Issuu

2019

GEORGIA PEACH STATE STUDIOS

TABLE OF CONTENTS

Animation 3 Georgia Peach State Studios 5 Financial Projection 17 Why Georgia? 35 Appraisal 45 Bios 48 Business Plan 61 Design Team 120 Contact 131

ANIMATION

GEORGIA PEACH STATE STUDIOS

ENTRANCE

OVERALL PARK VIEW

SOUND STAGE 1

SOUND STAGE COURTYARD

SOUND STAGE 3 AND 4

TWO-STORY OFFICE

SOUND STAGE 3

WAREHOUSE AND OFFICE

ENTRANCE

CLICK HERE

FINANCIAL PROJECTIONS

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS

Construction Costs LAND Land Cost - 60 Acres $41,667 per acre DIRECT HARD COSTS General Construction Stages- 3 @ 25,890 Stages- 3 @ 20,190 Production Offices- 6 @ 3,500 6 @ 3,000 Office building 40,000 Production Support Warehouse 50,000

BUDGET $2,500,00

$39,734,960

Site Work

$3,000,000

Architect, Engineering Fees

$1,100,000

SUB-TOTAL DIRECT HARD COSTS

$6,334,960

INDIRECT COSTS Furniture, Fixtures And Equipment

$400,000

SUB-TOTAL INDIRECT COSTS

$400,000

OTHER COSTS & FEES Legal, Title, and Closing

$250,000

SUB-TOTAL OTHER COSTS & FEES

$250,000

PROJECT COST

$46,984,000

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS

Proforma Numbers

GEORGIA PEACH STATE STUDIOS Proforma 10-May-19

DESCRIPTION

GRSF

Rental Rate

Proforma

Projected

Gross Income

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

100%

(Construction)

(Stabiliz ed)

GROSS REVENUE STAGES 1,2,3, (25,890 sf)

77,670

3.90

$3,634,956.00

$0.00

$3,089,712.60

$3,182,403.98

$3,277,876.10

$3,376,212.38

$3,477,498.75

$3,581,823.71

$3,689,278.43

$3,799,956.78

$3,913,955.48

$4,031,374.15

$4,152,315.37

$4,276,884.83

$4,405,191.38

$4,537,347.12

STAGES 4,5,6 (20,190 sf)

60,570

3.90

$2,834,676.00

$0.00

$2,409,474.60

$2,481,758.84

$2,556,211.60

$2,632,897.95

$2,711,884.89

$2,793,241.44

$2,877,038.68

$2,963,349.84

$3,052,250.34

$3,143,817.85

$3,238,132.38

$3,335,276.35

$3,435,334.64

$3,538,394.68

OFFICE BUILDING (40,000 sf)

40,000

2.90

$1,392,000.00

$0.00

$1,183,200.00

$1,218,696.00

$1,255,256.88

$1,292,914.59

$1,331,702.02

$1,371,653.08

$1,412,802.68

$1,455,186.76

$1,498,842.36

$1,543,807.63

$1,590,121.86

$1,637,825.52

$1,686,960.28

$1,737,569.09

PRODUCTION OFFICES (3500 & 3,000 sf) WAREHOUSE SPACE

GROSS RENTAL REVENUE

39,000

3.40

$1,591,200.00

$0.00

$1,352,520.00

$1,393,095.60

$1,434,888.47

$1,477,935.12

$1,522,273.18

$1,567,941.37

$1,614,979.61

$1,663,429.00

$1,713,331.87

$1,764,731.83

$1,817,673.78

$1,872,203.99

$1,928,370.11

$1,986,221.22

50,000

2.25

$1,350,000.00

$0.00

$1,147,500.00

$1,181,925.00

$1,217,382.75

$1,253,904.23

$1,291,521.36

$1,330,267.00

$1,370,175.01

$1,411,280.26

$1,453,618.67

$1,497,227.23

$1,542,144.05

$1,588,408.37

$1,636,060.62

$1,685,142.44

267,240

$10,802,832.00

$0.00

$9,182,407.20

$9,457,879.42

$9,741,615.80

$10,033,864.27

$10,334,880.20

$10,644,926.61

$10,964,274.40

$11,293,202.64

$11,631,998.72

$11,980,958.68

$12,340,387.44

$12,710,599.06

$13,091,917.03

$13,484,674.54

EQUIPMENT RENTAL

1.05

$246,750.00

$209,737.50

$216,029.63

$222,510.51

$229,185.83

$236,061.40

$243,143.25

$250,437.54

$257,950.67

$265,689.19

$273,659.87

$281,869.66

$290,325.75

$299,035.52

$308,006.59

GREEN SCREEN RENTAL

1.25

$293,750.00

$249,687.50

$257,178.13

$264,893.47

$272,840.27

$281,025.48

$289,456.25

$298,139.93

$307,084.13

$316,296.65

$325,785.55

$335,559.12

$345,625.89

$355,994.67

$366,674.51

PARKING

0.75

$176,250.00

$149,812.50

$154,306.88

$158,936.08

$163,704.16

$168,615.29

$173,673.75

$178,883.96

$184,250.48

$189,777.99

$195,471.33

$201,335.47

$207,375.54

$213,596.80

$220,004.71

OTHER (TEL-Power-A/C)

0.90

$211,500.00

$179,775.00

$185,168.25

$190,723.30

$196,445.00

$202,338.35

$208,408.50

$214,660.75

$221,100.57

$227,733.59

$234,565.60

$241,602.57

$248,850.64

$256,316.16

$264,005.65

TOTAL GROSS INCOME

11,731,082

9,971,420

10,270,562

10,578,679

10,896,040

11,222,921

11,559,608

11,906,397

12,263,588

12,631,496

13,010,441

13,400,754

13,802,777

14,216,860

14,643,366

EXPENSES PAYROLL

$1,498,209.30

$980,532.00

$1,498,209.30

$1,535,664.53

$1,574,056.15

$1,613,407.55

$1,653,742.74

$1,695,086.31

$1,737,463.46

$1,780,900.05

$1,825,422.55

$1,871,058.12

$1,917,834.57

$1,965,780.43

$2,014,924.94

$2,065,298.07

PROPERTY EXPENSES

$1,044,856.80

$0.00

$1,044,856.80

$1,070,978.22

$1,097,752.68

$1,125,196.49

$1,153,326.40

$1,182,159.56

$1,211,713.55

$1,242,006.39

$1,273,056.55

$1,304,882.97

$1,337,505.04

$1,370,942.67

$1,405,216.23

$1,440,346.64

GENERAL EXPENSES

$1,130,000.00

$1,035,000.00

$1,130,000.00

$1,158,250.00

$1,187,206.25

$1,216,886.41

$1,247,308.57

$1,278,491.28

$1,310,453.56

$1,343,214.90

$1,376,795.27

$1,411,215.16

$1,446,495.53

$1,482,657.92

$1,519,724.37

$1,557,717.48

TOTAL EXPENSES

NET OPERATING INCOME

3,673,066

$ -

8,058,016

(2,015,532)

DEPRECIATION

NET PROFIT/LOSS

2,015,532

Before Taxes

(2,015,532)

3,673,066

3,764,893

3,859,015

3,955,490

4,054,378

4,155,737

4,259,631

4,366,121

4,475,274

4,587,156

4,701,835

4,819,381

4,939,866

5,063,362

6,298,354

6,505,670

6,719,664

6,940,549

7,168,543

7,403,871

7,646,766

7,897,467

8,156,222

8,423,285

8,698,919

8,983,396

9,276,995

9,580,004

1,601,642

1,544,499

4,696,712

4,904,028

5,118,023

5,338,908

5,566,901

5,802,230

6,045,124

6,352,968

6,611,723

6,878,786

7,154,420

7,438,897

7,732,496

8,035,505

RETURN ON INVESTMENT CASH FROM OPERATIONS

CUMULATIVE CASH OPERATIONS

($2,015,532)

$6,298,354

$6,505,670

$6,719,664

$6,940,549

$7,168,543

$7,403,871

$7,646,766

$7,897,467

$8,156,222

$8,423,285

$8,698,919

$8,983,396

$9,276,995

$9,580,004

(2,015,532)

$4,282,822

$10,788,491

$17,508,155

$24,448,704

$31,617,247

$39,021,119

$46,667,885

$54,565,352

$62,721,573

$71,144,858

$79,843,777

$88,827,173

$98,104,168

$107,684,172

CAPITALIZATION

RATE AT 8%

100,725,199

78,729,420

81,320,869

83,995,801

86,756,864

89,606,788

92,548,390

95,584,575

98,718,339

101,952,772

$ 105,291,060

108,736,489

112,292,448

CAPITALIZATION

RATE AT 10%

80,580,159

62,983,536

65,056,695

67,196,641

69,405,491

71,685,430

74,038,712

76,467,660

78,974,671

CAPITALIZATION

RATE AT 12%

67,150,133

52,486,280

54,213,913

55,997,201

57,837,909

59,737,858

61,698,927

63,723,050

65,812,226

$ 115,962,433

119,750,048

81,562,218

84,232,848

86,989,191

89,833,959

92,769,946

95,800,038

67,968,515

70,194,040

72,490,993

74,861,632

77,308,289

79,833,365

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS GEORGIA PEACH STATE STUDIOS

Operating Expenses

10-May-19

COST/S. F.

EXPENSES

Projected

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

PROPERTY EXPENSES Elevator

$ 0.52

112,965

$ 115,789

118,684

121,651

124,692

127,809

131,005

$ 134,280

$ 137,637

141,078

144,604

148,220

151,925

155,723

Property Insurance

$ 0.25

66,810

70,192

71,947

73,746

75,589

77,479

83,437

85,522

87,661

89,852

92,098

68,480

79,416

81,401

Security

$ 2.05

547,842

$ 561,538

575,577

589,966

604,715

619,833

635,329

$ 651,212

$ 667,492

684,180

701,284

718,816

736,787

755,206

Janitorial/Maintenance

$ 0.30

80,172

84,231

86,336

88,495

90,707

92,975

100,124

102,627

105,193

107,822

110,518

82,176

95,299

97,682

Landscaping

$ 0.25

66,810

68,480

70,192

71,947

73,746

75,589

77,479

79,416

81,401

83,437

85,522

87,661

89,852

92,098

Miscellaneous

$ 0.20

53,448

54,784

56,154

57,558

58,997

60,472

61,983

63,533

65,121

66,749

68,418

70,128

71,882

73,679

Real Estate Taxes

Utilities

$ 0.25

Total Property Expenses

50,000

51,250

52,531

53,845

55,191

56,570

57,985

59,434

60,920

62,443

64,004

65,604

67,244

68,926

66,810

68,480

70,192

71,947

73,746

75,589

77,479

79,416

81,401

83,437

85,522

87,661

89,852

92,098

$ 1,044,857

$ 1,070,978

$ 1,097,753

$ 1,125,196

$ 1,153,326

$ 1,182,160

$ 1,211,714

$ 1,242,006

$ 1,273,057

$ 1,304,883

$ 1,337,505

$ 1,370,943

$ 1,405,216

$ 1,440,347

$ 153,750

$ 178,303

$ 182,760

GENERAL EXPENSES

General and Administrative

150,000

157,594

161,534

165,572

169,711

173,954

187,329

192,013

196,813

201,733

206,777

Advertising & Marketing

300,000

$ 307,500

315,188

323,067

331,144

339,422

347,908

$ 356,606

$ 365,521

374,659

384,025

393,626

403,467

413,553

Equipment Rental

100,000

$ 102,500

105,063

107,689

110,381

113,141

115,969

$ 118,869

$ 121,840

124,886

128,008

131,209

134,489

137,851

Other

50,000

51,250

52,531

53,845

55,191

56,570

57,985

Professional Fees

250,000

$ 256,250

262,656

269,223

275,953

282,852

289,923

$ 297,171

59,434

60,920

62,443

64,004

65,604

67,244

68,926

$ 304,601

312,216

320,021

328,022

336,222

344,628

Telephone

65,000

100,000

$ 102,500

105,063

107,689

110,381

113,141

115,969

$ 118,869

$ 121,840

124,886

128,008

131,209

134,489

137,851

Travel & Entertainment

120,000

180,000

$ 184,500

189,113

193,840

198,686

203,653

208,745

$ 213,963

$ 219,313

224,795

230,415

236,176

242,080

248,132

$ 1,035,000

$ 1,130,000

$ 1,158,250

$ 1,187,206

$ 1,216,886

$ 1,247,309

$ 1,278,491

$ 1,310,454

$ 1,343,215

$ 1,376,795

$ 1,411,215

$ 1,446,496

$ 1,482,658

$ 1,519,724

$ 1,557,717

$ 1,498,209

$ 1,535,665

$ 1,574,056

$ 1,613,408

$ 1,653,743

$ 1,695,086

$ 1,737,463

$ 1,780,900

$ 1,825,423

$ 1,871,058

$ 1,917,835

$ 1,965,780

$ 2,014,925

$ 2,065,298

Total General Expenses

PAYROLL Payroll TOTAL EXPENSES

267,240

980,532 $ 2,015,532

total s.f.

$ 3,673,066

$ 3,764,893

$ 3,859,015

$ 3,955,490

$ 4,054,378

$ 4,155,737

$ 4,259,631

$ 4,366,121

$ 4,475,274

$ 4,587,156

$ 4,701,835

$ 4,819,381

$ 4,939,866

$ 5,063,362

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS GEORGIA PEACH STATE STUDIOS

Payroll

10-May-19

Projected

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

$ 375,000

400,000

$ 400,000

400,000

74,932

76,805

78,725

80,693

82,711

84,778

Staffing President

350,000

$ 350,000

375,000

Assistant to President

60,000

61,500

63,038

64,613

66,229

67,884

69,582

71,321

Business Development

100,000

102,500

105,063

107,689

$ 110,381

113,141

115,969

118,869

$ 121,840

$ 124,886

128,008

131,209

134,489

$ 137,851

141,297

Controller

85,000

87,125

89,303

91,536

93,824

96,170

98,574

101,038

$ 103,564

$ 106,153

108,807

111,527

114,316

$ 117,173

120,103

Accounting Clerk

45,000

46,125

47,278

48,460

49,672

50,913

52,186

53,491

54,828

56,199

57,604

59,044

60,520

62,033

Accounting Clerk

45,000

46,125

47,278

48,460

49,672

50,913

52,186

53,491

54,828

56,199

57,604

59,044

60,520

62,033

HR Manager

76,875

78,797

80,767

82,786

84,856

86,977

89,151

91,380

93,665

96,006

98,406

100,867

$ 103,388

105,973

HR Assistant

45,000

46,125

47,278

48,460

49,672

50,913

52,186

53,491

54,828

56,199

57,604

59,044

60,520

62,033

Marketing Manager

90,000

92,250

94,556

96,920

99,343

101,827

104,372

106,982

$ 109,656

$ 112,398

115,208

118,088

121,040

$ 124,066

127,168

Marketing Assistant

45,000

46,125

47,278

48,460

49,672

50,913

52,186

53,491

54,828

56,199

57,604

59,044

60,520

62,033

63,584

Production Coordinator

65,000

66,625

68,291

69,998

71,748

73,542

75,380

77,265

79,196

81,176

83,205

85,286

87,418

89,603

91,843

Facility Services Manager

60,000

61,500

63,038

64,613

66,229

67,884

69,582

71,321

73,104

74,932

76,805

78,725

80,693

82,711

84,778

Facilities Maintenance 1

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

Custodian

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

Housekeeping

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

Production Assistant 1

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

58,780

Production Assistant 2

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

58,780

Receptionist

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

IT Manager

112,750

115,569

118,458

$ 121,419

124,455

127,566

130,755

$ 134,024

$ 137,375

140,809

144,330

147,938

$ 151,636

155,427

Tech Support

90,000

92,250

94,556

96,920

99,343

101,827

104,372

$ 106,982

$ 109,656

112,398

115,208

118,088

$ 121,040

124,066

Mechanic / Electrician 1

66,625

68,291

69,998

71,748

73,542

75,380

77,265

83,205

85,286

87,418

91,843

75,000 -

110,000 65,000

$ PAYROLL

Fringe Benefits - 26%

TOTAL PAYROLL

73,104

79,196 -

81,176 -

89,603 -

778,200

$ 1,189,055

$ 1,218,781

$ 1,249,251

$ 1,280,482

$ 1,312,494

$ 1,345,307

$ 1,378,939

$ 1,413,413

$ 1,448,748

$ 1,484,967

$ 1,522,091

$ 1,560,143

$ 1,599,147

$ 1,639,125

202,332

$ 332,925

$ 367,487

$ 376,674

$ 415,778

980,532

309,154

$ 1,498,209

316,883

$ 1,535,665

324,805

$ 1,574,056

$ 1,613,408

341,249

$ 1,653,743

349,780

$ 1,695,086

358,524

$ 1,737,463

$ 1,780,900

$ 1,825,423

386,091

$ 1,871,058

395,744

$ 1,917,835

405,637

$ 1,965,780

$ 2,014,925

426,173

$ 2,065,298

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS

Cash Flow - Perpetul GEORGIA PEACH STATE STUDIOS CASH FLOW (PERPETUAL)

