SCENARIO

Sample Lease Buy Analysis

Lease vs. Buy is designed for a user/occupier to compare the costs of ownership with the costs of leasing. In either event, at the end of the analysis term, if leasing you would assume you will move, so if buying, you need to also assume you will move and sell the property. In this example two different properties are being compared, one that is available for lease and one that can be purchased. The Mgmt Summary and Key Assumptions reports show the comparison and the differences. Financing for the Purchased property includes a Balloon Loan with the payment amortized over 30 years and the balloon payment due after 5 years. Typically in a lease vs. buy analysis, the key decision metric is when it becomes cheaper to Buy than Lease based on Cash Flow, either before or after taxes. (See graphs G - 1 and G 2). When the cumulative cost of Leasing exceeds the cumulative cost of Buying (called the crossover), then buying becomes the preferred route. Historically, the crossover (when buying becomes cheaper than leasing) occurs in years 6 through 8. Note: the crossover is dependent upon the rent, the purchase price and financing. From an Income Statement perspective, i.e. the annual tax impact that is reported to the IRS, purchasing is almost always cheaper than leasing because in leasing the rental cost is higher than the depreciation cost associated with purchasing (depreciation on the building is usually spread over 39 years). (See graphs G - 3 and G - 4).

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All Brokers Commercial Real Estate Services 3926 E Pima Tucson, Arizona 85712 520-770-9221 [email protected]

Sample Lease Vs. Buy Analysis

All Brokers Commercial Real Estate Services

Management Summary of Key Costs

MANAGEMENT SUMMARY - LEASE vs. BUY ANALYSIS Client: Leased Property: Purchased Property:

ABC Co. 253 Green Steet 48 Aubrey Way Compare different properties. Optional - include pictures

Leased Property 253 Green Steet

Comparison of Key Variables Analysis Period (in Months) Square Footage Purchase Price (including Construction Costs) Loans @85.0% (Less Fees) Net Down Payment (Purchase Cost - Loans less fees) Average Base Rent (or loan pmt.)/Month Average Base Rent (or loan pmt.)/Sq.Ft./Year

120 50,000

120 48,500

$77,651 $18.64

$8,287,438 $6,734,734 $1,552,703 $41,356 $10.23

$170.88/sf $138.86/sf $32.01/sf $0.85/sf

$9,873,245 $4,806,510 $5,066,736

$203.57/sf $99.10/sf $104.47/sf

$5,066,736 ($503,536) ($1,552,703) $3,010,497

$104.47/sf ($10.38)/sf ($32.01)/sf $62.07/sf

$1.55/sf

0 1,500 ( 100.0% ) ( 81.3% ) ( 18.7% ) $36,295 $8.40

Sale Analysis Sale Price (before selling costs) * Unamortized Principal Equity Before Sale Equity Before Sale Less Selling Expenses Less Down Payment Cash Gain (Loss) before Taxes

Compares the Cost

* Land and Building assumed to increase in value annually by 2.0% and 2.0% respectively.

Cash after sale and paying off loans.

PreTax - Tax Deductible Cost Comparison Year 1 Total Cost NPV @8% Average Annual Cost

$1,213,750 $14,383,516 $9,885,516 $1,438,352

Cash Flow - Annual Cost Comparison Leased Property PreTax AfterTax Cash Flow Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

$1,099,364 $8,007,248 $6,221,086 $800,725 Compares Cash Flow - Before & After Tax, and the Difference! Purchased Property PreTax AfterTax PreTax Cash Flow Cash Flow Cash Flow

$1,663,750 $1,196,625 $1,303,372 $1,340,333 $1,378,349 $1,417,450 $1,457,668 $1,499,035 $1,541,584 $1,585,350

$1,238,938 $760,306 $829,692 $853,716 $878,427 $903,842 $929,984 $956,873 $984,530 $1,012,977

$2,551,565 $1,010,197 $1,021,830 $1,033,769 $2,190,040 $926,114 $939,018 $952,261 $965,852 ($3,583,399)

$2,166,788 $623,360 $632,972 $642,938 $1,797,293 $573,814 $584,255 $595,055 $606,228 ($3,398,755)

NPV @8% Avg./Year

$19.77 $28.77

$12.96 $18.70

$14.67 $16.51

$9.83 $9.95

Year 1 Total Cost NPV @8% Avg./Year

$1,663,750 $14,383,516 $9,885,516 $1,438,352

$1,238,938 $9,349,285 $6,479,586 $934,929

$2,551,565 $8,007,248 $7,116,089 $800,725

$2,166,788 $4,823,948 $4,766,022 $482,395

First Year of Purchase Crossover

($887,815) $186,428 $281,542 $306,564 ($811,691) $491,336 $518,650 $546,774 $575,732 $5,168,748

$114,386 $6,376,268 $3,664,431 $637,627

Difference (Lease - Purchase) Cumulative AfterTax Cash Flow ($887,815) ($701,388) ($419,846) ($113,282) ($924,973) ($433,637) $85,013 $631,787 $1,207,520 $6,376,268

$5.10 $12.26

($927,850) $136,946 $196,720 $210,779 ($918,867) $330,029 $345,729 $361,818 $378,302 $4,411,732

Cumulative ($927,850) ($790,904) ($594,184) ($383,405) ($1,302,272) ($972,243) ($626,514) ($264,696) $113,606 $4,525,338

$3.13 $8.75

($887,815) $6,376,268 $2,769,428 $637,627

($927,850) $4,525,338 $1,713,564 $452,534 Yr. 7

Yr. 9

(When the cumulative Purchase cost is less than the cumulative Lease cost.)

when Purchasing (the FUTURE sale price of the property where leasing and buying are equalCrossover based on equal AfterTax NPV's.) Sale Price Point of Indifference cheaper than Property Sale Price - Point of Indifference Assumptions: Loan 1 atbecomes 70.0% of Purchase CostLeasing $4,985,604 Requires Building Annual % Increase at -8.02% Land % @2.00% Loan 2 at 15.0% of Purchase Cost Conclusion: Buy property if you can sell it for more than amount above in 9/2015. Opportunity Cost at 5.00% Notes:

User defined - unlimited rows for notes/comments

Sale Price Point of Indifference

The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Page 4 of 19

Key Assumptions

KEY LEASE and PURCHASE ASSUMPTIONS Client: Leased Property: Purchased Property:

