CREJ

November 2021 — Retail Properties Quarterly — Page 7 www.crej.com TYPE OF CAPITAL SOURCE OF CAPITAL EXPLANATION RATES / SPREADS LTV/COVERAGE TERM AMORTIZATION FOCUS TRENDS LIFE INSURANCE COMPANY • Insurance premiums • Annuity and GIC sales • Non-Recourse • Longer-term fixed rate loan 160 - 245 bps over the comparable US Treasuries • Up to 65% LTV • 1.50x Minimum DCR 3-30 Years 20-30 Years • Grocery-anchored centers (majority of income derived from grocer) • Internet proof infill neighborhood centers • Top tier credit tenants • Major metro areas • Low leverage requests • Life companies have tightened underwriting parameters to be more conservative. This includes: lower loan to values and higher vacancy factors • Lenders wanted to understand collections, any relief requests or lease amendments, and tenant viability prior to funding but has become less restrictive • More due diligence at both the property and Sponsor portfolio levels required in order to obtain committee approval. • Best execution at or below 60% leverage, but many will push to 65% on the right deal • Full-term I/O available on some grocery-anchored centers up to 55% LTV CONDUIT (CMBS) • Sales of mortgage- backed securities through public markets • Non-Recourse • Longer-term fixed rate loan 180 - 250 bps over the greater of swaps or treasuries • Up to 70% LTV • 1.40x Minimum DCR on NCF • 8.5% Minimum Debt Yield on NCF 5 & 10 Years 25-30 Years • Grocery-anchored centers (majority of income derived from grocer) • Internet proof infill neighborhood centers • Top tier credit tenants • Major metro areas • Have broadened their appetite for well positioned grocery and non-grocery anchored retail centers • Reserves have been removed in most cases • Focused on acquisitions or cash-neutral refinances in the current environment • Full-term I/O available on some properties up to 65% LTV BANK • Corporate Debt • Deposits • Recourse (some non-recourse available) • Shorter-term fixed and floating rate loans 200 - 300 bps over corresponding treasuries L + 250-325 floating (0.50% Libor Floor) • Up to 65% LTV 5-7 Years Fixed Interest Only to 25-30 Years • Grocery-anchored centers (majority of income derived from grocer) • Internet proof infill neighborhood centers • Top tier credit tenants • Major metro areas • More focused on quality assets (grocery- anchored centers, irreplaceable retail) but have broadened profile to include lesser quality assets • Most competitive for Sponsors with established banking relationships and strong borrower history that are willing to accept recourse; standards are tightening for Sponsors with no deposit relationship • Primarily recourse loans, with non-recourse available to strong Sponsors • More flexible (open) prepayment terms DEBT FUND / BRIDGE LOAN • Private Capital • Institutional Capital • Non-Recourse • Shorter term bridge loans for acquisition and/or repositioning LIBOR + 325-500 bps (0.50% Libor Floor) • Up to 75% LTC • Going-in 1.0x DCR 1 - 5 (3+1+1) Interest Only Years 1-3 • Grocery-anchored centers • Credit tenants • Value-Add Transactions • Recapitalizations • More focused on quality assets (grocery- anchored centers, irreplaceable retail) but have broadened profile to include un-anchored centers and lesser quality assets • Pricing depends on leverage level, property quality, and Sponsor strength • Likely need a business plan with strong anchor for retail MEZZANINE/ PREFERRED EQUITY • Private Capital • Institutional Capital • Junior financing secured by a pledge of, or participation in ownership interest Mezzanine 7%-11% • Up to 85% LTC • 1.10x DCR 2 - 10 Interest Only (in most cases) • Neighborhood Centers • Strip Centers • Second tier credit tenants • Secondary/Tertiary Markets • Preferred equity offers higher funding than mezzanine, but at a higher cost • Minimum investment is typically $5M but can start as low as $1M when paired with senior position LIBOR - London Interbank Offered Rate REIT - Real Estate Investment Trust This information is intended to illustrate some of the lending options currently available.Otheroptions may exist.While Essex Financial Group strives to present this information as accurately as possible, no guarantee is made as to the accuracy of the data presented, or the availability of the terms at time ofapplication.Rates and terms are subject to change. Please contact one ofourmortgage bankers forup to date rate and term information. Essex Financial Group | 1401 17th Street, Suite 700 | Denver, CO 80202 | www.essexfg.com DCR - Debt Coverage Ratio DUS - Delegated Underwriter Servicer LTV - Loan to Value Ratio LTC - Loan to Cost Ratio Essex Financial Group - Recent Retail Transactions Pine Buffs Plaza Parker, CO $15,575,000 Permanent Loan Life Insurance Company Webster Lake Promenade Northglenn, CO $15,600,000 Permanent Loan Life Insurance Company Bowles Marketplace Littleton, CO $21,000,000 Permanent Loan Credit Union J eff R iggs f oundeR and C haiRman (303) 843-0440 JRiggs @ essexfg . Com C oopeR W illiams p Resident / p RinCipal (303) 843-4581 CWilliams @ essexfg . Com p eteR K eeppeR p RinCipal (303) 843-6002 peteRK @ essexfg . Com m iKe J effRies p RinCipal (303) 843-9220 mJeffRies @ essexfg . Com a lex R iggs p RinCipal (303) 843-4027 aRiggs @ essexfg . Com p aul d onahue a ssistant Vp (303) 843-4021 pdonahue @ essexfg . Com B laiRe B utleR a ssistant Vp (303) 843-4024 BButleR @ essexfg . Com C hRis W hite a ssistant Vp (303) 843-4583 CWhite @ essexfg . Com Retail Properties Quarterly - Financing Sources Matrix