COMPONENTS

BASE

YEAR-1

YEAR-2

TOTAL GROSS INCOME DIRECT EXPENSES PAYROLL

OPERATIVE EXPENSES GENERAL EXPENSES

TAXES

WORK CAPITAL

YEAR-8

YEAR-9

YEAR-10

Perpetuity

$11,222,920.72

$11,559,608.34

$11,906,396.59

$12,263,588.49

$12,631,496.14

$980,532.00

$2,543,066.10

$2,606,642.75

$2,671,808.82

$2,738,604.04

$2,807,069.14

$2,877,245.87

$2,949,177.02

$3,022,906.44

$3,098,479.10

$980,532.00

$1,498,209.30

$1,535,664.53

$1,574,056.15

$1,613,407.55

$1,653,742.74

$1,695,086.31

$1,737,463.46

$1,780,900.05

$1,825,422.55

$0.00

$1,044,856.80

$1,070,978.22

$1,097,752.68

$1,125,196.49

$1,153,326.40

$1,182,159.56

$1,211,713.55

$1,242,006.39

$1,273,056.55

-$980,532.00

$7,428,353.60

$7,663,919.54

$7,906,870.34

$8,157,435.49

$8,415,851.58

$8,682,362.47

$8,957,219.57

$9,240,682.05

$9,533,017.04

$1,035,000.00

$2,731,641.52

$2,759,891.52

$2,788,847.77

$2,818,527.93

$2,848,950.09

$2,880,132.80

$2,912,095.09

$2,887,713.57

$2,921,293.94

$1,035,000.00

$1,130,000.00

$1,158,250.00

$1,187,206.25

$1,216,886.41

$1,247,308.57

$1,278,491.28

$1,310,453.56

$1,343,214.90

$1,376,795.27

$0.00

$1,601,641.52

$1,544,498.67

-$2,015,532.00

$4,696,712.08

$4,904,028.01

$5,118,022.56

$5,338,907.56

$5,566,901.49

$5,802,229.67

$6,045,124.49

$6,352,968.48

$6,611,723.10

$0.00

-$2,015,532.00

$4,696,712.08

$4,904,028.01

$5,118,022.56

$5,338,907.56

$5,566,901.49

$5,802,229.67

$6,045,124.49

$6,352,968.48

$6,611,723.10

$0.00

-$2,015,532.00

$4,696,712.08

$4,904,028.01

$5,118,022.56

$5,338,907.56

$5,566,901.49

$5,802,229.67

$6,045,124.49

$6,352,968.48

$6,611,723.10

$0.00

$1,601,641.52

$1,544,498.67

-$2,015,532.00

$6,298,353.60

$6,505,669.54

$6,719,664.09

$6,940,549.09

$7,168,543.01

$7,403,871.19

$7,646,766.01

$7,897,467.14

$8,156,221.77

$51,939.67

$628,745.30

$647,195.83

$666,189.57

$685,742.58

$705,871.36

$726,592.92

$747,924.76

$769,884.90

$792,491.91

-$2,067,471.67

$5,669,608.30

$5,858,473.71

$6,053,474.51

$6,254,806.50

$6,462,671.65

$6,677,278.27

$6,898,841.25

$7,127,582.24

$7,363,729.85

+ DEPRECIATIONS

OPERATIVE CASH FLOW

YEAR-7

$10,896,039.53

NET PROFIT

YEAR-6

$10,578,679.16

FINANCIAL EXPENSES

PROFIT BEFORE TAXES

YEAR-5

$10,270,562.29

DEPRECIATION

OPERATIONAL PROFIT

YEAR-4

$9,971,419.70

PROPERTY EXPENSES

GROSS PROFIT

YEAR-3

ADITIONAL INVESTMENTS

FREE CASH FLOW

-$46,984,000.00

Discount Rate

9.50%

GDP

3.20%

IRR

15.71% $28,320,236.21

NPV

EBITDA

-$2,015,532.00

$6,298,353.60

$6,505,669.54

$6,719,664.09

$6,940,549.09

$7,168,543.01

$7,403,871.19

$7,646,766.01

$7,897,467.14

$8,156,221.77

CAPITALIZATION RATE AT

$58,708,900.95

$61,300,350.18

$63,975,282.06

$66,736,344.53

$69,586,268.59

$72,527,870.83

$75,564,056.10

$79,412,105.98

$82,646,538.74

CAPITALIZATION RATE AT

10%

$46,967,120.76

$49,040,280.15

$51,180,225.65

$53,389,075.63

$55,669,014.87

$58,022,296.66

$60,451,244.88

$63,529,684.78

$66,117,230.99

CAPITALIZATION RATE AT

12%

$39,139,267.30

$40,866,900.12

$42,650,188.04

$44,490,896.36

$46,390,845.73

$48,351,913.89

$50,376,037.40

$52,941,403.98

$55,097,692.49

$116,884,600.83

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS

Work Capital WORKAnalysis CAPITAL ANALYSIS D

YEAR-1

YEAR-2

YEAR-3

YEAR-4

YEAR-5

YEAR-6

YEAR-7

YEAR-8

YEAR-9

YEAR-10

YEAR-11

YEAR-12

YEAR-13

YEAR-14

YEAR-15

$82,830.08

$150,947.92

$154,721.62

$158,589.66

$162,554.40

$166,618.26

$170,783.72

$175,053.31

$179,429.64

$183,915.39

$188,513.27

$193,226.10

$198,056.75

$203,008.17

$208,083.38

$0.00

$546,379.16

$562,770.54

$579,653.65

$597,043.26

$614,954.56

$633,403.20

$652,405.29

$671,977.45

$692,136.78

$712,900.88

$734,287.90

$756,316.54

$779,006.04

$802,376.22

$1,369.86

$10,521.92

$10,784.97

$11,054.59

$11,330.95

$11,614.23

$11,904.58

$12,202.20

$12,507.25

$12,819.94

$13,140.43

$13,468.94

$13,805.67

$14,150.81

$14,504.58

CxP

$32,260.27

$79,103.70

$81,081.30

$83,108.33

$85,186.04

$87,315.69

$89,498.58

$91,736.05

$94,029.45

$96,380.18

$98,789.69

$101,259.43

$103,790.91

$106,385.69

$109,045.33

TOT-CT

$51,939.67

$628,745.30

$647,195.83

$666,189.57

$685,742.58

$705,871.36

$726,592.92

$747,924.76

$769,884.90

$792,491.91

$815,764.90

$839,723.52

$864,388.05

$889,779.33

$915,918.85

($51,939.67)

($628,745.30)

($647,195.83)

($666,189.57)

($685,742.58)

($705,871.36)

($726,592.92)

($747,924.76)

($769,884.90)

($792,491.91)

($815,764.90)

($839,723.52)

($864,388.05)

($889,779.33)

($915,918.85)

15 CASH 20 CxC 5 INV 15

NEC-CT

$6,422,578.81

NCT (12Y)

$8,078,067.22

NCT (15Y)

$10,748,153.45

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS Construction Costs- 20% Financing LAND Land Cost - 60 Acres $41,667 per acre DIRECT HARD COSTS General Construction Stages- 3 @ 25,890 Stages- 3 @ 20,190 Production Offices- 6 @ 3,500 6 @ 3,000 Office building 40,000 Production Support Warehouse 50,000

BUDGET $2,500,00

$39,734,960

Site Work

$3,000,000

Architect, Engineering Fees

$1,100,000

SUB-TOTAL DIRECT HARD COSTS

$6,334,960

INDIRECT COSTS Furniture, Fixtures And Equipment

$400,000

SUB-TOTAL INDIRECT COSTS

$400,000

OTHER COSTS & FEES Legal, Title, and Closing

$250,000

SUB-TOTAL OTHER COSTS & FEES

$250,000

PROJECT COST

$46,984,000

FINANCING - 20%

$9,396,8000

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS

GEORGIA PEACH STATE STUDIOS

Proforma Numbers

Proforma 10-May-19

Proforma DESCRIPTION

GRSF

Rental Rate

Projected

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

Gross Income

Year 1

Year 2

Year 3

100%

(Construction)

(Stabilized)

GROSS REVENUE STAGES 1,2,3, (25,890 sf)

77,670

3.90

$3,634,956.00

$0.00

$3,089,712.60

$3,182,403.98

$3,277,876.10

$3,376,212.38

$3,477,498.75

$3,581,823.71

$3,689,278.43

$3,799,956.78

$3,913,955.48

$4,031,374.15

$4,152,315.37

$4,276,884.83

$4,405,191.38

$4,537,347.12

STAGES 4,5,6 (20,190 sf)

60,570

3.90

$2,834,676.00

$0.00

$2,409,474.60

$2,481,758.84

$2,556,211.60

$2,632,897.95

$2,711,884.89

$2,793,241.44

$2,877,038.68

$2,963,349.84

$3,052,250.34

$3,143,817.85

$3,238,132.38

$3,335,276.35

$3,435,334.64

$3,538,394.68

OFFICE BUILDING (40,000 sf)

40,000

2.90

$1,392,000.00

$0.00

$1,183,200.00

$1,218,696.00

$1,255,256.88

$1,292,914.59

$1,331,702.02

$1,371,653.08

$1,412,802.68

$1,455,186.76

$1,498,842.36

$1,543,807.63

$1,590,121.86

$1,637,825.52

$1,686,960.28

$1,737,569.09

39,000

3.40

$1,591,200.00

$0.00

$1,352,520.00

$1,393,095.60

$1,434,888.47

$1,477,935.12

$1,522,273.18

$1,567,941.37

$1,614,979.61

$1,663,429.00

$1,713,331.87

$1,764,731.83

$1,817,673.78

$1,872,203.99

$1,928,370.11

$1,986,221.22

50,000

2.25

$1,350,000.00

$0.00

$1,147,500.00

$1,181,925.00

$1,217,382.75

$1,253,904.23

$1,291,521.36

$1,330,267.00

$1,370,175.01

$1,411,280.26

$1,453,618.67

$1,497,227.23

$1,542,144.05

$1,588,408.37

$1,636,060.62

$1,685,142.44

PRODUCTION OFFICES (3500 & 3,000 sf) WAREHOUSE SPACE

GROSS RENTAL REVENUE

267,240

$10,802,832.00

$0.00

$9,182,407.20

$9,457,879.42

$9,741,615.80

$10,033,864.27

$10,334,880.20

$10,644,926.61

$10,964,274.40

$11,293,202.64

$11,631,998.72

$11,980,958.68

$12,340,387.44

$12,710,599.06

$13,091,917.03

$13,484,674.54

EQUIPMENT RENTAL

1.05

$246,750.00

$209,737.50

$216,029.63

$222,510.51

$229,185.83

$236,061.40

$243,143.25

$250,437.54

$257,950.67

$265,689.19

$273,659.87

$281,869.66

$290,325.75

$299,035.52

$308,006.59

GREEN SCREEN RENTAL

1.25

$293,750.00

$249,687.50

$257,178.13

$264,893.47

$272,840.27

$281,025.48

$289,456.25

$298,139.93

$307,084.13

$316,296.65

$325,785.55

$335,559.12

$345,625.89

$355,994.67

$366,674.51

PARKING

0.75

$176,250.00

$149,812.50

$154,306.88

$158,936.08

$163,704.16

$168,615.29

$173,673.75

$178,883.96

$184,250.48

$189,777.99

$195,471.33

$201,335.47

$207,375.54

$213,596.80

$220,004.71

OTHER (TEL-Power-A/C)

0.90

$211,500.00

$179,775.00

$185,168.25

$190,723.30

$196,445.00

$202,338.35

$208,408.50

$214,660.75

$221,100.57

$227,733.59

$234,565.60

$241,602.57

$248,850.64

$256,316.16

$264,005.65

TOTAL GROSS INCOME

11,731,082

9,971,420

10,270,562

10,578,679

10,896,040

11,222,921

11,559,608

11,906,397

12,263,588

12,631,496

13,010,441

13,400,754

13,802,777

14,216,860

14,643,366

EXPENSES PAYROLL

$1,498,209.30

$980,532.00

$1,498,209.30

$1,535,664.53

$1,574,056.15

$1,613,407.55

$1,653,742.74

$1,695,086.31

$1,737,463.46

$1,780,900.05

$1,825,422.55

$1,871,058.12

$1,917,834.57

$1,965,780.43

$2,014,924.94

$2,065,298.07

PROPERTY EXPENSES

$1,044,856.80

$0.00

$1,044,856.80

$1,070,978.22

$1,097,752.68

$1,125,196.49

$1,153,326.40

$1,182,159.56

$1,211,713.55

$1,242,006.39

$1,273,056.55

$1,304,882.97

$1,337,505.04

$1,370,942.67

$1,405,216.23

$1,440,346.64

GENERAL EXPENSES

$1,130,000.00

$1,035,000.00

$1,130,000.00

$1,158,250.00

$1,187,206.25

$1,216,886.41

$1,247,308.57

$1,278,491.28

$1,310,453.56

$1,343,214.90

$1,376,795.27

$1,411,215.16

$1,446,495.53

$1,482,657.92

$1,519,724.37

$1,557,717.48

TOTAL EXPENSES

NET OPERATING INCOME

3,673,066

$ -

8,058,016

(2,015,532)

DEPRECIATION

NET PROFIT/LOSS

2,015,532

Before Taxes

(2,015,532)

3,673,066

3,764,893

3,859,015

3,955,490

4,054,378

4,155,737

4,259,631

4,366,121

4,475,274

4,587,156

4,701,835

4,819,381

4,939,866

5,063,362

6,298,354

6,505,670

6,719,664

6,940,549

7,168,543

7,403,871

7,646,766

7,897,467

8,156,222

8,423,285

8,698,919

8,983,396

9,276,995

9,580,004

1,601,642

1,544,499

4,696,712

4,904,028

5,118,023

5,338,908

5,566,901

5,802,230

6,045,124

6,352,968

6,611,723

6,878,786

7,154,420

7,438,897

7,732,496

8,035,505

RETURN ON INVESTMENT CASH FROM OPERATIONS

CUMULATIVE CASH OPERATIONS

($2,015,532)

$6,298,354

$6,505,670

$6,719,664

$6,940,549

$7,168,543

$7,403,871

$7,646,766

$7,897,467

$8,156,222

$8,423,285

$8,698,919

$8,983,396

$9,276,995

$9,580,004

(2,015,532)

$4,282,822

$10,788,491

$17,508,155

$24,448,704

$31,617,247

$39,021,119

$46,667,885

$54,565,352

$62,721,573

$71,144,858

$79,843,777

$88,827,173

$98,104,168

$107,684,172

CAPITALIZATION

RATE AT 8%

100,725,199

78,729,420

81,320,869

83,995,801

86,756,864

89,606,788

92,548,390

95,584,575

98,718,339

101,952,772

$ 105,291,060

108,736,489

112,292,448

CAPITALIZATION

RATE AT 10%

80,580,159

62,983,536

65,056,695

67,196,641

69,405,491

71,685,430

74,038,712

76,467,660

78,974,671

CAPITALIZATION

RATE AT 12%

67,150,133

52,486,280

54,213,913

55,997,201

57,837,909

59,737,858

61,698,927

63,723,050

65,812,226

$ 115,962,433

119,750,048

81,562,218

84,232,848

86,989,191

89,833,959

92,769,946

95,800,038

67,968,515

70,194,040

72,490,993

74,861,632

77,308,289

79,833,365

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS GEORGIA PEACH STATE STUDIOS

Operating Expenses

10-May-19

COST/S. F.

EXPENSES

Projected

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

131,005

$ 134,280

$ 137,637

PROPERTY EXPENSES Elevator

$ 0.52

Property Insurance

$ 0.25

Security

$ 2.05

Janitorial/Maintenance

$ 0.30

Landscaping

$ 0.25

Miscellaneous

$ 0.20

Real Estate Taxes

Utilities

$ 0.25

Total Property Expenses

112,965

$ 115,789

66,810

68,480

547,842

$ 561,538

80,172

66,810

53,448

50,000

66,810

$ 1,044,857

$ 1,070,978

$ 1,097,753

$ 1,125,196

$ 1,153,326

$ 1,182,160

$ 1,211,714

$ 1,242,006

$ 1,273,057

$ 1,304,883

$ 1,337,505

$ 1,370,943

$ 1,405,216

$ 1,440,347

118,684

121,651

124,692

70,192

575,577

82,176

68,480

54,784

51,250

68,480

127,809

71,947

589,966

73,746

604,715

75,589

77,479

81,401

619,833

635,329

$ 651,212

$ 667,492

84,231

70,192

86,336

71,947

88,495

90,707

92,975

95,299

73,746

75,589

77,479

79,416

56,154

52,531

57,558

53,845

58,997

60,472

61,983

63,533

55,191

56,570

57,985

59,434

70,192

71,947

73,746

75,589

77,479

79,416

141,078

144,604

148,220

83,437

684,180

97,682

81,401

65,121

60,920

81,401

151,925

85,522

701,284

87,661

718,816

100,124

83,437

102,627

85,522

66,749

62,443

68,418

64,004

83,437

85,522

155,723

89,852

92,098

736,787

755,206

105,193

107,822

110,518

87,661

89,852

92,098

70,128

71,882

73,679

65,604

67,244

68,926

87,661

89,852

92,098

GENERAL EXPENSES

General and Administrative

150,000

$ 153,750

157,594

161,534

165,572

169,711

173,954

$ 178,303

$ 182,760

187,329

192,013

196,813

201,733

206,777

Advertising & Marketing

300,000

$ 307,500

315,188

323,067

331,144

339,422

347,908

$ 356,606

$ 365,521

374,659

384,025

393,626

403,467

413,553

Equipment Rental

100,000

$ 102,500

105,063

107,689

110,381

113,141

115,969

$ 118,869

$ 121,840

124,886

128,008

131,209

134,489

137,851

Other

50,000

51,250

52,531

53,845

55,191

56,570

57,985

60,920

62,443

64,004

65,604

67,244

68,926

Professional Fees

250,000

$ 256,250

262,656

269,223

275,953

282,852

289,923

$ 297,171

$ 304,601

312,216

320,021

328,022

336,222

344,628

Telephone

65,000

100,000

$ 102,500

105,063

107,689

110,381

113,141

115,969

$ 118,869

$ 121,840

124,886

128,008

131,209

134,489

137,851

Travel & Entertainment

120,000

180,000

$ 184,500

189,113

193,840

198,686

203,653

208,745

$ 213,963

$ 219,313

224,795

230,415

236,176

242,080

248,132

$ 1,035,000

$ 1,130,000

$ 1,158,250

$ 1,187,206

$ 1,216,886

$ 1,247,309

$ 1,278,491

$ 1,310,454

$ 1,343,215

$ 1,376,795

$ 1,411,215

$ 1,446,496

$ 1,482,658

$ 1,519,724

$ 1,557,717

$ 1,498,209

$ 1,535,665

$ 1,574,056

$ 1,613,408

$ 1,653,743

$ 1,695,086

$ 1,737,463

$ 1,780,900

$ 1,825,423

$ 1,871,058

$ 1,917,835

$ 1,965,780

$ 2,014,925

$ 2,065,298

Total General Expenses

59,434

PAYROLL Payroll TOTAL EXPENSES

267,240

980,532 $ 2,015,532

total s.f.

$ 3,673,066

$ 3,764,893

$ 3,859,015

$ 3,955,490

$ 4,054,378

$ 4,155,737

$ 4,259,631

$ 4,366,121

$ 4,475,274

$ 4,587,156

$ 4,701,835

$ 4,819,381

$ 4,939,866

$ 5,063,362

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS GEORGIA PEACH STATE STUDIOS

Payroll

10-May-19

Projected

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

$ 375,000

400,000

$ 400,000

400,000

74,932

76,805

78,725

80,693

82,711

84,778

Staffing President

350,000

$ 350,000

375,000

Assistant to President

60,000

61,500

63,038

64,613

66,229

67,884

69,582

71,321

Business Development

100,000

102,500

105,063

107,689

$ 110,381

113,141

115,969

118,869

$ 121,840

$ 124,886

128,008

131,209

134,489

$ 137,851

141,297

Controller

85,000

87,125

89,303

91,536

93,824

96,170

98,574

101,038

$ 103,564

$ 106,153

108,807

111,527

114,316

$ 117,173

120,103

Accounting Clerk

45,000

46,125

47,278

48,460

49,672

50,913

52,186

53,491

54,828

56,199

57,604

59,044

60,520

62,033

Accounting Clerk

45,000

46,125

47,278

48,460

49,672

50,913

52,186

53,491

54,828

56,199

57,604

59,044

60,520

62,033

HR Manager

76,875

78,797

80,767

82,786

84,856

86,977

89,151

91,380

93,665

96,006

98,406

100,867

$ 103,388

105,973

HR Assistant

45,000

46,125

47,278

48,460

49,672

50,913

52,186

53,491

54,828

56,199

57,604

59,044

60,520

62,033

Marketing Manager

90,000

92,250

94,556

96,920

99,343

101,827

104,372

106,982

$ 109,656

$ 112,398

115,208

118,088

121,040

$ 124,066

127,168

Marketing Assistant

45,000

46,125

47,278

48,460

49,672

50,913

52,186

53,491

54,828

56,199

57,604

59,044

60,520

62,033

63,584

Production Coordinator

65,000

66,625

68,291

69,998

71,748

73,542

75,380

77,265

79,196

81,176

83,205

85,286

87,418

89,603

91,843

Facility Services Manager

60,000

61,500

63,038

64,613

66,229

67,884

69,582

71,321

73,104

74,932

76,805

78,725

80,693

82,711

84,778

Facilities Maintenance 1

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

Custodian

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

Housekeeping

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

Production Assistant 1

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

58,780

Production Assistant 2

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

58,780

Receptionist

41,600

42,640

43,706

44,799

45,919

47,067

48,243

49,449

50,686

51,953

53,252

54,583

55,947

57,346

IT Manager

112,750

115,569

118,458

$ 121,419

124,455

127,566

130,755

$ 134,024

$ 137,375

140,809

144,330

147,938

$ 151,636

155,427

Tech Support

90,000

92,250

94,556

96,920

99,343

101,827

104,372

$ 106,982

$ 109,656

112,398

115,208

118,088

$ 121,040

124,066

Mechanic / Electrician 1

66,625

68,291

69,998

71,748

73,542

75,380

77,265

83,205

85,286

87,418

91,843

75,000 -

110,000 65,000

$ PAYROLL

Fringe Benefits - 26%

TOTAL PAYROLL

73,104

79,196 -

81,176 -

89,603 -

778,200

$ 1,189,055

$ 1,218,781

$ 1,249,251

$ 1,280,482

$ 1,312,494

$ 1,345,307

$ 1,378,939

$ 1,413,413

$ 1,448,748

$ 1,484,967

$ 1,522,091

$ 1,560,143

$ 1,599,147

$ 1,639,125

202,332

$ 332,925

$ 367,487

$ 376,674

$ 415,778

980,532

309,154

$ 1,498,209

316,883

$ 1,535,665

324,805

$ 1,574,056

$ 1,613,408

341,249

$ 1,653,743

349,780

$ 1,695,086

358,524

$ 1,737,463

$ 1,780,900

$ 1,825,423

386,091

$ 1,871,058

395,744

$ 1,917,835

405,637

$ 1,965,780

$ 2,014,925

426,173

$ 2,065,298

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS Cash Flow - Perpetual

GEORGIA PEACH STATE STUDIOS CASH FLOW (PERPETUAL)