ABC Co. 253 Green Steet 48 Aubrey Way

Page A2 12Feb05 Revision 1.0 Lease Assumptions

KEY LEASE ASSUMPTIONS FINANCIAL ASSUMPTIONS Type of Business Entity (Beginning of Mo. Calc.) NPV Discount Rate Ordinary Income Tax Rate Capital Gains Tax Rate Recapture 1250 Depreciation Tax Rate RENT ASSUMPTIONS Commencement Date Termination Date Lease Term Rentable SF Base Rental Rate Type of Lease Months of Rent Abatement Landlord Construction Allowance ANNUAL % RENT INCREASES Increase @3% starting 10/06 based on FIXED AMOUNT RENT INCREASES Fixed Increase #1 Fixed Increase #2 Fixed Increase #3 Fixed Increase #4 Fixed Increase #5 Fixed Increase #6 Fixed Increase #7 Fixed Increase #8 Fixed Increase #9 Fixed Increase #10 OPERATING EXPENSES & TAXES Actual Op. Exp. & Taxes Base Year Op. Exp. & Taxes Annual % Increase Pass through costs start CONSTRUCTION COSTS Interior Fit-up Contingency % Landlord Construction Allowance Net Cost to the Tenant

KEY SALE ASSUMPTIONS SALE ASSUMPTIONS Land - compounded annually @2.00% Building* - compounded annually @2.00% Total Sale Price * Building with Construction Costs

Sale Assumptions SELLING EXPENSES Commissions @5.1% of sale price Spruce-up Other Contingency Total Selling Expenses

KEY PURCHASE ASSUMPTIONS

Purchase Assumptions

TERM FOR ANALYSIS Start Date Date Property Sold Holding Period

LLC 8.0% 35.0% 15.0% 25.0%

10 / 2005 9 / 2015 120 months

PROPERTY COST Land Description Building

10 / 2005 9 / 2015 120 months 50,000 $16.50 $/rsf/yr NNN 2 $10.00 $/rsf

1 lot 48,500 rsf $/rsf

Land Purchase Cost Building Purchase Cost Total Property Cost

$38.75 $116.25 $155.00

$1,879,375 $5,638,125 $7,517,500

25.0% 75.0% 100.0%

BUILDING COST with CONSTRUCTION Building Purchase Cost $116.25 Const. Improvements $12.00 Total Building Cost $128.25

$5,638,125 $582,000 $6,220,125

90.6% 9.4% 100.0%

$16.50

Costs can be in any currency - $, £, €, ¥, ect. Measurement can be in square feet or square meters.

OTHER PURCHASING COSTS Closing costs @2.5% of Purchase Cost * Legal Fees Other Contingency Total

Expense

Capital

$187,938

0% $187,938

* Purchase Cost (Land and Building, not Const. Costs)

TOTAL PURCHASE COST

Total Purchase Cost *

$170.88

$8,287,438

* Without Loan Fees, includes all Other Purchasing Costs & Construction

FINANCING First Loan from 10 / 2005 to 9 / 2035 $8.00 $/rsf/yr Loan Amount Loan % of Land, Bldg., Const. Cost (eff. 1/2006) Monthly Payment (360 month term) 2.5% Include Balloon 10/2005 Loan Fees @2.00% loans & payments Net Proceeds from Loan 50,000 rsf Unamortized Principal (due 9 / 2015) $20.00 $/rsf 0% Second Loan from 10 / 2005 to 9 / 2010 $10.00 $/rsf Loan Amount $500,000 Loan % of Land, Bldg., Const. Cost Monthly Payment (300 month term) Loan Fees @3.00% Net Proceeds from Loan $47.24 $2,290,948 Balloon Payment (due 9 / 2010) $156.34 $7,582,298 $203.57 $9,873,245 OPPORTUNITY COST Lost Interest Income based on

@ 6.5% $5,669,650 70.0% $35,836 (30 yrs.) $113,393 $5,556,257 $4,806,510 @ 10% $1,214,925 15.0% $11,040 (25 yrs.) $36,448 $1,178,477 $1,144,019

$1,052,703

Invested @5% from 10/2005 - 9/2015; AfterTax Interest compounded monthly.

$503,536

0% $503,536

OPERATING EXPENSES AND TAXES Operating Expenses & Taxes Annual % Increase Optional - Include Opportunity Cost in DATE PROPOSAL your analysis Analysis prepared by All Brokers Inc.

$7.75 $/rsf/yr 2.5% (eff. 1/2006) 5Feb05

The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

All Brokers Commercial Real Estate Services 520-770-9221

Sample Lease vs. Buy Analysis

Page 4 of 19

Sale Analysis for Taxes

SALE ANALYSIS Client: Purchased Property:

Page A3 12Feb05 Revision 1.0

ABC Co. 48 Aubrey Way

Sale Price Land Building Less Selling Costs (A) Net Selling Price

$2,290,948 $7,582,298 -$503,536

Purchase Price Land Building Construction Costs Other Costs - Capital (B) Total Cost of Purchase

$1,879,375 $5,638,125 $582,000 $187,938

Depreciation Booked Building Purchase Cost * Construction Costs * Other Costs - Capitalized * (C) Total Depreciation Adjustments

$1,445,673 $149,231 $48,189

(D) Adjusted Cost Basis

$9,369,710

$6,644,345

$6,644,345

$8,287,438

$1,643,093

(B - C)

* Depreciation Portion of Capital Gain Building Recapture Cost Recovery [Recapture IRS Section 1250 Depreciation] Building Purchase Cost Construction Costs Other Costs - Capitalized (E) Total subject to Recapture Loan Fees First Loan - Fees, Initial Cost Second Loan - Fees, Initial Cost

$9,369,710

$1,445,673 $149,231 $48,189 $1,643,093

$113,393 $36,448 $149,841

First Loan - Amount of Fees Amortized Second Loan - Amt. of Fees Amortized

$37,798 $36,448 $74,245

(F)

(G) (H) (I) (J) (K) (L)

Net Write-Off of Loan Fees (taxed at Regular Tax Rate)

$75,595

Capital Gain (A - D) Taxable Capital Gain at the Capital Gains Tax Rate (A - D - E) Capital Gains Tax @ 15% (H x % x -1) Recapture Section IRS 1250 Depreciation Tax @ 25% (E x % x -1) Net Write-Off of Loan Fees @35% (F x %) After Tax Profit (Loss) (G + I + J + K)

Includes Cost Recovery / Recapture 1250 Depreciation for LLC's and Sole Proprietorships

$2,725,365 $1,082,272 -$162,341 -$410,773 $26,458

-$162,341 -$410,773 $26,458 $2,178,710

Sale Analysis on a Tax Basis used for computing the Tax Impact after Selling the property

The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

Sample Lease Vs. Buy Analysis

All Brokers 520-770-9221

Page 5 of 19

Financial Summary & Comparison of Key Costs

FINANCIAL SUMMARY Client: Leased Property: Purchased Property:

