The subject is influenced in a general manner by the economic, political, physical and social characteristics of the Cincinnati-Middletown,
OH-KY-IN Metropolitan Statistical Area (MSA).  An MSA is a geographic area with a significant population nucleus, along with any
adjacent communities that have a high degree of economic and social integration with that nucleus.  The Cincinnati MSA includes 15
counties throughout the states of Ohio, Kentucky, and Indiana. The following counties make up the Cincinnati- Middletown, OH- KY- IN
Metropolitan Statistical Brown County, Butler County, Clermont County, Hamilton County, Warren County, Boone County, Bracken
County, Campbell County, Gallatin County. Grant County, Kenton County, Pendleton County, Dearborn County, Franklin County, and
Ohio County.

The value of real property is influenced by the interaction of four basic forces.  These forces include social trends, economic
circumstances, environmental conditions, and governmental controls and regulations.  The interaction of these four forces influences
the value of every parcel of real estate in the market.


Social forces are trends that are exerted primarily through population characteristics.  Real property values are affected not only by
population changes and characteristics, but also by various forms of human activity.

Population and Area:         

Population growth trends influence employment growth, income levels, and many other key demand parameters analyzed in determining
commercial real estate productivity.  The MSA shows positive growth trends.

Higher Education:         

Institutions of higher learning typically are not as vulnerable to economic downswings, and they help to provide an area with a more solid
employment base.  

Institutions of higher learning typically are not as vulnerable to economic downswings and help provide an area with a more stable
employment base.  The Cincinnati PMSA has many universities and colleges.  University of Cincinnati is the largest with an enrollment of
±33,000, followed by Miami University of Ohio with ±20,500, and Northern Kentucky University with ±12,500 students.  There are five
other colleges and universities as well as twelve additional local colleges and technical schools that serve the area.  

Recreational and Regional Attractions:         

Recreational and regional attractions enhance an area’s quality of life.  These activities may also have a significant economic impact on
an area by increasing the demand for services and retail trade created by visitors. The Cincinnati area offers entertainment, cultural,
recreational, and regional activities.

The Cincinnati PMSA is home to a large number of cultural and entertainment opportunities.  Cincinnati Art Museum is one of many
museums in the area.  It offers special temporary exhibitions along with their usual displays.  The art museum even has a Cincinnati wing
that celebrates accomplishments of Cincinnati artists.  Cincinnati Museum Center is another museum in the area and it features a History
museum that includes Natural History, Science History, a Children’s museum, and an Omnimax theater.

Cincinnati is home to a National Football League team, the Cincinnati Bengals, and a Major League Baseball team, the Cincinnati Reds.  
The Cincinnati Bengals’, Paul Brown Stadium, covers ±22 acres and is 157 feet high.  The stadium has seating for 65,535.  The
Cincinnati Reds just opened a new field called The Great American Ball Park, which has a seating capacity of 42,059.


Economic forces are the fundamental relationships between current and anticipated supply and demand and the economic activities in
which the population participates in order to satisfy its wants, needs, and demands through its purchase power.  

Major Employers

The major employers overall are in trend with the sector employment.  The major employers in the MSA are Kroger Company, University
of Cincinnati, The Procter & Gamble Company, and Cincinnati Children’s Hospital Medical Center.  The major employers indicated with
(**) are Fortune 1000 companies headquartered in Greater Cincinnati.

Sector Employment

The chart below indicates the employment by sector for both the state and the MSA per the US bureau of labor.  As shown the overall
employment composition for both the MSA and state are similar and diverse indicating a stable economic base.  Overall, the MSA and
the state of Ohio have similar sector employment.


Environmental forces are both natural and manmade forces that influence real property values. Some environmental forces include
climactic conditions, natural barriers to future development, primary transportation systems, and the nature and desirability of the
immediate areas surrounding a property.  

Transportation:         Interstate 74 runs from Cincinnati through Indianapolis to the Quad City area.  I-71 runs from Cleveland through
Cincinnati to Louisville.  I-75 extends north past Detroit and south to Atlanta and Miami.  I-275 is Cincinnati's outerbelt (it was completed
in the early 1980s); I-471 is a short commuter highway, as is the Ronald Reagan Highway (SR 126).

Cincinnati lies on the north side of the Ohio River.  Much of its early development is owed to the Ohio River, as shipping was the most
economical mode of bulk transportation in the pre-automotive days.  The Port of Cincinnati is open to this day.  It is generally navigable
throughout the year, handling about 46 million tons of commerce annually.

There are a number of railroad systems through the PMSA.  CSX Transportation, Norfolk Southern Corporation, Conrail, and the Indiana
and Ohio RR/RY serve the area with 175 miles of mainline track.

Cincinnati is serviced by the Cincinnati/Northern Kentucky International Airport.  In 2003, it was named the Number 1 Airport in the USA,
by International Air Transportation Associations, and one of the top 10 worldwide.


Governmental, political and legal actions at all levels have an impact on property values. The legal climate of a particular time or in a
particular place may overshadow the natural market forces of supply and demand.  


Our review of the above data indicates that the Cincinnati metropolitan area has a growing economy, evidenced by a stable economic
base, low unemployment rates, and a growing population.  The area also features numerous regional attractions and an excellent
transportation system.  Recently, the nationwide recession has impacted the area and it will continue to have some lingering effects.  On
a short time horizon, the lingering effects of the recession will have a negative impact on the real estate market in general.  On a longer
time horizon, given the dynamics of the region, it is anticipated that the economic outlook for the MSA will be favorable for the overall
success of the subject.  
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