COMPONENTS

BASE

YEAR-1

YEAR-2

TOTAL GROSS INCOME DIRECT EXPENSES PAYROLL

OPERATIVE EXPENSES GENERAL EXPENSES

FINANCIAL EXPENSES

PROFIT BEFORE TAXES TAXES

WORK CAPITAL

YEAR-7

YEAR-8

YEAR-9

YEAR-10

Perpetuity

$9,971,419.70

$10,270,562.29

$10,578,679.16

$10,896,039.53

$11,222,920.72

$11,559,608.34

$11,906,396.59

$12,263,588.49

$12,631,496.14

$2,606,642.75

$2,671,808.82

$2,738,604.04

$2,807,069.14

$2,877,245.87

$2,949,177.02

$3,022,906.44

$3,098,479.10

$1,498,209.30

$1,535,664.53

$1,574,056.15

$1,613,407.55

$1,653,742.74

$1,695,086.31

$1,737,463.46

$1,780,900.05

$1,825,422.55

$0.00

$1,044,856.80

$1,070,978.22

$1,097,752.68

$1,125,196.49

$1,153,326.40

$1,182,159.56

$1,211,713.55

$1,242,006.39

$1,273,056.55

-$980,532.00

$7,428,353.60

$7,663,919.54

$7,906,870.34

$8,157,435.49

$8,415,851.58

$8,682,362.47

$8,957,219.57

$9,240,682.05

$9,533,017.04

$1,035,000.00

$2,731,641.52

$2,759,891.52

$2,788,847.77

$2,818,527.93

$2,848,950.09

$2,880,132.80

$2,912,095.09

$2,887,713.57

$2,921,293.94

$1,035,000.00

$1,130,000.00

$1,158,250.00

$1,187,206.25

$1,216,886.41

$1,247,308.57

$1,278,491.28

$1,310,453.56

$1,343,214.90

$1,376,795.27

$0.00

$1,601,641.52

$1,544,498.67

-$2,015,532.00

$4,696,712.08

$4,904,028.01

$5,118,022.56

$5,338,907.56

$5,566,901.49

$5,802,229.67

$6,045,124.49

$6,352,968.48

$6,611,723.10

$554,929.93

$530,412.86

$504,391.34

$476,773.05

$447,460.00

$416,348.20

$383,327.27

$348,280.06

$311,082.22

$271,601.80

-$2,570,461.93

$4,166,299.22

$4,399,636.67

$4,641,249.51

$4,891,447.56

$5,150,553.29

$5,418,902.40

$5,696,844.43

$6,041,886.26

$6,340,121.30

$0.00

-$2,570,461.93

$4,166,299.22

$4,399,636.67

$4,641,249.51

$4,891,447.56

$5,150,553.29

$5,418,902.40

$5,696,844.43

$6,041,886.26

$6,340,121.30

$0.00

$1,601,641.52

$1,544,498.67

-$2,570,461.93

$5,767,940.74

$6,001,278.20

$6,242,891.04

$6,493,089.08

$6,752,194.81

$7,020,543.92

$7,298,485.95

$7,586,384.92

$7,884,619.97

$51,939.67

$628,745.30

$647,195.83

$666,189.57

$685,742.58

$705,871.36

$726,592.92

$747,924.76

$769,884.90

$792,491.91

-$2,622,401.60

$5,139,195.44

$5,354,082.37

$5,576,701.46

$5,807,346.50

$6,046,323.45

$6,293,951.00

$6,550,561.20

$6,816,500.02

$7,092,128.06

+ DEPRECIATIONS

OPERATIVE CASH FLOW

YEAR-6

$2,543,066.10

NET PROFIT

YEAR-5

$980,532.00

DEPRECIATION

OPERATIONAL PROFIT

YEAR-4

$980,532.00

PROPERTY EXPENSES

GROSS PROFIT

YEAR-3

ADITIONAL INVESTMENTS

FREE CASH FLOW

-$46,984,000.00

Discount Rate

9.50%

GDP

3.20%

IRR

14.78% $23,922,193.20

NPV

EBITDA

-$2,015,532.00

$6,298,353.60

$6,505,669.54

$6,719,664.09

$6,940,549.09

$7,168,543.01

$7,403,871.19

$7,646,766.01

$7,897,467.14

$8,156,221.77

CAPITALIZATION RATE AT

$58,708,900.95

$61,300,350.18

$63,975,282.06

$66,736,344.53

$69,586,268.59

$72,527,870.83

$75,564,056.10

$79,412,105.98

$82,646,538.74

CAPITALIZATION RATE AT

10%

$46,967,120.76

$49,040,280.15

$51,180,225.65

$53,389,075.63

$55,669,014.87

$58,022,296.66

$60,451,244.88

$63,529,684.78

$66,117,230.99

CAPITALIZATION RATE AT

12%

$39,139,267.30

$40,866,900.12

$42,650,188.04

$44,490,896.36

$46,390,845.73

$48,351,913.89

$50,376,037.40

$52,941,403.98

$55,097,692.49

$112,573,461.20

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS

GEORGIA PEACH STATE STUDIOS FINANCIAL EXPENSES

Financial Expenses

AMOUNT

$9,396,800

RATE

TIMING

6.00%

15.0 YEARS

563808

BALANCE

INTEREST

CAPITAL

PAYMENT 6%

$238,617

FINANCIAL EXP

CAPITAL

$9,544,678

$9,396,800 QUARTER-1

$9,299,135

$ 140,952

$97,665

$238,617

QUARTER-2

$9,200,005

$ 139,487

$99,130

$238,617

QUARTER-3

$9,099,388

$ 138,000

$100,617

$238,617

QUARTER-4

$8,997,262

$ 136,491

$102,126

$238,617

QUARTER-1

$8,893,604

$ 134,959

$103,658

$238,617

QUARTER-2

$8,788,391

$ 133,404

$105,213

$238,617

QUARTER-3

$8,681,600

$ 131,826

$106,791

$238,617

QUARTER-4

$8,573,207

$ 130,224

$108,393

$238,617

QUARTER-1

$8,463,188

$ 128,598

$110,019

$238,617

QUARTER-2

$8,351,519

$ 126,948

$111,669

$238,617

QUARTER-3

$8,238,175

$ 125,273

$113,344

$238,617

QUARTER-4

$8,123,131

$ 123,573

$115,044

$238,617

QUARTER-1

$8,006,361

$ 121,847

$116,770

$238,617

QUARTER-2

$7,887,839

$ 120,095

$118,522

$238,617

QUARTER-3

$7,767,540

$ 118,318

$120,299

$238,617

QUARTER-4

$7,645,436

$ 116,513

$122,104

$238,617

$554,930

$399,538

$530,413

$424,055

$504,391

$450,076

$476,773

$477,695

QUARTER-4

$8,573,207

$ 130,224

$108,393

$238,617

QUARTER-1

$8,463,188

$ 128,598

$110,019

$238,617

$ 126,948

$111,669

$238,617

$ 125,273

$113,344

$238,617

GEORGIA PEACH STATE STUDIOS QUARTER-2 $8,351,519

FINANCIAL PROJECTIONS QUARTER-3 $8,238,175 Financial Expenses

QUARTER-4

$8,123,131

$ 123,573

$115,044

$238,617

QUARTER-1

$8,006,361

$ 121,847

$116,770

$238,617

QUARTER-2

$7,887,839

$ 120,095

$118,522

$238,617

QUARTER-3

$7,767,540

$ 118,318

$120,299

$238,617

QUARTER-4

$7,645,436

$ 116,513

$122,104

$238,617

QUARTER-1

$7,521,500

$ 114,682

$123,935

$238,617

QUARTER-2

$7,395,706

$ 112,823

$125,794

$238,617

QUARTER-3

$7,268,025

$ 110,936

$127,681

$238,617

QUARTER-4

$7,138,428

$ 109,020

$129,597

$238,617

QUARTER-1

$7,006,887

$ 107,076

$131,541

$238,617

QUARTER-2

$6,873,374

$ 105,103

$133,514

$238,617

QUARTER-3

$6,737,857

$ 103,101

$135,516

$238,617

QUARTER-4

$6,600,308

$ 101,068

$137,549

$238,617

QUARTER-1

$6,460,696

$ 99,005

$139,612

$238,617

QUARTER-2

$6,318,990

$ 96,910

$141,707

$238,617

QUARTER-3

$6,175,157

$ 94,785

$143,832

$238,617

QUARTER-4

$6,029,168

$ 92,627

$145,990

$238,617

QUARTER-1

$5,880,988

$ 90,438

$148,179

$238,617

QUARTER-2

$5,730,586

$ 88,215

$150,402

$238,617

QUARTER-3

$5,577,928

$ 85,959

$152,658

$238,617

QUARTER-4

$5,422,980

$ 83,669

$154,948

$238,617

QUARTER-1

$5,265,708

$ 81,345

$157,272

$238,617

QUARTER-2

$5,106,076

$ 78,986

$159,631

$238,617

QUARTER-3

$4,944,051

$ 76,591

$162,026

$238,617

QUARTER-4

$4,779,594

$ 74,161

$164,456

$238,617

QUARTER-1

$4,612,671

$ 71,694

$166,923

$238,617

QUARTER-2

$4,443,244

$ 69,190

$169,427

$238,617

QUARTER-3

$4,271,276

$ 66,649

$171,968

$238,617

QUARTER-4

$4,096,728

$ 64,069

$174,548

$238,617

QUARTER-1

$3,919,562

$ 61,451

$177,166

$238,617

QUARTER-2

$3,739,739

$ 58,793

$179,824

$238,617

QUARTER-3

$3,557,218

$ 56,096

$182,521

$238,617

$530,413

$424,055

$504,391

$450,076

$476,773

$477,695

$447,460

$507,008

$416,348

$538,120

$383,327

$571,141

$348,280

$606,188

$311,082

$643,386

$271,602

$682,866

QUARTER-2

$5,106,076

$ 78,986

$159,631

$238,617

QUARTER-3

$4,944,051

$ 76,591

$162,026

$238,617

QUARTER-4

$4,779,594

$ 74,161

$164,456

$238,617

$ 71,694

$166,923

$238,617

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS QUARTER-1 $4,612,671 Financial Expenses

QUARTER-2

$4,443,244

$ 69,190

$169,427

$238,617

QUARTER-3

$4,271,276

$ 66,649

$171,968

$238,617

QUARTER-4

$4,096,728

$ 64,069

$174,548

$238,617

QUARTER-1

$3,919,562

$ 61,451

$177,166

$238,617

QUARTER-2

$3,739,739

$ 58,793

$179,824

$238,617

QUARTER-3

$3,557,218

$ 56,096

$182,521

$238,617

QUARTER-4

$3,371,959

$ 53,358

$185,259

$238,617

QUARTER-1

$3,183,922

$ 50,579

$188,038

$238,617

QUARTER-2

$2,993,064

$ 47,759

$190,858

$238,617

QUARTER-3

$2,799,343

$ 44,896

$193,721

$238,617

QUARTER-4

$2,602,716

$ 41,990

$196,627

$238,617

QUARTER-1

$2,403,139

$ 39,041

$199,576

$238,617

QUARTER-2

$2,200,570

$ 36,047

$202,570

$238,617

QUARTER-3

$1,994,961

$ 33,009

$205,608

$238,617

QUARTER-4

$1,786,269

$ 29,924

$208,693

$238,617

QUARTER-1

$1,574,446

$ 26,794

$211,823

$238,617

QUARTER-2

$1,359,445

$ 23,617

$215,000

$238,617

QUARTER-3

$1,141,220

$ 20,392

$218,225

$238,617

QUARTER-4

$919,722

$ 17,118

$221,499

$238,617

QUARTER-1

$694,900

$ 13,796

$224,821

$238,617

QUARTER-2

$466,707

$ 10,424

$228,193

$238,617

QUARTER-3

$235,091

$ 7,001

$231,616

$238,617

QUARTER-4

$ 3,526

$235,091

$238,617

QUARTER-1

$238,617

QUARTER-2

$238,617

QUARTER-3

$238,617

QUARTER-4

$238,617

QUARTER-1

$238,617

QUARTER-2

$238,617

QUARTER-3

$238,617

QUARTER-4

$238,617

QUARTER-1

$238,617

QUARTER-2

$238,617

$311,082

$643,386

$271,602

$682,866

$229,699

$724,769

$185,224

$769,244

$138,021

$816,447

$87,921

$866,547

$34,746

$919,722

$954,468

QUARTER-4

$ 3,526

$235,091

$238,617

QUARTER-1

$238,617

GEORGIA PEACH QUARTER-2

STATE STUDIOS

QUARTER-3 $0 FINANCIAL PROJECTIONS

Financial Expenses

QUARTER-4

$238,617

QUARTER-1

$238,617

QUARTER-2

$238,617

QUARTER-3

$238,617

QUARTER-4

$238,617

QUARTER-1

$238,617

QUARTER-2

$238,617

QUARTER-3

$238,617

QUARTER-4

$238,617

QUARTER-1

$238,617

QUARTER-2

$238,617

QUARTER-3

$238,617

QUARTER-4

$238,617

QUARTER-1

$238,617

QUARTER-2

$238,617

QUARTER-3

$238,617

QUARTER-4

$238,617

$34,746

$919,722

$954,468

32 $0

$954,468

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS

FINANCIAL EXPENSES

Financial Expenses

YEAR-1

YEAR-2

YEAR-3

YEAR-4

YEAR-5

YEAR-6

YEAR-7

YEAR-8

YEAR-9

YEAR-10

YEAR-11

YEAR-12

YEAR-13

YEAR-14

YEAR-15

FINANCIAL EXPENSES

$554,930

$530,413

$504,391

$476,773

$447,460

$416,348

$383,327

$348,280

$311,082

$271,602

$229,699

$185,224

$138,021

$87,921

$34,746

CAPITAL

$399,538

$424,055

$450,076

$477,695

$507,008

$538,120

$571,141

$606,188

$643,386

$682,866

$724,769

$769,244

$816,447

$866,547

$919,722

TOT

$954,468

$229,699

-$539,545

GEORGIA PEACH STATE STUDIOS

FINANCIAL PROJECTIONS

Work Capital WORKAnalysis CAPITAL ANALYSIS D CASH CxC INV CxP

15 20 5 15

TOT-CT NEC-CT

$6,422,578.81

NCT (12Y)

$8,078,067.22

NCT (15Y)

$10,748,153.45

YEAR-1

YEAR-2

YEAR-3

YEAR-4

YEAR-5

YEAR-6

YEAR-7

YEAR-8

YEAR-9

YEAR-10

YEAR-11

YEAR-12

YEAR-13

YEAR-14

YEAR-15

$82,830.08

$150,947.92

$154,721.62

$158,589.66

$162,554.40

$166,618.26

$170,783.72

$175,053.31

$179,429.64

$183,915.39

$188,513.27

$193,226.10

$198,056.75

$203,008.17

$208,083.38

$0.00

$546,379.16

$562,770.54

$579,653.65

$597,043.26

$614,954.56

$633,403.20

$652,405.29

$671,977.45

$692,136.78

$712,900.88

$734,287.90

$756,316.54

$779,006.04

$802,376.22

$1,369.86

$10,521.92

$10,784.97

$11,054.59

$11,330.95

$11,614.23

$11,904.58

$12,202.20

$12,507.25

$12,819.94

$13,140.43

$13,468.94

$13,805.67

$14,150.81

$14,504.58

$32,260.27

$79,103.70

$81,081.30

$83,108.33

$85,186.04

$87,315.69

$89,498.58

$91,736.05

$94,029.45

$96,380.18

$98,789.69

$101,259.43

$103,790.91

$106,385.69

$109,045.33

$51,939.67

$628,745.30

$647,195.83

$666,189.57

$685,742.58

$705,871.36

$726,592.92

$747,924.76

$769,884.90

$792,491.91

$815,764.90

$839,723.52

$864,388.05

$889,779.33

$915,918.85

($51,939.67)

($628,745.30)

($647,195.83)

($666,189.57)

($685,742.58)

($705,871.36)

($726,592.92)

($747,924.76)

($769,884.90)

($792,491.91)

($815,764.90)

($839,723.52)

($864,388.05)

($889,779.33)

($915,918.85)

WHY GEORGIA?

GEORGIA PEACH STATE STUDIOS

WHY FILM IN GEORGIA

Why Georgia? • Georgia has one of the best film incentive programs in the country. • Georgia has a huge variety of locations to film in, including the urban jungle of downtown Atlanta, the world’s largest aquarium, the world’s largest inland swamp, the Appalachian Mountains which often get snow in the winter months, Stone Mountain, over 100 mile coastline, major league sports arena, concert arenas, and more than 30 rivers. • A large and talented crew base lives in Georgia. • Georgia has a large permanent infrastructure for the film industry. • Atlanta has the world’s busiest airport. • Georgia hosted more feature film productions in 2016 than any other market. • The State of Georgia has been steadfast in supporting the film industry.

GEORGIA PEACH STATE STUDIOS

TAX INCENTIVES

Georgia Film Tax Credit Georgia production incentives provide up to 30% of your Georgia production expenditures in transferable tax credits. The program is available for qualifying projects, including feature films, television series, commercials, music videos, animation, game development, and post-production. With one of the industry’s most competitive production incentive programs, the Georgia Film, Music & Digital Entertainment Office can help deliver production to Georgia Peach State Studios. State Tax Credit Benefits Highlights from the Georgia Entertainment Industry Investment Act include the following: • 20 percent base transferable tax credit. • 10 percent Georgia Entertainment Promotion (GEP) uplift can be earned by including an embedded Georgia logo on approved projects.

• $500,000 minimum spend to qualify. • No limits or caps on Georgia spend, no suset clause. • Both resident and non-resident workers’ payrolls and FICA, SUI, FU qualify. • No salary cap on individuals paid by 1099, personal service contract or loan. • Production expenditures must be made in Georgia to qualify from a Georgia vendor. • Travel and insurance qualify if purchased through a Georgia agency or company. • Original music scoring eligible for projects produced in Georgia qualify • Post-production of Georgia-filmed movies and television projects qualify if post is done in Georgia. • Development costs, promotion, marketing, license fees, and right story fees do not qualify.

GEORGIA PEACH STATE STUDIOS

GEORGIA LEGISLATURE

Film and television production companies that specialize in post-production work would qualify for state tax credits under legislation that cleared the Georgia House of Representatives Friday. The bill, which passed 158-3 and now moves to the state Senate, would provide a 20 percent tax credit for post-production companies that have a Georgia payroll of at least $250,000 and spend at least $500,000 during a taxable year. The credit will increase to 30 percent if the production is created exclusively in Georgia. The credit would be capped at $5 million in 2017, $10 million in 2018 and $15 million from 2019 to 2022. No single company could receive more than 20 percent of the total statewide credit available in a given year.

While the entertainment industry tax credit the state created in 2008 has been widely praised for the exponential growth in film and TV production in Georgia in recent years, entertainment executives have complained that the lack of a post-production tax credit has kept post-production activity lagging. House Bill 199 also would make it easier for video gaming companies to qualify for state tax credits. It will reduce the total Georgia payroll requirement to be eligible for credit from $500,000 to $250,000 if the gaming company makes a base investment of at least $500,000 during a two-year period.

GEORGIA PEACH STATE STUDIOS

CUSTOMERS

The reality of the Georgia feature film, tv and digital market base is that it is a robust and growing market. In 2017, the governor’s office said that 320 television and film projects were shot in Georgia in fiscal 2017 and delivered an economic impact of $9.5B. With additional infrastructures, such as Georgia Peach State Studios, Georgia can accommodate larger tentpole productions with more capacity for multiple film projects.