ABC Co. 253 Green Steet 48 Aubrey Way

Page 1 12Feb05 Revision 1.0

Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

Year Dates

10/05-9/06

10/06-9/07

10/07-9/08

10/08-9/09

10/09-9/10

10/10-9/11

10/11-9/12

10/12-9/13

10/13-9/14

10/14-9/15

Months Each Year

12 12 Lease Analysis: Cost Cash Flow PreTax NPV 756,250 778,938 AfterTax NPV 50,000 50,000 407,500 417,688 1,213,750 1,246,625

12

12

12

12

12

12

12

12

Year

(analysis starts 10 / 2005)

LEASE ANALYSIS COST (Tax deductible expenses only) Rent Depreciation All Other Costs Total PreTax Cost

Taxes @ 35% 424,813 AfterTaxes 788,938 Before Tax NPV @ 8% After Tax Net Present Value Discounted @ 8% CASH FLOW PreTax Cost Depreciation Capital

1,213,750 (50,000) 500,000

CASH FLOW PreTax Cost w/o Sale Depreciation Purchase Costs - Capital & TI$ Sale Price Selling Expenses Loan(s) (less fees) Principal Reduction on Loan(s)

1,099,364 (175,379) 8,287,438

(6,734,734) 74,877

120

Can be extended for a 30 year analysis. 875,243 50,000 428,130 1,353,372

901,500 50,000 438,833 1,390,333

928,545 50,000 449,804 1,428,349

956,401 50,000 461,049 1,467,450

985,093 50,000 472,575 1,507,668

1,014,646 50,000 484,389 1,549,035

1,045,085 50,000 496,499 1,591,584

1,076,438 50,000 508,912 1,635,350

9,318,138 500,000 4,565,378 14,383,516

436,319 810,306

473,680 879,692

486,616 903,716

499,922 928,427

513,607 953,842

527,684 979,984

542,162 1,006,873

557,055 1,034,530

572,372 1,062,977

5,034,231 9,349,285 9,731,229 6,325,299

1,246,625 (50,000)

1,353,372 (50,000)

1,390,333 (50,000)

1,428,349 (50,000)

1,467,450 (50,000)

1,507,668 (50,000)

1,549,035 (50,000)

1,591,584 (50,000)

1,635,350 (50,000)

14,383,516 (500,000) 500,000

1,378,349 878,427

1,417,450 903,842

1,457,668 929,984

1,499,035 956,873

1,541,584 984,530

1,585,350 1,012,977

14,383,516 9,349,285 9,885,516 6,479,586

463,247 175,379 60,833 422,675 1,122,133

342,402 168,089 62,840 433,242 1,006,572

336,533 168,089 64,912 444,073 1,013,607

330,271 168,089 67,054 455,175 1,020,589

323,590 168,089 69,266 466,554 1,027,499

1,122,133

1,006,572

1,013,607

1,020,589

1,027,499

316,461 168,089 71,551 478,218 1,034,319 (1,082,272) (1,643,093) 75,595 (1,615,451)

4,028,681 1,717,338 620,970 4,290,029 10,657,018 (1,082,272) (1,643,093) 75,595 8,007,248 (3,729,956) 162,341 410,773 (26,458) 4,823,948 6,221,086 3,871,019

10,657,018 (1,717,338) 8,287,438 (9,873,245) 503,536 (784,205) 934,046

PreTax Cash Flow 1,663,750 1,196,625 1,303,372 1,340,333 AfterTax Cash Flow 1,238,938 760,306 829,692 853,716 Cash Flow -- Before Tax NPV @ 8% Purchase Analysis: Cash Flow -- AfterTax Net Present Value Discounted @ 8% Cost Cash Flow PreTax NPV PURCHASE ANALYSIS AfterTax NPV COST (Tax deductible expenses only) Interest Expense 487,636 482,187 476,328 470,026 Depreciation/Amortization 175,379 175,379 175,379 175,379 Opportunity Cost 53,426 55,189 57,009 58,890 All Other Costs 382,923 392,496 402,308 412,366 PreTax Cost without Sale 1,099,364 1,105,250 1,111,024 1,116,660 PreTax Capital (Gain)/Loss on Sale PreTax Deprec. Recapture 1250 Net Write-Off of Loan Fees Total PreTax Cost 1,099,364 1,105,250 1,111,024 1,116,660 Tax (w/o Sale) @ 35% (384,777) Capital Gains Tax on Sale @ 15% Depreciation Recapture Tax @ 25% Loan Fee Write-Off Taxed @ 35% AfterTaxes 714,586 Before Tax NPV @ 8% After Tax Net Present Value Discounted @ 8%

Total

(386,838)

(388,858)

(390,831)

(392,746)

(352,300)

(354,763)

(357,206)

(359,625)

718,413

722,166

725,829

729,386

654,272

658,845

663,383

667,874

(362,012) 162,341 410,773 (26,458) (1,430,807)

1,122,133 (175,379)

1,006,572 (168,089)

1,013,607 (168,089)

1,020,589 (168,089)

1,027,499 (168,089)

1,034,319 (168,089)

SUMMARY - Cash Flow associated with the Purchase and Sale of the property. 1,105,250 (175,379)

80,326

PreTax Cash Flow 2,551,565 1,010,197 AfterTax Cash Flow 2,166,788 623,360 Cash Flow -- Before Tax NPV @ 8% Cash Flow -- After Tax Net Present Value Discounted @ 8%

COMPARISON - Lease vs. Buy

1,111,024 (175,379)

86,185

1,116,660 (175,379)

92,487

1,144,019 99,266

1,021,830 1,033,769 2,190,040 632,972 642,938 1,797,293 Comparison (Annual & Cumulative differences): Cost PreTax Cash Flow AfterTax Cash Flow

93,499

99,761

106,443

926,114 573,814

939,018 584,255

952,261 595,055

965,852 606,228

(3,583,399) (3,398,755)

8,007,248 4,823,948 7,116,089 4,766,022

1,467,450 1,006,572 460,878 1,538,875

Lease - PreTax Cost Purchase - PreTax Cost Difference Cumulative Difference

1,213,750 1,099,364 114,386 114,386

1,246,625 1,105,250 141,375 255,761

1,353,372 1,111,024 242,348 498,109

1,390,333 1,116,660 273,672 771,782

1,507,668 1,013,607 494,061 2,032,936

1,549,035 1,020,589 528,447 2,561,382

1,591,584 1,027,499 564,085 3,125,468

1,635,350 (1,615,451) 3,250,800 6,376,268

14,383,516 8,007,248 6,376,268

Lease - PreTax Cash Flow Purchase - PreTax Cash Flow Difference Cumulative Difference

1,663,750 2,551,565 (887,815) (887,815)

1,196,625 1,010,197 186,428 (701,388)

1,303,372 1,021,830 281,542 (419,846)

1,340,333 1,378,349 1,417,450 1,457,668 1,033,769 2,190,040 926,114 939,018 306,564 (811,691) 491,336 518,650 (113,282) (924,973) (433,637) 85,013 Compares costs on a per square foot basis.

