American
Appraisers
Corporation
(502) 267-6320 Office
(502) 267-6344 Fax
10801 Electron Drive, Suite 308
Louisville, KY.  40299
REGIONAL ANALYSIS OF MIAMI
FORT LAUDERDALE – POMPANO BEACH, FLORIDA REAL ESTATE APPRAISAL

The subject is influenced in a general manner by the economic, political, physical and social characteristics of the Miami-Fort Lauderdale-Pompano
Beach Metropolitan Statistical Area (MSA). An MSA is a geographic area with a significant population nucleus, along with any adjacent communities
that have a high degree of economic and social integration with that nucleus.   The subject property is located in Miami.  The map below presents
the MSA location within Florida.

The value of real property is influenced by the interaction of four basic forces. These forces include social trends, economic circumstances,
environmental conditions, and governmental controls and regulations. The interaction of these four forces influences the value of every parcel of
real estate in the market.

SOCIAL TRENDS

Social forces are trends that are exerted primarily through population characteristics. Real property values are affected not only by population
changes and characteristics, but also by various forms of human activity.

Population and Area:         

Population growth trends influence employment growth, income levels, and many other key demand parameters analyzed in determining
commercial real estate productivity.  The MSA, state, and US have shown consistent growth trends over the past 10 years and are anticipated to
continue to grow. In general, population growth is a positive indicator for real estate.

Higher Education:         

Institutions of higher learning typically are not as vulnerable to economic downswings, and they help to provide an area with a more solid
employment base.  The numerous colleges and universities in South Florida include: Barry University, Broward College, Carlos Albizu University,
Florida Atlantic University, Florida International University, Florida Memorial University, Johnson & Wales University, Le Cordon Bleu College of
Culinary Arts Miami, Lynn University, Miami Dade College, Northwood University, Nova Southeastern University, Palm Beach Atlantic University,
Palm Beach State College, St. Thomas University, and the University of Miami.

Recreational and Regional Attractions:         

Recreational and regional attractions enhance an area’s quality of life. These activities may also have a significant economic impact on an area by
increasing the demand for services and retail trade created by visitors. The South Florida region offers opportunities to participate in a variety of
entertainment, cultural, and recreational options.

Miami is home to many entertainment venues, theaters, museums, parks and performing arts centers. The newest addition to the Miami arts scene
is the Adrienne Arsht Center for the Performing Arts, the second-largest performing arts center in the United States after the Lincoln Center in New
York City, and is the home of the Florida Grand Opera. Within it are the Ziff Ballet Opera House, the center's largest venue, the Knight Concert
Hall, the Carnival Studio Theater and the Peacock Rehearsal Studio. The center attracts many large scale operas, ballets, concerts, and musicals
from around the world and is Florida's grandest performing arts center. Other performing arts venues in Miami include the Gusman Center for the
Performing Arts, Coconut Grove Playhouse, Colony Theatre, Lincoln Theatre, New World Symphony House, Actor's Playhouse at the Miracle
Theatre, Jackie Gleason Theatre, Manuel Artime Theater, Ring Theatre, Playground Theatre, Wertheim Performing Arts Center, the Fair Expo
Center and the Bayfront Park Amphitheater for outdoor music events.

The city is home to numerous museums as well, many of which are in Downtown. These include the Bass Museum, Coral Gables Museum, Frost Art
Museum, Historical Museum of Southern Florida, Jewish Museum of Florida, Lowe Art Museum, Miami Art Museum, Miami Children's Museum, Miami
Science Museum, Museum of Contemporary Art, Vizcaya Museum and Gardens, Wolfsonian-FIU Museum and the Miami Cultural Center, home of
the Miami Main Library.

Miami is a major fashion center, home to models and some of the top modeling agencies in the world. Miami is also host to many fashion shows and
events, including the annual Miami Fashion Week and the Mercedes-Benz Fashion Week Miami held in the Wynwood Art District.  Miami is also the
home of the world's largest art exhibition, dubbed the "Olympics of Art", Art Basel Miami Beach. The event is held annually in December, and
attracts thousands of visitors from around the world.

Miami's temperate weather allow for year-round outdoors activities. The city has numerous marinas, rivers, bays, canals, and the Atlantic Ocean,
which make boating, sailing, and fishing popular outdoors activities. Biscayne Bay has numerous coral reefs which make snorkeling  and scuba
diving popular. There are over 80 parks and gardens in the city. The largest and most popular parks are Bayfront Park and Bicentennial Park,
Fairchild Tropical Botanic Garden, Key Biscayne, Morningside Park, Pace Park, Tropical Park, Virginia Key, and Watson Island. Other popular
destinations in the area include Jungle Island, Zoo Miami, Miami Seaquarium, Coral Castle, St. Bernard de Clairvaux Church, Charles Deering
Estate.