Customer Base Will Include But Not Limited To: • Movie Studios (Paramount, Universal Pictures, etc.) • Broadcast Networks (ABC, FOX, etc.) • Cable Networks (TBS, AMC, etc.) • SVOD Platforms (Netflix, Hulu, etc.) • Gaming Companies (Activision-Blizzard, Rockstar Games) • Independent Producers

GEORGIA PEACH STATE STUDIOS

COMPETITION

Pinewood Atlanta Studios • 11 sound stages in the United States • Disney/Marvel only client due to the amount of production (Ant-Man, Captain American, Avengers, etc.) • 15 minutes from future site of Peach State Studios Metro Atlanta Studios • 6 Sound stages • 17 minutes from the future site of Peach State Studios Sony Screen Gems • 10-soundstages Mailing Avenue Stageworks • One 85,000 square foot facility Atlanta Filmworks Studios • One sound stage 60,000 square foot facility

Eagle Rock Studios • 4 sound stages Tyler Perry Atlanta Studios • 14 sound stages • Sound stages stay booked with Tyler Perry Produced properties

GEORGIA PEACH STATE STUDIOS

MARKET ANALYSIS

41 Multiple movies and television productions are underway in Georgia, such as; Marvel’s Avengers, and Ant-Man and The Wasp, The Walking Dead, Oprah Winfrey Greenleaf, and Godzilla: King of Monsters, only to name a few. Georgia just wrapped on multiple productions such as Dwayne “The Rock” Johnson’s Rampage, and other productions. Overall, Georgia’s film industry is expanding and has no plans of slowing down in order to accommodate the major productions coming to this area. These projects are an example of how more movie and TV productions are continuing to come to metro Atlanta thanks to the state’s tax incentives for the TV and movie industry. Film production in Georgia is primarily focused in the Atlanta, GA and its immediate surrounding cities. Georgia Peach State Studios will be in the heart of the sound stage community which presents an enormous opportunity to capitalize on the under-served movie making community

who are consistently looking for state of the art production facilities. Georgia-lensed feature film and television productions generated an economic impact of more than $9.5B during the fiscal year 2017. The 320 feature film and television productions shot in Georgia represent $2.75B in direct spending in the state. This economic impact is driven by Georgia’s 30% Film Tax Incentive. “Georgia’s film industry is on a steady rise over the years and now ranks number one in feature film productions., “Georgia Department of Economic Development (GDEcD) Commissioner Chris Carr states

“As long as we continue to deepen our crew base and add even more studios and businesses to support the industry, Georgia is ensuring its place in the film industry well into the future.” In addition to the increase in production expenditures, Georgia has experienced enormous infrastructure and business growth, including the opening of Atlanta Metro Studios in Union City and a significant expansion at Pinewood Atlanta Studios in Fayetteville. More than 130 new businesses have relocated or expanded in Georgia to support this burgeoning industry which is creating jobs for Georgians as well as economic opportunities for communities and small businesses.

GEORGIA PEACH STATE STUDIOS

TRENDS

42 Georgia Production Industry Georgia’s Film and Television production business continues to trend upwards.

Georgia Television and Film Production YEAR

ECONOMIC IMPACT

NUMBER OF FILM & TV PRODUCTIONS

2014 2015 2016 2017

$5.1 Billion $6 Billion $7 Billion $9.5 Billion

158 248 245 320

Overall Movie Trends The global film industry shows healthy projections for the coming years, as the global box office revenue is forecast to increase from about $38B in 2016 to nearly $50B in 2020. The U.S. is the third largest film market in the world in terms of tickets sold per year, only behind China and India. More than 1.2 billion movie tickets were sold in the U.S. in 2015. There are about 5,800 cinema sites in the U.S. as of 2015. About 14 percent of Americans go to the movies about once a month, seven percent go see movies in the movie theater two to three times a month, whereas 37 percent go a few times a year. This is a considerable amount taking into account 53 percent of American adults prefer watching movies at home. Film entertainment is big business in the United States. It is expected that the film entertainment business will generate $35.3B in revenue by 2019. Among film studios, Universal achieved the most in 2015 – it held the largest market share, about 21 percent, and generated the

highest box office revenue, $2.4B. Buena Vista accounted for nearly 20 percent of the total box office gross in North America, and Warner Bros held about 14 percent of the market share. Warner Bros, Universal, and Miramax have all been awarded the prize of “Best Picture” in the Academy Awards four times each. In 2015, about 691 movies were released in North America, with drama being the most common genre amongst movie releases in the region. Up until 2015, the most successful movie franchise in the region was the Marvel Cinematic Universe, which generated about $3.6B of box office revenue in North America alone. Movies like “Iron Man”, “Marvel’s The Avengers”, “Spider-Man”, and “The Incredible Hulk” are a few examples of franchise films. As of June 2016, “Star Wars: The Force Awakens” was the highest grossing 3D movie in North America, with a lifetime gross of around $936M.

GEORGIA PEACH STATE STUDIOS

The property is located at 2260 State Highway 138 SW, Fayetteville, Fayette County, Georgia 30214, consisting of a total of 59.0 acres. 24.03 acres of vacant area is currently zoned for General Business for Movie Studios. The collective total appraised value of the 59.0 acres, according to March 25, 2013, Summary Report Real Estate Appraisal, conducted by Gerald Bryant & Company, LLC is $4,486,750.00. The 24.03 acres of vacant area that is zoned for General Business is valued at $3.6M, and the 35.47 acres of vacant zoned as Residential - 40 is valued at $25,000.00 per acre with a value of $886,750. The total asking price for the property is $2.5M. Located 6 miles from Hartsfield Jackson International Airport, the busiest airport in the world.

Due to the lack of studio infrastructure to serve Georgiaâ€™s Film and TV production industry, a friendly competition strategic alliance has been created amongst the top tier sound stages under the Georgia Studio & Infrastructure Alliance. The mission of the Georgia Studio & Infrastructure Alliance is to speak with one voice to represent studios and service companies at the state level, Georgia General Assembly, the Georgia Department of Economic Development, and all other state entities dealing with the regulation of the entertainment industry. Studios that are part of this alliance are EUE/ Screen Gems Atlanta, Tyler Perry Studios, Stage Works 6 Studios, Triple Horse Studio, Eagle Rock Studios, Atlanta FiIlmworks Studio, Third Rail Studios, and Pinewood Atlanta Studios.

GEORGIA PEACH STATE STUDIOS

THE SITE

Land and site characteristics for additional land to be purchased for growth adjacent to site: • 25 acres residential to accommodate growth plus an additional 25 moving towards HWY 314 • Supports expansion • The property is located within minutes of Atlanta International Airport, Pinewood Atlanta Studios, AMC Studios, and Metro Atlanta Studios • The property will be secured to ensure safety, privacy. • A short 12 minute/ 8 mile drive to Hartsfield–Jackson Atlanta International Airport (ATL)

• 25 acres residential to accommodate growth plus an additional 25 moving towards HWY 314 • Supports expansion • The property is located within minutes of Atlanta International Airport, Pinewood Atlanta Studios, AMC Studios, and Metro Atlanta Studios • The property will be secured to ensure safety, privacy. • A short 12 minute/ 8 mile drive to Hartsfield–Jackson Atlanta International Airport (ATL)

APPRAISAL

GEORGIA PEACH STATE STUDIOS

APPRAISAL

46 Summary Report Real Estate Appraisal

Hypothetical Conditions: • None

24.03 Acres of GB-Zoned Vacant Land

Extraordinary Assumptions: • There are no Extraordinary Assumptions for this appraisal.

2260 State Highway 138 SW, Fayetteville, Fayette County, Georgia, 30214 As of March 25, 2013: Prepared For Brooks Real Estate Development, Inc. Woodstock, Georgia 30107 Prepared by GERALD BRYANT & COMPANY, LLC Gerald Bryant, MAI, SRA, CBA, CCIM, JD, Georgia-978 File Name: 24 Acres-Commercial

Based on the appraisal described in the accompanying report, subject to the Limiting Conditions and Assumptions, Extraordinary Assumptions and Hypothetical Conditions (if any), we have made the following value conclusion(s): Current As Is Market Value: The “As Is” market value of the Fee Simple estate of the property, as of March 25, 2013, is $3,600,000 The market exposure time preceding March 25, 2013 would have been 12 months and the estimated marketing period2 as of March 25, 2013 is 12 months.

GEORGIA PEACH STATE STUDIOS

APPRAISAL

47 Summary Report Real Estate Appraisal

Hypothetical Conditions: • None

35.00 Acres of R-40 Zoned Vacant Land

Extraordinary Assumptions: • There are no Extraordinary Assumptions for this appraisal.

2260 State Highway 138 SW, Fayetteville, Fayette County, Georgia, 30214 As of March 25, 2013 Prepared For Brooks Real Estate Development, Inc. Woodstock, Georgia 30107 Prepared by GERALD BRYANT & COMPANY, LLC Gerald Bryant, MAI, SRA, CBA, CCIM, JD, Georgia-978 File Name: 35 Acres-Residential

Based on the appraisal described in the accompanying report, subject to the Limiting Conditions and Assumptions, Extraordinary Assumptions and Hypothetical Conditions (if any), we have made the following value conclusion(s): Current As Is Market Value: The “As Is” market value of the Fee Simple estate of the property, as of March 25, 2013, is $875,000 The market exposure time preceding March 25, 2013 would have been 12 months and the estimated marketing period2 as of March 25, 2013 is 12 months.

BIOS

GEORGIA PEACH STATE STUDIOS

BIOS

Steve Brain President | Founding Member Steve currently serves on the Board of the Arizona Film & Media Coalition and was President for two-terms. He is on the Board of the Arizona Production Association and is an Advisor to the Scottsdale Community College Film & Theater Program. Steve is an Honorary Commander at Luke Air Force Base. Previously, Steve had been appointed to the Arizona Film & Television Advisory Board by Arizona Governor Fife Symington. He served on the boards of The Phoenix Chamber of Commerce, the Greater Phoenix Economic Council (GPEC), The Arizona Biltmore Childrenâ€™s Charity, The Rock School Scholarship Fund and on the Board of Trustees of the ASU Walter Cronkite School of Journalism.

GEORGIA PEACH STATE STUDIOS

BIOS

50 Media and Entertainment Consultant at BrainMedia, Scottsdale Providing consulting services for productions, studio & venue projects, live events and commercials. Vice President & General Manager at Sneaky Big Studios, Scottsdale Managing the startup and responsible for day-to-day operations of Bob Parsons new 15,000 sf production facility in Scottsdale, opening in July 2016. Vice President Production at BIG YAM, The Parsons Agency, Scottsdale Oversee all production activity in the agency for creation of video content & TV commercials. President & Producer at BrainMedia Productions, Phoenix & Los Angeles Provided consulting and production services for live events and production projects. Produced the Annual LA Architectural Awards, LA Business Council Annual Sustainability Summit and the Annual Mayoral Housing, Transportation & Jobs Summit.

General Manager at Centerstaging LLC, Burbank, CA Responsible for day-to-day operations for LA’s premiere rehearsal facility, providing musical instruments and gear to clients including “American Idol”, “The Voice”, The Rolling Stones, One Direction, Lady Gaga, Justin Bieber, Josh Groban and “The Grammy Awards”. Chief Operating Officer at Spectrum Studios, Los Angeles Ran the company that provided all cutting-edge motion capture services on the “Matrix Revisited” & “Matrix Revolutions” motion pictures. Executive Vice President Production at Stan Lee Media, Los Angeles, CA Head of the production directing a team of over 100, creating digital animation content for the web, earning industry recognition and a reputation for high-quality deliverables. Founder & Managing Partner at White Tiger Productions, Phoenix, AZ Founded a production company for commercials and television production. Cocreated and produced a TV game show for kids utilizing virtual reality. Developed the concept and oversaw pre-development planning of Arizona Studios, a 50-acre film studio.

Senior Vice President, General Manager at Fox Animation Studios, Phoenix Directed the start-up and day-to-day management of this feature animation division of 20 th Century Fox. Built and directed a team of over 320 artists, administrative and technical personnel, and administered a $100 million budget during production of “Anastasia”. Executive Vice President at Silver Pictures/Warner Bros., Burbank, CA Oversaw finance, administration and operations for this mega-hit film production company founded by producer Joel Silver during production of “Richie Rich”, “Lethal Weapon 3” and “Demolition Man”. Vice President, Studio Operations at Stephen J Cannell Productions, Hollywood, CA Oversaw studio & facility operations in US and Canada for productions of “The A-Team”, “21 Jump Street”, “Wiseguy” and “Hunter”. Oversaw development of 13-acre film studio in Vancouver, BC.

GEORGIA PEACH STATE STUDIOS

BIOS

51 Managed Facilities PROPERTY Sneaky Big Studios

LOCATION Scottsdale, AZ

SQUARE FEET 15,000

DETAILS New construction. Design & buildout of state-of-the-art 4K digital production studio including 2 sound stages, recording studio and post/editing suites.

North Shore Studios

Vancouver, B.C., Canada

225,000

New construction. Design & build 13 acres, two executive office buildings, seven 10,000-20,000 sf production studios, seven office buildings, one pre-fab metal structure

SJCP

Van Nuys, CA

84,000

Setup transportation and storage facility

Stephen J. Cannell Productions

Hollywood, CA

66,910

Tenant improvements. Design & build executive and production offices in six floor Class A office building. Corporate headquarters, including post-production and pre-production.

Fox Animation Studios

Phoenix, AZ

66,000

Tenant improvements. Design & build executive and production offices, computer room and theater

SJCP

Los Angeles, CA

58,438

Setup studios and production offices

SJCP

Culver City, CA

49,600

Studio and production offices

SJCP

Hollywood, CA

48,000

Crew and staff parking

SJCP

Panorama City, CA

44,253

Setup transportation and special effects departments

SJCP

Culver City, CA

27,500

Setup mill, sign & paint shop, electric department

SJCP

Inglewood, CA

25,000

Studio and production offices

SJCP

Culver City, CA

18,700

Studio and production offices

GEORGIA PEACH STATE STUDIOS

BIOS

52 Managed Facilities PROPERTY SJCP

LOCATION Culver City, CA

SQUARE FEET 18,000

DETAILS Tenant improvements. Setup wardrobe, grip/electric, paint & sign shop, props and set dressing departments

SJCP

Culver City, CA

16,500

Studio and production offices

SJCP

Los Angeles, CA

15,000

Studio and production offices

Financial News Network

Santa Monica, CA

10,000

Remodel broadcast studio, newsroom, executive, production and administrative offices

Stan Lee Media

Encino, CA

10,000

Tenant improvements. Design & build production studio

SJCP

Hollywood, CA

8,872

Remodel production offices

Silver Pictures

Burbank, CA

8,000

Remodel production offices

Financial News Network

New York, NY

7,500

Remodel Executive offices

Image Point Productions

Hollywood, CA

7,300

Tenant improvements. Design & build executive and production offices

Financial News Network

New York, NY

6,500

Tenant improvements. Design & build of broadcast studio, newsroom and production offices

Image Point Productions

Hollywood, CA

6,200

Tenant improvements. Design & build production offices

SJCP

Hollywood, CA

6,000

Design & remodel accounting department

Audio Image

Agoura, CA

5,000

Tenant improvements. Design & build recording studio and administrative offices

SJCP

North Hollywood, CA

5,000

Tenant improvements. Design & build wardrobe department

GEORGIA PEACH STATE STUDIOS

BIOS

53 Managed Facilities PROPERTY Financial News Network

LOCATION Hollywood, FL

SQUARE FEET 3,500

DETAILS Oversee broadcast studio

SJCP

Hollywood, CA

3,220

Tenant improvements. Design & build production offices

SJCP

Culver City, CA

3,000

Set dressing department

SJCP

Culver City, CA

3,000

Prop department

Gross-Weston Productions

Hollywood, CA

1,800

Remodel production offices

Financial News Network

Chicago, IL

1,200

Setup sales office

North Shore Studios

Vancouver, B.C., Canada

1,200

Tenant improvements. Design & build office suite for Chairman

North Shore Studios

Vancouver, B.C., Canada

960

Tenant improvements. Design & build 35mm screening & conference room

SJCP

Newport Beach, CA

800

Remodel. Office suite for Chairman

SJCP

Hollywood, CA

600

Design & build executive gym for Chairman

GEORGIA PEACH STATE STUDIOS

BIOS

Josh Deu & Dimitris Anagnostou - Declare Productions Founding Members With 40 years of combined film, music and television experience, Josh Deu partnered with Dimitris Anagnostou to form Declare Productions LLC. Growing from a VFX startup to a multinational VFX and post-production house that serves thousands of hours of VFX annually. Seizing the opportunity provided by dramatic growth, Josh and Dimitris (Declare Prod. LLC) formed an official financial partnership with ip library, film finance and production company, Miscellaneous Entertainment. Josh, Dimitris, and Todd Shepherd established a successful vertically integrated studio with Declare Prod and Miscellaneous Ent. bringing in a substantial multi-million-dollar film/television IP library In addition to forming strong industry partnerships 2008 - 2018. Josh and Dimitris are now lead producers and co-owners of

Miscellaneous Entertainment. Josh and Dimitris have provided consulting, fundraising, business development for numerous tech and media startups since 2007. Josh and Dimitris now manage and co-produce VFX and Animation for 14 major television shows, such as West World, Magicians, Counterpart, Lethal Weapon, Macguyver etc.. A prolific creative with a successful track record, Josh is currently producing and developing over 15 projects through Declare Prod. and Miscellaneous Ent. Dimitris is now producing a 160 Million Dollar Film alongside Ridley Scott, Mark Foligno (Kings Speech). Josh and Dimitris have also developed a reputation in the tech and media space providing media consulting and deal flow for some of the most successful corporations (Rakuten, Ingenious Bank E.I.S, American Airlines Etc..) With a passion for the film-making process, Josh has also worked with the Prestigious Marlborough School to

establish a successful film program and build relationships, internships partnerships with major studios and producers. Josh is also building a partnership between Harvard Ed. School and Academy Museum of Motion Pictures Los Angeles. Lastly, Josh and Dimitris were instrumental in the formation of as well as Attica Pharma and Kynan Pharmaceuticals, which in 11 months time, has now reached a valuation of $750 million.

GEORGIA PEACH STATE STUDIOS

BIOS

With strong sales and fundraising experience in film, tech, and pharmaceuticals, as well as powerful relationships in the investment and production space, we intend to work with Steve to manage sales, marketing and strategic partnerships for Peach State Studios as well assist in the initial fundraising for Peach State. In joining the Peach State team, we are endeavoring to foster the initial fundraising for the development of the project and continue on as the lead sales team.

Key working relationships, access & partnerships brought by Josh and Dimitris to Peach State Studios • Bill Fay - Legendary Pictures • Jay Worth - VFX and Production Guru Kayvan Mashayekh - Intl - Co-Chair Producers Guild Of America • Jim Giannopoulos - President Paramount Studios • Mark Foligno - Moon & Kings Speach • Spike Jonze - Scenes From the Suburbs • Michael Anderson - Director - The Simpsons • Glenn Ficarra - This Is Us - Bad Santa • Tim Tvrongen (Creator of The Voice) • Hiroshi Mikitani - CEO Owner of Rakuten Corporation - t • Brooks Brown - Head of Production Starbreeze VR (Star VR) Hero VR (Tribeca, Sundance) • Kary Antholis President Cinemax, HBO Miniseries • William Pfeiffer - CEO Globalgate • Terry Dougas CEO 1821 Productions • Alexis Varouxakis - Hulu - Amazon - Netflix Youtube • John Wells - Director - Producer - West Wing - ER - Burnt • Jim Mirkopoulos - Cinespace Toronto/ Chicago City Studios • John Kalafatis - York Studios NYC

• Dan Cathy - Pinewood Studios / Chick-Fil-A owner • Gareth Provan Vice President of unscripted NBC • Kevin Welch - ScottFree Prod • Mike Mohan - Director Netflix • Gary Lucchesi - Lakeshore Ent. - President • Lori McCreary - Morgan Freeman Prod (Revelations Ent. ) • Arcade Fire – Win Butler • Scott Rogers - X Factor • Chris Kattan - SNL • Todd Shepherd - CEO Miscellaneous Ent.