1,499,035 952,261 546,774 631,787

1,541,584 965,852 575,732 1,207,520

1,585,350 (3,583,399) 5,168,748 6,376,268

14,383,516 8,007,248 6,376,268

PreTax Cash Flow/sf - Leasing 50,000 sf; Purchasing 48,500 sf Lease PreTax Cash Flow/sf/yr $33.28 $23.93 Purchase PreTax Cash Flow/sf/yr $52.61 $20.83 Difference ($17.76) $3.73 Cumulative Difference ($17.76) ($14.03)

$26.07 $21.07 $5.63 ($8.40)

$29.15 $19.36 $10.37 $1.70

$29.98 $19.63 $10.94 $12.64

$30.83 $19.91 $11.51 $24.15

$31.71 ($73.88) $103.37 $127.53

$28.77 $16.51 $12.75

929,984 584,255 345,729 (626,514)

956,873 595,055 361,818 (264,696)

984,530 606,228 378,302 113,606

1,012,977 (3,398,755) 4,411,732 4,525,338

9,349,285 4,823,948 4,525,338

Lease - AfterTax Cash Flow Purchase - AfterTax Cash Flow Difference Cumulative Difference

1,238,938 2,166,788 (927,850) (927,850)

760,306 623,360 136,946 (790,904)

829,692 632,972 196,720 (594,184)

$26.81 $21.31 $6.13 ($2.27)

1,428,349 1,122,133 306,216 1,077,997

87,631

(9,873,245) 503,536 4,806,510 113,571

$27.57 $45.16 ($16.23) ($18.50)

$28.35 $19.10 $9.83 ($8.67)

853,716 878,427 642,938 1,797,293 210,779 (918,867) (383,405) (1,302,272)

903,842 573,814 330,029 (972,243)

NPV calculated starting 10 / 2005 (beginning of mo. payment) The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Page 6 of 19

Compares PreTax Cash Flow (a back-up report)

PRE TAX CASH FLOW Client: Leased Property: Purchased Property:

ABC Co. 253 Green Steet 48 Aubrey Way

Page B 12Feb05 Revision 1.0

Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

10/05-9/06

10/06-9/07

10/07-9/08

10/08-9/09

10/09-9/10

10/10-9/11

10/11-9/12

10/12-9/13

10/13-9/14

10/14-9/15

12

12

12

12

12

12

12

12

12

12

120

Base Rent Rent Abatement % Increase Total

825,000 (68,750)

825,000

825,000

825,000

825,000

825,000

825,000

825,000

825,000

756,250

825,000 (70,813) 24,750 778,938

50,243 875,243

76,500 901,500

103,545 928,545

131,401 956,401

160,093 985,093

189,646 1,014,646

220,085 1,045,085

251,438 1,076,438

8,250,000 (139,563) 1,207,700 9,318,138

Operating Expenses / Taxes

407,500

417,688

428,130

438,833

449,804

461,049

472,575

484,389

496,499

508,912

Construction Cost

500,000

(analysis starts 10 / 2005) Year Year Dates Months Each Year

Total

LEASE ANALYSIS 50,000 square feet

Total PreTax Cash Flow Cost / Sq.Ft. / Year Cash Flow - Before Tax NPV @ 8%

1,663,750 $33.28

4,565,378 500,000

1,196,625 $23.93

1,303,372 $26.07

1,340,333 $26.81

1,378,349 $27.57

1,417,450 $28.35

1,457,668 $29.15

1,499,035 $29.98

1,541,584 $30.83

1,585,350 $31.71

14,383,516 $28.77 9,885,516

PURCHASE ANALYSIS 48,500 square feet Land - Purchase Building - Purchase Purchase - Other Capital Total

1,879,375 5,638,125 187,938 7,705,438

0

0

0

0

0

0

0

0

0

1,879,375 5,638,125 187,938 7,705,438

Operating Expenses / Taxes Opportunity Cost Total

382,923 53,426 436,349

392,496 55,189 447,685

402,308 57,009 459,317

412,366 58,890 471,256

422,675 60,833 483,508

433,242 62,840 496,081

444,073 64,912 508,985

455,175 67,054 522,229

466,554 69,266 535,820

478,218 71,551 549,769

4,290,029 620,970 4,910,999

Interest Expense - 1st Loan Interest Expense - 2nd Loan Total

366,661 120,975 487,636

362,417 119,770 482,187

357,889 118,439 476,328

353,057 116,969 470,026

347,902 115,344 463,247

342,402

336,533

330,271

323,590

316,461

342,402

336,533

330,271

323,590

316,461

3,437,185 591,496 4,028,681

67,615

72,144

76,975

87,631

93,499

99,761

106,443

4,806,510 113,571

12,711 80,326

14,042 86,185

15,512 92,487

82,130 1,144,019 17,136 1,243,286

87,631

93,499

99,761

106,443

4,920,081

0

0

0

0

0

0

0

0

0

(9,873,245) 503,536 (9,369,710)

(9,873,245) 503,536 (9,369,710)

1,969,565 $39.39

1,010,197 $20.20

1,021,830 $20.44

1,033,769 $20.68

2,190,040 $43.80

926,114 $18.52

939,018 $18.78

952,261 $19.05

965,852 $19.32

(3,583,399) ($71.67)

7,425,248 $14.85 7,116,089

First Loan, less fees First Loan - Principle Payment Second Loan, less fees Second Loan - Principle Payment Total

(5,556,257) 63,371 (1,178,477) 11,506 (6,659,857)

Cash From Sale Selling Expenses Total Total Cash Flow Cost / Sq.Ft. / Year Cash Flow - Before Tax NPV @ 8%

(749,747) 863,140 (34,458) 70,906 149,841

Shows the difference for Lease vs. Buy on a PreTax Cash Flow basis

COMPARISON: Lease - Buy Cost / Sq.Ft. Lease - PreTax Cash Flow Purchase - PreTax Cash Flow Difference Cumulative Difference

($6.12) 1,663,750 1,969,565 (305,815) (305,815)

$3.73

$5.63

$6.13

1,196,625 1,010,197

1,303,372 1,021,830

1,340,333 1,033,769

281,542 162,154

306,564 468,718

186,428 (119,388)

($16.23) 1,378,349 2,190,040 (811,691) (342,973)

$9.83

$10.37

$10.94

$11.51

1,417,450 926,114

1,457,668 939,018

1,499,035 952,261

1,541,584 965,852

1,585,350 (3,583,399)

