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MARKET ANALYSIS <br /> Introduction <br /> Market Analysis identifies the interaction of the four forces on supply and demand, which in turn <br /> directly influences the value of real property.The four forces are categorized as follows: <br /> 1) Economic <br /> 2) Governmental <br /> 3) Social <br /> 4) Environmental <br /> The subject property is located in the City of Ramsey in the northwest Retail submarket of the <br /> Minneapolis/St. Paul/Bloomington MSA. <br /> Economic Analysis <br /> The following profile of the Minneapolis/St. Paul/Bloomington MSA was provided by Moody's <br /> Economy.com. Economy.com's core assets of proprietary editorial and research content as well <br /> as economic and financial databases are a source of information on national and regional <br /> economies, industries, financial markets, and demographics. <br /> Economy.com's approach to the analysis of the U.S. economy consists of building a large-scale, <br /> simultaneous-equation econometric model, which they simulate and adjust with local market <br /> information, creating a model of the U.S. macro economy that is both top-down and bottom-up. <br /> In this model, those variables that are national in nature are modeled nationally while those that <br /> are regional in nature are modeled regionally. Interest rates, prices, and business investment are <br /> modeled as national variables; key sectors such as labor markets (employment, labor force), <br /> demographics (population, households, and migration), and construction activity(housing starts <br /> and sales) are modeled regionally and then aggregated to national totals. This approach allows <br /> local information to influence the macroeconomic outlook. Therefore, changes in fiscal policy at <br /> the national level (changes in tax rates, for example) are translated into their corresponding <br /> effects on state economies. At the same time, the growth patterns of large states, such as <br /> California, New York, and Texas, play a major role in shaping the national outlook. In addition, <br /> on a regional basis, the modeling system is explicitly linked to other states through migration <br /> flows and unemployment rates. Economy.com's model structure also takes into account <br /> migration between states. <br /> 35 <br />