agreements that may affect the subject's marketability. Vehicular parking at the subject is a major negative aspect of the site, os tenants occupying the retail/office space must 16 © 2007 CB Richard Ellis, Mc. EFTA00787791 AMERICAN YACHT HARBOR & MARINA SITE ANALYSIS pay for parking, with only a few spaces available in the front of the buildings for patron parking. Tenant parking is available in an under-building parking garages below Buildings B and C. COVENANTS, CONDITIONS AND RESTRICTIONS The subject property is subject to the restrictions within the Submerged Land Lease administered by the Coastal Zone Management Commission. Without this lease, the subject property would not be allowed to operate, os it defines the lease area, specific uses of the property, lease rate, and expense responsibility. The lease is included in the Addenda. Further, the landside portion of the site is restricted by zoning from St. Thomas. UTILITIES AND SERVICES The site is within the jurisdiction of St. Thomas and is provided municipal services, including police and fire protection. Electricity is supplied by WAPA (Water & Power Authority), while sewer is provided by the Nazareth Water Treatment facility. Water is furnished on-site via a 25,000 gallon desalination plant owned and operated by the subject. All utilities are available to the site in adequate quality and quantity to service the highest and best use as if vacant and as improved. Electricity and water are charged to the docks as metered. Water is charged to the retail/office tenants based on metered usage as well. Trash removal is also charged to the retail/office tenants, typically on a fixed monthly rate os predetermined by the type of use in the leased space. FLOOD ZONE According to flood hazard mops published by the Federal Emergency Management Agency (FEMA), the site is within Zone A, as indicated on the indicated Community Map Panel No. 780000 0020E. FEMA Zone A: Special flood hazard areas subject to inundation by the 100-year flood. Because detailed hydraulic analyses have not been performed, no base flood elevations or depths are shown. Mandatory flood insurance purchase requirements apply. ENVIRONMENTAL ISSUES CBRE hos not observed, yet is not qualified to detect, the existence of potentially hazardous material or underground storage tanks that moy be present on or near the site. The existence of hazardous materials or underground storage tanks may have on affect on the value of the property. For this appraisal, CBRE has specifically assumed that the property is not affected by any hazardous materials and/or underground storage tanks that moy be present on or near the property. ADJACENT PROPERTIES The adjacent land uses are os follows: 17 O 2007 CB Richard Ellis, Inc. EFTA00787792 AMERICAN YACHT HARBOR & MARINA SITE ANALYSIS North: Red Hook Plaza South: Vessup Bay East: St. John/Tortola Ferry Landing West: Old commercial development (appears to be closed) CONCLUSION The site hos a remote location in terms of proximity to the primary tourist attractions and destinations, but afforded good access and visibility from the roadway frontage. It does have good access to the fishing grounds in the Atlantic Ocean, which is o positive consideration for o marina operation in limiting the amount of fuel boat owners must use to and from the best fishing grounds in the Atlantic. The size of the site is typical for the use, and there are no known detrimental uses in the immediate vicinity. The submerged land is subject to wove action from the open waters of Vessup Boy and on- site traffic and parking is considered poor. The parking factor hos o negative impact on maximizing the income potential of the subject. 18 t: 2007 CB Richard Ellis, Mc. EFTA00787793 AMERICAN YACHT HARBOR & MARINA IMPROVEMENT ANALYSIS IMPROVEMENT ANALYSIS The capacity (in terms of length), water ingress and egress, pedestrian access, quality of dockage and site improvements (as well as any other amenities) has a direct influence on its marketability and operating success of a marina. Likewise, on-site parking, ease of access and security are paramount for retail success. Design and functionality can affect the operations and profitability, also. These factors and how they affect the subject ore analyzed and presented below. GENERAL DESCRIPTION The following chart presents a summary of the various components of the proposed subject improvements. IMPROVEMENT SUMMARY Type of Docks Concrete pilings, wood decking, fixed Dock Size 5,511 LF Retail/Office Net Rentable Area 47,344 SF Number of Retail/Office Buildings 6 Year Built 1992 Site Amenities Fuel Dock, In-dock Fueling, Dock Master's Office, Retail & Restuarants Parking Type Surface and under building garage Slip Breakdown No. of Slips % of Total A Dock 23 17.7% B Dock 26 20.0% C Dock 20 15.4% D Dock 26 20.0% E Dock 10 7.7% P Dock 25 19.2% Total/Average: 130 100.0% Source: Various sources compiled by CBRE Plons and specifications were not provided for the preparation of this appraisal. The following is a description of the subject improvements and bosic construction features derived from discussions with the developer, a limited site plon and CBRE's physical inspection. YEAR BUILT Prior to the current development of the subject site, the property was being used as a marina. The subject property os it is now was constructed in 1992. 19 © 2007 CB Richard Ellis, Mc. EFTA00787794 AMERICAN YACHT HARBOR & MARINA IMPROVEMENT ANALYSIS DESIGN AND LAYOUT The subject property consists of two primary uses, retail/office and a marina. The retail/office portion is on the landside portion of the site, as well as the dock master's office. The boot slips extend from the southern edge of the landside site into Vessup Boy. Primary vehicular ingress/egress is via four curb cuts along Red Hook Road. Parking, although limited, is available along the front of the retail/office improvements, as well as a parking garage under Building B and C. Parking in the garage is for retail/office tenants and in some cases for on additional fee. Water ingress/egress is via a channel cut from the Atlantic Ocean known as Vessup Boy. The channel depth does not appear to affect the use of the subject by larger vessels with drafts in excess of 4'. The basic construction features are summarized as follows. FOUNDATION The foundation of the building improvements is reinforced concrete footings and columns, while the foundation of the dockage is concrete pylons. CONSTRUCTION COMPONENTS The frame of the building improvements is wood or steel, with the exterior walls being wood siding. The deck areas are wood planks atop the concrete pylons. DOCK MASTER'S OFFICE The dock master's office area is located under the decking of Building B & C and faces the marina. This building is constructed of wood framing and plaster finish. The dock master's office is located just north of C Dock. RETAIL/OFFICE BUILDINGS There are six building structures to the north of the marina. Except for Building F, these buildings are two-story structures constructed with wood or steel framing and plaster on the lower level exterior walls. The upper levels hove wood siding on the exterior walls. Roof covering is galvanized metal and most buildings hove on overhang with wood decking for pedestrian traffic and access to the upper level. Access to the upper levels is via steel framed stairwells, as well as on elevator between Buildings B & C. Building F, located in the northwest corner of the site is a one-story structure at street grade, cantilevering into a second, lower level as the terrain slopes towards the south. This building hos a flat roof and is in fair condition. This building houses four tenants, the largest being the East End Café. The lower level is slated for construction of new storage units for slip tenants. Six new storage units hove been installed, with another 23 planned for the rest of the lower level. Two of the storage units will be utilized as storage for the marina owner. The cost to complete the n