$103.37

14,383,516 7,425,248

$13.92

491,336 148,363

518,650 667,013

546,774 1,213,787

575,732 1,789,520

5,168,748 6,958,268

6,958,268

NPV calculated starting 10 / 2005 (beginning of mo. payment) The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Page 7 of 19

Compares PreTax Cash Flow (a back-up report)

LEASE vs. BUY ANALYSIS Client: Leased Property: Purchased Property:

ABC Co. 253 Green Steet 48 Aubrey Way

(analysis starts 10 / 2005) Year Year Dates Months Each Year

Worksheet 12Feb05 Revision 1.0

Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

10/05-9/06

10/06-9/07

10/07-9/08

10/08-9/09

10/09-9/10

10/10-9/11

10/11-9/12

10/12-9/13

10/13-9/14

10/14-9/15

Total

12

12

12

12

12

12

12

12

12

12

120

Annual Total Cumulative Total Present Value @ 8%

1,213,750 1,213,750 1,123,843

1,246,625 2,460,375 1,068,780

1,353,372 3,813,747 1,074,350

1,390,333 5,204,080 1,021,936

1,428,349 6,632,428 972,110

1,467,450 8,099,878 924,742

1,507,668 9,607,547 879,710

1,549,035 11,156,582 836,896

1,591,584 12,748,166 796,189

1,635,350 14,383,516 757,483

14,383,516

Purchase

Annual Total Cumulative Total Present Value @ 8%

1,099,364 1,099,364 1,017,929

1,105,250 2,204,614 947,574

1,111,024 3,315,638 881,967

1,116,660 4,432,298 820,779

1,122,133 5,554,431 763,705

1,006,572 6,561,003 634,311

1,013,607 7,574,611 591,430

1,020,589 8,595,200 551,392

1,027,499 9,622,699 514,005

(1,615,451) 8,007,248 (748,266)

8,007,248

Difference

Annual Total Cumulative Total Present Value @ 8%

114,386 114,386 105,913

141,375 255,761 121,206

242,348 498,109 192,384

273,672 771,782 201,157

306,216 1,077,997 208,405

460,878 1,538,875 290,431

494,061 2,032,936 288,280

528,447 2,561,382 285,503

564,085 3,125,468 282,183

3,250,800 6,376,268 1,505,750

6,376,268

Annual Total Cumulative Total

788,938 788,938

810,306 1,599,244

879,692 2,478,936

903,716 3,382,652

928,427 4,311,078

953,842 5,264,921

979,984 6,244,905

1,006,873 7,251,778

1,034,530 8,286,308

1,062,977 9,349,285

9,349,285

Purchase

Annual Total Cumulative Total

714,586 714,586

718,413 1,432,999

722,166 2,155,165

725,829 2,880,994

729,386 3,610,380

654,272 4,264,652

658,845 4,923,497

663,383 5,586,880

667,874 6,254,754

(1,430,807) 4,823,948

4,823,948

Difference

Annual Total Cumulative Total

74,351 74,351

91,894 166,245

157,526 323,771

177,887 501,658

199,040 700,698

299,571 1,000,269

321,139 1,321,408

343,490 1,664,898

366,656 2,031,554

2,493,784 4,525,338

4,525,338

Annual Total Cumulative Total

1,663,750 1,663,750

1,196,625 2,860,375

1,303,372 4,163,747

1,340,333 5,504,080

1,378,349 6,882,428

1,417,450 8,299,878

1,457,668 9,757,547

1,499,035 11,256,582

1,541,584 12,798,166

1,585,350 14,383,516

14,383,516

Purchase

Annual Total Cumulative Total

2,551,565 2,551,565

1,010,197 3,561,763

1,021,830 4,583,593

1,033,769 5,617,362

2,190,040 7,807,402

926,114 8,733,515

939,018 9,672,533

952,261 10,624,794

965,852 11,590,647

(3,583,399) 8,007,248

8,007,248

Difference

Annual Total Cumulative Total

518,650 85,013

546,774 631,787

575,732 1,207,520

5,168,748 6,376,268

6,376,268

COST PreTax Lease

AfterTax Lease

9,456,039

5,974,826

3,481,212

CASH FLOW ANALYSIS PreTax Lease

AfterTax Lease

(887,815) (887,815)

186,428 (701,388)

281,542 (419,846)

306,564 (113,282)

(811,691) (924,973)

491,336 (433,637)

Annual Total Cumulative Total Present Value @ 8%

1,238,938 1,238,938 1,147,164

760,306 1,999,244 651,840

829,692 2,828,936 658,636

853,716 3,682,652 627,507

878,427 4,561,078 597,842

903,842 5,464,921 569,574

929,984 6,394,905 542,637

956,873 7,351,778 516,969

984,530 8,336,308 492,510

1,012,977 9,349,285 469,204

Purchase

Annual Total Cumulative Total Present Value @ 8%

2,166,788 2,166,788 2,006,285

623,360 2,790,148 534,431

632,972 3,423,120 502,474

642,938 4,066,057 472,578

1,797,293 5,863,351 1,223,208

573,814 6,437,164 361,600

584,255 7,021,420 340,907

595,055 7,616,475 321,490

606,228 8,222,702 303,265

(3,398,755) 4,823,948 (1,574,281)

4,823,948

Difference

Annual Total Cumulative Total Present Value @ 8%

4,411,732 4,525,338 2,043,486

4,525,338

(927,850) (927,850) (859,121)

136,946 (790,904) 117,409

196,720 (594,184) 156,163

210,779 (383,405) 154,929

(918,867) (1,302,272) (625,365)

330,029 (972,243) 207,974

345,729 (626,514) 201,730

361,818 (264,696) 195,479

378,302 113,606 189,245

9,349,285 6,273,884

4,491,956

1,781,928

Present value calculated using annual totals

Shows the difference for Lease vs. Buy on Used for the graphs - The Management Summary uses costs from each individual analysis. a PreTax Cash Flow basis The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Page 8 of 19

Lease vs. Buy - PreTax Cash Flow Comparison of the Annual and Cumulative Cost 16000000 14000000 12000000 10000000

PreTax Cash Flow - Graph shows Cumulative and Annual Costs. When lines cross, cost of Purchasing is cheaper than cost of Leasing

8000000 6000000 4000000 2000000 0 Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

-2000000 -4000000 -6000000

Intersection is when the cumulative total cost of Purchasing is cheaper than Leasing.