GEORGIA PEACH STATE STUDIOS

BIOS

Current Roles • Producer - Miscellaneous Entertainment • Owner / Executive Producer - Declare Productions • VFX producer/manager Declare Productions VFX • Film Instructor - Marlborough • Fundraising Miscellaneous / Declare Productions • Investment & Fundraising Attica Pharma • Development - TV Film • VFX and animation Producer and Manager Declare productions / Deep Water FX • West World Season 2 • The Get - VFX • Magicians season 2 - 4 VFX • Magicians Animated Sequences • Creative Producer - Magicians Animated shorts and graphics - 2017 - 2018 • Queen America

• Producer / Declare productions 160 Million FIlm in Development Emperor • Producer Ghosts of War 6.5 Million • Producer Waterman 25 Million Dollar Film (Jason Momoa) • Writer-Producer - Doug Stanhope comedy project (Outsourced) • Producer Creative Development - Suburbs TV series • Assist Producer - Miscellaneous Ent. (Dark Star) • Advisor Creative producer with Starbreeze projects (Prison VR) • West World - VFX • Counterpart - VFX • Lethal Weapon - VFX • Producer - Pipe Dream VFX • Training Day - VFX • The Get - VFX • MacGyver - VFX 2017/2018 • Graphic Novel For Scott Free Productions "The Emperor"

• • • • • • • • • • • • • • • • •

Miscellaneous / Declare Productions LLC. "Ghosts of War - Shot & Post 2018 Release 2019 - Pipe Dream Waterman (Jason Mamoa) Legend of the Goblins - Paul Reubens - Chris Kattan The Treehouse The Alchemist (Comedy) Writer / Producer SNL Legend of the goblins project. Creative partnership / Academy Of Motion Picture Museum Writer / Producer - SNL Legend of the goblins project. Current Tech Involvement Tris - Social search engine Thegrid.io Freebird.com Attica Pharma Kynan Pharma Faithstay.com

GEORGIA PEACH STATE STUDIOS

BIOS

Awards • Emmy • West World VFX Emmy in partnership with Deepwater VFX • Grammy • Funeral Best Alternative Music Album Nominated • Recognition for Funeral and Debut Album • Casby Awards • Funeral Favorite New Album - Won • Arcade Fire - Favorite New Artist - Won • Brit Awards • Funeral - International Album - Nominated • Arcade Fire -International Breakthrough Act Nominated • International Group - Nominated

Mojo Awards Arcade Fire Best New Act Nominated MTVU Awards Awards "Neighborhood #3 (Power Out)" - Best Video • Woodie - Animated - Nominated • Arcade Fire - Woodie of the Year Nominated • Left Field Woodie - Nominated • International Woodie - Nominated • • • •

GEORGIA PEACH STATE STUDIOS

BIOS

Education • Mel Hoppenheim School of Cinema 1998 1999 / 2000 2003 • Harvard Extension School 1999 - 2000

Early Work • Music Videos - 30 million + views • Tunnels • Laika • Rebellion • Neon Bible

GEORGIA PEACH STATE STUDIOS

BIOS

Todd Brooks Founding Member Experienced President with a demonstrated history of working in the commercial real estate industry. Skilled in Sales, Real Estate Development, Brokerage, Dispositions, and Real Estate Economics. Strong business development professional with a Bachelor of Business Administration (BBA) focused in Marketing from University of Georgia and Georgia State University.

GEORGIA PEACH STATE STUDIOS

BIOS

President Brooks Real Estate Development, Inc. Dates Employed May 2005 – Present Office Tenant Rep CARTER AND ASSOCIATES, INC. Jan 2001 – Jun 2005 Location Greater Atlanta Area Financial Advisor Prudential Securities Jan 1998 – Jan 2001 Location Atlanta, Georgia Financial Advisor Company Name Raymond James and Associates Jan 1993 – Jan 1998

University of Georgia and Georgia State University Bachelor of Business Administration (BBA) Marketing 1987 – 1992

BUSINESS PLAN

GEORGIA PEACH STATE STUDIOS

BUSINESS PLAN

Recent Performance The Atlanta MSA’s economy is distinguished from the national economy by its greater concentration of trade and service employment and a relatively small component of manufacturing employment. The overall composition of the area ‘s economy is welldiversified and tended to partially insulate the city from the effects of national recessions and other cyclical downturns in the latter half of the 20th century. Nonetheless, the recession at the beginning of the last decade’s focus on technology and telecommunications, in combination with the slowdown in travel spurred by the recession and the September 11, 2001 terrorist attacks, was particularly damaging to the Atlanta economy. Similarly, the most recent economic recession had a substantially negative effect on the metropolitan area.

The mid-to-long-term prospects for the MSA are quite favorable. Fifteen of the Fortune 500’s largest industrial and service corporations have their corporate headquarters in the Atlanta area, and economic development officials throughout the Atlanta MSA actively court both domestic and international corporate relocations. Also, there are eleven of the Fortune 1000 companies with headquarters located in Atlanta. The city has developed a national reputation as one which cooperates well with the private sector. The MSA offers low costs, high quality of life, several major colleges and universities, a temperate climate, a good transportation network, a diversified economy and a welldeveloped infrastructure which makes the prospect of doing business in the area attractive to companies thinking about establishing operations in the Southeast. Several national and international nonprofit organizations, including the American Cancer Society, Habitat for Humanity International, CARE International

and the Boys & Girls Clubs of America, have chosen to locate their headquarters in Atlanta, recognizing the city’s relatively low cost of doing business in conjunction with its increasing prominence.

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Multiple Drivers Atlanta’s diverse set of vibrant clusters bodes well for growth, notwithstanding near-term hurdles such as labor constraints and less affordable housing. Core professional services will thrive as steady inflows of job seekers help mitigate shortages: Atlanta ‘s net annual domestic migration has averaged nearly 40,000 residents. In-migrants accounted for nearly twothirds of local population gains in recent years. An increasingly capital-intensive tech industry will also support growth, as companies grab new opportunities. Venture capital investment is surging, reaching dot-com boom levels, according to PricewaterhouseCoopers. Logistics also will drive longer-term growth, notwithstanding late-cycle demand saturation. Seven of the world’s top l0 supply chain management software suppliers, including Manhattan Associates and Chainalytics, have an Atlanta presence.

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64 Transportation The Atlanta MSAâ€™s infrastructure and accessibility are enhanced by the convergence of three interstate highways (Interstates 20, 75 and 85) and a circumferential highway (I-285) providing access to most of the metropolitan area. Interstate 20 (I-20) travels in an east/west manner connecting Interstate 95 (I-95) in South Carolina with Interstate 10 (I-10) in western Texas. Interstate 75 (I-75) links the Canadian border at Sault Ste. Marie, Michigan with Miami, Florida, while Interstate 85 (I-85) connects I-95 in Virginia with Montgomery, Alabama. Georgia Highway 400 (GA 400) is a heavily traveled commuter route that extends from the northern suburbs to I-85 just north of downtown Atlanta. As the largest hub of air travel in the United States and main hub of operations for Delta Air Lines, Hartsfield-Jackson Atlanta International Airport is the worldâ€™s busiest and among its largest. It is the largest employment center in Georgia, with approximately 58,000 persons employed by airlines, vendors, terminal operations and regulatory agencies, and has an

annual economic impact of $32.5M. 2000 marked the beginning of a $5.4B expansion of the airport which was completed in 2012. Major features of the expansion included completion of a fifth runway, moving the rental car complex to a 67.5-acre site off Camp Creek Parkway and construction of a new international terminal (Maynard H. Jackson Jr. International Terminal) on the east side of the airport. Future development projects at the airport include short and long-range projects which have been designed to meet the growing demand for the airport. Short-range projects include area and access improvements, runway extension, concourse holdroom expansion, terminal modernization, additional north and south terminal parking decks, employee parking, new commercial development, and support area upgrades and modernization. Additionally, there is a proposed 440-room Intercontinental hotel that will be located in the domestic terminal. The hotel has a budget of $350 million and is expected to include 60,000 SF of office space, a restaurant in the lobby, and a skybar which overlooks the runway.

One of the more notable long-term projects is the construction of the sixth runway located between the current fourth and fifth runways. The new closely-spaced runway would provide incremental operational capacity by eliminating the mixed use of current Runway 10-28 during high demand periods and allowing independent arrival/departure operations on this runway pair. Assuming a 10-year development timeline, and an additional 2 years prior to development for final determination of the preferred runway location, the trigger to initiate final runway location discussions would occur at approximately 925,000 annual operations. According to the Airport Affairs office at the City of College Park, these discussions have begun. As a result of the proposed runway expansion, the existing 395-room Sheraton Atlanta Airport hotel has been purchased by the Airport for $16.7 million and closed mid-July for demolition. The airport currently is served by 14 major airlines and their regional partners with an average of nearly 2,500 daily flights. Air service is provided to 150 domestic destinations and more than 75 international destinations in 50 countries.

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Transportation (contâ€™d) Public transportation is provided by the Metropolitan Atlanta Rapid Transit Authority (MARTA) system of buses and commuter rail. MARTA, the ninth largest transit system in the country, offers bus and rail services to more than half of Atlantaâ€™s population. There are two north-south and one east-west rail lines operating in the metro area. Public transportation is extended into Cobb County and Gwinnett County via suburban and exurban transportation bus systems. MARTA provides one of the most convenient ways for Atlanta visitors to travel from the Airport to Downtown, Midtown, Buckhead, and the perimeter areas in Atlanta.

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Passenger Activity NUMBER OF PASSENGERS YEAR

DOMESTIC

INTERNATIONAL

TOTAL

CHANGE

2010 2011 2012 2013 2014 2015 2016 2017

80,099,037 82,532,069 85,659,485 84,173,091 85,394,680 90,257,803 92,696,320 91,8 69,1 27

9,139,022 9,856,954 9,854,343 l 0,258,133 10,784,219 11,233,303 11,475,615 12,033,865

89,238,059 92,389,023 95,513,828 94 ,431 ,224 96,178,899 101,491,106 104,171,935 l 03,902,992

N/A 3.5% 3.4% -1.l % 1.9% 5.5% 2.6% -0.3%

CAGR1 Feb. 2017 Feb. 2018

1.7% 13,421,809 13,385,220

3 .5% 1,775,244 1,8 49,202

1.9% 15,197,053 15,234,422

0.2%

Source: HARTSFIELD-JACKSON ATLANTA INTERNATIONAL AIRPORT 1 Compound Annual Growth Rate

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Passenger Activity (contâ€™d) Public transportation is provided by the Metropolitan Atlanta Rapid Transit Authority (MARTA) system of buses and commuter rail. The MARTA, the ninth largest transit system in the country, offers bus and rail service to more than half of Atlantaâ€™s population. There are two north-south and one east -west rail lines operating in the metro area. Public transportation is extended into Cobb County and Gwinnett County via suburban and exurban transportation bus systems. The MARTA provides one of the most convenient ways for visitors to Atlanta to travel from the Airport to Downtown, Midtown, Buckhead, and the Perimeter areas in Atlanta.

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CREâ€™s Long-Term Upside Commercial real estate will still piggyback on a vibrant economy, but gains will fall short of those seen earlier in this cycle. Rising costs and construction worker shortages will discourage or delay new projects. Although the number of office-related properties sold in 2017 reached a record high, the average capitalization rate - a measure of the return on investment - fell to 6.5% in late 2017, which is near all-time lows, according to Real Capital Analytics. Such a rate, the lowest among regional competitors, could make Atlanta less attractive for investors. Consolidations such as the recent AT&T Midtown cost-saving move will be less of an impediment to growth.

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Expansions Expansions add significant upside to Atlanta ‘s outlook and brighten prospects for the office market. Atlanta made the short list of the top 20 contenders for Amazon’s second headquarters. Landing the gigantic project could eventually bring 50,000 jobs to the metro area. Atlanta is also rumored to be a contender for Apple’s expansion, which would create 20,000 jobs in the next five years. Another noteworthy potential project is a Facebook data center that would add 500 jobs and would be the largest project in the state’s history. Among other reasons, Atlanta is desirable because it has lower office costs than most of its major regional competitors. Universities such as Emory, Georgia State, and especially Georgia Tech will provide a steady stream of skilled workers.

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Conclusion Atlanta-Sandy Springs-Roswell areas will decelerate further as labor constraints and rising costs bite harder. Longer term, the metro-area will remain among the premier economies of the South. Multiple drivers from professional and financial services to software and IT services will generate more job and income gains, securing Atlantaâ€™s status as one of the most vibrant economies in the South and the U.S., which will, in turn, drive strong population growth and consumer industries. Job and output gains will consistently outpace the U.S. average.

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Market Analysis The movie and video production industry is concentrated in regions that have developed significant studio and production facilities. Close proximity to these resources greatly benefits industry establishments by providing specialization, cooperation and easy access to local movie and video production talent. The industry is largely located in California, which accounts for about 40.0% of total domestic film production.

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72 Current Industry Trends US Feature Film Production and Revenues

Based on data published by the Motion Picture Association (MPA, also known as the Motion Picture Association of America or MPM), the number of feature films produced has been on an upward trend. Historical trends are shown below with 2016 being the most recent report. YEAR

MPAA MEMBERS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

205 180 179 194 204 189 168 158 141 141 128 114 136 147 139

2006-2016 Annual Growth 2011-2016 Annual Growth 2013-2016 Annual Growth

PERCENT CHANGE

INDEPENDENT PRODUCERS

-12.2% -0.6% 8.4% 5.2% -7.4% -11.1% -6.0% -10.8% 0.0% -9.2% -10.9% 19.3% 8.1% -5.4%

270 275 310 313 390 422 470 399 422 468 549 545 571 561 579

-3.8% 4.0% 1.9% -0.3% 4.3% 3.3% 6.8% 2.0% 2.9%

PERCENT CHANGE

1.9% 12.7% 1.0% 24.6% 8.2% 11.4% -15.1% 5.8% 10.9% 17.3% -0.7% 4.8% -1.8% 3.2%

PERCENT CHANGE

TOTALS

475 455 489 507 594 611 638 557 563 609 677 659 707 708 718

-4.2% 7.5% 3.7% 17.2% 2.9% 4.4% -12.7% 1.1% 8.2% 11.2% -2.7% 7.3% 0.1% 1.4%

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Current Industry Trends

US Feature Film Production and Revenues

As shown, the number of films produced by MPA members (which includes the major studios [Disney, Sony, Paramount, Fox, Warner Brothers, and Universal] and most top producers and directors) shows a declining trend between 2006 and 2016. Noting this, the past three years on average show a notable increase. Films by independent producers have generally more than offset this decline, with the total number of films generally increasing. The exceptions are 2009, 2013, and 2015. The decline in 2009 is attributed to labor uncertainty in 2007 and 2008 (a number of projects were put on hold), the recession, and the loss of financing. The 2013 decline reflects stability in the number of independent films and a continuing decline in the number of films released by the major studios.

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74 Domestic Box Office Revenues and Attendance Box office revenues (revenues generated from retail movie showings, i.e. theater revenues) are important and often establish the long-term profitability of feature films. Based on data published by the MPA, historical US box office trends are shown below.

As indicated by the data, domestic box office receipts generally show an erratic growth pattern. Box office receipts are generally increasing; however, the notable exceptions are 2005, 2011, and 2014. This reflects the uneven nature of the industry as it relates to the success of movies released, combined with the short shelf life of theatrical releases.

While box office receipts are generally growing, attendance growth has generally been slightly decreasing. Revenues per attendee has shown some growth.

US/CANADA BOX OFFICE RECEIPTS AND ATTENDANCE YEAR

DOMESTIC BOX OFFICE ($ BILLIONS)

PERCENT CHANGE

ATTENDANCE (BILLIONS)

PERCENT CHANGE

REVENUES PER ATTENDEE

PERCENT CHANGE

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$9.100 $9.200 $9.300 $8.800 $9.200 $9.600 $9.600 $10.600 $10.600 $10.200 $10.800 $10.900 $10.400 $11.100 $11.400

24.4% 1.1% 1.1% -5.4% 4.5% 4.3% 0.0% 10.4% 0.0% -3.8% 5.9% 0.9% -4.6% 6.7% 2.7%

1.570 1.520 1.500 1.380 1.400 1.400 1.340 1.420 1.340 1.280 1.360 1.340 1.270 1.320 1.320

9.0% -3.2% -1.3% -8.0% 1.4% 0.0% -4.3% 6.0% -5.6% -4.5% 6.3% -1.5% -5.2% 3.9% 0.0%

$5.80 $6.05 $6.20 $6.38 $6.57 $6.86 $7.16 $7.46 $7.91 $7.97 $7.94 $8.13 $8.19 $8.41 $8.64

14.1% 4.4% 2.4% 2.9% 3.1% 4.3% 4.5% 4.2% 6.0% 0.7% -0.3% 2.4% 0.7% 2.7% 2.7%

2006-2016 Annual Growth 2011-2016 Annual Growth 2013-2016 Annual Growth

2.2% 2.2% 1.5%

-0.6% 2.8% 0.6% 1.6% -0.5% 2.0%

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International Feature Film Revenues Increasingly, international revenues determine the overall profitability of motion pictures. Data on international box office receipts compiled by the MPA is shown below.

Clearly, international growth is outpacing domestic increases. Given that international revenues are now in excess of 70 percent of the total revenues, the importance of the international market cannot be understated. According to the MPA, the top 10 international box office markets are shown below.

INTERNATIONAL BOX OFFICE REVENUES (IN BILLIONS) YEAR

REVENUE

PRECENT

2012 2013 2014 2015 2016

$23.9 $25.0 $26.0 $27.3 $27.2

4.6% 4.0% 5.0% -0.4%

2012-2016 Annual Growth 2013-2016 Annual Growth

2.6% 2.9%

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76 Top 10 International Markets The top 10 markets are largely industrialized nations. They account for 69 percent of the international box office revenues. Of note, China surpassed Japan as the number one non-domestic market in 2012 and has rapidly surpassed it, now being more than triple its size. As 2018 draws to a close, comScore is estimating that worldwide box office will hit a

record $41.7B. That would rep a 2.7% upwards shift from last year’s $40.6B and mark only the second time ever that it’s cracked $40B. This year’s growth is largely driven by domestic which is eyeing a benchmark $11.9B, a 7% increase on 2017, while international box office is also up, though by just 1%, to $29.8B. The domestic jump in box office this year is the biggest since 2015’s 7.5% and the 2nd best since 2009.

INTERNATIONAL BOX OFFICE REVENUES (IN BILLIONS) COUNTRY

China Japan India United Kingdom France South Korea Germany Australia Mexico Brazil Totals

$6.6 $2.0 $1.9 $1.7 $1.6 $1.5 $1.l $0.9 $0.8 $0.7 $18.8

This year, the 2017 Theatrical and Home Entertainment Market Environment report (THEME), includes new information on the home entertainment market in addition to global box office figures and a moviegoer demographic survey. The expanded report reflects the continued evolution of global entertainment. Consumer spending for the combined theatrical and home entertainment markets reached $88.4 B worldwide. The global box office reached a new record high of $40.6 B in 2017 – up five percent from the previous year. Home entertainment consumer spending also increased globally in 2017 to hit $47.8 B, up 11 percent over 2016.

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Employment/Economic Contribution According to the MPA (in November 2017 The Economic Impact of Motion Picture and Television Industry on the United States report), the core businesses of production, marketing, manufacturing, and distribution employ 342,000 people nationwide at an average 2017 salary approximating $90,000, 68 percent higher than the national average. Related businesses that distribute entertainment to consumers (theaters, video rental/sales stores, online services, etc.) employ an additional 354,000 people. In terms of economic impact, the MPA indicates

the film and television industry generated $20.6B in public revenues in 2016 from sales taxes on goods, state income taxes, and federal taxes including income tax, unemployment, Medicare and Social Security, based on direct employment in the industry. The industry contributed $134B in sales to the overall economy in 2016 (up 1% from 2015). The industry registered a positive balance of trade in nearly every country in the world with $16.5B in exports worldwide in 2016. The industry had a positive services trade surplus of $12.2B in 2016, or 5% of the total U.S. private-sector trade surplus in services. In 2016, the industry exported four times what it imported. The industry runs a trade surplus larger than each of the surpluses in the advertising, mining, telecommunications, legal, information, and health related services sectors.

