PowerPoint Presentation

First page Table of contents 1 Next page Last page

Real Estate Discussion May 2020

Executive Summary Section 1: Lease Abstract Section 2: Financial Projection of Remaining Obligation Section 3: Cushman & Wakefield’s Market Forecast Section 4: COVID-19 Items to be Addressed Section 5: Next Steps Table of Contents

Executive Summary

Mark S. Weiss Executive Vice Chairman 1290 Avenue of the Americas New York, NY 10104 Direct +1 212 841 7871 Fax +1 212 729 2570 mark.weiss@cushwake.com cushmanwakefield.com

May 7, 2020

John P. Napoli, Esq. Lorie Almon, Esq. Seyfarth Shaw LLP 620 Eighth Avenue New York, NY 10018

Dear John and Lorie:

The following report, consistent with our earlier email, is intended to clarify where Seyfarth stands with its New York City leasehold obligation and how best to capitalize on the upcoming market weakness we envision in the context of your lease expiration (February 28, 2024). The report also examines the financial aspects of your occupancy from both your and your Landlord’s perspective. We also dedicated a portion of this report to the necessary steps required to adjust your tenancy to the new post-COVID realities of office space occupancy. We created this document as a guide to our kick-off meeting in which we can discuss what we know about your practice and your office space, but moreover learn more so that we can, along with you, define a goal and develop a strategy to achieve it. By developing this strategy up front, we will be far more prepared than Brookfield (or any other landlord) in order to drive the best possible outcome for Seyfarth.

Our report is broken down into the following sections.

Section 1: Section 2:

A Lease Abstract highlighting the major points in your lease.

A Financial Projection of your remaining obligation as well as a depiction of your Landlord’s financing. Please note that we introduced the metric of Effective Annual Cost Per Attorney (which can and should be considered at both current and full occupancy). We will discuss that concept further during our meeting and are certain you will find it enormously useful. Section 3: Cushman & Wakefield’s market forecast which draws from past pull-backs (2001 and 2008) but also factors in the very likely scenario where WeWork and other co-working companies either pull back materially or fail entirely.

P a g e | 2

Section 4: Contains COVID-19 items that need to be addressed including enhanced cleaning, short-term and long-term realignment of your offices as well as a recap of safely re- entering your offices. Section 5: Next Steps: Including engagement with Brookfield, a facility review, and creating and completing a thorough checklist of all non-economic items that will factor into any negotiation. We can also share insights into how other leading organizations are communicating with their teams and further support the building of consensus among your stakeholders — we’re cognizant that decisions around office space are carrying an additional emotional element that hadn’t existed before COVID-19. Since you’ve both stated in our last call that this matter is of immediate importance and our goals entail getting permanent immediate term relief in 2020, we are available to have this video meeting almost anytime you’d like. Please let us know when this would work for your team.

We are looking forward to delivering extraordinary results for you during these extraordinary times.

Sincerely,

Mark S. Weiss

cc:

Rachel Casanova Toby Dodd Glenn Isaacson Jared Thal

No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions, imposed by our principals.

Lease Abstract Section 1

OVERVIEW

1. LANDLORD:

FC Eighth Ave., LLC

2. TENANT:

Seyfarth Shaw LLP

3. PREMISES:

Floor

RSF 1,650

P28 (Storage)

E31 E32 E33 E35

31,753 31,753 31,753 32,623 129,532

Total

[In anticipation of the near- and long-term change in workplace occupancy resulting from COVID-19, it will be critical to revisit Seyfarth’s space program and resulting space requirements prior to making any lease commitment.]

4. EXECUTION DATES:

Lease: 6/12/2006 (Lease Floors P28, E31-33)

Lease Commencement Letter: 12/26/2006

1 st Amendment: 12/21/2016 (Lease Floor 35)

5. KEY LEASE DATES:

Lease Commencement Letter Lease, Article 3.01(B) 1 st Amendment, Article 2(a) Estoppel Letter

P28, E31-33 Lease Commencement Date: 12/3/2006 P28, E31-33 Rent Commencement Date: 8/3/2007 E35 Commencement Date: Between 5/1/2017 and 6/15/2017 P28, E31-33, E35 Expiration Date: 2/29/2024

ECONOMICS

6. BASE RENT:

Original Lease – Floors 28, 31-33

Lease, Article 3.01, p. 46

Storage: Floor 28

Floors 31-33

Base Rent PSF

% Incr.

Base Rent PSF

% Incr.

Start Date

End Date

$43.50

$76.72

8/3/2007

8/31/2012

$47.85

10.0%

$81.72

6.51%

9/1/2012

8/31/2017

$52.64

10.01%

$86.72

6.11%

9/1/2017

8/31/2022

$57.90

9.99%

$91.72

5.76%

9/1/2022

2/29/2024

1st Amendment - Floor 35

Start Date

End Date

Base Rent PSF

% Incr.

5/1/2017*

9/30/2022

$83.00

10/1/2022

2/29/2024

$90.00

8.4%

*Assumed 5/1/17 start for E35. Following the LCD there is 5 months of free rent

7. CONCESSIONS:

Lease, Article 3.01(B), p.46 1 st Amendment, Article 4(a), p.3

P28, E31-33 Free Rent: 8 months E35 Free Rent: 5 months - Tenant had the right to amortize up to 3 additional months of free rent. - Each month of amortization equates to $1.35 per RSF over the term of the lease

1 st Amendment, Article 6(a), p.4

E35 Landlord Contribution: $1,684,550.88

8. OPERATING EXPENSES:

Lease, Article 4.03(B)(iv), p.57 Lease, Article 4.03(B)(v), p. 67

P28, E31-33 Base Year: 2007 P28, E31-33 Pro Rata Share: 13.606% based on a RBA of 700,125 SF (P28 is not subject to OpEx) E35 Base Year: 2017 E35 Pro Rata Share: 4.535%