Lease - Annual Cost Purchase - Annual Cost Lease - Cumulative Annual Cost Purchase - Cumulative Annual Cost

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Page 9 of 19

Lease vs. Buy - AfterTax Cash Flow Comparison of the Annual and Cumulative Cost 10000000

8000000

6000000

AfterTax Cash Flow - Graph shows Cumulative and Annual Costs. When lines cross, cost of Purchasing is cheaper than cost of Leasing on an AfterTax Cash Flow basis.

4000000

2000000

0 Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

-2000000

-4000000

-6000000

Lease - Annual Cost Intersection is when the cumulative total cost of Purchasing is cheaper than Leasing.

Purchase - Annual Cost Lease - Cumulative Annual Cost Purchase - Cumulative Annual Cost

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Page 10 of 19

Lease vs. Buy - PreTax Tax Deductible Costs Comparison of the Annual and Cumulative Cost 16000000

14000000

12000000

10000000

Compares the costs that are tax deductible. Purchasing is typically cheaper since the primary cost is depreciation vs. rent

8000000

6000000

4000000

2000000

0 Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

-2000000

-4000000

Lease - Annual Cost Purchase - Annual Cost Lease - Cumulative Annual Cost Purchase - Cumulative Annual Cost

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Page 11 of 19

Lease vs. Buy - AfterTax Tax Deductible Costs Comparison of the Annual and Cumulative Cost 10000000

8000000

6000000

Compares AFTER TAXES the costs that are tax deductible. Purchasing is typically cheaper since the primary cost is depreciation vs. rent

4000000

2000000

0 Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

-2000000

Lease - Annual Cost Purchase - Annual Cost Lease - Cumulative Annual Cost Purchase - Cumulative Annual Cost

Sample Lease vs. Buy Analysis

All Brokers Commercial Real Estae Services 520-770-9221

Page 12 of 19

Lease vs. Buy - PreTax Tax Deductible Costs Comparison of the Present Value of the Annual Cost Compares the Present Value before taxes

1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

-200,000 -400,000 -600,000 -800,000

Lease

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Purchase

Page 13 of 19

Lease vs. Buy - AfterTax Cash Flow Comparison of the Present Value of the Annual Cost 2,500,000

2,000,000

Compares the Present Value after taxes

1,500,000

1,000,000

500,000

0 Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

-500,000

-1,000,000

-1,500,000

-2,000,000

Lease

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Purchase

Page 14 of 19

Detailed Lease Analysis (a back-up report)

LEASE ANALYSIS Client: Leased Property:

Page 1A 12Feb05 Revision 1.0

ABC Co. 253 Green Steet

(analysis starts 10 / 2005) Year Year Dates Months Leased Each Year Months of Free Rent

Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

10/05-9/06

10/06-9/07

10/07-9/08

10/08-9/09

10/09-9/10

10/10-9/11

10/11-9/12

10/12-9/13

10/13-9/14

10/14-9/15

12

12

12

12

12

12

12

12

12

12

1

1A Backup Report. Detailed listing of Costs and

Total 120 2

Cash Flow associated with Leasing that are summarized on the Financial Summary. COST (Tax Deductible Expenses Only) Base Rent Rent Abatement % Increase Total

825,000 -68,750

Operating Expenses / Taxes

825,000

825,000

825,000

825,000

825,000

825,000

825,000

825,000

756,250

825,000 -70,813 24,750 778,938

50,243 875,243

76,500 901,500

103,545 928,545

131,401 956,401

160,093 985,093

189,646 1,014,646

220,085 1,045,085

251,438 1,076,438

8,250,000 -139,563 1,207,700 9,318,138

407,500

417,688

428,130

438,833

449,804

461,049

472,575

484,389

496,499

508,912

4,565,378

50,000

50,000

50,000

50,000

50,000

50,000

50,000

50,000

50,000

50,000

500,000

1,213,750 424,813 788,938

1,246,625 436,319 810,306

1,353,372 473,680 879,692

1,390,333 486,616 903,716

1,428,349 499,922 928,427

1,467,450 513,607 953,842

1,507,668 527,684 979,984

1,549,035 542,162 1,006,873

1,591,584 557,055 1,034,530

1,635,350 572,372 1,062,977

13,383,516 5,034,231 9,349,285

Depreciation Total PreTax Cost Taxes @ 35% AfterTax Cost

Before Tax NPV @ 8% After Tax Net Present Value Discounted @ 8%

9,731,229 6,325,299

CASH FLOW Total PreTax Cost

1,213,750

1,246,625

1,353,372

1,390,333

1,428,349

1,467,450

1,507,668

1,549,035

1,591,584

1,635,350

13,383,516

Depreciation Construction Cost

-50,000

-50,000

-50,000

-50,000

-50,000

-50,000

-50,000

-50,000

-50,000

-50,000

-500,000

Capital Construction Cost

500,000

PreTax Cash Flow AfterTax Cash Flow

1,663,750 1,238,938

500,000 1,196,625 760,306

1,303,372 829,692

1,340,333 853,716

1,378,349 878,427

1,417,450 903,842

1,457,668 929,984

1,499,035 956,873

Cash Flow -- Before Tax NPV @ 8% Cash Flow -- After Tax Net Present Value Discounted @ 8%

1,541,584 984,530

1,585,350 1,012,977

14,383,516 9,349,285 9,885,516 6,479,586

NPV calculated starting 10 / 2005 (beginning of mo. payment)

The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

Sample Lease vs. Buy Anaylsis

All Brokers 520-770-9221

Page 15 of 19

Detailed Purchase Analysis (a back-up report)

PURCHASE ANALYSIS Client: Purchased Property:

Page 1B 12Feb05 Revision 1.0

ABC Co. 48 Aubrey Way

(analysis starts 10 / 2005) Year Year Dates Months Each Year

Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

10/05-9/06

10/06-9/07

10/07-9/08

10/08-9/09

10/09-9/10

10/10-9/11

10/11-9/12

10/12-9/13

10/13-9/14

10/14-9/15

Total

12

12

12

12

12

12

12

12

12

12

120

Operating Expenses / Taxes Opportunity Cost Total

382,923 53,426 436,349

392,496 55,189 447,685

402,308 57,009 459,317

412,366 58,890 471,256

422,675 60,833 483,508

433,242 62,840 496,081

444,073 64,912 508,985

455,175 67,054 522,229

466,554 69,266 535,820

478,218 71,551 549,769

4,290,029 620,970 4,910,999

Interest Expense - First Loan Interest Expense - Second Loan

366,661 120,975

362,417 119,770

357,889 118,439

353,057 116,969

347,902 115,344

342,402

336,533

330,271

323,590

316,461

3,437,185 591,496

Depreciation/Amortization

175,379

175,379

175,379

175,379

175,379

168,089

168,089

168,089

168,089

168,089

1,717,338

PreTax Cost without Sale PreTax Capital (Gain)/Loss on Sale PreTax Deprec. Recapture 1250 Net Write-Off of Loan Fees

