1. BUSINESS ISSUES FORUM: LITIGATION SERVICES MARCH 30, 2009 COUNSELORS OF REAL ESTATE CASE STUDY PRESENTATION BY: Marilyn Kramer Weitzman, MAI, CRE, FRICS President, The Weitzman Group, Inc. & Mark Jon Sugarman, Esq. Partner, Bryan Cave LLP

2. 2 2 Out of 3; Baseball; Neutral Decides; and, AAA TYPES OF ARBITRATION

3. 3 RETENTION OF NEUTRAL Usually, two (2) party appointed appraisers must agree on a neutral.

4. 4 Appraiser of Land Value Market Consultant – Residential, Hotel, Office, Retail Real Estate Economist – Particularly in Troubled Times for Current Assessment and Forecast Mortgage Banker – Availability and Cost of Financing, Financing Climate RETENTION OF EXPERTS

5. 5 Zoning Consultant – Building Envelope for a Land Residual Architect – Renderings and Building Envelope Cost Estimation Consultant – Hard and Soft Costs of Potential Development Scenarios High-Profile Manhattan Developer – Providing Support for Marketability and Feasibility Conclusions RETENTION OF EXPERTS (cont.)

6. 6 Other Issues Falling Market Rising Market DEVELOPMENT OF STRATEGY FOR VALUATION Zoning Issues Comparable Sales Land Residual Two (2) or Three (3) Logical, Marketable Scenarios to Determine Highest and Best Use

7. 7 Time Limits Number of Expert Witnesses Rebuttals Meeting Dates Formality – Attorneys, Court Reporters RULES OF ARBITRATION

8. 8 Interpretation of Ground Lease Renewal Clauses Highest and Best Use Subject to Existing Improvements (Highest and Best Use Issue) Subject to Existing Ground Lease (Coop vs. Condo) SPECIAL ISSUES

9. 9 Land Underlying Major Manhattan Class A Skyscraper (Office Building) Significant Multi-Level Retail Space on 57 th Street Ground Lease Clause: Market Value, Highest and Best Use, Unencumbered, As Vacant FAR (Floor Area Ratio) of 15 for Commercial and Mixed-Use Commercial/Residential No Major Construction Development Constraints Date of Value: January 1, 2008 LITIGATION SERVICES: Case Study Facts

10. 10 Market Value of Land: $825 per square foot vs. $375 per square foot Appraisal Methodology: Sales Comparison Approach Only Sales Comparison Approach plus Land Residual Technique Which Provides Best Indication of Market Value at a Development Site? LITIGATION SERVICES: Major Disagreement Points

11. 11 Highest and Best Use: 1.Condominium with Major Retail Component 2.Hotel and Condominium with Small Amount of Ground Floor Square Footage 3.Retail/ Office/ Condominium LITIGATION SERVICES: Major Disagreement Points (cont.)

12. 12 Necessity of Feasibility Study Economic Outlook as of August 2007 (Date of Exchange of Appraisal Reports and then Rebuttals) and as of January 1, 2008 (Date of Valuation) Availability of Acquisition and Construction and Mezzanine Loan Financing for Over $100 Million Development Projects in Manhattan LITIGATION SERVICES: Major Disagreement Points (cont.)

13. 13 Selection of Land Sales: Applicability of Smaller Land Sales (under 10,000 Square Feet) to a Much Larger Subject Site Applicability of West 57 th Street Land Sales Potential Decline in Land Value due to Impending Decline in Economy: No Sizeable Land Sales Past May 2007 LITIGATION SERVICES: Major Disagreement Points (cont.)

14. 14 Length of Construction Schedule: 36 vs. 48 Months Height of Building and Availability of Views from Upper Floor Condominium Residences Health of the Condominium Market (New Units) LITIGATION SERVICES: Major Disagreement Points (cont.)

15. 15 Health of the Hotel Market Correct Amount and Type of Retail Square Footage: High-End vs. Middle Market Retail Key Issue: Was there any Market for Vacant Land as of January 1, 2008? LITIGATION SERVICES: Major Disagreement Points (cont.)

16. 16 Questions and Comments?