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Current Television Industry Trends - PriceWaterhouseCoopers - In addition to feature films, television is a major source of revenues in the filmed entertainment industry. Television revenues are divided into two categories: advertising and distribution. Advertising revenues consist of traditional commercials and product placement fees. They are an indicator of overall industry health. According to Price Waterhouse Coopers, terrestrial TV advertising continues to dominate. However, the ongoing global growth of pay-TV penetration and online TV advertising is slowly eating into its dominance-with emerging markets becoming digitized and audiences starting to fragment, driven by growing smartphone and tablet penetration. Terrestrial TV advertising revenue is expected to grow to $28B by 2021, still accounting for approximately two-thirds of the global total TV advertising revenue.

Economic growth in many emerging Asia Pacific markets is creating a new generation of consumers for advertisers to target. Companies continue to leverage new tools to advertise to these vast TV markets. Indonesia is one of them and is expected to grow at 10.4% CAGR by 2021, to become the fourth-largest TV advertising market in the world. The distribution market consists of revenues generated by distributors of television programming to viewers. It includes spending by consumers on subscriptions from cable operators, satellite providers, telephone companies, other multichannel distributors, video-on-demand, and television distributed to mobile phones. In the United States, Europe, Middle East, Africa (EMEA), Asia Pacific, and Canada, it also includes pay-per-view. In EMEA and Asia Pacific, public TV license fees also are included. By 2021, the global traditional TV market is expected to grow at 1.3% CAGR to reach $277.4B. This is mainly attributable

to TV subscription revenue which continues to account for the majority of global revenue - 80.2% in 2016 and 84.0% in 2021. Despite strong growth overall, mature markets in Western Europe and North America are struggling for organic growth opportunities. The Asia Pacific region will see total TV subscription revenues grow at 6.8% CAGR to $59.5B by 2021. Cable is the regionâ€™s overwhelmingly dominant subscription TV platform, bolstered by enormous subscriber bases in China and India. Cable will add more than 26 million households over the next five years, with 436 million subscriptions by 2021.

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Competitive Landscape The Movie and Video Production industry exhibits a moderate to high level of market share concentration. In 2017, the top four companies in the industry are expected to hold a combined market share of 65.6%, while the top seven will account for more than four-fifths of the industry. The remainder of the industry is highly fragmented, and small production companies often gain traction with a breakout hit. However, the industryâ€™s largest companies have several advantages. All trace their film studios back to Hollywoodâ€™s golden age, notwithstanding ownership changes along the way. As a result, they have large back catalogues that continue to generate revenue from television and other home entertainment licensing. In addition, most are highly diversified media companies, with other operations including television production and distribution, theme parks and telecommunication services.

Back catalogues and diversified revenue streams insulate these companies from the unpredictability of the box office; the industry relies on high-grossing hits, but invariably releases flops in search of the next blockbuster. Larger companies are better able to withstand this variability, with large year-over-year revenue fluctuations common among the major studios. Market share concentration has been relatively consistent over the past five years and is expected to remain so over the coming years. Although individual company market stocks change significantly from year to year as they vie for consumer dollars at movie theaters, their combined share of the industry has remained steady.

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Streaming Wars Netflix spent $12B on content creation for 2018 and is expected to spend $19B in 2019. This is a sizable increase over its initial budget of $8B stated at the beginning of 2018. Approximately 85% of the budgeted amount was allocated to the creation of Netflix original content, which is a well-received move considering that roughly 90% of Netflix users regularly watch original Netflix content. This large increase in budgeting for original content has sparked a need for Netflixâ€™s competitors, such as Hulu, Amazon, etc., to increase their budgeting for content creation. This huge increase in demand will be noticeable to movie studios that will be used to create all this new content from the wide range of streaming companies.

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81 Cost Structure Benchmarks Profit, defined as earnings before interest and taxes, is expected to account for 13.0% of revenue in 2017, up from an estimated 10.6% in 2012. Although the industryâ€™s average margin has increased overall during the period, film production profit is generally somewhat volatile. Studios make large upfront investments in talent, special effects and marketing long before a filmâ€™s release. Typically, they then have a short theatrical release window during which they must recoup most of these costs. Profitability therefore varies greatly between productions and between production companies. A largebudget flop could produce a substantial studio loss, whereas a surprise low-budget hit will generate a profit windfall. Similarly, smaller companies that release films sparsely may operate with thin margins, while larger studios with a steady production pipeline will generally earn margins above the industry average. Over the coming years, profit is broadly expected to increase as new digital technology trims production and distribution costs. However, volatility in industry profit margins will persist.

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Purchases

Wages

Other Costs

Purchases are estimate to account for 52.4% of industry revenue in 2017. This cost category mainly includes outsourced production services, including pre and post-production. Although major studios have substantial in-house capabilities, as they work across genres, they encounter needs that require more specialized services and often contract out work to other production companies. Commonly used postproduction services include editing, visual effects, animation and screen conversion. In addition, purchases include costs related to obtaining intellectual property, such as scripts and soundtracks.

Wages are the industryâ€™s second-largest cost, accounting for an estimated 18.1% of revenue in 2017. Employment in the industry is expected to grow an annualized 5.1% over the five years to 2017. However, employment in the industry fluctuates from year to year, as the industry employs a flexible workforce to manage the varying tasks required for each new production it undertakes. Although the industry relies heavily on temporary and freelance employees, it employs a highly skilled workforce that commands high wages. In 2017, the average worker in the industry is expected to earn more than $86,000

Rent and utilities account for an estimated 3.6% of industry revenue. Lease payments for both structures and equipment account for the bulk of this cost. Feature films are often shot at various locations away from the studio lot; in these cases, production companies often rent equipment and temporary office space on location. Depreciation, which covers payments on the structures and equipment owned by the studio, accounts for an estimated 3.5% of revenue. Finally, purchased marketing services are expected to account for 1.7% of revenue. Although feature films are heavily promoted, much of the marketing is done in-house by studios or managed by film distributors, limiting the extent to which industry operators pay for outside advertising services.

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Internal Competition The Movie and Video Production industry is highly competitive. Although theatrical releases account for a minority of industry revenue, success at the domestic box office plays a large role in generating interest for international distribution of a film. A strong box office performance also helps build momentum for home entertainment licensing and distribution, such as through Blu-ray sales and video-ondemand rental. However, movie theater ticket sales have grown sluggishly, so studios compete fiercely for these limited consumer dollars. Major studios trade market shares each year based on the relative success of their releases; growth for one company often comes at the expense of others. Although lesser-known producers can make inroads in the industry through film festivals and critical acclaim, this competition largely occurs

among major studios, whose individual market stocks fluctuate year to year but who combined consistently account for about four-fifths of the industry. Competition within the industry begins with the acquisition of creative property. Studios shop around for scripts and stories, competing among themselves for the most promising ideas. Increasingly, the industry has favored established properties, such as best- selling novels, due to the financial risks of â€˜moviemaking and the unpredictability of consumer responses to new concepts. Studios also tend to favor films in genres that are enjoying high popularity in the moment, which increases competition for and costs of intellectual property. For example, the popularity of superhero movies in recent years created a rush to acquire rights from comic book

publishers, which likely pushed up the licensing fees paid out by studios. Although studios have their own reputations, moviegoers are usually more familiar with directors and leading actors, whose star power can be a draw. When major studios do produce a movie based on original content, itâ€™s often because a top-tier name is attached to it. Competing for A-list actors is expensive, as they command high salaries. Studios also compete for space at theaters, with larger studios usually better able to secure wider screenings and more favorable schedules.

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84 External Competition Movie studios also compete against other forms of media, such as television content, which has outpaced this industry over the past five years. However, the major companies in the industry are all highly diversified media operations, and as consumer preferences shift among different types of video entertainment, they will be able to offset declines in film revenue through other business lines. The internet, in general, also poses a competitive challenge to the industryâ€™s established players. Piracy has siphoned revenue from movie studios, while video streaming services such as Netflix and Amazon have emerged as competitors to traditional studios. However, just as television content has survived the migration of consumers away from linear, traditional television viewing, the movie format will likely adapt to changes in distribution and viewing habits.

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Over the past few years, film productions have shown some increase, averaging 3.3% per year since 2011. Filmed box office revenues in the United States and Canada have shown a corresponding increase of 2.2% since 2011. While filmed entertainment is significant, its total revenues are dwarfed by television, which is much larger. In the established markets (United States, Canada, and Western Europe) television adverting and distribution growth has been negligible over the past five years. In the emerging markets, growth has been explosive. Growth is expected to increase over the next five years. The Movie and Video Production industry has grown moderately over the five years to 2017, benefiting from steady demand for entertainment but challenged by disruption to its traditional distribution channels. Box office sales have grown sluggishly, mainly as a result of higher ticket prices rather than increased

attendance. Consequently, the industryâ€™s business model has shifted as studios prioritize blockbusters and increase their reliance on foreign distribution. Meanwhile, competition has intensified among the major studios that control the bulk of the industry, leading to a spate of high-profile acquisitions and higher bids for creative properties. Over the five years to 2017, industry revenue is expected to increase at an annualized rate of 2.5% to $43.9B, including growth of 2.3% projected in 2017 alone. Slow box office growth has made the industry more risk averse in recent years. Studio revenue has become more reliant on blockbusters, especially those based on existing creative properties. Seven major studios control about four-fifths of the industry, but market share gains for one in any given year usually come at the expense of another. Consequently, studios are placing bigger bets on action movies, especially in on-trend genres such as

superhero films, which bring both domestic consumers to theaters and have staying power in foreign markets. The focus on blockbusters has improved profit over the past five years. However, in the coming years it will make studios more vulnerable to profit losses, given the fast-changing nature of consumer tastes. Over the next few years, the industry is expected to sustain modest growth. Shifting domestic distribution channels, including a sluggish box office, will continue to pose a challenge for the industry. Meanwhile, new digital players that have already inched into film production will pose a threat to major studios unlike any they have faced since the premier of the talkie. However, the overall industry will remain in demand, and foreign distribution of US films will likely continue growing strongly over the period.

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Georgia Movie Industry According to a recent article in the Atlanta Business Chronicle 7 Georgia hosted more feature film productions in 2016 than any other market, including the United Kingdom and California, according to a new study from FilmLA, the not-for-profit film office that serves the Greater LA region. FilmLA analyzed a sample of 100 feature films from 2016, and 17 of these filmed in Georgia. The UK took the No. 2 spot with 16 films, followed by Canada (13), California (12), Louisiana (6) and New York (6). According to the study, in 2016 Georgia lost $606M in tax revenue to fund its film incentive program, which awards up to 30 percent back of a production’s spend back in transferable credits that can be sold on the free market. But the tax credit program is paying off - last year, films and television shows spent $2.02B in the Peach State.

“Passengers,” “The 5th Wave,” “Allegiant” and “Captain America: Civil War” were among the films FilmLA studied that shot in Georgia last year. These productions had a budget value of $950.2M and spent $476.4M, or 50 percent, on locations.

From the Atlanta Business Chronicle conference on December 6th, 2018 “Business of Film”

“Viewed from a national perspective, Georgia helped the United States’ film industry maintain its dominance over many international competitors who could otherwise have been the beneficiary of the jobs and production spending generated by these feature projects,” said the report.

• 2017- 9.5 billion dollar impact in Georgia, a 4000% increase

California finished No. 4 overall, but still leads as a production center with over $30B in direct spending annually.

• 2007-242 million dollar impact in Georgia

• Movie and TV business responsible for 93,000 jobs and 4.6 billion in wages in 2017 • 300 new business have moved or expanded to support industry • TV and Film Georgia is #3 in US, #5 in world and #1 in the world for just Feature Film • 455 TV and film productions in 2017 up from 62 in 2013

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87 Georgia Film Academy One of the reasons behind Georgiaâ€™s booming film industry is its highly skilled workforce. In an effort to ensure that productions in Georgia have access to the highly skilled technical labor necessary for motion picture production, the University System of Georgia and Technical College System of Georgia created the Georgia Film Academy in a collaborative effort. The Georgia Film Academy is a unique, statewide certification program that provides students with a variety of tools and opportunities such as multi-disciplinary training by professionals in the film and television industry, in classroom course work with supplemental hands-on-training, and one-onone job counseling. The academy certifies workforce ready employees in needed areas, connects students and prospective employees with employers, and offers a unique capstone experience for top students that will provide them a path to employment in Georgia.

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Georgia Film Production Incentives In 2008, the State of Georgia enacted the Georgia Entertainment Industry Investment Ad which increased the state tax credit to 30% for qualified production of motion pictures, television series, commercials, music videos, interactive games, and animation. Georgia production incentives provide up to 30% of producerâ€™s Georgia production expenditures in transferable tax credits. The program is available for qualifying projects, including feature films, television series, commercials, music videos, animation and game development.

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89 State Tax Credit Benefits In 2008, the State of Georgia enacted the Georgia Entertainment Industry Investment Act which increased the state tax credit to 30% for qualified production of motion pictures, television series, commercials, music videos, interactive games, and animation. Georgia production incentives provide up to 30% of producer’s Georgia production expenditures in transferable tax credits. The program is available for qualifying projects, including feature films, television series, commercials, music videos, animation and game development.

State Tax Credit Benefits Highlights from the Georgia Entertainment Industry Investment Act include the following: • 20% base transferable tax credit. • 10% Georgia Entertainment Promotion uplift can be earned by including an embedded Georgia logo on approved projects and a link to ExploreGeorgia.org/Film on the promotional website. • $500,000 minimum spend to qualify. • No limits or caps on Georgia spend, no sunset clause. • Both resident and non-resident workers’ payrolls and FICA, SUI, FUI qualify. • No salary cap on individuals paid by 1099, personal service contract or loan out. Payments made to a loan out company will require six percent Georgia income tax withheld. • Production expenditures must be made in Georgia to qualify from a Georgia vendor. • Travel and insurance qualify if purchased through a Georgia agency or company.

• Original music scoring eligible for projects produced in Georgia qualify. • Post-production of Georgia filmed movies and television projects qualify if post is done in Georgia. • Development costs, promotion, marketing, license fees and story right fees do not qualify. Although filming is often done in studio, many movies are filmed on location throughout the country. These on-site shoots contribute to most of the industry’s scattered employment in other states and are, therefore, subject to fluctuation. Changes in state tax incentives often stimulate various shifts in on-location productions by state.

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Current US Incentives By State 36 states including Puerto Rico currently offer some form of incentive for filmed entertainment production ranging from rebates to grants to tax credits.

LOUISIANA- •••• Highlights include a 25% base refundable tax credit but can by 5% to l 0% for certain areas of the state. Movies are capped at $20M of credits and TV series at $25M per season. The minimum to spend is $300,000.

Film Production Capital ranks states on a fivestar scale according to the best places to make a film. The only two states to achieve the five-star ranking are Georgia and Kentucky. Four states received four stars - Louisiana, Massachusetts, Pennsylvania, and Puerto Rico. Many states received three stars including California.

MASSACHUSETTS - •••• Highlights include a 25% refundable tax credit plus an extra 5% if the production meets minimum use requirements of a qualified production facility. There is a $60M annual cap total and a cap of $12M per project. The minimum to spend is $50,000.

Georgia has already been previewed, the below outlines some of the other major competing states:

PENNSYLVANIA- •••• Highlights include a 25% refundable tax credit. There are no caps although no more than 27 TV episodes per year can qualify. No minimum spend was noted.

KENTUCKY - ••••• Highlights include a 30% refundable tax credit based on qualifying expenses, 35% for resident wages as well as expenditures in certain rural counties. Only the first million dollars paid to any single individual receives any credit, otherwise, there are no caps. The minimum to spend is $250,000 for feature films, $100,000 for commercials, and $20,000 for documentaries.

PUERTO RIC0 - •••• Highlights include a 40% refundable tax credit for expenditures paid to Puerto Ricans or local vendors and 20% to non-residents, subject to withholding. There is a $50M annual cap although the 20% non-resident compensation does not count towards this amount. The minimum to spend is $100,000 for full-length films and $50,000 for short films.

CALIFORNIA - ••• Highlights include a 20% refundable tax credit for feature films, MOW, new or continuing TV series, or miniseries and 25% for television series that filmed previous seasons outside of California and independent films. There is an annual cap of $330M, with $132M allocated to feature MOW, new or continuing TV series, or mini-series, $115.5M to non-independent feature films, $16.5M to independent feature films, and $66M to relocating TV series.

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91 Sound stage/Office Facilities Permanent facilities for the production of filmed entertainment are dominated by soundstages and office buildings. They are largely located in Southern California and consist of large studio complexes, often 10+ acres in size. The studios are either owned by major production companies (but typically with non-owner occupied space leased to independent film companies) or are independent facilities leased entirely to outside production companies. In areas outside of Southern California, soundstages have generally been existing warehouses/industrial buildings leased by users for a specific production or owned/operated by local owners and marketed/leased to production companies. The buildings have the benefit of offering office and soundstage (warehouse) space in the same location. In general, the converted industrial buildings are significantly inferior to purpose-built soundstages due to clear height and the lack of column free interiors. Nevertheless, they are a passable alternative for some users.

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Sound Stages Current design criteria for soundstages used for the production of filmed entertainment can effectively be described as high clearance clear span warehouse type buildings. Typically, soundstages will have an attached office area used for dressing rooms, production offices during filming, wardrobe storage, make-up rooms, etc. Soundstages are divided into two general categories, audience-rated and non-audience rated. Audience-rated facilities have more exits (to meet fire department requirements), higher volume air-conditioning, and may or may not have semi-permanent seating. Existing soundstages vary widely in size, quality, and design. Older soundstages, which for many years remained functional, are now at the point where they have a diminished functional utility. This is particularly true for the smaller stages.

Current industry standards are for 15,000 to 25,000+ SF soundstages, with 18,000 SF being most typical for television and 25,000 SF being used by feature films. Key quality factors are interior clearances (both vertical and horizontal), electrical power, parking, loading access, security, HVAC, soundproofing, dressing rooms, and the availability of office space and ancillary services. As would be expected, in the Los Angeles area (the region with the highest concentration of soundstages) the larger, better quality soundstages are in the strongest demand. It is important to note that soundstage rentals can be straight building only leases (known as “four wall” leases) or can include a tremendous variety of additional services provided (at additional fees) by the landlord. These services include electricity, air conditioning, food service, specialized equipment and associated labor (often included in “grip and electric”), courier

services, telephones, trash removal, screening/ conference rooms, and other labor. As a matter of course, the studio operator prohibits the use of outside providers. The result is a complicated series of additional profit centers to the soundstage operator or studio. These profit centers can generate revenues between three and five times the base soundstage rent. Soundstages are also different from most rental real estate in that they are typically rented on a short term basis (often just for several days), first for preparation and set up (“prep”), then for the actual film shooting (“pre-light/shoot”), and then for take down (“strike”). Rates are normally quoted on a daily basis, with the prep/strike/hold rate roughly half the shoot day rate. For larger productions, there has been some movement to “episodic rates”, wherein a flat rate is quoted on a weekly, monthly, or seasonal (television season) basis.