1,099,364

1,105,250

1,111,024

1,116,660

1,122,133

1,006,572

1,013,607

1,020,589

1,027,499

1,034,319 -1,082,272 -1,643,093 75,595

10,657,018 -1,082,272 -1,643,093 75,595

PreTax Cost (total) Tax (w/o Sale) @ 35% Capital Gains Tax on Sale @ 15% Depreciation Recapture Tax @ 25% Loan Fee Write-Off Taxed @ 35% AfterTax Cost

1,099,364 -384,777

1,105,250 -386,838

1,111,024 -388,858

1,116,660 -390,831

1,122,133 -392,746

1,006,572 -352,300

1,013,607 -354,763

1,020,589 -357,206

1,027,499 -359,625

A Backup Report. Detailed listing of Costs and Cash Flow associated with Purchasing that are Financial Summary. 718,413 summarized 722,166 on the 725,829 729,386 654,272

658,845

663,383

667,874

-1,615,451 -362,012 162,341 410,773 -26,458 -1,430,807

8,007,248 -3,729,956 162,341 410,773 -26,458 4,823,948

COST (Tax Deductible Expenses Only)

714,586

Before Tax NPV @ 8% After Tax Net Present Value Discounted @ 8%

6,221,086 3,871,019

CASH FLOW PreTax Cost without Sale

1,099,364

1,105,250

1,111,024

1,116,660

1,122,133

1,006,572

1,013,607

1,020,589

1,027,499

1,034,319

10,657,018

1,879,375 5,638,125 582,000 187,938 8,287,438

Detailed listing of Financing

Capital Land - Purchase Building - Purchase Building - Const. Costs Purchase - Other Capital Total Capital

1,879,375 5,638,125 582,000 187,938 8,287,438

0

0

0

0

0

0

0

0

0

Depreciation / Amortization Building - Purchase Building - Const. Costs Purchase - Other Costs Fees - 1st Loan Fees - 2nd Loan Total

-144,567 -14,923 -4,819 -3,780 -7,290 -175,379

-144,567 -14,923 -4,819 -3,780 -7,290 -175,379

-144,567 -14,923 -4,819 -3,780 -7,290 -175,379

-144,567 -14,923 -4,819 -3,780 -7,290 -175,379

-144,567 -14,923 -4,819 -3,780 -7,290 -175,379

-144,567 -14,923 -4,819 -3,780

-144,567 -14,923 -4,819 -3,780

-144,567 -14,923 -4,819 -3,780

-144,567 -14,923 -4,819 -3,780

-144,567 -14,923 -4,819 -3,780

-168,089

-168,089

-168,089

-168,089

-168,089

67,615

72,144

76,975

87,631

93,499

99,761

106,443

4,806,510 113,571

12,711 80,326

14,042 86,185

15,512 92,487

82,130 1,144,019 17,136 1,243,286

87,631

93,499

99,761

106,443

Financing First Loan, less fees First Loan - Principle Payment Second Loan, less fees Second Loan - Principle Payment Total Financing

-5,556,257 63,371 -1,178,477 11,506 -6,659,857

Cash from Sale Selling Expenses PreTax Cash Flow AfterTax Cash Flow

Ballon Payment on 2nd loan 2,551,565 2,166,788

1,010,197 623,360

1,021,830 632,972

1,033,769 642,938

2,190,040 1,797,293

926,114 573,814

939,018 584,255

952,261 595,055

Cash Flow -- Before Tax NPV @ 8% Cash Flow -- After Tax Net Present Value Discounted @ 8%

965,852 606,228

-1,445,673 -149,231 -48,189 -37,798 -36,448 -1,717,338

4,920,081

-749,747 863,140 -34,458 70,906 149,841

-9,873,245 503,536

-9,873,245 503,536

-3,583,399 -3,398,755

8,007,248 4,823,948 7,116,089 4,766,022

NPV calculated starting 10 / 2005 (beginning of mo. payment) The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Page 15 of 19

Lease Assumptions Printout (a back-up report)

LEASE ASSUMPTIONS Client: Leased Property:

Page 2 12Feb05 Revision 1.0

ABC Co. 253 Green Steet

FINANCIAL ASSUMPTIONS Type of Business Entity (Beginning of Mo. Calc.) NPV Discount Rate Ordinary Income Tax Rate Capital Gains Tax Rate RENT ASSUMPTIONS Commencement Date Termination Date Lease Term Rentable SF Base Rental Rate Type of Lease Months of Rent Abatement Landlord Construction Allowance ANNUAL PERCENTAGE RENT INCREASES Increase @3% starting 10/06 based on

LLC 8.0% 35.0% 15.0%

10 / 2005 9 / 2015 120 months 50,000 $16.50 $/rsf/yr NNN 2 $10.00 $/rsf

$16.50

FIXED AMOUNT RENT INCREASES Fixed Increase #1 Fixed Increase #2 Fixed Increase #3 Fixed Increase #4 Fixed Increase #5 Fixed Increase #6 Fixed Increase #7 Fixed Increase #8 Fixed Increase #9 Fixed Increase #10 KEY RATIOS Average PreTax Cost / RSF / Year Average AfterTax Cost / RSF / Year PROPOSAL DATE Analysis prepared by All Brokers Inc.

OPERATING EXPENSES & TAXES Actual Op. Exp. & Taxes Base Year Op. Exp. & Taxes Annual % Increase Pass through costs start

$8.00 $/rsf/yr 2.5% (eff. 1/2006) 10/2005

OTHER MONTHLY EXPENSES Parking Descriptions can be changed After Hrs. HVAC include other costs in addition to Storage Space the rent and operating expenses. Other Total Monthly Expense Annual % Increase OTHER LEASING COSTS Consultants / Legal Fees Furniture Voice and Data Moving Other Contingency % Total Cost

Expense

Tenant Improvement Costs

CONSTRUCTION COSTS Interior Fit-up Contingency % Landlord Construction Allowance Net Cost to the Tenant

50,000 rsf $20.00 $/rsf 0% $10.00 $/rsf $500,000

DEPRECIATION ASSUMPTIONS Construction Additional Costs $28.77 $/rsf/yr $18.70 $/rsf/yr

Capital

Months

120

Write-Off *

yes

* Write-off remaining depreciation at the end of the analysis period.

5Feb05

A Backup Report, key assumptions are on the Key Assumptions report.

The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

Page 17 of 19

Purchase Assumptions Printout (a back-up report) Complete assumptions printout for Purchasing. A Backup Report, key assumptions are on the Key Your Client's logo here! Assumptions report.

