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Welcome to the 4th Quarter 2021 edition ( 3rd Quarter 2021 data ) of the RealtyRates.comTM Investor Survey.

The Investor Survey presents the results of our polling of 312 appraisal and brokerage firms, developers, investors, and
lenders nationwide. The bulk of the data is comprised of individual tables for each property type that include surveyed
minimum, maximum and average mortgage and equity requirements and resulting built-up overall capitalization rates
(OARs) via debt coverage ratio and band of investment techniques, together with surveyed OAR’s based on actual net
operating incomes (NOI) exclusive of reserves and actual sale prices. Reserves for repairs and replacements are also
tracked and presented by property type in a separate table.

In addition, the Investor Survey also includes a market commentary, discount rates for acquisitions, re-capitalizations
and new construction, a mortgage matrix, a separate equity dividend rates table, interim (construction and mini perm)
financing matrices, a property desirability matrix, historical average OARs, land lease cap and discount rates, and as
indicated above, reserve requirements, all by property type.

RealtyRates.comTM is a Trade Name and Trademark of Robt. G. Watts (RGW). Founded in Honolulu, Hawaii as Pacific
Research Company and now headquartered in Bradenton, Florida, RGW has been providing professional analytical,
advisory and development management services to investors, property owners, major corporations, lenders and
government agencies worldwide since 1973.

We hope you find the Investor Survey useful and informative.

Robert Watts

Copyright © 2021 Robt. G. Watts / RealtyRates.comM

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Table of Contents

Market Commentary 4
- Current and Historical Average Cap Rates

Financial Indices 5
- Interest Rate Indices

Permanent Financing 6
- Mortgage Matrix; Reserve Requirements; Property Desirability Matrix

Interim Financing 8
- Construction; Mini-Perm

Investment Rates 11
- Discount Rates; Equity Dividend Rates

Mortgage and Equity Requirements and Overall Cap Rates

Apartments 14
- Garden/Suburban Townhouse; Hi-Rise/Urban Townhouse; Student Housing
Golf Courses & Country Clubs 16
- Public Daily Fee Courses; Semi-Private Clubs; Private Clubs
Health Care & Senior Housing 18
- Acute Care; Out-Patient Care; Congregate Care; Assisted Living
Industrial 21
- Warehouse/Distribution; Flex/R&D; Climate Controlled/Manufacturing
Lodging Facilities 23
- Full Service; Limited Service; Golf/Gaming/Resort
Mobile Home & RV Parks 25
- RV Parks & Campgrounds; Manufactured Housing; Mobile Home Parks
Office Buildings 27
- CBD; Suburban; Medical
Restaurants 29
- Full Service; Fast Food
Retail 31
- Anchored; Unanchored; Free Standing; Convenience Store/Gas Stations
Self-Storage Facilities 34
- Climate Controlled; Mini Storage
Special Purpose 36
- Schools and Daycare Facilities; Churches, Temples & Synagogues

Land Leases 38
- Capitalization & Discount Rates

Addendum
- Glossary
- About the Investor Survey
- Subscription Information
Market Commentary
RealtyRates.com Investor Survey Reports Modest Cap Rate Index Decrease For All Property
Types During 3rd Quarter 2021

Coincident with a 31 basis point decrease in Treasury rates to which most commercial mortgage interest rates are
indexed, together with no change in equity dividend rates, the RealtyRates.comTM Investor Survey Weighted
Composite (Cap Rate) IndexTM decreased a modest 16 basis points from 8.94 to 8.77 percent during the 3rd Quarter
of 2021.

The greatest quarter-over-quarter cap rate index decreases were recorded by the Apartment, Lodging and Self
Storage sectors, all down 18 basis points, followed by the Restaurant and Special Purpose sectors, both down 17
basis points.

The smallest quarter-over-quarter cap rate index decreases were recorded by the Office and Retail sectors, down 15
basis points, followed by the Golf, Healthcare/Senior Housing and Industrial sectors, down 16 basis points.

Mortgage lending standards were somewhat eased on stronger demand for both multifamily and nonresidential loans
during the 3rd Quarter. Meanwhile spreads were unchanged overall, but average permanent mortgage rates were
down 32 basis points.