1 st Amendment, Article 5(a), p.4 1 st Amendment, Article 5(c), p.4

9. REAL ESTATE TAXES:

Lease, Article 4.02(A)(vi), p.49 Lease, Article 4.02(A)(ix), p.52 1 st Amendment, Article 5(a), p. 4 1 st Amendment, Article 5(b), p. 4

P28, E31-33 Base Year: 2007 P28, E31-33 Pro Rata Share: 13.732% based on a RBA of 705,717 SF E35 Base Year: 2017/18 E35 Pro Rata Share: 4.508%

Lease, Article 4.02(A)(vii), p. 50

Taxes shall mean the aggregate amount through the Scheduled PILOT Conversion Date, PILOT due and payable (whether by.actual direct payment or by way of credit or offset as ·provided in Section 3. I (b )(ii) of the Unit Ground Lease) by Landlord under the Unit Ground Lease; provided, that (1) there shall be excluded from PILOT any Retail PILOT (as such term is defined in the Unit Ground Lease) and (2) the rate of Office PILOT per Taxable Square Foot (as such term is defined in the Unit Ground Lease) for the Base Tax Year shall be the greater of (A) the rate per Taxable Square Foot payable for such year as set forth on Schedule 1 to the Unit Ground Lease and (B) $9.78 per Taxable Square Foot and (y) from and after the Scheduled PILOT Conversion Date, Full Taxes, (b) any Times Square Theater Surcharge payable by Landlord under the Unit Ground Lease, (c) all assessments (special or otherwise) and all other governmental levies, impositions or charges, whether general, special, ordinary, extraordinary, foreseen or unforeseen which may legally be assessed, levied or imposed upon all or any part of the Unit and/or Landlord's undivided interest in the Common Elements, or any part thereof and which are required to be paid by Landlord, and (d) any expenses (including the reasonable fees and disbursements of attorneys and other experts and witnesses) incurred in contesting in good faith any of the foregoing or the assessed valuation of all or any part of the Unit and/or Landlord's undivided interest in the Common Elements, or any part thereof; Scheduled PILOT Conversion Date is understood to be 12/31/2032, as per C&W obtained building financing prospectus. [Following the conversion date, Real Estate Taxes are projected to virtually double the 2032 PILOT. A lease renewal will have to address protection from onerous escalations after 2032] Landlord shall furnish to the Demised Premises through the transmission facilities to be installed by Landlord in the Unit substantially in accordance with the Base Building Criteria, alternating electric current in an amount equal to (a) six (6) watts actual demand load per gross square foot (based on each floor of the Demised Premises containing 26,000 gross square feet), exclusive of electric required to operate the Base Systems (including, without

10. ELECTRIC:

Lease, Article 7.01, p.88

limitation, the Base HVAC System) on all floors of the Office Space (the "Office Space Electrical Capacity") and (b) the 28th Floor Electrical Capacity for the 28th Floor Space.

The electric current for the Office Space shall be measured by one or more meters with coincident demand and shall be billed as if there was only one (1) meter, which meters shall be installed and maintained by Landlord at such location or locations as Landlord shall reasonably select or as is otherwise shown on Tenant's Final Working Drawings and the electric current for the 28th Floor Space shall be provided on so called "rent-inclusion" basis (it being agreed that the Fixed Rent for the 28th Floor Space includes such rent inclusion for electric current to the 28th Floor Space). Tenant shall pay such amounts to Landlord within thirty (30) days after delivery to Tenant of an invoice therefor (which amount shall be computed by applying Tenant's kw and kwh (on and off-peak, if applicable) to the Electric Rates paid by Landlord, (without any premium or administrative markup) , plus any reasonable third party fees associated with the reading of meters and production of bills (the "Electricity Additional Rent"). [Based on current law firm utilization trends, there appears to be sufficient supply submetered by Landlord] $2,460,015.22 (Letter of Credit). There will be an application for a new Letter of Credit in the amount of $1,845,011.37 [Please confirm if Seyfarth has already reduced its Letter of Credit with Landlord]

11. SECURITY DEPOSIT:

Estoppel, dated 11/30/2018

12. STORAGE:

1,650 RSF on Partial 28 th Floor used as storage: See base rent schedule for cost per square foot inclusive of electricity.

OPTIONS

13. ASSIGNMENT

Tenant shall not, whether voluntarily, involuntarily, or by operation of law or otherwise

AND SUBLETTING: Lease, Article 8.01(A) p. 93

(i) assign or otherwise transfer this Lease or any interest or estate herein,

(ii) sublet the Demised Premises or any part thereof or allow the Demised Premises or any part thereof to be used or occupied by others in violation of Article 5 or in violation of any of the Superior Instruments, or (iii) mortgage, pledge, encumber or otherwise hypothecate this Lease or the Demised Premises or any part thereof in any manner without, in each instance, obtaining the prior written consent of Landlord.

Lease, Article 8.01(B) p. 93-94

Tenant shall have the right, without the consent of Landlord to assign this Lease to:

(i) an entity created by merger, reorganization or recapitalization of or with Tenant,

(j) a purchaser of all or substantially all of Tenant's assets or stock (the assignee described in transactions referred to in clause (a) and (b) above, is referred to herein as a "Successor") or (k) an Affiliate provided, in each such case, such merger, reorganization, recapitalization or sale or assignment to an Affiliate, as the case may be, shall be for a valid business purpose and not principally for the purpose of transferring the leasehold estate created by this Lease or the avoidance of any obligations under this Lease and, provided, further, (A) such Successor or Affiliate, as the case may be, shall use the Demised Premises in compliance with and assume the terms and provisions of, this Lease from

and after the effective date of the assignment and (B) with respect to a transfer to a Successor, such Successor have the required Material Net Worth.

Tenant shall have the right, without the consent of Landlord to sublet up to 4,000 RSF without Consent.