The Miami Heat is currently the only major professional sports team that plays its games within Miami's city limits at the American Airlines Arena.
The Miami Dolphins and the Florida Marlins both play their games in Miami Gardens. The Orange Bowl, a member of the Bowl Championship
Series, hosts their college football championship games at Sun Life Stadium. The stadium has also hosted the Super Bowl. In 2010 construction
began on a new ballpark for the Florida Marlins within the city limits of Miami on the site of the old Orange Bowl stadium. Miami FC, Florida's only
professional soccer team, plays at Tropical Park Stadium. The Florida Panthers NHL team plays in neighboring Broward County at the BankAtlantic
Center in the city of Sunrise. As well as having all four major professional teams, Miami is also home to Miami FC, Miami Tropics, the Sony Ericsson
Open for professional tennis, numerous greyhound racing tracks, marinas, Jai-Alai  venues, and golf  courses.

ECONOMIC FORCES

Economic forces are the fundamental relationships between current and anticipated supply and demand and the economic activities in which the
population participates in order to satisfy its wants, needs, and demands through its purchase power.  

Sector Employment:

The chart below indicates the employment by sector for both the state and the MSA per the US bureau of labor.  As shown the overall employment
composition for both the MSA and state are similar and diverse indicating a stable economic base.

Industries:                

South Florida is the geographic and business center for the largest metropolitan region in the Southeast United States. South Florida is also one of
the world’s leading metropolitan areas for global companies as home to 1,200 multinational companies that manage over $200 billion (US) in
revenue. In addition, 232 of these 1,200 companies are global headquarters. Several large companies headquartered in the area are: Alienware,
Arquitectonica, Arrow Air, Bacardi, Benihana, Brightstar Corporation, Burger King, Celebrity Cruises, Carnival Corporation, Carnival Cruise Lines,
CompUSA, Crispin Porter + Bogusky, Espírito Santo Financial Group, Fizber.com, Greenberg Traurig, Inktel Direct, Interval International, Lennar,
Norwegian Cruise Lines, Perry Ellis International, RCTV International, Royal Caribbean Cruise Lines, Ryder Systems, Seabourn Cruise Line,
Telefónica USA, TeleFutura, Telemundo, Univision, U.S. Century Bank, and World Fuel Services.

The region’s proximity to Latin America and the Caribbean is a key strategic asset for international commerce in the Western Hemisphere. Miami
offers access to markets throughout the Americas, as well as to Europe and Asia, with global transportation connections at Miami International
Airport and the Dante B. Fascell Port. The Port of Miami-Dade is both the world's leading port for cruise line passenger traffic and the top container
port in the State of Florida. Additionally, Miami International Airport is the country’s top processor of air cargo. Miami’s multinational corporations
include Apple, Oracle, IBM, Clorox, Burger King, Porsche, approximately 50 Japanese companies, leading Korean multinationals like Hyundai and
Samsung, and an increasingly strong Chinese presence. Miami also serves as the headquarters of Latin American operations for such companies
as AIG, American Airlines, Cisco, Disney, Exxon, FedEx, Kraft Foods, Microsoft, Yahoo, Oracle, SBC Communications, Sony, Visa International, and
Wal-Mart.

ENVIRONMENTAL FORCES:

Environmental forces are both natural and manmade forces that influence real property values. Some environmental forces include climactic
conditions, natural barriers to future development, primary transportation systems, and the nature and desirability of the immediate areas
surrounding a property.  

The area has a tropical climate which is perceived as desirable and often is considered a vacation destination or a good location for 2nd homes.  
Tropical storms and hurricanes have affected the region historically.  This has caused property damage as well as higher premiums for property
insurance.

Transportation:         

The South Florida metropolitan area is served by five interstate highways operated by the Florida Department of Transportation in conjunction with
local agencies. I-95 runs north to south along the coast, ending just south of Downtown Miami. I-75  runs east to west, turning south in western
Broward County; it connects suburban  North Miami-Dade to Naples on the west coast via Alligator Alley, which transverses the Florida Everglades  
before turning north. I-595 connects the Broward coast and downtown Fort Lauderdale to I-75 and Alligator Alley. I-195 and I-395 both connect the
main I-95 route to Biscayne Boulevard and Miami Beach, which is located across Biscayne Bay. I-195 and I-395 also connect to the Airport
Expressway (State Road 112) and the Dolphin Expressway (State Road 836), respectively, both of which run west to Miami International Airport; the
Dolphin Expressway also connects to Florida's Turnpike and the western suburbs of Miami-Dade County.

In Miami, Miami-Dade Transit operates Metrorail, Florida's only rapid transit metro with 22 stations on a 22.4-mile track, the Downtown Miami people
mover, (Metromover) with 21 stations and 3 lines on 4.4-mile track, as well as Metrobus. In Broward County, Broward County Transit runs public
buses as does Palm Tran in Palm Beach County. Additionally, the South Florida Regional Transportation Authority operates Tri-Rail, a commuter
rail train that connects the three of the primary cities of South Florida (Miami, Fort Lauderdale, and West Palm Beach), and most intermediate
points.

