1. INCOME AND EXPENSE PROCESS Presented by Michael Tarello, MAI, ASA Vision Appraisal Technology & James McCathern, CEO Patriot Properties May 21, 2008

2. INCOME AND EXPENSE PROCEDURES Income and Expense Management Income and Expense Management Data Entry of Income and Expense Forms Data Entry of Income and Expense Forms Analysis of Actual Income, Expenses, Vacancies and Capitalization Rates Analysis of Actual Income, Expenses, Vacancies and Capitalization Rates Develop Market Rates Develop Market Rates Reconciliation Process Reconciliation Process

3. INCOME AND EXPENSE MANAGEMENT Mail Forms Out by First of February Mail Forms Out by First of February Types of Forms Types of Forms DOR Suggested Forms DOR Suggested Forms Vendor Form Vendor Form Town Created Forms Town Created Forms General Form, Specialized Form or a Combination of Both General Form, Specialized Form or a Combination of Both Use Forms that meets Towns Requirements and Gives the best fit to the CAMA product being Utilized Use Forms that meets Towns Requirements and Gives the best fit to the CAMA product being Utilized

4. INCOME AND EXPENSE MANAGEMENT When do you Have Enough Supporting Data When do you Have Enough Supporting Data Second Mailer to Specific Properties Second Mailer to Specific Properties Gather I/E Info from Neighboring Towns Gather I/E Info from Neighboring Towns Specialized Properties Specialized Properties Nursing Home Forms, Hotel/Motel Financials, Cell Tower Leases, Mobile Home Park Rents Nursing Home Forms, Hotel/Motel Financials, Cell Tower Leases, Mobile Home Park Rents

5. DATA ENTRY OF I & E FORMS Sort Through Usable and Owner Occupied Sort Through Usable and Owner Occupied Organize by Property Type Organize by Property Type Same Thought Process Same Thought Process Do’s and Don’ts Do’s and Don’ts Determine Type of Lease Determine Type of Lease Expense Ratios Expense Ratios

6. ANALYSIS OF ACTUAL INCOME Categorize Income & Expense Data by Use (Office, Retail etc…) Categorize Income & Expense Data by Use (Office, Retail etc…) New Leases To Old Leases or Step Ups New Leases To Old Leases or Step Ups Identify Outliers for Rental Rates, Expense Ratios and Vacancy Rates Identify Outliers for Rental Rates, Expense Ratios and Vacancy Rates Determine Location and Utility Adjustments for each Properties Rental Rate Determine Location and Utility Adjustments for each Properties Rental Rate

7. SET MARKET RATES Using Actual Income and Expense Data to Set Standard Rates Per Use Using Actual Income and Expense Data to Set Standard Rates Per Use Creating Rental Parameters Based on Size or a Set Unit Creating Rental Parameters Based on Size or a Set Unit Determining Adjustments from the Market for Various Elements that Effect Value Determining Adjustments from the Market for Various Elements that Effect Value These Elements are Location, Utility, Quality of Expense Ratios, Vacancy Rates and Risk Factors of Cap Rates These Elements are Location, Utility, Quality of Expense Ratios, Vacancy Rates and Risk Factors of Cap Rates Sample Reports, Actual Data and Market Rent Schedules Sample Reports, Actual Data and Market Rent Schedules

8. RECONCILIATION PROCESS Create an Income/Cost Report by Use Create an Income/Cost Report by Use Reconcile the Properties by Use to Ensure Equitable Values Per Unit of Comparison, based on Location and Utility Reconcile the Properties by Use to Ensure Equitable Values Per Unit of Comparison, based on Location and Utility Once Complete, Review Values Looking for Outliers Once Complete, Review Values Looking for Outliers Rely on the Old to New Report and the Value per SF Spread Sheet Sorted by Use Rely on the Old to New Report and the Value per SF Spread Sheet Sorted by Use