Lease, Article 8.01(C) p. 94

Lease, Article 8.01(D) p. 94-96

Tenant shall have the right, without Landlord's consent, but subject to compliance with the terms of this Section, to permit up to 4,000 RSF in the aggregate of the Demised Premises to be occupied on a temporary basis, at any time and from time to time, by clients, independent contractors or other Persons with an ongoing business relationship with Tenant.

Profit Share Tenant shall pay to landlord 50% of all Sublease Profits.

14. RECAPTURE OPTION:

Landlord shall have the right (the "Recapture Right"), exercisable by notice given to Tenant within thirty (30) days after the giving of the Recapture Availability Notice to (1) with respect to a proposed assignment of this Lease (or deemed assignment), cancel this Lease as provided in Section 8.04B hereof or (2) with respect to a proposed subletting under clause (b) above either (A) cancel this Lease with respect to the Recapture Space as provided in Section 8.04B hereof, or (B) require Tenant to execute and deliver a Recapture Sublease to Landlord (or its designee) for the Recapture Space on the applicable Proposed Terms, subject to the further provisions of Section 8.04A(iii) hereof. For the purposes of this Section 8.04, (a) "substantially all of the remainder of the term" shall mean that the term of the proposed subletting shall expire within the final twelve (12) months of the then Term and (b) "substantially all of the Demised Premises" shall mean at least eighty five percent (85%) of the RSF of the then Premises (exclusive of the 28th Floor Space). (iii) If Landlord exercises its option to sublet the Recapture Space as aforesaid; such sublease- to Landlord or its designee (which designee must be an Affiliate of Landlord) as subtenant (a "Recapture Sublease") shall: (A) be at a rental equal to the lesser of (1) the Rent Per Square Foot from time to time payable under this Lease during the term of such Recapture Sublease multiplied by the number of RSF of the Recapture Space and (2) the sublease rent set forth in the Proposed Terms and otherwise be upon the same terms and conditions as those contained in this Lease (as modified by the Proposed Terms, except such as are irrelevant or inapplicable and except as otherwise expressly set forth to the contrary in this subsection 8.04A(iii)); it being agreed that, any rental payable under any Recapture Sublease shall, at Landlord's option, either be payable at the times set forth in the Recapture Sublease or shall be a credit against the Rents payable by Tenant hereunder. Tenant shall have the option to renew the Initial Term (the "Renewal Option") with respect to all of the then Demised Premises (except as otherwise expressly provided below) for an additional term (the "Renewal Term") commencing on the day (the "Renewal Term Commencement Date") immediately following the Stated Expiration Date and ending on March 31, 2034 (the "Stated Renewal Term Expiration Date"), which date shall thereupon be and become the Expiration Date of this Lease. The Renewal Option shall be exercised by notice to Landlord (the "Renewal Election Notice") delivered no later than the date which is eighteen (18) months prior to the Stated Expiration Date. The annual Fixed Rent for the Renewal Term shall be equal to 100% of the fair market rental value of the Renewal Premises determined pursuant to the provisions of Sections 39.04B and 39.05 hereof. [By September 1, 2022 Seyfarth has to exercise its 10-year lease Renewal Option. The rent

Lease, Article 8.04(A)(i) p. 96-101

Lease, Article 8.04(A)(iii)(A)

15. RENEWAL OPTION:

Lease, Article 39.01(A) p.199

determination date of March 1, 2024 introduces material cost uncertainty between the date of commitment and the date Seyfarth’s renewal rent is determined]

At Tenant's option, in lieu of exercising the Renewal Option with respect to the then entire Premises, Tenant may exercise the Renewal Option with respect to a portion of the then Premises consisting of one (1) or more full floors of the Demised Premises in one (1) contiguous block (from the lowermost floor upward or vice versa, as determined by Tenant and as is specified in the Renewal Election Notice). To the extent the then Premises shall include any satellite noncontiguous floors ( each, a "Satellite Floor"), Tenant may elect to include such Satellite Floors within the Renewal Premises, provided that, in addition to any Satellite Floor, the Renewal - Premises consists of at least an entire floor of the Demised Premises This Lease, as so extended during the Renewal Term, shall be upon the same terms and conditions as contained in this Lease, except that (a) the annual Fixed Rent for the Renewal Term shall be a sum equal to 100% of the then fair market rental value of the Renewal Premises (which may include periodic increases to the extent consistent with the then current market terms for such space) determined as of the Renewal Term Commencement Date; (b) the Renewal Premises shall be delivered in its then "as is" condition; (c) Landlord shall not be required to do any work to the Renewal Premises or to provide any work allowance or free rent period or concession in connection with Tenant's continued occupancy of the Renewal Premises; ( d) the base years for escalations with respect to Operating Expenses and Taxes shall be the then current base years (i.e.; the fiscal year (for Taxes) or calendar year (for Operating Expenses) in which the applicable Renewal Term Commencement Date occurs); and (e) this Lease shall not contain any further Renewal Option. Additional Renewal Option: Supplementing Article 39 of the Lease, provided that the Lease has been extended for the Renewal Term and is in full force and effect immediately prior to the date Tenant delivers to Landlord the Second Renewal Election Notice (as hereinafter defined), Tenant shall have the option to renew the Term (the “Second Renewal Option”) with respect to all of the then Demised Premises (or less than all pursuant to Section 39.0IB of the Lease) for an additional term (the “Second Renewal Term”) commencing on the day (the “Second Renewal Term Commencement Date”) immediately following the Stated Renewal Term Expiration Date and ending on March 31, 2039 (the “Stated Second Renewal Term Expiration Date”), which date shall thereupon be and become the Expiration Date of this Lease. The Second Renewal Option shall be exercised by notice to Landlord (the “Second Renewal Election Notice”) delivered no later than the date which is eighteen (18) months prior to the Stated Renewal Term Expiration Date (the Stated Renewal Term Expiration Date being March 31, 2034). The annual Fixed Rent for the Renewal Term shall be equal to 100% of the fair market rental value of the Renewal Premises determined pursuant to the provisions of Sections 39.0413 and 39.05 of the Lease, provided, that (i) the term “Renewal Option” shall be deemed to mean the Second Renewal Option, (ii) the term “Renewal Election Notice” shall been deemed to mean the Second Renewal Election Notice, (iii) the term “Renewal Term” shall be deemed to mean the Second Renewal Term and (iv) the term “Renewal Term Commencement Date” shall be deemed to mean the Second Renewal Term Commencement Date.