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Financial Indices

Relevant financial indices, many of which are utilized as for the pricing of various mortgage products, are
summarized on the following table.

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Permanent Financing

The following tables summarize prevailing mortgage terms and reserve requirements by property type as reported by
survey respondents as well as lender indications of the desirability of mortgages involving various property types.
These data are for Class A and B properties nationwide.

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Interim Financing

The following tables summarize lender-quoted interim (construction and mini perm) financing rates and terms for
Class A and B properties nationwide.

The 106 respondents to this portion of the Investor Survey include community, regional, and national banks,
national and regional mortgage brokers, and national mortgage companies.

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Investment Rates

The following tables summarize discount and equity dividend rates reported by survey respondents. In all cases,
rates were derived from Class A and B properties nationwide and are exclusive of reserves. Note that
"Recapitalizations" refers to re-financing under current use.

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Mortgage & Equity Requirements & Overall Cap Rates

The following tables summarize prevailing mortgage terms and resulting built-up overall capitalization rates
(OAR's) via debt coverage ratio and band of investment techniques, together with OAR's from consummated
transactions as reported by survey respondents based on actual net operating income (NOI) exclusive of reserves and
actual sales price exclusive of deferred maintenance. These data are for Class A and B properties nationwide.
Mortgage terms and equity dividend rates are likewise national rates as reported by survey respondents.

Within each major property category, e.g., Office, Industrial, Retail, data is provided for two to four sub-categories,
e.g., CBD Office, Suburban Office, Medical Office. However, such sub-categories do not represent the sum total of
properties included in major categories. For example, the Office category also includes properties that do not
readily fall into one of the sub-categories such as “fringe” buildings located on the periphery of the Central Business
District. Therefore, the average of any given factor for all of a group of sub-categories may not equate to the
average of that factor for the category as a whole. Similarly, category minimums and maximums may or may not be
reflected by the sub-category data presented.

It should be further noted that because inputs have been rounded for presentation but not for calculation, your own
calculations may produce slightly variable results. While this is especially noticeable with regard to mortgage
constants, the ultimate effect on built-up cap rates is negligible.

And finally, built-up minimums and maximums do not specifically refer to the calculated cap rates, but rather to the
surveyed mortgage and equity requirements. As a consequence, you may occasionally note, for example, a
minimum category cap rate that is slightly higher than the minimum for one or more of the of the sub-categories.

Survey respondents include 312 appraisers, brokers, developers, investors and lenders in all 50 states, many with
regional and national coverage.

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 Land Leases

The following table summarizes prevailing land lease capitalization and discount rates. The former reflect initial
rates of return on appraised values for vacant land proposed for development. They do not address increases in land
lease payments or the reversion but may include percentage rent. The latter are internal rates of return being
achieved by landowners on improved properties. As such, they include changes in land lease payments, percentage
rent where applicable, and the reversion of the entire property at the termination of the lease. Total lease terms
range from 40 to 99 years, while fixed rent periods range from one to 10 years. Generally, short-term (1-3 years)
fixed rent periods auto-adjust based on a national reference rate such as the Consumer Price Index, while long-term
(5-10 years) fixed rent periods are based on appraised values but are often subject to negotiation and/or arbitration.

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Glossary

Amortization: Years required at the specified interest rate to pay off the entire mortgage, including principal and
interest, with a level payment.

Band of Investment Technique: A method of calculating the Overall Capitalization Rate via a weighted average of
Mortgage and Equity requirements. Calculated as:

(LTV x Mortgage Constant) + (Equity-to-Value Ratio x Equity Dividend Rate) = OAR

Debt Coverage Ratio (DCR): Ratio of annual mortgage payment, including interest and principal, to total net
operating income (NOI).

Debt Coverage Ratio Technique: A method of calculating the Overall Capitalization Rate (OAR) based on the
Debt Coverage Ratio (DCR):

DCR x LTV x Mortgage Constant = OAR.

Discount Rate: An annual competitive rate of return on total invested capital necessary to compensate the investor
for the risks inherent in a particular investment. A yield rate used to convert future payments or receipts into present
value.

Equity Component: Property value less mortgage component.

