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Attachment 3 Page 2 of 2 Rental Concessions:Although vacancy rates for office are higher in most sectors than retail or industrial, the Roseville market is stronger than some other segments with the Minneapolis and St. Paul CBD’s significantly softer. We are seeing some free rent granted as a concession for all product types. Office may be as much as one month per year of term and may be net or gross. Retail or Industrial will be less, but 1 to 3 months is still typical for leases of at least five years. Generally, leases commence upon the completion of all the tenant’s improvements with rent commencing on the completion of the work and applicable rental concessions. Security Deposits: Security deposits equal to one month’s rent are common for most leases with additional security in the form of a letter of credit or personal guaranty applicable depending on the financial strength of the tenant and total sum of the landlord’s out-of-pocket transaction costs. Based on the strength of the City of Roseville a small or no security deposit may be feasible. Purchase Options: The purchase of a smaller freestanding office, retail or industrial property may also be a viable solution if an ideal property can be secured. Office property values can range anywhere from $75.00/SF to $200.00/SF depending on age, size, quality and location. Retail properties may vary from $100.00/SF to $250.00/SF again depending on these same factors. Industrial properties values again may vary from $90.00/SF to as much as $170.00/SF for new construction. We had an 11,843 SF office building at 1781 W Co Rd B in our search. This office property was listed at $1,700,000 or $146.80/SF and is currently under contract. We also had the Golf Galaxy building located at 2436-2440 Cleveland Ave N in our search. This 30,000 SF retail building is being sold to a Grocer at an estimated price of $5,800,000 or $193.33/ft. Built to Suit:This will be the most costly alternative but may still be worth consideration especially on the City owned land. Construction costs alone for a smaller single-story or a two-story building may range anywhere from $250.00/SF on the lower end to as much as $300.00/SF or more on the upper end depending on improvements. If you need any additional information or have any questions about the information provided, please don’t hesitate to reach out to us. Sincerely, Steven V. Chirhart, SIOR Ronald K. Moss svc@tatonkare.com rkm@tatonkare.com (651) 260-4444 (612) 466-7307 Qbhf!64!pg!488