Lease, Article 39.01(B) p.199

Lease, Article 39.03 p. 200

1 st Amendment, Article 7 p. 5

16. HOLDOVER:

Lease, Article 22.01 p. 161-162

Upon the expiration or other termination of the Term of this Lease, Tenant shall, at its sole cost and expense, quit, surrender, vacate and deliver the Demised Premises to Landlord broom clean and in good order, condition and repair except for ordinary wear, tear and damage by fire or other casualty and condemnation, together with all Tenant Changes (except as otherwise provided for in this Lease and subject to Tenant's obligation to remove

any Specialty Alteration, Hazardous Materials and other items pursuant to the terms hereof) and shall remove all Tenant's Property therefrom.

Tenant desires to limit and liquidate said amounts and therefore agrees that if possession of the Demised Premises is not surrendered to Landlord upon the expiration or sooner termination of the Term of this Lease, then notwithstanding anything to the contrary contained in this Lease, Tenant shall pay to Landlord for each month and for each portion of any month during which Tenant holds over in the Demised Premises after the expiration_ or sooner termination of the Term hereof, for use and occupancy, the aggregate sum of (i) the greater of (A) 150% for the first sixty (60) days of such holding over, 175% for the next sixty (60) days and 200% thereafter, of the amount of the installment of the annual Fixed Rent that was payable under this Lease for the last month of the Term hereof and (B) the fair market rental value of the Demised Premises as of the date of such holdover, plus (ii) one- twelfth (1/12) of all items of recurring Additional Rent which would have been payable monthly pursuant to this Lease had its Term not expired or been terminated (it being agreed that for the purposes of this Section 22.02A, if all or part of such holdover occurs after the Scheduled PILOT Conversion Date, references to PILOT in Section 4.02 hereof shall be deemed to mean Full Taxes for the period after the Scheduled PILOT Conversion Date), plus (iii) those other items of Additional Rent which would have been payable pursuant to this Lease had its Term not expired or been terminated which aggregate sum Tenant agrees to pay to Landlord on demand, in full without setoff, and no extension or renewal of this Lease shall be deemed to have occurred by such holding over, nor shall Landlord be precluded by accepting such aggregate sum for use and occupancy from exercising all rights and remedies available to it to obtain possession of the Demised Premises. Tenant shall have the option to add the entire 34th floor of the Building to the Demised Premises as of a date to be selected by Landlord between September 30, 2027 and March 31, 2028 as set forth in a notice to be delivered to Tenant by Landlord no more than fifteen (15) months and no less than three (3) months prior to the Estimated Delivery Date of the Option Space. Supplementing Section 38.0lB of the Existing Lease, subject to the terms of the Lease, during the Term, Landlord shall provide Tenant with an additional right of first offer to add to the Demised Premises the first full floor in the Mid-Rise Floors which becomes available for leasing by Landlord during the period commencing on January 1, 2023 and ending on December 31, 2025 (the "Third Floating Option Space"). The right of first offer granted in this Section 8(b) is referred to herein as the "Third Floating Expansion Option". Tenant has waived its right per original lease for a contiguous floor.

Lease, Article 22.02, p. 162

17. EXPANSION OPTIONS: 1 st Amendment, Article 8(a)

1 st Amendment, Article 8(b)

Landlord may accelerate the delivery date by reason of a voluntary agreement between Landlord and existing tenant.

The Fixed Rent with respect to the Option Space and any Floating Option Space, as applicable, shall (a) commence to be payable on the actual Delivery Date thereof and (b) be 100% of the annual fair market rental value thereof (which may include periodic increases), determined as of the date which is the Estimated Delivery Date of such Option Space to Tenant.

Lease, Article 38.04 p.194

MISCELLANEOUS

18. END OF TERM / RESTORATION:

Lease, Article 22.01 p. 161

damage by fire or other casualty and condemnation, together with all Tenant Changes (except as otherwise provided for in this Lease and subject to Tenant's obligation to remove any Specialty Alteration, Hazardous Materials and other items pursuant to the terms hereof) and shall remove all Tenant's Property therefrom. Tenant shall not be required to remove any Tenant Changes other than Specialty Alterations. Upon the expiration or earlier termination of the Term, Tenant shall remove all Specialty Alterations required to be removed at Tenant's s9le cost and expense. Notwithstanding the :foregoing, if at the time that Tenant requests Landlord's consent to any Tenant Change, Tenant requests that Landlord inform Tenant whether Landlord will require Tenant to remove any Tenant Changes that constitute Specialty Alterations at the end of the Term, Landlord will so advise Tenant at or before the time Landlord consents to such Specialty Alterations, and, with respect to those Specialty Alterations that Landlord stated it will require Tenant to remove, Tenant, at its expense, prior to the Expiration Date or, in the case of an earlier termination of this Lease Specialty Alterations shall mean Tenant Changes made in or to the Demised Premises ( or other portions of the Building to the extent expressly permitted hereunder, if any) which are not customary office installations, including, but not limited to, kitchen facilities, cafeteria, safes or vaults, gymnasiums, executive bathrooms, raised flooring, trading floors, reinforced flooring (but only to the extent the same materially reduces ceiling heights), dumbwaiters, pneumatic tubes, shaft space constructed within the Demised Premises as part of any Tenant Changes (but only to the extent such shaft space materially exceeds that typically found in standard office installations), any Antenna, vertical and horizontal transportation systems, auditorium, child or health care facilities, travel agency, print shop, conveyors, elevators, mezzanine space or mezzanine floors, internal staircases, escalators and alterations made to fire staircases used for inter-floor traffic, emergency generators, UPS systems and related equipment and facilities, or any other Tenant Change of a similar character; it being agreed however, that in no event shall Specialty Alterations included any underfloor or overhead wiring or cabling, any raised flooring affecting an area of 2,500 square feet or less, or up to and including 2 pantries per floor of the office space.