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Existing Sound stages: Georgia Excluding projects with only small soundstages (under 10,000 SF), Georgia has 13 studios/ soundstage facilities that were found through our research. These projects are summarized below:

Generally, these projects are competitive with the subject, although the former Tyler Perry Studios and Turner Studios have been used for internal production only. However, if the former Tyler Perry Studios were sold, it could be used for external production. EXISTING STUDIOS SUMMARY

STUDIO

LOCATION

STAGES

OFFICE SPACE

MilVO!her

Status / Comments

Pinewood Atlanta Studios Third Rail Studios EUE/Screen Gems Raleigh Studios Tyler Perry Studios Turner Studios Triple Horse Studios Atlanta Film Studios Atlanta Filmworks Mailing Avenue Stageworks Savannah Film Fadory Eagle Rock Studios

Fayetteville Doraville Atlanta Senoia Greenbrier Atlanta Covington Hiram Atlanta Atlanta Savannah Norcross

18 3 10 4 5 6 5 2 1 1 5 4

15,000-40,000 20,000-`JO,OOO 11,500-37,500 4,500 8,000-17,500 N/A N/A 20,000 each 20,240 38,000 11,305-22,352 28,528-30,316

Yes Yes Yes Yes Yes N/A N/A Yes Yes Yes Yes Yes

Yes Yes Yes Yes NIA NIA N/A Yes Yes Yes N/A Yes

Purpose-built sound stages, opened in 2014, expanded Recently completed Former Fairgrounds Older Studio, Sma ll Stages, Sold in 2017 to AMC Interna l Productions Only, For sole Inte rna l Productions Only Recently completed Opened in 2011 Opened in 2013, Former Industrial Buikling Opened in 2012, Former Industrial Building Older two-story industrial conversion Industrial Building Conversion, 2015 Completion

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94 Entertainment Industry Office Buildings Closely associated with soundstages are production offices. Production offices are distinct from the dressing rooms, make-up rooms, administrative offices, etc. that are part of most soundstages and are used during the period of soundstage use. Companies involved in a production generally require temporary office space, typically starting before, and continuing after the actual soundstage work is completed. This office space is used for administrative functions, including payroll, accounting, transportation, editing, etc. Historically, a very rough ratio was one square foot of office space for every three to four square feet of soundstage space. Alternatively, this figure is quoted at 5,000 to 10,000 SF per stage. With recent changes in technology, i.e. editing for television shows is now being performed on personal computers as opposed to at offsite editing facilities, office space

requirements have increased. Noting this, feature films and large budget productions still employ off-site editing facilities. Production office space is typically leased on a weekly or monthly basis. It is typically furnished and has telephone lines installed. Tenants typically incur a variety of charges in addition to rent (telephone, equipment rental, etc.). The short-term nature of both the office and the soundstage occupancy reflects the projectoriented characteristics of the industry.

tenants. It is also often leased on a furnished basis, with telephone lines. Television production office space requirements have much less volatility. Office requirements for writers, editors, and production staff remain relatively constant during the filming season. However, the same leasing parameters remain.

The production office requirements for a feature film will typically consist of perhaps four to eight suites of administrative and preproduction, continuing or expanding during the actual shooting. After filming is complete, the number of offices gradually declines as tasks are completed. Because of the short term and variable demand, production office space is generally taken in “as is” or near “as is” condition, without the extensive tenant improvements required by traditional office

Production office space is an integral part of most studios, together with soundstages. In Los Angeles, there are several independent production office buildings without soundstages. In secondary markets, there is virtually no production office space outside of the studios. However, some property owners are willing to lease space on a short-term basis to production companies.

Existing Production Office Space- United States And Canada

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Projected Utilization {Occupancy) Studio 1’s occupancy is based on 2016 information that was available from a prior appraisal, our calls were not returned regarding current occupancy. Studio 2’s occupancy is based on the 2017 occupancy given to us by the client. Studio 3’s occupancy is based on the developer’s budgeted occupancy once stabilized. Studio 4 reported that their 2017 occupancy for the year was 85%. Studio 5 stated that their occupancy was 76%. Market participants further noted that an occupancy between 80% to 90% is typical in the metro Atlanta market.

Based on the data, it appears a stabilized stage utilization rate between 70 and 90 percent would be reasonable for the subject. Considering the available data, we have projected the subject soundstages to achieve a stabilized utilization (occupancy) rate of 85 percent. We have further projected the soundstage rental income based on a five-day week. This yields 250 available soundstage days per stage (50 weeks a year x five days per week).

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96 The subject is projected to have an 85% occupancy. We have researched data on other independent facilities. This data is shown below. Sound Stage Rental Summary EXISTING STUDIOS SUMMARY LOCATION

RATE

STAGE SIZE

CLEAR HEIGHT

$/SF/MONTH

Pinewood Atlanta Studios 461 Sandy Creek Road Fayetteville, Georgia

346,316

84%

15,000-40,000

35’-52’

$3.64-$4.40 Gross

EUE Screen Gems 175 Lakewood Way SW Atlanta , Georgia

155,214

11,500-37,500

25’-40’

$3.50 Gross

Atlanta Metro Studios 601O Studio Way Union City, GA 30291

135,000

90%

20,000-27,500

40’

$2.B6 Gross

Third Rail Studios 5801 Peachtree Road Atlanta, GA, 30341

60,000

85%

20,000-40,000

40’

$3.50 Gross

Blackhall Studios 1415 Canslifufian Road Atlanta , Georgia

130,362

78%

19 ,200-38,400

40’-45’

$4.33 Gross

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97 Projected Utilization {Occupancy) Studio 1’s occupancy is based on 2016 information that was available from a prior appraisal, our calls were not returned regarding current occupancy. Studio 2’s occupancy is based on the 2017 occupancy given to us by the client. Studio 3’s occupancy is based on the developer’s budgeted occupancy once stabilized. Studio 4 reported that their 2017 occupancy for the year was 85%. Studio 5 stated that their occupancy was 76%. Market participants further noted that an occupancy between 80% to 90% is typical in the metro Atlanta market. Based on the data, it appears a stabilized stage utilization rate between 70 and 90 percent would be reasonable for the subject. Considering the available data, we have projected the subject soundstages to achieve a stabilized utilization (occupancy) rate of

85 percent. We have further projected the soundstage rental income based on a five-day week. This yields 250 available soundstage days per stage (50 weeks a year x five days per week). WAREHOUSE / MILL SPACE DESCRIPTION OF WAREHOUSE/MILL/SUPPORT SPACE Millwork space at the subject will be located between the soundstage and the equipment rental building. This will allow for easy off-stage building and movement into the soundstages. The subject has approximately 45,000 SF of millwork space. Projected Stabilized Occupancy We have utilized the same occupancy rate of 85% for these spaces as well as the use of these spaces is typically related to the use of the sound stages.

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Absorption The owner estimates that the property will reach stabilization within a year. They have strong interest with stages that will become available soon. While there is strong competition in the market, and new product on the way, the subjectâ€™s strong location, design, and scale, should allow the subject to be one of the stronger performers. Based on our review of other studios in the market and pre-leasing at the subject, we have estimated an absorption period of 12 months. It should be noted that given the short-term leases, occupancy at studios such as the subject can change rapidly and thus our estimate of stabilization is based on how long it will take the subject to reach our stabilized occupancy on a consistent, annual basis on overage.

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Rental No. I This property represents the Pinewood Atlanta Studios. This is a full-service independent studio located in Fayetteville, Georgia. It is the largest studio in the state. This studio is 22 miles south of downtown Atlanta and 16 miles south of Hartsfield-Jackson Atlanta International Airport. It is in a rural area and is not proximate to visitor amenities (hotels, restaurants, etc.). Phase I of this project was completed in early 2014. It consists of six soundstages totaling 120,452 SF, 40,341 SF of production office space, and 81,003 SF of studio support space (mill and storage space). The soundstages range from 15,401 to 30,704 SF. They have 42’ to 52’ clear heights (35’ clear in an 18,000 SF stage in a standalone steel building). Phase II was completed in July 2015. It added five soundstages totaling 99,212 SF, 20,000 SF of production office space, and 50,000 SF of studio support space (mill and storage space). Phase III was completed

in 2016 to 2017 and added 7 sound stages totaling 128,166 SF, 28,800 SF of production office space, and 47,000 SF of studio support space (mill and storage space). In addition to the studio, the project includes a former primary school (never occupied as a school) across the street from the studio that is used for additional office space, the management offices, and the commissary. The studio also includes a number of industrial buildings adjacent to the project that are leased to vendors. Our calls were not returned for current leasing information and the following information is based on a 2016 appraisal. The stages were 84% booked in 2016, which is the most recent data available. The studio budgeted 85% for the 2016 year. Quoted rents for the tilt-up stages equated to $4.40 per SF per month and rents for the steel sound stages equated to $3.64 per SF per month. Electricity was reported to be cost plus a 15% administrative fee and daily parking $2.00 per space per day (roughly $60 per month). Mill

space was quoted at $1.80 per SF per month and warehouse space ranged from $0.50 to over $1.00 per SF per month. Production office space was quoted at $4.00 per SF per month although contract rates were noted as being just above $2.00 per SF per month.

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100 Rental No. 2 This property represents the EUE/Screen Gems Studio. This is a full-service independent studio located in Atlanta, Georgia. This studio is on the site of the former Lakewood Fairgrounds and includes both original exhibition halls and new construction. It is three miles south of downtown Atlanta. The Atlanta facility has 10 soundstages totaling 155,214 SF, 39,000 SF of production office space, and 79,500 SF of studio support space (mill and storage space). The soundstages range from 2,904 to 37,500 SF. The seven smaller soundstages (2,904 to 13,000 SF are in the original Fairgrounds buildings. They have 25’ clear heights (14’ clear height in the 2,904 SF stage) and are not column free. Three new soundstages (18,600 to 37,500 SF) were built in 2011/2012 and have 40’ clear heights. The two new stages are metal frame buildings. The property management did not return numerous phone calls or e-mails and the occupancy is unknown. Third party sources indicate stage rents approximating $3.50 per SF per month.

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101

Rental No. 3 This property represents the Atlanta Metro Studios. This is full service independent studio under construction and is located in Union City, Georgia on a portion of a site that was a former mall. This studio is 15 miles southeast of downtown Atlanta and 8 miles southeast of Hartsfield-Jackson Atlanta International Airport and is located along I-75. The development was completed in 2016. It consists of six soundstages totaling 135,000 SF, 60,000 SF of production office space, and 50,000 SF of studio support space (mill and storage space). The soundstages range from 20,000 to 27,000 SF with 40â€™ clear heights. The new stages are

all tilt up concrete and the studio also features a 4-acre exterior shooting area. Our calls were not returned for current leasing information and the following information is based on a 2015 appraisal. The studio budgeted 90% occupancy for the first stabilized year. Quoted rents for the sound stages equated to $2.86 per SF per month. Mill/support space was quoted at $2.00 per SF per month. Production office space was quoted at $3.00 per SF per month.

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102

Rental No. 4 This property represents the Third Rail Studios. The comparable is located in the city of Doraville, DeKalb County, Georgia and is part of a 155.63-acre mixed-use project formerly improved with a General Motors automobile assembly plant. The studio is contained in a 1959-built 138,170 SF (including mezzanine) manufacturing building. After 2016 renovations the studio includes three soundstages totaling 60,000 SF. All sound stages are 20,000 SF although two can be combined to form a 40,000 SF stage. It also has 40,162 SF of mill space, 33,130 SF of production office space, and 10,000 SF of vendor space. Management reported

occupancy to have been 85% for the 2017 year and they further stated that 70%-85% is typical in the market. Asking rates for sound stages are $3.50 per SF per month. Mill space is quoted at $1.00 per SF per month and production office space at $3.00 per SF per month. Electricity was reported to be cost plus a 15% administrative fee.

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103

Rental No. 5 This property represents the Blackhall Studios. The comparable is located in the city of Atlanta, DeKalb County, Georgia and is situated on 53 acres. There are an additional 140 acres that will be utilized for additional expansion. The warehouse, office and millwork building were originally built in 1987 and was most recently renovated in 2017 along with the addition of the nine studio stages. The property consists of nine studio stages with ceiling height of 42â€™ to 45â€™ and ranging in size from 20,000 to 40,000 SF and 175,000 SF of mill and warehouse space. There is a 35-acre backlot of which 25 acres are cleared and level with the remaining 10 acres

wooded. Management reported occupancy to have been 85% for the 2017 year and they further stated that 70%-85% is typical in the market. Asking rates for sound stages are $4.33 per SF per month. Mill space is quoted at $1.00 per SF per month and production office space at $2.00 per SF per month. Electricity was reported to be cost plus a 15% administrative fee.

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104

Sound Stage Analysis The Pinewood Atlanta Studios and EUE Screen Gems are the largest full-service studios in the state. Pinewood Atlanta Studios is a new, high quality facility in a peripheral location while EUE Screen Gems is a generally older facility in a central location. The smaller stages at EUE Screen Gems are inferior to the proposed subject soundstages while the larger stages are similar. The subject should achieve rates near the Pinewood Atlanta Studios rates and above EUE Screen Gems. Atlanta Metro Studios, Third Rail and Blackhall studios are smaller but newer like the subject. Atlanta Metro Studios has a peripheral location while Third Rail Studios is well located near many of the affluent northern Atlanta neighborhoods. Generally, the sound stages are comparable although do not offer the variety or scale of the subject for larger productions. The subject should achieve rents above both of these comparables.

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105

OVERALL CAPITALIZATION RATE SALES

Direct Capitalization Technique Valuation Overall Capitalization Rate Derivation There are two primary methods for deriving an overall capitalization rate for the direct capitalization technique. These include a derivation from comparable sales and derivation from investor surveys. Each is discussed in the following sections.

NAME

SALE DATE

OAR

Sunset Las Palmas Studios Culver Studios Tribune Studios Burbank Studios Culver Studios Sunset Gower Studios Manhattan Beach Studios Manhattan Beach Studios Culver Studios Manhattan Beach Studios Manhattan Beach Studios Tribune Studios

May 2017 Sale March 2014 Sale January 2008 Sale December 2007 Sale Late 2007 Withdrawn Listing August 2007 Sale Mid 2007 Sale Late 2004 Sale April 2004 Sale Early 2004 Failed Escrow Mid 2003 Failed Escrow Late 2002 Failed Escrow

3.44% 5.53% - 5.87% 7.25% +/7.50% +/7.50% +/6.60% +/6.75% - 7.00% 9.70% 8. 90% - 9.55% 10.00% +/10.30% 8.60%

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106

Derivation From Comparable Sales When sufficient data exists, this is the preferred method to derive an overall capitalization rate. Data on each propertyâ€™s sale price, income, expenses, financing terms, and market conditions at the time of sale is needed. In addition, insight into short-term changes in the propertyâ€™s operating results is often reflected in the overall capitalization rate. This technique is considered appropriate for the subject.

Although there have been no sales of properties similar to the subject, several filmed entertainment production (or related) facilities have been marketed for sale or sold in the Los Angeles area. The former Tyler Perry Studios in Atlanta are for sale in Atlanta and offer prices are known but since the studio was owneroperated, there was no cap rate associated with the sale, nor did the broker know what proforma cap rates would be. The sales with reported or derived cap rates are discussed below. The sales represent operating movie studios and represent the going concern.

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107

Sunset Los Polmos Studios In May 2017, Hudson Pacific acquired Sunset Los Palmas Studios (formerly Hollywood Center Studios), a 373,150 SF media and entertainment campus with future development rights consisting of 13 stages, production offices and support space on 15 acres. They also purchased additional land which will be used for expansion/ renovation of the studios. The property, which was built in 1919, has played host to iconic television shows such as I Love Lucy, The Addams Family, and Jeopardy! as well as scores of films including The Karate Kid, When Harry Met Sally..., The Player and Hellâ€™s Angels. Sunset Las Palmas Studios offers 12 stages, with a mix of single camera and multi-camera productions. The primary focus is production requiring multi-

camera stages and control rooms, with notable current tenants including Comedy Central, ABC and The Walt Disney Company. Based on company filings including the 2017 annual K-10 report and the 2018 1 Q Q-8 report, the NOi for the eleven months following the acquisition for the property was $6.2M, indicating an annualized Year 1 NOi of $6.87M. The indicated cap rate would be 3.44% based on existing NOi. This seems low as compared to the other sales and discussions with market participants and given the buyerâ€™s plan to renovate and expand the studios, the cap rate based on existing NOi was probably not a primary metric in the purchase.

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108 Culver Studios Culver Studios is a 305,000 SF full-service studio located in Culver City, California. It is the former RKO and Desilu Studios, now owned by Sony Pictures. The property includes 14 soundstages totaling 154,193 SF, 54,266 SF of production office space (an additional 18,000 SF is leased from nearby property owners), 87,013 SF of studio support buildings, a commissary, and a 70-seat screening room. The studios also include a small back lot. A number of the buildings date back to the original construction of the studio in the early 1920â€™s (although they have been largely renovated). This studio sold in March 2014, at a reported price between $80M and $85M. Based on the reforecast net operating income in the marketing package, the overall capitalization rate was in the range of 5.53 to 5.87 percent based on the reported sales price range. It should be noted that the net operating income includes a management fee of only 1.25 percent. There

are significant uncertainties regarding whether the studio operations will continue, the site will be redeveloped, or the site will be partially redeveloped. The buyer has publicly stated the studio operations will continue; however, the indicated overall capitalization rate does not support this assertion. The property was being marketed for sale in mid-to-late 2002. No formal asking price was established during the marketing period, with the seller willing to execute a sale-leaseback if desired by the buyer. There were reportedly a number of potential buyers looking at the property, ranging from independent studio operators to residential developers. The property went under contract to a studio operator in late 2003 and a sale was closed in April 2004. It has been reported that most interest has been from developers who wish to redevelop at least a portion of the site for nonstudio uses. Based on the $73M purchase price and the selling brokerâ€™s proforma income and

expense range (which does not reflect a seller offered sale-leaseback), the sale indicates an overall capitalization rate between 8.90 and 9.55 percent. Based on the buyerâ€™s proforma, the sale indicates a 13.07 percent overall capitalization rate. In late 2007, the property was placed on the market with no formal asking price. There was interest in the property at an approximate price of $140M. Based on the proforma net operating income, the $140M yields an overall capitalization rate of 7.50 percent. Required holdbacks for an unfinished building and large increases in the projected net operating income in the offering memorandum resulted in the seller taking the property off the market, with an anticipated return to market in mid-2008 (after completion of construction and successful consummation of two leases to soap operas that will reportedly substantially increase revenue).

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109 Tribune Studios Tribune Studios is a 517,719 SF limited service studio located in the city of Los Angeles community of Hollywood. It was originally the Columbia Pictures Studios, but has been operated as an independent four-wall facility since 1972. The studio includes 12 soundstages totaling 156,646 SF, 350,318 SF of production office and studio support buildings (including a large theater), and a 10,833 SF restaurant. A number of the buildings date back to the original construction of the studio in the early 1920’s (although they have been largely renovated). The property was informally listed for several years in the early 2000’s. In mid-2002, the property was in escrow for $120M. The 2001 estimated net operating income was $10.36M indicating an overall capitalization rate of 8.6 percent. The property is a partial leasehold estate. The buyer planned to construct two new soundstages totaling 34,500 SF and 135,000 SF

of additional office space on the site. In addition, the existing buildings will be substantially renovated. The result is a projected substantial increase in the net operating income over the next four years. No sale was ever consummated, reportedly due to the buyer’s inability to obtain financing. In late 2007 (after the Tribune Company was acquired by Sam Zell), the property was placed on the market with no formal asking price. In December 2007, the property was in escrow to Hudson Capital (the buyer of the Sunset Gower Studios) for $142M. Net of excess land, the studio value was approximately $111.5M. Using this figure and the pro forma net operating income, the sale indicates an overall capitalization rate approximating 7.25 percent. No sale was consummated at this price, with a January 2008 sale between the parties involving prepaid rent by a Tribune Company subsidiary that makes deriving an overall capitalization rate difficult.

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110

Burbank Studios Burbank (former NBC) Studios is a 971,851 SF corporate television studio located in the city of Burbank. The studio includes eight soundstages totaling 83,058 SF, 470,175 SF of production and corporate office space, and 301,268 SF of storage and mill space. Most of the buildings were constructed in the 1950â€™s. The property included 750,000 SF in additional development rights. The property was marketed in early 2007. It was acquired in December 2007 by a prominent local developer who has numerous other projects in the city and adjacent communities. As part of the sale, NBC leased back the entire premises. The lease was written for a two-year term. The property was purchased for approximately $249.6M. Based on the contractual lease income, the sale indicates an

overall capitalization rate approximating 7.50 percent. The short-term nature of the lease and excess development rights make deriving an overall capitalization rate difficult. Shortly after the sale, the buyer developed a 485,000 SF building on a non-contiguous (separated by a public street) portion of the site.

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Sunset Gower Studios Sunset Gower Studios is a 517,184 SF studio located in the city of Los Angeles community of Hollywood. It includes 12 soundstages totaling 174,422 SF of soundstages, 194,982 SF of production office space, 91,733 SF of studio support space, 39,381 SF of storage space, and an 8,333 SF freestanding restaurant. In addition to the existing studio, the project includes an under-construction 114,958 SF building fully preleased to Technicolor.

In late 2007, the property was placed on the market with no formal asking price. There was strong interest in the property, with numerous offers received. The property was sold to a private investor for $205M. Deducting the value of the office building, the residual value to the studio was approximately $136M to $137M. Based on this range, an overall capitalization rate approximating 6.60 percent is indicated based on projected net operating income.