Equity Dividend: The dollar return to the equity component:

Net Operating income - Debt Service = Equity Dividend

Equity Dividend Rate: Rate of return to the equity component:

NOI - Debt Service = Equity Dividend / Equity Investment = Equity Dividend Rate

Interest Rate: Generally calculated as Corresponding (to actual term of loan) Treasury Rate + Spread Over Base.
Some, including RealtyRates.com, utilize the 10-Year Treasury throughout.

Mortgage Constant: A factor which when applied to the total mortgage, results in the periodic payment necessary
to fully amortize a loan at the specified interest rate and amortization period. Mortgage constants may be expressed
as annual or monthly. RealtyRates.com employs annual constants.

Net Operating Income (NOI): Income net of all operating costs including vacancy and collection loss but not
including debt service. Appraisers also typically expense reserves for repairs and replacements. However, because
reserves are not usually reported along with other transaction data, RealtyRates.com tracks lender requirements but
does not include them in calculations.

Overall Capitalization Rate (OAR): Ratio of Net Operating Income to property value or sales price.

Spread Over Base: Difference between a specified index and the mortgage interest rate. Most common indices are
US Treasury Bonds, Prime Interest Rate and London Interbank Offering Rate (LIBOR).

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About the Survey

The RealtyRates.comTM Investor Survey represents one of the most comprehensive data sets of investment activity
compiled for the commercial real estate industry. While no information in this highly fragmented industry is perfect
or all encompassing, RealtyRates.com has established rigid data collection and classification methodology including
sourcing requirements and detailed procedures to ensure the integrity and timeliness of our information.

RealtyRates.comTM has attempted to conform wherever possible to the proposed standards and definitions of the
Data Consortium and the Appraisal Institute and any known deviations from those standards are noted.

The information and data maintained by RealtyRates.comTM and presented in this report encompasses all markets
nationally and includes only class A and B properties. Readers should note that there is substantial, albeit largely
local investment activity that involves properties that do not meet these criteria.

Within each major property category, e.g., Office, Industrial, Retail, data is provided for two to four sub-categories,
e.g., CBD Office, Suburban Office, Medical Office. However, such sub-categories do not represent the sum total of
properties included in major categories. For example, the Office category also includes properties that do not
readily fall into one of the sub-categories such as “fringe” buildings located on the periphery of the Central Business
District. Therefore, the average of any given factor for all of a group of sub-categories may not equate to the
average of that factor for the category as a whole.

The RealtyRates.comTM Investor Survey is based on information provided by 314 commercial real estate appraisers
(16%), brokers (9%) developers (8%), investors including REIT’s (8%), and lenders (59%), in all 50 states, many
with regional and national coverage. Transactions include only asset sales as opposed to entity level transactions.
Thus, merger and acquisition activity among entire REITs or other business entities is excluded from the analysis, as
are controlling partial interests. Trend analysis generally excludes certain transactions that exceed 5% of the data
sample or that may otherwise skew results. For a more complete glossary and additional information on the
methodologies employed, visit our Web site at www.RealtyRates.com.

RealtyRates.comTM is the Trade Name and a Trademark of Robt G. Watts & Co. (RGW). Founded in Honolulu,
Hawaii as Pacific Research Company and now headquartered in Bradenton, Florida, RGW has provided
professional analytical, advisory and development management services to investors, property owners, major
corporations, lenders and government agencies worldwide since 1973.

It is a violation of Federal law to photocopy or reproduce any part of this publication without first obtaining
permission from RealtyRates.comTM.

Information presented by RealtyRates.comTM has been compiled from sources believed to be reliable. While we
have no reason to doubt its accuracy, RealtyRates.comTM makes no guarantees, warranties or representations. The
data is presented as is without warranties of any kind express or implied and may be subject to material revisions.

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Subscription Information

The RealtyRates.comTM Investor Survey of 32 income-producing property types, Developer Survey of 22 sell-out
property types, and Market Survey of seven core property types are available via annual online subscription in both
HTML and PDF formats, as well as by individual quarterly copy in PDF format only.

Use your credit card to subscribe to or purchase the latest edition of the Investor Survey online at
www.RealtyRates.com, or print this page and return it together with your check to the address below. Your report
or user name and password will be e-mailed to you.

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