Lease, Article 13.01(c) p. 125

Lease, Definitions p. 20

19. USE

Use for general and executive offices and legal ancillary uses.

Lease, Article 5

20. ADDITIONAL SERVICES Lease, Article 6.01

(i) Normal Elevator Service

(ii) HVAC provided during normal business hours and 9AM to 1PM on Saturdays

(iii) cleaning includes base cleaning for 2 pantries per floor but excludes the storage space on 28th floor

(iv) Base building emergency power for emergency lighting only

Provides for roof antenna and emergency reserve power. Tenant had to request the use of allocated space and capacity in the first year of the lease.

Tenant has the use of 2 four-inch conduits from basement to 29th floor and 2 four-inch sleeves from 29 to 31st through 33rd floors.

Lease, Article 6.03

Provides for supplemental chilled water capacity of 15 tons per floor at landlords actual cost without markup. If not used in the first year of the lease, landlord had the right to rescind the Allocation. [Please advise if you are utilizing any or all of the chilled water capacity]

Lease, Article 6.05

Permits the use of fire stairs for inter-floor traffic. Tenant has the right to decorate the fire stairs but cannot carpet them.

Lease, Article 6.06

21. SATALLITE ANTENNA Lease, Article 37 22. EMERGENCY POWER Lease, Article 43

One (1) free space for an antenna on the existing mast provided a request for same was made in the first six months after Lease execution. [Does tenant have a satellite antenna?]

Provides for up to 200 KW emergency generator capacity provided Tenant requested same within 6 months of Lease execution. Cost per KW is $300 annually [Does Tenant utilize any of the capacity called for?]

Section 2 Financial Projection of Remaining Obligation

| New York

Lease Overview Rentable Area Expiration 2020 Base Rent Floors

Building Debt Overview

Brookfield Condo Unit: Partial Retail + Flrs 28-52)

129,532 SF 996 SF/Atty

Debt

$750.0M $1,016/SF

P28, E31-33 & E35

Maturity

Dec. 9, 2020

Feb. 29, 2024

$515M 1st Mortgage:

NYT 2019-NYT (Securitized) @ LIBOR plus 1.856796% I/O

$85.35/SF $90.36/SF $93.48/SF

2020 Escalated Rent

Average Escalated Rent for Term

$120M B-Note:

Bank of America, Barclays, Citigroup and Deutsche Bank @ LIBOR plus 3.500% I/O

from Jun. 1, 2020

Total Remaining Obligation Total

$48.5M $42.7M

$373K/Atty

$115M Mezz:

Private Lender @ LIBOR plus 5.250% I/O

from Jun. 1, 2020

NPV

$329K/Atty

$12.9M/Yr

Annuity

$99K/Yr/Atty

SF/Atty and $/Atty ratios based on current attorney headcount of 130 and do not consider actual attorney space capacity.

Note: 1st Mortgage and Mezz have Five successive 12-month Extension Options

Landlord Carry Cost Breakdown (2020) Building OpEx $12.31/SF Building PILOT $11.44/SF Building Debt Service $30.88/SF Total Carry $54.63/SF

All information furnished is from sources deemed reliable. No warranty or representation is made as to the accuracy thereof and same is submitted subject to errors, omissions, change in price, rental or other conditions, prior sale, lease, or financing or withdrawal without notice.

| New York

Assumptions Jun. 1, 2020 Analysis Commencement Rentable Area Lease Commencement Lease Term Lease Expiration

Notes

620 Eighth Avenue E31-33 Remaining Obligation

620 Eighth Avenue Remaining Obligation E35

P28 Remaining Obligation 620 Eighth Avenue 1,650 SF 3 Years, 9 Months Feb 29, 2024 Jun 1, 2020

**EACPA is the Effective Annual Cost per Attorney and represents the annuitized occupancy cost based on 125 Attorneys.

2020 Escalated Rent is the current gross rent with OpEx & RE Tax escalations (before CRT & electric). *$ per Attorney and per square foot (PSF) figures are annualized for partial years (2020 & 2024). Rentable area measurements for new commitment will need to be verified with Brookfield. $/Atty ratios based on current attorney headcount of 130 and do not consider actual attorney space capacity.

95,259 SF Jun 1, 2020

Jun 1, 2020 32,623 SF

3 Years, 9 Months Feb 29, 2024

Feb 29, 2024 3 Years, 9 Months

Start

Duration

Rent

Start

Duration

Rent

Start

Duration

Rent

27 Mo. $86.72/SF 18 Mo. $91.72/SF

28 Mo. $83.00/SF 17 Mo. $90.00/SF

27 Mo. $52.64/SF 18 Mo. $57.90/SF

Jun 2020 Sep 2022

Jun 2020 Oct 2022

Jun 2020 Sep 2022

$12.31/SF

$11.98/SF

2020 Operating Expenses Base Operating Expenses 2020 Real Estate Taxes (PILOT) Base Real Estate Taxes (PILOT)

2007

2017

$9.28/SF

$10.08/SF

N/A

$11.44/SF

$11.15/SF

$11.44/SF

2007

2017/18

2007

$8.73/SF

$10.48/SF

$8.73/SF

$99K/Yr. $90.36/SF

Escalated Rent (2020) EACPA**

Summary | Cash Flow Impact

7 Mos. 2020

2021 12 Mos.

12 Mos. 2022

2023 12 Mos.

2024 2 Mos.