PURCHASE ASSUMPTIONS Client: Purchased Property:

ABC Co. 48 Aubrey Way

FINANCIAL ASSUMPTIONS Type of Business Entity (Beginning of Mo. Calc.) NPV Discount Rate Ordinary Income Tax Rate Capital Gains Tax Rate Recapture 1250 Depreciation Tax Rate

OPERATING EXPENSES AND TAXES Operating Expenses & Taxes Annual % Increase

LLC 8.0% 35.0% 15.0% 25.0%

TERM FOR ANALYSIS Start Date Date Property Sold Holding Period

1 lot 48,500 rsf $/rsf

Land Purchase Cost Building Purchase Cost Total Property Cost

$38.75 $116.25 $155.00

$1,879,375 $5,638,125 $7,517,500

25.0% 75.0% 100.0%

BUILDING COST with CONSTRUCTION Building Purchase Cost $116.25 Const. Improvements $12.00 Total Building Cost $128.25

$5,638,125 $582,000 $6,220,125

90.6% 9.4% 100.0%

OTHER PURCHASING COSTS Closing costs @2.5% of Purchase Cost * Legal Fees Other Contingency Total

Expense

Capital

0% $187,938

TOTAL PURCHASE COST $170.88

$8,287,438

* Without Loan Fees, includes all Other Purchasing Costs & Construction

Financing FINANCING First Loan from 10 / 2005 to 9 / 2035 Loan Amount Loan % of Land, Bldg., Const. Cost Monthly Payment (360 month term) Loan Fees @2.00% Net Proceeds from Loan Unamortized Principal (due 9 / 2015) Second Loan from 10 / 2005 to 9 / 2010 Loan Amount Loan % of Land, Bldg., Const. Cost Monthly Payment (300 month term) Loan Fees @3.00% Net Proceeds from Loan Balloon Payment (due 9 / 2010) OPPORTUNITY COST - Lost Interest Income Calculations based on

ADDITIONAL COSTS Furniture Voice and Data Moving Other Other Contingency % Total Cost

Expense

Capital

SPECIAL EXPENSES / CREDITS Special Tax Credits Annual increase (or decrease) in Other the value of Land & Building Other Depreciation Write-off Depreciation Carry-over

$187,938

* Purchase Cost (Land and Building, not Const. Costs)

Total Purchase Cost *

$7.75 $/rsf/yr 2.5% (eff. 1/2006)

OTHER MONTHLY COSTS Insurance Parking Storage Space Other Total Other Monthly Costs Annual % Increase

10 / 2005 9 / 2015 120 months

PROPERTY COST Land Description Building

Page 3 12Feb05 Revision 1.0

@ 6.5% $5,669,650 70.0% $35,836 (30 yrs.) $113,393 $5,556,257 $4,806,510

SALE ASSUMPTIONS Land - compounded annually @2.00% Building* - compounded annually @2.00% Total Sale Price

$47.24 $156.34 $203.57

$2,290,948 $7,582,298 $9,873,245

* Building with Construction Costs

SELLING EXPENSES Commissions @5.1% of sale price Spruce-up Other Contingency Total Selling Expenses

$503,536

0% $503,536

DEPRECIATION ASSUMPTIONS Building - Purchase Cost Building - Construction Costs Other Purchase Costs Loan Points - Amortized over the life of the loan Additional Costs

Months

Write-Off *

468 468 468

60 * Write-off remaining depreciation at the end of the analysis period. @ 10% Balloon Loan $1,214,925 15.0% KEY RATIOS Average PreTax Cost / RSF / Year $16.51 $/rsf/yr $11,040 (25 yrs.) $36,448 Average AfterTax Cost / RSF / Year $9.95 $/rsf/yr $1,178,477 $1,144,019 5Feb05 PROPOSAL DATE Analysis prepared by All Brokers, Inc

n/a n/a n/a yes

Opportunity Cost $1,052,703

Invested @5% from 10/2005 - 9/2015; AfterTax Interest compounded monthly. The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

Sample Lease vs. Buy Analysis

All Brokers 520-770-9221

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Optional Report Showing Various Calculations

UNIT METRICS REPORT Client: Leased Property: Purchased Property:

ABC Co. 253 Green Steet 48 Aubrey Way

Page 4 12Feb05 Revision 1.0

Present Value PRESENT VALUE - calculations based on calculations based on 8% discount rate calculated monthly calculations on a $/sq.ft. basis. starting 10 / 2005 (beginning of mo. payment) NPV Occupancy cost - $/rsf/year Rentable SF PreTax Cash Flow AfterTax Cash Flow PreTax Cost AfterTax Cost NPV Rent - $/rsf/year Base Rent Operating Expenses/Taxes Gross Rent

KEY RATIOS & METRICS - $/rsf/year Average PreTax Cost / RSF / Year Average AfterTax Cost / RSF / Year

Lease

Purchase

50,000 $19.77 $12.96 $19.46 $12.65

48,500 $14.67 $9.83 $12.83 $7.98

$16.51 $9.95

LEASE INCOME FROM OWNED PROPERTY Commencement Date Termination Date Term of Lease Optional - include income Type of Lease from leasing out part of the Rentable SF owned property. Base Rental Rate Months of Rent Abatement Annual % Rent Increase Fixed Increase #1 Fixed Increase #2 Fixed Increase #3 Actual Op. Exp. & Taxes Base Year Op. Exp. & Taxes Op.Exp. & Tax Annual % Increase

LEASE INCOME - OTHER COSTS Commissions @0% of rent Construction Costs Advertising Legal Fees Other Contingency % Total Cost

Expense

Purchase

Sale

$1,879,375 $6,220,125 $337,778 $8,437,278 $173.96

$2,290,948 $7,582,298 -$503,536 $9,369,710 $193.19 $932,432 $19.23

ANNUITY - calculations based on 8% discount rate calculated monthly starting 10/2005 (beginning of mo. payment)

$12.56 $6.21 $18.77

$28.77 $18.70

GROSS SALE ANALYSIS Land Building (includes Const.) Loan Fees and Other Costs Total $/rsf Profit / (Loss) $/rsf

Occupancy cost - $/rsf/year PreTax Cash Flow AfterTax Cash Flow PreTax Cost AfterTax Cost

Lease

Purchase

$28.41 $18.62 $27.96 $18.18

$21.08 $14.12 $18.43 $11.47

Rent - $/rsf/year Base Rent Operating Expenses/Taxes Gross Rent

$18.05 $8.92 $26.97

Annuity calculations are a method to compare unit costs for different lease terms. The present value of the cost is determined and then amortized over the term at the discount rate.

Capital

The information contained herein has been given to us by sources we deem reliable, but we do not guarantee it. All data should be verified.

Sample reports - Buy

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