NOTE 3 – REAL ESTATE

The estimated net realizable value of owned real estate, including land, building, building improvements and air rights, amounted to $157.7 million and $142.6 million as of March 1, 2014 and March 2, 2013, respectively. While $157.7 million represents management’s best estimate of the net realizable value of the Company’s real estate properties at the time of finalizing the accompanying consolidated statement of net assets, the amount ultimately realized in the monetization of the real estate could materially differ from this estimate.

The Company adjusted the carrying value of the real estate assets to reflect the estimated net realizable value of owned property. This value was estimated by considering a number of factors, including but not limited to, input from a third party valuation expert, sales agreements, letters of intent and broker opinions.

The net realizable value of real estate assets was estimated after developing a likely range of values for each of the properties, then selecting a value within each properties range (not necessarily the mid-point) and aggregating those selected values. The ultimate sales price obtained by the Company with respect to any one or all of the properties may vary materially from these estimates based upon numerous factors, including but not limited to macro and local market conditions, the potential for the Company or a prospective buyer to lease the property or to redevelop it, physical and legal (e.g., title) conditions affecting the property, the Company’s ability to deploy capital for leasing activity or to repair or cure issues with respect to the properties, and the ability to carry the properties through a customary or prolonged marketing process.

The estimate of value of the Trinity Place Property is subject to a number of complex factors which could materially affect the value of the property. The estimate of value for this property is subject to additional uncertainty due to the inherent complexities and uncertainties of monetizing the site as a Lower Manhattan mixed use development project, whether developed by the Company or a third party, including zoning and planning issues, hard and soft costs of construction, potential rents or prices of commercial and/or residential space and the mix thereof, the availability of capital to support development, the availability of tax incentives, and competitive projects and forces in the market that are unique to Lower Manhattan. The Company is in the process of analyzing these and other factors, and its estimate of value may change materially as its analysis proceeds. The Company has retained advisors, including architects, construction experts and attorneys to assist it in its evaluation and review of cost estimates and monetization strategies. To date no specific course of action has been determined. As a result, there remains a range of estimated values that may be realized for the Trinity Place Property under the various sale or development alternatives.

The Company expects to continue evaluating the best ways in which to monetize its remaining assets for the benefit of stockholders and creditors.