45 Mos.

Total

NPV @ 7.0% Annuity

Jun. 1, 2020 Analysis Commencement

Base Rent

$6.4M $0.2M $0.2M $6.8M $0.3M $0.1M $0.0M $7.3M

$11.1M

$11.3M

$11.8M

$2.0M $0.1M $0.1M $2.1M $0.1M $0.0M $0.0M $2.3M

$42.5M

$37.4M

$11.3M

OpEx Escalations RE Tax Escalations

$0.4M $0.3M

$0.5M $0.4M

$1.7M $1.3M

$1.5M $1.2M

$0.4M $0.3M

Escalated Rent

$11.8M

$12.1M

$12.7M

$45.5M

$40.1M

$12.1M

P28, E31-33 + E35 620 Eighth Avenue Remaining Obligation

Escalated Rent PSF

$90.36/SF*

$90.96/SF

$93.38/SF

$97.95/SF

$98.57/SF*

$93.48/SF

RLO

Commercial Rent Tax

$0.5M $0.3M $0.0M

$0.5M $0.3M $0.1M

$1.8M $1.0M $0.2M

$1.6M $0.9M $0.2M

$0.5M $0.3M $0.0M

Electric

Direct Expenses

Total

$12.6M

$12.9M

$13.5M

$48.5M

$42.7M

$12.9M

129,532 SF

$96.29/SF*

$97.00/SF

$99.60/SF

$104.43/SF

$105.17/SF*

$99.68/SF

130 Attorneys

$96K/Atty*

$97K/Atty

$99K/Atty

$104K/Atty

$105K/Atty*

$99K/Atty

620 Eighth Avenue - E31-33 Remaining Obligation

Seyfarth Shaw | New York

Analysis Detail (Lessee Perspective)

Printed: May 1, 2020 at 6:43 PM

Key Assumptions

1X Costs Hard Construction Soft Costs

Electric is estimated based on initial rent invoices received. Analysis is truncated to Feb. 29, 2024 for common term comparison purposes.

- - - - - - - - -

Analysis Period Lease Type

Analysis Term 3 Yrs, 9 Mos

Discount Rate 7.00%/Yr.

Jun. 1, 2020 - Feb. 29, 2024

OpEx Base ReTax Base

Direct

$9.28/SF $8.73/SF $2.00/SF

2007 2007

13.606% Pro Rata 13.498% Pro Rata

FF&E IT & Security Moving

Total Rentable Area Lease Commencement Lease Expiration Analysis Truncation Rent Schedule Initial Free Rent: Lease Term

95,259 SF Jun. 1, 2020 3 Yrs, 9 Mos Feb. 29, 2024 Feb. 29, 2024

Submetered Electric Fixed Annual Increase

No Mark-Up

None None

TI Allowance

Commissions (1.5X)

$0.00/SF

$0K

Start

End

$/SF/Year

$/Year

Total

None

Tranche 1: Tranche 2: Tranche 3: Tranche 4: Tranche 5: Tranche 8:

$86.72/SF $91.72/SF

27 Mos. (1 - 27) 18 Mos. (28 - 45)

Jun. 1, 2020 Aug. 31, 2022 Sep. 1, 2022 Feb. 29, 2024

$8.3M $8.7M

Direct Expenses BID Tax

+5.8%

$0.36/SF

$34K

Total

$0.36/SF

$34K

Expense Projections 3.50%/Yr.

2020

2021

2022

2023

2024

2025

2026

2027

Operating Expense Real Estate Tax Submetered Electric Direct Expenses

12.31 11.44

12.74 11.72

13.19 12.01

13.65 12.31

14.13 12.62

14.62 12.93

15.14 13.26

15.67 13.59

3.50%/Yr. FMV Increase 3.50%/Yr. 3.50%/Yr.

2.00 0.36

2.07 0.37

2.14 0.38

2.22 0.39

2.30 0.41

2.38 0.42

2.46 0.44

2.54 0.45

Cash Flow | $/SF

7 Mos 2020

12 Mos

2 Mos 2024

45 Mos

2021

2022

2023

2025

2026

2027

Total

NPV @ 7.0% Annuity

Base Rent Free Rent

50.59

86.72

88.39

91.72

15.29

- - - - - - - - - - - - - - - - - - - -

332.70

293.06

88.56

Operating Expense Real Estate Tax

1.77 1.64 2.15 1.17 0.21

3.47 2.99 3.71 2.07 0.37

3.91 3.28 3.81 2.14 0.38

4.38 3.58 3.97 2.22 0.39

0.81 0.62 0.67 0.38 0.07

14.34 12.12 14.32 7.98 1.42 $359.16 $23.71 $382.87

12.53 10.62 12.61 7.02 1.25 $316.21 $20.87 $337.08

3.79 3.21 3.81 2.12 0.38

$9.28/SF, 2007 Base $8.73/SF, 2007 Base

5 Gross Rent SubTotal Commercial Rent Tax Submetered Electric 6 7

$54.00

$93.18

$95.59

$99.68

$16.72

$95.56

No Mark-Up 3.90% of the Gross Rent

Direct Expenses

9 Additional Cost SubTotal

$3.53 $57.52 $98.61

$6.15 $99.33 $99.33

$6.33

$6.59

$1.12 $17.84

$6.31

10 Total | $/SF

$101.92 $101.92

$106.26 $106.26

$101.87

$107.01

Annualized Cost (Omitting 1X Costs)