South Florida is served by three major airports: Miami International Airport (MIA), Fort Lauderdale-Hollywood International Airport (FLL), and Palm
Beach International Airport (PBI).
The three airports combine to make the fourth largest domestic origin and destination market in the United States, after New York City, Los
Angeles, and Chicago.

The metropolis also has four seaports, the largest and most important being the Port of Miami. Others in the area include Port Everglades, Port of
Palm Beach and the Miami River Port.

GOVERNMENTAL FORCES:

Governmental, political and legal actions at all levels have an impact on property values. The legal climate of a particular time or in a particular
place may overshadow the natural market forces of supply and demand.  

OUTLOOK:

Our review of the above data indicates that the Miami-Fort Lauderdale-Pompano Beach Metropolitan Statistical Area historically has had a strong
economy, evidenced by a diverse economic base, low unemployment rates, and a growing population.  The area also features numerous regional
attractions and an excellent transportation system.  

The nationwide recession has impacted the area over the past several years.  Unemployment levels have increased, there are an increasing
number of foreclosures, and overall consumer spending is down.  The MSA saw a significant appreciation in real estate valuation which led to
overdevelopment in the mid to late 2000s.  With the recession, real estate values have seen a decrease.  On a short time horizon, the recession
will have a negative impact on the real estate market in general.  

On a longer time horizon, given the dynamics of the region, it is anticipated that the economy for the MSA will recover.  The timing for the recovery
is based on an array of factors including the impact of the foreclosures in the market, unemployment levels, consumer behavior, and the lending
environment.

SUBJECT MARKET AREA AND ANALYSIS

Neighborhood is defined as follows: A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises.

The following paragraphs provide an overview of the immediate area.  The subject is located on the north side of Lucerne Avenue, between North
C Street and North D Street and south of 2nd Avenue North.  This location is about a half mile west of downtown Lake Worth.  Lake Worth is about
7 miles south of West Palm Beach and 35 miles north of Fort Lauderdale.  

Major Traffic Arteries

The major highway in the area is I-95.  This highway is a north south interstate highway.  To the south this highway connects to Fort Lauderdale
and further south to downtown Miami. To the north this highway connects to Melbourne, Daytona Beach, and Jacksonville.  I-95 is located about a
half mile west of the subject.

The area is generally laid out in a grid development system.  The nearby major surface routes include Lucerne Avenue and Lake Avenue running
in east west directions and US Highway 1 is the major north south corridor.  US 1 is located about a mile to the east of the subject.

Overall, the subject is considered to have good access and visibility on a macro and micro level.

Land Uses and Development

Land uses and development in the immediate area consists of commercial development, residential development, and institutional land uses:
parks, churches, schools, etc.  The subject is located just north of a commercial corridor, Lucerne Avenue.  Immediately adjacent to the subject
property are several commercial buildings with frontage along this corridor.  Behind the commercial development is generally residential.  The
residential is densely developed detached homes of about 1,000 SF to 1,800 SF built in the 1950s and early 1960s.  The immediate surrounding
area is about 95% developed.  The aerial that follows shows the location of the subject and the surrounding development.

To the immediate north is single family residential in the in-fill development.  The homes appear to be built in the 1950s and 1960s.

To the immediate south of the subject is a small shopping center.  Lucerne Avenue is a one-way street headed west and Lake Avenue is a one way
street headed east.  Both of these corridors are commercially developed.  South of these commercial streets is generally residential.

To the immediate east is downtown Lake Worth.  There are several boutique stores and restaurants in the downtown area.  Further east is Lake
Worth.  On the other side of the lake/lagoon are a series of key islands that are typical of those that line the Southeast Florida area on the other
side of the inter-coastal waterway.

To the immediate west is a senior housing development.  Further west is commercial development.  The development to the west of I-95 becomes
less densely developed.  There are strip shopping centers and other commercial development along Lake Worth Road (Lucerne Avenue and Lake
Avenue merge into Lake Worth Road to the west).

Growth and New Development

The immediate area is nearly fully developed and there is limited new development in the immediate area.  Growth and new development is
generally located to the west of I-95 along scattered commercial sites.  There is also some limited development along US 1 but located generally to
the south or north of Lake Worth   

Demographic Profile

The population in the 1, 3, and 5 mile radii are 21,717, 95,438 and 214,826 respectively.  The area has seen a general stable population over the
last five years and is anticipated to continue to remain fairly stable over the next 5 years.  Owner occupied homes comprise 36.5%, 48.6%, and
53.9% of the total homes in the respective radii.  Median household income in the 1, 3, and 5 mile radii are $36,158, $44,021, and $46,028
respectively.  The median home values are $80,887, $110,006, and $102,473 respectively.  The average year built of the structures (based on
2000 census data) is estimated at 1961, 1969, and 1974.  Overall, these demographics indicate a fairly populated, lower to moderate income level
area.  
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_American
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___Corporation
(502) 267-6320 Office
(502) 267-6344 Fax
10507 Watterson Tr., 2nd Flr
Louisville, KY.  40299