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112 Manhattan Beach Studios Manhattan Beach Studios is a 570,311 SF studio located in the city of Manhattan Beach, California. It includes 14 soundstages totaling 287,000 SF of soundstages, 62,977 SF of dressing room space, 122,864 SF of production office space, 39,669 SF of studio support buildings, and a 57,801 SF office building that is separate from the studio component. The property was marketed for sale in mid2000. The owners had reportedly been marketing the project directly since early 2000. It was taken off the market in the third quarter of 2000 due to uncertainties relating to potential writer and actor strikes. During the marketing period (and currently) the property was leased to 20th Century Fox (now David E. Kelley Productions) and Raleigh Enterprises. Reportedly, the existing leases made marketing the property difficult as they made the property unsuitable for an operator while the remaining lease terms were too short to underwrite. Exacerbating this, the Raleigh Enterprises lease does not include any reporting requirements, making it impossible for potential buyers to

determine the creditworthiness of the tenant. The property was originally listed at a price of $130M. In early 2002, the property was in escrow to a Canadian REIT for $112.8M (the price was reduced during the escrow period from $115M+/). Based on the actual 2001 net operating income of $11,663,188 (excluding atypical expenses), the indicated overall capitalization rate is 10.3 percent. It should be noted that there were material (positive) changes to the income during the escrow period. These related to a lease renewal by 20th Century Fox. It must also be noted that the overall capitalization rate does not reflect any business operations. The buyer was an owner operator who expected Raleigh Enterprises to vacate their portion of the premises and was planning on taking over Raleighâ€™s position. Due to the buyerâ€™s difficulties in creating a REIT, no sale was consummated. In early 2003, the property was under contract to the principals of Arden Realty (a REIT) for approximately $117.2M. Based on the 2002 actual operating results, the indicated overall

Analysis of Changes in Investment Market Conditions (Time Differences) Due to changes in investment market conditions, the older data is not directly relevant in estimating an appropriate overall capitalization rate for the subject. In order to chart these changes, we have reviewed overall capitalization rate data from available investor surveys. This data is shown on the next page..

capitalization rate is 10 percent. It was verbally reported that the buyer was expecting to renew the Raleigh Enterprises lease for at least a oneyear term. The overall capitalization rate remains relatively constant based on annualizing the first month projections included in our analysis (however, since both leases had the potential to expire in the first year, the relevance of this comparison is uncertain despite the buyerâ€™s intentions). For undisclosed reasons, the purchase contract was canceled. In late 2004, the property was sold to Oak Tree Capital Management for approximately $97M. Raleigh Enterprises had no lease in the property; however, the firm was hired to manage the property. Based on revised economics (which excluded the Raleigh lease), the indicated overall capitalization rate was 9.7 percent. In early 2007, the property was again marketed for sale. It was sold to a passive investor for $150M. Raleigh Enterprises will continue to manage the property. The indicated overall capitalization rate is 6.75 to 7.00 percent.

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113 OVERALL CAPITALIZATION TRENDS DATE

MARKET

CHANGE

l st Quarter 2007 2nd Quarter 2007 3rd Quarter 2007 4th Quarter 2007 l st Quarter 2008 2nd Quarter 2008 3rd Quarter 2008 4th Quarter 2008 l st Quarter 2009 2nd Quarter 2009 3rd Quarter 2009 4th Quarter 2009 l st Quarter 2010 2nd Quarter 2010 3rd Quarter 2010 4th Quarter 2010

7.73% 7.60% 7.55% 7.60% 7.47% 7.68% 7.60% 7.76% 8.20% 8.36% 8.77% 9.14% 9.36% 9.38% 9.15% 9.15%

-0.13% -0.05% 0.05% -0.13% 0.21% -0.08% 0.16% 0.44% 0.16% 0.41% 0.37% 0.22% 0.02% -0.23% 0.00%

1st Quarter 2007 to 3rd Quarter 2017 1st Quarter 2011 to 3rd Quarter 2017 1st Quarter 2012 to 3rd Quarter 2017

-0.63% -1.67% -1.48%

As shown, overall capitalization rates in the National Flex/R&D market were relatively stable in 2007 and 2008. The 2009 results show increases on a quarterly basis. Increases continued to the 2nd Quarter 2010. From the 2nd Quarter 2010 through the 3rd Quarter 2012 rates generally declined. They were stable through the 1st Quarter 2013, and then declined in the 2nd and 3rd Quarters 2013, with stability in the 4th Quarter 2013 and 1st Quarter 2014. Minor declines are shown through the 3rd Quarter 2017 which was the most recent survey for this asset type.

DATE

MARKET

CHANGE

l st Quarter 2011 2nd Quarter 2011 3rd Quarter 2011 4th Quarter 2011 1 st Quarter 2012 2nd Quarter 2012 3rd Quarter 2012 4th Quarter 2012 1 st Quarter 2013 2nd Quarter 2013 3rd Quarter 2013 4th Quarter 2013 1st Quarter 2014 2nd Quarter 2014 3rd Quarter 2014 2nd Quarter 2015 1st Quarter 2015 2nd Quarter 2015 3rd Quarter 2015 4th Quarter 2015 1st Quarter 2016 2nd Quarter 2016 3rd Quarter 2016 4th Quarter 2016 1st Quarter 2017 2nd Quarter 2017 3rd Quarter 2017

8.90% 8.75% 8.67% 8.71% 8.71% 8.65% 8.54% 8.54% 8.52% 8.15% 7.83% 7.83% 7.83% 7.75% 7.58% 7.53% 7.45% 7.23% 7.23% 7.15% 7.15% 7.15% 7.10% 7.05% 7.05% 7.10% 7.10%

-0.25% -0.15% -0.08% 0.04% 0.00% -0.06% -0.11% 0.00% -0.02% -0.37% -0.32% 0.00% 0.00% -0.08% -0.17% -0.05% -0.08% -0.22% 0.00% -0.08% 0.00% 0.00% -0.05% -0.05% 0.00% 0.05% 0.00%

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Analysis of Locational Differences All of the sales occurred in Los Angeles. As discussed, Los Angeles is the dominant location for film studios. On a relative basis, Los Angeles and Atlanta can be compared on the basis of return rate requirements for a more homogenous (and widely traded) investment type. For this comparison, we have relied on the office market as PWC publishes return rate data for both the Atlanta and Los Angeles markets. This data is summarized below.

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Overall Capitalization Rates Office Market As shown, the PwC Survey indicates that overall capitalization rate requirements in the Atlanta Office Market are well above Los Angeles and are also well above the national average. The average overall capitalization rate for office properties in the Atlanta market is 112 basis points above the Los Angeles market. All else being equal, we would expect overall capitalization rates for film studios to be 100 to 200 basis points higher in Atlanta than in Los Angeles.

Overall Capitalization Rate Conclusion via the Improved Sales Based on the overall investment market trends, it is our opinion that a current overall capitalization rate for a Los Angeles film studio would be in the range of 7.00% to 8.00% for the going concern. Reflecting higher investment market return requirements for the Atlanta market, we would expect the same property to achieve an overall capitalization rate in the range of 8.00% to 10.00% (reflecting a 100 to 200 basis point increase over the concluded Los Angeles return requirements).

INVESTMENT TYPE

OAR RANGE

AVERAGE

National Suburban Market Atlanta Market Los Angeles Market

4.35%-10.00% 5.00%-8.75% 4.00%-8.00%

6.61% 7.00% 5.88%

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Derivation From Investor Surveys Another method for estimating an appropriate overall capitalization rate for the subject is to review the criteria of major investors in the marketplace. This is often a check against other techniques. However, it may be a primary source on certain types of properties (build-to-suit, long-term leases,etc.). Given the special purpose nature of the subject, this data source is not directly applicable, but has been considered in our analysis.

OVERALL CAPITALIZATION RATES INVESTMENT TYPE

OAR RANGE

AVERAGE

Class A Class B Class C

3.75%-8.00% 4.50%-9.50% 5.50%- 12.00%

5.25% 6.27% 8.07%

5 .55%- 17 .58%

11.62%

PWC Warehouse National Data

3.00%-6.50%

4.95%

Indicated OAR

9.00%-11.00%

RealtyRates.com Special Purpose

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The subject is considered to be a Class A investment grade property. Based on the available survey data, it is our opinion that an overall capitalization rate in the range of 9.00% to 11.00% would be considered reasonable for the subject. It should be noted that the above rates are for real estate only, not going concern. It must be noted that film studio transactions have been very limited. The opinions reflect responses from an individual that is knowledgeable with prior sales in the industry and/or the market. The rates reflect the Southern California market. Similar to the earlier analysis, a 100 to 200 basis point load factor would be supported for the subjectâ€™s Atlanta location indicating a rate of 8.00% to 10.00% to be appropriate.

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Overall Capitalization Rate Conclusion In concluding an overall capitalization rate for the subject, we have considered the following factors. Negative Attributes Positive Attributes • Cost pressures within the industry are likely • The major filmed entertainment labor unions to limit revenue growth at the studios. all have contracts in-place, with no adverse • The dilution of viewership is labor issues expected. limiting advertising spending • Investment capital required to finance filmed (needed to support entertainment productions has returned to the networks in ordering new the market after being severely curtailed in television programs, and to a lesser late 2008 and 2009. degree, feature films). • Georgia has some of the most generous film • Additional competition is expected. incentives in the nation. • Other states have become more aggressive • The subject is proximate to Atlanta and in courting filmed entertainment productions. its business/visitor amenities, as well as its location in Covington, considered the • Film studios do not have long term leases. • The subject has a very short “Hollywood of the South”. history established revenues and expenses. • The subject was built to standards commensurate with Class A projects in the industry.

We have concluded that an overall capitalization rate of 11.25% would be appropriate for the subject based on the financial assumptions incorporated into our valuation.

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Market Value of the Going Concern

Going Concern of an operating studio facility is considered to consist of four components:

Movie and filmmaking studios are a unique form of real estate; in addition to land and improvements, they are a labor-intensive business that is extremely dependent on the management team and operations coordination. Unlike other forms of real estate, such as office buildings, which are typically encumbered by long-term leases, these facilities require transportation elements, equipment maintenance and operations, and a wide variety of operational activities. The ability to manage the long-term operation of the facilities also requires the expertise of an operator to maximize the facility as it relates to engineering, compliance and coordination with various vendors. Overall, the Market Value of the

Overall, the Market Value of the Going Concern of an operating studio facility is considered to consist of four components: 1. .Value of land - real estate 2. Value of improvements - real estate 3. Value of business or good will 4. Value of the M&E (Machinery & Equipment), which is not included herein. The total of these four components equates to the Market Value of the Going Concern of the subject property as a whole.

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DESIGN TEAM

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Michael Warwick Michael received his first unlimited General Contractors License for the state of North Carolina in 1975. From 1976 to 1980, he was a partner of MLT construction specialized in Plumbing and Mall Construction. In 1981, Michael Started MLW Construction Building in the commercial field as an independent contractor for Management Resource Systems. In 1986 he relocated to Atlanta Georgia married and started ML Warwick Inc. continuing the commercial field. ML Warwick Inc. has acquired GC Licensing in States listed below to meet their Client’s needs.

Projects • • • • • • • • • •

• • • • •

Mall additions Mall Renovations Chain Retail stores Food chains Strip Malls with Food Lion Grocery Anchor Twin field Indoor Soccer Center owned by the Atlanta Silverbacks with attached offices Shell and office buildouts Learning Centers Residential and land development College Additions and renovation for GeorgiaState and North Georgia state University Medical and Dental care facilities Samsung regional display Center Data control center below and above grade High security facilities Fitness Facilities.

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Patricio Rios Cornejo My career has led me to specialize increasingly in the management of complex projects with companies based on diverse industries. I have experience in: strategic forward-finance planning; operating within the tight financial disciplines imposed by ambitious budgets which I have helped to plan; methodical administration to deadlines and the application of modern leadership methods (through staff motivation and involvement in both decision-making and target-setting, clarity in communication, and easy personal inter-relations).

• Proactive, MBA-educated professional offering consistent record of reducing costs and providing long and short-term usage planning. Able to establish and manage departments and processes. • Expertise in reporting and analysis • Outstanding presentation and leadership skills. • Proficient manager who has directed and managed up to 180 professional, technical, and support staff, as well as operating budgets of up to $30 million • Successfully developed largest project in Ecuadorian Breed Association history, producing $1 million in added revenue. • Proven leader with exceptional analytical, communication and interpersonal skills and a thorough knowledge of higher education administration. • Senior Partner Moores Rowland International • Senior Partner Marcus Research & Technology • Partner Lemontree – Senior Partner Tree Group • Partner Grupo Mediterraneo MRT – Alliance with Cognodata Spain

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Key Competencies • • • • • • • • •

Tested management techniques Budget design and monitoring Integrity & Ethics Leadership Teamwork Training Recognition Communication Continuous

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124 Professional Experience Finance Specialist: 20 years of professional experience in Strategic Finance Processes. Vast experience in launching complex projects with governmental and non governmental institutions. • Advisor in Corporate finance field and Strategic Planning Processes • Valuation • Process Improvement • Financial Products Development • Cost Efficiency Analysis • Successfully improve business processes that increased available cash flow and provided funding for organic business growth. Financial Advisor, Process Consultant: For the National Telecommunications Consortium, Claro, Gamavision State Television Station, Maresa Car Assembler, Solidario Bank, Andinatel State Telcommunication Company , Totaltek Fiber optic installation company, Cialco Hotels Chain, Pichincha Bank and Produbanco Bank, the Martinizing group (8 companies), German International Cooperation, Rain Forest Alliance-USAID, among the main ones. ISSFA - Financial Feasibility Analysis of construction projects with the State.

International Consultant Tree Group Projects carried out for the Government of Ecuador, different State Institutions, Modernization of the State through the application of state-of-the-art administrative and technological tools. Financial Vice-president: For a group of companies that belonged to Pichincha Bank and Produbanco Bank • Financial risk management and treasury functions related to portfolio resources. • Control of a base greater than 42 million in global assets, with direct risk of exposure of business and securities, including new challenges. • 25% of the return on investment was produced through a cost reduction strategy. Financial and Administrative Vice-president: For a group of companies belonging to the Martinizing Group, in charge of several accounting and treasury departments with more than 200 control points of sale and 18 production plants in Ecuador. • Development, Implementation and monitoring of successful franchise expansion projects (Martin Franchises) in Lima - Peru and Miami – United States. • As a result of management in three years, the operating profitability of the group tripled. • In charge of two accounting managers, one financial manager, and four treasury managers.

Administrative-Finance Manager: Administrative and Financial Director of the Cattle Board in Ecuador • Project Development for Milk Powder Plant. A U$28 million investment project implantation. • Financial Projects presentation for Government and Banking institutions. • Reduced bad debt turnover 400%. Strategic Project Manager: Fybeca (largest pharmacy chain in Ecuador) • In addition to strategic planning, responsible of further important tasks in charge for Strategic and Operational Development of new services concepts for pharmacies. • Development of Fidelity Mechanisms for the chain, providing strategic and operational leadership in the industry. • Responsible of analysing trends and opportunities in the pharmacy fields of competence to inform policies and actions at the management level. • Formulation of strategies and plans as a contribution to the chain growth while coordinating the overall work planning and reporting processes. • Managing the monitoring and evaluation components of the national pharmacy growth programme planning cycle.

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Professional Experience (cont'd) Product Manager (Vital Card): Fybeca Product Manager (largest pharmacy chain in Ecuador) • Primary responsibility for planning, supervising implementation, monitoring/ evaluation and reporting of Vital Card programme. • Development of scenario planning and strategic option analysis. • Training and development of departmental staff. • Continues improvement projects focusing on medium and long-term objectives.

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Special Projects Adviser Member of the Governmental National Secretary in Ecuador • Coordinator between Ecuador and the United Nations Institutions. • Support in development projects between UNESCO and CALAI Consulting Partner – Moores Rowland International Consulting Partner-Marcus Research & Technology Valuation of Companies for the State Education And Professional Development • Bachelor of Science in Informatics Engineering, Concentration of Information Systems Engineering, Degree in Mathematical Algorithms. ESPE University Quito, Ecuador. Note: Ranked second among the graduates of the academic year. • Bachelor of Business Administration, ESPE University. Quito, Ecuador. Note: Ranked first among the graduates of the academic year. • MBA Business Administration, Monterrey Technology Institute and ESPE Quito, Ecuador. (Ranked first among the graduates of the academic year).

Related Skills • Proven leadership and human management skills • Budget design and monitoring • Time-efficient, systematic working methodology • Rapid adaptability to new problem-solving and new locations • Finance professional with more than ten years of experience in corporate finance, investment portfolio management, and capital asset oversight. • Quick learner with an ability to easily research new investment opportunities, assess potential profitability, capitalize on new business ventures, and plan/execute innovative strategies. • Excellent communication, interpersonal, strategic planning, financial analysis, problem solving,organizational and leadership skills. Resourceful in resolving emerging problems. Design Financial Methodology: Methodology for Costs Analysis and Companies Financial valuation Languages: Fluent in Spanish and English French

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Alex Paulson Alex Paulson has over thirty years of experience in design, production of contract documents, and administration of construction contracts with a primary project focus in retail, office, mixed use, and special commercial projects. He has been responsible for the design and renovation of several award winning retail shops, neighborhood retail centers, and childcare facilities.

Alex is a member of the Urban Land Institute, International Council of Shopping Centers, the Roswell Historic District Design Review Board, the Historic Roswell Alliance, Roswell CVB, and the Holy Transfiguration Parish Council. He served on the City of Milton Design Review Board, responsible for the preservation and perpetuation of the rural commercial communities that are within the limits of the City of Milton, and the Fulton County Design Review Board, instrumental in the architectural design approval for the Birmingham and Crabapple Crossroads developments.

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John Stantz John Stantz has over thirty years of experience in the construction industry, with ten plus years design experience, focusing on industrial and distribution facility design. He is responsible for all industrial activities and oversees all industrial projects. John effectively coordinates complex projects and he has the ability and experience to organize and disseminate large amounts of information to and between client, consultant, contractor and RPA staff.

With a specialization in tilt-up construction, he understands the issues associated with tilt and is knowledgeable in all aspects of this building type. As a LEED AP BD+C, he is on the leading edge of the sustainable movement and is well versed in the various aspects of high performance building technology.

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Brenton Klopp As the Senior 3D Specialist, Brenton works closely with the design team to create project renderings, videos, and animations. Brenton has six years of experience and understands the many aspects of design and building production. He has helped implement new programs and design approaches including our visualization services. Brenton leads our internal visualization studio, studio four point zero.

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David Hovey - Hovey & Associates Hovey & Associates, Inc. and/ or David G. Hovey has been in private consulting engineering practice for over 26 years (with over 32 years of experience in the field of Civil Engineering) . As President of Hovey & Associates, I have vast knowledge and experience with many facets of civil design in regards with the land planning arena such as initial land planning, preparation of site plans, grading plans, silt, erosion & pollution control plans, street profiles, water distribution plans, sanitary sewer system designs, hydrology studies and detention basin designs and coordination with Land Surveyors and General Contractors.

Part of every project involves cooperation and coordination with various government agencies both at local levels and State levels. Hovey & Associates is primarily a civil design company with expertise in land planning & development. This firm has Worked extensively in southern metro counties on many engineering projects -residential, commercial and industrial. Hovey & Associates has been responsible for the design and engineering of over 200 residential subdivisions. Residential subdivision in Fayette County include: Horsemens Run, Highgrove, Highland Park, New Haven, Haddonstone, The Lakes of Wintergreen, Smokerise (last 2 phases), Smokerise @Sumner Place, Bellfair Walk Preserves, Olivia Estates, Wrightsburg S/D, Irish Village, Laurel Forest, The Ranch, Argonne Forest, Ellens Ridge. Longboat -Phase 2, Atkins Place, Fairbrook S/D. Stonecrest S/D, The Registry @ Stonecrest, Maggieâ€™s Place, Emerson Woods.

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CONTACT

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Contacts Steve Brain steve@brainmedia.us Josh Deu josh@decalreproductions.com Dimitris Anagnostou dimitris@decalreproductions.com Todd Brooks todd@brookesrealestatedevelopment.com 678.695.3369