Cash Flow | $M

7 Mos 2020

12 Mos

2 Mos 2024

45 Mos

2021

2022

2023

2025

2026

2027

Total

NPV @ 7.0% Annuity

4.8M

8.3M

8.4M

8.7M

1.5M

31.7M

27.9M

8.4M

Base Rent Free Rent

0.2M 0.2M

0.3M 0.3M

0.4M 0.3M

0.1M 0.1M

1.4M 1.2M 1.4M 0.8M 0.1M

1.2M 1.0M 1.2M 0.7M 0.1M

0.4M 0.3M

Operating Expense Real Estate Tax

15 Gross Rent SubTotal Commercial Rent Tax Submetered Electric 16 17

$5.1M 0.2M 0.1M 0.0M $0.3M $5.5M

$8.9M 0.4M 0.2M 0.0M $0.6M $9.5M

$9.1M 0.4M 0.2M 0.0M $0.6M $9.7M

$9.5M 0.4M 0.2M 0.0M $0.6M $10.1M $10.1M

$1.6M 0.1M 0.0M 0.0M $0.1M $1.7M

$34.2M

$30.1M

$9.1M 0.4M 0.2M 0.0M $0.6M $9.7M

Direct Expenses

19 Additional Cost SubTotal

$2.3M $36.5M

$2.0M $32.1M

20 Total | $M

Annualized Cost (Omitting 1X Costs)

$9.4M

$9.5M

$9.7M

$10.2M

Page 2 of 4

620 Eighth Avenue - E35 Remaining Obligation

Seyfarth Shaw | New York

Analysis Detail (Lessee Perspective)

Printed: May 1, 2020 at 6:43 PM

Key Assumptions

1X Costs Hard Construction Soft Costs

Electric is estimated based on initial rent invoices received. Analysis is truncated to Feb. 29, 2024 for common term comparison purposes.

- - - - - - - - -

Analysis Period Lease Type

Analysis Term 3 Yrs, 9 Mos

Discount Rate 7.00%/Yr.

Jun. 1, 2020 - Feb. 29, 2024

OpEx Base ReTax Base

Direct

$10.08/SF $10.48/SF $2.00/SF

4.535% Pro Rata 2017 4.508% Pro Rata 2017/18

FF&E IT & Security Moving

Total Rentable Area Lease Commencement Lease Expiration Analysis Truncation Rent Schedule Initial Free Rent: Lease Term

32,623 SF Jun. 1, 2020 3 Yrs, 9 Mos Feb. 29, 2024 Feb. 29, 2024

Submetered Electric Fixed Annual Increase

No Mark-Up

None None

TI Allowance

Commissions (1.5X)

$0.00/SF

$0K

Start

End

$/SF/Year

$/Year

Total

None

Tranche 1: Tranche 2: Tranche 3: Tranche 4: Tranche 5: Tranche 8:

$83.00/SF $90.00/SF

28 Mos. (1 - 28) 17 Mos. (29 - 45)

Jun. 1, 2020 Sep. 30, 2022 Oct. 1, 2022 Feb. 29, 2024

$2.7M $2.9M

Direct Expenses BID Tax

+8.4%

$0.35/SF

$11K

Total

$0.35/SF

$11K

Expense Projections 3.50%/Yr.

2020

2021

2022

2023

2024

2025

2026

2027

Operating Expense Real Estate Tax Submetered Electric Direct Expenses

11.98 11.15

12.40 11.43

12.84 11.72

13.29 12.01

13.75 12.31

14.23 12.61

14.73 12.93

15.25 13.26

3.50%/Yr. FMV Increase 3.50%/Yr. 3.50%/Yr.

2.00 0.35

2.07 0.36

2.14 0.37

2.22 0.38

2.30 0.40

2.38 0.41

2.46 0.43

2.54 0.44

Cash Flow | $/SF

7 Mos 2020

12 Mos

2 Mos 2024

45 Mos

2021

2022

2023

2025

2026

2027

Total

NPV @ 7.0% Annuity

Base Rent Free Rent

48.42

83.00

84.75

90.00

15.00

- - - - - - - - - - - - - - - - - - - -

321.17

282.69

85.43

Operating Expense Real Estate Tax

1.11 0.45 1.99 1.17 0.20

2.33 0.95 3.45 2.07 0.36

2.76 1.24 3.54 2.14 0.37

3.21 1.53 3.78 2.22 0.38

0.61 0.28 0.63 0.38 0.07

10.02 4.44 13.40 7.98 1.38 $335.63 $22.76 $358.39

8.72 3.84

2.64 1.16 3.56 2.12 0.37

$10.08/SF, 2017 Base $10.48/SF, 2017/18 Base

5 Gross Rent SubTotal Commercial Rent Tax Submetered Electric 6 7

$49.98

$86.28

$88.75

$94.74

$15.89

$295.26

$89.23

11.79 7.02 1.22

No Mark-Up 3.90% of the Gross Rent

Direct Expenses

9 Additional Cost SubTotal

$3.36 $53.34 $91.44

$5.87 $92.15 $92.15

$6.06 $94.80 $94.80

$6.38

$1.08 $16.98

$20.03 $315.28

$6.05 $95.28

10 Total | $/SF

$101.12 $101.12

$101.85

Annualized Cost (Omitting 1X Costs)

Cash Flow | $M

7 Mos 2020

12 Mos

2 Mos 2024

45 Mos

2021

2022

2023

2025

2026

2027

Total

NPV @ 7.0% Annuity

1.6M

2.7M

2.8M

2.9M

0.5M

10.5M

9.2M

2.8M

Base Rent Free Rent

0.0M 0.0M

0.1M 0.0M

0.0M 0.0M

0.3M 0.1M 0.4M 0.3M 0.0M

0.3M 0.1M

0.1M 0.0M

Operating Expense Real Estate Tax

15 Gross Rent SubTotal Commercial Rent Tax Submetered Electric 16 17

$1.6M 0.1M 0.0M 0.0M $0.1M $1.7M

$2.8M 0.1M 0.1M 0.0M $0.2M $3.0M

$2.9M 0.1M 0.1M 0.0M $0.2M $3.1M

$3.1M 0.1M 0.1M 0.0M $0.2M $3.3M

$0.5M 0.0M 0.0M 0.0M $0.0M $0.6M

$10.9M

$9.6M 0.4M 0.2M 0.0M $0.7M $10.3M

$2.9M 0.1M 0.1M 0.0M $0.2M $3.1M

Direct Expenses

19 Additional Cost SubTotal

$0.7M $11.7M

20 Total | $M

Annualized Cost (Omitting 1X Costs)

$3.0M

$3.1M

$3.3M

Page 3 of 4

620 Eighth Avenue - P28 Remaining Obligation

Seyfarth Shaw | New York

Analysis Detail (Lessee Perspective)

Printed: May 1, 2020 at 6:43 PM

Key Assumptions

1X Costs Hard Construction Soft Costs

Analysis is truncated to Feb. 29, 2024 for common term comparison purposes. Electric is estimated based on electric rent inclusion clause in lease.

- - - - - - - - -

Analysis Period Lease Type

Analysis Term 3 Yrs, 9 Mos

Discount Rate 7.00%/Yr.

Jun. 1, 2020 - Feb. 29, 2024

OpEx Base ReTax Base

Direct

N/A

0.000% Pro Rata

FF&E IT & Security Moving

Total Rentable Area Lease Commencement Lease Expiration Analysis Truncation Rent Schedule Initial Free Rent: Lease Term

1,650 SF

$8.73/SF Omitted

0.234% Pro Rata 2007

ERI

Jun. 1, 2020 3 Yrs, 9 Mos Feb. 29, 2024 Feb. 29, 2024

No Mark-Up

Fixed Annual Increase

None None

TI Allowance

Commissions (1.5X)

$0.00/SF

$0K

Start

End

$/SF/Year

$/Year

Total

None

Tranche 1: Tranche 2: Tranche 3: Tranche 4: Tranche 5: Tranche 8:

$52.64/SF $57.90/SF

27 Mos. (1 - 27) 18 Mos. (28 - 45)

Jun. 1, 2020 Aug. 31, 2022 Sep. 1, 2022 Feb. 29, 2024

$0.1M $0.1M

Direct Expenses

+10.0%

BID Tax

$0.36/SF

$1K

Total

$0.36/SF

$1K

Expense Projections 3.50%/Yr.

2020

2021

2022

2023

2024

2025

2026

2027

Operating Expense Real Estate Tax

11.44

11.72

12.01

12.31

12.62

12.93

13.26

13.59

3.50%/Yr. FMV Increase 0.00%/Yr. 3.50%/Yr.

ERI

Direct Expenses

0.36

0.37

0.38

0.39

0.41

0.42

0.44

0.45

Cash Flow | $/SF

7 Mos 2020

12 Mos

2 Mos 2024

45 Mos

2021

2022

2023

2025

2026

2027

Total

NPV @ 7.0% Annuity

Base Rent Free Rent

30.71

52.64

54.39

57.90

9.65

- - - - - - - - - - - - - - - - - - - -

205.29

180.61

54.58

- -

Operating Expense Real Estate Tax

1.64

2.99

3.28

3.58

0.62

12.12

10.62

3.21

$8.73/SF, 2007 Base

5 Gross Rent SubTotal Commercial Rent Tax 6

$32.34

$55.63

$57.68

$61.48

$10.27

$217.41

$191.22

$57.79

1.26

2.17

2.25

2.40

0.40

8.48

7.46

2.25

No Mark-Up 3.90% of the Gross Rent

ERI

Direct Expenses

0.21

0.37

0.38

0.39

0.07

1.42

1.25

0.38

9 Additional Cost SubTotal

$1.47 $33.81 $57.96

$2.54 $58.17 $58.17

$2.63 $60.31 $60.31

$2.79 $64.28 $64.28

$0.47 $10.74 $64.45

$9.90

$8.70

$2.63 $60.42

10 Total | $/SF

$227.31

$199.93

Annualized Cost (Omitting 1X Costs)

Cash Flow | $M

7 Mos 2020

12 Mos

2 Mos 2024

45 Mos

2021

2022

2023

2025

2026

2027

Total

NPV @ 7.0% Annuity

0.1M

0.0M

0.3M

0.1M

Base Rent Free Rent

- -

Operating Expense Real Estate Tax

0.0M

15 Gross Rent SubTotal Commercial Rent Tax 16

$0.1M 0.0M

$0.0M 0.0M

$0.4M 0.0M

$0.3M 0.0M

$0.1M 0.0M

ERI

0.0M

Direct Expenses

19 Additional Cost SubTotal

$0.0M $0.1M

$0.0M $0.0M

$0.0M $0.4M

$0.0M $0.3M

$0.0M $0.1M

20 Total | $M

Annualized Cost (Omitting 1X Costs)

$0.1M

Page 4 of 4

Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16-17 Page 18-19 Page 20-21 Page 22-23 Page 24-25 Page 26 Page 27 Page 28-29 Page 30-31 Page 32-33 Page 34-35 Page 36-37 Page 38-39 Page 40-41 Page 42-43 Page 44-45 Page 46-47 Page 48-49 Page 50-51 Page 52-53 Page 54-55 Page 56-57 Page 58-59 Page 60-61 Page 62-63 Page 64-65 Page 66-67 Page 68-69 Page 70-71 Page 72-73 Page 74-75 Page 76-77 Page 78-79 Page 80-81 Page 82-83 Page 84-85 Page 86-87 Page 88-89 Page 90-91 Page 92-93 Page 94-95 Page 96-97 Page 98-99 Page 100-101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108-109 Page 110 Page 111 Page 112 Page 113 Page 114 Page 115 Page 116 Page 117 Page 118 Page 119 Page 120 Page 121 Page 122 Page 123 Page 124 Page 125 Page 126 Page 127 Page 128 Page 129 Page 130 Page 131 Page 132 Page 133 Page 134 Page 135 Page 136 Page 137 Page 138 Page 139 Page 140 Page 141 Page 142 Page 143 Page 144 Page 145 Page 146 Page 147 Page 148 Page 149 Page 150 Page 151 Page 152 Page 153 Page 154 Page 155 Page 156 Page 157 Page 158 Page 159 Page 160 Page 161 Page 162 Page 163

Made with FlippingBook Publishing Software